UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 3, 2009

The Ensign Group, Inc.
(Exact name of registrant as specified in its charter)
         
Delaware   001-33757   33-0861263
(State or other Jurisdiction of Incorporation)   (Commission File Number)   (IRS Employer Identification No.)
     
27101 Puerta Real, Suite 450, Mission Viejo, CA
  92691
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (949) 487-9500
 
Not Applicable
(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

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Item 1.01. Entry into a Material Definitive Agreement.

On February 4, 2009, The Ensign Group, Inc. (the “Company”) and certain of its subsidiaries and General Electric Capital Corporation (“GECC”) entered into Amendment No. 1 and Joinder Agreement (the “Amendment”) to that certain Second Amended and Restated Loan and Security Agreement (the “Agreement”), by and among the Company and certain of its subsidiaries as Borrowers and GECC as Lender, to add three additional subsidiaries of the Company (the “New Borrowers”) as Borrowers under the Agreement and amend the Agreement to establish a reserve as described in the Amendment.

On the same date, pursuant to the Amendment, the Borrowers made a Second Amended and Restated Revolving Credit Note in the original principal amount of $50.0 million (the “Note”) for the benefit of GECC as Lender, to add the New Borrowers to the Note.

The foregoing description of the Amendment and Note does not purport to be complete and is qualified in its entirety by reference to such agreement and instrument, which are attached as Exhibits 10.1 and 10.2. to this Current Report on Form 8-K and are incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure set forth above and referenced under Item 1.01 is hereby incorporated by reference into this Item 2.03.

Item 8.01 Other Events.

On February 3, 2009, the Company issued a press release regarding its expansion into the State of Colorado by acquiring four long-term care facilities in the Denver metropolitan area, consisting of 217 licensed and operational skilled nursing facility beds and 24 operational assisted living units. The transfer was effective February 1, 2009. The Company paid approximately $10,800,000 for the portfolio. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The foregoing information in this Current Report, including the related exhibit attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section. The foregoing information in this Current Report, including the related exhibit attached hereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

     
Exhibit No.   Description
10.1
  Amendment No. 1 and Joinder Agreement, dated February 4, 2009, to the Second Amended and Restated Loan and Security Agreement, by and among the Company and certain of its subsidiaries as Borrowers and GECC as Lender
 
   
10.2
  Second Amended and Restated Revolving Credit Note, dated February 4, 2009, by certain subsidiaries of the Company
 
   
99.1
  Press Release of the Company

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 6, 2009

THE ENSIGN GROUP, INC.

By: /s/ Alan J. Norman                                           
Alan J. Norman
Chief Financial Officer

 

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EXHIBIT INDEX

     
Exhibit No.   Description
10.1
  Amendment No. 1 and Joinder Agreement, dated February 4, 2009, to the Second Amended and Restated Loan and Security Agreement, by and among the Company and certain of its subsidiaries as Borrowers and GECC as Lender
 
   
10.2
  Second Amended and Restated Revolving Credit Note, dated February 4, 2009, by certain subsidiaries of the Company
 
   
99.1
  Press Release of the Company

4

Exhibit 10.1
AMENDMENT NO. 1 AND JOINDER AGREEMENT TO SECOND AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
originally dated as of February 21, 2008 by and among
ENSIGN SAN DIMAS LLC , a Nevada limited liability company , AVENUES HEALTHCARE, INC. , a Nevada corporation, CITY HEIGHTS HEALTH ASSOCIATES LLC , a Nevada limited liability company, ATLANTIC MEMORIAL HEALTHCARE ASSOCIATES, INC. , a Nevada corporation, DOWNEY COMMUNITY CARE LLC , a Nevada limited liability company, REDBROOK HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, CAMARILLO COMMUNITY CARE, INC., a Nevada corporation, RICHMOND SENIOR SERVICES, INC., a Nevada corporation, CARROLLTON HEIGHTS HEALTHCARE, INC., a Nevada corporation, CLAREMONT FOOTHILLS HEALTH ASSOCIATES LLC , a Nevada limited liability company, BERNARDO HEIGHTS HEALTHCARE, INC., a Nevada corporation, PRESIDIO HEALTH ASSOCIATES LLC , a Nevada limited liability company, ENSIGN CLOVERDALE LLC , a Nevada limited liability company, NORTH MOUNTAIN HEALTHCARE LLC , a Nevada limited liability company, GLENDALE HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, 24 TH STREET HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, SOUTH VALLEY HEALTHCARE, INC., a Nevada corporation, SUNLAND HEALTH ASSOCIATES LLC , a Nevada limited liability company, LYNNWOOD HEALTH SERVICES, INC. , a Nevada corporation, C STREET HEALTH ASSOCIATES LLC , a Nevada limited liability company, HIGHLAND HEALTHCARE LLC , a Nevada limited liability company, OLYMPUS HEALTH, INC. , a Nevada corporation, GRAND VILLA PHX, INC. , a Nevada corporation, LEMON GROVE HEALTH ASSOCIATES LLC , a Nevada limited liability company, RAMON HEALTHCARE ASSOC, INC. , a Nevada corporation, WASHINGTON HEIGHTS HEALTHCARE, INC. , a Nevada corporation, RADIANT HILLS HEALTH ASSOCIATES LLC , a Nevada limited liability company, NORTHERN OAKS HEALTHCARE, INC. , a Nevada corporation, ENSIGN WILLITS LLC , a Nevada limited liability company, RENEWCARE OF SCOTTSDALE, INC. , a Nevada corporation, HOQUIAM HEALTHCARE, INC. , a Nevada corporation, GATE THREE HEALTHCARE LLC , a Nevada limited liability company, WEST ESCONDIDO HEALTHCARE LLC , a Nevada limited liability company, ENSIGN PANORAMA LLC , a Nevada limited liability company, MANOR PARK HEALTHCARE LLC , a Nevada limited liability company, ENSIGN MONTGOMERY LLC , a Nevada limited liability company, POCATELLO HEALTH SERVICES, INC. , a Nevada corporation, ENSIGN PALM I LLC , a Nevada limited liability company, BELL VILLA CARE ASSOCIATES LLC , a Nevada limited liability company, ENSIGN WHITTIER WEST LLC , a Nevada limited liability company, ENSIGN SABINO LLC , a Nevada limited liability company, SALADO CREEK SENIOR CARE, INC., a Nevada corporation, HB HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, ROSE PARK HEALTHCARE ASSOCIATES, INC. , a Nevada corporation, ENSIGN SONOMA LLC , a Nevada limited liability company, SOUTHLAND MANAGEMENT LLC , a Nevada limited liability company, ENSIGN SANTA ROSA LLC, a Nevada limited liability company, LIVINGSTON CARE ASSOCIATES, INC. , a Nevada corporation, ENSIGN PLEASANTON LLC , a Nevada limited liability company, UPLAND COMMUNITY CARE, INC. , a Nevada corporation, MCALLEN COMMUNITY HEALTHCARE, INC. , a Nevada corporation, VICTORIA VENTURA HEALTHCARE LLC , a Nevada limited liability company, COSTA VICTORIA HEALTHCARE LLC , a Nevada limited liability company, VISTA WOODS HEALTH ASSOCIATES LLC , a Nevada limited liability company, PARK WAVERLY HEALTHCARE LLC , a Nevada limited liability company, WELLINGTON HEALTHCARE, INC. , a Nevada corporation, ENSIGN WHITTIER EAST LLC , a Nevada limited liability company, and TOWN EAST HEALTHCARE, INC. , a Nevada corporation, (each a “ Borrower ” and collectively the “ Borrowers ” ),
THE ENSIGN GROUP, INC. , a Delaware corporation (“ Ensign ”),
i.
and
GENERAL ELECTRIC CAPITAL CORPORATION
(“ Lender ”)
Amended as of February 4, 2009

 

 

 

AMENDMENT NO. 1 AND JOINDER AGREEMENT TO SECOND AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 AND JOINDER AGREEMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “ Amendment ”) is made as of this 4th day of February, 2009 (the “ Effective Date ”), by and among ENSIGN SAN DIMAS LLC , a Nevada limited liability company , AVENUES HEALTHCARE, INC. , a Nevada corporation, CITY HEIGHTS HEALTH ASSOCIATES LLC , a Nevada limited liability company, ATLANTIC MEMORIAL HEALTHCARE ASSOCIATES, INC. , a Nevada corporation, DOWNEY COMMUNITY CARE LLC , a Nevada limited liability company, REDBROOK HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, CAMARILLO COMMUNITY CARE, INC., a Nevada corporation, RICHMOND SENIOR SERVICES, INC., a Nevada corporation, CARROLLTON HEIGHTS HEALTHCARE, INC., a Nevada corporation, CLAREMONT FOOTHILLS HEALTH ASSOCIATES LLC , a Nevada limited liability company, BERNARDO HEIGHTS HEALTHCARE, INC., a Nevada corporation, PRESIDIO HEALTH ASSOCIATES LLC , a Nevada limited liability company, ENSIGN CLOVERDALE LLC , a Nevada limited liability company, NORTH MOUNTAIN HEALTHCARE LLC , a Nevada limited liability company, GLENDALE HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, 24 TH STREET HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, SOUTH VALLEY HEALTHCARE, INC., a Nevada corporation, SUNLAND HEALTH ASSOCIATES LLC , a Nevada limited liability company, LYNNWOOD HEALTH SERVICES, INC. , a Nevada corporation, C STREET HEALTH ASSOCIATES LLC , a Nevada limited liability company, HIGHLAND HEALTHCARE LLC , a Nevada limited liability company, OLYMPUS HEALTH, INC. , a Nevada corporation, GRAND VILLA PHX, INC. , a Nevada corporation, LEMON GROVE HEALTH ASSOCIATES LLC , a Nevada limited liability company, RAMON HEALTHCARE ASSOC, INC. , a Nevada corporation, WASHINGTON HEIGHTS HEALTHCARE, INC. , a Nevada corporation, RADIANT HILLS HEALTH ASSOCIATES LLC , a Nevada limited liability company, NORTHERN OAKS HEALTHCARE, INC. , a Nevada corporation, ENSIGN WILLITS LLC , a Nevada limited liability company, RENEWCARE OF SCOTTSDALE, INC. , a Nevada corporation, HOQUIAM HEALTHCARE, INC. , a Nevada corporation, GATE THREE HEALTHCARE LLC , a Nevada limited liability company, WEST ESCONDIDO HEALTHCARE LLC , a Nevada limited liability company, ENSIGN PANORAMA LLC , a Nevada limited liability company, MANOR PARK HEALTHCARE LLC , a Nevada limited liability company, ENSIGN MONTGOMERY LLC , a Nevada limited liability company, POCATELLO HEALTH SERVICES, INC. , a Nevada corporation, ENSIGN PALM I LLC , a Nevada limited liability company, BELL VILLA CARE ASSOCIATES LLC , a Nevada limited liability company, ENSIGN WHITTIER WEST LLC , a Nevada limited liability company, ENSIGN SABINO LLC , a Nevada limited liability company, SALADO CREEK SENIOR CARE, INC., a Nevada corporation, HB HEALTHCARE ASSOCIATES LLC , a Nevada limited liability company, ROSE PARK HEALTHCARE ASSOCIATES, INC. , a Nevada corporation, ENSIGN SONOMA LLC , a Nevada limited liability company, SOUTHLAND MANAGEMENT LLC , a Nevada limited liability company, ENSIGN SANTA ROSA LLC, a Nevada limited liability company, LIVINGSTON CARE ASSOCIATES, INC. , a Nevada corporation, ENSIGN PLEASANTON LLC , a Nevada limited liability company, UPLAND COMMUNITY CARE, INC. , a Nevada corporation, MCALLEN COMMUNITY HEALTHCARE, INC. , a Nevada corporation, VICTORIA VENTURA HEALTHCARE LLC , a Nevada limited liability company, COSTA VICTORIA HEALTHCARE LLC , a Nevada limited liability company, VISTA WOODS HEALTH ASSOCIATES LLC , a Nevada limited liability company, PARK WAVERLY HEALTHCARE LLC , a Nevada limited liability company, WELLINGTON HEALTHCARE, INC. , a Nevada corporation, ENSIGN WHITTIER EAST LLC , a Nevada limited liability company, and TOWN EAST HEALTHCARE, INC. , a Nevada corporation, (each a “ Borrower ” and collectively the “ Borrowers ”), THE ENSIGN GROUP, INC. , a Delaware corporation (“ Ensign ”), (each a “ Borrower ” and collectively the “ Borrowers ”), HUENEME HEALTHCARE, INC ., a Nevada corporation, PINEY LUFKIN HEALTHCARE, INC. , a Nevada corporation and BAYSHORE HEALTHCARE, INC. , a Nevada corporation (each, a “ New Operating Company ” and collectively the “ New Operating Companies ”) and GENERAL ELECTRIC CAPITAL CORPORATION , as Lender.

 

 

 

RECITALS
A. Pursuant to that certain Second Amended and Restated Loan and Security Agreement dated as of February 21, 2008 by and between Borrowers, Ensign, the other parties thereto 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 and to add as new Borrower certain New Operating Companies that are party to this Amendment.
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 Agreement. Capitalized terms used but not defined in this Amendment shall have the meanings that are set forth in the Loan Agreement.
1. Amendments to Loan Agreement.
(a) Section 1.1 of the Loan Agreement is hereby amended by inserting in proper alphabetical order the following new definitions:
““ Borrower ” means any Closing Date Borrower, any New Operating Company that has executed a Joinder Agreement or any New Operating Company that is party to the First Amendment.”
““ First Amendment ” means that certain Amendment No. 1 and Joinder Agreement to this Agreement dated as of February 4, 2009 by and among Borrowers, certain other parties thereto and Lender.”
““ First Amendment Effective Date ” means February 4, 2009.”
““ Restricted Collateral Reserve ” means that certain Reserve in the initial amount of $6,000,000 established by Lender in its reasonable credit judgment pursuant to the First Amendment and in accordance with Section 2.1(e), which may be reduced by Lender in its reasonable credit judgment from time to time upon receipt of additional information with respect to developments in the investigation by the United States Attorney for the Central District of California described on Schedules 4.5 and 4.13 to this Agreement.”
(b) Section 2.1(d) of the Loan Agreement is hereby amended by deleting the first sentence of Section 2.1(d) and by inserting in lieu thereof the following:
“Subject to the terms and conditions of this Agreement, advances under the Loan shall be made against a borrowing base equal to (a) eighty-five percent (85%) of Qualified Accounts due and owing from any Medicaid/Medicare, Insurer or other Account Debtor minus (b) for all periods from and after the First Amendment Effective Date through the earlier of (i) the date of which Lender has received evidence in form and substance satisfactory to Lender of a resolution satisfactory to Lender of the investigation by the United States Attorney for the Central District of California described on Schedules 4.5 and 4.13 to this Agreement and (ii) the date on which Lender sends notice to Borrowers of elimination of the Restricted Collateral Reserve in its entirety, the Restricted Collateral Reserve applicable at such time (the “ Borrowing Base ”).”
2.  Joinder . The New Operating Companies hereby join the Loan Agreement (as amended by this Amendment) each as a Borrower thereunder and agree to be bound by all of the terms thereof, and shall be as if New Operating Company were an original signatory thereto. The New Operating Companies hereby assume all of the obligations of a Borrower under the Loan Agreement and this Amendment and ratify and affirm as of the date hereof each and every term, representation, warranty, covenant and condition set forth in the Loan Agreement and this Amendment and agree to be bound by all of the terms, provisions and conditions contained in the Loan Agreement and this Amendment applicable to a Borrower. Each reference to a “Borrower” in the Loan Agreement or any other Loan Document shall be deemed to include the New Operating Companies signatory hereto.

 

 

 

3.  Confirmation . Each of the undersigned Closing Date Borrowers and Guarantors hereby acknowledges, consents and agrees to the terms of the foregoing joinder of the New Operating Companies to the Loan Agreement and this Amendment set forth in Section 2 of this Amendment and agrees and confirms that its obligations under each Loan Document to which it is a party (including without limitation the provisions of any Guaranty Agreement in the case of each Guarantor) will continue in full force and effect after giving effect to such joinder, and nothing in such joinder or this Amendment shall be deemed to constitute a novation or an accord and satisfaction of any of the Obligations or to modify, affect or impair the perfection or continuity of Lender’s security interests in, security titles to or other liens on any Collateral.
4.  Confirmation of Representations and Warranties . Each 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, and as otherwise permitted pursuant to the Loan Agreement.
5.  Effective Date. This Amendment shall be effective upon Lender’s receipt of, in each case in form and substance satisfactory to Lender:
(a) this Amendment executed by a duly authorized member and/or officer of each Closing Date Borrower, each New Operating Company and each Guarantor;
(b) updated Schedules to the Loan Agreement with respect to the New Operating Companies. Each 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;
(c) all searches and good standing certificates required by Lender for the New Operating Companies, if any;
(d) copies of all resolutions of each New Operating Company’s board of directors and other action taken by each New Operating Company to authorize the execution, delivery and performance of the Loan Documents, as well as the names and signatures of the officers of each New Operating Company authorized to execute documents on its behalf in connection with the Loan, all as also certified as of the date of this Amendment by such New Operating Company’s officer, or equivalent, and such other papers as Lender may require;
(e) copies, certified as true, correct and complete by a corporate officer of each New Operating Company, of the certificate of incorporation of each New Operating Company, with any amendments to any of the foregoing, and all other documents necessary for performance of the obligations of the New Operating Companies under this Amendment and the other Loan Documents;
(f) Lender shall have completed its legal due diligence review of the New Operating Companies;
(g) evidence that the Lockboxes, Lockbox Accounts and the Concentration Account have been established for each New Operating Company and Lockbox Agreements (or amendments to existing Lockbox Agreements, to the extent applicable) entered into with the Lockbox Bank;
(h) evidence of updated or appropriate insurance for the New Operating Companies;
(i) landlord waivers in each case in form and substance satisfactory to Lender in its commercially reasonable discretion from each New Operating Company’s landlord or sublandlord, as the case may be, with respect to each of the facilities identified on Schedule 4.15 attached to this Amendment; and
(j) Lender shall have received an opinion from legal counsel to the New Operating Companies, in form and substance, as required by Lender in its sole discretion.

 

 

 

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.  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.
8. 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.
9.  Governing Law . This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to any otherwise applicable principles of conflicts of laws.
10.  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.
11.  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]

 

 

 

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/ Jeffrey P. Hoffman    
    Name:   Jeffrey P. Hoffman   
    Title:   Duly Authorized Signatory   
AMENDMENT NO. 1 & JOINDER AGREEMENT
SIGNATURE PAGE

 

 

 

CLOSING DATE BORROWERS:
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/ Soon Burnam       By:   /s/ Beverly Wittekind    
 
 
 
Soon Burnam 		         
 
Name: Beverly Wittekind 		   
 
  Treasurer           Title: 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
                     
ATTEST/WITNESS:       By:   Northern Pioneer Healthcare, Inc.    
 
              Its Sole Member    
 
                   
By:
  /s/ Soon Burnam       By:   /s/ Cory E. Monette    
 
 
 
Soon Burnam 		         
 
Name: Cory E. Monette 		   
 
  Treasurer           Title: President    
[SIGNATURES CONTINUE ON FOLLOWING PAGES]
AMENDMENT NO. 1 & JOINDER AGREEMENT
SIGNATURE PAGE

 

 

 

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/ Soon Burnam       By:   /s/ John Albrechtsen    
 
 
 
Soon Burnam 		         
 
Name: John Albrechtsen 		   
 
  Treasurer           Title: President    
ENSIGN SABINO LLC
24 TH 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/ Soon Burnam       By:   /s/ Michael C. Dalton    
 
 
 
Soon Burnam 		         
 
Name: Michael C. Dalton 		   
 
  Treasurer           Title: President    
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
AMENDMENT NO. 1 & JOINDER AGREEMENT
SIGNATURE PAGE

 

 

 

ATLANTIC MEMORIAL HEALTHCARE
ASSOCIATES, INC.
AVENUES HEALTHCARE, INC.
BERNARDO HEIGHTS HEALTHCARE, INC.
CAMARILLO COMMUNITY CARE, INC.
CARROLLTON HEIGHTS HEALTHCARE, INC.
GRAND VILLA PHX, INC.
HOQUIAM HEALTHCARE, INC.
LIVINGSTON CARE ASSOCIATES, INC.
LYNNWOOD HEALTH SERVICES, INC.
MCALLEN COMMUNITY HEALTHCARE, INC.
NORTHERN OAKS HEALTHCARE, INC.
OLYMPUS HEALTH, INC.
POCATELLO HEALTH SERVICES, INC.
RAMON HEALTHCARE ASSOC, INC.
RENEWCARE OF SCOTTSDALE, INC.
RICHMOND SENIOR SERVICES, INC.
ROSE PARK HEALTHCARE ASSOCIATES, INC.
SALADO CREEK SENIOR CARE, INC.
SOUTH VALLEY HEALTHCARE, INC.
TOWN EAST HEALTHCARE, INC.
UPLAND COMMUNITY CARE, INC.
WASHINGTON HEIGHTS HEALTHCARE, INC.
WELLINGTON HEALTHCARE, INC.
each, a Nevada corporation
                     
ATTEST/WITNESS:                
 
By:
  /s/ Soon Burnam       By:   /s/ Beverly Wittekind    
 
 
 
Soon Burnam 		         
 
Name: Beverly Wittekind 		   
 
              Title: Secretary    
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
AMENDMENT NO. 1 & JOINDER AGREEMENT
SIGNATURE PAGE

 

 

 

         
 
NEW OPERATING COMPANIES :

HUENEME HEALTHCARE, INC.,
a Nevada corporation
  		 
  By:   /s/ Beverly Wittekind    
    Name:   Beverly Wittekind   
    Title:   Secretary   
         
  PINEY LUFKIN HEALTHCARE, INC. ,
a Nevada corporation
  		 
  By:   /s/ Beverly Wittekind    
    Name:   Beverly Wittekind   
    Title:   Secretary   
         
  BAYSHORE HEALTHCARE, INC. ,
a Nevada corporation
  		 
  By:   /s/ Beverly Wittekind    
    Name:   Beverly Wittekind   
    Title:   Secretary   
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
AMENDMENT NO. 1 & JOINDER AGREEMENT
SIGNATURE PAGE

 

 

 

                     
 
          GUARANTORS:    
 
                   
 
          THE ENSIGN GROUP, INC.,    
 
          a Delaware corporation    
 
                   
ATTEST/WITNESS:       By:   /s/ Christopher R. Christensen    
 
             
 
Name: Christopher R. Christensen 		   
By:
  /s/ Gregory Stapley           Title: President    
 
 
 
Gregory Stapley 		               
 
  Secretary                
 
                   
 
          THE FLAGSTONE GROUP, INC.,    
 
          a Nevada corporation    
 
                   
ATTEST/WITNESS:       By:   /s/ Beverly Wittekind    
 
             
 
Name: Beverly Wittekind 		   
By:
  /s/ Soon Burnam           Title: Secretary    
 
 
 
Soon Burnam 		               
 
  Treasurer                
 
                   
 
          BANDERA HEALTHCARE, INC.,    
 
          a Nevada corporation    
 
                   
ATTEST/WITNESS:       By:   /s/ Michael C. Dalton    
 
             
 
Name: Michael C. Dalton 		   
By:
  /s/ Soon Burnam           Title: President    
 
 
 
Soon Burnam 		               
 
  Treasurer                
 
                   
 
          MILESTONE HEALTHCARE, INC.,    
 
          a Nevada corporation    
 
                   
ATTEST/WITNESS:
      By:   /s/ Beverly Wittekind    
 
             
 
Name: Beverly Wittekind 		   
By:
  /s/ Soon Burnam           Title: Secretary    
 
                   
 
  Soon Burnam                
 
  Treasurer                
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
AMENDMENT NO. 1 & JOINDER AGREEMENT
SIGNATURE PAGE

 

 

 

                     
 
          KEYSTONE CARE, INC.,    
 
          a Nevada corporation    
 
                   
ATTEST/WITNESS:       By:   /s/ Barry Port    
 
             
 
Name: Barry Port 		   
By:
  /s/ Soon Burnam           Title: President    
 
                   
 
  Soon Burnam                
 
  Treasurer                
 
                   
 
          NORTHERN PIONEER HEALTHCARE, INC.,    
 
          a Nevada corporation    
 
                   
ATTEST/WITNESS:       By:   /s/ Cory E. Monette    
 
             
 
Name: Cory E. Monette 		   
By:
  /s/ Soon Burnam           Title: President    
 
                   
 
  Soon Burnam                
 
  Treasurer                
 
                   
 
          TOUCHSTONE CARE, INC.,    
 
          a Nevada corporation    
 
                   
ATTEST/WITNESS:       By:   /s/ John Albrechtsen    
 
             
 
Name: John Albrechtsen 		   
By:
  /s/ Soon Burnam           Title: President    
 
                   
 
  Soon Burnam                
 
  Treasurer                
AMENDMENT NO. 1 & JOINDER AGREEMENT
SIGNATURE PAGE
 

 

 

 

LIST OF SCHEDULES
(NEW OPERATING COMPANIES)
         
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 Affiliate

 

 

Exhibit 10.2
SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
THIS SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO THE BORROWERS, (2) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER THAT IS AWARE THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
     
February 4, 2009   $50,000,000.00
FOR VALUE RECEIVED, the undersigned (“each a “ Borrower ” and collectively the “ Borrowers ”) HEREBY JOINTLY AND SEVERALLY PROMISE TO PAY to the order of GENERAL ELECTRIC CAPITAL CORPORATION (“ Lender ”), a Delaware corporation, at its address at 2 Bethesda Metro Center, Suite 600, Bethesda, Maryland 20814, or at such other place as Lender may designate from time to time in writing, in lawful money of the United States of America and in immediately available funds, the amount of FIFTY MILLION DOLLARS AND NO CENTS ($50,000,000.00) or, if less, the aggregate unpaid amount of all Revolving Credit Loans made to the undersigned under the Loan Agreement (as hereinafter defined). Each Borrower further jointly and severally promises to pay interest on the outstanding unpaid principal amount hereof from the date hereof until payment in full at the rate or rates from time to time applicable to the Revolving Credit Loans as determined in accordance with the Loan Agreement. All capitalized terms used but not otherwise defined herein have the meanings given to them in the Loan Agreement.
This Second Amended and Restated Revolving Credit Note (“ Note ”) is one of the Notes issued pursuant to that certain Second Amended and Restated Loan and Security Agreement dated as of February 21, 2008, by and among Borrowers, The Ensign Group, Inc., the other Persons signatory thereto and Lender (including all annexes, exhibits and schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “ Loan Agreement ”), and is entitled to the benefit and security of the Loan Agreement and all of the other Loan Documents referred to therein. Reference is hereby made to the Loan Agreement for a statement of all of the terms and conditions under which the Loan evidenced hereby is made and is to be repaid.
The principal amount of the indebtedness evidenced hereby shall be payable in the amounts and on the dates specified in the Loan Agreement, the terms of which are hereby incorporated herein by reference. Interest thereon shall be paid until such principal amount is paid in full at such interest rates and at such times, and pursuant to such calculations, as are specified in the Loan Agreement. If any payment on this Note becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, the entire principal amount of this Note, together with all accrued interest thereon, may, as provided in the Loan Agreement, and without demand, notice or legal process of any kind, be declared, and immediately shall become, due and payable.
Time is of the essence of this Note. Demand, presentment, protest and notice of nonpayment and protest are hereby waived by Borrowers. Each Borrower further agrees, subject only to any limitation imposed by applicable law, to pay all expenses, including attorneys’ fees and legal expenses, incurred by Lender in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by acceleration or otherwise.

 

 

 

THIS NOTE AMENDS, RESTATES, AND REPLACES IN ITS ENTIRETY THAT CERTAIN AMENDED AND RESTATED REVOLVING CREDIT NOTE, DATED AS OF FEBRUARY 21, 2008, BY AND AMONG CERTAIN BORROWERS, THE OTHER PARTIES SIGNATORY THERETO AND LENDER, AS OF THE DATE HEREOF. AS SUCH, THIS NOTE CONTINUES TO EVIDENCE SUCH INDEBTEDNESS AND SHALL NOT CONSTITUTE OR EVIDENCE PAYMENT FOR OR A NOVATION OF SUCH INDEBTEDNESS.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. Whenever possible each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provisions of this Note shall be prohibited by or invalid under applicable law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note. Whenever in this Note reference is made to Lender or Borrowers, such reference shall be deemed to include, as applicable, a reference to their respective permitted successors and assigns, and in the case of Lender, any financial institution to which it has sold or assigned all or any part of its interest in the Loan or in its commitment to make Revolving Credit Loans as permitted by the Loan Agreement. The provisions of this Note shall be binding upon and inure to the benefit of such successors and assigns, except that no Borrower may assign its rights or obligations. Each Borrower’s successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for such Borrower.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

-2-

 

IN WITNESS WHEREOF, the undersigned have executed this Second Amended and Restated Revolving Credit Note as of the date first above written.
                     
        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/ Soon Burnam   By:   /s/ Beverly Wittekind    
                 
 
  Soon Burnam       Name:   Beverly Wittekind    
 
  Treasurer       Title:   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    
 
                   
ATTEST/WITNESS:   By:   Northern Pioneer Healthcare, Inc.
Its Sole Member 		   
 
                   
By:
  /s/ Soon Burnam   By:   /s/ Cory E. Monette    
                 
 
  Soon Burnam       Name:   Cory E. Monette    
 
  Treasurer       Title:   President    
 
                   
[SIGNATURES CONTINUE ON FOLLOWING PAGES]
SECOND AMENDED & RESTATED REVOLVING CREDIT NOTE
SIGNATURE PAGE

 

 

 

                     
        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/ Soon Burnam   By:   /s/ John Albrechtsen    
                 
 
  Soon Burnam       Name:   John Albrechtsen    
 
  Treasurer       Title:   President    
 
                   
        ENSIGN SABINO LLC    
        24 TH 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/ Soon Burnam   By:   /s/ Michael C. Dalton    
                 
 
  Soon Burnam       Name:   Michael C. Dalton    
 
  Treasurer       Title:   President    
 
                   
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
SECOND AMENDED & RESTATED REVOLVING CREDIT NOTE
SIGNATURE PAGE

 

 

 

                     
        ATLANTIC MEMORIAL HEALTHCARE ASSOCIATES, INC.    
        AVENUES HEALTHCARE, INC.    
        BERNARDO HEIGHTS HEALTHCARE, INC.    
        CAMARILLO COMMUNITY CARE, INC.    
        CARROLLTON HEIGHTS HEALTHCARE, INC.    
        GRAND VILLA PHX, INC.    
        HOQUIAM HEALTHCARE, INC.    
        LIVINGSTON CARE ASSOCIATES, INC.    
        LYNNWOOD HEALTH SERVICES, INC.    
        MCALLEN COMMUNITY HEALTHCARE, INC.    
        NORTHERN OAKS HEALTHCARE, INC.    
        OLYMPUS HEALTH, INC.    
        POCATELLO HEALTH SERVICES, INC.    
        RAMON HEALTHCARE ASSOC, INC.    
        RENEWCARE OF SCOTTSDALE, INC.    
        RICHMOND SENIOR SERVICES, INC.    
        ROSE PARK HEALTHCARE ASSOCIATES, INC.    
        SALADO CREEK SENIOR CARE, INC.    
        SOUTH VALLEY HEALTHCARE, INC.    
        TOWN EAST HEALTHCARE, INC.    
        UPLAND COMMUNITY CARE, INC.    
        WASHINGTON HEIGHTS HEALTHCARE, INC.    
        WELLINGTON HEALTHCARE, INC.    
        each, a Nevada corporation    
 
                   
ATTEST/WITNESS:                
 
                   
By:
  /s/ Soon Burnam   By:   /s/ Beverly Wittekind    
                 
 
  Soon Burnam       Name:   Beverly Wittekind    
 
          Title:   Secretary    
 
                   
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
SECOND AMENDED & RESTATED REVOLVING CREDIT NOTE
SIGNATURE PAGE

 

 

 

                     
        BAYSHORE HEALTHCARE, INC.    
        HUENEME HEALTHCARE, INC.    
        PINEY LUFKIN HEALTHCARE, INC.    
        each, a Nevada corporation    
 
                   
ATTEST/WITNESS:                
 
                   
By:
  /s/ Soon Burnam   By:   Beverly Wittekind    
                 
 
  Soon Burnam       Name:   Beverly Wittekind    
 
          Title:   Secretary    

 

 

Exhibit 99.1
(ENSIGN GROUP LOGO)
The Ensign Group Expand into Colorado
DENVER, Colorado, February 3, 2009 – The Ensign Group, Inc. (NASDAQ: ENSG), announced today that it has expanded into Colorado by acquiring four long-term care facilities in the Denver metropolitan area. The facilities include Littleton Manor, a 35-bed skilled nursing facility in Littleton, Arvada Nursing Center, a 54-bed skilled nursing facility in Arvada, Julia Temple Center, a 128-bed skilled nursing facility in Englewood, and Chateau des Mons, a 48-bed assisted living facility in Englewood. The transfer was effective February 1, 2009.
“We are excited to extend our growing footprint into Colorado, and look forward to being a solid contributor to the Denver area’s vibrant healthcare community,” said Christopher Christensen, Ensign’s President and Chief Executive Officer. Noting that all four facilities have outstanding clinical histories, stable long-term staffs and excellent reputations in their communities, he called them “the perfect platform for establishing Ensign’s presence” in Colorado.
Ensign expects the newly-acquired facilities, which had a combined occupancy rate of approximately 86% at acquisition, to be accretive to earnings in 2009.
Ensign purchased the facilities from a not-for-profit corporation which had owned and operated them since 1990. Even though it was not the high bidder, Ensign was selected because its patient-centered operating philosophy most closely matched the seller’s, according to a spokesman for the seller. “We are pleased that the former owner would entrust its legacy of excellence to us, and we expect to grow and enhance that legacy,” said Mr. Christensen.
The flagship of the group, Julia Temple Center, was founded in 1921 as a residential treatment center for tuberculosis patients by Ms. Julia Temple, a nurse at nearby Swedish Hospital. Over time the Center grew and broadened its service offerings, becoming Colorado’s first dedicated Alzheimer’s care facility. The original facility was replaced by a new building in 1963, which has undergone several updates since then. Ensign is planning additional renovations, and also plans to continue serving Julia Temple Center’s unique resident base.
Mr. Christensen reconfirmed that Ensign is actively seeking additional opportunities to acquire both well-performing and struggling long-term care operations across the Western United States. The Colorado acquisitions bring Ensign’s growing portfolio to 69 facilities, 37 of which are Ensign-owned. Ensign affiliates hold purchase options on nine of the 32 leased facilities.
About Ensign ™
The Ensign Group, Inc.’s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, and other rehabilitative and healthcare services for both long-term residents and short-stay rehabilitation patients at 69 facilities in California, Arizona, Texas, Washington, Utah, Idaho and Colorado. More information about Ensign is available at http://www.ensigngroup.net.
Contact Information
Gregory Stapley, Investor/Media Relations, The Ensign Group, Inc., (949) 487-9500, ir@ensigngroup.net
SOURCE: The Ensign Group, Inc.