Document:

Exhibit 10.28  

DEED
OF TRUST NOTE 

	$7,455,100.00	 	Norwalk, California

January 30, 2001

        FOR
VALUE RECEIVED, the undersigned promise(s) to pay to Continental Wingate Associates, Inc., a Massachusetts corporation or order, the principal sum of Seven Million Four
Hundred Fifty-Five Thousand One Hundred and no/100 Dollars ($7,455,100.00), with interest from date until paid at the rate of seven and one-half per annum (7.50%) per annum.
The principal and interest of this note are to be paid in monthly installments as follows: 

        Interest
only payable on the first day of February, 2001. Commencing on the first day of March, 2001, monthly installments of interest and principal shall be paid in the sum of
Fifty-Four Thousand Three Hundred Seventy-Eight and 05/100 Dollars ($54,378.05) each, such payments to continue monthly thereafter on the first day of each succeeding month until the
entire indebtedness has been paid in full. In any event, the balance of the principal (if any) remaining unpaid, plus accrued interest, shall be due and payable on February 1, 2027. The
installments of interest and principal shall be applied first to interest at the rate of seven and one-half percent (7.50%) per annum upon the principal sum or so much thereof as shall
from time to time remain unpaid and the balance thereof shall be applied on account of principal. 

        See
Rider to Deed of Trust Note attached hereto and incorporated by reference herein. 

        Both
principal and interest under this note, as well as the additional payments set forth in the Deed of Trust, shall be payable at the office of Continental Wingate
Associates, Inc., 63 Kendrick Street, in Needham, Massachusetts 02494 or such other place as the holder may designate in writing. 

        If
this debt is paid in full prior to maturity and while Insured under the National Housing Act, all parties liable for payment thereof hereby agree to be jointly and severally bound to
pay to the holder hereof any adjusted premium charge required by the applicable Regulations promulgated under the National Housing Act, as amended. 

        If
default be made in the payment of any installment under this note, and if the default is not made good prior to the due date of the next such installment, the entire principal sum and
accrued interest shall at once become due and payable without notice at the option of the holder of this note. Failure to exercise this option shall not constitute a waiver of the right to exercise
the same in the event of any [illegible] default. 

        Principal
and interest are payable to lawful money of the United States. If action be instituted on this note, the undersigned promise(s) to pay in addition to the costs and
disbursements allowed by law such sum as the Court may adjudge reasonable as attorney's fees in said action. This note is secured by a Deed of Trust, of even date herewith, to Brian Callahan as
Trustee, on real estate situated in the City of Norwalk, County of Los Angeles, California. 

        Should
this note be signed by more than one person and/or firm and/or corporation, all of the obligations herein contained shall be considered joint and several obligations of each
signer hereof. 

	Signed this 30th day of January, 2001	 	 
	

ENSIGN SOUTHLAND, L.L.C.,

a Nevada limited liability company	
 	

 
	

 	
 	

 	
 	

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

By:	
 	

/s/  CHRISTOPHER R. CHRISTENSON      
	
 	

 
	Christopher R. Christenson, President	 	 

        I
HEREBY CERTIFY that this is the note described in and secured by the Deed of Trust of even date herewith, and in the same principal amount as herein stated, to Brian Callahan,
Trustee(s), on real estate in the City of Norwalk, County of Los Angeles, State of California. 

	Dated this 30th day of January, 2001.	 	 
	

/s/  MARCUS PAXMAN      
	
 	

 
	Notary Public in and for County and State	 	 
	

My commission expires	
 	

 
	

 STATE OF CALIFORNIA	
 	

 
	

Loan No. 122-22030	
 	

 
	

DEED OF TRUST NOTE	
 	

 
	

No. 122-22030	
 	

 
	

Insured under §232 of the National Housing Act and Regulations published thereunder
	

In effect on December 21, 2000	
 	

 

        A
total sum of $7,455,100.00 has been approved for insurance hereunder by the Secretary of Housing and Urban Development acting by and through the Federal Housing Commissioner 

	By	 	/s/  JEROME [ILLEGIBLE]      
	 	 
	(Authorized Agent)	 	 
	

Date 01-30-2002	
 	

 

        Reference
is made to the Act and to the Regulations thereunder covering assignments of the insurance protection on this note.

*pursuant to §232(f) 

RIDER TO DEED OF TRUST NOTE  

        This Rider to Deed of Trust Note (this "Rider") is attached to and made a part of the Deed of Trust Note (the "Note") from ENSIGN SOUTHLAND LLC, a Nevada limited
liability company (the 

"Maker"),
to CONTINENTAL WINGATE ASSOCIATES, INC., a Massachusetts corporation, dated January 30, 2001 

        l.    Prepayment.    (a) Maker shall not have the right to prepay the indebtedness evidenced hereby in whole or
in part at any time prior to March 1, 2006. Maker shall have the right, on or after March 1, 2006, to prepay the indebtedness evidenced hereby in whole or in part on the last day of any
calendar month after such date during the term hereof upon at least thirty (30) days prior written notice to the holder of this Note, which notice shall specify the date on which the prepayment
is to be made, the principal amount of such prepayment and the total amount to be paid. Such total amount shall include interest
accrued through and including the last day of the month in which the prepayment is made. In the event of any prepayment of principal at any time on or after March 1, 2006, the Maker shall
concurrently pay to the holder of this Note (i) interest on the amount prepaid through and including the last day of the month in which the prepayment is made and (ii) a prepayment
premium equal to the following designated percentages of the amount of the principal of this Note to be so prepaid with respect to any prepayment which occurs during the following indicated time
periods: 

	Time of Prepayment
 
	 	Prepayment Premium
	 
	from March 1, 2006 through February 28, 2007	 	5.0	%
	from March 1, 2007 through February 29, 2008	 	4.0	%
	from March 1, 2008 through February 28, 2009	 	3.0	%
	from March 1, 2009 through February 28, 2010	 	2.0	%
	from March 1, 2010 through February 28, 2011	 	1.0	%
	from March 1, 2011 and thereafter	 	0.0	%

        Notwithstanding
any partial prepayment of principal made pursuant to the privilege of prepayment set forth in this Note, the Maker shall not be relieved of its obligations to make
scheduled monthly installments of principal and interest as and when such payments are due and payable under this Note. 

        (b)   Notwithstanding
any prepayment prohibition imposed and/or premium required by this Note with respect to prepayments made prior to March 1, 2010, the indebtedness
evidenced by this Note may be prepaid in whole or in part without the consent of the holder of this Note and without prepayment premium if the Federal Housing Commissioner (the "Commissioner")
determines that prepayment will avoid a mortgage insurance claim and is therefore in the best interests of the Federal Government. The holder of this Note understands that the Commissioner will
exercise its right to override the prepayment prohibition and/or prepayment premium contained herein only upon satisfaction of all of the following terms and conditions: 

        (i)    Maker
has defaulted under this Note and the Commissioner has received notice of such default, as required by 24 C.F.R. §207.256; 

        (ii)   The
Commissioner determines that the project financed with the proceeds of this Note has been experiencing a net income deficiency, which has not been caused solely by
management inadequacy or lack of interest by Maker, and which is of such magnitude that Maker is currently unable to make required debt service payments, pay all project operating expenses and fund
all required HUD reserves; 

        (iii)  The
Commissioner finds there is reasonable likelihood that Maker can arrange to refinance the loan evidenced by this Note at a lower interest rate or otherwise reduce
the debt service payments through partial prepayment; and 

        (iv)  The
Commissioner determines that refinancing the loan evidenced by this Note at a lower rate or partial prepayment is necessary to restore the said project to a
financially viable condition and to avoid an insurance claim. 

        (c)   Notwithstanding
the provisions of Paragraph l(a) above, the provisions of Paragraph 1(a) shall not apply, and no prepayment premium shall be collected by
the holder of this Note, with respect to any prepayment which is made by or on behalf of the Maker from insurance proceeds 

as
a result of damage to the mortgaged premises or condemnation awards which, at the option of the holder this Note, may be applied to reduce the indebtedness of Maker evidenced hereby pursuant to the
terms and provisions of the Deed of Trust (the "Deed of Trust") of even date given by Maker to the holder of this Note to secure said indebtedness. Any prepayment made pursuant to this
Paragraph 1(c) shall be deemed to have been made on the last day of the month in which such payment is received by holder and shall include interest on the amount prepaid through and including
the last day of the month in which the prepayment is made. 

        (d)   Notwithstanding
the provisions of Paragraph 1(a) above, the provisions of Paragraph 1(a) shall not apply, and no prepayment premium shall be collected by
the holder of this Note, in the event that the maximum principal amount of this Note is reduced (or a partial prepayment is made) solely as the result of a mortgage reduction (or a partial prepayment)
required by the Commissioner based upon any cost certification or other report required to be provided by the Maker to the Commissioner subsequent to the date hereof. Any prepayment made pursuant to
this Paragraph 1(d) shall be deemed to have been made on the last day of the month in which such payment is received by holder and shall include interest on the amount prepaid through and
including the last day of the month in which the prepayment is made. 

        (e)   Pursuant
to Section 223(f)(3) of the National Housing Act, as amended, even if a prepayment would otherwise be permitted under this Note, the debt evidenced by
this Note may not be prepaid either in whole or in part for a period of five years from the date of endorsement of this Note by the Commissioner except in cases where the prior written approval of the
Commissioner is obtained and such written approval is expressly based upon the existence of one of the following conditions: 

        (f)    The
Maker has entered into an agreement with the Commissioner to maintain the property as rental housing for the remainder of the specified five-year period; 

        (ii)   The
Commissioner has determined that conversion of the property to cooperative or condominium ownership is sponsored by a bona fide tenants' organization representing a
majority of the households in the project, 

        (iii)  The
Commissioner has determined that continuation of the property as rental housing is unnecessary to assure adequate rental housing opportunities for low and
moderate-income people in the community; or 

        (iv)  The
Commissioner has determined that continuation of the property as rental housing would have an undesirable and deleterious effect on the surrounding neighborhood. 

        The
five-year prepayment prohibition required by Section 223(f)(3) of the National Housing Act, as amended, is in addition to any prepayment prohibitions otherwise
provided for in this Note. 

        2.    Late Charges.    In the event any installment or part of any installment due under this Note becomes delinquent
for more than fifteen (15) days, there shall be due, at the option of the holder of this Note, in addition to other sums due hereunder, a late charge in an amount equal to two percent (2%) of
the amount of principal and/or interest so delinquent. Whenever, under the law of the jurisdiction where the property is located, the amount of any such late charge is considered to be additional
interest, this provision shall not be effective if the rate of interest specified in this Note, together with the amount of the late charge, would aggregate an amount in excess of the maximum rate of
interest permitted and would constitute usury. 

        3.    Method of Payment.    All payments to reduce the principal balance hereunder, other than regularly scheduled
payments of principal, and all late charges and other amounts required to be paid hereunder, other than regularly scheduled installments of interest, shall be made to the holder of this Note in
immediately available Federal Funds. Payments received after 12:00 noon Eastern time will be deemed to have been received on the next following business day. 

        4.    Non-Recourse.    Notwithstanding any other provision contained in this Note or the Deed of Trust to
the contrary, it is agreed that the execution of this Note shall impose no personal liability on 

the
Maker hereof for payment of the indebtedness evidenced hereby and in the event of a default, the holder of this Note shall look solely to the property described in the Deed of Trust and/or any
security agreement and to the rents, issues and profits thereof in satisfaction of the indebtedness evidenced hereby and will not seek or obtain any deficiency or personal judgment against the Maker
hereof except such judgment or decree as may be necessary to foreclose and bar its interest in the property described in the Deed of Trust and all other property mortgaged, pledged, conveyed or
assigned to secure payment of this Note except as set out in the Deed of Trust. 

        IN
WITNESS WHEREOF, the undersigned Maker has executed this Rider as of the date first above written. 

	MAKER:	 	 
	

ENSIGN SOUTHLAND LLC, a Nevada limited liability company
	

 	
 	

 	
 	

 
	By:	 	The Ensign Group, Inc., a Delaware corporation, its sole member
	

 	
 	

 	
 	

 
	By:	 	/s/  CHRISTOPHER R. CHRISTENSEN      
	 	 
	Christopher R. Christensen

PresidentExhibit 10.29  

SOUTHLAND
CARE CENTER FHA

Project No. 122-22030 

SECURITY AGREEMENT  

        THIS SECURITY AGREEMENT (the "Agreement") is made, entered into and dated as of the 30th day of January, 2001, by and between ENSIGN SOUTHLAND LLC, a limited
liability company organized and existing under the laws of the State of Nevada, having an office and place of business at 32232 Paseo Adelanto, Suite 100, San Juan Capistrano, California 92675 (the
"Debtor"), and CONTINENTAL WINGATE ASSOCIATES, INC., a corporation organized and existing under the laws of the Commonwealth of Massachusetts and having an office and place of business at 63
Kendrick Street, Needham, Massachusetts 02494 (the "Secured Party"), as follows: 

Recitals  

        A.    Contemporaneously
with this Agreement, the Secured Party has made a loan to the Debtor in the maximum principal amount of $7,455,100.00 (the "Loan"). The Loan is
(i) evidenced by the Deed of Trust Note made by the Debtor in favor of the Secured Party, dated as of even date herewith (the "Note") and (ii) secured by a nursing home and assisted
living facility project known as Southland Care Center, FHA Project No. 122-22030 (the "Project") which is the subject of the Regulatory Agreement between the Debtor and the
Secretary of Housing and Urban Development ("HUD"), dated as of even date herewith (the "Regulatory Agreement"). 

        B.    As
security, in part, for the Obligations (as defined below), the Debtor (i) granted to the Secured Party the Deed of Trust, dated as of even date herewith,
encumbering the Project and certain real property located at 11701 South Studebaker Road, Norwalk, California 90650 as more particularly described in Exhibit A attached hereto and incorporated
herein by reference (the "Premises") which has been or is concurrently herewith being recorded in the Real Estate Records of Los Angeles County, California (the "Mortgage") and (ii) is entering
into this Agreement with the Secured Party. The Note, the Mortgage, this Agreement and all other agreements, instruments, and documents which are now existing or are in the future signed or delivered
by, or on behalf of, the Debtor to the Secured Party in connection with, or related to, the Loan or the other Obligations are sometimes collectively referred to as the "Loan Documents." 

Statement of Agreement  

        1.     SECURITY
INTEREST; SETOFF. 

        (a)   To
secure the full, prompt and complete payment and performance of all Obligations, the Debtor hereby grants to, and creates in favor of, the Secured Party a continuing
security interest in all of the property described on Exhibit B attached hereto and incorporated herein by reference (the "Collateral"). "Obligations" means, as of any date, the Loan and all
other indebtedness, liabilities, obligations, covenants, debts and amounts owing from the Debtor to the Secured Party arising out of, in connection with, described in, or evidenced by the Loan
Documents, whether direct or indirect, absolute or contingent, related or unrelated, now or in the future existing and whether consisting of principal, interest, fees, indemnities, expenses (including
attorneys' fees), charges or other sums, all as now exists or may, after the date of this Agreement, be incurred, renewed, extended, consolidated, adjusted or amended. 

        (b)   In
addition to (and without limitation of) any right of setoff, lien or counterclaim the Secured Party may otherwise have, the Secured Party may, at its option, setoff
and retain any and all funds, monies, securities and other property held in escrow or for the account of the Debtor pursuant to the Loan Documents, against any amount payable by the Debtor under the
Note, the Mortgage or any of the other Loan Documents which is not paid when due (whether or not any of the funds, monies, securities, or other property are then distributable to, or on behalf of, the
Debtor). 

 

        2.     REPRESENTATIONS;
GENERAL COVENANTS. 

        (a)   To
induce the Secured Party to make the Loan, the Debtor promises to the Secured Party that the following statements are, and will continue throughout the term of this
Agreement to be, true: (i) the security interest granted to the Secured Party in the Collateral constitutes a valid, first priority security interest; (ii) the Debtor has good title to,
and is the sole and lawful owner of, the Collateral; (iii) the Debtor has full power and authority to enter into and perform its obligations under this Agreement; (iv) the Collateral is
free and clear of any lien, security interest, claim, interest, pledge, assignment or other encumbrance (a "Lien") except the security interest in favor of the Secured Party; (v) the Debtor has
not been known as or used any name other than "Ensign Southland LLC"; and (vi) the Debtor's places of business and other locations where the Debtor keeps any tangible Collateral from time to
time are listed on Exhibit C (the "Collateral Locations"). 

        (b)   The
Debtor will not grant, create or permit to exist any Lien on any of the Collateral except the Liens in favor of the Secured Party. The Debtor, at the Secured Party's
request, will defend the Collateral against the claims and demands of any individual, unincorporated association, partnership, joint venture, trust, business trust, corporation, institution, entity or
any governmental authority ("Persons") at any time claiming any interest in the Collateral. 

        (c)   The
Collateral will only be used by the Debtor in the operation of the Project. Until an Event of Default (as defined in Section 8 below) occurs, the Debtor may
have possession of the Collateral and use it in any lawful manner not inconsistent with the Loan Documents and any policy of insurance thereon. The Debtor will not sell, assign, lease, or otherwise
dispose of any of the Collateral without the prior written consent of the Secured Party; however, the Debtor will have the right, without the Secured Party's consent, to transfer, sell or dispose of
any Collateral which is (i) tangible personal property and (ii) obsolete or worn out ("Consumed Property") if the Debtor, concurrently with such transfer, sale or disposition, replaces
the Consumed Property with replacement personal property which is free and clear of any Liens and has the same value and utility as the Consumed Property originally had (any such replacement personal
property will automatically become a part of the Collateral under this Agreement). The Secured Party's interests in the proceeds of the Collateral (or notification of its interests in the proceeds of
the Collateral in financing statements or otherwise) will not be construed as modifying this Agreement or as the Secured Party's consent to the disposition of any Collateral other than as provided in
this Agreement. 

        (d)   All
tangible Collateral is to be located at the Project, and no tangible Collateral (or any books or records pertaining to any Collateral) may be removed therefrom
without the prior consent of the Secured Party unless the Collateral is (i) Consumed Property under the terms of Section 2(c) above or (ii) being removed in accordance with the
terms of Section 2(e) below. Immediately on demand therefor by the Secured Party, the Debtor will deliver to the Secured Party any and all evidences of ownership of the Collateral (including
certificates of title and applications for title). The Debtor will give the Secured Party not less than 30 days prior written notice of any change of (A) Borrower's corporate,
partnership, doing business, trade or legal name or (B) any Collateral Location. 

        (e)   The
Debtor will, at its own cost and expense, maintain all of the tangible Collateral in good working condition and make all necessary renewals, repairs, replacements,
additions, betterments and improvements thereto, and, in this connection, the Debtor may temporarily remove the same, or any part thereof, from the Project if such removal is necessary or advisable in
connection with the Debtor's fulfilling of its obligations under this Section 2(e), and if, in the reasonable opinion of the Secured Party, the priority of its security interest therein will
not be materially jeopardized. 

        (f)    The
Debtor will, upon request of Secured Party, deliver to Secured Party copies of all reports, financial statements and other information which the Debtor is obligated
to provide to HUD in connection with the Project and/or Collateral not later than the later of (i) delivery of such reports, 

2

 

financial
statements and other information to HUD or (ii) ten (10) days after Secured Party makes such request. 

        3.    COMPLIANCE WITH LAWS.    The Debtor will comply with the requirements of all valid and applicable federal, state
and local laws. 

        4.    TAXES; EXPENSES.    The Debtor will pay, when due, all taxes, assessments and other charges lawfully and validly
levied or assessed on the Collateral or any part thereof. The Debtor will pay and, as applicable, reimburse the Secured Party for (i) any and all fees, costs and expenses, of whatever kind and
nature, which the Secured Party may incur in connection with the enforcement, preservation and/or protection of the Secured Party's rights and/or remedies under the Loan Documents, including the fees,
expenses and disbursements of the Secured Party's counsel, whether incurred through judicial proceedings or otherwise, or in defending or prosecuting any actions or proceedings arising out of or
relating to the Loan, and (ii) all filing and recording fees and taxes payable in connection with the transactions contemplated by the Loan Documents. 

        5.    INSPECTION; NOTICES.    The Secured Party, or its agents, may enter on the Project and any other Collateral
Location at any time, and from time to time, for the purpose of inspecting the Collateral and making copies or abstracts of all of the Debtor's records pertaining to the Collateral. The Debtor will
keep accurate and complete records of the Collateral. The Debtor will give the Secured Party prompt notice of any Event of Default. 

        6.    INSURANCE.    The Debtor will purchase and maintain insurance at all times with respect to all tangible
Collateral against risks of fire (including so-called extended coverage), theft, vandalism and such other risks as the Secured Party may require, in such form, for such periods and written
by such companies as may be satisfactory to the Secured Party, such insurance to be payable to the Secured Party as its interests may appear. All policies of insurance will provide for thirty
(30) days advance written notice to the Secured Party of cancellation or any material change in coverages of such
insurance. The Debtor will furnish the Secured Party with certificates or other evidence satisfactory to the Secured Party of compliance with the foregoing insurance provisions. 

        7.    DISCHARGE OF LIENS.    At its option but without any obligation to do so, the Secured Party may
(a) discharge any taxes or other Liens at any time levied or placed on the Collateral, (b) pay for insurance on the Collateral, and/or (c) pay for the maintenance and preservation
of the Collateral. The Debtor will reimburse the Secured Party on its demand for any payment made, or any expense incurred, by the Secured Party pursuant to this Section 7. All of the foregoing
sums paid or advanced by the Secured Party will constitute part of the Obligations and will be secured by the Collateral. 

        8.    EVENTS OF DEFAULT.    Each of the following events or circumstances, whether or not caused by or within the
control of the Debtor, will be an "Event of Default" under this Agreement: 

        (a)   The
Debtor does not pay when due any of the Obligations; 

        (b)   The
Debtor does not observe, perform or comply with any of the terms or conditions of this Agreement; 

        (c)   A
default or breach of any of the Loan Documents (exclusive of this Agreement which is covered by Section 8(b) above) or of the Regulatory Agreement has occurred
(or any event has occurred or circumstance exists that would become a default or breach on the Secured Party's or HUD's election or would become a default or breach after notice, the lapse of time, or
on the satisfaction of any other condition, or all of the foregoing); 

        (d)   Any
warranty, representation or statement made or furnished to the Secured Party by, or on behalf of, the Debtor proves to have been false in any material respect when
made or furnished or when treated as being made or furnished to the Secured Party; or 

3

 

        (e)   The
Secured Party does not have, for any reason, a perfected, first priority security interest in all of the Collateral. 

        9.     REMEDIES
ON DEFAULT. 

        (a)   If
an Event of Default occurs, (i) the Secured Party may then, or at any time after the occurrence of an Event of Default, (A) declare all Obligations
immediately due and payable, and whereupon the Obligations will be due and payable automatically and immediately, without notice or demand, which the Debtor expressly waives, and proceed to enforce
payment of the Obligations and (B) exercise all of the rights and remedies afforded to the Secured Party under the terms of this Agreement and/or any of the other Loan Documents and/or by law
and/or in equity provided, and (ii) the Secured Party will have all of the rights and remedies of a secured party under the UCC (as defined in Section 12 below). The Secured Party may
require the Debtor to assemble the Collateral and make it available to the Secured Party at a place to be designated by the Secured Party which is reasonably convenient to both parties. 

        (b)   If
any notice is required by law for the Secured Party to make a sale or other disposition of the Collateral, the Secured Party and the Debtor agree that notice will not
be unreasonable as to time if given in compliance with this Agreement ten (10) days before any sale or other disposition of the Collateral. All reasonable attorneys' and paralegal fees and
other legal expenses incurred by the Secured Party to collect the Obligations, to retake, hold, prepare for sale, and to dispose of the Collateral will be (i) payable to the Secured Party on
its demand for payment, (ii) part of the Obligations, and (iii) secured by the Collateral. 

        (c)   The
Debtor further specifically agrees that, in any exercise of the rights of the Secured Party under this Agreement or under any other Loan Document, (i) any
combination of the Collateral may be offered for sale and (ii) all of the Collateral may be sold for one total price, and the proceeds of any such sale accounted for in one account without
distinction among the items of security or without assigning to them any proportion of such proceeds, the Debtor hereby waiving the application of any doctrine of marshaling. 

        (d)   The
Debtor shall cooperate in any legal and lawful manner necessary or required to permit the Secured Party or its successors and assigns to continue to operate and
maintain the Project as a nursing home and assisted living facility in Debtor's name, place and stead. For this purpose Debtor irrevocably appoints the Secured Party, its successors and assigns, as
Debtor's true and lawful attorney-in-fact, to do all things necessary or required by the State of California or any other government entity with jurisdiction over the Project,
including, but not limited to, the provision of any and all information and data, the payment of fees and other charges, and the execution of documents, all in the name of the Debtor. This power is
coupled with an interest. 

        10.    NO WAIVER BY SECURED PARTY; CUMULATIVE RIGHTS.    No waiver by the Secured Party of any Event of Default under
this Agreement will operate as a waiver of any other Event of Default or of the same Event of Default on a future occasion. The Secured Party may delay in exercising or omit to exercise any right or
remedy under this Agreement or under any other Loan Document without waiving that or any past, present or future right or remedy. All rights and remedies of the Secured Party in this Agreement will be
cumulative, and none of these rights or remedies will be exclusive of any other right or remedy allowed at law or in equity or in any other Loan Document, and all of these rights and remedies may be
exercised and enforced concurrently. 

        11.    BINDING EFFECT; JOINT OBLIGATIONS.    All rights and remedies of the Secured Party under this Agreement will
inure to the benefit of its successors and assigns; and all agreements, obligations, and duties of the Debtor will bind its heirs, personal representatives and permitted successors and assigns;
however, the Debtor may not assign this Agreement or any of its rights under this Agreement or delegate any of its duties or obligations under this Agreement without the consent 

4

 

of
the Secured Party. If there be more than one Debtor, their obligations, agreements and duties under this Agreement are made jointly and severally. 

        12.    GOVERNING LAW; CONSTRUCTION.    This Agreement and all rights and obligations under this Agreement, including
matters of construction, validity and performance, will be governed by the laws of the state in which the Project is located (the "State") except as to the existence, validity, perfection or priority
(and the effect of perfection or non-perfection or invalidity) of any Lien of the Secured Party on any deposit account (as defined in the UCC) which will be governed by the laws of the
state in which the applicable deposit account is maintained at the applicable bank, savings and loan association, credit union or like organization. If any term of this Agreement is found to be
invalid by a court with jurisdiction under the laws of the State or laws of mandatory application, then the invalid term will be considered excluded from this Agreement and will not invalidate the
remaining terms of this Agreement. All uncapitalized terms used herein which are defined in the Uniform Commercial Code, as enacted in the State (the "UCC"), will have the same meaning herein as in
the UCC unless the context indicates otherwise. Every power given herein is coupled with an interest and is irrevocable by death, dissolution or otherwise. The definition of any document includes all
schedules, attachments and exhibits to that document, and all renewals, extensions, supplements, amendments, modifications, restatements and consolidations of that document, and any document given in
substitution for or replacement of that document. The term "including" is used by way of example only and not by way of limitation, and the singular includes the plural and conversely. The captions or
headings contained in this Agreement are for reference purposes only and will not affect or relate to the interpretation of this Agreement. 

        13.    TERM OF AGREEMENT.    The term of this Agreement will begin on the date of this Agreement and continue in full
force and effect and be binding on the Debtor until the date that all of the Obligations are fully and finally paid and satisfied. 

        14.    FURTHER ASSURANCES.    At any time and from time to time, the Debtor, on request of the Secured Party, will
give, execute, file and/or record any notice, financing statement, instrument, document or agreement that the Secured Party may consider necessary or desirable to create, preserve, continue, perfect
or validate any security interest or other Lien granted under this Agreement or which the Secured Party may consider necessary or desirable to exercise or enforce its rights under this Agreement.
Without limiting the generality of the foregoing, the Secured Party is authorized: to file with respect to the Collateral one or more financing statements or other documents without the signature of
the Debtor and to name therein the Debtor as debtor and the Secured Party as secured party; and correct or complete, or cause to be corrected or completed, any financing statements or other such
documents as have been filed naming the Debtor as debtor and the Secured Party as secured party. The Debtor hereby appoints the Secured Party as its
attorney-in-fact and authorizes the Secured Party, on behalf of the Debtor, to execute, acknowledge, deliver, file and/or record any and all documents requiring execution by
the Debtor and necessary or desirable to effectuate or facilitate the purposes of this Agreement and/or the obligations or covenants of the Debtor under this Agreement. The power of attorney granted
hereby is coupled with an interest and is irrevocable. The Secured Party is also authorized by the Debtor to give notice to any Person that the Secured Party may consider necessary or desirable under
applicable law to preserve, perfect or protect the Secured Party's interest in the Collateral. 

        15.    INTEREST.    Any amounts payable by the Debtor under this Agreement will bear interest at the rate of interest
provided in the Note from the date on which such amounts are payable under this Agreement until the date on which such payments are made by the Debtor to the Secured Party; however, nothing in this
Agreement will be deemed to give to the Debtor the right to withhold payment in consideration of the payment of such interest. 

5

 

        16.    DELIVERY OF NOTICES.    All notices must be in writing and sent (a) in person, (b) by certified
or registered mail, (c) by overnight delivery carrier for next day delivery, or (d) by telegram, in each case to the address listed in the opening paragraph of this Agreement (or if
notice of a new address is given in accordance with this Agreement, the new address). Notice given in any other manner will not be considered delivered or given. A notice period will start
(i) if mailed, three business days after notice was sent by certified or registered mail, (ii) the next business day after being sent by overnight delivery, and (iii) the day the
notice was delivered in person or sent by telegram. 

        17.    REVIVAL OF SECURITY INTEREST.    If the Debtor makes a payment or payments to the Secured Party (or the Secured
Party receives any payment or proceeds of the Collateral) that are subsequently voided, avoided, set aside, annulled, or disregarded under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of the payment or proceeds received, the Obligations or part intended to be satisfied will be revived and will continue in full force and effect as if these
payment(s) or proceeds had not been received by the Secured Party. 

        18.    ENTIRE AGREEMENT; AMENDMENTS; CONTINUING WARRANTIES.    This Agreement and the other Loan Documents represent
the entire agreement between the Secured Party and the Debtor with respect to the subject matter of this Agreement and supersede all previous agreements, negotiations, and understandings with respect
to the subject matter of this Agreement. This Agreement may not be amended, altered or changed other than in a writing signed by the Secured Party and the Debtor. The Debtor's warranties and
representations in this Agreement will be treated as being continuing warranties and representations, made by the Debtor with the same effect as though the representations and warranties had been made
again on, and as of, each day of the term of this Agreement. 

        19.    COUNTERPARTS.    This Agreement may be executed in several counterparts and each counterpart will be considered
an original of this Agreement. 

        [THIS
SPACE INTENTIONALLY LEFT BLANK] 

6

 

        IN
WITNESS WHEREOF, the Debtor and the Secured Party have signed this Agreement as of the date in the first paragraph of this Agreement. 

	 	 	DEBTOR:
	

 	
 	

ENSIGN SOUTHLAND LLC,

a Nevada limited liability company
	

 	
 	

By:	
 	

The Ensign Group, Inc., a Delaware corporation, its sole Member
	

 	
 	

By:	
 	

/s/  CHRISTOPHER R. CHRISTENSEN      
 Christopher R. Christensen, President
	

 	
 	

SECURED PARTY:
	

 	
 	

CONTINENTAL WINGATE ASSOCIATES, INC., a Massachusetts corporation
	

 	
 	

By:	
 	

/s/  TOM PETERS      
 Tom Peters, Sr., Senior Vice President

7

EXHIBIT A  

Parcel A:  

        Parcel 2 of Parcel Map No. 4433, in the City of Norwalk, County of Los Angeles, State of California, as per the map recorded in Book 52 Page 64 of Parcel
Maps, in the Office of the County Recorder of said County. 

Parcel B:  

        A non-exclusive easement for parking on that property described as Parcel 1 of Parcel Map No. 4433 in the City of Norwalk, in the County of Los
Angeles, State of California, as per map recorded in Book 52 Page 64 of Parcel Maps, in the Office of the County Recorder of said County, disclosed by that certain document entitled Reciprocal Parking
Agreement recorded February 2, 1996 as Inst. No. 96-197911, Official Records. 

EXHIBIT B TO SECURITY AGREEMENT  

        All
of the following described property and interests in property: 

        (a)   All
fixtures, equipment and other goods and tangible personal property of every kind and description whatsoever now or hereafter located on, in or at the premises
described in Exhibit A to this Security Agreement (the "Premises"), including, but not limited to, all lighting, laundry, incinerating and power equipment; all engines, boilers, machines,
motors, furnaces, compressors and transformers; all power generating equipment; all pumps, tanks, ducts, conduits, wire, switches, electrical equipment and fixtures, fans and switchboards; all
telephone equipment (except that telephone equipment leased from a telephone company); all piping, tubing, and plumbing equipment and fixtures; all heating, refrigeration,
air-conditioning, cooling, ventilating, sprinkling, water, power, waste disposal and communications equipment, systems and apparatus; all water coolers and water heaters; all fire
prevention, alarm, and extinguishing systems and apparatus; all cleaning equipment; all lift, elevator and escalator equipment and apparatus; all partitions, shades, blinds, awnings, screens, screen
doors, storm doors, exterior and interior signs, gas fixtures, stoves, ovens, refrigerators, garbage disposals, dishwashers, kitchen and laundry fixtures, utensils, appliances and equipment, cabinets,
mirrors, mantles, floor coverings, carpets, rugs, draperies and other furnishings and furniture now or hereafter installed or used or usable in the operation of any part of the buildings, structures
or improvements erected or to be erected in or upon the Premises and every replacement thereof, accession thereto, or substitution therefor, whether or not the same are now or hereafter attached to
the Premises in any manner; 

        (b)   All
articles of tangible personal property not otherwise described herein which are now or hereafter located in, attached to or used in, on or about the buildings,
structures or improvements now or hereafter located, placed, erected, constructed or built on the Premises and all replacements thereof, accessions thereto, or substitution therefor, whether or not
the same are, or will be, attached to such buildings, structures or improvements in any manner; 

        (c)   All
rents, leases, income, revenues, issues, profits, royalties and other benefits arising or derived or to be derived from, or related to, directly or indirectly, the
Premises, whether or not any of the property described in this item (c) constitutes accounts, chattel paper, documents, general intangibles, instruments or money; 

        (d)   All
awards now or hereafter made with respect to the Premises as a result of (i) the exercise of the power of condemnation or eminent domain, or the police power,
(ii) the alteration of the grade of any street, or (iii) any other injury or decrease in the value of the Premises (including but not limited to any destruction or decrease in the value
by fire or other casualty), whether or not any of the property described in this item (d) constitutes accounts, chattel paper, documents, general intangibles, instruments or money; 

        (e)   All
land surveys, plans and specifications, drawings, briefs and other work product of the Debtor or its employees, and other papers and records now or hereafter used in
the construction, reconstruction, alteration, repair or operation of the Premises; 

        (f)    All
licenses, permits, certificates and agreements for the provision of property or services to or in connection with, or otherwise benefiting, the Premises, including
but not limited to nursing home licenses, assisted living licenses, certificates of need, and Medicare and Medicaid provider agreements; however, the Secured Party disclaims a security interest in
such of the property described in this item (f) to the extent that a security interest in such property may not be granted to the Secured Party without the forfeiture of the rights of the
Debtor (or any assignee of the Debtor) or a default resulting thereunder; 

        (g)   All
funds, monies, securities and other property held in escrow or as reserves and all rights to receive (or to have distributed to the Debtor) any funds, monies,
securities or property held in escrow or as a reserve including but not limited to all of Debtor's rights (if any) to any funds or amounts in that certain reserve fund created under the Regulatory
Agreement; 

        (h)   All
accounts, accounts receivable, general intangibles (including but not limited to tax refunds, tax refund claims and low income housing tax credits (if any)
applicable to the Premises), chattel paper, instruments, documents, inventory, goods, cash, bank accounts, certificates of deposits, securities, insurance policies, letters of credit, deposits,
judgments, liens, causes of action, warranties, guaranties and all other properties and assets of the Debtor, tangible or intangible, whether or not similar to the property described in this item (h); 

        (i)    All
books, records and files of whatever type or nature relating to any or all of the property or interests in property described herein or the proceeds thereof, whether
or not written, stored electronically or electromagnetically or in any other form, and whether or not such books, records, or files constitute accounts, equipment or general intangibles; and 

        (j)    All
products and proceeds of any and all of the property (and interests in property) described herein including but not limited to proceeds of any insurance, whether or
not in the form of original collateral, accounts, contract rights, chattel paper, general intangibles, equipment, fixtures, goods, securities, leases, instruments, inventory, documents, deposit
accounts or cash. 

EXHIBIT C TO SECURITY AGREEMENT  

Debtor:

Ensign Southland LLC,

a Nevada limited liability company

32232 Paseo Adelanto, Suite 100

San Juan Capistrano, California 92675 

Project:

Southland Care Center

11701 South Studebaker Road

Norwalk, California 90650

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]