AGREEMENT REGARDING LEASES
Exhibit 10.247
EXECUTION VERSION
This Agreement Regarding Leases (this “Agreement”) is entered into effective as of December 1, 2020 (the “Effective Date”), by and among ADK Georgia, LLC (“Landlord”), 0000 Xxxxxxxxx Xxxxxx Associates, L.P. (“Xxxx Tenant”), 0000 Xxxxxx Xxxxxxx Xxxx Associates, L.P. (“Powder Springs Tenant”, together with Xxxx Tenant, “Tenants”), Wellington Healthcare Services II, L.P. (“Guarantor”), and Xxxxxxx Court Associates, LLC (“Pledgor”, together with Guarantor, “Pledgors”). Landlord, Tenants, and Pledgors are sometimes referred to collectively herein as the “Parties”. Tenants, Pledgors, together with their affiliates, and their respective shareholders, partners, members, managers, officers, directors and employees thereof, are sometimes referred to collectively herein as the “Wellington Parties”.
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EXECUTION VERSION
2.Transition of Facilities. Provided that the Georgia Department of Community Health (“DCH”) has approved the Applications (as defined herein), possession, custody, control, and operation of the Facilities shall be transitioned (the “Transition”) to Landlord or Landlord’s designee(s) at 12:01 a.m. on January 1, 2021 or such other date as the Parties agree to in writing (the “Transition Date”) pursuant to the terms and provisions of those certain Operations Transfer Agreements (the “OTAs”) Landlord (or Landlord’s designee(s)) and Tenants have entered into contemporaneous with execution of this Agreement. On or before December 2, 2020, Landlord or its designee(s) shall file Change in Ownership Applications (the “Applications”) with DCH seeking to have the license to operate the Facilities and any Medicaid and Medicare Provider Agreements for the Facilities transferred to Landlord or its designee(s). Tenants shall cooperate with and assist Landlord in completing and filing the Applications. Upon the occurrence of the Transition, the Leases, Guarantees, Pledge Agreements, and Subordination Agreements shall be deemed terminated without further action by the Parties. In order to assist Landlord with collecting the Accounts Receivable in accordance with this Agreement, the Security Agreements shall remain in full force and effect notwithstanding any other provision of this Agreement to the contrary. Notwithstanding any provision of this Agreement to the contrary, no event that is conditioned on the occurrence of the Transition Date shall be effective until such time as: (a) DCH approves the transition of the Facilities; and (b) the Transition has occurred.
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4.Transfer of Cash & Accounts Receivable; Cooperation. On the Transition Date: (a) Tenants shall pay all cash on hand at the Facilities (subject to the exception below at the end of this Section) over to Landlord and shall irrevocably transfer and assign to Landlord all accounts receivable relating to the Facilities as of the Transition Date (the “AR”); and (b) Landlord, Tenants, and the applicable depository institution(s) utilized by Tenants shall enter into mutually agreeable and commercially reasonable Deposit Account Control Agreements with respect to all bank accounts of the Tenants that receive AR remittances from payors. Tenants shall provide reasonable cooperation to Landlord in collecting the AR, including, without limitation, by performing the following acts:
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Wiring to Landlord each Friday by 5 p.m. Eastern Standard Time, pursuant to written account instructions Landlord delivers to Tenants, any funds received by Tenants on account of the AR; |
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Forwarding and endorsing over to Landlord (to an address specified by Landlord in writing) each Friday by 5 p.m. Eastern Standard Time any checks, negotiable instruments, or other things of value received by Tenants on account of the AR; |
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Providing Landlord access to all software, websites, and other books and records of Tenants needed to collect the AR, including, without limitation, Point Click Care, subject in all respects to the limitations, restrictions, terms and conditions set forth in user licenses and other agreements between Tenants and third-party owners, website hosts and other similar entities relating thereto; and |
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Providing Landlord with requested documents and information in Tenant’s possession or reasonable control regarding billing, including previous remittances, accounts receivable credits, medical review requests, and resident records. |
Notwithstanding the foregoing, Tenants shall retain the amount of cash needed to fund the final payroll to the Facilities’ employees for the period ending on the day immediately preceding the Transition Date, and shall fund such payroll in the ordinary course.
6.Bed Tax Indemnification. Landlord shall indemnify, defend and hold harmless the Wellington Parties from and against, and shall reimburse such parties for, any and all liabilities, obligations, losses, penalties, costs, charges, sanctions, judgments, claims, causes of actions, suits, damages and expenses actually incurred by the Wellington Parties (collectively, “Claims”) arising from or relating to any unpaid Nursing Home Provider Fees (i.e. so-called “bed taxes”) relating in any way to the Facilities for the period prior to and/or after the Effective Date, whether asserted by a future operator or manager of the Facilities, RHP, the State of Georgia, or any of its subdivisions.
If any action or proceeding shall be brought against any of the Wellington Parties by reason of any such Claims, Landlord, upon notice from any of the Wellington Parties, shall resist and defend such action or proceeding, at its sole cost and expense by counsel to be selected by Landlord but otherwise satisfactory to such Wellington Party in its reasonable discretion. Landlord or its counsel shall keep each Wellington Party fully apprised at all times of the status of such defense. If Landlord shall fail to defend such action or proceeding, such an Wellington Party may retain its own attorneys to defend or assist in
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EXECUTION VERSION
defending any such claim, action or proceeding, and Landlord shall pay the actual, customary and reasonable fees and disbursements of such attorneys. The terms and provisions of this Section shall not in any way be affected by the absence of insurance covering such occurrence or claim or by the failure or refusal of any insurance company to perform any obligation on its part. The provisions of this Section shall survive the expiration or earlier termination of this Agreement. Landlord shall not enter into any settlement of a Claim which would impose a monetary liability on a Wellington Party, without the written consent of the Wellington Party. The Wellington Party shall give prompt written notice to Landlord of any Claim for which it seeks indemnification hereunder, but delay in providing such notice shall not relieve Landlord of its indemnification obligations, except to the extent such delay materially prejudiced Landlord’s ability to defend such Claim.
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The failure of Tenants to perform any of their obligations under this Agreement where such failure continues for a period of ten (10) business days after Tenants receipt of written notice from Landlord; or |
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EXECUTION VERSION
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Either Tenant institutes or has instituted against Tenant or the Property any bankruptcy, reorganization, receivership, assignment for the benefit of creditors, conservatorship, custodianship, sequestration, or other similar judicial or non-judicial proceeding; or |
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The Transition Date has not occurred on or before February 28, 2021 for any reason other than a default by Landlord or Landlord’s designee(s) under this Agreement or the OTAs. |
a.Release of Landlord by Wellington. Provided that DCH has approved the transition of the Facilities and that Transition has occurred, effective as of the Transition, and excluding any obligations of Landlord under this Agreement and the OTAs, Tenants, on behalf of themselves and the other Wellington Parties, hereby irrevocably and unconditionally release, acquit, and forever discharge Landlord and its affiliated and related entities, assigns, and their respective shareholders, partners, members, managers, officers, directors and employees (collectively, the “Landlord Parties”) from any and all charges, complaints, claims, counterclaims, liabilities, demands, costs, losses, debts and expenses of any nature whatsoever (including attorneys’ fees and costs actually incurred), known or unknown, suspected or unsuspected, accrued or not accrued, whether in law or in equity, that existed from the beginning of time to the Transition Date.
b.Release of Wellington by Landlord. Provided that DCH has approved the transition of the Facilities and that Transition has occurred, effective as of the Transition, and excluding any obligations of Wellington under this Agreement and the OTAs, Landlord, on behalf of itself and the other Landlord Parties irrevocably and unconditionally releases, acquits, and forever discharges the Wellington Parties from any and all charges, complaints, claims, liabilities, demands, costs, losses, debts, and expenses of any nature whatsoever (including attorneys’ fees and costs actually incurred), known or unknown, suspected or unsuspected, accrued or not accrued, whether in law in equity, that existed from the beginning of time to the Transition Date.
12.Non-Disparagement. Landlord, for itself and for the Landlord Parties, and Wellington, for itself and the other Wellington Parties, mutually agree that neither shall knowingly or intentionally disparage the other, or knowingly or intentionally cause the other to be placed in a false or negative light, in any context or forum, including through in-person, telephonic, or electronic communications, or through online postings, regardless of whether made anonymously or through a screenname. In the event either the Landlord Parties or the Wellington Parties are asked about the facts and circumstances surrounding termination of the Leases and feels compelled to answer such questions, the Landlord parties or the applicable Wellington Party, as applicable, shall state only that the Leases were terminated and both parties have reached a consensual resolution concerning such termination, or words of similar effect.
13.Non-Reliance. The Parties agree, represent and warrant that, in entering into this Agreement, they have not relied upon any oral or written information or representations, other than the express representations contained in this Agreement.
14.Integration of Entire Agreement. This Agreement and the other written agreements expressly referenced herein contain the entire understanding and complete agreement of the Parties with respect to the subject matter hereof and thereof, and all understandings and agreements, if any, previously reached among the Parties related to this Agreement and said other agreements are merged herein and therein. No amendment or modification of this Agreement shall be valid or binding upon the Parties unless made in writing and executed by all Parties.
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EXECUTION VERSION
15.Choice of Law and Venue; Interpretation. This Agreement shall be governed by and construed according to the substantive law of the State of Georgia without regard to its conflicts of law doctrine. Any dispute arising out of or relating to this Agreement shall be brought in a court of competent jurisdiction within the State of Georgia. Each party consents to personal jurisdiction before such court. Both parties shall be deemed to have had an equal role in the preparation of this Agreement, such that the Agreement shall not be construed against either party as the drafter of the same.
The remainder of this page is intentionally blank. Signatures follow on the next page.
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EXECUTION VERSION
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first written above.
LANDLORD: |
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ADK Georgia, LLC |
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Xxxxx Xxxxxxxx |
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Authorized Signatory |
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TENANTS: |
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0000 Xxxxxx Xxxxxxx Xxxx Associates, L.P. |
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/s/Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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President |
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0000 Xxxxxxxxx Xxxxxx Associates, L.P. |
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/s/Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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President |
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GUARANTOR: |
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Wellington Healthcare Services II, L.P |
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/s/Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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President |
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PLEDGOR: |
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Xxxxxxx Court Associates, LLC |
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/s/Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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President |
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EXECUTION VERSION
LANDLORD: |
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ADK |
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/s/ Xxxxx Xxxxxxxx |
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Xxxxx Xxxxxxxx |
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Authorized Signatory |
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TENANTS: |
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0000 Xxxxxx Xxxxxxx Xxxx Associates, L.P. |
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By: |
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/s/Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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President |
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0000 Xxxxxxxxx Xxxxxx Associates, L.P. |
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By: |
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/s/Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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President |
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GUARANTOR: |
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Wellington Healthcare Services II, L.P. |
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/s/Xxxxx X. Xxxxxxx |
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Xxxxx X. Xxxxxxx |
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President |
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PLEDGOR: |
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Xxxxxxx Court Associates, LLC |
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12/1/2020, 6:25 PN
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