Health Settings Network, Inc.

Funding

Financing Your Projects and Leveraging Ownership

HealthSettings Network provides the professional expertise necessary to develop the project funding plan that will maximize economic benefits to the client. Experience has shown that the ultimate success or failure of a project can often be traced back to the degree to which operational and space planning has been thoroughly understood and synchronized with funding strategies. Thus, project financing must be rooted in the earliest foundations of a program's development if it is to support the client's objectives and deliver the maximum benefit at the lowest rent. HealthSettings offers an array of funding and ownership alternatives to its clients ranging from physician/tenant ownership participation in the facility to complete 3rd party ownership of the entire building. Following are some options:

Master Leasing - If the client wishes to lease the entire facility on a long-term basis, HSN will create the appropriate ownership entity and arrange all financing, including construction and permanent financing, as well as the complementary investment (equity) funding.

Client Ownership - If the client prefers to own the entire facility, HSN will still manage the overall development process, thus relieving the hospital staff of these additional responsibilities. HSN will assist in coordinating financing with the client's treasury staff in order to ensure proper review and monitoring of construction draws and will manage the subsequent conversion into permanent funding status. We can also orchestrate and arrange bonding of "Public/Private Partnerships".

Shared Ownership - HSN encourages its clients (institutional, hospital or private physician) to share in the ownership of their facility by participating as an equity investor. HSN will create the appropriate entity (Limited Liability Company, for example) and orchestrate the raising of the necessary debt and equity funds for the entire project. Our staff and attorneys will ensure proper disclosure, and compliance with appropriate NASD private securities regulations.

Special Funding Option - In these unsettled financial times, HealthSettings has available, both debt and equity funding to support not only our development projects, but also to be in a position to acquire very high-quality, fully leased ambulatory facilities that are presently owned by Hospitals and are reasonably new. The buildings are then master-leased back to the Hospital and private practices as operating leases. This results in the release of cash to the Hospital without the burden of a capital lease on their balance sheet. In these times of strained liquidity, this action can produce either working capital for needed staff and equipment, or it may open the door to the development of another planned, but delayed ambulatory facility that can also be developed off-balance sheet. The net result is increased cash and expanded ambulatory facilities with the resulting release of critical space in the Hospital proper.

Since HealthSettings manages all of the projects we develop, we have the infrastructure to collect rents, pay investors (monthly), audit each project separately, and carry out all of the functions necessary to administer the financial matters of our projects-each of which is firewalled from all other projects. Coupled with our collaboration with our Hospital-client’s existing maintenance staff, we also manage the care of all of our properties around the country.