SETTLEMENT, LICENSE AND DEVELOPMENT AGREEMENT

Development Agreement

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2590 Central Avenue, Boulder, CO | 8720 Stony Point Parkway, Suite 200, Richmond, VA 23235, Insmed Therapeutic Proteins, Inc | Celtrix Pharmaceuticals, Inc | Genentech, Inc | Insmed Incorporated | Tercica, Inc

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Title: SETTLEMENT, LICENSE AND DEVELOPMENT AGREEMENT
Governing Law: Delaware Date: 5/10/2007
Industry: Biotechnology and Drugs Law Firm: Howrey;Heller Ehrman;McDermott Will;Cooley Godward;Foley Lardner;Goodwin Procter Sector: Healthcare

SETTLEMENT, LICENSE AND DEVELOPMENT AGREEMENT, Parties: 2590 central avenue boulder co , 8720 stony point parkway suite 200 richmond va 23235 insmed therapeutic proteins inc , celtrix pharmaceuticals inc , genentech inc , insmed incorporated , tercica inc

Exhibit 10.1

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE EXCHANGE ACT; [***] DENOTES OMISSIONS.

SETTLEMENT, LICENSE AND DEVELOPMENT AGREEMENT

T HIS S ETTLEMENT , L ICENSE AND D EVELOPMENT A GREEMENT (the “ Agreement ”), is entered into as of March 5, 2007 (the “Execution Date” ) by and between Tercica, Inc., a company incorporated under the laws of Delaware with offices at 2000 Sierra Point Parkway, Suite 400, Brisbane, CA 94005, United States of America (“ Tercica ”), Insmed Incorporated, a company incorporated under the laws of Virginia with offices at 8720 Stony Point Parkway, Suite 200, Richmond, VA 23235, Insmed Therapeutic Proteins, Inc., a company incorporated under the laws of Colorado with offices at 2590 Central Avenue, Boulder, CO 80301, and Celtrix Pharmaceuticals, Inc., a company incorporated under the laws of Delaware with offices at 8720 Stony Point Parkway, Suite 200, Richmond, VA 23235 (collectively, “ Insmed ”) and Genentech, Inc., a company incorporated under the laws of Delaware with offices at 1 DNA Way, South San Francisco, California 94080 (“ GNE ”). Tercica, GNE and Insmed are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

Whereas , Tercica and GNE have entered into that certain License and Collaboration Agreement dated April 15, 2002, as amended on July 25, 2003 and November 25, 2003 (the “ GNE US License ”); and Tercica and GNE have also entered into that certain International License and Collaboration Agreement dated July 25, 2003 (the “ GNE Ex-US License ”); whereby, inter alia, GNE has granted to Tercica a license under the GNE Patents (as defined below), including U.S. Patent No. 5,258,287; U.S. Patent No. 5,187,151; and U.S. Patent No. 6,331,414;

Whereas , certain disputes and controversies have arisen between the Parties relating to the claims, counter-claims, cross-claims, and demands set forth in the following civil action filed on December 23, 2004: Genentech Inc., et al. v. Insmed Incorporated, et al ., United States District Court for the Northern District of California (the “ Court ”), Case No. 04-CV-05429-CW (EMC) (the “ Lawsuit ”). Tercica and GNE alleged that Insmed’s making, using, selling, offering to sell, importing or exporting of the product known as IPLEX™, infringed or will infringe under 35 U.S.C. § 271(a) – (c) and (g), certain asserted claims of United States Patent Nos. 5,187,151 (the “ ‘151 Patent ”), 5,258,287 (the “ ‘287 Patent ”) and 6,331,414 (the “ ‘414 Patent ”) (collectively, the “ Asserted Patents ”);

Whereas , Insmed denied such allegations and further alleged, among other defenses, that the asserted claims of the Asserted Patents were invalid under various theories, including those arising under 35 U.S.C. § 102, 103, 112 and 135. Insmed further asserted that the ‘151 Patent was unenforceable for alleged inequitable conduct;

Whereas , the Parties had a full and fair opportunity to litigate the case fully, including asserting motions for summary judgment and jury trial;

Whereas , the Court adjudicated as a matter of law on June 30, 2006 that Insmed’s method of making the rhIGF-I component of IPLEX™ literally infringed Claims 1 and 9 of the ‘414 Patent (Docket No. 510), and Insmed subsequently stipulated that its methodology literally infringed Claims 2, 3, 4 and 10 of the ‘414 Patent;

Whereas , a jury trial that commenced on November 6, 2006, resulted in the Verdict Form (Docket # 1006) filed December 6, 2006. The Jury further awarded damages to Tercica and GNE of $7.5 million and a royalty of 15% of IPLEX™ sales through December 6, 2006 (the “ Damages ”);

Whereas , legal proceedings among the Parties (and also Avecia Limited, a company incorporated under the laws of England and Wales, whose registered office is at PO Box 42, Hexagon Tower, Blackley, Manchester M9 8ZS, United Kingdom (“ Avecia ”)) and relating to European Patent (UK) No. 0 571 417 have been commenced in the United Kingdom in the High Court of Justice under action numbers HC 04 C 03940 and HC 05 C 00415 (the “ UK Proceedings ”);

Whereas , the Parties have determined that it is in their mutual interest to avoid the expense, distraction, and uncertainty of further litigation and have therefore agreed to conclude and resolve all of their disputes under the Lawsuit and UK Proceedings and settle and consent to judgment of such Lawsuit and UK Proceedings pursuant to the terms and conditions of this Agreement, the Consent Judgment and Permanent Injunction, and the UK Proceedings Settlement Agreement; and

Whereas , the Parties and Avecia have agreed, as of the date hereof, to enter into that certain Settlement Agreement (the “ UK Proceedings Settlement Agreement ”) which sets forth the terms and conditions by which the Parties and Avecia have agreed to settle the UK Proceedings.

Now, therefore , in consideration of the releases and mutual promises, covenants and conditions contained herein, and other good and valuable consideration, including this Agreement, the Consent Judgment and Permanent Injunction, and the UK Proceedings Settlement Agreement, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “ Adult Primary IGF-1 Deficiency ” means abnormally low concentrations of IGF-1 in adults that are: (a) not secondary to growth hormone deficiency; and (b) not secondary to specific pathophysiological states outside the GH/IGF-1 system.

1.2 “ Affiliate ” means any corporation, company, partnership, joint venture and/or firm which controls, is controlled by, or is under common control with a Party; provided that F. Hoffman-la Roche AG (including its subsidiaries) shall be considered a Third Party for purposes of this Agreement, rather than as an Affiliate of GNE. For purposes of the foregoing sentence, “control” and, with correlative meanings, the terms “controlled by” and “under common control with”, mean (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities.

1.3 “ Agreement ” has the meaning assigned to it in the preamble above.

1.4 “ Aggregated Named Patient and Off-Label Sales ” has the meaning assigned to it in Section 7.1(a)(iv)(3).

1.5 “ ALS ” means Lou Gehrig’s disease.

1.6 “ ALS Portion ” has the meaning assigned to it in Section 7.1(a)(iii).

1.7 “ ALS Royalty ” has the meaning assigned to it in Section 7.1(a)(iii).

1.8 “ Avecia ” has the meaning assigned to it in the Recitals of this Agreement.

1.9 “ Booking Party ” means the Party responsible for booking sales of a Product for an Opt-In Indication after Tercica or GNE has exercised its Opt-In right.

1.10 “ Claims ” has the meaning assigned to it in Section 11.1.

1.11 “ Commercialization Plan ” means, in the event Tercica or GNE exercises its Co-Promotion Option for a particular Permitted Indication, the plan prepared by the JCC that would govern the Parties’ co-promotion and related commercialization activities for a Product with respect to such Permitted Indication in accordance with Section 5.3(c).

1.12 “ Committee ” means the Joint Development Committee or Joint Commercialization Committee, as applicable.

1.13 “Completion” means, with respect to a given clinical trial, the completion of all data analysis to be conducted in connection with such clinical trial.

1.14 “ Confidential Information ” has the meaning assigned to it in Section 9.1.

1.15 “ Control ” with the correlative meaning “Controlled by” means, with respect to intellectual property, possession of the right to grant a license or sublicense as provided for herein without violating (a) any law or governmental regulation applicable to such license or sublicense; or (b) the terms of any agreement or other arrangement with any Third Party that exists as of the Effective Date, or, if the applicable intellectual property is acquired or the right to such intellectual property is to be granted after the Effective Date, the date of such acquisition or proposed grant, whichever is later.

1.16 “ Co-Promotion Agreement ” has the meaning assigned to it in Section 5.3(b).

1.17 “ Co-Promotion Option ” has the meaning assigned to it in Section 5.2.

1.18 “ Co-Promotion Term ” has the meaning assigned to it in Section 5.3(b).

1.19 “ Court ” has the meaning assigned to it in the Recitals of this Agreement.

1.20 “ Damages ” has the meaning assigned to it in the Recitals of this Agreement.

1.21 “ Data Services ” has the meaning assigned to it in Section 5.5(a)(i).

1.22 “ Development Costs ” has the meaning assigned to it in Exhibit A .

1.23 “ Diabetes ” means a progressive disease of carbohydrate metabolism involving inadequate production or utilization of insulin that is characterized by hyperglycemia and glycosuria. The term shall apply to any form of diabetes, including without limitation, Type 1 and Type 2 diabetes, as well as other hyperglycemic disorders, such as hyperinsulinemia, hyperlipidemia, insulin-resistant diabetes such as Mendenhall’s Syndrome, Werner Syndrome, leprechaunism, lipoatrophic diabetes.

1.24 “ Diabetes Orphan Indication ” means any Diabetes indication that is also an Orphan Indication.

1.25 “ Disclosing Party ” has the meaning assigned to it in Section 9.1.

1.26 “ Dispute ” has the meaning assigned to it in Section 13.1.

1.27 “ Effective Date ” has the meaning assigned to it in Section 2.1.

1.28 “ EMEA ” means the European Medicines Agency, a decentralized body of the European Union.

1.29 “ European Union ” or “ EU ” means all of the European Union member states as of the applicable time during the Term.

1.30 “ Excluded Indications ” means (a) Excluded Indications as such term is defined in Section 1.21 of the GNE US License, and (b) Excluded Indications as such term is defined in Section 1.19 of the GNE Ex-US License.

1.31 “Execution Date” has the meaning assigned to it in the preamble of this Agreement.

1.32 “ Existing Insmed Indications ” means myotonic muscular dystrophy, HIV related Adipose Redistribution Syndrome (HARS), retinopathy of prematurity, recovery from burns and trauma, and recovery from hip fracture.

1.33 “ Existing Patient ” has the meaning assigned to it in Section 3.1(a).

1.34 “ FDA ” means the United States Food and Drug Administration or its successor.

1.35 “ Fully Burdened Manufacturing Costs ” has the meaning assigned to it in Exhibit A .

1.36 “ GNE Licenses ” means both the GNE US License and the GNE Ex-US License, as each is defined in the Recitals of this Agreement.

1.37 “ GNE Patents ” means (a) GNE Patents as such term is defined in Section 1.35 of the GNE US License, and (b) GNE Patents as such term is defined in Section 1.33 of the GNE Ex-US License.

1.38 “ IGF-1 ” means native-sequence insulin-like growth factor-1 from any species with or without an N-terminal methionine, allelic variants thereof, and sequence variants thereof wherein substitutions and/deletions are made in the region from 1 to 5 amino acids from the N-terminus of the mature native-sequence IGF-1 of any species, including des-IGF-1 and variants wherein at least the glutamic acid residue is absent at position 3 from the N-terminus of native-sequence human IGF-1.

1.39 “ IGFBP-3 ” means native-sequence, insulin-like growth factor binding protein-3 as described in WO 89/09268 published October 5, 1989, that binds IGF-1, including allelic variants of, and animal equivalents to, human BP3 as well as human BP3, for example, the bovine, ovine, porcine and equine species, and may be from any source, whether natural, synthetic, or recombinant, provided that it will bind to the appropriate binding domain of IGF-1.

1.40 “ IND ” means an investigational new drug application as defined under United States law and foreign equivalents.

1.41 “ Indemnified Party ” has the meaning assigned to it in Section 11.4.

1.42 “ Indemnifying Party ” has the meaning assigned to it in Section 11.4.

1.43 “ Infringing Activity ” means any manufacture, use, sale, offer for sale, or importation of a Product, either by Insmed or through an Affiliate or Sublicensee or subcontractor, that would infringe any unexpired GNE Patents in the Other Territory.

1.44 “ Insmed Patents ” means all patents and patent applications Controlled by Insmed as of the Effective Date (if any) or during the Term, in any country of the Territory, that claim the manufacture, use, sale, offer for sale, or importation of Product or IGF-1.

1.45 “ Ipsen ” means Tercica’s sublicensee of certain of the Licensed Patents, Beaufour Ipsen Pharma or its Affiliates, in the Other Territory, pursuant to that certain Increlex™ License and Collaboration Agreement between Tercica and Ipsen dated October 13, 2006.

1.46 “ Joint Commercialization Committee ” or “ JCC ” means the committee formed by the Parties as described in Section 6.3(a).

1.47 “ Joint Development Committee ” or “ JDC ” means the committee formed by the Parties as described in Section 6.2(a).

1.48 “ Launch Date ” has the meaning assigned to it in Section 5.3(b).

1.49 “ Lawsuit ” has the meaning assigned to it in the Recitals of this Agreement.

1.50 “ Licensed Patents ” means (a) the GNE Patents and (b) all patents and patent applications Controlled by Tercica as of the Effective Date or during the Term that claim the manufacture, use, sale or importation of Product and/or that claim the manufacture,

use, sale, or importation of any product or process used in Insmed’s production of Product, including, but not limited to recombinant production of IGF-1 or any IGF-1 binding protein, and purification of IGF-1 or any IGF-1 binding protein.

1.51 “ Marketing Authorization ” means an approval necessary for the manufacture, marketing, importation and sale of a Product for one or more indications in a country or regulatory jurisdiction, which may include, without limitation, the approval of an NDA or MAA, satisfaction of all applicable regulatory and notification requirements, and Pricing Approval (if required). For purposes of this definition, “Pricing Approval” means such approval, agreement, determination or governmental decision establishing prices for a Product that can be charged to consumers and will be reimbursed by governmental authorities in countries, territories or possessions where governmental authorities or Regulatory Authorities of such country, territory or possession approve or determine pricing of pharmaceutical products for reimbursement or otherwise.

1.52 “ Material Breach ” has the meaning assigned to it in Section 12.2.

1.53 “ Named Patient Basis ” means the supply of a Product for a particular individual for the treatment of an indication for which such Product does not yet have Marketing Authorization in the country in which it is prescribed, in response to a specific request of a prescribing physician for such individual patient, where permitted by and in accordance with the laws of the EU member state(s) concerned and in accordance with Directive 2001/83/EC (and in particular Article 5 thereof), as amended by Directive 2004/27/EC, and Regulation (EC) No. 726/2004.

1.54 “ Named Patient Indications ” means myotonic muscular dystrophy, HIV related Adipose Redistribution Syndrome (HARS), retinopathy of prematurity, recovery from burns and trauma, and recovery from hip fracture.

1.55 “ Net Sales ” has the meaning assigned to it in Exhibit A .

1.56 “ New Sales Tracking Data ” has the meaning assigned to it in Section 5.5(a)(ii).

1.57 “ Non-ALS Portion ” has the meaning assigned to it in Section 7.1(a)(iv)(3)

1.58 “ Non - Booking Party ” means the Party that is not responsible for booking sales of a Product for an Opt-In Indication after Tercica or GNE has exercised its Opt-In right.

1.59 “ Non-Orphan Indication ” means any Permitted Indication which is not an Orphan Indication.

1.60 “ Non-Permitted Indications ” means (a) primary IGFD, (b) severe primary IGFD, (c) Noonan’s syndrome, (d) growth hormone deficiency, (e) adult growth hormone deficiency (as approved by the FDA and consisting of two subgroups: adult and child onset), (f) Adult Primary IGF-1 Deficiency, (g) idiopathic short stature, (h) any other short stature indications, (i) Laron’s Syndrome, (j) growth hormone insensitivity (GHIS), (k) any diseases or conditions which are approved for sale by Tercica or GNE, as of the Effective Date, for the treatment by growth hormone, and (l) all Excluded Indications, which, for the purpose of this Agreement and

with respect to Insmed, includes ALS, but which inclusion for purposes of this definition of Non-Permitted Indications shall in no event be interpreted as a concession on the part of either Tercica or GNE as to whether ALS is or is not included within the Excluded Indications with respect to Tercica’s license from GNE under the GNE Licenses.

1.61 “ Non-Permitted Product ” means (a) any product containing IGF-1 without any other bioactive agent, in any dosage or formulation, including without limitation the product known as INCRELEX (mecasermin) that is sold by Tercica as of the Effective Date, or (b) any product containing a combination of IGF-1 and any other active ingredient(s) (excluding IGFBP-3 unless and only as permitted in Section 3.2(b) below).

1.62 “North American Territory” means the United States and Canada.

1.63 “ Off-Label Sales ” has the meaning assigned to it in Section 7.1(a)(iv)(2).

1.64 “ Operating Profit (Loss) ” has the meaning assigned to it in Exhibit A .

1.65 “ Opt-In ” has the meaning assigned to it in Section 4.2(a).

1.66 “ Opt-In Diabetes Orphan Indication ” has the meaning assigned to it in Section 4.3(d).

1.67 “Opt-In Effective Date” has the meaning assigned to it in Section 4.2(b).

1.68 “ Opt-In Exercise Notice ” has the meaning assigned to it in Section 4.2(b).

1.69 “ Opt-In Indication ” has the meaning assigned to it in Section 4.2(b).

1.70 “ Opt-In Information ” means any and all information that is reasonably available to Insmed and which would be reasonably material for Tercica and/or GNE to make a decision regarding the exercise of its Opt-In right at such stage of development and may include, without limitation, any of the following information to the extent generated: a copy of formulation, stability, toxicology, pharmacokinetic, preclinical and clinical development plans and data; complete analysis, results, reports, and interpretations of the foregoing; an accounting of all Development Costs; any pertinent manufacturing information; and any related FDA documentation (including the IND, clinical protocol, investigator’s brochure, FDA minutes and correspondence).

1.71 “ Opt-In Party ” has the meaning assigned to it in Section 4.2(b).

1.72 “ Opt-In Payment ” has the meaning assigned to it in Section 4.2(e).

1.73 “ Opt-In Period ” has the meaning assigned to it in Section 4.2(b).

1.74 “ Opt-Out ” has the meaning assigned to it in Section 4.4.

1.75 “ Orphan Indication ” means an indication for which the FDA has granted orphan status as defined in 21 C.F.R. Pt. 316, as may be amended from time to time. As of the Execution Date, such term is defined in 21 C.F.R. Pt. 316 as a rare disease or condition within the Permitted Indications which: (a) affects less than 200,000 persons in the U.S. or (b) affects more than 200,000 persons in the U.S. but for which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug for such disease or condition will be recovered from sales in the United States of such drug, as further defined in and for which Orphan Drug designation may be sought under the Orphan Drug Act of 1983.

1.76 “Other Territory” means all countries of the Territory other than the United States.

1.77 “ Percentage Interest ” has the meaning assigned to it in Section 4.2(a).

1.78 “Permanent Injunction” has the meaning assigned to in Section 2.1.

1.79 “ Permitted Indications ” means all indications except the Non-Permitted Indications. For the avoidance of doubt, Permitted Indications includes (a) the treatment by growth hormone of HIV patients with wasting or cachexia; and (b) all Existing Insmed Indications.

1.80 “ Phase III Enabling Trial ” means, with respect to any given Permitted Indication, a human clinical trial on a sufficient number of subjects (who are patients with the condition being addressed), with clinically meaningful, regulatorily recognized efficacy endpoints which generates statistically significant efficacy and establishes a safe and effective dose and is designed such that, if successful, Insmed would be allowed by the FDA and/or EMEA to proceed with a pivotal clinical trial that would support the filing of an application for marketing approval for such Permitted Indication. As further discussed in Section 6.2, the Joint Development Committee is responsible for determining whether a given proposed trial by Insmed meets the foregoing definition for a Phase III Enabling Trial prior to the conduct of such trial.

1.81 “ Product ” means any product containing IGF-1 and IGFBP-3, in any dosage, formulation or method of administration, or any co-administration of IGF-1 and IGFBP-3, including without limitation the product known as IPLEX (mecasermin rinfabate) that is sold by Insmed as of the Execution Date. Product does not include any combination product containing IGF-1 and IGFBP-3 and any other active ingredient(s). For purposes of this definition, the term “active ingredient(s)” does not include drug delivery vehicles, adjuvants, and excipients except for those that are recognized by the FDA as active ingredients.

1.82 “ Product Labeling ” means (a) the full prescribing information for a Product approved by the applicable Regulatory Authority, and (b) all labels and other written, printed or graphic information (including without limitation any Product trademarks) included in or placed upon any container, wrapper or package insert used with or for a Product.

1.83 “ Promotional Materials ” means all sales representative training materials and all written, printed, graphic, electronic, audio or video matter, including, without limitation, journal advertisements, sales visual aids, leave items, formulary binders, reprints, direct mail, direct-to-consumer advertising, internet postings, broadcast advertisements and sales reminder aides (for example, note

pads, pens and other such items) intended for use or used by a Party or its Affiliates, sublicensees or licensees in connection with any promotion of a Product for such Permitted Indication, but excluding Product Labeling.

1.84 “ Receiving Party ” has the meaning assigned to it in Section 9.1.

1.85 “ Regulatory Authority ” means any government agency having the responsibility for granting Marketing Authorizations and any other government entities with authority over the manufacturing and the marketing of a Product.

1.86 “ ROW Territory ” means all countries and territories in the Territory other than the countries in the North American Territory.

1.87 “ Sale Country ” means a country in which a Product is used, sold, offered for sale, or imported.

1.88 “ Sales Tracking Dispute ” has the meaning assigned to it in Section 7.1(f).

1.89 “ Sales Tracking Methodology ” has the meaning assigned to it in Section 5.5(a)(i).

1.90 “ Sales Tracking Panel ” has the meaning assigned to it in Section 5.5(d).

1.91 “ Sole Promotion Option ” has the meaning assigned to it in Section 5.2.

1.92 “ Sublicensee ” means a Third Party to whom Insmed or its Affiliates sublicenses its rights and obligations under Section 3.1 of this Agreement. Sublicensee shall also include any Third Party who purchases its supply of Product, in finished form from Insmed, its Affiliates or Sublicensee for resale into the market, where, as a partial or full consideration for such purchase, such Third Party has a payment obligation to Insmed, its Affiliates or Sublicensee that is a percentage of its net sales, including without limitation a royalty obligation.

1.93 “ Supply Agreement ” has the meaning assigned to it in Section 5.4(b).

1.94 “ Term ” has the meaning assigned to it in Section 12.1(a).

1.95 “ Territory ” means all countries of the world.

1.96 “ Third Party ” means a person or entity other than Tercica, GNE, Insmed, or any of their Affiliates.

1.97 “ Trademark ” means IPLEX™ and all other trademarks used or intended for use by Insmed or its Affiliates on the Effective Date or during the Term in connection with the marketing or sale of a Product, other than the corporate names of Insmed and its Affiliates, their trade names, service marks, domain names, and associated logos and designs.

1.98 “ Triggering Delivery ” has the meaning assigned to it in Section 4.2(c).

1.99 “ UK Proceedings ” has the meaning assigned to it in the Recitals of this Agreement.

1.100 “ UK Proceedings Settlement Agreement ” has the meaning assigned to it in the Recitals of this Agreement.

ARTICLE 2

CONSENT JUDGMENT AND PERMANENT INJUNCTION;

RELEASES AND WAIVER

2.1 Entry of Consent Judgment and Permanent Injunction. A Consent Judgment and Permanent Injunction in the form of Exhibit B will be executed herewith (the “Permanent Injunction” ), and the Parties agree to take all steps necessary to have the Permanent Injunction executed by the Court and filed with the Court and hereby authorize and instruct their respective counsel to take those steps. This Agreement shall only become effective upon the execution of the Permanent Injunction by or on behalf of the Parties to the action and the Court, the entry and filing of the Permanent Injunction, and the execution of the UK Proceedings Settlement Agreement in the form of Exhibit C (the date by which the last of such events has occurred, the “Effective Date” ).

2.2 Waiver of Damages . Tercica waives all rights to any Damages awarded in the Lawsuit upon execution and entry by the Court of the Permanent Injunction and the execution of the UK Proceedings Settlement Agreement.

2.3 Release by Tercica. Tercica, by and for itself and on behalf of its employees, agents, other representatives, sublicensees, officers, directors, stockholders, partners, members, subsidiaries, predecessors, successors, and assigns, irrevocably, perpetually and fully releases and discharges Insmed as well as Insmed’s employees, agents, fill-finishers, customers, downstream sellers and users of a Product, and Insmed’s other representatives, officers, directors, stockholders, partners, members, subsidiaries, predecessors, successors, licensees, distributors, and assigns, from any and all claims, rights, demands, liabilities, obligations, damages, actions, and causes of action, of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of any act, omission, event, transaction or occurrence on or before the Effective Date solely to the extent relating to both (a) a Product and (b) the Licensed Patents; provided that this release shall not extend to and affect the rights and obligations under the Permanent Injunction.

2.4 Release by GNE. GNE, by and for itself and on behalf of its employees, agents, other representatives, sublicensees, officers, directors, stockholders, partners, members, subsidiaries, predecessors, successors, and assigns, irrevocably, perpetually and fully releases and discharges Insmed as well as Insmed’s employees, agents, fill-finishers, customers, downstream sellers and users of a Product, and Insmed’s other representatives, officers, directors, stockholders, partners, members, subsidiaries, predecessors, successors, licensees, distributors, and assigns, from any and all claims, rights, demands, liabilities, obligations, damages, actions, and causes of action, of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of any act, omission, event, transaction or occurrence on or before the Effective Date solely to the extent relating to both (a) a Product and (b) the GNE Patents; provided that this release shall not extend to and affect the rights and obligations under the Permanent Injunction.

2.5 Release by Insmed. Insmed, by and for itself and on behalf of its employees, agents, other representatives, sublicensees, officers, directors, stockholders, partners, members, subsidiaries, predecessors, successors, and assigns, irrevocably, perpetually and fully releases and discharges Tercica and GNE as well as each of Tercica’s and GNE’s respective employees, agents, fill-finishers, customers, downstream sellers and users of Increlex, and Tercica’s and GNE’s other representatives, officers, directors, stockholders, partners, members, subsidiaries, predecessors, successors, licensees, distributors, and assigns, from any and all claims, rights, demands, liabilities, obligations, damages, actions, and causes of action, of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of any act, omission, event, transaction or occurrence on or before the Effective Date solely to the extent relating to both (a) the Insmed Patents and (b) any Non-Permitted Products; provided that this release shall not affect the rights and obligations under the Permanent Injunction.

2.6 Waiver of Section 1542 of California Civil Code. Each of Tercica, GNE and Insmed hereby declares and acknowledges the contents of Section 1542 of the California Civil Code, and that section and the benefits thereof are hereby expressly waived. Section 1542 provides as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”

2.7 Other Waivers and Stipulations. The Parties hereby incorporate by reference the conclusions of law, the findings of fact, waivers and stipulations set forth in the Permanent Injunction.

2.8 Discontinuance of UK Proceedings. The Parties shall promptly and permanently discontinue the claims and counterclaims in the UK Proceedings, on the basis that each Party shall be responsible for the costs incurred by it in connection with those proceedings (other than costs which have already been paid by one Party to another pursuant to an order of the United Kingdom Court made prior to the Effective Date). The Parties shall accordingly enter into and perform the UK Proceedings Settlement Agreement relating to the UK Proceedings in the form of Exhibit C forthwith following the execution of this Agreement. Insmed shall ensure that Avecia shall, and shall cause Avecia to, execute such settlement agreement and do all such acts and execute all such documents as may be necessary or desirable to give effect to the provisions of such settlement agreement, including the discontinuance of the claims brought by Avecia against Tercica and GNE in the course of the UK Proceedings. Notwithstanding anything to the contrary in this Section 2.8, as between Tercica and GNE, Tercica shall absorb and bear sole responsibility for payment of any fees, costs, and expenses incurred by GNE relating to the prosecution and/or defense of the Lawsuit and/or the UK Proceedings (with the exception of the time and expenses of any GNE employee(s) allocated or attributed to such prosecution and/or defense, which costs shall be borne by GNE).

2.9 Survival of this Article 2. The Parties hereby agree and acknowledge that the releases, waivers, and covenants made in this Article 2 shall survive the expiration or any termination of this Agreement, including any termination based on a claim by a Party that another Party has breached this Agreement, the Permanent Injunction or the UK Proceedings Settlement Agreement and any such breach shall not be construed as evidence of a failure of consideration for the granting of the releases, waivers and covenants set forth in this Article 2.

ARTICLE 3

LICENSE GRANTS

3.1 Licenses to Insmed.

(a) Limited License for Non-Permitted Indications in the United States. Subject to the terms and conditions of this Agreement, including without limitation Insmed’s fulfillment of its royalty obligations under Section 7.1 below and Insmed’s continued compliance with its covenants in Section 3.5 and the Permanent Injunction and the UK Proceedings Settlement Agreement, Tercica hereby grants Insmed a non-exclusive, non-sublicenseable license or sublicense, as applicable, under Tercica’s entire right, title and interest in and to the Licensed Patents to make, have made, use, sell, offer for sale, and import Product for sale in the United States for any Non-Permitted Indication solely for the continuing treatment of any Existing Patient, for a period of twelve (12) months from the Effective Date. “ Existing Patient ” means no more than one hundred ten (110) patients for whom a Product is prescribed for a Non-Permitted Indication as of the Effective Date. The Parties agree to send to prescribing physicians a joint letter in the form attached hereto as Exhibit D . The license granted under this Section 3.1(a) shall be royalty-free with respect to Net Sales arising from sales to the Existing Patients during the first three (3) months after the Effective Date. If any such sales to Existing Patients occur after such three (3)-month period, such sales shall be royalty-bearing pursuant to Section 7.1(a)(i), but only until the date which is twelve (12) months after the Effective Date. Any sales of a Product by Insmed to such Existing Patients after such twelve (12)-month period, or any sales of a Product by Insmed to any patient who is not an Existing Patient for the treatment of any Non-Permitted Indication at any time after the Effective Date, shall be evidence of Material Breach by Insmed of this Section 3.1(a) and/or a violation of the Permanent Injunction, and Tercica may take any action and/or seek any remedy in law or equity for such breach or violation.

(b) License for Named Patient Indications in the European Union on Named Patient Basis. Subject to the terms and conditions of this Agreement, including without limitation Insmed’s fulfillment of its royalty obligations under Section 7.1 below, and Insmed’s continued compliance with its covenants in Section 3.5 and the Permanent Injunction and UK Proceedings Settlement Agreement, Tercica hereby grants Insmed a limited, non-exclusive, non-sublicenseable, royalty-bearing license, or sublicense, as applicable, under Tercica’s entire right, title and interest in and to the Licensed Patents to make, have made, use, sell, offer for sale, and import Product for sale in any country in the European Union solely for the treatment of one or more of the Named Patient Indications, on a Named Patient Basis only; provided that Tercica and GNE each shall have the right to perform audits, either by itself or through its designee, on Insmed’s compliance with any laws, regulations and guidelines applicable to conducting such activities on a Named Patient Basis in addition to, and pursuant to the procedures described in, Section 7.8.

(c) License for Permitted Indications in the Territory. Subject to the terms and conditions of this Agreement, including without limitation the exclusion of rights and restrictive covenants set forth in Section 3.1(e), Tercica’s and GNE’s Opt-In rights described in Section 4.2, Insmed’s royalty obligations under Section 7.1 below, and Insmed’s continued compliance with its covenants in Section 3.5 and the Permanent Injunction and UK Proceedings Settlement Agreement, Tercica hereby grants Insmed a non-exclusive, royalty-bearing license, or sublicense, as applicable, with the right to sublicense solely as permitted under this Section 3.1(c), under Tercica’s entire right, title and interest in and to the Licensed Patents to make, have made, use, sell, offer for sale, and import Product for sale in all countries in the Territory, solely for use in the treatment of any of the Permitted Indications. Subject to Tercica’s and GNE’s Opt-In rights under Section 4.2, the license granted in this Section 3.1(c) may be sublicensed by Insmed to Third Parties with the prior written consent of Tercica and GNE, such consent not to be unreasonably withheld or delayed.

(d) Limited Covenant-Not-To-Sue for ALS Indication on Named Patient Basis in Italy. Subject to the terms and conditions of this Agreement, including without limitation Insmed’s fulfillment of its royalty obligations to GNE under Section 7.1 below, and Insmed’s continued compliance with its covenants in Section 3.5 and the Permanent Injunction and UK Proceedings Settlement Agreement, each of GNE and Tercica hereby covenants that it shall not, to the extent it has the right to do so, enforce, or permit or encourage the enforcement of, against Insmed or its Affiliates any Licensed Patents in connection with the making, having made and using of a Product for the limited purpose of: (i) using, selling, offering for sale, and importing Product for sale in Italy solely for the treatment of ALS on a Named Patient Basis only; provided that each of Tercica and GNE shall have the right to perform audits, either by itself or through its designee, on Insmed’s compliance with any laws, regulations and guidelines applicable to conducting such activities on a Named Patient Basis in addition to, and pursuant to the procedures described in, Section 7.8, and (ii) conducting a single non-pivotal clinical trial (i.e., such clinical trial cannot and shall not be used to support regulatory filing or application for Marketing Authorizations anywhere in the Territory), for the ALS indication in Italy, in connection with Insmed’s treating patients in Italy for the ALS indication on a Named Patient Basis. For the avoidance of doubt, and notwithstanding the payment of royalties solely to GNE pursuant to Section 7.1(a)(iii) based upon Insmed’s sales under this Section 3.1(d) and Tercica’s audit rights set forth in this Section 7.1(d), each of Tercica and GNE reserves the right to its respective interpretation of the GNE Licenses as to whether the scope of the GNE Licenses includes a grant of rights to the ALS indication by GNE to Tercica.

(e) Diabetes Restriction in the Other Territory. Insmed hereby covenants that, notwithstanding the license grant in Section 3.1(c), it will not market, sell, offer for sale or have sold a Product for Diabetes in the Other Territory to the extent the manufacture, use or sale of such Product would infringe, in the Other Territory and if not for the licenses granted under this Agreement, the patent rights licensed to Tercica and sublicensed to Insmed under the GNE Licenses.

(f) Included Subsidiary Rights. For avoidance of doubt, the above licenses and limited covenant-not-to-sue granted in Sections 3.1(a) through (d) relating to a Product include the right to make (and have made) IGF-1 and IGFBP-3, solely for use in the manufacture of Product, but such licenses do not include the right to use, sell, offer for sale or import either IGF-1 or IGFBP-3 separately.

3.2 Rights Granted to Tercica and GNE.

(a) Covenant not to Sue. Insmed hereby covenants that it shall not enforce, or permit or encourage the enforcement of, against Tercica, GNE or Ipsen, or any of their respective Affiliates, sublicensees, successors or assigns any Insmed Patents in connection with the development or commercialization of any Non-Permitted Product in the Territory, and in the event Insmed transfers any right under such Insmed Patents to a Third Party, Insmed shall ensure that such covenant not to sue is binding upon such Third Party in writing.

(b) License in the Event of an Opt-In. In the event Tercica and/or GNE exercises its Opt-In right with respect to a given Permitted Indication pursuant to Section 4.2 below, Insmed hereby grants such Opt-In Party a non-exclusive, worldwide license, with the right to grant sublicenses as provided in this Section 3.2(b), under the Insmed Patents to make, have made, use, sell, offer for sale and import Product for the Opt-In Indication as and to the extent permitted under this Agreement. Any sublicense by Tercica or GNE (or their assignees as permitted under Section 4.2(a)) under the rights granted in this Section 3.2(b) to a sublicensee other than a distributor, subcontractor or consultant in the normal course of business shall be made by Tercica or GNE only with the consent of Insmed, such consent not to be unreasonably withheld, provided however that sublicenses to Ipsen shall not require the consent of Insmed. In addition, Insmed agrees to execute all documents as may be reasonably required by Tercica or GNE or Ipsen or their authorized sublicensees for the purpose of recording any such sublicense(s) with any relevant regulatory or administrative authorities and in the event Insmed transfers any right in the affected Insmed Patents to a Third Party, Insmed shall ensure that such Third Party is bound, in writing, by the obligation set forth in this sentence.

3.3 GNE Licenses. The Parties acknowledge that the license granted to Insmed under Section 3.1 above constitutes a sublicense with respect to the GNE Patents under the licenses granted to Tercica by GNE under the GNE Licenses. As a result, the licenses granted under Section 3.1 above, and the terms and conditions of this Agreement, shall be subject to the terms and conditions of the GNE Licenses. GNE hereby agrees to the granting of such sublicense to Insmed by Tercica as set forth in Section 3.1. Nothing in this Agreement shall be construed as: (a) the expansion or reduction of the scope of licenses Tercica received from GNE under the GNE Licenses; or (b) implying whether or not the license granted to Tercica under the GNE Agreements includes the ALS indication.

3.4 No Implied Licenses. Except as explicitly set forth in this Agreement, no Party grants any license, express or implied, under its intellectual property rights to any other Party. Each Party covenants that it will not use or practice any other Party’s intellectual property rights licensed to it under this Agreement except for the purposes expressly permitted in the applicable license grant.

3.5 Insmed Covenants. In light of the Lawsuit and the Damages awarded therein, and in consideration of the licenses granted by Tercica and GNE to Insmed in Section 3.1, Insmed hereby covenants the following (which covenants shall be in addition to those set forth in the Permanent Injunction):

(a) Insmed shall not, and shall cause its Affiliates and Sublicensees to not, directly or indirectly: (i) conduct clinical trials for or otherwise seek any Marketing Authorization for, promote, market, or knowingly sell or offer for sale a Product for the treatment of any Non-Permitted Indication in any country in the Other Territory except as expressly permitted under Section 3.1(b) above with respect to the Named Patient Indications on a Named Patient Basis and Section 3.1(d) above with respect to the ALS indication on a Named Patient Basis, for so long as (A) any such clinical trial or Marketing Authorization uses or depends on the supply of such Product manufactured in a country in which such manufacture is covered by any unexpired Licensed Patents in such country, (B) any such promotion, marketing, sale or offer for sale of such Product depends on the supply of such Product manufactured in a country in which such manufacture is covered by any unexpired Licensed Patents in such country, or (C) any such promotion, marketing, sale or offer for sale of such Product arises from or depends on the use, sale, offer for sale, or importation of such Product in a country in which such use, sale, offer for sale, or importation is covered by any unexpired Licensed Patents in such country. For purposes of determining the duration of such covenant in countries in the Other Territory where a Product is sold which is manufactured in the United States, the last to expire Licensed Patents with respect to such countries shall include U.S. Patent No. 6,331,414 to the extent such patent covers the manufacture of the Product sold (or any components thereof).

(b) Within fifteen (15) business days after the Effective Date, Insmed shall withdraw, or cause to be withdrawn, all currently pending applications for Marketing Authorization in the Other Territory, including specifically its currently pending application for Marketing Authorization with the EMEA for a Product for the treatment of primary IGF-1 deficiency and patients with growth hormone gene deletion.

(c) Insmed shall not apply for or submit an application with the EMEA or any other governmental authority within the European Union or anywhere else in the Other Territory for Marketing Authorization of a Product for any of the Non-Permitted Indications; provided, however, that for any such Marketing Authorization the foregoing covenant shall terminate upon the expiration of the last to expire Licensed Patents (i) that exists in a country in the European Union or the Other Territory and that covers the manufacture, use, sale, offer for sale, or importation of such Product to be performed under the license of the Marketing Authorization, or (ii) that exists in a country in the Territory and that covers the process by which such Product is manufactured in such country for subsequent use, sale, offer for sale, or importation in the European Union or other country in the Other Territory under the license of the Marketing Authorization.

(d) If Insmed or its Affiliates or Sublicensees challenge(s) the validity or enforceability of the Licensed Patents anywhere in the Territory, then either Tercica or GNE shall have the right to terminate the licenses granted to Insmed under Section 3.1 of this Agreement pursuant to Section 12.3(a)(i) below.

3.6 Non-Disparagement. Insmed, Tercica and GNE each shall not defame, libel, slander or otherwise disparage in any manner, or tortiously interfere with the business, contracts, relationships or prospective economic advantage appurtenant to: (a) the market opportunity for any product (e.g., the size of the market for severe Primary IGFD); or (b) any product of the other Parties.

ARTICLE 4

DEVELOPMENT AND OPT-IN RIGHTS

4.1 Development of Product Prior to Opt-In. Unless and until Tercica or GNE exercises its Opt-In right under Section 4.2 below, Insmed shall have the sole responsibility for the development of a Product for use in a given Permitted Indication. As between the Parties to this Agreement, Insmed shall bear all Development Costs incurred with respect to a Product for all Permitted Indications prior to the Opt-in Effective Date, subject to the Opt-In Party’s reimbursement of a portion of such Development Costs pursuant to Section 4.2(e) below.

4.2 GNE and Tercica’s Opt-In Right for Permitted Indications.

(a) General. Tercica and GNE shall each have the option to co-develop a Product for any particular Permitted Indication at any time during the period when such Product is being developed clinically for such Permitted Indication, until the end of the Opt-In Period for such Permitted Indication. Such co-development right, once exercised, allows Tercica or GNE as the Opt-In Party to fund 50% (such percentage, the “ Percentage Interest ”) of the Development Costs for a Product for such Permitted Indication and participate in a corresponding 50% portion of the Operating Profit (Loss) resulting from the commercialization of such Product for such Permitted Indication, participate in development decision-making, and participate in commercialization, all as and to the extent set forth below and in Article 5 (the “ Opt-In ”). It is understood and agreed that Insmed shall not enter into any agreement with a Third Party to develop or commercialize a Product for any Permitted Indication prior to the expiration of the Opt-In Period for such Permitted Indication. It is further understood and agreed that Tercica shall have the right to assign to Ipsen its Opt-In rights and obligations with respect to the ROW Territory or certain country(ies) within such ROW Territory, as well as its Co-Promotion Option and Sole Promotion Option, on a Permitted Indication-by-Permitted Indication basis, in which case reference to “Tercica” as used in this Section 4.2 and in Sections 4.3 and 4.4, and in Article 5, shall also include Ipsen. It is also further understood and agreed that GNE shall have the right to assign to a Third Party designee its Opt-In rights and obligations with respect to the ROW Territory or certain country(ies) within such ROW Territory, as well as its Co-Promotion Option and Sole Promotion Option, on a Permitted Indication-by-Permitted Indication basis, subject to Insmed’s consent, not to be unreasonably withheld, in which case reference to “GNE” as used in this Section 4.2 and in Sections 4.3 and 4.4, and in Article 5, shall also include such Third Party designee.

(b) Opt-In Period; Effectiveness. Tercica’s and GNE’s Opt-In rights shall commence, on a Permitted Indication by Permitted Indication basis, at the commencement of the first human clinical trials of a Product for such Permitted Indication, and shall terminate on the earlier of: (i) exercise by Tercica or GNE of such Opt-In, or (ii) 91 days after the Triggering Delivery for such

Permitted Indication without exercise by either GNE or Tercica of its Opt-In rights (the “ Opt-In Period ” for such Permitted Indication), as described in more detail in this Section 4.2. For the avoidance of doubt, Tercica and GNE may exercise their respective Opt-In rights at any time during the Opt-In Period in accordance with this Section 4.2 by providing written notice to Insmed of the same (such notice, the “ Opt-In Exercise Notice ”). Insmed shall promptly submit a written confirmation to the Party whose Opt-In Exercise Notice has been received (unless otherwise properly rejected as not being properly submitted by the potential Opt-In Party pursuant to this Section 4.2), along with an invoice detailing the amount of the Opt-In Payment due Insmed. Such Opt-In shall become effective upon receipt by Insmed of such Opt-In Payment (the “Opt-In Effective Date” ). At the Opt-In Effective Date, the Party having submitted such Opt-In Exercise Notice shall thereupon become an “ Opt-In Party ” and such Permitted Indication shall become an “ Opt-In Indication .”

(c) Opt-In Information; Triggering Delivery. On a regular basis but no less frequently than once per calendar quarter, Insmed shall provide to Tercica and GNE a written progress report setting forth, for each Permitted Indication then undergoing development and as to which the Opt-In rights have not been exercised or lapsed: (i) a summary of all clinical trials planned and actually conducted, as well as all results thereof, for a Product for treatment of each such Permitted Indication; (ii) all Opt-In Information that has not been previously disclosed to either Tercica or GNE as of such time; and (iii) a summary of all Development Costs incurred as of such time with respect to such Permitted Indication. In particular, and notwithstanding such quarterly reporting obligation, Insmed shall, within sixty (60) days after the Completion of the first Phase III Enabling Trial for a Product for such Permitted Indication, deliver to Tercica and GNE all Opt-In Information relating to such trial and any other Opt-In Information that has not been previously disclosed to either Tercica or GNE, as well as a summary of all Development Costs incurred as of such time with respect to such Permitted Indication (this delivery of such Opt-in Information and Development Cost information is the “Triggering Delivery”). Tercica and GNE shall use the Opt-In Information solely for the purpose of evaluating the Opt-In opportunity and such Opt-In Information and shall not disclose any non-public portion of such Opt-In Information to any Third Party without the prior written consent of Insmed. Following delivery of any such Opt-in Information and Development Cost information, Insmed shall promptly supply any additional information or respond to any questions as requested by GNE or Tercica based upon its review of such information. Upon the expiration of the Opt-In Period, each of GNE and Tercica shall return such Opt-In Information to Insmed if such Party has not exercised its Opt-In right under this Section 4.2.

(d) Opt-In Rights and Procedures.

(i) During the Opt-In Period, Tercica shall have the first right to exercise the Opt-In right throughout the Territory with respect to any Orphan Indication that is not a Diabetes Orphan Indication. In the event Tercica does not so exercise such right within sixty (60) days of the Triggering Delivery, it shall notify Insmed and GNE in writing. Upon receipt of such written notice, GNE shall have an additional period of thirty (30) days following the date of such notice by Tercica to elect to exercise the Opt-In right with respect to such Orphan Indication. For avoidance of doubt, this Opt-In right shall expire upon the first to occur of the exercise of the Opt-In Right, or ninety one (91) days after the Triggering Delivery.

(ii) During the Opt-In Period, GNE shall have the first right to exercise the Opt-In right with respect to (1) any Non-Orphan Indications throughout the Territory and (2) any Diabetes Orphan Indication in the United States. In the event GNE does not so exercise such right within sixty (60) days of the Triggering Delivery, it shall notify Insmed and Tercica in writing. Whereupon Tercica shall have an additional period of thirty (30) days following the date of such notice by GNE to elect to exercise the Opt-In right with respect to such Non-Orphan Indication or such Diabetes Orphan Indication. For avoidance of doubt, this Opt-In right shall expire upon the first to occur of the exercise of the Opt-In Right, or ninety one (91) days after the Triggering Delivery.

(iii) If either Tercica or GNE provides Insmed with the Opt-In Exercise Notice within the Opt-In Period, then Insmed shall enter into a co-development and, where such Opt-in Party so elects under Section 5.2, co-commercialization relationship with the Party providing Insmed with such notice, on the terms set forth in this Article 4 and in Article 5.

(e) Opt-In Payment; Accounting of Development Costs. The “ Opt-In Payment ” for a Product for a particular Permitted Indication shall be an amount equal to fifty percent (50%) of the total Development Costs allocable to the development of such Product for such Permitted Indication, and incurred as of the date of receipt of the Opt-In Exercise Notice for such Permitted Indication. Such Opt-In Payment shall be paid to Insmed in accordance with Section 4.2(b). All Development Costs incurred and allocable to any Permitted Indication as of the Effective Date will be provided, in writing, on a Permitted Indication-by-Permitted Indication basis, by Insmed to Tercica and GNE within thirty (30) days following the Effective Date. During the Term and prior to the expiration of the Opt-In Period, Insmed shall be responsible for maintaining a detailed account of all Development Costs expended for each Permitted Indication.

4.3 Consequences of Tercica or GNE’s Exercise of Opt-In. If Tercica or GNE exercises the Opt-In in accordance with Section 4.2, the following shall apply:

(a) Collaborative Development. Insmed and the Opt-In Party shall discuss, via the JDC, what if any operational matters in the development of a Product for such Opt-In Indication shall be the responsibility of the Opt-In Party.

(b) Ongoing Co-Funding of Development Costs. The Opt-In Party shall bear fifty percent (50%) of the total Development Costs incurred from the day after the date of receipt of the Opt-In Exercise Notice for such Permitted Indication and allocable to the development of a Product for such Opt-In Indication. The process for reconciling payment of such Development Costs in order to give effect to each Opt-In Party’s Percentage Interest shall be in accordance with Article 7 and Exhibit A .

(c) Decision-Making Control. The Opt-In Party may have the deciding vote with respect to decisions in the JDC regarding such Opt-In Indication, as provided in Section 6.2(d)(ii).

(d) Right for GNE to Develop and Commercialize Diabetes. In the event that GNE is the Opt-In Party and the Opt-In Indication is a Diabetes Orphan Indication (an “ Opt-In Diabetes Orphan Indication ”), at such time, if any, as GNE and Insmed using their respective scientific and business judgment disagree over whether the continued development of a Product for the Opt-In

Diabetes Orphan Indication is desirable (such that Insmed does not wish to continue development of such Product for the Opt-In Diabetes Orphan Indication), GNE may elect to take over the development of such Product for the Opt-In Diabetes Orphan Indication at the sole expense of GNE and, upon notice to Insmed of such election, the Permitted Indications shall be amended to exclude such Opt-In Diabetes Orphan Indication solely for the purposes of the rights granted to Insmed under Section 3.1(c), provided that:

(i) for all other purposes of this Agreement, including without limitation the licenses granted by Insmed to GNE as the Opt-In Party under Section 3.2(b), the Permitted Indications shall be deemed to include such Opt-In Diabetes Orphan Indication;

(ii) GNE shall become, if not already, the Booking Party for such Opt-In Diabetes Orphan Indication and shall have final decision making authority in the commercialization of such Product for such Opt-In Diabetes Orphan Indication in the United States; and

(iii) the profit-sharing arrangement applicable to such Opt-In Diabetes Orphan Indication shall continue only until the payments so received by Insmed from GNE equals the Development Costs incurred by Insmed for such Product for such Opt-In Diabetes Orphan Indication, and thereafter the profit share arrangement for such Opt-In Diabetes Orphan Indication shall terminate and GNE shall pay to Insmed royalties on the Net Sales for such Opt-In Diabetes Orphan Indication in the United States at a rate of [***]; provided that, such royalty payment obligation shall apply only in the event that the use, sale, offer for sale, or importation of such Product for use in the Opt-In Diabetes Orphan Indication would infringe the Insmed Patents, and such royalty payment obligation shall thereafter expire upon the later of (y) the expiration of the last to expire Insmed Patents existing in the United States that would be infringed by the use, sale, offer for sale, or importation of such Product for use in such Opt-In Diabetes Orphan Indication in the United States but for the license grant in Section 3.2(b), and (z) the expiration of the last to expire Insmed Patents existing in a country and that covers the actual method of manufacture or use of such Product (or component thereof) as practiced by Insmed in the manufacture of such Product in such country that is subsequently sold for use in such Opt-In Diabetes Orphan Indication in the United States.

(e) Ongoing Sharing of Profits and Losses. As further described in Section 7.2, Insmed and the Opt-In Party shall share Operating Profit (Loss) with respect to a given Opt-In Indication, based on the applicable Percentage Interest for such Opt-In Indication.

(f) Opt-In Party’s Product Commercialization Rights for Opt-In Indication. If either Tercica or GNE exercises the Opt-In right under this Section 4.2, such Party shall have the right, at its discretion, to exercise the Sole Promotion Option or the Co-Promotion Option for the respective Opt-In Indication pursuant to Section 5.2. In addition, following such exercise of the Opt-In right, Insmed shall have no right to seek, negotiate or enter into an agreement with, a Third Party partner for the co-development and/or co-commercialization of a Product.

4.4 Opt-Out Rights. An Opt-In Party for a particular Opt-In Indication shall have the right to discontinue its ongoing funding obligations for such Opt-In Indication either in total or on a region-by-region or country-by-country basis in the Territory (the term “region” means and includes each of the following: the North American Territory, the EU, and Japan) for such Opt-In Indication, for any or no reason, for a period of ten (10) business days after the completion of an ongoing clinical trial and the reporting of results from such clinical trial for a Product for the treatment of such Opt-In Indication (the “ Opt-Out ”). An Opt-In Party may exercise such Opt-Out right by providing written notice to Insmed stating the same. Effective thirty (30) days following notice of such Opt-Out: (a) such Party shall cease to be an Opt-In Party and the license granted under Section 3.2(b) for such Permitted Indication shall terminate, (b) such Party shall have no further obligation to co-fund the ongoing Development Costs of such Product for such Permitted Indication other than for non-cancelable out-of-pocket costs incurred or committed to as of the effective date of the Opt-Out for activities previously approved in accordance herewith, (c) such Party shall have no right to share in a portion of the Operating Profits (Loss) for such Product for such Permitted Indication, (d) such Permitted Indication shall cease to be an Opt-In Indication, (e) such Party shall no longer have the Sole Promotion Option or Co-Promotion Option with respect to such Permitted Indication, and (f) such Party shall nor longer have any decision making control or input with respect to the development or commercialization of such Product for such Permitted Indication. If Insmed continues the development and/or commercialization of such Product for such Permitted Indication thereafter, then such Opt-In Party, after exercising its Opt-Out right, shall receive a royalty on the Net Sales of a Product for treatment of such Permitted Indication as further described in Section 7.1(a)(ii). For clarity, if an Opt-In Party exercises the Opt-Out right, it shall not have any right to a refund or reimbursement of any payments it had made to co-fund the Development Costs for a Product for such Permitted Indication.

ARTICLE 5

COMMERCIALIZATION

5.1 Commercialization by Insmed. Insmed shall have the primary right and responsibility for commercializing a Product for a given Permitted Indication; provided, however, that if the Opt-In Party for a particular Opt-In Indication elects to exercise its Co-Promotion Option or Sole Promotion Option for such Opt-In Indication, then the Parties shall proceed as set forth in this Article 5 and the terms of the Co-Promotion Agreement (as defined in Section 5.3) or the terms of the Supply Agreement (as defined in Section 5.4) shall apply to the commercialization of such Product for the treatment of such Opt-In Indication.

5.2 Commercialization by an Opt-In Party. Subject to the proper exercise of the Opt-In right described in Section 4.2, Insmed hereby grants the Opt-In Party, for the corresponding Opt-In Indication: (a) an option to co-promote, worldwide, a Product with Insmed for the treatment of such Opt-In Indication (the “ Co-Promotion Option ”); and (b) an option to assume sole responsibility for the commercialization of a Product for the treatment of such Opt-In Indication (the “ Sole Promotion Option ”). It is further understood and agreed that Tercica shall have the right to assign to Ipsen such Co-Promotion Option or Sole Promotion Option with respect to the ROW Territory or certain country(ies) within such ROW Territory, in which case the “Opt-In Party” as used in this Article 5 shall also include Ipsen. It is also further understood and agreed that GNE shall have the right to assign to a Third Party

designee such Co-Promotion Option or Sole Promotion Option with respect to the ROW Territory or certain country(ies) within such ROW Territory, in which case the “Opt-In Party” as used in this Article 5 shall also include such Third Party designee.

5.3 Opt-In Party’s Co-Promotion Option for Product for an Opt-In Indication.

(a) Exercise of Co-Promotion Option. The Opt-In Party may exercise the Co-Promotion Option as to an Opt-In Indication by providing written notice to Insmed within sixty (60) days following the JDC’s decision (as set forth in approved minutes of the JDC) to file the first application for Marketing Authorization for a Product for such Opt-In Indication in a given country. It is understood that such Co-Promotion Option shall be triggered with respect to the North American Territory and the ROW Territory independently, such that if, by way of example, the Opt-In Party does not exercise its Co-Promotion Option for the North American Territory (or part thereof), it may nonetheless exercise its Co-Promotion Option for the ROW Territory (or part thereof), provided such Opt-In Party has not exercised its right to Opt-Out of co-development for any such North American Territory or ROW Territory. If the Opt-In Party exercises the Co-Promotion Option, the Opt-In Party shall co-promote such Product for the treatment of such Opt-In Indication with Insmed, during the Co-Promotion Term pursuant to the terms of a Co-Promotion Agreement, as further described in Section 5.3(b) below. Co-promotion of Product for the treatment of such Opt-In Indication shall be overseen and coordinated by the JCC.

(b) Co-Promotion Agreement. Promptly following the Opt-In Party’s exercise of the Co-Promotion Option with respect to a particular Opt-In Indication in a region or country, the Opt-In Party and Insmed shall engage in good faith negotiations to prepare and execute a definitive co-promotion agreement describing the co-promotion activities of the Parties for promoting a Product for the treatment of such Opt-In Indication in such region or country (the “ Co-Promotion Agreement ”). The Co-Promotion Agreement will have the terms and conditions set forth in this Article 5 and in the term sheet attached to this Agreement as Exhibit E , as well as such other terms as the Opt-In Party and Insmed may agree. The Opt-In Party and Insmed will use reasonably diligent efforts to execute the Co-Promotion Agreement at least twelve (12) months prior to the anticipated receipt of Marketing Authorization for such Product for such Opt-In Indication as determined by the JCC (such date, the “ Launch Date ”) for the treatment of such Permitted Indication in the relevant jurisdiction. The “ Co-Promotion Term ” will commence upon execution of the Co-Promotion Agreement and will extend for so long as Insmed is selling a Product or the termination of this Agreement, whichever occurs first.

(c) Commercialization Plan. If the Opt-In Party exercises its Co-Promotion Option with respect to a particular Opt-In Indication, the strategy and tactics for the commercial launch of a Product for the Opt-In Indication shall be described in a comprehensive plan that describes the launch and subsequent co-promotion and related commercialization activities for such Product by the Opt-In Party and Insmed (including advertising, education, planning, marketing, sales force training and detail allocation) (the “ Commercialization Plan ”). The JCC shall prepare an initial draft of the Commercialization Plan within one (1) month after the filing of the first application for Marketing Authorization and shall approve a final Commercialization Plan at least six (6) months prior to the anticipated Launch Date for such Product for the treatment of such Opt-In Indication. The JCC shall update such Commercialization Plan as needed thereafter, but in any event annually.

5.4 The Opt-In Party’s Sole Promotion Option for Product for an Opt-In Indication.

(a) Exercise of Sole Promotion Option. The Opt-In Party may exercise the Sole Promotion Option for each of its Opt-In Indications by providing written notice to Insmed within sixty (60) days following the JDC’s decision (as set forth in approved minutes of the JDC) to file an application for Marketing Authorization for a Product for such Opt-In Indication in a given country. It is understood that such Sole Promotion Option shall be triggered with respect to the North American Territory and the ROW Territory independently, such that if, by way of example, the Opt-In Party does not exercise its Sole Promotion Option for the North American Territory (or part thereof), it may nonetheless exercise its Sole Promotion Option for the ROW Territory (or part thereof), provided such Opt-In Party has not exercised its right to Opt-Out of co-development for any such North American Territory or ROW Territory or part thereof. If the Opt-In Party exercises the Sole Promotion Option, the Opt-In Party shall thereafter have the sole right to market, promote, sell, and offer for sale such Product for the treatment of such Opt-In Indication, in the region or country(ies) as to which such option is exercised, including without limitation, the sole right to book all sales of such Product for such Opt-In Indication.

(b) Supply of Product by Insmed. Promptly following the Opt-In Party’s exercise of the Sole Promotion Option, the Opt-In Party and Insmed shall engage in good faith negotiations to prepare and execute a definitive supply agreement describing terms and conditions by which Insmed shall supply or cause to be supplied (by manufacturing itself or by procuring from a Third Party) commercial quantities of finished, filled, and packaged Product to the Opt-In Party for such Opt-In Indication, at a price equal to Insmed’s Fully Burdened Manufacturing Cost not to exceed $2,500/gram (such agreement, the “ Supply Agreement ”). The Supply Agreement will set forth the terms and conditions as the Opt-In Party and Insmed may agree and as are customary in an agreement of that type, including without limitation, any supply capacity constraints for a Product, forecasting and ordering, inspection and rejection provisions, and remedies in the event of supply default, including the ability of the Opt-In Party to make or have made a Product itself in such event. The Opt-In Party and Insmed will negotiate and execute the Supply Agreement at least twelve (12) months prior to the anticipated Launch Date of a Product for the treatment of such Opt-In Indication

(c) Trademark License . In the event Tercica and/or GNE exercises its Sole Promotion Option with respect to a given Opt-In Indication, Insmed hereby grants such Opt-In Party a non-exclusive, worldwide license, with the right to grant sublicenses as provided in this Section 5.4(c), to use the Trademark in connection with the marketing, promotion and sale of a Product for use in the Opt-In Indication. Any sublicense by Tercica or GNE under the rights granted in this Section 5.4(c) to a sublicensee other than Ipsen, or other than a distributor, subcontractor or consultant in the normal course of business, shall be made by Tercica or GNE only with the consent of Insmed, such consent not to be unreasonably withheld. It is expressly understood that the Opt-In Party exercising such Sole Promotion Option shall not be required to use the Trademark in connection with the marketing or sale of a Product for such Opt-In Indication, but shall have the right to re-brand such Product for such Opt-In Indication under a new trademark, in which event the Opt-In Party shall own all rights in and to such new trademark and all associated goodwill.

5.5 Sales Tracking. The Parties recognize that, subject to the licenses granted in Section 3.1, and in light of the Parties’ Opt-In rights with respect to given Permitted Indications, and Sole Promotion Option, a Product may be sold by Insmed for use in the treatment of one or more Permitted Indications as to which the Opt-In Party has exercised its rights, as well as Permitted Indications as to which no Opt-In rights have been exercised, as well as to patients on a Named Patient Basis as provided in Section 3.1(b), and to Existing Patients under Section 3.1(a), and may also be sold by either GNE or Tercica in the event of exercise of its Sole Promotion Option, for a given Opt-In Indication. In addition, Products marketed by Insmed (or its Sublicensee) or by GNE or Tercica (or their designee) in the future for an approved Permitted Indication may nonetheless be prescribed for use in the treatment of one or more indications which are other than such approved Permitted Indication (i.e., “Off Label Sales”). Given that different financial consideration is due and owing depending upon which of the foregoing situations is applicable (i.e., royalties vs. profit sharing), and in order to detect and account for such sales of Product in a manner most reflective of the Parties’ intent, the Parties agree as follows:

(a) Sales Tracking Methodology.

(i) Initial Methodology. Within one hundred eighty (180) days after the Effective Date, Tercica and Insmed shall meet and agree upon a method of tracking sales of Product for use in the treatment of each indication, in the country sold (a “ Sales Tracking Methodology ”) including (1) the use of data from Statements of Medical Necessity, or the acquisition of one or more forms of prescription data (including by way of example, IMS Xponent, NDCHealth Information Network, or Drug Distribution Data) or other relevant pharmaceutical sales tracking research services (including by way of example, audits of the corresponding statements of medical necessity, use of random sampling, use of data regarding distribution channels as a proxy for indication-specific sales or development of mathematical models for approximating indication-specific sales) generally recognized in the pharmaceutical industry as having a reasonable degree of accuracy and reliability in the tracking of sales of pharmaceutical products that have a similar nature as, and are prescribed by similar physicians as, a Product for the Named Patient Indications and Permitted Indications (the “ Data Services ”), and (2) the methodology for applying any such resulting data and information provided by such Data Services to determine the extent of sales in each country which are attributable to each such indication. It is expressly understood that sales of a Product for any Non-Permitted Indications are not anticipated except to the Existing Patients, and only for a period not to exceed twelve (12) months from the Effective Date, and any sales that are knowingly made to patients for use within a Non-Permitted Indication by Insmed or its Affiliates or Sublicensees and that are tracked to any Non-Permitted Indications after such twelve (12) month period (or to any patients who are other than Existing Patients within such twelve (12) month period) will be evidence of Insmed’s breach of its covenant in Section 3.5 and its license under Section 3.1(a).

(ii) Modifications to Methodology. The JCC may elect at any point to adopt a different or modified Sales Tracking Methodology, upon request of either Party. If the JCC fails to agree on a different Sales Tracking Methodology proposed by either Tercica or Insmed, the Sales Tracking Methodology then in effect shall continue to be used. Notwithstanding the foregoing, it is

understood and agreed by Tercica and Insmed that each shall have the right, at its own expense, to undertake such market research and analysis, including “probes” or sampling of patient data, physician prescribing habits and the like (the “ New Sales Tracking Data ”) or otherwise propose modifications to the Sales Tracking Methodology at any time during the Term, and to present such data or otherwise propose modifications to the Sales Tracking Methodology to the JCC to enhance the validity or reliability of the Sales Tracking Methodology. It shall be the JCC’s continuing obligation to review any such New Sales Tracking Data in good faith, with the overriding obligation to ensure fair and accurate compensation to the Parties (as applicable) under this Agreement by tracking as accurately as reasonably possible, purchases of a Product for use in specific indications. In the event that the JCC adopts a new Sales Tracking Methodology that incorporates New Sales Tracking Data proposed by a Party, the costs of such new Sales Tracking Methodology shall be allocated between Tercica and Insmed as provided in Section 5.5(c).

(b) Implementation by Insmed. Promptly following the selection and adoption by the JCC of the Sales Tracking Methodology (and any new Sales Tracking Methodology as applicable), Insmed hereby agrees to implement such Sales Tracking Methodology with respect to Insmed’s annual worldwide sales of Product.

(c) Costs. Insmed and Tercica shall share equally all costs incurred in implementing the Sales Tracking Methodology until such time as GNE exercises its first Opt-In right, in which event all such costs shall be shared equally between Insmed, Tercica and GNE.

(d) Dispute Resolution with Respect to Sales Tracking. Notwithstanding the dispute resolution mechanism set forth in Article 13 below, the Parties agree that all disputes relating to matters pertaining to sales tracking, including without limitation the methodology(ies) to be used or implementation thereof, shall be resolved as soon as practicable as follows: Any Party shall bring such dispute to the attention of the other Parties by providing the other Parties with a written notice stating such dispute, and the Parties shall use good faith efforts to resolve such dispute through the JCC within thirty (30) days after the receipt of such notice. If the JCC cannot reach resolution on such matter during such thirty (30)-day period, then the matter shall be referred to the Chief Commercial Officer or equivalent (or his/her designee who has decision-making authority) of the Parties for resolution. If such executives cannot reach resolution on such matter within ten (10) business days, then the Parties shall refer the matter to the Sales Tracking Panel (as defined below) for resolution, and the Sales Tracking Panel’s decision (which shall require the consent and agreement of 2 of the 3 panelists) on such matter shall be final and binding upon all Parties. Notwithstanding the foregoing, GNE may, at its option, recuse itself from such disputes with respect to sales tracking at any time by providing the other Parties with written notice stating such election. “Sales Tracking Panel” shall mean a panel of three experts, each of whom have experience in market research and intelligence gathering with respect to pharmaceutical products (e.g., former employees of IMS), and at least one of whom has experience in market research and drug distribution and prescribing information collection involving specialty pharmaceuticals. The Parties shall appoint such experts serving on the Sales Tracking Panel within thirty (30) days after the Effective Date through mutual agreement, and shall maintain the number of experts on such Sales Tracking Panel during the Term.

ARTICLE 6

GOVERNANCE

6.1 Overview. The Parties desire to establish certain committees to facilitate the sharing of information between the Parties and to coordinate the development and commercialization of a Product for the treatment of Permitted Indications (as applicable) and the implementation of the Sales Tracking Methodology. It is understood and acknowledged by each Party that, subject to Tercica’s and GNE’s opt-in rights in Section 4.2, Insmed will be primarily responsible for the development and commercialization of a Product strictly in accordance with the licenses granted by Tercica under Section 3.1.

6.2 Joint Development Committee.

(a) Formation; Composition. Within thirty (30) days after the Effective Date, the Parties shall establish a committee to oversee development of a Product and to serve as a forum for sharing information regarding such development between the Parties (the “ JDC ”). Tercica and Insmed each shall initially appoint three (3) representatives to the JDC, and GNE may initially appoint up to three (3) representatives to the JDC. Following any exercise of its Opt-In rights, GNE shall appoint or retain at least one (1) representative, but no more than three (3) representatives, to the JDC. The JDC may change its size from time to time by mutual consent of its members, provided that the JDC shall include at all times an equal number of representatives of each of Tercica, Insmed, and where GNE so elects, of GNE. Each Party may replace its JDC representatives at any time upon written notice to the other Party(ies). The JDC may invite non-members to participate in the discussions and meetings of the JDC, provided that such participants shall have no voting authority at the JDC. The JDC will be chaired by Insmed. The chairperson shall be responsible for administering JDC meetings, but shall have no additional powers or rights beyond those held by the other representatives of the JDC.

(b) Specific Responsibilities of the JDC. In addition to its general responsibilities, the JDC shall in particular:

(i) prior to an Opt-In Party’s exercise of the Opt-In in accordance with Section 4.2 and throughout the Opt-In Period, facilitate the flow of information from Insmed to Tercica and GNE with respect to the development of, and obtaining Marketing Authorization for, a Product for the treatment of any Permitted Indications;

(ii) prior to an Opt-In Party’s exercise of the Opt-In in accordance with Section 4.2 and throughout the Opt-In Period, determine, prior to the conduct of such trial, whether a proposed clinical trial for a Product satisfies the criteria of a Phase III Enabling Trial for the applicable Opt-In Indication; and

(iii) following an Opt-In Party’s exercise of the Opt-In in accordance with Section 4.2 for a particular Permitted Indication, coordinate and oversee the Parties’ development of a Product for the treatment of the applicable Opt-In Indication.

(c) Meetings. The JDC shall meet at least once per calendar quarter after the Effective Date unless the Parties mutually agree in writing to a different frequency. The JDC may meet in person, by videoconference, or by teleconference. The location of

in-person JDC meetings will be held at locations alternately selected by Tercica, Insmed, and GNE. Each Party shall report to the JDC on all material issues relating to the development of a Product promptly after such issues arise. Each Party will bear the expense of its respective JDC members’ participation in JDC meetings. Meetings of the JDC shall be effective only if at least one representative of each Party having incumbent member(s) of the JDC is present or participating in such meeting. The chairperson of the JDC shall be responsible for keeping reasonably detailed written minutes of all JDC meetings that reflect, without limitation, material decisions made at such meetings. Meeting minutes will be sent to each member of the JDC for review and approval within ten (10) business days after a meeting.

(d) Decision-Making. The JDC shall act by consensus. The representatives from each Party will have, collectively, one (1) vote on behalf of that Party. If the JDC cannot reach consensus on any issue that comes before the JDC, then:

(i) prior to Tercica’s or GNE’s exercise of the Opt-In in accordance with Section 4.2, Insmed shall have the deciding vote for all issues to be determined by the JDC; and

(ii) following the date when an Opt-In Party exercises its Opt-In rights, such Opt-In Party would have the deciding vote on all matters related to the Opt-In Indication before the JDC.

It is expressly understood and agreed that the control of decision-making authority by a Party so as to resolve a disagreement or deadlock at the JDC for any matter will not relieve such Party from any of its representations, warranties, or covenants in this Agreement, nor will it enable such Party to unilaterally modify or amend the terms of this Agreement.

6.3 Joint Commercialization Committee.

(a) Formation; Composition. Promptly following the Effective Date but in no event later than thirty (30) days after the Effective Date, the Parties shall form a committee to, in the first instance agree upon and approve the Sales Tracking Methodology, and, following exercise by an Opt-In Party of its Co-Promotion Option or Sole Promotion Option, coordinate and oversee the Parties’ respective commercialization activities with respect to a Product for the treatment of any Permitted Indications (the “ JCC ”). Tercica and Insmed each shall initially appoint two (2) representatives to the JCC, and GNE may initially appoint up to two (2) representatives to the JCC. Following any exercise of its Opt-In rights, GNE shall appoint at least one (1), but no more than two (2), representatives to JCC. The JCC may change its size from time to time by mutual consent of its members, provided that the JCC shall include at all times of an equal number of representatives of each of Tercica, Insmed, and where GNE so elects, of GNE. Each Party may replace its JCC representatives at any time upon written notice to the other Party(ies). The JCC may invite non-members to participate in the discussions and meetings of the JCC, provided that such participants shall have no voting authority at the JCC. The JCC will be chaired initially by Insmed. The chairperson shall be responsible for administering JCC meetings, but shall have no additional powers or rights beyond those held by the other representatives on the JCC.

(b) Meetings. The JCC shall meet at least twice per year after its formation pursuant to Section 6.3(a) unless the Parties mutually agree in writing to a different frequency. The JCC may meet in person, by videoconference, or by teleconference. The location of in-person JCC meetings will be held at locations alternately selected by Tercica, Insmed and GNE. Meetings of the JCC shall be effective only if at least one representative of each Party is present or participating in such meeting. Each Party shall report to the JCC on all material issues relating to the commercialization of Products promptly after such issues arise. Each Party will bear the expense of its respective JCC members’ participation in JCC meetings. The chairperson will be responsible for preparing reasonably detailed written minutes of JCC meetings that reflect, without limitation, material decisions made at such meetings. Such meeting minutes will be sent to each member of the JCC for review and approval within ten (10) business days after a meeting.

(c) Decision-Making. The JCC shall act by consensus. The representatives from each Party will have, collectively, one (1) vote on behalf of that Party. If the JCC cannot reach consensus on any issue that comes before the JCC, then:

(i) prior to the date when, and if, an Opt-In Party exercises its Sole Promotion Rights with respect to a particular Opt-In Indication pursuant to Section 5.4, and other than with respect to Sales Tracking Methodology matters, Insmed shall have the deciding vote for all issues to be determined by the JCC; and

(ii) following the date when an Opt-In Party exercises its Sole Promotion Rig

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