Related Party Transactions and Outside Related Director Information

Radiation Therapy Services, Inc. (RTSX)

3/31/2006 Proxy Information

Administrative Services Agreements

In Maryland, Massachusetts, Nevada, New York and North Carolina, we have administrative services agreements with professional corporations owned by certain of our directors, officers and principal shareholders, who are licensed to practice medicine in such states. We have entered into these administrative services agreements in order to comply with the laws of such states which prohibit us from employing physicians. Our administrative services agreements generally obligate us to provide treatment center facilities, staff and equipment, accounting services, billing and collection services, management and administrative personnel, assistance in managed care contracting and assistance in marketing services. Terms of the agreements are typically 20-25 years. We receive a monthly fixed fee for our services. Our Chairman, Howard M. Sheridan, M.D., our Chief Executive Officer and President, Daniel E. Dosoretz, M.D., our Medical Director, James H. Rubenstein, M.D., and a director, Michael J. Katin, M.D., own interests in these professional corporations ranging from 0% to 100%. The administrative services fees paid to us by such professional corporations under the administrative services agreements were approximately $24,753,000 in 2005. We engaged in independent consultant to complete a fair market value review of the fees paid by related party professional service corporations to the Company under the terms of these agreements, except for the administrative services agreement related to our Massachusetts-based center, which was newly acquired in 2005. The consulting firm completed a review of 2005 fees under the Maryland, Nevada, New York and North Carolina agreements and determined that the fees are at fair market value. With respect to our Massachusetts-based center and any new centers in 2006 which require an administrative services agreement, the audit committee approved the utilization by management of the same underlying fee methodology used in the Maryland, Nevada, New York and North Carolina administrative services agreements based on the fair market value review completed by the independent consultant.

Lease Arrangements with Entities Owned by Related Parties

We lease certain of our treatment centers and other properties from related parties. We have entered into various lease arrangements with entities owned by Drs. Sheridan, Dosoretz, Rubenstein and Katin, and certain of our shareholders and employees. Their ownership interests in these entities range from 0% to 100%. These related party leases have expiration dates through February 28, 2020 and provide for annual lease payments ranging from approximately $27,500 to $499,000. The aggregate lease payments we made to the entities owned by these related parties were approximately $3,173,000 in 2005. The rents were determined on the basis of the debt service incurred by the entities and a return on the equity component of the project’s funding. Prior to completing our initial public offering in June 2004, we engaged an independent consultant to complete a fair market rent analysis for the real estate leases with these entities. The consultant determined that, with one exception, the rents are at fair market value. We negotiated a rent reduction for the one exception to bring it to fair market value as determined by the consultant. In the future an independent consultant will be utilized to assist the Company’s audit committee in determining fair market rental for any renewal or new rental arrangements with any affiliated party.

In October 1999, we entered into a sublease arrangement with a partnership which is owned by certain of our shareholders to lease space to the partnership for an MRI center in Mount Kisco, New York. Sublease rentals paid by the partnership to the landlord on our behalf were approximately $571,000 during 2005.

Indebtedness with Related Parties

At December 31, 2004, the Company had approximately $310,000 payable to three land partnerships owned by certain of the Company’s directors, officers, principal shareholders, shareholders and employees for construction in process and building improvement costs related to the construction of a medical facility. Dr. Dosoretz owned 15-30% of each of the three land partnerships while Drs. Sheridan, Rubenstein and Katin each owned 8.8% of one land partnership, 10-15% of a second land partnership and 5.7% of the third land partnership, respectively. These costs were reimbursed to the land partnerships in 2005.

Indemnification Agreements with Certain Officers and Directors

We have entered into indemnification agreements with each of our executive officers and directors.

Other Transactions

We provide billing and collection services to Riverhill MRI Specialists, P.C., a provider of medical services in New York which is owned by certain of our directors, officers, principal shareholders, shareholders and employees. Drs. Sheridan, Dosoretz, Katin and Rubenstein each own a 10.4% interest in Riverhill MRI Specialists, P.C. The fees paid to us by such professional corporation for the billing and collection services were approximately $194,000 for 2005.

The Company is a participating provider in an oncology network, of which Dr. Dosoretz has an ownership interest. The Company provides oncology services to members of the network. Payments received by the Company for services rendered in 2005 approximated $384,000.

In October 2003, we contracted with Batan Insurance Company SPC, LTD, a newly-formed entity, which is owned by Drs. Katin, Dosoretz, Rubenstein and Sheridan to provide us with malpractice insurance coverage. We paid premium payments to Batan Insurance Company SPC, LTD of approximately $4,096,000 for the year ended December 31, 2005. The new insurance company is managed by AON Corporation, pursuant to a management agreement.

During 2005, we employed five family members of certain of our directors, officers and shareholders. The total compensation paid to such family members in 2005 was $515,745.

Dr. Katin is employed by us pursuant to a physician agreement. Compensation paid by us to Dr. Katin was $1,136,478 for the year ended December 31, 2005.