SUPERIOR COURT FOR THE STATE OF CALIFORNIA FOR THE COUNTY OF ALAMEDA THE PENNSYLVANIA AVENUE FUNDS, individually and on behalf of all others similarly situated, Case No. RG09470224 Plaintiff, STIPULATION OF SETTLEMENT v.

SUPERIOR COURT FOR THE STATE OF CALIFORNIA

FOR THE COUNTY OF ALAMEDA

STIPULATION OF SETTLEMENT

This Stipulation of Settlement dated as of March 10, 2010 (the

Stipulation ), is made and entered into by and among the following Settling Parties (as defined further in Section I herein) to the above-entitled litigation: (i) Plaintiff The Pennsylvania Avenue Funds (on behalf of itself and each

of the Class Members), by and through its counsel of record in the litigation; and (ii) Defendants Zola Horovitz, John K.A. Prendergast, Kenneth Chahine, Richard Wallace, Jan K. hrstr m, Stephen G. Dilly, Avigen, Inc. and MediciNova,

Inc., by and through their respective counsel of record in the litigation. The Stipulation is intended by the Settling Parties to fully, finally and forever resolve, discharge and settle the Settled Claims (as defined below), upon and subject to the

terms and conditions hereof.

As used in the Stipulation, the following terms have the meanings specified below:

A. Action means the action entitled The Pennsylvania Avenue Funds v. Avigen, Inc., et al., Case No. RG09470224,

pending in the Superior Court of California for Alameda County.

B. Avigen means Avigen, Inc.

C. Class means all persons or entities who held Avigen, Inc. stock, either of record or beneficially, at any time

from August 20, 2009 through and including December 18, 2009, the Closing Date as defined in the Merger Agreement, including their respective successors-in-interest, predecessors, representatives, trustees, executors, administrators,

heirs, assigns or transferees, immediate and remote and any person or entity acting for or on behalf of, or claiming under any of them, and each of them. Excluded from the Class are Defendants, Defendants Affiliates, members of the immediate

family of any Individual Defendant, any entity in which a Defendant has or had a controlling interest, directors and officers of Avigen, and their legal representatives, heirs, successors, or assigns of any such excluded person or entity.

Class Member or Member of the Class means a person who falls within the definition of the Class as set forth in this Stipulation.

D. Defendants means Zola Horovitz, John K.A. Prendergast, Kenneth Chahine, Richard Wallace, Jan K. hrstr m,

Stephen G. Dilly (collectively the Individual Defendants ), Avigen, and MediciNova.

STIPULATION OF SETTLEMENT

E. Defendants Affiliates means each of Defendants and/or their respective

past and present affiliates, parent entities, associates, subsidiaries or general partners, limited partnership partners and partnerships, and each and all of their respective past, present or future officers, directors, stockholders, agents,

representatives, employees, attorneys, financial or investment advisors, persons who provided opinions relating to the Transaction, appraisers, and any other advisors, consultants, accountants, investment bankers, commercial bankers, commercial bank

lenders, trustees, engineers, agents, insurers, co-insurers and reinsurers, heirs, executors, trustees, general or limited partners or partnerships, limited liability companies, members and managers, and each of their respective heirs, executors,

personal or legal representatives, estates, administrators, predecessors, successors and assigns.

Date means the first date by which all of the events and conditions specified in this Stipulation have been met and have occurred.

G. Final means: (i) the date of final affirmance on an appeal of the Judgment, the expiration of the time for a petition

for or a denial of a writ of certiorari to review the Judgment and, if certiorari is granted, the date of final affirmance of the Judgment following review pursuant to that grant; or (ii) the date of final dismissal of any appeal from the

Judgment or the final dismissal of any proceeding on certiorari to review the Judgment; or (iii) if no appeal is filed, the expiration date of the time for the filing or noticing of any appeal from the Judgment.

H. Judgment means the judgment to be rendered by the Court approving the Stipulation.

I. MediciNova means MediciNova, Inc.

J. Merger Agreement means the Agreement and Plan of Merger dated August 20, 2009 between Avigen and MediciNova.

K. Plaintiff means The Pennsylvania Avenue Funds.

L. Plaintiff s Counsel means Finkelstein Thompson LLP, which has offices at 100 Bush St., Suite 1450, San Francisco,

California 94403, and at 1050 30th Street N.W., Washington, D.C. 20007.

M. Released Persons means each and all of

the Defendants and Defendants Affiliates.

STIPULATION OF SETTLEMENT

N. Settled Claims shall collectively mean any and all claims, demands, rights,

actions or causes of action, liabilities, damages, losses, obligations, judgments, suits, fees, expenses, costs, matters and issues of any kind or nature whatsoever, whether legal, equitable or any other type, known or unknown, contingent or

absolute, suspected or unsuspected, disclosed or undisclosed, hidden or concealed, matured or unmatured, that have been, could have been, or in the future can or might be asserted in the Action or in any court, tribunal or proceeding (including, but

not limited to, any claims arising under federal securities laws or under federal, state statutory or common law or any other law, rule, or regulation, including the law of any jurisdiction outside of the United States) by or on behalf of any member

of the Class (whether individual, class, derivative, representative, legal, equitable or any other type or in any other capacity), against the Released Persons whether or not any such Released Persons were named, served with process or appeared in

the Action, which have arisen, could have arisen, arise now or hereafter arise out of, or relate in any manner to the allegations, facts, events, acquisitions, matters, acts, occurrences, decisions, conduct, statements, representations,

misrepresentations, omissions, or any other matter, thing or cause whatsoever, or any series thereof, embraced, involved or set forth in, could have been raised in, or referred to or otherwise related in any way to: (i) the claims or

allegations asserted by Plaintiff in the Action; (ii) the Transaction or the Merger Agreement; (iii) the fiduciary obligations of any Defendants or Released Persons in connection with the Transaction or the Merger Agreement; (iv) the

negotiations in connection with the Transaction, the Merger Agreement or any other agreements, contracts, actions or approvals relating in any way to the Transaction; or (v) the disclosures or disclosure obligations of Defendants or Released

Persons in connection with the Transaction or the Merger Agreement. Notwithstanding the foregoing, nothing in this Stipulation shall be interpreted to affect or release any statutory appraisal rights that may pertain to any Avigen shareholder under

O. Settling Parties means, collectively, each of the Defendants and the Plaintiff on behalf of

itself and the Members of the Class.

P. Transaction means MediciNova s acquisition of Avigen pursuant to the

Merger Agreement. Under the terms of the Merger Agreement, Avigen shareholders received the right to elect

STIPULATION OF SETTLEMENT

$1.24 per share in either cash or secured convertible notes to be issued by MediciNova, and Avigen shareholders received the right to one Contingent Payment Right ( CPR ) under certain

circumstances that entitled them to a pro rata portion of certain assets. Transaction includes all of the related actions, events and transactions contemplated by the Merger Agreement.

Q. Unknown Claims means any claim, cause of action, damage or harm which Plaintiff and/or any Class Member does not know or

suspect to exist at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision not to

object to this settlement.

On August 21, 2009, Avigen and MediciNova issued a joint press release announcing a definitive merger agreement under which

MediciNova s wholly-owned subsidiary would merge with and into Avigen. Under the terms of the Merger Agreement, Avigen shareholders would receive the right to elect either $1.24 per share in either cash or secured convertible notes to be issued

by MediciNova, and Avigen shareholders would be entitled to one Contingent Payment Right ( CPR ) to a pro rata portion of certain Avigen assets.

On August 24, 2009, this class action was filed by Plaintiff The Pennsylvania Avenue Funds on behalf of all holders of Avigen common

stock, naming as Defendants Zola Horovitz, John K.A. Prendergast, Kenneth Chahine, Richard Wallace, Jan K. hrstr m, and Stephen G. Dilly (collectively the Individual Defendants ) in the Superior Court of California for Alameda

County, Case No. RG09470224.

On September 17, 2009, MediciNova filed with the Securities and Exchange Commission (the

SEC ) a Registration Statement on Form S-4 providing Avigen shareholders with information concerning the Proposed Transaction and including a recommendation from the Avigen Board of Directors (the Board ) that Avigen

shareholders vote in favor of the Transaction (the Preliminary Proxy) (together with its later amendments, the Proxy Statement ).

STIPULATION OF SETTLEMENT

Thereafter, Plaintiff filed its First Amended Complaint ( Complaint ) on

October 15, 2009, adding MediciNova as a defendant and seeking declaratory and injunctive relief with respect to the Transaction based on alleged breaches of fiduciary duty by Defendants in connection with the Transaction, which included, among

others, failing to adequately disclose certain material information regarding the Transaction in the Preliminary Proxy.

November 20, 2009, after arms-lengths negotiations, counsel for the parties reached an agreement-in-principle to settle the Action as reflected in a Memorandum of Understanding ( MOU ) executed that day. As part of the settlement,

Defendants agreed to, and have provided, certain supplemental disclosures, in amendments to the Proxy Statement filed by MediciNova with the SEC and distributed to shareholders.

Plaintiff and Plaintiff s Counsel reviewed the supplemental disclosures and determined that the settlement of the Action on the

terms reflected in the MOU (the Settlement ) was fair, reasonable and adequate, and in the best interests of Avigen s shareholders.

Defendants, to avoid costs, disruption and distraction of further litigation, and without admitting, and specifically denying, the

validity of any allegations made in the Action, or any liability with respect thereto, have concluded that it is desirable that the claims against them be settled and dismissed on the terms reflected in this Stipulation.

Following execution of the MOU on November 20, 2009, and pursuant to the terms thereof, Plaintiff s Counsel then conducted

confirmatory discovery to confirm the fairness of the Transaction to Avigen s shareholders. This confirmatory discovery included a review of board minutes and other supplemental documents previously produced by the Individual Defendants, as

well as a deposition of Mr. Kenneth Chahine, a director of Avigen since March 2004 and President and Chief Executive Officer from March 2004 through March 2009.

The Settlement, as set forth herein, reflects the results of the Settling Parties negotiations and the terms of the MOU. Moreover,

following the completion of the agreed-upon confirmatory discovery, Plaintiff has concluded and confirmed that the agreed upon supplemental disclosures were accurate and provided Avigen s shareholders with information sufficient to cast an

informed vote on the Transaction.

STIPULATION OF SETTLEMENT

An agreement-in-principle was only reached after arm s length negotiations between the

Settling Parties who were represented by counsel with substantial experience in shareholder class action litigation.

PLAINTIFF S CLAIMS AND BENEFITS OF SETTLEMENT

Plaintiff in the Action, through its Counsel, represents that, it has

conducted an extensive investigation of the Defendants actions in connection with the Complaint and the Transaction, which included: (i) reviewing extensive publicly available information regarding Avigen, MediciNova and the Transaction,

including all relevant SEC filings concerning the Transaction; (ii) obtaining and reviewing hundreds of pages of documents produced by Defendants in discovery; (iii) reviewing and evaluating the financial terms of the Transaction, the

financial analyses provided to Avigen by its financial advisors in connection with the Transaction, and the public disclosures in the Proxy Statement made in connection thereto; and (iv) deposing the individual at Avigen knowledgeable about the

terms, negotiation and/or approval of the Transaction.

The litigation was an important causal factor prompting the

dissemination of the additional disclosures. Plaintiff and Plaintiff s Counsel have determined that the supplemental disclosures form a fair, reasonable and adequate basis for settling the Action. Plaintiff and Plaintiff s Counsel have

also concluded that the supplemental disclosures conferred a substantial benefit on the Class by enabling Avigen s shareholders to make an informed decision regarding the Transaction.

Plaintiff s Counsel recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Action

against the Defendants through trial and through appeals. Plaintiff s Counsel also has taken into account the uncertain outcome and the risk of any litigation, especially in a complex action such as this, as well as the difficulties and delays

inherent in such litigation. Plaintiff s Counsel also are mindful of the inherent problems of proof and possible defenses to the claims asserted in the Action. Plaintiff s Counsel believes that the settlement set forth in this Stipulation

confers substantial benefits upon the Class. Based on its evaluation, including confirmatory discovery, Plaintiff s Counsel has determined that the Settlement set forth in this Stipulation is fair, reasonable and adequate, and in the best