MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(State of Maryland)

[// GUIDANCE: This template is drafted for a physician (or allied-health) partnership operating a clinical practice in Maryland. It assumes a traditional general partnership structure; if forming a limited liability partnership or professional corporation, the organizational provisions will require modification. Bracketed text in ALL CAPS must be customized.*

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Formation, Name, Purpose, Term
   3.2 Capital Contributions; Capital Accounts
   3.3 Allocation & Distribution of Profits and Losses
   3.4 Management & Voting
   3.5 Partner Compensation; Fee-Splitting Compliance
   3.6 Books, Records & Accounting
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
   7.1 Indemnification
   7.2 Limitation of Liability
   7.3 Insurance Requirements
   7.4 Force Majeure
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

MEDICAL PRACTICE PARTNERSHIP AGREEMENT
This Medical Practice Partnership Agreement (this “Agreement”) is entered into and made effective as of [EFFECTIVE DATE] (the “Effective Date”), by and among:

• [PARTNER 1 LEGAL NAME], M.D., a physician licensed and in good standing in the State of Maryland (“Partner 1”);
• [PARTNER 2 LEGAL NAME], M.D., a physician licensed and in good standing in the State of Maryland (“Partner 2”);
• [ADDITIONAL PARTNERS, IF ANY] (each, together with Partner 1 and Partner 2, a “Partner,” and collectively, the “Partners”).

Recitals
A. The Partners desire to associate as a partnership (the “Partnership”) for the purpose of owning and operating a medical practice in the State of Maryland in compliance with all Applicable Laws (as defined herein).
B. The Partners wish to set forth their respective rights and obligations with respect to the Partnership.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Partners agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below. Defined terms appear in Bold-Italic form throughout this Agreement.

“AAA” means the American Arbitration Association.

“Applicable Law” means all federal, state, and local laws, regulations, ethical rules, and professional standards governing the Partnership’s business, including without limitation: (i) Maryland medical licensing statutes and regulations; (ii) Maryland corporate practice and fee-splitting prohibitions; (iii) HIPAA and related privacy laws; and (iv) federal and state fraud and abuse, anti-kickback, Stark Law, and false claims requirements.

“Arbitration Rules” means the AAA Health Care Payor Provider Arbitration Rules or, if inapplicable, the AAA Commercial Arbitration Rules then in effect.

“Capital Account” means, with respect to each Partner, the capital account maintained in accordance with Section 3.2.

“Confidential Information” means all non-public information concerning the Partnership, its patients, or any Partner.

“Effective Date” has the meaning set forth in the Document Header.

“Fee-Splitting Laws” means all statutes, regulations, and professional-conduct rules that restrict division of fees between or among licensed and non-licensed persons.

“Indemnified Party” and “Indemnifying Party” have the meanings set forth in Section 7.1.

“Malpractice Coverage” has the meaning set forth in Section 7.3.

“Net Profits” and “Net Losses” mean the Partnership’s taxable income or loss, respectively, determined in accordance with Section 3.3.

“Practice” means the clinical medical practice operated by the Partnership.

“Principal Office” means the Partnership’s chief executive office located at [ADDRESS] or such other Maryland location as the Partners may designate.

“Withdrawal” means any Partner’s resignation, retirement, death, permanent incapacity, Bankruptcy Event, or other separation from the Partnership.

[// GUIDANCE: Add or delete defined terms as needed. Maintain alphabetical order.]

3. OPERATIVE PROVISIONS

3.1 Formation, Name, Purpose, Term

3.1.1 Formation. The Partners hereby form a general partnership under the Maryland Uniform Partnership Act, as amended.

3.1.2 Name. The Partnership shall conduct business under the name [PRACTICE NAME] (or such other name compliant with Maryland Board of Physicians regulations).

3.1.3 Purpose. The sole purpose of the Partnership is the delivery of medical services and ancillary services lawfully permitted to be provided by licensed physicians in Maryland, together with such activities reasonably incidental thereto.

3.1.4 Term. The term of the Partnership commences on the Effective Date and continues until dissolved in accordance with this Agreement or Applicable Law.

3.1.5 Compliance with Licensing. Each Partner shall at all times maintain an active, unrestricted license to practice medicine in Maryland and shall immediately notify the Managing Partner upon any threatened, proposed, or actual suspension, revocation, limitation, or probation of licensure.

3.2 Capital Contributions; Capital Accounts

3.2.1 Initial Contributions. On the Effective Date, each Partner shall contribute the cash and/or property set forth opposite such Partner’s name on Schedule A (the “Initial Contribution”). The fair-market value of any non-cash contribution shall be agreed in writing by all Partners.

3.2.2 Additional Contributions. If the Partnership requires additional capital, the Managing Partner may issue a written capital call, specifying the aggregate amount required and each Partner’s pro rata share. A Partner failing to timely fund such share shall be a Defaulting Partner under Section 6.1.

3.2.3 Capital Accounts. A separate Capital Account shall be maintained for each Partner consistent with the principles of Treasury Reg. §1.704-1(b)(2)(iv).

3.3 Allocation & Distribution of Profits and Losses

3.3.1 Allocations. Net Profits and Net Losses for each fiscal year shall be allocated among the Partners in proportion to their respective Percentage Interests set forth on Schedule A, unless otherwise required to comply with Code §704(c) or Treasury Regulations.

3.3.2 Distributions. Subject to Section 3.5 (Fee-Splitting Compliance) and retention of reasonable reserves, Net Cash Flow shall be distributed at least quarterly to the Partners in proportion to allocations under Section 3.3.1. No distribution shall be made if it would render the Partnership insolvent or violate Applicable Law.

3.3.3 Tax Advances. The Partnership shall, to the extent of available cash, distribute to each Partner an amount sufficient to cover the Partner’s estimated federal and state income tax liability attributable to allocations of Partnership income.

3.4 Management & Voting

3.4.1 Managing Partner. [NAME] is appointed the initial Managing Partner, responsible for day-to-day operations, subject to the oversight of the Partners. The Managing Partner may be removed, with or without cause, by affirmative vote of Partners holding more than fifty percent (50%) of the Percentage Interests.

3.4.2 Major Decisions. The following actions require unanimous written consent of the Partners: (a) admission of a new Partner; (b) merger, consolidation, or sale of substantially all assets; (c) dissolution; (d) amendment of this Agreement.

3.4.3 Other Matters. Except as otherwise provided, decisions shall be by majority of Percentage Interests. Meetings may be held in person or electronically upon at least five (5) business days’ notice.

3.5 Partner Compensation; Fee-Splitting Compliance

3.5.1 Compensation. Each Partner’s clinical compensation (if any) shall be paid pursuant to a separate Physician Employment Agreement or productivity formula approved in accordance with Section 3.4.

3.5.2 Fee-Splitting Compliance. Notwithstanding anything herein to the contrary, distributions and compensation arrangements shall be structured and administered to comply with all Fee-Splitting Laws. No Partner shall share fees with any individual or entity not duly licensed to practice medicine except as expressly permitted under Applicable Law.

3.5.3 Ancillary Income. Any income from ancillary services (e.g., imaging, laboratory) shall be distributed only in accordance with arrangements that satisfy Stark Law exceptions and Maryland counterparts.

3.6 Books, Records & Accounting

3.6.1 Fiscal Year. The Partnership’s fiscal year shall be the calendar year unless otherwise determined by the Partners.

3.6.2 Records. Complete and accurate books and records shall be maintained at the Principal Office and shall be available for inspection by any Partner upon reasonable notice.

3.6.3 Accountant. The Partnership shall retain a certified public accountant experienced in medical practices to prepare financial statements and tax returns.

4. REPRESENTATIONS & WARRANTIES

Each Partner represents and warrants to the others that, as of the Effective Date and on a continuing basis:

4.1 Authority. The Partner has full legal authority and capacity to enter into and perform this Agreement.

4.2 Licensure; Good Standing. The Partner is duly licensed to practice medicine in Maryland, is in good standing with the Maryland Board of Physicians, and has never been subject to a disciplinary action that would reasonably be expected to have a material adverse effect on the Partnership.

4.3 No Debarment. The Partner is not excluded from any federal health-care program and is not listed on the OIG or SAM exclusion lists.

4.4 Malpractice Coverage. The Partner maintains professional liability insurance (occurrence-based or claims-made with tail) meeting the minimum coverage amounts set forth in Section 7.3.

4.5 No Conflict. The execution, delivery, and performance of this Agreement do not conflict with any other agreement, court order, or Applicable Law binding on the Partner.

4.6 Survival. The representations and warranties in this Article 4 shall survive such Partner’s Withdrawal for a period of two (2) years.

5. COVENANTS & RESTRICTIONS

5.1 Compliance with Law. Each Partner shall comply with all Applicable Laws and professional standards in the performance of services for the Practice.

5.2 Maintenance of Licensure. Each Partner shall (i) complete continuing-education requirements, (ii) timely renew all licenses, and (iii) promptly inform the Managing Partner of any investigation, complaint, or disciplinary action.

5.3 Malpractice Insurance. Each Partner shall maintain Malpractice Coverage as set forth in Section 7.3.

5.4 Non-Solicitation. During the term of the Partnership and for twelve (12) months following Withdrawal, a Partner shall not knowingly solicit for employment any non-physician employee of the Practice without prior written consent of the Partnership.
[// GUIDANCE: Maryland has specific restrictions on physician non-competes in employment contexts; carefully tailor any non-compete language in light of current law. Non-solicitation provisions are generally more defensible.]

5.5 Confidentiality. Each Partner shall protect Confidential Information and comply with HIPAA and state privacy laws.

5.6 Policies & Procedures. Partners shall comply with the Partnership’s compliance plan, billing policies, and quality-assurance programs, as amended from time to time.

6. DEFAULT & REMEDIES

6.1 Events of Default

A Partner shall be in default (“Defaulting Partner”) upon:
a. Failure to make required capital contributions within fifteen (15) days after written notice;
b. Suspension, revocation, or restriction of medical license;
c. Exclusion from federal health-care programs;
d. Bankruptcy Event;
e. Material breach of this Agreement not cured within thirty (30) days after written notice.

6.2 Remedies

6.2.1 Mandatory Buy-Out. Upon any Event of Default (other than (d) or (e) resulting in dissolution), the Defaulting Partner shall be deemed to have offered to sell his or her Partnership Interest to the non-defaulting Partners at the lesser of (i) Fair Market Value determined by an independent appraiser, or (ii) book value. Closing shall occur within sixty (60) days.

6.2.2 Suspension of Distributions. Distributions to a Defaulting Partner may be suspended and applied to damages until the default is cured.

6.2.3 Monetary & Equitable Relief. The Partnership may pursue all legal and equitable remedies, including specific performance and injunctive relief.

6.2.4 Attorneys’ Fees. The prevailing party in any action arising under this Agreement shall recover its reasonable attorneys’ fees and costs.

7. RISK ALLOCATION

7.1 Indemnification (Malpractice-Indemnity)

7.1.1 Partner Indemnity. Each Partner (the “Indemnifying Party”) shall indemnify, defend, and hold harmless the Partnership, the other Partners, and their respective agents (each, an “Indemnified Party”) from and against any and all losses, liabilities, damages, claims, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to (a) the Indemnifying Party’s professional negligence, malpractice, or willful misconduct, or (b) breach of this Agreement.

7.1.2 Procedure. The Indemnified Party shall give the Indemnifying Party prompt written notice of any claim. Failure to give timely notice shall not relieve the Indemnifying Party of liability unless materially prejudiced.

7.2 Limitation of Liability (Malpractice Limits)

7.2.1 Liability Cap. Except for willful misconduct or fraud, the aggregate liability of any Partner to the Partnership or any other Partner for claims covered by the Partner’s Malpractice Coverage shall not exceed the greater of: (a) the limits of such coverage, or (b) [DOLLAR AMOUNT] per occurrence and [DOLLAR AMOUNT] in the aggregate.

7.2.2 Exclusions. The limitation in Section 7.2.1 shall not apply to distributions made in violation of this Agreement or Applicable Law.

7.3 Insurance Requirements

Each Partner shall, at all times, maintain professional liability insurance written on an occurrence basis (or, if claims-made, with tail coverage of at least five (5) years) with minimum limits of $[1,000,000] per claim and $[3,000,000] aggregate or such higher limits as may be required by Applicable Law or the Partnership’s lenders.

7.4 Force Majeure

No Partner shall be liable for failure to perform due to causes beyond reasonable control, including but not limited to acts of God, pandemic, war, labor disputes, or governmental orders, provided the affected Partner gives prompt notice and uses diligent efforts to resume performance.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland, without regard to conflicts-of-law principles.

8.2 Forum Selection. Subject to the arbitration provisions set forth below, the parties consent to the exclusive jurisdiction and venue of the state courts located in [COUNTY], Maryland for any action arising out of or relating to this Agreement.

8.3 Arbitration. Except for claims seeking injunctive relief or as otherwise provided herein, any dispute, controversy, or claim arising out of or relating to this Agreement shall be finally settled by confidential, binding arbitration administered by the AAA in accordance with the Arbitration Rules. The arbitration shall be conducted in [CITY], Maryland before a panel of three (3) arbitrators, at least one of whom shall be a licensed physician. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Injunctive Relief. Each party acknowledges that a breach of Articles 5 or 6 may cause irreparable harm not compensable by money damages and agrees that injunctive relief shall be available without posting bond.

8.5 Jury Waiver. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY [WAIVES / DOES NOT WAIVE] ANY RIGHT TO TRIAL BY JURY.
[// GUIDANCE: Maryland courts enforce contractual jury waivers when knowingly and voluntarily made. Remove or keep based on client preference.]

9. GENERAL PROVISIONS

9.1 Amendments. This Agreement may be amended only by a written instrument signed by all Partners.

9.2 Assignment. No Partner may assign, pledge, or otherwise transfer all or any portion of such Partner’s Interest, voluntarily or involuntarily, except as expressly permitted herein and in compliance with Maryland’s prohibition on ownership by non-licensed persons.

9.3 Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the Partners and their respective heirs, legal representatives, and permitted assigns.

9.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be interpreted to fulfill its intended purpose to the maximum extent permitted.

9.5 Entire Agreement. This Agreement, together with all schedules and exhibits, constitutes the entire agreement among the Partners with respect to the subject matter hereof and supersedes all prior understandings.

9.6 Waiver. No waiver of any provision shall be effective unless in writing, and no waiver shall be deemed a continuing waiver unless expressly so stated.

9.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures may be exchanged via facsimile, PDF, or electronic signature (e.g., DocuSign) with the same legal effect as originals.

9.8 Notices. All notices required or permitted hereunder shall be in writing and delivered (i) by hand with receipt, (ii) by nationally-recognized overnight courier, or (iii) by certified mail, return receipt requested, to the addresses set forth on Schedule B (or as updated by notice). Notice shall be effective on delivery or first refusal.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Partners have executed this Medical Practice Partnership Agreement as of the Effective Date.

[// GUIDANCE:
1. Consider notarization if required by lender, landlord, or state medical board.
2. If spouses hold community or marital property rights, obtain spousal consent signatures.
3. Attach Schedule A (Capital Contributions & Percentage Interests) and Schedule B (Addresses for Notice) before execution.]

(END OF DOCUMENT)