Document:

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                                                                    Exhibit 10.8

                              SUBLICENSE AGREEMENT

AGREEMENT made effective this 9th day of May, 1996

BY AND BETWEEN:

JOHNSON & JOHNSON, a company organized under the laws of the State of New
Jersey, U.S.A., and having executive offices at One Johnson & Johnson Plaza, New
Brunswick, New Jersey 08933-5501 (hereinafter called "LICENSOR")

                                                                ON THE ONE HAND,

AND:

SANGAMO BIOSCIENCES, INCORPORATED, a company organized under Delaware law,
having an address at 950 Marina Village Parkway, Suite 100, Alameda, CA 94501
(hereinafter called "LICENSEE")

                                                              ON THE OTHER HAND,

WITNESSETH:

A.  WHEREAS, pursuant to Research and License Agreements dated May 1, 1982 and
    January 1, 1987 (hereinafter collectively the "SCRIPPS AGREEMENTS") between
    LICENSOR and SCRIPPS CLINIC AND RESEARCH FOUNDATION (hereinafter "SCRIPPS"),
    SCRIPPS granted LICENSOR an exclusive option to obtain an exclusive
    worldwide license (including the right to grant sublicenses) to certain
    technology, including certain technology in the field of Zinc Finger Protein
    Derivatives (hereinafter the "INVENTIONS"), and LICENSOR has exercised its
    option thereunder;

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B.  WHEREAS, patent applications have been filed in the United States and other
    territories in the  name of SCRIPPS for the granting of letters patent
    relating to the said INVENTIONS, further described in Appendix 1 hereto; and

C.  WHEREAS, LICENSOR desires that the INVENTIONS be developed and made
    available to the public; and

D.  WHEREAS, LICENSEE represents that it is presently engaged, or intends to be
    engaged in the business of research, development, manufacturing and selling
    products in fields related to the INVENTIONS; and

E.  WHEREAS, LICENSEE wishes to make use of the INVENTIONS for the research,
    development, manufacturing and selling of products and wishes to obtain
    certain rights to the INVENTIONS under the terms and conditions hereinafter
    set forth;

F.  WHEREAS, LICENSOR is willing and able to grant such rights to LICENSEE;

NOW, THEREFORE, in consideration of the premises and the performance of the
covenants herein contained, IT IS AGREED AS FOLLOWS:

1.  DEFINITIONS

For the purposes of this agreement (hereinafter called the "SUBLICENSE
AGREEMENT"), and solely for such purposes, the terms hereinafter set forth shall
have the following respective meanings:

(a) "AFFILIATE" or "AFFILIATES" shall mean any corporation(s) or organization(s)
    which CONTROLS, is(are) directly or indirectly CONTROLLED by, or under
    common control with LICENSEE.

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(b)  "CONTROL", "CONTROL(S)" or "CONTROLLED" shall refer to direct or indirect
     beneficial ownership of at least fifty percent (50%) of the voting stock
     of a corporation or other business entity, or a fifty percent (50%) or
     greater interest in the income of such corporation or other business
     entity, or the power to direct or cause the direction of the management or
     policies of such corporation or other business entity or policies of such
     corporation or other business entity whether by ownership of voting
     securities by contract or otherwise, or such other relationship as, in
     fact, constitutes actual control.

(c)  "EFFECTIVE DATE" shall mean the date at the head of this SUBLICENSE
     AGREEMENT.

(d)  "FDA" shall mean the United States Food and Drug Administration.

(e)  "FIELD" shall mean the diagnoses, therapy or preventive treatment of
     diseases in humans or animals.

(f)  "IND" shall mean an Investigational New Drug Application filed pursuant to
     the requirements of the FDA as more fully defined in 21 C.F.R. Section
     312.3 or its equivalent in any country of the European Economic Community.

(g)  "LICENSED PRODUCT" shall mean any product the manufacture, USE or SALE of
     which is covered by a VALID CLAIM of the PATENT RIGHTS or that is SOLD by
     LICENSEE or an AFFILIATE under conditions or circumstances which, if
     unlicensed, would amount to infringement or contributory infringement or
     inducement of infringement of the PATENT RIGHTS.

(h)  "NDA" shall mean a New Drug Application filed with the United States Food
     and Drug Administration under 21 USC 355(b)(FDCA Section 505(b)) or its
     equivalent filed with the Health Regulatory Authorities in other countries
     or jurisdictions.

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(i)  "NET SALES VALUE" shall mean that sum determined by deducting from the
     gross amount billed and collected by the SELLER (LICENSEE, SUBLICENSEE or
     AFFILIATE) in an arms length transaction to customers that are not
     AFFILIATES of the SELLER;

     (i)   transportation charges or allowances, including freight pickup
           allowances, and packaging costs, if any;

     (ii)  trade, quantity or cash discounts, service allowances and independent
           broker's or agent's commissions, if any, allowed or paid;

     (iii) credits or allowances for the LICENSED PRODUCT, if any, given or made
           on account of price adjustments, returns, bad debts, off-invoice
           promotional discounts, rebates, chargebacks, any and all federal,
           state or local government rebates or discounts whether in existence
           now or enacted at any time during the term of this SUBLICENSE
           AGREEMENT, volume reimbursements, the gross amount billed and
           collected for rejected LICENSED PRODUCT or LICENSED PRODUCT subject
           to recall or destruction (voluntarily made or requested or made by an
           appropriate government agency, sub-division or department); and

     (iv)  any tax, excise or other governmental charge upon or measured by the
           production, sale, transportation, delivery or use of the LICENSED
           PRODUCT;

     in each case determined in accordance with generally accepted accounting
     practices.

(j)  "PATENT RIGHTS" shall mean the patents and patent applications identified
     in Appendix 1 hereof, and in respect of such letters patent, and patent
     applications, all corresponding national patents and patent applications,
     European Patent Convention applications or applications under similar
     administrative international conventions, patent applications in the
     listed or designated countries, together with any divisional,
     continuation, continuation-in-part, substitution, reissue, extension,
     supplementary protection certificate or other application based thereon.

(k)  "SELLER" shall mean one who SELLS.

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(l)   "SOLD", "SALE", "SALES", "SELL", "SELLING", and "SELLS" shall refer to the
      act of selling or disposing of for value.

(m)   "SUBLICENSEE" shall mean a third party other than an AFFILIATE to whom
      LICENSEE has extended a further sublicense in accordance with Article 2(b)
      hereunder.

(n)   "USE", "USES" and "USED" shall refer to the act of using for any
      commercial purposes whatsoever.

(o)   "VALID CLAIM" shall mean a claim of an unexpired patent within the PATENT
      RIGHTS which has matured into an issued patent or a claim being prosecuted
      in a pending application within the PATENT RIGHTS. In each case a claim
      shall be presumed to be valid unless and until it has been held to be
      invalid by a final judgement of a court of competent jurisdiction from
      which no appeal can be or is taken. For the purposes of royalty
      determination and payment under Article 4 hereof, any claim being
      prosecuted in a pending patent application, including applications
      involved in interference or opposition proceedings, shall be deemed to be
      the equivalent of a valid claim of an issued, unexpired patent.

2.    LICENSE

(a)   LICENSOR hereby grants to LICENSEE, and LICENSEE hereby accepts from
      LICENSOR, upon the terms and conditions herein specified, a worldwide
      exclusive sublicense under the PATENT RIGHTS to make, to have made, to USE
      and to SELL LICENSED PRODUCTS in the FIELD.

(b)   LICENSEE acknowledges and agrees that the exclusive rights granted
      pursuant to this Agreement shall be subject to:

            (i)   SCRIPPS' rights pursuant to the SCRIPPS AGREEMENT to use the
                  LICENSED PATENTS for educational and research purposes; and

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            (ii)  the rights of the United States Government pursuant to 35
                  U.S.C. 202 et seq. and 37 C.F.R. 401.1 et seq. which may have
                  arisen or resulted form federal funding of SCRIPPS research
                  relating to the LICENSED PATENTS, including the non-exclusive
                  right of the United States Government to practice the
                  inventions covered by the LICENSED PATENTS. Subject to the
                  foregoing, J&J intends to grant to LICENSEE the maximum rights
                  allowable under 35 U.S.C. Sec. 202 et seq. and 37 C.F.R. 401.1
                  et seq.

      (c)   Each party hereunder represents and warrants that it will make good
            faith efforts to comply in all respects with the applicable
            provisions of any applicable law, regulation, or requirement by any
            Government relating to the LICENSED PATENTS. Each party agrees that
            it will make good faith efforts to ensure that all necessary steps
            are taken to comply with the requirements of 35 U.S.C. 202 et seq.
            and 37 C.F.R. 401.1 et seq. to retain the maximum rights under the
            LICENSED PATENTS allowable by law. LICENSEE agrees that it will
            provide SCRIPPS with the necessary reports and information required
            for SCRIPPS to comply with 35 U.S.C. Sec. 202 et seq. and 37 C.F.R.
            401.1 et seq., including periodic reports on utilization or efforts
            at utilization of the inventions covered by the LICENSED PATENTS.

      (d)   The sublicenses granted hereunder shall include the right to grant
            further sub-licenses to AFFILIATES or third party SUBLICENSEES,
            provided that LICENSEE agrees to be responsible for the performance
            hereunder by its AFFILIATES and SUBLICENSEES to which the license
            and rights shall have been extended.

      (e)   For the purposes of reporting and making payments of earned
            royalties under this SUBLICENSE AGREEMENT, the manufacture, SALE or
            USE of LICENSED PRODUCTS by any AFFILIATE or SUBLICENSEE to which
            the license and rights shall have been extended shall be considered
            the manufacture, SALE or USE of such LICENSED PRODUCT by LICENSEE
            and any such AFFILIATE or SUBLICENSEE may make the pertinent reports
            and royalty payments specified in Article 4 hereof directly to
            LICENSOR

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     on behalf of LICENSEE; otherwise, such reports and payments on account of
     SALES or USE  of LICENSED PRODUCTS by each AFFILIATE or SUBLICENSEE shall
     be made by LICENSEE; and, in any event, the SALES and USES of LICENSED
     PRODUCT by each such AFFILIATE or SUBLICENSEE shall be separately shown in
     the reports to LICENSOR if such information is readily available to
     LICENSEE.

(f)  The LICENSEE shall be responsible to the LICENSOR for the enforcement of
     the terms of the sub-license and for inspecting the accounts and records
     kept by the SUBLICENSEE. The LICENSEE shall at the request of the LICENSOR
     appoint a qualified person jointly with the LICENSOR to inspect the records
     of the SUBLICENSEE on behalf of both and both shall be entitled to a full
     report thereon.

(g)  No other, further or different license or right and, except as expressly
     provided in Article 2 hereof, is hereby granted or implied.

3.   LICENSE FEES

(a)  In consideration of the Licenses granted hereunder, LICENSEE shall pay to
     LICENSOR License Fees of      *     *     *     *     *   at times and
     amounts as follows:

          (i)       *     *     *     *     * within ten days of execution of
               this LICENSE AGREEMENT by both parties;

          (ii)      *     *     *     *     * per year for    *  years, due on
               each of the first   *   anniversary dates of the EFFECTIVE DATE.

     The obligation to pay the foregoing License Fees shall be a non-cancelable
     commitment by LICENSEE and such payments shall be due and payable at the
     times specified regardless of whether this LICENSE AGREEMENT is still in
     effect.

(b)  In addition, LICENSEE shall pay LICENSOR the following Milestone License
     Fees at times and amounts as follows as long as this LICENSE AGREEMENT is
     still in effect:

* 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.

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          (i)       *                                 upon      *
                    *    for a LICENSED PRODUCT, due thirty (30) calendar days
               after said event; and

          (ii)      *                                  upon      *
                    *    for a LICENSED PRODUCT, due thirty (30) calendar days
               after said event.

4.   ROYALTIES, RECORDS AND REPORTS

(a)  For the rights and privileges granted under this SUBLICENSE AGREEMENT,
     LICENSEE shall pay to LICENSOR earned royalties equal to      *
     of the NET SALES VALUE of LICENSED PRODUCT sold by LICENSEE, AFFILIATES or
     SUBLICENSEES.

(b)  Earned royalty shall be paid in the manner provided herein, to the end of
     the term or terms of the last to expire of the issued patents within the
     PATENT RIGHTS, or until this SUBLICENSE AGREEMENT is terminated as
     hereinafter provided. Earned royalty shall be paid in respect of pending
     patent applications within the PATENT RIGHTS during such time as the
     application is actively being prosecuted and has not been abandoned or
     finally rejected and appellate procedures are unsuccessfully exhausted or
     the time for perfecting any further appeals has expired.

(c)  Earned royalty shall be paid pursuant to Article 4(a) hereof on all
     LICENSED PRODUCTS SOLD under this SUBLICENSE AGREEMENT; however, earned
     royalty shall be payable hereunder as to a given LICENSED PRODUCT only when
     a license or an immunity granted under Article 2 hereof is utilized in the
     manufacture or SALE thereof, and the earned royalty payable on a given
     LICENSED PRODUCT made hereunder shall not become due and owing until such
     LICENSED PRODUCT is SOLD.

     Any LICENSED PRODUCT made under a license granted pursuant to this
     SUBLICENSE AGREEMENT prior to the termination or expiration of the
     applicable PATENT RIGHTS and not SOLD prior to the termination or
     expiration of such PATENT RIGHTS shall be

* 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.

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            subject to the payment of royalties hereunder when SOLD, even though
            such SALE occurs after the termination or expiration of all
            pertinent licenses or rights granted hereunder.

            The earned royalty for any particular LICENSED PRODUCT shall be due
            upon the first bona fide arm's length SALE thereof by LICENSEE,
            AFFILIATE or SUBLICENSEE, and any subsequent SALE of such LICENSED
            PRODUCT by other than LICENSEE, AFFILIATE, or SUBLICENSEE shall be
            royalty free.

      (d)   Notwithstanding the provisions of Article 4(b) hereof, in the case
            of transfers or SALES of any LICENSED PRODUCT between LICENSEE and
            an AFFILIATE, between AFFILIATES, or between LICENSEE or AFFILIATE
            and SUBLICENSEES, one and only one royalty shall be payable thereon
            and such royalty shall become payable upon the final SALE thereof
            to a third party other than LICENSEE, AFFILIATE or SUBLICENSEE.

      (e)   LICENSEE shall keep full, true and accurate books of account
            containing all particulars which may be necessary for the purpose
            of showing the amount payable to LICENSOR by way of royalty as
            aforesaid or by way of any other provision hereunder. Said books of
            account shall be kept at LICENSEE's principal place of business.
            Said books and the supporting data shall be maintained and kept
            open at all reasonable times, for three (3) years following the end
            of the calendar year to which they pertain (and access shall not be
            denied thereafter, if reasonably available), to the inspection of
            an independent certified public accountant retained by LICENSOR and
            reasonably acceptable to LICENSEE for the purpose of verifying
            LICENSEE's royalty statements, or LICENSEE's compliance in other
            respects with this SUBLICENSE AGREEMENT. Names of customers and
            other confidential information shall not be disclosed to LICENSOR
            by such independent accountant. Such accountant shall be retained
            at LICENSOR's sole expense, unless during any such inspection a
            deficiency in payments to LICENSOR of one percent (1%) or more is
            determined to exist in which event LICENSEE shall within thirty
            (30) days reimburse LICENSOR for the full expense of retaining such
            accountant, including but not limited to professional and
            administrative fees, travel and subsistence costs.

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     (f)   LICENSEE, within sixty (60) days after the first day of January,
           April, July and October of each year (the "Reporting Date"), shall
           deliver to LICENSOR a true and accurate report, giving such
           particulars of the LICENSED PRODUCTS SOLD by LICENSEE, AFFILIATES and
           SUBLICENSEES during the preceding three (3) months ("Accounting
           Period") under this SUBLICENSE AGREEMENT as are pertinent to an
           accounting for royalty under this SUBLICENSE AGREEMENT. These shall
           include at least the following, separately stated as to the LICENSED
           PRODUCTS:

           (i)    the quantity of LICENSED PRODUCTS invoiced by LICENSEE,
                  AFFILIATES and SUBLICENSEES during those three (3) months and
                  the billings therefor;

           (ii)   the allowable deductions therefrom;

           (iii)  the calculation of royalties thereon;

           Simultaneously with the delivery of each such report, LICENSEE shall
           pay to LICENSOR the royalty and any other payments due under this
           SUBLICENSE AGREEMENT for the period covered by such report. If no
           royalties are due, it shall be so reported. Royalties shall be paid
           to LICENSOR in United States Dollars at LICENSOR's office specified
           for the purposes of giving notice in Article 14(b) hereof.

     (g)   All amounts payable hereunder by LICENSEE to LICENSOR shall be
           payable in United States Dollars. In the event any LICENSED PRODUCT
           shall be SOLD by LICENSEE, SUBLICENSEE or an AFFILIATE for currency
           other than United States Dollars, the earned royalty payable as to
           such LICENSED PRODUCT under Article 4(a) hereof shall first be
           determined in the currency for which the LICENSED PRODUCT was SOLD
           and then converted into its equivalent in United States Dollars at
           the official rate of exchange of the currency of the country from
           which royalties are payable as quoted by the Wall Street Journal, New
           York Edition, for the last business day prior to the Reporting Date
           for which the royalty payment is made.

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     (h)   In the event that any taxes, withholding or otherwise, are levied by
           any taking authority in connection with accrual or payment of any
           royalties payable to LICENSOR under this SUBLICENSE AGREEMENT,
           LICENSEE or its AFFILIATES and/or SUBLICENSEES shall have the right
           to pay such taxes to the local tax authorities on behalf of LICENSOR
           (or, in the case of SUBLICENSEE SALES, on behalf of LICENSEE), and
           the payment to LICENSOR of the net amount due after reduction by the
           amount of such taxes, together with evidence of payment of such
           taxes, shall fully satisfy LICENSEE's royalty obligations under this
           SUBLICENSE AGREEMENT. LICENSEE agrees to make a good faith effort to
           obtain a refund of any such taxes for LICENSOR if LICENSOR informs
           LICENSEE that it believes such taxes have been improperly levied.

     (i)   In the event that any payment required under this SUBLICENSE
           AGREEMENT shall be overdue, LICENSEE shall pay interest thereon at an
           annual rate of      *           over the United States Clearing Bank
           Base Lending Rate computed from the date when the payment became due;
           provided that if such rate shall be in excess of that allowed by
           applicable law, then the highest rate allowable shall apply. Payment
           shall be deemed to have been made when received by LICENSOR.

     5.    CONFIDENTIALITY

           Disclosures of confidential and proprietary information hereunder by
           either party to the other shall be made in writing (or promptly
           confirmed in writing if made in another form), and shall be clearly
           marked "Confidential". Such confidential information shall be
           safeguarded by the recipient, shall not be disclosed to third parties
           and shall be made available only to recipient's employees or
           independent contractors who agree in writing to equivalent conditions
           and who have a need to know the information for the purposes
           specified under this Agreement. All confidential information shall
           remain the property of and be returned to the disclosing party within
           thirty (30) days of receipt of a written request by the disclosing
           party, or within thirty (30) days of termination of this Agreement.
           These mutual obligations of confidentiality shall apply for a period
           of 3 (three) years after the termination of this Agreement, but such
           obligations shall not apply to any information that:

* 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.

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(i)       is or hereafter becomes generally available to the public other than
          by reason of any default with respect to a confidentiality obligation
          under this Agreement; or

(ii)      was already known to the recipient as evidenced by prior written
          documents in its possession; or

(iii)     is disclosed to the recipient by a third party who is not in default
          of any confidentiality obligation to the disclosing party hereunder;
          or

(iv)      is developed by or on behalf of the receiving party, without reliance
          on confidential information received hereunder; or

(v)       is provided to third parties under appropriate terms and conditions
          including confidentiality provisions equivalent to those in this
          Agreement for consulting, manufacturing development, manufacturing,
          external testing and marketing trials with respect to the products
          covered by this Agreement; or

(vi)      is used with the consent of the disclosing party (which consent shall
          not be reasonably withheld) in applications for patents or copyrights
          under the terms of this Agreement; or

(vii)     has been approved in writing for publication by each of the parties;
          or

(viii)    is required to be disclosed in compliance with applicable laws or
          regulations in connection with the manufacture or sale of products
          covered by this Agreement; or

(ix)      is otherwise required to be disclosed in compliance with applicable
          laws or regulations or order by a court or other regulatory body
          having competent jurisdiction; or

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(x) is product-related information which is reasonably required to be disclosed
    in connection with marketing of products covered by this Agreement.

6.  DEVELOPMENT and COMMERCIALIZATION

(a) LICENSEE agrees to diligently attempt to exploit the LICENSED PATENTS and
    will diligently exert efforts to create a demand for the LICENSED PRODUCTS
    in at least those countries where PATENT RIGHTS exist. Within sixty (60)
    days after the end of each semi-annual period (June 30 and December 31)
    prior to first commercial sale of LICENSED PRODUCT, LICENSEE shall submit a
    summary report to LICENSOR reporting the progress it, or its SUBLICENSEES,
    have made towards commercialization in the preceding semi-annual period.
    This report will include a summary of the work done in the development of
    LICENSED PRODUCTS. Non-performance of this Article 7 shall be a breach or
    default under this SUBLICENSE AGREEMENT, entitling the LICENSOR, in addition
    to other remedies LICENSOR may have, to terminate this SUBLICENSE AGREEMENT
    under Article 7(c) hereunder.

(b) Promptly following Health Regulatory Approval to market LICENSED PRODUCTS in
    such countries where approval is sought, LICENSEE agrees to use diligent
    efforts to promote and sell LICENSED PRODUCTS at a level which is consistent
    with those marketing efforts normally used for similar products in the
    pharmaceutical industry.

7.  TERMINATION

(a) LICENSEE may terminate this LICENSE AGREEMENT at any time upon sixty (60)
    days written notice to LICENSOR, but such termination shall not relieve
    LICENSEE of its obligation to pay the license fees due under Article 3(a)
    hereunder.

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(b) If LICENSEE shall become bankrupt or insolvent and/or if the business of
    LICENSEE shall be place in the hands of a Receiver, Assignee, or Trustee,
    whether by the voluntary act of LICENSEE or otherwise, this SUBLICENSE
    AGREEMENT shall immediately terminate.

(c) Upon any breach of or default under this SUBLICENSE AGREEMENT by LICENSEE,
    LICENSOR may terminate this SUBLICENSE AGREEMENT by forty-five (45) days
    written notice to LICENSEE. Said notice shall become effective at the end of
    said period, unless during said period LICENSEE shall cure such breach or
    default.

(d) Upon termination of this SUBLICENSE AGREEMENT for any reason, other then by
    expiry of the PATENT RIGHTS, all rights granted hereunder shall revert to
    LICENSOR for the benefit of LICENSOR.

(e) LICENSEE's obligations to report to LICENSOR and to pay royalties to
    LICENSOR as to any LICENSED PRODUCT made or USED under a license or an
    immunity granted pursuant to this SUBLICENSE AGREEMENT prior to termination
    or expiration of this SUBLICENSE AGREEMENT shall survive such termination or
    expiration and any termination of this SUBLICENSE AGREEMENT shall be subject
    to this Article 7(d).

(f) Upon any termination of this SUBLICENSE AGREEMENT its provisions shall
    continue in force and effect to the extent necessary to effectuate any
    provision which by its terms clearly shall continue beyond such termination.

(g) Upon termination of this SUBLICENSE AGREEMENT other than by expiry of the
    PATENT RIGHTS, LICENSEE shall have no right under the PATENT RIGHTS to
    make, have made, USE or SELL LICENSED PRODUCTS.

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8.   ASSIGNMENT

     This Agreement or any interest herein shall not be assigned or transferred,
     in whole of in part, by either party hereto without the prior written
     consent of the other party hereto. However, without securing such prior
     written consent, either party may assign this Agreement to an AFFILIATE or
     a successor of all or substantially all of its business to which this
     Agreement relates (except a successor under a reorganization pursuant to 11
     U.S.C. Sec. 365) provided, that no such assignment shall be binding and
     valid until and unless the assignee shall have assumed in a writing,
     delivered to the non-assigning party, all of the duties and obligations of
     the assignor, and, provided, further, that the assignor shall remain liable
     and responsible to the non-assigning party hereto for the performance and
     observance of all such duties and obligations.

9.   INFRINGEMENT

(a)  LICENSOR agrees to enforce its patents within the PATENT RIGHTS from
     infringement and sue infringers when in its sole judgement such action may
     be reasonably necessary, proper and justified.

(b)  Notwithstanding the provisions of Article 9(a) above, provided LICENSEE
     shall have supplied LICENSOR with evidence comprising a prima facie case of
     infringement of the PATENT RIGHTS by a third party hereto SELLING
     significant quantities of products in competition with LICENSEE's, an
     AFFILIATE's, or SUBLICENSEE's SALE of LICENSED PRODUCTS hereunder, LICENSEE
     shall be entitled to notify LICENSOR in writing requesting LICENSOR to take
     steps to enforce the PATENT RIGHTS and LICENSOR shall within three (3)
     months of the receipt of such written request either:

     (i)  cause said infringement to terminate (including termination for
          whatever cause); or

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     (ii)  initiate legal proceedings against the infringer; or

     (iii) grant LICENSEE the right, at LICENSEE's sole expense, to bring suit
           against the infringer for infringement of the PATENT RIGHTS.

(c)  In no event shall LICENSEE be entitled to invoke Article 9(b) above with
     respect to more than one alleged infringer in any one country listed with
     the PATENT RIGHTS at any given time even though there be more than one such
     infringer in such country and the provisions of Article 9(b) hereof shall
     not come into effect or continue in effect as to such country while
     LICENSOR is carrying on any such legal proceeding therein.

(d)  In the event either party hereto shall initiate or carry on legal
     proceedings to enforce the PATENT RIGHTS against an alleged infringer, as
     provided herein, the other party hereto shall fully co-operate with the
     party initiating or carrying on such proceedings.

(e)  In the event LICENSOR shall institute suit or other legal proceedings to
     enforce the PATENT RIGHTS, it shall have sole control of such suit.

(f)  In the event LICENSEE shall institute suite or other legal proceedings
     under Article 9(b) above to enforce the PATENT RIGHTS, LICENSOR shall be
     entitled to be represented by counsel of its choosing, at its sole expense,
     and LICENSEE shall be entitled to retain for it as damages, an amount
     corresponding to its actual out-of-pocket legal expenses paid to third
     parties for conducting such suit or other legal proceedings and shall pay
     to LICENSOR TWENTY-FIVE PERCENT (25%) of the balance of such recovery.
     LICENSEE shall not discontinue or settle any such proceedings brought by it
     without obtaining the concurrence of LICENSOR and giving LICENSOR a timely
     opportunity to continue such proceedings in its own name, under its sole
     control, and at its sole expense. In the event LICENSOR does not concur in
     such settlement, it must continue such proceeding in its own name, under
     its sole control and expense

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     within three (3) months of being given notice by LICENSEE of its desire to
     settle or LICENSEE shall be entitled to settle without LICENSOR's
     concurrence.

10.  STATUS OF THE PATENT RIGHTS

(a)  Pursuant to the SCRIPPS AGREEMENT, SCRIPPS agreed, with the advice of
     LICENSOR, to diligently prepare, file and prosecute the patent applications
     filed within the PATENT RIGHTS and LICENSOR agreed to reimburse SCRIPPS for
     the reasonable expenses associated therewith. Upon execution of this
     SUBLICENSE AGREEMENT, LICENSEE agrees to assume LICENSOR's obligation to
     reimburse SCRIPPS for patent expenses under the SCRIPPS AGREEMENT for
     patent expenses incurred after the EFFECTIVE DATE. LICENSOR shall instruct
     SCRIPPS to forward invoices for such patent expenses directly to LICENSEE
     and LICENSEE agrees to promptly pay such expenses. LICENSOR agrees to
     assure that SCRIPPS performs its obligations to maintain and prosecute the
     PATENT RIGHTS under the SCRIPPS AGREEMENT and LICENSOR agrees to enforce
     its rights vis-a-vis SCRIPPS in this regard on LICENSEE's behalf if
     necessary. LICENSOR does not however represent or warrant that any patent
     within the PATENT RIGHTS will be obtained or that any such patent so
     obtained will be valid and enforceable.

(b)  LICENSEE shall also be responsible for expenses associated with maintaining
     the patents obtained on the patent applications referred to in Article
     10(a) hereof.

(c)  Upon request by LICENSEE, LICENSOR will advise, or ensure that SCRIPPS
     advises, LICENSEE of the status of all patent applications and patents
     within the PATENT RIGHTS.

(d)  Should LICENSEE elect not to continue paying the expenses for the
     maintenance or prosecution of any patent or patent application under the
     PATENT RIGHTS, it shall give LICENSOR thirty (30) days written notice
     thereof and LICENSOR may thereafter

                                       17

<PAGE>   18
     assume payment of such expenses at its own cost. In the event LICENSEE
     ceases to pay the expenses of prosecution of maintenance of any particular
     patent application or patent, then LICENSEE shall cease to have license
     rights with respect to such patent application or patent and LICENSOR
     shall be free to license such rights to a third party.

11.  NON-USE OF NAMES

(a)  LICENSEE shall not use the name of any inventor of the PATENT RIGHTS, or
     of any institution with which he has been or is connected, or of LICENSOR,
     or any adaptation of any of them, in any advertising, promotional or sales
     literature, without prior written consent obtained from LICENSOR in each
     case. LICENSEE shall require its AFFILIATES to comply with this Article 11
     to the same extent that it applies to LICENSEE.

(b)  LICENSOR shall not use the name of LICENSEE or its AFFILIATES or any
     adaptation thereof, in any advertising, promotional or sales literature or
     in any press release without prior written consent of LICENSEE in each
     case.

12.  WARRANTIES AND REPRESENTATIONS

(a)  LICENSOR warrants that it has exclusive rights by agreement, assignment or
     license to the PATENT RIGHTS, except with respect to the United States
     Government, and that it has full power and authority to execute, deliver
     and perform this SUBLICENSE AGREEMENT and the obligations hereunder.

(b)  Each party hereby warrants that the execution, delivery and performance of
     this SUBLICENSE AGREEMENT has been duly approved and authorized by all
     necessary corporate actions of both parties; do not require any
     shareholder approval which has not been obtained or the approval and
     consent of any trustee or the holders of any

                                       18
<PAGE>   19
     indebtedness of either party; do not contravene any law, regulation, rules
     or order binding on either Party, and do not contravene the provisions of
     or constitute a default under any indenture, mortgage contract or other
     agreement or instrument to which either party is a signatory.

(c)  Nothing in this SUBLICENSE AGREEMENT shall be construed as a
     representation or a warranty by LICENSOR as to the validity or scope of
     any patent within the PATENT RIGHTS or that any process practiced or
     anything made, USED or SOLD under any license or immunity granted under
     this SUBLICENSE AGREEMENT is or will be free from infringement of patents
     of third parties.

13.  INDEMNITY

     LICENSEE agrees to indemnify and hold harmless INVENTORS, SCRIPPS,
     LICENSOR, its AFFILIATES and their respective officers, directors,
     employees and agents from and against any and all claims, damages and
     liabilities, including reasonable attorney's fees and expenses, asserted
     by third parties, both government and private, arising from LICENSEE's and
     AFFILIATES' manufacture, USE or SALE of LICENSED PRODUCTS or the USE
     thereof by others including ultimate consumers. LICENSEE hereby agrees to
     maintain in full force and effect general liability and product liability
     insurance with a commercial insurance carrier, which policy shall have
     individual and aggregate limits appropriate to the conduct of LICENSEE's
     business covering the sale and distribution of LICENSED PRODUCTS. LICENSOR
     shall be named as an additional insured in such insurance policy. LICENSEE
     shall provide a certificate of insurance to LICENSOR evidencing such
     insurance policy and providing that such insurance will not be cancelled,
     modified or subject to non-renewal without thirty (30) days' written
     notice to LICENSOR. This insurance will remain in effect until three (3)
     years from termination of this Agreement.

                                       19

<PAGE>   20
14.  GENERAL

(a)  This SUBLICENSE AGREEMENT, including the Appendix hereto attached,
     constitutes the entire agreement and understanding between the parties as
     to the PATENT RIGHTS. All prior negotiations, representations, agreements,
     contracts, offers and earlier understandings of whatsoever kind, whether
     written or oral between LICENSOR and LICENSEE in respect of the PATENT
     RIGHTS, are superseded by, merged into, extinguished by and completely
     expressed by this SUBLICENSE AGREEMENT.

     No aspect, part or wording of this SUBLICENSE AGREEMENT may be modified
     except by mutual agreement between the LICENSOR and LICENSEE taking the
     form of an instrument in writing signed and dated by duly authorized
     representatives of both LICENSOR and LICENSEE.

(b)  Any notice required or permitted to be given by this SUBLICENSE AGREEMENT
     shall be given by post-paid, first class, registered or certified mail
     addressed to:

                                General Counsel

                               Johnson & Johnson

                          One Johnson & Johnson Plaza

                      New Brunswick, New Jersey 08903-5501

                                      and

                                    Chairman

                 R.W. Johnson Pharmaceutical Research Institute

                                   Route 202

                           Raritan, New Jersey 08869

                                       or

                                       20

<PAGE>   21
                       SANGAMO BIOSCIENCES, INCORPORATED

                           950 MARINA VILLAGE PARKWAY

                                   SUITE 100

                               ALAMEDA, CA 94501

     Such addresses may be altered by notice so given. If no time limit is
     specified for a notice required or permitted to be given by this
     SUBLICENSE AGREEMENT, the time limit therefor shall be ten (10) full
     business days, not including the day of mailing. Notice shall be
     considered made as of the date of deposit with the United States Post
     Office.

(c)  This SUBLICENSE AGREEMENT and its effect are subject to and shall be
     construed and enforced in accordance with the laws of the State of New
     Jersey, United States, except as to any issue which depends upon the
     validity, scope or enforceability of any patent within the PATENT RIGHTS,
     which issue shall be determined in accordance with the applicable patent
     laws of the country of such patent.

(d)  Any controversy or claim arising out of or relating to this Agreement, or
     the breach thereof, including any dispute relating to patent validity or
     infringement arising under this agreement, shall be settled by
     arbitration. Such arbitration shall be conducted at New York, New York, in
     accordance with the rules then pertaining to the American Arbitration
     Association with a panel of three (3) arbitrators. One arbitrator shall be
     appointed by LICENSOR; one shall be appointed by LICENSEE; and the third
     shall be appointed by the American Arbitration Association. The law of the
     State of New York shall apply to the arbitration proceedings. The
     arbitrators shall have the authority to grant specific performance. The
     judgment and award of the arbitrators shall be final and binding and may be
     entered in any court having jurisdiction thereof, or application may be
     made to such court for judicial acceptance of any award or an order of
     enforcement, as the case may be. Each party shall bear its own costs and
     expenses, including attorney's fees and fees and expenses of the
     arbitrator it selects, and shall

                                       21
<PAGE>   22
     share equally the fees and expenses of the arbitrator selected by the
     American Arbitration Association.

(e)  Nothing in this SUBLICENSE AGREEMENT shall be construed so as to require
     the commission of any act contrary to law, and wherever there is any
     conflict between any provision of this SUBLICENSE AGREEMENT or concerning
     the legal right of the parties to contract and any statute, law, ordinance
     or treaty, the latter shall prevail, but in such event the affected
     provisions of this SUBLICENSE AGREEMENT shall be curtailed and limited
     only to the extent necessary to bring it within the applicable legal
     requirements.

(f)  LICENSEE shall take all reasonable and necessary steps to register this
     SUBLICENSE AGREEMENT in any country where such is required to permit the
     transfer of funds and/or payment of royalties to LICENSOR hereunder or is
     otherwise required by the government or law of such country to effectuate
     or carry out this SUBLICENSE AGREEMENT. Notwithstanding anything contained
     herein, but subject to Article 13(e) hereof, LICENSEE shall not be
     relieved of any of its obligations under this SUBLICENSE AGREEMENT by any
     failure to register this SUBLICENSE AGREEMENT in any country, and,
     specifically, LICENSEE shall not be relieved of its obligation to make any
     payment due to LICENSOR hereunder at LICENSOR's address specified in
     Article 14(b) hereof, where such payment is blocked due to any failure to
     register this SUBLICENSE AGREEMENT.

(g)  As used in this SUBLICENSE AGREEMENT, singular includes the plural and
     plural includes the singular, wherever so required by the context. The
     headings appearing at the beginning of the numbered Articles hereof have
     been inserted for convenience only and do not constitute a part of this
     SUBLICENSE AGREEMENT.

(h)  Nothing herein shall be deemed to create an agency, joint venture or
     partnership between the parties hereto.

                                       22
<PAGE>   23
(i)   Notwithstanding any other provisions of this SUBLICENSE AGREEMENT, neither
      of the parties hereto shall be liable in damages or have the right to
      terminate this SUBLICENSE AGREEMENT for any delay or default in
      performing hereunder if such delay or default is caused by conditions
      beyond its control including, but not limited to acts of God,
      governmental restrictions, wars, or insurrections, strikes, floods, work
      stoppages and/or lack of materials; provided, however, that the party
      suffering such delay or default shall notify the other party in writing
      of the reasons for the delay or default. If such reasons for delay or
      default continuously exist for six (6) months, this SUBLICENSE AGREEMENT
      may be terminated by either party.

15.   EFFECTIVE DATE AND TERM

      This SUBLICENSE AGREEMENT shall become effective on the day and year
      first above written and shall, unless terminated earlier by one of the
      parties in accord with its terms, expire concurrently with the
      expiration, invalidation or lapsing of all issued patents within the
      PATENT RIGHTS and/or the abandonment of all pending patent applications
      within the PATENT RIGHTS.

16.   GOVERNMENT RIGHTS

(a)   LICENSEE acknowledges and agrees that its respective rights and
      obligations pursuant to this SUBLICENSE AGREEMENT shall be subject to
      SCRIPPS' rights and SCRIPPS' obligations and the rights of the United
      States Government, if any, which arose or resulted from SCRIPPS' receipt
      of research support from the United States Government.

(b)   LICENSEE shall comply in all respects with the applicable provisions of
      any applicable law, requirement, regulation or determination by any
      Government relating to the PATENT RIGHTS and shall provide LICENSOR with
      any information or report required to comply with any such law,
      requirement, regulation or determination.

                                       23
<PAGE>   24
(c)   Any inconsistency between this SUBLICENSE AGREEMENT and the pertinent
      provisions of any law, requirement, regulation or determination by a
      Government shall be resolved by conforming this SUBLICENSE AGREEMENT to
      such provisions of any such law, requirement, regulation or determination.

(d)   Any agreement or arrangement relating to the PATENT RIGHTS between
      LICENSEE and any third party hereto shall be made expressly subject to
      the terms and conditions of this Article 16 and LICENSEE shall require
      such other party to comply therewith to the same extent that LICENSEE is
      required to comply.

(e)   Any license or other right granted or to be granted pursuant to this
      SUBLICENSE AGREEMENT shall be subject to any and all applicable
      governmental laws and regulations relating to compulsory licensing.

                                       24
<PAGE>   25
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and duly
executed this SUBLICENSE AGREEMENT on the date(s) indicated below, to be
effective the day and year first above written.

For and on Behalf of LICENSOR, JOHNSON & JOHNSON

By:     /s/ RONALD G. GELBMAN
        ---------------------------------------------

Name:   Ronald G. Gelbman
        ---------------------------------------------

Title:  Worldwide Chairman
        ---------------------------------------------

        Pharmaceuticals & Diagnostics Group
Date:            April 15, 1996
        ---------------------------------------------

For and on Behalf of LICENSEE, SANGAMO BIOSCIENCES, INCORPORATED

By:     /s/ EDWARD LANPHIER
        ----------------------------------------------

Name:   Edward Lanphier
        ----------------------------------------------

Title:  President
        ----------------------------------------------

                                       25<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 2-1, Toranomon 2-chome, Minato-ku, Tokyo 105-8422, Japan.

        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

<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 two Target(s) and such other
information as the parties mutually agree is reasonably necessary to assist
Sangamo in designing the ZFPs. Notwithstanding the foregoing, the Customer shall
have final discretion with respect to the provision of such information.

               2.2 Sangamo shall design, assemble and characterize two (2) zinc
finger DNA recognition proteins binding to each Target.
<PAGE>   3

               2.3 Within *  weeks after receipt of the information described in
Section 2.1 above, Sangamo shall deliver to the Customer certain information
regarding the characterization of each ZFP (including data and specifications
regarding the binding sites, affinities, and in vivo co-transfection reporter
activation assays) that is reasonably necessary for the Customer to use the ZFP
Materials in the Research Field. Sangamo will consult by telephone or facsimile
or visits at mutually agreeable times at no additional cost to Customer with
Customer's employees to answer questions related to the ZFP Materials.

               2.4 Within      *      days after delivery of the   *   Target to
Sangamo, the Customer shall pay Sangamo      *     *     *     *     *     *
   *      Within     *     * days after delivery of the second 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      *     *     *     *     *     *
for the first Target   *     *     *     *     *     *     *     *     *     *
     *     *     *     *     *     *     *     *     *     *     *     *     *
for the second Target. If the Customer is unable to confirm the activity of a
ZFP in the same assays as used by Sangamo, then Sangamo, shall redesign and
deliver redesigned ZFP Materials to the Customer within 8 weeks after the
Customer so notifies Sangamo. In the event that the Customer is unable to
confirm activity of the re-designed ZFP Materials then the Customer shall have
no obligation to make any additional payments. 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.

                      Sangamo shall issue signed invoices in advance for each
payment due hereunder. Withholding tax shall be deducted from the payments made
by the Customer to the proper tax authority and a receipt of payments of the tax
secured and promptly delivered to Sangamo.

               2.5 In connection with the shipping of Materials, Sangamo agrees
to pay for all shipping, handling, and customs duty related costs.

        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 may
also transfer ZFP Materials to its research partners without any additional
charges or fees, subject to agreement by such partners of the terms and
conditions set forth in this Agreement and with the prior written consent of
Sangamo, such consent not to be unreasonably withheld. 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 March 8, 1999, and January 12, 1999, 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, unless due to reasons relating to Sangamo's ZFP Materials, (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 Neither party 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 the other;
provided, however, that either party 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.

       10. Ownership. All data and results of experiments obtained by the
Customer through the use of the ZFP Materials (the "Results") and inventions
from the use of the ZFP Materials shall be exclusively owned by the Customer and
the Customer shall have the right to use them for whatever purposes as it
desires, provided, however, that the use of the Progeny shall be limited to the
Research Field. For the avoidance of doubt, Sangamo shall not have the right to
use, commercialize, or otherwise exploit for whatever purpose the Results or any
of the Customer's inventions from the use of the ZFP Materials.

       11. Publication. Customer may publish the Results at its sole discretion
provided

<PAGE>   7

that Sangamo Confidential Information shall be removed from such publications
or written permission obtained from Sangamo prior to the use of such
Information, such permission not to be unreasonably withheld.

        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:

<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 June 15, 1999, and March 8, 1999 and January 12, 1999, 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.

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