MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(New Jersey – Comprehensive Template)

[// GUIDANCE: This template is drafted for a multi-physician partnership engaged in the practice of medicine in the State of New Jersey. It assumes the entity will operate as a general partnership or professional limited liability company (“PLLC”) owned exclusively by licensed physicians, in accordance with New Jersey’s corporate-practice-of-medicine doctrine. All bracketed items must be customized prior to execution.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1. Agreement Title
   Medical Practice Partnership Agreement (the “Agreement”)

2. Parties
   This Agreement is entered into by and among:
   • [PARTNER A NAME], M.D., a physician licensed and in good standing in the State of New Jersey (“Partner A”); and
   • [PARTNER B NAME], M.D., a physician licensed and in good standing in the State of New Jersey (“Partner B”)
   (each, a “Partner,” and collectively, the “Partners”).

3. Effective Date
   This Agreement is effective as of [EFFECTIVE DATE] (the “Effective Date”).

4. Recitals
   A. The Partners are duly licensed physicians who desire to associate together for the purpose of practicing medicine in the State of New Jersey under the name [PRACTICE NAME] (the “Practice”).
   B. The Partners wish to set forth their respective rights and obligations and to comply with all applicable laws, including New Jersey licensing requirements, corporate practice restrictions, and fee-splitting rules.
   NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Partners agree as follows:

II. DEFINITIONS

The following terms have the meanings set forth below and apply throughout this Agreement:

“AAA” means the American Arbitration Association.
“Adjusted Net Income” – Net Income reduced by (i) debt principal payments, (ii) equipment lease obligations, and (iii) capital expenditures approved under Section 3.10.
“Agreement” – This Medical Practice Partnership Agreement, as amended from time to time.
“Arbitration Rules” – The AAA Healthcare Payor Provider Arbitration Rules, or if unavailable, the AAA Commercial Arbitration Rules.
“Capital Account” – A bookkeeping account maintained for each Partner in accordance with Section 3.5.
“Capital Contribution” – Cash, property, or services contributed (or agreed to be contributed) by a Partner under Section 3.4.
“Event of Default” – Any event listed in Section 6.1.
“Fiscal Year” – The twelve-month period ending [MONTH/DAY] each year, unless otherwise changed by unanimous vote.
“Malpractice Claim” – Any claim alleging professional negligence, violation of standard of care, or other professional liability arising out of medical services rendered (or omitted) by a Partner or the Practice.
“Malpractice Insurance Limits” – The per-occurrence and aggregate coverage limits maintained under Section 7.3.
“Net Income” – The Practice’s gross revenues less ordinary and necessary business expenses, as determined under generally accepted accounting principles (“GAAP”), excluding Partners’ draw or salary.
“Non-Compete Territory” – A radius of [__] miles from [PRIMARY OFFICE ADDRESS], or any county contiguous thereto.
“Partner” – A party to this Agreement admitted as such pursuant to Article III or Article VI.
“Partnership Interest” – A Partner’s percentage interest in profits, losses, capital and voting, initially set forth on Exhibit A.
“Regulatory Authority” – The New Jersey State Board of Medical Examiners and any successor agency having jurisdiction over the Practice.
“Withdrawal Date” – The effective date of resignation, retirement, expulsion, or other cessation of Partner status.

[// GUIDANCE: Expand or modify definitions as required by the transaction.]

III. OPERATIVE PROVISIONS

3.1 Formation; Purpose
(a) The Partners hereby form a medical practice partnership (the “Partnership”) under the laws of the State of New Jersey for the exclusive purpose of rendering medical services and ancillary activities permissible for physicians.
(b) The Partnership shall not engage in activities prohibited by the corporate-practice-of-medicine doctrine or fee-splitting prohibitions.

3.2 Name; Principal Place of Business
(a) The Practice shall conduct business under the name [PRACTICE NAME], or any other lawful name approved by the Partners.
(b) The principal office shall be [ADDRESS], with additional offices as approved under Section 3.9.

3.3 Term
The Partnership shall commence on the Effective Date and shall continue until dissolved under Section 6.4.

3.4 Capital Contributions
(a) Initial Contributions. On or before the Effective Date, each Partner shall contribute the amounts set forth on Exhibit A.
(b) Additional Contributions. Additional Capital Contributions require a [UNANIMOUS / MAJORITY-IN-INTEREST] vote.

3.5 Capital Accounts; Allocations
(a) A Capital Account shall be maintained for each Partner.
(b) Profits and losses shall be allocated in proportion to Partnership Interests unless otherwise agreed in writing.

3.6 Distributions
(a) Quarterly Draws. Subject to adequate working capital, Net Income shall be distributed no less frequently than quarterly.
(b) Tax Distributions. The Partnership shall make estimated tax distributions sufficient to cover each Partner’s pass-through tax liability.

3.7 Management and Voting
(a) Ordinary Course decisions require a majority vote by Partnership Interest.
(b) Extraordinary Matters (e.g., merger, dissolution, admitting new partners, sale of substantially all assets) require a unanimous vote.

3.8 Partner Compensation for Services
(a) Base Compensation. Each Partner shall be entitled to an annual base compensation of $[___], payable semimonthly.
(b) Productivity Bonus. A Partner generating collections exceeding [THRESHOLD] in any Fiscal Year shall receive [__]% of such excess.
[// GUIDANCE: Ensure compensation model complies with NJ fee-splitting rules; profits may be shared among physician-owners, but direct remuneration linked to referrals or revenue from non-owners is prohibited.]

3.9 Additional Offices; Ancillary Services
Opening a satellite office, surgery center, or offering ancillary services (e.g., imaging, laboratory) requires compliance with applicable licensing and Stark/Anti-Kickback regulations and a [MAJORITY / UNANIMOUS] Partner vote.

3.10 Major Expenditures
Capital expenditures exceeding $[THRESHOLD] require [MAJORITY / UNANIMOUS] approval.

3.11 Admission of New Partners
(a) Eligibility. Only physicians duly licensed in New Jersey and approved by the Regulatory Authority may be admitted.
(b) Admission Terms. Admission shall be evidenced by a joinder agreement and requisite Capital Contribution.

3.12 Withdrawal and Retirement
(a) Voluntary Withdrawal requires [180] days’ prior written notice.
(b) Retirement Age. A Partner may elect to retire on or after attaining age [__] with [__] years of service.
(c) Buy-Out. Upon withdrawal or retirement, the Partnership shall purchase the departing Partner’s interest pursuant to Section 6.3.

IV. REPRESENTATIONS & WARRANTIES

4.1 Each Partner represents and warrants that:
(a) Licensing. The Partner holds an unrestricted New Jersey medical license and is not subject to disciplinary action.
(b) Authority. The Partner has full authority to enter into and perform under this Agreement.
(c) No Conflict. Execution and performance of this Agreement do not violate any other agreement or court order binding on the Partner.
(d) Malpractice Coverage. The Partner maintains, and will continue to maintain, malpractice insurance satisfying Section 7.3.

4.2 Survival. These representations and warranties survive the Effective Date and continue until the earlier of the Partner’s Withdrawal Date or dissolution of the Partnership.

V. COVENANTS & RESTRICTIONS

5.1 Compliance with Laws
Each Partner shall at all times:
(a) Maintain an active medical license in New Jersey;
(b) Comply with standards of professional conduct, HIPAA, CMS rules, OSHA, CLIA, and all applicable state regulations;
(c) Refrain from fee-splitting or entering into referral arrangements that violate New Jersey law.

5.2 Continuing Medical Education
Each Partner shall complete the minimum CME hours required by the Regulatory Authority.

5.3 Non-Competition; Non-Solicitation
(a) During the term and for [__] years after the Withdrawal Date, a Partner shall not practice medicine within the Non-Compete Territory in competition with the Partnership, except as permitted in Section 5.3(c).
(b) A Partner shall not solicit the Partnership’s patients, employees, or referral sources for the same period.
(c) Carve-Outs. Emergency medicine, academic appointments, or governmental service may be exempt with prior Partner approval.
[// GUIDANCE: Tailor scope, duration, and geography to meet reasonableness standards under New Jersey law.]

5.4 Records; Access; Confidentiality
(a) All medical and business records are property of the Partnership.
(b) Partners shall maintain confidentiality of Protected Health Information (“PHI”) and proprietary business information.

5.5 Notice; Cure
Partners must give written notice of any potential regulatory violation or Event of Default within five (5) business days of discovery and cooperate in any cure.

VI. DEFAULT & REMEDIES

6.1 Events of Default
(a) Revocation, suspension, or restriction of a Partner’s medical license;
(b) Conviction of a felony or crime of moral turpitude;
(c) Malpractice judgment or settlement exceeding Malpractice Insurance Limits;
(d) Failure to make Capital Contributions when due;
(e) Material breach of this Agreement not cured within thirty (30) days of notice.

6.2 Interim Relief
Upon an Event of Default, the non-defaulting Partners may vote to (i) suspend voting rights, (ii) withhold distributions, and/or (iii) place the defaulting Partner on administrative leave.

6.3 Buy-Out of Defaulting Partner
(a) Purchase Price. The defaulting Partner’s interest shall be purchased at [__]% of Fair Market Value (“FMV”), less damages attributable to the default.
(b) Payment Terms. Ten percent (10%) down within thirty (30) days; balance amortized over [3] years at [Prime + ___%].

6.4 Dissolution
The Partnership may be dissolved upon:
(a) Unanimous Partner vote;
(b) Final adjudication rendering the Practice unlawful;
(c) Bankruptcy of the Partnership.

6.5 Attorneys’ Fees
The prevailing party in any action arising under this Agreement is entitled to reasonable attorneys’ fees and costs.

VII. RISK ALLOCATION

7.1 Indemnification
(a) Partnership Indemnity. Subject to Section 7.2, the Partnership shall indemnify each Partner against any Malpractice Claim arising from acts within the scope of Partnership duties, to the extent covered by insurance.
(b) Partner Indemnity. Each Partner shall indemnify the Partnership and the other Partners for (i) acts of gross negligence or willful misconduct, (ii) violations of law, or (iii) breaches of this Agreement.

7.2 Limitation of Liability
Except for (i) gross negligence, (ii) willful misconduct, (iii) fraud, or (iv) amounts in excess of Malpractice Insurance Limits, no Partner shall be liable to the Partnership or any other Partner for monetary damages.

7.3 Insurance Requirements
(a) Each Partner shall maintain occurrence-based professional liability insurance with limits of not less than $[1,000,000] per claim and $[3,000,000] aggregate, or such higher limits as required by the Regulatory Authority or hospital credentialing bodies.
(b) Tail Coverage. A Partner departing the Partnership shall obtain tail coverage extending at least [__] years beyond the Withdrawal Date.

7.4 Force Majeure
A party shall not be liable for failure to perform due to events beyond its reasonable control, including natural disasters, pandemics, governmental actions, or acts of terrorism. Obligations resume upon cessation of the force majeure event.

VIII. DISPUTE RESOLUTION

8.1 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey (“state_medical_law”), without regard to conflict-of-law principles.

8.2 Forum Selection & Injunctive Relief
(a) For temporary, preliminary, or permanent injunctive relief, the parties submit to the exclusive jurisdiction of the state courts located in [COUNTY], New Jersey (“state_court”).
(b) Nothing herein limits a party’s right to seek equitable relief in such courts.

8.3 Arbitration
(a) Subject to Section 8.2, any Dispute shall be resolved by confidential, binding arbitration administered by the AAA in [CITY], New Jersey under the Arbitration Rules.
(b) The arbitral tribunal shall consist of one (1) arbitrator with at least ten (10) years’ experience in healthcare law.
(c) The arbitrator may grant any remedy available at law or in equity, including specific performance.
(d) Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Jury Trial Waiver
[OPTIONAL – INCLUDE IF DESIRED] EACH PARTY HEREBY VOLUNTARILY, KNOWINGLY, AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

IX. GENERAL PROVISIONS

9.1 Amendments and Waivers
No amendment or waiver is effective unless in writing and signed by [all / the requisite percentage of] Partners.

9.2 Assignment
A Partner may not assign or delegate any rights or obligations under this Agreement without unanimous written consent of the Partners.

9.3 Successors and Assigns
This Agreement binds and benefits the Partners and their permitted successors and assigns.

9.4 Severability
If any provision is held unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to effectuate the parties’ intent.

9.5 Entire Agreement
This Agreement, including all Exhibits and Schedules, constitutes the entire understanding among the Partners and supersedes all prior agreements.

9.6 Counterparts; Electronic Signatures
This Agreement may be executed in counterparts (including by electronic means), each of which is deemed an original and together constitute one instrument.

9.7 Notices
Notices must be in writing and delivered (i) by certified mail, return receipt requested, (ii) by nationally recognized overnight courier, or (iii) by email with confirmation of receipt, to the addresses set forth on Exhibit A.

X. EXECUTION BLOCK

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

[Add additional signature lines as needed]

[Notary Block if required under entity formation statute]
STATE OF NEW JERSEY )
: SS:
COUNTY OF ___ )

On this ___ day of _, 20_, before me, a Notary Public, personally appeared ____, known to me or satisfactorily proven to be the person(s) whose name(s) are subscribed to this instrument, and acknowledged that he/she/they executed the same for the purposes therein contained.

Notary Public
My Commission Expires: _______

EXHIBIT A

Initial Capital Contributions, Partnership Interests, and Notice Addresses

[// GUIDANCE:
1. File appropriate formation/registration documents with NJ Division of Revenue & Enterprise Services (e.g., Certificate of Formation for PLLC) within 30 days of execution.
2. Submit registration and roster of licensees to the State Board of Medical Examiners.
3. Review anti-kickback, Stark, and NJ fee-splitting regulations before implementing ancillary service lines or compensation models.
4. Verify malpractice insurance carriers meet New Jersey Department of Banking & Insurance requirements.
5. Tailor non-compete clause to reasonable duration/geography to enhance enforceability under New Jersey law.]