exv10w1



 





Exhibit 10.1




     NOTE: Portions of this Exhibit are the subject of a Confidential Treatment Request by the
Registrant to the Securities and Exchange Commission (the “Commission”). Such portions have been
redacted and are marked with a “[***]” in place of the redacted language. The redacted information
has been filed separately with the Commission.



Research and License Agreement




Between




Genentech, Inc.




And




 Sangamo BioSciences, Inc.




 









 





TABLE OF CONTENTS




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





 




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






 




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






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






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








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Research and License Agreement




     This Research and License Agreement (“Agreement”) is made and entered into, effective
as of April 27, 2007 (“Effective Date”), by and between Genentech, Inc., having a principal place
of business at 1 DNA Way, South San Francisco, California 94080, (“Genentech”) and Sangamo
BioSciences, Inc., having a principal place of business at Point Richmond Tech Center, 501 Canal
Boulevard, Suite A100, Richmond, California 94804 (“Sangamo”), (collectively, the “Parties” or
individually, a “Party”).



Recitals




     Whereas, Genentech discovers, develops, manufactures, markets and sells human
pharmaceuticals on a worldwide basis;



     Whereas, Sangamo has certain proprietary technology for modifying genes, which is of
interest to Genentech; and



     Whereas, the Parties desire that Sangamo perform certain research using Sangamo’s
proprietary technology and one of Genentech’s proprietary cell lines in accordance with the
research plan under this Agreement.



Agreement




     Now, therefore, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Genentech and Sangamo agree as follows:



Article 1. Definitions




     Capitalized terms used in this Agreement, whether used in the singular or plural, shall have
the meanings set forth below, unless otherwise specifically indicated herein.



     1.1
“Accept the [***] Evidence” (and grammatical variations thereof) is defined in
the first paragraph under the heading “Genentech Responsibilities (Research Stage 2)” in the
Research Plan. “Accept the [***] Evidence” includes those cases in which Genentech is deemed to
Accept the [***] Evidence (including, without limitation, under Section 2.3).



     1.2 “Affiliate” means, with respect to a particular Party, a person, corporation,
partnership, or other entity that controls, is controlled by or is under common control with such
Party. For the purposes of this definition, the word “control” (including, with correlative
meaning, the terms “controlled by” or “under the common control with”) means (a) the direct or
indirect ownership of fifty percent (50%) or more of the stock having the right to vote for
directors thereof; or (b) the actual power, either directly or indirectly through one or more
intermediaries, to direct the management and policies of such entity, whether by the ownership of at least fifty percent
(50%) of the voting stock of such entity, or by contract or otherwise.



     1.3 “[***] Gene” means a gene or genomic region whose translation product contains a portion that is
greater than 60% identical to a portion, consisting of contiguous residues of at





 




			
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least 30% of the total length, of one or more of the [***] sequences provided in Exhibit B, and any intronic,
transcriptional, or regulatory sequences that modulate the expression of such gene or genomic
region. For the purposes of this definition, alignment shall be performed by Sangamo using tBLASTn
(i.e., Basic Local Alignment Search Tool with a protein query and translated nucleotide database)
and default parameters. Notwithstanding the foregoing, but only for the purposes of the Research
Plan, the research milestone payments (under Section 3.4) and the Success Milestone Payment (under
Section 3.5), [***] Gene means only the CHO gene whose cDNA coding sequence is provided to Sangamo
in the Genentech Deliverables (at beginning of Research Stage 1).




     1.4 “[***] Gene” means a gene or genomic region whose translation product contains
a portion that is greater than 60% identical to a portion, consisting of contiguous residues of at
least 30% of the total length, of one or more of the [***] sequences provided in Exhibit B, and any
intronic, transcriptional, or regulatory sequences that modulate the expression of such gene or
genomic region. For the purposes of this definition, alignment shall be performed by Sangamo using
tBLASTn (i.e., Basic Local Alignment Search Tool with a protein query and translated nucleotide
database) and default parameters. Notwithstanding the foregoing, but only for the purposes of the
Research Plan, the research milestone payments (under Section 3.4) and the Success Milestone
Payment (under Section 3.5), [***] Gene means only the CHO gene whose cDNA coding sequence is
provided to Sangamo in the Genentech Deliverables (at beginning of Research Stage 1).



     1.5 “BLA” means a Biologics License Application or other such application (other
than a supplemental application) filed with the U.S. Food and Drug Administration (or any successor
entity thereto performing similar functions) for the purpose of obtaining Marketing Approval for a
Licensed Product in the United States.



     1.6 “Caltech Agreement” means the Third Party License between Sangamo and the
California Institute of Technology, dated November 1, 2003, as amended as of the Effective Date,
and prior to any amendments after the Effective Date.



     1.7 “CHO” means Chinese hamster ovary.



     1.8 “Collaboration Partner” means, with respect to a given Licensed Product, a
Third Party to which Genentech has granted a license to use, sell, offer for sale and/or import
such Licensed Product, whether or not such license includes the right to make such Licensed
Product.



     1.9 “Commercially Diligent Efforts” means, (a) with respect to Sangamo, efforts
and resources comparable to those expended by Sangamo on its projects for a Third Party of a
similar nature (i.e., protein production projects) and (b) with respect to Genentech, efforts and
resources comparable to those expended by Genentech on its internal process development projects of
comparable value to Genentech.



     1.10 “Confidential Information” means a Party’s nonpublic information that is disclosed to the other Party in connection
with this Agreement (including, without limitation, information regarding such Party’s research,
technology, assays, protocols, methods, processes,





 




			
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data, products and business information or objectives), provided that any such information disclosed in written, electronic or other tangible
form is marked as “confidential” or with a similar legend. Nonpublic information of a Party that
is disclosed other than in tangible form (e.g., disclosed orally or by observation of the other
Party) shall be considered Confidential Information of such Party only if so identified in writing
to the other Party within thirty (30) days after initial disclosure and such writing identifies
such Confidential Information with particularity. Notwithstanding the foregoing marking
requirement, Genentech’s Confidential Information shall include (a) the identity of the Designated
Genes as the focus of this Agreement; (b) Genentech’s interest in the Designated Genes as potential
targets for modification to enhance the protein production of cell lines; (c) the Research Plan;
(d) the Research Results; and (e) all information in the Genentech Deliverables, whether or not any
of the foregoing information in (a) through (e) is so marked. The terms and conditions of this
Agreement (including, without limitation, the financial terms) shall be the Confidential
Information of both Parties.




     1.11 “Confidentiality Agreement” is defined in Section 6.5.



     1.12 “Controlled by” means the rightful possession by a Party of the ability to
grant a license, sublicense or other right to exploit, as provided in this Agreement, without
violating the terms of any agreement with any Third Party.



     1.13 “Covering” (and grammatical variations thereof) means that, with respect to a given Licensed Product, a
protein contained in such Licensed Product was expressed by a Modified Cell Line and (a) the making
or use of such Modified Cell Line fell within the scope of a Valid Claim (in the country of such
making or use) at the time of such making or use; and/or (b) if such Modified Cell Line is a ZFN
Modified Cell Line, the making or use of a ZFN Reagent used to create such Modified Cell Line fell
within the scope of a Valid Claim (in the country of such making or use) at the time of such making
or use.



     1.14 “[***] Evidence” is defined under the heading “Sangamo Deliverables (at end
of Research Stage 2)” in the Research Plan.



     1.15 “Delivery Days to Genentech” means the number of days in the period starting
on the Effective Date and ending on the date on which Genentech has received all of the [***]
Evidence for both Designated Genes (regardless of how much time lapses before Genentech Accepts the
[***] Evidence). If Genentech does not ultimately Accept the [***] Evidence for both Designated
Genes, the Delivery Days to Genentech shall be deemed to be zero.



     1.16 “Designated Gene” means [***].



     1.17 “Donor Sequence” means, with respect to a given Designated Gene, a DNA sequence sharing homology with
sequences upstream and downstream of a ZFN cutting site in such Designated Gene, where such
sequences are of sufficient length [***] to allow homologous recombination to occur at an
efficiency of [***]. The Donor Sequence for a given Designated Gene shall also contain a DNA
sequence for insertion into such Designated Gene via homologous recombination, and such DNA
sequence may contain [***], as agreed to by the Liaisons.





 




			
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     1.18 “Executive” means, in the case of Sangamo, its Chief Executive Officer and,
in the case of Genentech, a Senior Vice President, or their respective designees. Notwithstanding
the foregoing, in the event of a dispute arising under Section 2.3(c), “Executive” means, in the
case of Sangamo, its Chief Scientific Officer and, in the case of Genentech, its Senior Vice
President of Research Drug Discovery or its Executive Vice President of Research.



     1.19 “Existing Third Party Licenses” means the Caltech Agreement, the JHU
Agreement, the MIT Agreement, the Scripps Agreement and the Utah Agreement.



     1.20 “First Commercial Sale” means the first bona fide commercial sale of a
product in a country following Marketing Approval for such product in such country by or under
authority of Genentech or its sublicensees.



     1.21 “Functional [***]” (and grammatical variations thereof) means the targeted
alteration of DNA sequences in [***] of a Designated Gene, where such alteration [***].



     1.22 “Genentech CHO Cell Line” means the CHO cell line provided to Sangamo in the
Genentech Deliverables.



     1.23 “Genentech CHO DNA Extract” means the extract of purified genomic DNA from
the Genentech CHO Cell Line that is provided to Sangamo in the Genentech Deliverables.



     1.24 “Genentech Deliverables” means those materials, information, reports and
other items that Genentech provides to Sangamo under this Agreement including, without limitation,
those identified under the heading “Genentech Deliverables” in the various Research Stages of the
Research Plan.



     1.25 “Genentech License” is defined in Section 5.1(a).



     1.26 “Genentech Materials” means tangible materials included in the Genentech
Deliverables including, without limitation, the Genentech CHO Cell Line and the Genentech CHO DNA
Extract. Genentech Materials also include tangible biological materials derived physically from
Genentech Materials including, without limitation, ZFN Modified Cell Lines derived from the
Genentech CHO Cell Line or from another Genentech proprietary cell line.



     1.27 “Identified Patents” means those patents and patent applications identified
on Exhibit C (including those owned and those in-licensed by Sangamo).



     1.28 “Improved ZFN Reagent” means a ZFN Reagent that incorporates or is made using
an Improvement.



     1.29 “Improvement” means any improvement made by or on behalf of Sangamo during the term of the Agreement
(whether or not such improvement is patentable) to ZFNs and associated reagents (including, without
limitation, expression plasmids and Donor Sequences) and/or Sangamo Know-How (including
methodologies/protocols for creating ZFN Modified Cell Lines), where such improvement would improve
by [***] the (a) efficiency of creating ZFN Modified Cell Lines; (b) time taken to create ZFN
Modified Cell Lines; and/or (c) activity of any ZFN Reagent. For purposes of this definition,
“efficiency” refers to: (i) transfer





 




			
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efficiency, in terms of percent of cells that uptake ZFN
Reagents by transfection or comparable procedure; or (ii) frequency of targeted alteration in a
Designated Gene within a population of cells, after delivery of ZFN Reagent(s) to such population.
For purposes of this definition, “time taken” refers to the time taken from delivery of a ZFN
Reagent(s) to a cell line to the identification of a clone in which a Designated Gene has been
Functionally [***]. For purposes of this definition, “activity” refers to: (i) DNA binding
activity or strength of the DNA binding domain of a ZFN; (ii) DNA cleavage activity of the nuclease
domain of a ZFN Reagent; (iii) in vivo activity in terms of percent of cells in which a Designated
Gene has been Functionally [***], after delivery of ZFN Reagent(s) to such cells; or (iv) frequency
of homologous recombination with Donor Sequences.




     1.30 “Invention” is defined in Section 4.1.



     1.31 “JHU Agreement” means the Third Party License between Sangamo and Johns
Hopkins University, dated June 29, 1995, as amended as of the Effective Date, and prior to any
amendments after the Effective Date.



     1.32 “Know-How” means information or materials including, without limitation,
sequence information, data, assays, protocols, methods, processes, techniques, models, designs,
libraries and trade secrets.



     1.33 “Liaison” is defined in Section 2.1.



     1.34 “Licensed Product” means a product that contains a protein expressed by a
Modified Cell Line.



     1.35 “Marketing Approval” means all approvals, licenses, registrations or
authorizations of any federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the manufacturing, use, storage, import, transport and sale of a product in a regulatory
jurisdiction. For countries where governmental approval is required for pricing or reimbursement
for such product to be reimbursed by national health insurance, “Marketing Approval” shall not be
deemed to occur until such pricing or reimbursement approval is obtained.



     1.36 “Milestone Event” means a milestone event identified in the table in Section
3.6(b).



     1.37 “Milestone Payment” means a milestone payment identified in the table in
Section 3.6(b).



     1.38 “MIT Agreement” means the Third Party License between Sangamo and the
Massachusetts Institute of Technology, dated May 9, 1996, as amended as of the Effective Date, and
prior to any amendments after the Effective Date.



     1.39 “Modified Cell Line” means a ZFN Modified Cell Line or an Other Modified Cell Line.





 




			
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     1.40 “Modified Genentech CHO Cell Line” means a ZFN Modified Cell Line derived
from the Genentech CHO Cell Line.



     1.41 “Other Modified Cell Line” means a cell line that contains one or more
targeted alterations in the genomic DNA (when compared with the parental cell line from which it
was derived) of either or both of the Designated Genes, where no alterations in the genomic DNA of
such cell line are the result of using ZFN Reagents.



     1.42 “Patents” means all United States and foreign patents and patent applications
and any patents issuing therefrom, and any reissues, extensions, registrations, continuations,
divisions, continuations-in-part, reexaminations, substitutions or renewals thereof, and
supplementary protection certificates based thereon.



     1.43 “Phase I Clinical Trial” means a human clinical trial, the principal purpose
of which is preliminary determination of safety in healthy individuals or patients as described in
21 C.F.R. §312.21, or a similar clinical study in a country other than the United States.



     1.44 “Phase III Clinical Trial” means a human clinical trial that is prospectively
designed to demonstrate statistically whether a product is safe and effective for use in humans in
a manner sufficient to obtain regulatory approval to market such product in patients having the
disease or condition being studied as described in 21 C.F.R. §312.21, or a similar clinical study
in a country other than the United States.



     1.45 “Research” means the research activities set forth in the Research Plan.



     1.46 “Research Period” means the period during which research activities under the
Research Plan are ongoing.



     1.47 “Research Plan” means the plan for the research activities to be performed by
the Parties under this Agreement, as outlined in Exhibit A.



     1.48 “Research Results” means all (a) data (including, without limitation, the
underlying data, summarized data and reports); and (b) Know-How related specifically to the
Genentech Materials, in each case, generated in the course of and/or drawn from the Research by
either Party.



     1.49 “Research Stage” means a particular stage of the Research, as identified in
the Research Plan.



     1.50 “Sangamo Deliverables” means those materials, information, reports and other
items that Sangamo provides to Genentech under this Agreement including, without limitation, those
identified under the heading of “Sangamo Deliverables” in the various Research Stages of the
Research Plan.



     1.51 “Sangamo IP Rights” means Sangamo’s intellectual property rights in the
Sangamo Know-How and the Sangamo Patents.




-6-









 










     1.52 “Sangamo Know-How” means Know-How that is Controlled by Sangamo, existing as
of the Effective Date or thereafter, to the extent necessary or reasonably useful to make or use
(including for validation purposes) ZFN Reagents and/or ZFN Modified Cell Lines.



     1.53 “Sangamo Patents” means Patents that are Controlled by Sangamo, existing as
of the Effective Date or thereafter, having one or more claims that encompass (a) ZFN Reagents
and/or ZFN Modified Cell Lines; and/or (b) the making and/or use of ZFN Reagents and/or ZFN
Modified Cell Lines. Sangamo Patents include, without limitation, the Identified Patents.



     1.54 “Scripps Agreement” means the Third Party License between Sangamo and the
Scripps Research Institute, dated March 14, 2000, prior to any amendments after the Effective Date.



     1.55 “Select Sangamo Licensors” means the Massachusetts Institute of Technology
and its trustees, directors, officers, employees and affiliates, and Johns Hopkins University and
its trustees, officers, employees, students and affiliates.



     1.56 “Sublicense Agreement” is defined in Section 5.1(c).



     1.57 “Success Milestone Payment” is defined in Section 3.5.



     1.58 “Third Party” means any entity other than Sangamo or Genentech.



     1.59 “Third Party License” is defined in Section 5.4(a).



     1.60 “Utah Agreement” means the Third Party License between Sangamo and the
University of Utah Research Foundation, dated September 8, 2004, as amended as of the Effective
Date, and prior to any amendments after the Effective Date.



     1.61 “Valid Claim” means a claim of an issued and unexpired patent that (a) is
within the Sangamo Patents; and (b) has not been found to be unpatentable, invalid or unenforceable
by a decision of a court or other authority in the country of the patent, from which decision no
appeal is taken or can be taken.



     1.62 “ZFN” means a (a) zinc-finger nuclease protein or (b) nucleic acid coding
sequence that encodes such a nuclease.



     1.63 “ZFN Modified Cell Line” means a cell line that contains one or more targeted
alterations in the genomic DNA (when compared with the parental cell line from which it was
derived) of either or both of the Designated Genes, where at least one (1) of such alterations in
such Designated Genes is the result of using ZFN Reagents.



     1.64 “ZFN Reagent” means, with respect to a given Designated Gene, (a) a ZFN that
specifically targets such Designated Gene; and/or (b) any Donor Sequence for such Designated Gene,
in each case, where such ZFN and/or Donor Sequence is one that is provided by Sangamo to Genentech
under this Agreement. ZFN Reagents also include Improved ZFN Reagents and copies of ZFN Reagents,
whether made by Sangamo, Genentech or a Third Party.




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Article 2. Research Program




     2.1 Liaisons. Promptly following the Effective Date, each Party shall designate
an individual to act as the primary contact for such Party for matters related to this Agreement
(referred to in this Agreement as such Party’s “Liaison”), unless another contact is expressly
provided herein. Until the completion of the activities in Research Stage 2, the Liaisons shall
schedule teleconferences or meetings at least every four (4) weeks or as otherwise agreed. In
addition, at any time during the Research Period, upon Genentech’s reasonable request, the Parties
shall discuss the results of activities under the Research Plan thus far obtained by telephone or
as otherwise agreed.



     2.2 Diligence; Decision Making; Research Plan. Each Party shall perform its
respective obligations under the Research Plan using Commercially Diligent Efforts. Sangamo’s
Liaison shall have final decision making authority with respect to [***]; Genentech’s Liaison shall
have final decision making authority with respect to [***]. No change in the Research Plan or
funding shall be permitted without the prior written agreement of the Parties. In the event of any
conflict or inconsistency between the main body of this Agreement and the Research Plan, the terms
and conditions of the main body shall prevail.



     2.3 [***] Evidence.



          (a) Review and Notice. As set forth under the heading “Genentech Responsibilities
(Research Stage 2)” in the Research Plan, Genentech shall review the [***] Evidence for a given
Designated Gene. Within three (3) weeks after receipt of such [***] Evidence (for purposes of this
Section 2.3, the “Review Period”), Genentech shall notify Sangamo as to whether or not Genentech
Accepts such [***] Evidence. If Genentech does not notify Sangamo as to whether or not it Accepts
such [***] Evidence by the end of such Review Period, Sangamo shall send a reminder notice to
Genentech that a response is due, and the initial Review Period shall be automatically extended
until the date that is one (1) week from the date Sangamo’s reminder notice is received by
Genentech. If Genentech does not notify Sangamo as to whether or not it Accepts such [***]
Evidence by the end of such extended Review Period, Genentech shall be deemed to Accept such [***]
Evidence.




          (b) Rejection of [***] Evidence. If Genentech notifies Sangamo under Section
2.3(a) that Genentech does not Accept such [***] Evidence, Genentech’s notice shall specifically
identify the reason(s) for the rejection. If such rejection is because Sangamo did not provide all
of the required [***] Evidence, and Sangamo does not dispute such rejection, Sangamo shall provide
the missing [***]Evidence and the initial Review Period (and review procedures under Section
2.3(a)) shall begin again upon Genentech’s receipt of such additional [***] Evidence.




          (c) Disputed Rejection of [***] Evidence. In the event that Sangamo believes that
Genentech’s rejection (for any reason) of given [***] Evidence is not justified, the Parties shall
attempt to resolve such dispute through amicable discussions between the Parties’ respective
Liaisons. In the event that the Liaisons are unable to resolve such dispute within [***] weeks
after Genentech’s notice of rejection, [***].






 




			
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          (d) Other Research Stage 2 Sangamo Deliverables. Unless and until Genentech
Accepts the [***] Evidence with respect to a given Designated Gene, Sangamo shall not have any
obligation to provide to Genentech those ZFN Reagents and Modified Genentech CHO Cell Lines for
such Designated Gene, or any Sangamo Know-How or training, as described under the heading “Sangamo
Deliverables (at end of Research Stage 2)” in the Research Plan for such Designated Gene.




     2.4 Non-Exclusive Relationship.



          (a) ZFN Reagents and ZFN Modified Cell Lines. Excluding Modified Genentech CHO
Cell Lines, and subject to this Section 2.4 and other provisions of this Agreement, Sangamo retains
the right to (i) make and use ZFN Reagents and ZFN Modified Cell Lines for itself and others; (ii)
sell or otherwise transfer ZFN Reagents and ZFN Modified Cell Lines to Third Parties; and (iii)
grant licenses to Third Parties with respect to ZFN Reagents and ZFN Modified Cell Lines.




          (b) Delivery Times to Third Parties. With respect to ZFN Reagents other than
Improved ZFN Reagents, Sangamo shall not provide such ZFN Reagents to any Third Party [***].
Further, Sangamo shall not provide Improved ZFN Reagents to any Third Party [***]; after the end of
such period, Sangamo may provide Improved ZFN Reagents to Third Parties at any time. For clarity,
in the event that Genentech does not ultimately Accept the [***] Evidence for [***], this Section
2.4(b) shall place no restriction on Sangamo’s ability to provide ZFN Reagents (including Improved
ZFN Reagents) to Third Parties.




          (c) [***]. Sangamo shall not provide any ZFN Reagents and/or grant licenses under
the Sangamo IP Rights with respect to the Designated Genes that are [***]. Any election to make
such substitution shall be made by Genentech (if at all) in writing within thirty (30) days after
Genentech receives such notice. If such substitution results in
[***],
the amount of [***] within thirty (30) days after
Sangamo’s receipt of Genentech’s written election to make such substitution. If [***]
 the amount of [***] shall be [***] under this Agreement.




     2.5 Improvements.



          (a) Notices; Payments to Third Parties. During the Research Period, Sangamo shall notify
Genentech of any Improvements at least on a [***] basis; thereafter, such notice shall be at least
on a [***] basis. Such notice for a given Improvement shall (i) identify the [***] and (ii)
include, if applicable, the same notice that Sangamo would provide under Section 2.5(d).
Thereafter, Genentech may request that Sangamo provide Improvements to Genentech by notifying
Sangamo of the particular Improvement(s) being requested. [***]. Nothing in this Section 2.5
shall be interpreted as obligating Sangamo to take any action that would constitute a breach of any
agreement with any Third Party.






 




			
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          (b) Provision of Improvements. If Sangamo makes an Improvement to a ZFN Reagent
for a Designated Gene, Sangamo shall provide the applicable Improved ZFN Reagent to Genentech
([***])). If Sangamo makes an Improvement that is not to a ZFN Reagent for a Designated Gene,
[***]. If Sangamo makes an Improvement to methodologies/protocols for using ZFN Reagents, Sangamo
shall provide such methodologies/protocols to Genentech. Sangamo shall also provide to Genentech
any and all Sangamo Know-How that is necessary to enable Genentech to use Improved ZFN Reagents to
create ZFN Modified Cell Lines. Other than [***] agreed to by Genentech under Section 2.5(a), any
Improved ZFN Reagents, materials or Sangamo Know-How provided to Genentech under this Section
2.5(b) shall be [***] to Genentech and shall be provided promptly after Genentech’s request for a
particular Improvement under Section 2.5(a).




          (c) Training. If requested by Genentech, for each Improvement, Sangamo shall
provide to Genentech researcher(s) (at Sangamo’s research site in Richmond, CA) up to [***] of
training in the making and use of Improved ZFN Reagents at Sangamo’s then current FTE (i.e., full
time equivalent) rates.




          (d) Notice of Third Party IP. Sangamo shall promptly notify Genentech if Sangamo
learns of any Third Party intellectual property that, in Sangamo’s reasonable opinion, could
potentially be infringed by the making or use of an Improvement or an Improved ZFN Reagent provided
to Genentech under Section 2.5(b).




Article 3. Fees and Milestone Payments




     3.1 Payments Generally. Each payment due under this Article 3 (including, without
limitation, Milestone Payments) shall be paid to Sangamo within [***] days of receipt of an invoice
from Sangamo to be sent to Genentech following the achievement of the event triggering such
payment. All invoices shall identify the event triggering the payment being invoiced and, unless
otherwise requested by Genentech in writing, shall be sent to Genentech at the address in the
preamble of this Agreement, to the attention of Group Controller, [***]. All payments due under
this Agreement shall be paid in U.S. dollars in immediately available funds by wire transfer to an
account to be identified by the payee and shall be non-refundable and non-creditable against any
other payment due Sangamo under this Agreement, except as provided under Section 2.4(c).



     3.2 Up-Front Fee. Upon the signing of this Agreement by both Parties, Genentech
shall pay to Sangamo an up-front fee of $[***].



     3.3 Technology Access Fees. Three (3) months after the Effective Date, Genentech
shall pay to Sangamo an initial technology access fee of $[***]. Thereafter, on each anniversary
of the Effective Date (starting with the first anniversary) prior to the First Commercial Sale of
the first Licensed Product, Genentech shall pay to Sangamo an annual technology access fee of
$[***].



     3.4
Research Milestone Payments. For each Designated Gene, if Genentech (a) [***] for such Designated Gene; (b) [***] for
such Designated Gene; and (c) [***] for such Designated Gene, Genentech shall notify Sangamo
(within [***] days of the achievement of all





 




			
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of such events) and pay to Sangamo a research milestone payment of $[***].
Notwithstanding the payment provisions of Section 3.1, if the [***], such payment shall not be due
until [***] days after Genentech’s receipt of replacement ZFN Reagents that are not defective.




     3.5 Success Milestone Payment. Upon Genentech’s successful in-house generation
[***], Genentech shall notify Sangamo (within [***] days of the achievement of such event) and pay
to Sangamo a success milestone payment of $[***] (“Success Milestone Payment”); if Genentech,
despite its Commercially Diligent Efforts, does not [***], no Success Milestone Payment shall be
due.



     3.6 Development and Commercial Milestone Payments.



          (a) Payments Generally. Upon the first achievement of each Milestone Event with
respect to a given Licensed Product by or on behalf of Genentech (or a Collaboration Partner),
Genentech shall notify Sangamo (within [***] days of when Genentech becomes aware of the
achievement of such event) and pay (or cause to be paid) to Sangamo the corresponding Milestone
Payment, subject to the other provisions of this Section 3.6. For purposes of this Agreement, a
given Licensed Product shall be treated as different from another Licensed Product if the marketing
of each of such Licensed Products in the United States would require separate BLA submissions.




          (b) Milestone Events and Milestone Payments.




	 	 	 
	Milestone Event	 	Milestone Payment
	(#1)[***]

	 	$[***]
	(#2) [***]

	 	$[***]
	(#3) [***]

	 	$[***]
	(#4) [***]

	 	$[***]
	(#5) [***]

	 	$[***]
	(#6) [***]

	 	$[***]






          (c) Term of Milestone Payment Obligation. Genentech’s obligation to make
Milestone Payments for a given Licensed Product under this Section 3.6 shall be in accordance with
the following:





(i) [***]; or




(ii) [***].



          (d) Retroactive Payments. [***]




          (e) Single Milestone Payment. In no event shall a particular Milestone Payment be due to
Sangamo more than once with respect to a given Licensed Product, even if






 




			
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such Licensed Product
contains more than one (1) protein expressed by a Modified Cell Line or is Covered by more than one
Valid Claim.




     3.7 Taxes. Each Party shall comply with applicable laws and regulations regarding
filing and reporting for income tax purposes. Neither Party shall treat their relationship under
this Agreement as a pass through entity for tax purposes. All payments made under this Agreement
shall be free and clear of any and all taxes, duties, levies, fees or other charges, except for
withholding taxes. Each Party shall be entitled to deduct from its payments to the other Party
under this Agreement the amount of any withholding taxes required to be withheld, to the extent
paid to the appropriate governmental authority on behalf of the other Party (and not refunded or
reimbursed). Each Party shall deliver to the other Party, upon request, proof of payment of all
such withholding taxes. Each Party shall provide reasonable assistance to the other Party in
seeking any benefits available to such Party with respect to government tax withholdings by any
relevant law, regulation or double tax treaty.



Article 4. Intellectual Property




     4.1 Disclosure of Inventions. “Invention” means any invention or discovery
(including any Know-How), whether or not patentable, that is discovered, conceived or reduced to
practice in the course of performing activities under the Research Plan. Sangamo shall promptly
disclose to Genentech Inventions that are discovered, conceived or reduced to practice by or on
behalf of Sangamo (whether solely or jointly with another party).



     4.2 Ownership of Inventions; Cooperation. Except as otherwise expressly provided
in this Agreement, ownership of Inventions will follow inventorship, as determined by the
respective patent counsel of the Parties in accordance with United States patent law. Each Party
shall reasonably cooperate with and assist the other Party, at such other Party’s request, in
connection with the filing and prosecution of patent applications for Inventions owned by such
other Party including, without limitation, by making scientists and scientific records reasonably
available to such other Party.



     4.3 Obtaining Patents. Sangamo shall, at its expense, use commercially reasonable
efforts to obtain patent protection covering (a) the ZFN Reagents (other than Improved ZFN
Reagents); (b) the use of such ZFN Reagents in CHO cell lines to create ZFN Modified Cell Lines;
and (c) ZFN Modified Cell Lines. Sangamo may, at its sole discretion, use the Research Results to
fulfill its obligations
under the preceding sentence. Further, in consultation with Genentech, Sangamo shall, at its
expense, use commercially reasonable efforts to file a patent application that specifically claims
 [***]. Sangamo shall assign any such application to Genentech, and Genentech shall control
prosecution of such application.



     4.4
Other Genentech Owned Inventions. If Sangamo files any patent application that claims an invention that is specifically
related to the Genentech CHO Cell Line or the Genentech CHO DNA Extract (including sequence
information derived therefrom), and such invention is not generally applicable to CHO cells or CHO
DNA, Sangamo shall (a) cancel any claims to such invention in such patent application; (b) file
such claims in a subsequent divisional or continuation application; (c) assign such subsequent
application to Genentech; and (d) transfer control of prosecution of such subsequent application to
Genentech. If the Parties





 




			
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disagree, Genentech shall bear the burden of demonstrating that such
invention is specifically related to the Genentech CHO Cell Line or the Genentech CHO DNA Extract
and is not generally applicable to CHO cells or CHO DNA.




     4.5 Enforcement of Sangamo Patents. If either Party learns of any alleged
infringement of any Sangamo Patents by a Third Party’s making of Licensed Products for commercial
purposes, that Party shall promptly notify the other Party of such alleged infringement. Sangamo
shall retain the sole right, at its sole discretion, to enforce the Sangamo Patents against such
alleged Third Party infringers. However, if Sangamo fails to abate any such alleged infringement
of the Sangamo Patents involving modification of the genomic DNA of either or both of the
Designated Genes in a manufacturing cell line within [***] after receipt of notice (by either
Party) under this Section 4.5, Genentech shall be entitled to reduce the Milestone Payments by
[***] of the payments that would otherwise be due until such time as Sangamo abates such
infringement or until a final determination regarding such alleged infringement has been reached
(i.e., a final non-appealable court action or settlement).



Article 5. Licenses




     5.1 License to Genentech.



          (a) Genentech License. Sangamo hereby grants to Genentech a non-exclusive,
worldwide, sublicensable (in accordance with Section 5.1(b)) license, under the Sangamo IP Rights,
(i) to make, use and import ZFN Reagents (and any associated expression plasmids provided by
Sangamo to Genentech under this Agreement) solely for the purpose of altering the genomic DNA of
either or both of the Designated Genes in a cell line to create ZFN Modified Cell Lines; (ii) to
alter the genomic DNA of either or both of the Designated Genes in a cell line to create Modified
Cell Lines; and (iii) to make, use and import Modified Cell Lines created under clauses (i) and
(ii) solely for the purpose of making Licensed Products. The foregoing license is referred to in
this Agreement as the “Genentech License.” Notwithstanding anything
to the contrary in this Agreement, the Genentech License does not include a license to alter
any genomic DNA other than the genomic DNA of a Designated Gene. The Genentech License is subject
to the provisions of Section 5.4(a).




          (b) Right to Grant Sublicenses. Subject to Section 5.1(d), Genentech has the right to grant
sublicenses under the Genentech License to a Third Party(ies) if (i) such sublicense is related to
particular Licensed Product(s) that were the subject of Genentech’s research and/or development or
were in-licensed by Genentech (and not related to Licensed Products in general); and (ii) Genentech
has previously granted or concurrently grants (i.e., together with the grant of such sublicense) to
such Third Party a license, under intellectual property rights other than the Genentech License,
related to such particular Licensed Product(s) or to product(s) that contain the same protein(s) as
such particular Licensed Product(s). Subject to Section 5.1(d), any such sublicense may be further
sublicensed by a sublicensee to multiple tiers of sublicensees, subject to the same requirement
regarding a previously or concurrently granted license by such sublicensee. In addition, Genentech
has the right to grant sublicenses under the Genentech License to a Third Party(ies) if Genentech
receives the prior written consent of Sangamo, which shall not be unreasonably withheld.






 




			
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          (c) Requirements for Sublicense Agreements. Each agreement granting a sublicense
under the Genentech License (each such agreement, a “Sublicense Agreement”) shall require that the
relevant sublicensee agrees in writing that the sublicense granted in such Sublicense Agreement is
subject to those terms and conditions of the Third Party Licenses that are set forth in Exhibit E
mutatis mutandis (e.g., as if applicable references to Genentech, “this Agreement” and the
“Genentech License” were, respectively, references to such sublicensee, such Sublicense Agreement
and such sublicense) with respect to each Third Party License sublicensed thereunder. Genentech
shall provide to Sangamo copies of any Sublicense Agreements (which shall be deemed to be the
Confidential Information of Genentech, whether or not so marked) promptly after execution thereof;
provided, however, Genentech may redact such copies to delete any provisions that are not relevant
to this Agreement or a Third Party License. Sangamo may disclose such copies of Sublicense
Agreements (or summaries of their terms) to the applicable Third Party licensor, in accordance with
Section 6.4.




          (d) Caltech IP. Sangamo hereby notifies Genentech that, pursuant to Section 2.3
of the Caltech Agreement, Genentech does not have the right to grant sublicenses under the
intellectual property licensed to Sangamo pursuant to the Caltech Agreement. Upon Genentech’s
written request, Sangamo shall promptly grant (not subject to any additional terms and conditions
including, without limitation, any additional payments or other consideration) a non-exclusive
license, under the intellectual property licensed to Sangamo pursuant the Caltech Agreement, to any
Third Party to which Genentech is permitted under Section 5.1(b) of this Agreement to grant a
sublicense. The scope of such license shall satisfy the requirement set forth in Section 5.1(b)(i)
and shall in no event be greater than the scope of the Genentech License.




          (e) Exercise of License Rights by a Third Party. Third Parties may exercise the
“make” and/or “use” license rights granted to Genentech (or a sublicensee) under the
Genentech License on Genentech’s (or such sublicensee’s) behalf without the grant of a
sublicense of such rights.




          (f) Materials. Genentech shall not modify the ZFN Reagents in any way or create
any derivatives or sequence variants thereof (other than for the purpose of creating Improved ZFN
Reagents); provided, however, Genentech may transfer the ZFNs from ZFN Reagents into different
expression plasmids. As between Genentech and Sangamo, Genentech shall own any ZFN Reagents and
ZFN Modified Cell Lines made by Genentech, a sublicensee under the Genentech License or a Third
Party on behalf of Genentech or such sublicensee; provided, however, such ownership is with respect
to the tangible materials and does not imply ownership of intellectual property pertaining to or
embodied in such tangible materials, which shall be in accordance with the other provisions of this
Agreement.




          (g) Fully Paid. Upon the expiration of Genentech’s obligation to make Milestone
Payments for a given Licensed Product, the Genentech License (including any sublicenses granted
thereunder) with respect to such Licensed Product shall be fully-paid and irrevocable.




          (h) No Non-Permitted Use. Genentech hereby covenants that it shall not willfully,
nor shall it expressly cause or permit any Third Party, (i) to make, use, import, modify




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or reverse
engineer ZFN Reagents and any associated expression plasmids for any purpose other than creating
ZFN Modified Cell Lines; or (ii) to practice any invention claimed in a Sangamo Patent for the
purpose of altering genomic DNA other than the genomic DNA of a Designated Gene.




     5.2 License to Sangamo. Genentech hereby grants to Sangamo a non-exclusive,
non-sublicensable license, under intellectual property rights Controlled by Genentech, solely for
the purpose of performing Sangamo’s activities under the Research Plan.



     5.3 No Implied Licenses. Except to the limited extent necessary for a Party to
perform its obligations under this Agreement, or as otherwise expressly provided herein, this
Agreement does not grant any right or license under any intellectual property rights of a Party, or
otherwise, and no other right or license is to be inferred from any provision of this Agreement or
by the conduct of the Parties.



     5.4 Third Party Licenses.



          (a) Performance Under Third Party Licenses. The Genentech License includes
sublicenses under Sangamo IP Rights licensed (as of the Effective Date or thereafter) to Sangamo
pursuant to agreements with Third Parties (each such agreement, a “Third Party License”). As a
result, this Agreement and the Genentech License are subject to those terms and conditions of the
Third Party Licenses that are set forth in Exhibit E. Except to the extent set forth in Exhibit E, Sangamo
shall be responsible for performing all obligations under the
Third Party Licenses including, without limitation, any payment obligations, even if such payment
arises as a result of Genentech’s (or its sublicensees’) activities under this Agreement.




          (b) Maintenance. With respect to each Third Party License, Sangamo shall not (i)
commit any acts or omissions that reasonably could cause a breach of such Third Party License; (ii)
amend or terminate such Third Party License; or (iii) exercise or waive any rights it may have
under such Third Party License, in each of the foregoing cases, in any way that reasonably could
adversely affect the Genentech License (including any sublicenses granted thereunder) or impose
additional obligations on Genentech. In the event that Sangamo receives a notice of a breach of a
Third Party License that reasonably could adversely affect the Genentech License, Genentech shall
reasonably cooperate with Sangamo to cure such breach.




          (c) Notices. With respect to each Third Party License, Sangamo shall notify
Genentech within ten (10) business days after Sangamo first obtains knowledge or any information
regarding any events or circumstances relating to such Third Party License that reasonably could
adversely affect the Genentech License including, without limitation, (i) any notice of breach or
termination, or any threat of breach or termination, of such Third Party License; and (ii) any
communication regarding the scope of the rights granted in such Third Party License.




Article 6. Confidential Information




     6.1 Obligations. Each Party agrees (a) to use the other Party’s Confidential
Information solely for the purposes of, and in accordance with, this Agreement; and (b) except as



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otherwise expressly permitted in this Agreement, to not disclose the other Party’s Confidential
Information to any Third Party without the other Party’s prior written consent. Sangamo hereby
consents that Sangamo’s Confidential Information may be disclosed to Third Parties to which a
sublicense (under the Genentech License) is granted under Section 5.1(b) or Third Parties that may
exercise license rights (under the Genentech License) under Section 5.1(e), provided that any such
Third Party has a need to know such Confidential Information and is subject to obligations of
confidentiality and limitations on use to substantially the same extent as required by the
provisions of this Article 6.




     6.2 General Exceptions. The obligations under Section 6.1 do not pertain to any
Confidential Information that a Party establishes by documentary evidence (a) was already known to
such Party, other than under an obligation of confidentiality, at the time of disclosure by the
other Party; (b) was generally available to the public or otherwise part of the public domain at
the time of its disclosure to such Party; (c) became generally available to the public or otherwise
part of the public domain after its disclosure and other than through any act or omission of such
Party in breach of this Agreement; (d) was disclosed to such Party, other than under an obligation
of confidentiality, by a Third Party who had no obligation to the other Party not to disclose such
information to others; or (e) was independently developed by or on behalf of such Party
without use of the other Party’s Confidential Information.



     6.3 Disclosures Required by Law. Notwithstanding any other provision of this
Agreement, a Party may disclose Confidential Information of the other Party if such disclosure is
required by law, rule or regulation (including, without limitation, to comply with any court order
or governmental regulation, including the duty to disclose Confidential Information material to
patentability under 37 CFR §1.56), provided that the Party making such disclosure shall give
reasonable advance written notice to the other Party of such requirement and, at such other Party’s
request, shall cooperate with such other Party’s efforts to limit such disclosure or to secure
confidential treatment of such Confidential Information through protective orders or otherwise.



     6.4 Disclosures to Third Party Licensors. Notwithstanding any other provision of
this Agreement, Sangamo may disclose this Agreement or a Sublicense Agreement (or a summary of
their terms) to a Third Party licensor with respect to a given Third Party License, provided that
(a) such disclosure is limited to the extent required by such Third Party License (e.g., financial
provisions are redacted to the extent possible); (b) the identity of the Designated Genes, the
Research Plan and information about the intellectual property licensed under this Agreement or a
Sublicense Agreement (other than the intellectual property licensed under such Third Party License)
are not disclosed; and (c) such Third Party licensor is subject to obligations of confidentiality
and limitations on use to substantially the same extent as required by the provisions of this
Article 6. Prior to making any disclosure under this Section 6.4, Sangamo shall notify Genentech
of its intent to make such disclosure and provide to Genentech a copy of any summary of terms
provided to such Third Party licensor.



     6.5 Termination of Prior Agreement. As of the Effective Date, this Agreement
supersedes and terminates the Mutual Confidentiality Agreement between the Parties, effective as of
January 20, 2005 (“Confidentiality Agreement”). All “INFORMATION” (as defined in the



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Confidentiality Agreement) exchanged between the Parties there under shall be deemed Confidential
Information hereunder and shall be subject to the provisions of this Article 6.




     6.6 Continuing Obligation. The provisions of this Article 6 shall continue for a
period of fifteen (15) years after termination or expiration of this Agreement.



Article 7. Genentech Materials and Related Information




     7.1 Ownership. Genentech shall own the Genentech Materials and all tangible materials included in the Sangamo
Deliverables. The ownership of any tangible materials (including, without limitation, ZFN Modified
Cell Lines derived from the Genentech CHO Cell Line) is with respect to such tangible materials and
does not imply ownership of intellectual property pertaining to or embodied in such tangible
materials, which shall be in accordance with the other provisions of this Agreement.



     7.2 Use. Sangamo agrees that it shall use the Genentech Materials solely for the
purpose of performing activities under the Research Plan and it shall not transfer any Genentech
Materials to any Third Party without Genentech’s prior written consent. Genentech hereby consents
that Sangamo may transfer the Genentech CHO DNA Extract to a Third Party solely to enable such
Third Party to perform [***] on Sangamo’s behalf, for the benefit of Genentech. Sangamo agrees
that any Third Party for which Genentech consents to the transfer of Genentech Materials shall be
contractually bound in writing (a) to limitations on the use of such Genentech Materials at least
as restrictive as those set forth in this Section 7.2; (b) to not further transfer such Genentech
Materials; and (c) to confidentiality and limitation on use obligations at least as restrictive as
those set forth in Article 6 with respect to any information generated or otherwise acquired by
such Third Party as a result of its possession or use of such Genentech Materials (and any such
information shall be included in the Research Results). Sangamo shall be jointly and severally
liable for any misuse by a Third Party of Genentech Materials received from Sangamo.



     7.3 Return or Destruction. Within thirty (30) days following the end of the
Research Period or the expiration or termination of this Agreement, Sangamo shall promptly return
or destroy, as instructed by Genentech, all (a) Genentech Materials remaining in Sangamo’s
possession or the possession of any Third Party that received such Genentech Materials from Sangamo
hereunder; and (b) Know-How and other information provided to Sangamo in the Genentech Deliverables
(at beginning of Research Stage 1) and any other information related to the Genentech Materials
provided by Genentech to Sangamo. After such return or destruction, Sangamo shall provide written
certification to Genentech that all such remaining Genentech Materials and all such information
have been returned or destroyed (as applicable).



Article 8. Term and Termination




     8.1 Term. This Agreement shall be effective as of the Effective Date. Unless
sooner terminated as provided in this Article 8, this Agreement shall remain in effect until
Sangamo is no longer entitled (in fact or potentially) to receive Milestone Payments from Genentech
pursuant to Section 3.6.





 




			
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     8.2 Termination by Either Party for Cause. Either Party may terminate this Agreement for a material breach by the other Party of the
provisions hereof. Any such termination shall be effective sixty (60) days after written notice to
such other Party specifying such breach if the specified breach is not cured before the effective
date of termination. In addition, Genentech may terminate the Research (but not the entire
Agreement) if the specified breach is not cured before the effective date of termination. Sangamo
agrees that any breach of this Agreement that materially adversely affects the Genentech License
(including, without limitation, a material breach of Section 5.4(b)) is a material breach of this
Agreement.



     8.3 Termination of Research by Genentech for Cause. Genentech may terminate the
Research (but not the entire Agreement) effective immediately, by providing written notice to
Sangamo at any time, if Sangamo has not provided to Genentech all of the Sangamo Deliverables due
under Research Stage 2 (other than the training of Genentech’s researcher(s)) within twelve (12)
months of the Effective Date. If Genentech terminates the Research pursuant to this Section 8.3,
no further payments under Sections 3.4 or 3.5 shall be due.



     8.4 Termination by Genentech for Convenience. Genentech may terminate this
Agreement for its own convenience, effective on or after three (3) months following the Effective
Date, by providing thirty (30) days written notice to Sangamo.



     8.5 Licenses.



          (a) Research Results License. Sangamo agrees to grant and hereby grants Genentech
a non-exclusive, worldwide, sublicensable, fully-paid, perpetual, irrevocable license, under
Research Results Patents, to make, use, sell, offer for sale and import Other Modified Cell Lines
solely for the purpose of making, using, offering for sale, selling and importing Licensed
Products; provided, however, the foregoing license shall only be effective upon the expiration or
termination of this Agreement for any reason. For purposes of this Section 8.5(a), a patent shall
be considered a “Research Results Patent” only if Sangamo reproduced any of the Research Results in
the specification of a patent application for such patent or if Sangamo submitted any of the
Research Results to the applicable patent authority in connection with the filing or prosecution of
patent applications for such patent.




          (b) Retention of Rights. In the event Sangamo seeks or is involuntarily placed
under the protection of the “Bankruptcy Code” (i.e., Title 11, U.S. Code), and the trustee in
bankruptcy, or Sangamo as a debtor-in-possession, rejects this Agreement, Genentech hereby elects,
pursuant to Section 365(n) of the Bankruptcy Code, to retain all licenses of rights to
“intellectual property” (as defined under the Bankruptcy Code) granted to it under this Agreement
to the extent permitted by law.




          (c) Survival of Sublicenses. Following the Research Period, upon the termination
of this Agreement by either Party under Section 8.2, a given existing sublicense granted to a
sublicensee under the Genentech License, if any, shall continue, provided that such sublicensee is
in good standing at the time of such termination and such sublicensee agrees in writing to pay
directly to Sangamo (i) in the case of a Collaboration Partner, all Milestone Payments due from
such Collaboration Partner related to such sublicense; and (ii) in all cases,






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any annual technology
access fees due under Section 3.3, if such fees have not previously been paid by Genentech or
another sublicensee.




          (d) Fully-Paid Genentech License. In the event that Genentech terminates this
Agreement under Section 8.2 due to a Materially Adverse Breach (as defined in the next sentence),
the Genentech License (including any sublicenses granted thereunder) with respect to all Licensed
Products shall be fully-paid and irrevocable. For purposes of this Section 8.5(d), a “Materially
Adverse Breach” means (i) a material breach by Sangamo of Sections [***]; or (ii) a breach of
Sangamo’s representations and warranties under Section [***], in each case of (i) or (ii), that
results or is reasonably likely to result in a material adverse effect upon the Genentech License
(unless Genentech is fully compensated for such material adverse effect by Sangamo, under Section
9.1(c) or otherwise). In the event that Genentech is awarded economic damages pursuant to an
action against Sangamo for a material breach of this Agreement that is a Materially Adverse Breach,
Genentech shall be required to either (A) accept such damage award, in which event the milestones
due under in this Agreement shall be reinstated, the Genentech License shall cease to be fully-paid
and irrevocable, and Genentech shall pay Sangamo any past due milestones or (B) forgo such damage
award, in which event the Genentech License shall continue to be fully-paid and irrevocable.
Genentech shall choose between the remedies described in clauses (A) and (B) of the preceding
sentence, and provide Sangamo with written notice of such choice along with any payments that may
be due under clause (A), no later than one hundred and eighty (180) days after such damages are
awarded.




     8.6 Effects of Termination. Except as otherwise expressly provided herein,
termination of this Agreement shall not affect the rights and obligations of the Parties that
accrued prior to the effective date of such termination.



     8.7 Survival. The provisions of Sections 4.2 and 4.4; Article 6; Article 7;
Sections 8.5, 8.6 and 8.7; Article 9; Article 10 (except for Section 10.4); Article 11; Section
12.2; Article 13 and Article 14 (as applicable) shall survive any termination or expiration of this
Agreement.



Article 9. Indemnification; Limitation on Liability




     9.1 Indemnification.



          (a) Claims Defined. For purposes of this Section 9.1, the term “Claims” means any
and all liabilities, obligations, penalties, claims, judgments, demands, actions, disbursements of
any kind and nature, suits, losses, damages, costs and expenses (including, without limitation,
reasonable attorney’s fees).




          (b) Indemnification by Genentech. Genentech shall indemnify, defend and hold harmless
Sangamo and its directors, officers and employees, and the Select Sangamo Licensors, from and
against any Third Party Claims (i) arising from any injury or damage arising out of or in
connection with the negligence or willful misconduct of Genentech or its consultants,
subcontractors or agents related to the performance of this Agreement or the breach by Genentech of
its obligations under this Agreement, except to the extent that such Claims arise from the
negligence or willful misconduct of the foregoing indemnified parties or the breach by






 




			
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Sangamo of
its obligations under this Agreement; (ii) [***]; (iii) arising from the manufacture, use,
handling, storage, importation, exportation, or other transportation of Modified Cell Line(s) by
Genentech or its sublicensees, subcontractors or agents, except to the extent that such Claims
arise from Sangamo’s breach of its representations and warranties under Article 12; (iv) arising
from the manufacture, use, handling, storage, importation, exportation, offer for sale, sale, or
other disposition of Licensed Product(s) by Genentech or its sublicensees, subcontractors or
agents, except to the extent that such Claims arise from Sangamo’s breach of its representations
and warranties under Article 12; or (v) arising from the use by a Third Party of any Licensed
Product sold or otherwise provided by Genentech or its sublicensees, subcontractors or agents.




          (c) Indemnification by Sangamo. Sangamo shall indemnify, defend and hold harmless
Genentech and its directors, officers and employees from and against any Third Party Claims (i)
arising from any injury or damage arising out of or in connection with the negligence or willful
misconduct of Sangamo or its consultants, subcontractors or agents related to the performance of
this Agreement or the breach by Sangamo of its obligations under this Agreement, except to the
extent that such Claims arise from the negligence or willful misconduct of the foregoing
indemnified parties or the breach by Genentech of its obligations under this Agreement; (ii) that
the technology and materials (other than the Genentech Deliverables) used by Sangamo in performing
activities under the Research Plan or the use of such technology and materials (other than the
Genentech Deliverables) in performing such activities infringes or misappropriates the intellectual
property rights of such Third Party; or (iii) that ZFN Reagents or their use by Genentech or its
sublicensees, subcontractors or agents under the Genentech License infringes or misappropriates the
intellectual property rights of such Third Party, except to the extent that such infringement or
misappropriation is due to the identity, sequence or other characteristics of either Designated
Gene or is due to an Improvement that is incorporated in or used to make an Improved ZFN Reagent.




          (d) Indemnification Procedures. In the event that a Party seeks indemnification
under this Section 9.1, such Party shall (i) promptly notify the other Party as soon as it becomes
aware of a claim or suit for which indemnification may be sought pursuant hereto, (ii) cooperate as
reasonably requested (at the expense of the indemnifying Party) with the indemnifying Party in the
defense of such claim or suit; and (iii) permit the indemnifying Party to control the defense of
such claim or suit with counsel mutually satisfactory to the Parties. In no event, however, may
the indemnifying Party compromise or settle any claim or suit in a
manner that admits fault or negligence on the part of the indemnified Party without the prior
written consent of the indemnified Party. The indemnifying Party shall have no liability under
this Section 9.1 with respect to claims or suits settled or compromised without its prior written
consent, which consent shall not be unreasonably withheld.




     9.2
Limitation on Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR LOSS OF PROFITS, LOSS OF GOODWILL OR ANY
CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES OF ANY KIND, EXCEPT TO THE EXTENT THAT SUCH DAMAGES
(A) ARE AN ELEMENT OF THE DAMAGES AWARDED BY A COURT OF COMPETENT JURISDICTION TO A THIRD PARTY IN
CONNECTION WITH A CLAIM WITH RESPECT TO WHICH A PARTY IS ENTITLED TO INDEMNIFICATION PURSUANT TO
SECTION 9.1; OR (B) ARISE FROM THE MISUSE OR





 




			
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MISAPPROPRIATION OF THE OTHER PARTY’S CONFIDENTIAL
INFORMATION OR THE GENENTECH MATERIALS.




Article 10. Dispute Resolution




     10.1 Internal Resolution. Except as otherwise expressly provided in this
Agreement, in the event of any controversy, claim or other dispute arising out of or relating to
any provision of this Agreement or the interpretation, enforceability, performance, breach,
termination or validity hereof, such dispute shall be first referred to the Executives of each
Party for resolution, prior to proceeding under the following provisions of this Article 10. A
dispute shall be referred to the Executives upon one Party providing the other Party with written
notice that such dispute exists, and the Executives shall attempt to resolve such dispute through
good faith discussions. In the event that the Executives cannot resolve such dispute within thirty
(30) days of such other Party’s receipt of such written notice, either Party may initiate the
dispute resolution procedures set forth in Section 10.2.



     10.2 Arbitration. Except as otherwise expressly provided in this Agreement, the
Parties agree that any dispute not resolved internally by the Parties pursuant to Section 10.1,
shall be resolved through binding arbitration in accordance with the then prevailing Commercial
Arbitration Rules of the American Arbitration Association, except as modified in this Agreement,
applying the substantive law specified in Section 14.1. A Party may initiate an arbitration by
written notice to the other Party of its intention to arbitrate, and such demand notice shall
specify in reasonable detail the nature of the dispute. Each Party shall select one (1)
arbitrator, and the two (2) arbitrators so selected shall choose a third arbitrator, and all three
(3) shall serve as neutrals. If a Party fails to nominate its arbitrator, or if the Parties’
arbitrators cannot agree on the third arbitrator, the necessary appointments shall be made in
accordance with the then prevailing Commercial Arbitration Rules. Within three (3) months of the
conclusion of an arbitration proceeding, the arbitration decision shall be rendered in writing and
shall specify the basis on which the decision was made. The award of the arbitration tribunal
shall be final and judgment
upon such an award may be entered in any competent court or application may be made to any
competent court for judicial acceptance of such an award and order of enforcement. Unless
otherwise agreed upon by the Parties, the arbitration proceedings shall be conducted in San
Francisco, California. The Parties agree that they shall share equally the cost of the arbitration
filing and hearing fees, and the cost of the three (3) arbitrators. Each Party shall bear its own
attorneys’ fees and associated costs and expenses.



     10.3 Patent Disputes. Notwithstanding the other provisions of this Article 10, any
dispute that involves the validity, infringement or claim interpretation of a patent (a) that is
issued in the United States shall be subject to actions before the United States Patent and
Trademark Office and/or submitted exclusively to a federal court having jurisdiction; and (b) that
is issued in any other country shall be brought before an appropriate regulatory or administrative
body or court in that country, and the Parties hereby consent to the jurisdiction and venue of such
courts and bodies. For the sake of clarity, such patent disputes shall not be subject to the
provisions of Section 10.2.




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     10.4 Continued Performance. Provided the Agreement has not terminated, the Parties
agree to continue performing under the Agreement in accordance with its provisions, pending the
final resolution of any dispute.



Article 11. Public Disclosures; Use of Names




     11.1 Publicity and Other Public Disclosures.



               (a) Generally. Subject to the other provisions of this Section 11.1, neither
Party shall issue press releases or make any other public disclosures relating to this Agreement
for any purpose whatsoever without the other Party’s prior written approval. Each Party agrees
that the other Party shall have no less than five (5) business days to review and provide comments
regarding any such proposed public disclosure (even if such disclosure is required by law, rule or
regulation), unless a shorter review time is agreed to by both Parties. If the disclosing Party
requests a shorter review time, the other Party shall agree to such requested shorter review time
if (i) such shorter review time is necessitated by an applicable disclosure law, rule or
regulation; and (ii) the disclosing Party made such request and provided such proposed public
disclosure for review as soon as reasonably practicable after the disclosing Party knew of the
event necessitating such shorter review time. The provisions of this Section 11.1 are in addition
to the provisions of Article 6.



               (b) Approved Public Disclosures. Genentech hereby approves of the following
public disclosures by Sangamo: (i) issuing the press release set forth in Exhibit D, following the
signing of this Agreement by both Parties; (ii) including Genentech on a list of Sangamo’s partners
or licensees/licensors, without identifying any subject matter of this Agreement; and (iii)
including the text set forth in Exhibit D in Sangamo’s Form 8-K filings. Sangamo hereby approves
of the following public disclosures by Genentech (i) including Sangamo on a list of Genentech’s
partners or licensees/licensors and (ii) disclosing that Sangamo is providing technology to
Genentech for the improvement of protein production.



               (c) Public Disclosures Required by Law. In the event that one Party reasonably
concludes that a public disclosure relating to this Agreement is required by law, rule or
regulation (including, without limitation, the disclosure requirements of the Securities and
Exchange Commission or the securities exchange or other stock market on which such Party’s
securities are traded (for purposes of this Section 11.1, collectively, an “Exchange”)) and the
other Party would prefer not to make such disclosure, the Party seeking such disclosure shall
either (i) limit such disclosure to address the concerns of the other Party or (ii) provide a
written explanation from counsel stating why such limited disclosure is not sufficient to comply
with the applicable law, rule or regulation. Provided that the Party seeking such disclosure
complies with the preceding sentence, such Party shall be permitted to make such disclosure. Each
Party agrees that it shall obtain its own legal advice with regard to its compliance with
securities laws, rules and regulations, and will not rely on any statements made by the other Party
relating to such securities laws, rules and regulations.



               (d) Filing of Agreement. With respect to complying with the disclosure
requirements of an Exchange, in connection with any required filing of this Agreement with such
Exchange, the filing Party shall, at the request of the other Party, seek confidential treatment of



-22-









 




portions of this Agreement from such Exchange and shall provide the other Party with the
opportunity, for at least fifteen (15) days, to review and comment on any such proposed filing, and
shall thereafter provide reasonable advance notice and opportunity for comment on any subsequent
changes to such filing. Sangamo shall, whether or not requested by Genentech, redact and request
confidential treatment for (i) all references to the identity of the Designated Genes; (ii) the
sequences in Exhibit B; and (iii) any financial terms, other than those disclosed in accordance
with Section 11.1(c).




     11.2 Use of Names. Except as expressly provided herein, no right, express or
implied, is granted by the Agreement to use in any manner the name of “Sangamo,” “Genentech” or any
other trade name or trademark of the other Party in connection with the performance of this
Agreement.



Article 12. Warranties




     12.1 Mutual Warranties. Each Party represents and warrants to the other Party
that: (a) it has full corporate authority to execute this Agreement and to perform its obligations
under this Agreement; (b) in performing hereunder it will not violate any other agreement to which
it is a party or subject; (c) in performing hereunder it will not violate any federal, state or
local laws, requirements or regulations; and (d) it shall provide personnel, as necessary, to
perform its obligations hereunder.



     12.2 Sangamo Warranties. Sangamo represents and warrants to Genentech that:



               (a) as of the Effective Date, all Patents owned by Sangamo that have one or more
claims that encompass (i) ZFN Reagents and/or ZFN Modified Cell Lines and/or (ii) the making and/or
use of ZFN Reagents and/or ZFN Modified Cell Lines are, in all cases, Controlled by Sangamo;



               (b) as of the Effective Date, all of the Identified Patents (other than those
Identified Patents with a status of “Revoked” on Exhibit C) are Controlled by Sangamo, and Sangamo
will not, during the term of this Agreement, grant (or purport to grant) any rights or take any
other actions that are inconsistent with the Genentech License;



               (c) all Sangamo employees and any Third Parties working on its behalf that perform
activities under the Research Plan are obligated (or will be obligated, prior to commencing such
activities) to assign any Inventions to Sangamo and to cooperate with Sangamo in connection with
obtaining patent protection therefor;



               (d) Genentech has the right to grant sublicenses under the Genentech License to
one or more Third Parties, subject to Sections 5.1(b), 5.1(c) and 5.1(d); and



               (e) with respect to rights sublicensed to Genentech by Sangamo under each of the
Caltech Agreement, the MIT Agreement and the Utah Agreement, Genentech’s sublicense to such rights
(including any further sublicenses thereunder) shall survive (as a direct license from the
applicable Third Party licensor or otherwise) in the event that the applicable Third Party



-23-









 




licensor terminates Sangamo’s license to such rights for any reason, subject to any provisions related to
such direct license that are set forth in Exhibit E.




     12.3 Disclaimers. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THE AGREEMENT, NEITHER
PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND AND EXPRESSLY DISCLAIMS ALL IMPLIED OR
STATUTORY WARRANTIES INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT.



Article 13. Notices




     Except as otherwise expressly provided in the Agreement, any notice required under this
Agreement shall be in writing and shall specifically refer to this Agreement. Notices shall be
sent via one of the following means and will be effective (a) on the date of delivery, if delivered
in person; (b) on the date of receipt, if sent by a facsimile (with delivery confirmed); or (c) on
the date of receipt, if sent by private express courier or by first class certified mail, return
receipt requested (or its equivalent). Any notice sent via facsimile shall be followed by a copy
of such notice by private express courier or by first class mail. Notices shall be sent to the
other Party at the addresses set forth below. Either Party may change its addresses for purposes
of this Article 13 by sending written notice to the other Party.



          To Sangamo:





Sangamo BioSciences, Inc.

Point Richmond Tech Center II

501 Canal Blvd, Suite A100

Richmond, CA 94804

Attn: Chief Executive Officer

Telephone: (510) 970-6000

Facsimile: (510) 236-8951



          To Genentech:





Genentech, Inc.

1 DNA Way

South San Francisco, CA 94080

Attn: Corporate Secretary

Telephone: (650) 225-1000

Facsimile: (650) 467-9146



          with a required copy to:





Genentech, Inc.

1 DNA Way

South San Francisco, CA 94080

Attn: VP, Alliance Management and

Pipeline Strategy Support

Telephone: (650) 225-1000

Facsimile: (650) 467-3294



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Article 14. General Provisions




     14.1 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of California and the United States without regard to the conflict of laws
provisions thereof.



     14.2 Assignment. During the Research Period, Sangamo shall not assign or delegate
any of its rights or obligations under this Agreement without the prior written consent of
Genentech. After the Research Period, Sangamo may, without Genentech’s consent, assign this
Agreement and its rights and obligations hereunder to (a) any successor in interest by way of
merger, acquisition or sale of all or substantially all of its assets to which this Agreement
relates; or (b) an Affiliate of Sangamo. At any time, Genentech may, without Sangamo’s consent,
assign this Agreement and its rights and obligations hereunder to (a) any successor in interest by
way of merger, acquisition or sale of all or substantially all of its assets to which this
Agreement relates; or (b) an Affiliate of Genentech. Any attempt to assign or delegate any portion
of this Agreement in violation of this Section 14.2 shall be void. Subject to the foregoing
provisions of this Section 14.2, this Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective successors and assigns.



     14.3 Entire Agreement. This Agreement, including all Exhibits attached hereto,
which are hereby incorporated by reference, contains the entire understanding between the Parties
hereto with respect to the subject matter hereof and supersedes and terminates all prior
agreements, understandings and arrangements between the Parties (including any prior
representations or warranties made by either Party), whether written or oral with respect to such
subject matter including, without limitation, the Confidentiality Agreement.



     14.4 Amendment; Waiver. Except as otherwise expressly provided herein, no
alteration of or modification to this Agreement shall be effective unless made in writing and
executed by an authorized representative of each Party. No course of dealing or failure of either
Party to strictly enforce any term, right or condition of this Agreement in any instance shall be
construed as a general waiver or relinquishment of such term, right or condition. The observance
of any provision of this Agreement may be waived (either generally or any given instance and either retroactively
or prospectively) only with the written consent of the Party granting such waiver.



     14.5 Severability. The Parties do not intend to violate any rule, law or
regulation. If any of the provisions of this Agreement are held to be void or unenforceable, then
such void or unenforceable provisions shall be replaced by valid and enforceable provisions that
will achieve as far as possible the economic business intentions of the Parties.



     14.6 Construction. The Parties mutually acknowledge that they and their attorneys
have participated in the negotiation and preparation of this Agreement. Ambiguities, if any, in
this Agreement shall not be construed against any Party, irrespective of which Party may be deemed
to have drafted the Agreement or authorized the ambiguous provision.



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     14.7 Captions. Titles, headings and other captions are for convenience only and
are not to be used for interpreting this Agreement.



     14.8 Relationship of the Parties. The Parties hereto are independent contractors
and nothing contained in this Agreement shall be deemed or construed to create a partnership, joint
venture, employment, franchise, agency or fiduciary relationship between the Parties.



     14.9 Force Majeure. Failure of either Party to perform under this Agreement shall
not subject such Party to any liability to the other if such failure is caused by acts of God, acts
of terrorism, earthquake, fire, explosion, flood, drought, war, riot, sabotage, embargo, compliance
with any order or regulation of any government entity, or by any cause beyond the reasonable
control of the affected Party, whether or not foreseeable, provided that written notice of such
event is promptly given to the other Party.



     14.10 Counterparts; Facsimiles. This Agreement may be executed in two (2) or more
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument. For purposes hereof, a facsimile copy of this Agreement, including
the signature pages hereto, will be deemed to be an original. Notwithstanding the foregoing, the
Parties shall deliver original execution copies of this Agreement to one another as soon as
practicable following execution thereof.




     In agreement with the foregoing, the Parties have caused this Agreement to be signed
by their respective duly authorized representatives as set forth below.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Genentech, Inc.	 	 	 	Sangamo BioSciences, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Susan Desmond - Hellmann	 	 	 	By:	 	/s/ Edward O. Lanphier
II	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Susan
Desmond - Hellmann	 	 	 	 	 	Name:	 	Edward O. Lanphier II	 	 
	 

	 	Title:
	 	President
of Product Development
	 	 	 	 	 	Title:
	 	President and Chief Executive
Officer
	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 

	 	 






-26-









 






Exhibit A




Research Plan




[***]






 




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




A-1









 










[***]






 




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




A-2









 










[***]






 




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




A-3









 










[***]






 




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




A-4









 










[***]






 




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




A-5









 










[***]






 




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




A-6









 










[***]






 




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




A-7









 










Exhibit B




Designated Gene Sequences




[***]






 




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




B-1









 










[***]






 




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




B-2









 










[***]






 




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




B-3









 










[***]






 




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






B-4









 





Exhibit C




Identified Patents

(Sangamo Owned and In-Licensed)




SANGAMO OWNED




	 	 	 	 	 	 	 
	Serial No.	 	Filing date	 	Title	 	Status
	AU 32291/95

	 	Aug. 17, 1995
	 	Improvements in
binding proteins
for recognition of
DNA
	 	AU Pat. No. 698152
(2/4/99)
	 
	 	 	 	 	 	 
	AU 10037/99

	 	Jan. 6, 1999
	 	Improvements in
binding proteins
for recognition of
DNA
	 	AU Pat. No. 726759
(3/8/01)
	 
	 	 	 	 	 	 
	CA 2,196,419

	 	Aug. 17, 1995
	 	Improvements in
binding proteins
for recognition of
DNA
	 	Pending
	 
	 	 	 	 	 	 
	EP 95928576.8

	 	Aug. 17, 1995
	 	Improvements in
binding proteins
for recognition of
DNA
	 	Pending
	 
	 	 	 	 	 	 
	JP 507857/1996

	 	Aug. 17, 1995
	 	Improvements in
binding proteins
for recognition of
DNA
	 	Pending
	 
	 	 	 	 	 	 
	US 09/139,762

	 	Aug. 25, 1998
	 	Binding proteins
for recognition of
DNA
	 	US Pat. No.
6,013,453 (1/11/00)
	 
	 	 	 	 	 	 
	US 10/033,129

	 	Dec. 27, 2001
	 	Relating to Binding
proteins for
recognition of DNA
	 	US Pat. No. RE
39,229 (8/8/06)
	 
	 	 	 	 	 	 
	US 10/309,578

	 	Dec. 3, 2002
	 	Design of binding
proteins for
recognition of DNA
	 	Pending
	 
	 	 	 	 	 	 
	US 10/397,930

	 	Mar. 25, 2003
	 	Relating to Binding
proteins for
recognition of DNA
	 	Pending
	 
	 	 	 	 	 	 
	US 10/400,017

	 	Mar. 25, 2003
	 	Relating to Binding
proteins for
recognition of DNA
	 	Pending
	 
	 	 	 	 	 	 
	AU 2001 226935

	 	Jan. 19, 2001
	 	Nucleic Acid
Binding
Polypeptides
(2-finger modules)
	 	Allowed






C-1









 






	 	 	 	 	 	 	 
	Serial No.	 	Filing date	 	Title	 	Status
	 
	 	 	 	 	 	 
	CA 2,398,155

	 	Jan. 19, 2001
	 	Nucleic Acid
Binding
Polypeptides
(2-finger modules)
	 	Pending
	 
	 	 	 	 	 	 
	EP 01 901 276.4

	 	Jan. 19, 2001
	 	Nucleic Acid
Binding
Polypeptides
(2-finger modules)
	 	Allowed
	 
	 	 	 	 	 	 
	US10/198,677

	 	Jan. 19, 2001
	 	Nucleic Acid
Binding
Polypeptides
(2-finger modules)
	 	Pending
	 
	 	 	 	 	 	 
	US 10/222,614

	 	Aug. 15, 2002
	 	Cells comprising
zinc finger
nucleases
	 	Allowed
	 
	 	 	 	 	 	 
	US 10/395,816

	 	Mar. 20, 2003
	 	Methods and
compositions for
using zinc finger
endonucleases to
enhance homologous
recombination
	 	Pending
	 
	 	 	 	 	 	 
	AU 2003 218382

	 	Mar. 20, 2003
	 	Methods and
compositions for
using zinc finger
endonucleases to
enhance homologous
recombination
	 	Pending
	 
	 	 	 	 	 	 
	CA 2,479,858

	 	Mar. 20, 2003
	 	Methods and
compositions for
using zinc finger
endonucleases to
enhance homologous
recombination
	 	Pending
	 
	 	 	 	 	 	 
	EP 03 714 379.9

	 	Mar. 20, 2003
	 	Methods and
compositions for
using zinc finger
endonucleases to
enhance homologous
recombination
	 	Pending
	 
	 	 	 	 	 	 
	US 10/912,932

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	US 11/304,981

	 	Dec. 15, 2005
	 	Targeted deletion
of cellular DNA
Sequences
	 	Pending






C-2









 






	 	 	 	 	 	 	 
	Serial No.	 	Filing date	 	Title	 	Status
	 
	 	 	 	 	 	 
	AU 2004 263865

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	CA 2,534,296

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	EP 04 780 272.3

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	IL 173460

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	JP 2006-523239

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	KR 2006-7002703

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	SG 2006 00748-8

	 	Aug. 6, 2004
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	AU 2005 220148

	 	Feb. 3, 2005
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	CA 2,534,296

	 	Feb. 3, 2005
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	EP 05 756 438.7

	 	Feb. 3, 2005
	 	Methods and
compositions for
targeted cleavage
and recombination
	 	Pending
	 
	 	 	 	 	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 
	 	 	 	 	 	 
	US 11/221,683

	 	Sept. 8, 2005
	 	Compositions and
methods for protein
production
	 	Pending








 




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




C-3









 










	 	 	 	 	 	 	 
	Serial No.	 	Filing date	 	Title	 	Status
	 
	 	 	 	 	 	 
	PCT US05/32157

	 	Sept. 8, 2005
	 	Compositions and
methods for protein
production
	 	WO 06/033859 (3/30/06)
	 
	 	 	 	 	 	 
	US 11/493,423

	 	July 26, 2006
	 	Targeted
integration and
expression of
exogenous nucleic
acid sequences
	 	Pending
	 
	 	 	 	 	 	 
	PCT US06/29027

	 	July 26, 2006
	 	Targeted
integration and
expression of
exogenous nucleic
acid sequences
	 	Pending
	 
	 	 	 	 	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]








 




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




C-4









 










IN-LICENSED*




	 	 	 
	Caltech =

	 	in-licensed under the Caltech Agreement
	JHU =

	 	in-licensed under the JHU Agreement
	MIT =

	 	in-licensed under the MIT Agreement
	Scripps =

	 	in-licensed under the Scripps Agreement
	Utah =

	 	in-licensed under the Utah Agreement






	 	 	 	 	 	 	 
	Serial No.	 	 	 	 	 	 
	(*Third Party License)	 	Filing date	 	Title	 	Status
	US 07/862,831

(JHU)

	 	Apr. 3, 1992
	 	Functional domains in
FokI restriction
endonuclease
	 	US Pat. No. 5,356,802
(10/18/94)
	 
	 	 	 	 	 	 
	US 08/126,564

(JHU)

	 	Sept. 27, 1993
	 	Functional domains in
FokI restriction
endonuclease
	 	US Pat. No. 5,436,150
(7/25/95)
	 
	 	 	 	 	 	 
	US 08/346,293

(JHU)

	 	Nov. 23, 1994
	 	Insertion & Deletion
Mutants of FokI
restriction endonuclease
	 	US Pat. No. 5,487,994
(1/30/96)
	 
	 	 	 	 	 	 
	CA 2,154,581

(JHU)

	 	Feb. 10, 1994
	 	Functional domains in
FokI restriction
endonuclease
	 	Pending
	 
	 	 	 	 	 	 
	EP 94 909 526.9
(JHU)

	 	Feb. 10, 1994
	 	Functional domains in
FokI restriction
endonuclease
	 	Europ. Pat. No. 0 682
699 (5/7/03) Revoked
	 
	 	 	 	 	 	 
	CH

(JHU)

	 	 	 	Functional domains in
FokI restriction
endonuclease
	 	Europ. Pat. No. 0 682
699 (5/7/03) Revoked
	 
	 	 	 	 	 	 
	DE

(JHU)

	 	 	 	Functional domains in
FokI restriction
endonuclease
	 	Europ. Pat. No. 0 682
699 (5/7/03) Revoked
	 
	 	 	 	 	 	 
	FR

(JHU)

	 	 	 	Functional domains in
FokI restriction
endonuclease
	 	Europ. Pat. No. 0 682
699 (5/7/03) Revoked
	 
	 	 	 	 	 	 
	GB

(JHU)

	 	 	 	Functional domains in
FokI restriction
endonuclease
	 	Europ. Pat. No. 0 682
699 (5/7/03) Revoked
	 
	 	 	 	 	 	 
	IE

(JHU)

	 	 	 	Functional domains in
FokI restriction
endonuclease
	 	Europ. Pat. No. 0 682
699 (5/7/03) Revoked
	 
	 	 	 	 	 	 
	EP 03 010009.3
(JHU)

	 	Feb. 10, 1994
	 	Functional domains in
FokI restriction
endonuclease
	 	Pending






C-5









 






	 	 	 	 	 	 	 
	Serial No.	 	 	 	 	 	 
	(*Third Party License)	 	Filing date	 	Title	 	Status
	 
	 	 	 	 	 	 
	JP 7-510290

(JHU)

	 	Aug.23, 1994
	 	Functional domains in
FokI restriction
endonuclease
	 	Pending
	 
	 	 	 	 	 	 
	JP 2006-143294

(JHU)

	 	Aug. 23, 1994
	 	Functional domains in
FokI restriction
endonuclease
	 	Pending
	 
	 	 	 	 	 	 
	US 08/575,361

(JHU)

	 	Dec. 20, 1995
	 	General method to clone
hybrid restriction
endonucleases using lig
gene
	 	US Pat. No. 5,792,640
(8/11/98)
Reexamination Requested
	 
	 	 	 	 	 	 
	US 08/647,449

(JHU)

	 	May 7, 1996
	 	Methods for inactivating
target DNA and for
detecting conformational
change in a nucleic acid
	 	US Patent No.
5,916,794 (Jun. 29,
1999)
	 
	 	 	 	 	 	 
	US 09/281,792

(JHU)

	 	Mar. 31, 1999
	 	Methods for inactivating
target DNA and for
detecting conformational
change in a nucleic acid
	 	US Patent No.
6,265,196 (Jul. 24,
2001)
Reexamination Requested
	 
	 	 	 	 	 	 
	US 08/676,318

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	U.S. Patent No. 6,242,568 (6/5/01)
	 
	 	 	 	 	 	 
	US 08/863,813

(Scripps)

	 	May 27, 1997
	 	Zinc finger protein
derivatives and methods
therefor
	 	U.S. Patent No. 6,140,466 (10/31/00)
	 
	 	 	 	 	 	 
	US 09/500,700

(Scripps)

	 	Feb. 9, 2000
	 	Zinc finger protein
derivatives and methods
therefor
	 	U.S. Patent No. 6,790,941 (9/14//04)
	 
	 	 	 	 	 	 
	AU 16865/95

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	AU Patent No. 704601 (4/29/99)
	 
	 	 	 	 	 	 
	CA 2,181,548

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	EP 95 908 614.1
(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	Europ. Pat. No. 0 770 129 (11/23/05)
	 
	 	 	 	 	 	 
	FR

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	Europ. Pat. No. 0 770 129 (11/23/05)






C-6









 






	 	 	 	 	 	 	 
	Serial No.	 	 	 	 	 	 
	(*Third Party License)	 	Filing date	 	Title	 	Status
	 
	 	 	 	 	 	 
	GB

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	Europ. Pat. No. 0 770 129 (11/23/05)
	 
	 	 	 	 	 	 
	FI 962879

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	JP 07-519231

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	NO 1996 2991

(Scripps)

	 	Jan. 18, 1995
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	AU 2002 300619

(Scripps)

	 	May 27, 1998
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	CA 2,291,861

(Scripps)

	 	May 27, 1998
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	EP 98 926 088.0
(Scripps)

	 	May 27, 1998
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	JP 11-500870

(Scripps)

	 	May 27, 1998
	 	Zinc finger protein
derivatives and methods
therefor
	 	Pending
	 
	 	 	 	 	 	 
	US 09/260,629

(MIT)

	 	Mar. 1, 1999
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	U.S. Pat. No.
6,479,626 (Nov. 12,
2002)
	 
	 	 	 	 	 	 
	US 10/146,221

(MIT)

	 	May 13, 2002
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	U.S. Pat. No.
6,903,185 (June 7,
2005)
	 
	 	 	 	 	 	 
	US 11/110,594

(MIT)

	 	April 20,2005
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	US Patent No 7,153,949
(Dec. 26, 2006)
	 
	 	 	 	 	 	 
	US 11/639,363

(MIT)

	 	Dec. 14, 2006
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	Pending
	 
	 	 	 	 	 	 
	AU 28849/99

(MIT)

	 	Mar. 1, 1999
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	AU Pat. No. 746454
(August 15, 2002)
	 
	 	 	 	 	 	 
	CA 2,321,938

(MIT)

	 	Mar. 1, 1999
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	Pending






C-7









 






	 	 	 	 	 	 	 
	Serial No.	 	 	 	 	 	 
	(*Third Party License)	 	Filing date	 	Title	 	Status
	 
	 	 	 	 	 	 
	EP 99909701.7
(MIT)

	 	Mar. 1, 1999
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	Pending
	 
	 	 	 	 	 	 
	JP 2000-534663

(MIT)

	 	Mar. 1, 1999
	 	Poly-Zinc Finger Proteins
with improved linkers
	 	Pending
	 
	 	 	 	 	 	 
	AU 2003 25128

(Utah)

	 	Jan. 22, 2003
	 	Targeted chromosomal
mutagenesis using zinc
finger nucleases
	 	Pending
	 
	 	 	 	 	 	 
	CA 2,474,486

(Utah)

	 	Jan. 22, 2003
	 	Targeted chromosomal
mutagenesis using zinc
finger nucleases
	 	Pending
	 
	 	 	 	 	 	 
	EP 03 746 527.5
(Utah)

	 	Jan. 22, 2003
	 	Targeted chromosomal
mutagenesis using zinc
finger nucleases
	 	Allowed
	 
	 	 	 	 	 	 
	US 10/502,565

(Utah)

	 	Jan. 22, 2003
	 	Targeted chromosomal
mutagenesis using zinc
finger nucleases
	 	Pending
	 
	 	 	 	 	 	 
	US 10/656,531

(Caltech)

	 	Sept. 5, 2003
	 	Use of chimeric nucleases
to stimulate gene
targeting
	 	Pending
	 
	 	 	 	 	 	 
	AU 2003 298574

(Caltech)

	 	Sept. 5, 2003
	 	Use of chimeric nucleases
to stimulate gene
targeting
	 	Pending
	 
	 	 	 	 	 	 
	CA 2,497,913

(Caltech)

	 	Sept. 5, 2003
	 	Use of chimeric nucleases
to stimulate gene
targeting
	 	Pending
	 
	 	 	 	 	 	 
	EP 03 796 324.6
(Caltech)

	 	Sept. 5, 2003
	 	Use of chimeric nucleases
to stimulate gene
targeting
	 	Pending
	 
	 	 	 	 	 	 
	JP 2005-501601

(Caltech)

	 	Sept. 5, 2003
	 	Use of chimeric nucleases
to stimulate gene
targeting
	 	Pending







C-8









 





Exhibit D




Press Release and Form 8-K Text





D-1









 








Exhibit E




Certain Agreements Relating to Third Party Licenses




     Sangamo hereby notifies Genentech that (except as otherwise noted) a full and complete copy of
each of the provisions explicitly referenced below in this Exhibit E is set forth in Exhibit F:



     1. Caltech Agreement. Genentech acknowledges and agrees that Genentech does not have the
right to grant sublicenses under the intellectual property licensed to Sangamo pursuant to the
Caltech Agreement. The Parties acknowledge and agree that, as of the date of any termination of
the Caltech Agreement (a) the California Institute of Technology (“Caltech”) shall be a third party
beneficiary of this Agreement as of the date of such termination and thereafter; (b) Sangamo shall
remain responsible for all obligations to Genentech (other than those requiring Sangamo to hold a
license under the Caltech Agreement, unless Caltech (at its discretion) elects to assume such
obligations); and (c) Sangamo shall inform Genentech in writing (with a copy to Caltech) that
Genentech’s obligations pursuant to (a) and (b) are in effect as a result of such termination.



     2. JHU Agreement. The obligations to Johns Hopkins University of Articles II, VIII, IX, X,
XIII and XV and Paragraphs 5.1 and 5.2 of the JHU Agreement are binding upon Genentech and any of
Genentech’s sublicensees under the rights licensed to Sangamo under the JHU Agreement as if each
were a party to the JHU Agreement. The Parties agree that, in the event that the JHU Agreement is
amended after the Effective Date, the provisions of this paragraph shall apply only to the extent
required in any such amendment.



     3. MIT Agreement. The provisions of Article 2 (other than Paragraph 2.8), Article 9 and
Article 10 of the MIT Agreement are hereby incorporated by reference into this Agreement and are
binding upon Genentech and any of Genentech’s sublicensees under the rights licensed to Sangamo
under the MIT Agreement (but in each case solely to the extent such provisions are applicable to
the rights granted in this Agreement) as if each were a party to the MIT Agreement. Any sublicense
granted by Sangamo to Genentech will survive as a direct license from the Massachusetts Institute
of Technology (“MIT”) to Genentech pursuant to Paragraph 13.6 of the MIT Agreement provided that
Genentech is not then in default under this Agreement and agrees to assume the rights and
obligations of such direct license. If Genentech agrees to assume such rights and obligations, (a)
such direct license shall be subject to the same non-financial terms and conditions as those in the
MIT Agreement and (b) Genentech (or if there is at such time more than one sublicensee under the
MIT Agreement, Genentech and all other sublicensees severally and jointly) shall pay any annual
fees due pursuant to Paragraph 4.1(b) of the MIT Agreement. If Genentech becomes a direct licensee
of MIT, Genentech shall make any monetary payment(s) that, had the MIT Agreement not been
terminated, Sangamo would have been required to make under the MIT Agreement as a result of the
activities of Genentech. The Parties agree that, in the event that the MIT Agreement is amended
after the Effective Date, the provisions of this paragraph shall apply only to the extent required
in any such amendment.



     4. Scripps Agreement. Genentech acknowledges and agrees that any sublicense granted by
Sangamo to Genentech shall be subject in all respects to the restrictions, exceptions, royalty
obligations, reports, termination provisions and other provisions contained in the Scripps
Agreement (but not including the payment of the license fee pursuant to Section 2.2 of the Scripps
Agreement). The Parties agree that, in the event that the Scripps Agreement is amended after the
Effective Date, the provisions of



E-1









 




this paragraph shall apply only to the extent required in any such amendment. [NOTE: Section
2.2 of the Scripps Agreement is not included in Exhibit F.]




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




 




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





E-2









 








Exhibit F




Certain Provisions of Third Party Licenses




Copy of Selected Provisions from the JHU Agreement




ARTICLE II — GRANT




     2.1 JOHNS HOPKINS hereby grants to LICENSEE the exclusive worldwide right and license to make,
have made, use, lease and sell the Licensed Products, and to practice the Licensed Processes,
including the right to grant sublicenses, subject to 35USC200-211 and the regulations promulgated
thereunder, to the end of the term for which the Patent Rights are granted by the applicable
governmental authority, unless sooner terminated as hereinafter provided (the “Term”). JOHNS
HOPKINS reserves the non-transferable royalty-free right to practice the subject matter of any
claim within the Patent Rights for its own internal purposes. If Dr. Chandrasegaran leaves JOHNS
HOPKINS, he shall have the non-transferable, royalty-free right to practice any claim within the
Patent Rights for his own academic purposes.



     2.2 In order to establish a period of exclusivity for LICENSEE, JOHNS HOPKINS hereby agrees
that it shall not grant any other license to make, have made, use, lease or sell Licensed Products
or to practice Licensed Processes except for its internal research activities during the period of
time (the “Exclusive Period”) commencing with the Effective Date of this Agreement and terminating
with expiration of the last-to-expire patent licensed under this Agreement, unless converted
earlier to a nonexclusive license pursuant to Paragraph 4.4 hereof or pursuant to a requirement by
the United States Government in accordance with 35USC200-211.



     2.3 LICENSEE shall have the right to sublicense all or any part of this license. LICENSEE
agrees that any sublicenses granted by it shall provide that the obligations to JOHNS HOPKINS of
Articles II, VIII, IX, X, XIII, XV, and Paragraphs 5.1 and 5.2 of this Agreement shall be binding
upon the sublicensees as if it were a party to this Agreement. LICENSEE further agrees to attach
copies of these Articles to sublicense agreements.



     2.4 LICENSEE agrees to forward to JOHNS HOPKINS a copy of any and all fully executed
sublicense agreements, and further agrees to forward to JOHNS HOPKINS, quarterly, pursuant to
Paragraph 5.2 a copy of such reports received by LICENSEE from its sublicensees during the
preceding twelve (12) month period under the sublicenses as shall be pertinent to a royalty
accounting under said sublicense agreements.



     2.5 Subject to Sections 2.6, 2.7 and 15.7 below, the license granted hereunder shall not be
construed to confer any rights upon LICENSEE by implication, estoppel or otherwise as to any
technology not specifically set forth in Appendix A, Appendix B, Appendix C, and Appendix D hereof.



     2.6 JOHNS HOPKINS hereby also grants to LICENSEE a right of first negotiation at then
commercially reasonable terms, to obtain an exclusive license to any Inventions, as previously
defined,



F-1









 




developed during the term of this Agreement and any extension thereof and pursuant to any
Research Agreement between the parties hereto (Appendix D). JOHNS HOPKINS shall promptly give
LICENSEE written notice of any such Inventions, as defined, and LICENSEE shall have one hundred and
twenty (120) days from the date of receipt of such notice to give JOHNS HOPKINS written notice of
its intent to exercise such option and complete negotiations. JOHNS HOPKINS shall not negotiate
with any third party regarding these Inventions during the period of LICENSEE’S right to negotiate.
During the term of this Agreement and any extension thereof, Dr. Chandrasegaran shall be free to
pursue any scientific investigations of his choice through collaboration with colleagues. Should
any such collaboration involve a Licensed Product or Licensed Process, JOHNS HOPKINS will take the
initiative of promptly communicating with these colleagues for the purpose of using its reasonable
best efforts to have such colleagues agree to be bound by the terms of this Agreement with regard
to Licensed Products and Licensed Processes.




     2.7 Appendix B attached hereto contains ideas conceived by Dr. Chandrasegaran for developing
laboratory reagents, diagnostics, and pharmaceuticals relating to chimeric restriction
endonucleases. Dr. Chandrasegaran shall give written notice of any Invention resulting under the
Advanced Technology Program within sixty (60) days of the completion of the funding of such
program. Any Invention resulting in whole or in part from said ideas which are made pursuant to an
award under the Advanced Technology Program where a grant application was filed on March 29, 1995
(Appendix C) shall be assigned to LICENSEE pursuant to Section 15.7 below and Dr. Chandrasegaran
will be named as sole inventor unless another individual makes a creative input to said Invention.
LICENSEE shall have the first right of negotiation, under then commercially reasonable terms, to
obtain an exclusive, royalty-bearing license under any Invention resulting from said ideas in
Appendix B made by Dr. Chandrasegaran with funding from a source other than the Advanced Technology
Program grant.



PARAGRAPHS 5.1 AND 5.2




     5.1 LICENSEE shall keep full, true and accurate books of account containing all particulars
that may be necessary for the purpose of showing the amounts payable to JOHNS HOPKINS hereunder.
Said books of account shall be kept at LICENSEE’s principal place of business or the principal
place of business of the appropriate Division of LICENSEE to which this Agreement relates. Said
books and the supporting data shall be open at all reasonable times for five (5) years following
the end of the calendar year to which they pertain, to the inspection of JOHNS HOPKINS or its
agents for the purpose of verifying LICENSEE’s royalty statement or compliance in other respects
with this Agreement.



     5.2 Commencing with the first commercial sale of a Licensed Product, LICENSEE, within sixty
(60) days after March 31, June 30, September 30 and December 31, of each year, shall deliver to
JOHNS HOPKINS true and accurate reports, giving such particulars of the business conducted by
LICENSEE, its Subsidiaries and its sublicensees during the preceding three-month period under this
Agreement as shall be pertinent to a royalty accounting hereunder. These shall include at least the
following:




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




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




Where reasonably practical, LICENSEE shall, to the best of its knowledge, subcategorize the
Licensed Products sold so as to assign the royalties paid to individual patent(s) of Appendix A.
Such subcategorization shall be for JOHNS HOPKINS administrative purposes only and shall in no way
affect any obligations of any part or the amounts of royalties to be paid under this Agreement.
Until there has been a first commercial sale of a Licensed Product, the LICENSEE shall give an
annual report of LICENSEE’s efforts to achieve a first commercial sale.




ARTICLE VIII — LIABILITY




     8.1 Inasmuch as JOHNS HOPKINS will not, under the provisions of this Agreement or otherwise,
have control over the manner in which LICENSEE, or its Subsidiaries or its agents or its
sublicensees or those operating for its account, or third parties who purchase Licensed Products
from any of the foregoing entities, practice any invention encompassed by the license granted
herein, LICENSEE shall defend and hold JOHNS HOPKINS, it trustees, officers, employees, students,
and affiliates harmless as against any judgments, fees, expenses or other costs (including
reasonable attorneys’ fees) arising from or incidental to any product liability or other lawsuit
brought as a consequence of the practice of said invention by any of the foregoing entities,
whether or not JOHNS HOPKINS is named as party defendant in any such lawsuit. LICENSEE shall have
the right to defend such a product liability lawsuit with counsel of its own choosing and JOHNS
HOPKINS will cooperate in the defense of such action at LICENSEE’s expense. Practice of the
Invention encompassed by the license granted herein by a Subsidiary or an agent or a sublicensee,
or a third party on behalf of or for the account of LICENSEE or by a third party who purchases
Licensed Products from any of the foregoing shall be considered LICENSEE’s practice of said
invention for purposes of this Paragraph 8.1. The provisions of this Paragraph 8.1 shall survive
termination of this Agreement.



     8.2 LICENSEE shall maintain or cause to be maintained, prior to the first planned use of
Licensed Products or Licensed Processes in humans, product liability insurance or other protection
reasonably acceptable to JOHNS HOPKINS which shall protect LICENSEE and JOHNS HOPKINS in regard to
events covered by Paragraph 8.1 above. LICENSEE will disclose to JOHNS HOPKINS the amount and kind
of product liability insurance it obtains, will give JOHNS HOPKINS a copy of the certificate of
insurance, and will increase or change the kind of insurance at the reasonable request of JOHNS
HOPKINS, provided such insurance is available to LICENSEE at commercially reasonable rates.



     8.3 Except as otherwise expressly set forth in this Agreement, JOHNS HOPKINS makes no
representations and extend no warranties of any kind, either express or implied, including but not
limited to warranties of merchantability, fitness for a particular purpose, and validity of Patent
Rights claims, issued or pending.



     8.4 No liability under this Agreement shall result to a party from delay in performance caused
by force majeure, that is, circumstances beyond the reasonable control of the party affected



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thereby, including, without limitation, acts of God, earthquake, fire, flood, war, government
regulations, labor unrest, or shortage of or an inability to obtain material or equipment.




ARTICLE IX — EXPORT CONTROLS




     It is understood that JOHNS HOPKINS is subject to United States laws and regulations
controlling the export of technical data, computer software, laboratory prototypes and other
commodities (including the Arms Export Control Act, as amended and the Export Administration Act of
1979), and that their obligations hereunder are contingent on compliance with applicable United
States export laws and regulations. The transfer of certain technical data and commodities may
require a license from the cognizant agency of the United States Government and/or written
assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign
countries without prior approval of such agency. JOHNS HOPKINS neither represents that a license
shall not be required nor that, if required, it shall be issued.



ARTICLE X — NON-USE OF NAMES




     LICENSEE shall not use the name of JOHNS HOPKINS, nor any of its employees, or any adaptation
thereof, in any advertising, promotional or sales literature without prior written consent obtained
from JOHNS HOPKINS in each case, except that LICENSEE may state that it is licensed by JOHNS
HOPKINS under one or more of the patents and/or applications comprising the Patent Rights.



ARTICLE XIII — TERMINATION




     13.1 This Agreement shall terminate if LICENSEE dissolves, unless this Agreement has been
assigned prior to the date of dissolution.



     13.2 Should LICENSEE fail to pay JOHNS HOPKINS royalties due and payable hereunder, JOHNS
HOPKINS shall have the right to terminate this Agreement on sixty (60) days’ written notice, unless
LICENSEE shall pay JOHNS HOPKINS within the sixty (60) day period, all such royalties and interest
due and payable. Upon the expiration of the sixty (60) day period, if LICENSEE shall not have paid
all such royalties and interest due and payable, the rights, privileges and license granted
hereunder shall terminate.



     13.3 Upon any material breach or default of this Agreement by LICENSEE other than those
occurrences set out in Paragraphs 13.1 and 13.2 hereinabove, which shall always take precedence in
that order over any material breach or default referred to in this Paragraph 13.3, JOHNS HOPKINS
shall have the right to terminate this Agreement and the rights, privileges and license granted
hereunder by giving ninety (90) days’ notice to LICENSEE. Such termination shall become effective
unless LICENSEE shall have cured any such breach or default prior to the expiration of the ninety
(90) day period.



     13.4 LICENSEE shall have the right to terminate this Agreement at any time on six (6) months’
notice to JOHNS HOPKINS and upon payment of all amounts due JOHNS HOPKINS.



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     13.5 Upon termination of this Agreement for any reason, nothing herein shall be construed to
release either party from any obligation that matured prior to the effective date of such
termination. LICENSEE and any Subsidiary and sublicensee thereof may, however, after the effective
date of such termination, sell all Licensed Products, and complete Licensed Products in the process
of manufacture at the time of such termination and sell the same, provided that LICENSEE shall pay
to JOHNS HOPKINS the royalties thereon as required by Article IV of this Agreement and shall submit
the reports required by Article V hereof on the sales of Licensed Products.



     13.6 Upon termination of this Agreement for any reason during the Exclusive Period, any
sublicensee not then in default shall have the right to seek a license from JOHNS HOPKINS under the
same terms and conditions as set forth hereunder.



     13.7 [NOTE: As amended in Amendment No. 1 to the JHU Agreement.] The provisions of Paragraph
8.1, Article IX and Article X, Paragraph 4.5 and Paragraph 6.6 shall survive termination of this
Agreement.



ARTICLE XV — MISCELLANEOUS PROVISIONS




     15.1 This Agreement shall be construed, governed, interpreted and applied in accordance with
the laws of the State of Maryland, U.S.A., except that questions affecting the validity,
construction and effect of any patent licensed hereunder, shall be determined by the law of the
country in which the patent was granted.



     15.2 The parties hereto acknowledge that this Agreement sets forth the entire Agreement and
understanding of the parties hereto as to the subject matter hereof, and shall not be subject to
any change or modification except by the execution of a written instrument subscribed to by the
parties hereto.



     15.3 The provisions of this Agreement are severable, and in the event that any provisions of
this Agreement shall be determined to be invalid or unenforceable under any controlling body of the
law, such invalidity or unenforceability shall not in any way affect the validity or enforceability
of the remaining provisions hereof.



     15.4 LICENSEE agrees to mark the Licensed Products sold in the United States with all
applicable United States patent numbers. All Licensed Products shipped to or sold in other
countries shall be marked in such a manner as to conform with the patent laws and practice of the
country of manufacture or sale.



     15.5 The failure of any party to assert a right hereunder or to insist upon compliance with
any term or condition of this Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition by the other party.



     15.6 Claims, disputes, or controversies concerning the validity, construction, or effect of
any patent licensed hereunder shall be resolved in any court having jurisdiction thereof.



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     15.7 A grant application under the Advanced Technology Program was filed on March 29, 1995
(Appendix C). If a grant is awarded, any Invention made pursuant thereto where an investigator at
JOHNS HOPKINS is the sole inventor or a coinventor shall be assigned to LICENSEE. Such Invention
shall be assigned hereunder and shall thereafter fall within the definition of Patent Rights and
therefore shall be subject to Sections 3.2, 3.3 and 3.4 hereof and to the royalty payments required
by Sections 4.1(c)(i), 4.1(d) and 4.4 hereof as part of the rights licensed hereunder.



     15.8 [NOTE: As amended in Amendment No. 1 to the JHU Agreement.] With respect to “Methods for
Inactivating Target DNA and For Detecting Conformation Change in a Nucleic Acid”, Inventor,
Srinivasan Chandrasegaran, US Patent Application SN 08/647,449, Filed 5/7/96 (JHU Docket: C-1288),
LICENSEE hereby acknowledges and agrees that Dr. Chandrasegaran is the sole inventor of this
property.



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Copy
of Selected Provisions from the MIT Agreement




2 — GRANT




     2.1 M.I.T. hereby grants to LICENSEE the right and license in the TERRITORY to practice under
the PATENT RIGHTS and, to the extent not prohibited by other patents, to make, have made, use,
lease, sell and import LICENSED PRODUCTS and to practice the LICENSED PROCESSES, until the
expiration of the last to expire of the PATENT RIGHTS, unless this Agreement shall be sooner
terminated according to the terms hereof.



     2.2 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the United States shall be
manufactured substantially in the United States.



     2.3 In order to establish exclusivity in the FIELDS OF USE for LICENSEE, M.I.T. hereby agrees
that it shall not grant any other license to make, have made, use, lease, sell and import LICENSED
PRODUCTS or to utilize LICENSED PROCESSES subject to the royalty-free, nonexclusive license rights
of the United States Government per FAR 52.227-11, in the TERRITORY for the FIELDS OF USE.



     2.4 [NOTE: As amended in the First Amendment to the MIT Agreement.] LICENSEE and M.I.T. agree
that neither party shall assert the Patent Rights against not-for-profit institutions in their
conduct of research, provided, however, that if a not-for-profit institution practices under the
Patent Rights to conduct high throughput drug screening on behalf of a commercial entity, then the
Patent Rights may be asserted against that institution.



     2.5 M.I.T. reserves the right to practice under the PATENT RIGHTS and to allow third parties
to practice under the PATENT RIGHTS in all fields of use for noncommercial research purposes.



     2.6 LICENSEE shall have the right to enter into sublicensing agreements for the rights,
privileges and licenses granted hereunder only in the FIELDS OF USE. Upon any termination of this
Agreement, sublicensees’ rights shall also terminate, subject to Paragraph 13.6 hereof.



     2.7 [NOTE: As amended in the Eighth Amendment to the MIT Agreement.] With respect to each
sublicense agreement [in the Reagent Field], LICENSEE agrees to do the following:



          (a) incorporate the language of Article 2 (other than Paragraph 2.8), Article 9, Article 10,
and Paragraph 15.4 into each sublicense agreement (but in each case solely to the extent such
language is applicable to the rights granted in such sublicense agreement), so that these Articles
shall be binding upon the applicable sublicensee as if they were a party to this Agreement;




          (b) include in each such sublicense agreement language that is reasonably sufficient to
enable LICENSEE to comply with its obligations under Paragraph 2.8 and Articles 5, 7, 12, 13 and 15
(other than Paragraph 15.4);




          (c) use commercially reasonable effort to obtain a indemnity from the applicable sublicensee
in favor of LICENSEE that is substantially similar in scope of the indemnity set forth in




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Article 8, and include M.I.T. as an indemnified party under any such indemnity on the same terms as
LICENSEE.




     2.8 [NOTE: Intentionally omitted.]



     2.9 Nothing in this Agreement shall be construed to confer any rights upon LICENSEE by
implication, estoppel or otherwise as to any technology or patent rights of M.I.T. or any other
entity other than the PATENT RIGHTS, regardless of whether such patent rights shall be dominant or
subordinate to any PATENT RIGHTS.



PARAGRAPH 4.1(b)




     4.1 [NOTE: As amended in the Fifth Amendment to the MIT Agreement.] For the rights,
privileges and license granted hereunder, LICENSEE shall pay royalties to M.I.T. in the manner
hereinafter provided to the end of the term of the PATENT RIGHTS or until this Agreement shall be
terminated:




b. License Maintenance Fees of (i) $[***] per year on January 1, 2002 and each January 1
thereafter until the January 1 following the issuance of the first protein DNA claims
and; (ii) $[***] per year beginning the January 1 following the issuance of the first of
the protein-DNA claims and every January 1 thereafter; provided, however, License
Maintenance Frees may be credited to Running Royalties subsequently due on NET SALES for
each said year, if any. License Maintenance Fees paid in excess of Running Royalties
shall not be creditable to Running Royalties for future years.



9 — EXPORT CONTROLS




     LICENSEE acknowledges that it is subject to United States laws and regulations controlling the
export of technical data, computer software, laboratory prototypes and other commodities (including
the Arms Export Control Act, as amended and the United States Department of Commerce Export
Administration Regulations). The transfer of such items may require a license from the cognizant
agency of the United States Government and/or written assurances by LICENSEE that LICENSEE shall
not export data or commodities to certain foreign countries without prior approval of such agency.
M.I.T. neither represents that a license shall not be required nor that, if required, it shall be
issued.



10 — NON-USE OF NAMES




     LICENSEE shall not use the names or trademarks of the Massachusetts Institute of Technology or
Lincoln Laboratory, nor any adaptation thereof, nor the names of any of their employees, in any
advertising, promotional or sales literature without prior written consent obtained from M.I.T., or
said employee, in each case, except that LICENSEE may state that it is licensed by M.I.T. under one
or more of the patents and/or applications comprising the PATENT RIGHTS.



PARAGRAPH 13.6




     13.6 [NOTE: As amended in the Eighth Amendment to the MIT Agreement.] Upon termination
of this Agreement for any reason, any sublicensee not then in default shall have the right to seek
a





 




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




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




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Copy
of Selected Provisions from the Utah Agreement




     4.3 For each SUBLICENSE granted by LICENSEE under the terms of this AGREEMENT, LICENSEE shall
pay to LICENSOR (i) a sublicense fee of twenty thousand dollars ($20,000) within thirty (30) days
of execution of each sublicense and (ii) an annual sublicense fee of ten thousand dollars ($10,000)
for each year (excluding the first year) that such sublicense is in effect, payable within thirty
(30) days of each anniversary of the effective date of such sublicense agreement.



     6.2 As consideration for the license under this AGREEMENT, LICENSEE shall pay to LICENSOR an
annual maintenance fee of twenty thousand dollars ($20,000) on or before each anniversary of the
EFFECTIVE DATE of this AGREEMENT.



     13.1 If LICENSEE should: (a) fail to deliver to LICENSOR any statement or report required
hereunder when due (except where such payment is being contested in good faith); (b) fail to make
any payment at the time that the same should be due; (c) violate or fail to perform any covenant,
condition, or undertaking of the AGREEMENT to be performed by it hereunder; or (d) file a
bankruptcy action, or have a bankruptcy action against it (which action remains undismissed for a
period of sixty (60) days), or become insolvent; enter into a composition with creditors or have a
receiver appointed for it; then LICENSOR may give written notice of such default, and its intent to
terminate this AGREEMENT, to LICENSEE. If LICENSEE should fail to cure such default within thirty
(30) days of such notice, the rights, privileges, and license granted hereunder shall automatically
terminate; provided, however, that the cure period may be extended by sixty (60) days if LICENSEE
conveys a written statement of its intent and plan to cure such default, and such plan is accepted
by the LICENSOR, within thirty (30) days of the automatic termination date.



     13.2 If LICENSEE shall cease to carry on its business with respect to the rights granted in
this AGREEMENT, this AGREEMENT shall terminate upon thirty (30) days written notice by LICENSOR.



     13.4 [NOTE: As amended in the (first) Amendment (dated February 22, 2007) to the Utah
Agreement.] Notwithstanding anything to the contrary in this AGREEMENT, in the event that LICENSOR
terminates this AGREEMENT pursuant to Section 13.1 or 13.2, each sublicense granted by LICENSEE to
a SUBLICENSEE then in good standing under the terms of its sublicense agreement will survive such
termination (as a direct license from LICENSOR), provided that (a) such direct license shall be
subject to the same non-financial terms and conditions as those in this AGREEMENT, and LICENSOR
shall not have any obligations to such SUBLICENSEE other than LICENSOR’s obligations to LICENSEE as
set forth herein; (b) such SUBLICENSEE (or if there is at such time more than one such SUBLICENSEE,
such SUBLICENSEES severally and jointly) shall be required to make any annual maintenance payments
due pursuant to Section 6.2; and (c) each such SUBLICENSEE shall be required to make any monetary
payment(s) that, had this AGREEMENT not been terminated, LICENSEE would have been required to make
under this AGREEMENT as a result of the license to, or activities of, such SUBLICENSEE, including
without limitation the annual sublicensee fees due pursuant to Section 4.3(ii) with respect to such
SUBLICENSEE (which for clarity shall continue notwithstanding the conversion of such SUBLICENSEE’s
sublicense to a direct license from LICENSOR). Each such SUBLICENSEE shall be an intended
third-party beneficiary of this Section 13.4.




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