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As Filed With the Securities and Exchange Commission on January 27, 2011

Registration No. 333-170100

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 3
to

Form S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

OnCure Holdings, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  8011
(Primary Standard Industrial
Classification Code Number)
  20-5211697
(I.R.S. Employer
Identification Number)

188 Inverness Drive West, Suite 650
Englewood, Colorado 80112
(303) 643-6500
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Russell D. Phillips, Jr.
Executive Vice President, General Counsel and Chief Compliance Officer
OnCure Holdings, Inc.
18100 Von Karman Ave., Suite 450
Irvine, CA 92612
(949) 863-8820
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Patrick H. Shannon
Latham & Watkins LLP
555 Eleventh Street, NW, Suite 1000
Washington, DC 20004
(202) 637-1028

Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after this Registration Statement becomes effective.

          If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

          If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

    o
    Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

    o
    Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

    CALCULATION OF REGISTRATION FEE

               
 
Title of each class of securities
to be registered

  Amount to be
registered

  Proposed maximum
offering price per
unit

  Proposed maximum
aggregate offering
price

  Amount of
registration fee

 

113/4% Senior Secured Notes due 2017

  $210,000,000   100%   $210,000,000(1)   $14,973.00(3)
 

Guarantees related to the 113/4% Senior Secured Notes due 2017(2)

  N/A   N/A   N/A   N/A

 

(1)
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f) under the Securities Act of 1933, as amended (the "Securities Act"), exclusive of any accrued interest.

Each of the Co-Registrants listed on the "Table of Co-Registrants" on the following page will guarantee on an unconditional basis the obligations of OnCure Holdings, Inc. under the 113/4% Senior Secured Notes due 2017.

(2)
No separate consideration will be received for the guarantees and, therefore, no additional fee is required.

(3)
Previously paid.

          The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

(Continued on next page)


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Table of Co-Registrants

Name
  State or Jurisdiction
of Formation
  Primary Standard
Industrial
Classification Code
Number
  IRS Employer
Number

Oncure Medical Corp. 

  Delaware   8011   59-3191053

Fountain Valley & Anaheim Radiation Oncology Centers, Inc. 

  California   8011   33-0303999

Jaxpet, LLC

  Florida   8011   06-1731932

Jaxpet/Positech, LLC

  Florida   8011   59-3658952

Manatee Radiation Oncology, Inc. 

  Florida   8011   47-0943848

MICA FLO II, Inc. 

  Delaware   8011   94-3323431

Mission Viejo Radiation Oncology Medical Group, Inc. 

  California   8011   77-0163523

Pointe West Oncology, LLC

  Delaware   8011   65-0344963

Radiation Oncology Center, LLC

  California   8011   77-0448888

U.S. Cancer Care, Inc. 

  Delaware   8011   65-0793730

USCC Acquisition Corp. 

  Delaware   8011   94-3302679

USCC Florida Acquisition Corp. 

  Delaware   8011   94-3310485

USCC Healthcare Management Corp. 

  California   8011   54-3456788

Sarasota Radiation & Medical Oncology Center, Inc. 

  Florida   8011   59-1664395

Venice Oncology Center, Inc. 

  Florida   8011   59-3155471

Englewood Oncology, Inc. 

  Florida   8011   65-0367072

Charlotte Community Radiation Oncology, Inc. 

  Florida   8011   65-0607550

Interhealth Facility Transport, Inc. 

  Florida   8011   59-2001243

Sarasota County Oncology, Inc. 

  Florida   8011   65-0455920

Santa Cruz Radiation Oncology Management Corp. 

  California   8011   94-2612410

Coastal Oncology, Inc. 

  California   8011   95-3116166

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The information in this prospectus is not complete and may be changed. We may not sell these securities or accept any offer to buy these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 27, 2011

PROSPECTUS

ONCURE HOLDINGS, INC.

OFFER TO EXCHANGE

$210,000,000 principal amount of its 113/4% Senior Secured Notes due 2017
which have been registered under the Securities Act,
for any and all of its outstanding 113/4% Senior Secured Notes due 2017

The Exchange Offer:

    OnCure Holdings, Inc. is offering to exchange all of its outstanding 113/4% Senior Secured Notes due 2017, referred to as the private notes, that are validly tendered and not validly withdrawn for an equal principal amount of 113/4% Senior Secured Notes due 2017, referred to as the exchange notes, that are, subject to specified conditions, freely transferable. We refer to the private notes and the exchange notes collectively in this prospectus as the notes.

    The exchange offer expires at 5:00 p.m., New York City time, on                        , 2011, unless extended. We do not currently intend to extend the expiration date.

    You may withdraw tenders of private notes at any time prior to the expiration date of the exchange offer.

    Neither we nor the guarantors will receive any cash proceeds from the exchange offer.

The Exchange Notes:

    We are offering exchange notes to satisfy certain obligations under the Registration Rights Agreement entered into in connection with the private offering of the private notes.

    The terms of the exchange notes are substantially identical to the private notes, except that the exchange notes will have been registered under the Securities Act and will not be subject to restrictions on transfer under the Securities Act.

    The exchange notes will be governed by the same indenture that governs the private notes.

    The exchange notes will be fully and unconditionally guaranteed, jointly and severally, on a senior secured basis, by each of our existing and future domestic restricted subsidiaries, other than certain immaterial subsidiaries.

    We do not plan to list the exchange notes on a national securities exchange or automated quotation system.

        Investing in the exchange notes involves risks. See "Risk Factors" beginning on page 20 of this prospectus.

        Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes as required by applicable securities laws and regulations. The letter of transmittal states that, by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for private notes where such private notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, after the expiration of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale for such period of time as such broker-dealers must comply with the prospectus delivery requirements of the Securities Act in order to resell the exchange notes. See "Plan of Distribution."

        Neither the Securities and Exchange Commission nor any state securities commission has approved of the notes or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                        , 2011.


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TABLE OF CONTENTS

 
  Page

MARKET AND INDUSTRY DATA

  i

BASIS OF PRESENTATION

  i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

  i

SUMMARY

  1

RATIO OR DEFICIENCY OF EARNINGS TO FIXED CHARGES

  19

RISK FACTORS

  20

USE OF PROCEEDS

  41

CAPITALIZATION

  42

THE EXCHANGE OFFER

  43

SELECTED CONSOLIDATED FINANCIAL DATA

  53

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  55

BUSINESS

  71

MANAGEMENT

  98

COMPENSATION DISCUSSION AND ANALYSIS

  102

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  117

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

  119

DESCRIPTION OF CERTAIN INDEBTEDNESS

  122

DESCRIPTION OF EXCHANGE NOTES

  125

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

  175

PLAN OF DISTRIBUTION

  180

LEGAL MATTERS

  181

EXPERTS

  181

WHERE YOU CAN FIND MORE INFORMATION

  182

INDEX TO FINANCIAL STATEMENTS

  F-1

        We have not authorized any dealer, salesperson or other person to give any information or represent anything to you other than the information contained in this prospectus. You must not rely on unauthorized information or representations.

        This prospectus does not offer to sell nor ask for offers to buy any of the securities in any jurisdiction where it is unlawful, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. The information in this prospectus is current only as of the date on its cover and may change after that date.


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MARKET AND INDUSTRY DATA

        Market data and other statistical information used throughout this prospectus are based on independent industry publications, government publications, reports by market research firms or other published independent sources. Some data is also based on our good faith estimates, which are derived from management's review of internal data and information, as well as the independent sources listed above.


BASIS OF PRESENTATION

        Unless the context indicates otherwise, references to "we," "our," "us," "Oncure" and the "Company" refer to OnCure Holdings, Inc. and its consolidated subsidiaries, except in the section entitled "Description of Exchange Notes." References to "Oncure Medical" refer to our wholly-owned subsidiary, Oncure Medical Corp. References to the "guarantors" refer to our domestic restricted subsidiaries that will guarantee the exchange notes.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains certain forward-looking statements concerning our current expectations, estimates and projections about our operations, industry, financial condition and liquidity. Such statements are based on current expectations, and are not strictly historical statements. In some cases, you can identify forward-looking statements by terminology such as "if," "may," "should," "believe," "anticipate," "future," "forward," "potential," "estimate," "reinstate," "opportunity," "goal," "objective," "exchange," "growth," "outcome," "could," "expect," "intend," "plan," "strategy," "provide," "commitment," "result," "seek," "pursue," "ongoing," "include" or in the negative of such terms or comparable terminology. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We discuss many of these risks in greater detail under the heading "Risk Factors" herein. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this prospectus.

        Forward-looking statements include, among other things, general market conditions, competition and pricing and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this prospectus under the headings "Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business."

        Factors and risks that could cause actual results or circumstances to differ materially from those set forth or contemplated in forward looking statements include those set forth in "Risk Factors."

        As such, actual results or circumstances may vary materially from such forward-looking statements or expectations. Readers are also cautioned not to place undue reliance on these forward-looking statements which speak only as of the date these statements were made. We are not obligated to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements.

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SUMMARY

        The following summary contains select information about our business and this offering, but it is not complete and does not contain all of the information that you should consider before making your investment decision. You should carefully read the entire prospectus, including the information presented under the sections entitled "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, including the related notes. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in these forward-looking statements as a result of certain factors, including those set forth in "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements."

Company Overview

        We operate radiation oncology treatment centers for cancer patients. We contract with radiation oncology medical groups, which we refer to as our affiliated physician groups, and their radiation oncologists through long-term management services agreements, or MSAs, to offer cancer patients a comprehensive range of radiation oncology treatment options, including most traditional and next generation services. We currently provide services to a network of 14 affiliated physician groups that treat cancer patients at our 37 radiation oncology treatment centers, making us one of the largest strategically located networks of radiation oncology service providers. We believe that our physician business model, market leadership in targeted geographic regions, clinical technological equipment, strong track record of treatment center operating performance and experienced management team provides us with a significant competitive advantage in the radiation therapy market.

        We typically lease the facilities where our radiation oncology treatment centers are located and own or lease all of the equipment and leasehold improvements at these centers. Through our MSAs, we provide our affiliated physician groups use of these facilities, certain clinical services of our treatment center staff, and administer the non-medical business functions of our treatment centers, such as technical staff recruiting, marketing, managed care contracting, receivables management and compliance, purchasing, information systems, accounting, human resource management and physician succession planning. Our affiliated physician groups and their physicians retain full control over the clinical aspects of patient care. This structure is designed to allow our affiliated physician groups to focus primarily on providing patient care and treatment center growth including expansion of their group's services.

        Our MSAs have an average term of 10 years and are generally renewable for an additional five year period. Pursuant to the MSAs, our management services revenues include compensation by the affiliated physician groups for expenses incurred in operating our treatment centers plus a fee based on the earnings of our affiliated physician groups. As such, the operating costs of the treatment centers are our responsibility. We believe this MSA structure allows us to ensure the affiliated physician group's business interests are aligned with our own. We estimate that approximately 99% of our affiliated physician groups' revenues depend on reimbursement by third party payors, including government payors.

        We believe that we attract and retain leading radiation oncology groups and their physicians largely due to this business model, the benefits of scale and our commitment to clinical excellence. By establishing relationships with highly qualified, well-respected radiation oncology groups and their physicians, we believe that we receive ongoing benefits as a result of giving referring physicians, their patients and third party payors a high level of confidence in the clinical capabilities of our groups.

        We have built a provider network focused on targeted geographic regions and believe we have established leading market positions within these regions. Our network of 37 treatment centers is located in 37 markets and includes 15 treatment centers in California, 18 treatment centers in Florida

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and four treatment centers in Indiana. Based on our estimate of the number of freestanding, or non-hospital based, treatment centers, which includes approximately 90 treatment centers in California and 80 treatment centers in Florida, we believe we operate the most centers in California and the second most centers in Florida.

        We believe these two states are two of the most attractive markets in the United States for cancer treatment providers due to the large and growing senior populations and the high incidence of cancer. Our targeted regional focus is designed to allow us to build a leading market presence that enables us to drive efficiencies through economies of scale and fixed cost leverage. In addition, we believe our significant position in local markets creates strong barriers to entry.

        We currently have MSAs with 14 affiliated physician groups consisting of approximately 70 physicians, who on average have over 15 years of experience. There are currently five treatment centers that operate with only one full-time radiation oncologist. Our affiliated physician groups operating at any single physician treatment center, maintain adequate physician coverage in the absence of the regular full-time radiation oncologist by contracting for the services of a part-time radiation oncologist or locum tenens, or, if necessary, radiation oncologists within our affiliated physician groups will travel between more than one treatment center to treat patients and maintain appropriate coverage. We actively assist our affiliated physician groups in identifying new radiation oncologists to join their groups.

        We believe that our treatment centers are fitted with clinical technological equipment that allows our affiliated physician groups to provide cancer patients the highest quality of care through clinically advanced treatment options. The early and continual adoption of cutting-edge technology by the physicians in our affiliated physician groups has enabled rapid sharing of this knowledge and best practices across the network to drive superior clinical results. Early adoption and appropriate utilization of these next generation technologies has resulted in more attractive reimbursement rates for our affiliated physician groups. We believe our clinical technological equipment provides us with a significant competitive advantage in attracting new physician groups and is appealing to referral sources, patients and payors.

        We have built a network of radiation oncology treatment centers that has resulted in increased net revenue and growth in Adjusted EBITDA (as defined below under "—Summary Consolidated Financial and Other Data"). Since the beginning of 2007, we have acquired 11 new treatment centers. Between fiscal years 2007 to 2009, our net revenue, operating income and Adjusted EBITDA have grown at compounded annual growth rates of 11.6%, 65.2% and 14.0%, respectively, through a combination of organic growth and acquisitions. For the year ended December 31, 2009, our net revenue, operating income and Adjusted EBITDA were $106.8 million, $20.1 million and $39.5 million, respectively.

        For the nine months ended September 30, 2010, our net revenue, operating income and Adjusted EBITDA were $74.2 million, $6.0 million and $26.7 million, respectively, compared to $81.8 million, $16.6 million and $30.6 million, respectively, for the same period in 2009. The year-over-year decline in net revenue, operating income and Adjusted EBITDA was principally due to a decrease in patient treatments as a result of broad economic factors and the replacement of treatment equipment at two single treatment centers, which caused a temporary closure of one center and reduced utilization at the second treatment center. Due to the geographic location of one of these treatment centers, we were unable to transfer patients from that temporarily closed center to our other treatment centers. One of the two centers returned to normal operations in May 2010 and the other returned to normal operations in August 2010.

        We have an experienced oncology management team, with an average of over 20 years of healthcare management experience between our Chief Executive Officer, Chairman and top five executives. This team has consistently demonstrated an ability to grow through the acquisition of treatment centers and organic growth as well as an ability to implement necessary changes to improve

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operational results. When we refer to our acquisition of a treatment center, we are referring to the process whereby we acquire all of the outstanding assets at an existing treatment center and assume the existing lease, or enter into a new lease, relative to the facility. In connection with our acquisition of the assets, we enter into an MSA with the radiation oncology group to provide them use of the facilities, certain clinical services of our treatment center staff, and for us to administer the non-medical business functions of the treatment center.

        We believe that attractive long-term trends in our industry, our business model with affiliated physician groups who have long term marketing presence and reputations and our market position align us well for continued future growth.

Industry Overview

        According to the American Cancer Society, or ACS, over 19 million cancer cases have been diagnosed in the United States since 1990, with an estimated 1.5 million cases to be diagnosed in 2010. Approximately 77% of all cancer cases are currently being diagnosed in people over the age of 55. As the United States population and, in particular, the baby boomer generation ages, the number of cancer diagnoses are expected to continue to increase. The states in which we operate collectively represented approximately 19% of United States cancer cases in 2009 (California approximately 10%, Florida approximately 7% and Indiana approximately 2%).

        The United States radiation therapy market was estimated to be approximately $8 billion in 2007. The market's growth has been driven by an aging population, which is more likely to develop cancer, along with the development of radiation technologies that are effective in treating a greater range of cancer diagnoses. The radiation therapy market in the United States is highly fragmented with over 2,200 locations at which radiation therapy is provided. Free-standing radiation oncology treatment centers have grown in prevalence from approximately 400 in 1990 to over 1,000 in 2007. We believe that this growth has been driven by patients' desire to receive radiation oncology treatments, which are typically given daily over a four- to nine-week period, at specialized centers that are convenient and located in their communities. Many of these free-standing treatment centers can benefit from professional management competencies such as technical staff recruiting, marketing, managed care contracting, receivables management and compliance, purchasing, information systems, accounting, human resource management and physician succession planning, and thus look to contract with networks like ours.

        Cancer can be treated using a variety of methods. Although the majority of cancer patients receive radiation therapy, individuals diagnosed with cancer may elect to undergo surgery, chemotherapy and/or biological therapy in conjunction with, or instead of, radiation therapy. Radiation therapy is used to treat nearly two-thirds of all cancer patients in the United States. Radiation therapy is often curative with patients in whom cancer is localized and has not metastasized. Cancer patients are typically referred to a treatment center or radiation oncologist by medical oncologists, breast surgeons, general surgeons, urologists, family practice and internal medicine physicians in addition to other physician specialties and payor sources. Physicians advise patients to choose the type of treatment or combination of treatments based upon the type of cancer, the stage of development and the expected impact on the patients' and their caregivers' quality of life, including potential side effects, family stress and economic consequences.

        Delivery of a beam of radiation at a targeted tumor area is currently the dominant treatment used in radiation oncology. Conventional Beam Treatment is delivered with limited precision and can expose patients to relatively high levels of radiation. The evolution of cancer research and technological advances have produced increasingly effective methods of radiation oncology treatment, including Intensity Modulated Radiation Therapy and Image Guided Radiation Therapy, which deliver the necessary doses of radiation in a more targeted manner, thus minimizing the harm to healthy organs

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and related tissues impacted by the tumor. The advancements in cancer targeting also result in fewer side effects and complications, enhancing a patient's overall quality of life. These technological advances are further supported by payor approval of new cancer indications and diagnoses. We also believe that the discovery and utilization of new, innovative means of radiation therapy delivery and the increased awareness of next generation cancer therapy treatments by physicians and patients will continue to increase the use of radiation therapy for treating many types of cancer.

        We expect future growth in the radiation therapy market to be driven by:

    increasing incidence of cancer associated with the aging of the population;

    advancing deployment and acceptance of radiation equipment technologies that increase the number of treatable cancer patients;

    new and more effective treatment technologies that achieve better patient results with fewer side effects and that have more attractive reimbursement levels;

    increasing physician and patient familiarity with the various cancer treatment options available, thus leading to greater demand for next generation therapies that prevent healthy tissue damage and improve quality of life; and

    continuing payor acceptance of evolving science and treatment technologies in radiation oncology, thereby leading to their approval of reimbursement for additional diagnoses and indications.

Our Services

        Radiation oncology treatments are primarily performed with a linear accelerator, or linac, which uses high-energy photons or electrons to destroy the tumor. Courses of treatment typically last from four to nine weeks. In advance of the actual treatments, a typical patient is provided the following services: (i) the patient is examined, counseled and advised of treatment options by a radiation oncologist; (ii) the agreed upon course of treatment is planned by a physicist under the oncologist's direction; (iii) a trained dosimetrist designs and verifies that the treatment plan's radiation dose and targeting are properly calibrated in the software that controls the linac; (iv) a trained radiation therapy technologist assists the patient to, and positions the patient on, the linac and (v) the technologist verifies the planned dose and beam target before delivering the radiation oncology treatment. Many of our radiation oncology treatment centers also offer support services designed to enhance the patient experience such as support groups, psychological and nutritional counseling and transportation assistance.

        Each of our centers is designed to provide a comprehensive array of outpatient programs necessary to treat a cancer patient with radiation therapy. Of the 37 treatment centers, 33 are equipped with a linac that we own or lease. Our centers provide a wide variety of radiation oncology services, including:

    Conventional Beam Therapy, or CBT:  The dominant form of radiation oncology treatment, which results in relatively high radiation exposure with limited precision. CBT enables radiation oncologists to utilize linac machines to direct radiation beams at the tumor location. These services are provided by all of our centers.

    Intensity Modulated Radiation Therapy, or IMRT:  Enables radiation oncologists to adjust the intensity of the radiation dose and conform the beam along the entire surface of the tumor. IMRT can also be programmed to angle beams of radiation around normal tissue, thereby sparing healthy organs and reducing side effects. These services are provided by all of our centers.

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    Image Guided Radiation Therapy, or IGRT:  Enables radiation oncologists to utilize imaging at the time of treatment to localize tumors and to accurately conform to the contour of a tumor from any angle. These services are provided by 21 of our centers.

        In addition to the above mentioned therapies, we also offer other advanced services at various of our centers, including:

    Positron Emission Tomography—Computed Tomography, or PET/CT:  Involves the injection of radioactive isotopes into a patient to obtain images of metabolic physiologic processes. The application of PET in the detection of cancer has become significant in the last two years, as it is the first diagnostic procedure that can detect and monitor a patient's metabolic malignancies. PET/CT provides information that is not available with other medical imaging and combines the metabolic cancer cells detection of PET with an anatomical picture of the tumor on a CT. These services are provided by seven of our centers.

    High Dose Rate Brachytherapy:  Enables radiation oncologists to treat cancer by internally delivering higher doses of radiation directly to the cancer. These services are provided by 17 of our centers.

    Simulation, Dosimetry and Three Dimensional Conformal Treatment Planning:  Permits accurate, three-dimensional rendering of the tumor and surrounding normal organs in order to facilitate an efficient treatment plan maximizing radiation exposure of cancerous tissue and minimizing exposure of healthy tissue. These services are provided by all of our centers.

    Prostate Implantation:  Involves the use of palladium and iodine "seeds" and other radioactive implants (radioactive isotopes) in the treatment of prostate cancer while sparing the nearby organs and structures. These services are provided by 19 of our centers.

    Stereotactic Radiosurgery, or SRS:  Enables delivery of concentrated, precise, high dose radiation beams to localized tumors. Historically, SRS was used primarily for contained lesions of the brain, but recent advancements in imaging technologies have allowed more types of tumors to be targeted, therefore broadening the use of stereotactic radiosurgery for extra-cranial cancers. These services are provided by five of our centers.

    Cyber Knife:  A SRS device with a linac mounted on a robotic arm. Through the use of image guidance cameras, the cyber knife system locates the position of the tumor. The linac attached to the robotic arm delivers multiple beams of radiation that converge at the tumor site. Thus, the tumor receives a concentrated dose of radiation while minimizing exposure to surrounding normal tissue. With sub-millimeter accuracy, the cyber knife is used to treat vascular abnormalities, tumors and cancers of the body. These services are provided by our Southside joint venture.

Competitive Strengths

        We have developed a broad range of capabilities that we believe provide us with significant competitive advantages, including:

        Physician Business Model that Aligns Incentives.    We contract with physicians in a managed services model. We currently contract with 14 affiliated physician groups consisting of approximately 70 physicians, who on average have over 15 years of experience. We enter into MSAs with established radiation oncology groups to realize the value of ongoing patient referral streams and managed care relationships.

        Clinical Technological Equipment.    We provide the patients of our affiliated physician groups with a broad spectrum of radiation therapy options, including many advanced treatment options that are not otherwise available or offered by other providers in our markets. Our treatment centers are equipped

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with clinical technological equipment, which allow our affiliated physician groups to provide cancer patients the highest quality of care through clinically advanced treatment options.

        Market Leader in Targeted Geographic Regions.    Our network of 37 treatment centers is located in 37 markets and includes 15 treatment centers in California, 18 treatment centers in Florida and four treatment centers in Indiana. Based on our estimate of the number of freestanding, or non-hospital based, treatment centers, we believe we operate the most centers in California and the second most in Florida.

        Strong Track Record of Same-Center Operating Performance.    We have had significant success driving same-center operating performance improvement through leveraging our strong physician buisness model, proactive referral marketing programs, managed care contracting strategies, sharing knowledge, leadership and resources among our treatment centers and our physician and staff recruiting expertise. Furthermore, our willingness and ability to invest in and implement new state-of-the-art equipment has helped drive substantial same-center growth by enabling appropriate utilization of advanced technology which has resulted in more favorable reimbursement rates.

        Growing Business with Strong and Predictable Cash Flow.    Between fiscal years 2007 and 2009, we experienced compounded annual growth in net revenue, operating income and Adjusted EBITDA (as defined below under the caption "—Summary Historical and Consolidated Financial Data"). We believe there are several underlying factors that contribute to the stability and growing performance of our business. We expect that these factors, combined with our moderate maintenance capital expenditures and minimal working capital needs, will result in strong and predictable free cash flow generation.

        Strong and Diversified Business and Payor Mix.    Our affiliated physician groups have a broad range of payors and referral sources, and provide treatment across a wide spectrum of cancer diagnoses. Reimbursements are widely diversified among payor sources, including Medicare (39% of affiliated physician groups 2009 net revenue), Medicaid (5% of affiliated physician groups 2009 net revenue) and over 200 third-party and other payors (56% of affiliated physician groups 2009 net revenue) for the year ended December 31, 2009. This payor diversity mitigates exposure to possible unfavorable reimbursement trends by any one payor or payor class. Given that we are focused on a variety of cancer diagnoses, we believe we have a highly attractive treatment mix. Our operations are further diversified by the breadth of our affiliated physician groups' referral sources.

        Proven and Experienced Management Team.    We are led by a dedicated and highly experienced senior management team with significant expertise and industry knowledge. Over the past decade, our executive management team has successfully overseen continued growth and operational improvement in oncology centers. This team has developed a systematic approach to business operations and has a core competency in integrating newly acquired treatment centers.

Our Business Strategy

        We believe we are well positioned to leverage our physician business model, management expertise and infrastructure to increase our market share within our established geographic regions and selectively expand into new regions. Key elements of our business strategy include:

    continuing opportunity with next generation therapies;

    focusing on quality of care;

    focusing on same-center operating performance;

    expanding by acquisitions in targeted geographic regions; and

    developing new treatment centers and pursuing additional joint venture opportunities.

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Risks Affecting Us

        Our business is subject to numerous risks, as more fully described in the section entitled "Risk Factors." You should carefully consider such risks in connection with your investment in us. Our principal risks include:

    We depend on revenues generated by our affiliated physician groups from Medicare and Medicaid programs for a significant amount of our net revenue and our business could be materially harmed by any changes that result in reimbursement reductions;

    If revenues generated by our affiliated physician groups by managed care organizations and other third-party payors decrease, our net revenue and profitability would be adversely affected;

    Our treatment centers are concentrated in Florida and California, which makes us particularly sensitive to regulatory, economic and other conditions that affect those states;

    Pressure to control healthcare costs could have a negative impact on our results;

    Reforms to the United States healthcare system may adversely affect our business; and

    Radiation therapy is a highly competitive business and our centers face competition from hospitals, other practitioners and other operators of radiation oncology treatment centers.

Genstar Capital LLC

        Genstar Capital LLC, or Genstar, is a private equity investment firm that makes leveraged investments in quality companies. Genstar works in partnership with management to create value over the long-term. With approximately $3 billion of capital under management and significant experience operating and investing in businesses, Genstar and its limited partner affiliates deliver the advantages of expertise, experience and patient capital to portfolio companies. As of December 31, 2010, Genstar owned approximately 76.5% of our common stock.

        Genstar has a research-based, industry-focused approach to investing, believing that significant value can be created by combining strong management with businesses that participate in sectors that have the potential for significant growth. Genstar looks to invest in or acquire companies with $50 million to $1 billion in revenue and commits equity to investments in a variety of growth, buyout, recapitalization and consolidation transactions. Genstar focuses on companies in the healthcare services, life sciences, business services and industrial technology sectors. Within healthcare services, Genstar has made multiple investments in industry segments that capitalize on an aging demographic, including alternate site care, health and wellness services, health plan services and senior care services. Genstar believes it has generated industry-leading returns for its realized healthcare investments.

Our Company

        We were founded in 1998. Our principal executive offices are located at 188 Inverness Drive West, Suite 650, Englewood, Colorado 80112. The telephone number for our principal executive offices is (303) 643-6500. Our Internet address is www.oncure.com. This Internet address is provided for informational purposes only. The information at this Internet address is not a part of this prospectus.

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THE EXCHANGE OFFER

        The following summary contains basic information about the exchange offer and the exchange notes. It does not contain all the information that is important to you. For a more complete understanding of the exchange notes, please refer to the sections of this prospectus entitled "The Exchange Offer" and "Description of Exchange Notes."

The Exchange Offer

  We are offering to exchange an aggregate of $210.0 million principal amount of exchange notes for $210.0 million principal amount of the private notes.

 

To exchange your private notes, you must properly tender them, and we must accept them. You may tender outstanding private notes only in denominations of the principal amount of $2,000 and integral multiples of $1,000 in excess thereof. Subject to the satisfaction or waiver of the conditions to the exchange offer, we will exchange all private notes that you validly tender and do not validly withdraw before 5:00 p.m., New York City time, on the expiration date. We will issue registered exchange notes promptly after the expiration of the exchange offer.

 

The form and terms of the exchange notes will be substantially identical to those of the private notes except that the exchange notes will have been registered under the Securities Act and will not be subject to restrictions on transfer under the Securities Act. Therefore, the exchange notes will not be subject to certain contractual transfer restrictions, registration rights and certain additional interest provisions applicable to the private notes prior to consummation of the exchange offer.

Resale of Exchange Notes

 

We believe that, if you are not a broker-dealer, you may offer exchange notes (together with the guarantees thereof) for resale, resell and otherwise transfer the exchange notes (and the related guarantees) without complying with the registration and prospectus delivery requirements of the Securities Act if you:

 

•       acquired the exchange notes in the ordinary course of business;

 

•       are not engaged in, do not intend to engage in and have no arrangement or understanding with any person to participate in a "distribution" (as defined under the Securities Act) of the exchange notes; and

 

•       are not an "affiliate" (as defined under Rule 405 of the Securities Act) of ours or any guarantor.

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If any of these conditions are not satisfied, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Our belief that transfers of exchange notes would be permitted without registration or prospectus delivery under the conditions described above is based on the interpretations of the SEC given to other, unrelated issuers in transactions similar to this exchange offer. We cannot assure you that the SEC would take the same position with respect to this exchange offer.

Broker-Dealers

 

Each broker-dealer that receives exchange notes for its own account in exchange for private notes, where the private notes were acquired by it as a result of market-making activities or other trading activities, may be deemed to be an "underwriter" within the meaning of the Securities Act and must acknowledge that it will deliver a prospectus that meets the requirements of the Securities Act in connection with any resale of the exchange notes. However, by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

Expiration Date

 

The exchange offer will expire at 5:00 p.m., New York City time, on                        , 2011, unless we extend it.

Withdrawal

 

You may withdraw your tender of private notes under the exchange offer at any time before the exchange offer expires. Any withdrawal must be in accordance with the procedures described in "The Exchange Offer—Withdrawal Rights."

Procedures for Tendering Private Notes

 

Each holder of private notes that wishes to tender private notes for exchange notes pursuant to the exchange offer must, before the exchange offer expires, either:

 

•       transmit a properly completed and duly executed letter of transmittal, together with all other documents required by the letter of transmittal, including the private notes, to the exchange agent; or

 

•       if private notes are tendered in accordance with book-entry procedures, arrange with The Depository Trust Company, or DTC, to cause to be transmitted to the exchange agent an agent's message indicating, among other things, the holder's agreement to be bound by the letter of transmittal,

 

or comply with the procedures described below under "—Guaranteed Delivery."

 

A holder of private notes that tenders private notes in the exchange offer must represent, among other things, that:

 

•       the holder is not an "affiliate" of ours or any guarantor as defined under Rule 405 of the Securities Act;

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•       the holder is acquiring the exchange notes in its ordinary course of business;

 

•       the holder is not engaged in, does not intend to engage in and has no arrangement or understanding with any person to participate in a distribution of the exchange notes within the meaning of the Securities Act;

 

•       if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making or other trading activities, then the holder will deliver a prospectus in connection with any resale of the exchange notes; and

 

•       the holder is not acting on behalf of any person who could not truthfully make the foregoing representations.

 

Do not send letters of transmittal, certificates representing private notes or other documents to us or DTC. Send these documents only to the exchange agent at the address given in this prospectus and in the letter of transmittal.

Special Procedures for Tenders by Beneficial Owners of Private Notes

 

If

 

•       you beneficially own private notes;

 

•       those private notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian; and

 

•       you wish to tender your private notes in the exchange offer,

 

you should contact the registered holder as soon as possible and instruct it to tender the private notes on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal.

Guaranteed Delivery

 

If you hold private notes in certificated form or if you own private notes in the form of a book-entry interest in a global note deposited with the trustee, as custodian for DTC, and you wish to tender those private notes but

 

•       your private notes are not immediately available; or

 

•       you cannot deliver the private notes, the letter of transmittal or other required documents to the exchange agent on or prior to the expiration date,

 

you may tender your private notes in accordance with the procedures described in "The Exchange Offer—Procedures for Tendering Private Notes—Guaranteed Delivery."

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Consequences of Not Exchanging Private Notes

 

If you do not tender your private notes or we reject your tender, your private notes will remain outstanding and will continue to be subject to the provisions in the indenture regarding the transfer and exchange of the private notes and the existing restrictions on transfer set forth in the legends on the private notes. In general, the private notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Holders of private notes will not be entitled to any further registration rights under the Registration Rights Agreement. We do not currently anticipate that we will take any action following the consummation of the exchange offer to register any of the remaining private notes under the Securities Act.

 

You do not have any appraisal or dissenters' rights in connection with the exchange offer.

Material United States Federal Income Tax Consequences

 

Your exchange of private notes for exchange notes will not be treated as a taxable exchange for United States federal income tax purposes. For a discussion of the material United States federal income tax consequences relating to the notes, see "Material United States Federal Income Tax Consequences."

Conditions to the Exchange Offer

 

The exchange offer is subject to the conditions that it will not violate applicable law or any applicable interpretation of the staff of the SEC. The exchange offer is not conditioned upon any minimum principal amount of private notes being tendered for exchange.

Use of Proceeds

 

We will not receive any cash proceeds from the exchange offer.

Acceptance of Private Notes and Delivery of Exchange Notes

 

Subject to the satisfaction or waiver of the conditions to the exchange offer, we will accept for exchange any and all private notes properly tendered and not validly withdrawn prior to 5:00 p.m., New York City, time on the expiration date of the exchange offer. We will complete the exchange offer and issue the exchange notes promptly after the expiration of the exchange offer.

Exchange Agent

 

Wilmington Trust FSB is serving as exchange agent for the exchange offer. The address and the facsimile and telephone numbers of the exchange agent are provided in this prospectus under "The Exchange Offer—Exchange Agent" and in the letter of transmittal.

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THE EXCHANGE NOTES

        The summary below describes the principal terms of the exchange notes. The financial terms and covenants of the exchange notes are the same as the private notes. Some of the terms and conditions described below are subject to important limitations and exceptions. You should carefully read the "Description of Exchange Notes" section of this prospectus for a more detailed description of the exchange notes.

        The exchange offer applies to the $210.0 million principal amount of the private notes outstanding as of the date hereof. The form and the terms of the exchange notes will be identical in all material respects to the form and the terms of the private notes except that the exchange notes will have been registered under the Securities Act and will not be subject to restrictions on transfer under the Securities Act.

        The exchange notes evidence the same debt as the private notes exchanged for the exchange notes and will be entitled to the benefits of the same indenture under which the private notes were issued, which is governed by New York law. See "Description of Exchange Notes."

Issuer   OnCure Holdings, Inc.

Notes Offered

 

$210.0 million aggregate principal amount of 113/4% Senior Secured Notes due 2017.

Maturity Date

 

May 15, 2017.

Interest Rate

 

We will pay interest on the exchange notes at an annual interest rate of 113/4%.

Interest Payment Dates

 

We will make interest payments on the exchange notes semi-annually in arrears on each May 15 and November 15, beginning November 15, 2010. Interest will accrue from the issue date of the exchange notes.

Guarantees

 

The exchange notes will be fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of our existing and future domestic restricted subsidiaries, other than certain immaterial subsidiaries.

Security

 

The exchange notes and the guarantees will be secured by a security interest in substantially all of our and the guarantors' assets, subject to certain exceptions. Pursuant to the terms of an intercreditor agreement, such liens will be contractually subordinated to liens thereon that will secure our revolving credit facility, which our wholly owned subsidiary, Oncure Medical, entered into concurrently with the consummation of the offering of the private notes.

Ranking

 

The exchange notes and the guarantees will rank senior in right of payment to all of our and the guarantors' future subordinated indebtedness and pari passu in right of payment with all of our and the guarantors' future senior indebtedness, including indebtedness under our revolving credit facility. The exchange notes and the guarantees will be effectively subordinated, however, to indebtedness under our revolving credit facility to the extent of the value of the collateral securing our revolving credit facility.

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Optional Redemption   On or after May 15, 2014, we may redeem some or all of the exchange notes at the redemption prices set forth under "Description of Exchange Notes." Prior to May 15, 2013, we may, at our option, redeem up to 35% of the aggregate principal amount of the exchange notes at the premium set forth under "Description of Exchange Notes" with the net cash proceeds of certain equity offerings.

Change of Control Offer

 

If we experience certain change-of-control events, the holders of the exchange notes will have the right to require us to purchase their notes at a price in cash equal to 101% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date of purchase.

Asset Sale Offer

 

Upon certain asset sales, we may be required to offer to use the net proceeds of the asset sale to purchase some of the exchange notes at 100% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date of purchase.

Certain Covenants

 

The indenture governing the exchange notes will, among other things, limit our ability and the ability of our restricted subsidiaries to:

 

•       incur or guarantee additional indebtedness or issue disqualified capital stock;

 

•       transfer or sell assets;

 

•       pay dividends or make distributions, redeem subordinated indebtedness, make certain types of investments or make other restricted payments;

 

•       create or incur liens;

 

•       incur dividend or other payment restrictions affecting certain subsidiaries;

 

•       consummate a merger, consolidation or sale of all or substantially all of our assets;

 

•       enter into transactions with affiliates;

 

•       designate subsidiaries as unrestricted subsidiaries;

 

•       engage in a business other than a business that is the same or similar to our current business or a reasonably related businesses; and

 

•       take or omit to take any actions that would adversely affect or impair in any material respect the collateral securing the notes.


 

 

These covenants will be subject to a number of important exceptions and qualifications. See "Description of Exchange Notes—Certain Covenants."

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Use of Proceeds   We will not receive any cash proceeds from the exchange offer.

No Public Market

 

The exchange notes are a new issue of securities and will not be listed on any securities exchange or included in any automated quotation system. The initial purchaser has advised us that it intends to make a market in the exchange notes. The initial purchaser is not obligated to make a market in the exchange notes, however, and any such market may be discontinued by the initial purchaser in its discretion at any time without notice. See "Plan of Distribution."

Exchange Offer; Registration Rights

 

In connection with the sale of the private notes, we entered into a Registration Rights Agreement with the initial purchaser of the private notes in which we agreed to:

 

•       file one or more registration statements no later than 270 days after the closing of the offering of the private notes, enabling holders of the private notes to exchange their unregistered notes for registered, publicly tradable notes with substantially identical terms;

 

•       cause the registration statement to become effective within 330 days after the closing of the offering of the private notes;

 

•       consummate the exchange offer within 30 business days after the registration statement is required to be declared effective; and

 

•       file a shelf registration statement for the resale of the private notes if we cannot effect the exchange offer within the time periods listed above.


 

 

The interest rate on the notes will increase by 0.25% per annum for the first 90 day period following a default of the registration obligations, increasing by an additional 0.25% per annum for each subsequent 90 day period, up to a maximum of 1.0% per annum.

 

 

After the exchange offer has been consummated, the Equity Interests of a Restricted Subsidiary will constitute Collateral only to the extent that such Equity Interests can secure the notes without Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act (or any other law, rule or regulation) requiring separate financial statements of such Restricted Subsidiary to be filed with the SEC (or any other governmental agency). See "The Exchange Offer—Purpose of the Exchange Offer" and "Description of Notes—Registration Rights."

Book-Entry

 

Initially, the exchange notes will be represented by one or more global notes in definitive, fully registered form deposited with a custodian for, and registered in the name of, a nominee of DTC.

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SUMMARY HISTORICAL AND CONSOLIDATED FINANCIAL DATA

        The following summary consolidated financial and other data as of December 31, 2007, 2008 and 2009 and for each of the years ended December 31, 2007, 2008 and 2009, are derived from our audited consolidated financial statements as of such date and for such periods, which are included elsewhere in this prospectus. The following summary consolidated financial and other data as of September 30, 2010 and for each of the nine months ended September 30, 2009 and 2010 are derived from our unaudited consolidated financial statements as of such date and for such periods, which are included elsewhere in this prospectus. In the opinion of management, the unaudited consolidated financial information includes all adjustments considered necessary for a fair presentation of this information. The selected financial information for the nine months ended September 30, 2010 is not necessarily indicative of the results of operations that can be expected for the year ended December 31, 2010 or for any other interim period. You should read this summary consolidated financial and other data together with "Non-GAAP Financial Measures," "Risk Factors," "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, including the related notes, appearing elsewhere in this prospectus.

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  2009   2010   2007   2008   2009  
 
  (unaudited)
   
   
   
 
 
  (in thousands)
 

Statement of Operations:

                               

Net revenues

  $ 81,766   $ 74,152   $ 85,718   $ 108,684   $ 106,757  

Cost of operations:

                               
 

Salaries and benefits

    27,318     26,582     33,533     37,933     35,738  
 

Depreciation and amortization

    14,118     13,830     15,662     18,110     18,718  
 

General and administrative expenses

    23,742     27,753     29,134     39,696     32,138  
                       

Total operating expenses

    65,178     68,165     78,329     95,739     86,594  
                       

Income from operations

    16,588     5,987     7,389     12,945     20,163  

Other income (expense):

                               
 

Interest expense

    (12,647 )   (16,206 )   (17,486 )   (18,258 )   (16,726 )
 

Debt extinguishment cost

        (2,932 )            
 

Loss on interest rate swap

    (746 )   (267 )   (1,860 )   (3,372 )   (916 )
 

Equity interest in net earnings of joint venture

    616     382     959     1,144     738  
 

Interest and other (expense) income

    (240 )   (322 )   (52 )   200     (250 )
                       

Total other expense

    (13,017 )   (19,345 )   (18,439 )   (20,286 )   (17,154 )
                       

Income (loss) before income taxes

    3,571     (13,358 )   (11,050 )   (7,341 )   3,009  

Income tax (expense) benefit

    (1,963 )   4,880     3,920     2,990     (1,654 )
                       

Income (loss) from continuing operations

    1,608     (8,478 )   (7,130 )   (4,351 )   1,355  

Discontinued operations, net of tax:

                               
 

Impairment loss resulting from discontinued operations

                (4,065 )    
 

Income from discontinued operations

            155     29      
                       

Net income (loss)

  $ 1,608   $ (8,478 ) $ (6,975 ) $ (8,387 ) $ 1,355  
                       

Statement of Cash Flows Data:

                               

Net cash flows provided by (used in):

                               
 

Operating activities

  $ 12,219   $ 15,932   $ 11,562   $ 10,720   $ 16,873  
 

Investing activities

    (4,522 )   (3,311 )   (26,438 )   (59,254 )   (5,974 )
 

Financing activities

    (14,010 )   (320 )   15,179     56,873     (14,880 )

Capital expenditures

    5,494     3,850     8,064     14,190     7,177  

Other Financial Statistics:

                               

Adjusted EBITDA(1)

  $ 30,629   $ 26,691   $ 30,395   $ 39,144   $ 39,520  

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  As of December 31,  
 
  As of
September 30,
2010
 
 
  2007   2008   2009  
 
  (unaudited)
   
   
   
 
 
  (in thousands)
 

Balance Sheet Data:

                         

Cash and cash equivalents

  $ 17,666   $ 1,007   $ 9,346   $ 5,365  

Property and equipment, net

    36,749     41,313     46,953     41,959  

Management service agreements, net

    53,626     72,616     65,690     58,769  

Total assets

    320,878     281,876     332,025     317,186  

Total long term debt and capital lease obligations

    212,190     159,018     216,783     203,444  

Total stockholders' equity

    66,198     79,191     71,720     74,102  

(1)
Adjusted EBITDA consists of net income as adjusted for depreciation and amortization, interest expense, interest and other income, income taxes, income from discontinued operations, non-cash equity based compensation expense, impairment loss resulting from discontinued operations, loss on interest rate swap, the management fee that we pay to Genstar and for certain other items that we believe are appropriate to manage the business and for the understanding of the reader, as detailed below. You are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis.

    We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industries with similar capital structures. We believe issuers of "high yield" securities also present Adjusted EBITDA because investors, analysts and rating agencies consider it useful in measuring the ability of those issuers to meet debt service obligations. We believe that Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures for interest are, by definition, available to pay interest, and income tax expense is inversely correlated to interest expense because income tax expense goes down as deductible interest expense goes up and depreciation and amortization are non-cash charges.

    Adjusted EBITDA has limitations as an analytical tool, and you should not consider this item in isolation, or as a substitute for an analysis of our results as reported under GAAP. Some of these limitations are:

    Adjusted EBITDA:

    excludes certain income tax payments that may represent a reduction in cash available to us;

    does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

    does not reflect changes in, or cash requirements for, our working capital needs; and

    does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on our debt, including the notes;

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;

    is adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;

    other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure; and

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    we include certain adjustments that may be recurring in nature and may not meet the GAAP definition of infrequent or unusual items, but we believe these items are appropriate to manage the business and for the understanding of the reader.

    Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

    In calculating Adjusted EBITDA, we make certain adjustments that are based on assumptions and estimates. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses, or realize benefits, similar to those adjusted in this presentation. We calculate Adjusted EBITDA in accordance with the debt covenants of our revolving credit agreement and certain adjustments are subject to debt administrator concurrence.

    Adjusted EBITDA is a supplemental measure of our performance and our ability to service debt that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or any other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as measures of our liquidity. In addition, our measurements of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

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    The following table reconciles net income to Adjusted EBITDA for the periods presented:

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  2009   2010   2007   2008   2009  
 
  (unaudited)
   
   
   
 
 
  (in thousands)
 

Net income (loss)

  $ 1,608   $ (8,478 ) $ (6,975 ) $ (8,387 ) $ 1,355  
 

Depreciation and amortization

    14,118     13,830     15,662     18,110     18,718  
 

Interest expense

    12,647     16,206     17,486     18,258     16,726  
 

Interest and other income, net

    240     322     52     (200 )   250  
 

Income tax (benefit) expense

    1,963     (4,880 )   (3,920 )   (2,990 )   1,654  
                       

EBITDA

    30,576     17,000     22,305     24,791     38,703  

Plus:

                               
 

Debt extinguishment cost

        2,932              
 

Impairment loss resulting from discontinued operations

                4,065      
 

Income from discontinued operations

            (155 )   (29 )    
 

Stock-based compensation expense

    791     574     255     804     944  
 

Loss on interest rate swap(a)

    746     267     1,860     3,372     916  
 

Legal expenses and settlements(b)

    (4,268 )           2,322     (4,268 )
 

Acquisition audits and related expenses(c)

    712     253         591     713  
 

Corporate relocation costs(d)

                1,110      
 

Management fees(e)

    1,125     1,125     1,500     1,500     1,500  
 

Severance costs(f)

    200     810     3,727     (65 )   187  
 

Center closure cost(g)

    548     2,722              
 

Other expenses(h)

    199     1,008     903     683     825  
                       

Adjusted EBITDA

  $ 30,629   $ 26,691   $ 30,395   $ 39,144   $ 39,520  
                       

(a)
Loss on interest rate swap that does not qualify for hedge accounting. See Note 6 of the Notes to our Consolidated Financial Statements included elsewhere in this prospectus.

(b)
Represents legal expenses and proceeds received related to the settlement of litigation.

(c)
Includes $0.3 million and $0.7 million related to one-time acquisition-related audit expenses incurred during 2008 and 2009, respectively; $0.3 million in acquisition-related expenses in 2008; and $0.3 million in acquisition-related expenses for the nine months ended September 30, 2010.

(d)
Represents one-time costs associated with the relocation of our corporate headquarters to Colorado.

(e)
Represents management fees paid to Genstar.

(f)
Represents severance costs related to: the management team transition in 2007; general personnel reductions during 2008 and 2009; and the departure of our former CEO and other workforce reduction costs during the nine months ended September 30, 2010.

(g)
Includes estimated legal costs related to a lease settlement and temporary vault costs during permanent vault construction at one center location.

(h)
Includes $0.5 million of one-time lease-termination costs in 2009, deferred rent amortization of $0.2 million, $0.5 million and $0.3 million in 2007, 2008 and 2009, respectively; other

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    expenses related to discontinued operations of $0.6 million and $0.1 million in 2007 and 2008, respectively; $0.1 million of Genstar acquisition costs in 2007; and $0.5 million conditional management retention expense during the nine months ended September 30, 2010, $0.1 million of cost related to re-organizing physician groups in Florida into a consolidated billing entity during the nine months ended September 30, 2010, and deferred rent amortization of $0.2 million and $0.1 million for the nine months ended September 30, 2009 and 2010, respectively.


RATIO OR DEFICIENCY OF EARNINGS TO FIXED CHARGES

        The following table sets forth our ratio or deficiency of earnings to fixed charges for the nine months ended September 30, 2009 and 2010 and the years ended December 31, 2005, 2006, 2007, 2008 and 2009. For the purpose of determining the ratio of earnings to fixed charges, "earnings" consist of earnings (loss) before income tax expense (benefit) and fixed charges and "fixed charges" consist of interest expense, including amortization of deferred financing costs, plus the portion of rental expense considered to be representative of an interest factor.

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2009   2010   2005   2006   2007   2008   2009  

Ratio of earnings to fixed charges

    1.26         1.29                 2.54  

Coverage deficiency

      $ (13,202 )     $ (18,082 ) $ (11,583 ) $ (7,051 )    

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RISK FACTORS

        You should carefully consider the risks described below as well as other information and data included in this prospectus before making a decision to exchange your private notes for the exchange notes in the exchange offer. If any of the events described in the risk factors below occur, our business, financial condition, operating results and prospects could be materially adversely affected, which in turn could adversely affect our ability to repay the notes. The risk factors set forth below are generally applicable to the private notes as well as the exchange notes.

Risks Related to Our Business

We depend on revenues generated by our affiliated physician groups from Medicare and Medicaid programs for a significant amount of our net revenue and our business could be materially harmed by any changes that result in reimbursement reductions.

        Our affiliated physician groups' payor mix is highly focused toward Medicare patients due to the high proportion of cancer patients over the age of 65. We estimate that approximately 50%, 46%, 44%, 43% and 45% of our affiliated physician groups' net revenue for fiscal years 2007, 2008 and 2009, and for the nine month ended September 30, 2009 and 2010, respectively, consisted of payments from Medicare and Medicaid. These government programs generally reimburse on a fee-for-service basis based on a predetermined reimbursement rate schedule. For Medicare, this is referred to as the Medicare Physician Fee Schedule and many state Medicaid programs use a fixed percentage of the Medicare fee schedule as a basis for their reimbursement rate schedule. Medicare reimbursement rates under the Medicare Physician Fee Schedule are updated on an annual basis using a statutory formula that is applied to all physician specialties. Under the existing statutory formula, payments for the past several years would have decreased without congressional intervention and extensions. For example, without congressional intervention for calendar year 2010, the payment amounts were scheduled to have been 21.2% less than 2009 payment amounts for each physician service. Over the years, there have been a number of congressional proposals to revise the statutory formula to avoid the annual decreases, sometimes referred to as the permanent "doctor fix", but to date only temporary legislative measures have been taken. The most recent temporary measure was the Medicare and Medicaid Extenders Act of 2010 which was signed into law on December 15, 2010. This measure extends a prior temporary 2.2% increase in payment rates through 2011. Without this latest measure, the earlier 2.2% increase would have ended on December 31, 2010. According to the Centers for Medicare & Medicaid Services, or CMS, responsible for implementing the Medicare Physician Fee Schedule, had the temporary measure not been enacted, there would have been a projected 24.9% reduction from December 1, 2010 through December 31, 2011. If Congress fails to intervene to prevent the negative update factor for future years through either another temporary measure or a permanent revisions to the statutory formula, the resulting decrease in payment will adversely impact our revenues and results of operations.

        Effective January 1, 2011, CMS made further adjustments to the Medicare Physician Fee Schedule to increase aggregate payments for those physician specialties that have a higher proportion of their payment rates attributable to operating expenses such as equipment and supplies, which includes radiation oncology. In addition, as a result of adjustments to billing codes identified to be misvalued, radiation oncology specialties are also among the entities that will experience decreases in aggregate payment for this reason. Some of these changes will be transitioned over several years, and CMS estimates that the combined impact of both the increases and decreases for 2011 will be net 1% reduction in radiation oncology payments. These estimated impacts are calculated prior to the application of the negative update factor discussed above. At this time, we do not believe that the regulatory changes will have a material impact on our future revenues.

If revenues generated by our affiliated physician groups by managed care organizations and other third-party payors decrease, our net revenue and profitability would be adversely affected.

        We estimate that approximately 49%, 53%, 55%, 56% and 54% of our affiliated physician groups' net revenue for fiscal years 2007, 2008 and 2009, and for the nine months ended September 30, 2009

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and 2010, respectively, was derived from payments by third-party payors such as managed care organizations and private health insurance programs. These third-party payors generally pay for the services rendered to an insured patient based upon predetermined rates. Managed care organizations typically pay at lower rates than traditional private health insurance programs. While third-party payor rates are generally higher than government program reimbursement rates, if managed care organizations and other private insurers reduce their rates or our affiliated physician groups experience a significant shift toward additional managed care payors or Medicare or Medicaid reimbursements, then our net revenue and profitability will decline and our operating margins will be reduced. Any inability to maintain suitable financial arrangements with third-party payors could have a material adverse impact on our business.

Our treatment centers are concentrated in Florida and California, which makes us particularly sensitive to regulatory, economic and other conditions that affect those states.

        Our California treatment centers accounted for approximately 60%, 57%, 52%, 52% and 52% of our net revenues during fiscal years 2007, 2008, and 2009, and for the nine months ended September 30, 2009 and 2010, respectively, and our Florida treatment centers accounted for approximately 37%, 35%, 34%, 35% and 34% of our net revenues during fiscal years 2007, 2008, 2009, and for the nine months ended September 30, 2009 and 2010, respectively. If our treatment centers in these states are adversely affected by changes in regulatory, economic and other conditions, our net revenue and profitability may decline.

Pressure to control healthcare costs could have a negative impact on our results.

        One of the principal objectives of managed care organizations (such as health maintenance organizations and preferred provider organizations) is to control the cost of healthcare services. Healthcare providers participating in managed care plans may be influenced to refer patients seeking radiation therapy for their cancer treatment to certain providers depending on the plan in which a covered patient is enrolled. The expansion of health maintenance organizations, preferred provider organizations and other managed care organizations within the geographic areas covered by our treatment centers could have a negative impact on the utilization and pricing of our services, because these organizations may exert greater control over patients' access to radiation therapy services, the selections of the provider of such services and reimbursement rates for those services.

Reforms to the United States healthcare system may adversely affect our business.

        A significant portion of the volume at our treatment centers is derived from government healthcare programs, principally Medicare and Medicaid, which are highly regulated and subject to frequent and substantial changes. We estimate that approximately 44% of our affiliated physician groups' 2009 revenue was derived from government healthcare programs. National healthcare reform remains a focus at the federal level. In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the "PPACA").

        We anticipate the Health Care Reform Act will significantly affect how the healthcare industry operates with respect to Medicare, Medicaid and private health insurance. The Health Care Reform Act contains a number of provisions, including those governing fraud and abuse, enrollment in federal healthcare programs, and reimbursement changes, which will impact existing government healthcare programs and will result in the development of new programs, including Medicare payment for performance initiatives and improvements to the physician quality reporting system and feedback program. We can give no assurance that the PPACA will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform would affect our business.

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We may need to raise additional capital, which may be difficult or impossible to obtain at attractive prices.

        We may need additional capital for growth, acquisitions, development, integration of operations and technology and equipment in the future. Any additional capital could be raised through public or private debt or equity financings. The incurrence of additional debt could increase our interest expense and other debt service obligations and could result in the imposition of additional covenants that restrict our operational and financial flexibility. Additional capital may not be available to us on commercially reasonable terms or at all. The failure to raise additional needed capital could impede the implementation of our operating and growth strategies.

The radiation therapy market is highly competitive.

        Radiation therapy is a highly competitive business. Our treatment centers face competition from hospitals, other practitioners and other operators of radiation oncology treatment centers. Certain of our competitors have longer operating histories and significantly greater financial and other resources than us. Competitors with greater access to financial resources or other operational advantages may enter our markets and compete with us. Such competition may make it more difficult for us to affiliate with additional radiation oncology groups on terms that are favorable to us or maintain our relationships with existing affiliated physician groups, which could adversely affect our business.

We depend on our executive management and our non-executive Chairman and we may be materially harmed if we lose any member of our executive management or our non-executive Chairman.

        We are dependent upon the services of our executive management, especially L. Duane Choate, our President and Chief Executive Officer, Timothy A. Peach, our Chief Financial Officer and Treasurer, William L. Pegler, our Senior Vice President and Chief Operating Officer, Russell D. Phillips, Jr., our Executive Vice President, General Counsel and Chief Compliance Officer, and our non-executive Chairman, Dr. Shyam B. Paryani. We have entered into executive employment agreements with Messrs. Choate, Pegler and Phillips. Because these members of our senior management team and Dr. Paryani have contributed greatly to our growth, their services would be very difficult, time consuming and costly to replace. We do not carry key-man life insurance on our executive management team. The loss of key personnel or our inability to attract and retain qualified personnel could have a material adverse effect on us. A decision by any of these individuals to leave our employ, to compete with us or to reduce his involvement on our behalf, would have a material adverse effect on our business.

If our affiliated physicians groups terminate or decline to renew their management services agreements, or MSAs, with us, we could be seriously harmed.

        The MSAs we enter into with our affiliated physician groups are the result of arms' length negotiations. Under certain circumstances, the affiliated physicians groups are permitted, and may attempt, to terminate their MSAs with us. For example, an MSA can generally be terminated if we commence a voluntary or involuntary case of bankruptcy, fail to perform our duties and responsibilities under the MSA which breaches a material term or condition of the MSA and fail to cure such breach within a specified period, withdraw from participation in the Medicare program, or breach representations and warranties made by us in the MSAs. If any of the larger affiliated physicians groups were to succeed in such a termination, our business could be seriously harmed. For the year ended December 31, 2009, approximately 36% of our net revenue came from management fees earned from two of our affiliated physician groups, one of which represents 13% of our revenue and expires in 2011 and one of which represents 23% of our revenue and expires in 2016. We may in the future have disputes with physicians and/or affiliated physicians groups that could result in harmful changes to our relationship with them or a termination of an MSA. Likewise, to the extent that our MSAs with affiliated physician groups expire and are not renewed, our business may be adversely affected. Our 14 MSAs are scheduled to expire periodically between 2011 and 2023, with no more than two expiring in any given year, except 2016 when four will expire.

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Current economic conditions could adversely affect our business.

        The economy and capital and credit markets have experienced exceptional turmoil and upheaval. Many major economies worldwide entered significant economic recessions in 2007 and some continue to experience economic weakness. Ongoing concerns about the systemic impact of potential long-term and widespread recession and potentially prolonged economic recovery, volatile energy costs, geopolitical issues, the availability, cost and terms of credit, consumer and business confidence, substantially increased and potentially increasing unemployment rates and the ongoing crisis in the global housing and mortgage markets have all contributed to increased market volatility and diminished expectations for both established and emerging economies. In the second half of 2008, added concerns fueled by government interventions in financial systems led to increased market uncertainty and instability in both the United States and international capital and credit markets. These conditions led to economic uncertainty of unprecedented levels. The availability, cost and terms of credit also have been and may continue to be adversely affected by illiquid markets and wider credit spreads. Concern about the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors to reduce, and in many cases cease to provide, credit to businesses and consumers. These factors have led to a substantial and continuing decrease in spending by businesses and consumers over the past two years. Continued turbulence in the United States and international markets and economies and prolonged declines in business and consumer spending may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our customers, including our ability to refinance maturing debt instruments and to access the capital markets and obtain capital lease financing to meet liquidity needs. As of September 30, 2010 we had $212.2 million of total indebtedness of which $206.5 million, net of $3.5 million discount, relates to the notes and matures on May 15, 2017.

Our growth strategy depends in part on our ability to acquire and develop additional treatment centers on favorable terms. If we are unable to do so, our future growth could be limited.

        We may be unable to identify, negotiate and consummate suitable acquisition and development opportunities on reasonable terms. We began operating our first radiation oncology treatment center in 1998, and have grown to operate 37 radiation oncology treatment centers. We expect to continue to add additional treatment centers in our existing and new regional markets. Our growth, however, will depend on several factors, including:

    our ability to obtain desirable locations for treatment centers in suitable markets;

    our ability to affiliate with a sufficient number of radiation oncology groups;

    our ability to obtain adequate financing to fund our growth strategy;

    our ability to successfully operate under applicable government regulations;

    environmental risks associated with the disposal of radioactive, chemical and medical waste; and

    delays that often accompany construction of treatment centers.

Our information systems are critical to our business and a failure of those systems could materially harm us.

        We depend on our ability to store, retrieve, process and manage a significant amount of information, and to provide our treatment centers with efficient and effective accounting, scheduling, billing and treatment planning systems. If our information systems fail to perform as expected, or if we suffer an interruption, malfunction or loss of information processing capabilities, it could have a material adverse effect on our business.

We may be subject to actions for false claims for failure to comply with government coding and billing rules which could harm our business given our role as agent for such physician groups.

        If we, or any of the physician groups with which we contract, fail to comply with federal and state documentation, coding and billing rules, both we and they could be subject to civil and/or criminal

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penalties, loss of licenses and exclusion from the Medicare and/or Medicaid programs. Approximately 50%, 46%, 44%, 43% and 45% of our affiliated physician groups' net revenue for fiscal years 2007, 2008 and 2009, and for the nine months ended September 30, 2009 and 2010, respectively, consisted of payments from Medicare and Medicaid programs. In billing for services to third-party payors, complex documentation, coding and billing rules must be followed. These rules are based on federal and state laws, rules and regulations, various government pronouncements and industry practice. Failure to follow these rules could result in potential criminal or civil liability under the federal False Claims Act, under which extensive financial penalties can be imposed. It could further result in criminal liability under various federal and state criminal statutes. While we strive to comply with applicable federal and state documentation, coding, and billing requirements, and the charges submitted on behalf of our affiliated physician groups are carefully and regularly reviewed as part of our compliance program, there can be no assurances that governmental investigators, private insurers or private whistleblowers will not challenge these practices. A challenge could result in a material adverse effect on our business.

State law limitations and prohibitions on the corporate practice of medicine and fee splitting may materially harm our business and specify how we can operate.

        State governmental authorities regulate the medical industry and medical practices extensively. Many states have laws and regulations prohibiting the corporate practice of medicine and fee splitting laws which may prohibit us from:

    employing physicians;

    practicing medicine, which, in some states, includes operating a radiation oncology practice group;

    entering into certain types of fee arrangements with physicians;

    owning or controlling equipment used in a medical practice;

    setting fees charged for physician services;

    maintaining a physician's patient records; or

    controlling the content of physician marketing materials.

        In addition, many states impose limits on the tasks a physician may delegate to other staff members. We have MSAs in states, such as California, Indiana and Florida. California and Indiana prohibit the corporate practice of medicine. Corporate practice of medicine laws and their interpretation vary from state to state, and regulatory authorities enforce them with broad discretion. In California and Indiana, whether an arrangement will be considered unlawful depends on the extent of control or influence a corporation has over a physician practice or clinical decision-making. Although we believe that our operations are in material compliance with applicable state laws because: (1) our MSAs do not give us control over our affiliated physician groups or enable us to exert any control over their medical decisions; and (2) we are compensated at fair market value for bona fide services we provide to the physician groups under these MSAs, if we are found to be in violation of these laws, we could be required to restructure our agreements which could materially harm our business and limit how we operate. In the event the corporate practice of medicine laws of other states would adversely limit our ability to operate, it could prevent us from expanding into the particular state and impact our growth strategy.

If we fail to comply with the laws and regulations applicable to our treatment center operations, we could suffer penalties or be required to make significant changes to our operations.

        Our treatment center operations are subject to many laws and regulations at the federal, state and local government levels. These laws and regulations require that our treatment centers meet various licensing, certification and other requirements, including those relating to:

    qualification of medical and support persons;

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    protection of the privacy of patients' individually identifiable health information;

    pricing of services by healthcare providers;

    the adequacy of medical care, equipment, personnel, operating policies and procedures;

    maintenance and protection of records; and

    environmental protection, health and safety.

        If our treatment centers fail or have failed to comply with applicable laws and regulations, we and/or our affiliated physician groups could suffer civil or criminal penalties, including becoming the subject of cease and desist orders, losing our licenses to operate and/or losing our ability to participate in government or private healthcare programs, any or all of which could have material adverse effects on our business.

If we or our affiliated physician groups fail to comply with the federal Anti-Kickback Statute, we or they could be subject to civil and criminal penalties, and they could face loss of licenses, and exclusion from the Medicare and Medicaid programs, which could materially harm us given our role as agent for such physician groups.

        A provision of the Social Security Act, commonly referred to as the federal Anti-Kickback Statute, prohibits the offer, payment, solicitation or receipt of any form of remuneration in return for referring, ordering, leasing, purchasing or arranging for or recommending the ordering, purchasing or leasing of items or services payable by Medicare, Medicaid or any other federally funded healthcare program. The federal Anti-Kickback Statute is very broad in scope and many of its provisions have not been uniformly or definitively interpreted by existing case law or regulations. All of our financial relationships with healthcare providers are potentially implicated by this statute to the extent Medicare or Medicaid referrals are implicated. Financial relationships covered by this statute can include any relationship where remuneration is provided for referrals including payments not commensurate with fair market value, whether in the form of space, equipment leases, professional or technical services or anything else of value. We use our best efforts to structure any financial relationship with referral sources of Medicare and/or Medicaid beneficiaries in accordance with safe harbors promulgated under the Anti-Kickback Statute. In addition, our affiliated physician groups covenant in the MSAs to comply with all laws, including but not limited to, the Anti-Kickback Statute governing the practice of medicine or the provision of radiation oncology services. Further, the PPACA, among other things, amends the intent requirement of the federal Anti-Kickback and criminal health care fraud statutes. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the PPACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes. Violations of the federal Anti-Kickback Statute may result in substantial civil or criminal penalties to us or our affiliated physician groups or both. The exclusion, if applied to one or more of our affiliated physician groups or affiliate personnel, could result in significant reductions in our net revenue and could have a material adverse effect on our business. In addition, all the states in which we operate have also adopted similar anti-kickback laws that prohibit payments to physicians in exchange for referrals, some of which apply regardless of the source of payment for care. These statutes typically impose criminal and civil penalties as well as loss of licenses. Although we believe that we are operating in compliance with the Anti-Kickback Statute and comparable state laws, and believe that our arrangements with our affiliated physician groups do not violate such laws, we can offer no assurance that these laws will not be interpreted in a manner that could have an adverse effect on our business.

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If we fail to comply with the provision of the Civil Monetary Penalties Law relating to inducements provided to patients, we could be subject to civil penalties and exclusion from the Medicare and Medicaid programs, which could materially harm us.

        Under a provision of the federal Civil Monetary Penalties Law, civil monetary penalties (and exclusion) may be imposed on any person who offers or transfers remuneration to any patient who is a Medicare or Medicaid beneficiary, when the person knows or should know that the remuneration is likely to induce the patient to receive medical services from a particular provider. This broad provision applies to many kinds of inducements or benefits provided to patients, including complementary items, services or transportation that are of more than a nominal value. If government authorities impose civil monetary penalties and exclude our affiliated physician groups for past or present practices, given our role as an agent, the imposition of monetary penalties and/or exclusion of any of our affiliated physician groups could harm our business.

Our business could be materially harmed by future interpretation or implementation of state laws regarding prohibitions on fee-splitting.

        The states in which we operate prohibit the splitting or sharing of fees between physicians and non-physicians. These laws vary from state to state and are enforced by courts and regulatory agencies, each with broad discretion. Some states have interpreted certain types of fee arrangements in management services agreements between entities and physicians as unlawful fee-splitting. If regulatory authorities or other parties successfully asserted a fee-splitting claim in any jurisdiction, we, our affiliated physician groups and their physicians could be subject to civil and criminal penalties and we could be required to restructure our MSAs. Any restructuring of MSAs with affiliated physician groups could result in lower net revenue from such physician groups. Alternatively, some of our MSAs could be found to be illegal and unenforceable, which could result in the termination of those MSAs and an associated loss of net revenue. In addition, expansion of our operations to other states with certain types of fee-splitting prohibitions may require structural and organizational modification to the form of relationships that we currently have with physicians, professional corporations and hospitals.

If a federal or state agency adopts a different position or enacts new laws or regulations regarding illegal payments under the Medicare, Medicaid or other governmental programs, we may be subject to civil and criminal penalties, experience a significant reduction in our net revenue or our affiliated physician groups could be excluded from participation in the Medicare, Medicaid or other governmental programs.

        Any change in interpretations or enforcement of existing or new laws and regulations could subject our business to allegations of impropriety or illegality, or could require us to make changes in our treatment centers, equipment, personnel, services, pricing or capital expenditure programs, which could increase our operating expenses and have a material adverse effect on our operations or reduce the demand for or profitability of our services.

        Additionally, new federal or state laws may be enacted that would cause our relationships with our radiation oncologists to become illegal or result in the imposition of penalties against us or our treatment centers. If any of our MSAs with our affiliated physician groups were deemed to violate the federal Anti-Kickback Statute or similar laws, or if new federal or state laws were enacted rendering these arrangements illegal, our business would be adversely affected.

If we fail, or any of our affiliated physician groups fail, to comply with physician self-referral laws as they are currently interpreted or may be interpreted in the future, or if other legislative restrictions are issued, we could incur a significant loss of net revenue.

        We and the affiliated physician groups with whom we contract are subject to federal and state statutes and regulations prohibiting payments for certain healthcare services rendered as a result of patient referrals by physicians to entities with whom the physicians have a financial relationship. The Stark Law, which applies to services provided to Medicare and Medicaid beneficiaries, generally prohibits a physician from referring patients for certain designated health services, or DHS, including

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radiation therapy, radiology and laboratory services, to an entity with which the physician has a financial relationship unless a statutory or regulatory exception applies. Financial relationship is interpreted broadly to include having investment interest in or compensation arrangement with an entity. In addition, effective January 1, 2011, as a component for satisfying the Stark exception for in-office ancillary services, the PPACA requires physicians who refer a patient to their own practice for MRS, CT, PET and any other DHS to inform the patient in writing at the time of the referral that the patient may obtain such services from a person other than the in-office provider, and provide the patient with a written list of providers who furnish such services in the area in which the patient resides. State self-referral laws and regulations vary significantly from state to state and in many cases, have not been interpreted by courts or regulatory agencies. For example, the state laws and regulations in California, Florida and Indiana could be interpreted to encompass not only services reimbursed by Medicaid or government payors, but also private payors. Violation of these federal and state laws and regulations may result in prohibition of payment for services rendered, loss of licenses, fines, criminal penalties and/or exclusion from Medicare and Medicaid programs.

        Our compensation and other financial arrangements with physicians are governed by the federal Stark Law. Specifically, physicians with whom we are affiliated beneficially own 1.3% of our capital stock, and we also have financial arrangements with physicians who refer Medicare and Medicaid patients to our affiliated physician groups. Although we believe that our operations do not violate the Stark Law because our compensation and financial arrangements with physicians meet one or more Stark exceptions, government authorities may determine we are not in compliance with the Stark Law or prohibited referrals may occur, which could subject us to civil and criminal penalties, including fines, exclusion from participation in government and private payor programs and requirements to refund amounts previously received from government and private payors. In addition, expansion of our operations to new jurisdictions, or new interpretations of laws in our existing jurisdictions, could require structural and organizational modifications of our relationships with physicians to comply with that jurisdiction's laws. Such structural and organizational modifications could result in lower profitability and failure to achieve our growth objectives.

Our costs and potential risks have increased as a result of the new regulations relating to privacy and security of patient information.

        There are numerous federal and state regulations addressing patient information privacy and security concerns. In particular, the federal regulations issued under the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health, or HITECH, Act of 2009, contain provisions that:

    protect individual privacy by limiting the uses and disclosures of patient information;

    require the implementation of security safeguards to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form; and

    prescribe specific transaction formats and data code sets for certain electronic healthcare transactions.

        Compliance with these regulations requires considerable financial and management resources. The HIPAA regulations expose us to increased regulatory risk if we fail to comply, which could adversely affect our business.

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Efforts to regulate the construction, acquisition or expansion of health care treatment centers could prevent us from developing or acquiring additional treatment centers or other facilities or renovating our existing treatment centers.

        Many states have enacted certificate of need, or CON, laws which require prior regulatory approval for the construction, acquisition or expansion of healthcare treatment centers. Before giving approval, these states consider the need for additional or expanded healthcare treatment centers or services. We do not currently operate any treatment centers in a CON state. However, states in which we may operate in the future may require CON under certain circumstances not currently applicable to us. We cannot assure you that we will be able to obtain the CON or other required approvals for additional or expanded treatment centers or services in the future. In addition, at the time we acquire a treatment center in a CON state, we may agree to replace or expand the acquired treatment center. We have made no such commitments to date. If we are unable to obtain required approvals, we may not be able to acquire additional treatment centers or other facilities in CON states, expand the healthcare services we provide at these treatment centers or replace or expand acquired treatment centers.

In response to recent press reports concerning the risk of significant, sometimes fatal, errors in radiation therapy, especially relating to linear radiation, accreditation of facilities and the establishment of a national error reporting database are under consideration.

        Several recent articles have been published discussing the risks of significant, sometimes fatal, errors in radiation oncology treatment, especially those relating to linac facilities that bill Medicare for radiation oncology services. In addition, various trade organizations have called for quality improvement measures and the establishment of the nation's first central database for the reporting of errors involving linacs and CT scanners. Federal legislation in these areas is under consideration and a congressional hearing was recently held. In addition, on September 29, 2010, California enacted a new law that will require hospitals and clinics to record radiation doses for CT scans, effective July 1, 2012, and to report any overdoses to patients, their doctors and the California Department of Public Health. Effective July 1, 2013, the new California law also requires all facilities that furnish CT services to be accredited by an organization approved by CMS, the Medical Board of California or the State Department of Public Health. We cannot assure you that the cost of complying with any new regulations will not be substantive, that the negative publicity concerning these errors will not adversely affect our business, or that these types of errors will not occur at our treatment centers.

Our failure to comply with laws related to hazardous materials could materially harm us.

        Our treatment centers provide specialized treatment involving the use of radioactive materials. Radioactive materials are obtained from third-party providers of supplies to hospitals and other radiation therapy practices. If these radioactive materials are not permanently implanted in a patient they are returned to such third-party provider, which has the ultimate responsibility for its proper disposal. We remain subject, however, to state and federal laws regulating the protection of employees who may be exposed to hazardous material and regulating the proper handling, storage and disposal of that material. A violation of such laws, or the future enactment of more stringent laws or regulations, could subject us to liability, or require us to incur costs that could have a material adverse effect on us. We carry professional liability, property and general liability insurance coverage which may, depending upon the facts related to an incident involving hazardous materials, provide coverage to us (subject to policy deductibles and limits) for such liabilities. However, we cannot predict the costs that might be associated with a violation of these laws and we cannot assure that the coverage provided by these policies would be sufficient to cover such liability.

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We are vulnerable to earthquakes, harsh weather and other natural disasters.

        Fifteen of our treatment centers and our centralized billing office are located in California, an area prone to earthquakes, fires and other natural disasters. In addition, all of our treatment centers located in Florida are in areas that have suffered from hurricanes in the past. Some of our treatment centers have also been affected by harsh weather conditions. An earthquake, harsh weather conditions or other natural disaster could decrease census during affected periods and seriously impair our operations. Damage to our equipment or interruption of our business would adversely affect our financial condition and results of operations.

If a casualty occurs at any of our treatment centers, our net revenue and profitability may be adversely affected.

        If a fire or similar casualty occurs at any of our treatment centers, operations at that site may be disrupted for an unknown period of time and the physicians at that treatment center may not be able to treat patients. Any disruption to our business due to a casualty could have an adverse impact on our net revenue and profitability.

Our financial results could be adversely affected by the increasing costs of professional liability insurance and by successful claims against us.

        We are exposed to the risk of professional liability and other claims against us and the professionals we employ arising out of radiation oncology services provided at our treatment centers. Professional liability claims, if successful, could result in substantial damage awards which might exceed the limits of any applicable insurance coverage. Insurance against losses of this type can be expensive and insurance premiums may increase in the near future. Insurance rates vary from state to state and as a result of other factors. The rising costs of insurance premiums, as well as successful professional liability claims against us or one of our employed professionals, could have a material adverse effect on our financial position and results of operations.

        It is also possible that our insurance coverage will not continue to be available at acceptable costs or on favorable terms. In addition, our insurance does not cover all potential liabilities arising from governmental fines and penalties, indemnification agreements and certain other uninsurable losses. As a result, we may become responsible for substantial damage awards that are uninsured.

        If payments for claims exceed actuarially determined estimates, are not covered by insurance, or reinsurers, if any, fail to meet their obligations, our results of operations and financial position could be adversely affected.

Our business may be harmed by technological and therapeutic changes.

        The treatment of cancer patients is subject to potentially revolutionary technological and therapeutic changes. Future technological developments could render our equipment obsolete. We may incur significant costs in replacing or modifying equipment in which we have already made a substantial investment prior to the end of its anticipated useful life. In addition, there may be significant advances in other cancer treatment methods, such as chemotherapy, surgery, biological therapy or in cancer prevention techniques, which could reduce demand or even eliminate the need for the radiation therapy services we provide.

Certain private equity investment funds affiliated with Genstar own a significant majority of our equity and their interests may not be aligned with yours.

        Genstar and its affiliates, directly and indirectly, beneficial owns 20,142,957 shares of our capital stock which represents 76.5% of our capital stock outstanding. Genstar also controls, to a large degree, the election of directors, the appointment of management, the entering into mergers, sales of

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substantially all of our assets and other extraordinary transactions. The directors have authority, subject to the terms of our debt, to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions. The interests of Genstar could conflict with your interests. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of Genstar, as an equity holder, might conflict with your interests as a noteholder. Genstar may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in its judgment, could enhance its equity investments, even though such transactions might involve risks to you as a noteholder. Additionally, Genstar is in the business of making investments in companies, and may from time to time in the future acquire interests in businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours.

Risks Related to the Exchange Notes

If you fail to follow the exchange offer procedures, your private notes will not be accepted for exchange.

        We will not accept your private notes for exchange unless you follow the exchange offer procedures. We will issue exchange notes as part of this exchange offer only after timely receipt of your private notes, a properly completed and duly executed letter of transmittal and all other required documents or if you comply with the guaranteed delivery procedures for tendering your private notes. Therefore, if you want to tender your private notes, please allow sufficient time to ensure timely delivery. If we do not receive your private notes, letter of transmittal, and all other required documents by the expiration date of the exchange offer at 5:00 p.m. New York City time, on                        , 2011 or you do not otherwise comply with the guaranteed delivery procedures for tendering your private notes, we will reject your private notes for exchange. Neither we nor the exchange agent is required to give notification of defects or irregularities with respect to the tenders of private notes for exchange. If there are defects or irregularities with respect to your tender of private notes, we will not accept your private notes for exchange unless we decide in our sole discretion to waive such defects or irregularities. You should refer to "Summary—The Exchange Offer," and "The Exchange Offer—Procedures for Tendering Old Notes" for information about how to tender your private notes.

If you do not properly tender your private notes, you will continue to hold unregistered private notes and your ability to transfer those private notes will be restricted.

        If you do not properly tender your private notes, or if we do not accept your private notes because you did not tender your private notes properly, then, after we consummate the exchange offer, you may continue to hold private notes that are subject to the existing transfer restrictions. In general, the private notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. We do not currently anticipate that we will take any action following the consummation of the exchange offer to register resales of the private notes under the Securities Act or under any state securities laws.

        In addition, if you tender your private notes for the purpose of participating in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. If you are a broker-dealer that receives exchange notes for your own account in exchange for private notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such exchange notes.

        After the exchange offer is consummated, if you continue to hold any private notes, you may have difficulty selling them because there will be less private notes outstanding. In addition, if a large amount of private notes are not tendered or are tendered improperly, the limited amount of exchange notes that would be issued and outstanding after we consummate the exchange offer could lower the market price of such exchange notes.

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Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under the exchange notes.

        As of September 30, 2010, we had $212.2 million of total indebtedness ($206.5 million, net of $3.5 million discount, represents the notes which mature on May 15, 2017) and capacity in an amount of up to $40.0 million of revolving credit borrowings (subject to increase pursuant to the terms of the indenture governing the notes and the agreement governing our credit facility). Our substantial indebtedness could have important consequences to you. For example, it could:

    make it more difficult for us to satisfy our obligations with respect to the exchange notes, including our obligations to make interest and principal payments on the exchange notes and to repurchase the exchange notes under certain circumstances;

    increase our vulnerability to general adverse economic and industry conditions;

    make it more difficult for us to satisfy our financial obligations, including with respect to the exchange notes;

    restrict us from making strategic acquisitions or cause us to make non-strategic divestitures;

    require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;

    limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

    place us at a competitive disadvantage compared to our competitors that have less debt; and

    limit our ability to borrow additional funds.

        In addition, the terms of the indenture governing the exchange notes and our revolving credit facility contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debts.

Despite our substantial indebtedness level, we and our subsidiaries may still be able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness.

        We and our subsidiaries may be able to incur substantial additional indebtedness, including additional notes and other secured indebtedness, in the future. Although the indenture governing the exchange notes and the agreement governing our revolving credit facility contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial. For example, under the indenture, we are permitted to incur any amount of additional indebtedness provided we maintain certain leverage ratios. Additionally, we are allowed to incur permitted debt, as described under the caption "Description of Exchange Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock." If new debt is added to our existing debt levels, the related risks that we now face would intensify. In addition, the indenture governing the exchange notes and the agreement governing our revolving credit facility do not prevent us from incurring obligations that do not constitute indebtedness under the agreements.

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To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

        Our ability to make payments on and to refinance our indebtedness, including the exchange notes, to fund planned capital expenditures and to maintain sufficient working capital will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

        We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our revolving credit facility or from other sources in an amount sufficient to enable us to service our indebtedness, including the exchange notes, or to fund our other liquidity needs. If our cash flows and capital resources are insufficient to allow us to make scheduled payments on our indebtedness, we may need to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance all or a portion of our indebtedness, including our revolving credit facility and the exchange notes, on or before maturity in 2017. We are currently obligated to pay approximately $24.7 million each year in interest on the $210.0 million of notes. We cannot assure you that we will be able to refinance any of our indebtedness, including our revolving credit facility and the exchange notes, on commercially reasonable terms or at all, or that the terms of that indebtedness will allow any of the above alternative measures or that these measures would satisfy our scheduled debt service obligations. If we are unable to generate sufficient cash flow to repay or refinance our debt on favorable terms, it could have significant adverse effects on our financial condition, the value of our outstanding debt, including the exchange notes offered hereby, and our ability to make any required cash payments under our indebtedness, including the exchange notes.

The liens on the collateral securing the exchange notes will be junior and subordinate to the liens on the collateral securing our obligations under our revolving credit facility or any other permitted first lien indebtedness. If there is a default, the value of the collateral may not be sufficient to repay both the lenders under our revolving credit facility and holders of other permitted first lien indebtedness and the holders of the exchange notes.

        The exchange notes will be secured by second-priority liens, subject to certain permitted liens and encumbrances described in the security documents relating to the exchange notes, to be granted by us on our assets that secure the obligations under our revolving credit facility and other permitted first lien indebtedness on a first-priority basis.

        Substantially all of our assets are subject to first-priority liens in favor of the lenders under our revolving credit facility. Because obligations under our revolving credit facility are secured on a first-priority basis, a default under that facility would entitle those lenders to declare all funds outstanding under our revolving credit facility to be immediately due and payable and to foreclose on our assets that also serve as collateral for the exchange notes.

        The rights of the holders of the exchange notes with respect to the collateral securing the exchange notes will be limited pursuant to the terms of the security documents relating to the exchange notes and an intercreditor agreement. Under the terms of those agreements, the holders of the exchange notes will have a second-priority lien on all of the collateral that secures the obligations under our revolving credit facility and other permitted first lien indebtedness on a first-priority basis. Accordingly, any proceeds received upon a realization of the collateral securing the exchange notes will be applied first to amounts due under our revolving credit facility and other permitted first lien indebtedness before any amounts will be available to pay the holders of the exchange notes. Under the terms of the indenture governing the exchange notes, we are permitted to incur first lien indebtedness in amounts in excess of the current commitments under our revolving credit facility, all of which can be secured by the collateral on a first-priority lien basis and which will be entitled to payment out of the proceeds of any sale of such collateral before the holders of the exchange notes are entitled to any recovery from such collateral.

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        Additionally, the terms of the indenture allow us to issue additional notes in certain circumstances. The indenture does not require that we maintain the current level of collateral or maintain a specific ratio of indebtedness-to-asset values. Any additional notes issued pursuant to the indenture will rank pari passu with the exchange notes and be entitled to the same rights and priority with respect to the collateral. Thus, the issuance of additional notes pursuant to the indenture may have the effect of significantly diluting your ability to recover payment in full from the then existing pool of collateral. Any obligations secured by such liens may further limit the recovery from the realization of the collateral available to satisfy holders of the exchange notes.

We are subject to a number of restrictive covenants, which may restrict our business and financing activities.

        The agreement governing our revolving credit facility and the indenture governing the exchange notes impose, and the terms of any future indebtedness may impose, operating and other restrictions on us. Such restrictions affect, and in many respects limit or prohibit, among other things, our and our subsidiaries' ability to:

    incur or guarantee additional indebtedness or issue disqualified capital stock;

    transfer or sell assets;

    pay dividends or distributions, redeem subordinated indebtedness, make certain types of investments or make other restricted payments;

    create or incur liens;

    incur dividend or other payment restrictions affecting certain subsidiaries;

    consummate a merger, consolidation or sale of all or substantially all of our assets;

    enter into transactions with affiliates;

    designate subsidiaries as unrestricted subsidiaries;

    engage in a business other than a business that is the same or similar to our current business or a reasonably related business; and

    take or omit to take any actions that would adversely affect or impair in any material respect the collateral securing the exchange notes and our revolving credit facility.

        If we are unable to comply with the restrictions contained in our revolving credit facility, the lenders could:

    foreclose and sell assets;

    declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable; or

    require us to apply all of our available cash to repay the borrowings under the revolving credit facility;

any of which could result in an event of default under the exchange notes.

        If we are unable to repay or otherwise refinance these borrowings when due, the lenders could sell the collateral securing our revolving credit facility, which constitutes substantially all of our and our subsidiaries' assets. Although holders of the exchange notes could accelerate the exchange notes upon the acceleration of the obligations under our revolving credit facility, we cannot assure you that sufficient assets will remain after we have repaid all the borrowings under our revolving credit facility.

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Only certain of our subsidiaries will be required to guarantee the exchange notes, and the assets of our non-guarantor subsidiaries may not be available to make payments on the exchange notes.

        As of the date of the indenture governing the exchange notes, all of our subsidiaries will be restricted subsidiaries. Our domestic restricted subsidiaries, other than certain immaterial subsidiaries, will guarantee the exchange notes. However, under certain circumstances we will be permitted to designate some of our subsidiaries as unrestricted subsidiaries. Certain of our subsidiaries, including any unrestricted subsidiaries, may not be required to guarantee the exchange notes. However, the indenture governing the exchange notes will permit these subsidiaries to incur significant amounts of indebtedness in the future. In the event that any non-guarantor subsidiary becomes insolvent, liquidates, reorganizes, dissolves or otherwise winds up, holders of its indebtedness and its trade creditors generally will be entitled to payment on their claims from the assets of that subsidiary before any of those assets are made available to us. Consequently, your claims in respect of the exchange notes will be effectively subordinated to all of the liabilities of our non-guarantor subsidiaries, including trade payables, and the claims (if any) of third party holders or preferred equity interests in our non-guarantor subsidiaries.

Under certain circumstances a court could cancel the exchange notes or the related guarantees and the security interests that secure the exchange notes and any guarantees under fraudulent conveyance laws.

        Our issuance of the exchange notes and the related guarantees may be subject to review under federal or state fraudulent transfer law. If we become a debtor in a case under the United States Bankruptcy Code or encounter other financial difficulty, a court might avoid (that is, cancel) our obligations under the exchange notes. The court might do so if it found that when we issued the exchange notes, (i) we received less than reasonably equivalent value or fair consideration and (ii) we either (1) were rendered insolvent, (2) were left with inadequate capital to conduct our business or (3) believed or reasonably should have believed that we would incur debts beyond our ability to pay. The court could also avoid the exchange notes, without regard to factors (i) and (ii), if it found that we issued the exchange notes with actual intent to hinder, delay or defraud our creditors.

        Similarly, if one of our guarantors becomes a debtor in a case under the United States Bankruptcy Code or encounters other financial difficulty, a court might cancel its guarantee if it finds that when such guarantor issued its guarantee (or in some jurisdictions, when payments became due under the guarantee), factors (i) and (ii) above applied to such guarantor, such guarantor was a defendant in an action for money damages or had a judgment for money damages docketed against it (if, in either case, after final judgment the judgment is unsatisfied), or if it found that such guarantor issued its guarantee with actual intent to hinder, delay or defraud its creditors.

        In addition, a court could avoid any payment by us or any guarantor pursuant to the exchange notes or a guarantee or any realization on the pledge of assets securing the exchange notes or the guarantees, and require the return of any payment or the return of any realized value to us or the guarantor, as the case may be, or to a fund for the benefit of the creditors of us or the guarantor. In addition, under the circumstances described above, a court could subordinate rather than avoid obligations under the exchange notes, the guarantees or the pledges. If the court were to avoid any guarantee, we cannot assure you that funds would be available to pay the exchange notes from another guarantor or from any other source.

        The test for determining solvency for purposes of the foregoing will vary depending on the law of the jurisdiction being applied. In general, a court would consider an entity insolvent either if the sum of its existing debts exceeds the fair value of all of its property, or its assets' present fair saleable value is less than the amount required to pay the probable liability on its existing debts as they become due. For this analysis, "debts" includes contingent and unliquidated debts.

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        The indenture governing the exchange notes limits the liability of each guarantor on its guarantee to the maximum amount that such guarantor can incur without risk that its guarantee will be subject to avoidance as a fraudulent transfer. We cannot assure you that this limitation will protect such guarantees from fraudulent transfer challenges or, if it does, that the remaining amount due and collectible under the guarantees would suffice, if necessary, to pay the exchange notes in full when due. In a recent Florida bankruptcy case, this kind of provision was found to be ineffective to protect the guarantees.

        If a court avoided our obligations under the exchange notes and the obligations of all of the guarantors under their guarantees, you would cease to be our creditor or creditor of the guarantors and likely have no source from which to recover amounts due under the exchange notes. Even if the guarantee of a guarantor is not avoided as a fraudulent transfer, a court may subordinate the guarantee to that guarantor's other debt. In that event, the guarantees would be structurally subordinated to all of that guarantor's other debt.

If we default on our obligations to pay our indebtedness, we may not be able to make payments on the exchange notes.

        Any default under the agreements governing our indebtedness, including a default under our revolving credit facility, that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness, could prevent us from paying principal, premium, if any, and interest on the exchange notes and substantially decrease the market value of the exchange notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness (including covenants in the agreement governing our revolving credit facility and the indenture governing the exchange notes), we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under our revolving credit facility could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets. An event of default and foreclosure under the revolving credit facility could result in an event of default under our other debt instruments, including the exchange notes. In that event, we may not have sufficient assets to repay all of our obligations, including the exchange notes, and we could be forced into bankruptcy or liquidation.

We are a holding company and depend upon the earnings of our subsidiaries to make payments on the exchange notes.

        We are a holding company and conduct all of our operations through our subsidiaries. All of our operating income is generated by our operating subsidiaries. We must rely on dividends and other advances and transfers of funds from our subsidiaries, and earnings from our investments in cash and marketable securities, to provide the funds necessary to meet our debt service obligations, including payment of principal and interest on the exchange notes. Although we are the sole stockholder, directly or indirectly, of each of our operating subsidiaries and therefore are able to control their respective declarations of dividends, applicable laws in the jurisdictions where these subsidiaries are organized may prevent or limit our operating subsidiaries' ability to pay such dividends. For example, the general corporate laws in the jurisdictions where our subsidiaries are organized generally prohibit a company from paying dividends unless it has sufficient earnings or retained assets. In addition, such payments may be restricted by claims against our subsidiaries by their creditors, such as suppliers, vendors, lessors, and employees, and by any applicable bankruptcy, reorganization, or similar laws applicable to our operating subsidiaries. The availability of funds, and therefore the ability of our operating subsidiaries to pay dividends or make other payments or advances to us, will depend upon their operating results.

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Sales of assets by us or the guarantors could reduce the pool of assets securing the exchange notes and the guarantees.

        The security documents relating to the exchange notes allow us and the guarantors to remain in possession of, retain exclusive control over, freely operate and collect and invest and dispose of any income from, the collateral securing the exchange notes. To the extent we sell any assets that constitute such collateral, the proceeds from such sale will be subject to the liens securing the exchange notes only to the extent such proceeds would otherwise constitute "collateral" securing the exchange notes and the subsidiary guarantees under the security documents, and will also be subject to the security interest of creditors other than the holders of the exchange notes, some of which may be senior or prior to the second-priority liens held by the holders of the exchange notes, such as the lenders under our revolving credit facility, who have a first-priority lien in such collateral. To the extent the proceeds from any such sale of collateral do not constitute "collateral" under the security documents, the pool of assets securing the exchange notes and the guarantees would be reduced and the exchange notes and the guarantees would not be secured by such proceeds.

The exchange notes will be secured only to the extent of the value of the assets having been granted as security for the exchange notes, which may not be sufficient to satisfy our obligations under the exchange notes.

        No appraisals of any of the collateral have been prepared by us or on behalf of us in connection with this offering. The fair market value of the collateral is subject to fluctuations based on factors that include, among others, our ability to implement our business strategy, the ability to sell the collateral in an orderly sale, general economic conditions, the availability of buyers and similar factors. In addition, courts could limit recovery if they deem a portion of the interest claim usurious in violation of public policy. The amount to be received upon the sale of any collateral would be dependent on numerous factors, including the actual fair market value of the collateral at such time, general market and economic conditions and the timing and the manner of the sale.

        To the extent that the claims of the holders of the exchange notes exceed the value of the assets securing those exchange notes and other liabilities, those claims will rank equally with the claims of the holders of any outstanding unsecured indebtedness. As a result, if the value of the assets pledged as security for the exchange notes and other liabilities is less than the value of the claims of the holders of the exchange notes and other liabilities, those claims may not be satisfied in full before the claims of our unsecured creditors are paid.

The rights of holders of the exchange notes with respect to the collateral are substantially limited by the terms of the intercreditor agreement.

        Under the terms of the intercreditor agreement, which was entered into between the collateral agent for the exchange notes and the agent under our revolving credit facility, at any time that obligations that have the benefit of the first-priority liens on the collateral securing the exchange notes are outstanding, any action that may be taken by the collateral agent with respect to the collateral securing the exchange notes, including the ability to cause the commencement of enforcement proceedings against the collateral and to control the conduct of such proceedings, is significantly restricted. Under the terms of the intercreditor agreement, the collateral agent for the exchange notes may exercise rights and remedies with respect to the collateral only after the passage of a period of 135 days from the first date on which it has notified the agent under our revolving credit facility that an event of default has occurred and the repayment of all the principal amount under the exchange notes has been demanded. After the passage of the 135-day period, the collateral agent for the exchange notes will only be permitted to exercise remedies to the extent that the agent or a secured party under our revolving credit facility is not diligently pursuing the exercise of its rights and remedies with respect to a material portion of the collateral. The intercreditor agreement provides that, at any time that obligations that have the benefit of the first-priority liens on the collateral are outstanding,

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the collateral agent for the exchange notes may not assert any right of marshalling that may be available under applicable law with respect to the collateral. Without this waiver of the right of marshalling, holders of indebtedness secured by first-priority liens in the collateral would likely be required to liquidate collateral on which the exchange notes did not have a lien, if any, prior to liquidating the collateral securing the exchange notes, thereby maximizing the proceeds of the collateral that would be available to repay obligations under the exchange notes. As a result of this waiver, the proceeds of sales of the collateral securing the exchange notes could be applied to repay any indebtedness secured by first-priority liens in such collateral before applying proceeds of other collateral securing indebtedness, and the holders of exchange notes may recover less than they would have if such proceeds were applied in the order most favorable to the holders of the exchange notes.

We may not be able to satisfy our obligations to holders of the exchange notes upon a change of control or sale of assets.

        Upon the occurrence of a change of control, as defined in the indenture governing the exchange notes, we will be required to offer to purchase the exchange notes at a price equal to 101% of the principal amount of such exchange notes, together with any accrued and unpaid interest, to the date of purchase. Any such offer to purchase will comply with any applicable regulations under federal securities laws, including Exchange Act Rule 14e-1. See "Description of Exchange Notes—Repurchase at the Option of Holders—Change of Control."

        Upon the occurrence of certain asset sales, as defined in the indenture governing the exchange notes, we may be required to offer to purchase the exchange notes at a price equal to 100% of the principal amount of such exchange notes, together with any accrued and unpaid interest, to the date of purchase. See "Description of Exchange Notes—Repurchase at the Option of Holders—Asset Sales."

        If we are required to purchase exchange notes pursuant to a change of control offer or asset sale offer, we may not have available funds sufficient to pay the change of control purchase price or asset sale purchase price for any or all of the exchange notes that might be delivered by holders of the exchange notes seeking to accept the change of control offer or asset sale offer. In such event, we would be required to seek third-party financing to the extent we do not have available funds to meet our purchase obligations. We may not be able to obtain such financing on acceptable terms to us or at all. Accordingly, none of the holders of the exchange notes may receive the change of control purchase price or asset sale purchase price for their exchange notes. Our failure to make or consummate the change of control offer or asset sale offer, or to pay the change of control purchase price or asset sale purchase price when due, would constitute an event of default under the indenture governing the exchange notes.

        In addition, the terms of the agreement governing the revolving credit facility may restrict or prohibit us from making a change of control offer or asset sale offer. Moreover, the events that constitute a change of control or asset sale under the indenture may also constitute events of default under our revolving credit facility. These events may permit the lenders under our revolving credit facility to accelerate the debt outstanding thereunder and, if such debt is not paid, to enforce security interests in our specified assets, thereby limiting our ability to raise cash to purchase the exchange notes and reducing the practical benefit of the offer-to-purchase provisions to the holders of the exchange notes.

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There are circumstances other than repayment or discharge of the exchange notes under which the collateral securing the exchange notes and the subsidiary guarantees will be released automatically, without your consent or the consent of the collateral agent for the exchange notes, and you may not realize any payment upon disposition of such collateral.

        Subject to certain exceptions, in the event of any release permitted or consented to under our revolving credit facility, the liens on the collateral securing the exchange notes will be automatically released. See "Description of Exchange Notes—Collateral—Intercreditor Agreement." In addition, upon certain sales of the assets that comprise the collateral, we may be required to repay amounts outstanding under our revolving credit facility prior to repayment of any other indebtedness, including the exchange notes, with the proceeds of such collateral disposition.

Rights of holders of the exchange notes in the collateral may be adversely affected by bankruptcy proceedings.

        The right of the collateral agent for the exchange notes to repossess and dispose of the collateral securing the exchange notes and the guarantees upon acceleration is likely to be significantly impaired by federal bankruptcy law if bankruptcy proceedings are commenced by or against us or our restricted subsidiaries that provide security for the exchange notes or guarantees prior to, or possibly even after, the collateral agent has repossessed and disposed of the collateral. Under the U.S. Bankruptcy Code, a secured creditor, such as the collateral agent for the exchange notes, is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from a debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use collateral, and the proceeds, products, rents or profits of the collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral and may include cash payments or the granting of additional security, if and at such time as the court in its discretion determines, for any diminution in the value of the collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the exchange notes or any guarantees could be delayed following commencement of a bankruptcy case, whether or when the collateral agent would repossess or dispose of the collateral, or whether or to what extent holders of the exchange notes would be compensated for any delay in payment or loss of value of the collateral through the requirements of "adequate protection." Furthermore, in the event the bankruptcy court determines that the value of the collateral is not sufficient to repay all amounts due on the exchange notes, the holders of the exchange notes would have "undersecured claims" as to the difference. Federal bankruptcy laws do not permit the payment or accrual of interest, costs and attorneys' fees for "undersecured claims" during the debtor's bankruptcy case.

In the event of our bankruptcy, holders of the exchange notes may be deemed to have an unsecured claim to the extent that our obligations in respect of the exchange notes exceed the fair market value of the collateral securing the exchange notes.

        In any bankruptcy proceeding with respect to us or any of the guarantors, it is possible that the bankruptcy trustee, the debtor-in-possession or competing creditors will assert that the fair market value of the collateral with respect to the exchange notes on the date of the bankruptcy filing was less than the then current principal amount of the exchange notes. Upon a finding by the bankruptcy court that the exchange notes are under-collateralized, the claims in the bankruptcy proceeding with respect to the exchange notes would be bifurcated between a secured claim and an unsecured claim, and the unsecured claim would not be entitled to the benefits of security in the collateral. In such event, the secured claims of the holders of the exchange notes would be limited to the value of the collateral.

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        Other consequences of a finding of under-collateralization would be, among other things, a lack of entitlement on the part of the holders of the exchange notes to receive post-petition interest and a lack of entitlement on the part of the unsecured portion of the exchange notes to receive other "adequate protection" under federal bankruptcy laws. In addition, if any payments of post-petition interest had been made at the time of such a finding of under-collateralization, those payments could be recharacterized by the bankruptcy court as a reduction of the principal amount of the secured claim with respect to the exchange notes.

Any future pledge of collateral might be avoidable by a trustee in bankruptcy.

        Any future pledge of, or security interest or lien granted on, collateral in favor of the collateral agent might be avoidable by the pledgor (as debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if the pledgor is insolvent at the time of the pledge, the pledge permits the holders of the exchange notes to receive a greater recovery than if the pledge had not been given and/or there is a pending bankruptcy proceeding in respect of the pledgor.

Rights of holders of the exchange notes in the collateral may be adversely affected by the failure to perfect security interests in certain collateral acquired in the future.

        The collateral securing the exchange notes and the guarantees includes substantially all of our and the guarantors' tangible and intangible assets that secure our indebtedness under our revolving credit facility, whether now owned or acquired or arising in the future. If additional subsidiaries are formed or acquired that are required to guarantee the exchange notes pursuant to the terms of the indenture, additional financing statements would be required to be filed to perfect the security interest in the assets of such subsidiaries. Depending on the type of the assets constituting after-acquired collateral, additional action may be required to be taken by the collateral agent for the exchange notes, or the collateral agent for our revolving credit facility, to perfect the security interest in such assets, such as the delivery of physical collateral, the execution of account control agreements or the execution and recordation of mortgages or deeds of trust. Applicable law requires that certain property and rights acquired after the grant of a general security interest can only be perfected at the time such property and rights are acquired and identified. There can be no assurance that the trustee or the collateral agent will monitor, or that we will inform the trustee or the collateral agent of, the future acquisition of property and rights that constitute collateral, and that the necessary action will be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent for the exchange notes and the collateral agent for our revolving credit facility have no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interests therein. Such failure may result in the loss of the security interest therein or the priority of the security interest in favor of the exchange notes and the guarantees against third parties.

The collateral is subject to casualty risks.

        We maintain insurance or otherwise insure against hazards in a manner that we believe is appropriate and customary for our business. There are, however, certain losses that may be either uninsurable or not economically insurable, in whole or in part. Insurance proceeds may not compensate us fully for our losses. If there is a complete or partial loss of any of the pledged collateral, the insurance proceeds may not be sufficient to satisfy all of the secured obligations, including the exchange notes and the subsidiary guarantees.

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There is no established trading market for the exchange notes, and you may not be able to sell them quickly or at the price that you paid.

        The exchange notes are a new issue of securities. There is no active public trading market for the exchange notes. We do not intend to apply for listing of the exchange notes on a security exchange or to arrange for quotation on any automated dealer quotation system. The initial purchaser has advised us that it intends to make a market in the exchange notes, but the initial purchaser is not obligated to do so. The initial purchaser may discontinue any market making in the exchange notes at any time, in its sole discretion. As a result, we cannot assure you as to the liquidity of any trading market for the exchange notes.

        We also cannot assure you that you will be able to sell your exchange notes at a particular time or that the prices that you receive when you sell will be favorable. Future trading prices of the exchange notes will depend on many factors, including:

    our operating performance and financial condition;

    the interest of securities dealers in making a market; and

    the market for similar securities.

        Historically, the market for non-investment grade debt has been subject to disruptions that have caused volatility in prices. It is possible that the market for the exchange notes will be subject to disruptions. Any disruptions may have a negative effect on holders of the exchange notes, regardless of our prospects and financial performance.

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USE OF PROCEEDS

        We will not receive any proceeds from the exchange offer. Because we are exchanging the exchange notes for the private notes, which have substantially identical terms, the issuance of the exchange notes will not result in any increase in our indebtedness. The exchange offer is intended to satisfy our obligations under the Registration Rights Agreement.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2010. This table should be read in conjunction with "Summary Consolidated and Other Financial Data," "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Use of Proceeds," "Description of Certain Indebtedness" and our historical consolidated financial statements, including the related notes, appearing elsewhere in this prospectus.

 
  As of
September 30, 2010
 
 
  (unaudited)
 
 
  (in thousands)
 

Cash and cash equivalents

  $ 17,666  
       

Debt:

       
 

Revolving credit facility(1)

     
 

Senior secured notes due 2017 (net of $3,522 discount)

    206,478  
 

Note payable

    197  
 

Capital leases

    5,515  
       

Total debt

    212,190  
       

Total stockholders' equity

    66,198  
       

Total capitalization

  $ 278,388  
       

(1)
On May 13, 2010, our wholly-owned subsidiary, Oncure Medical entered into a revolving credit facility that provides for borrowing capacity in an initial amount of up to $40.0 million of revolving credit borrowings, which may be increased pursuant to the terms of the indenture governing the notes and the agreement governing the revolving credit facility. As of the date of this filing, the revolving credit facility was undrawn. See "Description of Certain Indebtedness".

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THE EXCHANGE OFFER

Purpose of the Exchange Offer

        Simultaneously with the issuance and sale of the private notes on May 13, 2010, we and the guarantors entered into a Registration Rights Agreement with the initial purchaser of the private notes. Under the Registration Rights Agreement, we, among other things, are required to:

    file one or more registration statements no later than 270 days after the closing of the offering of the private notes, enabling holders of the private notes to exchange their unregistered notes for registered, publicly tradable notes with substantially identical terms;

    cause the registration statement to become effective within 330 days after the closing of the offering of the private notes;

    consummate the exchange offer within 30 business days after the registration statement is required to be declared effective; and

    file a shelf registration statement for the resale of the private notes if we cannot effect the exchange offer within the time periods listed above.

        We are conducting the exchange offer to satisfy these obligations under the Registration Rights Agreement.

        Under some circumstances, we may be required to file and use our commercially reasonable efforts to cause to be declared effective by the SEC, in addition to or in lieu of the exchange offer registration statement, a shelf registration statement covering resales of the private notes. If we fail to meet specified deadlines under the Registration Rights Agreement, then we will be obligated to pay liquidated damages to holders of the private notes in the amount of a 0.25% per annum increase in the annual interest rate borne by the notes for the first 90-day period following such failure (which interest rate will increase by 0.25% per annum with respect to each subsequent 90-day period, up to a maximum additional rate of 1.0% per annum) until such failure is cured. See "Description of Exchange Notes—Registration Rights." A copy of the Registration Rights Agreement has been filed as an exhibit to the registration statement of which this prospectus is a part, and the summary of the material provisions of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the complete Registration Rights Agreement.

Terms of the Exchange Offer

        We are offering to exchange an aggregate principal amount of up to $210.0 million of exchange notes and guarantees thereof for a like aggregate principal amount of private notes and guarantees thereof. The form and the terms of the exchange notes are identical in all material respects to the form and the terms of the private notes except that the exchange notes will have been registered under the Securities Act and will not be subject to restrictions on transfer under the Securities Act.

        The exchange notes evidence the same debt as the private notes exchanged for the exchange notes and will be entitled to the benefits of the same indenture under which the private notes were issued, which is governed by New York law. For a complete description of the terms of the exchange notes, see "Description of Exchange Notes." We will not receive any cash proceeds from the exchange offer.

        The exchange offer is not extended to holders of private notes in any jurisdiction where the exchange offer would not comply with the securities or blue sky laws of that jurisdiction.

        As of the date of this prospectus, $210.0 million aggregate principal amount of private notes is outstanding and registered in the name of Cede & Co., as nominee for DTC. Only registered holders of the private notes, or their legal representatives and attorneys-in-fact, as reflected on the records of the trustee under the indenture, may participate in the exchange offer. We will not set a fixed record

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date for determining registered holders of the private notes entitled to participate in the exchange offer. This prospectus, together with the letter of transmittal, is being sent to all registered holders of private notes and to others believed to have beneficial interests in the private notes.

        Upon the terms and subject to the conditions described in this prospectus and in the accompanying letter of transmittal, we will accept for exchange private notes which are properly tendered on or before the expiration date and not withdrawn as permitted below. As used in this section of the prospectus entitled, "The Exchange Offer," the term "expiration date" means 5:00 p.m., New York City time, on                        , 2011. If, however, we, in our sole discretion, extend the period of time for which the exchange offer is open, the term "expiration date" means the latest time and date to which the exchange offer is so extended. Private notes tendered in the exchange offer must be in denominations of the principal amount of $2,000 and any integral multiple of $1,000 in excess thereof.

        If you do not tender your private notes or if you tender private notes that are not accepted for exchange, your private notes will remain outstanding and continue to accrue interest absent any rights under the Registration Rights Agreement. Existing transfer restrictions would continue to apply to private notes that remain outstanding. See "—Consequences of Failure to Exchange Private Notes" and "Risk Factors—If you do not properly tender your private notes, you will continue to hold unregistered private notes and your ability to transfer those private notes will be restricted." for more information regarding private notes outstanding after the exchange offer. Holders of the private notes do not have any appraisal or dissenters' rights in connection with the exchange offer.

        Neither we, our board of directors or our management, nor the guarantors, their respective boards of directors or their management, nor the exchange agent nor the trustee for the private and exchange notes recommends that you tender or not tender private notes in the exchange offer or has authorized anyone to make any recommendation. You must decide whether to tender private notes in the exchange offer and, if you decide to tender, the aggregate amount of private notes to tender. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated under the Exchange Act.

        We have the right, in our reasonable discretion and in accordance with applicable law, at any time:

    to extend the expiration date;

    to delay the acceptance of any private notes or to terminate the exchange offer and not accept any private notes for exchange if we determine that any of the conditions to the exchange offer described below under "—Conditions to the Exchange Offer" have not occurred or have not been satisfied; and

    to amend the terms of the exchange offer in any manner.

        During an extension, all private notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us.

        We will give oral (promptly confirmed in writing) or written notice of any extension, delay, non-acceptance, termination or amendment to the exchange agent as promptly as practicable and make a public announcement of the extension, delay, non-acceptance, termination or amendment. In the case of an extension, the announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

        If we amend the exchange offer in a manner that we consider material, we will as promptly as practicable distribute to the holders of the private notes a prospectus supplement or, if appropriate, an updated prospectus from a post-effective amendment to the registration statement of which this prospectus is a part disclosing the change and extending the exchange offer for a period of five to ten business days, depending upon the significance of the amendment of the exchange offer and the

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manner of disclosure to the registered holders, if the exchange offer would otherwise expire during the five to ten business day period.

Procedures for Tendering Private Notes

Valid Tender

        Only a holder of private notes may tender private notes in the exchange offer. Your tender, if not withdrawn prior to 5:00 p.m., New York City time, on the expiration date and if accepted by us, will constitute a binding agreement between us and you upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal.

        Except as described below under "—Guaranteed Delivery," if you wish to tender your private notes for exchange, you must, on or prior to the close of business on the expiration date:

    transmit a properly completed and duly executed letter of transmittal, together with all other documents required by the letter of transmittal, to the exchange agent at the address provided below under "—Exchange Agent"; or

    if private notes are tendered in accordance with the book-entry procedures described below under "—Book-Entry Transfers," arrange with DTC to cause an agent's message to be transmitted to the exchange agent at the address provided below under "—Exchange Agent."

        The term "agent's message" means a message transmitted to the exchange agent by DTC which states that DTC has received an express acknowledgment that the tendering holder agrees to be bound by the letter of transmittal and that we and the guarantors may enforce the letter of transmittal against that holder.

        In addition, on or prior to the expiration date:

    the exchange agent must receive the certificates for the private notes being tendered;

    the exchange agent must receive a confirmation, referred to as a "book-entry confirmation," of the book-entry transfer of the private notes being tendered into the exchange agent's account at DTC, and the book-entry confirmation must include an agent's message; or

    you must comply with the guaranteed delivery procedures described below under "—Guaranteed Delivery."

        If you beneficially own private notes and those notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian and you wish to tender your private notes in the exchange offer, you should contact the registered holder as soon as possible and instruct it to tender the private notes on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal.

        The method of delivery of the certificates for the private notes, the letter of transmittal and all other required documents is at your election and risk. If delivery is by mail, we recommend registered mail with return receipt requested, properly insured, or overnight delivery service. In all cases, you should allow sufficient time to assure delivery to the exchange agent on or before the expiration date. Delivery is complete when the exchange agent actually receives the items to be delivered. Delivery of documents to DTC in accordance with DTC's procedures does not constitute delivery to the exchange agent. Do not send letters of transmittal or private notes to us or any guarantor.

        We will not accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a letter of transmittal or by causing the transmission of an agent's message, waives any right to receive any notice of the acceptance of such tender.

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Signature Guarantees

        Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an "Eligible Guarantor Institution" within the meaning of Rule 17Ad-15 under the Exchange Act unless the private notes surrendered for exchange are tendered:

    by a registered holder of private notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal; or

    for the account of an eligible institution.

        An "eligible institution" is a firm or other entity which is identified as an "Eligible Guarantor Institution" in Rule 17Ad-15 under the Exchange Act, including:

    a bank;

    a broker, dealer, municipal securities broker or dealer or government securities broker or dealer;

    a credit union;

    a national securities exchange, registered securities association or clearing agency; or

    a savings association.

        If signatures on a letter of transmittal or notice of withdrawal are required to be guaranteed, the guarantor must be an eligible institution.

        If private notes are registered in the name of a person other than the signer of the letter of transmittal, the private notes surrendered for exchange must be endorsed or accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by us and the guarantors in our sole discretion, duly executed by the registered holder with the holder's signature guaranteed by an eligible institution, and must also be accompanied by such opinions of counsel, certifications and other information as we and the guarantors or the trustee under the indenture for the private notes may require in accordance with the restrictions on transfer applicable to the private notes.

Book-Entry Transfers

        For tenders by book-entry transfer of private notes cleared through DTC, the exchange agent will make a request to establish an account at DTC for purposes of the exchange offer. Any financial institution that is a DTC participant may make book-entry delivery of private notes by causing DTC to transfer the private notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC may use the Automated Tender Offer Program, or ATOP, procedures to tender private notes. Accordingly, any participant in DTC may make book-entry delivery of private notes by causing DTC to transfer those private notes into the exchange agent's account at DTC in accordance with DTC's ATOP procedures.

        Notwithstanding the ability of holders of private notes to effect delivery of private notes through book-entry transfer at DTC, either:

    the letter of transmittal or an agent's message in lieu of the letter of transmittal, with any required signature guarantees and any other required documents, such as endorsements, bond powers, opinions of counsel, certifications and powers of attorney, if applicable, must be transmitted to and received by the exchange agent on or prior to the expiration date at the address given below under "—Exchange Agent"; or

    the guaranteed delivery procedures described below must be complied with.

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Guaranteed Delivery

        If you elect to tender your private notes and (i) your private notes are not immediately available or (ii) you cannot deliver the private notes, the letter of transmittal or other required documents to the exchange agent on or prior the expiration date, you must tender your private notes according to the guaranteed delivery procedures set forth in the prospectus. You may have such tender effected if:

    the tender is made by or through an eligible institution;

    prior to 5:00 p.m., New York City time, on the expiration date, the exchange agent has received from such eligible institution a properly completed and duly executed Notice of Guaranteed Delivery, setting forth the name and address of the holder, the certificate number(s) of such private notes and the principal amount of private notes tendered for exchange, stating that tender is being made thereby and guaranteeing that, within three NASDAQ trading days after the date of execution of the Notice of Guaranteed Delivery, the letter of transmittal (or facsimile thereof), together with the certificate(s) representing such private notes (or a book entry confirmation and an Agent's message), in proper form for transfer, and any other documents required by the letter of transmittal, will be deposited by such eligible institution with the Exchange Agent; and

    a properly executed letter of transmittal (or facsimile thereof), as well as the certificate(s) for all tendered private notes in proper form for transfer or a book-entry confirmation and an Agent's message, together with any other documents required by the letter of transmittal, are received by the Exchange Agent within three NASDAQ trading days after the date of execution of the Notice of Guaranteed Delivery.

Determination of Validity

        We, in our sole discretion, will resolve all questions regarding the form of documents, validity, eligibility, including time of receipt, and acceptance for exchange of any tendered private notes. The determination of these questions by us, as well as our interpretation of the terms and conditions of the exchange offer, including the letter of transmittal, will be final and binding on all parties. A tender of private notes is invalid until all defects and irregularities have been cured or waived. Holders must cure any defects and irregularities in connection with tenders of private notes for exchange within such reasonable period of time as we and the guarantors will determine, unless they waive the defects or irregularities. None of us, any of our respective affiliates or assigns, the exchange agent or any other person is under any obligation to give notice of any defects or irregularities in tenders, nor will any of them be liable for failing to give any such notice.

        We reserve the absolute right, in our sole and absolute discretion:

    to reject any tenders determined to be in improper form or unlawful;

    to waive any of the conditions of the exchange offer; and

    to waive any condition or irregularity in the tender of private notes by any holder, whether or not we waive similar conditions or irregularities in the case of other holders.

        If any letter of transmittal, certificate, endorsement, bond power, power of attorney, or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person must indicate such capacity when signing. In addition, unless waived by us, the person must submit proper evidence satisfactory to us, in our sole discretion, of the person's authority to so act.

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Acceptance of Private Notes for Exchange; Delivery of Exchange Notes

        Upon satisfaction or waiver of all of the conditions to the exchange offer, we will, promptly after the expiration date, accept all private notes properly tendered and issue exchange notes registered under the Securities Act. See "—Conditions to the Exchange Offer" for a discussion of the conditions that must be satisfied or waived before private notes are accepted for exchange. The exchange agent might not deliver the exchange notes to all tendering holders at the same time. The timing of delivery depends upon when the exchange agent receives and processes the required documents.

        For purposes of the exchange offer, we will be deemed to have accepted properly tendered private notes for exchange when we give oral or written notice to the exchange agent of acceptance of the tendered private notes, with written confirmation of any oral notice to be given promptly thereafter. The exchange agent is our agent for receiving tenders of private notes, letters of transmittal and related documents.

        For each private note accepted for exchange, the holder will receive an exchange note registered under the Securities Act having a principal amount equal to, and in the denomination of, that of the surrendered private note. Accordingly, registered holders of exchange notes issued in the exchange offer on the relevant record date for the first interest payment date following the consummation of the exchange offer will receive interest accruing from the most recent date to which interest has been paid on the private notes. Private notes accepted for exchange will cease to accrue interest from and after the date of consummation of the exchange offer.

        In all cases, we will issue exchange notes in the exchange offer for private notes that are accepted for exchange only after the exchange agent timely receives:

    certificates for those private notes or a timely book-entry confirmation of the transfer of those private notes into the exchange agent's account at DTC;

    a properly completed and duly executed letter of transmittal or an agent's message; and

    all other required documents, such as endorsements, bond powers, opinions of counsel, certifications and powers of attorney, if applicable.

        If for any reason under the terms and conditions of the exchange offer we do not accept any tendered private notes, or if a holder submits private notes for a greater principal amount than the holder desires to exchange, we will return the unaccepted or non-exchanged private notes without cost to the tendering holder promptly after the expiration or termination of the exchange offer. In the case of private notes tendered by book-entry transfer through DTC, any unexchanged private notes will be credited to an account maintained with DTC.

Resales of Exchange Notes

        Based on interpretive letters issued by the SEC staff to other, unrelated issuers in transactions similar to the exchange offer, we believe that a holder of exchange notes, other than a broker-dealer, may offer exchange notes (together with the guarantees thereof) for resale, resell and otherwise transfer the exchange notes (and the related guarantees) without delivering a prospectus to prospective purchasers, if the holder acquired the exchange notes in the ordinary course of business, has no intention of engaging in a "distribution," as defined under the Securities Act, of the exchange notes and is not an "affiliate," as defined under the Securities Act, of ours or any guarantor. We will not seek our own interpretive letter. As a result, we cannot assure you that the SEC staff would take the same position with respect to this exchange offer as it did in interpretive letters to other parties in similar transactions.

        If the holder is an affiliate of ours or any guarantor or is engaged in, or intends to engage in, or has an arrangement or understanding with any person to participate in, a distribution of the exchange

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notes, that holder or other person may not rely on the applicable interpretations of the staff of the SEC and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

        By tendering private notes, you will represent to us and the guarantors that, among other things:

    you are not an "affiliate," as defined under Rule 405 under the Securities Act, of us or any guarantor;

    you are acquiring the exchange notes in your ordinary course of business;

    you are not engaged in, do not intend to engage in and have no arrangement or understanding with any person to participate in a distribution of the exchange notes within the meaning of the Securities Act; and

    you are not acting on behalf of any person who could not truthfully make the foregoing representations.

        Any broker-dealer that holds private notes acquired for its own account as a result of market-making activities or other trading activities (other than private notes acquired directly from us) may exchange those private notes pursuant to the exchange offer; however, such broker-dealer may be deemed to be an "underwriter" within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the exchange notes received by such broker-dealer in the exchange offer. To date, the SEC has taken the position that broker-dealers may use a prospectus such as this one to fulfill their prospectus delivery requirements with respect to resales of exchange notes received in an exchange such as the exchange pursuant to the exchange offer, if the private notes for which the exchange notes were received in the exchange were acquired for their own accounts as a result of market-making or other trading activities. Any profit on these resales of exchange notes and any commissions or concessions received by a broker-dealer in connection with these resales may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not admit that it is an "underwriter" within the meaning of the Securities Act. See "Plan of Distribution and Selling Restrictions" for a discussion of the exchange and resale obligations of broker-dealers in connection with the exchange offer and the exchange notes.

Withdrawal Rights

        You can withdraw tenders of private notes at any time prior to the expiration date. For a withdrawal to be effective, you must deliver a written notice of withdrawal to the exchange agent or comply with the appropriate procedures of ATOP. Any notice of withdrawal must:

    specify the name of the person that tendered the private notes to be withdrawn;

    identify the private notes to be withdrawn, including the principal amount of such private notes;

    include a signed statement that you are withdrawing your election to have your securities exchanged; and

    where certificates for private notes are transmitted, include the name of the registered holder of the private notes if different from the person withdrawing the private notes.

        If you delivered or otherwise identified certificated private notes to the exchange agent, you must submit the serial numbers of the private notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an eligible institution, except in the case of private notes tendered for the account of an eligible institution. See "The Exchange Offer—Procedures for Tendering Private Notes—Signature Guarantees" for further information on the requirements for guarantees of signatures on notices of withdrawal. If you tendered private notes in accordance with applicable book-entry

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transfer procedures, the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn private notes and you must deliver the notice of withdrawal to the exchange agent. You may not rescind withdrawals of tender; however, private notes properly withdrawn may again be tendered at any time on or prior to the expiration date in accordance with the procedures described under "The Exchange Offer—Procedures for Tendering Private Notes."

        We will determine, in our sole discretion, all questions regarding the validity, form and eligibility, including time of receipt, of notices of withdrawal. Their determination of these questions as well as their interpretation of the terms and conditions of the exchange offer (including the letter of transmittal) will be final and binding on all parties. None of we, any of our respective affiliates or assigns, the exchange agent or any other person is under any obligation to give notice of any irregularities in any notice of withdrawal, nor will any of them be liable for failing to give any such notice.

        Withdrawn private notes will be returned to the holder as promptly as practicable after withdrawal without cost to the holder. In the case of private notes tendered by book-entry transfer through DTC, the private notes withdrawn will be credited to an account maintained with DTC.

Conditions to the Exchange Offer

        Notwithstanding any other provision of the exchange offer, we are not required to accept for exchange, or to issue exchange notes in exchange for, any private notes, and we may terminate or amend the exchange offer if, at any time prior to the expiration date, we determine that the exchange offer violates applicable law, any applicable interpretation of the staff of the SEC or any order of any governmental agency or court of competent jurisdiction.

        The foregoing conditions are for our sole benefit, and we may assert them regardless of the circumstances giving rise to any such condition, or we may waive the conditions, completely or partially, whenever or as many times as we choose, in our sole discretion. The foregoing rights are not deemed waived because we fail to exercise them, but continue in effect, and we may still assert them whenever or as many times as we choose. If we determine that a waiver of conditions materially changes the exchange offer, the prospectus will be amended or supplemented, and the exchange offer extended, if appropriate, as described under "—Terms of the Exchange Offer."

        In addition, at a time when any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or with respect to the qualification of the indenture under the Trust Indenture Act of 1939, as amended, we will not accept for exchange any private notes tendered, and no exchange notes will be issued in exchange for any such private notes.

        If we are not permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law, any applicable interpretation of the staff of the SEC or any order of any governmental agency or court of competent jurisdiction, the Registration Rights Agreement requires that we file a shelf registration statement to cover resales of the private notes by the holders thereof who satisfy specified conditions relating to the provision of information in connection with the shelf registration statement. See "Description of Exchange Notes—Registration Rights."

Exchange Agent

        We have appointed Wilmington Trust FSB as exchange agent for the exchange offer. You should direct questions and requests for assistance with respect to exchange offer procedures, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent. Holders of private notes seeking to (1) tender private notes in the exchange offer should send certificates for private notes, letters of transmittal and any other required documents and/or (2) withdraw such tendered private notes should send such required

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documentation (in accordance with the procedures described under "The Exchange Offer—Withdrawal Rights") to the exchange agent by hand-delivery, registered or certified first-class mail (return receipt requested), telecopier or any courier guaranteeing overnight delivery, as follows:

 
   
By Mail, Hand or Overnight Delivery:   By Facsimile:

Wilmington Trust FSB
c/o Wilmington Trust Company
Corporate Capital Markets
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-1626

 

(302) 636-4139
For Information or Confirmation by
Telephone:
Sam Hamed
(302) 636-6181

        If you deliver the letter of transmittal or any other required documents to an address or facsimile number other than as indicated above, your tender of private notes will be invalid.

Fees and Expenses

        The Registration Rights Agreement provides that we will bear all expenses in connection with the performance of our obligations relating to the registration of the exchange notes and the conduct of the exchange offer. These expenses include registration and filing fees, fees and disbursements of the trustee under the indenture, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related documents to their clients that are holders of private notes and for handling or tendering for those clients.

        We have not retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of private notes pursuant to the exchange offer.

Transfer Taxes

        Holders who tender their private notes for exchange will not be obligated to pay any transfer taxes in connection with the exchange. If, however, exchange notes issued in the exchange offer are to be delivered to, or are to be issued in the name of, any person other than the holder of the private notes tendered, or if a transfer tax is imposed for any reason other than the exchange of private notes in connection with the exchange offer, then any such transfer taxes, whether imposed on the registered holder or on any other person, will be payable by the holder or such other person. If satisfactory evidence of payment of, or exemption from, such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to the tendering holder.

Accounting Treatment

        The exchange notes will be recorded at the same carrying value as the private notes. Accordingly, we will not recognize any gain or loss for accounting purposes. We intend to record the expenses of this exchange offer as incurred and those associated with the issuance of the private notes over the term of the exchange notes.

Consequences of Failure to Exchange Private Notes

        You do not have any appraisal or dissenters' rights in the exchange offer. Private notes that are not tendered or are tendered but not accepted will, following the consummation of the exchange offer,

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remain outstanding and continue to be subject to the provisions in the indenture regarding the transfer and exchange of the private notes and the existing restrictions on transfer set forth in the legends on the private notes. In general, the private notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Following the consummation of the exchange offer, except in limited circumstances with respect to specific types of holders of private notes, we and the guarantors will have no further obligation to provide for the registration under the Securities Act of the private notes. See "Description of Exchange Notes—Registration Rights." We do not currently anticipate that we will take any action following the consummation of the exchange offer to register the private notes under the Securities Act or under any state securities laws.

        The exchange notes and any private notes which remain outstanding after consummation of the exchange offer will vote together for all purposes as a single class under the indenture.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following selected consolidated financial data as of the end of and for each of the five years in the period ended December 31, 2009 is derived from our audited consolidated financial statements as of such dates and for such years, which, in the case of the audited consolidated financial statements as of December 31, 2008 and 2009 and for the years ended December 31, 2007, 2008 and 2009 are included elsewhere in this prospectus. The following selected consolidated financial and other data as of September 30, 2009 and 2010 and for each of the nine months ended September 30, 2009 and 2010 are derived from our unaudited consolidated financial statements as of such date and for such periods, which are included elsewhere in this prospectus. In the opinion of management, the unaudited consolidated financial information includes all adjustments considered necessary for a fair presentation of this information. The selected financial information for the nine months ended September 30, 2010 is not necessarily indicative of the results of operations that can be expected for the year ended December 31, 2010 or for any other interim period. You should read the selected historical consolidated financial data together with "Non-GAAP Financial Measures," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical consolidated financial statements, including the related notes, included elsewhere in this prospectus.

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  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2009   2010   2005(1)   2006(2)   2006(3)   2007   2008   2009  
 
  (unaudited)
   
   
   
   
   
   
 
 
   
   
  (in thousands)
 

Statement of Operations Data:

                                                 

Net revenue

  $ 81,766   $ 74,152   $ 40,262   $ 42,307   $ 27,168   $ 85,718   $ 108,684   $ 106,757  

Cost of operations:

                                                 
 

Salaries and benefits

    27,318     26,582     16,704     10,466     33,533     37,933     35,738        
 

Depreciation and amortization

    14,118     13,830     4,408     5,086     15,662     18,110     18,718        
 

General and administrative expenses

    23,742     27,753     13,705     23,170     13,903     29,134     39,696     32,138  
                                   

Total operating expenses

    65,178     68,165     31,718     44,282     29,455     78,329     95,739     86,594  
                                   

Income (loss) from operations

    16,588     5,987     8,544     (1,975 )   (2,287 )   7,389     12,945     20,163  

Other income (expense):

                                                 
 

Interest expense

    (12,647 )   (16,206 )   (5,032 )   (6,271 )   (6,229 )   (17,486 )   (18,258 )   (16,726 )
 

Debt extinguishment cost

        (2,932 )                        
 

Loss on interest rate swap

    (746 )   (267 )           (311 )   (1,860 )   (3,372 )   (916 )
 

Equity interest in net earnings of joint venture

    616     382                 959     1,144     738  
 

Interest and other (expense) income, net

    (240 )   (322 )   (1,751 )   (636 )   (373 )   (52 )   200     (250 )
                                   

Total other expense

    (13,017 )   (19,345 )   (6,783 )   (6,907 )   (6,913 )   (18,439 )   (20,286 )   (17,154 )
                                   

Income (loss) from continuing operations before income taxes

    3,571     (13,358 )   1,761     (8,882 )   (9,200 )   (11,050 )   (7,341 )   3,009  
                                   

Income tax (expense) benefit

    (1,963 )   4,880     78     60     1,573     3,920     2,990     (1,654 )
                                   

Income (loss) from continuing operations

    1,608     (8,478 )   1,839     (8,822 )   (7,627 )   (7,130 )   (4,351 )   1,355  

Discontinued operations, net of tax:

                                                 
 

Impairment loss resulting from discontinued operations

                            (4,065 )    
 

Income from discontinued operations

            133     108     20     155     29      
                                   

Net income (loss)

  $ 1,608   $ (8,478 ) $ 1,972   $ (8,714 ) $ (7,607 ) $ (6,975 ) $ (8,387 ) $ 1,355  
                                   

Statement of Cash Flows Data:

                                                 

Cash flows provided by (used in):

                                                 
 

Operating activities

    12,219     15,932     8,668     2,644     (629 )   11,562     10,720     16,873  
 

Investing activities

    (4,522 )   (3,311 )   (10,755 )   (63,753 )   (112,444 )   (26,438 )   (59,254 )   (5,974 )
 

Financing activities

    (14,010 )   (320 )   860     60,838     113,777     15,179     56,873     (14,880 )

Capital expenditures:

                                                 

Property and equipment

    5,494     3,850     4,535     3,324     3,683     8,064     14,190     7,177  

Balance Sheet Data:

                                                 

Cash

        $ 17,666   $ 291         $ 704   $ 1,007   $ 9,346   $ 5,365  

Property and equipment, net

          36,749     20,915           38,045     41,313     46,953     41,959  

Management service agreements, net

          53,626               81,480     72,616     65,690     58,769  

Total assets

          320,878     69,800           267,164     281,876     332,025     317,186  

Total long-term debt and capital lease obligations

          212,190     41,551           135,137     159,018     216,783     203,444  

Total stockholders' equity

          66,198     20,984           86,005     79,191     71,720     74,102  

(1)
Oncure Medical Corp. ("Predecessor").

(2)
January 1, 2006 through August 18, 2006 (Predecessor)

(3)
August 19, 2006 through December 31, 2006, OnCure Holdings, Inc. ("Successor")

    In July 2006, OnCure Holdings, Inc. and its wholly-owned subsidiary, OnCURE Acquisition Sub, Inc., entered into an agreement and plan of merger with Oncure Medical Corp. pursuant to which OnCURE Acquisition Sub, Inc. was to merge with and into Oncure Medical Corp. continuing as the surviving corporation. On August 18, 2006, the merger transaction was consummated and Oncure Medical Corp. became a wholly owned subsidiary of OnCure Holdings, Inc. In the transaction, all of the former stockholders of Oncure Medical Cop., including certain members of management, received cash for the common stock, preferred stock, and stock options of Oncure Medical Corp., except as noted below.

    The assets acquired and liabilities assumed by the Successor were recorded at their estimated fair values at the date of the acquisition. The total purchase price was approximately $211.6 million, which included cash consideration paid to Predecessor shareholders of $101.0 million, stock options in the Successor plan valued at $1.9 million granted to Predecessor option holders in lieu of cash, debt assumed and retired of $106.3 million and aggregate acquisition expenses incurred by the Successor of $2.5 million. The transaction was financed with $1.7 million in preferred stock, $88.8 million in common stock, $1.9 million stock options, and $135.4 million of debt principally with the Predecessor's primary lender.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the related notes for the years ended December 31, 2007, 2008 and 2009, included elsewhere in this prospectus. This section of the prospectus contains forward-looking statements that involve substantial risks and uncertainties, such as statements about our plans, objectives, expectations and intentions. We use words such as "expect," "anticipate," "plan," "believe," "seek," "estimate," "intend," "future" and similar expressions including the list in the section entitled "Cautionary Statements Regarding Forward Looking Statements" to identify forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including as a result of some of the factors described below and in the section entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" included elsewhere in this prospectus. You are cautioned not to place undue reliance on these forward-looking statements, which apply on and as of the date of this prospectus. You should read the following discussion together with the section entitled "Risk Factors," "Selected Consolidated Financial Data" and the audited consolidated financial statements, including the related notes, appearing elsewhere in this prospectus.

Overview

Business Overview

        We operate radiation oncology treatment centers for cancer patients. We contract with radiation oncology medical groups, which we refer to as our affiliated physician groups, and their radiation oncologists through long-term management services agreements, or MSAs, to offer cancer patients a comprehensive range of radiation oncology treatment options, including most traditional and next generation services. Radiation oncology treatments are primarily performed with a linear accelerator, or linac, which uses high-energy photons or electrons to destroy the tumor. We currently provide services to a network of 14 affiliated physician groups that treat cancer patients at our 37 radiation oncology treatment centers, making us one of the largest strategically located networks of radiation oncology service providers. We believe that our physician business model, market leadership in targeted geographic regions, clinical technological equipment, strong track record of treatment center operating performance and experienced management team provides us with a significant competitive advantage in the radiation therapy market.

        We typically lease the facilities where our radiation oncology treatment centers are located and own or lease all of the equipment and leasehold improvements at these centers. Through our MSAs, we provide our affiliated physician groups use of these facilities, certain clinical services of our treatment center staff, and administer the non-medical business functions of our treatment centers, such as technical staff recruiting, marketing, managed care contracting, receivables management and compliance, purchasing, information systems, accounting, human resource management and physician succession planning. Our affiliated physician groups and their physicians retain full control over the clinical aspects of patient care. This structure is designed to allow our affiliated physician groups to focus primarily on providing patient care and treatment center growth including expansion of their group's services.

        Our MSAs have an average term of 10 years and are generally renewable for an additional five year period. Pursuant to the MSAs, our management services revenues include compensation by the affiliated physician groups for expenses incurred in operating our treatment centers plus a fee based on the earnings of our affiliated physician groups. As such, the operating costs of the treatment centers are our responsibility. We believe this MSA structure allows us to ensure the affiliated physician group's business interests are aligned with our own. We estimate that approximately 99% of our affiliated physician groups' revenues depend on reimbursement by third party payors, including government

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payors. As such, our revenue is generated from our MSAs, but is impacted by the operations of the treatment centers especially as they relate to revenues generated by the affiliated physician groups.

        We believe that we attract and retain leading radiation oncology groups and their physicians largely due to this business model, the benefits of scale and our commitment to clinical excellence. By establishing relationships with highly qualified, well-respected radiation oncology groups and their physicians, we believe that we receive ongoing benefits as a result of giving referring physicians, their patients and third party payors a high level of confidence in the clinical capabilities of our groups.

        We have built a provider network focused on targeted geographic regions and believe we have established leading market positions within these regions. Our network of 37 treatment centers is located in 37 markets and includes 15 treatment centers in California, 18 treatment centers in Florida and four treatment centers in Indiana. Based on our estimate of the number of freestanding, or non-hospital based, treatment centers, which includes approximately 90 treatment centers in California and 80 treatment centers in Florida, we believe we operate the most centers in California and the second most centers in Florida.

        We believe these two states are two of the most attractive markets in the United States for cancer treatment providers due to the large and growing senior populations and the high incidence of cancer. Our targeted regional focus is designed to allow us to build a leading market presence that enables us to drive efficiencies through economies of scale and fixed cost leverage. In addition, we believe our significant position in local markets creates strong barriers to entry.

        We currently have MSAs with 14 affiliated physician groups consisting of approximately 70 physicians, who on average have over 15 years of experience. There are currently five treatment centers that operate with only one full-time radiation oncologist. Our affiliated physician groups operating at any single physician treatment center, maintain adequate physician coverage in the absence of the regular full-time radiation oncologist by contracting for the services of a part-time radiation oncologist or locum tenens, or, if necessary, radiation oncologists within our affiliated physician groups will travel between more than one treatment center to treat patients and maintain appropriate coverage. We actively assist our affiliated physician groups in identifying new radiation oncologists to join their groups.

        We may either develop a treatment center at a "de novo" site or lease a previously existing treatment center and purchase the existing assets within such center. To date, only one of our current 37 treatment centers was developed as a de novo site, and we continue to evaluate opportunities to open additional de novo sites. We seek to purchase treatment centers or develop de novo treatment centers in locations in areas where there is high utilization of radiation oncology services and where we believe that we can maximize our profits by contracting with radiation oncology groups that can be significantly benefited by our management services. The MSAs are entered into after the acquisition of the treatment centers assets. When we refer to our acquisition of a treatment center, we are referring to the process whereby we acquire all of the outstanding assets at an existing treatment center and assume the existing lease, or enter into a new lease, relative to the facility. In connection with our acquisition of the assets, we enter into an MSA with the radiation oncology group to provide them use of the facilities, certain clinical services of our treatment center staff, and for us to administer the non-medical business functions of the treatment center.

        We believe that our treatment centers are fitted with clinical technological equipment that allows our affiliated physician groups to provide cancer patients the highest quality of care through clinically advanced treatment options. The early and continual adoption of cutting-edge technology by the physicians in our affiliated physician groups has enabled rapid sharing of this knowledge and best practices across the network to drive superior clinical results. Early adoption and appropriate utilization of these next generation technologies has resulted in more attractive reimbursement rates for our affiliated physician groups. We believe our clinical technological equipment provides us with a

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significant competitive advantage in attracting new physician groups and is appealing to referral sources, patients and payors.

        Since our inception, we have built a provider network of radiation oncology treatment centers that has resulted in increased net revenue and Adjusted EBITDA growth. In 2007 and 2008, we acquired five and six new treatment centers, respectively. Since 2008, there have been no acquisitions of treatment centers. Between fiscal years 2007 to 2009, our net revenue, operating income and Adjusted EBITDA have grown at compounded annual growth rates of 11.6%, 65.2% and 14.0%, respectively through a combination of organic growth and acquisition. Newly acquired centers contributed to approximately 46%, 9% and 17% of our revenues in 2007, 2008 and 2009, respectively. We believe that attractive long-term trends in our industry, our business model, our clinical excellence and our leading market position align us well for continued future growth.

        For the nine months ended September 30, 2010, our net revenue, operating income and Adjusted EBITDA were $74.2 million, $6.0 million and $26.7 million, respectively, compared to $81.8 million, $16.6 million and $30.6 million, respectively, for the same period in 2009. The year-over-year decline in net revenue, operating income and Adjusted EBITDA was principally due to a decrease in patient treatments as a result of broad economic factors and the replacement of linacs at two single linac treatment centers, which caused a temporary closure of one treatment center for approximately two months and reduced IMRT utilization at the second treatment center for approximately three months. In addition, due to the location of one of these treatment centers, we were unable to transfer patients from that temporarily closed center to other of our treatment centers. Prior to the replacement of these two linacs, the two centers combined generated approximately 10% of total revenues for the fiscal year ended 2009. During the nine months ended September 30, 2010, we incurred approximately $1.6 million in related center closure costs. One of the two centers returned to normal operations in May 2010 and the other returned to normal operations in August 2010.

Net Revenue and Expenses

        Net Revenue.    We generate net revenue pursuant to long-term MSAs with affiliated physician groups. Pursuant to these MSAs, we provide our affiliated physician groups use of our facilities, certain clinical services of our treatment center staff and administer the non-medical business functions of our treatment centers, such as technical staff recruiting, marketing, managed care contracting, receivables management, compliance, purchasing, information systems, accounting, human resource management and physician succession planning. In return, our management services revenues include compensation by the affiliated physician groups for expenses incurred in operating our treatment centers plus a fee based on the earnings of our affiliated physician groups, with the exception of one MSA in California, under which we earn our management fee based on a fixed percentage of the affiliated physician group's net revenue.

        The revenue of our affiliated physician groups is generated from reimbursement by third-party payors and government programs. As such, our revenue is generated from our MSAs, but is impacted by the operations of the treatment centers especially as they relate to revenues generated by the affiliated physician groups.

        Operating Expenses.    Our operating expenses consist principally of (i) the salaries and benefits we pay to our employees, including our management, billing and collections staff, administrative staff, marketing group and the professionals and employees working at our treatment centers other than the radiation oncologists; (ii) general and administrative expenses, including maintenance, rent, bad debt expense, utilities, insurance and other expenses for our corporate and administrative offices and treatment centers; and (iii) depreciation and amortization. The operating costs of the treatment centers are our responsibility.

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Factors Affecting our Growth

        We seek to drive growth by increasing our same-center operating performance, acquiring and developing new treatment centers in both our current and new markets, leveraging our strengths to contract with additional third-party payors on favorable terms, capitalizing on our receivables management expertise to maximize collections and benefitting from payors' increased acceptance of, and reimbursement for, next generation treatment technologies.

Same-Center Growth

        Referral source development, optimizing the utilization of new technologies, more efficient utilization of treatment center resources, a stable reimbursement environment and experienced management have resulted in our ability to maintain our financial performance. We have had success driving same-center growth through our proactive referral marketing programs, further advancements in web-based marketing, and targeted physician recruitment, which entails initiating physician recruitment only to the extent there is a need by one of our affiliated physician groups for additional practitioners within such group. Our referral marketing programs include assisting our affiliated physician groups with website development; search engine optimization; education oriented community awareness initiatives, such as community event participation; development of collateral material, such as brochures and newsletters and media advertisements; reports to track referral patterns; and periodic analyses of changes in referral sources. Our investment in, and implementation of, new state-of-the-art equipment has also helped drive same-center growth.

Acquisitions and Developments

        We expect to continue to acquire and develop treatment centers in connection with the implementation of our growth strategy. Since 2005, we have acquired 23 radiation oncology treatment centers, which are summarized in the following table:

 
  Number of Treatment Centers
for the Year Ended December 31,
 
 
  2005   2006   2007   2008   2009  

Treatment centers:

                               
 

California

    8     16     17     16     15  
 

Florida

    8     12     16     18     18  
 

Indiana

                4     4  

        We ceased operations of the Sonora Regional Cancer Center as of June, 2008. This new center that we developed in a joint venture commenced operation on April 6, 2005. Our initial contribution to the joint venture which managed this treatment center was $2.1 million. The closure was the result of the expiration of the lease agreement for the building space housing this treatment center. In connection with the closure, we recorded an impairment loss from the discontinued operation of approximately $3.0 million in 2008.

        In 2004, we entered into a contract to operate a treatment center on behalf of a third party payor for which we provided equipment and services. The center was closed in June 2009 as a result of the expiration of our contract to operate this treatment center. We recognized $0.6 million of closure costs during 2009.

        Since the beginning of 2007 we have acquired 11 treatment centers for approximately $66.6 million plus transaction expenses.

        On July 1, 2008, the Company acquired the assets of a radiation treatment center in Indiana previously held by ROA Associates, LLP whose financial statements are included herein.

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        The operations of the foregoing acquisitions have been included in the accompanying consolidated statements of income from the respective dates of each acquisition. When we acquire a treatment center, the purchase price is allocated to the assets acquired and liabilities assumed based upon their respective values on the acquisition date. The excess of the purchase price over the fair value of net assets acquired is allocated to goodwill. We believe the fair values assigned to the assets acquired and liabilities assumed were based on reasonable assumptions. We do not currently have any binding commitments or agreements to make any acquisitions.

Third-Party Contracting

        Our affiliated physician groups receive payments for their services and treatments rendered to patients covered by third-party payors. Most of our affiliated physician groups' revenue from third-party payors is from managed care organizations and is attributable to contracts we have negotiated with them. We believe that the scale of our treatment center network improves our ability to negotiate more attractive agreements with these payors. These agreements specify fixed fees for services provided at our treatment centers, and give the managed care organization the ability to market access to our affiliated physician groups and physicians to their members. This is a benefit to the managed care organization, and also gives our affiliated physician groups access to a larger pool of potential patients.

Receivables Management

        Our affiliated physician groups provide radiation therapy services under a significant number of different professional and technical codes, which determine reimbursement. Our affiliated physician groups rely on us to provide the complex coding, billing and collections process. Fees billed to contracted third-party payors and government sponsored programs are automatically adjusted to the allowable payment amount at the time of billing. For third-party payors with whom we do not have contracts and self-pay patients, the amount we expect will be paid for services is estimated and recorded at the time of billing. We revise these estimates at the time billings are collected for any actual differences in the amount received and the net billings due.

        Our billing office staff expedites the payment process using a number of methods, including electronic inquiries, phone calls and automated letters, which helps to facilitate timely payment by the relevant payor. We routinely prepare aging reports for accounts receivable by date of billing. Our collection team then utilizes these reports to assess and determine the payors requiring additional focus and collection efforts. Our accounts receivable exposure on Medicare, Medicaid and third-party payor balances are largely limited to contractual adjustments. Our exposure to bad debts on balances relating to these types of payors historically has been de minimis.

        In the event of denial of payment, we follow the payor's standard appeals process, both to secure payment and to lobby the payors, as appropriate, to modify their medical policies to expand coverage for the newer and more advanced treatment services that we provide. If all reasonable collection efforts with these payors have been exhausted by our central billing office staff, the account receivable is written off to the contractual allowance.

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Sources of our Affiliated Physician Groups' Net Revenue By Payor

        Our affiliated physician groups' net revenue is summarized by payor source in the following table:

 
  Nine Months
Ended
September 30,
  Year Ended
December 31,
 
 
  2009   2010   2007   2008   2009  

Third-party payors

    56 %   54 %   49 %   53 %   55 %

Medicare

    38 %   39 %   46 %   42 %   39 %

Medicaid

    5 %   6 %   4 %   4 %   5 %

Self-pay

    1 %   1 %   1 %   1 %   1 %

        Our affiliated physician groups receive payments for their services and treatments rendered to patients covered by Medicare, Medicaid, third-party payors and self-pay. Generally, our affiliated physician groups' net revenue is impacted by a number of factors, including the payor mix, the number and nature of procedures performed and the rate of payment for the procedures.

        Third-Party Payors.    Third-party payors include private health insurance as well as related payments for co-insurance and co-payments. Most of our affiliated physician groups' third-party payor revenue is attributable to contracts where a set fee is negotiated relative to services provided by our treatment centers. We do not have any contracts that individually represent over 5% of our affiliated physician groups' net revenue. Although the terms and conditions of our managed care contracts vary, they are typically for terms of less than five years and provide for automatic renewals. If payments by managed care organizations and other third-party payors decrease then our net revenue and net income could decrease.

        Medicare and Medicaid.    Since cancer disproportionately affects elderly people, a significant portion of our affiliated physician groups' net revenue is derived from the Medicare program as well as related co-payments. Medicare reimbursement rates are determined by the Center for Medicare and Medicaid Services, or CMS, and are typically lower than our rates to third-party payors and self-pay patients. Further, Medicaid reimbursement rates are typically lower than Medicare rates. Government sponsored programs generally reimburse on a fee-for-service basis based on a predetermined reimbursement rate schedule. Medicare reimbursement rates are determined by a formula that typically changes on an annual basis. We depend on payments from government sources and any changes in Medicare or Medicaid programs could result in a decrease in our net revenue and net income.

        Self-Pay.    Self-pay consists of payments for treatments by patients not otherwise covered by Medicare, Medicaid and third-party payors.

Seasonality

        Our results of operations historically have fluctuated on a quarterly basis and can be expected to continue to fluctuate. Some of the patients of our Florida treatment centers are part-time residents in Florida during the winter months. Hence, these treatment centers have historically experienced higher utilization rates during the winter months than during the remainder of the year. In addition, referrals are typically lower in the summer months due to traditional vacation periods.

Results of Operations

        The following summary results of operations data are qualified in their entirety by reference to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and other financial information included in this prospectus.

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        The following table presents summaries of results of operations for the nine months ended September 30, 2009 and 2010 and for the years ended December 31, 2007, 2008 and 2009:

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  2009   2010   2007   2008   2009  
 
  (unaudited)
   
   
   
 
 
  (in thousands)
 

Statement of Operations Data:

                               

Net revenue

  $ 81,766   $ 74,152   $ 85,718   $ 108,684   $ 106,757  

Cost of operations:

                               
 

Salaries and benefits

    27,318     26,582     33,533     37,933     35,738  
 

Depreciation and amortization

    14,118     13,830     15,662     18,110     18,718  
 

General and administrative expenses

    23,742     27,753     29,134     39,696     32,138  
                       

Total operating expenses

    65,178     68,165     78,329     95,739     86,594  
                       

Income from operations

    16,588     5,987     7,389     12,945     20,163  

Other income (expense):

                               
 

Interest expense

    (12,647 )   (16,206 )   (17,486 )   (18,258 )   (16,726 )
 

Debt extinguishment costs

        (2,932 )            
 

Loss on interest rate swap

    (746 )   (267 )   (1,860 )   (3,372 )   (916 )
 

Equity interest in net earnings of joint venture

    616     382     959     1,144     738  
 

Interest and other income (expense), net

    (240 )   (322 )   (52 )   200     (250 )
                       

Total other expense

    (13,017 )   (19,345 )   (18,439 )   (20,286 )   (17,154 )
                       

Income (loss) from continuing operations before income taxes

    3,571     (13,358 )   (11,050 )   (7,341 )   3,009  
                       

Income tax (expense) benefit

    (1,963 )   4,880     3,920     2,990     (1,654 )
                       

Income (loss) from continuing operations

    1,608     (8,478 )   (7,130 )   (4,351 )   1,355  

Discontinued operations, net of tax:

                               
 

Impairment loss resulting from discontinued operations

                (4,065 )    
 

Income from discontinued operations

            155     29      
                       

Net income (loss)

  $ 1,608   $ (8,478 ) $ (6,975 ) $ (8,387 ) $ 1,355  
                       

Comparison of the Nine Months Ended September 30, 2009 and 2010

        Net revenue.    Net revenue for the nine months ended September 30, 2010 was $74.2 million compared to $81.8 million for the same period in 2009, a decrease of $7.6 million or 9.3%. The year-over-year decline in net revenue was principally due to (1) a $2.2 million decrease resulting from the permanent closure of one center in June 2009 due to the expiration of a contract to operate the center and the resulting loss of revenue from patient treatments performed at that center, (2) a $1.1 million decrease due to the replacement of linacs at two single-linac treatment centers, which caused a temporary closure of one treatment center and reduced IMRT utilization at the second treatment center and (3) an overall decrease in patient treatments as a result of broad economic factors. Due to the location of one of the single-linac treatment centers, we were unable to transfer patients from the temporarily closed center to any of our other treatment centers in the network. Both treatment centers returned to normal operations during the nine months ended September 30, 2010.

        Salaries and benefits.    Salaries and benefits for the nine months ended September 30, 2010 decreased 2.6% to $26.6 million from $27.3 million for the same period in 2009. The decrease was primarily due to a reduction in personnel and related salary and employee benefit costs during the

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period, partially offset by a management retention payment of $0.5 million and $0.5 million of other compensation payments approved by the Compensation Committee of the Board of Directors.

        Depreciation and amortization.    Depreciation and amortization expense for the nine months ended September 30, 2010 decreased slightly to $13.8 million compared to $14.1 million for the same period of 2009.

        General and administrative expenses.    General and administrative expenses for the nine months ended September 30, 2010 increased $4.1 million to $27.8 million, or 17.3%, from $23.7 million for the nine months ended September 30, 2009. The increase was due to $1.6 million in costs associated with the operation of a temporary vault while replacing a linac at a single-linac treatment center and estimated settlement costs related to a lease settlement of $0.9 million, offset by a decrease of $2.1 million in center and corporate overhead costs. Reimbursement of legal expenses and proceeds related to the settlement of litigation offset general and administrative expenses incurred during the nine months ended September 30, 2009.

        Interest expense.    Interest expense increased $3.6 million to $16.2 million or 28.6% for the nine months ended September 30, 2010 compared to $12.6 million for the same period in 2009. The increase in interest expense was principally due to the refinancing of debt and the issuance of $210.0 million of Senior Secured Notes which bear interest at higher rates than the retired debt.

        Debt extinguishment cost.    The Company recognized $2.9 million of debt extinguishment cost in the second quarter of 2010 in connection with the refinancing.

        Income tax (expense) benefit.    Income tax benefit increased $6.9 million to $4.9 million for the nine months ended September 30, 2010 compared to income tax expense of $2.0 million during the same period in 2009. The increase was due to a $13.4 million loss from continuing operations before income taxes for the nine months ended September 30, 2010 compared to income from continuing operations before income taxes of $3.6 million for the nine months ended September 30, 2009.

Comparison of the Years Ended December 31, 2008 and 2009

        Net revenue.    Net revenue decreased by $1.9 million, or 1.8%, from $108.7 million in 2008 to $106.8 million in 2009. The decrease was primarily due to lower reimbursement rates from CMS. CMS reimbursement rate reduction decreased net revenue by approximately $1.9 million, or 1.5%, with an additional decrease in net revenue due to a 4.4% decrease in total treatment center census. This decrease to net revenue was partially offset by a 3.1% increase in IMRT and 17.2% increase in IGRT treatment procedures, which are billable at a higher rate than CBT treatments.

        Salaries and benefits.    Salaries and benefits decreased by $2.2 million, or 5.8%, from $37.9 million in 2008 to $35.7 million in 2009. Salaries and benefits as a percentage of net revenue decreased from 34.9% for 2008 to 33.5% for 2009. The decrease was primarily due to reduced salaries and benefits expenses related to staff reductions and elimination of bonuses in 2009.

        Depreciation and amortization.    Depreciation and amortization expense increased by $0.6 million, or 3.4%, from $18.1 million in 2008 to $18.7 million in 2009. This increase was primarily due to depreciation related to new equipment installed at certain treatment center locations at the end of 2008.

        General and administrative expenses.    General and administrative expenses decreased by $7.6 million, or 19.0%, from $39.7 million in 2008 to $32.1 million in 2009. General and administrative expenses as a percentage of net revenue decreased from 36.5% for 2008 to 30.1% for 2009. The decrease was primarily due to a decrease in legal and accounting expenses of approximately $6.6 million as a result of legal expenses incurred in 2008 which were partially reimbursed to us by one

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of our physician groups and in connection with the settlement of litigation related to those legal activities, the proceeds from which reduced legal expenses in 2009, and a decrease in corporate relocation expenses of $1.1 million resulting from moving the corporate headquarters from California to Colorado in 2008.

        Interest expense.    Interest expense decreased by $1.5 million, or 8.4%, from $18.3 million in 2008 to $16.7 million in 2009. The decrease in interest expense was principally due to a decrease in interest rates and the average balance of debt outstanding.

        Loss on interest rate swap.    Loss on interest rate swap decreased by $2.5 million, or 72.8%, from $3.4 million in 2008 to $0.9 million in 2009. The decrease in the loss on interest rate swap was principally due to a continued but less significant decline in interest rate expectations in 2009 compared to 2008.

        Equity interest in net earnings of joint venture.    Equity interest in earnings of joint venture decreased by $0.4 million, or 35.5%, from $1.1 million in 2008 to $0.7 million in 2009. The decrease in the equity interest in earnings of joint venture was principally due to a decline in joint venture revenue and the resultant decline in net earnings.

        Discontinued operations.    We incurred an impairment loss resulting from discontinued operations in 2008 of $4.1 million. The loss was the result of the closure of operations of our Sonora Regional Cancer Center, or Sonora, in which we had a 50% interest in a joint venture as of June 30, 2008. We recognized an impairment loss from the discontinued operation for the intangible assets and property, plant, and equipment of approximately $2.4 million ($0.5 million of which was attributable to the Sonora non-controlling joint venture partner) in 2008. We also recorded an impairment loss from discontinued operations of approximately $3.0 million representing the reduction in value of goodwill allocable to Sonora. The impairment charges were recorded net of the $0.8 million of related income tax benefit in 2008.

        Income tax (expense) benefit.    Income tax expense increased $4.6 million from an income tax benefit of $3.0 million in 2008 to $1.7 million of income tax expense in 2009. The increase was primarily due to income from continuing operations of $3.0 million before income taxes in 2009 compared to a loss of $7.3 million from continuing operations before income taxes in 2008.

Comparison of the Years Ended December 31, 2007 and 2008

        Net revenue.    Net revenue increased by $23.0 million, or 26.8%, from $85.7 million in 2007 to $108.7 million in 2008. Approximately $10.7 million of this increase was related to additional centers acquired during 2007 and 2008. The remaining increase in net revenue was principally due to an increase in total census of 8.1% and an increase in IMRT treatments of 18.8%, which have a greater reimbursement rate than CBT.

        Salaries and benefits.    Salaries and benefits increased by $4.4 million, or 13.1%, from $33.5 million in 2007 to $37.9 million in 2008. The increase in salaries and benefits was primarily due to the addition of employees in connection with the additional centers acquired in 2007 and 2008. Salaries and benefits as a percentage of net revenue decreased from 39.1% for 2007 to 34.9% for 2008.

        Depreciation and amortization.    Depreciation and amortization expense increased by $2.4 million, or 15.6%, from $15.7 million in 2007 to $18.1 million in 2008. This increase in depreciation and amortization expense was primarily due to additional treatment centers acquired and new equipment installed in 2007 and 2008.

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        General and administrative expenses.    General and administrative expenses increased by $10.6 million, or 36.3%, from $29.1 million in 2007 to $39.7 million in 2008. General and administrative expenses as a percentage of net revenue increased from 34.0% for 2007 to 36.5% for 2008. The increase was primarily due to additional centers acquired in 2007 and 2008, which added approximately $5.5 million to our cost structure, an increase in corporate relocation expenses of $1.1 million as we moved the corporate headquarters from California to Colorado in 2008 and $2.3 million in higher legal expenses.

        Interest expense.    Interest expense increased by $0.8 million, or 4.4%, from $17.5 million in 2007 to $18.3 million in 2008. The increase in interest expense was principally due to an increase in the average balance of debt outstanding as a result of acquisitions in 2007 and 2008.

        Loss on interest rate swap.    Loss on interest rate swap increased by $1.5 million from $1.9 million in 2007 to $3.4 million in 2008. The increase in the loss on interest rate swap was principally due to a more significant decline in expected interest rates in 2008 compared to 2007.

        Equity interest in net earnings of joint venture.    Equity interest in earnings of joint venture increased by $0.2 million, or 19.3%, from $1.0 million in 2007 to $1.1 million in 2008. The increase in the equity interest in earnings of joint venture was principally due to increased revenue related to joint venture operations.

        Discontinued operations.    We incurred an impairment loss resulting from discontinued operations in 2008 of $4.1 million. The loss was the result of the closure of operations at Sonora in which we had a 50% interest in a joint venture as of June 30, 2008. We recognized an impairment loss from the discontinued operation for the intangible assets and property, plant, and equipment of approximately $2.4 million ($0.5 million of which was attributable to the Sonora non-controlling joint venture partner) in 2008. We also recorded an impairment loss from discontinued operations of approximately $3.0 million representing the reduction in value of goodwill allocable to Sonora. The impairment charges were recorded net of the $0.8 million of related income tax benefit in 2008.

        Income tax (expense) benefit.    Income tax benefit decreased $0.9 million from $3.9 million in 2007 to $3.0 million in 2008. The decrease was primarily due to a decrease in the loss from continuing operations before income taxes from $11.1 million in 2007 to $7.3 million in 2008.

Liquidity and Capital Resources

        On May 13, 2010, we concluded the offering of the Senior Secured Notes. Proceeds from the sale of the Senior Secured Notes were used primarily to repay our then existing senior credit facility and subordinated debt. Concurrently with the closing of the offering, our direct wholly-owned subsidiary, Oncure Medical, and each of its direct and indirect subsidiaries entered into a new senior secured revolving credit facility with GE Capital Markets, Inc., as sole lead arranger and book manager, General Electric Capital Corporation, as administrative agent and collateral agent, and the other lenders from time to time party thereto.

        The new revolving senior credit facility provides for aggregate commitments of up to $40.0 million as of May 13, 2010, including a letter of credit sub-facility of $2.0 million and a swing line sub-facility of $2.0 million, and provides for the increase, at our option, of aggregate commitments by $10.0 million, subject to certain conditions. The new revolving credit facility is undrawn as of September 30, 2010 and expires in May 2015.

        Our primary ongoing liquidity requirements are for working capital, debt service, capital expenditures and acquisitions. We finance these liquidity requirements through a combination of cash on hand, cash flows from operating activities and the incurrence of additional indebtedness, including borrowings under our revolving credit facility. See "Description of Certain Indebtedness."

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        As of September 30, 2010, we had total cash and cash equivalents of $17.7 million, $206.5 million of outstanding long-term indebtedness, net of discount, and availability under our revolving credit facility of up to $40.0 million, which may be increased pursuant to the terms of the indenture governing the exchange notes and the agreement governing our revolving credit facility. See "Capitalization" and "Description of Certain Indebtedness."

        Based on our current business plan, we believe that our existing cash balances, cash generated from operations and availability under our revolving credit facility will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our future cash requirements could be higher than we currently expect as a result of various factors. Our ability to meet our liquidity needs could be adversely affected if we suffer adverse results of operations, or if we violate the covenants and restrictions to which we are subject under our revolving credit facility. Additionally, our ability to generate sufficient cash from our operating activities is subject to general economic, political, regulatory, financial, competitive and other factors beyond our control. Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us under our revolving credit facility in an amount sufficient to enable us to pay our service or repay our indebtedness or to fund our other liquidity needs, and we may be required to seek additional financing through credit facilities with other lenders or institutions or seek additional capital through private placements or public offerings of equity or debt securities. No assurances can be given that we will be able to complete additional debt or equity financings on terms favorable to us or at all.

Cash Flows Provided By Operating Activities

        Net cash provided by operating activities for the nine months ended September 30, 2009 and 2010 and the years ended December 31, 2007, 2008 and 2009 was $12.2 million, $15.9 million, $11.6 million, $10.7 million and $16.9 million, respectively.

        Net cash provided by operating activities increased $3.7 million to $15.9 million in the nine months ended September 30, 2010 compared to $12.2 million in the same period in 2009. The increase was primarily a result of an increase in cash provided by accrued expenses of $12.1 million primarily due to accrued interest, debt extinguishment costs of $2.9 million, an increase in cash provided by accounts receivable of $3.7 million and a decrease in cash utilized for prepaid expenses and other assets of $4.0 million, offset by a decrease in net income in 2010 of $10.1 million, a decrease in deferred income tax expense of $6.8 million and an increase in cash utilized by other liabilities of $2.2 million primarily due to settlement of our interest swap agreement.

        Net cash provided by operating activities decreased by $0.8 million from $11.6 million in 2007 to $10.7 million in 2008. This decrease was primarily attributable to a $1.4 million increase in net loss, an increase in accounts receivable of $8.1 million from the centers acquired in 2007 and 2008 and a decrease in other current liabilities of $4.9 million, offset by increased depreciation and amortization expense of $2.8 million, impairment loss resulting from discontinued operations of $4.1 million, an increase in accounts payable and accrued expenses of $3.8 million and an increase in prepaid expenses and other assets of $2.8 million.

        Net cash provided by operating activities increased by $6.2 million from $10.7 million in 2008 to $16.9 million in 2009. This increase was primarily attributable to a $9.7 million increase in net income offset in part by $4.1 million loss from discontinued operations.

Cash Flows Used In Investing Activities

        Net cash used in investing activities for the nine months ended September 30, 2009 and 2010 and the years ended December 31, 2007, 2008 and 2009 was $4.5 million, $3.3 million, $26.4 million, $59.3 million and $6.0 million, respectively.

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        Net cash used in investing activities decreased by $1.2 million from $3.3 million for the nine months ended September 30, 2010 to $4.5 million for the nine months ended September 30, 2009. The decrease was primarily due to a decrease in capital expenditures.

        Net cash used in investing activities increased by $32.8 million from $26.4 million in 2007 to $59.3 million in 2008. This increase was primarily attributable to a $25.4 million increase in cash paid for acquisitions and a $6.1 million increase in property and equipment purchases in 2008 as compared to 2007.

        Net cash used in investing activities decreased by $53.3 million from $59.3 million used in investing activities in 2008 to $6.0 million used in investing activities in 2009. This decrease was primarily attributable to $46.5 million in cash paid for acquisitions in 2008 compared to no acquisitions in 2009 and a $7.0 million reduction in property and equipment purchases in 2009 as compared to 2008.

        Historically, our capital expenditures have been primarily for equipment and information technology software systems and equipment. Total capital expenditures (excluding acquisitions) were $8.1 million, $14.2 million and $7.2 million in 2007, 2008 and 2009, respectively. Capital expenditures for 2010, exclusive of the purchase of radiation oncology treatment centers, are expected to be approximately $8.0 million primarily related to equipment purchases and maintenance capital. To the extent that we acquire or internally develop new radiation oncology treatment centers, we may need to increase our expected capital expenditures.

Cash Provided By (Used In) Financing Activities

        Net cash used in financing activities for the nine months ended September 30, 2009 and 2010 was $14.0 million and $0.3 million, respectively. Net cash provided by financing activities for the years ended December 31, 2007 and 2008 was $15.2 million and $56.9 million, respectively. Net cash used in financing activities for the year ended December 31, 2009 was $14.9 million.

        Net cash used in financing activities decreased by $13.7 million from $14.0 million for the nine months ended September 30, 2009, to $0.3 million for the nine months ended September 30, 2010. The decrease was primarily due to $206.3 million of proceeds from the issuance of Senior Secured Notes in May 2010, offset by $197.7 million in debt repayments and related loan costs of $8.9 million and a decrease in net payments on the line of credit of $12.0 million for the nine months ended September 30, 2009.

        Net cash provided by financing activities increased by $41.7 million in 2008 from $15.2 million in 2007 to $56.9 million in 2008. The increase was primarily attributable to $26.1 million in proceeds from the issuance of long term debt and $12.0 million in draws on our existing line of credit in 2008 compared to $0 in 2007. The increase was also attributable to a $2.1 million decrease in principal payments on our long term debt in 2008.

        Net cash used in financing activities increased by $71.8 million from $56.9 million provided by financing activities in 2008 to $14.9 million used in financing activities in 2009. The increase was primarily attributable to $47.2 million in proceeds from the issuance of debt and a $12.0 million draw on our line of credit in 2008 compared to the repayment of $12.0 million on our existing line of credit and no new borrowings or issuance of debt in 2009.

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Contractual Obligations

        The following table sets forth our contractual obligations and the periods in which payments are due as of September 30, 2010:

 
  Payments Due by Period  
Contractual Cash Obligations (in thousands)
  Total   Less Than
1 Year
  2 - 3 Years   4 - 5 Years   After 5
Years
 

Long-term debt(1)

  $ 382,785   $ 24,675   $ 49,350   $ 49,350   $ 259,350  

Capital lease obligations and other notes

    5,715     1,861     2,684     1,170      

Operating leases

    55,514     9,289     18,260     14,506     13,459  
                       
 

Total contractual cash obligations

  $ 443,954   $ 35,825   $ 70,294   $ 65,026   $ 272,809  
                       

(1)
Interest payments on long-term debt are based on the fixed annual interest rate of 11.75%.

        In addition to the obligations in the table above, we have an advisory services agreement with Genstar Capital, LLC. Pursuant to this agreement, we pay Genstar an annual management fee of $1.5 million for financial and advisory services. This agreement continues from year to year unless otherwise amended or terminated.

        Additionally, in January 2006, we formed the Vidalia Regional Cancer Center, LLC as a joint venture with Meadows Regional Medical Center to develop and operate a new treatment center in Vidalia, Georgia. Both we and Meadows Regional Medical Center have committed to fund an initial $1.0 million of initial capital upon the successful issuance of a Georgia CON by the Georgia Department of Community. Although the CON has been issued, there has been no development activity to date.

Off Balance Sheet Arrangements

        We do not currently have any off-balance sheet arrangements with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Inflation

        We are impacted by rising costs for certain inflation-sensitive operating expenses such as equipment, labor and employee benefits. We believe that inflation has not had a material impact on us, but may in the future.

Quantitative and Qualitative Disclosures about Market Risk

        Interest Rate Sensitivity.    We are exposed to various market risks as a part of our operations, and we anticipate that this exposure will increase as a result of our planned growth. In an effort to mitigate losses associated with these risks, we may at times enter into derivative financial instruments. These derivative financial instruments may take the form of forward sales contracts, option contracts, and interest rate swaps. We have not and do not intend to engage in the practice of trading derivative securities for profit. In March 2006, we entered into an interest rate swap agreement in connection with our then existing credit facility, with a notional amount of $70.0 million. We terminated and repaid our previous credit facility and the related interest rate swap agreement in May 2010.

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Critical Accounting Policies

        Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, net revenue and expenses, and related disclosures of contingent assets and liabilities. We continuously evaluate our critical accounting policies and estimates, including those related to consolidation, revenue recognition, accounts receivable valuation, evaluation of goodwill and other intangible assets for impairment and the provision for income taxes. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

        Our accounting policies are described in Note 2 of the Notes to our Consolidated Financial Statements included elsewhere in this prospectus. We believe the following critical accounting policies are important to the portrayal of our financial condition and results of operations and require our management's subjective or complex judgment because of the sensitivity of the methods, assumptions and estimates used in the preparation of our consolidated financial statements.

        Net Revenue and Allowances for Contractual Discounts.    Our net revenue represents a management fee that is based on a fixed percentage of the earnings of our affiliated physician groups except for one facility where the management fee is based on a fixed percentage of the affiliated physician group's net revenue. Accordingly, the net revenue reported in our consolidated financial statements is affected by the net revenue of our affiliated physician groups. Our affiliated physician groups have agreements with third-party payors that provide for payments at amounts different from their established rates. Our affiliated physician groups' net revenue is reported at the estimated net realizable amounts due from patients, third-party payors and others for services rendered. Our affiliated physician groups' net revenue is recognized as services are provided. Medicare and other governmental programs reimburse physicians based on fee schedules, which are determined by the related government agency. Our affiliated physician groups also have agreements with managed care organizations to provide physician services based on negotiated fee schedules.

        Our affiliated physician groups derive a significant portion of their net revenue from Medicare, Medicaid and third party payors that receive discounts from our standard charges. We must estimate the total amount of these discounts to prepare our consolidated financial statements. The Medicare and Medicaid regulations and various managed care contracts under which these discounts must be calculated are complex and subject to interpretation and adjustment. We estimate the allowance for contractual discounts on a payor class basis given each payors' interpretation of the applicable regulations or contract terms. These interpretations sometimes result in payments that differ from our estimates. Additionally, updated regulations and contract renegotiations occur frequently necessitating regular review and assessment of the estimation process. Changes in estimates related to the allowance for contractual discounts affect net revenue reported in our consolidated statements of operations. We recorded changes in estimates in our allowances for contractual discounts for fiscal years 2007, 2008 and 2009 which increased net revenue by $1.2 million, $1.8 million, and $0.2 million, respectively. There was no change in estimate in our allowances for contractual discounts for the nine months ended September 30, 2010.

        Accounts Receivable and Allowances for Doubtful Accounts.    Accounts receivable and the related cash flows upon collection of these accounts receivable are assigned to us by our affiliated physician groups and reported net of estimated allowances for doubtful accounts and contractual adjustments. As part of the MSA, and in consideration of the management services we provide to them, the affiliated

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physician groups assign their accounts receivable to us. Accounts receivable are uncollateralized and primarily consist of amounts due from third-party payors and patients. To provide for accounts receivable that could become uncollectible in the future, we establish an allowance for doubtful accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations (other than Medicare) of receivables is limited due to the large number of insurance companies and other payors that provide payments for our services. We do not believe that there are any other significant concentrations of receivables from any particular payor that would subject us to any significant credit risk in the collection of our accounts receivable.

        The amount of the provision for doubtful accounts is based upon our assessment of historical and expected net collections, business and economic conditions, trends in federal and state governmental healthcare coverage and other collection indicators. Accounts receivable are written-off after collection efforts have been followed in accordance with our policies. Accounts receivable, less allowances of $0.6 million, $0.6 million and $0.8 million, were $20.7 million, $21.2 million and $18.2 million as of December 31, 2008 and 2009, and September 30, 2010, respectively.

        Management Services Agreements Payable.    We collect accounts receivable assigned to us by our affiliated physician groups. We remit amounts due to our affiliated physician groups based on the terms of the respective MSA. This payable is included in accrued expenses in our consolidated financial statements and was $2.7 million, $2.9 million, and $2.9 million as of December 31, 2008 and 2009, and September 30, 2010, respectively.

        Goodwill.    We perform impairment tests at least annually on all goodwill. For purposes of testing goodwill for impairment, our goodwill has been assigned to our one consolidated reporting unit and our test is performed in the fourth quarter of each year or more frequently if impairment indicators arise. Goodwill is reviewed for impairment utilizing a two-step process. The first step is to identify if a potential impairment exists by comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to have a potential impairment and the second step of the impairment test is not necessary. However, if a potential impairment exists, the fair value of the reporting unit is compared to the fair value of its assets and liabilities, excluding goodwill, to estimate the implied value of the reporting unit's goodwill. If an impairment charge is deemed necessary, a charge is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value.

        Considerable management judgment is necessary to estimate the fair value of our reporting unit and goodwill. We determine the fair value of our reporting unit based on the income approach, using a discounted cash flow, or DCF, analysis to value the long-term future cash flows. This DCF analysis was used solely for the purpose of evaluating our goodwill for impairment and should not be interpreted as our prediction of future performance. The assumptions used in our DCF analysis are consistent with the assumptions we believe hypothetical marketplace participants would use, including the expectation that the most likely transaction to acquire us would be to acquire our assets. With respect to our DCF analysis, the timing and amount of future cash flows requires critical management assumptions, including estimates of expected future net revenue growth rates, EBITDA contributions, expected capital expenditures and an appropriate discount rate and terminal value. The average annual revenue growth rates forecasted for the reporting unit for the first five years of our projections ranged between 5.6% and 6.1%, due to expected growth in census numbers specifically related to IMRT and IGRT services. After 2014, revenue growth was estimated to decline to a more normalized level. The overall weighted average cost of capital was 11.5% and the terminal value was calculated using the "Gordon Growth" expression. This expression quantifies the terminal value based on the assumption of a perpetual stream of cash flow with an inherent growth rate of 3.0%. Our 2009 assessment resulted in the determination that the fair value of our reporting unit exceeded the carrying amount by 22% and thus no impairment was indicated.

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        Management Services Agreements.    MSAs represent the intangible assets that were purchased in the acquisition of our common stock by Genstar in 2006. In connection with the acquisition, existing MSAs were recorded at their estimated fair values based upon an independent valuation. The MSAs are noncancelable except for performance defaults that are subject to various notice and cure periods.

        We amortize the MSA intangible assets on a straight-line basis over the term of each MSA, including one renewal option period, which range from four to 24 years.

        Impairment of Long-Lived Assets.    We review our long lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. Assessment of possible impairment of a particular asset is based on our ability to recover the carrying value of such asset based on our estimate of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of such asset, an impairment charge is recognized for the amount by which the asset's carrying value exceeds its estimated fair value.

        Income Taxes.    We make estimates in recording our provision for income taxes, including determination of deferred tax assets and deferred tax liabilities and any valuation allowances that might be required against the deferred tax assets. There are currently no valuation allowances against deferred tax assets.

        An uncertain income tax position will not be recognized if we believe it has less than a 50% likelihood of being sustained. At September 30, 2010, we had $1.0 million of unrecognized tax assets. We are subject to taxation in the United States and five state jurisdictions. We are generally subject to federal and state examination for tax years after December 31, 2005 for federal purposes and after December 31, 2004 for state purposes.

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BUSINESS

Company Overview

        We operate radiation oncology treatment centers for cancer patients. We contract with radiation oncology medical groups, which we refer to as our affiliated physician groups, and their radiation oncologists through long-term management services agreements, or MSAs, to offer cancer patients a comprehensive range of radiation oncology treatment options, including most traditional and next generation services. We currently provide services to a network of 14 affiliated physician groups that treat cancer patients at our 37 radiation oncology treatment centers, making us one of the largest strategically located networks of radiation oncology service providers. We believe that our physician business model, market leadership in targeted geographic regions, clinical technological equipment, strong track record of treatment center operating performance and experienced management team provides us with a significant competitive advantage in the radiation therapy market.

        We typically lease the facilities where our radiation oncology treatment centers are located and own or lease all of the equipment and leasehold improvements at these centers. Through our MSAs, we provide our affiliated physician groups use of these facilities, certain clinical services of our treatment center staff, and administer the non-medical business functions of our treatment centers, such as technical staff recruiting, marketing, managed care contracting, receivables management and compliance, purchasing, information systems, accounting, human resource management and physician succession planning. Physician succession planning refers to the process for anticipating the need for additional physicians within an affiliated physician group as a result of the retirement or planned departure of an existing member, the health and well being of an existing member or such member's desire for a physician to take part-time status and the group's plans for growth. On an as needed basis, we assist our affiliated physician groups in identifying new radiation oncologists to join their groups by placing and posting job advertisements in appropriate periodicals or websites, collecting and screening resumes, conducting preliminary interviews and reference checks, and coordinating interviews with group members. Our affiliated physician groups and their physicians retain full control over the clinical aspects of patient care. This structure is designed to allow our affiliated physician groups to focus primarily on providing patient care and treatment center growth including expansion of their group's services.

        Our MSAs have an average term of 10 years and are generally renewable for an additional five year period. Pursuant to the MSAs, our management services revenues include compensation by the affiliated physician groups for expenses incurred in operating our treatment centers plus a fee based on the earnings of our affiliated physician groups. As such, the operating costs of the treatment centers are our responsibility. We believe this MSA structure allows us to ensure the affiliated physician group's business interests are aligned with our own. We estimate that approximately 99% of our affiliated physician groups' revenues depend on reimbursement by third party payors, including government payors. As such, our revenue is generated from our MSAs, but is impacted by the operations of the treatment centers especially as they relate to revenues generated by the affiliated physician groups.

        We believe that we attract and retain leading radiation oncology groups and their physicians largely due to this business model, the benefits of scale and our commitment to clinical excellence. By establishing relationships with highly qualified, well-respected radiation oncology groups and their physicians, we believe that we receive ongoing benefits as a result of giving referring physicians, their patients and third party payors a high level of confidence in the clinical capabilities of our groups.

        We have built a provider network focused on targeted geographic regions and believe we have established leading market positions within these regions. Our network of 37 treatment centers is located in 37 markets and includes 15 treatment centers in California, 18 treatment centers in Florida and four treatment centers in Indiana. Based on our estimate of the number of freestanding, or non-hospital based, treatment centers, which includes approximately 90 treatment centers in California and

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80 treatment centers in Florida, we believe we operate the most centers in California and the second most centers in Florida.

        We believe these two states are two of the most attractive markets in the United States for cancer treatment providers due to the large and growing senior populations and the high incidence of cancer. Our targeted regional focus is designed to allow us to build a leading market presence that enables us to drive efficiencies through economies of scale and fixed cost leverage. In addition, we believe our significant position in local markets creates strong barriers to entry.

        We currently have MSAs with 14 affiliated physician groups consisting of approximately 70 physicians, who on average have over 15 years of experience. There are currently five treatment centers that operate with only one full-time radiation oncologist. Our affiliated physician groups operating at any single physician treatment center, maintain adequate physician coverage in the absence of the regular full-time radiation oncologist by contracting for the services of a part-time radiation oncologist or locum tenens, or, if necessary, radiation oncologists within our affiliated physician groups will travel between more than one treatment center to treat patients and maintain appropriate coverage.

        We may either develop a treatment center at a "de novo" site or lease a previously existing treatment center and purchase the existing assets within such center. To date, only one of our current 37 treatment centers was developed as a de novo site, and we continue to evaluate opportunities to open additional de novo sites. We seek to purchase treatment centers or develop de novo treatment centers in locations in areas where there is high utilization of radiation oncology services and where we believe that we can maximize our profits by contracting with radiation oncology groups that can be significantly benefited by our management services. The MSAs are entered into after the acquisition of the treatment centers assets. When we refer to our acquisition of a treatment center, we are referring to the process whereby we acquire all of the outstanding assets at an existing treatment center and assume the existing lease, or enter into a new lease, relative to the facility. In connection with our acquisition of the assets, we enter into an MSA with the radiation oncology group to provide them use of the facilities, certain clinical services of our treatment center staff, and for us to administer the non-medical business functions of the treatment center.

        We believe that our treatment centers are fitted with clinical technological equipment that allows our affiliated physician groups to provide cancer patients the highest quality of care through clinically advanced treatment options. The early and continual adoption of cutting-edge technology by the physicians in our affiliated physician groups has enabled rapid sharing of this knowledge and best practices across the network to drive superior clinical results. Early adoption and appropriate utilization of these next generation technologies has resulted in more attractive reimbursement rates for our affiliated physician groups. We believe our clinical technological equipment provides us with a significant competitive advantage in attracting new physician groups and is appealing to referral sources, patients and payors.

        Since our inception, we have built a leading network of radiation oncology treatment centers that has resulted in increased net revenue and Adjusted EBITDA growth. In 2007 and 2008, we acquired five and six new treatment centers, respectively. Since 2008, there have been no acquisitions of treatment centers. Between fiscal years 2007 to 2009, our net revenue, operating income and Adjusted EBITDA have grown at compounded annual growth rates of 11.6%, 65.2% and 14.0%, respectively, through a combination of organic growth and acquisitions. Newly acquired centers contributed to approximately 46%, 9% and 17% of our revenues in 2007, 2008 and 2009, respectively. For the year ended December 31, 2009, our net revenue, operating income and Adjusted EBITDA were $106.8 million, $20.1 million and $39.5 million, respectively. We believe that attractive long-term trends in our industry, our business model, our clinical excellence and our leading market position align us well for continued future growth.

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        For the nine months ended September 30, 2010, our net revenue, operating income and Adjusted EBITDA were $74.2 million, $6.0 million and $26.7 million, respectively, compared to $81.8 million, $12.0 million and $30.6 million, respectively, for the same period in 2009. The year-over-year decline in net revenue, operating income and Adjusted EBITDA was principally due to a decrease in patient treatments as a result of broad economic factors and the replacement of linacs at two single linac treatment centers, which caused a temporary closure of one treatment center for approximately two months and reduced IMRT utilization at the second treatment center for approximately 3 months. In addition, due to the location of one of these treatment centers, we were unable to transfer patients from that temporarily closed center to any of our other treatment centers. Prior to the replacement of these two linacs, the two centers combined generated approximately 10% of total revenue for the fiscal year ended 2009. During the nine months ended September 30, 2010, we incurred approximately $1.6 million in related center closure costs. One of the two centers returned to normal operations in May 2010 and the other returned to normal operations in the third quarter of 2010.

        We were originally formed as a Delaware corporation in 1998. In 2006, we were acquired by Genstar and it affiliates. At the time we operated owned 28 treatment centers in two different states and had MSAs with 10 affiliated physician groups, representing approximately 50 physicians. Since the acquisition by Genstar, we have continued to grow our business, acquiring 11 additional treatment centers. We currently have a provider network of 37 treatment centers in three different states and MSAs with 14 affiliated physician groups consisting of approximately 70 physicians. Substantially all of the co-registrants were originally acquired in connection with the acquisitions of our various treatment centers and are currently dormant. Certain other co-registrants including USCC Acquisition Corp., USCC Florida Acquisition Corp. and US Cancer Care, Inc. were formed by Oncure Medical Corp. and currently serve as operating entities and are parties to certain of our MSAs.

Industry Overview

        According to the ACS, over 19 million cancer cases have been diagnosed in the United States since 1990, with an estimated 1.5 million cases diagnosed in 2009. Approximately 77% of all cancer cases are currently being diagnosed in people over the age of 55. As the United States population and, in particular, the baby boomer generation ages, the number of cancer diagnoses are expected to continue to increase. The states in which we operate collectively represented approximately 19% of United States cancer cases in 2009 (California approximately 10%, Florida approximately 7% and Indiana approximately 2%).

        The United States radiation therapy market was estimated to be approximately $8 billion in 2007. The market's growth has been driven by an aging population, which is more likely to develop cancer, along with the development of radiation technologies that are effective in treating a greater range of cancer diagnoses. The radiation therapy market in the United States is highly fragmented with over 2,200 locations at which radiation therapy is provided. Free-standing radiation oncology treatment centers have grown in prevalence from approximately 400 in 1990 to over 1,000 in 2007. We believe that this growth has been driven by patients' desire to receive radiation oncology treatments, which are typically given daily over a four- to nine-week period, at specialized centers that are convenient and located in their communities. Many of these free-standing treatment centers can benefit from professional management competencies such as technical staff recruiting, marketing, managed care contracting, receivables management, compliance, purchasing, information systems, accounting, human resource management and physician succession planning, and thus look to contract with networks like ours.

        Cancer can be treated using a variety of methods. Although the majority of cancer patients receive radiation therapy, individuals diagnosed with cancer may elect to undergo surgery, chemotherapy and/or biological therapy in conjunction with, or instead of, radiation therapy. Radiation therapy is used to treat nearly two-thirds of all cancer patients in the United States. Radiation therapy is often curative

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with patients in whom cancer is localized and has not metastasized. Cancer patients are typically referred to a treatment center or radiation oncologist by medical oncologists, breast surgeons, general surgeons, urologists, family practice and internal medicine physicians in addition to other physician specialties and payor sources. Physicians advise patients to choose the type of treatment or combination of treatments based upon the type of cancer, the stage of development and the expected impact on the patients' and his/her caregivers' quality of life, including potential side effects, family stress and economic consequences.

        Delivery of a beam of radiation at a targeted tumor area is currently the dominant treatment used in radiation oncology. CBT is delivered with limited precision and can expose patients to relatively high levels of radiation. The evolution of cancer research and technological advances have produced increasingly effective methods of radiation oncology treatment, including IMRT and IGRT, which deliver the necessary doses of radiation in a more targeted manner, thus minimizing the harm to healthy organs surrounding a tumor. The advancements in cancer targeting also result in fewer side effects and complications, enhancing a patient's overall quality of life. These technological advances are further supported by payor approval of new cancer indications and diagnoses. We also believe that the discovery and utilization of new, innovative means of radiation therapy delivery and the increased awareness of next generation cancer therapy treatments by physicians and patients will continue to increase the use of radiation therapy for treating many types of cancer.

        We expect future growth in the radiation therapy market to be driven by:

    increasing incidence of cancer associated with the aging population;

    advancing deployment and acceptance of radiation equipment technologies that increase the number of treatable cancer patients;

    new and more effective treatment technologies that achieve better patient results with fewer side effects and that have more attractive reimbursement levels;

    increasing physician and patient familiarity with the various cancer treatment options available, thus leading to greater demand for next generation therapies that prevent healthy tissue damage and improve quality of life; and

    continuing payor acceptance of evolving science and treatment technologies in radiation oncology, thereby leading to their approval of reimbursement for additional diagnoses and indications for reimbursement.

Competitive Strengths

        We have developed a broad range of capabilities that we believe provide us with significant competitive advantages, including:

        Physician Business Model that Aligns Incentives.    We contract with affiliated physician groups in a managed services model. This model has been a key driver of our financial success and serves as a foundation for future growth. We enter into MSAs with established radiation oncology groups to realize the value of ongoing patient referral streams and managed care relationships. We structure our MSAs to ensure the physicians' business interests are aligned with our own. We currently contract with 14 affiliated physician groups consisting of approximately 70 physicians, who on average have over 15 years of experience. By establishing relationships with highly qualified, well-respected radiation oncology groups and their physicians, we believe that we receive ongoing benefits as a result of giving referring physicians and their patients a high level of confidence in the capabilities of our groups. We believe that we attract and retain leading radiation oncology groups and their physicians largely due to this business model, the benefits of scale and our commitment to clinical excellence. Our affiliated physician groups have a low physician turnover rate. Physicians typically remain with their group until retirement

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or relocation. Since 2006, we have successfully renewed every MSA that has come to term under substantially similar terms for an additional period of five or more years.

        Clinical Technological Equipment.    We provide the patients of our affiliated physician groups with a broad spectrum of radiation therapy options, including many advanced treatment options that are not otherwise available or offered by other providers in our markets. We believe that our treatment centers are equipped with clinical technological equipment, which allows our affiliated physician groups to provide cancer patients the highest quality of care through clinically advanced treatment options. We have an advanced base of technology, including IMRT capabilities in all but one of our treatment centers and IGRT capabilities in a majority of our treatment centers. We continue to support our affiliated physician groups in their adoption of next generation technologies, which we believe achieves superior clinical results and more attractive reimbursement levels. The early and continual adoption of cutting-edge technology by our affiliated physician groups has enabled sharing of this knowledge and best practices across our network quickly to drive superior clinical results. We believe our clinical technological equipment provides us with a competitive advantage in attracting new physician groups and is appealing to our referral sources, patients and payors.

        Market Leader in Targeted Geographic Regions.    Our network of 37 treatment centers is located in 37 markets and includes 15 treatment centers in California, 18 treatment centers in Florida and four treatment centers in Indiana. Based on our estimate of the number of freestanding, or non-hospital based, treatment centers in each of these states, we believe we operate the most centers in California and the second most in Florida. We believe these two states are two of the most attractive markets in the United States for cancer treatment providers due to the large and growing senior populations and the high incidence of cancer. In addition, in 2008, we acquired the assets of radiation oncology treatment centers in Ft. Wayne, Indiana and executed an MSA with a radiation oncology group in Northeast Indiana providing us with access to an attractive Midwest market. We believe our significant position in these markets creates strong barriers to entry. We also believe that this targeted geographic focus allows us to build a market presence that enables us to drive efficiencies through economies of scale and fixed cost leverage. Due to our robust regional footprint, we believe we have been successful in attracting leading physicians, marketing, negotiating favorable reimbursement rates with third-party payors, leveraging referral source relationships, achieving operational efficiencies and sharing highly skilled personnel among our treatment centers.

        Strong Track Record of Same-Center Operating Performance.    We have had significant success driving same-center operating performance improvement through leveraging our strong physician business model, proactive referral marketing programs, managed care contracting strategies, sharing knowledge, leadership and resources among our treatment centers and our physician and staff recruiting expertise. Furthermore, our willingness and ability to invest in and implement new state-of-the-art equipment has helped drive substantial same-center growth by enabling appropriate utilization of advanced technology which has resulted in more favorable reimbursement rates. Between fiscal years 2007 to 2009 same-center revenue and Adjusted EBITDA have grown at compounded annual growth rates of 2.3%. Given the generally stable radiation oncology reimbursement environment and our extensive experience in local markets, we have been able to show year-over-year growth as new acquisitions are made and new technologies are deployed at existing treatment centers.

        Growing Business with Strong and Predictable Cash Flow.    Between fiscal years 2007 and 2009, we have experienced net revenue, operating income and Adjusted EBITDA (as defined below under the caption "—Summary Consolidated Financial and Other Data") compound annual growth rates of 11.6%, 65.2% and 14.0%, respectively. We believe there are several underlying factors that contribute to the stability and growing performance of our business, including the aging of the United States population and resultant rise in cancer cases; increased utilization of next generation therapies; improvements in cancer detection and diagnoses; high physician retention due to long-term MSAs and

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the stable reimbursement outlook. These factors, combined with our moderate maintenance capital expenditures and minimal working capital needs, result in strong and predictable free cash flow generation.

        Strong and Diversified Business and Payor Mix.    Our affiliated physician groups have a broad range of payors and referral sources, and provide treatment across a wide spectrum of cancer diagnoses. Reimbursements are widely diversified among payor sources, including Medicare (39% of affiliated physician groups 2009 net revenue), Medicaid (5% of affiliated physician groups 2009 net revenue) and over 200 third-party and other payors (56% of affiliated physician groups 2009 net revenue) for the year ended December 31, 2009. This payor diversity mitigates exposure to possible unfavorable reimbursement trends by any one payor or payor class. Given that we are focused on a variety of cancer diagnoses, we believe we have a highly attractive treatment mix with no specific diagnosis representing more than 23% of our affiliated physician groups' net revenue. Our operations are further diversified by the breadth of our affiliated physician groups' referral sources, with the top ten referring physicians accounting for less than 7% of all referrals, which we believe provides further stability and predictability of future net revenue.

        Proven and Experienced Management Team.    We are led by a dedicated and highly experienced executive management team with significant expertise and industry knowledge. Our Chief Executive Officer, Chairman and top five executives have an average of more than 20 years of healthcare management experience. Over the past decade, our executive management team has successfully overseen continued growth and operational improvement in oncology centers. This team has developed a systematic approach to business operations and has a core competency in integrating newly acquired treatment centers.

Our Business Strategy

        We believe we are well positioned to leverage our physician business model, management expertise and infrastructure to increase our market share within our established geographic regions and selectively expand into new regions. Key elements of our business strategy include:

        Continuing Opportunity with Next Generation Therapies.    We believe the increased utilization of next generation technologies will continue to be a key driver of our growth. Life improving, next generation technologies, such as IMRT and IGRT, enable value-added treatments that drive better clinical results and are typically reimbursed at higher rates than CBT treatments. These next generation technologies are also expanding into new cancer diagnoses and expanded indications, thereby broadening our market opportunity. We intend to actively invest in and implement new technologies along with providing our affiliated physician groups the necessary education and best practices to help improve clinical results. By ensuring that these necessary resources are available to our affiliated physician groups' radiation oncologists, we believe they can generate significant incremental value from their existing base of business.

        Focusing on Quality of Care.    We believe that our focus on patient service enhances the quality of care provided and strengthens our relationships with referring physicians. We focus on minimizing the physical and psychological discomfort for patients with a comprehensive and comfortable care setting. We aim to enhance a patient's overall quality of life by providing technologically advanced radiation oncology treatment options, which deliver the necessary doses of radiation in a more targeted manner, thus minimizing the harm to healthy organs surrounding a tumor. Our treatment centers are generally located in convenient, community-based settings and are designed to deliver high-quality radiation therapy in a patient-friendly environment. Many centers offer support services designed to enhance the patient experience, such as support groups, psychological and nutritional counseling, and transportation assistance in a few cases.

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        Focusing on Same-Center Operating Performance.    We believe that a focus on census improvement, optimizing the utilization of new technologies, more efficient utilization of treatment center resources and talent management will result in the continued improvement of the financial performance of our existing treatment centers. We have, and believe we will continue to have, significant success driving census improvement through our proactive referral marketing programs, further advancements in web-based marketing, targeted physician recruitment and strategic payor negotiations. We have demonstrated an ability to enhance treatment center operations through our benchmarking programs, sharing of best practices and measuring performance with specified center metrics. Our benchmarking programs have been developed from historic center level staffing ratios based on the number of patients treated and are used to assess and monitor clinical operating efficiency and economic performance and to make changes in staffing to improve clinical and economic performance. Furthermore, our willingness and ability to invest in and implement new state-of-the-art equipment has helped drive same-center growth. Given the stable radiation oncology reimbursement environment and our extensive experience in local markets, we believe we will continue to show year-over-year growth at our existing treatment centers.

        Expanding by Acquisitions in Targeted Geographic Regions.    The radiation therapy market remains highly fragmented and we believe there are numerous acquisition opportunities in both our current and new markets. We evaluate opportunities to grow through a disciplined and selective acquisition process that focuses on cash flow generation. We believe we have been, and will continue to be, successful in the targeting and integration of acquisitions to expand our current footprint. Since the beginning of 2006, we have acquired 23 treatment centers, targeting markets that have attractive demographic trends where we can leverage operating costs and referral networks. In 2008, we acquired the assets of radiation oncology treatment centers in Fort Wayne, Indiana and executed a MSA with a radiation oncology group in Northeast Indiana, which moved us into an attractive new market where future potential acquisitions exist. Selectively targeting tuck-in acquisitions on an opportunistic basis has allowed us to acquire underperforming and undercapitalized treatment centers at attractive prices where we can focus on achieving operational synergies and cost savings. We have developed a systematic approach for integrating newly acquired treatment centers and have proven our ability to enhance affiliated physician group operations through benchmarking programs, sharing of best practices, developing targeted performance metrics across treatment centers and our willingness to invest and implement new technologies. To date, we have achieved significant improvement in the financial performance of our acquired treatment centers.

        Developing New Treatment Centers and Pursuing Additional Joint Venture Opportunities.    We believe that developments in our current markets have the potential to provide significant near-term net revenue and Adjusted EBITDA growth for us, with moderate capital expenditure requirements. Our strategy is to further penetrate existing and contiguous markets that we believe offer an attractive opportunity for significant growth. We plan to open treatment centers in proximity to established treatment centers where requisite patient demand and referral source relationships exist. We believe this strategy also allows us to accelerate new treatment center growth by leveraging the existing reputation of our radiation oncologists within our affiliated physician groups, their referral network and our infrastructure. We also focus on joint-venture opportunities to expand our service and technology offering and to expand strategically.

Our Services

        Radiation therapy treatments are primarily performed with a linear accelerator, or linac, which uses high-energy photons or electrons to destroy the tumor. Courses of treatment typically last from four to nine weeks. In advance of the actual treatments, a typical patient is provided the following services: (i) the patient is examined, counseled and advised of treatment options by a radiation oncologist; (ii) the agreed upon course of treatment is planned by a physicist under the oncologist's

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direction; (iii) a trained dosimetrist designs and verifies that the treatment plan's radiation dose and targeting are properly calibrated in the software that controls the linac; (iv) a trained radiation therapy technologist assists the patient to, and positions the patient on, the linac and (v) the technologist verifies the planned dose and beam target before delivering the radiation oncology treatment. Through the use of our treatment centers and equipment, our affiliated physician groups offer a wide array of radiation oncology treatments to cancer patients. The radiation oncologists maintain full control over the provision of medical services at our treatment centers while we provide the non-medical business functions, such as technical staff recruiting, marketing, managed care contracting, receivables management and compliance, purchasing, information systems, accounting, human resource management and physician succession planning. Many of our radiation oncology treatment centers also offer support services designed to enhance the patient experience such as support groups, psychological and nutritional counseling and transportation assistance.

        The majority of individuals who undergo radiation therapy for cancer are treated with external beam radiation therapy. External beam radiation therapy involves exposing the patient to an external source of radiation through the use of special equipment that directs radiation at the cancer. Equipment utilized for external beam radiation therapy varies as some are better for treating cancers near the surface of the skin and others are better for treating cancers deeper in the body. A linac, the common piece of equipment used for external beam radiation therapy, can create both high-energy and low-energy radiation. High-energy radiation is used to treat many types of cancer while low-energy radiation is used to treat some forms of skin cancer. A course of external beam radiation therapy typically ranges from four to nine weeks. Treatments generally are given to a patient once each day with each session lasting for approximately 15 to 20 minutes.

        Another category of radiation therapy is internal radiation therapy, which involves the placement of the radiation source inside the body. The source of the radiation (such as radioactive iodine) is sealed in a small holder, known as an implant, and is introduced through the aid of thin wires or plastic tubes. Internal radiation therapy places the radiation source as close as possible to the cancer cells and delivers a higher dose of radiation in a shorter time than is possible with external beam treatments. Implants may be removed after a short time or left in place permanently (with the radioactivity of the implant dissipating over a short time frame). Temporary implants may be either low-dose rate or high-dose rate. Low-dose rate implants are left in place for several days while high-dose rate implants are removed after a few minutes.

        Each of our treatment centers is designed to provide a comprehensive array of outpatient programs necessary to treat a cancer patient with radiation therapy. Of our 37 treatment centers, 33 are equipped with a linac that we own or lease. We have an advanced base of technology, including IMRT capabilities in all but one of our treatment centers and IGRT capabilities in a majority of our treatment centers. Our treatment centers provide a wide variety of therapies, however, our primary therapies are:

    Conventional Beam Therapy:    The dominant form of radiation oncology treatment, which may result in relatively high radiation exposure with limited precision, CBT enables radiation oncologists to utilize linac machines to direct radiation beams at the tumor location. After clinical treatment planning is completed, the final configuration of the treatment parameters in the linacs is tested on the patient using a computerized fluoroscopic simulator or by means of computer simulation. The simulator is employed to test the prescribed coordinates of the beam for effective treatment and minimization of exposure (and, therefore, risk of injury) of healthy tissue and critical body structures. Before radiation is administered, custom protective blocks are designed and shaped for each patient to ensure that non-targeted tissue is blocked as thoroughly as possible from radiation. These services are provided by all of our centers.

    Intensity Modulated Radiation Therapy:    This state-of-the-art cancer treatment method utilizes computer-controlled x-ray accelerators to deliver precise doses of radiation that conform to the

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      three dimensional shape of the tumor by modulating the intensity of an external beam. By targeting tumors more precisely than is possible with CBT, IMRT can deliver higher radiation doses directly to cancer cells while sparing surrounding healthy tissue. These services are provided by all of our centers.

    Image Guided Radiation Therapy:    This treatment combines precise three dimensional imaging from computerized tomography scanning or precise x-ray with highly targeted radiation beams via IMRT. This technology allows clinicians to locate a tumor target prior to a radiation oncology treatment, dramatically reducing the need for large target margins, which have traditionally been used to compensate for errors in localization. As a result, the amount of healthy tissue exposed to radiation can be reduced, minimizing the incidence of side effects. The clinical application for expanded treatment sites using IGRT includes the pancreas, lung and liver. These services are provided by 21 of our centers.

        In addition to the above mentioned therapies, we also offer other advanced services at various of our centers, including:

    Positron Emission Tomography—Computed Tomography:    Involves the injection of radioactive isotopes into a patient to obtain images of metabolic physiologic processes. The application of PET in the detection of cancer has become significant in the last two years, as it is the first diagnostic procedure that can detect and monitor a patient's metabolic malignancies. PET/CT provides information that is not available with other medical imaging and combines the metabolic cancer cells detection of PET with an anatomical picture of the tumor on a CT. These services are provided by seven of our centers.

    High Dose Rate Brachytherapy:    This treatment involves the use of radioactive isotopes placed directly in contact with cancer tissues, which are then removed when a lethal dose of radiation has been delivered to the cancer. These services are provided by 17 of our centers.

    Simulation, Dosimetry and Three Dimensional Conformal Treatment Planning:    These procedures involve the use of a computer scan, allowing tumors to be visualized in a three dimensional format. This makes it possible to treat the cancer volume with very narrow margins, which greatly decreases the amount of normal tissue irradiated and treatment side effects. This technique also permits the delivery of a larger lethal dose of radiation to the cancer. These services are provided by all of our centers.

    Prostate Implantation:    Involves the use of palladium and iodine "seeds" and other radioactive implants (radioactive isotopes) in the treatment of prostate cancer while sparing the nearby organs and structures. These services are provided by 19 of our centers.

    Stereotactic Radiosurgery:    Enables delivery of concentrated, precise, high dose radiation beams to localized tumors. Historically, stereotactic radiosurgery was used primarily for contained lesions of the brain but recent advancements in imaging technologies have allowed more types of tumors to be targeted, therefore broadening the use of stereotactic radiosurgery for extra-cranial cancers. These services are provided by five of our centers.

    Cyber Knife:    A SRS device with a linac mounted on a robotic arm. Through the use of image guidance cameras, the cyber knife system locates the position of the tumor. The linac attached to the robotic arm delivers multiple beams of radiation that converge at the tumor site. Thus, the tumor receives a concentrated dose of radiation while minimizing exposure to surrounding normal tissue. With sub-millimeter accuracy, the cyber knife is used to treat vascular abnormalities, tumors and cancers of the body. These services are provided by our Southside joint venture.

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Our Operations

        We have 12 years of experience operating radiation oncology treatment centers and have developed an integrated operating model. We operate all of our treatment centers pursuant to MSAs between affiliated physician groups and our wholly owned subsidiaries. Our MSAs generally require us to provide our treatment centers with technical staff recruiting, marketing, managed care contracting, receivables management, compliance, purchasing, information systems, accounting, human resource management and physician succession planning. Pursuant to our MSAs, our management services revenues include compensation by the affiliated physician groups for expenses incurred in operating our treatment centers plus a fee based on the earnings of our affiliated physician groups, with the exception of one MSA in California, under which we earn our management fee based on a fixed percentage of the affiliated physician group's net revenue. As such, the operating costs of the treatment centers are our responsibility. Since 2006, we have successfully renewed every MSA that has come to term under substantially similar terms for an additional period of five or more years.

        Treatment Center Operations.    Our treatment centers are designed to deliver high-quality radiation therapy in a patient-friendly environment. Each of our treatment centers is equipped to provide a comprehensive array of outpatient programs necessary to treat a cancer patient with radiation therapy. We have an advanced base of technology, including IMRT capabilities in all but one of our treatment centers and IGRT capabilities in a majority of our treatment centers. In addition, our physician groups offer other advanced services, including PET/CT, Cyber Knife and Stereotactic Radiosurgery.

        Our treatment centers generally range from 4,000 to 12,000 square feet and typically have a staff of between eight and 15 people, depending on patient volume. Our treatment centers generally include a patient waiting room, dressing rooms, exam rooms and hospitality rooms, all of which are designed to minimize patient discomfort. The usual complement of treatment center staff members includes radiation oncologists, physicists, dosimetrists, radiation therapy technologists, oncology nurses, medical assistants and receptionists. We employ all of these individuals with the exception of radiation oncologists, which are employed by our affiliated physician groups. Given the relative geographic proximity of many of our centers, we believe we are able to efficiently share our highly skilled personnel, thereby avoiding costly duplication of services and staffing shortages.

        Cancer patients referred to our treatment centers are provided with an initial consultation, which includes an evaluation of the patient's condition to determine if radiation therapy is appropriate, followed by a discussion of the effects of the therapy. If radiation therapy is selected as a method of treatment, the clinical treatment team engages in clinical treatment planning using x-rays, CT imaging, ultrasound, PET imaging, dosimetry and three dimensional conformal treatment planning in order to locate the tumor and determine the best treatment methodology and regimen.

        Standardized Operating Procedures.    We employ methods by which we share knowledge and best practices across our network quickly to drive superior clinical results. In addition, we have developed standardized operating procedures for our treatment centers in order to ensure that our professionals, including the radiation therapists, physicists, dosimetrists, engineers and oncology nurses that support the physicians, are able to operate uniformly and efficiently. Our manuals, policies and procedures are refined and modified as needed to increase productivity and efficiency and to provide for the safety of our employees and patients. We believe that our standard operating procedures facilitate the interaction of employees and permit the sharing of our highly skilled personnel among our treatment centers.

        Referral Source and Business Development.    Cancer patients are primarily referred by medical oncologists, breast surgeons, general surgeons, urologists, family practice physicians and internal medicine physicians in addition to other physician specialties. Our affiliated radiation oncologists actively develop their referral base by establishing strong clinical relationships with referring physicians.

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Patient referrals to a particular radiation oncologist or his/her group may be influenced by managed care organizations with which we maintain contractual agreements. Additionally, we have a business development team with dedicated marketing and graphics professionals. Our business development team conducts a proactive referral marketing and physician outreach program. Our business development team works closely with our affiliated radiation oncologists and local marketing specialists to attract new referral sources through a combination of educating physicians, targeted advertising and relationship building. Moreover, proactive communication with referral sources throughout the treatment process keeps all parties informed and engaged to facilitate effective results.

        Recruitment, Retention and Development of Highly Skilled Professionals.    We believe that our patient-focused staff and culture of providing extraordinary patient experiences is the foundation of our success. We believe that our highly skilled professionals give us a competitive advantage as we capitalize on our regional presence by sharing personnel and best practices across our network of treatment centers. We have positioned ourselves in our industry as the company of choice for radiation oncologists, and the employer of choice for our physicists, radiation therapy technologists, dosimetrists, nurses and other treatment center support staff. The ability to recruit talented employees allows our affiliated physician groups to effectively treat our patients, improve referral source relationships and pursue our growth strategies. We attract and retain employees by offering a culture of excellence, the ability to work in state-of-the-art treatment centers, continuing education, competitive pay, incentive programs and opportunities for advancement. We conduct regular talent management programs that utilize the experience and know-how of our employees. We use our targeted physician succession planning and recruitment programs to strengthen and maintain referral source relationships. Our affiliated physician groups have low physician turnover rates. Physicians typically remain with their group until retirement or relocation.

        Payor Relationships.    Our affiliated physician groups receive payments for their services and treatments rendered to patients covered by Medicare, Medicaid, third-party payors and self-pay patients. Most of our treatment centers' revenue from third-party payors is from managed care organizations and is attributable to contracts we have negotiated with them. We believe that the scale of our treatment center network improves our ability to negotiate more attractive agreements with these payors. These agreements specify fixed fees for services provided at our treatment centers, and give the managed care organization the ability to market access to our affiliated physician groups and physicians to their members. This is a benefit to the managed care organization, and also gives our affiliated physician groups access to a larger pool of potential patients.

        Coding, Billing and Receivable Management.    Our affiliated physician groups provide radiation therapy services under a significant number of different professional and technical codes, which determine reimbursement. Our affiliated physician groups rely on us to provide the complex coding, billing and collections process. Our Chief Compliance Officer, Director of Billing and professional coders work together to establish coding and billing rules and procedures to be utilized at our radiation oncology treatment centers providing consistency across centers. In each radiation oncology treatment center, trained staff administer these rules in coordination with the technical personnel located at each treatment center. To provide an external check on the integrity of the coding process, we conduct chart audits and have also retained the services of a third-party consultant to review and assess our coding procedures and processes on a periodic basis. Our billing and collection functions are conducted at two centralized locations.

        Compliance Program.    We have a compliance program that is consistent with guidelines issued by the Department of Health and Human Services. As part of the compliance program, we have appointed a Chief Compliance Officer who is a member of our executive management team. Our program includes an anonymous toll-free hotline reporting system through a third party vendor, annual compliance training programs, auditing and monitoring programs, and a disciplinary system to enforce

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adherence to our compliance program and related policies. As part of our compliance program, we screen employees through applicable federal and state databases of sanctioned individuals under governmental healthcare programs. Auditing and monitoring activities include the review of claims preparation and submission as well as review of proper coding, billing and documentary back-up material in accordance with reimbursement regulations. We also distribute periodic compliance alerts and provide the members of our affiliated physician groups with compliance training on an ongoing basis.

        Management Information Systems.    We utilize centralized management information systems to monitor data related to each treatment center's operations and financial performance. Our management information systems are used to track patient data, physician productivity and coding, and billing functions. Our management information systems also provide monthly budget analyses, financial comparisons to prior periods and comparisons among treatment centers, thus enabling management to evaluate the individual and collective performance of our treatment centers. We periodically review our management information systems for possible refinements and upgrading. Our management information systems personnel install and maintain our system hardware, develop and maintain specialized software and are able to integrate the systems of the groups we acquire.

        Maintenance and Physics Functions.    We employ or contract with a licensed physicist at each treatment center to assist us and our affiliated physician groups with acquisition, installation, calibration, use and maintenance of our linacs and other related equipment. All patient treatment equipment is under the direct oversight of the assigned physicists. We also utilize the services of the original manufacturers of our equipment and other third-party vendors to perform preventive maintenance, repairs, installation and de-installation and redeployment of our linacs. We believe this helps to ensure the quality of service provided by our affiliated physician groups, the integrity of our equipment, maximizes equipment utilization and minimizes equipment downtime. Our physicists monitor and test the accuracy of each of our linacs on a regular basis in accordance with applicable regulations or more frequently, if necessary, to ensure that our linacs are uniformly and properly calibrated.

        Clinical Research.    We believe that a well-managed clinical research program enhances the reputation of our physician groups. We maintain information on over 30,000 patients. This data can be used by the radiation oncologists and others to research treatment patterns and potentially improve patient care.

Real Property

        Our executive and administrative offices are located in approximately 13,000 square feet of office space in Englewood, Colorado under a lease that expires in 2013. Our California national service center is located in approximately 7,700 square feet of office space in Irvine, California under a lease that expires in 2012. We also lease office space approved for medical use to house our treatment centers in the various communities where we operate. Our radiation oncology treatment centers generally range in size from 4,000 to 12,000 square feet and are typically located on hospital campuses in close proximity to referral sources. All of our treatment centers are located in office space approved for medical use, including three locations where certain of our directors, executive officers and equityholders have an ownership interest. These leases expire at various dates between 2011 and 2024 with renewal options of up to 30 years. Our current complement of offices and treatment centers meets our present requirements and our plans for continued growth of operations. However, where additional capacity is necessary at a treatment center, we will seek to acquire additional space where possible.

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        The following table shows a list of our 37 radiation oncology treatment center locations:

Northern California Treatment Centers   Northern Florida Treatment Centers
Lodi   Jacksonville
Modesto   Jacksonville Beach
Stockton   Orange Park
    Palatka
Central California Treatment Centers   St. Augustine
Salinas    
San Luis Obispo   Central Florida Treatment Centers
Santa Cruz   Beverly Hills
Santa Maria   Bradenton (East)
Simi Valley   Bradenton (West)
Templeton   Brandon
Thousand Oaks   Ocala
Ventura   Sebring
Westlake Village   Sun City Center
    Tampa
Southern California Treatment Centers   Zephyrhills
Anaheim    
Fountain Valley   Southern Florida Treatment Centers
Mission Viejo   Englewood
    Port Charlotte
Indiana Treatment Centers   Sarasota
Angola   Venice
Ft. Wayne    
Parkview    
Warsaw    

        In addition to the treatment centers listed above, we have limited scope arrangements at two additional facilities in Florida and one facility in California as well as mobile PET/CT capabilities at five locations in Florida.

Employees

        As of September 30, 2010, we employ approximately 450 individuals. None of our employees are party to a collective bargaining agreement and we consider our relationships with our employees to be good. We believe we provide competitive wages and benefits and offer our employees a professional work environment that we believe helps us recruit and retain the staff we need to operate our treatment centers. As of September 30, 2010, we were also affiliated with 14 physician groups that employed approximately 70 radiation oncologists. We do not employ radiation oncologists in part due to laws and regulations placing a prohibition on such employment in one state in which we currently operate.

Insurance

        We are subject to claims and legal actions in the ordinary course of business. To cover these claims, we maintain professional liability insurance for our non-physician clinical professionals, as well as general liability and property insurance in amounts we believe are sufficient for our operations. Our professional liability insurance provides primary coverage on a claims-made basis per incident and in annual aggregate amounts. In addition, we currently maintain umbrella coverage, which provides additional coverage for general liability and automobile liability claims. We also maintain directors and officers liability, employer practices liability, and fiduciary liability insurance.

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Competition

        The radiation therapy market is highly fragmented and our business is highly competitive. The principal competitive factors are patient service and satisfaction, quality of care, radiation oncologists' experience and expertise, strength of operational systems, access to advanced treatment procedures and planning techniques, ease of physical access, breadth of managed care contract coverage, strength of patient referrals, management strength and regional network market share. Several sources of competition exist, including sole practitioners, single and multiple specialty physician groups, hospitals and other operators of radiation therapy centers.

        There are approximately 2,200 radiation oncology centers in the United States, of which approximately 1,000 are freestanding, or non-hospital based, treatment centers. The radiation therapy market is highly fragmented with the top three outpatient radiation oncology providers accounting for approximately 25% of all free-standing treatment centers.

Legal Proceedings

        We are from time to time party to legal proceedings which arise in the normal course of business. We are not currently involved in any material litigation, the outcome of which would, in management's judgment based on information currently available, have a material adverse effect on our financial condition, results of operations or cash flows.

Regulation

        The healthcare industry is highly regulated and the federal and state laws that affect our business are significant. Federal law and regulations are based primarily upon the Medicare and Medicaid programs, each of which is financed, at least in part, with federal money. State jurisdiction is based upon the state's authority to license certain categories of healthcare professionals and providers and the state's interest in regulating the quality of healthcare in the state, regardless of the source of payment. The significant areas of federal and state regulatory laws that could affect our ability to conduct our business include those regarding:

    the Medicare and Medicaid programs;

    false and other improper claims;

    the Health Insurance Portability and Accountability Act of 1996, or HIPAA;

    civil and monetary penalties law;

    privacy, security and code set regulations;

    anti-kickback laws;

    the Stark Law and other self-referral and financial inducement laws;

    fee-splitting;

    corporate practice of medicine;

    anti-trust; and

    licensing.

        A violation of these laws could result in civil and criminal penalties, the refund of monies paid by government and/or private payors, exclusion of physicians, the affiliated physician groups or us from participation in Medicare and Medicaid programs and/or loss of physician license to practice medicine. We believe we exercise care in our efforts to structure our arrangements with our affiliated physician groups to comply with applicable federal and state laws. We have a Corporate Compliance Program

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consistent with relevant requirements set forth by the Office of the Inspector General, or OIG, and the Department of Health and Human Services, or HHS. Although we believe we are in material compliance with all applicable laws, these laws are complex and a review of our affiliated physician groups by a court, or law enforcement or regulatory authority could result in an adverse determination that could harm our business. Furthermore, the laws applicable to us are subject to change, interpretation and amendment, which could adversely affect our ability to conduct our business.

        We estimate that approximately 43%, 45%, 50%, 46% and 44% of our affiliated physician groups' net revenue for the nine months ended September 30, 2009 and 2010 and for fiscal years 2007, 2008 and 2009, respectively, consisted of reimbursements from Medicaid and Medicare government programs. In order to be certified to participate in the Medicare and Medicaid programs, each provider must meet applicable HHS regulations and requirements relating to, among other things, the type of facility, operating policies and procedures, maintenance equipment, personnel, standards of medical care and compliance with applicable state and local laws. Our affiliated physician groups and their physicians are certified to participate in the Medicare and Medicaid programs.

Federal Law

        The federal healthcare laws apply in any case in which we are providing an item or service that is reimbursable under Medicare or Medicaid. The principal federal laws that affect our business include those that prohibit the filing of false or improper claims with the Medicare or Medicaid programs, those that prohibit unlawful inducements for the referral of business reimbursable under Medicare or Medicaid and those that prohibit the provision of certain services by a provider to a patient if the patient was referred by a physician with which the provider has certain types of financial relationships.

        False and Other Improper Claims.    The federal False Claims Act permits the government to fine us if we knowingly submit, or participate in submitting, any claims for payment to the federal government that are false or fraudulent, or that contain false or misleading information. A provider or billing agent can be found liable not only for submitting false claims with actual knowledge, but also for doing so with reckless disregard or deliberate ignorance of such falseness. In addition, knowingly making or using a false record or statement to receive payment from the federal government is also a violation. If we are ever found to have violated the False Claims Act, we could be required to make significant payments to the government (including damages and penalties in addition to the reimbursements previously collected) and could be excluded from participating in Medicare, Medicaid and other federal healthcare programs. Knowingly making, using or causing to be used claims that are false or fraudulent carries a penalty of up to $50,000 for each false record or statement.

        Under the False Claim Act's "whistleblower" provisions, a private individual is permitted to bring an action on behalf of the government alleging that the defendant has defrauded the government. After the individual has initiated the lawsuit, the government must decide whether to intervene (and become the primary prosecutor) or decline to join, in which case the individual may choose to pursue the case alone and retain primary control over the prosecution. If the litigation is successful, the individual is entitled to a percentage of whatever the government recovers, ranging from 15-30%, depending on whether the government intervened and a host of other factors. Recently, the number of suits brought against healthcare providers by individuals has increased dramatically. Indeed, under the Deficit Reduction Act of 2005, states are being encouraged to adopt legislation similar to the federal False Claims Act to establish liability for the submission of fraudulent claims to the state Medicaid program. Even where a whistleblower action is dismissed with no monetary judgment, we may incur substantial legal fees and other costs relating to an investigation. Liability under the False Claims Act would adversely affect our financial performance and our ability to operate our business.

        While the criminal statutes generally are reserved for instances evidencing fraudulent intent, the civil and administrative penalty statutes are being applied by the federal government in an increasingly

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broad range of circumstances. Examples of the type of activity giving rise to liability for filing false claims include, but are not limited to:

    failure to comply with the technical billing requirements applicable to our Medicare and Medicaid business (e.g., mis-coding of services and billing for services not rendered);

    failure to comply with the Anti-Kickback Law and/or Stark Law (as described in more detail below);

    failure to comply with the Medicare physician supervision requirements applicable to the services our affiliated physician groups provide, or the Medicare documentation requirements concerning such physician supervision; and

    the past conduct of the companies we have acquired.

        Additionally, the federal government takes the position that a pattern of claiming reimbursement for unnecessary services violates these statutes if the claimant should have known that the services were unnecessary. The federal government also takes the position that claiming reimbursement for services that are substandard is a violation of these statutes if the claimant should have known that the care was substandard. Criminal penalties also are available in the case of claims filed with private insurers if the federal government shows that the claims constitute mail fraud or wire fraud or violate a number of federal criminal healthcare fraud statutes.

        Medicare carriers and state Medicaid agencies also have certain fraud and abuse authority. Private insurers may also bring actions under false claim laws. In addition, the federal government has engaged a number of nongovernmental-audit organizations to assist it in tracking and recovering false claims for healthcare services. The illegal practices targeted include:

    billing for tests/procedures not performed;

    billing for tests/procedures not medically necessary or not ordered by the physician;

    "upcoding" tests/procedures to realize higher reimbursement than what is owed;

    offering inducements to physicians to encourage them to refer patients; and

    submitting duplicate billings.

        Further, on May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009, which greatly expanded the types of entities and conduct subject to the federal False Claims Act. The Fraud Enforcement and Recovery Act appropriated over $500 million for federal law enforcement authorities to combat financial fraud in 2010 and 2011.

        Most recently, in March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the PPACA, also known as health care reform. PPACA, among other things, heightens potential liability under the federal False Claims Act by allowing more whistleblower lawsuits alleging violations through a narrowing of the triggers for the public disclosure bar. The public disclosure bar, which previously served to protect the health care industry from opportunistic whistleblower lawsuits, prohibits whistleblower lawsuits based on information that has already been publicly disclosed in certain ways. PPACA also amended the False Claims Act so that the public disclosure bar is not jurisdictional and does not require dismissal if the government opposes dismissal. Finally, PPACA relaxes the requirement that the whistleblower, where there has been a public disclosure, have direct knowledge of the action and merely requires that the whistleblower have independent knowledge which adds materially to the publicly disclosed allegations. While the full impact of these changes is not yet known, they are predicted to increase whistleblower lawsuits. If an individual were to file such a suit against us, even if without merit, we could incur significant legal fees in investigating and defending the action.

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        Further, the PPACA now requires that overpayments be returned within 60 days of identification of the overpayment or the date a corresponding cost report is due (whichever is later), along with a written explanation of the reason for the overpayment. Any overpayment retained after this deadline will now be considered an "obligation" for purposes of the False Claims Act and subject to fines and penalties.

        In addition to the federal False Claims Act, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or the HITECH Act, created new federal statutes designed to combat fraud and false statements in the healthcare context. The false statement provision prohibits knowingly and willingly falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government sponsored programs.

        We believe our billing and documentation practices comply with applicable laws and regulations in all material respects. Our Chief Compliance Officer and Director of Billing along with our professional coders, work together to establish coding and billing rules and procedures to be utilized at our radiation oncology treatment centers and provide consistency across centers. Billing and collection functions are conducted at two centralized locations. In each radiation oncology treatment center, trained staff are in charge of executing these rules and procedures with the technical personnel located at each treatment center. To provide an external check on the integrity of the coding process, we conduct chart audits and have also retained the services of a third-party consultant to review and assess our coding procedures and processes on a periodic basis. Although we monitor our billing practices for compliance with applicable laws, such laws are very complex and we might not have sufficient regulatory guidance to assist us in our interpretation of these laws. A determination that we have violated these laws could result in significant civil or criminal penalties which could harm our business. We and/or our affiliated physician groups could also become the subject of a federal or state civil or criminal investigation or action, could be required to defend the results of such investigation and be subjected to possible civil and criminal fines. We and/or our affiliated physician groups could also be sued by private payors and be excluded from Medicare, Medicaid or other federally funded healthcare programs.

        HIPAA.    In addition to creating civil and criminal liability in connection with the federal statutes discussed above, HIPAA also establishes uniform standards governing the conduct of certain electronic health care transactions and protecting the security and privacy of individually identifiable health information maintained or transmitted by certain covered entities, including health care providers.

        HIPAA includes statutory provisions which have authorized HHS to issue regulations and standards for electronic transactions regarding the privacy and security of healthcare information which apply to us and our treatment centers. The HIPAA regulations include:

    privacy regulations that protect individual privacy by limiting the uses and disclosures of individually identifiable health information and creating various privacy rights for individuals;

    security regulations that require covered entities to implement administrative, physical and technological safeguards to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form; and

    transaction standards regulations that prescribe specific transaction formats and data code sets for specified electronic healthcare transactions.

        If we fail to comply with the HIPAA regulations, we and/or our affiliated physician groups may be subject to civil monetary penalties and, in certain circumstances, criminal penalties. The American Recovery and Reinvestment Act of 2009, commonly referred to as the economic stimulus package,

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included the HITECH Act which made a variety of changes to HIPAA, including the creation of a multi-tier approach for civil monetary penalties applicable to HIPAA violations:.

    In the absence of knowledge of a violation occurring before February 18, 2009, the civil monetary penalty applicable to a covered entity shall be $100 per violation not to exceed $25,000 for all identical violations in a calendar year. For violations occurring on or after February 18, 2009, the penalty can range from $100 to $50,000 per violation not to exceed $1.5 million for all identical violations in a calendar year;

    If the violation occurred from reasonable cause but not willful neglect, the penalty shall be at least $1,000 to $50,000 per violation not to exceed $1.5 million for all identical violations in a calendar year;

    If the violation occurred from willful neglect but was corrected within 30 days, the penalty shall be at least $10,000 to $50,000 per violation not to exceed $1.5 million for all identical violations in a calendar year; and

    If the violation occurred from willful neglect and was not corrected within 30 days, the penalty shall be at least $50,000 per violation not to exceed $1.5 million for all identical violations in a calendar year.

        The HIPAA regulations related to privacy establish comprehensive federal standards relating to the use and disclosure of individually identifiable health information or protected health information, PHI. The privacy regulations establish limits on the use and disclosure of protected health information, provide for patients' rights, including rights to access, request amendment of, and receive an accounting of certain disclosures of protected health information and require certain safeguards to protect protected health information. For example, HHS has indicated that cells and tissues are not protected health information, but that analyses of them are protected. HHS has stated that if a person provides cells to a researcher and tells the researcher that the cells are an identified individual's cancer cells, that accompanying statement is protected health information about that individual. In addition, each covered entity must contractually bind individuals and entities that furnish services to the covered entity or perform a function on its behalf, and to which the covered entity discloses protected health information, to restrictions on the use and disclosure of that information. In general, the privacy regulations do not supersede state laws that are more stringent or grant greater privacy rights to individuals. Thus, we must reconcile the privacy regulations and other state privacy laws. We have implemented extensive policies and procedures designed to protect our affiliated physician groups' patients' privacy and have designated a Privacy Officer to comply with these regulations. We believe our operations are in material compliance with the privacy regulations, but there can be no assurance that the federal government would determine that we are in compliance.

        The HIPAA security regulations establish detailed requirements for safeguarding protected health information that is electronically transmitted or electronically stored. Some of the security regulations are technical in nature, while others may be addressed through policies and procedures. We have implemented extensive policies and procedures designed to protect our affiliated physician groups' patients' health information and have appointed a Security Officer to comply with these regulations. Nevertheless, there can be no assurances that the government would deem us to be in full compliance with the security regulations.

        The HIPAA transaction standards regulations are intended to simplify the electronic claims process and other healthcare transactions by encouraging electronic transmission rather than paper submission. These regulations provide for uniform standards or data reporting, formatting and coding that we must use in certain transactions with health plans. We have implemented or upgraded our computer and information systems as we believe necessary to comply with our transaction standards regulations.

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Nevertheless, there can be no assurance that the federal government would deem us to be in full compliance.

        The HITECH Act also dramatically expanded, among other things: (1) the scope of HIPAA to include "business associates" who receive or obtain protected health information, or PHI, in connection with providing a service to the covered entity; (2) substantive security and privacy obligations, including notification requirements to affected individuals and others of breaches of unsecured PHI; and (3) restrictions on marketing communications and creation of a prohibition on covered entities or business associates from receiving remuneration in exchange for PHI.

        We are currently unable to estimate the total cost of complying with these regulations and the consequences to our business. Although we believe that we are in material compliance with the applicable HIPAA standards, rules and regulations, as amended by the HITECH Act, if we fail to comply with these standards, we could be subject to criminal penalties and civil sanctions.

        In addition to federal regulations issued under HIPAA, some states have enacted privacy and security statutes and/or regulations that are, in some cases, more stringent than those issued under HIPAA. In those cases, it may be necessary to modify our operations and procedures to comply with the more stringent state laws, which may entail significant and costly changes for us. We believe that we are in compliance with such state laws and regulations. However, if we fail to comply with applicable state laws and regulations, we could be vulnerable to the imposition of additional sanctions.

        Federal Anti-Kickback Law.    Federal law commonly known as the "Anti-Kickback Statute" prohibits the knowing and willful solicitation, receipt, offer or provision of remuneration (direct or indirect, overt or covert, in cash or in kind) which is intended to induce:

    the referral of an individual for a service for which payment may be made by Medicare and Medicaid or certain other federal healthcare programs; or

    the ordering, purchasing, leasing or arranging for, or recommending the purchase, lease or order of, any service or item for which payment may be made by Medicare, Medicaid or certain other federal healthcare programs.

        The definition of "remuneration" has been broadly interpreted to include anything of value. This may include, for example, gifts, discount, credit arrangements, waivers of payments, the furnishing of supplies or equipment and providing anything at less than its fair market value. Nevertheless, under the "one purpose test," courts have found prohibited remuneration which is offered or paid for otherwise legitimate purposes if the circumstances show that one purpose of the arrangement is to induce referrals. Even bona fide investment interests in a healthcare provider may be questioned under the Anti-Kickback Statute if the government concludes that the opportunity to invest was offered as an inducement for referrals. The penalties for violations of this law are severe and include criminal penalties and civil sanctions including fines and/or imprisonment and exclusion from the Medicare and Medicaid programs.

        As a result of the passage of PPACA, a person no longer needs to have actual knowledge of the Anti-Kickback Statute nor the specific intent to violate the statute in order to be subject to its broad penalties. This reduced intent requirement overrides the higher "knowingly and willfully" intent requirement adopted by certain courts and could allow prosecutors to base anti-kickback charges on apparently legitimate practices by individuals or companies acting without any intent to violate the law or knowledge that they were doing so. PPACA also amends the Anti-Kickback Statute to explicitly provide that a violation of the statute constitutes a false or fraudulent claim under the federal False Claims Act, discussed above. Finally, PPACA updates the definition of a "health care fraud offense" in the federal criminal code to include violations of, among other laws, the Anti-Kickback Statute. This change will enable increased enforcement of alleged violations of the Anti-Kickback Statute.

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        In recognition of the practical reality that the Anti-Kickback Statute may prohibit innocuous or beneficial arrangements within the healthcare industry, the U.S. Department of Health and Human Services issued regulations in July of 1991 that create a series of "safe-harbors." These regulations set forth certain provisions which, if met in form and substance, assure health care providers and other parties that they will not be prosecuted under the Anti-Kickback Statute. Failure to meet the requirements of a safe harbor, however, does not necessarily mean a transaction violates the Anti-Kickback Statute.

        There are several aspects of our relationships with physicians to which the Anti-Kickback Statute may be relevant. As billing agents for our affiliated physician groups, we claim reimbursement from Medicare or Medicaid for services that are ordered, in some cases, by our radiation oncologists who hold shares, or options to purchase shares, of our common stock. In addition, other physicians who become investors in us pursuant to or after the private note offering may refer patients to us for those services. Although neither the existing nor potential investments in us by physicians qualify for protection under the safe harbor regulations, we do not believe that these activities fall within the type of activities the Anti-Kickback Statute was intended to prohibit. We also claim reimbursement from Medicare and Medicaid for services referred from other healthcare providers with whom we have financial arrangements. While we believe that these arrangements generally fall within applicable safe harbors or otherwise do not violate the law, there can be no assurance that the government will agree, in which event we could be harmed.

        We believe our operations are in material compliance with applicable Medicare and fraud and abuse laws and seek to structure arrangements to comply with applicable safe harbors where reasonably possible. Even though we continuously strive to comply with the requirements of the Anti-Kickback Statute, liability may still arise because of the intentions or actions of the parties with whom we do business. In addition, we may have Anti-Kickback liability based on arrangements established by the entities we have acquired if any of those arrangements involved actions, even in the absence of specific intent, to exchange remuneration for referrals, as prohibited by the Anti-Kickback Statute. If our arrangements were found to be illegal, we, our affiliated physician groups and/or the individual physicians would be subject to civil and criminal penalties, including exclusion from the participation in government reimbursement programs, and our arrangements would not be legally enforceable, which could materially adversely affect us.

        The OIG issues advisory opinions that provide advice on whether proposed business arrangements violate the anti-kickback law. In Advisory Opinion 98-4, the OIG addressed physician practice management arrangements. In Advisory Opinion 98-4, the OIG found that administrative services fees based on a percentage of affiliated physician group revenue may violate the Anti-kickback Statute. This Advisory Opinion suggests that OIG might challenge certain prices below Medicare reimbursement rates or arrangements based on a percentage of affiliated physician group revenue. We believe that the fees we charge for our services under our MSAs are commensurate with the fair market value of the services. While we believe our arrangements are in material compliance with applicable law and regulations, OIG's advisory opinion suggests there is a risk of an adverse OIG finding relating to the business practices reviewed in the advisory opinion. Any such finding could have a material adverse impact on us.

        The Stark Self-Referral Law.    Our affiliated physicians are also subject to federal law which prohibits payments for referral of patients and referrals by physicians to healthcare providers with whom the physicians have a financial relationship. The Ethics in Patient Referral Act of 1989, commonly referred to as the federal physician self-referral prohibition or Stark Law, is a strict liability statute prohibiting a physician from referring a patient to an entity for certain designated health services reimbursable by Medicare or Medicaid if the physician (or an immediate family member) has any financial arrangement with the entity and no statutory or regulatory exception applies. The Stark Law also prohibits the entity from billing for any such prohibited referral. The designated health

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services covered by the law include radiology services, infusion therapy, radiation therapy and supplies, outpatient prescription drugs and hospital services, among others.

        In addition to the conduct directly prohibited by the law, the statute also prohibits "circumvention schemes" designed to obtain referrals indirectly that cannot be made directly. In addition, any person who presents or causes to be presented a claim to the Medicare or Medicaid program in violation of the Stark Law is subject to civil monetary penalties for each claim submitted, an assessment of up to three times the amount claimed, and possible exclusion from participation in federal health care programs. Claims submitted in violation of the Stark Law may not be paid by Medicare or Medicaid, and any person collecting any amounts in connection with a prohibited bill is legally obligated to refund such amounts.

        The Stark Law contains exceptions applicable to our operations. For example, the law explicitly excepts any referrals of radiation oncologists for radiation therapy if (1) the request is part of a consultation initiated by another physician; and (2) the tests or services are furnished by or under the supervision of the radiation oncologist. We believe the services rendered by our radiation oncologists comply with this exception.

        Some physicians who are not radiation oncologists are employed by companies or by professional corporations owned, in part, by certain of our directors with which we have MSAs. To the extent these professional corporations employ such physicians, and they are deemed to have made referrals for radiation therapy, their referrals will be permissible under the Stark Law to the extent that they meet a separate exception for employees. The employment exception requires, among other things, that the compensation be consistent with the fair market value of the services provided, and that it not take into account (directly or indirectly) the volume or value of any referrals by the referring physician.

        When physician employees who are not radiation oncologists have ownership interests in our company, additional Stark Law exceptions may apply, including the exception for in-office ancillary services. Another potentially applicable Stark Law exception is one for physician's ownership of publicly traded securities in a corporation with shareholders' equity exceeding $75 million as of the end of our most recent fiscal year.

        Most recently, PPACA, created new provisions applicable to the Stark Law exception for in-office ancillary services. These provisions are designed to prevent unnecessary referrals for specialists. For MRI, CT, PET and any other designated health service, the referring physician is required to (i) inform the patient in writing at the time of the referral to his own physician group that the patient may obtain the services from any provider; and (ii) provide the patient with a written list of providers who furnished such services in the area where the patient lives. PPACA also creates a statutory disclosure protocol for violations of the Stark Law and authorizes HHS to reduce the amount due and owing for violations taking into consideration various factors in HHS' discretion.

        We believe that our current operations comply in all material respects with the Stark Law and do not believe that we have established any arrangements or schemes involving any service of ours which would violate the Stark Law or the prohibition against schemes designed to circumvent the Stark Law. Although we rely on various Stark Law exceptions that except either the referral or the financial relationship involved, we may not be aware of all the financial arrangements the physician groups with whom we contract and their physicians and immediate family members have with entities to which they refer patients.

        As a general matter, both federal and state government agencies are continuing heightened and coordinated civil and criminal enforcement efforts. In issuing agency work plans, the federal government has made clear its intent to continue to scrutinize, among other thing, the billing practices of hospitals and other providers of health care services. The federal government has also increased funding to fight healthcare fraud and is coordinating its enforcement efforts among various agencies,

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including the U.S. Department of Justice, the U.S. Department of Health and Human Services, OIG and state Medicaid fraud control units. More specifically, PPACA increases funding for the Heath Care Fraud and Abuse Control Account for the next ten years by $10 million annually plus an additional $250 million between 2011 and 2016. Additionally, the PPACA authorizes the suspension of Medicare and Medicaid payments pending investigation of a credible allegation of fraud. As a result, in addition to legal and operational costs associated with a pending investigation, our revenues could be adversely affected by suspension of Medicare and Medicaid reimbursement to our affiliated physician groups.

State Law

        Typically, states are free to, and do, enact their own penalty provisions with respect to violations of health care fraud statutes such as anti-kickback and anti-referral laws. In some states, these penalties may include exclusion from the state Medicaid program. However, PPACA now requires states to terminate individuals or entities from their state Medicaid programs if they have been terminated from Medicare or from another state's Medicaid program. In addition, state Medicaid programs are required by PPACA to exclude an individual or entity that has failed to repay overpayments, been suspended, terminated or excluded from Medicaid participation, or is affiliated with any such entity.

        State Anti-Kickback Laws.    Many states in which we operate have laws that prohibit the payment of kickbacks in return for the referral of patients. Some of these laws apply only to services reimbursable under the state Medicaid program. However, a number of these laws apply to all healthcare services in the state, regardless of the source of payment for the service. Although we believe that these laws prohibit payments to referral sources only where a principal purpose for the payment is for the referral, the laws in most states regarding kickbacks have been subjected to limited judicial and regulatory interpretation and, therefore, no assurances can be given that our activities will be found to be in compliance. Noncompliance with such laws could have a material adverse effect upon us and subject us and the physicians involved to penalties and sanctions.

        State Self-Referral Laws.    A number of states in which we operate, such as California and Florida, have enacted or are considering enacting self-referral laws that are similar in purpose to the Stark Law. However, each state law is unique. The state laws and regulations vary significantly from state to state, are often vague and, in many cases, have not been widely interpreted by courts or regulatory agencies. For example, some states only prohibit referrals where the physician's financial relationship with a healthcare provider is based upon an investment interest. Other state laws apply only to a limited number of designated health services. Finally, some states do not prohibit referrals, but merely require that a patient be informed of the financial relationship before the referral is made.

        These statutes and regulations can apply to services reimbursed by both governmental and private payors. Violations of these laws may result in prohibition of payment for services rendered, loss of licenses as well as fines and criminal penalties. State statutes and regulations affecting the referral of patients to healthcare providers range from statutes and regulations that are substantially the same as the federal laws and safe harbor regulations to a simple requirement that physicians or other healthcare professionals disclose to patients any financial relationship the physicians or healthcare professionals have with a healthcare provider that is being recommended to the patients. Adverse judicial or administrative interpretations of any of these laws could have a material adverse effect on our operating results and financial condition. In addition, expansion of our operations into new jurisdictions, or new interpretations of laws in existing jurisdictions, could require structural and organizational modifications of our relationships with physician groups and their physicians to comply with that jurisdiction's laws. Such structural and organizational modifications could have a material adverse effect on our operating results and financial condition. We believe that we are in compliance with the self-referral law of each state in which we have a financial relationship with a physician group and/or physician.

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        Fee-Splitting Laws.    Many states in which we operate prohibit the splitting or sharing of fees between physicians and non-physicians. These laws vary from state to state and are enforced by courts and regulatory agencies, each with broad discretion. Most of the states with fee-splitting laws only prohibit a physician from sharing fees with a referral source. However, some states have a broader prohibition against any splitting of a physician's fees, regardless of whether the other party is a referral source. Some states have interpreted management agreements between entities and physicians as unlawful fee-splitting. In most cases, this is not considered to be fee-splitting when the payment made by the physician is reasonable reimbursement for services rendered on the physician's behalf.

        In certain states, we receive fees under our MSA from physician groups owned by certain of our shareholders. We believe we structured these fee provisions to comply with applicable state laws relating to fee-splitting. For example, in Florida we have modified our MSAs to comply with state agency interpretations of these laws by having our affiliated physician groups pay flat, fair market value fees for certain marketing services. However, there can be no certainty that, if challenged, either us or the affiliated physician groups will be found to be in compliance with each state's fee-splitting laws, and, if challenged successfully, this could have a material adverse effect upon us.

        We believe our arrangements with physician groups and/or physicians comply in all material respects with the fee-splitting laws of the states in which we operate. Nevertheless, it is possible regulatory authorities or other parties could claim we are engaged in fee-splitting. If such a claim were successfully asserted in any jurisdiction, our affiliated physician groups and/or their radiation oncologists, could be subject to civil and criminal penalties and professional discipline, and we could be required to restructure our contractual and other arrangements. Any restructuring of our contractual and other arrangements with affiliated physician groups could result in lower revenue from such affiliated physician groups, increased expenses in the management of the treatment centers associated with such affiliated physician groups and reduced influence over the business decisions of such affiliated physician groups. Alternatively, some of our existing contracts could be found to be illegal and unenforceable, which could result in the termination of those contracts and an associated loss of revenue. In addition, expansion of our operations to other states with fee-splitting prohibitions may require structural and organizational modification to the form of relationships that we currently have with affiliated physician groups and their physicians and hospitals. Any modifications could result in less profitable relationships with affiliated physician groups and their physicians and hospitals, less influence over the business decisions of affiliated physician groups and their physicians and failure to achieve our growth objectives.

        Corporate Practice of Medicine.    We are not licensed to practice medicine. The practice of medicine is conducted solely by the licensed radiation oncologists of our affiliated physician groups. The manner in which licensed physicians can be organized to perform and bill for medical services is governed by the laws of the state in which medical services are provided and by the medical boards or other entities authorized by such states to oversee the practice of medicine. Most states' corporate practice of medicine laws prohibit any person or entity other than a licensed professional from holding him, her or itself out as a provider of diagnoses, treatment or care of patients. Many states extend this prohibition to bar companies not wholly-owned by licensed physicians from employing physicians to maintain physician independence and clinical judgment.

        Business corporations are generally not permitted under certain state laws to exercise control over the medical judgments or decisions of physicians, or engage in certain practices such as fee-splitting with physicians. In states where we are not permitted to own a medical practice, we perform only non-medical and administrative and support services, do not represent to the public or patients that we offer professional medical services and do not exercise influence or control over the practice of medicine.

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        Corporate Practice of Medicine laws vary widely regarding the extent to which a licensed physician can affiliate with corporate entities for the delivery of medical services. Florida is an example of a state that requires all practicing physicians to meet requirements for safe practice, but it has no provisions setting forth how physicians can be organized. In Florida, it is not uncommon for business corporations to own medical practices. We have developed arrangements which we believe are in compliance with the Corporate Practice of Medicine laws in the states in which we operate.

        We believe our operations and contractual arrangements as currently conducted are in material compliance with existing applicable laws. However, we can make no guarantees that we would be successful if our existing organization and our contractual arrangements with the professional corporations were challenged as constituting the unlicensed practice of medicine. In addition, we might not be able to enforce certain of our arrangements, including non-competition agreements. While the precise penalties for violation of state laws relating to the corporate practice of medicine vary from state to state, violations could lead to fines, injunctive relief dissolving a corporate offender or criminal felony charges. There can be no assurance that review of our business and our affiliated physician groups by courts or regulatory authorities will not result in a determination that could adversely affect our and their operations or that the healthcare regulatory environment will not change so as to restrict existing operations or our and their expansion. In the event of action by any regulatory authority limiting or prohibiting us or any affiliated physician group from carrying on business or from expanding operations to certain jurisdictions, structural and organizational modifications of us may be required, which could adversely affect our ability to conduct our business.

        Antitrust Laws.    In connection with the Corporate Practice of Medicine laws discussed above, all of the physician practices with which we are affiliated are necessarily organized as separate legal entities. As such, our physician groups may be deemed to be persons separate both from us and from each other under the antitrust laws and, accordingly, subject to a wide range of laws that prohibit anticompetitive conduct among separate legal entities. In addition, we also are seeking to acquire or affiliate with established and reputable practices in our target geographic markets and any market concentration could lead to antitrust claims.

        We believe we are in compliance with federal and state antitrust laws and intend to comply with any state and federal laws that may affect our development of integrated radiation oncology treatment centers. There can be no assurance, however, that a review of our business by courts or regulatory authorities would not adversely affect the operations of us and/or our affiliated physician groups.

        State Licensing.    As a provider of radiation therapy services in the states in which we operate, we must maintain machine registrations for certain types of our equipment including our linacs and simulators. Additionally, we must maintain radioactive material licenses for each of our treatment centers which utilize radioactive sources. We believe that we possess or have applied for all requisite state and local licenses and are in material compliance with all state and local licensing requirements.

Reimbursement and Cost Containment

        Reimbursement.    We provide a full range of both professional and technical services. Those services include the initial consultation, clinical treatment planning, simulation, medical radiation physics, dosimetry, treatment devices, special services and clinical treatment management procedures.

        The initial consultation is charged as a professional fee for evaluation of the patient prior to the decision to treat the patient with radiation therapy. The clinical treatment planning also is reimbursed as a technical and professional component when involving IMRT and professional only in connection with non-IMRT treatment planning. Simulation of the patient prior to treatment involves both a technical and a professional component, as the treatment plan is verified with the use of a simulator accompanied by the physician's approval of the plan. The medical radiation physics, dosimetry, treatment devices and special services also include both professional and technical components. The

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basic dosimetry calculation is accomplished, treatment devices are specified and approved, and the physicist consults with the radiation oncologist, all as professional and technical components of the charge. Special blocks, wedges, shields or casts are fabricated, all as a technical and professional component.

        The delivery of the radiation oncology treatment from the linac is a technical charge. The clinical treatment administrative services fee is the professional fee charged weekly for the physician's management of the patient's treatment. Global fees containing both professional and technical components also are charged for specialized treatment such as hyperthermia, clinical intracavitary hyperthermia, clinical brachytherapy, interstitial radioelement applications and remote after-loading of radioactive sources.

        Coding and billing for radiation therapy is complex. We maintain a staff of coding professionals responsible for interpreting the services documented on the patients' charts to determine the appropriate coding of services for billing of third-party payors. In addition, we do not provide coding and billing services to hospitals where our affiliated physician groups are providing only the professional component of radiation oncology treatment services. We provide training for our coding staff and believe that our coding and billing expertise results in appropriate and timely reimbursement.

        Cost Containment.    We derived approximately 50%, 46%, and 44% of our affiliated physician groups' net revenue for the years ended December 31, 2007, 2008 and 2009, respectively, from payments made by Medicare and Medicaid. Our net revenue, whether from providers who bill third-party payors directly or from our direct billing, are impacted by Medicare laws and regulations.

        In recent years, the federal government has sought to constrain the growth of spending in the Medicare and Medicaid programs. Through the Medicare program, the federal government pays for physician services under the Medicare Physician fee Schedule, derived from a resource-based relative value scale, or RBRVS. Under the RBRVS fee schedule, each physician service is given a weight that measures its costliness relative to other physician services. The basic approach for calculating the relative weight is based on three components that make up a physician's cost: (i) work component (reflecting the physician's time and work intensity); (ii) practice expense component (reflecting the device used in a given service and other overhead costs); and (iii) malpractice component (reflecting malpractice expenses associated with the service). The RBRVS is adjusted each year and is subject to increases or decreases at the discretion of Congress. For 2010, CMS announced a number of changes, which includes, among other things, a change to the data source used to calculate the practice expense component. For 2010, CMS projected that the combined impact of its changes would be an estimated 1% payment reduction in radiation oncology (and up to a 5% payment reduction by 2013 when these changes are fully implemented). Such changes may result in reductions in payment rates for procedures provided by our affiliated physician groups. RBRVS-type payment systems also have been adopted by certain private third-party payors and may become a predominant payment methodology. Broader implementation of such programs could reduce payments by private third-party payors and could indirectly reduce our operating margins to the extent that the cost of providing management services related to such procedures would not be proportionately reduced. To the extent our costs increase, our affiliated physician groups may not be able to recover such cost increases from government reimbursement programs. In addition, because of cost containment measures and market changes in non-governmental insurance plans, we may not be able to shift cost increases to non-governmental payors. Changes in the RBRVS could result in a reduction from historical levels in per patient Medicare revenue received by our affiliated physician groups; however, we do not believe such reductions would, if implemented, result in a material adverse effect on us.

        For services for which we bill Medicare as the billing agent for our affiliated physician groups or their physicians, our affiliated physician groups are paid under the Medicare Physician Fee Schedule which is updated annually. Under the existing Medicare statutory formula, payments under the

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Physician Fee Schedule would have decreased over the past several years without congressional intervention. For 2010, the Centers for Medicare and Medicaid Services, or CMS, projected a rate reduction of 21.2% under the statutory formula. A number of legislative initiatives have prevented this reduction thus far, but on an incremental basis. The latest was the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, signed into law on June 25, 2010, which not only prevented the rate reduction, but also increased payment rates by 2.2%, effective June 1, 2010 through November 30, 2010. For 2011, CMS is projecting a rate reduction of 6.1%, but this projection does not account for the 2010 legislative changes to the Physician Fee Schedule updates. If Congress fails to intervene to prevent the negative update factor in the future, the resulting decrease in payment will adversely impact our revenues and results of operations.

        Additionally, the PPACA will substantially change the way health care is financed by both governmental and private insurers and may negatively impact payment rates for certain services. In addition, Medicare, Medicaid and other government sponsored healthcare programs are increasingly shifting to some form of managed care. Although governmental payment reductions have not materially affected us in the past, it is possible that such changes in the future could have a material adverse effect on our financial condition and results of operations, particularly given the sweeping changes provided for in the PPACA. We expect that there will continue to be proposals to reduce or limit Medicare and Medicaid payment for services.

        Rates paid by private third-party payors, including those that provide Medicare supplemental insurance, are based on established physician fees and are generally higher than Medicare payment rates. Nevertheless, third-party payors may impose limits on coverage or reimbursement for radiation therapy services. Furthermore, changes in the mix of patients between non-governmental payors and government sponsored healthcare programs, and among different types of non-government payor sources, could have a material adverse effect on us.

        Reevaluations and Examination of Billing.    Payors periodically reevaluate the services they cover. Funds received under all healthcare reimbursement programs are subject to audit with respect to the proper billing for physician services. Retroactive adjustments of revenue from these programs could occur. In some cases, government payors such as Medicare and Medicaid also may seek to recoup payments previously made for services determined not to be covered. Any such action by payors would have an adverse affect on our net revenue and earnings.

        Due to the uncertain nature of coding for radiation therapy services, we could be required to change coding practices or repay amounts paid for incorrect practices, either of which could have a materially adverse effect on our operating results and financial condition.

Other Regulations

        In addition, we are subject to licensing and regulation under federal, state and local laws relating to the collecting, storing, handling and disposal of medical specimens, infectious and hazardous waste and radioactive materials as well as the safety and health of our employees. The PET/CT services provided by certain of our affiliated physician groups require the use of radioactive materials. We believe such operations are in material compliance with applicable federal and state laws and regulations relating to the collection, storage, handling, treatment and disposal of all medical specimens, infectious and hazardous waste and radioactive materials. Nevertheless, there can be no assurance that our current or past operations would be deemed to be in compliance with applicable laws and regulations, and any noncompliance could result in a material adverse effect on us. Furthermore, we cannot completely eliminate the risk of accidental contamination or injury from these hazardous materials. We utilize licensed vendors for the disposal of such specimens and waste. In addition, we maintain professional liability insurance that covers such matters with coverage that we believe is consistent with industry practice and appropriate for the risks inherent in our business.

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Despite such precautions, in the event of an accident, we could face liability that exceeds the limits or falls outside the coverage of our insurance. We could also incur significant costs in order to comply with current or future environmental laws and regulations. To date, we have not had material expenses related to environmental or health and safety laws.

        In addition to our comprehensive regulation of safety in the workplace, the federal Occupational Safety and Health Administration, or OSHA, has established extensive requirements relating to workplace safety for healthcare employees, whose workers may be exposed to blood-borne pathogens, such as HIV and the hepatitis B virus. These regulations require work practice controls, protective clothing and equipment, training, medical follow-up, vaccinations and other measures designed to minimize exposure to, and transmission of, blood-borne pathogens.

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MANAGEMENT

Board of Directors and Executive Officers

        The following table provides information regarding our directors and executive officers:

Professional
  Age   Title
L. Duane Choate     51   President, Chief Executive Officer and Director
Timothy A. Peach     59   Chief Financial Officer and Treasurer
Russell D. Phillips, Jr.      48   Executive Vice President, General Counsel and Chief Compliance Officer
William L. Pegler     56   Senior Vice President and Chief Operating Officer
Joseph Stork     53   Senior Vice President and Chief Development Officer
George A. Welton     56   Senior Vice President and Chief Information Officer
Shyam B. Paryani, M.D.      56   Chairman of the Board of Directors
Stanley M. Marks, M.D.      62   Director
Jonathan R. Stella, M.D.      53   Director
James D. Nadauld     36   Director
Robert J. Weltman     45   Director

        L. Duane Choate, President, Chief Executive Officer and Director. Mr. Choate joined Oncure in 2007 as Executive Vice President and Chief Financial Officer and became our President and Chief Executive Officer in February 2010. Prior to joining Oncure, Mr. Choate was an independent healthcare consultant principally serving large physician-owned oncology groups from 2000 to 2007. From 1993 to 1999, Mr. Choate was employed by US Oncology, Inc., a publicly traded physician practice management company, initially in various finance positions and became Vice President of Financial Operations in 1996 and served from 1998 to 1999 as the chief operations executive, responsible for the development and timely implementation of same market growth strategies. Mr. Choate earned a Bachelor in Business Administration from the University of Houston and is a member of the American Institute of Certified Public Accountants.

        Timothy A. Peach, Chief Financial Officer and Treasurer. Mr. Peach joined Oncure in March 2009 as Vice President Finance and Controller and became the Chief Financial Officer in March 2010. Mr. Peach has over 25 years of senior financial management and accounting experience with over ten years in the healthcare industry. Prior to joining Oncure, Mr. Peach served as a senior manager with PriceWaterhouse Coopers from 1975 to 1986, as a finance executive with Telectronics Pacing Systems, Inc., an international medical device manufacturer from 1988 to 1995, as a consultant and corporate officer on successful initial public offerings including SchlumbergerSema from 1996 to 2003, ARC, Inc. in 2004, Duke Energy Field Services, Inc. during 2005 through 2006, and Vista International Technologies, Inc. from 2006 to 2008 and has held the positions of Vice President Finance, Chief Accounting Officer and Chief Financial Officer for venture-backed and publicly traded companies. Mr. Peach earned a Bachelor of Science and a Masters of Business Administration from the University of Pittsburgh and is a member of the American Institute of Certified Public Accountants.

        Russell D. Phillips, Jr. Executive Vice President, General Counsel and Chief Compliance Officer. Mr. Phillips joined Oncure in 2006 as Executive Vice President, General Counsel and Chief Compliance Officer. Prior to joining Oncure, Mr. Phillips served for eight years from 1998 through 2005 as the Executive Vice President, General Counsel and Secretary of Alliance Imaging, Inc., a publicly traded provider of diagnostic imaging services. During 1997, Mr. Phillips served as the Chief Legal Officer and Secretary of Talbert Medical Management Corporation, a publicly traded physician practice management company, from Talbert's inception until its acquisition by MedPartners, Inc. From 1992 to February 1997, Mr. Phillips was Corporate Counsel for FHP International Corporation, a publicly traded health maintenance organization at the time of its acquisition by PacifiCare Health

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Systems. Mr. Phillips also served as a corporate associate with the law firm of Skadden, Arps, Slate, Meagher & Flom from 1987 through 1991. Mr. Phillips received his Juris Doctorate degree in 1986 from Washington University School of Law, St. Louis, Missouri, after which he served as a judicial clerk for the Supreme Court of Delaware until 1987. Mr. Phillips is an active member of the State Bar of California.

        William L. Pegler, Senior Vice President and Chief Operating Officer. Mr. Pegler joined Oncure in 2004 as Western Regional Vice President, subsequently became Senior Vice President in 2005, and was promoted to Senior Vice President and Chief Operating Officer in 2008. Mr. Pegler has over 25 years of senior healthcare management experience in various sectors including: radiation and medical oncology, hospital administration, rehabilitation, diagnostic and nursing home administration. He served as Chief Executive Officer for Specialty Hospitals from 1997 to 1999, and as the Western Divisional President for Continental Medical Systems, Inc. from 1993 to 1997. Mr. Pegler holds a Masters Degree in Health Administration from Trinity University, a Bachelor of Science in Physical Therapy from the University of Texas, Galveston, and a Bachelor of Arts Degree in Biology from the University of Texas, Austin.

        Joseph Stork, Senior Vice President and Chief Development Officer. Mr. Stork joined Oncure in 2007 as Senior Vice President and Chief Development Officer. Mr. Stork has worked in the physician recruiting and development field since 1982. From 2003 to 2004, Mr. Stork was the Chief Operating Officer of Eastern European Mission, an organization that helps bring Christianity to the former Soviet block nations. From 2004 to 2007, Mr. Stork was the Chief Development Officer of FemPartners, an Ob/Gyn practice management company. Mr. Stork holds a Bachelor in Business Administration in Marketing and a Masters of Ministry degree from Harding University.

        George A. Welton, Senior Vice President and Chief Information Officer. Mr. Welton joined Oncure as Senior Vice President and Chief Information Officer in 2008. Mr. Welton has over 20 years of experience in healthcare operations, information technology and consulting for startup, public, nonprofit and faith-based organizations. Prior to joining Oncure, Mr. Welton was the Senior Vice President/Chief Information Officer at The Breakaway Group from 2006 to 2008. The Breakaway Group is a consulting practice which specializes in educating users on adopting healthcare applications. Prior to that he served as Chief Information Office Partner of Tatum, LLC, from 2005 to 2006. Tatum, LLC is the largest executive services firm in the United States and provides C-level operational expertise to help resolve strategic, financial and technology issues. Prior to that Mr. Welton served as Chief Information Officer of Exempla Healthcare from 2000 to 2005. Mr. Welton is a fellow with the Health Information Management and Systems Society and holds Master's degrees in healthcare administration and public policy analysis from Tulane University and a Bachelor of Arts from Susquehanna University.

        Shyam B. Paryani, M.D., M.H.A., F.A.C.R.O., Chairman of the Board of Directors. Dr. Paryani has been Chairman of our Board since 2006 and is a founder of Oncure Medical and was on the Board of Directors of Oncure Medical from 1998 through 2006. He has also served as Chairman of the Board of Oncure Medical from 2001 through 2006 and has been Chairman of the Medical Advisory Board of Oncure Medical since 2001. He is a Board Certified Radiation Oncologist and is a Licensed Radiation Physicist in the state of Florida. He is an Assistant Professor at the Mayo Clinic and teaches the Radiation Oncology Residents. He was inducted as a Fellow of the American College of Radiation Oncology in 2000. He currently serves on the Board of the Baptist Health Foundation as well as the University of North Florida's College of Health Dean's Council and Foundation Board.

        Stanley M. Marks, M.D., Director. Dr. Marks has served as one of our directors since 2007. Dr. Marks founded Oncology Hematology Association, or OHA, in 1978, and has since led OHA to become one of the largest hematology-oncology practices in Pennsylvania. With the merger of OHA and the University of Pittsburgh Cancer Institute, Dr. Marks assumed the title of Director for Clinical

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Services and Chief Medical Officer of UPMC Cancer Centers, a position he held from 2000. In addition, since 2000 he is Chief of the Division of Hematology/Oncology, UPMC Shadyside Hospital, and Clinical Professor of Medicine for the University of Pittsburgh School of Medicine, where he received his undergraduate and medical degrees.

        Jonathan R. Stella, M.D., Director. Dr. Stella has served as one of our directors since 2008. In 1990, Dr. Stella became the Medical Director of the San Luis Obispo Radiation Oncology Center in San Luis Obispo, California and has practiced medicine since 1988. He has practiced with the eight-center Coastal Radiation Oncology Medical Group for 20 years and has been its President since 2004. Dr. Stella received his undergraduate degree from the University of Wisconsin, Green Bay and medical degree from American University of the Caribbean School of Medicine. Dr. Stella currently serves on the board of the Wellness Community of San Luis Obispo County. Dr. Stella is a board-certified therapeutic radiologist.

        James D. Nadauld, Director. Mr. Nadauld has served as one of our directors since 2006. Since 2004, Mr. Nadauld has been associated with Genstar Capital LLC most recently in the position of a principal from 2009, helping to identify, evaluate and execute acquisition and investment opportunities. From 2004 through 2006, Mr. Nadauld was a Senior Associate of Genstar and from 2007 through 2008 a Vice President of Genstar. Prior to joining Genstar, from 2000 to 2002, Mr. Nadauld was an Associate with MedEquity Investors, LLC in Wellesley Hills, Massachusetts, a healthcare-focused private equity firm. Previously, from 1998 to 2000, he was an investment banking analyst in the Global Healthcare Group at Lehman Brothers, Inc. in New York. Mr. Nadauld earned a Master's in Business Administration from Harvard Business School and a Bachelor of Arts in English from Brigham Young University. He is also a Director of Evolution Benefits™, Inc., Univita Health, Inc. and a former Director of Axia Health Management LLC.

        Robert J. Weltman, Director. Mr. Weltman has served as one of our directors since 2006. Since 1995, Mr. Weltman has been associated with Genstar Capital LLC, most recently in the position of managing director from 2004 responsible for sourcing and executing acquisitions and monitoring several of Genstar's portfolio companies. Mr. Weltman joined Genstar in 1995 as Vice President. From 1991 to 1993, Mr. Weltman worked in the corporate finance and mergers and acquisitions departments of Salomon Brothers Inc. and from 1993 to 1995 at Robertson, Stephens & Co. where he assisted technology, environmental services, real estate, basic manufacturing and service companies in initial public offerings, private placements and public debt offerings. Mr. Weltman earned an AB from Princeton University. He is also a Director of Evolution Benefits™, Inc., PRA International Inc., Harlan Laboratories, Inc., MidCap Financial, LLC and Univita Health, Inc.

Board of Directors

        Our Board of Directors is responsible for the management of our business. Directors who are elected at an annual meeting of stockholders serve in their position until the next annual meeting and until their successors are elected and qualified. Because our securities are not listed on any stock exchange or inter-dealer quotation system, we are not required to have an independent board of directors or a separately designated audit committee whose members are independent, and therefore our board has not affirmatively determined whether the members of our Board of Directors would be considered independent under Section 303A.02 of the Listed Company Manual of the New York Stock Exchange, or NYSE. If our securities were to be listed on any stock exchange or inter-dealer quotation system, we believe that we would be considered a "controlled company" as defined in the NYSE listing standards and, therefore, could elect to be exempted from the NYSE requirements that the Board have a majority of independent directors and that we have a separate nominating/corporate governance committee composed entirely of independent directors. However, we believe that Dr. Marks would be considered independent under the NYSE listing standards. We do not believe that Drs. Paryani and Stella and Messrs. Choate, Nadauld and Weltman would be considered independent based upon NYSE listing standards.

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Board Committees

        Our Board of Directors has a standing Audit Committee and Compensation Committee. The Audit Committee is composed of Messrs. Nadauld and Weltman. Our Board of Directors has not affirmatively determined whether any of the members of the current Audit Committee is an "audit committee financial expert". However, we believe that Mr. Nadauld would be considered an audit committee financial expert if our Board of Directors were to make such a determination. The Compensation Committee is composed of Messrs. Nadauld and Weltman.

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COMPENSATION DISCUSSION AND ANALYSIS

    Overview

        This compensation discussion describes the material elements of the compensation awarded to, earned by, or paid to our officers who are considered to be "named executive officers" during 2010, our last fiscal year. "Named executive officers" or "NEOs" refers to David S. Chernow, our former President and Chief Executive Officer who served in such role through February 26, 2010; L. Duane Choate, who served as our Executive Vice President, Chief Financial Officer and Treasurer through February 16, 2010 and is now our President and Chief Executive Officer; Timothy A. Peach, who became our Chief Financial Officer as of April 6, 2010; Russell D. Phillips, Jr., Executive Vice President, Chief Compliance Officer, General Counsel and Secretary; William L. Pegler, Senior Vice President and Chief Operating Officer; and Joseph Stork, Senior Vice President and Chief Development Officer.

    Compensation Committee

        The Compensation Committee of our Board, or the "Compensation Committee," has responsibility for establishing, implementing and continually monitoring adherence with our compensation philosophy. The Committee ensures that the total compensation paid to our named executive officers is in the amounts and subdivided into proportions of short and long-term components, cash and equity, and fixed contingent payments that we believe are most appropriate to incentivize, retain, and reward our named executive officers for achieving our objectives. Our Compensation Committee met four times during 2010 and acted by unanimous written consent on one occasion during 2010.

        Our Compensation Committee reviews the compensation of our named executive officers on at least an annual basis. In addition, our Compensation Committee is responsible for determining all stock-based and Executive Incentive Plan performance-based targets and cash awards for our named executive officers. Executive Incentive Plan targets are generally determined before the beginning of each year or at the time our annual budget is approved by the Board of Directors, whichever is later and are based on calendar year financial performance. The Compensation Committee has the authority to retain compensation consultants to assist it in making its decisions. If consultants are retained by the Compensation Committee, they are retained directly by the Compensation Committee and the decision to retain them is the Compensation Committee's alone. The Compensation Committee's decisions in 2010 were made without the use of compensation consultants.

    Role of Our Executive Officers in Compensation Process

        During the portion of 2010 that Mr. Chernow served as our President and Chief Executive Officer, he also served as a member of the Compensation Committee and offered recommendations on compensation of the NEOs with the exception of himself. As a member of the Compensation Committee, Mr. Chernow participated in the final determinations of compensation levels for the other NEOs, but he did not participate in the Committee's final determinations and decisions concerning his own compensation which were made in his absence. Mr. Chernow resigned from the position of President and Chief Executive Officer as of February 26, 2010 and also ceased to be a member of the Compensation Committee at such time. Mr. Choate was appointed our President and Chief Executive Officer effective February 17, 2010 but does not serve as a member of our Compensation Committee.

        Mr. Choate is also invited to attend meetings of the Compensation Committee, as our current President and Chief Executive Officer, and offers recommendations on compensation of other executives. During Mr. Chernow's tenure as President and Chief Executive Officer, the Board believed it appropriate to have the President and Chief Executive Officer as a member of the Compensation Committee when the Company neither had nor contemplated having publicly registered securities. In contemplation of the Senior Notes offering and the possibility that the same would be registered

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securities, Mr. Choate was not appointed as a member of the Compensation Committee upon commencing service as our President and Chief Executive Officer. Mr. Choate neither votes on the final determinations and decisions regarding the compensation of the other NEOs or his own compensation as such decisions related to Mr. Choate are made by the Compensation Committee in his absence.

    General Compensation Philosophy

        The objective of our executive compensation program is to advance our stockholders' interests by attracting, motivating and retaining executives of the highest caliber and by aligning our executives' interests with those of our stockholders. The program is designed to reward performance and dedication, and to hold executives accountable for company-wide results. The Compensation Committee believes that compensation paid to our executives should be closely aligned with our performance on both a short-term and long-term basis, linked to specific, measurable results intended to create value for our stockholders, and should assist us in attracting and retaining key executives critical to our long-term success. To that end, the Compensation Committee believes executive compensation packages provided by the Company to its NEOs should include both cash and stock-based compensation that reward performance.

        All named executive officers have a significant element of compensation at risk in the form of cash bonuses tied to Company performance measured by Adjusted EBITDA. Each of our executives is assigned an annual target bonus which is stated as a percentage of his annual base salary. The percentage target increases along with the NEO's responsibilities within our Company and with the NEO's ability to influence the overall results of our Company. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization less certain non-recurring items which if taken into account for purposes of the Executive Incentive Plan would penalize our executives for items beyond their control and/or items not reflective of our actual operating results.

    Elements of Compensation

        The elements of compensation we provide to our named executive officers are:

    base salary;

    performance-based cash awards under our Executive Incentive Plan;

    cash bonuses paid at the discretion of the Compensation Committee;

    long-term equity incentive awards; and

    severance arrangements and benefits.

        Subject to limited exceptions primarily related to car allowances, short-term disability insurance and a benefit plan for the reimbursement of out-of-pocket healthcare expenses, we do not provide perquisites for our NEOs on a basis that is different from other full-time employees. We do not have a strict policy for allocating between long-term and currently-paid-out compensation, or between cash and non-cash compensation. In general, however, the three most important elements of our compensation program—base salary, annual performance-based Executive Incentive Plan cash bonuses, and equity grants vesting over the course of several years—are allocated for each named executive officer based upon our assessment of that individual's role in our Company's success, as measured by our achievement of Adjusted EBITDA targets. For our named executive officers, this typically results in a large portion of overall compensation being tied to overall Company performance.

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    Overview

        For all NEOs compensation is intended to be performance-based. The Compensation Committee believes that compensation paid to executive officers should be closely aligned with the performance of the Company on both a short-term and long-term basis, linked to specific, measurable results intended to create value for stockholders, and that such compensation should assist the Company in attracting and retaining key executives critical to its long-term success.

        In establishing compensation for executive officers, the following are the Compensation Committee's objectives:

    Attract and retain individuals of superior ability and managerial talent;

    Ensure executive officer compensation is aligned with our corporate strategies, business objectives and the long-term interests of our stockholders and bondholders;

    Increase the incentive to achieve key strategic and financial performance measures by linking incentive award opportunities to the achievement of performance goals in these areas; and

    Enhance the executives' incentive to maximize stockholder value, as well as promote retention of key people, by providing a portion of total compensation opportunities for executive management in the form of direct ownership in the Company through stock options.

        The Company's overall compensation program is structured to attract, motivate and retain highly qualified executive officers by paying them competitively, consistent with the Company's success and their contribution to that success. The Company provides a base salary to our executive officers and includes a significant Executive Incentive Plan performance-based bonus component. The Company believes compensation should be structured to ensure that a significant portion of compensation opportunity will be directly related to performance-based cash awards under our Executive Incentive Plan. Accordingly, the Company sets annual Adjusted EBITDA goals designed to directly link each NEO's compensation to the Company's performance and their own relative contribution within the Company. We do not have a formal policy on adjustment or recovery of cash bonus awards in the event our financial results are restated after payment of the cash bonus awards.

    Determination of Compensation Awards

        The Compensation Committee is provided with the primary authority to determine and recommend the compensation awards available to our executive officers.

        In making compensation determinations, the Committee considers each NEO's unique position and responsibility and relies upon the judgment and industry experience of its members, including their knowledge of competitive salaries in the industry. We seek to compensate our NEOs for their performance throughout the year with annual base salaries that are fair and competitive within our marketplace. We believe that executive officer base salaries should be competitive with salaries for executive officers in similar positions and with similar responsibilities in our marketplace and adjusted for financial and operating performance and previous work experience. In this regard, each executive officer's current and prior compensation is considered as a base against which determinations are made as to whether increases are appropriate to retain the NEO in light of competition or in order to provide continuing performance incentives.

        Our Compensation Committee does not make regular use of benchmarking or of compensation consultants. In determining compensation levels for our NEOs, the Compensation Committee does not directly compare compensation levels with any other companies and does not refer to any specific compensation survey or other data. Rather, the amount of total compensation, the amounts allocated to each component and the target amounts payable under our Executive Incentive Plan are set by the Compensation Committee based on the general industry knowledge of the members of our

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Compensation Committee obtained through years of service with comparably sized privately-held portfolio companies in the healthcare industry, in alignment with the foregoing considerations, rather than in accordance with precise formulas or benchmarked levels, to ensure the attraction, development and retention of superior talent.

    Base Salaries

        We provide named executives officers with base salary to compensate them for services rendered during the fiscal year. Base salary also serves as a baseline for recognition and reward in our performance-based Executive Incentive Plan cash awards and in our long-term equity grants. Base salary ranges for named executive officers are determined by the Compensation Committee for each executive based on his position and responsibility by the Committee using its own judgment and industry experience, including its knowledge of competitive salaries in the industry, in the manner described above.

        During its review of base salaries for executives, the Committee primarily considers:

    Internal review of the executive's level of compensation, both individually and relative to other officers within the Company;

    Knowledge of salaries for comparable executives; and

    Reasonable enhancements from time-to-time to recognize our business success and the executive's taking on increased duties.

        The Compensation Committee's subjective decisions as to the type and amount of compensation in some cases reflect negotiations with the executive, as well as our assessment of how compensation can be structured to encourage both high performance by the executive and long-term service to the Company.

        Base salaries for the NEOs are established on an annual calendar year based on the scope of their responsibilities, individual contribution, prior experience, sustained performance, competitive salary levels and our budgetary constraints. No formulaic base salary increases are provided to any of the NEOs. None of the then named executive officers received salary increases effective January 1, 2010 due to our uncertainty related to the Company's achievement of our targeted 2010 Adjusted EBITDA goals as a result of changes in CMS reimbursement rates; potential healthcare reform legislation; and the decline in patient census levels due to the global economic downturn. Mr. Choate's base salary was increased from $345,000 per annum to $500,000 per annum when he became our President and Chief Executive Officer and Mr. Peach's base salary was increased from $200,000 per annum to $250,000 per annum when he became our Chief Financial Officer, which increases were implemented as a result of the applicable NEO's promotion, internal pay equity considerations and the increased scope of the NEO's responsibilities in his new position.

    Executive Incentive Plan

        Performance-based cash bonus awards under our Executive Incentive Plan consist of annual bonus awards and discretionary cash bonus awards. Each year's annual Executive Incentive Plan gives our executives an incentive to meet specific goals set by the Board of Directors with reference to that year's budget and forecasts approved by the Board. We believe that our annual Executive Incentive Plan encourages long-term growth in stockholder value by providing executives with a series of incentives particular to each year's circumstances. The Compensation Committee based 100% of the NEOs' annual cash bonus potential in 2010 on our achievement of projected Adjusted EBITDA in order to motivate the NEOs to maximize earnings from the Company's operations and to encourage the NEOs to work cooperatively as a team. We believe the annual budgeted amount of Adjusted EBITDA established by the Board is reasonably attainable while requiring substantial effort. The Compensation

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Committee determines each NEO's Executive Incentive Plan target award as a total percentage of base compensation exclusive of any amounts attributable to car allowances, stock based compensation, vacation time payouts and other similar compensation items. These awards are paid in cash to the NEOs shortly after the annual independent audit of our financial statements is completed if the performance goals have been met, the annual incentive has been earned in accordance with the terms and conditions of the Executive Incentive Plan, and the Compensation Committee determines and declares that the award should be paid. To tie compensation to performance, there is no minimum award of compensation required by the Executive Incentive Plan. Each NEO's bonus upon achieving annual budgeted Adjusted EBITDA is computed as and paid on a predetermined percentage of base compensation. The percentage for each NEO is reviewed, approved and documented by the Compensation Committee annually prior to the year in which the Executive Incentive Plan applies. If the Company achieves its annual budgeted Adjusted EBITDA for 2010, each NEO will receive the percentage of base compensation to which entitled.

        Our 2010 Executive Incentive Plan establishes that no bonus will be paid unless we produce a minimum amount of Adjusted EBITDA ($36.992 million) and that bonuses will be paid at the full target amount only if Adjusted EBITDA equals at least $38.939 million. In the event the Company exceeds the 100% payout level of $38.939 million of Adjusted EBITDA the bonus amount will increase five percent (5%) for each one percent (1%) of Adjusted EBITDA above $38.939 million to $40.886 million and ten percent (10%) for each one percent (1%) of Adjusted EBITDA above $40.886 million. The Compensation Committee has reviewed our projected financial results for the year ended December 31, 2010 and concluded that based upon such projections no bonuses will be earned under our 2010 Executive Incentive Plan. The Compensation Committee has exercised it's discretionary authority under the Executive Incentive Plan provisions to provide the NEOs with the potential for a cash bonus if the Company achieves an Adjusted EBITDA level of approximately $36 million as follows: $0 in the case of Mr. Choate; $30,000 in the case of Messrs. Peach, Pegler and Phillips; and $10,000 in the case of Mr. Stork. This bonus potential was established based upon the Compensation Committee's recognition of management's collective efforts during the 2010 fiscal year and to retain and motivate the executive management team, exclusive of Mr. Choate. The Compensation Committee determined not to provide any potential bonus award to Mr. Choate given his receipt of the retention bonus described below. Each NEO's bonus potential (exclusive of Mr. Choate) represents an allocated amount of a bonus pool established for all executive-level employees and the amount allocated to each NEO was not based on an individual analysis of each NEO's specific efforts during 2010. Instead, the amount allocated to each NEO was determined based on the Compensation Committee's judgment of the individual NEO's contribution to achieving our expected 2010 Adjusted EBITDA based on his role and level of responsibility within the Company as well as consideration of the need to retain and motivate each NEO.

    Special Bonus Payment

        We entered into a retention bonus letter agreement with Mr. Choate in February 2010 providing for the special bonus opportunity of $500,000, which the Compensation Committee determined in its judgment was necessary and appropriate to encourage Mr. Choate to maintain his continued dedication and efforts on behalf of the Company and to ensure his retention and continued service to the Company during an important transition period. Payment of the special bonus was to be made generally upon the earlier of December 31, 2010 or the one month anniversary our appointment of a new Chief Financial Officer, subject to continue employment through such date and subject to earlier payment in the event of a change in control or certain involuntary terminations of employment. Mr. Choate was paid the retention bonus on the one month anniversary of our promotion of Mr. Peach to the position of Chief Financial Officer on April 6, 2010. Although the retention bonus was not initially intended to impact the bonus Mr. Choate may earn under our 2010 Executive Incentive Plan it was taken into account when allocating the discretionary bonus pool described above.

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    Equity-Based Awards

        We believe that positive long-term performance is achieved in part by providing our NEOs with incentives that align their financial interests with the interests of our stockholders. The Compensation Committee believes that the use of stock option awards best accomplishes such alignment.

        Our Compensation Committee is authorized under our Equity Incentive Plan to grant incentive stock options and/or nonqualified stock options to purchase shares of our common stock to our employees and nonqualified stock options to purchase shares of common stock to our directors, independent contractors and consultants. We generally make initial stock option grants at the commencement of an executive's employment and additional subsequent grants following a significant change in job responsibilities or to meet other special retention or performance objectives. The Compensation Committee reviews and approves incentive stock option awards to all employees, including NEOs based upon its assessment of individual expected performance, past precedence based on internal job classifications, a review of each executive's existing long-term incentives and retention considerations.

        Other than grants of incentive stock options to Messrs. Choate and Peach, we did not grant any stock options or other equity-based awards to our NEOs in 2010 because none of our NEOs commenced employment or experienced a significant change in job responsibilities during 2010 that warranted such an award. We did grant Mr. Choate an incentive stock option for 644,645 shares of our common stock and we also granted Mr. Peach an incentive stock option for 150,000 shares of our common stock. Each of these awards was made in connection with and as a result of these NEOs' promotions to Chief Executive Officer and Chief Financial Officer, respectively, and were based on the increased scope of the NEO's responsibility in his new position and internal pay equity considerations. The amount of each award was determined by reference to the awards previously granted to and held by the predecessor in the NEO's new position. We also granted Mr. Peach an incentive stock option for 50,000 shares when he assumed the role of our Treasurer in February 2010. This award was based on Mr. Peach's increased scope of responsibilities with respect to the treasury function previously managed by Mr. Choate.

    Employment and Severance Arrangements

        Our board of directors and our Compensation Committee consider the maintenance of a sound management team to be essential to protecting and enhancing our best interests. To that end, we recognize that the uncertainty that may exist among management with respect to their "at-will" employment may result in the departure or distraction of management personnel to our detriment. Accordingly, we have entered into employment agreements with each of our named executive officers that provide for certain severance payments and other post-employment benefits which we believe are appropriate to encourage the continued dedication and attention of these executives. The employment agreements with our named executive officers are described more fully below under '—Potential Payment Upon Termination or Change in Control.

    Perquisites and Other Benefits

        Although perquisites are not a significant factor in our compensation programs, we provide certain limited perquisite and personal benefits to our named executive officers. We provide these benefits to assist our NEOs in performing their services for us and to attract and retain talented executives.

        The Company, at its sole cost, provides health and welfare benefits to each NEO, the NEO's spouse and eligible dependents such as the Company may from time to time make available to its other executives of the same level of employment. We also maintain a 401(k) retirement plan that is available to all eligible employees. We have the discretion to make annually matching contributions to the plan on behalf of our participating employees. Historically, we matched $0.50 for each $1.00 contributed up

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to 6% of each participant's annual compensation with a maximum of $2,500 per participant. The last discretionary match we made was in February 2009 for the 401(k) plan year ending December 31, 2008. We anticipate that a discretionary match will be made for the 401(k) plan year ending December 31, 2010 but have not yet determined the exact formula for each participant. We do expect that the 2010 401(k) match will be less than the historical match described above. Life, accidental death and dismemberment coverage is also offered to all eligible employees and premiums are paid in full by the Company. We also make available to our NEOs a long-term disability plan maintained at our expense. Other voluntary benefits, such as supplemental life and specific coverage insurance supplements are also made available and paid for by our NEOs and other employees. The above benefits are generally available to the NEOs on the same basis as all other eligible employees, subject to relevant regulatory requirements. The Company provides each NEO with an after tax automobile and life insurance allowance in accordance with the terms and conditions of each NEO's employment agreement or applicable Company policy.

    Accounting and Tax Considerations

        Our annual tax aggregate deductions for each NEO's compensation are potentially limited by Section 162(m) of the Internal Revenue Code to the extent the aggregate amount paid to an executive officer exceeds $1.0 million per year, unless it is paid under a predetermined objective performance plan meeting certain requirements, or satisfies one of various other exceptions provided under Section 162(m) of the Internal Revenue Code. At our current NEO compensation levels, we anticipate that Section 162(m) of the Internal Revenue Code would be applicable only with respect to our Chief Executive Officer, and we considered its impact in determining compensation levels for our NEOs in 2010, while also considering the fact that the provisions under Section 162(m) would only be applicable if the Company were to become a public entity.

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2010 Summary Compensation Table

        The following table sets forth the compensation earned by our NEOs. No other executive officers who would have otherwise been includable in the following table on the basis of salary and bonus earned for the year ended December 31, 2010 have been excluded by reason of their termination of employment or change in executive status during the year.

Name and principal position
  Year   Salary ($)   Bonus
($)(1)
  Option
Awards ($)(2)
  Non Equity
Incentive Plan
Compensation
($)(1)(3)
  All Other
Compensation
($)
  Total ($)(1)  
David S. Chernow     2010     78,156                 525,292 (4)   603,448  
  Former President and Chief     2009     473,807     134,193             47,504 (5)   655,504  
  Executive Officer     2008     508,000             838,200     40,730 (6)   1,386,930  

L. Duane Choate

 

 

2010

 

 

458,275

 

 

500,000

 

 

1,263,504

 

 


 

 

53,833

(7)

 

2,275,612

 
  President and Chief     2009     321,777     123,223             50,538 (8)   495,538  
  Executive Officer     2008     345,000             370,013     102,044 (9)   817,057  

Russell D. Phillips, Jr. 

 

 

2010

 

 

285,000

 

 


 

 


 

 


 

 

45,385

(10)

 

330,385

 
  Executive Vice President,     2009     265,816     84,184             56,773 (11)   406,773  
  General Counsel and     2008     285,000             282,150     53,766 (12)   620,916  
  Chief Compliance Officer                                            

Timothy A. Peach

 

 

2010

 

 

228,269

 

 


 

 

392,000

 

 


 

 

27,740

(13)

 

648,009

 
  Chief Financial Officer and     2009     103,038         172,500     26,096     17,254 (14)   318,888  
  Treasurer     2008                          

William L. Pegler

 

 

2010

 

 

230,000

 

 


 

 


 

 


 

 

40,098

(15)

 

270,098

 
  Senior Vice President and     2009     214,518     65,482             66,363 (16)   346,363  
  Chief Operating Officer     2008     230,000             189,750     139,876 (17)   559,626  

Joseph Stork

 

 

2010

 

 

200,000

 

 


 

 


 

 


 

 

26,709

(18)

 

226,709

 
  Senior Vice President and     2009     186,538     43,462             19,341 (19)   249,341  
  Chief Development Officer     2008     200,000         48,800     145,000     42,789 (20)   436,589  

(1)
The amount of any non-equity incentive plan awards and/or bonus payments to be made to our NEOs under our Executive Incentive Plan for services performed in 2010 is not presently calculable and will depend upon the outcome of the Company's financial results for fiscal year 2010. We expect that the amount of any such non-equity incentive plan and/or bonus awards will be determined following the certification of the Company's audited financial statements for fiscal year 2010, which is expected to occur prior to March 31, 2011. Based on preliminary results, we do not expect that our NEOs will be entitled to any awards under the terms of our Executive Incentive Plan for 2010. However, the Compensation Committee may determine to make discretionary bonus payments to NEOs for their performance in 2010. For additional information, refer to the discussion under "Compensation Discussion and Analysis-Executive Incentive Plan Awards" above.

(2)
Amounts represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For the assumptions used in calculating the value of these awards, refer to Note 13 to our consolidated financial statements for the year ended December 31, 2009 included elsewhere in this prospectus.

(3)
Amounts shown in the non equity incentive plan column represent payments made under the Executive Incentive Plan to the NEOs that related to services performed in the applicable year and were paid based on our level of achievement of our applicable performance goals for the relevant year.

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(4)
Includes auto allowance of $2,954, severance payments of $429,846, vacation pay in lieu of time off of $65,869, health, dental and vision benefits of $26,188 and long term disability & term life insurance premiums of $435.

(5)
Includes auto allowance of $19,939, health, dental and vision benefits of $25,265 and long term disability & term life insurance premiums of $2,300.

(6)
Includes auto allowance of $19,200, health, dental and vision benefits of $16,639, 401(k) employer match of $2,750 and long term disability & term life insurance premiums of $2,141.

(7)
Includes auto allowance of $19,628, health, dental and vision benefits of $31,990 and long term disability & term life insurance premiums of $2,215.

(8)
Includes auto allowance of $12,462, health, dental and vision benefits of $35,709 and disability and life insurance of $2,367.

(9)
Includes auto allowance of $12,000, dental and vision benefits of $16,908, relocation reimbursement of $68,245, health, 401(k) employer match of $2,750 and long term disability & term life insurance premiums $2,141.

(10)
Includes auto allowance of $20,000, health, dental and vision benefits of $10,902, vacation pay in lieu of time off of $12,253 and long term disability & term life insurance premiums of $2,230.

(11)
Includes auto allowance of $20,769, health, dental and vision benefits of $8,006, vacation pay in lieu of time off of $25,761 and long term disability & term life insurance premiums of $2,237.

(12)
Includes auto allowance of $20,000, health, dental and vision benefits of $5,834, vacation pay in lieu of time off of $21,924, 401(k) employer match of $2,750 and long term disability & term life insurance premiums of $3,258.

(13)
Includes health, dental and vision benefits of $26,147 and long term disability & term life insurance premiums of $1,593.

(14)
Includes health, dental and vision benefits of $16,474 and long term disability & term life insurance premiums of $780.

(15)
Includes auto allowance of $12,857, health, dental and vision benefits of $24,901 and long term disability & term life insurance premiums of $2,340.

(16)
Includes auto allowance of $13,352, health, dental and vision benefits of $25,800, vacation pay in lieu of time off of $24,771 and long term disability & term life insurance premiums of $2,440.

(17)
Includes auto allowance of $12,857, health, dental and vision benefits of $4,261, vacation pay in lieu of time off of $8,847, relocation reimbursement of $108,730, long term disability & term life insurance premiums of $2,431 and 401(k) employer match of $2,750.

(18)
Includes health, dental and vision benefits of $24,594 and long term disability & term life insurance premiums of $2,115.

(19)
Includes health, dental and vision benefits of $17,041 and long term disability & term life insurance premiums of $2,300.

(20)
Includes health, dental and vision benefits of $9,076, relocation reimbursement of $29,340, long term disability & term life insurance premiums of $1,623 and 401(k) employer match of $2,750.

2010 Grants of Plan-Based Awards

        The following table sets forth the stock option awards that were granted to our NEOs in 2010 and the potential future payouts under non-equity incentive plan awards granted to our NEOs in 2010

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under our Executive Incentive Plan. The actual amounts paid to our NEOs under our Executive Incentive Plan for 2010 are set forth in the 2010 Summary Compensation Table above.

 
   
   
   
   
  Estimated
Future
Payouts
Under
Equity
Incentive
Plan Awards
   
   
   
 
 
   
  Potential Future Payouts Under
Non-Equity Incentive Plan Awards
  All Other
Option
Awards:
Number of
Securities
Underlying
Options(2)
   
   
 
 
   
  Exercise
Price of
Option
Awards
($/Sh)
   
 
 
   
  Grant Date
Fair Value
of Option
Awards ($)
 
Name
  Grant Date   Threshold
($)
  Target ($)   Maximum
($)
  Target (#)
(1)
 

L. Duane Choate

    1/20/2010     275,000     500,000                      

    3/24/2010                 214,881     429,764     3.50     1,263,504  

Russell D. Phillips, Jr. 

    1/20/2010     94,050     171,000                      

Timothy A. Peach. 

    1/20/2010     68,750     125,000                      

    3/24/2010                 16,667     33,333     3.50     98,000  

    4/6/2010                 50,000     100,000     3.50     294,000  

William L. Pegler

    1/20/2010     63,250     115,000                      

Joseph Stork

    1/20/2010     55,000     100,000                      

(1)
Amounts represent the number of shares underlying the performance vesting component of options granted to Messrs. Choate and Peach during 2010. The options will vest upon a change in control of the Company if certain targeted amounts of consideration (which increase over time) are achieved in connection with such a change in control.

(2)
Amounts represent the number of shares underlying the non-performance vesting component of options granted to Messrs. Choate and Peach during 2010. For Mr. Choate, 311,580 shares vested as of the effective date of the option award, with the remaining vesting monthly on the first day of each month over sixteen months. For Mr. Peach, the options vest annually over four years on the anniversary date of the option grant.

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Outstanding Equity Awards at December 31, 2010

        The following table provides information regarding outstanding equity-based awards held by the NEOs as of December 31, 2010. All such equity based awards consist of stock options granted under the Equity Incentive Plan.

OPTION AWARDS  
Name
  Number of
Securities
Underlying
Unexercised Options
Exercisable
  Number of
Securities
Underlying
Unexercised Options
Unexercisable
  Equity
Incentive Plan
Awards(1)
  Option
Exercise
Price
  Option
Expiration
Date
 

L. Duane Choate

    139,673     32,232     85,953   $ 3.50     8/29/2017 (2)

    378,059     51,705     214,881   $ 3.50     3/24/2020 (3)

Russell D. Phillips, Jr. 

   
25,000
   
   
 
$

1.50
   
8/18/2016
 

    171,905         85,953   $ 3.50     8/18/2016  

Timothy A. Peach

   
8,333
   
25,000
   
16,667
 
$

6.60
   
3/31/2019

(4)

        33,333     16,667   $ 3.50     3/24/2020 (4)

        100,000     50,000   $ 3.50     4/6/2020 (4)

William L. Pegler

   
37,500
   
   
 
$

1.50
   
8/18/2016
 

    128,929         64,465   $ 3.50     8/18/2016  

Joseph Stork

   
25,000
   
8,333
   
16,667
 
$

4.75
   
10/30/2017

(4)

    6,667     6,666     6,667   $ 5.35     3/1/2018 (4)

(1)
The options will vest upon a change in control of the Company if certain targeted amounts of consideration (which increase over time) are achieved in connection with such change in control.

(2)
Except for the performance component, which vests as described in footnote (1) above, one quarter vests on the first anniversary date of the option grant with the remainder vesting monthly on the monthly anniversary date of the option grant over three years.

(3)
Except for the performance component, which vests as described in footnote (1) above, 311,580 shares vested as of the effective date of the option award, with the remaining vesting monthly on the first day of each month over sixteen months.

(4)
Except for the performance component, which vests as described in footnote (1) above, vests annually over four years on the anniversary date of the option grant.

Potential Payments Upon Termination or Change in Control

Agreements with our Former and Current CEO

        We entered into employment agreements with the gentlemen that served as our CEO during 2010 in connection with their initial employment by the Company. Each employment agreement established a base salary, an annual target bonus (100% of base salary in the case of Mr. Chernow, our former CEO and 65% of base salary in the case of Mr. Choate, our then CFO) based on our achievement of certain financial performance targets as well as the provision of certain other typical benefits (e.g., vacation time, health benefits, etc.) and, in the case of Mr. Choate, a living accommodation and relocation allowance not to exceed $65,000 to initially commute to Orange County, California and ultimately relocate his residence to the Denver, Colorado area from Houston, Texas. Under each agreement, the executive's employment with us is "at-will." However, in the event of a termination "without cause" or a resignation due to "constructive termination" which the executive could deem to be a termination without cause, the executive is entitled to severance payments from us, consisting of

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bi-weekly payments of base salary in effect at the time of termination for a defined "Salary Continuation Period", provided the executive complies during such period with the non-compete and non-solicitation provisions of the agreement and executes a general release of all claims against us. In the case of a termination in connection with or within nine months following a "change of control" such Severance Payments would be made in a lump sum amount to each executive.

        Mr. Chernow, our former President and Chief Executive Officer, had a Salary Continuation Period of one year and Mr. Choate, our CFO, had a Salary Continuation Period of six months. Mr. Choate's employment agreement was amended in January 2009 to include payment to Mr. Choate during the Salary Continuation Period of his targeted bonus for the year in which the termination occurs. Under each employment agreement, in the event the executive is terminated by us or in the event of death or disability, he or his legal representative will also be entitled to receive "Ancillary Severance Benefits" from us. Ancillary Severance Benefits consist of compensation for all accrued unpaid vacation pay, back wages accrued and accrued sick pay, and except in the case of a termination for "cause," reimbursement of COBRA expenses for the continuation of health benefits for himself and his eligible dependents for an 18-month period or such time the executive becomes eligible for another employer's health insurance, whichever occurs first. In addition, Ancillary Severance Benefits include outplacement services for each executive in an amount not to exceed $15,000.

        The employment agreements provide that in the event the amounts payable to the executive and described above would constitute "excess parachute payments" within Section 280G of the Code, then the amounts payable shall be reduced to the extent necessary to avoid such amounts constituting an excess parachute payment. Each employment agreement was amended in December 2008 in order to ensure compliance with, or an exemption from, Section 409A of the Code.

        The employment agreements also provide that in the event of death or disability, the Company would pay to the executive or his legal representative a lump sum amount equal to half of his then current annual base salary in effect immediately prior to his death or disability. Under the employment agreements, "disability" means that for a period of six (6) months in any twelve (12) month period, the executive is incapable of substantially fulfilling his employment responsibilities and duties because of physical, mental or psychological incapacity resulting from injury, sickness or disease. "Cause," as defined under the terms of the respective employment agreements, means any of the following: (a) the executive enters a plea of guilty or nolo contendere to, or is convicted of, a felony or any other criminal act involving moral turpitude, dishonesty, or theft; (b) the executive has committed gross negligence, willful misconduct or a breach of his fiduciary duties in carrying out his duties; (c) the executive materially breaches the employment agreement and fails to cure such breach (in the event that such breach is capable of being cured) within 30 days following receipt of notice from us setting forth in reasonable detail the nature of such breach; (d) the executive habitually uses drugs or alcohol and such use constitutes an abuse thereof; (e) the executive engages in willful misconduct in the performance of his duties that (i) has a material adverse effect on the Company or (ii) constitutes a material violation of a policy adopted by the Board; or (f) the executive engages in material dishonesty or fraud in the performance of his duties.

        "Constructive termination" means, subject to certain notice and cure periods, (a) with or without a change in his title or formal corporate action, there shall be a material diminution in the nature or scope of the authorities, powers, functions, duties or responsibilities of the executive as set forth in the employment agreement; (b) the executive is not appointed to, or is removed from, the offices or positions provided for in the employment agreement; (c) the executives annual base salary is decreased by the Company; (d) at any time following the executive's initial permanent relocation at the request of the Company, we change our headquarters greater than 30 miles from its then existing location without the executive's consent; (e) we fail to pay the executive's compensation or provide the employee benefits when due; or (f) we materially breach the employment agreement or the performance of our

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duties and obligations thereunder (including any failure to adopt an annual bonus plan in accordance with the employment agreements).

        In February 2010, in connection with Mr. Choate's promotion to President and Chief Executive Officer, we entered into a new employment agreement with Mr. Choate. Mr. Choate's new employment agreement contains substantially similar terms, conditions and definitions as described above. The new employment agreement sets Mr. Choate's target bonus at 100% of his current base salary and provides for a Salary Continuation Period of one year and the payment of one-half of Mr. Choate's targeted bonus for the year in which the termination occurs. A lump sum payment is also provided for in the new employment agreement in the event of a termination in connection with or within nine months after a change in control. The new agreement provides in the event of death or disability, the Company would pay to Mr. Choate or his legal representative a lump sum amount equal to half of his then current annual base salary and half of his current target bonus in effect immediately prior to his death or disability. Similar Ancillary Severance Benefits are payable under Mr. Choate's new employment agreement. Mr. Choate's new employment agreement, which is intended to comply with, or qualify for an exemption from, Section 409A of the Code, does not provide amounts payable thereunder will be reduced if such payments would constitute an excess parachute payment under Section 280G of the Code.

Agreement with our Chief Financial Officer and Treasurer

        We have entered into an employment agreement with Mr. Peach, our current Chief Financial Officer and Treasurer. Under the employment agreement, Mr. Peach is entitled to receive a base salary and a target bonus of 50% of his base salary. The terms, conditions and definitions in Mr. Peach's employment agreement are substantially similar to those outlined above for Messrs. Chernow and Choate. Mr. Peach has a Salary Continuation Period of six months and the employment agreement provides for the payment of his then current target bonus for the year in which the termination occurs during the Salary Continuation Period. Ancillary Severance Benefits are payable to Mr. Peach for a six month period. Mr. Peach's employment agreement does not provide for a living assistance or relocation allowance as he resides in the Denver, Colorado area near our principal executive office in Englewood, Colorado.

Agreements with our Additional NEOs

        Each of our other NEOs (not including Messrs. Chernow, Choate and Peach) is party to an employment agreement with the Company. Under each agreement, the executive officer is entitled to receive a base salary and a target bonus (60% of base salary in the case of Mr. Phillips and 50% of base salary in the case of Messrs. Pegler and Stork). The terms, conditions and definitions in the employment agreements are substantially similar to those outlined above for Messrs. Chernow and Choate. Mr. Phillips has a Salary Continuation Period of one year; Messrs. Pegler and Stork have a Salary Continuation Period of six months. The employment agreements for Messrs. Phillips and Pegler provide for the payment of their respective then current target bonus for the year in which the termination occurs during the Salary Continuation Period. Ancillary Severance Benefits are payable to Mr. Phillips for a twelve month period and Ancillary Severance Benefits are payable to Messrs. Pegler and Stork for a six month period. Mr. Pegler was provided with a living assistance and relocation allowance of $108,730 in connection with the relocation of his residence from San Diego, California to the Denver, Colorado area, and Mr. Stork was provided with a living assistance and relocation allowance of $29,340 in connection with the relocation of his residence from Houston, Texas to the Denver, Colorado area. Mr. Phillips' primary office location remains in Orange County, California.

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        The following table shows the value of severance benefits and other benefits for our 2010 NEOs, excluding Mr. Chernow, under their current employment agreements, assuming each NEO had terminated employment on December 31, 2010.

Name
  Payment Type   Death or
Disability
($)
  Termination
Without
Cause or
"Constructive
Termination"
($)
  Termination
After Change
in Control ($)
 

L. Duane Choate

  Cash Severance     500,000     750,000     750,000  

  Benefit Continuation     30,268     45,268     45,268  
                   

  Total     530,268     795,268     795,268  

Russell D. Phillips, Jr. 

  Cash Severance     228,000     456,000     456,000  

  Benefit Continuation     7,641     22,641     22,641  
                   

  Total     235,641     478,641     478,641  

Timothy A. Peach

  Cash Severance     187,500     250,000     250,000  

  Benefit Continuation     11,782     26,782     26,782  

  Total     199,282     276,782     276,781  
                   

William L. Pegler

  Cash Severance     172,500     230,000     230,000  

  Benefit Continuation     6,892     21,892     21,892  
                   

  Total     179,392     251,892     251,892