1. MassMEDIC LEADING IN TURBULENT TIMES Mark Gallagher Senior Vice President Silicon Valley Bank March 5, 2009

2. Agenda Global Economy – The world is on fire! MedTech Economy – Doing ok? The Good News – sifting through the ashes Shamless Commerce!

3. How bad can it be?

4. Housing Bubble Articles at all-time high >50 Mortgage Brokers Shut Down First Extendible CP Extends Fed Cuts 50 bps Fed Cuts 25 bps CDO-Backed ARS Fails Fed Cuts 25 bps, Establishes TAF Fed Cuts 125 bps Majority of ARS Fail Bear Stearns Bailout Fed Cuts 75 bps, Creates TSLF and PDCF GSEs encouraged to expand /raise capital Fed Cuts 25 bps Oil peaks at $147 GSEs taken into conservatorship Fed Leaves Rates Unchanged FNM/FRE/ Lehman/AIG Fed Cuts Rates to 0-25 bp Q207Q107Q307Q407Q108Q208Q308Q408Q109 Negative Events Accelerated… Market-supporting events above the timeline Negative events below the timeline Madoff TARP Approved/ Global Rate Cuts Fed Begins Purchasing MBS 3.6 million jobs lost since 1/08 Stanford

5. …Convert to Daily in September… 9/8 FNM/FRE Conservatorship 9/12 Market expects Lehman Bailout 9/14 Lehman to file BK, Merrill forced on BofA, Stocks fall most since 9/11 9/14 Fed injects $70B - most since 9/11 9/15 Reserve fund "Breaks the Buck", Fed Leaves Funds rate at 2% 9/17 Paulson plans TARP 9/17 Fed lends $28B to AIG 9/19 SEC bans Short Sales 9/20 TARP request finalized - $700B 9/21 Mitsubishi invests $8.4B in M Stanley 9/25 WAMU Seized 9/29 Citigroup to acquire Wachovia 9/26 Global Swap Lines Increased September 2008

6. The Markets Source: SNL Financial

7. Federal Funds Rate Source: Federal Reserve Bank, St. Louis

8. Housing Prices Plunge…

9. Home Construction Plunges As Well

10. Auto Sales Drop

11. Manufacturing Drops

12. Labor Markets Deteriorate

13. Consumers Cut Back

14. Household Names Disappear

15. Market Values Plunge A collective loss of over $1.1 trillion (or 82%) in Market Cap since 2007 Over $400 billion in Market Cap lost since the start of Q4 2008 Source: SNL Financial; Yahoo Finance $167$74$82$238$117$85$274 $37 In $ billions Winners / Survivors Sold / Buried Market Cap 12/31/06 Market Cap 01/22/09 $81$23$12$108$43$39$18 $17 $18$35 $37 $31 $24 $86

16. Volatility and Fear at an All-time High Current Crisis Accounting Scandals 9/11 Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. A high value of VIX corresponds to a more volatile market. Source: Chicago Board Options Exchange

17. Total medtech financing While venture capital held up, total financing was down sharply … Source: Ernst & Young, ThinkEquity Partners, Windhover, Dow Jones VentureSource and Jefferies & Co.

21. Medtech mergers & acquisitions 2008 M&A activity fell to pre-2006 levels … Source: Ernst & Young

22. Medtech mergers & acquisitions … with most of the decline occurring in the second half of the year. Source: Ernst & Young

23. Are Banks Pulling Their Weight?

24. Banks Do NOT Dominate the Credit Markets For better or worse, securitized markets dominate credit availability Securitized markets are shut due to investor fear Unrealistic to expect the banking sector to immediately replace this market Source: Arbor Research

25. Obligatory Pie Chart

26. Fed Lowers Forecast Dramatically

27. Medtech Financials Net income of non-conglomerates is on pace to grow by 46%

28. Medtech market capitalization … but company valuations plummeted in the fourth quarter.

32. SVB Financial Group (SIVB – Nasdaq) Commercial Banking SVB Silicon Valley Bank SVB Global SVB Financial Group SVB Analytics Venture Capital & Private Equity SVB Capital Global Networks SVB Private Client Services Private Banking Funds Management Valuations & Capitalization Software -VC / PE Backed & Large Tech Cos.: Term Debt, Asset based lines, Cash Flow lending -Total Loans $3.0 B -Deposit & Cash Management Services - Total Deposits: $4.0 Billion -Private Equity Services: Lending and Cash Mgmt -International: foreign exchange, letters of credit, etc. -Private Co. Valuations (409A) – 30 people -Cap Table management (eProsper) – 900 companies and 30,000 optionees -Established in 2006 - Hundreds of engagements in first 12 months -FAS 157 in 2008 -Relationship Mgmt with VC / PE for SVBFG -Family of funds: VC fund of funds, Co-Investment Fund, Gold Hill venture debt, Partners for Growth -LP Investments (parent company) since 1995 -London office: lending to emerging cos. in Europe -Israel and Canada: commercial banking in ’07 -India & China: Consulting offices - Assisted 450 clients and VC / PE firms overseas $20 Billion of SVB client assets under management in: REPOs: collateralized, overnight investments which generate interest income only SVB Securities: self directed investment in money market mutual funds SVB Asset Mgmt. managed accounts for greater performance, customization and reporting -Personal loans to CEOs, CFOs, General Partners and extended SVB network. SVB Securities/ SVB Asset Mgmt

33. It is a cycle! Y