American Renal Associates Holdings, Inc. (Form: 8-K, Received: 03/27/2019 16:20:47)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 21, 2019

American Renal Associates Holdings, Inc.

(Exact name of registrant as specified in its charter)



Delaware	001-37751	27-2170749
(State or other jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)



500 Cummings Center, Suite 6550 Beverly, Massachusetts		01915
(Address of registrant’s principal executive office)		(Zip code)

(978) 922-3080

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 203.425)



☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).



☒	Emerging growth company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☒




Item 4.02	Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On March 21, 2019, the Board of Directors (the “Board”) of American Renal Associates Holdings, Inc. (the “Company”) concluded that the Company’s previously issued consolidated financial statements and other financial data for the fiscal years ended December 31, 2014, 2015, 2016 and 2017 contained in its Annual Reports on Form 10-K for the years ended December 31, 2016 and 2017, and its condensed consolidated financial statements for the quarters and year-to-date periods ended March 31, June 30 and September 30, 2016; March 31, June 30 and September 30, 2017; and March 31, June 30 and September 30, 2018 contained in its Quarterly Reports on Form 10-Q (collectively, the “Non-Reliance Periods”) should be restated and should no longer be relied upon for the reasons described below. The Board also determined that the Company’s disclosures related to such financial statements and related communications issued by or on behalf of the Company with respect to the Non-Reliance Periods, including management’s assessment of internal control over financial reporting, should no longer be relied upon. The determination by the Board was made upon the recommendation of the Audit Committee (the “Audit Committee”) of the Board as a result of the review described below.

As previously disclosed, in October 2018, the Staff of the Securities and Exchange Commission (“SEC”) requested that the Company voluntarily provide documents and information relating to certain revenue recognition, collections and related matters. Following receipt of the SEC request, the Company responded by producing documents and information to the Staff and expects to continue to cooperate with the SEC by providing additional documents and information to the Staff in the future. In addition, as previously disclosed in the Company’s Current Report on Form 8-K filed March 8, 2019, the Audit Committee began an examination of the Company’s revenue recognition methodology and related accounting matters, such as internal control over financial reporting related to revenue recognition and related matters, with the assistance of legal counsel that reports to the Audit Committee, as well as independent accounting advisors retained by the Audit Committee’s counsel.

The Audit Committee’s review is continuing. The principal findings to date include the following:

•

In recording revenue based on expected payments from third-party payers during the Non-Reliance Periods, the Company did not appropriately reconcile its contractual allowance estimates for discounts and price concessions with cash subsequently received in respect of prior period patient claims. In addition, the Company did not record a reserve for uncollectible accounts across all of its payer categories during the Non-Reliance Periods. Based on its review to date, the Company currently estimates that the cumulative, net impact of these matters on operating income and income before income taxes over the Non-Reliance Periods as a whole will be between negative $5 million and positive $5 million. Consistent with the Company’s historical reporting convention, these operating income and income before income tax estimates are presented before net income attributable to noncontrolling interests. This current cumulative estimate reflects an estimated impact on operating income and income before income taxes of:


•	negative $13-23 million for the fiscal year ended December 31, 2018, which has not yet been reported, and negative $15-25 million for the previously reported nine months ended September 30, 2018;


•	negative $10-20 million for the fiscal year ended December 31, 2017;


•	positive $16-26 million for the fiscal year ended December 31, 2016;


•	positive $8-18 million for the fiscal year ended December 31, 2015; and


•	a relatively neutral impact for the fiscal year ended December 31, 2014.

The Company also estimates that the cumulative, net impact of these matters on operating income and income before income taxes for the fiscal year ended December 31, 2013 and prior fiscal years is a positive $14-24 million, which, before the effect of income tax expense (benefit) and change in the difference between the redemption value and estimated fair value of noncontrolling interests, would result in a reduction of accumulated deficit in an equivalent amount for the Non-Reliance Periods as a whole. In addition, the Company expects the impact on net accounts receivable as of the end of each fiscal year included in the Non-Reliance Periods to be material and estimates that the impact on net accounts receivable as of September 30, 2018, the last balance sheet reported by the Company, to be a positive $11-21 million. The Company has not yet finalized its quantification of the impact for the fiscal periods described above, nor has it finalized its quantification of the impact for individual fiscal quarters within the Non-Reliance Periods.

•

In addition, the Audit Committee continues to review additional accounting matters having to do with revenue recognition and accrued expenses and other current liabilities for the Non-Reliance Periods as they relate to revenue recognition. The Company continues to quantify the impact of these matters for the Non-Reliance Periods, which could be material to accrued expenses and other current liabilities and to operating income and income before income taxes for the Non-Reliance Periods. For the avoidance of doubt, any impact of these matters is not included in the estimated cumulative, net impact, or the impact for any of the fiscal periods described above, of expected corrections to contractual allowances and reserves for uncollectible accounts described above.


•	The findings of the Audit Committee’s review are also expected to require revised calculations of related metrics such as revenue per treatment and days sales outstanding throughout the Non-Reliance Periods. The restated amounts and metrics may have an ancillary impact on other reported amounts in the financial statements.

•

As a result of the foregoing, the Company’s consolidated financial statements for the Non-Reliance Periods were not prepared in accordance with generally accepted accounting principles (“GAAP”) and should not be relied upon. In addition, the Company’s lack of adequate internal control over financial reporting relating to these matters for the Non-Reliance Periods constituted one or more material weaknesses in internal control over financial reporting.


•	The scope of the Audit Committee’s review does not extend to the Company’s processes for the recording of cash in the Company’s financial statements. However, at this time, the Company has no reason to believe that cash has not been accurately recorded on a consolidated basis or at the clinic level.

The preliminary findings described above:


•	are solely based on a preliminary analysis provided to the Company by the Audit Committee and are subject to further analysis by the Audit Committee and its advisors, the Company and the Company’s independent registered public accounting firm; and


•	have not yet been verified or confirmed by the Company’s independent registered public accounting firm, and, therefore, no assurances can be provided by the Company that these findings will not change.

As the Company previously announced, the Company has delayed the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 Form 10-K”). The Company intends to file restated results for the Non-Reliance Periods as soon as practicable.

The Company is evaluating the impact of the matters described above on its internal control over financial reporting and disclosure controls and procedures and, as stated above, expects to report one or more material weaknesses in internal control over financial reporting related to these matters and to report that its internal control over financial reporting and disclosure controls and procedures were not effective as of the end of the Non-Reliance Periods, as applicable, as well as in subsequent periods until such material weakness or weaknesses are remediated. The Company will continue to evaluate and implement remedial measures to address any material weaknesses identified by management and by the review.

The Board, the Audit Committee and the Company’s management have discussed the matters disclosed in this Item 4.02(a) on Form 8-K with the Company’s independent registered public accounting firm.




Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Resignation of Jason Boucher as Chief Financial Officer

On March 27, 2019, the Company announced that Jason Boucher has resigned as the Company’s Vice President and Chief Financial Officer, effective March 26, 2019.

On March 26, 2019, Mr. Boucher entered into a Separation Agreement with the Company in connection with his departure from the Company (the “Separation Agreement”). As part of the Separation Agreement, Mr. Boucher has agreed to cooperate with and provide consulting services as reasonably requested by the Company following the effective date of his resignation. In addition, the Separation Agreement provides that during the six-month period following the effective date of his separation, Mr. Boucher will receive salary continuation payments at the reduced rate of $200,000 per annum (representing 50% of his current

salary rate) and will be eligible to participate in the Company’s group health plans at the Company’s expense (or, at the Company’s option, be reimbursed for the cost of healthcare benefit coverage). These payments and benefits are subject to the terms of Mr. Boucher’s Separation Agreement, including his compliance with certain undertakings. Mr. Boucher has also agreed that all of his outstanding equity awards (including, without limitation, his shares of unvested restricted stock and any vested or unvested stock options) will be forfeited to the Company without payment of consideration.

A copy of the Separation Agreement is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference. The foregoing description of the Separation Agreement does not purport to be complete and is qualified by reference to the full text of the Separation Agreement.

Appointment of Mark Herbers as Interim Chief Financial Officer

In connection with the appointment of Mr. Herbers as Interim Chief Financial Officer and Interim Chief Accounting Officer, the Company entered into an engagement letter, dated as of March 21, 2019 (the “Engagement Letter”), with AP Services, LLC (“APS”), an affiliate of AlixPartners, LLP, where Mr. Herbers has been employed since 2014. Pursuant to the Engagement Letter, Mr. Herbers will continue to be employed by APS during the term of his service to the Company and will not receive any compensation directly from the Company or participate in any of the Company’s employee benefit plans. The Company will instead pay APS an hourly rate of $850 per hour for the services provided by Mr. Herbers and will reimburse APS for reasonable out-of-pocket expenses.

The Engagement Letter may be terminated by either party at any time by written notice to the other party, subject to the payment of fees and expenses incurred by APS through the effective date of the termination. The Engagement Letter also contains certain covenants, including a one-year non-solicitation provision applicable to the Company with respect to the solicitation of APS employees, subject to certain exceptions as provided in the Engagement Letter.

A copy of the Engagement Letter is filed as Exhibit 10.2 to this Form 8-K and is incorporated herein by reference. The foregoing description of the Engagement Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Engagement Letter.

Mr. Herbers, 64, is currently employed as a senior Director with APS in the Financial Advisory Services practice, where he has been employed since 2014. Mr. Herbers has provided financial leadership and management to various healthcare providers and health systems. His expertise includes improving revenue cycle performance, addressing regulatory, reimbursement, financing and strategic planning matters and physician relations. Prior to joining APS, he served at FTI Consulting and its predecessor Cambio Health Solutions from 2004 to 2014, ultimately serving as Managing Director. Mr. Herbers has also served as President at Progressive Financial Services from 2002-2003, Director in Risk Advisory Services, Healthcare at KPMG from 1999-2002, Chief Financial Officer at Columbia LaGrange Memorial Hospital from 1997-1999, Chief Operating Officer and Chief Financial Officer at In Home Health Care from 1997-1998 and Chief Financial Officer at Silver Cross Hospital from 1993-1996. Prior to that time, Mr. Herbers held a number of other finance and accounting positions. Mr. Herbers received an M.B.A. from Washington University in St. Louis and a B.A. from Georgetown University.




Item 9.01.	Financial Statements and Exhibits.



Exhibit Number		Description
10.1		Separation Agreement between Jason Boucher and the Company, dated March 26, 2019.
10.2		Engagement letter between the Company and AP Services, LLC, dated as of March 21, 2019.
99.1		Press release, dated March 27, 2019.

Forward-Looking Statements

Statements in this Current Report on Form 8-K that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Audit Committee’s review and related matters, are based upon currently available information, operating plans and projections about future events and trends. Terminology such as “anticipate,” “believe,” “contemplate,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “project,” “seek,” “should,” “strategy,” “target” or “will” or variations of such words or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include: that the Audit Committee’s review of the matters described above is ongoing, including with respect to the amounts at issue and the periods to which they relate; that the Audit Committee’s review of the matters described above may take longer to complete than currently anticipated; that the Company may take longer to file its 2018 Form 10-K than currently anticipated; that the 2018 Form 10-K expects to include restatements of the Company’s financial statements for prior periods; and that the Company expects to report one or more material weaknesses in the Company’s internal control over financial reporting and to conclude that its disclosure controls and procedures required by the Securities Exchange Act of 1934 were not effective.

As discussed above, the Company’s 2018 Form 10-K is expected to include information about previously reported periods that varies materially from the information provided in the past with respect to some or all of those periods, and the 2018 Form 10-K is expected to include information that varies, possibly materially, from expectations for the fourth quarter and year ended December 31, 2018. For additional information and other factors that could cause the Company’s actual results to materially differ from those set forth herein, please see the Company’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	AMERICAN RENAL ASSOCIATES HOLDINGS, INC.

Dated: March 27, 2019	By:	/s/ Joseph A. Carlucci
	Name:	Joseph A. Carlucci
	Title:	Chief Executive Officer and Chairman of the Board of Directors

SEPARATION AGREEMENT

This Separation Agreement (the “ Agreement ”) is made this 26 ^th day of March, 2019 by and among Jason Boucher (“ Boucher ”), American Renal Management LLC, American Renal Holdings Inc., American Renal Associates, LLC, and their operating companies, affiliates, subsidiaries, representatives, shareholders, directors, successors, and assigns (collectively referred to as the “ Company ”).

WHEREAS, Boucher is currently employed by the Company as Vice President, Chief Financial Officer and Treasurer;

WHEREAS, Boucher and the Company are parties to an Employment Agreement dated as of August 1, 2018 (the “ Employment Agreement ”) and a Vice Presidents, Regional Directors, Directors & Officers Non-Solicitation, Non-Competition and Confidentiality Agreement attached as Exhibit A thereto (the “ NDA ); and

WHEREAS, Boucher wishes to step down from his employment with the Company.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein set forth, Boucher and the Company covenant and agree as follows:

1. Resignation from Employment . Boucher will resign as an employee, as Vice President, Chief Financial Officer and Treasurer and from all other offices and positions he holds with the Company and its affiliates effective as of March 26, 2019 (the “ Separation Date ”). On or promptly following the Separation Date, the Company shall pay Boucher all of his unpaid salary (including unused paid time off) through and including the Separation Date, less all required withholding taxes. Boucher shall also be entitled to the reimbursement of any business expenses properly incurred prior to the Separation Date and supported in accordance with the Company’s expense reimbursement policies.

2. Salary Continuation Payments . Contingent on Boucher’s execution of this Agreement, and continued compliance with this Agreement and the NDA, the Company will continue to pay Boucher salary continuation payments following the Separation Date at a reduced rate of $200,000 per annum, corresponding to 50% of his base salary rate as in effect immediately prior to the

Separation Date, through the date that is six months following the Separation Date, less all required withholding taxes (such payments, the “ Salary Continuation Payments ” and such period, the “ Salary Continuation Period ”). The Salary Continuation Payments shall be paid through a series of payments aligned with the Company’s pay periods.

3. Health Insurance . Contingent on Boucher’s execution of this Agreement, and continued compliance with this Agreement and the NDA, to the extent permissible under the plans, Boucher shall be eligible to participate in the Company’s group health plans at the Company’s expense (or, at the Company’s option, shall be reimbursed for the cost of such coverage) until the earlier of (i) the end of the Salary Continuation Period, or (ii) such time as he is eligible to be covered by comparable benefits of a subsequent employer or otherwise (such as Medicare) (the “ Coverage Continuation Period ”). Boucher shall cooperate with the Company in complying with the requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for his extended health insurance coverage. Boucher agrees to notify the Company promptly if and when he begins employment with another employer and if and when he becomes eligible to participate in any health benefit plans, programs or arrangements.

4. Incentive Compensation . Boucher acknowledges and agrees that he will not be entitled to receive any additional annual cash incentive compensation or other bonus or incentive compensation amounts for his past or future services for the Company, including, without limitation, with respect to the fiscal 2018 and 2019 years. Boucher further acknowledges that any equity or other incentive award payments previously realized by Boucher will remain subject to potential clawback and repayment following the Separation Date to the extent provided under any existing applicable Company policy, Section 5.2 of the Employment Agreement or applicable law.

5. Restricted Stock and Stock Options . Boucher agrees that all of his outstanding equity awards (including, without limitation, his unvested shares of restricted stock and any vested or unvested stock options under the American Renal Associates Holdings, Inc. 2016 Omnibus Incentive Plan (the “ 2016 Plan ”) and the 2010 American Renal Associates Holdings, Inc. Stock Incentive Plan (the “ 2010 Plan ”)) will be forfeited to the Company as of the Separation Date without payment of consideration.

6. Consultancy After the Separation Date . Following the Separation Date, Boucher agrees to act as a consultant to the Company as reasonably requested by the Company on an “as

needed” basis. Boucher agrees to make himself available to perform such services in person at the Company’s offices, off site, via email, or by telephone. However, after the Separation Date, Boucher will no longer have a permanent office at the Company and he will not report to the Company’s offices unless so requested by Joseph Carlucci for the purposes of carrying out Boucher’s consulting duties. Boucher’s duties during the Consultancy Period shall be directed by Joseph Carlucci and shall include, but not be limited to, providing assistance to the Company in transitioning his role to a successor (including, without limitation, the Company’s Interim Chief Financial Officer), providing assistance to the Company in transitioning his role to other employees, and cooperating on matters related to Boucher’s employment. After the Separation Date, Boucher shall not be an officer, employee, or agent of the Company, and he agrees that he will not hold himself out as an employee, officer, or agent of the Company, and he shall have no authority to bind the Company. Boucher’s participation in any trade or other outside groups as a representative of the Company shall end on the Separation Date and shall not extend during the period he performs consulting services. The consideration set forth in this Agreement shall be sufficient to compensate Boucher for his work as a consultant pursuant to this paragraph 6 and, as such, he will not be entitled to additional pay. The Company will reimburse Boucher for all reasonable and necessary out-of-pocket expenses incurred by him in connection with his consulting services, provided that such expense reimbursements are in accordance with the Company’s expense reimbursement policy and are properly documented and accounted. Moreover, except as set forth in this Agreement, Boucher’s benefits shall cease on the Separation Date.

7. Covenant Not to Sue . This Agreement is intended by the parties to resolve, and shall resolve, any and all claims which Boucher has or may have related to his employment at the Company, from the beginning of time to the date he executes this Agreement. Boucher covenants not to sue or bring any legal proceeding against the Company related to the subject matter of the release contained in paragraph 14 below, except as set forth in paragraph 16 below. Further, Boucher agrees that he shall not be entitled to and waives and relinquishes any right to any monetary or other relief from any federal or state agency, or other entity, as a result of any charge or litigation brought against the Company, except as set forth in paragraph 16 below.

8. Non-Disparagement . Boucher shall not make, repeat or publish any disparaging or derogatory remarks concerning the Company, its business, its directors, its officers, its management or its employees, or otherwise take any action which might reasonably be expected to cause damage or harm to any of them. Nothing contained herein shall limit Boucher’s responsibility to speak

truthfully in the context of any investigation or legal proceeding, whether or not under oath at the time of such statement, in accordance with paragraph 16 below. Nor shall anything in this paragraph 8 or generally in this Agreement prohibit him or otherwise limit him from responding truthfully to disparaging statements made about him by the Company, its directors, its officers, its management or its employees.

9. Return of Documents and the Company Property . Boucher agrees that, on the Separation Date, he will immediately return to the Company any and all cell phones, keys, pass cards, documents, tapes, notes, computer files, equipment, furniture and other materials (and all copies) in his possession which are the property of the Company.

10. Confidential Information . “ Confidential Information ” as used herein means all information acquired by Boucher from the Company, its employees, its suppliers, its patients or customers, its agents or consultants, or others, during Boucher’s relationship with the Company, that relates to the present or potential businesses, products or services and operations or processes of the Company, as well as any other information as may be designated by the Company as confidential or that a reasonable person would understand from the circumstances of the disclosure to be confidential, including but not limited to, the name or address of any patient or customer of the Company or any physician or former physician affiliated with or negotiating with the Company. For avoidance of all doubt, Confidential Information shall not include information in the public domain (other than due to Boucher’s breach of his obligations regarding disclosure of such information). Boucher acknowledges and agrees that: (i) in the course of employment by the Company, Boucher created, used or had access to information and materials that concern the Company’s business; (ii) all Confidential Information is the property of the Company; (iii) the use, misappropriation, or disclosure of any Confidential Information would constitute a breach of trust and could cause serious and irreparable injury to the Company; and (iv) it is essential to the protection of the Company’s goodwill and maintenance of the Company’s competitive position that all Confidential Information be kept confidential. As a result, subject to paragraph 16 below, Boucher agrees not to disclose any Confidential Information to others or to use Confidential Information to Boucher’s own advantage or the advantage of others.

11. Non-Solicitation, Non-Competition, and Confidentiality . Boucher acknowledges his obligations concerning non-solicitation, non-competition and confidentiality. Specifically, he shall remain bound by and will continue to abide by the non-solicitation, non-competition and

confidentiality provisions pursuant to the NDA, and the Company’s obligation to provide to Boucher the consideration set in this Agreement shall be contingent on his compliance with the NDA (subject to the exceptions set forth in Article 8 of the Employment Agreement and paragraph 16 below). Notwithstanding the foregoing, Boucher hereby agrees that the restrictions set forth in clauses (i), (ii) and (iii) of Section 1.2 of the NDA related to solicitation, hiring or other actions with respect to Company employees shall not be limited to actions taken on behalf of or for the benefit of a competing dialysis facility/company (i.e., any such referenced actions will be prohibited regardless of whether the new employing or hiring entity is a competing dialysis facility/company).

12. Cooperation with Company . Boucher agrees to make himself available, upon reasonable notice, to assist the Company in any investigations or litigations that arise out of issues related to his employment. Nothing herein in any way requires Boucher to testify untruthfully in any proceeding.

13. Assignment . This Agreement and the rights hereunder are personal to Boucher and may not be transferred or assigned by Boucher at any time.

14. Release by Boucher . Boucher, for good and valuable consideration described above, the sufficiency of which is hereby acknowledged, does hereby for himself and his heirs, estates, executors, legatees, administrators, agents, representatives, attorneys, insurers and assigns, fully, forever, irrevocably and unconditionally, releases, remises and discharges C.P. Atlas Holding, Inc., American Renal Associates Holdings, Inc., American Renal Holdings Company, Inc., American Renal Associates, LLC, American Renal Holdings, Inc., American Renal Management LLC, such entities’ shareholders, and any of their respective affiliates, subsidiaries, parents, related or joint venture entities, and any of their respective predecessors, successors, and assigns, and any of their respective officers, directors, employees, agents, advisory entities, representatives, attorneys, lenders, insurers and assigns, from any and all manner of claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, dues, sums of money owed, costs, losses, accounts, reckonings, covenants, contracts, controversies, agreements, promises, leases, doings, omissions, damages, executions, obligations, liabilities and expenses (including attorneys’ fees and costs), of every kind and nature whatsoever, known or unknown, either at law or in equity, based upon, arising out of or in connection with any circumstance, matter or state of fact up to the date of this Agreement, including but not limited to, claims or rights related to the Employment Agreement, the 2010 Plan or the 2016 Plan (or any award agreements under such plans), under any federal, state, or local statutory and/or

common law in any way regulating or affecting the employment relationship, including but not limited to claims under Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act, the Americans with Disabilities Act, the Equal Pay Act, the Rehabilitation Act of 1973, the Employee Retirement Income Security Act, the Occupational Safety and Health Act, the Workers’ Adjustment and Retraining Notification Act, the Massachusetts Wage Act (Mass. Gen. L. c. 149, section 148 et seq.), the Massachusetts overtime pay law (Mass. Gen. L. c. 151, section 1A, et seq.), and the Massachusetts anti-discrimination law (Mass. Gen. L. c. 151B), each as amended. Nothing in this Agreement is intended to constitute an unlawful release or waiver of Boucher’s rights under any laws. Notwithstanding the foregoing, this release does not include and will not preclude claims, actions, or rights arising after Boucher executes this Agreement or under or to enforce the terms of this Agreement.

15. Representations and Recitals . Boucher represents that:

(a) The Company has advised him to consult with an attorney of his choosing concerning the rights waived in this Agreement. He has carefully read and fully understands this Agreement, and is voluntarily entering into this Agreement.

(b) He understands that the effect of the release contained in paragraph 14 is that he gives up any claims he may have against the Company, including but not limited to any other law and claim for unpaid wages under Massachusetts law, except as set forth in paragraph 16.

(c) He understands that he is receiving compensation and benefits pursuant to this Agreement that he would not otherwise be entitled to if he did not enter into this Agreement.

(d) He enters into this Agreement and waives any such rights knowingly and willingly, and in order to receive the consideration recited above.

16. Limitations .

(a) The Agreement does not preclude Boucher from filing a charge of discrimination with, or participating in or cooperating with an investigation by, the United States Equal Employment Opportunity Commission or the Massachusetts Commission Against Discrimination, but Boucher will not be entitled to, and expressly agrees to waive, any monetary or

other relief on the basis of or in connection with such a charge or investigation, including related court litigation.

(b) Nothing in this Agreement, or any other agreement between the parties, prohibits or is intended in any manner to prohibit, Boucher from reporting a possible violation of federal or other applicable law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under whistleblower provisions of federal law or regulation. This Agreement does not limit Boucher’s right to receive an award (including a monetary reward) for information provided to the SEC. Boucher does not need the prior authorization of anyone at the Company to make any such reports or disclosures, and he is not required to notify the Company that he has made such reports or disclosures.

(c) Nothing in this Agreement or any other agreement or policy of the Company is intended to interfere with or restrain the immunity provided under 18 U.S.C. § 1833(b) for confidential disclosures of trade secrets to government officials, or lawyers, solely for the purpose of reporting or investigating a suspected violation of law; in a sealed filing in court or other proceeding; or in connection with a lawsuit alleging retaliation for reporting a suspected violation of law.

17. Other Obligations . This Agreement does not release the Company from any right that Boucher has to indemnification by the Company and to directors and officers liability insurance coverage under the Company’s Bylaws.

18. Entire Agreement . This Agreement constitutes the entire agreement among the parties relating to Boucher’s employment and separation of employment with the Company. This Agreement supersedes and cancels any and all previous contracts, arrangements or undertakings, whether written or oral, with respect thereto, except as set forth in this Agreement. For avoidance of doubt, the restrictive covenants applicable to Boucher pursuant to the Employment Agreement and the NDA shall each remain in full force and effect.

19. Arbitration . Any controversy or claim arising out of or relating to this Agreement shall be resolved by binding confidential arbitration by a single arbitrator who is licensed to practice law in a state in the United States, to be held in Boston, Massachusetts, in accordance with the Employee Dispute Resolution Rules of the American Arbitration Association (or its successor rules). The

arbitrator shall have the discretionary authority to award attorneys’ and arbitrator’s reasonable fees and expenses and the costs of arbitration to the prevailing party. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator’s decision shall be in writing and shall include findings of fact and a statement of the law on which the decision is based.

20. Severability and Partial Invalidity . Each term, condition or provision of this Agreement shall constitute an independent clause or provision severable from the remainder of the terms, conditions or provisions. In the event any provision hereof is determined to be contrary to, prohibited by or invalid under applicable law or regulation, or otherwise deemed unenforceable for any reason whatsoever, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall remain fully valid and binding and shall be given full force and effect so far as possible.

21. Execution . This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, and all such counterparts together shall constitute but one and the same instrument.

22. Governing Law . This Agreement shall in all respects be interpreted, enforced, governed and construed by and under the laws of the Commonwealth of Massachusetts, without giving effect to the principles of conflict of laws.

23. Attorneys’ Fees . Each party shall bear his or its own attorneys’ fees and expenses.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, Boucher and the Company have caused this Agreement to be executed on the date written above.

/s/ Jason Boucher

JASON BOUCHER

AMERICAN RENAL MANAGEMENT LLC


By:	/s/ Joseph A. Carlucci

Its: Chief Executive Officer

AMERICAN RENAL HOLDINGS INC.


By:	/s/ Joseph A. Carlucci

Its: Chief Executive Officer

AMERICAN RENAL ASSOCIATES, LLC


By:	/s/ Joseph A. Carlucci

Its: Chief Executive Officer



Mr. Joseph A. Carlucci	March 21, 2019
CEO, Chairman and Co-Founder
American Renal Associates Holdings, Inc.
500 Cummings Center
Suite 6550
Beverly, MA 01915

Re: Agreement for the Provision of Interim Management Services

Dear Mr. Carlucci:

This letter, together with the attached Schedule(s) and General Terms and Conditions, sets forth the agreement (“Agreement”) between AP Services, LLC (“APS”), and American Renal Associates Holdings, Inc. (the “Company”) for the engagement of APS to provide interim management services to the Company.

All defined terms shall have the meanings ascribed to them in this letter and in the attached Schedule(s) and General Terms and Conditions. The Company and APS are each a “party,” and together the “parties.”

The engagement of APS, including any APS employees who serve in Executive Officer positions, shall be under the supervision of the Board of Directors of the Company.

Objectives and Tasks

Subject to APS's (i) confirmation that the Company has a Directors and Officers Liability insurance policy in accordance with Section 7 of the General Terms and Conditions regarding Directors and Officers Liability Insurance coverage, (ii) and a copy of the signed Board of Directors’ resolution (or similar document as required by the Company's governance documents) as official confirmation of the appointment, APS will provide Mark Herbers to serve as the Company’s Interim Chief Financial Officer ("CFO") and Chief Accounting Officer (CAO), reporting to the Company’s Chief Executive Officer and to the Program Management Office.. In addition to the ordinary course responsibilities of CFO and CAO, Mr. Herbers will work collaboratively with the senior management team, the Board of Directors and other Company professionals to assist the Company with the following:


•	Manage and provide direction for the Company’s finance function including, but not limited to, accounting, internal and external financial reporting (including applicable attestations and filings required for public registrants, and interface with and provide certificates to the Company’s auditors), treasury, tax, financial planning and analysis and internal audit administration.


•	Prepare budgets and 13-week cash forecasts and evaluate variances thereto.


•	Strengthen the Company’s core competencies in the finance organization, particularly cash management, planning, general accounting and financial reporting information management.


•	As requested, assist in the development of the Company’s revised business plan, and such other related forecasts as may be required by the Company’s lenders in connection with negotiations or by the Company for other corporate purposes.


•	Manage the Company’s process of preparing the restatement of previously issued financial statements, if and when determined to be so required.


•	Create and communicate materials for diligence purposes and together with the Company’s advisors, manage the flow of information in connection with any strategic alternatives.


•	Develop and enhance management and Board reporting packages.


•	As requested, communicate and/or negotiate with outside constituents including the Company’s banks and their advisers.


•	Assist the Company with such other matters as may be requested by the Company and are mutually agreeable.

Staffing

Louis Dudney will be the managing director responsible for the overall engagement.

Timing, Fees and Retainer

APS will commence this engagement on or about March 25, 2019 after receipt of a copy of the executed Agreement and confirmation of the Company’s compliance with the requirements set forth in the first paragraph of the Objective and Tasks section above.

The Company shall compensate APS for its services, and reimburse APS for expenses, as set forth on Schedule 1.

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If these terms meet with your approval, please sign and return a copy of this Agreement and wire transfer the amount to establish the retainer.

We look forward to working with you.

Sincerely yours,

AP SERVICES, LLC

/s/ Louis Dudney

Acknowledged and Agreed to:

AMERICAN RENAL ASSOCIATES HOLDINGS, INC.

By: /s/ Joseph A. Carlucci

Its: Chief Executive Officer

Dated: March 25, 2019

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Schedule 1

Fees and Expenses


1.	Fees: APS’ fees will be based on the hours spent by APS personnel at APS’ hourly rates, which are:



Managing Director	US$990 – US$1,165
Director	US$775 – US$945
Senior Vice President	US$615 – US$725
Vice President	US$440 – US$600
Consultant	US$160 – US$435
Paraprofessional	US$285 – US$305

APS reviews and revises its billing rates on January 1 of each year.

For this engagement, Mark Herbers’ hourly rate is US$850.


2.	Expenses: In addition to the Fees set forth in this Schedule, the Company shall pay directly, or reimburse APS upon receipt of periodic billings, for all reasonable out-of-pocket expenses incurred in connection with this assignment, such as travel, lodging and meals.


3.	Retainer: AlixPartners does not require a retainer in connection with this engagement.


4.	Payment: APS will submit monthly invoices for services rendered and expenses incurred. All invoices shall be due and payable within thirty (30) days of the date of invoice. No discount is provided for prompt payment, and none shall be taken, but interest on any invoices paid late shall accrue in accordance with the General Terms and Conditions.

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Data Protection Schedule

Processing, Personal Data and Data Subjects

In connection with this Agreement, APS will not be receiving any Personal Data subject to the General Data Protection Regulation (( EU ) 2016/679 ) (the “GDPR”) or any applicable legislation implementing any provisions of the GDPR as may be enacted time to time (together the “Data Protection Legislation”).

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AP Services, LLC

General Terms and Conditions

These General Terms and Conditions (“Terms”) are incorporated into the Agreement between the Company and AlixPartners to which these Terms are attached. In case of conflict between the wording in the letter and/or schedule(s) and these Terms, the wording of the letter and/or schedule(s) shall prevail.



Section 1. Company Responsibilities The Company will undertake responsibilities as set forth below: 1. Provide reliable and accurate detailed information, materials, documentation and 2. Make decisions and take future actions, as the Company determines in its sole discretion, on any recommendations made by APS in connection with this Agreement. APS’s delivery of the services and the fees charged are dependent on (i) the Company’s timely and effective completion of its responsibilities; and (ii) timely decisions and approvals made by the Company’s management. Section 2. Billing, Payments and Taxes Billing and Payments. All payments to be made to APS shall be due and payable within thirty (30) days upon delivery of invoice via wire transfer to APS’s bank account, as shown on the invoice. All amounts invoiced are based on services rendered and reasonable, duly-documented out-of-pocket expenses incurred to date, and are not contingent upon future services or Work Product (as defined below), or the outcome of any case or matter. “Fees,” as used in this Agreement, shall include all amounts payable by the Company to APS in accordance with Schedule 1, including any success fee or break fee, but excluding reimbursable expenses. If any Fees and/or expenses are not paid by the Company on the relevant due date, APS shall be entitled to charge interest on the unpaid amount until payment is made in full. Interest shall be calculated using the lesser of (i) one percent (1%) per month (12% per annum) or (ii) to the maximum extent permitted by law. Taxes. APS’s fees are exclusive of taxes or similar charges, which shall be the responsibility of the Company (other than taxes imposed on APS’s income generally). If APS’s fees are subject to any taxes, such as State sales tax, Goods and Services Tax/Harmonized Sales Tax or Value Added Tax, then APS will include such taxes on its invoices as separate line items. Section 3. Relationship of the Parties The parties intend that an independent contractor relationship will be created by the Agreement. As an independent contractor, APS will have complete and exclusive charge of the management and operation of its business, including hiring and paying the wages and other compensation of all its employees and agents, and paying all bills, expenses and other charges incurred or payable with respect to the operation of its business. Employees of APS will not be entitled to receive from the Company any vacation pay, sick leave, retirement, pension or social security benefits, workers’ compensation, disability, unemployment insurance benefits or any other employee benefits. APS will be responsible for all employment, withholding, income and other taxes incurred in connection with the operation and conduct of its business. APS is not an accounting firm and does not give accounting advice or guidance. While APS’s work may involve analysis of accounting, business and other related records, this engagement does not constitute an audit in accordance with either generally accepted auditing standards or the standards of the Public Company Accounting Oversight Board or any other similar governing body. APS is not authorized to practice law or provide legal advice. No services provided under this Agreement are intended to be, nor should be construed to be, legal services.		Section 4. Confidentiality Each party shall use reasonable efforts, but in no event less effort than it would use to protect its own highly confidential information, to keep confidential all non-public confidential or proprietary information obtained from the other party during the performance of APS’s services hereunder (the “Confidential Information”), and neither party will disclose any Confidential Information to any other person or entity except that the Company may share Confidential Information with its affiliates and its and their respective employees, officers, directors and advisors. “Confidential Information” includes the terms of this Agreement, non-public confidential and proprietary data, plans, reports, schedules, drawings, accounts, records, calculations, specifications, flow sheets, computer programs, source or object codes, results, models or any work product relating to the business of either party, its subsidiaries, distributors, affiliates, vendors, customers, employees, contractors and consultants. The foregoing is not intended to prohibit, nor shall it be construed as prohibiting, APS from making such disclosures of Confidential Information that APS reasonably believes are required by law or any regulatory requirement or authority, to clear client conflicts. APS may also disclose Confidential Information to its partners, directors, officers, employees, independent contractors and agents who have a need to know the Confidential Information as it relates to the services being provided under this Agreement, provided APS is responsible for any breach of these confidentiality obligations by any such parties. APS may make reasonable disclosures of Confidential Information to third parties, such as the Company’s suppliers and/or vendors, in connection with the performance of APS’s obligations and assignments hereunder, provided APS reasonably believes that such third party is bound by confidentiality obligations. In addition, APS will have the right to disclose to any person that it provided services to the Company or its affiliates and a general description of such services, but shall not provide any other information about its involvement with the Company. The obligations of the parties under this Section 4 shall survive the end of any engagement between the parties for a period of three (3) years. Work Product (as defined in Section 5) may contain APS proprietary information or other information that is deemed to be Confidential Information for purposes of this Agreement. Therefore, the parties acknowledge and agree that (i) all information (written or oral), including advice and Work Product (as defined in Section 5) generated by APS in connection with this engagement is intended solely for the benefit and use of the Company in connection with this Agreement and (ii) no such information shall be used for any other purpose, disseminated to any third parties, or quoted or referred to with or without attribution to APS at any time in any manner or for any purpose without APS’s prior approval (not to be unreasonably withheld or delayed), except as required by law. Because of the nature of the services provided by APS, from time to time, APS professionals may concurrently represent clients that are adverse to each other, or which may be viewed by clients to be adverse. Despite any such concurrent representation, each APS team shall strictly preserve all client confidences, and not disseminate such information externally, except pursuant to the terms of this engagement letter, or to any APS professionals that are currently working for an entity adverse to the Company. The Company agrees that it does not consider such concurrent representation of the Company and any adversary to be inappropriate and, therefore, waives any objections to any such present or future concurrent representation.

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AP Services, LLC

General Terms and Conditions



Section 5. Intellectual Property All analyses, final reports, presentation materials, and other work product (other than any Engagement Tools, as defined below) that APS creates or develops specifically for the Company and delivers to the Company as part of this engagement (collectively known as “Work Product”) shall be owned by the Company and shall constitute Company Confidential Information as defined above. APS may retain copies of the Work Product and any Confidential Information necessary to support the Work Product subject to its confidentiality obligations in this Agreement. All methodologies, processes, techniques, ideas, concepts, know-how, procedures, software, tools, templates, models, utilities and other intellectual property that APS has created, acquired or developed or will create, acquire or develop (collectively, “Engagement Tools”), are, and shall be, the sole and exclusive property of APS. The Company shall not acquire any interest in the Engagement Tools other than a limited, worldwide, perpetual, non-transferable license to use the Engagement Tools to the extent they are contained in the Work Product. The Company acknowledges and agrees, except as otherwise set forth in this Agreement, that any Engagement Tools provided to the Company are provided “as is” and without any warranty or condition of any kind, express, implied or otherwise, including, implied warranties of merchantability or fitness for a particular purpose. Section 6. Framework of the Engagement The Company acknowledges that it is retaining APS solely to assist and advise the Company as described in the Agreement. This engagement shall not constitute an audit, review or compilation, or any other type of financial statement reporting engagement. Section 7. Indemnification and Other Matters The Company shall indemnify, hold harmless and defend APS and its affiliates and its and their partners, directors, officers, employees and agents (collectively, the “APS Parties”) from and against all claims, liabilities, losses, expenses and damages arising out of or in connection with the engagement of APS that is the subject of the Agreement. The Company shall pay damages and expenses as incurred, including reasonable legal fees and disbursements of counsel. If, in the opinion of counsel, representing both parties in the matter covered by this indemnification creates a potential conflict of interest, the APS Parties may engage separate counsel to represent them at the Company’s expense. In addition to the above indemnification, APS employees serving as directors or officers of the Company or affiliates will receive the benefit of the most favorable indemnification provisions provided by the Company to its directors, officers and any equivalently placed employees, whether under the Company’s charter or by-laws, by contract or otherwise. The Company shall specifically include and cover employees and agents serving as directors or officers of the Company or affiliates from time to time with direct coverage under the Company’s policy for liability insurance covering its directors, officers and any equivalently placed employees (“D&O insurance”). Prior to APS accepting any officer position, the Company shall, at the request of APS, provide APS a copy of its current D&O policy, a certificate(s) of insurance evidencing the policy is in full force and effect, and a copy of the signed board resolutions and any other documents as APS may reasonably request evidencing the appointment and coverage of the indemnitees. The Company will maintain such D&O insurance coverage for the period through which claims can be made against such persons. The Company disclaims a right to distribution from the D&O insurance coverage with respect to such persons. In the event that the Company is unable to include APS employees and agents under the Company’s policy or does not have first dollar coverage acceptable to APS in effect for at least $10 million (e.g., there are outstanding or threatened claims against officers and directors alleging prior acts that may give rise to a claim), APS may, at its option, attempt to purchase a separate D&O insurance policy that will cover APS employees		and agents only. The cost of the policy shall be invoiced to the Company as an out-of-pocket expense. If APS is unable or unwilling to purchase such D&O insurance, then APS reserves the right to terminate the Agreement. The Company’s indemnification obligations in this Section 7 shall be primary to, and without allocation against, any similar indemnification obligations that APS may offer to its personnel generally, and the Company’s D&O insurance coverage for the indemnitees shall be specifically primary to, and without allocation against, any other valid and collectible insurance coverage that may apply to the indemnitees (whether provided by APS or otherwise). APS is not responsible for any third-party products or services separately procured by the Company. The Company’s sole and exclusive rights and remedies with respect to any such third party products or services are against the third-party vendor and not against APS, whether or not APS is instrumental in procuring such third-party product or service. Section 8. Governing Law and Arbitration The Agreement is governed by and shall be construed in accordance with the laws of the State of New York with respect to contracts made and to be performed entirely therein and without regard to choice of law or principles thereof. Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration. Each party shall appoint one non-neutral arbitrator. The two party arbitrators shall select a third arbitrator. If within 30 days after their appointment the two party arbitrators do not select a third arbitrator, the third arbitrator shall be selected by the American Arbitration Association (AAA). The arbitration shall be conducted in New York, New York under the AAA’s Commercial Arbitration Rules, and the arbitrators shall issue a reasoned award. The arbitrators may award costs and attorneys’ fees to the prevailing party. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, APS may in its sole discretion proceed directly to a court of competent jurisdiction to enforce the terms of this Agreement for any claim (and any subsequent counter claim) against the Company relating to either (i) the non-payment of Fees or expenses due under this Agreement, or (ii) the non-performance of obligations under Section 7. In any court proceeding arising out of this Agreement, the parties hereby waive any right to trial by jury. Section 9. Termination and Survival The Agreement may be terminated at any time by written notice by one party to the other; provided, however, that notwithstanding such termination APS will be entitled to any Fees and expenses due under the provisions of the Agreement (for fixed fee engagements, fees will be pro rata based on the amount of time completed). Such payment obligation shall inure to the benefit of any successor or assignee of APS. Sections 2, 4, 5, 7, 8, 9, 10, 11, 12 and 13 of these Terms, the provisions of Schedule 1 and the obligation to pay accrued fees and expenses shall survive the expiration or termination of the Agreement. Section 10. Non-Solicitation of Employees The Company acknowledges and agrees that APS has made a significant monetary investment recruiting, hiring and training its personnel. During the term of this Agreement and for a period of one year from the date of the Agreement (the “Restrictive Period”), the Company agrees not to directly or indirectly cause any person to hire, contract with, or solicit the employment of any of APS’ Managing Directors, Directors, or other employees with whom the Company had substantial contact as a result of this engagement; provided, that the foregoing provisions shall not prohibit the solicitation or employment of any such person (i) resulting from general solicitations of employment not directed solely to the employees of the APS, (ii) who contacts the Company on his or her own initiative or (iii) following cessation of such person’s employment with APS.

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AP Services, LLC

General Terms and Conditions



If during the Restrictive Period the Company or its affiliates directly or indirectly hires or contracts with any of APS’s Managing Directors, Directors, or other employees in violation of the preceding paragraph, the Company agrees to pay to APS as liquidated damages and not as a penalty the sum total of: (i) for a Managing Director, $1,000,000; (ii) for a Director, $500,000; and (iii) for any other employee/contractor, $250,000. The Company acknowledges and agrees that liquidated damages in such amounts are (x) fair, reasonable and necessary under the circumstances to reimburse APS for the costs of recruiting, hiring and training its employees as well as the lost profits and opportunity costs related to such personnel, and to protect the significant investment that APS has made in its Managing Directors, Directors, and other employees/ consultants; and (y) appropriate due to the difficulty of calculating the exact amount and value of that investment. Section 11. Limit of Liability THE APS PARTIES SHALL NOT BE LIABLE TO THE COMPANY, OR ANY PARTY ASSERTING CLAIMS ON BEHALF OF THE COMPANY, EXCEPT FOR DIRECT DAMAGES FOUND IN A FINAL DETERMINATION TO BE THE DIRECT RESULT OF THE GROSS NEGLIGENCE, BAD FAITH, SELF-DEALING OR INTENTIONAL MISCONDUCT OF APS. THE APS PARTIES SHALL NOT BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, LOST PROFITS, LOST DATA, REPUTATIONAL DAMAGES, PUNITIVE DAMAGES OR ANY OTHER SIMILAR DAMAGES UNDER ANY CIRCUMSTANCES, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE APS PARTIES’ AGGREGATE LIABILITY, WHETHER IN TORT, CONTRACT, OR OTHERWISE, IS LIMITED TO THE AMOUNT OF FEES PAID TO APS FOR SERVICES UNDER THIS AGREEMENT (OR IF THE CLAIM ARISES FROM AN ADDENDUM TO THIS AGREEMENT, UNDER THE APPLICABLE ADDENDUM) (THE “LIABILITY CAP”). The Liability Cap is the total limit of the APS Parties’ aggregate liability for any and all claims or demands by anyone pursuant to this Agreement, including liability to the Company, to any other parties hereto, and to any others making claims relating to the work performed by APS pursuant to this Agreement. Any such claimants shall allocate any amounts payable by the APS Parties among themselves as appropriate, but if they cannot agree on the allocation it will not affect the enforceability of the Liability Cap. Under no circumstances shall the aggregate of all such allocations or other claims against the APS Parties pursuant to this Agreement exceed the Liability Cap. Section 12. General Equitable Remedies. Each party acknowledges and agrees that money damages alone may not be an adequate remedy for a breach of the Agreement. Each party agrees that the non-breaching party shall have the right to seek a restraining order and/or an injunction for any breach of the Agreement. If any provision of the Agreement is found to be invalid or unenforceable, then it shall be deemed modified or restricted to the extent and in the manner necessary to render the same valid and enforceable. Related Matters. If an APS Party is required by applicable law, legal process or government action to produce information or testimony as a witness with respect to this Agreement, the Company shall reimburse APS for any professional time and expenses (including reasonable external and internal legal costs) incurred to respond to the request, except in cases where an APS Party is a party to the proceeding or the subject of the investigation. Severability. If any portion of the Agreement shall be determined to be invalid or unenforceable, the remainder shall be valid and enforceable to the maximum extent possible. Entire Agreement. This Agreement, including the letter, the Terms and the schedule(s), contains the entire understanding of the parties relating to the services to be rendered by APS and supersedes any other communications, agreements, understandings, representations, or estimates among the parties (relating to the subject matter hereof) with respect to such services, The Agreement, including the letter, the Terms and the schedule(s), may not be amended or modified in any respect except in a writing signed by the parties. APS is not		responsible for performing any services not specifically described herein or in a subsequent writing signed by the parties. Joint and Several. If there is more than one party signs this Agreement, the liability of each party shall be joint and several. Third-Party Beneficiaries. The indemnitees shall be third-party beneficiaries with respect to Section 7 hereof. Notices. All notices required or permitted to be delivered under the Agreement shall be sent, if to APS, to: AP Services, LLC 2000 Town Center, Suite 2400 Southfield, MI 48075 Attention: General Counsel and if to the Company, to the address set forth in the Agreement, to the attention of the Company’s General Counsel, or to such other name or address as may be given in writing to APS. All notices under the Agreement shall be sufficient only if delivered by overnight mail. Any notice shall be deemed to be given only upon actual receipt. Section 13. Data Protection All capitalised terms used in this Section and not otherwise defined in this Agreement shall have the meanings given to them in the General Data Protection Regulation (( EU ) 2016/679 ) (the “ GDPR ”) and all applicable legislation implementing any provisions of the GDPR as may be enacted from time to time (together the “ Data Protection Legislation ”). The parties acknowledge and agree that, in performing services pursuant to this Agreement, APS may from time to time be required to Process certain Personal Data on behalf of the Company. In such cases: (1) the Company will ensure that it is lawfully permitted to transfer the Personal Data to APS for the purposes of APS performing services under this Agreement; and (2) APS shall (i) act as the Company’s Processor for the purposes of the Data Protection Legislation; (ii) only Process such Personal Data in accordance with the Company’s written instructions (including when making an international transfer of Personal Data) unless required to do so by law; (iii) implement appropriate technical and organisational measures to reasonably protect that Personal Data against unauthorized or unlawful Processing and accidental, unauthorised or unlawful loss, destruction, alteration, damage, disclosure or access; and (iv) obtain commitments from all APS’s personnel who have access to and/or Process such Personal Data to keep such Personal Data confidential. If APS is Processing Personal Data relating to individuals located in the EU or otherwise subject to the Data Protection Legislation, (x) APS and the Company shall each comply with all relevant provisions of the Data Protection Legislation, and (y) the nature and extent of such Processing shall be set out in Schedule 2 of this Agreement. APS shall, in relation to any Personal Data processed by APS in connection with this Agreement: (1) at the Company’s cost, assist the Company in complying with its obligations as the Controller (or as Processor, as the case may be) of the Personal Data, to respond to requests from Data Subjects exercising their rights set out in Articles 12 to 22 of the GDPR; (2) notify the Company without undue delay on becoming aware of a Personal Data Breach; (3) upon termination or expiration of this Agreement, at the written direction of the Company either delete or return any Personal Data and any copies thereof to the Company (except to the extent APS is required by law to retain such Personal Data, and except for Personal Data located on APS’s disaster recovery or backup systems where it will be destroyed upon the normal expiration of the backup files); and (4) maintain appropriate records to demonstrate compliance with this Section. APS is part of an international business, headquartered in the United States of America (“US”). APS may in the ordinary course of its business, including the performance of the services under this Agreement, transfer Personal Data received outside the US to its US-based affiliates. APS’s US-based affiliates are certified under the EU-US Privacy Shield framework and any transfer of Personal Data from outside the US to its US-based affiliates will be transferred subject to, and in accordance with, the Privacy Shield requirements. APS’s entities located in the EU have also

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AP Services, LLC

General Terms and Conditions



entered into standard data protection clauses (in accordance with Article 46.2 (c) of the GDPR) with their non-EU-based affiliates. The Company acknowledges and agrees that APS, as reasonably required for the performance of the services pursuant to this Agreement, be permitted to transfer Personal Data to its affiliates, subject to, and in accordance with, the Privacy Shield requirements and/or the aforementioned standard data protection clauses. Except as allowed above, APS shall not transfer any Personal Data received in the EU and subject to the Data Protection Legislation outside of the European Economic Area without the prior written consent of the Company. The Company consents to APS appointing third party Processors of Personal Data under this Agreement. APS confirms that it will enter into a written agreement with any third-party Processor prior to supplying them with the Personal Data, incorporating terms which are substantially similar to those set forth in this Section. As between the Company and APS, APS shall remain fully liable for all acts or omissions of any third-party Processor appointed by APS pursuant to this paragraph.

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American Renal Associates Holdings, Inc. Provides Update on Audit Committee Review and Announces Organizational Changes

Company to Restate Certain Financial Results

Company Announces Resignation of Jason Boucher as Chief Financial Officer and Appointment of Mark Herbers as Interim Chief Financial Officer

Company Remains Committed to Providing High Quality Care to Patients, Together with its Physician Partners

BEVERLY, MA (March 27, 2019) - American Renal Associates Holdings, Inc. (NYSE: ARA) (the “Company”), a leading provider of outpatient dialysis services, today announced an update with respect to the previously disclosed review that is being conducted by the Audit Committee (the “Audit Committee”) of the Board of Directors (the “Board”) of the Company. The Company also announced the resignation of Jason Boucher as Vice President and Chief Financial Officer, effective March 26, 2019, and the appointment of Mark Herbers to the role of Interim Chief Financial Officer and Interim Chief Accounting Officer, effective March 26, 2019.

Update on the Review Being Conducted by the Audit Committee of the Board of Directors and Restatement

On March 21, 2019, the Board concluded that the Company’s previously issued consolidated financial statements and other financial data for the fiscal years ended December 31, 2014, 2015, 2016 and 2017 contained in its Annual Reports on Form 10-K for the years ended December 31, 2016 and 2017, and its condensed consolidated financial statements for the quarters and year-to-date periods ended March 31, June 30 and September 30, 2016; March 31, June 30 and September 30, 2017; and March 31, June 30 and September 30, 2018 contained in its Quarterly Reports on Form 10-Q (collectively, the “Non-Reliance Periods”) should be restated and should no longer be relied upon for the reasons described below. The Board also determined that the Company’s disclosures related to such financial statements and related communications issued by or on behalf of the Company with respect to the Non-Reliance Periods, including management’s assessment of internal control over financial reporting, should no longer be relied upon. The determination by the Board was made upon the recommendation of the Audit Committee as a result of the review described below.

of legal counsel that reports to the Audit Committee, as well as independent accounting advisors retained by the Audit Committee’s counsel.

The Audit Committee’s review is continuing. The principal findings to date include the following:

•


•	negative $13-23 million for the fiscal year ended December 31, 2018, which has not yet been reported, and negative $15-25 million for the previously reported nine months ended September 30, 2018;


•	negative $10-20 million for the fiscal year ended December 31, 2017;


•	positive $16-26 million for the fiscal year ended December 31, 2016;


•	positive $8-18 million for the fiscal year ended December 31, 2015; and


•	a relatively neutral impact for the fiscal year ended December 31, 2014.

•


•	The findings of the Audit Committee’s review are also expected to require revised calculations of related metrics such as revenue per treatment and days sales outstanding throughout the Non-Reliance Periods. The restated amounts and metrics may have an ancillary impact on other reported amounts in the financial statements.

•

As a result of the foregoing, the Company’s consolidated financial statements for the Non-Reliance Periods were not prepared in accordance with generally accepted accounting principles ("GAAP") and should not be relied upon. In addition, the Company’s lack of adequate internal control over financial reporting relating to these matters for the Non-Reliance Periods constituted one or more material weaknesses in internal control over financial reporting.


•	The scope of the Audit Committee’s review does not extend to the Company’s processes for the recording of cash in the Company’s financial statements. However, at this time, the Company has no reason to believe that cash has not been accurately recorded on a consolidated basis or at the clinic level.

The preliminary findings described above:


•	are solely based on a preliminary analysis provided to the Company by the Audit Committee and are subject to further analysis by the Audit Committee and its advisors, the Company and the Company’s independent registered public accounting firm; and


•	have not yet been verified or confirmed by the Company’s independent registered public accounting firm, and, therefore, no assurances can be provided by the Company that these findings will not change.

The Board, the Audit Committee and the Company’s management have discussed the matters disclosed above with the Company’s independent registered public accounting firm.

Resignation of Jason Boucher as Chief Financial Officer and Appointment of Mark Herbers as Interim Chief Financial Officer

The Company also announced that Jason Boucher has resigned as the Company’s Vice President and Chief Financial Officer, effective March 26, 2019. On March 26, 2019, Mr. Boucher entered into a Separation Agreement with the Company in connection with his departure from the Company (the “Separation Agreement”). As part of the Separation Agreement, Mr. Boucher has agreed to cooperate with and provide consulting services as reasonably requested by the Company following the effective date of his resignation.

On March 21, 2019, the Board authorized the appointment of Mark Herbers as Interim Chief Financial Officer and Interim Chief Accounting Officer, which appointment became effective on March 26, 2019. Mr. Herbers is expected to serve until the Company conducts a search and appoints a permanent chief financial officer and principal accounting officer. Mr. Herbers is currently employed as a Senior Director with AP Services, LLC (“APS”), an affiliate of AlixPartners, LLP, in the Financial Advisory Services practice, where he has been employed since 2014. Mr. Herbers will continue to be employed by APS during the term of his service to the Company and will not receive any compensation directly from the Company or participate in any of the Company’s employee benefit plans. AlixPartners, LLP had previously been engaged by the Company as part of its commitment to accelerating certain process improvements in revenue cycle accounting, and Mr. Herbers’ affiliation with APS reflects the Company’s continued focus on that effort.

Mr. Herbers has provided financial leadership and management to various healthcare providers and health systems. His expertise includes improving revenue cycle performance, addressing regulatory, reimbursement, financing and strategic planning matters and physician relations. Prior to joining APS, he served at FTI Consulting and its predecessor Cambio Health Solutions from 2004 to 2014, ultimately serving as Managing Director. Mr. Herbers has also served as President at Progressive Financial Services from 2002-2003, Director in Risk Advisory Services, Healthcare at KPMG from 1999-2002, Chief Financial Officer at Columbia LaGrange Memorial Hospital from 1997-1999, Chief Operating Officer and Chief Financial Officer at In Home Health Care from 1997-1998 and Chief Financial Officer at Silver Cross Hospital from 1993-1996. Prior to that time, Mr. Herbers held a number of other finance and accounting positions. Mr. Herbers received an M.B.A. from Washington University in St. Louis and a B.A. from Georgetown University.

About American Renal Associates

American Renal Associates (“ARA”) is a leading provider of outpatient dialysis services in the United States. As of December 31, 2018, ARA operated 241 dialysis clinic locations in 27 states and the District of Columbia serving approximately 16,500 patients with end stage renal disease. ARA operates principally through a physician partnership model, in which it partners with approximately 400 local nephrologists to develop, own and operate dialysis clinics. ARA’s Core Values emphasize taking good care of patients, providing physicians with clinical autonomy and operational support, hiring and retaining the best possible staff and providing best practices management services. For more information about American Renal Associates, visit www.americanrenal.com .

Forward-Looking Statements

Statements in this press release that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Audit Committee’s review and related matters, are based upon currently available information, operating plans and projections about future events and trends. Terminology such as “anticipate,” “believe,” “contemplate,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “project,” “seek,” “should,” “strategy,” “target” or “will” or variations of such words or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include: that the Audit Committee’s review of the matters described above is ongoing, including with respect to the amounts at issue and the periods to which they relate; that the Audit Committee’s review of the matters described above may take longer to complete than currently anticipated; that the Company may take longer to file its 2018 Form 10-K than currently anticipated; that the 2018 Form 10-K expects to include restatements of the Company’s financial statements for prior periods; and that the Company expects to report one or more material weaknesses in the Company’s internal control over financial reporting and to conclude that its disclosure controls and procedures required by the Securities Exchange Act of 1934 were not effective.

Investor Contact

Darren Lehrich

Telephone: (978) 522-6063; Email: dlehrich@americanrenal.com

Press Contact

Anntal Silver, Kekst CNC

Telephone: (212) 521-4849; Email: anntal.silver@kekstcnc.com