MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Tennessee)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

THIS MEDICAL PRACTICE PARTNERSHIP AGREEMENT (this “Agreement”) is entered into and made effective as of [EFFECTIVE DATE] (the “Effective Date”), by and among the following licensed physicians (each, a “Partner,” and collectively, the “Partners”):

• [PARTNER 1 NAME], M.D., a Tennessee-licensed physician (License No. [])
• [PARTNER 2 NAME], M.D., a Tennessee-licensed physician (License No. [])
• [ADDITIONAL PARTNERS, if any]

The Partners hereby agree to form and operate a professional partnership pursuant to the laws of the State of Tennessee for the purpose of practicing medicine and engaging in all lawful activities ancillary thereto.

Recitals
A. The Partners are each duly licensed to practice medicine in Tennessee and desire to associate themselves as a partnership for the operation of a medical practice (the “Practice”).
B. The Partners wish to set forth their respective rights and obligations with respect to the Practice, all in accordance with Tennessee medical, partnership, and professional entity laws.
C. The Partners acknowledge that Tennessee imposes specific requirements regarding practice licensure, corporate practice of medicine restrictions, and prohibitions on fee-splitting, all of which are addressed herein.

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

2. DEFINITIONS

[// GUIDANCE: Add, delete, or modify defined terms to suit the specific transaction.]

“AAA” means the American Arbitration Association.
“Affiliate” means any entity controlling, controlled by, or under common control with a Partner.
“Agreement” means this Medical Practice Partnership Agreement, as amended from time to time.
“Arbitration Rules” means the AAA Healthcare Payor Provider Arbitration Rules or such other AAA rules as the Partners may select by unanimous written consent.
“Capital Account” has the meaning set forth in Section 3.4(c).
“Cause” has the meaning set forth in Section 6.1(b).
“Covered Claim” means any malpractice claim or proceeding arising out of professional services rendered or to be rendered by the Practice or any Partner.
“Fee-Splitting Laws” means all Tennessee statutes, regulations, and medical board rules prohibiting the division of professional fees with persons or entities that are not licensed to practice medicine.
“Governing Law” has the meaning set forth in Section 8.1.
“Involuntary Withdrawal” has the meaning set forth in Section 6.1(a).
“Licensed Physician” means an individual who holds an active, unrestricted license to practice medicine in the State of Tennessee.
“Malpractice Insurance” has the meaning set forth in Section 7.3(a).
“Partner” or “Partners” has the meaning set forth in the introductory paragraph.
“Partnership” has the meaning set forth in Section 3.1.
“Practice” has the meaning set forth in Recital A.
“Required Percentage” means more than fifty percent (50%) of the Percentage Interests of the Partners, unless a higher threshold is expressly provided herein.
“Term” has the meaning set forth in Section 3.2.

3. OPERATIVE PROVISIONS

3.1 Formation; Name; Purpose

(a) Formation. The Partners hereby form a Tennessee general partnership (the “Partnership”) effective as of the Effective Date.
(b) Name. The Partnership shall conduct its business under the name “[PRACTICE NAME], A Medical Partnership,” or such other name as the Partners may unanimously approve, provided such name complies with Tennessee law.
(c) Purpose. The sole purpose of the Partnership is the practice of medicine and ancillary services that may be lawfully rendered by Licensed Physicians in Tennessee.

3.2 Term

The term of the Partnership (the “Term”) shall commence on the Effective Date and shall continue until dissolved pursuant to Section 6.4.

3.3 Principal Office; Additional Facilities

The principal office shall be located at [ADDRESS]. The Partners may establish additional offices or satellite clinics as approved by the Required Percentage.

3.4 Capital Contributions

(a) Initial Contributions. Upon execution of this Agreement, each Partner shall contribute the cash, property, or services set forth opposite such Partner’s name on Schedule A.
(b) Additional Capital. No Partner shall be required to contribute additional capital without such Partner’s written consent. Additional contributions shall be credited to each contributing Partner’s Capital Account.
(c) Capital Accounts. A separate Capital Account shall be maintained for each Partner in accordance with generally accepted accounting principles (GAAP).

3.5 Allocation of Profits and Losses; Distributions

(a) Profits and losses shall be allocated in proportion to the Partners’ respective Percentage Interests as set forth on Schedule A, unless otherwise unanimously agreed in writing.
(b) Distributions of available cash shall be made no less frequently than quarterly, subject to reasonable reserves for working capital, debt service, malpractice premiums, and other anticipated expenses.

3.6 Banking; Fiscal Year

All Partnership funds shall be deposited in accounts in the name of the Partnership at financial institutions selected by the Required Percentage. The fiscal year shall be the calendar year unless otherwise required by law.

3.7 Management and Voting

(a) Management Committee. Day-to-day operations shall be supervised by a Management Committee composed of [NUMBER] Partners elected annually by the Required Percentage.
(b) Voting. Except as otherwise provided herein, matters requiring Partner approval shall be decided by the Required Percentage.
(c) Meetings. Regular meetings shall be held at least quarterly upon [NUMBER] days’ prior written notice.

3.8 Licensure and Regulatory Compliance

(a) Each Partner shall at all times maintain an active, unrestricted Tennessee medical license.
(b) The Partnership shall comply with all Tennessee Medical Practice Act requirements, Tennessee Board of Medical Examiners rules, and any other applicable federal or state statutes or regulations.
(c) Corporate Practice Restriction. No person other than a Licensed Physician may own any direct or indirect equity interest in the Partnership or exercise control over the clinical aspects of the Practice.
(d) Fee-Splitting Compliance. The Partnership shall not enter any arrangement prohibited by the Tennessee fee-splitting laws. Any revenue-sharing or referral arrangement must be structured in accordance with applicable safe harbors.

3.9 Partner Compensation

In addition to profit distributions, Partners may receive draw payments or productivity-based compensation pursuant to the compensation plan adopted by unanimous Partner approval and attached as Schedule B.

3.10 Employment of Non-Physician Practitioners

The Partnership may employ nurse practitioners, physician assistants, and other allied health professionals, provided such employment complies with Tennessee supervisory and collaboration requirements.

3.11 Medical Records; HIPAA

All medical records are property of the Partnership and shall be maintained in compliance with HIPAA, applicable Tennessee confidentiality statutes, and professional standards.

3.12 Insurance Requirements

The Partnership shall procure and maintain policies as set forth in Section 7.3, including professional liability insurance with tail coverage for all Partners.

3.13 Conditions Precedent

The obligations of each Partner under this Agreement are conditioned upon:
(i) verification of each Partner’s unrestricted Tennessee medical license;
(ii) confirmation of professional liability coverage in the required amounts; and
(iii) execution of this Agreement and all related schedules.

4. REPRESENTATIONS & WARRANTIES

Each Partner represents and warrants to the other Partners that, as of the Effective Date and continuing during the Term:
(a) the Partner is a Licensed Physician in good standing with the Tennessee Board of Medical Examiners;
(b) the Partner has full power and authority to enter into and perform this Agreement;
(c) the execution of this Agreement does not violate any other agreement or court order binding upon the Partner;
(d) there are no disciplinary actions pending against the Partner that would impair the Partner’s ability to perform hereunder.

Survival. The representations and warranties in this Section 4 shall survive the execution of this Agreement and any transfer of a Partner’s interest for a period of [TWO (2)] years.

5. COVENANTS & RESTRICTIONS

5.1 Maintenance of License

Each Partner shall immediately notify the Management Committee of any investigation, suspension, or restriction of such Partner’s medical license.

5.2 Compliance with Corporate Practice Restriction

Partners shall not permit any non-physician to exercise control over medical decision-making or hold any ownership interest in the Partnership.

5.3 Restrictive Covenants

(a) Non-Competition. During the Term and for [TWO (2)] years thereafter, a withdrawing Partner shall not practice medicine within a radius of [___] miles of any office of the Practice, subject to Tennessee’s reasonableness requirements and any applicable statutory limitations.
(b) Non-Solicitation. A withdrawing Partner shall not solicit any patients or employees of the Practice for the same period stated above.
[// GUIDANCE: Confirm enforceability of covenants under current TN law; consider blue-penciling language.]

5.4 Confidentiality; HIPAA

Partners shall maintain the confidentiality of all patient information in compliance with HIPAA and applicable Tennessee law.

5.5 Fee-Splitting Compliance

No Partner shall enter into, or cause the Practice to enter into, any arrangement that violates Tennessee’s fee-splitting prohibitions. Any doubt regarding compliance shall be resolved by obtaining written legal opinion prior to implementation.

5.6 Notice of Proceedings

Each Partner shall promptly provide notice of any malpractice claim, governmental investigation, or disciplinary proceeding relating to such Partner.

6. DEFAULT & REMEDIES

6.1 Events of Default

(a) Involuntary Withdrawal. The occurrence of any of the following shall constitute an “Involuntary Withdrawal”:
(i) loss, suspension, or restriction of a Partner’s medical license that materially impairs the Partner’s ability to practice;
(ii) conviction of a felony or crime of moral turpitude;
(iii) entry of an adverse malpractice judgment in excess of Malpractice Insurance limits;
(iv) permanent disability (as defined in Schedule C).
(b) Cause. “Cause” includes any material breach of this Agreement that remains uncured after [30] days’ written notice.

6.2 Notice and Cure

Except in cases of immediate threat to patient safety, a defaulting Partner shall have the opportunity to cure within the period specified in the notice of default.

6.3 Remedies

Upon an Event of Default, the non-defaulting Partners may, by Required Percentage:
(i) suspend the defaulting Partner’s participation in management;
(ii) require the defaulting Partner to be bought out pursuant to the valuation mechanism in Schedule D;
(iii) pursue injunctive relief to prevent further harm; and/or
(iv) recover attorney fees and costs under Section 6.5.

6.4 Dissolution and Winding Up

The Partnership shall dissolve only upon:
(a) unanimous written consent of the Partners;
(b) entry of a final, non-appealable order requiring dissolution; or
(c) occurrence of an event that makes the Partnership’s purpose unlawful.

6.5 Attorney Fees

The prevailing party in any action or arbitration arising out of this Agreement shall be entitled to recover reasonable attorney fees and costs.

7. RISK ALLOCATION

7.1 Indemnification

(a) Malpractice Indemnity. Each Partner (“Indemnifying Partner”) shall indemnify, defend, and hold harmless the Partnership and the other Partners from any Covered Claim arising out of such Indemnifying Partner’s professional negligence or willful misconduct, to the extent not covered by Malpractice Insurance.
(b) Procedure. The indemnified party shall promptly notify the Indemnifying Partner and cooperate in the defense.

7.2 Limitation of Liability

Except for malpractice claims and breaches of Sections 5.3 (Restrictive Covenants) or 5.4 (Confidentiality), each Partner’s aggregate liability under this Agreement shall be limited to the greater of:
(i) the limits of such Partner’s Malpractice Insurance, or
(ii) such Partner’s total Capital Contributions.

7.3 Insurance

(a) Malpractice Insurance. The Partnership 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 the Partners may agree.
(b) Tail Coverage. Withdrawing Partners shall obtain extended-reporting (“tail”) coverage for a period of at least [TWO (2)] years post-withdrawal.
(c) General Liability and Property. The Partnership shall maintain appropriate general liability, property, and cyber liability insurance.

7.4 Force Majeure

No Partner shall be liable for delays or failures in performance (other than payment obligations) due to causes beyond such Partner’s reasonable control, including acts of God, pandemics, or governmental orders.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement and any dispute arising hereunder shall be governed by the laws of the State of Tennessee, without regard to its conflict-of-laws principles (“Governing Law”).

8.2 Forum Selection

Subject to Section 8.3, the state courts of [COUNTY], Tennessee, shall have exclusive jurisdiction over all actions arising out of this Agreement.

8.3 Arbitration

(a) Any dispute that cannot be resolved by the Partners within [30] days shall be submitted to binding arbitration administered by the AAA in [CITY], Tennessee, in accordance with the Arbitration Rules.
(b) The arbitration panel shall consist of three (3) arbitrators, each of whom shall be a Licensed Physician or an attorney experienced in health-care disputes.
(c) The arbitrators shall have authority to grant injunctive relief consistent with Section 8.4.

8.4 Injunctive Relief

Notwithstanding Section 8.3, either party may seek temporary, preliminary, or permanent injunctive relief in the courts specified in Section 8.2 to protect confidential information or enforce restrictive covenants.

8.5 Jury Trial Waiver

[OPTIONAL—STRIKE IF UNDESIRED] EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.

9. GENERAL PROVISIONS

9.1 Amendments and Waivers

No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by all Partners.

9.2 Assignment

No Partner may assign, pledge, or otherwise transfer such Partner’s interest in the Partnership except as provided in this Agreement.

9.3 Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the Partners and their respective successors and permitted assigns.

9.4 Severability

If any provision is declared invalid under Tennessee law, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to comply with law.

9.5 Integration

This Agreement, together with all Schedules hereto, constitutes the entire agreement among the Partners with respect to the subject matter hereof and supersedes all prior agreements.

9.6 Counterparts; Electronic Signatures

This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures delivered by facsimile, PDF, or electronic signature platform shall be deemed original signatures.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Partners have executed this Agreement effective as of the Effective Date.

[NOTARY BLOCK — include if notarization is desired or required]

SCHEDULES

• Schedule A – Capital Contributions and Percentage Interests
• Schedule B – Compensation Plan
• Schedule C – Disability Definition and Determination Procedure
• Schedule D – Valuation and Buy-Out Methodology
[// GUIDANCE: Attach exhibits tailored to the Practice’s specific financial and operational requirements.]

[// GUIDANCE: This template is intended for use by licensed attorneys. Prior to implementation, confirm compliance with the most current Tennessee statutes, regulations, and medical board guidance regarding practice structure, corporate practice restrictions, and fee-splitting rules.]