Exhibit 10.1
     NOTE: Portions of this Exhibit are the subject of a Confidential Treatment
Request by the Registrant to the Securities and Exchange Commission (the
“Commission”). Such portions have been redacted and are marked with a “[***]” in
place of the redacted language. The redacted information has been filed
separately with the Commission.
Research and License Agreement
Between
Genentech, Inc.
And
Sangamo BioSciences, Inc.

 

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TABLE OF CONTENTS

                      Page  
 
           
Article 1.
  Definitions     1  
1.1
  “Accept the [***] Evidence”     1  
1.2
  “Affiliate”     1  
1.3
  “[***] Gene”     1  
1.4
  “[***] Gene”     2  
1.5
  “BLA”     2  
1.6
  “Caltech Agreement”     2  
1.7
  “CHO”     2  
1.8
  “Collaboration Partner”     2  
1.9
  “Commercially Diligent Efforts”     2  
1.10
  “Confidential Information”     2  
1.11
  “Confidentiality Agreement”     3  
1.12
  “Controlled by”     3  
1.13
  “Covering”     3  
1.14
  “[***] Evidence”     3  
1.15
  “Delivery Days to Genentech”     3  
1.16
  “Designated Gene”     3  
1.17
  “Donor Sequence”     3  
1.18
  “Executive”     4  
1.19
  “Existing Third Party Licenses”     4  
1.20
  “First Commercial Sale”     4  
1.21
  “Functional [***]”     4  
1.22
  “Genentech CHO Cell Line”     4  
1.23
  “Genentech CHO DNA Extract”     4  
1.24
  “Genentech Deliverables”     4  
1.25
  “Genentech License”     4  
1.26
  “Genentech Materials”     4  
1.27
  “Identified Patents”     4  
1.28
  “Improved ZFN Reagent”     4  
1.29
  “Improvement”     4  
1.30
  “Invention”     5  
1.31
  “JHU Agreement”     5  
1.32
  “Know-How”     5  
1.33
  “Liaison”     5  
1.34
  “Licensed Product”     5  
1.35
  “Marketing Approval”     5  
1.36
  “Milestone Event”     5  
1.37
  “Milestone Payment”     5  
1.38
  “MIT Agreement”     5  
1.39
  “Modified Cell Line”     5  
1.40
  “Modified Genentech CHO Cell Line”     6  
1.41
  “Other Modified Cell Line”     6  
1.42
  “Patents”     6  

 

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                      Page  
 
           
1.43
  “Phase I Clinical Trial”     6  
1.44
  “Phase III Clinical Trial”     6  
1.45
  “Research”     6  
1.46
  “Research Period”     6  
1.47
  “Research Plan”     6  
1.48
  “Research Results”     6  
1.49
  “Research Stage”     6  
1.50
  “Sangamo Deliverables”     6  
1.51
  “Sangamo IP Rights”     6  
1.52
  “Sangamo Know-How”     7  
1.53
  “Sangamo Patents”     7  
1.54
  “Scripps Agreement”     7  
1.55
  “Select Sangamo Licensors”     7  
1.56
  “Sublicense Agreement”     7  
1.57
  “Success Milestone Payment”     7  
1.58
  “Third Party”     7  
1.59
  “Third Party License”     7  
1.60
  “Utah Agreement”     7  
1.61
  “Valid Claim”     7  
1.62
  “ZFN”     7  
1.63
  “ZFN Modified Cell Line”     7  
1.64
  “ZFN Reagent”     7  
 
           
Article 2.
  Research Program     8  
2.1
  Liaisons.     8  
2.2
  Diligence; Decision Making; Research Plan.     8  
2.3
  [***] Evidence.     8  
2.4
  Non-Exclusive Relationship.     9  
2.5
  Improvements.     9  
 
           
Article 3.
  Fees and Milestone Payments     10  
3.1
  Payments Generally.     10  
3.2
  Up-Front Fee.     10  
3.3
  Technology Access Fees.     10  
3.4
  Research Milestone Payments.     10  
3.5
  Success Milestone Payment.     11  
3.6
  Development and Commercial Milestone Payments.     11  
3.7
  Taxes.     12  
 
           
Article 4.
  Intellectual Property     12  
4.1
  Disclosure of Inventions.     12  
4.2
  Ownership of Inventions; Cooperation.     12  
4.3
  Obtaining Patents.     12  
4.4
  Other Genentech Owned Inventions.     12  
4.5
  Enforcement of Sangamo Patents.     13  

 

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                      Page  
 
           
Article 5.
  Licenses     13  
5.1
  License to Genentech.     13  
5.2
  License to Sangamo.     15  
5.3
  No Implied Licenses.     15  
5.4
  Third Party Licenses.     15  
 
           
Article 6.
  Confidential Information     15  
6.1
  Obligations.     15  
6.2
  General Exceptions.     16  
6.3
  Disclosures Required by Law.     16  
6.4
  Disclosures to Third Party Licensors.     16  
6.5
  Termination of Prior Agreement.     16  
6.6
  Continuing Obligation.     17  
 
           
Article 7.
  Genentech Materials and Related Information     17  
7.1
  Ownership.     17  
7.2
  Use.     17  
7.3
  Return or Destruction.     17  
 
           
Article 8.
  Term and Termination     17  
8.1
  Term.     17  
8.2
  Termination by Either Party for Cause.     18  
8.3
  Termination of Research by Genentech for Cause.     18  
8.4
  Termination by Genentech for Convenience.     18  
8.5
  Licenses.     18  
8.6
  Effects of Termination.     19  
8.7
  Survival.     19  
 
           
Article 9.
  Indemnification; Limitation on Liability     19  
9.1
  Indemnification.     19  
9.2
  Limitation on Liability.     20  
 
           
Article 10.
  Dispute Resolution     21  
10.1
  Internal Resolution.     21  
10.2
  Arbitration.     21  
10.3
  Patent Disputes.     21  
10.4
  Continued Performance.     22  
 
           
Article 11.
  Public Disclosures; Use of Names     22  
11.1
  Publicity and Other Public Disclosures.     22  
11.2
  Use of Names.     23  
 
           
Article 12.
  Warranties     23  
12.1
  Mutual Warranties.     23  
12.2
  Sangamo Warranties.     23  
12.3
  Disclaimers.     24  

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                      Page  
 
           
Article 13.
  Notices     24  
 
           
Article 14.
  General Provisions     25  
14.1
  Governing Law.     25  
14.2
  Assignment.     25  
14.3
  Entire Agreement.     25  
14.4
  Amendment; Waiver.     25  
14.5
  Severability.     25  
14.6
  Construction.     25  
14.7
  Captions.     26  
14.8
  Relationship of the Parties.     26  
14.9
  Force Majeure.     26  
14.10
  Counterparts; Facsimiles.     26  

          Exhibits      
 
  Exhibit A   Research Plan
 
       
 
  Exhibit B   Designated Gene Sequences
 
       
 
  Exhibit C   Identified Patents
 
       
 
  Exhibit D   Press Release and Form 8-K Text
 
       
 
  Exhibit E   Certain Agreements Relating to Third Party Licenses
 
       
 
  Exhibit F   Certain Provisions of Third Party Licenses

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Research and License Agreement
     This Research and License Agreement (“Agreement”) is made and entered into,
effective as of April 27, 2007 (“Effective Date”), by and between Genentech,
Inc., having a principal place of business at 1 DNA Way, South San Francisco,
California 94080, (“Genentech”) and Sangamo BioSciences, Inc., having a
principal place of business at Point Richmond Tech Center, 501 Canal Boulevard,
Suite A100, Richmond, California 94804 (“Sangamo”), (collectively, the “Parties”
or individually, a “Party”).
Recitals
     Whereas, Genentech discovers, develops, manufactures, markets and sells
human pharmaceuticals on a worldwide basis;
     Whereas, Sangamo has certain proprietary technology for modifying genes,
which is of interest to Genentech; and
     Whereas, the Parties desire that Sangamo perform certain research using
Sangamo’s proprietary technology and one of Genentech’s proprietary cell lines
in accordance with the research plan under this Agreement.
Agreement
     Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Genentech and Sangamo agree as
follows:
Article 1. Definitions
     Capitalized terms used in this Agreement, whether used in the singular or
plural, shall have the meanings set forth below, unless otherwise specifically
indicated herein.
     1.1 “Accept the [***] Evidence” (and grammatical variations thereof) is
defined in the first paragraph under the heading “Genentech Responsibilities
(Research Stage 2)” in the Research Plan. “Accept the [***] Evidence” includes
those cases in which Genentech is deemed to Accept the [***] Evidence
(including, without limitation, under Section 2.3).
     1.2 “Affiliate” means, with respect to a particular Party, a person,
corporation, partnership, or other entity that controls, is controlled by or is
under common control with such Party. For the purposes of this definition, the
word “control” (including, with correlative meaning, the terms “controlled by”
or “under the common control with”) means (a) the direct or indirect ownership
of fifty percent (50%) or more of the stock having the right to vote for
directors thereof; or (b) the actual power, either directly or indirectly
through one or more intermediaries, to direct the management and policies of
such entity, whether by the ownership of at least fifty percent (50%) of the
voting stock of such entity, or by contract or otherwise.
     1.3 “[***] Gene” means a gene or genomic region whose translation product
contains a portion that is greater than 60% identical to a portion, consisting
of contiguous residues of at
 

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least 30% of the total length, of one or more of the [***] sequences provided in
Exhibit B, and any intronic, transcriptional, or regulatory sequences that
modulate the expression of such gene or genomic region. For the purposes of this
definition, alignment shall be performed by Sangamo using tBLASTn (i.e., Basic
Local Alignment Search Tool with a protein query and translated nucleotide
database) and default parameters. Notwithstanding the foregoing, but only for
the purposes of the Research Plan, the research milestone payments (under
Section 3.4) and the Success Milestone Payment (under Section 3.5), [***] Gene
means only the CHO gene whose cDNA coding sequence is provided to Sangamo in the
Genentech Deliverables (at beginning of Research Stage 1).
     1.4 “[***] Gene” means a gene or genomic region whose translation product
contains a portion that is greater than 60% identical to a portion, consisting
of contiguous residues of at least 30% of the total length, of one or more of
the [***] sequences provided in Exhibit B, and any intronic, transcriptional, or
regulatory sequences that modulate the expression of such gene or genomic
region. For the purposes of this definition, alignment shall be performed by
Sangamo using tBLASTn (i.e., Basic Local Alignment Search Tool with a protein
query and translated nucleotide database) and default parameters.
Notwithstanding the foregoing, but only for the purposes of the Research Plan,
the research milestone payments (under Section 3.4) and the Success Milestone
Payment (under Section 3.5), [***] Gene means only the CHO gene whose cDNA
coding sequence is provided to Sangamo in the Genentech Deliverables (at
beginning of Research Stage 1).
     1.5 “BLA” means a Biologics License Application or other such application
(other than a supplemental application) filed with the U.S. Food and Drug
Administration (or any successor entity thereto performing similar functions)
for the purpose of obtaining Marketing Approval for a Licensed Product in the
United States.
     1.6 “Caltech Agreement” means the Third Party License between Sangamo and
the California Institute of Technology, dated November 1, 2003, as amended as of
the Effective Date, and prior to any amendments after the Effective Date.
     1.7 “CHO” means Chinese hamster ovary.
     1.8 “Collaboration Partner” means, with respect to a given Licensed
Product, a Third Party to which Genentech has granted a license to use, sell,
offer for sale and/or import such Licensed Product, whether or not such license
includes the right to make such Licensed Product.
     1.9 “Commercially Diligent Efforts” means, (a) with respect to Sangamo,
efforts and resources comparable to those expended by Sangamo on its projects
for a Third Party of a similar nature (i.e., protein production projects) and
(b) with respect to Genentech, efforts and resources comparable to those
expended by Genentech on its internal process development projects of comparable
value to Genentech.
     1.10 “Confidential Information” means a Party’s nonpublic information that
is disclosed to the other Party in connection with this Agreement (including,
without limitation, information regarding such Party’s research, technology,
assays, protocols, methods, processes,
 

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data, products and business information or objectives), provided that any such
information disclosed in written, electronic or other tangible form is marked as
“confidential” or with a similar legend. Nonpublic information of a Party that
is disclosed other than in tangible form (e.g., disclosed orally or by
observation of the other Party) shall be considered Confidential Information of
such Party only if so identified in writing to the other Party within thirty
(30) days after initial disclosure and such writing identifies such Confidential
Information with particularity. Notwithstanding the foregoing marking
requirement, Genentech’s Confidential Information shall include (a) the identity
of the Designated Genes as the focus of this Agreement; (b) Genentech’s interest
in the Designated Genes as potential targets for modification to enhance the
protein production of cell lines; (c) the Research Plan; (d) the Research
Results; and (e) all information in the Genentech Deliverables, whether or not
any of the foregoing information in (a) through (e) is so marked. The terms and
conditions of this Agreement (including, without limitation, the financial
terms) shall be the Confidential Information of both Parties.
     1.11 “Confidentiality Agreement” is defined in Section 6.5.
     1.12 “Controlled by” means the rightful possession by a Party of the
ability to grant a license, sublicense or other right to exploit, as provided in
this Agreement, without violating the terms of any agreement with any Third
Party.
     1.13 “Covering” (and grammatical variations thereof) means that, with
respect to a given Licensed Product, a protein contained in such Licensed
Product was expressed by a Modified Cell Line and (a) the making or use of such
Modified Cell Line fell within the scope of a Valid Claim (in the country of
such making or use) at the time of such making or use; and/or (b) if such
Modified Cell Line is a ZFN Modified Cell Line, the making or use of a ZFN
Reagent used to create such Modified Cell Line fell within the scope of a Valid
Claim (in the country of such making or use) at the time of such making or use.
     1.14 “[***] Evidence” is defined under the heading “Sangamo Deliverables
(at end of Research Stage 2)” in the Research Plan.
     1.15 “Delivery Days to Genentech” means the number of days in the period
starting on the Effective Date and ending on the date on which Genentech has
received all of the [***] Evidence for both Designated Genes (regardless of how
much time lapses before Genentech Accepts the [***] Evidence). If Genentech does
not ultimately Accept the [***] Evidence for both Designated Genes, the Delivery
Days to Genentech shall be deemed to be zero.
     1.16 “Designated Gene” means [***].
     1.17 “Donor Sequence” means, with respect to a given Designated Gene, a DNA
sequence sharing homology with sequences upstream and downstream of a ZFN
cutting site in such Designated Gene, where such sequences are of sufficient
length [***] to allow homologous recombination to occur at an efficiency of
[***]. The Donor Sequence for a given Designated Gene shall also contain a DNA
sequence for insertion into such Designated Gene via homologous recombination,
and such DNA sequence may contain [***], as agreed to by the Liaisons.
 

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     1.18 “Executive” means, in the case of Sangamo, its Chief Executive Officer
and, in the case of Genentech, a Senior Vice President, or their respective
designees. Notwithstanding the foregoing, in the event of a dispute arising
under Section 2.3(c), “Executive” means, in the case of Sangamo, its Chief
Scientific Officer and, in the case of Genentech, its Senior Vice President of
Research Drug Discovery or its Executive Vice President of Research.
     1.19 “Existing Third Party Licenses” means the Caltech Agreement, the JHU
Agreement, the MIT Agreement, the Scripps Agreement and the Utah Agreement.
     1.20 “First Commercial Sale” means the first bona fide commercial sale of a
product in a country following Marketing Approval for such product in such
country by or under authority of Genentech or its sublicensees.
     1.21 “Functional [***]” (and grammatical variations thereof) means the
targeted alteration of DNA sequences in [***] of a Designated Gene, where such
alteration [***].
     1.22 “Genentech CHO Cell Line” means the CHO cell line provided to Sangamo
in the Genentech Deliverables.
     1.23 “Genentech CHO DNA Extract” means the extract of purified genomic DNA
from the Genentech CHO Cell Line that is provided to Sangamo in the Genentech
Deliverables.
     1.24 “Genentech Deliverables” means those materials, information, reports
and other items that Genentech provides to Sangamo under this Agreement
including, without limitation, those identified under the heading “Genentech
Deliverables” in the various Research Stages of the Research Plan.
     1.25 “Genentech License” is defined in Section 5.1(a).
     1.26 “Genentech Materials” means tangible materials included in the
Genentech Deliverables including, without limitation, the Genentech CHO Cell
Line and the Genentech CHO DNA Extract. Genentech Materials also include
tangible biological materials derived physically from Genentech Materials
including, without limitation, ZFN Modified Cell Lines derived from the
Genentech CHO Cell Line or from another Genentech proprietary cell line.
     1.27 “Identified Patents” means those patents and patent applications
identified on Exhibit C (including those owned and those in-licensed by
Sangamo).
     1.28 “Improved ZFN Reagent” means a ZFN Reagent that incorporates or is
made using an Improvement.
     1.29 “Improvement” means any improvement made by or on behalf of Sangamo
during the term of the Agreement (whether or not such improvement is patentable)
to ZFNs and associated reagents (including, without limitation, expression
plasmids and Donor Sequences) and/or Sangamo Know-How (including
methodologies/protocols for creating ZFN Modified Cell Lines), where such
improvement would improve by [***] the (a) efficiency of creating ZFN Modified
Cell Lines; (b) time taken to create ZFN Modified Cell Lines; and/or
(c) activity of any ZFN Reagent. For purposes of this definition, “efficiency”
refers to: (i) transfer
 

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efficiency, in terms of percent of cells that uptake ZFN Reagents by
transfection or comparable procedure; or (ii) frequency of targeted alteration
in a Designated Gene within a population of cells, after delivery of ZFN
Reagent(s) to such population. For purposes of this definition, “time taken”
refers to the time taken from delivery of a ZFN Reagent(s) to a cell line to the
identification of a clone in which a Designated Gene has been Functionally
[***]. For purposes of this definition, “activity” refers to: (i) DNA binding
activity or strength of the DNA binding domain of a ZFN; (ii) DNA cleavage
activity of the nuclease domain of a ZFN Reagent; (iii) in vivo activity in
terms of percent of cells in which a Designated Gene has been Functionally
[***], after delivery of ZFN Reagent(s) to such cells; or (iv) frequency of
homologous recombination with Donor Sequences.
     1.30 “Invention” is defined in Section 4.1.
     1.31 “JHU Agreement” means the Third Party License between Sangamo and
Johns Hopkins University, dated June 29, 1995, as amended as of the Effective
Date, and prior to any amendments after the Effective Date.
     1.32 “Know-How” means information or materials including, without
limitation, sequence information, data, assays, protocols, methods, processes,
techniques, models, designs, libraries and trade secrets.
     1.33 “Liaison” is defined in Section 2.1.
     1.34 “Licensed Product” means a product that contains a protein expressed
by a Modified Cell Line.
     1.35 “Marketing Approval” means all approvals, licenses, registrations or
authorizations of any federal, state or local regulatory agency, department,
bureau or other governmental entity, necessary for the manufacturing, use,
storage, import, transport and sale of a product in a regulatory jurisdiction.
For countries where governmental approval is required for pricing or
reimbursement for such product to be reimbursed by national health insurance,
“Marketing Approval” shall not be deemed to occur until such pricing or
reimbursement approval is obtained.
     1.36 “Milestone Event” means a milestone event identified in the table in
Section 3.6(b).
     1.37 “Milestone Payment” means a milestone payment identified in the table
in Section 3.6(b).
     1.38 “MIT Agreement” means the Third Party License between Sangamo and the
Massachusetts Institute of Technology, dated May 9, 1996, as amended as of the
Effective Date, and prior to any amendments after the Effective Date.
     1.39 “Modified Cell Line” means a ZFN Modified Cell Line or an Other
Modified Cell Line.
 

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     1.40 “Modified Genentech CHO Cell Line” means a ZFN Modified Cell Line
derived from the Genentech CHO Cell Line.
     1.41 “Other Modified Cell Line” means a cell line that contains one or more
targeted alterations in the genomic DNA (when compared with the parental cell
line from which it was derived) of either or both of the Designated Genes, where
no alterations in the genomic DNA of such cell line are the result of using ZFN
Reagents.
     1.42 “Patents” means all United States and foreign patents and patent
applications and any patents issuing therefrom, and any reissues, extensions,
registrations, continuations, divisions, continuations-in-part, reexaminations,
substitutions or renewals thereof, and supplementary protection certificates
based thereon.
     1.43 “Phase I Clinical Trial” means a human clinical trial, the principal
purpose of which is preliminary determination of safety in healthy individuals
or patients as described in 21 C.F.R. §312.21, or a similar clinical study in a
country other than the United States.
     1.44 “Phase III Clinical Trial” means a human clinical trial that is
prospectively designed to demonstrate statistically whether a product is safe
and effective for use in humans in a manner sufficient to obtain regulatory
approval to market such product in patients having the disease or condition
being studied as described in 21 C.F.R. §312.21, or a similar clinical study in
a country other than the United States.
     1.45 “Research” means the research activities set forth in the Research
Plan.
     1.46 “Research Period” means the period during which research activities
under the Research Plan are ongoing.
     1.47 “Research Plan” means the plan for the research activities to be
performed by the Parties under this Agreement, as outlined in Exhibit A.
     1.48 “Research Results” means all (a) data (including, without limitation,
the underlying data, summarized data and reports); and (b) Know-How related
specifically to the Genentech Materials, in each case, generated in the course
of and/or drawn from the Research by either Party.
     1.49 “Research Stage” means a particular stage of the Research, as
identified in the Research Plan.
     1.50 “Sangamo Deliverables” means those materials, information, reports and
other items that Sangamo provides to Genentech under this Agreement including,
without limitation, those identified under the heading of “Sangamo Deliverables”
in the various Research Stages of the Research Plan.
     1.51 “Sangamo IP Rights” means Sangamo’s intellectual property rights in
the Sangamo Know-How and the Sangamo Patents.

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     1.52 “Sangamo Know-How” means Know-How that is Controlled by Sangamo,
existing as of the Effective Date or thereafter, to the extent necessary or
reasonably useful to make or use (including for validation purposes) ZFN
Reagents and/or ZFN Modified Cell Lines.
     1.53 “Sangamo Patents” means Patents that are Controlled by Sangamo,
existing as of the Effective Date or thereafter, having one or more claims that
encompass (a) ZFN Reagents and/or ZFN Modified Cell Lines; and/or (b) the making
and/or use of ZFN Reagents and/or ZFN Modified Cell Lines. Sangamo Patents
include, without limitation, the Identified Patents.
     1.54 “Scripps Agreement” means the Third Party License between Sangamo and
the Scripps Research Institute, dated March 14, 2000, prior to any amendments
after the Effective Date.
     1.55 “Select Sangamo Licensors” means the Massachusetts Institute of
Technology and its trustees, directors, officers, employees and affiliates, and
Johns Hopkins University and its trustees, officers, employees, students and
affiliates.
     1.56 “Sublicense Agreement” is defined in Section 5.1(c).
     1.57 “Success Milestone Payment” is defined in Section 3.5.
     1.58 “Third Party” means any entity other than Sangamo or Genentech.
     1.59 “Third Party License” is defined in Section 5.4(a).
     1.60 “Utah Agreement” means the Third Party License between Sangamo and the
University of Utah Research Foundation, dated September 8, 2004, as amended as
of the Effective Date, and prior to any amendments after the Effective Date.
     1.61 “Valid Claim” means a claim of an issued and unexpired patent that
(a) is within the Sangamo Patents; and (b) has not been found to be
unpatentable, invalid or unenforceable by a decision of a court or other
authority in the country of the patent, from which decision no appeal is taken
or can be taken.
     1.62 “ZFN” means a (a) zinc-finger nuclease protein or (b) nucleic acid
coding sequence that encodes such a nuclease.
     1.63 “ZFN Modified Cell Line” means a cell line that contains one or more
targeted alterations in the genomic DNA (when compared with the parental cell
line from which it was derived) of either or both of the Designated Genes, where
at least one (1) of such alterations in such Designated Genes is the result of
using ZFN Reagents.
     1.64 “ZFN Reagent” means, with respect to a given Designated Gene, (a) a
ZFN that specifically targets such Designated Gene; and/or (b) any Donor
Sequence for such Designated Gene, in each case, where such ZFN and/or Donor
Sequence is one that is provided by Sangamo to Genentech under this Agreement.
ZFN Reagents also include Improved ZFN Reagents and copies of ZFN Reagents,
whether made by Sangamo, Genentech or a Third Party.

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Article 2. Research Program
     2.1 Liaisons. Promptly following the Effective Date, each Party shall
designate an individual to act as the primary contact for such Party for matters
related to this Agreement (referred to in this Agreement as such Party’s
“Liaison”), unless another contact is expressly provided herein. Until the
completion of the activities in Research Stage 2, the Liaisons shall schedule
teleconferences or meetings at least every four (4) weeks or as otherwise
agreed. In addition, at any time during the Research Period, upon Genentech’s
reasonable request, the Parties shall discuss the results of activities under
the Research Plan thus far obtained by telephone or as otherwise agreed.
     2.2 Diligence; Decision Making; Research Plan. Each Party shall perform its
respective obligations under the Research Plan using Commercially Diligent
Efforts. Sangamo’s Liaison shall have final decision making authority with
respect to [***]; Genentech’s Liaison shall have final decision making authority
with respect to [***]. No change in the Research Plan or funding shall be
permitted without the prior written agreement of the Parties. In the event of
any conflict or inconsistency between the main body of this Agreement and the
Research Plan, the terms and conditions of the main body shall prevail.
     2.3 [***] Evidence.
          (a) Review and Notice. As set forth under the heading “Genentech
Responsibilities (Research Stage 2)” in the Research Plan, Genentech shall
review the [***] Evidence for a given Designated Gene. Within three (3) weeks
after receipt of such [***] Evidence (for purposes of this Section 2.3, the
“Review Period”), Genentech shall notify Sangamo as to whether or not Genentech
Accepts such [***] Evidence. If Genentech does not notify Sangamo as to whether
or not it Accepts such [***] Evidence by the end of such Review Period, Sangamo
shall send a reminder notice to Genentech that a response is due, and the
initial Review Period shall be automatically extended until the date that is one
(1) week from the date Sangamo’s reminder notice is received by Genentech. If
Genentech does not notify Sangamo as to whether or not it Accepts such [***]
Evidence by the end of such extended Review Period, Genentech shall be deemed to
Accept such [***] Evidence.
          (b) Rejection of [***] Evidence. If Genentech notifies Sangamo under
Section 2.3(a) that Genentech does not Accept such [***] Evidence, Genentech’s
notice shall specifically identify the reason(s) for the rejection. If such
rejection is because Sangamo did not provide all of the required [***] Evidence,
and Sangamo does not dispute such rejection, Sangamo shall provide the missing
[***]Evidence and the initial Review Period (and review procedures under Section
2.3(a)) shall begin again upon Genentech’s receipt of such additional [***]
Evidence.
          (c) Disputed Rejection of [***] Evidence. In the event that Sangamo
believes that Genentech’s rejection (for any reason) of given [***] Evidence is
not justified, the Parties shall attempt to resolve such dispute through
amicable discussions between the Parties’ respective Liaisons. In the event that
the Liaisons are unable to resolve such dispute within [***] weeks after
Genentech’s notice of rejection, [***].
 

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          (d) Other Research Stage 2 Sangamo Deliverables. Unless and until
Genentech Accepts the [***] Evidence with respect to a given Designated Gene,
Sangamo shall not have any obligation to provide to Genentech those ZFN Reagents
and Modified Genentech CHO Cell Lines for such Designated Gene, or any Sangamo
Know-How or training, as described under the heading “Sangamo Deliverables (at
end of Research Stage 2)” in the Research Plan for such Designated Gene.
     2.4 Non-Exclusive Relationship.
          (a) ZFN Reagents and ZFN Modified Cell Lines. Excluding Modified
Genentech CHO Cell Lines, and subject to this Section 2.4 and other provisions
of this Agreement, Sangamo retains the right to (i) make and use ZFN Reagents
and ZFN Modified Cell Lines for itself and others; (ii) sell or otherwise
transfer ZFN Reagents and ZFN Modified Cell Lines to Third Parties; and (iii)
grant licenses to Third Parties with respect to ZFN Reagents and ZFN Modified
Cell Lines.
          (b) Delivery Times to Third Parties. With respect to ZFN Reagents
other than Improved ZFN Reagents, Sangamo shall not provide such ZFN Reagents to
any Third Party [***]. Further, Sangamo shall not provide Improved ZFN Reagents
to any Third Party [***]; after the end of such period, Sangamo may provide
Improved ZFN Reagents to Third Parties at any time. For clarity, in the event
that Genentech does not ultimately Accept the [***] Evidence for [***], this
Section 2.4(b) shall place no restriction on Sangamo’s ability to provide ZFN
Reagents (including Improved ZFN Reagents) to Third Parties.
          (c) [***]. Sangamo shall not provide any ZFN Reagents and/or grant
licenses under the Sangamo IP Rights with respect to the Designated Genes that
are [***]. Any election to make such substitution shall be made by Genentech (if
at all) in writing within thirty (30) days after Genentech receives such notice.
If such substitution results in [***], the amount of [***] within thirty
(30) days after Sangamo’s receipt of Genentech’s written election to make such
substitution. If [***] the amount of [***] shall be [***] under this Agreement.
     2.5 Improvements.
          (a) Notices; Payments to Third Parties. During the Research Period,
Sangamo shall notify Genentech of any Improvements at least on a [***] basis;
thereafter, such notice shall be at least on a [***] basis. Such notice for a
given Improvement shall (i) identify the [***] and (ii) include, if applicable,
the same notice that Sangamo would provide under Section 2.5(d). Thereafter,
Genentech may request that Sangamo provide Improvements to Genentech by
notifying Sangamo of the particular Improvement(s) being requested. [***].
Nothing in this Section 2.5 shall be interpreted as obligating Sangamo to take
any action that would constitute a breach of any agreement with any Third Party.
 

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          (b) Provision of Improvements. If Sangamo makes an Improvement to a
ZFN Reagent for a Designated Gene, Sangamo shall provide the applicable Improved
ZFN Reagent to Genentech ([***])). If Sangamo makes an Improvement that is not
to a ZFN Reagent for a Designated Gene, [***]. If Sangamo makes an Improvement
to methodologies/protocols for using ZFN Reagents, Sangamo shall provide such
methodologies/protocols to Genentech. Sangamo shall also provide to Genentech
any and all Sangamo Know-How that is necessary to enable Genentech to use
Improved ZFN Reagents to create ZFN Modified Cell Lines. Other than [***] agreed
to by Genentech under Section 2.5(a), any Improved ZFN Reagents, materials or
Sangamo Know-How provided to Genentech under this Section 2.5(b) shall be [***]
to Genentech and shall be provided promptly after Genentech’s request for a
particular Improvement under Section 2.5(a).
          (c) Training. If requested by Genentech, for each Improvement, Sangamo
shall provide to Genentech researcher(s) (at Sangamo’s research site in
Richmond, CA) up to [***] of training in the making and use of Improved ZFN
Reagents at Sangamo’s then current FTE (i.e., full time equivalent) rates.
          (d) Notice of Third Party IP. Sangamo shall promptly notify Genentech
if Sangamo learns of any Third Party intellectual property that, in Sangamo’s
reasonable opinion, could potentially be infringed by the making or use of an
Improvement or an Improved ZFN Reagent provided to Genentech under
Section 2.5(b).
Article 3. Fees and Milestone Payments
     3.1 Payments Generally. Each payment due under this Article 3 (including,
without limitation, Milestone Payments) shall be paid to Sangamo within [***]
days of receipt of an invoice from Sangamo to be sent to Genentech following the
achievement of the event triggering such payment. All invoices shall identify
the event triggering the payment being invoiced and, unless otherwise requested
by Genentech in writing, shall be sent to Genentech at the address in the
preamble of this Agreement, to the attention of Group Controller, [***]. All
payments due under this Agreement shall be paid in U.S. dollars in immediately
available funds by wire transfer to an account to be identified by the payee and
shall be non-refundable and non-creditable against any other payment due Sangamo
under this Agreement, except as provided under Section 2.4(c).
     3.2 Up-Front Fee. Upon the signing of this Agreement by both Parties,
Genentech shall pay to Sangamo an up-front fee of $[***].
     3.3 Technology Access Fees. Three (3) months after the Effective Date,
Genentech shall pay to Sangamo an initial technology access fee of $[***].
Thereafter, on each anniversary of the Effective Date (starting with the first
anniversary) prior to the First Commercial Sale of the first Licensed Product,
Genentech shall pay to Sangamo an annual technology access fee of $[***].
     3.4 Research Milestone Payments. For each Designated Gene, if Genentech (a)
[***] for such Designated Gene; (b) [***] for such Designated Gene; and (c)
[***] for such Designated Gene, Genentech shall notify Sangamo (within [***]
days of the achievement of all
 

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of such events) and pay to Sangamo a research milestone payment of $[***].
Notwithstanding the payment provisions of Section 3.1, if the [***], such
payment shall not be due until [***] days after Genentech’s receipt of
replacement ZFN Reagents that are not defective.
     3.5 Success Milestone Payment. Upon Genentech’s successful in-house
generation [***], Genentech shall notify Sangamo (within [***] days of the
achievement of such event) and pay to Sangamo a success milestone payment of
$[***] (“Success Milestone Payment”); if Genentech, despite its Commercially
Diligent Efforts, does not [***], no Success Milestone Payment shall be due.
     3.6 Development and Commercial Milestone Payments.
          (a) Payments Generally. Upon the first achievement of each Milestone
Event with respect to a given Licensed Product by or on behalf of Genentech (or
a Collaboration Partner), Genentech shall notify Sangamo (within [***] days of
when Genentech becomes aware of the achievement of such event) and pay (or cause
to be paid) to Sangamo the corresponding Milestone Payment, subject to the other
provisions of this Section 3.6. For purposes of this Agreement, a given Licensed
Product shall be treated as different from another Licensed Product if the
marketing of each of such Licensed Products in the United States would require
separate BLA submissions.
          (b) Milestone Events and Milestone Payments.

      Milestone Event   Milestone Payment
(#1)[***]
  $[***]
(#2) [***]
  $[***]
(#3) [***]
  $[***]
(#4) [***]
  $[***]
(#5) [***]
  $[***]
(#6) [***]
  $[***]

          (c) Term of Milestone Payment Obligation. Genentech’s obligation to
make Milestone Payments for a given Licensed Product under this Section 3.6
shall be in accordance with the following:
(i) [***]; or
(ii) [***].
          (d) Retroactive Payments. [***]
          (e) Single Milestone Payment. In no event shall a particular Milestone
Payment be due to Sangamo more than once with respect to a given Licensed
Product, even if
 

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such Licensed Product contains more than one (1) protein expressed by a Modified
Cell Line or is Covered by more than one Valid Claim.
     3.7 Taxes. Each Party shall comply with applicable laws and regulations
regarding filing and reporting for income tax purposes. Neither Party shall
treat their relationship under this Agreement as a pass through entity for tax
purposes. All payments made under this Agreement shall be free and clear of any
and all taxes, duties, levies, fees or other charges, except for withholding
taxes. Each Party shall be entitled to deduct from its payments to the other
Party under this Agreement the amount of any withholding taxes required to be
withheld, to the extent paid to the appropriate governmental authority on behalf
of the other Party (and not refunded or reimbursed). Each Party shall deliver to
the other Party, upon request, proof of payment of all such withholding taxes.
Each Party shall provide reasonable assistance to the other Party in seeking any
benefits available to such Party with respect to government tax withholdings by
any relevant law, regulation or double tax treaty.
Article 4. Intellectual Property
     4.1 Disclosure of Inventions. “Invention” means any invention or discovery
(including any Know-How), whether or not patentable, that is discovered,
conceived or reduced to practice in the course of performing activities under
the Research Plan. Sangamo shall promptly disclose to Genentech Inventions that
are discovered, conceived or reduced to practice by or on behalf of Sangamo
(whether solely or jointly with another party).
     4.2 Ownership of Inventions; Cooperation. Except as otherwise expressly
provided in this Agreement, ownership of Inventions will follow inventorship, as
determined by the respective patent counsel of the Parties in accordance with
United States patent law. Each Party shall reasonably cooperate with and assist
the other Party, at such other Party’s request, in connection with the filing
and prosecution of patent applications for Inventions owned by such other Party
including, without limitation, by making scientists and scientific records
reasonably available to such other Party.
     4.3 Obtaining Patents. Sangamo shall, at its expense, use commercially
reasonable efforts to obtain patent protection covering (a) the ZFN Reagents
(other than Improved ZFN Reagents); (b) the use of such ZFN Reagents in CHO cell
lines to create ZFN Modified Cell Lines; and (c) ZFN Modified Cell Lines.
Sangamo may, at its sole discretion, use the Research Results to fulfill its
obligations under the preceding sentence. Further, in consultation with
Genentech, Sangamo shall, at its expense, use commercially reasonable efforts to
file a patent application that specifically claims [***]. Sangamo shall assign
any such application to Genentech, and Genentech shall control prosecution of
such application.
     4.4 Other Genentech Owned Inventions. If Sangamo files any patent
application that claims an invention that is specifically related to the
Genentech CHO Cell Line or the Genentech CHO DNA Extract (including sequence
information derived therefrom), and such invention is not generally applicable
to CHO cells or CHO DNA, Sangamo shall (a) cancel any claims to such invention
in such patent application; (b) file such claims in a subsequent divisional or
continuation application; (c) assign such subsequent application to Genentech;
and (d) transfer control of prosecution of such subsequent application to
Genentech. If the Parties
 

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disagree, Genentech shall bear the burden of demonstrating that such invention
is specifically related to the Genentech CHO Cell Line or the Genentech CHO DNA
Extract and is not generally applicable to CHO cells or CHO DNA.
     4.5 Enforcement of Sangamo Patents. If either Party learns of any alleged
infringement of any Sangamo Patents by a Third Party’s making of Licensed
Products for commercial purposes, that Party shall promptly notify the other
Party of such alleged infringement. Sangamo shall retain the sole right, at its
sole discretion, to enforce the Sangamo Patents against such alleged Third Party
infringers. However, if Sangamo fails to abate any such alleged infringement of
the Sangamo Patents involving modification of the genomic DNA of either or both
of the Designated Genes in a manufacturing cell line within [***] after receipt
of notice (by either Party) under this Section 4.5, Genentech shall be entitled
to reduce the Milestone Payments by [***] of the payments that would otherwise
be due until such time as Sangamo abates such infringement or until a final
determination regarding such alleged infringement has been reached (i.e., a
final non-appealable court action or settlement).
Article 5. Licenses
     5.1 License to Genentech.
          (a) Genentech License. Sangamo hereby grants to Genentech a
non-exclusive, worldwide, sublicensable (in accordance with Section 5.1(b))
license, under the Sangamo IP Rights, (i) to make, use and import ZFN Reagents
(and any associated expression plasmids provided by Sangamo to Genentech under
this Agreement) solely for the purpose of altering the genomic DNA of either or
both of the Designated Genes in a cell line to create ZFN Modified Cell Lines;
(ii) to alter the genomic DNA of either or both of the Designated Genes in a
cell line to create Modified Cell Lines; and (iii) to make, use and import
Modified Cell Lines created under clauses (i) and (ii) solely for the purpose of
making Licensed Products. The foregoing license is referred to in this Agreement
as the “Genentech License.” Notwithstanding anything to the contrary in this
Agreement, the Genentech License does not include a license to alter any genomic
DNA other than the genomic DNA of a Designated Gene. The Genentech License is
subject to the provisions of Section 5.4(a).
          (b) Right to Grant Sublicenses. Subject to Section 5.1(d), Genentech
has the right to grant sublicenses under the Genentech License to a Third
Party(ies) if (i) such sublicense is related to particular Licensed Product(s)
that were the subject of Genentech’s research and/or development or were
in-licensed by Genentech (and not related to Licensed Products in general); and
(ii) Genentech has previously granted or concurrently grants (i.e., together
with the grant of such sublicense) to such Third Party a license, under
intellectual property rights other than the Genentech License, related to such
particular Licensed Product(s) or to product(s) that contain the same protein(s)
as such particular Licensed Product(s). Subject to Section 5.1(d), any such
sublicense may be further sublicensed by a sublicensee to multiple tiers of
sublicensees, subject to the same requirement regarding a previously or
concurrently granted license by such sublicensee. In addition, Genentech has the
right to grant sublicenses under the Genentech License to a Third Party(ies) if
Genentech receives the prior written consent of Sangamo, which shall not be
unreasonably withheld.
 

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          (c) Requirements for Sublicense Agreements. Each agreement granting a
sublicense under the Genentech License (each such agreement, a “Sublicense
Agreement”) shall require that the relevant sublicensee agrees in writing that
the sublicense granted in such Sublicense Agreement is subject to those terms
and conditions of the Third Party Licenses that are set forth in Exhibit E
mutatis mutandis (e.g., as if applicable references to Genentech, “this
Agreement” and the “Genentech License” were, respectively, references to such
sublicensee, such Sublicense Agreement and such sublicense) with respect to each
Third Party License sublicensed thereunder. Genentech shall provide to Sangamo
copies of any Sublicense Agreements (which shall be deemed to be the
Confidential Information of Genentech, whether or not so marked) promptly after
execution thereof; provided, however, Genentech may redact such copies to delete
any provisions that are not relevant to this Agreement or a Third Party License.
Sangamo may disclose such copies of Sublicense Agreements (or summaries of their
terms) to the applicable Third Party licensor, in accordance with Section 6.4.
          (d) Caltech IP. Sangamo hereby notifies Genentech that, pursuant to
Section 2.3 of the Caltech Agreement, Genentech does not have the right to grant
sublicenses under the intellectual property licensed to Sangamo pursuant to the
Caltech Agreement. Upon Genentech’s written request, Sangamo shall promptly
grant (not subject to any additional terms and conditions including, without
limitation, any additional payments or other consideration) a non-exclusive
license, under the intellectual property licensed to Sangamo pursuant the
Caltech Agreement, to any Third Party to which Genentech is permitted under
Section 5.1(b) of this Agreement to grant a sublicense. The scope of such
license shall satisfy the requirement set forth in Section 5.1(b)(i) and shall
in no event be greater than the scope of the Genentech License.
          (e) Exercise of License Rights by a Third Party. Third Parties may
exercise the “make” and/or “use” license rights granted to Genentech (or a
sublicensee) under the Genentech License on Genentech’s (or such sublicensee’s)
behalf without the grant of a sublicense of such rights.
          (f) Materials. Genentech shall not modify the ZFN Reagents in any way
or create any derivatives or sequence variants thereof (other than for the
purpose of creating Improved ZFN Reagents); provided, however, Genentech may
transfer the ZFNs from ZFN Reagents into different expression plasmids. As
between Genentech and Sangamo, Genentech shall own any ZFN Reagents and ZFN
Modified Cell Lines made by Genentech, a sublicensee under the Genentech License
or a Third Party on behalf of Genentech or such sublicensee; provided, however,
such ownership is with respect to the tangible materials and does not imply
ownership of intellectual property pertaining to or embodied in such tangible
materials, which shall be in accordance with the other provisions of this
Agreement.
          (g) Fully Paid. Upon the expiration of Genentech’s obligation to make
Milestone Payments for a given Licensed Product, the Genentech License
(including any sublicenses granted thereunder) with respect to such Licensed
Product shall be fully-paid and irrevocable.
          (h) No Non-Permitted Use. Genentech hereby covenants that it shall not
willfully, nor shall it expressly cause or permit any Third Party, (i) to make,
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or reverse engineer ZFN Reagents and any associated expression plasmids for any
purpose other than creating ZFN Modified Cell Lines; or (ii) to practice any
invention claimed in a Sangamo Patent for the purpose of altering genomic DNA
other than the genomic DNA of a Designated Gene.
     5.2 License to Sangamo. Genentech hereby grants to Sangamo a non-exclusive,
non-sublicensable license, under intellectual property rights Controlled by
Genentech, solely for the purpose of performing Sangamo’s activities under the
Research Plan.
     5.3 No Implied Licenses. Except to the limited extent necessary for a Party
to perform its obligations under this Agreement, or as otherwise expressly
provided herein, this Agreement does not grant any right or license under any
intellectual property rights of a Party, or otherwise, and no other right or
license is to be inferred from any provision of this Agreement or by the conduct
of the Parties.
     5.4 Third Party Licenses.
          (a) Performance Under Third Party Licenses. The Genentech License
includes sublicenses under Sangamo IP Rights licensed (as of the Effective Date
or thereafter) to Sangamo pursuant to agreements with Third Parties (each such
agreement, a “Third Party License”). As a result, this Agreement and the
Genentech License are subject to those terms and conditions of the Third Party
Licenses that are set forth in Exhibit E. Except to the extent set forth in
Exhibit E, Sangamo shall be responsible for performing all obligations under the
Third Party Licenses including, without limitation, any payment obligations,
even if such payment arises as a result of Genentech’s (or its sublicensees’)
activities under this Agreement.
          (b) Maintenance. With respect to each Third Party License, Sangamo
shall not (i) commit any acts or omissions that reasonably could cause a breach
of such Third Party License; (ii) amend or terminate such Third Party License;
or (iii) exercise or waive any rights it may have under such Third Party
License, in each of the foregoing cases, in any way that reasonably could
adversely affect the Genentech License (including any sublicenses granted
thereunder) or impose additional obligations on Genentech. In the event that
Sangamo receives a notice of a breach of a Third Party License that reasonably
could adversely affect the Genentech License, Genentech shall reasonably
cooperate with Sangamo to cure such breach.
          (c) Notices. With respect to each Third Party License, Sangamo shall
notify Genentech within ten (10) business days after Sangamo first obtains
knowledge or any information regarding any events or circumstances relating to
such Third Party License that reasonably could adversely affect the Genentech
License including, without limitation, (i) any notice of breach or termination,
or any threat of breach or termination, of such Third Party License; and
(ii) any communication regarding the scope of the rights granted in such Third
Party License.
Article 6. Confidential Information
     6.1 Obligations. Each Party agrees (a) to use the other Party’s
Confidential Information solely for the purposes of, and in accordance with,
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otherwise expressly permitted in this Agreement, to not disclose the other
Party’s Confidential Information to any Third Party without the other Party’s
prior written consent. Sangamo hereby consents that Sangamo’s Confidential
Information may be disclosed to Third Parties to which a sublicense (under the
Genentech License) is granted under Section 5.1(b) or Third Parties that may
exercise license rights (under the Genentech License) under Section 5.1(e),
provided that any such Third Party has a need to know such Confidential
Information and is subject to obligations of confidentiality and limitations on
use to substantially the same extent as required by the provisions of this
Article 6.
     6.2 General Exceptions. The obligations under Section 6.1 do not pertain to
any Confidential Information that a Party establishes by documentary evidence
(a) was already known to such Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party; (b) was generally
available to the public or otherwise part of the public domain at the time of
its disclosure to such Party; (c) became generally available to the public or
otherwise part of the public domain after its disclosure and other than through
any act or omission of such Party in breach of this Agreement; (d) was disclosed
to such Party, other than under an obligation of confidentiality, by a Third
Party who had no obligation to the other Party not to disclose such information
to others; or (e) was independently developed by or on behalf of such Party
without use of the other Party’s Confidential Information.
     6.3 Disclosures Required by Law. Notwithstanding any other provision of
this Agreement, a Party may disclose Confidential Information of the other Party
if such disclosure is required by law, rule or regulation (including, without
limitation, to comply with any court order or governmental regulation, including
the duty to disclose Confidential Information material to patentability under 37
CFR §1.56), provided that the Party making such disclosure shall give reasonable
advance written notice to the other Party of such requirement and, at such other
Party’s request, shall cooperate with such other Party’s efforts to limit such
disclosure or to secure confidential treatment of such Confidential Information
through protective orders or otherwise.
     6.4 Disclosures to Third Party Licensors. Notwithstanding any other
provision of this Agreement, Sangamo may disclose this Agreement or a Sublicense
Agreement (or a summary of their terms) to a Third Party licensor with respect
to a given Third Party License, provided that (a) such disclosure is limited to
the extent required by such Third Party License (e.g., financial provisions are
redacted to the extent possible); (b) the identity of the Designated Genes, the
Research Plan and information about the intellectual property licensed under
this Agreement or a Sublicense Agreement (other than the intellectual property
licensed under such Third Party License) are not disclosed; and (c) such Third
Party licensor is subject to obligations of confidentiality and limitations on
use to substantially the same extent as required by the provisions of this
Article 6. Prior to making any disclosure under this Section 6.4, Sangamo shall
notify Genentech of its intent to make such disclosure and provide to Genentech
a copy of any summary of terms provided to such Third Party licensor.
     6.5 Termination of Prior Agreement. As of the Effective Date, this
Agreement supersedes and terminates the Mutual Confidentiality Agreement between
the Parties, effective as of January 20, 2005 (“Confidentiality Agreement”). All
“INFORMATION” (as defined in the

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Confidentiality Agreement) exchanged between the Parties there under shall be
deemed Confidential Information hereunder and shall be subject to the provisions
of this Article 6.
     6.6 Continuing Obligation. The provisions of this Article 6 shall continue
for a period of fifteen (15) years after termination or expiration of this
Agreement.
Article 7. Genentech Materials and Related Information
     7.1 Ownership. Genentech shall own the Genentech Materials and all tangible
materials included in the Sangamo Deliverables. The ownership of any tangible
materials (including, without limitation, ZFN Modified Cell Lines derived from
the Genentech CHO Cell Line) is with respect to such tangible materials and does
not imply ownership of intellectual property pertaining to or embodied in such
tangible materials, which shall be in accordance with the other provisions of
this Agreement.
     7.2 Use. Sangamo agrees that it shall use the Genentech Materials solely
for the purpose of performing activities under the Research Plan and it shall
not transfer any Genentech Materials to any Third Party without Genentech’s
prior written consent. Genentech hereby consents that Sangamo may transfer the
Genentech CHO DNA Extract to a Third Party solely to enable such Third Party to
perform [***] on Sangamo’s behalf, for the benefit of Genentech. Sangamo agrees
that any Third Party for which Genentech consents to the transfer of Genentech
Materials shall be contractually bound in writing (a) to limitations on the use
of such Genentech Materials at least as restrictive as those set forth in this
Section 7.2; (b) to not further transfer such Genentech Materials; and (c) to
confidentiality and limitation on use obligations at least as restrictive as
those set forth in Article 6 with respect to any information generated or
otherwise acquired by such Third Party as a result of its possession or use of
such Genentech Materials (and any such information shall be included in the
Research Results). Sangamo shall be jointly and severally liable for any misuse
by a Third Party of Genentech Materials received from Sangamo.
     7.3 Return or Destruction. Within thirty (30) days following the end of the
Research Period or the expiration or termination of this Agreement, Sangamo
shall promptly return or destroy, as instructed by Genentech, all (a) Genentech
Materials remaining in Sangamo’s possession or the possession of any Third Party
that received such Genentech Materials from Sangamo hereunder; and (b) Know-How
and other information provided to Sangamo in the Genentech Deliverables (at
beginning of Research Stage 1) and any other information related to the
Genentech Materials provided by Genentech to Sangamo. After such return or
destruction, Sangamo shall provide written certification to Genentech that all
such remaining Genentech Materials and all such information have been returned
or destroyed (as applicable).
Article 8. Term and Termination
     8.1 Term. This Agreement shall be effective as of the Effective Date.
Unless sooner terminated as provided in this Article 8, this Agreement shall
remain in effect until Sangamo is no longer entitled (in fact or potentially) to
receive Milestone Payments from Genentech pursuant to Section 3.6.
 

***   CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

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     8.2 Termination by Either Party for Cause. Either Party may terminate this
Agreement for a material breach by the other Party of the provisions hereof. Any
such termination shall be effective sixty (60) days after written notice to such
other Party specifying such breach if the specified breach is not cured before
the effective date of termination. In addition, Genentech may terminate the
Research (but not the entire Agreement) if the specified breach is not cured
before the effective date of termination. Sangamo agrees that any breach of this
Agreement that materially adversely affects the Genentech License (including,
without limitation, a material breach of Section 5.4(b)) is a material breach of
this Agreement.
     8.3 Termination of Research by Genentech for Cause. Genentech may terminate
the Research (but not the entire Agreement) effective immediately, by providing
written notice to Sangamo at any time, if Sangamo has not provided to Genentech
all of the Sangamo Deliverables due under Research Stage 2 (other than the
training of Genentech’s researcher(s)) within twelve (12) months of the
Effective Date. If Genentech terminates the Research pursuant to this
Section 8.3, no further payments under Sections 3.4 or 3.5 shall be due.
     8.4 Termination by Genentech for Convenience. Genentech may terminate this
Agreement for its own convenience, effective on or after three (3) months
following the Effective Date, by providing thirty (30) days written notice to
Sangamo.
     8.5 Licenses.
          (a) Research Results License. Sangamo agrees to grant and hereby
grants Genentech a non-exclusive, worldwide, sublicensable, fully-paid,
perpetual, irrevocable license, under Research Results Patents, to make, use,
sell, offer for sale and import Other Modified Cell Lines solely for the purpose
of making, using, offering for sale, selling and importing Licensed Products;
provided, however, the foregoing license shall only be effective upon the
expiration or termination of this Agreement for any reason. For purposes of this
Section 8.5(a), a patent shall be considered a “Research Results Patent” only if
Sangamo reproduced any of the Research Results in the specification of a patent
application for such patent or if Sangamo submitted any of the Research Results
to the applicable patent authority in connection with the filing or prosecution
of patent applications for such patent.
          (b) Retention of Rights. In the event Sangamo seeks or is
involuntarily placed under the protection of the “Bankruptcy Code” (i.e., Title
11, U.S. Code), and the trustee in bankruptcy, or Sangamo as a
debtor-in-possession, rejects this Agreement, Genentech hereby elects, pursuant
to Section 365(n) of the Bankruptcy Code, to retain all licenses of rights to
“intellectual property” (as defined under the Bankruptcy Code) granted to it
under this Agreement to the extent permitted by law.
          (c) Survival of Sublicenses. Following the Research Period, upon the
termination of this Agreement by either Party under Section 8.2, a given
existing sublicense granted to a sublicensee under the Genentech License, if
any, shall continue, provided that such sublicensee is in good standing at the
time of such termination and such sublicensee agrees in writing to pay directly
to Sangamo (i) in the case of a Collaboration Partner, all Milestone Payments
due from such Collaboration Partner related to such sublicense; and (ii) in all
cases,

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any annual technology access fees due under Section 3.3, if such fees have not
previously been paid by Genentech or another sublicensee.
          (d) Fully-Paid Genentech License. In the event that Genentech
terminates this Agreement under Section 8.2 due to a Materially Adverse Breach
(as defined in the next sentence), the Genentech License (including any
sublicenses granted thereunder) with respect to all Licensed Products shall be
fully-paid and irrevocable. For purposes of this Section 8.5(d), a “Materially
Adverse Breach” means (i) a material breach by Sangamo of Sections [***]; or
(ii) a breach of Sangamo’s representations and warranties under Section [***],
in each case of (i) or (ii), that results or is reasonably likely to result in a
material adverse effect upon the Genentech License (unless Genentech is fully
compensated for such material adverse effect by Sangamo, under Section 9.1(c) or
otherwise). In the event that Genentech is awarded economic damages pursuant to
an action against Sangamo for a material breach of this Agreement that is a
Materially Adverse Breach, Genentech shall be required to either (A) accept such
damage award, in which event the milestones due under in this Agreement shall be
reinstated, the Genentech License shall cease to be fully-paid and irrevocable,
and Genentech shall pay Sangamo any past due milestones or (B) forgo such damage
award, in which event the Genentech License shall continue to be fully-paid and
irrevocable. Genentech shall choose between the remedies described in clauses
(A) and (B) of the preceding sentence, and provide Sangamo with written notice
of such choice along with any payments that may be due under clause (A), no
later than one hundred and eighty (180) days after such damages are awarded.
     8.6 Effects of Termination. Except as otherwise expressly provided herein,
termination of this Agreement shall not affect the rights and obligations of the
Parties that accrued prior to the effective date of such termination.
     8.7 Survival. The provisions of Sections 4.2 and 4.4; Article 6; Article 7;
Sections 8.5, 8.6 and 8.7; Article 9; Article 10 (except for Section 10.4);
Article 11; Section 12.2; Article 13 and Article 14 (as applicable) shall
survive any termination or expiration of this Agreement.
Article 9. Indemnification; Limitation on Liability
     9.1 Indemnification.
          (a) Claims Defined. For purposes of this Section 9.1, the term
“Claims” means any and all liabilities, obligations, penalties, claims,
judgments, demands, actions, disbursements of any kind and nature, suits,
losses, damages, costs and expenses (including, without limitation, reasonable
attorney’s fees).
          (b) Indemnification by Genentech. Genentech shall indemnify, defend
and hold harmless Sangamo and its directors, officers and employees, and the
Select Sangamo Licensors, from and against any Third Party Claims (i) arising
from any injury or damage arising out of or in connection with the negligence or
willful misconduct of Genentech or its consultants, subcontractors or agents
related to the performance of this Agreement or the breach by Genentech of its
obligations under this Agreement, except to the extent that such Claims arise
from the negligence or willful misconduct of the foregoing indemnified parties
or the breach by
 

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Sangamo of its obligations under this Agreement; (ii) [***]; (iii) arising from
the manufacture, use, handling, storage, importation, exportation, or other
transportation of Modified Cell Line(s) by Genentech or its sublicensees,
subcontractors or agents, except to the extent that such Claims arise from
Sangamo’s breach of its representations and warranties under Article 12;
(iv) arising from the manufacture, use, handling, storage, importation,
exportation, offer for sale, sale, or other disposition of Licensed Product(s)
by Genentech or its sublicensees, subcontractors or agents, except to the extent
that such Claims arise from Sangamo’s breach of its representations and
warranties under Article 12; or (v) arising from the use by a Third Party of any
Licensed Product sold or otherwise provided by Genentech or its sublicensees,
subcontractors or agents.
          (c) Indemnification by Sangamo. Sangamo shall indemnify, defend and
hold harmless Genentech and its directors, officers and employees from and
against any Third Party Claims (i) arising from any injury or damage arising out
of or in connection with the negligence or willful misconduct of Sangamo or its
consultants, subcontractors or agents related to the performance of this
Agreement or the breach by Sangamo of its obligations under this Agreement,
except to the extent that such Claims arise from the negligence or willful
misconduct of the foregoing indemnified parties or the breach by Genentech of
its obligations under this Agreement; (ii) that the technology and materials
(other than the Genentech Deliverables) used by Sangamo in performing activities
under the Research Plan or the use of such technology and materials (other than
the Genentech Deliverables) in performing such activities infringes or
misappropriates the intellectual property rights of such Third Party; or
(iii) that ZFN Reagents or their use by Genentech or its sublicensees,
subcontractors or agents under the Genentech License infringes or
misappropriates the intellectual property rights of such Third Party, except to
the extent that such infringement or misappropriation is due to the identity,
sequence or other characteristics of either Designated Gene or is due to an
Improvement that is incorporated in or used to make an Improved ZFN Reagent.
          (d) Indemnification Procedures. In the event that a Party seeks
indemnification under this Section 9.1, such Party shall (i) promptly notify the
other Party as soon as it becomes aware of a claim or suit for which
indemnification may be sought pursuant hereto, (ii) cooperate as reasonably
requested (at the expense of the indemnifying Party) with the indemnifying Party
in the defense of such claim or suit; and (iii) permit the indemnifying Party to
control the defense of such claim or suit with counsel mutually satisfactory to
the Parties. In no event, however, may the indemnifying Party compromise or
settle any claim or suit in a manner that admits fault or negligence on the part
of the indemnified Party without the prior written consent of the indemnified
Party. The indemnifying Party shall have no liability under this Section 9.1
with respect to claims or suits settled or compromised without its prior written
consent, which consent shall not be unreasonably withheld.
     9.2 Limitation on Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
LOSS OF PROFITS, LOSS OF GOODWILL OR ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT
DAMAGES OF ANY KIND, EXCEPT TO THE EXTENT THAT SUCH DAMAGES (A) ARE AN ELEMENT
OF THE DAMAGES AWARDED BY A COURT OF COMPETENT JURISDICTION TO A THIRD PARTY IN
CONNECTION WITH A CLAIM WITH RESPECT TO WHICH A PARTY IS ENTITLED TO
INDEMNIFICATION PURSUANT TO SECTION 9.1; OR (B) ARISE FROM THE MISUSE OR
 

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MISAPPROPRIATION OF THE OTHER PARTY’S CONFIDENTIAL INFORMATION OR THE GENENTECH
MATERIALS.
Article 10. Dispute Resolution
     10.1 Internal Resolution. Except as otherwise expressly provided in this
Agreement, in the event of any controversy, claim or other dispute arising out
of or relating to any provision of this Agreement or the interpretation,
enforceability, performance, breach, termination or validity hereof, such
dispute shall be first referred to the Executives of each Party for resolution,
prior to proceeding under the following provisions of this Article 10. A dispute
shall be referred to the Executives upon one Party providing the other Party
with written notice that such dispute exists, and the Executives shall attempt
to resolve such dispute through good faith discussions. In the event that the
Executives cannot resolve such dispute within thirty (30) days of such other
Party’s receipt of such written notice, either Party may initiate the dispute
resolution procedures set forth in Section 10.2.
     10.2 Arbitration. Except as otherwise expressly provided in this Agreement,
the Parties agree that any dispute not resolved internally by the Parties
pursuant to Section 10.1, shall be resolved through binding arbitration in
accordance with the then prevailing Commercial Arbitration Rules of the American
Arbitration Association, except as modified in this Agreement, applying the
substantive law specified in Section 14.1. A Party may initiate an arbitration
by written notice to the other Party of its intention to arbitrate, and such
demand notice shall specify in reasonable detail the nature of the dispute. Each
Party shall select one (1) arbitrator, and the two (2) arbitrators so selected
shall choose a third arbitrator, and all three (3) shall serve as neutrals. If a
Party fails to nominate its arbitrator, or if the Parties’ arbitrators cannot
agree on the third arbitrator, the necessary appointments shall be made in
accordance with the then prevailing Commercial Arbitration Rules. Within three
(3) months of the conclusion of an arbitration proceeding, the arbitration
decision shall be rendered in writing and shall specify the basis on which the
decision was made. The award of the arbitration tribunal shall be final and
judgment upon such an award may be entered in any competent court or application
may be made to any competent court for judicial acceptance of such an award and
order of enforcement. Unless otherwise agreed upon by the Parties, the
arbitration proceedings shall be conducted in San Francisco, California. The
Parties agree that they shall share equally the cost of the arbitration filing
and hearing fees, and the cost of the three (3) arbitrators. Each Party shall
bear its own attorneys’ fees and associated costs and expenses.
     10.3 Patent Disputes. Notwithstanding the other provisions of this
Article 10, any dispute that involves the validity, infringement or claim
interpretation of a patent (a) that is issued in the United States shall be
subject to actions before the United States Patent and Trademark Office and/or
submitted exclusively to a federal court having jurisdiction; and (b) that is
issued in any other country shall be brought before an appropriate regulatory or
administrative body or court in that country, and the Parties hereby consent to
the jurisdiction and venue of such courts and bodies. For the sake of clarity,
such patent disputes shall not be subject to the provisions of Section 10.2.

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     10.4 Continued Performance. Provided the Agreement has not terminated, the
Parties agree to continue performing under the Agreement in accordance with its
provisions, pending the final resolution of any dispute.
Article 11. Public Disclosures; Use of Names
     11.1 Publicity and Other Public Disclosures.
               (a) Generally. Subject to the other provisions of this
Section 11.1, neither Party shall issue press releases or make any other public
disclosures relating to this Agreement for any purpose whatsoever without the
other Party’s prior written approval. Each Party agrees that the other Party
shall have no less than five (5) business days to review and provide comments
regarding any such proposed public disclosure (even if such disclosure is
required by law, rule or regulation), unless a shorter review time is agreed to
by both Parties. If the disclosing Party requests a shorter review time, the
other Party shall agree to such requested shorter review time if (i) such
shorter review time is necessitated by an applicable disclosure law, rule or
regulation; and (ii) the disclosing Party made such request and provided such
proposed public disclosure for review as soon as reasonably practicable after
the disclosing Party knew of the event necessitating such shorter review time.
The provisions of this Section 11.1 are in addition to the provisions of
Article 6.
               (b) Approved Public Disclosures. Genentech hereby approves of the
following public disclosures by Sangamo: (i) issuing the press release set forth
in Exhibit D, following the signing of this Agreement by both Parties;
(ii) including Genentech on a list of Sangamo’s partners or licensees/licensors,
without identifying any subject matter of this Agreement; and (iii) including
the text set forth in Exhibit D in Sangamo’s Form 8-K filings. Sangamo hereby
approves of the following public disclosures by Genentech (i) including Sangamo
on a list of Genentech’s partners or licensees/licensors and (ii) disclosing
that Sangamo is providing technology to Genentech for the improvement of protein
production.
               (c) Public Disclosures Required by Law. In the event that one
Party reasonably concludes that a public disclosure relating to this Agreement
is required by law, rule or regulation (including, without limitation, the
disclosure requirements of the Securities and Exchange Commission or the
securities exchange or other stock market on which such Party’s securities are
traded (for purposes of this Section 11.1, collectively, an “Exchange”)) and the
other Party would prefer not to make such disclosure, the Party seeking such
disclosure shall either (i) limit such disclosure to address the concerns of the
other Party or (ii) provide a written explanation from counsel stating why such
limited disclosure is not sufficient to comply with the applicable law, rule or
regulation. Provided that the Party seeking such disclosure complies with the
preceding sentence, such Party shall be permitted to make such disclosure. Each
Party agrees that it shall obtain its own legal advice with regard to its
compliance with securities laws, rules and regulations, and will not rely on any
statements made by the other Party relating to such securities laws, rules and
regulations.
               (d) Filing of Agreement. With respect to complying with the
disclosure requirements of an Exchange, in connection with any required filing
of this Agreement with such Exchange, the filing Party shall, at the request of
the other Party, seek confidential treatment of

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portions of this Agreement from such Exchange and shall provide the other Party
with the opportunity, for at least fifteen (15) days, to review and comment on
any such proposed filing, and shall thereafter provide reasonable advance notice
and opportunity for comment on any subsequent changes to such filing. Sangamo
shall, whether or not requested by Genentech, redact and request confidential
treatment for (i) all references to the identity of the Designated Genes;
(ii) the sequences in Exhibit B; and (iii) any financial terms, other than those
disclosed in accordance with Section 11.1(c).
     11.2 Use of Names. Except as expressly provided herein, no right, express
or implied, is granted by the Agreement to use in any manner the name of
“Sangamo,” “Genentech” or any other trade name or trademark of the other Party
in connection with the performance of this Agreement.
Article 12. Warranties
     12.1 Mutual Warranties. Each Party represents and warrants to the other
Party that: (a) it has full corporate authority to execute this Agreement and to
perform its obligations under this Agreement; (b) in performing hereunder it
will not violate any other agreement to which it is a party or subject; (c) in
performing hereunder it will not violate any federal, state or local laws,
requirements or regulations; and (d) it shall provide personnel, as necessary,
to perform its obligations hereunder.
     12.2 Sangamo Warranties. Sangamo represents and warrants to Genentech that:
               (a) as of the Effective Date, all Patents owned by Sangamo that
have one or more claims that encompass (i) ZFN Reagents and/or ZFN Modified Cell
Lines and/or (ii) the making and/or use of ZFN Reagents and/or ZFN Modified Cell
Lines are, in all cases, Controlled by Sangamo;
               (b) as of the Effective Date, all of the Identified Patents
(other than those Identified Patents with a status of “Revoked” on Exhibit C)
are Controlled by Sangamo, and Sangamo will not, during the term of this
Agreement, grant (or purport to grant) any rights or take any other actions that
are inconsistent with the Genentech License;
               (c) all Sangamo employees and any Third Parties working on its
behalf that perform activities under the Research Plan are obligated (or will be
obligated, prior to commencing such activities) to assign any Inventions to
Sangamo and to cooperate with Sangamo in connection with obtaining patent
protection therefor;
               (d) Genentech has the right to grant sublicenses under the
Genentech License to one or more Third Parties, subject to Sections 5.1(b),
5.1(c) and 5.1(d); and
               (e) with respect to rights sublicensed to Genentech by Sangamo
under each of the Caltech Agreement, the MIT Agreement and the Utah Agreement,
Genentech’s sublicense to such rights (including any further sublicenses
thereunder) shall survive (as a direct license from the applicable Third Party
licensor or otherwise) in the event that the applicable Third Party

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licensor terminates Sangamo’s license to such rights for any reason, subject to
any provisions related to such direct license that are set forth in Exhibit E.
     12.3 Disclaimers. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THE AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND AND EXPRESSLY
DISCLAIMS ALL IMPLIED OR STATUTORY WARRANTIES INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.
Article 13. Notices
     Except as otherwise expressly provided in the Agreement, any notice
required under this Agreement shall be in writing and shall specifically refer
to this Agreement. Notices shall be sent via one of the following means and will
be effective (a) on the date of delivery, if delivered in person; (b) on the
date of receipt, if sent by a facsimile (with delivery confirmed); or (c) on the
date of receipt, if sent by private express courier or by first class certified
mail, return receipt requested (or its equivalent). Any notice sent via
facsimile shall be followed by a copy of such notice by private express courier
or by first class mail. Notices shall be sent to the other Party at the
addresses set forth below. Either Party may change its addresses for purposes of
this Article 13 by sending written notice to the other Party.
          To Sangamo:
Sangamo BioSciences, Inc.
Point Richmond Tech Center II
501 Canal Blvd, Suite A100
Richmond, CA 94804
Attn: Chief Executive Officer
Telephone: (510) 970-6000
Facsimile: (510) 236-8951
          To Genentech:
Genentech, Inc.
1 DNA Way
South San Francisco, CA 94080
Attn: Corporate Secretary
Telephone: (650) 225-1000
Facsimile: (650) 467-9146
          with a required copy to:
Genentech, Inc.
1 DNA Way
South San Francisco, CA 94080
Attn: VP, Alliance Management and
Pipeline Strategy Support
Telephone: (650) 225-1000
Facsimile: (650) 467-3294

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Article 14. General Provisions
     14.1 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California and the United States without regard to the
conflict of laws provisions thereof.
     14.2 Assignment. During the Research Period, Sangamo shall not assign or
delegate any of its rights or obligations under this Agreement without the prior
written consent of Genentech. After the Research Period, Sangamo may, without
Genentech’s consent, assign this Agreement and its rights and obligations
hereunder to (a) any successor in interest by way of merger, acquisition or sale
of all or substantially all of its assets to which this Agreement relates; or
(b) an Affiliate of Sangamo. At any time, Genentech may, without Sangamo’s
consent, assign this Agreement and its rights and obligations hereunder to
(a) any successor in interest by way of merger, acquisition or sale of all or
substantially all of its assets to which this Agreement relates; or (b) an
Affiliate of Genentech. Any attempt to assign or delegate any portion of this
Agreement in violation of this Section 14.2 shall be void. Subject to the
foregoing provisions of this Section 14.2, this Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective successors
and assigns.
     14.3 Entire Agreement. This Agreement, including all Exhibits attached
hereto, which are hereby incorporated by reference, contains the entire
understanding between the Parties hereto with respect to the subject matter
hereof and supersedes and terminates all prior agreements, understandings and
arrangements between the Parties (including any prior representations or
warranties made by either Party), whether written or oral with respect to such
subject matter including, without limitation, the Confidentiality Agreement.
     14.4 Amendment; Waiver. Except as otherwise expressly provided herein, no
alteration of or modification to this Agreement shall be effective unless made
in writing and executed by an authorized representative of each Party. No course
of dealing or failure of either Party to strictly enforce any term, right or
condition of this Agreement in any instance shall be construed as a general
waiver or relinquishment of such term, right or condition. The observance of any
provision of this Agreement may be waived (either generally or any given
instance and either retroactively or prospectively) only with the written
consent of the Party granting such waiver.
     14.5 Severability. The Parties do not intend to violate any rule, law or
regulation. If any of the provisions of this Agreement are held to be void or
unenforceable, then such void or unenforceable provisions shall be replaced by
valid and enforceable provisions that will achieve as far as possible the
economic business intentions of the Parties.
     14.6 Construction. The Parties mutually acknowledge that they and their
attorneys have participated in the negotiation and preparation of this
Agreement. Ambiguities, if any, in this Agreement shall not be construed against
any Party, irrespective of which Party may be deemed to have drafted the
Agreement or authorized the ambiguous provision.

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     14.7 Captions. Titles, headings and other captions are for convenience only
and are not to be used for interpreting this Agreement.
     14.8 Relationship of the Parties. The Parties hereto are independent
contractors and nothing contained in this Agreement shall be deemed or construed
to create a partnership, joint venture, employment, franchise, agency or
fiduciary relationship between the Parties.
     14.9 Force Majeure. Failure of either Party to perform under this Agreement
shall not subject such Party to any liability to the other if such failure is
caused by acts of God, acts of terrorism, earthquake, fire, explosion, flood,
drought, war, riot, sabotage, embargo, compliance with any order or regulation
of any government entity, or by any cause beyond the reasonable control of the
affected Party, whether or not foreseeable, provided that written notice of such
event is promptly given to the other Party.
     14.10 Counterparts; Facsimiles. This Agreement may be executed in two
(2) or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument. For purposes hereof,
a facsimile copy of this Agreement, including the signature pages hereto, will
be deemed to be an original. Notwithstanding the foregoing, the Parties shall
deliver original execution copies of this Agreement to one another as soon as
practicable following execution thereof.
     In agreement with the foregoing, the Parties have caused this Agreement to
be signed by their respective duly authorized representatives as set forth
below.

                              Genentech, Inc.       Sangamo BioSciences, Inc.  
 
 
                           
By:
  /s/ Susan Desmond - Hellmann       By:   /s/ Edward O. Lanphier II            
           
 
  Name:   Susan Desmond - Hellmann           Name:   Edward O. Lanphier II    
 
  Title:   President of Product Development           Title:   President and
Chief Executive Officer    
 
     
 
             
 
   

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Exhibit A
Research Plan
[***]
 

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A-1

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[***]
 

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A-2

--------------------------------------------------------------------------------

 

[***]
 

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A-3

--------------------------------------------------------------------------------

 

[***]
 

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A-4

--------------------------------------------------------------------------------

 

[***]
 

***   CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

A-5

--------------------------------------------------------------------------------

 

[***]
 

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A-6

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[***]
 

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A-7

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Exhibit B
Designated Gene Sequences
[***]
 

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B-1

--------------------------------------------------------------------------------

 

[***]
 

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B-2

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[***]
 

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B-3

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[***]
 

***   CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

B-4

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Exhibit C
Identified Patents
(Sangamo Owned and In-Licensed)
SANGAMO OWNED

              Serial No.   Filing date   Title   Status
AU 32291/95
  Aug. 17, 1995   Improvements in binding proteins for recognition of DNA   AU
Pat. No. 698152 (2/4/99)
 
           
AU 10037/99
  Jan. 6, 1999   Improvements in binding proteins for recognition of DNA   AU
Pat. No. 726759 (3/8/01)
 
           
CA 2,196,419
  Aug. 17, 1995   Improvements in binding proteins for recognition of DNA  
Pending
 
           
EP 95928576.8
  Aug. 17, 1995   Improvements in binding proteins for recognition of DNA  
Pending
 
           
JP 507857/1996
  Aug. 17, 1995   Improvements in binding proteins for recognition of DNA  
Pending
 
           
US 09/139,762
  Aug. 25, 1998   Binding proteins for recognition of DNA   US Pat. No.
6,013,453 (1/11/00)
 
           
US 10/033,129
  Dec. 27, 2001   Relating to Binding proteins for recognition of DNA   US Pat.
No. RE 39,229 (8/8/06)
 
           
US 10/309,578
  Dec. 3, 2002   Design of binding proteins for recognition of DNA   Pending
 
           
US 10/397,930
  Mar. 25, 2003   Relating to Binding proteins for recognition of DNA   Pending
 
           
US 10/400,017
  Mar. 25, 2003   Relating to Binding proteins for recognition of DNA   Pending
 
           
AU 2001 226935
  Jan. 19, 2001   Nucleic Acid Binding Polypeptides (2-finger modules)   Allowed

C-1

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              Serial No.   Filing date   Title   Status
 
           
CA 2,398,155
  Jan. 19, 2001   Nucleic Acid Binding Polypeptides (2-finger modules)   Pending
 
           
EP 01 901 276.4
  Jan. 19, 2001   Nucleic Acid Binding Polypeptides (2-finger modules)   Allowed
 
           
US10/198,677
  Jan. 19, 2001   Nucleic Acid Binding Polypeptides (2-finger modules)   Pending
 
           
US 10/222,614
  Aug. 15, 2002   Cells comprising zinc finger nucleases   Allowed
 
           
US 10/395,816
  Mar. 20, 2003   Methods and compositions for using zinc finger endonucleases
to enhance homologous recombination   Pending
 
           
AU 2003 218382
  Mar. 20, 2003   Methods and compositions for using zinc finger endonucleases
to enhance homologous recombination   Pending
 
           
CA 2,479,858
  Mar. 20, 2003   Methods and compositions for using zinc finger endonucleases
to enhance homologous recombination   Pending
 
           
EP 03 714 379.9
  Mar. 20, 2003   Methods and compositions for using zinc finger endonucleases
to enhance homologous recombination   Pending
 
           
US 10/912,932
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
US 11/304,981
  Dec. 15, 2005   Targeted deletion of cellular DNA Sequences   Pending

C-2

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              Serial No.   Filing date   Title   Status
 
           
AU 2004 263865
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
CA 2,534,296
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
EP 04 780 272.3
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
IL 173460
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
JP 2006-523239
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
KR 2006-7002703
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
SG 2006 00748-8
  Aug. 6, 2004   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
AU 2005 220148
  Feb. 3, 2005   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
CA 2,534,296
  Feb. 3, 2005   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
EP 05 756 438.7
  Feb. 3, 2005   Methods and compositions for targeted cleavage and
recombination   Pending
 
           
[***]
  [***]   [***]   [***]
 
           
US 11/221,683
  Sept. 8, 2005   Compositions and methods for protein production   Pending

 

***   CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

C-3

--------------------------------------------------------------------------------

 

              Serial No.   Filing date   Title   Status
 
           
PCT US05/32157
  Sept. 8, 2005   Compositions and methods for protein production   WO 06/033859
(3/30/06)
 
           
US 11/493,423
  July 26, 2006   Targeted integration and expression of exogenous nucleic acid
sequences   Pending
 
           
PCT US06/29027
  July 26, 2006   Targeted integration and expression of exogenous nucleic acid
sequences   Pending
 
           
[***]
  [***]   [***]   [***]

 

***   CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

C-4

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IN-LICENSED*

     
Caltech =
  in-licensed under the Caltech Agreement
JHU =
  in-licensed under the JHU Agreement
MIT =
  in-licensed under the MIT Agreement
Scripps =
  in-licensed under the Scripps Agreement
Utah =
  in-licensed under the Utah Agreement

              Serial No.             (*Third Party License)   Filing date  
Title   Status
US 07/862,831
(JHU)
  Apr. 3, 1992   Functional domains in FokI restriction endonuclease   US Pat.
No. 5,356,802 (10/18/94)
 
           
US 08/126,564
(JHU)
  Sept. 27, 1993   Functional domains in FokI restriction endonuclease   US Pat.
No. 5,436,150 (7/25/95)
 
           
US 08/346,293
(JHU)
  Nov. 23, 1994   Insertion & Deletion Mutants of FokI restriction endonuclease
  US Pat. No. 5,487,994 (1/30/96)
 
           
CA 2,154,581
(JHU)
  Feb. 10, 1994   Functional domains in FokI restriction endonuclease   Pending
 
           
EP 94 909 526.9 (JHU)
  Feb. 10, 1994   Functional domains in FokI restriction endonuclease   Europ.
Pat. No. 0 682 699 (5/7/03) Revoked
 
           
CH
(JHU)
      Functional domains in FokI restriction endonuclease   Europ. Pat. No. 0
682 699 (5/7/03) Revoked
 
           
DE
(JHU)
      Functional domains in FokI restriction endonuclease   Europ. Pat. No. 0
682 699 (5/7/03) Revoked
 
           
FR
(JHU)
      Functional domains in FokI restriction endonuclease   Europ. Pat. No. 0
682 699 (5/7/03) Revoked
 
           
GB
(JHU)
      Functional domains in FokI restriction endonuclease   Europ. Pat. No. 0
682 699 (5/7/03) Revoked
 
           
IE
(JHU)
      Functional domains in FokI restriction endonuclease   Europ. Pat. No. 0
682 699 (5/7/03) Revoked
 
           
EP 03 010009.3 (JHU)
  Feb. 10, 1994   Functional domains in FokI restriction endonuclease   Pending

C-5

--------------------------------------------------------------------------------

 

              Serial No.             (*Third Party License)   Filing date  
Title   Status
 
           
JP 7-510290
(JHU)
  Aug.23, 1994   Functional domains in FokI restriction endonuclease   Pending
 
           
JP 2006-143294
(JHU)
  Aug. 23, 1994   Functional domains in FokI restriction endonuclease   Pending
 
           
US 08/575,361
(JHU)
  Dec. 20, 1995   General method to clone hybrid restriction endonucleases using
lig gene   US Pat. No. 5,792,640 (8/11/98) Reexamination Requested
 
           
US 08/647,449
(JHU)
  May 7, 1996   Methods for inactivating target DNA and for detecting
conformational change in a nucleic acid   US Patent No. 5,916,794 (Jun. 29,
1999)
 
           
US 09/281,792
(JHU)
  Mar. 31, 1999   Methods for inactivating target DNA and for detecting
conformational change in a nucleic acid   US Patent No. 6,265,196 (Jul. 24,
2001) Reexamination Requested
 
           
US 08/676,318
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   U.S.
Patent No. 6,242,568 (6/5/01)
 
           
US 08/863,813
(Scripps)
  May 27, 1997   Zinc finger protein derivatives and methods therefor   U.S.
Patent No. 6,140,466 (10/31/00)
 
           
US 09/500,700
(Scripps)
  Feb. 9, 2000   Zinc finger protein derivatives and methods therefor   U.S.
Patent No. 6,790,941 (9/14//04)
 
           
AU 16865/95
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   AU
Patent No. 704601 (4/29/99)
 
           
CA 2,181,548
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   Pending
 
           
EP 95 908 614.1 (Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   Europ.
Pat. No. 0 770 129 (11/23/05)
 
           
FR
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   Europ.
Pat. No. 0 770 129 (11/23/05)

C-6

--------------------------------------------------------------------------------

 

              Serial No.             (*Third Party License)   Filing date  
Title   Status
 
           
GB
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   Europ.
Pat. No. 0 770 129 (11/23/05)
 
           
FI 962879
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   Pending
 
           
JP 07-519231
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   Pending
 
           
NO 1996 2991
(Scripps)
  Jan. 18, 1995   Zinc finger protein derivatives and methods therefor   Pending
 
           
AU 2002 300619
(Scripps)
  May 27, 1998   Zinc finger protein derivatives and methods therefor   Pending
 
           
CA 2,291,861
(Scripps)
  May 27, 1998   Zinc finger protein derivatives and methods therefor   Pending
 
           
EP 98 926 088.0 (Scripps)
  May 27, 1998   Zinc finger protein derivatives and methods therefor   Pending
 
           
JP 11-500870
(Scripps)
  May 27, 1998   Zinc finger protein derivatives and methods therefor   Pending
 
           
US 09/260,629
(MIT)
  Mar. 1, 1999   Poly-Zinc Finger Proteins with improved linkers   U.S. Pat. No.
6,479,626 (Nov. 12, 2002)
 
           
US 10/146,221
(MIT)
  May 13, 2002   Poly-Zinc Finger Proteins with improved linkers   U.S. Pat. No.
6,903,185 (June 7, 2005)
 
           
US 11/110,594
(MIT)
  April 20,2005   Poly-Zinc Finger Proteins with improved linkers   US Patent No
7,153,949 (Dec. 26, 2006)
 
           
US 11/639,363
(MIT)
  Dec. 14, 2006   Poly-Zinc Finger Proteins with improved linkers   Pending
 
           
AU 28849/99
(MIT)
  Mar. 1, 1999   Poly-Zinc Finger Proteins with improved linkers   AU Pat.
No. 746454 (August 15, 2002)
 
           
CA 2,321,938
(MIT)
  Mar. 1, 1999   Poly-Zinc Finger Proteins with improved linkers   Pending

C-7

--------------------------------------------------------------------------------

 

              Serial No.             (*Third Party License)   Filing date  
Title   Status
 
           
EP 99909701.7 (MIT)
  Mar. 1, 1999   Poly-Zinc Finger Proteins with improved linkers   Pending
 
           
JP 2000-534663
(MIT)
  Mar. 1, 1999   Poly-Zinc Finger Proteins with improved linkers   Pending
 
           
AU 2003 25128
(Utah)
  Jan. 22, 2003   Targeted chromosomal mutagenesis using zinc finger nucleases  
Pending
 
           
CA 2,474,486
(Utah)
  Jan. 22, 2003   Targeted chromosomal mutagenesis using zinc finger nucleases  
Pending
 
           
EP 03 746 527.5 (Utah)
  Jan. 22, 2003   Targeted chromosomal mutagenesis using zinc finger nucleases  
Allowed
 
           
US 10/502,565
(Utah)
  Jan. 22, 2003   Targeted chromosomal mutagenesis using zinc finger nucleases  
Pending
 
           
US 10/656,531
(Caltech)
  Sept. 5, 2003   Use of chimeric nucleases to stimulate gene targeting  
Pending
 
           
AU 2003 298574
(Caltech)
  Sept. 5, 2003   Use of chimeric nucleases to stimulate gene targeting  
Pending
 
           
CA 2,497,913
(Caltech)
  Sept. 5, 2003   Use of chimeric nucleases to stimulate gene targeting  
Pending
 
           
EP 03 796 324.6 (Caltech)
  Sept. 5, 2003   Use of chimeric nucleases to stimulate gene targeting  
Pending
 
           
JP 2005-501601
(Caltech)
  Sept. 5, 2003   Use of chimeric nucleases to stimulate gene targeting  
Pending

C-8

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Exhibit D
Press Release and Form 8-K Text

D-1

--------------------------------------------------------------------------------

 

Exhibit E
Certain Agreements Relating to Third Party Licenses
     Sangamo hereby notifies Genentech that (except as otherwise noted) a full
and complete copy of each of the provisions explicitly referenced below in this
Exhibit E is set forth in Exhibit F:
     1. Caltech Agreement. Genentech acknowledges and agrees that Genentech does
not have the right to grant sublicenses under the intellectual property licensed
to Sangamo pursuant to the Caltech Agreement. The Parties acknowledge and agree
that, as of the date of any termination of the Caltech Agreement (a) the
California Institute of Technology (“Caltech”) shall be a third party
beneficiary of this Agreement as of the date of such termination and thereafter;
(b) Sangamo shall remain responsible for all obligations to Genentech (other
than those requiring Sangamo to hold a license under the Caltech Agreement,
unless Caltech (at its discretion) elects to assume such obligations); and
(c) Sangamo shall inform Genentech in writing (with a copy to Caltech) that
Genentech’s obligations pursuant to (a) and (b) are in effect as a result of
such termination.
     2. JHU Agreement. The obligations to Johns Hopkins University of Articles
II, VIII, IX, X, XIII and XV and Paragraphs 5.1 and 5.2 of the JHU Agreement are
binding upon Genentech and any of Genentech’s sublicensees under the rights
licensed to Sangamo under the JHU Agreement as if each were a party to the JHU
Agreement. The Parties agree that, in the event that the JHU Agreement is
amended after the Effective Date, the provisions of this paragraph shall apply
only to the extent required in any such amendment.
     3. MIT Agreement. The provisions of Article 2 (other than Paragraph 2.8),
Article 9 and Article 10 of the MIT Agreement are hereby incorporated by
reference into this Agreement and are binding upon Genentech and any of
Genentech’s sublicensees under the rights licensed to Sangamo under the MIT
Agreement (but in each case solely to the extent such provisions are applicable
to the rights granted in this Agreement) as if each were a party to the MIT
Agreement. Any sublicense granted by Sangamo to Genentech will survive as a
direct license from the Massachusetts Institute of Technology (“MIT”) to
Genentech pursuant to Paragraph 13.6 of the MIT Agreement provided that
Genentech is not then in default under this Agreement and agrees to assume the
rights and obligations of such direct license. If Genentech agrees to assume
such rights and obligations, (a) such direct license shall be subject to the
same non-financial terms and conditions as those in the MIT Agreement and
(b) Genentech (or if there is at such time more than one sublicensee under the
MIT Agreement, Genentech and all other sublicensees severally and jointly) shall
pay any annual fees due pursuant to Paragraph 4.1(b) of the MIT Agreement. If
Genentech becomes a direct licensee of MIT, Genentech shall make any monetary
payment(s) that, had the MIT Agreement not been terminated, Sangamo would have
been required to make under the MIT Agreement as a result of the activities of
Genentech. The Parties agree that, in the event that the MIT Agreement is
amended after the Effective Date, the provisions of this paragraph shall apply
only to the extent required in any such amendment.
     4. Scripps Agreement. Genentech acknowledges and agrees that any sublicense
granted by Sangamo to Genentech shall be subject in all respects to the
restrictions, exceptions, royalty obligations, reports, termination provisions
and other provisions contained in the Scripps Agreement (but not including the
payment of the license fee pursuant to Section 2.2 of the Scripps Agreement).
The Parties agree that, in the event that the Scripps Agreement is amended after
the Effective Date, the provisions of

E-1

--------------------------------------------------------------------------------

 

this paragraph shall apply only to the extent required in any such amendment.
[NOTE: Section 2.2 of the Scripps Agreement is not included in Exhibit F.]
     5. Utah Agreement. [***] of the Utah Agreement as a result of any
sublicenses granted by Genentech under the Genentech License or any further
sublicenses under the Genentech License granted by Genentech’s sublicensees.
[***] prior to the applicable deadlines set forth in Section [***] of the Utah
Agreement. Any sublicense granted by Sangamo to Genentech will survive as a
direct license from the University of Utah (“Utah”) to Genentech pursuant to
Section 13.4 of the Utah Agreement provided that Genentech is in good standing
under this Agreement and agrees to assume the rights and obligations of such
direct license. If Genentech agrees to assume such rights and obligations,
(a) such direct license shall be subject to the same non-financial terms and
conditions as those in the Utah Agreement and (b) Genentech (or if there is at
such time more than one sublicensee under the Utah Agreement, Genentech and all
other sublicensees severally and jointly) shall make any annual maintenance
payments due pursuant to Section 6.2 of the Utah Agreement. If Genentech becomes
a direct licensee of Utah, Genentech shall make any monetary payment(s) that,
had the Utah Agreement not been terminated, Sangamo would have been required to
make under the Utah Agreement as a result of the license to, or activities of,
Genentech, including without limitation the annual sublicensee fees due pursuant
to Section 4.3(ii) of the Utah Agreement with respect to Genentech (which for
clarity shall continue notwithstanding the conversion of Genentech’s sublicense
to a direct license from Utah). The Parties agree that, in the event that the
Utah Agreement is amended after the Effective Date, the provisions of this
paragraph shall apply only to the extent required in any such amendment.
 

***   CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

E-2

--------------------------------------------------------------------------------

 

Exhibit F
Certain Provisions of Third Party Licenses
Copy of Selected Provisions from the JHU Agreement
ARTICLE II — GRANT
     2.1 JOHNS HOPKINS hereby grants to LICENSEE the exclusive worldwide right
and license to make, have made, use, lease and sell the Licensed Products, and
to practice the Licensed Processes, including the right to grant sublicenses,
subject to 35USC200-211 and the regulations promulgated thereunder, to the end
of the term for which the Patent Rights are granted by the applicable
governmental authority, unless sooner terminated as hereinafter provided (the
“Term”). JOHNS HOPKINS reserves the non-transferable royalty-free right to
practice the subject matter of any claim within the Patent Rights for its own
internal purposes. If Dr. Chandrasegaran leaves JOHNS HOPKINS, he shall have the
non-transferable, royalty-free right to practice any claim within the Patent
Rights for his own academic purposes.
     2.2 In order to establish a period of exclusivity for LICENSEE, JOHNS
HOPKINS hereby agrees that it shall not grant any other license to make, have
made, use, lease or sell Licensed Products or to practice Licensed Processes
except for its internal research activities during the period of time (the
“Exclusive Period”) commencing with the Effective Date of this Agreement and
terminating with expiration of the last-to-expire patent licensed under this
Agreement, unless converted earlier to a nonexclusive license pursuant to
Paragraph 4.4 hereof or pursuant to a requirement by the United States
Government in accordance with 35USC200-211.
     2.3 LICENSEE shall have the right to sublicense all or any part of this
license. LICENSEE agrees that any sublicenses granted by it shall provide that
the obligations to JOHNS HOPKINS of Articles II, VIII, IX, X, XIII, XV, and
Paragraphs 5.1 and 5.2 of this Agreement shall be binding upon the sublicensees
as if it were a party to this Agreement. LICENSEE further agrees to attach
copies of these Articles to sublicense agreements.
     2.4 LICENSEE agrees to forward to JOHNS HOPKINS a copy of any and all fully
executed sublicense agreements, and further agrees to forward to JOHNS HOPKINS,
quarterly, pursuant to Paragraph 5.2 a copy of such reports received by LICENSEE
from its sublicensees during the preceding twelve (12) month period under the
sublicenses as shall be pertinent to a royalty accounting under said sublicense
agreements.
     2.5 Subject to Sections 2.6, 2.7 and 15.7 below, the license granted
hereunder shall not be construed to confer any rights upon LICENSEE by
implication, estoppel or otherwise as to any technology not specifically set
forth in Appendix A, Appendix B, Appendix C, and Appendix D hereof.
     2.6 JOHNS HOPKINS hereby also grants to LICENSEE a right of first
negotiation at then commercially reasonable terms, to obtain an exclusive
license to any Inventions, as previously defined,

F-1

--------------------------------------------------------------------------------

 

developed during the term of this Agreement and any extension thereof and
pursuant to any Research Agreement between the parties hereto (Appendix D).
JOHNS HOPKINS shall promptly give LICENSEE written notice of any such
Inventions, as defined, and LICENSEE shall have one hundred and twenty
(120) days from the date of receipt of such notice to give JOHNS HOPKINS written
notice of its intent to exercise such option and complete negotiations. JOHNS
HOPKINS shall not negotiate with any third party regarding these Inventions
during the period of LICENSEE’S right to negotiate. During the term of this
Agreement and any extension thereof, Dr. Chandrasegaran shall be free to pursue
any scientific investigations of his choice through collaboration with
colleagues. Should any such collaboration involve a Licensed Product or Licensed
Process, JOHNS HOPKINS will take the initiative of promptly communicating with
these colleagues for the purpose of using its reasonable best efforts to have
such colleagues agree to be bound by the terms of this Agreement with regard to
Licensed Products and Licensed Processes.
     2.7 Appendix B attached hereto contains ideas conceived by
Dr. Chandrasegaran for developing laboratory reagents, diagnostics, and
pharmaceuticals relating to chimeric restriction endonucleases.
Dr. Chandrasegaran shall give written notice of any Invention resulting under
the Advanced Technology Program within sixty (60) days of the completion of the
funding of such program. Any Invention resulting in whole or in part from said
ideas which are made pursuant to an award under the Advanced Technology Program
where a grant application was filed on March 29, 1995 (Appendix C) shall be
assigned to LICENSEE pursuant to Section 15.7 below and Dr. Chandrasegaran will
be named as sole inventor unless another individual makes a creative input to
said Invention. LICENSEE shall have the first right of negotiation, under then
commercially reasonable terms, to obtain an exclusive, royalty-bearing license
under any Invention resulting from said ideas in Appendix B made by
Dr. Chandrasegaran with funding from a source other than the Advanced Technology
Program grant.
PARAGRAPHS 5.1 AND 5.2
     5.1 LICENSEE shall keep full, true and accurate books of account containing
all particulars that may be necessary for the purpose of showing the amounts
payable to JOHNS HOPKINS hereunder. Said books of account shall be kept at
LICENSEE’s principal place of business or the principal place of business of the
appropriate Division of LICENSEE to which this Agreement relates. Said books and
the supporting data shall be open at all reasonable times for five (5) years
following the end of the calendar year to which they pertain, to the inspection
of JOHNS HOPKINS or its agents for the purpose of verifying LICENSEE’s royalty
statement or compliance in other respects with this Agreement.
     5.2 Commencing with the first commercial sale of a Licensed Product,
LICENSEE, within sixty (60) days after March 31, June 30, September 30 and
December 31, of each year, shall deliver to JOHNS HOPKINS true and accurate
reports, giving such particulars of the business conducted by LICENSEE, its
Subsidiaries and its sublicensees during the preceding three-month period under
this Agreement as shall be pertinent to a royalty accounting hereunder. These
shall include at least the following:

  (a)   All Licensed Products manufactured and sold.     (b)   Total billings
for Licensed Products sold.     (c)   Accounting for all Licensed Processes used
or sold.

F-2

--------------------------------------------------------------------------------

 

  (d)   Deductions applicable as provided in Paragraph 1.6.     (e)   Total
royalties due.     (f)   Names and addresses of all sublicensees of LICENSEE.

Where reasonably practical, LICENSEE shall, to the best of its knowledge,
subcategorize the Licensed Products sold so as to assign the royalties paid to
individual patent(s) of Appendix A. Such subcategorization shall be for JOHNS
HOPKINS administrative purposes only and shall in no way affect any obligations
of any part or the amounts of royalties to be paid under this Agreement. Until
there has been a first commercial sale of a Licensed Product, the LICENSEE shall
give an annual report of LICENSEE’s efforts to achieve a first commercial sale.
ARTICLE VIII — LIABILITY
     8.1 Inasmuch as JOHNS HOPKINS will not, under the provisions of this
Agreement or otherwise, have control over the manner in which LICENSEE, or its
Subsidiaries or its agents or its sublicensees or those operating for its
account, or third parties who purchase Licensed Products from any of the
foregoing entities, practice any invention encompassed by the license granted
herein, LICENSEE shall defend and hold JOHNS HOPKINS, it trustees, officers,
employees, students, and affiliates harmless as against any judgments, fees,
expenses or other costs (including reasonable attorneys’ fees) arising from or
incidental to any product liability or other lawsuit brought as a consequence of
the practice of said invention by any of the foregoing entities, whether or not
JOHNS HOPKINS is named as party defendant in any such lawsuit. LICENSEE shall
have the right to defend such a product liability lawsuit with counsel of its
own choosing and JOHNS HOPKINS will cooperate in the defense of such action at
LICENSEE’s expense. Practice of the Invention encompassed by the license granted
herein by a Subsidiary or an agent or a sublicensee, or a third party on behalf
of or for the account of LICENSEE or by a third party who purchases Licensed
Products from any of the foregoing shall be considered LICENSEE’s practice of
said invention for purposes of this Paragraph 8.1. The provisions of this
Paragraph 8.1 shall survive termination of this Agreement.
     8.2 LICENSEE shall maintain or cause to be maintained, prior to the first
planned use of Licensed Products or Licensed Processes in humans, product
liability insurance or other protection reasonably acceptable to JOHNS HOPKINS
which shall protect LICENSEE and JOHNS HOPKINS in regard to events covered by
Paragraph 8.1 above. LICENSEE will disclose to JOHNS HOPKINS the amount and kind
of product liability insurance it obtains, will give JOHNS HOPKINS a copy of the
certificate of insurance, and will increase or change the kind of insurance at
the reasonable request of JOHNS HOPKINS, provided such insurance is available to
LICENSEE at commercially reasonable rates.
     8.3 Except as otherwise expressly set forth in this Agreement, JOHNS
HOPKINS makes no representations and extend no warranties of any kind, either
express or implied, including but not limited to warranties of merchantability,
fitness for a particular purpose, and validity of Patent Rights claims, issued
or pending.
     8.4 No liability under this Agreement shall result to a party from delay in
performance caused by force majeure, that is, circumstances beyond the
reasonable control of the party affected

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thereby, including, without limitation, acts of God, earthquake, fire, flood,
war, government regulations, labor unrest, or shortage of or an inability to
obtain material or equipment.
ARTICLE IX — EXPORT CONTROLS
     It is understood that JOHNS HOPKINS is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the Export Administration Act of 1979), and that their
obligations hereunder are contingent on compliance with applicable United States
export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by LICENSEE that LICENSEE shall not export
data or commodities to certain foreign countries without prior approval of such
agency. JOHNS HOPKINS neither represents that a license shall not be required
nor that, if required, it shall be issued.
ARTICLE X — NON-USE OF NAMES
     LICENSEE shall not use the name of JOHNS HOPKINS, nor any of its employees,
or any adaptation thereof, in any advertising, promotional or sales literature
without prior written consent obtained from JOHNS HOPKINS in each case, except
that LICENSEE may state that it is licensed by JOHNS HOPKINS under one or more
of the patents and/or applications comprising the Patent Rights.
ARTICLE XIII — TERMINATION
     13.1 This Agreement shall terminate if LICENSEE dissolves, unless this
Agreement has been assigned prior to the date of dissolution.
     13.2 Should LICENSEE fail to pay JOHNS HOPKINS royalties due and payable
hereunder, JOHNS HOPKINS shall have the right to terminate this Agreement on
sixty (60) days’ written notice, unless LICENSEE shall pay JOHNS HOPKINS within
the sixty (60) day period, all such royalties and interest due and payable. Upon
the expiration of the sixty (60) day period, if LICENSEE shall not have paid all
such royalties and interest due and payable, the rights, privileges and license
granted hereunder shall terminate.
     13.3 Upon any material breach or default of this Agreement by LICENSEE
other than those occurrences set out in Paragraphs 13.1 and 13.2 hereinabove,
which shall always take precedence in that order over any material breach or
default referred to in this Paragraph 13.3, JOHNS HOPKINS shall have the right
to terminate this Agreement and the rights, privileges and license granted
hereunder by giving ninety (90) days’ notice to LICENSEE. Such termination shall
become effective unless LICENSEE shall have cured any such breach or default
prior to the expiration of the ninety (90) day period.
     13.4 LICENSEE shall have the right to terminate this Agreement at any time
on six (6) months’ notice to JOHNS HOPKINS and upon payment of all amounts due
JOHNS HOPKINS.

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     13.5 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination. LICENSEE and any Subsidiary and
sublicensee thereof may, however, after the effective date of such termination,
sell all Licensed Products, and complete Licensed Products in the process of
manufacture at the time of such termination and sell the same, provided that
LICENSEE shall pay to JOHNS HOPKINS the royalties thereon as required by
Article IV of this Agreement and shall submit the reports required by Article V
hereof on the sales of Licensed Products.
     13.6 Upon termination of this Agreement for any reason during the Exclusive
Period, any sublicensee not then in default shall have the right to seek a
license from JOHNS HOPKINS under the same terms and conditions as set forth
hereunder.
     13.7 [NOTE: As amended in Amendment No. 1 to the JHU Agreement.] The
provisions of Paragraph 8.1, Article IX and Article X, Paragraph 4.5 and
Paragraph 6.6 shall survive termination of this Agreement.
ARTICLE XV — MISCELLANEOUS PROVISIONS
     15.1 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of Maryland, U.S.A., except that
questions affecting the validity, construction and effect of any patent licensed
hereunder, shall be determined by the law of the country in which the patent was
granted.
     15.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
     15.3 The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
     15.4 LICENSEE agrees to mark the Licensed Products sold in the United
States with all applicable United States patent numbers. All Licensed Products
shipped to or sold in other countries shall be marked in such a manner as to
conform with the patent laws and practice of the country of manufacture or sale.
     15.5 The failure of any party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not constitute a
waiver of that right or excuse a similar subsequent failure to perform any such
term or condition by the other party.
     15.6 Claims, disputes, or controversies concerning the validity,
construction, or effect of any patent licensed hereunder shall be resolved in
any court having jurisdiction thereof.

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     15.7 A grant application under the Advanced Technology Program was filed on
March 29, 1995 (Appendix C). If a grant is awarded, any Invention made pursuant
thereto where an investigator at JOHNS HOPKINS is the sole inventor or a
coinventor shall be assigned to LICENSEE. Such Invention shall be assigned
hereunder and shall thereafter fall within the definition of Patent Rights and
therefore shall be subject to Sections 3.2, 3.3 and 3.4 hereof and to the
royalty payments required by Sections 4.1(c)(i), 4.1(d) and 4.4 hereof as part
of the rights licensed hereunder.
     15.8 [NOTE: As amended in Amendment No. 1 to the JHU Agreement.] With
respect to “Methods for Inactivating Target DNA and For Detecting Conformation
Change in a Nucleic Acid”, Inventor, Srinivasan Chandrasegaran, US Patent
Application SN 08/647,449, Filed 5/7/96 (JHU Docket: C-1288), LICENSEE hereby
acknowledges and agrees that Dr. Chandrasegaran is the sole inventor of this
property.

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Copy of Selected Provisions from the MIT Agreement
2 — GRANT
     2.1 M.I.T. hereby grants to LICENSEE the right and license in the TERRITORY
to practice under the PATENT RIGHTS and, to the extent not prohibited by other
patents, to make, have made, use, lease, sell and import LICENSED PRODUCTS and
to practice the LICENSED PROCESSES, until the expiration of the last to expire
of the PATENT RIGHTS, unless this Agreement shall be sooner terminated according
to the terms hereof.
     2.2 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the United
States shall be manufactured substantially in the United States.
     2.3 In order to establish exclusivity in the FIELDS OF USE for LICENSEE,
M.I.T. hereby agrees that it shall not grant any other license to make, have
made, use, lease, sell and import LICENSED PRODUCTS or to utilize LICENSED
PROCESSES subject to the royalty-free, nonexclusive license rights of the United
States Government per FAR 52.227-11, in the TERRITORY for the FIELDS OF USE.
     2.4 [NOTE: As amended in the First Amendment to the MIT Agreement.]
LICENSEE and M.I.T. agree that neither party shall assert the Patent Rights
against not-for-profit institutions in their conduct of research, provided,
however, that if a not-for-profit institution practices under the Patent Rights
to conduct high throughput drug screening on behalf of a commercial entity, then
the Patent Rights may be asserted against that institution.
     2.5 M.I.T. reserves the right to practice under the PATENT RIGHTS and to
allow third parties to practice under the PATENT RIGHTS in all fields of use for
noncommercial research purposes.
     2.6 LICENSEE shall have the right to enter into sublicensing agreements for
the rights, privileges and licenses granted hereunder only in the FIELDS OF USE.
Upon any termination of this Agreement, sublicensees’ rights shall also
terminate, subject to Paragraph 13.6 hereof.
     2.7 [NOTE: As amended in the Eighth Amendment to the MIT Agreement.] With
respect to each sublicense agreement [in the Reagent Field], LICENSEE agrees to
do the following:
          (a) incorporate the language of Article 2 (other than Paragraph 2.8),
Article 9, Article 10, and Paragraph 15.4 into each sublicense agreement (but in
each case solely to the extent such language is applicable to the rights granted
in such sublicense agreement), so that these Articles shall be binding upon the
applicable sublicensee as if they were a party to this Agreement;
          (b) include in each such sublicense agreement language that is
reasonably sufficient to enable LICENSEE to comply with its obligations under
Paragraph 2.8 and Articles 5, 7, 12, 13 and 15 (other than Paragraph 15.4);
          (c) use commercially reasonable effort to obtain a indemnity from the
applicable sublicensee in favor of LICENSEE that is substantially similar in
scope of the indemnity set forth in

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Article 8, and include M.I.T. as an indemnified party under any such indemnity
on the same terms as LICENSEE.
     2.8 [NOTE: Intentionally omitted.]
     2.9 Nothing in this Agreement shall be construed to confer any rights upon
LICENSEE by implication, estoppel or otherwise as to any technology or patent
rights of M.I.T. or any other entity other than the PATENT RIGHTS, regardless of
whether such patent rights shall be dominant or subordinate to any PATENT
RIGHTS.
PARAGRAPH 4.1(b)
     4.1 [NOTE: As amended in the Fifth Amendment to the MIT Agreement.] For the
rights, privileges and license granted hereunder, LICENSEE shall pay royalties
to M.I.T. in the manner hereinafter provided to the end of the term of the
PATENT RIGHTS or until this Agreement shall be terminated:
b. License Maintenance Fees of (i) $[***] per year on January 1, 2002 and each
January 1 thereafter until the January 1 following the issuance of the first
protein DNA claims and; (ii) $[***] per year beginning the January 1 following
the issuance of the first of the protein-DNA claims and every January 1
thereafter; provided, however, License Maintenance Frees may be credited to
Running Royalties subsequently due on NET SALES for each said year, if any.
License Maintenance Fees paid in excess of Running Royalties shall not be
creditable to Running Royalties for future years.
9 — EXPORT CONTROLS
     LICENSEE acknowledges that it is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the United States Department of Commerce Export
Administration Regulations). The transfer of such items may require a license
from the cognizant agency of the United States Government and/or written
assurances by LICENSEE that LICENSEE shall not export data or commodities to
certain foreign countries without prior approval of such agency. M.I.T. neither
represents that a license shall not be required nor that, if required, it shall
be issued.
10 — NON-USE OF NAMES
     LICENSEE shall not use the names or trademarks of the Massachusetts
Institute of Technology or Lincoln Laboratory, nor any adaptation thereof, nor
the names of any of their employees, in any advertising, promotional or sales
literature without prior written consent obtained from M.I.T., or said employee,
in each case, except that LICENSEE may state that it is licensed by M.I.T. under
one or more of the patents and/or applications comprising the PATENT RIGHTS.
PARAGRAPH 13.6
     13.6 [NOTE: As amended in the Eighth Amendment to the MIT Agreement.] Upon
termination of this Agreement for any reason, any sublicensee not then in
default shall have the right to seek a
 

***   CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION

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license from M.I.T. M.I.T. agrees to negotiate such licenses in good faith under
reasonable terms and conditions. In addition, in the event that M.I.T.
terminates this Agreement pursuant to Paragraph 13.1, 13.2, or 13.3, each
sublicense granted by LICENSEE to a sublicensee not then in default will survive
such termination (as a direct license from M.I.T.), provided that such direct
license shall be subject to the same non-financial terms and conditions as those
in this Agreement and such sublicensee (or if there is at such time more than
one such sublicensee, such sublicensees severally and jointly) shall be required
to make any annual fees due pursuant to Paragraph 4.1(b) and each such
sublicensee shall be required to make any monetary payment(s) that, had this
Agreement not been terminated, LICENSEE would have been required to make under
this Agreement as a result of the activities of such sublicensee. Each such
sublicensee shall be an intended third-party beneficiary of the preceding
sentence.

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Copy of Selected Provisions from the Utah Agreement
     4.3 For each SUBLICENSE granted by LICENSEE under the terms of this
AGREEMENT, LICENSEE shall pay to LICENSOR (i) a sublicense fee of twenty
thousand dollars ($20,000) within thirty (30) days of execution of each
sublicense and (ii) an annual sublicense fee of ten thousand dollars ($10,000)
for each year (excluding the first year) that such sublicense is in effect,
payable within thirty (30) days of each anniversary of the effective date of
such sublicense agreement.
     6.2 As consideration for the license under this AGREEMENT, LICENSEE shall
pay to LICENSOR an annual maintenance fee of twenty thousand dollars ($20,000)
on or before each anniversary of the EFFECTIVE DATE of this AGREEMENT.
     13.1 If LICENSEE should: (a) fail to deliver to LICENSOR any statement or
report required hereunder when due (except where such payment is being contested
in good faith); (b) fail to make any payment at the time that the same should be
due; (c) violate or fail to perform any covenant, condition, or undertaking of
the AGREEMENT to be performed by it hereunder; or (d) file a bankruptcy action,
or have a bankruptcy action against it (which action remains undismissed for a
period of sixty (60) days), or become insolvent; enter into a composition with
creditors or have a receiver appointed for it; then LICENSOR may give written
notice of such default, and its intent to terminate this AGREEMENT, to LICENSEE.
If LICENSEE should fail to cure such default within thirty (30) days of such
notice, the rights, privileges, and license granted hereunder shall
automatically terminate; provided, however, that the cure period may be extended
by sixty (60) days if LICENSEE conveys a written statement of its intent and
plan to cure such default, and such plan is accepted by the LICENSOR, within
thirty (30) days of the automatic termination date.
     13.2 If LICENSEE shall cease to carry on its business with respect to the
rights granted in this AGREEMENT, this AGREEMENT shall terminate upon thirty
(30) days written notice by LICENSOR.
     13.4 [NOTE: As amended in the (first) Amendment (dated February 22, 2007)
to the Utah Agreement.] Notwithstanding anything to the contrary in this
AGREEMENT, in the event that LICENSOR terminates this AGREEMENT pursuant to
Section 13.1 or 13.2, each sublicense granted by LICENSEE to a SUBLICENSEE then
in good standing under the terms of its sublicense agreement will survive such
termination (as a direct license from LICENSOR), provided that (a) such direct
license shall be subject to the same non-financial terms and conditions as those
in this AGREEMENT, and LICENSOR shall not have any obligations to such
SUBLICENSEE other than LICENSOR’s obligations to LICENSEE as set forth herein;
(b) such SUBLICENSEE (or if there is at such time more than one such
SUBLICENSEE, such SUBLICENSEES severally and jointly) shall be required to make
any annual maintenance payments due pursuant to Section 6.2; and (c) each such
SUBLICENSEE shall be required to make any monetary payment(s) that, had this
AGREEMENT not been terminated, LICENSEE would have been required to make under
this AGREEMENT as a result of the license to, or activities of, such
SUBLICENSEE, including without limitation the annual sublicensee fees due
pursuant to Section 4.3(ii) with respect to such SUBLICENSEE (which for clarity
shall continue notwithstanding the conversion of such SUBLICENSEE’s sublicense
to a direct license from LICENSOR). Each such SUBLICENSEE shall be an intended
third-party beneficiary of this Section 13.4.

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