Charles A. and Marian L. Derby, et al. - Page 19




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          perform an analysis of the "Davis Medical Group * * * , a group             
          medical practice (currently being formed) comprised of thirty-              
          five primary care physicians" and to render an opinion regarding            
          "the fair market value of the aggregate assets of * * * [the                
          Davis Medical Group] exclusive of any benefit or element of value           
          conferred upon Sutter [Health] as a consequence of its current or           
          proposed relationship with * * * [Davis Medical Group], and with            
          consideration of proposed posttransaction compensation and                  
          benefits to the physician group."  Houlihan also agreed to                  
          "allocate the appraised value of * * * [Davis Medical Group] to             
          each of its physician/shareholders" using a method to be agreed             
          upon in consultation with the UHMG steering committee, but the              
          agreed-upon method "[had to] be acceptable" to Houlihan.  The               
          retainer agreement further provided that Houlihan would arrange             
          for an appraisal of the hard assets by a qualified third party,             
          for a separate fee.                                                         
               Second, shortly after Houlihan was retained, a corporation             
          was formed to serve as the entity for the medical group to be               
          formed by certain of the UHMG physicians, including petitioners,            
          for purposes of the acquisition of their medical practices by               
          SMF.  On April 19, 1994, the Community Health Associates                    
          Multispecialty Medical Group, Inc. (d.b.a. Sutter West Medical              
          Group), was incorporated as a California professional medical               
          corporation (SWMG).                                                         







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