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                                                                    EXHIBIT 4.2

                            SANGAMO BIOSCIENCES, INC.

                AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

                                 MARCH ___, 2000



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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                          <C>
1.  Definitions.........................................................................       1


2.  Registration Rights.................................................................       2

    2.1.   Request for Registration.....................................................       3
    2.2.   Company Registration.........................................................       4
    2.3.   Obligations of the Company...................................................       5
    2.4.   Furnish Information..........................................................       6
    2.5.   Expenses of Demand Registration..............................................       7
    2.6.   Expenses of Company Registration.............................................       7
    2.7.   Underwriting Requirements....................................................       7
    2.8.   Delay of Registration........................................................       8
    2.9.   Indemnification..............................................................       8
    2.10.  Reports Under Securities Exchange Act of 1934................................      10
    2.11.  Form S-3 Registration........................................................      10
    2.12.  Assignment of Registration Rights............................................      11
    2.13.  Limitations on Subsequent Registration Rights................................      12
    2.14.  "Market Stand-Off" Agreement.................................................      12
    2.15.  Termination of Registration Rights...........................................      13

3.  Covenants of the Company............................................................      13

    3.1.   Delivery of Financial Statements.............................................      13
    3.2.   Termination of Information Covenant..........................................      13
    3.3.   Right of First Offer.........................................................      13
    3.4.   Board Representation and Observer Rights.....................................      15
    3.5.   Termination of Covenants.....................................................      15

4.  Miscellaneous.......................................................................      16

    4.1.   Successors and Assigns.......................................................      16
    4.2.   Governing Law................................................................      16
    4.3.   Counterparts.................................................................      16
    4.4.   Titles and Subtitles.........................................................      16
    4.5.   Notices......................................................................      16
    4.6.   Expenses.....................................................................      16
    4.7.   Amendments and Waivers.......................................................      16
    4.8.   Severability.................................................................      16
    4.9.   Aggregation of Stock.........................................................      17
    4.10.  Entire Agreement; Amendment; Waiver..........................................      17
Schedule A
Schedule B
</TABLE>


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                           INVESTORS' RIGHTS AGREEMENT

        THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT is made as of March
___, 2000, by and between Sangamo BioSciences, Inc., a Delaware corporation (the
"Company"), and the investors listed on Schedule A hereto and the Stockholders
listed on Schedule B hereto, each of which is herein referred to as an
"Investor."


                                    RECITALS

        WHEREAS, the Company and certain Investors (the "Series A Investors")
are parties to that certain Series A Preferred Stock Purchase Agreement dated
June 28, 1996 (the "Series A Agreement");

        WHEREAS, the Company and certain other Investors (the "Series B
Investors") are parties to that certain Series B Preferred Stock Purchase
Agreement dated November 6, 1997 (the "Series B Agreement");

        WHEREAS, the Company and certain Investors (the "Series C Investors")
are parties to that certain Series C Preferred Stock Purchase Agreement dated as
of August 24, 1999;

        WHEREAS, the Company and an Investor (the "Additional Series C
Investor") are parties to that certain Series C Preferred Stock Purchase
Agreement dated as of November 5, 1999;

        WHEREAS, the Company and an Investor (the "Final Series C Investor") are
parties to that certain Series C Preferred Stock Purchase Agreement dated as of
January 20, 2000;

        WHEREAS, the Company has granted the Series A, Series B and Series C
Investors and the Stockholders registration rights, information rights, rights
of first offer and other rights (collectively, the "Prior Rights") pursuant to
that certain Investor Rights Agreement dated November 5, 1999 (the "Prior Rights
Agreement");

        WHEREAS, in order to update certain information in Section 3.3(d), the
Company, the Series A Investors, the Series B Investors, the Series C Investors
and the Stockholders hereby agree to terminate the Prior Rights Agreement in its
entirety and to accept in lieu of the Prior Rights Agreement, the registration
rights, information rights, rights of first offer and other rights and
obligations provided for herein.

        NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

        1. Definitions. For purposes of this Investor Rights Agreement:

              (a) The term "Act" means the Securities Act of 1933, as amended.

              (b) The term "Form S-3" means such form under the Act as in effect
on the date hereof or any registration form under the Act subsequently adopted
by the SEC which


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permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.

              (c) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance with
Section 2.12 hereof.

              (d) The term "Major Holder" means any person owning of having the
right to acquire at least, (i) in the case of a holder of Series A Preferred
Shares, twenty-five thousand (25,000) shares (as adjusted for any stock
dividends, combinations or splits), or, (ii) in the case of a holder of Series B
Preferred Shares, one hundred thousand (100,000) shares (as adjusted for any
stock dividends, combinations or splits), or (iii) in the case of a holder of
Series C Preferred Shares, fifty thousand (50,000) shares (as adjusted for any
stock dividends, combinations or splits), of Registrable Securities or any
assignee thereof in accordance with Section 2.12 hereof.

              (e) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.

              (f) The term "Preferred Stock" shall mean collectively the
Company's Series A Preferred Stock, par value $0.01 per share, and the Company's
Series B Preferred Stock, par value $0.01 per share.

              (g) The term "register", "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.

              (h) The term "Registrable Securities" means (i) the Common Stock
issued and outstanding as of this date (as identified on Schedule B hereto),
(ii) the Common Stock issuable or issued upon conversion of the Preferred Stock,
and (iii) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of the shares referenced in (i) and (ii) above, excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which his rights under Section 2 are not assigned.

              (i) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.

              (j) The term "SEC" shall mean the Securities and Exchange
Commission.

        2. Registration Rights. The Company covenants and agrees as follows:

              2.1. Request for Registration.

                  (a) If the Company shall receive at any time six (6) months
after the effective date of the first registration statement for a public
offering of securities of the Company



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(other than a registration statement relating either to the sale of securities
to employees of the Company pursuant to a stock option, stock purchase or
similar plan or a SEC Rule 145 transaction), a written request from the Holders
of at least 40% of the outstanding Series A Preferred Stock and Series B
Preferred Stock and Series C Preferred Stock (collectively, the "Preferred
Stock"), or the Common Stock into which such Preferred Stock is convertible,
that the Company file a registration statement under the Act covering the
registration of all or a part of the Registrable Securities having a reasonably
anticipated aggregate offering price, net of underwriting discounts and
commissions that exceeds $7,500,000, then the Company shall:

                       (i) within ten (10) days of the receipt thereof, give
written notice of such request to all Holders; and

                       (ii) effect, as soon as practicable, the registration
under the Act of all Registrable Securities which the Holders request to be
registered, subject to the limitations of subsection 2.1(b), within twenty (20)
days of the mailing of such notice by the Company in accordance with Section
4.5.

                  (b) If the Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to subsection 2.1(a) and the
Company shall include such information in the written notice referred to in
subsection 2.1(a). The underwriter will be selected by the Company and shall be
reasonably acceptable to a majority in interest of the Initiating Holders. In
such event, the right of any Holder to include his Registrable Securities in
such registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 2.3(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 2.1, if either the underwriter or the Company advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Initiating Holders shall so advise all
Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder.

                  (c) Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
2.1, a certificate signed by the Chief Executive Officer of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to defer
taking action with respect to such filing for a period of not more than 120 days
after receipt of the request of the Initiating Holders; provided, however, that
the Company may not utilize this right more than once in any twelve-month
period.



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                  (d) In addition, the Company shall not be obligated to effect,
or to take any action to effect, any registration pursuant to this Section 2.1:

                       (i) After the Company has effected one registration
pursuant to this Section 2.1 and such registration has been declared or ordered
effective;

                       (ii) During the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of filing of, and
ending on a date one hundred eighty (180) days after the effective date of, a
registration subject to Section 2.2 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or

                       (iii) If the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 2.11 below.

              2.2. Company Registration.

                  (a) If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock or other
securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, a registration on
any form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered), the Company shall, at such time, promptly give each
Major Holder written notice of such registration. Upon the written request of
each Major Holder given within twenty (20) days after mailing of such notice by
the Company in accordance with Section 4.5, the Company shall, subject to the
provisions of Section 2.7, cause to be registered under the Act all of the
Registrable Securities that each such Major Holder has requested to be
registered.

                  (b) If the Company intends to distribute the Registrable
Securities by means of an underwriting, it shall so advise the Major Holders in
the written notice referred to in subsection 2.2(a). The underwriter will be
selected by the Company and shall be reasonably acceptable to a majority in
interest of the Major Holders. In such event, the right of any Major Holder to
include his Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Major Holders and such Holder) to the
extent provided herein. All Major Holders proposing to distribute their
securities through such underwriting shall (together with the Company as
provided in subsection 2.3(e)) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting.
Notwithstanding any other provision of this Section 2.2, if either the
underwriter or the Company advises the Major Holders in writing that, in the
good faith determination of the underwriter, marketing factors require a
limitation of the number of shares to be underwritten, then the number of shares
of Registrable Securities that may be included in the underwriting shall be
allocated among all Major Holders thereof, in



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proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company owned by each Major Holder; provided, however, that the number of
shares of Registrable Securities held by the Company to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting. In the event that the underwriting set forth in
this Section 2.2(b) is the initial public offering of the Company's securities,
the Major Holders may be excluded entirely if either the underwriters or the
Company make the determination set forth above.

              2.3. Obligations of the Company. Whenever required under this
Section 2 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:

                  (a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or until the distribution contemplated in the Registration Statement
has been completed; provided, however, that (i) such 120-day period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Act, permits an offering on a continuous or delayed
basis, and provided further that applicable rules under the Act governing the
obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (I) includes any prospectus required by Section
10(a)(3) of the Act or (II) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (I) and
(II) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the 1934 Act in the registration statement.

                  (b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.

                  (c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.

                  (d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general



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consent to service of process in any such states or jurisdictions, unless the
Company is already subject to service in such jurisdiction and except as may be
required by the Act.

                  (e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

                  (f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.

                  (g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.

                  (h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.

                  (i) Use its best efforts to furnish, at the request of any
Holder requesting registration of Registrable Securities pursuant to this
Section 2, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this Section
2, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities and
(ii) a letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.

              2.4. Furnish Information.

                  (a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 2 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.

                  (b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.1 or Section 2.11 if, due to the
operation of subsection 2.4(a), the number of shares or the anticipated
aggregate offering price of the



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Registrable Securities to be included in the registration does not equal or
exceed the number of shares or the anticipated aggregate offering price required
to originally trigger the Company's obligation to initiate such registration as
specified in subsection 2.1(a) or subsection 2.11(b)(2), whichever is
applicable.

              2.5. Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 2.1, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the selling Holders hereunder; if Company counsel does not make
itself available for this purpose, the Company will pay the reasonable fees and
disbursements of one counsel for the selling Holders) shall be borne by the
Company; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 2.1 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
participating holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 2.1; provided further, however, that if
at the time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business, or prospects of the Company from that known
to the Holders at the time of their request and have withdrawn the request with
reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Section 2.1.

              2.6. Expenses of Company Registration. The Company shall bear and
pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 2.2 for each Holder (which right may be assigned as provided
in Section 2.12), including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of counsel for the Company in its
capacity as counsel to the selling Holders hereunder; if Company counsel does
not make itself available for this purpose, the Company will pay the reasonable
fees and disbursements of one counsel for the selling Holders selected by them,
but excluding underwriting discounts and commissions relating to Registrable
Securities.

              2.7. Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 2.2 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters and Company determine in their sole discretion will
not, jeopardize the success of the offering by the Company. If the total amount
of securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters and Company determine in their sole discretion
is compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters and Company determine
in their sole discretion will not jeopardize the success of



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the offering (the securities so included to be apportioned pro rata among the
selling stockholders according to the total amount of securities entitled to be
included therein owned by each selling Stockholder. For purposes of the
preceding parenthetical concerning apportionment, for any selling stockholder
which is a holder of Registrable Securities and which is a partnership or
corporation, the partners, retired partners and stockholders of such holder, or
the estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "selling stockholder," and any pro-rata reduction with respect to such
"selling stockholder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such "selling stockholder," as defined in this sentence.

              2.8. Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 2.

              2.9. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 2:

                  (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 2.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.

                  (b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages,



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or liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 2.9(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
2.9(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subsection 2.9(b) exceed the gross
proceeds from the offering received by such Holder.

              (c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.9, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.9.

              (d) If the indemnification provided for in this Section 2.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.



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                  (e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.

                  (f) The obligations of the Company and Holders under this
Section 2.9 shall survive the completion of any offering of Registrable
Securities in a registration statement, whether or not the registration was
pursuant to this Section 2.

              2.10. Reports Under Securities Exchange Act of 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:

                  (a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;

                  (b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;

                  (c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and

                  (d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.

              2.11. Form S-3 Registration. In case the Company shall receive
from a Major Holder or Major Holders of the Registrable Securities a written
request or requests that the Company effect a registration on Form S-3 and any
related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Major Holder or Major Holders, the Company
will:

                  (a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Major Holders; and



                                       10
<PAGE>   13

                  (b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Major
Holder's or Major Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
other Major Holder or Major Holders joining in such request as are specified in
a written request given within fifteen (15) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to this Section 2.11: (1) if Form S-3 is not available for such offering by the
Major Holders; (2) if the Major Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public (net of any underwriters' discounts or commissions) of less
than $1,000,000; (3) if the Company shall furnish to the Major Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such Form S-3 Registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than one hundred fifty (150) days after receipt of the request of the Major
Holder or Major Holders under this Section 2.11; provided, however, that the
Company shall not utilize this right more than once in any twelve month period;
(4) if the Company has, within the twelve (12) month period preceding the date
of such request, already effected one registration on Form S-3 for the Major
Holders pursuant to this Section 2.11; or (5) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.

                  (c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Major Holders. All expenses incurred in connection
with two (2) registrations requested pursuant to Section 2.11, including
(without limitation) all registration, filing, qualification, printer's and
accounting fees and the reasonable fees and disbursements of counsel for the
selling Major Holder or Major Holders and counsel for the Company, but excluding
any underwriters' discounts or commissions associated with Registrable
Securities, shall be borne by the Company. Thereafter, all expenses incurred in
connection with a registration requested pursuant to Section 2.11, including
(without limitation) all registration, filing, qualification, printer's and
accounting fees and the reasonable fees and disbursements of counsel for the
selling Major Holder or Major Holders and counsel for the Company, but excluding
any underwriters' discounts or commissions associated with Registrable
Securities, shall be borne pro rata by the Major Holder or Major Holders
participating in the Form S-3 Registration. Registrations effected pursuant to
this Section 2.11 shall not be counted as demands for registration or
registrations effected pursuant to Sections 2.1 or 2.2, respectively.

              2.12. Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 2 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities who, after such assignment or transfer, holds at
least (i) in the case of Series A Preferred Shares, twenty-five thousand
(25,000) shares, (ii) in the case of Series B Preferred Shares, one hundred
thousand (100,000) shares, or (iii) in the case of Series C Preferred Shares,
fifty thousand (50,000) shares,



                                       11
<PAGE>   14

of Registrable Securities (subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations), provided: (a) the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned; (b) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement, including without limitation the provisions of
Section 2.14 below; and (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act. For the purposes of
determining the number of shares of Registrable Securities held by a transferee
or assignee, the holdings of transferees and assignees of a partnership who are
partners or retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the partnership; provided that all assignees and
transferees who would not qualify individually for assignment of registration
rights shall have a single attorney-in-fact for the purpose of exercising any
rights, receiving notices or taking any action under this Section 2.

              2.13. Limitations on Subsequent Registration Rights. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
2.1 hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of the
Registrable Securities of the Holders which is included or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in subsection
2.1(a) or within one hundred twenty (120) days of the effective date of any
registration effected pursuant to Section 2.1.

              2.14. "Market Stand-Off" Agreement. Each Holder hereby agrees
that, during the period of duration specified by the Company and an underwriter
of common stock or other securities of the Company, following the effective date
of a registration statement of the Company filed under the Act, it shall not, to
the extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except common stock included in such
registration; provided, however, that such market stand-off time period shall
not exceed one hundred eighty (180) days.

              In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.

              Notwithstanding the foregoing, the obligations described in this
Section 1.15 shall not apply to a registration solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms which may be promulgated in the future,
or a registration relating solely to a Commission



                                       12
<PAGE>   15

Rule 145 transaction on Form S-14 or Form S-15 or similar forms which may be
promulgated in the future.

              2.15. Termination of Registration Rights.

                  (a) The right of any Holder to request registration or
inclusion in registration pursuant to this Section 1 shall terminate on the
earlier of (i) two years after the closing of an initial public offering of
Common Stock of the Company; or (ii) such date as all shares of Registrable
Securities held or entitled to be held upon conversion by such Holder may
immediately be sold under Rule 144 during any ninety (90) day period.

                  (b) No Holder shall be entitled to exercise any right provided
for in this Section 2 while such Holder owns less than one percent (1%) of the
Company's Common Stock and would continue to hold less than one percent (1%) of
the Company's Common Stock following conversion of all of such Holder's
Preferred Stock to Common Stock.

        3. Covenants of the Company.

              3.1. Delivery of Financial Statements. The Company shall
automatically deliver to each Major Holder copies of its quarterly and annual
unaudited or audited, as the case may be, financial statements, prepared in
accordance with generally accepted accounting principles ("GAAP").

              3.2. Termination of Information Covenant. The covenant set forth
in Section 3.1 shall terminate and shall be of no further force or effect when
the sale of securities pursuant to a registration statement filed by the Company
under the Act in connection with the firm commitment underwritten offering of
its securities to the general public is consummated or when the Company first
becomes subject to the periodic requirements of Sections 12(g) or 15(d) of the
1934 Act, whichever event shall first occur.

              3.3. Right of First Offer. Subject to the terms and conditions
specified in this paragraph 3.3, the Company hereby grants to each Major
Investor a right of first offer with respect to future sales by the Company of
its Shares (as hereinafter defined). For purposes of this Section 3.3 a "Major
Investor" shall mean any person who holds at least, (i) in the case of Series A
Preferred Stock, twenty-five thousand (25,000) shares (as adjusted for any stock
dividends, combinations or splits) of Series A Preferred Stock (or the Common
Stock issued upon the conversion thereof) or, (ii) in the case of Series B and
Series C Preferred Stock, sixteen thousand (16,000) shares (as adjusted for any
stock dividends, combinations or splits) of Series B and Series C Preferred
Stock (or the Common Stock issued upon conversion thereof) of the Company. For
purposes of this Section 3.3, Major Investor includes any general partners and
affiliates of a Major Investor. An investor shall be entitled to apportion the
right of first offer hereby granted it among itself and its partners and
affiliates as it deems appropriate.

              Each time the Company proposes to offer any shares of, or
securities convertible into or exercisable for any shares of, any class of its
capital stock ("Shares"), the Company shall first make an offering of such
Shares to each Major Investor in accordance with the following provisions:



                                       13
<PAGE>   16

                  (a) The Company shall deliver a notice by certified mail
("Notice") to the Major Investors stating (i) its bona fide intention to offer
such Shares, (ii) the number of such Shares to be offered, and (iii) the price
and terms, if any, upon which it proposes to offer such Shares.

                  (b) By written notification received by the Company, within
twenty (20) calendar days after giving of the Notice, the Major Investor may
elect to purchase or obtain, at the price and on the terms specified in the
Notice, up to that portion of such Shares which equals the proportion that the
number of shares of common stock issued and held, or issuable upon conversion of
the Preferred Stock then held, by such Major Investor bears to the total number
of shares of Common Stock of the Company then outstanding (assuming full
conversion of all convertible securities issued or held, or issuable upon
conversion of the Series A Preferred Stock and Series B Preferred Stock and
Series C Preferred Stock then held, by all the Major Investors). The Company
shall promptly, in writing, inform each Major Investor which purchases all the
shares available to it ("Fully-Exercising Holder") of any other Major Investor's
failure to do likewise. During the ten-day period commencing after such
information is given, each Fully-Exercising Holder shall be entitled to obtain
that portion of the Shares for which Major Investors were entitled to subscribe
but which were not subscribed for by the Major Investors which is equal to the
proportion that the number of shares of common stock issued and held, or
issuable upon conversion of the Preferred Stock then held, by such
Fully-Exercising Holder bears to the total number of shares of common stock
issued and held, or issuable upon conversion of the Preferred Stock then held,
by all Fully-Exercising Holders who wish to purchase some of the unsubscribed
shares.

                  (c) If all Shares referred to in the Notice which Major
Investors are entitled to obtain pursuant to subsection 3.3(b) hereof are not
purchased by such Major Investors, the Company may, during the thirty (30) day
period following the expiration of the period provided in subsection 3.3(b)
hereof, offer the remaining unsubscribed portion of such Shares to any person or
persons at a price not less than, and upon terms no more favorable to the
offeree than those specified in the Notice. If the Company does not enter into
an agreement for the sale of the Shares within such period, or is such agreement
is not consummated within thirty (30) days of the execution thereof, the right
provided hereunder shall be deemed to be revived and such Shares shall not be
offered unless first reoffered to the Major Investors in accordance herewith.

                  (d) The right of first offer in this paragraph 3.3 shall not
be applicable (i) to the issuance or sale of not to exceed One Million Eight
Hundred Fifty Thousand (1,850,000) shares of common stock (or options therefor)
to employees for the primary purpose of soliciting or retaining their
employment, (ii) to or after consummation of a bone fide, firmly underwritten
public offering of shares of common stock, registered under the Act pursuant to
a registration statement on Form S-1, at an offering price of at least $12.00
per share (appropriately adjusted for any stock split, dividend, combination or
other recapitalization) and $7,500,000 in the aggregate, (iii) the issuance of
securities pursuant to the conversion or exercise of convertible or exercisable
securities, (iv) the issuance of securities in connection with a bona fide
business acquisition of or by the Company, whether by merger, consolidation,
sale of assets, sale or exchange of stock or otherwise or (v) the issuance of
stock, warrants or other securities or



                                       14
<PAGE>   17

rights to persons or entities with which the Company has business relationships
provided such issuances are for other than primary equity financing purposes.

                  (e) The right of first refusal set forth in this Section 3.3
may not be assigned or transferred, except that (i) such right is assignable by
each Major Investor to any wholly owned subsidiary or parent of, or to any
corporation or entity that is, within the meaning of the Act, controlling,
controlled by or under common control with, any such Major Investor, and (ii)
such right is assignable between and among any of the Holders.

              3.4. Board Representation and Observer Rights.

                  (a) Board Representation. The Board of Directors shall be,
immediately following the Closing (as defined in the Stock Purchase Agreement),
made up of Edward O. Lanphier II, John W. Larson, Michael Wood, William Gerber,
Herbert Boyer, and one member to be chosen by the holders of a majority of
Series B and Series C Preferred Stock (the "Series B/C Director"), who shall be
reasonably acceptable to the holders of a majority of the Common Stock. With
respect to the Series B/C Director, if requested, Lombard Odier & Cie hereby
agrees to vote its shares of Series B and Series C Preferred Stock to elect as
the Series B/C Director one person designated by Stephens Group, Inc. as long as
Stephens Group, Inc. owns not less than fifty percent (50%) of the shares of the
Series C Preferred Stock it holds upon the closing of its purchase of Series C
Preferred Stock (or an equivalent amount of Common Stock issued upon conversion
thereof). Any vacancy occurring because of the death, resignation or removal of
the Series B/C Director shall be filled according to this Section 3.4(a).

                  (b) Observer Rights. So long as Stephens Group, Inc. (i) owns
not less than fifty percent (50%) of the shares of the Series C Preferred Stock
it holds upon the closing of its purchase of Series C Preferred Stock (or an
equivalent amount of Common Stock issued upon conversion thereof) and (ii) does
not appoint the Series C Director, the Company shall invite a representative of
Stephens Group, Inc. to attend, either personally or telephonically, all
meetings of its Board of Directors in a nonvoting observer capacity and, in this
respect, shall give such representative copies of all notices, minutes,
consents, and other materials that it provides to its directors; provided,
however, that such representative shall agree to hold in confidence and trust
and to act in a fiduciary manner with respect to all information so provided;
and, provided further, that the Company reserves the right to withhold any
information and to exclude such representative from any portion of any meeting
if access to such information or attendance thereat could adversely affect the
attorney-client privilege between the Company and its counsel or would result in
disclosure of confidential or proprietary information to such representative of
if such Investor or its representative is a direct competitor of the Company.

              3.5. Termination of Covenants. The covenants set forth in this
Section 3 shall terminate and be of no further force or effect upon the
consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the firm commitment
underwritten offering of its securities to the general public.



                                       15
<PAGE>   18

        4. Miscellaneous.

              4.1. Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

              4.2. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.

              4.3. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

              4.4. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

              4.5. Notices. All notices or other communications hereunder shall
be in writing (including by facsimile transmission) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth below their names on the signature pages hereof,
or at or to such other address or facsimile number as shall be designated by any
party in a written notice to the other parties hereto. All such notices and
other communications shall be effective (i) if delivered by hand, when
delivered; (ii) if sent by mail, upon the earlier of the date of receipt or five
business days after deposit in the mail, first class (or, if to international
addresses, by express courier); and (iii) if sent by facsimile transmission,
when sent.

              4.6. Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

              4.7. Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.

              4.8. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and



                                       16
<PAGE>   19

the balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

              4.9. Aggregation of Stock. All shares of Registrable Securities
held or acquired by affiliated entities or persons shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.

              4.10. Entire Agreement; Amendment; Waiver. This Agreement
(including the Schedules hereto) constitutes the full and entire understanding
and agreement between the parties with regard to the subjects hereof and
thereof.



                                       17
<PAGE>   20

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       SANGAMO BIOSCIENCES, INC.

                                       By:
                                          ------------------------------------
                                          Edward O. Lanphier II, President








                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   21

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       COMMON STOCKHOLDER

                                       ------------------------------------
                                       Edward O. Lanphier II








                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   22

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       COMMON STOCKHOLDER

                                       ------------------------------------
                                       Michael C. Wood








                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   23

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       SERIES A PREFERRED STOCKHOLDER

                                       ------------------------------------
                                       John W. Larson








                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   24

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                             SERIES B AND SERIES C PREFERRED
                             STOCKHOLDER

                             JAFCO CO., LTD

                             By:
                                ------------------------------------
                                Mitsumasa Murase, President

                             JAFCO R-3 INVESTMENT ENTERPRISE PARTNERSHIP
                             JAFCO JS-3 INVESTMENT ENTERPRISE PARTNERSHIP
                             JAFCO G-6 (A) INVESTMENT ENTERPRISE PARTNERSHIP
                             JAFCO G-6 (B) INVESTMENT ENTERPRISE PARTNERSHIP
                             JAFCO G-7 (A) INVESTMENT ENTERPRISE PARTNERSHIP
                             JAFCO G-7 (B) INVESTMENT ENTERPRISE PARTNERSHIP



                             By:
                                ------------------------------------
                                Mitsumasa Murase, President
                                JAFCO Co., Ltd.
                                Executive Partner








                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   25

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       SERIES B AND SERIES C PREFERRED
                                       STOCKHOLDER

                                       LOMBARD ODIER & CIE

                                       By:
                                       Name:    ________________________________
                                       Title:   ________________________________








                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   26

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       SERIES C PREFERRED STOCKHOLDER

                                       HALIFAX FUND LP

                                       By:  The Palladin Group L.P.
                                            as Investment Manager

                                       By:
                                          ------------------------------------
                                            Robert L. Chender








                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   27

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       SERIES C PREFERRED STOCKHOLDER

                                       STEPHENS-SANGAMO BIOSCIENCES LLC

                                       By:
                                          ------------------------------------









                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   28

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                       SERIES C PREFERRED STOCKHOLDER

                                       WILLIAM J. RUTTER

                                       By:
                                          ------------------------------------









                            SANGAMO BIOSCIENCES, INC.
                 SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT


<PAGE>   29

                                   SCHEDULE A

                               SCHEDULE OF HOLDERS

                            SERIES A PREFERRED STOCK


<TABLE>
<CAPTION>
            Holders                                     Shares of Series A Preferred Stock
            -------                                     ----------------------------------
<S>                                                     <C>
Alan J. Cohen                                                        25,000
Kenneth R. Kaszerman and Greg Moore                                  25,000
Robert W. Pittman                                                    50,000
Joseph Abrams Family Partnership,                                    75,000
ID #22-3191401
Peter Graf                                                          100,000
Steven Richman                                                      100,000
Peter M. Waldschutz                                                  50,000
Barry M. Weintraub, M.D., Profit Sharing Plan                        25,000
DLJSC Cust fbo Barry M. Weintraub TTEE
Bart M. Pasternak                                                    50,000
Altschul Investment Group                                            75,000
Arthur G. Altschul                                                   25,000
John W. Larson                                                       75,000
Thomas J. Marron                                                     25,000
von Reis/Altschul Family Partnership                                 50,000
</TABLE>


<PAGE>   30

                            SERIES B PREFERRED STOCK

<TABLE>
<CAPTION>
                                                                       Shares of Series B
Holders                                                                  Preferred Stock
-------                                                                  ---------------
<S>                                                                    <C>
JAFCO Co, Ltd.                                                              200,000

JAFCO R-3 Investment Enterprise Partnership                                 136,986

JAFCO JS-3 Investment Enterprise Partnership                                 82,194

JAFCO G-6 (A) Investment Enterprise Partnership                             123,287

JAFCO G-6 (B) Investment Enterprise Partnership                             123,287

JAFCO G-7 (A) Investment Enterprise Partnership                             167,123

JAFCO G-7 (B) Investment Enterprise Partnership                             167,123

W. Patrick McMullan                                                          16,667

Lawrence N. Lavine                                                           16,667

Tusher Family Limited Partnership                                            33,820

Robert and Jill Greenman                                                     84,548

UMB Bank, N.A. Trustee of the                                                84,548
Brobeck, Phleger & Harrison LLP
Retirement Savings Plan fbo
John W. Larson

Jon D. and Linda Gruber                                                      42,274

J. Wyatt Gruber                                                               8,455

Lindsay D. Gruber                                                             8,455

J. Patterson McBaine                                                         16,910

Overbrook Fund I, LLC                                                        45,656

Lombard, Odier & Cie                                                      1,000,000

Lehman Brothers, Inc.                                                        40,000
</TABLE>


<PAGE>   31

                            SERIES C PREFERRED STOCK

<TABLE>
<CAPTION>
                                                                       Shares of Series C
Holders                                                                  Preferred Stock
-------                                                                  ---------------
<S>                                                                    <C>
JAFCO Co, Ltd.                                                              222,223

Lombard, Odier & Cie                                                        222,222

Halifax Fund L.P.                                                           222,222

Stephens - Sangamo BioSciences LLC                                        1,000,000

William J. Rutter                                                           333,333
</TABLE>


<PAGE>   32

                                   SCHEDULE B

                            SCHEDULE OF STOCKHOLDERS


<TABLE>
<CAPTION>
Name of Purchaser                                         Shares of Common Stock
-----------------                                         ----------------------
<S>                                                       <C>
Edward O. Lanphier II                                              1,645,000

Michael C. Wood                                                      750,000
</TABLE>