March 2009

Salem Partners entered its 12 year of operation during trying times for all.  No part of our business has been unaffected by the downturn.  Nonetheless, we have continued to focus on growth, and have added two dedicated banking professionals within the past year and one additional dedicated wealth management professional.  We are committed to continued growth of the firm.  2008 was a growth year for us in terms of revenue and profits.  We believe it will be a challenge to grow in 2009, but we are optimistic that we can maintain momentum.

Our passion for our business and our clients has not diminished.  In fact, the financial obstacles in front of many companies and individuals have increased our resolve to provide the best possible service to those that choose to work with us.  Our guiding principals remain the same:

Integrity – we will only operate in a spirit of honesty and open communication with our business partners, even when it is not in our interest to do so.

Service – we never forget that we are, above all, service providers.  We sell access, knowledge and expertise, but we also want for our clients to enjoy their interaction with us.

Quality – we always intended to provide the highest quality service in our areas, and we have not altered that mission since our beginnings.

Privacy – our clients trust us with important, sensitive matters, and we never breach that trust.

Lasting Relationships – The majority of Salem Partners business today can be traced back to a relatively small number of relationships that we intend to maintain for the life of the firm.

Community – With economic conditions putting pressure on those that are less fortunate, we have intensified our charitable efforts.  Salem Partners continues to support, with time and money, a number or worthwhile charities, particularly those dedicated to children’s causes.

We constantly remind ourselves that, as long as we conduct our business in accordance with the principals above, we have achieved a high level of success even before the dollars and cents are added up.

Best regards,

                                                               
                                            Stephen Prough                                                                      John Dyett
                                            Founder                                                              Founder

January 2007

Salem Partners is celebrating its 10th year in operation and now has 15 professionals working in its investment banking and wealth management businesses. During this past year, we have expanded our investment banking practice to include dedicated Life Sciences and Technology teams. Additionally, our Media and Entertainment team continues to lead the industry in middle market mergers and acquisitions, as well as valuation services. Our focus continues to be providing the highest quality capital raising, mergers and acquisitions and advisory services in an environment that is intimate and client-friendly.

In October 2006, Salem Partners hired Adam Meislik as a managing director to head our Technology investment banking practice. Prior to joining Salem Partners, Mr. Meislik spent nine years with CIBC World Markets, most recently as Executive Director, leading the West Coast software coverage effort.

Salem Partners Wealth Management ("SPWM") added two new important hires, David Dodson, as director of SPWM, and Goli Kamangar, SPWM's director of operations. Mr. Dodson was formerly a vice president of Essential Advisers in Denver and has been in the wealth management profession for ten years. Ms. Kamangar was formerly in operations and relationship management at Bear Stearns, Thomas Weisel Partners and Montgomery Securities.

David Merritt, a managing director in our investment banking practice, joined the Board of Directors of Calpine Corporation in February 2006. At Calpine, he sits on the Audit Committee. Dave also sits on the board of Outdoor Network Holdings, Inc. and Charter Communications, Inc.

2007 is off to a strong start. We continue to make significant inroads in our core practice areas. We are beginning to see some crossover between our Media and Entertainment and Technology clients as those industries continue to find ways to leverage each other. Our Life Sciences practice has gained a strong reputation for capitalizing growth companies.

                                                               
                                            Stephen Prough                                                                      John Dyett
                                            Founder                                                              Founder

January 2005

We founded Salem Partners in 1997 with the objective of creating a firm to provide services that clients would view as indispensable after their initial experience with us.  We wanted to measure our success not by the number of clients but by the depth of each client relationship.

We have pursued our objective by ensuring that regardless of transaction type, size or industry, clients receive the focus of senior bankers and the benefits of our network of contacts. We view each transaction not only as a business opportunity, but also as a chance to build a lasting relationship.

Our profile has changed since the beginning. Salem Partners now consists of a diverse team of seasoned bankers and has completed billions of dollars of transactions for clients in industries ranging from media and entertainment to life sciences and technology. In 2004, we began offering wealth management services.  Through it all, we have continued to emphasize the client experience as our primary focus. Clients who work with Salem Partners know that they will receive an unparalleled level of service in an honest, client-friendly atmosphere.

We chose "Clients Know" as our motto because, ultimately, what matters the most to us is our clients' perspective of the value of our services. We appreciate your interest in Salem Partners and hope that at some point soon, you will come to know us as well.



                                                                                    
                                           Stephen Prough                                                                      John Dyett
                                           Founder                                                                                  Founder