Sangamo Therapeutics - Chapter 11 Bidding Procedures Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• Seller: Sangamo Therapeutics, Inc., as Debtor and debtor in possession
• Merope Stalking Horse Bidder: Merope Acquisition Sub, LLC, with Eli Lilly and Company (“Lilly”) party solely as Guarantor, for the sale of the Merope Assets
• Astellas Stalking Horse Bidder: Astellas Gene Therapies, Inc., for the sale of the Astellas Assets
• On June 22, 2026, the Debtor entered into the Merope Stalking Horse APA (with the Merope Stalking Horse Bidder and Lilly) and the Astellas Stalking Horse APA (with the Astellas Stalking Horse Bidder), each providing for the sale of the applicable Assets.
• Each of the Stalking Horse Bidders is a third-party purchaser and is unrelated to the Debtor. Neither the Stalking Horse Bidders, nor any of their affiliates, subsidiaries, officers, directors, members, partners, principals, representatives, successors, or assigns is an “insider” or “affiliate” of the Debtor under Local Bankr. R. 6004-1(b)(iv)(A) or as those terms are defined in section 101 of the Bankruptcy Code.
• The Debtor’s investment banker is Raymond James & Associates, Inc.

Assets Being Sold

• Pursuant to the Bidding Procedures, the Debtor intends to sell all or substantially all of its Assets, in whole or in part, including the Debtor’s:
  • Proprietary capsids, including STAC-150, STAC-BBB, and any STAC-BBB capsid variants, and related technology;
  • Proprietary capsid receptors and related technology;
  • Technology Platforms;
  • Prion Disease Program;
  • Fabry Disease Program;
  • ST-503 investigational therapy for small fiber neuropathy;
  • Licenses, partnered programs, and collaboration agreements with strategic partners; and
  • A portfolio of other intellectual property comprising approximately 110 patent families directed to the design, compositions, and uses of zinc finger proteins and other related technologies.
• The Merope Assets are to be sold under the Merope Stalking Horse APA and the Astellas Assets under the Astellas Stalking Horse APA. The Debtor intends to sell all or substantially all of its Assets, including the Remaining Assets, and, as a result, may enter into Additional Stalking Horse APAs with Additional Stalking Horse Bidders subject to the Stalking Horse Designation Procedures.
• In addition to the Merope Stalking Horse Bid, the Astellas Stalking Horse Bid, and any Additional Stalking Horse Bid, the Debtor will consider bids for the Assets from other parties.

Stalking Horse Bids

• The Merope Stalking Horse APA and the Astellas Stalking Horse APA are each subject to higher or otherwise better offers submitted in accordance with the terms and provisions of the Bidding Procedures.
• The Merope Stalking Horse Bidder and the Astellas Stalking Horse Bidder are each deemed a Qualified Bidder, and the Merope Stalking Horse Bid and the Astellas Stalking Horse Bid, as set forth in the applicable APA, are each deemed a Qualified Bid.
• The Debtor is authorized to enter into any Stalking Horse APAs (including all schedules, exhibits, and other ancillary documents thereto), subject to higher and better offers at the Auction in accordance with the Bidding Procedures.

Credit Bid

• The Merope Stalking Horse Bidder, the Astellas Stalking Horse Bidder, and any Additional Stalking Horse Bidder may credit bid at any Auction the full amount owing with respect to the Merope Bid Protections, the Astellas Bid Protections, or the Additional Stalking Horse Bid Protections, as applicable, subject to the terms of the applicable Stalking Horse APA.

Bid Protections

• Merope Bid Protections:
  • Break-up fee equal to $1,500,000, representing three percent (3%) of the Merope Purchase Price; and
  • Reimbursement of the Merope Stalking Horse Bidder’s reasonable and documented out-of-pocket costs and expenses incurred in connection with the transaction, in an amount not to exceed $500,000, representing one percent (1%) of the Merope Purchase Price.
• Astellas Bid Protections:
  • A “Termination Fee” equal to four percent (4%) of the “Closing Consideration” (as defined in the Astellas Stalking Horse APA); and
  • Reimbursement of the Astellas Stalking Horse Bidder’s reasonable and documented out-of-pocket costs and expenses, in an amount not to exceed $500,000 in the aggregate.
• The Debtor’s obligation to pay the Merope Bid Protections and the Astellas Bid Protections shall each constitute, pursuant to sections 105(a), 503(b), and 507(a)(2) of the Bankruptcy Code, an allowed administrative expense claim against the Debtor’s estate, junior in priority to the Carve-Out (as defined in the Interim DIP Order [Docket No. 63]), and shall survive termination of the applicable Stalking Horse APA.
• The Merope Bid Protections are payable only upon the Debtor’s consummation of an Alternative Transaction (as defined in the Merope Stalking Horse APA); the Astellas Bid Protections are payable solely from the proceeds received by the Debtor at the closing of a Competing Transaction (as defined in the Astellas Stalking Horse APA), or, where termination is tied to a chapter 11 plan, upon the plan’s effective date. Neither Bid Protection may be modified without the consent of the applicable Stalking Horse Bidder.
• The Debtor has demonstrated a compelling business justification for providing the Bid Protections to the Stalking Horse Bidders on the terms set forth in each Stalking Horse APA, which are an essential inducement and condition of the Stalking Horse Bidders’ entry into, and continuing obligations under, each Stalking Horse APA.
• No person or entity other than the Merope Stalking Horse Bidder, the Astellas Stalking Horse Bidder, or any Additional Stalking Horse Bidder (and only to the extent the Court enters an Additional Stalking Horse Order with respect to that bidder) shall be entitled to any expense reimbursement, break-up fee, “topping,” termination, or other similar fee or payment in connection with the purchase of any of the Assets, and by submitting a bid, such party is deemed to have waived any right to request such payment, whether under section 503(b) of the Bankruptcy Code or otherwise.

Designation of Additional Stalking Horse Bidders

• The Debtor is authorized to designate any Additional Stalking Horse Bidder with respect to any Additional Stalking Horse APA and provide Additional Bid Protections in accordance with the Additional Stalking Horse Designation Procedures set forth in paragraph 18 of the Bidding Procedures Order. Any Additional Stalking Horse APA executed by the Debtor is deemed a Qualified Bid, and any Additional Stalking Horse Bidder party thereto is deemed a Qualified Bidder.
• If the Debtor intends to designate an Additional Stalking Horse Bidder, it will (i) file the Additional Stalking Horse Hearing Notice setting an expedited hearing on not less than five calendar days’ notice, and (ii) require parties wishing to object to entry of the Additional Stalking Horse Order to file and serve any objections within five calendar days after service of the Additional Stalking Horse Hearing Notice (the “Additional Stalking Horse Objection Deadline”).
• The Additional Stalking Horse Hearing Notice will (i) set forth the identity of the Additional Stalking Horse Bidder (and, if a newly-formed entity, its parent company or sponsor); (ii) set forth the amount of the Additional Stalking Horse Bid and what portion (if any) is cash; (iii) identify any connections the bidder has to the Debtor other than those arising from the Additional Stalking Horse Bid; (iv) specify any Additional Bid Protections; (v) attach the Additional Stalking Horse APA; (vi) attach the proposed form of Additional Stalking Horse Order; and (vii) set forth the Additional Stalking Horse Objection Deadline.
• For the avoidance of doubt, no Additional Stalking Horse Bidder will be entitled to any Additional Bid Protections absent entry of an Additional Stalking Horse Order or further order of the Court.
• If the Debtor seeks to provide bid protections to any Additional Stalking Horse Bidder that is an “insider” (as defined in section 101(31) of the Bankruptcy Code), the Debtor will file a separate motion seeking approval of such bid protections and may request an expedited hearing on that motion.

Bid Requirements

• To participate in the formal bidding process, an Interested Party (other than the Stalking Horse Bidders) must deliver the Preliminary Bid Documents to Raymond James by email (Attn: Geoffrey Richards and Alexander V. Rohan). To be eligible to participate in the Auction, each Potential Bidder must submit a Bid to Raymond James so as to be actually received by the Bid Deadline of August 4, 2026, at 5:00 p.m. (ET), or such other date as agreed by the Debtor in consultation with the Consultation Parties.
• To constitute a Qualified Bid, a Bid must, among other requirements:
  • Include a letter stating that the offer is irrevocable and binding until the closing of the Sale if the Potential Bidder is the Successful Bidder, and that the Potential Bidder agrees to serve as a Backup Bidder if its Bid is selected as the next highest or otherwise next best Bid;
  • Fully disclose the identity of the party submitting the Bid (and any equity holders, limited partners, or other financial backer or guarantor), including its full legal name, jurisdiction of formation, and location within the corporate structure;
  • Clearly identify (a) the Assets to be purchased, including whether any are subject to the Merope, Astellas, or any Additional Stalking Horse APA, (b) the liabilities and obligations to be assumed, and (c) whether the Potential Bidder intends to operate the Debtor’s business as a going concern;
  • Specify in detail which of the Debtor’s unexpired leases and executory contracts are to be assumed by the Debtor and assigned to the Potential Bidder;
  • Clearly set forth the cash and any other non-cash consideration (with the form specified) comprising the Purchase Price, which must satisfy the Minimum Bid requirements (the Debtor, in its business judgment, may favor cash consideration over other types);
  • Include an executed asset purchase agreement, together with all exhibits and schedules (the “Transaction Documents”), and, for any bid including Assets subject to the Stalking Horse APAs, a copy of the proposed agreement marked against the applicable Stalking Horse APA;
  • Include written evidence of the Potential Bidder’s financial ability to timely close, and sufficient information to establish adequate assurance of future performance under section 365 of the Bankruptcy Code to affected non-Debtor counterparties;
  • Contain written evidence of authorization and approval from the Potential Bidder’s board of directors (or comparable governing body);
  • Not be conditioned on unperformed due diligence, obtaining financing, or any internal approval, and, with respect to a Bid for any Merope Assets or Astellas Assets, not otherwise be subject to contingencies more burdensome to the Debtor than those in the applicable Stalking Horse APA;
  • Disclaim any right to any break-up fee, termination fee, expense reimbursement, or similar payment (other than the Merope, Astellas, and any Additional Stalking Horse Bid);
  • Be reasonably likely to be consummated, if selected as the Successful Bid, by no later than September 4, 2026, unless extended by the Debtor in consultation with the Consultation Parties (the closing time frame for the Stalking Horse APAs being governed by their terms); and
  • Include a statement that the Potential Bidder has acted in good faith consistent with section 363(m) of the Bankruptcy Code, has complied with the Bidding Procedures, and an acknowledgment that it has not engaged, and agrees not to engage, in any collusion subject to section 363(n) of the Bankruptcy Code.
• Any Bid that contemplates a reorganization pursuant to a chapter 11 plan (a “Plan Sponsor Alternative”) must include the material terms of any financing and of the proposed plan, be consistent with the Bidding Procedures Order, and otherwise be acceptable to the Debtor in its reasonable business judgment following consultation with the Consultation Parties.
• The Debtor is authorized to approve joint Bids in its business judgment, in consultation with the Consultation Parties, on a case-by-case basis, subject to the restrictions on communications among Potential Bidders.

Minimum Bid / Overbid

• Merope Assets: the Bid must include an amount of cash consideration at closing that exceeds the aggregate sum of (1) the aggregate consideration set forth in the Merope Stalking Horse APA, (2) the Merope Bid Protections, and (3) an initial minimum overbid increment of $250,000 (the “Initial Overbid Amount”).
• Astellas Assets: the Bid must have a value to the Debtor greater than the aggregate consideration in the Astellas Stalking Horse APA (including the Milestone Payments) and include an amount of cash consideration at closing that exceeds the aggregate sum of (1) the aggregate consideration in the Astellas Stalking Horse APA (excluding the Milestone Payments), (2) the Astellas Bid Protections, and (3) the Initial Overbid Amount (the “Astellas Minimum Bid Value”). The Astellas Minimum Bid Value will be communicated by the Debtor to Potential Bidders for the Astellas Assets no later than five days prior to the Bid Deadline.
• Assets subject to an Additional Stalking Horse APA: the Bid must include an amount of cash consideration at closing that exceeds the aggregate sum of (1) the aggregate consideration in the Additional Stalking Horse APA, (2) the Additional Bid Protections, and (3) any initial overbid amount set forth in the Additional Stalking Horse Order.
• During the Auction, bidding will begin with the Baseline Bid and continue in minimum increments of at least $100,000 (each, an “Overbid”), subject to the Debtor’s right, in consultation with the Consultation Parties, to announce increases or reductions to the minimum increments at any time. The Debtor will announce the material terms of each Overbid, value it in accordance with the Bidding Procedures, and provide each Qualified Bidder an opportunity to make a subsequent Overbid.

Good Faith Deposit

• Each Bid must be accompanied by a Good Faith Deposit in the form of cash paid via wire transfer, to be held in an escrow account established by the Debtor, in an amount equal to 10% of the cash portion of the Purchase Price being bid (other than a Bid submitted by the Merope or Astellas Stalking Horse Bidder).
• If the purchase price of a Bid is increased at any time, the required Good Faith Deposit will automatically increase to equal 10% of the increased purchase price, and the Potential Bidder must pay the increase into escrow within one business day. The Successful Bidder and Backup Bidder (except the Merope and Astellas Stalking Horse Bidders) must, following the Conclusion of the Auction, increase their deposits to equal 10% of the cash portion of the applicable Successful Bid or Backup Bid.
• All Good Faith Deposits will be held in a non-interest-bearing escrow or trust account on terms acceptable to the Debtor (in consultation with the Consultation Parties). Deposits of Qualified Bidders other than the Successful Bidder and Backup Bidder will be returned within seven days after selection of the Successful Bidder and Backup Bidder.
• The Successful Bidder’s deposit will be applied to the Purchase Price at closing, and the Debtor may retain it as part of its damages if the Successful Bidder fails to close. The Backup Bidder’s deposit will be returned within seven days after consummation of the sale with the Successful Bidder.

Qualified Bidder

• A Qualified Bidder is a Potential Bidder that, in the Debtor’s reasonable determination following consultation with the Consultation Parties (which consultation shall include providing copies of all submitted Bids to the Committee), (i) has timely submitted a Bid satisfying each of the Bid Requirements and (ii) is able to consummate the proposed transaction within the required time frame if selected as the Successful Bidder. The Debtor reserves the right to work with any Potential Bidder to cure deficiencies in a Bid not initially deemed a Qualified Bid.
• The Merope Stalking Horse Bidder, the Astellas Stalking Horse Bidder, and any Additional Stalking Horse Bidder are each a Qualified Bidder; the Merope, Astellas, and any Additional Stalking Horse APA are each a Qualified Bid; and each is authorized to submit Overbids during the Auction without further qualification.
• The Debtor will determine whether a Potential Bidder is a Qualified Bidder and notify it of such determination no later than one business day prior to the Auction.

Auction

• The Auction, if one is needed, will be held on August 10, 2026, at 10:00 a.m. (ET) at the offices of Raymond James, 320 Park Avenue, Floor 12, New York, NY 10022, or such other time, place, or virtual platform (including Zoom) as the Debtor notifies Qualified Bidders. The Auction will be conducted openly and transcribed by a court reporter or recorded.
• If the Debtor does not receive any Qualified Bids (other than a Stalking Horse Bid) for any of its Assets by the Bid Deadline: (a) no Auction will be held as to those Assets; (b) the relevant Stalking Horse Bidder will be deemed the Successful Bidder for the applicable Assets; and (c) the Debtor may seek approval of the applicable Stalking Horse APA at the Sale Hearing. The Debtor will hold the Auction as to any Assets for which it received more than one Qualified Bid (including any relevant Stalking Horse Bid).
• The Debtor and its professionals will direct and preside over the Auction and may, in the exercise of business judgment and in consultation with the Consultation Parties, hold one or more separate Auctions for different segments of the Debtor’s Assets. Only a Qualified Bidder that has submitted a Qualified Bid will be eligible to participate, though no participation limitations shall apply to the Stalking Horse Bidders.
• At the start of the Auction, the Debtor will describe the terms of the applicable Baseline Bid(s). The Debtor will maintain a transcript of the Auction, including all Bids made and announced, the Baseline Bid(s), all Overbids, the Successful Bid(s), and the Backup Bid(s). Each Qualified Bidder will be required to confirm on the record that it has not engaged in any collusion with respect to the bidding or sale.
• Round-skipping is explicitly prohibited. The Debtor will not consider any Overbids submitted after it announces on the record that the Auction is concluded (the “Conclusion”), and any such Overbids shall be deemed untimely and shall not constitute a Qualified Bid.

Selection of the Successful Bid

• At the Conclusion of the Auction, the Debtor shall, after consultation with the Consultation Parties and consistent with the Bidding Procedures and the Bid Assessment Criteria, determine which Bid(s) constitute the highest or otherwise best Bid(s) for the Assets (each, a “Successful Bid”) and notify all Qualified Bidders at the Auction of the identity of the Successful Bidder(s).
• Within 24 hours after the conclusion of the Auction, the Debtor shall file a Notice of Successful Bidder identifying the Successful Bidder(s) and Backup Bidder(s) (if selected) and serve it on the Sale Notice Parties.
• The Debtor’s presentation of a particular Qualified Bid to the Court for approval does not constitute acceptance of that Bid. The Debtor will be deemed to have accepted a Bid only upon Court approval at the Sale Hearing; if the Debtor pursues a Plan Sponsor Alternative, acceptance occurs only upon Court approval of the applicable chapter 11 plan at a confirmation hearing.

Backup Bidder

• If an Auction is conducted, the Qualified Bidder with the next-highest or otherwise second-best Qualified Bid (the “Backup Bid”) shall be required to serve as the Backup Bidder and shall be deemed to agree to do so if designated (subject, in the case of the Merope or Astellas Stalking Horse Bidder, to the terms of the applicable Stalking Horse APA).
• Notwithstanding the foregoing, the Merope Stalking Horse Bidder shall not be required to serve as the Backup Bidder.
• The Backup Bid(s) shall remain binding on the Backup Bidder until the closing of a Sale for the applicable Assets pursuant to the Successful Bid; provided that if the Merope or Astellas Stalking Horse Bidder is the Backup Bidder, the Backup Bid shall remain binding solely to the extent provided in the applicable Stalking Horse APA.
• If a Successful Bidder fails to consummate the approved transactions contemplated by its Successful Bid, the Debtor may select the Backup Bidder as the Successful Bidder, and such Backup Bidder shall be deemed a Successful Bidder for all purposes.

Assumption and Assignment and/or Rejection

• The Debtor is authorized to assume and assign the Assigned Contracts to the Merope Stalking Horse Bidder, the Astellas Stalking Horse Bidder, any Additional Stalking Horse Bidder, or the Successful Bidder(s), as applicable, or to reject certain contracts (the “Rejected Contracts”), in accordance with the Assumption and Assignment and/or Rejection Procedures.
• Payment of the applicable Cure Amounts by the Debtor or the Successful Bidder(s), together with the assumption and assignment of the Assigned Contracts, shall (i) cure all existing defaults, (ii) compensate for any actual pecuniary loss resulting from such default, and (iii) constitute adequate assurance of future performance.
• With respect to the Merope Stalking Horse Bid, the Merope Stalking Horse Bidder’s deadline to designate any Outbound License Agreement (as defined in the Merope Stalking Horse APA) as an Assigned Contract shall be no later than two business days prior to the Sale Hearing, except as otherwise agreed in writing with the applicable counterparty.
• Section 365(n) elections:
  • Any counterparty to an Outbound License Agreement wishing to make the election under section 365(n)(1)(B) must file and serve a Notice of Election. Any such counterparty that fails to do so by no later than August 4, 2026, at 4:00 p.m. (ET) (the “Election Deadline”) shall be forever barred from asserting rights under section 365(n)(1)(B) and deemed to have elected to terminate the agreement under section 365(n)(1)(A) upon its rejection.
  • Any counterparty to an IP License designated for rejection by a Supplemental Assumption/Rejection Notice that fails to file and serve a timely Notice of Election within 14 days following service of that notice (the “Supplemental Election Deadline”) shall be similarly barred and deemed to have elected to terminate under section 365(n)(1)(A) upon rejection.
• In connection with the Merope Stalking Horse Bid and the Astellas Stalking Horse Bid, the Merope and Astellas Stalking Horse Bidders have designated the Contracts listed on Schedule 2 for rejection.
• If the Merope Stalking Horse Bidder is a Successful Bidder, the Debtor intends to seek entry of a Merope Sale Order that includes findings of fact and conclusions of law establishing that the noncompete provisions in the Outbound License Agreements are not binding on the Merope Stalking Horse Bidder or its affiliates.

Sale Free and Clear

• The Debtor seeks authorization for one or more Sales of the Assets free and clear of all liens, claims, interests, and encumbrances, except certain permitted encumbrances as determined by the Debtor and any Successful Bidder(s), with liens to attach to the proceeds of the applicable Sale.
• Except as otherwise provided in a final purchase agreement approved by the Court as the Successful Bid, all of the Debtor’s right, title, and interest in the Assets will be sold or transferred free and clear of all liens (other than permitted liens), with any such liens attaching to the sale proceeds.

“As Is, Where Is”

• Any sale or transfer of the Assets will be on an “as is, where is” basis, without representations or warranties of any kind by the Debtor, its agents, or the Debtor’s chapter 11 estate, except and solely to the extent expressly set forth in a final purchase agreement approved by the Court as the Successful Bid.
• Each Qualified Bidder will be required to acknowledge and represent that it has had an opportunity to conduct any and all due diligence regarding the Assets prior to making its Bid and that it has relied solely upon its own independent review and investigation.

Consultation Parties

• The “Consultation Parties” means (i) the DIP Lender and (ii) the Official Committee of Unsecured Creditors (the “Committee”). If any Consultation Party (including any Committee member) submits or participates in a Bid, it shall immediately cease to be a Consultation Party unless and until it unequivocally revokes its Bid and waives its right to continue in the bidding process; provided that the Committee shall remain a Consultation Party so long as any such member is screened from all matters concerning the Debtor’s sale process.
• The Debtor shall consult with the Consultation Parties as explicitly provided in the Bidding Procedures and as additionally necessary or appropriate, and each reference to “consultation” shall mean consultation in good faith.

Sale Hearing

• The Sale Hearing will be held on August 20, 2026, at 10:00 a.m. (ET) before the Honorable Craig T. Goldblatt, United States Bankruptcy Judge, at the Court, 824 North Market Street, 3rd Floor, Courtroom No. 7, Wilmington, Delaware 19801.
• At the Sale Hearing, the Debtor will seek certain findings, including that: (i) the Auction was conducted, and each Successful Bidder selected, in accordance with the Bidding Procedures; (ii) the Auction was fair in substance and procedure; (iii) each Successful Bid was a Qualified Bid; and (iv) consummation of any Sale contemplated by each Successful Bid will provide the highest or otherwise best offer for the applicable Assets and is in the best interests of the Debtor and its estate.

Key Dates

• Bidding Procedures Hearing: July 15, 2026, at 11:00 a.m. (ET)
• Deadline to Serve Bidding Procedures Order and Sale Hearing Notice: no later than three days following entry of the Bidding Procedures Order
• Deadline to Designate Additional Stalking Horse Bidder(s): no later than three business days after entry of the Bidding Procedures Order
• Bid Deadline: August 4, 2026, at 5:00 p.m. (ET)
• Sale Objection Deadline: August 4, 2026, at 4:00 p.m. (ET)
• Section 365(n)(1)(B) Election Deadline (Outbound License Agreements): August 4, 2026, at 4:00 p.m. (ET)
• Deadline to Designate Qualified Bids: August 7, 2026, at 4:00 p.m. (ET)
• Auction (if needed): August 10, 2026, at 10:00 a.m. (ET)
• Deadline to Serve Notice of Successful Bidder(s) and Contract Assumption/Rejection Notice: within 24 hours after the conclusion of the Auction
• Supplemental Sale Objection Deadline: two business days after service of the Notice of Successful Bidder
• Sale Hearing: August 20, 2026, at 10:00 a.m. (ET)
• Entry of Sale Order: August 20, 2026
• Closing: September 4, 2026 (the time frame may be extended by the Debtor in consultation with the Consultation Parties, subject to the terms of the applicable Stalking Horse APA)