Exhibit 10.1

 

*** Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

and 240.24b-2

 

AMENDMENT TO NOTICE OF LOAN AWARD – RFA 10-05A - CIRM Disease Team Therapy

Development Awards - Part II Research Award

California Institute for Regenerative Medicine

 

Amendment Number: 01

Amendment Date: 05/12/2016

 

Award Number: DR2A-05735 Total Award Amount: $19,782,136 Awardee Name: Capricor,
Inc Project Period Start Date: 01/01/2013 Principal Investigator: Rachel
Ruckdeschel Smith Project Period End Date: 12/31/2017 (Estimated) Awardee ID:
PR-Y0027A-LA     Project Title: Allogeneic Cardiac-Derived Stem Cells for
Patients Following a Myocardial Infarction

 

Authorized Organization Official and Address: Official and Address to Receive
Payments: AJ Bergmann, VP of Finance AJ Bergmann 8840 Wilshire Blvd. 2nd Floor
8840 Wilshire Blvd., 2nd Floor Beverly Hills, CA 90211 Beverly Hills, CA 90211

 

This Amendment establishes final Operational Milestones and milestone
disbursements for the remainder of the Award. The terms and conditions of the
original NLA and any prior Amendments to the NLA continue in full force and
effect except for those changes specified in this Amendment. The Principal
Investigator and Authorized Organizational Official must sign and return this
Amendment to CIRM within 30 days of the Amendment date stated above. CIRM may
hold future payments on this Award until the fully signed Amendment is received.
The following changes are effective immediately:

 

A.   Change in Milestones, Disbursements, and Award Terms

 

The Go/No-Go and Progress Milestones previously established in ‘Appendix A’ of
the NLA shall be replaced with the following Operational Milestones (OM) on a
going forward basis. These Operational Milestones shall be effective immediately
and shall incorporate the last milestone outlined in CIRM’s letter to Capricor,
Inc., dated May 14, 2015.

 

OM#   Milestone  

Projected

Date

  Payment  

Projected

Payment Date

                      1   […***…]   May 2016   $2,000,000   Within 30 days after
reaching OM                       2   […***…]   August 2016   $1,750,000  
Within 30 days after reaching OM                       3   […***…]      
$[…***…]   Within 30 days after reaching OM                       4   […***…]  
    $[…***…]   Within 30 days after reaching OM                       5  
[…***…]*   […***…]   $[…***…]   Within 30 days after reaching OM                
      6   […***…]   […***…]   $[…***…]   Within 30 days after reaching OM  

 

*[…***…]

 

CIRM will disburse the remaining funds on this award based on achievement of the
Operational Milestones specified above. An “Operational Milestone” is an
objective event that is indicative of project progress. Upon CIRM’s
determination that the Awardee has successfully completed an Operational
Milestone, the funds associated with that milestone, as specified above, will be
disbursed. The final Operational Milestone identified defines the award end date
for the project. If funds allocated to a specific Operational Milestone
(including both CIRM funds and the Awardee Co- Funding) are exhausted prior to
achievement of that milestone, the Awardee is responsible for covering any
remaining costs.

 

*Confidential Treatment Requested

 

 

 

 

If CIRM determines, in its sole discretion, that Awardee has not satisfied an
Operational Milestone as set forth above, CIRM may suspend disbursements until
such time as Awardee satisfies the Operational Milestone. Upon suspending
disbursements, CIRM may permanently cease disbursements if the Awardee does not
satisfy the Operational Milestone within four (4) months of the date that the
Operational Milestone was scheduled to have been satisfied, or if the delay is
not addressed to CIRM’s satisfaction, as determined by CIRM in its sole
discretion.

 

Notwithstanding the foregoing, it is acknowledged that the dates listed in the
foregoing schedule are projections and that the failure to achieve any milestone
by the dates so indicated, by itself, will not constitute a default under the
Loan Agreement.

 

Suspension Events are pre-defined conditions that trigger a hold of CIRM funding
until the Suspension Event has been resolved, if resolvable. For this award,
Suspension Events include any event that halts or terminates the project, which
includes, for example, a clinical hold by the FDA. The Awardee must immediately
report the occurrence of a Suspension Event to CIRM and must submit a plan to
resolve the issues associated with the Suspension Event to CIRM within 30 days
of the Suspension Event. Awardee may only use CIRM funds for allowable Project
Costs for up to 30 days following the occurrence of a Suspension Event. After 30
days, Awardee must use its own funding for the project, unless CIRM, in its sole
discretion, determines that Awardee has satisfactorily resolved the Suspension
Event and hence can resume expenditure of CIRM funding. If CIRM determines, in
its sole discretion, that the Suspension Event cannot be cured, or will not be
cured by the Awardee’s proposed plan, CIRM may, in its sole discretion,
terminate the Award.

 

B.   Change of Award Period and Reporting Requirements

 

The final Operational Milestone #6 “File final Clinical Study Report” represents
the end date of the award, currently estimated to be 12/31/2017. This date
represents the date through which CIRM-funded activities can be conducted and
CIRM-funded expenses can be incurred or obligated. This award end date is an
estimate and can be adjusted without requiring CIRM’s prior approval

 

This Award will continue to require the submission of Quarterly Progress
Reports, Quarterly Financial Reports and a Financial Milestone Check-In Report
per the NLA, but we will replace the Annual Progress & Annual Financial Reports
requirement with Operational Milestone (OM) Progress & Financial Reports, as
outlined below:

 

Report Type   Report Period   Due Date           Financial Milestone Check-In  
6-Month Forward-Looking Cash-on-Hand   06/01/2016 OM Progress Report   OM #1  
06/01/2016 (Est.) OM Financial Report   OM #1   07/15/2016 (Est.) OM Progress
Report   OM #2   08/01/2016 (Est.) OM Financial Report   OM #2   09/15/2016
(Est.) Progress Report   Year 4 Q3         (07/01/2016 – 09/30/2016)  
10/15/2016 Financial Report   Year 4 Q3         (01/01/2013 – 09/30/2016)  
11/01/2016 Financial Milestone Check-In   6-Month Forward-Looking Cash-on-Hand  
12/01/2016 Progress Report   Year 5/NCE Q1 (01/01/2017 – 03/31/2017)  
04/15/2017 Financial Report   Year 5/NCE Q1 (01/01/2013 – 03/31/2017)  
05/01/2017 Progress Report   Year 5/NCE Q2 (04/01/2017 – 06/30/2017)  
07/15/2017 Financial Report   Year 5/NCE Q2 (01/01/2013 – 06/30/2017)  
08/01/2017 Financial Milestone Check-In   6-Month Forward-Looking Cash-on-Hand  
09/01/2017 OM Progress Report   OM #5   10/01/2017 (Est.) Progress Report   Year
5/NCE Q3 (07/01/2017 – 09/30/2017)   10/15/2017 Financial Report   Year 5/NCE Q3
(01/01/2013 – 09/30/2017)   11/01/2017 OM Financial Report   OM #5   11/15/2017
(Est.) Progress Report   Year 5/NCE      (01/01/2017 – 12/31/2017)   01/15/2018
OM Progress Report   OM #6   02/01/2018 (Est.) OM Financial Report   OM #6  
03/15/2018 (Est.) Financial Report   Year 5/NCE      (01/01/2017 – 12/31/2017)  
04/01/2018

 

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By continuing to accept and use CIRM funds provided under this award, Awardee
and Principal Investigator accept the modified terms reflected in this
Amendment.

 

/s/ Romona Doyle, M.D.

Ramona Doyle, M.D.

Vice President, Therapeutics, CIRM

 

/s/ Rachel Ruckdeschel Smith

Rachel Ruckdeschel Smith

Principal Investigator, Capricor, Inc.

 

/s/ AJ Bergmann

AJ Bergmann

Authorized Organization Official, Capricor, Inc.

 

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