EXHIBIT 10.61

REAL PROPERTY PURCHASE AGREEMENT

THIS REAL PROPERTY PURCHASE AGREEMENT (this “Agreement”) is made and entered
into as of the Effective Date (as this term is defined in Paragraph 13(k),
below), by and between WKL INVESTMENTS AIRPORT, LLC, an Oregon limited liability
company (“Seller”) and AVI BIOPHARMA, INC., an Oregon corporation (“Purchaser”).

WITNESSETH:

WHEREAS, Purchaser agrees to purchase from Seller, and Seller agrees to
transfer, sell, assign, deliver and convey to Purchaser, on the terms and
conditions set forth in this Agreement (a) Seller’s interest as lessee in that
certain lease agreement identified on Exhibit “A” attached hereto (the “Lease”)
whereby Seller is leasing that certain parcel of real property commonly known as
1749 SW Airport Avenue, Corvallis, Oregon 97330 and more particularly described
on Exhibit “B” attached hereto (the “Land”), (b) Seller’s interest in any and
all buildings, fixtures and other improvements situated on the Land (the
“Improvements”), (c) all service contracts, licenses, authorizations, permits,
certificates, warranties, plans, specifications and studies related thereto, if
any (the “Intangibles”). The Improvements include all equipment and machinery
considered to be part of the building systems for the Improvements, including,
but not limited to, any gas heaters, central ventilating, air conditioning and
air filtration, heating, lighting, electrical and plumbing equipment, and
related electrical panels and conduits. The Land, Improvements and Intangibles
are hereinafter sometimes referred to, collectively, as the “Property.”

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are all hereby acknowledged by each of the parties hereto, the parties
hereto agree as follows:

1.                                       Purchase Price. Seller shall sell and
transfer the Property to Purchaser and Purchaser shall purchase the Property
from Seller for the sum of THREE MILLION THREE HUNDRED THOUSAND AND 00/100
DOLLARS ($3,300,000.00) (hereinafter sometimes referred to as the “Purchase
Price”), payable as follows:

(a)                                  Within two (2) business days (calendar
days, exclusive of Saturdays, Sundays and legal holidays in the State of
Oregon), Purchaser shall deposit with Chicago Title Insurance Company, 888 SW
Fifth Avenue, Suite 930, Portland, Oregon 97204, Attention: Jennifer Lyke (the
“Title Company”), an earnest money deposit of TWO HUNDRED FIFTY THOUSAND AND
00/100 DOLLARS ($250,000.00) (the “Deposit”), which Deposit shall be held by the
Title Company in an interest bearing escrow account and released or disbursed .
pursuant to the terms of this Agreement, and credited against the Purchase Price
if the Closing (as defined in Paragraph 5 below) occurs. Any interest which
accrues on the Deposit shall be part of the Deposit.

(b)                                 In the event that Purchaser has not
terminated this Agreement on or before March 15,2007, Purchaser shall deliver to
the Title Company an additional earnest money deposit of ONE HUNDRED THOUSAND
AND 00/100 DOLLARS ($100,000.00), which shall

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be considered part of the Deposit hereunder. At Closing, the Deposit shall be
delivered by the Title Company to Seller.

(c)                                  At Closing, Purchaser shall deliver to
Seller the balance of the Purchase Price of TWO MILLION NINE HUNDRED FIFTY
THOUSAND AND 00/100 DOLLARS ($2,950,000.00) in the manner described below:

(i)                                     SEVEN HUNDRED FIFTY THOUSAND AND 00/100
DOLLARS ($750,000.00) in shares of freely tradable and listed on the NASDAQ
Global Market common stock of Purchaser with a par value $.0001 per share (the
“Common Stock”), which Common Stock has been registered in a shelf offering
registration on a Form S-3 registration statement declared effective by the
Securities and Exchange Commission (“SEC”) and currently in effect (SEC No.
333-109015). The number of shares of Common Stock delivered to Seller at Closing
shall be determined by dividing Seven Hundred Fifty Thousand and 00/1 00 Dollars
($750,000.00) by the average daily closing share price of the Common Stock, as
reported by the NASDAQ Global Market for the ten (10) consecutive trading days
ending three (3) trading days prior to the date of Closing, rounded to the
nearest whole share.

(ii)                                  Assumption of two (2) loans secured by the
Property in the projected aggregate principal amount of approximately TWO
MILLION ONE HUNDRED NINETY SIX THOUSAND TWO HUNDRED EIGHT AND 04/1 00 DOLLARS
($2,196,208.04) as of the date of Closing, owed by Seller to Cowlitz Bank
(“Lender”) and identified as Loan Numbers 4102983-USDA 54-51 and 4106423-USDA
54-53 (the “Loans”).

(iii)                               THREE THOUSAND SEVEN HUNDRED NINETY ONE AND
96/100 DOLLARS ($3,791.96) in immediately available funds, or such other amount
as is required to pay the balance of the Purchase Price when taking into account
the actual principal balances of the Loans on the Closing Date, subject to
adjustment for closing costs and prorations as provided herein.

2.                                       Access to Property.  Purchaser and its
employees, agents, contractors, consultants and representatives (collectively,
the “Authorized Parties”) shall at all reasonable times prior to Closing (as
defined in Paragraph 5 below), and subject to reasonable advance notice to
Seller, have the right, privilege and opportunity to enter upon the Land and the
Improvements to investigate the physical and environmental condition of the Land
and the Improvements. Seller shall have the right to accompany Purchaser and the
Authorized Parties during their investigations on the Land and the Improvements.
Purchaser agrees to promptly restore the Land and the Improvements to
substantially the condition existing prior to entry thereon by Purchaser and/or
the Authorized Parties. Purchaser also agrees to indemnify, defend and hold
Seller, the Land and the Improvements harmless from and against any and all
claims, liens, liabilities, costs and expenses (including reasonable attorney
fees and costs) arising out of the activities of Purchaser and/or the Authorized
Parties while on or related to the Property: Notwithstanding any language to the
contrary contained in this Agreement, or language providing that this Agreement
is “null and void” following a termination, this indemnity shall survive the
Closing or termination of this Agreement.

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3.                                       Purchaser’s Conditions Precedent.
 Purchaser’s obligations hereunder are conditioned upon the satisfaction of each
of the following conditions during the time periods specified below (any of
which conditions may be waived by Purchaser upon giving notice thereof to
Seller):

(a)                                  Seller, at its expense, has caused the
Title Company to deliver to Purchaser a preliminary title report covering the
Land and Improvements, including all documents identified as exceptions in the
Title Report (collectively, the “Title Report”), and a Uniform Commercial Code
search naming Seller and Electoglas, Inc. (the “UCC Search”). Purchaser shall
notify Seller in writing (“Purchaser’s Title Objection Notice”) of any
objections Purchaser may have to title exceptions contained in the Title Report
or UCC Search prior to the expiration often (10) days following the Effective
Date. Purchaser’s failure to deliver Purchaser’s Title Objection Notice on or
before the expiration of the ten (10) day period referenced above shall be
conclusively deemed Purchaser’s approval of the Title Report and the UCC Search.
Seller shall have a period of seven (7) days after receipt of Purchaser’s Title
Objection Notice in which to deliver written notice to Purchaser (“Seller’s
Title Notice”) of Seller’s election to either (a) agree to remove the
objectionable items at or prior to the Close of Escrow, or (b) decline to remove
any such title exceptions and terminate this Agreement. The failure of Seller to
issue a Seller’s Title Notice shall be deemed an election by Seller of
subsection (b) immediately above. If Seller notifies Purchaser of its election
not to remove such title exceptions and to terminate this Agreement rather than
remove the objectionable items, or Seller fails to issue a Seller’s Title
Notice, Purchaser shall have the right, by written notice delivered to Seller
within five (5) days after Purchaser’s receipt of Seller’s Title Notice, or five
(5) days after the seven (7) day period referenced above, to agree to accept the
Property subject to the objectionable items, in which event Seller’s election to
terminate this Agreement shall be of no effect, and Purchaser shall take title
to the Property subject to such objectionable items. Absent such written notice
to Seller from Purchaser, this Agreement shall terminate and the Deposit shall
be promptly returned to Purchaser. Notwithstanding anything to the contrary
contained herein, all recorded documents relating to the Loans shall be
“Permitted Exceptions.” Any matters appearing in or on the Title Report, DCC
Search or Survey (only if obtained by Purchaser) to which Purchaser does not
object within the time frame set forth above or any title exceptions as to which
Purchaser waives its objection in writing are referred to herein as “Permitted
Exceptions.”

(b)                                 Purchaser shall have from the Effective Date
through and including March 15, 2007 (such period being referred to herein as
the “Investigation Period”) in which to investigate the physical and
environmental condition of the Land and Improvements; the. availability and
sufficiency of utilities servicing the Land and Improvements; the zoning, land
use, building requirements and restrictions applicable to the Land and
Improvements; and the desirability and feasibility of acquiring and utilizing
the Property as contemplated by Purchaser. Seller agrees to cooperate, at no
cost and expense to Seller, with Purchaser’s efforts to obtain any approvals
required for Purchaser to operate its research and manufacturing business on the
Land and Improvements including, but not limited to, executing any applications
or other documents required to be signed by the Seller, as the lessee under the
Lease. If Purchaser is dissatisfied with the results of its investigations (in
Purchaser’s sole discretion), then Purchaser may terminate this Agreement by
providing written notice thereof to Seller prior to the expiration of the
Investigation Period, in which event this Agreement shall be null and void.

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(c)                                  Before March 15,2007, Seller utilizing its
good faith efforts to negotiate and deliver to Purchaser a valid and binding
lease termination agreement (the “Lease Termination Agreement”) in respect to
that certain Lease Agreement dated March 20, 2002 (as amended, the “Tenant
Lease”), by and between Seller, as landlord and Electroglas, Inc.
(“Electroglas”), as tenant. The Lease Termination Agreement shall, at a minimum,
terminate the Tenant Lease (with the exception of any indemnities related to
hazardous substances and other provisions intended to survive the expiration or
termination of the Tenant Lease) prior to April 15, 2007~ require Electoglas to
vacate and surrender the Land and Improvements prior to April 15, 2007 in the
condition required by the terms of the Tenant Lease (except as otherwise
reasonably approved in writing by Purchaser)~ require Electroglas to convey to
Seller or Purchaser (at Seller’s election) all of its right, title and interest
in and to the personal property described on Exhibit “c” attached hereto (the
“Personal Property”), free and clear of all liens and encumbrances~ and permit
Seller to assign its interest in the Tenant Lease and Lease Termination
Agreement to Purchaser. If Seller has not delivered the Lease Termination
Agreement to Purchaser by March 14, 2007, or if Purchaser is dissatisfied with
the terms of the Lease Termination Agreement (in Purchaser’s reasonable
discretion), then Purchaser may terminate this Agreement by providing written
notice thereof to Seller on or before March 15,2007, in which event the Deposit
shall be returned to Purchaser and this Agreement shall be null and void. In the
event that Seller elects to transfer the Personal Property to Purchaser, such
conveyance shall be without any warranty or representation of any kind, type or
nature, and Purchaser shall accept such conveyance of the Personal Property “AS
IS” and with all faults, in its then present condition. Electroglas has advised
that it will transfer the “Forklift” to Seller or Purchaser for the sum of
$4,000.00. Purchaser agrees that it will pay to Electroglas or Seller said sum
in consideration of the transfer of the Forklift to Purchaser.

(d)                                 Before March 15,2007, Seller utilizing its
good faith efforts to negotiate and deliver to Purchaser (i) a valid and binding
commitment from the City of Corvallis (the “City’’) to consent to the assignment
(the “Consent”) of the lessee’s interest in the Lease, in a form reasonably
acceptable to Purchaser~ and (ii) a valid and binding estoppel certificate from
the City in respect to the Ground Lease substantially in the form attached
hereto as Exhibit “D” (the “Estoppel Certificate”). If Seller has not delivered
the Consent and Estoppel Certificate to Purchaser by March 14,2007, or if
Purchaser is dissatisfied with the terms of the Consent or Estoppel Certificate
(in Purchaser’s reasonable discretion, provided that Purchaser may not object to
the terms of the estoppel certificate actually delivered unless the terms
materially differ from those contained on the Estoppel Certificate), then
Purchaser may terminate this Agreement by providing written notice thereof to
Seller on or before March 15,2007, in which event the Deposit shall be returned
to Purchaser and this Agreement shall be null and void.

(e)                                  Before March 15,2007, Purchaser negotiating
and obtaining a valid and binding commitment from Lender to permit Purchaser to
assume the Loans at Closing without change to the financial terms thereof (i.e.,
principal amount, interest rate, amortization period and maturity date), with a
loan assumption fee not to exceed one percent (1 %) of the outstanding principal
balance of the Loans, and otherwise containing terms and conditions acceptable
to Purchaser in its sole discretion (the “Loan Commitment”). If Purchaser has
not obtained the Loan Commitment, or if Purchaser is dissatisfied with the terms
of the Loan Commitment (in Purchaser’s sole discretion), then Purchaser may
terminate this Agreement by providing written

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notice thereof to Seller on or before March 15,2007, in which event the Deposit
shall be returned to Purchaser and this Agreement shall be null and void.

(f)                                    The obligation of Purchaser under this
Agreement to purchase the Property from Seller is subject to the satisfaction,
as of Closing, of each of the following conditions:

(i)                                     The representations and warranties made
by Seller in this Agreement shall be true, accurate and complete in all material
respects as of the Closing Date.

(ii)                                  Seller performing all of the covenants and
obligations required by this Agreement to be performed by Seller on or before
the Closing Date.

(iii)                               Seller conveying its interest in the
Property to Purchaser in accordance with the terms of this Agreement.

(iv)                              Seller delivering exclusive possession of the
Land and Improvements to Purchaser at Closing in substantially the same
condition as existed on the Effective Date, reasonable wear and tear excepted.

(v)                                 Seller executing and delivering all
documents necessary for Purchaser to assume the Loans in accordance with the
terms of the Loan Commitment and Loan Release; provided, Seller’s only
obligation shall be to execute and deliver such documents, it being understood
that it is the obligation of Purchaser to take all action necessary to assume
the Loans and the preparation of the loan assumption documents.

(vi)                              City executing and delivering all documents
necessary to consent to assignment of the Ground Lease to Purchaser in
accordance with the terms of the Consent.

(vii)                           Lender executing and delivering all documents
necessary for Purchaser to assume the Loans in accordance with the terms of the
Loan Commitment.

If any of the conditions set forth in clauses (i) through (v) above are not
satisfied on or before Closing and Purchaser fails to waive such conditions,
then Purchaser may, at its election, by written notice to Seller (A) declare
Seller to be in default under this Agreement, in which event the parties shall
have the rights, benefits, obligations and liabilities described in Paragraph 12
below, or (B) extend the time for Closing hereunder for a period of time not to
exceed thirty (30) days until all of these contingencies are satisfied and/or
until Purchaser waives such contingencies, such waiver to occur, if at all,
within the thirty (30) day period referenced above. If Purchaser elects to
proceed pursuant to clause (B), Purchaser may still elect clause (A)
subsequently, at any time, upon written notice to Seller.

If any of the conditions set forth in clauses (vi) and (vii) above are not
satisfied on or before Closing through no fault of Purchaser, then this
Agreement shall terminate, in which event the Deposit shall be returned to
Purchaser and this Agreement shall be null and void.

4.                                       Seller’s Conditions Precedent. Seller’s
obligation to convey the Property to Purchaser at Closing is conditioned upon
the satisfaction of each of the following conditions

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during the time periods specified below (any of which conditions may be waived
by Seller upon giving notice thereof to Purchaser):

(a)                                  On or before March 15,2007, (i) Seller
utilizing its good faith efforts to negotiate and obtain a valid and binding
commitment from the City to release Seller at Closing from its obligations under
the Ground Lease from and after the date of Closing (the “Ground Lease
Release”), on terms and conditions reasonably acceptable to Seller; (ii) Seller
utilizing its good faith efforts to negotiate and obtain a valid and binding
commitment from Lender to release Seller and all guarantors of the Loans at
Closing from all obligations under all documents evidencing or securing the
Loans (the “Loan Release”), on terms and conditions reasonably acceptable to
Seller; and (iii) Seller obtaining the Lease Termination Agreement, on terms and
conditions reasonably acceptable to Seller. If Seller has not obtained the
Ground Lease Release, Loan Release and the Lease Termination Agreement, or if
Seller is dissatisfied with the terms of the Ground Lease Release, Loan Release
or Lease Termination Agreement (in Seller’s sole and absolute discretion), then
Seller may terminate this Agreement by providing written notice thereof to
Purchaser on or before March 15, 2007, in which event the Deposit shall be
returned to Purchaser and this Agreement shall be null and void.

(b)                                 The obligation of Seller under this
Agreement to sell the Property to Purchaser is subject to the satisfaction, as
of Closing, of each of the following conditions:

(i)                                     The representations and warranties made
by Purchaser in this Agreement shall be true, accurate and complete in all
material respects as of the Closing Date.

(ii)                                  Purchaser performing all of the covenants
and obligations required by this Agreement to be performed by Purchaser on the
Closing Date.

(iii)                               City executing and delivering all documents
necessary to allow Seller to assign its interest in the Lease to Purchaser and
release Seller from its obligations under the Ground Lease pursuant to the terms
of the Lease Release.

(iv)                              Lender executing and delivering all documents
necessary to allow Purchaser to assume the Loans and to release Seller and
guarantors from all obligations under all documents evidencing or securing the
Loans pursuant to the terms of the Loan Release.

(v)                                 Electroglas, Inc. executing and delivering
to Seller the Lease Termination Agreement.

If any of the conditions set forth in clauses (i) and (ii) above are not
satisfied on or pefore Closing and Seller fails to waive such conditions, the~
Seller may, at its election, by written notice to Purchaser (A) declare
Purchaser to be in default under this Agreement, in which event the parties
shall have the rights, benefits, obligations and liabilities described in
Paragraph 12 below, or (B) extend the time for Closing hereunder for a period of
time not to exceed thirty (30) days until all of these contingencies are
satisfied and/or until Seller waives such contingencies. If Seller elects to
proceed pursuant to clause (B), Seller may still elect clause (A) subsequently,
at any time, upon written notice to Purchaser.

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If any of the conditions set forth in clauses (iii), (iv) and (v) above are not
satisfied on or before Closing through no fault of Seller, then this Agreement
shall terminate, in which event the Deposit shall be returned to Purchaser and
this Agreement shall be null and void.

5.                                       Closing. The consummation of the
purchase and sale of the Property pursuant to this Agreement (the “Closing”)
shall be held on or before April 16,2007, or on an earlier date (the “Closing
Date”) and time mutually agreed upon in writing by both Purchaser and Seller.
Closing shall be held in escrow at the office of the Title Company.

(a)                                  Deliveries by Seller. At Closing, Seller
shall deliver, or cause to be delivered, to Purchaser the following documents
(all duly and fully executed, acknowledged and notarized as appropriate):

(i)                                     Two (2) originals of an assignment of
Seller’s interest in the Lease in recordable form (the “Lease Assignment’’),
requiring Seller to indemnify Purchaser for all matters arising out of or under
the Lease prior to the Closing.

(ii)                                  A deed in recordable form (the “Deed’’),
conveying Seller’s interest in and to the Improvements to Purchaser.

(iii)                               A bill of sale without warranties conveying
seller’s interest in all Personal Property. Alternatively, Seller may deliver a
bill of sale from Electroglas, Inc. conveying the Personal Property to
Purchaser.

(iv)                              An assignment of Seller’s right, title and
interest in and to the Lease Termination Agreement.

(v)                                 All documents necessary for the assignment
and assumption of Seller’s rights and obligations under all documents evidencing
or securing the Loans (the parties agree that it is the obligation of Purchaser
to obtain the right to assume the Loans, and Seller’s obligation relating
thereto is solely to sign the assignment and assumption documents).

(vi)                              A certificate that Seller is not a “foreign
person” as that term is defined in the Internal Revenue Code, Section 1445(F)(3)
and the sale of the Property is not subject to any withholding requirements
imposed by the Internal Revenue Code.

(vii)                           An agreement wherein Seller and its members
covenant not to sell or transfer more than Fifty Thousand (50,000) shares of the
Common Stock on any individual trading day (the “Common Stock Resale
Restriction’“), attached hereto as Exhibit “E”.

(viii)                        Any other documents and/or affidavits reasonably
requested by Title Company to consummate the transactions contemplated by this
Agreement.

As soon as reasonably practicable after Closing, Seller shall cause the Title
Company to deliver to Purchaser a Standard ALT A Leasehold Owner’s Policy of
title insurance in the amount of the Purchase Price, containing no exceptions
other than the Permitted Exceptions and the standard preprinted exceptions in
such title insurance policy; provided, however, that standard (aka general)
exceptions numbered 3 and 5 shown in the Title Report shall not appear in

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the final policy of title insurance issued to Purchaser at the Closing in the
event that Purchaser pays the additional premium for extended title insurance
coverage (the “Title Policy”).

(b)                                 Deliveries by Purchaser. At Closing,
Purchaser shall deliver, or cause to be delivered, to Seller, the following:

(i)                                     Two (2) originals of items 5(a)(i), (v)
and (vii).

(ii)                                  Any other documents and/or affidavits
reasonably requested by the Title Company to consummate the transaction
contemplated by this Agreement.

6.                                       Closing Costs. Seller’s attorneys’
fees, the premium for the Title Policy, one-half (1/2) of any escrow fees or
closing costs charged by the Title Company, and the fee required to record the
Lease Termination Agreement shall be paid by Seller at the Closing. Purchaser
shall be responsible for the payment of its own attorneys’ fees, the cost to
obtain the Survey (if desired by Purchaser), the additional premium required for
extended title insurance coverage or for any endorsements to the Title Policy
(if desired by Purchaser), one-half (1/2) of any escrow fees or closing costs
charged by the Title Company, and the fees required to record the Ground Lease
Assignment, Deed and any instruments required to effect the assumption of the
Loans. Additionally, Purchaser shall pay all of the costs and expenses of the
lender, including the lender’s attorney fees, relating to the assumption of the
Loans.

7.                                       Prorations and Credits. All real
property taxes and assessment, water and sewer charges, and rent (if applicable)
shall be prorated and adjusted between Seller and Purchaser as of the Closing
Date.

8.                                       Notices. All notices, requests, demands
or other communications hereunder (individually, a “Notice”; collectively,
‘‘Notices’’) shall be in writing and deemed given (a) when delivered personally,
(b) three (3) days after the date the Notice is deposited in the U.S. mail, by
registered or certified mail, return receipt requested, postage prepaid, (c) on
the day the Notice is sent by facsimile, with receipt mechanically confirmed, or
(d) one (1) day after the date the Notice is deposited for next day overnight
delivery with a nationally recognized overnight courier service, addressed
and/or sent by facsimile, as the case may be, as follows:

If to Seller:

 

WKL Investments Airport, LLC

1800 Blankenship Road, Suite 195

West Linn, Oregon 97068

Attention:  Michael Kelley

Fax: (503) 656-7022

 

If to Purchaser:

 

AVI BioPharma, Inc.

One SW Columbia, Suite 1105

Portland, Oregon 97258

Attention:  Alan P. Timmins

Fax: (503) 227-0751

With a copy to:

 

Schwabe, Williamson & Wyatt, P.C.

1211 SW Fifth Avenue, Suite 1600

Portland, Oregon 97204

 

With a copy to:

 

Davis Wright Tremaine LLP

1300 SW Fifth Avenue, Suite 2300

Portland, Oregon 97201

 

 

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Attention:  Terry C. Hauck

Fax No.: (503) 796-2900

Attention:  Michael C. Phillips

Fax No.: (503) 778-5299

 

If to the Title Company:

 

Chicago Title Insurance Company

888 SW Fifth Avenue, Suite 1600

Portland, Oregon 97204

Attention Jennifer Lyke

Fax No.: (503) 248-0324

 

 

or to any other address as the parties may from time to time designate by a
Notice in writing to the other parties.

9.                                       Seller’s Representations and
Warranties. Seller represents and warrants to Purchaser that the following are
true, accurate and complete as of the Effective Date and will be true, accurate
and complete as of Closing:

(a)                                  Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
Oregon.

(b)                                 Seller, and any individual executing this
Agreement on Seller’s behalf, has the power to execute, deliver and perform this
Agreement and has taken all actions required to authorize the due execution and
delivery of this Agreement. The execution, delivery and performance of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of the Articles of Organization or Operating
Agreement of Seller, or any provision of any agreement, instrument, order
judgment or decree to which either Seller is a party or by which it or any of
its assets are bowd. This Agreement has been, and the documents contemplated
hereby will be, duly executed and delivered by Seller and constitute Seller’s
legal, valid and binding obligations.

(c)                                  There are no actions, suits, claims or
other proceedings pending or, to Seller’s actual knowledge, threatened against
the Property or Seller that could affect Seller’s ability to perform its
obligations under this Agreement in a timely manner or that could affect any
portion of the Property or Seller’s interest in the Property.

(d)                                 The copies of the Lease and the Tenant Lease
provided by Seller to Purchaser is a true and complete copy of the Lease and the
Tenant Lease, and all amendments thereto, and the Lease and the Tenant Lease are
in full force and effect with all rents paid currently and no current events of
default thereunder.

(e)                                  Seller is the owner of the Improvements.

Seller will indemnify and hold Purchaser and its directors, officers,
shareholders, employees and agents, each person who controls such Purchaser
(within the meaning of the federal securities laws) and the directors, officers,
shareholders, agents, or employees of such, controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities,

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obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlement, court costs and reasonable attorneys’
fees and costs of investigation asserted by any third party unrelated to a
Purchaser Party that any such Purchaser Party may suffer or incur as a result of
or relating to any breach of any of the representations, warranties, covenants,
or agreements made by Seller in this Agreement.

The representations and warranties of Seller set forth in clauses (c) and (d)
above are limited to the actual knowledge of Michael L. Kelley, a member of
Seller. Seller further represents and warrants to Purchaser that Michael L.
Kelley is the member, officer or employee of Seller with the most knowledge
concerning the subject matter of these representations and warranties. In the
event of a breach of any of Seller’s representations and warranties, Purchaser
may not pursue any remedies against Michael L. Kelley individually.

10.                                 Purchaser’s Representations. Warranties and
Covenants. Purchaser represents, warrants and covenants to Seller, as
applicable, that (Purchaser’s representations and warranties shall be true,
accurate and complete as of the Effective Date and will be true, accurate and
complete as of Closing):

(a)                                  Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Oregon.

(b)                                 Purchaser and any individual executing this
Agreement on Purchaser’s behalf, has the power to execute, deliver and perform
this Agreement and has taken all actions required to authorize the due execution
and delivery of this Agreement. The execution, delivery and performance of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of the Articles of Incorporation or Bylaws of
Purchaser, or any provision of any agreement, instrument, order, judgment or
decree to which either Purchaser is a party or by which it or any of its assets
are bound. This Agreement has been, and the documents contemplated hereby will
be, duly executed and delivered by Purchaser and constitute Purchaser’s legal,
valid and binding obligations.

(c)                                  The Common Stock issued in Paragraph l(i)
above is duly authorized and reserved for issuance and, upon issuance in
accordance with the terms of this Agreement, the Common Stock will be validly
issued, fully paid and non-assessable, free and clear of any and all liens,
claims and encumbrances, and the holder of such Common Stock shall be entitled
to all rights and preferences then accorded to a holder of common stock. At
Closing, the Common Stock will be freely tradeable and listed on the NASDAQ
Global Market, subject only to the Stock Transfer Restriction Agreement.

(d)                                 Since January 1,2005, all reports,
schedules, forms, statements and other documents filed by Purchaser with the SEC
under either the Securities Act of 1933 or the Securities Exchange Act of 1934,
both as amended (all of the foregoing filed prior to the date hereof or amended
after the date hereof and all exhibits included therein and. financial statement
and schedules thereto and documents incorporated by reference therein) do not
include any untrue statements of material fact, nor do they omit to state any
material fact required to be stated therein necessary to make the statements
made, in light of the circumstances under which they were made, not misleading.

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(e)                                  As long as Seller owns shares of the Common
Stock, Purchaser covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by Purchaser after the date hereof pursuant to the securities laws and the
applicable NASDAQ rules to insure that the shares of the Common Stock remain
freely tradable and listed on the NASDAQ Global Market

(f)                                    If Seller becomes involved in any
capacity in any proceeding by or against any person who is a shareholder of
Purchaser (except as a result of sales, pledges, margin sales and similar
transitions by Seller to or with any other shareholder), solely as a result of
Seller’s acquisition of the Common Stock under this Agreement, Purchaser will
reimburse Seller for its reasonable legal and other expense (including the cost
of any investigation preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred. The reimbursement
obligation of Purchaser under this paragraph shall be in addition to any
liability which Purchaser may otherwise have, shall extend upon the same terms
and conditions to any affiliates of Seller who are actually named in such
action, proceeding or investigation, and directors, officers, shareholders,
agents, employees and controlling persons (if any), as the case may be, of
Seller and any such affiliate, and shall be binding upon and inure upon to the
benefit of any successors, assigns, heirs and personal representatives of.the
Purchaser, Seller and any such affiliate and any such person. Purchaser also
agrees that neither Seller nor any of its affiliates, directors, agents,
employees and control1ing persons shall have any liability to Purchaser or any
person asserting claims on behalf of or in right of Purchaser solely as a result
of acquiring the Common Stock under this Agreement, except if such claim arises
from a breach of Seller’s representations, warranties or covenants under this
Agreement or any violations by the Seller of state of federal securities laws or
any conduct by such Seller which constitutes fraud, gross. negligence, willful
misconduct or malfeasance.

Purchaser will indemnify and hold Seller and its directors, officers,
shareholders, employees and agents, each person who controls such Seller (within
the meaning of the federal securities laws) and the directors, officers,
shareholders, agents, or employees of such control1ing persons (each, a “Seller
Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlement, court costs and reasonable attorneys’ fees and costs of
investigation that any such Seller Party may suffer or incur as a result of or
relating to (a) any breach of any of the representations, warranties, covenants,
or agreements made by Purchaser in this Agreement or (b) any action instituted
against a Seller Party, or any of them or their respective affiliates, by any
shareholder of Purchaser who is not an affiliate of Seller, with respect to any
of the transactions contemplated by this Agreement (unless such action is based
primarily from a breach of Seller’s representations, warranties or covenants
under this Agreement or any violations by the Seller of state of federal
securities laws or any conduct by such Seller which constitutes fraud, gross
negligence, willful misconduct or malfeasance).

11.                                 Casualty or Condemnation. If prior to
Closing any part of the Property is damaged by fire or other casualty, or
condemned by any legally constituted authority for any public use or purpose,
then not later than ten (l0) days after the date upon which Purchaser receives
notice from Seller of the casualty or condemnation, Purchaser shall give to
Seller written notice that Purchaser has elected to (a) terminate this
Agreement, in which event this Agreement shall be null and void and the Deposit
shall be returned to Purchaser, or (b) take an assignment from

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Seller at the Closing of the right to receive any insurance proceeds or
condemnation awards in respect to the Property and the terms of this Agreement
shall remain in full force and effect and binding on the parties hereto. If
Purchaser does not give this notice to Seller within said ten (10) day period,
then Purchaser shall be deemed to have elected to proceed pursuant to clause
(b), above. If the Property is damaged or condemned and this Agreement is not
terminated pursuant to the foregoing terms, then the “Property” shall thereafter
mean the Property less and except any portion thereof damaged by casualty or
taken by condemnation.

12.                                 Default.

(a)                                  In the event of a default by Seller
hereunder, Purchaser shall be entitled to either terminate this Agreement, in
which event the Title Company shall promptly deliver the Deposit to Purchaser
and this Agreement shall be null and void; or seek any and all remedies
available at law or in equity including, but not limited to, specific
performance of this Agreement; provided, however, that Purchaser shall not have
the right to obtain any recovery for consequential, special or punitive damages.

(b)                                 In the event of a default by Purchaser
hereunder following the satisfaction or waiver of all contingencies and
conditions herein, Seller shall be entitled to retain the Deposit as liquidated
damages as its sole and exclusive remedy against Purchaser, in which event this
Agreement shall be null and void and the Title Company shall promptly deliver
the Deposit to Seller. Seller and Purchaser agree that actual damages resulting
to Seller from Purchaser’s breach of this Agreement would be difficult or
impossible to measure because of the uncertainties of the real estate market and
fluctuations of property values and differences with respect thereto, and that
the Deposit is a reasonable estimate of those damages. Notwithstanding the
foregoing, the limitation of remedies set forth above shall not be applicable in
the event that the representations and warranties set forth in Section IO(e)
and/or (d) are false, in any material respect, or Purchaser violates Section
IO(e) and/or (t), and, in such event, Seller shall have any and all remedies
available to it.

13.                                 Miscellaneous.

(a)                                  Seller will not further sell, encumber,
convey, or assign, or contract to sell, encumber, convey, assign, pledge, or
lease all or any part of the Property or restrict the use of all or any part of
the Property or take or cause to be taken any action in conflict with this
Agreement at any time between the Effective Date and (i) Closing or (ii) the
earlier termination of this Agreement pursuant to its terms.

(b)                                 This Agreement may not be assigned by
Purchaser without the prior written consent of Seller, which consent may be
withheld in Seller’s sole and absolute discretion. Notwithstanding the foregoing
to the contrary, Purchaser may assign this Agreement without the prior consent
of Seller to any entity owned or controlled by Purchaser.

(c)                                  Neither this Agreement nor any provision
hereof may be changed, amended, modified, waived or discharged orally or by any
course of dealing, but only by an instrument in writing signed by the party
against which enforcement of the change, amendment, modification, waiver or
discharge is sought.

--------------------------------------------------------------------------------

(d)                                 Each party represents and warrants to the
other that no real estate broker or agent has been instrumental in procuring
this Agreement Each party shall indemnify and save the other party wholly
harmless from and against any loss, cost, or other expense, including reasonable
attorneys’ fees, which may be incurred by such other party by reason of any
breach of the foregoing warranties.

(e)                                  Time is of the essence of this Agreement.
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the state of Oregon.

(f)                                    In the event that any party to this
Agreement institutes a suit, action, arbitration, or other legal proceeding of
any nature whatsoever, relating to this Agreement or to the rights or
obligations of the parties with respect thereto, the prevailing party shall be
entitled to recover from the losing party its reasonable attorney, paralegal,
accountant, expert witness (whether or not called to testify at trial or other
proceeding) and other professional fees and all other fees, costs, and expenses
actually incurred and reasonably necessary in connection therewith, including
but not limited to deposition transcript and court reporter costs, as determined
by the judge or arbitrator at trial or other proceeding, and including such
fees, costs and expenses incurred in any appellate or review proceeding, or in
collecting any judgment or award, or in enforcing any decree rendered with
respect thereto, in addition to all other amounts provided for by law. This cost
and attorneys fee provision shall apply with respect to any litigation or other
proceedings in bankruptcy court, including litigation or proceedings related to
issues unique to bankruptcy law.

(g)                                 This Agreement may be executed in several
counterparts, each of which may be deemed an original, and all of such
counterparts together shall constitute one and the same Agreement. A facsimile
signature on this Agreement shall be deemed to be an original signature.

(h)                                 The invalidity or unenforceability of a
particular provision of this Agreement shall not affect the other provisions
hereof: and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.

(i)                                     This Agreement (and the Exhibits
attached hereto which are by reference incorporated herein and made a part
hereof) constitutes the sole and entire agreement of the parties and is binding
upon Seller and Purchaser, their heirs, successors, legal representatives and
assigns.

(j)                                     Any period of time described in this
Agreement by reference to a number of days includes Saturdays, Sundays, and any
state or national holidays. If the date or last date to perform any act or to
give any Notice is a Saturday, Sunday, or state or national holiday, that act or
Notice may be timely performed or given on the next succeeding day which is not
a Saturday, Sunday, or state or national holiday.

(k)                                  If this Agreement is not signed
simultaneously by Seller and Purchaser it shall be considered to be an offer
made by the party first executing it to the other party. In this event that
offer shall expire at midnight on the fifth (5th) day following signature by the
offering party, unless by that time one copy signed by the party to whom the
offer has been made shall

--------------------------------------------------------------------------------

have been placed in the mail or personally delivered to the party making the
offer. “Effective Date” means the date upon which this Agreement is accepted by
the party to whom the offer is made.

(l)                                     The Title Company agrees to hold and to
disburse the Deposit in accordance with the terms of this Agreement. In
performing its duties as escrow agent, the Title Company shall not incur any
liability to anyone for any damages, losses or expenses, except for willful
default or breach of trust, and it shall accordingly not incur any such
liability with respect (i) to any action taken or omitted in good faith upon
advice of its counsel, or (ii) to any action taken or omitted in reliance upon
any instrument, including written notice or instruction provided for in this
Agreement, not only as to its due execution and the validity and effectiveness
of its provisions, but also as to the truth and accuracy of any information
contained therein, which Title Company shall in good faith believe to be
genuine, to have been signed or presented by a proper person or persons, and to
conform with the provisions of this Agreement. Seller and Purchaser (one-half
each) will reimburse and indemnify Title Company for and hold it harmless
against any loss, liability, or expense including, but not limited to,
reasonable attorneys’ fees, arising out of or in connection with its acceptance
of or performance of its duties and obligations under this Agreement and the
reasonable costs and expenses of defending any claim or liability arising out of
or relating to, this Agreement. The Title Company shall not be liable for any
loss or impairment of the Deposit while same is deposited in the escrow account.

14.                                 Seller’s Exchange. Seller reserves the right
to locate or cause to be located property of a like-kind suitable to Seller for
the purpose of effectuating one or more exchange transactions solely by the
transfer of this Agreement (but not title to the Property) by Seller to a
“qualified intermediary” selected by Seller (the “Accommodator’’) in connection
with a tax-deferred exchange as contemplated by Section 1031 of the Internal
Revenue Code of 1986, as amended. Purchaser agrees to execute an assignment of
this Agreement to the Accommodator but no deeds. Purchaser agrees to cooperate,
at no cost or expense to Purchaser, with Seller in connection with such
tax-deferred exchange, including the execution of such documents as may’ be
reasonably necessary to effectuate the same; provided that (a) the Closing Date
shall not be delayed as the result of such exchange; (b) all additional costs in
connection with such exchange shall be borne by Seller; (c) such exchange is
effectuated through an Accommodator; (d) Seller conveys title to the property
directly to Purchaser (or its permitted assignee) by direct deeding;  (e) Seller
shall indemnity Purchaser and hold Purchaser harmless from and against any and
all claims, demands, liabilities, costs, expenses, penalties, damages and
losses, including, without limitation, reasonable attorney fees relating to
Purchaser’s participation in such exchange; and (f) Seller agrees, in writing,
to remain bound by all of its warranties, representations and obligations under
this Agreement. This Agreement and Seller’s obligations hereunder are not
subject to or conditioned upon Seller’s ability to consummate an exchange.
Purchaser’s responsibility for reviewing exchange documents shall be limited to
determining whether the terms and conditions of such exchange documents are such
that they are in compliance with the foregoing provisions. Seller shall be
responsible for making all determinations as to the legal sufficiency or other
consideration, including but not limited to tax considerations, relating to such
exchange documents. Purchaser, in so cooperating in any exchange transaction
arranged by . Seller, shall in no event be responsible for, or in any way
warrant, the tax consequences of the exchange transaction.

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15.                                 Disclosure. THE PROPERTY DESCRIBED IN THIS
INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES.
THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS THAT, IN FARM OR FOREST
ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND THAT LIMIT
LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930 IN ALL
ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE
TITLE SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER ORS 197.352.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO
THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING
DEPARTMENT TO VERIFY APPROVED USES, THE EXISTENCE OF FIRE PROTECTION FOR
STRUCTURES AND THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS
197.352.

IN WITNESS WHEREOF, Seller and Purchaser have each caused this Agreement to be
executed as of the Effective Date.

[SIGNATURES ARE ON FOLLOWING PAGE]

--------------------------------------------------------------------------------

 

SELLER:

 

WKL Investments Airport, LLC,
an Oregon limited liability company

BUYER:

 

AVI BioPharma, Inc.
an Oregon corporation

 

 

 

 

By:

 

 

By:

 

 

Name:

  Mike Kelley

 

Name: Alan P. Timmins

Title:

 

 

Title: President and COO

 

 

FEIN:

  260053163

 

FEIN:

  93-0797222

 

 

 

Dated: March 1, 2007

Dated: March 1, 2007

 

TITLE COMPANY ACKNOWLEDGMENT:

The Title Company acknowledges and agrees to abide by the relevant terms of this
Agreement, including, without limitation, the terms of Paragraph 13(l) of the
Agreement.  The execution or non-execution of this acknowledgment by the Title
Company shall have no effect on the validity or effectiveness of the Agreement.

CHICAGO TITLE INSURANCE COMPANY

 

 

 

By:

 

 

 

Name:

 Jennifer Lyke

 

 

Title:

   Certified Escrow Officer

 

 

 

 

March 2, 2007

 

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DESCRIPTION OF THE LEASE

Lease Agreement dated August 22, 1996 between the City of Corvallis, Oregon, as
Landlord, and Riverside Investments & Development Co., and First Amendment to
Lease Agreement dated March 26, 2002

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LEGAL DESCRIPTION

Beginning at a point on the North right of way of SW Airport Ave., a 60’ right
of way, said point being North 50°East 1879.06 feet from the Southeast corner of
the Alfred Rhinehart Donation Land Claim No. 73, in Township 12 South, Range 5
West, Willamette Meridian, Benton County, Oregon; thence North 00°05’00” East,
320.00 feet; thence West 270.00 feet; thence North 00°05’36” East, 631.00 feet;
thence North 89°59’00” East, 270.53 feet; thence South 00°05’00” West, 354.50
feet; thence North 89°59’00” East, 431.73 feet to a point on the West right of
way of SW Plumley Street, a 70 foot right of way; thence along said West right
of way South 00°05’00” West, 7.16 feet; thence South 05°19’30” West, 290.92
feet; thence South, 299.80 feet to the North right of way of said SW Airport
Ave; thence West, 406.12 feet to the point of beginning.

--------------------------------------------------------------------------------

PERSONAL PROPERTY

Any and all personal property owned by Seller or Electroglas and locate din or
on the Improvements, with he exception of any documents and records and any
personal property that is proprietary to Electroglas.  Such personal property
shall include, but is not limited to, the following:

1.                                       Clean room

2.                                       Rooftop mounted McQuay air filtration
system.

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FIRST AMENDMENT TO REAL PROPERTY PURCHASE AGREEMENT

THIS FIRST AMENDMENT is made and entered into this 15th day of March, 2007, by
and between WKL Investments Airport, LLC, an Oregon limited liability company
(“Seller”) and AVI BioPharma, Inc., an Oregon corporation (“Purchaser”).

RECITALS:

A. By Real Property Purchase Agreement dated March 1,2007 (the “Purchase
Agreement”), Seller agreed to sell and Purchaser agreed to buy the Property, as
defined and described in the Purchase Agreement.

B. Certain of the contingencies of Seller and Buyer were required to be
satisfied by March 15, 2007, but they will not be satisfied by such date. The
parties desire to extend the date, as set forth herein, for the satisfaction of
certain of the contingencies in favor of Seller and Purchaser as set forth in
the Purchase Agreement.

NOW, THEREFORE, it is agreed as follows:

1.                                       Defined Terms.

All defined terms used herein shall have the meanings set forth in the Purchase
Agreement.

2.                                       Waiver/Satisfaction of Purchaser’s
Conditions Precedent.

Purchaser’s conditions precedent set forth in Section 3(b) and 3(c) of the
Purchase Agreement are hereby satisfied and waived.

3.                                       Extension of Time With Respect to
Purchaser’s Conditions Precedent.

3.1                                 The time period within which to obtain the
Consent and the Estoppel Certificate referenced in Section 3(d) of the Purchase
Agreement is hereby extended through 5 p.m. Pacific Time, on March 20, 2007.

3.2                                 The time period within which to satisfy the
condition set forth in Section 3( e) of the Purchase Agreement is hereby
extended until 5 p.m. Pacific Time, on March 30, 2007.

4.                                       Satisfaction and Waiver of Seller’s
Conditions Precedent.

Seller’s condition precedent set forth in Section 4(a)(iii) of the Purchase
Agreement is satisfied and waived.

5.                                       Extension of Time With Respect to
Seller’s Conditions Precedent.

5.1                                 The period of time for Seller to satisfy the
conditions precedent set forth in Section 4(a)(i) of the Purchase Agreement is
hereby extended through 5 p.m. Pacific Time, on March 20, 2007.

--------------------------------------------------------------------------------

5.2                                 The time period to satisfy the contingency
set forth in Section 4(a)(ii) of the Purchase Agreement is hereby extended until
5 p.m. Pacific Time, on March 30, 2007.

6.                                       Additional Deposit.

The obligation of Purchaser to deliver the additional earnest money deposit as
set forth in Section I (b) of the Purchase Agreement shall be delayed until
Purchaser has satisfied or waived all of the conditions precedent extended in
Section 3 above.

7.                                       Counter Parts.

This Agreement may be executed in any number of counterparts, provided each of
the parties hereto executes at least one counterpart; each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one Agreement.

8.                                       Facsimile and PDF Signatures.

In order to expedite the transaction contemplated herein, telecopied and PDF
signatures may be used in place of original signatures on this Agreement or any
document delivered pursuant hereto. The parties intend to be bound by the
signatures on the telecopied document or such PDF copies, and are aware that the
other parties will rely on the telecopied or PDF signatures, and hereby waive
any defenses to the enforcement of the terms of this Agreement based on such
telecopied or PDF signature.

9.                                       Status of Agreement.

The Purchase Agreement, as amended hereby, shall remain in full force and
effect.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first above written.

SELLER:

PURCHASER:

 

 

WKL Investments Airport, LLC,
an Oregon limited liability company

AVI BioPharma, Inc.,
an Oregon corporation

 

 

 

 

By:

 

 

By:

 

 

            Michael L. Kelley

            Alan P. Timmins

Its:  Authorized Representative

Its:  President and COO

 

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SECOND AMENDMENT TO REAL PROPERTY PURCHASE AGREEMENT

THIS SECOND AMENDMENT (“Second Amendment”) is made and entered into this
19th day of April, 2007, by and between WKL Investments Airport, L.L.C., an
Oregon limitedliabi1ity company (“Seller”) and A VI BioPharma, Inc., an Oregon
corporation (“Purchaser”).

RECITALS:

A.                                   By Real Property Purchase Agreement dated
March 1,2007, and amended by First Amendment to Real Estate Purchase Agreement
(collectively the “Purchase Agreement”), Seller agreed to sell and Purchaser
agreed to buy the Property, as defined and described in the Purchase Agreement.

B.                                     Certain of the contingencies of Seller
and Buyer which were required to be satisfied no later than April 3, 2007, have
not been satisfied by such date. .The parties desire to extend the date, as set
forth herein, for the satisfaction of certain of the contingencies in favor of
Seller arid Purchaser, as set forth in the Purchase Agreement.

NOW, THEREFORE, it is agreed as follows:

1.                                       Defined Terms.

All defined terms used herein shall have the meanings set forth in the Purchase
Agreement, except as set forth herein.

2.                                       Confirmation of Waiver/Satisfaction of
Purchaser’s Conditions Precedent.

Purchaser confirms and agrees that Purchaser’s conditions precedent set forth in
Section 3(a), 3(b), 3(c) and 3(d) of the Purchase Agreement are satisfied and/or
waived.

3.                                       Confirmation of Waiver/Satisfaction of
Seller’s Conditions Precedent.

Seller confirms and agrees that Seller’s conditions precedent set forth in
Sections 4(a)(i) and (iii) are satisfied and/or waived.

4.                                       The Loans.

Lender has refused to allow Purchaser to assume the Loans and to release Seller
and all guarantors (“Guarantors”) from all future liability with respect to the
Loans. The Lender is requiring an assignment of the Loans and Loan Documents
(without an assumption) from Seller to Purchaser, without allowing Purchaser to
assume the Loans as a condition of Lender consenting to the assignment of the
lessee’s interest in the Lease. In 1ieu of Seller obtaining a Loan Release, and
Purchaser obtaining the Loan Commitment, Seller and Purchaser agree to the
following:

4.1                                 Seller and Guarantors shall remain liable
for the performance of the terms and conditions contained in the documents and
agreements relating to and evidencing the Loans

--------------------------------------------------------------------------------

(the “Loan Documents”). The Lender has refused to give any notice of default to
Purchaser of a default under the Loan Documents (a “Loan Default”). In the event
that Seller receives a notice of a Loan Default, Seller shall immediately send a
copy of such notice to Purchaser.

4.2                                 Lender shall consent to the assignment of
the Ground Lease to Purchaser and acknowledge that such assignment will not
violate the terms of the Loan Documents (the “Consent”), all on terms and
conditions acceptable to Seller and Purchaser. Purchaser shall be responsible
for all costs and expenses charged by the Lender relating to the Consent,
including, without limitation, title insurance policy fees and attorney fees and
out-of-pocket costs charged by the Lender.

4.3                                 The satisfaction of the matters set forth in
Sections 4.1 and 4.2 (collectively the “Remaining Contingencies”) are, and shall
be, conditions precedent to the obligation of both Seller and Purchaser to
consummate the transaction that is the subject of the Purchase Agreement. Upon
the satisfaction of the Remaining Contingencies, the Purchaser’s condition
precedent set forth in Section 3(e) of the Purchase Agreement and the Seller’s
condition precedent set forth in. Section 4(a)(ii) of the Purchase Agreement
shall be deemed satisfied.  Seller and Purchaser shall use their commercially
reasonable efforts to satisfy the Remaining Contingencies as soon as reasonably
possible. The .Remaining Contingencies shall be satisfied, if at all, on or
before April 19, 2007. If the Remaining Contingencies are not satisfied by April
19, 2007, this Agreement shall automatically terminate, the Deposit shall be
returned to Purchaser and neither party shall have any further obligation to the
other, except as expressly provided otherwise in the Purchase Agreement.

5.                                       Performance of Obligation Relating: to
the Loan.

5.1                                 Payments. Inasmuch as Lender has refused to
accept monthly payments of principal and interest on the Loan directly from
Purchaser, Purchaser shall pay to Seller, monthly, the monthly payments of
principal and interest due under the Loan Documents, on or before three (3)
Business Days (calendar days, exclusive of Saturdays, Sundays and State of
Oregon and federal holidays) prior to the date that principal and interest is
due under the Loan Documents. Upon receipt of such payments, Seller shall make
the principal and interest payments then due under the Loan Documents.

5.2                                 Seller’s Obligations. In addition to the
principal and interest payments referenced in Section 5.1, Seller agrees that it
will provide (and cause the Guarantors to provide) any and all financial
statements and reports required to be provided by Seller and the Guarantors
pursuant to the Loan Documents, together with any other information required by
Lender, in a timely manner, and Seller covenants and agrees to maintain Seller’s
entity status and financial covenants as set forth in the Loan Documents.
Seller’s obligations referenced in this Section 5.2 and its conditional
obligations to make the monthly payments of principal and interest as set forth
in Section 5.1 are referred to herein collectively as the “Retained
Obligations.”

5.3                                 Purchaser’s Obligations. Except as set forth
herein, Purchaser shall, on behalf of Seller, perform all of the other
provisions required to be performed by Seller under the provisions of the Loan
Documents, including, without limitation, the payment of real property taxes and
providing insurance coverages.

--------------------------------------------------------------------------------

6.                                       Performance of Lease Obligations.

As part of the sale of the Property by Seller to Purchaser, Seller is assigning
to Purchaser the lessee’s interest in the Lease. Purchaser has agreed to perform
all of the terms and provisions of the Lease incumbent upon the lessee
thereunder to perform from and after the Closing Date.  If Purchaser shall fail
to perform the obligations of the lessee under the Lease, Seller shall have the
right, but not the obligation, to perform the obligations of the lessee under
the Lease for and on behalf of Purchaser.  In such event, Purchaser shall
immediately repay, upon demand by Seller, all amounts paid by Seller with
respect to the performance by Seller of the lessee’s obligations under the
Lease.

7.                                       Additional Deposit.

The obligation of Purchaser to deliver the additional earnest money deposit as
set forth in Section 1(b) of the Purchase Agreement is hereby deleted.

8.                                       Extension of the Closing Date.

The Closing Date shall occur as soon as possible, but not later than April 20,
2007.

9.                                       Indemnity by Purchaser.

In consideration of Seller and Guarantors remaining liable on the Loans as set
forth in Section 4.1 of this Second Amendment, Purchaser hereby agrees to
defend, indemnify and hold harmless Seller and Guarantors from and against any
and all losses, claims, damages and expenses, including attorney fees incurred
by Seller and/or Guarantors asserted by Lender arising out of or related to the
Loans from and after the Date of Closing, except for any and all losses, claims,
damages and expenses relating to the failure of Seller and Guarantors to perform
the Retained Obligations. It is agreed by Seller and Purchaser that between them
Purchaser shall be primarily responsible for the performance of all of the
provisions of the Loan Documents, except for the Retained Obligations, and that
Seller is being required to remain liable for the performance of the provisions
of the Loan Documents as a requirement of the Lender.

10.                                 Security for Indemnity.

As security for the indemnity obligations of Purchaser set forth in Section 9 of
this Second Amendment, and the performance of the obligations of Purchaser as
set forth in Sections 5 and 6 of this Second Amendment, Purchaser shall:

10.1                           Control Account. Deposit with Seller the sum
of$125,000.00 (the “Security Deposit”) to be placed in an interest-bearing
account (with the type of account selected by Purchaser with Seller’s reasonable
consent) (the “Account”) with Pacific West Bank (“Pacific West”). Purchaser
hereby pledges to Seller the Account (and all interest earned on the Account) as
security to Seller for the performance of Purchaser’s indemnity obligations set
forth in Section 9 as security for the performance by Purchaser of the terms and
provisions of the Loan Documents as set forth in Sections 5.1and 5.3and the
performance by Purchaser of the lessee’s obligations under the Lease as set
forth in Section 6 of this Second Amendment. All interest earned on the Account
shall be added to the Account and become part of the Account. Purchaser

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shall be responsible for the payment of all federal and state income taxes
relating to the Account. The interest earned on the Account shall be reported to
Purchaser’s identification number.

At Closing, Purchaser shall execute and deliver to Seller, and Seller shall have
the right to file, any and all documents reasonably requested by Seller to
perfect Seller’s security interest in the Account. Without limiting the
generality of the foregoing, Purchaser and Pacific West shall execute an Account
Control Agreement in favor of Seller, in the form set forth in Exhibit A
attached hereto.

10.2                           Additional Security. Purchaser shall collaterally
assign and grant to Seller as additional security for the performance of its
obligations to perform the terms and provisions of the Loan Documents as set
forth in Sections 5.1 and 5.3 and as additional security for the indemnity
obligations set forth in Section 9 of this Second Amendment, and as additional
security for the performance of the obligations set forth in Section 6 of this
Second Amendment,. a-security interest in the lessee’s interest in the Lease,
such assignment to be approved by the Lender, said approval to such collateral
assignment being a condition precedent to Seller’s obligation to consummate the
transaction which is the subject of the Purchase Agreement.  Seller acknowledges
that such collateral assignment is subject to Lender’s prior security interest
in the Lessee’s Interest in the. Ground Lease.  At Closing, Purchaser shall
execute and deliver to Seller, and Seller shall have the right to file, any and
all documents reasonably requested by Seller, to perfect Seller’s security
interest in and to the lessee’s interest in and to the Lease. Seller
acknowledges and agrees that it shall not have the right to take possession of
the premises which is the subject of the Ground Lease unless there exists an
uncured default under the Loan Documents attributable to Purchaser or an uncured
default under the Lease or Purchaser defaults in the performance of its
indemnity obligation set forth herein. At Closing, Purchaser, at its cost and
expense, shall cause the Title Company to issue to Seller a standard Lender’s
title insurance policy in the unpaid principal balance of the Loans insuring the
lessee’s interest in the Lease vested in Purchaser.

11.                                 Modification to Section 3 and Section 4 of
the Purchase Agreement.

11.1                           Sections 3(f) and 4(b). For purposes of Section
3(f) of the Purchase Agreement and Section 4(b) of the Purchase Agreement,
reference therein to the “Loan Commitment” and to “Loan Release” shall mean and
refer to the Remaining Contingencies and the execution and delivery of the
documents relating thereto.

11.2                           Section 4(b).  Section 4(b) of the Purchase
Agreement is amended by adding thereto as a condition of Seller’s obligation to
consummate the transaction which is the subject of the Purchase Agreement that
Purchaser execute and deliver to Seller, and to allow Seller to file, any and
all documents reasonably requested by Seller to perfect its security interest in
the Account and the lessee’s interest in the Lease. The failure of Purchaser to
execute and deliver to Seller any such documents, or to allow Seller to file any
such documents, shall constitute a default under the provisions of the Purchase
Agreement by Purchaser.

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12.                                 Amendment to Section 6 of the Purchase
Agreement.

Purchaser shall be responsible for all costs and expenses associated with
perfecting the security interest granted to Seller in this Second Amendment.
Additionally, Purchaser shall pay for the title premium costs associated with
Seller obtaining a lender’s title insurance policy insuring Seller’s security
interest in the lessee’s interest in the Lease.

13.                                 Determination of Number of Shares.

The Purchase Agreement required the Closing to occur on or before April 16, 2007
and contemplated that Seller and Guarantors would be released at the Closing
from their respective obligations under the Loan Documents. As partial
consideration for Seller agreeing to extend the Date of Closing and for Seller
and Guarantors agreeing to remain obligated to Lender under the . Loan
Documents, Purchaser has agreed to base the period on which the average daily
closing share price of the Common Stock is determined pursuant to the terms of
Section. l( c)(i} of the Purchase Agreement on the originally agreed to outside
Closing Date of April 16, 2007.  Accordingly, Seller and Purchaser agree that
Purchaser will deliver 270,758 shares of Common Stock at the. Closing.

14.                                 Counterparts.

This Agreement may be executed in any number of counterparts, provided each of
the parties hereto executes at least one counterpart; each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one Agreement.

15.                                 Facsimile and PDF Signatures.

In order to expedite the transaction contemplated herein, telecopied and PDF
signatures may be used in place of original signatures on this Agreement or any
document delivered pursuant hereto. The parties intend to be bound by the
signatures on the telecopied document or such PDF copies, and are aware that the
other parties will rely on the telecopied or PDF signatures, and hereby waive
any defenses to the enforcement of the terms of this Agreement based on such
telecopied or POF signature.

16.                                 Status of Agreement.

The Purchase Agreement, as amended hereby, shall remain in full force and
effect.

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date first above written.

[SIGNATURES ARE ON FOLLOWING PAGE]

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SELLER:

 

WKL Investments Airport, LLC

an Oregon limited liability company

 

 

PURCHASER:

 

AVI BioPharma, Inc.

an Oregon corporation

 

 

By:

 

 

By:

 

 

            Michael L. Kelley

Its:  Authorized Representative

            Alan P. Timmins

Its:  President and COO

 

Exhibits:

A - Account Control Agreement

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