Material Agreement (Form 8-K)

Item 1.01 Entry into a Material Definitive Agreement.

On May 14, 2026 (the "Effective Date"), NHC/OP, L.P., a Delaware limited partnership ("Buyer") and a wholly-owned subsidiary of National HealthCare Corporation ("NHC"), entered into a Purchase and Sale Agreement (the "Agreement") with National Health Corporation, a Tennessee corporation ("Seller"), to purchase from Seller the land, buildings, and other specified assets of Seller's portfolio of five skilled nursing facilities, four of which are located in Tennessee and the other is located in South Carolina (the "Facilities," and, collectively with the other assets to be purchased and sold, the "Portfolio Assets"). The Facilities are currently managed by subsidiaries of NHC (together, "Managers") under management agreements with Seller (collectively, the "Management Agreements"). The purchase and sale of the Portfolio Assets and other transactions contemplated by the Agreement are referred to herein as the "Transaction." The purchase price for the Portfolio Assets is $50.5 million, subject to adjustment to incorporate the net book value of certain of Seller's assets and liabilities related solely to the Facilities and which are being purchased by Buyer, and an offset for unpaid management fees owed by Seller to Managers, in each case as set forth in the Agreement (the "Purchase Price"), and is payable at the closing of the Transaction. The closing of the Transaction is subject to Buyer obtaining financing for the Purchase Price that is acceptable to Buyer, if Buyer determines it will seek financing.

The Agreement provides for an inspection period for Buyer, which expires on the earlier of June 16, 2026 or the closing date of the Transaction (the "Inspection Period"), during which Buyer has the right to terminate the Agreement for any reason in its sole discretion. In the event that the closing of the Transaction has not occurred on or before the date that is nine months following June 1, 2026, either party shall have the right to terminate the Agreement. The Agreement provides that Buyer will make a deposit of $750,000 toward the Purchase Price (the "Deposit") within three business days after the Effective Date. The Deposit is refundable to Buyer if Buyer elects to terminate the Agreement during the Inspection Period and will become non-refundable to Buyer after the expiration of the Inspection Period, except as otherwise provided in the Agreement.

The Agreement also provides for the establishment of an escrow fund at the closing of the Transaction, with $2.0 million of the Purchase Price deposited with a third-party escrow agent (the "Escrow Fund"). The Escrow Fund will be available for a period of 12 months following the closing to compensate Buyer for indemnification claims arising under or pursuant to the terms of the Agreement as set forth therein. Any portion of the Escrow Fund remaining after the 12-month period will be distributed to Seller.

The Transaction is expected to close in the second quarter of 2026, subject to various closing conditions as set forth in the Agreement, including, but not limited to, receipt of government authorizations for the transfer of operating licenses for the Facilities. Notwithstanding the foregoing, the Agreement provides that Buyer may elect (and Seller shall not unreasonably refuse) to consummate the Transaction prior to receipt of such government authorizations and the parties will enter into an appropriate interim management/lease arrangement. There can be no assurances that the closing conditions will be satisfied or that the Transaction will be consummated on the terms or timeline described herein or at all, or that NHC and/or its affiliates will realize the expected benefits of the transaction in part or at all.

As discussed above, Seller and Managers are party to the Management Agreements. At the closing of the Transaction, the Management Agreements will be terminated. Additional information regarding the Management Agreements and unpaid management fees due from Seller is set forth in Notes 3 and 17 to the consolidated financial statements included in NHC's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC") on February 26, 2026 (the "Annual Report").

Seller, which is wholly owned by the National Health Corporation Leveraged Employee Stock Ownership Plan (the "ESOP"), was formed in 1986 and serves as NHC's administrative services affiliate and contractor. All of the personnel conducting NHC's business, including NHC's executive management team, are employees of Seller and may have ownership interests in Seller only through their participation as employees in the ESOP. Seller is a stockholder of NHC and, as previously reported, as of March 13, 2026, owned 1,030,887 shares of NHC's common stock, or approximately 6.6% of the outstanding shares of NHC's common stock. An executive officer of NHC serves on Seller's board of directors as set forth in NHC's proxy statement for the 2026 annual meeting of stockholders of NHC, filed with the SEC on April 2, 2026 (the "Proxy Statement"), and a director of NHC serves as a trustee of the ESOP. Additional information about the relationships between Seller and NHC is set forth in Note 17 to the consolidated financial statements included in the Annual Report and in the Proxy Statement.

The audit committee of the board of directors of NHC formed a special subcommittee of non-interested directors to review, evaluate, and approve the Transaction. The special subcommittee unanimously approved the Transaction.

The foregoing summary of the terms of the Agreement is qualified in its entirety by the full text of the Agreement, a copy of which is filed as Exhibit 10.1 to this report and is incorporated by reference herein. The representations, warranties and covenants set forth in the Agreement have been made only for the purposes of the Agreement and are solely for the benefit of the parties to the Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures, may have been made for the purposes of allocating contractual risk between the parties to the Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the Agreement is only to provide investors with information regarding the terms of the Transaction, and not to provide investors with any other factual information regarding the parties or their respective businesses and should be read in conjunction with the disclosures in NHC's periodic reports and other filings with the SEC.

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