AGREEMENT UNDER AN NIH PRIME AWARD

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                                                                   EXHIBIT 10.36

                    *CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
                    DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
                    WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
                    24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

                                    AGREEMENT
                            UNDER AN NIH PRIME AWARD

     This Agreement ("Agreement") is entered into this 10th day of February,
2006 by and between The Children's Hospital of Philadelphia ("CHOP") and
Targeted Genetics Corporation (the "SUBAWARDEE").

     WHEREAS, CHOP is the sub-recipient of Contract No. HHSN266200500008C from
the National Institutes of Health ("NIH"), Department of Health and Human
Services ("DHHS") for support of a project entitled "HIV Vaccine Design and
Development Teams" (the "Prime Award") for which CHOP has received a cost
reimbursement Subcontract ("Subcontract"); and

     WHEREAS, the Subcontract includes authorization for the collaboration
between CHOP and the SUBAWARDEE; and

     WHEREAS, the SUBAWARDEE has the skilled personnel and resources available
to perform the services contemplated by this Agreement in accordance with the
Subcontract and this Agreement and all applicable federal laws, regulations and
policies, including but not limited to the NIH Grants Policy Statement (NIH
Publication No. 99-8, March 2001, as may be amended, the "NIH Grants Policy
Statement") that may be in effect from time to time.

     NOW THEREFORE, the parties agree as follows:

ARTICLE 1. STATEMENT OF WORK

     SUBAWARDEE agrees to use diligent efforts to perform the work described in
     its Statement of Work, which is attached as ATTACHMENT A and made part of
     this Agreement. Any significant change in the Statement of Work must be
     approved by CHOP in advance, and will be memorialized in an amendment to
     this Agreement.

ARTICLE 2. PERIOD OF PERFORMANCE

     The performance period for this Agreement will be effective 31 August 2005
     retroactively and will not extend beyond 30 August 2006 unless the period
     is extended by amendment to this Agreement.

ARTICLE 3. KEY PERSONNEL

     The CHOP Principal Investigator (the "CHOP PI") for the Agreement is Philip
     Johnson, M.D.


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     The "Project Directors" for the SUBAWARDEE will be Barrie J. Carter, PhD,
     and Pervin Anklesaria, PhD. The Project Directors will be responsible for
     the conduct of the work performed under this Agreement.

     The Project Directors are considered essential to the work to be performed.
     The Project Directors may not be replaced, on a temporary or permanent
     basis, without the SUBAWARDEE first providing CHOP with notice of such
     request reasonably in advance along with justification in sufficient detail
     to permit evaluation of the impact on the program and CHOP granting its
     prior written approval. Additionally, the Project Directors may not
     significantly reduce his/her effort without the prior written approval of
     CHOP; for purposes of this Agreement, a significant reduction of the
     Project Directors effort is a reduction of 25% or more compared to the
     effort described in ATTACHMENT B.

ARTICLE 4. FINANCIAL CONDITIONS

4.1  ESTIMATED COSTS.

     The total cost of this Agreement, including direct and facilities and
     administration costs, will not exceed $3,087,023. ATTACHMENT B, which is
     attached and made part of this Agreement, reflects the agreed-upon budget.

     Fixed fee payments will be distributed based on the contract milestones
     outlined in APPENDIX B. A fixed fee of $51,634 will be paid to SUBAWARDEE
     for each completed milestone. Total fixed fee funds currently available for
     payment and allotted to SUBAWARDEE shall not exceed $154,901 (up to 3
     milestones).

4.2  ALLOWABLE COSTS.

     Allowability of costs will be determined in accordance with the NIH Grants
     Policy Statement and with applicable Office Management and Budget (OMB)
     cost principles.

4.3  INVOICING.

     SUBAWARDEE will invoice CHOP no more frequently than monthly and no less
     frequently than quarterly for services performed under this Agreement.
     Invoices will be paid upon certification by the CHOP PI that the work has
     been completed. The final invoice should be marked as such and SUBAWARDEE
     should send the final invoice to CHOP no later than thirty (30) days from
     the expiration or termination of this Agreement. If the final invoice is
     received after that time, it may not be honored.

     Invoices should be prepared in triplicate and sent to the Director,
     Research Finance, The Joseph Stokes Jr. Research Institute of The
     Children's Hospital of Philadelphia, 3615 Civic Center Boulevard,
     Philadelphia, PA 19104-4318 using the format provided in ATTACHMENT C or
     other format containing the same information. Upon request, the SUBAWARDEE
     will furnish CHOP with any necessary documentation to support invoiced
     amounts.

     SUBAWARDEE assumes sole responsibility for reimbursement to CHOP of a sum
     of money equivalent to the amount of any expenditure disallowed (as defined
     by the applicable Federal Acquisition Regulation) should CHOP or NIH rule,
     through audit


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     exception or some other appropriate means, that any expenditure of funds
     allocated to the SUBAWARDEE was not made in compliance with the provisions
     of this Agreement.

ARTICLE 5. REPORTING REQUIREMENTS

5.1  FINANCIAL

     In addition to the final invoice, as specified in Section 4.3 above, the
     SUBAWARDEE will submit a financial report on Form NIH 2706 within thirty
     (30) days after the end of the performance period.

5.2  PROGRAMMATIC

     Reports of all programmatic findings related to the project will be sent to
     the CHOP PI when requested and in time to be included in annual or periodic
     reports and the final report to NIH. In general, this will follow Appendix
     A, flowdowns of the Prime Contract.

5.3  OTHER

     SUBAWARDEE will provide CHOP with documentation necessary to complete any
     additional reports required by NIH (such as human subject assurances,
     program income or invention statements).

ARTICLE 6. GENERAL CONDITIONS

     This Agreement will be administered in compliance with the provisions
     herein and the SUBAWARDEE agrees to comply with all applicable laws,
     regulations and policies pertaining to SUBAWARDEE's performance hereunder,
     including but not limited to the Contract, NIH Grants Policy Statement; 42
     C.F.R. Section 52 et seq; 45 C.F.R. Section 74 et seq.; 45 C.F.R. Section
     92 et seq. (as appropriate for the type of SUBAWARDEE and type of
     activity); and any other laws, regulations, or policies specifically
     referenced in this Agreement as they may be amended from time to time. The
     provisions of this Agreement may impose obligations on SUBAWARDEE in
     addition to those imposed by the Contract, NIH Grants Policy Statement and
     other applicable regulations.

ARTICLE 7. SPECIAL CONDITIONS

7.1  AWARD SPECIFIC TERMS AND CONDITIONS

     Subcontractor will comply with the terms and conditions, and Contract
     clauses identified as a flowdown from the Prime Contract (APPENDIX A) and
     Patent Rights Agreement (ATTACHMENT D).

7.2  INVENTIONS, PATENTS, COPYRIGHTS AND DATA

     Inventions: The determination of rights in ownership and disposition of
     inventions resulting from the performance of the Agreement and the
     administration of such patents will be in accordance with 37 CFR 401 and
     SUBAWARDEE agrees to comply with regulations regarding inventions as 37 CFR
     Part 401.


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     SUBAWARDEE will promptly disclose any inventions resulting from the
     performance of this Agreement to CHOP and will cooperate with CHOP in
     making required notifications to NIH/DHHS.

     Final Invention Report: SUBAWARDEE agrees to submit Final Invention
     Statement Form, HHS 568, to CHOP no later than sixty (60) days after the
     termination or expiration of this Agreement.

     Copyrights: Disposition of any copyrights or any copyrightable material
     will be determined by the policy of the SUBAWARDEE. Any such copyrighted
     materials are subject to a royalty-free, non-exclusive, and irrevocable
     license for the U.S. Government to reproduce, publish, or otherwise use the
     copyrighted material and to authorize others to do so for federal purposes.
     Copies of all copyrighted or copyrightable materials will be provided to
     the CHOP PI.

     Data: SUBAWARDEE will own the data it generates under this Agreement. For
     the purposes or activities related to the Agreement CHOP will have the
     right to receive copies of such data and use data for educational and
     research purposes subject to the terms of the Patent Rights Agreement
     (Attachment D). Additionally, SUBAWARDEE acknowledges the rights of the
     U.S. Government to use such data.

7.3  PUBLICATION AND ACKNOWLEDGMENT OF SUPPORT.

     SUBAWARDEE is encouraged to publish the results of its effort carried out
     pursuant to this Agreement. In so doing the SUBAWARDEE will comply with the
     NIH's policies that pertain to the title and disposition of Rights in Data,
     Publication and Copyrighting as such policies are set forth in the NIH
     Grants Policy Statement and in HHSAR 352.270-6. Publication policies are
     defined in Attachment D- Patent Rights Agreement. The SUBAWARDEE will
     provide an advance copy of every publication involving data associated with
     this agreement to the CHOP PI.

     All publications, reports and other materials resulting from the study will
     acknowledge NIH support and should use a statement to the effect:

     "The project described was supported by funds from The Children's Hospital
     of Philadelphia under contract number HHSN266200500008C from the National
     Institute of Health/Department of Health and Human Services and the content
     of the publication do not necessarily represent the views or policies of
     the DHHS or The Children's Hospital of Philadelphia," nor does mention of
     trade names, commercial products, or organizations imply endorsement by the
     U.S. Government.

     As required by Department of Health and Human Services ("DHHS")
     appropriations acts, all DHHS award recipients must acknowledge Federal
     funding when issuing statements, press releases, requests for proposals,
     bid invitations, and other documents describing projects or programs funded
     in whole or in part with Federal money. Grantees are required to state (1)
     the percentage and dollar amounts of the total program or project costs
     financed with Federal money and (2) the percentage and dollar amount of the
     total costs financed by nongovernmental sources.

7.4  PROGRAMMATIC AND BUDGETARY CHANGES


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     For all actions requiring NIH/DHHS prior approval, SUBAWARDEE must obtain
     prior written approval of CHOP. SUBAWARDEE agrees to provide CHOP with
     sufficient justification and supporting materials to support the requested
     change.

7.5  SALARY RATE LIMITATION

     SUBAWARDEE is subject to Public Law 108-447, which stipulates that no NIH
     fiscal year funds may be used to pay the direct salary of an individual
     through an award at a rate in excess of:

<TABLE>
<S>                                                      <C>
          FY 2005 (Executive Level I)
             January 1, 2005 through December 31, 2005   $180,100
</TABLE>

     (direct salary is exclusive of overhead, fringe benefits and facilities and
     administrative expenses.)

     The SUBAWARDEE shall include the following certification on every invoice
     for reimbursable costs incurred with Fiscal Year funds subject to the
     salary rate limitation provisions as specified in this Agreement. For
     billing purposes, certified invoices are required for the billing period
     during which the applicable Fiscal Year funds were initially charged
     through the final billing period utilizing the applicable Fiscal Year
     funds:

     "I hereby certify that the salaries charged in this invoice are in
     compliance with P.L. 108-447 and ARTICLE 7.5 of the above referenced
     Agreement."

ARTICLE 8. USE OF NAME

     CHOP and SUBAWARDEE each agree not to use the name of the other, or the
     name of any staff of the other, in news releases, commercial or
     non-commercial advertising or in other publications (with the exception of
     scholarly publications), without the prior written permission of a duly
     authorized officer of the other party and the affected individual (if any).

ARTICLE 9. AUDITS, INSPECTIONS AND RECORDS

     SUBAWARDEE will comply with the requirements of OMB Circular A-133 as
     implemented by 45 C.F.R. Section 74.26 and 45 C.F.R. Section 92.26, (or the
     audit requirements stated in 45 C.F.R. Section 74.26(d) for types of
     organizations to which OMB A-133 or other federal audit requirements does
     not directly apply), as applicable. SUBAWARDEE will submit a copy of its
     most recent financial compliance and audit report to the Director, Research
     Finance, The Joseph Stokes Jr. Research Institute of The Children's
     Hospital of Philadelphia, 3615 Civic Center Boulevard, Philadelphia, PA
     19104-4318.

     CHOP will have the right, at mutually agreeable times and upon reasonable
     notice, to inspect and review the progress of work conducted by the
     SUBAWARDEE hereunder, including the right to inspect SUBAWARDEE's
     facilities and records related to work conducted by SUBAWARDEE hereunder.


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     Financial records, supporting documents, research data and other records
     pertinent to this Agreement will be retained for a period of three (3)
     years from the date of submission of CHOP's final expenditure report to
     NIH. Records pertaining to audits, appeals, litigation or settlement of
     claims arising out of the performance of this Agreement will be retained
     until such audits, appeals or litigation or claims have been settled.

ARTICLE 10. LIABILITY

     The SUBAWARDEE's relationship to CHOP under this Agreement will be that of
     an Independent Contractor and not an agent, joint venturer, partner or
     employee of CHOP. As such an independent contractor, the SUBAWARDEE assumes
     risk and all responsibility for work conducted under this Agreement. The
     SUBAWARDEE will, during the course of this Agreement, maintain in force
     adequate insurance to cover risk or liability arising out of this work.

ARTICLE 11. TERMINATION

     This Agreement will immediately terminate upon receipt of written
     notification from CHOP to SUBAWARDEE that the Contract has been terminated
     by the funding agency or if CHOP does not approve a replacement Project
     Director as such approval is required by Article 3 above. Furthermore, CHOP
     may terminate this Agreement by giving notice in writing to SUBAWARDEE if
     SUBAWARDEE is in breach of this Agreement and has failed to cure such
     breach within thirty (30) days or within a mutually agreed upon cure
     period, of receipt of notice thereof from CHOP.

ARTICLE 12. CHANGES

     CHOP may from time to time request changes in the scope of the activities
     to be performed by the SUBAWARDEE as described in ATTACHMENT A, Statement
     of Work. Changes that are mutually agreed upon between the SUBAWARDEE and
     CHOP shall be incorporated into this Agreement via written amendment(s).

ARTICLE 13. NOTICE

     All notices required under this Agreement shall be in writing and sent to:

          To CHOP:

             Assistant Director, Research Services
             Office of Research Services and Project Development
             The Children's Hospital of Philadelphia
             The Joseph Stokes, Jr. Research Institute
             3615 Civic Center Boulevard
             Philadelphia, PA 19104-4318

             Tel: (215) 590-3800
             Fax: (215) 590-3804

             Notices regarding programmatic matters only should be sent to:

             Philip Johnson, M.D.


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             The Children's Hospital of Philadelphia
             The Joseph Stokes, Jr. Research Institute
             3615 Civic Center Boulevard
             Philadelphia, PA 19104-4318

          To SUBAWARDEE:

             Ralph W. Paul, Ph.D
             Director, Technology Evaluation
             Targeted Genetics Corporation
             1100 Olive Way, Suite 100
             Seattle, WA 98101

             Tel: (206) 521-7830
             Fax: (206) 521-7830

             With a copy sent to::

             Legal Department
             Targeted Genetics Corporation
             1100 Olive Way, Suite 100
             Seattle, WA 98101

ARTICLE 14. ASSIGNMENT

     This Agreement is for professional services. Neither party may assign,
     delegate or otherwise transfer any of its rights or obligations under this
     Agreement in whole or in part to another party without the express written
     consent of the non-assigning party.

     SUBAWARDEE agrees not to subcontract any of the research effort required
     under this Agreement without the prior written approval of CHOP.

ARTICLE 15. INDEMNIFICATION

15.1 INDEMNIFICATION BY SUBAWARDEE

     SUBAWARDEE will indemnify and hold harmless CHOP, its board members,
     officers, agents, servants and employees from and against any and all
     liability, loss, damage, claims, costs, actions, and suits, including
     costs, expenses, and attorneys' fees, arising out of, resulting from, or
     relating to, directly or indirectly, any action or inaction of the
     SUBAWARDEE under this Agreement.

15.2 INDEMNIFICATION BY CHOP

     CHOP will indemnify and hold harmless SUBAWARDEE, its board members,
     officers, agents, servants and employees from and against any and all
     liability, loss, damage, claims, costs, actions and suits, including costs,
     expenses, and attorneys' fees, arising out of, resulting from, or relating
     to, directly or indirectly, any action or inaction of CHOP under this
     Agreement.


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ARTICLE 16. ENTIRE AGREEMENT

     This Agreement constitutes the entire agreement and understanding between
     CHOP and SUBAWARDEE. It merges all prior discussions between the parties
     and neither party will be bound by conditions, definitions, warranties,
     understanding or representations concerning such subject matter except as
     provided in this Agreement. Any changes or modifications to this Agreement
     or to any attachment to this Agreement will be made in writing and executed
     by the duly authorized representatives of CHOP and SUBAWARDEE.

ARTICLE 17. ASSURANCES AND CERTIFICATIONS

17.1 GENERAL

     SUBAWARDEE will comply with all applicable Public Policy Requirements and
     Objectives as specifically described in the Contract and NIH Grants Policy
     Statement, which are hereby incorporated into this Agreement by reference.
     Furthermore, SUBAWARDEE represents, warrants and certifies that it has
     filed and will maintain all assurances or other documentation with the
     appropriate government agencies to the extent such assurances and
     documentation are required.

17.2 NON-DISCRIMINATION

     SUBAWARDEE certifies that the SUBAWARDEE is in compliance with the Civil
     Rights Act of 1964, the Age Discrimination Act of 1975, Title IX of the
     Education Amendments of 1972; the Rehabilitation Act of 1973; and the
     Americans With Disabilities Act and all implementing regulations.

17.3 DEBARMENT

     SUBAWARDEE does certify that neither SUBAWARDEE nor any of its employees or
     agents performing any service under this Agreement (including the
     SUBAWARDEE PI) are presently debarred, suspended, proposed for debarment,
     declared ineligible or voluntarily excluded from participation in this
     transaction, under investigation for a crime or otherwise engaged in
     conduct for which a person can be debarred by any federal agency, and
     SUBAWARDEE will immediately notify CHOP upon any inquiry concerning
     commencement of any such proceeding concerning SUBAWARDEE or such person
     referred to in this subparagraph.

17.4 FEDERAL DEBT

     SUBAWARDEE certifies that SUBAWARDEE is not delinquent on any Federal debt
     in accordance with OMB Circular No. A-129.

17.5 LOBBYING

     SUBAWARDEE certifies that no federally appropriated funds have been paid or
     will be paid to any person for influencing or attempting to influence an
     officer or employee of any agency, a Member of Congress, an officer or
     employee of Congress, or an employee of an Member of Congress in connection
     with this Agreement, and that if any funds other than federally
     appropriated funds have been paid or will be paid to any person for


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     influencing or attempting to influence an officer or employee of any
     agency, a Member of Congress, an officer or employee of Congress, or an
     employee of an Member of Congress in connection with this NIH Prime award,
     grant loan or cooperative agreement the SUBAWARDEE will complete and submit
     standard Form-LLL, "Disclosure Form to Report Lobbying."

17.6 PROTECTION OF HUMAN SUBJECTS

     The SUBAWARDEE will comply with all requirements relating to human subject
     protections as set forth at 45 C.F.R. Part 46 and 21 C.F.R. Part 50
     (Protection of Human Subjects).

     SUBAWARDEE agrees that it will obtain the approval of the appropriate
     external institutional review board (the "IRB") prior to conducting any
     studies involving human subjects and will comply with all IRB policies and
     requirements regarding such research. SUBAWARDEE will notify CHOP
     immediately if IRB approval of the study has to be revoked or suspended for
     any reason.

     SUBAWARDEE certifies that the cognizant IRB is in full compliance with all
     relevant federal regulations. SUBAWARDEE further agrees to notify CHOP
     immediately of any actions taken by the FDA or OHRP in relation to the IRB.

     Unanticipated events, drug reactions, or other reports of project activity
     that could assist CHOP and other subcontractors, if any, in protecting the
     health or safety of study subjects will be immediately reported to the CHOP
     PI, in addition to reporting to the extent required to the NIH and FDA, as
     applicable.

17.7 VERTEBRATE ANIMALS

     SUBAWARDEE will comply with all federal government, Public Health Service,
     and NIH requirements, policies, and guidelines relating to the humane care
     and use of laboratory animals including but not limited to The Animal
     Welfare Act as amended, at 7 U.S.C. Section 2131 et. seq., and comply with
     any local or state government laws, regulations or policies concerning such
     matters. In accordance with the applicable regulations, SUBAWARDEE agrees
     that any animal research protocol conducted under this Agreement will be
     reviewed and approved by SUBAWARDEE's Animal Care and Use Committee (IACUC)
     and certifies that this IACUC is in full compliance with all federal
     regulations and has an approved Assurance on file with DHHS.

17.8 USE OF RECOMBINANT DNA

     SUBAWARDEE agrees that, to the extent applicable, it will comply with the
     requirements of the NIH Guidelines for Research Involving Recombinant DNA
     Molecules (59 FR 34496, July 5, 1994) including establishing a standing
     Institutional Biosafety Committee.

17.9 MISCONDUCT IN SCIENCE

     SUBAWARDEE agrees to comply with regulations at 42 C.F.R. Part 50, Subpart
     A, "Responsibilities for PHS Awards and Applicant Institutions for Dealing
     with and Reporting Possible Misconduct in Science"; immediately notify CHOP
     if the conduct of


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     any employee or agent of SUBAWARDEE performing any service under this
     Agreement, including the SUBAWARDEE PI, is under investigation for
     misconduct in science; and keep CHOP fully informed about any such
     investigation to enable CHOP to meet its obligations under the NIH Grants
     Policy Statement.

17.10 OBJECTIVITY IN RESEARCH

     SUBAWARDEE will comply with all federal government, Public Health Service,
     and NIH requirements, policies, and guidelines relating to actual or
     potential conflicts of interest, including but not limited to the
     requirements of 42 C.F.R. Part 50, Subpart F, "Responsibility of Applicants
     for Promoting Objectivity in Research for which NIH Funding is Sought".
     Acceptance of this Agreement constitutes certification that SUBAWARDEE has
     implemented a written and enforced policy consistent with the above
     referenced policy and with any subsequent amendments to this policy.

17.11 DRUG-FREE WORKPLACE

     By signing this Agreement, the SUBAWARDEE assures that it is in compliance
     with the provisions of the Drug-Free Workplace Act of 1988 (45 CFR Part 76,
     Subpart F).

17.12 BIOTERRORISM PREPAREDNESS AND RESPONSE

     The SUBAWARDEE will comply with the Public Health Security and Bioterrorism
     Preparedness and Response Act of 2002 (P.L. 107-188).

17.13 USA PATRIOT ACT

     The SUBAWARDEE will comply with the Uniting and Strengthening America by
     Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
     Act (USA PATRIOT Act P.L. 107-56).

17.14 INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION

     The SUBAWARDEE will comply with the "Standards for Privacy of Individually
     Identifiable Health Information (45 C.F.R. 164 Subpart E)." This regulation
     under the Health Insurance Portability and Accountability Act (HIPAA) of
     1996 governs the protection of individually identifiable health
     information.

17.15 STEM CELL RESEARCH

     The SUBAWARDEE will comply with "Notice of Criteria for Federal Funding of
     Research on Existing Embryonic Stem Cells and Establishment of NIH
     Embryonic Stem Cell Registry" (NOT-OD-02-005; 11/07101) and the "NIH
     Guidelines for Research Using Human Pluripotent Stem Cells."

17.16 CHANGES

     SUBAWARDEE agrees to notify CHOP immediately if there is any change of
     status in any of the above.


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ARTICLE 18. ADDITIONAL DISCLOSURES

     In addition to all other reporting and notification requirements set forth
     in this Agreement, the SUBAWARDEE will immediately disclose to CHOP in
     writing each of the following:

     (a) The existence of any "Significant Financial Interests" as defined in 42
     C.F.R. Part 50, Subpart F, "Responsibility of Applicants for Promoting
     Objectivity in Research for which NIH Funding is Sought," that are required
     by such regulations to be reported to NIH, along with an explanation as to
     whether the identified Interest is being managed, reduced or eliminated by
     the SUBAWARDEE and any other information about the Interest that CHOP may
     reasonably request;

     (b) Formal findings of noncompliance with any law, regulation or other term
     or condition incorporated into the Agreement that could reasonably affect
     the awarding, administration, conduct, reliability or reporting of the
     results of the Prime Award;

     (c) Receipt of formal discovery requests, notices of suit or litigation or
     other formal adversary proceedings with respect to any aspect of the
     Agreement; and

     (d) Suspensions, disciplinary actions or other enforcement actions by an
     external agency or authority that concern any Investigator on the Agreement
     and are related to that Investigator's performance under the Agreement or
     the Agreement itself. For purposes of this Agreement, "Investigator" will
     be as defined in the federal regulations on "Responsibility of Applicants
     for Promoting Objectivity in Research for which PHS Funding is Sought"
     (Conflicts of Interest), at 42 C.F.R. Part 50, Subpart F.

ARTICLE 19. GOVERNING LAW

     This Agreement will be construed under the laws of Pennsylvania.

APPENDIX A and ATTACHMENT D are hereby incorporated as part of this subcontract.


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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.

For The Children's Hospital of             For Targeted Genetics Corporation
Philadelphia:                              SUBAWARDEE:

/s/ Sara Dubberly                            /s/ Barrie Carter
------------------------------------       ------------------------------------
Signature                                  Signature

Sara Dubberly                              Barrie Carter
Typed Name                                 Typed Name

Director, Sponsored Projects               Senior Executive Vice President and
Children's Hospital of Philadelphia        Chief Scientific Officer
The Joseph Stokes Jr. Research Institute   Targeted Genetics Corporation

------------------------------------       ------------------------------------
Title/Organization                         Title/Organization
Date 2/10/06                               Date 2/13/06


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<PAGE>

                                                 CHOP REFERENCE NO. 22852 -01-01

APPENDIX A - PRIME CONTRACT FLOWDOWNS

The Prime Contract clauses identified below are hereby incorporated by
reference. Furthermore, at a minimum, this Subcontract hereby incorporates by
reference any of those FAR and FAR Supplement clauses that are part of the Prime
Contract.

When any of the clauses incorporated herein by reference specify a period of
time within which the contractor is to provide any notice, information, or
document to the Government, the Subcontractor must provide any such notice,
information, or document to CHOP within a sufficiently shorter time in order to
provide CHOP a reasonable opportunity to consider the Subcontractor's material
and prepare its own submission before the Prime Contract deadline.

As used in the Prime Contract clauses that are incorporated herein by reference,
the term "contract" shall mean this Agreement, the terms "Government,"
"Contracting Officer," and the like shall mean CHOP, the term "Contractor" shall
mean the SUBAWARDEE.

PART I

SECTION A - SUPPLIES OR SERVICES AND PRICES/COSTS

ARTICLE A.1 PROVISIONS APPLICABLE TO DIRECT COSTS

a.   Items Unallowable Unless Otherwise Provided

     Notwithstanding the clauses, ALLOWABLE COST AND PAYMENT and FIXED FEE,
     incorporated in this contract, unless authorized in writing by the
     Contracting Officer, the costs of the following items or activities shall
     be unallowable as direct costs:

     (1)  Acquisition, by purchase or lease, of any interest in real property;

     (2)  Special rearrangement or alteration of facilities;

     (3)  Purchase or lease of ANY item of general purpose office furniture or
          office equipment regardless of dollar value. (General purpose
          equipment is defined as any items of personal property which are
          usable for purposes other than research, such as office equipment and
          furnishings, pocket calculators, etc.);

     (4)  Travel to attend general scientific meetings;

     (5)  Foreign travel - See Paragraph b.(2) below;

     (6)  Consultant costs;

     (7)  Subcontracts;

     (8)  Patient care costs;

     (9)  Accountable Government property (defined as both real and personal
          property with an acquisition cost of $1,000 or more and a life
          expectancy of more than two years) and "sensitive items" (defined and
          listed in the Contractor's Guide for Control of Government Property),
          1990, regardless of acquisition value.

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

b.   Travel Costs

     (1)  Domestic Travel

          (a)  Total expenditures for domestic travel (transportation, lodging,
               subsistence, and incidental expenses) incurred in direct
               performance of this contract shall not exceed $43,022 without the
               prior written approval of the Contracting Officer.

          (b)  The Contractor shall invoice and be reimbursed for all travel
               costs in accordance with Federal Acquisition Regulations (FAR)
               31.205-46.

     (2)  Foreign Travel

          Requests for foreign travel must be submitted at least six weeks in
          advance and shall contain the following: (a) meeting(s) and place(s)
          to be visited, with costs and dates; (b) name(s) and title(s) of
          Contractor personnel to travel and their functions in the contract
          project; (c) contract purposes to be served by the travel; (d) how
          travel of Contractor personnel will benefit and contribute to
          accomplishing the contract project, or will otherwise justify the
          expenditure of NIH contract funds; (e) how such advantages justify the
          costs for travel and absence from the project of more than one person
          if such are suggested; and (f) what additional functions may be
          performed by the travelers to accomplish other purposes of the
          contract and thus further benefit the project.

ARTICLE A.2. ADVANCE UNDERSTANDINGS

Other provisions of this contract notwithstanding, approval of the following
items within the limits set forth is hereby granted without further
authorization from the Contracting Officer.

a.   To negotiate a cost reimbursement type subcontract with Children's Hospital
     of Philadelphia for an amount not to exceed $18,902,433. Award of the
     subcontract shall not proceed without the prior written approval of the
     Contracting Officer upon review of the draft subcontract agreement. After
     written approval of the subcontract by the Contracting Officer, a copy of
     the signed, approved subcontract shall be provided to the Contracting
     Officer.

b.   To negotiate a cost reimbursement type lower tier subcontract with Targeted
     Genetics Corporation for an amount not to exceed $18,243,919. Award of the
     lower tier subcontract shall not proceed without the prior written approval
     of the Contracting Officer upon review of the draft subcontract agreement.
     After written approval of the subcontract by the Contracting Officer, a
     copy of the signed, approved lower tier subcontract shall be provided to
     the Contracting Officer.

c.   Targeted Genetics Corporation is authorized to bill indirect costs as
     follows for the period August 31, 2005 through August 30, 2010: Fringe
     Benefits of 13.02% of salaries and wages; Overhead of 100% of direct labor
     plus fringe benefits; and G&A of 14.93% of Direct Labor, Fringe Benefits,
     Overhead and Other Direct Costs.

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

     In no event shall the final amount reimbursable for Overhead for the
     Targeted Genetics Corporation exceed a ceiling of 100% of direct labor and
     fringe benefits.

d.   To negotiate fixed price type lower tier subcontracts with Targeted
     Genetics Corporation for the following amounts not to exceed:

          [*]   [*]   [*]
          [*]   [*]   [*]
          [*]   [*]   [*]
          [*]   [*]   [*]
          [*]   [*]   [*]
          [*]   [*]   [*]
          [*]   [*]   [*]
          [*]   [*]   [*]
          [*]   [*]   [*]

          Award of the lower tier subcontracts shall not proceed without the
          prior written approval of the Contracting Officer upon review of the
          draft subcontract agreements. After written approval of the
          subcontracts by the Contracting Officer, a copy of the signed,
          approved lower tier subcontracts shall be provided to the Contracting
          Officer.

e.   Invoices - Cost and Personnel Reporting, and Variances from the Negotiated
     Budget

     (1)  The Contractor agrees to provide a detailed breakdown on invoices of
          the following cost categories:

          (a)  Direct Labor - List individuals by name, title/position,
               hourly/annual rate, level of effort, and amount claimed.

          (b)  Fringe Benefits - Cite rate and amount.

          (c)  Overhead - Cite rate and amount.

          (d)  Materials & Supplies - Include detailed breakdown when total
               amount is over $1,000.

          (e)  Travel - Identify travelers, dates, destination, purpose of trip,
               and amount. Cite COA, if appropriate. List separately, domestic
               travel, general scientific meeting travel, and foreign travel.

                                            [*]CONFIDENTIAL TREATMENT REQUESTED.

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

          (f)  Subcontracts - Attach subcontractor invoice(s).

          (g)  Equipment - Cite authorization and amount.

          (h)  Other Direct Costs

          (i)  Patient Care Costs

          (j)  G&A - Cite rate and amount.

          (k)  Total Cost

          (l)  Fixed Fee

          (m)  Total CPFF

     Monthly invoices must include the cumulative total expenses to date,
     adjusted (as applicable) to show any amounts suspended by the Government.

     (2)  The Contractor agrees to immediately notify the Contracting Officer in
          writing if there is an anticipated overrun (any amount) or unexpended
          balance (greater than 10 percent) of the amount allotted to the
          contract, and the reasons for the variance. Also refer to the
          requirements of the Limitation of Funds and Limitation of Cost Clauses
          in the contract.

f.   Confidential Treatment of Sensitive Information

     The Contractor shall guarantee strict confidentiality of the
     information/data that it is provided by the Government during the
     performance of the contract. The Government has determined that the
     information/data that the Contractor will be provided during the
     performance of the contract is of a sensitive nature.

     Disclosure of the information/data, in whole or in part, by the Contractor
     can only be made after the Contractor receives prior written approval from
     the Contracting Officer. Whenever the Contractor is uncertain with regard
     to the proper handling of information/data under the contract, the
     Contractor shall obtain a written determination from the Contracting
     Officer,

g.   Contract Number Designation

     On all correspondence submitted under this contract, the Contractor agrees
     to clearly identify the two contract numbers that appear on the face page
     of the contract as follows:

          Contract No. HHSN266200500008C
          ADB Contract No. N01-AI-50008

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

h.   NIH NIAID DAIDS-contracted Audit of Production Facility

     The Contractor and all Subcontractors will be audited for GMP, GLP, and
     QC/QA capabilities within three months of contract award. Noted
     deficiencies shall be corrected (or addressed) within three months after
     issuance of the audit report.

i.   Contract Milestones

     The Contractor shall complete all work in accordance with the Statement of
     Work and the contract milestones set forth below. The distribution of the
     fixed fee shall be paid in installments based on the Project Officer's
     written certification regarding the completion of these milestones as
     follows:

<TABLE>
<CAPTION>
                              MILESTONES                                          FIXED FEE
                              ----------                                          ---------
<S>                                                                               <C>
                     Multi-gene HIV VRP Vaccine for Phase I
 1   Immunogenicity testing                                                        $38,028
 2   Selection of VRP construct and mfg process                                    $38,028
 3   Pass DAIDS-contracted GMP audit of production facility intended for use in   
     VRP production.                                                               $38,028 
 4   Submit clinical trial concept to HVTN                                         $38,028
 5   Prepare/submit pre-IND documents to CBER                                      $38,028
 6   Complete pilot lot production                                                 $38,028
 7   Technology transfer for GMP production                                        $38,028
 8   Pre-IND meeting                                                               $38,028
 9   Complete GMP production                                                       $38,028
10   Complete GMP immunogenicity testing                                           $38,028
11   Develop clinical trial protocol with HVTN                                     $38,028
12   Complete QC release testing for GMP product                                   $38,028
13   Complete pivotal toxicology study                                             $38,028
14   Prepare/submit IND                                                            $38,028
15   Complete Phase I clinical trial                                               $38,028

                     Multi-gene HIV VRP Vaccine for Phase II
</TABLE>

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

<TABLE>
<S>                                                                                <C>
16   Review and prepare summary of critical data                                   $38,028
17   Begin GMP production                                                          $38,028
18   Develop clinical trial protocol with HVTN                                     $38,028
19   Complete QC release testing for GMP product                                   $38,028
20   Prepare/submit IND amendment                                                  $38,028
21   Begin Phase II clinical trial                                                 $38,028
22   Review Phase II data                                                          $38,028
</TABLE>

SECTION B - DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

ARTICLE B.1. REPORTING REQUIREMENTS AND DELIVERABLES

The Contractor is required to formally report progress once per year, through
submission of a written Technical Report, and once by holding a formal Site
Visit review to be attended by appropriate NIAID contract staff and program
officials, and the External Advisory Committee of the Team. The Contractor is
also required to submit Goals and Milestones Achievement Reports during the
contract period at appropriate times. Distribution of written reports is listed
in Article E.1.

GOALS AND MILESTONES ACHIEVEMENT REPORTS. SINCE THE PAYMENT OF CONTRACT FEE
PORTIONS WILL BE TIED TO THE ACCOMPLISHMENT OF NEGOTIATED, PREDETERMINED GOALS
AND MILESTONES, THE CONTRACTOR WILL SUBMIT GOALS AND MILESTONES ACHIEVEMENT
REPORTS DURING THE CONTRACT PERIOD AS APPROPRIATE. THE ORIGINAL SHALL BE
SUBMITTED TO THE CONTRACTING OFFICER, AND TWO (2) COPIES (ONE HARD COPY AND A
COPY IN A DIGITAL MEDIUM) TO THE PROJECT OFFICER. EACH REPORT MUST CONSIST OF:

     1.   A COVER PAGE.

     2.   Reports shall include but not be limited to the following:

               Section A - An introduction covering the goal or milestone.

               Section B - A description of the results. Description shall
               include pertinent data and/or figures in sufficient detail to
               explain any significant results from analysis and scientific
               evaluation of data accumulated to date under the goal or
               milestone. When appropriate this report should detail specific
               requests and approvals for the conduct of human trials.

Clinical Trials Protocol(s). NIAID has a responsibility to ensure that
mechanisms and procedures are in place to protect the safety of participants in
NIAID-supported studies. Therefore, as described in the NIAID Clinical Terms of
Award and Guidance (http://www.niaid.nih.gov/ncn/clinical/default_human.htm),
the Contractor shall develop a protocol for each clinical trial and submit it
for approval by the NIAID Prevention

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

Science Review Committee (PSRC). Protocols should include a description of the
research design and protocol development including definition of objectives and
approaches, planning, implementation, participant recruitment and follow-up,
data collection, quality control, data and safety monitoring, final data
analysis and interpretation, and publication of results. Final approval of this
protocol must take place prior to participant enrollment. [For trials to be
conducted through the DAIDS-sponsored HVTN, the protocol should be developed in
conjunction with the HVTN.]

     Annual Technical Report. By the fifteenth working day of the twelfth month
     of each contract year, the Contractor shall submit Annual Technical
     Progress Reports as described below. The original shall be submitted to the
     Contracting Officer, and two (2) copies (one hard copy and one copy in a
     digital medium) to the Project Officer. The report should be factual and
     concise and consist of the following:

     1. A cover page.

     2. Reports shall include, but not be limited to the following:

          Section A - An introduction covering the purpose and scope of the
          contract effort.

          Section B - A description of overall progress plus a separate
          description for each task or other logical segment of work on which
          effort was expended during the reporting period. The description shall
          include pertinent data and/or figures in sufficient detail to explain
          any significant results from analysis and scientific evaluation of
          data accumulated to date under the project. Special emphasis shall be
          placed on goals or milestones that were reached, or problems that were
          encountered that prevented reaching a scheduled goal or milestone
          during the reporting period and how those problems were/will be
          addressed, and requests and approvals to conduct human trials.

          Section C - A summary of the proposed goals and milestones for the
          duration of the contract, including any proposed revisions based on
          results generated to date.

Annual Site Visit Review and Report. At the middle (6 month mark) of each
contract year, the Contractor shall host, for NIAID contract and program staff
and their External Advisory Board, a site visit review. The Contractor's
Principal Investigator and all Co-investigators shall attend this meeting. An
update and summary of results generated on each sub-project shall be presented
by the co-investigator and/or other pertinent staff. These presentations shall
include summaries of all goals or milestones reached during the review period
and include a description of all problems encountered that will impact the
achievement of particular goals and milestones as outlined in the Contractor's
research plan. The Principal Investigator, Co-investigator and staff
representing each project and sub-project shall describe goals and milestones
and development objectives for the coming year. Additionally, application of the
policies and procedures for monitoring the direction of specific projects shall
be presented. For Contractors with foreign subcontracts, this annual site visit
will also report details about approvals for manufacturing or testing that have
been obtained from both the U.S. and foreign governments. A report of the plan
for, and results of, this site visit shall be prepared by

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

the Contractor and submitted to the Project Officer (in hard copy and digital
medium) and the Contracting Officer (original hard copy).

Final Technical Report. The Contractor shall submit the final report documents,
two (2) copies (one hard copy and one copy in a digital medium) to the Project
Officer, and the original to the Contracting Officer, which shall summarize the
results of the entire contract work for the complete performance period, and
shall include the specifications of the optimized AIDS vaccine product developed
during the course of this contract. These specifications shall include: 1) the
identity of the vaccine strain or strains in the final product, 2) a detailed
description of the manipulations used in the vaccine design, 3) a detailed
description of all processes used to expand, attenuate, inactivate, or purify
the final vaccine product, 4) a detailed description of any adjuvants or other
potentiating agents used in the delivery of the final optimized product, 5) a
detailed description of the suggested immunization schedule to be used for
optimal reactivity in humans, and 6) evidence that the vaccine product can be
manufactured under GMP/GLP conditions for use in human vaccine trials. In
addition, the Contractor shall indicate whether any INDs were filed in relation
to vaccine products developed during the course of the contract, and provide a
description of the IND and the results of the filings. For Contractors with
foreign subcontracts, this report shall include details concerning approvals for
manufacturing or testing that have been obtained for or by the foreign
subcontractors. The final report shall be submitted by the completion date of
the contract.

Deliverables. The Contractor shall submit samples of candidate HIV/AIDS
vaccines, as well as selected plasma/cell samples from preclinical animal
immunogenicity studies of candidate HIV/AIDS vaccines, prior to GMP manufacture,
for testing in DAIDS-sponsored core laboratories. Contractors may also be asked
to provide samples of GMP vaccine product for similar analyses in conjunction
with clinical trials.

ARTICLE B.2. INVENTION REPORTING REQUIREMENT

All reports and documentation required by FAR Clause 52.227-11 including, but
not limited to, the invention disclosure report, the confirmatory license, and
the government support certification, shall be directed to the Extramural
Inventions and Technology Resources Branch, OPERA, NIH, 6705 Rockledge Drive,
Room 1040 A, MSC 7980, Bethesda, Maryland 20892-7980 (Telephone: 301-435-1986).
In addition, one copy of an annual utilization report, and a copy of the final
invention statement, shall be submitted to the Contracting Officer. The final
invention statement (see FAR 27.303(a)(2)(ii)) shall be submitted to the
Contracting Officer within 90 days after the expiration date of the contract to
the following address:

     Contracting Officer
     National Institutes of Health
     National Institute of Allergy and Infectious Diseases, CMP
     6700-B Rockledge Drive, Room 3214, MSC 7612
     Bethesda, Maryland 20892 -7612

If no invention is disclosed or no activity has occurred on a previously
disclosed invention during the applicable reporting period, a negative report
shall be submitted to the Contracting Officer at the address listed above.

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

To assist Contractors in complying with invention reporting requirements of the
clause, the NIH has developed "Interagency Edison," an electronic invention
reporting system. Use of Interagency Edison is encouraged as it streamlines the
reporting process and greatly reduces paperwork. Access to the system is through
a secure interactive Web site to ensure that all information submitted is
protected. Interagency Edison and information relating to the capabilities of
the system can be obtained from the Web (http://www.iedison.gov), or by
contacting the Extramural Inventions and Technology Resources Branch, OPERA,
NIH.

SECTION C - PACKAGING, MARKING AND SHIPPING

All deliverables required under this contract shall be packaged, marked and
shipped in accordance with Government specifications. At a minimum, all
deliverables shall be marked with the contract number and contractor name. The
Contractor shall guarantee that all required materials shall be delivered in
immediate usable and acceptable condition.

SECTION D - INSPECTION AND ACCEPTANCE

a.   The Contracting Officer or the duly authorized representative will perform
     inspection and acceptance of materials and services to be provided.

b.   For the purpose of this SECTION, the Project Officer is the authorized
     representative of the Contracting Officer.

c.   Inspection and acceptance will be performed at the address listed in
     Article G.1.

     Acceptance may be presumed unless otherwise indicated in writing by the
     Contracting Officer or the duly authorized representative within 30 days of
     receipt.

d.   This contract incorporates the following clause by reference, with the same
     force and effect as if it were given in full text. Upon request, the
     Contracting Officer will make its full text available.

     FAR Clause No. 52.246-9, INSPECTION OF RESEARCH AND DEVELOPMENT (SHORT
     FORM) (APRIL 1984).

SECTION E - DELIVERIES OR PERFORMANCE

ARTICLE E.1. DELIVERIES

Satisfactory performance of the final contract shall be deemed to occur upon
performance of the work described in Attachment A and upon delivery and
acceptance by the Contracting Officer, or the duly authorized representative, of
the following items in accordance with the stated delivery schedule:

a.   The items specified below as described in SECTION B, ARTICLE B.1 will be
     required to be delivered F.O.B. Destination as set forth in FAR 52.247-35,
     F.O.B. DESTINATION, WITHIN CONSIGNEES PREMISES (APRIL 1984), and in
     accordance with and by the dates specified below:

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

<TABLE>
<CAPTION>
Item                 Description                        Delivery Schedule
----                 -----------                        -----------------
<S>    <C>                                       <C>
  1    Goals and Milestones Achievement Report   As required by the Project Officer
  2    Clinical Trials Protocol(s)               As required by the Project Officer
  3    Annual Technical Report                   15th day of the twelfth month of each
                                                 contract year
  4    Annual Site Visit Review and Report       6th month of each contract year
  5    Final Technical Report                    On or before contract expiration
</TABLE>

b.   The above items shall be addressed and delivered to:

<TABLE>
<CAPTION>
Addressee                                  Deliverable Item               Quantity
---------                                  ----------------               --------
<S>                             <C>                                       <C>
Contracting Office              Goals and Milestones Achievement Report        --
CMP, NIAID, NIH                 Clinical Trials Protocol(s)                    --
Room 3214, MSC 7612             Annual Technical Report                    1 Copy
6700-B Rockledge Drive          Annual Site Visit Review and Report        1 Copy
Bethesda, MD 20892-7612         Final Technical Report                     1 Copy

Project Officer                 Goals and Milestones Achievement Report    1 Copy*
Vaccine & Prevention Research   Clinical Trials Protocol(s)                1 Copy*
Program                         Annual Technical Report                    1 Copy*
Division of AIDS, NIAID, NIH    Annual Site Visit Review                   1 Copy*
Room 5136, MSC 7628             Final Technical Report                     1 Copy*
6700-B Rockledge Drive
Bethesda, MD 20892-7628
</TABLE>

*    Plus one copy on 3.5 inch, high density computer diskette or other digital
     medium approved by the Project Officer.

ARTICLE E.2. CLAUSES INCORPORATED BY REFERENCE, FAR 52.252-2 (FEBRUARY 1998)

This contract incorporates the following clause by reference, with the sane
force and effect as if it were given in full text. Upon request, the Contracting
Officer will make its full text available. Also, the full text of a clause may
be accessed electronically at this address: http://www.arnet.gov/far/.

FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSE:

     52.242-15, Stop Work Order (AUGUST 1989) with ALTERNATE I (APRIL 1984).

SECTION F - CONTRACT ADMINISTRATION DATA

ARTICLE F.1 PROJECT OFFICER

The following Project Officer will represent the Government for the purpose of
this contract:

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

     Michael N. Pensiero, Ph.D.  Product Development Team Leader
     Preclinical Research and Development Branch Vaccine and Prevention Research
     Program Division of AIDS, NAID, NIH, DHHS Room 5136, MSC 7628 6700-B
     Rockledge Drive Bethesda, MD 20892-7628
     Phone: (301) 435-3749 Fax: (301) 402-3684
     Email: mpensiero@niaid.nih.gov

The Project Officer is responsible for: (1) monitoring the Contractor's
technical progress, including the surveillance and assessment of performance and
recommending to the Contracting Officer changes in requirements; (2)
interpreting the Statement of Work and any other technical performance
requirements; (3) performing technical evaluation as required; (4) performing
technical inspections and acceptances required by this contract; and (5)
assisting in the resolution of technical problems encountered during
performance.

The Contracting Officer is the only person with authority to act as agent of the
Government under this contract. Only the Contracting Officer has authority to:
(1) direct or negotiate any changes in the Statement of Work; (2) modify or
extend the period of performance; (3) change the delivery schedule; (4)
authorize reimbursement to the Contractor any costs incurred during the
performance of this contract; or (5) otherwise change any terms and conditions
of this contract.

The Contracting Officer hereby delegates the Project Officer as the Contracting
Officer's authorized representative responsible for signing software license
agreements issued as a result of this contract.

The Government may unilaterally change its Project Officer designation.

ARTICLE F2. KEY PERSONNEL

Pursuant to the Key Personnel clause incorporated in Section I of this contract,
the following individuals are considered to be essential to the work being
performed hereunder:

<TABLE>
<CAPTION>
          NAME                                    TITLE
          ----                                    -----
<S>                        <C>
Philip Johnson, M.D.       Principal Investigator (Children's Hospital of
                           Philadelphia)
K. Reed Clark, Ph.D.       Co- Principal Investigator (Children's Research
                           Institute)
Barrie Carter, Ph. D.      Co-Investigator (Targeted Genetics)
Pervin Anklesaria, Ph.D.   Co-Investigator (Targeted Genetics)
</TABLE>

ARTICLE F.3. GOVERNMENT PROPERTY

a.   In addition to the requirements of the clause, GOVERNMENT PROPERTY,
     incorporated in SECTION I of this contract, the Contractor shall comply
     with the provisions of DHHS Publication, Contractor's Guide for Control of
     Government Property, 1990, which is incorporated into this contract by
     reference. Among other issues, this publication provides a summary of the
     Contractor's responsibilities regarding purchasing authorizations and
     inventory and reporting requirements under the contract.

<PAGE>

APPENDIX A - PRIME CONTRACT FLOWDOWNS            CHOP REFERENCE NO. 22852 -01-01

     A copy of this publication is available upon request to the Contracts
     Property Administrator.

     Requests for information regarding property under this contract should be
     directed to the following office:

     Division of Personal Property Services, NIH
     6011 Building, Suite 637
     6011 EXECUTIVE BLVD MSC 7670
     BETHESDA MD 20852-7670
     (301) 496-6466

b.   Notwithstanding the provisions outlined in the DHHS Publication,
     CONTRACTOR'S GUIDE FOR CONTROL OF GOVERNMENT PROPERTY, 1990 which is
     incorporated in this contract in paragraph a. above, the Contractor shall
     use the form entitled, "Report of Government Owned, Contractor Held
     Property" for performing annual inventories required under this contract.
     This form is included as an attachment in SECTION J of this contract.

c.