Exhibit 10.47  


PLEDGE AGREEMENT

(The Ensign Group, Inc.)  


        This Pledge Agreement (this "Agreement") is made as of September 30, 2003, between THE ENSIGN
GROUP, INC., a Delaware corporation ("Pledgor") and OHI ASSET (CA), LLC, a Delaware limited. liability company
("Creditor"). 


STATEMENT OF FACTS  


        A.
Pledgor is the owner of 100% of the outstanding equity interests in the following entities (collectively, the "Companies"): 


        (1)   Permunitum
LLC, a Nevada limited liability company ("Lessee"); 


        (2)   Vista
Woods Health Associates LLC, a Nevada limited liability company; 


        (3)   City
Heights Health Associates LLC, a Nevada limited liability company; and 


        (4)   Claremont
Foothills Health Associates LLC, a Nevada limited liability company. 


        B.    Lessee
and Creditor are parties to a Master Lease dated the same date as this Agreement (the "Master Lease"), pursuant to
which Creditor has leased to Lessee three skilled nursing facilities located in California. 


        C.    The
Master Lease provides that due performance and observance of Lessee's and its Affiliates (as defined in the Master Lease) obligations under the Master Lease and the
other Transaction Documents will be secured by a lien on the Pledged Collateral (as that term is defined below) granted pursuant to this Agreement. The term "Transaction
Documents", as used herein, shall have the meaning given it in the Master Lease. 


The
parties therefore agree as follows: 


        1.    Pledge; Grant of Security Interest.    Pledgor hereby grants to Creditor a security interest, on the terms and
subject to the conditions of this Agreement, in: 



	(a)
	all
Pledgor's right, title and interest in the Companies (the "Pledged Securities");



	(b)
	any
equity securities issued by a Company and any options, warrants or rights to acquire such securities, owned or acquired by Pledgor, directly or indirectly, now or at any time in
the future;



	(c)
	any
securities or other property issued or distributed to Pledgor with respect to any securities described in clauses (a) or (b) above as a dividend or distribution or as a
result of any amendment of the certificate of incorporation or other charter documents, merger, consolidation, redesignation, reclassification, purchase or sale of assets, dissolution, or plan of
arrangement, compromise or reorganization of the issuer thereof;



	(d)
	any
rights incidental to the ownership of any of the securities described in clauses (a), (b) or (c) above, such as voting, conversion and registration rights and rights of
recovery for violations of applicable securities laws; and



	(e)
	the
proceeds of the exercise, redemption, sale or exchange of any of the foregoing, or any dividend, interest payment or other distribution of cash or property in respect thereof. 




        All
of the foregoing may be referred to herein as the "Pledged Collateral". 


        2.    Secured Obligations.    The security interest described in Section 1 of this Agreement secures the prompt
and full payment when due (and not merely the ultimate collectibility) of all amounts now or hereafter due and owing by Lessee to Creditor pursuant to the Master Lease, or any extension or renewal
thereof, and prompt and full performance of all obligations of Lessee and its Affiliates under the Transaction Documents (the "Secured Obligations"). 







 



        3.    Delivery.    



	(a)
	Before,
or at the same time as the Pledgor has executed and delivered this Agreement to the Creditor, Pledgor has delivered to Creditor a fully executed Assignment in Blank
(substantially in the form of Exhibit A hereto) and with all necessary transfer tax stamps affixed.



	(b)
	If,
at any time, Pledgor obtains possession of any certificate or instrument constituting or representing any of the Pledged Collateral (other than interest and cash dividends),
Pledgor shall deliver such certificate or instrument to Creditor forthwith duly endorsed in blank without restriction or with a fully executed Assignment in Blank (substantially in the form of
Exhibit A hereto) and with all necessary transfer tax stamps affixed.



	(c)
	If
no Event of Default (as defined in Section 10 below) has occurred and is continuing, Pledgor may retain for its own use and shall not be required to deliver to Creditor any
interest payments on or any cash dividends or other cash distributions; if an Event of Default has occurred and is continuing, then all such interest, dividends and cash distributions shall be
delivered to the Creditor for application by Creditor toward payment of the Secured Obligations as Creditor may determine.



	(d)
	If
any of the Pledged Collateral is uncertificated securities, the Pledgor shall either (a) procure the issuance of security certificates to represent such Pledged Collateral
and endorse and deliver such certificates as required by paragraph (b) of this Section 3, or (b) cause the issuer thereof to register Creditor as the registered owner of such
securities, or (c) cause the issuer thereof to enter into an agreement, in form and substance satisfactory to Creditor, among Creditor, the registered owner of such security, and the issuer to
the effect that the issuer will comply with instructions originated by Creditor without further consent by the registered owner.



	(e)
	Pledgor
hereby irrevocably authorizes Creditor, at any time and from time to time, to take any and all actions Creditor may reasonably determine to be necessary to assure that the
security interests granted hereby are and remain perfected, including without limitation, filing financing statements, continuation statements and amendments thereto. Pledgor shall deliver to Creditor
such financing statements, continuation statements or other instruments as are deemed necessary by Creditor to enable it to perfect, and to maintain the perfection of, its security interest in the
Pledged Collateral under applicable law. The form of description of the Pledged Collateral to be attached to financing statements is attached hereto as  Schedule 1. 




        4.    Voting Rights.    If no Event of Default has occurred or is continuing, the Pledged Collateral will be
registered in the name of Pledgor, and Pledgor may exercise any voting or consensual rights that Pledgor may have as the owner of the Pledged Collateral for any purpose which is not inconsistent with
this Agreement. If an Event of Default has occurred and is continuing, Creditor may exercise all voting or consensual rights of the owners of any of the Pledged Collateral and Pledgor shall deliver to
Creditor all notices, proxy statements, proxies and other information and instruments relating to the exercise of such rights received by Pledgor from the issuers of any of the Pledged Collateral
promptly upon receipt thereof and shall at the request of Creditor execute and deliver to Creditor any proxies or other instruments which are, in the judgment of Creditor, necessary for Creditor to
validly exercise such voting and consensual rights. 


        5.    Duty of Creditor.    The duty of the Creditor with respect to the Pledged Collateral shall be solely to use
reasonable care in the physical custody thereof, and the Creditor shall not be under any obligation to take any action with respect to any of the Pledged Collateral or to preserve rights against prior
parties. The powers conferred on Creditor hereunder are solely to protect its interest in the Pledged Collateral and do not impose any duty upon it to exercise any such powers. Pledgor is not looking
to the Creditor to provide him with investment advice. Creditor shall have no duty to ascertain or take any action with respect to calls, conversions, exchanges, maturities, tenders or other matters 


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concerning
any Pledged Collateral, whether or not Creditor has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve any rights pertaining to any
Pledged Collateral. 


        6.    Subsequent Changes Affecting Pledged Collateral.    Pledgor acknowledges that it has made its own arrangements
for keeping informed of changes or potential changes affecting the Pledged Collateral (including, but not limited to, conversions, subscriptions, exchanges, reorganizations, dividends, tender offers,
mergers, consolidations and shareholder or other meetings) and Pledgor agrees that Creditor has no responsibility to inform Pledgor of such matters or to take any action with respect thereto even if
any of the Pledged Collateral has been registered in the name of Creditor or its agent or nominee. 



        7.    Return of Pledged Collateral.    The security interest granted to Creditor hereunder shall not terminate and
Creditor shall not be required to return the Pledged Collateral to Pledgor unless and until (a) the Secured Obligations have been fully paid or performed, (b) all of Pledgor's
obligations hereunder have been fully paid or performed, and (c) Pledgor has reimbursed Creditor for any expenses of returning the Pledged Collateral and filing such termination statements and
other instruments as are required to be filed in public offices under applicable laws. 



        8.    Representations and Warranties.    Pledgor hereby represents and warrants to Creditor as follows: 



	(a)
	Enforceability. This Agreement has been duly executed and delivered by Pledgor, constitutes its valid and legally binding obligation
and is enforceable against Pledgor in accordance with its terms. Pledgor has the legal capacity to enter into and perform all of its obligations and agreements under this Agreement. No consent or
approval for the entry into and performance by Pledgor of its obligations and agreements under this Agreement is necessary.



	(b)
	No Conflict. The execution, delivery and performance of this Agreement, the grant of the security interest in the Pledged Collateral
hereunder and the consummation of the transactions contemplated hereby will not, with or without the giving of notice or the lapse of time, (a) violate any material law applicable to Pledgor;
(b) violate any judgment, writ, injunction or order of any court or governmental body or officer applicable to Pledgor; (c) violate Pledgor's articles of incorporation or organization,
bylaws, partnership, shareholder or operating agreement; nor (d) violate any restriction on the transfer of any of the Pledged Collateral. Pledgor has the full and unrestricted right to pledge,
assign and create a security interest in the Pledged Collateral as described in and contemplated by this Agreement. The execution, delivery and performance of this Agreement by Pledgor will not affect
or in any way impair the Pledged Collateral or Pledgor's or Creditor's rights or interests therein.



	(c)
	No Consents. No consent, approval, license, permit or other authorization of any governmental body or officer is required for the valid
and lawful execution and delivery of this Agreement, the valid and lawful creation and perfection of the Creditor's security interest in the Pledged Collateral or the valid and lawful exercise by
Creditor of remedies available to it under this Agreement or applicable law or of the voting and other rights granted to it in this Agreement except as may be required for the offer or sale of those
items of Pledged Collateral which are securities under applicable securities laws.



	(d)
	Organization. Pledgor is duly organized, validly existing and in good standing under the laws of the State of Delaware. The Companies
are duly organized, validly existing and in good standing under the laws of the State of Nevada. The Pledged Securities are all of the issued and outstanding securities issued by the Companies. The
Pledged Securities have been duly authorized and validly issued by the Companies and are fully paid and non-assessable. Except for this Agreement, neither Pledgor nor a Company is bound by
any certificate of incorporation or organization, bylaw, agreement or instrument (including options, warrants, and convertible securities) which relates to the voting of; requires Pledgor or a Company
to 



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issue
or sell; or creates rights in any person (other than the record owner) with respect to; any securities issued by a Company. 



	(e)
	Security Interest. Pledgor is the sole record and beneficial owner of the Pledged Securities free and clear of all liens, encumbrances
and adverse claims and Pledgor has the unrestricted right to grant the security interest provided for herein to the Creditor. Pledgor has duly endorsed and delivered to Creditor all of the
certificates representing the Pledged Securities and has granted to Creditor a valid and perfected first priority security interest in the Pledged Securities, free of all liens, encumbrances, transfer
restrictions and adverse claims. The certificates, instruments and other writings delivered by Pledgor to Creditor pursuant to this Agreement are all of the certificates, instruments and other
writings representing the Pledged Collateral and all rights and interests with respect thereto. The security interest granted hereby to Creditor does now and shall at all times during the term of this
Agreement continue to constitute a first and prior lien on the Pledged Collateral, subject only to such matters as may be specifically agreed to in writing by Creditor. This representation shall be
deemed made with respect to each item of property that becomes Pledged Collateral after the date hereof.



	(f)
	Information. None of the information, documents, or financial statements which has been furnished by Pledgor or its representatives to
Creditor or any of its representatives in connection with the transactions contemplated by this Agreement or the Transaction Documents contains any untrue statement of material fact or omits to state
any material fact required to be stated hereby or thereby to make such statements not misleading.



	(g)
	Pledgor's
(i) chief executive office is located in the state of California, (ii) location (as that term is defined in Section 9.307 of the Uniform Commercial
Code) is the State of Delaware (the "Debtor State"), (iii) exact legal name is as set forth in the first paragraph of this Pledge Agreement,
(iv) Taxpayer Identification Number is                        , and (v) filing number with the Debtor State
is                        .



	(h)
	Address. Pledgor's principal place of business is correctly set forth under its signature at the end of this Agreement. 




        9.    Agreements.    So long as this Agreement is in effect, Pledgor shall: 



	(a)
	Maintain
the Pledged Collateral free from all pledges, liens, encumbrances and security interests or other claims in favor of others, other than the security interest in favor of
Creditor, and Pledgor will defend the Pledged Collateral against all claims and demands of all persons.



	(b)
	Comply
with the requirements of all applicable state, local and federal laws necessary to grant to Creditor a valid lien upon, and a duly perfected security interest in, the Pledged
Collateral in compliance with the requirements of this Agreement.



	(c)
	Pay
all reasonable costs and expenses of whatever kind and nature that Creditor may incur, including reasonable attorneys' fees, in protecting, maintaining, preserving, enforcing or
foreclosing the Pledged Collateral or the security interest granted to Creditor hereunder, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions or proceedings
arising out of or relating to any of the Secured Obligations.



	(d)
	Appear
in and defend any action or proceeding arising out of or connected with this Agreement, and pay all reasonable costs and expenses of Creditor (including, without limitation,
reasonable attorneys' fees) in any such action or proceeding in which Creditor appears or determines to become involved. 



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	(e)
	Not,
without the prior written consent of Creditor, sell, assign, encumber, pledge, hypothecate, transfer or otherwise dispose of the Pledged Collateral or any part thereof or any
interest therein.



	(f)
	Provide
Creditor, and Creditor's agents and attorneys, reasonable access to the books and records of Pledgor for inspection purposes and permit Creditor and Creditor's agents and
attorneys to make copies hereof.



	(g)
	Notify
the Creditor at least ninety (90) days before Pledgor changes its name or the address of its principal place of business.



	(h)
	At
Pledgor's expense, do such further acts and execute and deliver such additional financing statements, continuations, conveyances, certificates, instruments, legal opinions and
other assurances as Creditor may at any time request or require to protect, assure or enforce its interests, rights and remedies under this agreement. 




        10.    Events of Default.    The occurrence of any of the following shall constitute an "Event of Default" under this
Agreement: 



	(a)
	If
the Pledgor or a Company fails to pay or perform, as the case may be, any of the Secured Obligations when the same become due and payable or performable, as the case may be; or



	(b)
	If
an Event of Default occurs under any of the Transaction Documents or any other promissory note, security agreement, or other agreement between Creditor and Pledgor or a Company; or



	(c)
	If
any representation or warranty made by Pledgor in this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements
therein not misleading in light of the circumstances in which they were made; or



	(d)
	If
Pledgor:



	(i)
	makes
an assignment for the benefit of, or enters into any composition or arrangement with, creditors; or



	(ii)
	generally
does not pay its debts as such debts become due; or



	(iii)
	conceals,
removes, or permits to be concealed or removed, any part of its property, with intent to hinder, delay or defraud its creditors or any of them, or makes or suffers a
transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law, or makes any transfer of its property to or for the benefit of a creditor at a time
when other creditors similarly situated have not been paid; or






	(e)
	The
filing of a petition by or against Pledgor seeking relief under the Federal Bankruptcy Code, 11 U.S.C. Section 101, et seq.,
and any amendments thereto, or any similar law or regulation, whether federal, state or local, not dismissed within 30 days.



	(f)
	The
commencement of a proceeding by or against Pledgor under any statute or other law providing for an assignment for the benefit of creditors, the appointment of a receiver, or any
other similar law or regulation, whether federal, state or local, not dismissed within 30 days.



	(g)
	The
garnishment, attachment, levy or other similar action taken by or on behalf of any creditor of the Pledgor, or any of its properties which could have a Material Adverse Effect (as
that term is defined in the Master Lease) on the Pledgor. 




        11.    Remedies.    



	(a)
	Upon
and at any time after an Event of Default under this Agreement, Creditor shall, at its option and without further notice to Pledgor (except for such further notices, if any, that
may be required by law) be entitled to exercise any or all rights and remedies provided hereunder 



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or
by law, including without limitation the rights and remedies of a secured party under the Maryland Uniform Commercial Code. Any requirement under the Maryland Uniform Commercial Code or otherwise
of reasonable notice shall be met if Creditor sends Pledgor notice of sale and other notices required by law at least ten (10) days prior to the date of sale, disposition or other event giving
rise to the required notice. Any sale held pursuant to the exercise of Creditor's rights hereunder may be public or private, and at such sale Creditor shall have the right, at any time and from time
to time, to the extent permitted by law, to sell, assign and deliver all or any part of the Pledged Collateral, at Creditor's office or elsewhere, without demand of performance, advertisement of
notice of intention to sell or of the time or place of sale or adjournment thereof or any other notice (all of which are hereby waived by Pledgor to the extent permitted by law), except such notice as
is required by applicable law and cannot be waived, for cash, on credit or for other property, for immediate or future delivery, without any assumption or credit risk, and, provided that such is not
in violation of applicable law, for such terms as Creditor in its absolute and uncontrolled discretion may determine. In furtherance of Creditor's rights hereunder, Creditor shall have the right, for
and in the name, place and stead of Pledgor, to execute endorsements, assignments or other instruments of conveyance or transfer with respect to all or any of the Pledged Collateral. All amounts
collected by Creditor as the result of any action taken pursuant to this Section 11, and the liquidation value of any other property received as a result of such action, shall be applied by
Creditor as follows: 


	(i)
	First,
to the payment of all fees and costs including, without limitation, reasonable attorneys' fees, incurred in connection with the collection of the Secured Obligations or in
connection with the exercise or enforcement of Creditor's rights, powers or remedies under this Agreement.



	(ii)
	Second,
to the payment and satisfaction of all of the Secured Obligations.






	(b)
	Creditor
shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. Creditor may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. If, under the Maryland Uniform
Commercial Code, the Creditor may purchase any part of the Pledged Collateral, it may, in payment of any part of the purchase price thereof cancel any part of the Secured Obligations. If any of the
Pledged Collateral is sold on credit or for future delivery, it need not be retained by Creditor until the purchase price is paid and Creditor shall incur no liability if the purchaser fails to take
up or pay for such collateral. In case of any such failure, such collateral may be sold again.



	(c)
	Pledgor
shall execute and deliver to the purchasers of the Pledged Collateral all instruments and other documents necessary or proper to sell, convey, and transfer title to such
Pledged Collateral and, if approval of any sale of Pledged Collateral by any governmental body or officer is required, Pledgor shall prepare or cooperate fully in the preparation of and cause to be
filed with such governmental body or officer all necessary or proper applications, reports, and forms and do all other things necessary or proper to expeditiously obtain such approval.



	(d)
	The
remedies provided in this Agreement in favor of Creditor shall not be deemed exclusive, but shall be cumulative, and shall be in addition to all other remedies in favor of
Creditor existing at law or in equity. 




        12.    Appointment of Creditor as Agent.    Pledgor hereby appoints and constitutes Creditor, its successors and
assigns, as its agent and attorney-in-fact for the purpose of carrying out the provisions of this Agreement and taking any action or executing any instrument that Creditor
considers necessary or convenient for such purpose, including the power to endorse and deliver checks, notes and other 


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instruments
for the payment of money in the name of and on behalf of Pledgor, to endorse and deliver in the name of and on behalf of Pledgor securities certificates and execute and deliver in the name
of and on behalf of Pledgor instructions to the issuers of uncertificated securities, and to execute and file in the name of and on behalf of Pledgor financing statements (which may be photocopies of
this Agreement) and continuations and amendments to financing statements in the State of Delaware or elsewhere and Forms 144 with the United States Securities and Exchange Commission. This
appointment is coupled with an interest and is irrevocable and will not be affected by the dissolution or bankruptcy of Pledgor nor by the lapse of time. If Pledgor fails to perform any act required
by this Agreement, Creditor may perform such act in the name of and on behalf of Pledgor and at its expense which shall be chargeable to Pledgor under this Agreement. Pledgor hereby consents and
agrees that the issuers of or obligors of the Pledged Collateral or any registrar or transfer agent or trustee for any of the Pledged Collateral shall be entitled to accept the provisions hereof as
conclusive evidence of the rights of Creditor to effect any transfer pursuant to this Agreement and the authority granted to Creditor herein, notwithstanding any other notice or direction to the
contrary heretofore or hereafter given by Pledgor, or any other person, to any of such issuers, obligors, registrars, transfer agents, or trustees. 


        13.    Impact of Regulations.    Pledgor acknowledges that compliance with the Securities Act of 1933 and the rules
and regulations thereunder and any relevant state securities laws and other applicable laws may impose limitations on the right of Creditor to sell or otherwise dispose of securities included in the
Pledged Collateral. For this reason, Pledgor hereby authorizes Creditor to sell any securities included in the Pledged Collateral in such manner and to such persons as would, in the judgment of
Creditor, help to ensure that the transfer of such securities will be given prompt and effective approval by any relevant regulatory authorities and will not require any of the securities to be
registered or qualified
under any applicable securities laws. Pledgor understands that a sale under the foregoing circumstances may yield a substantially lower price for such Pledged Collateral than would otherwise be
obtainable if the same were registered and sold in the open market, and Pledgor shall not attempt to hold Creditor responsible for selling any of the Pledged Collateral at an inadequate price even if
Creditor accepts the first offer received or if only one possible purchaser appears or bids at any such sale. If Creditor shall sell any securities included in the Pledged Collateral at such sale,
Creditor shall have the right to rely upon the advice and opinion of any qualified appraiser or investment banker as to the commercially reasonable price obtainable on the sale thereof but shall not
be obligated to obtain such advice or opinion. Pledgor hereby assigns to Creditor any registration rights or similar rights Pledgor may have from time to time with respect to any of the Pledged
Collateral. 


        14.    Expenses.    Pledgor will forthwith upon demand pay to Creditor: 




	(i)
	the
amount of any taxes which Creditor may have been required to pay by reason of holding the Pledged Collateral or to free any of the Pledged Collateral from any lien encumbrance or
adverse claim thereon, and



	(ii)
	the
amount of any and all reasonable out-of-pocket expenses, including the fees and disbursements of counsel and of any brokers, investment brokers,
appraisers or other experts, that Creditor may incur in connection with (A) the administration or enforcement of this Agreement, including such expenses as are incurred to preserve the value of
the Pledged Collateral and the validity, perfection, rank and value of Creditor's security interest therein, (B) the collection, sale or other disposition of any of the Pledged Collateral,
(C) the exercise by Creditor of any of the rights conferred upon it hereunder, or (D) any action or proceeding to enforce its rights under this Agreement or in pursuit of any
non-judicial remedy hereunder including the sale of the Pledged Collateral. 






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Any such amount not paid on demand shall bear interest (computed on the basis of the number of days elapsed over a year of three hundred sixty-five (365) days) at a rate per annum
equal to the Overdue Rate (as that term is defined in the Master Lease). 


        15.    Indemnity.    The Pledgor shall indemnify the Creditor and its directors, officers, employees, agents and
attorneys against, and hold them harmless from, any liability, cost or expense, including the fees and disbursements of their legal counsel, incurred by any of them under the corporate or securities
laws applicable to holding or selling any of the Pledged Collateral, except for liability, cost or expense arising out of the recklessness or willful misconduct of the indemnified parties. 


        16.    Performance by Creditor.    If Pledgor fails to duly and punctually perform, observe or comply with any
condition, term or covenant contained in this Agreement, Creditor, without notice to or demand upon Pledgor and without waiving or releasing any of the Secured Obligations, may at any time thereafter
perform such condition, term or covenant for the account and at the expense of Pledgor. All sums paid or advanced in connection with the foregoing and all costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred in connection therewith shall be paid by Pledgor to Creditor on demand, and shall constitute and become a part of the Secured Obligations and Pledgor
agrees to reimburse Creditor for any payment made or any expense incurred (including reasonable attorneys' fees to the extent permitted by law) by Creditor pursuant to this Agreement. 


        17.    Registration Rights.    In the event a Company proposes to register any securities under the Securities Act of
1933, Pledgor will give the Creditor notice of that fact. In addition, and at no cost to Creditor, Pledgor will cause such Company to register the Pledged Securities so that they may be disposed of by
public sale or other public disposition. Upon the completion of the registration, Pledgor will deliver certificates without any restrictive legend in exchange for the unregistered Pledged Securities.
Pledgor shall indemnify and hold Creditor harmless against any loss, claim, damage, or liability arising out of the registration process, and will reimburse Creditor for any legal or other expenses
incurred by Creditor as a result. 


        18.    Waivers.    Pledgor hereby waives presentment, demand, protest, notice of any default under the Transaction
Documents. Neither the failure of nor any delay by any party to this Agreement to enforce any right hereunder or to demand compliance with its terms is a waiver of any right hereunder. No action taken
pursuant to this Agreement on one or more occasions is a waiver of any right hereunder or constitutes a course of dealing that modifies this Agreement. No waiver of any right or remedy under this
Agreement shall be binding on any party unless it is in writing and is signed by the party to be charged. No such waiver of any right or remedy under any term of this Agreement shall in any event be
deemed to apply to any subsequent default under the same or any other term contained herein. 


        19.    Entire Agreement.    This Agreement, the schedules and exhibits hereto and thes agreements and instruments
required to be executed and delivered hereunder set forth the entire agreement of the parties with respect to the subject matter hereof and supersede and discharge all prior agreements (written or
oral) and negotiations and all contemporaneous oral agreements concerning such subject matter and negotiations. There are no oral conditions precedent to the effectiveness of this Agreement. 


        20.    Amendments.    No amendment, modification or termination of this Agreement shall be binding on any party hereto
unless it is in writing and is signed by the party to be charged. 



        21.    Severability.    If any term or provision set forth in this Agreement shall be invalid or unenforceable, the
remainder of this Agreement, or the application of such terms or provisions to persons or circumstances, other than those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted. 


        22.    Successors.    The terms of this Agreement shall be binding upon the Pledgor, its heirs and personal
representatives, and shall inure to the benefit of Creditor, its corporate successors and any 


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holder,
owner or assignee of any rights in any of the Transaction Documents and will be enforceable by them as their interest may appear. 


        23.    Third Parties.    Nothing herein expressed or implied is intended or shall be construed to give any person
other than the parties hereto any rights or remedies under this Agreement. 



        24.    Saturdays, Sundays and Holidays.    Where this Agreement authorizes or requires a payment or performance on a
Saturday, Sunday or public holiday, such payment or performance shall be deemed to be timely if made on the next succeeding business day. 


        25.    Joint Preparation.    This Agreement shall be deemed to have been prepared jointly by the parties hereto. Any
ambiguity herein shall not be interpreted against any party hereto and shall be interpreted as if each of the parties hereto had prepared this Agreement. 



        26.    Rules of Construction.    In this Agreement, words in the singular number include the plural, and in the plural
include the singular; words of the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter gender may refer to any gender and the word "or" is
disjunctive but not exclusive. The captions and section numbers appearing in this Agreement are inserted only as a matter of convenience. They do not define, limit or describe the scope or intent of
the provisions of this Agreement. 


        27.    Notices.    All notices, demands or requests required or permitted to be given to either party hereto shall be
in writing and shall be deemed given if delivered personally, sent by reputable overnight courier, with acknowledgment of receipt requested, or mailed by registered, overnight or certified mail, with
full postage paid thereon, return receipt requested (such notice to be effective on the date such receipt is acknowledged), as follows: 



	Pledgor:	 	Before 1/01/04:
	

 	
 	

Attn: General Counsel
	

 	
 	

32232 Paseo Adelanto, Suite 100

San Juan Capistrano, CA 92675

Telephone No.: (949) 487-9500

Facsimile No.: (949) 487-9300
	

 	
 	

After 1/01/04:
	

 	
 	

Attn: General Counsel

27101 Puerta Real, Suite 450

Mission Viejo, CA 92691

Telephone No.: (949) 487-9500

Facsimile No.: (949) 487-9300
	

Creditor:	
 	

Omega Healthcare Investors, Inc.

9690 Deereco Road, Suite 100

Timonium, MD 21093

Attn: Daniel J. Booth

Telephone No.: (410) 427-1700

Facsimile No.: (410) 427-8800
	

With copy to:	
 	

Myers Nelson Dillon & Shierk, PLLC

125 Ottawa Ave., N.W., Suite 270

Grand Rapids, Michigan 49503

Attn: Mark E. Derwent

Telephone No.: (616) 233-9640

Facsimile No.: (616) 233-9642




9







 

or
to such place and with such other copies as Pledgor or Creditor may designate for itself by written notice to the other. 


        28.    Counterparts.    This Agreement may be executed in any number of counterparts, all of which shall constitute
one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts. 



        29.    Choice of Law; Jurisdiction, Venue, Service of Process.    The parties hereto agree that certain material
events, occurrences and transactions relating to this Agreement bear a reasonable relationship to the State of Maryland. The validity, terms, performance and enforcement of this Agreement shall be
governed by those laws of the State of Maryland which are applicable to agreements which are negotiated, executed, delivered and performed solely in the State of Maryland. The State and Federal
District Courts located in the State of Maryland and California shall have exclusive jurisdiction and venue of any action or proceeding arising out of or related to the negotiation, execution,
delivery, performance, breach or enforcement of this Agreement or any other agreement, document or instrument negotiated, executed, delivered, entered into or performed in connection with this
Agreement or any of the transactions contemplated hereby or thereby; any waiver, modification, amendment or termination hereof or thereof or any action taken or omission made by the Pledgor or the
Creditor or any of their respective directors, officers, employees, agents or attorneys in connection with the payment, performance, exercise or enforcement of any right, duty or obligation created or
implied hereby or thereby or arising hereunder or thereunder; regardless of whether any claim, counterclaim or defense in any such action, suit or proceeding is characterized as arising out of fraud,
negligence, recklessness, intentional misconduct, a breach of contract or fiduciary duty, or violation of a statute, law, ordinance, rule or regulation. The parties hereto hereby irrevocably consent
to the personal jurisdiction of such courts, to such venue and to the service of process in the manner provided for the giving of notices in this Agreement. The parties hereto hereby waive all
objections to such jurisdiction and venue including those which might be based upon inconvenience or the nature of the forum. 


        30.    Waiver of Jury Trial.    The Pledgor hereby voluntarily, knowingly, irrevocably and unconditionally waives and
relinquishes its Right to Trial by Jury under the Constitution of the United States of America or of the State of Maryland or any other constitution, statute or law in any civil legal action, suit or
proceeding arising out of or related to the negotiation, execution, delivery, performance, breach or enforcement of this Agreement or any other agreement, document or instrument negotiated, executed,
delivered, entered into or performed in connection with this Agreement or any of the transactions contemplated hereby or thereby; any waiver, modification, amendment or termination hereof or thereof
or any action taken or omission made by the Pledgor or the Creditor or any of their respective directors, officers, employees, agents or attorneys in connection with the payment, performance, exercise
or enforcement of any right, duty or obligation created or implied hereby or thereby or arising hereunder or thereunder; regardless of whether any claim, counterclaim or defense in any such action,
suit or proceeding is characterized as arising out of fraud, negligence, recklessness, intentional misconduct, a breach of contract or fiduciary duty, or violation of a statute, law, ordinance, rule
or regulation. 


        31.    Termination in Limited Circumstances.    If, in connection with the initial public offering of common stock by
Pledgor, the managing underwriter of such offering reasonably determines that this Agreement has a significant and material impact on the marketability of the common stock of Pledgor and provides a
written statement of such determination to Creditor, together with such supporting evidence as it used in making such determination, then, upon the request of Pledgor, concurrent with the consummation
of such public offering, Creditor would terminate this Agreement and release its lien on the Pledged Securities. 


Signature and Acknowledgements follow.  


10










        IN WITNESS WHEREOF, the parties have executed this Pledge Agreement as of the date first above stated. 



	 	 	 	 	PLEDGOR:
	

 	
 	

 	
 	

THE ENSIGN GROUP, INC.
	 	 	 	 	By:	 	/s/ Christopher R. Christensen

	 	 	 	 	Name:	 	Christopher R. Christensen
	 	 	 	 	Title:	 	President
	STATE OF CALIFORNIA	 	)	 	 	 	 
	COUNTY OF ORANGE	 	)SS	 	 	 	 
	 	 	}	 	 	 	 





        The
foregoing instrument was acknowledged before me this 30 day of September, 2003, by Christopher R. Christensen, who is the President of The Ensign Group, Inc., a
Delaware corporation, on behalf of the corporation. 



	 	 	 	 	/s/ Marcus Paxman
	 	 	 	 	

	 	 	 	 	Marcus Paxman, Notary Public
	 	 	 	 	CA                        County, Orange
	 	 	 	 	My Commission Expires: 7/23/04
	

 	
 	

 	
 	

CREDITOR:
	

 	
 	

 	
 	

OHI ASSET (CA), LLC
	

 	
 	

 	
 	

By:	
 	

/s/ Taylor Pickett

	 	 	 	 	Name:	 	Taylor Pickett
	 	 	 	 	Its:	 	Chief Executive Officer
	STATE OF MARYLAND	 	)	 	 	 	 
	 	 	)SS	 	 	 	 
	COUNTY OF ORANGE	 	}	 	 	 	 





        The
foregoing instrument was acknowledged before me this 30th day of September, 2003, by Christopher R. Christensen, who is the President of The Ensign Group, Inc., a
Delaware corporation, on behalf of the corporation. 



	 	 	 	 	/s/ Judith A. Jacobs
	 	 	 	 	

	 	 	 	 	Judith A. Jacobs, Notary Public

Baltimore County, Maryland

My Commission Expires: May 15, 2004










EXHIBIT A

ASSIGNMENT IN BLANK  


        For value received, THE ENSIGN GROUP, INC., a Delaware corporation ("Assignor"), sells, assigns and
transfers to                        ("Assignee"), a 100% Membership Interest
(collectively, the "Interests") in
the following entities: 



	(1)
	Permunitum
LLC, a Nevada limited liability company ("Lessee");



	(2)
	Vista
Woods Health Associates LLC, a Nevada limited liability company;



	(3)
	City
Heights Health Associates LLC, a Nevada limited liability company; and



	(4)
	Claremont
Foothills Health Associates LLC, a Nevada limited liability company 




such
Interests being uncertificated, and further irrevocably appoints OHI Asset (CA), LLC, a Delaware corporation, as attorney in fact to transfer the Interests on the books of the Company, with full
power of substitution and resubstitution (which power shall survive the dissolution of Assignor). 



	 	 	THE ENSIGN GROUP, INC.
	

Dated: September            , 2003	
 	

By:	
 	

 
	 	 	 	 	

	 	 	Name:	 	Christopher R. Christensen
	 	 	Title:	 	President





Exhibit A 








SCHEDULE 1 FORM OF SCHEDULE TO FINANCING STATEMENT  



	Debtor:	 	The Ensign Group, Inc., a Delaware corporation
	

Secured Party:	
 	

OHI Asset (CA), LLC




Description of Collateral  


        The personal property of Debtor described below, which it now owns or shall hereafter acquire or create, immediately upon the acquisition or creation thereof and
wherever located, consisting of the following: 



	(a)
	all
Debtor's right, title and interest in the following entities (each a "Company"):



	(1)
	Permunitum
LLC, a Nevada limited liability company;



	(2)
	Vista
Woods Health Associates LLC, a Nevada limited liability company;



	(3)
	City
Heights Health Associates LLC, a Nevada limited liability company; and



	(4)
	Claremont
Foothills Health Associates LLC, a Nevada limited liability company;






	(b)
	any
equity securities issued by a Company and any options, warrants or rights to acquire such securities, owned or acquired by Debtor, directly or indirectly, now or at any time in
the future;



	(c)
	any
securities or other property issued or distributed to Debtor with respect to any securities described in clauses (a) or (b) above as a dividend or distribution or as
a result of any amendment. of the certificate of incorporation or other charter documents, merger, consolidation, redesignation, reclassification, purchase or sale of assets, dissolution, or plan of
arrangement, compromise or reorganization of the issuer thereof;



	(d)
	any
rights incidental to the ownership of any of the securities described in clauses (a), (b) or (c) above such as voting, conversion and registration rights and rights of
recovery for violations of applicable securities laws; and



	(e)
	the
proceeds of the exercise, redemption, sale or exchange of any of the foregoing or any dividend, interest payment or other distribution of cash or property in respect thereof. 
Schedule
I          















ASSIGNMENT IN BLANK  


        For value received, THE ENSIGN GROUP, INC., a Delaware corporation ("Assignor"), sells, assigns and
transfers to                        ("Assignee"), a 100% Membership Interest
(collectively, the "Interests") in
the following entities: 



	(1)
	Permunitum
LLC, a Nevada limited liability company ("Lessee");



	(2)
	Vista
Woods Health Associates LLC, a Nevada limited liability company;



	(3)
	City
Heights Health Associates LLC, a Nevada limited liability company; and



	(4)
	Claremont
Foothills Health Associates LLC, a Nevada limited liability company 




such
Interests being uncertificated, and further irrevocably appoints OHI Asset (CA), LLC, a Delaware corporation, as attorney in fact to transfer the Interests on the books of the Company, with full
power of substitution and resubstitution (which power shall survive the dissolution of Assignor). 



	 	 	THE ENSIGN GROUP, INC.
	

Dated: September            , 2003	
 	

By:	
 	

/s/ Christopher R. Christensen

	 	 	Name:	 	Christopher R. Christensen
	 	 	Title:	 	President





Schedule I