Document:

<PAGE>   1

                                                                    EXHIBIT 10.9

                         ZFP MATERIAL TRANSFER AGREEMENT

        THIS ZFP CUSTOM SYNTHESIS AGREEMENT (the "Agreement") dated as of March
8, 1999 ("Effective Date"), is entered into between SANGAMO BIOSCIENCES, INC., a
Delaware corporation ("Sangamo"), having a place of business at Point Richmond
Tech Center, 501 Canal Boulevard, Suite A100, Richmond, California 94804, and
Japan Tobacco Inc., a Japanese corporation (the "Customer"), having a place of
business at    *     *     *     *     *     *     *     *     *     *.

        WHEREAS, Sangamo has rights and expertise regarding the design and
synthesis of certain zinc finger DNA recognition proteins and genes encoding
such proteins.

        WHEREAS, the Customer desires to have Sangamo design, assemble,
characterize and deliver to Customer certain of these materials solely for the
Customer's own internal research (except as otherwise expressly provided herein)
and preclinical development purposes on the terms and conditions set forth in
this Agreement.

        NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants set forth below, the parties agree as follows:

        I. Definitions. For purposes of this Agreement, the terms defined in
this Section 1 shall have the respective meanings set forth below:

               1.1 "Affiliate" shall mean, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by, or is under
common control with, such Person. A Person shall be in control of another Person
if it owns, or directly or indirectly controls, at least fifty percent (50%) of
the voting stock or other ownership interest of the other Person, or if it
directly or indirectly possesses the power to direct or cause the direction of
the management and policies of the other Person by any means. Notwithstanding
the foregoing, the government of Japan shall not be deemed an Affiliate.

               1.2 "Confidential Information" shall mean, with respect to a
party, all information (and all tangible and intangible embodiments thereof)
which is disclosed by such party to the other party and is marked as
"Confidential" by each party, identified as or otherwise acknowledged to be
confidential at the time of disclosure to the other party. Each party shall also
confirm in writing within thirty (30) days any Confidential Information that it
discloses orally. Notwithstanding the foregoing, Confidential Information of a
party shall not include information which the other party can establish by
written documentation (a) to have been publicly known prior to disclosure of
such information by the disclosing party to the other party, (b) to have become
publicly known, without the fault of the other party, subsequent to disclosure
of such information by the disclosing party to the other party, (c) to have been
received by the other party at any time from a source, other than the disclosing
party, rightfully having possession of and the right to disclose such
information, (d) to have been otherwise known by the other party prior to
disclosure of such information by the disclosing party to the other party, or
(e) to have been

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>   2

independently developed by employees or agents of the other party without access
to or use of such information disclosed by the disclosing party to the other
party.

               1.3 "Derivative" shall mean any protein or conjugate (including a
conjugate to a functional domain other than the Functional Domain) derived from
a ZFP, provided that the contiguous amino acid sequence of such ZFP has not been
altered, and the amino acid sequence of such protein or conjugate, except for
progeny.

               1.4 "Functional Domain" shall mean the functional domain set
forth on Schedule A, to which each ZFP shall be conjugated by Sangamo hereunder.

               1.5 "Genetic Material" shall mean, with respect to any ZFP or
Derivative, the nucleotide sequence encoding such ZFP or Derivative and all
fragments of such gene sequence.

               1.6 "Person" shall mean an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority or any other form of entity not
specifically listed herein.

               1.7 "Progeny" shall mean any biological progeny which contains
the ZFP Materials originated by the Customer including but not limited to cells
and animals.

               1.8 "Research Field" shall mean the research and preclinical
development of products and services for use in the diagnosis, prevention or
treatment of any disease, state or condition in humans (excluding the sale or
provision of, to any third parties, products and services that incorporate,
contain or use zinc finger DNA recognition proteins, genes that encode such
proteins, or fragments or derivatives of such proteins or genes).

               1.9 "Target(s)" shall mean the nucleotide sequence(s) set forth
on Schedule A.

               1.10 "ZFP" shall mean a zinc finger DNA recognition protein
binding to the Target which is designed by Sangamo and for which the Genetic
Material is delivered to the Customer hereunder, and the amino acid sequence of
such protein.

               1.11 "ZFP Materials" shall mean, collectively, the ZFPs, any
Derivatives, the Genetic Materials which encode any ZFP or Derivative, and all
fragments and derivatives of the foregoing.

        2. Design and Delivery of ZFP Materials.

               2.1 Promptly after the date of this Agreement, the Customer shall
deliver to Sangamo the nucleotide sequence for  *  Target(s) and such other
information as the parties mutually agree is reasonably necessary to assist
Sangamo in designing the ZFPs.   *     *     *     *     *     *     *     *   *
*     *     *     *     *     *     *     *     *     *     *     *     *.

               2.2 Sangamo shall design, assemble and characterize    *    zinc
finger DNA recognition proteins binding to each Target.

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>   3

               2.3 Within *  weeks after receipt of the information described in
Section 2.1 above, Sangamo shall deliver to the Customer      *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *    that is reasonably necessary
for the Customer to use the ZFP Materials in the Research Field.      *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *

               2.4 Within      *      days after delivery of the   *   Target to
Sangamo, the Customer shall pay Sangamo      *     *     *     *     *     *
   *      Within     *     * days after delivery of the    *   Target to
Sangamo, the Customer shall pay Sangamo      *     *     *     *     *     *
Such payment shall be in United States Dollars in immediately available funds
and shall be made by wire transfer from a United States bank located in the
United States to such bank account as designated by Sangamo to the Customer.

                      Within      *     *     days after the Customer receives
the materials and information described in Section 2.3 above, the Customer shall
make diligent and good faith efforts to confirm the activity of the relevant
Target ZFPs in the same assays that Sangamo has used pursuant to section 2.3.
The Customer shall then pay Sangamo      *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *   Payment shall be in United States Dollars in immediately
available funds and shall be made by wire transfer from a United States bank
located in the United States to such bank account as designated by Sangamo to
the Customer.

     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *

               2.5     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *

        3. Use of ZFP Materials.

               3.1 The Customer shall use the ZFP Materials (and all results of
its activities in the Research Field hereunder) solely in the Research Field,
and not for any other purpose.

               3.2 The Customer shall not alter the nucleotide sequence or amino
acid sequence of, or reverse engineer, the ZFP Materials; provided, however,
that the Customer may make Derivatives of the ZFPs.

               3.3 The Customer shall use the ZFP Materials under commercially
and scientifically reasonable containment conditions. The Customer shall not
transfer or provide access to the ZFP Materials to any other Person.
Notwithstanding the foregoing, the Customer

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>   4

may transfer the ZFP Materials to an Affiliate (without the further right to
transfer), provided (a) the Customer shall give prior express written notice
thereof to Sangamo, and (b) such Affiliate agrees to be bound by the terms and
conditions set forth in this Agreement binding on the Customer.      *
     *
     *
     *
     *                                                 The Customer shall limit
access to the ZFP Materials to those of its employees and consultants working on
its premises to the extent such access is reasonably necessary to the conduct of
its activities in the Research Field.

               3.4 The Customer shall not (and shall not attempt or purport to)
sell, license or otherwise transfer title to or an interest in, or otherwise
commercially use the ZFP Materials without the prior express written consent of
Sangamo.

               3.5 The Customer acknowledges that the ZFP Materials are
experimental in nature, may have unknown characteristics and have not been
approved for use in humans. The Customer shall use prudence and reasonable care
in the use, handling, storage, transportation, disposition and containment of
the ZFP Materials, and shall comply with all applicable laws, regulations and
guidelines applicable to the ZFP Materials or the use thereof and with any
safety precautions accompanying the ZFP Materials. The Customer shall not (and
shall not attempt or purport to) administer the ZFP Materials to humans, or file
or submit any regulatory application or other submission to obtain approval
therefor.

        4. Non-Assertion. Neither the Customer nor its Affiliates (nor their
respective successors, assigns, licensees or other transferees) shall enforce
(or attempt or purport to enforce) against Sangamo or its Affiliates, licensees
(of rights in zinc finger DNA recognition proteins) or manufacturers,
distributors or other purchasers (of zinc finger DNA recognition proteins) any
patent that claims zinc finger DNA recognition proteins, Genetic Materials
encoding such proteins, fragments of such proteins or Genetic Materials, or the
use of any of the foregoing, subject, expressly, to section 10.

        5. No Prohibition on Sangamo. Nothing in this Agreement shall prohibit
Sangamo from making, using, offering for sale, selling to others or importing
zinc finger DNA recognition proteins, genetic materials encoding such proteins,
fragments of such proteins or genetic materials or from licensing others to do
the same; provided, however, that Sangamo shall not design, assemble,
characterize and deliver to any other Person any zinc finger DNA recognition
protein binding to the Target (or genetic material encoding such protein) in
less time than the time frame published by Sangamo      *       for its custom
design, assembly, characterization and delivery of a zinc finger DNA recognition
protein (or genetic material encoding such protein) generally.

             *

               THE CUSTOMER ACKNOWLEDGES THAT THE ZFP MATERIALS ARE PROVIDED "AS
IS" AND THAT SANGAMO MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS
FOR ANY PARTICULAR PURPOSE OR NONINFRINGEMENT OF THE PATENT RIGHTS OR OTHER
INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER PERSON.

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>   5

                    *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *

                    *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *

        7. Confidentiality.

               7.1 For a period of five (5) years following the date of this
Agreement, subject to the Confidential Disclosure Agreement between Sangamo and
the Customer as of      *     *     *     *     *     , each party shall
maintain in confidence all Confidential Information disclosed by the other
party, and shall not use, disclose or grant the use of the Confidential
Information except on a need-to-know basis to its directors, officers, employees
and consultants to the extent such disclosure is reasonably necessary in
connection with such party's activities expressly authorized by this Agreement
and ordinary business operations. Each party shall notify the other promptly
upon discovery of any unauthorized use or disclosure of the other party's
Confidential Information.

               7.2 Sangamo shall not disclose the identity of the Target and the
information relating to the Target to any other Person without the prior consent
of the Customer. Neither party shall disclose any terms or conditions set forth
in this Agreement to any other Person without the prior consent of the other
party; provided, however, that a party may disclose the terms or conditions set
forth in this Agreement, (a) on a need-to-know basis to its legal and financial
advisors to the extent such disclosure is reasonably necessary in connection
with such party's activities as expressly permitted by this Agreement, and (b)
to a third party in connection with (i) an equity investment in such party, (ii)
a merger, consolidation or similar transaction by such party, or (iii) the sale
of all or substantially all of the assets of such party.

               7.3 The confidentiality obligations contained in this Section 7
shall not apply to the extent information is required to be disclosed to a
governmental agency or is necessary to file or prosecute patent applications or
to the extent that a party is required to disclose information by applicable
law, regulation or order of a court of competent jurisdiction, provided that
such party shall provide written notice to the other party and sufficient
opportunity to object to any such disclosure or to request confidential
treatment. The Customer may disclose Confidential Information of Sangamo
relating to the results of the Customer's research and evaluation hereunder to
any Affiliate.

               7.4 To the extent that a party is authorized by this Agreement to
disclose Confidential Information of the other party to any other Person, prior
to disclosure, such party shall obtain agreement of any such Person to hold in
confidence and not use the Confidential Information of the other party for any
purpose other than those permitted by this Agreement.

        8. Indemnification and Insurance.

               8.1 The Customer shall indemnify and hold harmless Sangamo from
and against all losses, liabilities, damages and expenses (including reasonable
attorneys' fees and costs) resulting from all claims, demands, actions and other
proceedings by any other Person to

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>   6

the extent arising from (a) the use by Sangamo of the Target under this
Agreement,     *     *     *     *     *     *     *     *     *     *(b) the
breach by the Customer of any covenant under this Agreement, or (c) the use by
the Customer or its Affiliates of the ZFP Materials or the results of their
respective activities hereunder, except in each case to the extent any such
loss, liability, damage or expense results from the negligence or willful
misconduct of Sangamo.

               8.2 EXCEPT AS OTHERWISE SET FORTH IN THIS SECTION 8, IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR LOSS OF PROFITS OR INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OF THE OTHER PARTY DIRECTLY OR INDIRECTLY
ARISING OUT OF THIS AGREEMENT.

        9. Miscellaneous.

               9.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to the
conflicts of law principles thereof.

               9.2 This Agreement does not grant to the Customer any license or
other right in the patent rights or other intellectual property rights of
Sangamo except and only to the extent necessary to enable the Customer to
conduct its internal research and preclinical development permitted hereby.

               9.3 For the period from the date of this Agreement through the
date that is one (1) year after the date Sangamo delivers to the Customer the
ZFP Materials and information under Section 2.3 above, neither the Customer nor
its Affiliates shall directly or indirectly solicit or in any manner encourage
any employee of Sangamo to leave its employ.

               9.4     *     *   shall assign or otherwise transfer (whether
voluntarily, by operation of law or otherwise) this Agreement or any right or
obligation hereunder, without the prior express written consent of    *     *
provided, however, that     *     *  may, without such consent, assign this
Agreement and its rights and obligations hereunder in connection with the
transfer or sale of all or substantially all of its business, or in the event of
its merger, consolidation, change in control or similar transaction. Any
permitted assignee shall assume all obligations of its assignor under this
Agreement. Any purported assignment or transfer in violation of this Section 9.4
shall be void.

               9.5 This Agreement contains the entire understanding of the
parties regarding the subject matter hereof. All express or implied
representations, agreements and understandings, either oral or written,
heretofore made are expressly superseded by this Agreement.

     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>   7

     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *

        12. Term and Termination

               12.1 This Agreement shall commence on the Effective Date and
unless sooner terminated as provided below, shall remain until the conclusion of
the evaluation stated in Section 3. At the conclusion of this term, this
Agreement may be amended or extended by mutual written consent of the parties.

               12.2 Upon termination of this Agreement, for any reason, Customer
shall return or destroy all unused Genetic Materials to Sangamo if so requested
by Sangamo, and shall provide written certification within thirty (30) days in
case of such destruction.

               12.3 The provisions of Sections 4, 6, 7, 8, 9, 10, and 11 shall
survive any termination of this Agreement.

        IN WITNESS WHEREOF, the parties have entered into the Agreement
effective as of the date first written above.

                                        SANGAMO BIOSCIENCES, INC.

                                        By:

                                        Title:

                                        JAPAN TOBACCO INC.

                                        By:

                                        Title:

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>   8

                                [JT LETTERHEAD]

June 18, 1999

Sangamo BioSciences, Inc.
Point Richmond Tech Center II
501 Canal Blvd., Suite A 100
Richmond, CA 94804

Attention: Dr. Eric Rhodes
           Director, Commercial Development

RE:        Amendment of ZFP Material Transfer Agreement dated March 9, 1999.

Gentlemen:

The purpose of this letter is to hereby confirm our mutual understanding that,
with respect to the March 9, 1999 ZFP Material Transfer Agreement, as set forth
below;

1. Section 7.1 shall be amended as follows:

   "For a period of five (5) years following the date of this Agreement, subject
   to the Confidential Disclosure Agreements between Sangamo and the Customer as
   of     *     *     *     *     *     *     *     *     *, each party shall
   maintain in confidence all Confidential Information disclosed by the other
   party, and shall not use, disclose or grant the use of the Confidential
   Information except on a need-to-know basis to its directors, officers,
   employees and consultants to the extent such disclosure is reasonably
   necessary in connection with such party's activities expressly authorized by
   this Agreement and ordinary business operations. Each party shall notify the
   other promptly upon discovery of any unauthorized use or disclosure of the
   other party's Confidential Information."

2. Schedule A shall be amended as set forth in the attachment hereto.

Please confirm your acknowledgement of and agreement with the above, by duly
signing and dating in the spaces provided below.

Sincerely yours,

/s/     *
-----------------------------
        *
Vice President

Sangamo BioSciences Inc.

By:  /s/ PETER BLUFORD
    --------------------------------

Name: Peter Bluford

Title: VP, Corp. Div.

Date: 7-1-99

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.<PAGE>   1
                                                                   EXHIBIT 10.10

--------------------------------------------------------------------------------
FORM CD-450               U.S. DEPARTMENT OF COMMERCE
(REV. 10-93)                                          [ ] GRANT  [X] COOPERATIVE
DAO 203-26                                                           AGREEMENT
                                                      --------------------------
                                                      ACCOUNTING CODE
                           FINANCIAL ASSISTANCE AWARD     **SEE BELOW
--------------------------------------------------------------------------------
RECIPIENT NAME                                        AWARD NUMBER
Sangamo BioSciences, Inc.                                 70NANB7H3000
--------------------------------------------------------------------------------
STREET ADDRESS                                        FEDERAL SHARE OF COST
9125 East 10th Drive Lowry Building 859                   $2,000,000
--------------------------------------------------------------------------------
CITY, STATE, ZIP CODE                                 RECIPIENT SHARE OF COST
Aurora, CO                                                $503,250
--------------------------------------------------------------------------------
AWARD PERIOD                                          TOTAL ESTIMATED COST
May 1, 1997 - April 30, 2000                              $2,503,250
--------------------------------------------------------------------------------
DEPARTMENT OF COMMERCE OPERATING UNIT
NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY, GRANTS OFFICE
BUILDING 301, ROOM B129, GAITHERSBURG, MARYLAND 20899-0001
--------------------------------------------------------------------------------
AUTHORITY
Authorized by Section 5131 of P.L. 100-418, codified at 15 USC 287n as modified
by P.L. 102-245 the Final Rule 15 CFR Part 295, and Program Announcement ATP
96-01
--------------------------------------------------------------------------------
PROJECT TITLE
Development of Novel DNA Binding Proteins as Antiviral Therapeutics
--------------------------------------------------------------------------------
This Award approved by the Grants Officer is issued in triplicate and
constitutes an obligation of Federal funding. By signing the three documents,
the Recipient agrees to comply with the Award provisions checked below and
attached. Upon acceptance by the Recipient, two signed Award documents shall be
returned to the Grants Officer and the third document shall be retained by the
Recipient. If not signed and returned by the Recipient within 15 days of
receipt, the Grants Officer may declare this Award null and void.

[X] Department of Commerce Financial Assistance Standard Terms and Conditions

[X] Special Award Conditions

[X] Line Item Budget

[ ] OMB Circular A-21, Cost Principles for Educational Institutions

[ ] OMB Circular A-87, Cost Principles for State and Local Governments

[X] OMB Circular A-110, Grants and Agreements with Institutions of Higher
    Education, Hospitals, and Other Nonprofit Organizations Uniform
    Administrative Requirements

[ ] OMB Circular A-122, Cost Principles for Nonprofit Organizations

[ ] 15 CFR Part 24, Uniform Administrative Requirements for Grants and
    Cooperative Agreements to State and Local Governments

[ ] 15 CFR Part 29a, Audit Requirements for State and Local Governments

[ ] 15 CFR Part 29b, Audit Requirements for Institutions of Higher Education
    and Nonprofit Organizations

[X] 48 CFR Part 31, Contract Cost Principles and Procedures

[X] Other(s): General Terms and Conditions Advanced Technology Program
- Single - 3/97 Advanced Technology Program Audit Guidelines - Single Recipient
11/96
**ACCOUNTING CODE: CC: 7/4701342 Obj. Cl. 4110 Req. No. 7/470-2109 $500,000
B-AE93-N-C-F-N-A-08-04000  EIN: 68-035-9556  470/F.Hoffer
--------------------------------------------------------------------------------
SIGNATURE OF DEPARTMENT OF COMMERCE GRANTS OFFICER    TITLE             DATE
Shamim Shaikh /s/ SHAMIM SHAIKH                       Grants Officer    3/31/97
--------------------------------------------------------------------------------
TYPED NAME AND SIGNATURE OF AUTHORIZED                TITLE             DATE
RECIPIENT OFFICIAL
--------------------------------------------------------------------------------
ELECTRONIC FORM

<PAGE>   2
                            SPECIAL AWARD CONDITIONS
                 ADVANCED TECHNOLOGY PROGRAM - SINGLE RECIPIENT
                           SANGAMO BIOSCIENCES, INC.
                     COOPERATIVE AGREEMENT NO. 70NANB7H3000

1.   RECIPIENT CONTACT

The Recipient Contact's name, address, and telephone number are:

(Technical)         George N. Cox
                    Sangamo BioSciences, Inc.
                    9125 East 10th Drive
                    Lowry Building 859
                    Aurora, CO 80010
                    (303) 360-6788

(Administrative)    Matthew Frome
                    Sangamo BioSciences, Inc.
                    950 Marina Village Parkway
                    Suite 100
                    Alameda, CA 94501
                    (510) 748-3087

2.   GRANTS OFFICER

The Grants Officer's name, and address are:

                                 Shamim Shaikh
                 National Institute of Standards and Technology
                              Bldg. 301, Room B129
                          Gaithersburg, MD 20899-0001

3.   GRANTS SPECIALIST

     The Grants Specialist's name, address, and telephone number are:

                                  Lisa Hildred
                 National Institute of Standards and Technology
                              Bldg. 301, Room B129
                          Gaithersburg, MD 20899-0001
                                 (301) 975-6002

4.   PROJECT MANAGEMENT

a.   The Technical Project Manager's name, address, and telephone number are:

                               Florina B. Hoffer
                 National Institute of Standards and Technology
                              Bldg. 101, Room A413
                          Gaithersburg, MD 20899-0001
                                 (301) 975-6049

b.   The Business Project Manager's name, address, and telephone number are:

                           Robert Bloksberg-Fireovid
                 National Institute of Standards and Technology
                              Bldg. 101, Room A319
                          Gaithersburg, MD 20899-0001
                                 (301) 975-5457

The structure of the ATP Project Management Team is subject to change.

5.   PROJECT DESCRIPTION

All research shall be conducted in accordance with the Recipient's proposal
dated September 17, 1996 and revised budget dated March 11, 1997.

6.   FUNDING LIMITATIONS

The scope of work and budget incorporated into this award covers a three year
period (referred to as the "project period") for a total amount of $2,000,000
in Federal funds. However, Federal funding available at this time is limited to
$500,000 for the first year period (referred to as the "budget period").
Receipt of any additional funding up to the level projected under this award is
contingent upon the availability of funds from Congress, satisfactory
performance, and will be at the sole discretion of the Agency. The Recipient
may not obligate, incur any expenditures, nor engage in any commitments which
involve any amount in excess of the Federal amount presently available. No
legal liability will exist or result on the part of the Federal Government for
payment of any portion of the remaining funds which have not been made
available under the award. Should additional funds not be made available,
expenses incurred related to closeout activities must be funded from the amount
included on this award. The notice of availability or non-availability of
additional funding for the second and third years will be made in writing only
by the Grants Officer. This written notification shall be made prior to or no
later than 30 days after the expiration of each year's activities.

PROPOSED FUTURE FUNDING:

<TABLE>
<CAPTION>
YEAR                FUNDS               BUDGET PERIOD
----                -----               -------------
<S>                 <C>                 <C>
YR2                 $850,000            (05/01/98 - 04/30/99)
YR3                 $650,000            (05/01/99 - 04/30/00)
</TABLE>

7.   COST SHARE

For the first year period, the direct costs only cost sharing ratio applicable
to this award is the Recipient's contribution of 17.18% ($103,750) and NIST's
contribution of 82.82% ($500,00). The Recipient must meet or exceed the cost
share ratio on a quarterly financial reporting basis.
<PAGE>   3
8. VERTEBRATE ANIMALS

This project involves the use of vertebrate animals, therefore, the Recipient
is required to comply, as applicable, with the Animal Welfare Act as amended,
and implementing regulations (7 U.S.C. 2131 et seq., 9 CFR parts 1, 2, and 3),
and other Federal Statutes and regulations relating to animals.

Prior to any research involving animals the Principal Investigator shall submit
to the ATP Program Manager:

(1) A completed Extramural Animal Study Proposal Form (NIST-1258), with signed
approvals by the Institutional Animal Care and Use Committee (IACUC).

(2) Copies of other governmental approvals for Recipient's animal care and use
procedures and showing the current status of Recipient's assurance by the
Public Health Service/National Institutes of Health (PHS/NIH), and copies of
animal care facility accreditation.

(3) Certification that the Principal Investigator and other personnel involved
in the care and use of the animals are trained as required by NIST and the
PHS/NIH Guide for the Care and Use of Laboratory Animals.

The Recipient must inform the ATP Program Manager in writing of any proposed
deviation from procedures involving animals described in Form NIST-1258, any
change in personnel and their training, and change in the status of their
PHS/NIH assurance or other government inspecting bodies; and the results of any
inspections of their animal care facilities that take place during the course
of the award.

9. HUMAN SUBJECTS

If this project involves human subjects, the Department of Commerce Regulations,
15 CFR Part 27, require that recipients whose research involves human subjects
maintain appropriate policies and procedures for the protection of human
subjects. These regulations are available from the NIST Grants Office upon
request.

No research involving human subjects is permitted under this award until NIST
has reviewed and approved those activities.
<PAGE>   4

FORM CD-451                                          U.S. DEPARTMENT OF COMMERCE
(REV. 10-93)
DAO 203-26
                    AMENDMENT TO FINANCIAL ASSISTANCE AWARD

RECIPIENT NAME
Sangamo BioSciences, Inc.
--------------------------------------------------------------------------------

STREET ADDRESS
501 Canal Boulevard, Suite A100
--------------------------------------------------------------------------------

CITY, STATE, ZIP CODE
Richmond, CA 94804
--------------------------------------------------------------------------------

[ ] GRANT  [X] COOPERATIVE
               AGREEMENT
--------------------------------------------------------------------------------
ACCOUNTING CODE
***SEE BELOW
--------------------------------------------------------------------------------

AWARD NUMBER
70NANB7H3000
--------------------------------------------------------------------------------

AMENDMENT NUMBER
02
--------------------------------------------------------------------------------

EFFECTIVE DATE
APR 16, 1996
--------------------------------------------------------------------------------

EXTEND WORK COMPLETION TO
N/A
--------------------------------------------------------------------------------

DEPARTMENT OF COMMERCE OPERATING UNIT
NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY GRANTS OFFICE
BUILDING 301, ROOM B129, GAITHERSBURG, MARYLAND 20899-001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                      PREVIOUS                                 TOTAL
COSTS ARE REVISED AS FOLLOWS:      ESTIMATED COSTS     ADD       DEDUCT    ESTIMATED COST
-----------------------------------------------------------------------------------------
<S>                                 <C>               <C>       <C>          <C>
FEDERAL SHARE OF COST               $2,000,000        $ -0-     $ -0-        $2,000,000
-----------------------------------------------------------------------------------------
RECIPIENT SHARE OF COST             $  503,250        $ -0-     $ -0-        $  503,250
-----------------------------------------------------------------------------------------
TOTAL ESTIMATED COST                $2,503,250        $ -0-     $ -0-        $2,503,250
-----------------------------------------------------------------------------------------
</TABLE>

REASON(S) FOR AMENDMENT

Project Title: Development of Novel DNA Binding Proteins as Anitiviral
               Therapeutics.

This cooperative agreement is being amended to (1) obligate and authorize
expenditure of funding for the SECOND year (05/01/98 - 04/30/99); (2)
incorporate the revised budget dated March 20, 1998; (3) allow the carryover of
unexpended funds from First year to the Second year, and (4) indicate on the
attached, those terms and conditions affected by the additional funds,
carryover, and any administrative or statutory requirements.

This Amendment approved by the Grants Officer is issued in triplicate and
constitutes an obligation of Federal funding. By signing the three documents,
the Recipient agrees to comply with the Amendment provisions checked below and
attached, as well as previous provisions incorporated into the Award. Upon
acceptance by the Recipient, two signed Amendment documents shall be returned
to the Grants Officer and the third document shall be retained by the
Recipient. If not signed and returned by the Recipient within 15 days of
receipt, the Grants Officer may declare this Amendment null and void.

[X] Special Award Conditions

[X] Line Item Budget

[ ] Other(s):
             -------------------------------------------------------------------

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

--------------------------------------------------------------------------------
**ACCOUNTING CODE: cc: 8/4701342 Obj. Cls. 4110 Req. No. 8/473-3104 $850,000
--------------------------------------------------------------------------------
            B-AE93-N-H-F-N-A-08-04000 EIN: 68-0359556 470/H. Weetall
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIGNATURE OF DEPARTMENT OF COMMERCE GRANTS OFFICER          TITLE               DATE
<S>                                                         <C>                 <C>
Shamim A. Shaikh /s/ SHAMIM A. SHAIKH                       Grants Officer      4/16/98
---------------------------------------------------------------------------------------
TYPED NAME AND SIGNATURE OF AUTHORIZED RECIPIENT OFFICIAL   TITLE               DATE

---------------------------------------------------------------------------------------
</TABLE>
ELECTRONIC FORM                        3

<PAGE>   5
                            SPECIAL AWARD CONDITIONS
                 ADVANCED TECHNOLOGY PROGRAM - SINGLE RECIPIENT
                           SANGAMO BIOSCIENCES, INC.
                     COOPERATIVE AGREEMENT NO. 70NANB7H3000
                                AMENDMENT NO. 02

SPECIAL AWARD CONDITIONS - MODIFICATIONS/CHANGES

1.   RECIPIENT CONTACT

The Recipient Contact's name, address, and telephone number are:

(Administrative)    Shawn Johnson (510) 970-6000 x205
                    Sangamo BioSciences, Inc.
                    501 Canal Boulevard, Suite A100
                    Richmond, CA 94804

4.   PROJECT MANAGEMENT

a.   The Technical Project Manager's name, address, and telephone number are:

                                 Howard Weetall
                 National Institute of Standards and Technology
                              Bldg. 101, Room A236
                          Gaithersburg, MD 20899-0001
                                 (301) 975-2628

5.   PROJECT DESCRIPTION

All research shall be conducted in accordance with the Recipient's proposal
dated September 17, 1996, statements of accomplishments dated August 13, 1997,
and revised budget dated March 20, 1998.

6.   FUNDING LIMITATIONS

The scope of work and budget incorporated into this award covers a three-year
period (referred to as the "project period") for a total amount of $2,000,000
in Federal funds. However, Federal funding available at this time is limited to
$850,000 for the second-year period (referred to as the "budget period").
Receipt of any additional funding up to the level projected under this award is
contingent upon the availability of funds from Congress, satisfactory
performance, and will be at the sole discretion of the Agency. The Recipient
may not obligate, incur any expenditures, nor engage in any commitments which
involve any amount in excess of the Federal amount presently available. No
legal liability will exist or result on the part of the Federal Government for
payment of any portion of the remaining funds which have not been made
available under the award. Should additional funds not be made available,
expenses incurred related to closeout activities must be funded from the amount
included on this award. The notice of availability or non-availability of
additional funding for the third year will be made in writing only by the
Grants Officer. This written notification shall be made prior to or no later
than 30 days after the expiration of second year's activities.

FUTURE FUNDING:

Year 3: $650,000 (From 05/01/99 - 04/30/00)

7. COST SHARE

The cumulative Year 1 and 2 direct costs only cost sharing ratio applicable to
this award is the Recipient's contribution of 13.49% ($210,500) and NIST's
contribution of 88.51% ($1,350,000). Recipient's must meet or exceed the cost
share ratio on a quarterly financial reporting basis.

MODIFICATION TO THE GENERAL TERMS AND CONDITIONS ADVANCED TECHNOLOGY PROGRAM -
SR - 03/97

REPLACE CLAUSE #24 IN ITS ENTIRETY WITH:

24.  CLOSEOUT OF COOPERATIVE AGREEMENT

In accordance with the guidelines established in the OMB Circular A-110,
Subpart D_.71, and the Department of Commerce Standard Terms and Conditions
dated November 1993, item number A.06, only those costs associated with
compiling the final reports (financial, patent, equipment inventory, and
closeout audit) shall be allowed during the ninety (90) day closeout period.
The closeout meeting with ATP is not considered a closeout related activity.

Therefore, the Recipient must participate in a closeout (end-of-project)
meeting with NIST officials PRIOR TO THE EXPIRATION DATE of the award. The
Recipient must provide adequate funds in the project budget to ensure
participation by all appropriate members in the closeout meeting. The NIST
Technical and Business Project Managers will provide the Recipient with
instructions for the closeout meeting.

ALL PRIOR TERMS AND CONDITIONS REMAIN THE SAME AND IN EFFECT.

<PAGE>   6
ESTIMATED MULTI-YEAR BUDGET - SINGLE COMPANY

<TABLE>
<CAPTION>
                                                          YEAR ONE         YEAR TWO        YEAR THREE       TOTAL
<S>                                                       <C>             <C>              <C>            <C>
1. OBJECT CLASS CATEGORY

   A. Technical Personnel Salaries/Wages                  $  163,500      $  394,500       $  258,000     $  816,000
   B. Technical Personnel Fringe Benefits                     30,000          55,250           38,000        123,250
   C. Administrative Support Salaries/Wages                   42,500          67,500           67,500        177,500
   D. Administrative Support Fringe Benefits                   8,000          11,250           11,250         30,500
   E. Travel                                                  10,000          18,000           18,000         46,000
   F. Equipment                                              150,000          95,000           40,000        285,000
   G. Materials/Supplies                                      90,000         100,000           80,000        270,000
   H. Subcontracts                                            50,000         275,000          430,000        755,000
   I. Other
   J. Total Direct Costs (line A thru I)                     544,000       1,016,500          942,750      2,503,250
   K. Total Direct Costs Requested From ATP                  449,000         901,000          650,000      2,000,000
   L. Total Direct Costs to be Absorbed by Proposer       $   95,000      $  115,500       $  292,750     $  503,250
   M. Total Indirect Costs to be Absorbed by Proposer     $   50,000      $   65,000       $   85,000     $  200,000
   N. Total Costs (lines K, L, and M)                     $  594,000      $1,081,500       $1,027,750     $2,703,250

2. SOURCES OF FUNDS

   A. ATP (Same as Line K)                                $  449,000      $  901,000       $  650,000     $2,000,000
   B. Sangamo BioSciences                                    145,000         180,500          377,750        703,250
   C.
   D.
   E.
   F.
   G. Total Sources of Funds (Same as Line N)             $  594,000      $1,081,500       $1,027,750     $2,703,250

3. TASKS

   A.                                                     $               $                $              $
   B.
   C.
   D.
   E.
   F.
   G. Total Costs of All Tasks (Same as Line N)           $               $                $              $
</TABLE>

<PAGE>   7
<TABLE>
<S>                                                                        <C>
----------------------------------------------------------------------------------------------------------
FORM CD-451                             U.S. DEPARTMENT OF COMMERCE
(REV. 10-93)                                                               [ ] GRANT      [X] COOPERATIVE
DAO 203-26                                                                                    AGREEMENT
                                                                          --------------------------------
                                                                           ACCOUNTING CODE
            AMENDMENT TO FINANCIAL ASSISTANCE AWARD                          **SEE BELOW
----------------------------------------------------------------------------------------------------------
RECIPIENT NAME                                                             AWARD NUMBER
Sangamo BioSciences, Inc.                                                    70NANB7H3000
                                                                          --------------------------------
                                                                           AMENDMENT NUMBER
--------------------------------------------------------------------------   03
STREET ADDRESS                                                            --------------------------------
501 Canal Boulevard, Suite A100                                            EFFECTIVE DATE
                                                                             OCTOBER 31, 1998
----------------------------------------------------------------------------------------------------------
CITY, STATE, ZIP CODE                                                      EXTEND WORK COMPLETION TO
Richmond, CA 94804                                                           N/A
----------------------------------------------------------------------------------------------------------
DEPARTMENT OF COMMERCE OPERATING UNIT
NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY,
GRANTS OFFICE BUILDING 301,
ROOM B129, GAITHERSBURG, MARYLAND 20899-0001
----------------------------------------------------------------------------------------------------------
                                      PREVIOUS                                                TOTAL
COSTS ARE REVISED AS FOLLOWS:      ESTIMATED COSTS          ADD           DEDUCT          ESTIMATED COST
----------------------------------------------------------------------------------------------------------
FEDERAL SHARE OF COSTS               $2,000,000             $-0-           $-0-             $2,000,000
----------------------------------------------------------------------------------------------------------
RECIPIENT SHARE OF COST              $  503,250             $-0-           $-0-             $  503,250
----------------------------------------------------------------------------------------------------------
TOTAL ESTIMATED COST                 $2,503,250             $-0-           $-0-             $2,503,250
----------------------------------------------------------------------------------------------------------
REASON(S) FOR AMENDMENT

Project Title: Development of Novel DNA Binding Proteins as Antiviral Therapeutics.

This cooperative agreement is being amended to approve the change to the principal investigator from
Dr. George Cox to Dr. Casey Case per the Recipient's request dated October 19, 1998.

ALL PRIOR TERMS AND CONDITIONS REMAIN THE SAME AND IN EFFECT.

----------------------------------------------------------------------------------------------------------
This Amendment approved by the Grants Officer is issued in triplicate and constitutes an obligation of
Federal funding. By signing the three documents, the Recipient agrees to comply with the Amendment
provisions checked below and attached, as well as previous provisions incorporated into the Award. Upon
acceptance by the Recipient, two signed Amendment documents shall be returned to the Grants Officer and
the third document shall be retained by the Recipient. If not signed and returned by the Recipient within
15 days of receipt, the Grants Officer may declare this Amendment null and void.

[ ]  Special Award Conditions

[ ]  Line Item Budget

[ ]  Other(s):                                                 PLEASE RETAIN FOR YOUR
               ---------------------------                            RECORDS         --------------------
------------------------------------------                                    -----------------------------

----------------------------------------------------------------------------------------------------------
**ACCOUNTING CODE: cc: 8/4701342 Obj. Cls. 4110  Req. No. 8/473-3104 $0.00

        B-AE93-N-H-F-N-A-08-04000.  EIN: 68-0359556  470/H. Weetall

----------------------------------------------------------------------------------------------------------
SIGNATURE OF DEPARTMENT OF COMMERCE GRANTS OFFICER            TITLE                    DATE

Shamim A. Shaikh    /s/ SHAMIM A. SHAIKH                      Grants Officer           10/31/98

----------------------------------------------------------------------------------------------------------
TYPED NAME AND SIGNATURE OF AUTHORIZED RECIPIENT OFFICIAL     TITLE                    DATE

----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   8
<TABLE>
<S>                                                                        <C>
----------------------------------------------------------------------------------------------------------
FORM CD-451                             U.S. DEPARTMENT OF COMMERCE
(REV. 10-93)                                                               [ ] GRANT      [X] COOPERATIVE
DAO 203-26                                                                                    AGREEMENT
                                                                          --------------------------------
                                                                           ACCOUNTING CODE
            AMENDMENT TO FINANCIAL ASSISTANCE AWARD                          **SEE BELOW
----------------------------------------------------------------------------------------------------------
RECIPIENT NAME                                                             AWARD NUMBER
Sangamo BioSciences, Inc.                                                    70NANB7H3000
                                                                          --------------------------------
                                                                           AMENDMENT NUMBER
--------------------------------------------------------------------------   04
STREET ADDRESS                                                            --------------------------------
501 Canal Boulevard, Suite A100                                            EFFECTIVE DATE
                                                                             APR. 12, 1999
----------------------------------------------------------------------------------------------------------
CITY, STATE, ZIP CODE                                                      EXTEND WORK COMPLETION TO
Richmond, CA 94804                                                           N/A
----------------------------------------------------------------------------------------------------------
DEPARTMENT OF COMMERCE OPERATING UNIT
NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY, GRANTS OFFICE
100 BUREAU DRIVE, STOP 3576, GAITHERSBURG, MD 20899-3576
----------------------------------------------------------------------------------------------------------
                                      PREVIOUS                                                TOTAL
COSTS ARE REVISED AS FOLLOWS:      ESTIMATED COSTS          ADD           DEDUCT          ESTIMATED COST
----------------------------------------------------------------------------------------------------------
FEDERAL SHARE OF COSTS               $2,000,000             $-0-           $-0-             $2,000,000
----------------------------------------------------------------------------------------------------------
RECIPIENT SHARE OF COST              $  503,250             $-0-           $-0-             $  503,250
----------------------------------------------------------------------------------------------------------
TOTAL ESTIMATED COST                 $2,503,250             $-0-           $-1-             $2,503,250
----------------------------------------------------------------------------------------------------------
REASON(S) FOR AMENDMENT

Project Title: Development of Novel DNA Binding Proteins as Antiviral Therapeutics

This cooperative agreement is being amended to 1) obligate and authorize expenditure of funding for the
THIRD and FINAL year (05/01/99 - 04/30/00); 2) incorporate the revised budget dated April 2, 1999;
3) allow the carryover of unexpended funds from the Second year to the Third and Final year;
4) substitute Special Award Condition #9 entitled "Human Subjects"; and 5) indicate on the attached,
those terms and conditions affected by the additional funds, carryover, and any administrative or
statutory requirements.

----------------------------------------------------------------------------------------------------------
This Amendment approved by the Grants Officer is issued in triplicate and constitutes an obligation of
Federal funding. By signing the three documents, the Recipient agrees to comply with the Amendment
provisions checked below and attached, as well as previous provisions incorporated into the Award. Upon
acceptance by the Recipient, two signed Amendment documents shall be returned to the Grants Officer and
the third document shall be retained by the Recipient. If not signed and returned by the Recipient within
15 days of receipt, the Grants Officer may declare this Amendment null and void.

[X]  Special Award Conditions

[X]  Line Item Budget

[ ]  Other(s): ___________________________________________________________________________________________

__________________________________________________________________________________________________________

----------------------------------------------------------------------------------------------------------
**ACCOUNTING CODE: cc: 9/4701342 Obj. Cl. 4110  Req. No. 9/473-3169 $650,000.00

B-AE93-N-H-F-N-A-08-04000  EIN: 68-0359556  470/H. Weetall

----------------------------------------------------------------------------------------------------------
SIGNATURE OF DEPARTMENT OF COMMERCE GRANTS OFFICER            TITLE                    DATE

Lois E. McDuffee    /s/ LOIS E. MCDUFFEE                      Grants Officer           4/12/99

----------------------------------------------------------------------------------------------------------
TYPED NAME AND SIGNATURE OF AUTHORIZED RECIPIENT OFFICIAL     TITLE                    DATE

  /s/  EOL
----------------------------------------------------------------------------------------------------------
</TABLE>

                                                                               3
<PAGE>   9
                            SPECIAL AWARD CONDITIONS
                 ADVANCED TECHNOLOGY PROGRAM - SINGLE RECIPIENT
                           SANGAMO BIOSCIENCES, INC.
             COOPERATIVE AGREEMENT NO. 70NANB7H3000 - AMENDMENT 04

2. GRANTS OFFICER

The Grants Officer's name, address and telephone number are:

                                Lois E. McDuffee
                 National Institute of Standards and Technology
                        Grants Office, 100 Bureau Drive
                        Bldg. 411, Room A143, Stop 3576
                          Gaithersburg, MD 20899-3576
                                 (301) 975-6359

3. GRANTS SPECIALIST

The Grants Specialist's name, address, and telephone number are:

                               Kathleen Lettofsky
                 National Institute of Standards and Technology
                        Grants Office, 100 Bureau Drive
                        Bldg. 411, Room A143, Stop 3576
                          Gaithersburg, MD 20899-3576
                                 (301) 975-6342

4. PROJECT MANAGEMENT

a. The Technical Project Manager's name, address, and telephone number are:

                                 Howard Weetall
                 National Institute of Standards and Technology
                     100 Bureau Drive, Bldg. 101, Stop 4730
                          Gaithersburg, MD 20899-4730
                                 (301) 975-2628

b. The Business Project Manager's name, address, and telephone number are:

                                   Andy Klein
                 National Institute of Standards and Technology
                     100 Bureau Drive, Bldg. 101, Stop 4720
                          Gaithersburg, MD 20899-4720
                                 (301) 975-4292

5. PROJECT DESCRIPTION

All research shall be conducted in accordance with the Recipient's proposal
dated September 17, 1996, statements of accomplishments dated March 30, 1999,
and revised budget dated April 2, 1999.

6. FUNDING LIMITATIONS

The scope of work and budget Incorporated into this award covers a three-year
period (referred to as the "project period") for a total amount of $2,000,000
in Federal funds. However, Federal funding available at this time is limited to
$650,000 for the third and final year period (referred to as the "budget
period"), plus the carryover of unexpended funds from the second year to the
third year period. The Recipient may not obligate, incur any expenditures, nor
engage in any commitments which involve any amount in excess of the Federal
amount presently available. Should such an excess obligation, expenditures, or
commitments occur, no legal liability will exist or result on the part of the
Federal Government for payment of funds.

7. COST SHARE

The cumulative Year 1, Year 2 and Year 3 direct costs only cost sharing ratio
applicable to this award is the Recipient's contribution of 20.10% ($503,250)
and NIST's contribution of 79.90% ($2,000,000). The Recipient must meet or
exceed the cost share ratio on a quarterly financial reporting basis.

9. HUMAN SUBJECTS

Substitute the following for the Special Award Condition shown in the original
award document:

Based upon Sangamo BioSciences, Inc.'s correspondence dated February 24, 1999,
NIST has concluded that the human subject research identified in that
correspondence meets the criteria to qualify for an exemption under 15 CFR Part
27. Specifically, the involvement of human subjects in the correspondence meets
the following exemption described in 15 CFR27.101(b)(4), which states:

"Research involving the collection or study of existing data, documents,
records, pathological specimens, or diagnostic specimens, if these sources are
publicly available or if the information is recorded by the investigator in
such a manner that subjects cannot be identified, directly or through
identifiers linked to the subjects."

The human cell lines to be used within the project entitled "Development of
Novel DNA Binding Proteins as Antiviral Therapeutics" awarded to Sangamo
BioSciences are purchased from American Type Tissue Collection (ATTC). The four
cell lines involved include HEK293 cells derived from kidney fibroblasts, Huh7
cells derived from hepatocytes, and PM1 and U937 cells which are derived from
lymphoid cells. These four cell lines cannot be traced to the original source,
and they are publicly available through the ATTC.

SPECIAL AWARD CONDITIONS/ATP-SR/4-99
<PAGE>   10
No other human subject research activity is authorized by NIST.

If the conditions upon which this exemption is based change in any way, the
Recipient must notify the Grants Office immediately in writing and obtain prior
written approval from the Grants Officer before proceeding with any further
research.

By accepting this amendment, the Recipient certifies to the accuracy of the
documentation cited above.

ALL PRIOR TERMS AND CONDITIONS REMAIN THE SAME AND IN EFFECT.
<PAGE>   11
                              SANGAMO BIOSCIENCES

                   ESTIMATED MULTI-YEAR BUDGET-SINGLE COMPANY
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                   YEAR ONE        YEAR TWO      YEAR THREE          TOTAL
                                                   --------        ---------     ----------         --------
<S>                                                <C>             <C>           <C>               <C>
1. OBJECT CLASS CATEGORY

A. Technical Personnel Salaries/Wages               $163,500        $394,500        $258,000         $816,000
B. Technical Personnel Fringe Benefits                30,000          55,250          38,000          123,250
C. Administrative Personnel Salaries/Wages            42,500          67,500          67,500          177,500
D. Administrative Personnel Fringe Benefits            8,000          11,250          11,250           30,500
E. Travel                                             10,000          18,000          18,000           46,000
F. Equipment                                         150,000          95,000          40,000          285,000
G. Materials/Supplies                                 90,000         100,000         205,000          395,000
H. Subcontracts                                       50,000         275,000         305,000          630,000
I. Other
J. Total Direct Costs (Lines A thru I)               544,000       1,016,500         942,750        2,503,250
K. Total Direct Costs Requested From ATP             499,000         901,000         650,000        2,000,000
L. Total Direct Costs Shared by Proposer (if any)    $95,000        $115,500        $292,750         $503,250
M. Total Indirect Costs Absorbed by Proposer         $50,000         $65,000         $85,000         $200,000
N. Total Costs (Lines J - M)                        $594,000      $1,081,500      $1,027,250       $2,703,250

2. SOURCES OF FUNDS

 A. ATP (Same as Line K)                            $449,000        $901,000        $660,000       $2,000,000
 B. Sangamo BioSciences, Inc.                        145,000         180,500         377,750          703,250
 C.
 D.
 E. Total Sources of Funds (Same as Line N)         $594,000      $1,081,500      $1,027,250       $2,703,250

3. TASKS

 A.                                                $              $               $                $
 B.
 C.
 D.
 E.
 F.
 G.
 H.
 I. Total Costs of All Tests (Same as Line N)      $              $               $                 $
</TABLE>

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