Exhibit
10.46


 


NEITHER THESE SECURITIES NOR
THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.


 


AVI
BIOPHARMA, INC.


 


WARRANT


 


	
  Warrant No.
  [  ]

  	
   

  	
  Date of Original
  Issuance: May 5, 2003

  



 


AVI BioPharma, Inc., an
Oregon corporation (the “Company”), hereby certifies that, for value received,
[Name of Holder] or its registered assigns (the “Holder”), is entitled to
purchase from the Company up to a total of          
shares of common stock, $.0001 par value per share (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such shares, the “Warrant
Shares”) at an exercise price (as adjusted from time to time as provided in
Section 9, the “Exercise Price”) per Warrant Share equal to $7.00 at any time
and from time to time from and after the date hereof and through and including
May 5, 2008 (the “Expiration Date”), and subject to the following terms and
conditions:


 


1.                                       Definitions.  In addition to the terms defined elsewhere
in this Warrant, capitalized terms that are not otherwise defined herein and
that are defined in the Securities Purchase Agreement, dated as of May 5, 2003,
between the Company and the original Holder (the “Purchase Agreement”), shall
have the meanings given to such terms in the Purchase Agreement.


 

















 


2.                                       Registration
of Warrant.  The Company shall
register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.


 


3.                                       Registration
of Transfers.  The Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto
duly completed and signed, to the Transfer Agent or to the Company at its
address specified herein.  Upon any such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. 
The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations
of a holder of a Warrant.


 


4.                                       Exercise
and Duration; Early Call


 


(a)          Subject to the provisions of Section 4(b),
this Warrant shall be exercisable by the registered Holder at any time and from
time to time on or after the date hereof to and including the Expiration
Date.  At 6:30 p.m., New York City time,
on the Expiration Date, the portion of this Warrant available for exercise and
not exercised prior thereto shall be and become void and of no value.


 


(b)         If at
any time after November 5, 2004, (1) the closing price per share of the Common
Stock as reported on Bloomberg has exceeded $12.50 (as appropriately adjusted
for any stock splits, stock dividends or stock combinations after the date
hereof) for a period of ten (10) consecutive Trading Days (the “Determination
Period”) and (2) a registration statement covering resales of the Common
Stock issuable upon exercise of the Warrants has been effective and available
for use at all times required pursuant to the Registration Rights Agreement and
is expected to remain effective and available for use until at least the last
date on which the registration statement is required to be kept effective under
the terms of the Registration Rights Agreement, then the Company may, at its
sole option, provide all of the Holders irrevocable written notice (“Call
Notice”) requiring all of the Holders to fully exercise all Warrants as of the
Call Date (as defined below).  If all of
the conditions described herein have been satisfied and continue to be
satisfied through the Call Date, any Warrant not exercised before the close of
business on the Call Date, shall automatically be deemed exercised in
accordance with Section 5(a) as of the close of trading on the Call Date and
the Company will deliver the Warrant Shares to the Holder upon receipt of a
completed Exercise Notice along with the original copy of the Warrant for
cancellation (or an affidavit of lost Warrant in accordance with Section 12)
and payment for the Warrant Shares as provided herein.  “Call Date” shall mean that Trading Day that
is at least thirty (30) days following the date on which the Company has given
the Call Notice to the Holders.


 


2

















 


5.                                       Delivery
of Warrant Shares.


 


(a)          Upon delivery of the Form of Election to
Purchase (in the form of Exhibit A) (“Exercise Notice”) to the Company (with
the Warrant Shares Exercise Log in the form of Exhibit B hereto) at its address
for notice set forth in Section 13 and (i) upon payment of the Exercise Price
multiplied by the number of Warrant Shares that the Holder intends to purchase
hereunder or (ii) upon notifying the Company that this Warrant is being
exercised pursuant to a Cashless Exercise (as defined in Section 5(e)), the
Company shall promptly (but in no event later than three (3) Trading Days after
the Date of Exercise (as defined herein)) issue and deliver to the Holder, a
certificate for the Warrant Shares issuable upon such exercise free of
restrictive legends unless otherwise required by the Purchase Agreement.  The Company shall, upon request of the
Holder, if available, use its best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation.


 


A “Date of Exercise” means the date on which the Holder shall have
delivered to the Company (i) the Form of Election to Purchase (with the Warrant
Exercise Log attached to it), appropriately completed and duly signed and (ii)
(A) payment of the Exercise Price for the number of Warrant Shares so indicated
by the Holder to be purchased or (B) notification to the Company that this
Warrant is being exercised pursuant to a Cashless Exercise.


 


(b)         If by the fifth Trading Day after a Date of
Exercise the Company fails to deliver the required number of Warrant Shares in
the manner required pursuant to Section 5(a), then the Holder will have the
right to rescind such exercise.


 


(c)          If by the third Trading Day after a Date of
Exercise the Company fails to deliver the required number of Warrant Shares in
the manner required pursuant to Section 5(a), and if after such fifth Trading
Day the Holder purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in
cash to the Holder the amount by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of
Warrant Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue by (B) the closing price of the Common
Stock at the time of the obligation giving rise to such purchase obligation and
(2) at the option of the Holder, either reinstate the portion of the Warrant
and equivalent number of Warrant Shares for which such exercise was not honored
or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and delivery
obligations hereunder.  For example, if
the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common Stock
with a market price on the date of exercise totaled $10,000, under clause (1)
of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000.  The Holder shall provide
the Company written notice, which notice shall include such supporting
documentation as reasonably necessary to substantiate the amounts payable,
indicating the amounts payable to the Holder in respect of the Buy-In.


 


3

















 


(d)                                 The
Company’s obligations to issue and deliver Warrant Shares in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.


 


(e)                                  If
at any time after one year from the date of issuance of this Warrant there is
no effective registration statement registering the resale of the shares of
Common Stock issuable upon exercise of this Warrant by the Holder, then,
notwithstanding anything contained herein to the contrary, the Holder of this
Warrant may, at its election exercised in its sole discretion, exercise this
Warrant in whole or in part and, in lieu of paying the Exercise Price in cash,
elect instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (a “Cashless Exercise”):


 


Net Number = (A x B) -
(A x C)


B


 


For purposes of the
foregoing formula:


 


A= the total number of
shares with respect to which this Warrant is then being exercised;


 


B= the greater of the (i)
closing price per share of the Common Stock (as reported by Bloomberg) on the
Trading Day immediately preceding the date of the Exercise Notice or (ii) the
average of the closing prices per share of Common Stock (as reported by
Bloomberg) for the ten (10) Trading Days immediately preceding the date of the
Exercise Notice ; and


 


C= the Exercise Price
then in effect for the applicable Warrant Shares at the time of such exercise.


 


6.                                       Charges,
Taxes and Expenses.  Issuance and
delivery of certificates for shares of Common Stock upon exercise of this
Warrant shall be made without charge to the Holder for any issue or transfer
tax, withholding tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the 


 


4

















 


Company; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder.  The Holder shall be responsible
for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise hereof.


 


7.                                       Replacement
of Warrant.  If this Warrant is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.  Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe.


 


8.                                       Reservation
of Warrant Shares.  The Company
covenants that it will at all times reserve and keep available out of the
aggregate of its authorized but unissued and otherwise unreserved Common Stock,
solely for the purpose of enabling it to issue Warrant Shares upon exercise of
this Warrant as herein provided, the number of Warrant Shares which are then
issuable and deliverable upon the exercise of this entire Warrant. The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.


 


9.                                       Certain
Adjustments.  The Exercise Price and
number of Warrant Shares issuable upon exercise of this Warrant are subject to
adjustment from time to time as set forth in this Section 9.


 


(a)          Stock Dividends and Splits.  If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding
immediately after such event.


 


(b)         Pro Rata Distributions.  If the Company, at any time while this
Warrant is outstanding, distributes to all holders of Common Stock (i)
evidences of its indebtedness, (ii) any security (other than a distribution of
Common Stock covered by the preceding paragraph), (iii) rights or warrants to
subscribe for or purchase any security, or (iv) any other asset (in each case,
“Distributed Property”), then, at
the request of any Holder delivered before the 90th day after the record date
fixed for determination of stockholders entitled to receive such distribution,
the Company will deliver to such Holder, within five (5) Trading Days after
such request (or, if later, on the effective date of such distribution), the
Distributed Property that such Holder would have been entitled to receive in
respect of the Warrant Shares for which such Holder’s Warrant could have been
exercised immediately prior to such record date.  If such Distributed Property is not delivered to a Holder
pursuant to the preceding sentence, then upon any exercise of the Warrant


 


5

















 


that occurs after such record date, such Holder shall be entitled to
receive, in addition to the Warrant Shares otherwise issuable upon such
conversion, the Distributed Property that such Holder would have been entitled
to receive in respect of such number of Warrant Shares had the Holder been the
record holder of such Warrant Shares immediately prior to such record date.


 


(c)  Fundamental Transactions.  If, at any time while this Warrant is
outstanding: (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property, or (iv)
the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
same amount and kind of securities, cash or property as it would have been
entitled to receive upon the occurrence of such Fundamental Transaction if it
had been, immediately prior to such Fundamental Transaction, the holder of the
number of Warrant Shares then issuable upon exercise in full of this Warrant
(the “Alternate Consideration”).  For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one (1) share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction.  At the
Holder’s option and request, any successor to the Company or surviving entity
in such Fundamental Transaction shall issue to the Holder a new warrant
substantially in the form of this Warrant and consistent with the foregoing
provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof.  The terms of any agreement pursuant to which
a Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(c) and insuring that the Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.


 


(d)                                 Intentionally
omitted.


 


(e)                                  Number
of Warrant Shares.  Simultaneously
with any adjustment to the Exercise Price pursuant to paragraphs (a) or (b) of
this Section, the number of Warrant Shares that may be purchased upon exercise
of this Warrant shall be increased or decreased proportionately, so that after
such adjustment the aggregate Exercise Price payable hereunder for the adjusted
number of Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.


 


(f)                                    Calculations.  All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable.  The number of shares of
Common Stock 


 


6

















 


outstanding at
any given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an
issue or sale of Common Stock.


 


(g)                                 Notice
of Adjustments.  Upon the occurrence
of each adjustment pursuant to this Section 9, the Company at its expense
will promptly compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant
Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based.  Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company’s Transfer Agent.


 


(h)                                 Notice
of Corporate Events.  If the Company
(i) declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including without limitation any
granting of rights or warrants to subscribe for or purchase any capital stock
of the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to the
Holder a notice describing the material terms and conditions of such
transaction, at least twenty (20) calendar days prior to the applicable record
or effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given
the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however,
that the failure to deliver such notice or any defect therein shall not affect
the validity of the corporate action required to be described in such notice
and provided that such information shall be publicly disclosed pursuant to
Regulation FD prior to or in conjunction with such notice being provided to the
Holder.


 


10.                                 Payment
of Exercise Price.  The Holder shall
pay the Exercise Price in cash by delivering immediately available funds or, if
permitted by Section 5(e), through a Cashless Exercise.


 


11.                                 Limitation
on Exercise.


 


(a)          Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons
whose beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed
4.999% of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such exercise).  For such purposes, beneficial ownership
shall be determined in accordance with


 


7

















 


Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder.  Each delivery
of an Exercise Notice hereunder will constitute a representation by the Holder
that it has evaluated the limitation set forth in this paragraph and determined
that issuance of the full number of Warrant Shares requested in such Exercise
Notice is permitted under this paragraph. 
By written notice to the Company, the Holder may waive the provisions of
this Section but (i) any such waiver will not be effective until the 61st day
after such notice is delivered to the Company, and (ii) any such waiver will
apply only to the Holder and not to any other holder of Warrants.


 


(b)         Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons
whose beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed
9.999% of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such
exercise).  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder.  Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this paragraph and determined that issuance of the
full number of Warrant Shares requested in such Exercise Notice is permitted
under this paragraph.  By written notice
to the Company, the Holder may waive the provisions of this Section but (i) any
such waiver will not be effective until the 61st day after such notice is
delivered to the Company, and (ii) any such waiver will apply only to the
Holder and not to any other holder of Warrants.


 


12.                                 No
Fractional Shares.  No fractional
shares of Warrant Shares will be issued in connection with any exercise of this
Warrant.  In lieu of any fractional
shares which would, otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the closing price of one Warrant
Share as reported on the Eligible Market on the date of exercise.


 


13.                                 Notices.  Any and all notices or other communications
or deliveries hereunder (including without limitation any Exercise Notice or
Call Notice) shall be in writing and shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section prior
to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day
after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.  The addresses for such communications shall
be:  (i) if to the Company, to AVI
BioPharma, Inc., One S.W. Columbia, Suite 1105, Portland, Oregon 97258,
Attention: Alan P. Timmins (facsimile: 503-227-0751) with a copy to Hurley,
Lynch & Re, P.C., 747 SW Mill View Way, Bend, OR 97702, Attention: Robert
A. Stout, Esq. (facsimile: 541-317-5507) or (ii) if to the Holder, to the
address or facsimile number appearing on the Warrant


 


8

















 


Register or such other
address or facsimile number as the Holder may provide to the Company in
accordance with this Section.


 


14.                                 Warrant
Agent.  The Company shall serve as
warrant agent under this Warrant.  Upon
thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or
any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or
any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business
shall be a successor warrant agent under this Warrant without any further
act.  Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed (by
first class mail, postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.


 


15.                                 Miscellaneous.


 


(a)          This Warrant shall be binding on and inure to
the benefit of the parties hereto and their respective successors and
assigns.  Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to any Person
other than the Company and the Holder any legal or equitable right, remedy or
cause of action under this Warrant.  This
Warrant may be amended only in writing signed by the Company and the Holder and
their successors and assigns.


 


(b)         All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated
by this Warrant (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced in the state and federal courts sitting in the City of New York,
Borough of Manhattan.  Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Warrant), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper.  Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party hereto
(including its affiliates, agents, officers, directors and employees) hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Warrant or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Warrant,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorneys fees and other costs and


 


9

















 


expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.


 


(c)          The headings herein are for convenience only,
do not constitute a part of this Warrant and shall not be deemed to limit or
affect any of the provisions hereof.


 


(d)         In case any one or more of the provisions of
this Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.


 


IN WITNESS WHEREOF, the Company has caused this Warrant
to be duly executed by its authorized officer as of the date first indicated
above.


 


	
   

  	
  AVI BIOPHARMA, INC.

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Alan P. Timmins.

  
	
   

  	
  Title:

  	
  President and
  Chief Operating

  Officer

  
					



 


10

















 


Exhibit
A


 


FORM
OF ELECTION TO PURCHASE


 


To AVI BioPharma, Inc.:


 


In accordance with
Warrant No. [  ] issued to the undersigned, the undersigned hereby
elects to purchase
                                 
shares of common stock (“Common Stock”),
[$       ] par value per share, of AVI
BioPharma, Inc.


 


1.  Form of Warrant Exercise Price.  The Holder intends that payment of the
Exercise Price shall be made as:


 


“Cash Exercise” with
respect to
                                        
Warrant Shares; and/or


 


“Cashless Exercise” with
respect to
                                        
Warrant Shares (to the extent permitted by the terms of the Warrant).


 


2.  Payment of Exercise Price.  In the event that the holder has elected a
Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the sum of
$                              
to the Company in accordance with the terms of the Warrant.


 


By its delivery of this
Form of Election To Purchase, the Holder represents and warrants to the Company
that in giving effect to the exercise evidenced hereby the Holder will not
beneficially own in excess of the number of shares of Common Stock (determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted
to be owned under Section 11 of this Warrant to which this notice relates.


 


The undersigned requests
that certificates for the shares of Common Stock issuable upon this exercise be
issued in the name of


 


PLEASE INSERT SOCIAL
SECURITY

OR TAX IDENTIFICATION
NUMBER:                                        


 


Please print name and
address


 


 


 

















 


Exhibit B


 


Warrant Shares Exercise Log


 


	
  Date

  	
   

  	
  Number of Warrant

  Shares Available to

  be Exercised

  	
   

  	
  Number of Warrant

  Shares Exercised

  	
   

  	
  Number of Warrant

  Shares Remaining to

  be Exercised

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Exhibit
C


 


FORM
OF ASSIGNMENT


 


[To
be completed and signed only upon transfer of Warrant]


 


FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto
                                                   
the right represented by the within Warrant to purchase
                                
shares of Common Stock of AVI BioPharma, Inc. to which the within Warrant
relates and appoints
                                         
attorney to transfer said right on the books of AVI BioPharma, Inc. with full
power of substitution in the premises.


 


	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
  (Signature must
  conform in all respects to name of holder as specified on the face of the
  Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address of
  Transferee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  In the presence of: