Research Funding Agreement With Baxter Healthcare

RESEARCH FUNDING AGREEMENT


This Agreement is effective as of January 11, 2000, by and between Baxter Healthcare Corporation, a Delaware corporation, acting through its CardioVascular Group, having offices at 17221 Red Hill Avenue, Irvine, California 92614 (hereinafter referred to as "BAXTER") and Sangamo Biosciences, Inc., a Delaware corporation, having an office at Point Richmond Tech Center, 501 Canal Blvd., Suite A100, Richmond, California 94840 (hereinafter referred to as "SANGAMO").


RECITALS


WHEREAS, BAXTER and SANGAMO have entered into a License Agreement, contemporaneously herewith (the "License Agreement"); and


WHEREAS, SANGAMO wishes to undertake research relating to the further development of its proprietary zinc finger binding protein and gene therapy technology and BAXTER wishes to fund such research to facilitate SANGAMO's ability to license such technology to BAXTER under the License Agreement;


NOW, THEREFORE, the parties hereto agree as follows:


ARTICLE 1. Definitions


All terms used in this agreement (other than names of the parties and Article headings) which are set forth in upper case letters, but not defined herein, shall have the respective meanings set forth in the License Agreement.


ARTICLE 2. Research Activity


2.1 Research Program. The research program which is contemplated by this Agreement is set forth in the research plan (the "Research Plan") attached as Exhibit A. The Research Plan sets forth the research tasks and objectives to be performed by SANGAMO. SANGAMO agrees to use its commercially reasonable efforts consistent with international practice in the biotechnology industry, SANGAMO's sound business judgment, and research, regulatory and market conditions, to conduct the SPONSORED RESEARCH in accordance with the Research Plan in consideration for the funding provided in Section 2.2.


2.2 Funding. BAXTER agrees to fund the SPONSORED RESEARCH as follows: (i) One Million Dollars ($1,000,000) on or before January 21, 2000; and (ii) One Million Dollars ($1,000,000) on the earlier of April 1, 2001, or the date on which SANGAMO has fulfilled its obligations set forth in Clause 5.1(b) of the License Agreement. If the parties mutually agree to extend the term of this Agreement for additional research projects, the parties shall amend this


2 Agreement to establish a mutually acceptable research plan, budget and payment schedule for such extension; provided, however, that the budget and payment schedule therefor shall be calculated on the basis of the reasonably anticipated fully burdened cost to SANGAMO to perform the additional research projects under the new research plan at rates not to exceed SANGAMO's then standard FTE rate for performing similar research programs.


2.3 Evaluation of Research Plan. Within thirty (30) days after the end of each calendar quarter during the term of the SPONSORED RESEARCH, SANGAMO shall submit to BAXTER a written report describing any INVENTIONS conceived or reduced to practice, and the progress of the SPONSORED RESEARCH, including without limitation, a written report and analysis of all experimentation conducted pursuant to performing the SPONSORED RESEARCH during such calendar quarter. If the STEERING COMMITTEE determines pursuant to the LICENSE AGREEMENT that modifications of the existing Research Plan are required, the Research Plan will be amended as mutually agreed to in writing by the parties.


2.4 Exclusivity of Research. SANGAMO agrees that during the term of the License Agreement it will not perform any research in the FIELD OF RESEARCH similar to the SPONSORED RESEARCH for any other entity, nor assist any other entity, in pursuing any work in the FIELD OF RESEARCH, without the written approval of BAXTER.


2.5 Personnel Agreements. SANGAMO represents and warrants that it has agreements with any individual employed to perform the SPONSORED RESEARCH under this Agreement sufficient to procure and implement the rights and restrictions granted and imposed by this Research Funding Agreement.


2.6 Access to Records. SANGAMO agrees to maintain and preserve the documents, laboratory notebooks, graphs and charts and other original records and data that result from the SPONSORED RESEARCH, and agrees to provide BAXTER access to such records upon reasonable notice during normal business hours during the term of this Agreement and the License Agreement solely for the purpose of exercising its rights under the LICENSE AGREEMENT.


2.7 Compliance with Laws. SANGAMO agrees to comply in all material respects with all applicable national and local laws of the jurisdiction wherein it conducts business, including compliance at all times with applicable Good Laboratory Practice guidelines as established by the FDA. SANGAMO further agrees that any compensation it receives under this Agreement shall not be disbursed for any purpose which is unlawful or unethical under those laws.


ARTICLE 3. Property Rights


3.1 Property Rights. Any and all INVENTIONS shall be owned by or otherwise assigned to SANGAMO and licensed back to BAXTER pursuant to the terms of the License Agreement. BAXTER agrees to assign to SANGAMO and hereby assigns any and all of its rights to BAXTER INVENTIONS and to JOINT INVENTIONS, including rights under the patent, copyright and other intellectual property laws of the United States or any other country.


-2- 3 3.2 Disclosure of INVENTIONS. SANGAMO and BAXTER shall disclose promptly to each other such INVENTIONS within thirty (30) days of conceiving and/or reducing to practice such INVENTIONS.


ARTICLE 4. Term and Termination


4.1 The term of this Agreement shall be three (3) years commencing on its effective date and shall expire automatically unless sooner terminated in accordance with this Article 4.


4.2 In addition to any rights it may have hereunder, a party may terminate this Agreement upon (30) days prior written notice following the occurrence of any of the following:


(a) the bankruptcy, insolvency, dissolution or winding up of the other party (other than dissolution or winding up for the purposes of a solvent reconstruction or amalgamation); or


(b) the failure of the other party to cure the breach of any provision of this Agreement for the payment of funds within thirty (30) days after written notice thereof by the non-breaching party; or


(c) the failure of the other party to cure the breach of any material provision of this Agreement, except nonpayment of funds, within sixty (60) days after written notice thereof by the non-breaching pa ...