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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



Form 10-K



(Mark One)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                to


Commission file number: 333-170812



RADIATION THERAPY SERVICES HOLDINGS, INC.(Exact Name of Registrant as Specified in its Charter)



Delaware(State or Other Jurisdiction of
Incorporation or Organization)

26-1747745(I.R.S. Employer
Identification No.)2270 Colonial Boulevard
Fort Myers, Florida(Address Of Principal Executive Offices)

33907(Zip Code)


(239) 931-7275(Registrant's Telephone Number, Including Area Code)



Securities
registered pursuant to Section 12(b) of the Act:None

Securities
registered pursuant to Section 12(g) of the Act:None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes o    No ý

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes o    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.    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. (Check one):

Large accelerated filer o

Accelerated filer o

Non-Accelerated filer ý (Do not check if a
smaller reporting company)

Smaller reporting Company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o    No ý

None of the voting or non-voting common equity of the registrant is held by a non-affiliate of the registrant. There is no publicly traded
market for any class of common equity of the registrant.

As
of February 1, 2011, there were 1,000 shares of the registrant's common stock, $0.01 par value per share, issued and outstanding, all of which are 100% owned by Radiation
Therapy Investments, LLC.

DOCUMENTS INCORPORATED BY REFERENCE: None.



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Table of Contents



TABLE OF CONTENTS



PART IItem 1.

Business


1Item 1A.

Risk Factors


38Item 1B.

Unresolved Staff Comments


54Item 2.

Properties


54Item 3.

Legal Proceedings


54Item 4.

Removed and Reserved


54PART IIItem 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities


55Item 6.

Selected Financial Data


57Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations


59Item 7A.

Quantitative and Qualitative Disclosures about Market Risk


90Item 8.

Financial Statements and Supplementary Data


91Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


91Item 9A.

Controls and Procedures


91Item 9B.

Other Information


91PART IIIItem 10.

Directors, Executive Officers and Corporate Governance


92Item 11.

Executive Compensation


101Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


128Item 13.

Certain Relationships and Related Party Transactions, and Directors Independence


130Item 14.

Principal Accounting Fees and Services


138PART IVItem 15.

Exhibits and Financial Statement Schedules


138Radiation Therapy Services Holdings, Inc.Report of Independent Registered Public Accounting Firm


F-2CONSOLIDATED BALANCE SHEETS


F-3CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS


F-4CONSOLIDATED STATEMENTS OF CASH FLOWS


F-5CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


F-7NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


F-9SIGNATURESEXHIBIT INDEX


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FORWARD LOOKING STATEMENTS

Some of the information set forth in this Annual Report on Form 10-K contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. We may make other written and oral communications from time to time that contain such statements. Forward-looking statements,
including statements as to industry trends, future expectations and other matters that do not relate strictly to historical facts are based on certain assumptions by management. These statement are
often identified by the use of words such as "may," "will," "expect," "plans," "believe," "anticipate," "intend," "could," "estimate," or "continue" and similar expressions or variations, and are
based on the beliefs and assumptions of our management based on information then currently available to management. Such forward-looking statements are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ
materially from the forward-looking statements include, among others, the risks discussed herein under the heading "Risk Factors." We caution readers to carefully consider such factors. Further, such
forward-looking statements speak only as of the date on which such statements are made and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after
the date of such statements

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PART I

Item 1.Business

References in this Annual Report on Form 10-K to "we", "us", "our" and "the Company" are
references to Radiation Therapy Services Holdings, Inc. and its subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates, unless the context requires
otherwise or unless indicated otherwise. References in this Annual Report on Form 10-K to "Parent" are references to Radiation Therapy Services Holdings, Inc. and not to its
subsidiaries, consolidated professional corporations and associations and unconsolidated affiliates. References in this Annual Report on Form 10-K to "our treatment centers" refer
to owned, managed and hospital based treatment centers.

Our Company

We are a leading provider of advanced radiation therapy services to cancer patients primarily in the United States. We offer a
comprehensive range of radiation treatment alternatives, and focus on delivering academic-quality, cost-effective patient care in a personal and convenient setting. Our first radiation
treatment center opened in 1983, and as of December 31, 2010, we owned or operated 95 treatment centers, 89 of which are freestanding facilities with the six remaining facilities
operated in partnership with hospitals and other groups. Our treatment centers, most of which operate under the21st Century Oncologybrand, are
strategically clustered in 28 local markets in 16 states. We hold market leading positions in most of our local markets.

We
believe we are the largest company in the United States focused principally on providing radiation therapy, and we believe our size provides us with competitive advantages. We have
significant clinical and technological resources available within our national network of local providers, which assist our physicians in accessing the latest advances in research and technology and
in delivering the most effective treatments to our patients. Our nationwide presence also enables us to implement best practices and share new ideas and information across our network. We are able to
leverage our scale by recruiting, developing and training key clinical personnel. For instance, we operate our own dosimetry and radiation therapy schools and have an affiliated physics program. These
in-house capabilities, combined with senior physician leadership, a premier medical board and substantive training and mentoring programs, have allowed us to deliver superior and
innovative patient care with the highest quality standards across our centers. Furthermore, our operational infrastructure and network's size affords advantages in areas such as purchasing,
recruiting, billing and information systems.

Our
operating philosophy is centered upon using the latest available and most advanced technology, and employing leading radiation oncologists to deliver a variety of treatment options
to our patients in each local market. To implement this philosophy, we invest in new software and equipment with the goal of equipping each local market with
state-of-the-art technology that facilitates better clinical results. Through the use of advanced tools we can improve therapeutic outcomes by precisely targeting
cancerous cells and tumors while sparing healthy, surrounding tissues and organs. We are also able to adapt and refine treatments as tumors shrink or change position. We have continued to attract and
retain talented physicians and staff by providing opportunities to work in an environment that has a clinical and research focus, superior end-to-end resources, and high
quality patient care. In addition, in certain local markets we have integrated with physicians in closely related medical specialties in order to provide a continuum of care for cancer patients. We
have organized our Company into eight regional reporting units by geographic locations. We have eight regional directors that report to our Senior Vice President, Director of Regional Operations. Each
regional director is responsible for the overall performance of their respective regions.

We
have built a national platform of treatment centers while increasing both the revenue and profitability of the Company. Since the beginning of 2003, we have internally developed 26
treatment centers and acquired 37 existing treatment centers, and from 2007 to 2010, increased revenues at a

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compound
annual growth rate of 11.7%. We believe that as our scale continues to increase, our network of collaborative care along with our operational and financial resources will not only
differentiate us from many of our competitors, but will also enhance our attractiveness to patients, referral sources, potential employees and acquisition targets. For the year ended
December 31, 2010, our total revenues were $544.0 million.

On
October 19, 2007, our wholly owned subsidiary, Radiation Therapy Services, Inc. ("RTS"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Radiation Therapy Investments, LLC ("RT Investments"), Parent and RTS MergerCo, Inc., a wholly owned subsidiary of Parent, pursuant to which RTS MergerCo, Inc. was merged with and
into RTS with RTS as the surviving corporation and as a wholly-owned subsidiary of Parent (the "Merger"). Upon completion of the Merger, each share of RTS's common stock outstanding immediately prior
to the effective time of the Merger (other than certain shares held by members of RT Investments' management team and certain employees) was converted into $32.50 in cash without interest. The Merger
was consummated on February 21, 2008 (the "Closing"). Immediately following the Closing, Parent became the owner of all of the outstanding common stock of RTS, which in turn, became a wholly
owned indirect subsidiary of RT Investments, and Vestar Capital Partners, Inc. ("Vestar") and its affiliates became the beneficial owners of approximately 57% of the outstanding Class A
voting equity units of RT Investments and its co-investors became the beneficial owners of approximately 26% of the outstanding Class A voting equity units of RT Investments. As a
result, Vestar and its affiliates currently control approximately 83% of the Class A voting equity units of RT Investments through its ability to directly or indirectly control its
co-investors. In addition, at the Closing, the management investors, including current and former directors and executive officers, either exchanged certain shares of RTS's common stock or
invested cash in RTS, in each case, in exchange for Class A voting equity units and non-voting preferred equity units of RT Investments. At the Closing, these management investors
as a group became the beneficial owners of approximately 17% of the outstanding Class A voting equity units of RT Investments. RT Investments also adopted a management incentive equity plan
pursuant to which certain employees are eligible to receive incentive unit awards (Class B and C non-voting equity units) from an equity pool representing up to 13% (as of
immediately following the Closing) of the common equity value of RT Investments. In connection with the Closing, Vestar, its affiliates and these management investors invested approximately
$627.3 million in equity units of RT Investments. Prior to the Closing, RTS existed as a public company having completed its initial public offering in June 2004.

Radiation
Therapy Services Holdings, Inc. is a Delaware corporation and was incorporated October 9, 2007. Our principal executive office is located at 2270 Colonial
Boulevard, Fort Myers, Florida and our telephone number is (239) 931-7275.

Our Industry

According to industry experts, the United States radiation therapy market was estimated to be approximately $8 billion in 2009.
The market's growth is driven by the increasing number of cancer diagnoses and the development and use of increasingly effective technologies that enable more types of cancer-related tumors to be
treated with radiation therapy. The American Cancer Society estimated that approximately 1.5 million new cancer cases were diagnosed in the United States in 2010. As the U.S. population ages,
the number of cancer diagnoses is expected to continue to increase, as approximately 78% of all cancers are currently being diagnosed in people over the age of 55. Radiation therapy is a primary
treatment method for cancer and, according to the American Society for Therapeutic Radiology and Oncology ("ASTRO"), nearly two-thirds of patients diagnosed with cancer receive radiation
therapy during their illness. Radiation therapy's share of the cancer treatment market has increased as a result of new radiation therapy technologies that better target cancerous tumors and lead to
fewer side effects as compared to other forms of treatment and to previous radiation therapy treatments.

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Radiation
therapy is used to treat the most common types of cancer, including prostate, breast and lung cancer. Radiation therapy uses high-energy particles or waves, such as
x-rays, to destroy cancer cells by delivering high doses of radiation to the tumor through a special piece of equipment, known as a linear accelerator. In addition, when a cure is not
possible, radiation therapy is often able to shrink tumors thereby reducing pressure or pain while also relieving other symptoms of the cancer to enhance a patient's quality of life.

Although
the majority of cancer patients receive radiation therapy treatment, individuals diagnosed with cancer may also undergo surgery, chemotherapy and/or biological therapy.
Physicians generally choose the appropriate treatment or combination of treatments based upon the type of cancer, its stage of development and where the cancer is located. Radiation therapy patients
are usually referred to a treatment center or a radiation oncologist by urologists, breast surgeons, general oncologists and general surgeons, in addition to other sources.

Recent
research and technological advances have produced new, advanced methods for radiation treatment. These advanced methods result in more effective treatments that deliver the
necessary doses of radiation while minimizing the harm to healthy tissues that surround the tumor. This is accomplished by modulating the intensity across the tumor and reducing the amount of
radiation leakage resulting in fewer side effects and complications as well as an enhanced quality of life. For instance, new stereotactic radiosurgery planning and equipment, combined with tumor
tracking or respiratory gating
techniques, allow cancers located in the lung and liver to be treated with significantly fewer high dose radiation treatments and higher control rates, which results in less dosage to normal lung or
liver tissue and leads to fewer side effects than before. With the discovery of new, innovative means to deliver radiation therapy and the increasing awareness of advanced treatments with reduced side
effects by patients and physicians, radiation therapy is expected to be a preferred method for treating cancer.

The
radiation therapy market is highly fragmented. Currently, there are over 2,200 locations providing radiation therapy in the U.S., of which approximately 960 were freestanding, or
non-hospital based, treatment centers. Further, approximately 30% of freestanding treatment centers are affiliated with the largest four provider networks, which includes RTS.

Service and Treatment Offerings

We believe our radiation treatment centers are distinguishable from those of many of our competitors because we offer patients a full
spectrum of radiation therapy alternatives, including many advanced treatment options that are not otherwise available in certain geographies or offered by other providers. Our radiation treatment
services include external beam therapies, such as conformal beam treatment, intensity modulated radiation therapy and stereotactic radiosurgery, as well as internal radiation therapy such as
high-dose and low-dose rate brachytherapy. In addition, we utilize various supplementary technologies, including image guided radiation therapy, Gamma Function, respiratory
gating and 3-D conformal treatment planning to improve the effectiveness of the radiation treatments. Finally, we provide an array of complementary support services in the areas of
psychological and nutritional counseling as well as transportation assistance, consistent with applicable regulatory guidelines. Radiation therapy is given in one of two ways: externally or
internally, with some cancers treated utilizing both radiation therapy approaches. Most people undergoing radiation therapy for cancer are treated with external beam radiation therapy. Radiation
therapy is used to treat the most common types of cancers including: prostate, breast, lung and colorectal.

External Beam 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 vary 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 linear accelerator, the most common type of equipment used for external beam radiation therapy, can create

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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 20 to 40 treatments. Treatments generally are given to a patient once each day with each session
lasting for approximately 15 minutes.

Internal Radiation Therapy.Internal radiation therapy also called brachytherapy, 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 called 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. Internal radiation therapy is
typically used for cancers of the lung, esophagus, breast, uterus, thyroid, cervix and prostate. 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; high-dose rate implants are removed after a few minutes.

Since
all of our treatment centers are clustered into local markets, our treatment centers are distinguished from those of many of our competitors by our ability to offer advanced
radiation therapy services. Our advanced radiation treatment services include: image guided radiation therapy, intensity modulated radiation therapy, 3-D conformal treatment planning,
stereotactic radiosurgery Gamma Function, respiratory gating and high-dose and low-dose rate brachytherapy.

The
following table sets forth the forms of radiation therapy treatments and advanced services that we offer:

Technologies

DescriptionExternal Beam TherapyConformal Beam Treatment

Enables radiation oncologists to utilize linear accelerator machines to direct radiation beams at the cancer.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.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.Internal Radiation TherapyHigh-Dose Rate Remote Brachytherapy

Enables radiation oncologists to treat cancer by internally delivering higher doses of radiation directly to the cancer.Low-Dose Rate Brachytherapy

Enables radiation oncologists to treat cancer by internally delivering lower doses of radiation directly to the cancer over an extended period of time (e.g., prostate seed implants).


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Technologies

DescriptionAdvanced Services Used with External Beam Treatment TherapiesIGRT

Enables radiation oncologists to utilize imaging at the time of treatment to localize tumors and to accurately mirror the contour of a tumor from any angle.Gamma Function

Proprietary capability that for the first time enables measurement of the actual amount of radiation delivered during a treatment. Gamma Function also enables us to verify radiation delivery and compare it
to the physician prescription and treatment plans. Further, it provides the physician with information to adjust for changes in tumor size and location, and ensures immediate feedback for adaption of future treatments as well as for quality
assurance.Respiratory Gating

Coordinates treatment beam activation with the respiratory motion of the patient, thereby permitting accurate delivery of radiation dosage to a tumor that moves with breathing, such as lung and liver
cancers.3-D Conformal Treatment Planning

Permits accurate, 3-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.


Conformal Beam Treatment.This technology allows the radiation oncologist to utilize a linear accelerator machine to direct
radiation beams at the
cancer. Utilization of specialized equipment and planning systems allow 3D computer images to be accessed to develop complex plans to deliver highly-conformed (focused) radiation while sparing normal
adjacent tissue.

Intensity Modulated Radiation Therapy.With IMRT, radiation can be focused at thousands of pinpoints and delivered by varying
levels of beam
intensity directly to a tumor. Because IMRT uses variable intensity beams, it can be used to treat tumors to higher doses and better spare normal tissue. IMRT technology can be programmed to actually
wrap and angle beams of radiation around normal tissue and organs, protecting healthy tissue as it destroys the tumor. As such, IMRT patients typically experience fewer side effects, which helps them
to maintain their strength and lead more normal lifestyles during treatment.

Stereotactic Radiosurgery/Stereotactic Radiotherapy.Stereotactic radiosurgery/radiotherapy involves a single or a few intense
high-dose
fraction(s) of radiation to a small area. This form of therapy typically is used to treat tumors that cannot be treated by other means, such as surgery or chemotherapy. Precise calculations for
radiation delivery are required. Treatment also requires extensive clinical planning and is provided in conjunction with the referring surgeon and under the direct supervision of a radiation
oncologist and a physicist. Stereotactic radiosurgery often involves very careful immobilization of the patient. For example, cranial radiosurgery might involve the use of a neurosurgical head frame
to assure precise tumor localization. With recent advances in imaging technologies, stereotactic radiosurgery can now be used to treat extra-cranial cancers to a higher dose with target localization
and image verifications. These advances broaden the types of cancers that can be successfully treated with stereotactic radiosurgery.

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Brachytherapy.Brachytherapy involves the use of surgical and fiberoptic procedures to place high-dose rate or low-dose rate
sources of radiation in the patient's body. This technique is used for implantation of sources into the prostate, intraluminal therapy within the esophagus and endobronchial therapy within the lungs,
among other places within the body. Prostate seed implants involve the permanent placement of radioactive pellets within the prostate gland.

High-Dose Rate Remote Brachytherapy.In high-dose rate remote brachytherapy, a computer sends the radioactive source through
a tube to a catheter or catheters that have been placed near the tumor by the specialist working with the radiation oncologist. The radioactivity remains at the tumor for only a few minutes. In some
cases, several remote treatments may be required, and the catheters may stay in place between treatments. High-dose rate remote brachytherapy is available in most of our local markets and
patients receiving this treatment are able to return home after each treatment. This form of brachytherapy has been used to treat cancers of the cervix, breast, lung, biliary tree, prostate and
esophagus. MammoSite® Radiation Therapy is used for partial breast irradiation and works by delivering radiation from inside the lumpectomy cavity directly to the tissue where the cancer
is most likely to recur.

Low-Dose Rate Brachytherapy.We are actively involved in radioactive seed implantation for prostate cancer, the most frequent
application
of low-dose rate brachytherapy. There are several advantages to low-dose rate brachytherapy in the treatment of prostate cancer, including convenience to the patient as the
patient generally can resume normal daily activities within hours after the procedure. This procedure is performed by a team of physicians and staff with
nearly a decade of experience in prostate brachytherapy. During the procedure, radioactive sources or "seeds" are inserted directly into the prostate, minimizing radiation exposure to surrounding
tissues while permitting an escalation of the dose concentrated in the area of the cancer.

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All of our markets provide external beam treatments and following is a list of the advanced services and treatments that we offer within each of our 28 local
markets and our international center as of December 31, 2010:

Stereotactic

BrachytherapyLocal market

Year
Established

Number
of Centers

IMRT

3-D

Gamma

Gating

IGRT

Cranial

Extra-
Cranial

High
Dose

Low
DoseLee CountyFlorida


1983


7

ü

ü

ü

ü

ü

ü

ü

ü

üCharlotte/Desoto CountiesFlorida


1986


1

ü

ü

ü

ü

ü

ü

ü

üSarasota/Manatee CountiesFlorida


1992


5

ü

ü

ü

ü

ü

ü

ü

üCollier CountyFlorida


1993


3

ü

ü

ü

ü

ü

ü

ü

üBroward CountyFlorida


1993


5

ü

ü

ü

ü

ü

ü

ü

üMiami/Dade CountyFlorida


1996


1

ü

ü

ü

ü

ü

ü

ü

üLas Vegas, Nevada


1997


5

ü

ü

ü

ü

ü

ü

ü

ü

üWestchester/BronxNew York


1997


3

ü

ü

ü



ü



ü

üMohawk Valley, New York


1998


2

ü

ü

ü



ü

ü

ü

üDelmarva Peninsula


1998


3

ü

ü

ü



ü

ü

ü

üNorthwest Florida


2001


3

ü

ü

ü

ü

ü

ü

ü

üWestern North Carolina


2002


7

ü

ü

ü



ü

ü

ü

ü

üPalm Beach CountyFlorida


2002


1

ü



ü



ü





üCentral Kentucky


2003


3

ü

ü

ü

ü

ü

ü

ü

üFlorida Keys


2003


1

ü

ü

ü



ü

ü

ü

üSoutheastern Alabama


2003


2

ü

ü

ü

ü

ü

ü

ü

üCentral Maryland


2003


7

ü

ü

ü

ü

ü

ü

ü

üSouth New Jersey


2004


4

ü

ü

ü



ü





üRhode Island


2004


4

ü

ü

ü



üCentral Arizona


2005


6

ü

ü

ü



ü

ü

ü

ü

üCentral Massachusetts


2005


2

ü

ü

ü



üPalm Springs, California


2005


4

ü

ü

ü

ü

ü

ü

ü

ü

üLos Angeles, California


2006


4

ü

ü

ü



ü



ü

ü

üSoutheastern Michigan


2006


5

ü

ü

ü



ü

ü

ü

üNorthern California


2007


2

ü

ü

ü

ü

ü





üEastern North Carolina


2007


2

ü

ü

ü



ü



ü

üNortheast Florida


2008


1

ü







ü



üSouth Carolina


2010


1

ü

ü





ü

ü

üInternational


2008


1

ü

ü95


Advanced Services.We also offer advanced services, such as IGRT, Gamma Function testing, respiratory gating and conformal
treatment planning.

Image Guided Radiation Therapy.This technology provides the radiation oncologist with a mechanism to achieve increased
precision in radiation
therapy targeting. The technique utilizes high-resolution x-rays, CT scans or ultrasound imaging to pinpoint internal tumor sites before treatment and overcomes the limitations
of conventional skin marking traditionally used for patient positioning. IGRT represents the convergence of medical imaging and high precision external beam therapy.

Gamma Function.Gamma Function is a proprietary capability that for the first time enables measurement of the actual amount of
radiation delivered
during a treatment. This technology consists of an x-ray detector that measures the output of a radiation beam as it exits from the patient, and software that calculates the dose received
by the patient from this output measurement. Additional software then performs a statistical comparison of the calculated dose with the planned radiation dose and notifies the radiation oncologist of
any significant deviations between the treatment plan and the actual dose delivery. This provides the physician with information to adjust for changes in tumor size

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and
location and ensures immediate feedback for adaption of future treatments as well as for quality assurance.

Respiratory Gating.This noninvasive technique allows radiation targeting and delivery to account for respiratory motion in the
treatment of cancers
in the lung and upper abdomen, protecting healthy structures while directing higher doses of radiation to the tumor. Respiratory gating matches radiation treatment to a patient's respiratory pattern.
When a person breathes, the chest wall moves in and out, and any structures inside the chest and upper abdomen also move. In the past, when radiation beams were aimed at a target inside those areas of
the body, movement had to be accounted for by planning a large treatment area. With respiratory gating, radiation treatment is timed to an individual's breathing pattern with the beam delivered only
when the tumor is in the targeted area.

3-D Conformal Treatment Planning.3-D conformal treatment planning and computer simulation produces an accurate image of the
tumor and surrounding organs so that multiple radiation beams can be shaped exactly to the contour of the treatment area. Because the radiation beams are precisely focused, nearby normal tissue is
spared from radiation. In 3-D conformal treatment planning, state-of-the-art radiation therapy immobilization devices and computerized dosimetric
software are utilized so that CT scans can be directly incorporated into the radiation therapy plan.

Our Business Strengths

We believe that the following competitive strengths have allowed us to achieve and maintain our position as a leading provider of
radiation therapy:

National Platform with Strong Local Market PositionsWe currently serve patients in 28 local markets across 16 states, including Alabama, Arizona,
California, Delaware, Florida, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, South Carolina, Rhode Island and West Virginia. Most of our treatment centers
are strategically clustered into regional networks (which we refer to as our local markets) in order to leverage our clinical and operational expertise over a larger patient population and maximize
our investment in advanced technologies. For example, our local markets enable us to share scarce and expensive medical physicists, who are critical in the process of developing the radiation
treatment plan for each patient as well as making sure the equipment is properly calibrated. We generally have two physicists at three to four treatment centers in each of our local markets (as
opposed to in each treatment center) which increases resource utilization and provides enhanced treatment consistency. In addition, we are able to provide our patients with a full technological
spectrum, including less common treatment alternatives, by equipping each of our local markets, as opposed to each treatment center, with the necessary technology and know-how and thus
doing so on a more cost-effective basis. Our scale also allows us to serve as a center for leading clinical research and technological advances, which helps us attract and retain talented
radiation oncologists, physicists and other professionals. Furthermore, our national platform, reputation, recruiting ability and market knowledge enable us to respond quickly and efficiently to new
acquisition as well as de novo opportunities. Since the beginning of 2003, we have acquired or developed 63 treatment centers and entered into 16 new local markets. Finally, our centralized approach
to business functions such as purchasing, accounting, administration, billing and information technology enables us to leverage economies of scale in various direct and indirect costs.

Best in Class Clinical and Technological PlatformWe believe that we have best in class technology, which allows us to provide the highest quality
of
care and clinically advanced treatment options to our patients. We periodically upgrade our equipment and technology, and we believe they will require minimal maintenance capital expenditures in the
near future. We believe we are the market leader in the utilization of advanced technologies, such as IMRT, IGRT and our recently-developed Gamma Function. These technologies are more effective at
treating many forms of cancer than other, older technologies such as conformal beam. Our continuous and early adoption of technology platforms has

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allowed
us to implement and share technology and our knowledge across our centers very quickly and therefore enhance clinical expertise within the Company and the industry overall. Our Chief
Technology Officer, who is certified in radiotherapy physics, has received numerous awards, serves as an adjunct professor and is a published author in a variety of fields and has spent
20 years in his current role with the Company managing 66 physicists and an internal radiation equipment development and maintenance team. Our Senior Vice President of Clinical Operations has
been with the Company for 10 years and is a leading radiation oncologist who conducts radiation therapy research projects, publishes professional journal articles and presents at national
cancer treatment meetings. These members of management and the teams that they lead provide both technical and clinical expertise throughout our network, enhancing the level of patient care, safety,
and quality control. We feel our clinical and technological platform provides us with a significant competitive advantage in attracting
new professional talent, upgrading equipment and operations of acquired centers, and the opportunity to distinguish ourselves with referral sources, payers and patients.

Leading Radiation OncologistsWe have been successful in recruiting, acquiring practices from, and retaining radiation oncologists with excellent
academic and clinical backgrounds who we believe have potential for professional growth. Our approximately 112 radiation oncologists have an average of over 17 years of experience and we
believe our most senior clinical leadership are regarded as industry leaders. As a physician-led organization, we value superior training, research capabilities and mentoring. In addition
to being educated and trained at some of the world's most prestigious and well recognized medical training centers and universities, our physicians have held positions in radiation oncology's elite
research institutes, societies and regulatory bodies. These institutions and societies include ASTRO, ACRO, AFROC and Radiation Therapy Oncology Group. Our clinical leadership also publishes
frequently as academic contributors, having co-authored numerous white papers, radiation therapy research projects, and empirical studies in a wide range of international and domestic
medical journals. We attract and retain our existing physicians by:



Favorable Industry DynamicsCancer treatment is a large and growing market. In 2006, there were approximately 11.4 million people living with
cancer or with a history of cancer in the United States. The market has been growing, with approximately 1.5 million new cases being diagnosed in the United States in 2010. Radiation therapy
remains a core treatment for cancer with nearly two-thirds of cancer patients receiving radiation therapy during their illness. The U.S. radiation therapy market was estimated to be
approximately $8 billion in 2009. We believe that several factors will contribute to the

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continued
expansion of the cancer treatment market and increased utilization of radiation therapy as one of the primary treatment methods, including:



Stable and Growing Business with Strong Operating Cash FlowThere are several underlying factors that we believe contribute to the stability and
growing performance of our business; most notably, the aging of the U.S. population and resultant rise in cancer cases, and that radiation therapy remains a primary tool used to treat cancer.
Additionally, our growth is attributable to our utilization of more advanced treatment technologies, which typically generates higher revenue growth and higher margins. In addition to stable and
growing revenues, our base business includes characteristics that produce significant operating cash flow such as low operating costs and minimal working capital needs. The generation of operating
cash flow allows us to either reinvest in our business through capital expenditures and growth initiatives and/or reduce indebtedness, each as determined by our business and financial strategies.

Strong Track Record of Successful Acquisitions and De Novo Facility DevelopmentWe have grown at a measured pace through a focused strategy of
acquisitions and development of freestanding and hospital-based treatment centers. Since the beginning of 2003, we have acquired 37 treatment centers and have a successful track record of integrating
our acquisitions as a result of our ability to leverage regional resources and technology, improve the mix of treatments, and put in place more favorable contracts for insurance and medical supplies
that take advantage of our size. We have a deep corporate development team and unique market analysis software that enables us to proactively identify and prioritize acquisition targets based on
demographics, payer landscape and competition, among other things. The radiation therapy market is highly fragmented, as approximately 30% of the market's freestanding centers are affiliated with the
four largest provider networks, which includes Radiation Therapy Services, Inc. As a result, we believe our pipeline of potential targets is robust and acquisitions will remain a significant
part of our core growth strategy. As a leading national platform company in the industry, we believe we are a preferred acquirer in light of the services and benefits we can offer.

Since
the beginning of 2003, we have also developed 26 de novo treatment centers and we continue to seek opportunities to develop additional de novo treatment centers as a means to
strengthen our local market share. De novo treatment centers allow us to penetrate underserved markets or extend our local network and typically require lower initial capital expenditures. De novo
treatment centers
typically generate positive cash flow within six months after opening in an existing market and twelve to fifteen months after opening in a new market.

Experienced and Committed Management Team and Equity SponsorOur senior management team, several of whom are practicing radiation oncologists, has
extensive public and private sector experience in healthcare, in particular radiation oncology. Excluding our recently appointed Chief Financial Officer, our senior management team has been with us
for an average of 17 years and averages approximately 24 years in the radiation therapy industry. Since 1999, members of our management

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team
have helped to grow the Company from $56.4 million in total revenues to $544.0 million of total revenues for the year ended December 31, 2010. This growth has occurred both
organically and through the integration of 45 treatment centers acquired since 1999. In addition, our equity sponsor, Vestar, has considerable experience making successful investments in a wide
variety of industries, including healthcare.

Our Business Strategy

We believe we are in a superior position relative to our competitors to capitalize on the opportunities in our market given our size,
market locations, access to capital and clinical expertise as well as our experienced physician base and management team. The key elements to our strategy are:

Maintain Emphasis on Service and Quality of CareWe focus on providing our patients with an environment that minimizes the stress and uncertainty
of
being diagnosed with and treated for cancer. We aim to enhance patients' overall quality of life by providing technologically advanced radiation treatment alternatives that deliver more effective
radiation directly to cancerous cells while minimizing harm to surrounding tissues and reducing side effects. As an example, one of our most recent technologies, Gamma Function, provides enhanced
quality control during treatment delivery. Gamma Function effectively measures the radiation byproduct, or throughput, as the beam exits the body, thereby measuring the accuracy of the radiation
delivery to the prescribed tumor site and giving the physician more frequent opportunities to re-design treatment plans during a course of an overall treatment regimen. Additionally, we
verify every accelerator's output daily and voluntarily re-calibrate each machine annually using the services provided by the M.D. Anderson Radiation Physics Center at the University of
Texas to ensure that our stringent quality control standards are met. We have a compliance program that is consistent with guidelines issued by the OIG
of the DHHS. Our compliance team, led by a senior officer who has been with the Company since 2004, coupled with our in-house physics and maintenance departments, complements our
front-end focus on employing the best physicians and using the most advanced technologies to provide our patients with superior care in a safe and quality-controlled environment.

Our
treatment centers are designed to deliver high-quality radiation therapy in a patient-friendly environment and are generally located in convenient, community-based
settings. We make every effort to see patients within 24 hours of a referral and to begin treatment as soon as possible thereafter. In addition, our radiation oncologists are available to
patients at any time to discuss proposed treatments, possible side effects, and expected results of treatment. Finally, we offer support services in the areas of psychological and nutritional
counseling as well as transportation assistance, consistent with applicable regulatory guidelines, each of which improves the patient experience. We believe our focus on patient service enhances the
quality of care provided, differentiates us from other radiation therapy providers and strengthens our relationships with referring physicians.

Increase Revenue and Profitability of Our Existing Treatment CentersWe plan to continue to provide capital, support and technology to our
existing
centers to drive increased treatment volume, improve treatment mix, and leverage our strong market presence to generate operating efficiencies. We believe our scale and strategy of clustering
treatment centers in local markets provide unique advantages for driving referrals, improving payer relationships and enhancing our clinical reputation, all of which lead to growth in patient volume.
To drive increased operational efficiencies and increased profitability initiatives, in 2009 we refined our operating infrastructure to delineate between operating and clinical management at the
senior management level. We now have eight regional directors each with separate responsibility for business operations within their region. In concert with a newly revamped clinical board staffed
with internal and external thought leaders in radiation oncology, this has allowed us to identify, measure and execute on opportunities for expense reduction and enhanced profitability. An example of
one such initiative undertaken in 2009 was a more efficient approach to market optimization. Working with both the clinical and regional operations teams, we were able to recognize

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areas
for improved technological coverage as well as identify a number of centers for closure as the existing patient volume could be serviced with a smaller, lower cost configuration of centers.
Going forward, we believe this dual operating and clinical structure will not only continue to help us focus on increasing operating leverage but also more quickly facilitate the penetration of
advanced technology and treatment methods across our centers, which enhances our overall treatment mix as newer technologies and treatments replace those that are older and less effective. We believe
benefits resulting from leveraging our network of centers will continue to grow as we expand the platform through strategic acquisitions and internally developed treatment centers.

Continue to Lead in Clinical ExcellenceFor more than 20 years, we believe we have
differentiated ourselves from other industry participants by proactively investing in a superior, research-driven clinical and technological infrastructure that has advanced our clinical treatment
capabilities. As early as 1989, we founded, and still run, the only fully accredited privately-owned radiation therapy and dosimetry schools in the country. In addition, we have an affiliated physics
program with the University of Pennsylvania. As a result, we have recruited, trained, certified and retained many highly-talented medical physicists, dosimetrists and radiation therapists. Further, we
have consistently invested in industry-leading and revolutionary technologies, through partnerships with renowned research institutes, proprietary experimental research entities and other
for-profit businesses. We have also, through our own research initiatives and resources, developed and implemented treatment technologies exclusive to the Company. For example, Gamma
Function (more fully described above) is an in-house developed software tool that we use to measure the quality of radiation therapy delivered to our patients. Currently, we are exploring
more formalized initiatives to use our vast amount of data to lead and support studies and programs measuring quality outcomes of various treatment protocols.

Expand Through AcquisitionsAcquisitions are an important part of our expansion plan, and we have invested in unique tools and a substantial
infrastructure to capitalize on acquisition opportunities. We will seek to enter new local markets and grow our existing markets through the acquisition of established treatment centers with leading
radiation oncologists, meaningful local market share and significant growth prospects. The foundation of our acquisition strategy is the implementation of our proven operating model at each of our
newly acquired treatment centers. This includes upgrading existing equipment and technologies where applicable, enhancing treatment mix, introducing advanced therapies and services, providing clinical
expertise and enabling our new physicians and patients to access our broad network of centers, contracts and resources. For example, our existing physicians and clinical experts are often able to
educate the physicians at our acquired centers on the clinical benefits of using advanced technologies such as IMRT and IGRT, thereby increasing the penetration of these services in the center's
overall treatment mix and resulting in higher average revenue per treatment, increased profitability and improved patient care. We are currently considering a number of acquisition opportunities, some
of which could be material.

Develop New Treatment Centers in Existing and New MarketsWe plan to develop treatment centers to expand our existing local markets and
selectively
enter new local markets. As of December 31, 2010, we have one replacement de novo treatment center under development. We have significant experience in the design and construction of radiation
treatment centers, having internally developed 26 treatment centers since the beginning of 2003. In 2009, we opened de novo treatment centers in Hammonton, New Jersey; Indio, California; Fort Myers,
Florida; Southbridge, Massachusetts; Gilbert, Arizona; Providence, Rhode Island and Yucca Valley, California, and in 2010, we opened de novo treatment centers in Pembroke Pines, Florida and Los
Angeles, California. We evaluate potential expansion into new and existing local markets based on demographic characteristics, pre-existing relationships with physicians or hospitals, the
competitive landscape and the payer and regulatory environments. Our newly-developed treatment centers typically achieve positive cash flow within six to fifteen months after opening, depending upon
whether it is an existing or new market, and the use of third party

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organizations
minimizes our up front capital requirements. We may also from time to time enter new local markets through strategic alliances and joint ventures.

Expand Through Affiliations with Other Oncologists and SpecialistsIn select local markets, it may be advantageous to affiliate with physicians in
medical specialties that are not primarily focused on radiation oncology, but are involved in the continuum of care for cancer patients. We may pursue these affiliations when opportunities arise to
provide our patients with a more comprehensive treatment team to better target and treat tumors. In these instances, we believe we can further strengthen both our clinical working relationships and
our standing within the local medical community. We currently operate as a multi-specialty group practice in a limited number of our markets, principally with other oncologists, including
gynecological, surgical oncologists, and urologists.

Operations

We have 28 years of experience operating radiation treatment centers. We have developed an integrated operating model, which is
comprised of the following key elements:

Treatment Center Operations.Our treatment centers are designed specifically to deliver high-quality radiation therapy in a
patient-friendly environment. A treatment center typically has one or two linear accelerators, with additional rooms for simulators, CT scans, physician
offices, film processing and physics functions. In addition, treatment centers include a patient waiting room, dressing rooms, exam rooms and hospitality rooms, all of which are designed to minimize
patient discomfort.

Cancer
patients referred to one of our radiation oncologists 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 medical staff engages in clinical treatment planning.
Clinical treatment planning utilizes x-rays, CT imaging, ultrasound, PET imaging and, in many cases, advanced computerized 3-D conformal imaging programs, in order to locate
the tumor, determine the best treatment modality and the treatment's optimal radiation dosage, and select the appropriate treatment regimen.

Our
radiation treatment centers typically range from 5,000 to 12,000 square feet, have a radiation oncologist and a staff ranging between ten and 25 people, depending on treatment center
capacity and patient volume. The typical treatment center staff includes: radiation therapists, who deliver the radiation therapy, medical assistants or medical technicians, an office financial
manager, receptionist, transcriptionist, block cutter, file clerk and van driver. In markets where we have more than one treatment center, we can more efficiently provide certain specialists to each
treatment center, such as physicists, dosimetrists and engineers who service the treatment centers within that local market.

Standardized Operating Procedures.We have developed standardized operating procedures for our treatment centers in order to
ensure that our
professionals 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 physicians, physicists, dosimetrists and radiation therapists and permit the
interchange of employees among our treatment centers. In addition, standardized procedures facilitate the training of new employees.

Coding and Billing.Coding involves the translation of data from a patient's medical chart to our billing system for submission
to third-party
payers. Our treatment centers provide radiation therapy services under approximately 60 different professional and technical codes, which determine reimbursement. Our Medical Director and Chief
Compliance Officer along with our certified professional coders work together to establish coding and billing rules and procedures to be utilized at our radiation treatment centers providing
consistency across centers. In each radiation treatment center,

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our
certified coders are in charge of executing these rules and procedures with the trained personnel located at each treatment center. To provide an external check on the integrity of the coding
process,
we conduct internal 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. Billing and collection
functions are centrally performed by staff at our executive offices.

Management Information Systems.We utilize centralized management information systems to closely 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, as well as 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 developed a proprietary image and text retrieval system referred to as the Oncology Wide-Area Network ("OWAN"), which facilitates the storage and
review of patient medical charts and films. 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 practices we acquire.

Maintenance and Physics Departments.We have established maintenance and physics departments which implement standardized
procedures for the
acquisition, installation, calibration, use, maintenance and replacement of our linear accelerators, simulators and related equipment, as well as to the overall operation of our treatment centers. Our
engineers, in conjunction with manufacturers' representatives, perform preventive maintenance, repairs and installations of our linear accelerators. This enables our treatment centers to ensure
quality, maximize equipment productivity and minimize downtime. In addition, the maintenance department maintains a warehouse of linear accelerator parts in order to provide equipment backup. Our
physicists monitor and test the accuracy and integrity of each of our linear accelerators on a regular basis to ensure the safety and effectiveness of patient treatment. This testing also helps ensure
that the linear accelerators are uniformly and properly calibrated. Independent machine verifications are done annually using the services provided by the M.D. Anderson Radiation Physics Center to
confirm proper calibrations.

Total Quality Management Program.We strive to achieve total quality management throughout our organization. Our treatment
centers, either directly
or in cooperation with the appropriate professional corporation or hospital, have a standardized total quality management program consisting of programs to monitor the design of the individual
treatment of the patient via the evaluation of charts by radiation oncologists, physicists, dosimetrists and radiation therapists and for the ongoing validation of radiation therapy equipment. Each of
our new radiation oncologists is assigned to a senior radiation oncologist who reviews each patient's course of treatment through the patient's medical chart using our OWAN. Furthermore, the data in
our patient database is used to evaluate patient outcomes and to modify treatment patterns as necessary to improve patient care. We also utilize patient questionnaires to monitor patient satisfaction
with the radiation therapy they receive.

Clinical Research.We believe that a well-managed clinical research program enhances the reputation of our radiation oncologists
and our
ability to recruit new radiation oncologists. Our treatment centers participate in national cooperative group trials and we have a full-time, in-house research staff to assure
compliance with such trials and to perform related outcome analyses. We maintain a proprietary database of information on over 120,000 patients. The data collected includes tumor characteristics such
as stage, histology and grade, radiation treatment parameters, other treatments delivered and complications. This data can be used by the radiation oncologists and others to conduct research, measure
quality outcomes and improve patient care. These research and outcome studies often are presented at international conferences and published in trade journals. Through 2010, our radiation oncologists
have published more than 640 articles in peer reviewed journals and related periodicals.

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Educational Initiatives.In 1989, we founded The Radiation Therapy School for Radiation Therapy Technology, which is accredited
by the Joint Review
Committee on Education in Radiologic Technology. The school trains individuals to become radiation therapists. Upon graduation, students become eligible to take the national registry examination
administered by the American Registry of Radiologic Technologists. Radiation therapists are responsible for administering treatments prescribed by radiation oncologists and monitoring patients while
under treatment. Since opening in 1989, the school has produced 132 graduates, 65 of whom are currently employed by us.

Recognizing
a growing need for individuals trained in treatment planning, we founded a Training Program for Medical Dosimetry in 2005. A total of 18 trainees/prospective students have
completed or are in the process of completing the program in dosimetry. As of December 31, 2010, 15 trainees have completed the program with one senior in progress and two students matriculated
effective January 2011. Two students successfully passed the certifying exam administered by the Medical Dosimetry Certification Board in June 2010, with five eligible trainees scheduled to sit for
the exam in September 2011. In November 2010, the program applied for initial accreditation via the Joint Review Committee on Education in Radiologic Technology (JRCERT; www.jrcert.org) effective with
the matriculation in January 2011 of the two students as members of the January 2011December 2011 class.

In
addition, we have an affiliated physics program with the University of Pennsylvania.

Privacy of Medical Information.We focus on being compliant with regulations under the Health Insurance Portability and
Accountability Act of 1996,
as modified by Title XIII, subtitle D of the Health Information Technology for Economic and Clinical Health Act (collectively, "HIPAA"), regarding privacy, security and transmission of health
information. We have implemented such regulations into our existing systems, standards and policies to ensure compliance.

Compliance Program.We have a compliance program that is consistent with guidelines issued by the OIG of the DHHS. As part of
this compliance
program, we adopted a code of ethics and have a full-time compliance officer at the corporate level. Our program includes an anonymous hotline reporting system, compliance training
programs, auditing and monitoring programs and a disciplinary system to enforce our code of ethics and other compliance policies. It also includes a process for screening all employees through
applicable federal and state databases of sanctioned individuals. Auditing and monitoring activities include claims preparation and submission and also cover issues such as coding, billing, regulatory
compliance and financial arrangements with physicians. These areas are also the focus of our specialized training programs.

Treatment Centers

As of December 31, 2010, we owned, operated and managed 89 freestanding and six hospital-based treatment centers in our 28 local
markets and our international center of which:



Internally Developed.As of December 31, 2010, we operated 39 internally developed treatment centers located in Arizona,
California, Florida,
Maryland, Massachusetts, Nevada, New Jersey, New York, Rhode Island and Mohali, India. In 2009, we developed new treatment centers in Hammonton, New Jersey; Indio, California; Fort Myers,
Florida; Southbridge, Massachusetts; Gilbert, Arizona; Providence, Rhode Island and Yucca Valley, California, and in 2010, we opened de novo treatment centers in Pembroke Pines, Florida and Los
Angeles, California. Our team is experienced in the design and construction of radiation treatment centers, having developed 17 treatment centers in the past three years. Our newly-developed treatment
centers typically achieve positive cash flow within

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six
to fifteen months after opening. The following table sets forth the locations and other information regarding each of our internally developed radiation treatment centers in our local markets as
of December 31, 2010:

Treatment Center

YearLee CountyFloridaBroadway

1983Cape Coral

1984Lakes Park

1987Bonita Springs

2002Lehigh Acres

2003Lee Cancer Center

2009Charlotte/Desoto CountiesFloridaPort Charlotte

1986Sarasota/Manatee CountiesFloridaEnglewood

1992Sarasota

1996Venice

1998Bradenton

2002Lakewood Ranch

2008Collier CountyFloridaSouth Naples

1993North Naples

1999NorthwestFloridaDestin

2004Crestview

2004Miami-Dade CountyFloridaAventura

2007Palm Beach CountyFloridaWest Palm Beach(1)

2002NortheastFloridaJacksonville

2008Las Vegas, NevadaHenderson*

2000Fort Apache*

2008Central MarylandOwings Mills(2)

2003Westchester/BronxNew YorkBronx/Lebanon*

2009South New JerseyHammonton

2009Rhode IslandWoonsocket(3)

2004South County(4)

2005Providence(5)

2007Providence(6)

2009Central ArizonaScottsdale

2007Gilbert

2009


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Treatment Center

YearPalm Springs, CaliforniaPalm Desert*

2005Rancho Mirage*

2008Yucca Valley*

2009Indio*

2009Central MassachusettsSouthbridge(7)*

2009Los Angeles, CaliforniaCorona*

2008El Segundo*

2010InternationalIndiaMohali(8)

2008Broward CountyFloridaPembroke Pines

2010


*These
radiation therapy treatment centers are operated through an administrative services agreement.(1)We
own a 50.0% ownership interest in the limited liability company (LLC) that provides radiation oncologists and operates the treatment center; we also
provide physics and dosimetry services to the LLC.(2)We
have a 90.0% ownership interest in this treatment center.(3)We
have a 62.0% ownership interest in this treatment center.(4)We
have a 65.0% ownership interest in this treatment center.(5)We
have a 51.0% ownership interest in this treatment center.(6)We
have a 45.0% ownership interest in this treatment center.(7)We
have a 72.5% ownership interest in this treatment center.(8)We
have a 50.0% ownership interest in this treatment center.


Acquired Treatment Centers.As of December 31, 2010, we operated 50 acquired treatment centers located in Alabama, Arizona,
California,
Florida, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, South Carolina and West Virginia. Over the past three years, we have acquired 8 treatment centers of
which none were acquired in 2009 and of which two was acquired in 2010. We plan to continue to enter new markets through the acquisition of established treatment centers from time to time. As part of
our ongoing acquisition strategy, we continually evaluate potential acquisition opportunities.

The
following table sets forth the locations and other information regarding each of the acquired radiation treatment centers in our local markets as of December 31, 2010:

Treatment Center

YearBroward CountyFloridaPlantation

1993Deerfield Beach

1994Coral Springs

1994Tamarac

1999


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Treatment Center

YearCollier CountyFloridaSouth Naples

2008Northwest FloridaFort Walton Beach

2001Florida KeysKey West

2003Las Vegas, NevadaLas Vegas (3 locations)*

2005Westchester/BronxNew YorkRiverhill*

1998Delmarva PeninsulaBerlin, Maryland

1998Salisbury, Maryland

2007Western North CarolinaAsheville*

2002Clyde*

2002Brevard*

2002Franklin*

2002Marion*

2002Rutherford*

2002Park Ridge*

2003Central KentuckyDanville

2003Louisville(1)

2003Frankfort

2003Southeastern AlabamaDothan

2003Opp

2006South New JerseyWoodbury

2004Voorhees

2004Willingboro

2004Central MarylandMartinsburg, West Virginia(2)*

2005Greenbelt, Maryland

2005Belcamp, Maryland

2005Bel Air, Maryland

2006Fairlea, West Virginia

2008Princeton, West Virginia

2010Central ArizonaCasa Grande

2007Sun City (2 locations)

2008Phoenix

2008Central MassachusettsHolyoke*

2005Los Angeles, CaliforniaSanta Monica*

2006Beverly Hills*

2006


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Treatment Center

YearSoutheastern MichiganPontiac*

2006Madison Heights*

2006Clarkson*

2006Monroe*

2006Farmington Hills*

2006Northern CaliforniaRedding(3)*

2007Mt. Shasta(3)*

2008Eastern North CarolinaGreenville*

2007South CarolinaMyrtle Beach

2010


*These
radiation therapy treatment centers are operated through an administrative services agreement.(1)We
have a 90.0% ownership interest in this treatment center.(2)We
have a 60.0% ownership interest in this treatment center.(3)We
have a 57.3% ownership interest in this treatment center.


Hospital-Based and Other Group Treatment Centers.As of December 31, 2010, we operated five hospital-based treatment
centers and one center
with an outside group. We provide services at all of our hospital-based treatment centers pursuant to written agreements with the hospitals. At the Florida treatment center, we provide the services of
our radiation oncologists to the outside group and receive the professional fees charged for such services. We also provide physics and dosimetry services on a fee-for-service
basis. In 1998, we entered into a joint venture arrangement with a hospital in Mohawk ValleyNew York. We have a 37% interest in the joint venture, which provides equipment for the three
treatment centers that provide service in the Mohawk Valley local market. We also manage these treatment centers pursuant to an agreement with the hospital. A professional corporation owned by certain
of our equityholders provides the radiation oncologists for the treatment centers in Mohawk ValleyNew York. In connection with our hospital-based treatment center services, we provide
technical and administrative services. Professional services in New York are provided by physicians employed by a professional corporation owned by certain of our officers, directors and
equityholders. Professional services consist of services provided by radiation oncologists to patients. Technical services consist of the non-professional services provided by us in
connection with radiation treatments administered to patients. Administrative services consist of services provided by us to the hospital-based center. The contracts under which the hospital based
treatment centers are provided service are generally three to seven years with terms for renewal. The following table sets forth the locations and

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other
information regarding each of our hospital-based radiation treatment centers in our local markets as of December 31, 2010:

Treatment Center

Year

Professional

Technical

AdministrativeLee CountyFloridaLakes Park(1)

2008

ü

üWestchester/BronxNew YorkNorthern Westchester(2)

2005



ü

üMohawk ValleyNew YorkUtica(2)

1998

ü

ü

üRome(2)

1999

ü

ü

üDelmarva PeninsulaSeaford, Delaware(3)

2003



ü

üEastern North CarolinaKinston

2007

ü


(1)We
have a 90.0% ownership interest in this center.(2)Professional
services are provided by physicians employed by a professional corporation owned by certain of our officers and directors. Our wholly-owned New
York subsidiary contracts with the hospital through an administrative services agreement for the provision of technical and administrative services.(3)Professional
services are provided by physicians employed by a professional corporation owned by certain of our officers and directors. Our wholly-owned
Maryland subsidiary contracts with the hospital through an administrative services agreement for the provision of technical and administrative services.


Treatment Center Structure

Arizona, Florida, Kentucky, Maryland, New Jersey and Rhode Island Treatment Centers.In Arizona, Florida, Kentucky, Maryland, New
Jersey and Rhode
Island we employ or contract with radiation oncologists and other healthcare professionals. Substantially all of our Florida, Kentucky, Maryland, New Jersey and Rhode Island radiation oncologists have
employment agreements or other contractual arrangements with us. While we exercise legal control over radiation oncologists we employ, we do not exercise control over, or otherwise influence, their
medical judgment or professional decisions. Such radiation oncologists typically receive a base salary, fringe benefits and may be eligible for an incentive performance bonus. In addition to
compensation, we provide our radiation oncologists with uniform benefit plans, such as disability, retirement, life and group health insurance and medical malpractice insurance. The radiation
oncologists are required to hold a valid license to practice medicine in the jurisdiction in which they practice and, with respect to inpatient or hospital services, to become a member of the medical
staff at the contracting hospital with privileges in radiation oncology. We are responsible for billing patients, hospitals and third-party payers for services rendered by our radiation oncologists.
Most of our employment agreements prohibit the physician from competing with us within a defined geographic area and prohibit solicitation of our radiation oncologists, other employees or patients for
a period of one to two years after termination of employment.

California, Delaware, Massachusetts, Michigan, Nevada, New York and North Carolina Treatment Centers.Many states, including
California, Delaware,
Massachusetts, Michigan, Nevada, New York and North Carolina prohibit us from employing radiation oncologists. As a result, we operate our treatment centers in such states pursuant to administrative
services agreements between professional corporations and our wholly-owned subsidiaries. In the states of California, Delaware, Massachusetts, Michigan, Nevada, New York and North Carolina, our
treatment centers are operated as physician office

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practices.
We typically provide technical services to these treatment centers in addition to our administrative services. For the years ended December 31, 2008, 2009 and 2010 approximately
23.7%, 23.6% and 22.1% of our net patient service revenue, respectively, was generated by professional corporations with which we have administrative services agreements. The professional corporations
with which we have administrative services agreements in California, Delaware, Massachusetts, Michigan, Nevada, New York and North Carolina are owned by certain of our directors, physicians and
equityholders, who are licensed to practice medicine in the respective state.

Our
administrative services agreements generally obligate us to provide certain treatment centers with equipment, staffing, accounting services, billing and collection services,
management, technical and administrative personnel and assistance in managed care contracting. Our administrative services agreements provide for the professional corporations to pay us a monthly
service fee, which represents the fair market value of our services. It also provides for the parties to meet annually to reevaluate the value of our services and establish the fair market value. In
California and Nevada, we are paid a fee based upon a fixed percentage of global revenue. In Michigan, we are paid a fee based upon a fixed percentage of net income. In New York and North Carolina, we
are paid a fixed fee per procedure. The terms of our administrative services agreements with professional corporations range from 20 to 25 years and typically renew automatically for additional
five-year periods. Under related agreements in certain states, we have the right to designate purchases of shares held by the physician owners of the professional corporations to qualified
individuals under certain circumstances.

Our
administrative services agreements contain restrictive covenants that preclude the professional corporations from hiring another management services organization for some period
after termination. The professional corporations are parties to employment agreements with the radiation oncologists. The terms of these employment agreements typically range from three to five years
depending on the physician's experience.

Networking

Our radiation oncologists are primarily referred patients by: primary care physicians, medical oncologists, surgical oncologists,
urologists, pulmonologists, neurosurgeons and other physicians within the medical community. Our radiation oncologists are expected to actively develop their referral base by establishing strong
clinical relationships with referring physicians. Our radiation oncologists develop these relationships by describing the variety and advanced nature of the therapies offered at our treatment centers,
by providing seminars on advanced treatment procedures and by involving the referring physicians in those advanced treatment procedures. Patient referrals to our radiation oncologists also are
influenced by managed care organizations with which we actively pursue contractual agreements.

Employees

As of December 31, 2010, we employed approximately 2,000 persons. As of December 31, 2010, we were affiliated with
approximately 112 radiation oncologists that were employed or under contract with us or our affiliated professional corporations. We do not employ any radiation oncologists in California, Delaware,
Massachusetts, Michigan, Nevada, New York or North Carolina due to the laws and regulations in effect in these states. None of our employees are a party to a collective bargaining agreement and we
consider our relationships with our employees to be good. There currently is a nationwide shortage of radiation oncologists and other medical support personnel,
which makes recruiting and retaining these employees difficult. 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 and manage our treatment centers. In addition to our radiation oncologists, we currently employ 72 urologists, 28 surgeons and surgical oncologists, 14 medical
oncologists and four gynecological and other oncologists, three pathologists and four primary care physicians whose practices complement our business in eight markets in Florida as well as our Arizona
and Michigan local markets.

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Seasonality

Our results of operations historically have fluctuated on a quarterly basis and can be expected to continue to fluctuate. Many 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, volume is typically lower in the summer months due to traditional vacation periods. 28 of our 95 radiation treatment
centers are located in Florida.

Insurance

We are subject to claims and legal actions in the ordinary course of business. To cover these claims, we maintain professional
malpractice liability insurance and general liability insurance in amounts we believe are sufficient for our operations. We maintain professional malpractice liability insurance that provides primary
coverage on a claims-made basis per incident and in annual aggregate amounts. Our professional malpractice liability insurance coverage is
provided by an insurance company owned by certain of our directors, executive officers and equityholders. The malpractice insurance provided by this insurance company varies in coverage limits for
individual physicians. The insurance company also carries excess claims-made coverage through Lloyd's of London. In addition, we currently maintain multiple layers of umbrella coverage
through our general liability insurance policies. We maintain Directors and Officers liability insurance.

Competition

The radiation therapy market is highly fragmented and our business is highly competitive. Competition may result from other radiation
oncology practices, solo practitioners, companies in other healthcare industry segments, large physician group practices or radiation oncology physician practice management companies, hospitals and
other operators of other radiation treatment centers, some of which may have greater financial and other resources than us. We believe our radiation treatment centers are distinguishable from those of
many of our competitors because we offer patients a full spectrum of radiation therapy alternatives, including many advanced treatment options that are not otherwise available in certain geographies
or offered by other providers, and which are administered by highly trained personnel and leading radiation oncologists.

Intellectual Property

We have not registered our service marks or any of our logos with the United States Patent and Trademark Office. However, some of our
service marks and logos may be subject to other common law intellectual property rights. We do not hold any patents. Recently, we filed an application to own the rights to a copyright that protects
the content of our Gamma Function software code and are awaiting a registration certificate.

To
date, we have not relied heavily on patents or other intellectual property in operating our business. Nevertheless, some of the information technology purchased or used by us may be
patented or subject to other intellectual property rights. As a result, we may be found to be, or actions may be brought against us alleging that we are, infringing on the trademark, patent or other
intellectual property rights of others, which could give rise to substantial claims against us. In the future, we may wish to obtain or develop trademarks, patents or other intellectual property.
However, other practices and public entities, including universities, may have filed applications for (or have been issued) trademarks, patents or other intellectual property rights that may be the
same as or similar to those developed or otherwise obtained by us or that we may need in the development of our own intellectual property. The scope and validity of such trademark, patent and other
intellectual property rights, the extent to which we may wish or need to acquire such rights and the cost or availability of such rights

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are
presently unknown. In addition, we cannot provide assurance that others will not obtain access to our intellectual property or independently develop the same or similar intellectual property to
that developed or otherwise obtained by us.

Government Regulations

The healthcare industry is highly regulated and the federal and state laws that affect our business are extensive and subject to
frequent changes. 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, the state's interest in regulating the quality of healthcare in the state, regardless of the source
of payment, and state healthcare programs. The significant federal and state regulatory laws that could affect our ability to conduct our business include without limitation those
regarding:



A
violation of these laws could result in significant civil and criminal penalties, the refund of monies paid by government and/or private payers, exclusion of the physician, the
practice or us from participation in Medicare and Medicaid programs and/or the loss of a physician's license to practice medicine. We exercise care in our efforts to structure our arrangements and our
practices to comply with applicable federal and state laws. We have a Medicare Compliance Committee and a Corporate Compliance Program in place to review our practices and procedures. Although we
believe we are in material compliance with all applicable laws, these laws are complex and a review of our practices 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. No assurance can be
given that we will be able to comply with any future laws or regulations.

We
estimate that approximately 47%, 44% and 48% of our net patient service revenue for 2008, 2009 and 2010, 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 conditions of participation and regulations of the DHHS relating
to, among other things, the type of facility, operating policies and procedures, maintenance of equipment, personnel, standards of medical care and compliance with applicable federal, state and local
laws. Our radiation treatment centers are certified to participate in the Medicare and Medicaid programs.

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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 or generation of business reimbursable under Medicare or Medicaid and those that prohibit the provision of certain services by an entity that has a financial relationship
with the referring physician.

False and Other Improper Claims.Under the federal False Claims Act, the government may fine us if we knowingly submit, or
participate in submitting,
any claims for payment that are false or fraudulent, or that contain false or misleading information, or if we knowingly conceal or knowingly and improperly avoid or decrease an obligation to pay or
transmit money or property to the government. An "obligation" includes an established duty arising from an express or implied contractual arrangement, from statute or regulation, or from the retention
of an overpayment. Knowingly making or using a false record or statement to receive payment from the federal government or to improperly retain payment is also a violation. The False Claims Act does
not require proof of specific intent to defraud: a provider can be found liable for submitting false claims with actual knowledge or with reckless disregard or deliberate ignorance of such falseness.

A
False Claims lawsuit may be brought by the government or by a private individual by means of a "qui tam" action. A whistleblower shares in the proceeds of the case, typically being
awarded between 15 and 25 percent of the proceeds. Such lawsuits have increased significantly in recent years. 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.

If
we were ever found to have violated the False Claims Act, we would likely be required to make significant payments to the government (including treble damages and per claim penalties
in addition to the reimbursements previously collected) and could be excluded from participating in Medicare, Medicaid and other government healthcare programs. Many states have similar false claims
statutes. Healthcare fraud is a priority of the United States Department of Justice, the OIG and the Federal Bureau of Investigation which continue to devote a significant amount of resources to
investigating healthcare fraud. State Medicaid agencies also have similar fraud and abuse authority, and many states have enacted laws similar to the federal False Claims Act.

While
the criminal statutes generally are reserved for instances evidencing fraudulent intent, the civil and administrative penalty statutes are applied to an increasingly broad range of
circumstances. Examples of activities giving rise to false claims liability include, without limitation, billing for services not rendered, misrepresenting services rendered (i.e., miscoding)
and application for duplicate reimbursement. Additionally, the federal government has taken the position that claiming reimbursement for unnecessary or substandard services violates these statutes if
the claimant should have known that the services were unnecessary or substandard. An entity may also be subjected to False Claims Act liability for violations of the federal anti-kickback
statute and the Stark Law.

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.

We
believe our billing and documentation practices comply with applicable laws and regulations in all material respects. We submit thousands of reimbursement claims to Medicare and
Medicaid each year, however, and therefore can provide no assurance that our submissions are free from errors. Although we monitor our billing practices for compliance with applicable laws, such laws
are very complex and the regulations and guidance interpreting such laws are subject to frequent changes and differing interpretations.

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HIPAA Criminal Penalties.HIPAA imposes criminal penalties for fraud against any healthcare benefit program for theft or
embezzlement involving
healthcare and for false statements in connection with the payment of any health benefits. HIPAA also provides for broad prosecutorial subpoena authority and authorizes property forfeiture upon
conviction of a federal healthcare offense. Significantly, the HIPAA provisions apply not only to federal programs, but also to private health benefit programs. HIPAA also broadened the authority of
the OIG to exclude participants from federal healthcare programs. If the government were to seek any substantial penalties against us pursuant to these provisions, such an action could have a material
adverse effect on us.

HIPAA Civil Penalties.HIPAA broadened the scope of certain fraud and abuse laws by adding several civil statutes that apply to
all healthcare
services, whether or not they are reimbursed under a federal healthcare program. HIPAA established civil monetary penalties for certain conduct, including upcoding and billing for medically
unnecessary goods or services.

HIPAA Administrative Simplifications.The federal regulations issued under HIPAA contain provisions that:



If
we fail to comply with HIPAA, we may be subject to civil monetary penalties up to $50,000 per violation, not to exceed $1.5 million per calendar year and, in certain
circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. State attorneys general can bring a civil action to enjoin a HIPAA violation or to obtain statutory
damages up to $25,000 per violation on behalf of residents of his or her state.

The
DHHS has discretion in setting the amount of a civil monetary penalty, and may waive it entirely for violations due to reasonable cause and not willful neglect if the payment would
be excessive relative to the violation. The regulations also provide for an affirmative defense if a covered entity can show that the violation was not due to willful neglect and was corrected within
30 days or an additional period deemed appropriate by the DHHS. Reasonable cause means circumstances that would make it unreasonable for the covered entity, despite the exercise of ordinary
business care and prudence, to comply. Willful neglect is defined as conscious, intentional failure or reckless indifference to the obligation to comply. The factors to be considered in determining
the amount of the penalty include the nature and circumstances of the violation, the degree of culpability, the history of other violations, and the extent of the resulting harm.

The
HIPAA regulations related to privacy establish comprehensive federal standards relating to the use and disclosure of protected health information. 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. In general, the privacy regulations do not supersede state laws that are more stringent or grant
greater privacy rights to individuals. We believe our operations are in material compliance with the privacy regulations, but there can be no assurance that the federal government would agree.

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Effective
September 23, 2009, HIPAA requires that individuals be notified without unreasonable delay and within 60 days of their protected health information having been
inappropriately accessed, acquired or disclosed. Depending on the number of individuals affected by such a breach, notification may be required to the media and federal government as well. The
regulations prescribe the method and form of the required notices. Civil penalties up to $50,000 per violation with a maximum of $1.5 million per year may attach to failures to notify.

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 believe our operations are in material compliance with the security regulations, but
there can be no assurance that the federal government would agree.

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 for data reporting, formatting and coding that we must use in certain transactions with health plans. We believe our operations comply
with these standards, but there can be no assurance that the federal government would agree.

Although
we believe that we are in material compliance with these HIPAA regulations with which compliance is currently required, we cannot guarantee that the federal government would
agree. Furthermore, additional changes to the HIPAA regulations are expected to be forthcoming in the next few years, which will require additional efforts to ensure compliance.

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



The
Anti-kickback Statute has been broadly interpreted by a number of courts to prohibit 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 include criminal sanctions including fines
and/or imprisonment and exclusion from federal healthcare programs.

Our
compensation and other financial arrangements, including leases, with physicians implicate the Anti-kickback Statute. The federal government has published regulations
that provide "safe-harbors" that protect certain arrangements under the Anti-kickback Statute so long as certain requirements are met. We believe that our employment and
leasing arrangements comply with applicable safe harbors. 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. 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. 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

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providers
with whom we have financial arrangements, including compensation for employment and professional services. 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 Medicaid and fraud and abuse laws and seek to structure arrangements to comply with applicable safe
harbors where reasonably possible. There is a risk however, that the federal government might investigate such arrangements and conclude they violate the Anti-kickback Statute. Violations
of the Anti-kickback Statute also subjects an entity to liability under the False Claims Act, including via "qui tam" action. If our arrangements were found to be illegal, we, the
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.

Additionally,
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 practice
revenue may violate the Anti-kickback Statute under certain circumstances. While we believe that the fees we charge for our services under the administrative services agreements are
commensurate with the fair market value of the services and our arrangements are in material compliance with applicable law and regulations, we cannot guarantee that the OIG would agree. Any such
adverse finding could have a material adverse impact on us.

Federal Self-Referral Law (The Stark Law).We are also subject to federal and state statutes banning payments and assigning
penalties for
referrals by physicians to healthcare providers with whom the physicians (or close family members) have a financial relationship. The Stark Law
prohibits a physician from referring a patient to a healthcare provider for certain designated health services reimbursable by Medicare if the physician (or close family members) has a financial
relationship with that provider, including an investment interest, a loan or debt relationship or a compensation relationship. The designated health services covered by the law include radiology
services, infusion therapy, radiation therapy and supplies, clinical laboratory, diagnostic imaging, outpatient prescription drugs and hospital services, among others. In addition to the conduct
directly prohibited by the law, the statute also prohibits "circumvention schemes" that are designed to obtain referrals indirectly that cannot be made directly. The regulatory framework of the Stark
Law is to first prohibit all referrals from physicians to entities for Medicare DHS and then to except certain types of arrangements from that broad general prohibition.

Violation
of these laws and regulations may result in prohibition of payment for services rendered, a refund of any Medicare or Medicaid payments for services that resulted from an
unlawful referral, $15,000 civil monetary penalties for specified infractions, $100,000 for a circumvention scheme, criminal penalties, exclusion from Medicare and Medicaid programs, and potential
false claims liability, including via "qui tam" action, of not less than $5,500 and not more than $11,000, plus three times the amount of damages that the government sustains because of an improperly
submitted claim. The repayment provisions in Stark are not dependent on the parties having an improper intent; rather, Stark is a strict liability statute and any violation is subject to repayment of
all "tainted" referrals.

Our
compensation and other financial arrangements, including leases, with physicians implicate the Stark Law. The Stark Law, however, contains exceptions applicable to our operations. We
rely on exceptions covering employees, leases, and in-office ancillary services, as well as the "group practice" definition that allows for certain compensation and profit sharing
methodologies. Additionally, the definition of "referral" under the Stark Law excludes 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

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services
are furnished by or under the supervision of the radiation oncologist. We believe the services rendered by our radiation oncologists will comply with this exception to the definition of
referral.

Some
physicians who are not radiation oncologists are employed by companies owned by us or by professional corporations owned by certain of our directors, executive officers and
equityholders with which we have administrative services agreements. 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 if they meet the employment exception, which 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. Another Stark exception applicable to our
financial relationships with physicians who are not radiation oncologists is the in-office ancillary services exception and accompanying group practice definition which permits profit
distributions to physicians within a qualifying group practice structure. The Stark Law imposes detailed requirements in order to qualify for the in-office ancillary services exception,
all of which are highly technical and many of which have to date not been subject to any judicial review or other agency interpretation.

In
addition, the Health Care Reform Act requires referring physicians under Stark to inform patients that they may obtain certain imaging services (e.g. magnetic resonance imaging
("MRI"), computed tomography ("CT") and positron emission tomography ("PET")) or other designated health services as specified by the Secretary of the DHHS from a provider other than that physician,
his or her group practice, or another physician in his or her group practice. The referring physician must provide each patient with a written list of at least five other suppliers who furnish such
services within 25 miles of the referring physician's office.

We
believe that our current operations comply in all material respects with the Stark Law, due to, among other things, various exceptions therein and implementing regulations that exempt
either the referral or the financial relationship involved. Nevertheless, to the extent physicians affiliated with us make referrals to us and a financial relationship exists between the referring
physicians and us, the government might take the position that the arrangement does not comply with the Stark Law. Any such finding could have a material adverse impact on us.

State Law

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 Florida, have enacted 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. 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. Some states only prohibit referrals where the physician's financial relationship with a healthcare

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provider
is based upon an investment interest. Other state laws apply only to a limited number of designated health services.

These
statutes and regulations generally apply to services reimbursed by both governmental and private payers. Violations of these laws may result in prohibition of payment for services
rendered, refund of any monies received pursuant to a prohibited referral, loss of licenses as well as fines and criminal penalties.

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. However, we cannot guarantee that
the government would agree, and 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 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.

Fee-Splitting Laws.Many states in which we operate prohibit the splitting or sharing of fees between physicians and referral
sources
and/or 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 management agreements between entities and physicians as unlawful fee-splitting. In most cases, it is not considered to be fee-splitting when the payment made by
the physician is reasonable, fair market value reimbursement for services rendered on the physician's behalf.

In
certain states, we receive fees from professional corporations owned by certain of our directors, executive officers and equityholders under administrative services agreements. We
believe we structure
these fee provisions to comply with applicable state laws relating to fee-splitting. However, there can be no certainty that, if challenged, either we or the professional corporations will
be found to be in compliance with each state's fee-splitting laws, and, a successful challenge could have a material adverse effect upon us.

In
certain states we operate multi-specialty group practices and share ancillary profits within the group. We believe we have structured these financial arrangements to comply with state
fee-splitting laws. However, there can be no certainty that, if challenged, we will be found to be in compliance with each state's fee-splitting provisions and a successful
challenge could have a material adverse effect on us.

We
believe our arrangements with 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 radiation oncologists and other
physicians could be subject to civil and criminal penalties, professional discipline and we could be required to restructure or terminate our contractual and other arrangements. Any restructuring of
our contractual and other arrangements with physician practices could result in lower revenue from such practices, increased expenses in the operation of such practices and reduced input into the
business decisions of such practices. Termination of such contracts would result in 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 physicians, affiliated practices and hospitals. Any modifications could
result in less profitable relationships with physicians, affiliated practices and hospitals, less influence over the business decisions of physicians and affiliated practices and failure to achieve
our growth objectives.

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Corporate Practice of Medicine.We are not licensed to practice medicine. The practice of medicine is conducted solely by our
licensed radiation
oncologists and other licensed physicians. 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 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, a practice commonly referred to as the "Corporate Practice of Medicine", in order 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 clients that we offer professional medical services and do not exercise influence or control over the practice of medicine.

Corporate
Practice of Medicine laws vary widely by state regarding the extent to which a licensed physician can affiliate with corporate entities for the delivery of medical services. In
Florida, it is not uncommon for business corporations to own medical practices. New York, by contrast, prohibits physicians from sharing revenue received in connection with the furnishing of medical
care, other than with a partner, employee or associate in a professional corporation, subcontractor or physician consultant relationship. 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 cannot assure you that we will be
successful if our existing organization and our contractual arrangements with the professional corporations are 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 and transition and stock pledge 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 the professional corporations by courts or regulatory authorities will not result in a determination that could adversely affect their operations or that the
healthcare regulatory environment will not change so as to restrict existing operations or their expansion. In the event of action by any regulatory authority limiting or prohibiting us or any
affiliate from carrying on our business or from expanding our operations and our affiliates to certain jurisdictions, we may be required to implement structural and organizational modifications, which
could adversely affect our ability to conduct our business.

Antitrust Laws.In connection with the Corporate Practice of Medicine laws referred to above, certain of the physician practices
with which we are
affiliated are necessarily organized as separate legal entities. As such, the physician practice entities 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. These laws may limit our ability to enter into agreements with separate practices
that compete with one another. In addition, where we also are seeking to acquire or affiliate with established and reputable practices in our target geographic markets, any market concentration could
lead to antitrust claims.

We
believe we are in material compliance with federal and state antitrust laws and intend to comply with any state and federal laws that may affect the development of our business. There
can be no assurance, however, that a review of our business by courts or regulatory authorities would not adversely affect our operations and the operations of our affiliated physician practice
entities.

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State Licensing.As a provider of radiation therapy services in the states in which we operate, we must maintain current
occupational and use
licenses for our treatment centers as healthcare facilities and machine registrations for our linear accelerators 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.

Certificate of Need.Many states have enacted certificate of need laws, including but not limited to Kentucky, Massachusetts,
Michigan, North
Carolina Rhode Island and West Virginia, which require prior approval for a number of actions, including for the purchase, construction, acquisition, renovation or expansion of healthcare facilities
and treatment centers, to make certain capital expenditures or to make changes in services or bed capacity. In deciding whether to approve certain requests, these states consider the need for
additional or expanded healthcare facilities or services. The certificate of need program is intended to prevent unnecessary duplication of services and can be a competitive process whereby only one
proposal among competing applicants who wish to provide a particular health service is chosen or a proposal by one applicant is challenged by another provider who may prevail in getting the state to
deny the addition of the service.

In
certain states these certificate of need statutes and regulations apply to our related physician corporations and in others it applies to hospitals where we have management agreements
or joint venture relationships.

We
believe that we have applied for all requisite state certificate of need approvals or notified state authorities as required by statute and are in material compliance with state
requirements. There can be no assurance, however, that a review of our business or proposed new practices by regulatory authorities would not limit our growth or otherwise adversely affect the
operations of us and our affiliated physician practice entities.

Other Laws and Regulations

Hazardous Materials.We are subject to various federal, state and local laws and regulations governing the use, discharge and
disposal of hazardous
materials, including medical waste products. We believe that all of our treatment centers comply with these laws and regulations in all material respects and we do not anticipate that any of these
laws will have a material adverse effect on our operations.

Although
our linear accelerators and certain other equipment do not use radioactive or other hazardous materials, our treatment centers do provide specialized treatment involving the
implantation of radioactive material in the prostate and other organs. The radioactive sources generally are obtained from, and returned to, the suppliers, which have the ultimate responsibility for
their proper disposal. We, however, remain subject to state and federal laws regulating the protection of employees who may be exposed to hazardous material and the proper handling, storage and
disposal of that material.

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. 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,

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treatment
devices and special services also include both professional and technical components. The 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 treatment from the linear accelerator 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 certified coding professionals responsible for interpreting the services documented on the patients' charts to
determine the appropriate coding of services for billing of third-party payers. This staff provides coding and billing services for all of our treatment centers except for four treatment centers in
New York. In addition, we do not provide coding and billing services to hospitals where we are providing only the professional component of radiation treatment services. We provide training for our
coding staff and believe that our coding and billing expertise result in appropriate and timely reimbursement. Given the complexity of the regulations and guidance governing coding and billing, we
cannot guarantee that the government will not challenge any of our practices. Any such challenge could have a material adverse effect on us.

Cost Containment

We derived approximately 47% , 44% and 48% of our net patient service revenue for the years ended December 31, 2008, 2009 and
2010, respectively, from payments made by government sponsored healthcare programs, principally Medicare. These programs are subject to substantial regulation by the federal and state governments. Any
change in payment regulations, policies, practices, interpretations or statutes that place limitations on reimbursement amounts, or changes in reimbursement coding, or practices could materially and
adversely affect our financial condition and results of operations.

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 has
implemented a resource-based relative value scale ("RBRVS") payment methodology for physician services. RBRVS is a fee schedule that, except for certain geographical and other adjustments, pays
similarly situated physicians the same amount for the same services. The RBRVS is adjusted each year and is subject to increases or decreases at the discretion of Congress. Changes in the RBRVS may
result in reductions in payment rates for procedures provided by the Company. RBRVS-type payment systems also have been adopted by certain private third-party payers and may become a
predominant payment methodology. Broader implementation of such programs could reduce payments by private third-party payers and could indirectly reduce our operating margins to the extent that the
cost of providing management services related to such procedures could not be proportionately reduced. To the extent our costs increase, we 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 payers. Changes in the RBRVS could result in a reduction from historical levels in per patient Medicare revenue received by us; however, we do not believe such reductions
would, if implemented, result in a material adverse effect on us.

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In addition to current governmental regulation, both federal and state governments periodically propose legislation for comprehensive reforms affecting the
payment for and availability of healthcare services. Aspects of certain of such healthcare proposals, such as reductions in Medicare and Medicaid payments, if adopted, could adversely affect us. Other
aspects of such proposals, such as universal health insurance coverage and coverage of certain previously uncovered services, could have a positive impact on our business. On March 21, 2010,
the House of Representatives passed the Patient Protection and Affordable Care Act, and the corresponding reconciliation bill. President Obama signed the larger comprehensive bill into law on
March 23, 2010 and the reconciliation bill on March 30, 2010 (collectively, the "Health Care Reform Act"). The comprehensive $940 billion dollar overhaul is expected to extend
coverage to approximately 32 million previously uninsured Americans. We anticipate that the Health Care Reform Act will significantly affect how the healthcare industry operates in relation to
Medicare, Medicaid and the insurance industry. The Health Care Reform Act contains a number of provisions, including those governing fraud and abuse, enrollment in federal health care programs, and
reimbursement changes, which will impact existing government health care 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. It is not possible at this time to predict what, if any, additional reforms will be adopted by Congress or state
legislatures, or when such reforms would be adopted and implemented. As healthcare reform progresses and the regulatory environment accommodates reform, it is likely that changes in state and federal
regulations will necessitate modifications to our agreements and operations. While we believe we will be able to restructure in accordance with applicable laws and regulations, we cannot assure that
such restructuring in all cases will be possible or profitable. In general we can give no assurance that the Health Care Reform Act will not materially affect our business and results of operations.
Furthermore, we cannot predict the course of future federal or state healthcare legislation or other changes in the administration or interpretation of government healthcare programs and the effect
that any legislation, interpretation, or change may have on us.

Although
governmental payment reductions have not materially affected us in the past, it is possible that such changes implemented in connection with the Health Care Reform Act and any
future changes could have a material adverse effect on our financial condition and results of operations. In addition, Medicare, Medicaid and other government sponsored healthcare programs are
increasingly shifting to some form of managed care. Additionally, 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. 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 payers, including those that provide Medicare supplemental insurance, are based on established physician, clinic and hospital charges and are generally
higher than Medicare payment rates. Changes in the mix of our patients between non-governmental payers and government sponsored healthcare programs, and among different types of
non-government payer sources, could have a material adverse effect on us.

Reevaluations and Examination of Billing

Payers periodically reevaluate the services they cover. In some cases, government payers such as Medicare and Medicaid also may seek to
recoup payments previously made for services determined not to be covered. Any such action by payers would have an adverse affect on our 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.

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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 infectious and hazardous waste and radioactive materials as well as the safety and health of laboratory employees. We believe our operations are in material compliance with
applicable federal and state laws and regulations relating to the collection, storage, handling, treatment and disposal of all 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. We utilize licensed vendors for the disposal of such specimen and waste.

In
addition to our comprehensive regulation of safety in the workplace, the federal Occupational Safety and Health Administration 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.

Recent Developments

In January 2011, RTS completed its exchange offer to register its outstanding $310.0 million in aggregate principal amount of
97/8% Senior Subordinated Notes due 2017 (the "Existing Notes"), which were issued in April 2010 by RTS.

On
March 1, 2011, our wholly owned subsidiary Radiation Therapy Services International, Inc. ("RTSII"), RT Investments, RTS, and our wholly-owned subsidiary Main
Film B.V., entered into Membership Interest Purchase Agreements (the "Membership Interest Purchase Agreements") with the brother of Daniel E. Dosoretz, M.D., our Chief Executive Officer,
Alejandro Dosoretz, and his spouse, and Dr. Dosoretz's father, Bernardo Dosoretz and his representative, to purchase the remaining 67% membership interest in Medical Developers, LLC
("MDLLC"), an entity that is the majority owner and operator of 29 freestanding radiation oncology practices (of which two are under development) through 15 legal entities in South America, Central
America and the Caribbean, as well as direct ownership interests held by Alejandro Dosoretz and Bernardo Dosoretz in such 15 legal entities and a 61% ownership interest in Clinica de Radioterapia La
Asuncion, S.A., an entity that operates a radiation therapy treatment center in Guatemala (collectively the "MDLLC Purchase").

Under
the terms of the Membership Interest Purchase Agreements, RTSII and its subsidiaries purchased an additional 72% of the remaining interests in the entities, which when combined
with RTSII's purchase of a 33% interest in MDLLC in January 2009, results in a 91% ownership interest in the entities. The aggregate purchase price for the MDLLC Purchase was $80.0 million and
was determined based upon a multiple of historical earnings before interest, taxes, depreciation and amortization, and excess working capital. The purchase price was comprised of $47.5 million
in cash, $16.25 million in Notes (as defined below) and $16.25 million in equity, in the form of 25 shares of our common stock. In addition to the purchase price paid at closing,
Alejandro Dosoretz also has the right to receive an earnout payment from RTSII based on a multiple of future earnings before interest, taxes, depreciation and amortization of certain radiation
oncology centers acquired in the MDLLC Purchase, which such earnout payment, if any, would be paid one-half in the form of Notes and one-half in the form of equity of RT
Investments. We expect to record a contingent earnout accrual of approximately $2.4 million in our purchase price accounting for the MDLLC Purchase. In connection with the MDLLC Purchase, RT
Investments entered into a Contribution Agreement (the "Contribution Agreement"), dated March 1, 2011, with Alejandro Dosoretz pursuant to which he exchanged the 25 shares of our common stock
he received in the MDLLC Purchase for approximately 13,660 non-voting

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preferred
equity units of RT Investments and approximately 258,955 Class A voting equity units of RT Investments, having an aggregate value of $16.25 million. The sale and issuance of
non-voting preferred equity units and Class A voting equity units to Alejandro Dosoretz, a new employee and sophisticated investor, were made in reliance upon the exemption from
registration requirements set forth in Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506 of Regulation D promulgated thereunder. Pursuant
to one of the Membership Interest Purchase Agreements, Alejandro Dosoretz has the right to invest 10% (or more than 10% if approved by RTSII) of the cost of certain specific new radiation oncology
centers of MDLLC and Clinica de Radioterapia La Asuncion S.A. in exchange for a 10% ownership interest in such new centers and an additional interest, which when combined with the 10% ownership
interest, would entitle him to a return of his invested capital and 20% of the residual value of such new centers. RTSII has an option to buy such interests in the new centers on the third anniversary
of the closing, and Alejandro Dosoretz has a right to sell such interests in the new centers on the fifth anniversary of the closing.

In
connection with the MDLLC Purchase, on March 1, 2011, RTS issued $66.25 million aggregate principal amount of its 97/8% senior subordinated notes due 2017
(the "Notes") under the Indenture, dated as of April 20, 2010 (as supplemented by the First Supplemental Indenture thereto, dated June 24, 2010, as further supplemented by the Second
Supplemental Indenture thereto, dated September 29, 2010, as further supplemented by the Third Supplemental Indenture thereto, dated March 1, 2011, and as otherwise amended, supplemented
or modified, the "Indenture"), by and among RTS, the guarantors party thereto (the "Guarantors") and Wells Fargo Bank, National Association, as trustee (the "Trustee"). The Third Supplemental
Indenture, dated March 1, 2011, to the Indenture was entered into among RTS, the Guarantors and the Trustee, to provide that the issuance of the $66.25 million in aggregate principal of
Notes shall be issued under the Indenture.

On
March 1, 2011, RTS and the guarantors party thereto entered into a purchase agreement (the "Purchase Agreement") with funds and/or accounts managed and/or advised by DDJ
Capital
Management, LLC (the "Purchasers") relating to the issuance and sale of $50.0 million aggregate principal amount of the Notes at an issue price of 98.75%. RTS will use the net proceeds
of $48.5 million under the Purchase Agreement (i) to fund the MDLLC Purchase (ii) to fund transaction costs associated with the MDLLC Purchase and (iii) for general
corporate purposes.

Pursuant
to the Membership Interest Purchase Agreements, Notes in aggregate principal amount of $16.25 million were issued to Bernardo Dosoretz as purchase price consideration in
connection with the MDLLC Purchase, at an issue price of 100%.

The
Notes have not yet been registered under the Securities Act and were issued in private offerings that are exempt from the registration requirements of the Securities Act, in
accordance with Rule 144A and Section 4(2) of the Securities Act, and Rule 506 of Regulation D promulgated thereunder.

The
Notes bear interest at a rate 97/8% per annum, mature on April 15, 2017 and are of the same series of notes as RTS's outstanding 97/8% senior
subordinated notes due 2017 issued under the Indenture on April 20, 2010. Interest is payable on the Notes on each April 15 and October 15, commencing April 15, 2011. Under
the terms of the Indenture, RTS may redeem some or all of the Notes at any time prior to April 15, 2014 at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and
unpaid interest, if any, to the redemption date and a "make-whole" premium. On or after April 15, 2014, RTS may redeem some or all of the Notes at redemption prices set forth in the
Indenture. In addition, at any time prior to April 15, 2013, RTS may redeem up to 35% of the original principal amount of the Notes using the new cash proceeds of certain equity offerings. As
previously disclosed, the Indenture contains covenants that, among other things, limit RTS's and the Guarantors' ability to incur additional debt or issue preferred shares, pay dividends, sell certain
assets, create liens on certain assets to secure debt, consolidate, merge, sell or otherwise dispose of all or

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substantially
all of its assets, enter into certain transactions with affiliates and designate subsidiaries as unrestricted subsidiaries.

The
Purchase Agreement contains customary representations, warranties and agreements by RTS. In addition, RTS has agreed to indemnify the Purchasers against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the Purchasers may be required to make in respect of those liabilities.

In
addition, in connection with the issuance of the Notes, on March 1, 2011, RTS entered into registration rights agreements relating to the Notes, pursuant to which RTS has
agreed to use its reasonable best efforts to file with the Securities and Exchange Commission and cause to become effective a registration statement with respect to a registered offer to exchange the
Notes for new notes, with terms substantially identical in all material respects to the Notes, or a shelf registration for resale of the Notes under certain circumstances.

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Available Information

As a result of the Existing Notes exchange offer, we became subject to the informational requirements of the Securities Exchange Act of
1934, as amended, (the "Exchange Act") and, in accordance therewith, file reports and other information with the Securities and Exchange Commission (the "SEC"). Such reports and other information can
be inspected and copied at the Public Reference Room of the SEC located at Room 1580, 100 F Street, N.E., Washington D.C. 20549. Copies of such materials can be obtained from the Public
Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such
materials may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov).

Our
corporate website iswww.rtsx.comand we make available copies of our filings under the Exchange Act, including Annual Reports on
Form 10-K,, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act on our website, free of charge, under the heading "SEC Filings", as soon as reasonably practicable after such material is filed or furnished to the
SEC.

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Item 1A.Risk Factors

You should carefully consider the risk factors set forth below as well as the other information contained in this Annual Report on
Form 10-K, including our
consolidated financial statements and the related notes, in evaluating our company and our business. The risks described below are not the only risks facing us. Additional risks and uncertainties not
currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. Any of the following risks could
materially and adversely affect our business, financial condition or results of operations. In such a case, you may lose all or part of your original investment.

Risks Related to Our Business

We depend on payments from government Medicare and, to a lesser extent, Medicaid programs for a significant amount of our revenue. Our business could be materially harmed by
any changes that result in reimbursement reductions.

Our payer mix is concentrated with Medicare patients due to the high proportion of cancer patients over the age of 65. We estimate that
approximately 47%, 44% and 48% of our net patient service revenue for the years ended December 31 2008, 2009 and 2010, respectively, consisted of payments from Medicare and Medicaid. Only a
small percentage of that revenue resulted from Medicaid payment. These government programs generally reimburse us on a fee-for-service basis based on predetermined government
reimbursement rate schedules. As a result of these reimbursement schedules, we are limited in the amount we can record as revenue for our services from these government programs. The Centers for
Medicare & Medicaid Services ("CMS") can change these schedules and therefore the prices that the agency pays for these services. In addition, if our operating costs increase, we will not be
able to recover these costs from government payers. As a result, our financial condition and results of operations may be adversely affected by changes in reimbursement for Medicare reimbursement.
Various state Medicaid programs also have recently reduced Medicaid payments to providers based on state budget reductions. Although Medicaid reimbursement encompasses only a small portion of our
business, there can be no certainty as to whether Medicaid reimbursement will increase or decrease in the future and what affect, if any, this will have on our business.

In
July 2009, in response to a study of diagnostic imaging by the Medicare Payment Advisory Commission, CMS initially proposed that 2010 Medicare reimbursement rates for radiation
oncology be significantly reduced, primarily caused by increasing the assumed equipment utilization factors from 50% to 90% for equipment with a cost of $1 million or greater which includes
both diagnostic imaging and radiation oncology. The final 2010 Medicare rates promulgated by CMS applied such increased equipment utilization factor only to diagnostic imaging, and therefore, did not
impact radiation oncology. CMS in its 2011 Medicare Physician Fee Schedule posted November 2, 2010, similarly does not revise the equipment utilization factor for radiation oncology. There can
be no assurance, however, that CMS will not revisit radiation oncology's equipment utilization assumption at some time in the
future or that any resulting adjustment to the rates paid to radiation oncology services will not be material.

Medicare
reimbursement rates for all procedures under Medicare are determined by a formula which takes into account a conversion factor ("CF") which is updated on an annual basis based
on the sustainable growth rate ("SGR"). On January 1, 2010, the CF was scheduled to decrease 21.2%, but Congress postponed this decrease throughout the year by passing several pieces of
legislation. Additionally, in June 2010, Congress passed a 2.2% increase. The CF was again scheduled to decrease 24.9% as of January 1, 2011, but Congress passed the Medicare and Medicaid
Extenders Act of 2010, which was signed by President Obama on December 15, 2010. This Act delays until the end of 2011 the scheduled 24.9% cut and for now maintains rates at their current
level. If future reductions are not

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suspended,
and if a permanent "doc fix" is not signed into law, the reimbursement decrease currently schedule to take effect on January 1, 2012, will have a significant adverse impact on our
business.

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

National healthcare reform remains a focus at the federal level. On March 21, 2010, the House of Representatives passed the
Patient Protection and Affordable Care Act, and the corresponding reconciliation bill. President Obama signed the larger comprehensive bill into law on March 23, 2010 and the reconciliation
bill on March 30, 2010 (collectively, the "Health Care Reform Act"). The comprehensive $940 billion dollar overhaul is expected to extend coverage to approximately 32 million
previously uninsured Americans.

A
significant portion of our patient volume is derived from government healthcare programs, principally Medicare, which are highly regulated and subject to frequent and substantial
changes. We anticipate the Health Care Reform Act will significantly affect how the healthcare industry operates in relation to Medicare, Medicaid and the insurance industry. 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 Health Care Reform Act 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.

If payments by managed care organizations and other commercial payers decrease, our revenue and profitability could be adversely affected.

We estimate that approximately 52%, 55% and 51% of our net patient service revenue for the years ended December 31 2008, 2009
and 2010 respectively, was derived from commercial payers such as managed care organizations and private health insurance programs as well as individuals. As of December 31, 2010, we have over
1,600 contracts with commercial payers. These commercial payers generally pay us for the services rendered to an insured patient based upon predetermined rates. Managed care organizations typically
pay at lower rates than private health insurance programs. While commercial payer rates are generally higher than government program reimbursement rates, commercial payer rates are based in part on
Medicare reimbursement rates and when Medicare rates are lowered, commercial rates are often lowered as well. If managed care organizations and other private insurers reduce their rates or we
experience a significant shift in our revenue mix toward certain additional managed care payers or Medicare or Medicaid reimbursements, then our revenue and profitability may decline and our operating
margins will be reduced. Nongovernment payers, including managed care payers, continue to demand discounted fee structures, and the trend toward consolidation among nongovernment payers tends to
increase their bargaining power over fee structures. Our future success will depend, in part, on our ability to retain and renew our managed care contracts as well as enter into new managed care
contracts on terms favorable to us. Any inability to maintain suitable financial arrangements with commercial payers could have a material adverse impact on our business.

Our overall business results may suffer from the economic downturn.

The United States economy has weakened significantly. Depressed consumer spending and higher unemployment rates continue to pressure
many industries and geographic locations. During economic downturns, governmental entities often experience budget deficits as a result of increased costs and lower than expected tax collections.
These budget deficits may force federal, state and local government entities to decrease spending for health and human service programs, including Medicare, Medicaid

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and
similar programs, which represent significant payer sources for our treatment centers. Other risks we face from general economic weakness include potential declines in the population covered under
managed care agreements, patient decisions to postpone or cancel elective procedures as well as routine diagnostic examinations, potential increases in the uninsured and underinsured populations and
further difficulties in our collecting patient co-payment and deductible receivables.

Due to the rising costs of managed care premiums and co-pay amounts, coupled with the current economic environment, we may realize an increased exposure to bad
debt due to patients' inability to pay for certain forms of cancer treatment.

As more patients become uninsured as a result of job losses or receive reduced coverage as a result of cost-control
measures by employers to offset the increased costs of managed care premiums, patients are becoming increasingly responsible for the rising costs of treatment, which is increasing our exposure to bad
debt. This also relates to patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and
co-payments) remain outstanding. The shifting responsibility to pay for care has, in some instances, resulted in patients electing not to receive certain forms of cancer treatment.

In
response to this environment, we have improved our processes associated with verification of insurance eligibility and patient responsibility payment programs. In addition, we have
improved our patient financial counseling efforts and developed tools to monitor our progress in this area. However, a continuation of the trends that have resulted in an increasing proportion of
accounts receivable being comprised of uninsured accounts and a deterioration in the collectability of these accounts will adversely affect our cash flows and results of operations.

We depend on recruiting and retaining radiation oncologists and other qualified healthcare professionals for our success.

Our success is dependent upon our continuing ability to recruit, train and retain or affiliate with radiation oncologists, physicists,
dosimetrists and radiation therapists. While there is currently a national shortage of these healthcare professionals, we have not experienced significant problems attracting and retaining key
personnel and professionals in the recent past. We face competition for such personnel from other healthcare providers, research and academic institutions, government entities and other organizations.
In the event we are unable to recruit and retain these professionals, such shortages could have a material adverse effect on our ability to grow. Additionally, many of our senior radiation
oncologists, due to their reputations and experience, are very important in the recruitment and education of radiation oncologists. The loss of any such senior radiation oncologists could negatively
impact us.

Most
of our approximately 112 radiation oncologists are employed under employment agreements which, among other things, provide that the radiation oncologists will not compete with us
(or the professional corporations contracting with us) for a period of time after their employment terminates. Such covenants not to compete are enforced to varying degrees from state to state. In
most states, a covenant not to compete will be enforced only to the extent that it is necessary to protect the legitimate business interest of the party seeking enforcement, that it does not
unreasonably restrain the party against whom enforcement is sought and that it is not contrary to the public interest. This determination is made based upon all the facts and circumstances of the
specific case at the time enforcement is sought. It is unclear whether our interests under our administrative services agreements will be viewed by courts as the type of protected business interest
that would permit us or the professional corporations to enforce a non-competition covenant against the radiation oncologists. Since our success depends in substantial part on our ability
to preserve the business of our radiation oncologists, a determination that these provisions are unenforceable could have a material adverse effect on us.

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We depend on our senior management and we may be materially harmed if we lose any member of our senior management.

We are dependent upon the services of our senior management, especially Daniel E. Dosoretz, M.D., our Chief Executive Officer,
President and a director on the Company's board of directors, Daniel H. Galmarini, our Chief Technology Officer, Constantine A. Mantz, M.D., our Chief Medical Officer, and Eduardo Fernandez, M.D.
Ph.D., Senior Vice President, Physician Management. We have entered into executive employment agreements with certain members of our senior management, including Dr. Dosoretz. Because these
members of our senior management team have been with us for over 10 years and have contributed greatly to our growth, their services would be very difficult, time consuming and costly to
replace. We carry key-man life insurance on Dr. Dosoretz. The loss of key management personnel or our inability to attract and retain qualified management 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 their involvement, could have a material adverse effect on our business.

We may not be able to grow our business effectively or successfully implement our growth plans if we are unable to recruit additional management and other personnel.

Our ability to continue to grow our business effectively and successfully implement our growth strategy is highly dependent upon our
ability to attract and retain qualified management employees and other key employees. We believe there are a limited number of qualified people in our business and the industry in which we compete. As
such, there can be no assurance that we will be able to identify and retain the key personnel that may be necessary to grow our business
effectively or successfully implement our growth strategy. If we are unable to attract and retain talented personnel it could limit our ability to grow our business.

The radiation therapy market is highly competitive.

Radiation therapy is a highly competitive business in each market in which we operate. Our treatment centers face competition from
hospitals, other medical practitioners and other operators of radiation treatment centers. There is a growing trend of physicians in specialties other than radiation oncology, such as urology,
entering the radiation treatment business. If this trend continues it could harm our referrals and our business. Certain of our competitors have longer operating histories and greater financial and
other resources than us. In addition, in states that do not require a certificate of need for the purchase, construction or expansion of healthcare facilities or services, competition in the form of
new services, facilities and capital spending is more prevalent. If our competitors are better able to attract patients, recruit physicians, expand services or obtain favorable managed care contracts
at their facilities than our centers, we may experience an overall decline in patient volume. In the event that we are not able to compete successfully, our business may be adversely affected and
competition may make it more difficult for us to affiliate with or employ additional radiation oncologists on terms that are favorable to us.

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We could be the subject of governmental investigations, claims and litigation.

Healthcare companies are subject to numerous investigations by various governmental agencies. Further, under the False Claims Act,
private parties have the right to bring "qui tam", or "whistleblower", suits against companies that knowingly submit false claims for payments to, or improperly retain overpayments from, the
government. The False Claims Act imposes penalties of not less than $5,500 and not more than $11,000, plus three times the amount of damages which the government sustains because of the submission of
a false claim. In addition, if we are found to have violated the False Claims Act, we could be excluded from participation in Medicare, Medicaid and other federal healthcare programs. Some states have
adopted similar state whistleblower and false claims provisions. Certain of our individual facilities have received, and other facilities may receive, inquiries from federal and state agencies related
to potential False Claims Act liability. Depending on whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution could have a
material, adverse effect on our financial position, results of operations and liquidity.

Governmental
agencies and their agents, such as the Medicare Administrative Contractors, fiscal intermediaries and carriers, as well as the OIG, CMS and state Medicaid programs, conduct
audits of our healthcare operations. Private payers may conduct similar post-payment audits, and we also perform internal audits and monitoring. Depending on the nature of the conduct
found in such
audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material adverse effect on our financial position, results of operations and
liquidity.

The
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA") established the Recovery Audit Contractor ("RAC") three-year demonstration program to
conduct post-payment reviews to detect and correct improper payments in the fee-for-service Medicare program. The Tax Relief and Health Care Act of 2006 made the
RAC program permanent and mandated its nationwide expansion by 2010. CMS has awarded contracts to four RACs that are implementing the permanent RAC program on a nationwide basis. In addition, CMS
employs Medicaid Integrity Contractors ("MICs") to perform post-payment audits of Medicaid claims and identify overpayments. Throughout 2011, MIC audits will continue to expand. In
addition to MICs, several other contractors, including the state Medicaid agencies, have increased their review activities. Should we be found out of compliance with any of these laws, regulations or
programs, depending on the nature of the findings, our business, our financial position and our results of operations could be negatively impacted.

We may be subject to actions for false claims, which could harm our business, if we do not comply with government coding and billing rules.

If we fail to comply with federal and state documentation, coding and billing rules, we could be subject to criminal and/or civil
penalties, loss of licenses and exclusion from the Medicare and Medicaid programs, which could harm us. We estimate that approximately 47%, 44% and 48% of our net patient service revenue for the years
ended December 31 2008, 2009 and 2010, respectively, consisted of payments from Medicare and Medicaid programs. In billing for our services to third-party payers, we must follow complex
documentation, coding and billing rules. These rules are based on federal and state laws, rules and regulations, various government pronouncements, and on industry practice. Failure to follow these
rules could result in potential civil liability under the 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. We submit thousands of claims for Medicare and other payments and there can be no assurance that there have not been errors. While we carefully and regularly
review our documentation, coding and billing practices as part of our compliance program, the rules are frequently vague and confusing and we cannot assure that governmental investigators, private
insurers

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or
private whistleblowers will not challenge our practices. Such a challenge could result in a material adverse effect on our business.

If we fail to comply with the federal anti-kickback statute, we could be subject to criminal and civil penalties, loss of licenses and exclusion from the
Medicare and Medicaid programs, which could materially harm us.

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, as remuneration includes the transfer of
anything of value, in cash or in kind. 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. As it is an "intent-based" statute, as detailed in federal court
precedent, one or both parties must intend the remuneration to be in exchange for or to induce referrals. Violations of the federal anti-kickback statute may result in substantial civil or
criminal penalties, including criminal fines of up to $25,000, imprisonment of up to five years, civil penalties under the Civil Monetary Penalties Law of up to $50,000 for each violation, plus three
times the remuneration involved, civil penalties under the federal False Claims Act of up to $11,000 for each claim submitted, plus three times the amounts paid for such claims and exclusion from
participation in the Medicare and Medicaid programs. This participation exclusion, if applied to us or one or more of our subsidiaries or affiliates, could result in significant reductions in our
revenues and could have a material adverse effect on our business.

In
addition, most of the states in which we operate, including Florida, have also adopted laws, similar to the federal anti-kickback statute, that prohibit payments to
physicians in exchange for referrals, some of which apply regardless of whether the source of payment is a government payer or a private payer. These statutes typically impose criminal and civil
penalties as well as loss of licenses.

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 complimentary items, services or transportation that are of more than a nominal value. We have reviewed our
practices of providing services to our patients, and have structured those services in a manner that we believe complies with the law and its interpretation by government authorities. We cannot
provide assurances, however, that government authorities will not take a contrary view and impose civil monetary penalties and exclude us for past or present practices.

If we 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 reimbursement revenue.

We are subject to the federal Stark Law, as well as similar state statutes and regulations, which bans payments for designated health
services ("DHS") rendered as a result of referrals by physicians to DHS entities with which the physicians (or immediate family members) have a financial relationship. DHS includes but is not limited
to radiation therapy, radiology and laboratory services. A "financial relationship" includes investment and compensation arrangements, both direct and indirect. The regulatory framework of the Stark
Law is to first prohibit all referrals from physicians to entities for Medicare DHS and then to except certain types of arrangements from that broad general prohibition.

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State
self-referral laws and regulations vary significantly based on the state and, in many cases, have not been interpreted by courts or regulatory agencies. These state
laws and regulations can encompass not only services reimbursed by Medicaid or government payers but also private payers. Violation of these federal and state laws and regulations may result in
prohibition of payment for services rendered, loss of licenses, $15,000 civil monetary penalties for specified infractions, $100,000 for a circumvention scheme, criminal penalties, exclusion from
Medicare and Medicaid programs, and potential false claims liability, including via "qui tam" action, of not less than $5,500 and not more than $11,000, plus three times the amount of damages that the
government sustains because of an improperly submitted claim. The repayment provisions in the Stark Law are not dependent on the parties having an improper intent; rather, the Stark Law is a strict
liability statute and any violation is subject to repayment of all "tainted" referrals.

Our
compensation and other financial arrangements with physicians are governed by the federal Stark Law. We rely on certain exceptions to the Stark Law, including those covering
employees and in-office ancillary services, and the exclusion of certain requests by radiation oncologists for radiation therapy services from the definition of "referral." In a limited
number of markets, we have relationships with non-radiation oncology physicians such as surgical and gynecological oncologists and urologists that are members of a group practice with our
radiation oncologists and we rely on the Stark group practice definition and rules with respect to such relationships.

The
Health Care Reform Act also imposes new disclosure requirements, including one such requirement on referring physicians under the federal Stark Law to inform patients that they may
obtain certain imaging services (e.g. MRI, CT and PET) or other designated health services as specified by the Secretary in the future from a provider other than that physician, his or her
group practice, or
another physician in his or her group practice. To date, CMS has not indicated that these disclosure requirements will extend to radiation therapy referrals.

While
we believe that our financial relationships with physicians and referral practices are in compliance with applicable laws and regulations, we cannot guarantee that government
authorities might take a different position. If we were found to be in violation of the Stark Law, we could be subject to civil and criminal penalties, including fines as specified above, exclusion
from participation in government and private payer programs and requirements to refund amounts previously received from government and private payers.

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.

If a federal or state agency asserts 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 revenue or 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 current business practices 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 or other physicians to become illegal or result in the imposition
of penalties against us or our treatment centers. If any of our business arrangements with our radiation oncologists or other physicians in a position to make referrals of radiation therapy services
were deemed to violate

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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.

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

There are numerous federal and state laws and regulations addressing patient information privacy and security concerns, including state
laws related to identity theft. In particular, the federal regulations issued under HIPAA contain provisions that:



Compliance
with these regulations requires us to spend money and substantial time and resources. We believe that we are in material compliance with the HIPAA regulations with which we
are currently required to comply. If we fail to comply with the HIPAA regulations, we could suffer civil penalties up to $50,000 per violation, not to exceed $1.5 million per calendar year and
criminal penalties with fines up to $250,000 per violation. Our facilities could be subject to a periodic audit by the federal government, and enforcement of HIPAA violations may occur by either
federal agencies or state attorneys general.

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

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



In
addition, many states impose limits on the tasks a physician may delegate to other staff members. We have administrative services agreements in states that prohibit the corporate
practice of medicine such as California, Massachusetts, Michigan, Nevada, New York and North Carolina. Corporate practice of medicine laws and their interpretation vary from state to state, and
regulatory authorities enforce them with broad discretion. We have structured our agreements and services in

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those
states in a manner that we believe complied with the law and its interpretation by government authorities. If, however, we are deemed to be in violation of these laws, we could be required to
restructure or terminate 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.

In certain states we depend on administrative services agreements with professional corporations, including related party professional corporations, and if we are unable to
continue to enter into them or they are terminated, we could be materially harmed.

Certain states, including California, Massachusetts, Michigan, Nevada, New York and North Carolina, have laws prohibiting business
corporations from employing physicians. Our treatment centers in California, Massachusetts, Michigan, Nevada, New York and North Carolina, operate through administrative services agreements with
professional corporations that employ the radiation oncologists who provide professional services at the treatment centers in those states. In 2008, 2009 and 2010, $116.4 million,
$122.2 million and $118.4 million, respectively, of our net patient service revenue was derived from administrative services agreements, as opposed to $373.8 million,
$395.4 million and $417.5 million, respectively, from all of our other centers. The professional corporations in these states are currently owned by certain of our directors, executive
officers and equityholders, who are licensed to practice medicine in those states. As we enter into new states that will require an administrative services agreement, there can be no assurance that a
related party professional corporation, or any professional corporation, will be willing or able to enter into an administrative services agreement. Furthermore, if we enter into an administrative
services agreement with an unrelated party there could be an increased risk of differences arising or future termination. We cannot assure you that a professional corporation will not seek to
terminate an agreement with us on any basis, including on the basis of state laws prohibiting the corporate practice of medicine nor can we assure you that governmental authorities in those states
will not seek termination of these
arrangements on the same basis. While we have not been subject to such proceedings in the past, nor are we currently aware of any other corporations that are subject to such proceedings, we could be
materially harmed if any state governmental authorities or the professional corporations with which we have an administrative services agreement were to succeed in such a termination.

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

Many states prohibit the splitting or sharing of fees between physicians and non-physicians, as well as between treating
physicians and referral sources. 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 practice management agreements between entities and physicians as unlawful fee-splitting. We believe our arrangements with physicians comply in all material respects with
the fee-splitting laws of the states in which we operate. Nevertheless, if government regulatory authorities were to disagree, we and our radiation oncologists could be subject to civil
and criminal penalties, and we could be required to restructure or terminate our contractual and other arrangements, which would result in a loss of revenue and could result in less input into the
business decisions of such practices. 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.

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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:



While
we have structured our operations in a manner that we believe complies in all material respects with all applicable laws and regulations, we cannot assure you that government
regulators will agree, given the breadth and complexity of such laws. If a government agency were to find that we are not in compliance with these laws, we could suffer civil or criminal penalties,
including becoming the subject of cease and desist orders, rejection of the payment of our claims, the loss of our licenses to operate and our ability to participate in government or private
healthcare programs.

Our business may be harmed by technological and therapeutic changes.

The treatment of cancer patients is subject to potential 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.

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 and our operating results could be adversely affected.

We may be unable to identify, negotiate and complete suitable acquisition and development opportunities on reasonable terms. We began
operating our first radiation treatment center in 1983, and provide radiation therapy at all of our treatment centers. We expect to continue to add additional treatment centers in our existing and new
local markets. Our growth, however, will depend on several factors, including:



Growth
through acquisitions is a primary component of our business strategy. We continually evaluate potential acquisitions and intend to actively pursue acquisition opportunities, some
of which could be material. Future acquisitions could be financed by internally generated funds, bank

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borrowings,
public offerings or private placements of equity or debt securities, or a combination of the foregoing. There can be no assurance that we will be able to make acquisitions on terms
favorable to us or at all. If we complete acquisitions, we will encounter various associated risks, including the possible inability to integrate an acquired business into our operations, goodwill
impairment, diversion of management's attention and unanticipated problems or liabilities, some or all of which could have a
material adverse effect on our operations and financial performance. See "Risk FactorsWe may encounter numerous business risks in acquiring and developing additional treatment centers,
and may have difficulty operating and integrating those treatment centers."

We may encounter numerous business risks in acquiring and developing additional treatment centers, and may have difficulty operating and integrating those treatment centers.

Over the past three years we have acquired eight treatment centers and developed 17 treatment centers. When we acquire or develop
additional treatment centers, we may:



Larger
acquisitions can substantially increase our potential exposure to business risks. Furthermore, integrating a new treatment center could be expensive and time consuming, and could
disrupt our ongoing business and distract our management and other key personnel.

We
may from time to time explore acquisition opportunities outside of the United States when favorable opportunities are available to us. In addition to the risks set forth herein,
foreign acquisitions involve unique risks including the particular economic, political and regulatory risks associated with the specific country, currency risks, the relative uncertainty regarding
laws and regulations and the potential difficulty of integrating operations across different cultures and languages.

We
currently plan to continue to acquire and develop new treatment centers in existing and new local markets. We may not be able to structure economically beneficial arrangements in new
markets as a result of healthcare laws applicable to such market or otherwise. If these plans change for any reason or the anticipated schedules for opening and costs of development are revised by us,
we may be negatively impacted. There can be no assurance that these planned treatment centers will be completed or that, if developed, will achieve sufficient patient volume to generate positive
operating margins. If we are unable to timely and efficiently integrate an acquired or newly-developed treatment center, our business could suffer. In addition, we may incur significant transaction
fees and expenses even for potential transactions that are not consummated.

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Efforts to regulate the construction, acquisition or expansion of healthcare 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 laws which require prior approval for the construction, acquisition or expansion of
healthcare treatment centers. In giving approval, these states consider the need for additional or expanded healthcare treatment centers or services. In the states of Kentucky, Massachusetts,
Michigan, North Carolina, Rhode Island, South Carolina and West Virginia in which we currently operate, certificates of need must be obtained for capital expenditures exceeding a prescribed amount,
changes in capacity or services offered and various other matters. Other states in which we now or may in the future operate may also require certificates of need under certain circumstances not
currently applicable to us. We cannot assure you that we will be able to obtain the certificates of need or other required approvals for ongoing, additional or expanded treatment centers or services
in the future. In addition, at the time we acquire a treatment center, we may agree to replace equipment or expand the acquired treatment center. If we are unable to obtain required approvals, we may
not be able to acquire additional treatment centers or other facilities, expand the healthcare services we provide at these treatment centers or replace equipment or expand acquired treatment centers.

Our financial results may suffer if we have to write-off goodwill or other intangible assets.

A significant portion of our total assets consist of goodwill and other intangible assets. Goodwill and other intangible assets, net of
accumulated amortization, accounted for 66.6% and 69.2% of the total assets on our balance sheet as of December 31, 2009 and 2010, respectively. We may not realize the value of our goodwill or
other intangible assets. We expect to engage in additional transactions that will result in our recognition of additional goodwill or other intangible assets. We evaluate on a regular basis whether
events and circumstances have occurred that indicate that all or a portion of the carrying amount of goodwill or other intangible assets may no longer be recoverable, and is therefore impaired. Under
current accounting rules, any determination that impairment has occurred would require us to write-off the impaired portion of our goodwill or the unamortized portion of our intangible
assets, resulting in a charge to our earnings. Such a write-off could have a material adverse effect on our financial condition and results of operations. For the year ended
December 31, 2010, we wrote-off approximately $91.2 million in goodwill as a result of our annual impairment test and an additional $2.5 million as a result of closing
certain radiation treatment centers. At December 31, 2010, we do not believe any of our reporting units are at risk of future impairment, however, should certain events occur such as
contemplated de novo and acquisitions do not materialize, there could be a reasonable possibility of impairment.

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 radiation
treatment centers with efficient and effective accounting and scheduling systems. Our information systems require maintenance and upgrading to meet our needs, which could significantly increase our
administrative expenses. We are currently upgrading multiple systems and migrating to other systems within our organization.

Furthermore,
any system failure that causes an interruption in service or availability of our systems could adversely affect operations or delay the collection of revenues. Even though
we have implemented network security measures, our servers are vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering. The occurrence of any of these
events could result in interruptions, delays, the loss or corruption of data, or cessations in the availability of systems, all of which could have a material, adverse effect on our financial position
and results of operations and harm our business reputation.

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The
performance of our information technology and systems is critical to our business operations. Our information systems are essential to a number of critical areas of our operations,
including:



If we fail to effectively and timely implement electronic health record systems, our operations could be adversely affected.

As required by the American Recovery and Reinvestment Act of 2009, the DHHS has developed and is implementing an incentive payment
program for eligible healthcare professionals that adopt and meaningfully use certified electronic health record ("EHR") technology. If our radiation treatment centers are unable to meet the
requirements for participation in the incentive payment program, we will not be eligible to receive incentive payments that could offset some of the costs of implementing EHR systems. Further,
beginning in 2015, eligible healthcare professionals that fail to demonstrate meaningful use of certified EHR technology will be subject to reduced payments from Medicare. Failure to implement EHR
systems effectively and in a timely manner could have a material, adverse effect on our financial position and results of operations.

We are addressing a prior year material weakness with respect to our internal controls.

In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2009, we
identified a material weakness in internal controls relating to the preparation of the income tax accounts. We have taken steps since then to remediate the internal control weakness such that at
December 31, 2010, our controls over income taxes are operating effectively. During 2010, we have continued remediation over the preparation of the income tax accounts and as of
December 31, 2010, we remediated and implemented certain processes and procedures to improve our calculation of our tax provision and our reconciliation of the tax balance sheet accounts. As we
further optimize and refine our income tax provision processes, we will review the related controls and may take additional steps to ensure that they remain effective and are integrated appropriately.
While we have implemented the procedures described above and will continue to take further steps in the near future to strengthen further our internal controls, there can be no assurance that we will
not identify control deficiencies in the future or that such deficiencies will not have a material impact on our operating results or financial statements.

A significant number of our treatment centers are concentrated in certain states, particularly Florida, which makes us sensitive to regulatory, economic and other conditions
in those states.

Our Florida treatment centers accounted for approximately 49%, 46% and 45% of our freestanding radiation revenues during the years
ended December 31 2008, 2009 and 2010, respectively. Our treatment centers are also concentrated in the states of Michigan and North Carolina, which accounted for approximately 4% and 8%,
respectively, of our freestanding radiation revenues for the

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year
ended December 31, 2010. This concentration makes us particularly sensitive to regulatory requirements in those locations, including those related to false and improper claims,
anti-kickback laws, self-referral laws, fee-splitting, corporate practice of medicine, anti-trust, licensing and certificates of need, as well as
economic and other conditions which could impact us. If our treatment centers in these states are adversely affected by changes in regulatory, economic and other conditions, our revenue and
profitability may decline.

Our treatment centers in Florida and other areas that could be disrupted or damaged by hurricanes.

Florida is susceptible to hurricanes and we currently have 28 radiation treatment centers located in Florida. Our Florida centers
accounted for approximately 49%, 46% and 45% of our freestanding radiation revenues during the years ended December 31 2008, 2009 and 2010, respectively. In 2005, 21 of our treatment
centers in South Florida were disrupted by Hurricane Wilma which required us to close all of these centers for one business day. Although none of these treatment centers suffered structural damage as
a result of the hurricane, their utility services were disrupted. While Hurricane Wilma did not have any long-term impact on our business, our Florida treatment centers and any of our
other treatment centers located in other areas that are in the path of a hurricane could be subject to significant hurricane-related disruptions and/or damage in the future and could have an adverse
affect on our business and financial results. We carry property damage and business interruption insurance on our facilities, but there can be no assurance that it would be adequate to cover all of
our hurricane-related losses.

We have potential conflicts of interest relating to our related party transactions which could harm our business.

We have potential conflicts of interest relating to existing agreements we have with certain of our directors, executive officers and
equityholders. In 2008, 2009 and 2010, we paid an aggregate of $15.4 million, $17.1 million and $19.9 million, respectively, under certain of our related party agreements,
including leases, and we received $103.1 million, $89.3 million and $85.6 million, respectively, pursuant to our administrative services agreements with related parties. Potential
conflicts of interest can exist if a related party has to make a decision that has different implications for us and the related party. If a dispute arises in connection with any of these agreements,
if not resolved satisfactorily to us, our business could be harmed. These agreements include



In
California, Maryland, Massachusetts, Michigan, Nevada, New York and North Carolina, we have administrative services agreements with professional corporations that are owned by certain
of our directors, executive officers and equityholders who own interests in these professional corporations. While we have transition services agreements corresponding to our administrative services
agreements in place in all states except New York that provide us with the ability to designate qualified successor physician owners of the shares held by the physician owners of these professional
corporations upon the occurrence of certain events, there can be no assurance that we will be able to enforce them under the laws of the respective states or that they will not be challenged by
regulatory agencies. Potential conflicts of interest may arise in connection with the administrative services agreements that may have materially different implications for us and the professional
corporations and there can be no assurance that it will not harm us. For example, we bill for such services either on a fixed basis, percentage of net

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collections
basis, or on a per treatment basis, depending on the particular state requirements and certain of these arrangements are subject to renegotiation on an annual basis. We may be unable to
renegotiate acceptable fees, in which event many of the administrative services agreements provide for binding arbitration. If we are unsuccessful in renegotiations or arbitration this could
negatively impact our operating margins or result in the termination of our administrative services agreements.

Additionally,
we lease 29 of our properties from ownership groups that consist of certain of our directors, executive officers and equityholders. Our lease for the Broadway office in
Fort Myers, Florida is on a month-to-month basis and there can be no assurance that it will continue in the future. We may be unable to renegotiate these leases when they come
up for renewal on terms acceptable to us, if at all.

In
October 2003, we replaced our existing third-party medical malpractice insurance coverage with coverage we obtained from an insurance entity which is owned by certain of our
directors, executive officers and equityholders. We renewed this coverage in 2008, 2009 and 2010, with the approval of the Audit/Compliance Committee of the Company's board of directors. We may be
unable to renegotiate this coverage at acceptable rates and comparable coverage may not be available from third-party insurance companies. If we are unsuccessful in renewing our malpractice insurance
coverage, we may not be able to continue to operate without being exposed to substantial risks of claims being made against us for damage awards we are unable to pay.

Related
party transactions between us and any related party are subject to approval by the Audit/Compliance Committee on behalf of the Company's board of directors or by the Company's
board of directors, and disputes are handled by the Company's board of directors. There can be no assurance that the above or any future conflicts of interest will be resolved in our favor. If not
resolved, such conflicts could harm our business. For a further description of our related party transactions, see "Item 13. Certain Relationships and Related Party Transactions, and Director
Independence."

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 material in the treatment of the lungs, prostate,
breasts, cervix and other organs. The materials are obtained from, and, if not permanently placed in a patient or consumed, returned to, a third-party provider of supplies to hospitals and other
radiation therapy practices, which has the ultimate responsibility for its proper disposal. We, however, remain subject 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. Although we believe we are in compliance in all material respects with all applicable laws, 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.

In response to a number of articles 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 articles have been published discussing the risks of (sometimes fatal) errors in radiation therapy treatment, especially those
relating to linear accelerators. In response, ACRO has called for required accreditation of all facilities which bill Medicare for advanced medical imaging and radiation oncology services, including
those in hospitals. In addition, the American Society for Radiation Oncology called for the establishment of the nation's first central database for the reporting of errors involving linear
accelerators and CT scanners. Federal legislation in these areas is under consideration and a congressional hearing was recently held.

Of
our 95 centers, 59 have received or are in process of receiving ACRO accreditation. In addition to a deep physics infrastructure and internal maintenance department, we have recently
begun to utilize

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Gamma
Function as a broad application radiation safety monitoring tool to minimize potential errors in our radiation therapy treatments. While we continue to improve upon safety measures aimed at
minimizing errors in radiation therapy treatment in accordance with our internal protocols as well as the mandates of organizations like ACRO, we cannot assure you that any further critical press and
government scrutiny will not adversely affect our business and results of operations.

We may be subject to liabilities from claims brought against our facilities.

We could be subject to litigation relating to our business practices, including claims and legal actions by patients and others in the
ordinary course of business alleging malpractice, product liability or other legal theories. For a discussion of current pending material litigation against us, see "Item 3. Legal Proceedings."

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

We are exposed to the risk of professional liability and other claims against us and our radiation oncologists and other physicians and
professionals arising out of patient medical treatment at our treatment centers. Our risk exposure as it relates to our non-radiation oncology physicians could be greater than with our
radiation oncologists to the extent such non-radiation oncology physicians are engaged in diagnostic activities. Malpractice 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, by physician specialty and other factors. The rising costs of insurance premiums, as well as successful malpractice claims against us or one of our physicians, could
have a material adverse effect on our financial position and results of operations.

It
is also possible that our excess liability and other 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. For example, from time to time we agree to indemnify
third parties, such as hospitals and clinical laboratories, for various claims that may not be covered by insurance. 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.

We are indirectly owned and controlled by Vestar and its interests may conflict with yours as a noteholder.

Vestar indirectly controls approximately 83% of the Class A voting equity units of RT Investments, which controls us, and which
in turn controls RTS. As a result, they have the power to elect a majority of RTS's board of directors and effectively have control over major decisions regardless of whether noteholders believe that
any such decisions are in their own best interests. The interests of Vestar as an equity holder may conflict with your interests as a noteholder of RTS. Vestar may have an incentive to increase the
value of their investment or cause us to distribute funds at the expense of our financial condition and affect our ability to make payments on the notes. In addition, Vestar may have an interest in
pursuing acquisitions, divestitures, financings or other transactions that it believes could enhance its equity investments even though such transactions might involve risks to you as a noteholder of
RTS.

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Table of Contents

Item 1B.Unresolved Staff Comments

None

Item 2.Properties

Our executive and administrative offices are located in Fort Myers, Florida. These offices contain approximately 79,000 square feet of
space. We also lease approximately 5,600 square feet of administrative office space in Florence, Kentucky pursuant to an operating lease that expires April 30, 2012. These offices will be
adequate for our current primary needs, we also believe that we will require significant additional space to meet our future needs and such future expansion is in the preliminary stages.

Our
radiation treatment centers typically range in size from 5,000 to 12,000 square feet. We currently operate 95 radiation treatment centers in Alabama, Arizona, California, Delaware,
Florida, Kentucky,
Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, South Carolina, Rhode Island and West Virginia. We own the real estate on which four of our treatment centers are
located. We lease land and space at 85 treatment center locations, of which in 29 of these locations, certain of our directors, executive officers and equityholders have an ownership interest. These
leases expire at various dates between 2012 and 2044 and 69 of these leases have one or more renewal options of five or 10 years. Also, six of our treatment center locations are in
hospital-based and other group facilities. We consider all of our offices and treatment centers to be well-suited to our present requirements. However, as we expand to additional treatment
centers, or where additional capacity is necessary in a treatment center, additional space will be obtained where feasible. For further information relating to our properties and treatment centers,
can be found in Item 1 of this report under the caption, "BusinessTreatment Centers."

Item 3.Legal Proceedings

We are involved in certain legal actions and claims that arise in the ordinary course of our business. We do not believe that an
adverse decision in any of these matters would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

On
September 16, 2010, we were served with a civil complaint that was filed against us in the United States District Court for the Southern District of New York by TPTCC
NY, Inc., The Proton Institute of NY, LLC and NY Medscan LLC. The complaint alleges, among other things, that in connection with a failed business venture between plaintiffs and
the Company to provide proton beam therapy ("PBT") services in New York City, the Company, certain of its subsidiaries and Norton Travis, the Company's general counsel, misappropriated confidential
information and trade secrets of the plaintiffs and conspired in restraint of trade, engaged in unfair competition, and conspired to fix prices in seeking to establish a PBT services business in New
York City. The plaintiffs seek to recover at least $350 million in damages, plus punitive damages of up to three times the amount of damages awarded. We intend to vigorously defend this suit.
In the opinion of management, the case is without merit. By Order dated February 24, 2011, Judge Jed S. Rakoff granted our motion to dismiss in its entirety dismissing all claims against all
defendants including the Company and Mr. Travis.

Item 4.Removed and Reserved

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PART II

Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

We are a direct wholly owned subsidiary of RT Investments. Accordingly, there is no public trading market for our common stock.

Stockholders

As of February 1, 2011, there was one owner of record of our common stock, RT Investments.

Dividends

We have not paid cash dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future.

Our
senior secured credit facilities and the indenture governing the Existing Notes generally prohibit the payment of dividends by us on shares of our common stock, with certain limited
exceptions.

Equity Compensation Plan Information

The following table lists the number of securities of RT Investments available for issuance as of December 31, 2010 under the RT
Investments equity-based incentive plan, as amended. For a description of the plan, please see note 16 to the consolidated financial statements included elsewhere in this Annual Report on
Form 10-K.

Plan Category

Number of Securities to be
Issued Upon Exercise of
Outstanding Options
(a)

Weighted-Average
Exercise Price of
Outstanding Options
(b)

Number of Securities Remaining
Available for Future Issuance
under Equity Compensation
Plans (excluding Securities
Reflected in Column(a))Equity compensation plans approved by security holders


N/A


N/A

Non-voting preferred equity units: 4,874
Voting Class A equity units: 22,608
Non-voting Class B equity units: 9,648
Non-voting Class C equity units: 29,489Equity compensation plans not approved by security holders


N/A


N/A

N/ATOTAL







Non-voting preferred equity units: 4,874
Voting Class A equity units: 22,608
Non-voting Class B equity units: 9,648
Non-voting Class C equity units: 29,489


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Table of Contents

Unregistered Sales of Equity Securities

No equity securities of the Company were sold during 2010; however, the Company's direct parent, RT Investments, sold equity securities
during this period.

The
following table sets forth the number of units of common equity of RT Investments issued during 2010 pursuant to the RT Investments equity-based incentive plan, as amended. The units
were granted under Rule 701 promulgated under the Securities Act.

Dates

Title of Securities

Amount

Purchasers

ConsiderationApril 28, 2010

Class B non-voting equity units


16,665

One Officer

$
4,166Class C non-voting equity units


43,099



$
2,155December 23, 2010

Non-voting preferred equity units


126

One Officer

$
126,000Class A voting equity units


2,392



$
23,920


Repurchases of Equity Securities

No equity securities of the Company or RT Investments were repurchased during 2010. We did not repurchase any of our common stock as
part of an equity repurchase program during 2010.

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Item 6.Selected Financial Data

The following selected historical consolidated financial data as of and for the period from January 1 to February 21,
2008 (Predecessor), the period from February 22 to December 31, 2008 (Successor) and for the years ended December 31, 2009 and 2010 (Successor) were derived from our audited
consolidated financial statements, included elsewhere in this Annual Report on Form 10-K. All adjustments necessary for a fair presentation have been included. All such adjustments
are considered to be of a normal recurring nature. The selected historical consolidated financial data as of December 31, 2006 and 2007 and for the years then ended (Predecessor) were derived
from our audited consolidated financial statements, adjusted for the retrospective presentation impact of changes in accounting guidance related to non-controlling interests, which are not
included in this Annual Report on Form 10-K. As a result of the purchase accounting treatment applied for the Merger, our audited consolidated financial statements include the
consolidated accounts of the Successor as of December 31, 2010 and 2009 and for the 313-day period ended December 31, 2008. For dates prior to February 22, 2008, our
audited consolidated financial statements are of the Predecessor. These statements have been prepared using the Predecessor's basis in the assets and liabilities and the historical results of
operations for periods prior to the Merger. Periods subsequent to February 22, 2008 have been prepared using our basis in the assets and liabilities acquired in the purchase transaction. Our
historical results included below and elsewhere in this Annual Report on Form 10-K are not necessarily indicative of our future performance. You should read the following data in
conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," our audited consolidated financial statements and the accompanying notes
included

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elsewhere
in this Annual Report on Form 10-K, and other financial information included in this Annual Report on Form 10-K.

Predecessor

SuccessorYear Ended
December 31,
2006

Year Ended
December 31,
2007

Period From
January 1
to
February 21,
2008

Period From
February 22
to
December 31,
2008

Year Ended
December 31,
2009

Year Ended
December 31,
2010(in thousands):Consolidated Statements of Operations Data:Net patient service revenue

$
284,067

$
381,586

$
76,927

$
413,305

$
517,646

$
535,913Other revenue


9,915


8,595


1,179


5,864


6,838


8,050Total revenues


293,982


390,181


78,106


419,169


524,484


543,963Salaries and benefits


147,697


203,408


42,209


206,159


259,532


282,302Medical supplies


7,569


12,982


2,924


32,545


45,361


43,027Facility rent expense


7,150


10,877


2,269


13,783


22,106


27,885Other operating expenses


12,761


17,896


3,102


17,027


24,398


27,103General and administrative expenses


30,209


45,656


20,340


43,393


54,537


65,798Depreciation and amortization


17,430


25,776


5,347


32,609


46,416


46,346Provision for doubtful accounts


9,425


9,648


3,789


17,896


12,871


8,831Interest expense, net


11,855


19,726


4,721


55,100


62,502


58,505Gain on sale of interest in a radiation practice











(3,113
)




Loss on sale of assets of a radiation treatment center

















1,903Termination of professional services agreement











7,000





Loss on sale of real estate











1,036





Early extinguishment of debt








3,688








10,947Impairment loss





1,568








3,474


97,916Total expenses


244,096


347,537


88,389


423,435


531,197


670,563Income (loss) before income taxes


49,886


42,644


(10,283
)

(4,266
)

(6,713
)

(126,600
)Income tax expense (benefit)


18,983


15,525


570


(1,413
)

1,002


(12,810
)Net income (loss)


30,903


27,119


(10,853
)

(2,853
)

(7,715
)

(113,790
)Net income (loss) attributable to non-controlling interests


(580
)

(1,211
)

(19
)

(2,483
)

(1,835
)

(1,698
)Net income (loss) attributable to Radiation Therapy Services Holdings, Inc. shareholder

$
30,323

$
25,908

$
(10,872
)
$
(5,336
)
$
(9,550
)
$
(115,488
)Balance Sheet Data (at end of period):Cash and cash equivalents

$
15,413

$
10,310




$
49,168

$
32,958

$
13,977Working capital(1)


49,577


67,946





93,935


49,970


19,076Total assets


416,531


582,096





1,405,940


1,379,225


1,236,330Finance obligations


16,995


34,146





60,605


77,230


8,568Total debt


205,244


305,159





577,444


549,059


598,831Total equity


141,592


176,492





629,171


622,007


508,208Other Financial Data:Ratio of earnings to fixed charges(2)


4.70x


2.95x











Deficiency to cover fixed charges(3)








10,341


6,631


9,128


130,306


(1)Working
capital is calculated as current assets minus current liabilities.(2)For
purposes of calculating the ratio of earnings to fixed charges, (i) earnings is defined as pretax income (loss) from continuing operations before
adjustment for noncontrolling interests in consolidated subsidiaries plus/minus income or loss from equity investees plus fixed charges and (ii) fixed charges is defined as interest expense
(including capitalized interest, of which we have none, and any amortization of debt issuance costs) and the estimated portion of operating lease expense deemed by management to represent the interest
component of rent expense.(3)Coverage
deficiency represents the amount by which earnings were insufficient to cover fixed charges.


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Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the "Selected Financial Data" and the
consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This section of this Annual Report on Form 10-K
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 to identify forward-looking statements. In particular, statements that we make in this section relating
to the sufficiency of anticipated sources of capital to meet our cash requirements are 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 titled "Risk Factors". You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K.

Overview

We own, operate and manage treatment centers focused principally on providing comprehensive radiation treatment alternatives ranging
from conventional external beam radiation, IMRT, as well as newer, more technologically-advanced procedures. We believe we are the largest company in the United States focused principally on providing
radiation therapy. We opened our first radiation treatment center in 1983 and, as of December 31, 2010 we provided radiation therapy services in 95 treatment centers. Most of our treatment
centers are strategically clustered into 28 local markets in 16 states, including Alabama, Arizona, California, Delaware, Florida, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New
York, North Carolina, South Carolina, Rhode Island, and West Virginia. Of these 95 treatment centers, 39 treatment centers were internally developed, 50 were acquired and six involve hospital-based
treatment centers and other groups. We have continued to expand our affiliation with physician specialties in closely related areas including gynecological and surgical oncology and urology in a
limited number of our local markets to strengthen our clinical working relationships.

On
October 19, 2007, our wholly owned subsidiary, RTS entered into an Agreement and Plan of Merger (the "Merger Agreement") with RT Investments, Parent and RTS
MergerCo, Inc., a wholly-owned subsidiary of Parent, pursuant to which we consummated the Merger. Upon completion of the Merger, each share of RTS's common stock outstanding immediately prior
to the effective time of the Merger (other than certain shares held by members of RT Investments' management team and certain employees) was converted into $32.50 in cash without interest. The Merger
was consummated on February 21, 2008 (the "Closing"). Immediately following the Closing, Parent became the owner of all of the outstanding common stock of RTS, which in turn, became a
wholly-owned indirect subsidiary of RT Investments, and Vestar and its affiliates became the beneficial owners of approximately 57% of the outstanding Class A voting equity units of RT
Investments and its co-investors became the beneficial owners of approximately 26% of the outstanding Class A voting equity units of RT Investments. As a result, Vestar and its
affiliates currently control approximately 83% of the Class A voting equity units of RT Investments through its ability to directly or indirectly control its co-investors. In
addition, at the Closing, the management investors, including current and former directors and executive officers, either exchanged certain shares of RTS's common stock or invested cash in RTS, in
each case, in exchange for Class A voting equity units and non-voting preferred equity units of RT Investments. See "Item 13. Certain Relationships and Related Transactions,
and Director Independence." At the Closing, these management investors as a group became the beneficial owners of approximately 17% of the outstanding Class A voting equity units of RT
Investments. RT Investments also adopted a management incentive equity plan pursuant to which certain employees are eligible to receive incentive unit awards (Class B and C
non-voting equity units) from an equity pool representing up to 13% of the common

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equity
value of RT Investments, which as of December 31, 2010 was 12.4%. In connection with the Closing, Vestar, its affiliates and these management investors invested approximately
$627.3 million in equity units of RT Investments.

We
use a number of metrics to assist management in evaluating financial condition and operating performance, and the most important follow:



Revenue Drivers

Our revenue growth is primarily driven by expanding the number of our centers, optimizing the utilization of advanced technologies at
our existing centers and benefiting from demographic and population trends in most of our local markets. New centers are added or acquired based on capacity, demographics, and competitive
considerations.

The
average revenue per treatment is sensitive to the mix of services used in treating a patient's tumor. The reimbursement rates set by Medicare and commercial payers tend to be higher
for more advanced treatment technologies, reflecting their higher complexity. A key part of our business strategy is to make advanced technologies available once supporting economics exist. For
example, we have been utilizing IGRT and Gamma Function, a proprietary capability to enable measurement of the actual amount of radiation delivered during a treatment and to provide immediate feedback
for adaption of future treatments as well as for quality assurance, where appropriate, now that reimbursement codes are in place for these services.

Operating Costs

The principal costs of operating a treatment center are (1) the salary and benefits of the physician and technical staff, and
(2) equipment and facility costs. The capacity of each physician and technical position is limited to a number of delivered treatments, while equipment and facility costs for a treatment center
are generally fixed. These capacity factors cause profitability to be very sensitive to treatment volume. Profitability will tend to increase as resources from fixed costs including equipment and
facility costs are utilized.

Sources of Revenue By Payer

We receive payments for our services rendered to patients from the government Medicare and Medicaid programs, commercial insurers,
managed care organizations and our patients directly. Generally, our revenue is determined by a number of factors, including the payer mix, the number and nature of procedures performed and the rate
of payment for the procedures. The following table sets

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forth
the percentage of our net patient service revenue we earned based upon the patients' primary insurance by category of payer in our last three fiscal years.

Year Ended December 31,Payer

2008

2009

2010Medicare


45.2
%

42.0
%

44.6
%Commercial


51.8


54.7


50.9Medicaid


1.6


2.4


3.0Self pay


1.4


0.9


1.5Total net patient service revenue


100.0
%

100.0
%

100.0
%


Medicare and Medicaid

Medicare is a major funding source for the services we provide and government reimbursement developments can have a material effect on
operating performance. These developments include the reimbursement amount for each Current Procedural Terminology ("CPT")
service that we provide and the specific CPT services covered by Medicare. CMS, the government agency responsible for administering the Medicare program, administers an annual process for considering
changes in reimbursement rates and covered services. We have played, and will continue to play, a role in that process both directly and through the radiation oncology professional societies.

Since
cancer disproportionately affects elderly people, a significant portion of our net patient service revenue is derived from the Medicare program, as well as related
co-payments. Medicare reimbursement rates are determined by CMS and are lower than our normal charges. Medicaid reimbursement rates are typically lower than Medicare rates; Medicaid
payments represent approximately 3.0% of our net patient service revenue for the year ended December 31, 2010.

Medicare
reimbursement rates are determined by a formula which takes into account an industry wide CF multiplied by Relative Value Units ("RVUs") determined on a per procedure basis. The
CF and RVUs may change on an annual basis. In 2009, the CF decreased by 5.3%. The net result of changes to the CF and RVUs over the last several years prior to 2009 has had an immaterial impact on our
business, with the CF percentage decrease in 2009 having a significant impact on our business. It is difficult, however, to forecast the future impact of any changes. We depend on payments from
government sources and any changes in Medicare or Medicaid programs could result in a decrease in our total revenues and net income.

On
January 1, 2010, the CF was scheduled to decrease 21.2%, but Congress postponed this decrease throughout 2010 by passing several pieces of legislation. Additionally, in June
2010, Congress passed a 2.2% increase. The CF was again scheduled to decrease 24.9% as of January 1, 2011, but. Congress passed the Medicare and Medicaid Extenders Act of 2010, which was signed
by President Obama on December 15, 2010. This Act delays until the end of 2011 the scheduled 24.9% cut and for now maintains rates at their current level. If future reductions are not
suspended, and if a permanent "doc fix" is not signed into law, the reimbursement decrease currently scheduled to take effect on January 1, 2012, will have a significant adverse impact on our
business.

Commercial

Commercial sources include private health insurance as well as related payments for co-insurance and
co-payments. We enter into contracts with private health insurance and other health benefit groups by granting discounts to such organizations in return for the patient volume they
provide.

Most
of our commercial revenue is from managed care business and is attributable to contracts where a set fee is negotiated relative to services provided by our treatment centers. We do
not have

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any
contracts that individually represent over 10% of our total net patient service revenue. We receive our managed care contracted revenue under two primary arrangements. Approximately 98% of our
managed care business is attributable to contracts where a fee schedule is negotiated for services provided at our treatment centers. Approximately 2% of our net patient service revenue is
attributable to contracts where we bear utilization risk. Although the terms and conditions of our managed care contracts vary considerably, they are typically for a one-year term and
provide for automatic renewals. If payments by managed care organizations and other private third-party payers decrease, then our total revenues and net income would decrease.

Self Pay

Self pay consists of payments for treatments by patients not otherwise covered by third-party payers, such as government or commercial
sources. Because the incidence of cancer is much higher in those over the age of 65, most of our patients have access to Medicare or other insurance and therefore the self-pay portion of
our business is less than it would be in other circumstances.

Effective
July 1, 2007, we granted a discount on gross charges to self pay payers not covered under other third party payer arrangements. The discount amounts are excluded from
patient service revenue. To the extent that we realize additional losses resulting from nonpayment of the discounted charges, such additional losses are included in the provision for doubtful
accounts.

Other Material Factors

Other material factors that we believe will also impact our future financial performance include:



Results of Operations

As a result of the purchase accounting treatment applied for the Merger, our audited consolidated financial statements, included
elsewhere in this Annual Report on Form 10-K, include the consolidated accounts of the Successor as of December 31, 2010, 2009 and for the 313-day period ended
December 31, 2008. For dates prior to February 22, 2008, the financial statements are of the Predecessor. These statements have been prepared using the Predecessor's basis in the assets
and liabilities and the historical results of operations for periods prior to the Merger. Periods on and subsequent to February 22, 2008 have been prepared using our basis in the assets and
liabilities acquired in the purchase transaction. Under purchase accounting, the Merger was treated as a purchase and the assets so acquired were valued at their fair market value, as described below.
Accordingly, the results of operations, other comprehensive
income (loss), changes in equity and cash flow for the Predecessor and Successor periods are not comparable.

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As a result of the Merger, (i) fixed assets increased from $208.1 million at February 21, 2008 to $220.5 million,
$225.8 million, and $229.7 million at December 31, 2008, 2009 and 2010, respectively, and (ii) intangible assets increased from $9.7 million at February 21,
2008 to $106.8 million, $92.3 million, and $85.2 million at December 31, 2008, 2009 and 2010, respectively and accordingly, depreciation and amortization increased from
$5.3 million for the period from January 1, 2008 to February 21, 2008, and $32.6 million for the period from February 22, 2008 to December 31, 2008 to
$46.4 million for the years ended December 31, 2009 and 2010; and (ii) the Successor's incurrence of $485.1 million of debt at the time of the Merger caused interest
expense to increase from $4.7 million for the period from January 1, 2008 to February 21, 2008 to $55.1 million for the period from February 22, 2008 to
December 31, 2008 and $62.5 million, and $58.5 million for the years ended December 31, 2009 and 2010, respectively.

For
purposes of comparison between the Predecessor and Successor periods, the information presented below includes unaudited year ended December 31, 2008 financial data, which was
derived from our audited consolidated financial statements by combining the Predecessor period financial data and the Successor period financial data. This presentation is not consistent with GAAP,
and may yield results that are not strictly comparable on a period-to-period basis. Such results are not necessarily indicative of what the results for the full fiscal year
2008 would have been had the Merger not occurred.

The
following summary results of operations data are qualified in their entirety by reference to, and should be read in conjunction with, our unaudited condensed consolidated financial
statements and the accompanying notes and our audited consolidated financial statements and the accompanying notes,
included in this Annual Report on Form 10-K, and other financial information included in this Annual Report on Form 10-K.

Years Ended December 31, 2008, 2009 and 2010

For the year ended December 31, 2010, our total revenues grew by 3.7%, over the prior year, while our total revenues for the
year ended December 31, 2009 grew by 5.5% over the prior year. For the years ended December 31, 2010, 2009 and 2008, we had total revenues of $544.0 million, $524.5 million
and $497.3 million, respectively.

For
the years ended December 31, 2010, 2009 and 2008, net patient service revenue comprised 98.5%, 98.7% and 98.6%, respectively, of our total revenues. In states where we employ
radiation oncologists, we derive our net patient service revenue through fees earned from the provision of the professional and technical component fees of radiation therapy services. In states where
we do not employ radiation oncologists, we derive our administrative services fees principally from administrative services agreements with professional corporations. As of December 31, 2010,
we employed the physicians in 57 of our treatment centers and operated pursuant to administrative services agreements in 38 of our treatment centers. In accordance with ASC 810, we consolidate the
operating results of certain of the professional corporations for which we provide administrative services into our own operating results. In 2010, 2009 and 2008, 22.1%, 23.6% and 23.7%, respectively,
of our net patient service revenue was generated by professional corporations with which we have administrative services agreements.

In
our net patient service revenue for the years ended December 31, 2010, 2009, and 2008, revenue from the professional-only component of radiation therapy and revenue
from the practices of medical specialties other than radiation oncology, comprised approximately 26.4%, 24.8%, and 21.8%, respectively, of our total revenues.

For
the years ended December 31, 2010, 2009 and 2008, other revenue comprised approximately 1.5%, 1.3% and 1.4%, respectively, of our total revenues. Other revenue is primarily
derived from management services provided to hospital radiation therapy departments, technical services provided to

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hospital
radiation therapy departments, billing services provided to non-affiliated physicians, gain and losses from sale/disposal of medical equipment, equity interest in net
earnings/losses of unconsolidated joint ventures and income for equipment leased by joint venture entities.

The
following table summarizes key operating statistics of our results of operations for the periods presented:

Year Ended
December 31,



Year Ended
December 31,2008

2009

% Change

2009

2010

% ChangeNumber of treatment days


256


255





255


254Total RVU'sfreestanding centers


10,321,611


10,818,119


4.8
%

10,818,119


10,833,260


0.1
%RVU's per dayfreestanding centers


40,319


42,424


5.2
%

42,424


42,651


0.5
%Percentage change in RVU's per dayfreestanding centerssame practice basis


13.2
%

2.7
%




2.7
%

(2.1
)%Number of regions at period end


6


8





8


8Local markets at period end


28


28





28


28Treatment centersfreestanding


87


90


3.4
%

90


89


(1.1
)%Treatment centershospital/other groups


10


7


(30.0
)%

7


6


(14.3
)%97


97


0.0
%

97


95


(2.1
)%Days sales outstanding at quarter end


54


44





44


41Percentage change in freestanding revenuessame practice basis


12.1
%

(3.1
)%




(3.1
)%

(3.6
)%Net patient service revenueprofessional services only (in thousands)

$
108,164

$
129,909




$
129,909

$
143,487


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Table of Contents

The following table presents summaries of results of operations for the period from January 1 to February 21, 2008 (Predecessor),
the period from February 22 to December 31, 2008 (Successor), the year ended December 31, 2008 (Combined), the year ended December 31, 2009 (Successor) and the year ended
December 31, 2010 (Successor).

Predecessor

Successor

Combined

Successor

Successor(in thousands):

Period From
January 1
to
February 21,
2008

Period From
February 22
to
December 31,
2008

Year Ended
December 31,
2008

Year Ended
December 31,
2009

Year Ended
December 31,
2010Revenues:Net patient service revenue

$
76,927

$
413,305

$
490,232

$
517,646

$
535,913Other revenue


1,179


5,864


7,043


6,838


8,050Total revenues


78,106


419,169


497,275


524,484


543,963Salaries and benefits


42,209


206,159


248,368


259,532


282,302Medical supplies


2,924


32,545


35,469


45,361


43,027Facility rent expenses


2,269


13,783


16,052


22,106


27,885Other operating expenses


3,102


17,027


20,129


24,398


27,103General and administrative expenses


20,340


43,393


63,733


54,537


65,798Depreciation and amortization


5,347


32,609


37,956


46,416


46,346Provision for doubtful accounts


3,789


17,896


21,685


12,871


8,831Interest expense, net


4,721


55,100


59,821


62,502


58,505Gain on sale of interest in a radiation practice





(3,113
)

(3,113
)




Loss on sale of assets of a radiation treatment center














1,903Termination of professional services agreement





7,000


7,000





Loss on sale of real estate





1,036


1,036





Early extinguishment of debt


3,688





3,688





10,947Impairment loss











3,474


97,916Total expenses


88,389


423,435


511,824


531,197


670,563Loss before income taxes


(10,283
)

(4,266
)

(14,549
)

(6,713
)

(126,600
)Income tax expense (benefit)


570


(1,413
)

(843
)

1,002


(12,810
)Net loss


(10,853
)

(2,853
)

(13,706
)

(7,715
)

(113,790
)Net income attributable to non-controlling interest


(19
)

(2,483
)

(2,502
)

(1,835
)

(1,698
)Net loss attributable to Radiation Therapy Services Holdings, Inc. shareholder

$
(10,872
)
$
(5,336
)
$
(16,208
)
$
(9,550
)
$
(115,488
)


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The
following table presents summaries of results of operations as a percentage of total revenues for the period from January 1 to February 21, 2008 (Predecessor), the
period from February 22 to December 31, 2008 (Successor), the year ended December 31, 2008 (Combined), the year ended December 31, 2009 (Successor) and the year ended
December 31, 2010 (Successor).

Predecessor

Successor

Combined

Successor

SuccessorPeriod From
January 1
to
February 21,
2008

Period From
February 22
to
December 31,
2008

Year Ended
December 31,
2008

Year Ended
December 31,
2009

Year Ended
December 31,
2010Revenues:Net patient service revenue


98.5
%

98.6
%

98.6
%

98.7
%

98.5
%Other revenue


1.5


1.4


1.4


1.3


1.5Total revenues


100.0


100.0


100.0


100.0


100.0Salaries and benefits


54.0


49.2


49.9


49.5


51.9Medical supplies


3.7


7.8


7.1


8.6


7.9Facility rent expenses


2.9


3.3


3.2


4.2


5.1Other operating expenses


4.0


4.1


4.0


4.7


5.0General and administrative expenses


26.0


10.4


12.8


10.4


12.1Depreciation and amortization


6.8


7.8


7.6


8.8


8.5Provision for doubtful accounts


4.9


4.3


4.4


2.5


1.6Interest expense, net


6.0


13.1


12.0


11.9


10.8Gain on sale of interest in a radiation practice





(0.7
)

(0.6
)




Loss on sale of assets of a radiation treatment center














0.3Termination of professional services agreement





1.7


1.4





Loss on sale of real estate





0.2


0.2





Early extinguishment of debt


4.7





0.7





2.0Impairment loss











0.7


18.0Total expenses


113.2


101.0


102.9


101.3


123.2Loss before income taxes


(13.2
)

(1.0
)

(2.9
)

(1.3
)

(23.2
)Income tax expense (benefit)


0.7


(0.3
)

(0.2
)

(0.2
)

(2.4
)Net loss


(13.9
)

(0.7
)

(2.8
)

(1.5
)

(20.8
)Net income attributable to non-controlling interest


0.0


(0.6
)

(0.5
)

(0.3
)

(0.3
)Net loss attributable to Radiation Therapy Services Holdings, Inc. shareholder


(13.9
)%

(1.3
)%

(3.3
)%

(1.8
)%

(21.1
)%


Comparison of the Years Ended December 31, 2009 and 2010

Total revenues.Total revenues increased by $19.5 million, or 3.7%, from $524.5 million in 2009 to $544.0 million
in 2010. Total
revenue was positively impacted by $45.5 million due to our expansion into new practices and treatment centers in existing local markets and new local markets during 2009 and 2010 through the
acquisition of several urology, medical oncology and surgery practices in Florida and Arizona, and the acquisition of a physician practice in South Carolina, the opening of nine de novo

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centers,
the transition of one hospital-based arrangement to freestanding and the acquisition of two centers as follows:

Date

Sites

Location

Market

TypeJanuary 2009


1

Hammonton, New Jersey

South New Jersey

De NovoJanuary 2009


1

Indio, California

Palm Springs, California

De NovoJanuary 2009


1

Bronx, New York

Westchester/BronxNew York

Transition to FreestandingMay 2009


1

Fort Myers, Florida

Lee CountyFlorida

De NovoJune 2009


1

Southbridge, Massachusetts

Central Massachusetts

De NovoJune 2009


1

Gilbert, Arizona

Central Arizona

De NovoJuly 2009


1

Providence, Rhode Island

Rhode Island

De NovoOctober 2009


1

Yucca Valley, California

Palm Springs, California

De NovoMarch 2010


1

El Segundo, California

Los Angeles, California

De NovoMay 2010


1

Pembroke Pines, Florida

Florida East Coast

De NovoMay 2010


1

Myrtle Beach, South Carolina

South Carolina

AcquisitionDecember 2010


1

Princeton West Virginia

West Virginia

Acquisition


Approximately $6.2 million of the increase was due to recognition of additional reimbursement from CMS. The Tax Relief and Health Care Act
of 2006 required the establishment of a physician quality reporting system, including an incentive payment for eligible professionals who satisfactorily report data on quality measures for covered
professional services furnished to Medicare beneficiaries. The program under the Medicare system is known as the Physician Quality Reporting Initiative ("PQRI"). We received $3.2 million in
payments from CMS for the 2009 claims and data submitted for the PQRI program and expect to receive approximately $3.0 million for the 2010 PQRI program. Offsetting the increases from expansion
into new practices and the PQRI program, was a $36.7 million decline in revenue due to decreases in volume and pricing in our existing local markets. The volume decrease was predominantly in
certain local markets in Florida, Michigan, Las Vegas and Arizona. The declines in Las Vegas and Arizona were predominately related to certain office consolidations and transitions of new physicians
covering these markets that impacted our patient volume. In addition to the PQRI and volume items noted above, during the third quarter of 2009 total revenues were reduced by an increase in
contractual allowances of approximately $4.5 million offset by a corresponding decrease in bad debt allowance for the final assessment of our accounts receivable balances within our billing
system. In addition, during the current year, we strategically reallocated a number of radiation therapy treatment machines in certain of our local markets in order to meet anticipated demand
patterns. During this large scale reorganization, treatment volumes experienced a delay as the machines were being reallocated to new facilities. A portion of the decline in treatment volumes during
the current year was due to the machine reallocation, although we continued to experience lower volumes in certain markets as a result of the challenging economic environment.

Salaries and benefits.Salaries and benefits increased by $22.8 million, or 8.8%, from $259.5 million in 2009 to
$282.3 million
in 2010. Salaries and benefits as a percentage of total revenues increased from 49.5% in 2009 to 51.9% in 2010. The increase of $22.8 million included $7.6 million of physician
contracting expenses as result of reassessing certain urology and medical oncology physician groups' compensation arrangements. Additional staffing of personnel and physicians due to our expansion in
certain practices in southwest Florida and Arizona and acquisitions of treatment centers in existing local markets during the latter part of 2009 and in 2010 contributed $23.3 million to our
increase in salaries and benefits. Salaries and benefits decreased $8.1 million in our existing practices and centers within our local markets. The decrease in our existing local markets was
due to the reduction of physician compensation as a result of our revenue declines as well as cost-cutting initiatives implemented during the second half of 2009.

Medical supplies.Medical supplies decreased by $2.4 million, or 5.1%, from $45.4 million in 2009 to $43.0 million
in 2010.
Medical supplies as a percentage of total revenues decreased from 8.6% in

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2009
to 7.9% in 2010. Approximately $4.3 million was related to our expansion into new practices and centers in existing local markets during 2009 and 2010, offset by an approximately
$6.7 million decrease in our remaining practices and centers in existing local markets primarily due to cost savings efforts to reduce the per unit costs of medical supplies, including
pharmaceuticals used in connection with the delivery of radiation therapy treatments, pharmaceuticals used in urology services, and chemotherapy-related medical supplies as well as a result of the
decline in services.

Facility rent expenses.Facility rent expenses increased by $5.8 million, or 26.1%, from $22.1 million in 2009 to
$27.9 million
in 2010. Facility rent expenses as a percentage of total revenues increased from 4.2% in 2009 to 5.1% in 2010. Facility rent expenses consist of rent expense associated with our treatment center
locations. Approximately $3.7 million of the increase was related to our expansion in new practices and centers in existing local markets. On March 31, 2010, the related party lessors
completed the refinancing of certain of their respective mortgages to remove the personal guarantees of the debt related thereto. As a result, of the refinancing of the landlords' mortgages on these
respective properties we derecognized approximately $64.8 million in real estate subject to finance obligation. As a result of the derecognition, our facility rent expense increased by
approximately $2.1 million in 2010 as compared to 2009.

Other operating expenses.Other operating expenses increased by $2.7 million or 11.1%, from $24.4 million in 2009 to
$27.1 million in 2010. Other operating expense as a percentage of total revenues increased from 4.7% in 2009 to 5.0% in 2010. Other operating expenses consist of repairs and maintenance of
equipment, equipment rental and contract labor. Approximately $2.7 million of the increase was related to our expansion in new practices and centers in existing local markets.

General and administrative expenses.General and administrative expenses increased by $11.3 million or 20.6%, from
$54.5 million in
2009 to $65.8 million in 2010. General and administrative expenses principally consist of professional service fees, office supplies and expenses, insurance and travel costs. General and
administrative expenses as a percentage of total revenues increased from 10.4% in 2009 to 12.1% in 2010. The increase of $11.3 million in general and administrative expenses was due to an
increase of approximately $3.2 million relating to the growth in the number of new practices and treatment centers in our existing local markets, an increase of approximately
$2.8 million related to litigation settlements with certain physicians, an increase of approximately $2.9 million in our remaining practices and treatment centers in our existing local
markets including professional services relating to our remediation of a material weakness of approximately $0.3 million and an increase of approximately $2.4 million in diligence costs
relating to acquisitions of radiation oncology practices in South Carolina, West Virginia and several urology practices and potential acquisitions of physician practices, including diligence costs
associated with the MDLLC Acquisition in 2011.

Depreciation and amortization.Depreciation and amortization remained unchanged at $46.4 million in 2009 and 2010.
Depreciation and
amortization expense as a percentage of total revenues decreased from 8.8% in 2009 to 8.5% in 2010. An increase in capital expenditures related to our investment in advanced radiation treatment
technologies in certain local markets increased our depreciation and amortization by approximately $2.4 million, offset by a decrease of approximately $1.6 million predominately due to
the expiration of certain non-compete agreements. On March 31, 2010, we derecognized approximately $64.8 million in real estate subject to finance obligation. As a result of
the derecognition, our depreciation and amortization expense decreased by approximately $0.8 million.

Provision for doubtful accounts.The provision for doubtful accounts decreased by $4.1 million, or 31.4%, from
$12.9 million in 2009 to
$8.8 million in 2010. The provision for doubtful accounts as a percentage of total revenues decreased from 2.5% in 2009 to 1.6% in 2010. In the latter part of 2009, we made efforts to improve
the overall collection process, including a replacement of our claims clearinghouse agent, to provide more efficient and timely claims processing, upgraded certain billing

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processes,
including the electronic transmission of secondary claims and improved processes at the treatment centers to collect co-pay amounts at the time of service. These actions have
resulted in improved collections and lower bad debt expense.

Interest expense, net.Interest expense, net of interest income of approximately $0.6 million, decreased by
$4.0 million, or 6.4%, from
$62.5 million in 2009 to $58.5 million in 2010. The decrease is primarily attributable to a pay down of approximately $15 million in our senior secured revolving credit facility
during the fourth quarter of 2009, along with amortization of our senior secured term loan facility during 2010, principal payments of our capital leases and the refinancing of our debt in April 2010
by replacing the $175.0 million senior subordinated notes due March 2015 at an interest rate of 13.5% with senior subordinated notes due April 2017 at an interest rate of 9.875%. In addition,
we incurred an additional $2.1 million in interest expense associated with the pro-rata write-off of our deferred financing costs and original issue discount costs
resulting from our prepayment of $74.8 million in our Term Loan B. On March 31, 2010, we derecognized approximately $64.8 million in real estate subject to finance obligation. As
a result of the derecognition, our interest expense relating to the finance obligation decreased by approximately $4.3 million.

Loss on sale of assets of a radiation treatment center.In January 2007, we acquired a 67.5% interest in Gettysburg Radiation,
 LLC (GR), which
at that time was in the final stages of developing a free-standing radiation therapy treatment center in Gettysburg, Pennsylvania. Approximately a year later, GR expanded its operations to
a second location in Littlestown, Pennsylvania. Due to the poor local economy, as well as the opening of a radiation therapy center by a nearby hospital, the performance of both the Gettysburg and
Littlestown facilities deteriorated significantly. During the fourth quarter of 2009, the Littlestown facility was closed. On April 30, 2010, we sold certain assets of the Gettysburg facility
to one of GR's minority equity-holders for approximately $925,000 and incurred a loss on the sale of approximately $1.9 million.

Early extinguishment of debt.We incurred approximately $10.9 million from the early extinguishment of debt as a result of
the prepayment of
the $175.0 million in senior subordinated notes, which included the call premium payment of approximately $5.3 million, write-offs of $2.5 million in deferred
financing costs and $3.1 million in original issue discount costs.

Impairment loss.Impairment loss of approximately $3.5 million in 2009 primarily relating to an impairment loss incurred of
approximately
$1.8 million for the write down to fair value of certain of our linear accelerators and CT machines due to technological obsolescence. The adjustment to machine inventories was due to several
considerations, including the planned use of RapidArc technology on 3-D digital machines for which this technology can not be implemented on 2-D digital machines or analog
machines. RapidArc radiotherapy technology is an effective cancer treatment representing an advanced new form of image-guided IMRT. This technology enables clinicians to program a linear accelerator
to deliver precise forms of IMRT up to eight times faster than other IMRT systems. It does this by delivering the complete IMRT treatment to the patient in fewer rotations than traditional IMRT.
Impairment loss of approximately $97.9 million in 2010 related to our write-off of our investment in a 50% interest in an international freestanding radiation center in Mohali,
India of approximately $0.7 million, certain planned office closings in California and Michigan of approximately $3.5 million and goodwill impairment in certain of our reporting units,
including California, Southwest U.S. (Arizona and Nevada) and the Florida east coast
of approximately $91.2 million and an additional $2.5 million relating to the office closings of certain of our radiation treatment centers.

Income taxes.Our effective tax rate was 10.1% in fiscal 2010 and (14.9%) in fiscal 2009. The increase in the effective tax rate
in the 2010 calendar
year is primarily the result of goodwill impairment recognized in the 2010 calendar year which is not deductible for tax purposes, the establishment of a valuation allowance against federal and state
deferred tax assets and adjustments to deferred income tax items and unrecognized tax positions that were recorded in the 2010 calendar year.

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The
income tax benefit $12.8 million in 2010 compared to an income tax expense of $1.0 million in 2009, represents an increase of $13.8 million on an absolute dollar basis.

The
effective tax rate differed from the U.S. federal statutory rate of 35% during 2010 primarily as a result of the effect of the goodwill impairment which is not deductible for tax
purposes and the establishment of a valuation allowance against federal deferred tax assets and an increase in the valuation allowance related to state deferred tax assets.

Our
future effective tax rates could be affected by changes in the relative mix of taxable income and taxable loss jurisdictions, changes in the valuation of deferred tax assets or
liabilities, or changes in tax laws or interpretations thereof. We monitor the assumptions used in estimating the annual effective tax rate and makes adjustments, if required, throughout the year. If
actual results differ from the assumptions used in estimating our annual effective tax rates, future income tax expense (benefit) could be materially affected.

In
addition, we are periodically under audit by federal, state, or local authorities in the areas of income taxes and other taxes. These audits include questioning the timing and amount
of deductions and compliance with federal, state, and local tax laws. We regularly assess the likelihood of adverse outcomes from these audits to determine the adequacy our provision for income taxes.
To the extent that we prevail in matters for which accruals have been established or we are required to pay amounts in excess of such accruals, the effective tax rate could be materially affected. We
are currently undergoing a federal income tax audit for tax years 2005 through 2008 and New York State audit for tax years 2006 through 2008.

Net loss.Net loss increased by $106.1 million, from $7.7 million in net loss in 2009 to $113.8 million net loss
in 2010. Net
loss represents 1.5% and 20.8% of total revenues in 2009 and 2010, respectively.

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Comparison of the Years Ended December 31, 2008 and 2009

Total revenues.Total revenues increased by $27.2 million, or 5.5%, from $497.3 million in 2008 to $524.5 million
in 2009.
Approximately $49.6 million of this increase resulted from our expansion into new local markets during 2008 and 2009 through the acquisition of six new treatment centers and the opening of 16
new de novo centers and the addition of one hospital-based/other group arrangements as follows:

Date

Sites

Location

Market

TypeJanuary 2008


1

East Naples, Florida

Collier CountyFlorida

De Novo*March 2008


1

Fort Apache, Nevada

Las Vegas

De NovoApril 2008


1

Jacksonville, Florida

Northeast Florida

De NovoApril 2008


1

Collier County, Florida

Collier CountyFlorida

AcquisitionJune 2008


3

Sun City and Phoenix, Arizona

Central Arizona

AcquisitionJuly 2008


1

Fairlea, West Virginia

Central Maryland

AcquisitionSeptember 2008


1

Scottsdale, Arizona

Central Arizona

De NovoOctober 2008


1

Peoria, Arizona

Central Arizona

De Novo*October 2008


1

Mt. Shasta, California

Northern California

AcquisitionOctober 2008


1

Mohali, India

International

De NovoNovember 2008


1

Lakewood Ranch, Florida

Sarasota/Manatee CountiesFlorida

De NovoDecember 2008


1

Rancho Mirage, California

Palm Springs, California

De NovoNovember 2008


1

Corona, California

Los Angeles, California

De NovoDecember 2008


1

Fort Myers, Florida

Lee CountyFlorida

Hospital-Based/Other GroupJanuary 2009


1

Hammonton, New Jersey

South New Jersey

De NovoJanuary 2009


1

Indio, California

Palm Springs, California

De NovoJanuary 2009


1

Bronx, New York

Westchester/BronxNew York

Transition to FreestandingMay 2009


1

Fort Myers, Florida

Lee CountyFlorida

De NovoJune 2009


1

Southbridge, Massachusetts

Central Massachusetts

De NovoJune 2009


1

Gilbert, Arizona

Central Arizona

De NovoJuly 2009


1

Providence, Rhode Island

Rhode Island

De NovoOctober 2009


1

Yucca Valley, California

Palm Springs, California

De Novo


*We
no longer operate at these locations.


The aforementioned $49.6 million increase in revenues was offset by an approximate $22.4 million revenue decrease that was due to
the 5.3% decrease in the conversion factor in 2009.

Salaries and benefits.Salaries and benefits increased by $11.2 million, or 4.5%, from $248.4 million in 2008 to
$259.5 million
in 2009. Salaries and benefits as a percentage of total revenues decreased from 49.9% in 2008 to 49.5% in 2009. Additional staffing of personnel and physicians due to our expansion and acquisitions of
treatment centers into new local markets during the latter part of 2008 and 2009 contributed to a $13.8 million increase in salaries and benefits. Within our existing local markets, salaries
and benefits decreased $2.6 million primarily due to the decrease in stock compensation expense in 2009 as a result of the acceleration of restricted stock due to the Merger in February 2008.

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Medical supplies.Medical supplies increased by $9.9 million, or 27.9%, from $35.5 million in 2008 to
$45.4 million in 2009.
Medical supplies as a percentage of total revenues increased from 7.1% in 2008 to 8.6% in 2009. The increase in medical supplies was primarily due to the increased utilization of pharmaceuticals used
in connection with the delivery of radiation therapy treatments, pharmaceuticals used in urology services, and chemotherapy medical supplies from new markets and services entered into in 2008 and
2009. These pharmaceuticals and chemotherapy medical supplies are principally reimbursable by third-party payers.

Facility rent expenses.Facility rent expenses increased by $6.1 million, or 37.7%, from $16.1 million in 2008 to
$22.1 million
in 2009. Facility rent expenses as a percentage of total revenues increased from 3.2% in 2008 to 4.2% in 2009. Facility rent expenses consist of rent expense associated with our treatment center
locations. Approximately $3.3 million of the increase related to the expansion into new local markets and approximately $2.7 million of the increase due to additional rent as a result of
a sale leaseback transaction in September of 2008 in which we sold for approximately $40.4 million and leased-back 12 properties located in Florida, Maryland and Michigan and
$0.1 million increase in our existing local markets.

Other operating expenses.Other operating expenses increased by $4.3 million, or 21.2%, from $20.1 million in 2008 to
$24.4 million in 2009. Other operating expenses as a percentage of total revenues increased from 4.0% in 2008 to 4.7% in 2009. Other operating expenses consist of repairs and maintenance of
equipment, equipment rental and contract labor. Approximately $2.4 million of the increase was related to the expansion into new local markets and $1.9 million increase in our remaining
existing local markets, primarily attributable to an increase in the number of service contracts for maintenance of our advanced treatment technologies.

General and administrative expenses.General and administrative expenses decreased by $9.2 million, or 14.4%, from
$63.7 million in
2008 to $54.5 million in 2009. General and administrative expenses principally consist of professional service fees, office supplies and expenses, insurance and travel costs. General and
administrative expenses as a percentage of total revenues decreased from 12.8% in 2008 to 10.4% in 2009. The decrease of $9.2 million was due to the costs incurred in 2008 relating to the
Merger, in which we incurred approximately $11.8 million in fees and expenses. Excluding the $11.8 million in merger related expenses in 2008, approximately $2.4 million in
general and administrative expenses was due to an increase for the change in accounting relating to the capitalization of professional fees relating to acquisitions of a business as these fees
effective January 1, 2009 are expensed.

Depreciation and amortization.Depreciation and amortization increased by $8.4 million, or 22.3%, from $38.0 million
in 2008 to
$46.4 million in 2009. Depreciation and amortization expense as a percentage of total revenues increased from 7.6% in 2008 to 8.8% in 2009. Approximately $3.9 million of the increase was
attributable to the expansion of new radiation treatment centers into new and existing local markets. The remaining portion of the increase was attributable from the purchase accounting as a result of
the Merger in February 2008.

Provision for doubtful accounts.Provision for doubtful accounts decreased by $8.8 million, or 40.6%, from
$21.7 million in 2008 to
$12.9 million in 2009. Provision for doubtful accounts as a percentage of total revenues decreased from 4.4% in 2008 to 2.5% in 2009. In 2008, as a result of the economic downturn in the
economy, we reassessed our allowances on both commercial and self-pay balances and determined that additional allowances were warranted.

Interest expense, net.Interest expense, net increased by $2.7 million, or 4.5%, from $59.8 million in 2008 to
$62.5 million in,
2009. Interest expense as a percentage of total revenues decreased from 12.0% in 2008 to 11.9% in 2009. Included in interest expense, net is an insignificant amount of interest income. The increase is
primarily attributable to increased borrowings under our senior secured credit

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facility
for our expansion into new markets during 2008 and 2009 and borrowings under capital lease financing arrangements of approximately $9.7 million for our investment in advanced radiation
treatment technologies in certain local markets throughout 2008 and 2009.

Gain on sale of interest in a radiation practice.In October 2008, we contributed a radiation treatment center located in
Northern California to a
joint venture with a hospital. The hospital contributed the assets of the hospital radiation department and the assets of a radiation facility on its hospital campus to the joint venture. As a result
of the contribution, we recognized a gain of approximately $3.1 million for the sale of a portion of the interest in our radiation treatment center. We maintain a 57.3% ownership interest in
the joint venture and the results of the operations of the joint venture are included in our consolidated financial statements.

Termination of professional services agreement.In March 2008, we terminated a professional services agreement with a practice
in central Arizona,
which maintained exclusive rights to expand into the market. We paid approximately $7.0 million for the buy-out, which provided us with the ability to further expand into the
central Arizona market, with the purchase of three radiation treatment centers located in Sun City and Phoenix, Arizona.

Loss on sale of real estate.In September 2008, we entered into a sale-leaseback transaction with a third party. We sold 12 real
estate
properties located in Florida, Maryland and Michigan for approximately $40.4 million. We incurred a loss of approximately $1.0 million and deferred a gain of approximately
$1.3 million on the sale of the real estate. We subsequently leased back the properties from the third party with terms of 20 years and four separate renewal option terms for
5 years each.

Early extinguishment of debt.In connection with the Merger in February 2008, we incurred expenses of approximately
$3.7 million for early
extinguishment of debt relating to the termination of certain capital
lease obligations, termination of our interest rate swap agreement and the write-off of deferred financings costs relating to the extinguishment of the previous senior secured credit
facility.

Impairment loss.Impairment loss of approximately $3.5 million primarily relating to an impairment loss incurred of
approximately
$1.8 million for the write down to fair value of certain of our liner accelerators and CT machines due to technological obsolescence. The adjustment to machine inventories was due to several
considerations, including the planned use of RapidArc technology on 3-D digital machines for which this technology can not be implemented on 2-D digital machines or analog
machines. RapidArc radiotherapy technology is an effective cancer treatment representing an advanced new form of image-guided IMRT. This technology enables clinicians to program a linear accelerator
to deliver precise forms of IMRT up to eight times faster than other IMRT systems. It does this by delivering the complete IMRT treatment to the patient in fewer rotations than traditional IMRT.

Net loss.Net loss decreased by $6.0 million, or 43.7%, from $13.7 million loss in 2008 to $7.7 million loss in
2009. Net loss
represents 2.8% and 1.5% of total revenues in 2008 and 2009, respectively.

Liquidity and Capital Resources

Our principal capital requirements are for working capital, acquisitions, medical equipment replacement and expansion and de novo
treatment center development. Working capital and medical equipment are funded through cash from operations, supplemented, as needed, by five-year fixed rate lease lines of credit.
Borrowings under these lease lines of credit are recorded on our balance sheets. The construction of de novo treatment centers is generally funded directly by related party lessors and then leased to
us. We finance our operations, capital expenditures and acquisitions through a combination of borrowings and cash generated from operations.

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Cash Flows From Operating Activities

Net cash provided by operating activities for the years ended December 31, 2008, 2009 and 2010 was $64.2 million,
$71.4 million and $49.0 million, respectively.

Net
cash provided by operating activities decreased by $22.4 million from $71.4 million in 2009 to $49.0 million in 2010. The decrease in cash was predominately due
to the refinancing in April 2010, whereby we paid cash from operations, accrued and unpaid interest of approximately $14.9 million on the senior subordinated notes due April 2017 in October
2010. With respect to our prior senior subordinated notes due in 2015 accrued and unpaid interest was paid semi-annually on January 15th and
July 15th of each year. In addition, we received approximately $10.8 million in tax refunds in 2009 compared to payments of approximately $0.4 million in
2010.

Net
cash provided by operating activities increased by $7.2 million from $64.2 million in 2008 to $71.4 million in 2009. The increase of $7.2 million was
affected by income tax payments made in 2008 of approximately $3.1 million, as compared to tax refunds of approximately $10.8 million made in 2009. Accounts receivable decreased by
$9.1 million from 2008 to 2009 as a result of additional cash collections in 2009 as compared to 2008.

Cash Flows From Investing Activities

Net cash used in investing activities for 2008, 2009, and 2010 was $88.4 million, $54.2 million, and
$92.5 million, respectively.

Net
cash used in investing activities increased by $38.3 million from $54.2 million in 2009 to $92.5 million in 2010. Net cash used in investing activities was
impacted by approximately $10.4 million related to the purchase of (i) a 33% interest in MDLLC, a joint venture that holds a majority equity interest in and manages 26 radiation therapy
treatment centers in South America and Central America and (ii) a 19% interest in a joint venture that operates a treatment center in Guatemala, both of which occurred in January 2009. In May
2010 we purchased a radiation treatment center and several physician practices in South Carolina for a combined purchase price of approximately $34.5 million, in cash, and purchased a radiation
treatment center in Princeton West Virginia in December 2010 for approximately $8.0 million, in cash. In December 2010, we contributed an initial $1.0 million for a 28.5% interest in a
proton beam therapy joint venture with a consortium of five leading New York academic medical centers to be constructed in Manhattan.

Net
cash used in investing activities decreased by $34.2 million from $88.4 million in 2008 to $54.2 million in 2009. Net cash used in investing activities was
impacted by approximately $2.4 million from the acquisitions of radiation center assets during 2009 as compared to approximately $71.7 million of acquisitions in 2008. In 2009 we spent
approximately $16.0 million in purchases and contribution of capital to joint venture entities. Of the total $16.0 million spent, approximately $10.4 million related to the
purchase of a 33% interest in a joint venture that holds a majority equity interest in and manages 25 radiation therapy treatment centers in South America, Central America and the Caribbean and a 19%
interest in a joint venture which operates a treatment center in Guatemala.

Historically,
our capital expenditures have been primarily for equipment, leasehold improvements and information technology equipment. Total capital expenditures, inclusive of amounts
financed through capital lease arrangements and exclusive of the purchase of radiation treatment centers, were $48.7 million, $37.5 million and $43.8 million in 2008, 2009 and
2010, respectively. Historically, we have funded our capital expenditures with cash flows from operations, borrowings under our senior secured credit facilities and borrowings under lease lines of
credit.

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Cash Flows From Financing Activities

Net cash provided by financing activities for 2008 was $63.1 million. Net cash used in financing activities for 2009 was
$33.4 million and net cash provided by financing activities for 2010 was $24.5 million.

Net
cash provided by financing activities in 2010 included $308.1 million of proceeds received from the issuance of $310.0 million in aggregate principal amount of senior
subordinated notes due 2017. The $308.1 million in proceeds was used to repay the existing $175.0 million in senior subordinated notes due 2015, including accrued and unpaid interest and
a call premium of approximately $5.3 million. The remaining proceeds from the offering were used to pay down $74.8 million of the senior secured term loan facility and
$10.0 million of the senior secured revolving credit facility and to finance the acquisitions of a radiation treatment center and physician practices in South Carolina, which were consummated
on May 3, 2010. In addition, we paid approximately $11.9 million of loan costs relating to transaction fees and expenses incurred in connection with the issuance of the
$310.0 million senior subordinated notes. We borrowed approximately $8.5 million in December 2010 for the purchase of a radiation treatment center in Princeton West Virginia. Further, we
paid approximately $0.9 million in fees and expenses related to our S-4 registration statement filing for the Existing Notes. The change in net cash provided by financing activities
included cash provided by non-controlling interest holders in the El Segundo joint venture who contributed
approximately $0.6 million in cash for a 22.75% interest in the joint venture. We also had partnership distributions from non-controlling interests of approximately
$3.2 million in 2010.

Net
cash used in financing activities for 2009 was approximately $33.4 million. Of the cash used in financing, approximately $29.7 million related to principal repayments
of debt, including $3.5 million on our senior secured term loan facility, $15.0 million on our senior secured revolving credit facility and approximately $11.2 million for capital
lease obligations. In addition we had partnership distributions from non-controlling interests of approximately $2.9 million in 2009.

Net
cash provided by financing activities for 2008 was approximately $63.1 million. In 2008, in connection with the Merger, we terminated all commitments under the previous senior
credit facility, repaid all outstanding borrowings under the previous senior credit facility and paid any accrued and unpaid interest. In connection with the Merger, we entered into our current senior
secured credit facilities, which consist of a senior secured term loan facility and a senior secured revolving credit facility. At the Closing, we borrowed $307.0 million under the senior
secured term loan facility, utilized $3.1 million of the senior secured revolving credit facility and obtained a $175.0 million senior subordinated interim loan agreement. On
March 25, 2008, we issued $175.0 million senior subordinated notes due 2015 at an annual interest rate of 13.5%, and repaid the $175.0 million senior subordinated interim loan
agreement including any accrued and unpaid interest. During 2008, we utilized the $40.0 million delayed draw term loan for certain acquisitions and general corporate purposes.

Senior Secured Credit Facilities and Senior Subordinated Notes

In connection with the Merger, we entered into our current senior secured credit facilities, which consist of a senior secured term
loan facility and a senior secured revolving credit facility. At the Closing, we borrowed $307.0 million under the senior secured term loan facility, utilized $3.1 million of the senior
secured revolving credit facility and obtained a $175.0 million senior subordinated interim loan agreement. We incurred expenses of approximately $3.7 million for early extinguishment of
debt relating to the termination of certain capital lease obligations, termination of our interest rate swap agreement and the write-off of deferred financings costs relating to the
extinguishment of our previous senior secured credit facility. On March 25, 2008, we issued $175.0 million senior subordinated notes due 2015 at an annual interest rate of 13.5%, and
repaid the $175.0 million senior subordinated interim loan agreement including any accrued and unpaid interest.

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On
April 1, 2010, we amended our senior secured credit facilities to, among other things, (i) under certain circumstances, allow us to issue permitted additional
subordinated debt to fund certain future acquisitions; (ii) disregard, for purposes of calculating compliance with the financial covenants, certain provisions of GAAP that would require us to
treat leased properties as owned by us; and (iii) provide for certain other modifications to permit the incurrence of additional indebtedness in connection with certain future acquisitions and
the ability to make additional investments, subject to pro forma compliance with certain performance based incurrence covenants, and other restrictions. At December 31, 2010, we were in
compliance with all covenants.

On
April 20, 2010, we sold $310.0 million of the Existing Notes, and repaid our prior $175.0 million in aggregate principal amount 13.5% senior subordinated notes
due 2015, including accrued and unpaid interest of approximately $6.4 million and the call premium of approximately $5.3 million. The remaining proceeds from the sale of the Existing
Notes were used to pay down $74.8 million of the senior secured term loan facility and $10.0 million of the senior secured revolving credit facility. A portion of the proceeds of the
Existing Notes offering was placed in a restricted account pending application to finance certain acquisitions, including the acquisitions of a radiation treatment center and physician practices in
South Carolina, which were consummated on May 3, 2010. We incurred approximately $11.9 million in transaction fees and expenses, including legal, accounting and other fees and expenses
in connection with the Existing Notes offering, including the initial purchasers' discount of $1.9 million.

We
incurred approximately $10.9 million in early extinguishment of debt as a result of the prepayment of the $175.0 million in senior subordinated notes, which included the
call premium payment of approximately $5.3 million, the write-offs of $2.5 million in deferred financing costs and $3.1 million in original issue discount costs.

On
April 22, 2010, affiliates of certain of the initial purchasers of the Existing Notes, as lenders under our senior secured revolving credit facility, provided an additional
$15.0 million of commitments to the senior secured revolving credit facility and increased the available commitment from $60.0 million to $75.0 million. We paid
$2.0 million to Vestar Capital Partners V, L.P. for additional transaction advisory services in respect to the incremental amendments to our senior secured revolving credit facility, the
additional $15.0 million of commitments to the revolver portion, and the complete refinancing of the senior subordinated notes. As of December 31, 2010, we had approximately
$66.0 million available for borrowing under our senior secured revolving credit facility.

On
May 3, 2010, we entered into Amendment No. 3 to our Senior Credit Facility, dated February 21, 2008 (as amended by Amendment No. 1, dated August 15,
2008, Amendment No. 2, dated April 1, 2010, Amendment No. 3, dated May 3, 2010, and as otherwise amended from time to time, the "Credit Agreement"), by and among RTS,
Parent, the subsidiaries of RTs. identified therein as the guarantors, the institutions from time to time party thereto as lenders, Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National
Association), in its capacity as administrative agent for the lenders thereto and the other agents and arrangers named therein, pursuant to which we revised certain administrative matters, including
to permit us to provide to the lenders thereunder the consolidated financial statements of Parent in lieu of those of the borrower, RTS.

Our
Senior Secured Credit Facility:



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The
revolving credit facility requires that we comply with certain financial covenants, including:

Requirement

Level at
December 31, 2010Maximum permitted consolidated leverage ratio


<5.25 to 1.00


4.96 to 1.00Minimum permitted consolidated interest coverage ratio


>1.90 to 1.00


2.34 to 1.00


The
maximum permitted consolidated leverage ratio required is <5.25 to 1.00 through June 30, 2011, <5.00 to 1.00 from July 1, 2011 through
June 30, 2012, <4.75 to 1.00 from July 1, 2012 to December 31, 2012 and <4.50 to 1.00 thereafter.

The
revolving credit facility also requires that we comply with various other covenants, including, but not limited to, restrictions on new indebtedness, asset sales, capital
expenditures, acquisitions and dividends, with which we were in compliance as of December 31, 2010.

We
believe available borrowings under our senior secured credit facilities, together with our cash flows from operations, will be sufficient to fund our currently anticipated operating
requirements. To the extent available borrowings and cash flows from operations are insufficient to fund future requirements, we may be required to seek additional financing through additional
increases in our senior secured credit facilities, negotiate additional 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 extend or increase our senior secured credit facilities, secure additional bank borrowings or lease line of credit or
complete additional debt or equity financings on terms favorable to us or at all. Our ability to meet our funding needs could be adversely affected if we experience a decline in our results of
operations, or if we violate the covenants and other restrictions to which we are subject under our senior secured credit facilities.

Finance Obligation

We lease certain of our treatment centers (each, a "facility" and, collectively, the "facilities") and other properties from
partnerships that are majority-owned by related parties (each, a "related party lessor" and, collectively, the "related party lessors"). See "Item 13. Certain Relationships and Related
Transactions, and Director Independence." The related party lessors construct the facilities in accordance with our plans and specifications and subsequently lease these facilities to us. Due to the
related party relationship, we are considered the owner of these facilities during the construction period pursuant to the provisions of ASC 840-40, "Sale-Leaseback
Transactions" ("ASC 840-40"). In accordance with ASC 840-40, we record a construction in progress asset for these facilities with an offsetting finance obligation during the
construction period. These related parties guarantee the debt of the related party lessors, which is considered to be "continuing involvement" pursuant to ASC 840-40. Accordingly, these
leases did not qualify as a normal sale-leaseback at the time that construction was completed and these facilities were leased to us. As a result, the costs to construct the facilities and
the related finance obligation were recorded on our consolidated balance sheets after construction was completed. The construction costs were included in "Real Estate Subject to Finance Obligation" in
the

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condensed
consolidated balance sheets and the accompanying notes, included in this Annual Report on Form 10-K. The finance obligation were amortized over the lease term based on the
payments designated in the lease agreements. The amount of these finance obligations as of December 31, 2009 was $77.2 million.

As
of March 31, 2010, the related party lessors completed the refinancing of certain of their respective mortgages to remove the personal guarantees of the debt related thereto.
As a result, we derecognized approximately $64.8 million in real estate subject to finance obligation, $67.7 million in finance obligation and recorded approximately $2.9 million
of deferred gains that will be amortized as a reduction of rent expense over 15 years. In addition, we entered into a new master lease arrangement with the landlord on 28 properties. The
initial term of the master lease is 15 years with four 5 year renewal options. Annual payments, including executory costs, total approximately $13.4 million pursuant to the master
lease. The lease payments are scheduled to increase annually based on increases in the consumer price index. The amount of these finance obligations as of December 31, 2010 was
$8.6 million.

Billing and Collections

Our billing system utilizes a fee schedule for billing patients, third party payers and government sponsored programs, including
Medicare and Medicaid. Fees billed to
government sponsored programs, including Medicare and Medicaid, and fees billed to self pay patients (not covered under other third party payer arrangements) are automatically adjusted to the
allowable payment amount at time of billing. In 2009, we updated our billing system to include fee schedules on approximately 85% of all payers and developed a blended rate allowable amount on the
remaining payers. As a result of this change in 2009, fees billed to all payers are automatically adjusted to the allowable payment at time of billing.

Insurance
information is requested from all patients either at the time the first appointment is scheduled or at the time of service. A copy of the insurance card is scanned into our
system at the time of service so that it is readily available to staff during the collection process. Patient demographic information is collected for both our clinical and billing systems.

It
is our policy to collect co-payments from the patient at the time of service. Insurance information is obtained and the patient is informed of their co-payment
responsibility prior to the commencement of treatment.

Charges
are posted to the billing system by certified coders in our offices or in our central billing office. After charges are posted, edits are performed, any necessary corrections are
made and billing forms are generated, then sent electronically to our clearinghouse. Any bills not able to be processed through the clearinghouse are printed and mailed from our central billing
office. Statements are automatically generated from our billing system and mailed to the patient on a regular basis for any amounts still outstanding. Daily, weekly and monthly accounts receivable
analysis reports are utilized by staff and management to prioritize accounts for collection purposes, as well as to identify trends and issues. Strategies to respond proactively to these issues are
developed at weekly and monthly team meetings. Our write-off process is manual and our process for collecting accounts receivable is dependent on the type of payer as set forth below.

Medicare, Medicaid and Commercial Payer Balances

Our central billing office staff expedites the payment process from insurance companies and other payers via electronic inquiries,
phone calls and automated letters to ensure timely payment. Our billing system generates standard aging reports by date of billing in increments of 30 day intervals. The collection team
utilizes these reports to assess and determine the payers requiring additional focus and collection efforts. Our accounts receivable exposure on Medicare, Medicaid and commercial payer

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balances
are largely limited to denials and other unusual adjustments. Our exposure to bad debts on balances relating to these types of payers over the years has been insignificant.

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

Self-Pay Balances

We administer self-pay account balances through our central billing office and our policy is to first attempt to collect
these balances although after initial attempts we often send outstanding self-pay patient claims to collection agencies at designated points in the collection process. In some cases
monthly payment arrangements are made with patients for the account balance remaining after insurance payments have been applied. These accounts are reviewed monthly to ensure payments continue to be
made in a timely manner. Once it has been determined by our staff that the patient is not responding to our collection attempts, a final notice is mailed. This generally occurs more than
120 days after the date of the original bill. If there is no response to our final notice, after 30 days the account is assigned to a collection agency and, as appropriate, recorded as a
bad debt and written off. Balances under $50 are written off but not sent to the collection agency. All accounts are specifically identified for write-offs and accounts are written off
prior to being submitted to the collection agency.

Acquisitions and Developments

The following table summarizes our growth in treatment centers and the local markets in which we operate for the periods indicated:

Year Ended
December 31,2008

2009

2010Treatment centers at beginning of period


85


97


97Internally developed(1)


7


7


2Transitioned to freestanding





1


Internally (consolidated/closed/sold)


(1
)

(5
)

(5
)Acquired


6





2Hospital-based/other groups


1





(1
)Hospital-based (ended/transitioned)


(1
)

(3
)

Treatment centers at period end


97


97


95Number of regions at period end


6


8


8Number of local markets at period end


28


28


28


(1)In
2008, two freestanding treatment centers that were previously acquired were transferred to new internally developed centers.


In
2008, we internally developed seven new radiation centers, acquired six new radiation treatment centers, added one hospital-based/other group arrangement, ended one hospital-based
arrangement, and acquired the assets of several urology and medical oncology practices as follows:

In
January 2008, we opened our East Naples, Florida treatment center and began treating patients at the facility.

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In
March 2008, we transitioned our acquired Vegas Valley, Nevada center to a new internally developed center in Fort Apache, Nevada.

In
April 2008, we opened our Jacksonville, Florida treatment center and began treating patients at the facility.

In
April 2008, we acquired the assets of a radiation treatment center located in southwest Florida for approximately $25.1 million. The center purchased in southwest Florida will
further expand our presence in the market.

In
June 2008, we acquired the assets of three radiation treatment centers located in Sun City and Phoenix, Arizona for approximately $23.4. The centers purchased in Arizona further
expands our presence into the Central Arizona market. In addition to the $23.4 million, the purchase price arrangement included a $2.3 million deferred purchase price contingent on
reaching a certain level of business volume. In September 2009, the centers achieved the level of business volume and the $2.3 million was paid from restricted cash and recorded as additional
goodwill.

In
July 2008, we acquired the assets of a radiation treatment center located in Fairlea, West Virginia for approximately $17.7 million. The center purchased in West Virginia
further expands our presence into the West Virginia market. In addition to the $17.7 million, the purchase price arrangement included a $2.0 million deferred purchase price contingent on
the transfer of the certificate of need license. The certificate of need license was transferred in January 2009 and the funds including interest totaling approximately $2.0 million were paid.

In
August 2008, we transitioned our acquired Scottsdale, Arizona center to a new internally developed center also in Scottsdale, Arizona.

In
October 2008, we contributed a radiation treatment center located in Northern California to a joint venture with a hospital. The hospital contributed the assets of the freestanding
radiation center in Mt. Shasta, on its hospital campus to the joint venture. We maintain a 57.3% ownership interest in the joint venture and the results of the operations of the joint venture are
included in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

In
October 2008, we opened our Peoria, Arizona treatment center and began treating patients at the facility.

In
October 2008, we opened our Mohali, India treatment center and began treating patients at the facility. We own approximately 50% of the facility through a joint venture partnership.

In
November 2008, we opened for business our Lakewood Ranch, Florida treatment center and began treating patients at the facility.

In
December 2008, we opened for business our Rancho Mirage, California treatment center and began treating patients at the facility.

During
the fourth quarter of 2008, we terminated a professional services arrangement with North Oakland Medical Center in Michigan due to declining business activity with the medical
center. We entered into a contractual arrangement to provide radiation therapy treatment to patients with a medical group in Corona, California and provide professional services to a dermatology group
in Lee County, Florida. We also closed an office in Vegas Buffalo, Nevada to consolidate and treat the patients at other office locations within the market.

During
2008, we acquired the assets of several urology and medical oncology practices in Florida for approximately $1.9 million. The urology and medical oncology practices provide
synergistic clinical services to our patients in the respective markets in which we treat.

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In
2009, we internally developed seven new radiation centers, transitioned a hospital based arrangement to a freestanding radiation center, consolidated five radiation centers, ended two
hospital-based arrangements and acquired the assets of several physician practices as follows:

In
January 2009, we purchased a 33% interest in MDLLC, a joint venture affiliated with the brother and father of Dr. Dosoretz, our Chief Executive Officer, President and a
director on the Company's board of directors, that holds a majority equity interest in, and manages, 26 radiation therapy treatment centers through 16 legal entities in South America, Central America
and the Caribbean (which translates into us owning a 19% indirect ownership interest in the underlying radiation therapy
treatment centers), and a 19% interest in a joint venture that operates a treatment center in Guatemala for an aggregate of approximately $10.4 million, subject to final determination of the
purchase price based on a multiple of historical earnings before interest, taxes and depreciation and amortization. In January 2010, we finalized the amount due for our 33% interest in the joint
venture and paid an additional $1.9 million. The transaction is accounted for under the equity method. We also have a four-year call option to purchase the remaining 67% in the
MDLLC joint venture in which we purchased a 33% interest, which would result in an ownership interest of approximately 90% in the underlying radiation oncology business located in South America,
Central America and the Caribbean, at a price based on a multiple of historical earnings before interest, taxes and depreciation and amortization. See "Item 13. Certain Relationships and
Related Transactions, and Director Independence."

In
January 2009, we opened our Hammonton, New Jersey and Indio, California treatment centers and began treating patients at the facilities and converted a hospital based arrangement to a
freestanding facility in Bronx-Lebanon, New York.

In
May 2009, we opened a cancer center in Lee County, Florida.

In
June 2009, we opened two additional radiation treatment centers, one in Southbridge, Massachusetts and another treatment center in Gilbert, Arizona.

In
July 2009, we opened a radiation treatment center in Providence, Rhode Island in partnership with a hospital to provide stereotactic radio-surgery through the use of a cyberknife. We
own approximately 45% of the joint venture.

In
October 2009, we opened our Yucca Valley, California treatment center.

During
2009, we acquired the assets of several physician practices in Florida for approximately $0.2 million. The physician practices provide synergistic clinical services to our
patients in the respective markets in which we treat.

During
the fourth quarter of 2009, we closed five offices including two centers in Florida, one in Pennsylvania, one in Arizona and one in Nevada. We closed these offices to consolidate
the number of offices within the market in order to leverage adjacent centers and/or due to excess capacity. The patients treated at these offices will be treated within the same market at other
existing radiation treatment centers.

In
2009, we terminated two professional service agreements, one in Florida in January 2009 and one in New Jersey in June 2009.

In
2010, we internally developed two new radiation centers, sold one radiation center, closed four radiation centers, acquired two radiation centers, consolidated a hospital-based
radiation center and acquired the assets of several physician practices as follows:

In
March 2010, we contributed approximately $3.0 million in tangible assets for a 77.3% interest in a joint venture with a group of physicians to open a radiation treatment center
in El Segundo, California. The radiation treatment center expands our presence into the California market.

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On April 30, 2010, we sold certain assets of the Gettysburg facility to one of Gettysburg Radiation, LLC's minority equityholders for approximately
$925,000. Due to the poor local economy, as well as the opening of a radiation therapy center by a nearby hospital, the performance of the Gettysburg facility deteriorated significantly.

In
April 2010, we entered into definitive agreements with Carolina Regional Cancer Center, P.A. for the acquisition of a radiation treatment center in Myrtle Beach, South Carolina that
holds three certificate of need licenses, and Atlantic Urology Clinics, LLC, Adult & Pediatric Urology Center of the Carolina, P.A., Coastal Urology Center, P.A. and Grand Strand
Urology, LLP with respect to the acquisition of the assets of these Myrtle Beach-based physician practices. On May 3, 2010, we consummated these acquisitions for a combined purchase
price of approximately $34.5 million in cash. The acquisition of the Myrtle Beach facility expands our presence into a new local market within an existing regional division.

In
May 2010, we opened our Pembroke Pines, Florida treatment center.

During
the fourth quarter of 2010, we closed and consolidated two radiation centers in Michigan and two radiation centers in Nevada and consolidated a hospital-based radiation center in
Utica, New York.

In
December 2010, we acquired the assets of a radiation treatment center located in Princeton, West Virginia for approximately $8.0 million. The center purchased in West Virginia
further expands our presence into the West Virginia market.

During
2010, we acquired the assets of several physician practices in Florida and Arizona for approximately $860,000. The physician practices provide synergistic clinical services to our
patients in the respective markets in which we treat.

The
operations of the foregoing acquisitions have been included in the accompanying consolidated statements of operations and comprehensive (loss) 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 fair values.

As
of December 31, 2010, we have one replacement de novo radiation treatment center project in process and have completed the construction of three radiation treatment centers of
which one is a replacement throughout 2010. The internal development of radiation treatment centers is subject to a number of risks including but not limited to risks related to negotiating and
finalizing agreements, construction delays, unexpected costs, obtaining required regulatory permits, licenses and approvals and the availability of qualified healthcare and administrative
professionals and personnel. As such, we cannot assure you that we will be able to successfully develop radiation treatment centers in accordance with our current plans and any failure or material
delay in successfully completing planned internally developed treatment centers could harm our business and impair our future growth.

We
have been selected by a consortium of leading New York academic medical centers (including Memorial Sloan Kettering Cancer Center, Beth Israel Medical Center/Continuum Health System,
NYU Langone Medical Center, Mt. Sinai Medical Center, and Montefiore Medical Center) to serve as the developer and manager of a proton beam therapy center to be constructed in Manhattan. The
project is in the final stages of certificate of need approval. We expect to invest approximately $10,000,000 in the project and will have an approximate 28.5% ownership interest. We will also receive
a management fee of 5% of collected revenues. In connection with our role as manager, we have accounted for our interest in the center as an equity method investment. The center is expected to
commence operations in mid-2014. The project has been the subject to litigation. See "Item 3. Legal Proceedings."

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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, revenues and expenses, and related disclosures of contingent assets and liabilities. We continuously evaluate our critical accounting policies
and estimates. 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.

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.

Variable Interest Entities

We evaluate certain of our radiation oncology practices in order to determine if they are variable interest entities ("VIE"). This
evaluation resulted in determining that certain of our radiation oncology practices were potential variable interests. For each of these practices, we have determined (1) the sufficiency of the
fair value of the entities' equity investments at risk to absorb losses, (2) that, as a group, the holders of the equity investments at risk have (a) the direct or indirect ability
through voting rights to make decisions about the entities' significant activities, (b) the obligation to absorb the expected losses of the entity and their obligations are not protected
directly or indirectly, and (c) the right to receive the expected residual return of the entity, and (3) substantially all of the entities' activities do not involve or are not conducted
on behalf of an investor that has disproportionately fewer voting rights in terms of its obligation to absorb the expected losses or its right to receive expected residual returns of the entity, or
both. ASC 810, "Consolidation" ("ASC 810"), requires a company to consolidate VIEs if the company is the primary beneficiary of the activities of those entities. Certain of our radiation oncology
practices are variable interest entities and we have a variable interest in certain of these practices through our administrative services agreements. Pursuant to ASC 810, through our variable
interests in these practices, we have the power to direct the activities of these practices that most significantly impact the entity's economic performance and we would absorb a majority of the
expected losses of these practices should they occur. Based on these determinations, we have included these radiation oncology practices in our consolidated financial statements for all periods
presented. All significant intercompany accounts and transactions have been eliminated.

We
adopted updated accounting guidance beginning with the first quarter of 2010, by providing an ongoing qualitative rather than quantitative assessment of our ability to direct the
activities of a variable interest entity that most significantly impact the entity's economic performance and our rights or obligations to receive benefits or absorb losses, in order to determine
whether those entities will be required to be consolidated in our consolidated financial statements. The adoption of the new guidance had no material impact to our financial position and results of
operations.

Net Patient Service Revenue and Allowances for Contractual Discounts

We have agreements with third-party payers that provide us payments at amounts different from our established rates. Net patient
service revenue is reported at the estimated net realizable amounts due from patients, third-party payers and others for services rendered. Net patient service revenue is recognized as services are
provided. Medicare and other governmental programs reimburse physicians

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based
on fee schedules, which are determined by the related government agency. We also have agreements with managed care organizations to provide physician services based on negotiated fee schedules.
Accordingly, the revenues reported in our consolidated financial statements are recorded at the amount that is expected to be received.

We
derive a significant portion of our revenues from Medicare, Medicaid and other payers 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 payer class basis given our 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 revenues reported in our consolidated statements of operations and comprehensive (loss)
income. If our overall estimated allowance for contractual discounts on our revenues for the year ended December 31, 2010 were changed by 1%, our after-tax loss from continuing
operations would change by approximately $0.2 million. This is only one example of reasonably possible sensitivity scenarios. A significant increase in our estimate of contractual discounts for
all payers would lower our earnings. This would adversely affect our results of operations, financial condition, liquidity and future access to capital.

During
the years ended 2008, 2009 and 2010, approximately 47%, 44% and 48%, respectively, of net patient service revenue related to services rendered under the Medicare and Medicaid
programs. In the
ordinary course of business, we are potentially subject to a review by regulatory agencies concerning the accuracy of billings and sufficiency of supporting documentation of procedures performed. Laws
and regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation. As a result, there is at least a reasonable possibility that estimates will change by
a material amount in the near term.

Accounts Receivable and Allowances for Doubtful Accounts

Accounts receivable are reported net of estimated allowances for doubtful accounts and contractual adjustments. Accounts receivable are
uncollateralized and primarily consist of amounts due from third-party payers 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 payers that provide payments for our services. We do not believe that there are any other significant concentrations of receivables
from any particular payer 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. The primary tool used in our assessment is an annual, detailed review of historical collections and write-offs of accounts
receivable as they relate to aged accounts receivable balances. The results of our detailed review of historical collections and write-offs, adjusted for changes in trends and conditions,
are used to evaluate the allowance amount for the current period. If the actual bad debt allowance percentage applied to the applicable aging categories would change by 1% from our estimated bad debt
allowance percentage for the year ended December 31, 2010, our after-tax loss from continuing operations would change by approximately $0.6 million and our net accounts
receivable would change by $1.0 million at December 31, 2010. The resulting change in this analytical tool is considered to be a reasonably likely change that would affect

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our
overall assessment of this critical accounting estimate. Accounts receivable are written-off after collection efforts have been followed in accordance with our policies.

Goodwill and Other Intangible Assets

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by the Company in business
combinations. Goodwill and indefinite life intangible assets are not amortized but are reviewed annually for impairment, or more frequently if impairment indicators arise. Goodwill impairment was
recognized for the Successor year ended December 31, 2010 of approximately $91.2 million as a result of our annual review performed during the fourth quarter of 2010 and an additional
$2.5 million for certain radiation treatment office closings. No goodwill impairment loss was recognized for the Successor year ended December 31, 2009, and the period from
February 22, 2008 to December 31, 2008, and the Predecessor period from January 1, 2008 to February 21, 2008.

The
implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The estimated fair value of the reporting unit is
allocated to all of the assets and liabilities of the reporting unit (including the unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the
estimated fair value of the reporting unit was the purchase price paid. Based on (i) assessment of current and expected future economic conditions, (ii) trends, strategies and forecasted
cash flows at each reporting unit and (iii) assumptions similar to those that market participants would make in valuing the reporting units

The
estimated fair value measurements were developed using significant unobservable inputs (Level 3). For goodwill, the primary valuation technique used was an income methodology
based on estimates of forecasted cash flows for each reporting unit, with those cash flows discounted to present value using rates commensurate with the risks of those cash flows. In addition, a
market-based valuation method involving analysis of market multiples of revenues and earnings before interest, taxes, depreciation and amortization ("EBITDA") for (i) a group of comparable
public companies and (ii) recent transactions, if any, involving comparable companies. Assumptions used are similar to those that would be used by market participants performing valuations of
regional divisions. Assumptions were based on analysis of current and expected future economic conditions and the strategic plan for each reporting unit.

Intangible
assets consist of trade names, non-compete agreements and licenses. Trade names have an indefinite life and are tested annually for impairment.
Non-compete agreements and licenses are amortized over the life of the agreement (which typically ranges from 2 to 10 years) using the straight-line method. No
intangible asset impairment loss was recognized for any period presented.

Impairment of Long-Lived Assets

In accordance with ASC 360, "Accounting for the Impairment or Disposal 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 would be recognized for the amount by which the asset's carrying value exceeds its estimated fair value.

Stock-Based Compensation

All share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense
in the statement of operations and comprehensive (loss) income over the requisite service period.

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For
purposes of determining the compensation expense associated with equity grants, we value the business enterprise using a variety of widely accepted valuation techniques, which
considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity. The Company then uses the
option pricing method to determine the fair value of equity units at the time of grant using the following assumptions: a term of five years, which is based on the expected term in which the units
will be realized; a risk-free interest rate of 2.80% and 1.96% for grants issued in 2008 and 2010, respectively, which is the five-year U.S. federal treasury bond rate
consistent with the term assumption; and expected volatility of 38% and 50% for grants issued in 2008 and 2010, respectively, which is based on the historical data of equity instruments of comparable
companies.

The
estimated fair value of the units, less an assumed forfeiture rate of 2.7%, is recognized in expense in the Company's financial statements on a straight-line basis over
the requisite service periods of the awards for Class B Units. For Class B Units, the requisite service period is 48 months, and for Class C Units, the requisite service
period is 34 months only if probable of being met. The assumed forfeiture rate is based on an average historical forfeiture rate.

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. ASC 740, "Income Taxes" ("ASC 740") requires that a valuation allowance be established when it is more
likely than not that all or a portion of a deferred tax asset will not be realized. In 2009, the Company determined that a valuation allowance of $3.4 million was appropriate under the
provisions of ASC 740. This valuation allowance of $3.4 million was against state deferred tax assets. Primarily because of the current year taxable loss as of December 31, 2010, the
Company determined that the valuation allowance should be $17.6 million, consisting of $12.3 million against federal deferred tax assets and $5.3 million against state deferred
tax assets. This represents an increase of $14.2 million in valuation allowance.

ASC
740 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a recognition threshold and measurement attributes for
financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain tax position on the income tax return must be recognized at the
largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if
it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and
transition.

We
are subject to taxation in the United States and approximately 20 state jurisdictions. However, the principal jurisdictions for which we are subject to tax are the United States and
Florida.

Our
future effective tax rates could be affected by changes in the relative mix of taxable income and taxable loss jurisdictions, changes in the valuation of deferred tax assets or
liabilities, or changes in tax laws, interpretations thereof. We monitor the assumptions used in estimating the annual effective tax rate and makes adjustments, if required, throughout the year. If
actual results differ from the assumptions used in estimating our annual effective tax rates, future income tax expense (benefit) could be materially affected.

In
addition, we are routinely under audit by federal, state, or local authorities in the areas of income taxes and other taxes. These audits include questioning the timing and amount of
deductions and compliance with federal, state, and local tax laws. We regularly assess the likelihood of adverse outcomes from these audits to determine the adequacy of our provision for income taxes.
To the extent we prevail in matters for which accruals have been established or is required to pay amounts in excess

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of
such accruals, the effective tax rate could be materially affected. We are currently undergoing a federal income tax audit for tax years 2005 through 2008 and New York State audit for tax years
2006 through 2008.

New Pronouncements

On January 1, 2009, we adopted changes issued by the FASB to the authoritative hierarchy of GAAP. These changes establish the
FASB ASC as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules
and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of
Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates ("ASU"). Accounting Standards Updates will not be authoritative in
their own right as they will only serve to update the ASC. These changes and the ASC itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of
these changes had no impact on our consolidated financial statements.

On
January 1, 2009, we adopted changes issued by the FASB to non-controlling interests in consolidated financial statements. These changes require, among other items,
that a non-controlling interest be included within equity separate from the parent's equity; consolidated net income be reported at amounts inclusive of both the parent's and
non-controlling interest's shares; and, separately, the amounts of consolidated net income attributable to the parent and non-controlling interest all be reported on the
consolidated statement of operations. The adoption of the changes have been applied retrospectively for all periods presented.

Effective
January 1, 2009, we adopted changes issued by the FASB related to accounting for business combinations. These changes retain the purchase method of accounting for
acquisitions, but require a number of changes, including changes in the way assets and liabilities are recognized in purchase accounting as well as requiring the expensing of acquisition-related costs
as incurred. Furthermore, these changes provide guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of
the financial statements to
evaluate the nature and financial effects of the business combination. We have applied these changes to prospective acquisitions beginning January 1, 2009.

Effective
January 1, 2009, we adopted changes issued by the FASB to the method of determination of the useful life of intangible assets. This guidance amends the factors that
should be considered in determining the useful life of a recognized intangible asset. The intent of this guidance is to improve consistency between the useful life of a recognized intangible asset and
the period of expected cash flows used to measure the fair value of the asset. The adoption of this guidance did not have a material impact on our consolidated results of operations or financial
position.

Effective
January 1, 2009, we adopted changes issued by the FASB to equity method investment accounting. These changes clarify the accounting for certain transactions and
impairment considerations involving equity method investments. The adoption of this guidance did not have a material impact on our consolidated financial position, results of operations, or cash
flows.

Effective
January 1, 2009, we adopted changes issued by the FASB to disclosures about derivative instruments and hedging activities. This guidance requires enhanced disclosures
about an entity's derivative and hedging activities and thereby improves the transparency of financial reporting. The objective of the guidance is to provide users of financial statements with an
enhanced understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for, and how derivative instruments and related hedged
items affect an entity's

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financial
position, financial performance, and cash flows. We adopted the enhanced disclosure requirements regarding derivative instruments and hedging activities.

In
June 2009, the FASB issued changes to the accounting for Variable Interest Entities ("VIEs"). These changes require an enterprise (i) to perform an analysis to determine
whether the enterprise's variable interest or interests give it a controlling financial interest in a variable interest entity; (ii) to require ongoing reassessments of whether an enterprise is
the primary beneficiary of a variable interest entity; (iii) to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity;
(iv) to add an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity
investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity's economic
performance; and (v) to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest
entity. These changes become effective for us on January 1, 2010. We adopted the changes on January 1, 2010 which had no material impact to the consolidated financial statements.

In
January 2010, the FASB issued ASU 2010-06, "Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements" ("ASU
2010-06") which amends "Fair Value Measurements and Disclosures" to clarify certain existing disclosure requirements and to require a number of additional disclosures, including amounts
and reasons for significant transfers between the three levels of the fair value hierarchy, and presentation of certain information in the reconciliation of recurring Level 3 measurements on a
gross basis. ASU 2010-06 was effective for us on January 1, 2010, with certain disclosures effective for periods beginning January 1, 2011. The initial adoption of ASU
2010-06 resulted in additional disclosure in the notes to the financial statements but did not have an impact on our financial position or results of operations.

In
August 2010, the FASB issued ASU 2010-23, "Health Care Entities (Topic 954): Measuring Charity Care for Disclosure" ("ASU 2010-23"), which amends ASC 954 to
require that cost be used as the measurement basis for charity care disclosure purposes and that cost be identified as the direct and indirect costs of providing the charity care. ASU
2010-23 is effective for us on January 1, 2011. The initial adoption of ASU 2010-23 will result in revised disclosures in the notes to the financial statements but will
not have an impact on our financial position or results of operations.

In
August 2010, the FASB issued ASU 2010-24, "Health Care Entities (Topic 954): Presentation of Insurance Claims and Related Insurance Recoveries" ("ASU
2010-24"), which amends ASC 954 to clarify that a health care entity cannot net insurance recoveries against a related claim liability. Additionally, ASU 2010-24 notes the
amount of the claim liability should be determined without consideration of insurance recoveries. ASU 2010-24 is effective for us on January 1, 2011. We are currently assessing the
impact of this guidance on our financial statements.

Reimbursement, Legislative And Regulatory Changes

Legislative and regulatory action has resulted in continuing changes in reimbursement under the Medicare and Medicaid programs that
will continue to limit payments we receive under these programs.

Within
the statutory framework of the Medicare and Medicaid programs, there are substantial areas subject to legislative and regulatory changes, administrative rulings, interpretations,
and discretion which may further affect payments made under those programs, and the federal and state governments may, in the future, reduce the funds available under those programs or require more
stringent utilization and quality reviews of our treatment centers or require other changes in our operations. Additionally, there may be a continued rise in managed care programs and future
restructuring of the

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financing
and delivery of healthcare in the United States. These events could have an adverse effect on our future financial results.

Inflation

While inflation was not a material factor in either revenue or operating expenses during the periods presented, the healthcare industry
is labor- intensive. Wages and other expenses increase during periods of inflation and labor shortages, such as the nationwide shortage of dosimetrists and radiation therapists. In addition, suppliers
pass along rising costs to us in the form of higher prices. We have implemented cost control measures to curb increases in operating costs and expenses. We have to date offset increases in operating
costs by increasing reimbursement or expanding services. However, we cannot predict our ability to cover, or offset, future cost increases.

Commitments

The following table sets forth our contractual obligations as of December 31, 2010.

Payments Due by PeriodContractual Cash Obligations

Total

Less Than
1 Year

2 - 3 Years

4 - 5 Years

After
5 Years(in thousands)Senior secured credit facilities(1)

$
319,173

$
15,589

$
36,718

$
266,866

$
Senior subordinated notes(2)


508,982


30,613


61,225


61,225


355,919Capital leases(3)


19,791


9,857


9,900


34


Operating lease obligations(4)


374,966


29,756


55,451


51,982


237,777Finance obligations(5)


10,243


794


1,637


1,705


6,107Total contractual cash obligations

$
1,233,155

$
86,609

$
164,931

$
381,812

$
599,803


(1)As
of December 31, 2010, there was $265.4 million aggregate principal amount outstanding under our senior secured term loan facility
(excluding original issue discount of $1.5 million) and $8.5 million in aggregate principal amount outstanding under our senior secured revolving credit facility (excluding issued but
undrawn letters of credit). Interest expense and fees on our senior secured term loan facility is based on an assumed interest rate of the three-month LIBOR rate as of December 31, 2010 plus
425 basis points plus unused commitment fees on our $66.0 million senior secured revolving credit facility.(2)Senior
subordinated notes of $310.0 million with original issue discount of $1.9 million, with a 7 year maturity. Interest expense is
based on an interest rate of 97/8%.(3)Capital
leases includes leases relating to medical equipment.(4)Operating
lease obligations includes land and buildings.(5)Finance
obligations includes real estate under the failed sale-leaseback accounting. See "Management's Discussion and Analysis of Financial
Condition and Results of OperationsResults of OperationsFinance Obligation."


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. In addition, we do not engage in

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trading
activities involving non-exchange traded contracts. 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.

Item 7A.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. Because our borrowings under
our senior secured credit facilities will bear interest at variable rates, we are sensitive to changes in prevailing interest rates. We currently manage part of our interest rate risk under an
interest rate swap agreement. We are not exposed to any market risks related to foreign currencies.

Interest Rate Swap

We are exposed to changes in interest rates as a result of our outstanding variable rate debt. To reduce the interest rate exposure, we
entered into an interest rate swap agreement whereby we fixed the interest rate on the notional amount of approximately $290.6 million of our senior secured term loan facility, effective as of
June 30, 2008. The rate and maturity of the interest rate swap is 3.67% plus a margin, which is currently 425 basis points, and expires on March 31, 2012. The amount of our senior
secured term loan facility subject to the interest rate swap agreement will reduce from $290.6 million to $116.0 million by the end of the term. At December 31, 2010 and
December 31, 2009, the amount of the floating rate senior debt subject to the interest rate swap was $174.2 million and $232.4 million, respectively.

The
swap is a derivative and is accounted for under ASC 815, "Derivatives and Hedging" ("ASC 815"). The fair value of the swap agreement, representing the estimated amount that we
would pay to a third party assuming our obligations under the interest rate swap agreement terminated at December 31, 2010 and December 31, 2009, was approximately $5.0 million
and $7.7 million, respectively. The estimated fair value of our interest rate swap was determined using the income approach that considers various inputs and assumptions, including LIBOR swap
rates, cash flow activity, yield curves and other relevant economic measures, all of which are observable market inputs that are classified under Level 2 of the fair value hierarchy. The fair
value also incorporates valuation adjustments for credit risk.

Since
we have the ability to elect different interest rates on the debt at each reset date, and our senior secured credit facilities contain certain prepayment provisions, the hedging
relationship does not qualify for use of the shortcut method under ASC 815. Therefore, the effectiveness of the hedge relationships are assessed on a quarterly basis during the life of the hedge
through regression analysis. The entire change in fair market value is recorded in equity, net of tax, as other comprehensive income (loss).

Interest Rates

Outstanding balances under our senior secured credit facilities bear interest based on either LIBOR plus an initial spread, or the
alternate base rate ("ABR") plus an initial spread, at our option. Accordingly, an adverse change in interest rates would cause an increase in the amount of interest paid. As of December 31,
2010, we have interest rate exposure on $99.7 million of our senior secured credit facilities. A 100 basis point change in interest rates on our senior secured credit facilities would result

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in
an increase of approximately $1.0 million in the amount of annualized interest paid and annualized interest expense recognized in our consolidated financial statements.

Item 8.Financial Statements and Supplementary Data

Information with respect to this Item is contained in our consolidated financial statements beginning with the Index on
Page F-1 of this report, which is incorporated herein by reference.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.Controls and Procedures

(10) (a) Evaluation of Disclosure Controls and Procedures

We
maintain disclosure controls and procedures to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to management, including the President and Chief Executive Officer and the Chief
Financial Officer, to allow for timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the
possibility of human error and the circumvention or overriding of the controls and procedures. As of December 31, 2010, the end of the period covered by this Annual Report on
Form 10-K, our management, with the participation of our principal executive officers and principal financial officer, has evaluated the effectiveness of our disclosure controls and
procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, our principal executive officers and principal financial officer
concluded that our disclosure controls and procedures were effective as of December 31, 2010.

This
annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report
was not subject to attestation by our independent registered public accounting firm pursuant to an exemption for issuers that are not "large accelerated filers" nor "accelerated filers" set forth in
Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Item 9B.Other Information

None

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PART III

Item 10.Directors, Executive Officers and Corporate Governance

Radiation Therapy Services Holdings, Inc.'s Executive Officers, Directors and Key Employees

Our executive officers, directors and key employees and their ages and position are as follows:

Name

Age

PositionDaniel E. Dosoretz, M.D.


58

Chief Executive Officer and DirectorKerrin E. Gillespie


52

Senior Vice President and Chief Financial OfficerJoseph Biscardi


42

Controller and Chief Accounting OfficerJames L. Elrod, Jr.


56

President and DirectorBryan J. Carey


50

DirectorAnil Shrivastava


42

DirectorErin L. Russell


36

Vice President and DirectorJames H. Rubenstein, M.D.


56

DirectorHoward M. Sheridan, M.D.


66

Director


Daniel E. Dosoretz, M.D., F.A.C.R., F.A.C.R.O.has served as a director of the Company since February 2008 and as our Chief Executive
Officer since February 2011. Dr. Dosoretz is also employed as a physician by our wholly-owned subsidiary, 21st Century Oncology, LLC. Prior to joining us, Dr. Dosoretz
served as attending physician at the Massachusetts General Hospital. He also was an Instructor and Assistant Professor of Radiation Medicine at Harvard Medical School and Research Fellow of the
American Cancer Society. Upon moving to Fort Myers, Florida, he was appointed to the Clinical Faculty as Associate Professor at the University of Miami School of Medicine. He also has been a visiting
Professor at Duke University Medical School and is a Distinguished Alumni Visiting Professor in Radiation Oncology at Massachusetts General Hospital, Harvard Medical School. Dr. Dosoretz is
board certified in Therapeutic Radiology by the American Board of Radiology. He is a Fellow of ACRO and of the American College of Radiology and is a member of the International Stereotactic
Radiosurgery Society, the American Society for Therapeutic Radiology and Oncology and the American Society of Clinical Oncology. Dr. Dosoretz graduated from the University of Buenos Aires
School of Medicine with the Gold medal for being top of his class, and served his residency in Radiation Oncology at the Department of Radiation Medicine at the Massachusetts General Hospital, Harvard
Medical School, where he was selected Chief Resident of the Department of Radiation Oncology. Dr. Dosoretz's history with the Company and significant operating experience in the health care
industry and extensive board experience led to the conclusion that Dr. Dosoretz should serve as a director of the Company.

Kerrin E. Gillespiejoined us in March 2010 as our Senior Vice President and Chief Financial Officer. From 2007 to 2010, prior to joining
us, Mr. Gillespie served as the Chief Financial Officer of Ardent Health Services, LLC, a $1.8 billion operator of acute care hospitals and other healthcare services, including a
health plan, regional laboratory and large physician practice in the Southwestern U.S. From 1998 to 2007, Mr. Gillespie was the Vice President of Group Operations at Community Health
Systems, Inc., an operator of acute care hospitals in non-urban markets throughout the United States. Prior to Community Health Systems, Inc., Mr. Gillespie held
financial and operating positions at Health Management Associates, Inc. and was the CEO and CFO of large hospitals based in Sebring, Florida, and Midwest City, Oklahoma, respectively.
Mr. Gillespie holds a B.B.A. in accounting from University of Georgia. He is a Certified Public Accountant in Georgia, a member of the American Institute of Certified Public Accountants and a
Fellow of the Healthcare Financial Management Association.

Joseph Biscardihas served as the Company's Controller and Chief Accounting Officer since February 2008. Prior to joining us,
Mr. Biscardi worked for PricewaterhouseCoopers, LLP from 1993 to

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1997.
Mr. Biscardi holds a B.B.A. in accounting from Hofstra University. He is a Certified Public Accountant in New York and a member of the American Institute of Certified Public Accountants,
a member of the Healthcare Financial Management Association and a member of the Financial Executives International.

James L. Elrod, Jr.has been served as President of the Company and as a member of the Company's board of directors since February 2008.
Mr. Elrod is a Managing Director of Vestar and is currently the Co-Head of its Global Healthcare Group. Prior to joining Vestar in 1998, Mr. Elrod was Executive Vice
President, Finance and Operations for Physicians Health Service, a public managed care company. Prior to that, he was a Managing Director and Partner of Dillon, Read & Co. Inc.
Mr. Elrod is currently a director of Essent Healthcare, Inc. and National Mentor Holdings, Inc. and was a director of Joerns Healthcare, LLC until August 2010.
Mr. Elrod received his A.B. from Colgate University and his M.B.A. from Harvard Business School. Mr. Elrod's experience in the health care industry and collective board experience,
financial experience, and diverse personal background led to the conclusion that Mr. Elrod should serve as a director of the Company.

Bryan J. Careyhas been a member of the Company's board of directors since April 2009 and was the Company's interim Chief Financial
Officer from August 28, 2009 to March 15, 2010. Mr. Carey is a Managing Director of Vestar, primarily focused on Healthcare investments. He joined Vestar in 2000, having been
Executive Vice President, Chief Financial Officer and Managing Director of the European operations of Aearo Corporation, a Vestar portfolio company. Mr. Carey is currently a director and member
of the audit committee of Sunrise Medical, Inc. Mr. Carey was a director of Joerns Healthcare, LLC until August 2010. He received his A.B. in economics from Georgetown University
and his M.B.A. from the Wharton School of the University of Pennsylvania. Mr. Carey's experience in the health care industry and collective board experience, experience as the Company's interim
Chief Financial Officer and background including his personal involvement in the healthcare field led to the conclusion that Mr. Carey should serve as a director of the Company.

Anil Shrivastavahas been a member of the Company's board of directors since February 2008. Mr. Shrivastava is a Managing Director
of Vestar, primarily focused on Healthcare investments. Mr. Shrivastava joined Vestar in 2007. Previously, he was a partner at Bain & Company, Inc., the global consulting firm, as
a leader in their healthcare practice. Mr. Shrivastava is currently a director of MediMedia USA, LLC, Sunrise Medical, Inc. and DeVilbiss Healthcare, LLC.
Mr. Shrivastava received his B.A. from Harvard University and his M.B.A. from Harvard Business School. Mr. Shrivastava's experience in the health care industry and collective board
experience, financial experience, and diverse personal background led to the conclusion that Mr. Shrivastava should serve as a director of the Company.

Erin L. Russellhas served as a Vice President of the Company and as a member of the Company's board of directors since February 2008.
Ms. Russell is a Principal of Vestar, and is primarily focused on Healthcare investments. Ms. Russell joined Vestar in 2000. Previously, she was a member of the mergers and acquisitions
group at PaineWebber, Inc. Ms. Russell is currently a director and a member of the audit committee of DynaVox Inc. In addition, she serves on the National Advisory Board of the
Jefferson Scholars Foundation at the University of Virginia. Ms. Russell received a B.S. from the McIntire School of Commerce at the University of Virginia and her M.B.A. from Harvard Business
School. Ms. Russell's experience in the health care industry board experience and diverse personal background led to the conclusion that Ms. Russell should serve as a director of the
Company.

James H. Rubenstein, M.D.has served as a director of the Company since February 2008. Dr. Rubenstein is also employed as a
physician by our wholly-owned subsidiary, 21st Century Oncology, LLC. Prior to joining us, Dr. Rubenstein was an Assistant Professor of Radiation Oncology at the University of
Pennsylvania and later became Co-Director of its Radiation Oncology Residency Program. He also served as Chairman of the Department of Medicine for Columbia Regional Medical

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Center
in Southwest Florida and became a Clinical Assistant Professor at the University of Miami School of Medicine's Department of Radiology. He is board certified in Internal Medicine by the
American Board of Internal Medicine and in Radiation Oncology by the American Board of Radiology. He graduated from New York University School of Medicine and completed his internship and
residency in internal medicine at Beth Israel Hospital in Boston, at the same time working as an Assistant Instructor in internal medicine for Harvard University's School of Medicine.
Dr. Rubenstein's years of experience in the health care industry career, particularly in radiation oncology and with the Company, as well as his familiarity with all aspects of its business led
to the conclusion that Dr. Rubenstein should serve as a director of the Company.

Howard M. Sheridan, M.D.has served as a director of the Company since February 2008. Dr. Sheridan planned and developed our first
radiation treatment center. Prior to joining us, Dr. Sheridan served as President of the medical staff at Southwest Florida Regional Medical Center as well as chairman of the Department of
Radiology. Dr. Sheridan currently serves as Chairman of Edison Bancshares, Inc. He previously served on the Advisory Board of Southeast Bank, N.A., and also served as a founding Director
and member of the Executive Compensation and Loan Committee of Heritage National Bank from 1989 until September 1996, when Heritage was acquired by SouthTrust Corporation. Dr. Sheridan has
practiced interventional radiology and diagnostic radiology in Fort Myers, Florida from 1975 until accepting the chairmanship in April 2004. Dr. Sheridan is a member of the American Medical
Association, the Florida Medical Association, and the American College of Radiology. Dr. Sheridan is the Vice President of 21st Century C.A.R.E., a non-profit dedicated to
cancer patient assistance, research and education. Dr. Sheridan is also on the Dean's Counsel of Tulane Medical School. He graduated from Tulane Medical School and completed his residency at
the University of Colorado Medical Center. Dr. Sheridan is board certified by the American Board of Radiology and the American Board of Nuclear Medicine. Dr. Sheridan's board experience,
years of experience in the health care industry career, particularly in radiation oncology and with the Company, as well as his familiarity with all aspects of its business since its founding led to
the conclusion that Dr. Sheridan should serve as a director of the Company.

Radiation Therapy Services, Inc.'s Executive Officers, Directors and Key Employees

The business and operations of the Company are managed through RTS, our wholly owned operating subsidiary, which is the parent of our
provider subsidiaries. As such, the information set forth below and in the remaining sections of this Item 10 are presented with respect to RTS.

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RTS's
executive officers, directors and key employees and their ages and position are as follows:

Name

Age

PositionDaniel E. Dosoretz, M.D.


58

President, Chief Executive Officer and DirectorJoseph M. Garcia


41

Chief Operating OfficerEduardo Fernandez, M.D., Ph.D


47

Senior Vice President, Physician ManagementConstantine A. Mantz, M.D.


42

Chief Medical OfficerKerrin E. Gillespie


52

Senior Vice President and Chief Financial OfficerNorton L. Travis


58

Executive Vice President and General CounselMadlyn Dornaus


58

Senior Vice President, Chief Compliance OfficerJoseph Biscardi


42

Vice President, Assistant Treasurer, Controller and Chief Accounting OfficerJeffrey A. Pakrosnis


48

TreasurerDaniel H. Galmarini


55

Chief Technology OfficerJames L. Elrod, Jr.


56

Chairman of the Board of Directors and DirectorBryan J. Carey


50

DirectorAnil Shrivastava


42

DirectorErin L. Russell


36

DirectorJames H. Rubenstein, M.D.


56

Secretary, Medical Director and DirectorHoward M. Sheridan, M.D.


66

Director


Daniel E. Dosoretz, M.D., F.A.C.R., F.A.C.R.O.is one of RTS' founders and has served as a director since 1988 and as its President and
Chief Executive Officer since April 1997. Dr. Dosoretz is also employed as a physician by our wholly-owned subsidiary, 21st Century Oncology, LLC. Prior to founding RTS,
Dr. Dosoretz served as attending physician at the Massachusetts General Hospital. He also was an Instructor and Assistant Professor of Radiation Medicine at Harvard Medical School and Research
Fellow of the American Cancer Society. Upon moving to Fort Myers, Florida, he was appointed to the Clinical Faculty as Associate Professor at the University of Miami School of Medicine. He also has
been a visiting Professor at Duke University Medical School and is a Distinguished Alumni Visiting Professor in Radiation Oncology at Massachusetts General Hospital, Harvard Medical School.
Dr. Dosoretz is board certified in Therapeutic Radiology by the American Board of Radiology. He is a Fellow of ACRO and of the American College of Radiology and is a member of the International
Stereotactic Radiosurgery Society, the American Society for Therapeutic Radiology and Oncology and the American Society of Clinical Oncology. Dr. Dosoretz graduated from the University of
Buenos Aires School of Medicine with the Gold medal for being top of his class, and served his residency in Radiation Oncology at the Department of Radiation Medicine at the Massachusetts General
Hospital, Harvard Medical School, where he was selected Chief Resident of the department. Dr. Dosoretz's role as founder, President and Chief Executive Officer of RTS, history with the Company
and significant operating experience in the health care industry and extensive board experience led to the conclusion that Dr. Dosoretz should serve as a director of RTS.

Joseph M. Garciajoined RTS in February 2011 as its Chief Operating Officer. From 2007 to 2011, prior to joining RTS, Mr. Garcia
was a Vice President of Operations at DaVita, the leading dialysis company in the United States. Mr. Garcia was responsible for three divisions with 135 dialysis centers and over 40 hospital
contracts. Collectively, these divisions represented approximately $425.0 million in revenue. Prior to DaVita, Mr. Garcia was the Senior Vice President of Operations at Sterling
Healthcare from 2004 to 2007. Sterling was a hospital Emergency Room management company with 250 contracts across the United States. From 2000 to 2004 Mr. Garcia was a founder and Senior Vice
President in both Health Network One andiHealth Technologies. Health Network One is a specialty network business that contracts with large insurance
companies and is a licensed Third Party Administrator (TPA).iHealth Technologies a healthcare technology company, whose primary product is a
proprietary software that is purchased by insurance companies to process and filter their claims prior

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to
payment. From 1998 to 2000 Mr. Garcia was a Senior Vice President of Operations at Vivra, a dialysis provider, until its sale to Gambro and Magellan Behavior Health. From 1996 to 1998
Mr. Garcia was the Vice President of Corporate Development at FPA Medical Management. Mr. Garcia graduated with a B.S.B.A. and M.B.A. from Creighton University in Omaha, Nebraska.

Eduardo Fernandez M.D., Ph.D.joined RTS in 1998 and has served in his current capacity since February 2011 and formerly as Director of
Regional Operations from March 2009 to February 2011. Dr. Fernandez is also employed as a physician by our wholly-owned subsidiary, 21st Century Oncology, Inc.
Dr Fernandez, Board Certified in Radiation Oncology, was awarded his medical degree from the University of Malaga, Spain, in 1987. He was Assistant and Associate Professor of Radiology and
Medical Physics in his home university. Since 1989 he was in close cooperation with the Department of Biochemical Oncology and Experimental Radiotherapy at Case Western Reserve University in
Cleveland, Ohio, including several sabbatical visits. In 1991 he defended a Doctoral Thesis on the molecular biology aspects of Photodynamic Therapy, and was awarded a Ph.D. degree from the University
of Malaga. He completed his Radiation Oncology Residency at the Cleveland Clinic Foundation (Callahan Center for Radiation Oncology and Robotics) and served as the Head of Radiation Oncology at the
Cleveland Clinic, Florida, where he was directly responsible for the development of the External Beam Radiation Oncology and Prostate Seed Brachytherapy Programs. Simultaneously he had an Assistant
Professorship of Radiology at Ohio State University. He was Chief of Radiation Oncology at the Aventura Comprehensive Cancer Center from 2000 to 2007, Medical Director of the East Coast Operations
from 2000 to 2009 and Co-VP of Medical Operations from 2008 to 2009. Dr. Fernandez is a director of 21st Century C.A.R.E., a non-profit dedicated to cancer
patient assistance, research and education.

Constantine A. Mantz, M.D.joined RTS in 2000 and has served in his current capacity since February 2011 and formerly as Senior Vice
President of Clinical Operations from March 2009 to February 2011. Dr. Mantz is also employed as a physician by our wholly-owned subsidiary, 21st Century Oncology, Inc.
Dr. Mantz received a Bachelor of Science Degree in Biology from Loyola University of Chicago. He earned his medical degree from the University of Chicago's Pritzker School of Medicine and did a
surgical internship at the Hennepin County Medical Center in Minneapolis. Dr. Mantz completed his radiation oncology residency at the University of Chicago Hospitals, is Board Certified in
Radiation Oncology by the American Board of Radiology and is a member of ACRO, the American Medical Association, ASTRO and AFROC. During the course of his career, Dr. Mantz has been involved in
numerous radiation therapy research projects, published professional journal articles and given lectures
and presented abstracts and poster sessions at national meetings concerning cancer treatment. Dr. Mantz has a special interest in the study and treatment of prostate cancer and breast cancer.

Kerrin E. Gillespiejoined RTS in March 2010 as its Senior Vice President and Chief Financial Officer. From 2007 to 2010, prior to joining
RTS, Mr. Gillespie served as the Chief Financial Officer of Ardent Health Services, LLC, a $1.8 billion operator of acute care hospitals and other healthcare services, including a
health plan, regional laboratory and large physician practice in the Southwestern U.S. From 1998 to 2007, Mr. Gillespie was the Vice President of Group Operations at Community Health
Systems, Inc., an operator of acute care hospitals in non-urban markets throughout the United States. Prior to Community Health Systems, Inc., Mr. Gillespie held
financial and operating positions at Health Management Associates, Inc. and was the CEO and CFO of large hospitals based in Sebring, Florida, and Midwest City, Oklahoma, respectively.
Mr. Gillespie holds a B.B.A. in accounting from University of Georgia. He is a Certified Public Accountant in Georgia, a member of the American Institute of Certified Public Accountants and a
Fellow of the Healthcare Financial Management Association.

Norton L. Travishas been RTS's Executive Vice President and General Counsel since February 2008 after having served as its outside
general counsel for the prior five years. As outside counsel,

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Mr. Travis
oversaw all legal aspects of RTS's expansion transactions, as well as our legal compliance program. Prior to joining us, Mr. Travis served as a partner and the Chair of the
Business Practice Group of Garfunkel, Wild & Travis, P.C., a specialty health-care law firm he co-founded in 1980. Mr. Travis is currently a director and a member
of the compensation committee and the capital allocations committee of CareCore National, LLC. Mr. Travis received his B.A. from the University of Massachusetts and his J.D. from Hofstra
University School of Law.

Madlyn Dornausjoined RTS in 2004 and has served in her current capacity as Senior Vice President and Chief Compliance Officer since
September 2009. Ms. Dornaus received her B.S. degree from Illinois State University and her M.B.A. from the University of Illinois. Prior to joining the Company, Ms. Dornaus was National
Vice President for Per Se Technologies and held operational leadership roles as Regional Vice President at Curative Health Services and Concentra. She is a Certified Healthcare Compliance Officer and
a member of the Medical Group Management Association.

Joseph Biscardijoined RTS in 1997 as its Vice President, Assistant Treasurer, Controller and Chief Accounting Officer. Prior to joining
RTS, Mr. Biscardi worked for PricewaterhouseCoopers, LLP from 1993 to 1997. Mr. Biscardi holds a B.B.A. in accounting from Hofstra University. He is a Certified Public Accountant
in New York and a member of the American Institute of Certified Public Accountants, a member of the Healthcare Financial Management Association and a member of the Financial Executives International.

Jeffrey A. Pakrosnisjoined RTS in October 2005 as its Treasurer. Prior to joining us, Mr. Pakrosnis was the Chief Financial
Officer of a specialty chemical enterprise and two venture-backed technology companies; prior to that, he spent 15 years, collectively, with KPMG, LLP and Ernst &
Young, LLP. Mr. Pakrosnis holds a B.B.A. in Accounting from the University of Cincinnati. He is a Certified Public Accountant in Ohio and a member of the Ohio Society of Certified Public
Accountants.

Daniel H. Galmarinihas served as RTS's Chief Technology Officer since August 1990. Mr. Galmarini received his degree in Physics
from the School of Exact Sciences of University of La Plata, Argentina. In 1983, Mr. Galmarini obtained his certification of Specialist in Physics from the National Energy Commission of
Argentina. Between 1983 and 1990, he became Director of Physics of multiple institutions. He has a certification in Radiotherapy Physics from the American Board of Radiology. He has held several
teaching positions in universities in Argentina, and was instructor of theoretical physics in Central America and Lecturer of Medical Physics at the University of Miami in Florida. He has received
several awards including the Best Scientific Work in Oncology in 1985 by the National Academy of Medicine in Argentina on the subject of Neuro-Oncological Stereotaxy. Mr. Galmarini is the
author of several publications in a variety of fields including teletherapy and brachytherapy physics of radiation therapy, neurosurgery, radiobiology and computers applied to radiation therapy.
Mr. Galmarini is a member of the American Association of Physics in Medicine and the American Brachytherapy Society.

James L. Elrod, Jr.has been a member of RTS's board of directors and the Chairman of RTS's board of directors since February 2008.
Mr. Elrod is a Managing Director of Vestar and is currently the Co-Head of its Global Healthcare Group. Prior to joining Vestar in 1998, Mr. Elrod was Executive Vice
President, Finance and Operations for Physicians Health Service, a public managed care company. Prior to that, he was a Managing Director and Partner of Dillon, Read & Co. Inc.
Mr. Elrod is currently a director of Essent Healthcare, Inc. and National Mentor Holdings, Inc. and was a director of Joerns Healthcare, LLC until August 2010.
Mr. Elrod received his A.B. from Colgate University and his M.B.A. from Harvard Business School. Mr. Elrod's experience in the health care industry and collective board experience,
financial experience, and diverse personal background led to the conclusion that Mr. Elrod should serve as a director of RTS.

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Bryan J. Careyhas been a member of RTS's board of directors since April 2009 and was the RTS's interim Chief Financial Officer from
September 2009 to March 2010. Mr. Carey is a Managing Director of Vestar, primarily focused on Healthcare investments. He joined Vestar in 2000, having been Executive Vice President, Chief
Financial Officer and Managing Director of the European operations of Aearo Corporation, a Vestar portfolio company. Mr. Carey is currently a director and member of the audit committee of
Sunrise Medical, Inc. Mr. Carey was a director of Joerns Healthcare, LLC until August 2010. He received his A.B. in economics from Georgetown University and his M.B.A. from the
Wharton School of the University of Pennsylvania. Mr. Carey's experience in the health care industry and collective board experience, experience as RTS's interim Chief Financial Officer and
background
including his personal involvement in the healthcare field led to the conclusion that Mr. Carey should serve as a director of RTS.

Anil Shrivastavahas been a member of RTS's board of directors since February 2008. Mr. Shrivastava is a Managing Director of
Vestar, primarily focused on Healthcare investments. Mr. Shrivastava joined Vestar in 2007. Previously, he was a partner at Bain & Company, Inc., the global consulting firm, as a
leader in their healthcare practice. Mr. Shrivastava is currently a director of MediMedia USA, LLC, Sunrise Medical, Inc. and DeVilbiss Healthcare, LLC.
Mr. Shrivastava received his B.A. from Harvard University and his M.B.A. from Harvard Business School. Mr. Shrivastava's experience in the health care industry and collective board
experience, financial experience, and diverse personal background led to the conclusion that Mr. Shrivastava should serve as a director of RTS.

Erin L. Russellhas been a member of RTS's board of directors since February 2008. Ms. Russell is a Principal of Vestar, and is
primarily focused on Healthcare investments. Ms. Russell joined Vestar in 2000. Previously, she was a member of the mergers and acquisitions group at PaineWebber, Inc. Ms. Russell
is currently a director and a member of the audit committee of DynaVox Inc. In addition, she serves on the National Advisory Board of the Jefferson Scholars Foundation at the University of
Virginia. Ms. Russell received a B.S. from the McIntire School of Commerce at the University of Virginia and her M.B.A. from Harvard Business School. Ms. Russell's experience in the
health care industry board experience and diverse personal background led to the conclusion that Ms. Russell should serve as a director of RTS.

James H. Rubenstein, M.D.joined RTS in 1989 as a physician and has served as Secretary, Medical Director and as a director since 1993.
Dr. Rubenstein is also employed as a physician by our wholly-owned subsidiary, 21st Century Oncology, LLC. Prior to joining RTS, Dr. Rubenstein was an Assistant Professor
of Radiation Oncology at the University of Pennsylvania and later became Co-Director of its Radiation Oncology Residency Program. He also served as Chairman of the Department of Medicine
for Columbia Regional Medical Center in Southwest Florida and became a Clinical Assistant Professor at the University of Miami School of Medicine's Department of Radiology. He is board certified in
Internal Medicine by the American Board of Internal Medicine and in Radiation Oncology by the American Board of Radiology. He graduated from New York University School of Medicine and completed his
internship and residency in internal medicine at Beth Israel Hospital in Boston, at the same time working as an Assistant Instructor in internal medicine for Harvard University's School of Medicine.
Dr. Rubenstein's years of experience in the health care industry career, particularly in radiation oncology and with RTS, as well as his familiarity with all aspects of its business led to the
conclusion that Dr. Rubenstein should serve as a director of RTS.

Howard M. Sheridan, M.D.is one of RTS's founders and has served as a director since 1988. Dr. Sheridan planned and developed RTS's
first radiation treatment center. Prior to joining RTS, Dr. Sheridan served as President of the medical staff at Southwest Florida Regional Medical Center as well as chairman of the Department
of Radiology. Dr. Sheridan currently serves as Chairman of Edison Bancshares, Inc. He previously served on the Advisory Board of Southeast Bank, N.A., and also served as a founding
Director and member of the Executive Compensation and Loan Committee of Heritage National Bank from 1989 until September 1996, when Heritage was acquired by SouthTrust

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Corporation.
Dr. Sheridan has practiced interventional radiology and diagnostic radiology in Fort Myers, Florida from 1975 until accepting the chairmanship in April 2004. Dr. Sheridan is
a member of the American Medical Association, the Florida Medical Association, and the American College of Radiology. Dr. Sheridan is the Vice President of 21st Century C.A.R.E., a
non-profit dedicated to cancer patient assistance, research and education. Dr. Sheridan is also on the Dean's Counsel of Tulane Medical School. He graduated from Tulane Medical
School and completed his residency at the University of Colorado Medical Center. Dr. Sheridan is board certified by the American Board of Radiology and the American Board of Nuclear Medicine.
Dr. Sheridan's board experience, years of experience in the health care industry career, particularly in radiation oncology and with RTS, as well as his familiarity with all aspects of its
business since its founding led to the conclusion that Dr. Sheridan should serve as a director of RTS.

Board Composition

RTS's Bylaws provide that its board of directors shall consist of the number of directors so determined by its board of directors. Each
director serves for annual terms and until his or her successor is elected and qualified. Vestar indirectly controls a majority of the capital stock of Parent, which in turn holds 100% of the capital
stock of RTS, and as such, Vestar has the ability to elect all of the members of RTS's board of directors. RTS is also subject to certain agreements, which provide Vestar with the ability to designate
a specified number of members of RTS's board of directors and RT Investments' board of managers. RTS's board of directors presently consists of seven members.

RTS
is indirectly controlled by RT Investments, the direct owner of 100% of the capital stock of Parent. RT Investments does not have a formal policy regarding the procedures by which
equityholders may recommend nominees to its board of managers. However, any recommendations received from equityholders pursuant to RTS's submission procedures are generally evaluated in the same
manner that potential nominees suggested by board members are evaluated. RT Investments is party to an Amended and Restated Securityholders Agreement, pursuant to which the parties thereto must cause
the board of managers of RT Investments to consist of four managers designated by Vestar and its affiliates, two independent managers designated by an affiliate of Vestar after consultation with
Dr. Dosoretz, and two managers that are executives of RTS designated by Dr. Dosoretz after consultation with Vestar, for so long as Dr. Dosoretz is the Chief Executive Officer of
RTS, subject to a reduction of the number of managers that are executives of RTS upon a decrease in the ownership
interests in RT Investments held by certain management holders or failure by RTS to achieve certain performance targets. In addition, RT Investments is governed by an Amended and Restated Limited
Liability Company Agreement, pursuant to which Vestar and its affiliates shall determine the number of persons comprising the board of managers of RT Investments in accordance with the Amended and
Restated Securityholders Agreement, all of whom shall be individuals as determined pursuant to the Amended and Restated Securityholders Agreement. See "Item 13. Certain Relationships and
Related Transactions, and Director Independence."

Board Committees

RTS's board of directors has the authority to appoint committees to perform certain management and administration functions. RTS's
board of directors has provided for an Audit/Compliance Committee, a Capital Allocation Committee and a Compensation Committee.

Audit/Compliance Committee

Mr. Carey and Ms. Russell serve on the Audit/Compliance Committee, with Ms. Russell serving as the Chair. The
Audit/Compliance Committee is responsible for reviewing and monitoring RTS's accounting controls, related party transactions, internal audit functions and compliance with federal and state laws that
affect our business and recommending to RTS's board of directors the engagement of

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RTS's
outside auditors. The Audit/Compliance Committee met six times during 2009 and eight times during 2010. The Audit/Compliance Committee operates under a written charter effective as of
May 16, 2008 adopted by RTS's board of directors in May 2008. RTS's board of directors has determined that each of its members is financially literate. However, as we are now privately held and
controlled by affiliates of Vestar, RTS's board of directors has determined that it is not necessary to designate one or more of its Audit/Compliance Committee members as an "audit committee financial
expert" at this time.

Capital Allocation Committee

Messrs. Elrod, Carey and Shrivastava and Ms. Russell serve on the Capital Allocation Committee, with Mr. Elrod
serving as the Chair. The Capital Allocation Committee reviews and either approves, on behalf of RTS's board of directors, or recommends to RTS's board of directors for approval all material
expenditures related to equipment, acquisitions and de novo development, among others. The Capital Allocation Committee met one time during 2010. The Capital Allocation Committee operates under a
written charter effective as of May 16, 2008 adopted by RTS's board of directors in May 2008.

Compensation Committee

Messrs. Sheridan and Elrod serve on the Compensation Committee, with Mr. Elrod serving as the Chair. The Compensation
Committee reviews and either approves, on behalf of RTS's board of directors, or recommends to RTS's board of directors for approval the annual salaries and other compensation of our executive
officers and individual unit incentive awards. The Compensation Committee also provides assistance and recommendations with respect to our compensation policies and practices and assists with the
administration of our compensation plans. The Compensation Committee met one time during 2010. The Compensation Committee operates under a written charter effective as of May 16, 2008 adopted
by RTS's board of directors in May 2008.

Compensation Committee Interlocks and Insider Participation

Messrs. Sheridan and Elrod serve on the Compensation Committee. No executive officer of RTS served as a director of any
corporation for which any of these individuals served as an executive officer, and there were no other compensation committee interlocks with the companies with which these individuals or RTS's other
directors are affiliated.

Dr. Sheridan
has certain related party relationships with RTS requiring disclosure under the rules and regulations of the SEC. These related party relationships include, among
other things, ownership interests held by Dr. Sheridan in real estate partnerships, which own treatment centers and properties leased by RTS, a medical services provider, to which RTS provides
billing and collections services and an insurance company which provides RTS with malpractice insurance coverage. See "Item 13. Certain Relationships and Related Transactions, and Director
Independence." Dr. Sheridan is one of RTS's founders and previously served as Chairman of RTS's board of directors until February 2008.

Code of Ethics

RTS's board of directors expects its members, as well as its officers and employees, to act ethically at all times and to acknowledge
in writing their adherence to the policies comprising its code of conduct and as applicable, in RTS's Code of Ethics for Senior Financial Officers and Chief Executive Officer. The code of ethics is
posted on our website located atwww.rtsx.comunder the heading "Code of Conduct for Principal Executive Officers and Senior Financial Officers" We
intend to disclose any amendments to RTS's code of ethics and any waiver from a provision of such code, as required by the SEC, on our website within five business days following such amendment or
waiver. Copies of the Code of Ethics are available upon request, without charge, by writing or telephoning us at Radiation Therapy Services, Inc, 2270 Colonial Boulevard, Fort Myers, Florida 33907,
Attn: Corporate Secretary, (239) 931-7275.

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Item 11.Executive Compensation

The business and operations of the Company are managed through RTS, our wholly owned operating subsidiary, which is the parent of our
provider subsidiaries. As such, the information set forth below and in the remaining sections of this Item 11 are presented with respect to RTS.

References
in this Item 11 to "we", "us", "our" and "the Company" are references to Radiation Therapy Services, Inc. and its subsidiaries, consolidated professional
corporations and associations and unconsolidated affiliates, unless the context requires otherwise or unless indicated otherwise.

Compensation Discussion and Analysis

The following discussion and analysis of compensation arrangements of our named executive officers should be
read together with the compensation tables and related disclosures with respect to our current plans, considerations, expectations and determinations regarding compensation.

Executive Summary

The primary objectives of our executive compensation policies are to attract and retain talented executives to effectively manage and
lead our Company and create value for our equityholders. Through our executive compensation policies, we seek to align the level of our executive compensation with the achievement of our corporate
objectives, thereby aligning the interests of our management with those of our equityholders.

The
compensation of our named executive officers generally consists of base salary, annual cash incentive payments, long-term equity incentives and other benefits and
perquisites. In addition, our named executive officers are eligible to receive severance or other benefits upon termination of their employment with us. In setting an individual executive officer's
initial compensation package and the relative allocation among different types of compensation, we consider the nature of the position being filled, the scope of associated responsibilities, the
individual's qualifications, as well as Vestar's experience with other companies in its investment portfolio and general market knowledge regarding executive compensation.

The
discussion below explains our compensation decisions with respect to fiscal year 2010, our last fiscal year. Our named executive officers are Daniel E. Dosoretz, M.D., our President
and Chief Executive Officer since April 1997, Eduardo Fernandez, M.D., Ph.D., who joined us in 1998 and has served as our Senior Vice President, Physician Management since February 2011 and formerly
as Senior Vice President, Director of Regional Operations from March 2009 to February 2011, Constantine A. Mantz, M.D. who joined us in 2000 and has served as our Chief Medical Officer since February
2011 and formerly as Senior Vice President of Clinical Operations from March 2009 to February 2011, Kerrin E. Gillespie, who joined us in March 2010 as our Senior Vice President and Chief Financial
Officer and Norton L. Travis who has been our Executive Vice President and General Counsel since joining us in February 2008. Our named executive officers also include Bryan J. Carey who served as our
interim Chief Financial Officer from September 2009 until March 2010.

Executive Compensation Philosophy

The compensation policies for our named executive officers have been designed based upon our view that the ownership by management of
equity interests in our business is the most effective mechanism for providing incentives for management to maximize gains for equityholders, that annual cash incentive compensation should be linked
to metrics that create value for our equityholders and that other elements of executive compensation should be set at levels that are necessary, within reasonable parameters, to successfully attract,
retain and motivate optimally talented and experienced executives.

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Role of Our Compensation Committee

Our Compensation Committee evaluates and determines the levels and forms of individual compensation for our named executive officers.
Under the term of its charter, our Compensation Committee reviews and either approves, on behalf of the Company's board of directors, or recommends to the Company's board of directors for approval the
annual salaries and other compensation for our executive officers and individual unit incentive awards. The Compensation Committee develops and determines all components of executive officer
compensation, as well as provides assistance and recommendations to the Company's board of directors with respect to our incentive-compensation plans, equity-based plans, compensation policies and
practices and assists with the administration of our compensation and benefit plans. Messrs. Sheridan and Elrod serve on the Compensation Committee, which met one time during 2010.

Compensation Determination Process

Our Compensation Committee determines or recommends to the board of directors for determination the compensation of each of our named
executive officers and solicits input from our Chief Executive Officer in determining the compensation (particularly base salary and annual cash incentive payments) of our named executive officers.
The Compensation Committee does not retain compensation consultants to review our policies and procedures with respect to executive officer compensation

Effect of Accounting and Tax Treatment on Compensation Decisions

In the review and establishment of our compensation program, we consider the anticipated accounting and tax implications to us and our
named executive officers. While we consider the applicable accounting and tax treatment of alternative forms of equity compensation, these factors alone are not dispositive, and we also consider the
cash and non-cash impact of the programs and whether a program is consistent with our overall compensation philosophy and objectives.

Risk Considerations in Determining Compensation

We regularly assess our compensation policies and practices in response to current public and regulatory concern about the link between
incentive compensation and excessive risk taking by corporations. We have concluded that our compensation program does not motivate imprudent risk taking and any risks involved in compensation are not
reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, we believe that the following risk oversight and compensation design features guard against excessive
risk-taking:



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Elements of Compensation

We generally deliver executive compensation through a combination of annual base salary, annual cash incentive payments,
long-term equity incentives and other benefits and perquisites. We believe that this mix of elements is useful in achieving our primary compensation objectives. The payment of executive
compensation is determined by the Compensation Committee, and we do not target any particular form of compensation to encompass a majority of annual compensation provided to our executive officers.

Base Salary and Production Incentive Bonuses.Base salaries are intended to provide a fixed level of compensation sufficient to
attract and retain an
effective management team when considered in combination with other performance-based components of our executive compensation program. We believe that the base salary element is required to provide
our named executive officers with a stable income stream that is commensurate with their responsibilities and competitive market conditions. Annual base salaries are established on the basis of market
conditions at the time we hire an executive. Any subsequent modifications to annual base salaries are influenced by the performance of the executive, the increased/decreased duties of the executive
and by significant changes in market conditions. We do not align compensation for our executive officers with market pay percentile benchmarks. In addition, we are party to physician employment
agreements with our physician named executive officers, who provide significant clinical leadership in the Company beyond their executive management roles in their capacities as physicians. These
physician employment agreements provide for production and ancillary incentive bonus arrangements generally based on achievement of a certain level of collections or revenues by such individuals.

The
current base salaries described below were negotiated in connection with the Merger and are based in part on salaries paid prior to the Merger, except for the base salary for
Mr. Gillespie who joined the Company in March 2010. A summary of the base salary and production incentive bonus arrangements with our named executive officers is as
follows:



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Annual Cash Incentive Payments.In addition to annual base salaries, our Compensation Committee and Company's board of directors
generally award
annual cash incentive payments to our named executive officers. The annual cash incentive payments are intended to compensate our named executive officers for achieving operating performance
objectives in the current year that are important to our success.

Cash
incentive payments are awarded pursuant to individual bonus arrangements with each named executive officer for each fiscal year. This bonus arrangement is designed to motivate,
reward and acknowledge achievement by our employees by explicitly tying annual cash bonus payments to the achievement of annual performance targets based upon our consolidated financial results, as
adjusted based upon individual performance objectives. Our performance-based bonus plan is administered jointly by our Chief Financial Officer, who is responsible for monitoring the financial
performance measurements, and, in respect of our executive officers, our Chief Executive Officer, who is responsible for monitoring individual performance measurements for such individuals. Our
Compensation Committee approves all targets set by the Company's board of directors and payouts under our bonus arrangements. Executives are generally eligible for payments under our performance-based
bonus arrangement if they have earned such payments for the prior fiscal year.

Pursuant
to the terms of their executive employment agreements, certain named executive officers were eligible to earn a target annual cash incentive payment for fiscal year 2010 equal
to either a defined minimum amount or a percentage of that named executive officer's annual base salary, as further described below:



After
target bonus award amounts are established as a defined minimum amount or percentage of each named executive officer's base salary, the Company's board of directors establishes
overall Company performance targets as the next step in determining annual cash bonus payments. For fiscal

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year
2010, the Company's board of directors assigned a 60% weighting to PF Adjusted EBITDA performance measure, a 20% weighting to net debt performance measure to encourage management to focus more on
making long-term investments to grow our business, and a 20% weighting to achievement of specified objectives.

At
the on-target level of achievement for the PF Adjusted EBITDA performance metric, a named executive officer's bonus payment is equal to 100% of his or her target bonus
amount. At the maximum target level of achievement, a named executive officer's bonus payment is equal to 200% of his target bonus amount. At the minimum target level of achievement for PF Adjusted
EBITDA and Net Debt performance measures, a named executive officer's bonus payment is equal to 30% and 15%, respectively, of his target bonus amount. Bonus payments for actual results that fall
between the minimum and maximum target performance levels are adjusted on a linear basis.

The
following table illustrates our overall performance in relation to our targets for PF Adjusted EBITDA and net debt targets as well as achievement of specified objectives for fiscal
year 2010:

Type of Financial Performance Metric

Minimum
Target Level
of Achievement

On-Target
Level of
Achievement

Maximum
Target Level
of Achievement

Actual
Level of
Achievement

Level of
Target
AchievedPF Adjusted EBITDA

$
118.0

$
134.0

$
140.0

$
118.0

Minimum AchievedNet Debt

$
589.0

$
548.5

$


$
585.1

Minimum AchievedSpecified Objectives













Achieved


Our bonus plan for fiscal year 2011 is structured in the same manner as it was for fiscal year 2010, with financial performance being evaluated
against PF Adjusted EBITDA and net debt targets and achievement of specified objectives with weightings similar to those for fiscal year 2010. The timing of payments under the bonus plan for fiscal
year 2011 is expected to be consistent with that for fiscal year 2010.

Discretionary Cash Bonuses.In addition to the amounts describe above that were awarded under our Annual Cash Incentive Payments
in 2010, the
Company's board of directors awarded a discretionary cash bonus in fiscal year 2010 to Mr. Travis in the amount of $60,000 in recognition of his work related to our business development
activities and a relocation cash bonus in fiscal year 2010 to Mr. Gillespie in the amount of $60,000 associated with his employment with the Company. Although the Compensation Committee does
not anticipate that discretionary cash bonuses will be routinely awarded, it reserves the right to make such awards in the future as circumstances warrant.

Long-Term Equity Incentives.We believe that our long-term financial success is achieved in part through an ownership culture
that encourages our named executive officers to focus on our long-term performance through the use of equity-based compensation incentives.

The
capital structure of RT Investments consists of four different classes of limited liability company units: non-voting preferred equity units, Class A voting equity
units, Class B non-voting equity units and Class C non-voting equity units.

On
February 21, 2008, in connection with the Merger, we allowed our management to invest in RT Investments by exchanging all or a portion of their shares in the predecessor
Company's common stock into non-voting preferred equity units of RT Investments and Class A voting equity units of RT Investments and the number of non-voting preferred
equity units and Class A voting equity units of RT Investments held by our named executive officers is set forth in "Security Ownership of Certain Beneficial Owners and Management."

Also,
on February 21, 2008, in connection with the Merger, RT Investments adopted a new equity-based plan and authorized for issuance under the plan approximately 1,494,111 units
of limited liability company interests consisting of 526,262 Class B non-voting equity units and 967,849 Class C non-voting

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equity
units. The Class B non-voting equity units time vest over 48 months and the Class C non-voting equity units vest annually for 34 months based
on certain performance conditions and/or investment performance conditions being met or achieved and, in all cases, assuming continued employment. The performance conditions relate to the Company
achieving PF Adjusted EBITDA and net debt targets that were established in connection with the Merger. The vesting schedule for the units described above was designed to motivate our named executive
officers and other members of management to enhance our financial and operational performance and equity value
over the long-term as well as to promote executive retention. The following table presents the outstanding grants of Class B non-voting equity units and Class C
non-voting equity units to our named executive officers as of December 31, 2010:

Name

Class B Units

Class C UnitsDaniel E. Dosoretz, M.D., President and Chief Executive Officer


315,758


423,434Eduardo Fernandez, M.D., Ph.D., Senior Vice President, Physician Management


8,420


21,777Constantine A. Mantz, M.D., Chief Medical Officer


8,420


21,777Kerrin E. Gillespie, Senior Vice President and Chief Financial Officer


16,665


43,099Norton L. Travis, Executive Vice President and General Counsel


42,101


108,883Bryan J. Carey, former interim Chief Financial Officer








Deferred Compensation Plan.We offer our named executive officers the opportunity to participate in our
401(k) Profit Sharing Plan ("401(k) Plan"), which is a tax-qualified plan. Our discretionary contributions to the 401(k) Plan are based upon our annual financial performance.

Other Benefits.We also provide various other benefits to certain of our named executive officers that are intended to be part of
a competitive
compensation program. These benefits include:



We
believe that these benefits are comparable to those offered by other companies.

Severance and Change in Control Benefits

Our named executive officers are entitled to certain severance benefits as set forth in their respective employment agreements in the
event of termination of employment. We believe these benefits are an essential element of our compensation program for our named executive officers and assist us in recruiting and retaining talented
individuals. Our Compensation Committee believes that these benefits are valuable as they address the valid concern that it may be difficult for our named executive officers to find comparable
employment in a short period of time in the event of termination. The severance benefits may differ for named executive officers depending on the positions they hold and how difficult it might be or
how long it might take for them to find comparable employment. The employment agreements of our named executive officers do not contain change in control benefit provisions providing for payments but
the Management Unit Subscription Agreements for Class B non-voting equity units of RT Investments and Class C non-voting equity units of RT Investments to contain
certain acceleration provisions in the event of a sale of the Company.

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Summary Compensation Table

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our named executive
officers for services rendered to us during the prior three fiscal years.

Fiscal
Year

Salary ($)

Bonus ($)(1)

Stock
Awards

Non-Equity
Incentive Plan
Compensation ($)

Other Annual
Compensation ($)

Total ($)Daniel E. Dosoretz M.D.


2010


2,000,000


29,479





600,000


87,154
(2)

2,716,633President, Chief Executive


2009


2,000,000


22,937





600,000


116,536
(2)

2,739,473Officer and Director


2008


1,818,077


18,547





1,209,921


118,868
(2)

3,165,413Eduardo Fernandez, M.D., Ph.D.


2010


600,000


446,153








2,450
(3)

1,048,603Senior Vice President,


2009


580,769


496,131








2,450
(3)

1,079,351Physician Management


2008


500,000


590,639











1,090,639Constantine A. Mantz, MD


2010


840,000


637,479











1,477,479Chief Medical Officer


2009


689,346


809,095











1,498,4422008


650,000


956,365











1,606,365Norton L. Travis


2010


900,000


600,000





120,000


2,450
(3)

1,082,450Executive Vice President and


2009


900,000


180,000





120,000


2,450
(3)

1,202,450General Counsel


2008


726,923


133,016





211,984





1,071,923Kerrin Gillespie(4)


2010


307,692


60,000





76,000





443,692Chief Financial OfficerBryan J. Carey(5)


2010

















Former interim Chief


2009

















Financial Officer


(1)The
amounts set forth in this column represent discretionary bonuses approved by the Company's board of directors except for Dr. Dosoretz's 2010 and
2009 bonuses and Drs. Fernandez's and Mantz's 2010-2008 bonuses, which were based on production and ancillary bonus arrangements set forth in their respective physician employment
agreements.(2)These
amounts consist of: (i) compensation associated with the personal use of the Company's corporate aircraft in 2010, 2009 and 2008 in the amounts
of $84,575, $111,377 and $118,868, respectively; (ii) discretionary company profit-sharing contributions to our Profit Sharing 401(k) and Retirement Plan in 2010 and 2009 in the amounts of
$2,450 and $2,450, respectively; and (iii) life insurance premiums paid by the Company in 2010 and 2009 of $129 and $2,709.(3)These
amounts consist of discretionary company profit-sharing contributions to our Profit Sharing 401(k) and Retirement Plan in 2010 and 2009.(4)Mr. Gillespie's
employment commenced on March 15, 2010.(5)Mr. Carey
served as our interim Chief Financial Officer until March 14, 2010.


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Grants of Plan-Based Awards in Fiscal 2010

The following table provides supplemental information relating to grants of plan-based awards to our named executive
officers in fiscal 2010.

Payout Levels
Under Non-Equity Incentive
Plan Awards(1)Minimum
($)

Target
($)

Maximum
($)Daniel E. Dosoretz, M.D.


315,000


1,500,000


3,000,000Eduardo Fernandez, M.D., Ph.D.








Constantine A. Mantz, M.D.








Kerrin E. Gillespie


50,400


240,000


480,000Norton L. Travis


63,000


300,000


600,000Bryan J. Carey











(1)Thresholds
under our non-equity performance incentive bonus plan are determined annually by the Company's board of directors. Amounts represent
potential payouts relating to 2010 based on current based compensation. Amounts set forth in this table exclude the achievement of specified objectives, which if achieved could provide an additional
20% bonus based on a named executive officer's base salary.


Payout Levels Under Equity Incentive Plan Awards

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)Grant
Date(1)

Approval
Date(2)

Target
(#)

Unit
Class

Grant Date
Fair Value of
Equity
Awards($)(3)Daniel E. Dosoretz, M.D.

















Eduardo Fernandez, M.D., Ph.D.

















Constantine A. Mantz, M.D.

















Kerrin E. Gillespie


8/12/10


4/28/10


16,665


Class B


167,983


8/12/10


4/28/10


43,099


Class C


377,116


Norton L. Travis

















Bryan J. Carey




















(1)Date
on which the restricted units were transferred to the named executive officer.(2)Date
on which the Company's board of directors approved the equity award. The difference between the date these awards were approved and their grant date is
due to a lapse of time between the approval date and the time that award documents to evidence these awards were finalized and executed. See "Compensation Discussion and
AnalysisLong-Term Equity Incentives" for details regarding the grants and under which they vest.(3)Reflects
the grant date fair value computed in accordance with FAS123(R).


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Outstanding Equity Awards at 2010 Fiscal-Year End

The following table provides information regarding outstanding equity awards held by our named executive officers as of the end of
fiscal 2010.

Stock AwardsEquity Incentive Plan AwardsNumber of Shares or
Units of Stock
That Have Not
Vested (#)

Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)(c)

Number of Unearned
Shares, Units or Other
Rights That Have Not
Vested (#)

Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not
Vested ($)(c)Daniel E. Dosoretz, M.D.


157,879


Class B Units(a)


866,754


376,386


Class C Units(a)


1,836,762Eduardo Fernandez, M.D., Ph.D.


4,210


Class B Units(a)


23,113


19,357


Class C Units(a)


94,462Constantine A. Mantz, M.D.


4,210


Class B Units(a)


23,113


19,357


Class C Units(a)


94,462Kerrin E. Gillespie


16,665


Class B Units(b)


91,491


43,099


Class C Units(b)


210,323Norton L. Travis


21,051


Class B Units(a)


115,567


96,785


Class C Units(a)


472,310Bryan J. Carey





Class B Units(a)








Class C Units(a)





(a)Granted
on February 21, 2008 in connection with the initial grants under the RT Investments equity-based incentive plan. The vesting measurement
date, as set forth in the relevant subscription agreement, for these units is February 21, 2008. The Class B non-voting equity units of RT Investments time vest over
48 months and the Class C non-voting equity units of RT Investments vest annually for 34 months based on certain performance conditions and/or investment performance
conditions being met or achieved and, in all cases, assuming continued employment, as explained in more detail above, under "Compensation Discussion and AnalysisLong-Term
Equity Incentives."(b)Units
granted on April 28, 2010 with a vesting measurement date, as set forth in the relevant subscription agreement, for these units is
April 28, 2008. The Class B non-voting equity units of RT Investments time vest over 48 months and the Class C non-voting equity units of RT
Investments vest annually for 32 months based on certain performance conditions and/or investment performance conditions being met or achieved and, in all cases, assuming continued employment,
as explained in more detail above, under "Compensation Discussion and AnalysisLong-Term Equity Incentives."(c)Payout
value represents fair market value determined as of fiscal year-end, which is $5.49 per Class B non-voting equity unit
of RT Investments and $4.88 per Class C non-voting equity unit of RT Investments.


Option Exercises and Stock Vested

No options were issued, outstanding or exercised during fiscal 2010. For purposes of this disclosure item, no units were vested during
fiscal 2010 such that value was realized, as the Company could repurchase at cost the units of any executive who terminated his or her employment voluntarily during fiscal 2010. However, if an
executive officer were terminated without cause or resigned for good reason as of the last day of the fiscal year, he or she would be entitled to receive proceeds for a portion of his or her units.
See "Compensation Discussion and AnalysisTreatment of Equity Interests in Radiation Therapy Services Holdings, Inc." below.

Pension Benefits

The Company has no pension plans.

Nonqualified Deferred Compensation

The Company does not maintain any nonqualified deferred compensation plans.

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Employment Agreements

Executive and Physician Employment Agreements with Daniel E. Dosoretz, M.D.

Executive Employment Agreement.We have entered into an Executive Employment Agreement, dated effective as of February 21,
2008, with Daniel
E. Dosoretz, M.D., pursuant to which Dr. Dosoretz serves as our President and Chief Executive Officer. The employment term is a five-year term with automatic two-year
extensions thereafter unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement.

Dr. Dosoretz
is currently entitled to receive an annual base salary of $1,500,000 and entitled to such increases in his annual base salary as may be determined by the Company's
board of directors or compensation committee from time to time. With respect to the 2010 fiscal year and each full fiscal year during the employment term, Dr. Dosoretz is also eligible to earn
an annual cash incentive payment of not less than $1,500,000, the actual amount of the bonus to be determined by the Company's board of directors pursuant to a bonus plan based on factors including,
without limitation, the Company's achievement of PF Adjusted EBITDA and net debt targets. PF Adjusted EBITDA also includes certain adjustments, such as loss on extinguishment of debt,
non-cash impairment losses and gains/losses on disposal of assets, minority interest, equity-based compensation, employee severance and other costs, acquisition costs, management fee to
Vestar, adjustment related to sale-leaseback accounting, litigation expenses, non-cash rent expense and other adjustments.

Dr. Dosoretz
is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. Also,
Dr. Dosoretz shall be entitled to use the Company's corporate jet in a manner consistent with past practice, and in addition to use of the plane in connection with the conduct of business on
behalf of the Company, he is entitled to 200 hours of usage per year for personal use. We have also agreed to indemnify Dr. Dosoretz in connection with his capacity as our director and
officer.

If
Dr. Dosoretz resigns or otherwise voluntarily terminates his employment and the termination is not for good reason during the term of the agreement, he will be entitled to
receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date.
Dr. Dosoretz shall also receive any nonforfeitable benefits already earned and payable to him under the terms of any deferred compensation, incentive or other benefit plan maintained by the
Company, payable in accordance with the terms of the applicable plan (all amounts in this section are referred to as "Accrued Compensation").

If
Dr. Dosoretz's employment is terminated by us without "cause" (as defined in his employment agreement) or by Dr. Dosoretz for "good reason" (as defined in his employment
agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of Accrued
Compensation, the Company is obligated to make monthly payments to Dr. Dosoretz for a period of 24 months after his termination date. Each monthly payment shall be equal to
1/12th of the sum of (i) Dr. Dosoretz's annual base salary, as in effect at the termination date, plus (ii) the amount equal to the sum of his
bonuses for the three prior years divided by three. Dr. Dosoretz shall also be permitted to continue participation at the Company's expense in all benefit and insurance plans, coverage and
programs for one year in which he was participating prior to the termination date.

If
Dr. Dosoretz's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other
disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. If Dr. Dosoretz dies
during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued

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Compensation
and (ii) the board of director's good faith estimated annual cash incentive payment for the fiscal year in which the death occurs (on a pro rate basis for the number whole or
partial months in the fiscal year in which the death occurs through the date of death) based on the performance of the Company at the time of his death. In addition, the death benefits payable
pursuant to any retirement, deferred compensation or other employee benefit plan maintained by the Company shall be paid to the beneficiary designated by Dr. Dosoretz in accordance with the
terms of the applicable plan.

Dr. Dosoretz'
Executive Employment Agreement also provides that if his Physician Employment Agreement is terminated for any reason, but his Executive Employment Agreement is not,
Dr. Dosoretz' annual base salary under the Executive Employment Agreement shall be increased to $2,000,000.

Dr. Dosoretz
is also subject to a covenant not to disclose our confidential information during his employment term, and at all times during his employment term and ending on the
later of (i) the fifth anniversary of the Executive Employment Agreement and (ii) three years after his termination date,
Dr. Dosoretz covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having
a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If
Dr. Dosoretz breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions
and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to
injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

Physician Employment Agreement.In addition, we have entered into a Physician Employment Agreement, dated as of February 21,
 2008, with
Dr. Dosoretz, pursuant to which Dr. Dosoretz shall provide medical services as a radiation oncologist at such locations as are mutually agreed. The employment term is a
five-year term with automatic two-year extensions thereafter unless either party provides the other 120 days' prior written notice of its intention not to renew the
employment agreement. For services rendered under the Physician Employment Agreement, Dr. Dosoretz shall receive an annual base salary of $500,000, and the Company shall be obligated to pay all
medical malpractice insurance premiums during employment and any "tail" coverage premiums after termination or expiration of this agreement.

Dr. Dosoretz
may voluntarily terminate this agreement prior to the end of the term with or without giving notice and the Company may terminate this agreement without cause at any
time. The Company may terminate the agreement due to a "disability" (as defined in the agreement) and the agreement will automatically terminate upon Dr. Dosoretz's death. If the Executive
Employment Agreement is terminated for any reason, the Company shall have the right, but not the obligation to terminate the Physician Employment Agreement, without any liability or obligation to him,
other than any Accrued Compensation. If the Executive Employment Agreement is terminated for any reason, but the Physician Employment Agreement is not terminated, the Physician Employment Agreement
shall remain in full force and effect, except that (i) Dr. Dosoretz's base salary shall be increased to $1,500,000; (ii) Dr. Dosoretz shall be obligated to work five days
per week rather than up to two days per week as currently contemplated under the Physician Employment Agreement, and (iii) Dr. Dosoretz shall be eligible to participate in such other
bonus and benefit plans afforded other senior physicians of the Company and receive comparable fringe benefits to such other senior physicians.

Dr. Dosoretz
is also subject to covenants not to compete under the Physician Employment Agreement whereby in the event of the termination of this agreement for any reason,
Dr. Dosoretz agrees, with certain exceptions, not to directly or indirectly engage in the practice of radiation therapy

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or
oncology, or otherwise compete with us (as defined in the agreement) for a period beginning on the date of the Physician Employment Agreement and ending on the later of (i) the fifth
anniversary of the Physician Employment Agreement and (ii) three years after his termination date.

Executive Employment Agreement with Eduardo Fernandez, M.D., Ph.D.

We have entered into a physician employment agreement, dated effective as of January 1, 2002 and as amended, with
Dr. Fernandez, pursuant to which Dr. Fernandez serves as our Senior Vice President, Director of Regional Operations. The employment term is a five-year term with automatic
one-year extensions thereafter unless either party provides the other 90 days' prior written notice of its intention not to renew the employment agreement. Dr. Fernandez is
currently entitled to receive an annual base salary of $600,000. Further, during Dr. Fernandez's employment, the Company will provide basic hospital and major medical insurance coverage to him
to the extent obtainable with coverage amounts as the Company shall in its sole discretion determine and subject to the limitations and restrictions of the Company's group health plan.

In
addition, Dr. Fernandez is entitled to receive an annual production incentive bonus equal to the greater of $100,000 or 1.75% of the net collections with respect to the
Company's Broward and Miami-Dade County, Florida radiation oncology centers.

Dr. Fernandez
and the Company may terminate this agreement prior to the end of the term by giving 90 days notice. If an event of termination occurs for any reason,
Dr. Fernandez shall be entitled to (i) receive his Accrued Compensation determined as of the effective date of termination and not theretofore paid and (ii) receive or continue to
receive benefits due or payable under any pension or profit sharing plan and any disability, medical and life insurance plans maintained by the Company.

If
Dr. Fernandez's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation, salary
continuation for three months and any other disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided
by the Company. If Dr. Fernandez dies during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to his Accrued Compensation and salary continuation
for two months. In addition, the death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan maintained by the Company shall be paid to the beneficiary
designated by Dr. Fernandez in accordance with the terms of the applicable plan.

Dr. Fernandez
is also subject to a covenant not to disclose our confidential information during his employment term and at all times during his employment term and ending two
years after his termination date, Dr. Fernandez agrees (i) not to practice radiation oncology at any center or hospital in Broward or Miami-Dade County, Florida or any joint
venture which includes the Company or any of its subsidiaries or affiliates, and (ii) not to solicit or hire any of our employees.

Physician Employment Agreement with Constantine A. Mantz, M.D.

We have entered into a physician employment agreement with Constantine A. Mantz, dated effective as of July 1, 2003 and as
amended, pursuant to which Dr. Mantz serves as our Senior Vice President of Clinical Operations and provides medical services as a radiation oncologist. The employment term commenced on
July 1, 2003 and is a five-year term with automatic one-year extensions thereafter unless either party provides the other 90 days' prior written notice of its
intention not to renew the employment agreement. Dr. Mantz is currently entitled to receive an annual base salary of $840,000 and the Company shall be obligated to pay all medical malpractice
insurance premiums during employment and any "tail" coverage premiums after termination or expiration of this agreement if Dr. Mantz's employment is terminated without cause, or due to death or
disability. Further, during Dr. Mantz's employment, the Company will provide basic hospital and major medical

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insurance
coverage to him to the extent obtainable with coverage amounts as the Company shall in its sole discretion determine and subject to the limitations and restrictions of the Company's group
health plan.

In
addition, Dr. Mantz is entitled to receive an annual production incentive bonus of up to $1,000,000 based on 22.5% of the collections of professional fees (as defined) greater
than $1,025,000 with respect to the Company's Lee and Monroe County, Florida radiation oncology centers and certain other ancillary services provided in the Lee County, Florida local market.

Dr. Mantz
and the Company may terminate this agreement prior to the end of the term by giving 90 days notice. If an event of termination occurs for any reason,
Dr. Mantz shall be entitled to (i) receive his Accrued Compensation determined as of the effective date of termination and not theretofore paid and (ii) receive or continue to
receive benefits due or payable under any pension or profit sharing plan and any disability, medical and life insurance plans maintained by the Company.

Dr. Mantz
is also subject to a covenant not to disclose our confidential information during his employment term and at all times during his employment term and ending two years
after his termination date, Dr. Mantz is agrees (i) not to practice radiation oncology at any center in Lee, Collier or Charlotte County, Florida or at those hospitals in Lee, Collier or
Charlotte County, Florida where physicians employed by the Company or an affiliate of the Company are, at the time of such termination, practicing radiation oncology, and (ii) not to solicit or
hire any of our employees.

Executive Employment Agreement with Kerrin E. Gillespie

We have entered into an executive employment agreement, dated effective as of February 8, 2010, with Kerrin E. Gillespie,
pursuant to which Mr. Gillespie serves as Senior Vice President and Chief Financial Officer. The employment term is a three-year term beginning March 15, 2010 with automatic
two-year extensions thereafter unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement.

Mr. Gillespie
is currently entitled to receive an annual base salary of $400,000 and entitled to such increases in his annual base salary as may be determined by the Company's
board of directors or compensation committee from time to time. With respect to the 2010 fiscal year and each full fiscal year during the employment term, Gillespie is also eligible to earn an annual
cash incentive payment of up to 60% of his base salary, the actual amount of the bonus to be determined by the Company's board of directors pursuant to a bonus plan based on factors including, without
limitation, the Company's PF Adjusted EBITDA and net debt targets. Mr. Gillespie is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally
made available to our other officers. We have also agreed to indemnify Mr. Gillespie in connection with his capacity as an officer.

If
Mr. Gillespie's employment is terminated by us during the term of the agreement, he is entitled to his Accrued Compensation.

If
Mr. Gillespie's employment is terminated by us without "cause" (as defined in his employment agreement) or by Mr. Gillespie for "good reason" (as defined in his
employment agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of the
Accrued Compensation, the Company is obligated to make monthly payments to Mr. Gillespie for a period of 18 months after his termination date. Each monthly payment shall be equal to
1/12th of Mr. Gillespie's annual base salary as in effect at the termination date; provided that payments that otherwise would have been made during the
60 day period after the termination date shall be made on the first payroll period after the 60th day following the termination date and shall include payment of any amounts that would
have otherwise be due prior thereto.

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If
Mr. Gillespie resigns or voluntarily terminates the agreement without "good reason", he shall be entitled to receive his Accrued Compensation.

If
Mr. Gillespie's employment terminates due to "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other
disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. If Mr. Gillespie dies
during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the estimated annual cash
incentive payment for the fiscal year in which the death occurs (on a pro rate basis for the number whole or partial months in the fiscal year in which the death occurs through the date of death). In
addition, the death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan maintained by the Company shall be paid to the beneficiary designated by
Mr. Gillespie in accordance with the terms of the applicable plan.

Mr. Gillespie
is also subject to a covenant not to disclose our confidential information during his employment term, and at all times during his employment term and ending
18 months after his termination date, Mr. Gillespie covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient,
referral source, supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or
any of our directors, officers or employees. If Mr. Gillespie breaches or threatens to breach these covenants, the Company shall be entitled to temporary and injunctive relief, including
temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the State of Florida having subject
matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

Executive Employment Agreement with Norton L. Travis

We have entered into an executive employment agreement, dated effective as of February 21, 2008, with Norton L. Travis, pursuant
to which Mr. Travis serves as our Executive Vice President and General Counsel. The employment term is a five-year term with automatic two-year extensions thereafter
unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement. On February 3, 2011, the employment agreement was amended to
provide for a termination date of February 3, 2016 with automatic extensions thereafter unless either party provides the other 120 days prior written notice not to renew the agreement.

Mr. Travis
is currently entitled to receive an annual base salary of $900,000 and entitled to such increases in his annual base salary as may be determined by the Company's board
of directors or compensation committee from time to time. With respect to the 2010 fiscal year and each full fiscal year during the employment term, Mr. Travis is also eligible to earn an
annual cash incentive payment of not less than $300,000, (as the Company's board of directors may, but not be obligated to adjust
from time to time, the "Travis Target Bonus"), the actual amount of the bonus to be determined by the Company's board of directors pursuant to a bonus plan based on factors including, without
limitation, the Company's PF Adjusted EBITDA and net debt targets. Mr. Travis is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally
made available to our other officers. We have also agreed to indemnify Mr. Travis in connection with his capacity as an officer.

If
Mr. Travis' employment is terminated by us during the term of the agreement, he will be entitled to receive his Accrued Compensation.

If
Mr. Travis' employment is terminated by us without "cause" (as defined in his employment agreement) or by Mr. Travis for "good reason" (as defined in his employment
agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive

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covenants
described below, and in addition to the payment of the Accrued Compensation, the Company is obligated to make monthly payments to Mr. Travis for a period of 24 months after his
termination date. Each monthly payment shall be equal to 1/12th of the sum of (i) Mr. Travis' annual base salary, as in effect at the termination
date, plus (ii) the Travis Target Bonus for the year immediately prior to the year during which termination occurs.

If
Mr. Travis resigns or voluntarily terminates the agreement without "good reason", he will be entitled to receive his Accrued Compensation.

If
Mr. Travis' employment terminates due to his "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other
disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. If Mr. Travis dies
during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the estimated annual cash
incentive payment for the fiscal year in which the death occurs (on a pro rate basis for the number whole or partial months in the fiscal year in which the death occurs through the date of death). In
addition, the death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan maintained by the Company shall be paid to the beneficiary designated by
Mr. Travis in accordance with the terms of the applicable plan.

Mr. Travis
is also subject to a covenant not to disclose our confidential information during his employment term, and at all times during his employment term and ending three
years after his termination date, Mr. Travis covenants not to compete with us, not to interfere or disrupt the relationships we have with any joint venture party, any patient, referral source,
supplier or other person having a business relationship with the Company, not to solicit or hire any of our employees and not to publish or make any disparaging statements about us or any of our
directors, officers or employees. If Mr. Travis breaches or threatens to breach these covenants, the Company shall be entitled to temporary
and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court in the
State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's right to claims and recover damages.

Executive Employment Agreement with Bryan J. Carey

We did not enter into an employment agreement with Mr. Carey and he did not receive any remuneration in conjunction with his
capacity of interim Chief Financial Officer. Mr. Carey did not participate in the annual cash performance incentive bonus plan and did not receive any discretionary or other bonuses.

Potential Payments upon Termination

The following disclosure indicates the potential payments and benefits to which our named executive officers would be entitled upon
termination of employment. All calculations are based on an assumed termination date of December 31, 2010. The disclosure below does not include payments and benefits to the extent they are
provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the named executive officers. Potential payments upon
termination attributable to Mr. Watson are not presented below since he did not receive any such payments as a result of his voluntarily termination of employment with the Company on
August 31, 2009. Potential payments upon termination attributable to Mr. Carey are not presented below since we did not enter into an employment agreement with Mr. Carey and he
was not otherwise entitled to such termination payments or benefits.

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Potential Payments to Each Named Executive Officer

Daniel E. Dosoretz, M.D., President and Chief Executive Officer(1)

Event

Cash
Severance
Lump
Payment
($)

Cash
Severance
Payment
Over Two
Years
($)

Non-Equity
Incentive Plan
Compensation
($)

Medical &
Dental
Healthcare
Benefits
($)

Total
($)For cause or resignation without good reason














Involuntary termination without cause, resignation for good reason





4,606,614


600,000


18,000


5,224,614Voluntary resignation














Disability or death(2)


600,000











600,000


(1)The
potential payments and benefits upon termination of employment described above are pursuant to the terms of Dr. Dosoretz's Executive Employment
Agreement.(2)The
executive or beneficiary shall be entitled to (a) disability benefits payable pursuant to any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company and (b) death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan
maintained by the Company in accordance with the terms of the applicable plan or plans.


Eduardo Fernandez, M.D., Ph.D., Senior Vice President, Director of Regional Operations

Event

Cash
Severance
Lump
Payment
($)

Cash
Severance
Payment
Over One
Year
($)

Non-Equity
Incentive Plan
Compensation
($)

Medical &
Dental
Healthcare
Benefits
($)

Total
($)For cause or resignation without good reason














Involuntary termination without cause, resignation for good reason














Voluntary resignation














Disability or death(1)(2)





150,000








150,000


(1)Cash
severance payments over one year due to disability or death shall represent salary continuation for three months and two months, respectively, which
amounts are $150,000 and $100,000, respectively.(2)The
executive or beneficiary shall be entitled to (a) disability benefits payable pursuant to any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company and (b) death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan
maintained by the Company in accordance with the terms of the applicable plan or plans.


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Constantine A. Mantz, M.D., Senior Vice President of Clinical Operations

Event

Cash
Severance
Lump
Payment
($)

Cash
Severance
Payment
($)

Non-Equity
Incentive Plan
Compensation
($)

Medical &
Dental
Healthcare
Benefits
($)

Total
($)For cause or resignation without good reason














Involuntary termination without cause, resignation for good reason














Voluntary resignation














Disability or death(1)

















(1)The
executive or beneficiary shall be entitled to (a) disability benefits payable pursuant to any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company and (b) death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan
maintained by the Company in accordance with the terms of the applicable plan or plans.


Kerrin E. Gillespie, Senior Vice President and Chief Financial Officer(1)

Event

Cash
Severance
Lump
Payment
($)

Cash
Severance
Payment
Over 18
Months
($)

Non-Equity
Incentive Plan
Compensation
($)

Medical &
Dental
Healthcare
Benefits
($)

Total
($)For cause or resignation without good reason














Involuntary termination without cause, resignation for good reason





600,000


96,000





696,000Voluntary resignation














Disability or death(2)


96,000











96,000


(1)Mr. Gillespie's
employment commenced on March 15, 2010.(2)The
executive or beneficiary shall be entitled to (a) disability benefits payable pursuant to any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company and (b) death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan
maintained by the Company in accordance with the terms of the applicable plan or plans.


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Norton L. Travis, Executive Vice President and General Counsel

Event

Cash
Severance
Lump
Payment
($)

Cash
Severance
Payment
Over Two
Years
($)

Non-Equity
Incentive Plan
Compensation
($)

Medical &
Dental
Healthcare
Benefits
($)

Total
($)For cause or resignation without good reason














Involuntary termination without cause, resignation for good reason





2,400,000


120,000





2,520,000Voluntary resignation














Disability or death(1)


120,000











120,000


(1)The
executive or beneficiary shall be entitled to (a) disability benefits payable pursuant to any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company and (b) death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan
maintained by the Company in accordance with the terms of the applicable plan or plans.


Treatment of Equity Interests in RT Investments

Upon the termination of the executive's employment with the Company for any reason whatsoever, (a) all unvested Class B
non-voting equity units of RT Investments held by the executive as of the termination date shall expire and be immediately forfeited and canceled in their entirety as of the termination
date and (b) all vested Class B non-voting equity units of RT Investments held by the executive shall remain outstanding, except that if executive's employment is terminated
by the Company for cause at any time or by the executive without good reason during the two year period following the grant date, or if executive engages in any non-compete activities
prohibited under his employment agreement and as further defined in the Management Unit Subscription Agreement for Class B non-voting equity units of RT Investments and
Class C non-voting equity units of RT Investments during the time that such activities are prohibited, then all Class B Units (whether vested or unvested) and all
Class C non-voting equity units of RT Investments
(whether vested or unvested) held by such terminated executive shall expire and be immediately forfeited and canceled in their entirety as of the earlier of the termination date or the date executive
engages in such prohibited activities.

Upon
the termination of the executive's employment with the Company for any reason whatsoever, the Class C non-voting equity units of RT Investments held by the
executive shall be treated as follows:



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Notwithstanding
the above, if (i) the executive's employment with the Company is terminated for any reason other than (A) by the Company for cause or (B) by the
executive without good reason during the two year period subsequent to the grant date of the Class C non-voting equity units of RT Investments and (ii) a sale of the Company
occurs within six months following the termination date that results in Vestar receiving proceeds from such sale together with any distributions made at the same time or as or prior to the
consummation of the sale, that would have resulted in the executive
being entitled to retain a greater number of Class C non-voting equity units of RT Investments if the executive had remained employed by the Company through the date of the sale of
the Company that the number of Units retained by the executive pursuant to the foregoing provisions, then (x) such additional Class C non-voting equity units of RT
Investments shall be deemed to remain outstanding as of the time of the consummation of the sale of the Company, (y) the amount of any distributions by the Company that the executive shall be
entitled to receive with respect to the Class C non-voting equity units of RT Investments held by the executive shall be governed by the applicable section of the Amended and
Restated Limited Liability Company Agreement of Radiation Therapy Investments, LLC and give effect to such additional Class C non-voting equity units of RT Investments , and
(z) the amount of the proceeds that the executive shall be entitled to receive with respect to the Class C non-voting equity units of RT Investments held by the executive in
such sale of the Company shall be governed by the applicable sections of the Amended and Restated Securityholders Agreement described below. See "Item 13. Certain Relationships and Related
Transactions, and Director Independence."

Further,
if the executive's employment with the Company terminates for any reasons set forth in clauses (i), (ii) or (iii) below prior to the Company's initial
public offering (in any event excluding termination of employment by retirement prior the Company's initial public offering), the Company shall have the right and option to purchase for a period of
90 days following the termination date, and each member of the executive group shall be required to sell to the Company, any of all of such Units then held by such member of the executive
group, at a price per unit equal to fair market value, as defined in the Management Unit Subscription Agreement (measured as of the later of (x) the termination date and (y) the six
month anniversary of the grant date) of such vested Class B non-voting equity unit or vested Class C non-voting equity unit, as applicable provided that the
Company's board of directors shall have the right, in its sole discretion, to increase the purchase price as set forth above if the executive's active employment with the Company is terminated due to:
(i) the disability or death of the executive; (ii) (A) by the Company without cause or (B) by the executive with good reason; or (iii) any other reason not set forth
in (i) or (ii) above after the second anniversary of the grant date.

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Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review
and discussion, the Compensation Committee recommended to the Company's board of directors that the Compensation Discussion and Analysis be included in this Annual Report on
Form 10-K.

Submitted
by the Compensation Committee of the Company's board of directors:

James L. Elrod, Jr. (Chair)
Howard M. Sheridan, M.D.


Directors Compensation

The following tables provide information concerning certain of our employees who are not named executive officers but who serve as a
director on the Company's board of directors. We do not provide any remuneration to the members of the Company's board of directors other than to the directors listed below and the compensatory
arrangements with certain of our directors designated as a named executive office other than for director services. See "Item 11. Executive Compensation" and "Item 13. Certain
Relationships and Related Transactions, and Director Independence." Shares and stock options are not included in this table because none were issued during fiscal 2010 and none were outstanding at
fiscal year-end. Further, changes in pension value and nonqualified deferred compensation earnings are also not included in this table because the Company does not maintain any pension
plans or nonqualified deferred compensation plans.

Fees Earned or
Paid in Cash ($)

Stock
Award ($)

Non-Equity
Incentive Plan
Compensation ($)(1)

All Other
Annual
Compensation ($)

Total ($)Howard M. Sheridan, M.D.











380,000
(2)

380,000James H. Rubenstein, M.D.








160,000


648,710
(3)

808,710


(1)Dr. Rubenstein
participates in the Company's annual cash incentive bonus award plan. See "Executive Compensation." For fiscal year 2010,
Dr. Rubenstein was eligible to earn an annual cash performance incentive bonus award with a target bonus amount not less than $400,000 pursuant to a bonus plan based on factors including,
without limitation, the Company's achievement of PF Adjusted EBITDA and net debt targets. The relative weight of each factor in determining the cash performance incentive bonus award was determined by
the Company's board of directors. PF Adjusted EBITDA also includes certain adjustments, such as loss on extinguishment of debt, non-cash impairment losses and gains/losses on disposal of
assets, minority interest, equity-based compensation, employee severance and other costs, acquisition costs, management fee to Vestar, adjustment related to sale-leaseback accounting,
litigation expenses, non-cash rent expense and other adjustments. For fiscal year 2010, the Company's board of directors assigned a 60% weighting to PF Adjusted EBITDA performance measure,
a 20% weighting to net debt performance measure to encourage management to focus more on making long-term investments to grow our business, and a 20% weighting to achievement of specified
objectives. The specified objectives were achieved in 2010 in addition to the PF Adjusted EBITDA and net debt targets at the minimum levels.(2)We
entered into an Executive Employment Agreement with Dr. Sheridan in connection with the Merger under which Dr. Sheridan provides corporate
executive services and support in such areas as strategic planning, mergers and acquisitions, and physician, payor and hospital relationships. This agreement provides for a base salary of $300,000 and
a performance incentive bonus at the


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discretion
of the Company's board of directors, or it's Compensation Committee. Dr. Sheridan received a discretionary bonus of $80,000 in fiscal 2010. (3)We
entered into an Executive Employment Agreement with Dr. Rubenstein in conjunction with the Merger in which Dr. Rubenstein serves as
Secretary and Medical Director. This agreement provides for a base salary of $400,000 and participation in the annual cash performance incentive bonus award plan as described above. In addition, we
entered into a Physician Employment Agreement with Dr. Rubenstein also in connection with the Merger which provided for an annual base salary of $300,000. The Physician Employment Agreement was
amended in February 2010, to reduce the annual base salary to $200,000. In 2010, Dr. Rubenstein received $29,479 pursuant to a production and ancillary bonus arrangement and $2,450 with respect
to discretionary company profit-sharing contributions to our Profit Sharing 401(k) and Retirement Plan.


In
the event that either the Physician Employment Agreement or Executive Employment Agreement is terminated for any reason, Dr. Rubenstein's annual base salary under the respective continuing
agreement shall be increased to $700,000.

Grants of Plan-Based Awards in Fiscal 2010

The following table provides supplemental information relating to grants of plan-based awards to our directors in fiscal
2010.

Payout Levels
Under Non-Equity Incentive
Plan Awards

Payout Levels
Under Equity Incentive
Plan Awards

All Other
Stock Awards:
Number of
Shares of
Stock or
Units (#)Grant
Date(1)

Minimum
($)

Target
($)

Maximum
($)

Minimum
($)

Target
($)

Maximum
($)Howard M. Sheridan, M.D.























James H. Rubenstein, M.D.





84,000


400,000


800,000














(1)Thresholds
under non-equity performance incentive bonus plan are determined annually by the Company's board of directors. Amounts set forth in
this table exclude the achievement of specified objectives, which if achieved could provide an additional 20% bonus based on the director's base salary.


Outstanding Equity Awards at 2010 Fiscal-Year End

The following table provides information regarding outstanding equity awards held by our directors as of the end of fiscal 2010. Shares
and stock options are not included in this table because none were issued during fiscal 2010 and none were outstanding at fiscal year-end.

Stock AwardsEquity Incentive Plan AwardsNumber of Shares or
Units of Stock That Have
Not Vested (#)

Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)(b)

Number of Unearned
Shares, Units or
Other Rights That Have
Not Vested (#)

Market or
Payout Value
of Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($)(b)Howard M. Sheridan, M.D.


2,105


Class B Units(a
)

11,557


9,678


Class C Units(a
)

47,231James H. Rubenstein, M.D.


6,315


Class B Units(a
)

34,670


29,035


Class C Units(a
)

141,693


(a)Granted
on February 21, 2008 in connection with the initial grants under the Company's equity-based incentive plan. The vesting measurement date, as
set forth in the relevant subscription agreement, for these units is February 21, 2008. The Class B non-voting equity units of RT Investments vest over 48 months and
the Class C non-voting equity units of RT Investments vest annually for 34 months based on certain performance conditions and/or market conditions being met or


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achieved
and, in all cases, assuming continued employment, as explained in more detail above, under "Compensation Discussion and AnalysisLong-Term Equity Incentives." (b)Payout
value represents fair market value determined as of fiscal year-end, which is $5.49 per Class B non-voting equity unit
of RT Investments and $4.88 per Class C non-voting equity unit of RT Investments.


As of December 31, 2010, each director held the following total numbers of units of RT Investments (including those not set forth above
because they are vested):



Option Exercises and Stock Vested

No options were issued, outstanding or exercised during fiscal 2010. For purposes of this disclosure item, no units were vested during
fiscal 2010 such that value was realized, as the Company could repurchase at cost the units of any executive or director who terminated his or her employment voluntarily during fiscal 2010. However,
if an executive or director were terminated without cause or resigned for good reason as of the last day of the fiscal year, he or she would be entitled to receive proceeds for a portion of his or her
units. See "Compensation Discussion and AnalysisTreatment of Equity Interests in Radiation Therapy Services Holdings, Inc."

Employment Agreements

Executive and Physician Employment Agreements with James H. Rubenstein, M.D.

Executive Employment Agreement

We have entered into an Executive Employment Agreement, dated effective as of February 21, 2008, with James H. Rubenstein, M.D.,
pursuant to which Dr. Rubenstein serves as our Secretary and Medical Director. The employment term is a three-year term with automatic two-year extensions thereafter
unless either party provides the other 120 days' prior written notice of its intention not to renew the employment agreement.

Dr. Rubenstein
is currently entitled to receive an annual base salary of $400,000 and entitled to such increases in his annual base salary as may be determined by the Company's
board of directors or compensation committee from time to time. With respect to the 2010 fiscal year and each full fiscal year during the employment term, Dr. Rubenstein is also eligible to
earn an annual cash incentive
payment of not less than $400,000, (as the Company's board of directors may, but not be obligated to adjust from time to time, the "Rubenstein Target Bonus"), the actual amount of the bonus to be
determined by the Company's board of directors pursuant to a bonus plan based on factors including, without limitation, the Company's achievement of PF Adjusted EBITDA and net debt targets.

Dr. Rubenstein
is also entitled to participate in our employee benefit plans on the same basis as those benefits are generally made available to our other officers. We have also
agreed to indemnify Dr. Rubenstein in connection with his capacity as a director.

If
Dr. Rubenstein resigns or otherwise voluntarily terminates his employment and the termination is not for good reason during the term of the agreement, he will be entitled to
receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date.
Dr. Rubenstein shall also receive any Accrued Compensation.

If
Dr. Rubenstein's employment is terminated by us without "cause" (as defined in his employment agreement) or by Dr. Rubenstein for "good reason" (as defined in his
employment agreement), subject

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to
his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of Accrued Compensation, the Company is
obligated to make monthly payments to Dr. Rubenstein for a period of 24 months after his termination date. Each monthly payment shall be equal to
1/12th of the sum of (i) Dr. Rubenstein's annual base salary, as in effect at the termination date, plus (ii) the Rubenstein Target Bonus for
the year immediately prior to the year during which termination occurs. Dr. Rubenstein shall also be permitted to continue participation at the Company's expense in all benefit and insurance
plans, coverage and programs for one year in which he was participating prior to the termination date.

If
Dr. Rubenstein's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other
disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. If Dr. Rubenstein dies
during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the board of director's good
faith estimated annual cash incentive payment for the fiscal year in which the death occurs (on a pro rate basis for the number whole or partial months in the fiscal year in which the death occurs
through the date of death) based on the performance of the Company at the time of his death. In addition, the death benefits payable pursuant to any retirement, deferred compensation or other employee
benefit plan maintained by the Company shall be paid to the beneficiary designated by Dr. Rubenstein in accordance with the terms of the applicable plan.

Dr. Rubenstein'
Executive Employment Agreement also provides that if his Physician Employment Agreement is terminated for any reason, but his Executive Employment Agreement is
not, Dr. Rubenstein' annual base salary under the Executive Employment Agreement shall be increased to $700,000.

Dr. Rubenstein
is also subject to a covenant not to disclose our confidential information during his employment term, and at all times during his employment term and ending on the
later of (i) the fifth anniversary of the Executive Employment Agreement and (ii) three years after his termination date, Dr. Rubenstein covenants not to compete with us, not to
interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or
hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Dr. Rubenstein breaches or threatens to breach these
covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in
any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's
right to claims and recover damages.

Physician Employment Agreement

In addition, we have entered into a Physician Employment Agreement, dated as of February 21, 2008 and as amended, with
Dr. Rubenstein, pursuant to which Dr. Rubenstein shall provide medical services as a radiation oncologist at such locations as are mutually agreed. The employment term is a
three-year term with automatic two-year extensions thereafter unless either party provides the other 120 days' prior written notice of its intention not to renew the
employment agreement. For services rendered under the Physician Employment Agreement, Dr. Rubenstein shall receive an annual base salary of $200,000, and the Company shall be obligated to pay
all medical malpractice insurance premiums during employment and any "tail" coverage premiums after termination or expiration of this agreement.

Dr. Rubenstein
may voluntarily terminate this agreement prior to the end of the term with or without giving notice and the Company may terminate this agreement without cause at
any time. The

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Company
may terminate the agreement due to a "disability" (as defined in the agreement) and the agreement will automatically terminate upon Dr. Rubenstein's death. If the Executive Employment
Agreement is terminated for any reason, the Company shall have the right, but not the obligation to terminate the Physician Employment Agreement, without any liability or obligation to him, other than
any Accrued Compensation. If the Executive Employment Agreement is terminated for any reason, but the Physician Employment Agreement is not terminated, the Physician Employment Agreement shall
remain in full force and effect, except that (i) Dr. Rubenstein's base salary shall be increased to $700,000; (ii) Dr. Rubenstein shall be obligated to work five days per
week rather than up to two days per week as currently contemplated under the Physician Employment Agreement, and (iii) Dr. Rubenstein shall be eligible to participate in such other bonus
and benefit plans afforded other senior physicians of the Company and receive comparable fringe benefits to such other senior physicians.

Dr. Rubenstein
is also subject to covenants not to compete under the Physician Employment Agreement whereby in the event of the termination of this agreement for any reason,
Dr. Rubenstein agrees not to directly or indirectly engage in the practice of radiation therapy or oncology, or otherwise compete with us (as defined in the agreement) for a period beginning on
the date of the Physician Employment Agreement and ending on the later of (i) the fifth anniversary of the Physician Employment Agreement and (ii) three years after his termination date.

Executive Employment Agreements with Howard M. Sheridan, M.D.

Executive Employment Agreement

We have entered into an Executive Employment Agreement, dated effective as of February 21, 2008, with James H. Sheridan, M.D.,
pursuant to which Dr. Sheridan provides corporate executive services and support in such areas as strategic planning, mergers and acquisitions, and physician, payor and hospital relationships.
The employment term is a three-year term with automatic two-year extensions thereafter unless either party provides the other 120 days' prior written notice of its
intention not to renew the employment agreement.

Dr. Sheridan
is currently entitled to receive an annual base salary of $300,000 and entitled to such increases in his annual base salary as may be determined by the Company's
board of directors or compensation committee from time to time. With respect to the 2010 fiscal year and each full fiscal year during the employment term, Dr. Sheridan is eligible to receive a
performance incentive bonus at the discretion of the Company's board of directors, or it's Compensation Committee.

Dr. Sheridan
is also entitled to use the Company's corporate jet in connection with the conduct of business on behalf of the Company and he is entitled to 25 hours of usage
per year for personal use. We have also agreed to indemnify Dr. Sheridan in connection with his capacity as a director.

If
Dr. Sheridan resigns or otherwise voluntarily terminates his employment and the termination is not for good reason during the term of the agreement, he will be entitled to
receive his base salary accrued and unpaid through the date of termination and his earned and unpaid annual cash incentive payment, if any, for the fiscal year prior to the termination date.
Dr. Sheridan shall also receive any Accrued Compensation.

If
Dr. Sheridan's employment is terminated by us without "cause" (as defined in his employment agreement) or by Dr. Sheridan for "good reason" (as defined in his employment
agreement), subject to his execution of a release of claims against us and his continued compliance with the restrictive covenants described below, and in addition to the payment of Accrued
Compensation, the Company is obligated to make monthly payments to Dr. Sheridan for a period of 12 months after his termination date. Each monthly payment shall be equal to
1/12th of the sum of (i) Dr. Sheridan's annual base

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salary,
as in effect at the termination date, plus (ii) his bonus for the year immediately prior to the year during which termination occurs.

If
Dr. Sheridan's employment terminates due to a "disability" (as defined in his employment agreement), he will be entitled to receive the Accrued Compensation and any other
disability benefits payable pursuant to any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. If Dr. Sheridan dies
during the term of his employment term, the Company shall pay to his estate a lump sum payment equal to the sum of (i) his Accrued Compensation and (ii) the board of director's good
faith estimated annual cash incentive payment for the fiscal year in which the death occurs (on a pro rate basis for the number whole or partial months in the fiscal year in which the death occurs
through the date of death) based on the performance of the Company at the time of his death. In addition, the death benefits payable pursuant to any retirement, deferred compensation or other employee
benefit plan maintained by the Company shall be paid to the beneficiary designated by Dr. Sheridan in accordance with the terms of the applicable plan.

Dr. Sheridan
is also subject to a covenant not to disclose our confidential information during his employment term, and at all times during his employment term and ending on the
later of (i) the fifth anniversary of the Executive Employment Agreement and (ii) three years after his termination date, Dr. Sheridan covenants not to compete with us, not to
interfere or disrupt the relationships we have with any joint venture party, any patient, referral source, supplier or other person having a business relationship with the Company, not to solicit or
hire any of our employees and not to publish or make any disparaging statements about us or any of our directors, officers or employees. If Dr. Sheridan breaches or threatens to breach these
covenants, the Company shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in
any action or proceeding instituted in any court in the State of Florida having subject matter jurisdiction. The provision with respect to injunctive relief shall not, however, diminish the Company's
right to claims and recover damages.

Potential Payments upon Termination

The following disclosure indicates the potential payments and benefits to which our directors would be entitled upon termination of
employment. All calculations are based on an assumed termination date of December 31, 2010. The disclosure below does not include payments and benefits to the extent they are provided generally
to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the directors.

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Potential Payments to Each Director

James H. Rubenstein, M.D., Director, Secretary and Medical Officer(1)

Event

Cash
Severance
Lump
Payment
($)

Cash
Severance
Payment
Over One
Year
($)

Non-Equity
Incentive Plan
Compensation
($)

Medical &
Dental
Healthcare
Benefits
($)

Total
($)For cause or resignation without good reason














Involuntary termination without cause, resignation for good reason





1,600,000


160,000





1,760,000Voluntary resignation














Disability or death(2)


180,000











180,000


(1)The
potential payments and benefits upon termination of employment described above are pursuant to the terms of Dr. Rubenstein's Executive Employment
Agreement.(2)The
executive or beneficiary shall be entitled to (a) disability benefits payable pursuant to any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company and (b) death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan
maintained by the Company in accordance with the terms of the applicable plan or plans.


Howard M. Sheridan, M.D., Director

Event

Cash
Severance
Lump
Payment
($)

Cash
Severance
Payment
Over One
Year
($)

Non-Equity
Incentive Plan
Compensation
($)

Medical &
Dental
Healthcare
Benefits
($)

Total
($)For cause or resignation without good reason














Involuntary termination without cause, resignation for good reason





380,000








380,000Voluntary resignation














Disability or death(1)


80,000











80,000


(1)The
executive or beneficiary shall be entitled to (a) disability benefits payable pursuant to any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company and (b) death benefits payable pursuant to any retirement, deferred compensation or other employee benefit plan
maintained by the Company in accordance with the terms of the applicable plan or plans.


Treatment of Equity Interests in RT Investments

Upon the termination of the director's employment with the Company for any reason whatsoever, (a) all unvested Class B
non-voting equity units of RT Investments held by the director as of the termination date shall expire and be immediately forfeited and canceled in their entirety as of the termination
date and (b) all vested Class B non-voting equity units of RT Investments held by the director shall remain outstanding, except that if director's employment is terminated by
the Company for cause at any time or by the director without good reason during the two year period following the grant date, or if director engages in any non-compete activities
prohibited under his employment

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agreement
and as further defined in the Management Unit Subscription Agreement for Class B non-voting equity units of RT Investments and Class C non-voting equity
units of RT Investments during the time that such activities are prohibited, then all Class B non-voting equity units of RT Investments (whether vested or unvested) and all
Class C non-voting equity units of RT Investments (whether vested or unvested) held by such terminated director shall expire and be immediately forfeited and canceled in their
entirety as of the earlier of the termination date or the date director engages in such prohibited activities.

Upon
the termination of the director's employment with the Company for any reason whatsoever, the Class C non-voting equity units of RT Investments held by the
director shall be treated as follows:



Notwithstanding
the above, if (i) the director's employment with the Company is terminated for any reason other than (A) by the Company for cause or (B) by the
director without good reason during the two year period subsequent to the grant date of the Class C non-voting equity units of RT Investments and (ii) a sale of the Company
occurs within six months following the termination date that results in Vestar receiving proceeds from such sale together with any distributions made at the same time or as or prior to the
consummation of the sale, that would have resulted in the director being entitled to retain a greater number of Class C non-voting equity units of RT Investments if the director had
remained employed by the Company through the date of the sale of the Company that the number of Units retained by the director pursuant to the foregoing provisions, then (x) such additional
Class C non-voting equity units of RT Investments shall be deemed to remain outstanding as of the time of the consummation of the sale of the Company, (y) the amount of any
distributions by the Company that the director shall be entitled to receive with respect to the Class C non-voting equity units of RT Investments held by the director shall be
governed by the applicable section of the Amended and Restated Limited Liability Company Agreement of Radiation Therapy Investments, LLC and give effect to such additional Class C
non-voting equity units of RT Investments, and (z) the amount of the proceeds that the director shall be entitled to receive with respect to the Class C
non-voting equity units of RT Investments held by the director in such sale of the Company shall be governed by the applicable sections of the Securityholders Agreement dated as of
February 21, 2008 among Vestar, the management investors and the Company, as amended or supplemented thereafter from time to time.

Further,
if the director's employment with the Company terminates for any reasons set forth in clauses (i), (ii) or (iii) below prior to the Company's initial public
offering (in any event excluding termination of employment by retirement prior the Company's initial public offering), the Company shall have the right and option to purchase for a period of
90 days following the termination date, and each member of the executive and director group shall be required to sell to the Company, any of all of such Units then held by such member of the
executive and director group, at a price per unit equal to fair market value, as defined in the Management Unit Subscription Agreement (measured as of the

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later
of (x) the termination date and (y) the six month anniversary of the grant date) of such vested Class B non-voting equity unit of RT Investments or vested
Class C non-voting equity unit of RT Investments, as applicable' provided that the Company's board of directors shall have the right, in its sole discretion, to increase the
purchase price as set forth above if the director's active employment with the Company is terminated due to: (i) the disability or death of the director; (ii) (A) by the Company
without cause or (B) by the director with good reason; or (iii) any other reason not set forth in (i) or (ii) above after the second anniversary of the grant date.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

RT Investments owns 100% of the capital stock of Parent, which in turn holds 100% of the capital stock of RTS. The following table sets
forth certain information with respect to the beneficial ownership of RT Investments' equity units as of December 31, 2010 by: (i) each person or entity who owns of record or
beneficially 5% or more of any class of RT Investments' voting securities; (ii) each of RTS's directors, (iii) each of RTS's named executive officers and (iv) all of RTS's
directors and executive officers as a group. Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act. In computing the number of shares beneficially
owned by a person and the percentage ownership of that person, shares of equity units subject to options held by that person that are currently exercisable or exercisable within 60 days of
December 31, 2010 are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. The respective percentages
of beneficial ownership of Class A voting equity units of RT Investments, Class B non-voting equity units of RT Investments, Class C non-voting equity
units of RT Investments and non-voting preferred equity units of RT Investments owned is based on 10,002,392 shares of Class A voting equity units of RT Investments, 516,614 shares
of Class B non-voting equity units of RT Investments, 938,360 shares of Class C non-voting equity units of RT Investments and 527,648 shares of
non-voting preferred equity units of RT Investments outstanding as of December 31, 2010. This information has been furnished by the persons named in the table below or in filings
made with the SEC. Unless otherwise indicated, the address of each of the directors and

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executive
officers is c/o Radiation Therapy Services, Inc., 2270 Colonial Boulevard, Fort Myers, Florida 33907.

Class A Units

Class B Units(3)

Class C Units(3)

Preferred UnitsName of Beneficial Owner

Number(1)

Percent

Number(1)

Percent

Number(1)

Percent

Number(1)

PercentPrincipal shareholder:Funds affiliated with Vestar(2)


8,286,564


82.8
%













437,134


82.8
%Directors and named executive officers:Daniel E. Dosoretz, M.D.


717,107


7.2
%

315,758


61.1
%

423,434


45.1
%

37,829


7.2
%James L. Elrod, Jr.(4)























Bryan J. Carey(5)























Anil Shrivastava(6)























Erin L. Russell(7)























James H. Rubenstein, M.D.(8)


354,569


3.5
%

12,630


2.4
%

32,665


3.5
%

18,704


3.5
%Howard M. Sheridan, M.D.


179,277


1.8
%

4,210


*


10,888


1.2
%

9,457


1.8
%Kerrin E. Gillespie


2,392


*


16,665


3.2
%

43,099


4.6
%

126


*Eduardo Fernandez, M.D., Ph.D.(9)


15,936


*


8,420


1.6
%

21,777


2.3
%

841


*Constantine A. Mantz, M.D.


7,968


*


8,420


1.6
%

21,777


2.3
%

420


*Norton L. Travis(10)


15,936


*


42,101


8.1
%

108,883


11.6
%

841


*All directors and executive officers as a group (14 persons)


1,303,543


13.0
%

412,414


79.8
%

673,411


71.8
%

68,765


13.0
%


*Represents
less than 1%(1)Fractional
units have been round to the nearest highest integer.(2)Includes
4,260,078 shares of Class A voting equity units of RT Investments and 224,728 shares of non-voting preferred equity units of RT
Investments held by Vestar Capital Partners V, L.P., 1,171,620 shares of Class A voting equity units of RT Investments and 61,806 shares of non-voting preferred equity units
of RT Investments held by Vestar Capital Partners V-A, L.P., 70,756 shares of Class A voting equity units of RT Investments and 3,733 shares of non-voting
preferred equity units of RT Investments held by Vestar Executives V, L.P. and 234,398 shares of Class A voting equity units of RT Investments and 12,365 shares of non-voting
preferred equity units of RT Investments held by Vestar Holdings V, L.P. Vestar Associates V, L.P. is the general partner of Vestar Capital Partners V, L.P., Vestar Capital
Partners V-A, L.P., Vestar Executives V, L.P. and Vestar Holdings V, L.P. and Vestar Managers V Ltd. is the general partner of Vestar Associates V, L.P.
As such, Vestar Managers V Ltd. has sole voting and dispositive power over the shares held by Vestar and its affiliated funds. Vestar's co-investors, which Vestar controls, own
2,549,712 shares of Class A voting equity units of RT Investments, or approximately 26% of Class A voting equity units of RT Investments, and 134,503 shares of non-voting
preferred equity units of RT Investments, or approximately 26% of the preferred equity units of RT Investments. As such, Vestar and its affiliates control, and may be deemed to beneficially own
8,286,564 shares of Class A voting equity units of RT Investments, or approximately 83% of the Class A voting equity units of RT Investments, and 437,123 shares of the
non-voting preferred equity units of RT Investments, or approximately 83% of the preferred equity units of RT Investments, through its ability to directly or indirectly control its
co-investors. Each of Vestar and its affiliated funds disclaims beneficial ownership of such securities, except to the extent of its pecuniary interest therein. The address for each of
Vestar and its affiliated funds is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.(3)Class B
units and Class C units are non-voting equity units of RT Investments issued under a management incentive equity plan
pursuant to which certain employees are eligible to receive incentive unit awards from an equity pool representing up to 13% of the common equity value of RT Investments


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following
return of preferred capital and accreted return on preferred capital, which as of September 30, 2010 was 12.4%. (4)Mr. Elrod
is a managing director of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of RT Investments
and the non-voting preferred equity units of RT Investments held by Vestar, its affiliated funds and its co-investors. Mr. Elrod disclaims beneficial ownership of such
securities, except to the extent of his pecuniary interest therein. The address for Mr. Elrod is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New
York 10167.(5)Mr. Carey
is a managing director of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of RT Investments
and the non-voting preferred equity units of RT Investments held by Vestar, its affiliated funds and its co-investors. Mr. Carey disclaims beneficial ownership of such
securities, except to the extent of his pecuniary interest therein. Mr. Carey served as our interim Chief Financial Officer until March 15, 2010. The address for Mr. Carey is c/o
Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York, New York 10167.(6)Mr. Shrivastava
is a managing director of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of RT
Investments and the non-voting preferred equity units of RT Investments held by Vestar, its affiliated funds and its co-investors. Mr. Shrivastava disclaims beneficial
ownership of such securities, except to the extent of his pecuniary interest therein. The address for Mr. Shrivastava is c/o Vestar Capital Partners, Inc., 245 Park Avenue,
41st Floor, New York, New York 10167.(7)Ms. Russell
is a principal of Vestar, and therefore may be deemed to beneficially own the Class A voting equity units of RT Investments and
the non-voting preferred equity units of RT Investments held by Vestar, its affiliated funds and its co-investors. Ms. Russell disclaims beneficial ownership of such
securities, except to the extent of her pecuniary interest therein. The address for Ms. Russell is c/o Vestar Capital Partners, Inc., 245 Park Avenue, 41st Floor, New York,
New York 10167.(8)These
shares are held in trusts for which Dr. Rubenstein and his descendants are beneficiaries. Dr. Rubenstein is the trustee of the trusts
and as such, has sole voting and investment power with respect to the shares in the trusts.(9)These
shares are held in common Angelica Guckes, Dr. Fernandez's spouse. Dr. Fernandez and Mrs. Guckes share voting and investment
powers with respect to these shares.(10)These
shares are pledged as security for a loan. The address for Mr. Travis is c/o Radiation Therapy Services, Inc., 1010 Northern Boulevard,
Suite 314, Great Neck, New York 11021.


For information relating to Securities Authorized for Issuance Under Equity Compensation Plans, see "Item 5. Market for Registrant's Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities", incorporated by reference herein.

Item 13.Certain Relationships and Related Transactions, and Director Independence

RTS's board of directors has not adopted a written policy or procedure for the review, approval and ratification of related party
transactions, as the Audit Compliance Committee Charter already requires the Audit Compliance Committee to review all relationships and transactions in which RTS and its employees, directors and
officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Based on all the relevant facts and circumstances, RTS's
Audit Committee will decide whether the related-party transaction is appropriate and will approve only those transactions that are in the best interests of RTS.

References
in this Item 13 to "we", "us", "our" and "the Company" are references to Radiation Therapy Services, Inc. and its subsidiaries, consolidated professional
corporations and associations and unconsolidated affiliates, unless the context requires otherwise or unless indicated otherwise.

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Set
forth below are certain transactions and relationships between us and our directors, executive officers and equityholders that have occurred during the last three years.

Merger Transaction

On October 19, 2007, we entered into the Merger Agreement with RT Investments, Parent and RTS MergerCo, Inc., a
wholly-owned subsidiary of Parent, pursuant to which we consummated the Merger. Upon completion of the Merger, each share of the Company's common stock outstanding immediately prior to the effective
time of the Merger (other than certain shares held by members of RT Investments' management team and certain employees) was converted into $32.50 in cash without interest. The Closing occurred on
February 21, 2008. Immediately following the Closing, Parent became the owner of all of the outstanding common stock of the Company, which in turn, became a wholly-owned indirect subsidiary of
RT Investments, and Vestar and its affiliates became the beneficial owners of approximately 57% of the outstanding Class A voting equity units of RT Investments and its co-investors
became the beneficial owners of approximately 26% of the outstanding Class A voting equity units of RT Investments. As a result, Vestar and its affiliates currently control approximately 83% of
the Class A voting equity units of RT Investments through its ability to directly or indirectly control its co-investors. In addition, at the Closing, the management investors,
including current and former directors and executive officers, either exchanged certain shares of the Company's common stock or invested cash in the Company, in each case, in exchange for
Class A voting equity units and non-voting preferred equity units of RT Investments as further described below. At the Closing, these management investors as a group became the
beneficial owners of approximately 17% of the outstanding Class A voting equity units of RT Investments. RT Investments also adopted a management incentive equity plan pursuant to which certain
employees are eligible to receive incentive unit awards (Class B and C non-voting equity units) from an equity pool representing up to 13% of the common equity value of RT
Investments, which as of December 31, 2010 was 12.4%. In connection with the Closing, Vestar, its affiliates and these management investors invested approximately $627.3 million in
equity units of RT Investments.

Administrative Services Agreements

In California, Delaware, Maryland, Massachusetts, Michigan, Nevada, New York and North Carolina, we have administrative services
agreements with professional corporations owned by certain of our directors, executive officers and equityholders, who are licensed to practice medicine in such states. Drs. Dosoretz, Rubenstein and
Michael J. Katin, M.D., a former director on the Company's board of directors as well as a director on the boards of directors of several of our subsidiaries and an equityholder of RT Investments, own
interests in these professional corporations ranging from 0% to 100%.

We
have entered into these administrative services agreements in order to comply with the laws of such states which prohibit us from employing physicians. Our administrative services
agreements generally obligate us to provide treatment center facilities, staff and equipment, accounting services, billing and collection services, management and administrative personnel, assistance
in managed care contracting and assistance in marketing services. Terms of the agreements are typically 20-25 years and renew automatically for successive five-year
periods, with certain agreements having 30 year terms and automatically renewing for successive one-year periods. The administrative services agreements also contain restrictive
covenants that preclude the professional corporations from providing substantially similar healthcare services, hiring another management services organization and soliciting our employees, customers
and clients for the duration of the agreement and some period after termination, usually three years. Monthly fees for such services may be computed on a fixed basis, percentage of net collections
basis, or on a per treatment basis, depending on the particular state requirements. The administrative services fees paid to us by such professional corporations under the administrative

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services
agreements were approximately $92.0 million, $87.2 million and $83.5 million for the years ended December 31, 2008, 2009 and 2010, respectively. These annual fees
are subject to renegotiation on an annual basis, and we had engaged an independent consultant to complete a fair market value annual review of the fees paid by these professional service corporations
to us under the terms of the administrative services agreements, except for the administrative services agreement where we are paid on a percentage of gross or net income. The consulting firm
completed its review in 2010 for the 2009 fees under the New York and North Carolina administrative services agreements. With respect to the acquisition of all of the equity interests in the Michigan
centers, of which the management companies were acquired by a wholly-owned affiliate of the Company and the professional service corporations were acquired by Dr. Katin, the Audit/Compliance
Committee approved the continuation of the use of existing administrative service agreements between the management companies and the professional corporations. With respect to any new centers to date
in 2010 that required an administrative services agreement, the Audit/Compliance Committee approved the utilization by management of the same underlying fee methodology used in the California,
Maryland, Nevada, Massachusetts, New York and/or North Carolina administrative services agreements based on the fair market value review completed by the independent consultant.

In
addition, we have transition services agreements with the professional corporations owned by Drs. Dosoretz, Rubenstein and Katin, which correspond to the administrative services
agreements. The transition services agreements provide that (i) the term of the agreements corresponds to the respective administrative services agreement and any renewals thereof,
(ii) the shareholders grant us a security interest in the shares held by them in the professional corporation, and (iii) the shareholders are prohibited from making any transfer of the
shares held by them in the professional corporation, including through intestate transfer, except to qualified shareholders with our approval. Upon certain shareholder events of transfer (as defined
in the transition services agreements), including a transfer of shares by any shareholder without our approval or the loss of a shareholder's license to practice radiation therapy in his or her
applicable state, for a period of 30 days after giving notice to us of such event, the other shareholders have an opportunity to buy their pro-rata portion of the shares being
transferred. If at the end of the 30-day period, any of the transferring shareholder's shares have not been acquired, then, for a period of 30 days, the professional corporation has
the option to purchase all or a portion of the shares. If at the end of that 30-day period any of the transferring shareholder's shares have not be acquired, we must designate a transferee
to purchase the remaining shares. The purchase price for the shares shall be the fair market
value as determined by our auditors. Upon other events relating to the professional corporation, including uncured defaults, we shall designate a transferee to purchase all of the shares of the
professional corporation.

Lease Arrangements with Entities Owned by Related Parties

We lease certain of our treatment centers and other properties from partnerships which are majority-owned by Drs. Dosoretz, Rubenstein,
Sheridan, Katin and Mantz and Dr. Fernandez, our Senior Vice President, Director of Regional Operations. As of December 31, 2010, Drs. Dosoretz, Rubenstein, Sheridan, Katin, Fernandez
and Mantz have ownership interests in these entities ranging from 0% to 100%. These leases have expiration dates through May 31, 2039, and provide for annual lease payments and executory costs,
ranging from approximately $58,000 to $1.6 million. The aggregate lease payments we made to these entities were approximately $7.3 million, $10.2 million and $14.5 million
for the years ended December 31, 2008, 2009 and 2010, respectively. The rents were determined on the basis of the debt service incurred by the entities and a return on the equity component of
the project's funding. Prior to completing our initial public offering in June 2004, we engaged an independent consultant to complete a fair market rent analysis for the real estate leases with the
real estate entities owned by our directors, executive officers and other management employees. The consultant determined that, with one exception, the rents were at fair market value. We negotiated a
rent reduction for the one exception to bring it to fair market value as determined by the

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consultant.
Since 2004, an independent consultant is utilized to assist the Audit/Compliance Committee in determining fair market rental for any renewal or new rental arrangements with any affiliated
party.

In
October 1999, we entered into a sublease arrangement with a partnership, which is 62.4% owned by Drs. Dosoretz, Rubenstein, Sheridan and Katin as of December 31, 2010, to lease
space to the partnership for an MRI center in Mount Kisco, New York. Sublease rentals paid by the partnership to the landlord were approximately $578,000, $761,000 and $673,000 for the years ended
December 31, 2008, 2009 and 2010, respectively.

We
also maintain a construction company which provides remodeling and real property improvements at certain of our facilities. This construction company builds and constructs leased
facilities on the lands owned by Drs. Dosoretz, Rubenstein, Sheridan and Katin. Payments received by us for building and construction fees were approximately $9.7 million, $0.5 million
and $0.5 million for the years ended December 31, 2008, 2009 and 2010, respectively. Amounts due to us for the construction services were approximately $0.2 million at
December 31, 2010.

In
connection with our plans with respect to future development of new treatment centers on land owned by or contemplated to be acquired by land partnerships owned by certain of our
directors, executive officers and equityholders, the terms and conditions of the transactions, including leases of such property and in some instances buildout and equipment reimbursements by us are
expected to be on terms and conditions as those of similar historic transactions.

Securityholders Agreement

Each of our directors and executive officers who is a holder of equity units of RT Investments, including Drs. Dosoretz, Sheridan,
Rubenstein, Katin, Mantz and Fernandez, Mr. Gillespie and Ms. Dornaus, our Senior Vice President and Chief Compliance Officer, and Mr. Travis is a party to an Amended and Restated
Securityholders Agreement with RT Investments governing the rights and obligations of holders of units of RT Investments. The Amended and Restated Securityholders Agreement provides, among other
things:



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The
Securityholders Agreement also provides for a management agreement to be entered into among the Company, RT Investments, Parent and Vestar, which is described below.

Management Agreement

In connection with the Merger, each of the Company, RT Investments and Parent entered into a Management Agreement with Vestar relating
to certain advisory and consulting services Vestar provides to the Company, RT Investments and Parent. Under the Management Agreement, Vestar received a $10.0 million transaction fee upon the
Closing for services rendered in connection with the Closing and was reimbursed for its reasonable out of pocket expenses. The Management Agreement also provides for Vestar to receive an annual
management fee equal to the greater of (i) $850,000 or (ii) an amount equal to 1.0% of the Company's consolidated EBITDA, which fee will be payable quarterly, in advance. Vestar is also
entitled to a fee for any financial advisory or similar services it provides in connection with a sale of the Company or a transaction relating to any acquisition, divestiture or other transaction by
or involving RT Investments, Parent, the Company or any of their respective subsidiaries, subject to approval by the management managers under the Amended and Restated Securityholders Agreement. RT
Investments, Parent and the Company must
indemnify Vestar and its affiliates against all losses, claims, damages and liabilities arising out of the performance by Vestar of its services pursuant to the Management Agreement, other than those
that have resulted primarily from the gross negligence or willful misconduct of Vestar and/or its affiliates.

The
Management Agreement will terminate upon the earlier of (i) such time when Vestar and its affiliates hold, directly or indirectly, less than 20% of the voting power of the
Company's outstanding voting stock, (ii) a Public Offering (as defined in the Amended and Restated Securityholders Agreement) or (iii) a sale of RT Investments, Parent or the Company in
accordance with the Amended and Restated Securityholders Agreement.

During
2010, we paid $2.0 million to Vestar Capital Partners V, L.P. for additional transaction advisory services in respect to the incremental amendments to our senior
secured revolving credit facility, the additional $15.0 million of commitments to the revolver portion, and the complete refinancing of the senior subordinated notes. We paid approximately
$0.6 million, $1.3 million and $1.3 million in management fees to Vestar for the years ended December 31, 2008, 2009 and 2010, respectively.

Management Stock Contribution and Unit Subscription Agreement

In connection with the Closing, RT Investments entered into various Management Stock Contribution and Unit Subscription Agreements with
our management employees, including Drs. Dosoretz, Sheridan, Rubenstein, Katin, Mantz and Fernandez, Mr. Gillespie and Ms. Dornaus and Messrs. Travis and Watson (each, an
"Executive"), pursuant to which they exchanged certain shares of the Company's common stock held by them immediately prior to the effective time of the Merger or invested cash in the Company, in each
case, in exchange for non-voting preferred equity units and Class A voting equity units of RT Investments. Under the Management Stock Contribution and Unit Subscription Agreements,
if an Executive's employment is terminated by death or disability, by RT Investments and its subsidiaries without "cause" or by the Executive for "good reason" (each as defined in the respective
Management Stock Contribution and Unit Subscription Agreement), or by RT Investments or its subsidiaries for "cause" or by the Executive for any other reason except retirement, or the Executive
violates the non-compete or confidentiality provisions, RT Investments has the right and option to purchase, for a period of 90 days following the termination, any and all units
held by the

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Executive
or the Executive's permitted transferees, at the fair market value determined in accordance with the applicable Management Stock Contribution and Unit Subscription Agreement, subject to
certain exceptions and limitations. Under Dr. Dosoretz's Management Stock Contribution and Unit Subscription Agreement, he also has certain put option rights to require RT Investments to
repurchase his non-voting preferred equity units and Class A voting equity units if, prior to a sale of RT Investments, Parent or the Company in accordance with the Amended and
Restated Securityholders Agreement or a Public Offering (as defined in the Amended and Restated Securityholders Agreement),
his employment is terminated without cause or he terminates his employment for good reason and at such time RT Investments has met certain performance targets.

Amended and Restated Limited Liability Company Agreement

Each of our directors and executive officers who is a holder of equity units of RT Investments, including Drs. Dosoretz, Sheridan,
Rubenstein, Katin, Mantz and Fernandez, Ms. Dornaus, and Mr. Travis is a party to an Amended and Restated Limited Liability Company Agreement with RT Investments governing affairs of RT
Investments and the conduct of its business. The Amended and Restated Limited Liability Company Agreement sets forth certain terms of the equity units held by members of RT Investments, including,
among other things, the right of members to receive distributions, the voting rights of holders of equity units and the composition of the board of managers, subject to the terms of the Amended and
Restated Securityholders Agreement. Under the Amended and Restated Limited Liability Company Agreement, Vestar's prior written consent is required for RT Investments to take engage in certain types of
transactions, including mergers, acquisitions, asset sales, and incur indebtedness and make capital expenditures, subject to exceptions and limitations. The Amended and Restated Limited Liability
Company Agreement contains customary indemnification provisions relating to holders of units and managers and officers of RT Investments.

Employment Agreement and Certain Employees

We have entered into employment agreements with certain of our executive officers and directors, which contain compensation, severance,
non-compete and confidentiality provisions. In addition, we have employed, and continue to employ, directly or indirectly, immediate family members of certain of our directors, executive
officers and equityholders, including Dr. Dosoretz's brother (as further described below), Dr. Dosoretz's daughter, Amy Fox, M.D., and Dr. Rubenstein's brother,
Paul Rubenstein. Amy Fox, M.D. received compensation under a physician employment agreement of approximately $0, $53,000 and $283,000 for the years ended December 31, 2008, 2009 and
2010, respectively. Paul Rubenstein received compensation as our Director of Physician Contracting of approximately $169,000, $169,000 and $171,000 for the years ended December 31, 2008, 2009
and 2010, respectively.

Indemnification Agreements with Certain Officers and Directors

We have entered into indemnification agreements with certain of our directors and executive officers prior to the Merger. The
indemnification agreements provide, among other things, that the Company will, to the extent permitted by applicable law, indemnify and hold harmless each indemnitee if, by reason of his or her status
as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of the Company or of any other enterprise which such person is or was serving at the request of the
Company, such indemnitee was, is or is threatened to be made, a party to in any threatened, pending or completed proceeding, whether brought in the right of the Company or otherwise and whether of a
civil, criminal, administrative or investigative nature, against all expenses (including attorneys' and other professionals' fees), judgments, fines, penalties and amounts paid in settlement actually
and reasonably incurred by him or her or on his or her behalf in connection with such proceeding. The indemnitee shall not be indemnified unless he or she acted in good faith and in a

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manner
he or she reasonably believed to be in the best interests of the Company, or for willful misconduct. In addition, the indemnification agreements provide for the advancement of expenses incurred
by the indemnitee in connection with any such proceeding to the fullest extent permitted by applicable law. The indemnification agreements terminate upon the later of five years after the date that
the indemnitee ceased to serve as a director and/or executive officer or the date of the final termination of any proceedings subject to the indemnification agreements. The Company agrees not to bring
any legal action against the indemnitee or his or her spouse or heirs after two years following the date the indemnitee ceases to be a director and/or executive officer of the Company. The
indemnification agreements do not exclude any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including any rights arising under the Articles of
Incorporation or Bylaws of the Company, or the Florida Business Corporation Act.

In
connection with the Merger, we agreed that we would not alter or impair any existing indemnification provisions then in existence in favor of then current or former directors or
officers as provided in the Articles of Incorporation or Bylaws of the Company or as evidenced by indemnification agreements with us.

Medical Developers, LLC Acquisition

On January 1, 2009, we entered into a Membership Interest Purchase Agreement with Lisdey S.A. an Uruguay corporation,
Alejandro Dosoretz, Dr. Daniel Dosoretz's brother, and Bernardo Dosoretz, Dr. Daniel Dosoretz's father, and the spouses of Alejandro Dosoretz and Bernardo Dosoretz, pursuant to which we
purchased a 33% interest in MDLLC, an entity that is
now the majority owner and operator of 29 freestanding radiation oncology practices (of which two are under development) through 15 legal entities South America, Central America and the Caribbean
(which translates into us owning a 19% indirect ownership interest in the underlying radiation therapy treatment centers), and a 19% interest in Clinica de Radioterapia La Asuncion S.A., an
entity that operates a treatment center in Guatemala. We purchased the 33% interest in MDLLC and the 19% interest in Clinica de Radioterapia La Asuncion S.A. at an aggregate purchase price of
approximately $12.3 million, with a four-year call option to purchase the remaining 67% in MDLLC, which would result in an ownership interest approximately 91% in the underlying
radiation oncology practices located in South America, Central America and the Caribbean, at a price based on a multiple of historical earnings before interest, taxes, depreciation and amortization.
In connection with our entry into the Membership Interest Purchase Agreement, Alejandro Dosoretz entered into an employment agreement with an entity located in Argentina in which we hold interests as
part of a joint venture, pursuant to which he receives an annual salary of approximately $180,000 for his services.

On
March 1, 2011, RTSII, RT Investments, RTS, and our wholly-owned subsidiary Main Film B.V., entered into the Membership Interest Purchase Agreements with Alejandro
Dosoretz, and his spouse and Bernardo Dosoretz and his representative, to purchase the remaining 67% membership interest in MDLLC, as well as direct ownerships interests held by Alejandro Dosoretz and
Bernardo Dosoretz in such entities and a 61% ownership interest in Clinica de Radioterapia La Asuncion, S.A.

Under
the terms of the Membership Interest Purchase Agreements, RTSII and its subsidiaries purchased an additional 72% of the remaining interests in the entities, which when combined
with RTSII's purchase of a 33% interest in MDLLC in January 2009, results in a 91% ownership interest in the entities. The aggregate purchase price for the MDLLC Purchase was $80.0 million and
was determined based upon a multiple of historical earnings before interest, taxes, depreciation and amortization, and excess working capital. The purchase price was comprised of $47.5 million
in cash, $16.25 million in Notes and $16.25 million in equity, in the form of 25 shares of our common stock. In addition to the purchase price paid at closing, Alejandro Dosoretz also
has the right to receive an earnout payment from RTSII based on a multiple of future earnings before interest, taxes, depreciation and amortization of certain radiation oncology centers acquired in
the MDLLC Purchase, which such

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earnout
payment, if any, would be paid one-half in the form of Notes and one-half in the form of equity of RT Investments. We expect to record a contingent earnout accrual of
approximately $2.4 million in our purchase price accounting for the MDLLC Purchase. In connection with the MDLLC Purchase, RT Investments entered into the Contribution Agreement with Alejandro
Dosoretz pursuant to which he exchanged the 25 shares of our common stock he received in the MDLLC Purchase for approximately 13,660 non-voting preferred equity units of RT Investments and
approximately 258,955 Class A voting equity units of RT Investments, having an aggregate value of $16.25 million. Pursuant to one of the Membership Interest Purchase Agreements,
Alejandro Dosoretz has the right to invest 10% (or more than 10% if approved by RTSII) of the cost of certain specific new radiation oncology centers of MDLLC and Clinica de Radioterapia La
Asuncion S.A. in exchange for a 10% ownership interest in such new centers and an additional interest, which when combined with the 10% ownership interest, would entitle him to a return of his
invested capital and 20% of the residual value of such new centers. RTSII has an option
to buy such interests in the new centers on the third anniversary of the closing, and Alejandro Dosoretz has a right to sell such interests in the new centers on the fifth anniversary of the closing.

In
2010, we provided medical equipment and parts inventory to MDLLC in the amount of approximately $769,000. As of December 31, 2010, amounts due from the sale of the equipment,
including accrued interest were approximately $781,000. In connection with the acquisition of MDLLC, we have advanced up to $500,000 for the purchase and implementation of a new accounting software
system.

Other Related Party Transactions

We provide billing and collection services to Riverhill MRI Specialists, P.C. ("Riverhill MRI"), a provider of medical services in New
York, of which approximately 62.4% is owned by Drs. Dosoretz, Rubenstein, Sheridan and Katin as of December 31, 2010. In addition, we charge Riverhill MRI for certain allocated costs of certain
staff that perform services on behalf of Riverhill MRI. The fees received by us for the billing and collection services and for reimbursement of certain allocated costs were approximately $200,000 and
$2,000 for the years ended December 31, 2008, and 2009, respectively. No balance was due from Riverhill MRI at December 31, 2010.

We
are a participating provider in an oncology network, of which Dr. Dosoretz has an ownership interest. We provide oncology services to members of the network. Payments received
by us for services rendered in 2008, 2009 and 2010 were approximately $633,000, $813,000 and $867,000, respectively.

In
October 2003, we contracted with Batan Insurance Company SPC, LTD, an entity which is owned by Drs. Dosoretz, Rubenstein, Sheridan and Katin to provide us with malpractice
insurance coverage. We paid premium payments to Batan Insurance Company SPC, LTD of approximately $8.1 million, $6.9 million and $5.4 million for the years ended
December 31, 2008, 2009 and 2010, respectively.

Director Independence

The board is currently composed of seven directors, none of which is likely to qualify as an independent director based on the
definition of independent director under the Nasdaq rules. Because affiliates of Vestar own more than 50% of the voting common stock of RT Investments, we would be a "controlled company" under the
Nasdaq rules, which would qualify us for exemptions from certain corporate governance rules of The Nasdaq Stock Market, including the requirements that the board of directors be composed of a majority
of independent directors.

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Item 14.Principal Accounting Fees and Services

The following table presents fees for professional audit and other services rendered by our independent registered public accounting
firm, Ernst & Young LLP, for the years ended December 31, 2010 and 2009.

Type of Fees

2010

2009Audit fees

$
1,435,000

$
1,046,000Audit-related fees


198,000


Tax fees


337,000


688,000All other





Total

$
1,970,000

$
1,734,000


Fees
for audit services included fees associated with the annual audit, reviews of the Company's quarterly reports, and services in connection with debt offerings and SEC regulatory
filings. Audit-related fees principally included agreed-upon procedures and internal control analysis. Tax fees included tax compliance, tax advice, and tax planning. All other fees
include fees not included in the other categories.

The
audit committee has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence and has concluded that
the non-audit services provided by Ernst & Young LLP are compatible with maintaining Ernst & Young LLP's independence.

Pre-Approval Policies and Procedures

The audit committee approves in advance all audit and non-audit services to be performed by the Company's independent
registered public accounting firm. The audit committee considers whether the provision of any proposed non-audit services is consistent with the SEC's rules on auditor independence and has
pre-approved certain specified audit and non-audit services to be provided by Ernst & Young LLP for up to twelve (12) months from the date of the
pre-approval. If there are any additional services to be provided, a request for pre-approval must be submitted to the audit committee for its consideration.

PART IV

Item 15.Exhibits and Financial Statement Schedules

(a)   Index
to Consolidated Financial Statements, Financial Statement Schedules and Exhibits:



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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



PageReports of Independent Registered Public Accounting Firm


F-2Consolidated Financial Statements:Consolidated Balance Sheets at December 31, 2010 and 2009


F-3Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2010 and 2009 (Successor),
the period from February 22 to December 31, 2008 (Successor), and the period from January 1, 2008 to February 21, 2008 (Predecessor)


F-4Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009 (Successor), the period from
February 22 to December 31, 2008 (Successor), and the period from January 1, 2008 to February 21, 2008 (Predecessor)


F-5Consolidated Statements of Changes in Equity for the Years Ended December 31, 2010 and 2009 (Successor), the period
from February 22 to December 31, 2008 (Successor), and the period from January 1, 2008 to February 21, 2008 (Predecessor)


F-7Notes to Consolidated Financial Statements


F-9


F-1

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The
Board of Directors and Shareholder of
Radiation Therapy Services Holdings, Inc.

We
have audited the accompanying consolidated balance sheets of Radiation Therapy Services Holdings, Inc. as of December 31, 2010 and December 31, 2009 and the
related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the years ended December 31, 2010 (Successor) and December 31, 2009
(Successor), for the periods from February 22, 2008 to December 31, 2008 (Successor), and January 1, 2008 to February 21, 2008 (Predecessor). These financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Radiation Therapy Services
Holdings, Inc. at December 31, 2010 and 2009 and the consolidated results of its operations and its cash flows for the years ended December 31, 2010 (Successor) and
December 31, 2009 (Successor) and for the periods from February 22, 2008 to December 31, 2008 (Successor), and January 1, 2008 to February 21, 2008 (Predecessor), in
conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP
Certified Public Accountants


Tampa,
Florida
March 11, 2011

F-2

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Table of Contents



RADIATION THERAPY SERVICES HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

December 312010

2009AssetsCurrent assets:Cash and cash equivalents ($4,981 and $5,785 related to VIEs)

$
13,977

$
32,958Accounts receivable, net ($19,670 and $22,389 related to VIEs)


63,571


58,015Income taxes receivable ($670 and $510 related to VIEs)





483Prepaid expenses ($376 and $492 related to VIEs)


6,969


7,557Inventories ($17 and $20 related to VIEs)


1,426


1,436Deferred income taxes


2,276


8,659Other ($851 and $49 related to VIEs)


3,534


6,153Total current assets


91,753


115,261Equity investments in joint ventures


20,136


18,663Property and equipment, net ($22,069 and $22,085 related to VIEs)


229,665


225,779Real estate subject to finance obligation


8,100


74,248Goodwill ($13,190 and $13,190 related to VIEs)


770,898


826,641Intangible assets, net ($792 and $844 related to VIEs)


85,236


92,271Other assets ($9,159 and $8,263 related to VIEs)


30,542


26,362Total assets

$
1,236,330

$
1,379,225Liabilities and EquityCurrent liabilities:Accounts payable ($3,385 and $3,233 related to VIEs)

$
21,888

$
13,095Accrued expenses ($3,127 and $3,328 related to VIEs)


35,765


35,107Income taxes payable


5,994


Current portion of long-term debt


8,780


13,961Current portion of finance obligation


53


1,128Other current liabilities


197


2,000Total current liabilities


72,677


65,291Long-term debt, less current portion


590,051


535,098Finance obligation, less current portion


8,515


76,102Other long-term liabilities ($1,542 and $1,291 related to VIEs)


15,981


14,876Deferred income taxes


33,527


58,557Total liabilities


720,751


749,924Noncontrolling interestsredeemable


7,371


7,294Commitments and contingencies Equity:Common stock, $0.01 par value, 1,000 shares authorized, issued, and outstanding at December 31, 2010 and 2009





Additional paid-in capital


630,989


630,278Retained deficit


(130,374
)

(14,886
)Note receivable from shareholder


(175
)

(225
)Accumulated other comprehensive loss, net of tax


(3,391
)

(4,869
)Total Radiation Therapy Services Holdings, Inc. shareholder's equity


497,049


610,298Noncontrolling interestsnonredeemable


11,159


11,709Total equity


508,208


622,007Total liabilities and equity

$
1,236,330

$
1,379,225


The accompanying notes are an integral part of the consolidated financial statements.

F-3

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RADIATION THERAPY SERVICES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Successor

Predecessor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Revenues:Net patient service revenue

$
535,913

$
517,646

$
413,305

$
76,927Other revenue


8,050


6,838


5,864


1,179Total revenues


543,963


524,484


419,169


78,106Expenses:Salaries and benefits


282,302


259,532


206,159


42,209Medical supplies


43,027


45,361


32,545


2,924Facility rent expenses


27,885


22,106


13,783


2,269Other operating expenses


27,103


24,398


17,027


3,102General and administrative expenses


65,798


54,537


43,393


20,340Depreciation and amortization


46,346


46,416


32,609


5,347Provision for doubtful accounts


8,831


12,871


17,896


3,789Interest expense, net


58,505


62,502


55,100


4,721Gain on sale of interest in a radiation practice








(3,113
)

Loss on sale of assets of a radiation treatment center


1,903








Termination of professional services agreement








7,000


Loss on sale of real estate








1,036


Early extinguishment of debt


10,947








3,688Impairment loss


97,916


3,474





Total expenses


670,563


531,197


423,435


88,389Loss before income taxes


(126,600
)

(6,713
)

(4,266
)

(10,283
)Income tax (benefit) expense


(12,810
)

1,002


(1,413
)

570Net loss


(113,790
)

(7,715
)

(2,853
)

(10,853
)Net income attributable to noncontrolling interestsredeemable and non-redeemable


(1,698
)

(1,835
)

(2,483
)

(19
)Net loss attributable to Radiation Therapy Services Holdings, Inc. shareholder


(115,488
)

(9,550
)

(5,336
)

(10,872
)Other comprehensive income (loss):Unrealized gain (loss) on derivative interest rate swap agreement and foreign currency translation


1,478


1,801


(6,670
)

Comprehensive loss

$
(114,010
)
$
(7,749
)
$
(12,006
)
$
(10,872
)


The
accompanying notes are an integral part of the consolidated financial statements.

F-4

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RADIATION THERAPY SERVICES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Successor

Predecessor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Cash flows from operating activitiesNet loss

$
(113,790
)
$
(7,715
)
$
(2,853
)
$
(10,853
)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation


39,011


31,837


20,523


4,987Amortization


7,335


14,579


12,086


360Deferred rent expense


1,180


3,199


1,136


283Deferred income tax benefit


(19,698
)

(1,335
)

(1,765
)

(2,170
)Stock-based compensation


1,030


962


1,524


1,329Tax benefit from stock option exercise











(9,239
)Impairment loss


97,916


3,474





Provision for doubtful accounts


8,831


12,871


17,896


3,789Gain on sale of an interest in a radiation practice








(3,113
)

Loss on the sale/disposal of property and equipment


734


1,341


1,075


7Loss on the sale of assets of a radiation treatment center


1,903








Write-off of pro-rata debt discount


494








Write-off of loan costs


1,593








Extinguishment of debt


10,947





4,808


2,639Non-cash expenses related to merger











10,094Write-off of acquisition-related costs





812





Amortization of debt discount


791


1,208


951


Amortization of loan costs


3,350


2,850


2,359


Equity interest in net (earnings) loss of joint venture


(1,001
)

(880
)

118


(39
)Distribution received from unconsolidated joint ventures


980








Changes in operating assets and liabilities:Accounts receivable and other receivables


(16,066
)

(3,790
)

(4,878
)

(10,856
)Income taxes receivable / payable


6,477


13,141


3,437


2,739Inventories


107


10


140


(81
)Prepaid expenses


4,425


2,006


(612
)

993Accounts payable


8,454


(965
)

984


(3,171
)Accrued expenses


3,991


(2,213
)

13,131


6,400Net cash provided by (used in) operating activities


48,994


71,392


66,947


(2,789
)Cash flows from investing activitiesPurchases of property and equipment


(43,781
)

(35,443
)

(32,120
)

(7,529
)Acquisition of radiation centers


(43,388
)

(2,449
)

(71,624
)

(113
)Restricted cash associated with earn-out provisions of acquisitions





2,269


(2,269
)

Purchase of joint venture interests


(1,000
)

(13,593
)

(1,337
)

Proceeds from sale of property and equipment


1,693


144


40,423


Repayments from employees


457


478


251


24Contribution of capital to joint venture entities


(3,711
)

(2,386
)

(9
)

Distribution received from joint venture


27








Change in other assets and other liabilities


(2,808
)

(3,192
)

(1,593
)

(12,521
)Net cash used in investing activities


(92,511
)

(54,172
)

(68,278
)

(20,139
)Cash flows from financing activitiesProceeds from issuance of debt (net of original issue discount of $1,950)


316,550





269,555


Principal repayments of debt


(271,295
)

(29,693
)

(223,664
)

(2,471
)Repayments of finance obligation


(302
)

(1,242
)

(512
)

(114
)Payment of call premium on senior subordinated notes


(5,250
)







Proceeds from equity contribution


156





174


Proceeds from exercise of stock options











14,164Tax benefit from stock option exercises











9,239Payments of notes receivable from shareholders


50


25





Proceeds from issuance of noncontrolling interest


608


356


80


Cash distributions to noncontrolling interest holdersredeemable and non-redeemable


(3,176
)

(2,876
)

(688
)

(448
)Deconsolidation of noncontrolling interest


(14
)







Payments of debt issue costs


(12,791
)




(1,924
)

(274
)Net cash provided (used in) by financing activities


24,536


(33,430
)

43,021


20,096Net (decrease) increase in cash and cash equivalents

$
(18,981
)
$
(16,210
)
$
41,690

$
(2,832
)Cash and cash equivalents, beginning of period


32,958


49,168


7,478


10,310Cash and cash equivalents, end of period

$
13,977

$
32,958

$
49,168

$
7,478


The accompanying notes are an integral part of the consolidated financial statements.

F-5

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.        CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Successor

Predecessor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Supplemental disclosure of cash flow informationInterest paid

$
57,688

$
57,371

$
34,402

$
575Income taxes paid (refunded)

$
411

$
(10,776
)
$
3,086

$
Supplemental disclosure of noncash transactionsRecorded noncash contribution of capital by controlling interest holder

$
602

$


$


$
Recorded capital lease obligations related to the purchase of equipment

$


$


$
9,023

$
Recorded capital lease obligations related to the service contract component of the purchase of medical equipment

$


$


$
1,502

$
Recorded CON holdback accrual related to the acquisition of radiation center assets

$


$


$
2,005

$
Recorded noncash contribution of capital by noncontrolling interest holder

$


$
694

$
6,288

$
Recorded noncash deconsolidation of noncontrolling interest

$
(64
)
$


$


$
Recorded accounts payable liabilities related to the acceptance and delivery of medical equipment

$


$
2,063

$


$
Recorded finance obligation related to real estate projects

$
3,756

$
17,866

$
23,129

$
1,529Recorded derecognition of finance obligation related to real estate projects

$
(72,117
)
$


$


$
Recorded noncash purchase of noncontrolling interest in a joint venture

$
(475
)
$


$


$
Recorded noncash use of vendor credits

$
2,027

$


$


$
Recorded new Senior Credit Facility Term borrowing net of debt discount of $3.07 million

$


$


$


$
307,000Recorded reduction of old Senior Credit Facility plus interest of $2.5 million and the termination of the swap agreement of
$0.8 million

$


$


$


$
249,700Recorded reduction of capital lease obligations

$


$


$


$
16,728Recorded new Senior Credit Facility Revolver borrowing

$


$


$


$
3,100Recorded reduction in goodwill due to purchase price adjustment

$


$
188

$


$
Recorded noncash distribution receivable and equity contribution payable from equity investee

$


$
301

$


$
Recorded accounts payable related to the final purchase adjustment for an equity investee

$


$
1,900

$


$



The accompanying notes are an integral part of the consolidated financial statements.

F-6

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Common Stock





Notes
Receivable
from
Shareholders

Accumulated
Other
Comprehensive
Income (Loss)Additional
Paid-In
Capital

Retained
Earnings
(Deficit)

Noncontrolling
interests
Nonredeemable

Total
Equity(in thousands except share amounts):
PREDECESSOR

Shares

AmountBalance, January 1, 2008


23,704,919

$
2

$
86,274

$
79,479

$


$
(265
)
$
11,002

$
176,492Net (loss) income











(10,872
)







15


(10,857
)Termination of interest rate swap agreement, net of tax

















265





265Exercise of stock options


1,302,169





14,164














14,164Tax benefit from stock option exercise








9,239














9,239Nonvested stock issued to key employee


30,769




















Amortization of nonvested stock grants








1,329














1,329Equity contribution in joint venture























Cash distributions




















(408
)

(408
)Balance, February 21, 2008


25,037,857

$
2

$
111,006

$
68,607

$


$


$
10,609

$
190,224


The accompanying notes are an integral part of the consolidated financial statements.

F-7

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

Common Stock





Note
Receivable
from
Shareholder

Accumulated
Other
Comprehensive
LossAdditional
Paid-In
Capital

Retained
Deficit

Noncontrolling
interests
Nonredeemable

Total
Equity(in thousands except share amounts):
SUCCESSOR

Shares

AmountEquity contributions from Radiation Therapy Investments, LLC on February 22, 2008


1,000

$


$
627,272

$


$


$


$
10,609

$
637,881Net (loss) income











(5,336
)







2,207


(3,129
)Unrealized loss on interest rate swap agreement, net of tax

















(6,670
)




(6,670
)Issuance of note for equity








250





(250
)







Issuance of limited liability company interests








174














174Stock-based compensation








1,524














1,524Equity contribution in joint venture




















80


80Cash distributions




















(688
)

(688
)Balance, December 31, 2008


1,000

$


$
629,220

$
(5,336
)
$
(250
)
$
(6,670
)
$
12,208

$
629,172Net (loss) income











(9,550
)







689


(8,861
)Unrealized gain on interest rate swap agreement, net of tax

















1,938





1,938Share of equity investee's other comprehensive loss, net of tax

















(137
)




(137
)Stock-based compensation








962














962Sale of interest in a subsidiary








96











154


250Payment of note receivable from shareholder














25








25Equity contribution in joint venture




















800


800Cash distributions




















(2,142
)

(2,142
)Balance, December 31, 2009


1,000

$


$
630,278

$
(14,886
)
$
(225
)
$
(4,869
)
$
11,709

$
622,007Net (loss) income











(115,488
)







691


(114,797
)Unrealized gain on interest rate swap agreement, net of tax

















1,679





1,679Share of equity investee's other comprehensive loss, net of tax

















(201
)




(201
)Issuance of limited liability company interests








156














156Deconsolidation of a noncontrolling interest




















(78
)

(78
)Purchase of a noncontrolling interest in a joint venture








(475
)










475


Stock-based compensation








1,030














1,030Payment of note receivable from shareholder














50








50Equity contribution in joint venture




















608


608Cash distributions




















(2,246
)

(2,246
)Balance, December 31, 2010


1,000

$


$
630,989

$
(130,374
)
$
(175
)
$
(3,391
)
$
11,159

$
508,208


The accompanying notes are an integral part of the consolidated financial statements.

F-8

---



Table of Contents



RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010, 2009 and 2008

(1) Organization and Basis of Presentation

Organization

Radiation Therapy Services Holdings, Inc., through its wholly owned subsidiaries (collectively, the Company) develops and
operates radiation therapy centers that provide radiation treatment to cancer patients in Alabama, Arizona, California, Delaware, Florida, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New
Jersey, New York, North Carolina, Rhode Island, South Carolina and West Virginia. The Company also has affiliations with physicians specializing in other areas including urology and medical,
gynecological, and surgical oncology in a number of markets to strengthen the Company's clinical working relationships.

Basis of Presentation

On October 19, 2007, Radiation Therapy Services, Inc. (RTS) entered into an Agreement and Plan of Merger (the Merger
Agreement) with Radiation Therapy Services Holdings, Inc., a Delaware corporation (Parent), and RTS MergerCo, Inc., a Florida corporation and a wholly owned subsidiary of Parent (Merger
Sub). Parent is owned and controlled by Radiation Therapy Investments, LLC, a Delaware limited liability company (RT Investments).

Pursuant
to the terms of the Merger Agreement, Merger Sub merged with and into RTS, with RTS as the surviving corporation of the merger and a wholly owned subsidiary of Parent (the
Merger). In the Merger, each share of RTS common stock (other than certain shares owned by members of the Company's management team and certain employees) was converted into the right to receive
$32.50 per share in cash (the Merger Consideration). In addition, each share of restricted stock was converted into the right to receive cash in an amount equal to the Merger Consideration and all
outstanding options to acquire shares of RTS common stock became vested at the effective time of the Merger. The holder of each such option received an amount in cash equal to the excess, if any, of
the Merger Consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option.

In
connection with the Merger, the founders of the Company and certain members of the Company's senior management entered into arrangements with Vestar Capital Partners V, L.P.,
majority owner of RT Investments, to invest in RT Investments. Certain members of the Company's management team and certain employees agreed to exchange all or a portion of their shares of RTS common
stock into Class A common units and Preferred Units of RT Investments.

In
connection with the execution of the Merger Agreement, on November 1, 2007, the Predecessor obtained a waiver from its lenders under the fourth amended and restated senior
secured credit facility principally to waive any default or event of default arising from a change in control of RTS solely as a result of the execution, delivery, and performance of the Merger
Agreement.

On
February 6, 2008, RTS shareholders approved the Merger Agreement at a special meeting of the shareholders. The parties consummated the Merger in accordance with the Merger
Agreement on February 21, 2008. Upon completion of the Merger, each share of RTS common stock outstanding immediately prior to the effective time of the Merger (other than certain shares held
by members of the Company's management team and certain employees) was converted into $32.50 in cash without interest.

F-9

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(1) Organization and Basis of Presentation (Continued)

The
Merger was accounted for under the purchase method of accounting in accordance with Accounting Standards Codification (ASC) 805,Business
Combinations(ASC 805). Under purchase accounting, long-lived assets and identifiable intangible assets acquired and liabilities assumed were recorded at their
respective fair values. The term "Successor" refers to the Company following the Merger and the related transactions on February 21, 2008, described above, and the term "Predecessor" refers to
the Company prior to these transactions. The operating and cash flows results for the Predecessor period January 1, 2008 through February 21, 2008, reflect the operating results of the
Company through February 29, 2008, as the remaining business days of operations is not deemed material.

The
aggregate purchase price paid in connection with the closing of the Merger has been allocated as follows at February 21, 2008 (in thousands):

Cash and cash equivalents

$
7,477Accounts receivable, net


80,130Income taxes receivable


17,062Prepaid expenses


6,384Inventories


1,586Other current assets


2,887Equity investments in joint ventures


1,209Property and equipment


226,658Real estate subject to finance obligation


35,548Goodwill


757,589Intangible assets


116,309Other long-term assets


32,741Accounts payable and accrued expenses


(32,091
)Finance obligation


(35,611
)Debt


(518,325
)Other long-term liabilities


(5,392
)Deferred tax liabilities, net


(55,961
)Noncontrolling interest


(10,928
)$
627,272


The
Company believes it is the largest company in the U.S. focused principally on providing radiation therapy. The Company's size and scale enables it to share significant technology and
clinical resources across its national network of local providers and enables it to implement best practices for consistent quality of care and services for its patients. The Company believes that
these competitive advantages contributed to a total purchase price resulting in the recognition of goodwill.

Identifiable
intangible assets include the Company's trade name and noncompete agreements. The fair values and useful lives of identified intangible assets are based on many factors,
including estimates and assumptions of future operating performance, the specific characteristics of the identified intangible assets and historical experience.

F-10

---



Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(1) Organization and Basis of Presentation (Continued)

In
connection with the Merger, RT Investments adopted an equity-based plan and authorized an aggregate of 1,494,112 units of RT Investments interests designated Class B Units and
Class C Units pursuant to such plan. See Note 16 for additional information.

The
following table reflects the unaudited pro forma total revenues and net loss as though the Merger had taken place at the beginning of 2008, after giving effect to purchase accounting
adjustments relating to depreciation and amortization of the revalued assets, interest expense associated with the changes in consolidated debt, and other acquisition-related adjustments in connection
with the Merger.

Pro Forma
(Unaudited)(in thousands):

Year Ended
December 31
2008Total revenues

$
497,275Net loss


(1,854
)


The
pro forma information presented above does not intend to indicate what the Company's results of operations would have been if the merger had in fact occurred at the beginning of 2008
and is not intended to be a projection of the impact on future results or trends.

(2) Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and all subsidiaries and entities controlled by
the Company through the Company's direct or indirect ownership of a majority interest and/or exclusive rights granted to the Company as the general partner of such entities. All significant
intercompany accounts and transactions have been eliminated.

Variable Interest Entities

The Company has evaluated certain radiation oncology practices in order to determine if they are variable interest entities (VIEs).
This evaluation resulted in the Company determining that certain of its radiation oncology practices were potential variable interest entities. For each of these practices, the Company has evaluated
(1) the sufficiency of the fair value of the entity's equity investments at risk to absorb losses, (2) that, as a group, the holders of the equity investments at risk have (a) the
direct or indirect ability through voting rights to make decisions about the entity's significant activities, (b) the obligation to absorb the expected losses of the entity and their
obligations are not protected directly or indirectly, and (c) the right to receive the expected residual return of the entity, and (3) substantially all of the entity's activities do not
involve or are not conducted on behalf of an investor that has disproportionately fewer voting rights in terms of its obligation to absorb the expected losses or its right to receive expected residual
returns of the entity, or both. The Accounting Standards Codification (ASC), 810,Consolidation(ASC 810), requires a company to consolidate VIEs if the
company is the primary beneficiary of the activities of those entities. Certain of the Company's radiation oncology practices are variable interest entities and the Company has a variable interest in
each of these

F-11

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

practices
through its administrative services agreements. Pursuant to ASC 810, the Company, through its variable interests in these practices, has the power to direct the activities of these practices
that most significantly impact the entity's economic performance and the Company would absorb a majority of the expected losses of these practices should they occur. Based on these determinations, the
Company has consolidated these radiation oncology practices in its consolidated financial statements for all periods presented.

All
significant intercompany accounts and transactions have been eliminated. As of December 31, 2010 and 2009, the combined total assets included in the Company's balance sheet
relating to the VIEs were approximately $71.8 and $73.6 million, respectively.

As
of December 31, 2010, the Company was the primary beneficiary of, and therefore consolidated, approximately 24 VIEs, which operate approximately 44 centers. Any significant
amounts of assets and liabilities related to the consolidated VIEs are identified parenthetically on the accompanying consolidated balance sheets. The assets are owned by, and the liabilities are
obligations of the VIEs, not the Company. Only the VIE's assets can be used to settle the liabilities of the VIE. The assets are used pursuant to operating agreements established by each VIE. The VIEs
are not guarantors of the Company's debts. In the states of California, Delaware, Massachusetts, Michigan, Nevada, New York and North Carolina, the Company's treatment centers are operated as
physician office practices. The Company typically provides technical services to these treatment centers in addition to administrative services. For the years ended December 31, 2008, 2009 and
2010 approximately 23.7%, 23.6% and 22.1% of the Company's net patient service revenue, respectively, was generated by professional corporations with which it has administrative services agreements.

As
of December 31, 2010, the Company also held equity interests in 9 VIEs for which the Company is not the primary beneficiary. Those VIEs consist of partnerships that primarily
provide radiation oncology services. The Company is not the primary beneficiary of these VIEs as it does not retain the power and benefits in the operations of the entities. The Company's investments
in the unconsolidated VIEs are approximately $20.1 million and $18.7 million at December 31, 2010 and December 31, 2009, respectively, with ownership interests ranging
between 19% and 50% general partner or equivalent interest. Accordingly, all of these equity investment balances are attributed to the Company's noncontrolling interests in the unconsolidated
partnerships. The Company's maximum risk of loss related to the investments in these VIEs is limited to its equity interest.

Net Patient Service Revenue and Allowances for Contractual Discounts

The Company has agreements with third-party payers that provide for payments to the Company at amounts different from its established
rates. Net patient service revenue is reported at the estimated net realizable amounts due from patients, third-party payers and others for services rendered. Net patient service 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. The Company also has agreements with managed
care organizations to provide physician services based on negotiated fee schedules. Accordingly, the revenues reported in the Company's consolidated financial statements are recorded at the amount
that is expected to be received.

F-12

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

The
Company derives a significant portion of its revenues from Medicare, Medicaid, and other payers that receive discounts from its standard charges. The Company must estimate the total
amount of these discounts to prepare its 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. The Company estimates the allowance for contractual discounts on a payer class basis given its interpretation of the applicable regulations or
contract terms. These interpretations sometimes result in payments that differ from the Company's estimates. Additionally, updated regulations and contract renegotiations occur frequently
necessitating regular review and assessment of the estimation process by management.

On
an annual basis the Company performs a hindsight analysis in reviewing estimates to its contractual adjustments and bad debt allowance. The Company's review of the estimates are based
on a full year look-back of actual adjustments taken in the calculation of the contractual allowance and bad debt allowance. Adjustments to revenue related to changes in prior period
estimates decreased net patient service revenue by approximately $0.4 million $6.0 million, $3.5 million, and $0.7 million for the Successor year ended December 31,
2010 and 2009, and the period from February 22, 2008 to December 31, 2008, and for the Predecessor period from January 1, 2008 to February 21, 2008, respectively, or
approximately 0.1%, 1.2%, 0.8%, and 0.9% of the net patient service revenue for each of the respective periods.

For
the Successor period for the year ended December 31, 2010, December 31, 2009, and the period from February 22, 2008 to December 31, 2008, and for the
Predecessor period from January 1, 2008 to February 21, 2008, approximately 48%, 44%, 46%, and 50%, respectively, of net patient service revenue related to services rendered under the
Medicare and Medicaid programs. In the ordinary course of business, the Company is potentially subject to a review by regulatory agencies concerning the accuracy of billings and sufficiency of
supporting documentation of procedures performed. Laws and regulations governing the Medicare and Medicaid programs are extremely complex and subject to interpretation. As a result, there is a
possibility that such estimates will change by a significant amount in the near term.

Net
patient service revenue is presented net of provisions for contractual adjustments. In the ordinary course of business, the Company provides services to patients who are financially
unable to pay for their care. Accounts written off as charity and indigent care are not recognized in net patient service revenue. The Company's policy is to write off a patient's account balance upon
determining that the patient qualifies under certain charity care and/or indigent care policies. The Company's policy includes the completion of an application for eligibility for charity care. The
determination for charity care eligibility is based on income relative to federal poverty guidelines, family size, and assets available to the patient. A sliding scale discount is then applied to the
balance due with discounts up to 100%. Charity services at established charges provided by the Company and formally approved through this process approximate $10.6 million,
$12.6 million, $12.2 million, and $1.3 million for the Successor years ended December 31, 2010, December 31, 2009, the period from February 22, 2008 to
December 31, 2008, and for the Predecessor period from January 1, 2008 to February 21, 2008, respectively. These amounts are excluded from net patient service revenue.

F-13

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

Cost of Revenues

The cost of revenues for the Successor years ended December 31, 2010, December 31, 2009, and the period from
February 22, 2008 to December 31, 2008, and for the Predecessor period from January 1, 2008 to February 21, 2008, are approximately $364.4 million,
$331.9 million, $248.4 million, and $46.7 million, respectively.

Accounts Receivable and Allowances for Doubtful Accounts

Accounts receivable in the accompanying consolidated balance sheets are reported net of estimated allowances for doubtful accounts and
contractual adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from third-party payers and patients. To provide for accounts receivable that could become
uncollectible in the future, the Company establishes an allowance for doubtful accounts to reduce the carrying value of such receivables to their estimated net realizable value. Approximately
$23.0 million and $24.8 million of accounts receivable were due from the Medicare and Medicaid programs at December 31, 2010 and 2009, respectively. The credit risk for any other
concentrations of receivables is limited due to the large number of insurance companies and other payers that provide payments for services. Management does not believe that there are other
significant concentrations of accounts receivable from any particular payer that would subject the Company to any significant credit risk in the collection of its accounts receivable.

The
allowance for doubtful accounts is based upon management's assessment of historical and expected net collections, business and economic conditions, trends in federal and state
governmental health care coverage, and other collection indicators. The primary tool used in management's assessment is an annual, detailed review of historical collections and write-offs
of accounts receivable. The results of the detailed review of historical collections and write-off experience, adjusted for changes in trends and conditions, are used to evaluate the
allowance amount for the current period. Accounts receivable are written off after collection efforts have been followed in accordance with the Company's policies.

Adjustments
to bad debt expense related to changes in prior period estimates decreased bad debt expense by approximately $4.5 million and $3.8 million for the Successor
years ended December 31, 2010
and 2009, respectively and increased bad debt expense by approximately $4.1 million, and $0.7 million for the Successor period from February 22, 2008 to December 31, 2008,
and for the Predecessor period from January 1, 2008 to February 21, 2008, respectively.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

A
summary of the activity in the allowance for doubtful accounts is as follows:

Successor

Predecessor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Balance, beginning of period

$
26,352

$
26,233

$
22,776

$
20,252Additions charged to provision for doubtful accounts


8,831


12,871


17,896


3,789Deconsolidation of a noncontrolling interest


(113
)







Accounts receivable written off, net of recoveries


(14,134
)

(12,752
)

(14,439
)

(1,265
)Balance, end of period

$
20,936

$
26,352

$
26,233

$
22,776


Goodwill and Other Intangible Assets

The Company's policy is to evaluate indefinite-lived intangible assets and goodwill for possible impairment at least annually at
October 1, or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. An intangible asset with an indefinite life (a major trade
name) is evaluated for possible impairment by comparing the fair value of the asset with its carrying value. Fair value is estimated as the discounted value of future revenues arising from a trade
name using a royalty rate that an independent party would pay for use of that trade name. An impairment charge is recorded if the trade name's carrying value exceeds its estimated fair value. Goodwill
is evaluated for possible impairment by comparing the fair value of a reporting unit with its carrying value, including goodwill assigned to that reporting unit. Fair value of a reporting unit is
estimated using a combination of income-based and market-based valuation methodologies. Under the income approach, forecasted cash flows of a reporting unit are discounted to a present value using a
discount rate commensurate with the risks of those cash flows. Under the market approach, the fair value of a reporting unit is estimated based on the revenues and earnings multiples of a group of
comparable public companies and from recent transactions involving comparable companies. An impairment charge is recorded if the carrying value of the goodwill exceeds its implied fair value.

Goodwill
represents the excess purchase price over the estimated fair value of net assets acquired by the Company in business combinations. Goodwill and indefinite life intangible assets
are not amortized, but are reviewed annually for impairment, or more frequently if impairment indicators arise. Goodwill impairment was recognized for the Successor year ended December 31, 2010
of approximately $91.2 million as a result of our annual review and an additional $2.5 million relating to certain office closings. No goodwill impairment loss was recognized for the
Successor year ended December 31, 2009, the period from February 22, 2008 to December 31, 2008, and the Predecessor period from January 1, 2008 to February 21, 2008.

Intangible
assets consist of trade names, noncompete agreements, and licenses. Trade names have an indefinite life and are tested at least annually for impairment. Noncompete agreements
and licenses are amortized over the life of the agreement (which typically ranges from 2 to 10 years) using the

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

straight-line
method. No intangible asset impairment loss was recognized for the Successor years ended December 31, 2010 and 2009, and the period from February 22, 2008 to
December 31, 2008, and the Predecessor period from January 1, 2008 to February 21, 2008.

Interest Rate Swap Agreements

The Company recognizes all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value
(i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship based on its effectiveness in hedging against the
exposure. Derivatives that are not hedges must be adjusted to fair value through operating results. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of
derivatives are either offset against the change in fair value of assets, liabilities, or firm commitments through operating results or recognized in other comprehensive income until the hedged item
is recognized in operating results. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. At December 31, 2010 and 2009, the amount of hedge
ineffectiveness was immaterial to the consolidated financial statements.

The
Company enters into interest rate swap agreements to reduce the impact of changes in interest rates on its floating rate Senior Credit Facility. The interest rate swap agreements are
contracts to exchange floating rate interest payments for fixed interest payments over the life of the agreements without the exchange of the underlying notional amounts. The notional amount of
interest rate swap agreements are used to measure interest to be paid or received and do not represent the amount of exposure to credit loss. The differential paid or received on interest rate swap
agreements is recognized in interest expense in the consolidated statements of operations and comprehensive income. The related accrued receivable or payable is included in other assets or other
liabilities.

The
Company is exposed to changes in interest rates as a result of its outstanding variable rate debt. To reduce the interest rate exposure, the Company entered into an interest rate
swap agreement whereby the Company fixed the interest rate on the notional amount of approximately $290.6 million of its senior secured term loan facility, effective as of June 30, 2008.
The rate and maturity of the interest rate swap is 3.67% plus a margin, which is currently 425 basis points, and expires on March 31, 2012. The amount of the senior secured term loan facility
subject to the interest rate swap agreement will reduce from $290.6 million to $116.0 million by the end of the term. At December 31, 2010 and December 31, 2009, the amount
of the floating rate senior debt subject to the interest rate swap was $174.2 million and $232.4 million, respectively.

Predecessor

On December 30, 2005, the Company entered into an interest rate swap agreement for its fourth amended and restated senior credit
facility. The Company designated this derivative financial instrument as a cash flow hedge (i.e., the interest rate swap agreement hedged the exposure to variability in expected future cash
flows that is attributable to a particular risk). The notional amount of the swap agreement was $20.0 million. The effect of this agreement was to fix the interest rate exposure to 4.87% plus a
margin on $20.0 million of the Company's senior credit facility. The interest rate swap agreement was to expire on December 31, 2009. The fair value of the interest rate swap agreement
was the estimated amount that the Company would receive or pay to terminate the

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

agreement
at the reporting date, taking into account current interest rates and the current credit worthiness of the Company and the counter party. As a result of the Merger, the interest rate swap
agreement was terminated in February 2008. The amount paid for the termination was approximately $772,000 and is included in the early extinguishment of debt line item on the consolidated statement of
operations and comprehensive loss for the period from January 1 to February 21, 2008. There were no amounts recorded in the consolidated statement of operations and comprehensive (loss)
income related to the interest rate swap agreement due to hedge ineffectiveness.

Successor

On May 27, 2008, the Company entered into an interest rate swap agreement for its $407.0 million of floating rate senior
debt governed by the Credit Agreement dated February 21, 2008 (Senior Credit Facility). The Company has designated this derivative financial instrument as a cash flow hedge (i.e., the
interest rate swap agreement hedges the exposure to variability in expected future cash flows that is attributable to interest rate risk). The initial notional amount of the swap agreement was
$290.6 million with amounts scaling down during various quarters throughout the term of the interest rate swap agreement to $116.0 million. The effect of this agreement is to fix the
interest rate exposure to 3.67% plus a margin on $174.2 million of the Company's Senior Credit Facility. The interest rate swap agreement expires on March 31, 2012. The fair value of the
interest rate swap agreement is the estimated amount that the Company would receive or pay to terminate the agreement at the reporting date, taking into account current interest rates and the current
credit worthiness of the Company and the counter party. At December 31, 2010 and 2009, the fair value of the Company's interest rate swap agreement is a liability of approximately
$5.0 million and $7.7 million, respectively, which is included in other long term liabilities in the accompanying consolidated balance sheets.

Professional and General Liability Claims

The Company is subject to claims and legal actions in the ordinary course of business, including claims relating to patient treatment,
employment practices, and personal injuries. To cover these types of claims, the Company maintains general liability and professional liability insurance in excess of self-insured
retentions through commercial insurance carriers in amounts that the Company believes to be sufficient for its operations, although, potentially, some claims may exceed the scope of coverage in
effect. The Company expenses an estimate of the costs it expects to incur under the self-insured retention exposure for general and professional liability claims. The Company maintains
insurance for the majority of its physicians up to $1 million on individual malpractice claims and $3 million on aggregate claims on a claims-made basis. The Company
purchases medical malpractice insurance from an insurance company partially owned by a related party. The Company's reserves for professional and general liability claims are based upon independent
actuarial calculations, which consider historical claims data, demographic considerations, severity factors, industry trends, and other actuarial assumptions.

Actuarial
calculations include a large number of variables that may significantly impact the estimate of ultimate losses that are recorded during a reporting period. Professional
judgment is used by the actuary in determining the loss estimate, by selecting factors that are considered appropriate by the actuary for the Company's specific circumstances. Changes in assumptions
used by the Company's

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

actuary
with respect to demographics, industry trends, and judgmental selection of factors may impact the Company's recorded reserve levels.

The
amount accrued for professional and general liability claims as of the consolidated balance sheet dates reflects the current estimates of all outstanding losses, including incurred
but not reported losses, based upon actuarial calculations. The loss estimates included in the actuarial calculations may change in the future based upon updated facts and circumstances. The amount
accrued for professional liability claims was $1.3 million and $0.8 million at December 31, 2010 and 2009, respectively.

Noncontrolling Interest in Consolidated Entities

The Company currently maintains equity interests in 10 treatment center facilities with ownership interests ranging from 51.0% to
90.0%. Since the Company controls more than 50% of the voting interest in these facilities, the Company consolidates these treatment centers. The
noncontrolling interests represent the equity interests of outside investors in the equity and results of operations of these consolidated entities.

In
addition, in accordance with ASC 810,Consolidation, the Company consolidates certain radiation oncology practices where the Company
provides administrative services pursuant to long-term management agreements. The noncontrolling interests in these entities represent the interests of the physician owners of the oncology
practices in the equity and results of operations of these consolidated entities.

On
January 1, 2009, the Company adopted changes issued by the Financial Accounting Standards Board ("FASB") to the accounting for noncontrolling interests in consolidated
financial statements. These changes require, among other items, that a noncontrolling interest be included within equity separate from the parent's equity; consolidated net income be reported at
amounts inclusive of both the parent's and noncontrolling interest's shares; and, separately, the amounts of consolidated net income attributable to the parent and noncontrolling interest all be
reported on the consolidated statements of operations and comprehensive loss. The adoption of the changes has been applied retrospectively for all periods presented.

The
Company could be obligated, under the terms of the operating agreements governing certain of its joint ventures, upon the occurrence of various fundamental regulatory changes and/or
upon the occurrence of certain events outside of the Company's control to purchase some or all of the noncontrolling interests related to the Company's consolidated subsidiaries. These repurchase
requirements would be triggered by, among other things, regulatory changes making the existing ownership structure illegal. While the Company is not aware of events that would make the occurrence of
such a change probable, regulatory changes are outside the control of the Company. Accordingly, the noncontrolling interests subject to these repurchase provisions have been classified outside of
equity on the Company's consolidated balance sheets.

Use of Estimates

The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

Estimates
also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original maturities of three months or less when purchased.

Inventories

Inventories consist of parts and supplies used for repairs and maintenance of equipment owned or leased by the Company. Inventories are
valued at the lower of cost or market. The cost of parts and supplies is determined using the first-in, first-out method.

Property and Equipment

Property and equipment are recorded at historical cost less accumulated depreciation and are depreciated over their estimated useful
lives utilizing the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful life of the improvement or the life of the lease. Amortization of
leased assets is included in depreciation and amortization in the accompanying consolidated statements of operations and comprehensive loss. Expenditures for repairs and maintenance are charged to
operating expense as incurred, while equipment replacement and betterments are capitalized.

Major
asset classifications and useful lives are as follows:

Buildings and leasehold improvements

10 - 39 yearsOffice, computer, and telephone equipment

3 - 10 yearsMedical and medical testing equipment

5 - 10 yearsAutomobiles and vans

5 years


The
weighted-average useful life of medical and medical testing equipment is 9.5 years and 9.8 years in 2010 and 2009, respectively.

The
Company evaluates its long-lived assets for possible impairment whenever circumstances indicate that the carrying amount of the asset, or related group of assets, may not
be recoverable from estimated future cash flows, in accordance with ASC 360,Property, Plant, and Equipment. Fair value estimates are derived from
independent appraisals, established market values of comparable assets, or internal calculations of estimated future net cash flows. The Company's estimates of future cash flows are based on
assumptions and projections it believes to be reasonable and supportable for a market.

Recent Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued changes to the accounting for variable interest entities. These
changes require an enterprise (i) to perform an analysis to determine whether the enterprise's variable interest or interests give it a controlling financial interest in a variable interest
entity; (ii) to require ongoing reassessments of whether an enterprise is the primary

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

beneficiary
of a variable interest entity; (iii) to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity; (iv) to
add an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity investment at
risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity's economic performance; and
(v) to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The
Company adopted the changes on January 1, 2010, which had no material impact to the presentation of the consolidated financial statements.

In
accordance ASC 810, the Company consolidates certain radiation oncology practices where the Company provides administrative services pursuant to long-term management
agreements. The noncontrolling interests in these entities represent the interests of the physician owners of the oncology practices in the equity and results of operations of these consolidated
entities.

The
Company could be obligated, under the terms of the operating agreements governing certain of its joint ventures, upon the occurrence of various fundamental regulatory changes and or
upon the occurrence of certain events outside of the Company's control to purchase some or all of the noncontrolling interests related to the Company's consolidated subsidiaries. These repurchase
requirements would be triggered by, among other things, regulatory changes prohibiting the existing ownership structure. While the Company is not aware of events that would make the occurrence of such
a change probable, regulatory changes are outside the control of the Company. Accordingly, the noncontrolling interests subject to these repurchase provisions have been classified outside of equity on
the Company's consolidated balance sheets.

In
January 2010, the FASB issued ASU 2010-06,Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements,(ASU 2010-06), which amendsFair Value Measurements and Disclosures(ASC 820) to clarify certain
existing disclosure requirements and to require a number of additional disclosures, including amounts and reasons for significant transfers between the three levels of the fair value hierarchy, and
presentation of certain information in the reconciliation of recurring Level 3 measurements on a gross basis. ASU 2010-06 was effective for the Company on January 1, 2010,
with certain disclosures
effective for periods beginning January 1, 2011. The initial adoption of ASU 2010-06 resulted in additional disclosure in the notes to the financial statements but did not have an
impact on the Company's financial position or results of operations.

In
August 2010, the FASB issued ASU 2010-23,Health Care Entities (Topic 954): Measuring Charity Care for Disclosure(ASU
2010-23), which amends ASC 954 to require that cost be used as the measurement basis for charity care disclosure purposes and that cost be identified as the direct and indirect costs of
providing the charity care. ASU 2010-23 is effective for the Company on January 1, 2011. The initial adoption of ASU 2010-23 will result in revised disclosures in the
notes to the financial statements but will not have an impact on the Company's financial position or results of operations.

In
August 2010, the FASB issued ASU 2010-24,Health Care Entities (Topic 954): Presentation of Insurance Claims and Related Insurance
Recoveries(ASU 2010-24), which amends ASC 954 to clarify that a health care entity cannot net insurance recoveries against a related claim liability. Additionally,
ASU 2010-24 notes the amount of the claim liability should be determined without consideration of

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

insurance
recoveries. ASU 2010-24 is effective for the Company on January 1, 2011. The Company is currently assessing the impact of this guidance on its financial statements.

Advertising Costs

Advertising costs are charged to general and administrative expenses as incurred and amounted to approximately $2.0 million,
$1.8 million and $1.4 million, for the years ended December 31, 2010, 2009, and 2008, respectively.

Comprehensive Loss

Comprehensive loss consists of two components, net loss and other comprehensive loss. Other comprehensive loss refers to revenue,
expenses, gains, and losses that under accounting principles generally accepted in the United States are recorded as an element of equity but are excluded from net loss. The Company's other
comprehensive loss is composed of unrealized gains and losses on an interest rate swap agreements accounted for as a cash flow hedge and the Company's
share of foreign currency translation for its equity investment in foreign joint ventures. This net gain increased total equity on a consolidated basis by approximately $1.5 million (net of
$0.8 million of income tax) and $1.8 million (net of $1.0 million of income tax) for the year ended December 31, 2010 and 2009, respectively and decreased total equity by
approximately $6.7 million (net of $3.6 million of income tax) during the Successor period February 22, 2008 to December 31, 2008.

Income Taxes

The Company provides for federal, state, and foreign income taxes currently payable, as well as for those deferred due to timing
differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is
recognized as income or expense in the period that includes the enactment date.

Stock-Based Compensation

Predecessor

Effective January 1, 2006, the Company adopted the provisions of ASC 718,CompensationStock
Compensation, for the Company's 2004 Stock Incentive Plan (2004 Option Plan). All share-based compensation cost is measured at the grant date, based on the fair value of the
award, and is recognized as an expense in the statements of operations and comprehensive loss over the requisite service period.

The
Company adopted ASC 718,CompensationStock Compensation, using the modified prospective transition method for all other
stock-based compensation awards. Upon adoption ofASC 718 CompensationStock Compensation, the Company used the Black-Scholes
valuation model for valuing all stock options. Compensation for nonvested stock grants is measured at fair value on the

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

grant
date based on the number of shares expected to vest and the quoted market price of the Company's common stock. Compensation cost for all awards were recognized in earnings, net of estimated
forfeitures, on a straight-line basis over the requisite service period.

At
the time of the Merger, all unvested stock options and restricted stock vested in accordance with the change of control provision of the original stock option agreements. According to
the Merger Agreement, all stock options and restricted stock outstanding at the time of the Merger were cancelled, and the holders of each such option and restricted stock received a cash payment in
the amount equal to the excess of the Merger Consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option, for which a compensation charge
was recorded in the Predecessor's consolidated statement of operations and comprehensive (loss) income.

Successor

In connection with the Merger, RT Investments adopted a new equity-based plan, and during the period from February 22, 2008 to
December 31, 2008, issued units of limited liability company interests designated Class B Units and Class C Units pursuant to such plan. The units are limited liability company
interests and are available for issuance to the Company's employees and members of the Board of Directors for incentive purposes. For purposes of determining the compensation expense associated with
these grants, management valued the business enterprise using a variety of widely accepted valuation techniques, which considered a number of factors such as the financial performance of the Company,
the values of comparable companies and the lack of marketability of the Company's equity at grant date. The Company then used the option pricing method to determine the fair value of these units at
the time of grant using valuation assumptions consisting of the expected term in which the units will be realized; a risk-free interest rate equal to the U.S. federal treasury bond rate
consistent with the term assumption; expected dividend yield, for which there is none; and expected volatility based on the historical data of equity instruments of comparable companies. The
Class B units vest over a four-year service period. The Class C units vest based on certain performance measures and/or market conditions being met or achieved. The estimated
fair value of the units, less an assumed forfeiture rate, are recognized in expense on a straight-line basis over the requisite service periods of the awards for the Class B units
and the accelerated attribution method approach is utilized for the Class C units.

Fair Value of Financial Instruments

The carrying values of the Company's financial instruments, which include cash and cash equivalents, accounts receivable and accounts
payable approximate their fair values due to the short-term maturity of these instruments.

The
carrying values of the Company's long-term debt approximates fair value due either to the length to maturity or the existence of interest rates that approximate
prevailing market rates unless otherwise disclosed in these consolidated financial statements.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(2) Summary of Significant Accounting Policies (Continued)

Segments

The Company's business of providing health care services to patients comprises a single reportable operating segment under ASC 280, Segment
Reporting.

Reclassifications

Certain reclassifications totaling approximately $2.7 million to increase property and equipment, net and decrease other
assets-long term have been made to the consolidated balance sheet at December 31, 2009. This reclassification had no effect on previously reported total assets, equity, net loss, or
comprehensive loss.

(3) Property and Equipment

Property and equipment consist of the following:

(in thousands):

December 31,
2010

December 31,
2009Land

$
1,770

$
1,888Buildings and leasehold improvements


51,156


51,200Office, computer, and telephone equipment


43,492


29,230Medical and medical testing equipment


214,712


190,687Automobiles and vans


1,246


1,108312,376


274,113Less accumulated depreciation


(84,202
)

(48,882
)228,174


225,231Construction-in-progress


1,491


548$
229,665

$
225,779


During
the fourth quarter of 2010, the Company impaired certain leasehold improvements and other fixed assets of approximately $3.5 million for planned closings of certain offices
in California and Michigan.

(4) Capital Lease Arrangements

The Company leases certain equipment under agreements, which are classified as capital leases. These leases have bargain purchase options at the end of the original lease terms. Capital
leased assets included in property and equipment are as follows:

(in thousands):

December 31,
2010

December 31,
2009Equipment

$
38,309

$
42,380Less: accumulated amortization


(10,917
)

(7,594
)$
27,392

$
34,786


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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(4) Capital Lease Arrangements (Continued)

Amortization
expense relating to capital leased equipment was approximately $4.1 million $4.4 million, $3.4 million, and $1.3 million, for the Successor years
ended December 31, 2010 and 2009, and the Successor period from February 22, 2008 to December 31, 2008, and the Predecessor period from January 1, 2008 to
February 21, 2008, respectively, and is included in depreciation expense in the consolidated statements of operations and comprehensive loss.

(5) Goodwill and Intangible Assets

The Company completed its annual impairment testing for goodwill and indefinite-lived intangible assets on October 1, 2010. In performing this test, the Company assesses the
implied fair value of its goodwill and intangible assets. If it is determined that the implied fair value of goodwill and/or indefinite-lived intangible assets is less than the carrying amount, an
impairment charge, equal to the excess is recorded. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The estimated
fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit (including the unrecognized intangible assets) as if the reporting unit had been acquired in a
business combination and the estimated fair value of the reporting unit was the purchase price paid. Based on (i) assessment of current and expected future economic conditions,
(ii) trends, strategies and forecasted cash flows at each reporting unit and (iii) assumptions similar to those that market participants would make in valuing the Company's reporting
units, the Company's management determined that the carrying value of goodwill in certain markets, including California, South West United States (central Arizona and Las Vegas, Nevada) and the
Florida east coast regions exceeded their fair value. Accordingly, the Company recorded noncash impairment charges totaling $91.2 million in the consolidated statements of operations.
Subsequent to the Company's October 1 annual goodwill impairment testing, the Company evaluated the economic performance of certain of its California offices. The Company concluded that it is
unlikely these offices will remain operational beyond 2011. Pursuant toASC 350 IntangiblesGoodwill and Other, the Company recorded an
additional $2.5 million noncash impairment charge based on the relative fair value of these offices as compared to the fair value of the portion of the California reporting unit to be retained.
Impairment charges relating to goodwill are summarized as follows:

(in thousands):

California

South West
United States

Florida east
coast

TotalGoodwill

$
35,033

$
46,377

$
12,256

$
93,666


The
estimated fair value measurements were developed using significant unobservable inputs (Level 3). For goodwill, the primary valuation technique used was an income methodology
based on management's estimates of forecasted cash flows for each reporting unit, with those cash flows discounted to present value using rates commensurate with the risks of those cash flows. In
addition, management used a market-based valuation method involving analysis of market multiples of revenues and earnings before interest, taxes, depreciation and amortization ("EBITDA") for
(i) a group of comparable public companies and (ii) recent transactions, if any, involving comparable companies. For trade name intangible assets, management used the income-based
relief-from-royalty valuation method in which fair value is the discounted value of forecasted royalty revenues arising from a trade name

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RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(5) Goodwill and Intangible Assets (Continued)

using
a royalty rate that an independent party would pay for use of that trade name. Assumptions used by management were similar to those that would be used by market participants performing
valuations of these regional divisions. Management's assumptions were based on analysis of current and expected future economic conditions and the strategic plan for each reporting unit.

Intangible
assets consist of the following:

December 31, 2010(in thousands):
Intangible assets subject to amortization

Gross

Accumulated
Amortization

NetNoncompete agreements

$
55,767

$
(33,855
)
$
21,912Other licenses


145


(145
)






Intangible assets not subject to amortization
(indefinite-lived)Trade names


63,324





63,324$
119,236

$
(34,000
)
$
85,236


December 31, 2009(in thousands):
Intangible assets subject to amortization

Gross

Accumulated
Amortization

NetNoncompete agreements

$
55,467

$
(26,543
)
$
28,924Other licenses


145


(122
)

23




Intangible assets not subject to amortization
(indefinite-lived)Trade names


63,324





63,324$
118,936

$
(26,665
)
$
92,271


Amortization
expense relating to intangible assets was approximately $7.3 million, $14.6 million, $12.1 million, and $0.4 million for the Successor years
ended December 31, 2010 and 2009, for the Successor period from February 22, 2008 to December 31, 2008, and for the Predecessor period from January 1, 2008 to
February 21, 2008, respectively. The weighted-average amortization period is approximately 4.0 years.

Estimated
future amortization expense is as follows (in thousands):

2011

$
5,9532012


5,7542013


5,7532014


2,3852015


1,586


F-25

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(5) Goodwill and Intangible Assets (Continued)

The
changes in the carrying amount of goodwill are as follows:

Successor

Predecessor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Balance, beginning of period

$
826,641

$
824,579

$


$
202,383Goodwill due to Merger








757,589


Goodwill recorded during the period


37,923





58,147


Goodwill recorded in joint venture arrangement








8,317


Earn-out provisions





2,250


350


Impairment


(93,666
)







Adjustments to purchase price allocations





(188
)

176


114Balance, end of period

$
770,898

$
826,641

$
824,579

$
202,497


(6) Acquisitions

Successor

In April 2008, the Company acquired the assets of a radiation treatment center located in southwest Florida for approximately
$25,140,000. The center purchased in southwest Florida will further expand the Company's presence in the market. The allocation of the purchase price is to tangible assets of $4,765,000, noncompete
agreements of $1,126,000, amortized over 10 years, and goodwill of $19,249,000.

In
June 2008, the Company acquired the assets of three radiation treatment centers located in Sun City and Phoenix, Arizona, for approximately $23,413,000. The centers purchased in
Arizona further expand the Company's presence into the central Arizona market. The allocation of the purchase price is to tangible assets of $2,885,000, noncompete agreements of $1,501,000, amortized
over seven years, and goodwill of $19,027,000. In addition to the $23,413,000, the purchase price arrangement included a $2,250,000 deferred purchase price contingent on reaching a certain level of
business volume. In September 2009, the centers achieved the level of business volume and the $2,250,000 was paid from restricted cash and recorded as additional goodwill.

In
July 2008, the Company acquired the assets of a radiation treatment center located in Fairlea, West Virginia, for approximately $17,682,000. The center purchased in West Virginia
further expands the Company's presence into the West Virginia market, which is a certificate of need state. The allocation of the purchase price is to tangible assets of $303,000, and goodwill of
$17,378,000. In addition to the $17,682,000, the purchase price arrangement included a $2,000,000 deferred purchase price contingent on the transfer of the certificate of need license. The certificate
of need license was transferred in January 2009 and the funds including interest totaling approximately $2,005,000 were paid.

F-26

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(6) Acquisitions (Continued)

In
October 2008, the Company contributed a radiation treatment center located in Northern California to a joint venture with a hospital. The hospital contributed the assets of the
hospital radiation department and the assets of a radiation facility on its hospital campus to the joint venture. As a result of the contribution, the Company recognized a gain of approximately
$3.1 million for the sale of a portion of the interest in the Company's radiation treatment center. The Company maintains a 57.3% ownership interest in the joint venture and the net assets and
results of the operations of the joint venture are included in the consolidated financial statements of the Company, including goodwill of approximately $8,316,000.

During
2008, the Company acquired the assets of several urology and medical oncology practices in Florida for approximately $1,928,000. The urology and medical oncology practices provide
synergistic clinical services to our patients. The allocation of the purchase price is to tangible assets of $1,440,000 and goodwill of $488,000.

In
January 2009, the Company purchased from family members of a related party (i) a 33% interest in a joint venture that holds a majority equity interest in and manages 26
radiation therapy treatment centers in South America, Central America and the Caribbean and (ii) a 19% interest in a joint venture, which operates a treatment center in Guatemala, for
approximately $10,411,000, subject to final determination of the purchase price based on a multiple of historical earnings before interest, taxes, and depreciation and amortization. In January 2010,
the Company finalized the amount due for its 33% interest in the joint venture and paid an additional $1,900,000. The transaction has been accounted for under the equity method.

During
2009, the Company acquired the assets of several urology practices in Florida for approximately $199,000. The urology practices provide synergistic clinical services to our
patients. The allocation of the purchase price is to tangible assets of $199,000.

In
March 2010, the Company contributed approximately $2,975,000 in tangible assets for a 77.3% interest in a joint venture with a group of physicians to open a radiation treatment center
in El Segundo, California. The radiation treatment center expands the Company's presence in the California market.

In
April 2010, the Company entered into definitive agreements to acquire all the outstanding stock of Carolina Regional Cancer Center, P.A. for the acquisition of a radiation treatment
center in Myrtle Beach, South Carolina that holds three certificate of need licenses, and Atlantic Urology Clinics, LLC, Adult & Pediatric Urology Center of the Carolina, P.A., Coastal
Urology Center, P.A. and Grand Strand Urology, LLP with respect to the acquisition of the assets of these Myrtle Beach-based physician practices. On May 3, 2010, the Company consummated
these acquisitions for a combined purchase price of approximately $34,543,000 in cash. The acquisition of the Myrtle Beach facility expands the Company's presence into a new local market within an
existing regional division. The allocation of the purchase price is to tangible assets, primarily consisting of medical equipment of $4,773,000 and assumed liabilities of approximately $310,000. The
excess of the purchase price over the fair value of the assets acquired was allocated to goodwill of $30,080,000, which is expected to be deductible for tax purposes, representing primarily the value
of synergies expected from the transaction. The purchase price allocations are subject to revision as the Company obtains additional information. See Note 18 on the pro forma financial
information.

F-27

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(6) Acquisitions (Continued)

During
the year ended December 31, 2010 we recorded $12.4 million of net patient service revenue and reported net income of $1.9 million in connection with the
Carolina Regional Cancer Center, P.A. acquisition.

In
December 2010, the Company acquired the assets of a radiation treatment center located in Princeton, West Virginia for approximately $7,985,000. The center purchased in West Virginia
further expands the Company's presence into the West Virginia market, which is a certificate of need state. The allocation of the purchase price is to tangible assets, primarily consisting of medical
equipment of $163,000, and assumed liabilities of approximately $8,000. The excess of the purchase price over the fair value of the assets acquired was allocated to goodwill of $7,830,000. The
purchase price allocations are subject to revision as the Company obtains additional information.

During
2010, the Company acquired the assets of several physician practices in Florida and Arizona for approximately $860,000. The physician practices provide synergistic clinical
services to our patients in the respective markets in which we treat. The allocation of the purchase price is to tangible assets of $847,000 and goodwill of $13,000.

The
operations of the foregoing acquisitions have been included in the accompanying consolidated statements of operations and comprehensive loss from the respective dates of each
acquisition.

Allocation of Purchase Price

The purchase prices of these transactions were allocated to the assets acquired and liabilities assumed based upon their respective
fair values. The purchase price allocations for certain recent transactions are subject to revision as the Company obtains additional information. Excluding the investments in the South America,
Central America, the Caribbean, Guatemala and El Segundo joint ventures, which are accounted for as equity investments, the operations of the foregoing acquisitions have been included in the
accompanying consolidated statements of operations and comprehensive loss from the respective dates of acquisition. The following table summarizes the allocations of the aggregate purchase price of
the acquisitions, including assumed liabilities.

Successor

Predecessor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Fair value of net assets acquired, excluding cash:Inventories

$
65

$


$


$
Other current assets


614





530


Other noncurrent assets


18





2


Property and equipment


5,086


199


11,797


Intangible assets








2,627


Goodwill


37,923


2,250


58,673


114Current liabilities


(318
)







$
43,388

$
2,449

$
73,629

$
114


F-28

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(7) Other Income and Loss

Impairment Loss

During 2009, the Company recorded an impairment loss of approximately $3.5 million primarily relating to an impairment loss
incurred of approximately $1.8 million for the write down to fair value of certain of the Company's liner accelerators and CT machines due to technological obsolescence. The adjustment to
machine inventories was due to several considerations, including the planned use of RapidArc technology on 3-D digital machines for which this technology cannot be implemented on
2-D digital machines or analog machines. RapidArc radiotherapy technology is an effective cancer treatment representing an advanced new form of image-guided IMRT. This technology enables
clinicians to program a linear accelerator to deliver precise forms of IMRT up to eight times faster than other IMRT systems. It does this by delivering the complete IMRT treatment to the patient in
fewer rotations than traditional IMRT.

Impairment
loss of approximately $97.9 million was recognized in 2010 related to our write-off of our investment in a 50% interest in an international freestanding
radiation center in Mohali, India of approximately $0.7 million, certain planned office closings in California and Michigan of approximately $3.5 million and goodwill impairment in
certain of our reporting units, including California, Southwest U.S. (Arizona and Nevada) and the Florida east coast of approximately $93.7 million.

Early Extinguishment of Debt

In connection with the Merger in February 2008, the Predecessor incurred expenses of approximately $3.7 million for early
extinguishment of debt relating to the termination of certain capital lease obligations, termination of its interest rate swap agreement and the write-off of deferred financings costs
relating to the extinguishment of the previous senior secured credit facility.

On
April 20, 2010, the Company issued $310.0 million in aggregate principal amount of 97/8% senior subordinated notes due 2017 and repaid the existing
$175.0 million in aggregate principal amount 13.5% senior subordinated notes due 2015, including accrued and unpaid interest and a call premium of approximately $5.3 million. The Company
incurred approximately $10.9 million in early extinguishment of debt as a result of the prepayment of the $175.0 million in senior subordinated notes, which included a call premium
payment of approximately $5.3 million, the write-offs of $2.5 million in deferred financing costs and $3.1 million in original issue discount costs.

Termination of Professional Services Agreement

In March 2008, the Successor terminated its professional services agreement with a practice in central Arizona, which maintained
exclusive rights to expand into the market. The Company paid approximately $7.0 million for the buy-out, which provided the Company with the ability to further expand into the
central Arizona market, with the purchase of three radiation treatment centers located in Sun City and Phoenix, Arizona.

Loss on Sale of Real Estate

In September 2008, the Successor entered into a sale-leaseback transaction with a third party. The Company sold 12 real
estate properties located in Florida, Maryland, and Michigan for approximately $40.4 million. The Company incurred a loss of approximately $1.0 million and deferred a gain of

F-29

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(7) Other Income and Loss (Continued)

approximately
$1.3 million on the sale of the real estate. The Company subsequently leased back the properties from the third party with terms of 20 years and four separate renewal
option terms for five years each.

Gain on Sale of Interest in a Radiation Practice

In October 2008, the Successor contributed a radiation treatment center located in Northern California to a joint venture with a
hospital. The hospital contributed the assets of the hospital radiation department and the assets of a radiation facility on its hospital campus to the joint venture. As a result of the contribution,
the Company recognized a gain of approximately $3.1 million for the sale of a portion of the interest in the Company's radiation treatment center. The Company maintains a 57.3% ownership
interest in the joint venture and the net assets and results of the operations of the joint venture are included in the consolidated financial statements of the Company, including goodwill of
approximately $8,316,000.

Loss on sale of assets of a radiation treatment center

In January 2007, the Company acquired a 67.5% interest in Gettysburg Radiation, LLC (GR), which at that time was in the final
stages of developing a free-standing radiation therapy treatment center in Gettysburg, Pennsylvania. Approximately a year later, GR expanded its operations to a second location in
Littlestown, Pennsylvania. Due to the poor local economy, as well as the opening of a radiation therapy center by a nearby hospital, the performance of both the Gettysburg and Littlestown facilities
deteriorated significantly. During the fourth quarter of 2009, the Littlestown facility was closed. On April 30, 2010, the Company sold certain assets of the Gettysburg facility to one of GR's
minority equity-holders for approximately $925,000 and incurred a loss on the sale of approximately $1.9 million. The loss is
presented as a separate expense in the consolidated statements of operations and comprehensive (loss) income.

(8) Income Taxes

Significant components of the income tax provision are as follows:

Successor

Predecessor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Current provision:Federal

$
2,414

$
1,791

$
(1,232
)
$
2,718State


4,474


598


1,643


(144
)Deferred (benefit) provision:Federal


(19,845
)

(2,876
)

(61
)

(1,662
)State


147


1,489


(1,763
)

(342
)Total income tax provision (benefit)

$
(12,810
)
$
1,002

$
(1,413
)
$
570


F-30

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(8) Income Taxes (Continued)

A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate on income before income taxes are as follows:

Successor

PredecessorYear Ended
December 31,
2010

Year Ended
December 31,
2009

Period From
February 22 to
December 31,
2008

Period From
January 1 to
February 21,
2008Federal statutory rate


35.0
%

35.0
%

35.0
%

35.0
%State income taxes, net of federal income tax benefit


1.4


25.2


1.2


(2.3
)Nondeductible charge for merger-related costs











(32.1
)Nondeductible charge for stock-based compensation


(0.3
)

(5.0
)

(7.9
)

Nondeductible charge for lobbying and political donations


(0.3
)

(4.1
)

(3.5
)

(0.5
)Goodwill impairment


(13.8
)







Tax rate changes on existing temporary differences


(0.4
)

13.3





(2.2
)Income from noncontrolling interests


0.6


10.3





Valuation allowance increase


(11.2
)

(51.0
)




Purchase accounting adjustments





(16.5
)




Federal and state true-ups


(1.0
)

(17.7
)




Uncertain tax positions current year


(1.1
)

(1.3
)

(0.4
)

Prior period adjustments for uncertain tax positions and deferred tax true-ups


1.6








Other permanent items


(0.4
)

(3.1
)

(3.4
)

(3.4
)Total income tax provision


10.1
%

(14.9
)%

21.0
%

(5.5
)%


The
Company provides for income taxes using the liability method in accordance with ASC 740,Income Taxes. Deferred income taxes arise
from the temporary differences in the recognition of income

F-31

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(8) Income Taxes (Continued)

and
expenses for tax purposes. Deferred tax assets and liabilities are comprised of the following at December 31, 2010 and 2009:

(in thousands):

December 31,
2010

December 31,
2009Deferred income tax assets:Provision for doubtful accounts

$
4,848

$
8,134State net operating loss carryforwards


6,336


5,058Federal net operating loss carryforwards


22,525


7,418Deferred rent liability


2,034


1,123Management fee receivable allowance


9,945


7,445Merger costs


2,724


1,026Unrealized loss on swap


2,058


3,064Other


7,064


1,321Gross deferred income tax assets


57,534


34,589Valuation allowance


(17,641
)

(3,422
)Net deferred income tax assets


39,893


31,167Deferred income tax liabilities:Property and equipment


(36,128
)

(35,286
)Intangible assets


(29,514
)

(39,726
)Prepaid expense


(1,217
)

(1,493
)Partnership interests


(2,970
)

(3,201
)Other


(1,315
)

(1,359
)Total deferred tax liabilities


(71,144
)

(81,065
)Net deferred income tax liabilities

$
(31,251
)
$
(49,898
)


ASC
740,Income Taxes, requires that a valuation allowance be established when it is more likely than not that all or a portion of a
deferred tax asset will not be realized. In 2009, the Company determined that a valuation allowance of $3.4 million was appropriate under the provisions of ASC 740. This
valuation allowance of $3.4 million was against state deferred tax assets. Primarily because of the current year taxable loss for the year ended December 31, 2010, the Company determined
that the valuation allowance should be $17.6 million, consisting of $12.3 million against federal deferred tax assets and $5.3 million against state deferred tax assets. This
represents an increase of $14.2 million in valuation allowance.

During
the year ended December 31, 2010, the Company undertook an analysis of its cumulative position with respect to income taxes on the balance sheet and identified certain
balance adjustments required to be recorded. Those adjustments resulted in a current year tax benefit in the amount of $2.0 million, which is the difference between the tax benefit resulting
from an $8.7 million adjustment to deferred tax assets and the tax expense resulting from an additional 4.0 million to tax contingency.

F-32

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(8) Income Taxes (Continued)

The
Company has federal net operating loss carryforwards beginning to expire in 2028 available to offset future taxable income of approximately $64.4 million and
$21.2 million at December 31, 2010 and 2009, respectively.

At
December 31, 2010 and 2009 the Company has state net operating loss carryforwards, primarily in Florida and Kentucky beginning to expire in years 2011 through 2028, available
to offset future taxable income of approximately $157.9 million, and $120.1 million, respectively. Utilization of net operating loss carryforwards in any one year may be limited.

ASC
740,Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and
prescribes a threshold for the recognition and measurement of tax position taken or expected to be taken on a tax return. Under ASC 740,Income Taxes,
the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by
the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740,Income
Taxes, provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Since
its adoption for uncertainty in income taxes pursuant to ASC 740,Income Taxes, the Company has recognized interest and penalties
accrued related to unrecognized tax exposures in income tax expense. During the year ended December 31, 2010, the Company accrued approximately $2.1 million in interest and penalties
related to unrecognized tax exposures in income tax expense. The Company had accrued $25,000 as of December 31, 2009. The Company did not make any payments of interest and penalties accrued
during the years ended December 31, 2010, and 2009.

A
reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is a follows (in thousands):

Gross unrecognized tax benefits at January 1, 2008

$
217Increase in tax positions for current year


43Gross unrecognized tax benefits at December 31, 2008

$
260Gross unrecognized tax benefits at January 1, 2009

$
260Increase in tax positions for prior years


59Increase in tax positions for current year


78Gross unrecognized tax benefits at December 31, 2009

$
397Gross unrecognized tax benefits at January 1, 2010

$
397Increase in tax positions for prior years


4,864Increase in tax positions for current year


706Gross unrecognized tax benefits at December 31, 2010

$
5,967


The
total amount of gross unrecognized tax benefits that, if recognized, would affect that effective tax rate was $1.7 million, $0.3 million at December 31, 2010 and
2009, respectively. The Company expects that unrecognized tax benefits in the amount of $3.4 million will reverse within the next 12 months due to resolution of ongoing federal income
tax audits. Moreover, the Company expects that

F-33

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(8) Income Taxes (Continued)

unrecognized
tax benefits in the amount of $2.5 million will reverse within the next 12 months due to resolution of ongoing state income tax audits.

The
Company is subject to taxation in the United States and approximately 20 state jurisdictions. However, the main material jurisdictions for which we are subject to tax are the United
States and Florida.

The
Company is routinely under audit by federal, state, or local authorities in the areas of income. These audits include questioning the timing and amount of deductions and compliance
with federal, state, and local tax laws. In accordance with the statute of limitations for federal tax returns, the Company's federal tax returns for the years 2005 through 2010 are subject to
examination. The Company is currently undergoing a federal income tax audit for tax years 2005 through 2008 and New York State audit for tax years 2006 through 2008.

(9) Long-Term Debt

In connection with the Merger in 2008, the Company terminated all commitments under the previous senior credit facility and repaid all outstanding borrowings under the previous senior
credit facility and
paid any accrued and unpaid interest. The Successor Senior Credit Facility consists of a $347.0 million six-year senior secured term loan facility ($40.0 million under a
delayed draw tranche B term loan), and a $60.0 million five-year senior secured revolving credit facility. At the closing of the Merger, the Company borrowed
$307.0 million under the senior secured term loan facility, utilized $3.1 million of its senior secured revolving credit facility and obtained a $175.0 million senior subordinated
interim loan agreement. The Company incurred expenses of approximately $3.7 million for early extinguishment of debt relating to the termination of certain capital lease obligations,
termination of its interest rate swap agreement, and the write-off of deferred financings costs relating to the extinguishment of the previous senior secured credit facility. On
March 25, 2008, the Company issued $175.0 million senior subordinated notes due 2015 at 13.5% interest rate and repaid the $175.0 million senior subordinated interim loan
agreement including any accrued and unpaid interest. During 2008, the Company utilized the $40.0 million delayed draw tranche B term loan for certain acquisitions and general corporate
purposes.

F-34

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(9) Long-Term Debt (Continued)

The
Company's long-term debt consists of the following:

(in thousands):

December 31,
2010

December 31,
2009$347.0 million Senior Credit Facility(Term B portion) (net of unamortized debt discount of $1,450 and $2,395 at December 31, 2010 and
2009, respectively) with interest rates at LIBOR or prime plus applicable margin, collateralized by substantially all of the Company's assets. At December 31, 2010 and 2009, interest rates were at LIBOR plus applicable margin, at 4.5% due at
various maturity dates through February 2014

$
263,910

$
338,633$75.0 million Senior Credit Facility (Revolving Credit portion) with interest rates at LIBOR or prime plus applicable margin, collateralized by
substantially all of the Company's assets. At December 31, 2010 and 2009, interest rates were at LIBOR plus applicable margin, at 4.5% due at various maturity dates through February 2013


8,500


10,000$310.0 million Senior Subordinated Notes (net of unamortized debt discount of $1,765 at December 31, 2010) due April 15, 2017; semi-annual
cash interest payments due on April 15 and October 15, fixed interest rate of 97/8%


308,235


$175.0 million Senior Subordinated Notes (net of unamortized debt discount of $3,291 at December 31, 2009) due March 25, 2015; semi-annual
cash interest payments due on January 15 and July 15, fixed interest rate of 13.5%





171,708Capital leases payable with various monthly payments plus interest at rates ranging from 5.9% to 9.1%, due at various maturity dates through December
2013 and collateralized by leasehold improvements and medical equipment with a net book value of $27,392 and $34,786 at December 31, 2010 and 2009, respectively


18,186


28,718598,831


549,059Less current portion


(8,780
)

(13,961
)$
590,051

$
535,098


F-35

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(9) Long-Term Debt (Continued)

Maturities
under the obligations described above are as follows at December 31, 2010 (in thousands):

2011

$
8,7802012


7,0932013


10,7792014


265,3942015


Thereafter


310,000602,046Less unamortized debt discount


(3,215
)$
598,831


At
December 31, 2010 and 2009, the prime interest rate was 3.25%.

The
Term B portion of the Senior Credit Facility (Term Loan B) initially bears interest either at LIBOR plus a spread of 425 basis points or a specified base rate plus a spread of
325 basis points and matures on February 21, 2014.

The
Revolving Credit portion of the Senior Credit Facility (Revolver) will mature on February 21, 2013. The Revolver bears interest either at LIBOR plus a spread ranging from 350
to 425 basis points or a specified base rate plus a spread ranging from 250 to 325 basis points, with the exact spread determined upon the basis of the Company's leverage ratio, as defined. The
Company is required to pay a quarterly unused commitment fee at a rate ranging from 37.5 to 50.0 basis points on the Revolver determined upon the basis of its leverage ratio, as defined.

The
Senior Credit Facility is secured by a pledge of substantially all of the Company's tangible and intangible assets and includes a number of restrictive covenants including
limitations on leverage, capital and acquisitions expenditures and a requirement to maintain a minimum ratio of cash flow to interest. Under the terms of the Company's Senior Credit Facility,
borrowings under the Revolver are based on minimum incremental amounts of not less than $0.5 million for Base rate loans and not less than $1.0 million for LIBOR rate loans.

The
Senior Credit Facility requires the Company to make mandatory prepayments of outstanding borrowings under certain circumstances. Mandatory prepayments include prepayments of the Term
Loan B from proceeds from asset dispositions if not reinvested within a certain period of time and debt and equity issuances, limited to a percentage of the proceeds and/or an excess amount above a
dollar threshold. The Company is required to prepay the Term Loan B based on certain excess cash flow requirements ranging from 25% to 50% based on the Company's leverage ratio. To date the Company
has not been required to make such prepayments. The Senior Credit Facility also requires the Company to comply with various other covenants, including, but not limited to, restrictions on new
indebtedness, the ability to merge or consolidate, asset sales, and dividends. At December 31, 2010, the Company is in compliance with all covenants.

On
March 25, 2008, the Company issued $175.0 million senior subordinated notes due 2015 at 13.5% interest rate and repaid the $175.0 million senior subordinated
interim loan agreement including

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(9) Long-Term Debt (Continued)

any
accrued and unpaid interest. The senior subordinated notes required semi-annual payments of interest only. The senior subordinated notes had similar or less restrictive covenants and
were junior to the Senior Credit Facility for order of priority of debt repayment.

On
April 1, 2010, the Company amended its Senior Credit Facility, to among other things, (i) under certain circumstances, allow the Company to issue permitted additional
subordinated debt to fund certain future acquisitions; (ii) disregard, for purposes of calculating compliance with the financial covenants, certain provisions of "Generally Accepted Accounting
Principles" (GAAP) that would require the Company to treat leased properties as owned by the Company; and (iii) provide for certain other modifications as set forth therein to permit the
incurrence of additional indebtedness in connection with certain future acquisitions and the ability to make additional investments, subject to pro forma compliance with certain performance based
incurrence covenants, and other restrictions.

On
April 20, 2010, the Company issued $310.0 million in aggregate principal amount of 97/8% senior subordinated notes due 2017 (the Offering) and repaid the
existing $175.0 million in aggregate principal amount 13.5% senior subordinated notes due 2015, including accrued and unpaid interest and a call premium of approximately $5.3 million.
The remaining proceeds from the Offering were used to pay down $74.8 million of the Term Loan B and $10.0 million of the Revolver. A portion of the proceeds of the Offering was placed in
a restricted account pending application to finance certain acquisitions, including the acquisitions of a radiation treatment center and physician practices in South Carolina consummated on
May 3, 2010. The Company incurred approximately $11.9 million in transaction fees
and expenses, including legal, accounting and other fees and expenses associated with the offering, and the initial purchasers' discount of $1.9 million.

The
Company incurred approximately $10.9 million in early extinguishment of debt as a result of the prepayment of the $175.0 million in senior subordinated notes, which
included a call premium payment of approximately $5.3 million, the write-offs of $2.5 million in deferred financing costs and $3.1 million in original issue discount
costs.

On
April 22, 2010, affiliates of certain initial purchasers of the $310.0 million in aggregate principal amount 97/8% senior subordinated notes due 2017
provided an additional $15.0 million of commitments to the Revolver, and increased the available commitment from $60.0 million to $75.0 million. The Company paid
$2.0 million to Vestar Capital Partners V, L.P. for additional transaction advisory services in respect to the incremental amendments to the existing Senior Credit Facility, the
additional $15.0 million of commitments to the revolver portion, and the complete refinancing of the senior subordinated notes.

On
May 3, 2010, the Company further amended the Senior Credit Facility with respect to certain administrative matters, including permitting the Company to provide to the lenders
thereunder, on a prospective basis, the consolidated financial statements of the parent company, Radiation Therapy Services Holdings, Inc., in lieu of those of the borrower, Radiation Therapy
Services, Inc.

The
Company's Senior Secured Credit Facility:



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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(9) Long-Term Debt (Continued)



The
revolving credit facility requires that the Company comply with certain financial covenants, including:

Requirement

Level at
December 31, 2010Maximum permitted consolidated leverage ratio


<5.25 to 1.00


4.96 to 1.00Minimum permitted consolidated interest coverage ratio


>1.90 to 1.00


2.34 to 1.00


The
maximum permitted consolidated leverage ratio required is <5.25 to 1.00 through June 30, 2011, <5.00 to 1.00 from July 1, 2011 through
June 30, 2012, <4.75 to 1.00 from July 1, 2012 to December 31, 2012 and <4.50 to 1.00 thereafter.

The
revolving credit facility also requires that the Company comply with various other covenants, including, but not limited to, restrictions on new indebtedness, asset sales, capital
expenditures, acquisitions and dividends, with which the Company was in compliance as of December 31, 2010.

The
Company is exposed to changes in interest rates as a result of its outstanding variable rate debt. To reduce the interest rate exposure, the Company entered into an interest rate
swap agreement whereby the Company fixed the interest rate on an initial notional amount of approximately $290.6 million of its Term Loan B, effective as of June 30, 2008. The rate and
maturity of the interest rate swap effective June 30, 2008 is 3.67% plus a margin and expires on March 31, 2012, respectively. The amount of the Term Loan B subject to the interest rate
swap agreements will periodically be reduced to $116.0 million by the end of the term. At December 31, 2010 and December 31, 2009, the amount of the floating rate senior debt
subject to the interest rate swap was $174.2 million and $232.4 million, respectively.

The
swap is a derivative and is accounted for under ASC 815, Derivatives and Hedging (ASC 815). The fair value of the swap agreement, representing the estimated amount that the Company
would pay to a third party assuming the Company's obligations under the interest rate swap agreement terminated at December 31, 2010 and December 31, 2009, was approximately
$5.0 million and $7.7 million, respectively. The estimated fair value of our interest rate swap was determined using the income

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(9) Long-Term Debt (Continued)

approach
that considers various inputs and assumptions, including LIBOR swap rates, cash flow activity, yield curves and other relevant economic measures, all of which are observable market inputs
that are classified under Level 2 of the fair value hierarchy. The fair value also incorporates valuation adjustments for credit risk.

Since
the Company has the ability to elect different interest rates on the debt at each reset date, and the Senior Credit Facility contains certain prepayment provisions, the hedging
relationship does not qualify for use of the shortcut method under ASC 815. Therefore, the effectiveness of the hedge relationships is assessed on a quarterly basis during the life of the hedge
through regression analysis. The entire change in fair market value is recorded in equity, net of tax, as other comprehensive income (loss).

For
the year ended December 31, 2010, the Company incurred deferred financing costs of approximately $11.9 million for the issuance of $310.0 million in aggregate
principal amount of 97/8% senior subordinated notes due 2017. For the period February 22, 2008 through December 31, 2008, Successor incurred deferred financing costs of
approximately $16.9 million primarily related to the new Senior Credit Facility and senior subordinated notes. The consolidated balance sheets as of December 31, 2010 and 2009, include
$17.0 million and $11.6 million, respectively, in other long-term assets related to unamortized deferred financing costs. As a result of the Merger, the Company incurred
additional deferred financing costs of approximately $4.8 million relating to an interim bridge loan, which was refinanced with the senior subordinated notes in March 2008 and was charged to
interest expense at the time of the refinancing. The Company recorded approximately $3.3 million, $2.9 million, $2.4 million, and $0.1 million to interest expense for the
years ended December 31, 2010 and 2009, and for the Successor period February 22, 2008 through December 31, 2008, and for the Predecessor period January 1, 2008 through
February 21, 2008, respectively, related to the amortization of deferred financing costs.

(10) Real Estate Subject to Finance Obligation

The Company leases certain of its treatment centers (facility) and other properties from partnerships which are majority-owned by related parties (related-party lessor). The
related-party lessor constructs the facilities in accordance with the Company's plans and specifications and subsequently leases the facility to the Company. Due to the related-party relationship, the
Company is considered the owner of the facility during the construction period pursuant to the provisions of ASC 840-40,Sale-Leaseback
Transactions. In accordance with ASC 840-40, the Company records a construction-in-progress asset for the facility with an offsetting
finance obligation during the construction period. Certain related parties guarantee the debt of the related-party lessor, which is considered to be continuing involvement pursuant to
ASC 840-40. Accordingly, these leases do not qualify as a normal sale-leaseback at the time that construction is complete and the facility is leased to the Company. As a
result, the costs to construct the facilities and the related finance obligation remain on the Company's consolidated balance sheets when construction is completed. The construction costs are included
in real estate subject to finance obligation in the accompanying consolidated balance sheets. The finance obligation is amortized over the lease term based on the payments designated in the lease
agreements with a portion of the payment representing a free ground lease recorded in rent

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(10) Real Estate Subject to Finance Obligation (Continued)

expense.
The assets classified as real estate subject to finance obligation are amortized on a straight-line basis over their useful lives.

In
some cases, the related-party lessor will purchase a facility during the Company's acquisition of a business and lease the facility to the Company. These transactions also are within
the scope of ASC 840-40. Certain related parties guarantee the debt of the related-party lessor, which is considered to be continuing involvement pursuant to
ASC 840-40. Accordingly, these leases do not qualify as normal sale-leaseback. As a result, the cost of the facility, including land and the related finance obligation
are recorded on the Company's consolidated balance sheets. The cost of the facility, including land, is included in real estate subject to finance obligation in the accompanying consolidated balance
sheets. The finance obligation is amortized over the lease term based on the payments designated in the lease agreements and the Real Estate Subject to Finance Obligation are amortized on a
straight-line basis over their useful lives.

As
of March 31, 2010, the related party lessors completed the refinancing of certain of their respective mortgages to remove the personal guarantees of the debt related thereto.
As a result, of the refinancing of the landlords' mortgages on these respective properties the Company derecognized approximately $64.8 million in real estate subject to finance obligation,
$67.7 million in finance obligation and recorded approximately $2.9 million of deferred gains that will be amortized as a reduction of rent expense over 15 years. In addition, the
Company entered into a new master lease arrangement with the related party lessors on 28 properties. The initial term of the master lease is 15 years with four 5 year renewal options.
Annual payments, including executory costs, total approximately $13.4 million pursuant to the master lease. The lease payments are scheduled to increase annually based on increases in the
consumer price index. Subsequent to March 31, 2010 the related party lessors removed the personal guarantees of the debt related to two additional properties. As a result, the Company
derecognized approximately $4.4 million in real estate subject to finance obligation, $4.5 million in finance obligation.

The
net book values of real estate subject to finance obligation are summarized as follows:

December 31,(in thousands):

2010

2009Land

$
39

$
1,779Leasehold Improvements


7,750


60,887Construction-in-progress


945


16,181Accumulated depreciation


(634
)

(4,599
)$
8,100

$
74,248


Depreciation
expense relating to real estate subject to finance obligation is classified in depreciation and amortization in the accompanying consolidated statements of operations and
comprehensive (loss) income.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(10) Real Estate Subject to Finance Obligation (Continued)

Future
payments of the finance obligation as of December 31, 2010, are as follows:

(in thousands):

Finance
Obligation2011

$
7942012


8102013


8272014


8442015


861Thereafter


6,107$
10,243Finance obligation relating to construction-in-progress


945Less: amounts representing interest


(7,535
)Finance obligation balance at end of lease term


4,915Finance obligation

$
8,568Less: amount representing current portion


(53
)Finance obligation, less current portion

$
8,515


Interest
expense relating to the finance obligation was approximately $2.3 million, $6.6 million, $2.8 million, and $0.5 million for the years ended
December 31, 2010 and 2009, and the Successor period from February 22, 2008 to December 31, 2008 and the Predecessor period from January 1, 2008 to February 21,
2008, respectively. Facility rent expense relating to real estate subject to finance obligation was approximately $0.6 million, $2.1 million, $1.1 million, and $0.2 million
for the years ended December 31, 2010 and 2009, and the Successor period from February 22, 2008 to December 31, 2008 and the Predecessor period from January 1, 2008 to
February 21, 2008, respectively.

(11) Reconciliation of total equity

The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries. Noncontrolling interests-nonredeemable principally represent minority
shareholders' proportionate share of the equity of certain consolidated majority owned entities of the Company. The Company has certain arrangements whereby the noncontrolling interest may be redeemed
upon the occurrence of certain events outside of the Company's control. These noncontrolling interests have been classified outside of permanent equity on the Company's consolidated balance sheets.
The noncontrolling interests are not redeemable at December 31, 2010 and 2009, and the contingent events upon which the noncontrolling interest may be redeemed is not probable of occurrence at
December 31, 2010. Accordingly, the noncontrolling interests are measured at their carrying value at December 31, 2010 and 2009.

F-41

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(11) Reconciliation of total equity (Continued)

The following table presents changes in total equity for the respective periods:

(in thousands):

Radiation Therapy
Services
Holdings, Inc.
Shareholder's
Equity

Noncontrolling
interests
nonredeemable

Total
Equity

Noncontrolling
interests
redeemablePredecessorBalance, January 1, 2008

$
165,490

$
11,002

$
176,492

$
354Net (loss) income


(10,872
)

15


(10,857
)

4Termination of interest rate swap agreement, net of tax


265





265


Exercise of stock options


14,164





14,164


Tax benefit from stock option exercise


9,239





9,239


Amortization of nonvested stock grants


1,329





1,329


Cash distributions





(408
)

(408
)

(40
)Balance, February 21, 2008

$
179,615

$
10,609

$
190,224

$
318SuccessorEquity contributions from Radiation Therapy Investments, LLC on February 22, 2008

$
627,272

$
10,609

$
637,881

$
318Net (loss) income


(5,336
)

2,207


(3,129
)

276Other comprehensive income


(6,670
)




(6,670
)

Issuance of limited liability company interests


174





174


Stock-based compensation


1,524





1,524


Equity contribution in joint venture





80


80


6,288Cash distributions





(688
)

(688
)

Balance, December 31, 2008

$
616,964

$
12,208

$
629,172

$
6,882Net (loss) income


(9,550
)

689


(8,861
)

1,146Other comprehensive income


1,801





1,801


Stock-based compensation


962





962


Sale of interest in a subsidiary


96


154


250


Payment of note receivable from shareholder


25





25


Equity contribution in joint venture





800


800


Cash distributions





(2,142
)

(2,142
)

(734
)Balance, December 31, 2009

$
610,298

$
11,709

$
622,007

$
7,294Net (loss) income


(115,488
)

691


(114,797
)

1,007Other comprehensive income


1,478





1,478


Issuance of limited liability company interests


156





156


Deconsolidation of noncontrolling interest





(78
)

(78
)

Purchase of noncontrolling interest in a joint venture


(475
)

475





Stock-based compensation


1,030





1,030


Payment of note receivable from shareholder


50





50


Equity contribution in joint venture





608


608


Cash distributions





(2,246
)

(2,246
)

(930
)Balance, December 31, 2010

$
497,049

$
11,159

$
508,208

$
7,371


Redeemable equity securities with redemption features that are not solely within the Company's control are classified outside of permanent equity.
Those securities are initially recorded at their

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(11) Reconciliation of total equity (Continued)

estimated
fair value on the date of issuance. Securities that are currently redeemable or redeemable after the passage of time are adjusted to their redemption value as changes occur. In the unlikely
event that a redeemable equity security will require redemption, then subsequent adjustments to the initially recorded amount will be recognized in the period that a redemption becomes probable.

(12) Fair Value of Financial Instruments

ASC 820 requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on
significant levels of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows:

Level 1



Quoted prices for identical assets and liabilities in active markets.Level 2



Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, or other inputs that are observable or can be corroborated by observable market data.Level 3



Unobservable inputs for the asset or liability.


As
of January 1, 2008, the Company adopted ASC 820, and has estimated the fair value of its financial instruments in accordance with this framework. In accordance with ASC 820,
the fair value of the Senior Subordinated Notes and Term Loan B portion of the Senior Credit Facility was based on prices quoted from third-party financial institutions. At December 31, 2010,
the fair value of the Company's Senior Subordinated Notes due 2017 and Term Loan B was approximately $305.4 million and $258.7 million, respectively. The fair value of the Company's
Senior Subordinated Notes due 2015 was $175.0 million at December 31, 2009.

As
of December 31, 2010 and 2009, we held certain items that are required to be measured at fair value on a recurring basis including an interest rate swap agreement. Cash and
cash equivalents are reflected in the financial statements at their carrying value, which approximate their fair value due to their short maturity. The carrying values of the Company's
long-term debt other than Senior Subordinated Notes approximates fair value due either to the length of time to maturity or the existence of interest rates that approximate prevailing
market rates.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(12) Fair Value of Financial Instruments (Continued)

The
following item is measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820, as of December 31, 2010 and 2009:

Fair Value Measurements at Reporting Date Using(in thousands):

December 31,
2010

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Significant
Unobservable Inputs
(Level 3)Other long-term liabilities Interest rate swap

$
(4,966
)
$


$
(4,966
)
$



Fair Value Measurements at Reporting Date Using(in thousands):

December 31,
2009

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Significant
Unobservable Inputs
(Level 3)Other long-term liabilities Interest rate swap

$
(7,695
)
$


$
(7,695
)
$



The
estimated fair value of our interest rate swap was determined using the income approach that considers various inputs and assumptions, including LIBOR swap rates, cash flow activity,
yield curves and other relevant economic measures, all of which are observable market inputs that are classified under Level 2 of the fair value hierarchy. The fair value also incorporates
valuation adjustments for credit risk.

(13) Equity Investments in Joint Ventures

The Company currently maintains equity interests in nine unconsolidated joint ventures, including a 37% interest with a hospital for the ownership of assets used for the delivery of
radiation oncology services, a 50% interest in a joint venture with a freestanding radiation oncology center, a 40% interest in a joint venture with a PET imaging facility, a 45% interest in a joint
venture with a radio-surgery facility, a 50% interest in a urology surgical facility, a 28.5% interest in the development and management of a proton beam therapy center to be constructed in Manhattan,
a 50% interest in an international freestanding radiation center in Mohali, India, and two joint venture interests in South America, Central America and the Caribbean including a 33% interest in a
joint venture that manages 26 radiation therapy treatment centers and a 19% interest in a joint venture that operates a treatment center in Guatemala.

The
Company currently maintains a 33% interest in Medical Developers, LLC, a joint venture which has a 57% interest in the underlying operating entities, and manages 26 radiation
therapy treatment centers in South America, Central America and the Caribbean . The centers are located in Argentina, Mexico, Costa Rica, Dominican Republic, Guatemala, El Salvador and Bolivia.

At
December 31, 2010 and 2009, the Company's investment in Medical Developers, LLC was approximately $14.7 million and $13.1 million, respectively. Total
member's equity as reported by Medical Developers, LLC was $26.2 million and $19.0 million at December 31, 2010 and 2009, respectively. The Company's equity in the earnings
of Medical Developers, LLC for the years ended

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(13) Equity Investments in Joint Ventures (Continued)

December 31,
2010 and 2009 was approximately $2.0 million and $1.5 million, respectively, which is recorded in other revenue in the accompanying consolidated statements of
operations and comprehensive (loss) income.

The
condensed results of operations of Medical Developers, LLC are as follows:

Year Ended
December 31,(in thousands):

2010

2009Total revenues

$
53,152

$
39,605Net income


10,940


7,752Net income attributable to noncontrolling interests


(4,864
)

(3,288
)Net income attributable to Medical Developers, LLC

$
6,076

$
4,464


In
2010, the Company provided medical equipment and parts inventory to Medical Developers, LLC in the amount of approximately $769,000. As of December 31, 2010, amounts due
from the sale of the equipment, including accrued interest were approximately $781,000. In connection with the proposed acquisition of Medical Developers, LLC, the Company advanced $500,000 for
the purchase and implementation of a new accounting software system.

The
Company utilizes the equity method to account for its investments in the unconsolidated joint ventures. At December 31, 2010 and 2009, the Company's investments in the
unconsolidated joint ventures were approximately $20.1 million and $18.7 million, respectively. The Company's equity in the earnings (losses) of the equity investments in joint ventures
was approximately $1,001,000, $880,000, ($118,000), and $39,000 for the Successor years ended December 31, 2010 and 2009, the period from February 22, 2008 to December 31, 2008,
the Predecessor period from January 1, 2008 to February 21, 2008, respectively, which is recorded in other revenue in the accompanying consolidated statements of operations and
comprehensive loss.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(13) Equity Investments in Joint Ventures (Continued)

The
condensed financial position and results of operations of the unconsolidated joint venture entities are as follows:

December 31,(in thousands):

2010

2009Total assets

$
56,497

$
45,901Liabilities

$
15,458

$
13,413Shareholders' equity


41,039


32,488Total liabilities and shareholders' equity

$
56,497

$
45,901


Year Ended December 31,(in thousands):

2010

2009

2008Revenues

$
57,925

$
43,202

$
2,409Expenses


53,876


39,811


2,543Net income (loss)

$
4,049

$
3,391

$
(134
)


A
summary of the changes in the equity investment in the unconsolidated joint ventures is as follows:

Predecessor (in thousands):Balance at January 1, 2008


1,170Equity interest in net income of joint ventures


39Balance at February 21, 2008

$
1,209Successor (in thousands):Beginning balance at February 22, 2008

$
1,209Capital contributions in joint venture


1,337Equity interest in net loss of joint ventures


(118
)Balance at December 31, 2008


2,428Capital contributions in joint venture


15,793Distributions


(301
)Share of other comprehensive loss


(137
)Equity interest in net income of joint ventures


880Balance at December 31, 2009


18,663Capital contributions in joint venture


2,339Distributions


(1,007
)Share of other comprehensive loss


(201
)Impairment


(659
)Equity interest in net income of joint ventures


1,001Balance at December 31, 2010

$
20,136


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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(14) Commitments and Contingencies

Letters of Credit

The Company issued to the lessor of one of its treatment centers an unconditional and irrevocable letter of credit in the amount of
$300,000 to serve as security for the performance of the assignees' obligations under the lease. In addition, the Company issued an irrevocable letter of credit in the amount of $185,000 relating to
the Company's workers' compensation insurance program.

Lease Commitments

The Company is obligated under various operating leases for office space, medical equipment, and an aircraft lease. Total lease expense
incurred under these leases was approximately $33.1 million, $25.7 million, $15.7 million, and $2.6 million for the years ended December 31, 2010 and 2009, for the
Successor period from February 22, 2008 to December 31, 2008, and for the Predecessor period from January 1, 2008 to February 21, 2008, respectively.

Future
fixed minimum annual lease commitments are as follows at December 31, 2010:

(in thousands):

Commitments

Less
Sublease
Rentals

Net
Rental
Commitments2011

$
30,259

$
503

$
29,7562012


29,142


503


28,6392013


27,315


503


26,8122014


26,898


377


26,5212015


25,460





25,460Thereafter


237,777





237,777$
376,851

$
1,886

$
374,965


The
Company leases land and space at its treatment centers under operating lease arrangements expiring in various years through 2044. The majority of the Company's leases provide for
fixed rent escalation clauses, ranging from 2.0% to 5.0%, or escalation clauses tied to the Consumer Price Index. The rent expense for leases containing fixed rent escalation clauses or rent holidays
is recognized by the Company on a straight-line basis over the lease term. Leasehold improvements made by a lessee are recorded as leasehold improvements. Leasehold improvements are
amortized over the shorter of their estimated useful lives (generally 39 years or less) or the related lease term plus anticipated renewals when there is an economic penalty associated with
nonrenewal. An economic penalty is deemed to occur when the Company forgoes an economic benefit, or suffers an economic detriment by not renewing the lease. Penalties include, but are not limited to,
impairment of existing leasehold improvements, profitability, location, uniqueness of the property within its particular market, relocation costs, and risks associated with potential competitors
utilizing the vacated location. Lease incentives received are recorded as accrued rent and amortized as reductions to lease expense over the lease term.

F-47

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(14) Commitments and Contingencies (Continued)

Concentrations of Credit Risk

Financial instruments, which subject the Company to concentrations of credit risk, consist principally of cash and accounts receivable.
The Company maintains its cash in bank accounts with highly rated financial institutions. These accounts may, at times, exceed federally insured limits. The Company has not experienced any losses in
such accounts. The Company grants credit, without collateral, to its patients, most of whom are local residents. Concentrations of credit risk with respect to accounts receivable relate principally to
third- party payers, including managed care contracts, whose ability to pay for services rendered is dependent on their financial condition.

Legal Proceedings

The Company is involved in certain legal actions and claims arising in the ordinary course of its business. It is the opinion of
management, based on advice of legal counsel, that such litigation and claims will be resolved without material adverse effect on the Company's consolidated financial position, results of operations,
or cash flows.

On
September 16, 2010, the Company was served with a civil complaint that was filed against the Company in the United States District Court for the Southern District of New York
by TPTCC NY, Inc., The Proton Institute of NY, LLC and NY Medscan LLC. The complaint alleges, among other things, that in connection with a failed business venture between
plaintiffs and the Company to provide proton beam therapy (PBT) services in New York City, the Company, certain of its subsidiaries and Norton Travis, the Company's general counsel, misappropriated
confidential information and trade secrets of the plaintiffs and conspired in restraint of trade, engaged in unfair competition, and conspired to fix prices in seeking to establish a PBT services
business in New York City. The plaintiffs seek to recover at least $350 million in damages, plus punitive damages of up to three times the amount of damages awarded. The Company intends to
vigorously defend this suit. In the opinion of the Company's management, the case is without merit. By Order dated February 24, 2011, Judge Jed S. Rakoff granted the Company's motion to dismiss
in its entirety dismissing all claims against all defendants including the Company and Mr. Travis.

Acquisitions

The Company has acquired and plans to continue acquiring businesses with prior operating histories. Acquired companies may have unknown
or contingent liabilities, including liabilities for failure to comply with health care laws and regulations, such as billing and reimbursement, fraud and abuse and similar anti-referral
laws. Although the Company institutes policies designed to conform practices to its standards following completion of acquisitions, there can be no assurance that the Company will not become liable
for past activities that may later be asserted to be improper by private plaintiffs or government agencies. Although the Company generally seeks to obtain indemnification from prospective sellers
covering such matters, there can be no assurance that any such matter will be covered by indemnification, or if covered, that such indemnification will be adequate to cover potential losses and fines.

F-48

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(14) Commitments and Contingencies (Continued)

Employment Agreements

The Company is party to employment agreements with several of its employees that provide for annual base salaries, targeted bonus
levels, severance pay under certain conditions, and certain other benefits.

(15) Retirement Plan

The Company has a defined contribution retirement plan under Section 401(a) of the Internal Revenue Code (the Retirement Plan). The Retirement Plan allows all
full-time employees after one year of service to defer a portion of their compensation on a pretax basis through contributions to the Retirement Plan. The Company provides for a
discretionary match based on a percentage of the employee's annual contribution. At December 31, 2010 and 2009, the Company accrued approximately $0.6 million and $1.5 million,
respectively related to the Company's approved discretionary match. No Company match was provided for in 2008.

(16) Stock Option Plan and Restricted Stock Grants

Predecessor

Stock Option Plan

Prior to the Merger, the Predecessor adopted the 2004 Stock Incentive Plan under which the Company had authorized the issuance of
equity-based awards for up to 2,000,000 shares of common stock to provide additional incentive to employees, officers, directors, and consultants. In addition to the shares reserved for issuance under
our 2004 Stock Incentive Plan, such Plan also included (i) 1,141,922 shares that were reserved but unissued under the 1997 Plan (ii) shares subject to grants under the 1997 Plan that may
again become available as a result of the termination of options or the repurchase of shares issued under the 1997 Plan, and (iii) annual increases in the number of shares available for
issuance under the 2004 Stock Incentive Plan on the first day of each fiscal year beginning with the fiscal year beginning in 2005 and ending after the fiscal year beginning in 2014.

Options
generally were granted at the fair market value of the common stock at the date of grant, were exercisable in installments beginning one year from the date of grant, vested over
three to ten years and expired ten years after the date of grant.

Incentive
stock options were granted to key employees, including officers, directors, and other selected employees. The exercise price of each option was 100% of the fair market value of
the common stock on the date of grant (110% in the case of shareholders that own 10% or more of the outstanding common stock). Nonqualified stock options were granted under the 2004 Stock Incentive
Plan to officers, directors, consultants, advisors, and key employees. The exercise price of each option was at least 85% of the fair market value of the common stock on the date of grant.

At
the time of the Merger, all unvested stock options vested in accordance with the change of control provision of the original stock option agreements. According to the Merger
Agreement, all stock options outstanding at the time of the Merger were cancelled, and the holder of each such option received an amount in cash equal to the excess, if any, of the Merger
Consideration over the exercise price per share of the option, multiplied by the number of shares subject to the option. The Company

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(16) Stock Option Plan and Restricted Stock Grants (Continued)

recorded
$1.3 million in compensation expense in the period from January 1, 2008 through February 21, 2008, which is included in salaries and benefits in the consolidated
statement of operations and comprehensive loss.

Transactions
are summarized as follows:

Predecessor

Number of
Stock
Options

Weighted-
Average
Exercise
Price

Aggregate
Intrinsic
ValueOutstanding at December 31, 2007


1,302,169

$
10.88Exercised*


(1,302,169
)

10.88

$
25,560,845Outstanding at end of period February 21, 2008








Options exercisable at December 31, 2007


1,236,267

$
11.31

$
24,233,774Options exercisable at end of period February 21, 2008




$


$



*706,792
options were settled for cash on February 21, 2008, in connection with the Merger.


Nonvested Restricted Stock

Prior to the Merger, the Company issued restricted shares, which vested ratably over a three- to five-year period. The fair
value of the nonvested restricted shares were measured on the grant date and recognized in earnings over the requisite service period.

The
following table summarizes nonvested stock activity:

Predecessor

Shares

Weighted-
Average
Grant Date
Fair ValueNonvested balance at December 31, 2007


19,211


31.23Vested


(19,211
)

31.23Nonvested balance at end of period February 21, 2008




$



April 1,
2007, the Company granted $1.0 million of restricted stock to a key employee to vest ratably over five years.

Restricted
shares of 19,211 were settled for cash on February 21, 2008, in connection with the Merger. In addition, an additional $1.0 million of restricted stock issued to
a key employee on April 1, 2007, was settled for cash on February 21, 2008.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(16) Stock Option Plan and Restricted Stock Grants (Continued)

Successor

In connection with the Merger, RT Investments adopted a new equity-based plan in February 2008, authorized for issuance under the plan
of approximately 1,494,111 units of limited liability company interests consisting of 526,262 Class B Units and 967,849 Class C Units. The units are limited liability company interests
and are available for issuance to the Company's
employees and members of the Board of Directors for incentive purposes. As of December 31, 2010, there were 516,614 Class B Units and 938,359 Class C Units issued and outstanding
under the plan and 9,648 Class B Units and 29,490 Class C Units available for future issuance under the plan.

The
Class B Units vest over 48 months. Assuming continued employment of the employee with the Company, 25% vest on the first anniversary of the grant date, and the
remaining 75% vest in three equal installments on the second, third, and fourth anniversaries from the grant date. The Class C Units vest annually for 34 months based on certain
performance conditions and/or market conditions being met or achieved and, in all cases, assuming continued employment. For the Class C Units, the investment return conditions relate to Vestar
receiving a specified multiple on its investment upon a liquidity event. The performance condition relates to the Company achieving certain operating targets, and the market condition relates to
holders of Preferred Units and Class A Units receiving a specified multiple on its investment upon a liquidation event. If an employee holder's employment is terminated, RT Investments may
repurchase the holder's vested Class B Units and Class C Units. If the termination occurs within 12 months after the relevant measurement date, all of the Class B and
Class C Units will be repurchased at the initial purchase price, or cost. If the termination occurs during the following three-year period, the Class B and Class C
units may be purchased at fair market value depending on the circumstances of the holder's departure and the date of termination.

For
purposes of determining the compensation expense associated with these grants, management valued the business enterprise using a variety of widely accepted valuation techniques,
which considered a number of factors such as the financial performance of the Company, the values of comparable companies and the lack of marketability of the Company's equity. The Company then used
the option pricing method to determine the fair value of these units at the time of grant using the following assumptions: a term of five years, which is based on the expected term in which the units
will be realized; a risk-free interest rate of 2.80% and 1.96% for grants issued in 2008 and 2010, respectively, which is the five-year U.S. federal treasury bond rate
consistent with the term assumption; and expected volatility of 38% and 50% for grants issued in 2008 and 2010, respectively, which is based on the historical data of equity instruments of comparable
companies.

The
estimated fair value of the units, less an assumed forfeiture rate of 2.7%, is recognized in expense in the Company's financial statements on a straight-line basis over
the requisite service periods of the awards for Class B Units. For Class B Units, the requisite service period is 48 months, and for Class C Units, the requisite service
period is 34 months only if probable of being met. The assumed forfeiture rate is based on an average historical forfeiture rate.

The
Company recorded $1.0 million, $1.0 million and $1.5 million of stock-based compensation expense for the years ended December 31, 2010 and 2009, and for
the Successor period from

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(16) Stock Option Plan and Restricted Stock Grants (Continued)

February 22,
2008 through December 31, 2008, which is included in salaries and benefits in the consolidated statements of operations. The summary of activity under the plan is presented
below:

Successor

Class B Units
Outstanding

Weighted-
Average
Grant Date
Fair Value

Class C Units
Outstanding

Weighted-
Average
Grant Date
Fair ValueNonvested balance at beginning of period February 22, 2008


505,212

$
8.14


913,408

$
7.06Units granted


4,210


8.14


10,888


7.06Vested








(101,490
)

7.06Nonvested balance at end of period December 31, 2008


509,422

$
8.14


822,806

$
7.06Units forfeited


(9,473
)

8.14


(29,035
)

7.06Vested


(127,356
)

8.14





Nonvested balance at end of period December 31, 2009


372,593

$
8.14


793,771

$
7.06Units granted


16,665


10.08


43,099


8.75Vested


(124,198
)

8.14





Nonvested balance at end of period December 31, 2010


265,060

$
8.26


836,870

$
7.15


As
of December 31, 2010, there was approximately $1.2 million and $6.0 million of total unrecognized compensation expense related to the Class B Units and
Class C Units, respectively. These costs are expected to be recognized over a weighted-average period of 1.3 years for Class B Units and 0.1 years for Class C Units
if certain conditions are met.

(17) Related-Party Transactions

The Company leases certain of its treatment centers and other properties from partnerships, which are majority owned by related parties. The leases are classified in the accompanying
financial statements as either operating leases or as finance obligations pursuant to ASC 840,Leases.These related- party leases have expiration dates
through May 31, 2039, and they provide for annual payments and executory costs, ranging from approximately $58,000 to $1.6 million. The aggregate payments the Company made to the
entities owned by these related parties were approximately $14.5 million, $10.2 million, $5.9 million, and $1.4 million for the years ended December 31, 2010 and
2009, for the Successor period from February 22, 2008 through December 31, 2008, and for the Predecessor period from January 1, 2008 through February 21, 2008,
respectively.

In
October 1999, the Company entered into a sublease arrangement with a partnership, which is owned by a related parties to lease space to the partnership for an MRI center in Mount
Kisco, New York. Sublease rentals paid by the partnership to the landlord were approximately $673,000, $761,000, $468,000, and $110,000 for the years ended December 31, 2010 and 2009, and for
the Successor period

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(17) Related-Party Transactions (Continued)

from
February 22, 2008 through December 31, 2008, for the Predecessor period from January 1, 2008 through February 21, 2008, respectively.

The
Company provides billing and collection services to an MRI entity, which is owned by a related party. In addition, the Company charges the MRI entity for certain allocated cost of
certain staff that perform services on behalf of the MRI entity. The fees received by the Company for the billing and collection services and for reimbursement of certain allocated costs were
approximately $0, $2,000, $158,000, and $42,000 for the years ended December 31, 2010 and 2009, for the Successor period from February 22, 2008 through December 31, 2008, and for
the Predecessor period from January 1, 2008 through February 21, 2008, respectively. No balance was due from the MRI entity at December 31, 2010 and 2009.

The
Company is a participating provider in an oncology network, which is partially owned by a related party. The Company provides oncology services to members of the network. Annual
payments received by the Company for the services were $867,000, $813,000, $590,000, and $43,000 for the years ended December 31, 2010 and 2009, for the Successor period from
February 22, 2008 through December 31, 2008, and for the Predecessor period from January 1, 2008 through February 21, 2008, respectively.

The
Company has a wholly owned subsidiary construction company that provides remodeling and real property improvements at certain of its facilities. In addition, the construction company
is frequently engaged to build and construct facilities for lease that are owned by related parties. Payments received by the Company for building and construction fees were approximately
$0.5 million, $0.5 million, $7.2 million, and $2.5 million for the years ended December 31, 2010 and 2009, for the Successor period from February 22, 2008
through December 31, 2008, and for the Predecessor period from January 1, 2008 through February 21, 2008, respectively. Amounts due to the Company for the construction services
were approximately $223,000 and $258,000 at December 31, 2010 and 2009, respectively.

The
Company purchases medical malpractice insurance from an insurance company owned by a related party. The period of coverage runs from October to September. The premium payments made
by the Company were approximately $5.4 million, $6.9 million, $7.4 million, and $0.8 million for the years ended December 31, 2010 and 2009, for the Successor period
from February 22, 2008 through December 31, 2008, and for the Predecessor period from January 1, 2008 through February 21, 2008, respectively.

In
California, Delaware, Maryland, Massachusetts, Michigan, Nevada, New York, and North Carolina, the Company maintains administrative services agreements with professional corporations
owned by related parties, who are licensed to practice medicine in such states. The Company entered into these administrative services agreements in order to comply with the laws of such states, which
prohibit the Company from employing physicians. The administrative services agreements generally obligate the Company to provide treatment center facilities, staff, equipment, accounting services,
billing and collection services, management and administrative personnel, assistance in managed care contracting, and assistance in marketing services. Fees paid to the Company by such professional
corporations under the administrative services agreements were approximately $83.5 million, $87.2 million, $80.3 million, and $11.7 million for the years ended
December 31, 2010 and 2009, for the

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(17) Related-Party Transactions (Continued)

Successor
period from February 22, 2008 through December 31, 2008, and for the Predecessor period from January 1, 2008 through February 21, 2008, respectively. These
amounts have been eliminated in consolidation.

On
February 22, 2008, the Company entered into a management agreement with Vestar Capital Partners V, L.P. (Vestar) relating to certain advisory and consulting services for
an annual fee equal to the greater of (i) $850,000 or (ii) an amount equal to 1.0% of the Company's consolidated earnings before interest, taxes, depreciation, and amortization for each
fiscal year determined as set forth in the Senior Credit Facility. As part of the management agreement, the Company also paid Vestar a management fee of
approximately $10.0 million for services rendered in connection with the consummation of the Merger. This management fee was allocated between goodwill, deferred financing costs, and consulting
fees. As part of the management agreement, the Company agreed to indemnify Vestar and its affiliates from and against all losses, claims, damages, and liabilities arising out of the performance by
Vestar of its services pursuant to the management agreement. The management agreement will terminate upon such time that Vestar and its partners and their respective affiliates hold, directly, or
indirectly in the aggregate, less than 20% of the voting power of the outstanding voting stock of the Company. During the years ended December 31, 2010 and 2009, during the Successor period
from February 22, 2008 through December 31, 2008, the Successor incurred approximately $1.3 million, $1.2 million and $1.1 million, respectively, of management fees
and expenses under such agreement.

On
April 22, 2010, affiliates of certain initial purchasers of the $310.0 million in aggregate principal amount 97/8% senior subordinated notes due 2017
provided an additional $15.0 million of commitments to the Revolver, and increased the available commitment from $60.0 million to $75.0 million. The Company paid
$2.0 million to Vestar Capital Partners V, L.P. for additional transaction advisory services in respect to the incremental amendments to the existing Senior Credit Facility, the
additional $15.0 million of commitments to the revolver portion, and the complete refinancing of the senior subordinated notes.

In
January 2009, the Company purchased from family members of a related party (i) a 33% interest in MDLLC, a joint venture which has a 57% interest in the underlying operating
entities, and manages 26 radiation therapy treatment centers in South America, Central America and the Caribbean and (ii) a 19% interest in a joint venture, which operates a treatment center in
Guatemala for approximately $10.4 million, subject to final determination of the purchase price based on a multiple of historical earnings before interest, taxes, and depreciation and
amortization. In January 2010, the Company finalized the amount due for its 33% interest in the joint venture and paid an additional $1.9 million. The transaction has been accounted for under
the equity method.

In
2010, the Company provided medical equipment and parts inventory to Medical Developers, LLC in the amount of approximately $769,000. As of December 31, 2010, amounts due
from the sale of the equipment, including accrued interest were approximately $781,000. In connection with the proposed acquisition of Medical Developers, LLC, the Company advanced $500,000 for
the purchase and implementation of a new accounting software system.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(18) Subsequent Events

In January 2011, the Company received a commitment letter (the "Commitment Letter") from DDJ Capital Management, LLC to purchase an aggregate principal amount of
$50 million of 97/8% Senior Subordinated Notes due 2017 ("New Notes") to be issued by the Company. On March 1, 2011, the Company issued $50 million of the new
notes. The proceeds of $48.5 million were used (i) to fund the Company's acquisition of all of the outstanding membership units of Medical Developers, LLC ("MDLLC") and
substantially all of the interests of MDLLC's affiliated companies (the "MDLLC Acquisition"), not currently controlled by the Company (ii) to fund transaction costs associated with the MDLLC
Acquisition and (iii) for general corporate purposes.

On
March 1, 2011, the Company purchased the remaining 67% interest in Medical Developers, LLC from Bernardo Dosoretz as well as interests in the subsidiaries of Medical
Developers, LLC from Alejandro Dosoretz and Bernardo Dosoretz, resulting in an ownership interest of approximately 91% in underlying radiation oncology practices located in South America,
Central America and the Caribbean. The Company also purchased an additional 61% interest in Clinica de Radioterapia La Asuncion S.A. from Bernardo Dosoretz, resulting in an ownership interest
of 80%. The Company consummated these acquisitions for a combined purchase price of approximately $82.4 million, comprised of $47.5 million in cash, issuance of 13,660 units of RT
Investments' non-voting preferred equity units and 258,955 units of RT Investments' class A equity units totaling approximately $16.25 million, and issuance of a
97/8% note payable, due 2017 totaling approximately $16.25 million to the seller and an estimated contingent earn out payment totaling $2.4 million. The earn out payment
is contingent upon certain acquired centers attaining earnings before interest, taxes, depreciation and amortization targets, is due 18 months subsequent to the transaction closing, and is
payable through Company financing and issuance of equity units. The preliminary allocation of the purchase price as follows:

Cash

$
47,500Seller financing note


16,250Company's issuance of equity


16,250Contingent earn-out


2,400Total consideration transferred


82,400Net identifiable assets acquired


12,160Goodwill

$
70,240


Net
identifiable assets includes the following preliminary intangible assets:

Tradename (indefinite life)

$
1,500Non-compete agreement (5 year life)


1,500Hospital contract arrangements (20 year life)


11,300$
14,300


The
excess of the purchase price over the fair value of the assets acquired was allocated to goodwill of $70.2 million, representing primarily the value of estimated cost savings
expected from the transaction. The purchase price allocation is subject to revision as the Company obtains additional

F-55

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(18) Subsequent Events (Continued)

information,
including the final closing of the balance sheet as of March 1, 2011, finalization of the earn-out valuation, final valuation of the consideration of equity and
valuation of the intangibles and hard assets by a third party valuation consulting firm.

The
following unaudited pro forma financial information is presented as if the purchase of the Carolina Regional Cancer Center, P.A. and the purchase of the additional interests in
Medical Developers, LLC and Clinica de Radioterapia La Asuncion S.A. acquisition had occurred as of January 1, 2009. The pro forma financial information is not necessarily
indicative of what the Company's results of operations actually would have been had the Company completed the acquisition at the dates indicated. In addition, the unaudited pro forma financial
information does not purport to project the future operating results of the combined company:

Successor(in thousands):

Year Ended
December 31,
2010

Year Ended
December 31,
2009Pro forma total revenues

$
603,875

$
580,006Pro forma net loss attributable to Radiation Therapy Services Holdings, Inc. shareholder


(110,217
)

(6,336
)


(19) Unaudited Quarterly Financial Information

The quarterly interim financial information shown below has been prepared by the Company's management and is unaudited. It should be read in conjunction with the audited consolidated
financial statements appearing herein.

Successor2010(in thousands):

December 31

September 30

June 30

March 31Total revenues

$
137,523

$
137,001

$
134,906

$
134,533Net loss


(102,292
)

(2,416
)

(8,083
)

(999
)Net loss attributable to Radiation Therapy Services Holdings, Inc. shareholder


(102,333
)

(2,332
)

(9,017
)

(1,806
)




Successor2009(in thousands):

December 31

September 30

June 30

March 31Total revenues

$
128,284

$
125,141

$
135,505

$
135,554Net (loss) income


(3,558
)

(3,466
)

245


(936
)Net (loss) income attributable to Radiation Therapy Services Holdings, Inc. shareholder


(4,191
)

(4,280
)

133


(1,212
)


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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information

Radiation Therapy Services, Inc.'s (RTS) payment obligations under the senior subordinated notes are guaranteed by Radiation Therapy Services Holdings, Inc. (Parent) and
certain domestic subsidiaries of RTS (Subsidiary Guarantors and, collectively with Parent, the Guarantors). The consolidated joint ventures and professional corporations of the Company are
non-guarantors. Such guarantees are full, unconditional and joint and several. The following supplemental financial information sets forth, on an unconsolidated basis, balance sheets,
statements of operations, and statements of cash flows information for Parent, the Subsidiary Guarantors and the non-guarantor subsidiaries. The supplemental financial information reflects
the investments of Parent and RTS using the equity method of accounting.

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Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING BALANCE SHEETS  SUCCESSOR AS OF DECEMBER 31, 2010  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedASSETSCurrent assets:Cash and cash equivalents

$
279

$
80

$
8,637

$
4,981

$


$
13,977Accounts receivable, net








43,901


19,670





63,571Intercompany receivables








71,519





(71,519
)

Income taxes receivable

















Prepaid expenses





45


6,549


375





6,969Inventories








1,410


16





1,426Deferred income taxes


(517
)

1,553


1,240








2,276Other


7





2,676


851





3,534Total current assets


(231
)

1,678


135,932


25,893


(71,519
)

91,753Equity investments in joint ventures


496,340


1,028,910


44,011





(1,549,125
)

20,136Property and equipment, net








207,250


22,415





229,665Real estate subject to finance obligation








8,100








8,100Goodwill





114,064


644,699


12,135





770,898Intangible assets, net





12,978


71,783


475





85,236Other assets





16,963


4,420


9,159





30,542Intercompany note receivable

















Total assets

$
496,109

$
1,174,593

$
1,116,195

$
70,077

$
(1,620,644
)
$
1,236,330LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$


$
624

$
17,880

$
3,384

$


$
21,888Intercompany payables


841


59,758





11,037


(71,636
)

Accrued expenses





6,378


26,260


3,127





35,765Income taxes payable


442


(3,980
)

9,405


(471
)

598


5,994Current portion of long-term debt








8,780








8,780Current portion of finance obligation








53








53Other current liabilities








197








197Total current liabilities


1,283


62,780


62,575


17,077


(71,038
)

72,677Long-term debt, less current portion





580,645


9,406








590,051Finance obligation, less current portion








8,515








8,515Other long-term liabilities





4,966


10,002


1,013





15,981Deferred income taxes


(2,223
)

29,862


6,648


(335
)

(425
)

33,527Intercompany note payable

















Total liabilities


(940
)

678,253


97,146


17,755


(71,463
)

720,751Noncontrolling interestsredeemable














7,371


7,371Total Radiation Therapy Services Holdings, Inc. shareholder's equity


497,049


496,340


1,019,049


52,322


(1,567,711
)

497,049Noncontrolling interestsnonredeemable














11,159


11,159Total equity


497,049


496,340


1,019,049


52,322


(1,556,552
)

508,208Total liabilities and equity

$
496,109

$
1,174,593

$
1,116,195

$
70,077

$
(1,620,644
)
$
1,236,330


F-58

---





Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF OPERATIONS  SUCCESSOR YEAR ENDED DECEMBER 31, 2010  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedRevenues:Net patient service revenue

$


$


$
391,643

$
144,270

$


$
535,913Other revenue








6,377


672





7,049(Loss) income from equity investment


(113,441
)

(48,528
)

4,354





158,616


1,001Intercompany revenue





569


81,966





(82,535
)

Total revenues


(113,441
)

(47,959
)

484,340


144,942


76,081


543,963Expenses:Salaries and benefits


1,030





244,692


36,580





282,302Medical supplies








40,779


2,248





43,027Facility rent expenses








25,166


2,719





27,885Other operating expenses








23,965


3,138





27,103General and administrative expenses


2


2,669


59,567


3,560





65,798Depreciation and amortization








42,864


3,482





46,346Provision for doubtful accounts








3,566


5,265





8,831Interest expense, net


(9
)

54,934


4,011


(431
)




58,505Loss on sale of assets of a radiation treatment center








1,903








1,903Early extinguishment of debt





10,947











10,947Impairment Loss








97,916








97,916Intercompany expenses











82,703


(82,703
)

Total expenses


1,023


68,550


544,429


139,264


(82,703
)

670,563(Loss) income before income taxes


(114,464
)

(116,509
)

(60,089
)

5,678


158,784


(126,600
)Income tax (benefit) expense


(454
)

(1,389
)

(11,142
)

6


169


(12,810
)Net (loss) income


(114,010
)

(115,120
)

(48,947
)

5,672


158,615


(113,790
)Net income attributable to noncontrolling interestsredeemable and non-redeemable














(1,698
)

(1,698
)Net (loss) income attributable to Radiation Therapy Services Holdings, Inc. shareholder

$
(114,010
)
$
(115,120
)
$
(48,947
)
$
5,672

$
156,917

$
(115,488
)


F-59

---



Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF CASH FLOWS  SUCCESSOR YEAR ENDED DECEMBER 31, 2010  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedCash flows from operating activitiesNet (loss) income

$
(114,010
)
$
(115,120
)
$
(48,947
)
$
5,672

$
158,615

$
(113,790
)Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:Depreciation








35,581


3,430





39,011Amortization








7,283


52





7,335Deferred rent expense








895


285





1,180Deferred income tax provision (benefit)


(1,627
)

(1,335
)

(15,976
)

(335
)

(425
)

(19,698
)Stock-based compensation


1,030














1,030Impairment Loss








97,916








97,916Provision for doubtful accounts








3,566


5,265





8,831Loss on the sale of property and equipment








734








734Loss on sale of assets of a radiation treatment center








1,903








1,903Write off of pro-rata debt discount





494











494Write off of loan costs





1,593











1,593Early Extinguishment of debt





10,947











10,947Amortization of debt discount





791











791Amortization of loan costs





3,350











3,350Equity interest in net earnings of joint ventures


113,441


48,528


(4,354
)




(158,616
)

(1,001
)Distribution received from unconsolidated joint ventures








980








980Changes in operating assets and liabilities:Accounts receivable and other receivables








(11,660
)

(4,406
)




(16,066
)Income taxes receivable / payable


442


1,220


4,178


39


598


6,477Inventories








103


4





107Prepaid expenses





(1
)

4,214


212





4,425Intercompany payable / receivable


732


10,900


(9,804
)

(1,656
)

(172
)

Accounts payable





379


8,071


4





8,454Accrued expenses





(4,483
)

8,632


(163
)

5


3,991Net cash provided by (used in) operating activities


8


(42,737
)

83,315


8,403


5


48,994Cash flows from investing activitiesPurchases of property and equipment








(43,260
)

(521
)




(43,781
)Acquisition of radiation centers








(43,388
)







(43,388
)Purchase of joint venture interests





(1,000
)










(1,000
)Proceeds from the sale of property and equipment








1,693








1,693Repayments from (loans to) employees








457








457Intercompany notes to / from affiliates





500





(500
)




Contribution of capital to joint venture entities





(8,000
)

(3,711
)




8,000


(3,711
)Proceeds from sale of equity interest in joint venture








300


308


(608
)

Distributions received from joint venture





1,166


4,140





(5,279
)

27Change in other assets and other liabilities





(2,005
)

(826
)

28


(5
)

(2,808
)Net cash provided by (used in) investing activities





(9,339
)

(84,595
)

(685
)

2,108


(92,511
)Cash flows from financing activitiesProceeds from issuance of debt (net of original issue discount of $1,950)





316,550











316,550Principal repayments of debt





(260,667
)

(10,628
)







(271,295
)Repayments of finance obligation








(302
)







(302
)Payment of call premium on senior subordinated notes





(5,250
)










(5,250
)Proceeds from equity contribution


156





8,000





(8,000
)

156Payments of notes receivable from shareholder


50














50Proceeds from issuance of noncontrolling interest














608


608Cash distributions to noncontrolling interest holdersredeemable and non-redeemable














(3,176
)

(3,176
)Deconsolidation of noncontrolling interest











(14
)




(14
)Payments of loan costs





(12,791
)










(12,791
)Cash distributions to shareholders











(8,455
)

8,455


Net cash provided by (used in) financing activities


206


37,842


(2,930
)

(8,469
)

(2,113
)

24,536Net increase (decrease) in cash and cash equivalents


214


(14,234
)

(4,210
)

(751
)




(18,981
)Cash and cash equivalents, beginning of period


65


14,314


12,847


5,732





32,958Cash and cash equivalents, end of period

$
279

$
80

$
8,637

$
4,981

$


$
13,977


F-60

---





Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING BALANCE SHEETS  SUCCESSOR AS OF DECEMBER 31, 2009  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedASSETSCurrent assets:Cash and cash equivalents

$
65

$
14,314

$
12,847

$
5,732

$


$
32,958Accounts receivable, net








35,807


22,208





58,015Intercompany receivables








34,432





(34,432
)

Income taxes receivable





5,200


(5,227
)

510





483Prepaid expenses





44


7,160


353





7,557Inventories








1,416


20





1,436Deferred income taxes





7,445


1,214








8,659Other


7


5


6,097


49


(5
)

6,153Total current assets


72


27,008


93,746


28,872


(34,437
)

115,261Equity investments in joint ventures


610,256


1,027,225


41,949





(1,660,767
)

18,663Property and equipment, net








203,326


22,453





225,779Real estate subject to finance obligation








74,248








74,248Goodwill





128,711


685,617


12,313





826,641Intangible assets, net





13,881


77,863


527





92,271Other assets





11,675


6,433


8,254





26,362Intercompany note receivable





500








(500
)

Total assets

$
610,328

$
1,209,000

$
1,183,182

$
72,419

$
(1,695,704
)
$
1,379,225LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$


$
245

$
9,772

$
3,078

$


$
13,095Intercompany payables


109


21,564





12,679


(34,352
)

Accrued expenses





10,861


20,918


3,333


(5
)

35,107Current portion of long-term debt





3,470


10,491








13,961Current portion of finance obligation








1,128








1,128Other current liabilities





2,000











2,000Total current liabilities


109


38,140


42,309


19,090


(34,357
)

65,291Long-term debt, less current portion





516,871


18,227








535,098Finance obligation, less current portion








76,102








76,102Other long-term liabilities





7,695


6,269


912





14,876Deferred income taxes


(79
)

36,038


22,598








58,557Intercompany note payable











500


(500
)

Total liabilities


30


598,744


165,505


20,502


(34,857
)

749,924Noncontrolling interestsredeemable














7,294


7,294Total Radiation Therapy Services Holdings, Inc. shareholder's equity


610,298


610,256


1,017,677


51,917


(1,679,850
)

610,298Noncontrolling interestsnonredeemable














11,709


11,709Total equity


610,298


610,256


1,017,677


51,917


(1,668,141
)

622,007Total liabilities and equity

$
610,328

$
1,209,000

$
1,183,182

$
72,419

$
(1,695,704
)
$
1,379,225


F-61

---



Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF OPERATIONS  SUCCESSOR YEAR ENDED DECEMBER 31, 2009  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedRevenues:Net patient service revenue

$


$


$
369,728

$
147,918

$


$
517,646Other revenue








4,755


1,203





5,958(Loss) income from equity investment


(6,795
)

52,672


4,614





(49,611
)

880Intercompany revenue





845


86,862





(87,707
)

Total revenues


(6,795
)

53,517


465,959


149,121


(137,318
)

524,484Expenses:Salaries and benefits


962





219,734


38,836





259,532Medical supplies








43,913


1,448





45,361Facility rent expenses








19,964


2,142





22,106Other operating expenses








21,268


3,130





24,398General and administrative expenses


2


739


50,653


3,143





54,537Depreciation and amortization








43,605


2,811





46,416Provision for doubtful accounts








8,526


4,345





12,871Interest expense, net


(10
)

53,831


9,031


(350
)




62,502Impairment loss








3,470


4





3,474Intercompany expenses











87,707


(87,707
)

Total expenses


954


54,570


420,164


143,216


(87,707
)

531,197(Loss) income before income taxes


(7,749
)

(1,053
)

45,795


5,905


(49,611
)

(6,713
)Income tax (expense) benefit





7,680


(6,460
)

(218
)




1,002Net (loss) income


(7,749
)

(8,733
)

52,255


6,123


(49,611
)

(7,715
)Net income attributable to noncontrolling interestsredeemable and non-redeemable














(1,835
)

(1,835
)Net (loss) income attributable to Radiation Therapy Services Holdings, Inc. shareholder

$
(7,749
)
$
(8,733
)
$
52,255

$
6,123

$
(51,446
)
$
(9,550
)


F-62

---





Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF CASH FLOWS  SUCCESSOR YEAR ENDED DECEMBER 31, 2009  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedCash flows from operating activitiesNet (loss) income

$
(7,749
)
$
(8,733
)
$
52,255

$
6,123

$
(49,611
)
$
(7,715
)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Depreciation








29,211


2,626





31,837Amortization








14,394


185





14,579Deferred rent expense








2,170


1,029





3,199Deferred income tax provision


(34
)

(6,825
)

5,524








(1,335
)Stock-based compensation


962














962Impairment loss








3,470


4





3,474Provision for doubtful accounts








8,526


4,345





12,871Loss on the sale of property and equipment








1,345


(4
)




1,341Write-off of acquisition-related costs








812








812Amortization of debt discount





1,208











1,208Amortization of loan costs





2,850











2,850Equity interest in net earnings of joint ventures


6,795


(52,672
)

(4,614
)




49,611


(880
)Changes in operating assets and liabilities:Accounts receivable








(58
)

(3,732
)




(3,790
)Income taxes receivable and other receivables





10,910


2,776


(545
)




13,141Inventories








14


(4
)




10Prepaid expenses





(2
)

1,670


338





2,006Intercompany payable / receivable


58


64,302


(64,057
)

(303
)




Accounts payable





(98
)

(1,464
)

597





(965
)Accrued expenses





(627
)

(1,280
)

(300
)

(6
)

(2,213
)Net cash provided by (used in) operating activities


32


10,313


50,694


10,359


(6
)

71,392Cash flows from investing activitiesPurchases of property and equipment








(33,838
)

(1,605
)




(35,443
)Acquisition of radiation centers








(2,449
)







(2,449
)Restricted cash associated with earn-out provisions of acquisitions








2,269








2,269Purchase of joint venture interests








(13,593
)







(13,593
)Proceeds from the sale of property and equipment








39


105





144Repayments from (loans to) employees








451


27





478Contribution of capital to joint venture entities








(2,665
)




279


(2,386
)Proceeds from sale of equity interest in joint venture








250


385


(635
)

Distributions received from joint venture





1,142


3,959





(5,101
)

Change in other assets and other liabilities


3


(1,976
)

(1,464
)

239


6


(3,192
)Net cash provided by (used in) investing activities


3


(834
)

(47,041
)

(849
)

(5,451
)

(54,172
)Cash flows from financing activitiesPrincipal repayments of debt





(18,768
)

(10,925
)







(29,693
)Repayments of finance obligation








(1,242
)







(1,242
)Payments of notes receivable from shareholder


25














25Proceeds from issuance of noncontrolling interest














356


356Cash distributions to noncontrolling interest holdersredeemable and non-redeemable














(2,876
)

(2,876
)Cash distributions to shareholders











(7,977
)

7,977


Net cash provided by (used in) financing activities


25


(18,768
)

(12,167
)

(7,977
)

5,457


(33,430
)Net increase (decrease) in cash and cash equivalents


60


(9,289
)

(8,514
)

1,533





(16,210
)Cash and cash equivalents, beginning of period


5


23,603


21,361


4,199





49,168Cash and cash equivalents, end of period

$
65

$
14,314

$
12,847

$
5,732




$
32,958


F-63

---



Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF OPERATIONS  SUCCESSOR PERIOD FROM FEBRUARY 22 TO DECEMBER 31, 2008  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedRevenues:Net patient service revenue

$


$


$
294,173

$
119,132

$


$
413,305Other revenue





43


5,711


228





5,982(Loss) income from equity investment


(10,490
)

37,964


1,534





(29,126
)

(118
)Intercompany revenue





186


71,918





(72,104
)

Total revenues


(10,490
)

38,193


373,336


119,360


(101,230
)

419,169Expenses:Salaries and benefits


1,524


500


174,303


29,832





206,159Medical supplies








30,950


1,595





32,545Facility rent expenses








12,943


840





13,783Other operating expenses








15,150


1,877





17,027General and administrative expenses


1


2,057


38,746


2,589





43,393Depreciation and amortization








30,676


1,933





32,609Provision for doubtful accounts








12,283


5,613





17,896Interest expense, net


(10
)

50,803


4,609


(302
)




55,100Gain on sale of interest in a radiation practice








(3,113
)







(3,113
)Termination of professional services agreement








7,000








7,000Loss on sale of real estate








1,036








1,036Intercompany expenses





2,711





69,393


(72,104
)

Total expenses


1,515


56,071


324,583


113,370


(72,104
)

423,435(Loss) income before income taxes


(12,005
)

(17,878
)

48,753


5,990


(29,126
)

(4,266
)Income tax (expense) benefit





(14,058
)

11,714


931





(1,413
)Net (loss) income


(12,005
)

(3,820
)

37,039


5,059


(29,126
)

(2,853
)Net income attributable to noncontrolling interestsredeemable and non-redeemable














(2,483
)

(2,483
)Net (loss) income attributable to Radiation Therapy Services Holdings, Inc. shareholder

$
(12,005
)
$
(3,820
)
$
37,039

$
5,059

$
(31,609
)
$
(5,336
)


F-64

---





Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF CASH FLOWS  SUCCESSOR PERIOD FROM FEBRUARY 22 TO DECEMBER 31, 2008  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedCash flows from operating activitiesNet (loss) income

$
(12,005
)
$
(3,820
)
$
37,039

$
5,059

$
(29,126
)
$
(2,853
)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Depreciation








18,670


1,853





20,523Amortization








12,006


80





12,086Deferred rent expense





(20
)

1,081


75





1,136Deferred income tax provision


(45
)

4,289


(6,009
)







(1,765
)Stock-based compensation


1,524














1,524Provision for doubtful accounts








12,283


5,613





17,896Gain on sale of an interest in a radiation practice








(3,113
)







(3,113
)Loss on the sale of property and equipment








1,075








1,075Extinguishment of debt





4,808











4,808Amortization of debt discount





951











951Amortization of loan costs





2,359











2,359Equity interest in net earnings of joint ventures


10,490


(37,964
)

(1,534
)




29,126


118Changes in operating assets and liabilities:Accounts receivable and other receivables








(85
)

(4,793
)




(4,878
)Income taxes receivable





(10,791
)

14,193


35





3,437Inventories








84


56





140Prepaid expenses





81


(683
)

(10
)




(612
)Intercompany payable / receivable


51


3,489


2,130


(5,670
)




Accounts payable





(803
)

984


803





984Accrued expenses





9,692


3,458


(24
)

5


13,131Net cash provided by (used in) operating activities


15


(27,729
)

91,579


3,077


5


66,947Cash flows from investing activitiesPurchases of property and equipment








(31,527
)

(593
)




(32,120
)Acquisition of radiation centers








(71,624
)







(71,624
)Restricted cash associated with earn-out provisions of acquisitions








(2,269
)







(2,269
)Purchase of joint venture interests








(1,337
)







(1,337
)Proceeds from the sale of property and equipment








40,423








40,423Repayments from (loans to) employees








156


95





251Intercompany Notes to/from Affiliates








149


(149
)




Contribution of capital to joint venture entities


(174
)

(9
)

(9
)




183


(9
)Proceeds from sale of equity interest in joint venture








80





(80
)

Distributions received from joint venture





514


418





(932
)

Change in other assets and other liabilities


(10
)

(2
)

(1,828
)

252


(5
)

(1,593
)Net cash provided by (used in) investing activities


(184
)

503


(67,368
)

(395
)

(834
)

(68,278
)Cash flows from financing activitiesProceeds from issuance of debt





266,375


3,180








269,555Principal repayments of debt





(213,762
)

(9,902
)







(223,664
)Repayments of finance obligation








(512
)







(512
)Proceeds from equity contribution


174


174





9


(183
)

174Proceeds from issuance of noncontrolling interest














80


80Cash distributions to noncontrolling interest holdersredeemable and non-redeemable














(688
)

(688
)Cash distributions to shareholders











(1,620
)

1,620


Payments of loan costs





(1,924
)










(1,924
)Net cash provided by (used in) financing activities


174


50,863


(7,234
)

(1,611
)

829


43,021Net increase (decrease) in cash and cash equivalents


5


23,637


16,977


1,071





41,690Cash and cash equivalents, beginning of period





(34
)

4,384


3,128





7,478Cash and cash equivalents, end of period

$
5

$
23,603

$
21,361

$
4,199




$
49,168


F-65

---



Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF OPERATIONS  PREDECESSOR PERIOD FROM JANUARY 1 TO FEBRUARY 21, 2008  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedRevenues:Net patient service revenue

$


$


$
56,575

$
20,352

$


$
76,927Other revenue








1,084


56





1,140Income (loss) from equity investment





10,790


(199
)




(10,552
)

39Intercompany revenue





103


11,886





(11,989
)

Total revenues





10,893


69,346


20,408


(22,541
)

78,106Expenses:Salaries and benefits





829


35,011


6,369





42,209Medical supplies








2,575


349





2,924Facility rent expenses








2,125


144





2,269Other operating expenses








2,718


384





3,102General and administrative expenses





12,478


7,398


464





20,340Depreciation and amortization








4,938


409





5,347Provision for doubtful accounts








3,197


592





3,789Interest expense, net





3,710


1,083


(72
)




4,721Early extinguishment of debt





3,688











3,688Intercompany expenses











11,989


(11,989
)

Total expenses





20,705


59,045


20,628


(11,989
)

88,389(Loss) income before income taxes





(9,812
)

10,301


(220
)

(10,552
)

(10,283
)Income tax (expense) benefit





1,042


(527
)

55





570Net (loss) income





(10,854
)

10,828


(275
)

(10,552
)

(10,853
)Net income attributable to noncontrolling interestsredeemable and non-redeemable














(19
)

(19
)Net (loss) income attributable to Radiation Therapy Services Holdings, Inc. shareholder

$


$
(10,854
)
$
10,828

$
(275
)
$
(10,571
)
$
(10,872
)


F-66

---





Table of Contents

RADIATION THERAPY SERVICES HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2010, 2009 and 2008

(20) Supplemental Consolidating Financial Information (Continued)

CONSOLIDATING STATEMENTS OF CASH FLOWS  PREDECESSOR PERIOD FROM JANUARY 1 TO FEBRUARY 21, 2008  (in thousands)

Parent

RTS

Subsidiary
Guarantors

Subsidiary
Non-Guarantors

Eliminations

ConsolidatedCash flows from operating activitiesNet (loss) income

$


$
(10,854
)
$
10,828

$
(275
)
$
(10,552
)
$
(10,853
)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Depreciation








4,589


398





4,987Amortization








349


11





360Deferred rent expense





(1
)

272


12





283Deferred income tax provision





(3,001
)

831








(2,170
)Stock-based compensation





1,329











1,329Tax benefit from stock option exercise





(9,239
)










(9,239
)Provision for doubtful accounts








3,197


592





3,789Loss on the sale of property and equipment








7








7Extinguishment of debt





2,639











2,639Non-cash expenses related to merger





10,094











10,094Equity interest in net (earnings) loss of joint ventures





(10,790
)

199





10,552


(39
)Changes in operating assets and liabilities:Accounts receivable and other receivables








(9,476
)

(1,380
)




(10,856
)Income taxes receivable





13,116


(10,372
)

(5
)




2,739Inventories








(79
)

(2
)




(81
)Prepaid expenses





9


815


169





993Intercompany payable / receivable





(9,141
)

7,081


2,060





Accounts payable





237


(3,287
)

(121
)




(3,171
)Accrued expenses





4,768


1,842


(215
)

5


6,400Net cash provided by (used in) operating activities





(10,834
)

6,796


1,244


5


(2,789
)Cash flows from investing activitiesPurchases of property and equipment








(7,233
)

(296
)




(7,529
)Acquisition of radiation centers








(113
)







(113
)Repayments from (loans to) employees








(2
)

26





24Intercompany notes to/from affiliates








16


(16
)




Distributions received from joint venture





156


936





(1,092
)

Change in other assets and other liabilities





(12,446
)

(72
)

2


(5
)

(12,521
)Net cash provided by (used in) investing activities





(12,290
)

(6,468
)

(284
)

(1,097
)

(20,139
)Cash flows from financing activitiesPrincipal repayments of debt





(51
)

(2,420
)







(2,471
)Repayments of finance obligation








(114
)







(114
)Proceeds from exercise of stock options





14,164











14,164Tax benefit from stock option exercises





9,239











9,239Cash distributions to noncontrolling interest holdersredeemable and non-redeemable














(448
)

(448
)Payment of loan costs





(274
)










(274
)Cash distributions to shareholders











(1,540
)

1,540


Net cash provided by (used in) financing activities





23,078


(2,534
)

(1,540
)

1,092


20,096Net increase (decrease) in cash and cash equivalents





(46
)

(2,206
)

(580
)




(2,832
)Cash and cash equivalents, beginning of period





12


6,590


3,708





10,310Cash and cash equivalents, end of period

$


$
(34
)
$
4,384

$
3,128




$
7,478


F-67

---





Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 11, 2011.

RADIATION THERAPY SERVICES HOLDINGS, INC.
(Registrants)By:

/s/ DANIEL E. DOSORETZ, M.D. Daniel E. Dosoretz, M.D. Chief Executive Officer and Director


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the
date indicated.

Name

Title

Date/s/ JAMES L. ELROD, JR. James L. Elrod, Jr.

President and Director

March 11, 2011/s/ DANIEL E. DOSORETZ, M.D. Daniel E. Dosoretz, M.D.

Chief Executive Officer and Director (Principal Executive Officer)

March 11, 2011/s/ KERRIN E. GILLESPIE Kerrin E. Gillespie

Senior Vice President and Chief Financial Officer (Principal Financial Officer)

March 11, 2011/s/ JOSEPH BISCARDI Joseph Biscardi

Controller and Chief Accounting Officer (Principal Accounting Officer)

March 11, 2011/s/ BRYAN J. CAREY Bryan J. Carey

Director

March 11, 2011/s/ ANIL SHRIVASTAVA Anil Shrivastava

Director

March 11, 2011/s/ ERIN L. RUSSELL Erin L. Russell

Vice President and Director

March 11, 2011


---



Table of Contents

Name

Title

Date/s/ JAMES H. RUBENSTEIN, M.D. James H. Rubenstein, M.D.

Director

March 11, 2011/s/ HOWARD M. SHERIDAN, M.D. Howard M. Sheridan, M.D.

Director

March 11, 2011


SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT

No
annual report to security holders covering the registrant's last fiscal year and no proxy material have been sent to security holders with respect to any annual or other meeting of security
holders.

---





Table of Contents

EXHIBIT INDEX

Exhibit Number

Description1.1

Purchase Agreement, dated as of March 1, 2011, among Radiation Therapy Services, Inc., the guarantors named therein and the several purchasers named in Schedule I thereto, incorporated herein by reference
to Exhibit 1.1 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.2.1

Membership Interest Purchase Agreement, dated January 1, 2009, among Radiation Therapy Services International, Inc., Medical Developers, LLC, Lisdey, S.A., Alejandro Dosoretz and Bernardo Dosoretz,
for the purchase of membership interests in Medical Developers, LLC, incorporated herein by reference to Exhibit 2.1 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.*2.2

Stock Purchase Agreement, dated as of April 1, 2010, by and among 21st Century Oncology of South Carolina, LLC, R. Steven Bass, M.D., Paul Goetowski, M.D. and Todd Williams, M.D. concerning the purchase
of all of the outstanding capital stock of Carolina Regional Cancer Center, P.A., incorporated herein by reference to Exhibit 2.2 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.3.1

Amended and Restated Articles of Incorporation of Radiation Therapy Services, Inc. (as successor to RTS MergerCo, Inc.), incorporated herein by reference to Exhibit 3.1 to Radiation Therapy Services,
 Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.3.2

Bylaws of Radiation Therapy Services, Inc. (as successor to RTS MergerCo, Inc.), incorporated herein by reference to Exhibit 3.2 to Radiation Therapy Services, Inc.'s Registration Statement on
Form S-4 filed on November 24, 2010.3.3

Certificate of Incorporation of Radiation Therapy Services Holdings, Inc., incorporated herein by reference to Exhibit 3.3 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4
filed on November 24, 2010.3.4

Certificate of Amendment of the Certificate of Incorporation of Radiation Therapy Services Holdings, Inc.3.5

Bylaws of Radiation Therapy Services Holdings, Inc., incorporated herein by reference to Exhibit 3.4 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.4.1

Registration Rights Agreement, dated April 20, 2010, by and among Radiation Therapy Services, Inc., the guarantors named therein as guarantors, Wells Fargo Securities, LLC, Barclays Capital Inc.,
Banc of America Securities LLC, Daiwa Capital Markets America, Inc. and Fifth Third Securities, Inc., incorporated herein by reference to Exhibit 4.1 to Radiation Therapy Services, Inc.'s Registration Statement on
Form S-4 filed on November 24, 2010.4.2

Indenture, dated April 20, 2010, by and among Radiation Therapy Services, Inc., each guarantor named therein as guarantors and Wells Fargo Bank, National Association, incorporated herein by reference to
Exhibit 4.2 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.4.3

First Supplemental Indenture, dated as of June 24, 2010, by and among Phoenix Management Company, LLC, Carolina Regional Cancer Center, LLC, Atlantic Urology Clinics, LLC, Radiation Therapy
Services, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.3 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4
filed on November 24, 2010.


---



Table of Contents

Exhibit Number

Description4.4

Second Supplemental Indenture, dated as of September 29, 2010, by and Derm-Rad Investment Company, LLC, 21st Century Oncology of Pennsylvania, Inc., Gettysburg Radiation, LLC, Carolina Radiation
and Cancer Treatment Center, Inc., 21st Century Oncology of Kentucky, LLC, New England Radiation Therapy Management Services, Inc. and Radiation Therapy School for Radiation Therapy Technology, Inc., Radiation Therapy
Services, Inc., each other then existing guarantor named therein and Wells Fargo Bank, National Association, incorporated herein by reference to Exhibit 4.4 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4
filed on November 24, 2010.4.5

Third Supplemental Indenture, dated as of March 1, 2011, by and among Radiation Therapy Services, Inc. each other then existing guarantor named therein and Wells Fargo Bank, National Association,
incorporated herein by reference to Exhibit 4.1 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.4.6

Form of Notes, incorporated herein by reference to Exhibit 4.2 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.10.1

Credit Agreement, dated February 21, 2008, by and among Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the subsidiaries of Radiation Therapy Services, Inc. identified
therein as the guarantors, the institutions from time to time party thereto as lenders, Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), in its capacity as administrative agent for the lenders thereto and the other agents
and arrangers named therein, incorporated herein by reference to Exhibit 10.1 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.2

Amendment No. 1, dated August 15, 2008, to the Credit Agreement, dated February 21, 2008, by and among Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the
subsidiaries of Radiation Therapy Services, Inc. identified therein as the guarantors, the institutions from time to time party thereto as lenders, Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), in its capacity as
administrative agent for the lenders thereto and the other agents and arrangers named therein, incorporated herein by reference to Exhibit 10.2 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010..10.3

Amendment No. 2, dated April 1, 2010, to the Credit Agreement, dated February 21, 2008, by and among Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the
subsidiaries of Radiation Therapy Services, Inc. identified therein as the guarantors, the institutions from time to time party thereto as lenders, Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), in its capacity as
administrative agent for the lenders thereto and the other agents and arrangers named therein, incorporated herein by reference to Exhibit 10.3 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.10.4

Incremental Amendment, dated April 22, 2010, to the Credit Agreement dated February 21, 2008, by and among the Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the
subsidiaries of Radiation Therapy Services, Inc. identified therein as the guarantors, the institutions from time to time party thereto as lenders, Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), in its capacity as
administrative agent for the lenders thereto and the other agents and arrangers named therein and Barclays Bank PLC, as Incremental Revolving Lender, incorporated herein by reference to Exhibit 10.4 to Radiation Therapy Services,
 Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.


---



Table of Contents

Exhibit Number

Description10.5

Incremental Amendment, dated April 22, 2010, to the Credit Agreement dated February 21, 2008, by and among the Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the
subsidiaries of Radiation Therapy Services, Inc. identified therein as the guarantors, the institutions from time to time party thereto as lenders, Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), in its capacity as
administrative agent for the lenders thereto and the other agents and arrangers named therein and Bank of America, N.A., as Incremental Revolving Lender, incorporated herein by reference to Exhibit 10.5 to Radiation Therapy Services, Inc.'s
Registration Statement on Form S-4 filed on November 24, 2010.10.6

Waiver and Amendment No. 3, dated May 3, 2010, to the Credit Agreement, dated February 21, 2008, by and among Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., the
subsidiaries of Radiation Therapy Services, Inc. identified therein as the guarantors, the institutions from time to time party thereto as lenders, Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), in its capacity as
administrative agent for the lenders thereto and the other agents and arrangers named therein, incorporated herein by reference to Exhibit 10.6 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.10.7

Management Agreement, dated February 21, 2008, among Radiation Therapy Services, Inc., Radiation Therapy Services Holdings, Inc., Radiation Therapy Investments, LLC and Vestar Capital Partners,
 Inc., incorporated herein by reference to Exhibit 10.7 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.8

Amended and Restated Securityholders Agreement, dated March 25, 2008, by and among Radiation Therapy Investments, LLC and the other Securityholders party thereto, incorporated herein by reference to
Exhibit 10.8 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.9

Form of Management Stock Contribution and Unit Subscription Agreement (Preferred Units and Class A Units), incorporated herein by reference to Exhibit 10.9 to Radiation Therapy Services, Inc.'s
Registration Statement on Form S-4 filed on November 24, 2010.10.10

Management Stock Contribution and Unit Subscription Agreement (Preferred Units and Class A Units), dated February 21, 2008, by and between Radiation Therapy Investments, LLC and Daniel E. Dosoretz,
incorporated herein by reference to Exhibit 10.10 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.11

Form of Management Unit Subscription Agreement (Class B Units and Class C Units), incorporated herein by reference to Exhibit 10.11 to Radiation Therapy Services, Inc.'s Registration Statement on
Form S-4 filed on November 24, 2010.10.12

Purchase and Sale Agreement, dated September 30, 2008, among Nationwide Health Properties, Inc., 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., Maryland Radiation Therapy
Management Services, LLC f/k/a Maryland Radiation Therapy Management Services, Inc., Phoenix Management Company, LLC and American Consolidated Technologies, LLC for certain properties located in Florida, Maryland and Michigan,
incorporated herein by reference to Exhibit 10.12 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.


---



Table of Contents

Exhibit Number

Description10.13

Master Lease, dated September 30, 2008, among Nationwide Health Properties, Inc., 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., Maryland Radiation Therapy Management Services,
 LLC f/k/a Maryland Radiation Therapy Management Services, Inc., Phoenix Management Company, LLC and American Consolidated Technologies, LLC for certain facilities located in Florida, Maryland and Michigan, incorporated herein by
reference to Exhibit 10.3 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.14

Master Lease, dated March 31, 2010, as amended by that certain First Amendment to Master Lease, dated April 15, 2010, among Theriac Rollup, LLC, and its wholly-owned subsidiaries as Landlord and Arizona
Radiation Therapy Management Services, Inc., 21st Century Oncology, LLC, 21st Century Oncology Management Services, Inc., 21st Century Oncology of El Segundo, LLC, 21st Century Oncology of Kentucky, LLC,
Nevada Radiation Therapy Management Services, Inc., West Virginia Radiation Therapy Services, Inc., 21st Century Oncology of New Jersey, Inc., Central Massachusetts Comprehensive Cancer Center, LLC, Jacksonville Radiation
Therapy Services, Inc., 21st Century Oncology of Jacksonville, Inc., California Radiation Therapy Management Services, Inc. and Palms West Radiation Therapy, LLC, collectively as Tenant for certain facilities located in
Arizona, California, Florida, Kentucky, Massachusetts, New Jersey, Nevada and West Virginia, as guaranteed by Radiation Therapy Services, Inc, incorporated herein by reference to Exhibit 10.14 to Radiation Therapy Services, Inc.'s
Registration Statement on Form S-4 filed on November 24, 2010.10.15

Lease, dated December 29, 2009, between Theriac Enterprises of Peoria, LLC and Arizona Radiation Therapy Management Services, Inc., for premises in Peoria, Arizona, incorporated herein by reference to
Exhibit 10.15 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.16

Lease, dated December 29, 2009, between Theriac Enterprises of Gilbert, LLC and Arizona Radiation Therapy Management Services, Inc., for premises in Gilbert, Arizona, incorporated herein by reference to
Exhibit 10.16 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.17

Lease, dated December 29, 2009, between Theriac Enterprises of Rancho Mirage, LLC and California Radiation Therapy Management Services, Inc., for premises in Rancho Mirage, California, incorporated
herein by reference to Exhibit 10.17 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.18

Lease, dated December 29, 2009, between Theriac Enterprises of Bradenton, LLC and 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., for premises in Lakewood Ranch, Florida,
incorporated herein by reference to Exhibit 10.18 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.19

Lease, dated December 29, 2009, between Theriac Enterprises of Hammonton, LLC and 21st Century Oncology of New Jersey, Inc., for premises in Hammonton, New Jersey, incorporated herein by reference
to Exhibit 10.19 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.20

Lease, dated effective December 11, 2008, between Theriac Enterprises of Jacksonville, LLC and 21st Century Oncology of Jacksonville, Inc., for premises in Jacksonville, Florida, incorporated
herein by reference to Exhibit 10.20 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.21

Master Lease Agreement, dated December 21, 2010, between Theriac Rollup 2, LLC and West Virginia Radiation Therapy Services, Inc. for premises in Princeton, West Virginia.


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Table of Contents

Exhibit Number

Description10.22

Lease Agreement, dated September 16, 2008, as amended by that certain Second Amendment to Lease, effective July 1, 2008, and Third Amendment to Lease, dated December 31, 2009, between Theriac Enterprises of
Harrington, LLC and Central Massachusetts Comprehensive Cancer Center, LLC, for premises in Southbridge, Massachusetts, incorporated herein by reference to Exhibit 10.22 to Radiation Therapy Services, Inc.'s Registration Statement
on Form S-4 filed on November 24, 2010.10.23

Ground Lease, dated September 15, 2008, between Harrington Memorial Hospital, Inc. and Central Massachusetts Comprehensive Cancer Center, LLC, for premises in Southbridge, Massachusetts, incorporated
herein by reference to Exhibit 10.23 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.24

Construction Sublease, dated September 16, 2008, among Harrington Memorial Hospital, Inc., Central Massachusetts Comprehensive Cancer Center, LLC and Theriac Enterprises of Harington, LLC, for
premises in Southbridge, Massachusetts, incorporated herein by reference to Exhibit 10.24 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.25

Lease, dated September 16, 2008, between Theriac Enterprises of Harington, LLC and Harrington Memorial Hospital, Inc., for premises in Southbridge, Massachusetts, incorporated herein by reference to
Exhibit 10.25 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.26

Blanket Amendment to Leases, dated effective May 5, 2008, amending the: (i) Ground Lease between Harrington Memorial Hospital, Inc. and Central Massachusetts Comprehensive Cancer Center, LLC,
(ii) Construction Sublease, among Harrington Memorial Hospital, Inc., Central Massachusetts Comprehensive Cancer Center, LLC and Theriac Enterprises of Harington, LLC, (iii) Lease, between Central Massachusetts Comprehensive
Cancer Center, LLC and Theriac Enterprises of Harington, LLC, and (iv) Lease, between Theriac Enterprises of Harington, LLC and Harrington Memorial Hospital, Inc., for premises in Southbridge, Massachusetts, incorporated
herein by reference to Exhibit 10.26 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.27

Lease Agreement, dated August 21, 2007, as amended by that certain First Amendment to Lease Agreement, dated December 31, 2009, between Theriac Enterprises of Scottsdale, LLC and Arizona Radiation
Therapy Management Services, Inc., for premises in Scottsdale, Arizona, incorporated herein by reference to Exhibit 10.27 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.10.28

Lease, dated October 4, 1996, as amended by that certain First Amendment to Lease, dated December 31, 2009, between 445 Partners, LLC and North Carolina Radiation Enterprises, LLC, for premises in
Asheville, North Carolina, incorporated herein by reference to Exhibit 10.28 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.29

Lease Agreement effective July 1, 1987, between Kyle, Sheridan & Thorn Associates and 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., as successor in interest to Katin,
Dosoretz Radiation Therapy Associates, P.A., for premises in Ft. Myers, Florida, incorporated herein by reference to Exhibit 10.29 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.10.30

Lease, dated December 3, 1999, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Henderson Radiation Associates and Nevada Radiation Therapy Management Services, Inc.,
 for premises in Henderson, Nevada, incorporated herein by reference to Exhibit 10.30 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.


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Table of Contents

Exhibit Number

Description10.31

Lease, dated August 1, 2007, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Nevada Radiation Enterprises, LLC and Nevada Radiation Therapy Management Services,
 Inc., for premises in Las Vegas, Nevada, incorporated herein by reference to Exhibit 10.31 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.32

Lease, dated December 31, 1999, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Tamarac Radiation Associates and 21st Century Oncology, LLC f/k/a
21st Century Oncology, Inc., for premises in Tamarac, Florida, incorporated herein by reference to Exhibit 10.32 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.10.33

Lease, dated January 1, 2001, as amended by that certain First Amendment to Lease, dated December 3, 2009, between Bonita Radiation Associates and 21st Century Oncology, LLC f/k/a 21st Century
Oncology, Inc., for premises in Bonita Springs, Florida, incorporated herein by reference to Exhibit 10.33 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.34

Lease Agreement, dated May 21, 2001, between Fort Walton Radiation Associates, LLP and 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., for premises in Fort Walton Beach,
Florida, incorporated herein by reference to Exhibit 10.34 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.35

Lease Agreement, dated January 18, 2005, as amended by that certain First Amendment to Lease Agreement, dated December 31, 2009, between Fort Walton Beach Radiation Enterprises, LLC and
21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., for premises in Fort Walton Beach, Florida, incorporated herein by reference to Exhibit 10.35 to Radiation Therapy Services, Inc.'s Registration Statement on
Form S-4 filed on November 24, 2010.10.36

Lease Agreement, dated November 17, 2000, as amended by that certain First Amendment to Lease, dated December 31, 2009, between West Palm Radiation Associates, LLC and Palms West Radiation Associates,
 LLC, for premises in Palm Beach County, Florida, incorporated herein by reference to Exhibit 10.36 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.37

Lease, dated May 1, 2002, between Bradenton Radiation Associates and 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., as amended by that certain First Amendment to Lease, dated
December 31, 2009, for premises in Bradenton, Florida, incorporated herein by reference to Exhibit 10.37 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.38

Lease Agreement, dated October 1, 2002, between 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc. and Plantation Radiation Associates, for premises in Plantation, Florida,
incorporated herein by reference to Exhibit 10.38 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.39

Lease Agreement, dated January 21, 2003, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Yonkers Radiation Enterprises, LLC and New York Radiation Therapy
Management Services, Incorporated, for premises in Yonkers, New York, incorporated herein by reference to Exhibit 10.39 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.


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Table of Contents

Exhibit Number

Description10.40

Lease, dated February 1, 2003, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Lehigh Radiation Associates and 21st Century Oncology, LLC f/k/a 21st Century
Oncology, Inc., for premises in Lehigh Acres, Florida, incorporated herein by reference to Exhibit 10.40 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.41

Lease, dated November 19, 2003, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Destin Radiation Enterprises, LLC and 21st Century Oncology, LLC f/k/a
21st Century Oncology, Inc., for premises in Santa Rosa Beach, Florida, incorporated herein by reference to Exhibit 10.41 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.10.42

Sublease agreement dated October 21, 1999 between Radiation Therapy Services, Inc. and Westchester MRI Specialists, P.C, incorporated herein by reference to Exhibit 10.42 to Radiation Therapy Services,
 Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.43

Lease, dated June 1, 2005, as amended by that certain First Amendment to Lease Agreement, dated December 31, 2009, between Arizona Radiation Enterprises, LLC and Arizona Radiation Therapy Management
Services, Inc., for premises in Scottsdale, Arizona, incorporated herein by reference to Exhibit 10.43 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.44

Lease, dated January 30, 2003, effective February 20, 2004, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Crestview Radiation Enterprises, LLC and
21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., for premises in Crestview, Florida, incorporated herein by reference to Exhibit 10.44 to Radiation Therapy Services, Inc.'s Registration Statement on
Form S-4 filed on November 24, 2010.10.45

Lease, dated October 2005, as amended by that certain First Amendment to Lease Agreement, dated December 31, 2009, between Palm Springs Radiation Enterprises, LLC and California Radiation Therapy Management
Services, Inc., for premises in Palm Desert, California, incorporated herein by reference to Exhibit 10.45 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.46

Lease Agreement, dated February 7, 2007, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Theriac Enterprises of Littlestown, LLC and 21st Century Oncology of
Pennsylvania, Inc., for premises in Littlestown, Pennsylvania, incorporated herein by reference to Exhibit 10.46 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.47

Lease Agreement, dated March 12, 2007, as amended by that certain First Amendment to Lease Agreement, dated December 31, 2009, between Theriac Enterprises of Casa Grande, LLC and Arizona Radiation
Therapy Management Services, Inc., for premises in Casa Grande, Arizona, incorporated herein by reference to Exhibit 10.47 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.10.48

Lease Agreement, dated August 17, 2007, as amended by that certain First Amendment to Lease, dated December 31, 2009, between Marco Island Radiation Enterprises, LLC and 21st Century Oncology,
 LLC f/k/a 21st Century Oncology, Inc., for premises in Naples, Florida, incorporated herein by reference to Exhibit 10.48 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.


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Table of Contents

Exhibit Number

Description10.49

Administrative Services Agreement, dated January 1, 1997, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2008, Addendum to Administrative Services Agreement, dated
January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between New York Radiation Therapy Management Services, Incorporated and Yonkers Radiation Medical Practice, P.A. (incorporated herein by reference to
Exhibit 10.49 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010), and Addendum to Administrative Services Agreement, dated January 1, 2011, between New York Radiation Therapy
Management Services, LLC f/k/a New York Radiation Therapy Management Services, Inc. and Yonkers Radiation Medical Practice, P.A.10.50

Administrative Services Agreement, dated January 1, 2002, as amended by that certain Addendum to Administrative Services Agreement, dated January 1, 2002, Addendum to Administrative Services Agreement, dated
January 1, 2004, Addendum to Administrative Services Agreement, dated January 1, 2005, Addendum to Administrative Services Agreement, dated January 1, 2006, Addendum to Administrative Services Agreement, dated January 1, 2008,
Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between North Carolina Radiation Therapy Management Services, LLC f/k/a North Carolina
Radiation Therapy Management Services, Inc. and Radiation Therapy Associates of Western North Carolina, P.A. (incorporated herein by reference to Exhibit 10.50 to Radiation Therapy Services, Inc.'s Registration Statement on
Form S-4 filed on November 24, 2010) and Addendum to Administrative Services Agreement, dated January 1, 2011, between North Carolina Radiation Therapy Management Services, LLC and Radiation Therapy Associates of Western North
Carolina, P.A.10.51

Administrative Services Agreement, dated January 9, 1998, as amended by that certain Amendment to Administrative Services Agreement, dated January 1, 1999, Amendment to Administrative Services Agreement,
dated January 1, 1999, Amendment to Administrative Services Agreement, January 1, 2001, Amendment to Administrative Services Agreement, January 1, 2002, Amendment to Administrative Services Agreement, January 1, 2003, Amendment to
Administrative Services Agreement, January 1, 2004, Amendment to Administrative Services Agreement, January 1, 2005, Amendment to Administrative Services Agreement, January 1, 2006, and Amendment to Administrative Services Agreement,
August 1, 2006, between Nevada Radiation Therapy Management Services, Incorporated and Michael J. Katin, M.D., Prof. Corp., incorporated herein by reference to Exhibit 10.51 to Radiation Therapy Services, Inc.'s Registration Statement
on Form S-4 filed on November 24, 2010.10.52

Administrative Services Agreement, dated October 31, 1998, as amended by that certain Amendment to Administrative Services Agreement effective April 1, 2005, Addendum to Administrative Services Agreement,
dated January 1, 2008, Addendum to Administrative Services Agreement, dated January 1, 2009, Addendum to Administrative Services Agreement, dated January 1, 2010, between Maryland Radiation Therapy Management Services LLC f/k/a
Maryland Radiation Therapy Management Services, Inc. and Katin Radiation Therapy, P.A. (incorporated herein by reference to Exhibit 10.52 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010), and Addendum to Administrative Services Agreement, dated January 1, 2011, between Maryland Radiation Therapy Management Services, LLC and Katin Radiation Therapy, P.A.10.53

Professional Services Agreement, dated January 1, 2005, between Berlin Radiation Therapy Treatment Center, LLC and Katin Radiation Therapy, P.A., incorporated herein by reference to Exhibit 10.53 to
Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.


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Table of Contents

Exhibit Number

Description10.54

Independent Contractor Agreement, dated October 18, 2005, between Katin Radiation Therapy, P.A. and Ambergris, LLC, incorporated herein by reference to Exhibit 10.54 to Radiation Therapy Services,
 Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.55

Administrative Services Agreement, dated August 1, 2003, as amended by that certain Amendment to Administrative Services Agreement, dated January 1, 2005, between California Radiation Therapy Management
Services, Inc. and 21st Century Oncology of California, a Medical Corporation, incorporated herein by reference to Exhibit 10.55 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.10.56

Management Services Agreement, dated May 1, 2006, between 21st Century Oncology of California, a Medical Corporation and California Radiation Therapy Management Services, Inc., as successor by
assignment pursuant to that certain Assignment and Assumption Agreement, dated May 1, 2006, between California Radiation Therapy Management Services, Inc. and LHA, Inc., as amended by that certain Addendum to Management Services
Agreement, dated August 1, 2006, Second Amendment to Management Services Agreement, dated November 1, 2006, and Third Addendum to Management Services Agreement, dated August 1, 2007, for premises in Palm Desert, Santa Monica and
Beverly Hills, California, incorporated herein by reference to Exhibit 10.56 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.57

Facilities and Management Services Agreement, dated October 13, 2008, among 21st Century OncologyCHW, LLC, 21st Century Oncology of California, A Medical Corporation and Redding Radiation
Oncologists, P.C., incorporated herein by reference to Exhibit 10.57 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.58

Five Party Agreement, dated May 5, 2009, among Central Massachusetts Comprehensive Cancer Center, LLC, Harrington Memorial Hospital, Inc., Theriac Enterprises of Harrington, LLC, Bank of America,
N.A., and Alliance Oncology, LLC, incorporated herein by reference to Exhibit 10.58 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.59

Management Services Agreement, dated June 1, 2005, as amended by that certain Addendum, dated January 1, 2006, between New England Radiation Therapy Management Services, Inc. and Massachusetts Oncology
Services, P.C., incorporated herein by reference to Exhibit 10.59 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.60

Professional Services Agreement, dated January 1, 2009, between Radiosurgery Center of Rhode Island, LLC and Massachusetts Oncology Services, P.C., incorporated herein by reference to Exhibit 10.60 to
Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.61

Radiation Therapy Services Agreement, dated as of January 1, 2010, between South County Radiation Therapy, LLC and Massachusetts Oncology Services, P.C., incorporated herein by reference to
Exhibit 10.61 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.62

Radiation Therapy Services Agreement, dated as of January 1, 2010 between Southern New England Regional Cancer Center, LLC and Massachusetts Oncology Services, P.C., incorporated herein by reference to
Exhibit 10.62 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.


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Table of Contents

Exhibit Number

Description10.63

Transition Agreement and Stock Pledge, dated 2008, among 21st Century OncologyCHW, LLC, Redding Radiation Oncologists, P.C. and Michael J. Katin, M.D., incorporated herein by reference to
Exhibit 10.63 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.64

Transition Agreement and Stock Pledge, dated August 2007, among American Consolidated Technologies, LLC, RADS, PC Oncology Professionals and Michael J. Katin, M.D., incorporated herein by reference to
Exhibit 10.64 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.65

Transition Agreement and Stock Pledge, dated August 2007, among Phoenix Management Company, LLC, American Oncologic Associates of Michigan, P.C. and Michael J. Katin, M.D., incorporated herein by reference to
Exhibit 10.63 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.66

Transition Agreement and Stock Pledge, dated August 2007, among Phoenix Management Company, LLC, X-Ray Treatment Center, P.C. and Michael J. Katin, M.D., incorporated herein by reference to Exhibit 10.66 to
Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.67

Transition Agreement and Stock Pledge, dated June 1, 2005, among New England Radiation Therapy Management Services, Inc., Massachusetts Oncology Services, P.C., Daniel E. Dosoretz, M.D. and Michael J. Katin,
M.D., incorporated herein by reference to Exhibit 10.67 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.68

Transition Agreement and Stock Pledge, dated September 3, 2003, among California Radiation Therapy Management Services, Inc., 21st Century Oncology of California, A Medical Corporation and Michael J.
Katin, M.D., incorporated herein by reference to Exhibit 10.68 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.69

Transition Agreement and Stock Pledge, dated August 1, 2002, among North Carolina Radiation Therapy Management Services, LLC f/k/a North Carolina Radiation Therapy Management Services, Inc., Radiation
Therapy Associates of Western North Carolina, P.A. and Michael J. Katin, M.D., incorporated herein by reference to Exhibit 10.69 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.10.70

Healthcare Professional Liability Claims Made and Healthcare General Liability Occurrence Insurance Policy, for the policy period from October 14, 2009 to October 14, 2010, issued by Batan Insurance Company
SPC, LTD to Radiation Therapy Services, Inc., incorporated herein by reference to Exhibit 10.70 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.71

Excess Physician Professional Liability Insurance Policy, for the policy period from October 14, 2009 to October 14, 2010, issued by Batan Insurance Company SPC, LTD on behalf of RTSI Segregated
Portfolio to Radiation Therapy Services, Inc., incorporated herein by reference to Exhibit 10.71 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.72

Excess Professional Physician and General Liability Insurance Policy, Claims Made and Reported Coverage, for the policy period from October 14, 2009 to October 14, 2010, issued by Batan Insurance Company SPC,
 LTD on behalf of RTSI Segregated Portfolio to Radiation Therapy Services, Inc., incorporated herein by reference to Exhibit 10.72 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.


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Table of Contents

Exhibit Number

Description10.73

Physician Professional Liability Insurance Policy, the policy period from October 14, 2009 to October 14, 2010, issued by National Medical Professional Risk Retention Group, Inc. to Radiation Therapy
Services, Inc./21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., incorporated herein by reference to Exhibit 10.73 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.10.74

Executive Employment Agreement, dated effective as of February 21, 2008, between Radiation Therapy Services, Inc. and Daniel E. Dosoretz, incorporated herein by reference to Exhibit 10.74 to Radiation
Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.75

Physician Employment Agreement, dated February 21, 2008, between Daniel E. Dosoretz, M.D. and 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc., incorporated herein by
reference to Exhibit 10.75 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.76

Executive Employment Agreement, dated effective as of February 8, 2010, between Radiation Therapy Services, Inc. and Kerrin E. Gillespie, incorporated herein by reference to Exhibit 10.76 to Radiation
Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.77

Executive Employment Agreement, dated effective as of February 21, 2008, between Radiation Therapy Services, Inc. and James H. Rubenstein, M.D., incorporated herein by reference to Exhibit 10.77 to
Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.78

Executive Employment Agreement, dated effective as of February 21, 2008, as amended by that certain Amendment to Executive Employment Agreement, dated December 15, 2008 (incorporated herein by reference to
Exhibit 10.78 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010) and Second Amendment to Executive Employment Agreement, dated February 2, 2011, between Radiation Therapy
Services, Inc. and Norton Travis.+10.79

Executive Employment Agreement, dated effective as of February 21, 2008, between Radiation Therapy Services, Inc. and Howard Sheridan, incorporated herein by reference to Exhibit 10.79 to Radiation
Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.80

Physician Employment Agreement, dated effective as of July 1, 2003, as amended by that certain Amendment to Physician Employment Agreement, dated January 1, 2006, Second Amendment to Physician Employment
Agreement, dated October 1, 2006, and Third Amendment to Physician Employment Agreement, dated January 1, 2007, between 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc. and Constantine A. Mantz, M.D.,
incorporated herein by reference to Exhibit 10.80 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.81

Physician Employment Agreement, dated effective as of January 1, 2002, as amended by that certain First Amendment to Physician Employment Agreement, dated effective as of July 1, 2002, Second Amendment to
Physician Employment Agreement, dated effective as of March 24, 2007, and Third Amendment to Physician Employment Agreement, dated effective as of November 11, 2009, between 21st Century Oncology, LLC f/k/a 21st Century
Oncology, Inc. and Eduardo Fernandez, M.D., incorporated herein by reference to Exhibit 10.81 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+


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Table of Contents

Exhibit Number

Description10.82

Physician Employment Agreement, dated February 21, 2008, as amended by that certain Amendment to Physician Employment Agreement, dated February 1, 2010, between James H. Rubenstein, M.D. and 21st Century
Oncology, Inc., incorporated herein by reference to Exhibit 10.82 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.+10.83

Physician Sharing Agreement, dated effective as of August 1, 2003, between 21st Century Oncology, LLC f/k/a 21st Century Oncology, Inc. and Radiation Therapy Associates of Western North
Carolina, P.A., incorporated herein by reference to Exhibit 10.83 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.84

Personal and Services Agreement, dated effective as of December 1, 2004, between Imaging Initiatives, Inc and 21st Century Oncology, Inc., incorporated herein by reference to Exhibit 10.84 to
Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.85

Business Operations and Support Agreement, dated July 20, 1999, as amended by that certain Amendment to Business Operations and Support Agreement, dated November 15, 2006, by and between Phoenix Management
Company, LLC and X-Ray Treatment Center, P.C., incorporated herein by reference to Exhibit 10.85 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.86

Business Operations and Support Agreement, dated August 19, 2000, as amended by that certain Amendment to Business Operations and Support Agreement, dated November 15, 2006, by and between American
Consolidated Technologies, LLC and RADS, P.C. Oncology Professionals, incorporated herein by reference to Exhibit 10.86 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24,
2010.10.87

Business Operations and Support Agreement, dated August 19, 2000, as amended by that certain Amendment to Business Operations and Support Agreement, dated November 15, 2006, by and between Phoenix Management
Company, LLC, as successor by merger of Pontiac Investment Associates, a Michigan Partnership and American Oncologic Associates of Michigan, P.C., incorporated herein by reference to Exhibit 10.87 to Radiation Therapy Services, Inc.'s
Registration Statement on Form S-4 filed on November 24, 2010.10.88

Physician Sharing Agreement, dated as of October 1, 2006, between Katin Radiation Therapy, P.A. and 21st Century Oncology of Harford County, Maryland, LLC, incorporated herein by reference to
Exhibit 10.88 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.89

Radiation Therapy Services Agreement, dated effective as of February 1, 2007, between Roger Williams Radiation Therapy, LLC and Massachusetts Oncology Services, P.C., incorporated herein by reference to
Exhibit 10.89 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.90

Second Amended and Restated Limited Liability Company Agreement of Radiation Therapy Investments, LLC, dated March 25, 2008, incorporated herein by reference to Exhibit 10.90 to Radiation Therapy
Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.91

Guaranty and Collateral Agreement, dated as of February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services,
 Inc. listed therein and Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), incorporated herein by reference to Exhibit 10.91 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4
filed on November 24, 2010.


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Table of Contents

Exhibit Number

Description10.92

Supplement No. 1, dated as of June 6, 2008, between Jacksonville Radiation Therapy Services, Inc. and Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), to the Guaranty and
Collateral Agreement, dated as of February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank,
N.A., incorporated herein by reference to Exhibit 10.92 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.93

Supplement No. 2, dated as of April 22, 2010, between Phoenix Management Company, LLC and Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), to the Guaranty and Collateral
Agreement, dated as of February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A.,
incorporated herein by reference to Exhibit 10.93 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.94

Supplement No. 3, dated as of June 24, 2010, between Carolina Regional Cancer Center, LLC and Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), to the Guaranty and Collateral
Agreement, dated as of February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A.,
incorporated herein by reference to Exhibit 10.94 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.95

Supplement No. 4, dated as of June 24, 2010, between Atlantic Urology Clinics, LLC and Wells Fargo Bank, N.A. (as successor to Wachovia Bank, National Association), to the Guaranty and Collateral
Agreement, dated as of February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A.,
incorporated herein by reference to Exhibit 10.95 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.96

Supplement No. 5, dated as of September 30, 2010, between Derm-Rad Investment Company, LLC and Wells Fargo Bank, N.A., to the Guaranty and Collateral Agreement, dated as of February 21, 2008, among
Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A., incorporated herein by reference to Exhibit 10.96 to
Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.97

Supplement No. 6, dated as of September 30, 2010, between 21st Century Oncology of Pennsylvania, Inc. and Wells Fargo Bank, N.A., to the Guaranty and Collateral Agreement, dated as of
February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A., incorporated herein by
reference to Exhibit 10.97 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.98

Supplement No. 7, dated as of September 30, 2010, between Gettysburg Radiation, LLC and Wells Fargo Bank, N.A., to the Guaranty and Collateral Agreement, dated as of February 21, 2008, among
Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A., incorporated herein by reference to Exhibit 10.98 to
Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.


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Table of Contents

Exhibit Number

Description10.99

Supplement No. 8, dated as of September 30, 2010, between Carolina Radiation and Cancer Treatment Center, Inc. and Wells Fargo Bank, N.A., to the Guaranty and Collateral Agreement, dated as of
February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A., incorporated herein by
reference to Exhibit 10.99 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.100

Supplement No. 9, dated as of September 30, 2010, between 21st Century Oncology of Kentucky, LLC and Wells Fargo Bank, N.A., to the Guaranty and Collateral Agreement, dated as of February 21,
2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A., incorporated herein by reference to
Exhibit 10.100 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.101

Supplement No. 10, dated as of September 30, 2010, between New England Radiation Therapy Management Services, Inc. and Wells Fargo Bank, N.A., to the Guaranty and Collateral Agreement, dated as of
February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A., incorporated herein by
reference to Exhibit 10.101 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.102

Supplement No. 11, dated as of September 30, 2010, between Radiation Therapy School for Radiation Therapy Technology, Inc. and Wells Fargo Bank, N.A., to the Guaranty and Collateral Agreement, dated as
of February 21, 2008, among Radiation Therapy Services Holdings, Inc., Radiation Therapy Services, Inc., certain subsidiaries of Radiation Therapy Services, Inc. listed therein and Wells Fargo Bank, N.A., incorporated herein by
reference to Exhibit 10.102 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.103

Form of Indemnification Agreement (Directors and/or Officers), incorporated herein by reference to Exhibit 10.103 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on
November 24, 2010.+10.104

Amendment No. 1, dated as of November 24, 2010, to the Second Amended and Restated Limited Liability Company Agreement of Radiation Therapy Investments, LLC, dated March 25, 2008, incorporated
herein by reference to Exhibit 10.104 to Radiation Therapy Services, Inc.'s Registration Statement on Form S-4 filed on November 24, 2010.10.105

Commitment Letter, dated January 10, 2011, by and between DDJ Capital Management, LLC and Radiation Therapy Services, Inc., incorporated herein by reference to Exhibit 10.105 to Radiation Therapy
Services Holdings, Inc.'s 8-K filing on January 24, 2011.10.106

Amended and Restated Radiation Therapy Investments, LLC 2008 Unit Award Plan, adopted on February 21, 2008, as amended and restated on March 1, 2011, , incorporated herein by reference to
Exhibit 10.3 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 4, 2011.10.107

Membership Interest Purchase Agreement, dated as of March 1, 2011, by and among Radiation Therapy Services International, Inc., Main Film B.V., Radiation Therapy Services, Inc., Radiation Therapy
Investments, LLC, Alejandro Dosoretz, and Claudia Elena Kaplan Browntein de Dosoretz, incorporated herein by reference to Exhibit 10.1 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7,
2011.


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Table of Contents

Exhibit Number

Description10.108

Membership Interest Purchase Agreement, dated as of March 1, 2011, by and among Radiation Therapy Services International, Inc., Main Film B.V., Bernardo Dosoretz, and Eduardo Chehtman, incorporated herein
by reference to Exhibit 10.2 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.10.109

Membership Interest Purchase Agreement, dated as of March 1, 2011, by and among Radiation Therapy Services International, Inc., Radiation Therapy Services, Inc., Radiation Therapy Investments, LLC,
Bernardo Dosoretz and Eduardo Chehtman, incorporated herein by reference to Exhibit 10.3 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.10.110

Contribution Agreement, dated March 1, 2011, by and between Radiation Therapy Investments, LLC and Alejandro Dosoretz, incorporated herein by reference to Exhibit 10.4 to Radiation Therapy Services
Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.10.111

Registration Rights Agreement, dated March 1, 2011, by and among Radiation Therapy Services, Inc., the guarantors party thereto and the purchasers named in Schedule II thereto, incorporated herein by
reference to Exhibit 10.5 to Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.10.112

Registration Rights Agreement, dated March 1, 2011, by and among Radiation Therapy Services, Inc., the guarantors party thereto and Bernardo Dosoretz, incorporated herein by reference to Exhibit 10.6 to
Radiation Therapy Services Holdings, Inc's Current Report on Form 8-K filed on March 7, 2011.12.1

Statement Re: Computation of Ratio of Earnings to Fixed Charges.14.1

Code of Ethics.21.1

Subsidiaries of Registrant.23.1

Consent of Independent Registered Public Accounting Firm31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1

Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2

Certification of Executive Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*Schedules
have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental
copies of any of the omitted schedules upon request by the Securities and Exchange Commission.+Management
contracts and compensatory plans and arrangements.


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