EX-10.43 13 a2179557zex-10_43.htm EXHIBIT 10.43

Exhibit 10.43

$20,000,000.00

AMENDMENT NO. 5 TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

originally dated as of March 25, 2004 by and among

THE ENSIGN GROUP, INC., ENSIGN WHITTIER WEST LLC,
ENSIGN WHITTIER EAST LLC, ENSIGN SANTA ROSA LLC, ENSIGN PANORAMA LLC, ENSIGN SABINO LLC, ENSIGN SAN DIMAS LLC, ENSIGN MONTGOMERY LLC,
ENSIGN PALM I LLC, ENSIGN SONOMA LLC, ENSIGN CLOVERDALE LLC,
ENSIGN WILLITS LLC, ENSIGN PLEASANTON LLC,
24TH STREET HEALTHCARE ASSOCIATES LLC,
GLENDALE HEALTHCARE ASSOCIATES LLC,
ATLANTIC MEMORIAL HEALTHCARE ASSOCIATES, INC.,
ROSE PARK HEALTHCARE ASSOCIATES, INC.,
LEMON GROVE HEALTH ASSOCIATES LLC,
PRESIDIO HEALTH ASSOCIATES LLC, BELL VILLA CARE ASSOCIATES LLC,
DOWNEY COMMUNITY CARE LLC, COSTA VICTORIA HEALTHCARE LLC,
WEST ESCONDIDO HEALTHCARE LLC, REDBROOK HEALTHCARE ASSOCIATES LLC,
HB HEALTHCARE ASSOCIATES LLC, NORTH MOUNTAIN HEALTHCARE LLC,
PARK WAVERLY HEALTHCARE LLC, SUNLAND HEALTH ASSOCIATES LLC,
VISTA WOODS HEALTH ASSOCIATES LLC, CITY HEIGHTS HEALTH ASSOCIATES LLC,
CLAREMONT FOOTHILLS HEALTH ASSOCIATES LLC,
C STREET HEALTH ASSOCIATES LLC, VICTORIA VENTURA HEALTHCARE LLC
RADIANT HILLS HEALTH ASSOCIATES LLC, HIGHLAND HEALTHCARE LLC,
GATE THREE HEALTHCARE LLC, SOUTHLAND MANAGEMENT LLC,
MANOR PARK HEALTHCARE LLC, NORTHERN OAKS HEALTHCARE, INC.,
SALADO CREEK SENIOR CARE, INC., MCALLEN COMMUNITY HEALTHCARE, INC.,
WELLINGTON HEALTHCARE, INC.
(collectively, "Borrower")

and

GENERAL ELECTRIC CAPITAL CORPORATION
("Lender")

Amended as of September 13, 2007


AMENDMENT NO. 5 TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT

        THIS AMENDMENT NO. 5 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this "Amendment") is made as of this 13th day of September, 2007 (the "Effective Date"), by and among THE ENSIGN GROUP, INC., a Delaware corporation, ENSIGN WHITTIER WEST LLC, a Nevada limited liability company, ENSIGN WHITTIER EAST LLC, a Nevada limited liability company, ENSIGN SANTA ROSA LLC, a Nevada limited liability company, and ENSIGN PANORAMA LLC, a Nevada limited liability company, ENSIGN SABINO LLC, a Nevada limited liability company, ENSIGN SAN DIMAS LLC, a Nevada limited liability company, ENSIGN MONTGOMERY LLC, a Nevada limited liability company, ENSIGN CLOVERDALE LLC, a Nevada limited liability company, ENSIGN PALM I LLC, a Nevada limited liability company, ENSIGN SONOMA LLC, a Nevada limited liability company, ENSIGN WILLITS LLC, a Nevada limited liability company, ENSIGN PLEASANTON LLC, a Nevada limited liability company, 24th STREET HEALTHCARE ASSOCIATES LLC, a Nevada limited liability company, GLENDALE HEALTHCARE ASSOCIATES LLC, a Nevada limited liability company, ATLANTIC MEMORIAL HEALTHCARE ASSOCIATES, INC., a Nevada corporation, and ROSE PARK HEALTHCARE ASSOCIATES, INC., a Nevada corporation, LEMON GROVE HEALTH ASSOCIATES LLC, a Nevada limited liability company, PRESIDIO HEALTH ASSOCIATES LLC, a Nevada limited liability company, BELL VILLA CARE ASSOCIATES LLC, a Nevada limited liability company, DOWNEY COMMUNITY CARE LLC, a Nevada limited liability company, COSTA VICTORIA HEALTHCARE LLC, a Nevada limited liability company, WEST ESCONDIDO HEALTHCARE LLC, a Nevada limited liability company, REDBROOK HEALTHCARE ASSOCIATES LLC, a Nevada limited liability company, HB HEALTHCARE ASSOCIATES LLC, a Nevada limited liability company, NORTH MOUNTAIN HEALTHCARE LLC, a Nevada limited liability company, PARK WAVERLY HEALTHCARE LLC, a Nevada limited liability company, SUNLAND HEALTH ASSOCIATES LLC, a Nevada limited liability company, VISTA WOODS HEALTH ASSOCIATES LLC, a Nevada limited liability company, CITY HEIGHTS HEALTH ASSOCIATES LLC, a Nevada limited liability company, CLAREMONT FOOTHILLS HEALTH ASSOCIATES LLC, a Nevada limited liability company, C STREET HEALTH ASSOCIATES LLC, a Nevada limited liability company, and VICTORIA VENTURA HEALTHCARE LLC, a Nevada limited liability company, RADIANT HILLS HEALTH ASSOCIATES LLC, a Nevada limited liability company, HIGHLAND HEALTHCARE LLC, a Nevada limited liability company, GATE THREE HEALTHCARE LLC, a Nevada limited liability company, SOUTHLAND MANAGEMENT LLC, Nevada limited liability company, MANOR PARK HEALTHCARE LLC, a Nevada limited liability company, NORTHERN OAKS HEALTHCARE, INC., a Nevada corporation, SALADO CREEK SENIOR CARE,  INC., a Nevada corporation, McALLEN COMMUNITY HEALTHCARE, INC., a Nevada corporation, WELLINGTON HEALTHCARE, INC., a Nevada corporation (collectively "Borrower"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("Lender").

RECITALS

        A.    Pursuant to that certain Amended and Restated Loan and Security Agreement dated as of March 25, 2004 by and between Borrower and Lender (as amended, modified and restated from time to time, the "Loan Agreement"), the parties have established certain financing arrangements that allow funds to be borrowed from Lender in accordance with the terms and conditions set forth in the Loan Agreement.

        B.    The parties now desire to amend the Loan Agreement in accordance with the terms and conditions set forth below.

        NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties have agreed to the following amendments to the Loan

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Agreement. Capitalized terms used but not defined in this Amendment shall have the meanings that are set forth in the Loan Agreement.

        1.    Amendment to Loan Agreement    Section 2.8(a) of the Loan Agreement is hereby amended by deleting the existing Section 2.8(a) in its entirety and by inserting in lieu thereof the following new Section 2.8(a):

    "(a)    Subject to Lender's right to cease making Revolving Credit Loans to Borrower upon or after any Event of Default, this Agreement shall be in effect until November 19, 2007, unless terminated as provided in this Section 2.8 (the "Term")."

        2.    Real Estate Loan Documents.    The parties acknowledge and agree that (i) the terms of the financing made pursuant to the Real Estate Loan Documents (the "Fixed Asset Loan") have materially changed since the Loan Agreement was executed and that the parties intended to exclude any requirement that the Fixed Asset Loan be prepaid upon termination or expiration of the Loan Agreement and (ii) notwithstanding anything to the contrary in the Loan Agreement or related documents, Borrower shall in no event be required to prepay the Fixed Asset Loan or be deemed to be in default for failure to prepay the Fixed Asset Loan upon termination or expiration of this Loan Agreement.

        3.    Temporary Commitment Increase.    

        a.     The Maximum Loan Amount shall be increased from $20,000,000 to $25,000,000 (the "Temporary Maximum Loan Amount") on a temporary basis from the Effective Date until the date that is sixty (60) days from the Effective Date (the "Temporary Maximum Loan Amount Increase"). The temporary increase in the Maximum Loan Amount shall be evidenced by that certain promissory note attached as Exhibit A hereto (the "Overline Note").

        b.     During the term of the Temporary Maximum Loan Amount Increase, Clause (b) of Section 1.45 of the Loan Agreement shall be temporarily amended and restated in its entirety as follows; provided that after the term of the Temporary Maximum Loan Amount Increase, Clause (b) of Section 1.45 of the Loan Agreement shall be amended and restated in its entirety to the language in effect prior to giving effect to this Amendment:

            "(b) the Account remains unpaid more than one hundred fifty (150) days past the claim or invoice date (but in no event more than one hundred five (165) days after the applicable Medical Services have been rendered);"

        4.    Confirmation of Representations and Warranties.    Borrower hereby (a) confirms that all of the representations and warranties set forth in Article IV of the Loan Agreement are true and correct, and (b) specifically represents and warrants to Lender that it has good and marketable title to all of its respective Collateral, free and clear of any lien or security interest in favor of any other person or entity, except as identified in Schedule 1.39 and Schedule 4.19 to the Loan Agreement, each as updated, and as otherwise permitted pursuant to the Loan Agreement.

        5.    Effective Date.    This Amendment shall be effective upon Lender's receipt of this Amendment executed by a duly authorized member and/or officer of each Borrower; provided that Borrower, as a condition to the effectiveness of this Amendment, agrees that, upon demand of Lender at any time after the date of this Amendment, to cause each of Ensign's subsidiaries that (a) is a skilled nursing facility operator; (b) does not constitute a Borrower under the Loan Agreement and (c) would be necessary to provide a sufficient Borrowing Base to support the advance made pursuant to the Overline Note, as determined by the Lender in its sole discretion, to execute a Security Agreement, in form and substance reasonably satisfactory to Lender, granting Lender a security interest in any and all of the Accounts of such subsidiaries.

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        6.    Fees and Expenses.    Borrower shall be responsible for the payment of all costs and expenses incurred by Lender in connection with the preparation of this Amendment including any and all fees and expenses of Lender's in-house counsel.

        7.    Updated Schedules.    As a condition precedent to Lender's agreement to enter into this Amendment, and in order for this Amendment to be effective, Borrower shall revise, update and deliver to Lender all Schedules to the Loan Agreement to update all information as necessary to make the Schedules previously delivered correct. Borrower hereby represents and warrants that the information set forth on the attached Schedules is true and correct as of the date of this Amendment. The attached Schedules are hereby incorporated into the Loan Agreement as if originally set forth therein.

        8.    Enforceability.    This Amendment constitutes the legal, valid and binding obligation of each Borrower and is enforceable against each such Borrower in accordance with its terms.

        9.    Reference to the Effect on the Loan Agreement.    

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

        (b)   Except as specifically amended above, the Loan Agreement and all other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

        (c)   The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided in this Amendment, operate as a waiver of any right, power or remedy of Lender, nor constitute a waiver of any provision of the Loan Agreement or any other documents, instruments and agreements executed or delivered in connection with the Loan Agreement.

        (d)   This Amendment (together with any other document executed in connection herewith) is not intended to be, nor shall it be construed as, a novation of the Loan Agreement.

        10.    Governing Law.    This Amendment shall be governed by and construed in accordance with the laws of the State of Maryland.

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

        12.    Counterparts.    This Amendment may be executed in counterparts, and such counterparts taken together shall be deemed to constitute one and the same instrument.

[SIGNATURES FOLLOW]

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        IN WITNESS WHEREOF, intending to be legally bound, the parties have caused this Amendment to be executed as of the date first written above.

    LENDER:

 
 
GENERAL ELECTRIC CAPITAL CORPORATION
a Delaware corporation
       

 
 
By:
/s/  JOHN WARDEN      
    Name: John Warden
    Title: Authorized Signatory

5

      BORROWER:

ATTEST/WITNESS:
 
THE ENSIGN GROUP, INC.
a Delaware corporation
         

By:
/s/  ALAN J. NORMAN      
Alan J. Norman
Vice President
 
By:
/s/  GREGORY K. STAPLEY      
Gregory K. Stapley
Vice President

 
 
 
ENSIGN WHITTIER WEST LLC
ENSIGN WHITTIER EAST LLC
ENSIGN PANORAMA LLC
LEMON GROVE HEALTH ASSOCIATES LLC
BELL VILLA CARE ASSOCIATES LLC
DOWNEY COMMUNITY CARE LLC
COSTA VICTORIA HEALTHCARE LLC
WEST ESCONDIDO HEALTHCARE LLC
HB HEALTHCARE ASSOCIATES LLC
VISTA WOODS HEALTH ASSOCIATES LLC
CITY HEIGHTS HEALTH ASSOCIATES LLC
C STREET HEALTH ASSOCIATES LLC
VICTORIA VENTURA HEALTH CARE LLC
GATE THREE HEALTHCARE LLC
SOUTHLAND MANAGEMENT LLC
MANOR PARK HEALTHCARE LLC
each, a Nevada limited liability company

ATTEST/WITNESS:
 
By:
The Flagstone Group, Inc.
Its Sole Member

By:
/s/  DANIEL H. WALKER      
Daniel H. Walker
 
By:
/s/  BEVERLY WITTEKIND      
Beverly Wittekind
Secretary

 
 
 
ENSIGN SANTA ROSA LLC
ENSIGN MONTGOMERY LLC
ENSIGN CLOVERDALE LLC
ENSIGN SONOMA LLC
ENSIGN WILLITS LLC
ENSIGN PLEASANTON LLC
each, a Nevada limited liability company
         

6


ATTEST/WITNESS:
 
By:
Northern Pioneer Healthcare, Inc.
Its Sole Member
         

By:
/s/  DANIEL H. WALKER      
Daniel H. Walker
 
By:
/s/  BEVERLY WITTEKIND      
Beverly Wittekind
Secretary

 
 
 
ENSIGN SAN DIMAS LLC
ENSIGN PALM I LLC
REDBROOK HEALTHCARE ASSOCIATES LLC
CLAREMONT FOOTHILLS HEALTH ASSOCIATES LLC
each, a Nevada limited liability company

ATTEST/WITNESS:
 
By:
Touchstone Care, Inc.
Its Sole Member
         

By:
/s/  DANIEL H. WALKER      
Daniel H. Walker
 
By:
/s/  BEVERLY WITTEKIND      
Beverly Wittekind
Secretary

 
 
 
ENSIGN SABINO LLC
24TH STREET HEALTHCARE ASSOCIATES LLC
GLENDALE HEALTHCARE ASSOCIATES LLC
PRESIDIO HEALTH ASSOCIATES LLC
NORTH MOUNTAIN HEALTHCARE LLC
PARK WAVERLY HEALTHCARE LLC
SUNLAND HEALTH ASSOCIATES LLC
RADIANT HILLS HEALTH ASSOCIATES LLC
HIGHLAND HEALTHCARE LLC
each, a Nevada limited liability company

ATTEST/WITNESS:
 
By:
Bandera Healthcare, Inc.
Its Sole Member
         

By:
/s/  DANIEL H. WALKER      
Daniel H. Walker
 
By:
/s/  BEVERLY WITTEKIND      
Beverly Wittekind
Secretary
         

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ATLANTIC MEMORIAL HEALTHCARE ASSOCIATES, INC.
ROSE PARK HEALTHCARE ASSOCIATES, INC.

ATTEST/WITNESS:
 
each, a Nevada corporation
         

By:
/s/  DANIEL H. WALKER      
Daniel H. Walker
 
By:
/s/  BEVERLY WITTEKIND      
Beverly Wittekind
Secretary

 
 
 
NORTHERN OAKS HEALTHCARE, INC.
SALADO CREEK SENIOR CARE, INC.
MCALLEN COMMUNITY HEALTHCARE, INC.
WELLINGTON HEALTHCARE, INC.

ATTEST/WITNESS:
 
each, a Nevada corporation
         

By:
/s/  DANIEL H. WALKER      
Daniel H. Walker
 
By:
/s/  BEVERLY WITTEKIND      
Beverly Wittekind
Secretary

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LIST OF SCHEDULES

Schedule 1.39   —   Permitted Liens

Schedule 4.1
 
—
 
Subsidiaries

Schedule 4.5
 
—
 
Litigation

Schedule 4.13
 
—
 
Non-Compliance with Law

Schedule 4.14
 
—
 
Environmental Matters

Schedule 4.15
 
—
 
Places of Business with patient census

Schedule 4.16
 
—
 
Licenses

Schedule 4.17
 
—
 
Stock Ownership

Schedule 4.19
 
—
 
Borrowings and Guarantees

Schedule 4.21
 
—
 
Trade Names

Schedule 4.22
 
—
 
Joint Ventures

Schedule 7.12
 
—
 
Transactions with Affiliates

9

EXHIBIT A
Overline Note

10

SCHEDULES TO AMENDMENT NO. 5 TO
AMENDED & RESTATED LOAN AGREEMENT

Sched
   Description
   Matters Covered
1.39   Permitted Liens:   (i)    Landlord's liens, both statutory and contractual, contained in or created by the various leases, security agreement, pledges and related documentation covering the locations described in Schedule 4.15, but only to the extent that such liens are contractually subordinated to Lender's liens and security interests pursuant to agreements between Lender and such landlords that are satisfactory to Lender.

 
 
 
 
(ii)(a)    The lien of the Deed of Trust and Assignment of Rents by and between Ensign Southland LLC as Trustor and Continental Wingate Associates, Inc. as Beneficiary, affecting the California Property and recorded January 30, 2001 at Document No. 01-0161647 in the office of the Los Angeles County Recorder, securing indebtedness in the original principal amount of $7,455,100, (b) all liens created or extended in connection with that certain Second Amended and Restated Loan Agreement for a loan in the amount of $64,692,11.67 by and among Valley Health Holdings LLC, Sky Holdings AZ LLC, Terrace Holdings AZ LLC, Plaza Health Holdings LLC, Rillito Holdings LLC, Mountainview Communitycare LLC, Meadowbrook Health Associates LLC, Cedar Avenue Holdings LLC, Granada Investments LLC, as borrowers, and General Electric Capital Corporation, as lender, dated December 29, 2006; and (c) the lien of the Deed of Trust and Security Agreement encumbering TEGI subsidiary Cherry Hill Health Holdings, Inc.'s Pacific Care Center facility, Hoquiam, Washington, securing a non-prepayable assumed $2,475,000 loan that existed when the property was acquired in 2006.

 
 
 
 
(iii)    Liens permitted to be created by Sections 6.23 and 7.1(d) of the Loan Agreement.

4.1
 
Subsidiaries:
 
See attached organizational chart for existing subsidiaries of The Ensign Group, Inc.

4.5
 
Pending or Threatened Litigation:
 
There is currently no pending or threatened litigation which the Borrower believes would materially threaten Borrower's viability or ability to repay the Obligations; further, all claims pending or threatened against the Borrower are either covered by insurance or, to the extent they are not, Borrower believes it has accrued adequate reserves in connection therewith.

4.8
 
Defaults:
 
Relating to the representations in Section 4.8 of the Loan Agreement, and without admitting any default, reference is made to Schedule 4.5 above.

4.13
 
Non-compliance with Law:
 
To the best of the actual knowledge of the officers of Borrower, there does not currently exist any material non-compliance with applicable laws.
         

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4.14
 
Environmental Matters:
 
To the best of the actual knowledge of the officers of The Ensign Group, Inc., there are no material adverse environmental matters associated with any of the properties occupied by TEGI's operating subsidiaries which require remediation or pose a present threat of material harm or liability.

4.15
 
Places of Business with patient census:
 
See consolidated Schedule 4.15(a)/4.16 and Schedule 4.15(b) at the end of this Exhibit A.

4.16
 
Licenses:
 
The entity which currently holds or possesses the right to use the operating license for each of the facilities is as shown in consolidated Schedule 4.15(a)/4.16.

4.17
 
Stock Ownership:
 
See separate Schedule 4.17 at the end of this Exhibit A.

4.19
 
Borrowings:
 
Other than normal trade creditors, some or all of the entities comprising the Borrower are currently indebted to the following creditors in the following manners and amounts:

 
 
 
 
        a.    General Electric Capital Corporation; $20,000,000 Revolving Credit Facility for working capital.

 
 
 
 
        b.    General Electric Capital Corporation; $64,692,111.67 fixed asset loan secured by Deeds of Trust encumbering the assets owned by Valley Health Holdings LLC, Sky Holdings AZ LLC, Terrace Holdings AZ LLC, Ensign Highland LLC, Plaza Health Holdings LLC, Rillito Holdings LLC, Mountainview Communitycare LLC, Cedar Avenue Holdings LLC and Granada Investments LLC.

 
 
 
 
        c.    Continental Wingate Associates, Inc.; $7,455,100 HUD-insured Loan secured by a Deed of Trust and Assignment of Rents on Ensign Southland LLC's Southland Care Center & Home facility, Norwalk, California.

 
 
 
 
        d.    Wells Fargo Bank, N.A.; $2,475,000 loan secured by a Deed of Trust and Security Agreement on Cherry Hill Health Holdings, Inc.'s Pacific Care Center facility, Hoquiam, Washington.

4.20
 
Labor Disputes:
 
A union organizing election was held at Sonoma Healthcare Center in May, 2002 at which a majority of the approximately 60 employees classified as Housekeeping, Laundry and CNAs voted to have union representation from SEIU Local 250. On August 30, 2004, the National Labor Relations Board certified the union. The union has requested bargaining, and bargaining is ongoing. Operations at the facility and throughout the company have not been materially disrupted by union issues at any time since the original organizing election.

4.22
 
Joint Ventures:
 
None

7.12
 
Transactions with Affiliates:
 
Pursuant to an internal corporate restructuring the entire equity interests in various operating entities were assigned by The Ensign Group, Inc. to its several regional subsidiaries as set forth on the attached organization chart.
         

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Where an affiliate of The Ensign Group, Inc. owns the real property underlying a facility, the real estate holding subsidiary and the operating subsidiary enter into a lease agreement with respect to the facility. The attached organization chart indicates those instances where TEGI affiliates own the occupied property. The standard lease form used for such affiliate transactions has been reviewed and approved by Lender's counsel in connection with the fixed asset financing referenced in Schedule 1.39(ii)(b) above.

 
 
 
 
Ensign Facility Services, Inc., a subsidiary of TEGI, has entered into separate Consulting Services Agreements with each of the operating subsidiaries listed in the attached organizational chart, to provide centralized accounting, legal, risk management, information technology human resources and similar support and services. A standard management fee which does not exceed five percent (5%) of monthly revenues is charged for such services.

—See Attached Schedules 4.15(a)/4.16, 4.15(b) and 4.17—

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Schedule 4.1

The Ensign Group, Inc.
(Delaware Corporation; Qualified in California)

The Flagstone Group, Inc.
SOUTHERN CALIFORNIA

Arroyo Vista Nursing Center
City Heights Health Associates LLC
Permunitum LLC*

Atlantic Memorial Healthcare Center
Atlantic Memorial Healthcare Associates, Inc.

Brookfield Healthcare Center
Downey Community Care LLC
Moenium Holdings LLC*

Carmel Mountain. Rehabilitation & Healthcare Center
Bernardo Heights Healthcare, Inc.
CM Health Holdings LLC

Lemon Grove Care & Rehabilitation Center
Lemon Grove Health Associates LLC

Palm Terrace Healthcare & Rehabilitation Center
Gate Three Healthcare LLC

Palomar Vista Healthcare Center
West Escondido Healthcare LLC

Rose Villa Healthcare Center
Bell Villa Care Associates LLC
Moenium Holdings LLC*

Royal Court Healthcare
Ensign Whittier West LLC

Sea Cliff Healthcare Center
HB Healthcare Associates LLC

Shoreline Healthcare Center
Rose Park Healthcare Associates, Inc.
Long Beach Health Associates LLC**

Southland Care Center
Southland Management LLC
Ensign Southland LLC

Victoria Healthcare Center
Costa Victoria Healthcare LLC

Vista Knoll Specialized Care Facility
Vista Woods Health Associates LLC
Permunitum LLC*

Whittier Hills Health Care Center
Ensign Whittier East LLC

Bandera Healthcare, Inc.
ARIZONA

Catalina Healthcare Center
Presidio Health Associates LLC
Rillito Holdings LLC

Coronado Healthcare Center
North Mountain Healthcare LLC
Adipiscor LLC*

Desert Sky Health and Rehabilitation Center
Glendale Healthcare Associates LLC
Sky Holdings AZ LLC

Desert Terrace Nursing Center
24th Street Healthcare Associates LLC
Terrace Holdings AZ LLC

East Mesa Healthcare Center
Sunland Health Associates LLC
Adipiscor LLC*

Grand Court of Mesa
Brown Road Senior Housing LLC
Moenium Holdings LLC*

Greenfields Assisted Living
Greenfields Assisted Living LLC

Highland Manor Health & Rehabilitation Center
Highland Healthcare LLC
Ensign Highland LLC

North Mountain Medical & Rehabilitation Center
Radiant Hills Health Associates LLC
Valley Health Holdings LLC

Osborn Health and Rehabilitation
RenewCare of Scottsdale, Inc.

Sabino Canyon Rehabilitation and Care Center
Ensign Sabino LLC
Meadowbrook Health Associates LLC

Waverly Park Healthcare Center
Park Waverly Healthcare LLC
Adipiscor LLC*

Milestone Healthcare, Inc.
UTAH

Arlington Hills Healthcare Center
Avenues Healthcare, Inc.
Tenth East Holdings LLC

Draper Rehabilitation and Care Center
South Valley Healthcare, Inc.
Fort Street Health Holdings LLC***

Holladay Healthcare Center
Olympus Health, Inc.
Cottonwood Health Holdings LLC

Mt. Ogden Health & Rehabilitation Center
Washington Heights Healthcare, Inc.


IDAHO

Pocatello Care and Rehabilitation Center
Pocatello Health Services, Inc.


Miscellaneous

(Held by The Ensign Group, Inc.)

SERVICE CENTER

Ensign Facility Services, Inc.
(Nevada Corporation; Qualified in California)

SELF-INSURANCE

Standardbearer Insurance Company, Ltd.
(Cayman Islands Exempted Company)

SHELF ENTITIES

Bayshore Healthcare, Inc.

Cardiff Healthcare, Inc.

Ensign Bellflower LLC

Ensign Napa LLC

Hueneme Healthcare, Inc.

Pomerado Ranch Healthcare, Inc.

RB Heights Health Holdings LLC

Regal Road Health Holdings LLC

South C Health Holdings LLC

Trousdale Health Holdings LLC

Walnut Grove Compuscare LLC

Keystone Care, Inc.
TEXAS

Cambridge Health & Rehabilitation Center
Richmond Senior Services, Inc.
Golfview Holdings LLC

Cambridge Square Retirement Center
Rosenburg Senior Living, Inc.
Avenue N Holdings LLC

Carrollton Health & Rehabilitation Center
Carrollton Heights Healthcare, Inc.
Trinity Mill Holdings LLC

Lake Village Nursing & Rehabilitation Center
Grand Villa Phx, Inc.
Verde Villa Holdings LLC

Northern Oaks Living & Rehabilitation Center
Northern Oaks Healthcare, Inc.

Salado Creek Living & Rehabilitation Center
Salado Creek Senior Care, Inc.

The Village Care Center
McAllen Community Healthcare, Inc.

Timberwood Nursing & Rehabilitation Center
Livingston Care Associates, Inc.
Polk Health Holdings LLC

Wellington Place Living & Rehabilitation Center
Wellington Healthcare, Inc.

Willow Bend Nursing & Rehabilitation Center
Town East Healthcare, Inc.
Mesquite Health Holdings LLC

Northern Pioneer Healthcare, Inc.
NORTHERN CALIFORNIA

Cloverdale Healthcare Center
Ensign Cloverdale LLC

Northbrook Nursing & Rehabilitation Center
Ensign Willits LLC

Park View Gardens at Montgomery
Ensign Montgomery LLC
Mountainview Communitycare LLC

Sonoma Healthcare Center
Ensign Sonoma LLC

Summerfield Health Care Center
Ensign Santa Rosa LLC

Ukiah Convalescent Hospital
Ensign Pleasanton LLC

WASHINGTON

Emerald Hills Healthcare Center
Lynnwood Health Services, Inc.
Snohomish Health Holdings LLC

Pacific Care Center
Hoquiam Healthcare, Inc.
Cherry Health Holdings, Inc.

Park Manor Rehabilitation Center
Manor Park Healthcare LLC

Plaza Health Holdings LLC

Touchstone Care, Inc.
SOUTHERN CALIFORNIA

Arbor Glen Care Center
Ensign San Dimas LLC
Arrow Tree Health Holdings LLC

Brookside Healthcare Center
Redbrook Healthcare Associates LLC

Camarillo Healthcare Center
Camarillo Community Care, Inc.
Granada Investments LLC

Claremont Care Center
Claremont Foothills Health Associates LLC
Permunitum LLC*

Glenwood Care Center
C Street Health Associates LLC

Mission Care Center
Ramon Healthcare Associates, Inc.

Panorama Gardens Nursing & Rehabilitation Center

Premier Care Center for Palm Springs
Ensign Palm I LLC

Upland Rehabilitation and Care Center
Upland Community Care, Inc.
Cedar Avenue Holdings LLC

Victoria Care Center
Victoria Ventura Healthcare LLC


KEY

Line 1: Facility Name
Line 2: Operating Entity: Held, as represented, by an operating group
Line 3: Holding Entity: All held by The Ensign Group, Inc.
* Master tenant/sublessor
** Owns property adjacent to the facility and will hold the facility property on exercise of option to buy at lease end.
*** Fort Street has the option to buy the property in January 2008

Unless noted otherwise, all entities are organized in Nevada and qualified to do business where located.
All subsidiaries are wholly owned.

Schedule 4.15(b)—Census data as of 9/7/2007

Facility
   Beds
   Census
The Flagstone Group, Inc. (S.Cal)        
Atlantic Memorial   100   89
Palm Terrace   99   98
Sea Cliff   182   176
Sea Cliff ALF   84   60
Shoreline   75   66
Victoria   79   74
Arroyo Vista   53   50
Carmel Mountain   120   108
Lemon Grove   158   150
Palomar Vista   74   71
Vista Knoll   120   109
Brookfield   70   65
Rose Villa   53   47
Royal Court   162   147
Southland Care   120   119
Southland Home   70   55
Whittier Hills   160   148
Subsidiary Totals
   1779   1632
Northern Pioneer (N.Cal & WA)        
Cloverdale   72   64
Northbrook   71   35
Park View   116   103
Sonoma   137   118
Summerfield   70   57
Ukiah   58   52
Emerald Hills   120   52
Pacific Care   100   79
Park Manor   79   66
Subsidiary Totals   823   626
Touchstone (S.Cal)        
Arbor Glen   95   92
Brookside   97   83
Camarillo   114   94
Claremont Care   99   94
Glenwood   99   92
Panorama Gardens   149   142
Premier Care   99   89
Mission Care   58   52
Ventura   187   156
Upland Rehab   203   173
Subsidiary Totals   1200   1067
         

Bandera Healthcare, Inc. (AZ)        
Catalina   102   89
Sabino Canyon   107   95
Waverly Park   200   92
Desert Sky   186   140
Desert Sky Assisted   105   75
East Mesa   201   145
Grand Court   174   174
Greenfields   141   141
Scottsdale   120   120
Coronado   191   175
Desert Terrace   108   78
Highland Manor   107   87
North Mountain   155   141
Subsidiary Totals   1897   1552
Keystone (TX, UT & ID)        
Cambridge Health and Rehab   118   60
Cambridge Square ALF   44   37
Carrollton Healthcare Center   108   83
Draper Rehab & Care Center   89   50
Lake Village   120   87
Northern Oaks   96   83
Salado Creek   124   77
The Village   113   89
Timberwood Nursing Home   120   93
Wellington Place   140   82
Willowbend Nursing & Rehab Ctr   162   75
Arlington Hills   108   60
Holladay   120   90
Mt Ogden   108   60
Pocatello Care & Rehab Ctr   88   62
Subsidiary Totals   1658   1088

The Ensign Group, Inc. Totals
 
7357
 
5965

Schedule 4.16

FACILITY
   Facility Legal Name
   PHONE
   FAX
   ADDRESS
   INFO
7/2007
Arbor Glen Care Center   Ensign San Dimas LLC   (626) 963-7531   (626) 914-7566   1033 East Arrow Highway
Glendora, CA 91740		   98 SNF

Arlington Hills Healthcare Center
 
Avenues Healthcare, Inc.
 
(801) 322-5521
 
(801) 322-0934
 
165 South 1000 East
Salt Lake City, UT 84102
 
108 SNF

Arroyo Vista Nursing Center
 
City Heights Health Associates LLC
 
(619) 283-5855
 
(619) 284-6327
 
3022 45th Street
San Diego, CA 92105
 
53 SNF

Atlantic Memorial Healthcare Center
 
Atlantic Memorial Healthcare Associates, Inc.
 
(562) 424-8101
 
(562) 424-9041
 
2750 Atlantic Avenue
Long Beach, CA 90806
 
109 SNF

Brookfield Healthcare Center
 
Downey Community Care LLC
 
(562) 869-2567
 
(562) 869-8788
 
9300 Telegraph Road
Downey, CA 90240
 
70 SNF

Brookside Healthcare Center
 
Redbrook Healthcare Associates LLC
 
(909) 793-2271
 
(909) 792-6477
 
105 Terracina Blvd.
Redlands, CA 92373
 
97 SNF

Camarillo Healthcare Center
 
Camarillo Community Care, Inc.
 
(805) 482-9805
 
(805) 388-8242
 
205 Granada Street
Camarillo, CA 93010
 
114 SNF

Cambridge Health & Rehabilitation Center
 
Richmond Senior Services, Inc.
 
(281) 344-9191
 
(281) 344-9320
 
1106 Golfview
Richmond, TX 77469
 
118 SNF

Cambridge Square Retirement Center
 
Rosenburg Senior Living, Inc.
 
(281) 344-8444
 
(281) 344-1050
 
2700 Avenue N
Rosenberg, TX 77471
 
44 ALF

Carrollton Health & Rehabilitation Center
 
Carrollton Heights Healthcare, Inc.
 
(972) 245-1573
 
(972) 245-6082
 
1618 Kirby Road
Carrollton, TX 75006
 
120 SNF

Claremont Care Center
 
Claremont Foothills Health Associates LLC
 
(909) 593-1391
 
(909) 596-8319
 
219 East Foothill Blvd.
Pomona, CA 91768
 
99 SNF

Carmel Mountain Rehab & Healthcare Center
 
Bernardo Heights Healthcare, Inc.
 
(858) 673-0101
 
(858) 673-8320
 
11895 Avenue of Industry
San Diego, CA 92128
 
120 SNF

Catalina Healthcare Center
 
Presidio Health Associates LLC
 
(520) 795-9574
 
(520) 321-4983
 
2611 North Warren Ave.
Tucson, AZ 85719
 
102 SNF

Cloverdale Healthcare Center
 
Ensign Cloverdale LLC
 
(707) 894-5201
 
(707) 894-9324
 
300 Cherry Creek Road
Cloverdale, CA 95425
 
72 SNF

Coronado Healthcare Center
 
North Mountain Healthcare LLC
 
(602) 256-7500
 
(602) 943-7697
 
11411 North 19th Avenue
Phoenix, AZ 85029
 
185 SNF

Desert Sky Health & Rehabilitation Center
 
Glendale Healthcare Associates LLC
 
(623) 931-5800
 
(623) 931-8776
 
5125 North 58th Avenue
Glendale, AZ 85301
 
189 SNF
103 ALF

Desert Terrace Nursing Center
 
24th Street Healthcare Associates LLC
 
(602) 273-1347
 
(602) 273-6260
 
2509 North 24th Street
Phoenix, AZ 85008
 
108 SNF

Draper Rehabilitation and Care Center
 
South Valley Healthcare, Inc.
 
(801) 571-2704
 
(801) 571-8921
 
12702 South Fort Street
Draper, UT 84020
 
89 SNF

East Mesa Healthcare Center
 
Sunland Health Associates LLC
 
(480) 832-8333
 
(480) 830-2466
 
51 South 48th Street
Mesa, Arizona 85206
 
188 SNF

Emerald Hills Healthcare Center
 
Lynnwood Health Services, Inc.
 
(425) 776-5512
 
(425) 776-3230
 
5821 188th Street SW
Lynnwood, WA 98037
 
95 SNF

Glenwood Care Center
 
C Street Health Associates LLC
 
(805) 983-0305
 
(805) 983-2514
 
1300 North C Street
Oxnard, CA 93030
 
99 SNF

Grand Court of Mesa
 
Brown Road Sr Housing LLC
 
(480) 844-7336
 
(480) 844-7045
 
262 East Brown Road
Mesa, AZ 85201
 
117 ILF
50 SC

Greenfields Assisted Living Community
 
Greenfields Assisted Living LLC
 
(480) 649-3911
 
(480) 649-1330
 
723 East 2nd Avenue
Mesa, AZ 85204
 
141 ALF

Highland Manor Health & Rehab Center
 
Highland Healthcare LLC
 
(602) 264-9039
 
(602) 264-1017
 
4635 N. 14th Street
Phoenix, AZ 85014
 
107 SNF
                     


Holladay Healthcare Center
 
Olympus Health, Inc.
 
(801) 277-7002
 
(801) 272-0622
 
4782 South Holladay Blvd.
Salt Lake City, UT 84117
 
120 SNF

Lake Village Nursing & Rehab. Center
 
Grand Villa PHX, Inc.
 
(972) 436-7571
 
(972) 221-4187
 
169 Lake Park Road
Lewisville, TX 75057
 
120 SNF

Lemon Grove Care & Rehab Center
 
Lemon Grove Health Associates LLC
 
(619) 463-0294
 
(619) 461-1064
 
8351 Broadway
Lemon Grove, CA 91945
 
158 SNF

Mission Care & Rehabilitation Center
 
Ramon Healthcare Assoc, Inc.
 
(626) 607-2400
 
(626) 607-2490
 
4800 Delta Avenue
Rosemead, CA 91770
 
59 SNF

Mt. Ogden Health and Rehabilitation Center
 
Washington Heights Healthcare, Inc.
 
(801) 479-5700
 
(801) 476-8913
 
375 East 5350 South
Washington Terr., UT 84405
 
108 SNF

North Mountain Medical & Rehab Center
 
Radiant Hills Health Associates LLC
 
(602) 944-1666
 
(602) 944-8549
 
9155 North 3rd Street
Phoenix, AZ 85020
 
155 SNF

Northern Oaks Living & Rehab Center
 
Northern Oaks Healthcare, Inc.
 
(325) 676-1677
 
(325) 676-3941
 
2722 Old Anson Road
Abilene, TX 79603
 
96 SNF
0 ALF

Northbrook Nursing and Rehab Center
 
Ensign Willits LLC
 
(707) 459-5592
 
(707) 459-4727
 
64 Northbrook Way
Willits, CA 95490
 
72 SNF

Osborn Health and Rehabilitation
 
RenewCare of Scottsdale, Inc.
 
(480) 994-1333
 
(480) 990-3895
 
3333 North Civic Ctr Plaza
Scottsdale, AZ 85251
 
130 SNF

Pacific Care Center
 
Hoquiam Healthcare, Inc.
 
(360) 532-7882
 
(360) 537-7216
 
3035 Cherry Street
Hoquiam, WA 98550
 
109 SNF

Palm Terrace Healthcare & Rehab Center
 
Gate Three Healthcare LLC
 
(949) 587-9000
 
(949) 951-3174
 
24962 Calle Aragon
Laguna Woods, CA 92637
 
99 SNF

Palomar Vista Healthcare Center
 
West Escondido Healthcare LLC
 
(760) 746-0303
 
(760) 738-1749
 
201 North Fig Street
Escondido, CA 92025
 
74 SNF

Panorama Gardens Nursing & Rehabilitation Center
 
Ensign Panorama LLC
 
(818) 893-6385
 
(818) 893-2924
 
9541 Van Nuys Blvd.
Panorama City, CA 91402
 
151 SNF

Park Manor Rehabilitation Center
 
Manor Park Healthcare LLC
 
(509) 529-4218
 
(509) 522-1729
 
1710 Plaza Way
Walla Walla, WA 99362
 
79 SNF

Park View Gardens at Montgomery
 
Ensign Montgomery LLC
 
(707) 525-1250
 
(707) 525-0159
 
3751 Montgomery Drive
Santa Rosa, CA 95405
 
122 SNF

Pocatello Care and Rehabilitation Center
 
Pocatello Health Services, Inc.
 
(208) 478-3333
 
(208) 478-3331
 
527 Memorial Drive
Pocatello, ID 83201
 
88 SNF

Premier Care Center for Palm Springs
 
Ensign Palm I LLC
 
(760) 323-2638
 
(760) 323-1723
 
2990 East Ramon Road
Palm Springs, CA 92264
 
99 SNF

Rose Villa Healthcare Center
 
Bell Villa Care Associates LLC
 
(562) 925-4252
 
(562) 925-1130
 
9028 Rose Street
Bellflower, CA 90706
 
53 SNF

Royal Court Healthcare
 
Ensign Whittier West LLC
 
(562) 693-7701
 
(562) 693-6037
 
12385 E. Washington Blvd
Whittier, CA 90606
 
162 SNF

Sabino Canyon Rehab & Care Center
 
Ensign Sabino LLC
 
(520) 722-5515
 
(520) 886-8082
 
5830 East Pima
Tucson, AZ 85712
 
112 SNF

Salado Creek Living & Rehab Center
 
Salado Creek Senior Care, Inc.
 
(210) 824-7331
 
(210) 824-1334
 
603 Corrine
San Antonio, TX 78218
 
120 SNF

Sea Cliff Healthcare Center
 
HB Healthcare Associates LLC
 
(714) 847-3515
 
(714) 847-4315
 
18811 Florida Street
Huntington Bch, CA 92648
 
182 S/I
84 ALF

Shoreline Healthcare Center
 
Rose Park Healthcare Associates, Inc.
 
(562) 494-4421
 
(562) 494-2731
 
4029 East Anaheim St.
Long Beach, CA 90804
 
75 SNF

Sonoma Healthcare Center
 
Ensign Sonoma LLC
 
(707) 938-8406
 
(707) 938-4400
 
1250 Broadway
Sonoma, CA 95476
 
144 SNF

Southland & Southland Living
 
Southland Management LLC
 
(562) 868-9761
 
(562) 863-0336
 
11701 Studebaker Road
Norwalk, CA 90650
 
120 SNF
75 ALF
                     


Summerfield Healthcare Center
 
Ensign Santa Rosa LLC
 
(707) 539-1515
 
(707) 539-0630
 
1280 Summerfield Road
Santa Rosa, CA 95405
 
70 SNF

Timberwood Nursing & Rehabilitation Center
 
Livingston Care Associates, Inc.
 
(936) 327-4446
 
(936) 327-8435
 
4001 Highway 59 North
Livingston, TX 77351
 
120 SNF

Ukiah Convalescent Hospital
 
Ensign Pleasanton LLC
 
(707) 462-8864
 
(707) 462-0718
 
1349 South Dora
Ukiah, CA 95482
 
57 SNF

Upland Rehabilitation & Care Center
 
Upland Community Care, Inc.
 
(909) 985-1903
 
(909) 949-4975
 
1221 East Arrow Hwy
Upland, CA 91786-4911
 
206 SNF

The Village Care Center
 
McAllen Community Healthcare, Inc.
 
(956) 664-8900
 
(956) 664-8906
 
615 No. Ware Road
McAllen, TX 78501
 
114 SNF

Victoria Care Center
 
Victoria Ventura Healthcare LLC
 
(805) 642-1736
 
(805) 639-3198
 
5445 Everglades Street
Ventura, CA 93003
 
188 SNF

Victoria Healthcare Center
 
Costa Victoria Healthcare LLC
 
(949) 642-0387
 
(949) 646-0313
 
340 Victoria Street
Costa Mesa, CA 92627
 
79 SNF

Vista Knoll Specialized Care Facility
 
Vista Woods Health Associates LLC
 
(760) 630-2273
 
(760) 630-0913
 
2000 Westwood Road
Vista, CA 92083
 
119 SNF

Waverly Park Healthcare Center
 
Park Waverly Healthcare LLC
 
(520) 882-6151
 
(520) 620-1547
 
2001 N. Park Avenue
Tucson, AZ 85719
 
200 SNF

Wellington Place Living & Rehab Center
 
Wellington Healthcare, Inc.
 
(254) 778-4231
 
(254) 778-2877
 
1802 So. 31st
Temple, TX 76504
 
140 SNF

Whittier Hills Healthcare Center
 
Ensign Whittier East LLC
 
(562) 947-7817
 
(562) 943-5347
 
10426 Bogardus Avenue
Whittier, CA 90603
 
160 SNF

Willowbend Nursing & Rehab. Center
 
Town East Healthcare, Inc.
 
(972) 279-3601
 
(972) 613-4539
 
2231 Highway 80 East
Mesquite, TX 75150
 
162 SNF

Schedule 4.17

CONFIDENTIAL

The Ensign Group, Inc.
Significant Shareholders
   Balance
September
2007
   %
Ownership
  
Count          
1   Roy Christensen   3,910,000   22.12 %
2   Christopher R. Christensen and Terri M. Christensen as Co-Trustees of the Christensen Family Trust dated 10/24/05   3,893,000   22.02 %
3   Gregory K. Stapley & Deborah S. Stapley as Co-trustees of the Stapley Family Trust uad 04/25/06   1,180,000   6.68 %
4   Jay Brady   720,000   4.07 %
5   Richard Toolson   600,000   3.39 %
6   Alan Norman   309,000   1.75 %
7   Blalack Trust   292,000   1.65 %
8   Gordon Buechs   120,400   0.68 %
9   Thomas Maloof   120,000   0.68 %
11   Cory Monette   76,000   0.43 %
12   David Sedgwick   45,500   0.26 %
13   Mike Dalton   45,500   0.26 %
14   Antoinette Hubenette   30,000   0.17 %
15   John Albrechtsen   24,500   0.14 %
16   Barry Port   9,500   0.05 %
17   Other   2,315,200   13.10 %

 
 
Common shares issued
 
13,690,600
 
 
 

 
 
Common shares reserved for issuance under 2001 Incentive Plan
 
495,000
 
2.80
%

 
 
Common shares reserved for issuance under 2005 Incentive Plan
 
749,000
 
4.24
%

 
 
Preferred shares (Common Share equivalent)
 
2,741,180
 
15.51
%
       
     
    Total Shares Outstanding   17,675,780   100.00 %