Document:

Exhibit 10.1

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

LICENSE AGREEMENT

 

dated March 26, 2003

 

by and between

 

Flamel Technologies, S.A.

 

and

 

SB Pharmco Puerto Rico Inc.

 

    	 

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

Table
of Contents

 

	 	 	 	 	Page	 
	 	 	 	 	 	 
	ARTICLE 1	 	DEFINITIONS	 	 	1	 
	 	 	 	 	 	 	 
	ARTICLE 2	 	LICENSE GRANTS	 	 	6	 
	 	 	 	 	 	 	 
	ARTICLE 3	 	PAYMENTS	 	 	6	 
	 	 	 	 	 	 	 
	ARTICLE 4	 	DEVELOPMENT, COMMERCIALIZATION AND SUPPLY	 	 	11	 
	 	 	 	 	 	 	 
	ARTICLE 5	 	INTELLECTUAL PROPERTY	 	 	13	 
	 	 	 	 	 	 	 
	ARTICLE 6	 	REPRESENTATIONS AND WARRANTIES	 	 	16	 
	 	 	 	 	 	 	 
	ARTICLE 7	 	CONFIDENTIALITY AND EXCHANGE OF INFORMATION	 	 	18	 
	 	 	 	 	 	 	 
	ARTICLE 8	 	INDEMNIFICATION	 	 	20	 
	 	 	 	 	 	 	 
	ARTICLE 9	 	TERM AND TERMINATION	 	 	22	 
	 	 	 	 	 	 	 
	ARTICLE 10	 	MISCELLANEOUS	 	 	24	 
	 	 	 	 	 	 	 
	SCHEDULE 1.14	 	FLAMEL PATENT RIGHTS	 	 	29	 
	 	 	 	 	 	 	 
	SCHEDULE 1.30	 	FLAMEL WORK PLAN	 	 	30	 
	 	 	 	 	 	 	 
	SCHEDULE 4.6	 	Existing Studies and Delivery of Clinical
    Supplies of Small Particle Micropump	 	 	37	 
	 	 	 	 	 	 	 
	SCHEDULE 4.7	 	Key Supply Terms	 	 	38	 
	 	 	 	 	 	 	 
	SCHEDULE 6.2	 	Exceptions To Representations And Warranties	 	 	41	 
	 	 	 	 	 	 	 
	SCHEDULE 7.3	 	Press Release	 	 	42	 
	 	 	 	 	 	 	 
	SCHEDULE 8.4	 	Flamel Insurance	 	 	44	 

 

    	-i-

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

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OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

LICENSE AGREEMENT

 

This License Agreement (the "Agreement"), dated March
26, 2003 is made by and between SB Pharmco Puerto Rico, Inc., a GlaxoSmithKline company organized and existing under the laws
of the territory of Puerto Rico, with its principal place of business at Road 172, KM 9.1/Bo. Certenejas, Cidra, Puerto Rico 00639
(hereinafter, "GSK") and Flamel Technologies, S.A., a corporation organized and existing under the laws of France,
with its principal place of business at Parc Club du Moulin a Vent, 33 Avenue du Docteur Georges Levy 69693 Venissieux Cedex,
France, (hereinafter, "Flamel") (each a "Party" and collectively, the "Parties").

 

R E C I T A L S

 

WHEREAS, Flamel has developed certain
proprietary technology related to Flamel Micropump Technology (as defined below);

 

WHEREAS, GSK and Flamel have undertaken
a feasibility study (the "Feasibility Agreement" as defined below) to develop a Formulation (as defined below) by applying
the Flamel Micropump Technology to Carvedilol (as defined below and referred to in the Feasibility Agreement the "Molecule");

 

WHEREAS, Flamel is the owner of
all right, title and interest in, or otherwise controls, certain Flamel Patent Rights (as defined below) and Flamel Know-How (as
defined below) relating to the use of the Flamel Micropump Technology;

 

WHEREAS, GSK desires to obtain from
Flamel an exclusive license under the Flamel Patent Rights and Flamel Know-How to discover, develop, make, have made, use, market,
offer to sell, sell and import the Product (as defined below); and

 

WHEREAS, Flamel desires to grant
to GSK, an exclusive license throughout the world under this Agreement to discover, develop, make, have made, use, market, sell,
offer to sell and import the Product throughout the world under the aforesaid Flamel Patent Rights and Flamel Know-How.

 

NOW, THEREFORE, in consideration
of the mutual covenants set forth in this Agreement, GSK and Flamel hereby agree as follows:

 

ARTICLE
1

DEFINITIONS

 

1.1.          "Affiliate"
means any legal entity (such as a corporation, partnership, or limited liability company) that directly or indirectly Controls,
is Controlled by or is under common Control with a Party to this Agreement. For the purposes of this definition, the term "Control"
means: (i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization
with voting securities (or such lesser percentage required under local jurisdiction); (ii) a fifty percent (50%) or greater interest
in the net assets or profits of a partnership or other business organization without voting securities; or (iii) the ability to
direct the affairs of any such entity.

 

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CONFIDENTIAL TREATMENT REQUESTED

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OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

1.2.          "Calendar
Quarter" means a three (3) month period ending on March 31, June 30, September 30 or December 31.

 

1.3.          "Carvedilol"
means (1-(9H-carbazol-4-yloxy)-[[2-2(2-methoxyphenoxy)ethyl] amino]-2-propanol), the compound that is known by the generic name
of Carvedilol and including all racemates, chelates, complexes, enantiomers, diastereoisomers, salts, bases, esters, hydrates,
solvates, polymorphs, crystal forms, crystal habits, prodrugs, isotopic or radiolabeled equivalents, metabolites, or the like,
thereof and all mixtures and any of the foregoing, and compositions comprising Carvedilol.

 

1.4.          "Confidential
Information" means (i) any proprietary or confidential information or material in tangible form disclosed by a Party
hereunder that is marked as "Confidential" at the time it is delivered to the receiving Party, and/or (ii) proprietary
or confidential information disclosed orally hereunder that is identified as confidential or proprietary when disclosed and such
disclosure of confidential information is confirmed in writing within a reasonable period of time thereafter by the disclosing
Party.

 

1.5.          "Control,"
"Controls," "Controlled," or "Controlling" means (except
with respect to "Affiliate" as defined in Section 1.1) possession of the ability to grant the licenses or sublicenses
as provided herein without violating the terms of any license agreement or other arrangement with any Third Party, or any government
regulation or statute.

 

1.6.          "Commercially
Reasonable Efforts" means efforts and resources comparable to those used by GSK and its Affiliates for a compound
or product with similar market or commercialization prospects at a similar stage in its product life cycle, taking into account
the stage and risk of development or commercialization of Product, the cost-effectiveness of efforts or resources while optimizing
profitability, the competitiveness of alternative compounds or products that are or are expected to be in the marketplace, the
scope and duration of patent rights or other proprietary rights related to Product, the profitability of Product and alternative
products and other relevant commercial factors.

 

1.7.          "Cost
Of Goods Sold" or "COGS" means Flamel's fully allocated cost of manufacturing, comprising
all direct costs (including but not limited to, labor, materials, energy, utilities, quality control or other costs incurred directly
in the manufacturing of Product that is the active pharmaceutical ingredient thereof) and indirect costs (including but not limited
to administrative labor costs, manufacturing facility and equipment maintenance, relevant insurance, and depreciation of manufacturing
equipment and manufacturing facilities) specifically allocable to the production and delivery of Product to GSK; such calculation
being based upon accepted contract manufacturing industry standards or generally accepted accounting principles.

 

1.8.          "EMEA"
means the European Agency for the Evaluation of Medicinal Products or any successor agency thereof performing similar functions.

 

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OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

1.9.          "Effective
Date" means the date on which this Agreement is executed.

 

1.10.        "FDA"
means the Food and Drug Administration of the United States Department of Health and Human Services, or any successor agency thereof
performing similar functions.

 

1.11.        "Feasibility
Agreement" means the Feasibility Study Agreement dated April 8, 2002 between SmithKline Beecham Corporation d/b/a
GlaxoSmithKline and Flamel Technologies, S.A., as amended.

 

1.12.        "First
Commercial Sale" means the first sale of Product to a Third Party by GSK or its Affiliate(s) or sublicensee(s) in
a country in the Territory.

 

1.13.        "Flamel
Micropump Technology" means a multiple-dose system containing a large number of microparticles that may be contained
in capsule, tablet, orally dispersible, sachet or suspension formulations. It is expected that the microparticles are released
in the stomach and pass into the small intestine, where each microparticle operates as a miniature delivery system, releasing
the drug at a controlled rate and over an extended period of time.

 

1.14.        "Flamel
Patent Rights" means: (i) all patents and patent applications in existence as of the Effective Date or during the
Term of this Agreement claiming generically or specifically a product or process using the Flamel Micropump Technology; and (ii)
any divisions, continuations, continuations-in-part, reissues, reexaminations, patents of additions, extensions or other governmental
actions that extend any of the subject matter of the patent applications or patents in clause (i) above, and any substitutions,
confirmations, registrations or revalidations of any of the foregoing, in each case that is owned or Controlled, in whole or part,
by license, assignment or otherwise by Flamel as of the Effective Date, or during the Term of the Agreement, to the extent Flamel
has the right to license or sublicense such Flamel Patent Rights, and subject to any limitations of any such license or sublicense.
The current list of patent applications and patents encompassed within Flamel Patent Rights is set forth in Schedule 1.14, which
shall be updated by Flamel on a semi-annual basis during the Term of the Agreement. For the avoidance of doubt, Flamel Patent
Rights shall include Flamel-Owned Inventions (as defined in Section 5.1.3).

 

1.15.        "Flamel
Know-How" means all ideas, non-public inventions, data, instructions, processes, procedures, formulas, expert opinions
and information, including, without limitation, biological, chemical, toxicological, pharmacological, physical and analytical,
formulation, clinical, analytical, stability, safety, manufacturing and quality control data and information, in each case, that
are necessary or useful for the development, testing, use, manufacture or sale of the Formulation or Product and that is in the
possession of and owned or Controlled by Flamel as of the Effective Date or during the Term of this Agreement. Flamel Know-How
shall include Flamel-Owned Inventions (as defined in Section 5.1.3), but only to the extent that such are not included in Flamel
Patent Rights. Flamel Know-How shall be Confidential Information of Flamel as defined in Section 1.4.

 

1.16.        "Formulation"
means any formulation of Carvedilol developed under the Feasibility Agreement.

 

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CONFIDENTIAL TREATMENT REQUESTED

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OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

1.17.        "Full-Time
Equivalent" or "FTE" means the effort equivalent to one (1) full-time employee of Flamel
working on a specific project or task assigned by GSK under this Agreement, who is qualified to perform such work, based on a
total of one thousand, eight hundred and eighty (1,880) hours of work per year, as further explained in Section 3.8 hereof.

 

1.18.        "Licensed
Technology" means Flamel Know-How and Flamel Patent Rights.

 

1.19.        "Joint
Development Committee" means the Joint Development Committee described in Section 4.5.

 

1.20.        "Major
Market" means any one of the following countries: the United Kingdom; France, Spain; Germany; Italy; Japan; or the
United States.

 

1.21.        "Marketing
Authorization Application" or "MAA" means a Marketing Authorization Application submitted
to the EMEA for the purpose of obtaining European Commission approval or any other applications for Registration based on mutual
recognition procedure by the Committee for Proprietary Medicinal Products ("CPMP") for the marketing of a Product for
the countries located within the EU.

 

1.22.        "Marketing
Approval" means the approval of an NDA in the US, the approval of an MAA in the EU, or any corresponding approvals
in any other countries of the Territory, including any pricing and reimbursement approvals in any country of the Territory where
such approvals are required for commercially reasonable launch of a Product in such country.

 

1.23.        "New
Drug Application" or "NDA" means a means a New Drug Application submitted to the FDA to obtain
FDA approval for the marketing of a Product in the United States.

 

1.24.        "Net
Sales" means the actual invoiced gross sales of Product to Third Parties by GSK, its Affiliates or sublicensees,
as recorded by the selling party in accordance with generally accepted accounting principals, less the following to the extent
included in the calculation of invoiced sales:

 

		(i)	credited allowances
                                         to such Third Party customers for spoiled, damaged, rejected, recalled, outdated and
                                         returned Products and for reasonable retroactive price reductions;

 

		(ii)	freight, transportation,
                                         warehousing, storage, postage and insurance invoiced to such Third Party;

 

		(iii)	the amounts of
                                         trade and cash discounts actually allowed, to the extent such trade and cash discounts
                                         are specifically allowed on account of the purchase of such Product;

 

		(iv)	sales taxes, excise
                                         taxes, use taxes and import/export duties actually due or incurred in connection with
                                         the sales of the Product to any Third Party;

 

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CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

		(v)	reasonable allowances,
                                         adjustments, reimbursements, discounts, chargebacks and rebates granted to Third Parties,
                                         including, but not limited to, rebates given to health care organizations or other Third
                                         Parties, whether during the actual royalty period or not;

 

		(vi)	any bona fide payment
                                         made by GSK to government agencies with respect to sales of Product in order to be allowed
                                         to tender the sale of the Product in a given country in the Territory, and any bona fide
                                         payment made by GSK to any Third Parties for assistance provided to GSK in this process;
                                         and

 

		(vii)	actual chargeoffs
                                         for bad debt.

 

Sales or transfers of Product among GSK, an Affiliate and/or
a sublicensee shall be excluded from the computation of Net Sales, and no royalties will be payable on such sales.

 

1.25.         "Product"
means any presentation or presentations of Carvedilol that incorporate the Licensed Technology, alone or in combination with other
therapeutically active compounds, for the therapeutic or prophylactic treatment of diseases and conditions in humans in any dosage
or strength.

 

1.26.         "Term"
means the term of this Agreement as set forth in Section 9.1.1.

 

1.27.         "Territory"
[***] provided that, should this Agreement expire as to any country or territory pursuant to Section 9.1, or should GSK terminate
this Agreement as to any country or territory pursuant to Section 9.4, such country or territory shall no longer be considered
within the Territory. As used in this Agreement, "country" shall refer to country or territory, as appropriate.

 

1.28.         "Third
Party(ies)" means any party(ies) other than Flamel, GSK, or an Affiliate of either of them.

 

1.29.         "Valid
Claim" means either: (i) a claim of an issued or unexpired patent within Flamel Patent Rights that has not been held
unenforceable, unpatentable or invalid by a governmental agency or a court of competent jurisdiction in any unappealable or unappealed
decision within the time allowed for appeal, and that has not been admitted to be unenforceable, unpatentable or invalid through
abandonment, reissue, disclaimer or otherwise, or (ii) a claim of a pending patent application within Flamel Patent Rights that
has not been abandoned or finally rejected by Flamel without the possibility of appeal or refiling, such that the claim at issue
has been under examination for less than three (3) years; provided, however, that such three (3) year time limit shall not apply
if Flamel has exercised diligence in pursuing such pending patent application.

 

1.30.         "Work
Plan" means the plan, as described in Sections 4.3 and 4.5, and as forth in Schedule 1.30 to this Agreement, attached
hereto and incorporated herein.

 

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CONFIDENTIAL TREATMENT REQUESTED

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OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE
2

LICENSE GRANTS

 

2.1.          Statement
of Ownership. The Parties agree that GSK owns the Formulation; provided, however, that such ownership shall not be construed
to grant GSK any ownership rights to the Licensed Technology.

 

2.2.          License
Grant from Flamel to GSK. Subject to the terms and conditions of this Agreement, Flamel hereby grants to GSK an exclusive
license, even as to Flamel, with the right to grant sublicenses, under Licensed Technology, to make, have made, use, sell, offer
for sale and import the Product in the Territory. Subject to the provisions of Article 3 hereof, such right shall expressly include
the right to sublicense all aspects of the development, manufacture and commercialization of the Product without further consent
or approval of Flamel.

 

2.3.          Exclusivity
Covenant. Subject to the terms and conditions of this Agreement, Flamel agrees that Flamel will not develop or grant rights
of any kind to any Third Party under the Licensed Technology related to Carvedilol.

 

ARTICLE
3

PAYMENTS

 

3.1.          Initial
Fee to Flamel. In partial consideration for the license to Licensed Technology granted to GSK under Section 2.1 of this
Agreement, GSK shall pay to [***] on or before March 31, 2003.

 

3.2.          Milestone
Payments to Flamel. In partial consideration for the license to Licensed Technology granted to GSK under Section 2.1 of
this Agreement, GSK shall pay Flamel the following amounts following the first achievement by Flamel, GSK, its Affiliates or sublicensees,
as applicable, as the case may be, of each of the following milestone events with respect to the Product ("Milestones"):

 

	 	 	Milestone Event	 	Amount
	 	 	 	 	 
	1.	 	[***]	 	[***]
	 	 	 	 	 
	2.	 	[***]	 	[***]
	 	 	 	 	 
	3.	 	[***]	 	[***]
	 	 	 	 	 
	4.	 	[***]	 	[***]
	 	 	 	 	 
	5.	 	[***]	 	[***]
	 	 	 	 	 
	6	 	[***]	 	[***]
	 	 	 	 	 
	7.	 	[***]	 	[***]

 

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CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

	 		Milestone Event	 	Amount
	 		 	 	 
	8.	 	[***]	 	[***]
	 	 	 	 	 
	9.	 	[***]	 	[***]
	 	 	 	 	 
	10.	 	[***]	 	[***]

 

provided that:

 

		(i)	No Milestone shall be paid more than one time;

 

		(ii)	Payment shall not be owed for a Milestone Event that
is not achieved;

 

		(iii)	The occurrence of all events leading to Milestones shall
be determined by criteria reasonably established by GSK and provided in writing by. GSK to Flamel;

 

		(iv)	Milestone payments shall be payable by GSK to Flamel
within forty-five (45) business days after achievement of the Milestone; and

 

		(v)	Milestone payments shall be payable when achieved, regardless
of the order in which they are achieved.

 

3.3.          Royalties.

 

(a)          Royalty
Rate. In partial consideration of the license and rights granted under Section 2.1, GSK shall pay royalties to Flamel
on Net Sales of all Products covered by a Valid Claim equal to (i) [***] of annual Net Sales of such Products up to and including
[***], (ii) [***] on annual Net Sales of such Products in excess of [***] and up to and including [***], and (iii) [***] on annual
Net Sales of such Products in excess of [***].

 

Example: In the event Net Sales of the Product equal [***],
GSK shall pay a royalty [***], calculated as follows: [***] multiplied by [***], plus [***] multiplied by [***], plus [***] multiplied
by [***].

 

(b)          Payment
of Royalties. Payment of royalties shall be made [***] days after the end of each Calendar Quarter on all Net
Sales of the Product in the preceding quarter ("Quarterly Payment"). Each Quarterly Payment shall be accompanied by
a report detailing the total Net Sales of the Product by country in the Territory for the preceding Calendar Quarter, GSK shall
include in the Quarterly Payment for the fourth Calendar Quarter of each calendar year any additional royalties owed for Net Sales
in the calendar year to which the last Calendar Quarter relates, based on the annual Net Sales. On or before the end of the first
Calendar Quarter following any calendar year, GSK shall reconcile the actual royalties paid to Flamel during the prior calendar
year against the amount of royalties that should have been paid to Flamel during that calendar year. In the event that GSK has
overpaid the royalties due Flamel, GSK shall be entitled to deduct such overpayment from the royalties determined to be due for
the first Calendar Quarter of the calendar year following the calendar year in which the overpayment was made or, if no royalties
are due for the first calendar year, in any subsequent Calendar Quarter in which royalties are due to Flamel. The Net Sales calculation
includes estimated sales adjustments for Medicare/Medicaid and Managed Care Rebates and chargebacks. Upon verification of actual
sales adjustments, actual Net Sales will be reconciled against the estimated Net Sales. Any necessary adjustments, whether in
the form of a credit or a debit, will be reflected in the next quarterly report due Flamel.

 

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CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

3.4.          Royalties
on Net Sales Where No Valid Claim of Flamel Patent Rights Exists. In the event that no royalty on certain Net Sales is
paid under Section 3.3 because no Valid Claim exists in a country, as further consideration for the licenses granted to GSK under
Section 2.2 of this Agreement, GSK shall pay to Flamel [***] of the otherwise applicable royalty rate set forth in Section
3.3 on such Net Sales in such country.

 

3.5.          Single
Royalty; Non-Royalty Sales. No royalty shall be payable under Section 3.3.1 above with respect to sales of the Product
among GSK, its Affiliates and sublicensees for resale to a Third Party. In no event shall more than one such royalty be due Flamel
hereunder with respect to the sale of Product, even if such Product is covered by more than one Valid Claim.

 

3.6.          Compulsory
Licenses. Should a compulsory license be granted by Flamel to a Third Party under the applicable laws of any country in
the Territory with respect to Product under the Licensed Technology licensed hereunder to GSK, the royalty rate payable hereunder
for sales of Products in such country will be adjusted to match any lower royalty rate granted to such Third Party for such country,
with respect to the sales of such Products, and during such periods, for which such Third Parties sell under the compulsory license
material quantities of articles that compete with the Products then marketed and sold by GSK in that country comprising the Product
identical to the compound contained in such articles.

 

3.7.          Third
Party Fees or Royalties.

 

(a)          Flamel
shall be fully responsible for obtaining a Third Party license and for the payment of any additional royalties, license fees,
milestones and any and all other payments due to Third Parties where:

 

		(i)	the use, development, manufacture, marketing, selling
or importing of Product under Licensed Technology is deemed by a court of competent jurisdiction to infringe a claim of a patent(s)
owned or controlled by a Third Party in any given country of the Territory and Flamel or GSK licenses such patent(s) in settlement
of such claims; and

 

		(ii)	both Parties agree, or it is determined by outside counsel
approved by both Parties, that it is necessary for Flamel to take a license to a Third Party and to pay royalties or other fees
to such Third Party to obtain a license to practice any Third Party's rights in order to manufacture, use, commercialize or develop
a Product under the Licensed Technology in any given country of the Territory.

 

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CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(b)          If
GSK and Flamel together have a reasonable belief that a Third Party may assert a claim or right against GSK or Flamel with respect
to the Licensed Technology that may result in an infringement claim being brought or asserted by such Third Party with respect
to the Licensed Technology, then in such event, GSK may, or may request Flamel to, obtain a license or other settlement with such
Third Party, and if GSK obtains such a license, GSK may offset the costs of such royalties or settlement amounts against payments
otherwise due Flamel. If Flamel obtains such a license, Flamel will bear all costs associated with such license. If GSK alone
has a reasonable belief that a Third Party may assert a claim or right against GSK or Flamel with respect to the Licensed Technology
that may result in an infringement claim being brought or asserted by such Third Party with respect to the Licensed Technology,
but Flamel does not share such belief, GSK may still obtain a license or other settlement with such Third Party at GSK's sole
expense and GSK shall be entitled to submit the matter to arbitration. If the arbitrator determines that the manufacture, use,
commercialization or development of Product under the Licensed Technology impinges upon the intellectual property rights of any
Third Party such that it is necessary for Flamel and/or GSK to pay royalties or other fees to such Third Party to obtain a license
to practice any Third Party's rights in order to manufacture, use, commercialize or develop a Product under the Licensed Technology
in any given country of the Territory, then GSK shall be entitled to offset one hundred percent (100%) of the costs of associated
with such license or settlement against payments otherwise due Flamel. For the avoidance of doubt, if GSK seeks a license to the
Third Party technology that is solely a gastro-retentive technology, then the costs of such license will be borne solely by GSK.

 

3.8.          Flamel
FTE Payments. As consideration for work conducted by Flamel FTE's as authorized by GSK, GSK shall pay Flamel per year
per Flamel FTE at a rate of [***] per hour, which rate shall increase each calendar year upon the anniversary date of the Effective
Date by a factor to be agreed between the Parties as reasonably reflecting the prevailing rate of inflation in France in the previous
calendar year but no greater than [***], and shall reimburse Flamel for all GSK pre-approved out-of-pocket costs and
expenses (including, but not limited to, reasonable travel and hotel costs) as authorized by GSK. GSK shall make payment to Flamel
on a quarterly basis for work conducted by Flamel and authorized by GSK within [***] days of receipt of an invoice from
Flamel. Each invoice shall describe in detail the work performed by Flamel FTE's and a breakdown of hours of work performed, as
is customary for the industry and the type of work being performed. All FTE's shall be deemed employees of Flamel and Flamel shall
be responsible for paying all FTE's salaries, benefits, and payroll (or similar) taxes. It is understood that Flamel shall keep
weekly records of the FTE costs which shall be sufficient for purposes of this Agreement.

 

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CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

3.9.          Right
to Offset. The Parties agree that in the event that any payment obligation on the part of Flamel to GSK under the terms
of this Agreement is not made by Flamel when such payment is due, then in such event and as long as such amount remains unpaid,
GSK shall be entitled to offset such unpaid amount against any amounts which may otherwise be due to Flamel from GSK. In the event
that GSK is required to pay a license payment in the form of a lump sum payment or an ongoing royalty stream to a Third Party
as part of a settlement of a patent infringement claim, suit or proceeding relating to the license granted under Section 2.2 of
this Agreement, or in the event that there has been an error in the calculation of 14TE costs or Cost of Goods Sold resulting
in an overpayment by GSK to Flamel for such FTE's or Product, GSK shall be entitled to offset such payment(s), or overpayment,
as the case may be, from the royalties due Flamel under this Agreement.

 

3.10.         Currencies.
Payments under this Agreement shall be made in United States Dollars. Revenues and expenses for each country shall be converted
into United States Dollars using the applicable exchange rate for converting such local currency to the United States Dollar in
accordance with the exchange rates reasonably used by GSK in producing its financial accounts at the time.

 

3.11.         Manner
of Payment. All sums due to Flamel under this Agreement shall be payable in US dollars by wire transfer in immediately
available funds to the designated account below in accordance with the following wire instructions, or such other account and
instructions as may from time to time be designated in writing by an officer of Flamel:

 

	Bank:	Citibank F.S.B.
	ABA Number:	254070116
	Account Name:	Flamel Technologies, S.A.
	Account Number:	6678 8404

 

GSK shall use its reasonable efforts to
notify Flamel as to the date and amount of any such wire transfer to Flamel at least two (2) business days prior to such transfer.

 

3.12.         Tax
Withholding. GSK may withhold taxes in the event that revenue authorities in any country require the withholding of taxes
on amounts paid hereunder to Flame. GSK will deduct such taxes from such payment and will be paid by GSK to the proper taxing
authority on behalf of Flamel. GSK will procure a tax receipt or provide such other proof of payment for any such withholding
evidencing payment of such taxes, which will be forwarded to Flamel. GSK agrees to assist Flamel in claiming exemption from such
deductions or withholdings under any applicable double taxation or similar agreement or treaty.

 

    	10

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

3.13.         Financial
Records and Audits.

 

(a)          Flamel's
Right to Audit. Flamel, at its own cost, through an independent auditor reasonably acceptable to GSK, may inspect and audit
the records of GSK pertaining to the sale of Product and any estimated or actual royalties due to Flamel under Section 3.3.
GSK shall provide such auditors with access to the records during reasonable business hours. Such access need not be given to
any such set of records more often than once each calendar year, or more than three (3) years after the date of any report to
be audited, and the auditors shall report to Flamel only the amount of royalty due, based on good faith estimates of Net
Sales. Flamel shall provide GSK with written notice of its election to inspect and audit the records related to the royalty
due hereunder not less than thirty (30) days prior to the proposed date of review of GSK's records by Flamel's auditors. GSK
shall maintain sufficient records to permit the inspection and auditing permitted hereunder for three (3) years after the
date of each respective reporting period. GSK shall prepare its records and reports according to the generally accepted
accounting principles of the United Kingdom. The auditor's review shall be limited to determining whether a good faith
estimate was used in the royalty calculation, and shall not be based upon whether such estimate was, in fact subsequently
determined to be less than the actual Net Sales. Should the auditor find any underpayment of royalties paid as a result of
such quarterly estimates not being conducted in good faith, GSK shall promptly pay Flamel the amount of such underpayment,
plus interest at the rate of [***] per month or portion thereof on the amount of any underpayment from the date payment was
due, and shall reimburse Flamel for the cost of the audit should such underpayment equal or exceed [***] of royalties paid
during the time period audited. Should the auditor find any underpayment of royalties based upon the reconciled annual Net
Sales, GSK shall promptly pay Flamel the amount of such underpayment, plus interest at the rate of [***] per month or portion
thereof on the amount of any underpayment from the date payment was due, and shall reimburse Flamel for the cost of the audit
should such underpayment equal or exceed [***] of royalties paid during the time period audited.

 

(b)          GSK's
Right to Audit. GSK, at its own cost, through an independent auditor reasonably acceptable to Flamel, may inspect and
audit the records of Flamel pertaining to 1i and manufacturing costs, including the calculation of Cost of Goods Sold. Flamel
shall provide such auditors with access to the records during reasonable business hours. Such access need not be given to any
such set of records more often than once each calendar year, or more than three (3) years after the Effective Date, and the auditors
shall report to GSK only as to whether an error was made in the calculation of FIE costs or Cost of Goods Sold. GSK shall provide
FLAMEL with written notice of its election to inspect and audit the records related to FTE costs and the Cost of Goods Sold calculation
not less than thirty (30) days prior to the proposed date of review of Flamel's records by GSK's auditors. Flamel shall maintain
sufficient records to permit the inspection and auditing permitted hereunder for three (3) years after the Effective Date. Should
the auditor find any error, GSK shall be entitled to offset such overpayment in accordance with Section 3.9.

 

ARTICLE
4

DEVELOPMENT, COMMERCIALIZATION AND SUPPLY

 

4.1.          Responsibility
for Product Development and Commercialization by GSK. GSK shall undertake and resource all development of Product in the
Territory so long as it retains full rights thereto under this Agreement, and shall bear all costs it incurs in conducting such
development, including, without limitation, expenses incurred in conducting clinical trials. GSK shall be responsible, at its
sole expense on a country-by-country basis, for the commercialization and distribution of the Product in the Territory so long
as GSK retains rights, on a country-by-country basis, thereto under this Agreement. Notwithstanding the first two sentences of
this Section 4.1, GSK has the sole discretion, using its reasonable business judgment, to decide whether to develop or commercialize
Product in any country in the Territory.

 

    	11

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

4.2.          Flamel
Technology Transfer. Within fifteen (15) days of GSK's request, Flamel shall use its commercially reasonable efforts to
promptly transfer, or cause to be transferred to GSK, a copy of Flamel Know-How relating to Flamel Micropump Technology, the Formulation
and the Product, to enable GSK to develop, manufacture and commercialize Product, at GSK's expense. Such technology shall include,
at a minimum, the information set forth in Schedule 1.30 to this Agreement, attached hereto and incorporated herein.

 

4.3.          Flamel
Assistance. From time to time, GSK may request Flamel's assistance in the development and commercialization, of the Formulation
or Product and Flamel shall perform such work as is reasonably requested by GSK in a written statement of work that shall include
an estimate of the costs of such work and authorized in writing by the JDC. GSK will compensate Flamel for such authorized work
performed in accordance with such statement of work pursuant to Section 3.8.

 

4.4.          Development
and Filing by GSK. GSK shall use Commercially Reasonable Efforts to file an NDA for a Product in the United States in
a timely manner, consistent with the development plan for the Product and taking into consideration the regulatory and commercial
climate and scientific and clinical requirements for the development of the Product. GSK shall keep Flamel apprised of its timings
for such filing and all progress via the JDC set forth in Section 4.5, including reasons for any changes to such filings. From
time to time, GSK may request Flamel's assistance in the preparation of the NDA and/or the MAA, and Flamel shall perform such
work as is reasonably requested by GSK. GSK will compensate Flamel for such work pursuant to Section 3.8.

 

4.5.          Joint
Development Committee. Promptly after the Effective Date, the Parties shall establish a Joint Development Committee ("JDC").
The JDC shall be chaired by GSK and GSK shall be responsible for the issuance of all meeting minutes. The JDC shall have the responsibility
to oversee, review, coordinate and expedite the transfer of technology and the development of Product and the progress of work
being conducted under the Work Plan, and to update the Work Plan from time to time. The JDC shall be comprised of three (3) GSK
representatives and three (3) Flamel representatives. The JDC shall meet quarterly, or as more or less often as otherwise agreed
by the Parties, at such locations as the Parties agree. Any decision that cannot be made unanimously by the JDC shall be discussed
by the appropriate representatives of the Parties; provided that, in the event of continued disagreement, or otherwise, GSK shall
make all final decisions regarding the conduct and progress of the development and commercialization of Product.

 

4.6.          Completion
of Existing Studies initiated by Flamel prior the Effective Date. The Parties acknowledge that Flamel is conducting additional
studies with respect to the Flamel Micropump Technology and Carvedilol. These studies are listed in Schedule 4.6. Flamel agrees
to complete these studies pursuant to the terms of the Feasibility Agreement and will provide such necessary quantities and doses
of clinical trial materials as listed on Schedule 4.6 of the "small particle micropump" to GSK.

 

    	12

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

4.7.          Supply.
Within ninety (90) days after the Effective Date, the Parties shall negotiate the terms of supply for Phase II clinical supply
of Product, and, if in GSK's reasonable judgement, GSK requires Flamel to supply a portion or all of GSK's requirements of the
Formulation or Product for Phase III and/or commercial supply, the Parties will negotiate the terms of such supply in a definitive
agreement (the "Supply Agreement"). The Supply Agreement will contain terms and conditions as are customary on the pharmaceutical
industry and shall include, but not be limited to terms covering the quality, specifications, yield, quantity, payment, batch
failure, change control, regulatory obligations and audits, audit rights for GSK consistent with rights granted herein, information
related to manufacture of Product and the Formulation, QA release, testing and shipping requirements. All supply of Product for
Phase II or Phase III clinical studies shall be at a price equal to [***]. All supply of Product for commercial sale shall be
at a price equal to [***]. Notwithstanding the foregoing, and irrespective of the audit provisions contained in the Supply Agreement,
GSK shall be entitled to conduct an audit of Flamel's manufacturing facilities prior to the implementation of the Supply Agreement
for the purpose of ascertaining the commercial readiness of Flamel to manufacture Product. Such audit shall occur upon advance
reasonable notice, in writing, delivered at least five (5) days' prior such audit and no more than once per annum.

 

ARTICLE
5

INTELLECTUAL PROPERTY

 

5.1.          Ownership
of Inventions.

 

5.1.1.          Inventions
under the Feasibility Agreement. Notwithstanding anything to the contrary herein, all inventions owned by GSK under the
Feasibility Agreement shall continue to be the exclusive property of GSK, and all inventions owned by Flamel under the Feasibility
Agreement shall continue to be the exclusive property of Flamel.

 

5.1.2.          GSK
Ownership. Flamel shall promptly disclose to GSK any inventions or improvements made or conceived by Flamel, or any person
under Flamel's supervision, either alone or jointly in the course of or as a result of the work under the Feasibility Agreement,
or hereunder that pertain to Carvedilol, the Formulation and/or Product (the "GSK-Owned Inventions). All inventions resulting
from the Feasibility Agreement or hereunder that relate to Carvedilol, the Formulation and/or Product shall be owned by GSK irrespective
of whether the inventor is an employee of Flamel or GSK or whether there are joint inventors, some of whom are employees of Flamel
and some of whom are employees of GSK. GSK shall have the right to file patent applications on any such GSK-Owned Inventions and
shall receive the cooperation of the employees of Flamel in preparing such patent applications.

 

5.1.3.          Flamel
Ownership. GSK shall promptly disclose to Flamel any inventions or improvements that pertain solely to the Flamel Micropump
Technology made or conceived by GSK, or any person under GSK's supervision, either alone or jointly in the course of or as a result
of work under the Feasibility Agreement or hereunder, or as a result of information supplied hereunder that pertain to the Flamel
Micropump Technology (the "Flamel-Owned Inventions"). All inventions resulting from the Feasibility Agreement or hereunder
relating solely to the Flamel Micropump Technology shall be owned by Flamel irrespective of whether the inventor is an employee
of Flamel or GSK or whether there are joint inventors, some whom are employees of Flamel and some of whom are employees of GSK.
Flamel shall have the right to file patent applications on any such Flamel-Owned Inventions and shall receive the cooperation
of the employees of GSK in preparing such patent applications.

 

    	13

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

5.2.          Disclosure
of Flamel Patent Rights. Flamel warrants and represents that it has disclosed, or promptly after the Effective Date hereof,
will disclose to GSK the complete texts of all Flamel Patent Rights including all patent applications filed by Flamel as of the
Effective Date that relate or may reasonably relate to the Formulation and/or Product. Flamel warrants and represents that it
has disclosed all information received as of the Effective Date concerning the institution or possible institution of any interference,
opposition, re-examination, reissue, revocation, nullification or any official proceeding involving a Flamel Patent Right anywhere
in the Territory. Flamel further warrants and represents that it will disclose to GSK the complete texts of all Flamel Patent
Rights, including all patent applications filed by Flamel after the Effective Date that relate, or may reasonably relate to the
Formulation and/or the Product as well as all information received after the Effective Date concerning the institution or possible
institution of any interference, opposition, re-examination, reissue, revocation, nullification or any official proceeding involving
a Flamel. Patent Right anywhere in the Territory. GSK shall have the right to review all such pending applications to the extent
that they may have a material impact on the Product and other proceedings and make recommendations to Flamel concerning them and
their conduct. Flamel agrees to keep GSK promptly and fully informed of the course of patent prosecution or other proceedings
by means that include providing GSK with copies of substantive communications, search reports and Third Party observations submitted
to or received from patent offices throughout the Territory. GSK shall provide such patent consultation to Flamel at no cost to
Flamel and shall treat all information disclosed to it under this Section as confidential and subject to the provisions of this
Agreement.

 

5.3.          Filing,
Prosecution, Maintenance. Each Party shall promptly notify the other on at least a quarterly basis, upon the making, conceiving
or reducing to practice of any intellectual property, invention or discovery referred to in Section 5.1. With respect to any such
invention:

 

(a)          GSK
shall have the first right, using in-house or outside legal counsel selected at GSK's sole discretion, to prepare, file, prosecute,
maintain and extend patent applications and patents concerning all such GSK Owned Inventions in countries of GSK's choice throughout
the Territory, for which GSK shall bear the costs relating to such activities which occur at GSK's request or direction. GSK shall
solicit Flamel's advice and review of the nature and text of any such patent applications to the extent such are related to the
Flamel Micropump Technology and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof,
and GSK shall take into account Flamel's reasonable comments related thereto.

 

(b)          Flamel
shall have the first right, using in-house or outside legal counsel selected at Flamel's sole discretion, to prepare, file, prosecute,
maintain and extend patent applications and patents concerning all such Flamel Owned Inventions in countries of Flamel's choice
throughout the Territory, for which Flamel shall bear the costs. Flamel shall solicit GSK's advice and review of the nature and
text of such patent applications to the extent such are related to the Product or the Formulation and important prosecution matters
related thereto in reasonably sufficient time prior to filing thereof, and Flamel shall take into account GSK's reasonable comments
related thereto.

 

    	14

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(c)          If
Flamel, prior or subsequent to filing patent applications on any Flamel Patent Rights that are owned in whole by Flamel and are
necessary or reasonably related to the Formulation and/or the Product and Flamel elects not to file, prosecute or maintain such
patent applications or ensuing patents or claims encompassed by such patent applications or ensuing patents in any country of
the Territory, Flamel shall give GSK notice thereof within a reasonable period prior to allowing such patent applications or patents
or such claims encompassed by such patent applications or patents to lapse or become abandoned or unenforceable, and GSK shall
thereafter have the right, at its sole expense and for Flamel's benefit, to prepare, file, prosecute and maintain patent applications
and patents or divisional applications related to such claims encompassed by such patent applications or patents concerning all
such inventions and discoveries in countries of its choice throughout the world.

 

(d)          Each
of Flamel and GSK shall hold all information it presently knows or acquires under this Section that is related to all such patents
and patent applications as confidential and subject to the provisions of Article 7 of this Agreement.

 

(e)          Each
Party shall cooperate with the other as reasonably requested to effect the provisions of this Section 5.3.

 

5.4.          Flamel
Patent Rights. In the event that a Party learns that any Flamel Patent Rights necessary for the development, manufacture,
use and/or sale of a Product are infringed or misappropriated by activities by a Third Party in any country in the Territory relating
to Product, or are subject to a declaratory judgment action arising from such infringement in such country, such Party shall promptly
notify the other Party hereto. GSK shall have the initial right (but not the obligation) to enforce such Flamel Patent Rights,
or defend any declaratory judgment action with respect thereto, at its expense, and to use Flamel's name in connection therewith;
provided that such use without Flamel's written consent may only occur where required by law for GSK to bring such action. In
the event that GSK fails to initiate a suit to enforce such Flamel Patent Rights against such a Third Party in any jurisdiction
in the Territory within ninety (90) days after notification of such infringement, Flamel may initiate such suit in the name of
the Flamel with regard to the applicable Flamel Patent Rights against such infringement, at the expense of Flamel, and to use
GSK's name in connection therewith. The Party involved in any such claim, suit or proceeding (the "Enforcing Party"),
shall keep the other Party hereto reasonably informed of the progress of any such claim, suit or proceeding. Flamel and GSK shall
recover their respective actual out-of-pocket expenses, or equitable proportions thereof, associated with any litigation or settlement
thereof from any recovery made by any Party. Any excess amount shall be distributed between the Enforcing Party and the other
party in the ratio equivalent to the profit GSK derives from Product in the Territory relative to the royalty Flamel derives from
Product in the Territory, with the Enforcing Party receiving the larger proportion of the excess amount.

 

    	15

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

5.5.          Infringement
Claims. If the manufacture, sale or use of Product in the Territory pursuant to this Agreement results in any claim, suit
or proceeding alleging patent infringement against Flamel or GSK, such Party shall promptly notify the other Party hereto. If
GSK is not named as a Party in such a claim, suit or proceeding, GSK may, at its own expense and through counsel of its own choice,
seek leave to intervene in such claim, suit or proceeding. Flamel agrees not to oppose such intervention. If GSK, and not Flamel,
is named as a Party to such claim, suit or proceeding, GSK shall have the right to control the defense and settlement of such
claim, suit or proceeding, at its own expense, using counsel of its own choice, however Flamel, at its own expense and through
counsel of its own choice, may seek to intervene if the claim, suit or proceeding relates to the commercialization of the Product,
and in such event, GSK agrees not to oppose such intervention. If GSK is named as a Party and Flamel shall, at any time, tender
its defense to GSK, then GSK shall defend Flamel in such claim, suit or proceeding, at GSK's own expense and through counsel of
its own choice, and GSK shall control the defense and settlement of any such claim, suit or proceeding; provided, GSK shall not
enter into any agreement which (i) extends or purports to exercise GSK's rights under Licensed Technology beyond the rights granted
pursuant to this Agreement, (ii) makes any admission regarding (a) wrongdoing on the part of Flamel, or (b) the invalidity, unenforceability
or absence of infringement of any Flamel Patent Rights, without the prior written consent of Flamel, which consent shall not be
unreasonably withheld. The Parties shall cooperate with each other in connection with any such claim, suit or proceeding and shall
keep each other reasonably informed of all material developments in connection with any such claim, suit or proceeding. Nothing
in this Section 5.5 shall limit or modify the provisions of Article 8, which may apply to such infringement claims as discussed
herein.

 

5.6.          Litigation
Activities Update. The Parties shall keep one another informed of the status and of their respective activities regarding
any litigation or settlement thereof concerning Product; provided however that no settlement or consent judgment or other voluntary
final disposition of any suit defended or action brought by a Party pursuant to this Article 5 may be entered into without the
written consent of the other Party, which consent shall not be unreasonably withheld or delayed.

 

5.7.          Trademarks.
GSK, its Affiliates, and its sublicensees shall have the right to market Product under their own labels, tradenames, and trademark(s)
(collectively, the "GSK Marks") and GSK shall solely own such trademarks, labels and tradenames. GSK shall be responsible
for the selection of all GSK Marks that it employs in connection with Product in the Territory and shall own and control such
GSK Marks and retain ownership upon termination or expiration of this Agreement. GSK shall be responsible for filing, registering
and maintaining any GSK Marks throughout the Territory.

 

ARTICLE
6

REPRESENTATIONS AND WARRANTIES

 

6.1.          Flamel
Representations and Warranties. As of the Effective Date, Flamel represents and warrants to GSK that:

 

    	16

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(a)          Flamel
has full Control of the Licensed Technology to grant the rights and licenses granted under Section 2.2, and that Flamel otherwise
has the full right and authority to enter into this Agreement;

 

(b)          there
are no existing or threatened actions, suits or claims pending against Flame' with respect to the Licensed Technology;

 

(c)          there
are no existing or threatened actions, suits or claims pending against Flamel with respect to Flamel's right to enter into and
perform Flamel's obligations under this Agreement;

 

(d)          Flamel
has not granted, nor will Flamel grant during the Term of this Agreement, any right, license or interest in or to the Licensed
Technology that is in conflict with the rights or licenses granted under this Agreement, nor as of the Effective Date, has Flamel
encumbered any Flamel Know-How and/or Flamel Patent Rights;

 

(e)          to
the best of Flamel's knowledge, there is nothing in any Third Party agreement Flamel has entered into that in any way will limit
Flamel's ability to perform all of the obligations undertaken by Flamel hereunder, and that Flamel will not enter into any agreement
after the Effective Date under which Flamel would incur any such limitations;

 

(f)          Flamel
has no knowledge from which Flamel concludes that the Flamel Patent Rights are invalid or that their exercise would infringe patent
rights of Third Parties;

 

(g)          Flamel
has no knowledge from which Flamel concludes that the use of Flamel Know-How by GSK as contemplated by this Agreement would constitute
a misappropriation of a Third Party's trade secrets;

 

(h)          Flamel
has not intentionally omitted to furnish GSK with any information requested by GSK, nor intentionally concealed from GSK, any
information in its possession concerning the Licensed Technology or Product, or the transactions contemplated by this Agreement,
that would be material to GSK's decision to enter into this Agreement and to undertake the commitments and obligations set forth
herein;

 

(i)          Flamel
has not intentionally concealed from GSK the existence of any data or information concerning the Licensed Technology or the Product
that suggests that there may exist quality, toxicity, safety and/or efficacy concerns that may materially impair the utility and/or
safety of Product, or anticipated components thereof; and

 

(j)          to
the best of Flamel's knowledge, Flamel has obtained, and will continue to obtain, the assignment of all interests and all rights
of any and all Third Parties (including employees) which enable Flamel to grant the license under Section 2.2.

 

6.2.          GSK
Representations and Warranties. GSK represents and warrants to Flamel that, as of the Effective Date:

 

    	17

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(a)          GSK
has the full right and authority to enter into this Agreement;

 

(b)          there
are no existing or threatened actions, suits or claims pending against GSK with respect to GSK's right to enter into and perform
GSK's obligations under this Agreement, other than as set forth on Schedule 6.2 hereto;

 

(c)          to
the best of GSK's knowledge, there is nothing in any Third Party agreement GSK has entered into, other than as set forth on Schedule
6.2 hereto, that, in any way, will limit GSK's ability to perform all of the obligations undertaken by GSK hereunder; and

 

(d)          GSK
has not omitted to furnish Flamel with, nor intentionally concealed from Flamel, any information in its possession concerning
the transactions contemplated by this Agreement, which would be material to Flames decision to enter into this Agreement and to
undertake the commitments and obligations set forth herein.

 

6.3.          Disclaimer
of Warranties. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT OR MANDATED BY APPLICABLE LAW (WITHOUT THE RIGHT
TO WAIVE OR DISCLAIM), NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE PRODUCT, ANY TECHNOLOGY, GOODS,
SERVICES, RIGHTS, OR OTHER SUBJECT MA ITE,R OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF PERFORMANCE, MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR
A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

 

ARTICLE
7

CONFIDENTIALITY AND EXCHANGE OF INFORMATION

 

7.1.          Confidential
Information. Except as expressly provided herein, the Parties agree that, for the Term of this Agreement and for five
(5) years thereafter, the receiving Party shall keep completely confidential and shall not publish or otherwise disclose and shall
not use for any purpose except for the purposes contemplated by this Agreement any Confidential Information furnished to it by
the disclosing Party hereto pursuant to this Agreement, except that to the extent that it can be established by the receiving
Party by competent proof that such Confidential Information:

 

		(i)	was already known to the receiving Party, other than
under an obligation of confidentiality, at the time of disclosure;

 

		(ii)	was generally available to the public or otherwise part
of the public domain at the time of its disclosure to the receiving Party;

 

		(iii)	became generally available to the public or otherwise
part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of
this Agreement;

 

    	18

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

		(iv)	was independently developed by the receiving Party without
reference to any information or materials disclosed by the disclosing Party; or

 

		(v)	was subsequently disclosed to the receiving Party by
a person other than a Party without breach of any legal obligation to the disclosing Party.

 

7.2.          Permitted
Disclosures. Each Party hereto may disclose the other's Confidential Information to the extent such disclosure is reasonably
necessary in connection with the conduct of the development activities to be conducted hereunder, in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable governmental regulations or otherwise submitting
information to tax or other governmental authorities, conducting clinical trials, or making a permitted sublicense or otherwise
exercising its rights hereunder, provided that if a Party is required to make any such disclosure of another Party's Confidential
Information, other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the latter Party of
such disclosure and, save to the extent inappropriate in the case of patent applications, will use its best efforts to secure
confidential treatment of such information prior to its disclosure (whether through protective orders or otherwise).

 

7.3.          Public
Announcements. No public announcement or any other disclosure, including under a Confidentiality Disclosure Agreement,
to Third Parties concerning the existence of, terms, or subject matter or termination of this Agreement shall be made, either
directly or indirectly, by any Party to this Agreement, except as may be legally required or as may be required for recording
purposes, without first obtaining the written approval of the other Party and agreement upon the nature and text of such announcement
or disclosure; provided, however, that in the case of disclosures made by Flamel to a bona fide financial analyst for modeling
and valuation purposes under a confidentiality agreement, Flamel shall provide GSK advance written notice of such disclosure (as
set forth below), but shall not be obligated to obtain GSK's consent. The Party desiring to make any such public announcement
or other disclosure (including those which are legally required or may be required for recording purposes) shall inform the other
Party of the proposed announcement or disclosure in reasonably sufficient time prior to public release, which shall be at least
five (5) business days prior to release of such proposed announcement or disclosure, and shall provide the other Party with a
written copy thereof, in order to allow such other Party to comment upon such announcement or disclosure. Each Party agrees that
it shall cooperate fully with the other with respect to all disclosures regarding this Agreement to the Securities Exchange Commission
and any other governmental or regulatory agencies, including requests for confidential treatment of proprietary information of
either Party included in any such disclosure. Notwithstanding the foregoing, the Parties shall agree upon a press release to announce
the execution of this Agreement, substantially in the form attached hereto as Schedule 7.3. Thereafter, Flamel and GSK may each
disclose to Third Parties the information contained in such press release without the need for further approval by the other.

 

    	19

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

7.4.          Third
Party Publications. Nothing herein shall be construed to prevent GSK from disclosing any information received from Flamel
hereunder: (i) to a Third Party contract manufacturer of GSK, subject to the consent of Flamel, such consent not to be unreasonably
withheld; or (ii) to an Affiliate, sublicensee, distributor, Third Party research or clinical contractor, of GSK, without the
consent of Flamel, provided, that in all cases of disclosure under clause (i) or (ii) above, the party to whom such disclosure
is made shall have undertaken a similar obligation of confidentiality with respect to the Confidential Information. Neither Party
shall submit for written or oral publication any manuscript, abstract or the like which includes data or other information pertaining
to Product or Formulation without first obtaining the prior written consent of the other Party, which consent shall not be unreasonably
withheld, and shall be given or refused no later than thirty (30) days from the date of receipt by the reviewing Party.

 

7.5.          Bankruptcy.
All Confidential Information disclosed by one Party to the other shall remain the intellectual property of the disclosing Party.
In the event that a court or other legal or administrative tribunal, directly or through an appointed master, trustee or receiver,
assumes partial or complete control over the assets of a Party to this Agreement based on the insolvency or bankruptcy of such
Party, the bankrupt or insolvent Party shall promptly notify the court or other tribunal (i) that Confidential Information received
from the other Party under this Agreement remains the property of the other Party, and (ii) of the confidentiality obligations
under this Agreement. In addition, the bankrupt or insolvent party shall, to the extent permitted by law, take all steps necessary
or desirable to maintain the confidentiality of the other party's Confidential Information and to ensure that the court, other
tribunal or appointee maintains such information in confidence in accordance with the terms of this Agreement.

 

ARTICLE
8

INDEMNIFICATION

 

8.1.          Indemnification
of GSK. Flamel shall indemnify and hold harmless GSK and its Affiliates, and their respective directors, officers, employees,
agents and counsel, and the successors and assigns of the foregoing (the "GSK Indemnitees"), from and against any and
all liabilities, damages, losses, costs or expenses (including reasonable attorneys' and professional fees and other expenses
of litigation and/or arbitration) resulting from a claim, suit or proceeding brought by a Third Party against a GSK Indemnitee,
arising from or occurring as a result of: (i) the infringement of a Third Party's patent rights, trademarks or other intellectual
property rights by reason the grant of an exclusive license to GSK, or the manufacture by GSK, an Affiliate, or a Third Party,
or the use, sale, offer to sell, or importation by GSK in the Territory, in accordance with Article 2 of this Agreement; or (ii)
the development and/or manufacture of Product by Flamel or its Affiliates or sublicensees; or (iii) Flamel's material breach of
any representation or warranty set forth in Section 6.1.1, except, in each case, to the extent caused by the negligence or willful
misconduct of GSK or to the extent that GSK is obligated to indemnify Flamel under Section 8.2 below.

 

    	20

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

8.2.          Indemnification
of Flamel. GSK and its Affiliates shall indemnify and hold harmless Flamel and its Affiliates and their respective directors,
officers, employees, agents and counsel and the successors and assigns of the foregoing (the "Flamel Indemnitees"), from
and against any and all liabilities, damages, costs or expenses (including reasonable attorneys' and professional fees and other
expenses of litigation and/or arbitration) resulting from a claim, suit or proceeding brought by a Third Party against a Flamel
Indemnitee or a sublicensee, arising from or occurring as a result of: (i) the development, manufacture, marketing and/or commercialization
of Product by GSK or its Affiliates or sublicensee; or (iii) GSK's material breach of any representation or warranty set forth
in Section 6.1.2 except, in each case, to the extent caused by the negligence or willful misconduct of Flamel or to the extent
that Flamel is obligated to indemnify GSK under Section 8.1.

 

8.3.          Procedure.
A Party (the "Indemnitee") that intends to claim indemnification under this Article 8 shall promptly notify the other
Party (the "Indemnitor") in writing of any loss, claim, damage, liability or action in respect of which the Indemnitee
or any of its Affiliates, sublicensees or their directors, officers, employees, agents or counsel intend to claim such indemnification,
and the Indemnitor shall have the right to participate in, and, to the extent the Indemnitor so desires, to assume the defense
thereof with counsel mutually satisfactory to the Parties. The indemnity agreement in this Article 9 shall not apply to amounts
paid in settlement of any loss, claim, damage, liability or action if such settlement is made without the consent of the Indemnitor,
which consent shall not be withheld unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of
any liability to the Indemnitee under this Article 8. At the Indemnitor's request, the Indemnitee under this Article 8, and its
employees and agents, shall cooperate fully with the Indemnitor and its legal representatives in the investigation and defense
of any action, claim or liability covered by this indemnification and provide full information with respect thereto.

 

8.4.          Insurance
Provisions. Immediately upon the first administration of Product to a human in the Territory by GSK, its Affiliates or
its sublicensees, and for a period of five (5) years after the expiration of this Agreement or the earlier termination thereof,
Flamel shall obtain and/or maintain, respectively, at its sole cost and expense, product liability insurance in amounts set forth
on Schedule 8.4. Such product liability insurance shall insure against all liability, including personal injury, physical injury,
or property damage arising out of the manufacture, sale, distribution, or marketing of Product in the Territory attributable to
Flamel. Flamel shall provide written proof of the existence of such insurance to GSK upon request. Notwithstanding the foregoing,
Flamel may satisfy its obligations under this Section 8.4 through self-insurance to the same extent.

 

8.5.          Consequential
Damages. IN NO EVENT SHALL EITHER PARTY OR THEIR AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, TREBLE
OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER LEGAL THEORY; PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL
NOT LIMIT THE INDEMNIFICATION OBLIGATION OF SUCH PARTY UNDER THE PROVISIONS OF SECTIONS 8.1 AND 8.2 OF THIS ARTICLE 8 FOR SUCH
DAMAGES CLAIMED BY A THIRD PARTY AND NOTHING IN THIS SECTION 8.5 IS INTENDED TO LIMIT GSK'S PAYMENT OBLIGATIONS EXPRESSLY REQUIRED
UNDER ARTICLE 3.

 

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CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE
9

TERM
AND TERMINATION

 

9.1.          Term
and Termination by GSK.

 

9.1.1.          Term.
This Agreement shall commence on the Effective Date, and unless otherwise terminated pursuant to Section 9.2, 9.3 or
9.4, shall continue in full force and effect on a country by country basis until the later of: (1) ten (10) years from the
date of the First Commercial Sale of Product in such country, or (2) the expiration of the last to expire Flamel Patent Right
in such country.

 

9.1.2.          Royalty
Expiration. Upon expiration of GSK's royalty obligations under Section 9.1.1, GSK shall have a fully paid up, royalty free,
perpetual, irrevocable, non-exclusive, worldwide license, with the right to sublicense and GSK shall be free to make, have made,
use and sell Product and to use Flamel Know-How in the Territory, without further royalty payments or any other remuneration to
Flamel.

 

9.2.          Termination
for Material Breach. Either Party may terminate this Agreement in the event the other Party has materially breached or
defaulted in the performance of any of its obligations hereunder, and if such default is not corrected within [***] days
after receiving written notice from the other Party with respect to such default, such other Party shall have the right to terminate
this Agreement by giving written notice to the Party in default, provided the notice of termination is given within one (1) year
of when the Party giving notice knew of the default and prior to correction of the default; provided that the time period for providing
such notice of termination shall be extended for so long as the Parties are engaged in good faith negotiations to resolve the situation.

 

9.3.          Termination
for Insolvency; Retention of License. If voluntary or involuntary proceedings by or against a Party are instituted in bankruptcy
under any insolvency law, or a receiver or custodian is appointed for such Party, or proceedings are instituted by or against such
Party for corporate reorganization or the dissolution of such Party, which proceedings, if involuntary, shall not have been dismissed
within sixty (60) days after the date of filing, or if such Party makes an assignment for the benefit of creditors, or substantially
all of the assets of such Party are seized or attached and not released within sixty (60) days thereafter, the other Party may
immediately terminate this Agreement effective upon notice of such termination. Notwithstanding the bankruptcy of a Party, or the
impairment of performance by a Party of its obligations under this Agreement as a result of bankruptcy or insolvency of such Party,
and subject to such Party's rights to terminate this Agreement for reasons other than bankruptcy or insolvency as expressly provided
in this Agreement, the other Party shall be entitled to retain the licenses under the terms and conditions granted herein.

 

9.4.          Termination
for Convenience by GSK. GSK may terminate this Agreement in its sole discretion for any reason on a country-by-country
basis, or in its entirety, by giving Flamel at least ninety (90) days written notice thereof at any time.

 

    	22

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

9.5.          General
Effect of Termination.

 

9.5.1.          Accrued
Obligations. Termination of this Agreement for any reason shall not release any Party hereto from any liability that, at
the time of such termination, has already accrued to the other Party or that is attributable to a period prior to such termination,
nor preclude either Party from pursuing any rights and remedies it may have hereunder or at law or in equity that have accrued
or are based upon any event occurring prior to such termination.

 

9.5.2.          Return
of Materials. Upon any termination of this Agreement, GSK and Flamel shall promptly return to the other Party all materials
and tangible Confidential Information received from the other Party (except one copy of which may be retained by legal counsel
for archival purposes).

 

9.5.3.          Stock
on Hand. In the event this Agreement is terminated for any reason after commencement of commercial sales of Product by
GSK and/or its Affiliates and sublicensees, GSK and its Affiliates and sublicensees shall have the right to sell or otherwise dispose
of the stock of any Products then on hand for a period of six (6) months after the date of termination, subject to Article 3 and
the other applicable terms of this Agreement, including, but not limited to, royalty obligations.

 

9.5.4.          Licenses.
In the event of termination by GSK pursuant to Section 9.4 or termination by Flamel under Section 9.2 due to GSK's material breach,
the licenses granted to GSK under Section 2.1 shall terminate. In the event of termination by GSK pursuant to Section 9.2 due to
Flamel's material breach, all licenses granted by Flamel to GSK under Section 2.1 shall survive and continue in full force, and
GSK shall be obligated to continue to make payments under Article 3 to Flamel to the extent GSK continues to develop, use, market,
sell or import Product in the Territory.

 

9.5.5.          Survival
of Section 2.3. In the event of termination by GSK pursuant to Section 9.2, 9.3, or 9.4, the provisions of Section 2.3
shall survive and continue in full force.

 

9.6.          Bankruptcy
Provisions. All rights and distribution rights granted under or pursuant to the Agreement by Flamel to GSK are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(52) of the U.S. Bankruptcy Code. The Parties agree that GSK, as licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code, subject
to performance by GSK of its preexisting obligations under the Agreement. The Parties further agree that, in the event of the commencement
of a bankruptcy proceeding by or against Flamel under the U.S. Bankruptcy Code, GSK shall be entitled to a complete duplicate of
(or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, and same,
if not already in its possession, shall be promptly delivered to GSK (a) upon any such commencement of a bankruptcy proceeding
upon written request therefore by GSK, unless Flamel elects to continue to perform all of its obligations under this Agreement,
or (b) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of Flamel upon written request therefore
by GSK, provided, however, that upon Flamel's (or its successor's) written notification to GSK that it is again willing and able
to perform all of its obligations under this Agreement, Flamel shall promptly return all such tangible materials to GSK, but only
to the extent that Flamel does not require continued access to such materials to enable GSK to perform its obligations under this
Agreement.

 

    	23

    	 

    

  

CONFIDENTIAL TREATMENT
REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

9.7.          Survival.
Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8 (all to the extent owed or unpaid); 5.5 (with respect to infringements that occur during
the Term); 5.6 (as applied to any matters surviving under Section 5.5), 3.12, and 3.13 (for the time period provided therein);
and Sections 2.1, 2.3, 5.1, 5.7 and Articles 1, 6, 7, 8, 9 and 10 shall survive the expiration or termination of this Agreement
for any reason. In addition, any other provision required to interpret and enforce the Parties' rights and obligations under this
Agreement shall also survive, but only to the extent required for the observation and performance of the aforementioned surviving
portions of this Agreement.

 

ARTICLE
10

MISCELLANEOUS

 

10.1.          Governing
Law. This Agreement shall be deemed to have been made in the United States, and its form, execution, validity, construction
and effect shall be determined in accordance with, and any dispute arising from the performance or breach hereof shall be governed
by and construed in accordance with, the laws of the State of New York, without reference to conflicts of laws principles.

 

10.2.          Waiver.
Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party
to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver
of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition
or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of another
condition or term

 

10.3.          Assignment.
This Agreement shall not be assignable by either party without the written consent of the other party, except that either Party
may assign this Agreement, without such consent, to (i) an Affiliate of such Party; or (ii) an entity that acquires all or substantially
all of the business or assets of such Party to which this Agreement pertains, (whether by merger, reorganization, acquisition,
sale, or otherwise) and agrees in writing to be bound by the terms and conditions of this Agreement. The terms and conditions of
this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties. Nothing in
this Section 10.3 shall be construed to prevent GSK from sublicensing its rights to develop, manufacture or commercialize Product
under this Agreement.

 

10.4.          Notices.
Any notices, requests and other communications hereunder shall be in writing and shall be personally delivered or sent by international
express delivery service, registered or certified air mail, return receipt requested, postage prepaid, or by facsimile (confirmed
by prepaid registered or certified air mail letter or by international express delivery mail) (e.g., FedEx)), and shall be deemed
to have been properly served to the addressee upon receipt of such written communication, to the following addresses of the Parties,
or such other address as may be specified in writing to the other Parties hereto:

 

    	24

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

	 	if to GSK:	
        GlaxoSmithKline

        709 Swedeland Road

        King of Prussia, PA 19406

        Attention:     Senior Vice President,
        Business

        Development

        Telephone:    610-270-5397

        Telecopy:      610-270-5962

	 	 	 
	 	with copies to:	
        GlaxoSmithKline

        Corporate Legal Department

        2301 Renaissance Blvd.

        Mail Code RN0220

        King of Prussia, PA 19406-2772

        Attention:     Senior Vice President
        and Assistant

        General Counsel - R&D Legal

        Operations

        Telephone:    610-787-3626

        Telecopy:      610-787-7084

	 	 	 
	 	if to Flamel:	
        Flamel Technologies, S.A.

        Parc Club du Moulin a Vent

        33 Avenue du Docteur Georges Levy

        69693 Venissieux Cedex

        France

        Attention:     Dr. Gerard Soula

        President and Chief Executive Officer

        Telephone:    334 7278 3434

        Telecopy:      334 7278 3435

	 	 	 
	 	With a coy to:	
        Flamel Technologies, S.A.

        2121 K Street, Suite 650

        Washington, D.C. 20037

        Attention:     Stephen H. Willard

        Chief Financial Officer and General

        Counsel

        Telephone:    202-862-8400

        Telecopy:      202-862-3933

 

    	25

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

10.5.          Force
Majeure. Neither Party shall be liable to the other for failure or delay in the performance of any of its obligations under
this Agreement for the time and to the extent such failure or delay is caused by earthquake, riot, civil commotion, terrorism,
war, hostilities between nations, governmental law, order or regulation, embargo, action by the government or any agency thereof,
act of God, storm, fire, accident, labor dispute or strike, sabotage, explosion or other similar or different contingencies, in
each case, beyond the reasonable control of the respective Party. The Party affected by force majeure shall provide the other Party
with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration
of the interference with its activities), and will use its best endeavors to overcome the difficulties created thereby and to resume
performance of its obligations as soon as practicable. If the performance of any obligation under this Agreement is delayed owing
to a force majeure for any continuous period of more than six (6) months, the Parties hereto shall consult with respect to an equitable
solution including the possible termination of this Agreement.

 

10.6.          Independent
Contractors. Nothing contained in this Agreement is intended implicitly, or is to be construed, to constitute GSK or Flame'
as partners or joint venturers in the legal sense. No Party hereto shall have any express or implied right or authority to assume
or create any obligations on behalf of or in the name of any other Party or to bind any other Party to any contract, agreement
or undertaking with any Third Party.

 

10.7.          Other
Obligations. Except as expressly provided in this Agreement or as separately agreed upon in writing between Flamel and
GSK, each Party shall bear its own costs incurred in connection with the implementation of the obligations under this Agreement.

 

10.8.          Severability.
If any of the terms or provisions of this Agreement are in conflict with any applicable statute or rule of law, then such terms
or provisions shall be deemed inoperative to the extent that they may conflict therewith and shall be deemed to be modified to
conform with such statute or rule of law. In the event that the terms and conditions of this Agreement are materially altered as
a result of the above, the Parties will renegotiate the terms and conditions of this Agreement to resolve any inequities.

 

10.9.          Further
Assurances. At any time or from time to time on and after the date of this Agreement, either Party shall at the request
of the other Party (i) deliver to the requesting Party such records, data or other documents consistent with the provisions of
this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of assignment,
transfer or license, and (iii) take or cause to be taken all such actions, as the requesting Party may reasonably deem necessary
or desirable in order for the requesting Party to obtain the full benefits of this Agreement and the transactions contemplated
hereby.

 

10.10.         Entire
Agreement. This Agreement constitutes the entire agreement, both written and oral, with respect to the subject matter hereof,
and supersedes and terminates all prior or contemporaneous understandings or agreements, whether written or oral, between GSK and
Flamel with respect to such subject matter, excluding the Feasibility Agreement. The Exhibits and Schedules to this Agreement,
and the terms and conditions incorporated in such Exhibits and Schedules will be deemed integral parts of this Agreement and all
references in this Agreement to this Agreement encompass such Exhibits and schedules and the terms and conditions incorporated
in such Exhibits and Schedules. No terms or provisions of this Agreement shall be varied or modified by any prior or subsequent
statement, conduct or act of either of the Parties, except that the Parties may amend this Agreement by written instruments specifically
referring to and executed in the same manner as this Agreement. To the extent that there is any inconsistency between this Agreement
and the Feasibility Agreement, this Agreement shall govern, except to the extent that this Agreement grants rights greater than
those granted under the Feasibility Agreement, in which case the Feasibility Agreement shall control.

 

    	26

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

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

 

10.12.         Rules
of Construction.

 

10.12.1.          Joint
Draftsmanship. The Agreement will be construed as if both parties drafted the Agreement jointly, and will not be construed
against either party as principal drafter.

 

10.12.2.          Time
References. Unless otherwise provided, all references to months, quarters or years are references to calendar months, calendar
quarters or calendar years.

 

10.12.3.          Laws.
Any reference to any federal, national, state, local or foreign statute or law will be deemed to also refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.

 

10.12.4.          English
Language. The English language version of this Agreement will control and any translations of this Agreement will be for
convenience purposes only for the Party making such translation and do not embody any agreement between the Parties.

 

10.13.         No
Third Party Beneficiaries. All rights, benefits and remedies under this Agreement are solely intended for the benefit of
Flamel and GSK, and no Third Party will have any rights whatsoever to (i) enforce any obligation contained in this Agreement, (ii)
seek a benefit or remedy for any breach of this Agreement, or (iii) take any other action relating to this Agreement under any
legal theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence
and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.

 

10.14.         Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together
shall constitute one and the same instrument.

 

The Remainder of this Page Left Intentionally
Blank.

 

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[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

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

 

	FLAMEL TECHNOLOGIES, S.A.	SB PHARMCO PUERTO RICO, INC.

 

	By:	 	 	By:	 
	Name:	Gèrard Soula	 	Name:	Jean-Pierre Garnier
	Title:	President and CEO	 	Title:	Attorney-in-Fact

 

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CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

SCHEDULE 1.14

FLAMEL PATENT RIGHTS

 

	Title	 	Owner	 	Country	 	Dèpôt/Filing

Date	 	Filing No	 	Acceptation/

No of Grant	 	Date of

Grant
	Microcapsules General principle	 	FT	 	Argentina	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Brazil	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Canada	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Europe	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	France	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	France	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Germany	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Great Britain	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	India	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Israel	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Italy	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Japan	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	PCT	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	South Africa	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	Spain	 	[***]	 	[***]	 	[***]	 	[***]
	Microcapsules General principle	 	FT	 	USA	 	[***]	 	[***]	 	[***]	 	[***]
	Microencapsulated Aspirin	 	FT	 	Europe	 	[***]	 	[***]	 	[***]	 	[***]
	Microencapsulated Aspirin	 	FT	 	France	 	[***]	 	[***]	 	[***]	 	[***]
	Microencapsulated Aspirin	 	FT	 	Japan	 	[***]	 	[***]	 	[***]	 	[***]
	Microencapsulated Aspirin	 	FT	 	USA	 	[***]	 	[***]	 	[***]	 	[***]
	Microencapsulated Aspirin	 	FT	 	USA	 	[***]	 	[***]	 	[***]	 	[***]
	Micropump II	 	FT	 	France	 	[***]	 	[***]	 	[***]	 	[***]
	Micropump II	 	FT	 	PCT	 	[***]	 	[***]	 	[***]	 	[***]
	Mattawan multimicrocapsulaire	 	FT	 	France	 	[***]	 	[***]	 	[***]	 	[***]
	Metforrnin multimicrocapsulaire	 	FT	 	POT	 	[***]	 	[***]	 	 	 	 
	Metforrnin bitherapie	 	FT	 	France	 	[***]	 	[***]	 	 	 	 
	Microcaspsules "delayed release"	 	FT	 	France	 	[***]	 	[***]	 	 	 	 
	Micropump surenrobe pour compression	 	FT	 	France	 	[***]	 	[***]	 	 	 	 

 

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SCHEDULE
1.30

FLAMEL WORK PLAN

 

TECHNICAL PROJECT

 

	 
	Carvedilol MR
	 

 

PHASE 2 / Development - Scale-up

 

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		1.	INTRODUCTION

 

The goal of this project is to achieve a modified release formulation
of Carvedilol (MR) permitting to optimize its efficacy.

 

FLAMEL has developed two (2) once a day controlled release systems
that are tested in a phase I clinical study :

 

		-	the first one, using FLAMEL's Micropump I technology, must continuously release the active during five (5) to ten (10) hours,

 

		-	the second one, using FLAMEL's Micropump 11 technology, must display a lag time of one (1) to two (2) hours and then release
the Carvedilol during five (5) to (8) hours.

 

One of the formulations tested should display the targeted releasing
profile.

 

		2.	OBJECTIVES

 

The main objectives of this project for 2003 are the following:

 

		-	to develop an industrial manufacturing process for the selected modified release system,

 

		-	to produce batches of Micropump I or Micropump II for the strength range clinical study planned for June 2003,

 

		-	to produce the clinical batches with the industrial manufacturing equipment , at the appropriate batch size, for the phase
ill clinical study planned for January 2004,

 

		-	to carry out a large scale manufacture (qualification) campaign of selected formulations in conjunction with the preparation
of Phase al clinical trial supplies to allow GSK to initiate an official stability program for registration,

 

		-	to manufacture of phase Di clinical trial supplies will be addressed in the Supply Agreement referenced in Section 4.7 of the
Agreement.

 

		3.	FLAMEL TECHNOLOGIES PROPOSAL

 

In 2002, under the terms of the Feasibility Agreement, FLAMEL
adapted its Micropump I and II technology to Carvedilol. Initially, Carvedilol free base was used. Subsequently, the Carvedilol
phosphate salt was preferred to be tested in a phase I clinical study.

 

The results of the phase I clinical study will identify a formulation
that can be selected for additional clinical and other studies to more fully characterize the pharmacokinetic, pharmacodynamic
and pharmaceutical behaviors of the chosen formulation.

 

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In 2003, FLAMEL will conduct additional formulation, development
and optimization work in parallel to the phase II clinical studies in order to determine the suitability of the chosen formulation
for possible use in phase III clinical studies.

 

		4.	PROJECT SPECIFICATIONS AND DEFINITIONS

 

The specifications of the product corresponding to the formulation
chosen will be defined by GSK in collaboration with FLAMEL.

 

GSK will supply the documentation necessary for the development
work.

 

GSK will supply the Carvedilol phosphate and free base necessary
for the development program.

 

FLAMEL will optimize and validate a manufacturing process to
produce a Carvedilol MR formulation at commercial scale.

 

FLAMEL will develop and validate analytical methodologies to
support the selected formulations.

 

		5.	WORK PROGRAM

 

The work program is built around several key issues and predefined
dates that imply the list of actions given below:

 

		-	choice of the technology and the formulation by mid April 2003;

 

		-	completion of manufacturing of the additional phase I clinical batches by May 2003;

 

		-	commencement of additional phase II clinical study by June 2003;

 

		-	commencement of large-scale manufacture (qualification) campaign for the clinical phase III study supplies on sixty (60) kg
batches by July 2003;

 

		-	delivery of the selected Micropump formulation for manufacture of the phase al clinical batches, including transfer of blending
and encapsulation processes and analytical methods, by September 2003;

 

		-	GO/NO-GO decision on the formulation by November 2003;

 

		-	commencement of the phase III clinical study by January 2004.

 

The following program describes
the actions to be performed by FLAMEL:

 

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		5.1	Laboratory Development.

 

The main objective of this work is to supply the information
necessary for an NDA and to establish the basic performance characteristics of the formulation and process.

 

		1.	Choice of the excipients.

 

		2.	Microcapsules optimization.

 

		3.	Optimization of the final formulation according to the dosage defined.

 

		4.	Definition of the lots necessary for the in vivo / in vitro (3 profiles) correlation.

 

		5.	Screening the dissolution test parameters to prove their suitability to the releasing profile tested (ICH guidelines).

 

		6.	Support to the process development and scale-up.

 

		7.	Complementary testing on pilot and industrial batches.

 

		5.2	Process Development and Pilot Scale-Up.

 

The objective is to optimize the manufacturing process
at the pilot scale (20 kg/batch) in terms of product quality, performance and yield, to be able to facilitate the scale-up of the
process to the industrial equipment.

 

		1.	Process optimization: microcapsules manufacturing (20 kg/batch)

		-	Layering

		-	Carvedilol phosphate yield optimization

		-	Strength of the deposited layer of active Spray-coating

		-	Process parameters optimization

		-	Reproducibility

		-	Microcapsules characterization

		-	Active ingredient (A.I.) content.

		-	SEM characterization of the layer 1 Coating %

		-	Microcapsules distribution size

		-	Physical properties (density , flowing)

		-	Consistency of release rates

 

		2.	Capsule filling optimization process

		-	Microcapsules lubrication with Mg St,

		-	Capsule filling Characterizations

 

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		5.3	Industrial Scale-Up.

 

This Section 5.3 will form the basis of the Supply
Agreement and will be superceded by the Supply Agreement. The objective is to precisely define the industrial manufacturing equipment
needed, to install it and to optimize the different manufacturing stages to achieve the batch size needed for the clinical phase
III batches; provided, however, that FLAMEL shall not be entitled to purchase new equipment at the expense of GSK without the prior
written consent of GSK. Moreover, the optimized process will permit to achieve a qualification campaign by July 2003 and to start
the ICH stabilities for the NDA.

 

		1.	Precise definition of the industrial manufacturing equipment.

		-	Technical trials

		-	Definition and installation of the technical options on the industrial equipment

 

		2.	Microcapsules Process scale-up and optimization. (60 - 120 kg/batch)

		-	Layering

		-	Suspension of A.I. optimization

		-	Yield optimization.

		-	Spray-coating

		-	Process parameters

		-	Robustness

		-	Microcapsules characterization.

 

		3.	Capsule filling

		-	Blending with Mg Stearate and characterizations

 

		4.	Process validation and manufacturing of 3 Q-batches

		-	Microcapsules process validation on 3 Q-batches (60 — 120 kg / batch)

		-	Blending validation : Mg Stearate

		-	Capsule filling validation

		-	Packaging

		-	Starting ICH stabilities

 

		5.4	Analytical Development

 

This Section 5.4 will form the basis of the Supply
Agreement and will be superceded by the Supply Agreement.

 

		1.	Methods validation

 

		2.	Accelerated stabilities on development batches

 

		3.	Testing of development and scale-up batches

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		4.	Full testing on the pilot Q-batches according to the validation protocol

 

		5.	Testing of the initial industrial scale-up batches.

 

		6.	Transfer the analytical methodologies to GSK

 

		6.	CLINICAL BATCHES MANUFACTURING

 

The manufacturing of clinical batches not discussed
herein will be discussed between the parties and will be the subject of a separate workplan.

 

		7.	QUANTITY OF ACTIVE INGREDIENT NECESSARY

 

The quantity of Carvedilol phosphate necessary for
this project is estimated to about one hundred (100) kg. Half of that amount will be used for the lab and pilot program and the
rest for the initial industrial scale-up work. The quantities necessary for the clinical batches will be estimated according to
the specific needs. FLAMEL will also supply Carvedilol free base, depending on the formulation selected. The quantities of the
Carvedilol free base will be agreed upon between the parties as appropriate.

 

		8.	PLANNING AND BUDGET

 

The development program presented in this document
commences January 2003 and ends December 2003.

 

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SCHEDULE 4.6

Existing Studies and
Delivery of Clinical Supplies of Small Particle Micropump

 

		1.	Blending studies of Carvedilol Immediate Release and Carvedilol Controlled Release pellets to support manufacture of phase
11 clinical supplies of Micropump 11 as discussed in the GSK/Flamel meeting in Lyon, France on February 3 and 4, 2003.

 

		2.	Completion of additional development work and manufacture of clinical supplies to be used in phase I studies on the small size
Carvedilol microcapsules as discussed in the GSKJF1amel meeting in Lyon, France on February 3 and 4, 2003.

 

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SCHEDULE
4.7

Key
Supply Terms

 

Volumes and Commitments

		·	GSK will provide both a three (3) year high level forecast and a fifteen (15) month forecast, the latter being updated at a
minimum every six (6) months, with monthly updates to the three (3) months fixed by GSK firm order. These forecasts are not commitments
and are for information purposes only; commitments shall be made by GSK firm order.

 

		2.	Capacity

		·	FLAMEL shall ensure it and its GSK approved suppliers have adequate capacity at all times to fulfill [***]
of GSK's firm order(s) within the agreed lead in period.

 

		3.	Term

		·	[***] with the option for GSK to renew in one year increments unless in case of
breach or insolvency

 

		4.	Notice of Termination and Supply

		·	In the event                                          of termination, FLAMEL or GSK, as the case may be, shall provide at
                                                                                                             least [***] notice and FLAMEL shall supply all forecasted Product through the end of the
                                                                                                             notice of termination period; provided, however, and notwithstanding the foregoing, that
                                                                                                             in the event of termination by FLAMEL, FLAMEL will continue to supply GSK per the terms
                                                                                                             of the Supply Agreement until technology transfer from FLAMEL to GSK has been completed
                                                                                                             and GSK have in place a robust supply alternative to FLAMEL.

 

		5.	Cost of goods

 

		A.	Clinical Trial Supply

 

		·	[***]

 

		B	Launch stock & commercial supply

 

		·	[***]

 

[***]

 

		6.	Continuous Improvement Targets

		·	FLAMEL and GSK shall agree on action plans and continuous improvement targets. [***]

 

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		7.	Alternative Sources of Materials

		·	In the event that GSK identifies alternative source(s) of supply for constituent elements of the product of equivalent quality
from a Third Party on more favorable terms, then FLAMEL shall purchase such materials as GSK shall direct, provided that such materials
can be used in accordance with this Agreement.

 

		·	[***]

 

		8.	Approvals

		·	The manufacturing facility, GSK approved suppliers, materials, specifications, processes, storage facilities and transport
utilized by FLAMEL shall be approved in advance by GSK and shall not be modified without GSK's prior approval.

 

		·	No capital expenditures will be made by FLAMEL to support the development or manufacture of Product without GSK's prior, written
approval.

 

		·	The manufacturing facility, processes, storage facility and transport will comply with all relevant and applicable standards,
including Current Good Manufacturing Practices (cGMPs41), as defined by the US FDA's Code of Federal Regulations (CFR) parts 210,
211, and 820, as applicable, and to permit FDA (or other regulatory agency) inspections of any facilities in which GSK products
are produced.

 

		·	FLAMEL shall ensure excipients and all other materials used in the manufacturing meet the agreed specifications.

 

		9.	Identity Testing

		·	Following delivery of GSK active and prior to its use in manufacture, FLAMEL shall conduct identity tests and all other tests
required to determine compliance with the corresponding specification.

 

		10.	Supply Chain Optimization

		·	FLAMEL and GSK will work together to identify, develop and implement the optimum robust supply chain for manufacture and supply.

 

		11.	Inspection

		·	GSK shall have the right to undertake all inspections, tests and batch sampling.

 

		12.	Yield

		·	GSK and FLAMEL will agree on the specifications for batch yield along with an acceptable range for batches manufactured by
FLAMEL. FLAMEL will be liable all costs, including the cost of Carvedilol, for batches that do not meet the yield criteria.

 

		13.	Batch Failures

		·	GSK shall pay for good in-specification batches only, delivered in accordance with the requirements of the GSK firm order and
terms of the Supply Agreement.

 

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		14.	Contingency Stock Holding

		·	FLAMEL shall maintain a contingency stock holding at levels agreed with GSK, sufficient to ensure continuous supply of product
to GSK

 

		15.	Rejection

		·	GSK shall have the right to reject product that does not comply in quantity or quality with the GSK firm order and the Agreement.

 

		16.	Title

		·	Title shall transfer to GSK upon receipt and acceptance by GSK. The transfer of title shall not release FLAMEL from any of
its rights and responsibilities under this agreement.

 

		17.	Payment

		·	GSK shall pay FLAMEL within [***]

 

		18.	Key Performance Indicators

		·	GSK and FLAMEL shall agree performance indicators to measure supply requirements.

 

		19.	Insurance

		·	GSK and FLAMEL shall agree upon insurance provisions that adequately protect the other party against the risk related to the
first party's performance under the Agreement.

 

		20.	Assignment

		·	FLAMEL shall not at any time assign or sub-contract any of its rights, or obligations whatsoever in this Agreement to any third
party

 

[***]

 

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SCHEDULE 6.2

Exceptions To Representations And
Warranties

 

		1.	COREG® US AGREEMENT BY AND BETWEEN SMITHKLINE BEECHAM CORPORATION, SMITHKLINE BEECHAM PLC AND HOFFMANN-LA ROCHE LTD., DATED
AUGUST 30, 2000 WHEREBY ROCHE HAS GRANTED GSK RIGHTS TO CARVEDILOL IN THE US AND CANADA AND GSK HAS THE OBLIGATION TO OFFER ROCHE
A SUBLICENSE TO THE PRODUCT FOR THE ROCHE TERRITORY.

 

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SCHEDULE 7.3

Press Release

 

GlaxoSmithKline and Flamel Technologies

Announce License Agreement

 

LONDON, England and LYON, France March 28, 2003 GlaxoSmithKline
(LSE and NYSE:GSK - news) and Flamel Technologies S.A. (NASDAQ:FLML - news) announced today that they
have entered into an agreement whereby Flamel has licensed its controlled-release Micropump® technology to GlaxoSmithKline
(`GSK') to develop a new formulation for an undisclosed existing product. Flamel will receive an upfront payment of $2M and additional
milestone payments upon achievement of certain events, and royalties on sales of the product. Based on the continued successful
development and commercialisation of this formulation, GSK and Flamel estimate that payments to Flamel could range up to $45 million
by the end of the first year following launch, of which $25M is attributable to the product reaching certain milestones. Flamel
may also participate in the manufacture of product. Additional terms of the agreement have not been disclosed.

 

Gerard Sonia, PhD., president and chief executive officer of
Flamel, said "We are very excited about this new development agreement with GSK. We are confident of the potential of Micropump
technology for these large, and still growing, markets. This additional agreement further demonstrates the interest of major worldwide
pharmaceutical companies in our versatile technology platforms. Moreover, this is our second license agreement with GSK within
the past nine months, based on Micropump technology. It confirms the common interest of the two companies to work together. I am
very pleased and proud to see GSK, one of the world's premier pharmaceutical companies, expand its relationship with Flamel."

 

Lawson Macartney, DVM., PhD., FRCPath, Head of the Cardiovascular,
Metabolic and Urology Therapeutic Areas, GSK, added, "This collaboration will help us to maintain our leadership in product
research and development. We are eager to develop with Flamel leading technologies within our therapeutic areas with the objective
of providing the next generation of medicines."

 

GlaxoSmithKline - one of the world's leading research-based
pharmaceutical and healthcare companies - is committed to improving the quality of human life by enabling people to do more, feel
better and live longer.

 

Flamel Technologies, S.A. is a biopharmaceutical company principally
engaged in the development of two unique polymer-based delivery technologies for medical applications. Flamers Micropump® technology
is a controlled release and taste-masking technology for the oral administration of small molecule drugs. Flamel's Medusa®
nano-particulate technology is designed to deliver therapeutic proteins. Flamel's expertise in polymer science has also been instrumental
in the development of a photochromic eyeglass lens product now marketed by Corning Inc.

 

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This document contains a number of matters, particularly as
related to the status of various research projects and technology platforms, that constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The presentation reflects the current view of management with
respect to future events and is subject to risks and uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements. These risks include risks that products in the development stage may not achieve
scientific objectives or milestones or meet stringent regulatory requirements, uncertainties regarding market acceptance of products
in development, the impact of competitive products and pricing, and the risks associated with Flamel's reliance on outside parties
and key strategic alliances. These and other risks are described more fully in Flamel's Annual Report on the Securities and Exchange
Commission Form 20-F for the year ended December 31, 2000. Flamel assumes no obligation to update any forward-looking statements.

 

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SCHEDULE 8.4

Flamel Insurance

 

 

 

    	44Exhibit 10.5

 

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LICENSE AGREEMENT

 

PREAMBLE

 

THIS LICENSE AGREEMENT (the "Agreement"),
dated as of the 24th day of November, 2004 (the "Effective Date"), is made by and between SB Pharmco
Puerto Rico, Inc., a GlaxoSmithKline company organized and existing under the laws of the territory of Puerto Rico, with its principal
place of business at Road 172, KM 9.1/Bo. Certenejas, Cidra, Puerto Rico 00639 ("GSK") and Flamel Technologies,
S.A., a corporation organized and existing under the laws of France, with its principal place of business at Parc Club du Moulin
a Vent, 33 Avenue du Docteur Georges Levy 69693 Venissieux Cedex, France, ("Flamel"). GSK and Flamel are sometimes
collectively referred to in this Agreement as the "Parties" and separately as a "Party".

 

WHEREAS, GSK and Flamel are parties to a
License Agreement dated March 26, 2003 (the "License Agreement");

 

WHEREAS, GSK and Flamel have agreed with
respect to the Carvedilol MR Patent Rights (as hereinafter defined) and the Micropump Technology Patent Rights (as hereinafter
defined) only, that notwithstanding the provisions in Section 5.1 of the License Agreement, the Parties will be joint owners of
the Carvedilol MR Patent Rights and the Micropump Technology Patent Rights;

 

WHEREAS, GSK desires to obtain from Flamel
an irrevocable, royalty-free, exclusive license to Flamel's rights under the Carvedilol MR Patent Rights, and Flamel desires to
grant GSK an irrevocable, royalty-free, exclusive license to Flamel's rights under the Carvedilol MR Patent Rights, as provided
herein; and

 

WHEREAS, Flamel desires to obtain from GSK
an irrevocable, royalty-free, exclusive license to GSK's rights under the Micropump Technology Patent Rights, and GSK desires to
grant Flamel an irrevocable, royalty-free, exclusive license to GSK's rights under the Micropump Technology Patent Rights, as provided
herein.

 

NOW, THEREFORE, in consideration of the
mutual covenants set forth in this Agreement, GSK and Flamel hereby agree as follows:

 

Article I.           Definitions.

 

Section 1.1           As
used herein, the following capitalized terms will have the meanings set forth below when used in this Agreement, and all terms
defined in the singular will have the same meanings when used in the plural (and vice versa), unless otherwise specified:

 

"Affiliate" means any legal
entity (such as a corporation, partnership, or limited liability company) that directly or indirectly Controls, is Controlled by
or is under common Control with a Party to this Agreement. For the purposes of this definition, the term "Control" means:
(i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization
with voting securities (or such lesser percentage required under local jurisdiction); (ii) a fifty percent (50%) or greater interest
in the net assets or profits of a partnership or other business organization without voting securities; or (iii) the ability to
direct the affairs of any such entity.

 

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"Carvedilol MR Patent Rights"
means (i) the patent application filed by GSK on November 24, 2004, a copy of which is attached hereto as Exhibit A and
any patents issuing thereon; (ii) any divisions, continuations, continuations-in-part, reissues, reexaminations, patents of additions,
extensions or other governmental actions that extend any of the subject matter of any of the foregoing referenced in (i); (iii)
any substitutions, confirmations, registrations or revalidations of any of the foregoing; and (iv) any foreign equivalents of any
of the foregoing, including, without limitation any PCTs.

 

"Confidential Information"
means (i) any proprietary or confidential information or material in tangible form disclosed by a Party hereunder that is marked
as "Confidential" at the time it is delivered to the receiving Party, and/or (ii) proprietary or confidential information
disclosed orally hereunder that is identified as confidential or proprietary when disclosed and such disclosure of confidential
information is confirmed in writing within a reasonable period of time thereafter by the disclosing Party.

 

"Control," "Controls,"
"Controlled," or "Controlling" means (except with respect to the definition of "Affiliate")
possession of the ability to grant the licenses or sublicenses as provided herein without violating the terms of any license agreement
or other arrangement with any Third Party, or any government regulation or statute.

 

"Dispute" will have the meaning
set forth in Section 7.1(i).

 

"Dispute Notice" will have
the meaning set forth in Section 7.1(i).

 

"Effective Date" will have
the meaning set forth in the Preamble.

 

"Flamel" will have the meaning
set forth in the Preamble.

 

"Flamel Patent Assignment"
means the assignment agreement attached hereto as Exhibit B and incorporated herein.

 

"GSK" will have the meaning
set forth in the Preamble.

 

"GSK Patent Assignment" means
the assignment agreement attached hereto as Exhibit C and incorporated herein.

 

"License Agreement" will
have the meaning set forth in the Preamble.

 

    	2

    	 

    

 

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"Micropump Technology Patent Rights"
means (i) the patent application filed by Flamel on November 24, 2004, a copy of which is attached hereto as Exhibit D and
any patents issuing thereon; (ii) any divisions, continuations, continuations-in-part, reissues, reexaminations, patents of additions,
extensions or other governmental actions that extend any of the subject matter of any of the foregoing referenced in (i); (iii)
any substitutions, confirmations, registrations or revalidations of any of the foregoing; and (iv) any foreign equivalents of any
of the foregoing, including, without limitation any PCTs. Flamel will provide GSK with a certified English translation of the patent
application attached at Exhibit D within thirty (30) calendar days of the Effective Date.

 

"Party(ies)" will have the
meaning set forth in the Preamble.

 

"PTO" means the United States
Patent and Trademark Office and any successor entity thereto.

 

"Term" will have the meaning
set forth in Section 6.1.

 

"Territory" means [***]

 

"Third Party(ies)" means
any party(ies) other than Flamel, GSK, or an Affiliate of either of them.

 

"U.S." or "United
States" means the fifty (50) states of the United States of America and the District of Columbia.

 

Section 1.2           The
word "including" or any variation thereof means "including without limitation" and the word "including"
or any variation thereof will not be construed to limit any general statement which it follows to the specific or similar items
or matters immediately following it.

 

Article II.          License
Grants and Assignment.

 

Section 2.1           Flamel
License Grant. Flamel hereby grants to GSK an exclusive (even as to Flamel), royalty-free license, with the right to grant
sublicenses, under all of Flamel's rights, title and interest in and to the Carvedilol MR Patent Rights in the Territory.

 

Section 2.2           GSK
License Grant. Subject to Section 3.3, GSK hereby grants to Flamel an exclusive (even as to GSK), royalty-free license, with
the right to grant sublicenses, under all of GSK's rights, title and interest in and to the Micropump Technology Patents in the
Territory.

 

Section 2.3           Irrevocable
Licenses. The licenses granted under Sections 2.1, 2.2 and 3.3 will be irrevocable for any reason, including termination of
this Agreement.

 

Section 2.4           Assignment
of Flamel.

 

    	3

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(i)          Subject
to Section 2.4(ii) below, at any time during the Term after a patent included within Carvedilol MR Patent Rights has issued in
a country in the Territory, GSK will have the right, but not the obligation, to send a written request to Flamel that Flamel execute
the Flamel Patent Assignment for such patent. Flamel agrees that it will, within ten (10) business days after its receipt of a
written request from GSK, execute and deliver to GSK at no cost to GSK, any and all documents provided by GSK to effectuate the
assignment of all ofFlamel's ownership interests in such patent, including, without limitation, the Flamel Patent Assignment for
such patent, which documents GSK may file with the appropriate national and international patent and other intellectual property
authorities. Flamel acknowledges and agrees that GSK will be entitled to injunctive relief in the event that Flamel breaches this
Section 2.4(i).

 

(ii)         Notwithstanding
anything to the contrary in Section 2.4(i) above, GSK will have the right to request that Flamel execute a Flamel Patent Assignment
for any Carvedilol MR Patent Rights in a country and any other documents at any time during the Term if, as provided in Section
7.8, GSK reasonably deems it necessary or desirable to effectuate the assignment of all of Flamel's ownership interest the Carvedilol
MR Patent Rights in such country in order for GSK to obtain the full benefits of this Agreement and the transactions contemplated
hereby. Flamel agrees that it will, within ten (10) business days after its receipt of a written request from GSK, execute and
deliver to GSK at no cost to GSK, any and all documents provided by GSK (including without limitation the Flamel Patent Assignment)
to effectuate the assignment of all of Flamel's ownership interests the Carvedilol MR Patent Rights in such country. Flamel acknowledges
and agrees that GSK will be entitled to injunctive relief in the event that Flamel breaches this Section 2.4(ii).

 

(iii)        GSK
will be responsible for all fees and costs associated with filing the Flamel Patent Assignment with the PTO and the other national
and international patent and other intellectual property authorities in the Territory.

 

(iv)        Flamel
will cooperate with and reasonably assist GSK in relation to GSK's registration of any assignment of a patent in the Territory
as provided in this Section 2.4 with the PTO and with other patent offices in the Territory.

 

Section 2.5           Assignment
of GSK.

 

(i)          Subject
to Section 2.5(ii) and Section 3.3 below, at any time during the Term after a patent included within Micropump Technology Patent
Rights has issued in a country in the Territory, Flamel will have the right, but not the obligation, to send a written request
to GSK that GSK execute the GSK Patent Assignment for such patent. GSK agrees that it will, within ten (10) business days after
its receipt of a written request from Flamel, execute and deliver to Flamel at no cost to Flamel, any and all documents provided
by Flamel to effectuate the assignment of all of GSK's ownership interests in such patent, including, without limitation, the GSK
Patent Assignment for such patent, which documents Flamel may file with the appropriate national and international patent and other
intellectual property authorities. GSK acknowledges and agrees that Flamel will be entitled to injunctive relief in the event that
GSK breaches this Section 2.5(i).

 

    	4

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(ii)         Notwithstanding
anything to the contrary in Section 2.5(i) above but subject to Section 3.3, Flamel will have the right to request that GSK execute
a GSK Patent Assignment for any Micropump Technology Patent Rights in a country and any other documents at any time during the
Term if, as provided in Section 7.8, Flamel reasonably deems it necessary or desirable to effectuate the assignment of all of GSK's
ownership interest the Micropump Technology Patent Rights in such country in order for Flamel to obtain the full benefits of this
Agreement and the transactions contemplated hereby. GSK agrees that it will, within ten (10) business days after its receipt of
a written request from Flamel, execute and deliver to Flamel at no cost to Flamel, any and all documents provided by Flamel (including
without limitation the GSK Patent Assignment) to effectuate the assignment of all of GSK's ownership interests the Micropump Technology
Patent Rights in such country. GSK acknowledges and agrees that Flamel will be entitled to injunctive relief in the event that
Flamel breaches this Section 2.5(ii).

 

(iii)        Flamel
will be responsible for all fees and costs associated with filing the GSK Patent Assignment with the PTO and the other national
and international patent and other intellectual property authorities in the Territory.

 

(iv)        GSK
will cooperate with and reasonably assist Flamel in relation to Flamel's registration of any assignment of a patent in the Territory
as provided in this Section 2.5 with the PTO and with other patent offices in the Territory.

 

Article III.         Intellectual
Property.

 

Section 3.1           Filing,
Prosecution, Maintenance.

 

(i)          GSK
will have the sole right, using in-house or outside legal counsel selected at GSK's sole discretion, to prepare, file, prosecute,
maintain and extend the Carvedilol MR Patent Rights in countries of GSK's choice throughout the Territory, for which GSK will bear
the costs relating to such activities which occur at GSK's request or direction. GSK will solicit Flamel's advice and review of
important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and GSK will take into account
Flamel's reasonable comments related thereto.

 

(ii)         Subject
to Section 3.3, Flamel will have the sole right, using in-house or outside legal counsel selected at Flamel's sole discretion,
to prepare, file, prosecute, maintain and extend the Micropump Technology Patent Rights in countries of Flamel's choice throughout
the Territory, for which Flamel shall bear the costs. Flamel will solicit GSK's advice and review of important prosecution matters
related thereto in reasonably sufficient time prior to filing thereof, and Flame' will take into account GSK's reasonable comments
related thereto.

 

(iii)        Each
of Flamel and GSK will hold all information it presently knows or acquires under this Section that is related to all such patents
and patent applications as confidential and subject to the provisions of Article V of this Agreement.

 

(iv)        Each
Party will cooperate with the other as reasonably requested to effect the provisions of this Section 3.1.

 

    	5

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

Section 3.2           Control
of Infringement Proceedings.

 

(i)          GSK
will have the sole right, but not the obligation, to bring, at its sole discretion and at its own expense, an infringement action
against any Third Party relating to the Carvedilol MR Patent Rights, and to use Flamel's name in connection therewith. GSK will
have full control over its conduct of such infringement action, including settlement and discontinuance thereof.

 

(ii)         Subject
to Section 3.3, Flamel will have the sole right, but not the obligation, to bring, at its sole discretion and its own expense and
to use GSK's name in connection therewith, an infringement action against any Third Party relating to the Micropump Technology
Patent Rights, and to use GSK's name in connection therewith. Flamel will have full control over its conduct of such infringement
action, including settlement and discontinuance thereof.

 

Section 3.3           Flamel
Patent Rights. For the avoidance of doubt, (i) Flamel represents and warrants that the Micropump Technology Patent Rights will
not include any claims that cover Carvedilol (as hereinafter defined) and/or any formulation thereof; and (ii) notwithstanding
the foregoing but subject in all respects to the License Agreement, to the extent GSK determines in good faith that the Micropump
Technology Patent Rights could be interpreted to include a claim that covers Carvedilol and/or any formulation thereof, Flamel
hereby agrees that during the Term, GSK will have a perpetual, exclusive (even as to Flamel), royalty-free license, with the right
to grant sublicenses, under all of Flamel's rights, title and interest in and to the Micropump Technology Patent Rights with respect
to any claims that cover Carvedilol and/or any formulation thereof. For the purposes of this Section 3.3,"Carvedilol"
means (1-(9H-carbazol-4-yloxy)-[[2-2(2-methoxyphenoxy)ethyl]amino]-2-propanol), the compound that is known by the generic name
of Carvedilol and including all racemates, chelates, complexes, enantiomers, diastereoisomers, anhydrous forms, salts, bases, esters,
hydrates, solvates, polymorphs, crystal forms, crystal habits, prodrugs, isotopic or radiolabeled equivalents, metabolites, or
the like, thereof and all mixtures and any of the foregoing, and compositions comprising Carvedilol.

 

Article IV.          Re
presentations and Warranties.

 

Section 4.1           Flamel
Representations and Warranties. As of the Effective Date, Flamel represents and warrants to GSK that:

 

(i)          Flamel
is a corporation duly incorporated, validly existing and in good standing under the law of the jurisdiction of its incorporation,
and has the corporate power to grant the licenses and perform its obligations under this Agreement;

 

(ii)         this
Agreement has been duly executed and delivered by Flamel, is a legal and valid obligation binding upon Flamel and enforceable against
Flamel in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other laws affecting
creditors' rights generally or by the availability of equitable remedies;

 

(iii)        Flamel
has full Control over its rights, title and interest in and to the Carvedilol MR Patent Rights and Micropump Technology Patent
Rights in order for Flamel to grant the licenses under Section 2.1 and Section 3.3, respectively, and Flamel otherwise has the
full right and authority to enter into this Agreement;

 

    	6

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(iv)        there
are no existing or threatened actions, suits or claims pending against Flamel with respect to Flamel's right and ability to enter
into and perform its obligations under this Agreement;

 

(v)         Flamel
has not granted, nor will Flamel grant during the Term, any right, license or interest in or to Flamel's rights, title and interest
in and to the Carvedilol MR Patent Rights that is in conflict with the rights or licenses granted to GSK under Section 2.1 and
Section 3.3;

 

(vi)        Flamel
has not encumbered its rights, title and interest in and to the Carvedilol MR Patent Rights, and Flamel will not encumber its rights,
title and interest in and to the Carvedilol MR Patent Rights with liens, mortgages, security interests or otherwise after the Effective
Date; and

 

(vii)       to
the best of Flamel's knowledge, there is nothing in any Third Party agreement that Flamel has entered into that in any way will
limit Flamel's ability to enter into this Agreement and to perform all of the obligations undertaken by Flamel hereunder, and that
Flamel will not enter into any such agreement with a Third Party after the Effective Date under which Flamel mould incur any such
limitations.

 

Section 4.2           GSK
Representations and Warranties. As of the Effective Date, GSK represents and warrants to Flamel that:

 

(i)          GSK
is a corporation duly incorporated, validly existing and in good standing under the law of the jurisdiction of its incorporation,
and has the corporate power to grant the licenses and perform its obligations under this Agreement;

 

(ii)         this
Agreement has been duly executed and delivered by GSK, is a legal and valid obligation binding upon GSK and enforceable against
GSK in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other laws affecting
creditors' rights generally or by the availability of equitable remedies;

 

(iii)        GSK
has full Control over its rights, title and interest in and to the Micropump Technology Patent Rights in order for GSK to grant
the license under Section 2.2, and GSK otherwise has the full right and authority to enter into this Agreement;

 

(iv)        there
are no existing or threatened actions, suits or claims pending against GSK with respect to GSK's right and ability to enter into
and perform its obligations under this Agreement;

 

(v)         GSK
has not granted, nor will GSK grant during the Term, any right, license or interest in or to GSK's rights, title and interest in
and to the Micropump Technology Patent Rights that is in conflict with the rights or licenses granted to Flamel under Section 2.2;

 

    	7

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(vi)        GSK
has not encumbered its rights, title and interest in and to the Micropump Technology Patent Rights, and GSK will not encumber its
rights, title and interest in and to the Micropump Technology Patent Rights with liens, mortgages, security interests or otherwise
after the Effective Date; and

 

(vii)       to
the best of GSK's knowledge, there is nothing in any Third Party agreement that GSK has entered into that in any way will limit
GSK's ability to enter into this Agreement and to perform all of the obligations undertaken by GSK hereunder, and that GSK will
not enter into any such agreement with a Third Party after the Effective Date under which GSK would incur any such limitations.

 

Section 4.3           Disclaimer
of Warranties. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT OR MANDATED BY APPLICABLE LAW (WITHOUT THE RIGHT TO
WAIVE OR DISCLAIM), NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE PRODUCT, ANY TECHNOLOGY, GOODS, SERVICES,
RIGHTS, OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF PERFORMANCE, MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

 

Article
V.          Confidentiality.

 

Section 5.1           Confidential
Information. Except as expressly provided herein, the Parties agree that, during the Term and for a period of five (5) years
thereafter, the receiving Party will keep completely confidential and will not publish or otherwise disclose and shall not use
for any purpose except for the purposes contemplated by this Agreement any Confidential Information furnished to it by the disclosing
Party hereto pursuant to this Agreement, except that to the extent that it can be established by the receiving Party by competent
proof that such Confidential Information:

 

(i)          was
already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure;

 

(ii)         was
generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

 

(iii)        became
generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement;

 

(iv)        was
independently developed by the receiving Party without reference to any information or materials disclosed by the disclosing Party;
or

 

    	8

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(v)         was
subsequently disclosed to the receiving Party by a person other than a Party without breach of any legal obligation to the disclosing
Party.

 

Section 5.2           Permitted
Disclosures. Each Party hereto may disclose the other's Confidential Information to the extent such disclosure is reasonably
necessary in connection with the conduct of the development activities to be conducted hereunder, in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable governmental regulations or otherwise submitting information
to tax or other governmental authorities, conducting clinical trials, or making a permitted sublicense or otherwise exercising
its rights hereunder, provided that if a Party is required to make any such disclosure of another Party's Confidential Information,
other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the latter Party of suchdisclosure
and, save to the extent inappropriate in the case of patent applications, will use its best efforts to secure confidential treatment
of such information prior to its disclosure (whether through protective orders or otherwise).

 

Section 5.3           Public
Announcements. No public announcement or any other disclosure, including under a confidentiality agreement, to Third Parties
concerning the existence of, terms, or subject matter or termination of this Agreement will be made, either directly or indirectly,
by any Party to this Agreement, except as may be legally required or as may be required for recording purposes, without first obtaining
the written approval of the other Party and agreement upon the nature and text of such announcement or disclosure; provided, however,
that in the case of disclosures made by Flamel to a bona fide financial analyst for modeling and valuation purposes under a confidentiality
agreement, Flamel will provide GSK advance written notice of such disclosure (as set forth below), but will not be obligated to
obtain GSK's consent. The Party desiring to make any such public announcement or other disclosure (including those which are legally
required or may be required for recording purposes) will inform the other Party of the proposed announcement or disclosure in reasonably
sufficient time prior to public release, which will be at least five (5) business days prior to release of such proposed announcement
or disclosure, and will provide the other Party with a written copy thereof, in order to allow such other Party to comment upon
such announcement or disclosure. Each Party agrees that it will cooperate fully with the other with respect to all disclosures
regarding this Agreement to the Securities Exchange Commission and any other governmental or regulatory agencies, including requests
for confidential treatment of proprietary information of either Party included in any such disclosure.

 

Section 5.4           Third
Party Publications. Nothing herein shall be construed to prevent GSK from disclosing any information received from Flamel hereunder:
(i) to a Third Party contract manufacturer of GSK, subject to the consent of Flamel, such consent not to be unreasonably withheld;
or (ii) to an Affiliate, sublicensee, distributor, Third Party research or clinical contractor, of GSK, without the consent of
Flamel, provided, that in all cases of disclosure under clause (i) or (ii) above, the Third Party to whom such disclosure is made
shall have undertaken a similar obligation of confidentiality with respect to the Confidential Information.

 

    	9

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

Section 5.5           Bankruptcy.
All Confidential Information disclosed by one Party to the other will remain the intellectual property of the disclosing Party.
In the event that a court or other legal or administrative tribunal, directly or through an appointed master, trustee or receiver,
assumes partial or complete control over the assets of a Party to this Agreement based on the insolvency or bankruptcy of such
Party, the bankrupt or insolvent Party will promptly notify the court or other tribunal (i) that Confidential Information received
from the other Party under this Agreement remains the property of the other Party, and (ii) of the confidentiality obligations
under this Agreement. In addition, the bankrupt or insolvent party will, to the extent permitted by law, take all steps necessary
or desirable to maintain the confidentiality of the other party's Confidential Information and to ensure that the court, other
tribunal or appointee maintains such information in confidence in accordance with the terms of this Agreement.

 

Article VI.          Term
and Termination.

 

Section 6.1           The
term of this Agreement (the "Term") will commence on the Effective Date and, unless earlier terminated as provided
in Section 6.3 or Section 6.4, will continue in perpetuity.

 

Section 6.2           Notwithstanding
the bankruptcy of a Party, or the impairment of performance by a Party of its obligations under this Agreement as a result of bankruptcy
or insolvency of such Party, and subject to such Party's rights to terminate this Agreement for reasons other than bankruptcy or
insolvency as expressly provided in this Agreement, the other Party shall be entitled to retain the licenses under the terms and
conditions granted herein.

 

Section 6.3           Subject
to Section 2.3, this Agreement may be terminated at any time during the Term upon the mutual written agreement of the Parties.

 

Section 6.4           Subject
to Section 2.3, either Party may terminate this Agreement in the event the other Party has materially breached or defaulted in
the performance of any of its obligations hereunder, and if such default is not corrected within [***] calendar days after
receiving written notice from the other Party with respect to such default, such other Party shall have the right to terminate
this Agreement by giving written notice to the Party in default, provided the notice of termination is given within one (1) year
of when the Party giving notice knew of the default and prior to correction of the default.

 

Section 6.5           Article
V will survive termination of this Agreement by the Parties as provided in Section 6.3 and 6.4. In addition, any other provision
required to interpret and enforce the Parties' rights and obligations under this Agreement will also survive such termination of
the Agreement, but only to the extent required for the observation and performance of the aforementioned surviving portions of
this Agreement.

 

Article VII.         Miscellaneous
Provisions.

 

Section 7.1           Dispute
Resolution; Governing Law.

 

    	10

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

 

(i)          If
a dispute or controversy regarding any right or obligation under this Agreement arises between the Parties which they are unable
to resolve, (a "Dispute"), each of the Parties will, within a reasonable amount of time after any such Dispute
arises but in no event not more than thirty (30) business days after such Dispute arises (or in the event that there is a cure
period as provided in Section 6.4, within thirty (30) business days after the expiration of the applicable cure period), be entitled
to submit to the other Party written notice of such Dispute, with such notice setting forth in reasonable detail the nature of
the dispute (the "Dispute Notice"). For a period of thirty (30) business days after the date of the receiving
Party's receipt of the Dispute Notice, the Parties will seek to resolve such Dispute by good faith negotiation between representatives
of the Parties, subject to Section 2.3. If at the end of such thirty (30) business day period the Dispute remains unresolved, such
Dispute will be presented to the President of United States Pharmaceuticals business of GlaxoSmithKline or his designee and the
CEO of Flamel or his designee, for resolution of such Dispute by good faith negotiations, subject to Section 2.3. If at the end
of a subsequent thirty (30) business day period the Dispute remains unresolved, the Parties may only seek relief for such Dispute
by referring such Dispute to arbitration under the rules of International Chamber of Commerce (ICC), subject to Sections 2.3, 6.4
and 7.1(ii) The arbitration will be conducted by a panel of three (3) arbitrators, selected in accordance with ICC rules, and any
such arbitration will be conducted in the English language and take place in New York, New York. The decision of such arbitration
panel will be final and binding upon the Parties. The Parties agree that any pecuniary damages which may be awarded by such arbitration
panel will be limited, in the case of GSK, to lost Net Sales (as defined in the License Agreement) and, in the case of Flamel,
to lost royalties pursuant to Section 3.3 of the License Agreement. This provisions of this Section7.1 will not restrict in any
way the Parties' rights to seek preliminary injunctive or other equitable relief from any court having jurisdiction.

 

(ii)         Subject
to Section 2.3, this Agreement will be deemed to have been made in the United States, and its form, execution, validity, construction
and effect will be determined in accordance with, and any Dispute will be governed by and construed in accordance with, the laws
of the State of New York, without reference to conflicts of laws principles.

 

Section 7.2           Waiver.
Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party
to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement will not constitute a waiver
of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition
or term in any one or more instances will be construed as a further or continuing waiver of such condition or term or of another
condition or term

 

Section 7.3           Assignment.
This Agreement shall not be assignable by either Party without the written consent of the other Party, except that either Party
may assign this Agreement, without such consent, to (i) an Affiliate of such Party; or (ii) an entity that acquires all or substantially
all of the business or assets of such Party to which this Agreement pertains, (whether by merger, reorganization, acquisition,
sale, or otherwise) and agrees in writing to be bound by the terms and conditions of this Agreement. The terms and conditions of
this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties.

 

    	11

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

Section 7.4           Notices.
Any notices, requests and other communications hereunder shall be in writing and shall be personally delivered or sent by international
express delivery service, registered or certified air mail, return receipt requested, postage prepaid, or by facsimile (confirmed
by prepaid registered or certified air mail letter or by international express delivery mail) (e.g., FedEx)), and shall be deemed
to have been properly served to the addressee upon receipt of such written communication, to the following addresses of the Parties,
or such other address as may be specified in writing to the other Parties hereto:

 

	 	if to GSK:	GlaxoSmithKline
	 	 	709 Swedeland Road
	 	 	King of Prussia, PA 19406
	 	 	Attention:	Senior Vice President, Business Development
	 	 	Telephone:	610-270-5397
	 	 	Telecopy:	610-270-5962
	 	 	 
	 	with copies to:	GlaxoSmithKline
	 	 	Corporate Legal Department
	 	 	2301 Renaissance Blvd.
	 	 	Mail Code RN0220
	 	 	King of Prussia, PA 19406-2772
	 	 	Attention:	Senior Vice President and Assistant General Counsel – R&D Legal Operations
	 	 	Telephone:	610-787-3626
	 	 	Telecopy:	610-787-7084
	 	 	 
	 	if to Flamel:	Flamel Technologies, S.A.
	 	 	Parc Club du Moulin a Vent
	 	 	33 Avenue du Docteur Georges Levy
	 	 	69693 Venissieux Cedex
	 	 	France
	 	 	 
	 	 	Attention:	Dr. Gerard Soula
	 	 	President and Chief Executive Officer
	 	 	Telephone:	334 7278 3434
	 	 	Telecopy:	334 7278 3435
	 	 	 
	 	 	Flamel Technologies, S.A.
	 	 	2121 K Street, Suite 650
	 	 	Washington, D.C. 20037
	 	 	Attention:	Stephen H. Willard
	 	 	 	Chief Financial Officer and General Counsel
	 	 	Telephone:	202-862-8400
	 	 	Telecopy:	202-862-3933

 

Section 7.5           Independent
Contractors. Nothing contained in this Agreement is intended implicitly, or is to be construed, to constitute GSK or Flamel
as partners or joint venturers in the legal sense. No Party hereto will have any express or implied right or authority to assume
or create any obligations on behalf of or in the name of any other Party or to bind any other Party to any contract, agreement
or undertaking with any Third Party.

 

    	12

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

Section 7.6           Other
Obligations. Except as expressly provided in this Agreement or as separately agreed upon in writing between Flamel and GSK,
each Party will bear its own costs incurred in connection with the implementation of the obligations under this Agreement.

 

Section 7.7           Severability.
If any of the terms or provisions of this Agreement are in conflict with any applicable statute or rule of law, then such terms
or provisions will be deemed inoperative to the extent that they may conflict therewith and will be deemed to be modified to conform
with such statute or rule of law. In the event that the terms and conditions of this Agreement are materially altered as a result
of the above, the Parties will renegotiate the terms and conditions of this Agreement to resolve any inequities.

 

Section 7.8           Further
Assurances. At any time or from time to time on and after the date of this Agreement, either Party will at the request of the
other Party (i) deliver to the requesting Party such records, data or other documents consistent with the provisions of this Agreement,
(ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of assignment, transfer
or license, and (iii) take or cause to be taken all such actions, as the requesting Party may reasonably deem necessary or desirable
in order for the requesting Party to obtain the full benefits of this Agreement and the transactions contemplated hereby.

 

Section 7.9           Entire
Agreement. This Agreement constitutes the entire agreement, both written and oral, with respect to the subject matter hereof,
and supersedes and terminates all prior or contemporaneous understandings or agreements, whether written or oral, between GSK and
Flamel with respect to such subject matter. No terms or provisions of this Agreement will be varied or modified by any prior or
subsequent statement, conduct or act of either of the Parties, except that the Parties may amend this Agreement by written instruments
specifically referring to and executed in the same manner as this Agreement. To the extent that there is any inconsistency between
this Agreement and the License Agreement, this Agreement will govern.

 

Section 7.10         Headings.
The captions to the Articles and Sections hereof are not a part of this Agreement, but are included merely for convenience of reference
only and will not affect its meaning or interpretation.

 

Section 7.11         Rules
of Construction.

 

(i)          The
Agreement will be construed as if both parties drafted the Agreement jointly, and will not be construed against either party as
principal drafter.

 

(ii)         Unless
otherwise provided, all references to months, quarters or years are references to calendar months, calendar quarters or calendar
years.

 

(iii)        Any
reference to any federal, national, state, local or foreign statute or law will be deemed to also refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.

 

    	13

    	 

    

 

CONFIDENTIAL TREATMENT REQUESTED

[***] – THE CONFIDENTIAL PORTION
OF THIS AGREEMENT WHICH HAS BEEN REDACTED IS MARKEED WITH BRACKETS (“[***]”). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

 

(iv)        The
English language version of this Agreement will control and any translations of this Agreement will be for convenience purposes
only for the Party making such translation and do not embody any agreement between the Parties.

 

Section 7.12         No
Third Party Beneficiaries. All rights, benefits and remedies under this Agreement are solely intended for the benefit of Flamel
and GSK, and no Third Party will have any rights whatsoever to (i) enforce any obligation contained in this Agreement, (ii) seek
a benefit or remedy for any breach of this Agreement, or (iii) take any other action relating to this Agreement under any legal
theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence and
strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.

 

Section 7.13         Counterparts.
This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument. Facsimile signatures will be binding on the Parties.

 

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

 

	FLAMEL TECHNOLOGIES, S.A.	 	SB PHARMCO PUERTO RICO, INC.
	 	 	 
	By:	 	 	By:	 
	Name:	 	 	Name:	 
	Title:	 	 	Title:	 

 

    	14

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