EXHIBIT 10.23
AMENDMENT NO. 5 TO MASTER AGREEMENT TO LEASE
This Amendment No. 5 (hereinafter "5th Amendment") is made to that certain
Master Agreement to Lease between National Health Investors, Inc. ("Landlord" or
"NHI") and National HealthCare Corporation ("Tenant" or "NHC") dated October 17,
1991 (hereinafter "Master Lease") and is entered into on this the 27th day of
December, 2005, to be effective January 1, 2007.
PRELIMINARY STATEMENTS:
A. WHEREAS, pursuant to the terms of the Master Lease, National HealthCare
Corporation ("NHC") has leased certain licensed nursing centers, assisted living
or retirement facilities in forty-one geographical locations (hereinafter
"Leased Property" or "Leased Properties") as identified on Exhibit A to said
Master Lease; and
B. WHEREAS, the Master Lease contains a provision for a five year "Second
Renewal Term" which shall commence on January 1, 2007; and
C. WHEREAS, the parties, by Independent Directors Committees, have entered
into negotiations and now finalized the terms and conditions of the Second
Renewal Term; and
D. WHEREAS, the parties have heretofore deleted from the terms of the
Master Lease two (2) Leased Properties, namely NHC HealthCare, Nashville and NHC
HealthCare, Xxxxxx Springs;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES the parties do hereby
amend the Master Lease as follows:
1. Section 1.03 is amended as follows:
1.03 Term. "Second Renewal Term" shall mean a fifteen year term commencing
on January 1, 2007, which Second Renewal Term is hereby exercised by Tenant and
accepted by Landlord. Additionally, Tenant shall have the option to renew the
Master Lease for three (3) further five-year terms commencing January 1, 2022
(the "Third Renewal Term"), January 1, 2027 (the "Fourth Renewal Term"), and
January 1, 2032 (the "Fifth Renewal Term") for the Base Rent as described in
Section 2.01.01(b). Finally, six months written notice in advance must be given
by NHC to NHI to exercise the Third, Fourth and Fifth Renewal Terms as described
above, prior to the expiration of the then term; Tenant may not renew any
successive renewal term if it is in default under the Master Lease or any
amendments thereto.
2. Section 2.01.01 shall be deleted in its entirety with the following to
be substituted in lieu thereof:
2.01.01(a) Base Rent During Second Renewal Term. The total Base Rent for
all Leased Properties during the Second Renewal Term shall aggregate $33,700,000
as allocated among the various Leased Properties by a schedule attached to this
5th Amendment as Schedule A-2.
2.01.01(b) Base Rent During Third, Fourth and Fifth Renewal Terms. The
Base Rent for each Leased Property during the Third, Fourth and Fifth Renewal
Terms shall be the then Fair Rental Value of such Leased Property as negotiated
between the parties, and determined without including any value attributable to
any improvements to the Leased Property, voluntarily made by Tenant at its
expense.
3. Article 2 specifically and the Master Lease in general is hereby
amended by deleting all references to the term "Assumed Mortgage Debt Service
Rent."
4. Section 2.06 is deleted in its entirety with the following being
substituted in lieu thereof:
2.06 Percentage Rent. In addition to the Base Rent with respect to each
Lease Year after 2007, Tenant shall pay Landlord Percentage Rent ("Percentage
Rent") in accordance with this Section 2.06 equal to 4% of the amount by which
the Gross Revenues (as defined in Article 2.06.01) of each Leased Property in
the applicable Lease Year exceeds the Gross Revenues of such Leased Property
during 2007.
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5. Article 6 is hereby amended by the addition of the following Section
6.05:
6.05 Hiring Each Other's Employees. Landlord and its affiliates agree that
they will not induce by personal contact or personally initiated third party
contact with any employee of NHC (other than Xxxxxx Xxxxx) or its affiliates to
leave the employment of NHC or affiliates, without the express written consent
of NHC or its affiliates.
6. Section 9.02 is hereby amended by the deletion of reference to "Assumed
Mortgage Debt" and additionally in subparagraph (a) the deletion of a reference
to "3% per annum" and the deletion of the year "1992", with the substitution
therein of "4% per annum" and the year of "2007," respectively.
7. Article 13 is hereby amended by adding the following as 13.01.01:
13.01.01 Management Contracts. Landlord agrees to offer Tenant a Right of
First Refusal on any properties on which it intends to retain a third party
manager in any county where Landlord leases projects to Tenant. This offer may
be made no more than sixty (60) days in advance of potential management
changeover. Tenant has ten (10) business days to accept or reject the offer. If
rejected and if Landlord has received a management contract offer from a third
party with any different economic terms, NHI will give NHC five (5) days from
receipt of written notification sent by certified mail to accept same on
identical terms and conditions. Failure by Tenant to respond will be deemed a
denial by Tenant.
8. Article 13 is hereby amended by adding the following as Section 13.02:
13.02 Right of First Refusal on NHI Development Projects. Landlord and
Tenant do hereby agree that NHI will extend to NHC a Right of First Refusal on
NHI Development Projects in any county in which NHC now operates or manages a
NHC Health Care Center, in accordance with the definitions and terms of this
Right of First Refusal Procedure as hereinafter set forth.
A. RIGHT OF FIRST REFUSAL PROCEDURES shall mean the following:
(i) Upon NHI delivering a Written Offer to NHC on a NHI
Development Project, NHC shall have ten (10) business days
from receipt of a certified mailing to accept or reject the
Written Offer by written instrument. The failure of NHC to
accept or reject the Written Offer by the normal close of
business on the tenth (10) business day from the date of
receipt shall be deemed a rejection thereof.
(ii) Subsequently if NHI has a third party offer, which it is
willing to accept and which changes in any economic manner the
terms of the original Written Offer, then NHI must re-offer
the Written Offer on the changed terms and conditions to NHC,
which shall have five business days from the receipt by Tenant
of the certified mailing to accept or reject in writing the
changed terms. A failure to accept or reject in writing by the
close of business on the fifth business day from the date of
receipt shall be deemed a rejection.
B. DEFINITIONS.
(i) "NHI DEVELOPMENT PROJECT(S)" shall mean the development of
skilled or intermediate nursing centers, assisted living
facilities and/or independent living projects on which NHI or
its affiliates have purchased or contracted for property,
architectural plans and/or a finalized construction contract,
which NHI then offers to sell to or finance for a third party
operator.
(ii) "NHC HEALTH CARE CENTER(S)" means any licensed skilled or
intermediate nursing center, assisted living facility or
independent living units free-standing or attached to either
an assisted living, skilled, or intermediate nursing facility
owned or managed by NHC.
(iii) "WRITTEN OFFER" means a written transmittal, sent by certified
mail by NHI to NHC, which states the definitive terms upon
which NHI would engage in a sale-leaseback or
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mortgage financing of a NHI Development Project, which
definitive offer must include at the very least a) the total
purchase price or amount financed, b) the rate of interest or
lease payment amount, c) a term of years for the lease and/or
mortgage, and d) a description of the NHI Development Project,
including square footage, number of beds, apartments or units
and, to the extent that it is then known by NHI, a physical
address.
C. PENALTY.
Should either party breach this Right of First Refusal then it
agrees to reimburse the other party reasonable attorneys' fees,
costs and expenses incurred by it in a successful enforcement action
brought by one party against the other.
9. Section 18.01 is hereby amended by deleting the notice names and
addresses and substituting the following in lieu thereof:
If to Tenant: National HealthCare Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
With a copy to: Office of General Counsel
National HealthCare Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
If to Landlord: National Health Investors, Inc.
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxxxxx, XX 00000
10. Section 18.17 (Guarantee Fee Credit) is hereby deleted in its
entirety.
11. Section 18.25 is hereby added as follows:
18.25 Amendments to Master Lease Agreement Incorporated. The
amendments to the provisions of the Master Lease Agreement provided for herein
are hereby incorporated in and made a part of each short-form Lease Agreement of
the Leased Property.
12. Schedule A is amended by deletion of the original Schedule A and the
substitution of the attached Schedule A-1 in lieu thereof:
IN WITNESS WHEREOF, the parties have executed this 5th Amendment as of the
date set forth above.
NATIONAL HEALTH INVESTORS, INC.
By: /s/ W. Xxxxxx Xxxxx
W. Xxxxxx Xxxxx, President
NATIONAL HEALTHCARE CORPORATION
By: /s/ R. Xxxxxxx Xxxxxx
R. Xxxxxxx Xxxxxx, Xx. V.P., Operations
Witnessed by:
/s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
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Schedule A-1
Tennessee Centers:
NHC HealthCare, Athens
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
NHC HealthCare, Chattanooga
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
NHC HealthCare, Columbia
000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
NHC HealthCare, Xxxxxxx
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
NHC HealthCare, Franklin
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
NHC HealthCare, Hendersonville
000 Xxx Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxxxxxxx, XX 00000
NHC HealthCare, Hillview
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
NHC HealthCare, Xxxxxxx City
0000 Xxxxxxx Xxx.
Xxxxxxx Xxxx, XX 00000
NHC HealthCare, Knoxville
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
NHC HealthCare, Lewisburg
0000 Xxxxxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
NHC HealthCare, McMinnville
000 Xxx Xxxxxxxxxx Xxxx
XxXxxxxxxxx, XX 00000
NHC HealthCare, Milan
0000 Xxxxxxx Xxxx
Xxxxx, XX 00000
NHC HealthCare, Oakwood
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
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NHC HealthCare, Pulaski
000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
NHC HealthCare, Xxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
NHC HealthCare, Sequatchie
000 Xxxx Xxxxx
Xxxxxx, XX 00000
NHC HealthCare, Smithville
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
NHC HealthCare, Somerville
000 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
NHC HealthCare, Sparta
00 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
NHC HealthCare, Springfield
000 0xx Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Missouri Centers:
NHC HealthCare, Desloge
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
NHC HealthCare, Joplin
0000 X. 00xx Xxxxxx
Xxxxxx, XX 00000
NHC HealthCare, Kennett
0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
NHC HealthCare, Maryland Heights
0000 Xxx Xxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
NHC HealthCare, St. Xxxxxxx
00 Xxxxx Xxxxx Xxxx
Xx. Xxxxxxx, XX 00000
Florida Centers:
NHC HealthCare, Hudson
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
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NHC HealthCare, Xxxxxxx Island
000 Xxxxxxxx Xxxx.
Xxxxxxx Xxxxxx, XX 00000
NHC HealthCare, Plant City
000 Xxxxx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
NHC HealthCare, Stuart
000 XX Xxxxxxx Xxxx.
Xxxxxx, XX 00000
Kentucky Centers:
NHC HealthCare, Glasgow
Xxxxxxxx Xxxx.
Xxxxxxx, XX 00000
NHC HealthCare, Madisonville
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
South Carolina Centers:
NHC HealthCare, Xxxxxxxx
0000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
NHC HealthCare, Greenwood
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
NHC HealthCare, Laurens
000 Xxxxxxxxx Xxxxxx Xxx.
Xxxxxxx, XX 00000-0000
Alabama Centers:
NHC HealthCare, Anniston
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
NHC HealthCare, Xxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Georgia Center:
NHC HealthCare, Rossville
0000 XxXxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Virginia Center:
NHC HealthCare Bristol
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
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Retirement Centers:
Colonial Hill Retirement Center
0000 Xxxxxxx Xxx.
Xxxxxxx Xxxx, XX 00000
Lake St. Xxxxxxx Retirement Center
00 Xxxxx Xxxxxx Xxxx
Xx. Xxxxxxx, XX 00000
Parkwood Retirement Apartments
0000 X Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
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Schedule A-2
National HealthCare Corporation 12/21/05
Allocation of NHI Rent
Allocation of
2007 Rent
------------------------------- -------------
Xxxxxxxx 3,349,719.74
Anniston 1,152,192.65
Athens 734,407.98
Bristol 635,019.65
Chattanooga 1,215,050.09
Columbia 172,785.15
Desloge 179,760.94
Dickson 2,645,528.43
Franklin 321,726.88
Glasgow 1,180,434.81
Greenwood 899,691.97
Hendersonville 807,860.06
Hillview 519,597.79
Xxxxxxx City 708,580.13
Joplin 635,617.43
Kennett 367,561.80
Knoxville 788,343.12
Laurens 1,545,509.57
Lewisburg 802,685.74
Madisonville 402,937.31
Maryland Heights 251,289.76
McMinnville 1,134,503.59
Milan 881,207.66
Moulton 890,546.86
Oakwood 461,469.35
Pulaski 915,841.10
Rossville 606,830.82
Xxxxx 333,339.08
Sequatchie 742,468.21
Smithville 827,233.22
Somerville 638,087.76
Sparta 227,094.55
Springfield 680,871.68
St. Xxxxxxx 100,000.00
Colonial Xxxx Xxx. 335,208.65
Lake St. Xxxxxxx 848,018.77
Parkwood Ret. 8,977.69
Bayonet Point 1,325,000.00
Xxxxxxx Island 1,500,000.00
Parkway 1,300,000.00
Plant City 627,000.00
-------------
Grand Total 33,700,000.00
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