Form of Incentive Stock Option Agreement


    PEREGRINE
      PHARMACEUTICALS, INC.

    2005
      STOCK INCENTIVE PLAN

    INCENTIVE
      STOCK OPTION AGREEMENT

    


    INCENTIVE
      STOCK OPTION AGREEMENT (the “Agreement”) dated as of _________, between
      PEREGRINE PHARMACEUTICALS, INC., a Delaware corporation (collectively with
      its
      direct and indirect subsidiaries, the “Company”), and ________, an employee of
      the Company (“Optionee” or “Participant”).

    


    The
      Compensation Committee of the Board of Directors of the Company (the
“Committee”) has determined that the objectives of the Peregrine
      Pharmaceuticals, Inc. 2005 Stock Incentive Plan (the “Plan”) will be furthered
      by granting to Optionee options and/or other incentives pursuant to the Plan.
      Any capitalized terms not otherwise defined in this Agreement shall have the
      meaning ascribed to them in the Plan.

    


    In
      consideration of the foregoing and of the mutual undertakings set forth in
      this
      Agreement, the Company and Optionee agree as follows:

    


    
      	
              1
                .

            	
              Grant
                of Option
                and other rights.  

            


    

    


    (a) The
      Company hereby grants to Optionee options (the “Options”) to purchase
      _________ Shares
      of
      Common Stock of the Company (the “Shares”) at a purchase price of ___ per Share.
      It is intended that _______ of the Options qualify as "Incentive Stock Options"
      to the maximum extent permissible under the Internal Revenue Code.

    


    (b) For
      purposes of this Agreement, the term “Cause” means the Participant’s
      (i)
      embezzlement, fraud or any conduct related to the performance of the
      Participant’s duties for the Company that constitutes a crime, (ii)
      unauthorized disclosure of confidential information or breach of any
      confidentiality or non-disclosure agreement with the Company or any of its
      Subsidiaries, (iii)
      willful
      and habitual breach of duties,
      after
      notice to the Participant affording the Participant a reasonable opportunity
      to
      cure, or (iv)
      breach
      or violation of any statutory or common law duty of loyalty to the Company
      or
      the Company’s Affiliates.

     

    2. Exercisability. Subject
      to the further terms of this Agreement, the Options shall vest and become
      exercisable in accordance with Schedule 1 hereto. Unless earlier terminated
      pursuant to the provisions of the Plan or paragraph 5 of this Agreement, the
      unexercised portion of the Options shall expire and cease to be exercisable
      at
      5:00 pm PST ten (10) years from the date of this Agreement. This Agreement
      shall
      not confer upon Optionee any right with respect to continuation of her/his
      employment or consulting relationship with the Company, nor shall it interfere
      with or affect in any manner the right or power of the Company, or a parent
      or
      subsidiary of the Company, to terminate any agreement with Optionee in
      accordance with the terms thereof.

    


    3. Method
      of Exercise.
      The
      Options or any part of them may be exercised only by the giving of written
      notice to the Company in substantially the form annexed hereto as Schedule
      2
      hereto, or on such other form and in such other manner as the Committee shall
      prescribe from time to time. Such written notice must be accompanied by payment
      of the full purchase price for the number of Shares with respect to which the
      Options are being exercised. Such payment may be made by one or a combination
      of
      the following methods: (i) by a check acceptable to the Company; or
      (ii)
      by
      such
      other method as the Committee may authorize including, in the discretion of
      the
      Committee, the recourse promissory note of the Optionee. The date of exercise
      of
      the Options shall be the date on which written notice of exercise is hand
      delivered to the Company and payment of the full purchase price for the number
      of Shares with respect to which the Options are being exercised, during normal
      business hours, at its address as provided in Section 7 of this Agreement,
      or,
      if mailed, the date on which it is postmarked, provided such notice is actually
      received.

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    4. Optionee's
      Representations.
      As a
      condition to the exercise of an Option, the Company may require Optionee to
      make
      any representation and warranty to the Company as may be required by any
      applicable law or regulation.

    


    5. Termination
      of Employment; Death.
      Upon
      termination of Optionee’s employment with or status as a consultant to, the
      Company for any reason, the Options will immediately terminate and expire,
      except as provided in paragraphs (a) or (b) of this Section 5.

    


    (a) If
      Optionee resigns as an employee of, or consultant to, the Company with the
      Company's prior written consent, or if the Company terminates Optionee's
      employment by the Company without Cause (as defined herein), the Option will
      be
      exercisable but only to the extent it
      was
      exercisable at the time of such termination or resignation and only until the
      earlier of the expiration date of the Option, determined pursuant to Section
      2
      of this Agreement, or the expiration of three (3) months following such
      termination or resignation.

    


    (b) If
      Optionee dies or becomes Permanently Disabled while employed by, or rendering
      services as a consultant to, the Company or after Optionee's employment or
      status as a consultant to the Company terminates but during a period
      in
      which the Option is exercisable pursuant to paragraph (a) of
      this
      Section 5, the Option will be exercisable but only to the extent it was
      exercisable at the time of death and only until the earlier of the expiration
      date of the Option, determined pursuant to Section 2 of this Agreement, or
      the
      expiration of twelve (12) months following the date of Optionee's
      death.

    


    6. Plan
      Provisions to Prevail.
      This
      Agreement is subject to all of the terms and provisions of the Plan. Without
      limiting the generality of the foregoing, by entering into this Agreement
      Optionee agrees that no member of the Committee shall be liable for any action
      or determination made in good faith with respect to the Plan or any award
      thereunder or this Agreement. In the event that there is any inconsistency
      between the provisions of this Agreement and of the Plan, the provisions of
      the
      Plan shall govern.

    


    7. Notices.
      Any
      notice to be given to the Company hereunder shall be in writing and shall be
      addressed to Paul J. Lytle, Corporate Secretary, or at such other address as
      the
      Company may hereafter designate to Optionee by notice as provided in this
      Section 7. Any notice to be given to Optionee hereunder shall be addressed
      to
      Optionee at the address set forth beneath her/his signature hereto, or at such
      other address as Optionee may hereafter designate to the Company by notice
      as
      provided herein. A notice shall be deemed to have been duly given when
      personally delivered or mailed by registered or certified mail to the party
      entitled to receive it. Optionee expressly agrees to notify the Company of
      any
      transfer of the Common Stock or other action reasonably expected to cause any
      Option designated as an Incentive Stock Option to be retroactively classified
      for tax purposes as a Non-Qualified Option.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    8. Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and the successors and assigns of the Company and to the extent consistent
      with
      Section 5 of this Agreement and with the Plan, the heirs and personal
      representatives of Optionee.

    


    9. Governing
      Law.
      This
      Agreement shall be interpreted, construed and administered in accordance with
      the laws of the State of California as they apply to contracts made, delivered
      and performed in the State of California. Any dispute arising hereunder shall
      be
      resolved by binding arbitration before the American Arbitration Association
      under its Commercial Arbitration Rules, before a single arbitrator in Orange
      County, California. The parties will mutually determine the arbitrator from
      a
      list of arbitrators obtained from the American Arbitration Association office
      located in Orange County, California. If the parties are unable to agree on
      the
      arbitrator, the arbitrator will be selected by the American Arbitration
      Association with a preference for selecting a retired federal district judge
      or
      state superior court judge as the arbitrator.

    


    10. Withholding.
      If the
      Optionee takes any action that would cause the Options to be classified as
      nonqualified options for tax purposes, the Optionee will promptly provide the
      necessary tax withholding, if applicable, in the Committee’s view, pursuant to
      Article IV, Section V of the Plan.

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      and year first written above.

    


    PEREGRINE
      PHARMACEUTICALS, INC.

     

    


    By:________________________________

     

    


    OPTIONEE:

    


    


    __________________________________
      

    Signature

    


    Name:____________________________

    


    Social
      Security Number:

    


    _________________________________
      

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1 TO INCENTIVE STOCK OPTION AGREEMENT

    PURSUANT
      TO PEREGRINE PHARMACEUTICALS, INC., INC.

    2005
      STOCK INCENTIVE PLAN

    


    (This
      Schedule 1 shall be incorporated by reference and become a part of the Incentive
      Stock Option Agreement between the Company and the Optionee.)

    


    I. INCENTIVE
      STOCK OPTIONS:
      Incentive stock options do not result in compensation income on exercise by
      the
      Optionee and result in capital gain or loss when the stock is sold. Incentive
      stock options may only be issued to employees of the Company. There are a number
      of other legal requirements that the Company and the Optionee must satisfy
      in
      order for options to be classified as incentive stock options. Some of the
      rules
      affecting incentive stock options are (a) the stock received on the exercise
      of
      an incentive stock option must be held for two years from the date of grant
      of
      the option and one year from the date of exercise of the option, (b) no more
      than $100,000 in options may first become exercisable in any one year, and
      (c)
      the exercise of the incentive stock option may generate an item of tax
      preference for purposes of calculating the alternative minimum tax liability
      of
      the Optionee. Violation of any of those requirements by the Company or the
      Optionee can result in the Option being treated as a Non-qualified stock
      option.

    


    Date
      of
      Grant:      

    


    Earliest
      Exercise Date:     

    


    Exercise
      Price:      

    


    Number
      of
      Shares:      

    


    Vesting
      Schedule: 

      

    
      	
              Vesting
                Date

            	
              Options
                Vested

            
	 	 
	 	 
	 	 
	 	 


    

    Expiration
      Date:       

    


    Governing
      Law; Resolution of Disputes.
      This
      Agreement has been made, executed and delivered in, and the interpretation,
      performance and enforcement hereof shall be governed by and construed under
      the
      laws of the State of California. Any dispute arising hereunder shall be resolved
      by binding arbitration before the American Arbitration Association under its
      Commercial Arbitration Rules, before a single arbitrator in Orange County,
      California. The parties will mutually determine the arbitrator from a list
      of
      arbitrators obtained from the American Arbitration Association office located
      in
      Orange County, California. If the parties are unable to agree on the arbitrator,
      the arbitrator will be selected by the American Arbitration Association with
      a
      preference for selecting a retired federal district judge or state superior
      court judge as the arbitrator.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    I
      have
      read the Peregrine Pharmaceuticals, Inc. 2005 Stock Incentive Plan, the terms
      of
      which are incorporated herein. As Optionee, I hereby acknowledge that as of
      the
      date of the Options referenced above, it sets forth the entire understanding
      between the undersigned Optionee and the Company and its Affiliates regarding
      the Options and supersedes all prior oral and written agreements on that subject
      with the exception of (i) the options and any other stock awards previously
      granted and delivered to the undersigned under stock award plans of the Company,
      and (ii) the following agreements only:

    


    NONE _______

    (Initial)

    


    OTHER______________________________________________________________________

     

    IN
      WITNESS WHEREOF, this Incentive Stock Option Agreement pursuant to the Peregrine
      Pharmaceuticals, Inc. 2005 Stock Incentive Plan has been delivered by the
      parties hereto.

    


    
      	Date:
              ______________	
              “Optionee”

            


    

     

    _________________________________


    Name _________________________________      

    


    Address
      _______________________________

    ______________________________________

    _________________________________

     

    Social
      Security Number ____________________

    


    The
      Company hereby agrees to

    all
      the
      terms of the Agreement.

    


    Peregrine
      Pharmaceuticals, Inc.

    


    


    By:_____________________________________   

    Name:
      

    Title:
      

    


    


    
      
        
        

      

      
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    SCHEDULE
      2

    


    PEREGRINE
      PHARMACEUTICALS, INC.

    EXERCISE
      NOTICE

    


    Peregrine
      Pharmaceuticals, Inc.

    14272
      Franklin Avenue

    Tustin,
      CA 92780

     

    


    
      	
              1.

            	
              Exercise
                of Option.

            


    

    


    Effective
      as of today, ______________,
      _________________
      the
      undersigned (“Optionee”) hereby elects to exercise Optionee's Options to
      purchase _______
      shares
      of Common Stock (the “Shares”) of Peregrine Pharmaceuticals, Inc. (the
“Company”) under and pursuant to the Incentive Stock Option Agreement dated as
      of ___________________
      (the
“Option Agreement”) between the Company and Optionee pursuant to the Option
      Agreement.

    


    
      	
              2.

            	
              Rights
                as Shareholder

            


    

    


    (i) Until
      the
      certificate evidencing the Shares is issued (as evidenced by the appropriate
      entry on the stock ownership register of the Company or of a duly authorized
      transfer agent of the Company), no right to receive distributions or any other
      rights as a shareholder shall exist with respect to the Shares, notwithstanding
      the exercise of the Option. The Company shall issue (or cause to be issued)
      such
      certificate promptly upon exercise of the Option.

    


    (ii) Upon
      issuance of the certificate, Optionee shall enjoy rights as a shareholder of
      Common Stock until such time as Optionee disposes of the Shares or the
      Company.

    


    
      	
              3.

            	
              Governing
                Law; Severability.
                This Notice shall be governed by and construed in accordance with
                the laws
                of the State of California excluding that body of law pertaining
                to
                conflicts of law. Should any provision of this Notice be determined
                by a
                court of law to be illegal or unenforceable, the other provisions
                shall
                nevertheless remain effective and shall remain enforceable. Any dispute
                arising hereunder shall be resolved by binding arbitration before
                the
                American Arbitration Association under its Commercial Arbitration
                Rules,
                before a single arbitrator in Orange County. The parties will mutually
                determine the arbitrator from a list of arbitrators obtained from
                the
                American Arbitration Association office located in Orange County.
                If the
                parties are unable to agree on the arbitrator, the arbitrator will
                be
                selected by the American Arbitration Association with a preference
                for
                selecting a retired federal district judge or state superior court
                judge
                as the arbitrator.

            


    

    


    
      	
              4.

            	
              Notices.
                Any notice required or permitted hereunder shall be given in writing
                and
                shall be deemed effectively given upon personal delivery or upon
                deposit
                in the United States mail by certified mail, with postage and fees
                prepaid, addressed to the other party at its address as shown below
                beneath its signature, or to such other address as such party may
                designate in writing from time to time to the other
                party.

            


    

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              5.

            	
              Further
                Instruments.
                The parties agree to execute such further instruments and to take
                such
                further action as may be reasonably necessary to carry out the purposes
                and intent of this Notice.

            


    

    


    
      	
              6.

            	
              Delivery
                of Payment.
                Optionee herewith delivers to the Company the full purchase price
                for the
                Shares as set forth in paragraph 1 of the Option
                Agreement.

            


    

    


    
      	
              7.

            	
              Entire
                Agreement.
                The Option Agreement is incorporated herein by reference. This Notice,
                the
                Option Agreement and the Plan constitute the entire agreement of
                the
                parties and supersede in their entirety all prior undertakings and
                agreements of the Company and Optionee with respect to the subject
                matter
                hereof. In the event of a conflict or discrepancy between the terms
                of
                this Agreement and the Peregrine Pharmaceuticals, Inc. 2005 Stock
                Incentive Plan (the “Plan”), the terms of the Plan shall
                control.

            


    

    


    
      	
              8.

            	
              Representatives
                of Optionee.
                Optionee acknowledges that Optionee has received, read and understood
                the
                Option Agreement and this Notice and agrees to abide by and be bound
                by
                the terms and conditions of the Option Agreement and this
                Notice.

            


    

    


    
      	Submitted
              by:	
              Accepted
                by:

            


    

     

    
      	OPTIONEE:	
              PEREGRINE
                PHARMACEUTICALS, INC.

            


    

    


    
      	By:__________________________________	
              By:__________________________________

            


    

    Name:________________________________
      

    Address:______________________________
      

    _____________________________________
      

    


     

    7