Document:

Exhibit 10.1

 

 

Non-statutory Stock Option
Agreement

Pursuant to The

SolarWindow Technologies,
Inc. 2006 Incentive Stock Option Plan

 

This Non-statutory Stock Option Agreement dated
as of October 19, 2020 (the “Effective Date”) between SolarWindow Technologies, Inc., a Nevada Corporation (the
“Company”), and Joseph Sierchio, an individual residing in the State of New York (the “Participant”).

 

In consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived here from, the parties hereto agree as follows:

 

1.  Option Information.

 

	(a)  Date of Option:	 	October 19, 2020 (the “Grant Date”)
	(b)  Participant:	 	Joseph Sierchio
	(c)  Number of Option Shares:	 	50,000 as follows:

 

	Vesting Date	
        Number of Option Shares

        Vesting
	
        Initial Exercise Price

        Per Option Share

	Effective Date	12,500	$3.42
	One-year anniversary of the Grant Date	12,500	$3.42
	Two-year anniversary of the Grant Date	12,500	$3.42
	Three-year anniversary of the Grant Date	12,500	$3.42

 

	(d)  Term of Option:	 	Six years

 

2.  Acknowledgements; Option Shares.

 

(a)        Participant is a member of the Company’s
Board of Directors (the “Board”) and general corporate counsel to the Company (the “Company Relationship”).

 

(b)       Pursuant
to Participant’s appointment to the Board, the Company agreed to issue Participant a stock option to purchase up to 50,000
shares (the “Option Shares”) of the Company’s Common Stock (the “Common Stock”) subject
to certain terms and conditions, which terms and conditions Participant acknowledges and agrees have been included in this Agreement.

 

(d)      Accordingly, the Board has authorized and
granted to Participant this non-statutory stock option (“Option”), pursuant to the Company’s 2006 Incentive
Stock Plan (the “Plan”), to purchase up to 50,000 shares of common stock of the Company (“Common Stock”)
upon the terms and conditions hereinafter stated and pursuant to exemptions from registration under the Securities Act of 1933,
as amended (the “Securities Act”).

 

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3.  Exercise Price.  
Participant has the right to purchase, upon and subject to the terms and conditions herein stated, the Option Shares, to the extent
vested, for the per Option Share purchase price of $3.42, the closing price of shares of Common Stock on the OTC Market Pink Sheets
on the Grant Date (“Per Share Exercise Price”).

 

4.  Term of Option.  The
term of the Option (the “Term”) shall commence on the Grant Date and shall expire, and all rights hereunder
to purchase the Option Shares shall terminate, on the six-year anniversary date of the Grant Date (the “Option Expiration
Date”). Nothing contained herein shall be construed to interfere in any way with the right of the Company to terminate
Participant as counsel to the Company or remove him as a member of the Board, or to increase or decrease the compensation paid
to Participant from the rate in effect as of the date hereof.

 

5.        Vesting;
Exercise; and Payment of the Aggregate Exercise Price.

 

5.1Vesting. The Option
vest as set forth in Section 1(c) above.

 

5.2Exercise. Subject to
the further provisions of this Agreement, the Option, to the extent that all or a portion of the Option has vested, may be exercised
as to such vested amount, in whole or in part and from time to time, during the Term, by delivery to the Company of a written or
electronic notice, substantially in the form of Exhibit A hereto (the “Exercise Notice”), stating
the number of whole Option Shares to be purchased; the Exercise Notice shall be accompanied by payment of the Aggregate Exercise
Price of the Option Shares to be purchased. For purposes of this Agreement, the term “Aggregate Exercise Price”
shall mean the dollar amount obtained by multiplying (i) the Per Share Exercise Price by (ii) the number of Option
Shares being purchased.

 

5.3Payment of Aggregate Exercise
Price.

 

5.3.1The Aggregate Exercise Price of
the Option Shares shall be paid:

 

(i)in cash or by certified check or
bank draft payable to the order of the Company; or

 

(ii) to the extent permitted by applicable
law, through a broker-assisted cashless exercise by delivering, along with a properly executed exercise notice to the Company,
a copy of irrevocable instructions to a broker to deliver promptly to the Company the aggregate exercise price and, if requested
by the Participant, the amount of any applicable federal, state, local or foreign withholding taxes required to be withheld by
the Company, provided, however, that such exercise may be implemented solely under a program or arrangement established and approved
by the Company with a brokerage firm selected by the Company;

 

(iii) at any time prior to the Company’s
listing of any of its securities for trading on a “national stock exchange,” pursuant to “a net issue”
or “cashless” exercise pursuant to Section 5.3.2 below; or,

 

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(iv) by any other method approved by the Board
or its Compensation Committee, if any, or

 

(v) by a combination of the foregoing.

 

5.3.2 Subject to the provisions of Section
3(b) (iii) above, in lieu of exercising the Option pursuant to Section 5.3.1 (i) and (ii) above the Participant may
elect to receive Option Shares equal to the value of the Option (or portion thereof being exercised) by delivery of the Exercise
Notice together with this Agreement to the Company, in which event the Company shall issue to the Participant a number of Option
Shares computed using the following formula:

 

Y (A-B)

X = ———————

A

Where:

 

X =        the number
of the Option Shares to be issued to the Participant;

 

Y =        the number
of the vested Option Shares purchasable under the Option or if only a portion of the Option is being exercise, the portion being
exercised;

 

A =        the fair
market value of one share of the Company’s common stock on the date prior to the date of exercise; and

 

B =        the per share Exercise
Price (as adjusted to the date of such calculation). 

 

For purposes of this Section 5.3.2, the “per share
fair market value” of the Option Shares shall mean:

 

(i) If the Company’s Common Stock is publicly
traded, the per share fair market value of the Option Shares shall be the closing price of the Common Stock as quoted on the OTC
Market Group’s Pink Sheets, or on such other exchange or trading platform on which the Company’s Common Stock may then
be listed or quoted for trading, on the trading day immediately preceding the date of exercise;

 

(ii) If the Company’s Common Stock is
not so publicly traded, the per share fair market value of the Option Shares shall be such fair market value as is determined in
good faith by the Board of Directors of the Company after taking into consideration factors it deems appropriate, including, without
limitation, recent sale and offer prices of the capital stock of the Company in private transactions negotiated at arm’s
length.

 

6.       Acceleration
of Vesting and Modifications.

 

6.1Generally. Subject
to the terms and conditions and within the limitations of the Plan and Section 18, the Board may modify the Option, or,
once an Option is exercisable, accelerate the rate at which it may be exercised, and may extend or renew outstanding Option granted
under the Plan or accept the surrender of outstanding the Option (to the extent not theretofore exercised) and authorize the granting
of new Option in substitution for such Option, provided such action is permissible under Section 422 of the Code and the Nevada
and United States federal securities laws, regulations and rules. However, no modification of the Option shall, without the consent
of the Participant, alter to the Participant’s detriment or impair any rights or obligations under any Option theretofore
granted under the Plan.

 

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6.2Acceleration upon Change in
Control. Without limiting the generality of Section 6.1, in the event that, following a Change of Control (as defined
below), the ESCA is terminated without Cause (as defined below) or not for Poor Performance (as defined below) on or prior to the
tree-year anniversary of the Grant Date, then all unvested stock options hereunder, regardless of date or condition of vesting,
shall vest as of the date of such termination. If, upon the Change of Control, (i) the Company shall cease to be a stand-alone
publicly traded entity, or (ii) the acquiring entity is unwilling to assume the equity in an economically equivalent manner,
then in either event, all equity shall be deemed to have vested two (2) days prior to the Change of Control, but only if such
Change of Control shall actually be consummated.

 

For the purposes this Agreement, “Change
of Control” shall mean;

 

 (a) the acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than any individual, entity or group which, as of the date of this Agreement, beneficially
owns more than ten percent (10%) of the then outstanding shares of common stock of the Company (the “Common Stock”),
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty (50%) or more of the
then outstanding Common Stock; provided, however, that any acquisition by the Company or its
subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries of fifty percent (50%) or
more of outstanding Common Stock shall not constitute a Change of Control; and, provided, further,
that any acquisition by an entity with respect to which, following such acquisition, more than fifty percent (50%) of the
then outstanding equity interests of such entity, is then beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial owners of the outstanding Common Stock immediately prior to such acquisition
of the outstanding Common Stock, shall not constitute a Change in Control; or

 

(b) the consummation of a reorganization,
merger or consolidation (any of the foregoing, a “Merger”), in each case, with respect to which all or substantially
all of the individuals and entities who were the beneficial owners of the outstanding Common Stock immediately prior to such Merger
do not, following such Merger, beneficially own, directly or indirectly, more than fifty percent (50%) of the then outstanding
shares of common stock of the corporation resulting from Merger; or

 

(c) the sale or other disposition of
all or substantially all of the assets of the Company, excluding (a) a sale or other disposition of assets to a subsidiary
of the Company; and (b) a sale or other disposition of assets to any individual, entity or group which, as of the date of
this Agreement, beneficially owns more than ten percent (10%) of the then outstanding Common Stock.

 

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7.        Non-transferability
of the Option. Except as authorized by the Board, the Option is non-transferable by the Participant except by will or the
laws of descent and distribution or pursuant to a qualified domestic relations order, and the Option may be exercised, during the
lifetime of the Participant, only by the Participant or by the Participant’s guardian or legal representative or any transferee
described above.

 

8.        Termination
of the Company Relationship. If prior to the Option Expiration Date, the Company Relationship is terminated, the right
to exercise the Option, to the extent vested, shall continue until the Option Expiration Date, but there shall be no further vesting
of the Option following the effective date of the termination of the Company Relationship.

 

9.        Tax Matters.

 

9.1 The Option is intended to be a non-statutory stock option
grant and shall not be treated as an incentive stock option within the meaning of Section 422(b) of the Code. 

 

9.2 At the time the Option is exercised,
in whole or in part, or at any time thereafter as requested by the Company, the Participant hereby authorizes withholding from
payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for (including by means
of a cashless or net issue exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local
and foreign tax withholding obligations of the Company, if any, which arise in connection with the Option, including, without limitation,
obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part,
of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation
of interest, or (iv) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option. The Participant
is cautioned that the Option is not exercisable unless the tax withholding obligations of the Company are satisfied. Accordingly,
the Participant may not be able to exercise the Option when desired even though the Option is vested, and the Company shall have
no obligation to issue a certificate for such shares or release such shares from any escrow provided for herein.

 

9.3The Participant should
consult with a tax advisor before exercising the Option or disposing of the Shares to obtain advice as to the consequences of such
exercise or disposition.

 

10.        Rights
as a Stockholder. Participant or a transferee, if any, of the Option shall have no rights as a stockholder with respect
to any Option Shares covered by such Option until the date when his purchase is entered upon the records of the duly authorized
transfer agent of the Company. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property) or distribution of other rights for which the record date is prior to the date a stock certificate is issued,
except as provided in the Plan.

 

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11.        Adjustment
in the Event of Change in Stock. In the event of any material change in the capitalization (including, but not limited
to, a change in the number of shares of Common Stock outstanding), and the number and kind of shares subject to the Option and/or
the exercise price per share will be adjusted. The determination of the Board or a duly appointed committee thereof regarding any
adjustment will be final and conclusive.

 

12.        No
Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED THE COMPANY RELATIONSHIP FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE COMPANY’S
RIGHT TO TERMINATE THE RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

 

13.        Other
Restrictions.

 

13.1 Board Discretionary Action.
The exercise of the Option shall be subject to the requirement that, if at any time the Board or its Compensation Committee, if
any, shall determine that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto
upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body
or (iii) an agreement by the Participant with respect to the disposition of shares of Common Stock is necessary or desirable as
a condition of, or in connection with, such exercise or the delivery or purchase of shares pursuant thereto, then in any such event,
such exercise shall not be effective unless such listing, registration, qualification, consent, or approval or agreement shall
have been effected or obtained free of any conditions not acceptable to the Board or its Compensation Committee, if any.

 

13.2 Restrictions on Grant of
the Option and Issuance of Shares. The grant of the Option and the issuance of the Shares upon exercise of the Option
shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities.
The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable
federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system
upon which the Stock may then be listed. THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING
CONDITIONS ARE SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTIONS WHEN DESIRED EVEN THOUGH THE STOCK
OPTIONS ARE VESTED. Questions concerning this restriction should be directed to the Company’s President and Chief Executive
Officer or the Chief Financial Officer of the Company. The inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares
subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

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13.3 Legends. The Company
may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Agreement. The Participant shall, at the request of the Company,
promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession
of the Participant in order to carry out the provisions of this Section. The Company may, but will in no event be obligated to,
register any securities issuable upon the exercise of all or any portion of the Option pursuant to the Securities Act of 1933 (as
now in effect or as hereafter amended) or to take any other affirmative action in order to cause the exercise of the Option or
the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority. The certificates representing
shares issued to Participant hereunder shall bear such legends as Company determines appropriate referring to restrictions on the
transfer of such shares imposed by this Agreement and such other legends as are required or appropriate under applicable law.

 

13.4 Trading Restrictions.
The Company may establish periods from time to time during which the Participant’s
ability to engage in transactions involving the Company’s stock is subject to specific restrictions (“Restricted
Periods”). Notwithstanding any other provisions herein, the Participant may not
exercise Stock Option during an applicable Restricted Period unless such exercise
is specifically permitted by the Company (in its sole discretion). The Participant may be subject to a Restricted Period for any
reason that the Company determines appropriate, including, Restricted Periods generally applicable to employees or groups of employees
or Restricted Periods applicable to the Participant during an investigation of allegations of misconduct or conduct detrimental
to the Company by the Participant.

 

14.        Notices.

 

14.1 Any notice or other communication
required or permitted pursuant to this Agreement shall be in writing and addressed as follows:

 

If to the Company:

 

SolarWindow Technologies, Inc. 

430 Park Avenue

Suite 702

New York, New York 10022

Attention: Jatinder S. Bhogal, President and Chief Executive Officer

Email: jsbhogal@solarwindow.com

 

If to the Participant, to the following address:

 

Joseph Sierchio

1520 York Avenue

Apt 7D

New York, New York 10028

Email: jsierchio@zeccabit.com 

 

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or, to such other address or facsimile number as any Party
shall have furnished to the other in writing in accordance with this Section 14.

 

14.2 Notices sent in accordance with
this Section shall be deemed effectively given: (a) when received, if delivered by hand (with written confirmation of receipt);
(b) when received, if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile
or e-mail (in each case, with confirmation of transmission), if sent during normal business hours of the recipient, and on the
next Business Day if sent after normal business hours of the recipient; or (d) on the third (3rd) Business Day after the date mailed,
by certified or registered mail, return receipt requested, postage prepaid.

 

15.        Effect
of Agreement. Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit
of any successor or successors of the Company, and to any transferee or legal representative of the Participant pursuant to Section
7.

 

16.        Severability.
The invalidity or enforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If the final judgment of a court of competent jurisdiction declares that any provision of this Agreement
is invalid or unenforceable, the parties hereto agree that the court making the determination of invalidity or unenforceability
shall have the power, and is hereby directed, to reduce the scope, duration or area of the provision, to delete specific words
or phrases and to replace any invalid or unenforceable provision with a provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable provision and this Agreement shall be enforceable as so modified.

 

17.        Conflicts
and Interpretation. This Agreement is subject to all the terms, conditions and provisions of the Plan. In the event of
any conflict between this Agreement and the Plan, the Plan shall control. In the event of any ambiguity in this Agreement, any
term which is not defined in this Agreement, or any matters as to which this Agreement is silent, the Plan shall govern including,
without limitation, the provisions thereof pursuant to which the Board or its Compensation Committee, if any has the power, among
others, to (i) interpret the Plan, (ii) prescribe, amend and rescind rules and regulations relating to the Plan and (iii) make
all other determinations deemed necessary or advisable for the administration of the Plan. The determinations made by the Board
or its Compensation Committee, if any, shall be binding on the Participant.

 

18.       Amendment.
This Agreement may not be modified, amended or waived except by an instrument in writing signed by both parties hereto. The waiver
by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision
of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

 

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19.        Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original,
and all of which together shall constitute one and the same agreement. Execution of a facsimile or scanned copy will have the same
force and effect as execution of an original, and a facsimile or scanned signature will be deemed an original and valid signature.

 

20.       Data
Privacy Consent. As a condition of the grant of the Shares, Participant consents to the collection, use and transfer of
personal data as described in this Section 20. Participant understands that the Company and its Subsidiaries hold certain
personal information about Participant including Participant’s name, home address and telephone number, date of birth, social
security number, salary, nationality, job title, ownership interests or directorships held in the Company or its Subsidiaries,
and details of all stock options or other equity awards or other entitlements to shares of common stock awarded, cancelled, exercised,
vested or unvested (“Data”). Participant further understand that the Company and its Subsidiaries will transfer
Data amongst themselves as necessary for the purposes of implementation, administration and management of Participant’s participation
in the Plan, and that the Company and any of its Subsidiaries may each further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plan. Participant understands that these recipients may be
located in the United States or elsewhere. You authorize them to receive, possess, use, retain and transfer such Data as may be
required for the administration of the Plan or the subsequent holding of shares of common stock on Participant’s behalf,
in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in
the Plan, including any requisite transfer to a broker or other third party with whom Participant may elect to deposit any shares
of common stock acquired under the Plan. Participant understands that Participant may, at any time, view such Data or require any
necessary amendments to it.

 

21.     Interpretation.
For purposes of this Agreement, (a) the words “include,” “includes,” and “including” shall
be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c)
the words “herein,” “hereof,” “hereby,” “hereto,” and “hereunder” refer
to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Sections, Exhibits and Schedules
refer to the Sections of, and Exhibits and Schedules attached to, this Agreement; (y) to an agreement, instrument, or other document
means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted
by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation
thereto and any regulations promulgated thereunder. Any Exhibits or Schedules referred to herein shall be construed with,
and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The headings of Sections
herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions
of this Agreement.

 

22.        Laws
Applicable to Construction. The interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of Nevada without reference to principles of conflict of laws, as applied to contracts executed in and performed
wholly within the State of Nevada.

 

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[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the Company and the
Participant have executed and delivered this Agreement effective as of the date first above written to be effective as the Effective
Date.

 

	SolarWindow Technologies, Inc.
	 
	By:	__________________________________________
	Name:	Jatinder S. Bhogal
	Title:	President and Chief Executive Officer
	 	 
	 	 
	PARTICIPANT
	 
	 
	 
	 
	 	__________________________________________
	Name:	Joseph Sierchio
	 
	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

TO THE

NON-STATUTORY STOCK OPTION AGREEMENT

DATED AS OF OCTOBER 19, 2020

BETWEEN

SOLARWINDOW TECHNOLOGIES, INC. AND JOSEPH SIERCHIO

__________

 

Form of Notice of Exercise of Non-statutory Stock Option

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Form of Notice of Exercise of Non-Statutory Stock Option

 

SolarWindow Technologies, Inc.

430 Park Avenue

Suite 702

New York, New York 10022

Attention: Jatinder S. Bhogal, President and Chief Executive Officer

Email: jsbhogal@solarwindow.com

 

Dear Sir:

 

This letter constitutes an unconditional and
irrevocable notice that I hereby exercise [all] [a portion] of the Stock Option(s) granted to me by SolarWindow Technologies, Inc.,
a Nevada corporation (the “Company”) on October 19, 2020 (“date of grant, at a fair market value
of US$ ______ per Share. Pursuant to the terms of the Stock Option Agreement dated October 19, 2020 between the undersigned and
the Company (the “SOA”), I wish to purchase _______________ Option Shares covered by such Stock Option(s) at
the Exercise Price(s) of US$ ______ per Option Share (based on the closing price on the trading immediately preceding the date
of exercise of this option) or $________________in the aggregate.

 

Payment being made pursuant to the following
section of the SOA (check as appropriate):

 

[ ] Section 5.3.1 (i);

[ ] Section 5.3.1 (ii);

[ ] Section 5.3.1 (iii) and 5.3.2;

[ ] Section 5.3.1 (iv)

[ ] Section 5.3.1 (v)

 

If pursuant to Section 5.3.1 (iii)
and 5.3.2 of the SOA and calculated as follows (subject to the Company’s confirmation):

 

 

 

 

 

 

 

 

 

 

 

 

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Please deliver these Shares as follows:

 

	Name:	 	 	 
	 	 	 	 
	Address:	 	 	 
	 	 	 	 
	 	 	 	 
	Social Security or TIN:	 	 	 

 

I represent that I will not dispose of such
Shares in any manner that would involve a violation of applicable securities laws. By this exercise, I agree (i) to provide
such additional documents as you may require pursuant to the terms of the 2006 Incentive Plan, and (ii) to provide for the
payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this
option.

 

	Dated:	 	 	By:	 	 
	 	 	 	 	 	 
	 	 	 	Name:	 	 
	 	 	 	 	 	 
	 	 	 	Email:	 	 
	 	 	 	 	 	 
	 	 	 	Phone: 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14EX-4.1

 Exhibit 4.1 

FATE THERAPEUTICS, INC. 

FORM OF PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK 

Number of Shares: [•] 
 (subject
to adjustment) 
  

			
	 Warrant No. [•]
	  	Original Issue Date: January [•], 2021

 Fate Therapeutics, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [•] or its registered assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company up to a total
of [•] shares of common stock, $0.001 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise
price per share equal to $0.001 per share (as adjusted from time to time as provided in Section 9 herein, the “Exercise Price”) upon surrender of this Warrant to Purchase Common Stock (including any
Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”) at any time and from time to time on or after the date hereof (the “Original Issue Date”), subject to the
following terms and conditions: 
 1. Definitions. For purposes of this Warrant, the following terms shall have the following meanings: 

(a) “Affiliate” means any Person directly or indirectly controlled by, controlling or under common control with, a
Holder, as such terms are used in and construed under Rule 405 under the Securities Act, but only for so long as such control shall continue. 

(b) “Commission” means the United States Securities and Exchange Commission. 

(c) “Closing Sale Price” means, for any security as of any date, the last trade price for such security on the Principal
Trading Market for such security, as reported by Bloomberg L.P., or, if such Principal Trading Market begins to operate on an extended hours basis and does not designate the last trade price, then the last trade price of such security immediately
prior to 4:00 P.M., New York City time, as reported by Bloomberg L.P., or if the security is not listed for trading on a national securities exchange or other trading market on the relevant date, the last quoted bid price for the security in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices). If
the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
If the Company and the Holder are unable to agree upon the fair market value of such security, then the Board of Directors of the Company shall use its good faith judgment to determine the fair market value. The Board of Directors’
determination shall be binding upon all parties absent demonstrable error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation
period. 
 (d) “Principal Trading Market” means the national securities exchange or other trading market on which the
Common Stock is primarily listed on and quoted for trading, which, as of the Original Issue Date, shall be the Nasdaq Global Market. 

(e) “Registration Statement” means the Company’s Registration Statement on
Form S-3 (File No. 333-228513), declared effective on November 21, 2018. 

(f) “Securities Act” means the Securities Act of 1933, as amended. 

(g) “Trading Day” means any weekday on which the Principal Trading Market is open for trading. If the Common Stock is not
listed or admitted for trading, “Trading Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in New York City are authorized or required
by law or other governmental action to close. 

 (h) “Transfer Agent” means American Stock Transfer & Trust
Company, LLC, the Company’s transfer agent and registrar for the Common Stock, and any successor appointed in such capacity. 
 2. Issuance of
Securities; Registration of Warrants. The Warrant, as initially issued by the Company, is offered and sold pursuant to the Registration Statement. As of the Original Issue Date, the Warrant Shares are issuable under the Registration Statement.
Accordingly, the Warrant and, assuming issuance pursuant to the Registration Statement or an exchange meeting the requirements of Section 3(a)(9) of the Securities Act as in effect on the Original Issue Date, the Warrant Shares, are not
“restricted securities” under Rule 144 promulgated under the Securities Act as of the Original Issue Date. The Company shall register ownership of this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder (which shall include the initial Holder or, as the case may be, any assignee to which this Warrant is assigned hereunder) from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 

3. Registration of Transfers. Subject to compliance with all applicable securities laws and the rules of the Principal Trading Market, the Company
shall, or will cause its Transfer Agent to, register the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, and payment for all applicable transfer taxes (if any) by the Holder or any subsequent
holder. Upon any such registration or transfer, a new warrant to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “New Warrant”) evidencing the portion of this Warrant so transferred shall be
issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company shall, or will cause its Transfer Agent to, prepare, issue and deliver at the Company’s
own expense any New Warrant under this Section 3. Until due presentment for registration of transfer, the Company may treat the registered Holder hereof as the owner and holder for all purposes, and the Company shall not be
affected by any notice to the contrary. 
 4. Exercise and Duration of Warrants. 

(a) All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by this Warrant at any time and
from time to time on or after the Original Issue Date, subject to Section 11 below. 
 (b) The Holder may exercise this Warrant by
delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”), completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares
as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice pursuant to Section 10 below). The date on which such exercise notice is
delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares, if any. The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given
time may be less than the amount stated on the face hereof. 
 5. Delivery of Warrant Shares. 

(a) Upon exercise of this Warrant, the Company shall promptly (but in no event later than three (3) Trading Days after the Exercise
Date), upon the request of the Holder, cause the Transfer Agent to credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with The
Depository Trust Company (“DTC”) through its Deposit Withdrawal Agent Commission system or if the Transfer Agent is not participating in the Fast Automated Securities Transfer Program (the “FAST Program”) or if the
certificates are required to bear a legend regarding restriction on transferability, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the
name of the Holder or its designee, for the number of shares of Common Stock 

 
to which the Holder is entitled pursuant to such exercise. The Holder, or any natural person or legal entity (each, a “Person”) so designated by the Holder to receive Warrant
Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates
evidencing such Warrant Shares, as the case may be. 
 (b) If by the close of the third (3rd) Trading Day after the Exercise Date, the
Company fails to deliver to the Holder a certificate representing the required number of Warrant Shares in the manner required pursuant to Section 5(a) or fails to cause the Transfer Agent to credit the Holder’s
DTC account for such number of Warrant Shares to which the Holder is entitled, and if after such third (3rd) Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall, within
three (3) Trading Days after the Holder’s written request and in the Holder’s sole discretion, either (i) pay in cash to the Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased, at which point the Company’s obligation to deliver such certificate (and to issue such Warrant Shares) or to cause the Holder’s DTC account to be credited for such Warrant Shares shall
terminate or (ii) promptly deliver to the Holder a certificate or certificates representing such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased in the Buy-In over the product of (A) the number of shares of Common Stock purchased in the Buy-In,
times (B) the Closing Sale Price of a share of Common Stock on the Exercise Date. 
 (c) To the extent permitted by law and subject
to Section 5(b), the Company’s obligations to cause the Transfer Agent to issue and deliver Warrant Shares in accordance with and subject to the terms hereof (including the limitations set forth in
Section 11 below) are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against
any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Subject to
Section 5(b), nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 

6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock, if any, upon exercise of this Warrant shall be made
without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense (excluding any applicable stamp duties) in respect of the issuance of such certificates, all of which taxes and expenses shall be paid
by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or the Warrants in a name other
than that of the Holder or an Affiliate thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 

7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each
case, a customary and reasonable indemnity and surety bond, if requested by the Company. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation
to issue the New Warrant. 
 8. Reservation of Warrant Shares. The Company covenants that it will, at all times while this Warrant is outstanding,
reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved 

 
Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and
deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9).
The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and non-assessable. The Company will take all such action as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation,
or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed. The Company further covenants that it will not, without the prior written consent of the Holder, take any actions to increase
the par value of the Common Stock at any time while this Warrant is outstanding. 
 9. Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9. 

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on
its Common Stock or otherwise makes a distribution on any class of capital stock issued and outstanding on the Original Issue Date and in accordance with the terms of such stock on the Original Issue Date, as described in the Registration Statement,
that is payable in shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock into a larger number of shares of Common Stock, (iii) combines its outstanding shares of Common Stock into a smaller number of shares of
Common Stock or (iv) issues by reclassification of shares of capital stock any additional shares of Common Stock of the Company, then in each such case the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, provided, however, that if such record date shall have been fixed and such dividend is not
fully paid on the date fixed therefor, the Exercise Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Exercise Price shall be adjusted pursuant to this paragraph as of the time of actual payment
of such dividends. Any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. 

(b) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common
Stock for no consideration (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph) (iii) rights or warrants to subscribe for or purchase any security, or
(iv) cash or any other asset (in each case, a “Distribution”), other than a reclassification as to which Section 9(c) applies, then in each such case, the Holder shall be entitled to participate
in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the ownership limitation set forth in Section 11(a) hereof) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date
as of which the record holders of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
exceeding the ownership limitation set forth in Section 11(a) hereof, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common Stock as a
result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until the earlier of (i) such time, if ever, as the delivery to such Holder of such portion would not
result in the Holder exceeding the ownership limitation set forth in Section 11(a) hereof and (ii) such time as the Holder has exercised this Warrant. 

(c) Fundamental Transactions. If, at any time while this Warrant is outstanding (i) the Company effects any merger or
consolidation of the Company with or into another Person, in which the Company is not the surviving entity and in which the stockholders of the Company immediately prior to such merger or consolidation do not own, directly or indirectly, at least
50% of the voting power of the surviving entity immediately after such merger or consolidation, (ii) the Company effects any sale to another Person of all or substantially all of its assets in one transaction or a series of related
transactions, (iii) pursuant to any tender offer or exchange offer (whether by the 

 
Company or another Person), holders of capital stock tender shares representing more than 50% of the voting power of the capital stock of the Company and the Company or such other Person, as
applicable, accepts such tender for payment, (iv) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the voting power of the capital stock of the Company (except for any such transaction in which the
stockholders of the Company immediately prior to such transaction maintain, in substantially the same proportions, the voting power of such Person immediately after the transaction) or (v) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by
Section 9(a) above) (in any such case, a “Fundamental Transaction”), then following such Fundamental Transaction the Holder shall have the right to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant
Shares then issuable upon exercise in full of this Warrant without regard to any limitations on exercise contained herein (the “Alternate Consideration”), and the Warrant will be deemed automatically exercised in full in exchange
for such Alternate Consideration pursuant to the “cashless exercise” provisions in Section 10 below upon the consummation of the Fundamental Transaction. 

(d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to
Section 9 (including any adjustment to the Exercise Price that would have been effected but for the final sentence in this paragraph (d)), the number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment. Notwithstanding the foregoing, in no event may the Exercise Price be adjusted below the par value of the Common Stock then in effect. 

(e) Calculations. All calculations under this Section 9 shall be made to the nearest one-hundredth of one cent or the nearest share, as applicable. 
 (f) Notice of Adjustments.
Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will, at the written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the
Transfer Agent. 
 (g) Notice of Corporate Events. If, while this Warrant is outstanding, the Company (i) declares a
dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any
subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of
the Company, then, except if such notice and the contents thereof shall be deemed to constitute material non-public information, the Company shall deliver to the Holder a notice of such transaction at least
ten (10) days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action required to be described in such notice. In addition, if while this Warrant is outstanding, the Company authorizes or approves, enters into any agreement contemplating or
solicits stockholder approval for any Fundamental Transaction contemplated by Section 9(c), other than a Fundamental 

 
Transaction under clause (iii) of Section 9(c), then, except if such notice and the contents thereof shall be deemed to constitute material non-public information, the Company shall deliver to the Holder a notice of such Fundamental Transaction at least ten (10) days prior to the date such Fundamental Transaction is consummated. 

10. Payment of Cashless Exercise Price. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, satisfy its
obligation to pay the Exercise Price through a “cashless exercise,” in which event the Company shall issue to the Holder the number of Warrant Shares in an exchange of securities effected pursuant to Section 3(a)(9) of the
Securities Act as determined as follows: 
 X = Y [(A-B)/A] 

where: 
 “X” equals the
number of Warrant Shares to be issued to the Holder; 
 “Y” equals the total number of Warrant Shares with respect to which this
Warrant is then being exercised; 
 “A” equals the Closing Sale Price per share of Common Stock as of the Trading Day on the date
immediately preceding the Exercise Date; and 
 “B” equals the Exercise Price per Warrant Share then in effect on the Exercise
Date. 
 For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in
such a “cashless exercise” transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the Original Issue Date (provided that the Commission continues
to take the position that such treatment is proper at the time of such exercise). In the event that the Registration Statement or another registration statement registering the issuance of Warrant Shares is, for any reason, not effective at the time
of exercise of this Warrant, then this Warrant may only be exercised through a cashless exercise, as set forth in this Section 10. 

In no event will the exercise of this Warrant be settled in cash. 

11. Limitations on Exercise. 

(a) Notwithstanding anything to the contrary contained herein, the Company shall not effect any exercise of this Warrant, and the Holder
shall not be entitled to exercise this Warrant for a number of Warrant Shares in excess of that number of Warrant Shares which, upon giving effect or immediately prior to such exercise, would cause (i) the aggregate number of shares of Common
Stock beneficially owned by the Holder, its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), to exceed 9.99% (the “Maximum Percentage”) of the total number of issued and outstanding shares of Common Stock of the Company following such exercise, or (ii) the combined voting
power of the securities of the Company beneficially owned by the Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act to exceed 9.99% of the combined voting power of all of the securities of the Company then outstanding following such exercise. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be,
filed with the Commission prior to the Exercise Date, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon
the written request of the Holder, the Company shall within three (3) Trading Days confirm in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder since the date as of which such number of outstanding shares of Common Stock was reported. By
written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 19.99% specified in such notice; provided that any such increase or decrease will not be effective
until at least the sixty-

 
first (61st) day after such notice is delivered to the Company. For purposes of this Section 11(a), the aggregate number of shares of Common Stock or voting securities
beneficially owned by the Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act shall include the shares of
Common Stock issuable upon the exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (x) exercise of the remaining unexercised and non-cancelled portion of this Warrant by the Holder and (y) exercise or conversion of the unexercised, non-converted or
non-cancelled portion of any other securities of the Company that do not have voting power (including without limitation any securities of the Company which would entitle the holder thereof to acquire at any
time Common Stock, including without limitation any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock), is subject to a limitation on conversion or exercise analogous to the limitation contained herein and is beneficially owned by the Holder or any of its Affiliates and other Persons whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act. 
 (b) This
Section 11 shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the
event of a Fundamental Transaction as contemplated in Section 9(c) of this Warrant. 
 12. No Fractional Shares. No
fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the next whole number and
the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any such fractional shares. 
 13. Notices. Any
and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile or confirmed e-mail prior to 5:30 P.M., New York City time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile or confirmed e-mail on a day that is not a Trading Day or later than 5:30 P.M., New York City time, on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service specifying next business day delivery, or (iv) upon actual receipt by the Person to whom such notice is required to be given, if by hand delivery. The addresses and e-mail addresses for such communications shall be: 
 If to the Company: 

Fate Therapeutics, Inc. 

Attention: Cindy Tahl 
 3535
General Atomics Court, Suite 200 
 San Diego, CA 92121 

Email: Cindy.tahl@fatetherapeutics.com 

If to the Holder, to its address or e-mail address set forth herein or on the books and records of the
Company. 

 Or, in each of the above instances, to such other address or e-mail
address as the recipient party has specified by written notice given to each other party at least five (5) days prior to the effectiveness of such change. 

14. Warrant Agent. The Company shall initially serve as warrant agent under this Warrant. Upon ten (10) days’ notice to the Holder, the
Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register. 

15. Miscellaneous. 
 (a) No Rights
as a Stockholder. The Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate
action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance
to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. 

(b) Authorized Shares. Except and to the extent as waived or consented to by the Holder, the Company shall not by any action,
including, without limitation, amending its certificate or articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights
of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon
the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant. 
 (c) Successors and Assigns. Subject to compliance with applicable securities laws, this
Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company without the written consent of the Holder, except to a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the
benefit of the Company and the Holder and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and assigns. 

(d) Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. 

(e) Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and
conditions contained herein. 
 (f) Governing Law; Jurisdiction. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT
AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND 

 
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF THE WARRANT OR ANY OF THE DOCUMENTS DELIVERED HEREUNDER), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA
REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PERSON AT THE ADDRESS IN EFFECT FOR NOTICES TO IT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 

(g) Headings. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to
limit or affect any of the provisions hereof. 
 (h) Severability. In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the Company and the Holder will attempt in good faith
to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above. 
  

			
	FATE THERAPEUTICS, INC.
		
	By:	 	  

		 	Name: Scott Wolchko
		 	Title:   President

 [Signature Page to Warrant] 

 SCHEDULE 1 

FORM OF EXERCISE NOTICE 

[To be executed by the Holder to purchase Warrant Shares under the Warrant] 

Ladies and Gentlemen: 
 (1) The undersigned is the Holder of
Warrant No.     (the “Warrant”) issued by Fate Therapeutics, Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective
meanings set forth in the Warrant. 
 (2) The undersigned hereby exercises its right to purchase Warrant Shares pursuant to the Warrant. 

(3) The Holder intends that payment of the Exercise Price shall be made as (check one): 

 

	 	☐	 Cash Exercise 

  

	 	☐	 “Cashless Exercise” under Section 10 of the Warrant 

(4) If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $ __________ in immediately available funds to the Company in accordance
with the terms of the Warrant. 
 (5) Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance
with the terms of the Warrant. The Warrant Shares shall be delivered to the following DWAC Account Number: 
  

                          
                                       

(6) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced
hereby the Holder, its Affiliates and any other Person whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act will not beneficially own in excess of the
number of shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 11(a) of the Warrant to which this notice relates. 

 

					
	Dated:	 	  
	 	
			
	Name of Holder:	 	  
	 	
			
	By:	 	  
	 	
			
	Name:	 	  
	 	
			
	Title:	 	  
	 	

 (Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

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