Exhibit 10.4
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October 31, 2006
To:    Jeffrey Janus
From:    International Stem Cell Corporation
Dear Jeff:
The following sets for the terms of your proposed employment with International
Stem Cell Corporation (“ISCC”). ISCC hereby offers you employment with ISCC on
the terms and conditions set forth below, such employment to commence
October 31, 2006. As referred to herein, “ISCC” shall include the public entity
of which ISCC expects to become a wholly owned subsidiary (the “Parent”) through
a pending “reverse merger takeover (the “RTO”) and Lifeline Cell Technology,
LLC, as the context requires.

  1.  
You will be President of ISCC and Lifeline and report directly to the Boards of
Directors of those entities. Your duties and responsibilities will include
leadership and management of the ISCC’s and Lifeline’s research and product
development, marketing, product production, and sales. Responsibilities may be
added, removed or otherwise modified, as the Board deems necessary. It is
expected that Jeff Krstich will continue to be the CEO of ISCC and that you and
he will function in collaboration rather than in a senior/subordinate role. At
such time as Lifeline ceases to be a wholly owned subsidiary, these roles may be
modified as needed.
    2.  
You will serve on the Boards of both ISCC and Lifeline.

  3.  
You will receive a base salary of $220,000, payable semi-monthly. Your status
will be salary exempt. In anticipation of your collaborative relationship to the
CEO, your base salary shall at all times during the 24 months hereafter be not
less than that paid to the CEO of ISCC, but bonuses may be based on different
standards reflecting your differing areas of primary responsibility. You will be
entitled to 15 days paid vacation each year, accruing on a monthly basis. You
will be eligible for coverage under such group health plan and other benefits as
the Company provides to comparable employees, as they are established. (A group
health plan is now being established and is expected to be in place prior to
your commencement date. You will be paid a bonus of $50,000 on or before
December 31, 2007 if milestones mutually agreed between you and Board of ISCC
are met. Because you are already a significant shareholder, you will not receive
any additional stock options at commencement of employment, but will be eligible
for future stock option awards based on performance and results as President of
ISCC and Lifeline without regard or deduction for your existing stock ownership.
Options will vest monthly over a 4-year term.

 

 

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  4.  
If you are requested to relocate to San Diego County, California. Your actual
moving expenses will be reimbursed up to a maximum of $25,000. Additional
reasonable relocation expenses incurred by you may be reimbursed to you upon
consideration and approval by the Board of Directors of Lifeline. In the event
that you are required to move a second time, ISCC will pay all reasonable moving
costs associated with such move and, if such move is required within 2 years of
your move to San Diego County, ISCC will reimburse you for your moving costs and
any actual loss in value upon the sale of your home in San Diego County in an
amount not to exceed $200,000, provided such home is placed on the market at or
near the time of such relocation.

  5.  
Employment with ISCC or Parent is at the mutual consent of the employee and the
company. Accordingly, while the company has every hope that employment
relationships will be mutually beneficial and rewarding, employees and the
company retain the right to terminate the employment relationship at will, at
any time, with or without cause. However, termination pay equal to 12 months of
the initial base salary shall be paid in the event of termination by the company
for any reason other than “for cause”, as customarily defined. Please note that
no individual has the authority to make any contrary agreement or
representation. Accordingly, this constitutes a final and fully binding
integrated agreement with respect to the at-will nature of the employment
relationship. How will the termination pay be paid? Over time, lump sum?

  6.  
You agree to abide by the Company’s policies and procedures, including those set
forth in a Company Employee Handbook when such document is drafted. You will be
required to sign the signature page of this Employee Handbook when it is
completed.

  7.  
For a period of one year after your termination of employment for any reason,
you agree not to, directly or indirectly, hire, attempt to hire, induce or
entice the hire of or interview for hire any employee of ISCC or Lifeline or any
former employee who had been an employee at any time during the one year period
prior to your termination.

  8.  
You further agree that you will upon termination of employment, return to ISCC
and Lifeline all books, records, computer files, manuals, customer lists and
other written, typed, printed, or electronic materials, whether furnished by
ISCC or Lifeline or prepared by you, which contain any information relating to
the ISCC or Lifeline businesses, and you further agree that you will neither
make nor retain copies of such materials after termination of employment.

 

 

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  9.  
If you voluntary terminate your employment under this Agreement, you will not,
for a period of one year after you are no longer employed by ISCC or Lifeline,
solicit customers of ISCC or Lifeline directly or indirectly, either as a
proprietor, stockholder, partner, officer, employee, or otherwise of any other
entity engaged in the stem cell business in the United States, producing and/or
selling same or substantially similar products and services as ISCC or Lifeline
produces and/or sells at such time your employment with ISCC and/or Lifeline may
terminate.

  10.  
In the event of any lawsuit or charge filed with an administrative agency, or
other form of litigation brought against or involving you as a result of alleged
activity, negligence, or any other conduct by you in connection with your duties
and responsibilities on behalf of ISCC or Lifeline, ISCC shall provide and pay
for legal defense on your behalf, as well as indemnify you against any judgment
or other liability that may result from such proceedings unless such activity or
conduct represented willful misconduct on your part.

  11.  
You will be required to sign an Employee Proprietary Information Agreement as
well as the necessary tax and benefit enrollment forms before starting full time
employment. You will also be required to provide proof of your identity and
authorization to work in the United States as required by Federal immigration
laws.

  12.  
Jeffrey, we look forward to you joining our effort and hope the opportunity will
be mutually rewarding. To confirm that you agree to the terms stated in this
letter, please sign, date and return the enclosed copy of this letter.

Sincerely,
International Stem Cell Corporation
By:      /S/ KENNETH C. ADLRICH     
Kenneth C. Aldrich
Chairman of the Board
This will acknowledge my acceptance of this offer of employment.

     
/S/ JEFFREY JANUS
   
Jeffrey Janus
  Date:      October 31, 2006