Exhibit 10.1


 


FORBEARANCE AND AMENDMENT
AGREEMENT


 


This FORBEARANCE AND AMENDMENT AGREEMENT, dated
as of January 26, 2017 (this “Agreement”), is made by and among ALLIQUA BIOMEDICAL, INC., a Delaware
Corporation (the “Borrower”), AQUAMED
TECHNOLOGIES, INC., a Delaware corporation (the “Guarantor”; the Borrower and the Guarantor are
each also referred to herein individually as an “Obligor” and collectively as the “Obligors”)
and PERCEPTIVE CREDIT HOLDINGS, L.P., a Delaware limited partnership (the “Lender”). Unless otherwise
defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings
provided in the Credit Agreement (defined below).


 


WITNESSETH:


 


WHEREAS, the Borrower, the Guarantor and the
Lender are parties to that certain Credit Agreement and Guaranty, dated as of May 29, 2015 (the “Credit Agreement”);


 


WHEREAS, pursuant to Section 8.4(b) of the Credit
Agreement, (a) Consolidated Total Revenue of the Borrower for the twelve consecutive month period ended September 30, 2016 was
required to be $22,250,000 and (b) Consolidated Total Revenue of the Borrower for the twelve consecutive month period ended December
31, 2016 was required to be $24,600,000;


 


WHEREAS, the Borrower has requested that the
Lender agree to certain amendments and modifications to the Credit Agreement as further described herein; and


 


WHEREAS, the Lender is willing to agree to such
amendments and modifications subject to the terms and conditions set forth herein.


 


NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained herein, the parties agree as follows:


 


Article
I

definitions


 


SECTION 1.1.     Certain Terms. The following
terms (whether or not highlighted in bold and/or italics) when used in this Agreement, including its preamble and recitals, shall
have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):


 


“Agreement” is defined
in the preamble.


 


“Borrower” is defined
in the preamble.


 


“Chesapeake Contribution and Merger
Agreement” means, collectively, that certain Contribution Agreement and Plan of Merger, dated as of October 5, 2016,
as subsequently amended or otherwise modified, among the Company, Alliqua Holdings, Inc., a wholly owned Subsidiary of the Company
(“New Alliqua”), Chesapeake Merger Corp., a wholly owned subsidiary of Alliqua Holdings, Inc. (“Chesapeake
Merger Corp”) and Soluble Systems, LLC and all exhibits, addendums and other ancillary documents and instruments
relative thereto or all or any portion of the Chesapeake Transaction.


 




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“Chesapeake Merger Corp”
has the meaning provided within the definition of “Chesapeake Contribution and Merger Agreement”.


 


“Chesapeake Transaction”
means the transactions contemplated pursuant to the Chesapeake Contribution and Merger Agreement, including (i) the proposed reorganization
resulting from the merger of Chesapeake Merger Corp with and into the Borrower, (ii) the conversion of the Borrower’s Common
Stock into common stock, par value $0.001 per share, of New Alliqua, and (iii) the contribution by Soluble Systems, LLC of substantially
all of its assets to the surviving corporation of the above referenced merger.


 


“Credit Agreement”
is defined in first recital.


 


“Forbearance and Amendment Effective
Date” is defined in Article IV.


 


“Guarantor” is defined
in the preamble.


 


“Lender” is defined
in the preamble.


 


“New Alliqua” has
the meaning provided within the definition of “Chesapeake Contribution and Merger Agreement”.


 


“Obligor” is defined
in the preamble.


 


“Specified Defaults”
is defined in Section 2.1(a).


 


“Termination Date”
is defined in Section 2.1(b).


 


Article
II

FORBEARANCE, ETC.


 


SECTION 2.1.     Forbearance, etc.


 


(a)          The
Borrower acknowledges and agrees that it was in Default of Section 8.4(b) of the Credit Agreement as of both September 30, 2016
and December 31, 2016 (such Defaults being herein referred to as the “Specified Defaults”). The Lender
hereby agrees that, with respect to the Specified Defaults (but only the Specified Defaults), it will refrain and forebear from
exercising or pursuing any rights or remedies under the Credit Agreement or otherwise (including imposing a default rate of interest
in respect of the Specified Defaults pursuant to Section 3.6 of the Credit Agreement) or any other Loan Document until (but only
until) the Termination Date. Any term or provision hereof to the contrary notwithstanding, the Lender is not waiving any of its
rights or remedies with respect to the Specified Defaults or any other Default, but instead is simply agreeing not to take remedial
action with respect to the Specified Defaults until the Termination Date.


 




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(b)       The
“Termination Date” shall mean the earlier of (i) March 31, 2017, (ii) the date when the Lender becomes
aware that any other Default (other than any Specified Default) has occurred and is continuing, and (iii) the date on which the
Lender becomes aware that the Chesapeake Transaction will not be consummated and the Chesapeake Contribution and Merger Agreement
has been terminated. Upon the occurrence of the Termination Date the Lender may, with respect to either or both of the Specified
Defaults, pursue any rights and remedies available to it under the Credit Agreement or any other Loan Document, or pursuant to
law or otherwise, with respect to any Defaults that have then occurred and are outstanding (including the Specified Defaults),
including, but not limited to, declaring all or any portion of the outstanding principal amount of the Loan and other Obligations
to be immediately due and payable, imposing a default rate of interest in respect of the Obligations in accordance with Section
3.6 of the Credit Agreement, or pursuing any or all other rights and remedies of the Lender as a secured party under the UCC, the
Pledge and Security Agreement or any other Loan Document.


 


(c)       The
Company shall not enter into any amendment or otherwise modify the Chesapeake Contribution and Merger Agreement, or waive any term,
provision or condition relative thereto or to all or any portion of the Chesapeake Transaction, in each case, in a manner that
is materially adverse to the interests of the Lender, without the prior written consent of the Lender. In addition, as a condition
precedent to consummating the Chesapeake Transaction (or any portion thereof), in the event the Company’s common stock is
(or is to be) converted into common stock of New Alliqua, prior to or simultaneously with the consummation of such conversion an
amended and replacement Warrant shall have been issued by New Alliqua to the Lender (or its designee or assign) that, among other
things, reflects such conversion and otherwise contains terms and provisions reasonably satisfactory to the Lender.


 


SECTION 2.2.  Limited Waiver. Lender
hereby grants the Borrower a one-time waiver of Section 8.5 of the Credit Agreement in order to allow the Borrower to lend $350,000
to Soluble Systems LLC in order to extend the Outside Date (as defined in the Chesapeake Contribution and Merger Agreement) until
February 28, 2017, in accordance with Section 11.01(d)(iii) of the Chesapeake Contribution and Merger Agreement. For the avoidance
of doubt, nothing herein shall be construed as a continuing waiver of Section 8.5 or any other provision of the Loan Documents.


 


Article
III

amendmentS TO CREDIT AGREEMENT


 


The provisions of the Credit Agreement referred
to below are hereby amended in accordance with this Article III.  Except as expressly so amended, the parties
hereto expressly acknowledge and agree that all other terms and provisions of the Credit Agreement and each other Loan Document
shall continue in full force and effect without amendment or other modification of any type.


 




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SECTION 3.1.    Amendment to Section 8.4(a).
Effective on (and subject to the occurrence of) the Forbearance and Amendment Effective Date, Section 8.4(a) of the Credit Agreement
is hereby amended and restated in its entirety as follows:


 


“(a)       The Loan Parties, on
a consolidated basis, shall maintain at all times a minimum balance of $2,000,000 in unrestricted, unencumbered cash in one or
more Controlled Accounts that is free and clear of all Liens, other than Liens granted hereunder in favor of the Lender and Permitted
Liens. No later than three (3) Business Days following the end of each calendar week, the Borrower shall deliver to the Lender
a written statement, certified by an Authorized Officer of the Borrower, which evidences in reasonable detail the amount of unrestricted,
unencumbered cash held in such Controlled Accounts as of the end of the previous calendar week;”


 


Article
IV

conditions precedent


 


This Agreement shall become effective upon,
and shall be subject to, the prior or simultaneous satisfaction of each of the following conditions in a manner reasonably satisfactory
to the Lender (the date when all such conditions are so satisfied being the “Forbearance and Amendment Effective Date”):


 


SECTION 4.1.     Amended and Restated Warrant.
The Lender shall have received an Amended Warrant, in the form of Exhibit A hereto, fully executed by the Borrower.


 


SECTION 4.2.     Chesapeake Contribution and
Merger Agreement. The Lender shall have received a true and correct copy of the Chesapeake Contribution and Merger Agreement
and such other documents and instruments specified in Section 5.3 below.


 


SECTION 4.3.     Counterparts. The Lender
shall have received counterparts of this Agreement executed on behalf of the Borrowers, the Guarantor, and the Lender.


 


SECTION 4.4.     Effective Date Certificate.
The Lender shall have received a certificate, dated as of the Forbearance and Amendment Effective Date and duly executed and delivered
by an Authorized Officer of the Borrower and each Guarantor certifying as to the matters set forth in Articles V and VI
hereof, in form and substance satisfactory to the Lender.


 


SECTION 4.5.     Costs and Expenses, etc.
The Lender shall have received all fees, costs and expenses due and payable pursuant to Section 11.3 of the Credit Agreement (including
without limitation the reasonable fees and expenses of Morrison & Foerster LLP, counsel to the Lender), if then invoiced, together
with any other fees separately agreed to by the Borrower and the Lender, such fees, costs and expenses not to exceed $15,000 in
the aggregate.


 


SECTION 4.6.     Satisfactory Legal Form,
etc. All legal matters incident to the effectiveness of this Agreement shall be reasonably satisfactory to the Lender and its
counsel.


 


Article
V

Representations and Warranties


 


To induce the Lender to enter into this Agreement,
each Obligor represents and warrants to the Lender as set forth below.


 




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SECTION 5.1.     Validity, etc. This Agreement
and the Credit Agreement (after giving effect to this Agreement) each constitutes the legal, valid and binding obligation of each
Obligor, enforceable in accordance with its respective terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.


 


SECTION 5.2.     Representations and Warranties,
etc. Immediately prior to, and immediately after giving effect to, this Agreement the following statements shall be true and
correct:


 


(a)            the
representations and warranties set forth in each Loan Document (as defined in the Credit Agreement) shall, in each case, be, in
the case of representations and warranties qualified as to knowledge, materiality, Material Adverse Effect (as defined in the Credit
Agreement) or any similar qualification, true and correct in all respects, and, in the case of those representations and warranties
that are not so qualified, in all material respects, with the same effect as if then made (unless stated to relate solely to an
earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier
date); and


 


(b)            no
Default (other than the Specified Defaults) shall have then occurred and be continuing.


 


SECTION 5.3.     Chesapeake Contribution and
Merger Agreement. Attached as Exhibit B hereto is a true and correct copy of the Chesapeake Contribution and Merger
Agreement, together with all exhibits and attachments thereto and all amendments, waivers and other modifications thereto since
October 5, 2016.


 


Article
VI

Confirmation


 


SECTION 6.1.     Reaffirmation. Each Obligor
hereby consents to the modifications made to the Loan Documents pursuant to this Agreement and hereby agrees that, after giving
effect to this Agreement, each Loan Document to which it is a party, and all Obligations thereunder (including the guarantees made
pursuant to Article X of the Credit Agreement), are and shall continue to be in full force and effect and the same are hereby ratified
in all respects, except that upon the occurrence of the Forbearance and Amendment Effective Date, all references in such Loan Documents
to the “Credit Agreement”, “Loan Documents”, “thereunder”, “thereof”, or words
of similar import shall mean the Credit Agreement and the other Loan Documents, as amended or otherwise modified by this Agreement.


 


SECTION 6.2.     Validity, etc. Each Obligor
hereby represents and warrants, as of the Forbearance and Amendment Effective Date, that immediately after giving effect to this
Agreement, each Loan Document, in each case as modified by this Agreement (where applicable and whether directly or indirectly),
to which it is a party continues to be a legal, valid and binding obligation of such Obligor, enforceable against such Person in
accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.


 




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Article
VII

Miscellaneous


 


SECTION 7.1.     No Waiver. The Lender’s
agreement not to pursue its rights and remedies until the occurrence of the Termination Date as described in Section 2.1 herein
is temporary and limited in nature. Except as expressly provided herein, (i) nothing contained herein shall be deemed to constitute
a waiver of the Specified Defaults or any other Default or Event of Default or compliance with any term or condition contained
in the Credit Agreement or any of the other Loan Documents or constitute a course of conduct or dealing among the parties and (ii)
the Lender reserves all rights, privileges and remedies under the Credit Agreement and the other Loan Documents.


 


SECTION 7.2.     Severability. In case
any provision of or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.


 


SECTION 7.3.     Integration. This Agreement,
together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter
hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.


 


SECTION 7.4.     Cross-References; Headings.
References in this Agreement to any Article or Section are, unless otherwise specified, to such Article or Section of this Agreement.
Headings and captions used in this Agreement are included for convenience of reference only and shall not be given any substantive
effect.


 


SECTION 7.5.     Loan Document Pursuant to
Credit Agreement. This Agreement is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated therein) be construed, administered and applied in accordance with all of the terms and provisions of the Credit Agreement,
as amended hereby, including Article XI thereof and all rules of interpretation set forth in Article I thereof.


 


SECTION 7.6.     Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns.


 


SECTION 7.7.     Counterparts. This Agreement
may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any
of the parties hereto may execute this Agreement by signing any such counterpart.  Delivery of an executed counterpart of
a signature page to this Agreement by facsimile (or other electronic transmission) shall be effective as delivery of a manually
executed counterpart of this Agreement.


 




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SECTION 7.8.     Governing Law. This
AGREEMENT shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to
principles of conflicts of laws that would result in the application of the laws of any other jurisdiction; provided that Section
5-1401 of the New York General Obligations Law shall apply.


 


SECTION 7.9.     Full Force and Effect; Limited
Amendment. Except as expressly amended hereby, the Obligors each jointly and severally agree that all of the representations,
warranties, terms, covenants, conditions and other provisions of the Credit Agreement and the other Loan Documents shall remain
unmodified and shall continue to be, and shall remain, in full force and effect in all respects.  The amendments and other
waivers and modifications set forth in this Agreement shall be limited precisely as provided for herein to the provisions expressly
amended herein or otherwise modified or waived hereby and shall not be deemed to be an amendment to, waiver of, consent to or modification
of any other term or provision of the Credit Agreement or any other Loan Document or of any transaction or further or future action
on the part of any Loan Party which would require the consent of the Lender under the Credit Agreement or any of the Loan Documents.


 


[Signature pages to follow]


 




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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered as of the day and year first above written.


 


	 	BORROWER:
	 	 
	 	ALLIQUA BIOMEDICAL, INC.,
	 	 	 
	 	By	/s/ Brian M. Posner
	 	Name: Brian M. Posner
	 	Title: CFO
	 	 
	 	GUARANTOR:
	 	 
	 	AQUAMED TECHNOLOGIES, INC.,
	 	 	 
	 	By	/s/ Brian M. Posner
	 	Name: Brian M. Posner
	 	Title: CFO


 




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	LENDER:	 
	 	 
	PERCEPTIVE CREDIT HOLDINGS, LP	 
	 	 
	By Perceptive Credit Opportunities GP, LLC, 	 
	its general partner	 
	 	 	 
	By	/s/ Sandeep Dixit	 
	 	Sandeep Dixit	 
	 	Chief Credit Officer	 
	 	 	 
	By	/s/ Sam Chaula	 
	Name: Sam Chaula	 
	Title: Portfolio Manager	 


 




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