Exhibit 10.38

November 20, 2009

Bahram Valamehr

Dear Bahram:

Fate Therapeutics, Inc. ("Fate") is pleased to offer you, Bahram Valamehr (the
"Employee"), an exempt position as Scientist I, Cell Biology initially reporting
to Peter Flynn, the Sr. Director, Protein Biology. This offer is subject to and
contingent upon [redacted], where the parties agree that such anticipated start
date shall be no later than February 1, 2010 or such earlier date as is mutually
agreed upon by the parties.

In consideration of your employment, you will be paid an annual base salary of
$85,000, less applicable withholding, to be paid in 26 equal installments.
Subject to approval by our Board of Directors, you will be granted an option to
purchase 7,500 shares of the Company's Common Stock at the exercise price
determined by the Board of Directors.  The option will become exercisable in
accordance with the  following schedule: twenty-five percent (25%) of the shares
shall vest and become exercisable on the first anniversary of Employee's first
date of employment, and 1/48th of the shares shall vest and become exercisable
monthly thereafter so that one hundred percent (100%) of the shares shall be
vested and exercisable on the fourth anniversary of Employee's first date of
employment.  The option will be granted in accordance with the terms of the
Company's Equity Incentive Plan and standard form of stock option agreement
which you will be required to sign as a condition of receiving the option.   In
addition, you will be eligible to participate in an employee health benefits
program, a bonus plan and a vacation plan similar to those provided to other
employees in comparable positions.

As a condition of your employment, you will be required to complete the
Company's standard form Employee Proprietary Information and Inventions
Agreement attached hereto (the "Agreement"). In part, this Agreement requires
that employees comply with the Company's requirements to protect its proprietary
and confidential information at all times. Additionally, under federal
immigration laws, the Company is required to verify each new employee's identity
and legal authority to work in the United States. Accordingly, please be
prepared to furnish appropriate documents satisfying those requirements as this
offer of employment is conditioned on submission of satisfactory documentation
and its verification.

We hope that you and Fate will find mutual satisfaction with your employment.
All of us at Fate are very excited about you joining our team and look forward
to a beneficial and fruitful relationship. Nevertheless, employees have the
right to terminate their employment at any time, with or without cause or
notice, and Fate reserves for itself an equal right with respect to your
employment, where this type of relationship is called "at-will" employment. We
both agree that any dispute arising with respect to your employment, the
termination of that employment, or a breach of any covenant of good faith and/or
fair dealing related to your employment shall be conclusively settled, to the
fullest extent permitted by law, by final, binding and confidential arbitration
in San Diego, CA conducted before a single arbitrator by Judicial Arbitration
and Mediation Services, Inc. ("JAMS") or its successor, under the
then-applicable JAMS rules.

 

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This letter and the Employee Proprietary Information and Inventions Agreement
attached hereto contain   the entire terms and conditions with respect to your
employment, and they supersede all prior communications, negotiations,
representations and/or agreements between you and Fate. The terms and conditions
of this offer may only be changed by written agreement by a duly authorized
representative of Fate, although Fate may, from time to time, in its sole
discretion, adjust the salary, benefits and/or other forms of compensation paid
to you in connection with your employment.

Finally, in connection with this offer, you agree to relocate to the San Diego
area, and perform your duties and responsibilities at the corporate headquarters
of Fate If this offer is acceptable to you, kindly indicate your consent to its
terms and conditions by signing and returning a copy of this letter and a
completed Employee Proprietary Information and Inventions Agreement attached
hereto to me by the close of  business on December 4, 2009, it being understood
that this offer will expire if not accepted on or before such date (although
that expiration date may be extended at the discretion of Fate). Upon your
signature below, this letter will become our binding agreement with respect to
your employment, containing all    terms and conditions as to the specifics
thereto.

Very truly yours,

/s/ Paul Grayson

Paul Grayson

President & CEO

I agree to and accept employment with Fate Therapeutics, Inc. on the terms and
conditions set forth in this letter, including the Employee Proprietary
Information and Inventions Agreement attached hereto as Appendix A:

 

/s/ Bahram Valamehr

 

11/23/09

Bahram Valamehr

 

Date

 

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Appendix A

Employee Proprietary Information and Inventions Agreement