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2. Professional Services Agreement (PSA)
SWMG thereupon entered into a Professional Services
Agreement (PSA) with SMF on August 12, 1994, to become effective
on November 1, 1994, subject to the conditions precedent that at
least 25 primary care physicians associated with the UHMG IPA
would become shareholder-employees of SWMG and sell their medical
practices to SMF under prescribed asset purchase agreements. The
PSA had a 2-year term, subject to renewal. Pursuant to the PSA,
SWMG agreed to provide professional services through its member
physicians exclusively to the patients of SMF's group practice
program in a prescribed service area, generally the Davis,
California, region, so as to become part of a comprehensive
health care delivery system involving SMG, SWMG, and Sutter
Health's hospitals and other health care facilities. The
physicians rendering the professional services on behalf of SWMG
were to be under contract with SWMG pursuant to agreements
complying with the terms of the PSA, which included the proviso
that the physicians would provide professional services solely to
SMF (through SWMG), with an exception for reasonable amounts of
unpaid volunteer work. SMF agreed to provide and maintain clinic
locations and equipment, all necessary nonphysician personnel,
professional liability insurance coverage, and accounting and
billing services, as well as maintenance of patient records.
Under the PSA, all patients seen by the SWMG shareholder
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Last modified: March 27, 2008