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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

July 4, 2001
Date of Report (Date of earliest event reported)

SANGAMO BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)

Delaware   000-30171   68-0359556
(State or other
jurisdiction of incorporation)		   (Commission
File Number)		   (I.R.S. Employer
Identification No.)

501 Canal Blvd, Suite A100
Richmond, California 94804
(Address of principal executive offices and zip code)

(510) 970-6000
(Registrant's telephone number, including area code)

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

    On July 4, 2001 Sangamo BioSciences, Inc. ("Sangamo") completed the acquisition of Gendaq Ltd., a privately held biotechnology company headquartered in London ("Gendaq"). Founded in 1999, Gendaq is focused on the engineering of ZFPs based on the research of Sir Aaron Klug of the Medical Research Council. Gendaq's structural biology capabilities, particularly in the areas of high-throughput in vitro selection of ZFPs, will augment Sangamo's existing methodologies. The acquisition was completed in accordance with the Agreement for the sale and purchase of all the issued share capital of Gendaq Limited between Sangamo and the shareholders of Gendaq, dated June 28, 2001 (the "Acquisition Agreement"), a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

    In connection with the acquisition, Sangamo acquired all of the outstanding shares of Gendaq in exchange for 2,124,638 newly issued shares of Sangamo common stock. In addition, Sangamo has reserved 125,352 shares of common stock for options granted to Gendaq employees. Pursuant to the Acquisition Agreement, Gendaq will continue as a wholly owned subsidiary of Sangamo.

    The acquisition will be accounted for under the purchase method of accounting. The total purchase price of the transaction is approximately $34 million, based on an average stock price of $14.90 on the date the call option agreement was signed between the two parties. The Company is in the process of allocating the purchase price to the fair value of the net assets acquired, including intangible assets. The Company presently anticipates that a significant portion of the purchase price will be allocated to in-process research and development, resulting in a charge to operations in the quarter ended September 30, 2001.

    Sangamo's press release announcing completion of the acquisition is included herein as Exhibit 99.1.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(a)
FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
(b)
PRO FORMA FINANCIAL INFORMATION.
(c)
EXHIBITS:

EXHIBIT NUMBER
   DESCRIPTION
2.1   Agreement for the sale and purchase of all the issued share capital of Gendaq Limited between Sangamo BioSciences, Inc. and Certain Shareholders of Gendaq Limited, dated June 28, 2001.
99.1   Press release of Sangamo BioSciences, Inc. dated July 5, 2001.


SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    SANGAMO BIOSCIENCES, INC.

Dated: July 17, 2001
 
By:
 
/s/ EDWARD O. LANPHIER II   
Edward O. Lanphier II
 President, Chief Executive Officer

 
 
 
 
/s/ SHAWN K. JOHNSON   
Shawn K. Johnson
 Senior Director of Finance
Principal Accounting Officer


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Exhibit 2.1

DATED JUNE 28, 2001

THE SELLERS NAMED IN SCHEDULE 1A

and

SANGAMO BIOSCIENCES INC.

AGREEMENT

for the sale and purchase of
all the issued share capital
of Gendaq Limited

Brobeck Hale and Dorr

Alder Castle
10 Noble Street
London EC2V 7QJ
Tel: +44 (0)20 7645 2400
Fax: +44 (0)20 7645 2424


CONTENTS

CLAUSE
    
   PAGE
1.   Interpretation   2

2.
 
Sale and purchase of the Shares
 
5

3.
 
Consideration
 
6

4.
 
sangamo Shares
 
8

5.
 
Warranties
 
10

6.
 
Covenants up to Completion
 
13

7.
 
RESCISSION
 
15

8.
 
Tax Deed
 
15

9.
 
covenants
 
15

10.
 
Completion
 
16

11.
 
Loan accounts
 
17

12.
 
Guarantees
 
18

13.
 
Notices
 
18

14.
 
Resolutions and waivers
 
18

15.
 
General
 
19

16.
 
Costs
 
20

17.
 
Whole agreement
 
20

18.
 
THIRD PARTY RIGHTS
 
20

19.
 
Governing law
 
20


SCHEDULE

 

 

1.
 
Sellers' Shareholdings and Entitlements
 
21

2.
 
Particulars of the Company
 
1

3.
 
Properties
 
2

4.
 
Warranties
 
3

5.
 
Purchasers Warranties
 
31

6.
 
Sangamo BioSciences, Inc. Declaration of Registration Rights
 
33

i

THIS AGREEMENT is made as a deed on June 28, 2001 BETWEEN:

(1)
THE PERSONS whose names and addresses are set out in column 1 of Schedule 1A (each a "Seller" and together the "Sellers"); and

(2)
SANGAMO BIOSCIENCES INC. whose office is at 501 Canal Boulevard Suite A100, Richmond, CA 94804 USA (the "Purchaser").

WHEREAS:

(A)
Gendaq Limited is a private company limited by shares short particulars of which are set out in Schedule 2 having an authorised capital of £22,500 divided into 400,000 'A' ordinary shares of 1 pence each 1,250,000 'B' ordinary shares of 1 pence each and 600,000 ordinary shares of 1 pence each.

(B)
The Sellers (save for the Trustee, as defined below) are beneficially entitled to all the issued share capital of the Company in the proportions set out opposite their respective names in column 2 of Schedule 1A.

(C)
The Sellers wish to sell and, in reliance upon, inter alia, the representations, warranties and undertakings set out in this agreement, the Purchaser wishes to purchase all the issued share capital of the Company on the terms and subject to the conditions set out in this agreement.

IT IS AGREED as follows:

Interpretation

In this agreement:

2

3

4

In this agreement any reference, express or implied, to an enactment includes references to:

Where any statement is qualified by the expression "so far as the Warrantors are aware" or "to the best of the Warrantors' knowledge, information and belief" or any similar expression that statement shall be deemed to include an additional statement that it has been made after due and careful enquiry of Dr Timothy Brears, Dr Eugenios Choo, Professor Sir Aaron Klug, Neil Lattimer and the Company's professional advisers, including accountants, D Young & Co and the Sellers' Solicitors and in addition, the Medical Research Technology Council where such expression is used in section A.12 of Schedule 4.

A person shall be deemed to be connected with another if that person is connected with another within the meaning of section 839 of the Taxes Act 1988.

Words denoting persons shall include bodies corporate and unincorporated associations of persons.

(6)
Reference to writing includes any method of reproducing words on paper.

(7)
The rule known as the "ejusdem generis" rule shall not apply.

(8)
Subclauses (1) to (6) above apply unless the contrary intention appears.

(9)
The headings in this agreement do not affect its interpretation.

Sale and purchase of the Shares

At Completion, each of the Sellers shall sell the Current Outstanding Shares and the Further Outstanding Shares (to the extent subscribed for by the Sellers) together with all rights attaching to them (save for any right to receive the Second Tranche of Consideration (as defined below)) and the Purchaser shall purchase such Shares accordingly.

Each of the Sellers severally represents and covenants with the Purchaser as follows:

5

The Shares shall be sold free from all liens, charges, equities and encumbrances and other rights exercisable by third parties and disposition of such at Completion shall be made by the Sellers on the terms that the same covenants shall be deemed to be given by the Sellers on Completion in relation to the Shares as are implied under Part I of the LPMPA where a disposition is expressed to be made with full title guarantee.

Consideration

The total consideration to be paid by the Purchaser pursuant to this agreement shall be satisfied by the Purchaser by the issue to the Sellers of Sangamo Shares on (subject to clauses 3(3), 3(4), 3(5), 3(6) and 3(7)) a ratio of:

1.13969 Sangamo Shares for each Share.

The Purchaser shall issue the Consideration Shares to the Sellers on the following basis:

No fraction of a Sangamo Share will be issued at Completion or pursuant to sub-clause (2)(b) above, but in lieu thereof, each holder of Shares who would otherwise be entitled to a fraction of a Sangamo Share (after aggregating all fractional shares of Sangamo Shares to be received by such holder) shall be entitled to receive from the Purchaser an amount of cash (rounded up to the nearest whole cent) equal to the product of (a) such fraction, multiplied by (b) the Trailing Five Day Price.

If the Purchaser consolidates, sub-divides or reorganises its share capital, declares any distribution or makes any issue by way of capitalisation or rights to holders of its common stock during or by reference to any period after the date of this agreement then where such event occurs:

6

In the event that the total number of issued Equity Securities (including any Further Outstanding Shares which are not subscribed for by the Sellers by the Completion Date) on the Completion Date exceeds or is less than the aggregate of:

Subject to clause 3(4), the Purchaser shall not be required to issue to the Sellers at Completion or provide Replacement Options over more than 2,250,008 Sangamo Shares (in aggregate) pursuant to this agreement.

In the event that prior to the Warranty Date the Purchaser shall have notified the Sellers of any claim or loss incurred by the Purchaser as a result of any breach of the Warranties or the Tax Deed (each a "Claim") which notification is accompanied by an estimate of the amount of the Claim and the details specified in clause 6(3) or the Tax Deed (as appropriate), then the following provisions shall apply:

7

(8)
The Consideration Shares issued pursuant to this clause 3 and such other Sangamo Shares required to be reserved for issue in connection with this agreement shall have been approved for quotation on the Nasdaq National Market System within 45 days after the Completion Date subject only to official notice of issue.

(9)
The Purchaser agrees to maintain the inclusion of the Sangamo Shares on the Nasdaq National Market until Completion.

(10)
The Purchaser shall take such steps as may be reasonably necessary to comply with the securities and blue sky laws of all jurisdictions which are applicable in connection with the issue of the Consideration Shares pursuant to this clause 3; provided, however, that the Purchaser shall not be required to qualify to do business or execute a general consent to service of process in any jurisdiction. The Sellers shall co-operate with the Purchaser, and provide information to the Purchaser, in connection with filings made by the Purchaser under applicable blue sky laws.

(11)
As soon as reasonably practicable following Completion, and in no event later than forty five (45) days following Completion, the Purchaser agrees to file with the United States Securities and Exchange Commission (the "SEC") a registration statement on Form S-8 registering the number of Sangamo Shares issuable upon the exercise of all Replacement Options, subject always to clause 3(6).

Sangamo Shares and private placement

The Consideration Shares issued at Completion, and those issued on the Warranty Date or otherwise in accordance with clause 3(7), will rank pari passu in all respects with the Sangamo Shares then in issue.

Each Seller on his own account only hereby confirms and undertakes that:

8

Each Seller on his own account only hereby agrees, covenants and undertakes that without the written consent of the Purchaser it shall not, directly or indirectly:

The Trustee shall procure that any new, additional or substituted trustee(s) of the Trust appointed after the date of this agreement shall undertake (in a form satisfactory to the Purchaser) to be bound by the restrictions in subclause (3) above relating to the Consideration Shares or other securities referred to in that subclause.

On the date of this agreement, the Purchaser will enter a declaration of registration rights in the terms set out in Schedule 6.

(6)
Notwithstanding the provisions of this clause 4:
(a)
3i Group plc may transfer Consideration Shares held by them to any member of the 3i Group, and ABN Amro Ventures BV may transfer Consideration Shares held by them to any member of the ABN Amro Ventures BV Group, without restriction provided that 3i Group plc or ABN Amro Ventures BV (as appropriate) procures that such transferee or assignee agrees to be bound by the terms of this agreement and in particular clause 4(3). For these purposes, a member of the 3i Group means 3i Group plc, any subsidiary of 3i Group plc and any company of which 3i Group plc is a subsidiary; and ABN Amro Group means ABN Amro Ventures BV and any entity which is a subsidiary of or which is owned (as to ninety five per cent or over) by ABN Amro Ventures BV;

(b)
the restrictions on the sale of Consideration Shares shall not apply to any fund management activities carried out in the ordinary course of business by any 3i asset management division or entity on behalf of:
(i)
the 3i Group Pension Fund;

(ii)
the following quoted investment trusts:
(A)
3i UK Select plc;

9

Warranties

The Warrantors warrant to the Purchaser that except as fairly disclosed to the Purchaser in the Disclosure Letter, each of the statements set out in Schedule 4 is true and accurate. For the avoidance of doubt this clause shall not be affected by clause 5(8).

Each of the Warranties set out in the several paragraphs of Schedule 4 is separate and independent and except as expressly provided to the contrary in this agreement is not limited:

Each Seller on his own account agrees with the Purchaser (as trustee for the Company and its employees) to waive any rights or claims which he may have in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by any Company or its employees in connection with the giving of the Warranties and the preparation of the Disclosure Letter.

In the absence of fraud, dishonesty or wilful concealment on the part of the Warrantors, in respect of any Claim:


10

Any payment made in respect of a breach of the Warranties or a liability under the Tax Deed shall be deemed to be a reduction in the Consideration.

(6)
In the absence of fraud, dishonesty or wilful concealment on the part of the Warrantors the following further limitations shall apply in respect of claims made by the Purchaser under the Warranties:
(a)
no liability shall be incurred under the Warranties unless the amount of all claims exceeds US$200,000;

(b)
all liability under the Warranties shall cease unless in respect of any such claim legal proceedings in respect thereof are issued and served on any one of the Warrantors within six months of written notice of the claim first being given in accordance with clause 5(4) above;

(c)
no claim under the Warranties may be made and the Warrantors shall not be liable under, or in respect of, the Warranties to the extent that the claim arises or is increased as a result of all or any of:
(iii)
an increase in rates of Taxation announced after Completion;

(iv)
any legislation or governmental regulation or any administrative or judicial decision neither published nor in force at the date hereof; and/or

(v)
the withdrawal or alteration after the date hereof other than pursuant to an announcement made before the date hereof of any extra statutory concession made by the Inland Revenue (or any other fiscal authority) and presently in operation;

11

(7)
The Purchaser confirms that the Second Tranche of Consideration will be reduced pursuant to clause 3(7) before any other payment is required from any Warrantor under the Warranties or the Tax Deed.

(8)
Subject to any other limitation contained in this agreement but without prejudice to any other remedy available to the Purchaser or its ability to claim damages on any basis which is available to it by reason of any of the Warranties being breached, each Warrantor undertakes with the Purchaser (for itself and as trustee for each Company) that he shall, at the direction of the Purchaser, pay to the Purchaser, the Company or (in the case of liability to another person which has not been discharged) the person to whom the liability has been incurred an amount equal to any deficiency or liability of the Company concerned which arises from any of the Warranties being breached and which would not have existed or arisen if the Warranty in question had not been breached plus any reasonable costs of recovery incurred by the Purchaser or the Company.

(9)
Clauses 4.1.1, 4.1.2, 4.1.6, 4.1.7, 4.1.8, 4.1.9 and 4.1.10 of the Tax Deed will apply to limit the liability of the Warrantors under the Warranties contained in part D (Taxation) of Schedule 4.

(10)
Nothing in this agreement will limit the Purchaser's common law duty to mitigate its loss under the Warranties.

(11)
The Purchaser warrants to the Sellers in the terms set out in Schedule 5.

(12)
In the event that the Company or the Purchaser has a right to make recovery or claim an indemnity under a policy of insurance in respect of any matter giving rise to a claim under the Warranties the Purchaser shall, or shall procure that the Company shall, make a claim under such policy unless either the Purchaser or the Company is advised by its professional advisers that any such claim has limited prospects of success or the cost of recovery under such policy would be out of proportion to the amount which could potentially be recovered.

12

Covenants up to Completion

The Sellers (other than 3i Group plc) shall procure that without the prior written consent of the Purchaser:



 
 
(i)
 
dispose of or grant any option or right of pre-emption in respect of any part of its assets except in the ordinary course of business consistent with past practice; or

 
 
(ii)
 
borrow any money or make any payments out of or drawings on its bank account(s) (except routine payments); or

 
 
(iii)
 
declare, make or pay any dividend or other distribution or return of capital; or

 
 
(iv)
 
grant, issue or redeem any mortgage, charge, debenture or other security or give any guarantee or indemnity; or

 
 
(v)
 
make any change in the terms and conditions of employment of any of its directors or employees or employ or terminate (except for good cause) the employment of any person save as provided for herein; or

 
 
(vi)
 
amend its memorandum or articles of association;

 
 
(vii)
 
undertake any material commitment or enter into any other material contract or acquire or dispose of any material assets, liabilities or businesses, otherwise than in the ordinary course of business consistent with past practice;

 
 
(viii)
 
transfer or license any material intellectual property to any person except non-exclusive licenses in connection with the sale or license of the Company's products in the ordinary course of business consistent with past practice;

 
 
(ix)
 
register any transfer of shares (other than pursuant to this agreement) in its statutory register of members;

 
 
(x)
 
save as permitted by paragraph (viii) above, enter into any agreement with any collaborator, customer, strategic partner or the like; or

 
 
(xi)
 
enter into any lease or acquisition of real or personal property where the total payments exceed £10,000 or make any payments to contractors or suppliers which the Company is not legally obligated to make on the date of this agreement or hire any new employees save for the two individuals who have been made offers of employment by the Company prior to the date of this agreement.

 
 
(xii)
 
make, or announce to any person any proposal to make, any change or addition to any retirement/death/disability benefit (as defined in paragraph F.1 of Schedule 4) of or in respect of any of its directors or employees or former directors or former employees (or any dependant of any such person) or to the Scheme (as defined in that paragraph) (other than any change required by law and any proposed change which is mentioned in the Disclosure Letter) or grant or create any additional retirement/ death/disability benefit (as so defined) or, without limiting the foregoing, take any action or allow any action to be taken in relation to the Scheme other than in the ordinary course of administering the Scheme or omit to take any action necessary or prudent for the ordinary proper operation of the Scheme; or

13


 
 
(xiii)
 
fail to take all commercially reasonable steps to preserve and protect its assets and without prejudice to the generality of the foregoing (a) relax its standards in relation to the protection of confidential information (b) abandon any patent application currently under its control or active in any part of the world (c) knowingly breach the terms of any licence agreement which the Company is a party to or allow any such agreement to lapse (d) fail to pursue the acquisition of any additional Intellectual Property Rights which could be important to the Company in its ordinary course of business to the same degree as they would have pursued it prior to the date hereof (except where precluded elsewhere in the agreement);

 
 
(xiv)
 
knowingly permit any of its insurances to lapse or do any thing which would make any policy of insurance void or voidable; or

 
 
(xv)
 
create, issue, purchase or redeem any class of share or loan capital or grant any rights over or option or warrants to acquire any class of share or loan capital save in respect of the allotment or issue of Further Outstanding Shares to the Sellers in such amounts as are set out in column 3 of Schedule 1(a); or

 
 
(xvi)
 
agree, conditionally or otherwise, to do any of the foregoing; or

 
 
(xvii)
 
in any other way depart from the ordinary course of its day-to-day trading;

Until Completion the Sellers (other than 3i Group plc) shall procure that the Purchaser, its agents and representatives are given reasonable access to the Property and to the books and records of the Company and the Sellers (other than 3i Group plc) shall provide such information regarding the businesses and affairs of the Company as the Purchaser may require.

Each party shall notify the others as soon as practicable in writing of any matter or thing which arises or becomes known to any of them which constitutes (or would after the lapse of time constitute) a breach of any of the Warranties or the covenants or other provisions set out in this agreement. In the case of the Purchaser, such notification obligation shall consist of providing such details of the breach as are then available to it and a genuine estimate of the amount of the claim based on the details then available to it, provided that failure to notify or any delay in notifying on the part of the Purchaser will not prevent it from bringing a claim provided further that if, as a result of such failure or delay, the liability of the Warranties shall be increased, the Warrantors shall not be liable for such increase.

The Purchaser hereby covenants to each of the Sellers that in the period from the date of this agreement until Completion, it shall not without each of the Sellers' prior consent (such consent not to be unreasonably withheld or delayed):

14

RESCISSION

(1)
The parties acknowledge that between the date of this agreement and Completion confidential information will be provided by the Sellers to the Purchaser and it is agreed that such is the sensitivity of this information that damages would not be an adequate remedy. In the event that any party to this agreement does not comply with its obligations in clause 10 on Completion, the parties shall be entitled to seek specific performance or other equitable relief without proof of special loss.

(2)
In the event that the Sellers or the Purchaser are unable to comply with any of their obligations in clause 10 (other than sub-clause (2)(a)(vii)) on the date set for Completion, then, subject to the Purchasers rights in 7(3), Completion shall be adjourned to such date as may be agreed between the Sellers and the Purchaser or, in the absence of agreement, to the fifth business day following the date set for Completion. Only in the event that either a Seller or the Purchaser fails to comply with their obligations in clause 10 (other than sub-clause (2)(a)(vii)) on such adjourned completion date shall the party who has complied with all of their obligations under clause 10 (other than sub clause (2)(a)(vii)) have the right to rescind this agreement. A party entitled to rescind this agreement shall also be entitled to recover all of their costs in connection with this agreement from the defaulting party. The remedy of rescission shall not be available to the Purchaser after Completion has occurred.

(3)
Without prejudice to any other rights or remedies available to the Purchaser, if any of the Sellers shall fail to comply with their obligations under clause 10, the Purchaser shall be entitled at its option to elect to complete the purchase of the Shares of those of the Sellers who have complied with their obligations under clause 10. If it does so, it shall not be entitled to rescind the agreement.

Tax Deed

    The Warrantors shall on Completion enter into the Tax Deed in favour of the Purchaser.

covenants

Each of the Sellers (other than 3i Group plc in respect of clause 9(1)(e)) irrevocably undertakes and covenants (to the extent relevant to it) that immediately following the execution of this agreement:

15

Timothy Brears irrevocably undertakes that, in relation to his Company Share Options, he will accept the Purchaser's offer of Replacement Options provided that such offer is made within 20 days of Completion and he will not, within such 20 day period, exercise any of his Company Share Options or any part thereof.

The Trustee irrevocably undertakes covenants and agrees that;

(4)
The Purchaser undertakes and covenants that following Completion it shall send the Option Letters to the Employee Optionholders.

Completion

Completion shall take place at the offices of the Purchaser's Solicitors on 3 July 2001.

At Completion the Sellers (other than 3i Group plc) shall procure:

16



At Completion, 3i Group plc shall deliver to the Purchaser:

At Completion, the Purchaser shall:

Loan accounts

The Sellers (other than 3i Group plc) shall procure that on Completion all indebtedness due from any Seller or any person connected with any Seller to any Company is satisfied in full without payment of interest.

17

Guarantees

The Sellers (other than 3i Group plc) shall use reasonable endeavours to procure that on Completion the Company is released from all guarantees and indemnities given by it other than a guarantee or indemnity in respect only of the liabilities of the Company.

The Purchaser shall use reasonable endeavours to procure that as from Completion each Seller is released from all guarantees and indemnities given by him in respect of obligations of the Company and of which full particulars are contained in the Disclosure Letter and pending his release the Purchaser shall indemnify him against all liabilities under those guarantees and indemnities.

Notices

Any notice or other document to be served under this agreement shall be delivered or sent by first class recorded delivery post or facsimile process to the party to be served at his address appearing in this agreement or at such other address as he may have notified to the other parties in accordance with this clause.

Any notice or document shall be deemed to have been served:

In proving service of a notice or document it shall be sufficient to prove that delivery was made or that the envelope containing the notice or document was properly addressed and posted as a prepaid first class recorded delivery letter or that the facsimile message was properly addressed and despatched as the case may be.

Resolutions and waivers

In relation to each Company the Sellers (other than 3i Group plc) shall procure the convening of all meetings, the giving of all waivers and consents and the passing of all resolutions as are necessary under the Companies Act 1985, its articles of association or any agreement or obligation affecting it to give effect to this agreement.

Each Seller waives (and shall procure the waiver by his nominee(s) of) all rights of pre-emption which he (or such nominee(s)) may have (whether under the Company's articles of association or otherwise) in respect of the transfer to the Purchaser or its nominee(s) of the Shares or any of them.

Each Seller either waives articles 3, 4, 5 and 10 of the articles of association of the Company or confirms that such articles shall not apply to the transactions effected by this agreement.

For so long after Completion as he remains the registered holder of any of the Shares each Seller shall hold them and any distributions, property and rights deriving from them in trust for the Purchaser and shall deal with the Shares and any distributions, property and rights deriving from them as the Purchaser directs; in particular, each Seller shall exercise all voting rights as the Purchaser directs or shall execute an instrument of proxy or other document which enables the Purchaser or its representative to attend and vote at any meeting of the Company.

Each of the Sellers hereby agrees with to the Purchaser (on behalf of itself and as agent for the Company) that in the event that a Seller fails to comply with its obligations to subscribe for Further Outstanding Shares in accordance with this agreement such Seller irrevocably waives the right to

18

subscribe for, or have issued to it, such Further Outstanding Shares. The Sellers hereby agree and confirm that the Company may enforce the agreement in this clause in its own name on its own behalf.

General

Each of the obligations and undertakings set out in this agreement which is not fully performed at Completion and each of the Warranties will continue in force after Completion.

    Unless otherwise expressly stated in this agreement all cash payments to be made under this agreement shall be made in pounds sterling to the party to be paid as follows:

(nn)   to the Sellers immediately available funds to the account of the Sellers' Solicitors at:

 
 
bank:
 
NatWest Bank plc, Cavendish Square Branch, PO Box 4NU, 1 Cavendish Square, London W1A 4NU
    sort code:   60-40-02
    account number:   24798649—Olswang Client Account
    swift code:   NWBKGB2L

 
 
or such other account as the Sellers may specify; and

(oo)
 
to the Purchaser in immediately available funds to the account of the Purchaser's Solicitors at:

 
 
bank:
 
Barclays Bank, Broadgate Business Centre, 155 Bishopsgate London EC2M 3XA
    sort code:   20-77-67
    account number:   63091888—Brobeck Hale and Dorr US$ Client Account
    swift code:   BARC GB 22

 
 
or such other account as the Purchaser may specify.

The receipt of the Sellers' Solicitors for any sum or document to be paid or delivered to a Seller will discharge the Purchaser's obligation to pay or deliver it to that Seller.

This agreement shall be binding on the personal representatives and successors in title of each of the Sellers and the Purchaser as the case may be. If the Shares are sold or transferred after Completion to any wholly owned subsidiary of the Purchaser, the benefit of each of the obligations, Warranties and undertakings undertaken or given by any of the Sellers may be assigned to the purchaser or transferee of the Shares who may enforce them as if he had been named in this agreement as the Purchaser.

Subject to subclause (4) above none of the rights or obligations under this agreement may be assigned or transferred without the prior written consent of all the parties.

Where any obligation, representation, warranty or undertaking in this agreement is expressed to be made, undertaken or given by two or more of the Warrantors they shall be jointly and severally responsible in respect of it.

The Purchaser may release or compromise in whole or in part the liability of any of the Sellers under this agreement or grant any time or other indulgence without affecting the liability of any other of the Sellers.

This agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement and any party may enter into this agreement by executing a counterpart.

19

Costs

Each party shall pay the costs and expenses incurred by him in connection with the entering into and Completion of this agreement.

Whole agreement

This agreement and the documents referred to in it contain the whole agreement between the parties relating to the transactions contemplated by this agreement supersede all previous agreements between the parties relating to these transactions including the Option Agreement.

The Sellers acknowledge that the Purchaser has not made any representations or warranties other than contained in this agreement which have caused the Sellers to agree to accept the Sangamo Shares or on which the Sellers have placed any reliance in agreeing to accept the Sangamo Shares.

Each of the parties acknowledges that in agreeing to enter into this agreement he has not relied on any representation, warranty, collateral contract or other assurance (except those set out in this agreement and the documents referred to in it) made by or on behalf of any other party before the signature of this agreement. Each of the parties waives all rights and remedies which, but for this subclause, might otherwise be available to him in respect of any such representation, warranty, collateral contract or other assurance, provided that nothing in this subclause shall limit or exclude any liability for fraud.

Each of the Sellers hereby agree with each other and with the Purchaser (on behalf of itself and as agent for the Company so that the Company may enforce this clause in its own name) that the Investment Agreement shall hereby terminate on Completion.

THIRD PARTY RIGHTS

Save as provided in this agreement, a person who is not a party to this agreement, but who shall be deemed to be third party beneficiary, shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of this Agreement. This clause shall not affect any right or remedy of the third party which exists or is available apart from that Act.

Governing law

This agreement is governed by and shall be construed in accordance with English law.

Each Seller submits to the jurisdiction of the English courts for all purposes relating to this agreement and irrevocably appoints the Sellers' Solicitors as his agent for service of process.

The Purchaser submits to the jurisdiction of the English courts for all purposes relating to this agreement and irrevocably appoints BHD Service Agents Limited as its agent to receive on its behalf service of any proceedings arising out of or in connection with this agreement.

AS WITNESS the hands of the Sellers (or their duly authorised officers) and a duly authorised officer of the Purchaser on the date which appears first on page 1.

20

SCHEDULE 1A

SELLERS' SHAREHOLDINGS AND ENTITLEMENTS

COLUMN 1
   COLUMN 2
   COLUMN 3
   COLUMN 4
   COLUMN 5
(A)
NAME AND ADDRESS OF SELLERS
   (B)
NO. OF CURRENT OUTSTANDING ORDINARY SHARES
   (C)
NO. OF CURRENT OUTSTANDING A ORDINARY SHARES
   (D)
NO. OF CURRENT OUTSTANDING B ORDINARY SHARES
   (E)
NO. OF FURTHER OUTSTANDING B ORDINARY SHARES
   (F)
NO. OF SANGAMO SHARES TO BE ISSUED AT COMPLETION
   (G)
NO OF SANGMAGO SHARES IN SECOND TRANCHE OF CONSIDERATION (PRIOR TO REDUCTIONS PERMITTED BY THIS AGREEMENT)
RBC Trustees (Guernsey)
Limited (as trustees for the
Pizzicato Trust)
PO Box 48
Canada Court
St. Peter Port
Guernsey GY1 3BQ
Channel Islands		   100,000               102,572   11,397
Medical Research Council
20 Park Crescent
London W1N 4AL		   145,000               148,730   16,525
Dr. Timothy Brears
37 Linzee Road
London N8 7RG		   100,000               102,572   11,397
Professor Sir Aaron Klug
70 Cavendish Avenue
Cambridge CB1 7UT		   30,000               30,771   3,419
UK Medical Ventures
Fund No. 1 L.P.
6 Henrietta Street
London WC2E 8LA		       250,000   91,361   178,036   532,756   59,195
ABN Amro Ventures B.V.
Foppingadreef 22 AA 3240)
PO Box 283
1000 EA Amsterdam
The Netherlands		           146,179   284,856   442,122   49,124
Dusty Miller L.L.C.
c/o Red Abbey L.L.C
2330 West Jappa Road
Suite 330
Lutherville
Maryland
21093 USA		           18,272   35,608   55,266   6,140
3i Group plc
91 Waterloo Road
London SE1 8XP		           109,632   213,644   331,591   36,843
Avlar BioVentures Fund 1 LP
(previously Quantum
Healthcare Fund No. 1 L.P.)
St John's Innovation Centre
Cowley Road
Cambridge
CB4 OWS		           36,544   71,216   110,531   12,281
Neomed Innovation ASA
Parveien 55
N-0256 Oslo
Norway		           18,272   35,608   55,266   6,140
TOTAL   375,000   250,000   420,260   818,968        

21


SCHEDULE 1B

EMPLOYEE OPTIONS

(1)
NAME AND ADDRESS OF
EMPLOYEE OPTION HOLDERS
   (2)
COMPANY STOCK OPTIONS
(CLASS OF SHARES, DATE OF GRANT,
VESTING SCHEDULE AND EXERCISE PRICE)
Dr. Timothy Brears
37 Linzee Road
London N8 7RG		   15,000 Ordinary Shares
(date of grant 11 May 2001; vesting one half upon change of control of the Company, the remainder on the first anniversary of the date of change of control of the Company; exercise price £5.00)

Dr. Eugenios Choo
10 Sydney Street
London
SW3 6PP
 
15,000 Ordinary Shares
(date of grant 11 May 2001; vesting: one half upon change of control of the Company, the remainder on the first anniversary of the date of change of control of the Company; exercise price £5.00)

Chris Ullman
7 Gateways Mews
Shacklewell Lane
London
E8 2DF
 
4,000 Ordinary Shares
(date of grant; 1 April 1998; full vesting date; 31 March 2002; exercise price £2.32)

Lindsey Reynolds
14 Ansell Court
Stevenage
Herts
SG1 4RL
 
4,000 Ordinary Shares
(date of grant: 1 July 1998; full vesting date: 30 June 2002; exercise price: £2.32)

Mark Isalan
24 Shottfield Avenue
East Sheen
London
SW14 8EA
 
4,000 Ordinary Shares
(date of grant: 1 July 1999; full vesting date: 30 June 2003; exercise price: £3.00)

Michael Moore
The Hideaway
Fagnall Lane
Winchmore Hill
Amersham
Bucks
HP7 OPG
 
4,000 Ordinary Shares
(date of grant: 1 October 1999; full vesting date: 30 September 2003; exercise price: £3.00)

Armin Sepp
43 Bullen Close
Cambridge
CB1 8YU
 
4,000 Ordinary Shares
(date of grant: 1 October 2000; full vesting date: 30 September 2004; exercise price: £3.70)

Christophe Demaison
30 Foulden Road
London
N16 7UR
 
4,000 Ordinary Shares
(date of grant: 1 January 2001; full vesting date: 31 December 2004; exercise price: £3.70)

22


Nicole England
6 Stirling Close
Uxbridge
Middlesex
UB8 2BA
 
4,000 Ordinary Shares
(date of grant: 1 January 2001; full vesting date: 31 December 2004; exercise price: £3.70)

John Girdlestone
16 Cedar Drive
East Finchley
London
N2 OPS
 
4,000 Ordinary Shares
(date of grant: 1 January 2001; full vesting date: 31 December 2004; exercise price: £3.70)

Lutz-Peter Berg
1B Pentlow Street
London
SW15 1LX
 
4,000 Ordinary Shares
(date of grant: 1 January 2001; full vesting date: 31 December 2004; exercise price: £3.70)

Neil Lattimer
6 North Close
Royston
Herts
SG8 5EZ
 
4,000 Ordinary Shares
(date of grant: 1 April 2001; full vesting date: 31 March 2005; exercise price: £3.70)

Tina Sepp
43 Bullen Close
Cambridge
CB1 8YU
 
4,000 Ordinary Shares
(date of grant: 1 April 2001; full vesting date: 31 March 2005; exercise price: £3.70)

Steven Colebrook
35 St. Mary's Walk
Everton
Sandy
Beds SG19 2JQ
 
4,000 Ordinary Shares
(date of grant: 1 April 2001; full vesting date: 31 March 2005; exercise price: £3.70)

Tim Farries
185 Daneglan Court
London Road
Stanmore
Middlesex
HA7 4PL
 
4,000 Ordinary Shares
(date of grant: 1 April 2001; full vesting date: 31 March 2005; exercise price: £3.70)

Professor Fotis Kafatos
European Molecular Biology
Laboratory
Postfach 10 22 09
D-69012 Heidelberg
Germany
 
1,000 Ordinary Shares
(fully vested as at 31 August 2000; exercise price: £1.00; 1,000 Ordinary Shares; date of grant: 1 September 2000; full vesting date: 31 August 2001; exercise price: £4.64)

23


Dr. Benjamin Miflin
Le Plan de Chevenoz
74500 Chevenoz
France
 
1,000 Ordinary Shares
(fully vested as at 31 August 2000; exercise price: £1.00; 1,000 Ordinary Shares; date of grant: 1 September 2000; full vesting date: 31 August 2001; exercise price: £4.64)

Professor Inder M. Verma
The Salk Institute for Biology
Studies
PO Box 85800
San Diego
CA 92186-5800
USA
 
10,000 Ordinary Shares
(date of grant: 1 January 2000; full vesting date: 31 December 2003; exercise price: £1.00)

Professor Nam-Hai Chua
Laboratory of Plant Molecular
Biology
Rockefeller University
1230 York Avenue
New York
New York 10021-6399
USA
 
10,000 Ordinary Shares
(date of grant: 1 January 2000; full vesting date: 31 December 2003; exercise price: £1.00)

Professor George Church
Harvard Medical School
200 Longwood Avenue
Boston
MA 02115
USA
 
4,000 Ordinary Shares
(date of grant: 1 May 2001; full vesting date: 30 April 2005; exercise price: £3.70)

TOTAL
 
110,000 Ordinary Shares

24


SCHEDULE 2

PARTICULARS OF THE COMPANY

Registered number:   3756817

Registered office:
 
90 Long Acre, London WC2E 9TT

Date and place of incorporation:
 
England and Wales, 21 April 1999

Registered Office:
 
90 Long Acre, London WC2E 9TT

Date/Place of Incorporation:
 
21 April 1999/England and Wales

Directors:
 
Dr. Timothy Brears
Dr. Alison Campbell
Eugenios Choo
Sir Aaron Klug
Frederick Phillips
Dr. Stephen Reeders

Secretary:
 
Eugenios Choo

VAT number:
 
739 8827 68

Accounting reference date:
 
31 December

Auditors:
 
Arthur Andersen
Betjeman House
104 Hills Road
Cambridge, Cambridgeshire CB2 1LH

1


SCHEDULE 3

PROPERTY

Occupation pursuant to a facilities agreement

Description:   Part of 1-3 Burtonhole Lane, London NW7 1AD

Date of and parties to
 
24 May 2001 between the Company and Medical Research Council
Facilities agreement:   Technology ("MRCT")

Legal owner:
 
Medical Research Council

Term:
 
Agreement terminated by 3 months written notice from the Company

Present facilities charge:
 
Laboratory facilities total of £50,120 p.a. Office rental and fixed overheads total of £12,994 pa. Effective from 1 April 2000 until 31 March 2002. Further charges for laboratory support services and MRCT accommodation apply.

Present use:
 
Laboratory space and facilities for up to 16 Company Scientists, use of office facilities and office related services, access to Scientific facilities of MRCT

2


SCHEDULE 4

WARRANTIES

    A.   General
    B.   Accounts and Financial
    C.   Commercial
    D.   Taxation
    E.   Properties
    F.   Employees


A. GENERAL

A.1 Accuracy of recitals, schedules and responses to enquiries

The particulars relating to the Company and the Property set out in the recitals and the schedules to this agreement and all replies to enquiries in relation to this agreement are true and accurate in all material respects.

A.2 Memorandum and articles of association, statutory books and returns

(1)
The copy of the memorandum and articles of association of the Company which has been given to the Purchaser's Solicitors is accurate and complete in all respects and has annexed or incorporated copies of all resolutions or agreements required by the Companies Act 1985 or other applicable laws to be so annexed or incorporated.

(2)
The register of members and other statutory books and registers of the Company have been properly kept in all material respects and no notice or allegation that any of them is incorrect or should be rectified has been received.

(3)
All returns and particulars, resolutions and other documents which the Company is required by law to file with or deliver to the registrar of companies or his equivalent have been correctly made up and duly filed or delivered.

A.3 Warrantors' other interests

None of the Warrantors nor any person connected with any Warrantor has any interest, directly or indirectly, in any business which is or is likely to be competitive with the business of the Company.

A.4 Ownership of the Shares

(1)
The Current Outstanding Shares which are set out in column 2 of Schedule 1A constitute the whole of the issued and allotted share capital of the Company.

(2)
Save in respect of the Further Outstanding Shares which are set out in column 3 of Schedule 1A and the Company Share Options totalling 110,000 set out in Schedule 1B, no person is entitled or has claimed to be entitled to require the Company to issue any share or loan capital either now or at any future date whether contingently or not.

(3)
There is no option, right of pre-emption, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the Shares nor is there any commitment to give or create any of the foregoing, and no person has claimed to be entitled to any of the foregoing.

3

A.5 Subsidiaries, associations and branches

The Company:

A.6 Ownership of assets

(1)
The Company owned at the Accounts Date all the assets included in the Accounts and particulars of all fixed assets acquired or agreed to be acquired by the Company since the Accounts Date are set out in the Disclosure Letter.

(2)
Except for current assets offered for sale or sold in the ordinary course of trading, the Company has not since the Accounts Date disposed of any of the assets included in the Accounts or any assets acquired or agreed to be acquired since the Accounts Date.

(3)
Except as set out in the Accounts (or the accompanying notes or reports) none of the property, assets, undertaking, goodwill or uncalled capital of the Company (other than the Properties) is subject to any encumbrance (including, without limitation, any debenture, mortgage, charge, lien, deposit by way of security, bill of sale, lease, hire-purchase, credit-sale or other agreement for payment on deferred terms, option or right of pre-emption) or any agreement or commitment to give or create any of the foregoing.

(4)
The tangible assets of the Company comprise all the tangible assets necessary for the continuation of its business as carried on at the date of this agreement.

A.7 Vulnerable antecedent transactions

(1)
As far as the Warrantors are aware, the Company has not at any relevant time been party to a transaction pursuant to or as a result of which an asset owned, purportedly owned or otherwise held by the Company is liable to be transferred or re-transferred to another person or which gives or may give rise to a right of compensation or other payment in favour of another person under the law of any relevant jurisdiction or country. The following subparagraphs are without prejudice to the generality of this subparagraph.

(2)
In paragraphs (3) to (5) below:

(a)
"transaction at an undervalue", in relation to a company, has the meaning assigned by s.238(4) of the Insolvency Act and, in relation to an individual, has the meaning assigned by s.339(3) of the Insolvency Act; and

(b)
"insolvent", in relation to an individual, has the meaning assigned by s.341(3) of the Insolvency Act; and

(c)
"unable to pay its debts" means the circumstance in which, by virtue of the definitions contained in s.123 of the Insolvency Act, a company is deemed unable to pay its debts.

4

(3)
No transaction at an undervalue (a) relating to any of the Shares, or (b) to which the Company has been a party, has been effected during the following periods, ending on the date of this agreement:

(a)
in the case of a transaction to which an individual is a party, within a period of five years;

(b)
in the case of a transaction to which no party is an individual, within a period of two years.

(4)
In relation to any transaction at an undervalue involving an individual and entered into within two years ending on the date of this agreement, that transaction has been disclosed and that individual was not then insolvent and did not become insolvent in consequence of the transaction.

(5)
In relation to any transaction at an undervalue not involving an individual, that transaction has been disclosed and the Company was not at the date of the transaction unable to pay its debts and did not become so unable in consequence of the transaction.

(6)
In paragraphs (7) to (8) below:

(a)
"preference", in relation to a company, has the meaning assigned by s.239 of the Insolvency Act and, in relation to an individual, has the meaning assigned by s.340 of that Act;

(b)
"insolvent", in relation to an individual, has the meaning assigned by s.341(3) of the Insolvency Act;

(c)
"unable to pay its debts" has the same meaning as in subparagraph (2)(c) above;

(d)
"connected" with a company has the meaning assigned by s.249 of the Insolvency Act;

(e)
"associate" has the meaning assigned by s.435 of the Insolvency Act.

(7)
No preference has been given in respect of any of the Shares or to or by the Company during the following periods ending on the date of this agreement:

(a)
in the case of a preference between (in a case involving a company) connected persons or in the case of individuals who are associates within a period of two years; and

(b)
in the case of persons not so connected or not associates within a period of six months.

(8)
In relation to any preference in respect of any of the Shares or to which the Company has been a party, that preference has been disclosed and:

(a)
in the case of an individual the individual was not at the time the preference was given insolvent and did not become insolvent in consequence of the preference; and

(b)
as regards a company, the company was not unable to pay its debts at the time of the giving of the preference and did not become so unable as a result of the giving of the preference.

(9)
In subparagraphs (10) and (11) below "transaction at an undervalue" shall have the meaning assigned to it by s.423 of the Insolvency Act.

(10)
No transaction at an undervalue relating (a) to any of the Shares or shares in any of the Subsidiaries or (b) to which the Company has been a party has at any time been effected prior to the date of this agreement.

(11)
In relation to any transaction at an undervalue relating (a) to any of the Shares or (b) to which the Company has been a party, that transaction has been disclosed and the person entering into the transaction (the "donor") was not entering into it for the purpose of putting assets beyond the reach of a person who was making or might at some time make a claim against the donor or of otherwise prejudicing the interest of such a person in relation to the claim which he was making or might make.

5

(12)
In this paragraph A.4, "Company" means and includes any company or corporation or partnership capable of being made subject to an order for its compulsory liquidation by the English courts.

A.8 Compliance with statutes

Neither the Company, nor (so far as the Warrantors are aware) any of its officers, agents or employees (during the course of their duties), has done or omitted to do anything which is a contravention of any statute, order, regulation or the like giving rise to any fine, penalty, sanction or other liability (whether criminal or civil) on the part of the Company which would have a Material Adverse Effect on the Company.

A.9 Licences and consents and Restrictions on Business Activities

(1)
Other than in respect of Intellectual Property Rights, the Company has all licences (including statutory licences) and consents necessary to own and operate its assets and to carry on its business as it does at present and none of the Warrantors is aware of anything that might result in the revocation, suspension or modification of any of those licences or consents or that might prejudice their renewal.

(2)
The Company has obtained all export licenses and other approvals required for its exports of products, software and technologies. The Company is in material compliance with the terms of all applicable export licenses and other approvals, there are no pending or, to the Warrantors' knowledge, threatened claims against the Company with respect to such export licenses or other approvals, there are no actions, conditions or circumstances pertaining to the Company's export transactions that may give rise to any future claims.

(3)
There is no agreement, judgement, injunction, order or decree binding upon the Company, or any its assets or properties which has had or could reasonably be expected to have the effect of prohibiting or impairing any current or future business practice of the Company, any acquisition of property by the Company or the conduct of business by the Company as currently conducted or, as far as the Warrantors are aware, as currently proposed to be conducted by the Company.

(4)
No consent, approval, order or authorisation of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality is required by or with respect to the Company, in connection with the execution and delivery of this agreement or the consummation of the transactions contemplated hereby.

(5)
No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with this agreement based upon arrangements made by or on behalf of any Company.

A.10 Insider contracts

(1)
Save for the Investment Agreement, the Company is not a party to any contract or arrangement in which any of the Sellers or any person connected with any of the Sellers is interested, directly or indirectly, nor has there been any such contract or arrangement at any time during the six years up to the date of this agreement.

(2)
The Company is not a party to, nor have its profits or financial position during the five financial periods ended on the Accounts Date been affected by, any contract or arrangement which is not of an entirely arm's length nature.

(3)
The Company is not indebted to any director, officer, employee, consultant or agent of the Company (except for amounts due as normal salaries and bonuses and in reimbursement of

6

A.11 Litigation

There is no private or governmental action, suit, proceeding, claim, arbitration or, to the knowledge of the Warrantors, investigation pending before any agency, court or tribunal, foreign or domestic, or, to the knowledge of the Warrantors, threatened against the Company or the assets or properties or any of the officers or directors of the Company (in their capacities as such). There is no judgement, decree or order against the Company or any of their directors or officers (in their capacities as such), limiting the conduct of business by the Company or that could prevent, enjoin, or alter or delay any of the transactions contemplated by this agreement or have a Material Adverse Effect on the Company. The Disclosure Letter also lists all litigation (including patent infringements and arbitrations) by the Company which is pending against any other person or entity.

A.12 Environmental matters

(1)
In this paragraph:

(a)
"Environmental Law" means all statutes, common law, bylaws, regulations, directives, codes of practice, circulars, guidance notes and the like (whether in the United Kingdom or elsewhere) concerning the protection of human health or the environment or the conditions of the workplace or the generation, transportation, storage, treatment or disposal of a Dangerous Substance;

(b)
"Environmental Licence" means any permit, licence, authorisation, consent or other approval required under or in relation to any Environmental Law;

(c)
"Dangerous Substance" means any chemical, material, vapour, liquid, gas or substance defined or regulated as toxic or hazardous or as a pollutant or contaminant or waste under any applicable Environmental Law; and

(d)
"Relevant Property" means any premises now or previously owned, leased, occupied or controlled by the Company.

(2)
The Company has obtained all requisite Environmental Licences (all of which are valid and subsisting) necessary for the continuation of the business of the Company and has at all times complied in all material respects with all applicable Environmental Law and with the terms and conditions of all Environmental Licences. None of the operations or processes undertaken by the Company falls to be authorised under Part I of the Environmental Protection Act 1990.

(3)
No Environmental Licence is personal to any of the Sellers or the Company and no Environmental Licence may be revoked, modified or suspended as a result of the acquisition by the Purchaser of the Shares.

(4)
The Company has not received any notice or other communication that it is or may be in violation of any Environmental Law or Environmental Licence or that any further Environmental Licence may be required or that any Environmental Licence may be subject to modification, suspension or revocation and there are no circumstances likely to give rise to any such violation or modification, suspension or revocation.

(5)
The Company is not nor, so far as the Warrantors are aware as at the date hereof, may be responsible (wholly or in part) for any clean up or other corrective action in relation to any Relevant Property or is subject to any investigation or inquiry by any regulatory authority at any Relevant Property.

7

(6)
The Warrantors have disclosed full details of the assessment carried out by the Company pursuant to the Control of Substances Hazardous to Health Regulations 1988 and of any other environmental or health and safety assessment, audit, review or investigation conducted by or on behalf of the Company (including the costs of undertaking all remedial work) and the Company has carried out all recommendations contained in such assessments.

(7)
So far as the Warrantors are aware the Company has not used, disposed of, generated, stored, transported, dumped, released, deposited, buried or emitted any Dangerous Substance at, on, from or under any Relevant Property.

(8)
So far as the Warrantors are aware no other person has used, disposed of, generated, stored, transported, dumped, released, deposited, buried or emitted any Dangerous Substance at, on, from or under any Relevant Property.

(9)
The Company has not disposed of any Dangerous Substance in the past in such a way that its disposal would now constitute a breach of Environmental Law.

(10)
As far as the Warrantors are aware, no Relevant Property is included on or referred to in any register of contaminated land or any similar record or register nor are there any facts or circumstances of which the Warrantors are aware which are likely to lead to registration in the future.

(11)
So far as the Warrantors are aware there is no contamination of groundwater underneath any Relevant Property and there have been no discharges or spillages of any substance likely to lead to such contamination.

(12)
As far as the Warrantors are aware, no Relevant Property has ever been a waste disposal site and none of the Warrantors the Company or, as far as the Warrantors are aware, any third party has ever stored waste on or transported waste onto any Relevant Property.

(13)
There are no storage tanks, above or, as far as the Warrantors are aware, below ground, on any Relevant Property and so far as the Warrantors are aware there have been no such tanks on any Relevant Property in the past.

A.13 Insolvency

(1)
No receiver or administrative receiver has been appointed in respect of the Company or in respect of the whole or any part of the assets or undertaking of the Company.

(2)
No administration order has been made and no petition has been presented for such an order in respect of the Company.

(3)
No meeting has been convened at which a resolution shall be proposed, no resolution has been passed, no petition has been presented and no order has been made for the winding up of the Company.

(4)
The Company has not stopped or suspended payment of its debts, become unable to pay its debts or otherwise become insolvent in any relevant jurisdiction.

(5)
No unsatisfied judgement, order or award is outstanding against the Company and no written demand under s.123(1)(a) of the Insolvency Act has been made against the Company and no distress or execution has been levied on, or other process commenced against, any asset of the Company.

(6)
No voluntary arrangement has been proposed or implemented under s.1 of the Insolvency Act in respect of the Company nor any scheme of arrangement proposed or implemented under s.425 of the Companies Act 1985, nor any scheme for the benefit of creditors generally proposed or

8

(7)
As far as the Warrantors are aware, no circumstances have arisen which entitle any person to take any action, appoint any person, commence proceedings or obtain any order of the type mentioned in subparagraphs (1) to (6) above in any relevant jurisdiction.

A.14 Capacity and consequences of sale

(1)
Compliance with the terms of this agreement does not and will not:

(a)
conflict with or constitute a default under any provision of:

(a)
any agreement or instrument to which any Seller or the Company is a party; or

(b)
the Company's (or where relevant the Seller's) memoranda or articles of association (or equivalent documents); or

(c)
any lien, licence, franchise, lease, order, judgement, award, injunction, decree, ordinance or regulation or any other restriction of any kind or character by which any Seller or the Company is bound; or

9


B. ACCOUNTS AND FINANCIAL

B.1 Accuracy of Accounts

(1)
The Accounts:

(a)
have been prepared under the historic cost convention (as modified for the revaluation of land and buildings) and in accordance with generally accepted accounting principles and practices, the Companies Act 1985 and other applicable statutes and regulations;

(b)
correctly state the assets of the Company and give a true and fair view of the state of affairs of the Company as at 31 December 2000 and of the profit or loss of the Company for the period ended on 31 December 2000; and

(c)
are not affected by any unusual or non-recurring items.

(2)
The non statutory accounts of the Company set forth in the Disclosure Letter fairly state the assets of the Company give a true and fair view of the state of affairs of the Company as at Accounts Date and of the profit and loss of the Company for the period ended on Accounts Date.

B.2 Book debts

None of the Warrantors has any reason to believe that any debt owing to a Company at the date of this agreement (other than the debts included in the Accounts) will not in the ordinary course of collection realise its nominal amount plus any accrued interest.

B.3 Position since 31 December 2000

(1)
Except for the contracts described in the Disclosure Letter (collectively, the "Material Contracts"), the Company is not a party to or bound by any material contract, including:

(a)
any distributor, sales, advertising, agency or manufacturer's representative contract that is not terminable within thirty (30) days by the Company;

(b)
any continuing contract for the purchase of materials, supplies, equipment or services involving in the case of any such contract more than £10,000 over the life of the contract;

(c)
any contract that expires or may be renewed at the option of any person or entity other than the Company so as to expire more than one year after the date of this agreement;

(d)
any trust indenture, mortgage, promissory note, loan agreement or other contract for the borrowing of money, any currency exchange, commodities or other hedging arrangement or any leasing transaction of the type required to be capitalised in accordance with UK GAAP;

(e)
any contract for capital expenditures in excess of £5,000 in the aggregate;

(f)
any contract limiting the freedom of the Company to engage in any line of business or to compete or which requires the Company to maintain the confidentiality of any proprietary information of any third party or any other material confidentiality, secrecy or non-disclosure contract;

(g)
any contract pursuant to which the Company is a lessor of any machinery, equipment, motor vehicles, office furniture, fixtures or other personal property involving in the case of any such contract more than £5,000 over the remaining life of the contract;

(h)
any contract with any person or entity with whom the Company does not deal at arm's length; or

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(2)
The Company has performed in all material respects all of the obligations required to be performed by it at the date hereof and assuming due execution by the other parties to the contract is entitled to all material benefits under each, and is not, as far as the Warrantors are aware, alleged to be in default in any material respect in respect of any, Material Contract. Each of the Material Contracts is in full force and effect and has not been amended, and there exists no default or event of default or event, occurrence, condition or act, on the part of the Company which, with the giving of notice, the lapse of time or the happening of any other event or conditions, would become a default or event of default under any Material Contract except where such default could not reasonably be expected to have a Material Adverse Effect on the Company. True, correct and complete copies of all Material Contracts have been delivered to the Purchaser.

B.4 Government grants

All research grants and other grants, subsidies or financial assistance from any body which the Company has received or is a party to are listed and set out in the Disclosure Letter. No such assistance will become repayable by the Company as a result of Completion.

B.5 Bank accounts

The statement of the Company's bank accounts and of the credit or debit balances on them as at a date not more than seven days before the date of this agreement attached to the Disclosure Letter is correct and the Company has no other bank or deposit account (whether in credit or overdrawn) not included in the statement and since the date of that statement there has not been any payment out of any of the accounts except for routine payments and the balance on the accounts is not substantially different from the balances shown on the statement.

11


C. COMMERCIAL

C.1 Suppliers and customers

C.2 Material contracts

Except as set forth in the Disclosure Letter since 31 December 2000 the Company has conducted its business in the ordinary course consistent with past practice and there has not occurred:

C.3 Absence of Undisclosed Liabilities

The Company has no obligations or liabilities of any nature (matured or unmatured, fixed or contingent) other than:

12

C.4 Anti-competitive arrangements



C.5 Secret or confidential information or property

13


C.6 Intellectual Property Rights


14


C.7 Insurance

All policies of insurance currently held by the Company are set out in the Disclosure Letter. There is no material claim pending under any of such policies. All premiums due and payable under all such policies have been paid and the Company is otherwise in compliance with the terms of such policies.

C.8 Data and records

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C.9 Business names

    The Company does not carry on business under a name other than its own corporate name.

C.10 No powers of attorney

    The Company has not granted any power of attorney or similar authority which remains in force.


D. TAXATION

    For the purposes of this Part D (Taxation) of this Schedule 4 only, "Accounts Date" shall mean 31 December 2000.

D.1 General

All necessary information, notices, accounts, statements, reports, computations and returns which ought to have been made or given have been properly and duly submitted by the Company to the Inland Revenue, HM Customs & Excise and any other relevant taxation or excise authorities whether of the United Kingdom or elsewhere and all information, notices, computations and returns submitted to the Inland Revenue, HM Customs & Excise and such other authorities are true and accurate and are not the subject of any material dispute nor are likely to become the subject of any material dispute as far as the Warrantors are aware with such authorities.

All Taxation of any nature whatsoever whether of the United Kingdom or elsewhere for which the Company is liable or for which the Company is liable to account has been duly paid (insofar as such taxation ought to have been paid) and without prejudice to the generality of the foregoing the Company has made all such deductions and retentions as it was obliged or entitled to make and all such payments as should have been made.

The Company has not within the past seven years paid or become liable to pay, nor as far as the Warrantors are aware are there any circumstances by reason of which the Company is likely to become liable to pay, any penalty, fine, surcharge or interest whether charged by virtue of the provisions of the Taxes Management Act 1970, VATA 1994 or otherwise.

The Company has not within the past twelve months suffered any investigation audit or visit by the Inland Revenue, HM Customs & Excise, Department of Social Security, or any other Taxation or excise authority, and neither the Sellers nor the Company is aware of any such investigation audit or visit planned for the next twelve months.

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D.2 Distributions and other payments

All interest, discounts and premiums payable by the Company in respect of its loan relationships within the meaning of Chapter II of Part IV of the Finance Act 1996 are capable of being brought into account by the Company as a debit for the purposes of that Chapter as and to the extent that they are from time to time recognised in the Company's accounts (assuming that the accounting policies and methods adopted for the purpose of the Accounts continue to be so adopted).

The Company has not received any capital distribution to which the provisions of s.189 TCGA 1992 could apply.

The Company has not issued any share capital which is of a relevant class as defined in s.249(2) Taxes Act 1988 nor does the Company own any such share capital.

D.3 Capital allowances

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The Company has not made any claim for capital allowances in respect of any asset which is leased to or from or hired to or from the Company and no election affecting the Company has been made or agreed to be made under s.53 or s.55 Capital Allowances Act 1990 in respect of any such asset.

The Company has not made any election under s.37 Capital Allowances Act 1990 nor is it taken to have made such an election under subsection (8)(c) of that section.

None of the assets expenditure on which has qualified for a capital allowance under Part I of the Capital Allowances Act 1990 has at any time since that expenditure was incurred been used otherwise than as an industrial building or structure.

D.4 Capital gains

The book value shown in or adopted for the purpose of the Accounts as the value of each of the assets of the Company on the disposal of which a chargeable gain or allowable loss could arise does not exceed the amount which on a disposal of such asset at the date of this agreement would be deductible under s.38 TCGA 1992 (or any corresponding legislation in any relevant foreign jurisdiction).

The Disclosure Letter sets out full particulars of all claims and elections made (or assumed in the Accounts to be made) under s.23, s.247, s.248, s.152 to s.158, s.161, s.162 or s.165 TCGA 1992 (indicating which claims are provisional) insofar as they could affect the chargeable gain or allowable loss which would arise in the event of a disposal after the Accounts Date by the Company of any of its assets, and indicates which assets (if any) so affected would not on disposal give rise to relief under Schedule 4 TCGA 1992.

The Company has not disposed of or acquired any asset in circumstances such that the provisions of s.17 TCGA 1992 could apply to such disposal or acquisition nor given or agreed to give any consideration to which s.128(2)(b) TCGA 1992 could apply.

The Company neither owns nor has owned any shares on a disposal of which s.125(2) or (3) TCGA 1992 could apply nor received any asset by way of gift as mentioned in s.282 TCGA 1992.

No chargeable gain will accrue to the Company on the disposal of any debt owed to it.

The Company is not entitled to any capital loss to which the provisions of s.18(3) TCGA 1992 are applicable.

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D.5 Employees

The Company is not under an obligation to pay nor has it since the Accounts Date paid or agreed to pay any compensation for loss of office or any gratuitous payment not deductible in computing its income for the purposes of Corporation Tax (or any corresponding Taxation in any relevant foreign jurisdiction).

The Company does not participate in a scheme under s.202 Taxes Act 1988, and in relation to any such scheme disclosed the Company has given effect to the scheme in accordance with the contract and has complied with that section and regulations made under it.

No scheme registered under Chapter III of Part V Taxes Act 1988 applies to the Company or any of its employees and no application for registration of a scheme so applying has been made.

Since the Accounts Date the Company has not made any payment which may be wholly or partially disallowed as an expense or expense of management under s.112 Finance Act 1993 nor did any circumstances exist at the Accounts Date which could result in any payment made after that date being so disallowed.

D.6 Close companies

No distribution within s.418 Taxes Act 1988 has been made by the Company within the last seven years.

No loan or advance made by or debt incurred to or assigned to the Company falling within the provisions of s.419 Taxes Act 1988 (as extended by s.422 thereof) is outstanding or has been waived since the Accounts Date.

D.7 Groups of companies

The Company is not and never has been a member of a group of companies for any Taxation purpose whatsoever.

D.8 Overseas interests

The Company is and has throughout the past seven years been resident for tax purposes in the United Kingdom and is not and has not been treated as resident in any other jurisdiction for any tax purpose.

19

D.9 Tax avoidance

No transactions or arrangements involving the Company have taken place or are in existence which are such that any of the provisions of s.770 to s.773 Taxes Act 1988 have been or could be applied to them.

The Company has not been a party to any transaction to which the provisions of s.176 or s.177 TCGA 1992 have been or could be applied.

Since the Accounts Date no payment has been made to the Company to which s.601 Taxes Act 1988 applies.

D.10 Stamp duty and stamp duty reserve tax

All documents in the enforcement of which the Company may be interested and which are liable to stamp duty (or any corresponding Taxation in any foreign jurisdiction) have been duly stamped.

The Company has not since the Accounts Date incurred any liability to or been accountable for any stamp duty reserve tax (or any corresponding Taxation in any foreign jurisdiction) and there has been no conditional agreement within s.87(1) Finance Act 1986 which could lead to the Company incurring such a liability or becoming so accountable.

D.11 Value Added Tax

The Company is duly registered for the purposes of Value Added Tax (or any corresponding Taxation in any foreign jurisdiction) with quarterly prescribed accounting periods and no such registration is pursuant to paragraph 2 of Schedule 1 to VATA 1994 or subject to any conditions imposed by or agreed with HM Customs & Excise and the Company is not (nor are there any circumstances by virtue

20

of which it may become) under a duty to make monthly payments on account under the Value Added Tax (Payments on Account) Order 1993.

No act or transaction has been effected in consequence of which the Company is or may be held liable for any Value Added Tax under s.47, s.48 or s.55 VATA 1994 (agents etc., tax representatives and customer accounting) or s.29 VATA 1994 (self-billing) and no direction affecting the Company has been given under paragraph 2 of Schedule 6 to VATA 1994.

The Company has complied with all statutory provisions, rules, regulations, orders and directions concerning Value Added Tax including the making on time of accurate returns and payments and the proper maintenance and preservation of records and the Company has not been given any penalty liability notice within s.64 VATA 1994, any surcharge liability notice within s.59 of that Act, or any written warning within s.76(2) of that Act.

The Company is not nor was partially exempt in its current or preceding value added tax year and there are no circumstances by reason of which the Company might not be entitled to credit for all Value Added Tax (or any corresponding Taxation in any foreign jurisdiction) chargeable on supplies received and imports and acquisitions made (or agreed or deemed to be received or made) by it since the beginning of its earliest value added tax year to include a period since the Accounts Date and there are no circumstances by reason of which Regulation 107 Value Added Tax Regulations 1995 might apply (or has since the Accounts Date applied) to the Company.

No direction has been or could have been made to the Company under paragraph 1 of Schedule 6 or paragraph 1 of Schedule 7 to VATA 1994.

The Company has not at any time been required to give security under paragraph 4 of Schedule 11 to VATA 1994.

The Disclosure Letter contains full particulars of all elections to waive exemption made or agreed to be made under Schedule 10 to VATA 1994 by (i) the Company or (ii) any person in relation to which the Company is a relevant associate as defined in paragraph 3(7) of that Schedule and in respect of each election made:

21

and in no case has the Company charged Value Added Tax, whether on rents or otherwise, which is not properly chargeable because the Company has not made an election to waive exemption having effect in relation to the relevant supply.

The Company is not bound nor has agreed to become bound by any lease, tenancy or licence in the case of which under its terms or by statute the Company is or could become liable to pay an amount in respect of Value Added Tax chargeable as a result of the making of an election to waive exemption under Schedule 10 to VATA 1994.

In the case of each capital item (if any) within the meaning of Part XV of the Value Added Tax Regulations 1995 ("Part XV") in relation to which a liability under Part XV has arisen or could in future arise on the Company, the Disclosure Letter sets out:


There is no land or building in which the Company has an interest and in relation to which any exempt supply has been made or agreed to be made by it such that paragraph 3(9) of Schedule 10 to VATA 1994 could require it to obtain permission before making an election to waive exemption and there is no land or building in which the Company has an interest where any election to waive exemption is or may become ineffective by virtue of paragraph 2(3A) of that Schedule.

The Disclosure Letter contains full particulars of all claims which have been or could be made by the Company under s.78 or s.79 VATA 1994.

The Disclosure Letter contains full particulars of all claims which have been made under s.36 VATA 1994 and there are no existing circumstances by virtue of which any refund of tax obtained or claimed may be required to be repaid.

D.12 Inheritance Tax

22

D.13 Payments equivalent to Taxation

D.14 Position since Accounts Date

Since the Accounts Date:

D.15 Transfer pricing

D.16 Liability for tax primarily due from another person


E. PROPERTIES

E.1 Title

23

E.2 Encumbrances

E.3 Covenants

E.4 Disputes

    As far as the Warrantors are aware, there are no disputes regarding boundaries, easements, covenants or other matters relating to the Property or its use.

E.5 Planning

E.6 Notices, orders and proposals

E.7 Leases

24

25


F. EMPLOYEES

F.1 Interpretation

    In this paragraph:

F.2 Particulars disclosed

    The Disclosure Letter contains full and accurate particulars of the following:

26


F.3 Employees and terms and conditions of employment

27

F.4 Disputes

28

F.5 Collective matters

F.6 Pensions

29

F.7 Additional Option Warranties

30


SCHEDULE 5


PURCHASERS WARRANTIES

1.
The Purchaser is a corporation duly organised, validly existing and in good standing under the laws of the State of Delaware and has full power and authority to enter into this agreement and carry on its business as it is now being conducted.

2.
All of the outstanding shares of the Purchaser's capital stock have now been duly authorised and validly issued and are fully paid and nonassessable.

3.
Except as described in the Purchaser's SEC Reports (as defined below), there are no options, warrants or other rights, agreements, arrangements or commitments of any character relating to issued or unissued capital stock of the Purchaser or obligating the Purchaser to issue or sell any shares of capital stock of, or other equity interest in, the Purchaser.

4.
The Sangamo Shares issued in accordance with this agreement will be validly issued and fully paid and nonassessable and will be issued in compliance with all applicable securities laws and regulations and such issue will not contravene any laws, rules or regulations or with any agreements to which the Purchaser is a party or by which it or its property is bound. 2,250,000 shares of the Purchaser's common stock have been reserved for issuance (which includes shares reserved for issuance pursuant to Replacement Options).

5.
The Purchaser and its board of directors and officers have all necessary powers to issue the Consideration Shares without any consent by the stockholders of the Purchaser or any class of them or any other person and there are no other consents, authorisations, approvals or licences required by the Purchaser for the entering into or completion of this agreement which have not been unconditionally obtained and are in full force and effect.

6.
All the Sangamo Shares to be issued under this agreement will rank pari passu in all respects with the existing common stock of the Purchaser including the right to participate in all dividends and other distributions declared, paid or made following the Completion Date.

7.
The execution and delivery of this agreement by the Purchaser does not, and the performance of this agreement, and any additional agreements contemplated hereby to which the Purchaser is a party shall not, (i) conflict with or violate the Certificate of Incorporation, Bylaws or equivalent organisational documents of the Purchaser or any of its Subsidiaries, (ii) conflict with or violate any law, rule, regulation, order, judgement or decree applicable to the Purchaser or any of its subsidiaries or by which it or their respective properties are bound or affected, or (ii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or impair the Purchaser's or any such subsidiary's rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the material properties or material assets of the Purchaser of any of its subsidiaries pursuant to, any agreement filed as an exhibit to the Purchaser's SEC Reports, except to the extent such conflict, violation, breach, default, impairment or other effect would not in the case of clauses (ii) or (iii) reasonably be expected to have a Material Adverse Effect on the Purchaser.

8.
There are no claims, actions, suits or proceedings pending or, to the knowledge of the Purchaser (which refers to the knowledge of the officers and directors of the Purchaser), threatened against the Purchaser or any Subsidiary of the Purchaser or any properties or rights of the Purchaser or any Subsidiary of the Purchaser, before any court, arbitrator or administrative, governmental or regulatory authority or body, domestic or foreign which could reasonably be expected to have a Material Adverse Effect on the Purchaser.

31

9.
The Purchaser has made available to the Sellers a correct and complete copy of each report, schedule, registration statement and definitive proxy statement filed by the Purchaser with the SEC since its initial public offering (the "SEC Reports"), which are all the forms, reports and documents required to be filed by the Purchaser with the SEC since that date. The Purchaser's SEC Reports (A) comply in all material respects with the requirements of the Securities Act or the United Sates Securities and Exchange Act of 1934, as the case may be, and comply in all material respects with the rules and regulations of the SEC thereunder applicable to such SEC Reports and (B) did not at the time they were filed (or if amended or superseded by a filling prior to the date of this Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Since the date of the Purchasers last SEC filing there has not occurred any event which would reasonably be expected to be a Material Adverse Effect on the Purchaser. Each set of consolidated financial statements (including, in each case, any related notes thereto) contained in the Purchaser SEC Reports comply as to form in all material respects with the established rules and regulations of the SEC with respect thereto, was prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, do not contain footnotes as permitted by Form 10-Q of the Securities and Exchange Act of 1934) and each fairly presents the consolidated financial position of the Purchaser and its subsidiaries at the respective dates thereof and the consolidated results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which are not material in the aggregate.

32


SCHEDULE 6

SANGAMO BIOSCIENCES, INC. DECLARATION OF REGISTRATION RIGHTS

    This Declaration of Registration Rights (this "Declaration") is made as of June 28, 2001, by Sangamo BioSciences, Inc., a Delaware corporation ("Parent"), for the benefit of stockholders of Gendaq Limited, a company registered in England (the "Company"), acquiring shares of Parent Common Stock pursuant to that certain Acquisition Agreement dated as of June 28, 2001 (the "Acquisition Agreement"), among, inter alia, Parent, and the Sellers of the Company. None of the operative provisions of this Declaration of Registration Rights shall come into effect until the Effective Date.

    1.  Definitions.  As used in this Declaration:

Terms not otherwise defined herein have the meanings given to them in the Acquisition Agreement. None of the operative provisions of this Declaration of Registration Rights shall come into effect until the Effective Date.

    1.  Registration on Form S-3.  

1.
Parent shall use its best efforts to prepare and file with the SEC within 30 days after the Effective Date, a Form S-3 covering all Registrable Securities; provided, that each Holder shall provide all such information and materials regarding such Holder and take all such action as may be required

33

2.
Parent shall (i) use its best efforts to prepare and file with the SEC the registration statement with respect to the Registrable Securities and shall use its best efforts to cause such registration statement to become effective as promptly as practicable after filing and to keep such registration statement effective until the sooner to occur of (A) the date on which all Registrable Securities included within such registration statement have been sold or (B) the first anniversary of the date of the Effective Date; (ii) prepare and file with the SEC such amendments to such registration statement and amendments or supplements to the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities registered by such registration statement; (iii) furnish to each Holder such number of copies of any prospectus (including any preliminary prospectus and any amended or supplemented prospectus) in conformity with the requirements of the Securities Act, and such other documents, as each Holder may reasonably request in order to effect the offering and sale of the Registrable Securities to be offered and sold, but only while Parent shall be required under the provisions hereof to cause the registration statement to remain effective; (iv) use its best efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or blue sky laws of such jurisdictions as each Holder shall reasonably request, and do any and all other acts or things which may be necessary or advisable to enable each Holder to consummate the public sale or other disposition of such Registrable Securities in such jurisdictions; (v) notify each Holder, promptly after it shall receive notice thereof, of the date and time the registration statement and each post-effective amendment thereto has become effective or a supplement to any prospectus forming a part of such registration statement has been filed; (vi) notify each Holder at any time when a prospectus is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (vii) cause all Registrable Securities registered pursuant hereto to be listed on each securities exchange on which similar securities issued by Parent are then listed; and (viii) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder to a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

3.
Suspension of Prospectus. Prior to any proposed disposition by Holder of any Registrable Securities under any registration statement filed pursuant to Section 2 hereof, Holder shall notify Parent in writing of such proposed disposition. Parent may restrict disposition of Registrable Securities, and a Holder will not be able to dispose of such Registrable Securities, if Parent shall have delivered within two (2) business days thereof a notice in writing to such Holder stating that a delay in the disposition of such Registrable Securities is necessary because Parent, in its reasonable judgment, has determined in good faith that such sales would require public disclosure by Parent of material nonpublic information that is not included in such registration statement and for which Parent has a bona fide business purpose for preserving confidentiality. No such notice will be delivered or affect any Holder's rights hereunder unless Parent's officers are similarly restrained from disposing of Parent common stock. In the event of the delivery of the notice described above by Parent, Parent shall use its reasonable best efforts to amend such registration statement and/or amend or supplement the related prospectus if necessary and to take all other actions necessary to allow the proposed sale to take place as promptly as possible, subject, however, to the right of Parent to

34

4.
Expenses. All of the out-of-pocket expenses incurred in connection with any registration of Registrable Securities pursuant to this Declaration, including, without limitation, all SEC, Nasdaq National Market and blue sky registration and filing fees, printing expenses, transfer agents' and registrars' fees and the reasonable fees and disbursements of Parent's outside counsel and independent accountants shall be paid by Parent. Parent shall not be responsible to pay any legal fees for any Holder or any selling expenses of any Holder (including, without limitation, any broker's fees or commissions).

5.
Indemnification. In the event of any offering registered pursuant to this Declaration: Parent will indemnify each Holder, each of its officers, directors and partners and such Holder's legal counsel, and each person controlling such Holder within the meaning of Section 15 of the Securities Act (each, a "Seller Indemnified Party"), with respect to which registration, qualification or compliance has been effected pursuant to this Declaration, against all expenses, claims, losses, damages and liabilities (joint or several) (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any of the following statements, omissions or violations (collectively, a "Violation"): any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus including any preliminary prospectus or final prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading, or any violation or alleged violation by Parent of the Securities Act, the Exchange Act, any rule or regulation promulgated under the Securities Act, Exchange Act, state securities laws or common law applicable to Parent in connection with any such registration, qualification or compliance, and will reimburse each Seller Indemnified Party for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action; provided, however, that Parent will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based in any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to Parent in an instrument duly executed by such Seller Indemnified Party and stated to be specifically for use therein; and provided, further, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Seller Indemnified Party, or any person controlling such Seller Indemnified Party, from whom the person asserting any such claims, losses, liabilities, damages or actions purchased shares, if a copy of the prospectus (as then amended or supplemented if Parent shall have furnished any amendments of supplements thereto) was not sent or given by or on behalf of such Seller Indemnified Person to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the shares to such person and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such claim, loss, liabilities, damages or actions.

    (a)
    To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify Parent, each of its directors and officers and its legal counsel and independent accountants, and each other such Holder whose Securities

35

36

6.
Limitation on Assignment of Registration Rights. The rights of each Holder under this Declaration are assignable to any purchaser or transferee of Registrable Securities; provided, however, that any such assignee shall receive such assigned rights subject to all the terms and conditions of this Declaration. Prior to an assignment of registration rights under this Declaration, Holder must furnish Parent with written notice of the name and address of such assignee and the Registrable Securities with respect to which such registration rights are being assigned and a copy of a duly executed written instrument in form reasonably satisfactory to Parent by which such assignee assumes all of the obligations and liabilities of its transferor hereunder and agrees itself to be bound hereby. No assignment of registration rights under this Declaration shall be permitted if immediately following such assignment the disposition of such Registrable Securities by the assignee is not restricted under the Securities Act.

7.
Reports Under Exchange Act. Parent agrees to:

    (a)
    use its commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of Parent under the Securities Act and the Exchange Act;

    (b)
    furnish to each Holder, forthwith upon request (i) a written statement by Parent that it has complied with the reporting requirements of SEC Rule 144, the Securities Act and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), and (ii) a copy of the most recent annual or quarterly report of Parent; and make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after ninety (90) days after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act.

8.
Amendment of Registration Rights. Holders of a majority of the Registrable Securities from time to time outstanding may, with the consent of Parent, amend the registration rights granted hereunder.

9.
Governing Law. This Declaration shall be governed in all respects by and construed in accordance with the laws of the State of California without regard to the conflict of law principles therein.

37

    IN WITNESS WHEREOF, THIS DECLARATION OF REGISTRATION RIGHTS IS EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN.

    SANGAMO BIOSCIENCES, INC.
         

 
 
By:
    Name:
    Title:

38

SIGNATURE PAGES FOR ACQUISITION AGREEMENT RELATING TO THE SALE OF
GENDAQ LIMITED TO SANGAMO BIOSCIENCES, INC.


SIGNED by
 
 
 
 
(Print Name)		  
(Director)
for and on behalf of
 SANGAMO BIOSCIENCES, INC.
in the presence of		    

SIGNED by
 
 
 
 
(Print Name)		  
(Director)
for and on behalf of
 RBC TRUSTEES (GUERNSEY) LIMITED
(as trustees for the Pizzicato Trust
in the presence of		    

SIGNED by
 
 
 
 
(Print Name)		  
(Director)
for and on behalf of
 THE MEDICAL RESEARCH COUNCIL
in the presence of		    

 
 
 
 
 
SIGNED by DR. TIMOTHY BREARS
in the presence of		  

 
 
 
 
 
SIGNED by PROFESSOR SIR AARON KLUG
in the presence of		  

SIGNED by
 
 
 
 
(Print Name)		  
(Director)
of MVM LIMITED
for and on behalf of UK MEDICAL
FUND NO 1 LIMITED PARTNERSHIP
in the presence of		    

SIGNED by
 
 
 
 
(Print Name)		  
(Investment Manager)
for and on behalf of ABN AMRO
VENTURES B.V.
in the presence of		    

SIGNED by
 
 
 
 
(Print Name)		  
(Authorised Signatory)
for and on behalf of DUSTY MILLER L.L.C.
in the presence of		    

39


SIGNED by
 
 
 
 
(Print Name)		  
(Duly Authorised Attorney)
acting as duly authorised attorney
for and on behalf of 3i GROUP PLC
in the presence of		    

SIGNED by
 
 
 
 
(Print Name)		  
(Director)
of AVLAR BIOVENTURES LIMITED
for and on behalf of AVLAR BIOVENTURES
FUND 1 LIMITED PARTNERSHIP
in the presence of		    

SIGNED by
 
 
 
 
(Print Name)		  
Director
for and on behalf of NEOMED INNOVATION ASA
in the presence of		    

40



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CONTENTS
SCHEDULE 1B
EMPLOYEE OPTIONS
SCHEDULE 2
PARTICULARS OF THE COMPANY
SCHEDULE 3
PROPERTY
SCHEDULE 4
WARRANTIES
A. GENERAL
B. ACCOUNTS AND FINANCIAL
C. COMMERCIAL
D. TAXATION
E. PROPERTIES
F. EMPLOYEES
SCHEDULE 5
PURCHASERS WARRANTIES
SCHEDULE 6 SANGAMO BIOSCIENCES, INC. DECLARATION OF REGISTRATION RIGHTS
Prepared by MERRILL CORPORATION
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Exhibit 99.1


SANGAMO BIOSCIENCES, INC. COMPLETES GENDAQ LTD. ACQUISITION.

Richmond, California—July 5, 2001—Sangamo BioSciences, Inc. (Nasdaq: SGMO) today announced that it had completed the acquisition of Gendaq Ltd., a privately held biotechnology company headquartered in London. Under the terms of the acquisition agreement, Sangamo acquired all of the outstanding shares of Gendaq in exchange for approximately 2,124,638 newly issued shares of Sangamo common stock. In addition, Sangamo will reserve 125,352 shares of common stock for options granted to Gendaq employees.

    "We are very pleased to complete this transaction," said Edward Lanphier, president and chief executive officer of Sangamo BioSciences, Inc. "The addition of Gendaq's outstanding scientific team and 24 patent applications in the zinc finger field solidifies and augments Sangamo's leadership in ZFP TF gene regulation."

    In connection with the acquisition, Stephen Reeders, Investment Manager at MVM Limited, a venture capital firm, was appointed to the Sangamo Board of Directors. Dr. Reeders has degrees in Natural Sciences (Cambridge) and Medicine (Oxford) and practiced as a clinician before taking up research into molecular genetics at Oxford University and Yale University where he was an Associate Professor of Medicine and Genetics and an Investigator of the Howard Hughes Medical Institute. He has been involved in starting up several US biotechnology companies and from 1993, was responsible for early-stage health care investments at Saunders, Karp & Megrue in New York City.

About Sangamo

    Sangamo is focused on the research and development of novel transcription factors for the regulation of gene expression. Sangamo's Universal Gene Recognition™ technology enables the engineering of transcription factors known as zinc finger DNA-binding proteins, or ZFP TFs. By engineering ZFP TFs so that they can recognize a specific gene, Sangamo has created ZFP TFs that can control gene expression and, consequently, cell function. The company intends to establish Universal Gene Recognition as a widely used technology for commercial applications in pharmaceutical discovery, human therapeutics, clinical diagnostics, agriculture and industrial biotechnology. Over twenty leading pharmaceutical and biotechnology companies have utilized ZFP TFs. In addition, Sangamo is developing novel ZFP TF-based therapeutics for the treatment of cardiovascular disease. For more information about Sangamo, visit the company's web site at www.sangamo.com.

    This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbors created by those sections. Those forward-looking statements include statements related to the ability of Sangamo BioSciences, Inc. to continue to meet marketing, technology, and customer demands as it relates to its products within the gene regulation market and to completed the acquisition of Gendaq. Actual results may differ materially due to a number of factors, including numerous technological, operational and financial challenges associated with the regulation of genes. The matters discussed in this press release also involve risks and uncertainties concerning Sangamo's products and services described in Sangamo's filings with the Securities and Exchange Commission (SEC). In particular, see the risk factors described in the company's Annual Report on Form 10-K and its most recent quarterly report on Form 10-Q. Sangamo assumes no obligation to update the forward-looking information contained in this press release.



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SANGAMO BIOSCIENCES, INC. COMPLETES GENDAQ LTD. ACQUISITION.