MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Pennsylvania – Comprehensive Form)

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

[// GUIDANCE: Auto-generate page numbers and cross-references prior to final issuance.]

I. DOCUMENT HEADER

1. Parties.
   This Medical Practice Partnership Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and among:
   a. [PARTNER A NAME], M.D., a Pennsylvania-licensed physician, residing at [ADDRESS];
   b. [PARTNER B NAME], M.D., a Pennsylvania-licensed physician, residing at [ADDRESS];
   c. [ADDITIONAL PARTNERS, if any] (each, a “Partner,” and collectively, the “Partners”).

2. Recitals.
   A. The Partners desire to associate as a general partnership under the laws of the Commonwealth of Pennsylvania for the purpose of practicing medicine in conformity with the Pennsylvania Medical Practice Act of 1985, 63 Pa. Stat. Ann. § 422.1 et seq., and related regulations.
   B. The Partners wish to set forth their respective rights and obligations, and to establish procedures for governance, profit sharing, risk allocation, and dispute resolution.
   NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners agree as follows.

II. DEFINITIONS

Unless otherwise indicated, capitalized terms have the meanings set forth below. Defined terms appear alphabetically for ease of reference.

1. “Accountant” – The independent certified public accountant appointed pursuant to Section III.11.
2. “Act” – The Pennsylvania Uniform Partnership Act, 15 Pa. Cons. Stat. § 8411 et seq., as amended.
3. “Adjusted Capital Account” – Each Partner’s Capital Account maintained in accordance with Section III.5.
4. “Arbitration Rules” – The then-current Commercial Arbitration Rules of the American Arbitration Association (“AAA”).
5. “Capital Contribution” – The aggregate cash, property, and services contributed by a Partner pursuant to Section III.4.
6. “Clinic” – The primary place of business of the Partnership located at [ADDRESS].
7. “Fiscal Year” – The 12-month period ending each [MONTH/DAY].
8. “Malpractice Claim” – Any actual or threatened claim for professional negligence or medical malpractice arising out of the Partnership’s clinical operations.
9. “Notice” – Written notice delivered in accordance with Section IX.4.
10. “Partnership” – The general partnership formed pursuant to Section III.1 and named [PRACTICE NAME].
11. “Partnership Percentage” – A Partner’s percentage share of profits, losses, and voting power, initially set forth in Section III.3(b) and adjusted as provided herein.
12. “Restricted Period” – The period specified in Section V.4(a) for post-termination restrictive covenants.

[// GUIDANCE: Add further definitions as needed for ancillary agreements (e.g., buy-sell, real estate leases).]

III. OPERATIVE PROVISIONS

1. Formation; Name; Purpose.
   a. The Partners hereby form the Partnership under the Act.
   b. Name: [FULL LEGAL NAME, M.D., PARTNERSHIP] or such other name as the Partners may unanimously approve, subject to registration with the Pennsylvania Department of State and compliance with 49 Pa. Code § 17.1 et seq. (business name approval).
   c. Purpose: To engage exclusively in the practice of medicine and all lawful activities incidental thereto, consistent with (i) 63 Pa. Stat. Ann. § 422.11 (licensing requirements); (ii) the corporate practice prohibitions and professional entity exceptions under 15 Pa. Cons. Stat. § 2921; and (iii) applicable fee-splitting restrictions under 49 Pa. Code § 16.61.

2. Principal Place of Business. The Partnership shall maintain its principal office at the Clinic or such other location within Pennsylvania as determined by Majority Vote (defined in Section III.7).

3. Term. The Partnership shall commence on the Effective Date and continue until dissolved pursuant to Section VI.6.

4. Capital Contributions.
   a. Initial Contributions. Each Partner shall contribute the amount set forth opposite his or her name on Schedule 1 within five (5) business days after the Effective Date.
   b. Additional Contributions. Additional Capital Contributions require unanimous approval.

5. Capital Accounts. Capital Accounts shall be maintained in accordance with the Internal Revenue Code, Treasury Regulations § 1.704-1(b)(2)(iv), and GAAP.

6. Profits and Losses. Profits and losses shall be allocated to the Partners pro rata in accordance with their respective Partnership Percentages.

7. Management and Voting.
   a. Day-to-day clinical and administrative decisions are delegated to the Managing Partner initially designated as [NAME].
   b. “Majority Vote” means Partners holding more than fifty percent (50%) of the aggregate Partnership Percentages. Matters outside ordinary course require Majority Vote; major actions (mergers, dissolution, admitting new Partners) require Unanimous Consent.

8. Meetings. Regular meetings shall be held at least quarterly upon seven (7) days’ Notice.

9. Bank Accounts & Funds Handling. All Partnership funds shall be deposited in accounts titled in the Partnership’s name. Withdrawal authority shall be limited to two signatories, one of whom must be the Managing Partner.

10. Compensation & Draws.
    a. Base Draw: Each Partner shall be entitled to monthly draws of $[AMOUNT] against anticipated annual distributions.
    b. Bonus Pool: After payment of expenses, including required malpractice premiums, any remaining net income shall be distributed within ninety (90) days after Fiscal Year end according to Partnership Percentages.

11. Books, Records, and Accounting. Complete and accurate books shall be maintained at the principal office. The Accountant shall prepare annual financial statements within sixty (60) days after Fiscal Year end.

12. Compliance with Laws. The Partnership and each Partner shall:
    i. Maintain all licenses required by the Act;
    ii. Operate through an authorized professional entity if subsequently converted;
    iii. Refrain from engaging in impermissible fee-splitting, referral, or kickback arrangements in violation of 49 Pa. Code § 16.61 and applicable federal law (e.g., 42 U.S.C. § 1320a-7b).

13. Conditions Precedent. This Agreement is conditioned upon (a) receipt of satisfactory malpractice insurance certificates per Section VII.3; and (b) satisfactory results of credentialing and background checks.

[// GUIDANCE: Insert optional schedules for equipment leases, ancillary service lines, or property ownership structures.]

IV. REPRESENTATIONS & WARRANTIES

1. Authority and Capacity. Each Partner represents and warrants that:
   a. He or she is duly licensed to practice medicine in Pennsylvania, holds an active DEA registration, and is in good standing with all applicable boards.
   b. Execution of this Agreement does not violate any other agreement or legal obligation.

2. No Disciplinary Actions. No Partner is currently subject to any investigation, suspension, or disciplinary action by any governmental or accrediting body except as disclosed on Schedule 2.

3. Solvency; No Insolvency Proceedings. Each Partner is solvent and not the subject of any bankruptcy or receivership proceeding.

4. Survival. The representations and warranties in this Article IV survive Closing for a period of two (2) years, except those relating to licensure, which survive indefinitely.

V. COVENANTS & RESTRICTIONS

1. Licensure Maintenance. Each Partner shall maintain an unrestricted Pennsylvania medical license and all requisite hospital privileges.

2. Insurance. Partners shall obtain and keep in force professional liability insurance with minimum coverage limits of $[1,000,000]/$[3,000,000] per claim/aggregate or such higher limits as may be required by 40 Pa. Stat. § 1301.701.

3. Compliance Program. The Partnership shall implement a written compliance program addressing HIPAA, Stark Law, Anti-Kickback Statute, PA fee-splitting restrictions, and billing regulations.

4. Restrictive Covenants.
   a. Non-Competition. During the term of the Partnership and for the Restricted Period of [12–24] months thereafter, no Partner shall directly or indirectly practice medicine within a [x-mile] radius of the Clinic, except as otherwise permitted under 63 Pa. Stat. Ann. § 422.41 (reasonableness requirement).
   b. Non-Solicitation & Non-Interference. For the same Restricted Period, no Partner shall solicit patients or employees of the Partnership.

5. Confidentiality. Partners shall keep confidential all patient information and proprietary business data.

6. Admission of New Partners. Admission requires (i) Unanimous Consent and (ii) execution of a joinder agreement.

7. Withdrawal. Voluntary withdrawal requires 120 days’ prior Notice and compliance with the buy-sell provisions of Schedule 3.

VI. DEFAULT & REMEDIES

1. Events of Default.
   a. Suspension or revocation of a Partner’s medical license.
   b. Commission of a felony or professional misconduct involving moral turpitude.
   c. Monetary default exceeding $[AMOUNT] not cured within ten (10) days after Notice.
   d. Material breach of any covenant hereunder not cured within thirty (30) days after Notice.

2. Cure Procedures. The non-defaulting Partners may grant written extensions for good cause.

3. Remedies. Upon an Event of Default:
   i. Suspension of distribution rights;
   ii. Mandatory buy-out under Schedule 3 at a discount of [X]%;
   iii. Injunctive relief;
   iv. Specific performance.

4. Attorney Fees. The prevailing party in any enforcement action is entitled to reasonable attorney fees and costs.

5. Gradation of Remedies. Remedies are cumulative and may be exercised sequentially or concurrently.

6. Dissolution. The Partnership shall dissolve upon (i) Unanimous Consent, (ii) final judgment of illegality, or (iii) as required by law.

VII. RISK ALLOCATION

1. Indemnification.
   a. Mutual Malpractice Indemnity. The Partnership shall indemnify each Partner, and each Partner shall indemnify the Partnership and the other Partners, for any Malpractice Claim to the extent of the indemnifying party’s negligence or willful misconduct.
   b. Third-Party Claims. Prompt Notice of any claim is required; failure to give timely Notice relieves the indemnifying party only to the extent prejudiced.

2. Limitation of Liability. Except for (i) willful misconduct, (ii) fraud, or (iii) malpractice exceeding insurance coverage, liability of any Partner to the Partnership or the other Partners is capped at the greater of:
   a. Two (2) times such Partner’s aggregate Capital Contributions; or
   b. The insurance limits required under Section V.2.

3. Insurance Requirements.
   i. Professional liability coverage per Section V.2.
   ii. General commercial liability of not less than $[1,000,000] per occurrence.
   iii. Tail coverage upon withdrawal or dissolution.

4. Force Majeure. No Partner shall be liable for failure to perform due to events beyond reasonable control, including public health emergencies, provided that prompt Notice is given and reasonable efforts to mitigate are undertaken.

VIII. DISPUTE RESOLUTION

1. Governing Law. This Agreement is governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to its conflict-of-laws provisions.

2. Forum Selection. Subject to Section VIII.3, any action not subject to arbitration shall be brought exclusively in the Court of Common Pleas of [COUNTY] County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania.

3. Arbitration.
   a. Mandatory Binding Arbitration. Except for (i) applications for temporary, preliminary, or permanent injunctive relief, and (ii) actions to compel arbitration or enforce an arbitral award, any dispute arising under this Agreement shall be resolved by binding arbitration before one (1) arbitrator in [CITY, PA] administered by the AAA under the Arbitration Rules.
   b. Consolidation. Related claims shall be consolidated to the fullest extent permitted.
   c. Confidentiality. The arbitration and any decision are confidential.
   d. Judgment. The award may be entered in any court of competent jurisdiction.

4. Jury Waiver. TO THE EXTENT PERMITTED BY LAW, EACH PARTY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF THIS AGREEMENT.

5. Injunctive Relief. Nothing herein limits a party’s right to seek injunctive relief in a court of competent jurisdiction to prevent a breach of Articles V or VI.

IX. GENERAL PROVISIONS

1. Amendment & Waiver.
   a. Amendments require Unanimous Consent and must be in writing.
   b. Any waiver must be in writing and signed by the party to be bound.

2. Assignment. No Partner may assign or encumber his or her Partnership interest except as expressly provided herein.

3. Successors & Assigns. This Agreement binds and inures to the benefit of the Partners and their respective heirs, legal representatives, and permitted assigns.

4. Notices. All Notices shall be in writing and delivered (i) personally, (ii) by certified mail (return receipt requested), or (iii) by nationally recognized overnight courier to the addresses set forth above, or as later changed by Notice.

5. Severability. If any provision is held invalid, the remaining provisions shall be enforced to the maximum extent possible, and the invalid provision shall be reformed to achieve its original intent within legal limits.

6. Integration. This Agreement, including Schedules and ancillary documents, constitutes the entire agreement among the Partners with respect to the subject matter and supersedes all prior understandings.

7. Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures delivered via electronic means (e.g., PDF, DocuSign) are deemed original.

8. Headings. Headings are for convenience only and do not affect interpretation.

X. EXECUTION BLOCK

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

[// GUIDANCE: Notarization is not statutorily required for partnership agreements in PA but may be added for evidentiary purposes.]

SCHEDULE 1 – INITIAL CAPITAL CONTRIBUTIONS

(To be completed at Closing)

SCHEDULE 2 – DISCLOSURE OF DISCIPLINARY ACTIONS

(Attach details or state “None.”)

SCHEDULE 3 – BUY-SELL / WITHDRAWAL TERMS

[// GUIDANCE: Include valuation formula, payment schedule, non-compete reaffirmation, and tail insurance funding.]

[// GUIDANCE: Review state-specific updates (e.g., amendments to PA Medical Practice Act or recent Board regulations) prior to final issuance. Ensure ancillary documents—employment agreements, HIPAA BAA, lease—align with this Agreement.]