Document:

EX 4.01

    EXHIBIT
      4.01

    

    This
      Note
      is a Global Security within the meaning of the Indenture hereinafter referred
      to
      and is registered in the name of the Depository named below or a nominee of
      the
      Depository. This Note is not exchangeable for Notes registered in the name
      of a
      Person other than the Depository or its nominee except in the limited
      circumstances described herein and in the Indenture, and no transfer of this
      Note (other than a transfer of this Note as a whole by the Depository to a
      nominee of the Depository or by a nominee of the Depository to the Depository
      or
      another nominee of the Depository) may be registered except in the limited
      circumstances described herein.

    

    Unless
      this certificate is presented by an authorized representative of The Depository
      Trust Company, a New York corporation (the "Depository"), to the Company or
      its
      agent for registration of transfer, exchange, or payment, and any certificate
      issued is registered in the name of Cede & Co. or in such other name as is
      requested by an authorized representative of the Depository (and any payment
      is
      made to Cede & Co. or to such other entity as is requested by an authorized
      representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
      FOR
      VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
      owner hereof, Cede & Co., has an interest herein.

     

    CITIGROUP
      INC.

    5.10%
      Notes due September 29, 2011

    
      	
              REGISTERED

            	
              REGISTERED

            

    

    

    CUSIP:
      172967 DU 2

    ISIN:
      US172967DU25

    Common
      Code: 026993709

    

    
      	
              No.
                R-____

            	
              $_________________

            

    

    

    CITIGROUP
      INC., a Delaware corporation (the "Company", which term includes any successor
      Person under the Indenture), for value received, hereby promises to pay to
      Cede
& Co., or registered assigns, the principal sum of $___________ on September
      29, 2011 and to pay interest thereon from and including September 29, 2006
      or
      from the most recent Interest Payment Date to which interest has been paid
      or
      duly provided for, semi-annually, on March 29 and September 29 of each year,
      commencing March 29, 2007, at the rate of 5.10% per annum, until the principal
      hereof is paid or made available for payment. The interest so payable, and
      punctually paid or duly provided for, on any Interest Payment Date will, as
      provided in the Indenture, be paid to the Person in whose name this Note is
      registered at the close of business on the Record Date for such interest, which
      shall be the March 15 and September 15 (whether or not a Business Day)
      immediately preceding such Interest Payment Date.

    
      
         

      

      
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    Any
      such
      interest not so punctually paid or duly provided for will forthwith cease to
      be
      payable to the holder on such Record Date and may either be paid to the Person
      in whose name this Note is registered at the close of business on a subsequent
      Record Date, such subsequent Record Date to be not less than five days prior
      to
      the date of payment of such defaulted interest, notice whereof shall be given
      to
      holders of Notes of this series not less than 15 days prior to such subsequent
      Record Date, or be paid at any time in any other lawful manner not inconsistent
      with the requirements of any securities exchange on which the Notes of this
      series may be listed, and upon such notice as may be required by such exchange,
      all as more fully provided in the Indenture.

     

    Interest
      hereon will be calculated on the basis of a 360-day year comprised of twelve
      30-day months.

     

    If
      either
      an Interest Payment Date or the Maturity of the Notes falls on a day that is
      not
      a Business Day, such Interest Payment Date or Maturity will be the next
      succeeding Business Day. If a date for payment of interest or principal on
      the
      Notes falls on a day that is not a business day in the place of payment, such
      payment will be made on the next succeeding business day in such place of
      payment as if made on the date the payment was due. No interest will accrue
      on
      any amounts payable for the period from and after the due date for payment
      of
      such principal or interest. 

     

    For
      these
      purposes, “Business Day” means any day which is a day on which commercial banks
      settle payments and are open for general business in The City of New
      York.

     

    Payment
      of the principal of and interest on this Note will be made at the office or
      agency of the Trustee maintained for that purpose in The City of New
      York.

     

    Reference
      is hereby made to the further provisions of this Note set forth on the reverse
      hereof, which further provisions shall for all purposes have the same effect
      as
      if set forth at this place.

     

    Unless
      the certificate of authentication hereon has been executed by the Trustee or
      by
      an authenticating agent on behalf of the Trustee by manual signature, this
      Note
      shall not be entitled to any benefit under the Indenture or be valid or
      obligatory for any purpose.

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly executed
      under its corporate seal.

    

    Dated:
      November 7, 2006

    

    CITIGROUP
      INC.

     

     

    By:_________________________________

    Title:
      Chief Financial Officer

    

    

    

    ATTEST:

    

    By:___________________________

    Title:
      Assistant Secretary

    
      
         

      

      
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    This
      is
      one of the Notes of the series issued under the within-mentioned
      Indenture.

    

    Dated:
      November 7, 2006

    

    THE
      BANK
      OF NEW YORK,

    as
      Trustee

     

    By:_________________________________

    Name:

    Title:

     

     

    -or-

     

     

    CITIBANK,
      N.A.,

    as
      Authenticating Agent

     

    By:_________________________________

    Name:

    Title:

    
      
         

      

      
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    This
      Note
      is one of a duly authorized issue of Securities of the Company (the "Notes"),
      issued and to be issued in one or more series under the Indenture, dated as
      of
      March 15, 1987 (as amended and supplemented to date, the "Indenture"), between
      the Company and The Bank of New York, as Trustee (the "Trustee", which term
      includes any successor trustee under the Indenture), to which Indenture and
      all
      indentures supplemental thereto reference is hereby made for a statement of
      the
      respective rights, limitations of rights, duties and immunities thereunder
      of
      the Company, the Trustee and the holders of the Notes and of the terms upon
      which the Notes are, and are to be, authenticated and delivered. This Note
      is
      one of the series designated on the face hereof, initially issued in the
      aggregate principal amount of $1,000,000,000 and hereby increased to
      $1,100,000,000.

    

    If
      an
      event of default (as defined in the Indenture) with respect to Notes of this
      series shall occur and be continuing, the principal of the Notes of this series
      may be declared due and payable in the manner and with the effect provided
      in
      the Indenture.

    

    The
      Indenture contains provisions for defeasance at any time of the entire
      indebtedness of this Note upon compliance by the Company with certain conditions
      set forth in Sections 11.03 and 11.04 thereof, which provisions apply to this
      Note.

    

    The
      Indenture contains provisions permitting the Company and the Trustee, without
      the consent of the holders of the Securities, to establish, among other things,
      the form and terms of any series of Securities issuable thereunder by one or
      more supplemental indentures, and, with the consent of the holders of not less
      than 66 2/3% in aggregate principal amount of Securities at the time outstanding
      which are affected thereby, to modify the Indenture or any supplemental
      indenture or the rights of the holders of Securities of such series to be
      affected, provided that no such modification will (i) extend the fixed maturity
      of any Securities, reduce the rate or extend the time of payment of interest
      thereon, reduce the principal amount thereof or the premium, if any, thereon,
      reduce the amount of the principal of Original Issue Discount Securities payable
      on any date, change the currency in which Securities are payable, or impair
      the
      right to institute suit for the enforcement of any such payment on or after
      the
      maturity thereof, without the consent of the holder of each Security so
      affected, or (ii) reduce the aforesaid percentage of Securities of any series
      the consent of the holders of which is required for any such modification
      without the consent of the holders of all Securities of such series then
      outstanding, or (iii) modify, without the written consent of the Trustee, the
      rights, duties or immunities of the Trustee.

    

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture shall alter or impair the obligation of the Company, which is absolute
      and unconditional, to pay the principal of and interest on this Note at the
      times, place and rate, and in the coin or currency, herein
      prescribed.

    

    This
      Note
      is a Global Security registered in the name of a nominee of the Depository.
      This
      Note is exchangeable for Notes registered in the name of a person other than
      the
      Depository or its nominee only in the limited circumstances hereinafter
      described. Unless and until it is exchanged in whole or in part for definitive
      Notes in certificated form, this Note may not be

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    transferred
      except as a whole by the Depository to a nominee of the Depository or by a
      nominee of the Depository to the Depository or another nominee of the
      Depository.

    

    The
      Notes
      represented by this Global Security are exchangeable for definitive Notes in
      certificated form of like tenor as such Notes in denominations of $1,000 and
      whole multiples of $1,000 in excess thereof only if (i) the Depository
      notifies the Company that it is unwilling or unable to continue as Depository
      for the Notes or (ii) the Depository ceases to be a clearing agency registered
      under the Securities Exchange Act of 1934, as amended, or (iii) the Company
      in
      its sole discretion decides to allow the Notes to be exchanged for definitive
      Notes in registered form. Any Notes that are exchangeable pursuant to the
      preceding sentence are exchangeable for certificated Notes issuable in
      authorized denominations and registered in such names as the Depository shall
      direct. As provided in the Indenture and subject to certain limitations therein
      set forth, the transfer of definitive Notes in certificated form is registrable
      in the register maintained by the Company in The City of New York for such
      purpose, upon surrender of the definitive Note for registration of transfer
      at
      the office or agency of the registrar, duly endorsed by, or accompanied by
      a
      written instrument of transfer in form satisfactory to the Company and the
      registrar duly executed by, the holder thereof or his attorney duly authorized
      in writing, and thereupon one or more new Notes of this series and of like
      tenor, of authorized denominations and for the same aggregate principal amount,
      will be issued to the designated transferee or transferees. Subject to the
      foregoing, this Note is not exchangeable, except for a Global Security or Global
      Securities of this issue of the same principal amount to be registered in the
      name of the Depository or its nominee.

    

    No
      service charge shall be made for any such registration of transfer or exchange,
      but the Company may require payment of a sum sufficient to cover any tax or
      other governmental charge payable in connection therewith.

    

    Prior
      to
      due presentment of this Note for registration of transfer, the Company, the
      Trustee and any agent of the Company or the Trustee may treat the Person in
      whose name this Note is registered as the owner hereof for all purposes, whether
      or not this Note be overdue, and neither the Company, the Trustee nor any such
      agent shall be affected by notice to the contrary.

    

    The
      Company will pay additional amounts ("Additional Amounts") to the beneficial
      owner of any Note that is a non-United States person in order to ensure that
      every net payment on such Note will not be less, due to payment of U.S.
      withholding tax, than the amount then due and payable. For this purpose, a
      "net
      payment" on a Note means a payment by the Company or a paying agent, including
      payment of principal and interest, after deduction for any present or future
      tax, assessment or other governmental charge of the United States. These
      Additional Amounts will constitute additional interest on the Note.

    

    The
      Company will not be required to pay Additional Amounts, however, in any of
      the
      circumstances described in items (1) through (13) below.

    
      
         

      

      
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            	(1)	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the beneficial
                owner:

            

    

    

    
      	 	 	
              (a)

            	
              having
                a relationship with the United States as a citizen, resident or
                otherwise;

            

    

    
      	 	 	
              (b)

            	
              having
                had such a relationship in the past
                or

            

    

    
      	 	 	
              (c)

            	
              being
                considered as having had such a
                relationship.

            

    

    

    
      	 	
              (2)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the beneficial
                owner:

            

    

    

    
      	 	
               

            	
              (a)

            	
              being
                treated as present in or engaged in a trade or business in the United
                States;

            

    

    
      	 	
               

            	
              (b)

            	
              being
                treated as having been present in or engaged in a trade or business
                in the
                United States in the past or

            

    

    
      	 	
               

            	
              (c)

            	
              having
                or having had a permanent establishment in the United
                States.

            

    

    

    
      	 	
              (3)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld in whole or in part by reason of the beneficial owner being
                or
                having been any of the following (as such terms are defined in the
                Internal Revenue Code of 1986, as
                amended):

            

    

    

    
      	 	
               

            	
              (a)

            	
              personal
                holding company;

            

    

    
      	 	
               

            	
              (b)

            	
              foreign
                personal holding company;

            

    

    
      	 	
               

            	
              (c)

            	
              foreign
                private foundation or other foreign tax-exempt
                organization;

            

    

    
      	 	
               

            	
              (d)

            	
              passive
                foreign investment company;

            

    

    
      	 	
               

            	
              (e)

            	
              controlled
                foreign corporation or

            

    

    
      	 	
               

            	
              (f)

            	
              corporation
                which has accumulated earnings to avoid United States federal income
                tax.

            

    

    

    
      	 	
              (4)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the beneficial owner owning or having
                owned,
                actually or constructively, 10 percent or more of the total combined
                voting power of all classes of stock of the Company entitled to vote
                or by
                reason of the beneficial owner being a bank that has invested in
                a Note as
                an extension of credit in the ordinary course of its trade or
                business.

            

    

    

    For
      purposes of items (1) through (4) above, "beneficial owner" means a
      fiduciary, settlor, beneficiary, member or shareholder of the holder if the
      holder is an estate, trust, partnership, limited liability company, corporation
      or other entity, or a person holding a power over an estate or trust
      administered by a fiduciary holder.

    
      
         

      

      
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              (5)

            	
              Additional
                Amounts will not be payable to any beneficial owner of a Note that
                is
                a:

            

    

    

    
      	 	
               

            	
              (a)

            	
              fiduciary;

            

    

    
      	 	
               

            	
              (b)

            	
              partnership;

            

    

    
      	 	
               

            	
              (c)

            	
              limited
                liability company or

            

    

    
      	 	
               

            	
              (d)

            	
              other
                fiscally transparent entity

            

    

    

    
      	 	 	
              or
                that is not the sole beneficial owner of the Note, or any portion
                of the
                Note. However, this exception to the obligation to pay Additional
                Amounts
                will only apply to the extent that a beneficiary or settlor in relation
                to
                the fiduciary, or a beneficial owner or member of the partnership,
                limited
                liability company or other fiscally transparent entity, would not
                have
                been entitled to the payment of an Additional Amount had the beneficiary,
                settlor, beneficial owner or member received directly its beneficial
                or
                distributive share of the payment.

            

    

    

    
      	 	
              (6)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld solely by reason of the failure of the beneficial owner
                or any
                other person to comply with applicable certification, identification,
                documentation or other information reporting requirements. This exception
                to the obligation to pay Additional Amounts will only apply if compliance
                with such reporting requirements is required by statute or regulation
                of
                the United States or by an applicable income tax treaty to which
                the
                United States is a party as a precondition to exemption from such
                tax,
                assessment or other governmental
                charge.

            

    

    

    
      	 	
              (7)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is collected
                or
                imposed by any method other than by withholding from a payment on
                a Note
                by the Company or a paying agent.

            

    

    

    
      	 	
              (8)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld by reason of a change in law, regulation, or administrative
                or
                judicial interpretation that becomes effective more than 15 days
                after the
                payment becomes due or is duly provided for, whichever occurs
                later.

            

    

    

    
      	 	
              (9)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is imposed
                or
                withheld by reason of the presentation by the beneficial owner of
                a Note
                for payment more than 30 days after the date on which such payment
                becomes due or is duly provided for, whichever occurs
                later.

            

    

    

    
      	 	
              (10)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any:

            

    

     

    
      
         

      

      
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              (a)

            	
              estate
                tax;

            

    

    
      	 	
               

            	
              (b)

            	
              inheritance
                tax;

            

    

    
      	 	
               

            	
              (c)

            	
              gift
                tax;

            

    

    
      	 	
               

            	
              (d)

            	
              sales
                tax;

            

    

    
      	 	
               

            	
              (e)

            	
              excise
                tax;

            

    

    
      	 	
               

            	
              (f)

            	
              transfer
                tax;

            

    

    
      	 	
               

            	
              (g)

            	
              wealth
                tax;

            

    

    
      	 	
               

            	
              (h)

            	
              personal
                property tax or

            

    

    
      	 	
               

            	
              (i)

            	
              any
                similar tax, assessment, withholding, deduction or other governmental
                charge.

            

    

    

    
      	 	
              (11)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment, or other governmental charge required to
                be
                withheld by any paying agent from a payment of principal or interest
                on a
                Note if such payment can be made without such withholding by any
                other
                paying agent.

            

    

    

    
      	 	
              (12)

            	
              Additional
                amounts will not be payable if a payment on a Note is reduced as
                a result
                of any tax, assessment or other governmental charge that is required
                to be
                made pursuant to any European Union directive on the taxation of
                savings
                income or any law implementing or complying with, or introduced to
                conform
                to, any such directive.

            

    

    

    
      	 	
              (13)

            	
              Additional
                Amounts will not be payable if a payment on a Note is reduced as
                a result
                of any combination of items (1) through (12)
                above.

            

    

    

    Except
      as
      specifically provided herein, the Company will not be required to make any
      payment of any tax, assessment or other governmental charge imposed by any
      government or a political subdivision or taxing authority of such
      government.

    

    As
      used
      in this Note, "United States person" means:

    

    
      	 	
              (a)

            	
              any
                individual who is a citizen or resident of the United
                States;

            

    

    
      	 	
              (b)

            	
              any
                corporation, partnership or other entity created or organized in
                or under
                the laws of the United States;

            

    

    
      	 	
              (c)

            	
              any
                estate if the income of such estate falls within the federal income
                tax
                jurisdiction of the United States regardless of the source of such
                income
                and

            

    

    
      	 	
              (d)

            	
              any
                trust if a United States court is able to exercise primary supervision
                over its administration and one or more United States persons have
                the
                authority to control all of the substantial decisions of the
                trust.

            

    

    

    Additionally,
      "non-United States person" means a person who is not a United States person,
      and
      "United States" means the states of the United States of America and the
      District of Columbia, but excluding its territories and its
      possessions.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    Except
      as
      provided below, the Notes may not be redeemed prior to maturity.

     

    
      	
            	(1)	
              The
                Company may, at its option, redeem the Notes
                if:

            

    

    

    
      	 	 	
              (a)

            	
              the
                Company becomes or will become obligated to pay Additional Amounts
                as
                described above;

            

    

    
      	 	 	
              (b)

            	
              the
                obligation to pay Additional Amounts arises as a result of any change
                in
                the laws, regulations or rulings of the United States, or an official
                position regarding the application or interpretation of such laws,
                regulations or rulings, which change is announced or becomes effective
                on
                or after September 26, 2006 and

            

    

    
      	 	 	
              (c)

            	
              the
                Company determines, in its business judgment, that the obligation
                to pay
                such Additional Amounts cannot be avoided by the use of reasonable
                measures available to it, other than substituting the obligor under
                the
                Notes or taking any action that would entail a material cost to the
                Company.

            

    

    

    
      	 	
              (2)

            	
              The
                Company may also redeem the Notes, at its option,
                if:

            

    

    

    
      	 	 	
              (a)

            	
              any
                act is taken by a taxing authority of the United States on or after
                September 26, 2006, whether or not such act is taken in relation
                to the
                Company or any affiliate, that results in a substantial probability
                that
                the Company will or may be required to pay Additional Amounts as
                described
                above;

            

    

    
      	 	 	
              (b)

            	
              the
                Company determines, in its business judgment, that the obligation
                to pay
                such Additional Amounts cannot be avoided by the use of reasonable
                measures available to it, other than substituting the obligor under
                the
                Notes or taking any action that would entail a material cost to the
                Company and

            

    

    
      	 	 	
              (c)

            	
              the
                Company receives an opinion of independent counsel to the effect
                that an
                act taken by a taxing authority of the United States results in a
                substantial probability that the Company will or may be required
                to pay
                the Additional Amounts described under above, and delivers to the
                Trustee
                a certificate, signed by a duly authorized officer, stating that
                based on
                such opinion the Company is entitled to redeem the Notes pursuant
                to their
                terms.

            

    

    

    Any
      redemption of the Notes as set forth in clauses (1) or (2) above shall be in
      whole, and not in part, and will be made at a redemption price equal to 100%
      of
      the principal amount of the Notes Outstanding plus accrued interest thereon
      to
      the date of redemption. Holders shall be given not less than 30 days nor more
      than 60 days prior notice by the Trustee of the date fixed for such
      redemption.

    

    All
      terms
      used in this Note which are defined in the Indenture shall have the meanings
      assigned to them in the Indenture. The Notes are governed by the laws of the
      State of New York.

    
      
         

      

        10Unassociated Document

    Exhibit
      10.1

     

    Execution
      Copy

    

    AMENDMENT
      NO. 3 TO FUNDING AGREEMENT

    

    This
      Amendment No. 3 (this “Amendment”)
      to the
      Funding Agreement dated August 8, 2000, as amended July 14, 2003 and September
      1, 2005 (together, the “Funding
      Agreement”),
      between Targeted Genetics Corporation, a Washington corporation (“Targeted”),
      and
      Biogen Idec MA Inc., a Massachusetts corporation (“Biogen”),
      is
      made as of November 7, 2006.

     

    AGREEMENT

    

    1.    Definitions.
      Capitalized terms used but not defined in this Amendment shall have the meanings
      given to them in the Funding Agreement.

     

    2.    Amendments.
      The
      Funding Agreement is hereby amended as follows: 

     

    (a)    The
      complete text of the definition of “Final
      Maturity Date”
in
      “Article One, Definitions” is hereby amended and restated as
      follows:

     

    “Final
      Maturity Date”
means
      August 1, 2008, the date on which the final installment of principal and final
      payment of interest is due and payable under the Note. If the Final Maturity
      Date falls on a day that is not a business day, then the Final Maturity Date
      shall be extended to the next succeeding business day.” 

     

    (b)    The
      following shall be added as a new definition in alphabetical order to “Article
      One, Definitions”:

     

    “Change
      of Control”
means
      either of the following events: 

    (a)
      consummation of any merger or consolidation of Targeted in which Targeted is
      a
      party and in which Targeted is not the surviving entity or the shareholders
      of
      Targeted control less than fifty percent of the voting power of Targeted or
      the
      surviving entity; or (b) consummation of any sale, lease, exchange or other
      transfer in one transaction or a series of related transactions of all or
      substantially all of Targeted’s assets or outstanding securities, other than a
      transfer of Targeted’s assets or securities to a majority-owned subsidiary of
      Targeted.”

    

    (c)    The
      complete text of “Article Two, The Loan, Section 2.1 Terms of the Loan,
      Subsection 2.1.5 Repayment” is hereby deleted and replaced in its entirety to
      read as follows:

     

    “Accrued
      and unpaid interest on the Loan shall be paid annually on each August 31
      (provided, that if such date would fall on a day that is not a business day,
      then the interest payment date shall be extended to the next succeeding business
      day) and on the Final Maturity Date. All outstanding principal of the Loan
      shall
      be due and payable in cash according to the following schedule:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Payment
                Date

            	 	
              Principal
                Amount

            
	 	 	 
	
              November
                7, 2006

            	 	
              $500,000

            
	
              August
                1, 2007

            	 	
              $1,000,000

            
	
              August
                1, 2008

            	 	
              $1,000,000

            

    

    

    In
      addition, Targeted agrees to pay Biogen, no later than the 10th business day
      following receipt thereof, an amount equal to one-third of any Milestone
      Payments received by Targeted or any of its subsidiaries (each such payment,
      a
“Mandatory
      Pre-Payment”).
      Any
      Mandatory Pre-Payment shall be applied (i) first to the payment of any accrued
      and unpaid interest on the principal being repaid, and (ii) second to the
      payment of outstanding principal in reverse order of maturity (i.e.,
      starting with the outstanding principal due on the latest payment date set
      forth
      on the above table).

    

    Targeted
      further
      agrees that upon any Change of Control of Targeted, the payment of $1,000,000
      of
      outstanding principal under the Loan due on August 1, 2007 shall accelerate
      and
      become due and payable in full to Biogen no later than the 30th
      business
      day following such Change of Control.” 

    

    3.    Additional
      Agreements. The parties further agree as follows:

     

    (a)    Partial
      Cancellation of Indebtedness.
      Biogen
      hereby agrees effective as of the date hereof to: (i) cancel in full the
      outstanding principal amount of $650,000 due under the Amended and Restated
      Promissory Note, dated September 1, 2005 (the “Second
      Note”);
      (ii)
      cancel in full outstanding principal amount of $5,000,000 of the Loan maturing
      on August 1, 2008 (such cancellation of an aggregate of $5,650,000 of
      outstanding indebtedness being the “Forgiven
      Debt”);
      and
      (iii) accept payment for the final $2,500,000 due under the Loan according
      to
      the schedule set forth in Section 2(c) hereof. 

     

    (b)    Biogen
      acknowledges receipt as of the date hereof of: (i) $500,000 cash from Targeted
      in payment of principal under the Loan pursuant to the schedule set forth in
      Section 2(c) hereof, and (ii) an Amended and Restated Promissory Note (the
      “Note”)
      from
      Targeted further amending and restating that certain Amended and Restated
      Promissory Note dated September 1, 2005 (the “September
      2005 Note”)
      and
      evidencing Targeted’s aggregate outstanding indebtedness to Biogen, following
      the repayment described in clause (i) above, of $2,000,000. Except for the
      indebtedness of Targeted to Biogen evidenced by the Note, Biogen hereby
      acknowledges that performance by Targeted of the actions contemplated by this
      Amendment shall constitute full repayment and satisfaction of the Forgiven
      Debt
      and that Targeted shall have no further obligation to Biogen to repay the
      Forgiven Debt. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)    Issuance
      of the Common Shares.
      In
      consideration of the Forgiven Debt, Targeted hereby agrees to issue 1,000,000
      shares of its unregistered common stock (the “Common
      Shares”)
      to
      Biogen within two (2) business days of the execution and delivery of this
      Amendment and the delivery of the September 2005 Note and the Second Note to
      Targeted for cancellation. 

     

    (d)    Representations
      and Warranties.
      

     

    (i)
      Biogen represents and warrants to Targeted, as of the date of this Amendment,
      as
      follows:

     

    (1)
      Access
      to Information.
      Biogen
      has had access to Targeted’s recent public filings with the SEC which provide
      all material information regarding Targeted including, in particular, the
      current financial condition of Targeted and the risks associated therewith.
      Biogen has been provided reasonable opportunity to ask questions of, and receive
      answers from, management of Targeted concerning the terms and conditions of
      the
      issuance of the Common Shares and any additional information, documents, book
      and records relating to the business, assets, financial condition, results
      of
      operations and liabilities of Targeted that it deemed necessary and to reach
      an
      informed and knowledgeable decision to accept the Common Shares on the terms
      set
      forth herein.

     

    (2)
      Restricted
      Securities.
      Biogen
      understands that the Common Shares are characterized under the Securities Act
      as
“restricted securities” and, therefore, the Common Shares cannot be sold or
      transferred unless they are subsequently registered under the Securities Act
      or
      an exemption from such registration is available. Biogen further understands
      that it must hold the Common Shares indefinitely unless a subsequent disposition
      thereof is registered or qualified under the Securities Act and applicable
      state
      securities laws or is exempt from registration, and that Targeted is under
      no
      obligation to register or qualify any of the Common Shares or to take any action
      to make such an exemption available. In this connection, Biogen represents
      that
      it is familiar with Rule 144 under the Securities Act as presently in effect,
      and understands the resale limitations imposed thereby and by the Securities
      Act.

     

    (3)
      Purchase
      for Own Account.
      Biogen
      represents and warrants that the Common Shares are being purchased for its
      own
      account, not as a nominee or agent, for investment and not with a view to the
      resale or distribution of any part thereof, and that Biogen has no present
      intention of granting any participation in, or otherwise distributing the same.
      Biogen further represents that it does not presently have any contract,
      undertaking, agreement or arrangement with any person to sell, transfer, or
      grant participations to any third person with respect to any of the Common
      Shares. 

     

    (4)
      Accreditation.
      Biogen
      represents and warrants that it is an “accredited investor” within the meaning
      of Regulation D promulgated under the Securities Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)
      Targeted represents and warrants to Biogen, as of the date of this Amendment,
      as
      follows:

     

    (1)
      Organization,
      Standing and Power.
      Targeted is a corporation duly organized and validly existing under the laws
      of
      the state of Washington. Targeted has the corporate power and authority to
      own,
      lease and operate its properties and carry on its business as now being
      conducted. Targeted is duly qualified to transact business and is in good
standing
      in each jurisdiction in which the failure to be so qualified and in good
      standing would have a Material Adverse Effect on Targeted. Targeted has
      previously provided to Biogen with complete and correct copies of its articles
      of incorporation and bylaws as in effect on the date of this
      Agreement.

    

    (2)
      Authority.
      Targeted has all requisite power and authority to execute, deliver and
perform
      its obligations under this Amendment and the Funding Agreement. The execution
      and delivery of this Amendment and the consummation of the transactions
      contemplated by this Amendment (including the issuance of Common Stock
pursuant
      to Section 3(c) of this Amendment) have been duly authorized by all necessary
      corporate action on the part of Targeted. This Amendment has been duly
executed
      and delivered by Targeted, and this Amendment constitutes a valid and legally
      binding obligation of Targeted, enforceable in accordance with its terms
      (subject to applicable bankruptcy, insolvency, reorganization, moratorium,
      fraudulent transfer and other similar laws affecting creditors' rights generally
      from time to time in effect and to general principles of equity, including
      concepts of materiality, reasonableness, good faith and fair dealing, regardless
      of whether in a proceeding at equity or at law).

    

    (3)
      SEC
      Reports; Financial Statements.
      

    

    a)
      Targeted has filed with the SEC all reports, forms, registration statements,
      definitive proxy statements and documents required to be filed with the
      SEC
      since December 31, 1999, and has furnished to  Biogen true and complete
copies,
      in the form filed with the SEC, of (i) its Annual Report on Form 10-K
for
      the
      fiscal year ended December 31, 2005, (ii) the proxy statement relating
to
      its
      2006 annual meeting of shareholders, (iii) its annual report to shareholders
      for
      the fiscal year ended December 31, 2005 and (iv) its Quarterly Reports on Form
      10-Q for the quarters ended March 31, 2006 and June 30, 2006 (collectively,
      the
      "Targeted
      SEC Documents").
      As of
      their respective filing dates, the Targeted SEC Documents (including all
      financial statements, exhibits and schedules to and documents incorporated
      by
      reference in the Targeted SEC Documents) (i) complied in all material respects
      with the requirements of the Exchange Act and the Securities Act, and (ii)
      did
      not contain any untrue statement of a material fact or omit to state a material
      fact required to be stated or necessary to make the statements made in the
      Targeted SEC Documents, in light of the circumstances in which they were made,
      not misleading, except to the extent corrected by a subsequently filed Targeted
      SEC Document.

    

    (b)
      The
      financial statements of Targeted, including the notes to the financial
      statements, included or incorporated by reference in the Targeted SEC
Documents
      (the "Targeted
      Financial Statements")
      were
      complete and correct in all material
      respects as of their respective filing dates, complied as to form in all
      material respects with applicable accounting requirements and with the
      applicable published rules and regulations of the SEC as of their respective
      dates, and have been prepared in accordance with GAAP applied on a basis
      consistent throughout the periods indicated and consistent with each other
      (except as may be indicated in the related notes or, in the case of unaudited
      statements, included in Quarterly Reports on Forms 10-Q). The Targeted Financial
      Statements fairly present the consolidated financial condition and operating
      results of Targeted and its subsidiaries at the dates and during the periods
      indicated
      in the Targeted Financial Statements (subject, in the case of unaudited
      statements, to normal, recurring year-end adjustments). There has been no change
      in Targeted accounting policies except in response to SEC Staff Accounting
      Bulletin No. 101 and as described in the Targeted SEC Documents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (4)
      Valid
      Issuance of Stock.
      The
      Shares, when issued and delivered in accordance with the terms of Section 3(c)
      of this Agreement and for the consideration expressed herein, will
      be
      duly and validly issued, fully paid and nonassessable and free of any liens
      or
      encumbrances other than those, if any, created by Biogen, and will be issued
      in
      compliance with all applicable state and federal securities
      laws.

    

    4.    Demand
      Registration.
      

    

    (a)
      On
      one occasion after the date hereof, Biogen may request that all of the Common
      Shares owned by Biogen as of such date be registered under the Securities Act
      on
      a Registration Statement on Form S-3 (or
      a
      successor form) (the
      "S-3
      Registration Statement").
      Upon
      the receipt of such request Targeted shall use its Reasonable Commercial Efforts
      to effect the S-3 Registration Statement as soon as practicable, at Targeted's
      expense, and to cause the S-3 Registration Statement to remain effective until
      the earlier of 180 days from the effective date of the S-3 Registration
      Statement and the date on which all the Common Shares covered by the S-3
      Registration Statement have been sold; provided, however, that Targeted shall
      not be required to effect the S-3 Registration Statement if (A) if Form S-3
      (or
      a successor form) is not available for such registration; (B) the Common Shares
      to be included in the S-3 Registration Statement would have an aggregate price
      to the public of less than $350,000; (C) Targeted shall furnish to Biogen a
      certificate signed by the president of Targeted stating that (1) Targeted is
      engaged or has bona fide plans to engage in a registered public offering or
      is
      engaged in any other activity that, in the good faith judgment of Targeted's
      board of directors, would be adversely affected by the requested registration
      or
      (2) the requested registration would involve initial or continuing disclosure
      obligations that are not in the best interests of Targeted's shareholders at
      such time, in which event Targeted shall have the right to defer the filing
      of
      the S-3 Registration Statement for a period of not more than 90 days after
      receipt of the request; or (D) Targeted has already effected a registration
      statement on Form S-3 or Form S-1 within the 180-day period preceding the date
      of such request. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      In
      the event Targeted effects the S-3 Registration Statement pursuant to this
      Section 4, Targeted shall indemnify and hold harmless Biogen, each underwriter
      of such Common Shares, if any, and each other person, if any, who controls
      Biogen or such underwriter within the meaning of the Securities Act or the
      Exchange Act against any losses, claims, damages or liabilities, joint or
      several, to which Biogen or such underwriter or controlling person may become
      subject under the Securities Act, the Exchange Act, state securities or blue
      sky
      laws or otherwise, insofar as such losses, claims, damages or liabilities (or
      actions in respect thereof) arise out of or are based on any untrue statement
      or
      alleged untrue statement of a material fact contained in the S-3 Registration
      Statement, any preliminary prospectus or final prospectus contained in the
      S-3
      Registration Statement (the "S-3
      Prospectus"),
      or
      arise out of or are based on the omission or alleged omission to state a
      material fact required to be stated in the S-3 Registration Statement or
      necessary to make the statements in the S-3 Registration Statement not
      misleading; and Targeted will reimburse Biogen or such underwriter or
      controlling person in connection with investigating or defending any such loss,
      claim, damage, liability or action; provided, however, that Targeted will not
      be
      liable in any such case to the extent that any such loss,
      claim, damages or liability arises out of or is based on an untrue statement
      or
      alleged untrue statement or omission or alleged omission made in the S-3
      Registration Statement, the S-3 Prospectus or any amendment or supplement of
      the
      S-3 Registration Statement or the S-3 Prospectus in reliance on and in
      conformity with written information furnished to Targeted by or on behalf of
      Biogen expressly for use in the S-3 Registration Statement or the S-3 Prospectus
      or any untrue statement in such prospectus or omission of a material fact
      required to make a statement not misleading in the S-3 Prospectus that is
      corrected in any subsequent S-3 Prospectus that was delivered to Biogen before
      the pertinent sale or sales by Biogen.

    

    5.    Effect
      of Amendment.
      Except
      as provided in this Amendment, all of the terms and conditions of the Funding
      Agreement shall remain in full force and effect.

     

    6.    Counterparts.
      This
      Amendment may be executed in counterparts, each of which when so executed shall
      be deemed an original, but all such counterparts together shall constitute
      but
      one and the same instrument. 

     

    [signature
      page follows]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Targeted and Biogen have caused this Amendment to be duly
      executed as of the date first above written.

     

    TARGETED
      GENETICS CORPORATION

    

    By:
      /s/
      H.
      Stewart
      Parker                                              

    Name:
      H.
      Stewart
      Parker                                           
   

    Title:
      President
      and Chief Executive
      Officer           

    

    

    

    BIOGEN
      IDEC MA INC.

    

    By:
      /s/
      Michael F.
      Phelps                                             

    Name:
      Michael
      F.
      Phelps                                          
   

    Title:
      Vice
      President and
      Treasurer

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