Exhibit
10.49


 


[FORM OF
ADDITIONAL INVESTMENT RIGHT WARRANT]


 


AVI
BIOPHARMA, INC.


 


WARRANT


 


	
  AIR Warrant No. [  ]

  	
   

  	
  Date of Original Issuance:
  December 8, 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 (as adjusted from time to time as provided in Section 9, (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 $4.62 at any time and from time to time from and after the date
hereof and through and including the Expiration Date (as defined below), 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 December 4, 2003, by and among the Company and the buyers party thereto
including the original Holder (the “Purchase
Agreement”), shall have the meanings given to such terms in the
Purchase Agreement.  “Expiration Date” means January 22, 2004;
provided, however, if, at any time prior to the original Expiration Date the
Registration Statement is not effective and available for the issuance of the
Warrant Shares or the Warrant Shares are not otherwise freely tradable without
restriction by the holder, such original Expiration Date shall automatically be
extended by such number of trading days prior to the original Expiration Date
that the Registration Statement was not effective and available as required.


 


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. 
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.


 


5.                                       Delivery of Warrant Shares.


 


(a)                                  Upon delivery of the Form of Election to
Purchase (in the form of Exhibit A) (the “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
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, 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 electronically through the
Depository Trust Corporation the Warrant Shares issuable upon such exercise,
which Warrant Shares shall be issued under the Registration Statement and shall
be freely tradable on the Principal Market.


 


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) payment of the Exercise Price
for the number of Warrant Shares so indicated by the Holder to be purchased.


 


(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


 


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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.


 


(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.


 


6.                                       Charges, Taxes and Expenses. 
Issuance and delivery of the 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 shares, all of which taxes and
expenses shall be paid by the 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 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.


 


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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)                                 Number of Warrant Shares. 
Simultaneously with any adjustment to the Exercise Price pursuant to
paragraph (a) 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.


 


(c)                                  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 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.


 


(d)                                 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.


 


(e)                                  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,


 


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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.


 


11.                                 Limitation on Exercise.  The
Company shall not effect the exercise of this Warrant, and the Holder shall not
have the right to exercise this Warrant, to the extent that after giving effect
to such exercise, such Person (together with such Person’s affiliates) would
beneficially own in excess of 9.99% of the shares of Common Stock outstanding
immediately after giving effect to such exercise.  For purposes of the foregoing sentence, the aggregate number of
shares of Common Stock beneficially owned by such Person and its affiliates
shall include the number of shares of Common Stock issuable upon exercise of
this Warrant with respect to which the determination of such sentence is being
made, but shall exclude shares of Common Stock which would be issuable upon (i)
exercise of the remaining, unexercised portion of this Warrant beneficially
owned by such Person and its affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company or
exercisable for securities of the Company beneficially owned by such Person and
its affiliates (including, without limitation, any convertible notes or
convertible preferred stock or warrants) subject to a limitation on conversion
or exercise analogous to the limitation contained herein.  Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be calculated
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended.  For purposes of this Warrant,
in determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (1)
the Company’s most recent Form 10-K, Form 10-Q or other public filing with the
Securities and Exchange Commission, as the case may be, (2) a more recent
public announcement by the Company or (3) any other notice by the Company or the
transfer agent of the Company setting forth the number of shares of Common
Stock outstanding.  For any reason at
any time, upon the written or oral request of the Holder, the Company shall
within one Business Day confirm orally and in writing to the Holder the number
of shares of Common Stock then outstanding. 
In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of
the Company, including the Warrants, by the Holder and its affiliates since the
date as of which such number of outstanding shares of Common Stock was
reported.


 


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 Principal Market on the date of exercise.


 


13.                                 Notices.  Any and all notices or other
communications or deliveries hereunder (including without limitation any
Exercise 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 


 


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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 Register or such other address or facsimile
number as the Holder may provide to the Company in accordance with this Section
with a copy to Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York
10022, Attention: Eleazer Klein, Esq. (facsimile: 212-593-5955).


 


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


 


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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 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.


 


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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:

  
	
   

  	
  Title:

  



 

















 


Exhibit A


 


FORM OF
ELECTION TO PURCHASE


 


To
AVI BioPharma, Inc.:


 


In accordance with AIR Warrant No. [  ] issued to the undersigned, the undersigned
hereby elects to
purchase                    shares
of common stock (“Common Stock”),
$0.0001 par value per share, of AVI BioPharma, Inc.


 


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 the shares of Common
Stock issuable upon this exercise be issued in the name of


 


PLEASE
INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER:                         


 


 


 


Facsimile Number:


 


Authorization:


 


Account Number:


 (if
electronic book entry transfer)


 


Transaction Code Number:


  (if electronic book entry transfer)


 


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: