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J A N U A R Y 2 0 0 6
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Bay Area Equity Fund I

• JPMorgan, the Bay Area Council, and the Alliance
  for Community Development partnered to create the
  Bay Area Equity Fund I, LP, managed by JPMorgan
• The Bay Area Equity Fund I, LP held its final
  close on June 30, 2004 at 75 million
• JPMorgans focus is to deliver market-rate
  venture capital returns while driving social and
  environmental improvement in the Bay Areas low
  and moderate-income neighborhoods
• Investments are made primarily in private,
  mid-to-late stage growth companies with a focus
  on
• Technology
• Healthcare
• Specialty consumer goods and services
• We co-invest with leading private equity and
  venture capital firms
• Abingworth, Burrill, Canaan, Domain, El Dorado,
  Kleiner Perkins, NEA, Sprout, Steamboat, Texas
  Pacific Group, Versant,
• Currently, the Fund has committed approximately
  47 of the assets under management

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BAEF Limited Partners
Limited Partners by sector

• Non-financial corporations
• Catholic Healthcare West
• Insurance Companies
• California State Automobile Association
• Mercury Insurance Group
• Pacific Life
• PMI Group
• Foundations
• Dan and Stacey Case Foundation
• F.B. Heron Foundation
• Ford Foundation PRI
• John D. and Catherine T. MacArthur Foundation
  PRI
• Sand Hill Foundation
• Peninsula Community Foundation
• Annie E. Casey Foundation

• Pension Funds
• Contra Costa Employees Retirement Association
• Banks
• Citigroup
• Far East National Bank
• Greater Bay Bancorp
• JPMorgan Chase
• United Commercial Bank
• Union Bank of California
• Wells Fargo
• USBancorp
• Washington Mutual Bank
• eTrade Bank
• Schwab Bank

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Bay Area Equity Fund I, LP structure
JPMorgan
Bay AreaEquity Fund I, LLC
Limited Partners
General Partners JPMorgan and Community Partners
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• 2.0 management fee - JPMorgan
• 0.5 management fee - Bay Area Council
• 19 carried interest JPMorgan
• 1 carried interest Bay Area Council
• 1 carried interest Alliance for Community
  Development

• Pay 2.5 management fee
• Receive 79 of carried interest

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Current BAEF portfolio - Liquidity events

• Realized
• Peninsula Pharmaceuticals, Alameda, CA - 1.0
  million (December, 2004)
• Filed for IPO in January 2005, acquired in June
  2005 by Johnson Johnson for 240 million

IRR analysis

• In Process
• PowerLight, Berkeley, CA - 5.0 million (August,
  2005)
• Filing for IPO (MSDW, JPM) in December, at a
  range of 300-350 million (approximately 3x
  return)
• Right to sell 1/3 of position on IPO

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Current BAEF portfolio Operating highlights

• Elephant Pharmacy, wellness retailer, Berkeley,
  CA - 2.16 million (June, 2004)
• Hired new CEO (Cost Plus), and new Executive Vice
  Chairman (Fresh Fields, McCown DeLeeuw). Opened
  second store in San Rafael in December 2005. To
  open in Los Altos in April 2006.
• ReShape, software for semiconductor design, San
  Jose, CA - 1.89 million (June, 2004)
• Now in customer beta tests with redeveloped
  hierarchical design software product.
• XDx, molecular diagnostics, South San Francisco,
  CA - 3.5 million (October, 2004)
• Began commercial operations early in 2004, now
  completed tests at transplant centers. Completed
  26.5 million follow-on financing at increased
  price in December 2005.
• Efficas, nutraceutical developer, Boulder, CO -
  2.25 million (October, 2004)
• Opened Richmond office, hired a CSO, evaluating 4
  new compounds for acquisition slated to generate
  significant revenue in 2006.
• FivePrime Therapeutics, biotech, San Francisco,
  CA - 1.0 million (February, 2005)
• Moved to Mission Bay in San Francisco, in-vitro
  validation of two leads, most productive
  screening quarter 80,000 data points, 8 new
  assays, hits yielding several new proteins, 600
  proteins added to screening set. Planning
  pre-clinical trials and evaluating potential
  partners.
• Bentek, manufacturing services, San Jose, CA -
  0.50 million (April, 2005)
• Substantially profitable diversifying beyond the
  semiconductor business. Won new business from
  Applied Materials, and expects continued growth
  in 2006.
• Labcyte, laboratory instruments for nanoliter
  samples, Sunnyvale, CA - 1.8 million (June,
  2005)
• Since product launch in Q404, has sold into 7 of
  the top 10 pharma, with several of these key
  customers buying multiple units.
• PowerLight, solar power integrator/installer,
  Berkeley, CA - 5 million (September, 2005)
• Is a long-established US leader in deployment of
  large-scale PV systems with 59 of the US market
  from 2001 to 2004.

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Bay Area Equity Funds emerging social imprint

• Job Creation
• In the next six months, Elephant Pharmacy will be
  creating approximately 120 new jobs for low and
  moderate income individuals in Marin and Santa
  Clara counties
• Agricultural Land Preservation Sustainable
  Agriculture
• As a result of our investment, Efficas, a leading
  player in the emerging nutraceutical industry,
  opened its Bay Area office in Richmond
• The Company will create agricultural jobs in
  Eastern Contra Costa county, where preserving
  agricultural land is a public policy priority,
  and take the lead in introducing a new high-value
  crop under sustainable agricultural practices
• Urban Renewal
• In November, FivePrime Therapeutics will become
  the first biotech company to locate in San
  Franciscos Mission Bay neighborhood
• Due to our investment in FivePrime, the BAEF team
  convened a meeting of key corporate, government
  and non-profit entities located in Mission Bay to
  identify and optimize efforts to serve the
  neighborhoods low-income constituents. The
  second Community Outreach meeting occurred
  October 7th, matching LMI residents in Mission
  Bay with funding and program sources from MBCO
  members
• Clean Tech Leadership
• In the next year, PowerLight will create
  approximately 30 new jobs for low and moderate
  income individuals in East Bay communities
• Power light's IPO will help establish the Bay
  Areas leadership in the developing clean tech
  industry
• Positive Impact on CA-wide and CRA policies and
  initiatives
• BAEF team is on CALCEF Board, contributed to the
  City of San Franciscos proposal that won the
  Stem Cell research institute, participating in
  the Willie Brown Institutes effort to modernize
  the CRA, building a relationship with the
  Greenlining Institute
• Human Resources Practice Council
• In response to varied performance practices and
  uneven information, BAEF will establish a council
  of HR Managers to review and promote best
  practices in HR area

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Brentwood Ceremony June 13, 2005

• Efficas and the Fund convened a ceremony to
  highlight the successful initiation of a new
  high-value agricultural crop in the Agricultural
  Core of Contra Costa County and to show
  appreciation for all of the key government
  entities and farming constituencies who were
  instrumental in locating the optimal test plot
  location
• Through the Funds relationships with Contra
  Costa County, introductions were made for Efficas
  to agricultural officials who played a critical
  role in identifying potential growers, locating
  an optimal site, and informing local growers of
  the benefits of the Efficas crop. The Fund also
  coordinated similar assistance for Efficas in
  siting its Bay Area office in an Enterprise Zone
  in Richmond
• The ceremony marked the successful planting of a
  test crop for Efficas in partnership with Tom
  Bloomfield of the Bloomfield Vineyards in
  Brentwood
• Participants
• Bay Area Council n Contra Costa County Farm
  Advisor
• JPMorgan n Contra Costa County Agricultural
  Commissioner
• Bloomfield Vineyards n Efficas
• Brentwood City Manager n Mayor of Brentwood
• Contra Costa County Board of Supervisors/CCCERA n
  Richmond City Council

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Current investment opportunities

• Solaicx, San Jose, CA
• Innovating a process to manufacture high
  performance silicon for use in solar energy
  panels
• Photo TLC, Petaluma, CA
• Provides digital imaging gift products and photo
  restoration services for large retail stores like
  CVS, Walgreens and WalMart
• Fat Spaniel Technologies, San Jose, CA
• Has developed software and web-based integration
  services for monitoring and controlling the
  output of solar-electric systems
• eMeter, Redwood City, CA
• Developed software for wireless metering and
  maintenance of power transmission allowing large
  energy utilities like Jacksonville Electric and
  Texas Power to optimize their automated meter
  reading systems
• NuSewCo, Oakland, CA
• Mass customization service for branded retail
  apparel and bags for companies like Nike and
  Reebok (Adidas)
• Alvine Pharmaceuticals, San Jose, CA
• Developing enzyme therapy and other therapeutics
  for Celiac Sprue and related diseases, team and
  technology from Stanford University research lab

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Double Bottom Line Strategy Gets BAEF Into Deals

• Elephant Pharmacy
• At the time of the investment, Elephant Pharmacy
  considered the second bottom line focus of the
  Fund to be consistent with its corporate culture
  an important consideration in accepting the
  Fund as co-lead, despite our reducing the
  valuation by 50.
• FivePrime Therapeutics
• The company actively sought our investment to
  complement its own double bottom line
  initiatives, and persuaded its board and lead
  investors to carve out space in what turned out
  to be an oversubscribed round.
• Peninsula Pharmaceuticals
• Looking for outside investor to price their
  round, Peninsula selected BAEF in part because of
  the double bottom line strategys high
  correlation with the mission of management team
  and the corporate culture
• PowerLight
• The company rejected three large, prestigious
  private equity funds and preferred to work with
  BAEF in part due to our focus on clean technology
  and environmental issues in general

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