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July 30, 2009

California Institute for Regenerative Med 210 King Street



San Francisco, 941

Dear CIRM Search Committee:

Ilwasapleasure visiting.your site recently. We appreciated you introducing your organization to . uS,as well as. the time you invested in learning about & Company. This is an exciting time .. in the field Healthcare, and the Biotech l11arketinparticularposes unique opportunities for growth. Levin & Company's legacyiu.building.management teams, and the resulting network we retain, coupledwithCIRM'spositioning, combine to create an unusual synergy, and the potential for .. us, to identify. a world-class caliber Vice President, Research & Development. Tothiseffeot, we are very excited about the potential opportunity to support your critical staffing needs in this effort.

The following letter will serve to delineate the development of a business relationship between Levin & Company and CIRM, and outline a strategic approach for an aggressive recruitment strategy. The design of this plan will be intended to both identify and secure a Vice President, Research & Development forCIRM. The remainder of this communique will serve to provide an overview of our firm, and outline the terms, process and conditions under which, with your authorization, we will proceed.

FiRrvi HiSTORY

Levin & Company, Inc. was founded in 1985 in Menlo Park, California. With over 24 years in business, Levin & Company, Inc. remains a boutique retained executive search firm by design. Our focus over the past two plus decades has been in developing management teams for high growth, life sciences companies. Our culture is designed to provide the best contributions from our highly seasoned team, functioning collaboratively worldwide, in teams from our locations in Boston, San Francisco, Los Angeles, Philadelphia and London. Our Founder, Becky Levin, developed the biotech industry core expertise of our firm, enabling us to carry out senior executive search consulting in a top quality, personalized manner which remains our standard, and she herself served the biotech industry for over 25 years.

Over the years our search approach, which is tailored to the client's unique requirements, has repeatedly enhanced our client's market knowledge and also created a competitive advantage. Not only do we focus on those key success

factors contributing to the "alchemy of a leader" for the client company, but we also share important information on:

" market/demographic

<II organizational strategies for taking charge

<II compensation

competitive information that will assist and financial planning process

in business,

Levin & Company does not subscribe to "off-the-shelf' solutions to staffing issues. VVe have found that the approach to rigorous market and candidate sourcing has proven most successful in identifying, evaluating, and attracting very best executives from high-profile companies whose circumstances are similar to the client organization.

As importantly, our firm's unique history and longevity in the business of biotechnology and healthcare products, provides us with an extraordinary network within the investment community, on Wall Street, and in the Boardroom. This allows us to leverage relationships, networks, databases, and original research as well as internal partner collaboration to assure the highest standards of quality control and comprehensive industry search.

Within our firm, therefore, we utilize networks, databases, and original research as well as internal partner collaboration to assure the highest standards of quality control and comprehensive industry search. We work together as a team throughout the entire recruiting process to assure close communication in all aspects of the search process.

PROFESSIONAL EXPERIENCE I REPUTATION

Users of consulting and professional services can readily attest to what the real value-added and deliverables are in a consulting relationship - "track record." We have an excellent track record in building "high-performance management teams."

Levin & Company has many years of demonstrated success in the development of management teams for Life Sciences clientele. As the demands for seasoned and experienced management began to escalate in the early 1980's, our early relationships at companies such as Genentech and Chiron began to spawn new business for the firm as management from those companies became both entrepreneurs and investors. Our firm made a dedicated commitment to the enhancement of our capabilities in these disciplines. This investment has paid off for both Levin & Company and its clients, on some of the most senior executive level assignments for leading companies in our industry.

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While our focus is our firm has successfully concluded retained

business only the domestic U.S. and Canada, but in England,

Germany, France, Switzerland, Singapore, Australia and Israel. Levin & Company has successfully completed a number of assignments which can attest

our ability to attract a high caliber VP, R&D for RM, and these assignments

will also allow us to leverage our relationships contacts in R&D

community, within the realm Stem Cell and Cell Therapy.

Successfully completed assignments within include:

Stem Cell/Cell Therapy space

@ Osiris Therapeutics- Executive Officer

'" Cellerant Therapeutics - Chief Executive Officer " StemCells, Inc. - Chief Executive Officer

• StemCells, Inc. - Board Director (x2)

• Via Cell - Chief Executive Officer .. ViaCell - Chief Financial Officer '" Via Cell - Board Director (x2)

Levin & Company has also completed numerous executive level assignments within the R&D discipline for both privately held and publicly traded companies, to include:

• Affymax - Executive VP, R&D

• Affymax - VP, Development

• Ambit Biosciences - Sr. VP, Drug Discovery

«I Ambit Biosciences - Sr. VP, Drug Development

• Cellular Genomics - VP, Drug Development

• EntreMed - Sr. VP, R&D

• InteKrin Therapeutics - VP, Preclinical R&D

,. Regulus Therapeutics - VP, Translational Medicine & Preclinical

Research

• XOMA - VP, Research

• Biodel - Chief Medica! Officer III Xencor - Chief Medical Officer

• Plexxikon - Chief Medical Officer

It MAP Pharmaceuticals - Sr. VP, Clinical Development & Medical Affairs III MAP Pharmaceuticals - VP, Clinical Development I Neurology

• Rigel Pharmaceuticals - VP, Clinical Development

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LEVIN & COMPANY KEY PERSONNEL:

If engaged CIRM, Levin & Company would provide a team of experienced

search professionals who would be available throughout the life of the search

This team would leverage the full reach and network of our firm nationwide

contributions from individuals in our multiple offices. A key which we

believe delineates & Company is the fact that our most senior people are responsible the actual execution any assignment The team responsible for the CIRM recruitment would be:

Christos Richards! CEO

If selected as your resource partner for this , Christos will personally

process include providing the strategy and input on the job description,

compensation, and targeting of individuals. In addition, Christos will personally make recruiting calls; interview each finalist in person; lead weekly calls with CIRM search committee; conduct reference checks; and negotiate final compensation and equity packages.

Evan Fishel, Vice President

On behalf of CIRM and in conjunction with CEO Christos Richards, Evan will make recruiting calls, interview candidates, participate in weekly conference calls with the CIRM search committee, and conduct reference checks.

Jed Donnelly, J.D., Vice President, Research

Jed's role on behalf of CIRM will provide the leadership of the identification of appropriate potential candidates who will contacted by Christos and Evan" In addition, Jed will prepare a detailed position description that will serve to garner candidate interest.

Inna Zavadsky, Principal

lnna's role on behalf of CIRM will be to provide coordination activities such as preparing status reports and scheduling weekly update calls with CIRM and Levin & Company, coordinating telephonic or in-person interviews between CIRM and candidates, and other related administrative items.

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Christos Richards - Chief Executive Officer

Christos Richards has dedicated twenty-seven years executive recruitment,

a broad of clients common thread lies in their platforms of

and technology. Beginning in 1982 serving a diversified base of high technology

companies, his practice evolved into Sciences in 1989. Initially serving

environmental consulting firms, Christos shortly thereafter initiated a focus

in biotechnology and biomedical devices, and has now specialized in healthcare for over twenty years. Throughout his career Christos worked with venturebacked early stage, mid-cap, and with Fortune-500 companies, as well as industry associations and non-profit organizations. His clients benefit his international experience in general management, and an ability to communicate across a broad range of science and technology platforms. This includes emerging-growth industries, and the convergence of classical life sciences with high technology.

Christos' accomplishments include:

0; Founding and managing Nexium, lnc., an executive search firm, which served both domestic and international clientele for over ten years.

.. Managing the San Diego search practice for Stanton Chase, a major multinational executive search firm and serving as their North American High Technology Practice Team Leader.

.. Creating and trademarking the brand name Nexium®, which he eventually

sold to a pharmaceuticals marketing company.

With an undergraduate degree completed abroad, Christos is fluent in German and Swiss German, and has an appreciation for the dynamics of recruiting for international companies. He is an active member of LAVA (the Los Angeles Venture Association), a member of TEC (The Executive Committee) Associate Program, and a member of the Leader's Steering Committee for the American Diabetes Association in San Francisco.

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Evan Fishel - Vice President

Evan joined Levin & Company in 1995. Having been steadily promoted, he is currently Vice President and Branch Manager of the San Francisco office. As a recruiter, works closely with clients to appropriate executive

leadership across a range of functions, including clinical

R&D, business development, and management. Recent

successful placements

III Senior VP, Drug Development for a privately held discovery and

development company

• VP, Manufacturing for a publicly traded therapeutics company

III VP, Drug Development a publicly traded therapeutics

Ii VP, Clinical Development for a privately held biornaterials company

III CFO for a privately held therapeutics company

(9 VP, Business Development for a privately held biosciences company

In his previous capacity as Vice President of Levin's Research Department, Evan helped implement a new IT platform, which links each recruiter directly to our database, providing for real-time updates and extremely proactive support on each search conducted in the firm. He also helped build and train the company's exceptional research team, which works closely with both recruiters and clients to provide a well-honed and targeted search. Having been instrumental in expanding Levin's research methodologies, Evan brings that experience-his understanding of the changing biotech environment, his ability to spot trends, his expansive network of contacts-to his work as an executive recruiter.

After attending The Bronx High School of Science, Evan received a SA in English from the University of Michigan and worked in public relations, promotional sales and client development in the food and beverage industry for The Fresh Juice Company. He shares Levin & Company's desire to provide a satisfying search process-and result-to each client.

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Jed Donnelly - Vice President, Research

Jed the Boston office of Levin & in August of 2003 is currently Vice President of Research, having previously served as Director of Research and as a Research Associate, As head of research

department, Jed with the company's recruiters in identifying the

pool of talent each search. Additionally, he works closely with the

recruiters and the clients in developing unique position profiles for each search that are distributed to potential candidates,

Prior to joining the Levin , Jed was a student and Research Assistant at Georgetown University Law Center where was focused on international law. At the same time, Jed served as Managing Editor Georgetown International Environmental Law Review, where, among other things, he managed the research activities of a staff of approximately 30 students, His time on the Law Review not only gave Jed invaluable experience in writing, editing, and research, but it also allowed him to become a published author.

Jed holds a Bachelor of Arts in Biology from Colby College, a Juris Doctorate from Georgetown University Law Center, and is admitted to the Massachusetts Bar.

Inna Zavadsky - Principal

lnna Zavadsky is currently a Principal with Levin & Company's Los Angeles office. She has directly supported the Practice of Christos Richards, Chief Executive Officer, since joining the firm in 2001. inna has been directly responsible for identifying and contributing to the recruitment of the foliowing placements:

III Vice President, Business Development of a drug delivery company in San Francisco

.. Chief Business Officer of a biopharmaceutical company focused in eNS in San Diego

• Chief Financial Officer of a biotechnology company focused in Oncology in San Francisco

She earned her Master of Arts degree in Counseling Psychology from Pacifica Graduate Institute in Carpinteria, CA, and her Bachelor of Arts in Modern Literature from the University of California, Santa Cruz. Trained as a counselor, most recently, she was a Clinical Associate within a private practice setting, specializing in the use of cognitive-behavioral therapy for the treatment of anxiety disorders.

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We believe that Total Client Focus is the operative guideline for success. Since our firm is partner owned and managed we believe as modern-day resource capitalists that we are in a very positive position dictate, monitor, and control both the tempo pace of the assignments as well as the quality of the work

product. Through our own peer review internal quality management practices,

our has been recognized as one of leaders our field, with a reputation for

both innovation results. success closure of greater than 90% is

considered by many to among the highest in our industry.

The is defined by our client base, in both the leading company's in the healthcare products sector, as well as by the quality of venture investor who returns consistently as a Our principle has been on doing quality work, at the Board and senior management level, with the industry's most admired companies and institutions.

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THE SEARCH APPROACH

today's high growth company, senior executives must provide exceptional leadership, maintain the highest levels of performance, impart corporate values and direction. locate and secure the right combination of experience, skills, and leading organizations choose Levin & Company as their search partner. 'Ne thoroughly research each company to identify core values and analyze the organization's corporate culture, then supplement those insights

our knowledge the industry as a whole, to provide an enriched and diverse

search-and a satisfying resolution.

Levin & Company's comprehensive services can assist you throughout search

Candidate Specification Writing

The key to attracting suitable candidates is compelling positioning. Levin & Company has over 24 years of experience in developing position profiles/specifications for senior level executives in the life sciences sector. In order to launch any assignment, we invest 1-3 days in interviews and meetings with key executives and managers within our new client's organization, and meet with partners and employees in order to gain a firm understanding of the position, the organization, including its objectives and culture, as conditions and confidentiality permit. From this we will develop a position specification that suits your business plan and attracts the appropriate leader to help you achieve your goals. It is our policy that we receive formal approval from the search committee before the position specification is distributed to any potential candidates.

Research

Levin & Company's proprietary real-time database and our comprehensive research team provide proactive support all of our offices on every search. Utilizing ali of our internal and external resources we develop an in depth target list of prospective domestic and internationally based candidates covering appropriate targets. Early in the process, we calibrate this list with our clients to ensure consensus on the target profile. Our proprietary database of over 60,000 life science executives, professionals, Board Directors, Bankers, Venture Investors, Academicians, etc., is maintained within a highly powerful IT platform designed for efficient mining and manipulation. This cutting edge technology, coupled with our industry-specific knowledge, breadth of experience, superior network and exceptional standards, helps drive Levin & Company's extraordinary success rate. The Research is executed by Levin & Company's own Research Department, led by Jed Donnelly, who has served with the firm for a total of over six years.

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Recruiting, Evaluation and Referencing

Once the potential candidate list is developed we each individ to determine well they stated criteria either by telephone, videoconference or in person (as dictated by the client). You only need to look the top candidates-and we provide a thorough evaluation of for all finalists presented. Our firm is committed to ensuring the referencing process is

one of 'rubber-stamping', but rather fact is designed to ensure that the

candidates you seek meet the professional, personal and ethical standards you seek. We recommend up to ten, but not less than six references any engagement we execute.

Negotiatio,!

Levin & Company has over 24 years experience in negotiating compensation packages for senior level life science hires. Such complex packages have typically included base, bonus, equity, and relocation components. We have maintained detailed compensation data for over two decades and we retain strong relationships with compensation specialists as well as access to the most up to date surveys and reports. In particular, Levin & Company has deep experience in negotiating final packages for early stage and/or privately held companies. While we recognize that CIRM may have limitations on what it can offer (such as a bonus), we have had demonstrated experience in recruiting for clients with similar restrictions, such as early stage companies which are unable to offer bonuses, or international clients which cannot provide an equity package. On behalf of or in conjunction with the client company we can negotiate all facets of candidate offers, including compensation and relocation.

Relocation and Spousal Assistance

Placing a senior level candidate may require additional consideration. If necessary, we offer services such as advice on additional employment opportunities, real estate contacts and counseling on local schools for candidates needing to relocate themselves and their families.

Follow UJ!

We build long-term relationships. After the executive is in place, we stay in contact with both the client company and the candidate to ensure the success of the placement. If our placement resigns or is terminated for cause within the first 12 months of hire date, we will conduct a replacement search for expenses only. At Levin & Company, we strive to surpass your expectations. Our attention to detail, comprehensive screening process, insightful evaluations, and continued assistance from inception to completion reflect our philosophy of premium service.

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FEES AND EXPENSES

Levin & Company charges a professional retainer fee and expenses for our Our standard fee is one-third of the successful candidate's projected cash compensation, including base salary and anticipated bonuses.

a position as this within industry, the normal range of first year

compensation is from $225,000 $350,000, resulting in a typical retainer fee of between $75,000 and $116,667. Levin & Company is keenly aware that CIRM has an expected salary range for this position of $180,000 $332,000. Given this, Levin & Company proposes to set the upfront retainer at the low end of that scale ($60,000) with a fourth and final payment due upon completion of the search such that the total fee paid would equal one-third of actual However, in order to best serve CIRM, Levin & Company also proposes a cap of $90,000 on the retainer fee. Under this structure, the payment schedule would be as follows:

1. $20,000: minimum initial payment of 1/3 of upfront retainer fee due upon execution of the agreement. Search and consultant service to commence immediately upon execution and payment.

2. $20,000: minimum second retainer payment payable thirty days after execution of the agreement.

3, $20,000: minimum third retainer payment payable sixty days after execution of the agreement.

4. A fourth and final payment shall be made when the position is filled and the annual salary and bonus(es) become known. The amount due at this time shall be such as to make the total fee paid to Levin & Company equal to the lesser of $90,000 or one-third of the total first year's cash compensation,

Levin & Company generally incurs monthly administrative expenses in the range of $400 to $600, which are then billed back to the client on a monthly basis. Although the aggregate amount of the monthly fees would not be expected to reach $6000, Levin & Company proposes setting a maximum cap on administrative fees at 10% of the upfront retainer ($6,000). In addition to our professional fee and administrative expense, we bill the client directly for actual out-of-pocket costs for candidate/consultant travel, which will be done in accordance with CIRM's travel policies.

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TIMELINE

Our process is milestone and timellne driven. Most searches should be expected to take four to six months from launch to candidate start date. We have searches in as little as 39 days, and our philosophy is that any search taking longer than six months the potential for a dissatisfied client. However, we are committed you as a client until the search is completed. Our references will speak the fact that no matter how challenging, we never give

Again, four to months is our goal, from commencement to start date. In order to achieve this outcome, we promise the following deliverables, assuming a start date of August 17, 2009:

o August 24th - Delivery of first draft of Position Profile

o August 31st - Delivery of Target List for recruitment. Conference call with CIRM Search Committee to review list. Finalize Position Profile. Begin recruiting calls.

o Week of September 14th - First Progress Meeting with client and presentation of first panel of candidates

o Week of September 28th - Interviews with CIRM Search Committee commence for first panel of candidates

o October 1 z" - Second panel of candidates presented (if needed)

o October is" - Second and third round of candidate interviews (first panel) with CIRM Search Committee

o October ze" - Interviews commence for second panel of candidates with CIRM Search Committee

o November 9th - Second and third round of candidate interviews (second panel) with CIRM Search Committee

o November 23rd - Determine short list of potential finalists

o November so" _. Top three candidates commence final interviews with CIRM Search Committee

o December r" - Finalist selected; referencing begins; compensation negotiations begin

o December 21 sl - Search closure

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Levin & Company has never worked with CIRM, and therefore our firm has no billings in the past 12 months with CIRM. Levin & Company meets or exceeds all the minimum qualifications to respond to the CIRM Request For Proposal:

1. Levin & Company has over years of exclusive specialization in the

placement of senior business executives and scientific candidates within

the Biotechnology Pharmaceutical industry.

& Company has successfully completed approximately 200 executive searches in the Biotech and/or Pharmaceutical industry within the last five years.

3. If selected, & Company will staff this search engagement with

professionals out of multiple offices (see Key starting on page

4. Levin & Company meets all independent consultant insurance requirements. Levin & Company has maintained workers' compensation insurance as required under California State Law since 1985.

We thank you for the opportunity to submit our proposal, and we are very pleased to be considered as a resource partner in your executive staffing requirements, and to have the opportunity to further our professional relationship with your organization. In addition to the three references listed on the attached form, further references are available upon request. We look forward to your thoughts, and if engaged, we are certain that you will be very pleased with the results.

Christos Richards Chief Executive Officer

Levin & Company, Inc.

Attachments

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STATE OF CALIFORNIA-DEPARTMENT OF FINANCE

PAYEE DATA RECORD

(Required when receiving payment from the State of California in lieu of IRS W-9) STD. 204 (Rev. 6-2003)

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NOTE: Governmental entities to submit this form.

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PrQl20scr References

Submission of this attachment is mandatory. Failure to complete return this

attachment with your bid may cause your bid to be rejected and deemed non-responsive.

List references

similar to the scope work to

the

which are

REF'ERENCE 1

071509CS/AC/EB

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