MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(State of Washington)

[// GUIDANCE: This template is drafted for a professional general partnership of licensed physicians practicing medicine in the State of Washington (“WA”). If the parties will operate through a Professional Limited Liability Company (PLLC) or Professional Service Corporation (PSC) instead, convert the entity references accordingly and confirm compliance with RCW Title 18 and Title 25 corporate‐practice provisions.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
    1. Formation; Purpose; Term
    2. Capital Contributions; Ownership Percentages
    3. Governance and Management
    4. Compensation; Distributions; Financial Matters
    5. Partner Admissions, Withdrawals & Expulsions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

Medical Practice Partnership Agreement (the “Agreement”) made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and among:

1. Dr. [NAME], M.D., Washington Medical License No. [NUMBER];
2. Dr. [NAME], M.D., Washington Medical License No. [NUMBER];
   (additional partners, if any, each a “Partner” and collectively, the “Partners”)

Recitals

A. The Partners are each duly licensed to practice medicine in WA and desire to associate together as a professional partnership for the purpose of practicing medicine and related healthcare services.

B. The Partners intend that this Agreement govern their rights and obligations and establish the terms upon which the Partnership (as defined below) shall operate.

C. The Partners acknowledge that WA law restricts the practice of medicine to licensed individuals and imposes limits on corporate practice, fee‐splitting, and other professional conduct.

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:

II. DEFINITIONS

For ease of reference, capitalized terms have the meanings set forth below or elsewhere in this Agreement. Defined terms appear alphabetically.

“Accounting Period” – Each fiscal quarter ending on [LAST DAY OF MARCH/JUNE/SEPTEMBER/DECEMBER] unless otherwise determined by the Management Committee.

“Applicable Law” – All statutes, regulations, and professional rules governing the practice of medicine and the operation of professional partnerships in WA, including but not limited to licensing, fee‐splitting, corporate practice, privacy, and billing requirements.

“Arbitration Rules” – The Commercial Arbitration Rules of the [AMERICAN ARBITRATION ASSOCIATION/JAMS] then in effect.

“Capital Contribution” – The aggregate cash, property, or services (or promissory obligation to contribute the same) contributed by a Partner to the Partnership, as reflected on Schedule 1.

“Management Committee” – The governing body described in Section III.3.

“Malpractice Claim” – Any claim, demand, suit, or proceeding alleging professional negligence, malpractice, or violation of professional standards relating to medical services rendered or omitted by a Partner or the Partnership.

“Net Profits” / “Net Losses” – The Partnership’s taxable income or loss for the Accounting Period, adjusted as provided in Section III.4.

“Partnership” – The professional general partnership formed pursuant to Section III.1.

“Withdrawal Date” – The effective date of a Partner’s dissociation pursuant to Section III.5.

[// GUIDANCE: Add, delete, or revise definitions to conform to actual practice structure.]

III. OPERATIVE PROVISIONS

1. Formation; Purpose; Term

1.1 Formation. The Partners hereby form a professional general partnership under WA law to be known as [PRACTICE NAME] (or such other name as the Partners may lawfully adopt) effective as of the Effective Date.

1.2 Purpose. The Partnership’s purpose is to engage exclusively in the practice of medicine and such ancillary healthcare activities as are permitted under Applicable Law.

1.3 Term. The Partnership shall commence on the Effective Date and shall continue until dissolved under Section III.5 or Applicable Law.

2. Capital Contributions; Ownership Percentages

2.1 Initial Contributions. Each Partner shall contribute the amount set forth opposite such Partner’s name on Schedule 1 on or before [DATE].

2.2 Additional Contributions. The Management Committee may, with [MAJORITY/SUPERMAJORITY] Vote, require additional pro-rata capital contributions. Failure to timely contribute constitutes a Default under Section VI.

2.3 Ownership Percentages. Each Partner’s Percentage Interest shall equal the ratio of such Partner’s aggregate Capital Contributions to the aggregate Capital Contributions of all Partners, as adjusted for additional contributions or redemptions.

3. Governance and Management

3.1 Management Committee. A Management Committee composed of [NUMBER] Partners shall manage the Partnership’s day-to-day affairs. Committee members shall be elected annually by [MAJORITY] vote of all Partners.

3.2 Voting. Except as expressly provided, Partnership actions require a majority vote of Percentage Interests. Matters enumerated in Schedule 2 (e.g., admission of new Partners, merger, sale of substantial assets) require a [SUPERMAJORITY (e.g., 75%)] vote.

3.3 Practice Administrator. The Management Committee may engage a non-partner practice administrator; however, medical decisions remain under Partner control in compliance with WA corporate practice restrictions.

3.4 Banking Authority. Funds shall be maintained in accounts titled in the Partnership’s name, with dual-signature authority as designated by the Management Committee.

4. Compensation; Distributions; Financial Matters

4.1 Draws & Guaranteed Payments. Each Partner shall be entitled to periodic draws against anticipated Net Profits in accordance with the budget adopted by the Management Committee.

4.2 Net Profit Allocation. Net Profits and Net Losses shall be allocated among Partners pro rata based on Percentage Interests unless modified by a written compensation plan approved by the Partners.

4.3 Compliance with Fee-Splitting Rules. No distribution or compensation arrangement may violate WA prohibitions on fee splitting or unlawful patient referral inducements.

4.4 Accounting Method; Fiscal Year. The Partnership shall use the [CASH/ACCRUAL] method of accounting and a fiscal year ending [MONTH DAY].

4.5 Financial Statements. Internally prepared monthly financials and annual statements reviewed by an independent CPA shall be delivered to Partners within [NUMBER] days after period end.

5. Partner Admissions, Withdrawals & Expulsions

5.1 Admission of New Partners. New Partners may be admitted only pursuant to a written joinder agreement and compliance with licensing requirements and Section V.

5.2 Voluntary Withdrawal. A Partner may withdraw upon [90-/120-] days’ prior written notice. The withdrawing Partner’s Account shall be settled per Schedule 3.

5.3 Expulsion for Cause. Grounds include: (a) suspension, restriction, or loss of medical license; (b) commission of a felony; (c) repeated material breach of this Agreement; or (d) acts subjecting the Partnership to public censure. Expulsion requires [SUPERMAJORITY] vote and written notice stating reasons.

5.4 Death or Disability. Upon death or “Disability” (inability to practice medicine for [180] consecutive days), the affected Partner (or Partner’s estate) shall be redeemed in accordance with Schedule 3.

IV. REPRESENTATIONS & WARRANTIES

Each Partner severally represents and warrants to the others and to the Partnership that, as of the Effective Date and continuously thereafter:

1. Licensure. The Partner is, and shall remain, duly licensed and in good standing to practice medicine in WA.
2. No Restrictions. The Partner is not subject to any contractual or legal restriction that would impair such Partner’s ability to perform hereunder.
3. Professional Standards. The Partner will render services in compliance with the standard of care applicable to physicians practicing in WA and consistent with Applicable Law.
4. Authority. The Partner has all requisite power and authority to enter into this Agreement and to perform hereunder.

The representations and warranties shall survive the Partner’s Withdrawal Date for a period of [TWO] years, except for malpractice matters, which shall survive for the applicable statute of limitations.

V. COVENANTS & RESTRICTIONS

5.1 Compliance. Each Partner shall:
a. Maintain an active, unrestricted WA medical license and all DEA registrations.
b. Abide by all Applicable Law, including privacy, billing, and anti-kickback rules.
c. Not engage in any activity constituting the unlicensed corporate practice of medicine.

5.2 Non-Competition. During the term of the Partnership and for [ONE] year thereafter, no Partner shall establish or practice at a competing medical office within a [X-mile] radius of [PRIMARY PRACTICE ADDRESS], except as approved by [SUPERMAJORITY] vote.

5.3 Non-Solicitation. For [TWO] years following the Withdrawal Date, a former Partner shall not solicit employees, contractors, or patients of the Partnership.

5.4 Confidentiality. Each Partner shall protect Confidential Information in accordance with HIPAA and state privacy regulations.

5.5 Insurance. The Partnership shall maintain professional liability insurance with limits of at least [$ AMOUNT] per claim/[$ AMOUNT] aggregate. Each Partner shall be a named insured.

VI. DEFAULT & REMEDIES

6.1 Events of Default. The occurrence of any of the following constitutes a “Default”:
a. Failure to timely make a required Capital Contribution.
b. Material breach of any covenant, representation, or warranty that remains uncured [30] days after written notice.
c. License suspension, revocation, or material limitation.
d. Filing of a voluntary or involuntary bankruptcy petition.

6.2 Notice & Cure. The non-defaulting Partners shall deliver written notice specifying the Default and allowing the defaulting Partner the applicable cure period.

6.3 Remedies. Upon Default, the non-defaulting Partners may, in addition to any other remedy at law or equity:
a. Suspend the defaulting Partner’s voting and distribution rights;
b. Require immediate repayment of outstanding draws;
c. Expel the defaulting Partner under Section III.5.3;
d. Seek specific performance, injunction, or damages, including attorneys’ fees per Section VI.4.

6.4 Attorneys’ Fees. The prevailing party in any action arising out of this Agreement shall recover reasonable attorneys’ fees and costs.

VII. RISK ALLOCATION

7.1 Indemnification for Malpractice. Each Partner (“Indemnitor”) shall indemnify, defend, and hold harmless the Partnership and the other Partners (“Indemnitees”) from any Malpractice Claim attributable to the Indemnitor’s professional services or omissions, except to the extent covered by the Partnership’s professional liability insurance.

7.2 Limitation of Liability. Except for willful misconduct, fraud, or uninsured Malpractice Claims, each Partner’s liability to the Partnership and the other Partners shall not exceed the lesser of:
a. The limits of available professional liability insurance; or
b. The Indemnitor’s aggregate Capital Contributions.

7.3 Force Majeure. No Partner shall be liable for failure to perform due to events beyond the Partner’s reasonable control (e.g., natural disasters, governmental orders, or pandemics) that make performance illegal or impossible, provided the Partner promptly notifies the others and resumes performance when feasible.

VIII. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement and any dispute hereunder shall be governed by the medical practice and partnership laws of the State of Washington, without regard to conflict-of-laws principles.

8.2 Forum Selection. Except as provided in Section 8.3, the state courts located in [COUNTY], WA shall have exclusive jurisdiction over any action arising out of or relating to this Agreement.

8.3 Arbitration. At the election of any Partner, any dispute (other than (i) applications for injunctive relief or (ii) disputes solely concerning a Partner’s medical licensure) shall be finally resolved by confidential binding arbitration administered in [CITY, WA] under the Arbitration Rules. Judgment on the arbitral award may be entered in any court of competent jurisdiction.

8.4 Jury Waiver. To the extent permitted by law, the Partners knowingly and voluntarily waive any right to a jury trial.

8.5 Injunctive Relief. Nothing herein shall preclude a Partner from seeking temporary, preliminary, or permanent injunctive relief in state court to protect confidential information, enforce non-competition or non-solicitation covenants, or prevent irreparable harm.

IX. GENERAL PROVISIONS

9.1 Amendments. This Agreement may be amended only by a written instrument signed by Partners holding at least [SUPERMAJORITY]% of the Percentage Interests.

9.2 Waivers. No waiver shall be effective unless in writing and signed by the waiving Partner. A waiver on one occasion is not a waiver on any other occasion.

9.3 Assignment. No Partner may assign or delegate any rights or obligations hereunder without the prior written consent of all other Partners, except as expressly provided in Section III.5.

9.4 Successors & Assigns. Subject to Section 9.3, this Agreement shall be binding upon and inure to the benefit of the Partners and their respective heirs, personal representatives, successors, and permitted assigns.

9.5 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be deemed modified only to the extent necessary to render it enforceable.

9.6 Integration. This Agreement (including Schedules) constitutes the entire agreement among the Partners with respect to the Partnership and supersedes all prior oral or written understandings.

9.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original, and all of which together constitute one and the same instrument. Electronic signatures shall be deemed originals for all purposes.

9.8 Notices. All notices 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 4, or as later changed by written notice.

X. EXECUTION BLOCK

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

[Seal/Notary block if required by local recording or bank charter requirements]

SCHEDULE 1

Initial Capital Contributions & Percentage Interests

SCHEDULE 2

Major Decisions Requiring Supermajority Vote
1. Merger, consolidation, or dissolution
2. Admission of a new Partner
3. Sale or lease of all or substantially all assets
4. Amendment of non-competition radius or duration
5. Incurring debt exceeding $[THRESHOLD]

SCHEDULE 3

Partner Redemption/Buy-Out Formula
[// GUIDANCE: Insert valuation methodology—e.g., trailing 24-month average of EBITDA × multiplier, minus debt, plus/minus working capital adjustments—and payment schedule.]

SCHEDULE 4

Partner Notice Addresses
| Partner | Address | Email | Telephone |
|---------|---------|-------|-----------|
| Dr. [NAME] | [ ] | [ ] | [ ] |

[// GUIDANCE: Attach additional exhibits (e.g., compensation plan, compliance policies, HIPAA business associate agreements) as needed.]

END OF DOCUMENT