<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1997
REGISTRATION NO. 333-37185
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
NATIONAL HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 8051 52-2057472
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION) INDUSTRIAL CLASSIFICATION
CODE NUMBER)
</TABLE>
100 VINE STREET, SUITE 1400
MURFREESBORO, TENNESSEE 37130
(615) 890-2020
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------
RICHARD F. LAROCHE, JR.
SENIOR VICE PRESIDENT AND SECRETARY
NATIONAL HEALTHCARE CORPORATION
100 VINE STREET, SUITE 1400
MURFREESBORO, TENNESSEE 37130
(615) 890-2020
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPY TO:
ERNEST E. HYNE II
HARWELL HOWARD HYNE GABBERT & MANNER, P.C.
1800 FIRST AMERICAN CENTER
NASHVILLE, TENNESSEE 37238
(615) 256-0500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement and all
other conditions to the Merger of National HealthCare L.P. with and into the
Registrant have been satisfied.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") applies to the
Corporation and the relevant portion of the DGCL provides as follows:
145. INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act m good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees) incurred
by other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
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(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
The Certificate of Incorporation limits the liability of directors (in their
capacity as directors, but not in their capacity as officers) to The Corporation
or its stockholders to the fullest extent permitted by the DGCL, as amended.
Specifically, no director of The Corporation will be personally liable to The
Corporation or its stockholders for monetary damages for breach of the
director's fiduciary duty as a director, except as provided in Section 102 of
the DGCL for liability: (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders; (ii) for acts or omissions not in good
faith and which involve intentional misconduct or knowing violation of law;
(iii) under Section 174 of the DGCL, which relates to unlawful payments of
dividends or unlawful stock repurchases or redemptions; or (iv) for any
transaction from which the director derived an improper personal benefit. The
inclusion of this provision in the Certificate of Incorporation may have the
effect of reducing the likelihood of derivative litigation against directors,
and may discourage or deter stockholders or management from bringing a lawsuit
against directors for breach of their duty of care, even though such action, if
successful, might otherwise have benefitted the Corporation and its
stockholders.
Under the Certificate of Incorporation and in accordance with Section 145 of
the DGCL, the Corporation will indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than a "derivative" action by or in the right of the Corporation) by
reason of the fact that such person was or is a director or officer of the
Corporation, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such acts were unlawful. A
similar standard of care
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<PAGE> 4
is applicable in the case of derivative actions, except that indemnification
only extends to expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such an action and
then, where the person is adjudged to be liable to the Corporation, only if and
to the extent that the Court of Chancery of the State of Delaware or the court
in which such action was brought determines that such person is fairly and
reasonably entitled to such indemnity and then only for such expenses as the
court deems proper. The Corporation will indemnify, pursuant to the standard
enumerated in Section 145 of the DGCL, any past or present officer or director
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed derivative action by or in the right of the Corporation.
The Certification of Incorporation of the Corporation provides that the
Corporation may pay for the expenses incurred by an indemnified director or
officer in defending the proceedings specified above in advance of their final
disposition, provided that, if the DGCL so requires, such indemnified person
agrees to reimburse the Corporation if it is ultimately determined that such
person is not entitled to indemnification. The Corporation's Certificate of
Incorporation also allows the Corporation, in its sole discretion, to indemnify
any person who is or was one of its employees and agents to the same degree as
the foregoing indemnification of directors and officers. To the extent that a
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in subsections (a) and (b) of Section 145 of the DGCL, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith. In addition, the Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against and
incurred by such person in such capacity, or arising out of the person's status
as such whether or not the Corporation would have the power or obligation to
indemnify such person against such liability under the provisions of the DGCL.
The Corporation maintains insurance for the benefit of the Corporation's
officers and directors insuring such persons against certain liabilities,
including civil liabilities under the securities laws. Additionally, the
Corporation has entered into indemnification agreements with each of the
Directors of the Corporation, which, among other things, provides that the
Corporation will indemnify such Directors to the fullest extent permitted by the
Certificate of Incorporation and the DGCL and will advance expenses of defending
claims against such Directors.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are filed as part of the Registration Statement.
The Registrant agrees to furnish supplementally a copy of any omitted schedule
to the SEC upon request.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
* 2.1 Plan of Restructure
* 2.2 Agreement of Merger
* 3.1 Articles of Incorporation of National HealthCare Corporation
* 3.2 Bylaws of National HealthCare Corporation
* 4.1 Indenture between National HealthCare L.P. and First American National Bank, dated August
29, 1995 relating to 6.0% Convertible Senior Subordinated Debentures due 2000 aggregating
$30,000,000
* 4.2 Indenture of Mortgage and Deed of Trust dated as of October 15, 1989 by and among National
HealthCorp L.P. and Boatmen's Trust Company, Corporate Trustee, and H.E. Bradford,
Individual Trustee, relating to $20,000,000 ___% First Mortgage Bonds due 2005
* 4.3 Indenture of Trust and Security Agreement dated as of December 1, 1990 by and among
National Health Corporation Leveraged Employee Stock Ownership Trust, National Health
Corporation and National HealthCorp L.P. to State Street Bank and Trust Company of
Connecticut, National Association, as Indenture Trustee, and Barnett Banks Trust Company,
National Association, as Florida Co-Indenture Trustee
</TABLE>
II - 3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
* 4.4 First Supplemental Indenture of Trust and Security Agreement dated as of November 1, 1991 by
and among National Health Corporation Leveraged Employee Stock Ownership Trust, National
Health Corporation and National HealthCorp L.P. to State Street Bank and Trust Company of
Connecticut, National Association, as Indenture Trustee, and Barnett Banks Trust Company,
National Association, as Florida Co-Indenture Trustee
* 5 Legal Opinion of Harwell Howard Hyne Gabbert & Manner, P.C., counsel to the Registrant, as
to the due formation of the Corporation
8 Legal Opinion of Harwell Howard Hyne Gabbert & Manner, P.C., counsel to the Registrant, as
to the tax effect to securityholders
* 10.1 Master Agreement of Lease dated as of October 17, 1991 by and among National Health
Investors, Inc. and National HealthCorp L.P.
* 10.2 REIT Master Lease effective as of January 1, 1998, by and among National HealthCare
Corporation, National Health Realty, Inc. and NHR/OP, L.P.
* 10.3 Advisory, Administrative Services and Facilities Agreement dated as of October 17, 1991
between National Health Investors, Inc. and National HealthCorp L.P.
* 10.4 Advisory, Administrative Services and Facilities Agreement effective as of January 1, 1998,
between National HealthCare Corporation, National Health Realty, Inc. and NHR/OP, L.P.
* 10.5.1 Form of Service Agreement by and between National Health Corporation and National
HealthCare Corporation.
* 10.5.2 Form of National HealthCare Corporation 1997 Employee Stock Purchase Plan
* 10.5.3 Form of National HealthCare Corporation 1997 Stock Option and Stock
Appreciation Rights Plan
* 10.6 Loan and Security Agreement dated as of December 16, 1988 regarding the Registrant's
guaranty of National Health Corporation Leveraged Employee Stock Ownership Trust's
obligation under $50,000,000 loan
* 10.7 Amended and Restated Revolving Credit Note dated as of September 1, 1995 by and between
National Health Corporation and National HealthCare L.P.
* 10.8 Amended and Restated Revolving Credit Agreement dated as of September 1, 1995 by and
between National Health Corporation and National HealthCare L.P.
* 10.9 Third Amendment to Guarantee and Contingent Purchase Agreement dated as of October 14,
1993 by and among National HealthCare L.P., National Health Corporation and Third National
Bank in Nashville, as agent for the Banks
* 10.10 Fourth Amendment to Guarantee and Contingent Purchase Agreement dated as of December 30,
1993 by and among National HealthCare L.P., National Health Corporation and Third National
Bank in Nashville, as agent for the Banks
* 10.11 Fifth Amendment to Guarantee and Contingent Purchase Agreement dated as of September 1,
1995, by and among National HealthCare L.P., National Health Corporation and Third National
Bank in Nashville, as agent for the Banks
* 10.12 Suretyship Agreement dated as of March 8, 1988 by and among City Center, Ltd., NHESOP,
Inc. and National HealthCorp L.P.
* 10.13 Guaranty Agreement dated as of December 1, 1987 by and among National HealthCorp L.P.,
James O. McCarver and The Toronto-Dominion Bank
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
* 10.14 Guaranty Agreement dated as of May 1, 1993 by and between National HealthCorp L.P. and
Societe Generale
* 10.15 Guaranty Agreement dated as of March 5, 1991 by and between National HealthCorp L.P. and
The Bank of Tokyo, Ltd., New York Agency (Palm Beach County)
* 10.16 Guaranty Agreement dated as of March 5, 1991 by and between National HealthCorp L.P. and
The Bank of Tokyo, Ltd., New York Agency (Dade County)
* 10.17 Amendment to Guaranty Agreement dated as of October 17, 1991 by and among National
HealthCorp L.P., James O. McCarver and The Toronto-Dominion Bank
* 10.18 Amendment to Guaranty Agreement dated as of July 22, 1992 by and among National
HealthCorp L.P., James O. McCarver and The Toronto-Dominion Bank
* 10.19 Fourth Amendment to Guaranty Agreement dated as of June 30, 1995 by and among National
HealthCare L.P., James O. McCarver and The Toronto-Dominion Bank
* 10.20 Subordination Agreement dated as of May 1, 1993 by and among National HealthCorp L.P.,
Societe Generale and Richland Place, Inc.
* 10.21 Renewal Note dated as of December 31, 1993 in the principal amount of $10 million payable to
National HealthCorp L.P. by National Health Corporation
* 10.22 Second Deed of Trust Note dated as of January 20, 1988 in the principal amount of $10 million
payable to National HealthCorp L.P. by NHESOP, Inc.
* 10.23 First Amended Second Deed of Trust Note dated as of December 21, 1988 payable to National
HealthCorp L.P. by NHESOP, Inc.
* 10.24 Promissory Note dated as of January 15, 1996 in the principal amount of $2,797,511.28 payable
to National Health Investors, Inc. by National HealthCare L.P.
* 10.25 Renewal Term Note dated as of January 1, 1992 in the principal amount of $10 million
payable to National Health Corporation by National HealthCorp L.P.
* 10.26 Assumption and Modification Agreement dated as of October 17, 1991 by and among National
Health Investors, Inc., National HealthCorp L.P. and Third National Bank in Nashville, Agent
* 10.27 Amended and Restated Reimbursement Agreement dated as of December 1, 1986, and
Amended and Restated as of March 1, 1991, by and among Florida Convalescent Associates,
National HealthCorp L.P. and The Bank of Tokyo, Ltd., New York Agency
* 10.28 Contribution and Assumption Agreement dated as of October 17, 1991 by and between National
HealthCorp L.P. and National Health Investors, Inc.
* 10.29 5.75% Subordinated Convertible Note due June 30, 2004 by and between National HealthCare
L.P. and The 1818 Fund II, L.P.
* 21 Subsidiaries of the Registrant
* 23.1 Consent of Arthur Andersen LLP, independent public accountants.
* 23.2 Consent of Arthur Andersen LLP, independent public accountants.
* 23.3 Consent of Howell Howard Hyne Gabbert & Manner, P.C. (contained in Exhibits 5 and 8)
* 24 Power of Attorney (included on the signature page hereto)
</TABLE>
* Previously filed.
(b) The Schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.
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<PAGE> 7
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3; and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
4. If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by Rule 3-19 of this chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished, provided, that
the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph (4) and
other information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial statements.
Notwithstanding the foregoing, with respect to registration statements on Form
F-3, a post-effective amendment need not be filed to include financial
statements and information required by Section 10(a)(3) of the Act or Rule 3-19
of this chapter if such financial statement and information are contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Form F-3.
5. That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
6. That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
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<PAGE> 8
7. That every prospectus (i) that is filed pursuant to the paragraph
immediately preceding, or (ii) that purports to meet the requirements of section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
8. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
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<PAGE> 9
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
9. The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
10. The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became Effective.
11. The undersigned registrant hereby undertakes to provide to the
Distribution Agent at the closing specified in the Plan of Restructure,
certificates in such denominations and registered in such names as required by
the Distribution Agent to permit prompt delivery to each Unitholder.
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<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment No. 4 to Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Murfreesboro, State of Tennessee on the 5th day of December, 1997.
NATIONAL HEALTHCARE CORPORATION
By: /s/ W. Andrew Adams
-------------------------------------
W. Andrew Adams
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed on the dates indicated
by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ W. Andrew Adams Chairman, President, Chief December 5, 1997
- ------------------------------- Executive Officer and Director
W. Andrew Adams (Chief Executive Officer)
/s/ Donald K. Daniel Vice President, Controller, Chief December 5, 1997
- ------------------------------- Financial Officer and Chief
Donald K. Daniel Accounting Officer
* Director December 5, 1997
- -------------------------------
J. K. Twilla
* Director December 5, 1997
- -------------------------------
Olin O. Williams
* Director December 5, 1997
- -------------------------------
Robert G. Adams
* Director December 5, 1997
- -------------------------------
Ernest G. Burgess
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C> <C>
* Director December 5, 1997
- -------------------------------
Lawrence C. Tucker
</TABLE>
/s/ Richard F. LaRoche, Jr.
- -----------------------------------------------
* By Richard F. LaRoche, Jr., attorney-in-fact
II - 10
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November 19, 1997
HAND DELIVERED
National HealthCare L.P.
100 Vine Street
Murfreesboro, Tennessee 37130
Attention: Richard F. LaRoche, Jr.
Senior Vice President and Secretary, NHC, Inc.
Managing General Partner
Re: National HealthCare L.P. Plan of Restructure
Gentlemen:
We have served as tax counsel to National HealthCare L.P., a Delaware
limited partnership ("NHC"), in connection with (i) its incorporation of
National Health Realty, Inc., a Maryland corporation that is intended to qualify
as a real estate investment trust for federal income tax purposes (the "REIT"),
(ii) its proposed formation of NHR/OP, L.P., a Delaware limited partnership (the
"Operating Partnership"), (iii) its proposed contribution (subject to certain
liabilities) of certain real properties, mortgage notes and other assets (the
"REIT Assets") to the REIT and the Operating Partnership in exchange for one
hundred percent (100%) of the issued and outstanding capital stock of the REIT
and approximately six hundred forty-three thousand seven hundred forty-eight
(643,748) units of limited partnership interest in the Operating Partnership,
(iv) its proposed distribution of all REIT stock to the NHC unitholders and its
Operating Partnership units to National Health Corporation, a Tennessee
corporation and NHC's administrative general partner ("National"), (v) its
incorporation of National HealthCare Corporation, a Delaware corporation (the
"Corporation"), and (vi) the proposed merger of NHC with and into the
Corporation, all as more particularly described in the Proxy Statement and Joint
Form S-4 described below.
In connection with these transactions, you have asked us to render our
opinion regarding certain federal income tax consequences. At your request, we
have also participated in the preparation of the federal income tax
considerations discussion contained in the Joint Form S-4 described below.
Subject to the assumptions, qualifications and limitations contained therein,
said discussion fully and fairly addresses the federal income tax issues
material to NHC unitholders in connection with the Plan of Restructure as
defined in said Joint Form S-4. Said discussion, however, should be read in its
entirety and is supported by the opinion of counsel, which is set forth
below. Tax counsel consents to the inclusion of a copy of this opinion as an
exhibit to said Joint Form S-4 as filed with the Securities and Exchange
Commission. We further consent to being named as Tax Counsel in the Joint Form
S-4 and to references to our firm as such in the Joint S-4.
In response to your request, our opinion is set forth below.
This opinion is based upon the provisions of the Internal Revenue Code
of 1986, as amended to the date of this letter (the "Code"), the existing U.S.
Treasury Regulations (the "Regulations") and proposed Regulations thereunder,
judicial decisions and currently published administrative rulings generally
available as of the date of this letter. Any such authority may be changed,
perhaps retroactively. Therefore, no assurance can be given that any such
changes would not adversely affect the accuracy of the conclusions stated
herein. Furthermore, we undertake no responsibility to advise
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National HealthCare L.P.
November 19, 1997
Page 2
you of any new developments in the application or interpretation of the federal
income tax laws to the transactions discussed herein. The Internal Revenue
Service (the "IRS") is not bound by our opinion.
In rendering this opinion, we have reviewed the Proxy Statement for
Special Meeting of Partners of NHC and Joint Form S-4 of the REIT and the
Corporation (Registration Statement Nos. 333-37173 and 333-37185 under the
Securities Act of 1933) filed with the Securities and Exchange Commission on
October 3, 1997, as amended (the "Joint Form S-4"), and exhibits attached
thereto.
In rendering our opinion, we have assumed: (i) the genuineness of all
signatures on documents we have examined, (ii) the authenticity of all documents
submitted to us as originals, (iii) the conformity to the original documents of
all documents submitted to us as copies, (iv) the conformity of final documents
to all documents submitted to us as drafts, (v) the due execution of all
documents where due execution and delivery are prerequisites to the
effectiveness thereof, (vi) the authority and capacity of the individual or
individuals who execute any such documents on behalf of any person or entity,
(vii) the factual accuracy of all representations, warranties and other
statements made by all persons in connection with the transactions described in
the Joint Form S-4, (viii) that the transactions contemplated by the Joint Form
S-4 will be consummated as described therein and, as relevant, summarized below,
and (ix) that NHC, the REIT, the Operating Partnership and the Corporation have
the legal right and power under all applicable laws and regulations to enter
into, execute and consummate such transactions. We have also relied upon and our
opinion assumes the accuracy of certain written representations made to us by
NHC.
BRIEF SUMMARY OF FACTS
NHC is a Delaware limited partnership that principally operates
residential care facilities, long-term healthcare centers and home healthcare
centers and programs throughout the southeastern United States. Units of limited
partnership interest in NHC are traded over the American Stock Exchange. NHC
intends to transfer most of the REIT Assets to the REIT, a recently formed
Maryland corporation, and a small portion of the REIT Assets to the Operating
Partnership, a yet to be formed Delaware limited partnership, in exchange for
all of the issued and outstanding capital stock of the REIT, the assumption by
the REIT of certain liabilities secured by the REIT Assets, and approximately
six hundred forty-three thousand seven hundred forty-eight (643,748) units of
limited partnership interest in the Operating Partnership. NHC intends to
distribute all of the REIT stock to NHC's unitholders on the basis of one REIT
share per one NHC unit; provided, however, National shall receive all of NHC's
Operating Partnership units on the basis of one such unit for each NHC unit held
by National, which distribution shall thereby reduce the REIT shares National
would otherwise receive on a one for one basis. The REIT intends to satisfy the
requirements of Part 2 of subchapter M of the Code, so as to qualify and be
taxed for federal income tax purposes as a real estate investment trust.
Immediately following the distribution of the REIT stock and the
Operating Partnership units to the NHC unitholders, NHC will merge with and into
National HealthCare Corporation, a recently formed Delaware corporation.
Pursuant to the merger, each outstanding unit of NHC will represent the right to
receive one share of common stock of the Corporation. Following the merger, NHC
will cease to exist.
DISCUSSION AND OPINIONS
NHC'S CONTRIBUTION OF ASSETS TO THE REIT
Nonrecognition Rule of Code Section 351. Under the general rule of Code
section 351, no gain or loss is recognized upon the transfer of property to a
corporation by the transferors of such property solely in exchange for stock in
the corporation if immediately thereafter the transferors are in control of the
corporation. Control is defined in Code section 368(c) as the ownership of
eighty percent (80%) of the voting stock and eighty percent (80%) of each class
of non-voting stock of a corporation.
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November 19, 1997
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In exchange for its contribution to the REIT of most of the REIT
Assets, NHC will receive one hundred percent (100%) of the REIT's outstanding
capital stock. NHC will then immediately distribute all of the REIT stock to
NHC's unitholders. Although NHC will hold the REIT shares immediately after its
transfer of such assets to the REIT, it will hold them only for an instant.
Whether a transaction involving two or more steps (e.g., NHC's contribution of
assets to the REIT in exchange for REIT stock and the distribution of such REIT
stock to NHC's unitholders) should be collapsed or integrated for purposes of
determining whether the "immediately after" requirement of section 351 has been
satisfied has frequently been the subject of interpretation by the IRS and
courts.
In the case of a partnership that contributes assets to a corporation
in exchange for corporate stock and immediately thereafter liquidates by
distributing the stock to its partners "in proportion to their partnership
interests," the IRS has ruled that the "immediately after" requirement of
section 351 is satisfied. Revenue Ruling 84-111, 1984-2 C.B. 88. This is so even
though the identities of the actual contributor or transferor of property to the
corporation (the partnership) and the ultimate recipient of the corporate stock
(the partners) were not the same. As discussed below, NHC's distribution of the
REIT stock and Operating Partnership units followed immediately by NHC's merger
into the Corporation will be treated as a liquidation of NHC. Accordingly, it is
the opinion of Tax Counsel that, if challenged, it is more likely than not that
the general nonrecognition rule of section 351 would apply to NHC's contribution
of REIT Assets to the REIT, except as otherwise provided below.
Investment Company Exception. An exception to the general
nonrecognition rule of Code section 351 is found in section 351(e), which
provides that section 351 shall not apply to a "transfer of property to an
investment company." The Regulations state that a transfer is considered to be
to an investment company if: (i) the transfer is to, among others, a real estate
investment trust, and (ii) the transfer results, directly or indirectly, in the
diversification of the transferors' interests. Regulation ss. 1.351-1(c)(1).
As described in the Joint Form S-4, NHC and the REIT intend that the
REIT qualify and be taxed as a real estate investment trust. In that regard, an
opinion of Goodwin, Procter & Hoar LLP, Boston, Massachusetts, special counsel
to the REIT, that the form of organization and proposed operations of the REIT
are such as to enable it to be classified as a real estate investment trust for
federal income tax purposes is attached as an Exhibit to the Joint Form S-4.
Based upon that opinion, we anticipate that one of the two investment company
definitional requirements would be met with respect to NHC's contribution of
assets to the REIT.
With respect to the second requirement, a transfer ordinarily results
in the diversification of the transferors' interests if two or more persons
transfer non-identical assets to a corporation in the exchange. Regulation ss.
1.351-1(c)(5).
Although section 1002(a) of the Taxpayer Relief Act of 1997 amended
Code section 351(e) to change, according to the Conference Committee Report,
"the types of assets considered in the definition of an investment company in
the present Treasury regulations" (which changes are inapplicable if the
transfer is to a real estate investment trust), the new legislation "does not
override. . . the requirement that a contribution of property to an investment
company result in diversification in order for gain to be recognized."
Since NHC is the only transferor of assets to the REIT for purposes of
Code section 351, we are of the opinion that the second definitional requirement
of an investment company is absent, and therefore, it is more likely than not
that the investment company exception of section 351(e) would not apply to NHC's
contribution of assets to the REIT.
Exception for Liabilities in Excess of Basis. A further exception to
the general nonrecognition rule of Code section 351 is found in section 357(c).
Under section 357(c), if the sum of the liabilities assumed by the transferee
corporation plus the liabilities to which the property contributed to the
transferee corporation are subject exceed the total adjusted tax basis of the
property contributed to the transferee corporation by the transferor, then the
transferor must
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National HealthCare L.P.
November 19, 1997
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recognize gain in an amount equal to such excess. Although the REIT will assume
certain liabilities in connection with NHC's contribution of assets to the REIT
and the property to be contributed by NHC to the REIT will be subject to
certain liabilities, NHC has represented in writing that such liabilities will
not exceed the adjusted tax basis of the assets to be contributed to the REIT.
Notwithstanding that Code section 357(c) limits any gain recognized to
the amount that the liabilities exceed the transferor's basis in the contributed
property, gain in an amount equal to the liabilities in full, not just the
excess, would be recognized by a transferor in a section 351 transaction if the
transferor's principal purpose, with respect to the transferee's assumption of
liabilities or acquisition of property subject to liabilities, is to avoid
federal income tax or if no bona fide business purpose exists for such
assumption or acquisition. NHC has represented that the REIT's assumption of
liabilities and NHC's transfer of assets to the REIT subject to certain
liabilities is not for the purpose of avoiding federal income tax and that bona
fide business purposes for the transaction exist, which purposes are set forth
in substantial detail in the Joint Form S-4.
Accordingly, and based solely upon NHC's representations, section
357(c) would be inapplicable to NHC's contribution of assets to the REIT.
NHC'S CONTRIBUTION OF ASSETS TO THE OPERATING PARTNERSHIP
Under the general rule of Code section 721, no gain or loss is
recognized to a partnership or its partners upon a partner's transfer or
contribution of property to the partnership in exchange for an interest in the
partnership. In contrast to Code section 351, section 721 does not impose a
requirement that the transferors be in control of the partnership immediately
after the transfer.
Simultaneously with NHC's contribution of a portion of the REIT assets
to the Operating Partnership, the REIT will contribute to the Operating
Partnership those REIT Assets contributed to it by NHC. In exchange for its
contribution to the Operating Partnership, NHC will receive approximately six
hundred forty-three thousand seven hundred forty-eight (643,748) units of
limited partnership interest in the Operating Partnership. NHC will then
immediately distribute all of said Operating Partnership units to National.
Since section 721 does not impose an immediately after control requirement as
does section 351, Tax Counsel is of the opinion that NHC's distribution of the
Operating Partnership units to National will not affect the application of Code
section 721 to NHC's contribution of assets to the Operating Partnership.
Accordingly, Tax Counsel is of the opinion that, if challenged, it is more
likely than not that the general nonrecognition rule of Code section 721 would
apply to NHC's contribution of assets to the Operating Partnership.
NHC'S DISTRIBUTION OF REIT SHARES & OPERATING PARTNERSHIP UNITS TO ITS
UNITHOLDERS
As noted above, immediately following the contribution of the REIT
Assets to the REIT and the Operating Partnership, NHC will distribute all of the
REIT shares and Operating Partnership units that NHC receives upon such
contributions to the NHC unitholders. Code section 731(b) provides that a
partnership will not recognize gain or loss upon its distribution of property or
money to its partners. As to the partners, Code section 731(a) generally
provides that no gain or loss shall be recognized by a partner upon the
distribution to the partner of property other than money.
For purposes of section 731(a), "marketable securities" are generally
treated as money. Marketable securities are defined in section 731(c) to
include, in part, (i) stock that is, as of the date of distribution, actively
traded within the meaning of Code section 1092(d)(1), and (ii) other equity
interests that, pursuant to their terms or any other arrangement, are readily
convertible into, or exchangeable for, money or marketable securities.
Regulations promulgated under section 731(c) provide that stock is actively
traded if it is of a type that is, as of the date of distribution, listed on a
national securities exchange. It is anticipated that as of the Effective Time
(as defined in the Joint Form S-4) the REIT shares will be approved for listing
on the American Stock Exchange, though such listing will
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National HealthCare L.P.
November 19, 1997
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not be effective until some time after the Effective Time. Furthermore, while
the Operating Partnership units will not be listed on an exchange, they will be
convertible into REIT shares.
However, section 741(c)(4) of the Uruguay Round Agreements Act, which
amended Code section 731 to include marketable securities within the definition
of money, provides that such amendments do not apply to the distribution of
marketable securities in a "qualified partnership liquidation" if (i) such
securities were received by the partnership in a nonrecognition transaction for
substantially all of the partnership's assets, (ii) such securities are
distributed by the partnership within 90 days after their receipt by the
partnership, and (iii) the partnership is liquidated before the beginning of the
partnership's first taxable year beginning after December 31, 1997. For purposes
of this transitional rule, a "qualified partnership liquidation" is a complete
liquidation of a publicly traded partnership as defined in Code section 7704(b)
that is an existing partnership as defined in section 10211(c)(2) of the Revenue
Act of 1987.
NHC is a publicly traded and existing partnership as so defined. The
REIT shares, the Operating Partnership units and stock in the Corporation will
be issued to NHC in exchange for all of NHC's assets under the nonrecognition
provisions of sections 351 and 721 and will be distributed by NHC to its
unitholders within 90 days of their receipt by NHC. As discussed below, the
distribution by NHC of the REIT stock and the Operating Partnership units
followed immediately by the merger of NHC into the Corporation will be treated
for federal income tax purposes as a complete termination and liquidation of
NHC, which is to be effective prior to NHC's first taxable year after December
31, 1997.
Accordingly, Tax Counsel believes it is more likely than not that Code
section 731(c) would not apply to NHC's distribution of the REIT shares and
Operating Partnership units. Therefore, subject to the limitations, facts and
assumptions expressed herein, Tax Counsel is of the opinion that it is more
likely than not that neither NHC nor its unitholders will recognize gain upon
NHC's distribution of the REIT shares and Operating Partnership units to NHC's
unitholders.
MERGER OF NHC INTO THE CORPORATION
Incorporation of the Corporation. The incorporation of the Corporation
by NHC is intended to qualify as a tax free incorporation under Code section
351. It is the opinion of Tax Counsel that neither the Corporation nor NHC would
recognize gain upon the formation of the Corporation and that the Corporation
will be taxed as a corporation for federal income tax purposes.
The Merger: Constructive Contribution of Assets and Code Section 351.
The merger of NHC into the Corporation immediately following the distribution by
NHC of the REIT stock and the Operating Partnership units will be treated for
federal income tax purposes as a complete termination and liquidation of NHC in
which NHC unitholders receive shares in the Corporation and REIT shares in
exchange for their units (though National will also receive Operating
Partnership units). The merger of NHC into the Corporation will be treated as a
contribution by NHC of its assets (other than those contributed to the REIT or
the Operating Partnership) to the Corporation and the distribution by NHC of the
Corporation's stock (with the REIT stock and Operating Partnership units) to
NHC's unitholders. As noted above, under the general rule of Code section 351,
no gain or loss is recognized upon the transfer of property to a corporation by
the transferors of such property solely in exchange for stock in the corporation
if immediately thereafter the transferors are in control, as defined in section
368(c), of the corporation.
As discussed above, in Revenue Ruling 84-111 the IRS ruled that the
"immediately after" requirement of section 351 is satisfied if a partnership
contributes its assets to a corporation in exchange for corporate stock and
immediately thereafter liquidates by distributing the stock to its partners "in
proportion to their partnership interests." Although NHC will actually merge
into the Corporation, NHC will cease to exist as a separate entity and, for
federal income tax purposes, be treated as liquidating. Therefore, Tax Counsel
is of the opinion that, if challenged, it is more
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National HealthCare L.P.
November 19, 1997
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likely than not that the general nonrecognition rule of Code section 351 would
apply to NHC's "constructive contribution" of assets to the Corporation.
As noted above, Code section 357 generally permits a corporation, in
addition to issuing stock in a section 351 transaction, to assume liabilities of
the transferor or acquire property from the transferor subject to liabilities,
without causing the transferor to recognize gain or be precluded from obtaining
the benefits of Code section 351. This rule does not apply, however, if either
(i) the principal purpose for the assumption or acquisition was tax avoidance
(or was not a bona fide business purpose), or (ii) such liabilities exceed the
transferor's basis in the contributed assets. NHC has represented that the
liabilities to be assumed by the Corporation or to which assets constructively
contributed to the Corporation are subject do not exceed NHC's adjusted tax
bases in such assets. NHC has also represented that the principal purpose of the
Corporation's assumption of such liabilities and acquisition of properties
subject to liabilities is a bona fide business purpose and not the avoidance of
taxes.
Accordingly, and based solely upon NHC's representations, section
357(c) would be inapplicable to NHC's constructive contribution of assets to the
Corporation.
As discussed in detail above, the investment company exception to the
nonrecognition rule of Code section 351 precludes section 351's application to a
"transfer of property to an investment company." The Regulations provide that a
transfer shall be considered to be made to an investment company if the
transferee is, among others, a corporation more than eighty percent (80%) the
value of which consists of assets held for investment that are readily
marketable stocks or securities or interests in regulated investment companies
or real estate investment trusts.
The Taxpayer Relief Act of 1997 amended Code section 351 to expand the
assets to be considered in determining whether a corporation is an investment
company beyond those currently listed in the Regulations. Under Code section
351(e) as amended, an investment company includes any corporation if more than
eighty percent (80%) of its assets by value consist of money, stocks and other
corporate equity interests, evidences of indebtedness, options, forward or
future contracts, notational principal contracts or derivatives, foreign
currency, certain interests in precious metals, interests in real estate
investment trusts and regulated investment companies, common trust funds, and
publicly-traded partnership or other interests in non-corporate entities that
are convertible into or exchangeable for any asset of a type previously listed.
NHC has represented that the value of the Corporation's assets of the types
listed will not equal or exceed eighty percent (80%) of the Corporation's value.
As discussed above, to be a transfer to an investment company, the
transfer must (i) be to, among others, a regulated investment company, a real
estate investment trust, or a company more than eighty percent (80%) the value
of which consists of assets of the types listed, and (ii) results, directly or
indirectly, in the diversification of the transferor's interests.
As noted above, a transfer ordinarily results in the diversification of
the transferors' interest if two or more persons transfer non-identical assets
to a corporation in the exchange. According to the Conference Committee Report,
the changes to Code section 351(e) made by section 1002(a) of the Taxpayer
Relief Act of 1997 do "not override. . . the requirement that a contribution of
property to an investment company result in diversification in order for gain to
be recognized."
Accordingly, based on NHC's representation with regard to the value of
the investment company type assets to be held by the Corporation and since NHC
is the only transferor of assets to the Corporation for purposes of Code section
351, Tax Counsel is of the opinion that, if challenged, it is more likely than
not that the investment company exception of section 351(e) would not apply to
NHC's constructive contribution of assets to the Corporation.
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The Merger: Constructive Distribution of Corporation Stock. Although
NHC will, for purposes of state law, merge into the Corporation, NHC will be
deemed to distribute to NHC's unitholders the Corporation stock it receives upon
its constructive contribution of assets to the Corporation (with the REIT stock
and Operating Partnership units) in complete liquidation of NHC and of the
partnership interests of its unitholders.
Code section 731(b) provides that a partnership will not recognize gain
upon its distribution of property or money to its partners. As to the partners,
Code section 731(a)(1) generally provides that no gain or loss shall be
recognized by a partner upon a distribution to him of property, other than
money, the definition of which includes "marketable securities" as discussed
above. It is anticipated that as of the Effective Time the Corporation's shares
will be approved for listing on the American Stock Exchange, though such listing
will not be effective until some time thereafter.
However, the definition of money does not include marketable securities
if such are distributed in a "qualified partnership liquidation" that satisfies
the requirements of the transitional rule of section 741(c)(4) of the Uruguay
Round Agreements Act discussed above. For these purposes, a "qualified
partnership liquidation" is a complete liquidation of a publicly traded
partnership as defined in Code section 7704(b) that is an existing partnership
as defined in section 10211(c)(2) of the Revenue Act of 1987. NHC is such a
"publicly traded" "existing" partnership.
The REIT shares, the Operating Partnership units and the Corporation
stock will be issued to NHC in exchange for all of its assets under the
nonrecognition rules of sections 351 and 721 and will be distributed within 90
days of their receipt by NHC. NHC's distribution of the REIT stock and the
Operating Partnership units and its merger into the Corporation will be treated
for federal income tax purposes as a complete termination and liquidation of
NHC, which is to be effective prior to NHC's first taxable year after December
31, 1997. Accordingly, Tax Counsel is of the opinion that, if challenged, it is
more likely than not that Code section 731(c) would not apply to the merger, and
that, under Code section 731, NHC's unitholders would not recognize gain upon
the complete liquidation of their limited partnership interests in NHC in
exchange for the REIT shares, the Operating Partnership units and the
Corporation's stock.
Our opinion is rendered as of the date of this letter and is based on
existing statutes, administrative rules and regulations, court decisions, and
general legal principles, any of which could be changed at any time. Any such
changes may apply retroactively, and could significantly modify our conclusions
set forth above. Our opinion is limited to the specific matters described
herein, and only represents Tax Counsel's best legal judgment of the application
to the transactions described herein of federal income tax laws, existing
judicial decisions, administrative regulations and published rulings and
procedures; it has no binding effect or official status, and no assurance can be
given that the conclusions reached in this opinion would be sustained by a court
of law if contested. We undertake no obligation to update this opinion at any
time. All opinions expressed herein relate only to matters governed by the laws
of the United States of America. In the event any one of the statements,
representations, warranties or assumptions upon which we have relied to issue
this opinion is incorrect, our opinion might be adversely affected and may not
be relied upon.
This opinion is being rendered to NHC in connection with the transactions
contemplated in the Joint Form S-4. Tax Counsel consents to the inclusion of a
copy of this opinion as an exhibit to said Joint Form S-4, which opinion is
otherwise not to be quoted or relied upon by any other party without our prior
written consent.
Very truly yours,
HARWELL HOWARD HYNE GABBERT & MANNER, P.C.
