Exhibit 10.86


AVI BIOPHARMA, INC.


 


FORM OF INDEMNIFICATION AGREEMENT


 


This
Indemnification Agreement (this “Agreement”) is
dated as of [insert date], and is between AVI
BioPharma, Inc., an Oregon corporation (the “Company”),
and [insert name of indemnitee] (“Indemnitee”).


 


RECITALS


 


A.            Indemnitee’s service to the
Company substantially benefits the Company.


 


B.            Individuals are reluctant to
serve as directors or officers of corporations or in certain other capacities
unless they are provided with adequate protection through insurance or
indemnification against the risks of claims and actions against them arising
out of such service.


 


C.            Indemnitee does not regard
the protection currently provided by applicable law, the Company’s governing
documents and any insurance as adequate under the present circumstances, and
Indemnitee may not be willing to serve as a director or officer without
additional protection.


 


D.            In order to induce
Indemnitee to continue to provide services to the Company, it is reasonable,
prudent and necessary for the Company to contractually obligate itself to
indemnify, and to advance expenses on behalf of, Indemnitee as permitted
by applicable law.


 


E.             This Agreement is a
supplement to and in furtherance of the indemnification provided in the Company’s
articles of incorporation and bylaws, and any resolutions adopted pursuant
thereto, and this Agreement shall not be deemed a substitute therefor, nor
shall this Agreement be deemed to limit, diminish or abrogate any rights of
Indemnitee thereunder.


 


The
parties therefore agree as follows:


 


1.             Definitions.


 


(a)           “Corporate Status”
describes the status of a person who is or was a director, trustee, general
partner, managing member, officer, employee, agent or fiduciary of the Company
or any other Enterprise.


 


(b)           “OBCA” means the
Oregon Business Corporation Act.


 


(c)           “director” shall
have the meaning set forth in ORS 60.387.


 


(d)           “Disinterested Director”
means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee.


 


(e)           “Enterprise”
means the Company and any other corporation, partnership, limited liability
company, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the request of the Company as a director,
trustee, general partner, managing member, officer, employee, agent or
fiduciary.


 

















 


(f)            “Expenses”
include all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees and costs of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Expenses also include (i) Expenses
incurred in connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond or other appeal bond or their equivalent, and
(ii) for purposes of Section 12(d), Expenses incurred by Indemnitee
in connection with the interpretation, enforcement or defense of Indemnitee’s
rights under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.


 


(g)           “Independent Counsel”
means a law firm, or a partner or member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years
has been, retained to represent (i) the Company or Indemnitee in any
matter material to either such party (other than as Independent Counsel with
respect to matters concerning Indemnitee under this Agreement, or other
indemnitees under similar indemnification agreements), or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel”
shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.


 


(h)           “Proceeding”
means any threatened, pending or completed action, suit, arbitration,
mediation, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or proceeding, whether brought in the right of the
Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, including any appeal therefrom and including without limitation
any such Proceeding pending as of the date of this Agreement, in which
Indemnitee was, is or will be involved as a party, a potential party, a
non-party witness or otherwise by reason of (i) the fact that Indemnitee
is or was a director or officer of the Company, (ii) any action taken by
Indemnitee or any action or inaction on Indemnitee’s part while acting as a
director or officer of the Company, or (iii) the fact that he or she is or
was serving at the request of the Company as a director, trustee, general
partner, managing member, officer, employee, agent or fiduciary of the Company
or any other Enterprise, in each case whether or not serving in such capacity
at the time any liability or Expense is incurred for which indemnification,
reimbursement or advancement of expenses can be provided under this Agreement.


 


(i)            Reference to “other enterprises”
shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on
a person with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants or beneficiaries;
and a person who acted in a manner he or she reasonably believed to be in the
best interests of the participants in and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner “not opposed
to the best interests of the Company” as referred to in this
Agreement.


 


2.             Indemnity
in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 2 if
Indemnitee is, or is threatened to be made, a party to or a participant in any
Proceeding, other than a Proceeding by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 2, Indemnitee
shall be indemnified to the fullest extent permitted by applicable law against
all Expenses, judgments, fines and amounts paid in settlement actually and
reasonably 


 


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incurred
by Indemnitee or on his or her behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Company and, with respect to any criminal Proceeding, had no
reasonable cause to believe that his or her conduct was unlawful.


 


3.             Indemnity
in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this
Section 3 if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 3, Indemnitee shall
be indemnified to the fullest extent permitted by applicable law against all
Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company. No indemnification
for Expenses shall be made under this Section 3 in respect of any claim,
issue or matter as to which Indemnitee shall have been finally adjudged by a
court of competent jurisdiction to be liable to the Company, unless and only to
the extent that the court in which the Proceeding was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnification for such expenses as such court shall deem proper.


 


4.             Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. To the extent
that Indemnitee is a party to or a participant in and is successful (on the
merits or otherwise) in defense of any Proceeding or any claim, issue or matter
therein, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith. To the extent permitted by applicable law, if Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, in defense of one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with (a) each successfully resolved claim, issue or
matter and (b) any claim, issue or matter related to any such successfully
resolved claim, issuer or matter. For purposes of this Section 4, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.


 


5.             Indemnification
for Expenses of a Witness. To the extent that
Indemnitee is, by reason of his or her Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, Indemnitee shall be
indemnified to the extent permitted by applicable law against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection therewith.


 


6.             Additional
Indemnification.


 


(a)           Notwithstanding any limitation in Sections 2, 3
or 4, the Company shall indemnify Indemnitee to the fullest extent permitted by
applicable law if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding (including a Proceeding by or in the right of the
Company to procure a judgment in its favor) against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with the Proceeding or any
claim, issue or matter therein.


 


(b)           For purposes of Section 6(a), the meaning of
the phrase “to the fullest extent permitted by applicable
law” shall include, but not be limited to:


 


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(i)    the fullest extent permitted
by the provision of the OBCA that authorizes or contemplates additional
indemnification by agreement, or the corresponding provision of any amendment
to or replacement of the OBCA; and


 


(ii)   the fullest extent
authorized or permitted by any amendments to or replacements of the OBCA
adopted after the date of this Agreement that increase the extent to which a
corporation may indemnify its officers and directors.


 


7.             Exclusions.
Notwithstanding any provision in this Agreement, the Company shall not be
obligated under this Agreement to make any indemnity in connection with any
Proceeding (or any part of any Proceeding):


 


(a)           for which payment has actually been made to or on
behalf of Indemnitee under any statute, insurance policy, indemnity provision,
vote or otherwise, except with respect to any excess beyond the amount paid;


 


(b)           for an accounting or disgorgement of profits
pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended, or similar provisions of federal, state or local statutory law or
common law, if Indemnitee is held liable therefor (including pursuant to any
settlement arrangements);


 


(c)           for any reimbursement of the Company by Indemnitee
of any bonus or other incentive-based or equity-based compensation or of any
profits realized by Indemnitee from the sale of securities of the Company, as
required in each case under the Securities Exchange Act of 1934, as amended
(including any such reimbursements that arise from an accounting restatement of
the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”), or the payment to
the Company of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 306 of the Sarbanes-Oxley Act), if
Indemnitee is held liable therefor (including pursuant to any settlement
arrangements);


 


(d)           initiated by Indemnitee, including any Proceeding
(or any part of any Proceeding) initiated by Indemnitee against the Company or
its directors, officers, employees, agents or other indemnitees, unless
(i) the Company’s board of directors authorized the Proceeding (or the
relevant part of the Proceeding) prior to its initiation, (ii) the Company
provides the indemnification, in its sole discretion, pursuant to the powers
vested in the Company under applicable law, (iii) otherwise authorized in
Section 12(d) or (iv) otherwise required by applicable law;


 


(e)           in connection with a Proceeding by or in the right
of the Company with respect to which a court of competent jurisdiction in a
final judgment, not subject to appeal, determines that the Indemnitee is liable
to the Company;


 


(f)            in connection with any other Proceeding respect to
which a court of competent jurisdiction in a final judgment, not subject to
appeal, determines that the Indemnitee received an improper personal benefit;
or


 


(g)           if prohibited by applicable law.


 


8.             Advances
of Expenses. The Company shall advance the Expenses incurred by
Indemnitee in connection with any Proceeding, and such advancement shall be
made as soon as reasonably practicable, but in any event no later than 30 days,
after the receipt by the Company of a written statement or statements
requesting such advances from time to time (which shall (a) include
invoices received by Indemnitee in connection with such Expenses but, in the
case of invoices in connection with legal services, any references to 


 


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legal
work performed or to expenditure made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be included with the invoice,
and (b) contain the affirmation required by Section 9(a)). Advances
shall be unsecured and interest free and made without regard to Indemnitee’s
ability to repay such advances. Indemnitee hereby undertakes to repay any
advance to the extent that it is ultimately determined by a court of competent
jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not
entitled to be indemnified by the Company. This Section 8 shall not apply
to the extent advancement is prohibited by law and shall not apply to any
Proceeding for which indemnity is not permitted under this Agreement, but shall
apply to any Proceeding referenced in Section 7(b) or 7(c) prior
to a determination that Indemnitee is not entitled to be indemnified by the
Company.


 


9.             Procedures
for Notification and Defense of Claim.


 


(a)           Indemnitee shall notify the Company in writing of
any matter with respect to which Indemnitee intends to seek indemnification or
advancement of Expenses as soon as reasonably practicable following the receipt
by Indemnitee of notice thereof. The written notification to the Company shall
include (i) in reasonable detail, a description of the nature of the
Proceeding and the facts underlying the Proceeding and (ii) an affirmation
of the Indemnitee’s good faith belief that: (A) the conduct of such
Indemnitee was in good faith, (B) the Indemnitee reasonably believed that his
conduct was in the best interests of the Company, or at least not opposed to
the Company’s best interests and (C) in the case of any criminal
Proceeding, the Indemnitee had not reasonable cause to believe his conduct was
unlawful. The failure by Indemnitee to notify the Company will not relieve the
Company from any liability which it may have to Indemnitee hereunder or
otherwise than under this Agreement, and any delay in so notifying the Company
shall not constitute a waiver by Indemnitee of any rights.


 


(b)           If, at the time of the receipt of a notice of a
Proceeding pursuant to the terms hereof, the Company has directors’ and
officers’ liability insurance in effect, the Company shall give prompt notice
of the commencement of the Proceeding to the insurers in accordance with the
procedures set forth in the applicable policies. The Company shall thereafter
take all commercially-reasonable action to cause such insurers to pay, on
behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.


 


(c)           If the Company may be obligated to make any
indemnity in connection with a Proceeding, the Company shall be entitled to
assume the defense of such Proceeding with counsel approved by Indemnitee,
which approval shall not be unreasonably withheld, upon the delivery to
Indemnitee of written notice of its election to do so. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee for any
fees or expenses of counsel subsequently incurred by Indemnitee with respect to
the same Proceeding. Notwithstanding the Company’s assumption of the defense of
any such Proceeding, the Company shall be obligated to pay the fees and
expenses of Indemnitee’s counsel to the extent (i) the employment of
counsel by Indemnitee is authorized by the Company, (ii) counsel for the
Company or Indemnitee shall have reasonably concluded that there is a conflict
of interest between the Company and Indemnitee in the conduct of any such
defense such that Indemnitee needs to be separately represented, (iv) the
Company is not financially or legally able to perform its indemnification
obligations or (v) the Company shall not have retained, or shall not
continue to retain, such counsel to defend such Proceeding. The Company shall
have the right to conduct such defense as it sees fit in its sole discretion.
Regardless of any provision in this Agreement, Indemnitee shall have the
right to employ counsel in any Proceeding at Indemnitee’s personal expense. The
Company shall not be entitled, without the consent of Indemnitee, to assume the
defense of any claim brought by or in the right of the Company.


 


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(d)           Indemnitee shall give the Company such information
and cooperation in connection with the Proceeding as may be reasonably
appropriate.


 


(e)           The Company shall not be liable to indemnify
Indemnitee for any settlement of any Proceeding (or any part thereof) without
the Company’s prior written consent, which shall not be unreasonably withheld.


 


(f)            The Company shall have the right to settle any
Proceeding (or any part thereof) without the consent of Indemnitee.


 


10.           Procedures upon Application for Indemnification.


 


(a)           To obtain indemnification, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and as
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification following the final disposition of the Proceeding.
The Company shall, as soon as reasonably practicable after receipt of such a
request for indemnification, advise the board of directors that Indemnitee has
requested indemnification. Any delay in providing the request will not relieve
the Company from its obligations under this Agreement, except to the extent
such failure is prejudicial.


 


(b)           Upon written request by Indemnitee for
indemnification pursuant to Section 10(a), a determination with respect to
Indemnitee’s entitlement thereto shall be made in the specific case (i) by
a majority of a quorum consisting of the Disinterested Directors, or (ii) if
such a quorum cannot be obtained under Section 10(b)(i), by a majority of
a committee duly designated by the board of directors consisting solely of two
or more (provided that, for the avoidance of doubt, it is acknowledged that
directors who are not Disinterested Directors may participate in the designation
of such committee), (iii) if a quorum cannot be obtained under Section 10(b)(i) and
a committee cannot be designated under Section 10(b)(ii), by Independent
Counsel in a written opinion to the board or directors, or (iv) if so
directed by the Company’s board of directors, by the shareholders of the
Company. If it is determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten days after such determination.
Indemnitee shall cooperate with the person, persons or entity making the
determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information that is not privileged or otherwise protected
from disclosure and that is reasonably available to Indemnitee and reasonably
necessary to such determination. Any costs or expenses (including attorneys’
fees and disbursements) reasonably incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by
the Company, to the extent permitted by applicable law.


 


(c)           If the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 10(b), the Independent Counsel shall be selected by the Company’s
board of directors, and the Company shall give written notice to Indemnitee
advising him or her of the identity of the Independent Counsel so selected.
Indemnitee may within ten days after such written notice of selection shall
have been given, deliver to the Company a written objection to such selection; provided, however, that
such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of “Independent Counsel” as defined
in Section 1 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection
is withdrawn or a court has determined that such objection is without merit.
If, within 20 days after the later of (i) submission by Indemnitee of a
written request for indemnification pursuant to Section 10(a) hereof
and 


 


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(ii) the
final disposition of the Proceeding, the parties have not agreed upon an
Independent Counsel, either the Company or Indemnitee may petition a court of
competent jurisdiction for resolution of any objection which shall have been
made by the Indemnitee to the selection of Independent Counsel and for the
appointment as Independent Counsel of a person selected by the court or by such
other person as the court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 10(b) hereof. Upon the due commencement
of any judicial proceeding or arbitration pursuant to Section 12(a) of
this Agreement, the Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).


 


(d)           The Company agrees to pay the reasonable fees and
expenses of any Independent Counsel and to fully indemnify such counsel against
any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.


 


11.           Presumptions and Effect of Certain
Proceedings.


 


(a)           In making a determination with respect to
entitlement to indemnification hereunder, the person, persons or entity making
such determination shall, to the fullest extent not prohibited by law, presume
that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 10(a) of this Agreement, and the Company shall, to the
fullest extent not prohibited by law, have the burden of proof to overcome that
presumption in connection with the making by such person, persons or entity of
any determination contrary to that presumption.


 


(b)           The termination of any Proceeding or of any claim, issue
or matter therein, by judgment, order, settlement or conviction, or upon a plea
of nolo  contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself create a presumption that Indemnitee did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his or her
conduct was unlawful.


 


(c)           For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith to the extent Indemnitee relied in
good faith on (i) the records or books of account of the Enterprise,
including financial statements, (ii) information supplied to Indemnitee by
the officers of the Enterprise in the course of their duties, (iii) the
advice of legal counsel for the Enterprise or its board of directors or counsel
selected by any committee of the board of directors or (iv) information or
records given or reports made to the Enterprise by an independent certified
public accountant, an appraiser, investment banker or other expert selected
with reasonable care by the Enterprise or its board of directors or any
committee of the board of directors. The provisions of this Section 11(c) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which Indemnitee may be deemed to have met the applicable standard of conduct
set forth in this Agreement.


 


(d)           Neither the knowledge, actions nor failure to act of
any other director, officer, agent or employee of the Enterprise shall be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.


 


12.           Remedies of Indemnitee.


 


(a)           Subject to Section 12(e), if (i) a
determination is made pursuant to Section 10 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement,
(ii) advancement of Expenses is not timely made pursuant to Section 8
or 12(d) of this Agreement, (iii) no determination of 


 


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entitlement
to indemnification shall have been made pursuant to Section 10 of this
Agreement within 90 days after the later of the receipt by the Company of the
request for indemnification or the final disposition of the Proceeding,
(iv) payment of indemnification pursuant to this Agreement is not made
(A) within ten days after a determination has been made that Indemnitee is
entitled to indemnification or (B) with respect to indemnification
pursuant to Sections 4, 5 and 12(d) of this Agreement, within 30 days
after receipt by the Company of a written request therefor, or (v) the
Company or any other person or entity takes or threatens to take any action to
declare this Agreement void or unenforceable, or institutes any litigation or
other action or proceeding designed to deny, or to recover from, Indemnitee
the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee
shall be entitled to an adjudication by a court of competent jurisdiction of
his or her entitlement to such indemnification or advancement of Expenses.
Indemnitee shall commence such proceeding seeking an adjudication within 180
days following the date on which Indemnitee first has the right to commence
such proceeding pursuant to this Section 12(a); provided,
however, that the foregoing clause shall not apply in respect of a
proceeding brought by Indemnitee to enforce his or her rights under
Section 4 of this Agreement. The Company shall not oppose Indemnitee’s
right to seek any such adjudication in accordance with this Agreement.


 


(b)           Neither (i) the failure of the Company, its
board of directors, any committee or subgroup of the board of directors, Independent
Counsel or shareholders to have made a determination that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor (ii) an actual determination by the
Company, its board of directors, any committee or subgroup of the board of
directors, Independent Counsel or shareholders that Indemnitee has not met
the applicable standard of conduct, shall be a defense to the action or create
a presumption that Indemnitee has or has not met the applicable standard of
conduct. If that a determination shall have been made pursuant to
Section 10 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this
Section 12 shall be conducted in all respects as a de novo
trial, on the merits, and Indemnitee shall not be prejudiced by reason of that
adverse determination. In any judicial proceeding commenced pursuant to this
Section 12, the Company shall, to the fullest extent not prohibited by
law, have the burden of proving Indemnitee is not entitled to indemnification
or advancement of Expenses, as the case may be.


 


(c)           To the fullest extent not prohibited by law, the
Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 12 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any
such court that the Company is bound by all the provisions of this Agreement.
If a determination shall have been made pursuant to Section 10 of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding commenced pursuant to
this Section 12, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statements not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law.


 


(d)           To the extent not prohibited by law, the Company shall
indemnify Indemnitee against all Expenses that are incurred by Indemnitee in
connection with any action for indemnification or advancement of Expenses from
the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company to the extent Indemnitee
is successful in such action, and, if requested by Indemnitee, shall (as soon
as reasonably practicable, but in any event no later than 30 days, after
receipt by the Company of a written request therefor) advance such Expenses to
Indemnitee, subject to the provisions of Section 8.


 


(e)           Notwithstanding anything in this Agreement to the
contrary, no determination as to entitlement to indemnification shall be
required to be made prior to the final disposition of the Proceeding.


 


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13.           Contribution. To the fullest extent
permissible under applicable law, if the indemnification provided for in this
Agreement is unavailable to Indemnitee, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amounts incurred by Indemnitee, whether for
Expenses, judgments, fines or amounts paid or to be paid in settlement, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such Proceeding in order to reflect (i) the
relative benefits received by the Company and Indemnitee as a result of the
events and transactions giving rise to such Proceeding; and (ii) the
relative fault of Indemnitee and the Company (and its other directors,
officers, employees and agents) in connection with such events and
transactions.


 


14.           Non-exclusivity. The rights of
indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Company’s articles of
incorporation or bylaws, any agreement, a vote of shareholders or a resolution
of directors, or otherwise. To the extent that a change in Oregon law, whether
by statute or judicial decision, permits greater indemnification or advancement
of Expenses than would be afforded currently under the Company’s articles of
incorporation and bylaws and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change, subject to the restrictions expressly set forth herein
or therein. Except as expressly set forth herein, no right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. Except as expressly set forth herein, the assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.


 


15.           No Duplication of Payments. The Company
shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (or for which advancement is provided
hereunder) if and to the extent that Indemnitee has otherwise actually received
payment for such amounts under any insurance policy, contract, agreement or
otherwise.


 


16.           Insurance. To the extent that the
Company maintains an insurance policy or policies providing liability insurance
for directors, trustees, general partners, managing members, officers,
employees, agents or fiduciaries of the Company or any other Enterprise, Indemnitee
shall be covered by such policy or policies to the same extent as the most
favorably-insured persons under such policy or policies in a comparable
position.


 


17.           Subrogation. In the event of any payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.


 


18.           Services to the Company. Indemnitee
agrees to serve as a director or officer of the Company or, at the request of
the Company, as a director, trustee, general partner, managing member, officer,
employee, agent or fiduciary of another Enterprise, for so long as Indemnitee
is duly elected or appointed or until Indemnitee tenders his or her resignation
or is removed from such position. Indemnitee may at any time and for any reason
resign from such position (subject to any other contractual obligation or any
obligation imposed by operation of law), in which event the Company shall have
no obligation under this Agreement to continue Indemnitee in such position.
This Agreement shall not be deemed an employment contract between the Company
(or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee
specifically acknowledges that any employment with the Company (or any of its
subsidiaries or any Enterprise) is at will, and Indemnitee may be discharged at
any time for any reason, with or without cause, with or without notice, except
as may be 


 


9

















 


otherwise expressly provided in any executed,
written employment contract between Indemnitee and the Company (or any of its
subsidiaries or any Enterprise), any existing formal severance policies adopted
by the Company’s board of directors or, with respect to service as a director
or officer of the Company, the Company’s articles of incorporation or bylaws or
the OBCA. No such document shall be subject to any oral modification thereof.


 


19.           Duration. This Agreement shall
continue until and terminate upon the later of (a) ten years after the
date that Indemnitee shall have ceased to serve as a director or officer of the
Company or as a director, trustee, general partner, managing member, officer,
employee, agent or fiduciary of any other Enterprise, as applicable; or
(b) one year after the final termination of any Proceeding, including any
appeal, then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 12 of this Agreement relating
thereto.


 


20.           Successors. This Agreement shall be
binding upon the Company and its successors and assigns, including any direct
or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company, and shall inure to
the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.
The Company shall require and cause any successor (whether direct or indirect
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company, by written agreement, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.


 


21.           Severability. Nothing in this Agreement
is intended to require or shall be construed as requiring the Company to do or
fail to do any act in violation of applicable law. The Company’s inability,
pursuant to court order or other applicable law, to perform its obligations
under this Agreement shall not constitute a breach of this Agreement. If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: (i) the validity, legality and
enforceability of the remaining provisions of this Agreement (including without
limitation, each portion of any section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent permitted by law;
(ii) such provision or provisions shall be deemed reformed to the extent
necessary to conform to applicable law and to give the maximum effect to the
intent of the parties hereto; and (iii) to the fullest extent possible,
the provisions of this Agreement (including, without limitation, each portion
of any section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
thereby.


 


22.           Enforcement. The Company expressly
confirms and agrees that it has entered into this Agreement and assumed the
obligations imposed on it hereby in order to induce Indemnitee to serve as a
director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer
of the Company.


 


23.           Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the
subject matter hereof; provided, however, that this Agreement is a supplement to and in
furtherance of the Company’s articles of incorporation and bylaws and
applicable law.


 


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24.           Modification and Waiver. No supplement,
modification or amendment to this Agreement shall be binding unless executed in
writing by the parties hereto. No amendment, alteration or repeal of this
Agreement shall adversely affect any right of Indemnitee under this Agreement
in respect of any action taken or omitted by such Indemnitee in his or her
Corporate Status prior to such amendment, alteration or repeal. No waiver of
any of the provisions of this Agreement shall constitute or be deemed a waiver of
any other provision of this Agreement nor shall any waiver constitute a
continuing waiver.


 


25.           Notices. All notices and other
communications required or permitted hereunder shall be in writing and shall be
mailed by registered or certified mail, postage prepaid, sent by facsimile or
electronic mail or otherwise delivered by hand, messenger or courier service
addressed:


 


(a)           if to Indemnitee, to Indemnitee’s address, facsimile
number or electronic mail address as shown on the signature page of this
Agreement or in the Company’s records, as may be updated in accordance with the
provisions hereof; or


 


(b)           if to the Company, to the attention of the Chief
Executive Officer or Chief Financial Officer of the Company at AVI BioPharma, Inc.
3450 Monte Villa Parkway, Bothell, Washington 98021, Fax: 425-489-5933, or at
such other current address as the Company shall have furnished to Indemnitee,
with a copy (which shall not constitute notice) to Patrick Schultheis &
Effie Toshav, Wilson Sonsini Goodrich & Rosati, P.C., 701 Fifth
Avenue, Suite 5100, Seattle, Washington 98104, Fax: 206-883-2699.


 


Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given (i) if delivered by
hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service,
freight prepaid, specifying next-business-day delivery, one business day after
deposit with the courier), or (ii) if sent via
mail, at the earlier of its receipt or five days after the same has been
deposited in a regularly-maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or,
if sent via electronic mail, upon confirmation
of delivery when directed to the relevant electronic mail address, if sent
during normal business hours of the recipient, or if not sent during normal
business hours of the recipient, then on the recipient’s next business day.


 


26.           Applicable Law and Consent to Jurisdiction. This Agreement
and the legal relations among the parties shall be governed by, and construed
and enforced in accordance with, the laws of the State of Oregon, without
regard to its conflict of laws rules. The Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in
the Oregon state courts, and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent
to submit to the exclusive jurisdiction of the Oregon state courts for purposes
of any action or proceeding arising out of or in connection with this
Agreement, (iii) appoint, to the extent such party is not otherwise
subject to service of process in the State of Oregon, National Registered
Agents, Inc. as its agent in the State of Oregon as such party’s agent for
acceptance of legal process in connection with any such action or proceeding against
such party with the same legal force and validity as if served upon such party
personally within the State of Oregon, (iv) waive any objection to the
laying of venue of any such action or proceeding in the Oregon state courts,
and (v) waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Oregon state courts has been brought in an
improper or inconvenient forum.


 


27.           Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall constitute one and the
same Agreement. This Agreement may also be executed and delivered by facsimile
signature and in counterparts, each of which shall for all purposes be deemed
to be an original but all of which together shall constitute one 


 


11

















 


and
the same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.


 


28.           Captions. The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.


 


(signature page follows)


 


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The
parties are signing this Indemnification Agreement as of the date stated in the
introductory sentence.


 


	
   

  	
  AVI
  BIOPHARMA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Title)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [INSERT INDEMNITEE NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (City, State and ZIP)

  



 


(Signature page to Indemnification Agreement)