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, Dawson 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 Andrew Adams) 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
100 Vine Street, Suite 1400
Murfreesboro, TN 37130
With a copy to: Office of General Counsel
National HealthCare Corporation
100 Vine Street, Suite 1400
Murfreesboro, TN 37130
If to Landlord: National Health Investors, Inc.
750 South Church Street, Suite B
Murfreesboro, TN 37130
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. Andrew Adams
W. Andrew Adams, President
NATIONAL HEALTHCARE CORPORATION
By: /s/ R. Michael Ussery
R. Michael Ussery, Sr. V.P., Operations
Witnessed by:
/s/ Barbara Harris
Barbara Harris
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Schedule A-1
Tennessee Centers:
NHC HealthCare, Athens
1204 Frye Street
Athens, TN 37303
NHC HealthCare, Chattanooga
2700 Parkwood Avenue
Chattanooga, TN 37404-1729
NHC HealthCare, Columbia
101 Walnut Lane
Columbia, TN 38401
NHC HealthCare, Dickson
812 N. Charlotte Street
Dickson, TN 37055
NHC HealthCare, Franklin
216 Fairground Street
Franklin, TN 37064
NHC HealthCare, Hendersonville
370 Old Shackle Island Road
Hendersonville, TN 37075
NHC HealthCare, Hillview
2710 Trotwood Avenue
Columbia, TN 38401
NHC HealthCare, Johnson City
3209 Bristol Hwy.
Johnson City, TN 37601
NHC HealthCare, Knoxville
809 E. Emerald Avenue
Knoxville, TN 37917
NHC HealthCare, Lewisburg
1653 Mooresville Hwy.
Lewisburg, TN 37091
NHC HealthCare, McMinnville
928 Old Smithville Road
McMinnville, TN 37110
NHC HealthCare, Milan
8017 Dogwood Lane
Milan, TN 38358
NHC HealthCare, Oakwood
244 Oakwood Drive
Lewisburg, TN 37091
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NHC HealthCare, Pulaski
992 E. College Street
Pulaski, TN 38478
NHC HealthCare, Scott
2380 Buffalo Road
Lawrenceburg, TN 38464
NHC HealthCare, Sequatchie
405 Dell Trail
Dunlap, TN 37327
NHC HealthCare, Smithville
825 Fisher Avenue
Smithville, TN 38068
NHC HealthCare, Somerville
308 Lake Drive
Somerville, TN 38068
NHC HealthCare, Sparta
34 Gracey Street
Sparta, TN 38583
NHC HealthCare, Springfield
608 8th Avenue East
Springfield, TN 37172
Missouri Centers:
NHC HealthCare, Desloge
801 Brim Street
Desloge, MO 63601
NHC HealthCare, Joplin
2700 E. 34th Street
Joplin, MO 64804
NHC HealthCare, Kennett
1120 Falcon Drive
Kennett, MO 63857-0696
NHC HealthCare, Maryland Heights
2920 Fee Fee Road
Maryland Heights, MO 63043
NHC HealthCare, St. Charles
35 Sugar Maple Lane
St. Charles, MO 63303
Florida Centers:
NHC HealthCare, Hudson
7210 Beacon Woods Drive
Hudson, FL 34667
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NHC HealthCare, Merritt Island
500 Crockett Blvd.
Merritt Island, FL 32953
NHC HealthCare, Plant City
701 North Wilder Road
Plant City, FL 33566
NHC HealthCare, Stuart
800 SE Central Pkwy.
Stuart, FL 34994
Kentucky Centers:
NHC HealthCare, Glasgow
Homewood Blvd.
Glasgow, KY 42141
NHC HealthCare, Madisonville
419 North Seminary Street
Madisonville, KY 42431
South Carolina Centers:
NHC HealthCare, Anderson
1501 East Greenville Street
Anderson, SC 29621
NHC HealthCare, Greenwood
437 East Cambridge Avenue
Greenwood, SC 29646
NHC HealthCare, Laurens
379 Pinehaven Street Ext.
Laurens, SC 29360-1259
Alabama Centers:
NHC HealthCare, Anniston
2300 Coleman Road
Anniston, AL 36207
NHC HealthCare, Moulton
300 Hospital Street
Moulton, AL 35650
Georgia Center:
NHC HealthCare, Rossville
1425 McFarland Avenue
Rossville, GA 30741
Virginia Center:
NHC HealthCare Bristol
245 North Street
Bristol, VA 24201
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Retirement Centers:
Colonial Hill Retirement Center
3207 Bristol Hwy.
Johnson City, TN 37601
Lake St. Charles Retirement Center
45 Honey Locust Lane
St. Charles, MO 63303
Parkwood Retirement Apartments
2700 A Parkwood Avenue
Chattanooga, TN 37404
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Schedule A-2
National HealthCare Corporation 12/21/05
Allocation of NHI Rent
Allocation of
2007 Rent
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Anderson 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
Johnson 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
Scott 333,339.08
Sequatchie 742,468.21
Smithville 827,233.22
Somerville 638,087.76
Sparta 227,094.55
Springfield 680,871.68
St. Charles 100,000.00
Colonial Hill Ret. 335,208.65
Lake St. Charles 848,018.77
Parkwood Ret. 8,977.69
Bayonet Point 1,325,000.00
Merritt Island 1,500,000.00
Parkway 1,300,000.00
Plant City 627,000.00
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Grand Total 33,700,000.00
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