LICENSEAND DEVELOPMENT AGREEMENT 1

             “Agreement” means this Agreement and all Exhibits and Schedules hereto.

             “*     *     * Agreement” means the *     *     * Agreement dated *     *     * by and between AVI and *     *     *, as amended from time to time.

             “Compound” means (a) any “drug” as defined in the Federal Food, Drug and Cosmetic Act, as amended, not licensed hereunder and all derivatives and analogues of such drug, (b) any “biological product” as defined in the Public Health Service Act, as amended, not licensed hereunder and all derivatives and analogues of such biological product and (c) the antisense compounds not licensed hereunder.

             “Compound Option Period” means the period commencing on the First Closing Date (as defined in the Investment Agreement) and continuing until termination of this Agreement.

             “Drug” means formulation or formulations of antisense compounds (including the *     *     * substance known as *     *     *) that target the genes listed on Exhibit B attached hereto, all derivatives and analogues thereof, and all modifications and improvements thereto.

             “Exclusivity Termination Date” means, with respect to a Compound, the date which is *     *     *.

             *      *      *

             “Expiration” or “Expired” means, with respect to a particular patent, the patent’s expiration, abandonment, cancellation, disclaimer, award to another party other than AVI in an interference proceeding, or declaration of invalidity or unenforceability by a court or other authority of competent jurisdiction (including final rejection in a re-examination or re-issue proceeding).

             “FDA” means the U.S. Food and Drug Administration.

             “FDA Approval” means the receipt by Medtronic of all approvals by the FDA necessary or required for the commercialization in the United States of a Royalty Product.

             “Field” means the treatment of vascular disease *     *     *.

             “First Commercial US Sale” means the first commercial sale of a Royalty Product in the United States pursuant to Medtronic’s customary commercial release executive approval procedures and guidelines.  Commercial sales do not include sales for use in clinical trials or other testing purposes.

             “Intellectual Property” means U.S. and foreign patents and patent applications, trademarks, service marks and registrations thereof and applications therefor, copyrights and copyright registrations and applications, mask works and registrations thereof, know-how, trade secrets, inventions, discoveries, ideas, technology, data, information, processes, drawings, designs, licenses, computer programs and software, and technical information including but not limited to information embodied in material specifications, processing instructions, equipment specifications, product specifications, confidential data, electronic files, research notebooks, invention disclosures, research and development reports and the like related thereto, and all amendments, modifications, and improvements to any of the foregoing.

             “Invention” means any invention, discovery, know-how, trade secret, data, information, technology, process or concept, whether or not patented or patentable, and whether or not memorialized in writing.

             “Investment Agreement” means the Investment Agreement dated May 22, 2001 by and between AVI and Medtronic Asset Management, Inc.

             “Joint Inventions” is defined in Section 6.3.

             “Know-How” means all know-how, trade secrets, expertise, Inventions, discoveries and technical information now or hereafter owned by, licensed to, possessed by, or under the control of, AVI which are necessary, appropriate or useful for designing, developing, processing, manufacturing, using, selling or delivering the Drug within the Field, including but not limited to information embodied in drawings, designs, copyrights, copyright registrations and applications, trademarks, service marks and registrations thereof and applications therefor, patent applications, material specifications, processing instructions, formulas, equipment specifications, product specifications, confidential data, computer software, electronic files, research notebooks, invention disclosures, research and development reports and the like related thereto, and all amendments, modifications, upgrades and improvements to any of the foregoing, occurring before or during the term of this Agreement.

             “Liens” means liens, mortgages, charges, security interests, claims, voting trusts, pledges, encumbrances, options, assessments, restrictions, licenses, sublicenses, or third party or spousal interests of any nature.

             “Net Sales” of Royalty Products with respect to a particular period means *     *     *.

             “Patents” means (a) the patents and patent applications, together with any patents that may issue based thereon, set forth on Exhibit A; (b) any other patents or patent applications now or hereafter owned by or licensed to AVI that are necessary, appropriate or useful for designing, developing, processing, manufacturing, using, selling or delivering the Drug within the Field; (c) all continuation, divisional, re-issue, re-examination and substitution applications that may be filed, before or during the term of this Agreement, by or for the benefit of AVI based on the foregoing referenced patents or patent application, together with any patents that may issue based thereon; and (d) all foreign applications that may be filed, before or during the term of this Agreement, by or for the benefit of AVI based on the foregoing referenced patents and patent applications, together with all patents which may issue based thereon.

             “*     *     * License” means the *     *     * Agreement-*     *     * by and between *     *     * and AVI *     *     *, dated *     *     * as amended from time to time, covering certain patents involving *     *     *.

             “Restenosis” means *     *     *.

             “Restenosis Rate” shall mean the rate at which Restenosis occurs in the clinical trial.

             “Royalty Product” means the Drug *     *     *.  No more than one (1) payment calculated in accordance with Section 3.3 shall be paid on any single product covered by the Patents even though such product, including its manufacture, sale or use may be covered by Valid Claims of more than one patent included in the Patents.

             “Technology” means the Patents and the Know-How.

             “Third Closing Milestone” shall have the meaning set forth in the Investment Agreement.

             “Unexpired” shall mean a patent that has not Expired.

             “Valid Claim” means a claim in an Unexpired patent included with the Patents which has not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and which has not been admitted to be invalid or unenforceable through reissue or disclaimer.

             1.2        Definitional Provisions.

                           (a)         The words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provisions of this Agreement.

                           (b)        Terms defined in the singular shall have a comparable meaning when used in the plural, and vice-versa.

                           (c)         References to an “Exhibit” or to a “Schedule” are, unless otherwise specified, to one of the Exhibits or Schedules attached to or referenced in this Agreement, and references to an “Article” or a “Section” are, unless otherwise specified, to one of the Articles or Sections of this Agreement.

                           (d)        The term “person” includes any individual, partnership, joint venture, corporation, trust, unincorporated organization or government or any department or agency thereof.

ARTICLE 2
LICENSE TO MEDTRONIC

             2.1        Grant of License.  Subject to the terms and conditions of this Agreement, AVI hereby grants to Medtronic an irrevocable, worldwide, sublicensable, exclusive license to the Technology to make, have made, use, import, export, distribute, sell, offer to sell and have sold the Drug in the Field and to make, have made, use, import, export, distribute, sell, offer to sell and have sold products incorporating or utilizing the Drug and/or the Technology in the Field, practice methods covered thereby, and otherwise to commercialize and exploit, the Drug and/or the Technology in the Field.

             2.2        Technology Transfer.  AVI shall, upon Medtronic’s reasonable request from time to time, provide to Medtronic at no charge available drawings, specifications, processes, materials, and any manufacturing procedures and such other documentation and Know-How as is reasonably necessary or useful to enable Medtronic to fully utilize the license granted to Medtronic under this Agreement.  In addition, AVI will make available personnel as requested by Medtronic, to provide such individual training to Medtronic technical and manufacturing personnel as is necessary to enable Medtronic to fully utilize the license granted to Medtronic under this Agreement, at such reasonable times and places as Medtronic may request from time to time, including, without limitation, to complete any development of the Technology in the Field, and to assist in the transfer of any manufacturing and regulatory submissions (including raw and compiled clinical data), certificates or other documents or approvals.

ARTICLE 3
FEES, ROYALTIES AND REPORTS

             3.1        Fee Based on First Commercial US Sale.

                           (a)         Medtronic shall pay to AVI an up-front one-time licensing fee of *     *     * within thirty (30) days after the date of the First Commercial US Sale of a Royalty Product, provided that Medtronic has received FDA Approval with respect thereto before *     *     * (or ***, if at any time the regulatory process necessary or required to obtain FDA Approval consists of *     *     * followed by the *     *     *).

                           (b)        The parties acknowledge and agree that if FDA Approval occurs on or after *     *     * (or *     *     *, if applicable), then no fee shall be payable under this Section 3.1. Further, the fee under this Section 3.1 shall be payable only with respect to the first system incorporating any Royalty Product, and no additional fees shall be payable under this Section 3.1 for the first commercial sale in the U.S. or outside the U.S. of other systems incorporating Royalty Products.

             3.2        Fee Based on Clinical Study Restenosis Rate.

                           (a)         If the Restenosis Rate in the clinical trial conducted by Medtronic in the U.S., the European Union or Japan in order to obtain regulatory approval for the commercial sale of the Royalty Product in the United States is equal to or less than *** percent (* * *%), then Medtronic will pay AVI an up-front one-time licensing fee of *     *     * within sixty (60) days after the completion of such study, provided, however, that such payment of such licensing fee shall not occur unless and until Medtronic has received FDA Approval for the Royalty Product to which such study pertained.

                           (b)        The parties acknowledge and agree that if the Restenosis Rate exceeds *** percent (***%), then no fee shall be payable under this Section 3.2.

             3.3        Earned  Royalty.

                           (a)         Subject to the terms of this Agreement, Medtronic shall pay to AVI a royalty equal to *** percent (***%) of Medtronic’s Net Sales of Royalty Products.

                           (b)        If Medtronic determines that, in order to make the Drug functional, fully utilize the license granted hereunder or to commercialize a product incorporating or utilizing the Drug or the Technology, it is required to make a payment to one or more third parties because of the rights of any such third party, then the royalties due under Section 3.3(a) to AVI shall be reduced by *** percent (***%) of any payments due to such third parties, provided, however, the application of the foregoing shall not reduce the amount due to AVI under Section 3.3(a) to less than *** percent (***%).

                           (c)         Provided that AVI has complied with its obligations set forth in Section 5.4, the royalty payable pursuant to Section 3.3(a) shall be increased by *     *     * that AVI is required to make pursuant to *     *     * for sales by Medtronic.  Such increase is not subject to reduction under Section 3.3(b) (including as Section 3.3(b) may be modified pursuant to Section 4.2).

                           (d)        After the date hereof, if the parties agree that AVI needs to obtain rights to a third party patent that it does not have rights to on the date hereof to commercialize the Drug within the Field, then the parties shall agree on the allocation between the parties of the cost of obtaining such rights (including any royalties that may be payable).

             3.4        Reports and Payments.  Within sixty (60) days after the end of each calendar quarter, Medtronic shall provide AVI with a written report indicating the amount of Net Sales of Royalty Products during such preceding period and the amount of the royalties due for such period.  Simultaneous with making such report, Medtronic shall pay to AVI the amount of royalties then due.  Notwithstanding the foregoing, if AVI is obligated to make any royalty payments to third parties with respect to sales by Medtronic hereunder within 45 days or less of the end of each calendar quarter, then such written report and the payment of royalties by Medtronic shall be due within 45 days after the end of each calendar quarter.  With respect to sales of Royalty Products outside the United States on which any earned royalties are payable hereunder, conversions to U.S. dollars, if applicable, shall be made in accordance with Medtronic’s standard accounting policy for conversion of foreign currencies.  Notwithstanding anything to the contrary contained in this Agreement, Medtronic shall be entitled to withhold, from earned royalties payable hereunder, all taxes thereon required, by competent governmental authorities, to be withheld.

             3.5        Records.  Medtronic agrees to keep accurate written records sufficient in detail to enable the royalties payable under this Agreement by Medtronic to be determined and verified for a period of *     *     * after the delivery of any royalty report (or such longer period of time as may be necessary for AVI to comply with its reporting requirements under *     *     *).

             3.6        Audit of Records.  Upon reasonable notice and during regular business hours, Medtronic shall from time to time, but no more frequently than once annually (or as often as may be necessary for AVI to comply with requirements set forth in *     *     *), make available the records referred to in Section 3.5 for audit at AVI’s expense by independent representatives selected by AVI and reasonably acceptable to Medtronic to verify the accuracy of the reports provided to AVI.  Such representatives shall execute a suitable confidentiality agreement reasonably acceptable to Medtronic prior to conducting such audit.  Such representatives may disclose to AVI only their conclusions regarding the accuracy of royalty payments and of records related thereto, and shall not disclose Medtronic’s information to AVI without the prior written consent of Medtronic.  No claim may be asserted by AVI against Medtronic for any errors unless made within *     *     * following completion of such examination or audit made pursuant to this Section 3.6.  The right to audit shall extend for *     *     * (or such longer period of time as may be necessary for AVI to comply with its reporting requirements under *     *     *) from delivery of any royalty report and thereafter any royalty report shall be deemed complete and accurate.  Each royalty report shall be subject to only one such examination and audit.  The party benefiting from any discrepancy will promptly pay the amount of such discrepancy to the other.  If a discrepancy is found that is greater than *     *     * in any calendar quarter and AVI is the party benefited, Medtronic shall reimburse AVI for all reasonable audit costs incurred for the related audit and Medtronic shall pay for the next succeeding annual audit.

ARTICLE 4
DEVELOPMENT PROJECT

             4.1        Development Efforts.

                           (a)         During the Term of this Agreement, Medtronic will control *     *     * any regulatory and clinical programs for the Drug in the Field as Medtronic deems appropriate (including the clinical trials set forth in Section 3.2) and obtain in *     *     * name any necessary device or medical regulatory approvals from the FDA, and any applicable regulatory agencies of such other countries as Medtronic deems appropriate, prerequisite to the commercial sale of products for their intended uses.  AVI will, at its expense, supply Medtronic with all available documents, instruments, information and reports reasonably necessary or convenient as requested by Medtronic in connection with such regulatory approval efforts and in connection with pre-clinical efforts.  During the Term of this Agreement, AVI will, at *     *     * expense, assist and cooperate with the development of the Drug in the Field, including, without limitation, supplying the Drug to Medtronic and advising and participating in product scientific research and development proceedings and all governmental actions, including filings, proceedings and meetings, as requested by Medtronic. AVI will also assist and cooperate, at *     *     * expense, with Medtronic in Medtronic’s development of coating technology and processes necessary or convenient for the use of the Drug in the Field.  In connection with the foregoing and at Medtronic’s reasonable request, AVI shall make available senior AVI personnel responsible for and knowledgeable about the Drug and the Technology.  AVI grants to Medtronic the right of reference to AVI’s regulatory files with the FDA or other appropriate government agencies as necessary or helpful for support of Medtronic’s regulatory submissions with respect to the Drug in the Field.  AVI hereby acknowledges and agrees that Medtronic shall be entitled to exercise its discretion, taking into account its goals, objectives and priorities, in determining the amount of resources that it will utilize hereunder.  All regulatory approvals funded by *     *     *, and all related studies, documents, instruments, information and reports, will be in *     *     * name and owned by *     *     *.  Medtronic grants to AVI the right of reference to Medtronic’s regulatory files relating to the Drug with the FDA or other appropriate governmental agencies as necessary for support of AVI’s current or future regulatory submissions outside the Field; provided that AVI shall not be entitled to utilize such right in connection with any commercialization efforts involving a medical device company.  AVI shall provide prior written notice to Medtronic of any exercise of such right of reference specifying the time of such exercise, the type of filing, the regulatory files to be referenced and such other circumstances as may be appropriate for Medtronic to determine AVI’s compliance with the exercise of such right.  AVI’s sole remedy for any breach of Medtronic’s obligations under this Section 4.1 shall be as set forth in Section 4.2 or Section 9.2.

                           (b)        AVI shall supply to Medtronic *     *     * such quantities of the Drug as is reasonably required by Medtronic in connection with pre-clinical and clinical trials and in connection with obtaining regulatory approvals.  AVI represents and warrants to Medtronic that all Drugs supplied to Medtronic hereunder will have been manufactured, labeled and packaged in accordance with all applicable laws and regulations, including (as applicable) FDA GMP requirements and all other applicable manufacturing requirements.  Medtronic agrees to provide AVI rolling *     *     * forecasts of Medtronic’s requirements for the Drug under this Section 4.1(b), specifying quantities and shipping dates and Medtronic shall update such forecasts at least every *     *     *.  Such rolling forecasts by Medtronic shall be used for purposes of facilitating Medtronic’s pre-clinical and clinical plans and meeting the lead times required by AVI, but they are not legally binding on Medtronic.

             4.2        *     *     * Conversion.  In the event that the Third Closing Milestone has not occurred on or before *     *     *, Medtronic Asset Management, Inc. (“MAMI”) may indicate in writing (a “Waiver Notice”) within seven days thereafter that it is prepared to make the investment specified in Section 2.3 of the Investment Agreement in accordance with the terms of the Investment Agreement as if the Third Closing Milestone had occurred on *     *     * subject to the satisfaction of any conditions to Medtronic’s requirement to make such investment (other than the occurrence of the Third Closing Milestone). If (i) AVI provides written notice of its rejection of such offer contained in the Waiver Notice within seven calendar days after AVI’s receipt of such Waiver Notice or (ii) MAMI does not provide a Waiver Notice within seven days after *      *      *, and, in either of the cases set forth in clause (i) and clause (ii), AVI is not otherwise in material breach of any agreement with Medtronic or an Affiliate of Medtronic, then AVI shall have the right to convert the license granted to Medtronic under Section 2.1 *     *     *.  Notwithstanding the foregoing, if at any time the regulatory process necessary or required to obtain FDA Approval consists of *     *     * followed by or preceded by *     *     *, then AVI shall not have the foregoing right and MAMI shall not be required to give the Waiver Notice until *     *     *.  In order to exercise suchright, AVI must provide Medtronic with written notice of such conversion within *      *     *, as the case may be. Upon the exercise of such option by AVI, the royalty rate in Section 3.3(a) hereof shall be *     *     * percent (***%) and provided that AVI has royalty rights with respect to sales of Royalty Products hereunder that in the aggregate exceed its royalty obligations with respect to sales of Royalty Products hereunder, the minimum royalty in Section 3.3(b) shall be *     *     * percent (***%).

             4.3        Delays.  If: (a) any of Medtronic’s activities under Section 4.1 are delayed by an event of Force Majeure (as defined in Section 10.13) or (b) AVI is in material breach of any agreement with Medtronic or an Affiliate of Medtronic, then the applicable *     *     * date of the Third Milestone under Section 4.2 and the applicable *     *     * date of the Third Milestone under Section 9.2 shall be extended by a period of time equal to the period of time of the delay caused by the Force Majeure event under Section 4.3(a) above plus the period of time during which AVI is in such breach of such agreements under Section 4.3(b) above.

             4.4        Medtronic’s Compound Option.

                           (a)         Option.  During the Compound Option Period, AVI shall give written notice of its (or its Affiliates’) intention to, directly or indirectly, commercialize any Compound that is or may be suitable for use in the Field.   Medtronic shall have the right, exercisable at Medtronic’s option, to acquire a license, on the terms set forth in Section 4.4(c) below, and to enter into a supply agreement with AVI in accordance with Section 4.4(d) below, with respect to such Compound.  AVI shall provide such notice with respect to each such Compound that AVI or its Affiliates intends, directly or indirectly, to commercialize.  Medtronic shall have the right during the period ending on the Exclusivity Termination Date with respect to such Compound, to exercise such right by giving written notice thereof to AVI.  Within *     *     * after written notice of such exercise by Medtronic, AVI agrees to enter into the Additional License Agreement and Additional Supply Agreement with Medtronic with respect to such Compound.  Such *     *     * period shall survive the termination of this Agreement.  Upon execution and delivery of the Additional License Agreement and Additional Supply Agreement with respect to such Compound, Medtronic shall pay an up-front license fee of *     *     *.

             (b)        Exclusivity.  Until the Exclusivity Termination Date, AVI shall not directly or indirectly market or sell, or directly or indirectly encourage or solicit the submission of, or entertain inquiries, proposals or offers from any person or entity (other than Medtronic or its Affiliates), or otherwise provide information to or engage in discussions with any other person or entity, in any way relating to the sale, licensing, distribution or other disposition of any Compound for use or application in the Field or any Intellectual Property relating to the Compound for use or application in the Field.

                           (c)         Additional License Agreement Terms.  Unless otherwise mutually agreed in writing by Medtronic and AVI, each license agreement for a Compound (the “Additional License Agreement”) shall provide for:

                           (d)        Additional Supply Agreement. Unless otherwise mutually agreed by Medtronic and AVI, each supply agreement for a Compound (the “Additional Supply Agreement”) shall provide for:

                           (e)         Right of First Refusal.  If Medtronic does not exercise its rights under Section 4.4(a) with respect to a Compound during the Compound Option Period, then AVI shall be free to negotiate with third parties with respect to the sale, licensing, distribution or other disposition of the Compound within the Field or any Intellectual Property related to the Compound within the Field, subject to the following rights of Medtronic.  If AVI reaches agreement in principle with, or receives a good faith, bona fide offer acceptable to AVI from any third party regarding such sale, licensing, distribution or other disposition, then AVI shall promptly give written notice to Medtronic, which notice shall (i) specify the pricing, terms, conditions and all material provisions with respect to the proposed transaction, (ii) identify the proposed party or parties to such transaction, and (iii) include a copy of any written agreement in principle, letter of intent or other communication setting forth the terms of the proposed transaction between AVI and the proposed third party or parties.  Medtronic shall have the irrevocable right and option, exercisable in writing to AVI any time within *     *     * after Medtronic’s receipt of such notice, to elect to enter into such proposed transaction upon the same pricing (or the monetary equivalent of any nonmonetary consideration), terms, conditions and other material provisions as set forth in such notice.  Such *     *     * period shall survive the termination of this Agreement.  If Medtronic so elects to exercise its first refusal option, AVI shall use its reasonable best efforts to permit consummation of such proposed transaction with Medtronic within *     *     * following exercise.  If Medtronic fails to exercise its first refusal option to enter into such proposed transaction, AVI and the proposed party identified in such notice may complete such transaction with the third party upon the pricing, terms, conditions and material provisions specified in such notice and contained in the proposed definitive agreement included with such notice; provided that, if (x) AVI and such third party fail to complete such transaction within *     *     * after the expiration of Medtronic’s *     *     * option, or (y) if any of the pricing, terms, conditions or other material provisions specified in such notice and contained in the proposed definitive agreement are modified so as to be less favorable to AVI, or (z) if the identity of such third party changes, then, in any such event, AVI shall give a new notice to Medtronic, and Medtronic shall have a new first refusal option, with respect to such delayed or modified proposed transaction, in accordance with the foregoing procedure.

                           (f)         Exception to Right of First Refusal.  Notwithstanding Section 4.4(e) and for a period of *     *     * commencing on the Exclusivity Termination Date for a particular Compound, AVI shall have the right to enter into a transaction with a third party involving the sale, licensing or other disposition of such Compound within the Field if the pricing, terms, conditions and all material provisions of such transaction are equal to or more favorable to AVI than those pricing, terms, conditions and material provisions specified in Section 4.4(a), Section 4.4(c) and Section 4.4(d).  On the date that is *     *     * after the Exclusivity Termination Date for a particular Compound, Medtronic’s right of first refusal set forth in Section 4.4(e) for such Compound shall be available and in full force and effect with respect to such Compound.

ARTICLE 5
AVI’S OBLIGATIONS

             5.1        Maintain Licenses in Force.  AVI shall comply with all of the provisions of, and shall maintain in full force and effect, all license agreements with third parties, including, specifically the *     *     * License, pursuant to which AVI is licensee of Intellectual Property included in the Technology.  AVI shall promptly notify Medtronic if any such third party alleges any breach, default, or event that, with the passage of time or giving of notice could become a default, by AVI of any such license agreement.  Medtronic shall be entitled, but not obligated, to cure any alleged breach or default by AVI of such license agreement and set-off the cost of such cure against amounts otherwise owed to AVI hereunder.

             5.2        Medtronic Exclusivity.   AVI will not, without the prior written consent of Medtronic, supply, sell, transfer or otherwise dispose of the Drug or any products or components utilizing the Drug or the Technology or any Joint Invention to any third party if AVI should have known after making reasonable inquiry or has actual knowledge (including the actual knowledge of any of AVI’s executive officers) that such third party intends or is likely to use, sell, supply, transfer or otherwise dispose of the Drug or any such products, components, Technology or any Joint Inventions  in the Field.  Prior to any sale, supply, transfer or other disposition to any third party of the Drug or any products or components utilizing the Drug or any such products, components, Technology or any Joint Invention, AVI shall obtain the agreement of such third party that it will not use, sell, supply, transfer or otherwise dispose of the Drug or any such products, components, Technology or any Joint Inventions in the Field.  AVI shall obtain the agreement of such third party that Medtronic will be an express third party beneficiary of such agreement.  The restrictions set forth in this Section 5.2 shall not apply to transfers of the Drug to consultants or agents of AVI who are performing research or consulting services on behalf of AVI in connection with such transfer.

             5.3        No Amendments to *     *     * License.  AVI agrees not to modify, waive or amend any provision of the *     *     * License without the prior written consent of Medtronic.

             5.4        No Amendments With Adverse Effects to Medtronic.  AVI agrees not to modify, waive or amend any provision of any agreement in effect as of the date hereof that would adversely affect Medtronic’s obligations under Section 3.3(c) without the prior written consent of Medtronic, including any modification, waiver or amendment to any agreement in effect as of the date hereof that could have the effect of increasing the amount payable to the licensor under *     *     * as a result of a reduction of (a) the *     *     * relating to sales of Combined Products or (b) the *     *     * relating to patents belonging to third parties that, in either case, is in effect as of the date hereof.

             5.5        *     *     * Agreement.

                           (a)  AVI shall not approve the Drug as *     *     * under the *     *     * Agreement and shall not otherwise subject the Drug to any of the terms thereof without obtaining the prior written agreement (in form and substance reasonably satisfactory to Medtronic) of *     *     * that the Drug is subject to Medtronic’s rights in the Field hereunder, including but not limited to Medtronic’s rights under Section 2.1.  AVI shall obtain the written agreement of *     *     * that Medtronic will be an express third party beneficiary of such agreement.

                           (b)  AVI shall not approve any Compound as *     *     * under the *     *     * Agreement and shall not otherwise subject any Compound to any of the terms thereof without obtaining the prior written agreement (in form and substance reasonably satisfactory to Medtronic) of *     *     * that the Compound is subject to Medtronic’s rights in the Field under Section 4.4.  AVI shall obtain the written agreement of *     *     * that Medtronic will be an express third party beneficiary of such agreement.

ARTICLE 6
INTELLECTUAL PROPERTY

             6.1        Protect Know-How.  AVI and Medtronic agree to maintain the confidentiality of all Confidential Information (as such term is defined in the Investment Agreement), including but not limited to the status of any patent applications included in the Patents.  Each party agrees not to disclose or use (except as permitted or required for performance by the party receiving such Confidential Information of its rights or duties hereunder) any Confidential Information of the other party obtained during the term of this Agreement.  Each party further agrees to take appropriate measures to prevent any such prohibited disclosure by its present and future employees, officers, agents, subsidiaries, or consultants during the term of this Agreement and shall be liable for any breach of this Article 6 by and such person.

             6.2        Protection of Technology.  During the term of this Agreement, AVI shall promptly inform Medtronic of any Invention, improvement, amendment, upgrading or modification relating to the Drug or the Technology which may be applicable or useful in the Field.  AVI agrees to protect the Technology by obtaining and maintaining appropriate patent rights as recommended by reputable patent counsel; provided, however, that Medtronic shall have the right to review and approve any filings or other correspondence with the appropriate patenting authority relating to the Technology or the Drug in the Field. Medtronic shall not unreasonably withhold such approval. If Medtronic determines, in its sole discretion, that any Technology conceived, reduced to practice or otherwise made, developed or acquired by one or more employees or agents of AVI is not being adequately protected by patents, Medtronic may so inform AVI.  If Medtronic decides that AVI’s response has been inadequate, Medtronic may take whatever action it deems necessary at its expense to protect such Technology.  All patents and copyright registrations shall be applied for in the names of the actual inventors or authors and shall be assigned to AVI, subject to Medtronic’s rights and license therein; each party shall execute and deliver such forms of assignment, power of attorney and other documents which are necessary to give effect to the provisions hereof.

             6.3        Ownership of Intellectual Property.  Subject to the rights and licenses granted to Medtronic by this Agreement, (a) any Intellectual Property conceived, reduced to practice or otherwise made, developed or acquired by one or more employees or agents of AVI shall be the property of AVI, (b) any Intellectual Property conceived, reduced to practice or otherwise made, developed or acquired by one or more employees or agents of Medtronic shall be the property of Medtronic, and (c) AVI and Medtronic shall each have an undivided one-half interest in any Intellectual Property jointly conceived, reduced to practice or otherwise made, developed or acquired by one or more employees or agents of AVI and one or more employees or agents of Medtronic (“Joint Inventions”).  For purposes of this Section, Intellectual Property which is the subject of a patent application shall be deemed to have been developed jointly by employees or agents of Medtronic and AVI, and thus be a Joint Invention, if at least one employee or agent of each of Medtronic and AVI is required to be named as an inventor in such application in order for such patent to be valid.

             6.4        Prosecution of Patents on Joint Inventions.  If either AVI or Medtronic proposes to file an application for any U.S or foreign patents, copyright registration, or any continuation or modification thereof, with respect to any Joint Invention, then such party proposing such registration (“the first party”) shall notify the other party (“the second party”) in writing and the second party shall have option of joining in such action.  If the second party elects to join in such action, the second party shall pay one-half of the total expenses incurred by Medtronic and AVI therein and be entitled to participate in all material steps in such action.  If the second party elects not to join in such action, the first party shall be entitled to control such action, but such failure to participate shall not affect the second party’s ownership interest in the Joint Inventions or in any Intellectual Property rights therein.  Whether or not the second party elects to join in such action, the second party shall, upon the request of the first party, cooperate with and assist the first party in such action to the extent required by statute, regulation or government agency, including without limitation, executing and delivering all documents in connection therewith and using its reasonable efforts to obtain such executions from all appropriate employees and agents of the second party at the second party’s cost.  Each party will treat Joint Inventions as Confidential Information.

                           (a)         Each of Medtronic and AVI shall promptly notify the other if it knows or has reason to believe that any of the rights to the Technology in the Field are being infringed or misappropriated by a third party or that such infringement or misappropriation is threatened.  The parties shall consult with each other as promptly as reasonably practicable to review actions to be taken in connection with such alleged infringement or misappropriation.  Medtronic shall have the right to institute and control the prosecution of any alleged infringement or misappropriation of the Technology in the Field.

                           (b)        Medtronic shall be solely responsible for payment of all costs and expenses it incurs in the prosecution and/or a negotiation of a settlement.  Medtronic shall have the right to act in the name of, or on behalf of AVI, and join AVI as a party plaintiff to any such proceeding if Medtronic believes it is necessary or advisable to successfully prosecute such infringement or misappropriation.  AVI shall cooperate in connection with the initiation and prosecution by Medtronic of such suit or action.  The proceeds from any judgment, decision or settlement shall first be used to reimburse Medtronic for all costs and expenses it incurred relating to prosecution and settlement of any action; second, be allocated on a *     *     * basis between Medtronic and AVI until *     *     *; and finally, the remainder of any proceeds shall accrue to *     *     *.

                           (c)         If Medtronic fails to initiate the prosecution of any alleged infringement or misappropriation of the Technology in the Field within six (6) months of receiving written notice from AVI of any commercially significant infringement or misappropriation, AVI shall have the right to institute and control the prosecution of any such alleged infringement or misappropriation.  AVI shall be solely responsible for the payment of all costs and expenses it incurs in the prosecution and/or a negotiation of a settlement.  AVI shall have the right to act in the name of, or on behalf of Medtronic, and join Medtronic as a party plaintiff to any such proceeding if AVI believes it is necessary or advisable to successfully prosecute such infringement or misappropriation.  Medtronic shall cooperate in connection with the initiation and prosecution by AVI of such suit or action.  The proceeds from any judgment, decision or settlement shall first be used to reimburse AVI for all costs and expenses it incurred relating to prosecution and settlement of any action; second, be allocated on a *     *     * basis between Medtronic and AVI until *     *     * and finally, the remainder of any proceeds shall accrue to *     *     *.

ARTICLE 7
REPRESENTATIONS AND WARRANTIES

             7.1        Representations of AVI.  AVI represents, warrants and covenants to Medtronic that:

             (a)         AVI is a corporation duly organized, validly existing, and in good standing under the laws of the State of Oregon and has full corporate power to conduct the business in which it is presently engaged and to enter into and perform its obligations under this Agreement.