EX-10.36



 Exhibit 10.36 
 SIGN AND RETURN THIS PAGE TO CIRM DR2A-05416 
 NOTICE OF LOAN AWARD – CIRM
RFA 10-05: Disease Team Therapy Development 
 Research Awards 

California Institute for Regenerative Medicine 
 Issue Date: April 9th, 2013 

							
	 Loan Number:
 Loan
Recipient Name:
	 	 DR2A-05416

StemCells, Inc.
	 	Budget Period:	  	On or before 1/1/2014
	Organization ID:	 	PR-Y0027A-LA	 	Project Period Start:	  	On or before 1/1/2014
	 Principal Investigator:

Co-Principal Investigator (s):
	 	 Alexandra Capela

Frank LaFerla
	 	Project Period End:	  	 6/30/2017 (assuming a

7/1/2013 Project Start Date)

	Project Title:	 	Restoration of memory in Alzheimer’s disease: a new paradigm using neural stem cell therapy

  

			
	Authorized Organizational Official and Address:	  	Official and Address to Receive Payments:
	 Ann Tsukamoto, Executive VP, Res & Dev
 7707 Gateway Blvd.
 Newark, CA 94560
	  	 Rodney Young, Chief Financial Officer
 7707 Gateway Blvd.
 Newark, CA 94560


 The California Institute for Regenerative Medicine hereby awards a loan in the amount of
$19,309,403 to be disbursed over a total period of 4 years to StemCells, Inc. (Organization ID PR-Y0026A-SF) in support of the above referenced project. This award is made pursuant to the California Stem Cell Research and Cures Act
(Health and Safety Code section 125290.10 et. seq.) and is subject to the Terms and Conditions referenced below. Capitalized terms are defined herein or in the CIRM Loan Administration Policy, (LAP), a copy of which is attached as
Exhibit B to the Loan Agreement between CIRM and StemCells, Inc., dated April 5th, 2013 (“Loan Agreement”), or in the Loan Agreement, as applicable. 
 By accepting this
Loan, the Loan Recipient warrants to CIRM that any funds expended under the award will be used for the purposes set forth in the approved application and this Notice of Loan Award (NLA) and agrees to comply with all applicable CIRM regulations and
standards. 
 To accept this Loan, the Principal Investigator and Authorized Organizational Official must sign and return this NLA to CIRM
within 45 days of the issue date. Payment will be issued only after the signed NLA is received by CIRM. Loan funds will be sent to the organization’s address listed above under Official and Address to Receive Payments
unless an updated address is provided in the box below. If the applicant cannot accept the award, including the legal obligation to perform in accordance with the provisions of this NLA, it should notify CIRM immediately.

 If you have any questions about this award, please contact the CIRM staff referenced on page 5. 

 

			
		 	Updated Address to Receive
Payments:
		 
		 
		 
		 
	Elona Baum, Esq.	 
	General Counsel and Vice President,	 
	Business Development	 
	California Institute for Regenerative Medicine	 

 AWARD ACCEPTANCE: The Principal Investigator and Authorized Organizational Official must sign below and return the entire
NLA to CIRM to accept the Loan award on the terms provided herein and in the Appendices which are attached hereto and incorporated herein. 
  

					
	 	  	 Principal Investigator
	  	
Authorized Organizational Official

	 Name
	  	Alexandra Capela	  	Ann Tsukamoto
	 Signature
	  	/s/ Alexandra Capela	  	/s/ Ann Tsukamoto
	 Date
	  	April 10, 2013	  	April 10, 2013

 SIGN AND RETURN ALL PAGES TO CIRM 
 [****] Certain information has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 









			
	NOTICE OF LOAN AWARD        	 	        DR2A-05416

  

 TERMS AND CONDITIONS OF AWARD 

 

	A.	This award is based on the application submitted to CIRM, and as approved by the Independent Citizens’ Oversight Committee (ICOC) on the above-titled project and
is subject to the terms and conditions incorporated either directly or by reference in the following: 

  

	 	1.	The California Stem Cell Research and Cures Act (Health and Safety Code Section 125290.10 et. seq.) and regulations adopted by the ICOC.


  

	 	2.	The CIRM Loan Administration Policy (Cal. Code Regs., tit. 17, § 100800 et seq.), the CIRM Scientific and Medical Accountability Standards (Cal. Code
Regs., tit. 17, § 100100 et seq.), the CIRM Intellectual Property and Revenue Sharing Requirements for Non-Profit and For-Profit Grantees (Cal. Code Regs., tit. 17, § 100600 et seq.). 


 

	 	3.	The terms and requirements detailed in RFA 10-05: CIRM Disease Team Therapy Development Research Awards. 


 

	 	4.	The Progress Milestones and Go/No Go Milestones set out in Appendix A to this NLA and in the Loan Agreement executed by CIRM and Loan Recipient, attached hereto as
Appendix B. In the event of a conflict between this Notice of Loan Award and the Loan Agreement, the terms of the Loan Agreement will prevail. 

  

	 	5.	Budget detail for the Principal Investigator and the Co-Principal Investigator(s) set out below. 


 

	B.	The CIRM-funded project shall commence no later than January 1, 2014. The Loan Recipient shall notify CIRM at least 30 days in advance of its intended start date
so that CIRM has adequate time to conduct Pre-Funding Administrative Review (PFAR) of the project. During PFAR, the Loan Recipient shall submit an updated budget, personnel listing, timelines, protocol approvals, and any other information and
documents deemed relevant by CIRM. The Loan Recipient shall not receive any disbursement of CIRM funds, and shall not commence the CIRM-funded project, until PFAR has concluded, and CIRM has reviewed and approved all relevant documents.


  

	C.	If the Loan Recipient fails to give notice by December 1, 2013, of its intention to commence the CIRM-funded project, or fails to commence the CIRM-funded project
by January 1, 2014, CIRM may terminate the award. 

  

	D.	In applying for CIRM funding, Loan Recipient represented to CIRM that it possesses certain intellectual property relevant to the CIRM-funded project (prior IP). These
representations were material to CIRM’s funding decision. Accordingly, Loan Recipient shall take all appropriate steps to maintain and preserve its patent rights in such prior IP, and shall not abandon any such rights without prior written
approval of CIRM. 

  

	E.	If CIRM determines, in its sole discretion, that Loan Recipient has not satisfied a Progress Milestone, CIRM may suspend Disbursements until such time as Loan Recipient
satisfies the Progress Milestone. Upon suspending Disbursements, CIRM may convene its progress Evaluation Committee and may seek input from Loan Recipient in order to evaluate the circumstances of the delay, including but not limited to, its cause,
impact and any mitigating factors; provided, however, that CIRM may permanently cease Disbursements if Loan Recipient does not satisfy the Progress Milestone within four (4) months of the date that the Progress 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. 

  

	F.	Subject to the provisions of Section 4.4(c) of the CIRM Loan Agreement, CIRM may suspend or permanently cease Disbursements if CIRM determines, in its sole but
reasonable discretion, that a No Go Milestone has occurred (as defined in the Loan Agreement) or that Loan Recipient has not satisfied a Go/No Go Milestone. 


 

	G.	CIRM has the right to attend as an observer key Food and Drug Administration (FDA) meetings regarding the CIRM-Funded Project, including but not limited to any pre-
pre-IND meeting, pre-IND meeting, clinical milestone meeting, or clinical hold meeting (FDA Meetings). CIRM also has the right to review any data 

 [****] Certain information has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. 

  










			
	NOTICE OF LOAN AWARD        	 	        DR2A-05416

  


	 	
package(s) or other information, including confidential and/or proprietary information, provided by Loan Recipient to the FDA in connection with such FDA Meetings, as well as any FDA Meeting
minutes relating thereto, and to share such information with CIRM’s confidential advisers. To facilitate CIRM’s participation in FDA Meetings, Loan Recipient shall notify CIRM as soon as practicable after it has scheduled an FDA Meeting,
and shall, upon request, provide CIRM a copy of any data package or other information it intends to provide or has provided to the FDA, as well as any FDA Meeting minutes. 


 

	H.	The timing of the distribution of funds pursuant to this award shall be contingent upon the availability of funds in the California Stem Cell Research and Cures Fund in
the State Treasury, as determined by CIRM in its sole discretion. 

 Please check the CIRM website for updated policy documents:
http://www.cirm.ca.gov/cirm-operations/Regulations 
 AWARD DETAIL (U.S. Dollars): 

 

																	
	 	  	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 
	 Total CIRM Project Costs
	  				 				 				 			
	 CIRM Principal Investigator
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 CIRM Co-Principal Investigator (1)
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 APPROVED BUDGET TOTAL
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Grantee Matching Funds
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 PI: Alexandra Capela 
  

																	
	 	  	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 
	 Personnel Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Travel
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Supplies
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Equipment
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Consultants/Subcontracts
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Total Direct Project Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Facilities Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Indirect Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 APPROVED BUDGET TOTAL
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 Co-PI: Frank LaFerla 
  

																	
	 	  	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 
	 Personnel Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Travel
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Supplies
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Equipment
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Consultants/Subcontracts
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Total Direct Project Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Facilities Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
	 Indirect Costs
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 APPROVED BUDGET TOTAL
	  	 	[****	] 	 	 	[****	] 	 	 	[****	] 	 	 	[****	] 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 [****] Certain information has been omitted and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. 

  










			
	NOTICE OF LOAN AWARD        	 	        DR2A-05416

  

 SEMI-ANNUAL INSTALLMENTS ON CIRM DISBURSEMENTS 
 Disbursements will be made in semi-annual installments, issued at the beginning of each 6-month period. These periods will be tied to the project start date and payments will be made based on the figures
provided above. The disbursement schedule for Years 2, 3 and 4 assumes that all Go/No-Go and Progress milestones are met. If some milestones are unmet at the end of Year 1, 2, or 3, CIRM may adjust the disbursement schedule for subsequent years,
based on the Project Costs associated with the elements of the milestones that are unmet, after consultation with the Loan Recipient. 

Disbursement Schedule: 
  

									
	 Payment #:
	  	 Type
	  	Schedule Date**	  	Amount	 
	1	  	Pre-Award Financial Due Diligence*	  	4/1/2013	  	 	[****	] 
	2	  	Year 1 Q1Q2 Payment	  	~7/1/2013	  	 	[****	] 
	3	  	Year 1 Q2Q3 Payment	  	~1/1/2014	  	 	[****	] 
	4	  	Year 2 Financial Due Diligence*	  	~7/1/2014	  	 	[****	] 
	5	  	Year 2 Q1Q2 Payment	  	~7/1/2014	  	 	[****	] 
	6	  	Year 2 Q3Q4 Payment	  	~1/1/2015	  	 	[****	] 
	7	  	Year 3 Financial Due Diligence*	  	~7/1/2015	  	 	[****	] 
	8	  	Year 3 Q1Q2 Payment	  	~7/1/2015	  	 	[****	] 
	9	  	Year 3 Q3Q4 Payment	  	~1/1/2016	  	 	[****	] 
	10	  	Year 4 Financial Due Diligence*	  	~7/1/2016	  	 	[****	] 
	11	  	Year 4 Q1Q2 Payment	  	~7/1/2016	  	 	[****	] 
	12	  	Year 4 Q3Q4 Payment	  	~1/1/2017	  	 	[****	] 

  

	*	Amounts specified in section 4.6 (b) of the Loan Agreement will be delivered by CIRM directly to the service provider. 


	**	Assumes a Project Start Date of July 1, 2013. 

 REPORT SCHEDULE 
  

					
	 Report Type
	  	Report Period	  	Due
Date**
	 Quarterly Progress Report
	  	Year 1 Q1	  	10/1/2013
	 Quarterly Cash-on-Hand Report
	  	Year 1 Q1	  	10/15/2013
	 Financial Milestone Review
	  	Year 1Q2	  	12/1/2013
	 Quarterly Progress Report
	  	Year 1 Q2	  	1/1/2014
	 Quarterly Cash-on-Hand Report
	  	Year 1 Q2	  	1/15/2014
	 Quarterly Progress Report
	  	Year 1 Q3	  	4/1/2014
	 Quarterly Cash-on-Hand Report
	  	Year 1 Q3	  	4/15/2014
	 Financial Milestone Review
	  	Year 2	  	6/1/2014
	 Annual Progress Report
	  	Year 1	  	7/1/2014
	 Annual Financial Report
	  	Year 1	  	10/1/2014
	 Quarterly Progress Report
	  	Year 2 Q1	  	10/1/2014
	 Quarterly Cash-on-Hand Report
	  	Year 2 Q1	  	10/15/2014
	 Financial Milestone Review
	  	Year 2Q2	  	12/1/2014
	 Quarterly Progress Report
	  	Year 2 Q2	  	1/1/2015
	 Quarterly Cash-on-Hand Report
	  	Year 2 Q2	  	1/15/2015
	 Quarterly Progress Report
	  	Year 2 Q3	  	4/1/2015
	 Quarterly Cash-on-Hand Report
	  	Year 2 Q3	  	4/15/2015
	 Financial Milestone Review
	  	Year 3	  	6/1/2015
	 Annual Progress Report
	  	Year 2	  	7/1/2015
	 Annual Financial Report
	  	Year 2	  	10/1/2015
	 Quarterly Progress Report
	  	Year 3 Q1	  	10/1/2015
	 Quarterly Cash-on-Hand Report
	  	Year 3 Q1	  	10/15/2015
	 Financial Milestone Review
	  	Year 3 Q2	  	12/1/2015
	 Quarterly Progress Report
	  	Year 3 Q2	  	1/1/2016
	 Quarterly Cash-on-Hand Report
	  	Year 3 Q2	  	1/15/2016
	 Quarterly Progress Report
	  	Year 3 Q3	  	4/1/2016
	 Quarterly Cash-on-Hand Report
	  	Year 3 Q3	  	4/15/2016

 [****] Certain information has been omitted and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. 

  










			
	NOTICE OF LOAN AWARD        	 	        DR2A-05416

  


					
	 Financial Milestone Review
	  	Year 4	  	6/1/2016
	 Annual Progress Report
	  	Year 3	  	7/1/2016
	 Annual Financial Report
	  	Year 3	  	10/1/2016
	 Quarterly Progress Report
	  	Year 4 Q1	  	10/1/2016
	 Quarterly Cash-on-Hand Report
	  	Year 4 Q1	  	10/15/2016
	 Financial Milestone Review
	  	Year 4Q2	  	12/1/2016
	 Quarterly Progress Report
	  	Year 4 Q2	  	1/1/2017
	 Quarterly Cash-on-Hand Report
	  	Year 4 Q2	  	1/15/2017
	 Quarterly Progress Report
	  	Year 4 Q3	  	4/1/2017
	 Quarterly Cash-on-Hand Report
	  	Year 4 Q3	  	4/15/2017
	 Annual Progress Report
	  	Year 4	  	7/1/2017
	 Annual Financial Report
	  	Year 4	  	10/1/2017

  

	**	Assumes a Project Start Date of July 1, 2013. 

 For an explanation of reporting requirements, please refer to the Loan Administration Policy (Rev May 2012; http://www.cirm.ca.gov/files/transcripts/pdf/2012/09-05-12.pdf) as well as the
“Reporting Requirements for Disease Team Research Awards” document provided separately. 
 CIRM CONTACTS: 

Gabriel Thompson, Deputy Grants Management Officer 
 Phone: 415-608-####         Email: xxxxxxx@cirm.ca.gov         Fax: (415) 396-#### 

Catherine Priest, Science Officer 
 Phone:
415-396-####         Email: xxxxx@cirm.ca.gov             Fax: (415) 396-#### 
 CIRM Mailing Address: 
 California Institute for Regenerative Medicine 

Attn: Grants Management Office 
 210 King Street

 San Francisco, CA 94107 
 The CIRM
home page is at http://www.cirm.ca.gov 
 [****] Certain information has been omitted and filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted portions. 

  










			
	NOTICE OF LOAN AWARD        	 	        DR2A-05416

  

 APPENDICES 

 

			
	 Appendix A
	  	Research Milestones
	 Appendix B
	  	Loan Agreement

  

	
	CIRM USE ONLY: 6445-601-6047001/H&S Code 125291.20 Statutes
2004

 [****] Certain information has been omitted and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. 

  










			
	NOTICE OF LOAN AWARD        	 	        DR2A-05416

  

 APPENDIX A – CIRM RFA-10-01: (RFA 10-05) Disease Team Therapy Development Awards

 California Institute for Regenerative Medicine 

 

							
	 Grant Number:
 Grantee
Name:
	  	 DR2A-05416
 StemCells,
Inc.
	  	Budget Period:	  	Annual beginning on the
Project Start Date
	Grantee ID:	  	PR-Y0027A-LA	  	Project Period Start:	  	On or before 1/1/2014
	 Principal Investigator:

Co-Principal Investigator (s):
 Project
Title:
	  	 Alexandra Capela
 Frank
LaFerla
	  	Project Period End:	  	6/30/2017, assuming a
7/1/2013 Project Start Date

 Restoration of memory in Alzheimer’s disease: a new paradigm using neural stem cell therapy 

Milestone achievement is an important indicator of progress and is a major factor in review of progress reports. Insufficient progress through milestones
may result in loss of further funding. The milestones summarized below replace the milestones proposed in the original Application. These milestones will be used as a basis for review in the progress reports and progress Evaluation Meetings unless
further modified with Prior Approval from CIRM. 
 RESEARCH MILESTONES 
 (Assumes a Project Start Date of July 1, 2013) 
 Year 1 = July 2013-June 2014 

Year 2 = July 2014-June 2015 
 Year 3 = July
2015-June 2016 
 Year 4 = July 2016-June 2017 
 Year 1 Milestones 
  

													
	 	  	 Milestone
	  	Target
completion
date	 	  	Progress
or Go/No
Go	 	  	 Comments, &

Potential Risks
 to Timeline

	 Pharm/tox
	  	[****]	  	 	Y1 Q3	  	  	 	Go / No Go	  	  	[****]

 Year 2 Milestones 
  

													
	 	  	 Milestone
	  	Target
completion
date	 	  	Progress or
Go/No Go	 	  	 Comments &

Potential Risks
 to Timeline

	 Pharm/tox
	  	[****]	  	 	Y2 Q3	  	  	 	Go / No Go	  	  	[****]
					
		  	[****]	  	 	Y2 Q3	  	  	 	Go / No Go	  	  	[****]
	 CMC
	  	[****]	  	 	Y2Q2	  	  	 	Go / No Go	  	  	[****]
	 Clinical/
Regulatory
	  	[****]	  	 	Y2 Q4	  	  	 	Go / No Go	  	  	[****]

 [****] Certain information has been omitted and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. 

  










			
	NOTICE OF LOAN AWARD        	 	        DR2A-05416

  

 Year 3 Milestones 

 

													
	 	  	 Milestone
	  	Target
completion
date	 	  	Progress
or Go/No
Go	 	  	 Comments &

Potential Risks
 to Timeline

	 Pharm/tox
	  	[****]	  	 	Y4 Q2	  	  	 	Go / No Go	  	  	 Failure to initiate IND-enabling efficacy studies could delay completion and potential IND filing.

 
 Failure to establish behavior and histopathology efficacy would be a No Go
event.

	 Clinical/
Regulatory
	  	[****]	  	 	Y4 Q3	  	  	 	Go / No Go	  	  	 Failure to initiate pivotal GLP safety study could delay completion and potential IND.

 
 Failure to establish safety would be a No Go event.


 Year 4 Milestones 
  

													
	 	  	 Milestone
	  	Target
completion
date	 	  	Progress
or Go/No
Go	 	  	 Comments &

Potential Risks
 to Timeline

	 Clinical/
Regulatory
	  	8. File IND	  	 	Y4 Q4	  	  	 	Progress	  	  	

 [****] Certain information has been omitted and filed separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.