Exhibit 10.1

EXECUTION COPY

RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

by and between

Sangamo BioSciences, Inc.

and

Juvenile Diabetes Research Foundation International

 

 

 

 

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Table of Contents

 

 

 

page

 

 

 

ARTICLE I

DEFINITIONS.

2

 

 

 

    1.1

Affiliate

2

 

 

 

    1.2

Agreement

2

 

 

 

    1.3

Applicable Law

2

 

 

 

    1.4

Application

2

 

 

 

    1.5

Award

2

 

 

 

    1.6

Award Received

2

 

 

 

    1.7

Commercially Reasonable Efforts

2

 

 

 

    1.8

Confidential Information

2

 

 

 

    1.9

Controlled

2

 

 

 

    1.10

Default

2

 

 

 

    1.11

Diabetes

2

 

 

 

    1.12

Dispute

2

 

 

 

    1.13

Dollars

2

 

 

 

    1.14

Effective Date

2

 

 

 

    1.15

FDA

2

 

 

 

    1.16

Field

2

 

 

 

    1.17

First Commercial Sale

2

 

 

 

    1.18

Five Percent Payment

3

 

 

 

    1.19

Funding Date

3

 

 

 

    1.20

GAAP

3

 

 

 

    1.21

Indemnitee

3

 

 

 

    1.22

Interruption

3

 

 

 

    1.23

Interruption License

3

 

 

 

    1.24

Interruption Notice

3

 

 

 

    1.25

Interruption Response

3

 

 

 

    1.26

JDRF

3

 

 

 

    1.27

JDRF Designees

3

 

 

 

    1.28

JDRF Indemnitee

3

 

 

 

    1.29

JDRF Interruption License Technology

3

 

 

 

    1.30

JDRF Patents

3

 

 

 

    1 .31

JDRF Studies

3

 

 

 

    1.32

Joint Invention

3

 

 

 

    1.33

Joint Research Advisory Committee

3

 

 

 

    1.34

Major Markets

3

-i-

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Table of Contents

(CONTINUED)

 

 

 

page

 

 

 

    1.35

Matched Funds

3

 

 

 

    1.36

Milestones

3

 

 

 

    1.37

NetSales

3

 

 

 

    1.38

Owner

4

 

 

 

    1.39

Party(ies)

4

 

 

 

    1.40

Patents

4

 

 

 

    1.41

Person

4

 

 

 

    1.42

Policies

4

 

 

 

    1.43

Primary Statistical Analysis

4

 

 

 

    1.44

Prime Rate

4

 

 

 

    1.45

Principal Investigator

4

 

 

 

    1.46

Product

4

 

 

 

    1.47

Program Material

4

 

 

 

    1.48

Qualified Subject

4

 

 

 

    1.49

Quarterly Report

4

 

 

 

    1.50

Recipient

4

 

 

 

    1.51

Recipient Notice Requirement

4

 

 

 

    1.52

Registration

4

 

 

 

    1.53

Regulatory Approval

4

 

 

 

    1.54

Research Plan

5

 

 

 

    1.55

Research Program

5

 

 

 

    1.56

Research Termination Date

5

 

 

 

    1.57

Sangamo

5

 

 

 

    1.58

Sangamo Designees

5

 

 

 

    1.59

Sangamo Indemnitee

5

 

 

 

    1.60

Sangamo Party

5

 

 

 

    1.61

Sangámo Patents

5

 

 

 

    1.62

Sangamo Research Program Technology

5

 

 

 

    1.63

Surrogate Endpoint Data

5

 

 

 

    1.64

Territory

5

 

 

 

    1.65

Therapeutic Candidate

5

 

 

 

    1.66

Third Party

5

 

 

 

ARTICLE II

RESEARCH PROGRAM

5

 

 

 

  2.1

Overview

5

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Table of Contents

(CONTINUED)

 

  2.2

Commencement of the Research Program

5

 

 

 

 

  2.3

Research Diligence

5

 

 

 

 

 

2.3.1

Generally

5

 

 

 

 

 

2.3.2

Obligations of Sangamo

6

 

 

 

  2.4

Modifications to JDRF Studies

6

 

 

 

  2.5

Joint Research Advisory Committee

6

 

 

 

 

2.5.1

Composition and Purposes

6

 

 

 

 

2.5.2

Meetings

7

 

 

 

 

2.5.3

Discussions/Recommendations

7

 

 

 

 

2.5.4

Expenses

7

 

 

 

  2.6

Delivery of Adverse Event Data to the JRAC

7

 

 

 

ARTICLE III

RESEARCH FUNDING; RECORDS

7

 

 

 

  3.1

Research Funding

7

 

 

 

 

 

3.1.1

Payments

7

 

 

 

 

3.1.2

Limitations

7

 

 

 

 

3.1.3

Matched Funds

8

 

 

 

 

3.1.4

Payments

8

 

 

 

 

3.1.5

Competition

8

 

 

 

  3.2

Records; Reporting Obligations; Audits

8

 

 

 

 

3.2.1

Records

8

 

 

 

 

3.2.2

Audit

8

 

 

 

 

3.2.3

Reports; Notices

8

 

 

 

ARTICLE IV

DILIGENCE; COMPENSATION TO JDRF

9

 

 

 

  4.1

Development and Commercialization of Product

9

 

 

 

  4.2

Compensation to JDRF

9

 

 

 

  4.3

Sales Reports

10

 

 

 

  4.4

Royalties to Sangamo

10

 

 

 

ARTICLE V

CONFIDENTIALITY

10

 

 

 

  5.1

Confidentiality

10

 

 

 

 

5.1.1

Definition of Confidential Information

10

 

 

 

 

5.1.2

Non-Disclosure

11

 

 

 

 

5.1.3

Required Disclosure

11

 

 

 

 

5.1.4

No Use of Confidential Information

11

 

 

 

  5.2

Publicity; Use of Name

11

 

 

 

-iii-

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Table of Contents

(CONTINUED)

 

 

 

page

 

 

 

ARTICLE VI

PUBLICATION

12

 

 

 

ARTICLE VII

INDEMNIFICATION

13

 

 

 

  7.1

Indemnification by Sangamo

13

 

 

 

  7.2

Indemnification by JDRF

13

 

 

 

  7.3

Claims Procedures

13

 

 

 

   7.4

Participation; Assuming Control of the Defense

13

 

 

 

  7.5

Advance Payment of Expenses

13

 

 

 

  7.6

Limitation of Liability

14

 

 

 

  7.7

Insurance

14

 

 

 

ARTICLE VIII

PATENTABLE INVENTIONS

14

 

 

 

  8.1

Ownership

14

 

 

 

  8.2

Preparation

14

 

 

 

  8.3

Costs

14

 

 

 

  8.4

Abandonment

14

 

 

 

ARTICLE IX

TERM AND TERMINATION

15

 

 

 

  9.1

Term

15

 

 

 

  9.2

Termination by JDRF With Cause

15

 

 

 

  9.3

Termination for JDRF Breach

15

 

 

 

  9.4

General Effect of Termination; Survival

15

 

 

 

  9.5

Interruption License

16

 

 

 

ARTICLE X

REPRESENTATIONS AND WARRANTIES

17

 

 

 

10.1

Representations, Warranties and Covenants of Sangamo

17

 

 

 

10.2

Representations and Warranties of JDRF

17

 

 

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

18

 

 

 

11.1

Governing Law

18

 

 

 

11.2

Dispute Resolution

18

 

 

 

11.3

Equitable Relief

18

 

 

 

11.4

Waiver

18

 

 

 

11.5

Force Majeure

18

 

 

 

11.6

Severability

19

 

 

 

11.7

Assignment

19

 

 

 

11.8

Counterparts

19

 

 

 

11.9

No Agency

19

 

 

 

  11.10

Notice

19

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Table of Contents

(CONTINUED)

 

 

 

page

 

 

 

11.11

Headings

20

 

 

 

11.12

Entire Agreement

20

 

 

 

 

Exhibit A — Research Plan

 

 

 

 

 

Exhibit B — Research Funding and Milestones

 

 

 

 

 

Exhibit C — JDRF Policies and Conditions Regarding Funding of Research Involving
Human Clinical Trials

 

 

 

 

 

Exhibit D — Form of Press Release

 

 

 

-v-

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EXECUTION COPY

RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

This Agreement (this “Agreement”) is made on this 24th day of October, 2006, by
and between Sangamo BioSciences, Inc., a Delaware corporation, with its
principal office at 501 Canal Boulevard, Suite A100, Richmond, CA 94804
(“Sangamo”) and Juvenile Diabetes Research Foundation International, a
Pennsylvania nonprofit corporation with its principal offices at 120 Wall
Street, New York, NY 10005 (“JDRF”). This Agreement shall become effective on
the Effective Date (as defined below). Sangamo and JDRF are each a “Party,” and,
collectively, the “Parties.”

WHEREAS, JDRF’s principal charitable mission is the discovery and development of
a cure for diabetes and its complications, to which JDRF brings significant
scientific and human resources and financial support;

WHEREAS, Sangamo desires, among other things, to collect additional clinical
endpoints during the Phase II Repeat Dosing Clinical Trial of SB-509 for the
purpose of understanding the mechanistic basis of efficacy and reversal of
neuropathy (as more fully described in the Research Plan); and

WHEREAS, JDRF wishes to support the Research Program.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

 

 

 

 

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ARTICLE I DEFINITIONS

For purposes of this Agreement, the terms defined in this Article 1 shall have
the following meanings whether used in their singular or plural forms. Use of
the singular shall include the plural and vice versa, unless the context
requires otherwise:

1.1 “Affiliate” shall mean, with respect to any Person, any other Person who
directly or indirectly, by itself or through one or more intermediaries,
controls, or is controlled by, or is under direct or indirect common control
with, such Person. The term “control” means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise. Control will be presumed if one Person owns, either of record or
beneficially, more than fifty percent (50%) of the voting stock of any other
Person.

1.2 “Agreement” means this agreement, together with all appendices, exhibits and
schedules hereto, and as the same may be amended or supplemented from time to
time hereafter by a written agreement duly executed by authorized
representatives of each Party hereto.

1.3 “Applicable Law” shall have the meaning set forth in Section 10.1(b).

1.4 “Application” shall mean Sangamo’s submitted Industry Discovery &
Development Partnerships Application, dated May 12, 2006 and approved by JDRF on
June 29, 2006.

1.5 “Award” shall mean an amount up to, but not to exceed, Three Million Dollars
($3,000,000), which is to be paid by JDRF to Sangamo for the Research Program in
accordance with the terms, and subject to the conditions, set forth in this
Agreement.

1.6 “Award Received” shall mean the amount of the Award actually received by
Sangamo from JDRF pursuant to this Agreement, not including any amounts refunded
to JDRF pursuant to Section 3.2.3(b).

1.7 “Commercially Reasonable Efforts” shall mean a level of effort and
application of expertise and resources that are consistent with a continuing
intention to research, develop and commercialize the Product, including without
limitation the reasonable time during which Sangamo is engaged in active efforts
to identify a potential Third Party licensee or collaborator and negotiate a
license or collaboration arrangement with such Third Party to research, develop
and/or commercialize the Product, it being acknowledged by the Parties that
there may be delays for regulatory or other reasons that are not within
Sangamo's or its licensee’s, sublicensee's or transferee's control and such
delays shall not constitute a cessation of Commercially Reasonable Efforts.

1.8 “Confidential Information” shall have the meaning set forth in Section
5.1.1.

1.9 “Controlled” (except in the context of Section 1.1) shall mean the legal
authority or right of a Party to grant a license or sublicense of intellectual
property rights to the other Party hereto, or to otherwise disclose proprietary
or trade secret information to such other Party, without breaching the terms of
any agreement with a Third Party.

1.10 “Default” shall have the meaning set forth in Section 9.2.

1.11 “Diabetes” shall mean any one and/or all of the human diseases commonly
known as diabetes and the complications of such diseases.

1.12 “Dispute” shall have the meaning set forth in Section 11.2(a).

1.13 “Dollars” shall have the meaning set forth in Section 3.1.4.

1.14 “Effective Date” shall mean the date the last Party signs this Agreement.

1.15 “FDA” shall mean the United States Food and Drug Administration, or any
successor agency having regulatory jurisdiction over the manufacture,
distribution and sale of drugs in the United States, and its territories and
possessions.

1.16 “Field” shall mean the diagnosis, treatment and/or prevention of Diabetes
in humans.

1.17 “First Commercial Sale” shall mean the first sale of the Product by Sangamo
or an Affiliate, licensee, sublicensee, transferee or successor of Sangamo to an
independent Third Party in a Major Market country following Regulatory Approval
of the Product in that country.

2.

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1.18 “Five Percent Payment” shall have the meaning set forth in Section 4.2(b).

1.19 “Funding Date” shall mean each date set forth on Exhibit B.

1.20 “GAAP” shall mean United States generally accepted accounting principles,
consistently applied.

1.21 “Indemnitee” shall mean either Sangamo Indemnitee or JDRF Indemnitee, as
applicable.

1.22 “Interruption” shall occur if, at any time before the First Commercial Sale
of the Product, Sangamo, its Affiliates, licensees, sublicensees, transferees
and/or successors, all cease to conduct, or have ceased Commercially Reasonable
Efforts with respect to, the research, development and/or commercialization of
all Products for a period of one hundred eighty (180) consecutive days, except
that no Interruption shall be deemed to have occurred, if Sangamo, its
Affiliates, licensees, sublicensees, transferees, and/or successors suspend,
postpone or discontinue the development or commercialization of a Product on
account of (a) a serious adverse event; (b) a clinical hold; or (c)
communications with a regulatory authority.

1.23 “Interruption License” shall have the meaning set forth in Section 9.5(e).

1.24 “Interruption Notice” shall have the meaning set forth in Section 9.5(a).

1.25 “Interruption Response” shall have the meaning set forth in Section 9.5(a).

1.26 “JDRF” shall have the meaning set forth in the preamble of this Agreement.

1.27 “JDRF Designees” shall have the meaning set forth in Section 2.5.1.

1.28 “JDRF Indemnitee” shall have the meaning set forth in Section 7.1.

1.29 “JDRF Interruption License Technology” shall mean all intellectual
property, data, technical information, know-how, inventions (whether or not
patented), trade secrets, processes and methods that are (a) discovered or
developed by or on behalf of JDRF or its Affiliates, in the performance of the
Research Program or exploitation of the Interruption License under this
Agreement, (b) Controlled by JDRF, and (c) necessary or useful for the research,
development and commercialization of the Product.

1.30 “JDRF Patents” shall mean any Patents Controlled by JDRF or its Affiliates
that claim an invention that relates to the Research Program but is not a Joint
Invention.

1.31 “JDRF Studies” shall mean the mechanistic add-on studies for the collection
of Surrogate Endpoint Data that are described in the Application.

1.32 “Joint Invention” shall have the meaning set forth in Section 8.1.

1.33 “Joint Research Advisory Committee” or “JRAC” shall have the meaning set
forth in Section 2.5.1.

1.34 “Major Markets” shall mean the United States, United Kingdom, Germany,
France, Italy and Spain.

1.35 “Matched Funds” shall have the meaning set forth in Section 3.1.3.

1.36 “Milestones” shall mean the performance milestones for the Research Program
set forth in Exhibit B.

1.37 “Net Sales” means, for any period, the gross price received for the Product
sold or otherwise disposed of (other than for use as clinical supplies or free
samples) for consideration by Sangamo or its Affiliates to Third Parties other
than sublicensees, reduced by the following amounts (calculated in accordance
with GAAP consistently applied by Sangamo and its Affiliates across its product
lines), if not previously deducted from the amount invoiced: (a) amounts
actually allowed as trade, volume or quantity discounts, including early pay
cash discounts; (b) amounts repaid or credited by reason of defects, recalls,
accrued or actual returns, rebates and allowances of goods or because of
retroactive price reductions specifically identifiable to the Product; (c)
rebates and administrative fees paid to medical health care organizations in
line with approved contract terms; (d) rebates resulting from government (or
agency thereof) mandated rebate programs or chargeback programs; (e) rebates
paid to wholesalers for inventory management programs or distribution management
agreements, in accordance with Sangamo’s practice reasonably consistently
applied; (f) discounts pursuant to indigent patient programs and patient
discount programs to include coupons and vouchers to the extent included in Net
Sales; (g)

3.

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retroactive and temporary price reductions that are actually allowed or granted;
(h) sales commissions paid to Third Party distributors or selling agents (which
shall not include sales organizations, whether contract or internal to Sangamo);
(i) sales or excise taxes, custom duties, and other governmental charges
(including payments made to United Kingdom government departments under the UK
Pharmaceutical Pricing Regulatory Scheme or similar programs, and government
taxes, charges or penalties, such as French Social Security rebates, which
payments need not be calculated in accordance with GAAP) imposed directly on and
actually paid by Sangamo or its Affiliates; and (j) transportation costs,
including insurance and shipping, freight, and handling charges, to the extent
billed separately to customers.

1.38 “Owner” shall have the meaning set forth in Section 5.1.2.

1.39 “Partv(ies)” shall have the meaning set forth in the preamble of this
Agreement.

1.40 “Patents” means all existing patents and patent applications and all patent
applications hereafter filed, including any continuation, continuation-in-part,
division, provisional or any substitute applications, any patent issued with
respect to any such patent applications, any reissue, reexamination, renewal or
extension (including any supplementary protection certificate) of any such
patent, any confirmation patent or registration patent or patent of addition
based on any such patent, and all foreign counterparts of any of the foregoing.

1.41 “Person’ means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization or government or
political subdivision thereof.

1.42 “Policies” shall have the meaning set forth in Section 1 0.1(b).

1.43 “Primary Statistical Analysis” shall mean the analysis performed of the six
(6) month follow up of all clinical endpoints of all evaluable patients
participating in Sangamo 's Phase II Repeat Dosing Clinical Trial of SB-509.

1.44 “Prime Rate” shall mean the average prime rate published in the Wall Street
Journal during the relevant period (calculated by dividing (a) the sum of the
prime rates for each of the days during the relevant period, by (b) the number
of days in the relevant period).

1.45 “Principal Investigator” shall mean the Chief Medical Officer of Sangamo,
who will personally conduct or supervise the Research Program.

1.46 “Product” shall mean (a) the pharmaceutical product containing the
Therapeutic Candidate or (b) any derivatives or related products that (i) encode
a zinc finger DNA-binding protein designed to activate the expression of
vascular endothelial growth factor (VEGF-A) and (ii) result from Sangamo's
research for treatment of diabetic neuropathy.

1.47 “Program Material” shall have the meaning set forth in Section 2.3.2(d).

1.48 “Qualified Subject” is a human subject who, on enrollment into the Research
Plan, has met all of the eligibility criteria and none of the exclusion criteria
in the Research Plan and has given his or her written informed consent to
participate in the Research Plan.

1.49 “Quarterly Report” shall have the meaning set forth in Section 3.2.3(a).

1.50 “Recipient” shall have the meaning set forth in Section 5.1.2.

1.51 “Recipient Notice Requirement” shall have the meaning set forth in Section
5.1.3.

1.52 “Registration” shall mean, with respect to each country in the Territory,
Regulatory Approval for the Product filed in such country.

1.53 “Regulatory Approval” shall mean, with respect to any country, all
authorizations by the appropriate governmental entity or entities necessary for
commercial sale of the Product in that country including, without limitation and
where applicable, approval of labeling, price, reimbursement and manufacturing,
in the United States final approval of a new drug application or biologic
license application, as the case may be, pursuant to the then-applicable
provisions of the Code of Federal Regulations permitting marketing of the
Product in interstate commerce in the United States, and in the European Union
final approval of a Marketing Authorization Application, or equivalent.

4.

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1.54 “Research Plan” means the written protocol for Sangamo’s Phase II Repeat
Dosing Clinical Trial of SB-509, that shall be attached to this Agreement as
Exhibit A upon approval by the FDA, which protocol was based on the Application,
includes the JDRF Studies, and has been approved by the FDA, as modified from
time to time by Sangamo in consultation with the FDA and in accordance with
Section 2.4.

1.55 “Research Program” shall mean the work conducted by or on behalf of Sangamo
in furtherance of the Research Plan.

1.56 “Research Termination Date” shall mean the date of completion of all
activities specified in the Research Plan, including all follow-ups of Qualified
Subjects and all analysis included in the JDRF Studies.

1.57 “Sangamo” shall have the meaning set forth in the preamble of this
Agreement.

1.58 “Sangamo Designees” shall have the meaning set forth in Section 2.5.1.

1.59 “Sangamo Indemnitee” shall have the meaning set forth in Section 7.2.

1.60 “Sangamo Party” shall have the meaning set forth in Section 7.l(a).

1.61 “Sangamo Patents” shall mean any Patents Controlled by Sangamo or its
Affiliates claiming Sangamo Research Program Technology.

1.62 “Sangamo Research Program Technology” shall mean all intellectual property,
data, technical information, know-how, inventions (whether or not patented),
trade secrets, processes and methods that are (a) discovered or developed by or
on behalf of Sangamo or its Affiliates, in the performance of the Research
Program under this Agreement, (b) Controlled by Sangamo, and (c) necessary or
useful for the research, development and commercialization of the Product.

1.63 “Surrogate Endpoint Data” shall have the meaning set forth in Article VI.

1.64 “Territory” shall mean worldwide.

1.65 “Therapeutic Candidate” shall mean the plasmid, known as SB-509, that
encodes a zinc finger DNA-binding protein designed to upregulate the expression
of vascular endothelial growth factor (VEGF-A).

1.66 “Third Party” shall mean any Person which is not a Party or an Affiliate of
any Party to this Agreement.

ARTICLE II RESEARCH PROGRAM

2.1 Overview. Sangamo shall be responsible for the conduct of the Research
Program as set forth herein. JDRF shall provide the financial support
hereinafter specified, and consultation and advice as provided herein through
its participation on the JRAC as provided below.

2.2 Commencement of the Research Program. If not commenced prior to the
Effective Date, the Research Program shall commence as soon after the Effective
Date as practicable in light of the date of the FDA’s approval of the Research
Plan. If the Research Plan is approved by the FDA after the Effective Date and
substantial changes are made to the JDRF Studies as described in the
Application, then JDRF shall have the right to terminate this Agreement within
ten (10) days following such approval of the Research Plan.

2.3 Research Diligence.

2.3.1 Generally. Sangamo shall use Commercially Reasonable Efforts to: (a)
conduct the Research Program in accordance with the Research Plan; and (b)
satisfy and achieve the Milestones. In furtherance of the foregoing, and in
accordance with the terms and conditions of this Agreement (including, without
limitation, Section 2.3.2 below), Sangamo shall commit to the Research Program
directly or through Third Party contractors (i) the level of staffing required
by the Research Plan, with staff that possesses appropriate experience, training
and scientific expertise for the tasks to which they are assigned, and (ii) the
infrastructure (e.g., laboratories, offices, equipment and facilities) required
by the Research Plan.

5.

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2.3.2 Obligations of Sangamo. Subject to the terms and conditions of this
Agreement, and without limiting the generality of Section 2.3.1 above, Sangamo
directly or through its Third Party contractors shall be responsible for
conducting the sponsorship, conduct and oversight of the Research Program, such
responsibilities to include, without limitation:

(a) identifying appropriate clinical sites to conduct the Research Plan, and
entering into clinical trial agreements with such clinical sites;

(b) providing the approved clinical sites with a copy of the Research Plan;

(c) identifying, selecting, and enrolling Qualified Subjects;

(d) providing the investigators at approved clinical sites with the required
quantity of the Product or placebo (the “Program Material”), appropriately
formulated in accordance with the Research Plan;

(e) monitoring compliance of the approved clinical sites with the Research Plan;

(f) monitoring adverse events arising in the course of the Research Program;

(g) providing the investigators at approved clinical sites and JDRF (the latter
for informational purposes) with a copy of the current investigator brochure;

(h) performing laboratory analyses on biopsies collected from Qualified Subjects
as outlined in the Research Plan;

(i) complying with all Applicable Law and guidelines regarding administration,
transportation, manufacture and production of the Program Material and any other
drugs or fluids which are to be supplied by Sangamo for use in connection with
the Research Plan;

(j) abiding by and complying with the Policies; and

(k) promptly and thoroughly responding to all reasonable requests and inquiries
of JDRF for information regarding the Research Program.

2.4 Modifications to JDRF Studies. Sangamo shall not propose to the FDA any
changes to the Research Plan that would have a material impact on the JDRF
Studies without first presenting such changes to the JRAC and obtaining the
JRAC's recommendation of such changes.

2.5 Joint Research Advisory Committee.

2.5.1 Composition and Purposes. During the term of the Research Program, the
Parties shall establish a Joint Research Advisory Committee (“JRAC”) consisting
of four (4) members, two (2) of whom shall be designated by Sangamo (the
“Sangamo Designees”), and two (2) of whom shall be designated by JDRF (the “JDRF
Designees”). Each Party (a) shall select a program coordinator from among its
designees to the JRAC (who may be changed at any time or from time to time by
such Party), and (b) may change any of its designees to the JRAC at any time or
from time to time. The program coordinator of Sangamo shall serve as the
Chairperson of the JRAC. The Sangamo Designees initially shall be Heidi Kim and
Dale Ando, who also initially shall serve as Sangamo’s program coordinator and
the Chairperson of the JRAC, and the JDRF Designees initially shall be Richard
Insel and Paul Burn, who also initially shall serve as JDRF’s program
coordinator.

The JRAC shall have the authority to:

(i) facilitate communication between the Parties with respect to the Research
Program;

(ii) receive Quarterly Reports from Sangamo with respect to the progress of the
Research Program and consider and discuss such reports;

(iii) determine whether the Milestones have been satisfied and achieved; and

(iv) decide whether to recommend any changes presented by Sangamo in accordance
with Section 2.4.

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2.5.2 Meetings. The JRAC shall meet once in each six (6) month period between
the Effective Date and the Research Program Termination Date; provided, however,
the JRAC shall meet within forty-five (45) days following JDRF’s receipt from
Sangamo of a written certification setting forth Sangamo’s achievement of a
Milestone. Meetings of the JRAC shall be held at such times and locations as may
be mutually agreed upon by the program coordinators, which times and locations
shall be communicated in writing (including, without limitation, by email) to
the other members of the JRAC with reasonable advance notice of the meeting. At
least one (1) Sangamo Designee and one (1) JDRF Designee shall be required to
participate in a meeting for such meeting to be deemed to have a quorum of the
JRAC members. So long as a quorum is present at a meeting, the JRAC may make, or
decide to make, recommendations to Sangamo, or take, or decide to take, such
actions as are within the scope of the JRAC’s authority hereunder. Members of
the JRAC may attend each meeting either in person or by means of telephone or
other telecommunications device that allows all participants to hear and speak
at such meeting simultaneously. At least ten (10) business days prior to each
meeting, Sangamo shall deliver (including by email) to JDRF a written report
detailing the progress made on the Research Program since the last meeting of
the JRAC. In satisfaction of such written report, Sangamo may provide the most
recent Quarterly Report supplemented by any new significant developments since
the most recent Quarterly Report. Within thirty (30) days after the date of each
meeting, the Sangamo Designees shall prepare and deliver (including by email) to
the JDRF Designees written minutes of such meeting setting forth in detail all
discussions and/or recommendations of the JRAC made at such meeting, which
minutes shall be subject to revision to take account of the comments of JDRF’s
program coordinator.

2.5.3 Discussions/Recommendations.

(a) As a general matter, and except as otherwise provided for herein,
recommendations of the JRAC shall be unanimous and non-binding.

(b) Notwithstanding the foregoing, the determination as to whether or not a
Milestone has been achieved and satisfied shall be subject to the unanimous vote
of the JRAC. In each such instance, the Sangamo Designees shall, collectively,
have one (1) vote, and the JDRF Designees shall, collectively, have one (1)
vote, which, in each instance, shall be cast by each Party's program coordinator
(unless such Party’s program coordinator expressly authorizes such Party’s other
JRAC designee to cast such Party’s vote). In the event of a deadlock, the
Sangamo Designees and the JDRF Designees shall attempt to resolve such deadlock
for a period of twenty (20) days by engaging in good faith discussions. If such
deadlock is not resolved after such twenty (20) day period, then, such deadlock
shall be resolved in accordance with the dispute resolution process set forth in
Section 11.2.

2.5.4 Expenses. Each Party shall pay its own expenses (including travel and
lodging expenses) incurred in connection with its participation on the JRAC.

2.6 Delivery of Adverse Event Data to the JRAC. In the event of a serious
adverse event (as defined by the ICH Harmonized Tripartite Guideline on Clinical
Safety Data Management), directly or indirectly attributable to the use or
application of the Product, Sangamo shall deliver to each JRAC member any
information and other data related to such adverse event within a reasonable
time after Sangamo has had an opportunity to discuss such adverse event with the
FDA. Any disclosure of patient-identifiable information of any Qualified Subject
in connection with the Quarterly Reports due under Section 3.2.3(a) or any other
reporting requirements hereunder shall comply with the Health Insurance and
Portability and Accountability Act of 1996 and regulations, laws and guidelines
related thereto.

ARTICLE III RESEARCH FUNDING; RECORDS

3.1 Research Funding.

3.1.1 Payments. Subject to Section 3.1.2, JDRF shall make payments to Sangamo of
the Award in accordance with Exhibit B.

3.1.2 Limitations. Notwithstanding Section 3.1.1 above, JDRF shall not be
required to make any payment or additional payment in respect of the Award:

(a) in excess of Three Million Dollars ($3,000,000);

(b) unless at the time such payment is due, the Research Program is in
compliance with all Applicable Law;

(c) if Sangamo is, at the time such payment is due, in material breach of any of
its covenants or obligations under this Agreement (including, without
limitation, Sangamo's obligations under Section 3.1.3 below) and JDRF provides
Sangamo with written notification of such breach at least thirty (30) days
before such payment due date;

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(d) if, at the time such payment is due, a case or proceeding (i) under the
bankruptcy laws of the United States now or hereafter in effect is filed against
Sangamo or all or substantially all of its assets and such petition or
application is not dismissed within sixty (60) days after the date of its filing
or Sangamo shall file any answer admitting and not contesting such petition, or
(ii) under the bankruptcy laws of the United States now or hereafter in effect
or under any insolvency, reorganization, receivership, dissolution or
liquidation law or statute of any jurisdiction now or hereafter in effect
(whether at law or equity) is filed by Sangamo for all or substantially all of
its assets; and/or

(e) if this Agreement previously is terminated by any Party in accordance with
Article IX, provided, however, that any payments accrued prior to such
termination shall immediately become due and payable to Sangamo upon such
termination; provided, however, that JDRF shall pay Sangamo any amount not paid
on account of subsection (b), (c) or (d) above as soon as the condition that
caused such non-payment has been remedied or no longer exists.

3.1.3 Matched Funds. The Parties agree, acknowledge and recognize that the Award
represents only partial financial support for the Research Program, and Sangamo
agrees to provide the balance of the funds necessary to conduct and complete the
Research Program. In furtherance of, but without limiting the generality of the
foregoing, Sangamo shall contribute to the Research Program, in the aggregate,
an amount that is at least equal to the Award Received (the “Matched Funds”).
Sangamo hereby covenants and agrees to solely use the Award Received and the
Matched Funds to fund the Research Program.

3.1.4 Payments. All payments to be made hereunder (including, without
limitation, pursuant to Article IV) shall be made in United States dollars
(“Dollars”) and, at the option and direction of the receiving party, shall be
made by cashier’s or certified check or by wire transfer of immediately
available funds.

3.1.5 Competition. Sangamo hereby agrees and acknowledges that nothing contained
herein shall restrict or prevent JDRF's ability to provide funding to, or take
any other action with respect to, any Person that competes with the business,
operations and/or research of Sangamo, provided, however, that in no event shall
JDRF disclose to such Persons any non­public information concerning the Research
Program, including the results thereof.

3.2 Records; Reporting Obligations; Audits.

3.2.1 Records. Sangamo shall prepare and maintain complete and accurate books
and records in accordance with GAAP documenting its expenditure of funds in
connection with the Research Program (including financial records of
expenditures of the Award Received and the Matched Funds), and shall keep all
such books and records for no less than a period of three (3) years following
the Research Termination Date.

3.2.2 Audit. At the request of JDRF not more often than once in each twelve (12)
month period, Sangamo shall permit JDRF internal accounting personnel or
representatives and agents of an independent, certified public accounting firm
appointed by JDRF and reasonably acceptable to Sangamo, to audit and examine,
during normal business hours, the financial records of Sangamo covering the
previous twelve (12) month period as may be necessary to verify Sangamo’s
expenditures of funds in connection with performance of the Research Program in
general and the JDRF Studies in particular. Any and all records audited and
examined by JDRF personnel or such representatives and agents of such accounting
firm shall be deemed Sangamo’s Confidential Information. JDRF shall pay the
costs of such audit and examination of such financial records, provided,
however, that, if such audit and examination reveals an over-reporting by
Sangamo to JDRF of Matched Funds or expenditures attributed to the JDRF Studies
of more than five percent (5%), then the reasonable costs of such audit and
examination shall be borne by Sangamo and Sangamo shall reimburse JDRF for all
of the reasonable costs and expenses incurred by JDRF in connection with such
audit and examination.

3.2.3 Reports; Notices. Sangamo shall (y) maintain a system of accounting in
accordance with GAAP; and (z) furnish to JDRF the following reports and notices
under the confidentiality provisions of Article V:

(a) As soon as practicable, and in any event within ninety (90) days after the
end of each calendar quarter (including the calendar quarter ending December 31)
prior to the Research Termination Date, a report describing (i) the actual costs
of the Research Program during such quarter and how the Award Received and
Matched Funds have been allocated and in fact used in respect of the Research
Program, (ii) the Research Program work performed during such quarter,
including, without limitation, Milestones achieved, (iii) a summary of all
Research Program clinical data collected and analyzed during such quarter, (iv)
a summary of all regulatory filings made during such calendar that materially
alter the Research Plan, and (v) any other information that JDRF reasonably
requests (each a “Quarterly Report”).

(b) As soon as practicable, and in any event within ninety (90) days after the
end of the calendar quarter in which the Research Termination Date occurs or the
termination of the Agreement becomes effective, whichever is earlier, a closing
report which (i) sets forth Sangamo's final analysis, summary tables, data
listings, results and conclusions from the Research Program and

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such other information and materials as JDRF may reasonably request and (ii)
provides an accounting of the out-of-pocket expenses incurred by Sangamo since
the Effective Date with respect to performance of the JDRF Studies. If the total
amount of such expenses is less than the total Award Received, then, Sangamo
shall, within thirty (30) days after delivery of the closing report, refund the
difference between such total expenses and the total Award Received in such
manner as JDRF shall reasonably instruct Sangamo. Such closing report shall be
in lieu of a Quarterly Report covering the last calendar quarter of the Research
Program.

(c) Within sixty (60) days after the end of each fiscal year, audited financial
statements as of the end of such year (including, without limitation, a copy of
the consolidated balance sheet of Sangamo as of the end of such year, together
with consolidated statements of income, operations, cash flow and retained
earnings of Sangamo for such year), prepared in accordance with GAAP, along with
a comparison of such financial statements with the corresponding periods of the
prior year. Notwithstanding the foregoing, the scope of the information to be
included in the report due under this Section 3.2.3(c) shall be no more
extensive or detailed than the scope of financial disclosures that Sangamo is
required to make by the Securities and Exchange Act of 1934, as amended.

(d) As soon as practicable, and in any event within thirty (30) days after the
end of each calendar year following the Research Termination Date, a report
summarizing the Product development and commercialization activities performed
by or on behalf of Sangamo or its Affiliates, collaborators, licensees or
sublicensees during such year.

(e) As soon as practicable, and in any event promptly after the consummation
thereof, any proposed license, sublicense, transfer, or subcontract by Sangamo
of rights related to the research, development, and/or commercialization of the
Product, any permitted assignment by Sangamo of this Agreement or its rights
and/or obligations hereunder, or of any merger, acquisition, consolidation or
similar transaction involving Sangamo and materially affecting JDRF's rights
and/or obligations hereunder.

ARTICLE IV DILIGENCE; COMPENSATION TO JDRF

4.1 Development and Commercialization of Product. Following the Research
Termination Date, Sangamo shall use Commercially Reasonable Efforts to develop,
commercialize and bring one Product in the Field to market in the Major Markets.
The activities of Sangamo's Affiliates, licensees, sublicensees, subcontractors,
collaborators, transferees and successors shall be attributed to Sangamo for the
purposes of determining Sangamo's satisfaction of the foregoing diligence
obligation.

4.2 Compensation to JDRF.

(a) In consideration of JDRF's payments to Sangamo and JDRF’s licenses to
Sangamo hereunder, Sangamo shall pay JDRF an amount equal to three (3) times the
Award Received less all payments made pursuant to Section 4.2(b) (such amount,
the “JDRF ROI”) as follows: within ninety (90) days of the first, second, third
and fourth anniversaries of the First Commercial Sale, Sangamo shall pay JDRF an
amount equal to: (i) one-fourth of the JDRF ROI, (ii) twenty-five percent (25%)
of Net Sales during the 12-month period between such anniversary and the
previous anniversary of the First Commercial Sale, as applicable (such period,
the “Relevant Period”), or (iii) fifty percent (50%) of the royalties received
by Sangamo during the Relevant Period from its licensees and sublicensees on
account of the sale of the Product, whichever is less, provided that such
amounts shall be reduced as necessary to ensure that the total amount paid, when
this Section 4.2(a) is combined with all payments made pursuant to Section
4.2(b), shall not exceed three (3) times the Award Received. If the amount paid
to JDRF in any year is less than one-fourth of the JDRF ROI plus any deficit
from a preceding year of JDRF ROI (in each case after crediting all payments
made in such year pursuant to Section 4.2(b)), any such deficit shall be carried
forward and added to the amount applicable under Section 4.2(a)(i) for the
following year. If the total amount paid by Sangamo to JDRF pursuant to this
Section 4.2 by the date that is ninety (90) days after the fourth anniversary of
the First Commercial Sale is less than the JDRF ROI, then Sangamo shall continue
to make payments in accordance with this Section 4.2 in the following years
equal to the lesser of the remaining JDRF ROI, or the lesser of the amounts in
Sections 4.2(a)(ii) and (iii) to JDRF within ninety (90) days of each subsequent
such anniversary until such time as the total amount paid by Sangamo equals the
JDRF ROI.

(b) If Sangamo is commercializing the Product in connection with any license,
transfer, or sale of the Sangamo Research Program Technology, any Sangamo
Patents, or any Product, to a Third Party, then Sangamo shall pay to JDRF in
cash five percent (5%) of the gross proceeds that are received by Sangamo on or
after December 31, 2008 and prior to the time of Regulatory Approval of the
Product in connection with any such license, transfer, or sale, whether such
payments are upfront license fees, milestone payments, or other fees, but
excluding FTE payments or purchases of equity at or below fair market value (the
“Five Percent Payment”), up to an aggregate amount equal to two (2) times the
amount of the Award Received. Such payments to JDRF will be made within ninety
(90) days of receipt of such gross proceeds from any licensee, transferee or
purchaser of Sangamo Research Program Technology. Thereafter, Sangamo shall pay
any remaining JDRF ROI to JDRF in accordance with Section 4.2(a). For clarity,

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Sangamo shall not be obligated to pay JDRF, in the aggregate, an amount more
than three (3) times the Award Received when the amounts paid under this Section
4.2(b) and Section 4.2(a) are combined.

(c) If aggregate Net Sales of the Product exceed $1 billion Dollars on or before
the fifth (5th) anniversary of the First Commercial Sale, Sangamo shall pay to
JDRF within ninety (90) days after such Net Sales are achieved, an additional
royalty equal to the amount of the Award Received.

(d) If aggregate Net Sales of the Product exceed $2 billion Dollars on or before
the fifth (5th) anniversary of the First Commercial Sale, Sangamo shall pay to
JDRF within ninety (90) days after such Net Sales are achieved, an additional
royalty equal to the amount of the Award Received.

4.3 Sales Reports.

4.3.1 In connection with each payment made to JDRF pursuant to Section 4.2 above
with respect to which the amount of Net Sales is relevant, Sangamo shall furnish
or cause to be furnished to JDRF a written sales report setting forth in
reasonable detail amounts received with respect to which Net Sales during such
period were calculated. With respect to sales of the Product invoiced in
Dollars, the Net Sales amounts and the amounts due to JDRF hereunder shall be
expressed in Dollars. With respect to sales of the Product invoiced in a
currency other than Dollars, the Net Sales and amounts due to JDRF hereunder
shall be expressed in the domestic currency of the country in which the sale was
made, together with the Dollar equivalent of the amount payable to JDRF,
calculated by translating foreign currency sales into Dollars in a manner that
is consistent with the then-current foreign currency calculations that Sangamo
employs for purposes of its reporting obligations under the Securities and
Exchange Act of 1934, as amended. If any licensee or sublicensee makes any sales
invoiced in a currency other than its domestic currency, the Net Sales shall be
converted to its domestic currency in accordance with the licensee's or
sublicensee's normal accounting principles. Sangamo shall keep accurate records
in sufficient detail to enable the amounts due hereunder to be determined and to
be verified by JDRF.

4.3.2 Upon the written request of JDRF, at JDRF's expense and not more often
than once a year, Sangamo shall permit an independent accountant selected by
JDRF and reasonably acceptable to Sangamo to have access during normal business
hours to the records of Sangamo from the previous twenty-four month period
(“Audit Period”) as may be reasonably necessary to verify the accuracy of the
report furnished by Sangamo pursuant to Section 4.3.1. Such independent
accountant may examine and audit the records from each Audit Period only once.
Such independent accountants may be required by Sangamo to enter into a
reasonably acceptable confidentiality agreement, and in no event shall such
accountants disclose to JDRF any information, other than the accuracy of reports
and payments made or due hereunder.

4.3.3 In case of any delay in payment by Sangamo to JDRF or by JDRF to Sangamo
not occasioned by force majeure in accordance with Section 11.5, interest shall
be calculated at the lesser of (i) the Prime Rate plus five (5) percentage
points or (ii) the maximum rate allowed by law, calculated from the tenth (10th)
day after the date upon which the applicable payment first becomes due from
Sangamo.

4.4 Royalties to Sangamo. In the event that, pursuant to Section 9.5, the
Interruption License becomes effective and thereafter is maintained by JDRF, in
lieu of any other royalties pursuant to this Agreement (other than royalties or
payments under Section 4.2 previously paid by Sangamo to JDRF in accordance with
this Agreement), the Parties shall share equally, subject to this Section 4.4,
any amount JDRF receives with respect to the Product (including amounts received
in connection with sublicenses of the Interruption License). JDRF's share shall
increase and Sangamo’s share shall decrease by two percent (2%) for each one
million Dollars ($1,000,000) JDRF spends in addition to the Award Received with
respect to the research, development and/or commercialization of the Product
after the Interruption License Effective Date (as defined in Section 9.5(d)),
except that, in no event shall Sangamo’s share decrease below twenty percent
(20%). Thus, for example, if JDRF’s expenditures after the Interruption License
Effective Date are ten million Dollars ($10,000,000), JDRF's share will increase
to seventy percent (70%) and Sangamo’s share will decrease to thirty percent
(30%).

ARTICLE V CONFIDENTIALITY

5.1 Confidentiality.

5.1.1 Definition of Confidential Information. For purposes of this Agreement,
“Confidential Information” shall mean any trade secrets, know-how, confidential
or proprietary information, data and test results relating to the Research
Program and any other knowledge, information, documents or materials, owned,
developed or possessed by Owner (as defined below), whether in tangible or
intangible form, the confidentiality of which Owner takes or has taken
reasonable measures to protect; provided, however, that “Confidential
lnformation” shall not include any information of Owner that: (a) is already
independently known to Recipient (as

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defined below) at the time of its disclosure without any obligations of
confidentiality; (b) becomes publicly known through no wrongful act of
Recipient; (c) is received from a Third Party free to disclose it to Recipient
without any obligations of confidentiality with respect thereto; or (d) is
independently developed by Recipient without use of any Confidential Information
of the Owner; provided, that, in each such instance, Recipient shall bear the
burden of proving that any such information of Owner is not Confidential
Information. Confidential Information of Sangamo shall include without
limitation, investigator brochures, any reports, notices, data, results, case
report forms and regulatory filings generated pursuant to the Research Program.
The terms and conditions of this Agreement shall be the Confidential Information
of both Parties.

5.1.2 Non-Disclosure. During the term of this Agreement and for a period of five
(5) years thereafter, each Party (“Recipient”) shall hold all Confidential
Information it receives or received from the other Party (“Owner”) in strict
confidence, and, other than as expressly provided herein or without first
obtaining the prior written consent of Owner, shall not disclose any
Confidential Information to any Person, except to officers, directors,
employees, consultants, committee members, volunteers, contractors,
subcontractors, licensees, sublicensees, accountants or counsel of Recipient who
have a need to know and who are bound to confidentiality obligations at least as
restrictive as Recipient’s obligations under this Agreement. Recipient shall use
not less than the same degree of care it uses to avoid disclosure of its own
Confidential Information.

5.1.3 Required Disclosure. Notwithstanding Section 5.1.2 above, Recipient’s
disclosure of Confidential Information shall not be prohibited if such
disclosure is required by a valid and existing order of a court of competent
jurisdiction or other governmental body or agency; provided, however, that,
Recipient shall have first given prompt notice to Owner of any possible or
prospective order and Owner shall have been afforded a reasonable opportunity to
prevent or limit such disclosure (the “Recipient Notice Requirement”); provided,
further, that the Recipient Notice Requirement shall not apply to proceedings
which, by applicable law, are of a nature that the existence of such proceedings
may not be disclosed or made public. In the event that Recipient discloses any
Confidential Information pursuant to the immediately preceding sentence,
Recipient shall cooperate with Owner, at Owner's sole cost and expense, in the
prosecution of any appeal that Owner decides to pursue.

5.1.4 No Use of Confidential Information. Recipient hereby agrees and
acknowledges that, other than as provided herein or without first obtaining
Owner’s prior written consent, Recipient shall not use any of Owner's
Confidential Information.

5.2 Publicity; Use of Name.

5.2.1 As soon as practicable after the Effective Date and not later than the
deadline for any required disclosure of the execution of this Agreement, the
Parties shall issue a joint press release announcing the execution of this
Agreement in substantially the same form as the press release attached as
Exhibit D.

5.2.2 Except to the extent already disclosed in the initial press release
referenced in Section 5.2.1 above, and except as may be otherwise provided
herein, neither Party shall issue any press release or make any public
announcement concerning the terms of this Agreement or the transactions
described herein without the prior written consent of the other Party, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, that it shall not be unreasonable for any Party to withhold consent
with respect to any press release or public announcement containing any of such
Party's Confidential Information. This Section 5.2.2 shall not preclude any
Party from issuing press releases or making public announcements if such Party
reasonably believes that any such release or announcement is (a) legally
required by Applicable Laws or (b) required by the rules of any stock exchange
on which such Party’s securities are listed. Sangamo shall accord JDRF the
opportunity to review and comment on any submission of this Agreement and
redaction thereof required to be submitted to the Securities and Exchange
Commission by Sangamo. For clarity, Sangamo shall have the right to issue press
releases without obtaining the consent of JDRF so long as such press releases
contain substantially the same information as contained in Sangamo's Form 8-K
filings made pursuant to the Securities and Exchange Act of 1934, as amended.

5.2.3 In each instance, the Party desiring to issue any press release or to make
any public announcement shall provide the other Party with a written copy of the
proposed release or announcement in sufficient time where practicable prior to
public release to allow such other Party to comment upon such release or
announcement prior to its public release. In addition, each press release and/or
public announcement issued or made pursuant to this Section 5.2, where
practicable, shall include JDRF-approved language acknowledging JDRF’s funding
of a portion of the Research Program.

5.2.4 Except as may be otherwise provided herein, no Party shall have any right,
express or implied, to use in any manner the name or other designation of the
other Party or any other trade name, trademark or logos of the other Party for
any purpose.

5.2.5 Notwithstanding the foregoing or any contrary provision contained herein,
in connection with: (a) any description by JDRF of its research portfolio and of
its industry discovery and development program, and/or (b) JDRF's fundraising
activities, marketing materials and/or reporting requirements, JDRF shall be
entitled to use and/or disclose, and Sangamo hereby pre-approves

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JDRF's use and/or disclosure of: (i) the names “Sangamo,” “Sangamo BioSciences,
Inc.”, Sangamo’s logo and a general description of Sangamo, (ii) the existence
and a general description of the nature of this Agreement in a form previously
agreed upon by the Parties, and (iii) a general description of the nature of the
Research Program in a form previously agreed upon by the Parties. In connection
with: (w) any description of Sangamo’s intellectual property rights and drug
pipeline; (x) Sangamo’s reporting requirements under the Securities and Exchange
Act of l 934, as amended, and the Securities Act of l 933, as amended; (y)
Sangamo’s fundraising activities or marketing materials; and (z) any description
or acknowledgment of JDRF or JDRF funding as required hereunder, Sangamo shall
be entitled to use and/or disclose, and JDRF hereby pre-approves Sangamo’s use
and/or disclosure of: (i) the names “JDRF,” “Juvenile Diabetes Research
Foundation International”, JDRF’s logo and a general description of JDRF in the
context of describing the funding provided by JDRF, (ii) the existence and a
general description of the nature of this Agreement in a form previously agreed
upon by the Parties, and (iii) a general description of the nature of the
Research Program in a form previously agreed upon by the Parties.

ARTICLE VI PUBLICATION

Sangamo shall have the first right to publish, publicly present, or otherwise
make available the results of the Research Plan, including any data necessary
for Third Parties to utilize any new discoveries and information regarding the
surrogate clinical endpoints related to the JDRF Studies and identified by
Sangamo during the Research Program (the “Surrogate Endpoint Data”). In the
event that Sangamo does not exercise its publication rights by submitting within
twelve (12) months after the Research Termination Date a manuscript for
publication, JDRF shall have the right to publish, publicly present, or
otherwise make available the Surrogate Endpoint Data, but only to the extent
that such publication, presentation or availability of the data would not have
an adverse impact on any ongoing or planned development and/or commercialization
of the Product. If JDRF is the publishing party, JDRF will submit a draft of any
proposed manuscript or speech to Sangamo for comments at least sixty (60) days
prior to submission for publication or oral presentation. Sangamo shall notify
JDRF in writing within thirty (30) days of receipt of such draft whether such
draft contains (a) information which Sangamo considers to be Confidential
Information under the provisions of Article V hereof, (b) information that if
published would have an adverse effect on a patent application which Sangamo
intends to file, or (c) information which Sangamo reasonably believes would be
likely to have an adverse impact on the development or commercialization of the
Product. In any such notification, Sangamo shall indicate with specificity its
suggestions regarding the manner and degree to which JDRF may disclose such
information. In the case of item (a) above, JDRF shall not publish the
Confidential Information of Sangamo in violation of Article V of this Agreement.
In the case of item (b) above, Sangamo may request a delay and JDRF shall delay
such publication, for a period not exceeding an additional ninety (90) days, to
permit the timely preparation and filing of a patent application or an
application for a certificate of invention on the information involved. In the
case of item (c) above, if JDRF disagrees with Sangamo’s assessment of the
impact of the publication, then the program coordinator of each Party shall
attempt in good faith to reach a fair and equitable resolution of such
disagreement. If the disagreement is not resolved in this manner within fourteen
(14) days of referral to the respective program coordinators, then the decision
of Sangamo as to publication of any information generated by it, subject always
to the confidentiality provisions of Article V hereof shall be final, provided
that such decision shall be exercised with reasonable regard for the interests
and rights of JDRF. The Parties agree that authorship of any publication will be
determined based on the customary standards then being applied in the relevant
scientific journal. JDRF shall comply with the foregoing publication
requirements in the event that pursuant to Section 9.5, the Interruption License
becomes effective.

Notwithstanding the foregoing, (a) Sangamo intends to advance the body of
general scientific knowledge of Diabetes and its potential therapies and cures,
all in a manner consistent with its general scientific and commercial objectives
in entering into this Agreement with JDRF, and (b) the Parties acknowledge that
Sangamo intends to publish the results of the placebo data from the Research
Program in a major scientific peer reviewed publication as soon as practicable,
following the completion of the Research Program; provided that Sangamo shall
not be obligated to publish any information which Sangamo reasonably believes
would be likely to have an adverse impact on the development or
commercialization of the Product. Sangamo shall acknowledge the financial
support of JDRF in all Research Program publications. In addition, Sangamo
agrees to make available to requesting Third Parties the Surrogate Endpoint Data
without charge but only after twelve (12) months have passed since the Research
Termination Date.

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ARTICLE VII INDEMNIFICATION

7.1 Indemnification by Sangamo. Sangamo shall indemnify, defend and hold
harmless JDRF, its Affiliates, and each of their respective directors, officers,
committee members, volunteers, employees, consultants, agents and
representatives and their respective successors, heirs and assigns (including,
without limitation, the JDRF Designees) (each, a “JDRF Indemnitee”), from and
against any and all claims, suits and demands of Third Parties and losses,
liabilities, damages for personal injury, property damage or otherwise, costs,
penalties, fines and expenses (including court costs and the reasonable fees of
attorneys and other professionals) arising therefrom (collectively “Losses”), to
the extent that such Losses arise from:

(a) the conduct of the Research Program by Sangamo or its Affiliates or their
respective directors, officers, employees, consultants, agents, representatives,
licensees, sublicensees, subcontractors and/or investigators (each, a “Sangamo
Party”) under this Agreement and/or pursuant to one or more agreements between
Sangamo and any Sangamo Party, or any actual or alleged violation of law
resulting therefrom;

(b) the Product (not including any Product developed, manufactured or sold
pursuant to the Interruption License) and/or any claim of infringement or
misappropriation of intellectual property with respect thereto;

(c) Sangamo’s breach of any of its representations, warranties, covenants and/or
obligations under this Agreement, or the negligence or willful misconduct of any
Sangamo Party in connection with Sangamo’s performance of its obligations under
this Agreement; or

(d) Any tort claims of personal injury (including death) arising out of, or in
connection with, Sangamo’s performance of the Research Program.

The above indemnification shall not apply to the extent that any Losses are due
to the gross negligence or willful misconduct of JDRF or the practice of the
Interruption License.

7.2 Indemnification by JDRF. In the event that, pursuant to Section 9.5, the
Interruption License becomes effective, JDRF shall indemnify, defend and hold
harmless Sangamo, its Affiliates, and their respective directors, officers,
employees, consultants, agents and representatives and their respective
successors, heirs and assigns (including, without limitation, the Sangamo
Designees), (each a “Sangamo Indemnitee”), from and against any and all Losses
that arise as a result of (a) practice of the Interruption License or (b) JDRF's
activities after the Interruption License Effective Date and before the
Reversion License Effective Date to the extent that such Losses arise from
JDRF’s breach of any of its obligations under this Agreement, or the negligence
or willful misconduct of JDRF in connection with JDRF’s performance of its
obligations under this Agreement.

The above indemnification shall not apply to the extent that any Losses are due
to the gross negligence or willful misconduct of Sangamo or a Sangamo Party.

7.3 Claims Procedures. The Party claiming indemnity under this Article VII (the
“Indemnified Partv”) shall give written notice to the Party from whom indemnity
is being sought (the “Indemnifying Party”) promptly after learning of the
commencement of the relevant Third Party action, suit or proceeding (the
“Claim”). Subject to this Section 7.3, the Indemnifying Party shall have the
right to assume and manage the defense thereof (with counsel selected by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party),
including the right to settle, compromise and/or litigate with respect to any
such Claim (but only after obtaining the Indemnified Party’s prior written
consent with respect to any proposed settlement, compromise or litigation;
provided, however, that the Indemnifying Party shall not be required to obtain
the Indemnified Party’s prior written consent in connection with any proposed
settlement, compromise or litigation if, in connection with and following any
such settlement, compromise or litigation, the Indemnified Party (a) has no
liability (monetary or otherwise), (b) has not waived any of its rights and has
not admitted to any wrongdoing or guilt, (c) is not subject to any injunction or
other equitable or non-monetary relief, and (d) receives a full and
unconditional release of all applicable claims and liability).

7.4 Participation; Assuming Control of the Defense. Notwithstanding Section 7.3
above, the Indemnified Party may participate in the defense of any Claim at the
Indemnified Party’s sole expense, provided that, (a) the employment of counsel
by the Indemnified Party has been authorized by the Indemnified Party; or (b)
there is a conflict of interest that would prevent an Indemnitee from being
represented by a single law firm in the defense of such action; in each such
instance, the Indemnifying Party shall pay the reasonable fees and expenses of
one law firm serving as counsel for the Indemnified Party, which law firm shall
be subject to the prior consent of the Indemnifying Party, which such consent
shall not be unreasonably withheld, conditioned or delayed.

7.5 Advance Payment of Expenses. The expenses of an Indemnified Party incurred
in defending a Claim shall be paid by the Indemnifying Party as they are
incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an

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undertaking by or on behalf of the Indemnified Party to repay the amount if it
is ultimately determined by a court of competent jurisdiction that such
Indemnified Party is not entitled to be indemnified by the Indemnifying Party.
All costs and expenses incurred by an Indemnified Party in connection with
enforcement of this Article VII also shall be reimbursed by the Indemnifying
Party.

7.6 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY
DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, IN CONNECTION WITH SUCH
PARTY'S PERFORMANCE OR BREACH OF THIS AGREEMENT. NOTWITHSTANDING THE FOREGOING,
NOTHING IN THIS SECTION 7.6 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE
INDEMNIFICATION RIGHTS OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF
CONFIDENTIALITY OBLIGATIONS IN ARTICLE V.

7.7 Insurance. Sangamo shall maintain at its own expense, with a reputable
insurance carrier reasonably acceptable to JDRF, full coverage for Sangamo, its
Affiliates, and their respective employees that is commensurate with a
reasonable estimate of the liability exposure associated with the Research
Program, written on a per occurrence basis, which will name JDRF as an
additional insured, including, without limitation, errors and omissions
insurance encompassing claims relating to the performance and lack of
performance of Sangamo’s obligations under this Agreement and comprehensive
general liability insurance for claims relating to the performance and lack of
performance of Sangamo’s obligations under this Agreement and comprehensive
general liability insurance for claims for damages arising from bodily injury
(including death) and property damages arising out of acts or omissions of a
Sangamo Party which will be specifically endorsed to cover Sangamo’s
indemnification obligations under this Article VII. Maintenance of such
insurance coverage will not relieve Sangamo of any responsibility under this
Agreement for damage in excess of insurance limits or otherwise. On or prior to
the Effective Date, Sangamo shall provide JDRF with an insurance certificate
from insurer(s) evidencing each insurance coverage and the insurer’s agreement
to notify JDRF at least sixty (60) days in advance of any cancellation or
modification of such insurance coverage.

In the event that the Interruption License becomes effective pursuant to Section
9.5, JDRF shall comply with the foregoing insurance requirements and shall
maintain such insurance for as long as necessary to cover any claims that may
arise from JDRF’s activities during the effectiveness of the Interruption
License.

ARTICLE VIII PATENTABLE INVENTIONS

8.1 Ownership. All inventions made and all data and know-how generated solely by
either Party or its Affiliates (directly or through others acting on its
behalf), as determined in accordance with United States laws of inventorship,
prior to and during the term of this Agreement that relates to the Research
Program shall be solely owned by the Party making the invention or generating
the data or know-how, and all Patents claiming such inventions shall be solely
owned by such Party. All inventions made and all data and know-how generated by
both Parties jointly, as determined in accordance with United States laws of
inventorship, prior to and during the term of this Agreement that relate to the
Research Program (a “Joint Invention”), shall be owned jointly, with each Party
having an undivided one-half interest in each Joint Invention and each Patent
claiming a Joint Invention.

8.2 Preparation. Sangamo shall take initial responsibility for the preparation,
filing, prosecution and maintenance of all Sangamo Patents, JDRF Patents, and
any patents and patent applications claiming Joint Inventions. JDRF shall have
the right to review, and Sangamo shall deliver to JDRF, all patent applications
for JDRF Patents or claiming Joint Inventions prior to their filing. With
respect to such patent applications, Sangamo shall include in the Quarterly
Reports delivered to JDRF pursuant to Section 3.2.3(a) the name of each patent
application filed by Sangamo in the United States and other jurisdictions for
such Joint Inventions and/or JDRF Patents, along with a general summary of the
claims made and the jurisdictions of filing.

8.3 Costs. Subject to Section 8.4, Sangamo shall be responsible for all costs
incurred in the preparation, prosecution and maintenance of Sangamo Patents,
JDRF Patents, and Joint Inventions.

8.4 Abandonment.

(a) Notwithstanding any contrary provision contained herein, prior to the
Interruption License Effective Date, before Sangamo (or any Affiliate, licensee,
sublicensee, transferee or successor of Sangamo) abandons any patent or patent
application for any JDRF Patents or claiming any Joint Inventions (including
abandonment for failure to pay any required fees), Sangamo shall promptly notify
JDRF, or cause JDRF to be notified, of such pending abandonment, whereupon JDRF
shall have the right and opportunity to take title to such patent and/or patent
application by agreeing to maintain the issued patent or continue prosecution of
the patent application at JDRF’s own expense.

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(b) Following the Interruption License Effective Date, before Sangamo (or any
Affiliate, licensee, sublicensee, transferee or successor of Sangamo) abandons
any patent or patent application for any JDRF Patents, claiming any Joint
Inventions, or for any Sangamo Patents (including abandonment for failure to pay
any required fees), Sangamo shall promptly notify JDRF, or cause JDRF to be
notified, of such pending abandonment, whereupon JDRF shall have the right and
opportunity to take title to such patent and/or patent application by agreeing
to maintain the issued patent or continue prosecution of the patent application
at JDRF’s own expense. Sangamo shall reasonably cooperate with JDRF to obtain
such consents, on JDRF’s behalf, as may be necessary, advisable and/or
appropriate for JDRF to exercise its rights under this Section 8.4.

ARTICLE IX TERM AND TERMINATION

9.1 Term. This Agreement shall become effective as of the Effective Date and,
unless earlier terminated pursuant to the other provisions of this Article IX,
shall terminate at such time as when there are no longer any payment obligations
owing from either Party to the other Party under Article IV hereto.

9.2 Termination by JDRF With Cause. Notwithstanding any provision contained
herein, JDRF may, without prejudice to any other remedies available to it at law
or in equity, terminate this Agreement if, after the occurrence of a Default (as
defined herein) and Sangamo’s receipt of a written notice from JDRF identifying
such Default, Sangamo fails to cure such Default within sixty (60) days after
Sangamo’s receipt of such notice. The following events shall constitute a
“Default” hereunder:

(a) Any material breach by Sangamo of any applicable foreign, federal, state or
local laws, statutes, rules or regulations in the course of its performance of
the Research Program;

(b) Any material breach or default by Sangamo in the performance of any of its
material covenants or obligations hereunder;

(c) Any representation or warranty made by Sangamo in this Agreement is not true
in any material respects as of the Effective Date; and/or

(d) A case or proceeding (i) under the bankruptcy laws of the United States now
or hereafter in effect is filed against Sangamo or all or substantially all of
its assets and such petition or application is not dismissed within sixty (60)
days after the date of its filing or Sangamo shall file any answer admitting and
not contesting such petition, or (ii) under the bankruptcy laws of the United
States now or hereafter in effect is filed by Sangamo for all or substantially
all of its assets.

For clarity, an Interruption shall not, for the purposes of this Section 9.2, be
considered a material breach or default by Sangamo in the performance of any of
its material covenants or obligations hereunder. JDRF’s remedies in the event of
an Interruption are set forth in Section 9.5 rather than in this Section 9.2.

9.3 Termination for JDRF Breach. Sangamo may, without prejudice to any other
remedies available to it at law or in equity, terminate this Agreement upon
written notice to JDRF in the event JDRF shall have materially breached or
defaulted in the performance of any of its material covenants or obligations
hereunder, and JDRF fails to cure such breach or default within sixty (60) days
after written notice thereof was provided to JDRF by Sangamo.

9.4 General Effect of Termination; Survival.

(a) Termination, relinquishment or expiration of this Agreement for any reason
shall be without prejudice to any rights that shall have accrued to the benefit
of any Party prior to such termination, relinquishment or expiration. Such
termination, relinquishment or expiration shall not relieve any Party from
obligations which are expressly indicated to survive termination of this
Agreement.

(b) If this Agreement is terminated for any reason, all of the Parties’ rights
and obligations under, and/or the provisions contained in, Sections 3.2.1,
3.2.2, 3.2.3(b), and 9.4, Articles V, VI, VII, VIII, and XI shall survive
expiration, termination or relinquishment of this Agreement. If this Agreement
is terminated pursuant to Section 9.2 and no Interruption License is in effect
at the time of such termination, in addition to the provisions specified in the
preceding sentence, the Parties’ rights and obligations under, and/or provisions
contained in Sections 4.2, 4.3, 4.4 and 9.5 shall also survive such termination.
In the event that, pursuant to Section 9.5, the Interruption License becomes
effective prior to termination of this Agreement pursuant to Sections 9.1 or
9.2, in addition to the provisions specified in the first sentence of this
Section 9.4(b), the Parties’ rights and obligations under, and/or provisions
contained in Sections 4.4, 9.5(e), 9.5(g) and 9.5(h) shall survive such
termination.

(c) Sangamo will retain sole ownership of the Sangamo Research Program
Technology.

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9.5 Interruption License.

(a) In the event JDRF determines that an Interruption has occurred, it shall
notify Sangamo in writing of such belief, stating in reasonable detail the basis
for its belief that an Interruption has occurred (the “Interruption Notice”). If
at the time of receipt of the Interruption Notice, Sangamo (i) has not licensed
or otherwise transferred rights to a Third Party to the Sangamo Research Program
Technology in the Field; or (ii) has successfully terminated the rights it
licensed or otherwise transferred to a Third Party to the Sangamo Research
Program Technology in the Field, then Sangamo shall have sixty (60) days after
the receipt of the Interruption Notice to avoid the Interruption License
Effective Date by (x) responding to the Interruption Notice by explaining why it
believes an Interruption has not occurred (the “Interruption Response”); or (y)
resuming Commercially Reasonable Efforts (either itself or through an Affiliate,
collaborator, licensee, sublicensee, transferee, or successor); provided that,
Sangamo may avoid the Interruption License Effective Date by any such resumption
only once.

(b) If at the time of receipt of the Interruption Notice, Sangamo has licensed
or otherwise transferred rights to a Third Party to the Sangamo Research Program
Technology in the Field pursuant to an agreement that includes a provision that
gives Sangamo the right to terminate such Third Party’s rights under the Sangamo
Research Program Technology in the Field upon a final determination that an
Interruption has occurred and not been cured within the applicable time after
the relevant notice, then Sangamo shall have sixty (60) days after the receipt
of the Interruption Notice to avoid the Interruption License Effective Date by
(i) providing an Interruption Response to JDRF; or (ii) commencing and
continuing thereafter commercially reasonable efforts to effect such a
termination. If Sangamo successfully effects such a termination then it shall
have sixty (60) days after the termination effective date to avoid the
Interruption License Effective Date by resuming Commercially Reasonable Efforts
(either itself or through an Affiliate, collaborator, licensee, sublicensee,
transferee, or successor); provided that, Sangamo may avoid the Interruption
License Effective Date by any such resumption only once.

(c) If Sangamo provides an Interruption Response within the sixty (60) day
period set forth in Section 9.5(a) or 9.5(b) and JDRF disagrees with the
Interruption Response, JDRF may resolve such Dispute in accordance with Section
11.2. Sangamo shall have sixty (60) days after a final determination pursuant to
Section 11.2 that an Interruption has occurred (or if earlier a subsequent
written admission by Sangamo that an Interruption has occurred) to avoid the
Interruption License Effective Date by (i) resuming Commercially Reasonable
Efforts (either itself or through an Affiliate, collaborator, licensee,
sublicensee, transferee, or successor); provided that, Sangamo may avoid the
Interruption License Effective Date by any such resumption only once; or (ii) if
Sangamo provided the Interruption Response pursuant Section 9.5(b), commencing
and continuing thereafter commercially reasonable efforts to terminate such
Third Party’s rights under the Sangamo Research Program Technology in the Field
upon a final determination that an Interruption has occurred and not been cured
within the applicable time after the relevant notice. If Sangamo successfully
effects such a termination then it shall have sixty (60) days after the
termination effective date to avoid the Interruption License Effective Date by
resuming Commercially Reasonable Efforts (either itself or through an Affiliate,
collaborator, licensee, sublicensee, transferee, or successor); provided that,
Sangamo may avoid the Interruption License Effective Date by any such resumption
only once.

(d) The “Interruption License Effective Date” shall be the first of the
following events to occur: (i) the expiration of the sixty (60) day period set
forth in Section 9.5(a) without Sangamo having taken any of the actions
specified in Section 9.5(a), (ii) Sangamo’s agreement in writing, following
receipt of the Interruption Notice, that an Interruption has occurred (provided,
however, that none of Sangamo’s written communications pursuant to Section
9.5(b)(ii) or 9.5(c)(ii) shall be considered such an agreement), (iii) the
expiration of the applicable sixty (60) day period set forth in Section 9.5(b)
without Sangamo having taken any of the actions specified in Section 9.5(b), or
(iv) the expiration of the applicable sixty (60) day period set forth in Section
9.5(c) without Sangamo having taken any of the actions specified in Section
9.5(c).

(e) Upon the Interruption License Effective Date, Sangamo shall be deemed to
have automatically granted to JDRF with respect to the Research Program an
exclusive (even as to Sangamo) worldwide license, with the right to sublicense,
under the Sangamo Research Program Technology, to manufacture, have
manufactured, sell, offer to sell and import the Product in the Field (the
“Interruption License”). Sangamo’s obligations pursuant to Sections 3.2.3(d),
4.1 and 4.2 shall expire upon the Interruption License Effective Date.

(f) For clarity, prior to the Interruption License Effective Date, Sangamo shall
be free to license to a Third Party the Sangamo Research Program Technology
(including the grant of exclusive worldwide sublicensable rights under Sangamo
Research Program Technology for such Third Party to research, develop, or
commercialize the Product). In the event that Sangamo commences negotiations
with a Third Party to transfer all of or certain of Sangamo’s rights under the
Sangamo Research Program Technology to such Third Party to develop and
commercialize a Product in the Field, Sangamo shall use best commercial efforts
to include in the agreement a provision that gives Sangamo the right to
terminate such Third Party’s rights under the Sangamo Research Program
Technology in the Field upon a final determination that an Interruption has
occurred and not been cured within the applicable time after the relevant
notice; and solely for purposes of this Section 9.5, the term “Interruption”
with respect to a Sangamo Third Party licensee or transferee shall be defined in
a manner that is as close to the definition contained in Section 1.22 as
Sangamo, by the

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exercise of best commercial efforts, is able to include in the executed
agreement with such Third Party. In the event that Sangamo does not successfully
negotiate such a provision, then Sangamo shall so notify JDRF prior to Sangamo’s
execution of the agreement with such Third Party and, upon receipt of such
notice, JDRF shall no longer have any right to obtain the Interruption License
with respect to the Sangamo Research Program Technology licensed or transferred
to such Third Party.

(g) In connection with this Section 9.5, Sangamo shall deliver to JDRF, within
sixty (60) days of the Interruption License Effective Date, all materials and
data generated in the performance of the Research Program and the Sangamo
Research Program Technology and all other materials and data that Sangamo may
Control that are reasonably required by JDRF to manufacture, have manufactured,
sell, offer to sell and import the Product in the Field, provided that the
foregoing obligations shall apply only to the extent such materials or data are
reasonably accessible and available to Sangamo.

(h) Notwithstanding the foregoing or any contrary provision contained in this
Section 9.5, if, following the Interruption License Effective Date, JDRF ceases
to conduct Commercially Reasonable Efforts with respect to the research,
development and commercialization of the Product in the Field for a period of
one hundred eighty (180) consecutive days then upon the expiration of such
180-day period (the “Reversion License Effective Date”) the Interruption License
shall terminate and, in accordance with the terms and conditions of this
Agreement, JDRF shall be deemed to have automatically granted to Sangamo a
non-exclusive, royalty-free, fully paid, irrevocable, perpetual, worldwide
license (with the right to grant sublicenses), under the JDRF Interruption
License Technology to research, develop, make, have made, use, import, offer for
sale and sell the Product in the Field. In addition, JDRF shall deliver to
Sangamo within sixty (60) days of the Reversion License Effective Date all
materials and data generated by JDRF and all other materials and data that JDRF
may Control that are reasonably required by Sangamo to manufacture, have
manufactured, sell, offer to sell and import the Product in the Field, provided
that the foregoing obligations shall apply only to the extent such materials or
data are reasonably accessible and available to JDRF.

ARTICLE X REPRESENTATIONS AND WARRANTIES

10.1 Representations, Warranties and Covenants of Sangamo.

(a) As of the Effective Date, Sangamo represents and warrants to JDRF that: (i)
this Agreement has been duly executed and delivered by Sangamo and constitutes
tbe valid and binding obligation of Sangamo, enforceable against Sangamo in
accordance with its terms, except as enforceability may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors’ rights generally and by general
equitable principles; (ii) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary action on the part of
Sangamo and its directors and stockholders; (iii) the individual executing this
Agreement on behalf of Sangamo is duly authorized to do so; and (iv) no
provision contained in this Agreement violates any other agreement to which
Sangamo is bound or otherwise subject.

(b) In addition to the foregoing, as of the Effective Date, Sangamo represents,
warrants and covenants to JDRF that (i) while guaranteeing no specific results,
it has the knowledge, skills, expertise and experience to perform the Research
Program or the resources to engage Persons to perform the Research Program who
have such knowledge, skills, expertise and experience; (ii) it has and shall
maintain all licenses, permits and other approvals and authorizations required
for Sangamo to conduct work under the Research Program consistent with its
obligations pursuant to this Agreement and shall do so in conformity with all
applicable laws, statutes, rules and regulations, and the applicable policies of
any and all medical research institutions at which Sangamo is conducting work
under the Research Program (collectively, “Applicable Law”); (iii) it shall
abide by and comply with all of the applicable provisions and conditions set
forth in the “JDRF Policies and Conditions Regarding Funding of Research
Involving Human Clinical Trials,” attached hereto as Exhibit C (the “Policies”),
and Sangamo hereby acknowledges that it is a “Sponsor” within the meaning of
such Policies; (iv) it shall not enter into any arrangement, understanding or
agreement that conflicts in any marmer with this Agreement and Sangamo’s
obligations and responsibilities hereunder; provided that the foregoing shall
not be interpreted as prohibiting Sangamo from entering into an agreement with a
Third Party whereby such Third Party would research, develop, make, have made,
use, import, offer for sale and sell the Product or participate in the Research
Program; and (v) with respect to any Third Party to whom Sangamo subcontracts
the performance of any aspect of the Research Program, Sangamo shall: (A)
subcontract only with reputable entities that possess the knowledge, skills,
expertise, and experience necessary to perform such services; (B) use
Commercially Reasonable Efforts to ensure that each such subcontractor possesses
and shall maintain all necessary licenses, permits, approvals or authorizations
necessary for such subcontractor to conduct its work under the Research Program;
and (C) use Commercially Reasonable Efforts to ensure that each such
subcontractor conducts all work under the Research Program in conformity with
Applicable Law.

10.2 Representations and Warranties of JDRF. As of the Effective Date, JDRF
represents and warrants to Sangamo that: (a) this Agreement has been duly
executed and delivered by JDRF and constitutes the valid and binding obligation
of JDRF, enforceable against JDRF in accordance with its terms, except as
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,

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reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and by general equitable principles; (b) the execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action on the part of JDRF and its directors; (c) the individual
executing this Agreement on behalf of JDRF is duly authorized to do so; and (d)
no provision contained in this Agreement violates any other agreement to which
JDRF is bound or otherwise subject.

ARTICLE XI MISCELLANEOUS PROVISIONS

11.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to any
conflict of laws principles thereof that would cause the application of the laws
of a different jurisdiction.

11.2 Dispute Resolution.

(a) In the event of any dispute, claim or controversy arising out of, relating
to or in any way connected to the interpretation of any provision of this
Agreement, the performance of either Party under this Agreement or any other
matter under this Agreement, including any action in tort, contract or
otherwise, at equity or law (a “Dispute”), either Party may at any time provide
the other Party written notice specifying the terms of such Dispute in
reasonable detail. As soon as practicable after receipt of such notice, the
Chief Executive Officers, or their respective designees, of both JDRF and
Sangamo shall meet at a mutually agreed upon time and location for the purpose
of resolving such Dispute. The Chief Executive Officers, or their respective
designees, shall engage in good faith discussions and/or negotiations for a
period of up to thirty (30) days to resolve the Dispute or negotiate an
interpretation or revision of the applicable portion of this Agreement which is
mutually agreeable to both Parties without the necessity of formal dispute
resolution procedures relating thereto. During the course of such discussion
and/or negotiation, the Parties shall reasonably cooperate in order that each of
the Chief Executive Officers, or their respective designees, may be fully
informed with respect to the issues in the Dispute.

(b) In the event any Dispute is not resolved by the Chief Executive Officers, or
their respective designees, pursuant to Section 11.2(a), then the Parties shall
resolve such Dispute by final and binding arbitration. Arbitration shall be held
in New York, NY, according to the then-current JAMS’ Commercial Rules of
Arbitration (“JAMS’ Rules”), except to the extent such rules are inconsistent
with this Section 11.2. The arbitration will be conducted by one (1) arbitrator
who shall be reasonably acceptable to the Parties and who shall be appointed in
accordance with JAMS’ Rules. If the Parties are unable to select an arbitrator,
then the arbitrator shall be appointed in accordance with JAMS’ Rules. Any
arbitrator chosen hereunder shall have educational training and industry
experience sufficient to demonstrate a reasonable level of relevant scientific,
financial, medical and biotechnology industry knowledge. Within twenty (20) days
of the selection of the arbitrator, each Party shall submit to the arbitrator a
proposed resolution of the Dispute that is the subject of the arbitration (the
“Proposals”). The arbitrator shall thereafter select one of the Proposals so
submitted as the resolution of the Dispute, but may not alter the terms of
either Proposal and may not resolve the Dispute in a manner other than by
selection of one of the submitted Proposals. If a Party fails to submit a
Proposal in accordance with the terms of this Section 11.2(b), the arbitrator
shall select the Proposal of the other Party as the resolution of the Dispute.
The arbitrator shall agree to render its opinion within thirty (30) days of the
final arbitration hearing. No arbitrator shall have the power to award punitive
damages under this Agreement regardless of whether any such damages are
contained in a Proposal, and such award is expressly prohibited. The proceedings
and decisions of the arbitrator shall be confidential, final and binding on all
of the Parties. Judgment on the award so rendered may be entered in a court
having jurisdiction thereof. The Parties shall share the costs of arbitration
according to the decision of the arbitrator. Nothing in this Section 11.2(b)
will preclude either Party from seeking equitable relief in accordance with
Section 11.3 or interim or provisional relief from a court of competent
jurisdiction, including a temporary restraining order, preliminary injunction or
other interim equitable relief, concerning a dispute either prior to or during
any arbitration if necessary to protect the interests of such Party or to
preserve the status quo pending the arbitration proceeding.

11.3 Equitable Relief. The Parties acknowledge and agree that, in the event of a
breach or a threatened breach by either Party of this Agreement for which there
is no adequate remedy at law, the other Party may suffer irreparable damage and
accordingly, shall be entitled to seek injunctive and other equitable remedies
to prevent or restrain such breach or threatened breach, in addition to any
other remedy such Party might have at law or at equity.

11.4 Waiver. No provision of this Agreement may be waived except in writing by
both Parties hereto. No failure or delay by either Party hereto in exercising
any right or remedy hereunder or under applicable law will operate as a waiver
thereof, or a waiver of any right or remedy on any subsequent occasion.

11.5 Force Majeure. Neither Party will be in breach hereof by reason of its
delay in the performance of or failure to perform any of its obligations
hereunder, if that delay or failure is caused by strikes, acts of God or the
public enemy, riots, incendiaries, interference by civil or military
authorities, compliance with governmental priorities for materials, or any fault
beyond its reasonable

18.

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control. In such event Sangamo or JDRF, as the case may be, shall immediately
notify the other Party of such inability and of the period for which such
inability is expected to continue. The Party giving such notice shall thereupon
be excused from such of its obligations under this Agreement as it is thereby
disabled from performing for so long as it is so disabled. To the extent
possible, each Party shall use reasonable efforts to minimize the duration of
any force majeure.

11.6 Severability. Should one or more provisions of this Agreement be or become
invalid, then the Parties hereto shall attempt to agree upon valid provisions in
substitution for the invalid provisions, which in their economic effect come so
close to the invalid provisions that it can be reasonably assumed that the
Parties would have accepted this Agreement with those new provisions. If the
Parties are unable to agree on such valid provisions, the invalidity of such one
or more provisions of this Agreement shall nevertheless not affect the validity
of the Agreement as a whole, unless the invalid provisions are of such essential
importance for this Agreement that it may be reasonably presumed that the
Parties would not have entered into this Agreement without the invalid
provisions.

11.7 Assignment. This Agreement may not be assigned or otherwise transferred by
either Party without the prior written consent of the other Party; provided,
however, that either Party may assign this Agreement, without the consent of the
other Party, (i) to any of its Affiliates, if the assigning Party guarantees the
full performance of its Affiliate’s obligations hereunder; (ii) in connection
with such Party’s merger, consolidation or transfer or sale of all or
substantially all of the assets of such Party; or (iii) to any Third Party to
whom Sangamo grants an exclusive or co-exclusive license to develop the Product
in the Field, provided, that in the case of (ii) or (iii) hereunder, the
successor, surviving entity, purchaser of assets, transferee, or Third Party, as
applicable, expressly assumes in writing such Party’s obligations under this
Agreement. Any purported assignment in contravention of this Section 11.7 shall,
at the option of the non­ assigning Party, be null and void and of no effect. No
assignment shall release either Party from responsibility for the performance of
any accrued obligation of such Party hereunder. This Agreement shall be binding
upon and enforceable against the successor to or any permitted assignees from
either of the Parties hereto.

11.8 Counterparts. This Agreement may be executed in duplicate, each of which
shall be deemed to be original and both of which shall constitute one and the
same Agreement.

11.9 No Agency. Nothing herein contained shall be deemed to create an agency,
joint venture, amalgamation, partnership or similar relationship between JDRF
and Sangamo. Notwithstanding any of the provisions of this Agreement, neither
Party to this Agreement shall at any time enter into, incur, or hold itself out
to Third Parties as having authority to enter into or incur, on behalf of the
other Party, any commitment, expense, or liability whatsoever, and all
contracts, expenses and liabilities in connection with or relating to the
obligations of each Party under this Agreement shall be made, paid, and
undertaken exclusively by such Party on its own behalf and not as an agent or
representative of the other.

11.10 Notice. All communications between the Parties with respect to any of the
provisions of this Agreement will be sent to the addresses set out below, or to
such other addresses as may be designated by one Party to the other by notice
pursuant hereto, by prepaid, certified mail (which shall be deemed received by
the other Party on the fifth (5th) business day following deposit in the mails),
or by facsimile transmission, or other electronic means of communication (which
shall be deemed received when successful transmission is confirmed), with
confirmation by first class letter, postage pre-paid, given by the close of
business on or before the next following business day:

if to JDRF, at:

Richard Insel, M.D.

Executive Vice President for Research

Juvenile Diabetes Research Foundation International

120 Wall Street, 16th Floor

New York, NY 10005-4001

Tel.: (212) 785-9500

Fax: (212) 785-9595

Email: rinsel@jdrf.com

19.

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with a copy to:

Kenneth I. Schaner, Esq.

Bingham McCutchen LLP

3000 K Street, N.W., Suite 300

Washington, D.C. 20007

Tel: (202) 373-6518

Fax: (202) 424-7647

Email: kenneth.schaner@bingham.com

if to Sangamo, at:

Sangamo BioSciences, Inc.

501 Canal Boulevard, Suite A100

Richmond, CA 94804

Attention: Chief Executive Officer

with a copy to:

Marya Postner, Ph.D.

Cooley Godward, LLP

5 Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306

11.11 Headings. The paragraph headings are for convenience only and will not be
deemed to affect in any way the language of the provisions to which they refer.

11.12 Entire Agreement. This Agreement contains the entire understanding of the
Parties relating to the matters referred to herein, and may only be amended by a
written document, duly executed on behalf of the respective Parties.

[Remainder of Page Intentionally Left Blank.]

 

 

 

20.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first Written above.

 

Sangamo BioSciences, Inc.

 

By:

/s/ EDWARD O. LANPHIER

 

Name:

EDWARD O. LANPHIER

 

Title

Chief Executive Officer

 

 

Juvenile Diabetes Research Foundation International

 

 

 

By:

/s/ Richard A. Insel

 

Name:

Richard A. Insel

 

Title:

Executive Vice President for Research

 

 

 

 

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EXECUTION COPY

Exhibit A

Research Plan

 

 

 

 

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Exhibit B

Research Funding and Milestones

I. Payment Schedule for Research Funding: Up to an aggregate amount of Three
Million Dollars ($3,000,000), payable as follows:

 

Milestones

Payment Amount($)

1. Upon the Effective Date, if FDA acceptance of phase 2 plan (102 patients in
two treatment groups) has occurred; or upon FDA acceptance of such Phase 2 plan,
if such acceptance has not yet occurred as of the Effective Date

$500,000

2. Enrollment of the first Qualified Subject

$500,000

3. Enrollment of the 25th Qualified Subject

$500,000

4. Enrollment of the 50th Qualified Subject

$500,000

5. Enrollment of the 100th Qualified Subject

$500,000

6. Receipt by JDRF of the final report of the Primary Statistical Analysis

$500,000

II. Payments pursuant to this Exhibit B shall be paid by JDRF to Sangamo within
forty-five (45) days following JDRF’s receipt from Sangamo of a written
certification setting forth Sangamo’s achievement of the applicable Milestone
unless the JRAC determines, in a meeting held within such forty-five (45) day
period, that such Milestone was not achieved. If JRAC’s vote on such matter
during such meeting is not unanimous, then JDRF shall make the applicable
payment within forty-five (45) days following resolution of such dispute in
Sangamo’s favor.

 

 

 

2.

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Exhibit C

JDRF Policies and Conditions Regarding

Funding of Research Involving Human Clinical Trials

JDRF will fund research involving human clinical trials only if the Sponsor of
the trial can assure JDRF, with a reasonable degree of certainty, that the
following conditions will be met:

●

The research will be conducted in accordance with basic ethical principles as
reflected in the Nuremburg Code, the World Medical Association Declaration of
Helsinki and the Belmont Report;

●

The research will comply with governmental regulatory requirements and guidance,
as applicable;

●

The research will be reviewed and approved by an institutional review board to
assure that risk is minimized and reasonable in relation to anticipated
benefits, that voluntary informed consent is given, and that the rights, safety
and welfare of the subjects are maintained;

●

The investigators will be qualified by training, education and experience to
assume responsibility for the proper conduct of the trial and to comply with
good clinical practices;

●

A qualified physician will be responsible for all trial-related medical
decisions. During and following a subject’s participation in the trial, the
investigator will arrange for adequate medical care to be provided to a subject
for any adverse events, including clinically significant laboratory values,
related to the trial;

●

Conflicts of interest will be disclosed and appropriate action taken;

●

Safety reporting, including serious adverse event reports, will be made in a
timely fashion and in accordance with applicable regulatory requirements;

●

The Sponsor of the trial will implement and maintain quality assurance and
quality control systems with written standard operating procedures in order to
conduct the trial, generate data and document compliance with the protocol, good
clinical practices and applicable regulatory requirements;

●

The clinical trial will be registered in a public registry acceptable to JDRF,
if applicable; and

●

The investigators conducting the research, the responsible institutional review
board and the Sponsor will engage in ongoing compliance and review activity to
promote and assure the integrity of the research.

 

 

 

3.

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Exhibit D

Press Release

4.