Presenters: Robert Goodman Managing Partner The Mansfield Group Peter Myhre President MarCap Corporation

1. ELA Healthcare Finance SummitSeptember 13-14, 2005 Outpatient Ambulatory Care Presenters: Robert Goodman Managing Partner The Mansfield Group Peter MyhrePresident MarCap Corporation

2. Overview: Outpatient Ambulatory Care MarketRobert Goodman Financial Health of Market ParticipantsPeter Myhre How Providers Are Obtaining EquipmentRobert Goodman Structures That Work BestPeter Myhre Question and Answer Session

3. Outpatient Ambulatory care services – 35 years in the making Trends in ambulatory care services Growth remains strong Ownership continues to be varied – physicians, management companies and/or hospitals Competition — saturated markets

4. Outpatient ambulatory care market Diagnostic imaging – MRI, CT, PET/CTas well as other imaging modalities Surgery – single specialty and multi-specialty centers Treatment – radiation therapy, dialysis and physical therapy

5. Provider (borrower) profile Typically single purpose entities established by physicians, management- development companies and hospitals  Usually limited liability companies; often joint ventures between two or three of the parties noted above Generally stand-alone facilities and most often start-ups

6. Provider cash flows  Revenues = patient procedure/scans x related reimbursement  Expenses – largely fixed; debt service and staffing are the most significant outflows Profitability – once breakeven revenue is exceeded, majority of incremental revenue drops to the bottom line

7. Risk considerations  Commitment - equity and guarantees  Patient referrals – the right physician specialties  Self-referral restrictions – state and federal  Payor risk – contracting and reimbursement

8. Manufacturers/vendors profile  Manufacturers and vendors vary significantly in financial strength  Dominant full line manufacturers are Siemens, GE, Philips and Toshiba  Variety of single line/specialty manufacturers

9. Evaluating vendor risk  Strength of business - financial statements, and installed base  Equipment – reliability and operating costs  Sales force – direct and distribution  Service/repair – quality and capability  Potential fraud – management and motivations

10. Equipment financing options and project financing options Business Plan – business case or rationale behind equipment purchase or project Equipment: – Cash (equity) – Capital leases and loans –FMV leasing –Per-use

11. Project: – Cash (equity) – Capital leases and loans • –FMV leasing for major equipment (MRI, PET, linear accelerators, etc.) • – Working capital lines of credit, primary and back-up (surgery centers vs. diagnostic imaging centers)

12. Debt sources Leasing companies Captive finance organizations (e.g., Siemens and GE) Local and regional banks

13. Lease Structures  60 to 84 month terms Payment deferral until reimbursement ramps-up  Interim funding  Equipment and tenant improvements

14. Differentiating products Working capital Acquisition funding Physician equity financing Differentiating terms Limited to no personal guarantees Guarantee burn off  No covenants

15. Risk management terms  Blanket lien including A/R  Subordination of payments to owners  Covenants before making distributions  Assignment of tenant’s rights

16. Robert Goodman The Mansfield Group6 Oak Tree Court Westampton, NJ 08060609.267.0990www.mansfield-group.com Peter MyhreMarCap Corporation 200 West Jackson, Suite 2000 Chicago, Illinois 60606 800.621.1677 www.marcapcorp.com