Document:

Prepared by MerrillDirect

Exhibit 10.37

THIS WARRANT, AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE HEREOF, HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY
NOT BE REOFFERED OR SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT PURSUANT TO (1) REGISTRATION OR (2) AN OPINION OF COUNSEL
FOR THE COMPANY OR OTHER COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. 
THIS WARRANT IS ALSO SUBJECT TO THE TERMS OF AN INVESTMENT AGREEMENT
DATED MAY 22, 2001.

WARRANT

To
Purchase Shares of Common Stock of

AVI BIOPHARMA, INC.

June
20, 2001

 

             AVI
BioPharma, Inc., an Oregon corporation (the “Company”), for value received,
hereby certifies that Medtronic Asset Management, Inc., a Minnesota
corporation, or its registered assigns (the “Holder”) is entitled, subject to
the terms set forth below, upon exercise of this Warrant to purchase from the
Company 3,000,000 shares of Common Stock, $0.0001 par value, of the Company (as
further defined in Section 5 below, “Common Stock”). Until adjusted as provided
by the terms of this Warrant, the exercise price per share (the “Exercise
Price”) shall be $10.  The shares
issuable upon exercise of this Warrant, as adjusted from time to time pursuant
to the provisions of this Warrant, are hereinafter referred to as the “Warrant
Shares.”

             This
Warrant is further subject to the following provisions, terms and conditions:

             1.          Term. Subject to Section 13
below, this Warrant may be exercised by the Holder, in whole or in part, at any
time before the close of business on the date five years after the date hereof.

             2.          Manner of Exercise.  This Warrant may be exercised by the Holder,
in whole or in part (but not as to any fraction of a share of Common Stock), by
surrendering this Warrant, with the Exercise Form attached hereto as Exhibit A filled in and duly executed by
such Holder or by such Holder’s duly authorized attorney, to the Company at its
principal office accompanied by payment of the Exercise Price in the amount of
the Exercise Price multiplied by the number of shares as to which the Warrant
is being exercised.  The Exercise Price
may be paid in the form of a check or wire transfer of funds.

             3.          Effective Date of Exercise.  Each exercise of this Warrant shall be
deemed effective as of the close of business on the day on which this Warrant
is surrendered to the Company as provided in Section 2 or Section 3(a)
above.  At such time, the person or
persons in whose name or names any certificates for Warrant Shares shall be
issuable upon such exercise shall be deemed to have become the holder or
holders of record of the Warrant Shares represented by such certificates.  Within 10 days after the exercise of this
Warrant in full or in part, the Company will, at its expense, cause to be
issued in the name of and delivered to the Holder or such other person as the
Holder may (upon payment by such Holder of any applicable transfer taxes)
direct:  (i) a certificate or
certificates for the number of full Warrant Shares to which such Holder is
entitled upon such exercise, and (ii) unless this Warrant has expired, a new
Warrant or Warrants (dated the date hereof and in form identical hereto)
representing the right to purchase the remaining number of shares of Common
Stock, if any, with respect to which this Warrant has not then been exercised.

             4.          Adjustments to Exercise Price.  The above provisions are, however, subject
to the following:

(a)         (i)          If
the Company shall at any time after the date of this Warrant subdivide or
combine the outstanding shares of Common Stock or declare a dividend payable in
Common Stock, then the number of shares of Common Stock for which this Warrant
may be exercised as of immediately prior to the subdivision, combination or
record date for such dividend payable in Common Stock shall forthwith be
proportionately decreased, in the case of combination, or increased, in the
case of subdivision or dividend payable in Common Stock.

             (ii)         If the Company shall at any time after the date of this
Warrant subdivide or combine the outstanding shares of Common Stock or declare
a dividend payable in Common Stock, the Exercise Price in effect immediately
prior to the subdivision, combination or record date for such dividend payable
in Common Stock shall forthwith be proportionately increased, in the case of
combination, or decreased, in the case of subdivision or dividend payable in
Common Stock.

             (b)        If
any capital reorganization or reclassification of the capital stock of the
Company, or share exchange, combination, consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, share exchange, combination, consolidation, merger or sale,
lawful and adequate provision shall be made whereby the Holder shall thereafter
have the right to receive upon exercise of this Warrant, upon the basis and
upon the terms and conditions specified in this Warrant and in lieu of the
shares of the Common Stock of the Company into which this Warrant could be
exercisable or convertible, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the maximum number of shares of such stock
issuable upon exercise of this Warrant, and in any such case appropriate
provisions shall be made with respect to the rights and interests of Holder to
the end that the provisions hereof (including without limitation provisions for
adjustments of the Exercise Price and of the number of shares purchasable upon
exercise of this Warrant) shall thereafter be applicable, as nearly as may be,
in relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.  The Company
shall not effect any such share exchange, combination, consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such share exchange, combination,
consolidation or merger or the corporation purchasing such assets shall assume
by written instrument executed and mailed to the Holder, at the last address of
such Holder appearing on the books of the Company, the obligation to deliver to
such Holder such shares of stock, securities or assets that, in accordance with
the foregoing provisions, such Holder may thereafter be entitled to receive
upon exercise of this Warrant.

             (c)         If
at any time after the date of this Warrant the Company distributes to all
holders of Common Stock any assets (excluding ordinary cash dividends), debt
securities, or any rights or warrants to purchase debt securities, assets or
other securities (excluding Common Stock covered by Sections 5(a) or (b)),
the Exercise Price shall be adjusted in accordance with the formula:

                                        E1
= E x (O x M) - F

                                                         O x M

where:

	 	E1
  =	the
  adjusted Exercise Price.
	 	E  =	the
  current Exercise Price.
	 	M
  =	the
  average market price of Common Stock for the 30 consecutive trading days
  commencing 45 trading days before the record date mentioned below.
	 	O  =	the
  number of shares of Common Stock outstanding on the record date mentioned
  below.
	 	F  =	the
  fair market value on the record date of the aggregate of all assets,
  securities, rights or warrants distributed. 
  The Company’s Board of Directors shall determine the fair market value
  in the exercise of its reasonable judgment.

The
adjustment shall be made successively whenever any such distribution is made
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.

             (d)        Upon
any adjustment of the Exercise Price, then and in each such case, the Company
shall give written notice thereof, by first class mail or equivalent, postage
prepaid, addressed to the Holder of this Warrant at the address of such Holder
as shown on the books of the Company, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease, if any, in
the number of shares for which this Warrant may be exercised, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.

             5.          Common Stock.  As used herein, the term “Common Stock”
shall mean and include the Company’s presently authorized shares of common
stock and shall also include any capital stock of any class of the Company
hereafter authorized that is not limited to a fixed sum or percentage in
respect of the rights of the holders thereof to participate in dividends or in
the distribution, dissolution or winding up of the Company.

             6.          No Voting Rights.  This Warrant shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Company unless and
until exercised or converted pursuant to the provisions hereof.

             7.          Exercise or Transfer of Warrant or
Resale of Common Stock.  The Holder,
by acceptance hereof, agrees to give written notice to the Company before
exercising this Warrant, or transferring this Warrant, in whole or in part, or
transferring any shares of Common Stock issued upon the exercise hereof, of
such Holder’s intention to do so, describing briefly the manner of any proposed
transfer.  Such notice shall include an
opinion of counsel reasonably satisfactory to the Company that (i) the proposed
exercise or transfer may be effected without registration or qualification
under the Securities Act of 1933, as amended (the “Act”), and any applicable
state securities or blue sky laws, or (ii) the proposed exercise or transfer
has been registered under such laws. 
Upon delivering such notice, such Holder shall be entitled to exercise
or transfer this Warrant or such Warrant Shares, all in accordance with the
terms of the notice delivered by such Holder to the Company; provided, that an
appropriate legend may be endorsed on the certificates for such shares
respecting restrictions upon transfer thereof necessary or advisable in the
opinion of counsel to the Company to prevent further transfer that would be in
violation of Section 5 of the Act and applicable state securities or blue sky
laws.

             If
in the opinion of counsel to the Company or other counsel reasonably acceptable
to the Company the proposed exercise, transfer or disposition of this Warrant
or the Warrant Shares described in the written notice given pursuant to this
Section 8 may not be effected without registration of this Warrant or the
Warrant Shares, the Company shall promptly give written notice thereof to the
Holder within 10 days after the Company receives such notice, and such holder
will limit its activities in respect to such as, in the opinion of such
counsel, is permitted by law.

             Further,
notwithstanding anything above to the contrary, this Warrant may not be
transferred by the Holder hereof in warrant form except to a subsidiary of the
Holder.

             8.          Covenants of the Company.  The Company covenants and agrees that all
shares that may be issued upon exercise of this Warrant will, upon issuance, be
duly authorized and issued, fully paid, nonassessable and free from all taxes,
liens and charges with respect to the issuance thereof.  The Company further covenants and agrees
that the Company will at all times have authorized, and reserved for the
purpose of issuance upon exercise hereof, a sufficient number of shares of its
Common Stock to provide for the exercise of this Warrant.

             9.          Certain Notices.  The Holder shall be entitled to receive from
the Company immediately upon declaration thereof and at least 20 days prior to
the record date for determination of shareholders entitled thereto or to vote
thereon (or, if no record date is set, prior to the event), written notice of
any event that could require an adjustment pursuant to Section 5 hereof or of
the dissolution or liquidation of the Company. 
All notices under this Warrant shall be in writing and shall be
delivered personally or by telecopy (receipt confirmed) to such party (or, in
the case of an entity, to an executive officer of such party) or shall be sent
by a reputable express delivery service or by certified mail, postage prepaid
with return receipt requested, addressed as follows:

if to the Holder, to:

             Medtronic, Inc.

             710 Medtronic Parkway NE

             Minneapolis, MN 55432-5604

             with
separate copies thereof addressed to

	Attention:	General
  Counsel	 
	 	Mail
  Stop LC400	 
	 	Telecopier
  No.:  (763) 572-5459	 
	 	 	 
	and	 	 
	 	 	 
	Attention:	Vice
  President and Chief Development Officer	 
	 	Mail
  Stop LC390	 
	 	Telecopier
  No.:  (763) 505-2542	 

if to the Company to:

             AVI BioPharma, Inc.

             One SW Columbia

             Portland, OR 97258

             Attn: President

With separate copies to:

             Robert A. Stout, Esq.

             HURLEY, LYNCH & RE, P,.C.

             747 SW Industrial Way

             Bend, OR  97702

             Any
party may change the above–specified recipient and/or mailing address by
notice to all other parties given in the manner herein prescribed.  All notices shall be deemed given on the day
when actually delivered as provided above (if delivered personally or by
telecopy) or on the day shown on the return receipt (if delivered by mail or
delivery service).

             10.        Registration Rights.  The Holders of this Warrant and the Warrant
Shares are entitled to the rights and benefits of all of the terms, provisions
and conditions of that certain 
Registration Rights Agreement dated of even date herewith between the
Company and Medtronic Asset Management, Inc., provided an express sharing or
assignment of such rights and benefits is made to each such Holder by such
Holder’s transferor.  Notwithstanding
the foregoing or any provisions of the Registration Rights Agreement to the
contrary, the Holder agrees not to sell or transfer any Warrant Shares for at
least thirty-two (32) days after conversion or exercise of this Warrant which
resulted in the issuance of such Warrant Shares.

             11.        Miscellaneous.

             (a)         No
amendment, modification or waiver of any provision of this Warrant shall be
effective unless the same shall be in writing and signed by the holder hereof.

             (b)        This
Warrant shall be governed by and construed in accordance with the laws of the
State of Oregon.

             12.        Cancellation Rights.  The Company may cancel this Warrant, to the
extent it remains unexercised, at any time if the Daily Price has exceeded
$20.00 for 20 consecutive trading days immediately preceding the date of notice
of such cancellation, upon 190 days' notice given in accordance with Section 10
and Holder’s failure to exercise this Warrant within such notice period.  No consideration or price shall be payable
by the Company for such cancellation. 
For the purpose of the foregoing sentence, the term "Daily
Price" shall mean, for any relevant day, the closing bid price on that day
as reported by the principal exchange or quotation system on which prices for
the Common Stock are reported, and such $20.00 shall be subject to adjustment
in the same manner in which the Exercise Price is subject to adjustment under
Section 4 and the Holder is entitled to notice thereof under Section 4(d).  The Holder may exercise this Warrant in
whole or in part at any time during such 190-day notice period.  This Warrant shall no longer be exercisable
in whole or in part from and after the 191st day after such notice.

             IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
authorized officer and dated as of the date stated above.

 

	 	AVI
  BIOPHARMA, INC.
	 	 
	 	By:    Denis Burger
	 	 	

	 	Its:  	         CEO      	 
	 	 	

					

 

 

Exhibit A

 

NOTICE OF EXERCISE OF
WARRANT —    To Be Executed by the Registered Holder in
Order to Exercise the Warrant

 

             The
undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase, for cash pursuant to Section 2 thereof, ________________ shares of
Common Stock issuable upon the exercise of such Warrant.  The undersigned requests that certificates
for such shares be issued in the name of
__________________________________.  If
this Warrant is not fully exercised, the undersigned requests that a new
Warrant to purchase the balance of shares remaining purchasable hereunder be
issued in the name of ______________________________.

 

	Date:  ___________, 20__	 	 	 
	 	 	

	 
	 	 	[name
  of registered Holder]	 
	 	 	 	 
	 	 	 	 
	 	 	

	 
	 	 	[signature]	 
	 	 	 	 
	 	 	 	 
	 	 	

	 
	 	 	[street
  address]	 
	 	 	 	 
	 	 	

	 
	 	 	[city,
  state, zip]	 
	 	 	 	 
	 	 	

	 
	 	 	[tax
  identification number]Prepared by MerrillDirect

Exhibit 10.38

REGISTRATION
RIGHTS AGREEMENT

             This
REGISTRATION RIGHTS AGREEMENT, dated as of June 20, 2001 (this “Agreement”), is
made by and among AVI BIOPHARMA, an Oregon corporation (the “Company”), and
MEDTRONIC ASSET MANAGEMENT, INC., a Minnesota corporation (“Investor”).

RECITALS:

             A.         This Agreement is made in connection
with the Investment Agreement dated as of May 22, 2001 between Investor
and the Company (the “Investment Agreement”).

             B.          In order to induce Investor to execute
and deliver the Investment Agreement, the Company has agreed to provide certain
registration rights under the Securities Act and applicable state securities
laws with respect to the shares of Company Common Stock, $0.0001 par value per
share (“Common Stock”) to be purchased by Investor pursuant to the Investment
Agreement, the Warrant and the shares of Common Stock issuable upon exercise
thereof.

             In
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Investor hereby agree as follows:

ARTICLE
1

DEFINITIONS

             Capitalized
terms used and not otherwise defined herein have the respective meanings given
them set forth in the Investment Agreement. 
In addition, as used in this Agreement, the following terms have the
following meanings:

             1.1        “Holder” means Investor and any of its
transferees or assignees who agree to become bound by the provisions of this
Agreement in accordance with Article 9 hereof.

             1.2        “Registrable Securities” means the
Purchased Securities, including the Purchased Shares, Warrant and Warrant
Shares as defined in the Investment Agreement and any shares of capital stock
issued or issuable from time to time (with any adjustments) in exchange for or
otherwise with respect to the Purchased Shares.

             1.3         “Registration Period” means the period
between the date of this Agreement and the earlier of (i) the date on which all
of the Registrable Securities have been sold by Investor and no further
Registrable Securities may be issued in the future, (ii) the date on which all
the Registrable Securities (in the opinion of the Company’s counsel, which
opinion is reasonably acceptable to Investor and its counsel) may be
immediately sold by Investor without registration and without restriction
(including without limitation as to volume by each holder thereof) as to the
number of Registrable Securities to be sold, pursuant to Rule 144(k), or
(iii) December 31, 2011.

             1.4        “Registration Statement” means a
Registration Statement of the Company filed under the Securities Act.

             1.5        The terms “register,” “registered,” and
“registration” refer to a registration effected by preparing and filing a
Registration Statement or statements in compliance with the Securities Act and
pursuant to Rule 415 and the declaration or ordering of effectiveness of such
Registration Statement by the SEC.

             1.6        “Rule 415” means Rule 415 under the
Securities Act, or any successor Rule providing for offering securities on a
continuous basis, and applicable rules and regulations thereunder.

ARTICLE
2

REGISTRATION

             2.1        Mandatory Registration.  The Company will use best efforts to file
with the SEC a Registration Statement on Form S-3 (or any successor form
thereto, “Form S-3”) registering the Registrable Securities for
resale.  Investor shall have the right
to request in writing any number of registrations on Form S-3 for any or all
Registrable Securities held by the Investor, which notice shall specify the
number of Registrable Securities to be so registered; provided that each such
demand shall include a request for registration of at least $1,000,000 in
Registrable Securities.  The Company
shall use its best efforts to effect promptly, and in any event within sixty
(60) days after request, the registration of such Registrable Securities and to
maintain such registration for at least one hundred eighty
(180) days.   If Form S-3 is not
available at that time, then the Company will file a Registration Statement on
such form as is then available to effect a registration of the Registrable
Securities, subject to the consent of Investor, which consent will not be
unreasonably withheld; provided, the Company shall not be required to effect
more than two registrations on Form S-1 or other form of general
registration.

             2.2        Effectiveness of the Registration
Statement.  The Company will use its
best efforts to cause each Registration Statement to be declared effective by
the SEC as soon as practicable after filing. 
The Company’s best efforts will include, but will not be limited to,
promptly responding to all comments received from the staff of the SEC.  If the Company receives notification from
the SEC that the Registration Statement will receive no action or review from
the SEC, then the Company will cause the Registration Statement to become
effective within five business days after such SEC notification.  Once the Registration Statement is declared
effective by the SEC, the Company will cause the Registration Statement to
remain effective throughout the period set forth in Section 2.1, except as
permitted under Section 3.

             2.3        Piggyback Registrations.

             (a)         If, at any time prior to the expiration
of the Registration Period, a Registration Statement is not effective with
respect to all of the Registrable Securities and the Company decides to
register any of its securities for its own account or for the account of
others, then the Company will promptly give Investor written notice thereof and
will use its best efforts to include in such registration all or any part of
the Registrable Securities requested by such Investor to be included therein
(excluding any Registrable Securities previously included in a Registration
Statement).  This requirement does not
apply to Company registrations on Form S-4 or S-8 or their equivalents relating
to equity securities to be issued solely in connection with an acquisition of
any entity or business or equity securities issuable in connection with stock
option or other employee benefit plans. 
Investor must give its request for registration under this paragraph to
the Company in writing within 20 days after receipt from the Company of notice
of such pending registration.  If the
registration for which the Company gives notice is a public offering involving
an underwriting, the Company will so advise Investor as part of the
above-described written notice.  In that
event, if the managing underwriter(s) of the public offering impose a
limitation on the number of shares of Common Stock that may be included in the
Registration Statement because, in such

underwriter(s)’ judgment, such limitation would be necessary to effect an
orderly public distribution, then the Company will be obligated to include only
such limited portion, if any, of the Registrable Securities with respect to
which Investor has requested inclusion hereunder.  Subject to provisions for existing holders of preferred or
preferential piggyback rights pursuant to agreements dated prior to the date
hereof, any exclusion of Registrable Securities will be made pro rata among all
holders of the Company’s securities seeking to include shares of Common Stock
in proportion to the number of shares of Common Stock sought to be included by
those holders.  The Company may grant
similar piggyback registration rights on a priority with those granted herein
to others (“Additional Holders”) in connection with financings and/or
acquisition of stock, assets or technology rights.  However, the Company will not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities the holders of
which are not entitled by prior right (pursuant to an agreement dated prior to
the date hereof) or as Additional Holders to inclusion of securities in such
Registration Statement or are not entitled to pro rata inclusion with the
Registrable Securities.

             (b)        No right to registration of Registrable
Securities under this Section 2.3 limits in any way the registration required
under Section 2.1 above.  The
obligations of the Company under this Section 2.3 with respect to any
particular Registrable Securities expire upon the earlier of (i) the
effectiveness of a Registration Statement filed pursuant to Section 2.1 above
with respect to such Registrable Securities; (ii) after the Company has
afforded the opportunity for Investor to exercise registration rights under
this Section 2.3 with respect to such Registrable Securities for two
registrations (provided, however, that if Investor has had any Registrable
Securities excluded from any Registration Statement in accordance with this
Section 2.3, Investor may include in any additional Registration Statement
filed by the Company the Registrable Securities so excluded), (iii) when all of
the Registrable Securities held by Investor may be sold by Investor under Rule
144(k) without being subject to any volume restrictions, or
(iv) December 31, 2011.

             2.4        Reporting Status; Eligibility to Use
Form S-3.  The Company represents
and warrants that its Common Stock is registered under Section 12 of the
Exchange Act.  Throughout the Registration
Period, the Company will timely file all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC under the reporting
requirements of the Exchange Act, and will not terminate its status as an
issuer required to file reports under the Exchange Act even if the Exchange Act
or the rules and regulations thereunder would permit such termination.  The Company currently meets, and will take
all reasonably necessary action to continue to meet, the “registrant eligibility”
requirements set forth in the general instructions to Form S-3 to enable the
registration of the Registrable Securities.

ARTICLE
3

ADDITIONAL OBLIGATIONS OF THE COMPANY

             3.1        Continued
Effectiveness of Registration Statement. 
Subject to the limitations set forth in Section 3.6, the Company will
use its best efforts to keep the Registration Statement covering the
Registrable Securities effective for one hundred eighty (180) days.  In the event that the number of shares
available under a Registration Statement filed pursuant to this Agreement is
insufficient to cover all of the Registrable Securities issued, the Company
will (if permitted) amend the Registration Statement or file a new Registration
Statement (on the short form available therefor, if applicable), or both, so as
to cover all of the Registrable Securities. 
The Company will file such amendment or new Registration Statement as
soon as practicable, but in no event later than 30 business days after the
necessity therefor arises (based upon the market price of the Common Stock and
other relevant factors on which the Company reasonably elects to rely).  The Company will use its best efforts to
cause such amendment or new Registration Statement to become effective as soon
as is practicable after the filing thereof, but in no event later than 90 days
after the date on which the Company reasonably first determines (or reasonably
should have determined) the need therefor.

             3.2        Accuracy of Registration Statement.  Any Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) filed by
the Company covering Registrable Securities will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.  The Company will prepare and file with the
SEC such amendments (including post-effective amendments) and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to permit sales pursuant to the
Registration Statement at all times during the Registration Period, and, during
such period, will comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities of the Company covered by the
Registration Statement until the termination of the Registration Period, or if
earlier, until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by Investor
as set forth in the Registration Statement.

             3.3        Furnishing Documentation.  The Company will furnish to Investor or to
its legal counsel, (a) promptly after each document is prepared and publicly
distributed, filed with the SEC or received by the Company, one copy of any
Registration Statement filed pursuant to this Agreement and any amendments
thereto, each preliminary prospectus and final prospectus and each amendment or
supplement thereto; and (b) a number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto, and such
other documents as Investor may reasonably request in order to facilitate the
disposition of the Registrable Securities. 
The Company will immediately notify by facsimile Investor of the
effectiveness of the Registration Statement and any post-effective amendment.

             3.4        Additional Obligations.  The Company will use its best efforts to (a)
register and qualify the Registrable Securities covered by a Registration
Statement under such other securities or blue sky laws of such jurisdictions as
Investor reasonably requests, (b) prepare and file in those jurisdictions any
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain their
effectiveness during the Registration Period, (c) take any other actions
necessary to maintain such registrations and qualifications in effect at all
times during the Registration Period, and (d) take any other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions.  Notwithstanding the
foregoing, the Company is not required, in connection such obligations, to (i)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3.4, (ii) subject itself to general
taxation in any such jurisdiction, (iii) file a general consent to service of
process in any such jurisdiction where it has not so consented, (iv) provide
any undertakings that cause material expense or burden to the Company, or (v)
make any change in its charter or bylaws, which in each case the Board of
Directors of the Company determines to be contrary to the best interests of the
Company and its stockholders.

             3.5        Underwritten Offerings.  If Investor selects underwriters reasonably
acceptable to the Company for the offering of Registrable Securities pursuant
to a Registration Statement, the Company will enter into and perform its
obligations under an underwriting agreement in usual and customary form
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering.

             3.6        Suspension of Registration.

             (a)         The Company will notify (by telephone
and also by facsimile and reputable overnight courier) Investor of the
happening of any event of which the Company has knowledge as a result of which
the prospectus included in the Registration Statement as then in effect
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.  The Company will make such notification as
promptly as practicable after the Company becomes aware of the event , will
promptly (but in no event more than ten business days) prepare a supplement or
amendment to the Registration Statement to correct such untrue statement or
omission, and will deliver a number of copies of such supplement or amendment
to Investor as Investor may reasonably request.

             (b)        Notwithstanding the obligations under
Section 3.6(a), if in the good faith judgment of the Company, following
consultation with legal counsel, it would be detrimental to the Company and its
stockholders for resales of Registrable Securities to be made pursuant to the
Registration Statement due to (i) the existence of a material development
involving the Company which the Company would be obligated to disclose in the
Registration Statement, which disclosure would be premature or otherwise
inadvisable at such time or would have a Material Adverse Effect upon the
Company and its stockholders, or (ii) in the good faith judgment of the
Company’s Board of Directors, it would adversely affect or require premature
disclosure of the filing of a Company-initiated registration of any class of
its equity securities, the Company will have the right to suspend the use of the
Registration Statement for a period of not more than 60 days, provided,
however, that the Company may so defer or suspend the use of the Registration
Statement no more than one time in any twelve-month period, and provided,
further, that after deferring or suspending the use of the Registration
Statement, the Company may not again defer or suspend the use of the
Registration Statement until a period of thirty days has elapsed after
resumption of the use of the Registration Statement.

             (c)         Subject to the Company’s rights under
this Section 3, the Company will use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement and, if such an order is issued, will use its best efforts to obtain
the withdrawal of such order at the earliest possible time and to notify
Investor (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof.

             (d)        Notwithstanding anything to the contrary
contained herein or in the Investment Agreement, if the use of the Registration
Statement is suspended by the Company, the Company will promptly give notice of
the suspension to Investor and will promptly notify Investor as soon as the use
of the Registration Statement may be resumed.

             3.7        Review by Investor.  The Company will permit legal counsel,
designated by Investor, to review the Registration Statement and all amendments
and supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC, and
will not file any document in a form to which such counsel reasonably objects,
unless otherwise required by law in the opinion of the Company’s counsel.  The sections of any such Registration
Statement including information with respect to Investor, Investor’s beneficial
ownership of securities of the Company or Investor’s intended method of
disposition of Registrable Securities must conform to the information provided
to the Company by Investor.

             3.8        Comfort Letter; Legal Opinion.  At the request of Investor and on the date
that Registrable Securities are delivered to an underwriter for sale in
connection with the Registration Statement, the Company will furnish to
Investor and the underwriters (i) a letter, dated such date, from the Company’s
independent certified public accountants, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters; and (ii) an
opinion, dated such date, from counsel representing the Company for purposes of
the Registration Statement, in form and substance as is customarily given in an
underwritten public offering, addressed to the underwriters and Investor.

             3.9        Due Diligence; Confidentiality.

             (a)         The Company will make available for
inspection by Investor, any underwriter participating in any disposition
pursuant to the Registration Statement, and any attorney, accountant or other
agent retained by Investor or underwriter (collectively, the “Inspectors”), all
pertinent financial and other records, pertinent corporate documents and
properties of the Company (collectively, the “Records”), as each Inspector
reasonably deems necessary to enable the Inspector to exercise its due
diligence responsibility.  The Company
will cause its officers, directors and employees to supply all information that
any Inspector may reasonably request for purposes of performing such due
diligence.

             (b)        Each Inspector will hold in confidence,
and will not make any disclosure (except to another Inspector) of, any Records
or other information that the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (ii) the release of
such Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, (iii) the information in such
Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement (to the knowledge of the
relevant Inspector), (iv) the Records or other information was developed
independently by an Inspector without breach of this Agreement, (v) the
information was known to the Inspector before receipt of such information from
the Company, or (vi) the information was disclosed to the Inspector by a third
party without restriction.  The Company
is not required to disclose any confidential information in the Records to any
Inspector unless and until such Inspector has entered into a confidentiality
agreement (in form and substance satisfactory to the Company) with the Company
with respect thereto, substantially in the form of this Section 3.9.  Investor will, upon learning that disclosure
of Records containing confidential information is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at the Company’s expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.  Nothing herein will be deemed to limit Investor’s
ability to sell Registrable Securities in a manner that is otherwise consistent
with applicable laws and regulations.

             (c)         The Company will hold in confidence,
and will not make any disclosure of, information concerning Investor provided
to the Company under this Agreement unless (i) disclosure of such
information is necessary to comply with federal or state securities laws,
(ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, (iv) such information has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement (v) the information was disclosed to the
Company by a third party without restriction or (vi) Investor consents to the
form and content of any such disclosure. 
If the Company learns that disclosure of such information concerning
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, the Company will give prompt notice to
Investor prior to making such disclosure and allow Investor, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.

             3.10      Listing.  The Company will (i) cause all of the Registrable Securities
covered by each Registration Statement to be listed on each national securities
exchange on which Common Stock of the Company is then listed, if any, if the
listing of such Registrable Securities is then permitted under the rules of
such exchange, or (ii) to the extent the Common Stock is not then listed on a
national securities exchange, secure the designation and quotation of all of
the Registrable Securities covered by each Registration Statement on Nasdaq
and, without limiting the generality of the foregoing, arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. as such with respect to such Registrable Securities.

             3.11      Transfer Agent; Registrar.  The Company will provide a transfer agent
and registrar, which may be a single entity, for the Registrable Securities not
later than the effective date of the Registration Statement.

             3.12      Share Certificates.  The Company will cooperate with Investor and
with the managing underwriter(s), if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be offered pursuant to a Registration Statement and
will enable such certificates to be in such denominations or amounts as the
case may be, and registered in such names as Investor or the managing underwriter(s),
if any, may reasonably request.

             3.13      Unrestricted Securities.  If, (a) the Purchased Shares represented by
a certificate have been registered under an effective Registration Statement
filed under the Securities Act and sold under such Registration Statement, (b)
Investor provides the Company and it’s transfer agent with reasonable
assurances that such shares can be sold under Rule 144, or (c) the Purchased
Shares represented by a certificate can be sold without restriction as to the
number of securities sold under Rule 144(k), the Company will permit the
transfer of such securities, and will instruct its transfer agent to issue one
or more certificates, free from any restrictive legend, in such name and in
such denominations as specified by Investor. 
Notwithstanding anything herein to the contrary, the Purchased Shares
may be pledged as collateral in connection with a bona fide margin account or
other lending arrangement; provided that such pledge will not alter the
provisions of this section with respect to the removal of restrictive legends.

             3.14      Plan of Distribution.  At the request of Investor, the Company will
promptly prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement, and
the prospectus used in connection with the Registration Statement, as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.

             3.15      Securities Laws Compliance.  The Company will comply with all applicable
laws related to any Registration Statement relating to the sale of Registrable
Securities and to offering and sale of securities and with all applicable rules
and regulations of governmental authorities in connection therewith (including,
without limitation, the Securities Act, the Exchange Act and the rules and
regulations promulgated by the SEC).

             3.16      Further Assurances.  The Company will take all other reasonable
actions as Investor or the underwriters, if any, may reasonably request to
expedite and facilitate disposition by Investor of the Registrable Securities
pursuant to the Registration Statement.

ARTICLE
4

OBLIGATIONS OF INVESTOR

             4.1        Information.  As a condition to the obligations of the
Company to complete any registration pursuant to this Agreement with respect to
the Registrable Securities of Investor, Investor will furnish to the Company
such information regarding itself, the Registrable Securities held by it and
the intended method of disposition of the Registrable Securities held by it as
is reasonably required by the Company to effect the registration of the
Registrable Securities.  At least 15
business days prior to the first anticipated filing date of a Registration
Statement for any registration under this Agreement, the Company will notify
Investor of the information the Company requires from Investor if Investor
elects to have any of its Registrable Securities included in the Registration
Statement.  If, within three business
days prior to the filing date, the Company has not received the requested
information from Investor, then the Company may file the Registration Statement
without including Registrable Securities of Investor.

             4.2        Further Assurances.  Investor will cooperate with the Company, as
reasonably requested by the Company, in connection with the preparation and
filing of any Registration Statement hereunder, unless Investor has notified
the Company in writing of Investor’s election to exclude all of Investor’s
Registrable Securities from the Registration Statement.

             4.3        Suspension of Sales.  Upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3.6, Investor
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until it
receives copies of the supplemented or amended prospectus contemplated by
Section 3.6.  If so directed by the
Company, Investor will deliver to the Company (at the expense of the Company)
or destroy (and deliver to the Company a certificate of destruction) all copies
in Investor’s possession (other than a limited number of file copies) of the
prospectus covering such Registrable Securities that is current at the time of
receipt of such notice.

ARTICLE
5

EXPENSES OF REGISTRATION

             The
Company will bear all reasonable expenses, other than underwriting discounts
and commissions, and transfer taxes, if any, incurred in connection with
registrations, filings or qualifications pursuant to Articles 2 and 3 of this
Agreement, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, the fees and disbursements
of counsel for the Company, and the reasonable fees and disbursements of
Investor’s legal counsel.

ARTICLE
6

INDEMNIFICATION

             In
the event that any Registrable Securities are included in a Registration
Statement under this Agreement:

             6.1        To the extent permitted by law, the
Company will indemnify and hold harmless Investor, any underwriter(as defined
in the Securities Act) for Investor, any directors or officers of Investor or
such underwriter and any person who controls Investor or such underwriter
within the meaning of the Securities Act or the Exchange Act (each, an
“Indemnified Person”) against any losses, claims, damages, expenses or
liabilities (joint or several) (collectively, and together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened in respect thereof, “Claims”) to which any of
them become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims arise out of or are based upon any of the following
statements, omissions or violations in a Registration Statement (including any
exhibits or schedules thereto) filed pursuant to this Agreement, any amendment
or supplement thereof or any prospectus (preliminary or final) included
therein:(a) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment or supplement thereof
or the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (b) any untrue statement or alleged untrue statement of a material
fact contained in the prospectus (as it may be amended or supplemented) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (c) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act or any other
law, including without limitation any state securities law or any rule or
regulation thereunder (the matters in the foregoing clauses (a) through (c)
being, collectively, “Violations”). 
Subject to the restrictions set forth in Section 6.3 with respect to the
number of legal counsel, the Company will reimburse Investor and each such
underwriter or controlling person and each such other Indemnified Person,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any Claim. 
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6.1 (i) does not apply to a
Claim arising out of or based upon a violation that occurs in reliance upon and
in conformity with information furnished in writing to the Company by any Indemnified
Person expressly for use in connection with the preparation of the Registration
Statement (including any exhibits or schedules thereto) or any such amendment
thereof or supplement thereto, if such prospectus was timely made available by
the Company pursuant to Section 3.3 hereof; and (ii) does not apply to amounts
paid in settlement of any Claim if such settlement is made without the prior
written consent of the Company, which consent will not be unreasonably
withheld.  This indemnity obligation
will remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Persons and will survive the transfer of the
Registrable Securities by Investor under Article 9 of this Agreement.

             6.2
       In connection with any Registration
Statement in which Investor is participating, Investor will indemnify and hold
harmless, to the same extent and in the same manner set forth in Section 6.1
above, the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, and any other
stockholder selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such stockholder within
the meaning of the Securities Act or the Exchange Act (each an “Indemnified
Person”) against any Claim to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim arises out
of or is based upon any Violation, in each case to the extent (and only to the
extent) that such violation occurs in reliance upon and in conformity with
written information furnished to the Company by Investor expressly for use in
connection with such Registration Statement. 
Subject to the restrictions set forth in Section 6.3, Investor will
promptly reimburse any legal or other expenses (promptly as such expenses are
incurred and due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim. 
However, the indemnity agreement contained in this Section 6.2 does not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of Investor, which consent will not be
unreasonably withheld, and Investor will not be liable under this Agreement
(including this Section 6.2 and Article 7) for the amount of any Claim that
exceeds the net proceeds actually received by Investor as a result of the sale
of Registrable Securities pursuant to such Registration Statement.  This indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified
Party and will survive the transfer of the Registrable Securities by Investor
under Article 9 of this Agreement.

             6.3
       Promptly after receipt by an
Indemnified Person under this Article 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person will, if a
Claim in respect thereof is to be made against any indemnifying party under
this Article 6, deliver to the indemnifying party a written notice of the
commencement thereof.  The indemnifying
party may participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly given notice, assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying parties and the Indemnified Person.  In that case, the indemnifying party will diligently pursue such
defense.  If, in the reasonable opinion
of counsel retained by the indemnifying party, the representation by such
counsel of the Indemnified Person and the indemnifying party would be
inappropriate due to actual or potential conflicts of interest between the
Indemnified Person and any other party represented by such counsel in such
proceeding or the actual or potential defendants in, or targets of, any such
action including the Indemnified Person, and any such Indemnified Person
reasonably determines that there may be legal defenses available to such
Indemnified Person that are different from or in addition to those available to
the indemnifying party, then the Indemnified Person is entitled to assume such
defense and may retain its own counsel, with the fees and expenses to be paid
by the indemnifying party.  The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action does not relieve an indemnifying party of
any liability to an Indemnified Person under this Article 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.  The indemnification required by
this Article 6 will be made by periodic payments of the amount thereof during
the course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.

ARTICLE
7

CONTRIBUTION

             To
the extent that any indemnification provided for herein is prohibited or
limited by law, the indemnifying party will make the maximum contribution with
respect to any amounts for which it would otherwise be liable under Article 6
to the fullest extent permitted by law. 
However, (a) no contribution will be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Article 6, and (b) Investor’s contribution (together with any
indemnification or other obligations under this Agreement) will be limited in
amount to the net amount of proceeds received by Investor from the sale of such
Registrable Securities.

ARTICLE
8

EXCHANGE ACT REPORTING

             In
order to make available to Investor the benefits of Rule 144 or any similar
rule or regulation of the SEC that may at any time permit Investor to sell
securities of the Company to the public without registration, the Company will:

             (a)         File with the SEC in a timely manner,
and make and keep available, all reports and other documents required of the
Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such requirements (it being understood that nothing herein
limits the Company’s obligations under Section 5.2 of the Investment Agreement)
and the filing and availability of such reports and other documents is required
for the applicable provisions of Rule 144; and

             (b)        Furnish to Investor, so long as Investor
holds Registrable Securities, promptly upon Investor’s request, (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents filed by the Company with the SEC and (iii) such other information as
may be reasonably requested to permit Investor to sell such securities pursuant
to Rule 144 without registration.

ARTICLE
9

ASSIGNMENT OF REGISTRATION RIGHTS

             The
rights of Investor hereunder, including the right to have the Company register
Registrable Securities pursuant to this Agreement, will be automatically assigned
by Investor to transferees or assignees of all or any portion of the
Registrable Securities, but only if (a) Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment, (b)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (c) after such transferor assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, and
(d) at or before the time the Company received the written notice contemplated
by clause (b) of this sentence, the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein.

ARTICLE
10

AMENDMENT OF REGISTRATION RIGHTS

             This
Agreement may be amended and the obligations hereunder may be waived (either
generally or in a particular instance, and either retroactively or
prospectively) only with the written consent of the Company and Investor.  Any amendment or waiver effected in
accordance with this Article 10 is binding upon Investor and the Company.

ARTICLE
11

MISCELLANEOUS

             11.1      Conflicting Instructions.  A person or entity is deemed to be a holder
of Registrable Securities whenever such person or entity owns of record such
Registrable Securities.  If the Company
receives conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable Securities, the
Company will act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

             11.2      Notices.  Any notices required or permitted to be given under the terms of
this Agreement will be given as set forth in the Investment Agreement.

             11.3      Waiver.  Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
does not operate as a waiver thereof.

             11.4      Governing Law.  The formation, legality, validity,
enforceability and interpretation of this Agreement shall be governed by the
laws of the State of Minnesota, without giving effect to the principles of
conflict of laws; provided, however, that nothing in Minnesota procedural law
shall be deemed to alter or affect the applicability of the Federal Arbitration
Act as governing arbitration of disputes as provided in Section 11.14 and,
provided further, that no Minnesota laws or rules of arbitration shall be
applicable.  Subject to Section 11.14 hereof,
if arbitration is sought by Investor, such arbitration shall be in Multnomah
County, Oregon; and, if sought by AVI, such arbitration shall be in Hennepin
County, Minnesota; and in each such case, the parties hereto hereby submit to
the exclusive jurisdiction of the United States federal and state courts
located in such county with respect to any dispute arising under this
Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby, and irrevocably consent to the
exclusive jurisdiction and venue of such courts and waive any objections they
may have at any time to such exclusive jurisdiction and venue.

             11.5      Severability.  If any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision will be deemed modified in order to conform with such statute or rule
of law.  Any provision hereof that may
prove invalid or unenforceable under any law will not affect the validity or
enforceability of any other provision hereof.

             11.6      Entire Agreement.  This Agreement and the Investment Agreement
(including all schedules and exhibits hereto and thereto) constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
and thereof.  There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein or therein, with respect to the subject matter hereof and thereof.  This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.

             11.7      Successors and Assigns.  Subject to the requirements of Article 9
hereof, this Agreement inures to the benefit of and is binding upon the
successors and assigns of each of the parties hereto.  Notwithstanding anything to the contrary herein, including,
without limitation, Article 9, Investor’s rights hereunder are assignable to
and exercisable by a bona fide pledge of the Registrable Securities in
connection with an Investor’s margin or brokerage accounts.

             11.8      Use of Pronouns.  All pronouns refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

             11.9      Headings.  The headings of this Agreement are for convenience of reference
only, are not part of this Agreement and do not affect its interpretation.

             11.10    Counterparts.  This Agreement may be executed in two or
more counterparts, each of which is deemed an original but all of which
constitute one and the same agreement. 
This Agreement, once executed by a party, may be delivered to the other
party hereto by facsimile transmission, and facsimile signatures are binding on
the parties hereto.

             11.11    Further Assurances.  Each party will do and perform, or cause to
be done and performed, all such further acts and things, and will execute and
deliver all other agreements, certificates, instruments and documents, as
another party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

             11.12    Consents.  All consents and other determinations to be made by Investor
pursuant to this Agreement will be made by Investor.

             11.13    No Strict Construction.  The language used in this Agreement is
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

             11.14    Arbitration.  Any dispute arising out of or relating to
this Agreement, including the formation, interpretation or alleged breach
hereof, shall be settled in accordance with Exhibit E to the Investment
Agreement.  The results of such
arbitration proceedings shall be binding upon the parties hereto, and judgment
may be entered upon the arbitration award in any court having jurisdiction
thereof.  Notwithstanding the foregoing,
either party may seek interim injunctive relief from any court of competent
jurisdiction.

 

             IN
WITNESS WHEREOF, Investor and the Company have caused this Registration Rights
Agreement to be duly executed as of the date first above written.

	 	AVI BIOPHARMA, INC.
	 	 
	 	 
	 	By:	/s/
  Denis Burger
	 	 	

	 	Its:	          CEO
	 	 	

	 	 
	 	 
	 	MEDTRONIC ASSET MANAGEMENT, INC.
	 	 
	 	 
	 	By:	/s/ Michael D. Ellwein
	 	 	

	 	Its:	                VP

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