exv10w52



 





Exhibit 10.52




SECOND AMENDMENT TO LEASE

(Mission Ridge)




     THIS SECOND AMENDMENT TO LEASE (“Second Amendment”) is made and entered into as of the
13th day of December, 2007, by and between MISSION RIDGE ASSOCIATES LLC, a Delaware
limited liability company (“Landlord”), and ENSIGN FACILITY SERVICES, INC., a Nevada corporation
(“Tenant”).



R E C I T A L S:




     A. Landlord and Tenant, entered into that certain Office Lease dated as of August 28, 2003
(the “Lease”), as amended by that certain First Amendment to Lease Agreement dated January 15,
2004, whereby Landlord leased to Tenant and Tenant leased from Landlord certain office space
located in that certain building located and addressed at 27101 Puerta Real, Mission Viejo,
California 92691 (the “Building”).



     B. By this Second Amendment, Landlord and Tenant desire to expand the Premises and to
otherwise modify the Lease as provided herein.



     C. Unless otherwise defined herein, capitalized terms as used herein shall have the same
meanings as given thereto in the Lease.



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



A G R E E M E N T:




     1. The Premises. Landlord and Tenant hereby agree that pursuant to the Lease,
Landlord currently leases to Tenant and Tenant currently leases from Landlord that certain office
space in the Building containing 15,920 rentable (14,242 usable) square feet located on the fourth
(4th) floor of the Building and commonly known as Suite 450 (the “Original Premises”),
as further described in the Lease.



     2. Expansion of the Premises. Effective as of the Expansion Effective Date (defined
below), the “Premises”, as defined in the Lease, is increased to approximately 20,719 rentable
square feet on the fourth (4th) floor of the Building by the addition of space
containing approximately 4,799 rentable (4,280 usable) square feet described as Suite Nos. 460 and
470 on the fourth (4th) floor of the Building as shown on Exhibit A attached
hereto (the “Expansion Space”). From and after the Expansion Effective Date, the Original Premises
and the Expansion Space, collectively, shall be deemed the Premises, as defined in the Lease and as
used herein. The Lease Term for the Expansion Space shall commence on the Expansion Effective Date
and end on the Lease Expiration Date. The Expansion Space is subject to all the terms and
conditions of the Lease except as expressly modified herein and except that Tenant shall not be
entitled to receive any allowances, abatements or other financial concessions granted with respect
to the Original Premises unless such concessions are expressly provided for herein with respect to
the Expansion Space.




	 	2.1	 	The Expansion Effective Date shall be the later to occur of (i) January 1, 2008
(“Target Expansion Effective Date”), and (ii) the date upon which the Tenant
Improvements (as




 









 






	 	 	 	defined in the “Tenant Work Letter” attached as Exhibit B hereto) in the
Expansion Space have been substantially completed; provided, however, that if
Landlord shall be delayed in substantially completing the Tenant Improvements in the
Expansion Space as a result of the occurrence of a Tenant Delay (defined below),
then, for purposes of determining the Expansion Effective Date, the date of
substantial completion shall be deemed to be the day that said Tenant Improvements
would have been substantially completed absent any such Tenant Delay(s). A “Tenant
Delay” means any act or omission of Tenant or its agents, employees, vendors or
contractors that actually delays substantial completion of the Tenant Improvements,
including, without limitation, the following:






	 	2.1.1	 	Tenant’s failure to furnish information or approvals within
any time period specified in the Lease or this Second Amendment, including the
failure to prepare or approve preliminary or final plans by any applicable due
date;
	 
	 	2.1.2	 	Tenant’s selection of equipment or materials that have long
lead times after first being informed by Landlord that the selection may result
in a delay;
	 
	 	2.1.3	 	Changes requested or made by Tenant to previously approved
plans and specifications;
	 
	 	2.1.4	 	The performance of work in the Expansion Space by Tenant or
Tenant’s contractor(s) during the performance of the Tenant Improvements; or
	 
	 	2.1.5	 	If the performance of any portion of the Tenant Improvements
depends on the prior or simultaneous performance of work by Tenant, a delay by
Tenant or Tenant’s contractor(s) in the completion of such work.






	 	 	 	The Expansion Space shall be deemed to be substantially completed on the date that
Landlord reasonably determines that all Tenant Improvements have been performed (or
would have been performed absent any Tenant Delays), other than any details of
construction, mechanical adjustment or any other matter, the noncompletion of which
does not materially interfere with Tenant’s use of the Expansion Space. The
adjustment of the Expansion Effective Date and, accordingly, the postponement of
Tenant’s obligation to pay rent on the Expansion Space shall be Tenant’s sole remedy
and shall constitute full settlement of all claims that Tenant might otherwise have
against Landlord by reason of the Expansion Space not being ready for occupancy by
Tenant on the Target Expansion Effective Date.
	 
	 	2.2	 	In addition to the postponement, if any, of the Expansion Effective Date as a
result of the applicability of Section 2.1 of this Second Amendment, the Expansion
Effective Date shall be delayed to the extent that Landlord fails to deliver possession
of the Expansion Space for any other reason (other than Tenant Delays), including but
not limited to, holding over by prior occupants. Any such delay in the Expansion
Effective Date shall not subject Landlord to any liability for any loss or damage
resulting therefrom. If the Expansion Effective Date is delayed, the Lease Expiration
Date shall not be similarly extended.





     3. Monthly Base Rent. Notwithstanding anything to the contrary in the Lease, as of
the Expansion Effective Date, Tenant shall pay, in accordance with the provisions of this Section 3
(but subject to Section 4 below), monthly Base Rent for the Expansion Space as follows:



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	 	 	 	 	 	 	Monthly Base Rent Per
	 	 	 	 	 	 	Rentable Square Foot
	Months	 	Monthly Base Rent	 	of Premises
	Expansion Effective Date -12
	 	$	14,157.05	 	 	$	2.95	 
	13-Lease Expiration Date
	 	$	14,588.96	 	 	$	3.04	 






     Landlord and Tenant acknowledge that the foregoing schedule is based on the assumption that the
Expansion Effective Date is the Target Expansion Effective Date. If the Expansion Effective Date
is other than the Target Expansion Effective Date, the schedule set forth above with respect to the
payment of any installment(s) of monthly Base Rent for the Expansion Space shall be appropriately
adjusted on a per diem basis to reflect the actual Expansion Effective Date, and the actual
Expansion Effective Date shall be set forth in a confirmation letter to be prepared by Landlord.



     4. Base Rent Abatement. Notwithstanding anything above to the contrary and provided
that the Tenant faithfully performs all of the terms and conditions of the Lease (as modified by
this Second Amendment), Landlord hereby agrees to abate Tenant’s obligation to pay Tenant’s monthly
Base Rent for the first (1st) full month following the Expansion Effective Date. During
such abatement period, Tenant shall still be responsible for the payment of all other monetary
obligations under the Lease (as modified by this Second Amendment). In the event of a default by
Tenant under the terms of the Lease (as modified by this Second Amendment) that results in early
termination pursuant to the provisions of Article 19 of the Lease, then as a part of the recovery
set forth in Article 19 of the Lease, Landlord shall be entitled to the recovery of the monthly
Base Rent that was abated under the provisions of this Section 4.



     5. Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs; Base Year.
Notwithstanding anything to the contrary in the Lease, for the period commencing with the Expansion
Effective Date and ending on the Lease Expiration Date, Tenant’s Share for the Expansion Space is
4.14%. Tenant’s Share for the Expansion Space and the Original Premises is, collectively, 17.86%.
The Expense Base Year and the Utilities Base Year for the Expansion Space shall be the calendar
year of 2008.



     6. Parking. In addition to the parking passes to which Tenant is entitled under the
Lease, Tenant shall be entitled to four (4) parking passes for every 1,000 usable square foot of
the Expansion Space. Tenant’s use of such parking passes shall be in accordance with, and subject
to, all provision of Article 23 of the Original Lease. In addition, Tenant shall be responsible at
all times for the full amount of any taxes imposed by any governmental authority in connection with
the rental of such parking passes by Tenant or the use of the parking facilities by Tenant.



     7. Improvements to the Expansion Space. Tenant hereby agrees to accept the Expansion
Space in its “AS-IS” condition. Tenant hereby acknowledges that Landlord shall not be obligated to
provide or pay for any improvement work or services related to the improvement of the Expansion
Space, except as may be expressly provided otherwise in this Second Amendment. Landlord shall
perform improvements to the Expansion Space in accordance with the terms of Exhibit B
attached hereto. Tenant also acknowledges that Landlord has made no representation or warranty
regarding the condition of the Expansion Space.



     8. Brokers. Each party represents and warrants that it has had no dealings with any
real estate broker, agent or finder in connection with the Expansion Space except for the Staubach
Company (“Broker”) with this Second Amendment. Tenant further represents and warrants to Landlord
that



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Tenant will not receive (i) any portion of any potential brokerage commission or finder’s fee
payable to Broker in connection with this lease or (ii) any other form of compensation or incentive
from Broker with respect to this Second Amendment. Broker will receive a commission from Landlord,
should an amendment be fully executed by Landlord and Tenant, equal to four (4%) percent of the
total lease consideration. Each party further agrees to defend, indemnify and hold harmless the
other party from and against any claim for commission or finder’s fee by any entity (other than
Broker and the Grubb & Ellis Company) who claims or alleges that they were retained or engaged by
the first party or at the request of such party in connection with this Second Amendment.



     9. Defaults. Tenant hereby represents and warrants to Landlord that, as of the date
of this Second Amendment, Tenant is in full compliance with all terms, covenants and conditions of
the Lease and that there are no breaches or defaults under the Lease by Landlord or Tenant, and
that Tenant knows of no events or circumstances which, given the passage of time, would constitute
a default under the Lease by either Landlord or Tenant.



     10. Signing Authority. Tenant hereby represents and warrants that Tenant is a duly
formed and existing entity qualified to do business in the State of California and that Tenant has
full right and authority to execute and deliver this Second Amendment and that each person signing
on behalf of Tenant is authorized to do so. Tenant hereby represents and warrants that neither
Tenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant,
are (i) the target of any sanctions program that is established by Executive Order of the President
or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”);
(ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App.
§ 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act,
Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the
President issued pursuant to such statutes; or (iii) named on the following list that is published
by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing
representation is untrue at any time during the Extended Lease Term, a default under the Lease will
be deemed to have occurred, without the necessity of notice to Tenant.



     11. Guaranty. At Landlord’s option, this Second Amendment shall be of no force and
effect unless and until accepted in writing by any guarantors of the Lease, who by signing that
certain Reaffirmation of Guaranty of Lease, dated on or about the date hereof, shall agree that
their guaranty shall apply to the Lease as amended herein, unless such requirement is waived by
Landlord in writing.



     12. No Further Modification. Except as set forth in this Second Amendment, all of the
terms and provisions of the Lease shall remain unmodified and in full force and effect.



     13. ERISA. To satisfy compliance with the Employee Retirement Income Security Act of
1974, as amended, Tenant represents and warrants to Landlord and The Prudential Insurance Company
of America, a New Jersey corporation (“Prudential”), that:



               (a) Tenant is not an “employee benefit plan” (as that term is defined in Section 3(3) of
ERISA); and



               (b) Tenant is not acquiring an interest in the Expansion Space as a plan asset subject to
ERISA but for Tenant’s own investment account; and



               (c) Tenant is not an “affiliate” of Prudential as defined in Section IV(b) of PTE 90-1;



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               (d) Tenant is not a “party in interest” (as that term is defined in Section 3(14) of ERISA) to
the Virginia Retirement System; and



               (e) Tenant agrees to keep the identity of the Virginia Retirement System confidential, except
to the extent that Tenant may be required to disclose such information as a result of (i) legal
process, or (ii) compliance with ERISA or other Laws governing Tenant’s operations.



     14. Limitation of Liability. Redress for any claim against Landlord under the Lease
and this Second Amendment shall be limited to and enforceable only against and to the extent of
Landlord’s interest in the Building. The obligations of Landlord under the Lease are not intended
to and shall not be personally binding on, nor shall any resort be had to the private properties
of, any of its trustees or board of directors and officers, as the case may be, its investment
manager, the general partners thereof, or any beneficiaries, stockholders, employees, or agents of
Landlord or the investment manager.



     IN WITNESS WHEREOF, this Second Amendment has been executed as of the day and year first above
written.



	 	 	 	 	 	 	 	 	 	 	 
	“Landlord”:	 	MISSION RIDGE ASSOCIATES LLC,

a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Legacy Partners Commercial, L.P.,

a California limited partnership,

as Manager and Agent for Owner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Legacy Partners Commercial, Inc.,

General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Debra Smith
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Debra Smith
	 

	 	 	 	 	 	Its:
	 	Executive Vice President






	 	 	 	 	 	 	 	 	 
	“Tenant”:	 	ENSIGN FACILITY SERVICES, INC.,
a Nevada corporation
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Christopher R. Christensen	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Christopher R. Christensen	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:
	 	President & CEO	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 






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EXHIBIT A — OUTLINE AND LOCATION OF EXPANSION SPACE




attached to and made a part of the Amendment dated as of December 13, 2007, between

MISSION RIDGE ASSOCIATES LLC, a Delaware limited liability company (“Landlord”), and

ENSIGN FACILITY SERVICES, INC., a Nevada corporation (“Tenant”)




     This Exhibit A is intended only to show the general layout of the Expansion Space as of the
beginning of Expansion Effective Date. It does not in any way supersede any of Landlord’s rights
set forth in the Lease with respect to arrangements and/or locations of public parts of the
Building and changes in such arrangements and/or locations. It is not to be scaled; any
measurements or distances shown should be taken as approximate.




A-1









 








EXHIBIT B — TENANT WORK LETTER




attached to and made a part of the Amendment dated as of December 13, 2007, between

MISSION RIDGE ASSOCIATES LLC, a Delaware limited liability company (“Landlord”), and

ENSIGN FACILITY SERVICES, INC., a Nevada corporation (“Tenant”)




     As used in this Exhibit B, the “Premises” shall be deemed to mean the Expansion Space,
as defined in the Second Amendment to which this Exhibit B is attached.


1. Landlord shall perform improvements to the Premises substantially in accordance with the plans
prepared by Hattox Design Group, dated ___, and attached hereto as Exhibit B-1
(the “Plans”). The improvements to be performed by Landlord in accordance with the Plans are
hereinafter referred to as the “Tenant Improvements.” It is agreed that construction of the Tenant
Improvements will be completed at Landlord’s sole cost and expense (subject to the terms of Section
2 below) using Building standard methods, materials and finishes. Landlord shall enter into a
direct contract for the Tenant Improvements with a general contractor selected by Landlord. In
addition, Landlord shall have the right to select and/or approve of any subcontractors used in
connection with the Tenant Improvements. Landlord’s supervision or performance of any work for or
on behalf of Tenant shall not be deemed a representation by Landlord that such Plans or the
revisions thereto comply with applicable insurance requirements, building codes, ordinances, laws
or regulations, or that the improvements constructed in accordance with the Plans and any revisions
thereto will be adequate for Tenant’s use, it being agreed that Tenant shall be responsible for all
elements of the design of Tenant’s Plans (including, without limitation, compliance with law,
functionality of design, the structural integrity of the design, the configuration of the Premises
and the placement of Tenant’s furniture, appliances and equipment).



2. If Tenant shall request any revisions to the Plans, Landlord shall have such revisions prepared
at Tenant’s sole cost and expense and Tenant shall reimburse Landlord for the cost of preparing any
such revisions to the Plans, plus any applicable state sales or use tax thereon, upon demand.
Promptly upon completion of the revisions, Landlord shall notify Tenant in writing of the increased
cost in the Tenant Improvements, if any, resulting from such revisions to the Plans. Tenant,
within one business day, shall notify Landlord in writing whether it desires to proceed with such
revisions. In the absence of such written authorization, Landlord shall have the option to
continue work on the Premises disregarding the requested revision. Tenant shall be responsible for
any Tenant Delay in completion of the Premises resulting from any revision to the Plans. If such
revisions result in an increase in the cost of Tenant Improvements, such increased costs, plus any
applicable state sales or use tax thereon, shall be payable by Tenant upon demand. Notwithstanding
anything herein to the contrary, all revisions to the Plans shall be subject to the approval of
Landlord.



3. These Exhibits B and B-1 shall not be deemed applicable to any additional space, other
than the Expansion Space contemplated by this Amendment, added to the Premises at any time or from
time to time, whether by any options under the Lease, as amended hereby, or otherwise, or to any
portion of the original Premises or any additions to the Premises in the event of a renewal or
extension of the original Term of the Lease, whether by any options under the Lease or otherwise,
unless expressly so provided in the Lease or any amendment or supplement to the Lease.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




B-1









 








EXHIBIT B-1 — PLANS




attached to and made a part of the Amendment dated as of December 13, 2007, between

MISSION RIDGE ASSOCIATES LLC, a Delaware limited liability company (“Landlord”), and

ENSIGN FACILITY SERVICES, INC., a Nevada corporation (“Tenant”)





B-2









 








REAFFIRMATION OF 

GUARANTY OF LEASE




     THIS REAFFIRMATION OF GUARANTY OF LEASE dated as of December 13, 2007 is made by The Ensign
Group, Inc., a Delaware corporation (“Guarantor”) with respect to that certain Guaranty of Lease
dated as of August 29, 2003 (the “Guaranty”) by Guarantor in favor of MISSION RIDGE ASSOCIATES LLC,
a Delaware limited liability company (“Lessor”) with respect to that certain Lease Agreement dated
August 28, 2003 by and between Mission as “Lessor” and ENSIGN FACILITY SERVICES, INC., a Nevada
corporation (“Lessee”), as Lessee (as the same may have been amended, supplemented or otherwise
modified from time to time, the “Lease”), covering certain office space located in Mission Viejo,
California, as more particularly described in the Lease.



RECITALS




     WHEREAS, Lessor and Lessee desire to amend the Lease upon certain terms and conditions more
fully set forth in that certain Second Amendment to Lease of even date herewith (the “Amendment”);
and



WHEREAS, the Amendment is not effective until Guarantor reaffirms the Guaranty;




     NOW THEREFORE, in consideration of the premises and for other good and valuable consideration,
the receipt and sufficiency of which the Guarantor hereby acknowledges, Guarantor hereby agrees:



REAFFIRMATION




     AS A MATERIAL and necessary inducement to Lessor to fulfill its obligations with respect to
the Amendment, Guarantor hereby unconditionally and irrevocably reaffirms the Guaranty on the same
terms and conditions as set forth therein and confirms that Guarantor’s obligations under the
Guaranty shall and do extend to Lessee’s obligations under the Amendment, including but not limited
to the payment of rent and all other sums now or hereafter becoming due or payable under the Lease,
as amended by the Amendment.



     EXECUTED as of this 13th day of December, 2007.



	 	 	 	 	 
	 	THE ENSIGN GROUP, INC., 

a Delaware corporation 

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



	 	 	 	 	 
	 	 	 
	 	By:  	            /s/ Gregory K. Stapley
 	 
	 	 	Gregory K. Stapley                   	 
	 	 	Vice President