ASSET PURCHASE AGREEMENT



      This Asset Purchase Agreement (the "AGREEMENT") is entered into as of

February 8, 2007 by and among Skilled Healthcare Group, Inc., a Delaware

corporation, (the "BUYER"); Raymore Care Center LLC (doing business as Raymore

Health Care), a Missouri limited liability company, Blue River Care Center LLC

(doing business as Blue River Care Center), a Missouri limited liability

company, MLD Healthcare LLC (doing business as Cameron Manor), a Missouri

limited liability company, Blue River Real Estate LLC, a Missouri limited

liability company, Raymore Real Estate LLC, a Missouri limited liability

company, and MLD Real Estate LLC, a Missouri limited liability company (each a

"COMPANY" and collectively, the "COMPANIES"); Melvin Dunsworth, an individual,

and Raymore Health Care, Inc., a Missouri corporation (the "BENEFICIAL OWNERS,"

and together with the Companies, the "SELLERS"). The parties acknowledge that

Buyer may assign any or all of its rights hereunder to one or more Affiliates,

and references herein to "Buyer" shall include any such assignees. An index of

defined terms used herein is set forth in ARTICLE 10.



                                  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 Buyer 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".



      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 Buyer

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 Real Property (as defined);



      (b) all tangible assets, including without limitation machinery and

equipment, furniture, office equipment, leasehold improvements, fixtures and

other improvements on real



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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, permits, sale orders, purchase orders, open bids and other

commitments, but only to the extent they pertain to the operating contracts

specifically assumed by Buyer under the Operations Transfer Agreement (the

"ASSUMED OPERATING CONTRACTS").



1.2 EXCLUDED ASSETS. Notwithstanding the foregoing, the Companies shall not

transfer to Buyer, 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 Million Dollars

($30,000,000).



      (b) At the Closing, Seller has and will transfer to Buyer good and

marketable fee simple title to all Owned Real Property free and clear of all

encumbrances, except for Permitted Encumbrances.



      (c) DEPOSIT AT SIGNING. Upon the execution of this Agreement by all of the

parties, an earnest money deposit in the amount of Two Hundred Fifty Thousand

Dollars ($250,000) (the "DEPOSIT") shall be delivered by Buyer 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 Buyer

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 Buyer 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 Buyer 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



                                       2



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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, Buyer shall pay to the Companies

an amount, in the aggregate, equal to the Purchase Price (i) less the Deposit

and all accrued interest thereon, 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 Buyer, 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 Raymore Care Center LLC, Blue River

Care Center LLC, and MLD Healthcare LLC, and Buyer and the Medicaid Escrow Agent

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