EXHIBIT
10.55


SECOND
LEASE EXTENSION AND MODIFICATION AGREEMENT


This Second Lease Extension
and Modification Agreement (“Second Extension”) is made effective as of the 1ST  day of January, 2006 (“Effective Date”) and is
entered into as of the 24th  day of January, 2006, by and between RESEARCH WAY INVESTMENTS, a California limited partnership (“Landlord”)
and AVI BIOPHARMA, INC., an Oregon
corporation (“Tenant”), for the purpose of amending that certain Commercial
Lease entered into on June 18, 1992, by and between Landlord and Tenant’s
predecessor in interest, Antiviral, Inc., an Oregon corporation (“Commercial
Lease”), as modified by that certain Lease Extension and Modification Agreement
dated as of September 1, 1996 (“First Extension”). The Commercial Lease and the
First Extension shall hereinafter be collectively referred to as the “Lease”.


RECITALS


A.           Pursuant to the Commercial Lease, Landlord leased to
Tenant approximately thirteen thousand one hundred eighty (13,180) square feet
of Net Rentable Area in that certain building owned by Landlord and located at
4575 S.W. Research Way, Corvallis, Benton County, Oregon, more particularly
described in the Lease (“Building”).


B.            Pursuant to the First Extension, Tenant increased the Net
Rentable Area of the Premises to eighteen thousand four hundred seven (18,407)
square feet, extended the Lease termination date through December 15, 2004, and
Landlord and Tenant made certain other amendments to the Lease.


C.            Tenant is the successor in interest to Antivirals, Inc.
and has assumed the obligations of Tenant under the Lease.


D.           Landlord and Tenant now desire to further extend and
modify the Lease to add additional square footage of Net Rentable Area to the
Premises, to define Tenant’s Percentage Share of Operating Costs and Taxes, to
define the Fixed Rent for the Premises, to extend the Lease through and
including December 31, 2020, and to make certain other modifications on the
terms and conditions contained herein.


AGREEMENT


NOW, THEREFORE, in
consideration of the mutual covenants and conditions set forth herein, Landlord
and Tenant agree as follows:


1.            Lease Term. 
The Expiration Date of the Lease for the Premises is hereby changed from
December 15, 2004, to December 31, 2020.  The options granted to Tenant
pursuant to the First Extension are hereby deleted in their entirety.  Tenant shall now have two (2) options to
extend the Lease for five (5) years each, provided Tenant gives to Landlord not
more than eighteen (18) and not less than six (6) months prior written notice
of its intent to extend the Lease. Tenant shall not be allowed to exercise
either of its options to extend the Lease term if it is in default at the time
of exercise. References to the “Extension Term” means the period from December
16, 2004 to December 31, 2020.


2.            Confirmation of Additional Net Rentable Area.  During the Extension Term, the Premises as
defined in Section 1 of the Lease shall now consist of approximately 52,756
rentable square feet.  Landlord and
Tenant agree that the Net Rentable Area of the Premises is depicted on the
floor plan attached hereto as Exhibit “A” and incorporated herein by
reference.  A schedule of how much space
Tenant expanded into and as of what date said expansion took place shall be
attached hereto as Exhibit A-1 and incorporated herein by reference.


3.            Condition of Premises.  Tenant shall take the Premises in “as
is—where is” condition and with 









 



all faults and deficiencies, except that Landlord
agrees to perform the work listed on Exhibit “B” attached hereto by June 30,
2006 (“Landlord’s Work”).  Landlord and
Tenant shall cooperate to schedule a mutually acceptable time for the Landlord’s
Work to be completed, so as to not disrupt Tenant’s business.


4.            Fixed Rent. 
During the Extension Term, monthly Fixed Rent for the Premises shall be
as set forth on the table below. 
Landlord and Tenant further agree that beginning on January 1, 2006, and
continuing on the first day of January of each year thereafter, including any
extended term if Tenant exercises its options to extend the Lease, Fixed Rent
shall increase by three percent (3%) of the Fixed Rent for the immediately
preceding year 




	
  Lease Year

  	
   

  	
  Monthly Base

  Rent / Sq. Ft.

  	
   

  	
  Sq. Ft. Leased

  	
   

  	
  Monthly

  Base Rent

  	
   

  	
  Annual

  Base Rent

  	
   

  
	
  1/1/06-12/31/06

  	
   

  	
  $

  	
  1.1691

  	
   

  	
  52,756

  	
   

  	
  $

  	
  61,677.04

  	
   

  	
  $

  	
  740,124.48

  	
   

  
	
  1/1/07-12/31/07

  	
   

  	
  $

  	
  1.2041

  	
   

  	
  52,756

  	
   

  	
  $

  	
  63,523.50

  	
   

  	
  $

  	
  762,282.00

  	
   

  
	
  1/1/08-12/31/08

  	
   

  	
  $

  	
  1.2402

  	
   

  	
  52,756

  	
   

  	
  $

  	
  65,427.99

  	
   

  	
  $

  	
  785,135.88

  	
   

  
	
  1/1/09-12/31/09

  	
   

  	
  $

  	
  1.2774

  	
   

  	
  52,756

  	
   

  	
  $

  	
  67,390.51

  	
   

  	
  $

  	
  808,686.12

  	
   

  
	
  1/1/10-12/31/10

  	
   

  	
  $

  	
  1.316

  	
   

  	
  52,756

  	
   

  	
  $

  	
  69,426.90

  	
   

  	
  $

  	
  833,122.80

  	
   

  
	
  1/1/11-12/31/11

  	
   

  	
  $

  	
  1.355

  	
   

  	
  52,756

  	
   

  	
  $

  	
  71,484.38

  	
   

  	
  $

  	
  857,812.56

  	
   

  
	
  1/1/12-12/31/12

  	
   

  	
  $

  	
  1.396

  	
   

  	
  52,756

  	
   

  	
  $

  	
  73,647.38

  	
   

  	
  $

  	
  883,768.56

  	
   

  
	
  1/1/13-12/31/13

  	
   

  	
  $

  	
  1.438

  	
   

  	
  52,756

  	
   

  	
  $

  	
  75,863.13

  	
   

  	
  $

  	
  910,357.54

  	
   

  
	
  1/1/14-12/31/14

  	
   

  	
  $

  	
  1.481

  	
   

  	
  52,756

  	
   

  	
  $

  	
  78,131.64

  	
   

  	
  $

  	
  937,579.68

  	
   

  
	
  1/1/15-12/31/15

  	
   

  	
  $

  	
  1.525

  	
   

  	
  52,756

  	
   

  	
  $

  	
  80,452.90

  	
   

  	
  $

  	
  965,434.80

  	
   

  
	
  1/1/16-12/31/16

  	
   

  	
  $

  	
  1.571

  	
   

  	
  52,756

  	
   

  	
  $

  	
  82,879.68

  	
   

  	
  $

  	
  994,556.16

  	
   

  
	
  1/1/17-12/31/17

  	
   

  	
  $

  	
  1.618

  	
   

  	
  52,756

  	
   

  	
  $

  	
  85,359.21

  	
   

  	
  $

  	
  1,024,310.52

  	
   

  
	
  1/1/18-12/31/18

  	
   

  	
  $

  	
  1.667

  	
   

  	
  52,756

  	
   

  	
  $

  	
  87,944.25

  	
   

  	
  $

  	
  1,055,331.00

  	
   

  
	
  1/1/19-12/31/19

  	
   

  	
  $

  	
  1.717

  	
   

  	
  52,756

  	
   

  	
  $

  	
  90,582.05

  	
   

  	
  $

  	
  1,086,984.60

  	
   

  
	
  1/1/20-12/31/20

  	
   

  	
  $

  	
  1.769

  	
   

  	
  52,756

  	
   

  	
  $

  	
  93,325.36

  	
   

  	
  $

  	
  1,119,904.32

  	
   

  






 


5.            Tenant’s Responsibilities and Obligations.  The following sentences are hereby inserted
after the fourth sentence of Section 9 of the Commercial Lease:


“Tenant
shall supply Landlord actual “as built” drawings of all Alterations done,
copies of all permits, and copies of Certificates of Occupancy within sixty
(60) days of Tenant’s receipt of each Certificate of Occupancy.  Tenant is required to obtain any and all
permits required by state, county, city or any other regulatory body having
jurisdiction over Premises and/or Tenant’s business.  All work done on the Premises shall be done
in accordance with all local, state and federal applicable laws and
regulations.”


6.            Tenant’s Percentage Share of Operating Costs and
Taxes; Utilities.  


A.           Landlord and Tenant agree that for
the purpose of computing Tenant’s Percentage Share of Operating Costs and
Taxes, the Premises shall be deemed to be fifty-two thousand seven hundred
fifty-six (52,756) square feet of Net Rentable Area, and the Building shall be
deemed to have a Net Rentable Area of ninety one thousand six hundred
eighty-two (91,682) square feet.  Tenant
understands that the Net Rentable Area of the building can and will change from
time to time due to potential changes in the use of building space.  As of the Effective Date, Tenant’s Percentage
Share of Operating Costs and Taxes shall be 57.542%.


B.           For purposes of more accurately computing Tenant's
Percentage Share of Operating Costs and Taxes, including Tenant's share of
electricity, natural gas, and trash from January 1, 1999 and on, the
electrical, gas, and trash use by each tenant specifically shall be computed by
dividing net square footage of the Tenant's Premises by the amount of net rented
square footage instead of the net rentable square footage. 









 



C.           Landlord
hereby reaffirms that Landlord will comply with the terms of Section 5.2 of the
Lease which specifically provides that a) on December 1 of each calendar year
or as soon thereafter as practicable, Landlord shall give Tenant notice of its
adjusted estimate of Tenant’s Percentage Share of Operating Costs and Taxes for
the succeeding calendar year; and b) within one hundred twenty (120) days after
the close of each calendar year or as soon after such one hundred twenty (120)
day period as practicable, Landlord shall deliver to Tenant a statement of
Tenant’s Percentage Share of Operating Costs and Taxes for such calendar
year.  The notice referenced in
subsection a) above shall be referred to herein as “Notice” and the statement
referenced in subsection b) above shall be referred to herein as “Statement.”  Landlord hereby agrees that in the event that
Landlord fails to send a Statement each year for the preceding calendar year,
Tenant shall only be obligated to pay Tenant’s Percentage Share of Operating Costs
and Taxes for the preceding calendar year which is equal to the amounts
actually paid; provided however, if Tenant discovers pursuant to its audit
rights that Tenant has made an overpayment, Tenant shall have the right to a
refund of such overpayment.  In the event
Landlord fails to send a Statement each year for the preceding calendar year, Landlord
shall waive its rights to recompute or reassess any prior year’s Operating
Costs owed by Tenant.


7.            Operating Costs.


A.            The cleaning of the men’s and women’s
restrooms/locker rooms on the first floor adjacent to the “L” shaped hallway
and the supplies, e.g. paper towels, toilet paper, soap, etc., for said
bathrooms will be the responsibility of the Landlord.  As of the Effective Date, the expenses for
the above-mentioned rest room/locker room cleaning and supplies will be
included in the Operating Costs.


8.            Security Deposit.  Tenant shall not be required to provide
Landlord with an additional security deposit due to the increase of the Net
Rentable Area of the Premises or due to the options granted in this Second
Extension.


9.            Lease and Commissions.  Paragraph 9 of Addendum 1 of the Commercial
Lease is hereby deleted in its entirety. 
Landlord agrees to compensate Jacobsma & Associates (“Broker”) per a
separate agreement for any lease extensions and/or modifications to any
agreements made between Landlord and Tenant from the date of this Second
Extension through and including January 1, 2025.  Landlord and Tenant each warrant and
represent to the other that, except for the Broker, they have not communicated
with nor incurred any obligations to pay a fee or commission to any broker in
connection with this Second Extension. 
Landlord agrees to indemnify and hold harmless Tenant against and from
any claims for any brokerage commissions and all costs, expenses and liabilities
in connection therewith, including, without limitation, reasonable attorneys’
fees and expenses, arising out of any conversations or negotiations had by
Landlord with any broker other than the Broker.


10.          Relocation of the Premises.  Section 20.11 of the Lease is hereby deleted
in its entirety.


11.          Accrued Rent and Tenant’s Share of
Operating Expenses, Taxes, Utilities.   Landlord and Tenant agree that as of the December
31, 2005, the outstanding balance of accrued rent and Tenant’s share of
operating expenses, taxes and utilities is as shown on Exhibit “C” attached.  Landlord and Tenant have agreed as per a
separate payment plan as to how and when that amount shall be repaid to
Landlord.  A default on that payment plan
constitutes a default in the lease.


12.          Effect of Amendment.  Except as modified by the terms of this
Second Extension, the Lease 









 



shall continue in full force and
effect.  In the event of any conflict
between the terms of this Second Extension and the terms of the Lease, the
terms of this Second Extension shall control.


IN WITNESS WHEREOF, the parties
have executed this Second Extension in duplicate to be effective as of January
1, 2006.


	
  Research Way Investments,

  	
   

  	
  AVI BioPharma, Inc.,

  
	
  a California Limited Partnership

  	
   

  	
     an Oregon corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: Rex Jacobsma

  	
   

  	
  By:

  	
   

  
	
  Its: General Partner

  	
   

  	
  Its:

  	
   

  



 









 



Exhibit “A”

Floorplan Showing Space









 



Exhibit “A-1”

Schedule and Dates of Expansion




	
  Begin Period

  	
   

  	
  Rent Sq. Feet

  	
   

  	
  CAM Sq. Feet

  	
   

  	
  Change

  	
   

  
	
  4/14/93

  	
   

  	
  13,180

  	
   

  	
  13,341

  	
   

  	
   

  	
   

  
	
  9/1/96

  	
   

  	
  18,407

  	
   

  	
  18,568

  	
   

  	
  5,227

  	
   

  
	
  6/15/00

  	
   

  	
  28,804

  	
   

  	
  28,804

  	
   

  	
  10,397

  	
  *

  
	
  9/15/00

  	
   

  	
  32,460

  	
   

  	
  32,460

  	
   

  	
  3,656

  	
   

  
	
  7/1/01

  	
   

  	
  36,460

  	
   

  	
  36,460

  	
   

  	
  4,000

  	
   

  
	
  1/1/02

  	
   

  	
  49,620

  	
   

  	
  49,620

  	
   

  	
  13,160

  	
   

  
	
  3/1/02

  	
   

  	
  49,740

  	
   

  	
  49,740

  	
   

  	
  120

  	
   

  
	
  2/1/04

  	
   

  	
  52,756

  	
   

  	
  52,756

  	
   

  	
  3,016

  	
  **

  










*                    10,397
square feet of space taken on 6/15/05 is comprised of 9,669 square feet of new
space taken on 1st floor, 338 square feet at north end of
shipping/receiving area which was taken years before but not charged for, 128
square feet of AVI’s stairwell (previously not charged for as it was only for
emergency use), 262 square feet  (40% of
downstairs restroom space adjacent to “L” shaped hallway.)


**             3,016
square feet includes 2,700 square feet of expansion space and 312 square feet
(40%) of square footage of “L” shaped corridor in front of the above-mentioned
locker rooms on first floor of building as per SIGA’s expansion.









 



Exhibit “B”


Landlord’s Construction Responsibilities


Landlord agrees to perform the following work at
Landlord’s sole expense:


 


1.             Repair
of damage caused by screws which Landlord’s representative put in the
electrical conduit, which occurred when the roof was replaced. 


 


2.             Provide
an alternative access route to the roof which is acceptable to Tenant and which
shall replace the existing ladder.   


 


3.             Provide
a set of steps to the trash dumpster which is acceptable to Tenant and to OSHA.


 


4.             Repair/replacement
of the existing building fire alarm system as previously discussed by Mr. Jim
Patton of the Corvallis fire department. 


 


The cost of all of the above items will be included in the building
operating expenses. Landlord shall reimburse Tenant as per separate agreement
towards Tenant’s existing fire alarm system.