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Addus Healthcare, Inc. Robert James Cimasi, ASA, CBA, AVA, FCBI, CM&A, CMP ©HEALTH CAPITAL CONSULTANTS

Appendix A Qualifications of Valuators

APPENDIX A

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Appendix A- Page 1 of 22


EXPERIENCE Robert James Cimasi, ASA, CBA, AVA, FCBI, CM&A, CMP is President of HEALTH CAPITAL CONSULTANTS (HCC) with over twenty years (20) of experience in serving clients, in over forty five (45) states, with a professional focus on the financial and economic aspects of healthcare service sector entities including: valuation consulting; litigation support; business intermediary and financing services; certificate-of-need consulting; and, healthcare transactions including sales, mergers, and acquisitions. Mr. Cimasi holds the Accredited Senior Appraiser (ASA) designation in Business Valuation, as well as, the Certified Business Appraiser (CBA), Accredited Valuation Analyst (AVA), Certified Business Intermediary (Fellow) (FCBI), the Alliance of Merger & Acquisition Advisors CM&A, and the Certified Medical Planner (CMP) designations (see Professional Designations section below). Mr. Cimasi is a nationally known speaker on healthcare industry topics, who has served as conference faculty or presenter such organizations as the American Society of Appraisers (ASA), Institute of Business Appraisers (IBA), International Business Brokers Association (IBBA), American Institute of Certified Public Accountants (AICPA), American College of Healthcare Executives (ACHE), National Association of Healthcare Consultants (NAHC), National CPA Health Care Advisors Association, National Litigation Support Services Association (NLSSA), and many other national and state healthcare companies and organizations, as well as industry associations and professional societies (see Presentations section below). He has been certified and has served as an expert witness on cases in several states, and has provided testimony before federal and state legislative committees. He is the author of A Guide To Consulting Services for Emerging Healthcare Organizations (John Wiley & Sons, 1999), The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment (IBA Course 1011 text - 1999), and the author of An Exciting Insight Into the Health Care Industry and Medical Practice Valuation (AICPA Business Valuation course text 1997, rev. 2004.) He has written chapters on medical practice valuation in The Handbook of Business Valuation (John Wiley & Sons), Valuing Professional Practices and Licenses: A Guide for the Matrimonial Practitioner, 3rd ed., 1999 (Aspen Law & Business), and Valuing Specific Assets in Divorce (Aspen Law & Business) and has been a contributor to The Guide to Business Valuations (Practitioners Publishing Company) and Physician’s Managed Care Success Manual: Strategic Options, Alliances, and Contracting Issues (Mosby). He has written numerous published articles, has presented several papers and case studies before national conferences, and is often quoted by healthcare industry trade publications and the general media. Mr. Cimasi’s latest book, The Healthcare Certificate of Need Sourcebook, is due to be published later this year by Beard Books (see the Publications and Quotations sections below)

9666 Olive Blvd., Suite 375 • St. Louis, Missouri 63132-3013 (314) 994-7641 • Fax (314) 991-3435

[email protected] • www.healthcapital.com

APPENDIX A

ROBERT JAMES CIMASI, ASA, CBA, AVA, FCBI, CM&A, CMP



PROFESSIONAL DESIGNATIONS

ASA—Accredited Senior Appraiser, Designated in: Business Valuation, American Society of Appraisers (ASA)

CBA—Certified Business Appraiser, Institute of Business Appraisers (IBA) AVA—Accredited Valuation Analyst,

National Association of Certified Valuation Analysts (NACVA) FCBI—Certified Business Intermediary, Fellow, International Business Brokers Association

(IBBA) CM&A—Alliance of Merger & Acquisition Advisors (AM&AA) CMP—Certified Medical Planner, Institute of Medical Business Advisors, Inc. CBC—Certified Business Counselor, Institute of Certified Business Counselors (ICBC)

VALUATION EDUCATION

Lindenwood College, St. Charles, Missouri –Bachelor of Arts in Valuation Science Meramec Community College, St. Louis, Missouri-Associate Degree in Real Estate Appraisal

PARTICIPATION IN PROFESSIONAL SOCIETIES & ORGANIZATIONS

AAHC—American Association of Healthcare Consultants ABA—American Bar Association ACHE—American College of Healthcare Executives AH—Academy Health f/k/a Academy for Health Services Research and Health Policy AHA—American Hospital Association AHPA—American Health Planning Association AICPA—American Institute of Certified Public Accountants AM&AA—The Alliance of Mergers and Acquisition Advisors ASA—American Society of Appraisers

[Member of ASA Business Valuation Standards Subcommittee] CEIR—Center for Economic and Industry Research HFMA—Healthcare Financial Management Association IBA—Institute of Business Appraisers

[Editorial Review Board for Business Appraisal Practice, (BAP)—Journal of the IBA] IBBA—International Business Brokers Association – Past member of the Board of Directors ICBC—Institute of Certified Business Counselors MGMA—Medical Group Management Association NACVA—National Association of Certified Valuation Analysts NAFE—National Association of Forensic Economists NAHC—National Association of Healthcare Consultants NBVG—National Business Valuation Group NHCQA—National Healthcare Cost & Quality Association NABVSC—North American Business Valuation Standards Council PVSG—Practice Valuation Study Group

SHPM—Society for Healthcare Planning and Marketing (St. Louis) SLBVR—St. Louis Business Valuation Roundtable SLSAE—St. Louis Society of Association Executives

APPENDIX A




COMMUNITY INVOLVEMENT

Missouri Certificate of Need Technical Advisory Committee (CONTAC)—committee member, 2001.

St. Joseph’s Institute for the Deaf—past member of Board of Directors BOOKS AND CHAPTERS PUBLISHED

“Medical Malpractice and Tort Reform Risks (Crisis or … Red Herring?),” chapter in Insurance and Risk Management Strategies: For Physicians and Advisors. David Marcinko, M.D., Ed. Jones and Bartlett (2004).

An Exciting Insight Into the Health Care Industry and Medical Practice Valuation. Course textbook for the AICPA’s Business Valuation course (HCIV) (2002. 2004).

“Anatomy of an MSO Gone Wrong,” chapter in supplement to Financial Planning for Physicians and Healthcare Professionals 2002. David Marcinko, M.D., Ed. Aspen Publishers (2002).

“Lessons from Market Competition in Healthcare,” chapter in supplement to Financial Planning for Physicians and Healthcare Professionals 2002. David Marcinko, M.D., Ed. Aspen Publishers (2002).

“Rural Hospital Networks,” chapter in supplement to Financial Planning for Physicians and Healthcare Professionals 2002. David Marcinko, M.D., Ed. Aspen Publishers (2002).

“The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment,” chapter in supplement to Financial Planning for Physicians and Healthcare Professionals 2002. David Marcinko, M.D., Ed. Aspen Publishers (2002).

“Valuation of Healthcare Assets,” chapter in supplement to Financial Planning for Physicians and Healthcare Professionals 2002. David Marcinko, M.D., Ed. Aspen Publishers (2002).

“Medical Practice Valuation in Divorce,” chapter in Valuing Specific Assets in Divorce. Robert D. Feder, Esq., Ed. Aspen Law & Business (2000).

Appraisal MD Pro. Valuation software and users manual. John Wiley & Sons, ValuSource Division, (released March 2000).

The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment. Course textbook for the Institute of Business Appraisers’ Course #1011 (1999, updated 2000).

A Guide to Consulting Services for Emerging Healthcare Organizations. John Wiley & Sons (1999).

“Physician Integration Organization, Sample Business Plan (Appendix A),” appendix in Physician’s Managed Care Success Manual: Strategic Options, Alliances, and Contracting Issues. Scott Becker, JD, CPA. Mosby (1999) p. 325-330.

“Medical Practice Valuation in a Changing Market,” chapter in Valuing Professional Practices and Licenses: A Guide for the Matrimonial Practitioner. Ronald L. Brown, Ed. Aspen Law & Business (and, 2nd edition 1997, 3rd edition 2002, 4th edition 2003).

[Medical practice valuation research sources and bibliographies] in Guide to Business Valuations, by Shannon Pratt, et al.. Practitioners Publishing Company (1998).

“Valuing Medical Practices,” chapter in Handbook of Business Valuation. Thomas L. West, Jeffrey D. Jones, Eds. John Wiley & Sons, Inc. (1st edition 1992, 2nd edition 1998).

Health Care Industry and Medical Practice Valuation. Course textbook for the AICPA’s Advanced Business Valuation course (BVA-HC), originally co-authored with Les Barenbaum and Bonnie O’Rourke (1997, updated 1998).

APPENDIX A




BOOKS AND CHAPTERS PUBLISHED (continued)

“Chronology of Key Healthcare Milestones,” and [several valuation diagrams] in Integrated Community Healthcare: Next Generation Strategies for Developing Provider Networks. Christopher J. Evans, CHE, et al. HFMA (1997) p. 67, 70-71, 89, 93, 132.

ARTICLES PUBLISHED

“The Application of Financial Benchmarking and Ratio Analysis to Healthcare Valuation” Business Appraisal Practice, Winter, 2004-2005.

“Financial Benchmarking in the Health Care Industry, CPA Leadership Report. November 2004 (part II).

“Financial Benchmarking and Ratio Analysis in the Health Care Industry,” CPA Leadership Report. October 2004 (part I).

“Improving Health Care: A Dose of Competition, An Analysis of the FTC/DOJ Report,” Today’s Surgicenter (October 2004) (http://www.surgicenteronline.com/articles/4a1capitol.html?wts=20040922085412&hc=19&req=ci...) accessed August 22, 2004.

“The Application of Financial Benchmarking and Ratio Analysis to Medical Practice Assessment and Valuation” article in Medical Management Advisor Vol. 4, no. 8 (August 2004) p. 1-16

“Improving Health Care: A Dose of Competition, An Analysis of the FTC/DOJ Report,” article in AAASC Update (Aug. 12, 2004) (http://www.aaasc.org/documents/ImpactonASCsCimasiarticle804_001.doc) accessed August 25, 2004.

“Healthcare Valuation Research Sources,” article in CPA Expert. (Summer 2004) p. 4-7. “Valuation References on Healthcare Service Organizations,” article in CPA Expert. (Summer

2004) p 7-9. “Battling CON in the ‘Show-Me’ State: Missouri’s Certificate of Need Laws and Ambulatory

Surgery Centers,” article in American Association of Ambulatory Surgery Centers’ Monitor. (2003) [http://www.aaasc.org/features/monitor2003/BattlingCON_Missouri.html].

“The Effect of the Changing U.S. Economy on Healthcare Valuation,” article in The Journal of Business Valuation: Proceedings of the Fifth Joint Business Valuation Conference of the Canadian Institute of Chartered Business Valuators and the American Society of Appraisers. Orlando, FL: Canadian Institute of Chartered Business Valuators (2003) p. 349-390.

“The Pitfalls of Using Historic Merger & Acquisition Data When Valuing Medical Practices,” article in Business Appraisal Practice. (Spring/Summer 2001) p. 4-21.

“No Duplication with Women’s Hospital,” article in St. Louis Business Journal. (June 19-25, 2000) p. 87.

“Valuating Your Medical Practice: The Importance of a Third Party Valuation When Selling a Medical Practice,” with Larry G. Denissen, CBC, SBA, PBC. Article in Carolina Healthcare Business. (March/April 2000) p. 19, 23.

“Current Ambulatory Surgery Center Trends,” article in The Certified Business Counselor. (March/April 2000) p. 5-7

“The Realities of Rising Healthcare Costs,” article in The Certified Business Counselor. (September/October 1999).

“Duped by Cries of Duplication,” article in Green Bay Press-Gazette. (March 14, 1999) p. A-15.

APPENDIX A




ARTICLES PUBLISHED (continued)

“The Realities of Rising Healthcare Costs,” article in Green Bay Press-Gazette. (January 19, 1999).

“A Rationale for Due Diligence for the Business Intermediary,” article in IBBA News. International Business Brokers Association (Fall 1998) p. 10.

“Medical Practice M&A,” article in IBBA News. International Business Brokers Association (Spring 1998) p. 9-10.

“Pursuing the New Paradigm: Consulting Services for Physician Integration,” article in The Certified Business Counselor. (January/February 1997) p. 2, 6-7.

“A ‘New Paradigm’ in Healthcare,” article in Shannon Pratt’s Business Valuation Update. Vol. 2, no. 10 (October 1996).

“Planning for Successful Practice Integration,” article in The Physician Recruiter. (December 1995) p. 24-26, 47.

“A Valuation Case Study of a Diabetes Clinic,” article in Your Healthy Practice. Vol. 9, no. 1 (Winter 1996) p. 1, 6.

“Trends & Developments in the Valuation of Health Care Entities,” article in The Journal of Business Valuation: Proceedings of the Third Joint Business Valuation Conference of the Canadian Institute of Chartered Business Valuators and the American Society of Appraisers. Toronto: Canadian Institute of Chartered Business Valuators (1995) p. 119-148.

“SBA funding vital,” Letter to the Editor published in the St. Louis Business Journal. (May 17-23, 1993) p. 55.

QUOTATIONS AND CITATIONS

Today’s SurgiCenter. “Improving Your ASC’s Operational Bottom Line.” Mar. 2, 2005. Physicians Practice. “Be Your Own Landlord? How to Decide Whether to Own Your Space.” Feb.

2005. Workforce Insights. “In Bush’s Encore, Employers Can Expect Friendly Courts, Help With

Benefits Costs” Veritude (veritude.com/ResourceCenter/PrintFriendly.aspx?id=1132 accessed 1/29/05).

Modern Healthcare. “The Surge to Merge” 2005 Mergers and Acquisitions Report, Jan. 24, 2005, p. 20, (www.modernhealthcare.com/printwindow.cms?articleId=34891&pageType=article).

Shannon Pratt’s Business Valuation Update. “IBA Conference Heats Up Las Vegas” Sept. 2004, p. 13.

St. Louis Business Journal. “Sisters of Mercy Launches $226 Million Technology Upgrade.” Aug. 20, 2004 (http://stlouis.bizjournals.com/stlouis/stories/2004/08/23/story3.html).

St. Louis Business Journal. “BJC Fights UnitedHealthcare Over Coverage.” Aug. 20, 2004 (http://stlouis.bizjournals.com/stlouis/stories/2004/08/23/story1.html).

St. Louis Business Journal. “Merit Tells Tenet No Deal on Forest Park Hospital.” July 2-8 2004. Health Leaders. “Sharing Bad Financial News Cards on the Table.” Jun. 2004.

http://www.healthleaders.com/survival/article/54854/print accessed on June 19, 2004. Health Leaders. “The Flu Bug.” May 2004. p. 14-15.

http://www.healthleaders.com/magazine/feature1.php?contentid=54546&categoryid=153 Health Leaders. “A New Course.” April 2004. p. 15.

http://www.healthleaders.com/magazine/feature1.php?contentid=53816

APPENDIX A




QUOTATIONS AND CITATIONS (continued)

Physicians Practice.com. “To Lease or Buy: Planning Your Approach to Capital Investments,” (http://www.physicianspractice.com/index.cfm?method=parent&submethod=details&article_id=487&r=p). accessed March 13, 2004.

Dermatology Business Management. “Is a Specialty Practice Right for You?” March 2004. p. 7-16.

The Detroit News. “Tribe’s MRI Plan Stirs Dispute,” February 26, 2004. (http://www.detnews.com/2004/business/0402/26/b01-75019.htm).

Baltimore Business Journal. “Certificate of Greed?,” February 23, 2004. (http://baltimore.bizjournals.com/baltimore/stories/2004/02/23/focus1.html).

HealthPlan. “Getting Physical Yields More Benefits: HealthPartners Study Links Moderate Increase in Exercise to Reduced Health Care Costs,” January/February 2004. p. 32-35.

Denver Business Journal. “Specialty Hospitals Drawing Attention from State Lawmakers,” January 19, 2004. (http://denver.bizjournals.com/denver/stories/2004/01/19/story5.html).

The Business of Medicine. “Quick Tips,” Winter 2003. p. 2. Today’s Surgicenter. “The Medicare Bill Aftermath: Surgical Hospitals Pick Up the Pieces and

Plan Their Strategy,” Volume 3, issue 1 (January 2004) p. 21-28. (http://www.surgicenteronline.com/articles/411feat1.html).

St. Louis Business Journal. “St. Paul, Travelers Merger Could Bring Premium Rise,” November 21-27, 2003. (http://www.bizjournals.com/stlouis/stories/2003/11/24/story5.html).

Health Leaders. “Backing Away,” November 2003, p. 30-34. (http://www.healthleaders.com/magazine/print.php?contentid=49973).

Health Leaders. “A Heavy Toll,” August 20, 2003. p. 36-39. (http://www.healthleaders.com/magazine/print.php?contentid=47290).

Health Leaders. “Late to the Party?” August 20, 2003. p. 72-73. (http://www.healthleaders.com/magazine/print.php?contentid=47260).

St. Louis Business Journal. “Wunderlich-Led Group Forms Healthcare Advisory Firm,” July 4-10, 2003, p. 6.

Health Leaders. “Balance Sheet Shuffle,” July 7, 2003 (www.healthleaders.com/magazine/print.php?contentid=46552).

U.S. 1. “Life in the Fast Lane,” June 11, 2003 (161.58.97.168/200306/30611f01.html). American Medical News. “Ripe for Refinancing: It’s not just for Mortgages Anymore,” June 29,

2003 (http://www.ama-assn.org/sci-pubs/amnews/pick_03/bisa0602.htm). University of Utah. “Practice Valuation: A Tough Job to Tackle Alone,” June 10, 2003

(http://www.med.utah.edu/physref/ppd/finance/fin5.html). (also found on www.shands.org/professional/ppd/practice/finance/valuation.asp), accessed June 10, 2003.

Kansas City Star. “St. Luke’s Proposal Tests Missouri’s Certificate-of-Need Law,” (kansascity.com/mld/Kansascity/business/589269.html) accessed on May 20, 2003.

American Association for Homecare-Leadership Conference, St. Petersburg, FL “From Spreadsheet to Wall Street: A Panel Discussion on the Theory and Reality,” accessed on April 24, 2003.

Outpatient Care Technology. “Certificates-of-Need,” February/March 2003, (www.opctonline.net), accessed July 30, 2003.

Birmingham Business Journal. “Playing State’s CON Game,” December 23, 2002 (http://www.bizjournals.com/birmingham/stories/2002/12/23/story1.html?t=printable).

Portsmouth Herald. “Health Experts: Consumers Biggest Losers in Hospital Wars,” (December 9, 2002) (www.seacoastonline.com/2002news/12092002/maine/2289.html), accessed May 5, 2003.

APPENDIX A





Foster’s Sunday Citizen. “Hospitals’ Motives Questioned in Quest for New Cancer Care Center,” (www4.fosters.com/news2002/dec_02/dec08_02/news/do1208b.asp), accessed December 10, 2002.

Portsmouth Herald. “Health Experts: Consumers Biggest Losers in Hospital Wars,” (www.seacoastonline.com/2002news/12092002/maine/2289.html), accessed May 5, 2003.

Physicians Financial News. “Succession Plans Preserve Value of Practice” November 15, 2002. Monster.com. “Health Insurance Costs to Jump in 2003: Find Out What this Means for Benefit

Plans,” (content.salary.monster.com/articles/benefits/healthcost2003/), accessed November 14, 2002.

Monster.com. “Get Savvy About Sectors,” (internet.monster.com/articles/inflection/), accessed November 14, 2002.

Monster.com. “Medical Information Regulations Create More Jobs,” (technology.aol.monster.com/articles/hipaa/), accessed October 3, 2002.

St. Louis Business Journal. "Committee Reviews Changes for Oversight of Hospitals,” Vol. 22, no. 3 (September 28-October 4, 2001) p. 30-31. (http://www.bizjournals.com/stlouis/stories/2001/10/01/focus3.html).

HS People.com. “Making the Most of E-Recruitment,” (http://www.hspeople.com/archives/newsbriefs/072902.asp), July 29,2002

RegAlert. “Missouri – Orders of Rulemaking – Department of Health and Senior Services – 19 CSR 60-50,” (May 1, 2002).

The American Academy of Orthopedic Surgeons Bulletin. “Practices Use Hybrid Systems to Split Income: Distribution Plan Promotes Vitality, Growth, Unity and Specialization,” Vol. 49, no. 2 (April 2001).

Monster.com. “Healthcare Consulting: Play the Niches,” (content.talentmarket.com/contractor/freeagentguide/managingyourbusiness/aliveandwell/) accessed January 17, 2001.

Monster.com. “Healthcare Keeps on Booming,” (healthcare.monster.com/articles/joboverview/), accessed January 12, 2001. (also found on www.hspeople.com/archives/Newsbriefs/072902.asp), accessed July 29, 2002.

Physician’s Practice Digest. “Dollars and Sense: The Keys to Performing a Medical Practice Valuation,” Vol. 11, no. 1 (January/February 2001), p. 39-40.

Physicians Practice, Inc. – Syndicated Content Package. “Valuation: One Job Not to Tackle Alone,” [Available as of 3/19/01 through MedChi: (www.medchi.org/Pearls/value.htm)].

The American Academy of Orthopedic Surgeons Bulletin. “Doctors Eye MBA to Compete, Some Say Business Degree is Worthwhile; Others Disagree,” Vol. 48, no. 6 (December 2000).

Econtent. “Business Connection: Industry Information from Consulting Firms,” (August 2000). The American Academy of Orthopedic Surgeons Bulletin. “Sell Your Practice for Premium

Price,” Vol. 48, no. 3 (June 2000). WebMD. “Another St. Louis-Area Hospital to Close: Experts Cite Industry-Wide Financial

Pressures,” Health St. Louis (stlouis.webmd.com) accessed on April 26, 2000. Appraisal Journal. “A Guide to Consulting Services for Emerging Healthcare Organizations”

[book review] Vol. 68, issue 2 (April 1, 2000). St. Louis Business Journal. "Premier Care Boots Up to Help Doctors Do Billing,” (August 9-15,

1999) p. 12. The American Academy of Orthopedic Surgeons Bulletin. “Selling a Practice,” Vol. 47, no. 2

(April 1999).

APPENDIX A





Between Rounds. “Planning for Managed Care Retirement,” (February/March 1999) p. 9-10, 12-13.

Milwaukee Journal Sentinel. “Doctors Group Loses ER Contract,” (March 11, 1999), p. 1D, 3D. The Green Bay News Chronicle. “Emergency Physicians Booted from Hospitals,” (March 4,

1999). Green Bay Press-Gazette. “Doctors, Hospitals Square Off,” (March 4, 1999). Green Bay Press-Gazette. “Competition in Health-Care Field Heating Up,” (March 3, 1999). Green Bay Press-Gazette. “Managed Health Care About to Get Checkup,” (January 19, 1999). Green Bay Press-Gazette. “Competition Can Lead to Duplication,” (January 18, 1999). Physician’s Managed Care Success Manual: Strategic Options, Alliances, and Contracting Issues.

Scott Becker, JD, CPA. Mosby (1999) p. 52. Modern Healthcare. “Changing Partners,” Vol. 28, no. 49 (December 7, 1998), p. 28. Green Bay Press-Gazette. “Fourth Hospital in the Works for Green Bay?” (November 18, 1998). Green Bay Press-Gazette. “BayCare Expanding Services,” (November 16, 1998). Green Bay Press-Gazette. “BayCare Health System Faces Desertions,” (November 16, 1998). Green Bay Press-Gazette. “Health System Faces Desertions,” (November 16, 1998). Green Bay Press-Gazette. “BayCare, Aurora Plan Health Care Partnership,” (November 9,

1998). Shannon Pratt’s Business Valuation Update. “Acquisitions/Physicians Practices, Valuations &

Consulting Services,” Vol. 4, no 11, p. 7 (November 1998). Green Bay Press-Gazette. “Health Care Groups Change with Time,” (June 30, 1998). Green Bay Press-Gazette. “Planned Clinic Sparks Debate,” (June 30, 1998). Green Bay Press-Gazette. “Managed Health Care May Lead to Duplication,” (June 30, 1998). Green Bay Press-Gazette. “Surgical Center Opposed Two Local Hospitals,” (June 30, 1998). Green Bay Press-Gazette. “Expansion Projects Aim to Improve Patient Care,” (March 28, 1998). Integrated Community Healthcare: Next Generation Strategies for Developing Provider Networks.

Christopher J. Evans, CHE et al. (The HFMA Healthcare Financial Management Series.) Healthcare Financial Managers Association (HFMA), (1997) p. 66-67, 70-71, 89, 92-93, 131-132.

Milwaukee Journal Sentinel. “Green Bay Physicians to Build,” (July 12, 1997). Medical Economics. “Physician Practice-Management Company Buyouts: Is Taking the Leap

Worth the Risk?” Vol. 74, no. 9 (April 28, 1997) p. 106+. Modern Healthcare. “Fixing Management Service Organizations,” Vol. 27, no. 8 (February 24,

1997) p. 49. Medical Economics. “Do You Need a Broker to Help Sell Your Practice?” Vol. 73, no. 18

(September 23, 1996) p.124+. Medical Economics. “Your Broker May Represent Both Sides of the Deal,” Vol. 73, no. 18

(September 23, 1996) p. 130. American Medical News. “Caveat Vendor (Sellers Beware!),” Vol. 39, No. 24 (June 24, 1996) p.

13-16. Developing & Managing Physician Networks. “Negotiating a Compensation Package When

Selling a Physician Practice,” Vol. 1, no. 6 (March 1996) p. 1+. Medical Economics, “Getting the Best Deal When You Sell Your Practice/Do Stark Rules Inhibit

Sales to Hospitals?” Vol. 73, no. 2 (January 29, 1996) p. 32+. Jenks Healthcare Business Report. “Healthcare Leaders are Positive on 1996 Outlook; More

Consolidation is Expected,” Vol. 6, no. 6 (December 24, 1995) p. 1+.

APPENDIX A





Medical Economics. “Should You Merge or Sell--or Do Nothing?” Vol. 72, no. 23 (December 11, 1995) p. 176+.

Exempt Organization: Technical Instruction Program for FY 1996. “Valuation of Medical Practices,” Charles F. Kaiser and Amy Henchey. Department of the Treasury, Internal Revenue Service (Training 4277-048 (7-95) TPDS 84699Z) p. 419-420.

American Medical News. “Leave Yourself an Out,” Vol. 38, no. 26 (July 17, 1995) p. 12+. Certified Business Counselor. “Capital Formation for Small Business: Impact of SBA Lending

U.S. Senate Small Business Committee Field Hearing, Senator Kit Bond,” (May/June 1995). American Medical News. “The Urge to Merge,” Vol. 38, no. 14 (April 10, 1995) p. 1+. American Medical News. “Growing the Value of Your Practice,” Vol.37, # 24 (June 27, 1994)

p.25+. Medical Staff Briefing. “What Happens to Physicians When Hospitals Merge, Consolidate, and

Acquire?” Vol. 4, no. 2 (February 1994) p. 1+. New York State Medical News. “Viewpoints,” Vol. 5, no. 8 (January 1992) p. 10. New York State Medical News. “Viewpoints,” Vol. 5, no. 1 (June 1991) p. 8. Physicians Financial News. “Looking To Grow? Doctor's Squeezed by Credit Crunch,” Vol. 9,

no.12 (June 30, 1991) p. 1+. LEGISLATIVE & AGENCY TESTIMONY

“Testimony on Proposed Bill (H.B. 271)” Hospital Ownership of Health Plans - House Health Care Policy Committee, Jefferson City, MO, (March 30, 2005).

“Testimony on Proposed Bill (H.B. 585)” Certificate of Need (CON) - House Health Care Policy Committee, Jefferson City, MO, (March 30, 2005).

“Testimony on Proposed Bill (H.B. 432)” Certificate of Need (CON) - House Health Care Policy Committee, Jefferson City, MO, (March 12, 2003).

“Testimony on Proposed Bill (S.B. 449)” Certificate of Need (CON) - Committee on Pensions and General Laws, Jefferson City, MO, (March 11, 2003).

“Missouri Health Facilities Review Committee (MHFRC) Proposed Rule Changes Testimony,” Certificate of Need (CON) - Missouri Joint Committee on Administrative Rules (JCAR). Jefferson City, MO, (March 20, 2002).

“Testimony on Proposed Bill (S.B. 1087)” Certificate of Need (CON) - Committee on Pensions and General Laws, Jefferson City, MO, (February 20, 2002).

“Testimony on Proposed Rule Changes,” Certificate of Need (CON) - Missouri Health Facilities Review Committee (MHFRC), Jefferson City, MO, (February 15, 2002).

“Entrepreneurship in America: Focus on Capital Formation,” Committee on Small Business Field Hearing, United States Senate, 104th Congress, 1st session. (April 12, 1995).

PROFESSIONAL COURSES TAUGHT

“An Exciting Insight Into the Health Care Industry & Medical Practice Valuation,” AICPA Course (#HCIV), sponsored by the Ohio Society of CPAs. Hudson, OH (September 13, 2002).

APPENDIX A




PROFESSIONAL COURSES TAUGHT (continued)

“Managed Care: Complete Guide to Mastering the Critical Health Care Issues,” AICPA Course (#MCI), sponsored by the Indiana CPA Society. Indianapolis, IN (September 9, 2002).

“Health Care Consulting: New Practice Opportunities,” AICPA Course (#HCC), sponsored by the Indiana CPA Society. Indianapolis, IN (October 8, 2001).

“The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment,” The Institute of Business Appraisers—Educational Course #1011, St. Louis, MO (September 10, 2001).

“Health Care Industry & Medical Practice Valuation,” AICPA Advanced Business Valuation Course BVA-HC, sponsored by the Virginia Society of CPAs. Centerville, VA (September 25, 2000).

“The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment,” The Institute of Business Appraisers—Educational Course #1011. Indianapolis, IN (July 17, 2000).

“Health Care Industry & Medical Practice Valuation,” AICPA Advanced Business Valuation Course BVA-HC, sponsored by Texas Society of CPAs. Dallas, TX (July 12, 2000).

“The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment,” Institute of Business Appraisers—Educational Course #1011. Cincinnati, OH (November 15, 1999).

“The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment,” Institute of Business Appraisers—Educational Course #1011. Kansas City, MO (October 18, 1999).

“Health Care Industry & Medical Practice Valuation,” sponsored by Missouri Society of CPAs. St. Louis, MO (September 30, 1997).

“Health Care Industry & Medical Practice Valuation,” sponsored by Georgia Society of CPAs. Atlanta, GA (September 29, 1997).

“Health Care Industry & Medical Practice Valuation,” sponsored by Tennessee Society of CPAs. Brentwood, TN (September 15, 1997).

“Practice Abuse Seminar,” Erie County Medical Society. Buffalo, NY (September 29, 1993). ACADEMIC TEACHING ASSIGNMENTS

“Financial Benchmarking: Research and Application to the Healthcare Industry,” Guest Instructor-Health Administration Program, Washington University School of Medicine, St. Louis, MO, Master of Health Administration (MHA) Program, Stuart Boxerman, D.Sc., Program Director. (January 27, 2005).

“The Surgical Hospital: Threat or Non-Threat to the Local Hospital,” Guest Instructor-Health Administration Program, Washington University School of Medicine, St. Louis, MO, Master of Health Administration (MHA) Program, Stuart Boxerman, D.Sc., Program Director. (February 5, 2004).

“Practice Valuation: Issues for New Optometry Graduates,” Practice Management IV Seminar, sponsored by University of Missouri—St. Louis. St. Louis, MO (October 21, 1998).

“Practice Valuation: Issues for New Optometry Graduates,” Practice Management IV Seminar, Sponsored by University of Missouri - St. Louis, St. Louis, MO (October 23, 1997).

APPENDIX A




ACADEMIC TEACHING ASSIGNMENTS (continued)

“Valuation of Health Care Professional Practices in a Changing Reimbursement & Regulatory Environment,” Guest Instructor-Health Care Finance course (HA-667), Washington University School of Medicine St. Louis, MO, Master of Health Administration (MHA) Program, Robert S. Woodward, PhD, professor. (April 15, 1996).

“Valuation of Health Care Professional Practices in a Changing Reimbursement & Regulatory Environment,” guest instructor Health Care Finance course (HA-667), Washington University School of Medicine’s Master of Health Administration (MHA) Program, Robert S. Woodward, PhD, professor. St. Louis, MO (April 5, 1995).

“Practice Choice,” Medical Society of the State of New York (MSSNY) State University of New York, Health Science Center at Syracuse, University Hospital. (March 11, 1992).

“Negotiating Associateship Arrangements, & Practice Buy-ins,” Winthrop University Medical School. Mineola, NY.

LECTURES AND PRESENTATIONS

“Buy vs. Lease Decisions” Building Owners and Managers Association International, The North American Commercial Real Estate Congress and The Office Building Show. Anaheim, CA (June 25, 2005).

“BenchMarking Using the Association’s Statistics” National Association of Healthcare Consultants, HealthCon 2005. Baltimore, MD (June 16, 2005).

“The Valuation of Ambulatory Surgery Centers and Outpatient Health Entities” The National Association of Certified Valuation Analysts, 12th Annual Valuation Conference. Philadelphia, PA (June 2, 2005).

“Valuation of Medical Practices in a Changing Regulatory and Reimbursement Environment,” Accountants Global Network, AGN North America Regional Meeting. St. Louis, MO (May 18, 2005).

“The Attack on Niche Providers” The American Association of Ambulatory Surgery Centers, 27th Annual Meeting. Reno, NV (March 11, 2005).

“The Valuation of Ambulatory Surgery Centers” The American Association of Ambulatory Surgery Centers, 27th Annual Meeting. Reno, NV (March 9, 2005).

“Making the Case For / Against Specialty Hospitals” [Moderator] National Managed Health Care Congress, 17th Annual Conference. Washington D.C. (March 8, 2005).

“Valuation of Healthcare Enterprises in a Dynamic Market Economy” Business Valuation Resources – Audio Conference. (December 2, 2004).

“Healthcare M&A Issues,” International Business Brokers Association (IBBA) – Conference for Professional Development. Fort Worth, TX. (November 12, 2004).

"The Specialty Hospital Moratorium: The Impact on Physician Ownership of Specialty Surgical Hospitals” Healthcare Financial Management Association (HFMA) – Fall Conference. Kansas City MO (September 16, 2004).

“The Valuation of Healthcare Entities in a Changing Reimbursement and Regulatory Environment,” American Academy of Matrimonial Lawyers, Ohio Chapter – 2004 Lake Las Vegas Conference. Lake Las Vegas, NV (June 25, 2004).

“The Don’ts and Don’ts of Healthcare Valuation: The Valuation of Healthcare Entities in a Changing Reimbursement and Regulatory Environment,” Institute of Business Appraisers (IBA) – 2004 Annual Business Valuation Conference. Las Vegas, NV (June 9, 2004).

APPENDIX A




LECTURES AND PRESENTATIONS (continued)

“The Surgical Hospital: Threat or Non-Threat to the Local Hospital,” Academy Health – 2004 Annual Research Meeting. San Diego, CA (June 6, 2004) [Poster].

“The Surgical Hospital: Threat or Non-Threat to the Local Hospital,” American Surgical Hospital Association – Third Annual Conference and Exhibits. San Diego, CA (November 22, 2003).

“The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment: A Critical Update” Accountants Global Network – North American BV Sharegroup Webconference (November 13, 2003).

“Whistling Past the Graveyard: The Value of Professional Appraisal Designations in a Changing Regulatory and Competitive Environment” American Society of Appraisers – St. Louis Chapter Membership Meeting. St. Louis, MO (April 24, 2003).

“From Spreadsheet to Wall Street: A Panel Discussion on the Theory and Reality of Building Value in Homecare” American Association for Homecare – Leadership Conference. St. Petersburg, FL (February 26, 2003).

“But for the Purported Wrongful Act: the Analysis & Valuation of Healthcare Commercial Damages in a Changing Reimbursement & Regulatory Environment” Eastern Economic Association (session sponsored by the National Association of Forensic Economists) – Eastern Economic Association Annual Conference 2003. New York, NY (February 22, 2003)

“Healthcare Mergers & Acquisitions: Recent Developments & Issues” International Business Brokers Association, Inc. – 36th Conference & Educational Program. Los Angeles, CA (November 16, 2002).

“The Effect of the Changing U.S. Economy on Healthcare Valuation” Missouri Society of Certified Public Accountants—2002 Healthcare Forum. St. Louis, MO (November 13, 2002).

“Duped by Cries of Duplication – The Failure of Certificate of Need (CON) Laws” Missouri Society of Certified Public Accountants – 2002 Healthcare Forum. St. Louis, MO (November 13, 2002).

“The Effect of the Changing U.S. Economy on Healthcare Valuation” American Society of Appraisers/Canadian Institute of Chartered Business Valuator – 5th Joint Advanced Business Valuation Conference. Orlando, FL (October 25, 2002).

“Duped By Cries Of Duplication: The Failure of Certificate of Need Regulation” Academy for Health Services Research and Health Policy – 2002 Annual Research Meeting. Washington, DC (June 23, 2002) [Poster].

“The Effect of the Changing U.S. Economy on Healthcare Valuation: An Examination of the Impact of Recent Events” National Association of Certified Valuation Analysts – 9thAnnual Business Valuation Conference. San Diego, CA (May 23, 2002).

“The Effect of the Changing U.S. Economy on Healthcare Valuation: An Examination of the Impact of Recent Events” Institute of Business Appraisers – 2002 IBA Conference. Washington D.C. (May 5, 2002).

“Valuation of Healthcare Intangible Assets,” Missouri Society of CPAs (MSCPA) – 2001 Healthcare Conference. Columbia, MO (November 13, 2001).

"Valuation of Healthcare Intangible Assets: The Definition, Classification, and Determination of Intangible Assets in Healthcare Service Sector Entities,” Internal Revenue Service – Large and Midsize Business & Engineering, Continuing Professional Education, St. Louis, MO (August 8, 2001).

"Valuation of Healthcare Intangible Assets: The Definition, Classification, and Determination of Intangible Assets in Healthcare Service Sector Entities,” New York State Society of CPAs – Business Valuation Conference, New York, NY (June 18, 2001).

APPENDIX A





“Valuation of Healthcare Assets: the Definition, Classification, and Determination of Intangible Assets in Healthcare Service Sector Entities,” Institute of Business Appraisers – 2001 National Conference. Orlando, FL (May 10, 2001).

“Lessons from Market Competition in Healthcare,” Institute of Certified Business Counselors – 2000 Annual Meeting. Tempe, AZ (September 22, 2000).

Lessons from Market Competition in Healthcare: Love Everyone, Trust No One & Paddle Your Own Canoe,” American College of Healthcare Executives – 2000 Congress on Healthcare Management. Chicago, IL (March 29, 2000).

“Developments in the Valuation of Healthcare Service Businesses,” Business Valuation Association of Chicago. Chicago, IL (March 23, 2000).

“The Valuation of Healthcare Entities in a Changing Regulatory and Reimbursement Environment,” American Society of Appraisers – 18th Annual Advanced Business Valuation Conference. New Orleans, LA (October 29, 1999).

“Love Everyone, Trust No One, & Paddle Your Own Canoe,” Institute of Certified Business Counselors – Annual Meeting. Portland, OR (October 1, 1999).

"Healthcare Business and Industry Research and Its Application: The Internet and Other Sources,” CPA Associates International—Medical Professionals Seminar. Denver, CO (August 17, 1999).

“Going Ambulatory: Development of a Plan,” Ambulatory Surgery Centers – Keys to Business Success, FMR Communications, Ross & Hardies. Chicago, IL (October 13, 1998).

“PPMC Acquisitions of Physician Practices: Valuation and Consulting Issues,” Institute of Certified Business Counselors Annual Meeting. Tempe, AZ (September 18, 1998).

“PPMC Acquisitions of Physician Practices: Valuation and Consulting Issues,” CPA Associates International, Medical Professionals Seminar. Atlanta, GA (August 17, 1998).

“The Valuation of Healthcare Entities,” St. Louis Business Valuation Round Table, St. Louis, MO (1998).

“Focus Group I: Valuation of Medical Practices,” Institute of Business Appraisers 1998 National Conference: The Future of Business Valuation. San Antonio, TX (1998).

“Developing Successful Management Services Organizations,” Hospital and Health Systems: Strategic Options and Practical Guidance, sponsored by FMR Communications. Chicago, IL (November 4, 1997).

“Anatomy of an MSO Gone Wrong—Stabilizing and Restructuring MSOs,” Advanced Financial and Operational Strategies for Management Services Organizations & Physician Practice Management Companies, sponsored by IBC USA Conferences. Chicago, IL (October 31, 1997).

“Historical Review,” 2nd Annual PRN Leadership Retreat—Physician Resource Network. Elkhart Lake, WI (February 14-15, 1998).

“Implementation Phase – Report on Group Services, Human Resources—Central Business Office,” 2nd Annual PRN Leadership Retreat—Physician Resource Network. Elkhart Lake, WI (February 14-15, 1998).

“Managed Care Contracting,” 2nd Annual PRN Leadership Retreat—Physician Resource Network. Elkhart Lake, WI (February 14-15, 1998).

“Financial Report and Budget / Proforma,” 2nd Annual PRN Leadership Retreat—Physician Resource Network. Elkhart Lake, WI (February 14-15, 1998).

“Introduction to Strategic Plan, Part I,” and “Strategic Plan, Part II,” 2nd Annual PRN Leadership Retreat—Physician Resource Network. Elkhart Lake, WI (February 14-15, 1998).

“Valuations of Medical Practices,” 1997 Medical Professional Seminar, sponsored by CPA Associates International, Inc. Baltimore, MD (August 18-19, 1997).

APPENDIX A





“Valuation of Physician Practices: A Workshop for Physicians and Practice Management Companies,” Practice Management Financing Partnership, sponsored by Global Business Research, Ltd. Philadelphia, PA (July 23, 1997).

“Anatomy of an MSO Gone Wrong,” American College of Healthcare Executives Congress on Healthcare Management. Chicago, IL (March 4, 1997).

“Valuing a Medical Practice from a Physician’s Perspective,” National Litigation Support Services Association Educational and Networking Conference. Tempe, AZ (January 23, 1997).

“How to be an Effective Board Member/Chairperson,” PRN Board of Managers Chairperson Retreat. Kohler, WI (January 18-19, 1997).

“Research/Data Sources & Capital Requirements for Radiology Network Development,” The Radiology Business Management Association Midwest Conference. Minneapolis, MN (October 20-22, 1996).

“Valuation of Health Care Entities - An Update,” paper presented at the Pittsburgh Chapter of the American Society of Appraisers, Business Valuation Seminar. Pittsburgh, PA.

“Valuation of Health Care Entities, in a Changing Regulatory and Reimbursement Environment,” Clifton Gunderson LLC, Valuation and Litigation Services Conference. Itasca, IL.

“Value Drivers in Healthcare. Acquisitions by Practice Management Companies (PMCs) and Hospital Companies in the Public Market,” American Institute of Certified Public Accountants. New Orleans, LA (December 4-5, 1996).

"Medical Practice Valuation, Operation and Sales,” IBC 21st Annual Meeting and Seminar (September 20, 1996).

“Did Marcus Welby Worry About Profitability?” LAWCO Healthcare Conference ’96. Rochester, MN (June 10-11, 1996).

“Hospital –Physician Affiliation//Integration//Acquisition: Developing a Plan and Agenda,” LAWCO Healthcare Conference ’96. Rochester, MN (June 10-11, 1996).

“The Anatomy of a Practice: Conducting a Management Assessment and Operational Review,” LAWCO Healthcare Conference ’96. Rochester, MN (June 10-11, 1996).

“Valuation of Health Care Entities in a Changing Regulatory and Reimbursement Environment,” North Carolina Association of Certified Public Accountants 1996 Health Care Industry Conference. Greensboro, NC (July 27-28, 1996).

“Valuation of Health Care Entities—An Update,” American Society of Appraisers International Appraisal Conference. Toronto, Ontario (June 17, 1996).

“Valuing New Healthcare Entities: IPA, MSO & IDS,” ISCPA Business Valuation Symposium. Chicago, IL (May 31, 1996).

“Survival Tactics for the Entrepreneurial Physician,” OrNda Physician Network. Coral Gables, FL (April 10, 1996).

“Practice Valuation Issues: What Healthcare Executives Must Know,” American College of Healthcare Executives. Chicago, IL (March 10-14, 1996).

“Valuation of Physician Practices in a Changing Reimbursement and Regulatory Environment,” Global Business Research. Miami, FL (January 24-26, 1996).

“Valuation of a Medical Practice,” National CPA Healthcare, Advisors Association. Las Vegas, NV (January 11-12, 1996).

“Introduction and Brief Overview of Current Developments in the Health Care Fields” Developing a Hospital/Physician Integration/Affiliation Practice Acquisition Program. Health Capital Consultants (HCC). Marriott New York Marquis, New York, NY (January 9, 1996).

“Identifying and Evaluating Potential Acquisitions and Affiliation Targets,” Developing a Hospital/Physician Integration/Affiliation Practice Acquisition Program. Health Capital Consultants (HCC). Marriott New York Marquis, New York, NY (January 9, 1996).

APPENDIX A





”Marketing/Packaging Acquisitions and Affiliation Opportunities to Prospects” Developing a Hospital/Physician Integration/Affiliation Practice Acquisition Program. Health Capital Consultants (HCC). Marriott New York Marquis, New York, NY (January 9, 1996).

“Compensation Plans,” Developing a Hospital/Physician Integration/Affiliation Practice Acquisition Program. Health Capital Consultants (HCC). Marriott New York Marquis, New York, NY (January 9, 1996).

“Misuse of Business Valuation Methodology Critical Solutions—Litigation Issues,” 1996 Conference. Northbrook, IL (January 15, 1996).

“Yes, We Have No Bananas: The Shocking Truth About the Market Approach,” Practice Valuation Study Group (PVSG). Charleston, SC (November 4, 1995).

“Issues in Valuing Health Care Professional Practices,” Ohio Chapter of the American Academy of Matrimonial Lawyers. Columbus, OH (October 9, 1995).

“Issues in Valuing Health Care Professional Practices in a Changing Reimbursement & Regulatory Environment,” Business Valuation Association. Chicago, IL (September 28, 1995).

“Valuation of Physician Practices in a Changing Reimbursement & Regulatory Environment,” Acquiring and Integrating Physician Practices, sponsored by Global Business Research. Chicago, IL (September 13-14, 1995).

“Risky Business: The Valuation of Healthcare Entities in a Changing Industry,” AICPA 1995 National Conference on Divorce. Las Vegas, NV (June 14-16. 1995).

“Valuing Health Care Professional Practices in a Changing Reimbursement & Regulatory Environment,” Illinois Society of CPAs. Chicago, IL (May 11, 1995).

“Trends and Developments in the Valuation of Health Care Professional Practices in a Changing Reimbursement & Regulatory Environment,” International Group of Accounting Firms (IGAF). Chicago, IL (May 9, 1995).

“Issues in Valuing Health Care Professional Practices in a Changing Reimbursement & Regulatory Environment,” American Society of Appraisers, St. Louis Chapter. St. Louis, MO (March 15, 1995).

“The Emperor Has No Clothes—The Decline and Fall of the Excess Earnings Approach,” Practice Valuation Study Group (PVSG), New Orleans, LA (February 10, 1995).

“Issues in Valuing Health Care Professional Practices,” Effective Solutions Litigation Issues 1995 Conference. Northbrook, IL (January 16, 1995).

“Purchasing of Physician Practices,” National Association of Health Care Consultants (NAHCC), 1995 Joint Conference. Cincinnati, OH (1995).

“Valuation of Health Care Practices in a Changing Reimbursement Environment,” Colorado Society of CPAs, 1994 Litigation Support Conference. Denver, CO (December 8, 1994).

“Trends & Developments in the Valuation of Health Care Entities,” Joint ASA/CICBV Conference. San Diego, CA (November 4, 1994).

“Doing Business Across State Lines,” IBBA Conference. Nashville, TN (October 24, 1994). “Trends & Developments in the Valuation of Health Care Professional Practices,” National CPA

Health Care Advisors Association, 1994 Services To Health Care Professionals Training Course. San Diego, CA (July 29, 1994).

“Valuation of Healthcare Practices in a Changing Reimbursement Environment,” AICPA 1994 National Conference on Divorce. New Orleans, LA (June 7, 1994).

“Impact of Healthcare Reform on the Valuation of Healthcare Professional Practices,” Executive Enterprises, Medical Mergers and Acquisitions Seminar. Dallas, TX (February 3, 1994).

“Valuation of Health Care Practices,” New York State Society of Certified Public Accountants (NYSSCPA). Manhattan, NY (December 10, 1993).

APPENDIX A





“Legal & Regulatory Impact on the Valuation & Sale of Healthcare Practices,” Practice Valuation Study Group (PVSG). Boston, MA (October 1, 1993).

“The Impact of Healthcare Reform on the Valuation of Healthcare Professional Practices,” Nassau Chapter of New York State Society of Certified, Public Accountants (NYSSCPA) Committee. (July 20, 1993).

“Valuation of Healthcare Professional Practices,” ASA 1993 International Appraisal Conference. Seattle, WA (June 29, 1993).

“Practice Management & Marketing,” Medical Society of the State of New York (MSSNY), State University of New York, Health Science Center at Syracuse University Hospital & St. Vincent's Medical Center on Staten Island. (June 5, 1993).

“Case Study—Valuation of Medical Practices,” AICPA, 1993 National Conference on Divorce. Las Vegas, NV (June 1993).

“Planning for Retirement,” Medical Society of the State of New York Conference. Syracuse, NY (1993).

“Valuation and Sale of Medical Practices,” International Business Brokers Association (IBBA) Conference. Denver, CO (May 4, 1991).

“Business Valuation in a Changing International Environment,” Ohio Society of CPAs Health Care Conference. Columbus, OH.

.


Appendix A - Page 17 of 22


EXPERIENCE HEALTH CAPITAL CONSULTANTS, St. Louis, MO Senior Vice President

Mergers & Acquisitions; Capital Formation; Valuation; Financial Forecasting; Forensic Accounting; and, Due Diligence.

H. Perry Dahm, CPA, Oxnard, CA Independent Certified Public Account

Litigation Support in complex damages cases including: Wrongful Termination; Minority Shareholder Suits; Fraud, Malpractice; Fiduciary Responsibility; Contract Disputes; and, Buy-Sell Agreements.

Business Valuations Physician Organizations

9666 Olive Blvd., Suite 375 • St. Louis, MO 63132-3013

(314) 994-7641 • Fax (314) 991-3435 [email protected] • www.healthcapital.com

APPENDIX A

H. PERRY DAHM, CPA



EXPERIENCE (Continued) Prolific Publishing, Inc., Burbank, CA Chief Financial Officer

Capital Formation; Mergers and Acquisitions – Divestitures; and, Complex Contract Negotiations.

EDUCATION Lindenwood University, St. Louis, MO

M.S. — Valuation Sciences Candidate

Southeast Missouri State University, Cape Girardeau, MO B.S. — Business Administration

APPENDIX A




EXPERIENCE

HEALTH CAPITAL CONSULTANTS, St. Louis, MO Vice President

Performed valuation analysis, financial forecasting and operational reviews for the following entities:

• General Acute Hospitals (both for-profit and non-profit) • Specialty Hospitals (Heart and Psychiatric) • HMO (230,000 covered lives) • PPO (250,000 covered lives) • Physician Medical Practices (including orthopedic, general surgery, internal

medicine, cardiology, and other specialties) • Ambulatory Surgery Centers • Physician Organizations, e.g., IPAs, MSOs and PHOs. • Renal Dialysis Centers • Diagnostic Imaging Centers • Home Health Agencies • Infusion Therapy Providers • Hospital Billing Agencies

Developed a physician-owned multi-specialty management services organization (MSO) of 110 physicians, comprising of 14 independent medical groups; then further integrated the groups into a single multi-specialty medical clinic (single provider number).

Provided interim management for a large, multi-specialty medical group. Accomplishments included: • Management of everyday business office operations; • Preparation of financial forecasts, budgets and management reports; • Negotiated managed care contracts (including capitation, RBRVS-based and discounted fee-for-service) on the behalf of the

medical clinic and individual physician groups; • Strategic Planning; and, • Obtained consensus from the physician-owners in the development of by-laws and operating agreements.

Created several limited liability companies (both physician-owned and joint ventures with hospitals) for the purpose of acquiring ambulatory surgery centers and development of a acute care hospital. • Conducted feasibility analyses; • Obtained approximately $7 million in equity investment from individual physicians; • Developed the proformas to acquire outside debt financing.

Participated in the development of several managed care products, e.g., HMO, PPO and Point-of-Service plans. • Negotiated capitation pools and withhold payments; • Developed marketing efforts and product start-up activities.



APPENDIX A

TODD ZIGRANG



NORTHWEST HEALTH SERVICES, INC., Mound City, MO

Consultant

Developed a primary care network for a four-county provider area. Conducted extensive research into rural health issues and the impacts of healthcare reform. Assessed the needs and availability of physician manpower and primary care services to Northwest Missouri residents. Presented final product and recommendations to the NMCGP Board and University faculty.

EDUCATION

UNIVERSITY OF MISSOURI-COLUMBIA, Columbia, MO

Master of Health Administration

Master of Business Administration

Bachelor of Science - Health Administration

PROFESSIONAL AFFILIATIONS

American College of Healthcare Executives

Healthcare Financial Management Association

St. Louis Metro Healthcare Executives Group

American Society of Appraisers - Candidate PUBLISHING

“Healthcare Industry Research and its Application in Financial Consulting” chapter by Tim Alexander and Todd A. Zigrang in supplement to Financial Planning for Physicians and Healthcare Professionals 2002. David Marcinko, M.D., Ed. Aspen Publishers (2002).

PRESENTATIONS "The Specialty Hospital Moratorium: The Impact on Physician Ownership of Specialty Surgical

Hospitals” Healthcare Financial Management Association (HFMA) – Fall Conference. Kansas City MO (September 16, 2004).

"Business and Industry Research, Application to Valuation Engagements: The Internet and Other Sources," St. Louis Business Valuation Roundtable, St. Louis, MO, July 12, 2000.

APPENDIX A




EXPERIENCE

HEALTH CAPITAL CONSULTANTS, St. Louis, MO, 1996-present. Vice President of Library and Research Services

Responsible for all research for internal and client projects including: • Research for healthcare industry litigation support for legal cases related

to business economic damages, managed care and other contractual disputes, lost revenues and earnings, valuation, and related areas. Typical cases are retrospective, data from opposition is limited, and research is subject to intense scrutiny by opposing experts and counsel.

• Provision of customized research services as well as narrative reports, analyses, and bibliographies on healthcare topics, medical specialties, and healthcare markets.

• Research support for financial analysis, valuation, management advisory services, and other projects including information on compensation; expense benchmarking; mergers and acquisitions; publicly traded companies; managed care; medical specialty trends; local market demographics, economics, conditions, and competition; regulations; legislation; reimbursement issues; utilization levels; and, other topics.

• Design of databases, surveys, and analytical measures for research studies. • Competitive intelligence and marketing research.

Administration and organization of the HEALTH CAPITAL CONSULTANTS Research Library including the oversight of all library functions: collection development, cataloging and classification, ordering, indexing, planning, budgeting, and the supervision and training of library and research staff. Designed and implemented a modified MARC library catalog including an original subject classification, a post-coordinated subject heading system, and article level analytic cataloging.

TALX Corporation, St. Louis, MO, 1995-96. Special Projects Librarian

Project manager for university and special library retrospective conversion and authorities control projects including liaison work with libraries, developing local procedures, and resolving issues in cataloging.

Conducted all internal research, organized and wrote all project proposals, developed and supervised staff procedures and training.

Worked with computer programming to develop proprietary cataloging data management software.



APPENDIX A

TIM ALEXANDER, MLS



EXPERIENCE (Continued) Southwestern College, San Diego, CA, 1993 Microcomputer Specialist

Conceptualized and organized the development of an interactive multimedia orientation and training computer program for the college libraries.

Photographed, filmed, designed, and programmed all of the initial screens and code. Implemented a Spanish language version of the program.

EDUCATION University of Missouri, Columbia, Columbia, MO

M.L.S. — Library Science University of Iowa, Iowa City, IA

B.A. — Mathematics PROFESSIONAL AFFILIATIONS

American Library Association (ALA) and Special Libraries Association (SLA), member. St. Louis Technical Services Librarians Group, member of the Planning Committee, 1996-99.

PUBLISHING

“Healthcare Industry Research and its Application in Financial Consulting” chapter by Tim Alexander and Todd A. Zigrang in supplement to Financial Planning for Physicians and Healthcare Professionals 2002. David Marcinko, M.D., Ed. Aspen Publishers (2002).

"Macintosh and PhotoCD Technologies Provide Orientations to Southwestern College Library." - William Alexander, Ron Vess, MLS, and Tim Alexander. Accepted for publication in Resources in Education, June 28, 1994. ERIC No.: ED370625.

PRESENTATIONS

"Business and Industry Research, Application to Valuation Engagements: The Internet and Other Sources," St. Louis Business Valuation Roundtable, St. Louis, MO, July 12, 2000.

"Business and Industry Research and Its Application: The Internet and Other Sources," CPA Associates International, Medical Professionals Seminar, Denver, CO, Aug. 17, 1999.

"Macintosh and PhotoCD Technologies Provide Orientations to Southwestern College Library," [Poster Session] American Library Association, 114th Annual Conference, Chicago, IL, June 26, 1995.

AWARDS

EBSCO Community College Learning Resources Program Development Award. Accepted at the ACRL Community Colleges Business Meeting at ALA in New York, 1993.

U.S. Department of Education Fellowship in Science Reference (1993)


Appendix B General Data –

Healthcare Industry Information & Data Sources

Appendix B

Appendix B - Page 1 of 3


GENERAL DATA

HEALTH INDUSTRY INFORMATION AND DATA SOURCES

The following sources have been drawn upon during the course of this valuation report: 1. “Accrediting Agencies” National Association for Home Care and Hospice, 1996,

www.nahc.org/Consumer/aa.html, (Accessed 6/10/03) 2. “Annual Statement Studies” – Risk Management Association 3. “Basic Statistics About Home Care” National Association for Home Care and Hospice,

November 2001, www.nahc.org/Consumer/hcstats.html, (Accessed 6/5/03). 4. “Certificate of Need Regulation of Home Health and Hospice Services in the United States”

By Maryland Health Care Commission , Division of Health Resources. September 15, 2000. 5. “Control Premium Study” - Houlihan Lokey Howard & Zukin 6. “Cost Survey” – Medical Group Management Association 7. “EDGAR” website (www.sec.gov/edgarhp.htm) – U.S. Securities & Exchange Commission 8. “FAQs (Frequently Asked Questions)” National Home Infusion Association, 1998,

www.nhianet.org/faqs/index.htm, (Accessed 2/5/00)

9. “Federal Reserve Bank of St. Louis” website (www.stls.frb.org) - Federal Reserve Bank of St. Louis

10. “Financial Statements of the Small Business” - Financial Research Associates 11. “Guide to the Health Care Field” – American Hospital Association 12. “Health Care Financing Administration (HCFA) Customer Information System 1999

Medicare HHA National State Summary – Preliminary” National Association for Home Care and Hospice, www.nahc.org/NAHC/Research/99ulcomp.html, (Accessed 6/10/03)

13. “Health Care M&A Report” – Houlihan Lokey Howard & Zukin 14. “Healthcare Financial Management” – Healthcare Financial Management Association 15. “Home Care & Managed Care: Strategies for the Future” Edited by Eric B. Linne, J.D.

American Hospital Publishing, Inc, 1995. 16. “Home Care the American Way: An Historical Analysis” By K. Buhler-Wilkinson, Home

Health Care Services Quarterly, 1991 17. “Home Health Agencies Learn that Nothing is Constant But Change” FindLaw, 1998. 18. “Home Health Care,” The Health Care M&A Report, Fourth Quarter 2001. 19. “Home Health Industry Primer” By Kenneth R. Weakley, UBS Warburg, (November 28,

2001). 20. “Home Health Primer” – UBS Warburg LLC, December 13, 2001 21. “Home Healthcare Industry Update” UBS Warburg LLC, May 2, 2001. 22. “Integrating Home Care Into Hospital/Ambulatory Care Delivery Systems” By G. Brueckner

and C. Frasca, Outreach (Published by the Society Ambulatory Care Professionals of the American Hospital Association), May-June 1992

Appendix B



23. “Long Term Care: Nursing Homes, Assisted Living and Home Health” FindLaw, 1999, profs.lp.findlaw.com/longterm/longterm_5.html, (Accessed 6/10/03)

24. “Long-term Care Providers Run Away From Home Health” Jenks Healthcare Business Report, Nov. 9, 1998.

25. “Medicare Home Health & Key Provisions of the 1997 Balanced Budget Act” Department of Health and Human Services for North Carolina, www.dhhs.state.nc.us/aging/ltmed.htm, (Accessed 6/6/03)

26. “Medicare Home Health Care: Prospective Payment System Could Reverse Recent Declines in Spending” U.S. General Accounting Office, Sept. 2000.

27. “Medicare-Certified Home Health Agencies and Hospices by State, January 2000” National Association for Home Care, www.nahc.com/NAHC/Research/numhha.html, Accessed 7/8/05.

28. “Mergerstat Review” - Houlihan Lokey Howard & Zukin. 29. “Modern Healthcare” – Crain Communications 30. “Monetary Trends” - Federal Reserve Bank of St. Louis 31. “National Directory of Health Planning, Policy and Regulatory Agencies,” By American

Health Planning Association, Falls Church, VA: American Health Planning Association, 2002.

32. “National Economic Review” – Mercer Capital 33. “Policy Issues for Physicians Involved in Home Care” By P.A. Boling and J.M Keenan,

Caring Magazine, May 1992 34. “Prospective Payment System” – On-Line Medical Dictionary, 12/12/98,

http://cancerweb.ncl.ac.uk/cga-bin/omd?query=prospective+payment+system, (Accessed 6/10/03)

35. “RCPs and Home Health Care” The Journal for Respiratory Care Practitioners, December/January 2000, www.rtmagazine.com/articles.ASP?ArticleID=R9912F01, (Accessed 6/9/03)

36. “Report to the Congress: Medicare Payment Policy” Medicare Payment Advisory Commission, March 2001.

37. “Report to the Congress: Medicare Payment Policy” Medicare Payment Advisory Commission, March 1999.

38. “State Expenditures on Home and Community-Based Care for Disabled Elders” The Home Care Research Initiative, Fall/Winter 2000, www.vnsny.org/briefs.pdf, (Accessed 6/6/03)

39. “Stocks, Bonds, Bills, and Inflation”, Valuation ed. - Ibbotson Associates 40. “Testimony on Reforming the Medicare Home Health Benefit by Bruce C. Vladeck, Ph.D.”

Before the House Commerce Committee, Subcommittee on Health and Environment, 3/5/97

41. “Testimony on Reforming the Medicare Home Health Benefit by Bruce C. Vladeck, Ph.D.” Before the House Commerce Committee, Subcommittee on Health and Environment, 3/5/97.

42. “Testimony on the Balanced Budget Act Home Health Provisions by Nancy-Ann Min DeParle” Assistant Secretary for Legislation Department of Health and Human Services, 3/31/98, www.hhs.gov/asl/testify/t980331a.html, (Accessed 6/6/03)

Appendix B



43. “The Balanced Budget Act of 1997: A Current Look At Its Impact on Patients and Providers” Statement by Gail R. Wilensky, Chair Medicare Payment Advisory Commission, July 19, 2000.

44. “The Capitation Sourcebook” by Peter Boland, Boland Healthcare, 1996. 45. “The Diversity of Patient Care in the Home” By D. Buckels et al., Home Care: Positioning

the Hospital for the Future, 1987. 46. “The Market Approach to Valuing Businesses” by Shannon P. Pratt, CFA, FASA, MCBA,

John Wiley & Sons, 2001. 47. “The Role of Home Care: A Physician’s Perspective” By L. Bernsteing, The Remington

Report, June-July 1992. 48. “Variation Among Home Health Agencies in Medicare Payments for Home Health Services”

Department of Health and Human Services Office of Inspector General, (July 1995). 49. “What Types of Service Do Home Care Providers Deliver?” National Association for Home

Care, 1996, www.nahc.org/Consumer/wtosdhcpd.html, (Accessed 6/10/03). 50. “Which Medical Specialist For You?” from The Official ABMS Directory of Board Certified

Medical Specialists” 29th ed. Marquis Who’s Who, 1997. This listing is not exhaustive, but summarizes important sources. Various other sources may have been utilized, as indicated, within this report.


Appendix C International Glossary of Business Valuation Terms

APPENDIX C

Appendix C - Page 1 of 8


INTERNATIONAL GLOSSARY OF BUSINESS VALUATION TERMS Adjusted Book Value Method - a method within the asset approach whereby all assets and

liabilities (including off-balance sheet, intangible, and contingent) are adjusted to their fair market values (NOTE: In Canada on a going concern basis).

Adjusted Net Asset Method - see Adjusted Book Value Method. Appraisal - see Valuation. Appraisal Approach - see Valuation Approach. Appraisal Date - see Valuation Date. Appraisal Method - see Valuation Method. Appraisal Procedure - see Valuation Procedure. Arbitrage Pricing Theory - a multivariate model for estimating the cost of equity capital, which

incorporates several systematic risk factors. Asset (Asset-Based) Approach - a general way of determining a value indication of a business,

business ownership interest, or security using one or more methods based on the value of the assets net of liabilities.

Beta - a measure of systematic risk of a stock; the tendency of a stock's price to correlate with

changes in a specific index. Blockage Discount - an amount or percentage deducted from the current market price of a publicly

traded stock to reflect the decrease in the per share value of a block of stock that is of a size that could not be sold in a reasonable period of time given normal trading volume.

Book Value - see Net Book Value. Business - see Business Enterprise. Business Enterprise - a commercial, industrial, service, or investment entity (or a combination

thereof) pursuing an economic activity. Business Risk - the degree of uncertainty of realizing expected future returns of the business

resulting from factors other than financial leverage. See Financial Risk. Business Valuation - the act or process of determining the value of a business enterprise or

ownership interest therein.

APPENDIX C



Capital Asset Pricing Model (CAPM) - a model in which the cost of capital for any stock or portfolio of stocks equals a risk-free rate plus a risk premium that is proportionate to the systematic risk of the stock or portfolio.

Capitalization - a conversion of a single period of economic benefits into value. Capitalization Factor - any multiple or divisor used to convert anticipated economic benefits of a

single period into value. Capitalization of Earnings Method - a method within the income approach whereby economic

benefits for a representative single period are converted to value through division by a capitalization rate.

Capitalization Rate - any divisor (usually expressed as a percentage) used to convert anticipated

economic benefits of a single period into value. Capital Structure - the composition of the invested capital of a business enterprise, the mix of debt

and equity financing. Cash Flow - cash that is generated over a period of time by an asset, group of assets, or business

enterprise. It may be used in a general sense to encompass various levels of specifically defined cash flows. When the term is used, it should be supplemented by a qualifier (for example, "discretionary" or "operating") and a specific definition in the given valuation context.

Common Size Statements - financial statements in which each line is expressed as a percentage of

the total. On the balance sheet, each line item is shown as a percentage of total assets, and on the income statement, each item is expressed as a percentage of sales.

Control - the power to direct the management and policies of a business enterprise. Control Premium - an amount or a percentage by which the pro rata value of a controlling interest

exceeds the pro rata value of a non-controlling interest in a business enterprise, to reflect the power of control.

Cost Approach - a general way of determining a value indication of an individual asset by

quantifying the amount of money required to replace the future service capability of that asset.

Cost of Capital - the expected rate of return that the market requires in order to attract funds to a

particular investment. Debt-Free - we discourage the use of this term. See Invested Capital. Discount for Lack of Control - an amount or percentage deducted from the pro rata share of value

of 100% of an equity interest in a business to reflect the absence of some or all of the powers of control.

APPENDIX C



Discount for Lack of Marketability - an amount or percentage deducted from the value of an ownership interest to reflect the relative absence of marketability.

Discount for Lack of Voting Rights - an amount or percentage deducted from the per share value

of a minority interest voting share to reflect the absence of voting rights. Discount Rate - a rate of return used to convert a future monetary sum into present value. Discounted Cash Flow Method - a method within the income approach whereby the present value

of future expected net cash flows is calculated using a discount rate. Discounted Future Earnings Method - a method within the income approach whereby the present

value of future expected economic benefits is calculated using a discount rate. Economic Benefits - inflows such as revenues, net income, net cash flows, etc. Economic Life - the period of time over which property may generate economic benefits. Effective Date - see Valuation Date. Enterprise - see Business Enterprise. Equity - the owner’s interest in property after deduction of all liabilities. Equity Net Cash Flows - those cash flows available to pay out to equity holders (in the form of

dividends) after funding operations of the business enterprise, making necessary capital investments, and increasing or decreasing debt financing.

Equity Risk Premium - a rate of return added to a risk-free rate to reflect the additional risk of

equity instruments over risk free instruments (a component of the cost of equity capital or equity discount rate).

Excess Earnings - that amount of anticipated economic benefits that exceeds an appropriate rate of

return on the value of a selected asset base (often net tangible assets) used to generate those anticipated economic benefits.

Excess Earnings Method - a specific way of determining a value indication of a business, business

ownership interest, or security determined as the sum of a) the value of the assets derived by capitalizing excess earnings and b) the value of the selected asset base. Also frequently used to value intangible assets. See Excess Earnings.

Fair Market Value - the price, expressed in terms of cash equivalents, at which property would

change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arms length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts. (NOTE: In Canada, the term "price" should be replaced with the term "highest price")

APPENDIX C



Fairness Opinion - an opinion as to whether or not the consideration in a transaction is fair from a

financial point of view. Financial Risk - the degree of uncertainty of realizing expected future returns of the business

resulting from financial leverage. See Business Risk. Forced Liquidation Value - liquidation value, at which the asset or assets are sold as quickly as

possible, such as at an auction. Free Cash Flow - we discourage the use of this term. See Net Cash Flow. Going Concern - an ongoing operating business enterprise. Going Concern Value - the value of a business enterprise that is expected to continue to operate

into the future. The intangible elements of Going Concern Value result from factors such as having a trained work force, an operational plant, and the necessary licenses, systems, and procedures in place.

Goodwill - that intangible asset arising as a result of name, reputation, customer loyalty, location,

products, and similar factors not separately identified. Goodwill Value - the value attributable to goodwill. Guideline Public Company Method - a method within the market approach whereby market

multiples are derived from market prices of stocks of companies that are engaged in the same or similar lines of business, and that are actively traded on a free and open market.

Income (Income-Based) Approach - a general way of determining a value indication of a

business, business ownership interest, security, or intangible asset using one or more methods that convert anticipated economic benefits into a present single amount.

Intangible Assets - non-physical assets such as franchises, trademarks, patents, copyrights,

goodwill, equities, mineral rights, securities and contracts (as distinguished from physical assets) that grant rights and privileges, and have value for the owner.

Internal Rate of Return - a discount rate at which the present value of the future cash flows of the

investment equals the cost of the investment. Intrinsic Value - the value that an investor considers, on the basis of an evaluation or available

facts, to be the "true" or "real" value that will become the market value when other investors reach the same conclusion. When the term applies to options, it is the difference between the exercise price or strike price of an option and the market value of the underlying security.

APPENDIX C



Invested Capital - the sum of equity and debt in a business enterprise. Debt is typically a) all interest bearing debt or b) long-term interest-bearing debt. When the term is used, it should be supplemented by a specific definition in the given valuation context.

Invested Capital Net Cash Flows - those cash flows available to pay out to equity holders (in the

form of dividends) and debt investors (in the form of principal and interest) after funding operations of the business enterprise and making necessary capital investments.

Investment Risk - the degree of uncertainty as to the realization of expected returns. Investment Value - the value to a particular investor based on individual investment requirements

and expectations. (NOTE: in Canada, the term used is "Value to the Owner"). Key Person Discount - an amount or percentage deducted from the value of an ownership interest

to reflect the reduction in value resulting from the actual or potential loss of a key person in a business enterprise.

Levered Beta - the beta reflecting a capital structure that includes debt. Limited Appraisal - the act or process of determining the value of a business, business ownership

interest, security, or intangible asset with limitations in analyses, procedures, or scope. Liquidity - the ability to quickly convert property to cash or pay a liability. Liquidation Value - the net amount that would be realized if the business is terminated and the

assets are sold piecemeal. Liquidation can be either “orderly” or “forced.” Majority Control - the degree of control provided by a majority position. Majority Interest - an ownership interest greater than 50% of the voting interest in a business

enterprise. Market (Market-Based) Approach - a general way of determining a value indication of a

business, business ownership interest, security, or intangible asset by using one or more methods that compare the subject to similar businesses, business ownership interests, securities, or intangible assets that have been sold.

Market Capitalization of Equity - the share price of a publicly traded stock multiplied by the

number of shares outstanding. Market Capitalization of Invested Capital - the market capitalization of equity plus the market

value of the debt component of invested capital. Market Multiple - the market value of a company's stock or invested capital divided by a company

measure (such as economic benefits, number of customers). Marketability - the ability to quickly convert property to cash at minimal cost.

APPENDIX C



Marketability Discount - see Discount for Lack of Marketability. Merger and Acquisition Method - a method within the market approach whereby pricing

multiples are derived from transactions of significant interests in companies engaged in the same or similar lines of business.

Mid-Year Discounting - a convention used in the Discounted Future Earnings Method that reflects

economic benefits being generated at midyear, approximating the effect of economic benefits being generated evenly throughout the year.

Minority Discount - a discount for lack of control applicable to a minority interest. Minority Interest - an ownership interest less than 50% of the voting interest in a business

enterprise. Multiple - the inverse of the capitalization rate. Net Book Value - with respect to a business enterprise, the difference between total assets (net of

accumulated depreciation, depletion, and amortization) and total liabilities as they appear on the balance sheet (synonymous with Shareholder's Equity). With respect to a specific asset, the capitalized cost less accumulated amortization or depreciation as it appears on the books of account of the business enterprise.

Net Cash Flows - when the term is used, it should be supplemented by a qualifier. See Equity Net

Cash Flows and Invested Capital Net Cash Flows. Net Present Value - the value, as of a specified date, of future cash inflows less all cash outflows

(including the cost of investment) calculated using an appropriate discount rate. Net Tangible Asset Value - the value of the business enterprise's tangible assets (excluding excess

assets and non-operating assets) minus the value of its liabilities. Non-Operating Assets - assets not necessary to ongoing operations of the business enterprise.

(NOTE: in Canada, the term used is "Redundant Assets"). Normalized Earnings - economic benefits adjusted for nonrecurring, noneconomic, or other

unusual items to eliminate anomalies and/or facilitate comparisons. Normalized Financial Statements - financial statements adjusted for nonoperating assets and

liabilities and/or for nonrecurring, noneconomic, or other unusual items to eliminate anomalies and/or facilitate comparisons.

Orderly Liquidation Value - liquidation value at which the asset or assets are sold over a

reasonable period of time to maximize proceeds received.

APPENDIX C



Premise of Value - an assumption regarding the most likely set of transactional circumstances that may be applicable to the subject valuation; e.g. going concern, liquidation.

Present Value - the value, as of a specified date, of future economic benefits and/or proceeds from

sale, calculated using an appropriate discount rate. Portfolio Discount - an amount or percentage deducted from the value of a business enterprise to

reflect the fact that it owns dissimilar operations or assets that do not fit well together. Price/Earnings Multiple - the price of a share of stock divided by its earnings per share. Rate of Return - an amount of income (loss) and/or change in value realized or anticipated on an

investment, expressed as a percentage of that investment. Redundant Assets - see Non-Operating Assets. Report Date - the date conclusions are transmitted to the client. Replacement Cost New - the current cost of a similar new property having the nearest equivalent

utility to the property being valued. Reproduction Cost New - the current cost of an identical new property. Required Rate of Return - the minimum rate of return acceptable by investors before they will

commit money to an investment at a given level of risk. Residual Value - the value as of the end of the discrete projection period in a discounted future

earnings model. Return on Equity - the amount, expressed as a percentage, earned on a company’s common equity

for a given period. Return on Investment - see Return on Invested Capital and Return on Equity. Return on Invested Capital - the amount, expressed as a percentage, earned on a company’s total

capital for a given period. Risk-Free Rate - the rate of return available in the market on an investment free of default risk. Risk Premium - a rate of return added to a risk-free rate to reflect risk. Rule of Thumb - a mathematical formula developed from the relationship between price and

certain variables based on experience, observation, hearsay, or a combination of these; usually industry specific.

Special Interest Purchasers - acquirers who believe they can enjoy post-acquisition economies of

scale, synergies, or strategic advantages by combining the acquired business interest with their own.

APPENDIX C



Standard of Value - the identification of the type of value being used in a specific engagement; e.g.

fair market value, fair value, investment value. Sustaining Capital Reinvestment - the periodic capital outlay required to maintain operations at

existing levels, net of the tax shield available from such outlays. Systematic Risk - the risk that is common to all risky securities and cannot be eliminated through

diversification. The measure of systematic risk in stocks is the beta coefficient. Tangible Assets - physical assets (such as cash, accounts receivable, inventory, property, plant and

equipment, etc.). Terminal Value. see Residual Value. Transaction Method - see Merger and Acquisition Method. Unlevered Beta - the beta reflecting a capital structure without debt. Unsystematic Risk - the risk specific to an individual security that can be avoided through

diversification. Valuation - the act or process of determining the value of a business, business ownership interest,

security, or intangible asset. Valuation Approach - a general way of determining a value indication of a business, business

ownership interest, security, or intangible asset using one or more valuation methods. Valuation Date - the specific point in time as of which the valuator's opinion of value applies (also

referred to as "Effective Date" or "Appraisal Date"). Valuation Method - within approaches, a specific way to determine value. Valuation Procedure - the act, manner, and technique of performing the steps of an appraisal

method. Valuation Ratio - a fraction in which a value or price serves as the numerator and financial,

operating, or physical data serves as the denominator. Value to the Owner - see Investment Value. Voting Control - de jure control of a business enterprise. Weighted Average Cost of Capital (WACC) - the cost of capital (discount rate) determined by the

weighted average, at market value, of the cost of all financing sources in the business enterprise's capital structure.


Appendix D Contingent and Limiting Conditions

APPENDIX D

Contingent and Limiting Conditions

Appendix D - Page 1 of 1 Addus Healthcare, Inc. Robert James Cimasi, ASA, CBA, AVA, FCBI, CM&A, CMP ©HEALTH CAPITAL CONSULTANTS

The assignment represented by this REPORT is to provide a certain written valuation opinions. The information and documents considered in the assignment set forth in this REPORT are a compilation of data that was furnished to the VALUATOR by others, including CLIENT and through discovery from the SUBJECT ENTITY and their employees, agents and designees. Therefore, in accordance with the terms of our engagement, this information has been accepted without further verification as correctly reflecting the past performance and current condition of the SUBJECT ENTITY and the SUBJECT INTEREST, and no responsibility for its accuracy is assumed by the VALUATOR, which has not provided assurance services under this engagement. HEALTH CAPITAL CONSULTANTS is not rendering any opinion as to the title of any asset herein valuated. These assets are assumed to be marketable and in the ownership of the SUBJECT ENTITY. All references to the value of any tangible assets of the business are estimates of Fair Market Value, based upon the use of those assets as elements in a Going Concern, and not as used items valued for orderly or forced liquidation, unless specifically stated as such. Comments regarding the condition and/or state of the art of any assets are based upon the layperson observations of the VALUATOR, the representations of management, or as may be specified within the REPORT. HEALTH CAPITAL CONSULTANTS claim no expertise as liquidators or auctioneers. The valuation of any asset in this REPORT applies only under the existing conditions of the ongoing operation at the VALUATION DATE. The calculations of value expressed within this REPORT are applicable only to the type of value stated within the REPORT, and then only based upon the referenced definition of that type of value. Should these valuation calculations and projections be based upon Fair Market Value, those value calculations and projections assume a hypothetical sale, and unless stated otherwise, an all-cash sale. Any actual transaction may be concluded at a price that is higher or lower than the value calculations and projections, depending upon the circumstances of the actual transaction. Such circumstances could include, but not be limited to, changes in the economy, leveraging, cost of capital, the parties' individual perception of risk, knowledge, motivation, perceived synergies or lack thereof, negotiating skills, quality of counsel, and other individual or interrelated factors. Some assumptions inevitably will not materialize, and unanticipated events and circumstances may occur. Therefore, the actual performance in the areas forecasted/projected will vary from the forecast/projection, and the variations may be material. Any such forecast/projection related to the likelihood of SUBJECT ENTITY achieving the forecast/projection or on the reasonableness of the used assumptions, representations and conclusions are presented as part of this specific REPORT and is not intended to be used separately. This REPORT assumes no litigious, regulatory compliance, environmental hazard, or similar problems other than specifically disclosed in this REPORT. Should applicable investigation be done regarding such matters, items that would materially affect our final valuation opinion could be discovered. Therefore, no representations or warranties, are expressed or implied regarding such conditions and no consideration has been given, within this REPORT, to the possible effects of any such conditions. This REPORT assumes there are no restrictions or other qualifications, other than those set forth in the documents and information provided us, that could materially affect the value of the property appraised, including, but not limited to, its transferability. This REPORT is further subject to any other contingencies, assumptions, and limiting conditions as may be set out elsewhere within. The specific purpose and use of this REPORT is as state therein. The opinions expressed in this REPORT are restricted to that use and not valid if used for any other purpose. Any other use of this REPORT may lead the user to an incorrect conclusion for which the VALUATOR assumes no responsibility. No other use of this REPORT is permitted without the express written authorization of the VALUATOR. Possession of this REPORT or a copy thereof does not carry with it the right of publication. It may not be used for any other purpose, in whole or in part, by anyone except the CLIENT, for whom this REPORT was prepared, or conveyed to any third party without the previous express written consent of the VALUATOR. It consists of 67 pages, in eight (8) sections, including tables and exhibits, as well as attached appendices and schedules. Authorized copies of this REPORT will be signed by Robert James Cimasi, ASA, CBA, AVA, FCBI, CM&A, CMP, in green ink, and will bear his embossed seal. Copies that do not bear said signature in green ink or embossed seal are unauthorized and incomplete. This REPORT is prepared in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated by the Appraisal Foundation, as well as the code of ethics and standards of the Institute of Business Appraisers (IBA) and American Society of Appraisers (ASA), and the National Association of Certified Valuation Analysts (NACVA).


Appendix E Guideline Publicly Traded

Company Descriptions

Appendix E

Appendix E - Page 1 of 7


Guideline Publicly Traded Company Descriptions Company

(Stock Symbol)

Description Notes

1 Almost Family, Inc. (AFAM)

“The Company operates in two reportable business segments: Adult Day Health Services (ADHS), and Visiting Nurses (VN). Reportable segments have been identified based upon how management has organized the business by services provided to customers and the criteria in SFAS 131, "Disclosures about Segments of an Enterprise and Related Information". The Company's ADHS segment includes the aggregation of its ADC in-center operations and in-home personal care operations (also referred to as "personal care"), both of which predominantly provide long-term health care and custodial services that enable recipients to avoid nursing home admission. Sources of reimbursement, reimbursement rates per day and contribution margins from the Company's ADC and personal care operations are substantially alike. The Company's VN segment provides skilled medical services in patients' homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care. Approximately 83% of the VN segment revenues are generated from the Medicare program. VN Medicare revenues are generated on a per episode basis rather than a fee per visit or day of care. General and administrative expenses incurred at the corporate level have not been allocated to the segments. The Company has operations in Alabama, Connecticut, Florida, Indiana, Kentucky, Maryland, Massachusetts, and Ohio.”

Source: 12/31/01 10K

Appendix E



Company (Stock Symbol)

Description Notes

2 Amedisys, Inc. (AMED)

“Amedisys, Inc., a Delaware corporation ("Amedisys" or "the Company"), is a leading multi-regional provider of home health care nursing services. The Company operates fifty-six home care nursing offices and two corporate offices in the southern and southeastern United States. During 1999, the Company changed its strategy from providing a variety of alternate site provider health care services to becoming a leader in home health care nursing services. The Company's change of focus was largely attributed to its significant investment in this segment as a result of its acquisition of 83 home care offices from Columbia/HCA Healthcare Corporation a/k/a The Healthcare Company ("Columbia/HCA") in late 1998. A second major factor was the governmental reimbursement changes in the Medicare system that would allow home care providers the opportunity to be profitable under the Prospective Payment System ("PPS") which was implemented in October 2000. A third significant factor was the Company's established reputation and expertise in the field. Amedisys has over a decade of experience in home care nursing and was an early innovator in bringing technology, previously used only in acute care settings, to the home, as well as providing traditional home care services. Pursuant to this strategy, the Company launched a restructuring plan to divest its non-home health care nursing divisions. During the period from September 1999 through September 2001, the Company sold or closed its six surgery centers and four infusion locations. The Company plans to achieve market dominance in the southern and southeastern United States by expanding its referral base by utilizing a highly trained sales force, offering specialized programs such as wound care, and completing selective acquisitions. The Company's business model has been developed to be successful under PPS. The Company has implemented disease state management programs and clinical protocols as well as supporting technology to monitor and report outcome data, to standardize care, and to ensure quality outcomes. Using clinical managers to assess and track patient progress and highly skilled nurses to deliver care are also important components of the overall plan.”

Source: 12/31/01 10-K

3 American Homepatient, Inc. (AHOM)

“American HomePatient, Inc. (the Company ) was incorporated in Delaware in September 1991. The Company s principal executive offices are located at 5200 Maryland Way, Suite 400, Brentwood, Tennessee 37027-5018, and its telephone number at that address is (615) 221-8884. The Company provides home health care services and products consisting primarily of respiratory and infusion therapies and the rental and sale of home medical equipment and home health care supplies. These services and products are paid for primarily by Medicare, Medicaid and other third-party payors. As of December 31, 2001, the Company provided these services to patients primarily in the home through 288 centers in 36 states. From its inception through 1997 the Company experienced substantial growth primarily as a result of its strategy of acquiring and operating home health care businesses. Beginning in 1998, the Company s strategy shifted from acquiring new businesses to focusing more on internal growth, integrating its acquired operations and achieving operating efficiencies.”

Source: 12/31/01 10-K

Appendix E




Description Notes

4 Apria Healthcare, Inc. (AHG)

“Apria Healthcare Group Inc. provides comprehensive home healthcare services through approximately 400 branch locations which serve patients in all 50 states. Apria has three major service lines: home respiratory therapy, home infusion therapy and home medical equipment. The following table provides examples of the services and products in each: SERVICE LINE - EXAMPLES OF SERVICES AND PRODUCTS Home respiratory therapy - Provision of oxygen systems, home ventilators, sleep apnea equipment, nebulizers and respiratory medications and related services. Home infusion therapy - Intravenous administration of anti-infectives, pain management, chemotherapy, nutrients (also administered through a feeding tube) and other medications and related services. Home medical equipment - Provision of patient safety items, and ambulatory and room equipment, such as hospital beds and wheelchairs.” … “In all three lines, Apria provides patients with a variety of clinical services, related products and supplies, most of which are prescribed by a physician as part of a care plan. Apria purchases or rents the products needed to complement its services.”

Source: 12/31/01 10-K

5 Coram Healthcare, Inc. (CRHEQ)

“Lines of Business. During 2001, Coram was engaged primarily in the business of furnishing alternate site (outside the hospital) infusion therapy and related services, including non-intravenous home health products such as durable medical equipment and respiratory therapy services. Other services offered by Coram included centralized management, administration and clinical support for clinical research trials. In December 1999, Coram announced that it was repositioning its business to focus on its core alternate site infusion therapy business and the clinical research business operated by its wholly-owned subsidiary, CTI Network, Inc.”

Source: 12/31/01 10-K

6 Gentiva Health Services (GTIV)

“Gentiva Health Services, Inc. ("Gentiva" or the "Company") became an independent publicly owned company on March 15, 2000, when all of the common stock of the Company was issued to the stockholders of Olsten Corporation, a Delaware corporation ("Olsten"), the former parent corporation of the Company (the "Split-Off"). Prior to the Split-Off, all of the assets and liabilities of Olsten's health services business (formerly known as Olsten Health Services) were transferred to the Company pursuant to a separation agreement and other agreements between Gentiva, Olsten and Adecco SA ("Adecco"). Gentiva was incorporated in the state of Delaware on August 6, 1999. The Company operates its health services business in the United States and currently provides specialty pharmaceutical services (including infusion therapy and distribution services) and home health care services.”

Source: 12/30/01 10-KA

Appendix E




Description Notes

7 Lincare Holdings, Inc. (LNCR)

“Lincare Holdings Inc. is a Delaware corporation. Lincare Holdings Inc. together with its subsidiaries ("Lincare" or the "Company"), is one of the nation's largest providers of oxygen and other respiratory therapy services to patients in the home. The Company's customers typically suffer from chronic obstructive pulmonary disease ("COPD"), such as emphysema, chronic bronchitis or asthma, and require supplemental oxygen or other respiratory therapy services in order to alleviate the symptoms and discomfort of respiratory dysfunction. Lincare currently serves over 320,000 customers in 44 states through 564 operating centers.” … “PRODUCTS AND SERVICES OF LINCARE Lincare primarily provides oxygen and other respiratory therapy services to patients in the home. Lincare also provides a variety of home infusion therapies in certain geographic markets. When a patient is referred to one of the Company's operating centers by a physician, hospital discharge planner or other source, the Company's customer representative obtains the necessary medical and insurance coverage information and coordinates the delivery of patient care. The prescribed therapy is delivered by one of the Company's representatives to the customer's home, where instructions and training are provided to the customer and the customer's family regarding appropriate equipment use and maintenance and the prescribed therapy. Following the initial setup, Company representatives make periodic visits to the customer's home, the frequency of which is dictated by the type of therapy. All services and equipment provided by the Company are coordinated with the customer's physician. During the period that the Company provides services and equipment for a customer, the customer remains under the physician's care and medical supervision. The Company employs respiratory therapists, nurses and other qualified clinicians to perform certain training and other functions in connection with the Company's services. All clinicians are licensed where required by applicable law.”

Source: 12/31/01 10-K

8 Mid-Atlantic Home Health Network, Inc. (MAHN)

“Mid-Atlantic is a regionally based home health and nurse staffing amended, pursuant to the exemption contained in Section 4(2) of that Act. company established to provide quality services and home medical products in a cost-competitive manner to the Mid- Atlantic region. Since its acquisition of Hunt Country Nursing Services and National Nurses Service in June of 1995 (See Business of the Company), the majority of Mid-Atlantic's business has involved the provision of nursing staff services to hospitals, nursing homes and other facilities such as clinics, correctional facilities and schools, as well as private duty nursing services.” … “Mid-Atlantic provides medical equipment and supplies and around-the-clock skilled nursing. Registered nurses, Licensed Practical Nurses and Vocational Nurses, as well as Physical, Occupational, Speech and Respiratory Therapists work under the direction of physicians in the setting of personal homes.”

Source: 12/31/01 10-KSB

Appendix E




Description Notes

9 National Home Health Care Corporation (NHHC)

“National Home Health Care Corp. (the "Company") is a Delaware corporation which was incorporated in 1983 and completed its initial public offering that year. Formerly Family Treatment Centers of America, Inc. and then National HMO Corp., in 1991 the Company changed its name to National Home Health Care Corp. The Company is a provider of home health care services in New York, New Jersey and Connecticut. The Company has four principal operating subsidiaries: o Health Acquisition Corp., formerly Allen Health Care Services, Inc. ("Allen Health Care"), a New York corporation that conducts home health care operations in New York. o New England Home Care, Inc. ("New England"), a Connecticut corporation that conducts home health care operations in Connecticut. o Accredited Health Services, Inc. ("Accredited"), a New Jersey corporation that conducts home health care operations in New Jersey. o Connecticut Staffing Works Corp. ("Connecticut Staffing"), a Connecticut corporation that conducts healthcare staffing operations in Connecticut.”

Source: 7/31/01 10-K

Appendix E




Description Notes

10 New York Health Care, Inc. (BBAL)

“New York Health Care, Inc. (the "Company") is a licensed home health care agency engaged primarily in supplying the services of paraprofessionals who provide a broad range of health care support services to patients in their homes. The Company was initially organized under the laws of the State of New York, in February 1983. The Company operates 24 hours a day, seven days a week to receive referrals and coordinate services with physicians, case managers, patients and their families. The Company operates in all five boroughs of New York City and the counties of Nassau, Westchester, Rockland, Orange, Dutchess, Ulster, Putnam and Sullivan, in the State of New York. The Company, as a result of acquisitions as describe elsewhere in this annual report, also operates in Jersey City, Edison, Bradley Beach, Toms River, East Orange and Hackensack, New Jersey under the name Helping Hands Healthcare, (the business name of NYHC Newco Paxxon, Inc., a wholly owned subsidiary of the Company). The Company's services are supplied principally pursuant to contracts with health care institutions and agencies such as various county Departments of Social Services, NYC HRA, New Jersey Medicaid, Beth Abraham Health Services in the Bronx and Westchester County, Kingsbridge Medical Center, Mt. Sinai Medical Center, Aetna US Healthcare, and Gentiva Health Services. The Company's primary objective is to enhance its position in the home health care market by increasing the promotion of its full service and specialty health care capabilities to existing and new referral sources; expand its markets and enter new markets by establishing additional branch offices and acquiring other related health care businesses; expand its provision of skilled nursing services, principally infusion therapy and the care of women during pregnancy and their newborn children; and develop complimentary home health care products and services, as well as maintaining its regular training and testing programs, and recruitment activities. On October 11, 2001, the Company entered into an agreement with The Bio Balance Corp., a privately owned Delaware corporation ("Bio Balance"), pursuant to which the Company intends to acquire Bio Balance as a wholly-owned subsidiary in a stock-for-stock exchange (the "Transaction"), which will operate independently with its own officers, board of directors and financing. Bio Balance is a developmental stage company which owns "probiotic" technology and intellectual property and has engaged in research, development and limited marketing in Israel of a product for the treatment of gastrointestinal diseases and disorders in animals and humans, including Irritable Bowel Syndrome and chronic diarrhea. ”

Source: 12/31/01 10K

11 Option Care, Inc. (OPTN)

“We provide pharmacy services to patients on behalf of managed care organizations and other third party payors. We contract with these payors to provide infusion therapy, specialty pharmacy and other related services to patients at home or at other alternate-site settings, such as physicians' offices. As of December 31, 2001, our pharmacy and related services are provided locally through our nationwide network of 132 owned and franchised pharmacy locations, and through our three regional specialty pharmacies, which operate under the name OptionMed . For the twelve months ended December 31, 2001, approximately 74.9% of our revenue was generated from our local pharmacy division and 25.1% from our regional specialty pharmacy division.”

Source: 12/31/01 10-K

Appendix E




Description Notes

12 Pediatric Services of America, Inc. (PSAI)

“The Company is a leading provider of children's health care and related services. Management believes the Company is the nation's largest focused pediatric home health care provider. The Company provides children's health care services through 121 branch offices located in 22 states, including satellite offices and branch office start-ups. The Company provides a broad range of pediatric health care services and equipment, including nursing, respiratory therapy, rental and sale of durable medical equipment, pharmaceutical services and infusion therapy services. In addition, the Company provides pediatric rehabilitation services, day treatment centers for medically fragile children, pediatric well care services and special needs educational services for pediatric patients. The Company also provides case management services in order to assist the family and patient by coordinating the provision of services between the insurer or other payor, the physician, the hospital and other health care providers. The Company's services are designed to provide a high quality, lower cost alternative to prolonged hospitalization for medically fragile children. As a complement to its pediatric respiratory and infusion therapy services, the Company also provides respiratory and infusion therapy and related services for adults.”

Source: 9/30/01 10-K405

13 Transworld Healthcare, Inc. (AHCI)

“Transworld Healthcare, Inc. (the "Company") is a provider of a broad range of health care services and products with operations in the United Kingdom ("U.K.") and the United States ("U.S."). The Company provides the following services and products: (i) patient services, including nursing and para-professional services; (ii) respiratory therapy and home medical equipment; and (iii) infusion therapy. The Company provides these services and products from the following reportable business segments: (i) U.K. operations ("U.K. Operations"); and (ii) U.S. home healthcare operations ("Home Healthcare Operations"). The Company's U.K. Operations supply nursing and para-professional care to the community and U.K. healthcare institutions and medical grade oxygen to the U.K. pharmacy market and private patients in Northern Ireland. The Company's Home Healthcare Operations are concentrated in New Jersey and New York. The Company was a provider of specialty mail-order pharmaceuticals and medical supplies. On October 3, 2000, the Company sold a substantial portion of the assets of its U.S. mail-order operations ("Mail-Order Operations") and subsequently closed this business segment. In addition, on November 22, 2000, the Company sold its U.K. subsidiary Amcare, Ltd. ("Amcare").”

Source: 9/30/01 10-K


Schedules

Addus Healthcare, Inc. Schedule 1Historical Income Statements Page 1 of 5

PERIOD: 1/1/01 - 12/31/01Adjustments & Common Size

A B C DREVENUES Per Statement (1) Adjustments Adj. Balance Common Size

1 Sales $234,070,611 $234,070,611 100.0%2 TOTAL REVENUES $234,070,611 $0 $234,070,611 100.0%

3 COST OF SALES $177,721,891 $177,721,891 75.9%

4 GROSS PROFIT $56,348,720 $0 $56,348,720 24.1%

OPERATING EXPENSES5 General and Administrative Expenses $60,910,829 $60,910,829 26.02%6 Write Down of Goodwill to Net Realizable Value $0 $0 0.00%7 Loss on Abandonment of Leasehold Improvements $0 $0 0.00%8 TOTAL OPERATING EXPENSE $60,910,829 $0 $60,910,829 26.02%

9 OPERATING INCOME ($4,562,109) $0 ($4,562,109) -1.9%

OTHER EXPENSES10 Interest Expense (2) $2,742,556 ($2,742,556) $0 0.00%11 Other Expense (Income) $98,319 $98,319 0.04%12 TOTAL OTHER EXPENSES $2,840,875 ($2,742,556) $98,319 0.04%

13 NET INCOME BEFORE TAXES ($7,402,984) $2,742,556 ($4,660,428) -1.99%

14 EBITDA (3) ($157,340) $0 ($157,340) -0.07%

Notes:1 Source: SUBJECT ENTITY'S Audited Income Statement for 1/1/01-12/31/01 [AD 020112].2 Adjusted out interest expense to reflect a debt free calculation.3 Earnings before interest, taxes, depreciation and amortization is calculated by adding depreciation of $2,065,503 and amortization of

$2,339,266 [AD 020113].

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3 COST OF SALES $156,285,176 $156,285,176 74.3%

4 GROSS PROFIT $54,139,120 $0 $54,139,120 25.7%


9 OPERATING INCOME $6,287,297 $0 $6,287,297 3.0%

OTHER EXPENSES10 Interest Expense (2) $3,016,403 ($3,016,403) $0 0.00%11 Other Expense (Income) $16,504 $16,504 0.01%12 TOTAL OTHER EXPENSES $3,032,907 ($3,016,403) $16,504 0.01%

13 NET INCOME BEFORE TAXES $3,254,390 $3,016,403 $6,270,793 2.98%

14 EBITDA (3) $11,493,623 $0 $11,493,623 5.46%

Notes:1 Source: SUBJECT ENTITY'S Audited Income Statement for 1/1/00-12/31/00 [AD 020112].2 Adjusted out interest expense to reflect a debt free calculation.3 Earnings before interest, taxes, depreciation and amortization is calculated by adding depreciation of $1,470,269 and amortization of

$3,736,057 [AD 020113].






3 COST OF SALES $115,090,876 $115,090,876 73.7%

4 GROSS PROFIT $41,052,699 $0 $41,052,699 26.3%


9 OPERATING INCOME $5,528,380 $0 $5,528,380 3.5%

OTHER EXPENSES10 Interest Expense (2) $1,563,459 ($1,563,459) $0 0.00%11 Other Expense (Income) ($99,498) ($99,498) -0.06%12 TOTAL OTHER EXPENSES $1,463,961 ($1,563,459) ($99,498) -0.06%

13 NET INCOME BEFORE TAXES $4,064,419 $1,563,459 $5,627,878 3.60%

14 EBITDA (3) $9,598,311 $0 $9,598,311 6.15%

Notes:1 Source: SUBJECT ENTITY'S Audited Income Statement for 1/1/99-12/31/99 [MED 018878].2 Adjusted out interest expense to reflect a debt free calculation.3 Earnings before interest, taxes, depreciation and amortization is calculated by adding depreciation of $1,164,181 and amortization of

$2,905,750 [MED 018879].



SUMMARY OF ADJUSTED BALANCE OF STATEMENTS

A B CREVENUES 2001 2000 1999

1 Sales $234,070,611 $210,424,296 $156,143,5752 TOTAL REVENUES $234,070,611 $210,424,296 $156,143,575

3 COST OF SALES $177,721,891 $156,285,176 $115,090,876

4 GROSS PROFIT $56,348,720 $54,139,120 $41,052,699

OPERATING EXPENSES5 General and Administrative Expenses $60,910,829 $47,851,823 $35,524,3196 Write Down of Goodwill to Net Realizable Value $0 $0 $07 Loss on Abandonment of Leasehold Improvements $0 $0 $08 TOTAL OPERATING EXPENSE $60,910,829 $47,851,823 $35,524,319

9 OPERATING INCOME ($4,562,109) $6,287,297 $5,528,380

OTHER EXPENSES10 Interest Expense $0 $0 $011 Other Expense (Income) $98,319 $16,504 ($99,498)12 TOTAL OTHER EXPENSES $98,319 $16,504 ($99,498)

13 NET INCOME BEFORE TAXES ($4,660,428) $6,270,793 $5,627,878

14 EBITDA ($157,340) $11,493,623 $9,598,311



SUMMARY OF COMMON SIZE OF STATEMENTS

A B CREVENUES 2001 2000 1999

1 Sales 100.0% 100.0% 100.0%2 TOTAL REVENUES 100.0% 100.0% 100.0%

3 COST OF SALES 75.9% 74.3% 73.7%

4 GROSS PROFIT 24.1% 25.7% 26.3%

OPERATING EXPENSES5 General and Administrative Expenses 26.0% 22.7% 22.8%6 Write Down of Goodwill to Net Realizable Value 0.0% 0.0% 0.0%7 Loss on Abandonment of Leasehold Improvements 0.0% 0.0% 0.0%8 TOTAL OPERATING EXPENSE 26.0% 22.7% 22.8%

9 OPERATING INCOME -1.9% 3.0% 3.5%

OTHER EXPENSES10 Interest Expense 0.0% 0.0% 0.0%11 Other Expense (Income) 0.0% 0.0% -0.1%12 TOTAL OTHER EXPENSES 0.0% 0.0% -0.1%

13 NET INCOME BEFORE TAXES -2.0% 3.0% 3.6%

14 EBITDA -0.1% 5.5% 6.1%


Addus Healthcare, Inc. Schedule 2Historical Balance Sheets

A B C D E

12/31/2001 (1) Adjustments12/31/2001 Adjusted 12/31/2000 (2) 12/31/1999 (3)

ASSETS:Current Assets:

1 Cash $0 $0 $0 $02 Accounts Receivable $44,145,843 $44,145,843 $46,129,192 $37,897,0303 Marketable Securities $0 $0 $0 $88,2104 Inventory $1,045,927 $1,045,927 $594,380 $533,4265 Prepaid Expenses and Deposits $885,375 $885,375 $1,045,853 $779,0426 Income Taxes Receivable $4,418 $4,418 $111,367 $183,5807 Amounts due from Stockholder/Affiliated Entities $0 $0 $0 $1,333,0658 Total Current Assets $46,081,563 $0 $46,081,563 $47,880,792 $40,814,353

Fixed Assets:Gross Fixed Assets

9 Furniture and Equipment $16,081,716 $16,081,716 $11,556,517 $9,452,93610 Transportation Equipment $778,979 $778,979 $830,784 $601,23511 Leasehold Improvements $1,367,290 $1,367,290 $102,208 $75,73412 Construction-in-Progress $187,192 $187,192 $786,193 $013 Total Gross Fixed Assets $18,415,177 $0 $18,415,177 $13,275,702 $10,129,905

Accumulated Depreciation14 Accumulated Depreciation and Amortization ($5,995,844) ($5,995,844) ($5,496,587) ($4,591,953)13 Total Accum. Depreciation ($5,995,844) $0 ($5,995,844) ($5,496,587) ($4,591,953)

14 Total Net Fixed Assets $12,419,333 $0 $12,419,333 $7,779,115 $5,537,952

Other Assets:15 Excess of Purchase Price over Net Assets $9,173,286 $9,173,286 $11,148,720 $13,446,19716 Debt Issuance Costs, net of Accumulated Amortization $257,516 $257,516 $252,216 $017 Other $730,128 $730,128 $1,104,233 $933,76818 Total Other Assets $10,160,930 $10,160,930 $12,505,169 $14,379,965

19 TOTAL ASSETS $68,661,826 $0 $68,661,826 $68,165,076 $60,732,270

LIABILITIES:Current Liabilities:

20 Checks issued against future deposits $5,768,186 $5,768,186 $2,891,859 $2,560,04421 Notes Payable-Stockholder/Affiliated Entities $3,000,000 $3,000,000 $0 $4,53822 Accounts Payable $6,471,243 $6,471,243 $4,647,033 $2,639,06323 Accrued Expenses $18,154,487 $18,154,487 $12,086,674 $12,410,27724 Current Maturities of Long-term Debt $3,166,488 $3,166,488 $3,284,833 $2,019,01125 Total Current Liabilities $36,560,404 $0 $36,560,404 $22,910,399 $19,632,933

Long Term Liabilities26 Long-term Debt less Current Maturities $25,305,353 $25,305,353 $28,200,624 $25,414,77427 Total Long Term Liabilities: $25,305,353 $25,305,353 $28,200,624 $25,414,774

28 Total Liabilities $61,865,757 $61,865,757 $51,111,023 $45,047,707

Shareholders' Equity29 Common Stock $1,000 $1,000 $1,000 $1,00030 Retained Earnings (Accumulated Deficit) $10,840,571 $10,840,571 $18,712,808 $15,683,56331 Less Amounts due from Stockholder/Affiliates ($4,045,502) (6) ($4,045,502) ($1,659,755)32 Total Shareholders' Equity $6,796,069 $0 $6,796,069 $17,054,053 $15,684,563

TOTAL LIABILITIES 33 & SHAREHOLDERS' EQUITY $68,661,826 $0 $68,661,826 $68,165,076 $60,732,270

34 Interest-Bearing Debt (7) $31,471,84135 Total Capitalization (8) $38,267,91036 % Debt/Total Capitalization (9) 82.24%

Notes:1 Source: SUBJECT ENTITY'S Audited Balance Sheet As of 12/31/01. [AD 020110-020111]2 Source: SUBJECT ENTITY'S Audited Balance Sheet As of 12/31/00. [AD 020110-020111]3 Source: SUBJECT ENTITY'S Audited Balance Sheet As of 12/31/99. [MED 018876-01877]4 Balancing adjustment for adjustments made to assets and liabilities.5 Interest-bearing debt of the SUBJECT ENTITY (Lines 21, 24 and 26).6 Total capitalization of the SUBJECT ENTITY. Calculated as Interest-Bearing Debt (Line 27) plus Equity (Line 32).7 The SUBJECT ENTITY's Capital Structure. Calculated as Interest-Bearing Debt (Line 34) divided by Total Capitalization (Line 35).

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Addus Healthcare, Inc. Schedule 3Benchmarking/Ratio Analysis

1 Weight (1)12/31/2001

Income Statement2 Net Revenue $98,265,363 $110,174,000 $352,584,000 $1,131,915,000 $393,629,000 $1,377,687,000 $812,442,000 $28,336,732 $77,248,000 $34,320,710 $217,133,000 $187,668,714 $178,747,000 N/A N/A N/A $234,070,6113 Cost of Sales $82,092,909 $49,046,000 $114,305,000 $217,662,000 $279,275,000 $918,608,000 $123,406,000 $22,029,578 $49,834,000 $0 $144,656,000 $0 $125,656,000 N/A $177,721,8914 Operating Expense (9) $12,163,001 $53,665,000 $221,984,000 $771,026,000 $111,191,000 $436,065,000 $438,659,000 $5,498,100 $19,938,000 $33,688,090 $54,907,000 $180,259,324 $39,572,000 N/A N/A N/A $60,910,8295 Operating Profit $4,009,453 $7,463,000 $16,295,000 $143,227,000 $3,163,000 $23,014,000 $250,377,000 $809,054 $7,476,000 $632,620 $17,570,000 $7,409,390 $13,519,000 N/A N/A N/A ($4,562,109)6 Other Expense $1,458,730 $2,167,000 $27,389,000 $25,685,000 $4,651,000 $151,000 $15,648,000 $789,224 ($257,000) $129,734 $1,335,000 $3,034,056 $9,740,000 N/A $98,3197 Net Income Before Taxes $2,550,723 $5,296,000 ($11,094,000) $117,542,000 ($1,488,000) $22,863,000 $234,729,000 $19,830 $7,733,000 $502,886 $16,235,000 $4,375,334 $3,779,000 N/A ($4,660,428)8 EBITDA $6,004,721 $10,902,000 $29,242,000 $263,562,000 $23,871,000 $49,536,000 $326,195,000 $991,150 $8,596,000 $824,605 $21,460,000 $13,876,151 $19,967,000 N/A ($157,340)

Balance SheetAssets

9 Cash & Cash Equivalents $1,928,391 $3,515,000 $9,424,000 $9,359,000 $21,608,000 $107,163,000 $8,350,000 $1,283,042 $11,444,000 $1,007,444 $8,511,000 $8,186,000 $30,859,000 N/A N/A N/A $010 Patient Net Receivables $17,896,966 $10,468,000 $61,661,000 $162,092,000 $88,567,000 $368,196,000 $143,840,000 $5,174,631 $15,620,000 $5,442,229 $56,341,000 $32,012,000 $27,743,000 N/A N/A N/A $44,145,84311 Total Current $22,611,055 $15,049,000 $85,925,000 $239,823,000 $128,733,000 $570,355,000 $161,232,000 $6,972,988 $28,756,000 $6,700,825 $77,699,000 $50,046,000 $67,789,000 N/A N/A N/A $46,081,56312 Property & Equipment (net) $8,113,938 $10,290,000 $46,223,000 $165,471,000 $15,030,000 $30,449,000 $212,315,000 $533,672 $916,000 $292,059 $7,330,000 $8,668,000 $7,825,000 N/A N/A N/A $12,419,33313 Total Assets $35,876,649 $47,640,000 $344,664,000 $695,782,000 $336,466,000 $838,334,000 $1,071,064,000 $8,894,791 $38,840,000 $8,443,601 $125,262,000 $94,361,000 $244,294,000 N/A N/A N/A $68,661,826

Liabilities14 Total Current Liabilities $10,647,948 $33,409,000 $324,261,000 $174,750,000 $204,934,000 $169,154,000 $162,015,000 $6,339,114 $4,705,000 $4,209,565 $21,342,000 $23,001,000 $52,440,000 N/A N/A $36,560,40415 Total Liabilities $25,495,238 $44,265,000 $329,767,000 $452,984,000 $258,277,000 $216,627,000 $332,106,000 $6,924,154 $4,705,000 $4,227,846 $24,496,000 $50,351,000 $207,000,000 N/A N/A N/A $61,865,75716 Interest-Bearing Debt $14,115,555 $25,850,000 $282,810,000 $293,689,000 $139,510,000 $0 $223,264,000 $5,221,500 $0 $165,407 $618,000 $27,386,000 $177,140,000 N/A N/A N/A $31,471,84117 Preferred Stock $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,904 $0 $0 $0 N/A N/A N/A $018 Net Worth/Equity $10,381,411 $3,309,000 $14,897,000 $242,798,000 $78,189,000 $621,707,000 $738,958,000 $1,970,637 $34,135,000 $4,215,755 $100,766,000 $44,010,000 $37,294,000 N/A N/A N/A $6,796,06919 Total Liabilities and Net Worth $35,876,649 $47,640,000 $344,664,000 $695,782,000 $336,466,000 $838,334,000 $1,071,064,000 $8,894,791 $38,840,000 $8,443,601 $125,262,000 $94,361,000 $244,294,000 N/A N/A N/A $68,661,826

20 Interest Expense $1,458,730 $2,785,000 $27,389,000 $25,700,000 $6,652,000 $151,000 $16,013,000 $789,224 $0 $129,734 $1,225,000 $3,510,538 $11,694,000 N/A N/A N/A $021 Depreciation & Amortization $1,995,268 $3,439,000 $12,947,000 $120,335,000 $20,708,000 $26,522,000 $75,818,000 $182,096 $1,120,000 $191,985 $3,890,000 $6,466,761 $6,448,000 N/A N/A N/A $4,404,76922 Working Capital $11,963,107 ($18,360,000) ($238,336,000) $65,073,000 ($76,201,000) $401,201,000 ($783,000) $633,874 $24,051,000 $2,491,260 $56,357,000 $27,045,000 $15,349,000 N/A N/A N/A $9,521,15923 Capital Expenditures $2,836,709 $13,424,000 $19,629,000 $133,162,000 $7,587,000 $10,067,000 $74,206,000 $18,657 $409,000 $20,252 $2,752,000 $2,422,027 $2,295,000 N/A N/A N/A $5,139,475

Ratio Formula

Statement of Income24 Net Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.00% 100.0%25 Cost of Sales Line 3/Line 2 83.54% 44.52% 32.42% 19.23% 70.95% 66.68% 15.19% 77.74% 64.51% 0.00% 66.62% 0.00% 70.30% 0.00% 0.00% 44.28% 75.93%26 Operating Expense (9) Line 4/Line 2 12.4% 48.7% 63.0% 68.1% 28.2% 31.7% 54.0% 19.4% 25.8% 98.2% 25.3% 96.1% 22.1% 96.1% 99.6% 49.98% 26.0%27 Total Cost of Sales/Operating Expense Line 25 + Line 26 95.9% 93.2% 95.4% 87.3% 99.2% 98.3% 69.2% (8) 97.1% 90.3% 98.2% 91.9% 96.1% 92.4% 96.1% 99.6% 94.85% 101.9%28 Other Expense Line 6/Line 2 1.5% 2.0% 7.8% 2.3% 1.2% 0.0% 1.9% 2.8% -0.3% 0.4% 0.6% 1.6% 5.4% 0.6% -0.6% 2.17% 0.04%

Balance SheetAssets

29 Cash & Cash Equivalents Line 9/Line 13 5.4% 7.4% 2.7% 1.3% 6.4% 12.8% 0.8% 14.4% 29.5% 11.9% 6.8% 8.7% 12.6% 16.6% 10.7% 10.74% 0.00%30 Net Receivables Line 10/Line 13 49.9% 22.0% 17.9% 23.3% 26.3% 43.9% 13.4% 58.2% 40.2% 64.5% 45.0% 33.9% 11.4% 17.4% 41.0% 30.39% 64.29%31 Total Current Line 11/Line 13 63.0% 31.6% 24.9% 34.5% 38.3% 68.0% 15.1% 78.4% 74.0% 79.4% 62.0% 53.0% 27.7% 47.8% 56.1% 47.41% 67.11%32 Fixed Assets (net) Line 12/Line 13 22.6% 21.6% 13.4% 23.8% 4.5% 3.6% 19.8% 6.0% 2.4% 3.5% 5.9% 9.2% 3.2% 22.6% 22.9% 11.34% 18.09%33 Total Assets Line 13/Line 13 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.00% 100.00%

Liabilities34 Total Current Line 14/Line 13 29.7% 70.1% 94.1% 25.1% 60.9% 20.2% 15.1% 71.3% 12.1% 49.9% 17.0% 24.4% 21.5% 30.8% 52.5% 42.30% 53.25%35 Total Liabilities Line 15/Line 13 71.1% 92.9% 95.7% 65.1% 76.8% 25.8% 31.0% 77.8% 12.1% 50.1% 19.6% 53.4% 84.7% 54.9% 77.0% 62.35% 90.10%36 Net Worth Line 16/Line 13 28.9% 6.9% 4.3% 34.9% 23.2% 74.2% 69.0% 22.2% 87.9% 49.9% 80.4% 46.6% 15.3% 45.1% 23.0% 37.64% 9.90%37 Total Liabilities and Net Worth Line 17/Line 13 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.00% 100.00%

Ratio FormulaProfitability Ratios

38 Operating Margin Line 5/Line 2 4.1% 6.8% 4.6% 12.7% 0.8% 1.7% 30.8% (8) 2.9% 9.7% 1.8% 8.1% 3.9% 7.6% 3.9% 0.4% 5.15% -1.9%Liquidity/Solvency Ratios

39 Current Ratio Line 11/Line 14 2.12 0.45 0.26 (8) 1.37 0.63 3.37 (8) 1.00 1.10 6.11 (8) 1.59 3.64 (8) 2.18 1.29 1.55 1.20 1.24 1.2640 Working Capital/Revenue Line 22/Line 2 12.17% -16.66% (7) -67.60% (7) 5.75% -19.36% (7) 29.12% (8) -0.10% (7) 2.24% 31.13% (8) 7.26% 25.96% (8) 14.41% 8.59% 7.60% 3.40% 9.75% 4.07%

Operating Efficiency and Activity Ratios41 Days in Accounts Receivable Line 10/(Line 2/365) 66.48 34.68 (8) 63.83 52.27 82.13 97.55 (8) 64.62 66.65 73.81 57.88 94.71 (8) 62.26 56.65 28.00 (8) 67.6 66.26 68.8442 Total Asset Turnover Line 2/Line 13 2.74 2.31 1.02 (8) 1.63 1.17 1.64 0.76 (8) 3.19 (8) 1.99 4.06 (8) 1.73 1.99 0.73 (8) 2.23 2.40 1.95 3.4143 Capital Expenditures/Revenue Line 23/Line 2 2.89% 12.18% (8) 5.57% 11.76% (8) 1.93% 0.73% 9.13% (8) 0.07% 0.53% 0.06% 1.27% 1.29% 1.28% 3.50% N/A 1.99% 2.20%44 Depreciation & Amortization/Revenue Line 21/Line 2 2.03% 3.12% 3.67% 10.63% (8) 5.26% 1.93% 9.33% (8) 0.64% 1.45% 0.56% 1.79% 3.45% 3.61% 2.40% 1.30% 2.82% 1.88%

Leverage Ratios45 Debt Ratio Line 15/Line 13 0.71 0.93 (8) 0.96 (8) 0.65 0.77 0.26 (8) 0.31 (8) 0.78 0.12 (8) 0.50 0.20 (8) 0.53 0.85 0.55 0.77 0.62 0.9046 Interest-Bearing Debt/Total Capitalization Line 16/(Line 16+Line 18 57.62% 88.65% (8) 95.00% (8) 54.74% 64.08% 0.00% (8) 23.20% 72.60% 0.00% (8) 3.78% (8) 0.61% (8) 38.36% 82.61% (8) 39.36% 44.44% 49.88% 82.24%

Notes:1 The VALUATOR's weighting of the benchmark companies based upon similarity to SUBJECT ENTITY (specialty, services, size, etc.).2 Source: 10-K and 10-Q of Public Companies (sec.gov)3 Source: Integra Information, Inc. Combined 2001 financial operations of eight (8) Home Health Care Services companies with annual revenue of $100,000,000-$249,999,999 (SIC - 8082).4 Source: Risk Management Associates "Annual Statement Studies 2001-2002" - Combined median 3/31/01 financial operations of 36 Home Health Care Services companies with annual revenue of over $25,000,000 (SIC - 8082).5 Weighted average of Columns A - P, based on weighting in Line 1.6 Income Statement source - Schedule 1, Page 1 of 5 and balance sheet source - Schedule 2.7 Ratios with resulting in negative values or were extreme outliers were not included in the analysis.8 The VAULATOR did not utilize ratios outside of one (1) standard deviation of the mean of ratios calculated.9 Extraordinary and nonrecurring expenses (e.g.,, asset impairment, restructuring, legal settlements, loss/gain on sale of asset) were excluded from operating and other expenses.

P Q R

SUBJECT ENTITY (6)

3/31/2001 12/31/2001

Industry Average (5)

SUBJECT ENTITY (6)

12/31/2001

RMA - SIC 8082 (4)

RMA - SIC 8082 (4)


Integra Information -SIC 8082 (3)

12/31/2001 12/31/2001 12/31/2001

Pediatric Services of America, Inc.Lincare Holdings, Inc.

Transworld Healthcare, Inc.

National Home Health Care Corp.

Mid-Atlantic Home Health Network, Inc.

Apria Healthcare Group, Inc.

Coram Healthcare Corporation

Gentiva Health Services, Inc.

New York Health Care, Inc.

K

Option Care, Inc. (2)1

Option Care, Inc.

12/31/2001

J

New York Health Care, Inc. (2)

1

E

14

Gentiva Health Services, Inc. (2)

4

12/31/2001 12/31/2001 12/31/2001 12/31/200110/31/200112/31/2001 2001 Data

RMA - SIC 8082 (4)Lincare Holdings, Inc.

New York Health Care, Inc. Option Care, Inc.

Mid-Atlantic Home Health Network, Inc.


3/31/200112/31/2001 2001 Data12/31/2001 12/31/2001 12/31/2001 12/31/200122

N

Transworld Healthcare, Inc. (2)


SUBJECT ENTITY (6)

OD

Apria Healthcare Group, Inc. (2)

F L

of America, Inc. (2)

I

Health Care Corp. (2)

HG

Lincare Holdings, Inc. (2)


Coram Healthcare Corporation


Gentiva Health Services, Inc.


12/31/2001

Coram Healthcare Corporation (2)

2

A B C

Amedisys, Inc. (2)5

American Homepatient,Inc. (2)

5

Amedisys, Inc.American Homepatient,

Inc.

Almost Family, Inc.12/31/2001 12/31/2001 12/31/2001

Amedisys, Inc.American Homepatient,

Inc.

Almost Family, Inc. (2)

12/31/2001

Almost Family, Inc.

2

Transworld Healthcare, Inc.

12/31/2001

412/31/2001

Pediatric Services of America, Inc.

412/31/2001

Health Network, Inc. (2)1

12/31/20015

10/31/2001

M:\Chartwell - Irell & Manella\Financial\cmsize 21 Chartwell.xls\(Benchmark Data) ©HEALTH CAPITAL CONSULTANTS

Addus Healthcare, Inc. Schedule 4Analysis/Projection of Revenue

A B C D E F G H

Notes 1999 2000 2001PAY 1

ProjectedPAY 2

ProjectedPAY 3

ProjectedPAY 4

ProjectedPAY 5

Projected1 Total Revenue (1) $156,143,575 $210,424,296 $234,070,611 $245,633,699 $257,768,004 $267,949,840 $281,347,332 $295,527,2382 Increase/Decrease in Reimbursement (2) -1.00% -1.00% -1.00% 0.00% 1.00%3 Annual Increase in Utilization Demand and Market Share (3) 6.00% 6.00% 5.00% 5.00% 4.00%4 Total Percentage Increase/Decrease in Net Revenue (4) N/A 34.76% 11.24% 4.94% 4.94% 3.95% 5.00% 5.04%

Notes:PAY = Post Acquisition Year

1 Columns A - C represent the SUBJECT ENTITY's historical net revenue. Columns D - H project the SUBJECT ENTITY's net revenue based upon project growth in Line 4.2 Assumed annual increase (decrease) in price charges per unit.3 Assumed annual increase/decrease in SUBJECT ENTITY's in the number of cases based upon increase in outpatient care utilization; an aging population; and, market share against increasing competitive risk.4 Calculated percentage increase/decrease in net revenue from combination of Lines 2 and 3.

M:\Chartwell - Irell & Manella\Financial\cmsize 21 Chartwell.xls\(Revenue) ©HEALTH CAPITAL CONSULTANTS

Addus Healthcare, Inc. Schedule 5Analysis of Normalized Expenses

A B C D1 Period 2001 2000 19992 Weight (1) 50% 30% 20%3 Cost of Sales (2) 75.93% 74.27% 73.71% 74.99%4 Operating Expense (3) 26.02% 22.74% 22.75% 24.38%5 Total Cost of Sales and Operating Expense (4) 101.95% 97.01% 96.46% 99.37%6 Other Expense (5) 0.04% 0.01% -0.06% 0.011%7 Depreciation and Amortization (6) 1.88% 2.47% 2.61% 2.20%

Notes:1 The VALUATOR's weighting of the historical periods.2 The SUBJECT ENTITY's cost of sales (as a percentage of net revenue). See Schedule 1, Line 3.3 The SUBJECT ENTITY's operating expense (as a percentage of net revenue). See Schedule 1, Line 8.4 The total of Lines 3 and 4.5 The SUBJECT ENTITY's other expenses (as a percentage of net revenue). See Schedule 1, Line 12.6 The SUBJECT ENTITY's depreciation and amortization (as a percentage of net revenue). 7 Weighted average of historical periods (Columns A - C) based on weighting in Line 2.

CONFIDENTIAL PRELIMINARY DRAFTCALCULATIONS FOR DISCUSSION PURPOSES ONLY

NOT A CONCLUSION OR OPINION OF VALUEPREPARED AT THE REQUEST OF COUNSEL

SUBJECT TO ATTORNEY CLIENT PRIVILEGE

Weighted Average (7)

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Addus Healthcare, Inc. Schedule 6Projected Income Statements

REVENUES Notes1 NET REVENUE (4) $210,424,296 100.0% $210,424,296 100.0% $234,070,611 100% $245,633,699 100% $257,768,004 100% $267,949,840 100% $281,347,332 100% $295,527,238 100%2 Percentage Increase in Net Revenue (5) 11.24% 4.94% 4.94% 3.95% 5.00% 5.04%

COST OF SALES/OPERATING EXPENSES3 TOTAL COST OF SALES/OPERATING EXPENSES (6) $204,136,999 97.0% $204,136,999 97.0% $238,632,720 ###### $236,689,697 96.4% $248,382,168 96.4% $258,193,264 96.4% $271,102,927 96.4% $284,766,514 96.4%

4 OPERATING INCOME (7) $6,287,297 3.0% $6,287,297 3.0% ($4,562,109) -1.9% $8,944,002 3.6% $9,385,836 3.6% $9,756,577 3.6% $10,244,405 3.6% $10,760,723 3.6%

OTHER EXPENSES5 TOTAL OTHER EXPENSES (8) $3,032,907 1.4% $16,504 0.0% $98,319 0.0% $26,063 0.0% $27,351 0.0% $28,431 0.0% $29,852 0.0% $31,357 0.0%

6 INCOME BEFORE TAXES (9) $3,254,390 1.5% $6,270,793 3.0% ($4,660,428) -2.0% $8,917,939 3.6% $9,358,485 3.6% $9,728,146 3.6% $10,214,553 3.6% $10,729,366 3.6%7 Less Income Taxes (10) ($3,314,620) ($3,478,362) ($3,615,757) ($3,796,545) ($3,990,034)8 NET INCOME AFTER TAXES $5,603,320 $5,880,124 $6,112,388 $6,418,008 $6,739,332

Notes:PAY = Post Acquisition Year

1 See Schedule 1, Page 3 of 5.2 See Schedule 1, Page 2 of 5.3 See Schedule 1, Page 1 of 5.4 Projected Net Revenue of the SUBJECT ENTITY (See Schedule 4).5 Percentage increase in net revenue from previous year.6 Cost of Sales/Operating Expense projection is based on weighted average of the SUBJECT ENTITY's 1999-2001 weighted average performance (given 33% weight of consideration) of 99.37% of net revenue (See Schedule 5, Line 5) and the industry

average "cost of sales/operating expense" performance (given 67% weight of consideration) of 94.85% (See Schedule 3, Column Q, Line 27), equalling 96.36% of net revenue.7 Line 1 less Line 3.8 Other Expense projection is based on the SUBJECT ENTITY's 1999-2001 weighted average performance of 0.01061% of net revenue (See Schedule 5, Line 6).9 Line 4 less Line 5.10 Federal Tax Source: CCH U.S. Master Tax Guide. 2001 Illinois State Tax Source: www.taxadmin.org/fta/rate/corp_inc.html (4.80%).

A

1999 (1)

1999 (1)

2000 (2) 2001 (3)PAY 1 Projected

(1/01/02 -12/31/02)PAY 2 Projected

(1/1/03 - 12/31/03)PAY 3 Projected

(1/01/04-12/31/04)PAY 4 Projected

(1/01/05 - 12/31/05)PAY 5 Projected

(1/01/06 - 12/31/06)

2000 (2) 2001 (3) PAY 1 Projected PAY 2 Projected PAY 3 Projected PAY 4 Projected PAY 5 Projected

F G HB C ED

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Addus Healthcare, Inc. Schedule 7Calculation of Projected Economic Net Cash Flow

A B C D E F G2001 (1) Notes PAY 1 Projected PAY 2 Projected PAY 3 Projected PAY 4 Projected PAY 5 Projected

1 Net Revenues $234,070,611 (2) $245,633,699 $257,768,004 $267,949,840 $281,347,332 $295,527,2382 Less: Cost of Sales/Operating Expenses ($238,632,720) (3) ($236,689,697) ($248,382,168) ($258,193,264) ($271,102,927) ($284,766,514)3 Operating Profit ($4,562,109) Line 1 less Line 2 $8,944,002 $9,385,836 $9,756,577 $10,244,405 $10,760,7234 Other Expenses ($98,319) (4) ($26,063) ($27,351) ($28,431) ($29,852) ($31,357)5 Net Income before Taxes ($4,660,428) Line 3 less Line 4 $8,917,939 $9,358,485 $9,728,146 $10,214,553 $10,729,3666 Less: Income Taxes (5) ($3,314,620) ($3,478,362) ($3,615,757) ($3,796,545) ($3,990,034)7 Net Income after Taxes Line 5 less Line 6 $5,603,320 $5,880,124 $6,112,388 $6,418,008 $6,739,3328 Effective Tax Rate (6) 37.2% 37.2% 37.2% 37.2% 37.2%

9 Cash Flow from Operating Activities10 Net Income after Taxes Equals Line 7 $5,603,320 $5,880,124 $6,112,388 $6,418,008 $6,739,33211 + Depreciation and Amortization (7) $6,415,827 $6,732,769 $6,998,713 $7,348,649 $7,719,02112 - Increase in Working Capital Needs (8) ($9,779,156) ($953,436) ($800,023) ($1,052,689) ($1,114,166)13 - Increase in Capital Expenditures (9) ($5,052,055) ($5,301,627) ($5,511,041) ($5,786,593) ($6,078,237)14 + Increase in Long Term Debt (10) N/A N/A N/A N/A N/A

15 Net Cash Flow Sum of Lines 10 - 14 ($2,812,064) $6,357,831 $6,800,038 $6,927,375 $7,265,950

16 Average Effective Tax Rate (11) 37.2%

Notes:"PAY" = Post Acquisition Year

1 12/31/01 financials from Schedule 1, Page 1 of 52 See Schedule 6, Line 1.3 See Schedule 6, Line 3.4 See Schedule 6, Line 5.5 See Schedule 6, Line 7.6 Federal Tax Source: CCH U.S. Master Tax Guide. 2001 Illinois State Tax Source: www.taxadmin.org/fta/rate/corp_inc.html (4.80%). 7 Depreciation and Amortization projection is based on weighted average of the SUBJECT ENTITY's 1999-2001 weighted average performance (given 33% weight of consideration) of 2.20% of net revenue (See Schedule 5, Line 7) and the

the industy average "depreciation and amortization expense" performance (given 67% weight of consideration) of 2.82% (See Schedule 3, Column Q, Line 44), equalling 2.61% of net revenue.8 For purposes of this analysis, beginning working capital is calculated as current assets less current liabilities ($9,521,159). It was assumed that the SUBJECT ENTITY would achieve the weighted average working capital

of the industry (9.75% of net revenue - weighted 67%) and the SUBJECT ENTITY's 2001 performace (4.07% - weighted 33%), totalling 7.86% of net revenue.

12/31/2001 PAY 1 PAY 2 PAY 3 PAY 4 PAY 5a. Working Capital Requirements $9,521,159 $19,300,315 $20,253,750 $21,053,773 $22,106,462 $23,220,628b. Working Capital Requirements (as a % of Net Revenue) 4.07% 7.86% 7.86% 7.86% 7.86% 7.86%c. Percentage Increase/(Decrease) in Working Capital 102.71% 4.94% 3.95% 5.00% 5.04%d. Percentage Increase/(Decrease) in Net Revenue 4.94% 4.94% 3.95% 5.00% 5.04%

9 Capital expenditures projection is based on weighted average of the SUBJECT ENTITY's 2001 performance (given 33% weight of consideration) of 2.20% of net revenue (See Schedule 3, Line 43) and thethe industy average "capital expenditure expense" performance (given 67% weight of consideration) of 1.99% (See Schedule 3, Column Q, Line 43), equalling 2.06% of net revenue.

10 The VALUATOR utilized a debt-free approach. Therefore, the effect of cash flows affected by changes in long-term interest-bearing debt was adjusted out.11 Average of Effective Tax Rate (Line 8)

M:\Chartwell - Irell & Manella\Financial\cmsize 21 Chartwell.xls\NCF Projection ©HEALTH CAPITAL CONSULTANTS

Addus Healthcare, Inc. Schedule 8Discounted Net Cash Flow Method

12/31/2001 Notes PAY 1 PAY 2 PAY 3 PAY 4 PAY 51 Net Revenues $234,070,611 (1) $245,633,699 $257,768,004 $267,949,840 $281,347,332 $295,527,2382 Less: Cost of Sales/Operating Expenses ($238,632,720) (2) ($236,689,697) ($248,382,168) ($258,193,264) ($271,102,927) ($284,766,514)3 Operating Profit ($4,562,109) Line 1 less Line 2 $8,944,002 $9,385,836 $9,756,577 $10,244,405 $10,760,7234 Other Expenses ($98,319) (3) ($26,063) ($27,351) ($28,431) ($29,852) ($31,357)5 Net Income before Taxes ($4,660,428) Line 3 less Line 4 $8,917,939 $9,358,485 $9,728,146 $10,214,553 $10,729,3666 Less: Income Taxes (4) ($3,314,620) ($3,478,362) ($3,615,757) ($3,796,545) ($3,990,034)7 Net Income after Taxes Line 5 less Line 6 $5,603,320 $5,880,124 $6,112,388 $6,418,008 $6,739,332

8 Cash Flow from Operating Activities9 Net Income after Taxes Equals Line 7 $5,603,320 $5,880,124 $6,112,388 $6,418,008 $6,739,332

10 + Depreciation and Amortization (5) $6,415,827 $6,732,769 $6,998,713 $7,348,649 $7,719,02111 - Increase in Working Capital Needs (6) ($9,779,156) ($953,436) ($800,023) ($1,052,689) ($1,114,166)12 - Increase in Capital Expenditures (7) ($5,052,055) ($5,301,627) ($5,511,041) ($5,786,593) ($6,078,237)13 + Increase in Long Term Debt (8) N/A N/A N/A N/A N/A

14 Net Cash Flow Sum of Lines 9 - 13 ($2,812,064) $6,357,831 $6,800,038 $6,927,375 $7,265,950 $7,556,588 (9)

15 Present Value of Cash Flows @ 14.32 % (WACC - See Section 5.13) ($2,630,058) $5,201,508 $4,866,445 $4,336,600 $3,978,81116 Sum of Present Value of Projection Period Cash Flows (PAY 1 through PAY 5) $15,753,30617 Present Value of Residual Cash Flows capitalized @ 10.32 % and discounted @ 14.32 % (See Section 5.13) $40,099,00418 Indicated Total Present Fair Market Value of the 100% interest in the Total Invested Capital of SUBJECT ENTITY before discounts and premiums $55,852,31019 Less Interest-Bearing Debt ($31,471,841)20 Indicated Total Present Fair Market Value of the 100% interest in the Equity of SUBJECT ENTITY before discounts and premiums $24,380,46921 Plus Control Premium (10%) $2,438,04722 Less Discount for Lack of Marketability (30%) ($8,045,555)23 Total Present Fair Market Value of the 100% Interest in the Equity of SUBJECT ENTITY $18,772,961

Notes:"PAY" = Post Acquisition Year

1 See Schedule 6, Line 1.2 See Schedule 6, Line 3.3 See Schedule 6, Line 5.4 See Schedule 6, Line 7.5 See Schedule 7, Line 11.6 See Schedule 7, Line 12.7 See Schedule 7, Line 13.8 See Schedule 7, Line 14.9 Increase of 4% (long-term growth) from PAY 5.

Terminal Period

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Addus Healthcare, Inc. Schedule 9Analysis of Normalized EBITDA and Operating Margin

Table A - EBITDA (1)A B C D

1 Period (2) 2001 2000 19992 Weight (3) 50% 30% 20%3 Almost Family, Inc. 6.11% 7.12% 5.41% 6.27%4 Amedisys, Inc. 9.90% 0.35% 0.45% 5.14%5 American Homepatient, Inc. 8.29% 12.52% 7.76% 9.45%6 Apria Healthcare Group, Inc. 23.28% 24.26% 23.46% 23.61%7 Coram Healthcare Corporation 6.06% 7.76% 0.06% 5.37%8 Gentiva Health Services, Inc. 3.60% -6.54% 1.97% 0.23%9 Lincare Holdings, Inc. 40.15% 38.79% 38.78% 39.47%

10 Mid-Atlantic Home Health Network, Inc. 3.50% 5.85% 5.81% 4.66%11 National Home Health Care Corp. 11.13% 9.67% 7.64% 9.99%12 New York Health Care, Inc. 2.40% 2.75% 0.77% 2.18%13 Option Care, Inc. 9.88% 11.40% 10.01% 10.36%14 Pediatric Services of America, Inc. 7.39% 5.41% -3.52% 4.62%15 Transworld Healthcare, Inc. 11.17% 0.46% 2.97% 6.32%16 SUBJECT ENTITY (4) -0.07% 5.46% 6.15% 2.83%

Table B - Operating Margin (6)A B C D

17 Period (7) 2001 2000 199918 Weight (8) 50% 30% 20%19 Almost Family, Inc. 4.08% 4.95% 3.31% 4.19%20 Amedisys, Inc. 6.77% -2.91% -2.69% 1.98%21 American Homepatient, Inc. 4.62% 2.30% -3.34% 2.33%22 Apria Healthcare Group, Inc. 12.65% 13.63% 12.31% 12.88%23 Coram Healthcare Corporation 0.80% 2.76% -4.53% 0.33%24 Gentiva Health Services, Inc, 1.67% -8.64% -0.28% -1.81%25 Lincare Holdings, Inc. 30.82% 29.19% 28.96% 29.96%26 Mid-Atlantic Home Health Network, Inc. 2.86% 5.48% 5.44% 4.16%27 National Home Health Care Corp. 9.68% 8.14% 5.80% 8.44%28 New York Health Care, Inc. 1.84% 1.97% -0.34% 1.45%29 Option Care, Inc. 8.09% 9.25% 7.71% 8.36%30 Pediatric Services of America, Inc. 3.95% 1.13% -7.77% 0.76%31 Transworld Healthcare, Inc. 7.56% -4.46% -1.54% 2.13%32 SUBJECT ENTITY (9) -1.95% 2.99% 3.54% 0.63%33 Percentile of SUBJECT ENTITY to Guideline Companies 0.50% (11) 14.20% (12)

Notes:1 The historical EBITDA of each of the guideline companies and the SUBJECT ENTITY.2 The most recent 12-month period of operations.3 The VALUATOR's weighting of the historical periods of companies' EBITDA.4 The SUBJECT ENTITY's historical EBITDA (as a percentage of net revenue (See Schedule 1, Line 14).5 Weighted average of historical periods *Columns A - C) based on weighting in Line 2.6 The historical Operating Margin of each of the guideline companies and the SUBJECT ENTITY.7 The most recent 12-month period of operations.8 The VALUATOR's weighting of the historical periods of companies' operating margin.9 The SUBJECT ENTITY's historical operating margin (as a percentage of net revenue (See Schedule 1, Line 9).

10 Weighted average of historical periods *Columns A - C) based on weighting in Line 18.11 The lowest one-half (1/2) of the first percentile of selected MVIC/Revenue ratios was selected because both the SUBJECT ENTITY's actual 2001 operating

operating margin (-1.95%) and normalized operating margin (0.63%) were below the range of the guideline companies' 2001 operating margins (Column A, Lines 19 - 31). 12 Calculated as the percentile of the SUBJECT ENTITY's 3-year weighted operating margin (0.63%) compared to the 3-year weighted operating

margins of the guideline companies (Column D, Lines 19 - 31).



M:\Chartwell - Irell & Manella\Financial\cmsize 21 Chartwell.xls\(EBITDA) ©HEALTH CAPITAL CONSULTANTS

Addus Healthcare, Inc. Schedule 10Guideline Company Valuation Method - As of 1/8/02

A B C E F H I J K L M N

Share Weighted Weighted

Guideline Companies Ticker Price as of Net Revenue EBITDA (1) Operating Weight Outstanding MVIC to MVIC to MVIC to MVIC to(Publicly Traded) Symbol 1/8/2002 Margin Shares Revenue Revenue EBITDA EBITDA

1 Almost Family, Inc. AFAM $16.10 $98,265,363 $6,164,953 4.1% 2 3,317,874 0.69 0.035 10.95 0.56

2 Amedisys, Inc. AMED $6.90 $110,174,000 $5,666,688 6.8% 5 7,178,152 0.68 0.088 13.30 1.71

3 American Homepatient, Inc. AHOM $0.84 $352,584,000 $33,332,959 4.6% 5 16,327,000 0.84 0.108 8.90 1.14

4 Apria Healthcare Group, Inc. AHG $22.96 $1,131,915,000 $267,289,593 12.7% 2 54,604,167 1.37 0.070 5.79 0.30

5 Coram Healthcare Corporation CRHEQ $0.53 $393,629,000 $21,143,514 0.8% 4 49,638,000 0.42 0.043 7.84 0.80

6 Gentiva Health Services, Inc, GTIV $23.20 $1,377,687,000 $3,178,994 1.7% 4 25,638,794 0.43 0.044 187.11 19.19

7 Lincare Holdings, Inc. LNCR $28.34 $812,442,000 $320,661,533 30.8% 1 107,743,762 4.03 N/A 10.22 0.26

8 Mid-Atlantic Home Health Network, Inc. MAHN $0.32 $28,336,732 $1,321,646 2.9% 1 12,105,142 0.32 0.008 6.88 0.18

9 National Home Health Care Corp. NHHC $12.60 $77,248,000 $7,718,305 9.7% 5 5,267,644 0.86 0.110 8.60 1.10

10 New York Health Care, Inc. BBAL $3.20 $34,320,710 $748,559 1.8% 1 3,696,730 0.35 0.009 16.03 0.41

11 Option Care, Inc. OPTN $19.05 $217,133,000 $22,503,826 8.1% 1 16,037,024 1.41 0.036 13.60 0.35

12 Pediatric Services of America, Inc. PSAI $9.68 $187,668,714 $8,664,200 3.9% 4 6,713,000 0.49 0.050 10.66 1.09

13 Transworld Healthcare, Inc. AHCI $3.36 $178,747,000 $11,290,734 7.6% 4 17,555,000 1.32 0.135 20.91 2.14

Statistical AnalysisMVIC/Revenue Ratio MVIC/EBITDA Ratio

14 Arithmetic Mean MVIC/Revenue Ratio 1.02 Arithmetic Mean MVIC/EBITDA Ratio 24.6815 Weighted Mean MVIC/Revenue Ratio 0.84 Weighted Mean MVIC/EBITDA Ratio 29.24

16 Median MVIC/Revenue Ratio 0.69 Median MVIC/EBITDA Ratio 10.66

17 High MVIC/Revenue Ratio 4.03 High MVIC/EBITDA Ratio 187.11

18 Low MVIC/Revenue Ratio 0.32 Low MVIC/EBITDA Ratio 5.7919 Upper Quartile MVIC/Revenue Ratio 1.32 Upper Quartile MVIC/EBITDA Ratio 13.6020 Lower Quartile MVIC/Revenue Ratio 0.43 Lower Quartile MVIC/EBITDA Ratio 8.6021 Percentile Value Multiple Ratio (2) 0.32 Percentile Value Multiple Ratio (3) 7.56

22 MVIC/Revenue technique Selected Ratio (4) 0.32 MVIC/EBITDA technique Selected Ratio (4) 7.56

23 Net Revenue EBITDA24 $234,070,611 (7) $6,634,607 (8)25 Indicated Debt-free Value of MVIC (5) $75,531,942 Indicated Debt-free Value of MVIC (4) $50,148,55826 Weight of Methods (6) 0.60 Weight of Methods (7) 0.40

27 Indicated Debt-free Value of MVIC (5) $65,378,588 (9)28 Less Interest-Bearing Debt ($31,471,841) (10)29 Indicated Value of Equity before premiums and discounts $33,906,747 (11)30 Plus Control Premium (10%) $3,390,675 (12)31 Less Discount for Marketability (30%) ($11,189,227) (13)32 Total Fair Market Value of the 100% Total Invested Capital of SUBJECT INTEREST $26,108,195 (14)

Notes by Column: Notes: By Footnote NumberC Share Price as of 1/8/02. Source: www.bigcharts.com 1 Negative EBITDA values was given a MVIC/EBITDA of zero ($0).D Period ending date of guideline public company data utilized in columns E, F, G and J. 2 Calculated as the lowest 1/2 of the first percentile of selected MVIC/Revenue ratios. Both the SUBJECT ENTITY's actual 2001 operating E Total Net Revenues for 12-month period ending in column D margin (-1.95%) and the normalized operating margin (0.63%) was below the range of the guideline companies' 2001 operating marginsF Historical 3-year normalized earnings before interest, taxes, depreciation and amortization (See Schedule 9, Column D) multiplied by (See Schedule 9, Table B, Column A).

2001 Revenue (Column E). 3 Calculated as the 14.20 percentile of selected MVIC/EBITDA ratios. The SUBJECT ENTITY's 3-year weighted operating margin (0.63%) was G Market Value of Invested Capital (MVIC) is calculated as market value of the common equity (Column C, x Column J) plus preferred the 14.20 percentile of selected company 3-year weighted operating margins (See Schedule 9, Table B, Column D).

equity (Schedule 3, Line 17 plus interest-bearing debt (Schedule 3, Line 16). 4 The percentile value of the MVIC/Revenue ratio and MVIC/EBITDA ratio (Line 21) was selected by the VALUATOR.H 2001 operating margin of each public company (See Schedule 3, Line 38). 5 Indicated value derived on a debt-free basis (TIC = Equity + Debt). Calulated by multiplying the selected I The VALUATOR's weighting of guideline companies based upon their similarity to the SUBJECT ENTITY, e.g., revenue size, scope of services, etc. ratio in (Line 22) by the SUBJECT ENTITY's level of ownership benefit (Line 24).J The number of outstanding common shares as of the date in column D. 6 The VALUATOR's weighting of the techniques based upon their applicability to the valuation engagement.K Calculated as Column G divided by Column E. 7 The SUBJECT ENTITY's 2001 Net Revenue (See Schedule 1, Page 1 of 5, Column C Line 2).L Calculated' as Column K 'weighted' by weighting assigned in Column I. 8 The SUBJECT ENTITY's Normalized Earnings Before Interest Taxes Depreciation and Amortization of 2.83% of net revenue (SeeM Calculated as Column G divided by Column F. Schedule 9, Line 16) multiplied by 2004 Net Revenue of $234,070,611.N Calculated' as Column K 'weighted' by weighting assigned in Column I. 9 Calculated as the indicated values in Line 25 weighted by weighting assigned in Line 26.

10 The interest-bearing debt of the SUBJECT ENTITY as of the VALUATION DATE (See Schedule 2, Line 34).11 Indicated value derived on a net-of debt basis (Assets-Debt=Equity). Calulated by subtracting interest-bearing debt (Line 28) from

the debt-free (Asset) value (Line 27).12 Application of a 10% control premium.13 Application of a 30% discount for lack of marketability.14 Value of the 100% interest in the shares (equity) of the SUBJECT ENTITY. (Line 29 plus Line 30 less Line 31)

D G

Market Value ofTotal Invested

Period Ending for Guideline

12/31/2001

12/31/2001

12/31/2001

12/31/2001

10/31/2001

12/31/2001

12/31/2001

Capital (MVIC)

SUBJECT ENTITY

Co. Data

SUBJECT ENTITY

12/31/2001

12/31/200112/31/2001

12/31/2001

12/31/2001

12/31/2001 $165,818,140

$594,820,021

$3,276,722,215

$67,533,326$75,379,249

$296,524,680

$1,547,400,674

$92,367,840$236,124,800

$9,095,145

$66,372,314

$12,000,847

$306,123,307

M:\Chartwell - Irell & Manella\Financial\cmsize 21 Chartwell.xls\(Guideline Public Co. Method) ©HEALTH CAPITAL CONSULTANTS

Addus Healthcare, Inc. Schedule 11Direct Market Comparable Transaction Method - As of 1/8/02

A B C F G H I JPrice/

Revenues Purchase Adjusted Terms Revenue

Target Company Purchasing Entity Date Price Purchase Price Multiple

1 United Medical, Inc. Lincare Holdings, Inc. June-00 $60,000,000 $120,951,000 $119,451,000 $115.951 million in cash at closing; $5 million six months later 1.99

2 In Home Health, Inc. Manor Care, Inc. September-00 $87,000,000 $11,800,000 $19,865,320 For 59.4% interest 0.23

3 Southern Therapy, Inc. Airtech International Group November-00 $14,000,000 $2,000,000 $2,000,000 0.14

4 Aays Health Care Equipment, Inc. Interwest Home Medical, Inc. November-00 $1,600,000 $1,630,000 $1,630,000Terms not disclosed. Acquisition of property, equipment and goodwill of Aays Medical with three locations in Arizona. 1.02

5 Comprehensive Home Care, Inc. January-01 $700,000 $322,500 $322,500 0.46

6 Carepoint Health Services, Inc.Continental Home Healthcare Ltd. January-01 $3,400,000 $2,300,000 $1,955,000 Notes and assumption of accounts payable and equipment leases 0.58

7 Health Care Options Business Option Care, Inc. January-01

8 Professional Home Health Services Option Care, Inc. February-01

9 Seton Home Health Services AMEDISYS,Inc. March-01 $12,000,000 $2,800,000 $2,800,000 Cash 0.23

10 Interwest Home Medical, Inc. Praxair Distribution, Inc. March-01 $43,300,000 $57,505,000 $57,505,000 $42.05 million for IWHM's equity; assumption of debt 1.33

11 Medical MartContinental Home Healthcare Ltd. June-01 $1,400,000 $180,000 $180,000 Assumption of debt 0.13

Statistical Analysis

Price/Revenue Ratio (1)

12 Arithmetic Mean Price/Revenue Ratio 0.48

13 Median Price/Revenue Ratio 0.23

14 High Price/Revenue Ratio 1.33

15 Low Price/Revenue Ratio 0.13

16 Upper Quartile Price/Revenue Ratio 0.58

17 Lower Quartile Price/Revenue Ratio 0.20

18 Price/Revenue technique Selected Ratio 0.23 (2)

19 Net Revenue

20 $234,070,611 (3)

21 Indicated Debt-free Value of Total Invested Capital $54,616,476 (4)

22 Less Interest-Bearing Debt ($31,471,841) (5)

23 Indicated Value of Equity before applicable discounts $23,144,635 (6)

24 Less Discount for Marketability (10%) ($2,314,463) (7)

25 Total Fair Market Value of the 100% Interest in the Equity of the SUBJECT ENTITY $20,830,171 (8)

Notes by Column: Notes by Footnote Number:A Target Company (Selling Entity) 1 The VAULATOR did not utilize Price/Revenue ratios outside of two (2) standard deviation (1.19) of the mean of all B Purchasing Entity (Acquirer) Price/Revenue ratios (0.63), or any ratios above 1.82 or below -0.56; therefore, the transaction involving UnitedC Date of Transaction Medical, Inc. (Line 1) was excluded brom the Price/Revenue analysis.D Geographic Location of Target Company 2 The median value of the Price/Revenue ratio and Price/EBITDA ratio (Line 17) was selected by the VALUATOR.E Description of Transaction Target Entity 3 The SUBJECT ENTITY's 2001 Net Revenue (See Schedule 1, Page 1 of 5, Column C Line 2).F Net Revenues of Target Company 4 Indicated value derived on a debt-free basis (TIC = Equity + Debt). Calulated by multiplying the selected G Total Purchase price paid by Purchasing Entity ratio in (Line 18) by the SUBJECT ENTITY's level of ownership benefit (Line 20).H The SUBJECT ENTITY is valued on a cash or equivalent basis. The Adjusted Purchase Price is the discounts the purchase price relating to the terms of 5 The interest-bearing debt of the SUBJECT ENTITY as of the VALUATION DATE (See Schedule 2, Line 34).

the transaction. Cash is valued at 100%, Purchase money promissory notes are discounted 30% and stock is restated at PV to reflect a risk adjusted discount rate 6 Indicated value derived on a net-of debt basis (Assets-Debt=Equity). Calulated by subtracting interest-bearing debt (Line 22)for post-transaction holding period (90%). from the debt-free (Asset) value (Line 21).

I Reported terms of the transaction 7 Application of a 10% discount for lack of marketability.J Adjusted Purchase Price (Column G) divided by Revenue of the Target Company (Column F). 8 Value of the 100% interest in the shares (equity) of the SUBJECT ENTITY. (Line 23144634.9 less Line 24)

D E

Target

Description

Target

Location

Wynne, AR

Minnetonka, MN Provides home care services through a network of 39 offices in 20 markets within 15 states.

A regional provider of home respiratory and other medical services and equipment with 42 centers in AL, AR, MS, MO, NC, OK, TN, TX, and VA.

Austin, TX

Peoria, AZProvides home medical equipment and services in Peoria, Cottonwood and Flagstaff, AZ. 80% of revenue comes from respiratory services.

Provider of home medical equipment made primarily to Medicare and private insurance beneficiaries

$15,500,000

South Deerfield, MA

Van Nuys, CA Home medical business

Home Care (SIC Code: 8082 - 0)

Thousand Oaks, CAProfessional Home Health Services is an independent infusion pharmacy and an Option Care franchise

Health Care Options Business is an Option Care, Inc. franchise which specializes in home health and infusion

$3,035,000 $3,035,000

The aggregate cash purchase price paid at closing for these transactions, net of cash acquired, was $1.653 million. An additional $1.168 million was paid immediately subsequent to closing for the liquidation of liabilities assumed under the purchase agreement. The company also paid $214,000 of additional consideration for prior acquisitions.

0.20

Columbus, OH

Mobile, AL

Salt Lake City, UT

Interwest Home Medical (NASDAQ:IWHM) provides home health services in Alaska, Arizona, California, Colorado, Idaho, Nevada and Utah through 25 branches.

Target company was acquired by AMED's Alabama subsidiary. This transaction will add between $12 million and $14 million in annual revenue.

SUBJECT ENTITY

Las Vegas, NVHome medical business specializing in rehabilitation products, and ostomy, urology and wound care products.

M:\Chartwell - Irell & Manella\Financial\cmsize 21 Chartwell.xls\(Mkt Trans) ©HEALTH CAPITAL CONSULTANTS

Schedule 12Page 1 of 2

Fair Market Value Calculation of OPTION INTERESTGuideline Publicly Traded Companies - Historical Closing Prices(1)

A B C D E F G H I J K L M

Company Name

Almost Family, Inc.

Amedisys, Inc.

American Homepatient,

Inc.


Coram Healthcare

Corporation

Gentiva Health

Services, Inc.

Lincare Holdings,

Inc.

National Home

Health Care Corp.

New York Health

Care, Inc.

Option Care, Inc.

Pediatric Services of America,

Inc.

Transworld Healthcare,

Inc.

Date AFAM AMED AHOM AHG CRHEQ GTIV LNCR NHHC BBAL OPTN PSAI AHCI1 13-Feb-02 14.70 7.75 0.42 22.29 0.55 7.23 25.28 10.96 3.60 8.55 12.00 3.902 12-Feb-02 14.85 7.80 0.42 23.62 0.61 7.33 24.86 10.47 3.58 8.90 10.49 3.803 11-Feb-02 15.20 7.88 0.43 23.82 0.61 7.23 27.61 10.46 3.60 8.93 10.40 3.804 8-Feb-02 14.95 7.75 0.46 23.85 0.64 7.26 28.10 10.46 3.62 9.15 10.20 3.855 7-Feb-02 15.10 7.95 0.47 23.45 0.65 7.23 27.12 10.55 3.60 8.89 10.28 3.856 6-Feb-02 15.00 7.60 0.47 23.81 0.65 7.33 26.85 10.46 3.59 8.89 9.95 3.907 5-Feb-02 14.80 7.70 0.53 23.99 0.68 7.39 26.47 10.65 3.48 9.03 10.05 3.858 4-Feb-02 15.48 8.00 0.53 23.56 0.63 7.20 26.02 9.93 3.65 8.91 10.64 3.859 1-Feb-02 x x x x 0.60 x x x x x x x

10 31-Jan-02 15.78 7.30 0.61 24.50 0.57 7.10 26.58 10.27 3.64 9.33 9.55 3.9511 30-Jan-02 14.93 7.00 0.70 24.12 0.55 7.07 26.88 10.27 3.62 9.36 9.00 3.7512 29-Jan-02 14.73 6.82 0.71 24.20 0.52 7.05 26.58 10.14 3.49 9.33 8.50 3.7513 28-Jan-02 14.89 6.80 0.73 24.18 0.66 7.08 26.61 10.27 3.49 9.11 8.95 3.6514 25-Jan-02 15.00 6.70 0.82 24.04 0.68 7.06 26.74 10.23 3.39 9.51 9.00 3.5515 24-Jan-02 15.00 6.80 0.78 24.46 0.68 7.09 27.07 10.50 3.10 9.62 9.05 3.5516 23-Jan-02 15.00 6.55 0.78 24.05 0.66 7.13 27.24 10.74 3.05 9.63 8.75 3.3517 22-Jan-02 15.65 6.55 0.79 23.25 0.72 7.12 27.23 10.59 3.08 9.13 8.50 3.3518 18-Jan-02 15.65 6.60 0.79 23.18 0.60 7.09 27.21 10.98 3.08 8.99 8.70 3.5019 17-Jan-02 14.95 6.55 0.82 23.44 0.57 7.11 28.05 10.82 3.00 8.96 9.05 3.6020 16-Jan-02 15.23 6.35 0.83 24.10 0.51 7.03 28.70 10.93 2.99 9.31 8.74 3.5121 15-Jan-02 15.50 6.35 0.85 24.10 0.50 7.00 28.48 10.94 3.08 9.69 8.50 3.6522 14-Jan-02 15.99 6.45 0.84 23.81 0.51 6.98 28.31 11.11 3.08 9.07 9.34 3.6523 11-Jan-02 15.77 6.60 0.82 23.57 0.50 6.85 28.15 12.04 3.20 9.35 9.53 3.6024 10-Jan-02 16.25 6.40 0.84 23.16 0.52 6.93 28.25 12.14 3.08 9.31 9.57 3.6025 9-Jan-02 16.31 6.18 0.82 22.93 0.51 6.94 28.00 11.97 3.10 10.06 9.80 3.3626 8-Jan-02 16.10 6.90 0.84 22.96 0.53 6.85 28.34 11.77 3.20 10.07 9.68 3.3627 7-Jan-02 16.42 6.80 0.78 22.89 0.58 6.70 28.10 11.13 3.05 10.04 8.95 3.2528 4-Jan-02 16.00 6.82 0.79 23.09 0.60 6.97 28.25 10.48 3.08 10.29 8.54 3.0529 3-Jan-02 15.30 6.94 0.81 23.01 0.60 7.00 28.28 11.21 3.10 10.31 8.53 3.0030 2-Jan-02 15.88 7.05 0.80 24.01 0.53 6.37 28.69 11.63 3.12 10.64 8.40 2.8531 31-Dec-01 15.95 7.00 0.77 24.99 0.60 6.48 28.65 11.63 3.36 10.33 8.36 2.8532 28-Dec-01 15.95 7.01 0.75 24.86 0.55 6.49 28.65 11.79 3.12 10.04 8.50 2.7533 27-Dec-01 15.40 7.00 0.80 25.05 0.47 6.44 28.69 12.84 3.47 10.28 8.25 2.8034 26-Dec-01 15.36 7.00 0.80 24.42 0.40 6.51 28.43 12.84 3.15 10.15 8.00 2.7535 24-Dec-01 15.49 6.85 0.77 24.20 0.40 6.49 28.35 12.75 3.05 9.63 8.08 2.7536 21-Dec-01 15.75 6.90 0.77 23.90 0.26 6.49 27.71 12.75 3.25 8.96 7.98 2.7537 20-Dec-01 15.41 6.92 0.77 23.50 0.18 6.37 27.18 12.88 3.20 8.88 8.00 2.8038 19-Dec-01 15.95 6.80 0.74 23.25 0.18 6.33 27.30 13.14 3.20 8.95 8.02 2.8039 18-Dec-01 16.04 6.90 0.70 22.55 0.18 6.45 27.48 12.93 3.30 8.97 7.90 2.7240 17-Dec-01 16.00 6.80 0.68 22.42 0.18 6.32 26.99 13.07 3.60 9.08 7.85 2.7041 14-Dec-01 16.30 7.00 0.71 22.54 0.19 6.29 26.91 13.53 3.55 8.81 7.82 2.8542 13-Dec-01 15.80 6.84 0.67 22.25 0.20 6.24 26.28 13.07 3.40 8.85 7.70 2.7043 12-Dec-01 15.50 6.90 0.69 22.99 0.18 6.20 25.82 12.93 3.36 8.82 7.70 2.5544 11-Dec-01 15.00 6.60 0.69 23.50 0.19 6.14 26.91 13.34 3.60 8.80 7.70 2.5045 10-Dec-01 15.60 6.86 0.65 23.94 0.21 6.08 27.14 13.45 3.65 8.56 7.85 2.5046 7-Dec-01 16.28 6.85 0.70 23.95 0.21 6.11 27.12 13.48 3.70 8.94 7.95 2.5047 6-Dec-01 16.30 7.03 0.79 23.91 0.21 6.12 27.67 13.28 3.50 8.72 8.01 2.4548 5-Dec-01 14.70 7.00 0.80 24.16 0.20 6.14 29.59 12.70 3.50 8.64 8.12 2.5049 4-Dec-01 15.00 7.00 0.64 24.09 0.20 6.01 29.40 16.15 3.33 9.15 8.05 2.7550 3-Dec-01 15.20 7.10 0.78 23.92 0.20 5.94 29.05 15.69 3.22 9.09 7.95 2.7051 30-Nov-01 14.20 6.98 0.80 24.06 0.24 6.03 29.72 15.22 3.49 8.99 7.96 2.8452 29-Nov-01 13.97 6.95 0.82 24.87 0.24 5.92 30.31 14.60 3.44 8.46 7.70 2.7053 28-Nov-01 14.12 6.81 0.78 24.27 0.22 5.89 29.80 14.28 3.47 8.53 7.70 2.6054 27-Nov-01 14.12 6.85 0.80 23.76 0.21 5.84 29.90 14.18 3.56 7.92 7.79 2.5055 26-Nov-01 13.81 6.85 0.80 24.37 0.20 5.80 29.68 14.18 3.77 7.68 7.80 2.4056 23-Nov-01 14.15 6.90 0.85 23.61 0.20 5.78 29.02 14.18 3.88 7.83 7.35 2.4557 21-Nov-01 14.20 7.05 0.85 23.50 0.20 5.68 28.42 14.66 3.88 7.62 7.30 2.4558 20-Nov-01 14.10 7.00 0.85 23.58 0.21 5.59 27.89 13.26 3.88 7.62 7.50 2.4059 19-Nov-01 14.25 7.00 0.85 22.60 0.21 5.53 27.38 12.89 3.90 7.97 7.30 2.5060 16-Nov-01 14.25 7.00 0.83 22.80 0.20 5.39 27.30 12.62 3.97 7.66 7.30 2.5061 15-Nov-01 14.00 7.05 0.87 21.95 0.24 5.52 28.00 12.54 3.75 7.96 7.25 2.5062 14-Nov-01 13.90 6.95 0.81 22.25 0.20 5.58 27.97 12.51 3.83 7.43 7.35 2.5063 13-Nov-01 13.90 7.10 0.80 22.58 0.22 5.37 28.45 13.19 3.82 7.63 7.30 2.6064 12-Nov-01 14.00 7.00 0.80 22.35 0.19 5.07 27.80 13.12 3.91 7.77 7.25 2.6065 9-Nov-01 14.09 6.75 0.82 21.65 0.19 4.99 26.98 13.55 3.91 8.33 7.30 2.6566 8-Nov-01 13.90 6.75 0.92 21.96 0.20 5.08 26.00 14.01 3.95 8.47 7.25 2.6167 7-Nov-01 14.10 6.85 0.95 22.74 0.19 4.99 26.59 14.33 4.29 8.99 7.35 2.6268 6-Nov-01 13.99 7.00 0.95 23.15 0.19 5.16 26.38 14.05 4.15 9.49 7.25 2.5569 5-Nov-01 14.00 7.10 0.75 22.58 0.19 5.04 25.71 15.02 4.07 9.25 7.38 2.6070 2-Nov-01 13.47 6.83 0.78 21.98 0.22 5.13 24.69 16.32 4.08 9.07 7.26 2.6171 1-Nov-01 12.95 6.83 0.76 22.15 0.18 5.16 25.95 15.87 4.25 9.47 7.25 2.7072 31-Oct-01 12.36 6.90 0.76 23.00 0.18 5.02 25.70 15.18 4.39 9.07 7.43 2.7073 30-Oct-01 12.20 6.84 0.75 22.10 0.17 4.78 25.97 16.65 4.35 8.67 7.35 2.6074 29-Oct-01 10.90 6.80 0.73 22.48 0.19 4.65 26.46 17.47 4.45 9.09 7.40 2.6075 26-Oct-01 10.45 6.55 0.72 22.32 0.24 4.71 26.78 17.23 4.60 9.07 7.37 2.6076 25-Oct-01 10.00 6.28 0.72 21.17 0.25 4.74 24.99 15.17 4.55 8.99 7.37 2.7077 24-Oct-01 9.92 7.08 0.74 20.82 0.25 4.69 23.81 14.70 4.55 8.85 7.50 2.85

M:\Chartwell - Irell & Manella\Financial\option valuation - 7-11-05.C.xls\(Prices) © HEALTH CAPITAL CONSULTANTS


Fair Market Value Calculation of OPTION INTERESTGuideline Publicly Traded Companies - Historical Closing Prices(1)


Company Name

Almost Family, Inc.

Amedisys, Inc.


Inc.


Coram Healthcare

Corporation

Gentiva Health

Services, Inc.

Lincare Holdings,

Inc.

National Home

Health Care Corp.

New York Health

Care, Inc.

Option Care, Inc.


Inc.


Inc.

Date AFAM AMED AHOM AHG CRHEQ GTIV LNCR NHHC BBAL OPTN PSAI AHCI78 23-Oct-01 9.92 7.08 0.79 21.50 0.25 4.69 24.61 15.45 4.65 9.25 7.50 2.6979 22-Oct-01 9.91 6.95 0.73 22.40 0.25 4.73 25.50 15.13 4.70 9.49 7.70 2.9080 19-Oct-01 9.93 6.80 0.76 21.70 0.26 4.87 24.86 13.79 4.80 9.25 8.00 2.6081 18-Oct-01 9.45 6.85 0.78 21.50 0.26 5.04 24.50 11.48 4.99 8.99 7.40 2.6082 17-Oct-01 9.49 6.65 0.80 21.10 0.26 5.28 25.00 12.13 5.05 9.04 7.85 2.6083 16-Oct-01 9.49 6.60 0.84 21.83 0.25 5.44 25.20 11.54 4.55 9.63 7.85 2.6084 15-Oct-01 9.20 6.35 0.83 22.28 0.25 5.31 25.52 8.82 5.13 9.33 7.50 2.8085 12-Oct-01 9.49 6.30 0.80 20.40 0.25 5.31 24.43 8.82 5.29 8.54 8.00 2.8586 11-Oct-01 9.50 6.50 0.91 21.85 0.25 5.27 24.59 9.48 5.20 8.45 8.00 3.0587 10-Oct-01 9.40 5.85 0.91 22.62 0.25 5.28 24.79 9.61 5.35 8.17 8.15 3.0088 9-Oct-01 9.80 5.73 0.85 21.51 0.25 5.27 23.65 9.79 4.99 8.46 7.05 3.0089 8-Oct-01 10.42 5.90 0.85 21.98 0.25 5.26 23.97 10.23 4.86 8.10 8.00 2.8090 5-Oct-01 10.30 5.95 0.85 22.68 0.25 5.31 23.00 10.15 5.00 8.25 8.10 2.8091 4-Oct-01 10.50 5.90 0.86 23.30 0.25 5.31 24.39 8.91 4.90 8.50 8.50 2.9592 3-Oct-01 10.30 5.90 0.86 24.61 0.26 5.20 25.93 9.07 4.95 8.68 6.95 2.8093 2-Oct-01 10.00 5.77 0.90 25.09 0.25 5.28 26.29 8.91 4.95 8.77 7.05 2.8094 1-Oct-01 9.70 5.90 0.88 25.58 0.25 5.28 27.11 9.10 5.15 7.77 7.05 3.0095 28-Sep-01 9.30 6.03 0.74 25.90 0.30 5.32 26.57 9.01 5.25 8.21 6.95 2.9596 27-Sep-01 9.28 5.20 0.67 25.13 0.26 5.40 25.69 9.07 5.11 7.19 6.00 3.0097 26-Sep-01 9.30 4.90 0.85 24.37 0.26 5.27 26.04 8.96 4.65 6.90 6.00 2.8198 25-Sep-01 9.35 4.90 0.96 23.98 0.28 5.28 24.45 8.87 4.75 7.03 5.68 2.8199 24-Sep-01 9.35 4.30 0.98 23.70 0.28 5.30 25.06 8.88 4.45 7.11 5.65 2.80100 21-Sep-01 9.12 3.75 1.00 24.50 0.29 5.31 24.20 8.79 4.50 6.58 5.65 2.60101 20-Sep-01 9.24 3.75 1.08 25.00 0.31 5.35 25.48 9.16 4.05 6.36 5.75 2.80102 19-Sep-01 9.40 3.82 1.25 25.26 0.30 5.40 26.46 10.66 4.40 6.37 5.75 3.00103 18-Sep-01 9.75 4.18 1.32 25.90 0.30 5.38 26.94 10.97 4.20 6.55 6.00 2.90104 17-Sep-01 9.60 4.22 1.48 26.03 0.30 5.48 27.81 10.74 5.25 6.06 5.90 2.90105 10-Sep-01 10.00 4.57 1.55 26.61 0.30 5.63 26.73 10.74 5.17 7.22 6.60 3.05106 7-Sep-01 10.02 4.66 1.50 27.30 0.30 5.56 28.45 10.74 4.74 7.43 6.71 2.90107 6-Sep-01 10.05 4.60 1.56 27.15 0.31 5.76 28.90 10.74 4.40 7.99 6.85 3.00108 5-Sep-01 10.00 4.60 1.55 27.22 0.31 5.84 28.70 10.74 4.19 8.08 6.55 3.05109 4-Sep-01 10.10 4.76 1.60 27.94 0.30 5.90 29.37 10.91 3.80 8.09 6.23 3.25110 31-Aug-01 10.01 5.12 1.60 27.16 0.30 5.77 28.41 9.76 3.60 7.98 6.10 3.30

Notes:1 Sources: Yahoo Finance and Bloomberg; Prices adjusted for stock splits and dividends.

M:\Chartwell - Irell & Manella\Financial\option valuation - 7-11-05.C.xls\(Prices) © HEALTH CAPITAL CONSULTANTS


Fair Market Value Calculation of OPTION INTERESTGuideline Publicly Traded Companies - Historical Returns

Table 12-2: Historical Stock Returns (1)


Company Name

Almost Family,

Inc.

Amedisys, Inc.


Inc.


Coram Healthcare

Corporation

Gentiva Health

Services, Inc.

Lincare Holdings,

Inc.


New York Health

Care, Inc.

Option Care, Inc.


Inc.


Inc.

Date AFAM AMED AHOM AHG CRHEQ GTIV LNCR NHHC BBAL OPTN PSAI AHCI1 2/13/2002 -0.0102 -0.0064 0.0000 -0.0580 -0.1035 -0.0137 0.0168 0.0457 0.0056 -0.0401 0.1345 0.0260

2 2/12/2002 -0.0233 -0.0102 -0.0235 -0.0084 0.0000 0.0137 -0.1049 0.0010 -0.0056 -0.0034 0.0086 0.0000

3 2/11/2002 0.0166 0.0166 -0.0674 -0.0013 -0.0480 -0.0041 -0.0176 0.0000 -0.0055 -0.0243 0.0194 -0.0131

4 2/8/2002 -0.0100 -0.0255 -0.0215 0.0169 -0.0155 0.0041 0.0355 -0.0086 0.0055 0.0288 -0.0078 0.0000

5 2/7/2002 0.0066 0.0450 0.0000 -0.0152 0.0000 -0.0137 0.0100 0.0086 0.0028 0.0000 0.0326 -0.0129

6 2/6/2002 0.0134 -0.0131 -0.1201 -0.0075 -0.0451 -0.0082 0.0143 -0.0180 0.0311 -0.0156 -0.0100 0.0129

7 2/5/2002 -0.0449 -0.0382 0.0000 0.0181 0.0764 0.0260 0.0171 0.0700 -0.0477 0.0134 -0.0570 0.0000

8 2/4/2002 -0.0192 0.0916 -0.1406 -0.0391 0.0488 0.0140 -0.0213 -0.0337 0.0027 -0.0461 0.1081 -0.0256

9 2/1/2002 x x x x 0.0513 x x x x x x x

10 1/31/2002 0.0554 0.0420 -0.1376 0.0156 0.0357 0.0042 -0.0112 0.0000 0.0055 -0.0032 0.0593 0.0520

11 1/30/2002 0.0135 0.0261 -0.0142 -0.0033 0.0561 0.0028 0.0112 0.0127 0.0366 0.0032 0.0572 0.0000

12 1/29/2002 -0.0108 0.0029 -0.0278 0.0008 -0.2384 -0.0042 -0.0011 -0.0127 0.0000 0.0239 -0.0516 0.0270

13 1/28/2002 -0.0074 0.0148 -0.1163 0.0058 -0.0299 0.0028 -0.0049 0.0039 0.0291 -0.0430 -0.0056 0.0278

14 1/25/2002 0.0000 -0.0148 0.0500 -0.0173 0.0000 -0.0042 -0.0123 -0.0261 0.0894 -0.0115 -0.0055 0.0000

15 1/24/2002 0.0000 0.0375 0.0000 0.0169 0.0299 -0.0056 -0.0063 -0.0226 0.0163 -0.0010 0.0337 0.0580

16 1/23/2002 -0.0424 0.0000 -0.0127 0.0338 -0.0870 0.0014 0.0004 0.0141 -0.0098 0.0533 0.0290 0.0000

17 1/22/2002 0.0000 -0.0076 0.0000 0.0030 0.1823 0.0042 0.0007 -0.0362 0.0000 0.0155 -0.0233 -0.0438

18 1/18/2002 0.0458 0.0076 -0.0373 -0.0112 0.0513 -0.0028 -0.0304 0.0147 0.0263 0.0033 -0.0394 -0.0282

19 1/17/2002 -0.0186 0.0310 -0.0121 -0.0278 0.1112 0.0113 -0.0229 -0.0101 0.0033 -0.0383 0.0349 0.0253

20 1/16/2002 -0.0176 0.0000 -0.0238 0.0000 0.0198 0.0043 0.0077 -0.0009 -0.0297 -0.0400 0.0278 -0.0391

21 1/15/2002 -0.0311 -0.0156 0.0118 0.0121 -0.0198 0.0029 0.0060 -0.0154 0.0000 0.0661 -0.0942 0.0000

22 1/14/2002 0.0139 -0.0230 0.0241 0.0101 0.0198 0.0188 0.0057 -0.0804 -0.0382 -0.0304 -0.0201 0.0138

23 1/11/2002 -0.0300 0.0308 -0.0241 0.0175 -0.0392 -0.0116 -0.0035 -0.0083 0.0382 0.0043 -0.0042 0.0000

24 1/10/2002 -0.0037 0.0350 0.0241 0.0100 0.0194 -0.0014 0.0089 0.0141 -0.0065 -0.0775 -0.0237 0.0690

25 1/9/2002 0.0130 -0.1102 -0.0241 -0.0013 -0.0385 0.0131 -0.0121 0.0168 -0.0317 -0.0010 0.0123 0.0000

26 1/8/2002 -0.0197 0.0146 0.0741 0.0031 -0.0902 0.0221 0.0085 0.0559 0.0480 0.0030 0.0784 0.0333

27 1/7/2002 0.0259 -0.0029 -0.0127 -0.0087 -0.0339 -0.0395 -0.0053 0.0602 -0.0098 -0.0246 0.0469 0.0635

28 1/4/2002 0.0447 -0.0174 -0.0250 0.0035 0.0000 -0.0043 -0.0011 -0.0673 -0.0065 -0.0019 0.0012 0.0165

29 1/3/2002 -0.0372 -0.0157 0.0124 -0.0425 0.1241 0.0943 -0.0144 -0.0368 -0.0064 -0.0315 0.0154 0.0513

30 1/2/2002 -0.0044 0.0071 0.0382 -0.0400 -0.1241 -0.0171 0.0014 0.0000 -0.0741 0.0296 0.0048 0.0000

31 12/31/2001 0.0000 -0.0014 0.0263 0.0052 0.0870 -0.0015 0.0000 -0.0137 0.0741 0.0285 -0.0166 0.0357

32 12/28/2001 0.0351 0.0014 -0.0645 -0.0076 0.1572 0.0077 -0.0014 -0.0853 -0.1063 -0.0236 0.0299 -0.0180

33 12/27/2001 0.0026 0.0000 0.0000 0.0255 0.1613 -0.0108 0.0091 0.0000 0.0968 0.0127 0.0308 0.0180

34 12/26/2001 -0.0084 0.0217 0.0382 0.0090 0.0000 0.0031 0.0028 0.0070 0.0323 0.0526 -0.0100 0.0000

35 12/24/2001 -0.0166 -0.0073 0.0000 0.0125 0.4308 0.0000 0.0228 0.0000 -0.0635 0.0721 0.0125 0.0000

36 12/21/2001 0.0218 -0.0029 0.0000 0.0169 0.3677 0.0187 0.0193 -0.0101 0.0155 0.0090 -0.0025 -0.0180

37 12/20/2001 -0.0344 0.0175 0.0397 0.0107 0.0000 0.0063 -0.0044 -0.0200 0.0000 -0.0079 -0.0025 0.0000

38 12/19/2001 -0.0056 -0.0146 0.0556 0.0306 0.0000 -0.0188 -0.0066 0.0161 -0.0308 -0.0022 0.0151 0.0290

39 12/18/2001 0.0025 0.0146 0.0290 0.0058 0.0000 0.0204 0.0180 -0.0108 -0.0870 -0.0122 0.0063 0.0074

40 12/17/2001 -0.0186 -0.0290 -0.0432 -0.0053 -0.0541 0.0048 0.0030 -0.0346 0.0140 0.0302 0.0038 -0.0541

41 12/14/2001 0.0312 0.0231 0.0580 0.0129 -0.0260 0.0080 0.0237 0.0346 0.0432 -0.0045 0.0155 0.0541

42 12/13/2001 0.0192 -0.0087 -0.0294 -0.0327 0.0800 0.0064 0.0177 0.0108 0.0118 0.0034 0.0000 0.0572

43 12/12/2001 0.0328 0.0445 0.0000 -0.0219 -0.0541 0.0097 -0.0413 -0.0312 -0.0690 0.0023 0.0000 0.0198

44 12/11/2001 -0.0392 -0.0386 0.0597 -0.0186 -0.1001 0.0098 -0.0085 -0.0082 -0.0138 0.0277 -0.0193 0.0000

45 12/10/2001 -0.0427 0.0015 -0.0741 -0.0004 0.0000 -0.0049 0.0007 -0.0022 -0.0136 -0.0434 -0.0127 0.0000

46 12/7/2001 -0.0012 -0.0259 -0.1210 0.0017 0.0000 -0.0016 -0.0201 0.0149 0.0556 0.0249 -0.0075 0.0202

47 12/6/2001 0.1033 0.0043 -0.0126 -0.0104 0.0488 -0.0033 -0.0671 0.0447 0.0000 0.0092 -0.0136 -0.0202

48 12/5/2001 -0.0202 0.0000 0.2231 0.0029 0.0000 0.0214 0.0064 -0.2403 0.0498 -0.0574 0.0087 -0.0953

49 12/4/2001 -0.0132 -0.0142 -0.1978 0.0071 0.0000 0.0117 0.0120 0.0289 0.0336 0.0066 0.0125 0.0183

50 12/3/2001 0.0681 0.0170 -0.0253 -0.0058 -0.1823 -0.0150 -0.0228 0.0304 -0.0805 0.0111 -0.0013 -0.0506

51 11/30/2001 0.0163 0.0043 -0.0247 -0.0331 0.0000 0.0184 -0.0197 0.0416 0.0144 0.0608 0.0332 0.0506

52 11/29/2001 -0.0107 0.0203 0.0500 0.0244 0.0870 0.0051 0.0170 0.0222 -0.0087 -0.0082 0.0000 0.0377

53 11/28/2001 0.0000 -0.0059 -0.0253 0.0212 0.0465 0.0085 -0.0034 0.0070 -0.0256 0.0742 -0.0116 0.0392

54 11/27/2001 0.0222 0.0000 0.0000 -0.0253 0.0488 0.0069 0.0074 0.0000 -0.0573 0.0308 -0.0013 0.0408

55 11/26/2001 -0.0243 -0.0073 -0.0606 0.0317 0.0000 0.0035 0.0225 0.0000 -0.0288 -0.0193 0.0594 -0.0206

56 11/23/2001 -0.0035 -0.0215 0.0000 0.0047 0.0000 0.0175 0.0209 -0.0333 0.0000 0.0272 0.0068 0.0000

57 11/21/2001 0.0071 0.0071 0.0000 -0.0034 -0.0488 0.0160 0.0188 0.1004 0.0000 0.0000 -0.0270 0.0206

58 11/20/2001 -0.0106 0.0000 0.0000 0.0424 0.0000 0.0108 0.0185 0.0283 -0.0051 -0.0449 0.0270 -0.0408

59 11/19/2001 0.0000 0.0000 0.0238 -0.0088 0.0488 0.0256 0.0029 0.0212 -0.0178 0.0397 0.0000 0.0000

60 11/16/2001 0.0177 -0.0071 -0.0471 0.0380 -0.1823 -0.0238 -0.0253 0.0064 0.0570 -0.0384 0.0069 0.0000

61 11/15/2001 0.0072 0.0143 0.0715 -0.0136 0.2076 -0.0108 0.0011 0.0024 -0.0211 0.0689 -0.0137 0.0000

62 11/14/2001 0.0000 -0.0214 0.0124 -0.0147 -0.1206 0.0384 -0.0170 -0.0529 0.0026 -0.0266 0.0068 -0.0392

63 11/13/2001 -0.0072 0.0142 0.0000 0.0102 0.1466 0.0575 0.0231 0.0053 -0.0233 -0.0182 0.0069 0.0000

64 11/12/2001 -0.0064 0.0364 -0.0247 0.0318 0.0000 0.0159 0.0299 -0.0322 0.0000 -0.0696 -0.0069 -0.0190

65 11/9/2001 0.0136 0.0000 -0.1151 -0.0142 -0.0513 -0.0179 0.0370 -0.0334 -0.0102 -0.0167 0.0069 0.0152

66 11/8/2001 -0.0143 -0.0147 -0.0321 -0.0349 0.0513 0.0179 -0.0224 -0.0226 -0.0826 -0.0596 -0.0137 -0.0038

67 11/7/2001 0.0078 -0.0217 0.0000 -0.0179 0.0000 -0.0335 0.0079 0.0197 0.0332 -0.0541 0.0137 0.0271

68 11/6/2001 -0.0007 -0.0142 0.2364 0.0249 0.0000 0.0235 0.0257 -0.0668 0.0195 0.0256 -0.0178 -0.0194

69 11/5/2001 0.0386 0.0388 -0.0392 0.0269 -0.1466 -0.0177 0.0405 -0.0830 -0.0025 0.0197 0.0164 -0.0038

70 11/2/2001 0.0394 0.0000 0.0260 -0.0077 0.2007 -0.0058 -0.0498 0.0280 -0.0408 -0.0432 0.0014 -0.0339

71 11/1/2001 0.0466 -0.0102 0.0000 -0.0377 0.0000 0.0275 0.0097 0.0445 -0.0324 0.0432 -0.0245 0.0000

72 10/31/2001 0.0130 0.0087 0.0132 0.0399 0.0572 0.0490 -0.0105 -0.0924 0.0092 0.0451 0.0108 0.0377

73 10/30/2001 0.1127 0.0059 0.0270 -0.0170 -0.1112 0.0276 -0.0187 -0.0481 -0.0227 -0.0473 -0.0068 0.0000

74 10/29/2001 0.0422 0.0375 0.0138 0.0071 -0.2336 -0.0128 -0.0120 0.0138 -0.0332 0.0022 0.0041 0.0000

75 10/26/2001 0.0440 0.0421 0.0000 0.0529 -0.0408 -0.0063 0.0692 0.1273 0.0109 0.0089 0.0000 -0.0377

76 10/25/2001 0.0080 -0.1199 -0.0274 0.0167 0.0000 0.0106 0.0484 0.0315 0.0000 0.0157 -0.0175 -0.0541

M:\Chartwell - Irell & Manella\Financial\option valuation - 7-11-05.C.xls\(Returns) © HEALTH CAPITAL CONSULTANTS


Fair Market Value Calculation of OPTION INTERESTGuideline Publicly Traded Companies - Historical Returns

Table 12-2: Historical Stock Returns (1)


Company Name

Almost Family,

Inc.

Amedisys, Inc.


Inc.


Coram Healthcare

Corporation

Gentiva Health

Services, Inc.

Lincare Holdings,

Inc.


New York Health

Care, Inc.

Option Care, Inc.


Inc.


Inc.

Date AFAM AMED AHOM AHG CRHEQ GTIV LNCR NHHC BBAL OPTN PSAI AHCI77 10/24/2001 0.0000 0.0000 -0.0654 -0.0321 0.0000 0.0000 -0.0330 -0.0498 -0.0217 -0.0442 0.0000 0.0578

78 10/23/2001 0.0010 0.0185 0.0790 -0.0410 0.0000 -0.0085 -0.0355 0.0209 -0.0107 -0.0256 -0.0263 -0.0752

79 10/22/2001 -0.0020 0.0218 -0.0403 0.0317 -0.0392 -0.0292 0.0254 0.0927 -0.0211 0.0256 -0.0382 0.1092

80 10/19/2001 0.0495 -0.0073 -0.0260 0.0093 0.0000 -0.0343 0.0146 0.1833 -0.0388 0.0285 0.0780 0.0000

81 10/18/2001 -0.0042 0.0296 -0.0253 0.0188 0.0000 -0.0465 -0.0202 -0.0551 -0.0120 -0.0055 -0.0590 0.0000

82 10/17/2001 0.0000 0.0075 -0.0488 -0.0340 0.0392 -0.0299 -0.0080 0.0499 0.1043 -0.0632 0.0000 0.0000

83 10/16/2001 0.0310 0.0386 0.0120 -0.0204 0.0000 0.0242 -0.0126 0.2688 -0.1200 0.0316 0.0456 -0.0741

84 10/15/2001 -0.0310 0.0079 0.0368 0.0882 0.0000 0.0000 0.0437 0.0000 -0.0307 0.0885 -0.0645 -0.0177

85 10/12/2001 -0.0011 -0.0313 -0.1288 -0.0687 0.0000 0.0076 -0.0065 -0.0722 0.0172 0.0106 0.0000 -0.0678

86 10/11/2001 0.0106 0.1054 0.0000 -0.0346 0.0000 -0.0019 -0.0081 -0.0136 -0.0284 0.0337 -0.0186 0.0165

87 10/10/2001 -0.0417 0.0207 0.0682 0.0503 0.0000 0.0019 0.0471 -0.0186 0.0697 -0.0349 0.1450 0.0000

88 10/9/2001 -0.0613 -0.0292 0.0000 -0.0216 0.0000 0.0019 -0.0134 -0.0440 0.0264 0.0435 -0.1264 0.0690

89 10/8/2001 0.0116 -0.0084 0.0000 -0.0314 0.0000 -0.0095 0.0413 0.0079 -0.0284 -0.0183 -0.0124 0.0000

90 10/5/2001 -0.0192 0.0084 -0.0117 -0.0270 0.0000 0.0000 -0.0587 0.1303 0.0202 -0.0299 -0.0482 -0.0522

91 10/4/2001 0.0192 0.0000 0.0000 -0.0547 -0.0392 0.0209 -0.0612 -0.0178 -0.0102 -0.0210 0.2013 0.0522

92 10/3/2001 0.0296 0.0223 -0.0455 -0.0193 0.0392 -0.0153 -0.0138 0.0178 0.0000 -0.0103 -0.0143 0.0000

93 10/2/2001 0.0305 -0.0223 0.0225 -0.0193 0.0000 0.0000 -0.0307 -0.0211 -0.0396 0.1211 0.0000 -0.0690

94 10/1/2001 0.0421 -0.0218 0.1733 -0.0124 -0.1823 -0.0075 0.0201 0.0099 -0.0192 -0.0551 0.0143 0.0168

95 9/28/2001 0.0022 0.1481 0.0994 0.0302 0.1625 -0.0149 0.0337 -0.0066 0.0270 0.1327 0.1470 -0.0168

96 9/27/2001 -0.0022 0.0594 -0.2380 0.0307 -0.0194 0.0244 -0.0135 0.0122 0.0943 0.0412 0.0000 0.0654

97 9/26/2001 -0.0054 0.0000 -0.1217 0.0161 -0.0741 -0.0019 0.0630 0.0101 -0.0213 -0.0187 0.0548 0.0000

98 9/25/2001 0.0000 0.1306 -0.0206 0.0117 0.0000 -0.0038 -0.0246 -0.0011 0.0652 -0.0113 0.0053 0.0036

99 9/24/2001 0.0249 0.1369 -0.0202 -0.0332 -0.0351 -0.0019 0.0349 0.0102 -0.0112 0.0775 0.0000 0.0741

100 9/21/2001 -0.0131 0.0000 -0.0770 -0.0202 -0.0504 -0.0075 -0.0515 -0.0412 0.1054 0.0340 -0.0175 -0.0741

101 9/20/2001 -0.0172 -0.0185 -0.1462 -0.0103 0.0165 -0.0093 -0.0377 -0.1517 -0.0829 -0.0016 0.0000 -0.0690

102 9/19/2001 -0.0366 -0.0901 -0.0545 -0.0250 0.0000 0.0037 -0.0180 -0.0287 0.0465 -0.0279 -0.0426 0.0339

103 9/18/2001 0.0155 -0.0095 -0.1144 -0.0050 0.0000 -0.0184 -0.0318 0.0212 -0.2231 0.0778 0.0168 0.0000

104 9/17/2001 -0.0408 -0.0797 -0.0462 -0.0220 0.0000 -0.0270 0.0396 0.0000 0.0154 -0.1751 -0.1121 -0.0504

105 9/10/2001 -0.0020 -0.0195 0.0328 -0.0256 0.0000 0.0125 -0.0624 0.0000 0.0868 -0.0287 -0.0165 0.0504

106 9/7/2001 -0.0030 0.0130 -0.0392 0.0055 -0.0328 -0.0353 -0.0157 0.0000 0.0744 -0.0727 -0.0206 -0.0339

107 9/6/2001 0.0050 0.0000 0.0064 -0.0026 0.0000 -0.0138 0.0069 0.0000 0.0489 -0.0112 0.0448 -0.0165

108 9/5/2001 -0.0100 -0.0342 -0.0317 -0.0261 0.0328 -0.0102 -0.0231 -0.0157 0.0977 -0.0012 0.0501 -0.0635

109 9/4/2001 0.0090 -0.0729 0.0000 0.0283 0.0000 0.0223 0.0332 0.1114 0.0541 0.0137 0.0211 -0.0153

110 8/31/2001

Table 12-2: Statistical Computations

A B C D E F G H I J K L MAFAM AMED AHOM AHG CRHEQ GTIV LNCR NHHC BBAL OPTN PSAI AHCI

111 Standard Deviation of Returns 0.0283 0.0393 0.0681 0.0257 0.0948 0.0196 0.0280 0.0577 0.0495 0.0433 0.0455 0.0376

112Annualized Standard Deviation

of Returns 0.4492 0.6236 1.0808 0.4080 1.5044 0.3112 0.4446 0.9159 0.7854 0.6870 0.7220 0.5972

113

Arithmetic Mean Annualized Standard Deviation of

Returns 0.7108

114Median Annualized Standard

Deviation of Returns 0.6553

115High Annualized Standard


116Low Annualized Standard


117

Upper Quartile Annualized Standard Deviation of

Returns 0.8180

118

Lower Quartile Annualized Standard Deviation of

Returns 0.4481

119Decile 1 Annualized Standard


Notes:1 Natural Logarithm of daily stock total returns; based on closing prices.

M:\Chartwell - Irell & Manella\Financial\option valuation - 7-11-05.C.xls\(Returns) © HEALTH CAPITAL CONSULTANTS

Fair Market Value Calculation of OPTION INTEREST Schedule 14Analysis Worksheet

A B C D E F G HKnown Variables Description Source of Data Value Model Input Notes Bates # From Bates # To

1 Option Premium Price of Call Option First Amendment to SPA § 1 $7,500,000 N/A AD 008785 AD 008790

2 Equity Fair Market Value Fair Market Value of Equity VALUATOR FMV Determination $21,000,000 $21,000,000 N/A N/A

3 Strike Price of Equity Purchase Price of Equity VALUATOR FMV Determination $21,000,000 $21,000,000

Assumed to be equal to FMV determination of

SUBJECT ENTITY N/A N/A

4 Volatility of Equity

Assumed volatility of returns if Addus shares were publicly traded

(as measured by the standard deviation of returns)

Calculation of Guideline Publicly Traded Companies' lower quartile

annualized standard deviation 0.45 0.45

Includes scenario analysis to show effect of volatility on

option price N/A N/A

5 Time to ExpirationTime between option purchase and

Scheduled Close of SPA First Amendment to SPA § 1 6.5 months (0.54

years) 0.54 2/14/02 to 8/31/02 AD 008785 AD 008790

6 Risk-Free Interest RateRisk free interest (T-bill) rate with

same maturity as option

1) First Amendment to SPA § 1 (length of time); 2) Federal Reserve (historical

CMT rate) 1.86% 0.01866-month CMT rate on

2/14/02 AD 008785 AD 008790

7 DividendsDollar value of expected dividends during life of OPTION INTEREST 2001 Audited Financial Statements $0 $0

assume dividend = $0 due to net loss in 2001

Confidential 006527

Confidential 006546

Unknown Variable Description Source of Data Value Model Output Notes Bates # From Bates # To

8 Option Fair Market Value Fair Market Value of Call OptionCalculation using Black-Scholes

Options Pricing Model Calculated Calculated N/A N/A

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Schedue 15Page 1 of 2

Fair Market Value Calculation of OPTION INTERESTBlack-Scholes Option Valuation Model - Scenario 1

Table 11-1: Model Inputs

A B CName Notation Value

1 Call option FMV C Calculated2 Equity FMV(1) S $21,000,0003 Strike Price(2) X $21,000,0004 Arithmetic Mean Annualized Standard Deviation of Returns σ 0.715 Median Annualized Standard Deviation of Returns σ 0.666 High Annualized Standard Deviation of Returns σ 1.507 Low Annualized Standard Deviation of Returns σ 0.318 Upper Quartile Annualized Standard Deviation of Returns σ 0.829 Lower Quartile Annualized Standard Deviation of Returns(3) σ 0.45

10 Decile 1 Annualized Standard Deviation of Returns σ 0.4111 Time to Expiration(4) T 0.5412 Risk-free Interest Rate(5) r 0.0186

Cumulative Normal ProbabilityDistribution Function of standardized

13 normal variable x, (mean of 0, std. dev. of 1) N(dx) Calculated14 Standardized normal variable 1 d1 Calculated15 Standardized normal variable 2 d2 Calculated

Notes:1 Fair Market Value (FMV) determination of SUBJECT INTEREST as of 1/08/2002.2 The Strike Price or negotiated Purchase Price of SUBJECT INTEREST (assumed to be equal to FMV).3 VALUATOR used Selected Guideline Public Companies lower quartile standard deviation of returns

for the 6.5 month historical period between August 31, 2001 and February 13, 2002as the volatility assumption for the Fair Market Value determination of OPTION INTEREST.

4 Option period was approximately 6.5 months or 0.54 years (2/14/2002 to 8/31/2002).5 Source: Federal Reserve; Six-month Constant Maturity Treasury (CMT) rate on 2/14/2002.

M:\Chartwell - Irell & Manella\Financial\option valuation - 7-11-05.C.xls\(Inputs) ©HEALTH CAPITAL CONSULTANTS

Schedue 15Page 2 of 2

Fair Market Value Calculation of OPTION INTERESTBlack-Scholes Option Valuation Model

Table 12-1: Pricing Model Formula Breakdown

A B C D E F G H I J K L M N

16 C ln(S/X) (r + σ2/2) * T σ * √T d1 d2 N(d1) N(d2) -r * T X * e-r * T S * N(d1) X * e-r * T * N(d2)

17 Arithmetic Mean Annualized Standard Deviation of Returns Calculated $4,417,360 0.0000 0.1469 0.5231 0.2808 -0.2423 0.6106 0.4043 -0.0101 $20,789,487 $12,822,047 $8,404,687

18 Rounded $4,500,000

19 Median Annualized Standard Deviation of Returns Calculated $4,056,364 0.0000 0.1875 0.4823 0.3889 -0.0934 0.6513 0.4628 -0.0101 $20,789,487 $13,677,675 $9,621,311

20 Rounded $4,100,000

21 High Annualized Standard Deviation of Returns Calculated $8,884,555 0.0000 0.6230 1.1072 0.5627 -0.5445 0.7132 0.2930 -0.0101 $20,789,487 $14,976,834 $6,092,279

22 Rounded $8,900,000

23 Low Annualized Standard Deviation of Returns Calculated $2,012,103 0.0000 0.0363 0.2290 0.1585 -0.0705 0.5630 0.4719 -0.0101 $20,789,487 $11,822,389 $9,810,287

24 Rounded $2,100,000

25 Upper Quartile Annualized Standard Deviation of Returns Calculated $5,049,831 0.0000 0.1913 0.6021 0.3178 -0.2843 0.6247 0.3881 -0.0101 $20,789,487 $13,118,045 $8,068,214

26 Rounded $5,100,000

27 Lower Quartile Annualized Standard Deviation of Returns Calculated $2,842,909 0.0000 0.0644 0.3298 0.1954 -0.1343 0.5775 0.4466 -0.0101 $20,789,487 $12,126,920 $9,284,012

28 Rounded $2,900,000

29 Decile 1 Annualized Standard Deviation of Returns Calculated $2,622,365 0.0000 0.0560 0.3030 0.1847 -0.1182 0.5733 0.4529 -0.0101 $20,789,487 $12,038,891 $9,416,526

30 Rounded $2,700,000

Table 11-2: Black-Scholes Option Valuation Formula

C = S * N(d1) – Xe-r * T * N(d2)

where ln(S/X) + (r + σ2 / 2) * T d1 = σ * √T

d2 = d1 – σ * √T

M:\Chartwell - Irell & Manella\Financial\option valuation - 7-11-05.C.xls\(Inputs) ©HEALTH CAPITAL CONSULTANTS

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