Medical Practice Sale Agreement

MEDICAL PRACTICE PURCHASE AND SALE AGREEMENT

AGREEMENT OVERVIEW

Agreement Date: [DATE]

Effective Date: [EFFECTIVE DATE]

Closing Date: [CLOSING DATE]

PARTIES

Seller

Name: [SELLER NAME / ENTITY NAME]

Entity Type: ☐ Individual ☐ Professional Corporation ☐ Professional LLC ☐ Partnership ☐ Other: [SPECIFY]

State of Organization: [STATE]

Principal Address:
[ADDRESS]
[CITY, STATE ZIP]

Tax ID: [EIN/SSN]

(Hereinafter referred to as "Seller")

Buyer

Name: [BUYER NAME / ENTITY NAME]

Entity Type: ☐ Individual ☐ Professional Corporation ☐ Professional LLC ☐ Partnership ☐ Other: [SPECIFY]

State of Organization: [STATE]

Principal Address:
[ADDRESS]
[CITY, STATE ZIP]

Tax ID: [EIN/SSN]

(Hereinafter referred to as "Buyer")

RECITALS

WHEREAS, Seller owns and operates a medical practice known as [PRACTICE NAME] (the "Practice"), located at [PRACTICE ADDRESS], specializing in [SPECIALTY];

WHEREAS, Seller desires to sell, and Buyer desires to purchase, certain assets of the Practice as described herein;

WHEREAS, the parties intend for this transaction to comply with all applicable federal and state healthcare laws, including the Stark Law and Anti-Kickback Statute;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1: DEFINITIONS

1.1 "Accounts Receivable" means all amounts owed to the Practice for services rendered prior to the Closing Date.

1.2 "Assets" means the Purchased Assets described in Article 2.

1.3 "Business Day" means any day other than Saturday, Sunday, or a federal holiday.

1.4 "Closing" means the consummation of the transactions contemplated by this Agreement.

1.5 "Closing Date" means [DATE], or such other date as the parties may agree.

1.6 "Fair Market Value" means the value determined by an independent, qualified appraiser, consistent with Stark Law requirements.

1.7 "Goodwill" means the value of the Practice's reputation, patient relationships, referral sources, and going concern value.

1.8 "Medical Records" means all patient medical records maintained by the Practice.

1.9 "Payor Contracts" means agreements with Medicare, Medicaid, commercial insurers, and other third-party payors.

1.10 "Practice" means the medical practice business operated by Seller at [ADDRESS].

1.11 "Purchase Price" has the meaning set forth in Article 3.

ARTICLE 2: PURCHASED ASSETS

2.1 Assets Included

Subject to the terms of this Agreement, Seller agrees to sell, transfer, and convey to Buyer, and Buyer agrees to purchase from Seller, the following assets (the "Purchased Assets"):

☐ (a) Tangible Personal Property: All furniture, fixtures, medical equipment, office equipment, supplies, and other tangible personal property owned by Seller and used in the Practice, as listed in Exhibit A;

☐ (b) Goodwill: The goodwill of the Practice, including the value of the patient base and referral relationships;

☐ (c) Practice Name: The right to use the name "[PRACTICE NAME]" and any associated trade names, trademarks, and service marks;

☐ (d) Medical Records: The medical records of the Practice, subject to patient consent and HIPAA requirements (see Article 7);

☐ (e) Telephone Numbers and Website: All telephone numbers, fax numbers, email addresses, domain names, and website associated with the Practice;

☐ (f) Inventory: Medical and office supplies on hand as of the Closing Date;

☐ (g) Prepaid Expenses: Prepaid rent, insurance, and other prepaid expenses to the extent transferable;

☐ (h) Contracts: Assigned contracts as listed in Exhibit B, to the extent assignable;

☐ (i) Payor Contracts: Rights under payor contracts to the extent assignable or subject to Buyer obtaining new contracts;

☐ (j) Computer Systems and Software: Computer hardware and software used in the Practice, subject to license restrictions;

☐ (k) Patient Lists: Lists of active and inactive patients;

☐ (l) Books and Records: Financial records, patient lists, correspondence, and other business records (excluding Excluded Assets).

2.2 Excluded Assets

The following assets are excluded from this sale and shall be retained by Seller (the "Excluded Assets"):

☐ (a) Cash and cash equivalents;

☐ (b) Accounts Receivable for services rendered prior to the Closing Date (unless otherwise agreed in Section 3.3);

☐ (c) Personal property of Seller not used in the Practice;

☐ (d) Tax refunds and tax attributes of Seller;

☐ (e) Seller's rights under this Agreement;

☐ (f) Employment agreements with Seller;

☐ (g) Insurance policies of Seller (except as specifically assigned);

☐ (h) [OTHER EXCLUDED ASSETS];

☐ (i) Any assets listed in Exhibit C.

ARTICLE 3: PURCHASE PRICE AND PAYMENT

3.1 Purchase Price

The total purchase price for the Purchased Assets is [DOLLAR AMOUNT] ($[AMOUNT]) (the "Purchase Price").

3.2 Allocation of Purchase Price

The Purchase Price shall be allocated among the Purchased Assets as follows:

The parties agree to report this allocation on their respective tax returns in accordance with Section 1060 of the Internal Revenue Code.

3.3 Payment Terms

The Purchase Price shall be paid as follows:

☐ (a) Earnest Money Deposit: $[AMOUNT] upon execution of this Agreement, to be held in escrow by [ESCROW AGENT];

☐ (b) Cash at Closing: $[AMOUNT] in immediately available funds at Closing;

☐ (c) Promissory Note: $[AMOUNT] pursuant to a Promissory Note in the form attached as Exhibit D, payable over [TERM] at [INTEREST RATE]% interest;

☐ (d) Seller Financing: [DESCRIBE TERMS];

☐ (e) Accounts Receivable Purchase (if applicable): Buyer shall purchase Accounts Receivable at [PERCENTAGE]% of face value: $[AMOUNT].

3.4 Adjustments

The Purchase Price shall be adjusted at Closing for:

☐ Prorated rent, utilities, and other operating expenses
☐ Prepaid expenses transferred to Buyer
☐ Inventory adjustment based on physical count
☐ [OTHER ADJUSTMENTS]

ARTICLE 4: REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

4.1 Organization and Authority

☐ Seller has full power and authority to enter into this Agreement and consummate the transactions contemplated herein.

☐ The execution and performance of this Agreement has been duly authorized by all necessary action.

4.2 Title to Assets

☐ Seller has good and marketable title to the Purchased Assets, free and clear of all liens, encumbrances, and security interests, except as disclosed in Exhibit E.

4.3 Compliance with Laws

☐ The Practice has been operated in compliance with all applicable federal, state, and local laws, including healthcare regulatory laws.

☐ Seller is not aware of any pending or threatened investigations by any regulatory agency.

4.4 Licensure

☐ Seller holds all licenses and permits necessary to operate the Practice, all of which are in good standing.

☐ Seller's medical license is active and unrestricted.

4.5 Medicare/Medicaid Participation

☐ Seller/Practice is enrolled and in good standing with Medicare and [APPLICABLE] Medicaid programs.

☐ Seller has not been excluded or debarred from any federal healthcare program.

☐ There are no pending audits, investigations, or overpayment demands.

4.6 Litigation

☐ There is no pending or threatened litigation against Seller or the Practice, except as disclosed in Exhibit F.

☐ There are no pending or threatened malpractice claims, except as disclosed in Exhibit F.

4.7 Taxes

☐ Seller has filed all required tax returns and paid all taxes due.

4.8 Financial Information

☐ The financial statements provided to Buyer are true, correct, and complete in all material respects.

4.9 Employee Matters

☐ Seller has provided accurate information regarding all employees, including compensation and benefits.

☐ Seller is in compliance with all employment laws.

4.10 Contracts

☐ Seller has provided copies of all material contracts, and all such contracts are in full force and effect.

4.11 HIPAA Compliance

☐ Seller has complied with HIPAA Privacy and Security Rules.

☐ Seller has not experienced any reportable breaches of patient information.

4.12 Fair Market Value

☐ The Purchase Price represents fair market value for the Purchased Assets.

ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

☐ Buyer has full power and authority to enter into this Agreement.

☐ Buyer holds or will obtain all licenses necessary to operate the Practice.

☐ Buyer has sufficient financial resources to consummate this transaction.

☐ Buyer is not excluded from any federal healthcare program.

ARTICLE 6: COVENANTS

6.1 Conduct of Practice Before Closing

Seller covenants that from the Agreement Date until Closing:

☐ Seller will operate the Practice in the ordinary course of business;

☐ Seller will maintain all insurance coverage;

☐ Seller will not dispose of any Purchased Assets outside the ordinary course;

☐ Seller will not enter into any material contracts without Buyer's consent.

6.2 Access and Information

☐ Seller will provide Buyer reasonable access to the Practice, records, and personnel for due diligence purposes.

6.3 Notification to Patients

☐ Seller and Buyer will jointly notify patients of the transition in accordance with Article 7.

6.4 Employee Transition

☐ Buyer agrees to offer employment to the employees listed in Exhibit G on substantially similar terms.

☐ Seller agrees to terminate employees at Closing as requested by Buyer.

ARTICLE 7: PATIENT RECORDS AND HIPAA COMPLIANCE

7.1 Patient Notification

☐ Seller and Buyer will jointly send written notice to all active patients at least [30/60/90] days before Closing, informing them of the change in ownership and their options regarding medical records.

☐ Notice will comply with state medical board requirements and HIPAA.

7.2 Transfer of Medical Records

☐ Medical records will be transferred to Buyer as the successor healthcare provider;

☐ Patients may request transfer of records to another provider;

☐ Buyer agrees to maintain records in accordance with HIPAA and state retention requirements;

☐ Buyer agrees to provide Seller access to records as necessary for defense of malpractice claims.

7.3 HIPAA Business Associate

☐ If necessary, the parties will execute a Business Associate Agreement.

7.4 Patient Consent

☐ Patient consent for transfer of records is ☐ Required ☐ Not required under state law.

ARTICLE 8: RESTRICTIVE COVENANTS

8.1 Covenant Not to Compete

Seller agrees that for a period of [NUMBER] years after the Closing Date, Seller will not:

☐ Practice medicine (in the specialty of [SPECIALTY]) within a [NUMBER]-mile radius of the Practice location;

☐ Solicit or treat patients of the Practice;

☐ Solicit employees of the Practice.

8.2 Non-Solicitation

Seller agrees not to solicit or encourage any employee of the Practice to terminate employment for a period of [NUMBER] years after Closing.

8.3 Confidentiality

Seller agrees to maintain the confidentiality of all proprietary information of the Practice.

8.4 Enforcement

The parties acknowledge that the restrictive covenants are reasonable and necessary to protect Buyer's investment. Buyer shall be entitled to injunctive relief in addition to other remedies.

ARTICLE 9: CONDITIONS TO CLOSING

9.1 Conditions to Buyer's Obligations

Buyer's obligation to close is subject to:

☐ All representations and warranties of Seller being true at Closing;

☐ Seller's performance of all covenants;

☐ No material adverse change in the Practice;

☐ Buyer obtaining necessary licenses and approvals;

☐ Buyer obtaining financing (if applicable);

☐ Satisfactory due diligence review;

☐ Assignment or transfer of key contracts.

9.2 Conditions to Seller's Obligations

Seller's obligation to close is subject to:

☐ All representations and warranties of Buyer being true at Closing;

☐ Buyer's performance of all covenants;

☐ Receipt of the Purchase Price.

ARTICLE 10: CLOSING

10.1 Closing Date and Location

Closing shall occur on [DATE] at [LOCATION], or remotely via escrow.

10.2 Seller's Closing Deliveries

☐ Bill of Sale for Purchased Assets
☐ Assignment of contracts
☐ Assignment of practice name
☐ Keys, access codes, passwords
☐ Patient notification confirmation
☐ HIPAA-compliant medical records
☐ Certificates of good standing
☐ Non-compete agreement (if separate)
☐ Other: [SPECIFY]

10.3 Buyer's Closing Deliveries

☐ Purchase Price payment
☐ Assumption of contracts
☐ Evidence of licensure
☐ Evidence of malpractice insurance
☐ Other: [SPECIFY]

ARTICLE 11: TRANSITION ASSISTANCE

11.1 Transition Period

Seller agrees to provide transition assistance for [NUMBER] days/months after Closing, including:

☐ Introduction to patients and referral sources
☐ Consultation on practice operations
☐ [OTHER ASSISTANCE]

11.2 Compensation for Transition Services

☐ Transition services are included in Purchase Price
☐ Seller will be compensated at $[AMOUNT] per [HOUR/DAY]

ARTICLE 12: INDEMNIFICATION

12.1 Seller's Indemnification

Seller agrees to indemnify Buyer against:

☐ Breach of Seller's representations, warranties, or covenants;
☐ Liabilities arising from operation of Practice prior to Closing;
☐ Malpractice claims for services rendered prior to Closing;
☐ Pre-Closing tax liabilities.

12.2 Buyer's Indemnification

Buyer agrees to indemnify Seller against:

☐ Breach of Buyer's representations, warranties, or covenants;
☐ Liabilities arising from operation of Practice after Closing;
☐ Assumed liabilities.

12.3 Survival

Representations, warranties, and indemnification obligations survive Closing for [NUMBER] years.

ARTICLE 13: GENERAL PROVISIONS

13.1 Regulatory Compliance

This Agreement is intended to comply with all applicable healthcare laws, including the Stark Law and Anti-Kickback Statute. The Purchase Price reflects fair market value and is not determined by the volume or value of referrals.

13.2 Governing Law

This Agreement shall be governed by the laws of the State of [STATE].

13.3 Entire Agreement

This Agreement constitutes the entire agreement between the parties.

13.4 Amendment

No amendment shall be effective unless in writing signed by both parties.

13.5 Assignment

Neither party may assign this Agreement without consent.

13.6 Notices

All notices shall be in writing and sent to the addresses above.

13.7 Counterparts

This Agreement may be executed in counterparts.

SIGNATURES

SELLER:

Signature: ______________________________________

Name: [NAME]

Title: [TITLE]

Date: ______________

BUYER:

Signature: ______________________________________

Name: [NAME]

Title: [TITLE]

Date: ______________

EXHIBITS

☐ Exhibit A: Equipment and Tangible Assets
☐ Exhibit B: Assigned Contracts
☐ Exhibit C: Excluded Assets
☐ Exhibit D: Promissory Note (if applicable)
☐ Exhibit E: Liens and Encumbrances
☐ Exhibit F: Litigation and Malpractice Claims
☐ Exhibit G: Employee List
☐ Exhibit H: Patient Notification Letter