Ex-10.23 Amendment No.5 Master Agreement to Lease

EX-10.23 10 g00240exv10w23.txt EX-10.23 AMENDMENT NO.5 MASTER AGREEMENT TO LEASE 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. 1 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 2 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 3 Schedule A-1 Tennessee Centers: NHC HealthCare, Athens 1204 Frye Street Athens, TN 37303 NHC HealthCare, Chattanooga 2700 Parkwood Avenue Chattanooga, TN ###-###-#### 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 4 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 ###-###-#### 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 5 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 ###-###-#### 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 6 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 7 Schedule A-2