Exhibit 10.57


SERIES A-2 PREFERRED STOCK


AND COMMON STOCK PURCHASE AGREEMENT


This Series A-2 Preferred Stock and Common Stock
Purchase Agreement (this “Agreement”) is
entered into as of December 19, 2006 by and among Ercole Biotech, Inc., a
Delaware corporation (the “Ercole”), and
AVI BioPharma, Inc. (“AVI”).


WHEREAS, Ercole and AVI are parties to that certain
Collaboration and License Agreement, dated of even date herewith (the “Collaboration Agreement”);


WHEREAS,
in connection with entering into the Collaboration Agreement with Ercole, AVI
desires to acquire shares of Ercole’s Series A-2 Preferred Stock, par value
$0.001 per share (the “Series A-2 Preferred”);
and Ercole desires to sell such shares of Series A-2 Preferred upon the terms
set forth herein; and


WHEREAS,
AVI has agreed to issue to Ercole, as consideration to be paid for the Series
A-2 Preferred, shares of freely tradeable common stock of AVI, par value $.0001
per share (the “AVI Common Stock”), which shares
have been registered in a shelf offering registration on a Form S-3
registration statement declared effective by the SEC and currently in effect,
SEC No. 333-109015 (the “Shelf Registration”),
pursuant to the terms set forth herein.


NOW, THEREFORE, in consideration of the mutual
promises, representations, warranties, covenants and conditions set forth in
this Agreement, Ercole and AVI mutually agree as follows:


1.             Authorization and
Sale of Stock.


1.1           Authorization.  Ercole has authorized the issuance and sale
of up to an aggregate of Six Hundred Twenty-Five Thousand (625,000) shares of
the Series A-2 Preferred (the “Ercole Shares”).


1.2           Sale
and Payment for Ercole Shares. 
Subject to the terms and conditions of this Agreement, Ercole hereby
agrees to issue and sell to AVI and AVI hereby agrees to purchase from Ercole
all of the Ercole Shares for an aggregate purchase price of $675,000  (the “Purchase Price”)
consisting of one hundred ninety-two thousand, eight hundred fifty-seven (192,857)
registered and freely tradeable shares
of AVI Common Stock (the “AVI Shares”).


1.3           Sale of AVI Shares by Ercole. 
Ercole may sell the AVI Shares at its discretion, provided, however,
that Ercole shall sell in any single trading day no more than 60,000 shares and
no single trade shall involve the sale of more than 20,000 shares.


2.             Closing; Delivery.


2.1           Closing.  The closing of the sale and issuance of the
Ercole Shares to AVI and of the AVI Shares to Ercole (the “Closing”),
shall take place at 10:00 a.m. (ET) on December 22, 2006, or such earlier date
as mutually agreed by the parties (the “Closing Date”),













at the offices of Hutchison Law Group PLLC, 5410 Trinity Road, Suite
400, Raleigh, North Carolina 27607 by electronic transmission or hand delivery
of documents, or at such other time and place as Ercole and AVI agree. 


2.2           Delivery.  At the Closing, subject to the terms and
conditions hereof, Ercole will deliver to AVI a certificate, in such
denomination and registered in such name or names as AVI may designate by
notice to Ercole prior to the Closing, representing the Ercole Shares to be
purchased by AVI from Ercole at the Closing, dated the date of the Closing
against delivery of the AVI Shares.  AVI
will deliver or cause to be delivered via DWAC or other common means of
electronic share transfer to Ercole’s designated brokerage account the AVI
Shares registered in such name or names as Ercole may designate by notice to
AVI prior to Closing. 


3.             Representations
and Warranties of Ercole.  Subject to
and except as disclosed by Ercole in the Schedule of Exceptions attached hereto
and incorporated herein by reference (the “Ercole Schedule of
Exceptions”), Ercole represents and warrants to AVI that: 


3.1           Organization
and Standing.  Ercole is a
corporation duly organized, validly existing, and in good standing under the
laws of its state of incorporation, and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now conducted and as currently proposed to be conducted.  Ercole is duly qualified and authorized to do
business, and is in good standing as a foreign corporation, in each
jurisdiction where the nature of its activities and of its properties (both
owned and leased) makes such qualification necessary, except where the failure
to be so qualified would not have a material adverse effect upon the business,
financial condition or results of operation (a “Material
Adverse Effect”) of Ercole. 


3.2           Capitalization.  The authorized capital of Ercole immediately
prior to the Closing is as set forth on Schedule 3.1.


3.3           Corporate
Power.  Ercole has the requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement, including without limitation, to issue the Ercole Shares.



3.4           Authorization.  All corporate action on the part of Ercole
and its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Certificate (as defined in
Section 5.5), the performance of all of Ercole’s obligations thereunder, and
the authorization, issuance, sale and delivery of the Ercole Shares and the
securities issuable upon the conversion of the Ercole Shares (collectively, the
“Securities”) has been or will be taken
prior to Closing.  This Agreement when
executed by Ercole and the parties hereto shall constitute a valid and legally
binding obligation of Ercole enforceable in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency and the
relief of debtors, rules and laws governing specific performance, injunctive
relief and other equitable remedies. 


3.5           Valid Issuance of
Securities.  The Ercole Shares, when
issued, sold and delivered in accordance with the terms of this Agreement and
the Certificate of Incorporation, as amended (the “Certificate
of Incorporation”), will be duly and validly issued, fully paid and













nonassessable and free of restrictions on transfer other than
restrictions on transfer under applicable state and federal securities
laws.  The Securities issuable upon
conversion of the Ercole Shares have been duly and validly reserved for
issuance, and upon issuance in accordance with the Certificate of
Incorporation, will be duly and validly issued, fully paid and nonassessable
and free of restrictions on transfer other than restrictions on transfer under
applicable federal and state securities laws.


3.6           Governmental
Consent.  All consents, approvals,
orders or authorizations of, or registrations, qualifications, designations,
declarations or filings with any federal or state governmental authority on the
part of Ercole required in connection with the valid execution and delivery of
this Agreement the offer, sale or issuance of the Ercole Shares or the
consummation of any other transaction contemplated hereby have been obtained,
except for notices which may be required to be filed with certain state and
federal securities commissions after the sale or issuance of the Ercole Shares,
and a Form D to be filed pursuant to Rule 503 under the Securities Act of 1933,
as amended, (the “1933 Act”),
which notices will be filed on a timely basis.


3.7           Compliance
with Laws.  To its knowledge, Ercole
is not in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of
its properties, the violation of which would have a Material Adverse Effect.


3.8           Compliance
with Other Instruments.  Ercole is
not in violation or default of any term of its Certificate of Incorporation or
bylaws, or of any provision of any mortgage, indenture or material contract to
which it is a party and by which it is bound or of any judgment, decree, order
or writ, other than such violation(s) that would not have a Material Adverse
Effect on Ercole. The execution, delivery and performance of this Agreement,
the issuance of the Ercole Shares and the consummation of the transactions
contemplated hereby will not result in any such violation or be in conflict
with, or constitute, with or without the passage of time and giving of notice,
either a default under any such provision, instrument, judgment, decree, order
or writ or an event that results in the creation of any lien, charge or
encumbrance upon any assets of Ercole or the suspension, revocation,
impairment, forfeiture, or nonrenewal of any material permit, license,
authorization or approval applicable to Ercole, its business or operations or
any of its assets or properties.  Without
limiting the foregoing, Ercole has obtained all waivers reasonably necessary
with respect to any preemptive rights, rights of first refusal or similar
rights, including any notice or offering periods provided for as part of any
such rights, in order for Ercole to consummate the transactions contemplated
hereunder without any third party obtaining any rights to cause Ercole to offer
or issue any securities of Ercole as a result of the consummation of the
transactions contemplated hereunder.


3.9           Offering.  Based in part on the accuracy of the
representations and warranties of AVI contained in Section 4.10 hereof,
and subject to such filings with the Securities and Exchange Commission (“SEC”) and any applicable state securities commissions as may
be required in connection therewith, the offer, issue and sale of the Ercole
Shares are and will be exempt from the registration and prospectus delivery
requirements of the 1933 Act, and have been registered or qualified (or are
exempt from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws.













3.10         Litigation.  Except as set forth on Schedule 3.10
to the Ercole Schedule of Exceptions, there is no claim, action, suit,
proceeding, arbitration, complaint, charge or investigation pending or to its
knowledge, threatened against Ercole. 
Neither Ercole nor any of its officers or directors is a party to or is
named as subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality.  There is no action, suit, proceeding or
investigation by Ercole and pending or proceedings which Ercole intends to
initiate.  The foregoing includes,
without limitation, actions, suits, proceedings or investigations pending or
threatened in writing involving the use by any of Ercole’s former employees, in
the course of performing services as an employee for Ercole, of any information
or techniques allegedly proprietary to any of such employees, former employers,
or their obligations under any agreements with prior employers. 


3.11         Intellectual
Property.  Other than the
Collaboration and License Agreement (the “Isis CLA”)
between Ercole and Isis Pharmaceuticals, Inc. effective May 16, 2003, and the
License Agreement (the “UNC License”)
between Ercole and The University of North Carolina at Chapel Hill effective
October 15, 2001, there are no agreements between Ercole and any third parties
which would preclude or otherwise limit Ercole’s ability to conduct its tasks
and obligations under Collaboration and License Agreement entered into between
the parties concurrent with the execution of this Agreement.  The Isis CLA and the UNC License are in full
force and effect, and the copies provided to AVI are accurate and
complete.  Ercole has not received any
communications alleging that it has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, domain names, copyrights, trade secrets or other proprietary rights or processes
of any other person or entity, except, in either case, for standard end-user,
object code, internal-use software license and support/maintenance
agreements.  To Ercole’s knowledge, no
employee is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere
with the use of such employee’s best efforts to promote the interest of Ercole
or that would conflict with its business. 
Ercole does not believe it is or will be necessary to use any inventions
of any of its employees made prior to or outside the scope of their employment
by Ercole, except for any such inventions licensed to Ercole under
the UNC License. 


3.12         Material
Liabilities.  Ercole has no material
liability or obligation, and to its knowledge, no contingent liability or
obligation (individually or in the aggregate) that is not disclosed in its
financial statements as of and for the year ended December 31, 2005 (the “Financial Statements”), copies of which have been provided
to AVI, except (i) obligations and liabilities incurred in the ordinary course
of business subsequent to the date of the Financial Statements that are not
materially adverse, individually or in the aggregate, (ii) obligations and
liabilities identified in Section 3.12 of the Ercole Schedule of
Exceptions, and (iii) obligations under contracts made in the ordinary course
of business that would not be required to be reflected in financial statements
prepared in accordance with generally accepted accounting principles. 


3.13         Corporate
Documents.  The Second Amended and
Restated Certificate of Incorporation and Bylaws of Ercole are in the form
provided to AVI.  The minute books of the
Company contain minutes of all meetings of directors and stockholders and all
actions by written consent without a meeting by the directors and stockholders
since the date of incorporation and













accurately reflect in all material respects all actions by the
directors (and any committee of directors) and stockholders with respect to all
transactions referred to in such minutes.


3.14         Disclosure.  Ercole has provided AVI with all of the
information AVI has requested for deciding whether to purchase the Ercole
Shares.  To Ercole’s knowledge, no
certificates made or delivered in connection with this Agreement contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading in light of the circumstances
under which such statements were made or given. 


3.15         Investment
Representations.  Ercole represents
that it has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment hereunder,
and has the ability to bear the economic risks of such investment.  In making its investment decision hereunder,
Ercole and its advisors have relied on the representations and warranties of AVI
contained herein and AVI’s public filings as filed with the SEC. Ercole has not
traded in AVI Common Stock or derivative securities in the 30-day period prior
to the Closing Date. 


4.             Representations
and Warranties of AVI.  AVI hereby
represents and warrants to Ercole as follows: 


4.1           Organization
and Standing.  AVI is a corporation
duly formed, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now conducted and as currently proposed to be conducted.


4.2           Authorization.  AVI has the requisite power and authority to
enter into this Agreement, to purchase the Ercole Shares subject to all of the
terms hereof, to issue and deliver the AVI Shares and to otherwise carry out
and perform its obligations under the terms of this Agreement.  All corporate or other action on the part of
AVI and its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
AVI’s obligations hereunder, and the authorization, issuance and delivery of
the AVI Shares, has been taken.  This
Agreement when executed and delivered by AVI and the parties hereto shall
constitute the valid and legally binding obligation of AVI enforceable in
accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors, rules and laws governing
specific performance, injunctive relief and other equitable remedies. 


4.3           Valid
Issuance of Securities.  The AVI
Shares, when issued, sold and delivered in accordance with the terms of this
Agreement and the Certificate of Incorporation, as amended of AVI (the “AVI Charter”), will be duly and validly issued, fully paid
and nonassessable and free of restrictions on transfer other than restrictions
on transfer under applicable state and federal securities laws and as set forth
in Section 1.3 hereunder.


4.4           Governmental
Consent.  All consents, approvals,
orders or authorizations of, or registrations, qualifications, designations,
declarations or filings with any federal or state governmental authority on the
part of AVI required in connection with the valid execution and delivery of
this Agreement, the offer or issuance of the AVI Shares or the consummation of
any other transaction contemplated hereby have been obtained.













4.5           SEC Documents.



(a)           Since
January 1, 2006, AVI has timely made all filings required to be made by it
under the Exchange Act (the “SEC Documents”), and the securities laws of any
state, and any rules and regulations promulgated thereunder.  The SEC Documents comply in all material
respects with the requirements of the Securities Exchange Act or the Act of 1934,
as amended (the “Exchange Act”) or the 1933 Act, as
applicable, and none of the SEC Documents contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, as of their
respective filing dates, except to the extent corrected by a subsequently filed
SEC Document filed prior to the date hereof.


(b)           AVI
meets all requirements for the use of the Shelf Registration and the Shelf
Registration statement has been declared effective by the SEC and is effective
as of the date hereof.  No stop order
suspending the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose are pending before or, to AVI’s knowledge,
threatened by the SEC and AVI is not aware of any basis for the issuance of
such a stop order.  The Registration
Statement complies in all material respects with the applicable requirements of
the 1933 Act and the regulations thereunder. 
AVI has no present intention to withdraw the Registration Statement,
cease issuing shares under the Registration Statement or place a stop order or
otherwise instruct its transfer agent to prohibit the transfer of shares issued
pursuant to the Registration Statement. 
A sufficient number of shares of AVI Common Stock are, and will be as of
the Closing, available to permit the issuance of the AVI Shares by AVI pursuant
to the Registration Statement.


4.6           Material
Liabilities.  AVI has no material
liability or obligation (individually or in the aggregate) that is not
disclosed in the SEC Documents, including without limitation the financial
statements contained therein, or incurred in the ordinary course of business
consistent with AVI’s past practices.


4.7           Compliance
with Other Instruments.  AVI is not
in violation or default of any term of its certificate of incorporation or
bylaws, or of any provision of any mortgage, indenture or material contract to
which it is a party and by which it is bound or of any judgment, decree, order
or writ, other than such violation(s) that would not have a Material Adverse
Effect on AVI. The execution, delivery and performance of this Agreement, the
issuance of the AVI Shares and the consummation of the transactions
contemplated hereby will not result in any such violation or be in conflict
with, or constitute, with or without the passage of time and giving of notice,
either a default under any such provision, instrument, judgment, decree, order
or writ or an event that results in the creation of any lien, charge or
encumbrance upon any assets of AVI or the suspension, revocation, impairment,
forfeiture, or nonrenewal of any material permit, license, authorization or
approval applicable to AVI, its business or operations or any of its assets or
properties. 


4.8           Nasdaq
National Market.  The AVI Common
Stock is listed on The Nasdaq National Market, and there are no proceedings to
revoke or suspend such listing.  The
issuance of the AVI Shares will not contravene any NASDAQ Marketplace
Rule.  The AVI













Common Stock is registered pursuant to Section 12(g) of the Exchange
Act.  AVI has taken no action designed
to, or which to its knowledge is likely to have the effect of, terminating the
registration of the AVI Common Stock under the Exchange Act or delisting the
AVI Common Stock from The Nasdaq National Market.  AVI has not received any notification that,
and has no knowledge that, the SEC or the NASD is contemplating terminating
such listing or registration.  The
issuance of the AVI Shares does not require stockholder approval, including,
without limitation, as may be required pursuant to the Nasdaq Marketplace
Rules.  The AVI Shares, as of the date of
issuance, will be listed and available for trading on the Nasdaq National
Market.


4.9           Disclosure.  Neither this Agreement nor the SEC Documents
taken together contain any untrue statement of a material fact nor omit to
state a material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they were made,
not misleading.


4.10         Investment
Representations.


(a)           This
Agreement is made with AVI in reliance upon AVI’s representations to Ercole,
which by its acceptance hereof AVI hereby confirms, that the Ercole Shares to
be received by it will be acquired for investment for its own account, not as a
nominee or agent, and that it has no present intention of selling, granting
participation in, or otherwise distributing the same in a manner than will
violate the registration provisions of the 1933 Act or any applicable state
securities laws.  By executing this
Agreement, AVI further represents that it does not have any contract,
undertaking, agreement, or arrangement with any person to sell, transfer or
grant participations to any third person, with respect to any of the Ercole
Shares.


(b)           AVI
understands that the Ercole Shares have not been registered under the 1933 Act
or any applicable state securities laws, based upon Ercole’s determination, on
the grounds that the sale provided for in this Agreement and the issuance of
securities hereunder are exempt from such registration, and that Ercole’s
reliance on such exemption is predicated in part on AVI’s representations set
forth herein.


(c)           AVI
represents that it is an accredited investor, as defined under Regulation D of
the 1933 Act, and has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its investment
hereunder, and has the ability to bear the economic risks of its investment.


(d)           AVI
understands that the Ercole Shares may not be sold, transferred or otherwise
disposed of without registration under the 1933 Act or any applicable state
securities laws, or an exemption therefrom, and that in the absence of an
effective registration statement covering the Ercole Shares or an available
exemption from such registration, the Ercole Shares must be held
indefinitely.  In particular, AVI
represents that it is aware that the Ercole Shares may not be sold pursuant to
Rule 144 promulgated under the 1933 Act unless all of the conditions of that
Rule are met.  Among the conditions for
use of Rule 144, prior to the time sales may be made under paragraph (k) of
Rule 144, is the availability of current information to the public about
Ercole.  Such information is not now
available and Ercole has no present plans to make such information
available.  AVI represents that, in the
absence of an effective registration statement covering the Ercole Shares, it
will sell, transfer, or otherwise













dispose of the Ercole Shares only in a manner that does not violate the
1933 Act and any applicable state securities laws and then only in accordance
with the provisions of Section 4.10 (e) hereof, the provisions of the
Registration Rights contained herein and the provisions of Ercole’s Bylaws.


(e)           Prior
to such time, if ever, as Ercole becomes subject to the reporting provisions of
Section 13(a) or 15(d) of the Exchange Act, AVI agrees that in no event will it
make a transfer or disposition of any of the Ercole Shares (other than pursuant
to an effective registration statement under the 1933 Act or, to Ercole’s
reasonable satisfaction, pursuant to Rule 144), unless and until (i) AVI shall
have notified Ercole of the proposed disposition and (ii) if reasonably
requested by Ercole, at the expense of AVI or transferee, it shall have
furnished to Ercole an opinion of counsel, reasonably satisfactory to Ercole,
to the effect that such transfer may be made without registration under the 1933
Act or any applicable state securities laws.


(f)            AVI
understands that each certificate representing the Ercole Shares will be
endorsed with a legend substantially as follows:


“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THESE SECURITIES MAY NOT BE SOLD, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN
EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS. 
COPIES OF THE STOCK PURCHASE AGREEMENT PROVIDING FOR RESTRICTIONS ON
TRANSFER OF THESE SECURITIES MAY BE OBTAINED UPON WRITTEN REQUEST BY THE HOLDER
OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY.”


4.11         No
Public Market.  AVI understands that
no public market now exists for any of the securities issued by Ercole and that
there is no assurance that a public market will ever exist for the Ercole
Shares or any such securities. 


4.12         Government
Consents.  No consent, approval or
authorization of or designation, declaration or filing with any state, federal,
or foreign governmental authority on the part of AVI is required in connection
with the valid execution and delivery of this Agreement by AVI, and the
consummation by AVI of the transactions contemplated hereby; provided, however,
that AVI makes no representations as to Ercole’s compliance with applicable
law. 


5.             Conditions
to Closing.  Unless otherwise
provided in this Section 4.12, or as waived by AVI or Ercole, as applicable,
the obligations of Ercole to issue and sell the Ercole Shares at the Closing
and to accept delivery of the AVI Shares in payment therefor, the obligations
of AVI to purchase the Ercole Shares at the Closing and to issue and deliver
the AVI













Shares in payment of the Ercole Shares, are subject to the fulfillment
on or before such Closing of each of the following conditions: 


5.1           Representations
and Warranties.  The representations
and warranties contained in Sections 3 and 4 shall be true in all material
respects on and as of the date of the Closing. 


5.2           Performance.  Each party shall have performed and complied
in all material respects with all agreements and conditions contained in this
Agreement required to be performed or complied with by it on or before the
Closing. 


5.3           Qualifications;
Filings.  All authorizations,
filings, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or any agency thereof or of any state that
are required prior to and in connection with the lawful issuance and sale of
the Ercole Shares and the lawful issuance and delivery to Ercole of the AVI
Shares pursuant to this Agreement, including, without limitation, the filing
with the SEC by AVI of a prospectus supplement to the Registration Statement
with respect to the AVI Shares, which prospectus supplement shall be in
compliance in all material respects with applicable requirements, shall have
been duly made or obtained and shall be effective on and as of the date of the
Closing, except for notices required to be filed by Ercole with the SEC and
certain state securities commissions as applicable after the Closing, which
notices will be filed on a timely basis. 


5.4           Proceedings
and Documents.  All corporate and
other proceedings in connection with the transactions contemplated hereby at
the Closing hereunder and all related documents shall be reasonably
satisfactory in substance and form to Ercole and its counsel and to AVI and its
counsel, as applicable, and AVI and its counsel and Ercole and its counsel, as
applicable, shall have received all such counterpart originals or certified or
other copies of such documents as they may reasonably request. 


5.5           Filing
of Certificate of Designation to the Second Amended and Restated Certificate of
Incorporation.  The Certificate of
Designation to Second Amended and Restated Certificate of Incorporation of
Ercole attached hereto as Exhibit A (the “Certificate”) shall have been duly filed by Ercole with the
Secretary of State of the State of Delaware. 


6.             Miscellaneous.


6.1           Entire
Agreement.  This Agreement and the
Ercole Schedule of Exceptions constitute the entire agreement between the
parties, and no party shall be liable or bound to any other party in any manner
by any warranties, representations or covenants or agreements except as
specifically set forth herein or therein. 
The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the parties.  Nothing in this Agreement, express or
implied, is intended to confer upon any third party any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement (including the Schedule of Exceptions
which is part of this Agreement).  


6.2           Headings.  The headings used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.













6.3           Notice.  Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery, if sent via facsimile (with confirmed receipt), or five
business days after deposit with the United States Post Office, by registered
or certified mail, postage prepaid, addressed


(a)           if to Ercole, at:


Ercole Biotech, Inc.


P.O. Box 12295


79
Alexander Drive, Bldg. 4401, Suite 200


Research
Triangle Park, North Carolina 27709


Attention:
President


Phone:  (919) 883-7118


Fax:  (919) 536-1700


With a copy to:


William N. Wofford, Esq.


Hutchison Law Group PLLC


5410 Trinity Road


Suite 400


Raleigh, North Carolina 27607


Phone:  (919)
829-9600


Fax:  (919)
829-9696


or at such other address
as Ercole shall have furnished to AVI in writing in accordance with procedures
set forth in this Section, and


(b)           if to AVI, at


AVI BioPharma, Inc.


One SW Columbia, Suite
1105


Portland, Oregon 97258


Attention: President


Phone:  (503) 227-0554


Fax:  (503) 227-0751


With a copy to:


Michael Phillips, Esq.


Davis Wright Tremaine LLP


1300 SW 5th Avenue, Suite 2300


Portland, OR 97201


Phone:  (503) 231-2300


Fax:  (503) 778-5499


or at such other address as AVI shall have furnished
to Ercole in writing in accordance with procedures set forth in this Section.













6.4           Expenses.  Each party shall pay all costs and expenses
that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement and any schedules or exhibits hereto.


6.5           Severability.  Any invalidity, illegality or limitation of
the enforceability with respect to any one or more of the provisions of this
Agreement, or any part thereof, shall in no way affect or impair the validity,
legality or enforceability of any other provisions of this Agreement.  In case any provision of this Agreement shall
be invalid, illegal or unenforceable, it shall, to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.  


6.6           Delays
or Omissions.  No delay or omission
to exercise any right, power or remedy accruing to Ercole, AVI or any
subsequent holder of any Ercole Shares upon any breach, default or
noncompliance of Ercole, AVI, or any such holder under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter occurring.  It is further agreed that any waiver, permit,
consent or approval of any kind or character on the part of Ercole, AVI or any
subsequent holder of any Ercole Shares of any breach, default or noncompliance
under this Agreement or any waiver on Ercole’s, AVI’s or such subsequent
holders’ part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing and that all remedies under this Agreement, by law, or otherwise
afforded to Ercole, AVI or any subsequent holder of any Ercole Shares, shall be
cumulative and not alternative.  


6.7           Amendments
and Waivers.  Any term of this
Agreement may be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance, either retroactively
or prospectively and either for a specified period of time or indefinitely)
upon the written agreement of Ercole and AVI. 
Any amendment or waiver effected in accordance with this Section 6.6 shall
be binding upon AVI and each transferee of the Ercole Shares. 


6.8           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  


6.9           Governing
Law.  This Agreement shall be
governed by and construed under the laws of the State of Delaware as applied to
agreements among Delaware residents, made and to be performed entirely within
the State of Delaware.


[Remainder of Page Intentionally Left Blank]













IN WITNESS WHEREOF, the undersigned has caused this
Series A-2 Preferred Stock and Common Stock Purchase Agreement to be executed
and delivered effective as of the date first written above.


	
  

  	
   

  	
  ERCOLE
  BIOTECH, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Ryszard Kole,
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AVI
  BIOPHARMA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Alan P.
  Timmins

  
	
   

  	
   

  	
  Title: President
  and Chief Operating Officer