January 2010 – As we reflect on 2009, we feel fortunate that our portfolio
companies have not only weathered the economic storm, but in many
cases have prospered despite the soft economic conditions. We believe
that some of this success is directly related to elements of our investment
philosophy that include:

• Conservative capital structures that provide a significant liquidity buffer against adversity
• Consistent focus on creating long term value Strong support for organic growth initiatives notwithstanding weak market conditions

Let us update you on a few portfolio company highlights of 2009:

The Apothecary Shops (TAS) achieved record revenues and profitability.
TAS provides specialty retail, mail order, and compounding pharmacy
services to serve patients with complex medical issues such as cancer,
AIDS/HIV, infertility, and vision impairment.

IntriPlex Technologies (IPT) recorded its highest revenue and profit
levels of the decade. IPT designs, develops, and manufactures
specialized, high precision, very high unit volume parts used in hard disk
drives and medical devices.

Total Woman (TW) opened three new locations in Southern California to
broaden its footprint. TW operates women-only fitness and day spa clubs
that offer personal raining, group exercise classes, and skin and body
care services.

Cymetrix hit a new all-time peak in annual revenue while maintaining solid
profitability. The company is a leading provider of outsourced revenue
cycle management services to hospitals.

ABB/ConCise achieved record levels of both revenue and earnings. The
company is the largest distributor of contact lenses and accessories to
independent eye care practitioners in the United States.

Silverado Senior Living (SSL) attained a new high in annual revenue while
opening four communities as well as several new hospice locations. SSL
offers individuals with Alzheimer’s disease a superior quality of life via
assisted living communities, home care, and hospice services.

Secure Mission Solutions (SMS) − one of the largest pure play providers of
network-enabled security services to the federal government. The
Company protects the information systems and data of the Departments
of Defense and Homeland Security, the intelligence community, and
select civilian agencies against cyber attacks, theft, and physical damage.
SMS, led by veteran government services executives Tom Sundling and
Phil Lacombe, acquired WareOnEarth Communications and Sim-G
Technologies. We look forward to working with the SMS team to grow
their business and to protect our nation’s critical infrastructure against a
wide range of threats.

Looking ahead to 2010, we will continue to pursue our strategy of
generating high growth with modest leverage that has been the
centerpiece of our investment efforts for over 25 years. We believe
that the merits of such an approach are especially evident today.