SECURED TERM PROMISSORY NOTE

FOR VALUE RECEIVED, PEREGRINE PHARMACEUTICALS, INC. , a Delaware corporation (“ Peregrine ”), and AVID BIOSERVICES, INC ., a Delaware corporation (“ Avid ,” and together with Peregrine, jointly and severally, individually and collectively, referred to as “ Borrower ”) hereby jointly and severally promise to pay to the order of MIDCAP FUNDING I, LLC , a Delaware limited liability company, or the registered holder of this Note (“Lender”), at such place of payment as the registered holder of this Secured Term Promissory Note (this “Promissory Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount of Three Million Five Hundred Thousand Dollars ($3,500,000) or such other principal amount as Lender has advanced to Borrower, together with interest in accordance with the Loan Agreement (as hereinafter defined) (or if and when applicable, at a rate equal to the “Default Rate” (as defined in the Loan Agreement referenced below) based upon a year consisting of 360 days, with interest computed daily based on the actual number of days in each month until the principal balance is paid in full.

This Promissory Note is executed and delivered in connection with that certain Loan and Security Agreement of even date herewith by and among Borrower, MidCap Funding I, LLC, as agent for Lenders, MidCap Funding I, LLC, as a Lender, and BlueCrest Capital Finance, L.P., as a Lender (as the same may from time to time be am