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 











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.











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.











(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 











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 











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.











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 











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

   

  



 











 


	
  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, 











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.











(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 











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.











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

  
						



 















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











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.











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

  
						



 











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 











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.











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]











 


	
  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