Document:

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, (ii) THE SALE IS MADE IN ACCORDANCE WITH RULE 144
UNDER THE ACT, OR (iii) THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.

                                                         Dated: ________________

                        DELIATROPH PHARMACEUTICALS, INC.

                        DBA HYALOZYME THERAPEUTICS, INC.

                         CALLABLE STOCK PURCHASE WARRANT

                             [fill in number] Shares

      1. Number of Shares Subject to Warrant. FOR VALUE RECEIVED, subject to the
terms and conditions herein set forth, [fill in name] Holder (as described
below) is entitled to purchase from DeliaTroph Pharmaceuticals, Inc., a
California corporation dba Hyalozyme Therapeutics, Inc. (the "Company"), at any
time before the termination of this Warrant pursuant to Section 3 hereof, at a
price per share equal to the Warrant Price (as defined below), the Warrant Stock
(as defined below) upon exercise of this Warrant pursuant to Section 7 or
Section 8 hereof.

      This Warrant is issued pursuant to that certain Term Sheet of October 17,
2003 and Option Agreement between the Company and Grove Street Capital Advisors,
Inc. ("GSA") dated October 20, 2003 pursuant to which GSCA or its assignees have
the option to purchase an aggregate of 15,304,804 shares of Common Stock of the
Company, accompanied by a Callable Warrant (herein sometimes the "Callable
Warrants") to purchase one half a share of Common Stock for each share of Common
Stock purchased upon exercise of the Option Agreement, on the terms set forth
herein below. The Holder is subject to certain restrictions and entitled to
certain rights as set forth in the Term Sheet.

      2. Definitions. As used in this Warrant, the following terms shall have
definitions ascribed to them below:

                  (a) "Holder" shall mean [fill in the name] or his assigns.

                  (b) "Warrant Price" shall be $1.75 per share.

                  (c) "Warrant Stock" shall mean shares of the Common Stock of
the Company.

<PAGE>

      3. Termination. This Warrant shall terminate and no longer be exercisable
at 5:00 p.m., California time, on (fill in date five years from date of
issuance).

      4. Fractional Shares. No fractional shares shall be issuable upon exercise
or conversion of the Warrant and the number of shares to be issued shall be
rounded down to the nearest whole share. If a fractional share interest arises
upon any exercise or conversion of the Warrant, the Company shall eliminate such
fractional share interest by paying the Holder an amount computed by multiplying
the fractional interest by the fair market value of a full share.

      4A. Callable Warrant. This warrant may be redeemed by the Company upon
thirty (30) days advance written notice "Notice of Redemption" to Holder, for a
price of $0.01 per share, provided that (i) a registration statement with the
Securities and Exchange Commission is then in effect as to the shares of Common
Stock underlying the Warrant and will be in effect as of a date thirty (30) days
from the date of giving the Notice of Redemption; (ii) that for a period of
twenty (20) trading days prior to the giving of the Notice of Redemption the
Common Stock has closed at a price of $2.00 per share or higher; and (iii) that
no more than an aggregate of Callable Warrants, covering an aggregate of
1,913,100 shares of Common Stock underlying the Callable Warrants issued
pursuant to the Option Agreement, have been or will be called for redemption in
the ninety (90) day period proceeding or following the giving of the Notice of
Redemption.

      5. No Shareholder Rights. This Warrant, by itself, as distinguished from
any shares purchased hereunder, shall not entitle the Holder to any of the
rights of a shareholder of the Company.

      6. Reservation of Stock. The Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Warrant Stock upon the exercise or conversion of this Warrant. Issuance of
this Warrant shall constitute full authority to the Company's officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Warrant Stock issuable upon the exercise or
conversion of this Warrant.

      7. Exercise of Warrant. This Warrant may be exercised at any time prior to
its termination and prior to the expiration of the thirty (30) days Notice of
Redemption, in case the warrants have been called pursuant to 4A above, by the
surrender of this Warrant, together with the Notice of Exercise and the
Investment Representation Statement in the forms attached hereto as Attachments
1 and 2, respectively, duly completed and executed at the principal office of
the Company, specifying the portion of the Warrant to be exercised and
accompanied by payment in full of the Warrant Price in cash or by check with
respect to the shares of Warrant Stock being purchased. This Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
date of its surrender for exercise as provided above, and the person entitled to
receive the shares of Warrant Stock issuable upon exercise shall be treated for
all purposes as Holder of such shares of record as of the close of business on
such date. As promptly as practicable after such date, the Company shall issue
and deliver to the person or persons entitled to receive the same a certificate
or certificates for the number of full shares of Warrant Stock issuable upon
such exercise. If the Warrant shall be exercised for less than the total number
of shares of Warrant Stock then issuable upon exercise, promptly after surrender
of the Warrant upon such exercise, the Company will execute and deliver a new
Warrant, dated the date hereof, evidencing the right of the Holder to the
balance of the Warrant Stock purchasable hereunder upon the same terms and
conditions set forth herein.

                                       2
<PAGE>

      8. Adjustment of Exercise Price and Number of Shares. The number of shares
issuable upon exercise of this Warrant (or any shares of stock or other
securities or property at the time receivable or issuable upon exercise of this
Warrant) and the Warrant Price therefor are subject to adjustment upon the
occurrence of the following events:

            (a) Adjustment for Stock Splits, Stock Dividends, Recapitalizations,
etc. The Warrant Price and the number of shares issuable upon exercise of this
Warrant shall each be proportionally adjusted to reflect any stock dividend,
stock split, reverse stock split, combination of shares, reclassification,
recapitalization or other similar event altering the number of outstanding
shares of the Company's capital stock.

            (b) Adjustment for Other Dividends and Distributions. In case the
Company shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution with
respect to the shares payable in securities of the Company then, and in each
such case, the Holder, on exercise of this Warrant at any time after the
consummation, effective date or record date of such event, shall receive, in
addition to the Warrant Stock (or such other stock or securities) issuable on
such exercise prior to such date, the securities of the Company to which such
Holder would have been entitled upon such date if such Holder had exercised this
Warrant immediately prior thereto (all subject to further adjustment as provided
in this Warrant).

      9. Adjustment for Capital Reorganization Consolidation Merger. If any
capital reorganization of the capital stock of the Company, or any consolidation
or merger of the Company with or into another corporation, or the sale of all or
substantially all of the Company's assets to another corporation shall be
effected in such a way that holders of the Company's capital stock will be
entitled to receive stock, securities or assets with respect to or in exchange
for the Company's capital stock, and in each such case the Holder, upon the
exercise of this Warrant, at any time after the consummation of such capital
reorganization, consolidation, merger, or sale, shall be entitled to receive, in
lieu of the stock or other securities and property receivable upon the exercise
of this Warrant prior to such consummation, the stock or other securities or
property to which such Holder would have been entitled upon such consummation if
such Holder had exercised this Warrant immediately prior to the consummation of
such capital reorganization, consolidation, merger, or sale, all subject to
further adjustment as provided in this Section 10; and in each such case, the
terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation. The Warrant shall also be subject to adjustment on the same basis
as the Company's Series C Convertible Preferred Stock is adjustable.

                                       3
<PAGE>

      10. "Market Stand-Off" Agreement. The Holder agrees in connection with any
underwritten registration of the Company's securities (other than a registration
of securities in a Rule 415 of the Securities Act of 1933, as amended,
("Securities Act") transaction or with respect to an employee benefit plan),
upon request of the Company or the underwriters managing any underwritten
offering of the Company's securities, not to sell, make any short sale of, loan,
pledge (or otherwise encumber or hypothecate), grant any option for the purchase
of, or otherwise directly or indirectly dispose of any of its shares of Common
Stock (other than those included in the registration) without the prior written
consent of the Company and such managing underwriters for 180 days following the
effective date of the registration statement for such offering under the
Securities Act; provided, however, that such agreement shall not be required
unless all officers and directors of the Company enter into similar agreements,
and provided further that such agreement shall not be required with respect to
shares underlying the warrant if the warrant has been called for redemption
under paragraph 4A within 30 days before or 180 days after the filing of the
registration statement with respect to such underwritten offering.

      11. Transfer of Warrant. This Warrant may be transferred or assigned by
the Holder hereof in whole or in part, provided that the transferor provides, at
the Company's request, an opinion of counsel satisfactory to the Company that
such transfer does not require registration under the Securities Act and the
securities law applicable with respect to any other applicable jurisdiction.

      12. Amendments and Waivers. This Warrant and any term hereof may only be
amended, waived, discharged or terminated by a written instrument signed by the
Company and the holders of at least 66 2/3% of the shares issuable upon exercise
of the Callable Warrants then outstanding.

      13. Miscellaneous. This Warrant shall be governed by the laws of the State
of California, as such laws are applied to contracts to be entered into and
performed entirely in California by California residents. The headings in this
Warrant are for purposes of convenience and reference only, and shall not be
deemed to constitute a part hereof. Neither this Warrant nor any term hereof may
be changed or waived orally, but only by an instrument in writing signed by the
Company and the Holder of this Warrant. All notices and other communications
from the Company to the Holder of this Warrant shall be delivered, personally or
mailed by first class mail, postage prepaid, to the address furnished to the
Company in writing by the last Holder of this Warrant who shall have furnished
an address to the Company in writing, and if mailed shall be deemed given three
days after deposit in the United States mail.

                                        DELIATROPH PHARMACEUTICALS, INC.
                                        DBA HYALOZYME THERAPEUTICS, INC.

                                        By:
                                        ----------------------------------------
                                        Name:
                                        ----------------------------------------
                                        Title:
                                        ----------------------------------------

                                       4
<PAGE>

                                  Attachment 1

                               NOTICE OF EXERCISE

TO:

DELIATROPH PHARMACEUTICALS, INC. DBA HYALOZYME THERAPEUTICS, INC.

      1. The undersigned hereby elects to purchase ________ shares of the
Warrant Stock of DeliaTroph Pharmaceuticals, Inc. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price in full,
together with all applicable transfer taxes, if any.

      2. Please issue a certificate or certificates representing said shares of
Warrant Stock in the name of the undersigned or in such other name as is
specified below:

                    ----------------------------------------
                                     (Name)
                    ----------------------------------------
                                    (Address)

----------------------------------------    ------------------------------------
(Date)

<PAGE>

                                  Attachment 2

                       INVESTMENT REPRESENTATION STATEMENT

                             Shares of Warrant Stock
                     (as defined in the attached Warrant) of
                        DELIATROPH PHARMACEUTICALS, INC.

In connection with the purchase of the above-listed securities, the undersigned
hereby represents to DeliaTroph Pharmaceuticals, Inc. (the "Company") as
follows:

            (a) The securities to be received upon the exercise of the Warrant
(the "Warrant Stock") will be acquired for investment for its own account; not
as a nominee or agent, and not with a view to the sale or distribution of any
part thereof, and the undersigned has no present intention of selling, granting
participation in or otherwise distributing the same, but subject, nevertheless,
to any requirement of law that the disposition of its property shall at all
times be within its control. By executing this Statement, the undersigned
further represents that he does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person, with respect to any Warrant Stock issuable upon
exercise of the Warrant.

            (b) The undersigned understands that the Warrant Stock issuable upon
exercise of the Warrant at the time of issuance may not be registered under the
Securities Act, and applicable state securities laws, on the ground that the
issuance of such securities is exempt pursuant to Section 4(2) of the Securities
Act and state law exemptions relating to offers and sales not by means of a
public offering, and that the Company's reliance on such exemptions is
predicated on the undersigned's representations set forth herein.

            (c) The undersigned agrees that in no event will he make a
disposition of any Warrant Stock acquired upon the exercise of the Warrant
unless and until (i) he shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (ii) he shall have
furnished the Company with an opinion of counsel satisfactory to the Company and
Company's counsel to the effect that (A) appropriate action necessary for
compliance with the Securities Act and any applicable state securities laws has
been taken or an exemption from the registration requirements of the Securities
Act and such laws is available, and (B) the proposed transfer will not violate
any of said laws.

            (d) The undersigned acknowledges that an investment in the Company
is highly speculative and represents that he is able to fend for itself in the
transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment. The undersigned
represents that he has had the opportunity to ask questions of the Company
concerning the Company's business and assets and to obtain any additional
information which he considered necessary to verify the accuracy of or to
amplify the Company's disclosures, and has had all questions which have been
asked by he satisfactorily answered by the Company.

<PAGE>

            (e) The undersigned acknowledges that the Warrant Stock issuable
upon exercise of the Warrant must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available. The undersigned is aware of the provisions of Rule 144 promulgated
under the Securities Act which permit limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things, the existence of a public market for the shares, the
availability of certain current public information about the Company, the resale
occurring not less than one year after a party has purchased and paid for the
security to be sold, the sale being through a "broker's transaction" or in
transactions directly with a "market makers" (as provided by Rule 144(f)) and
the number of shares being sold during any three-month period not exceeding
specified limitations.

----------------------------------------    ------------------------------------
(Date)

<PAGE>

                                  Attachment 3

                              NOTICE OF CONVERSION

TO:   DELIATROPH PHARMACEUTICALS, INC.

      1. The undersigned hereby elects to acquire ________ shares of the Warrant
Stock of DeliaTroph Pharmaceuticals, Inc. pursuant to the terms of the attached
Warrant, by conversion of __________ percent (______%) of the Warrant.

      2. Please issue a certificate or certificates representing said shares of
Warrant Stock in the name of the undersigned or in such other name as is
specified below:

                    ----------------------------------------
                                     (Name)
                    ----------------------------------------
                                    (Address)

----------------------------------------    ------------------------------------
(Date)HALOZYME THERAPEUTICS, INC.
                                 2004 STOCK PLAN

      1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

            1.1   ESTABLISHMENT. Halozyme Therapeutics, Inc. 2004 Stock Plan
(the "PLAN") is hereby established effective as of May 21, 2004.

            1.2   PURPOSE. The purpose of the Plan is to advance the interests
of the Participating Company Group and its shareholders by providing an
incentive to attract, retain and reward persons performing services for the
Participating Company Group and by motivating such persons to contribute to the
growth and profitability of the Participating Company Group.

            1.3   TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the shares
of Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan and the agreements
evidencing Awards granted under the Plan have lapsed. However, all Awards shall
be granted, if at all, within ten (10) years from the earlier of the date the
Plan is adopted by the Board or the date the Plan is duly approved by the
shareholders of the Company.

      2.    DEFINITIONS AND CONSTRUCTION.

            2.1   DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:

                  (a)   "AWARD" means an Option or Stock Purchase Right granted
under the Plan.

                  (b)   "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the Plan,
"BOARD" also means such Committee(s).

                  (c)   "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.

                  (d)   "COMMITTEE" means the compensation committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                  (e)   "COMPANY" means Halozyme Therapeutics, Inc., a Nevada
corporation, or any successor corporation thereto.

                  (f)   "CONSULTANT" means a person engaged to provide
consulting or advisory services (other than as an Employee or a Director) to a
Participating Company, provided that the identity of such person, the nature of

                                       1
<PAGE>

such services or the entity to which such services are provided would not
preclude the Company from offering or selling securities to such person pursuant
to the Plan in reliance on either the exemption from registration provided by
Rule 701 under the Securities Act or, if the Company is required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act, registration on a Form S-8
Registration Statement under the Securities Act.

                  (g)   "DIRECTOR" means a member of the Board or of the board
of directors of any other Participating Company.

                  (h)   "DISABILITY" means the inability of the Participant, in
the opinion of a qualified physician acceptable to the Company, to perform the
major duties of the Participant's position with the Participating Company Group
because of the sickness or injury of the Participant.

                  (i)   "EMPLOYEE" means any person treated as an employee
(including an Officer or a Director who is also treated as an employee) in the
records of a Participating Company and, with respect to any Incentive Stock
Option granted to such person, who is an employee for purposes of Section 422 of
the Code; provided, however, that neither service as a Director nor payment of a
director's fee shall be sufficient to constitute employment for purposes of the
Plan. The Company shall determine in good faith and in the exercise of its
discretion whether an individual has become or has ceased to be an Employee and
the effective date of such individual's employment or termination of employment,
as the case may be. For purposes of an individual's rights, if any, under the
Plan as of the time of the Company's determination, all such determinations by
the Company shall be final, binding and conclusive, notwithstanding that the
Company or any court of law or governmental agency subsequently makes a contrary
determination.

                  (j)   "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.

                  (k)   "FAIR MARKET VALUE" means, as of any date, the value of
a share of Stock or other property as determined by the Board, in its
discretion, or by the Company, in its discretion, if such determination is
expressly allocated to the Company herein, subject to the following:

                        (i)   If, on such date, the Stock is listed on a
national or regional securities exchange or market system, the Fair Market Value
of a share of Stock shall be the closing price of a share of Stock (or the mean
of the closing bid and asked prices of a share of Stock if the Stock is so
quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap
Market or such other national or regional securities exchange or market system
constituting the primary market for the Stock, as reported in The Wall Street
Journal or such other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such securities exchange
or market system, the date on which the Fair Market Value shall be established
shall be the last day on which the Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the Board, in its
discretion.

                                       2
<PAGE>

                        (ii)  If, on such date, the Stock is not listed on a
national or regional securities exchange or market system, the Fair Market Value
of a share of Stock shall be as determined by the Board in good faith without
regard to any restriction other than a restriction which, by its terms, will
never lapse.

                  (l)   "INCENTIVE STOCK OPTION" means an Option intended to be
(as set forth in the Option Agreement) and which qualifies as an incentive stock
option within the meaning of Section 422(b) of the Code.

                  (m)   "INSIDER" means an Officer, a Director of the Company or
other person whose transactions in Stock are subject to Section 16 of the
Exchange Act.

                  (n)   "NONSTATUTORY STOCK OPTION" means an Option not intended
to be (as set forth in the Option Agreement) or which does not qualify as an
Incentive Stock Option.

                  (o)   "OFFICER" means any person designated by the Board as an
officer of the Company.

                  (p)   "OPTION" means a right granted under Section 6 to
purchase Stock pursuant to the terms and conditions of the Plan. An Option may
be either an Incentive Stock Option or a Nonstatutory Stock Option.

                  (q)   "OPTION AGREEMENT" means a written agreement between the
Company and a Participant setting forth the terms, conditions and restrictions
of the Option granted to the Participant and any shares acquired upon the
exercise thereof. An Option Agreement may consist of a form of "Notice of Grant
of Stock Option" and a form of "Stock Option Agreement" incorporated therein by
reference, or such other form or forms as the Board may approve from time to
time.

                  (r)   "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                  (s)   "PARTICIPANT" means any eligible person who has been
granted one or more Awards.

                  (t)   "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.

                  (u)   "PARTICIPATING COMPANY GROUP" means, at any point in
time, all corporations collectively which are then Participating Companies.

                  (v)   "PRIOR PLAN OPTIONS" means any option granted by the
Company which is subject to vesting or repurchase by the Company, including
specifically, all such options granted pursuant to the Company's Amended and
Restated 2001 Stock Plan which is outstanding on or after the Effective Date.

                  (w)   "RULE 16B-3" means Rule 16b-3 under the Exchange Act, as
amended from time to time, or any successor rule or regulation.

                                       3
<PAGE>

                  (x)   "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                  (y)   "SERVICE" means a Participant's employment or service
with the Participating Company Group, whether in the capacity of an Employee, a
Director or a Consultant. A Participant's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Participant
renders Service to the Participating Company Group or a change in the
Participating Company for which the Participant renders such Service, provided
that there is no interruption or termination of the Participant's Service.
Furthermore, a Participant's Service shall not be deemed to have terminated if
the Participant takes any military leave, sick leave, or other bona fide leave
of absence approved by the Company; provided, however, that if any such leave
exceeds ninety (90) days, on the one hundred eighty-first (181st) day following
the commencement of such leave any Incentive Stock Option held by the
Participant shall cease to be treated as an Incentive Stock Option and instead
shall be treated thereafter as a Nonstatutory Stock Option unless the
Participant's right to return to Service is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes
of determining vesting under the Participant's Option Agreement or Stock
Purchase Agreement. Except as otherwise provided by the Board, in its
discretion, the Participant's Service shall be deemed to have terminated either
upon an actual termination of Service or upon the corporation for which the
Participant performs Service ceasing to be a Participating Company. Subject to
the foregoing, the Company, in its discretion, shall determine whether the
Participant's Service has terminated and the effective date of and reason for
such termination.

                  (z)   "STOCK" means the common stock of the Company, as
adjusted from time to time in accordance with Section 4.2.

                  (aa)  "STOCK PURCHASE AGREEMENT" means a written agreement
between the Company and a Participant setting forth the terms, conditions and
restrictions of the Stock Purchase Right granted to the Participant and any
shares acquired upon the exercise thereof. A Stock Purchase Agreement may
consist of a form of "Notice of Grant of Stock Purchase Right" and a form of
"Stock Purchase Agreement" incorporated therein by reference, or such other form
or forms as the Board may approve from time to time.

                  (bb)  "STOCK PURCHASE RIGHT" means a right granted under
Section 7 to purchase Stock pursuant to the terms and conditions of the Plan.

                  (cc)  "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

                  (dd)  "TEN PERCENT SHAREHOLDER" means a person who, at the
time an Award is granted to such person, owns stock possessing more than ten
percent (10%) of the total combined voting power (as defined in Section 194.5 of
the California Corporations Code) of all classes of stock of a Participating
Company within the meaning of Section 422(b)(6) of the Code.

            2.2   CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

                                       4
<PAGE>

      3.    ADMINISTRATION.

            3.1   ADMINISTRATION BY THE BOARD. The Plan shall be administered by
the Board. All questions of interpretation of the Plan or of any Award shall be
determined by the Board, and such determinations shall be final and binding upon
all persons having an interest in the Plan or such Award.

            3.2   AUTHORITY OF OFFICERS. Any Officer shall have the authority to
act on behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated
to the Company herein, provided the Officer has apparent authority with respect
to such matter, right, obligation, determination or election. The Board may, in
its discretion, delegate to a committee comprised of one or more Officers the
authority to grant one or more Awards, without further approval of the Board or
the Committee, to any Employee or Consultant, other than a person who, at the
time of such grant, is an Insider; provided, however, that (a) such Awards shall
not be granted for shares in excess of the maximum aggregate number of shares of
Stock authorized for issuance pursuant to Section 4.1, (b) the exercise price
per share of each Option shall be not less than the minimum amount required by
Section 6.1, and (iii) each such Award shall be subject to the terms and
conditions of the appropriate standard form of Award Agreement approved by the
Board or the Committee and shall conform to the provisions of the Plan and such
other guidelines as shall be established from time to time by the Board or the
Committee.

            3.3   POWERS OF THE BOARD. In addition to any other powers set forth
in the Plan and subject to the provisions of the Plan, the Board shall have the
full and final power and authority, in its discretion:

                  (a)   to determine the persons to whom, and the time or times
at which, Awards shall be granted and the number of shares of Stock to be
subject to each Award;

                  (b)   to designate Options as Incentive Stock Options or
Nonstatutory Stock Options;

                  (c)   to determine the Fair Market Value of shares of Stock or
other property;

                  (d)   to determine the terms, conditions and restrictions
applicable to each Award (which need not be identical) and any shares acquired
upon the exercise thereof, including, without limitation, (i) the exercise price
of the Award, (ii) the method of payment for shares purchased upon the exercise
of the Award, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with the Award or such shares, including by the
withholding or delivery of shares of stock, (iv) the timing, terms and
conditions of the exercisability of the Award or the vesting of any shares
acquired upon the exercise thereof, (v) the time of the expiration of the Award,
(vi) the effect of the Participant's termination of Service on any of the
foregoing, and (vii) all other terms, conditions and restrictions applicable to
the Award or such shares not inconsistent with the terms of the Plan;

                                       5
<PAGE>

                  (e)   to approve one or more forms of Option Agreement and
Stock Purchase Agreement;

                  (f)   to amend, modify, extend, cancel or renew any Award or
to waive any restrictions or conditions applicable to any Award or any shares
acquired upon the exercise thereof;

                  (g)   to accelerate, continue, extend or defer the
exercisability of any Award or the vesting of any shares acquired upon the
exercise thereof, including with respect to the period following a Participant's
termination of Service;

                  (h)   to prescribe, amend or rescind rules, guidelines and
policies relating to the Plan, or to adopt supplements to, or alternative
versions of, the Plan, including, without limitation, as the Board deems
necessary or desirable to comply with the laws of, or to accommodate the tax
policy or custom of, foreign jurisdictions whose citizens may be granted Awards;
and

                  (i)   to correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Option Agreement or Stock Purchase
Agreement and to make all other determinations and take such other actions with
respect to the Plan or any Award as the Board may deem advisable to the extent
not inconsistent with the provisions of the Plan or applicable law.

            3.4   ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to
participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered pursuant to Section 12 of the Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3.

            3.5   COMMITTEE COMPLYING WITH SECTION 162(M). If the Company is a
"publicly held corporation" within the meaning of Section 162(m), the Board may
establish a Committee of "outside directors" within the meaning of Section
162(m) to approve the grant of any Award which might reasonably be anticipated
to result in the payment of employee remuneration that would otherwise exceed
the limit on employee remuneration deductible for income tax purposes pursuant
to Section 162(m).

            3.6   INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in

                                       6
<PAGE>

satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.

      4.    SHARES SUBJECT TO PLAN.

            4.1   MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be Ten Million (10,000,000), reduced at any
time by the number of shares subject to the Prior Plan Options. Such shares
shall consist of authorized but unissued or reacquired shares of Stock or any
combination thereof. If any outstanding Award, including any Prior Plan Options,
for any reason, expires or is terminated or canceled without having been
exercised or settled in full, or if shares of Stock acquired pursuant to an
Award subject to forfeiture or repurchase, including any Prior Plan Options, are
forfeited or repurchased by the Company, the shares of Stock allocable to the
terminated portion of such Award, including any Prior Plan Options, or such
forfeited or repurchased shares of Stock shall again be available for grant
under the Plan. However, except as adjusted pursuant to Section 4.2, in no event
shall more than Ten Million (10,000,000) shares of Stock be available for
issuance pursuant to the exercise of Incentive Stock Options (the "ISO SHARE
LIMIT"). Notwithstanding the foregoing, at any such time as the offer and sale
of securities pursuant to the Plan is subject to compliance with Section
260.140.45 of Title 10 of the California Code of Regulations ("SECTION
260.140.45"), the total number of shares of Stock issuable upon the exercise of
all outstanding Awards (together with options outstanding under any other stock
plan of the Company) and the total number of shares provided for under any stock
bonus or similar plan of the Company shall not exceed thirty percent (30%) (or
such other higher percentage limitation as may be approved by the shareholders
of the Company pursuant to Section 260.140.45) of the then outstanding shares of
the Company as calculated in accordance with the conditions and exclusions of
Section 260.140.45.

            4.2   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. Subject to any
required action by the shareholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether
through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the shareholders of the Company in a
form other than Stock (excepting normal cash dividends) that has a material
effect on the Fair Market Value of shares of Stock, appropriate and
proportionate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding Options, in the ISO Share Limit set
forth in Section 4.1, and in the exercise price per share of any outstanding
Options in order to prevent dilution or enlargement of Optionees' rights under
the Plan. For purposes of the foregoing, conversion of any convertible
securities of the Company shall not be treated as "effected without receipt of
consideration by the Company." Any fractional share resulting from an adjustment
pursuant to this Section 4.2 shall be rounded down to the nearest whole number,
and in no event may the exercise price of any Option be decreased to an amount
less than the par value, if any, of the stock subject to the Option. Such
adjustments shall be determined by the Board, and its determination shall be
final, binding and conclusive.

                                       7
<PAGE>

      5.    ELIGIBILITY AND OPTION LIMITATIONS.

            5.1   PERSONS ELIGIBLE FOR AWARDS. Awards may be granted only to
Employees, Consultants, and Directors. Eligible persons may be granted more than
one (1) Award. However, eligibility in accordance with this Section shall not
entitle any person to be granted an Award, or, having been granted an Award, to
be granted an additional Award.

            5.2   OPTION GRANT RESTRICTIONS. An Incentive Stock Option may be
granted only to a person who is an Employee on the effective date of grant of
the Option to such person. Any person who is not an Employee on the effective
date of the grant of an Option to such person may be granted only a Nonstatutory
Stock Option.

            5.3   FAIR MARKET VALUE LIMITATION. To the extent that options
designated as Incentive Stock Options (granted under all stock plans of the
Participating Company Group, including the Plan) become exercisable by a
Participant for the first time during any calendar year for stock having a Fair
Market Value greater than One Hundred Thousand Dollars ($100,000), the portions
of such options which exceed such amount shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5.3, options designated as Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of stock shall be determined as of the time the option
with respect to such stock is granted. If the Code is amended to provide for a
different limitation from that set forth in this Section 5.3, such different
limitation shall be deemed incorporated herein effective as of the date and with
respect to such Options as required or permitted by such amendment to the Code.
If an Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this
Section 5.3, the Participant may designate which portion of such Option the
Participant is exercising. In the absence of such designation, the Participant
shall be deemed to have exercised the Incentive Stock Option portion of the
Option first. Separate certificates representing each such portion shall be
issued upon the exercise of the Option.

            5.4   SECTION 162(M) AWARD LIMITS. The following limits shall apply
to the grant of any Award if, at the time of grant, the Company is a "publicly
held corporation" within the meaning of Section 162(m).

                  (a)   OPTIONS. Subject to adjustment as provided in Section
4.2, no Employee shall be granted within any fiscal year of the Company one or
more Options which in the aggregate are for more than Two Million (2,000,000)
shares of Stock, provided, however, that the Company may make an additional
one-time grant to any newly-hired Employee of an Option to purchase up to an
additional One Million (1,000,000) shares of Stock. An Option which is canceled
in the same fiscal year of the Company in which it was granted shall continue to
be counted against such limit for such fiscal year.

                  (b)   STOCK PURCHASE RIGHTS. Subject to adjustment as provided
in Section 4.2, no Employee shall be granted within any fiscal year of the
Company one or more Stock Purchase Rights which in the aggregate are for more

                                       8
<PAGE>

than One Million (1,000,000) shares of Stock, provided, however, that the
Company may make an additional one-time grant to any newly-hired Employee of a
Stock Purchase Right to purchase up to an additional Five Hundred Thousand
(500,000) shares of Stock. A Stock Purchase Right which is canceled in the same
fiscal year of the Company in which it was granted shall continue to be counted
against such limit for such fiscal year.

      6.    TERMS AND CONDITIONS OF OPTIONS.

            Options shall be evidenced by Option Agreements specifying the
number of shares of Stock covered thereby, in such form as the Board shall from
time to time establish. No Option or purported Option shall be a valid and
binding obligation of the Company unless evidenced by a fully executed Option
Agreement. Option Agreements may incorporate all or any of the terms of the Plan
by reference and shall comply with and be subject to the following terms and
conditions:

            6.1   EXERCISE PRICE. The exercise price for each Option shall be
established in the discretion of the Board; provided, however, that (a) the
exercise price per share for an Incentive Stock Option shall be not less than
the Fair Market Value of a share of Stock on the effective date of grant of the
Option, (b) the exercise price per share for a Nonstatutory Stock Option shall
be not less than eighty-five percent (85%) of the Fair Market Value of a share
of Stock on the effective date of grant of the Option, and (c) no Option granted
to a Ten Percent Shareholder shall have an exercise price per share less than
one hundred ten percent (110%) of the Fair Market Value of a share of Stock on
the effective date of grant of the Option. Notwithstanding the foregoing, an
Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section 424(a) of
the Code.

            6.2   EXERCISABILITY AND TERM OF OPTIONS. Options shall be
exercisable at such time or times, or upon such event or events, and subject to
such terms, conditions, performance criteria and restrictions as shall be
determined by the Board and set forth in the Option Agreement evidencing such
Option; provided, however, that (a) no Option shall be exercisable after the
expiration of ten (10) years after the effective date of grant of such Option,
(b) no Incentive Stock Option granted to a Ten Percent Shareholder shall be
exercisable after the expiration of five (5) years after the effective date of
grant of such Option, and (c) with the exception of an Option granted to an
Officer, a Director or a Consultant, no Option shall become exercisable at a
rate less than twenty percent (20%) per year over a period of five (5) years
from the effective date of grant of such Option, subject to the Participant's
continued Service. Subject to the foregoing, unless otherwise specified by the
Board in the grant of an Option, any Option granted hereunder shall terminate
ten (10) years after the effective date of grant of the Option, unless earlier
terminated in accordance with its provisions.

            6.3   PAYMENT OF EXERCISE PRICE.

                  (a)   FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash, by check or

                                       9
<PAGE>

cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Participant having a Fair Market Value not less
than the exercise price, (iii) by delivery of a properly executed notice
together with irrevocable instructions to a broker providing for the assignment
to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "CASHLESS EXERCISE"), (iv) by such other consideration as may be
approved by the Board from time to time to the extent permitted by applicable
law, or (v) by any combination thereof. The Board may at any time or from time
to time, by approval of or by amendment to the standard forms of Option
Agreement described in Section 8, or by other means, grant Options which do not
permit all of the foregoing forms of consideration to be used in payment of the
exercise price or which otherwise restrict one or more forms of consideration.

                  (b)   LIMITATIONS ON FORMS OF CONSIDERATION.

                        (i)   TENDER OF STOCK. Notwithstanding the foregoing, an
Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender or attestation would
constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company's stock. Unless otherwise provided by
the Board, an Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares either have
been owned by the Participant for more than six (6) months (and were not used
for another Option exercise by attestation during such period) or were not
acquired, directly or indirectly, from the Company.

                        (ii)  CASHLESS EXERCISE. The Company reserves, at any
and all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise.

            6.4   EFFECT OF TERMINATION OF SERVICE.

                  (a)   OPTION EXERCISABILITY. Subject to earlier termination of
the Option as otherwise provided herein and unless otherwise provided by the
Board in the grant of an Option and set forth in the Option Agreement, an Option
shall be exercisable after a Participant's termination of Service only during
the applicable time period determined in accordance with this Section 6.4 and
thereafter shall terminate:

                        (i)   DISABILITY. If the Participant's Service
terminates because of the Disability of the Participant, the Option, to the
extent unexercised and exercisable on the date on which the Participant's
Service terminated, may be exercised by the Participant (or the Participant's
guardian or legal representative) at any time prior to the expiration of twelve
(12) months (or such longer period of time as determined by the Board, in its
discretion) after the date on which the Participant's Service terminated, but in
any event no later than the date of expiration of the Option's term as set forth
in the Option Agreement evidencing such Option (the "OPTION EXPIRATION DATE").

                                       10
<PAGE>

                        (ii)  DEATH. If the Participant's Service terminates
because of the death of the Participant, the Option, to the extent unexercised
and exercisable on the date on which the Participant's Service terminated, may
be exercised by the Participant's legal representative or other person who
acquired the right to exercise the Option by reason of the Participant's death
at any time prior to the expiration of twelve (12) months (or such longer period
of time as determined by the Board, in its discretion) after the date on which
the Participant's Service terminated, but in any event no later than the Option
Expiration Date. The Participant's Service shall be deemed to have terminated on
account of death if the Participant dies within three (3) months (or such longer
period of time as determined by the Board, in its discretion) after the
Participant's termination of Service.

                        (iii) TERMINATION FOR CAUSE. Notwithstanding any other
provision of the Plan to the contrary, if the Participant's Service with the
Participating Company Group is terminated for Cause, as defined by the
Participant's Option Agreement or contract of employment or service (or, if not
defined in any of the foregoing, as defined below), the Option shall terminate
and cease to be exercisable immediately upon such termination of Service. Unless
otherwise defined by the Participant's Option Agreement or contract of
employment or service, for purposes of this Section 6.4(a)(iii) "CAUSE" shall
mean any of the following: (1) the Participant's theft, dishonesty, or
falsification of any Participating Company documents or records; (2) the
Participant's improper use or disclosure of a Participating Company's
confidential or proprietary information; (3) any action by the Participant which
has a material detrimental effect on a Participating Company's reputation or
business; (4) the Participant's failure or inability to perform any reasonable
assigned duties after written notice from a Participating Company of, and a
reasonable opportunity to cure, such failure or inability; (5) any material
breach by the Participant of any employment or service agreement between the
Participant and a Participating Company, which breach is not cured pursuant to
the terms of such agreement; or (6) the Participant's conviction (including any
plea of guilty or nolo contendere) of any criminal act which impairs the
Participant's ability to perform his or her duties with a Participating Company.

                        (iv)  OTHER TERMINATION OF SERVICE. If the Participant's
Service terminates for any reason, except Disability, death or Cause, the
Option, to the extent unexercised and exercisable by the Participant on the date
on which the Participant's Service terminated, may be exercised by the
Participant at any time prior to the expiration of three (3) months (or such
longer period of time as determined by the Board, in its discretion) after the
date on which the Participant's Service terminated, but in any event no later
than the Option Expiration Date.

                  (b)   EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding
the foregoing other than termination for Cause, if the exercise of an Option
within the applicable time periods set forth in Section 6.4(a) is prevented by
the provisions of Section 11 below, the Option shall remain exercisable until
three (3) months (or such longer period of time as determined by the Board, in
its discretion) after the date the Participant is notified by the Company that
the Option is exercisable, but in any event no later than the Option Expiration
Date.

                                       11
<PAGE>

                  (c)   EXTENSION IF PARTICIPANT SUBJECT TO SECTION 16(B).
Notwithstanding the foregoing other than termination for Cause, if a sale within
the applicable time periods set forth in Section 6.4(a) of shares acquired upon
the exercise of the Option would subject the Participant to suit under Section
16(b) of the Exchange Act, the Option shall remain exercisable until the
earliest to occur of (i) the tenth (10th) day following the date on which a sale
of such shares by the Participant would no longer be subject to such suit, (ii)
the one hundred and ninetieth (190th) day after the Participant's termination of
Service, or (iii) the Option Expiration Date.

            6.5   TRANSFERABILITY OF OPTIONS. During the lifetime of the
Participant, an Option shall be exercisable only by the Participant or the
Participant's guardian or legal representative. No Option shall be assignable or
transferable by the Participant, except by will or by the laws of descent and
distribution. Notwithstanding the foregoing, to the extent permitted by the
Board, in its discretion, and set forth in the Option Agreement evidencing such
Option, a Nonstatutory Stock Option shall be assignable or transferable subject
to the applicable limitations, if any, described in Section 260.140.41 of Title
10 of the California Code of Regulations, Rule 701 under the Securities Act, and
the General Instructions to Form S-8 Registration Statement under the Securities
Act.

      7.    TERMS AND CONDITIONS OF STOCK PURCHASE RIGHTS.

            Stock Purchase Rights shall be evidenced by Stock Purchase
Agreements, specifying the number of shares of Stock covered thereby, in such
form as the Board shall from time to time establish. No Stock Purchase Right or
purported Stock Purchase Right shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Stock Purchase Agreement. Stock
Purchase Agreements may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:

            7.1   PURCHASE PRICE. The purchase price under each Stock Purchase
Right shall be established by the Board; provided, however, that (a) the
purchase price per share shall be at least eighty-five percent (85%) of the Fair
Market Value of a share of Stock either on the effective date of grant of the
Stock Purchase Right or on the date on which the purchase is consummated and (b)
the purchase price per share under a Stock Purchase Right granted to a Ten
Percent Shareholder shall be at least one hundred percent (100%) of the Fair
Market Value of a share of Stock either on the effective date of grant of the
Stock Purchase Right or on the date on which the purchase is consummated.

            7.2   PURCHASE PERIOD. A Stock Purchase Right shall be exercisable
within a period established by the Board, which shall in no event exceed thirty
(30) days from the effective date of the grant of the Stock Purchase Right.

            7.3   PAYMENT OF PURCHASE PRICE. Except as otherwise provided below,
payment of the purchase price for the number of shares of Stock being purchased
pursuant to any Stock Purchase Right shall be made (a) in cash, by check, or
cash equivalent, (b) in the form of the Participant's past service rendered to a
Participating Company or for its benefit having a value not less than the
aggregate purchase price of the shares being acquired, (c) by such other
consideration as may be approved by the Board from time to time to the extent
permitted by applicable law, or (d) by any combination thereof. The Board may at
any time or from time to time, by adoption of or by amendment to the standard
form of Stock Purchase Agreement described in Section 8, or by other means,
grant Stock Purchase Rights which do not permit all of the foregoing forms of
consideration to be used in payment of the purchase price or which otherwise
restrict one or more forms of consideration.

                                       12
<PAGE>

            7.4   VESTING AND RESTRICTIONS ON TRANSFER. Shares issued pursuant
to any Stock Purchase Right may or may not be made subject to vesting
conditioned upon the satisfaction of such Service requirements, conditions,
restrictions or performance criteria (the "VESTING CONDITIONS") as shall be
established by the Board and set forth in the Stock Purchase Agreement
evidencing such Award. During any period (the "RESTRICTION PERIOD") in which
shares acquired pursuant to a Stock Purchase Right remain subject to Vesting
Conditions, such shares may not be sold, exchanged, transferred, pledged,
assigned or otherwise disposed of other than pursuant to an Ownership Change
Event, as defined in Section 9.1, or as provided in Section 7.5. Upon request by
the Company, each Participant shall execute any agreement evidencing such
transfer restrictions prior to the receipt of shares of Stock hereunder and
shall promptly present to the Company any and all certificates representing
shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.

            7.5   EFFECT OF TERMINATION OF SERVICE. Unless otherwise provided by
the Board in the grant of a Stock Purchase Right and set forth in the Stock
Purchase Agreement, if a Participant's Service terminates for any reason,
whether voluntary or involuntary (including the Participant's death or
disability), then the Company shall have the option to repurchase for the
purchase price paid by the Participant any shares acquired by the Participant
pursuant to a Stock Purchase Right which remain subject to Vesting Conditions as
of the date of the Participant's termination of Service; provided, however, that
with the exception of shares acquired pursuant to a Stock Purchase Right by an
Officer, a Director or a Consultant, the Company's repurchase option must lapse
at the rate of at least twenty percent (20%) of the shares per year over the
period of five (5) years from the effective date of grant of the Stock Purchase
Right (without regard to the date on which the Stock Purchase Right was
exercised) and the repurchase option must be exercised, if at all, for cash or
cancellation of purchase money indebtedness for the shares within ninety (90)
days following the Participant's termination of Service. The Company shall have
the right to assign at any time any repurchase right it may have, whether or not
such right is then exercisable, to one or more persons as may be selected by the
Company.

            7.6   NONTRANSFERABILITY OF STOCK PURCHASE RIGHTS. Rights to acquire
shares of Stock pursuant to a Stock Purchase Right may not be assigned or
transferred in any manner except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, shall be exercisable
only by the Participant.

      8.    STANDARD FORMS OF AGREEMENTS.

            8.1   OPTION AGREEMENT. Unless otherwise provided by the Board at
the time the Option is granted, an Option shall comply with and be subject to
the terms and conditions set forth in the form of Option Agreement approved by
the Board concurrently with its adoption of the Plan and as amended from time to
time.

                                       13
<PAGE>

            8.2   STOCK PURCHASE AGREEMENT. Unless otherwise provided by the
Board at the time the Stock Purchase Right is granted, a Stock Purchase Right
shall be subject to the terms and conditions set forth in the form of Stock
Purchase Agreement approved by the Board concurrently with its adoption of the
Plan and as amended from time to time.

            8.3   AUTHORITY TO VARY TERMS. The Board shall have the authority
from time to time to vary the terms of any standard form of agreement described
in this Section 8 either in connection with the grant or amendment of an
individual Award or in connection with the authorization of a new standard form
or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of agreement are not inconsistent with
the terms of the Plan.

      9.    CHANGE IN CONTROL.

            9.1   DEFINITIONS.

                  (a)   An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the shareholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or (iv) a liquidation or
dissolution of the Company.

                  (b)   A "CHANGE IN CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, a
"TRANSACTION") wherein the shareholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of a Transaction
described in Section 9.1(a)(iii), the corporation or other business entity to
which the assets of the Company were transferred (the "TRANSFEREE"), as the case
may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the
voting securities of one or more corporations or other business entities which
own the Company or the Transferee, as the case may be, either directly or
through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of
the voting securities of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

            9.2   EFFECT OF CHANGE IN CONTROL ON OPTIONS.

                  (a)   ACCELERATED VESTING. Notwithstanding any other provision
of the Plan to the contrary, the Board, in its sole discretion, may provide in
any Award Agreement or, in the event of a Change in Control, may take such
actions as it deems appropriate to provide for the acceleration of the
exercisability and vesting in connection with such Change in Control of any or
all outstanding Options and shares acquired upon the exercise of such Options.

                                       14
<PAGE>

                  (b)   ASSUMPTION OF OPTIONS. In the event of a Change in
Control, the surviving, continuing, successor, or purchasing corporation or
other business entity or parent thereof, as the case may be (the "ACQUIROR"),
may, without the consent of any Participant, either assume the Company's rights
and obligations under outstanding Options or substitute for outstanding Options
substantially equivalent options for the Acquiror's stock. In the event that the
Acquiror elects not to assume or substitute for outstanding Options in
connection with a Change in Control, the exercisability and vesting of each such
outstanding Option held by a Participant whose Service has not terminated prior
to such date shall be accelerated, effective as of the date ten (10) days prior
to the date of the Change in Control. Any Options which are neither assumed by
the Acquiror in connection with the Change in Control nor exercised as of the
date of the Change in Control shall terminate and cease to be outstanding
effective as of the date of the Change in Control. Notwithstanding the
foregoing, shares acquired upon exercise of an Option prior to the Change in
Control and any consideration received pursuant to the Change in Control with
respect to such shares shall continue to be subject to all applicable provisions
of the Award Agreement evidencing such Option except as otherwise provided in
such Award Agreement. Furthermore, notwithstanding the foregoing, if the
corporation the stock of which is subject to the outstanding Options immediately
prior to an Ownership Change Event described in Section 9.1(a)(i) constituting a
Change in Control is the surviving or continuing corporation and immediately
after such Ownership Change Event less than fifty percent (50%) of the total
combined voting power of its voting stock is held by another corporation or by
other corporations that are members of an affiliated group within the meaning of
Section 1504(a) of the Code without regard to the provisions of Section 1504(b)
of the Code, the outstanding Options shall not terminate unless the Board
otherwise provides in its discretion.

                  (c)   CASH-OUT OF OPTIONS. The Board may, in its sole
discretion and without the consent of any Participant, determine that, upon the
occurrence of a Change in Control, each or any Option outstanding immediately
prior to the Change in Control shall be canceled in exchange for a payment with
respect to each vested share of Stock subject to such canceled Option in (i)
cash, (ii) stock of the Company or of a corporation or other business entity a
party to the Change in Control, or (iii) other property which, in any such case,
shall be in an amount having a Fair Market Value equal to the Fair Market Value
of the consideration to be paid per share of Stock in the Change in Control over
the exercise price per share under such Option (the "SPREAD"). In the event such
determination is made by the Board, the Spread (reduced by applicable
withholding taxes, if any) shall be paid to Participants in respect of their
canceled Options as soon as practicable following the date of the Change in
Control.

      9.3   EFFECT OF CHANGE IN CONTROL ON STOCK PURCHASE RIGHT. In the event of
a Change in Control, the Acquiror, may, without the consent of any Participant,
either assume the Company's rights and obligations under outstanding Stock
Purchase Rights or substitute for outstanding Stock Purchase Rights
substantially equivalent purchase rights for the Acquiror's stock. Any Stock
Purchase Rights which are neither assumed or substituted for by the Acquiror in
connection with the Change in Control nor exercised as of the date of the Change
in Control shall terminate and cease to be outstanding effective as of the date
of the Change in Control. Notwithstanding the foregoing, shares acquired upon
exercise of a Stock Purchase Right prior to the Change in Control and any
consideration received pursuant to the Change in Control with respect to such
shares shall continue to be subject to all applicable provisions of the Stock
Purchase Agreement evidencing such Stock Purchase Right except as otherwise

                                       15
<PAGE>

provided in such Stock Purchase Agreement. Furthermore, notwithstanding the
foregoing, if the corporation the stock of which is subject to the outstanding
Stock Purchase Rights immediately prior to an Ownership Change Event described
in Section 9.1(a)(i) constituting a Change in Control is the surviving or
continuing corporation and immediately after such Ownership Change Event less
than fifty percent (50%) of the total combined voting power of its voting stock
is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the outstanding Stock
Purchase Rights shall not terminate unless the Board otherwise provides in its
discretion.

            9.4   FEDERAL EXCISE TAX UNDER SECTION 4999 OF THE CODE.

                  (a)   EXCESS PARACHUTE PAYMENT. In the event that any
acceleration of vesting pursuant to an Award and any other payment or benefit
received or to be received by a Participant would subject the Participant to any
excise tax pursuant to Section 4999 of the Code due to the characterization of
such acceleration of vesting, payment or benefit as an "excess parachute
payment" under Section 280G of the Code, the Participant may elect, in his or
her sole discretion, to reduce the amount of any acceleration of vesting called
for under the Award in order to avoid such characterization.

                  (b)   DETERMINATION BY INDEPENDENT ACCOUNTANTS. To aid the
Participant in making any election called for under Section 9.4(a), no later
than the date of the occurrence of any event that might reasonably be
anticipated to result in an "excess parachute payment" to the Participant as
described in Section 9.4(a), the Company shall request a determination in
writing by independent public accountants selected by the Company (the
"ACCOUNTANTS"). As soon as practicable thereafter, the Accountants shall
determine and report to the Company and the Participant the amount of such
acceleration of vesting, payments and benefits which would produce the greatest
after-tax benefit to the Participant. For the purposes of such determination,
the Accountants may rely on reasonable, good faith interpretations concerning
the application of Sections 280G and 4999 of the Code. The Company and the
Participant shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make their required
determination. The Company shall bear all fees and expenses the Accountants may
reasonably charge in connection with their services contemplated by this Section
9.4(b).

      10.   TAX WITHHOLDING.

            10.1  TAX WITHHOLDING IN GENERAL. The Company shall have the right
to deduct from any and all payments made under the Plan, or to require the
Participant, through payroll withholding, cash payment or otherwise, including
by means of a Cashless Exercise of an Option, to make adequate provision for,
the federal, state, local and foreign taxes, if any, required by law to be
withheld by the Participating Company Group with respect to an Award or the
shares acquired pursuant thereto. The Company shall have no obligation to
deliver shares of Stock or to release shares of Stock from an escrow established
pursuant to an Option Agreement or Stock Purchase Agreement until the
Participating Company Group's tax withholding obligations have been satisfied by
the Participant.

                                       16
<PAGE>

            10.2  WITHHOLDING IN SHARES. The Company shall have the right, but
not the obligation, to deduct from the shares of Stock issuable to a Participant
upon the exercise of an Award, or to accept from the Participant the tender of,
a number of whole shares of Stock having a Fair Market Value, as determined by
the Company, equal to all or any part of the tax withholding obligations of the
Participating Company Group. The Fair Market Value of any shares of Stock
withheld or tendered to satisfy any such tax withholding obligations shall not
exceed the amount determined by the applicable minimum statutory withholding
rates.

      11.   COMPLIANCE WITH SECURITIES LAW.

            The grant of Awards and the issuance of shares of Stock upon
exercise of Awards shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities.
Awards may not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Stock may then be listed. In addition,
no Award may be exercised unless (a) a registration statement under the
Securities Act shall at the time of exercise of the Award be in effect with
respect to the shares issuable upon exercise of the Award or (b) in the opinion
of legal counsel to the Company, the shares issuable upon exercise of the Award
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of any
Award, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect
thereto as may be requested by the Company.

      12.   TERMINATION OR AMENDMENT OF PLAN.

            The Board may terminate or amend the Plan at any time. However,
subject to changes in applicable law, regulations or rules that would permit
otherwise, without the approval of the Company's shareholders, there shall be
(a) no increase in the maximum aggregate number of shares of Stock that may be
issued under the Plan (except by operation of the provisions of Section 4.2),
(b) no change in the class of persons eligible to receive Incentive Stock
Options, and (c) no other amendment of the Plan that would require approval of
the Company's shareholders under any applicable law, regulation or rule. No
termination or amendment of the Plan shall affect any then outstanding Award
unless expressly provided by the Board. In any event, no termination or
amendment of the Plan may adversely affect any then outstanding Award without
the consent of the Participant, unless such termination or amendment is required
to enable an Option designated as an Incentive Stock Option to qualify as an
Incentive Stock Option or is necessary to comply with any applicable law,
regulation or rule.

                                       17
<PAGE>

      13.   MISCELLANEOUS PROVISIONS.

            13.1  REPURCHASE RIGHTS. Shares issued under the Plan may be subject
to a right of first refusal, one or more repurchase options, or other conditions
and restrictions as determined by the Board in its discretion at the time the
Award is granted. The Company shall have the right to assign at any time any
repurchase right it may have, whether or not such right is then exercisable, to
one or more persons as may be selected by the Company. Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.

            13.2  PROVISION OF INFORMATION. At least annually, copies of the
Company's balance sheet and income statement for the just completed fiscal year
shall be made available to each Participant and purchaser of shares of Stock
upon the exercise of an Award. The Company shall not be required to provide such
information to key employees whose duties in connection with the Company assure
them access to equivalent information. Furthermore, the Company shall deliver to
each Participant such disclosures as are required in accordance with Rule 701
under the Securities Act.

            13.3  SHAREHOLDER APPROVAL. The Plan or any increase in the maximum
aggregate number of shares of Stock issuable thereunder as provided in Section
4.1 (the "AUTHORIZED SHARES") shall be approved by a majority of the outstanding
securities of the Company entitled to vote within twelve (12) months before or
after the date of adoption thereof by the Board. Awards granted prior to
security holder approval of the Plan or in excess of the Authorized Shares
previously approved by the security holders shall become exercisable no earlier
than the date of security holder approval of the Plan or such increase in the
Authorized Shares, as the case may be.

                                       18
<PAGE>

                                  PLAN HISTORY
                                  ------------

May 21, 2004                 Board adopts Plan, with an initial reserve of
                             10,000,000 shares.

________________, 2004       Shareholders of the Company approve Plan.

                                       19
<PAGE>

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT.

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.

                           HALOZYME THERAPEUTICS, INC.
                             STOCK OPTION AGREEMENT
                          (Double Trigger Acceleration)

      Halozyme   Therapeutics,   Inc.  has  granted  to  the   individual   (the
"Participant")  named in the Notice of Grant of Stock  Option (the  "Notice") to
which this Stock Option Agreement (the "Option Agreement") is attached an option
(the "Option") to purchase certain shares of Stock upon the terms and conditions
set forth in the Notice and this Option  Agreement.  The Option has been granted
pursuant to and shall in all respects be subject to the terms and  conditions of
the Halozyme Therapeutics,  Inc. 2004 Stock Plan (the "Plan"), as amended to the
Date of  Option  Grant,  the  provisions  of which  are  incorporated  herein by
reference.  By signing the Notice,  the  Participant:  (a)  represents  that the
Participant  has received copies of, and has read and is familiar with the terms
and conditions of, the Notice,  the Plan and this Option Agreement,  (b) accepts
the Option  subject to all of the terms and  conditions of the Notice,  the Plan
and this Option Agreement,  and (c) agrees to accept as binding,  conclusive and
final all decisions or  interpretations  of the Board upon any questions arising
under the Notice, the Plan or this Option Agreement.

      1. DEFINITIONS AND CONSTRUCTION.

            1.1 Definitions.  Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Notice or the Plan.

            1.2  Construction.  Captions  and  titles  contained  herein are for
convenience  only and shall not affect  the  meaning  or  interpretation  of any
provision  of this Option  Agreement.  Except when  otherwise  indicated  by the
context,  the singular shall include the plural and the plural shall include the
singular.  Use of the term "or" is not  intended  to be  exclusive,  unless  the
context clearly requires otherwise.

                                       20
<PAGE>

      2. TAX CONSEQUENCES.

            2.1 Tax Status of Option.  This  Option is  intended to have the tax
status designated in the Notice.

                  (a) Incentive Stock Option. If the Notice so designates,  this
Option is intended to be an Incentive Stock Option within the meaning of Section
422(b) of the Code,  but the Company  does not  represent  or warrant  that this
Option qualifies as such. The Participant  should consult with the Participant's
own tax advisor  regarding  the tax effects of this Option and the  requirements
necessary to obtain  favorable  income tax  treatment  under  Section 422 of the
Code,  including,  but not limited to,  holding  period  requirements.  (NOTE TO
PARTICIPANT:  If the Option is  exercised  more than three (3) months  after the
date on which you cease to be an Employee (other than by reason of your death or
permanent and total  disability as defined in Section 22(e)(3) of the Code), the
Option will be treated as a  Nonstatutory  Stock  Option and not as an Incentive
Stock Option to the extent required by Section 422 of the Code.)

                  (b)  Nonstatutory  Stock Option.  If the Notice so designates,
this  Option is  intended  to be a  Nonstatutory  Stock  Option and shall not be
treated as an Incentive Stock Option within the meaning of Section 422(b) of the
Code.

            2.2 ISO Fair Market Value Limitation.  If the Notice designates this
Option  as an  Incentive  Stock  Option,  then to the  extent  that  the  Option
(together with all Incentive Stock Options granted to the Participant  under all
stock option  plans of the  Participating  Company  Group,  including  the Plan)
becomes  exercisable  for the first  time  during any  calendar  year for shares
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the  portion  of such  options  which  exceeds  such  amount  will be treated as
Nonstatutory Stock Options. For purposes of this Section 2.2, options designated
as  Incentive  Stock  Options are taken into  account in the order in which they
were  granted,  and the Fair Market Value of stock is  determined as of the time
the option  with  respect to such  stock is  granted.  If the Code is amended to
provide for a different limitation from that set forth in this Section 2.2, such
different  limitation  shall be deemed  incorporated  herein effective as of the
date  required or  permitted  by such  amendment  to the Code.  If the Option is
treated as an Incentive Stock Option in part and as a Nonstatutory  Stock Option
in  part by  reason  of the  limitation  set  forth  in this  Section  2.2,  the
Participant  may  designate  which  portion of such  Option the  Participant  is
exercising. In the absence of such designation,  the Participant shall be deemed
to have  exercised  the  Incentive  Stock  Option  portion of the Option  first.
Separate  certificates  representing  each such portion shall be issued upon the
exercise of the Option. (NOTE TO PARTICIPANT: If the aggregate Exercise Price of
the  Option  (that is, the  Exercise  Price  multiplied  by the Number of Option
Shares) plus the aggregate  exercise price of any other  Incentive Stock Options
you hold (whether granted pursuant to the Plan or any other stock option plan of
the  Participating  Company Group) is greater than $100,000,  you should contact
the Chief  Financial  Officer of the  Company to  ascertain  whether  the entire
Option qualifies as an Incentive Stock Option.)

                                       21
<PAGE>

      3. ADMINISTRATION.

      All questions of interpretation  concerning this Option Agreement shall be
determined by the Board.  All  determinations  by the Board t 6 0 shall be final
and binding upon all persons having an interest in the Option. Any Officer shall
have the  authority  to act on behalf of the Company with respect to any matter,
right,  obligation,  or  election  which  is the  responsibility  of or which is
allocated to the Company  herein,  provided  the Officer has apparent  authority
with respect to such matter, right, obligation, or election.

      4. EXERCISE OF THE OPTION.

            4.1 Right to Exercise.  Except as  otherwise  provided  herein,  the
Option shall be exercisable  on and after the Initial  Vesting Date and prior to
the  termination  of the Option (as  provided  in Section 6) in an amount not to
exceed the number of Vested Shares less the number of shares previously acquired
upon  exercise of the Option,  subject to the  Company's  repurchase  rights set
forth in Section 11. In no event shall the Option be exercisable for more shares
than the Number of Option Shares, as adjusted pursuant to Section 9.

            4.2 Method of  Exercise.  Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option,  the
number of whole shares of Stock for which the Option is being exercised and such
other  representations and agreements as to the Participant's  investment intent
with  respect to such shares as may be required  pursuant to the  provisions  of
this Option Agreement.  The written notice must be signed by the Participant and
must be delivered in person,  by certified or registered  mail,  return  receipt
requested,  by confirmed facsimile  transmission,  or by such other means as the
Company may permit,  to the Chief  Financial  Officer of the  Company,  or other
authorized  representative  of the  Participating  Company  Group,  prior to the
termination of the Option as set forth in Section 6, accompanied by full payment
of the  aggregate  Exercise  Price  for the  number  of  shares  of Stock  being
purchased.  The  Option  shall be deemed to be  exercised  upon  receipt  by the
Company of such written notice and the aggregate Exercise Price.

            4.3 Payment of Exercise Price.

                  (a) Forms of  Consideration  Authorized.  Except as  otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being  exercised  shall be made (i) in cash, by
check, or cash equivalent,  (ii) by tender to the Company, or attestation to the
ownership,  of whole  shares  of Stock  owned by the  Participant  having a Fair
Market Value not less than the  aggregate  Exercise  Price,  (iii) by means of a
Cashless  Exercise,  as defined in Section 4.3(b), or (iv) by any combination of
the foregoing.

                  (b) Limitations on Forms of Consideration.

                        (i) Tender of Stock. Notwithstanding the foregoing, the
Option may not be  exercised  by tender to the Company,  or  attestation  to the
ownership,  of shares of Stock to the extent  such tender or  attestation  would
constitute a violation of the  provisions  of any law,  regulation  or agreement
restricting  the  redemption  of the  Company's  stock.  The  Option  may not be
exercised by tender to the Company,  or attestation to the ownership,  of shares
of Stock unless such shares either have been owned by the  Participant  for more
than six (6) months (and not used for  another  option  exercise by  attestation
during  such  period) or were not  acquired,  directly or  indirectly,  from the
Company.

                                       22
<PAGE>

                        (ii)  Cashless  Exercise. A  "Cashless  Exercise"  means
the  delivery  of  a  properly   executed  notice   together  with   irrevocable
instructions to a broker in a form  acceptable to the Company  providing for the
assignment to the Company of the proceeds of a sale or loan with respect to some
or all of the shares of Stock acquired upon the exercise of the Option  pursuant
to  a  program  or  procedure  approved  by  the  Company  (including,   without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated  from time to time by the Board of Governors of the Federal  Reserve
System). The Company reserves, at any and all times, the right, in the Company's
sole and  absolute  discretion,  to decline to  approve  or  terminate  any such
program or procedure.

            4.4 Tax Withholding.  At the time the Option is exercised,  in whole
or in  part,  or at  any  time  thereafter  as  requested  by the  Company,  the
Participant  hereby  authorizes  withholding  from payroll and any other amounts
payable to the Participant,  and otherwise agrees to make adequate provision for
(including  by means of a  Cashless  Exercise  to the  extent  permitted  by the
Company), any sums required to satisfy the federal, state, local and foreign tax
withholding  obligations of the Participating Company Group, if any, which arise
in  connection  with the  Option,  including,  without  limitation,  obligations
arising upon (i) the  exercise,  in whole or in part,  of the Option or (ii) the
transfer,  in whole or in part,  of any shares  acquired  upon  exercise  of the
Option. The Option is not exercisable unless the tax withholding  obligations of
the Participating  Company Group are satisfied.  Accordingly,  the Company shall
have no  obligation  to  deliver  shares  of  Stock  until  the tax  withholding
obligations  of the  Participating  Company  Group  have been  satisfied  by the
Participant.

            4.5 Certificate Registration. Except in the event the Exercise Price
is paid by means of a Cashless  Exercise,  the  certificate for the shares as to
which  the  Option  is  exercised  shall  be  registered  in  the  name  of  the
Participant, or, if applicable, in the names of the heirs of the Participant.

            4.6 Restrictions on Grant of the Option and Issuance of Shares.  The
grant of the Option and the  issuance  of shares of Stock upon  exercise  of the
Option  shall be subject  to  compliance  with all  applicable  requirements  of
federal,  state or foreign law with respect to such  securities.  The Option may
not be  exercised  if the  issuance  of  shares  of Stock  upon  exercise  would
constitute a violation of any applicable  federal,  state or foreign  securities
laws or other law or  regulations or the  requirements  of any stock exchange or
market system upon which the Stock may then be listed.  In addition,  the Option
may not be exercised  unless (i) a registration  statement  under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares  issuable  upon  exercise  of the Option or (ii) in the  opinion of legal
counsel to the Company,  the shares  issuable upon exercise of the Option may be
issued  in  accordance  with  the  terms  of an  applicable  exemption  from the
registration  requirements  of the Securities  Act. THE PARTICIPANT IS CAUTIONED

                                       23
<PAGE>

THAT THE  OPTION  MAY NOT BE  EXERCISED  UNLESS  THE  FOREGOING  CONDITIONS  ARE
SATISFIED.  ACCORDINGLY,  THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  The  inability of the Company to
obtain from any  regulatory  body having  jurisdiction  the  authority,  if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares  subject  to the  Option  shall  relieve  the  Company of any
liability  in  respect of the  failure to issue or sell such  shares as to which
such requisite  authority  shall not have been  obtained.  As a condition to the
exercise of the Option,  the Company may require the  Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.

            4.7  Fractional  Shares.  The Company shall not be required to issue
fractional shares upon the exercise of the Option.

      5. NONTRANSFERABILITY OF THE OPTION.

      The Option may be exercised during the lifetime of the Participant only by
the Participant or the Participant's  guardian or legal  representative  and may
not be assigned or  transferred  in any manner  except by will or by the laws of
descent and distribution. Following the death of the Participant, the Option, to
the extent  provided in Section 7, may be exercised by the  Participant's  legal
representative  or  by  any  person  empowered  to  do  so  under  the  deceased
Participant's   will  or  under  the  then   applicable   laws  of  descent  and
distribution.

      6. TERMINATION OF THE OPTION.

      The Option shall  terminate and may no longer be exercised after the first
to occur of (a) the close of business  on the Option  Expiration  Date,  (b) the
close  of  business  on the  last  date  for  exercising  the  Option  following
termination  of the  Participant's  Service as  described in Section 7, or (c) a
Change in Control to the extent provided in Section 8.

      7. EFFECT OF TERMINATION OF SERVICE.

            7.1 Option Exercisability.

                  (a)  Disability.   If  the  Participant's  Service  terminates
because  of the  Disability  of  the  Participant,  the  Option,  to the  extent
unexercised  and  exercisable  on the date on which  the  Participant's  Service
terminated,  may be exercised by the Participant (or the Participant's  guardian
or legal  representative)  at any time prior to the  expiration  of twelve  (12)
months after the date on which the Participant's Service terminated,  but in any
event no later than the Option Expiration Date.

                  (b) Death. If the Participant's  Service terminates because of
the  death  of the  Participant,  the  Option,  to the  extent  unexercised  and
exercisable on the date on which the Participant's  Service  terminated,  may be
exercised by the Participant's legal representative or other person who acquired
the right to  exercise  the Option by reason of the  Participant's  death at any
time prior to the  expiration  of twelve (12) months after the date on which the
Participant's  Service  terminated,  but in any event no later  than the  Option
Expiration Date. The Participant's Service shall be deemed to have terminated on
account of death if the  Participant  dies  within  three (3)  months  after the
Participant's termination of Service.

                                       24
<PAGE>

                  (c) Termination for Cause. Notwithstanding any other provision
of this Option Agreement,  if the Participant's  Service is terminated for Cause
(as defined  below),  the Option shall  terminate and cease to be exercisable on
the effective date of such termination of Service.

                  (d) Termination After Change in Control.  If the Participant's
Service  ceases as a result of  Termination  After Change in Control (as defined
below), (i) the Option, to the extent unexercised and exercisable on the date on
which the Participant's Service terminated,  may be exercised by the Participant
(or the Participant's guardian or legal representative) at any time prior to the
expiration of six (6) months after the date on which the  Participant's  Service
terminated,  but in any event no later than the Option Expiration Date, and (ii)
the Option  shall  become  immediately  vested and  exercisable  in full and the
Vested Ratio shall be deemed to be 1/1 as of the date on which the Participant's
Service terminated.

                  (e) Other Termination of Service. If the Participant's Service
with  the  Participating   Company  Group  terminates  for  any  reason,  except
Disability,  death, Termination After Change in Control or Cause, the Option, to
the extent  unexercised  and exercisable by the Participant on the date on which
the Participant's Service terminated, may be exercised by the Participant at any
time prior to the expiration of three (3) months (or such other longer period of
time as determined by the Board, in its discretion)  after the date on which the
Participant's  Service  terminated,  but in any event no later  than the  Option
Expiration Date.

            7.2  Extension  if Exercise  Prevented by Law.  Notwithstanding  the
foregoing other than termination for Cause, if the exercise of the Option within
the  applicable  time  periods  set forth in  Section  7.1 is  prevented  by the
provisions of Section 4.6, the Option shall remain exercisable until thirty (30)
days after the date the  Participant  is notified by the Company that the Option
is exercisable, but in any event no later than the Option Expiration Date.

            7.3   Extension   if   Participant   Subject   to   Section   16(b).
Notwithstanding the foregoing other than termination for Cause, if a sale within
the applicable time periods set forth in Section 7.1 of shares acquired upon the
exercise of the Option would subject the Participant to suit under Section 16(b)
of the Exchange Act, the Option shall remain  exercisable  until the earliest to
occur of (i) the tenth  (10th)  day  following  the date on which a sale of such
shares by the Participant  would no longer be subject to such suit, (ii) the one
hundred  and  ninetieth  (190th)  day after  the  Participant's  termination  of
Service, or (iii) the Option Expiration Date.

            7.4 Certain Definitions.

                  (a) "Termination After Change in Control" shall mean either of
the  following  events  occurring  within  twelve (12) months  after a Change in
Control:

                                       25
<PAGE>

                  (i)  termination  by the  Participating  Company  Group of the
Participant's  Service with the Participating Company Group for any reason other
than for Cause (as defined below); or

                  (ii) the Participant's resignation for Good Reason (as defined
below) from all capacities in which the Participant is then rendering Service to
the Participating Company Group within a reasonable period of time following the
event constituting Good Reason.

Notwithstanding  any provision herein to the contrary,  Termination After Change
in Control shall not include any termination of the  Participant's  Service with
the  Participating  Company Group which (1) is for Cause; (2) is a result of the
Participant's  death  or  disability;  (3)  is a  result  of  the  Participant's
voluntary termination of Service other than for Good Reason; or (4) occurs prior
to the effectiveness of a Change in Control.

                  (b) "Good Reason" shall mean any one or more of the following:

      (i) without the Participant's  express written consent,  the assignment to
the  Participant  of  any  duties,   or  any  limitation  of  the  Participant's
responsibilities,  substantially  inconsistent with the Participant's positions,
duties,  responsibilities  and  status  with  the  Participating  Company  Group
immediately prior to the date of the Change in Control;

      (ii) without the Participant's  express written consent, the relocation of
the principal place of the Participant's Service to a location that is more than
fifty (50) miles from the Participant's  principal place of Service  immediately
prior  to the  date of the  Change  in  Control,  or the  imposition  of  travel
requirements  substantially  more demanding of the Participant  than such travel
requirements existing immediately prior to the date of the Change in Control;

      (iii)  any  failure  by the  Participating  Company  Group to pay,  or any
material reduction by the Participating  Company Group of, (1) the Participant's
base  salary in effect  immediately  prior to the date of the  Change in Control
(unless  reductions  comparable in amount and duration are concurrently made for
all other employees of the  Participating  Company Group with  responsibilities,
organizational  level and title  comparable  to the  Participant's),  or (2) the
Participant's  bonus  compensation,  if any, in effect  immediately prior to the
date of the Change in Control  (subject to applicable  performance  requirements
with  respect  to  the  actual  amount  of  bonus  compensation  earned  by  the
Participant); or

      (iv) any failure by the  Participating  Company  Group to (1)  continue to
provide the Participant  with the  opportunity to participate,  on terms no less
favorable  than  those in effect  for the  benefit  of any  employee  or service
provider  group which  customarily  includes a person  holding the employment or
service  provider  position  or a  comparable  position  with the  Participating
Company Group then held by the Participant, in any benefit or compensation plans
and programs,  including,  but not limited to, the Participating Company Group's
life,  disability,  health,  dental,  medical,  savings,  profit sharing,  stock
purchase  and  retirement   plans,   if  any,  in  which  the   Participant  was
participating  immediately prior to the date of the Change in Control,  or their
equivalent,  or (2) provide the  Participant  with all other fringe benefits (or
their equivalent) from time to time in effect for the benefit of any employee or
service  provider  group  which  customarily   includes  a  person  holding  the
employment  or service  provider  position  or a  comparable  position  with the
Participating Company Group then held by the Participant.

                                       26
<PAGE>

      8. EFFECT OF CHANGE IN CONTROL.

            8.1 Assumption of Options. In the event of a Change in Control,  the
surviving,  continuing,  successor,  or purchasing corporation or other business
entity or parent thereof, as the case may be (the "Acquiror"),  may, without the
consent of the  Participant,  either assume the Company's rights and obligations
under outstanding  Options or substitute for outstanding  Options  substantially
equivalent  options for the  Acquiror's  stock.  In the event that the  Acquiror
elects not to assume or substitute for outstanding  Options in connection with a
Change in  Control,  the  exercisability  and  vesting of each such  outstanding
Option  held by the  Participant,  provided  the  Participant's  Service has not
terminated  prior to such date shall be 100%  accelerated,  effective  as of the
date ten (10) days prior to the date of the Change in Control. Any Options which
are neither assumed by the Acquiror in connection with the Change in Control nor
exercised as of the date of the Change in Control  shall  terminate and cease to
be   outstanding   effective   as  of  the  date  of  the  Change  in   Control.
Notwithstanding the foregoing,  shares acquired upon exercise of an Option prior
to the Change in Control and any  consideration  received pursuant to the Change
in Control  with  respect to such  shares  shall  continue  to be subject to all
applicable provisions of this Option Agreement. Furthermore, notwithstanding the
foregoing,  if the  corporation the stock of which is subject to the outstanding
Options  immediately  prior to an Ownership  Change  Event  described in Section
9.1(a)(i)  of the Plan  constituting  a Change in  Control is the  surviving  or
continuing  corporation and immediately  after such Ownership  Change Event less
than fifty percent (50%) of the total combined  voting power of its voting stock
is held by another  corporation or by other  corporations that are members of an
affiliated  group  within the  meaning of  Section  1504(a) of the Code  without
regard to the provisions of Section 1504(b) of the Code, the outstanding Options
shall not terminate unless the Board otherwise provides in its discretion.

            8.2 Cash-Out of Options.  The Board may, in its sole  discretion and
without the consent of the Participant, determine that, upon the occurrence of a
Change in  Control,  each or any  Option  outstanding  immediately  prior to the
Change in Control  shall be canceled in exchange  for a payment  with respect to
each vested share of Stock  subject to such  canceled  Option in (i) cash,  (ii)
stock of the Company or of a corporation or other business entity a party to the
Change in Control,  or (iii) other property which, in any such case, shall be in
an amount  having a Fair  Market  Value  equal to the Fair  Market  Value of the
consideration  to be paid per share of Stock in the Change in  Control  over the
exercise  price per share under such Option  (the  "Spread").  In the event such
determination   is  made  by  the  Board,  the  Spread  (reduced  by  applicable
withholding  taxes,  if any) shall be paid to the  Participant in respect of his
canceled  Options  as soon as  practicable  following  the date of the Change in
Control.

                                       27
<PAGE>

      9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

      Subject to any required action by the shareholders of the Company,  in the
event of any change in the Stock effected  without receipt of  consideration  by
the   Company,   whether   through   merger,   consolidation,    reorganization,
reincorporation,  recapitalization,   reclassification,  stock  dividend,  stock
split,  reverse  stock split,  split-up,  split-off,  spin-off,  combination  of
shares,  exchange of shares,  or similar change in the capital  structure of the
Company,  or in the  event of  payment  of a  dividend  or  distribution  to the
shareholders  of the Company in a form other than Stock  (excepting  normal cash
dividends)  that has a  material  effect on the Fair  Market  Value of shares of
Stock,  appropriate and  proportionate  adjustments shall be made in the number,
Exercise  Price and class of shares  subject to the Option,  in order to prevent
dilution or  enlargement  of the  Participant's  rights  under the  Option.  For
purposes of the  foregoing,  conversion  of any  convertible  securities  of the
Company shall not be treated as "effected  without receipt of  consideration  by
the Company." Any fractional share resulting from an adjustment pursuant to this
Section 9 shall be rounded down to the nearest whole number, and in no event may
the  purchase  price of the Option be  decreased  to an amount less than the par
value,  if any, of the stock subject to the Option.  Such  adjustments  shall be
determined  by the Board,  and its  determination  shall be final,  binding  and
conclusive.

      10. RIGHTS AS A SHAREHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.

      The Participant  shall have no rights as a shareholder with respect to any
shares covered by the Option until the date of the issuance of a certificate for
the  shares  for  which the  Option  has been  exercised  (as  evidenced  by the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the Company). No adjustment shall be made for dividends,  distributions
or other rights for which the record date is prior to the date such  certificate
is issued,  except as provided in Section 9. If the  Participant is an Employee,
the Participant  understands and acknowledges that, except as otherwise provided
in a separate,  written employment agreement between a Participating Company and
the  Participant,  the  Participant's  employment  is  "at  will"  and is for no
specified  term.  Nothing  in  this  Option  Agreement  shall  confer  upon  the
Participant any right to continue in the Service of a  Participating  Company or
interfere  in any way  with  any  right of the  Participating  Company  Group to
terminate the Participant's Service as a Director, an Employee or Consultant, as
the case may be, at any time.

      11. NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.

      The  Participant  shall  dispose of the shares  acquired  pursuant  to the
Option only in  accordance  with the  provisions  of this Option  Agreement.  In
addition, if the Notice designates this Option as an Incentive Stock Option, the
Participant shall (a) promptly notify the Chief Financial Officer of the Company
if the Participant disposes of any of the shares acquired pursuant to the Option
within one (1) year after the date the Participant  exercises all or part of the
Option or within two (2) years  after the Date of Option  Grant and (b)  provide
the Company with a description of the circumstances of such  disposition.  Until
such time as the Participant disposes of such shares in a manner consistent with
the provisions of this Option Agreement,  unless otherwise expressly  authorized
by the Company,  the Participant  shall hold all shares acquired pursuant to the
Option in the  Participant's  name (and not in the name of any  nominee) for the
one-year  period  immediately  after the exercise of the Option and the two-year
period  immediately  after Date of Option Grant. At any time during the one-year
or  two-year  periods  set forth  above,  the  Company may place a legend on any
certificate  representing  shares acquired pursuant to the Option requesting the
transfer  agent  for the  Company's  stock to  notify  the  Company  of any such
transfers.  The obligation of the  Participant to notify the Company of any such
transfer  shall  continue  notwithstanding  that a legend has been placed on the
certificate pursuant to the preceding sentence.

                                       28
<PAGE>

      12. LEGENDS.

      The  Company  may at any time place  legends  referencing  any  applicable
federal,  state or  foreign  securities  law  restrictions  on all  certificates
representing shares of stock subject to the provisions of this Option Agreement.
The Participant  shall, at the request of the Company,  promptly  present to the
Company any and all certificates  representing  shares acquired  pursuant to the
Option in the possession of the Participant in order to carry out the provisions
of this Section.  Unless otherwise  specified by the Company,  legends placed on
such certificates may include, but shall not be limited to, the following:

            12.1 "THE  SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN
REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  AND MAY NOT BE SOLD,
TRANSFERRED,  ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT  UNDER  SUCH  ACT  COVERING  SUCH  SECURITIES,  THE  SALE  IS  MADE IN
ACCORDANCE  WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY  RECEIVES AN
OPINION OF COUNSEL  REASONABLY  SATISFACTORY  TO THE COMPANY,  STATING THAT SUCH
SALE, TRANSFER,  ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."

            12.2 "THE SHARES  EVIDENCED BY THIS  CERTIFICATE  WERE ISSUED BY THE
CORPORATION TO THE REGISTERED  HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION
AS DEFINED IN  SECTION  422 OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS AMENDED
("ISO"). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE
SHARES SHOULD NOT BE TRANSFERRED PRIOR TO [INSERT DISQUALIFYING DISPOSITION DATE
HERE]. SHOULD THE REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO
THIS DATE AND FOREGO ISO TAX TREATMENT,  THE TRANSFER AGENT FOR THE SHARES SHALL
NOTIFY THE CORPORATION IMMEDIATELY.  THE REGISTERED HOLDER SHALL HOLD ALL SHARES
PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED  HOLDER'S NAME (AND
NOT IN THE NAME OF ANY  NOMINEE)  PRIOR TO THIS  DATE OR  UNTIL  TRANSFERRED  AS
DESCRIBED ABOVE."

                                       29
<PAGE>

      13. LOCK-UP AGREEMENT.

            The Participant  hereby agrees that in the event of any underwritten
public offering of stock, including an initial public offering of stock, made by
the Company  pursuant to an  effective  registration  statement  filed under the
Securities Act, the Participant shall not offer, sell, contract to sell, pledge,
hypothecate,  grant  any  option  to  purchase  or make any  short  sale of,  or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the  effective  date
of such registration statement as may be established by the underwriter for such
public offering;  provided,  however,  that such period of time shall not exceed
one  hundred  eighty  (180)  days from the  effective  date of the  registration
statement to be filed in  connection  with such public  offering.  The foregoing
limitation shall not apply to shares registered in the public offering under the
Securities Act.

      14. RESTRICTIONS ON TRANSFER OF SHARES.

      No shares  acquired  upon  exercise of the Option may be sold,  exchanged,
transferred (including,  without limitation,  any transfer to a nominee or agent
of the Participant),  assigned, pledged,  hypothecated or otherwise disposed of,
including  by  operation  of  law,  in  any  manner  which  violates  any of the
provisions of this Option Agreement, and any such attempted disposition shall be
void.  The Company shall not be required (a) to transfer on its books any shares
which will have been transferred in violation of any of the provisions set forth
in this  Option  Agreement  or (b) to treat as owner of such shares or to accord
the right to vote as such owner or to pay  dividends to any  transferee  to whom
such shares will have been so transferred.

      15. MISCELLANEOUS PROVISIONS.

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

            15.2 Binding  Effect.  Subject to the  restrictions  on transfer set
forth herein, this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs,  executors,  administrators,
successors and assigns.

            15.3 Termination or Amendment.  The Board may terminate or amend the
Plan or the Option at any time;  provided,  however,  that except as provided in
Section  8 in  connection  with a Change  in  Control,  no such  termination  or
amendment  may adversely  affect the Option or any  unexercised  portion  hereof
without the consent of the Participant  unless such  termination or amendment is
necessary  to  comply  with any  applicable  law or  government  regulation.  No
amendment  or addition to this Option  Agreement  shall be  effective  unless in
writing.

            15.4 Notices.  Any notice  required or permitted  hereunder shall be
given in writing  and shall be deemed  effectively  given  (except to the extent
that this Option Agreement  provides for effectiveness  only upon actual receipt
of such notice) upon personal  delivery,  upon deposit in the United States Post
Office,  by registered or certified  mail, or with an overnight  courier service
with postage and fees prepaid, addressed to the other party at the address shown
below  that  party's  signature  or at such  other  address  as such  party  may
designate in writing from time to time to the other party.

                                       30
<PAGE>

            15.5 Integrated Agreement. The Notice, this Option Agreement and the
Plan  constitute the entire  understanding  and agreement of the Participant and
the  Participating  Company Group with respect to the subject  matter  contained
herein  or  therein  and  supersedes  any  prior   agreements,   understandings,
restrictions,  representations,  or  warranties  among the  Participant  and the
Participating Company Group with respect to such subject matter other than those
as set forth or  provided  for herein or  therein.  To the  extent  contemplated
herein or therein,  the provisions of the Notice and the Option  Agreement shall
survive any exercise of the Option and shall remain in full force and effect.

            15.6 Applicable Law. This Option  Agreement shall be governed by the
laws of the State of California  as such laws are applied to agreements  between
California  residents entered into and to be performed entirely within the State
of California.

            15.7 Counterparts. The Notice may be executed in counterparts,  each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                                       31
<PAGE>

(TM)  Incentive Stock Option                             Participant: __________
(TM)  Nonstatutory Stock Option                          Date: _________________

                          STOCK OPTION EXERCISE NOTICE

Halozyme Therapeutics, Inc.
Attention: Chief Financial Officer
11588 Sorrento Valley Road, Suite 17

San Diego, CA 92121

Ladies and Gentlemen:

      1. Option.  I was granted an option (the  "Option") to purchase  shares of
the common stock (the "Shares") of Halozyme  Therapeutics,  Inc. (the "Company")
pursuant to the Company's  2004 Stock Plan (the  "Plan"),  my Notice of Grant of
Stock  Option  (the  "Notice")  and  my  Stock  Option  Agreement  (the  "Option
Agreement") as follows:

            Date of Option Grant:                            ___________________

            Number of Option Shares:                         ___________________

            Exercise Price per Share:                       $___________________

      2.  Exercise of Option.  I hereby elect to exercise the Option to purchase
the  following  number of Shares,  all of which are Vested  Shares in accordance
with the Notice and the Option Agreement:

            Total Shares Purchased:                          ___________________

            Total Exercise Price
             (Total Shares X Price per Share)               $___________________

      3. Payments. I enclose payment in full of the total exercise price for the
Shares in the following form(s), as authorized by my Option Agreement:

            (TM) Cash:                                      $___________________

            (TM) Check:                                     $___________________

            (TM) Tender of Company Stock:             Contact Plan Administrator

      4. Tax  Withholding.  I authorize  payroll  withholding and otherwise will
make  adequate  provision  for  the  federal,   state,  local  and  foreign  tax
withholding  obligations of the Company,  if any, in connection with the Option.
If I am exercising a Nonstatutory  Stock Option, I enclose payment in full of my
withholding taxes, if any, as follows:

               (Contact Plan Administrator for amount of tax due.)

            (TM) Cash:                                      $___________________

            (TM) Check:                                     $___________________

                                       32
<PAGE>

      5. Participant Information.

            My address is: _____________________________________________________

                           _____________________________________________________

            My Social Security Number is: ______________________________________

      6.  Notice of  Disqualifying  Disposition.  If the Option is an  Incentive
Stock Option, I agree that I will promptly notify the Chief Financial Officer of
the Company if I transfer any of the Shares  within one (1) year from the date I
exercise all or part of the Option or within two (2) years of the Date of Option
Grant.

      7.  Binding  Effect.  I agree  that  the  Shares  are  being  acquired  in
accordance  with and  subject to the terms,  provisions  and  conditions  of the
Option  Agreement,  to all of which I hereby  expressly  assent.  This Agreement
shall  inure  to the  benefit  of and  be  binding  upon  my  heirs,  executors,
administrators, successors and assigns.

      8. Transfer.  I understand and  acknowledge  that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities  Act"),
and that  consequently  the Shares  must be held  indefinitely  unless  they are
subsequently  registered  under  the  Securities  Act,  an  exemption  from such
registration is available,  or they are sold in accordance with Rule 144 or Rule
701 under the  Securities  Act. I further  understand and  acknowledge  that the
Company is under no  obligation  to register the Shares.  I understand  that the
certificate or certificates evidencing the Shares will be imprinted with legends
which  prohibit the transfer of the Shares  unless they are  registered  or such
registration is not required in the opinion of legal counsel satisfactory to the
Company.

      I am aware that Rule 144 under the Securities  Act, which permits  limited
public resale of securities acquired in a nonpublic  offering,  is not currently
available  with respect to the Shares and, in any event,  is  available  only if
certain conditions are satisfied.  I understand that any sale of the Shares that
might be made in reliance  upon Rule 144 may only be made in limited  amounts in
accordance  with the terms and  conditions  of such rule and that a copy of Rule
144 will be delivered to me upon request.

      I understand  that I am purchasing the Shares pursuant to the terms of the
Plan,  the Notice and my Option  Agreement,  copies of which I have received and
carefully read and understand.

                                                         Very truly yours,

                                                         _______________________
                                                         (Signature)

Receipt of the above is hereby acknowledged.

HALOZYME THERAPEUTICS, INC.

By:     __________________________________

Title:  __________________________________

Dated:  __________________________________

                                       33

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