Exhibit 10.19

PROFESSIONAL SERVICES AGREEMENT

For Medical Staffing

THIS PROFESSIONAL SERVICES AGREEMENT FOR MEDICAL STAFFING (“Agreement”) is made
this 18th day of February, 2015 (the “Effective Date”), by and between GRAND
PRAIRIE PROFESSIONAL GROUP, P.A., a Texas professional association (“Practice”),
and AAC DALLAS OUTPATIENT CENTER, LLC D/B/A GREENHOUSE OUTPATIENT CENTER, a
Delaware limited liability company (“Company”), (individually, a “Party,” and,
collectively, the “Parties”).

W I TN E S S E T H:

WHEREAS, Company has established and operates an addiction treatment facility,
AAC Dallas Outpatient Center, LLC d/b/a Greenhouse Outpatient Center, located at
2301 Avenue J, Arlington, Texas 76006 (“Facility”);

WHEREAS, Practice employs Medical Providers and other medical personnel
specializing in the treatment of various addictions;

WHEREAS, Practice is owned by a physician licensed to practice medicine in the
state of Texas (the “State”); and

WHEREAS, Company desires to engage Practice as of the Effective Date to provide,
or arrange the provision of, medical services on behalf of Company, and Practice
desires to accept such engagement as of the Effective Date, all upon the terms
and conditions set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the mutual agreements, covenants,
terms and conditions herein contained, the Parties agree as follows:

Article I
ESTABLISHMENT OF PROFESSIONAL RELATIONSHIP

1.1Engagement of Practice.  As of the Effective Date, Company engages Practice,
and Practice accepts said engagement, to provide medical services in accordance
with the terms and conditions of this Agreement.

1.2Relationship of the Parties.  In the performance of their respective duties
and obligations hereunder, the Parties are independent contractors, and as such
they shall remain professionally and economically independent of each
other.  The Parties are not, and shall not be deemed to be, joint venturers,
partners, employees, or agents of each other (except with respect to an agency
for billing and collection activities expressly addressed in this
Agreement).  Neither Party shall have any authority to bind or incur any
financial obligations on behalf of the other without the other’s express written
consent, and then only insofar as such authority is conferred by such express
written consent.

 

--------------------------------------------------------------------------------

 

Article II
Practice’S OBLIGATIONS

2.1General Obligations.  Practice shall provide the Medical Provider services
set forth on Schedule 2.1, attached hereto and incorporated herein by reference.

2.2Responsibility for Medical Provider Services.  Practice shall control and be
responsible for the provision of medical services to Patients (as such term is
defined on Schedule 2.1), and Company shall not engage in the practice of
medicine nor shall it intervene or interfere in professional medical judgment of
Practice or any Medical Provider; provided, however, that Practice shall cause
the Medical Providers to comply with Company’s systems and procedures for review
and improvement of the delivery of care.

2.3Qualifications and Standards.  Practice shall take all necessary actions to
ensure that each Medical Provider satisfies the following conditions at all
times during the Term:

2.3.1Licensure and Experience Levels.  Each Medical Provider shall maintain an
unrestricted license to practice his or her specialty in the State and at all
times shall be in good standing with the appropriate licensing board.  Each
Medical Provider shall have a level of competence, experience and skill at least
comparable to that prevailing in the community.

2.3.2Federal DEA Number. The Medical Providers shall maintain a Federal DEA
number without restrictions, to the extent necessary for his or her practice.

2.3.3Medical Standards.  Each Medical Provider shall perform all medical
services to be provided hereunder in accordance with the current standards of
care in the medical community and any credentialing and quality criteria that
are adopted from time to time by Company, the Facility and/or Practice

2.3.4Continuing Education.  Medical Providers shall participate in such
continuing medical education and training programs as required by law to
maintain skills compatible with standards of medical care in the community.

2.3.5Bylaws.  Medical Providers shall comply with any bylaws, policies, rules or
regulations of Facility or Company, as may be amended from time to time.

2.3.6Laws.  Medical Providers shall comply with all applicable standards,
rulings, regulations and requirements of the United States Department of Health
and Human Services, the State’s department of health, the applicable
accreditation agency of the Facility, and any federal, state or local government
agency, third party payor or accrediting body having jurisdiction over or
providing reimbursement for the Facility and any programs and services offered
by either the Facility or Company.

2.3.7Cooperation.  Practice shall promptly notify Company if a claim of
malpractice or professional discipline is asserted against any Medical Provider
resulting from medical services provided at Facility; additionally Practice
shall notify Company of claims not yet asserted against Medical Providers, but
the potential for which Practice is aware.

2

 

 

--------------------------------------------------------------------------------

 

2.3.8Approval and Removal.  Each Medical Provider shall be subject to the
initial approval of Company before he or she commences providing services at
Facility.  In addition, Practice, at the request of Company, shall immediately
remove a Medical Provider from Facility for cause.  For purposes of this Section
2.3.8, “for cause” shall be determined by Company acting reasonably and in good
faith and shall include the following: (a) suspension or revocation or other
sanction of his or her medical license, specialty board certification, or
Federal Drug Enforcement Agency (“DEA”) registration; (b) suspension,
revocation, or reduction of his or her status or privileges as a member of the
medical staff of any hospital utilized by Company for Patients served by the
Medical Providers (including without limitation any resignation of membership or
privileges in lieu of or to avoid any of the foregoing actions); (c) being
arrested or indicted for, or convicted of any felony or any criminal charge
relating to the practice of medicine; (d) being found by the appropriate
licensure board or other state or federal regulatory agency to have violated any
provision of law or the applicable code of medical ethics; (e) cancellation,
termination or non-renewal of his or her professional liability insurance and
failure to obtain replacement coverage within thirty (30) days; or (f) having
committed any actions or inactions which pose an immediate and significant
threat to Patients. 

2.4Compensation Responsibility.  Practice shall be solely responsible for
establishing and paying the compensation and fringe benefits, if any, to the
Medical Providers. Practice shall be solely responsible for the payment and
withholding of appropriate amounts for income tax, social security, unemployment
insurance, and state disability insurance taxes. Practice shall also maintain in
full force and effect all worker’s compensation insurance as may be required
under the worker’s compensation laws of the State.

2.5Medical Provider Staffing Levels.  As of the Effective Date, Practice shall
assign to Facility Medical Providers necessary to satisfy the patient needs at
the Facility.

2.6Authority.  Practice has the right to enter into this Agreement, and neither
the execution of this Agreement nor Practice’s performance hereunder will result
in it being in breach or default of any existing agreement.

Article III
COMPENSATION

3.1General Compensation Principles.  Practice shall be compensated for the
services provided hereunder pursuant to the terms of this Agreement as described
in Schedule 3.1, which is attached hereto and incorporated herein by
reference.  The Parties hereby acknowledge and agree that such amount represents
the fair market value of the services provided hereunder.  

Article IV
PATIENT CHARGES, BILLING AND COLLECTION

4.1Billing; Assignment of Fees.  Company, directly or through an affiliate,
shall bill payors and patients for all technical and facility fees of the
Facility.  In addition, to the extent permissible by applicable law and third
party payor policies, Company may (directly or through an affiliate) bill payors
and patients globally for Company’s services and also the professional

3

 

 

--------------------------------------------------------------------------------

 

services of Practice and the Medical Providers that are provided pursuant to
this Agreement.  Practice authorizes Company, directly or through an affiliate,
to bill and collect all professional fees of Practice and the Medical Providers,
as Practice’s and the Medical Providers’ agent and attorney-in-fact to the
extent permitted by applicable law for all services rendered by Practice or the
Medical Providers at the Facility or on behalf of Company hereunder, either in
Company’s own name or in Practice’s or individual Medical Provider’s name and
provider number.  Practice shall ensure that each Medical Provider executes such
documentation as may be necessary to permit such billing by Company.  To the
extent that it is not allowable by law or payor policies for Company to bill for
services on behalf of Practice or Medical Providers, Practice will bill in its
own name for such services, provided that Practice intends to engage American
Addiction Centers, Inc., an affiliate of Company, to provide billing support
services.  Practice shall ensure that duplicative billing does not occur, and
neither it nor any Medical Provider will payors or patients for the same
services that are billed by Company. 

4.2Practice to Provide Billing Information.  For all applicable services
described in Section 4.1 above and in accordance with applicable law, Practice
shall provide Company with all billing information for services rendered by the
Medical Providers, including, but not limited to, the name of the Patient, the
date of service, the nature and extent of services provided, Patient diagnosis,
and any supporting medical and non-medical information necessary to bill such
services and to obtain payment and/or reimbursement. Each Medical Provider shall
provide the above-described billing information to Company within seven (7)
calendar days after the applicable medical services are rendered. The applicable
treating Medical Provider shall be responsible for appropriately coding the
service provided and supplying the correct CPT, KEY, ICD-9 (or ICD-10 once
applicable) or other codes associated with the service.

Article V
INSURANCE

5.1Comprehensive General Liability and Property Insurance.  Company shall
procure and maintain during the Term of this Agreement comprehensive general
liability insurance covering its activities relating to Facility and property
insurance covering the Facility.  The comprehensive general liability insurance
maintained hereunder shall be in amounts deemed sufficient by Company to protect
against risks and losses associated with the operations of Facility.

5.2Company’s Professional Liability Insurance.  Company shall procure and
maintain in full force and effect during the Term of this Agreement professional
liability insurance covering Company and appropriate personnel provided by
Company pursuant to this Agreement, including, without limitation, Company’s
provider employees and contractors (subject to prior approval of insurer),
against errors and omissions arising from Patient services and/or non­medical
services rendered by Company pursuant to this Agreement.  All premiums, costs
and expenses associated with such professional liability insurance shall be
borne by and paid by Company.  The professional liability insurance procured by
Company shall have limits of liability of at least one million dollars
($1,000,000) per claim and three million dollars ($3,000,000) per annual
aggregate. For purposes of Sections 5.1 and 5.2, the term “insurance” shall
include self-insurance arrangements maintained by Company for itself and its
corporate affiliates, including Facility.

4

 

 

--------------------------------------------------------------------------------

 

5.3Practice’s Professional Liability Insurance.  Practice shall procure and
maintain in full force and effect during the Term of this Agreement, and for a
period of three (3) years subsequent to the expiration or earlier termination of
this Agreement, professional liability insurance (i.e., medical malpractice
insurance) with an insurer acceptable to Company, protecting Practice and its
shareholders, officers, directors, and the Medical Providers against errors and
omissions arising from professional services and/or medical services rendered by
Practice and the Medical Providers. Such policy of insurance shall name Company
as an additional insured. The insurance required by this Section 5.3 shall
specifically extend to acts or omissions of Medical Providers occurring both
prior and subsequent to the Effective Date.  All premiums, costs and expenses
associated with such professional liability insurance shall be borne by
Practice.  The professional liability insurance required by this Section 5.3
shall have limits of liability of at least one million dollars ($1,000,000) per
claim and three million dollars ($3,000,000) per annual aggregate. 

5.4Proof of Insurance.  At the request of the other Party, each Party shall
furnish copies of or Certificates of Insurance on all policies required under
this Article V (or evidence of self-insurance) as evidence of the insurance
coverage to be procured pursuant to this Agreement. In the case of Company, this
evidence shall also specifically include evidence of “tail” or other coverage
for acts and omissions occurring prior to the Effective Date.  The insurance
coverage required under this Agreement shall not be canceled, modified, reduced
or otherwise materially changed, except upon thirty (30) days’ prior written
notice to the non-procuring Party.

Article VI
INDEMNIFICATION

6.1Indemnification by Company.  Company shall indemnify, defend and hold
Practice, and the shareholders, directors, officers and employees of Practice,
free and harmless from and against any and all claims, demands, liabilities,
losses, damages, costs, and expenses, including reasonable attorneys’ fees,
resulting in any manner, directly or indirectly from any negligent or willful
act or omission of Company or its non-Medical Provider employees providing
services at Facility. Notwithstanding any provisions of the preceding sentence
to the contrary, Company shall not be liable to Practice for any consequential,
exemplary or punitive damages.  The duty of Company to indemnify, defend and
hold harmless Practice shall only apply to the extent that any such loss
sustained by Practice is not covered by insurance.  The indemnification
provisions of this Section 6.1 are intended to be in addition to any common law
rights to contribution existing under the laws of the State which one Party may
have against the other.

6.2Indemnification by Practice.  Practice shall indemnify, defend and hold
Company, and the shareholders, directors, officers and employees of Company,
free and harmless from and against any and all claims, demands, liabilities,
losses, damages, costs and expenses, including reasonable attorneys’ fees,
resulting in any manner, directly or indirectly, from any negligent or willful
act or omission of any Medical Provider, including, specifically, (i) negligent
or willful acts occurring both prior to and subsequent to the Effective Date and
(ii) claims against Company attributable directly or indirectly to incorrect
billing information provided to Company by Practice or any Medical Provider.
Notwithstanding any provisions of the preceding sentence to the contrary,
Practice shall not be liable to Company for any

5

 

 

--------------------------------------------------------------------------------

 

consequential, exemplary or punitive damages.  The indemnification provisions of
this Section 6.2 are intended to be in addition to any common law rights to
contribution existing under the laws of the State which one Party may have
against the other. A provision similar to that set forth in this Section 6.2
shall be contained in each contract between Practice and any independent
contractor providing professional medical services for Practice at the Facility
in order to ensure that each such Medical Provider has agreed to indemnify
Company as required by this Section 6.2. 

Article VII
RECORDS AND CONFIDENTIALITY

7.1Ownership of Records and Files.  All business or medical records and files of
whatever nature or kind, including Patients’ files and x-rays, are the property
of Company to the extent permitted by law; neither Practice nor individual
Medical Providers shall acquire any proprietary rights with respect to such
records.  However, at Practice’s written request, Company shall provide Medical
Providers with copies of any records reflecting services performed by such
Medical Provider with respect to (a) any claims against him/her in the nature of
malpractice, (b) any charges against him/her issued by a licensing board or
professional association or (c) for any other purpose deemed appropriate by
Company.

7.2Confidentiality of Medical Records.  Both Parties shall comply with all
applicable federal and state laws and regulations regarding the confidential and
secure treatment of individually identifiable health information, including 42
C.F.R. Part 2, and with the terms of the Business Associate Addendum attached as
Schedule 7.2 hereto and incorporated herein by reference.

7.3Medical Records upon Termination.  Upon the expiration or earlier termination
of this Agreement, unless a Patient specifies otherwise and in accordance with
applicable law, Company shall be entitled to the original medical records for
all Patients, and Practice shall be entitled to copy such records, with the cost
of any copies to be home by Practice.  For such period as is required by
applicable statutes, Company shall keep possession of the original medical
records and shall retain the records in their original condition, shall store
the records in a safe place and make the records available to Practice without
charge if reasonably necessary for any purpose, including, without limitation,
Patient care and medical malpractice defense.

 

Article VIII
TERM AND TERMINATION

8.1Term.  This Agreement shall be effective for a term of five (5) years,
beginning on the Effective Date, unless terminated pursuant to the provisions of
this Article VIII (the “Initial Term”).  Upon expiration of the Initial Term,
this Agreement will automatically renew for additional one (1) year terms (the
“Renewal Terms”) unless either Party shall provide notice to the other Party of
its intent to terminate the Agreement under the terms of this Section 8.1
(“Notice of Intent to Terminate”).  Notice of Intent to Terminate must be
provided no later than one (1) year prior to the expiration of the Initial Term,
and no later than ninety (90) days prior to the expiration of any Renewal
Term.  

6

 

 

--------------------------------------------------------------------------------

 

8.2Termination upon Insolvency.  If either Party shall apply for or consent to
the appointment of a receiver, trustee or liquidation of itself, or if all or a
substantial part of its assets, file a voluntary petition in bankruptcy or admit
in writing its inability to pay its debts as they become due, make a general
assignment for the benefit of creditors, file a petition or an answer seeking
reorganization or arrangement with creditors, or take advantage of any
insolvency law, or if an order, judgment, or decree shall be entered by a court
of competent jurisdiction or an application of a creditor, adjudicating such
party to be bankrupt or insolvent, or approving a petition seeking
reorganization of such Party or appointing a receiver, trustee or liquidator of
such Party or of all or a substantial part of its assets, and such order,
judgment, or decree shall continue in effect and unstayed for a period of thirty
(30) consecutive days, then the other Party may terminate this Agreement upon
ten (10) days prior written notice to such Party. 

8.3Termination upon Legal Prohibitions of Relationship.  If counsel jointly
selected by the Parties should determine (the “Determination”) that it is more
likely than not that applicable legislation, regulations, rules or procedures
(collectively referred to herein as a “Law”) in effect or to become effective as
of a date certain, or if Practice or Company receives notice (the “Notice”) of
an actual or threatened decision, finding or action by any governmental or
private agency or court (collectively referred to herein as an “Action”), which
Law or Action, if or when implemented, would have the effect of subjecting
either Party to civil or criminal prosecution under state and/or federal Laws,
or other adverse proceeding on the basis of their participation herein, then the
Parties shall attempt in good faith to amend this Agreement to the extent
necessary in order to comply with such Law or to avoid the Action, as
applicable. If, within ninety (90) days of providing written notice of such
Determination or Notice to the other Party, the Parties acting in good faith are
unable to mutually agree upon and make amendments or alterations to this
Agreement to meet the requirements in question, or alternatively, the Parties
mutually determine in good faith that compliance with such requirements is
impossible or unfeasible, then this Agreement shall be terminated without
penalty, charge or continuing liability upon the earlier of the following: the
date one hundred eighty (180) days subsequent to the date upon which either
Party gives written notice to the other Party or the effective date on which the
Law or Action prohibits the relationship of the Parties pursuant to this
Agreement.

8.4Termination upon Breach.  Either Party may elect to terminate this Agreement
in the event that the other Party is in material breach of this Agreement and
such default continues for a period of fifteen (15) calendar days after written
notice thereof has been given to the Party in default by the other Party;
provided, however, that Company may immediately terminate this Agreement if
Practice fails to provide, or arrange the provision of, adequate professional
medical services pursuant to this Agreement for a period of three (3) calendar
days.

8.5Termination Without Cause.  This Agreement shall automatically terminate upon
one hundred and eighty (180) days’ notice by either Party to the other Party.

8.6Termination and Liabilities.  In the event either Party validly elects to
terminate this Agreement pursuant to the provisions of this Article VIII or the
Agreement expires by its own terms, the liabilities and obligations of the
Parties shall cease as of the date of termination, except that each Party shall
be responsible for: (a) any payments or other obligations arising or accruing
prior to the termination date and (b) any breach arising after termination or
expiration with respect to obligations that continue after such expiration or
termination.  Neither Party shall

7

 

 

--------------------------------------------------------------------------------

 

be liable to the other for any damages resulting from any event of force
majeure.  The Parties agree that upon such termination, they will mutually work
to assure an orderly transition of services. 

Article IX
GENERAL PROVISIONS

9.1Independence of Medical Judgment.  Nothing in this Agreement shall affect the
exercise of Medical Providers’ independent medical judgment.

9.2Entire Agreement; Amendment.  This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter contained herein and
supersedes all prior and contemporaneous agreements, representations and
understandings of the Parties which relate to the subject matter of this
Agreement.  No supplement, amendment or modification of this Agreement shall be
binding unless executed in writing by the Parties, unless otherwise provided
herein.

9.3No Waiver.  No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver.  No waiver shall
be binding unless executed in writing by the Party making the waiver.

9.4Subject Headings.  The subject headings of the Articles and Sections of this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of the provisions of this Agreement.

9.5Binding Agreement; No Assignment.  This Agreement shall be binding upon, and
shall inure to the benefit of, the Parties and their respective legal
representatives, successors and assigns.  Company may assign this Agreement upon
prior written notice to Practice.  Practice may not assign this Agreement nor
any rights hereunder, nor may it delegate any of the duties to be performed
hereunder without the prior written consent of Company; provided, however, that
notwithstanding the foregoing sentence to the contrary, Practice shall have the
right to assign this Agreement to another corporate affiliate of Company upon
written notice and shall have the right to subcontract with any other
responsible parties, including specifically, corporate affiliates of Practice,
for the performance of various aspects of its obligations hereunder, provided
that Practice shall remain fully responsible for the performance of any such
subcontractors.

9.6Severability.  Except as otherwise provided in Section 8.3, in the event any
provision of this Agreement is rendered invalid or unenforceable by the
enactment of any applicable statute or ordinance or by any regulation duly
promulgated or is made or declared unenforceable by any court of competent
jurisdiction, the remainder of this Agreement shall remain in full force and
effect.

9.7Attorneys’ Fees.  In the event any attorney is employed by any Party with
regard to any legal action, arbitration or other proceeding brought by any Party
for the enforcement of this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of this
Agreement, then the prevailing Party, whether at trial or upon appeal, and in
addition to any other relief to which the prevailing Party may be

8

 

 

--------------------------------------------------------------------------------

 

granted, shall be entitled to recover from the losing Party all costs, expenses
and attorneys’ fees incurred by the prevailing Party in bringing or defending
such action, arbitration or proceeding, and in enforcing any judgment granted
therein, all of which costs, expenses and attorneys’ fees shall be deemed to
have accrued upon the commencement of such action and shall be paid whether or
not such action is prosecuted to judgment.  Any judgment or order entered in
such matter shall contain a specific provision providing for the recovery by the
prevailing Party of attorneys’ fees, costs and expenses incurred in enforcing
such judgment.  For purposes of this Section 9.7, attorneys’ fees shall include,
without limitation, fees incurred in the following:  post-judgment motions;
contempt proceedings; garnishment, levy and debtor and third party examinations;
discovery; and bankruptcy litigation. 

9.8Notices.  All notices, requests, demands or other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the Party to whom notice is to be given,
or on the third day after mailing if mailed to the Party to whom notice is to be
given, by a recognized overnight carrier service, or by first class mail,
registered or certified, postage prepaid, and properly addressed as follows:

 

 

TO PRACTICE:

Grand Prairie Professional Group, P.A.

 

 

1171 107th Street, Suite A

 

 

Grand Prairie, Texas 75050

 

 

Attn:  Mark A. Calarco, D.O.

 

 

Email:  mcalarco@contactaac.com

 

 

 

 

TO COMPANY:

AAC Dallas Outpatient Center, LLC

 

 

d/b/a Greenhouse Outpatient Center

 

 

2301 Avenue J

 

 

Arlington, Texas 76006

 

 

Attn.:  Marc C. Turner, Chief Executive Officer

 

 

Email:  mturner@contactaac.com

 

 

 

 

WITH COPY TO:

 

 

 

American Addiction Centers, Inc.

 

 

115 East Park Drive, Second Floor

 

 

Brentwood, Tennessee 37027

 

 

Attn:  Candance A. Henderson-Grice, Chief Operating Officer

 

 

Email: chenderson-grice@contactaac.com

 

 

 

 

 

American Addiction Centers, Inc.

 

 

115 East Park Drive, Second Floor

 

 

Brentwood, Tennessee 37027

 

 

Attn:  Kathryn Sevier Phillips, General Counsel and Secretary

 

 

Fax: (615) 691-7130

 

 

Email: ksphillips@contactaac.com

 

Each Party may change its address indicated above by giving the other Party
written notice of the new address in the manner set forth above.

9

 

 

--------------------------------------------------------------------------------

 

 

9.9Governing Law.  This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State.  All actions, suits, or
other proceedings with respect to this Agreement shall be brought only in a
court of competent jurisdiction in the State. In any such action, suit, or
proceeding, such court shall have personal jurisdiction over all of the parties
hereto, and service of process upon them under any applicable statutes, laws,
and rules shall be deemed valid and good.

9.10Third Party Rights.  This Agreement is entered into by and between the
Parties hereto for their sole benefit.  There is no intent by either Party to
create or establish third party beneficiary status or rights in any third party
to this Agreement and no third party shall have any right to enforce any right
or enjoy any benefit created or established by this Agreement.

9.11No Discrimination.  No person shall be excluded from participation in, or be
denied benefits of, or be otherwise subjected to discrimination in the
performance of this Agreement or any Addenda on the grounds of disability, age,
race, color, religion, sex, national origin or any other classification
protected by federal and/or Tennessee constitutional, statutory and/or
regulatory provisions.

9.12Signatory.  Each Party warrants that the person indicated on signatory line
to this Agreement has all authority necessary to bind the Party and is the
appropriate designated person to sign this Agreement.

9.13Counterparts.  This Agreement may be signed in multiple counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute a single instrument.

9.14Drafted Jointly.  In the event of an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties, and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of authorship of the provisions of this
Agreement.

9.15Cooperation.  The Parties agree to cooperate with each other to resolve
promptly any outstanding financial, administrative or patient care issues upon
the termination of this Agreement. Such obligation shall include, without
limitation, the provision of patient, resident and/or administrative records,
payments or other actions necessary to conclude the relationship of the
Parties.  This Section 9.15 shall survive the termination of this Agreement for
any reason. Each Party further agrees to cooperate with the other to carry out
the purpose and intent of this Agreement, including without limitation the
execution and delivery to the appropriate Party of any further agreements and
other documents and the taking of any action as may reasonably be required to
effectuate the provisions of this Agreement.

[Signature Page Follows]

 

10

 

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement on the
dates set forth below, provided that this Agreement is effective as of the
Effective Date.

For Company:

 

AAC Dallas Outpatient Center, LLC D/B/A Greenhouse Outpatient Center

 

For Practice:

 

Grand Prairie Professional Group, P.A.

 

 

 

 

 

 

By:/s/ Michael T. Cartwright

 

By:/s/ Mark A. Calarco, D.O.

Name:Michael T. Cartwright

 

Name:Mark A. Calarco, D.O.

Title:Chairman

 

Title:President, Secretary and Treasurer

 

 

 

 

--------------------------------------------------------------------------------

 

Schedule 2.1

Practice’s Services

Professional Services

During the term of this Agreement, Practice, through its physician shareholder,
employees and independent contractors (the “Medical Providers”), shall provide
professional medical services to the patients of Company (the
“Patients”).  Medical Providers may include doctors of medicine, doctors of
osteopathy and mid-level providers including physician assistants and advanced
practice nurses.  Practice shall effectively provide all the professional
medical services as required by Company for the needs of its Patients. Such
professional medical services shall include those service obligations set forth
herein and other related services reasonably requested by Company.

Medical Director Services

During the term of this Agreement, in addition to the professional services
described above, Practice shall, unless otherwise agreed to by the parties,
provide a physician who is acceptable to Company, to serve as medical director
of Facility (the “Medical Director”) and provide medical management and
oversight for matters specific to Facility pursuant to a medical director
agreement between Practice and Medical Director reasonably acceptable to Company
(the “Medical Director Agreement”). Practice shall cause Medical Director to
furnish those services as set forth in the Medical Director Agreement, in
accordance with the terms thereof.  Upon request, Practice shall provide Company
with documentation reasonably acceptable to Company supporting Medical
Director’s fulfillment of such duties with Company also retaining the right to
conduct such audits thereof as Company determines reasonably necessary to
support Company’s payment for such services under this Agreement.

Practice shall provide support, assistance, and work cooperatively with Medical
Director who will provide medical management and oversight for
Facility.  Practice, at the request of Company, shall immediately remove a
Medical Director from Facility for cause, as “cause” is defined in Section 2.3.8
hereof.  

The term “Medical Provider” as used in this Agreement shall include the Medical
Director, provided that any provision that relates specifically to professional
medical services will not apply to the Medical Director to the extent that the
Medical Director is providing only administrative and not professional services.

 

 

Schedule 2.1

Page 1

 

--------------------------------------------------------------------------------

Schedule 3.1

Compensation

Practice acknowledges that Practice may sometimes bill separately for the
services of Medical Providers, and at other times Company submits global bills
for the services of both the Facility and the Medical Providers.  In light of
the foregoing, Company shall pay to Practice the fees set forth below for
services provided by the Medical Providers at the Facility to the extent that
such provider services are not separately billed by Practice.  To the extent
Practice bills separately for Medical Provider services, Company shall not be
obligated to pay a fee for such services.

Provider

Fee

Physician/Psychologist Clinical Services

$125 - $175 per hour*

 

 

Medical Director Services

$100 - $150 per hour*

 

 

Mid-level Provider Services (PA or NP)

$55 - $95 per hour*

 

*  Specific hourly rate within the noted range shall be determined by Company in
its reasonable discretion after consultation with Practice, based on the
experience level, specialty, certifications, and other qualifications of the
applicable practitioner.

 

If Practice is asked by Company to provide additional practitioner services at
the Facility, Company shall pay to Practice a fee for such services equal to the
rate that Practice pays such provider for the services (unless the service is
separately billable by Practice).  Practice represents and warrants that the
compensation it pays to Medical Providers, and the corresponding fees paid by
Company, shall be reasonable and consistent with fair market
value.  Compensation shall be paid pursuant to Company’s standard payment
policies and timing.

 

 

 

 

Schedule 3.1

Page 1

 

--------------------------------------------------------------------------------

 

Schedule 7.2

HIPAA Business Associate Addendum

THIS HIPAA BUSINESS ASSOCIATE ADDENDUM (“Addendum”) amends and is made part of
that certain PROFESSIONAL SERVICES AGREEMENT FOR MEDICAL STAFFING (“Service
Agreement”), by and between AAC DALLAS OUTPATIENT CENTER, LLC D/B/A GREENHOUSE
OUTPATIENT CENTER, a Delaware limited liability company (“Entity”), and GRAND
PRAIRIE PROFESSIONAL GROUP, P.A., a Texas professional association
(“Associate”), to the extent that Associate is acting as a Business Associate of
Entity.

Entity and Associate agree that the parties incorporate this Addendum into the
Service Agreement in order to comply with the requirements of:  the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”),  the Health
Information Technology for Economic and Clinical Health Act (“HITECH”) and their
implementing regulations set forth at 45 C.F.R. Parts 160 and Part 164 (the
“HIPAA Rules”); and Federal regulations governing Confidentiality of Alcohol and
Drug Abuse Patient Records, 42 C.F.R. Part 2 (“Part 2 Regulations”).  To the
extent Associate is acting as a Business Associate of Entity pursuant to the
Service Agreement, the provisions of this Addendum shall apply, and Associate
shall be subject to the penalty provisions of HIPAA as specified in 45 C.F.R.
Part 160.

1.Definitions.  Capitalized terms not otherwise defined in this Addendum shall
have the meaning set forth in the HIPAA Rules. References to “PHI” mean
Protected Health Information maintained, created, received or transmitted by
Associate from Entity or on Entity’s behalf.

2.Uses or Disclosures.  Associate will neither use nor disclose PHI except as
permitted or required by this Addendum or as Required By Law.  To the extent
Associate is to carry out an obligation of Entity under the HIPAA Rules,
Associate shall comply with the requirements of the HIPAA Rules that apply to
Entity in the performance of such obligation.  Without limiting the foregoing,
Associate will not sell PHI or use or disclose PHI for purposes of marketing or
fundraising, as defined and proscribed in the HIPAA Rules. Associate is
permitted to use and disclose PHI:

(a)to perform any and all obligations of Associate as described in the Service
Agreement, provided that such use or disclosure is consistent with the terms of
Entity’s notice of privacy practices and would not violate the HIPAA Rules or
the Part 2 Regulations, if done by Entity directly;

(b)to perform Data Aggregation services relating to the health care operations
of Entity, provided that such services are part of Associate’s obligations as
set forth in the Service Agreement;

(c)to create de-identified information in accordance with 45 C.F.R. §
164.514(b), provided that such de-identified information may be used and
disclosed only consistent with applicable law; and

Schedule 7.2

Page 1

--------------------------------------------------------------------------------

(d)as necessary for Associate’s proper management and administration and to
carry out Associate’s legal responsibilities (collectively “Associate’s
Operations”) provided that: any disclosure made for purposes of Associate’s
Operations is Required By Law or is made after Associate obtains reasonable
assurances, evidenced by a written contract, from the recipient that the
recipient:  (i) will hold such PHI in confidence and use or further disclose it
only for the purpose for which Associate disclosed it to the recipient or as
Required By Law; (ii) will notify Associate of any instance of which the
recipient becomes aware in which the confidentiality of such PHI was breached;
(iii) acknowledges in writing that, in receiving PHI, the recipient is fully
bound by the Part 2 Regulations; and (iv) agrees to, if necessary, resist in
judicial proceedings any efforts to obtain access to PHI except as permitted by
the Part 2 Regulations.  Associate shall promptly notify Entity of any
disclosures made for purposes of Associate’s Operations.

In the event Entity notifies Associate of a restriction request that would
restrict a use or disclosure otherwise permitted by this Addendum, Associate
shall comply with the terms of the restriction request.

3.Safeguards.  Associate will use appropriate administrative, technical and
physical safeguards to prevent the use or disclosure of PHI other than as
permitted by this Addendum and shall maintain policies and procedures to detect,
prevent, and mitigate identity theft based on PHI or information derived from
PHI. Associate will also comply with the provisions of 45 C.F.R. Part 164,
Subpart C of the HIPAA Rules with respect to electronic PHI to prevent any use
or disclosure of such information other than as provided by this Addendum, which
obligation shall include maintaining safeguards that reasonably and
appropriately protect the confidentiality, integrity and availability of
electronic PHI.

4.Policies and Training.  Associate has policies in place regarding the
confidential and secure treatment of PHI in accordance with HIPAA and the Part 2
Regulations. Associate shall require its employees to adhere to such policies
and shall train its employees regarding the requirements of this Addendum and
applicable confidentiality and security laws and regulations.

5.Subcontractors.  In accordance with 45 C.F.R. § 164.308(b)(2) and
164.502(e)(1)(ii), Associate will ensure that all of its subcontractors that
create, receive, maintain or transmit PHI on behalf of Associate agree by
written contract to comply with the same restrictions and conditions that apply
to Associate with respect to such PHI, including but not limited to (i) the
obligation to safeguard PHI and comply with 45 C.F.R. Part 164, Subpart C; and
(ii) acknowledging in writing that, in receiving PHI, the recipient is fully
bound by the Part 2 Regulations, and must agree to, if necessary, resist in
judicial proceedings any efforts to obtain access to PHI except as permitted by
the Part 2 Regulations.

6.Minimum Necessary.  Associate represents that the PHI requested, used or
disclosed by Associate shall be the minimum amount necessary to carry out the
purposes of the Service Agreement. Associate will limit its uses and disclosures
of, and requests for, PHI to the minimum amount of PHI necessary to accomplish
the intended purpose of the use, disclosure or request.

7.Obligations of Entity.  Entity shall notify Associate of (i) any limitations
in its notice of privacy practices, (ii) any changes in, or revocation of,
permission by an individual to use or

Schedule 7.2

Page 2

--------------------------------------------------------------------------------

disclose PHI, and (iii) any confidential communication request or restriction on
the use or disclosure of PHI that Entity has agreed to or with which Entity is
required to comply, to the extent any of the foregoing affect Associate’s use or
disclosure of PHI to perform its obligations as described in the Service
Agreement.

8.Access and Amendment.  In accordance with 45 C.F.R. § 164.524, Associate will
permit Entity or, at Entity’s request, an individual (or the individual’s
designee) to inspect and obtain copies of any PHI about the individual that is
in Associate’s custody or control and that is maintained in a Designated Record
Set.  If the requested PHI is maintained electronically, Associate must provide
a copy of the PHI in the electronic form and format requested by the individual,
if it is readily producible, or, if not, in a readable electronic form and
format as agreed to by Entity and the individual.  Associate will notify Entity
of any request (including but not limited to subpoenas) that Associate receives
for access to PHI that is in Associate’s custody or control within five (5)
business days of receipt of such request.  Entity shall be responsible for
making determinations about access.  Associate will, upon receipt of notice from
Entity, promptly amend or permit Entity access to amend any portion of the PHI
that is in Associate’s custody or control so that Entity may meet its amendment
obligations under 45 C.F.R. § 164.526.

9.Disclosure Accounting.  Except for disclosures excluded from the accounting
obligation by the HIPAA Rules and regulations issued pursuant to HITECH,
Associate will record for each disclosure that Associate makes of PHI the
information necessary for Entity to make an accounting of disclosures pursuant
to the HIPAA Rules. In the event the U.S. Department of Health and Human
Services (“HHS”) finalizes regulations requiring Covered Entities to provide
access reports, Associate shall also record such information with respect to
electronic PHI held by Associate as would be required under the regulations for
Covered Entities beginning on the effective date applicable to
Entity.  Associate will make information required by this Section 9 available to
Entity promptly upon Entity’s request for the period requested, but for no
longer than the six (6) years preceding Entity’s request for the information or
such other period required by the HIPAA Rules (except Associate need not have
any information for disclosures occurring before the effective date of any
previous HIPAA business associate agreements between the parties or, if none,
the effective date of this Addendum).

10.Inspection of Books and Records.  Associate will make its internal practices,
books, and records, relating to its use and disclosure of PHI available upon
request to Entity or HHS to determine Entity's compliance with the HIPAA Rules.

11.Reporting.  To the extent Associate becomes aware or discovers any use or
disclosure of PHI not permitted by this Addendum, any Security Incident
involving electronic PHI, any Breach of Unsecured Protected Health Information
or any Red Flag (as defined at 16 C.F.R. § 681.2(b)) related to any individual
who is the subject of PHI, Associate shall promptly report such use, disclosure,
Security Incident, Breach or Red Flag to Entity.  Associate shall mitigate, to
the extent practicable, any harmful effect known to it of a Security Incident,
Breach or use or disclosure of PHI by Associate not permitted by this
Addendum.  Notwithstanding the foregoing, the parties acknowledge and agree that
this Section 11 constitutes notice by Associate to Entity of the ongoing
existence and occurrence of attempted but Unsuccessful Security Incidents (as
defined below) for which no additional notice to Entity shall be
required.  “Unsuccessful Security Incidents” shall include, but not be limited
to, pings and other broadcast attacks on

Schedule 7.2

Page 3

--------------------------------------------------------------------------------

Associate’s firewall, port scans, unsuccessful log-on attempts, denials of
service and any combination of the above, so long as no such incident results in
unauthorized access, use or disclosure of electronic PHI.  All reports of
Breaches shall be made within ten (10) business days of Associate discovering
the Breach and shall comply with and include the information specified at 45
C.F.R. § 164.410.  Associate shall promptly reimburse Entity all reasonable
costs incurred by Entity with respect to providing notification of and
mitigating a Breach involving Associate, including but not limited to printing,
postage costs and toll-free hotline costs.

12.Confidentiality of Alcohol and Drug Abuse Patient Records.  Associate: (1)
acknowledges that in receiving, storing, processing, or otherwise dealing with
any information from Entity about individuals who are patients of Entity
(“Patients”), it is fully bound by the provisions of the Federal regulations
governing Confidentiality of Alcohol and Drug Abuse Patient Records, 42 C.F.R.
Part 2; and (2) undertakes to resist in judicial proceedings any effort to
obtain access to information pertaining to Patients otherwise than as expressly
provided for in the Part 2 Regulations.

13.Term and Termination.  This Addendum shall be effective as of the effective
date of the Service Agreement and shall remain in effect until termination of
the Service Agreement. Either party may terminate this Addendum and the Service
Agreement effective immediately if it determines that the other party has
breached a material provision of this Addendum and failed to cure such breach
within thirty (30) days of being notified by the other party of the breach. If
the non-breaching party determines that cure is not possible, such party may
terminate this Addendum and the Service Agreement effective immediately upon
written notice to other party.

Upon termination of this Addendum for any reason, Associate will, if feasible,
return to Entity or securely destroy all PHI maintained by Associate in any form
or medium, including all copies of such PHI, at no cost to Entity. Further,
Associate shall recover any PHI in the possession of its agents and
subcontractors and return to Entity or securely destroy all such
PHI.  Notwithstanding the foregoing, Associate shall notify Entity and receive
Entity’s written consent prior to destroying any PHI of which Entity does not
maintain a duplicate copy. In the event that Associate determines that returning
or destroying any PHI is infeasible, Associate shall promptly notify Entity of
the conditions that make return or destruction infeasible. With regard to any
PHI that Entity agrees cannot feasibly be returned to Entity or destroyed,
Associate may maintain such PHI but shall continue to abide by the terms and
conditions of this Addendum with respect to such PHI and shall limit its further
use or disclosure of such PHI to those purposes that make return or destruction
of the PHI infeasible.  Associate shall comply with this Section 13 within
thirty (30) days of termination of this Addendum.  Associate shall provide
Entity with written certification of its compliance with this Section 13 within
forty-five (45) days of termination of this Addendum. Upon termination of this
Addendum for any reason, all of Associate’s obligations under this Addendum
shall survive termination and remain in effect (a) until Associate has completed
the return or destruction of PHI as required by this Section 13 and (b) to the
extent Associate retains any PHI pursuant to this Section 13.

14.General Provisions.  In the event that any final regulation or amendment to
final regulations is promulgated by HHS or other government regulatory authority
with respect to PHI, this Addendum will automatically be amended to remain in
compliance with such regulations, and Associate shall promptly amend its
contracts, if any, with subcontractors and

Schedule 7.2

Page 4

--------------------------------------------------------------------------------

agents to conform to the terms of this Addendum.  Any ambiguity in this Addendum
shall be resolved to permit Entity to comply with the HIPAA Rules and the Part 2
Regulations.  Nothing in this Addendum shall be construed to create any rights
or remedies in any third parties or any agency relationship between the
parties.  A reference in this Addendum to a section in the HIPAA Rules or the
Part 2 Regulations means the section as in effect or as amended.  This Addendum
replaces and supersedes and previous business associate agreements between the
parties.  The terms and conditions of this Addendum override and control any
conflicting term or condition of the Service Agreement.  To the extent Associate
has limited its liability under the terms of the Service Agreement by a maximum
recovery for direct damages, disclaimer against any consequential, indirect or
punitive damages or any other limitation, all limitations shall exclude any
damages to Entity arising from Associate’s breach of its obligations under this
Addendum.  All non-conflicting terms and conditions of the Service Agreement
remain in full force and effect.

Schedule 7.2

Page 5