Document:

First Senior Convertible Promissory Note issued to Ipsen, S.A.

 Exhibit 4.5 
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND ACCORDINGLY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. 
 October 13, 2006 
 FIRST SENIOR
CONVERTIBLE PROMISSORY NOTE 
 FOR THE VALUE RECEIVED, TERCICA, INC., a Delaware corporation (the Company), promises to pay Ipsen, S.A. a
French société anonyme, or its registered assigns (the Holder) the principal sum of Twenty Five Million Thirty Seven Thousand Dollars ($25,037,000) on the Maturity Date (as specified herein), together with interest
computed on the basis of a 360-day year of twelve 30-day months (a) on the unpaid principal balance hereof at a rate equal to 2.5% per annum from the date hereof, which interest shall be compounded quarterly on
March 31, June 30, September 30 and December 31 of each year, commencing January 1, 2007, and (b) to the extent permitted by law on any overdue payment of principal or interest at a rate per annum equal to
Default Rate, which default interest shall be payable on demand. Payment shall be made in lawful tender of the United States to the Holder by the method and at the address specified for such purpose by the Holder from time to time. 
 1. DEFINITIONS 
 For
purposes hereof, the following definitions shall apply: 
  

	(a)	Additional Shares of Common Stock has the meaning attributed to it in Section 3(f) of this Note. 

  

	(b)	Adjustment Events means (1) any reclassification or change of Common Stock (other than a change in par value, as a result of a Subdivision or Combination),
(2) any consolidation, merger or mandatory share exchange of the Company with or into another corporation (other than a merger or mandatory share exchange with another corporation in which the Company is a continuing corporation and which does
not result in any reclassification or change other than a change in par value or as a result of a Subdivision or Combination). 

  

	(c)	Affiliate means, in respect of any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person or any of its
subsidiaries, and the term “control” (including the terms “controlled by” and “under common control with”) means having, directly or indirectly, the power to direct or cause the direction of the management and policies
of a Person, whether through ownership of voting securities or by contract or otherwise. 

	(d)	Affiliation Agreement means that certain Affiliation Agreement dated as of the date hereof by and among the Company, Ipsen S.A., a French société anonyme
and Suraypharm, a French société par actions simplifiée. 

  

	(e)	Aggregate Consideration has the meaning attributed to it in Section 3(d) of this Note. 

  

	(f)	The terms beneficial owner, beneficial ownership and beneficially own have the meanings attributed to them in the Affiliation Agreement.

  

	(g)	Board means the Board of Directors of the Company. 

  

	(h)	Business Day means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by applicable law to
close. 

  

	(i)	Capital Lease means any lease that is required to be capitalized on the balance sheet of the lessee in accordance with generally accepted accounting principles.

  

	(j)	Combination has the meaning attributed to in Section 4(c) of this Note. 

  

	(k)	Common Stock means the Company’s common stock with a par value of $0.001 per share. 

  

	(l)	Conversion Amount means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus
(2) accrued and unpaid interest on such principal amount at the interest rates provided in this Note to the Conversion Date plus (3) Default Interest, if any, on the interest referred to in the immediately preceding clause (2).

  

	(m)	Conversion Date has the meaning attributed to it in Section 2(a) of this Note. 

  

	(n)	Conversion Price means $7.41, as adjusted pursuant to Sections 3 and 4 of this Note. 

  

	(o)	Convertible Notes has the meaning attributed to it in the Purchase Agreement. 

  

	(p)	Convertible Securities has the meaning attributed to it in Section 3(e) of this Note. 

  

	(q)	Covenant Defeasance has the meaning attributed to it in Section 8.1(c) of this Note. 

  

	(r)	Default has the meaning attributed to it in Section 11 of this Note. 

  

	(s)	Default Interest means the interest payable at the Default Rate in respect of this Note as provided herein. 

  

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	(t)	Default Rate means the rate of interest that is the greater of (i) 5.52% and (ii) 3% over the applicable Libor Rate. 

  

	(u)	Disposition means the sale, lease or other disposition of any property by any Person. 

  

	(v)	EBITDA means, for any period, the sum, for the Company and its subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP), of the
following: (i) net income for such period plus (ii) Interest Expense for such period, together with any original issue discount to the extent deducted in calculating net income plus (iii) income taxes for such period
plus (iv) depreciation and amortization (to the extent deducted in computing net income) for such period. 

  

	(w)	Effective Price has the meaning attributed to it in Section 3(g) of this Note. 

  

	(x)	Guaranty, with respect to any Person, means all obligations of such Person guaranteeing or in effect guaranteeing any Indebtedness (“primary obligations”) of
any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including obligations incurred through an agreement, contingent or otherwise, by such Person (a) to purchase such primary obligation or any
property or assets constituting security therefor, (b) to advance or supply funds (i) for the purchase or payment of such primary obligation or (ii) to maintain working capital or equity capital, or otherwise to advance or make
available funds for the purchase or payment of such primary obligation, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure the owner of such primary obligation against loss in respect thereof; provided that the term “Guaranty” shall not include any endorsement of a matured instrument for
collection or deposit in the ordinary course of business. The amount of any Guaranty shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. The verb “Guarantee” shall have a correlative meaning.

  

	(y)	Increlex License has the meaning attributed to it in the Purchase Agreement. 

  

	(z)	Indebtedness, with respect to any Person, means all items (other than capital stock, capital surplus, retained earnings, obligations payable in capital stock of such
Person and deferred credits) which in accordance with generally accepted accounting principles would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person as at the date of which Indebtedness
is to be determined. The term “Indebtedness” shall also include, whether or not so reflected, (i) indebtedness, obligations and liabilities secured by 

  

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 any Lien on property of such Person whether or not the indebtedness secured thereby shall have been
assumed by such Person, (ii) the amount that would appear on the liabilities side of a balance sheet of such Person as at the date of determination in respect of rentals under Capital Leases, (iii) obligations of such Person to pay the
deferred purchase price or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising in the ordinary course of business, (iv) payment obligations with respect to interest rate swaps,
currency swaps and similar obligations, and (v) all Guaranties of any of the above. Notwithstanding the foregoing, in determining the indebtedness of any Person, there shall be included all indebtedness of such Person deemed to be extinguished
under generally accepted accounting principles but for which such Person remains legally liable. The amount of any limited recourse Indebtedness shall be equal to the principal amount of such limited recourse debt for which such Person provides
credit support of any kind is liable as a guarantor or otherwise. 
  

	(aa)	Indemnitees has the meaning attributed to it in Section 12 of this Note. 

  

	(bb)	Interest Expense means, for any period, the sum, for the Company and its subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP),
of the following: (i) all cash interest in respect of Indebtedness (including, without limitation, the interest component of any payments in respect of Capital Lease Obligations) accrued during such period (whether or not actually paid during
such period) plus (ii) the net amount payable (or minus the net amount receivable) under the Interest Rate Protection Agreements during such period (whether or not actually paid or received during such period).

  

	(cc)	Investor has the meaning attributed to it in the Affiliation Agreement. 

  

	(dd)	Investor Directors has the meaning attributed to it in the Affiliation Agreement. 

  

	(ee)	Libor Rate shall mean, for any date, the rate appearing on Page 3750 of the Dow Jones Markets Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Holder from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, on such date with a three-month maturity. In the event that such rate is not available at such time for any reason, then the Libor Rate
shall be the arithmetic average of the rates (rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of $5,000,000 and for a maturity of three months are offered by the principal London office of Barclays Bank plc in
immediately available funds in the London interbank market at approximately 11:00 a.m., London time, on such date. 

  

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	(ff)	Lien means any lien, pledge, mortgage, deed of trust, security interest, attachment, easement or other similar encumbrance of any kind. 

  

	(gg)	Losses has the meaning attributed to in Section 12 of this Note. 

  

	(hh)	Material Adverse Effect means a material adverse change in, or a material adverse effect upon (i) the operations, business, assets, properties, liabilities or
financial condition of the Company and its subsidiaries taken as a whole or (ii) the ability of the Company to make any payments due in respect of this Note. 

  

	(ii)	Maturity Date has the meaning attributed to it in Section 2(a) of this Note. 

  

	(jj)	Net Indebtedness means as of any date (i) Indebtedness as of such date minus (ii) cash and cash equivalents held by the Company as of such date.

  

	(kk)	New Note has the meaning attributed to in Section 4(a) of this Note. 

  

	(ll)	Note Adjustment Factor means a fraction, the numerator of which is the total number of shares outstanding immediately after the relevant Subdivision, Combination or
Stock Dividend, and the denominator of which is the total number of shares existing immediately prior to such event. 

  

	(mm)	Note Conversion Shares has the meaning attributed to it in Section 2(a) of this Note. 

  

	(nn)	Note Ledger has the meaning attributed to it in Section 2(c) of this Note. 

  

	(oo)	Notice of Conversion means a notice to the Company of the Holder’s intention to convert all or a portion of this Note in accordance, such notice to be consistent
with the form of notice attached as Annex A to this Note. 

  

	(pp)	Opinion of Counsel has the meaning attributed to it in Section 8.1(d)(iv) of this Note. 

  

	(qq)	Ownership Trigger has the meaning attributed to it in Section 2(a) of this Note. 

  

	(rr)	Permitted Indebtedness means (i) Indebtedness of the Company hereafter incurred in the ordinary course of business, (ii) Indebtedness listed on Schedule
1(rr) hereto, (iii) Indebtedness of the Company in respect of obligations under Capital Leases and other purchase money indebtedness, in each case incurred to finance expenditures that, in accordance with generally accepted accounting
principles, are included in “capital expenditures,” “additions to property, plant or equipment” or comparable items in the financial statements of the Company incurred in the ordinary course of business, not to exceed One Million
Dollars ($1,000,000) at any time outstanding, (iv) trade payables arising in the ordinary course of business, (v) Guarantees of Indebtedness permitted hereunder, (vi) loans by the Company or wholly-owned subsidiaries of the Company
made in the 

  

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 ordinary course of business to the Company’s subsidiaries not to exceed, in the aggregate and at any
time, One Million Dollars ($1,000,000) of principal amount outstanding, (vii) loans by the Company’s subsidiaries to the Company, (viii) payment obligations with respect to interest rate swaps, currency swaps and similar obligations
entered into in the ordinary course of business and not for speculative or trading purposes, (ix) Indebtedness in respect of performance, bid, surety, indemnity, appeal bonds, completion guarantees and other obligations of like nature and
Guarantees and or obligations as an account party in respect of the face amount of trade letters of credit in respect thereof (including worker’s compensation claims, environmental remediation and other environmental matters and obligations in
connection with self-insurance or similar requirements), in each such case to the extent provided in the ordinary course of business, (x) subordinated indebtedness, (xi) Indebtedness of a Person existing at the time such Person becomes a
subsidiary of the Company and not in contemplation thereof, provided such Indebtedness is repaid (and the commitments thereunder terminated) not later than 180 days following the date on which such Person becomes a subsidiary, and
(x) Indebtedness of the Company as an account party or applicant in respect of letters of credit issued to landlords in an aggregate and at any time, One Million Dollars ($1,000,000) of principal amount outstanding. 
  

	(ss)	Permitted Investments means (i) investments made in accordance with the Company’s investment policy, attached hereto as Schedule 1(ss)(1),
(ii) investments of subsidiaries or the Company in or to other subsidiaries that are not wholly owned not to exceed $250,000 in the aggregate in any calendar year, (iii) investments (including debt obligations) received in connection with
the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business, (iv) investments received as consideration in
connection with a permitted disposition of any assets or received in satisfaction of judgments not to exceed $2,000,000, and (v) loans, advances or ownership existing on the date of this Note and set forth in Schedule 1(ss)(2) hereto.

  

	(tt)	Permitted Liens means (i) any Lien for taxes, assessments or governmental charges or levies not yet due or payable or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles applied on a consistent basis, (ii) any statutory Lien and Liens of carriers, warehousemen, mechanics, materialmen,
repairmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title, in each case, arising in the ordinary course of business by operation of law with respect to a liability that is not past due or
which is being contested in good faith by appropriate proceedings and for which reserves have been established in accordance with GAAP, (iii) Liens securing equipment subject to Capital Leases that qualify as Permitted Indebtedness above, which
Liens are in favor of the party from whom the Company is leasing the equipment, (iv) Liens existing on the date hereof and set 

  

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 forth in Schedule 1(tt) hereto, (v) pledges or deposits in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other social security legislation, (vi) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which do not in any case materially
detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person, (vii) Liens securing judgments for the payment of money (or appeal or other surety bonds relating
to such judgments) not constituting an Event of Default, (viii) leases or subleases granted to others not interfering in any material respect with the Company’s business, (ix) any interest of title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted hereunder, (x) normal and customary rights of setoff upon deposits of cash in favor of banks or other
depository institutions, (xi) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (xii) Liens of sellers of goods arising under Article 2 of the Uniform
Commercial Code or similar provisions of applicable law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses, (xiii) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods, or (xiv) Liens solely on deposits, advances, contractual payments, including implementation allowances or escrows
made or paid by any loan party or any subsidiary to or with customers, clients or landlords in the ordinary course of business, provided that, such deposits, advances, contractual payments, implementation allowances or escrows do not, in the
aggregate and at any one time, exceed One Million Dollars ($1,000,000). 
  

	(uu)	Permitted Transfer means the (i) Disposition of obsolete or worn out property or property no longer used or useful in the conduct of business, whether now owned
or hereafter acquired, in the ordinary course of business, (ii) Disposition of inventory in the ordinary course of business, (iii) Disposition of equipment or real property in the ordinary course of business to the extent that
(x) such property is exchanged for credit against the purchase price of similar replacement property or is otherwise reinvested in the business of the Company or its subsidiaries or (y) the proceeds of such disposition are applied within
180 days to the purchase price of similar replacement property or is otherwise reinvested in the business of the Company and its subsidiaries, (iv) Disposition of assets by any subsidiary of the Company to the Company, (v) the granting of
a non-exclusive license or sublicense by the Company and its subsidiaries of software, trademarks, patents and other intellectual property in the ordinary course of business, and which do not materially interfere with the business of the Company and
its subsidiaries taken as a whole or otherwise conflict with any contract or license to which the Company or any of its subsidiaries are bound, and only to the extent that such grant does not require the Holder’s consent pursuant to
Section 8.1(a), (vi) Dispositions of cash equivalents and (vi) liquidation, winding up or dissolution of a subsidiary of the Company that has no operations or revenues. 

  

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	(vv)	Person means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any
department or agency thereof. 

  

	(ww)	Purchase Agreement means that certain Stock Purchase and Master Transaction Agreement dated as of July 18, 2006 by and between the Company and Ipsen, S.A., a
French société anonyme. 

  

	(xx)	Reference Price means $4.75. 

  

	(yy)	Registration Rights Agreement has the meaning attributed to it in the Purchase Agreement. 

  

	(zz)	Rights has the meaning attributed to it in the Rights Agreement. 

  

	(aaa)	Rights Agreement has the meaning attributed to it in the Affiliation Agreement. 

  

	(bbb)	Somatuline Autogel License has the meaning attributed to it in the Purchase Agreement. 

  

	(ccc)	Stock Dividend means a payment by the Company of a dividend or other distribution in Common Stock to all holders of Common Stock. 

  

	(ddd)	Subdivision has the meaning attributed to in Section 4(b) of this Note. 

  

	(eee)	Tax means any tax (whether income, documentary, sales, stamp, registration, issue, capital, property, excise or otherwise), duty, assessment, levy, impost, fee,
compulsory loan, charge or withholding. 

  

	(fff)	Transaction Documents has the meaning attributed to it in the Purchase Agreement. 

  

	(ggg)	Trigger Price has the meaning attributed to it in Section 3(a) of this Note. 

  

	(hhh)	Triggering Sale has the meaning attributed to it in the Affiliation Agreement. 

  

	(iii)	Trustee has the meaning attributed to it in Section 8.1(d)(i) of this Note. 

  

	(jjj)	Trustee Account has the meaning attributed to it in Section 8.1(d)(i) of this Note. 

  

	(kkk)	Warrant has the meaning attributed to it in the Purchase Agreement. 

  

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 2. PAYMENT; CONVERSION OF NOTE 
  

	(a)	The entire principal balance of this Note, together with interest accrued thereon, shall be immediately due and payable, in cash, on the date which is the later of (i) the date
that is the fifth anniversary of the date hereof and (ii) two years following the date on which the Holder provides notice to the Company that it will not convert this Note in full (the Maturity Date); provided however,
that such amount will become due and payable, at the option of the Holder, by notice to the Company upon the occurrence of and at any time after an Ownership Trigger. For purposes of this Note, an Ownership Trigger shall occur if,
after the date hereof, (x) the provisions of Section 3 of the Affiliation Agreement remain in effect and (1) any Person or “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) (other than the Holder or its Affiliates) that is not already the beneficial owner of more than 9.9% of the then outstanding Common Stock acquires beneficial ownership of greater than 9.9% of the then outstanding Common Stock, or
(2) any Person or “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than the Holder or its Affiliates) currently beneficially owning greater than 9.9% of the outstanding
Common Stock increases the percentage of the outstanding Common Stock currently beneficially owned by such Person or group; or (y) the provisions of Section 3 of the Affiliation Agreement shall cease to be effective and any Person or
“group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than the Holder or its Affiliates) acquires beneficial ownership of greater than 50% of the then outstanding Common Stock. All
payments made in respect of the Notes shall be made on a pari passu basis. The Company shall not be permitted to prepay any interest or principal due under the Note without the prior written consent of the Holder. The Holder shall have the right, at
its option, at any time from and after the date of this Note, to convert the principal amount of this Note and all accrued interest thereon, or any portion of such principal amount and interest, into that number of fully paid and nonassessable
shares of Common Stock (as such shares shall then be constituted) determined pursuant to this Section 2. The number of shares of Common Stock to be issued upon each conversion of this Note (the Note Conversion Shares) shall be
determined by dividing the Conversion Amount by the Conversion Price in effect on the date (the Conversion Date) a Notice of Conversion is delivered to the Company by the Holder by facsimile or other reasonable means of communication
dispatched prior to 5:00 p.m., New York Time. 

  

	(b)	The Company (i) shall promptly irrevocably instruct its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note and (ii) agrees
that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the
terms and conditions of this Note. 

  

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	(c)	Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender
this Note to the Company unless the entire unpaid principal amount of this Note is so converted. Rather, records showing the principal amount converted (or otherwise repaid) and the date of such conversion or repayment shall be maintained on a
ledger in a form to be reasonably acceptable to the Company and the Holder (the Note Ledger) (a copy of which shall be delivered to the Company or transfer agent with each Notice of Conversion). It is specifically contemplated that the
Company hereof shall act as the calculation agent for conversions and repayments. In the event of any dispute or discrepancies, such records maintained by the Company shall be controlling and determinative in the absence of manifest error. The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following a conversion of a portion of this Note, the principal amount represented by this Note will be the amount
indicated on the Note Ledger (which may be less than the amount stated on the face hereof). 

  

	(d)	The Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock or other securities
or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Company shall not be required to issue or deliver any such shares or other securities or property unless and until the Person or Persons
(other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Company the amount of any such tax or shall have established to the
satisfaction of the Company that such tax has been paid. 

  

	(e)	Upon receipt by the Company of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding
principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Company defaults on its obligations under this Section 2, all rights with respect to the portion of this
Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided
herein, the Company’s obligation to issue and deliver the certificates for shares of Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with
respect to any provision thereof, the recovery of any judgment against any Person or any action by the Holder to enforce the same, any failure or delay in the enforcement of any other obligation of the Company to the Holder of record, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Company, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection 

  

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 with such conversion. The date of receipt (including receipt via telecopy) of such Notice of Conversion
shall be the Conversion Date so long as it is received before 5:00 p.m., New York Time, on such date. 
 3. PRICE-BASED
ANTI-DILUTION ADJUSTMENT OF CONVERSION PRICE 
  

	(a)	If at any time or from time to time after the date hereof, the Company issues or sells, or is deemed by the express provisions of this Section 3 to have issued or sold,
Additional Shares of Common Stock, other than as provided in Sections 4(a)-4(d) below, for an Effective Price less than the lower of (i) the Reference Price or (ii) the then effective Conversion Price (such lower amount, the Trigger
Price), then and in each such case, the then effective Conversion Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price determined in accordance with the following formula:

  

					
	A = B x	 	[C + (D/E)]	 	
		 	    [C + F]	 	

 For the purposes of this clause (a) and clause (g), the following definitions shall apply:

 A = the Conversion Price in effect immediately after such issue or sale of Additional Shares of Common Stock. 
 B = the Conversion Price in effect immediately prior to such issue or sale of Additional Shares of Common Stock. 
 C = the number of shares of Common Stock Outstanding (as defined in clause (b) below) immediately prior to such issue or sale of
Additional Shares of Common Stock. 
 D = the Aggregate Consideration received in exchange for such Additional Shares of Common
Stock. 
 E = the Trigger Price. 
 F = the number of such Additional Shares of Common Stock so issued or sold. 
  

	(b)	For the purposes of Section 3(a), the number of shares of Common Stock deemed to be outstanding (Common Stock Outstanding) as of a given date shall be the sum of
(A) the number of shares of Common Stock outstanding, plus (B) the number of shares of Common Stock into which the then outstanding Convertible Notes could be converted if fully converted on the day immediately preceding the given date,
plus (C) the number of shares of Common Stock which are issuable upon the exercise of the Warrant on the day immediately preceding the given date. 

  

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	(c)	No adjustment shall be made to the Conversion Price under this Section 3 in an amount less than one cent per share. Any adjustment required by this Section 3 shall be
rounded to the nearest one cent ($0.01) per share. Any adjustment otherwise required by this Section 3 that is not required to be made due to the preceding two sentences shall be included in any subsequent adjustment to the Conversion Price.

  

	(d)	For the purpose of making any adjustment required under this Section 3, the aggregate consideration received by the Company for any issue or sale of securities (the
Aggregate Consideration) shall be defined as: (A) to the extent it consists of cash, be computed at the gross amount of cash received by the Company before deduction of any underwriting or similar commissions, compensation or
concessions paid or allowed by the Company in connection with such issue or sale and without deduction of any expenses payable by the Company, (B) to the extent it consists of property other than cash, be computed at the fair value of that
property as determined in good faith by the Board, and (C) if Additional Shares of Common Stock, Convertible Securities or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold
together with other stock or securities or other assets of the Company for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board (in a manner
consistent with comparable activities such as valuing stock options for accounting purposes) to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options. 

  

	(e)	For the purpose of the adjustment required under this Section 3, if the Company issues or sells (x) capital stock, options, warrants, purchase rights or other securities
convertible into, Additional Shares of Common Stock, other than the Rights (such convertible stock or securities being herein referred to as Convertible Securities), or (y) rights (other than the Rights) or options for the
purchase of Additional Shares of Common Stock or Convertible Securities and if the Effective Price of such Additional Shares of Common Stock is less than the Conversion Price, in each case the Company shall be deemed to have issued at the time of
the issuance of such rights or options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount
equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights or options or Convertible Securities plus: 

  

	 	(i)	in the case of such rights or options, the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights or options; and

  

	 	(ii)	in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company upon the conversion thereof (other than by cancellation of liabilities or
obligations evidenced by such 

  

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 Convertible Securities); provided that if the minimum amounts of such consideration cannot be
ascertained, but are a function of antidilution or similar protective clauses, the Company shall be deemed to have received the minimum amounts of consideration without reference to such clauses. 
  

	 	(iii)	If the minimum amount of consideration payable to the Company upon the exercise or conversion of rights, options or Convertible Securities is reduced over time or on the occurrence
or non-occurrence of specified events other than by reason of antidilution or similar protective adjustments, the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; provided
however, that if the minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities is subsequently increased, the Effective Price shall be again recalculated using the
increased minimum amount of consideration payable to the Company upon the exercise or conversion of such rights, options or Convertible Securities. 

  

	 	(iv)	No further adjustment of the Conversion Price, as adjusted upon the issuance of such rights, options or Convertible Securities, shall be made as a result of the actual issuance of
Additional Shares of Common Stock or the exercise of any such rights or options or the conversion of any such Convertible Securities. If any such rights or options or the conversion privilege represented by any such Convertible Securities shall
expire without having been exercised, the Conversion Price as adjusted upon the issuance of such rights, options or Convertible Securities shall be subsequently adjusted to the Conversion Price which would have been in effect had an adjustment been
made on the basis that the only Additional Shares of Common Stock so issued were the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such rights or options or rights of conversion of such Convertible Securities,
and such Additional Shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights
or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities
or obligations evidenced by such Convertible Securities) on the conversion of such Convertible Securities. 

  

	(f)	For the purpose of making any adjustment to the Conversion Price under this Section 3, Additional Shares of Common Stock shall mean all shares of Common Stock
issued by the Company or deemed to be issued pursuant to this Section 3, other than: 

  

	 	(i)	shares of Common Stock issued upon conversion of the Convertible Notes; 

  

 Page 13 of 40 

	 	(ii)	shares of Common Stock or Convertible Securities issued after the date hereof to employees, officers or directors of, or consultants to, the Company or any subsidiary pursuant to
stock purchase or stock option plans or other arrangements that are approved by the Board (provided that such consultants receive no more than 75,000 shares of Common Stock in aggregate per calendar year and the issuance of such shares to
such consultants shall be for services and in amounts that are consistent with past issuances); 

  

	 	(iii)	shares of Common Stock issued pursuant to the exercise of Convertible Securities outstanding as of the date hereof, including the Warrant; or 

  

	 	(iv)	shares of Common Stock or Convertible Securities issued in connection with any stock split, stock dividend or recapitalization by the Company. 

 References to Common Stock in the subsections of this clause (f) shall mean all shares of Common Stock issued by the Company or deemed to be issued
pursuant to this Section 3. 
  

	(g)	The Effective Price shall mean the price at which Additional Shares of Common Stock are issued or sold and shall be determined in accordance with the following
formula: 

 Effective Price = (D)/(F) 
 where D and F have the meaning given to them in Section 3(a) above. 
  

	(h)	In the event that the number of shares of Additional Shares of Common Stock or the Effective Price cannot be ascertained at the time of issuance, such Additional Shares of Common
Stock shall be deemed issued immediately upon the occurrence of the first event that makes such number of shares or the Effective Price, as applicable, ascertainable. 

 4. FURTHER ADJUSTMENTS TO CONVERSION PRICE 
 The Conversion Price and the Note Conversion Shares shall be subject to further adjustment from time to time upon the happening of certain events as follows: 
  

	(a)	Reclassification, Consolidation, Merger, Mandatory Share Exchange, Sale or Transfer. Upon the occurrence of any Adjustment Events while any outstanding principal amount of
this Note or any accrued interest thereon remains capable of being converted pursuant to Section 2 above, the Holder may in its sole discretion require the Company, or any successor or purchasing corporation, as the case may be, without payment
of any additional consideration therefor, to execute and 

  

 Page 14 of 40 

 deliver to the Holder a new note which shall be upon terms no less favorable to the Holder than those
then applicable to this Note (a New Note) and upon conversion of the principal amount of the New Note and all accrued interest thereon or conversion of any portion of such principal amount and interest, the Holder shall receive in lieu
of each share of Common Stock theretofore issuable upon such conversion of this Note, the kind and amount of shares of stock, other securities, money or property receivable upon such Adjustment Event by the holder of one share of Common Stock
issuable upon such conversion of this Note had this Note been converted in such manner immediately prior to such Adjustment Event. Such new Note shall provide for adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in Sections 3 and 4 hereto. Prior to such request for a New Note, this Note shall be convertible for such number of shares for which the New Note would be convertible. 
  

	(b)	Subdivision of Shares. If, while any outstanding principal amount of this Note or any accrued interest thereon remains capable of being converted pursuant to Section 2
above, the Company shall subdivide its Common Stock (a Subdivision), then as of the effective date of such Subdivision, or, if the Company shall take a record of holders of its Common Stock for the purpose of so subdividing, as of such
record date, whichever is earlier, the Conversion Price in effect on such date shall be adjusted by dividing such Conversion Price by the Note Adjustment Factor applicable to such Subdivision. 

  

	(c)	Combination of Shares. If, while any outstanding principal amount of this Note or any accrued interest thereon remains capable of being converted pursuant to Section 2
above, the Company shall combine its Common Stock (a Combination), then as of the effective date of such Combination, or, if the Company shall take a record of holders of its Common Stock for the purpose of so combining, as of such
record date, whichever is earlier, the Conversion Price in effect on such date shall be adjusted by dividing such Conversion Price by the Note Adjustment Factor applicable to such Combination. 

  

	(d)	Stock Dividends. If, while any outstanding principal amount of this Note or any accrued interest thereon remains capable of being converted pursuant to Section 2 above,
the Company shall pay a Stock Dividend, then as of the date the Company shall take a record of the holders of its Common Stock for the purpose of receiving such dividend or other distribution (or if no such record is taken, as at the date of such
payment or other distribution), the Conversion Price in effect on such date shall be adjusted by dividing such Conversion Price by the Note Adjustment Factor applicable to such Stock Dividend; provided that the provisions of this
clause (d) shall not apply under any of the circumstances for which an adjustment is provided in clauses (a), (b) or (c). 

  

 Page 15 of 40 

 5. NOTICE OF ADJUSTMENTS 
 Whenever the Conversion Price shall be adjusted pursuant to Sections 3 or 4 hereof, the Company shall promptly prepare a certificate signed by its Chief Executive Officer
or Chief Financial Officer setting forth in reasonable detail the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Company’s
Board of Directors made any determination hereunder), and the Conversion Price after giving effect to such adjustment, and shall promptly cause copies of such certificate to be sent by overnight courier to the Holder. 
 6. ISSUANCE OF STOCK ON CONVERSION 
 Upon conversion of this Note as set forth in Section 2 above, the Company at its expense will cause to be issued, in the name of and delivered to the Holder, a
certificate or certificates for, or, to the extent the Note Conversion Shares are not restricted securities, make deposit with the Depository Trust Company via book-entry, the number of shares of Common Stock to which the Holder shall be entitled on
such conversion together with any other securities and property, if any, to which the Holder is entitled on such conversion under the terms of this Note. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the
issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall calculate and pay a cash adjustment in respect of such fraction. 
 7. REPRESENTATIONS AND WARRANTIES 
 Except as set forth on the Disclosure Schedule attached
hereto, the Company represents and warrants that the following are true as of the date hereof: (a) as of the date hereof, all outstanding Indebtedness of the Company is listed on Schedule 1(rr) attached hereto; (b) no outstanding
Indebtedness of the Company will be senior to the Indebtedness evidenced by this Note other than Indebtedness that is collaterally secured (and then only to the extent of such collateral security); (c) except as set forth on Schedule 7(c)
hereto, there are no financing statements on file naming the Company as debtor; (d) upon conversion of this Note, the Note Conversion Shares will be duly authorized, validly issued, fully paid and nonassessable assuming that such amendment does
not otherwise provide for assessment, and upon issuance, will be free of any taxes, liens and encumbrances related to the issuance thereof and will not be subject to the preemptive rights or other similar rights of stockholders of the Company; and
(e) the Company’s payment obligations under this Note rank at least pari passu, without preference or priority, with all other unsecured Indebtedness of the Company 
  

 Page 16 of 40 

 8. COVENANTS 
 8.1 Negative Covenants 
  

	(a)	Unless the Holder shall otherwise consent in writing, the Company hereby covenants and agrees with the Holder that it will not (and will cause its subsidiaries not to) until the
earlier of: (i) payment in full by the Company to the Holder of the principal and any outstanding interest payable in respect of this Note, or (ii) the date of completion of a Triggering Sale and the occurrence of the Covenant Defeasance
in compliance with the provisions of Sections 8.1(c) and 8.1(d): 

  

	 	(i)	make, or permit any subsidiary to make, any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it
is wholly owned by the Company other than Permitted Investments; 

  

	 	(ii)	adopt any plan or arrangement for the dissolution or liquidation of the Company; 

  

	 	(iii)	enter into any material transaction or contract unless the transaction or contract would reflect the execution of a board-approved budget and would not be reasonably anticipated to
increase future budgets (i) beyond current projections, or (ii) where no current projections have been formally prepared, beyond reasonably anticipated growth based on the Company’s recent operating performance;

  

	 	(iv)	directly or indirectly acquire, sell, lease or otherwise dispose of any property or assets other than in its ordinary course of business; provided that, the Company shall not
in any event acquire, sell, lease, or dispose of any property or assets with an aggregate value exceeding Five Million Dollars ($5,000,000) without the Investor’s written consent unless it is a Permitted Transfer; 

  

	 	(v)	merge into or consolidate with any other Person other than with the Company; 

  

	 	(vi)	establish or approve an operating budget with anticipated research and development spending per calendar year in excess of the sum of (i) Twenty Five Million Dollars
($25,000,000) (with such research and development spending being determined on a GAAP basis) plus (ii) the amounts approved by the Joint Steering Committee established under the Somatuline Autogel License for spending related to the products of
Ipsen, S.A. or its Affiliates; 

  

 Page 17 of 40 

	 	(vii)	enter into any transaction or agreement that would be reasonably likely to require an increase to research and development spending that would cause such spending to exceed the
aggregate amount specified in Section 8.1(a)(vi) hereof; 

  

	 	(viii)	incur capital expenditures (on a GAAP basis) of more than Two Million Dollars ($2,000,000) in any given calendar year; 

  

	 	(ix)	make any investment, through the direct or indirect holding of securities or otherwise, other than Permitted Investments; 

  

	 	(x)	incur any Indebtedness (including extensions, renewals or refinancings and drawdowns under existing facilities), other than (i) Indebtedness evidenced by the Convertible Notes,
and (ii) Permitted Indebtedness; provided that, with respect to (ii), if following the incurrence of such Permitted Indebtedness, the total Indebtedness exceeds Two Million Five Hundred Thousand Dollars ($2,500,000) (excluding trade
payables in the ordinary course of business that are not more than 90 days past due), then such Permitted Indebtedness shall not be permitted unless immediately prior and after giving effect to the incurrence of such Permitted Indebtedness, the
Company’s ratio of Net Indebtedness to EBITDA shall not exceed 1 to 1; 

  

	 	(xi)	change the principal business of the Company, enter new lines of business (if such business or businesses are material to the Company or its subsidiaries), or exit the current line
of business of the Company; provided that the Company shall be permitted to make reasonable extensions, developments or expansions to the business of the Company; 

  

	 	(xii)	declare or pay any cash dividend on or redeem or repurchase any of its capital stock, directly or indirectly, until the Note has been converted or paid in its entirety as provided
herein, other than acquisitions of Common Stock by the Company pursuant to agreements which permit the Company to repurchase such shares upon termination of services to the Company; 

  

	 	(xiii)	create, incur, assume or permit to exist, any Liens on any of its properties or assets whether now owned or hereafter acquired, other than Permitted Liens; 

 

	 	(xiv)	prepay or pay any Indebtedness except for trade payables incurred in the ordinary course of the Company’s business and Permitted Indebtedness; or 

  

	 	(xv)	permit any of its subsidiaries to enter into any agreement or contractual or other restriction (other than customary limitations imposed by corporate law or similar statutes)
restricting the ability of such subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its subsidiaries that owns outstanding shares of capital stock or similar equity interests of such
subsidiary. 

  

 Page 18 of 40 

	(b)	Notwithstanding the foregoing, in the event that any action set forth in this Section 8.1 is approved by the Board, including the affirmative vote of the Investor Directors,
the Company shall as soon as reasonably practicable following such approval, provide the Holder with written notice of such approval and unless the Holder, within ten (10) Business Days after receipt of such notice, notifies the Company in
writing that it does not consent to such action, the Holder’s written consent to such action shall be deemed to have been given. 

  

	(c)	Notwithstanding the foregoing, in the event that a Triggering Sale occurs, the Company may, subject to the terms and conditions set forth herein, elect to provide for the defeasance
of its obligations with respect to certain covenants contained in this Note by delivering written notice to the Holder, which notice (i) shall be given not later than 30 days prior to the intended date for the deposit of funds contemplated by
Section 8.1(d) and (ii) shall state that the Company wishes to provide for the defeasance of certain of its obligations in accordance with Sections 8.1(c), 8.1(d), 8.1(e) and 8.1(f) and that such defeasance shall be subject to the
terms and conditions set forth in Sections 8.1(d), 8.1(e) and 8.1(f). Upon satisfaction of the conditions set forth in Section 8.1(d), the Company shall be released from its obligations under Section 8.1(a) (other than its obligations
under Sections 8.1(a)(ii), 8.1(a)(v) and 8.1(a)(xi) (in so far as such Section 8.1(a)(xi) relates to changing the principal place of business of the Company) with respect to this Note (the Covenant Defeasance) and this Note shall
thereafter be deemed not to be outstanding for the purposes of any direction, waiver, consent or declaration or act of the Holder (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed outstanding
for all other purposes hereunder. For this purpose, such Covenant Defeasance means that, with respect to this Note, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall
not constitute a Default under Section 11, but, except as specified above, the remainder of this Note shall be unaffected thereby. Notwithstanding the foregoing, the Company shall be released from its obligations under Section 8.1(a)(v)
only if it meets the merger conditions set forth in Section 8.1(g) (the Merger Conditions). 

  

	(d)	The following shall be the conditions to the application of Section 8.1(c): 

  

	 	(i)	the Company must irrevocably deposit or cause to be deposited to an account (the Trust Account) to be held with a financial institution reasonably acceptable to the
Holder and the Company that shall act as trustee for the Holder (the Trustee), as trust funds in trust, specifically 

  

 Page 19 of 40 

 pledged as security for, and dedicated solely to, the benefit of the Holder, cash, United States
government securities, or a combination thereof, in such amounts sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay and discharge the principal of, premium, if any, and interest then due or known to
be due on this Note on the Maturity Date of such principal (and premium, if any) or installment of interest; 
  

	 	(ii)	the Company has delivered evidence reasonably acceptable to the Holder that no Default has occurred and is continuing on the date of such deposit and, insofar as an event of
bankruptcy under Section 11(h) is concerned, at any time after the date of such deposit until the 91st day
after the date of such deposit; 

  

	 	(iii)	such Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, this Note or any other material agreement or instrument to which the Company is
a party or by which it is bound; 

  

	 	(iv)	the Company shall have delivered to the Holder a written legal opinion (which may be subject to customary exceptions), from legal counsel that is reasonably acceptable to the Holder
(an Opinion of Counsel), to the effect that the Holder will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at that same times as would have been the case if such Covenant Defeasance had not occurred; 

  

	 	(v)	the Company must have delivered to the Holder a certificate signed by an authorized officer of the Company and an Opinion of Counsel, each stating that all conditions precedent to
the Covenant Defeasance have been complied with; and 

  

	 	(vi)	the Company shall have delivered documentation reasonably acceptable to the Holder providing for the creation of the trust contemplated by this Sections 8.1(d), the appointment
of the Trustee and the terms of the trust and the creation and perfection of the security interest referred to in Section 8.1(d)(i). 

  

	(e)	Any money and United States government securities deposited in the Trust Account pursuant to Section 8.1(d)(i) in respect of this Note shall be held in trust and applied by the
Company, in accordance with the provisions of this Note and the other Transaction Documents, to the payment to the Holder of this Note and of all sums due and to become due thereon in respect of principal, premium, if any, and interest.

  

 Page 20 of 40 

	(f)	If the Trustee is unable to apply any money or United States government securities in accordance with Section 8.1(e) by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Note shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.1(d)(i), until
such time as the Trustee or the Holder is permitted to apply all such money and United States government securities in accordance with Section 8.1(e). The Company hereby waives, until the indefeasible payment in full of the Note, any right of
subrogation or contribution it may have, whether arising by contract or law (including any such right arising under the US Federal Bankruptcy Code) or otherwise, by reason of any payment of principal of, or premium, if any, or interest on this Note
following the reinstatement of its obligations hereunder. 

  

	(g)	The following conditions shall be applicable to the application of Section 8.1(c) in respect of the Merger Conditions: 

  

	 	(i)	the surviving entity of the merger or consolidation is organized under the laws of the United States, any state thereof or the District of Columbia or the European Union (as of
April 20, 2004); 

  

	 	(ii)	the Holder receives 30 days’ prior notice of the merger or consolidation; 

  

	 	(iii)	the Holder receives an Opinion of Counsel to the effect that, after giving effect to the merger or consolidation, the Company will not be required to withhold or deduct in respect
of any payments under this Note or, prior to giving effect to such merger or consolidation, the Holder receives a satisfactory indemnification indemnifying it for any withholding or deduction in respect of any Tax on payments made hereunder; and

  

	 	(iv)	the surviving entity delivers to the Holder a certified copy of its charter documents and an assumption agreement reasonably acceptable to the Holder pursuant to which the Holder
irrevocably and unconditionally assumes all of the obligations of the Company under this Note and any agreement delivered thereunder, including the documentation relating to the trust provided for in Section 8.1(d). 

 8.2 Affirmative Covenants 
 The
Company hereby covenants and agrees that it shall: 
  

	(a)	give written notice to the Holder upon the occurrence of a Default or any event but for the giving of notice or lapse of time, or both, would constitute a Default within five
(5) Business Days of such event; 

  

	(b)	comply in all material respects with all applicable laws (whether federal, state or local and whether statutory, administrative or judicial or other) and with every

  

 Page 21 of 40 

 applicable lawful governmental order (whether administrative or judicial) except in such instances in
which (i) such law or governmental order is being contested in good faith by appropriate proceedings or (ii) the failure to comply therewith would not be reasonably be expected to have a Material Adverse Effect; 
  

	(c)	keep adequate and proper records and books of account, in which complete and correct entries will be made consistent with the Company’s past practice, reflecting all financial
transactions of the Company; 

  

	(d)	maintain and preserve its existence, rights and privileges, and obtain, maintain and preserve any permits, licenses, authorizations and approvals that are necessary in the proper
conduct of its business except to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect; and 

  

	(e)	maintain sufficient available shares for the issuance of the Note Conversion Shares and cause the Note Conversion Shares to be (i) validly issued, fully paid and nonassessable
(ii) free from all taxes, liens and encumbrances with respect to the issue thereof and (iii) not subject to any required consent, any preemptive rights or other similar rights of stockholders of the Company that have not been duly waived
at such time as this Note is converted into the Note Conversion Shares. 

 9. NO IMPAIRMENT 
 The Company shall not intentionally take or omit any action which would impair the rights and privileges of this Note set forth herein or the rights and privileges of the
Holder of this Note. 
 10. REPLACEMENT NOTE; NOTE TRANSFER 
  

	(a)	In the event that the Holder notifies the Company that this Note has been lost, stolen or destroyed, a replacement Note identical in all respects to the original Note shall be
issued by the Company to the Holder. 

  

	(b)	The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more
Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly
upon request therefore, a complete and correct copy of the names and addresses of all registered holders of the Notes. 

  

 Page 22 of 40 

	(c)	Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer,
duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company’s expense, one or more new Notes in exchange therefore, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. 

 11. EVENTS OF DEFAULT 
 If any of the following shall occur (each a Default): 
  

	(a)	the Company shall fail to pay any principal or interest in respect of this Note and such failure continues for five (5) Business Days following written notice thereof from the
Holder to the Company specifying such failure; 

  

	(b)	any representation or warranty made by the Company in this Note or any other Transaction Document shall have been incorrect in any material respect when made,

  

	(c)	the Company shall fail to perform or observe any covenant or agreement contained in this Note or any other Transaction Document to be performed or observed by it and such failure
shall remain unremedied for a period of (i) thirty (30) calendar days after the Holder has been informed thereof and the Company has received notice of such failure, or (ii) thirty (30) calendar days after the occurrence thereof
if the Holder has not been informed thereof in accordance with the terms hereof; 

  

	(d)	any default or event of default (howsoever described) shall occur under any other Note after giving effect to any applicable grace or cure period; 

  

	(e)	(i) the Company or any of its subsidiaries shall fail to pay any Indebtedness for borrowed money in excess of $250,000 (other than the Indebtedness evidenced by the Notes),
including any interest or premium thereon, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace or cure period, if any, specified in the agreement
or instrument relating to such Indebtedness, (ii) any other event shall occur and shall continue after the applicable grace or cure period, if any, specified in such agreement or instrument, if the effect of such event is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness for borrowed money in excess of the Threshold; or any such Indebtedness for borrowed money in excess of the Threshold shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated maturity thereof, or (iii) as a consequence of the occurrence or continuation of any event or condition (other 

  

 Page 23 of 40 

 than the passage of time), the Company or any subsidiary has become obligated to purchase or repay such
Indebtedness for borrowed money before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount in excess of the Threshold (or its equivalent in the relevant currency of payment), or one or
more Persons have the right to require the Company or any subsidiary so to purchase or repay such Indebtedness; 
  

	(f)	this Note shall for any reason fail or cease to rank at least pari passu in right of payment to all other Indebtedness with the Company’s most senior debt other than
(i) any senior debt of the Company set forth in Schedule 11(f) hereto, and (ii) Permitted Indebtedness secured by Permitted Liens that is collaterally secured (and then only to the extent of such collateral security);

  

	(g)	the Company or any of its subsidiaries shall be generally not paying its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or 

  

	(h)	any proceeding shall be instituted by or against the Company or any of its subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for the Company or for any substantial part of its property and such proceeding shall remain undismissed or unstayed for a period of sixty (60) days, or the Company shall
take any action to authorize or effect any of the actions set forth above in this clause (h); 

 then the Holder may
(1) declare all amounts due hereunder (including without limitation, principal, interest and all other amounts due hereunder) to be immediately due and payable, whereupon all amounts due under this Note shall become and shall be forthwith due
and payable, without diligence, presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, and (2) exercise any and all of its other rights under applicable law and hereunder, provided that upon
the occurrence of a Default in clause (g) or (h) above (as to the Company), all amounts due hereunder (including, without limitation, principal, interest and all other amounts due hereunder) shall automatically become immediately due and
payable without notice to the Company and the Holder shall have the right to exercise any and all of its other rights under applicable law and hereunder. 
 12. INDEMNIFICATION 
 The Company hereby agrees to indemnify and hold harmless the Holder and its respective Affiliates,
directors, officers, partners, employees and other agents and representatives (Indemnitees) from and against any and all liabilities, judgments, claims, 
  

 Page 24 of 40 

 settlements, losses, damages, reasonable fees (including attorneys’, accountants’ and other experts’ fees
and disbursements), liens, taxes, penalties, obligations and expenses (collectively, Losses) incurred or suffered by any such Person or entity arising from, by reason of or in connection with any misrepresentation or breach of any
representation, warranty or covenant of the Company contained in this Note or other document delivered by the Company pursuant to or in connection with this Note (other than the Purchase Agreement, the Somatuline Autogel License, the Increlex
License, the Registration Rights Agreement and the Affiliation Agreement) or otherwise in connection with or as a result of or related to the execution, delivery or performance of this Note or the transactions contemplated hereby other than any
Losses caused by the gross negligence or willful misconduct of the Indemnitees. The indemnification provisions of this Section 12 shall survive repayment in full of this Note. For the avoidance of doubt, the provisions of this Section 12
shall be without prejudice to any remedies to which the parties to any of the other Transaction Documents may be entitled thereunder at law or in equity, including for any breach or non-performance of any representation, warranty, covenant or
covenant contained therein. 
 13. SET-OFF; DEDUCTION; WITHHOLDING 
 If provision is required to by law or regulation of the United States for withholding of Taxes with respect to any amounts payable by the Company to the Holder pursuant
to this Agreement, the Company shall promptly pay such Tax on behalf of the Holder to the proper governmental authority and the Company shall promptly furnish the Holder with a certificate of Taxes deducted under such withholding tax laws. The
Company shall have the right to offset any such Tax actually paid from any payment due to the Holder. The Company and the Holder shall cooperate with each other in obtaining any exemption from or reduced rate of Tax available under any applicable
law or tax treaty. 
 The obligations of the Company under this Section 13 shall survive the payment or transfer of this Note and the provisions of this
Section 13 shall also apply to successive transferees of this Note. 
 14. MISCELLANEOUS 
  

	(a)	All notices, requests, consents and other communications hereunder shall be in writing, shall be delivered by facsimile (with receipt confirmed by telephone) or nationally
recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as addressed as follows: 

  

	 	(i)	if to the Company, to: 

 Tercica, Inc. 
 2000 Sierra Point Parkway, Suite 400 
 Brisbane, California 94005 
 United States of America 
 Attention: General Counsel 
 Facsimile: +1
650 238 1520 
  

 Page 25 of 40 

 with a copy (which shall not constitute notice) to: 
 Cooley Godward LLP 
 Five Palo Alto Square

 3000 El Camino Real 
 Palo
Alto 
 California 94306 
 United States of America 
 Attention: Suzanne Sawochka Hooper 
 Facsimile: +1 650 849 7400 
 or to such
other person, at such other place or to such other facsimile number as the Company shall designate to the Holder in writing; and 
  

	 	(ii)	if to the Holder, to: 

 Ipsen S.A 
 42, rue du Docteur Blanche 
 75016 Paris

 France 
 Attention: General
Counsel 
 Facsimile: +33 1 4496 1188 
 with a copy (which shall not constitute notice) to: 
 Freshfields Bruckhaus Deringer LLP 
 520 Madison Avenue, 34th Floor 
 New York, NY 10022 
 United States of America 
 Attention: Matthew Jacobson, Esq. 
 Facsimile: +1 212 277 4001 
 or to such
other person, at such other place or to such other facsimile number as the Holder shall designate to the Company in writing. 
  

	(b)	No failure on the part of the Holder to exercise, and no delay in exercising, any right, power, privilege or remedy hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof by the Holder preclude any other or further exercise thereof or the exercise of any other right, power, privilege or remedy of the Holder. All rights, powers, privileges and remedies hereunder and under applicable law are
cumulative and not exclusive. No amendment or waiver of any provision of this Note, nor consent to any departure by the Company therefrom, shall in any event be effective unless the same shall be in writing and signed by the Holder, and then such
waiver or consent shall be effective only in the specific instance and For the specific purpose for which given. 

  

 Page 26 of 40 

	(c)	Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 

  

	(d)	The Company hereby (i) irrevocably submits to the exclusive jurisdiction of any New York State or Federal court located in the Borough of Manhattan in the City of New York in
any action or proceeding arising out of or relating to this Note, (ii) waives any defense based on doctrines of venue or forum non conveniens, or similar rules or doctrines, (iii) irrevocably agrees that all claims in respect of such an
action or proceeding may be heard and determined in such New York State or Federal court; and (iv) irrevocably agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), return receipt requested, postage prepaid and specifying next day or two-day delivery, to the Company at its address set forth in Section 14(a) or at such other address of which the Holder shall
have been notified pursuant thereto. 

  

	(e)	This Note shall be construed in accordance with, and this Note and all matters arising out of or relating in any way whatsoever to this Note (whether in contract, tort, or
otherwise) shall be governed by, the law of the State of New York. 

  

	(f)	The Company promises to pay all costs and expenses, including, without limitation, reasonable attorneys’ fees and expenses, incurred by the Holder in connection with the
enforcement or collection of this Note, including, without limitation, in connection with the foreclosure of Collateral, regardless of whether any action is instituted. The obligations of the Company under this Section 14(f) shall survive
repayment in full of this Note. 

  

	(g)	This Note and the rights and obligations hereunder shall not be assigned, delegated, or otherwise transferred (whether by operation of law, by contract, or otherwise) without the
prior written consent of the other party hereto; provided that the Holder may, without obtaining the prior written consent of the Company, assign, delegate, or otherwise transfer its rights and obligations hereunder to any Affiliate of the
Holder. Any attempted assignment, delegation or transfer in violation of this Section 14(g) shall be void and of no force or effect. 

  

 Page 27 of 40 

 IN WITNESS WHEREOF, the Company has caused this Note to be signed on the date
first set forth above. 
  

			
	TERCICA, INC.
		
	By:	 	 /s/ John A. Scarlett, M.D.

	Name:	 	John A. Scarlett, M.D.
	Title:	 	President and Chief Executive Officer

 The undersigned acknowledges and agrees to the terms of this Note. 
  

			
	IPSEN, S.A.
		
	By:	 	 /s/ Claire Giraut

 [Signature Page to First Senior Convertible Promissory Note] 
  

 Page 28 of 40 

 ANNEX A 
 FORM OF NOTICE OF CONVERSION 
  

	To:	Tercica, Inc. 

 2000 Sierra Point Parkway, Suite 400

 Brisbane, California 94005 
 USA 
 Attn: General Counsel 
 TERCICA, INC.

 First Senior Convertible Promissory Note 
 convertible into shares of Tercica, Inc.’s common stock 
 Any term used in this Notice of Conversion and not otherwise defined shall
have the meaning set forth in the Tercica, Inc. First Senior Convertible Promissory Note (the Note) for the principal sum of $25,037,000 issued to Ipsen, S.A., a French société anonyme, and dated October 13,
2006. The undersigned, being the holder of the Note, hereby irrevocably elects that a Conversion Amount of $[                    ]
[(comprised of a principal amount of $[                    ], accrued and unpaid interest on such principal amount at the interest
rates provided in the Note to the Conversion Date of $[                    ] and Default Interest on such accrued and unpaid interest
of $[            ])]1 be converted into
fully paid and non assessable shares of Common Stock in accordance with the terms and conditions of the Note. In accordance with the terms of the Note, by dividing the above Conversion Amount by a Conversion Price of
$[    ] (such price being the Conversion Price in effect on the date of this Notice of Conversion), the undersigned has calculated that
[                    ] shares of Common Stock (the Conversion Shares) are issuable upon such conversion. 
 The undersigned requests that stock certificates for the Conversion Shares be issued and delivered to the undersigned at the address set forth below. 
 In accordance with Section 2(c) of the Note, attached hereto as Exhibit A is the updated Note Ledger, recording the principal amount of the Note to be converted
pursuant to this Notice of Conversion and the outstanding principal amount of the Note following such conversion. 
 Dated:
                     
  

	
	 Signature of Registered Holder
  

	  
 Name of Registered Holder
(Print)
  
  
  
 Address
  
  
  
  
  

	1	Only include if the Conversion Amount includes any accrued and unpaid interest on the principal amount to be converted or any Default Interest on such accrued and
unpaid interest 

  

 Page 29 of 40 

 Schedule (rr) 
 Permitted Indebtedness 
  

	 	•	 	Letter of Credit of $340,000 to Clarendon Hills Investors, LLC related to Sierra Point Office lease 

  

 Page 30 of 40 

 Schedule (ss)(1) 
 Tercica, Inc. 
 Investment Policy 
 The following is the TERCICA, INC. Investment Policy. This document establishes specific guidelines for the investment of TERCICA corporate surplus cash. “Surplus cash” is defined as cash in corporate
accounts not immediately required for working capital, capital investment, debt repayment or to meet other outstanding near-term financial obligations. At a minimum, this document shall be reviewed every six months, or at the time of change in the
senior or financial management of the company, by the Chief Executive Officer, and the Chief Financial Officer. The major categories covered by this document are: 
  

	 	I.	Objectives 

	 	II.	Liquidity and Maturities Guidelines 

	 	III.	Investment Restrictions 

	 	IV.	Concentration Limits 

	 	V.	Minimum Acceptable Credit Quality 

  

	 	VI.	Marketability 

	 	VII.	Trade Guidelines 

	 	VIII.	Treasury Advisor 

	 	IX.	Investment Performance 

	 	X.	Fiduciary Discretion 

 I. OBJECTIVES

 The primary objective of this policy is to comply with the Security and Exchange Commission proposed rules of the Investment Company Act of 1993. As
such, it is acknowledged that the funds invested in TERCICA are intended for the working capital requirements of the company’s primary business of research and product development. 
  

 Page 31 of 40 

 The secondary objective is to obtain above-market returns versus industry averages. In meeting these two objectives, the
Chief Financial Officer and CAO shall maintain systems and procedures that ensure the: 
  

	 	a.	Preservation of capital, 

  

	 	b.	Anticipation of liquidity requirements, 

  

	 	c.	Diversification of investments to minimize the risk and inappropriate concentrations of investments with any one entity, 

  

	 	d.	Fiduciary control of cash and investments. 

 II. LIQUIDITY AND
MATURITIES GUIDELINES 
 Surplus cash is invested under a plan to provide adequate liquidity for company operations without any loss of principal. Under
this plan, daily liquidity is essential. As such, periodic updates shall be reviewed with the company’s Treasury Advisor (as defined in section VII.) not less than on a quarterly basis. Specific restrictions on liquidity are: 
  

	a.	At least $500,000 must be available each business day until 10:30 a.m. Pacific Standard time, 

  

	b.	At least 5% of funds available with 7 days notice, 

  

	c.	Maximum Maturities will not exceed 12 months with weighted average Maturities to be maintained at 6 months or less (for securities which have put dates, reset dates, or are traded
based on their average maturity, or average life, the put date, reset date, or average maturity or average life will be used, instead of the final maturity date, for maturity guideline purposes), 

  

	d.	Repositioning of these securities before their maturity, generating small gains or losses, is permitted for managing liquidity requirements only. Any repositioning of securities
causing a gain or loss must be pre-approved by the CFO for fiduciary control purposes. 

  

 Page 32 of 40 

 III. INVESTMENT RESTRICTIONS 
 Investments shall be made in the context of the following investment guidelines: 
 Eligible Investments: 
  

	a.	Direct obligations of the U.S. Treasury, including bills, notes and bonds, 

  

	b.	Obligations issued or guaranteed by agencies or instrumentality’s of the U.S. governments, 

  

	c.	Bank obligation, including certificates of deposit, banknote time deposits and bankers acceptances. 

  

	d.	Corporate obligations, including intermediate term notes, commercial paper (foreign and domestic issues) and floating rate notes. 

  

	e.	Repurchase agreements collaterized at a minimum of 102% with U.S. Treasury securities or other securities rates “AAA” or equivalent that would be permitted by this policy,

  

	f.	Money market funds over $1 billion in assets, with an historical constant dollar net asset value, consisting of acceptable securities as stated above are appropriate for investing,
as long as the fund’s manager has been in business over five years, has name recognition, and has performance that is easily tracked, 

  

	g.	Taxable and tax exempt Municipal Securities, municipal notes, commercial paper, taxable and tax-exempt auction rate floaters, floating rate notes; Municipal Notes, and Bonds,

  

	h.	U.S. and dollar denominated International corporate debt of all types is acceptable as long as the issuer meets credit rating and marketability guidelines, 

 

	i.	Derivative instruments are ineligible as investments. This would cover all investments where the value is based on an underlying variable causing the coupon and/or the maturity
value to be unknown for the life of the security, at the time of purchase, 

  

	j.	Asset-Backed Securities 

  

	k.	Trends for a given company or industry must be reviewed periodically with Tercica by the Treasury Advisor and adjustments in percentage positions made accordingly. Should an
investment held in TERCICA portfolio fall short of prescribed guidelines, notification from its Treasury Advisors are expected to be made to the CFO or CAO within 2 business days. 

  

 Page 33 of 40 

 IV. CONCENTRATION LIMITS 
 Diversification of the portfolio will be a tool for minimizing risk while maintaining liquidity. They following parameters will be adhered to in managing the portfolio: 
  

	a.	Obligations of the U.S. Government and have no concentration limits, No more than 50% of the portfolio shall be invested in any single GSE/Federal Agency securities at time of
purchase, 

  

	b.	A maximum of 5% will be invested in any one issuer except for the U.S. Government at time of purchase, 

  

	c.	No more than 10% of the portfolio in entities or issuers of any one country other than the U.S, 

  

	d.	U.S. bank and insurance company securities (CDs, commercial paper, BA’s, etc.), must not in total exceed 60% of the portfolio. Holdings of one issuer cannot exceed 5% of the
total portfolio at the time of purchase, 

  

	e.	No investment will be permitted in common stocks, preferred stocks, options (put or calls), commodities, foreign securities, futures or mutual funds whose underlying securities are
ineligible investments according to this investment policy. 

 V. MINIMUM ACCEPTABLE CREDIT QUALITY 
 The obligor must be rated in the rating category as indicated below by at least one of the Nationally Recognized Statistical Rating Organizations (NRSROs) for municipal
securities and at least two for non-municipal securities. Non-rated, pre-refunded issues may be purchased if collateralized by U.S. Treasuries /Agencies. 
  

							
	 	  	S&P	  	Moody’s	  	Fitch
	 Minimum Short Term Rating
	  	A-1/SP-1	  	P-1/MIG-1	  	F-1
	 Minimum Long Term Rating
	  	A-	  	A3	  	A-

  

 Page 34 of 40 

 VI. MARKETABILITY 
 All securities are to be purchased through investment banking and brokerage firms of high quality and reputation, with a history of making markets for the securities in which we invest. In the unlikely event that securities must be sold
before their maturity, the securities must be easily re-marketed. To accomplish this, the securities must be conventional “products” with strong name recognition. 
 VII. TRADE GUIDELINES 
 All purchases and sales will be executed at the best net price with the principal dealers and
banks in the particular securities. U.S. Government, U.S. Federal Agency and repurchase agreement securities brokers will be limited to the list of Primary Government Securities Dealers published by the Federal Reserve Bank. All securities purchased
will be in the name of the account of the nominee name of the custodian bank. 
 VIII. TREASURY ADVISOR 
 The company shall establish a relationship with a Treasury Advisor to assist in the administration of these guidelines. The Treasury Advisor shall have the responsibility
of: 
  

	a.	Adherence to TERCICA Investment Policy, 

  

	b.	Discretionary Authority to make investment decisions on a discretionary basis regarding all assets placed under its jurisdiction. Such “discretion” includes decisions to
buy, hold and sell securities (including cash equivalents) in amounts and proportions that are reflective of the Treasury Advisor’s current investment strategy within the guidelines set forth in this policy, 

  

	c.	Communication: 

  

	 	1.	With TERCICA on a timely basis of major changes in its investment outlook, investment strategy, asset allocation, and other matters affecting its investment policies or philosophy,

  

	 	2.	Whenever the Treasury Advisor believes that any particular guideline should be altered or deleted, it will be the Treasury Advisor’s responsibility to initiate written
communications with TERCICA expressing its views and recommendations, 

  

 Page 35 of 40 

	d.	Reporting: 

  

	 	1.	Timely notices of transaction activity as well as monthly performance reports. 

  

	 	2.	Any information needs to assist TERCICA in conduction an evaluation of portfolio management will be expected on a timely basis. 

  

	e.	Compliance with Appropriate Legislation: 

  

	 	1.	The Treasury Advisor is responsible for strict compliance with federal and state law as it pertains to its duties and responsibilities as a fiduciary. 

  

	 	2.	The Treasury Advisor shall be registered under the Investment Advisory Act of 1940. 

 The company shall review the performance of the Treasury Advisor as noted in section IX. 
 IX. INVESTMENT PERFORMANCE 
 The Treasury Advisor will issue a
quarterly investment performance analysis using time-weighted measures. At a minimum, a quarterly meeting will be held with the CFO or CAO to review performance figures. 
 X. FIDUCIARY DISCRETION 
 The CFO is responsible for securing and managing investments and cash for operations and has
full discretion to invest any excess capital subject to strict adherence to these guidelines 
  

 Page 36 of 40 

 Schedule (ss)(2) 
 Permitted Investments 
  

	 	•	 	Loan to Employee of $35,000 

  

 Page 37 of 40 

 Schedule (tt) 
 Permitted Liens 
  

	 	•	 	Letter of Credit of $340,000 to Clarendon Hills Investors, LLC related to Sierra Point Office lease 

  

 Page 38 of 40 

 Schedule 7(c) 
 Financing Statements 
 None. 
  

 Page 39 of 40 

 Schedule 11(f) 
 Senior Debt 
 None. 
  

 Page 40 of 40Rights Agreement

 Exhibit 4.6A 
  

 TERCICA, INC. 
 and 
 COMPUTERSHARE TRUST COMPANY, N.A. 
 as Rights Agent 
 RIGHTS AGREEMENT 
 Dated as of October 13, 2006 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	PAGE
	SECTION 1.	  	 CERTAIN DEFINITIONS
	  	1
			
	SECTION 2.	  	 APPOINTMENT OF RIGHTS AGENT
	  	6
			
	SECTION 3.	  	 ISSUE OF RIGHT CERTIFICATES
	  	7
			
	SECTION 4.	  	 FORM OF RIGHT CERTIFICATES
	  	9
			
	SECTION 5.	  	 COUNTERSIGNATURE AND REGISTRATION
	  	9
			
	SECTION 6.	  	TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES	  	10
			
	SECTION 7.	  	 EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS
	  	10
			
	SECTION 8.	  	 CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES
	  	12
			
	SECTION 9.	  	 AVAILABILITY OF PREFERRED SHARES
	  	12
			
	SECTION 10.	  	 PREFERRED SHARES RECORD DATE
	  	13
			
	SECTION 11.	  	 ADJUSTMENT OF PURCHASE PRICE, NUMBER OF
SHARES OR NUMBER OF RIGHTS
	  	14
			
	SECTION 12.	  	 CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES
	  	20
			
	SECTION 13.	  	 CONSOLIDATION, MERGER OR SALE OR TRANSFER
OF ASSETS OR EARNING POWER
	  	21
			
	SECTION 14.	  	 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
	  	23
			
	SECTION 15.	  	 RIGHTS OF ACTION
	  	25
			
	SECTION 16.	  	 AGREEMENT OF RIGHT HOLDERS
	  	25
			
	SECTION 17.	  	 RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER
	  	25
			
	SECTION 18.	  	 CONCERNING THE RIGHTS AGENT
	  	26
			
	SECTION 19.	  	 MERGER OR CONSOLIDATION OR CHANGE OF
NAME OF RIGHTS AGENT
	  	26
			
	SECTION 20.	  	 DUTIES OF RIGHTS AGENT
	  	27
			
	SECTION 21.	  	 CHANGE OF RIGHTS AGENT
	  	29
			
	SECTION 22.	  	 ISSUANCE OF NEW RIGHT CERTIFICATES
	  	29
			
	SECTION 23.	  	 REDEMPTION
	  	30
			
	SECTION 24.	  	 EXCHANGE
	  	31
			
	SECTION 25.	  	 NOTICE OF CERTAIN EVENTS
	  	33
			
	SECTION 26.	  	 NOTICES
	  	33
			
	SECTION 27.	  	 SUPPLEMENTS AND AMENDMENTS
	  	34
			
	SECTION 28.	  	 DETERMINATION AND ACTIONS BY THE BOARD
OF DIRECTORS, ETC.
	  	34

  

 i. 

 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	  	 	  	PAGE
	SECTION 29.	  	 SUCCESSORS
	  	35
			
	SECTION 30.	  	 BENEFITS OF THIS AGREEMENT
	  	35
			
	SECTION 31.	  	 SEVERABILITY
	  	36
			
	SECTION 32.	  	 GOVERNING LAW
	  	36
			
	SECTION 33.	  	 COUNTERPARTS
	  	36
			
	SECTION 34.	  	 FORCE MAJEURE
	  	36
			
	SECTION 35.	  	 DESCRIPTIVE HEADINGS
	  	36

  

 ii. 

 RIGHTS AGREEMENT 
 THIS RIGHTS AGREEMENT (“Agreement”) between TERCICA, INC., a Delaware corporation (the
“Company”), and COMPUTERSHARE TRUST COMPANY, N.A. (“Rights Agent”), is entered into as of this 13th day of October, 2006. 
 The Board of Directors of the Company (the “Board of Directors”) has authorized and declared a dividend of one preferred share purchase
right (a “Right”) for each Common Share (as such term is hereinafter defined) outstanding at the close of business on October 27, 2006 (the “Record Date”), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as such term is hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest to occur of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may be issued with
respect to Common Shares that shall become outstanding after the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date in accordance with the provisions of Section 22 hereof. 
  

 1. 

 Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties
hereby agree as follows: 
 SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated: 
 (a) “Acquiring Person” shall mean any Person (as such term is hereinafter
defined) who or that, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of the Requisite Percentage. Notwithstanding the foregoing,
(A) the term Acquiring Person shall not include (i) the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the Company, (iii) any employee benefit or compensation plan of the Company or any Subsidiary of the
Company, (iv) any entity holding Common Shares for or pursuant to the terms of any such employee benefit or compensation plan of the Company or any Subsidiary of the Company, or (v) an Excluded Stockholder (as such term is hereinafter
defined) and (B) no Person shall become an “Acquiring Person” either (x) as the result of an acquisition of Common Shares by the Company that, by reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to the Requisite Percentage; provided, however, that if a Person shall become the Beneficial Owner of the Requisite Percentage by reason of share purchases by the Company and shall, following written
notice from, or public disclosure by the Company of such share purchases by the Company, become the Beneficial Owner of any additional Common Shares without the prior approval of the Board of Directors and, if the Company is restricted from taking
actions pursuant to Section 3 of the Affiliation Agreement, Ipsen, and shall then beneficially own more than the Requisite Percentage, then such Person shall be deemed to be an “Acquiring Person,” or (y) if the Board of Directors
determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests, as promptly as practicable
(as determined in good faith by the Board of Directors), following receipt of written notice from the Company of such event, of Beneficial Ownership of a sufficient number of Common Shares so that such Person would no longer be an Acquiring Person,
as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement; provided, however, that if such Person shall again become
the Beneficial Owner of the Requisite Percentage, such Person shall be deemed an “Acquiring Person,” subject to the exceptions set forth in this Section 1(a). 
 (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date of this Agreement; provided, however, that the limited partners of a limited partnership shall not be
deemed to be Associates of such limited partnership solely by virtue of their limited partnership interests. 
 (c) “Affiliation
Agreement” shall have the meaning ascribed to it in the Ipsen Purchase Agreement. 
 (d) A Person shall be deemed the
“Beneficial Owner” of and shall be deemed to “beneficially own” any securities: 
 (i) that such
Person or any of such Person’s Affiliates or Associates is deemed to beneficially own, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Rights Agreement (except to the
extent contemplated by the provisos to Sections 1(d)(ii)(A) and 1(d)(ii)(B) hereof); 
  

 2. 

 (ii) that such Person or any of such Person’s Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, securities (1) tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (2) acquired as a part of any employee benefit or compensation plan of the Company or any Subsidiary of the Company consistent with past practice; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that (1) with respect to Ipsen (including its Affiliates or Associates), Ipsen (including its Affiliates or Associates) shall not be deemed the Beneficial Owner of, or to beneficially own,
any securities that Ipsen (including its Affiliates or Associates) has the right to vote pursuant to any Voting Agreement, and (2) a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (a) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (b) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or 
 (iii) that are beneficially owned, directly or indirectly, by any other Person with which such Person, or any of such Person’s Affiliates or Associates, has any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the
proviso to Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company. 
 Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase, “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding which such Person would be deemed to beneficially own hereunder. 
 (e) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the Commonwealth of Massachusetts are authorized or obligated by law or executive order
to close. 
 (f) “Close of Business” on any given date shall mean 5:00 p.m., Eastern Time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00 p.m., Eastern Time, on the next succeeding Business Day. 
  

 3. 

 (g) “Common Shares” shall mean the shares of common stock, par value $0.001 per share,
of the Company; provided, however, that, “Common Shares,” when used in this Agreement in connection with a specific reference to any Person other than the Company, shall mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. 
 (h) “Convertible Notes” shall have the meaning ascribed to it in the Ipsen Purchase Agreement. 
 (i) “Distribution Date” shall have the meaning set forth in Section 3 hereof. 
 (j) “Excluded
Stockholder” shall mean each of the following Persons: 
 (i) MPM Capital L.P. (including its Affiliates and Associates);
provided, however, that MPM Capital L.P. (including its Affiliates and Associates) shall not be an Excluded Stockholder if MPM Capital L.P. (including its Affiliates and Associates) becomes the Beneficial Owner of any Common Shares other than
Common Shares Beneficially Owned on October 13, 2006; 
 (ii) Ipsen (including its Affiliates and Associates), so long as Ipsen
(including its Affiliates and Associates) does not acquire beneficial ownership of any Common Shares other than Common Shares Ipsen (including its Affiliates and Associates) (A) acquires (or has the right to acquire) beneficial ownership of
directly from the Company pursuant to the Ipsen Purchase Agreement, the Affiliation Agreement, the Convertible Notes and the Warrant, and (B) acquires beneficial ownership of from Persons other than the Company pursuant to Permitted Offers and
Acquisitions (any such acquisition pursuant to this subclause (B), an “Exempted Acquisition”); and 
 (iii) any
Person (including its Affiliates and Associates) who acquires Common Shares directly from Ipsen (including its Affiliates and Associates) (an “Ipsen Transfer”); provided, however, that such Person (including its Affiliates
and Associates) (an “Ipsen Transfer Holder”) shall not be an Excluded Stockholder if, after giving effect to such Ipsen Transfer, such Ipsen Transfer Holder (including its Affiliates and Associates) is or becomes the Beneficial
Owner of more than 14.9% of the outstanding Common Shares without the prior approval of the Board of Directors and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation Agreement, Ipsen. 
 (k) “Exempted Ipsen Transfer” shall mean any Ipsen Transfer if, following such Ipsen Transfer, the Ipsen Transfer Holder (including its
Affiliates and Associates) that acquires Common Shares in such Ipsen Transfer shall qualify as an Excluded Stockholder pursuant to the terms of Section 1(j)(iii) and shall not otherwise be an Acquiring Person. 
 (l) “Final Expiration Date” shall have the meaning set forth in Section 7 hereof. 
 (m) “Interested Stockholder” shall mean any Acquiring Person or any Affiliate or Associate of an Acquiring Person, or any other Person
acting directly or indirectly on behalf of or in concert with any such Acquiring Person, Affiliate or Associate. 
  

 4. 

 (n) “Ipsen” shall mean Ipsen S.A., a French société anonyme.

 (o) “Ipsen Purchase Agreement” shall mean that certain Stock Purchase and Master Transaction Agreement, dated as of
July 18, 2006, by and between the Company and Ipsen (as the same may be amended from time to time). 
 (p) “Note Shares”
shall have the meaning ascribed to it in the Ipsen Purchase Agreement. 
 (q) “Permitted Offers and Acquisitions” shall
have the meaning ascribed to it in the Affiliation Agreement. 
 (r) “Person” shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or otherwise) of such entity. 
 (s) “Preferred Shares” shall
mean shares of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company having the designations and the powers, preferences and rights, and the qualifications, limitations and restrictions set forth in the Form of
Certificate of Designation attached to this Agreement as EXHIBIT A. 
 (t) “Purchase Price” shall
have the meaning set forth in Section 7 hereof. 
 (u) “Redemption Date” shall have the meaning set forth in
Section 7 hereof. 
 (v) “Requisite Percentage” with respect to any Person shall mean 9.9% or more of the Common Shares
then outstanding; provided, however, that notwithstanding the foregoing, the Requisite Percentage with respect to (i) MPM Capital L.P. (including its Affiliates and Associates), until MPM Capital L.P. (including its Affiliates and
Associates) shall have beneficial ownership equal to 9.9% or less, shall mean the percentage equal to the percentage beneficial ownership held solely by reason of the Common Shares held by MPM Capital L.P. (including its Affiliates and Associates)
on October 13, 2006, (ii) Ipsen (including its Affiliates and Associates), until Ipsen (including its Affiliates and Associates) shall have beneficial ownership equal to 9.9% or less, shall mean the percentage equal to the percentage
beneficial ownership obtained solely by reason of beneficial ownership of Common Shares acquired by Ipsen (including its Affiliates and Associates) (A) directly from the Company pursuant to the Ipsen Purchase Agreement, the Affiliation
Agreement, the Convertible Notes or the Warrant and (B) in Exempted Acquisitions, and (iii) an Ipsen Transfer Holder (including its Affiliates and Associates) shall mean 14.9% or more of the Common Shares then outstanding. 
 (w) “Shares Acquisition Date” shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such; provided, however, that, if such Person is determined not to have become an Acquiring Person pursuant to clause (y) of Subsection 1(a)(B) hereof, then no Shares Acquisition Date shall be deemed to have occurred.
Notwithstanding anything in this Agreement to the contrary, no Shares Acquisition Date shall be deemed to have occurred solely as a result of (i) (A) the approval, execution, delivery or amendment of the Stock Purchase Agreement, the
Affiliation Agreement, any Voting Agreement or any other agreements or documents contemplated by the Stock Purchase Agreement, (B) the announcement of the Stock Purchase Agreement or the announcement of the 

  

 5. 

 
closing of the transactions contemplated thereby, (C) the acceptance for payment and purchase of Common Shares pursuant to the Stock Purchase Agreement,
(D) the issuance of the Convertible Notes or the Warrants pursuant to the Stock Purchase Agreement, (E) the issuance of the Note Shares or the Warrant Shares upon any conversion of the Convertible Notes or any exercise of the Warrant,
respectively, (F) the acquisition of beneficial ownership of Common Shares by Ipsen (including its Affiliates and Associates) directly from the Company pursuant to the Affiliation Agreement, (G) the acquisition of beneficial ownership of
Common Shares in an Exempted Acquisition for so long as Ipsen (including its Affiliates and Associates) shall remain an Excluded Stockholder, or (H) the consummation of any other transaction contemplated by the Stock Purchase Agreement; or
(ii) (A) the approval, execution, delivery or amendment of the definitive agreement(s) for an Exempted Ipsen Transfer, (B) the announcement or closing of an Exempted Ipsen Transfer, (C) the acceptance for payment and purchase of
Common Shares pursuant to an Exempted Ipsen Transfer, or (D) the consummation of any other transaction contemplated by the definitive agreement(s) for an Exempted Ipsen Transfer. 
 (x) “Subsidiary” of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person. 
 (y) “Transaction” shall mean any merger,
consolidation or sale of assets described in Section 13(a) hereof or any acquisition of Common Shares which would result in a Person becoming an Acquiring Person or a Principal Party (as such term is hereinafter defined). 
 (z) “Transaction Person” with respect to a Transaction shall mean (i) any Person who (x) is or will become an Acquiring Person
or a Principal Party (as such term is hereinafter defined) if the Transaction were to be consummated and (y) directly or indirectly proposed or nominated a director of the Company which director is in office at the time of consideration of the
Transaction, or (ii) an Affiliate or Associate of such a Person. 
 (aa) “Voting Agreement” shall have the meaning
ascribed to it in the Ipsen Purchase Agreement. 
 (bb) “Warrant” shall have the meaning ascribed to it in the Ipsen
Purchase Agreement. 
 (cc) “Warrant Shares” shall have the meaning ascribed to it in the Ipsen Purchase Agreement.

 SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or
desirable upon ten (10) days’ prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and in no event be liable for, the acts or omissions of any such co-Rights Agent. 
  

 6. 

 SECTION 3. ISSUE OF RIGHT CERTIFICATES.

 (a) Until the earlier of the Close of Business on (i) the tenth Business Day following the Shares Acquisition Date or
(ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation Agreement, Ipsen, prior to such time as
any Person becomes an Acquiring Person) after the date of the commencement (determined in accordance with Rule 14d-2 under the Exchange Act) by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan) of, or of the first public announcement of the intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan) to commence, a tender or exchange offer (which intention to commence remains in
effect for five Business Days after such announcement), the consummation of which would result in any Person becoming an Acquiring Person (including any such date which is after the date of this Agreement and prior to the issuance of the Rights, the
earlier of such dates being herein referred to as the “Distribution Date”), (x) the Rights will be evidenced by the certificates for Common Shares registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y) the Rights (and the right to receive Right Certificates therefor) will be transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of
EXHIBIT B hereto (a “Right Certificate”), evidencing one Right for each Common Share so held, subject to the adjustment provisions of Section 11 of this Rights Agreement. As of the Distribution Date,
the Rights will be evidenced solely by such Right Certificates. Notwithstanding anything in this Agreement to the contrary, no Distribution Date shall be deemed to have occurred solely as a result of (i) (A) the approval, execution,
delivery or amendment of the Stock Purchase Agreement, the Affiliation Agreement, any Voting Agreement or any other agreements or documents contemplated by the Stock Purchase Agreement, (B) the announcement of the Stock Purchase Agreement or
the announcement of the closing of the transactions contemplated thereby, (C) the acceptance for payment and purchase of Common Shares pursuant to the Stock Purchase Agreement, (D) the issuance of the Convertible Notes or the Warrants
pursuant to the Stock Purchase Agreement, (E) the issuance of the Note Shares or the Warrant Shares upon any conversion of the Convertible Notes or any exercise of the Warrant, respectively, (F) the acquisition of beneficial ownership of
Common Shares by Ipsen (including its Affiliates and Associates) directly from the Company pursuant to the Affiliation Agreement, (G) the acquisition of beneficial ownership of Common Shares in an Exempted Acquisition for so long as Ipsen
(including its Affiliates and Associates) shall remain an Excluded Stockholder, or (H) the consummation of any other transaction contemplated by the Stock Purchase Agreement; or (ii) (A) the approval, execution, delivery or amendment
of the definitive agreement(s) for an Exempted Ipsen Transfer, (B) the announcement or closing of an Exempted Ipsen Transfer, (C) the acceptance for payment and purchase of Common Shares pursuant to an Exempted Ipsen Transfer, or
(D) the consummation of any other transaction contemplated by the definitive agreement(s) for an Exempted Ipsen Transfer. 
  

 7. 

 (b) On the Record Date, or as soon as practicable thereafter, the Company will send (directly or
through the Rights Agent or its transfer agent) a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form of EXHIBIT C hereto (the “Summary of Rights”), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company. With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof. Until the Distribution Date (or the earlier of the Redemption Date and the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on the Record Date shall also constitute the transfer of the Rights associated with the Common Shares represented thereby. 
 (c) Certificates for Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following
legend: 
 This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement
between Tercica, Inc. (the “Company”) and Computershare Trust Company, N.A. as Rights Agent (the “Rights Agent”), dated as of October 13, 2006, as amended from time to time (the “Rights Agreement”), the terms of
which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. As described in the Rights
Agreement, Rights issued to any Person who becomes an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and certain related persons, whether currently held by or on behalf of such Person or by any subsequent
holder, shall become null and void. 
 With respect to such certificates containing the foregoing legend, until the Distribution Date (or, if
earlier, the earlier of the Redemption Date or the Final Expiration Date), the Rights associated with the Common Shares represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the Common Shares represented thereby. In the event that the Company purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding. Notwithstanding this
Section 3(c), the omission of a legend shall not affect the enforceability of any part of this Rights Agreement or the rights of any holder of the Rights. 
  

 8. 

 SECTION 4. FORM OF RIGHT CERTIFICATES.

 (a) The Right Certificates (and the form of election to purchase Preferred Shares, the form of assignment and the form of
certification to be printed on the reverse thereof) shall be substantially the same as EXHIBIT B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon
as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange or quotation system on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Sections 7, 11 and 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such
number of one one-hundredths of a Preferred Share as shall be set forth therein at the Purchase Price, but the number of such one one-hundredths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein.

 (b) Any Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights which are null and
void pursuant to the second paragraph of Section 11(a)(ii) hereof and any Right Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Right Certificate referred
to in this sentence, shall contain (to the extent feasible) the following legend: 
 The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this Right Certificate and the Rights represented hereby
are null and void. 
 The provisions of Section 11(a)(ii) hereof shall be operative whether or not the foregoing legend is contained on
any such Right Certificate. 
 SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the Board of Directors, its Chief Executive Officer, its President, its Vice Chairman of the Board of Directors, its Chief Financial Officer, or any of its Vice Presidents,
either manually or by facsimile signature, shall have affixed thereto the Company’s seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such person was not such an officer. 
  

 9. 

 Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its office designated
for such purpose, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right Certificates. 
 SECTION 6. TRANSFER, SPLIT UP,
COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN
RIGHT CERTIFICATES. Subject to the provisions of Section 11(a)(ii), Section 14 and Section 24 hereof, at any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged
at the office of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered
holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Right Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 11(a)(ii), Section 14 and Section 24 hereof, countersign and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates. 
 Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will issue, execute and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 
 Notwithstanding any other provisions hereof, the Company and the Rights Agent may amend this Rights Agreement to provide for uncertificated Rights in addition to or in place of Rights evidenced by Rights Certificates. 
 SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS. 
 (a) The registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the 
  

 10. 

 Distribution Date upon surrender of the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Purchase Price for each one one-hundredth of a Preferred Share (or such other number of shares or other
securities) as to which the Rights are exercised, at or prior to the earliest of (i) the Close of Business on October 26, 2016 (the “Final Expiration Date”), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the “Redemption Date”), or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof. 
 (b) The purchase price for each one one-hundredth of a Preferred Share pursuant to the exercise of a Right shall initially be $40.00 (the “Purchase Price”) and shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 
 (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified check, cashier’s
check, bank draft or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent for the Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company, in its sole discretion, shall have elected to deposit the Preferred Shares issuable upon exercise of the Rights
hereunder into a depository, requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt, deliver such cash to or upon the order of the registered holder of such Right Certificate. In the event that the Company
is obligated to issue securities of the Company other than Preferred Shares (including Common Shares) of the Company pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities are available
for distribution by the Rights Agent, if and when appropriate. 
 In addition, in the case of an exercise of the Rights by a holder pursuant
to Section 11(a)(ii) hereof, the Rights Agent shall return such Right Certificate to the registered holder thereof after imprinting, stamping or otherwise indicating thereon that the rights represented by such Right Certificate no longer
include the rights provided by Section 11(a)(ii) hereof, and, if fewer than all the Rights represented by such Right Certificate were so exercised, the Rights Agent shall indicate on the Right Certificate the number of Rights represented
thereby which continue to include the rights provided by Section 11(a)(ii) hereof. 
  

 11. 

 (d) In case the registered holder of any Right Certificate shall exercise fewer than all the
Rights evidenced thereby (other than a partial exercise of rights pursuant to Section 11(a)(ii) as described in Section 7(c) hereof), a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14 hereof. 
 (e) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury, the number of
Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with this Section 7. 
 (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i) completed and signed the certification following the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such
exercise, (ii) tendered the Purchase Price (and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9) to the Company in the manner set forth in
Section 7(c), and (iii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. 
 SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if delivered or surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Right Certificates to the Company approximately one and one-half years after the cancellation date, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company. 
 SECTION 9. AVAILABILITY OF PREFERRED
SHARES. The Company covenants and agrees that so long as the Preferred Shares (and, after the time a person becomes an Acquiring Person, Common Shares or any other securities) issuable upon the exercise of the
Rights may be listed on any national securities exchange or quotation system, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such
exchange or quotation system upon official notice of issuance upon such exercise. 
 The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares (or Common Shares and other securities, as the case may be) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject
to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares or other securities. 
  

 12. 

 The Company further covenants and agrees that it will pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax is due. 
 As soon as practicable after the Distribution Date, the Company shall use its best efforts to: 
 (i) prepare and file a registration statement under the Securities Act of 1933, as amended (the “Act”), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, will use its best efforts to cause such registration statement to become effective as soon as practicable after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the Final Expiration Date; and 
 (ii) use its best efforts to qualify or register the Rights and the securities purchasable upon exercise of the Rights under the blue sky laws of such jurisdictions as may be necessary or appropriate.

 SECTION 10. PREFERRED SHARES RECORD DATE. Each person in whose name any
certificate for Preferred Shares or other securities is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares or other securities represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered with the forms of election and certification duly executed and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon which the Preferred Shares or other securities transfer books of the Company are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares or other securities transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 
  

 13. 

 SECTION 11. ADJUSTMENT OF PURCHASE PRICE,
NUMBER OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number of Preferred Shares covered by each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 
 (a) 
 (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to any adjustment required pursuant to Section 11(a)(ii) hereof. 
 (ii) Subject to Section 24 hereof and the provisions of the next paragraph of this Section 11(a)(ii), in the event any Person shall
become an Acquiring Person, each holder of a Right shall, for a period of 60 days after the later of such time any Person becomes an Acquiring Person or the effective date of an appropriate registration statement filed under the Act pursuant to
Section 9 hereof (provided, however that, if at any time prior to the expiration or termination of the Rights there shall be a temporary restraining order, a preliminary injunction, an injunction, or temporary suspension by the Board of
Directors and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation Agreement, Ipsen, or similar obstacle to exercise of the Rights (the “Injunction”) which prevents exercise of the Rights,
a new 60-day period shall commence on the date the Injunction is removed), have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares (determined pursuant to Section 11(d) hereof) on the date

 such Person became an Acquiring Person; provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is
also subject to the provisions of Section 13 hereof, then only the provisions of 

  

 14. 

 
Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights. 
 Notwithstanding anything in this Agreement to the contrary, from and after the time any Person becomes an Acquiring Person, any Rights beneficially owned
by (i) such Acquiring Person or an Associate or Affiliate of such Acquiring Person, (ii) a transferee of such Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person became such, or
(iii) a transferee of such Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person’s becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)(ii), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to insure that the provisions of this
Section 11(a)(ii) and Section 4(b) hereof are complied with, but shall have no liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. No Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled.

 (iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company may, if a majority of the
Board of Directors then in office and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation Agreement, Ipsen, determines that such action is necessary or appropriate and not contrary to the interests of
holders of Rights, elect to (and, in the event that the Board of Directors has not exercised the exchange right contained in Section 24(c) hereof and there are not sufficient treasury shares and authorized but unissued Common Shares to permit
the exercise in full of the Rights in accordance with the foregoing subparagraph (ii), the Company shall) take all such action as may be necessary to authorize, issue or pay, upon the exercise of the Rights, cash (including by way of a reduction of
the Purchase Price), property, Common Shares, other securities or any combination thereof having an aggregate value equal to the value of the Common Shares which otherwise would have been issuable pursuant to Section 11(a)(ii) hereof, which
aggregate value shall be determined by a nationally recognized investment banking firm selected by a majority of the Board of Directors then in office. For purposes of the preceding sentence, the value of the Common Shares shall be determined
pursuant to Section 11(d) hereof. Any such election by the Board of Directors and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation Agreement, Ipsen, must be made within 60 days following the date
on which the event described in Section 11(a)(ii) hereof shall have occurred. Following the occurrence of the 

  

 15. 

 
event described in Section 11(a)(ii) hereof, a majority of the Board of Directors then in office and, if the Company is restricted from taking actions
pursuant to Section 3 of the Affiliation Agreement, Ipsen, may suspend the exercisability of the Rights for a period of up to 60 days following the date on which the event described in Section 11(a)(ii) hereof shall have occurred to the
extent that such directors have not determined whether to exercise their rights of election under this Section 11(a)(iii). In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended. 
 (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions as the Preferred Shares (“equivalent preferred shares”)) or securities convertible into Preferred Shares or equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Shares or equivalent preferred shares) less than the then current per share market price of the Preferred Shares (as such term is
hereinafter defined) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be
the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent. Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
 (c) In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then
current per share market price of the 

  

 16. 

 
Preferred Shares (as such term is hereinafter defined) on such record date, less the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preferred Share
and the denominator of which shall be such current per share market price of the Preferred Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
 (d) 
 (i) For the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for
the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security or securities convertible into such shares, or (C) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange
or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which
the Security is listed or admitted to trading or as reported on the Nasdaq Global Market or, if the Security is not listed or admitted to trading on any national securities exchange or reported on the Nasdaq Global Market, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System (“Nasdaq”) or such other system then
in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors or,
if on any such date no professional market maker is making a market in the Security, the price as determined in good faith by the Board of Directors. The term “Trading Day” shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. 
  

 17. 

 (ii) For the purpose of any computation hereunder, the “current per share market price”
of the Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i) hereof. If the Preferred Shares are not publicly traded, the “current per share market price” of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the
date hereof) multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, “current per share market price” shall mean the fair value per share as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed with the Rights Agent. 
 (e) No adjustment in the
Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-hundredth of a Preferred Share or one ten-thousandth of any other
share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights. 
 (f) If as a result of
an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Sections 11(a) through
11(c) hereof, inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares shall apply on like terms to any such other shares. 
 (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 
 (h) Unless the Company shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and Section 11(c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a Preferred Share (calculated to the nearest one one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number of one one-hundredths of a Preferred Share covered by a Right immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase
Price. 
  

 18. 

 (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust
the number of Rights, in substitution for any adjustment in the number of one one-hundredths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof,
the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held
by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. 
 (j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-hundredths of a Preferred Share which were expressed in the initial Right Certificates issued
hereunder. 
 (k) Before taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the
then par value, if any, of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully
paid and nonassessable Preferred Shares at such adjusted Purchase Price. 
 (l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment. 
  

 19. 

 (m) The Company covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any action the purpose of which is to, or if at the time such action is taken it is reasonably foreseeable that the effect of such action is to,
materially diminish or eliminate the benefits intended to be afforded by the Rights. Any such action taken by the Company during any period after any Person becomes an Acquiring Person but prior to the Distribution Date shall be null and void unless
such action could be taken under this Section 11(m) from and after the Distribution Date. 
 (n) Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision of the Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or issuance of rights, options or warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such stockholders. 
 (o) In the event that at any time after the
date of this Agreement and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares or (ii) effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares, then in any such case (A) the number of one one-hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number of one one-hundredths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(o) shall be made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is effected. 
 (p) The exercise of Rights under Section 11(a)(ii) hereof shall
only result in the loss of rights under Section 11(a)(ii) hereof to the extent so exercised and shall not otherwise affect the rights represented by the Rights under this Agreement, including the rights represented by Section 13 hereof.

 SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall not be deemed to have knowledge of any adjustment
unless and until it shall have received such certificate. 
  

 20. 

 SECTION 13. CONSOLIDATION, MERGER OR SALE
OR TRANSFER OF ASSETS OR EARNING POWER. 
 (a) In the event that, following the Shares Acquisition Date or, if an event set forth in Section 3(a)(ii) occurs, the Distribution Date, directly or indirectly (x) the Company shall consolidate with,
or merge with and into, any Interested Stockholder, or if in such merger or consolidation all holders of Common Stock are not treated alike, any other Person, (y) any Interested Stockholder, or if in such merger or consolidation all holders of
Common Stock are not treated alike, any other Person shall consolidate with the Company, or merge with and into the Company, and the Company shall be the continuing or surviving corporation of such merger (other than, in the case of either
transaction described in (x) or (y), a merger or consolidation which would result in all of the voting power represented by the securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all of the voting power represented by the securities of the Company or such surviving entity outstanding immediately after such merger or consolidation and the holders of
such securities not having changed as a result of such merger or consolidation), or (z) the Company shall sell, mortgage or otherwise transfer (or one or more of its subsidiaries shall sell, mortgage or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its subsidiaries (taken as a whole) to any Interested Stockholder or Stockholders, or if in such transaction all holders of Common
Stock are not treated alike, any other Person, (other than the Company or any Subsidiary of the Company in one or more transactions each of which individually and the aggregate does not violate Section 13(d) hereof) then, and in each such case,
proper provision shall be made so that (i) each holder of a Right, other than those holders of Rights whose Rights have become null and void pursuant to Section 11(a)(ii) hereof, shall have the right to receive, upon the exercise thereof
at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number
of freely tradeable Common Shares of the Principal Party (as such term is hereinafter defined), free and clear of liens, rights of call or first refusal, encumbrances or other adverse claims, as shall be equal to the result obtained by
(A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable (without taking into account any adjustment previously made pursuant to Section 11(a)(ii)
hereof) and dividing that product by (B) 50% of the then current per share market price of the Common Shares of such Principal Party (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (iii) the
term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply to such Principal Party; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its Common Shares thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no further effect.

  

 21. 

 (b) “Principal Party” shall mean: 
 (i) in the case of any transaction described in clause (x) or (y) of Section 13(a) hereof, the Person that is the issuer of any
securities into which Common Shares are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to the merger or consolidation (or, if applicable, the Company, if it is the surviving
corporation); and 
 (ii) in the case of any transaction described in clause (z) of Section 13(a) hereof, the Person that is
the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions; 
 provided,
however, that in any case, (1) if the Common Shares of such Person are not at such time and have not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary or Affiliate of another Person the Common Shares of which are and have been so registered, “Principal Party” shall refer to such other Person; (2) if such Person is a Subsidiary, directly or indirectly, or
Affiliate of more than one Person, the Common Shares of two or more of which are and have been so registered, “Principal Party” shall refer to whichever of such Persons is the issuer of the Common Shares having the greatest aggregate
market value; and (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint venture as if such party were a “Subsidiary” of both or all of such joint venturers and the Principal Parties in each such chain shall bear the obligations set forth
in this Section 13 in the same ratio as their direct or indirect interests in such Person bear to the total of such interests. 
 (c)
The Company shall not consummate any such consolidation or merger, or sale or transfer of assets or earning power, unless the Principal Party shall have a sufficient number of authorized Common Shares that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and each Principal Party and each other Person who may become a Principal Party as a result of such consolidation,
merger, sale or transfer shall have (i) executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and (ii) prepared, filed and had
declared and remain effective a registration statement under the Act on the appropriate form with respect to the Rights and the securities exercisable upon exercise of the Rights and further providing that, as soon as practicable after the date of
any consolidation, merger, sale or transfer of assets mentioned in paragraph (a) of this Section 13, the Principal Party at its own expense will: 
 (i) cause the registration statement under the Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final Expiration Date; 
  

 22. 

 (ii) use its best efforts to qualify or register the Rights and the securities purchasable upon
exercise of the Rights under the blue sky laws of such jurisdictions as may be necessary or appropriate; 
 (iii) list the Rights and
the securities purchasable upon exercise of the Rights on each national securities exchange on which the Common Shares were listed prior to the consummation of such consolidation, merger, sale or transfer of assets or on the Nasdaq Global Market if
the Common Shares were listed on the Nasdaq Global Market or, if the Common Shares were not listed on a national securities exchange or the Nasdaq Global Market prior to the consummation of such consolidation, merger, sale or transfer of assets, on
a national securities exchange or the Nasdaq Global Market; and 
 (iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in all material respects with the requirements for registration on Form 10 under the Exchange Act. 
 The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. 
 (d) After the Distribution Date, the Company covenants and agrees that it shall not (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer to, in one or more transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its subsidiaries taken as a whole, any other Person (other than a Subsidiary of the
Company in a transaction which does not violate Section 11(m) hereof), if (x) at the time of or after such consolidation, merger or sale there are any charter or bylaw provisions or any rights, warrants or other instruments or securities
outstanding, agreements in effect or any other action taken which would diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates. The Company shall not consummate any such consolidation, merger, sale or transfer unless prior thereto the Company and such other Person shall have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 13(d). 
 SECTION 14. FRACTIONAL RIGHTS AND
FRACTIONAL SHARES. 
 (a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to 

  

 23. 

 
trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or as reported on the Nasdaq Global Market or, if the Rights are not
listed or admitted to trading on any national securities exchange or reported on the Nasdaq Global Market, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by
the Board of Directors. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors shall be used. 
 (b) The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be evidenced by depositary receipts; provided, however, that holders of such depositary receipts shall have all of the
designations and the powers, preferences and rights, and the qualifications, limitations and restrictions to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Preferred Share. For the purposes of this Section 14(b), the current market value of a Preferred Share shall be the current per share market price of the Preferred Shares (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise (or, if not publicly traded, in accordance with Section 11(d)(ii) hereof). 
 (c) Following the occurrence of one of the transactions or events specified in Section 11 hereof giving rise to the right to receive Common
Shares, capital stock equivalents (other than Preferred Shares) or other securities upon the exercise of a Right, the Company shall not be required to issue fractions of Common Shares or units of such Common Shares, capital stock equivalents or
other securities upon exercise of the Rights or to distribute certificates which evidence fractional Common Shares, capital stock equivalents or other securities. In lieu of fractional Common Shares, capital stock equivalents or other securities,
the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Common Share or unit of such Common
Shares, capital stock equivalents or other securities. For purposes of this Section 14(c), the current market value shall be the current per share market price (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise and, if such capital stock equivalent is not traded, each such capital stock equivalent shall have the value of one one-hundredth of a Preferred Share. 
  

 24. 

 (d) The holder of a Right by the acceptance of the Right expressly waives his right to receive any
fractional Rights or any fractional shares upon exercise of a Right (except as provided above). 
 SECTION 15. RIGHTS OF
ACTION. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Sections 18 and 20 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares) and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or
of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject to, this Agreement. Holders of Rights shall be entitled to recover the reasonable costs and expenses, including attorneys fees, incurred by them in any action to
enforce the provisions of this Agreement. 
 SECTION 16. AGREEMENT OF RIGHT
HOLDERS. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 
 (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares; 
 (b) after the Distribution Date, the Right Certificates are transferable (subject to the provisions of this Agreement) only on the registry books
of the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer; and 
 (c) the Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Shares certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary. 
 SECTION 17. RIGHT
CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the 

  

 25. 

 
election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof. 
 SECTION 18. CONCERNING THE RIGHTS
AGENT. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in the premises. The indemnity provided herein shall survive the expiration of the Rights and the termination of this Agreement. 
 The Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or certificate for the Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons, or otherwise
upon the advice of counsel as set forth in Section 20 hereof. In no case will the Rights Agent be liable for special, indirect, incidental or consequential or consequential loss or damage at any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of such loss or damage. 
 SECTION 19. MERGER OR
CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the shareholder
services or corporate trust business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. 
  

 26. 

 In case at any time the name of the Rights Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have
been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this
Agreement. 
 SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 
 (a) The Rights Agent may consult with legal counsel of its choice (who may be legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 
 (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board
of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 
 (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct. 
 (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 
 (e)
The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in
the exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or
24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate pursuant to Section 12
hereof describing such change or adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or 

  

 27. 

 
reservation of any Preferred Shares to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassessable. 
 (f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement. 
 (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Secretary or the Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent with respect to its duties
or obligations under this Agreement and the date on and/or after which such action shall be taken or omitted and the Rights Agent shall not be liable for any action taken or omitted in accordance with a proposal included in any such application on
or after the date specified therein (which date shall not be less than three Business Days after the date indicated in such application unless any such officer shall have consented in writing to an earlier date) unless, prior to taking or omitting
any such action, the Rights Agent has received written instructions in response to such application specifying the action to be taken or omitted. 
 (h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity. 
 (i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof. 
 (j) No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to
it. 
  

 28. 

 (k) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has not been executed, the Rights Agent shall not take any further action with respect to such requested exercise of transfer without
first consulting with the Company. 
 SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent for the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by first-class mail. In the event the transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to resign
automatically on the effective date of such termination and any required notice in connection therewith will be sent by the Company. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent for the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by
the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be
either (a) a corporation, business trust or limited liability company organized and doing business under the laws of the United States or of any other state of the United States which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million or (b) a direct or indirect
wholly owned Subsidiary of such an entity or its wholly-owning parent. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent for the Common Shares or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may be. 
 SECTION 22. ISSUANCE OF
NEW RIGHT CERTIFICATES. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or 

  

 29. 

 
class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date, the Company (a) shall with respect to Common Shares so issued or
sold pursuant to the exercise of stock options or under any employee plan or arrangement in existence prior to the Distribution Date, or upon the exercise, conversion or exchange of securities, notes or debentures issued by the Company and in
existence prior to the Distribution Date, and (b) may, in any other case, if deemed necessary or appropriate by the Board of Directors, issue Right Certificates representing the appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) the Company shall not be obligated to issue any such Right Certificates if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Right Certificate would be issued, and (ii) no Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof. 
 SECTION 23. REDEMPTION. 
 (a) The Rights may be redeemed by action of the Board of Directors and, if the Company is restricted from taking actions pursuant to Section 3
of the Affiliation Agreement, Ipsen, pursuant to Section 23(b) hereof and shall not be redeemed in any other manner. 
 (b)

 (i) The Board of Directors (and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation
Agreement, Ipsen) may, at its (their) option, at any time prior to the earlier of (A) the Distribution Date, or (B) the Final Expiration Date, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.001
per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”), and the Company
may, at its option, pay the Redemption Price in Common Shares (based on the “current per-share market price,” as such term is defined in Section 11(d) hereof, of the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of the Rights by the Board of Directors may be made effective at such time, on such basis and subject to such conditions as the Board of Directors in its sole discretion may
establish. Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable pursuant to Section 11(a)(ii) hereof prior to the expiration or termination of the Company’s right of redemption under
this Section 23(b)(i). 
 (ii) In addition, the Board of Directors (and, if the Company is restricted from taking actions
pursuant to Section 3 of the Affiliation Agreement, Ipsen) may, at its (their) option, at any time after the time a Person becomes an Acquiring Person and after the expiration of any period during which the holder of Rights may exercise the
rights under Section 11(a)(ii) hereof but prior to any event described in clause (x), (y) or (z) of the first sentence of Section 13 hereof, redeem all but not less than all of the then outstanding Rights at the Redemption Price
(x) in connection with any merger, consolidation or sale or other transfer (in one transaction or in a 

  

 30. 

 
series of related transactions) of assets or earning power aggregating 50% or more of the assets or earning power of the Company and its subsidiaries (taken
as a whole) in which all holders of Common Shares are treated alike and not involving (other than as a holder of Common Shares being treated like all other such holders) an Interested Stockholder or a Transaction Person or (y)(A) if and for so long
as the Acquiring Person is not thereafter the Beneficial Owner of the Requisite Percentage, and (B) at the time of redemption no other Persons are Acquiring Persons. 
 (c) Immediately upon the action of the Board of Directors ordering the redemption of the Rights pursuant to Section 23(b) hereof, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors ordering the redemption of the Rights pursuant to Section 23(b) hereof, the Company shall mail
a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the
Common Shares, provided, however, that failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date. 
 (d) The Company may, at its option, discharge all of its obligations with respect to any redemption of the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights and (ii) mailing payment of the Redemption Price to the registered holders of the Rights at their last addresses as they appear on the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common Shares, and upon such action, all outstanding Right Certificates shall be null and void without any further action by the Company. 
 SECTION 24. EXCHANGE. 
 (a) The Board of Directors (and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation Agreement, Ipsen) may, at its (their) option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. 
  

 31. 

 (b) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to Section 24(a) hereof and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent; provided, however,
that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights. 
 (c) In lieu of issuing Common Shares in accordance with Section 24(a) hereof, the Company may, if a majority of the Board of Directors then in office determines that such action is necessary or appropriate
and not contrary to the interests of the holders of Rights, elect to (and, in the event that there are not sufficient treasury shares and authorized but unissued Common Shares to permit any exchange of the Rights in accordance with
Section 24(a) hereof, the Company shall) take all such action as may be necessary to authorize, issue or pay, upon the exchange of the Rights, cash, property, Common Shares, other securities or any combination thereof having an aggregate value
equal to the value of the Common Shares which otherwise would have been issuable pursuant to Section 24(a) hereof, which aggregate value shall be determined by a nationally recognized investment banking firm selected by a majority of the Board
of Directors then in office. For purposes of the preceding sentence, the value of the Common Shares shall be determined pursuant to Section 11(d) hereof. Any election pursuant to this Section 24(c) by the Board of Directors must be made by
resolution within 60 days following the date on which the event described in Section 11(a)(ii) hereof shall have occurred. Following the occurrence of the event described in Section 11(a)(ii) hereof, a majority of the Board of Directors
then in office may suspend the exercisability of the Rights for a period of up to 60 days following the date on which the event described in Section 11(a)(ii) hereof shall have occurred to the extent that such directors have not determined
whether to exercise their rights of exchange under this Section 24(c). In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended. 

(d) The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the 

  

 32. 

 
purposes of this Section 24(d), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately after the date of the first public announcement by the Company that an exchange is to be effected pursuant to this Section 24. 
 SECTION 25. NOTICE OF CERTAIN EVENTS. 
 (a) In case the Company shall propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares),
(iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole), to any other Person, (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purpose of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or the Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or the Preferred Shares, whichever shall be the earlier. 
 (b) In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe the event and the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof. 
 SECTION 26. NOTICES. Notices or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: 
 Tercica, Inc. 
 2000 Sierra Point Parkway,
Suite 400 
 Brisbane, CA 94005 
 Attn: General Counsel 
  

 33. 

 Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to
be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the
Company) as follows: 
 Computershare Trust Company, N.A. 
 250 Royall Street 
 Canton, MA 02021 
 Attn: Client Administration 
 Notices or
demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company. 
 SECTION 27. SUPPLEMENTS AND
AMENDMENTS. Prior to the Distribution Date, the Company and the Rights Agent shall, if the Company so directs (following approval by the Board of Directors and, if the Company is restricted from taking actions
pursuant to Section 3 of the Affiliation Agreement, Ipsen, supplement or amend any provision of this Agreement without the approval of any holders of the Rights. From and after the Distribution Date, the Company and the Rights Agent shall, if
the Company so directs (following approval by the Board of Directors and, if the Company is restricted from taking actions pursuant to Section 3 of the Affiliation Agreement, Ipsen), from time to time supplement or amend any provision of this
Agreement without the approval of any holders of Right Certificates in order to (i) cure any ambiguity, (ii) correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or
(iii) change any other provisions with respect to the Rights which the Company may deem necessary or desirable; provided, however, that no such supplement or amendment shall be made which would adversely affect the interests of the
holders of Rights (other than the interests of an Acquiring Person or its Affiliates or Associates). Any supplement or amendment adopted during any period after any Person has become an Acquiring Person but prior to the Distribution Date shall
become null and void unless such supplement or amendment could have been adopted by the Company from and after the Distribution Date. Any such supplement or amendment shall be evidenced by a writing signed by the Company and the Rights Agent. Upon
delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment unless
the Rights Agent shall have determined in good faith that such supplement or amendment would adversely affect its interest under this Agreement. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Shares. 
 SECTION 28. DETERMINATION AND ACTIONS BY
THE BOARD OF DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the number of Common Shares outstanding at any particular time,
including for purposes of determining the particular percentage of such outstanding Common Shares or any other securities of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement. 

  

 34. 

 
Subject to the provisions of Section 27 and the other provisions expressly providing for the consent of Ipsen, the Board of Directors (or such other
body as shall be specified in the Company’s Certificate of Incorporation) shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board of Directors, or the
Company, or as may be necessary or advisable in the administration of this Agreement, including without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause
(y) below, all omissions with respect to the foregoing) which are done or made by the Board of Directors (or such other body as shall be specified in the Company’s Certificate of Incorporation) in good faith, shall (x) be final,
conclusive and binding on the Rights Agent and the holders of the Rights, and (y) not subject the Board of Directors (or such other body as shall be specified in the Company’s Certificate of Incorporation) to any liability to the holders
of the Rights. 
 SECTION 29. SUCCESSORS. All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 SECTION 30.
BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares). Nothing in this Agreement shall be construed to give any holder of Rights or any other Person any legal or equitable rights,
remedies or claims under this Agreement by virtue of (i) (A) the approval, execution, delivery or amendment of the Stock Purchase Agreement, the Affiliation Agreement, any Voting Agreement or any other agreements or documents contemplated
by the Stock Purchase Agreement, (B) the announcement of the Stock Purchase Agreement or the announcement of the closing of the transactions contemplated thereby, (C) the acceptance for payment and purchase of Common Shares pursuant to the
Stock Purchase Agreement, (D) the issuance of the Convertible Notes or the Warrants pursuant to the Stock Purchase Agreement, (E) the issuance of the Note Shares or the Warrant Shares upon any conversion of the Convertible Notes or any
exercise of the Warrant, respectively, (F) the acquisition of beneficial ownership of Common Shares by Ipsen (including its Affiliates and Associates) directly from the Company pursuant to the Affiliation Agreement, (G) the acquisition of
beneficial ownership of Common Shares in an Exempted Acquisition for so long as Ipsen (including its Affiliates and Associates) shall remain an Excluded Stockholder, or (H) the consummation of any other transaction contemplated by the Stock
Purchase Agreement; or (ii) (A) the approval, execution, delivery or amendment of the definitive agreement(s) for an Exempted Ipsen Transfer, (B) the announcement or closing of an Exempted Ipsen Transfer, (C) the acceptance for
payment and purchase of Common Shares pursuant to an Exempted Ipsen Transfer, or (D) the consummation of any other transaction contemplated by the definitive agreement(s) for an Exempted Ipsen Transfer. 
  

 35. 

 SECTION 31. SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated. 
 SECTION 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State. 
 SECTION 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
 SECTION 34. FORCE MAJEURE. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance
resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures
or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest. 
 SECTION 35.
DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the
provisions hereof. 
 IN WITNESS WHEREOF, parties whereto have caused this Agreement to
be duly executed, all as of the day and year first above written. 
  

									
	ATTEST:	  		  	TERCICA, INC.
			
	 /s/ Stephen N. Rosenfield
	  		  	 /s/ John A. Scarlett, M.D.

	Stephen N. Rosenfield	  		  	John A. Scarlett, M.D.
	 Executive Vice President of Legal Affairs,
 General Counsel and Secretary
	  		  	President and Chief Executive Officer
			
	ATTEST:	  		  	COMPUTERSHARE TRUST COMPANY, N.A.
					
	By:	  	 /s/ Greg Veliotis
	  		  	By:	  	 /s/ Katherine S. Anderson

	Title:	  	Account Manager	  		  	Title:	  	Managing Director

  

 36.

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