8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 13, 2007

HALOZYME THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Nevada	000-49616	88-0488686
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

11588 Sorrento Valley Road, Suite 17, San Diego, California	92121
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 794-8889

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into Material Definitive Agreement.
	Item 3.02 Unregistered Sales of Equity Securities.
	Item 9.01 Financial Statements and Exhibits.
	SIGNATURES
EXHIBIT 99.1
EXHIBIT 99.2
EXHIBIT 99.3
EXHIBIT 99.4

Explanatory Note

          On February 14, 2007, Halozyme Therapeutics, Inc. (“Halozyme”) filed a Form 8-K in which it announced a new license agreement, an amended distribution agreement, and an amended development agreement with Baxter Healthcare Corporation and certain of its affiliates. A component of the transaction was also the sale of Halozyme common stock. With this filing, Halozyme is amending the original Form 8-K in order to provide copies of certain transaction documents that were entered into in connection with the transaction.

Item 1.01 Entry into Material Definitive Agreement.

          On February 13, 2007, a subsidiary of Halozyme Therapeutics, Inc. (“Halozyme”), Halozyme, Inc., Baxter Healthcare Corporation (“BHC”) and Baxter Healthcare S.A. (“BHSA” and along with BHC, collectively, “Baxter”) entered into the following agreements:

• Enhanze License and Collaboration Agreement (the “License”);

• Amended and Restated Exclusive Distribution Agreement (amending that certain Exclusive Distribution Agreement between the parties dated as of August 13, 2004, as amended on March 24, 2005 and December 8, 2005) (the “Distribution Agreement”); and

• Amended and Restated Development and Supply Agreement (amending that certain Development and Supply Agreement between the parties dated as of March 24, 2005) (the “Development Agreement” and along with the License and Distribution Agreement, the “Agreements”).

          Under the terms of the License, Baxter will obtain a worldwide, exclusive license to develop and commercialize product combinations of rHuPH20, Halozyme’s proprietary recombinant human hyaluronidase, with Baxter hydration fluids and generic small molecule drugs (with the exception of combinations with (i) bisphosphonates as well as (ii) cytostatic and cytotoxic chemotherapeutic agents, the rights to which have been retained by Halozyme). In addition, Baxter will pay royalties on the sales, if any, of the products that result from the collaboration.

          Under the terms of the Distribution Agreement, Baxter paid Halozyme an initial upfront payment of $10 million and, pending the successful completion of a series of regulatory and sales events, Baxter may make milestone payments which could potentially reach a value of up to $25 million. In addition, Baxter will pay royalties on the sales of products covered under the Distribution Agreement. Baxter prepaid $1 million of these royalties in connection with the execution of the Agreements and Baxter will be obligated to prepay $9 million of additional royalties on or prior to January 1, 2009.

          Under the terms of the Development Agreement, Baxter will now assume all development, manufacturing, clinical, regulatory, sales and marketing costs of the products covered by the Distribution Agreement.

          In addition, on February 13, 2007, an affiliate of Baxter purchased 2,070,394 shares of Halozyme’s common stock for an aggregate of $20 million (as further described in Item 3.02 below).

          The preceding descriptions of the License, Distribution Agreement, and Development Agreement are summaries of the material terms of those agreements and do not purport to be complete, and are qualified in their entirety by the copies of such agreements which are filed as Exhibits 99.2, 99.3, and 99.4, respectively, to this Form 8-K/A.

Item 3.02 Unregistered Sales of Equity Securities.

          On February 13, 2007, Halozyme sold 2,070,394 shares of its common stock, $0.001 par value per share (the “Shares”), to Baxter International Inc. (“BII”) pursuant to a Stock Purchase Agreement (the “Purchase Agreement”). The Shares were sold at a per share purchase price of $9.66 per share and Halozyme received gross proceeds of $20 million. The per share purchase price represented a 25% premium to the average closing price of Halozyme’s common stock as reported by the American Stock Exchange over the thirty (30) trading days immediately preceding the date of the Purchase Agreement.

          No shareholder approval was required for the sale of the Shares. BII represented that it is an accredited investor as defined in the Securities Act of 1933, as amended (the “Securities Act”), and the Shares were sold pursuant to exemptions from registration under Regulation D of the Securities Act. Proceeds from the sale of the Shares will be used to support Halozyme’s ongoing operations, including research and development activities, as well as for other general corporate purposes.

          Halozyme has not filed a registration statement with the Securities and Exchange Commission (the “SEC”) covering the resale of the Shares, but BII may request that Halozyme register the Shares after the earlier of (i) the two year anniversary of the sale of the Shares or (ii) the date upon which Halozyme’s Board of Directors announces the approval of a change of control transaction. Halozyme will not be required to register the Shares if BII and Halozyme mutually agree that the Shares may be sold pursuant to the provisions of Rule 144 under the Securities Act of 1933, as amended.

          The preceding description of the Purchase Agreement is a summary of the material terms of that agreement and does not purport to be complete, and is qualified in its entirety by the copy of such agreement which is filed as Exhibit 99.1 to this Form 8-K/A.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Stock Purchase Agreement, dated as of February 13, 2007 by and among Halozyme Therapeutics, Inc., and Baxter International Inc.
99.2*	Enhanze License and Collaboration Agreement, dated as of February 13, 2007 by and among Halozyme, Inc., Baxter Healthcare Corporation and Baxter Healthcare S.A.
99.3*	Amended and Restated Exclusive Distribution Agreement dated as of February 13, 2007 by and among Halozyme, Inc., Baxter Healthcare Corporation and Baxter Healthcare S.A.
99.4*	Amended and Restated Development and Supply Agreement, dated as of February 13, 2007 by and among Halozyme, Inc., Baxter Healthcare Corporation and Baxter Healthcare S.A.

* Confidential treatment has been requested for certain portions of this exhibit. These portions have been omitted from this agreement and have been filed separately with the Securities and Exchange Commission.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Halozyme Therapeutics, Inc.
February 20, 2007	By:	/s/ David A. Ramsay
		David A. Ramsay
		Secretary and Chief Financial Officer

EX-99.1

EXHIBIT 99.1

EXECUTION COPY

STOCK PURCHASE AGREEMENT

Dated as of February 13, 2007

by and among

HALOZYME THERAPEUTICS, INC.

and

BAXTER INTERNATIONAL INC.

TABLE OF CONTENTS

			Page
Article I            Purchase and Sale of Common Stock				1
	Section 1.1	Purchase and Sale of Common Stock		1
	Section 1.2	Purchase Price and Closing		1
Article II Representations and Warranties				2
	Section 2.1	Representations and Warranties of the Company		2
	Section 2.2	Representations and Warranties of the Purchaser		5
Article III            Covenants				7
	Section 3.1	Notifications		7
	Section 3.2	Registration Rights		7
	Section 3.3	Compliance		8
	Section 3.4	Use of Proceeds		9
	Section 3.5	Press Release		9
	Section 3.6	Short Selling		9
Article IV            Conditions				9
	Section 4.1	Conditions Precedent to the Obligation of the Company to Sell the Shares
				9
	Section 4.2	Conditions Precedent to the Obligation of the Purchaser to Purchase the
		Shares		10
Article V            Miscellaneous				11
	Section 5.1	Fees and Expenses		11
	Section 5.2	Specific Performance; Consent to Jurisdiction		11
	Section 5.3	Entire Agreement; Amendment		11
	Section 5.4	Notices		12
	Section 5.5	Waivers		13
	Section 5.6	Headings		13
	Section 5.7	Successors and Assigns		13
	Section 5.8	No Third Party Beneficiaries		13
	Section 5.9	Counterparts		13
	Section 5.10	Severability		13
	Section 5.11	Further Assurances		13

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of February 13, 2007, is entered into by and between Halozyme Therapeutics, Inc., a Nevada corporation (the “Company”), and Baxter International Inc., a Delaware company (the “Purchaser”), for the purchase and sale of 2,070,394 shares of the Company’s Common Stock, par value $.001 per share (the “Shares”).

     WHEREAS, this Agreement is being entered into in connection with the execution of that certain License and Collaboration Agreement between the Company and Purchaser dated as of the date hereof (the “License Agreement”), the Amended and Restated Exclusive Distribution Agreement (the “Distribution Agreement”), and the Amended and Restated Supply Agreement (the “Supply Agreement”) (collectively, the License Agreement, Distribution Agreement and Supply Agreement” are referred to as the “Transaction Agreements”); and

     WHEREAS, this Agreement, and the transaction contemplated hereby, is a material inducement for the parties to enter into the collaborative relationship established by the Transaction Agreements.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby agree as follows:

ARTICLE I

Purchase and Sale of Common Stock

     Section 1.1 Purchase and Sale of Common Stock. Upon the following terms and conditions, the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, 2,070,394 shares of Common Stock at a price per share of $9.66 (the “Per Share Purchase Price”), for an aggregate purchase price of $20,000,006.04 as determined herein (the “Purchase Price”). The parties agree that the Per Share Purchase Price shall equal the higher of (i) 125% of the average closing price of the Company’s Common Stock as reported by the American Stock Exchange (“AMEX”) over the thirty (30) trading days immediately preceding, but not including, the date of this Agreement, or (ii) the closing price of the Company’s Common Stock as reported by AMEX for the trading day immediately preceding the date of this Agreement.

     Section 1.2 Purchase Price and Closing. Subject to the terms and conditions hereof, the Company agrees to issue and sell to the Purchaser and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Purchaser agrees to purchase the Shares. The closing of the purchase and sale of the Shares to be acquired by the Purchaser from the Company under this Agreement shall take place at the offices of the Company’s counsel, DLA Piper US LLP (the “Closing”) at 10:00 AM, San Diego time on the date hereof (i) provided, that all of the conditions set forth in Article IV hereof and applicable to the Closing shall have been fulfilled or waived in accordance herewith, or (ii) at such other time and place or on such date as the Purchaser and the Company may agree upon (the “Closing Date”). Subject to the terms and conditions of this Agreement, at the Closing the

Company shall deliver or cause to be delivered to the Purchaser a certificate registered in the name of the Purchaser representing the number of Shares Purchaser is purchasing pursuant to the terms hereof. At the Closing, the Purchaser shall deliver the Purchase Price by wire transfer to an account designated by the Company.

ARTICLE II

Representations and Warranties

     Section 2.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser as follows:

          (a) Organization, Good Standing and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted and as described in the documents filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (all of the foregoing including filings incorporated by reference therein being referred to herein as the “Commission Documents”), since the end of its most recently completed fiscal year through the date hereof, including, without limitation, its most recent report on Form 10-Q. Other than wholly owned subsidiary Halozyme, Inc., a California corporation (the “Subsidiary”), the Company does not own securities of any kind in any other entity. The Company and the Subsidiary are qualified to do business as foreign corporations and are in good standing in every jurisdiction in which the nature of the business conducted or property owned by them makes such qualification necessary, except for any jurisdiction(s) (alone or in the aggregate) in which the failure to be so qualified will not have a Material Adverse Effect. For the purposes of this Agreement, “Material Adverse Effect” means any effect on the business, operations, properties or financial condition of the Company and its Subsidiary that is material and adverse to the Company and its Subsidiary, taken as a whole, and any condition, circumstance or situation that would prohibit the Company from entering into and performing any of its obligations hereunder.

          (b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and perform this Agreement and to issue and sell the Shares in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, its Board of Directors or stockholders is required. When executed and delivered by the Company, this Agreement shall constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

          (c) Issuance of Shares. The Shares have been duly authorized by all necessary corporate action and, when paid for and issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable. In addition, the Shares will be free and clear

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of all liens, claims, charges, security interests or agreements, pledges, assignments, covenants, restrictions or other encumbrances created by, or applicable to, the Company (collectively, “Encumbrances”) and rights of refusal of any kind (other than restrictions on transfer under applicable securities laws) and the holder of the Shares shall be entitled to all rights accorded to a holder of Common Stock.

          (d) No Conflicts; Governmental Approvals. The execution, delivery and performance of the Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not (i) violate any provision of the Company’s Articles of Incorporation (the “Articles”) or Bylaws (the “Bylaws”), each as amended to date, or the Subsidiary’s comparable charter documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or its Subsidiary is a party or by which the Company or its Subsidiary’s respective properties or assets are bound, or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or its Subsidiary or by which any property or asset of the Company or its Subsidiary are bound or affected, except for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor its Subsidiary is required under federal, state, foreign or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue and sell the Shares in accordance with the terms hereof (other than any filings, consents and approvals which may be required to be made by the Company under applicable state and federal securities laws, rules or regulations prior to or subsequent to the Closing).

          (e) Commission Documents, Financial Statements. The Common Stock of the Company is registered pursuant to Section 12(g) of the Exchange Act. During the two year period preceding the Closing Date, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act. At the times of their respective filing, all such reports, schedules, forms, statements and other documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such documents. At the times of their respective filings, such reports, schedules, forms, statements and other documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the Commission Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be

3

condensed or summary statements), and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

          (f) No Material Adverse Change. Except as disclosed in the Commission Documents, since September 30, 2006, neither the Company nor its Subsidiary has (i) experienced or suffered any Material Adverse Effect, (ii) incurred any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) other than those incurred in the ordinary course of the Company’s or its Subsidiary’s respective businesses or (iii) declared, made or paid any dividend or distribution of any kind on their capital stock.

          (g) No Undisclosed Events or Circumstances. Except as disclosed in the Commission Documents, since September 30, 2006, except for the consummation of the transactions contemplated herein, to the Company’s knowledge, no event or circumstance has occurred or exists with respect to the Company or its Subsidiary or their respective businesses, properties, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

          (h) Disclosure; Non-Public Information. Neither this Agreement nor any other documents, certificates or instruments furnished to the Purchaser by or on behalf of the Company or its Subsidiary in connection with the transactions contemplated by this Agreement contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein or therein, in the light of the circumstances under which they were made herein or therein, not misleading. Except with respect to the material terms and conditions of the transaction contemplated by this Agreement, which shall be publicly disclosed by the Company pursuant to applicable law, the Company confirms that neither it nor any person acting on its behalf has provided the Purchaser with any information that the Company believes constitutes material, non-public information.

          (i) Litigation. No action, suit, proceeding or investigation is currently pending or, to the knowledge of the Company, has been threatened in writing against the Company that: (i) concerns or questions the validity of this Agreement; (ii) concerns or questions the right of the Company to enter into this Agreement; or (iii) is reasonably likely to have a Material Adverse Effect. The Company is neither a party to nor subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company currently pending or that the Company intends to initiate.

          (j) Compliance. Except for defaults or violations which are not reasonably likely to have a Material Adverse Effect, neither the Company nor its Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or its Subsidiary under), nor has the Company or its Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to

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which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business.

          (k) Intellectual Property.

               (i) Each of the Company and its Subsidiary has entered into agreements with each of its officers, employees and consultants involved in research and development work, including development of the Company’s and its Subsidiary’s products and technology providing the Company or its Subsidiary, to the extent permitted by law, with title and ownership to patents, patent applications, trade secrets and inventions conceived, developed, reduced to practice by such person, solely or jointly with other of such persons, during the period of employment by the Company or its Subsidiary. The Company is not aware that any of its or its Subsidiary’s employees or consultants is in violation thereof.

               (ii) To the knowledge of the Company and its Subsidiary, the issued patents owned or controlled by the Company or its Subsidiary have not been held by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part. Neither the Company nor its Subsidiary has received written notice of any claim or litigation by any third party alleging that any of such patents is invalid or unenforceable.

               (iii) The Management of the Company and its Subsidiary has not received any notice alleging that the Company or its Subsidiary has violated or, by conducting its business as proposed, would violate any of the patents, trademarks, service marks, trade names, domain names, copyrights, trade secrets or other proprietary rights or processes of any other person or entity. For the purpose of this Section 2.1(k), “Management” shall mean the following Company employees: Jonathan Lim, David Ramsay, Gregory Frost, Robert Little, Richard Yocum, Don Kennard, Mark Wilson, and William Fallon.

          (l) Environmental Regulations. Except for failures which are not reasonably likely to have a Material Adverse Effect, as of the date hereof each of the Company and its Subsidiary has met all applicable local, state, federal and national environmental regulations and has disposed of its waste products and effluents, if any, and/or has caused others to dispose of such waste products and effluents, if any, in accordance with all applicable state, local, federal and national environmental regulations and in such a manner that, to the knowledge of the Company or its Subsidiary: (a) no harm has resulted or will likely result to any of its respective employees or properties or to any other person or entities or their properties, and (b) neither the Company nor its Subsidiary has incurred any liability with respect thereto.

     Section 2.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows:

          (a) Purchaser Sophistication. The Purchaser represents and warrants to, and covenants with, the Company that the Purchaser is knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to, investments in shares

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presenting an investment decision like that involved in the purchase of the Shares, including investments in securities issued by the Company and investments in comparable companies, and has requested, received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the Shares. The Purchaser is an “accredited investor” pursuant to Rule 501 of Regulation D under the Securities Act (as defined below).

          (b) Authorization and Power. The Purchaser has the requisite power and authority to enter into and perform this Agreement and to purchase the Shares being sold to it hereunder. The execution, delivery and performance of this Agreement by the Purchaser and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no further consent or authorization of such Purchaser or its Board of Directors or stockholders is required. When executed and delivered by the Purchaser, this Agreement shall constitute a valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

          (c) No Conflict. The execution, delivery and performance of this Agreement by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby do not and will not (i) violate any provision of the Purchaser’s charter or organizational documents, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Purchaser is a party or by which the Purchaser’s respective properties or assets are bound, or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Purchaser or by which any property or asset of the Purchaser are bound or affected, except, in all cases, other than violations pursuant to clauses (i) or (iii) (with respect to federal and state securities laws) above, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, materially and adversely affect the Purchaser’s ability to perform its obligations under the Agreement.

          (d) Restricted Shares. The Purchaser acknowledges that the Shares are restricted securities and must be held indefinitely unless subsequently registered under the Securities Act of 1933, as amended (the “Securities Act”) or the Company receives an opinion of counsel satisfactory to the Company that such registration is not required. The Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of stock purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the stock, 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 stock to be sold, the sale being through a “broker’s transaction” or a transaction directly with a “market maker” and the number of shares of the stock being sold during any three-month period not exceeding specified limitations. The Purchaser further acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Purchaser wishes to sell the

6

Securities and, if so, the Purchaser would be precluded from selling the Securities under Rule 144 even if the one year minimum holding period has been satisfied.

          (e) Short Sales. The Purchaser represents, warrants and agrees that it has not engaged in any short selling of the Company’s securities, or established or increased any “put equivalent position” as defined in Rule 16(a)-1(h) under the Securities Exchange Act of 1934 with respect to the Company’s securities, within the past 30 trading days.

ARTICLE III

Covenants

     Section 3.1 Notifications.

          (a) During the period prior to the Closing Date, the Company will promptly advise Purchaser in writing of (i) any Material Adverse Effect, or (ii) any notice or other communication from any third Person (defined below) alleging that the consent of the third Person is required in connection with the transactions contemplated by this Agreement. “Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization or Governmental Authority.

          (b) During the period prior to the Closing Date, each Party shall promptly notify the others of any action, suit or proceeding that is instituted or specifically threatened in writing against such Party to restrain, prohibit or otherwise challenge the legality of any transaction contemplated by this Agreement. During the period prior to the Closing Date, the Company shall promptly notify Purchaser of any lawsuit, claim, proceeding or investigation that is threatened in writing, brought, asserted or commenced against the Company.

     Section 3.2 Registration Rights.

          (a) At any time after the earlier to occur of (i) the second anniversary of the date of this Agreement or (ii) the date on which the Company publicly announces the approval by its Board of Directors of the sale, merger or consolidation of the Company, or the sale of substantially all of the assets of the Company, to, into or with another Person (each of the foregoing referred to herein as an “Event”, and collectively, as the “Events”), the Purchaser may notify the Company in writing (a “Notice of Sale”) that it intends to sell the Shares (“Proposed Sale”) and request in writing that the Company file a registration statement under Rule 415 of the Securities Act (the “Registration Statement”), which Registration Statement shall provide for the resale of all of the Shares held by the Purchaser and/or any of its Affiliates.

          (b) In the event that the Company’s outside legal counsel and Purchaser’s legal counsel agree that the Proposed Sale of Shares by Purchaser may be completed without registration in compliance with Rule 144 of the Securities Act, then the Company shall not be required to file a Registration Statement as set forth above. If, however, either the Company’s outside legal counsel or Purchaser’s legal counsel concludes that the Proposed Sale may not be completed without registration in compliance with Rule 144 of the Securities Act, then the Company shall use commercially reasonable efforts (i) to as promptly as practical but in no event more than ten (10) business days after the receipt of a Notice of Sale, file a Registration

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Statement, (ii) to cause the Registration Statement to be declared effective by the Commission as promptly as practicable thereafter and (iii) to keep the Registration Statement continuously effective, supplemented and amended for a period (the “Effective Period”) ending on the earlier of (A) second anniversary of the effective date of the Registration Statement and (B) the date on which all Shares have been sold pursuant to the Registration Statement. The Registration Statement and any post-effective amendment thereto (including the prospectus contained therein or any prospectus supplement thereto) shall comply, at the time it becomes effective, in all material respects with the rules and regulations of the Securities Act and the Exchange Act and will not at any time during the Effective Period contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company shall supplement and amend the Registration Statement if required by the rules or regulations of the Securities Act or the Exchange Act. The Company agrees to take any and all other actions reasonably requested by Purchaser to aid Purchaser’s sale and distribution of the Shares pursuant to the Registration Statement including, without limitation, actions related to compliance with applicable state blue sky or other state securities laws (provided that the Company will not be required to qualify to do business or consent to the service of process in any such jurisdictions), listing of the Shares on AMEX or any successor market and further compliance with the rules and regulations of the Securities Act and any other securities laws, and rules and regulations related thereto.

     Purchaser acknowledges that the Company has incurred, and may incur in the future, contractual obligations to other parties relating to the registration of Company securities and that the Registration Statement required to be filed in accordance with this Section 3.2 may be subject to inclusion of shares held by third parties pursuant to their respective registration rights agreements.

          (c) Notwithstanding the foregoing section, if the Company shall furnish to the Purchaser and/or any of its Affiliates a certificate signed by the President or Chief Executive Officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company it would be seriously detrimental or impractical to the Company and its shareholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, then the Company shall have the one time right to defer such filing for a period of not more than thirty (30) days from the date such registration statement would otherwise have to be filed pursuant to Section 3.2(b) above, provided, however, that the deferral right set forth in this Section 3.2(c) may only be utilized in the context of a Registration Statement request made pursuant to Section 3.2(a)(i) above and not in connection with a Registration Statement request made pursuant to Section 3.2(a)(ii) above.

     Section 3.3 Compliance. The Company shall use commercially reasonable efforts to (i) cause its Common Stock to continue to be registered under the Exchange Act, file all periodic reports thereunder and continue the listing or trading of its Common Stock on AMEX or any successor market in good standing and to comply in all material respects with all applicable rules and regulations of the Commission and all reporting requirements under the rules and regulations of the Exchange Act, and (ii) to satisfy the current public information requirement of Rule 144 at all times during which the Purchaser holds any Securities.

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     Section 3.4 Use of Proceeds. The Company shall apply the proceeds from the sale of the Shares to ongoing operations, or for such other uses as determined by the Company’s Board of Directors.

     Section 3.5 Press Release. The Company and the Purchaser agree that the Company and the Purchaser shall issue a mutually acceptable and agreed upon joint press release announcing the transaction contemplated by this Agreement prior to the opening of the financial markets in New York City on the business day immediately after the date hereof.

     Section 3.6 Short Selling. For so long as Purchaser owns any of the Shares, neither the Purchaser nor any of its affiliates shall engage in any short selling of the Company’s securities, or establish or increase any “put equivalent position” as defined in Rule 16(a)-1(h) under the Securities Exchange Act of 1934 with respect to the Company’s securities.

ARTICLE IV

Conditions

     Section 4.1 Conditions Precedent to the Obligation of the Company to Sell the Shares. The obligation hereunder of the Company to issue and sell the Shares to the Purchaser at the Closing Date is subject to the satisfaction or waiver, at or before the Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion.

          (a) Accuracy of the Purchaser’s Representations and Warranties. The representations and warranties of the Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time, except for representations and warranties that are expressly made as of a particular date, which shall be true and correct in all material respects as of such date.

          (b) Performance by the Purchaser. The Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Closing Date.

          (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

          (d) Approval of Additional Share Listing Application. The Company shall have received approval from AMEX of an additional share listing application for the Shares.

          (e) Regulatory Approvals. Purchaser and the Company shall have timely obtained from each governmental entity all approvals, waivers and consents, necessary for consummation of or in connection with the transactions contemplated by this Agreement, including, without limitation, such approvals, waivers and consents as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

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          (f) Execution of Transaction Agreements. On the Closing Date, each party to each of the Transaction Agreements shall have delivered its signature to each of the Transaction Agreements to the other party.

          (g) Delivery of Purchase Price. The Purchase Price for the Shares shall have been delivered to the Company on the Closing Date.

          Section 4.2 Conditions Precedent to the Obligation of the Purchaser to Purchase the Shares. The obligation hereunder of the Purchaser to purchase the Shares and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below. These conditions are for the Purchaser’s sole benefit and may be waived by the Purchaser at any time in their sole discretion.

          (a) Accuracy of the Company’s Representations and Warranties. Each of the representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Closing Date, except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date.

          (b) Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

          (c) No Suspension, Etc. Trading in the Common Stock shall not have been suspended by the Commission or AMEX. The Company shall have received approval from AMEX of an additional share listing application for the Shares.

          (d) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

          (e) Regulatory Approvals. Purchaser and the Company shall have timely obtained from each governmental entity all approvals, waivers and consents, necessary for consummation of or in connection with the transactions contemplated by this Agreement, including, without limitation, such approvals, waivers and consents as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

          (f) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any governmental authority shall have been commenced, and no investigation by any governmental authority shall have been threatened in writing against the Company or any Subsidiary, or any of the officers, directors or affiliates of the Company or any Subsidiary seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.

          (g) Execution of Transaction Agreements. On the Closing Date, each party shall have delivered its signature to each of the Transaction Agreements to the other party and the license and other rights granted thereunder shall be fully effective.

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          (h) Officer’s Certificate. On the Closing Date, the Company shall have delivered to the Purchaser a certificate signed by an executive officer on behalf of the Company (the “Officer’s Certificate”), dated as of the Closing Date, confirming the accuracy of the Company’s representations, warranties and covenants as of the Closing Date and confirming the compliance by the Company with the conditions precedent set forth in paragraphs (a) and (b) of this Section 4.2 as of the Closing Date.

ARTICLE V

Miscellaneous

     Section 5.1 Fees and Expenses. Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

     Section 5.2 Specific Performance; Consent to Jurisdiction.

          (a) The Company and the Purchaser acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity.

          (b) The parties agree that this Agreement, and any disputes arising under this Agreement, will be governed by and construed in accordance with the laws of the state of California, without giving effect to any conflict of laws principles to the contrary. The parties irrevocably consent to personal jurisdiction in the state and federal courts of the state of California, and the exclusive venue for any such action shall be a state or federal court located in California. The Company and the Purchaser consent to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 5.2 shall affect or limit any right to serve process in any other manner permitted by law. The Company and the Purchaser hereby agree that the prevailing party in any suit, action or proceeding arising out of or relating to this Agreement shall be entitled to reimbursement for reasonable legal fees from the non-prevailing party.

          Section 5.3 Entire Agreement; Amendment. This Agreement contains the entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth herein, neither the Company nor the Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters, and they supersede all prior understandings and agreements with respect to said subject matter, all of which are merged herein. No provision of this Agreement may be waived or amended other than by a written instrument signed by the Company and the Purchaser.

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     Section 5.4 Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Company:	Halozyme Therapeutics, Inc.
	11588 Sorrento Valley Road
	Suite 17
	San Diego, CA 92121
	Attention: President and Chief Executive Officer
	Tel. No.: (858) 794-8889
	Fax No.: (858) 259-2539
with copies (which copies
shall not constitute notice
to the Company) to:	DLA Piper US LLP
	4365 Executive Drive, Suite 1100
	San Diego, California 92121
	Attention: Doug Rein
	Tel. No.: (858) 677-1400
	Fax No.: (858) 677-1401
If to the Purchaser:
	Baxter International Inc.
	One Baxter Parkway
	Deerfield, IL 60015
	Attn: Corporate Secretary
	Fax No. (847) 948-4837
	Baxter Healthcare Corporation
	95 Spring Street
	New Providence, New Jersey 07974
	Attn: General Manager
	Fax No. (908) 286-7260
with copies (which copies
shall not constitute notice
to the Purchaser ) to:	Baxter Healthcare Corporation
	One Baxter Parkway
	Deerfield, IL 60015
	Attn: General Counsel
	Fax: (847) 948-2450

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     Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other party hereto.

     Section 5.5 Waivers. No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

     Section 5.6 Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.

     Section 5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. After the Closing, the assignment by a party to this Agreement of any rights hereunder shall not affect the obligations of such party under this Agreement.

     Section 5.8 No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

     Section 5.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

     Section 5.10 Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.

     Section 5.11 Further Assurances. From and after the date of this Agreement, upon the request of the Purchaser or the Company, the Company and the Purchaser shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

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     IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement to be duly executed by their respective authorized officers as of the date first above written.

HALOZYME THERAPEUTICS, INC.
By:	/s/ JONATHAN LIM
Name:	Jonathan Lim
Title:	President and Chief Executive Officer
BAXTER INTERNATIONAL INC.
By:	/s/ DAVID SCHARF
Name:	David Scharf
Title:	Corporate Vice President

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EX-99.2

EXHIBIT 99.2

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND NOTED WITH “***.” AN UNREDACTED VERSION OF THIS
DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.

EXECUTION COPY

ENHANZE™ LICENSE AND COLLABORATION AGREEMENT
(Generic Drugs)

     THIS ENHANZE LICENSE AND COLLABORATION AGREEMENT (this “Agreement”), effective as of February 13, 2007 (the “Effective Date”) is entered into between HALOZYME, INC., a California corporation (“Halozyme”), having a place of business at 11588 Sorrento Valley Road, Suite 17, San Diego, California 92121, USA, on the one hand, and BAXTER HEALTHCARE CORPORATION, a Delaware corporation, with its principal place of business at One Baxter Parkway, Deerfield, Illinois 60015-4633, USA, and BAXTER HEALTHCARE S.A., a Swiss corporation, with its principal place of business at Hertistrasse 2, 8304 Wallisellen, Switzerland (together with its Affiliates, collectively, “Baxter”), on the other hand, with respect to the following facts:

     WHEREAS, Halozyme is the owner or exclusive licensee of certain patents, formulations and know-how related to the PH20 Drug (as defined below);

     WHEREAS, Baxter is the owner or exclusive licensee of certain patents and know-how related to the Baxter Drugs and Hydration Fluids (each as defined below);

     WHEREAS, the parties desire to enter into a collaborative relationship in which the parties will collaboratively develop, and Halozyme will license to Baxter the right to commercialize, the Products in the Territory (each as defined below), all on the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby agree as follows:

     1. DEFINITIONS.

1.1 “Advisory Committee” shall mean the committee composed of representatives of Baxter and Halozyme described in Section 5.6 below.

1.2 “Affiliate” shall mean, with respect to a party, any entity that controls or is controlled by such party, or is under common control with such party. For purposes of this definition, (a) for purposes of the definition of Baxter, an entity shall be deemed to control another entity if it owns or controls, directly or indirectly, one hundred percent (100%) (or if the law of the jurisdiction in which the other entity is organized does not permit foreign ownership of one hundred percent (100%), the highest percentage permitted by applicable law to be owned by such entity) of the voting equity of the other entity (or other comparable interest for an entity other than a corporation), and (b) for all other purposes, an entity shall be deemed to control another entity if it owns or controls, directly or indirectly, at least fifty percent (50%) of the

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CONFIDENTIAL TREATMENT REQUESTED

voting equity of the other entity (or other comparable interest for an entity other than a corporation).

          1.3 “ANDA” shall mean an Abbreviated New Drug Application as defined in 21 USC §321(aa).

          1.4 “API” shall mean the bulk form of active compound of PH20 Drug.

          1.5 “API Specifications” shall mean the specifications for the API provided by Halozyme to Baxter.

          1.6 “Baxter Drug(s)” shall mean, collectively, (a) any Drug that is a Generic Drug as of the Effective Date, (b) any Drug that thereafter is designated a Baxter Drug pursuant to Section 3.1.3, (c) Brevibloc (esmolol hydrocholoride) as more specifically described in US NDA No. 019386, and (d) Suprane (desflurane) as more specifically described in US NDA No. 020118, in each case excluding all Bisphosphonates, Cytostatics and Cytotoxics.

          1.7 “Bisphosphonates” shall mean all compositions and methods that, directly or indirectly, inhibit the resorption of bone.

          1.8 “Biologic” shall mean a biological product as defined in 42 USC §262(i).

          1.9 “cGMP” shall mean the principles detailed in the United States Current Good Manufacturing Practices (21 CFR 200, 211 and 600), the “Rules Governing Medicinal Product in The European Community — Volume IV Good Manufacturing Practice for Medicinal Products,” and/or “Cooperative Manufacturing Arrangements for Licensed Biologics” FDA-CBER.

          1.10 “Collaboration Supported Drug or Fluid Patent Rights” shall mean, collectively, (a) all patent applications hereafter filed in the Territory; (b) all patents that have issued or in the future issue from any of the foregoing patent applications, including without limitation utility models, design patents and certificates of invention; and (c) all divisionals, continuations, continuations-in-part, reissues, renewals, extensions or additions to any such patents and patent applications; in each case (i) that use or are supported by data and information derived from the use of a Baxter Drug or Hydration Fluid or are derived from the activities under this Agreement, and (ii) only to the extent they relate to a Baxter Drug or Hydration Fluid, its manufacture or use.

          1.11 “Collaboration Supported Patent Rights” shall mean, collectively, the Collaboration Supported Drug or Fluid Patent Rights and the Collaboration Supported PH20 Patent Rights.

          1.12 “Collaboration Supported PH20 Patent Rights” shall mean, collectively, (a) all patent applications hereafter filed in the Territory; (b) all patents that have issued or in the future issue from any of the foregoing patent applications, including without limitation utility models, design patents and certificates of invention; and (c) all divisionals, continuations, continuations-in-part, reissues, renewals, extensions or additions to any such patents and patent applications; in each case (i) that use or are supported by data and information derived from the

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CONFIDENTIAL TREATMENT REQUESTED

use of PH20 Drug or are derived from the activities under this Agreement, and (ii) only to the extent they relate to recombinant human PH20 hyaluronidase, its manufacture or use.

          1.13 “Confidential Information” shall mean all information and data that (a) is provided by one party to the other party under this Agreement, and (b) if disclosed in writing or other tangible medium is marked or identified as confidential at the time of disclosure to the recipient, is acknowledged at the time of disclosure to be confidential, or otherwise should reasonably be deemed to be confidential. Notwithstanding the foregoing, Confidential Information of a party shall not include that portion of such information and data which, and only to the extent, the recipient can establish by written documentation: (i) is known to the recipient as evidenced by its written records before receipt thereof from the disclosing party, (ii) is disclosed to the recipient free of confidentiality obligations by a third person who has the right to make such disclosure, (iii) is or becomes part of the public domain through no fault of the recipient, or (iv) the recipient can reasonably establish is independently developed by persons on behalf of recipient without access to or use of the information disclosed by the disclosing party.

          1.14 “Cytostatics” shall mean all compositions and methods that, directly or indirectly, inhibit or suppress cellular growth or multiplication of tumor cells (including without limitation hormone antagonists).

          1.15 “Cytotoxics” shall mean all compositions and methods that, directly or indirectly, kill a tumor cell (including without limitation chemotherapeutics, radiotherapeutics, and mitomycin).

          1.16 “Development Agreement” shall mean the Amended and Restated Development and Supply Agreement dated as of the Effective Date, between Halozyme and Baxter (as amended or restated from time to time).

          1.17 “DMF” shall mean a Drug Master File filed with the FDA, or its foreign equivalent.

          1.18 “Drug” shall mean unique molecular species that is chemically distinct from other molecules, and is a drug as defined in 21 USC §321(g)(1), excluding all Biologics and Hydration Fluids.

          1.19 “Exclusive Distribution Agreement” shall mean the Amended and Restated Exclusive Distribution Agreement dated as of the Effective Date, between Halozyme and Baxter (as amended or restated from time to time).

          1.20 “FDA” shall mean the United States Food and Drug Administration or any successor entity thereto.

          1.21 “Field” shall mean the prevention or treatment of any disease, state or condition in humans.

          1.22 “First Commercial Sale” shall mean, with respect to any Product, the first sale of such Product by Baxter, its sublicensee or their respective Affiliates to customers who are

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CONFIDENTIAL TREATMENT REQUESTED

not Affiliates in any country after all applicable marketing approvals (if any) have been granted by the applicable governing health authority.

          1.23 “Generic Drug” shall mean a Drug for which (a) an ANDA has been approved by the FDA in the United States, or (b) the equivalent foreign application has been approved by the applicable governmental authority for any other Major Market Country.

          1.24 “Halozyme In-License” shall mean a license, sublicense or other agreement under which Halozyme has acquired, or hereafter acquires, rights to the Licensed IP Rights.

          1.25 “Hydration Fluid(s)” shall mean all fluids labeled solely for parenteral administration for fluid replacement and maintenance therapy (including but not limited to aqueous solutions of dextrose, maltose and saline, lactated Ringer’s solution, acetate Ringer’s solution, and mixtures thereof).

          1.26 “Licensed IP Rights” shall mean, collectively, the Licensed Know-How Rights, Licensed Patent Rights and Licensed Marks.

          1.27 “Licensed Know-How Rights” shall mean, collectively, Halozyme’s rights (including Halozyme’s grantback rights obtained from third parties) in all trade secret and other know-how rights regarding PH20 Drug (or the use thereof) reasonably necessary or useful to develop, obtain regulatory approval for, manufacture, commercialize or use Products in the Territory in the Field.

          1.28 “Licensed Marks” shall mean those certain trademarks, trade names, designs and markings owned or licensed by Halozyme and designated from time to time in writing by Halozyme for use by Baxter under this Agreement in connection with the packaging, labeling, promotion and marketing of Products in the Territory in the Field.

          1.29 “Licensed Patent Rights” shall mean, collectively, Halozyme’s rights (including Halozyme’s grantback rights obtained from third parties) in (a) all patent applications heretofore or hereafter filed in the Territory which claim, and only to the extent they claim, PH20 Drug alone or in combination with any other composition (or, in each case, the use thereof) reasonably necessary or useful to develop, obtain regulatory approval for, manufacture, commercialize or use Products in the Territory in the Field; (b) all patents that have issued or in the future issue from any of the foregoing patent applications, including without limitation utility models, design patents and certificates of invention; and (c) all divisionals, continuations, continuations-in-part, reissues, renewals, extensions or additions to any such patents and patent applications.

          1.30 “Major Market Countries” shall mean Canada, France, Germany, Italy, Japan, Spain, the United Kingdom and the United States.

          1.31 “Net Sales” shall mean, with respect to any Product, the gross sales price of such Product invoiced by Baxter, its sublicensee or their respective Affiliates to customers who are not Affiliates (or who are Affiliates but are the end users of such Product) less, to the extent reasonable and customary in the pharmaceutical industry and actually paid or accrued by

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CONFIDENTIAL TREATMENT REQUESTED

Baxter, its sublicensee or their respective Affiliates (as applicable), (a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers for spoiled, damaged, out-dated and returned Product; (b) freight and insurance costs incurred by Baxter, its sublicensee or their respective Affiliates (as applicable) in transporting such Product in final form to such customers; (c) cash, quantity and trade discounts, rebates and other price reductions for such Product given to such customers under price reduction programs that are consistent with price reductions given for similar products by Baxter, its sublicensee or their respective Affiliates (as applicable); (d) sales, use, value-added and other direct taxes incurred on the sale of such Product in final form to such customers; and (e) customs duties, surcharges and other governmental charges incurred in exporting or importing such Product in final form to such customers.

          1.32 “PH20 Drug” shall mean the active compound, recombinant human PH20 hyaluronidase (i.e. a truncated form of native human PH20 hyaluronidase consisting of residues 36-482, inclusive, of the native human PH20 hyaluronidase), supplied by Halozyme to Baxter pursuant to this Agreement.

          1.33 “Product” shall mean each of the following:

                 1.33.1 a product comprising (a) one or more Baxter Drugs or Hydration Fluids (and, except as otherwise set forth in Section 3.5, no other active pharmaceutical ingredients), and (b) up to 150 USP units of PH20 Drug, as an active ingredient/excipient for enhancing the dispersion and/or absorption of such one or more Baxter Drugs or Hydration Fluids, in any liquid injectable formulation, and/or any lyophilized formulation, which product is promoted, marketed and sold in a kit (i.e., in separate containers, but packaged and labeled together at a single price) (each, a “Kit Product”); and

                 1.33.2 a product comprising (a) one or more Baxter Drugs or Hydration Fluids (and, except as otherwise set forth in Section 3.5, no other active pharmaceutical ingredients), and (b) up to 150 USP units of PH20 Drug, as an active ingredient/excipient for enhancing the dispersion and/or absorption of such one or more Baxter Drugs or Hydration Fluids, in any liquid injectable formulation, and/or any lyophilized formulation, which product is promoted, marketed and sold in a co-formulation (i.e., pre-formulated together in a single solution in a single container, in a single package with a single label at a single price) (each, a “Coformulation Product”).

Notwithstanding the foregoing, if Baxter reasonably demonstrates (by sufficient clinical pharmacokinetic or bioavailability data) that it is necessary, for safety or efficacy reasons, for the PH20 Drug component of any Kit Product, in each case comprising a specific Baxter Drug (but not any Hydration Fluid), to exceed 150 USP units, then solely with respect to any Kit Product comprising such specific Baxter Drug, the parties shall amend this definition (a) to increase the USP units of PH20 Drug to a mutually acceptable amount, but not to exceed 300 USP units, that is demonstrated to be necessary, and (b) to require that any such Kit Product comprising more than 150, but not more than 300, USP units of PH20 Drug, be an Integrated Kit Product. For purposes of this provision, an “Integrated Kit Product” shall mean a Kit Product in which the container of the PH20 Drug component, and the container of the Baxter Drug component, are physically integrated into a single device (such as a dual-chamber syringe) that Baxter

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CONFIDENTIAL TREATMENT REQUESTED

demonstrates, to Halozyme’s reasonable satisfaction, provides sufficient protection against the independent use of the PH20 Drug component.

Notwithstanding the foregoing, if Baxter reasonably demonstrates (by sufficient clinical pharmacokinetic or bioavailability data) that it is necessary, for safety or efficacy reasons, for the PH20 Drug component of any Coformulation Product, in each case comprising a specific Baxter Drug (but not any Hydration Fluid), to exceed 150 USP units, then solely with respect to any Coformulation Product comprising such specific Baxter Drug, the parties shall amend this definition to increase the USP units of PH20 Drug to a mutually acceptable amount, but not to exceed 1500 USP units, that is demonstrated to be necessary.

          1.34 “Representative” shall mean, as to Baxter, any of its Affiliates and any of its or its Affiliate’s directors, officers, employees, agents, advisors (including without limitation financial, legal and accounting advisors) and controlling persons.

          1.35 “Royalty Term” shall mean, with respect to each Product in each country, the period equal to the longest of (a) if, at the time of the First Commercial Sale of such Product in such country, the use, offer for sale, sale or import of such Product in such country would infringe a Valid Claim (if such Valid Claim were in an issued patent), the term for which such Valid Claim remains in effect and would be infringed (if such Valid Claim were in an issued patent), (b) ten (10) years following the date of the First Commercial Sale of such Product in such country, and (c) the term of the Exclusive Distribution Agreement.

          1.36 “Stock Purchase Agreement” shall mean the Stock Purchase Agreement in the form attached as Exhibit A, dated as of the Effective Date, between Halozyme Therapeutics, Inc., a Nevada corporation, and Baxter International Inc., a Delaware corporation (as amended or restated from time to time).

          1.37 “Territory” shall mean (a) with respect to any Product comprising a Hydration Fluid, Brevibloc, or Suprane (but not any other Baxter Drug), all countries in the world; (b) with respect to any Product comprising a Baxter Drug (other than Brevibloc or Suprane) for which an ANDA (or its foreign equivalent) has been approved by the applicable governmental authorities for all Major Market Countries, all countries in the world; and (c) with respect to any Product comprising a Baxter Drug (other than Brevibloc or Suprane) for which an ANDA (or its foreign equivalent) has been approved by the applicable governmental authorities for one or more (but not all) Major Market Countries, only those one or more Major Market Countries for which such ANDA (or its foreign equivalent) has been approved by the applicable governmental authorities; provided, however, if an ANDA (or its foreign equivalent) for such Baxter Drug has been approved by the applicable governmental authority for each Major Market Country in which the applicable reference drug (for purposes of an ANDA filing or its foreign equivalent) has received marketing approval, Territory shall mean all countries in the world.

          1.38 “Therapeutic Class” shall mean the fourth level grouping of drugs determined by the anatomical therapeutic chemical (ATC) classification system, as published by the World Health Organization (WHO) Collaborating Centre for Drug Statistics Methodology (and, as of the Effective Date, by IMS International, Inc.).

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          1.39 “Valid Claim” shall mean either (a) a claim of an issued and unexpired patent included within the Licensed Patent Rights or the Collaboration Supported Patent Rights, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a pending patent application included within the Licensed Patent Rights or the Collaboration Supported Patent Rights, which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or refiling of such application.

     2. REPRESENTATIONS AND WARRANTIES.

     Each party represents and warrants to the other party as follows:

          2.1 Organization. Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

          2.2 Authorization and Enforcement of Obligations. Such party (a) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder; and (b) has taken all requisite action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

          2.3 Consents. All necessary consents, approvals and authorizations of all governmental authorities and other persons or entities required to be obtained by such party in connection with this Agreement have been obtained.

          2.4 No Conflict. The execution and delivery of this Agreement and the performance of such party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws, regulations or orders of governmental bodies; and (b) do not conflict with, or constitute a default under, any contractual obligation of such party.

          2.5 DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION 6.6, HALOZYME MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE LICENSED IP RIGHTS, INCLUDING WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY REGARDING VALIDITY, ENFORCEABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. THE LICENSED IP RIGHTS ARE PROVIDED “AS IS.”

     3. LICENSE.

          3.1 License Grant to Baxter.

               3.1.1 On the terms and conditions of this Agreement, Halozyme hereby grants to Baxter an exclusive worldwide license under the Licensed IP Rights to develop, make, have made, use, offer for sale, sell and import Products in the Territory for use in the Field.

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Except as expressly set forth in this Agreement, Baxter shall not use the Licensed IP Rights for any other use.

               3.1.2 Baxter shall have the right to grant sublicenses, on a Product-by-Product basis, (a) to third parties, other than Affiliates, for the purpose of developing, manufacturing or commercializing such Product in each case jointly with, or for the benefit of, Baxter, or (b) to Affiliates. Baxter shall provide Halozyme with a copy of each sublicense promptly after executing the same; provided, however, that Baxter shall have the right to redact any confidential terms from the copy provided to Halozyme. Any such sublicense shall be subject and subordinate to the terms and conditions of this Agreement, and Baxter shall remain responsible for all payments due to Halozyme hereunder.

               3.1.3 If a Drug first becomes a Generic Drug at any time after the Effective Date, Baxter may give Halozyme express written request to include such Drug as a Baxter Drug under this Agreement, which notice shall include (a) the common name of such Drug; (b) the specific amino acid sequence or chemical structure thereof (if known); and (c) such other information as Halozyme reasonably requests to determine the uniqueness of such Drug. With respect to each potential Drug requested by Baxter to be added to this Agreement in accordance with this Section 3.1.3, promptly following Halozyme’s receipt of such request, Halozyme shall notify Baxter in writing if Halozyme has the right to grant Baxter a license under Section 3.1 for such Drug. If Halozyme notifies Baxter in writing that it has the right to grant Baxter a license under Section 3.1 for such Drug, such Drug thereafter shall be designated a Baxter Drug. For purposes of this Agreement, Halozyme shall not have the right to grant Baxter a license under Section 3.1 for a Drug if, as of the date on which Halozyme receives a written request from Baxter pursuant to this Section 3.1.3 to include such Drug as a Baxter Drug under this Agreement, any one or more of the following conditions exist: (i) Halozyme or its Affiliate previously granted rights to any third party with respect to such Drug prior to it becoming a Generic Drug; (ii) such Drug is the same, or is of the same Therapeutic Class, as any composition or class with respect to which Halozyme or its Affiliate previously granted rights; (iii) Halozyme or its Affiliate otherwise is precluded or restricted from granting to Baxter a license under Licensed IP Rights with respect to such Drug; or (iv) Halozyme or its Affiliate is engaged (or is obligated to engage) in a bona fide research, development or commercialization program, independent of its efforts hereunder, for any composition that is in the same, or is of the same Therapeutic Class, as such Drug.

               3.1.4 If, as a result of developments in the law, Halozyme determines (in its sole and absolute discretion) that, prior to the date on which an approved and marketed proprietary Drug (excluding all Bisphosphonates, Cytostatics and Cytotoxics) becomes a Generic Drug, Halozyme desires to grant a license under the Licensed IP Rights to a third party (other than to the innovator of, or the owner or licensee of the applicable patent rights for, such Drug or to an Affiliate thereof) to develop and commercialize a product comprising a generic form of such Drug, Halozyme shall give Baxter first written notice thereof, and upon the written request of Baxter, shall enter into an amendment to this Agreement with mutually acceptable terms and conditions, addressing any such changes in the law but without the inclusion of additional financial terms, to grant an exclusive license to Baxter to develop, make, have made, use, offer for sale, sell and import one or more products comprising a generic form of such Drug.

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          3.2 Cross License to Collaboration Supported Patent Rights.

               3.2.1 The parties intend that this Agreement shall not restrict Baxter’s freedom to develop and commercialize Baxter Drugs or Hydration Fluids except as expressly set forth herein regarding recombinant human PH20 hyaluronidase. Halozyme hereby grants to Baxter a royalty-free, perpetual, irrevocable, nonexclusive, worldwide license (with the right to grant sublicenses) under the Collaboration Supported Drug or Fluid Patent Rights (that are not also Collaboration Supported PH20 Patent Rights) for all uses, other than to make, have made, use, offer for sale, sell and import Products in the Territory.

               3.2.2 The parties intend that this Agreement shall not restrict Halozyme’s freedom to develop and commercialize recombinant human PH20 hyaluronidase except as expressly set forth herein regarding Baxter Drugs or Hydration Fluids. Baxter hereby grants to Halozyme a royalty-free, perpetual, irrevocable, nonexclusive, worldwide license (with the right to grant sublicenses) under the Collaboration Supported PH20 Patent Rights for all uses, other than to make, have made, use, offer for sale, sell and import Products in the Territory. Halozyme shall use commercially reasonable efforts to obtain a similar grantback license from any third party that enters into a development agreement with Halozyme for rights to make and sell products comprising recombinant human PH20 hyaluronidase, and if Halozyme is unable to obtain such a grantback license from any such third party, then Halozyme shall not grant a sublicense to such third party under the license grant from Baxter under this Section 3.2.2, and any such sublicense granted by Halozyme to such third party shall be void.

          3.3 No Implied Licenses. Only licenses and rights expressly granted herein shall be of legal force and effect. No license or other right shall be created hereunder by implication, estoppel or otherwise.

          3.4 Exclusivity.

               3.4.1 Except as otherwise expressly permitted by this Agreement, neither party nor its Affiliates shall develop, manufacture, sell or otherwise commercialize any product in a kit form (i.e., in separate containers, but packaged and labeled together at a single price) or a co-formulation (i.e., pre-formulated together in a single solution in a single container, in a single package with a single label at a single price), in each case that comprises recombinant human PH20 hyaluronidase and any Baxter Drug or Hydration Fluid, or enter into any agreement with any third party to do the same, without the prior express written consent of the other party.

               3.4.2 Notwithstanding anything to the contrary in this Agreement, Halozyme reserves the right to grant rights and licenses to third parties under the Licensed IP Rights to conduct research (but not clinical development or commercial sales) regarding recombinant human PH20 hyaluronidase (whether alone or in combination with other compositions), unless such right or license identifies or reasonably suggests that such other composition as a Baxter Drug or Hydration Fluid.

          3.5 Other Active Ingredients. If Baxter desires, for good faith reasons of safety or efficacy, to include any other active pharmaceutical ingredient (other than PH20 Drug or a Baxter Drug or Hydration Fluid) in a Product, then Baxter shall give written notice thereof,

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and Halozyme in good faith shall consider permitting Baxter the nonexclusive right to include such other active pharmaceutical ingredient in such Product, provided that (a) a Baxter Drug or Hydration Fluid is the primary active pharmaceutical ingredient in such Product, (b) Halozyme has the right to grant such rights to Baxter, (c) Halozyme does not have a bona fide internal program of development or commercialization with respect to such other active pharmaceutical ingredient, and (d) granting such rights do not otherwise conflict with Halozyme’s PH20 hyaluronidase development and commercialization program whether alone or with actual or potential licensees or other collaborators. If Halozyme gives Baxter written notice that Halozyme agrees to permit Baxter the nonexclusive right to include such other active pharmaceutical ingredient in such Product, then effective upon receipt by Baxter of such written notice, the definition of such Product only (and no other Products) shall be amended to include, on a nonexclusive basis, such other active pharmaceutical ingredient in such Product provided that a Baxter Drug or Hydration Fluid is the primary active pharmaceutical ingredient in such Product.

     4. FINANCIAL TERMS.

          4.1 Equity Investment. On the Effective Date, Baxter International Inc., a Delaware corporation, shall make an equity investment in Halozyme as provided in the Stock Purchase Agreement.

          4.2 Royalties.

               4.2.1 Within thirty (30) days following the First Commercial Sale of each Product in each country, Baxter shall give written notice to Halozyme thereof.

               4.2.2 During the applicable Royalty Term, Baxter shall pay to Halozyme royalties equal to *** percent (***%) of Net Sales by Baxter, its sublicensees and their respective Affiliates of Products.

               4.2.3 If during the applicable Royalty Term the manufacture, use, offer for sale, sale or import of such Product in the country in which manufactured, used, offered for sale, sold or imported would not infringe a Valid Claim (if such Valid Claim were in an issued patent) in such country, the applicable royalty under Section 4.2.2 for such Product in such country shall be reduced by one-half (¹/2) following the bona fide commercial launch of an approved Generic Drug thereof in such jurisdiction.

               4.2.4 With respect to each Product, the minimum royalty shall be $*** per item of Product, unless such Product contains more than 150 USP units of PH20 Drug, in which case the applicable minimum royalty shall be increased on a pro-rata basis to reflect the increase in USP unit dose of PH20 Drug included in such Product; provided, however, if Baxter reasonably demonstrates that it is not commercially practicable to sell any Product that contains more than 150 USP units of PH20 Drug bearing the applicable minimum royalty as determined above, then with respect to such Product only, the parties shall amend this provision to reduce the applicable minimum royalty with respect to such Product to a mutually acceptable amount.

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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               4.2.5 If Baxter, its sublicensees or their respective Affiliates sells a Product to a third party who also purchases other products or services from Baxter, its sublicensees or their respective Affiliates, and Baxter, its sublicensees or their respective Affiliates discounts the purchase price of such Product to a greater degree than it generally discounts the price of its other products or services to such customer, then in such case the Net Sales for the sale of such Product to such third party shall equal the arm’s length price that third parties would generally pay for the Product alone when not purchasing any other product or service from Baxter, its sublicensee or their respective Affiliates. For purposes of this provision “discounting” includes establishing the list price at a lower-than-normal level.

          4.3 API Transfer Price. For all API supplied by Halozyme under Section 6, Baxter shall pay to Halozyme a transfer price equal to *** percent (***%) of the fully-burdened cost to Halozyme to manufacture (or have manufactured), store and supply API; provided, however, in no event shall the API Price exceed *** dollars ($***) per 150 USP units (for the liquid injectable formulation supplied by Halozyme under the Development Agreement as of the Effective Date). Halozyme shall invoice Baxter for all API upon shipment in accordance with Section 6, and Baxter shall pay each such invoice within sixty (60) days after receipt.

          4.4 Royalty Reports.

               4.4.1 Within sixty (60) days after the end of each calendar quarter following the First Commercial Sale of a Product by Baxter, its sublicensees or their respective Affiliates, Baxter shall furnish to Halozyme a written report showing in reasonably specific detail, on a Product-by-Product and country-by-country basis, (a) the gross sales of all Products sold by Baxter, its sublicensees and their respective Affiliates during such calendar quarter and the calculation of Net Sales from such gross sales; (b) the calculation of the royalties, if any, which shall have accrued based upon such Net Sales; (c) the withholding taxes, if any, required by law to be deducted with respect to such sales; and (d) the exchange rates, if any, used in determining the amount of United States dollars.

               4.4.2 With respect to sales of Products invoiced in United States dollars, all such amounts shall be expressed in United States dollars. With respect to sales of Products invoiced in a currency other than United States dollars, all such amounts shall be expressed both in the currency in which the sale is invoiced and in the United States dollar equivalent. The United States dollar equivalent shall be calculated using the exchange rate (local currency per US$1) published in The Wall Street Journal, Western Edition, under the heading “Currency Trading” on the last business day of the applicable calendar quarter. All royalties payable hereunder shall be calculated based on Net Sales expressed in United States dollars.

               4.4.3 Baxter shall keep complete and accurate records in sufficient detail to properly reflect all gross sales and Net Sales and to enable the royalties payable to be determined.

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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               4.4.4 All royalties shown to have accrued by each royalty report provided under this Section 4.4 shall be payable on the date such royalty report is due. Payment of royalties in whole or in part may be made in advance of such due date.

          4.5 Audits.

               4.5.1 Upon the written request of Halozyme and not more than once in each calendar year, Baxter shall permit an independent certified public accounting firm of nationally recognized standing, selected by Halozyme and reasonably acceptable to Baxter, at Halozyme’s expense, to have access during normal business hours to such records of Baxter as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any year ending not more than thirty-six (36) months prior to the date of such request. The accounting firm shall disclose to Halozyme only whether the reports are correct or not and the specific details concerning any discrepancies. No other information shall be shared.

               4.5.2 If such accounting firm concludes that additional royalties were owed during the audited period, Baxter shall pay such additional royalties within sixty (60) days of the date Halozyme delivers to Baxter such accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid by Halozyme; provided, however, if the audit discloses that the royalties payable by Baxter for such period are more than one hundred five percent (105%) of the royalties actually paid for such period, then Baxter shall pay the reasonable fees and expenses charged by such accounting firm.

               4.5.3 Halozyme shall treat all financial information subject to review under this Section 4.5 as confidential, and shall cause its accounting firm to retain all such financial information in confidence.

          4.6 Withholding Taxes. Baxter shall be entitled to deduct from the royalty payments otherwise due to Halozyme hereunder the amount of any withholding taxes, value-added taxes or other taxes, levies or charges with respect to such royalty payments that are required to be withheld by Baxter, to the extent Baxter pays to the appropriate governmental authority on behalf of Halozyme such taxes, levies or charges. Baxter shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld on behalf of Halozyme by Baxter. Baxter promptly shall deliver to Halozyme proof of payment of all such taxes, levies and other charges, together with copies of all communications from or with such governmental authority with respect thereto.

          4.7 Payment Method. All payments by Baxter to Halozyme hereunder shall be in United States Dollars in immediately available funds and shall be made by wire transfer from a United States bank located in the United States to such bank account as designated from time to time by Halozyme to Baxter.

     5. PRODUCT DEVELOPMENT AND COMMERCIALIZATION.

          5.1 Responsibility.

               5.1.1 Except as otherwise set forth in this Section 5.1, Baxter shall be solely responsible, at its sole cost, for conducting the development, manufacture, regulatory

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approval and commercialization of Products in the Territory, and shall own all regulatory applications, filings, approvals and licenses for each Product.

               5.1.2 Baxter shall engage Halozyme, and Halozyme shall have the exclusive right, to conduct development and regulatory work for the PH20 Drug component of each Product. All such activities by Halozyme shall be conducted at the reasonable request of Baxter pursuant to a mutually acceptable written workplan that is customary in the industry. Following the end of each calendar quarter, Halozyme shall invoice Baxter for the fully-burdened cost to Halozyme to conduct such activities, and Baxter shall pay each such invoice within sixty (60) days after receipt.

               5.1.3 Halozyme shall own the DMF for the PH20 Drug component of each Product. Baxter shall have the right to cross-reference such DMF, together with all regulatory approvals for the Standalone Product (as defined in the Development Agreement), solely for the purposes of the applicable regulatory applications for Products. In countries where this is not feasible, Halozyme shall provide Baxter, at Baxter’s cost, with such information in Halozyme’s control regarding the PH20 Drug component of each Product as is reasonably necessary for Baxter to include in the applicable regulatory applications for such Product.

               5.1.4 Prior to finalizing the protocol for any clinical trial for a Product, (a) Baxter shall provide Halozyme with a copy of the reasonably complete draft of such protocol; (b) Halozyme shall have a reasonable opportunity (not to exceed thirty (30) days) to review, comment and consult on each such protocol; and (c) the parties shall meet to discuss Halozyme’s comments relating to the PH20 Drug component of such Product, and (d) Baxter shall in good faith consider the comments of Halozyme.

          5.2 Diligence Efforts. Baxter shall use commercially reasonable efforts to actively develop and obtain regulatory approvals to market Products in Major Market Countries hereunder, and following such approval, shall use commercially reasonable efforts to maximize Net Sales of such Products. Commercially reasonable efforts shall mean those efforts and resources consistent with the exercise of prudent scientific and business judgment, as applied to other pharmaceutical products of similar market potential and market size and at a similar stage in the development or life of such product.

          5.3 Research and Development Reports. Baxter shall keep complete and accurate records of its activities conducted under this Agreement and the results thereof. Within thirty (30) days after the end of each June, Baxter shall prepare and provide Halozyme with a reasonably detailed written report of the activities conducted under this Agreement, and the results thereof, through such date of such report to develop and obtain regulatory approvals to market Products in the Territory.

          5.4 Trademarks.

               5.4.1 Baxter, its sublicensee or their respective Affiliates shall have the right to determine the names and trademarks to use in connection with the promotion, marketing and sale of Products, and shall own and maintain such trademarks for use in connection with the promotion, marketing and sale of Products; provided, however, that Baxter shall include on all

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packaging, labeling and marketing and promotional materials regarding any Product the name Halozyme, and the mark Enhanze (or such other mark reasonably requested by Halozyme) as a secondary mark, reasonably identifying that such product incorporates technology of Halozyme. Nothing in this Agreement shall create an obligation on Halozyme to register or otherwise maintain in force any marks.

               5.4.2 Except as otherwise set forth above, Baxter, its sublicensees and their respective Affiliates shall not (a) use any of Halozyme’s trademarks, or any mark or name confusingly similar thereto, as part of a corporate or business name or in any other manner, or (b) register any trade mark or trade name (including any company name) which is identical to or confusingly similar to or incorporates any trade mark or trade name which Halozyme or any associated company owns or claims rights in. Any goodwill associated with any of Halozyme’s names or marks affixed or applied or used in connection with Products shall accrue to the sole benefit of Halozyme.

          5.5 Adverse Event Reporting. Each party shall promptly notify the other party immediately of any information that comes to such party’s attention concerning any serious or unexpected side effect, injury, toxicity or sensitivity reaction, or any unexpected incidence, and the severity thereof, associated with the clinical uses, studies, investigations, tests and marketing of PH20 Drug or a Product. For purposes of this Section 5.5, “serious” shall mean an experience which (a) results in the death, permanent or substantial disability, in-patient hospitalization or prolongation of hospitalization, or (b) is a congenital anomaly, cancer, the result of an overdose or life threatening (only if unrelated to primary disease); and “unexpected” shall mean (x) for a nonmarketed Product, an experience that is not identified in nature, severity or frequency in the current clinical investigator’s confidential information brochure, and (y) for a marketed product, an event which is not listed in the current labeling for such product, and includes an event that may be symptomatically and pathophysiologically related to an experience listed in the labeling but differs from the event because of increased frequency or greater severity or specificity. Each party further shall immediately notify the other party of any information received regarding any threatened or pending action by an agency that may affect the safety and efficacy claims of a product. Upon receipt of any such information, the parties shall consult with each other in an effort to arrive at a mutually acceptable procedure for taking appropriate action; provided, however, that nothing contained herein shall restrict either party’s right to make a timely report of such matter to any government agency or take other action that it deems to be appropriate or required by applicable law, regulation or court order.

          5.6 Advisory Committee.

               5.6.1 The Purpose of the Advisory Committee. The purpose of the Advisory Committee shall be (a) to facilitate the exchange of information between the parties regarding Products, (b) to review and discuss the development and commercialization plans (including the annual marketing plans) and the product launch plans for each Product in each jurisdiction, and (c) to review and discuss priorities for the development and commercialization of Products. Baxter shall have final decision making authority with respect to the development and commercialization of Products. For the avoidance of doubt, this authority does not affect Baxter’s contractual obligations under Section 5.2 or Halozyme’s rights under Section 5.1.2 of this Agreement.

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               5.6.2 Composition of the Advisory Committee. The Advisory Committee shall consist of three (3) named representatives of Baxter and three (3) named representatives of Halozyme. Each party shall appoint its respective representatives to the Advisory Committee from time to time, and may substitute one or more of its representatives, in its sole discretion, effective upon notice to the other party of such change but shall use commercially reasonable efforts to maintain stability of Advisory Committee representation.

               5.6.3 Meetings. The Advisory Committee shall meet not less than twice each calendar year, on such dates and at such times and places as agreed to by Baxter and Halozyme.

               5.6.4 Advisory Committee Minutes and Reports. One representative of each party shall be designated to take minutes of each Advisory Committee meeting. Within fifteen (15) days following each Advisory Committee meeting during the term of the Agreement, a member of the Advisory Committee shall prepare and provide to each party reasonably detailed written minutes which shall summarize the outcome of the meeting, provided that such minutes shall not be finalized unless they have been expressly approved in writing by each party.

          5.7 Alliance Managers. Promptly following the Effective Date, each party shall appoint a person to act as its alliance manager to coordinate its business activities under this Agreement, and a project leader to coordinate its technical activities under this Agreement. The alliance managers shall be the primary business contacts, and the project leaders shall be the primary technical contacts, between the parties with respect to their respective activities under this Agreement. Each party shall notify in writing the other party as soon as practicable upon making, and changing, any of these appointments.

     6. SUPPLY OF API.

          6.1 Manufacture and Sale. On the terms and conditions of this Section 6, Halozyme shall manufacture (or have manufactured), sell and deliver to Baxter all API required by Baxter, its sublicensees and their respective Affiliates for use in Products. Baxter shall purchase from Halozyme all quantities of API required by Baxter, its sublicensees and their respective Affiliates for use in Products. Baxter, its sublicensees and their respective Affiliates shall use API solely for the development, manufacture and commercialization of Products pursuant to this Agreement.

          6.2 Manufacturing Practices.

               6.2.1 Halozyme shall manufacture, or have manufactured, API under this Section 6 in conformity with the API Specifications and in accordance with all applicable laws and regulations. The API Specifications shall not be materially amended without the prior written consent of both parties.

               6.2.2 Unless the parties otherwise mutually agree, Halozyme shall manufacture, or have manufactured, API under this Section 6 in accordance with GMP.

               6.2.3 Baxter shall have the right, at its sole expense, to audit Halozyme for compliance with applicable laws and regulations and GMP on reasonable notice during

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normal business hours and not more than once in each calendar year, subject to reasonable confidentiality obligations.

               6.2.4 Halozyme shall provide Baxter with certificates of analysis for all API supplied hereunder based upon a reference standard established by Halozyme and reasonably acceptable to Baxter.

               6.2.5 Upon the reasonable request of Baxter, Halozyme shall provide Baxter with such information, including analytical and manufacturing documentation, requested by Baxter regarding quality control of API supplied under this Section 6.

               6.2.6 All information disclosed or obtained pursuant to this Section 6 shall be Confidential Information of Halozyme.

          6.3 Forecasts and Orders.

               6.3.1 Not less than one hundred eighty (180) days prior to the first day of each calendar quarter (commencing with the first calendar quarter in which Baxter, its sublicensees or their respective Affiliates order API from Halozyme hereunder), Baxter shall prepare and provide Halozyme with a written forecast of its good faith estimated requirements for API under this Section 6.3 for each of the subsequent six (6) calendar quarters. Baxter shall not (a) increase or decrease the quantity estimated for the first quarterly period of each forecast from the quantity estimated for the second quarterly period of the previous forecast, or (b) increase or decrease the quantity estimated for the second and third quarterly periods of each forecast by more than twenty five percent (25%) of the quantity estimated for the third and fourth quarterly periods of the previous forecast, respectively, without the prior express written consent of Halozyme. The quantities estimated for the fifth and sixth quarterly periods of each forecast shall be non-binding, and for planning purposes only.

               6.3.2 Baxter shall be required to purchase one hundred percent (100%) of the quantity forecasted for each API under this Section 6.3 for the first and second quarterly periods of each forecast under Section 6.3.1.

               6.3.3 Halozyme shall be required to supply the quantity of API ordered by Baxter under this Section 6.3 in any calendar quarter up to one hundred ten percent (110%) of the quantity forecasted for the first quarterly period of the most recent forecast. If Baxter’s orders in any calendar quarter exceed one hundred ten percent (110%) of the quantity forecasted for the first quarterly period of the most recent forecast, Halozyme shall use good faith efforts to supply such excess. Halozyme shall use commercially reasonable efforts to meet Baxter’s delivery requirements specified in accordance with Section 6.3.4.

               6.3.4 Baxter shall make all purchases under this Section 6.3 by submitting firm purchase orders to Halozyme. Each such purchase order shall be in writing in a form reasonably acceptable to Halozyme, and shall specify the quantity of API ordered, the place of delivery and the required delivery date therefor, which shall not be less than sixty (60) days after the date of such purchase order. No additional terms of any such purchase order shall be binding on Halozyme and are expressly rejected hereby. In the event of a conflict between the

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terms and conditions of any purchase order and this Agreement, the terms and conditions of this Agreement shall prevail.

          6.4 Delivery and Acceptance.

               6.4.1 All API supplied under this Agreement shall be shipped FCA (Incoterms 2000) place of manufacture to such location as designated by Baxter. Title and risk of loss and damages to the API purchased by Baxter hereunder shall pass to Baxter upon receipt by the applicable carrier.

               6.4.2 Baxter shall pay all freight, insurance charges, taxes, import and export duties, inspection fees and other charges applicable to the sale and transport of API purchased by Baxter under this Section 6.4.

               6.4.3 If a shipment of API or any portion thereof is not in conformance with the API Specifications, then Baxter shall have the right to reject such shipment of API if the entire shipment is nonconforming, or the portion thereof that fails to so conform, as the case may be. Baxter shall give written notice to Halozyme of its rejection hereunder, within thirty (30) days after Baxter’s receipt of such shipment, specifying the grounds for such rejection. All or any part of any shipment may be held for Halozyme’s disposition, at Halozyme’s expense if found to be not in conformance with the API Specifications. Halozyme shall use its commercially reasonable efforts to cure such rejection or replace such nonconforming shipment of API, or portion thereof, within ninety (90) days after receipt of notice of rejection thereof.

               6.4.4 Baxter’s grounds for rejection shall be conclusive unless Halozyme notifies Baxter, within thirty (30) days of receipt by Halozyme of the notice of rejection, that it disagrees with such grounds. In the event of such a notice by Halozyme, representative samples of the batch of API in question shall be submitted to a mutually acceptable independent laboratory or consultant (if not a laboratory analysis issue) for analysis or review, the costs of which shall be paid by the party that is determined by the independent laboratory or consultant to have been incorrect in its determination of whether the applicable API should be rejected.

          6.5 LIMITATION OF LIABILITY. HALOZYME’S SOLE LIABILITY TO BAXTER, AND BAXTER’S SOLE REMEDY, UNDER SECTION 6.4.3 SHALL BE THE REJECTION AND REPLACEMENT OF NON-CONFORMING API.

          6.6 Warranty. Halozyme warrants that all API delivered to Baxter pursuant to this Agreement shall conform with the API Specifications, shall be free from defects in material and workmanship, and shall be manufactured in accordance with GMP (unless the parties otherwise mutually agree) and in compliance with applicable laws and regulations. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, HALOZYME MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO API. HALOZYME DISCLAIMS ALL OTHER WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

          6.7 Supply Strategy. Commencing not later than the first anniversary after the Effective Date, Halozyme shall be responsible for implementing a commercially reasonable

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supply strategy for API to meet Baxter’s reasonably anticipated forecasts provided pursuant to Section 6.3.1. Halozyme shall review such supply strategy with Baxter at least annually, and prior to implementing any material changes requiring a CBE-30 or equivalent regulatory filing.

     7. PATENT RIGHTS.

          7.1 Prosecution and Maintenance.

               7.1.1 Except as otherwise set forth in Section 7.1.2, Halozyme shall have the sole right, at its sole expense, to prepare, file, prosecute and maintain Licensed Patent Rights. Halozyme shall consider in good faith the interests of Baxter in so doing. Baxter shall assist Halozyme, upon request and at Halozyme’s sole expense, and to the extent commercially reasonable, in connection therewith. With respect to each patent application and patent within the Licensed Patent Rights, Halozyme shall (a) provide Baxter with any patent application filed by Halozyme promptly prior to filing and receive and incorporate reasonable comments by Baxter thereon; (b) provide Baxter with any patent application filed by Halozyme promptly after such filing; and (c) notify Baxter of any interference, opposition, reexamination request, nullity proceeding, appeal or other interparty action, review it with Baxter as reasonably requested, and receive and incorporate reasonable comments by Baxter thereon.

               7.1.2 Baxter shall have the sole right, at its sole expense, to prepare, file, prosecute and maintain Collaboration Supported Drug or Fluid Patent Rights that claim, and only to the extent they claim, a Product, Baxter Drug or Hydration Fluid, or the manufacture or use thereof. Baxter shall consider in good faith the interests of Halozyme in so doing. Halozyme shall assist Baxter, upon request and at Baxter’s sole expense, and to the extent commercially reasonable, in connection therewith.

               7.1.3 Any patent or patent application that is generated pursuant to activities contemplated by this Agreement which are not Collaboration Supported Patent Rights, shall be owned and prosecuted by the inventing party as determined under U.S. law or in the case of joint inventions, shall be owned jointly and prosecuted by the party determined by mutual agreement of the parties. Each party shall have the right to freely exploit, transfer, license or encumber its rights in any such jointly-owned patent rights without the consent of, or payment or accounting to, the other party.

          7.2 Enforcement.

               7.2.1 Except as otherwise set forth in Section 7.2.2, Halozyme shall have the sole right, at its expense, to enforce Licensed Patent Rights. Halozyme shall consider in good faith the interests of Baxter in so doing. Baxter shall assist Halozyme, upon request and at Halozyme’s sole expense, and to the extent commercially reasonable, in connection therewith.

               7.2.2 Baxter shall have the sole right, at its expense, to enforce Collaboration Supported Drug or Fluid Patent Rights. Baxter shall consider in good faith the interests of Halozyme in so doing. Halozyme shall assist Baxter, upon request and at Baxter’s sole expense, and to the extent commercially reasonable, in connection therewith.

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CONFIDENTIAL TREATMENT REQUESTED

               7.2.3 With respect to any substantial and continuing infringement of the Licensed Patent Rights (other than Collaboration Supported Drug or Fluid Patent Rights that claim, and only to the extent they claim, a Product, Baxter Drug or Hydration Fluid, or the manufacture or use thereof) by a third party making, using, offering for sale, selling or importing a product that comprises a Baxter Drug or Hydration Fluid in a country in the Territory for use in the Field, if Halozyme fails to abate such infringement or to file an action to abate such infringement within ninety (90) days after a written request from Baxter to do so, or if Halozyme discontinues the prosecution of any such action after filing without abating such infringement, then until such time as such infringement is abated, the royalty rate for any Product comprising such Baxter Drug or Hydration Fluid in such country shall be reduced by one-half (1/2) of the royalty rate set forth in Section 4.2.2.

               7.2.4 With respect any action to enforce the Licensed Patent Rights to abate any infringement of the Licensed Patent Rights by a third party making, using, offering for sale, selling or importing a product that comprises a Baxter Drug or Hydration Fluid in a country in the Territory for use in the Field, all monies recovered upon the final judgment or settlement of any such action shall be used (a) first, to reimburse the costs and expenses (including reasonable attorneys’ fees and costs) of Halozyme and Baxter; (b) second (to the extent that damages are awarded for lost sales or lost profits from the sale of Products), to Halozyme and Baxter in equal shares; and (c) the remainder to the account of the party or parties that undertake such actions to the extent of their financial participation therein.

     8. CONFIDENTIALITY.

          8.1 Confidentiality. During the term of this Agreement and for a period of five (5) years following the expiration or earlier termination hereof, each party shall maintain in confidence the Confidential Information of the other party, shall not use or grant the use of the Confidential Information of the other party except as expressly permitted hereby, and shall not disclose the Confidential Information of the other party except on a need-to-know basis to such party’s directors, officers, employees and consultants, to the extent such disclosure is reasonably necessary in connection with such party’s activities as expressly authorized by this Agreement. To the extent that disclosure to any person is authorized by this Agreement, prior to disclosure, a party shall obtain written agreement of such person to hold in confidence and not disclose, use or grant the use of the Confidential Information of the other party except as expressly permitted under this Agreement. Each party shall notify the other party promptly upon discovery of any unauthorized use or disclosure of the other party’s Confidential Information.

          8.2 Terms of Agreement. Neither party shall disclose any terms or conditions of this Agreement to any third party without the prior consent of the other party; provided, however, that a party may disclose the terms or conditions of this Agreement, (a) on a need-to-know basis to its legal and financial advisors to the extent such disclosure is reasonably necessary, and (b) to a third party in connection with (i) an equity investment in such party, (ii) a merger, consolidation or similar transaction by such party, or (iii) the sale of all or substantially all of the assets of such party. Notwithstanding the foregoing, prior to execution of this Agreement, the parties have agreed upon the substance of information that can be used to describe the terms and conditions of this transaction, and each party may disclose such

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information, as modified by mutual written agreement of the parties, without the consent of the other party.

          8.3 Permitted Disclosures. The confidentiality obligations under this Section 8 shall not apply to the extent that a party is required to disclose information by applicable law, regulation or order of a governmental agency or a court of competent jurisdiction; provided, however, that such party shall provide written notice thereof to the other party, consult with the other party with respect to such disclosure and provide the other party sufficient opportunity to object to any such disclosure or to request confidential treatment thereof.

          8.4 Publications. It is in the parties’ interest that Baxter publish the results of its research and/or development in order to obtain recognition within the scientific community and to advance the state of scientific knowledge, and such publication shall not be prohibited but shall be subject to the following: If Baxter desires to make any such publication (including any oral disclosure made without obligation of confidentiality), Baxter shall provide Halozyme with a copy of the proposed written publication at least thirty (30) days prior to submission for publication, or an outline of such oral disclosure at least fifteen (15) days prior to presentation. At the request of Halozyme, Baxter shall remove any Confidential Information of Halozyme therefrom. Halozyme additionally shall have the right (a) to propose modifications to the publication for patent reasons, and (b) to request a reasonable delay in publication in order to protect patentable information. If Halozyme requests such a delay, Baxter shall delay submission or presentation of the publication for a period of sixty (60) days to enable Halozyme to prepare and file applicable patent applications. Upon the expiration of such thirty (30) day period (in the case of proposed written disclosures) or fifteen (15) day period (in the case of proposed written disclosures) from receipt by Halozyme, subject to the requirement to remove any Confidential Information of Halozyme, Baxter shall be free to proceed with the written publication or the presentation, respectively, unless Halozyme has requested the delay described above. Halozyme shall not publish any studies, clinical trials or results thereof regarding Products, and Baxter shall not publish any studies, clinical trials or results thereof regarding PH20 Drug other than as a component of Products.

     9. INDEMNIFICATION AND INSURANCE.

          9.1 By Baxter. Baxter shall indemnify and hold harmless Halozyme, and its directors, officers, employees and agents, from and against all losses, liabilities, damages and expenses, including reasonable attorneys’ fees and costs (collectively, “Liabilities”), resulting from any claims, demands, actions or other proceedings by any third party to the extent resulting from (a) the breach of any representation, warranty or covenant by Baxter under this Agreement; (b) the use of the Licensed IP Rights, by Baxter, its sublicensees or their respective Affiliates; (c) the research, development, manufacture, use, sale, handling or storage of Products by or on behalf of Baxter, its sublicensees or their respective Affiliates, customers or end-users; or (d) the use of the Confidential Information of Halozyme by Baxter, its sublicensees or their respective Affiliates.

          9.2 By Halozyme. Halozyme shall indemnify and hold harmless Baxter, and its directors, officers, employees and agents, from and against all Liabilities resulting from any

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CONFIDENTIAL TREATMENT REQUESTED

claims, demands, actions or other proceedings by any third party to the extent resulting from (a) the breach of any representation, warranty or covenant by Halozyme under this Agreement; or (b) the use by Halozyme of the Confidential Information of Baxter.

          9.3 Procedure. If a party (the “Indemnitee”) intends to claim indemnification under this Section 9.3, it shall promptly notify the other party (the “Indemnitor”) in writing of any claim, demand, action or other proceeding for which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have the right to participate in, and, to the extent the Indemnitor so desires, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitor, if representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing interests between the Indemnitee and any other party represented by such counsel in such proceeding. The obligations of this Section 9.3 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve the Indemnitor of any obligation to the Indemnitee under this Section 9.3, but the omission so to deliver written notice to the Indemnitor shall not relieve it of any obligation that it may have to any party claiming indemnification otherwise than under this Section 9.3. The Indemnitee, its employees and agents, shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any claim, demand, action or other proceeding covered by this Section 9.3.

          9.4 Insurance. Each party shall maintain insurance, including product liability insurance, with respect to its activities under this Agreement regarding Products in such amount as such party customarily maintains with respect to similar activities for its other products, but not less than such amount as is reasonable and customary in the industry. Each party shall maintain such insurance for so long as it continues its activities under this Agreement, and thereafter for so long as such party customarily maintains insurance for itself covering similar activities for its other products. Baxter retains the right to insure or self-insure at its sole discretion, the above coverage.

     10. TERM AND TERMINATION.

          10.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated pursuant to this Section 10, shall continue in effect until the expiration of Baxter’s obligation to pay royalties hereunder.

          10.2 Termination for Breach. If a party has materially breached this Agreement and such material breach shall continue for thirty (30) days for a monetary breach, and sixty (60) days for a non-monetary breach, or such additional time reasonably necessary to cure such non-monetary breach, provided that the breaching party has commenced a cure within the sixty (60) day period and is diligently pursuing completion of such cure, such additional period not to exceed one hundred and twenty (120) days in total after written notice of such breach was provided to the breaching party by the nonbreaching party, the nonbreaching party shall have the right at its option to terminate this Agreement effective at the end of such period.

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          10.3 Termination by Baxter. Baxter may terminate this Agreement, either in whole or on a Baxter Drug or Hydration Fluid-by-Baxter Drug or Hydration Fluid basis, at any time upon ninety (90) days prior written notice to Halozyme.

          10.4 Effect of Expiration or Termination.

          10.4.1 Expiration or termination of this Agreement shall be without prejudice to any rights which shall have accrued to the benefit of a party prior to such expiration or termination. Without limiting the foregoing, Sections 2.5, 3.2, 3.3, 4.5, 6.4.4, 6.5, 8, 10.4 and 11 shall survive any expiration or termination of this Agreement.

          10.4.2 Except as otherwise expressly set forth in this Agreement, promptly upon the expiration or earlier termination of this Agreement, each party shall return to the other party all tangible items regarding the Confidential Information of the other party and all copies thereof; provided, however, that each party shall have the right to retain one (1) copy for its legal files for the sole purpose of determining its obligations hereunder.

     11. MISCELLANEOUS.

          11.1 Governing Law. This Agreement shall be governed by, interpreted and construed in accordance with the laws of the State of New Jersey, without regard to the conflicts of law principles thereof, and shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods. The courts of the State of California shall have jurisdiction over the parties hereto in all matters arising hereunder, and the exclusive venue for any such action shall be a state or federal court located in San Diego County.

          11.2 Waiver. No waiver by a party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

          11.3 Assignment. Neither this Agreement nor any right or obligation hereunder may be assigned or delegated, in whole or part, by either party without the prior express written consent of the other; provided, however, that either party may, without the written consent of the other, assign this Agreement and its rights and delegate its obligations hereunder in connection with the transfer or sale of all or substantially all of its business, or in the event of its merger, consolidation, change in control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported assignment in violation of this Section 11.3 shall be void.

          11.4 Independent Contractors. The relationship of the parties hereto is that of independent contractors. The parties hereto are not deemed to be agents, partners or joint venturers of the others for any purpose as a result of this Agreement or the transactions contemplated thereby.

          11.5 Further Actions. Each party shall execute, acknowledge and deliver such further documents and instruments and to perform all such other acts as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

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          11.6 Notices. All requests and notices required or permitted to be given to the parties hereto shall be given in writing, shall expressly reference the section(s) of this Agreement to which they pertain, and shall be delivered to the other party, effective on receipt, at the appropriate address as set forth below or to such other addresses as may be designated in writing by the parties from time to time during the term of this Agreement.

If to Halozyme:	Halozyme, Inc.
	11588 Sorrento Valley Road, Suite 17
	San Diego, California 92121
	Attn: President and Chief Executive Officer
with a copy to:	Morrison & Foerster LLP
	12531 High Bluff Drive, Suite 100
	San Diego, California 92121
	Attention: Mark R. Wicker
If to Baxter:	Baxter Healthcare Corporation
	95 Spring Street
	New Providence, New Jersey 07974
	Attn: General Manager
With a copy to:	Baxter Healthcare Corporation
	One Baxter Parkway
	Deerfield, Illinois 60015-4633
	Attn: General Counsel
And to:	Baxter Healthcare SA
	Hertistrasse 2
	CH-8304 Wallisellen
	Switzerland
	Attn: Corporate Counsel

          11.7 Force Majeure. Nonperformance of a party (other than for the payment of money) shall be excused to the extent that performance is rendered impossible by strike, fire, earthquake, flood, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the nonperforming party; provided, however, that the nonperforming party shall use commercially reasonable efforts to resume performance as soon as reasonably practicable.

          11.8 No Consequential Damages. IN NO EVENT SHALL A PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING WITHOUT LIMITATION LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 11.8 IS INTENDED TO LIMIT OR RESTRICT

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THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER SECTION 9 ABOVE.

          11.9 Halozyme In-Licenses. Notwithstanding anything to the contrary in this Agreement, the grant of rights by Halozyme under this Agreement shall be subject to and limited in all respects by the terms of the applicable Halozyme In-License(s) pursuant to which Halozyme acquired any Licensed IP Rights, and all rights or sublicenses granted under this Agreement shall be limited to the extent that Halozyme may grant such rights and sublicenses under such Halozyme In-Licenses.

          11.10 Complete Agreement. This Agreement, together with the Stock Purchase Agreement, constitutes the entire agreement between the parties regarding the subject matter hereof, and all prior representations, understandings and agreements regarding the subject matter hereof, either written or oral, expressed or implied, are superseded and shall be and of no effect.

          11.11 Baxter Entities. Each of Baxter Healthcare Corporation and Baxter Healthcare S.A. (a) represents and warrants that all Affiliates within the definition of Baxter shall be bound by the terms and conditions of this Agreement as if each were an original signatory to this Agreement, and (b) shall be jointly and severally liable for all acts and omissions of any Baxter entity in connection with this Agreement. Any act or omission of, or notice to, any Baxter entity shall constitute the act or omission of, or notice to, each Baxter entity.

          11.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same agreement.

          11.13 Headings. The captions to the several sections hereof are not a part of this Agreement, but are included merely for convenience of reference only and shall not affect its meaning or interpretation.

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     IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly-authorized representatives as of the Effective Date.

HALOZYME, INC.
By:	/s/ Jonathan Lim
	Name:	Jonathan Lim
	Title:	President and Chief Executive Officer
BAXTER HEALTHCARE CORPORATION
By:	/s/ Peter Arduini
	Name:	Peter Arduini
	Title:	President
BAXTER HEALTHCARE S.A.
By:	/s/ Robert J. Hombach
	Name:	Robert J. Hombach
	Title:	Vice President of Finance

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EXHIBIT A

STOCK PURCHASE AGREEMENT

26

EX-99.3

EXHIBIT 99.3

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND NOTED WITH “***.” AN UNREDACTED VERSION OF THIS
DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.

EXECUTION COPY

AMENDED AND RESTATED
EXCLUSIVE DISTRIBUTION AGREEMENT
(Hylenex)

     THIS AMENDED AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT (this “Agreement”) dated as of February 13, 2007 (the “Restatement Date”), is entered into between BAXTER HEALTHCARE CORPORATION, a Delaware corporation, with its principal place of business at One Baxter Parkway, Deerfield, Illinois 60015-4633, USA, and BAXTER HEALTHCARE S.A., a Swiss corporation, with its principal place of business at Hertistrasse 2, 8304 Wallisellen, Switzerland (together with its Affiliates, collectively, “Baxter”), on the one hand, and HALOZYME, INC., a corporation existing under the laws of the State of California, with its principal place of business at 11588 Sorrento Valley Road, Suite 17, San Diego, California 92121, USA (“Halozyme”), on the other hand.

     WHEREAS, Halozyme wishes to have Baxter promote, market, distribute and sell Standalone Product (as defined below) and Baxter wishes to promote, market, distribute and sell Standalone Product for Halozyme in the Territory (as defined below);

     WHEREAS, Halozyme and Baxter Healthcare Corporation previously entered into that certain Exclusive Distribution Agreement dated as of August 13, 2004 (as amended to date, the “Original Distribution Agreement”);

     WHEREAS, Halozyme and Baxter desire to amend and restate the Original Distribution Agreement in certain respects, on the terms and conditions of this Agreement;

     WHEREAS, Halozyme and Baxter are entering into that certain Amended and Restated Development and Supply Agreement dated as of the Restatement Date (as amended or restated from time to time, the “Development Agreement”) for the manufacture and development of Standalone Product.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby amend the Original Distribution Agreement, and, for convenience, restate the Original Distribution Agreement in its entirety, effective as of the Restatement Date as follows:

     1. Definitions. For purposes of this Agreement, the following terms will have the following meanings. Any capitalized terms used, but not defined, in this Agreement shall have the respective meanings set forth in the Development Agreement.

          1.1 “Baxter Net Sales” shall mean the gross sales price of the Standalone Product invoiced by Baxter or its Affiliate to customers who are not Affiliates (or are Affiliates

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but are the end users of the Standalone Product) less, to the extent actually paid or accrued by Baxter or its Affiliate (as applicable), (a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers for spoiled, damaged, out-dated and returned Standalone Product; (b) freight and insurance costs incurred by Baxter or its Affiliate (as applicable) in transporting the Standalone Product in final form to such customers; (c) cash, quantity and trade discounts, rebates and other price reductions for the Standalone Product given to such customers under price reduction programs that are consistent with industry practices and price reductions given for similar products by Baxter or its Affiliate (as applicable); (d) sales, use, value-added and other direct taxes incurred on the sale of the Standalone Product in final form to such customers; and (e) customs duties, surcharges and other governmental charges incurred in exporting or importing the Standalone Product in final form to such customers.

          1.2 “DESI Review Indication” shall mean the DESI Review indication “as an adjuvant to increase the absorption and dispersion of other injected drugs; for hypodermoclysis; as an adjunct in subcutaneous urography for improving the resorption of radiopaque agents” (as described in 37 Fed. Reg. No. 122, p. 12418 (June 13, 1972)), together with any subset of the foregoing outside the United States.

          1.3 “Enhanze Agreement (Generic Drugs)” shall mean the Enhanze License and Collaboration Agreement (Generic Drugs) dated as of the Restatement Date, between Halozyme and Baxter (as amended or restated from time to time).

          1.4 “Halozyme Revenue Share Kit Product” shall mean a product comprising (a) one or more Drugs (other than Bisphosphonates, Cytostatics, Cytotoxics, Generic Drugs and Hydration Fluids), and (b) recombinant human PH20 hyaluronidase in a liquid injectable or lyophilized formulation, as an active ingredient/excipient for enhancing the dispersion and/or absorption of such one or more Drugs in any liquid injectable or lyophilized formulation, which product is promoted, marketed and sold in a kit (i.e., in separate containers, but packaged and labeled together at a single price). All capitalized term used, but not defined, in this Section 1.4 shall have the respective meanings set forth in the Enhanze Agreement (Generic Drugs).

          1.5 “Major Market Countries” shall mean Canada, France, Germany, Italy, Japan, Spain, the United Kingdom and the United States.

          1.6 “Standalone Product” shall have the meaning set forth in the Development Agreement.

          1.7 “Stock Purchase Agreement” shall mean the Stock Purchase Agreement dated as of the Restatement Date, between Halozyme Therapeutics, Inc., a Nevada corporation, and Baxter International Inc., a Delaware corporation (as amended or restated from time to time).

          1.8 “Territory” shall mean all countries of the world.

     2. Appointment and Scope.

          2.1 Appointment. As of the Restatement Date and subject to the terms and conditions and for the Term of this Agreement, Halozyme hereby appoints Baxter as its exclusive distributor of the Standalone Product in the Territory. Baxter hereby accepts such

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appointment. Baxter may extend such exclusive distribution rights to any of its Affiliates or sub- distributors in Baxter’s customary distribution system for its other products, provided that such Affiliates or sub-distributors shall be bound by the terms of this Agreement.

          2.2 Diligence. Baxter shall use its commercially reasonable efforts to promote, market, distribute and sell the Standalone Product in each Major Market Country in which marketing approval has been obtained, and following the receipt of such marketing approval to promptly conduct marketing studies in such country to determine the market potential for the Standalone Product in such country. Commercially reasonable efforts shall mean those efforts and resources consistent with the exercise of prudent scientific and business judgment, as applied to other pharmaceutical products of similar market potential and market size and at a similar stage in the development or life of such product. Without limiting the foregoing, commercially reasonable efforts shall include, without limitation, achieving the diligence milestones set forth on Exhibit A.

          2.3 Independent Purchaser Status. Baxter shall be an independent purchaser and seller of the Standalone Product. Baxter shall not act as an agent or legal representative of Halozyme, nor shall Baxter have any right or power to act for or bind Halozyme in any respect or to pledge its credit. Except as expressly set forth herein, Baxter shall be free to resell the Standalone Product on such terms as it may, in its sole discretion, determine, including price, marketing, advertising, promotion, returns, credits and discounts. The detailed operations of Baxter under the Agreement are subject to the sole control and management of Baxter. Halozyme shall reasonably support Baxter’s sales and promotional activities, including but not limited to, referring to Baxter all orders and inquiries from customers and providing Baxter with any existing marketing materials and documents relating to the marketing authorizations for the Standalone Product.

          2.4 Failure to Supply. Each party shall use its commercially reasonable efforts to ensure a steady supply of Standalone Product or to resolve any associated supply issues with their respective contractors.

3. Financial Considerations.

          3.1 Baxter Payments.

               3.1.1 Upfront Payment. On the Restatement Date, Baxter shall pay to Halozyme a non-refundable, non-creditable amount of ten million dollars ($10,000,000).

               3.1.2 Equity Investment. On the Restatement Date, Baxter International Inc., a Delaware corporation, shall make an equity investment in Halozyme as provided in the Stock Purchase Agreement.

               3.1.3 Standalone Product-Based Payments. Baxter shall be responsible for the full cost of manufacturing and supplying the Standalone Product. Additionally, Baxter shall pay to Halozyme the following payments:

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CONFIDENTIAL TREATMENT REQUESTED

                    (a) *** percent (***%) of Baxter Net Sales of Standalone Product; provided, however, that the minimum royalty payment with respect to each container of Standalone Product shall be $12.

                    (b) On the applicable pre-payment due date set forth below, Baxter shall pay to Halozyme (as a pre-payment for the amounts owing under Section 3.1.3(a)) the applicable non-refundable pre-payment amount specified below for the calendar year in which such pre-payment amount is due, which amount shall be fully creditable against the payments owed by Baxter under Section 3.1.3(a) above for such calendar year and succeeding calendar years:

Pre-Payment Amount	Pre-Payment Due Date
$1,000,000	The Restatement Date (2007)
$***	January 1, 2008
$***	January 1, 2009

                    (c) Following the expiration of the Initial Term, and during each Renewal Term (as each is defined in Section 9.1), the payment rates and minimum payments set forth in Section 3.1.3(a) with respect to Standalone Product sold in a particular jurisdiction shall be reduced by fifty percent (50%) following the commercial launch of an approved generic or “biosimilar” form of the Standalone Product in such jurisdiction.

               3.1.4 Milestone Payments. Baxter shall pay to Halozyme the following non-refundable, non-creditable milestone payments within thirty (30) days following the first occurrence of each applicable event:

Amount	Event
$***	receipt of the first required marketing approval by the European Medicines Agency (EMEA) for the Standalone Product as outlined in the Standalone Product Master Plan;
$***	the end of the calendar year in which Baxter Net Sales of (a) Standalone Products, and (b) the PH20 Drug component of Products, as defined in the Enhanze Agreement (Generic Drugs) as if it were priced and sold as a Standalone Product, total, in the aggregate for such calendar year, at least two hundred million dollars ($200,000,000); and
$***	the end of the calendar year in which Baxter Net Sales of (a) Standalone Products, and (b) the PH20 Drug component of Products, as defined in the Enhanze Agreement (Generic Drugs) as if it were priced and sold as a Standalone Product, total, in the aggregate for such calendar year, at least four hundred million dollars ($400,000,000).

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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          3.2 Halozyme Payments. Halozyme shall pay to Baxter $*** per item of Halozyme Revenue Share Kit Product sold by Halozyme, its licensees (other than Baxter) and their respective Affiliates; provided, however, if such Halozyme Revenue Share Kit Product contains more than 150 USP units of recombinant human PH20 hyaluronidase, the applicable payment shall be increased on a pro-rata basis to reflect the increase in USP unit dose of recombinant human PH20 hyaluronidase included in such Halozyme Revenue Share Kit Product; provided, further, if Halozyme reasonably demonstrates that it is not commercially practicable to sell a Halozyme Revenue Share Kit Product that contains more than 150 USP units of recombinant human PH20 hyaluronidase bearing the applicable payment as determined above, then with respect to such Halozyme Revenue Share Kit Product only, the parties shall amend this provision to reduce the applicable payment with respect to such Halozyme Revenue Share Kit Product to a mutually acceptable amount. During the term of this Agreement following the Initial Term, such payment amounts shall be reduced by *** (***).

          3.3 Payment Reports.

               3.3.1 Within sixty (60) days after the end of each calendar quarter during the Term of this Agreement, and within sixty (60) days following the expiration or termination of this Agreement, Baxter shall furnish to Halozyme a written report showing in reasonably specific detail, on a country-by-country basis, (a) the calculation of Baxter Net Sales and the payment amounts owing under Section 3.1.3 above; (b) the withholding taxes, if any, required by law to be deducted with respect to such Baxter Net Sales; and (c) the exchange rates, if any, used in determining the amount of United States dollars. All amounts in any such written report shall be expressed in United States dollars. With respect to sales of Standalone Product invoiced in a currency other than United States dollars, all such amounts shall be expressed both in the currency in which the distribution is invoiced and in the United States dollar equivalent. The United States dollar equivalent shall be calculated using the average of the exchange rate (local currency per US$1) published in The Wall Street Journal, Western Edition, under the heading “Currency Trading” on the last business day of each month during the applicable calendar quarter. Baxter shall keep complete and accurate records in sufficient detail to enable the amounts payable hereunder to be determined.

               3.3.2 Within sixty (60) days after the end of each calendar quarter during the Term of this Agreement, and within sixty (60) days following the expiration or termination of this Agreement, Halozyme shall furnish to Baxter a written report showing in reasonably specific detail, on a country-by-country basis, (a) the calculation of the payment amounts owing under Section 3.2 above; (b) the withholding taxes, if any, required by law to be deducted with respect

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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to such payment amounts; and (c) the exchange rates, if any, used in determining the amount of United States dollars. All amounts in any such written report shall be expressed in United States dollars. With respect to sales of Standalone Product invoiced in a currency other than United States dollars, all such amounts shall be expressed both in the currency in which the distribution is invoiced and in the United States dollar equivalent. The United States dollar equivalent shall be calculated using the average of the exchange rate (local currency per US$1) published in The Wall Street Journal, Western Edition, under the heading “Currency Trading” on the last business day of each month during the applicable calendar quarter. Halozyme shall keep complete and accurate records in sufficient detail to enable the amounts payable hereunder to be determined.

          3.4 Audits. Upon the written request of a party (the “Payee”) and not more than once in each calendar year, the other party (the “Payor”) shall permit an independent certified public accounting firm of nationally recognized standing, selected by the Payee and reasonably acceptable to the Payor, at the Payee’s expense, to have access during normal business hours to such of the records of the Payor as may be reasonably necessary to verify the accuracy of the payment reports hereunder for any year ending not more than thirty-six (36) months prior to the date of such request. If such accounting firm concludes that additional amounts were owed during the audited period, then the parties agree to meet and discuss the calculation of the additional amounts. If it is determined that Payor still owes the additional amounts, then the Payor shall pay such additional amounts within sixty (60) days of the date the Payee delivers to the Payor such accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid by the Payee; provided, however, if the audit discloses that the amounts payable by the Payor for such period are more than one hundred five percent (105%) of the amounts actually paid for such period, then the Payor shall pay the reasonable fees and expenses charged by such accounting firm.

          3.5 Payment Terms. All amounts shown to have accrued by each payment report provided for under Section 3.3 above shall be payable on the date such payment report is due. Payment of amounts in whole or in part may be made in advance of such due date.

          3.6 Payment Method. All payments by a Payor to the Payee under this Agreement shall be paid in United States dollars and all such payments shall be originated from a United States bank located in the United States and made by bank wire transfer in immediately available funds to such account as the payee shall designate before such payment is due.

          3.7 Supply of Standalone Product.

               3.7.1 Prior to the Restatement Date, Baxter has prepared and provided to Halozyme a written forecast (the “Initial Standalone Product Forecast”) of its good faith requirements for Standalone Product for each of the first eighteen (18) months following the Restatement Date. Not later than one hundred eighty (180) days prior to the first day of each calendar quarter during the term of this Agreement (commencing with the calendar quarter beginning July 1, 2007), Baxter shall prepare and provide Halozyme with a written forecast (together with the Initial Standalone Product Forecast, each a “Rolling Standalone Product Forecast”) of its good faith estimated requirements for Standalone Product under this Section 3.7 for each of the subsequent six (6) calendar quarters. Baxter shall not (a) increase or decrease the quantity estimated for the first quarterly period of each forecast from the quantity estimated for

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the second quarterly period of the previous forecast, (b) increase or decrease the quantity estimated for the second and third quarterly periods of each forecast by more than twenty five percent (25%) of the quantity estimated for the third and fourth quarterly periods of the previous forecast, respectively, without the prior express written consent of Halozyme. The quantities estimated for the fifth and sixth quarterly periods of each forecast shall be non-binding, and for planning purposes only.

               3.7.2 Baxter shall be required to purchase one hundred percent (100%) of the quantity of Standalone Product forecasted for the first and second quarterly periods of each Rolling Standalone Product Forecast.

               3.7.3 Halozyme shall be required to supply the quantity of Standalone Product ordered by Baxter under this Section 3.7 in any calendar quarter up to the quantity forecasted for the first quarterly period of the most recent Rolling Standalone Product Forecast. Halozyme shall use commercially reasonable efforts to meet Baxter’s delivery requirements specified in accordance with Section 3.7.4.

               3.7.4 Baxter shall ship or arrange for shipment of the Standalone Product ordered by Baxter from the site of manufacture of the Standalone Product to Baxter’s distribution facility in Memphis, Tennessee or such other distribution center as may be designated by Baxter.

               3.7.5 Baxter shall be solely responsible for purchasing and maintaining a suitable reserve supply of Standalone Product for safety stock purposes.

          3.8 Dollars. All payments described in this Agreement unless otherwise noted shall be in United States dollars.

     4. Warranty, Representations.

          4.1 Halozyme warrants that it possesses good and marketable title to the Standalone Product sold to Baxter hereunder and complies with all regulatory requirements therefor in each country in the Territory in which marketing approval has been obtained. With respect to all Standalone Product sold to Baxter hereunder that is not manufactured by Baxter or its Affiliates, Halozyme warrants that (i) the Standalone Product complies or will comply with all applicable regulatory requirements therefor in each country in the Territory in which marketing approval has been obtained, (ii) the Standalone Product will be manufactured in accordance with the applicable specifications therefor, such marketing approvals in such countries of the Territory and Good Manufacturing Practices as applicable to the Standalone Product in such countries of the Territory and in compliance with approved quality control processes and standards, which processes and standards will meet the minimum requirements of applicable laws and regulations in such countries of the Territory, (iii) the Standalone Product will be free from defects in workmanship and material, and (iv) it shall provide at its own expense all packaging and labeling for the Standalone Product that conform with the regulatory requirements in such countries of the Territory and are suitable for sale in such countries of the Territory and such labels are available in the appropriate languages for such countries of the Territory. For purposes of subparagraph (ii) above, each batch of the Standalone Product supplied by Halozyme, will include a “Certificate of Analysis,” which will include testing

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results, and shall be sent to Baxter by mail and fax or e-mail, indicating that the batch has been manufactured and released according to applicable Good Manufacturing Practices and the applicable specifications therefor. Halozyme shall indemnify, defend and hold harmless Baxter, its Affiliates, its sublicensees and distributors, and their respective directors, officers, employees and agents, from and against any and all liabilities, damages, losses, costs and expenses (including the reasonable fees of attorneys and other professionals) incurred from any claims, actions or proceedings by any third party to the extent resulting from a breach of the foregoing warranty.

          4.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, HALOZYME MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE STANDALONE PRODUCT. HALOZYME DISCLAIMS ALL OTHER WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

     5. Covenants of Baxter.

          5.1 Certain Restrictions. Except as otherwise permitted by written agreement of the parties, Baxter shall not, directly or indirectly, (a) condition the sale or transfer of the Standalone Product with the sale or transfer of any other product or the use of any service unless the price for the Standalone Product is separately itemized on the applicable invoice and is the same price charged by Baxter for the Standalone Product when sold separately, (b) promote, sell or transfer a product comprising a coformulation of the Standalone Product, or any portion thereof, with any other product, (c) promote, sell or transfer a product comprising the Standalone Product kitted with any other product (i.e., in one or more containers or delivery devices, with a single label, packaged together at a single price), (d) promote, sell or transfer any Standalone Product for any use other than the DESI Review Indication, or (e) conduct, have conducted or assist or facilitate the conduct of any study of the Standalone Product that requires the administration of more than a single 150 USP unit dose.

          5.2 Exclusivity. Commencing on the Restatement Date, and thereafter for so long as this Agreement is in effect, Baxter shall not promote, market or sell in the Territory any product that constitutes bovine or ovine hyaluronidase or any other product sold solely for the labeled indications of Standalone Product previously or contemporaneously sold by Baxter.

     6. Regulatory Filings.

          6.1 Baxter shall comply with all applicable regulatory requirements in any country in which Baxter promotes, markets or sells the Standalone Product or any products resulting from, in whole or in part, the Standalone Product. In order for Halozyme to comply with 21 CFR 310.305, 314.80 and 314.98 as promulgated by FDA and other regulatory authorities, Baxter must report to Halozyme any serious adverse events immediately and any adverse events and product complaints regarding the Standalone Product, consistent with the Quality Agreement. Halozyme must report to Baxter any serious adverse events immediately and any adverse events and product complaints regarding the Standalone Product, in each case in accordance with the Quality Agreement.

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CONFIDENTIAL TREATMENT REQUESTED

          6.2 In accordance with and subject to the Development Agreement, Baxter shall be responsible at its own cost and expense for Halozyme to obtain and maintain all marketing authorizations within any country in the Territory for the Term of this Agreement. Halozyme shall duly inform the regulatory authorities of Baxter being the exclusive distributor of the Standalone Product in any country of the Territory in which marketing approval is obtained.

     7. Confidentiality.

          7.1 Confidentiality. During the Term of this Agreement, and for a period of five (5) years following the expiration or earlier termination hereof, each party shall maintain in confidence all Confidential Information (as defined below) disclosed by the other party, and shall not use, grant the use of or disclose to any third party the Confidential Information of the other party other than as expressly permitted by this Agreement. Each party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the other party’s Confidential Information. As used herein, “Confidential Information” shall mean all information and data that (a) is provided by one party to the other party under the Original Distribution Agreement, the Original Development and Supply Agreement, this Agreement or the Confidentiality Agreement, and (b) if disclosed in writing or other tangible medium is marked or identified as confidential at the time of disclosure to the recipient, or is acknowledged at the time of disclosure to be confidential, or otherwise should reasonably be deemed to be confidential. Notwithstanding the foregoing, Confidential Information of a party shall not include that portion of such information and data which, and only to the extent, the recipient can establish by written documentation: (i) is known to the recipient as evidenced by its written records before receipt thereof from the disclosing party, (ii) is disclosed to the recipient free of confidentiality obligations by a third person who has the right to make such disclosure, (iii) is or becomes part of the public domain through no fault of the recipient, or (iv) the recipient can reasonably establish is independently developed by persons on behalf of recipient without access to or use of the information disclosed by the disclosing party.

          7.2 Permitted Disclosures. Either party may disclose Confidential Information of the disclosing party (a) on a need-to-know basis, to such party’s directors, officers and employees to the extent such disclosure is reasonably necessary in connection with such party’s activities as expressly authorized by this Agreement, and (b) to those Affiliates, agents and consultants who need to know such information to accomplish the purposes of this Agreement (collectively, “Permitted Recipients”); provided such Permitted Recipients are bound to maintain such Confidential Information in confidence to the same extent as set forth in Section 7.1.

          7.3 Terms of Agreement. Neither party shall disclose any terms or conditions of this Agreement to any third party without the prior consent of the other party; provided, however, that a party may disclose the terms or conditions of this Agreement, (a) on a need-to-know basis to its legal and financial advisors to the extent such disclosure is reasonably necessary, and (b) to a third party in connection with (i) an equity investment in such party, (ii) a merger, consolidation or similar transaction by such party, or (iii) the sale of all or substantially all of the assets of such party. Notwithstanding the foregoing, prior to execution of this Agreement, the parties have agreed upon the substance of information that can be used to

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describe the terms and conditions of this transaction, and each party may disclose such information, as modified by mutual written agreement of the parties, without the consent of the other party.

          7.4 Litigation and Governmental Disclosure. Each party may disclose Confidential Information hereunder to the extent such disclosure is reasonably necessary for prosecuting or defending litigation, complying with applicable governmental regulations or conducting pre-clinical or clinical trials, provided that if a party is required by law or regulation to make any such disclosure of the other party’s Confidential Information it will, except where impractical for necessary disclosures, for example in the event of a medical emergency, give reasonable advance notice to the other party of such disclosure requirement and will use good faith efforts to assist such other party to secure a protective order or confidential treatment of such Confidential Information required to be disclosed.

          7.5 Limitation of Disclosure. The parties agree that, except as otherwise may be required by applicable laws, regulations, rules or orders, including without limitation the rules and regulations promulgated by the United States Securities and Exchange Commission, and except as may be authorized in this Section 7, no information concerning this Agreement and the transactions contemplated herein shall be made public by either party without the prior written consent of the other.

          7.6 Publicity and SEC Filings. The parties agree that the public announcement of the execution of this Agreement shall only be by one or more press releases mutually agreed to by the parties. The failure of a party to return a draft of a press release with its proposed amendments or modifications to such press release to the other party within five business (5) days of such party’s receipt of such press release shall be deemed as such party’s approval of such press release as received by such party. Each party agrees that it shall cooperate fully and in a timely manner with the other with respect to all disclosures to the Securities and Exchange Commission and any other governmental or regulatory agencies, including requests for confidential treatment of Confidential Information of either party included in any such disclosure.

     8. Intellectual Property Rights.

          8.1 Patent Rights. Except as expressly set forth in this Agreement and the Development Agreement, including but not limited to rights and permissions implied in the appointment of Baxter and its Affiliates as exclusive distributor(s) pursuant to Section 2.1 of this Agreement, Halozyme does not, by this agreement, either expressly or impliedly, grant any other licenses to Baxter under any patents or other intellectual property owned or controlled by Halozyme or under which Halozyme has any rights. Halozyme warrants that it owns, controls or has licenses to all intellectual property rights implied in the appointment of Baxter and its Affiliates as exclusive distributor(s) pursuant to Section 2.1 of this Agreement. Halozyme represents that it is not otherwise a party to any agreement that would inhibit or prevent Halozyme from licensing or otherwise conveying any of these intellectual property rights to Baxter. Halozyme warrants that the use of the trademarks referenced in Section 8.2 below shall be delivered free of any claim of any third party for any infringement of any trademark rights of such third party.

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          8.2 Trademarks and Trade Names.

                    (a) Baxter shall use the trademark “Hylenex” for the promotion, marketing and sale of the Standalone Product and for no other purpose. Baxter shall own and have the right to maintain such trademark in the Territory. Baxter shall include on all packaging, labeling and marketing and promotional materials regarding the Standalone Product the name Halozyme, and such trademark as reasonably requested by Halozyme as a secondary mark, reasonably identifying that such product incorporates technology of Halozyme. Nothing in this Agreement shall create an obligation on Halozyme to register or otherwise maintain in force any marks.

                    (b) Within thirty (30) days after the Approval Date, Halozyme shall supply Baxter with written guidelines concerning Halozyme’s preferences and restrictions for trade dress or trademarks used in the marketing, promotion or distribution of the Standalone Product. Halozyme shall have the right to approve any trade dress or trademarks used by Baxter with the marketing, promotion or distribution of the Standalone Product, which approval shall not be unreasonably withheld. Such right of Halozyme to approve shall be exercised by notifying Baxter in writing of Halozyme’s desire to approve such trade dress or trademarks. After such notification, Baxter shall supply Halozyme with layouts and/or specimens of any such trade dress or trade mark usage at least fifteen (15) business days prior to any anticipated use of such. Halozyme shall have ten (10) business days to review any such layouts and/or specimens, and shall be deemed to approve use of such if Baxter is not notified in writing of Halozyme’s objection to such use by the end of the ten (10) business day period. Halozyme may suspend such right of approval, without affecting its right to reactivate such right of approval, by written notice to Baxter.

                    (c) Any goodwill associated with any trade marks affixed or applied or used in relation to Standalone Product sold or otherwise distributed by Baxter pursuant to this Agreement shall accrue to the sole benefit of Halozyme, except to the extent that such goodwill is associated with any Baxter owned trademark not specific to the Standalone Product. Nothing in this Agreement shall create an obligation on Baxter to register or otherwise maintain in force any trademarks. Upon termination of this Agreement, ownership of any trademark registered by Baxter for use only in Standalone Product labeling or advertising shall vest in Halozyme, and Baxter shall execute all documents necessary to effect such transfer of ownership.

                    (d) Despite any use of Baxter’s general trade dress, trademarks or servicemarks denoting Baxter as the source of Standalone Product in connection with the packaging, labeling, advertising, or promotion of Standalone Product, Halozyme shall have no license, express or implied, to use such general trade dress, trademarks or service marks after the termination of this Agreement.

                    (e) Except as expressly set forth in the Development Agreement or this Agreement, Baxter shall not use any of Halozyme’s trademarks, or any mark or name confusingly similar thereto, as part of its corporate or business name or in any other manner, except that (i) Baxter may identify itself as an authorized distributor of Halozyme, and (ii) Baxter shall not register any trade mark or trade name (including any company name) which

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is identical to or confusingly similar to or incorporates any trade mark or trade name which Halozyme or any associated company owns or claims rights in.

          8.3 Intellectual Property Infringement Litigation. Baxter shall inform Halozyme immediately upon becoming aware of: (i) any infringements or risk of infringements by a third party of Halozyme’s intellectual property (including but not limited to brands, trademarks, copyrights, and patents), and (ii) any allegations of infringements or risk of infringements by the Standalone Product of a third party’s intellectual property or claims of such by a third party.

                    (a) In the event of any such infringement under (i), Baxter shall allow Halozyme to conduct (at Halozyme’s sole expense) the defense or settlement of any claim of intellectual property right infringement by or against a third party in relation to any of Halozyme’s intellectual property. Baxter shall not compromise, settle or negotiate or make any statement on behalf of Halozyme. At Halozyme’s expense (as to reasonable out-of-pocket expenses only), Baxter shall cooperate with Halozyme in connection with any such infringement defense or prosecution.

                    (b) In the event of any allegations of infringement or risk or infringement under (ii), the Party first having notice of an infringement claim shall promptly notify the other Party in writing. The notice shall set forth the facts of the infringement claim in reasonable detail. The party being sued or threatened under (ii) shall have the right to defend against and settle such claim with independent counsel of its choice, provided that (1) such party shall consult with the other party, shall reasonable consider the interests of the other party, and shall not settle or consent to an adverse judgment that would materially adversely affect the interests of the other party without its consent; (2) the other party shall cooperate with such party to the extent allowed by law; and (3) such party shall notify the other party as to the particulars of any agreement settling an infringement claim to the extent permitted by any such settlement agreement. Both Parties will share equally any costs of defending such an infringement claim under (ii), including all damages, fees and expenses, including reasonable attorneys’ fees and expenses.

                    (c) Third Party Licenses. In the event that the use, sale, offer for sale or importation of Standalone Product is alleged to infringe a Third Party Patent or a Third Party trademark (collectively, “Third Party IP”), the Parties will cooperate to formulate a commercially reasonable strategy for resolving such issue. If the Parties determine that obtaining a license under such Third Party IP is appropriate, and if a license to such Third Party IP is available, the Parties agree that Halozyme shall be solely responsible for obtaining a license to such Third Party IP (and such license shall include a right to sublicense to Baxter), when such Third Party IP relates to the API or its method of manufacture, and that Baxter shall be solely responsible for obtaining a license to such Third Party IP (and such license shall include a right to sublicense or assign to Halozyme), when such Third Party IP relates to the formulation or use of Standalone Product. The Parties shall share equally all costs and expenses attributable to obtaining and retaining such Third Party IP license.

          8.4 Copyrights. Baxter hereby acknowledges that Halozyme has claimed, or may claim, copyright protection with respect to certain parts of the Standalone Product and the

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labels, inserts and other materials regarding the Standalone Product. Baxter further acknowledges the validity of Halozyme’s right to claim copyright protection with respect to such items. Baxter further acknowledges that Halozyme has the exclusive right (to the exclusion of all others) to claim the copyright protection with respect to all such items. Halozyme herein gives Baxter express permission to copy and distribute to its sales representatives Standalone Product advertising, literature and other materials prepared by or on behalf of Halozyme for the purpose of fulfilling Baxter’s obligations under the Agreement.

     9. Term and Termination.

          9.1 Term and Renewal. This Agreement, and the obligations of the parties hereunder, shall commence on the Restatement Date and continue for the life of the family of PH20 patents (the “Initial Term”). Thereafter, the Agreement will be automatically extended for additional one year periods (each a “Renewal Term” and collectively with the Initial Term, the “Term”) until either party notifies the other party in writing not less than twenty-four (24) months prior, of that party’s intent to terminate the Agreement.

          9.2 Termination.

                    (a) If a party has materially breached this Agreement and such material breach shall continue for thirty (30) days for a monetary breach, and sixty (60) days for a non-monetary breach, or such additional time reasonably necessary to cure such non-monetary breach, provided that the breaching party has commenced a cure within the sixty (60) day period and is diligently pursuing completion of such cure, such additional period not to exceed one hundred and twenty (120) days in total after written notice of such breach was provided to the breaching party by the nonbreaching party, the nonbreaching party shall have the right at its option to terminate this Agreement effective at the end of such period.

                    (b) Baxter may terminate this Agreement at any time upon one hundred and eighty (180) days prior written notice to Halozyme.

                    (c) In the event of a bona fide allegation or claim of infringement under Section 8.3, Baxter shall have the option to suspend distribution of Standalone Product (subject to the rights of Halozyme under Section 9.2(a)), or terminate this Agreement, by written notice to Halozyme.

                    (d) Upon the expiration or termination of the Development Agreement, this Agreement shall immediately terminate.

          9.3 Effect of Expiration and Termination. Expiration or termination of the Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination. The provisions of Sections 7, 8.2(c) and 10 shall survive the expiration or termination of the Agreement. Upon the expiration or termination of the Agreement, Baxter shall have the right to sell the remaining stock of Standalone Product for a period of twelve (12) months following such expiration or termination.

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     10. Miscellaneous.

          10.1 Notices. All notices hereunder shall be delivered by facsimile (confirmed by overnight delivery), or by overnight delivery with a reputable overnight delivery service, to the following address of the respective parties:

If to Halozyme:	Halozyme, Inc.
	11588 Sorrento Valley Road, Suite 17
	San Diego, California 92121
	Attn: President and Chief Executive Officer
	Fax: (858) 259-2539
	Phone: (858) 794-8889
With a copy to:	Morrison & Foerster LLP
	12531 High Bluff Drive, Suite 100
	San Diego, California 92121
	Attention: Mark R. Wicker
	Fax: (858) 720-5125
	Phone: (858) 720-7918
If to Baxter:	Baxter Healthcare Corporation
	95 Spring Street
	New Providence, NJ 07974
	Attn: General Manager
	Fax: (908) 286-7267
	Phone: (908) 286-7115
With a copy to:	Baxter Healthcare Corporation
	One Baxter Parkway
	Deerfield, Illinois 60015-4633
	Attn: General Counsel
	Fax: (847) 948-2450
	Phone: (847) 948-2600
And to:	Baxter Healthcare SA
	Hertistrasse 2
	CH-8304 Wallisellen
	Switzerland
	Attn: Corporate Counsel
	Fax: +41 44 878 64 77
	Phone: +41 44 878 60 00

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     Notices shall be effective on the day of receipt. A party may change its address listed above by notice to the other party given in accordance with this Section 10.1.

          10.2 Force Majeure. Any delay in the performance of any of the duties or obligations of either party hereto (except the payment of money), to the extent caused by an event outside the affected party’s reasonable control, shall not be considered a breach of this Agreement, and unless provided to the contrary herein, the time required for performance shall be extended for a period equal to the period of such delay. Such events shall include without limitation, acts of God; acts of public enemies; insurrections; riots; injunctions; embargoes; labor disputes, including strikes, lockouts, job actions, or boycotts; fires; explosions; floods; shortages of material or energy; delays in the delivery of raw materials; acts or orders of any government or agency thereof or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the party so affected. The party so affected shall give prompt written notice to the other party of such cause and a good faith estimate of the continuing effect of the force majeure condition and duration of the affected party’s nonperformance, and shall take whatever reasonable steps are appropriate to relieve the effect of such causes as rapidly as possible. If the period of nonperformance by Baxter because of force majeure conditions exceeds one hundred and eighty (180) calendar days, Halozyme may terminate this Agreement by written notice to Baxter. If the period of nonperformance by Halozyme because of force majeure conditions exceeds one hundred and eighty (180) calendar days, Baxter may terminate this Agreement by written notice to Halozyme.

          10.3 Assignment. Neither party shall assign this Agreement or any part hereof or any interest herein to any non-affiliated third party (or use any subcontractor) without the written approval of the other party; provided, however, that either party may assign this Agreement without such consent to an Affiliate or in the case of a merger, consolidation, change in control or sale of all or substantially all of the assets of the party seeking such assignment or transfer and such transaction relates to the business covered by this Agreement and the resulting entity assumes all of the obligations under this Agreement. No assignment shall be valid unless the permitted assignee(s) assumes all obligations of its assignor under this Agreement. No assignment shall relieve any party of responsibility for the performance of its obligations hereunder. Any purported assignment in violation of this Section 10.3 shall be void.

          10.4 Entire Agreement. The parties hereto acknowledge that this Agreement, together with the Stock Purchase Agreement, the Quality Agreement and the Development Agreement sets forth the entire agreement and understanding of the parties and supersedes all prior written or oral agreements or understandings, including the Original Distribution Agreement, with respect to the subject matter hereof. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by an authorized agent or representative of both parties hereto. No course of dealing or usage of trade shall be used to modify the terms and conditions herein.

          10.5 Waiver. None of the provisions of this Agreement shall be considered waived by any party hereto unless such waiver is agreed to, in writing, by authorized agents of such party. The failure of a party to insist upon strict conformance to any of the terms and conditions hereof, or failure or delay to exercise any rights provided herein or by law shall not be deemed a waiver of any rights of any party hereto.

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          10.6 Obligations to Third Parties. Each party warrants and represents that this Agreement does not conflict with any contractual obligations, expressed or implied, undertaken with any third party.

          10.7 Independent Contractor. Baxter and Halozyme are acting under this Agreement as independent contractors and neither shall be considered an agent of, or joint venturer with, the other. Unless otherwise provided herein to the contrary, each party shall furnish all expertise, labor, supervision, machining and equipment necessary for the performance of its obligations hereunder and shall obtain and maintain all building and other permits and licenses required by public authorities.

          10.8 Governing Law. In any action brought regarding the validity, construction and enforcement of this Agreement, it shall be governed in all respects by the laws of the State of New Jersey, without regard to the principles of conflicts of laws, and shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods. The courts of the State of California shall have jurisdiction over the parties hereto in all matters arising hereunder and the parties hereto agree that venue shall be a state or federal court in California.

          10.9 Severability. If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.

          10.10 Headings, Interpretation. The headings used in this Agreement are for convenience only and are not part of this Agreement.

          10.11 Baxter Entities. Each of Baxter Healthcare Corporation and Baxter Healthcare S.A. (a) represents and warrants that all Affiliates within the definition of Baxter shall be bound by the terms and conditions of this Agreement as if each were an original signatory to this Agreement, and (b) shall be jointly and severally liable for all acts and omissions of any Baxter entity in connection with this Agreement. Any act or omission of, or notice to, any Baxter entity shall constitute the act or omission of, or notice to, each Baxter entity.

          10.12 Counterparts. The Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have each caused this Amended and Restated Exclusive Distribution Agreement to be executed by their duly-authorized representatives as of the Restatement Date above written.

HALOZYME, INC.
By:	/s/ Jonathan Lim
	Name:	Jonathan Lim
	Title:	President and Chief Executive Officer
BAXTER HEALTHCARE CORPORATION
By:	/s/ Peter Arduini
	Name:	Peter Arduini
	Title:	President
BAXTER HEALTHCARE S.A.
By:	/s/ Robert J. Hombach
	Name:	Robert J. Hombach
	Title:	Vice President of Finance

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EXHIBIT A

MINIMUM DILIGENCE MILESTONES

Without limiting the generality of Baxter’s obligations set forth in Section 2.2, Baxter shall spend not less than the following amounts on Development and Promotional Expenses (as defined below) for each of the following years:

Year	Minimum Amount
2007	$	*	**
2008	$	*	**
2009	$	*	**

For purposes of this Agreement, “Development and Promotional Expenses” shall mean the direct internal and out-of-pocket costs of Baxter specifically identifiable to the clinical studies, promotion, marketing, advertising, launch and sales of the Standalone Product (excluding costs associated with (a) production, storage, transportation, handling or distribution of Standalone Product, and (b) management, administration, facilities, occupancy and overhead), calculated in a manner consistent with the customary industry practices for pharmaceutical products.

Within thirty (30) days after the end of each June and December, Baxter shall prepare and provide Halozyme with a reasonably detailed written report showing the calculation of its Development and Promotional Expenses during each of the immediately preceding six (6) month period. Upon Halozyme’s written request, which shall not be more than once in each six (6) month period, Baxter shall provide Halozyme with reasonable supporting evidence for all Development and Promotional Expenses.

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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EX-99.4

EXHIBIT 99.4

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND NOTED WITH “***.” AN UNREDACTED VERSION OF THIS
DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.

EXECUTION COPY

AMENDED AND RESTATED
DEVELOPMENT AND SUPPLY AGREEMENT
(Hylenex)

     THIS AMENDED AND RESTATED DEVELOPMENT AND SUPPLY AGREEMENT (this “Agreement”) dated as of February 13, 2007 (the “Restatement Date”), is entered into between BAXTER HEALTHCARE CORPORATION, a Delaware corporation, with its principal place of business at One Baxter Parkway, Deerfield, Illinois 60015-4633, USA, and BAXTER HEALTHCARE S.A., a Swiss corporation, with its principal place of business at Hertistrasse 2, 8304 Wallisellen, Switzerland (together with its Affiliates, collectively, “Baxter”), on the one hand, and HALOZYME, INC., a corporation existing under the laws of the State of California, with its principal place of business at 11588 Sorrento Valley Road, Suite 17, San Diego, California 92121, USA (“Halozyme”), on the other hand.

     WHEREAS Halozyme is the owner or exclusive licensee of certain patents, formulations and know-how related to Standalone Product (as defined below);

     WHEREAS Baxter, or one or more of its Affiliates (as defined below) has the expertise and the manufacturing facility suitable for the Production (as defined below) of Standalone Product;

     WHEREAS, Halozyme wishes to have Baxter Produce (as defined below) Standalone Product and Baxter wishes to Produce Standalone Product for Halozyme for sale and distribution in the Territory;

     WHEREAS, Halozyme and Baxter Healthcare Corporation previously entered into that certain Development and Supply Agreement dated as of March 24, 2005 (as amended to date, the “Original Development Agreement”);

     WHEREAS, Halozyme and Baxter desire to amend and restate the Original Development Agreement in certain respects, on the terms and conditions of this Agreement;

     WHEREAS, Halozyme and Baxter are entering into that certain Amended and Restated Exclusive Distribution Agreement dated as of the Restatement Date (as amended or restated from time to time, the “Exclusive Distribution Agreement”) for the distribution of Standalone Product.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby amend the Original Development Agreement, and, for convenience, restate the Original Development Agreement in its entirety, effective as of the Restatement Date as follows:

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     1. DEFINITIONS.

          1.1 “Advisory Committee” shall mean the committee composed of representatives of Baxter and Halozyme described in Section 2.3 below.

          1.2 “Affiliate” shall mean, with respect to a party hereto, any entity that controls or is controlled by such party, or is under common control with such party. For purposes of this definition, (a) for purposes of the definition of Baxter, an entity shall be deemed to control another entity if it owns or controls, directly or indirectly, one hundred percent (100%) (or if the law of the jurisdiction in which the other entity is organized does not permit foreign ownership of one hundred percent (100%), the highest percentage permitted by applicable law to be owned by such entity) of the voting equity of the other entity (or other comparable interest for an entity other than a corporation), and (b) for all other purposes, an entity shall be deemed to control another entity if it owns or controls, directly or indirectly, at least fifty percent (50%) of the voting equity of the other entity (or other comparable interest for an entity other than a corporation).

          1.3 “API” shall mean the bulk form of active compound of PH20 Drug.

          1.4 “API Price” shall mean the amount to be paid by Baxter to Halozyme for the API as set forth on Exhibit A.

          1.5 “API Specifications” shall mean the specifications for the API mutually agreed upon in writing by the parties.

          1.6 “Batch” shall mean a specific quantity of Standalone Product comprising a number of units mutually agreed upon between Halozyme and Baxter, and that (a) is intended to have uniform character and quality within specified limits, and (b) is produced according to a single manufacturing order during the same cycle of manufacture.

          1.7 “Baxter SOPs” shall mean Baxter’s Standard Operating Procedures. Copies of Baxter’s Relevant Product Specific Standard Operating Procedures as per Quality Agreement (Section 5.6.2) have been provided by Baxter to Halozyme prior to the Restatement Date. Baxter shall be responsible at all times to cause the Standalone Product-specific Baxter SOPs to be consistent with the Standalone Product Master Plan.

          1.8 “cGMP” shall mean the principles detailed in the US Current Good Manufacturing Practices (21 CFR 200, 211 and 600), the “Rules Governing Medicinal Product in The European Community — Volume IV Good Manufacturing Practice for Medicinal Products,” and/or “Cooperative Manufacturing Arrangements for Licensed Biologics” FDA-CBER.

          1.9 “Components” shall mean all components used by Baxter in Production of Standalone Product under this Agreement.

          1.10 “Confidential Information” shall mean all information and data that (a) is provided by one party to the other party under this Agreement or the Confidentiality Agreement signed by Halozyme and Baxter on August 14, 2003 (as amended, the “Confidentiality Agreement”), and (b) if disclosed in writing or other tangible medium is marked or identified as

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confidential at the time of disclosure to the recipient, or is acknowledged at the time of disclosure to be confidential, or otherwise should reasonably be deemed to be confidential. Notwithstanding the foregoing, Confidential Information of a party shall not include that portion of such information and data which, and only to the extent, the recipient can establish by written documentation: (i) is known to the recipient as evidenced by its written records before receipt thereof from the disclosing party, (ii) is disclosed to the recipient free of confidentiality obligations by a third person who has the right to make such disclosure, (iii) is or becomes part of the public domain through no fault of the recipient, or (iv) the recipient can reasonably establish is independently developed by persons on behalf of recipient without access to or use of the information disclosed by the disclosing party.

          1.11 “DESI Review Indication” shall mean the DESI Review indication “as an adjuvant to increase the absorption and dispersion of other injected drugs; for hypodermoclysis; as an adjunct in subcutaneous urography for improving the resorption of radiopaque agents” (as described in 37 Fed. Reg. No. 122, p. 12418 (June 13, 1972)).

          1.12 “FDA” shall mean the United States Food and Drug Administration or any successor entity thereto or any applicable Regulatory Authority as defined in the Standalone Product Master Plan.

          1.13 “FD&C Act” shall mean the United States Federal Food, Drug and Cosmetic Act, as may be amended from time to time.

          1.14 “Labeling” shall mean all labels and other written, printed, or graphic matter upon: (i) Standalone Product or any container, carton, or wrapper utilized with Standalone Product or (ii) any written material accompanying Standalone Product.

          1.15 “Master Batch Record” or “MBR” shall mean the formal set of instructions for Production of Standalone Product, as amended, supplemented or restated from time to time by mutual written agreement of the parties. The MBR will be developed jointly by Halozyme and Baxter and approved by both parties, prior to Production of Standalone Product.

          1.16 “NDA” shall mean a New Drug Application as defined in the FD&C Act or FDA Regulations (21 CFR).

          1.17 “PH20 Drug” shall mean 150 USP units per container of the active compound, recombinant human PH20 hyaluronidase (i.e. a truncated form of native human PH20 hyaluronidase consisting of residues 36-482, inclusive, of the native human PH20 hyaluronidase), in any liquid injectable or subcutaneously infusible formulation, supplied by Halozyme to Baxter hereunder.

          1.18 “Production”, “Produce”, or “Produced” shall mean the filling, packaging, inspection, labeling, and testing of Standalone Product by Baxter.

          1.19 “Quality Agreement” shall mean the Amended and Restated Quality Agreement, in the form attached as Exhibit B, entered into by Baxter and Halozyme as of the Restatement Date, as amended, supplemented or restated from time to time in accordance with Section 2.4 or as the parties otherwise mutually agree in writing.

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          1.20 “Regulatory Authority” shall mean those agencies or authorities responsible for regulation of Standalone Product as described within the Standalone Product Master Plan.

          1.21 “Regulatory Plan” shall mean the plan containing regulatory services and support for the development and maintenance of regulatory submissions and supporting documentation for Production of the Standalone Product. Such plan will be created, and may be amended, supplemented or restated from time to time, by mutual written agreement of the parties, and will be shared with the Advisory Committee.

          1.22 “Released Executed Batch Record” shall mean the completed batch record (in the form of the applicable Master Batch Record) and associated deviation reports, investigation reports, and Certificates of Analysis (provided in accordance with the Quality Agreement) created for each Batch of Standalone Product and approved as released to Halozyme under cGMP by Baxter’s quality assurance department.

          1.23 “Standalone Product” shall mean (a) the PH20 Drug product in the form developed under the Original Development Agreement, and (b) any other formulation of such PH20 Drug product that Halozyme develops under this Agreement, in each case of clauses (a) and (b), which product is promoted, marketed and sold on a standalone basis (i.e., in a separate container, separately packaged and labeled, and at a separate price), as the sole active pharmaceutical ingredient, solely for use in the DESI Review Indication.

          1.24 “Standalone Product Master Plan” shall mean, collectively, the following:

• the Quality Agreement (Exhibit B)

• the Standalone Product Specifications; incl. API, Final Standalone Product, Components, Excipient (HSA) as in effect upon the Restatement Date (Exhibit C)

• Territories (as per Distribution Agreement)

• the API Price (Exhibit A).

          1.25 “Standalone Product Specifications” shall mean those specifications and testing to be performed for the Standalone Product as set forth in Exhibit C as they exist as of the Restatement Date, with such changes (a) as the parties mutually agree in writing, and (b) as required by the FDA.

          1.26 “Territory” shall mean all countries of the world.

     2. STANDALONE PRODUCT MASTER PLAN.

          2.1 Standalone Product Master Plan. The exhibits attached to this Agreement comprise the Standalone Product Master Plan.

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          2.2 Amendment of Standalone Product Master Plan. Except as otherwise set forth in this Section or Section 2.4, the Standalone Product Master Plan may be amended from time to time, as the parties’ experience with the Production, testing and use of the Standalone Product warrants, only upon recommendation of the Advisory Committee and mutual written agreement of Halozyme and Baxter. At the reasonable request of Halozyme, the parties shall negotiate in good faith modification(s) to the Standalone Product Specifications to address regulatory concerns raised by any Regulatory Authority or reasonably raised by Halozyme.

          2.3 Advisory Committee.

               2.3.1 The Purpose of the Advisory Committee. The purpose of the Advisory Committee shall be (a) to facilitate the exchange of information between the parties regarding the Standalone Product, (b) to review and discuss the commercialization plans (including the annual marketing plans) and the product launch plans for each jurisdiction regarding the Standalone Product, and (c) to review and discuss priorities for the commercialization of the Standalone Product. Baxter shall have final decision making authority with respect to the commercialization of the Standalone Product. For the avoidance of doubt, this authority does not affect Baxter’s contractual obligations under Section 2.2 of the Exclusive Distribution Agreement.

               2.3.2 Composition of the Advisory Committee. The Advisory Committee shall consist of three (3) named representatives of Baxter and three (3) named representatives of Halozyme. Each party shall appoint its respective representatives to the Advisory Committee from time to time, and may substitute one or more of its representatives, in its sole discretion, effective upon notice to the other party of such change but shall use commercially reasonable efforts to maintain stability of Advisory Committee representation.

               2.3.3 Meetings. The Advisory Committee shall meet not less than twice each calendar year, on such dates and at such times and places as agreed to by Baxter and Halozyme.

               2.3.4 Advisory Committee Minutes and Reports. One representative of each party shall be designated to take minutes of each Advisory Committee meeting. Within fifteen (15) days following each Advisory Committee meeting during the term of the Agreement, a member of the Advisory Committee shall prepare and provide to each party reasonably detailed written minutes which shall summarize the outcome of the meeting, provided that such minutes shall not be finalized unless they have been expressly approved in writing by each party.

          2.4 Quality Agreement. At the reasonable request of either party, the parties shall negotiate in good faith amendment(s) to the Quality Agreement to address matters specific to the Production of the Standalone Product to address regulatory concerns raised by any Regulatory Authority or reasonably raised by either party.

          2.5 No Amendment of Agreement. In the event that the terms of the Standalone Product Master Plan or Quality Agreement are inconsistent with the terms of this Agreement, this Agreement shall control, unless otherwise explicitly agreed to in writing by the

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parties. The Standalone Product Master Plan and Quality Agreement shall be incorporated herein by reference and made a part of this Agreement.

     3. DEVELOPMENT AND PRODUCTION OF STANDALONE PRODUCT.

          3.1 Development. Pursuant to the Original Distribution Agreement, the parties conducted the development of the Standalone Product. Following the Restatement Date, Halozyme shall control the development of any other form or formulation of the Standalone Product, and in doing so shall consider in good faith the interests of Baxter.

          3.2 Production. Pursuant to the terms and conditions of this Agreement, Baxter shall, in a timely manner, conduct Production of Standalone Product necessary for Halozyme to meet its obligations under the Exclusive Distribution Agreement and otherwise as necessary to meet market demand.

          3.3 Documentation. Each Batch of Standalone Product shall be Produced by using a copy of the Master Batch Record. Each copy of the Master Batch Record, known as a “Batch Record” or, when completed, an “Executed Batch Record,” for such Batch of Standalone Product shall be assigned a unique batch number. Any deviation from the manufacturing process specified in the Master Batch Record must be documented in the copy of the Executed Batch Record for that Batch. Baxter shall provide Halozyme with required supporting documentation in a form reasonably suitable for Halozyme’s submission to the FDA.

          3.4 API.

               3.4.1 Prior to the Restatement Date, Baxter has prepared and provided to Halozyme a written forecast (the “Initial API Forecast”) of its good faith requirements for API for each of the first eighteen (18) months following the Restatement Date. Not later than one hundred eighty (180) days prior to the first day of each calendar quarter during the term of this Agreement (commencing with the calendar quarter beginning July 1, 2007), Baxter shall prepare and provide Halozyme with a written forecast (together with the Initial API Forecast, each a “Rolling API Forecast”) of its good faith estimated requirements for API under this Section 3.4 for each of the subsequent six (6) calendar quarters. Baxter shall not (a) increase or decrease the quantity estimated for the first quarterly period of each forecast from the quantity estimated for the second quarterly period of the previous forecast, or (b) increase or decrease the quantity estimated for the second and third quarterly periods of each forecast by more than twenty five percent (25%) of the quantity estimated for the third and fourth quarterly periods of the previous forecast, respectively, without the prior express written consent of Halozyme. The quantities estimated for the fifth and sixth quarterly periods of each forecast shall be non-binding, and for planning purposes only.

               3.4.2 Baxter shall be required to purchase one hundred percent (100%) of the quantity of API forecasted for the first and second quarterly periods of each Rolling API Forecast.

               3.4.3 Halozyme shall be required to supply the quantity of API ordered by Baxter under this Section 3.4 in any calendar quarter up to one hundred ten percent (110%) of the quantity forecasted for the first quarterly period of the most recent Rolling API Forecast. If

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Baxter’s orders in any calendar quarter exceed one hundred ten percent (110%) of the quantity forecasted for the first quarterly period of the most recent forecast, Halozyme shall use good faith efforts to supply such excess. Halozyme shall use commercially reasonable efforts to meet Baxter’s delivery requirements specified in accordance with Section 3.4.4.

               3.4.4 Baxter shall make all purchases under this Section 3.4 by submitting firm purchase orders to Halozyme. Each such purchase order shall be in writing in a form reasonably acceptable to Halozyme, and shall specify the quantity of API ordered, the place of delivery and the required delivery date therefor, which shall not be less than sixty (60) days after the date of such purchase order. No additional terms of any such purchase order shall be binding on Halozyme and are expressly rejected hereby. In the event of a conflict between the terms and conditions of any purchase order and this Agreement, the terms and conditions of this Agreement shall prevail.

               3.4.5 Halozyme shall develop and transfer to Baxter in a timely manner analytical methods and API Specifications, excipients and final dosage form applicable to the Production of Standalone Product. Halozyme will be responsible for the manufacture or contract manufacture of the API meeting cGMP, in compliance with the API Specifications and in a manner suitable for use in the final dosage form of the Standalone Product. The manufacturing site of the API must allow Baxter to audit the site as per the Quality Agreement on a periodic basis to be no more than once per year. In the event any material or API to be supplied by Halozyme is imported into the United States for delivery to Baxter, then Halozyme shall be the importer of record and such material or API shall be delivered FCA place of manufacture (Incoterms 2000).

               3.4.6 Baxter shall only use the API to Produce Standalone Product under this Agreement, which Standalone Product shall only be sold by Baxter under and in accordance with the Exclusive Distribution Agreement.

               3.4.7 Halozyme shall sell to Baxter the API at a transfer price equal to its “API Price” as defined in Exhibit A. Within sixty (60) days following the receipt of an invoice from Halozyme for the API, unless Baxter properly determines in accordance with the foregoing that such API does not conform to the API Specifications, Baxter shall pay to Halozyme the applicable API Price. If the API does not conform to the API Specifications, Baxter shall promptly return such API, at Halozyme’s cost, and shall not be obligated to pay to Halozyme the API Price therefor. Shipping shall be FOB destination.

               3.4.8 Following the Restatement Date, Halozyme shall be responsible for implementing a commercially reasonable backup manufacturing strategy for API sufficient to meet Baxter’s Rolling API Forecasts. Halozyme shall review such manufacturing strategy with Baxter at least annually, and prior to implementing any material changes requiring a CBE-30 or equivalent regulatory filing.

          3.5 Delivery Delays. Each party shall use its commercially reasonable efforts to ensure a steady supply of the API and Standalone Product (as applicable) or to resolve any associated supply issues with their respective contractors.

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          3.6 Material Safety Data Sheet. Halozyme shall provide Baxter a Material Safety Data Sheet for API delivered to Baxter. Baxter shall immediately notify Halozyme of any unusual health or environmental occurrence relating to Standalone Product, including, but not limited to any claim or complaint by any employee of Baxter or any of its Affiliates or third party that the operations of Baxter pursuant to this Agreement have resulted in any adverse health or safety effect on an employee or third party. Baxter agrees to advise Halozyme immediately of any safety or toxicity problems of which it becomes aware regarding the Standalone Product.

          3.7 Vendor and Supplier Audit and Certification. Halozyme shall be solely responsible for certifying and auditing all Standalone Product-related vendors and suppliers of API. All vendors and suppliers of API shall be subject to Halozyme’s prior written approval.

          3.8 Foreign Corrupt Practices Act. Baxter acknowledges that it is not the agent of Halozyme and represents and warrants that it has not, and covenants that it will not, pay anything of value to any government employee in connection with the resale of the Standalone Product.

          3.9 Storage of API and Standalone Product.

               3.9.1 Baxter shall provide, at its expense, appropriate storage for API and Standalone Product in one or more secure, insured and bonded warehouses with appropriate climate-control for API and Standalone Product in a manner consistent with operating procedures that Baxter uses for its own products and consistent with storage conditions as provided in the Quality Agreement, Section 5.11. Such API and Standalone Product shall be segregated from Baxter’s other products per established cGMP procedures. Following final release of Standalone Product, if the Exclusive Distribution Agreement is then in effect, unless the parties otherwise mutually agree in writing (where such Standalone Product is intended for clinical testing or development purposes in accordance with this Agreement), such Standalone Product shall be transferred to Baxter pursuant to the Exclusive Distribution Agreement.

               3.9.2 Upon termination of the Exclusive Distribution Agreement, (a) all Standalone Product that has not yet been transferred to Baxter pursuant to Section 3.9.1 and all API and Components that are then in Production shall continue in Production to become Standalone Product and transferred to Baxter solely for distribution under the terms and conditions of the Exclusive Distribution Agreement that govern distribution of remaining Standalone Product following termination, and (b) all API that has not yet been put into Production of Standalone Product shall be returned to Halozyme at an amount equal to the API Price actually paid by Baxter for such API (if any) and reasonable shipping costs therefor.

          3.10 Non-Contravention.

               3.10.1 During the term of this Agreement, except as provided for in this Agreement, the Exclusive Distribution Agreement or as otherwise permitted by written agreement of the parties in each instance, neither Halozyme nor its Affiliates shall sell, transfer or otherwise provide, directly or indirectly, to any third party 1500 USP units (or less) per container of recombinant human PH20 hyaluronidase as the sole active pharmaceutical

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ingredient for the DESI Review Indication in any liquid injectable or subcutaneously infusible formulation, and/or any lyophilized formulation. To the extent not prohibited by applicable law, Halozyme shall restrict (through contracts and/or purchase orders, marketing literature, shipping documents, or similar documents used when a supply, distribution or similar agreement is not in place) its customers and distributors and require similar restrictions throughout the supply chain, from selling any product described above. Halozyme shall use commercially reasonable efforts to enforce such restrictions, including without limitation by (i) notifying such customer or distributor in writing of such alleged violation, (ii) conducting an investigation of such alleged violation as Halozyme deems reasonably appropriate under the circumstances, and (iii) suspending shipments of recombinant human PH20 hyaluronidase to a customer or distributor if Halozyme becomes aware that such customer or distributor is selling any product described above. Baxter acknowledges and agrees that Halozyme’s obligations under this Section 3.10.1 do not expand or enlarge the rights granted to Baxter hereunder, which rights are limited in all respects to the Standalone Product.

               3.10.2 During the term of this Agreement, except as provided for in this Agreement, the Exclusive Distribution Agreement or as otherwise permitted by written agreement of the parties in each instance, neither Baxter nor any of its Affiliates shall (a) sell, transfer or otherwise provide, directly or indirectly, to any third party (other than Halozyme and its Affiliates) any product comprising recombinant human PH20 hyaluronidase, (b) condition the sale or transfer of the Standalone Product with the sale or transfer of any other product or the use of any service unless the price for the Standalone Product is separately itemized on the applicable invoice and is the same price charged by Baxter for the Standalone Product when sold separately, (c) promote, sell or transfer a product comprising a coformulation of the Standalone Product, or any portion thereof, with any other product, (d) promote, sell or transfer a product comprising the Standalone Product kitted with any other product (i.e., in one or more containers or delivery devices, with a single label, packaged together at a single price), (e) promote, sell or transfer any Standalone Product for any use other than the DESI Review Indication, or (f) conduct, have conducted or assist or facilitate the conduct of any study of the Standalone Product that requires the use of more than requires the administration of more than a single 150 USP unit dose. To the extent not prohibited by applicable law, Baxter and its Affiliates shall restrict (through contracts and/or purchase orders, marketing literature, shipping documents, or similar documents used when a supply, distribution or similar agreement is not in place) its customers and distributors and require similar restrictions throughout the supply chain, from selling any other product comprising recombinant human PH20 hyaluronidase or bundling the Standalone Product with any other product. Baxter and its Affiliates shall use commercially reasonable efforts to enforce such restrictions, including without limitation by (i) notifying such customer or distributor in writing of such alleged violation, (ii) conducting an investigation of such alleged violation as Baxter and its Affiliates deem reasonably appropriate under the circumstances, and (iii) suspending shipments of Standalone Product to a customer or distributor if Baxter or its Affiliates become aware that such customer or distributor is violating such restrictions.

          3.11 Regulatory Approvals. Halozyme shall be responsible for obtaining required regulatory approvals to sell Standalone Product in each country in the Territory on a schedule consistent with prudent business practices in the pharmaceutical industry. Halozyme shall give Baxter the first opportunity to conduct any necessary pre-approval clinical studies and

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regulatory activities in the European Union, provided that Baxter has the expertise and resources to do so and is able to do so in a manner that is timely, cost-effective and competitive with third party contract research organizations. Subject to the foregoing, Halozyme shall have the right, to contract with any third party to conduct such studies and activities in any country in the Territory.

          3.12 Baxter Clinical Studies. Baxter shall have the right to conduct post-approval marketing clinical studies of the Standalone Product for use in the DESI Review Indication. Prior to finalizing the protocol for any clinical study of the Standalone Product, (a) Baxter shall provide Halozyme with a copy of the reasonably complete draft of such protocol; (b) Halozyme shall have a reasonable opportunity to review, comment and consult on each such protocol; and (c) the parties shall meet to discuss Halozyme’s comments, and (d) Baxter shall in good faith consider the comments of Halozyme.

     4. DEVELOPMENT FUNDING.

          4.1 Initial Development. The parties acknowledge and agree that Halozyme was responsible for certain costs incurred by Baxter or Halozyme in order to Produce the registration stability and validation Batches of the initial Standalone Product under the Original Development Agreement, up to an aggregate of three million ($3,000,000). Commencing on the Restatement Date, all Production Costs and Other Costs incurred by Halozyme in connection with this Agreement shall be funded by Baxter in accordance with this Section 4.

          4.2 Production Costs and Other Costs. Baxter shall bear the Production Costs and Other Costs (as each is defined below), calculated on a fully-burdened basis, as follows:

               4.2.1 Baxter shall be responsible for (a) equipment acquired for Production of Standalone Product, (b) costs for the API at the price defined in Exhibit A, (c) changes to Standalone Product Specifications or equipment or facility due to regulatory requirements, (d) insurance procured solely for such Production, (e) taxes owing for such Production, and (f) direct salary and headcount costs directly related to such Production to the extent not attributable to other projects but specifically excluding general corporate overhead or headcount, such as legal, business development or finance services (clauses (a) — (f), collectively, the “Production Costs”).

               4.2.2 Baxter shall be responsible for (a) the reasonable fully-burdened cost to Halozyme to conduct its research, development, regulatory and related activities for Standalone Product conducted after the Restatement Date under this Agreement (consistent with the Standalone Product Master Plan, as amended from time to time), and (b) all other costs (other than Production Costs) to conduct all other activities (including post-approval activities) regarding the development, clinical, manufacturing, regulatory, promotion, sales, marketing and distribution of Standalone Product; provided, however, that Baxter’s obligation to pay for the maintenance of marketing applications for Standalone Product in the Territory shall be limited to the obligation to pay all out-of-pocket costs paid or payable to applicable governmental authorities to maintain such marketing applications (clauses (a) — (b) collectively, the “Other Costs”).

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               4.2.3 Within thirty (30) days following the end of each calendar quarter during the term of this Agreement, Halozyme shall invoice Baxter for the amount of Production Costs and Other Costs actually incurred by Halozyme during such calendar quarter, and Baxter shall within sixty (60) days of receipt of such invoice, pay to Halozyme such amounts.

               4.2.4 The Production Costs and Other Costs shall be calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and standard accounting practices, consistently applied.

          4.3 Formulations. If, during the term of this Agreement, a party believes that a different formulation of the Standalone Product is required by the applicable Regulatory Authority of any country within the Territory, then such party may provide written notice to the other party describing in reasonable detail the requirements of such Regulatory Authority regarding such formulation. Following the receipt of such written notice, the parties shall meet and consider such requirements; provided, however, that any proposed changes to this Agreement, the Exclusive Distribution Agreement, the Quality Agreement or the Standalone Product shall not be binding on either party unless set forth in a writing that has been duly authorized and executed by both parties.

          4.4 Data.

               4.4.1 Except as the parties otherwise mutually agree in writing, all data and information generated or obtained by Baxter with respect to the Standalone Product (including without limitation the results of clinical studies of the Standalone Product, collectively referred to as “Baxter Data”) shall be the property of Baxter. Baxter has the unrestricted right to freely utilize Baxter Data in any lawful purpose consistent with the rights of the parties under this Agreement. Baxter shall provide Halozyme with all results of the Baxter clinical studies, and Halozyme shall have the unrestricted right to use such results for any lawful purpose consistent with the rights of the parties under this Agreement.

               4.4.2 Except as the parties otherwise mutually agree in writing, all data and information generated or obtained by Halozyme with respect to the Standalone Product (including without limitation the results of clinical studies of the Standalone Product, collectively referred to as “Halozyme Data”) shall be the property of Halozyme. Halozyme has the unrestricted right to freely utilize Halozyme Data in any lawful purpose consistent with the rights of the parties under this Agreement. Halozyme shall provide Baxter with all results of Halozyme clinical studies resulting from clinical studies of the Standalone Product, and Baxter shall have the unrestricted right to use such results for any lawful purpose consistent with the rights of the parties under this Agreement.

               4.4.3 Baxter will report to Halozyme any serious adverse events and any adverse events and product complaints regarding the Standalone Product, consistent with the Quality Agreement. Halozyme must report to Baxter any serious adverse events immediately and any adverse events and product complaints regarding the Standalone Product, in each case in accordance with the Quality Agreement.

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     5. TERM AND TERMINATION.

          5.1 Term. This Agreement shall commence on the Restatement Date and will continue, unless terminated pursuant to this section, as long as the Exclusive Distribution Agreement is in effect. Upon the expiration or termination of the Exclusive Distribution Agreement, this Agreement shall immediately terminate.

          5.2 Termination for Breach. If a party has materially breached this Agreement and such material breach shall continue for thirty (30) days for a monetary breach, and sixty (60) days for a non-monetary breach, or such additional time reasonably necessary to cure such non-monetary breach, provided that the breaching party has commenced a cure within the sixty (60) day period and is diligently pursuing completion of such cure, such additional period not to exceed one hundred and twenty (120) days in total after written notice of such breach was provided to the breaching party by the nonbreaching party, the nonbreaching party shall have the right at its option to terminate this Agreement effective at the end of such period.

          5.3 Termination by Baxter. Baxter may terminate this Agreement at any time upon one hundred and eighty (180) days prior written notice to Halozyme.

          5.4 Additional Rights and Remedies. Subject to Section 14.1, termination under this Section 5 shall be in addition to the other rights and remedies of the terminating party. Termination of this Agreement for any reason shall not relieve any party of any obligations accruing prior to such termination.

          5.5 Survival. Termination, expiration, cancellation or abandonment of this Agreement through any means or for any reason, except as set forth in Section 5.1, shall be without prejudice to the rights and remedies of either party with respect to any antecedent breach of any of the provisions of this Agreement. The provisions of Sections 5, 7, 11, 12, 13, 14, 15, 16 and 17 hereof shall survive expiration or termination of this Agreement.

          5.6 Files and Records. Within sixty (60) days following the expiration or termination of this Agreement, Baxter shall make available to Halozyme copies of all manufacturing and process development documents and records relating to Standalone Product, shall store the originals or electronic copies of such documents and records according to cGMP in a safe and secure facility for at least two (2) years after the expiration date of the last Batch Produced by Baxter under this Agreement, and shall permit the FDA or other Regulatory Authorities access to such documents and records to the extent requested thereby. For a period of twelve (12) months following expiration or termination of this Agreement, Baxter shall make available to Halozyme for review, from regulatory filings, any non-confidential information contained therein that is reasonably related to Standalone Product that may be used by Halozyme to support any investigational studies or commercial marketing of Standalone Product.

     6. PRODUCTION OF STANDALONE PRODUCT.

          6.1 Production. Baxter or one or more of its Affiliates shall Produce the Standalone Product in accordance with the Product Requirements and cGMP applicable to each Territory. Subject to compliance with reasonable rules and regulations of Baxter relating to confidentiality, safety and security, Halozyme shall have the right to access the Baxter facilities

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directly affecting the Production of the Standalone Product, and all applicable records related thereto, to oversee Production of the Standalone Product in accordance with the Quality Agreement and Baxter’s standard visitation policy. Halozyme shall have the right to monitor each Production run of the Standalone Product (from Component preparation through final labeling and assembly) in accordance with the Quality Agreement. Halozyme shall have the right to render technical advice and direction to Baxter regarding Production of the Standalone Product pursuant to their involvement in the generation of the Master Batch Record or direct communication with the Project Manager or Technical Service Representative. Baxter promptly shall implement all reasonable advice and direction provided that such advice and direction is not inconsistent with the Standalone Product Master Plan, Baxter SOPs, and cGMP. If Halozyme observes or discovers variances from established standards and methods of Production of Standalone Product, Halozyme shall give written notice thereof to Baxter, and upon receipt of any such notice, Baxter promptly shall take all appropriate remedial or corrective action and give written notice to Halozyme describing in reasonable detail such actions taken. If Baxter disagrees with any such advice and direction, the parties shall discuss in good faith an appropriate resolution.

          6.2 Audits. Baxter will allow representatives from Halozyme to have access to their manufacturing, warehousing, laboratory premises, records, regulatory filings and communications (e.g., FDA483s and Establishment Inspection Reports) for audit purposes listed below in Sections 6.2.1 through 6.2.3; provided, however, Baxter has the obligation to protect the confidential information of its clients.

               6.2.1 Baxter will permit Halozyme to conduct one preparatory audit of cGMP manufacture of the Standalone Product for pre-approval inspection for Standalone Product. Follow-up to this audit will be considered part of the first audit. Subsequent, new audits will be subject to Baxter’s customary charges.

               6.2.2 Baxter will permit Halozyme to conduct audits to address significant Standalone Product quality or safety problems as discovered through Standalone Product failures or complaints related to Baxter’s manufacturing of the Standalone Product.

               6.2.3 Baxter will permit Halozyme to perform one standard cGMP compliance audits per year.

               6.2.4 Subject to the execution of a confidential disclosure agreement among Baxter, Halozyme and Halozyme’s licensee(s), Baxter will permit access by Halozyme’s licensees to Baxter’s premises for audit purposes, consistent with the limitations listed in Sections 6.2.1 through 6.2.3. Halozyme will accompany the licensees during each audit, provided the audit is directly related to Halozyme’s Standalone Product.

          6.3 Audit Closeout. An exit meeting will be held with representatives from Baxter and Halozyme to discuss significant audit observations. Halozyme will provide a written report of all observations within thirty (30) days to Baxter. Within thirty (30) days of the audit report receipt, Baxter will provide a written response to all findings that details corrective action to be implemented. Baxter will follow up to ensure that all corrective actions are implemented

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          6.4 Testing. In accordance with the Quality Agreement, Baxter shall test, or cause to be tested by third party testing facilities audited by Baxter, in accordance with the Standalone Product Requirements, each Batch of Standalone Product Produced pursuant to this Agreement before any release or distribution pursuant to the Exclusive Distribution Agreement. A certificate of analysis for each Batch of Standalone Product shall set forth the items tested by Baxter, Standalone Product Specifications, and test results in accordance with the Quality Agreement. Baxter shall send, or cause to be sent, such certificates along with one (1) copy of the entire Released Executed Batch Record to Halozyme prior to selling any Standalone Product from such Batch and within thirty (30) days following the completion of such Batch. As required by the FDA, Halozyme shall assume responsibility for final release of each lot of Standalone Product prior to distribution of the applicable lot.

          6.5 Permits and Licenses.

               6.5.1 Subject to the terms and conditions of this Agreement, Halozyme shall have sole responsibility for obtaining all permits and licenses necessary or required for the sale, marketing and commercialization of all Standalone Product. Baxter shall be responsible to obtain and maintain all permits and licenses required for it to carry out its regulatory and Production obligations hereunder. Baxter shall cooperate with Halozyme by assisting in preparing and filing any necessary documents to support Halozyme’s applications for permits and licenses.

               6.5.2 Notwithstanding anything to the contrary in this Agreement, the parties acknowledge and agree that nothing in this Agreement gives Halozyme any rights to reference the NDA No. 6-343 for Wydase.

          6.6 Regulatory Requirements. Each party promptly shall notify the other of new regulatory requirements of which it becomes aware which are relevant to the Production of a Standalone Product under this Agreement and which are required by the FDA, any other applicable Regulatory Authority or other applicable laws or governmental regulations, and shall confer with each other with respect to the best means to comply with such requirements. Notwithstanding anything to the contrary in this Agreement, each party shall be responsible for its compliance with all regulatory requirements of the United States and all foreign countries that are applicable to such party’s facilities and each party’s activities in Production, whether or not a party is aware of such requirements and has failed to give notice to the other party.

          6.7 Regulatory Approvals. Halozyme shall solely own all regulatory filings, approvals and licenses for the Standalone Product. In accordance with the Standalone Product Master Plan, and subject to Baxter’s funding obligations under Section 4.2, Halozyme shall pursue regulatory approval of marketing licenses for the Standalone Product, in each case Produced by Baxter for Halozyme hereunder. Halozyme will advise Baxter of document requirements in support of NDA and similar applications required of foreign governments and agencies with respect to the Standalone Product, including amendments, license applications, supplements and maintenance of such. Baxter will provide documents and assist Halozyme in preparation of submissions to Regulatory Authorities (both U.S. and foreign) designated by Halozyme in support of Halozyme’s NDA and similar applications required of foreign governments and licenses with respect to the Standalone Product. Halozyme will be responsible

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for all contacts with the FDA (and foreign regulatory authorities) and all adverse event reporting and complaint handling for the Standalone Product in the Territory.

          6.8 Regulatory Authority Inspections.

               6.8.1 Interaction with Regulatory Authorities. All interaction with Regulatory Authorities (both written and oral) that directly affects Standalone Product or the Production of Standalone Product shall be conducted in accordance with the provisions of this Section 6.

               6.8.2 Standalone Product Pre-Approval Inspection. In the case of a Standalone Product Pre-Approval Inspection by the FDA related to the Standalone Product, the following shall apply: (a) Baxter immediately shall inform Halozyme of the notice of such inspection; (b) Baxter shall permit a representative of Halozyme to be present at the Baxter facility that is the subject of such inspection (not to be present at the inspection or to participate, except to be available on an as-needed basis as requested by Baxter); (c) Baxter shall apprise such representative of Halozyme regarding each daily wrap up session for such inspection and the post-inspection wrap up session for such inspection; (d) Baxter promptly shall provide Halozyme with copies of all written materials, including without limitation copies of any Notice of Inspection (FDA Form 482), other notice of inspection, notice of violation, other similar notice, or Inspectional Observations (FDA Form 483, its foreign equivalent and Establishment Inspection Reports) received by Baxter relating to such inspection, and (e) Baxter shall provide Halozyme with advance copies of all proposed responses to any such inspections, notices or actions, shall permit Halozyme reasonable opportunity to review and comment within 3 to 5 business days on each such response, shall reasonably consider Halozyme’s reasonable comments thereon, and shall provide Halozyme with copies of each such response as submitted. Baxter shall retain final authority for the content of the responses to the regulatory authority

               6.8.3 Other Product Specific Inspections. In the case of an inspection (other than the Standalone Product Pre-Approval Inspection) by a Regulatory Authority that directly affects the Production of Standalone Product, the following shall apply: (a) Baxter immediately shall inform Halozyme of the notice of such inspection; (b) Baxter shall permit a representative of Halozyme to be present at the Baxter facility that is the subject of such inspection (not to be present at the inspection or to participate, except to be available on an as-needed basis as requested by Baxter); (c) Baxter shall apprise such representative of Halozyme regarding each daily wrap up session for such inspection and the post-inspection wrap up session for such inspection; (d) Baxter promptly shall provide Halozyme with copies of all written materials, including without limitation copies of any Notice of Inspection (FDA Form 482), other notice of inspection, notice of violation, other similar notice, or Inspectional Observations (FDA Form 483, its foreign equivalent and Establishment Inspection Reports) received by Baxter relating to such inspection, and (e) Baxter shall provide Halozyme with advance copies of all proposed responses that directly affect Production of Standalone Product to any such inspections, notices or actions, shall permit Halozyme reasonable opportunity to review and comment on each such response, shall reasonably consider Halozyme’s reasonable comments thereon, and shall provide Halozyme with copies of each such response as submitted.

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               6.8.4 Other Inspections. The parties’ respective rights and obligations with respect to any inspections relating to the Standalone Product, other than those described above, shall be as set forth in the Quality Agreement.

          6.9 Labeling. Labeling development shall be conducted in accordance with Baxter’s standard procedures and as mutually agreed upon by the parties per the requirements located in Exhibit D. Baxter shall promote and market the Standalone Product solely using those trademark(s) mutually agreed upon in writing by the parties prior to the applicable commercial launch. Baxter shall include on the packaging, label and all promotional and marketing materials for the Standalone Product a secondary label, reasonably determined by Halozyme, identifying that Halozyme technology is included in the Standalone Product.

     7. ACCEPTANCE OF STANDALONE PRODUCT.

          7.1 Standalone Product Conformity. Within the later of forty-five (45) calendar days following the date of Halozyme’s receipt of retention samples of the Standalone Product, or fifteen (15) calendar days following the date of Halozyme’s receipt of the applicable entire Released Executed Batch Record(s) and related documentation in accordance with the Standalone Product Master Plan, Halozyme shall have the right to determine whether the Standalone Product conforms to cGMP, to all other applicable United States laws and regulations and all applicable foreign laws and regulations, to the applicable Standalone Product Specifications, and to the Quality Agreement (collectively the “Standalone Product Requirements”). Notwithstanding the foregoing, if Halozyme has conducted at least one test of the applicable Batch and in good faith has requested in writing, within the time period specified in this Section 7.1, additional time to perform additional testing, then such period shall be extended as reasonably necessary for Halozyme, or Baxter (if requested by Halozyme), to perform such additional testing.

               7.1.1 If (a) the Standalone Product conforms to the Standalone Product Requirements, or (b) Halozyme fails to notify Baxter within the time period specified in Section 7.1 that any Standalone Product does not conform to the Standalone Product Requirements, then Halozyme shall be deemed to have accepted the same and waived its right to revoke acceptance.

               7.1.2 If Halozyme believes the Standalone Product does not conform to the Standalone Product Requirements, it shall give written notice to Baxter specifying the manner in which it fails to meet the Standalone Product Requirements. Guidelines for resolving any disputed claims regarding conformity are set forth in Section 7.1.3.

               7.1.3 If the parties dispute whether the Standalone Product is conforming or non-conforming, the samples thereof will be submitted to a mutually acceptable laboratory or consultant for resolution, whose determination of conformity or non-conformity, and the cause thereof of non-conformity, shall be binding upon the parties. The non-prevailing party shall bear the costs of such laboratory or consultant.

          7.2 Remedy for Non Conforming Standalone Product. In the event Baxter agrees that any Standalone Product is non-conforming or the laboratory determines that the

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shipment thereof is non-conforming, Baxter shall destroy all non-conforming quantities and shall at its option (i) schedule to run a new Batch to replace such non-conforming quantities within the later of (a) sixty (60) calendar days from the date of determination by the third party of non-conformity, or (b) (60) days from the receipt of the non-conforming drug substance and agreement by Baxter of such non-conformity, or (ii) refund the cost of the non-conforming batch. Any costs incurred by Baxter to run a new Batch pursuant to this Section 7.2 shall not be Production Costs or Other Costs.

          7.3 Non Conforming API. If the Standalone Product is rejected by Halozyme, and the failure to meet the Standalone Product Requirements is the result of non-conforming API and the cause of such non-conformity is demonstrated not to be a result of the negligence, omission or willful misconduct of Baxter the rejection will be deemed not to be a breach of Baxter’s warranties or obligations under this Agreement. In the event of non-conforming API, Halozyme shall be responsible for costs reasonably incurred by Baxter for the rejected quantities.

     8. STANDALONE PRODUCT RECALLS.

          8.1 Standalone Product Recalls. Each party promptly shall notify the other if any Batch of Standalone Product is alleged or proven to be the subject of a recall, market withdrawal or correction. Baxter shall be responsible, subject to the oversight of Halozyme, for coordinating any recall, market withdrawal or field correction of Standalone Product, and such recall, market withdrawal or correction shall be conducted in accordance with the provisions of the Quality Agreement. Baxter will provide Halozyme with access to and copies of all consignees and distribution records for the Standalone Product and will cooperate with Halozyme in the determination of satisfactory execution of the recall action. Halozyme shall provide Baxter with a copy of all documents relating to such recall, market withdrawal or field correction. Halozyme shall cooperate with Baxter (including providing Baxter with all data, information and documents requested by Baxter) in connection with such recall, market withdrawal or field correction, at Baxter’s expense. Baxter shall bear all costs of such recall, market withdrawal or field correction; provided, however, that if a recall, market withdrawal or field correction is due solely to the API not conforming to the API Specifications or caused solely by the negligence, omission or willful misconduct of Halozyme, or solely by Halozyme’s breach of its warranties or obligations under this Agreement, Halozyme shall bear all costs of such recall, market withdrawal or field correction (including but not limited to costs associated with receiving and administering the recalled Standalone Product and notification of the recall to those persons whom Halozyme deems appropriate).

          8.2 Entire Liability of Baxter. This Section 8 sets forth the entire liability of Baxter in the event of a recall, market withdrawal, or field correction.

     9. FORCE MAJEURE EVENTS.

     Any delay in the performance of any of the duties or obligations of either party hereto (except the payment of money), to the extent caused by an event outside the affected party’s reasonable control, shall not be considered a breach of this Agreement, and unless provided to the contrary herein, the time required for performance shall be extended for a period equal to the period of such delay. Such events shall include without limitation, acts of God; acts of public

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enemies; insurrections; riots; injunctions; embargoes; labor disputes, including strikes, lockouts, job actions, or boycotts; fires; explosions; floods; shortages of material or energy; delays in the delivery of raw materials; acts or orders of any government or agency thereof or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the party so affected. The party so affected shall give prompt written notice to the other party of such cause and a good faith estimate of the continuing effect of the force majeure condition and duration of the affected party’s nonperformance, and shall take whatever reasonable steps are appropriate to relieve the effect of such causes as rapidly as possible. If the period of nonperformance by Baxter because of force majeure conditions exceeds one hundred eighty (180) calendar days, Halozyme may terminate this Agreement by written notice to Baxter. If the period of nonperformance by Halozyme because of force majeure conditions exceeds one hundred eighty (180) calendar days, Baxter may terminate this Agreement by written notice to Halozyme.

     10. CHANGES IN PRODUCTION.

          10.1 Changes to Standalone Product. Baxter agrees to inform Halozyme within fifteen (15) calendar days of the result of any regulatory development that directly affects the Production of a Standalone Product or changes to Standalone Product-specific Baxter SOPs. Baxter shall give written notice to Halozyme of any such changes, and Halozyme and Baxter will review such development or changes in accordance with the Quality Agreement; provided, however, that any changes to the Standalone Product Master Plan shall be made only in accordance with Section 2.2.

          10.2 Standalone Product-Specific Changes. If facility, equipment, process or system changes are required of Baxter as a result of requirements set forth by the FDA or any other Regulatory Authority, and such regulatory changes apply primarily to the Production and supply of a Standalone Product, then Halozyme and Baxter will review such requirements and agree in writing to such regulatory changes in accordance with the Quality Agreement.

     11. CONFIDENTIALITY.

          11.1 Confidentiality. During the term of this Agreement, and for a period of five (5) years following the expiration or earlier termination hereof, each party shall maintain in confidence all Confidential Information disclosed by the other party (including all Confidential Information disclosed under the Confidentiality Agreement), and shall not use, grant the use of or disclose to any third party the Confidential Information of the other party other than as expressly permitted hereby, or by the Exclusive Distribution Agreement or the Quality Agreement. Each party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the other party’s Confidential Information.

          11.2 Permitted Disclosures. Either party may disclose Confidential Information of the disclosing party (a) on a need-to-know basis, to such party’s directors, officers and employees to the extent such disclosure is reasonably necessary in connection with such party’s activities as expressly authorized by this Agreement, and (b) to those Affiliates, agents and consultants who need to know such information to accomplish the purposes of this Agreement (collectively, “Permitted Recipients”); provided such Permitted Recipients are bound

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to maintain such Confidential Information in confidence to the same extent as set forth in Section 11.1.

          11.3 Terms of Agreement. Neither party shall disclose any terms or conditions of this Agreement to any third party without the prior consent of the other party; provided, however, that a party may disclose the terms or conditions of this Agreement, (a) on a need-to-know basis to its legal and financial advisors to the extent such disclosure is reasonably necessary, and (b) to a third party in connection with (i) an equity investment in such party, (ii) a merger, consolidation or similar transaction by such party, or (iii) the sale of all or substantially all of the assets of such party. Notwithstanding the foregoing, prior to execution of this Agreement, the parties have agreed upon the substance of information that can be used to describe the terms and conditions of this transaction, and each party may disclose such information, as modified by mutual written agreement of the parties, without the consent of the other party.

          11.4 Litigation and Governmental Disclosure. Each party may disclose Confidential Information hereunder to the extent such disclosure is reasonably necessary for prosecuting or defending litigation, complying with applicable governmental regulations or conducting pre-clinical or clinical trials, provided that if a party is required by law or regulation to make any such disclosure of the other party’s Confidential Information it will, except where impractical for necessary disclosures, for example in the event of a medical emergency, give reasonable advance notice to the other party of such disclosure requirement and will use good faith efforts to assist such other party to secure a protective order or confidential treatment of such Confidential Information required to be disclosed.

          11.5 Limitation of Disclosure. The parties agree that, except as otherwise may be required by applicable laws, regulations, rules or orders, including without limitation the rules and regulations promulgated by the United States Securities and Exchange Commission, and except as may be authorized in Section 11.5, no information concerning this Agreement and the transactions contemplated herein shall be made public by either party without the prior written consent of the other.

          11.6 Publicity and SEC Filings. The parties agree that the public announcement of the execution of this Agreement shall only be by one or more press releases mutually agreed to by the parties. The failure of a party to return a draft of a press release with its proposed amendments or modifications to such press release to the other party within five (5) business days of such party’s receipt of such press release shall be deemed as such party’s approval of such press release as received by such party. Each party agrees that it shall cooperate fully and in a timely manner with the other with respect to all disclosures to the Securities and Exchange Commission and any other governmental or regulatory agencies, including requests for confidential treatment of Confidential Information of either party included in any such disclosure.

     12. INVENTIONS

          12.1 Existing Intellectual Property. Except as the parties may otherwise expressly agree in writing, each party shall continue to own its existing patents, trademarks,

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copyrights, trade secrets and other intellectual property, without conferring any interests therein on the other party. Without limiting the generality of the preceding sentence, and except as expressly set forth in this Agreement, Halozyme shall retain all right, title and interest arising under the United States Patent Act, the United States Trademark Act, the United States Copyright Act and all other applicable laws, rules and regulations in and to Standalone Product, API, Labeling and Halozyme’s trademarks associated therewith (collectively, “Halozyme’s Intellectual Property”).

     12.2 Individually Owned Inventions.

               12.2.1 Except as the parties may otherwise agree in writing, all Inventions (as defined herein) which are conceived, reduced to practice, or created by a party in the course of performing its obligations under this Agreement shall be solely owned and subject to use and exploitation by the inventing party without a duty to account to the other party. For purposes of this Agreement, “Invention” shall mean information relating to any innovation, improvement, development, discovery, computer program, device, trade secret, method, know-how, process, technique or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which contained and whether or not patentable or copyrightable. Baxter hereby grants to Halozyme a royalty-free, non-exclusive, worldwide license (with the right to grant sublicenses) under all patent rights and other intellectual property rights specifically describing and claiming Inventions which are conceived, reduced to practice, or created by Baxter in the course of performing its obligations under this Agreement and which in each case (i) use or are supported by data and information derived from the use of recombinant human PH20 hyaluronidase or are derived from the activities under this Agreement, and (ii) only to the extent they relate to recombinant human PH20 hyaluronidase, its manufacture or use, and expressly excluding any intellectual property rights that were not conceived, reduced to practice or created by Baxter under this Agreement. Halozyme shall use commercially reasonable efforts to obtain a similar grantback license from any third party that enters into a development agreement with Halozyme for rights to make and sell products comprising recombinant human PH20 hyaluronidase, and if Halozyme is unable to obtain such a grantback license from any such third party, then Halozyme shall not grant a sublicense to such third party under the license grant from Baxter under this Section 12.2.1, and any such sublicense granted by Halozyme to such third party shall be void.

               12.2.2 The party solely owning any Invention shall have the world-wide right to control the drafting, filing, prosecution and maintenance of patents covering the Invention, including decisions about the countries in which to file patent applications. Patent costs associated with the patent activities described in this Section 12.2.2 shall be borne by the sole owner.

          12.3 Jointly Owned Inventions. All Inventions which are conceived, reduced to practice, or created jointly by the parties and/or their respective agents (i.e., employees or agents who would be or are properly named as co-inventors under the laws of the United States on any patent application claiming such inventions) in the course of the performance of this Agreement shall be owned jointly by the parties. Each party shall have full rights, subject to the provisions of this Agreement, to freely exploit, transfer, license or encumber its rights in any such jointly-owned Inventions and the patent rights and other intellectual property rights therein without the

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consent of, or payment or accounting to, the other party. The parties shall share equally in the cost of mutually agreed patent filings with respect to all such jointly owned Inventions. The decision to file for patent coverage on jointly owned inventions shall be mutually agreed upon and the parties shall select a mutually agreeable patent counsel to file and prosecute patent applications based on such joint Inventions; provided, however, that in the event that one party (a “Non-Interested Party”) notifies the other in writing that is not interested in rights it may have in a joint Invention (relative to its corresponding expenses and costs including patent prosecution and maintenance), the other party (the “Interested Party”) may elect to pursue rights in such a joint Invention at its own cost and expense (in which case the Non-Interested Party shall assign to the Interested Party the former’s interests in and to the joint Invention). Each party shall cooperate with the other party in the filing and prosecution of such jointly owned patent applications. Such cooperation will include, but not be limited to, furnishing supporting data and affidavits for the prosecution of patent applications and completing and signing forms needed for the prosecution, assignment and maintenance of patent applications.

          12.4 Disclaimer. Except as otherwise expressly provided herein, nothing contained in this Agreement shall be construed or interpreted, either expressly or by implication, estoppel or otherwise, as: (i) a grant, transfer or other conveyance by either party to the other of any right, title, license or other interest of any kind in any of its Inventions or other intellectual property, (ii) creating an obligation on the part of either party to make any such grant, transfer or other conveyance or (iii) requiring either party to participate with the other party in any cooperative development program or project of any kind or to continue with any such program or project, except to the extent the other party expressly agrees in writing.

          12.5 Confidentiality of IP. IP shall be deemed to be the Confidential Information of the party owning such IP. The protection of each party’s Confidential Information is described in Section 11. Any disclosure of information by one party to the other under the provisions of this Section 12 shall be treated as the disclosing party’s Confidential Information under this Agreement. It shall be the responsibility of the party preparing a patent application to obtain the written permission of the other party, which consent can not unreasonably be withheld, to use or disclose the other party’s Confidential Information in the patent application before the application is filed and for other disclosures made during the prosecution of the patent application.

          12.6 License for Performance of this Agreement. For the avoidance of doubt, Halozyme hereby grants to Baxter, and its Affiliates, a non-exclusive license under the Halozyme Intellectual Property, including any grantback rights to the Standalone Product or API that was obtained from third parties, solely for and to the extent necessary for Baxter or such Affiliate to perform its obligations under this Agreement, including but not limited to, the manufacture and handling of Standalone Product under this Agreement.

     13. REPRESENTATIONS AND WARRANTIES.

          13.1 Mutual Representations. Each party hereby represents and warrants to the other party that (a) the person executing this Agreement is authorized to execute this Agreement; (b) this Agreement is legal and valid and the obligations binding upon such party are enforceable by their terms; and (c) the execution, delivery and performance of this Agreement does not

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conflict with any agreement, instrument or understanding, oral or written, to which such party may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

          13.2 Baxter Warranty. Baxter represents and warrants that, as of the time of delivery by Baxter of Standalone Product to a distributor, end-user or other third party in accordance with this Agreement and the Exclusive Distribution Agreement, all Standalone Product Produced under this Agreement, (a) conforms to the Specifications, (b) has been Produced in accordance with cGMP, all applicable laws and regulations and in accordance with the applicable Certificates of Analysis (provided in accordance with the Quality Agreement) accompanying each Batch of Standalone Product, and (c) is not adulterated or misbranded within the meaning of the FD&C Act; provided, however, that the foregoing warranty will not extend to the API or any Halozyme supplied components or labeling. Baxter represents and warrants that it has obtained (or will obtain prior to Producing Standalone Product), and will remain in compliance with during the term of this Agreement, all permits, licenses and other authorizations (the “Permits”) which are required under federal, state and local laws, rules and regulations applicable to the Production of Standalone Product ; provided, however, Baxter shall have no obligation to obtain Permits relating to the sale, marketing, distribution or use of API or Standalone Product or with respect to the Labeling of Standalone Product. Baxter represents that to the best of its knowledge (i) no Baxter employees performing services on behalf of Baxter under this Agreement have been debarred under Section 306 of the FD&C Act, and (ii) no persons (other than Baxter employees) performing services on behalf of Baxter under this Agreement have been debarred under Section 306 of the FD&C Act.

          13.3 Baxter Disclaimer of Warranties. Except for those warranties set forth in Sections 13.1 and 13.2 of this Agreement, Baxter makes no warranties, written, oral, express or implied, with respect to Standalone Product or the development and Production of Standalone Product. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT HEREBY ARE DISCLAIMED BY BAXTER. NO WARRANTIES OF BAXTER MAY BE CHANGED BY ANY REPRESENTATIVES OF BAXTER. Halozyme accepts the Production of the Standalone Product subject to the terms hereof.

          13.4 Halozyme Warranties. Halozyme warrants that it has the right to give Baxter any information provided by Halozyme hereunder, and that Baxter has the right to use such information for the Production of Standalone Product. Halozyme further warrants that the API provided to Baxter hereunder (1) conforms to the API Specifications, (2) has been produced in accordance with cGMP and all applicable laws and regulations relating to the API and in accordance with the applicable Certificates of Analysis (provided in accordance with the Quality Agreement) accompanying each Lot of API and (3) is not adulterated or misbranded within the meaning of the FD&C Act. Halozyme further warrants that to its knowledge, upon reasonable inquiry, Halozyme is not aware of, nor has any third party asserted against Halozyme any claim, notice, or concern regarding the potential infringement of such third party’s proprietary rights as a result of the manufacture, use, offer to sell, sale, importation or distribution of the Standalone Product.

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          13.5 Disclaimer of Warranties. Except for those warranties set forth in Section 14.1 and 13.4 of this Agreement, Halozyme makes no warranties, written, oral, express or implied, with respect to API or Standalone Product. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT HEREBY ARE DISCLAIMED BY HALOZYME. NO WARRANTIES OF HALOZYME MAY BE CHANGED BY ANY REPRESENTATIVES OF HALOZYME. Baxter accepts API subject to the terms hereof.

     14. LIMITATION OF LIABILITY; WAIVER OF SUBROGATION.

          14.1 Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE FOR LOSS OF USE OR PROFITS OR OTHER COLLATERAL, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO THE COST OF A RECALL IN CONNECTION WITH OR BY REASON OF THE PRODUCTION AND DELIVERY OF STANDALONE PRODUCT UNDER THIS AGREEMENT OR OTHERWISE IN CONNECTION WITH THIS AGREEMENT, EXCEPT AS SET FORTH IN SECTION 7 AND 15, WHETHER SUCH CLAIMS ARE FOUNDED IN TORT OR CONTRACT. Without limiting the generality of the foregoing and notwithstanding anything to the contrary herein, the only liability of Baxter for any cost of cover claims (i) shall exist in the event of a breach hereof by Baxter due to its willful misconduct resulting in a failure to Produce conforming Standalone Product; and (ii) shall not include any costs or expenses associated with qualifying of another supplier or delays if one has not been so qualified by Halozyme.

          14.2 Waiver of Subrogation. All Components and equipment used by Baxter in the Production of Standalone Product, other than those Components and equipment that are specifically stated in this Agreement to be owned by Halozyme (collectively, “Baxter Property”), shall at all times remain the property of Baxter and Baxter assumes risk of loss for the Baxter Property. Baxter hereby waives any and all rights of recovery against Halozyme and its Affiliates, and against any of their respective directors, officers, employees, agents or representatives, for any loss or damage to Baxter Property to the extent the loss or damage is covered or could be covered by insurance (whether or not such insurance is described in this Agreement). Halozyme assumes all risk of loss for all API supplied by Halozyme (collectively “Halozyme Property”) until such Halozyme Property is received by Baxter or its Affiliates; and Halozyme hereby waives any and all rights of recovery against Baxter and its Affiliates for any such loss or damage to the Halozyme Property to the extent that the loss or damage is covered by or could be covered by insurance (whether or not such insurance is described in this Agreement).

     15. INDEMNIFICATION.

          15.1 Halozyme Indemnification. Halozyme shall indemnify, defend and hold harmless Baxter and its Affiliates and any of their respective directors officers, employees, authorized subcontractors and agents (collectively the Baxter “Indemnified Parties”) from and against any and all liabilities, obligations, penalties, judgments, disbursements of any kind and nature, losses, damages, costs and expenses (including, without limitation, reasonable attorney’s fees and costs) incurred as a result of any claims, demands, actions or other proceedings by

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unaffiliated third parties against an Indemnified Party to the extent arising out of property damage or personal injury (including without limitation death) of third parties (collectively “Claims”), resulting from (a) Halozyme’s negligence, omission or willful misconduct, (b) Halozyme’s breach of its representations or obligations under this Agreement or the Exclusive Distribution Agreement, (c) the execution, delivery and performance of this Agreement or the Exclusive Distribution Agreement by Halozyme conflicting with any other agreement of Halozyme relating to the production and supply of API, (d) Halozyme’s use of the results of Baxter clinical studies of the Standalone Product or (e) any claim that the use of API by Baxter in accordance with this Agreement, violates the patent, trademark, copyright or other proprietary rights of any third party, except to the extent any of the foregoing (a) — (e) is caused solely or principally by the negligence, omission or willful misconduct of the Baxter Indemnified Parties or solely by the breach by Baxter of its representations or obligations under this Agreement.

          15.2 Baxter Indemnification. Baxter shall indemnify, defend and hold harmless Halozyme and its Affiliates and any of their respective directors, officers, employees, authorized subcontractors and agents from and against any and all Claims to the extent resulting from (a) Baxter’s negligence, omission or willful misconduct, (b) Baxter’s breach of its representations or obligations under this Agreement or the Exclusive Distribution Agreement, (c) the execution, delivery and performance of this Agreement or the Exclusive Distribution Agreement by Baxter conflicting with any other agreement of Baxter relating to the Production and supply of Standalone Product, (d) Baxter’s use of the results of Halozyme clinical studies of the Standalone Product, (e) any claim that the Production of Standalone Product by Baxter in accordance with this Agreement, violates the patent, trademark, copyright or other proprietary rights of any third party, except to the extent that such claim is related to the API or the manufacture thereof, or (f) any claim that Baxter’s promotion, marketing or distribution of Standalone Product under the Exclusive Distribution Agreement violates the patent, trademark, copyright or other proprietary rights of any third party, except to the extent that such claim is related to the API or the manufacture thereof, or otherwise violates applicable laws or regulations or rights of any third party; except to the extent any of the foregoing (a) — (f) is caused solely by the negligence, omission or willful misconduct of the Halozyme Indemnified Parties or solely or principally by the breach by Halozyme of its representations or obligations under this Agreement.

          15.3 Indemnitee Obligations. A party (the “Indemnitee”) which intends to claim indemnification under this Section 15 shall promptly notify the other party (the “Indemnitor”) in writing of any claim, demand, action, or other proceeding in respect of which the Indemnitee intends to claim such indemnification; provided, however, that failure to provide such notice within a reasonable period of time shall not relieve the Indemnitor of any of its obligations hereunder except to the extent the Indemnitor is prejudiced by such failure. The Indemnitee shall permit, and shall cause its Affiliates, and their respective directors, officers, employees, subcontractors and agents to permit, the Indemnitor, at its discretion, to settle any such action, claim or other matter, and the Indemnitee agrees to the complete control of such defense or settlement by the Indemnitor. Notwithstanding the foregoing, the Indemnitor shall not enter into any settlement that would adversely affect the Indemnitee’s rights hereunder, or impose any obligations on the Indemnitee in addition to those set forth herein, in order for it to exercise such rights, without Indemnitee’s prior written consent, which shall not be unreasonably

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withheld or delayed. No such action, claim or other matter shall be settled without the prior written consent of the Indemnitor, which shall not be unreasonably withheld or delayed. The Indemnitee, its Affiliates, and their respective directors, officers, employees, subcontractors and agents shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation and defense of any claim, demand, action, or other proceeding covered by the indemnification obligations of this Section 15. The Indemnitee shall have the right, but not the obligation, to be represented in such defense by counsel of its own selection and at its own expense.

     16. INSURANCE.

          16.1 Baxter Insurance. Baxter shall procure and maintain, during the Term of this Agreement Commercial General Liability Insurance, including, Product Liability. The Successor Insurance shall cover amounts not less than three million dollars combined single limit. Baxter retains the right to insure or self insure in any combination at its sole discretion the above coverages.

          16.2 Halozyme Insurance. Halozyme shall maintain general liability insurance during the term of this Agreement adequately covering Halozyme’s obligations under this Agreement. Not more than once in any twelve (12) month period, Halozyme shall provide to Baxter evidence of such insurance, upon Baxter’s written request. Notwithstanding the foregoing, once there is a commercial sale of Standalone Product under the Exclusive Distribution Agreement, Halozyme shall maintain, at a minimum, during the term of this Agreement and for a period of three (3) years from the expiration or earlier termination of this Agreement, (a) commercial general liability insurance with a combined single limit for bodily injury of not less than five million U.S. Dollars ($5,000,000) each occurrence and five million U.S. Dollars ($5,000,000) in the aggregate, and (b) products liability/completed operations coverage with a per claim limit of not less than five million U.S. Dollars ($5,000,000) for the first year of this Agreement, five million U.S. Dollars ($5,000,000) for the second year of this Agreement, and five million U.S. Dollars ($5,000,000) for the remaining term of this Agreement. With respect to the policy under clause (b), such policy shall show Baxter as an additional insured and loss payee, and provide that Baxter will be given thirty (30) days advance written notice of the termination or cancellation thereof.

     17. GENERAL PROVISIONS.

          17.1 Notices. All notices hereunder shall be delivered by facsimile (confirmed by overnight delivery), or by overnight delivery with a reputable overnight delivery service, to the following address of the respective parties:

If to Halozyme:	Halozyme, Inc.
	11588 Sorrento Valley Road, Suite 17
	San Diego, California 92121
	Attn: President and Chief Executive Officer
	Fax: (858) 259-2539
	Phone: (858) 794-8889

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with a copy to:	Morrison & Foerster LLP
	12531 High Bluff Drive, Suite 100
	San Diego, California 92121
	Attention: Mark R. Wicker
	Fax: (858) 720-5125
	Phone: (858) 720-7918
If to Baxter:	Baxter Healthcare Corporation
	95 Spring Street
	New Providence, New Jersey 07974
	Attn: General Manager
	Fax: (908) 286-7293
	Phone: (908) 286-7104
With a copy to:	Baxter Healthcare Corporation
	One Baxter Parkway
	Deerfield, Illinois 60015-4633
	Attn: General Counsel
	Fax: 847-948-2450
	Phone: 847-948-2600
And to:	Baxter Healthcare SA
	Hertistrasse 2
	CH-8304 Wallisellen
	Switzerland
	Attn: Corporate Counsel
	Fax: +41 44 878 64 77
	Phone: +41 44 878 60 00

     Notices shall be effective on the day of receipt. A party may change its address listed above by notice to the other party given in accordance with this Section 17.1.

          17.2 Entire Agreement. The parties hereto acknowledge that this Agreement, together with the Stock Purchase Agreement dated as of the Restatement Date, between Halozyme Therapeutics, Inc., a Nevada corporation, and Baxter International Inc., a Delaware corporation (as amended or restated from time to time), the Quality Agreement and the Exclusive Distribution Agreement sets forth the entire agreement and understanding of the parties and supersedes all prior written or oral agreements or understandings, including the Original Development Agreement, with respect to the subject matter hereof. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by an authorized agent or representative of both parties hereto. No course of dealing or usage of trade shall be used to modify the terms and conditions herein.

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          17.3 Waiver. None of the provisions of this Agreement (including the Exhibits hereto) shall be considered waived by any party hereto unless such waiver is agreed to, in writing, by authorized agents of such party. The failure of a party to insist upon strict conformance to any of the terms and conditions hereof, or failure or delay to exercise any rights provided herein or by law shall not be deemed a waiver of any rights of any party hereto.

          17.4 Obligations to Third Parties. Each party warrants and represents that this Agreement does not conflict with any contractual obligations, expressed or implied, undertaken with any third party.

          17.5 Assignment. Neither party shall assign this Agreement or any part hereof or any interest herein to any non-affiliated third party (or use any subcontractor) without the written approval of the other party; provided, however, that either party may assign this Agreement without such consent to an Affiliate or in the case of a merger, consolidation, change in control or sale of all or substantially all of the assets of the party seeking such assignment or transfer and such transaction relates to the business covered by this Agreement and the resulting entity assumes all of the obligations under this Agreement. No assignment shall be valid unless the permitted assignee(s) assumes all obligations of its assignor under this Agreement. No assignment shall relieve any party of responsibility for the performance of its obligations hereunder. Any purported assignment in violation of this Section 17.5 shall be void.

          17.6 Independent Contractor. Baxter and Halozyme are acting under this Agreement as independent contractors and neither shall be considered an agent of, or joint venturer with, the other. Unless otherwise provided herein to the contrary, each party shall furnish all expertise, labor, supervision, machining and equipment necessary for the performance of its obligations hereunder and shall obtain and maintain all building and other permits and licenses required by public authorities.

          17.7 Governing Law. In any action brought regarding the validity, construction and enforcement of this Agreement, it shall be governed in all respects by the laws of the State of New Jersey, without regard to the principles of conflicts of laws, and shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods. The courts of the State of California shall have jurisdiction over the parties hereto in all matters arising hereunder and the parties hereto agree that the venue will be a state or federal court in California.

          17.8 Severability. If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.

          17.9 Headings, Interpretation. The headings used in this Agreement are for convenience only and are not part of this Agreement.

          17.10 Baxter Entities. Each of Baxter Healthcare Corporation and Baxter Healthcare S.A. (a) represents and warrants that all Affiliates within the definition of Baxter shall be bound by the terms and conditions of this Agreement as if each were an original signatory to

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this Agreement, and (b) shall be jointly and severally liable for all acts and omissions of any Baxter entity in connection with this Agreement. Any act or omission of, or notice to, any Baxter entity shall constitute the act or omission of, or notice to, each Baxter entity.

          17.11 Counterparts. The Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have each caused this Amended and Restated Development and Supply Agreement to be executed by their duly-authorized representatives as of the Restatement Date above written.

HALOZYME, INC.
By:	/s/ Jonathan Lim
	Name:	Jonathan Lim
	Title:	President and Chief Executive Officer
BAXTER HEALTHCARE CORPORATION
By:	/s/ Peter Arduini
	Name:	Peter Arduini
	Title:	President
BAXTER HEALTHCARE S.A.
By:	/s/ Robert J. Hombach
	Name:	Robert J. Hombach
	Title:	Vice President of Finance

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EXHIBIT A

API Price

The API Price shall be equal to *** percent (***%) of Halozyme’s fully-burdened manufacturing costs, storing, shipping, insurance and associated handling costs for the API; provided, however, in no event shall the API Price exceed *** dollars ($***) per 150 USP units (for the liquid injectable formulation supplied by Halozyme as of the Restatement Date).

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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EXHIBIT B

Quality Agreement

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EXHIBIT C

Standalone Product Specifications

HYLENEX COMPOSITION

INGREDIENT	UNIT FORMULA (mg/mL)
rHuPH20	150 U/mL
Sodium Chloride	8.5
Dibasic Sodium Phosphate	1.4
Albumin, Human	1.0
Edetate Disodium	0.9
Calcium Chloride	0.3
Sodium Hydroxide	Added for pH adjustment

HYLENEX SPECIFICATIONS

ATTRIBUTE	SPECIFICATION
***	***
***	***
***	***
***	***
	***
***	***
***	***
***	***
***	***
***	***

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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RECOMBINANT HUMAN HYALURONIDASE (rHuPH20) SPECIFICATIONS

TEST	ACCEPTANCE CRITERIA
***	***
***	***
***	***
***	***
***	***
	***
	***
***	***
	***
	***
	***
***	***
	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***

*** Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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EXHIBIT D

Baxter Requirements for Standalone Product Packaging Development

1.	Halozyme will provide current approved labeling content that should be used for Baxter artwork.
2.	Baxter will determine cap colors.
3.	Halozyme will provide the official manufacturer address.

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