Document:

Exhibit 10.49

 

THE
COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

SUPPLY
AGREEMENT

 

BY AND
BETWEEN

 

ANTHROGENESIS
CORPORATION

 

AND

 

ALLIQUA,
INC.

 

NOVEMBER
14, 2013

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	PAGE
	 	 	 
	ARTICLE 1  DEFINITIONS	1
	 	 
	ARTICLE 2  SUPPLY OF MANUFACTURED PRODUCTS	2
	 	 
	2.1	Sale and Purchase of Manufactured Products	2
	2.2	Forecasts; Firm Orders	3
	2.3	Shipment and Delivery	3
	2.4	Alliqua Right to Manufacture	4
	2.5	Manufacture and Supply of ECMs	4
	 	 	 
	ARTICLE 3  REGULATORY AND QUALITY MATTERS	4
	 	 
	3.1	Regulatory Responsibility	4
	3.2	Change Control	5
	3.3	Records	5
	3.4	Testing	5
	3.5	Regulatory Inquiries	5
	3.6	Notice of Regulatory Inspections	6
	3.7	Quality Agreement	6
	3.8	Quality Audits	6
	3.9	Intentionally Omitted	7
	3.10	Cooperation	7
	3.11	Recalls	7
	3.12	Complaints	8
	3.13	Warning Letters	8
	3.14	Inquiries from Health Care Professionals	8
	3.15	Debarment	8
	3.16	Additional Covenants of Alliqua	8
	 	 	 
	ARTICLE 4  PRICE AND PAYMENT TERMS	9
	 	 
	4.1	Purchase Price	9
	4.2	Taxes	9
	4.3	Freight and Insurance	9
	4.4	Payments	9
	4.5	Interest Charges	10
	4.6	Pricing	10
	 	 	 
	ARTICLE 5  INSPECTION OF MANUFACTURED PRODUCTS	10
	 	 
	5.1	Inspection by Alliqua	10
	5.2	Disputes Over Manufactured Products	10
	5.3	Replacement of Manufactured Products That Are Not Acceptable Manufactured Products	10

 

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	5.4	Exclusive Remedy	11
	 	 	 
	ARTICLE 6  REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS	11
	 	 
	6.1	Mutual Representations and Warranties	11
	6.2	Additional CCT Representations and Warranties	11
	6.3	Alliqua Compliance with Applicable Law	12
	 	 	 
	ARTICLE 7  INDEMNIFICATION AND INSURANCE	12
	 	 
	7.1	CCT Indemnification	12
	7.2	Alliqua Indemnification	12
	7.3	Indemnification Procedures	13
	7.4	Limitation of Liability	13
	7.5	Insurance	13
	 	 	 
	ARTICLE 8  CONFIDENTIAL INFORMATION	14
	 	 
	8.1	Confidentiality	14
	8.2	Authorized Disclosure	14
	8.3	Return of Confidential Information	15
	8.4	Publicity; Terms of the Agreement; Confidential Treatment	15
	8.5	Technical Publication	16
	8.6	Equitable Relief	16
	 	 	 
	ARTICLE 9  TERM AND TERMINATION	16
	 	 
	9.1	Term	16
	9.2	Termination	16
	9.3	Effects of Termination	18
	 	 	 
	ARTICLE 10  GENERAL PROVISIONS	18
	 	 	 
	10.1	Entire Agreement; Amendment	18
	10.2	Force Majeure	18
	10.3	Notices	19
	10.4	No Strict Construction; Headings	20
	10.5	Assignment	20
	10.6	Performance by Affiliates	20
	10.7	Further Actions	20
	10.8	Severability	20
	10.9	No Waiver	21
	10.10	Independent Contractors	21
	10.11	Governing Law	21
	10.12	Counterparts	21

 

    	-ii-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

SUPPLY AGREEMENT

 

THIS SUPPLY AGREEMENT
(this “Agreement”) dated as of November 14, 2013 (the “Effective Date”), by and between Anthrogenesis
Corporation, a Delaware corporation doing business as Celgene Cellular Therapeutics (“CCT”), and Alliqua, Inc.,
a Florida corporation (“Alliqua”). Alliqua and CCT may each be referred to as a “Party” or
collectively be referred to as the “Parties”.

PREAMBLE

 

A.           CCT
and Alliqua are entering into a License, Marketing and Development Agreement (the “License Agreement”) concurrently
herewith, under which CCT will grant certain rights to Alliqua to market and sell the Licensed Products; and

 

B.           In
connection with the License Agreement, CCT wishes to supply to Alliqua, and Alliqua wishes to purchase from CCT, Alliqua’s
entire requirements of Manufactured Product for distribution and sale in the Territory;

 

NOW, THEREFORE,
in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, CCT and Alliqua agree as follows:

 

ARTICLE
1

DEFINITIONS

 

All capitalized terms
used but not defined herein shall have the meaning ascribed to such term in the License Agreement. In addition to the terms defined
in the License Agreement and elsewhere in this Agreement, the following terms have the meanings indicated:

 

“Acceptable
Manufactured Products” has the meaning set forth in Section 5.1.

 

“Act”
means the Federal Food, Drug, and Cosmetic Act, as amended, and the rules, regulations, guidelines and requirements of the FDA
as may be in effect from time to time.

 

“Alliqua Indemnified Parties”
has the meaning set forth in Section 7.1.

 

“Calendar
Year” means each successive period of twelve (12) calendar months commencing on January 1.

 

“CCT Indemnified
Parties” has the meaning set forth in Section 7.2.

 

“CCT Recall
Event” has the meaning set forth in Section 3.11.

 

“CFR”
has the meaning set forth in Section 3.1.

 

    	 

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

“cGTPs”
means current Good Tissue Practices as described in Part 1271 of Title 21 of the U.S. Code of Federal Regulations.

 

“FDA”
means the United States Food and Drug Administration or any successor agency performing a similar function.

 

“Firm Order”
means a written irrevocable firm purchase order for Manufactured Products, which order shall include a delivery schedule specifying
the required delivery date and quantity for each Manufactured Product stock keeping unit ordered and the location to which shipment
of Manufactured Products is to be delivered.

 

“Forecast”
has the meaning set forth in Schedule 2.2, subsection (a)(ii).

 

“Long Range
Forecast” has the meaning set forth in Schedule 2.2, subsection (a)(i).

 

“Losses”
has the meaning set forth in Section 7.1.

 

“Manufactured
Product” means Biovance.

 

“Permitted
Subcontractor” has the meaning set forth in Section 2.1(d).

 

“Product Samples”
has the meaning set forth in Section 3.4.

 

“Purchase
Price” has the meaning set forth in Section 4.1.

 

“Quality Agreement”
has the meaning set forth in Section 3.7.

 

“Required
Manufacturing Changes” has the meaning set forth in Section 3.2.

 

“Specifications”
means the applicable specifications for manufacturing, storage, testing, and bulk packaging of a Manufactured Product as set forth
on Schedule A hereto, as it may be amended from time to time.

 

“Term”
has the meaning set forth in Section 9.1.

 

“Third Party
Claims” has the meaning set forth in Section 7.1.

 

ARTICLE
2

SUPPLY OF MANUFACTURED PRODUCTS

 

2.1          Sale
and Purchase of Manufactured Products.

 

(a)          Subject
to the terms and on the conditions set forth in this Agreement, commencing no earlier than April 1, 2014, CCT shall supply and
sell to Alliqua, and Alliqua shall purchase from CCT, Alliqua’s entire requirements of bulk Manufactured Products for exploitation
in the Territory under the License Agreement. The bulk form and bulk packaging of Manufactured Products shall be in accordance
with the Specifications.

 

    	-2-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(b)          CCT
shall manufacture, store at its facility, and test all bulk Manufactured Products or cause the same to be manufactured, stored
at the manufacturing facility, and tested, in conformity with the applicable Specifications for such Manufactured Product and in
compliance with all applicable Law, including cGTPs, and the terms and conditions of this Agreement and the Quality Agreement.

 

(c)          Alliqua
shall be solely responsible for all labels, labeling, tracking letters, and packaging of finished Manufactured Products, including
package inserts and outserts for each Manufactured Product in the Territory.

 

(d)          Subject
to any legal requirements under applicable Law, CCT may, at its sole option, engage or use subcontractors and suppliers that it
reasonably believes are qualified to perform some or all of CCT’s obligations under this Agreement (each, a “Permitted
Subcontractor”).

 

(e)          Without
limiting the foregoing, all Permitted Subcontractors shall be subject to the applicable terms and conditions of this Agreement
and the Quality Agreement and no agreement with any Permitted Subcontractor shall release CCT from any of its obligations under
this Agreement or the Quality Agreement. CCT shall remain responsible for any services performed by such Permitted Subcontractor
to the same extent as if it had performed the obligations itself.

 

(f)          For
the purposes of clarity, nothing in this Agreement shall provide a right of reference to support any filing by Alliqua or an Alliqua
Affiliate with the FDA for any product other than the Manufactured Products or to support any similar filing with another Governmental
Authority in or out of the Territory.

 

2.2          Forecasts;
Firm Orders. The Parties shall comply with the provisions of Schedule 2.2 to this
Agreement with respect to the matters set forth therein.

 

2.3          Shipment
and Delivery.

 

(a)          CCT
shall deliver to Alliqua the Manufactured Products ordered pursuant to a Firm Order by the required delivery dates therefor EXW
(Incoterms 2010) CCT’s designated facility in the United States. For purposes of clarity, Alliqua bears all risk and costs
from the time Alliqua or its carrier picks up the Manufactured Products at CCT’s designated facility in the United States
and CCT has no obligation to load the Manufactured Products or clear them for export.

 

(b)          CCT
shall package Manufactured Products in bulk for shipment in accordance with practices that are customary and reasonable in the
industry with respect to similar products and comply with applicable Law, unless otherwise specified in writing by Alliqua at least
ten (10) Business Days prior to such shipment, in which event CCT shall package Manufactured Products in bulk for shipment in accordance
with such instructions and any commercially reasonable, documented actual external costs incurred by CCT (without markup) on account
of the bulk packaging changes requested by Alliqua shall be promptly reimbursed by Alliqua.

 

    	-3-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(c)          Prior
to shipment, CCT shall perform release testing for the Manufactured Product pursuant to the Specifications, cGTPs and the Quality
Agreement.

 

2.4          Alliqua
Right to Manufacture.

 

(a)          If
CCT terminates this Agreement pursuant to Section 9.2(a), or Alliqua terminates this Agreement pursuant to Section 9.2(b), (c)
or (d), then, for so long as Alliqua has the right to Commercialize the Manufactured Products in the Territory under the License
Agreement, Alliqua or any person or entity designated by Alliqua (including an Affiliate of Alliqua) may, following notice to CCT,
manufacture, store at is facility, and test Alliqua’s requirements of the Manufactured Products for Commercialization in
the Field in the Territory in accordance with the License Agreement.

 

(b)          If
Alliqua elects to manufacture, store, and test Alliqua’s requirements of the Manufactured Products in accordance with Section
2.4(a), CCT shall cooperate with and assist Alliqua or any person or entity designated by Alliqua (including an Affiliate of Alliqua)
in transferring the processes for manufacturing, storing and testing the Manufactured Product to Alliqua or any person or entity
designated by Alliqua (including an Affiliate of Alliqua).

 

2.5          Manufacture
and Supply of ECMs. Prior to the anticipated date of Regulatory Clearance and/or Approval of the first of CCT’s extracellular
matrix derived from the human placenta (“ECM”) products, the Parties shall enter into a supply agreement with
respect to such ECM product that is on substantially the same terms as this Agreement, except that the purchase price shall be
as set forth in Schedule 2.5 to this Agreement.

 

ARTICLE
3

REGULATORY AND QUALITY MATTERS

 

3.1          Regulatory
Responsibility. Subject to the terms of this Agreement and the License Agreement, all matters in the Territory regarding obtaining
and supporting Regulatory Clearance and/or Approval of the Manufactured Products, and manufacturing and testing of the Manufactured
Products in compliance with the applicable Specifications for the Manufactured Product and applicable Law (including cGTPs), shall
be the responsibility of, and shall remain under the control of CCT. Except as set forth in Section 3.2 below, any costs or expenses
required to comply with CCT’s obligations under this Section 3.1 shall be borne by [****]. Each Party shall be registered
with the FDA’s Center for Biologics Evaluation and Research pursuant to 21 Code of Federal Regulations (“CFR”)
Part 1271, as and when their activities with respect to Manufactured Products require such registration. Each Party shall promptly
(within three (3) Business Days) provide the other Party with copies of all communications received from any Regulatory Authority
concerning the Manufactured Products which directly or indirectly affect or relate to the manufacturing, storage, testing, packaging
or labeling thereof, and any filings that directly or indirectly affect or relate to the manufacturing, storage, testing, packaging
or labeling of the Manufactured Products to be made to any such agency for prior review and comment at least five (5) Business
Days prior to such submission. Each Party shall provide notice to the other Party of meetings with any Regulatory Authority, whether
via electronic means, in person, or otherwise, which affect or relate to the manufacturing, storing, testing, packaging or labeling
of the Manufactured Products. CCT will require each Permitted Subcontractor to keep CCT and Alliqua fully and promptly advised
of any inspections, inspectional observations and other communications and interactions between such Permitted Subcontractor and
any Regulatory Authority which may directly or indirectly affect or relate to the manufacturing, storage, testing, packaging or
labeling of any Manufactured Products. In the event of any inconsistency between the provisions of this Section 3.1 and the provisions
of the License Agreement, the provisions of the License Agreement shall control.

 

    	-4-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

3.2           Change
Control. CCT and Alliqua shall cooperate in timely making any and all changes to the Specifications or manufacturing processes
that are required by applicable Law (collectively, “Required Manufacturing Changes”). The commercially reasonable,
documented costs attributable to the Required Manufacturing Change, including the cost of a reasonable quantity (in light of the
Forecasts submitted by Alliqua) of raw materials, work-in-process, Manufactured Products and bulk packaging materials rendered
obsolete as a result of any such Required Manufacturing Changes, shall be borne [****].

 

3.3           Records.
CCT shall, and shall cause its Affiliates and each Permitted Subcontractor to, keep appropriate accounts, notes, data and records
of the work performed under this Agreement in accordance with applicable Law, including cGTPs, and the terms and conditions of
this Agreement and the Quality Agreement. CCT shall provide Alliqua with a copy of a certificate of analysis with each batch of
Manufactured Products delivered to Alliqua, as set forth in the Quality Agreement.

 

3.4           Testing.
CCT shall be solely responsible for (a) taking and maintaining quality control samples of all Manufactured Products delivered to
Alliqua (collectively, the “Product Samples”), and (b) testing Product Samples, in each case, in accordance
with the Quality Agreement. CCT shall promptly provide Alliqua data resulting from testing related to the Product Samples for distribution
in the Territory as such information becomes available, including any discovery of any negative or adverse trending in testing
data.

 

3.5           Regulatory
Inquiries. Without limiting any provision of the License Agreement, upon being contacted (and, in the case of CCT, upon any
Permitted Subcontractor being contacted) by any Regulatory Authority for any regulatory purpose pertaining to this Agreement or
to the Manufactured Products, including notice of the initiation of any inquiries, notices or inspection activity by any such agency,
a Party shall immediately notify the other Party and provide the other Party with (a) a reasonable description of any such inquiries
and related documentation, (b) an opportunity to advise and comment with respect thereto and (c) if appropriate, an opportunity
to participate with respect thereto to the extent such matters relate to the Manufactured Products in the Territory.

 

    	-5-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

3.6          Notice
of Regulatory Inspections. Each Party shall (a) advise the other Party of any requests by any Regulatory Authority (including,
in the case of CCT, any such requests made to a Permitted Subcontractor) for any inspections with respect to the manufacturing,
storing, testing, packaging and/or labeling of Manufactured Products, (b) provide the other Party with copies of any correspondence
related thereto, and, to the extent it (or, in the case of CCT, by a Permitted Subcontractor) becomes aware of the results, observations
or outcome of any inspections or audits of the facilities or operations involved in the manufacture, storage, testing, packaging
and/or labeling of the Manufactured Products conducted by any Regulatory Authority, including providing the other Party an opportunity
to advise and comment with respect to any correspondence to be provided by such Party (or, in the case of CCT, by a Permitted Subcontractor)
to the applicable agency, and (c) notify the other Party of any such information as it relates to the Manufactured Products in
the Territory within three (3) Business Days of obtaining the information.

 

3.7          Quality
Agreement. Within sixty (60) Business Days after the Effective Date, CCT and Alliqua shall negotiate in good faith the terms
of, and enter into, a reasonable and customary quality agreement (the “Quality Agreement”). The Quality Agreement
shall include provisions with respect to, among other things, release testing, change control procedures with respect to the Specifications
and the manufacturing processes for the Manufactured Products, stability testing, recalls of any Manufactured Products, and record
retention requirements with respect to recalls. In the event of any conflict between the terms of the Quality Agreement and the
terms of this Agreement, the terms of the Quality Agreement shall govern.

 

3.8          Quality
Audits. 

 

(a)          Upon
reasonable advance notice and during reasonable business hours, Alliqua shall have the right to inspect and audit those portions
of CCT’s and its Affiliates’ and its Permitted Subcontractors’ facilities in which the Manufactured Products
are manufactured, stored or tested, to ascertain compliance with cGTPs, applicable Law, and the terms and conditions of this Agreement
and the Quality Agreement; provided, however, that (i) Alliqua’s representatives shall follow all security and facility access
procedures as reasonably required by CCT or its Affiliate or Permitted Subcontractor, as applicable, and (ii) Alliqua may not exercise
its right under this Section 3.8(a) more than once in any twelve (12)-month period (unless such inspection and audit reveals a
material compliance issue, in which event Alliqua shall have the right to conduct a follow-up inspection and audit to verify that
such issue has been remedied). CCT shall use commercially reasonable efforts to promptly resolve, and to cause its Affiliates and
its Permitted Subcontractors to promptly resolve, any quality issues raised by any inspections and audits of their respective facilities.

 

(b)          Upon
reasonable advance notice and during reasonable business hours, CCT shall have the right to inspect and audit (i) those portions
of Alliqua’s facilities in which the Manufactured Products are stored, handled or labeled and (ii) if Alliqua elects to manufacture,
store, and test Alliqua’s requirements of the Manufactured Products or designate another person or entity to manufacture,
store, and test Alliqua’s requirements of the Manufactured Products, in accordance with Section 2.4(a), those portions of
Alliqua’s facilities or those of its designated Person, as the case may be, in which the Manufactured Products are manufactured,
stored, handled or labeled, in each case, to ascertain compliance with cGTPs, applicable Law, and the terms and conditions of this
Agreement and the Quality Agreement; provided, however, that (i) CCT’s representatives shall follow all security and facility
access procedures as reasonably required by Alliqua, as applicable, and (ii) CCT may not exercise its right under this Section
3.8(a) more than once in any twelve (12)-month period (unless such inspection and audit reveals a material compliance issue, in
which event CCT shall have the right to conduct a follow-up inspection and audit to verify that such issue has been remedied).
Alliqua shall use commercially reasonable efforts to promptly resolve any quality issues raised by any inspections and audits of
its facilities.

 

    	-6-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(c)          Except
as otherwise set forth in this Agreement, each Party shall, at its sole cost and expense, maintain in full force and effect all
necessary licenses, approvals, permits and other authorizations required by applicable Law to carry out its duties and obligations
under this Agreement and the Quality Agreement.

 

3.9          Intentionally
Omitted.

 

3.10        Cooperation.
The Parties will cooperate in good faith in responding to any Regulatory Authority inquiry or in making any report to the Regulatory
Authority with respect to Manufactured Products. Notwithstanding anything to the contrary in this Agreement (and without limiting
CCT’s obligation under the License Agreement to obtain, support and maintain Regulatory Clearances and/or Approvals), CCT
will have final authority for regulatory decisions and responsibility for all communications with any Regulatory Authority with
respect to obtaining or maintaining Regulatory Approval of the Manufactured Products.

 

3.11        Recalls.
CCT and Alliqua will each notify the other Party promptly if it becomes aware that a Manufactured Product is the subject of a recall
or market withdrawal that is mandated by a Regulatory Authority, and the Parties will reasonably cooperate in the handling and
disposition of such recall or market withdrawal; provided, however, in the event of a disagreement as to any matters related to
any such recall or market withdrawal, other than the determination of who will bear the costs as set forth in the immediately following
sentences, CCT will have the final authority with respect to any product recall or withdrawal relating to Manufactured Products,
including any recall or market withdrawal that is not mandated by a Regulatory Authority. [****] will bear the cost of all recalls
or market withdrawals of Manufactured Products purchased by Alliqua pursuant to this Agreement where such recall or market withdrawal
is the direct result of CCT’s or a Permitted Subcontractor’s [****] Recall Event”). [****] will bear the
cost of all recalls or market withdrawals of Manufactured Products purchased by Alliqua pursuant to this Agreement where such recall
or market withdrawal is the direct result of Alliqua’s [****] Recall Event”). If a recall or market withdrawal
[****], then the costs of such recall or market withdrawal will be [****] will bear the cost of all recalls or market withdrawals
of Manufactured Products purchased by Alliqua pursuant to this Agreement where the recall or market withdrawal is [****]. Alliqua
will maintain records of all sales of Manufactured Product and all customers sufficient to adequately administer a recall or market
withdrawal for the longer of one (1) year after termination or expiration of this Agreement or the period required by applicable
Law. Alliqua will, in all events and regardless of who bears the cost, be responsible for administering the physical aspects of
any recalls or market withdrawals with respect to the Manufactured Products, provided, however, that any reasonable external costs
and expenses incurred by Alliqua relating to the recall or market withdrawal (including, but not limited to reasonable recall destruction
costs) will be allocated between the Parties as set forth above in this Section. Any revenue attributable to Manufactured Products
held or sold by Alliqua (or its designee) that is subject to a recall will be deducted from Net Sales for purposes of the License.
In the event of any recall, if requested by Alliqua, CCT will provide Manufactured Products to Alliqua to replace the recalled
Manufactured Products and, to the extent the recalled Manufactured Products were previously paid for by Alliqua, the cost of such
replacement Manufactured Products shall be allocated between the Parties as set forth above in this Section.

 

    	-7-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

3.12        Complaints.
Alliqua will collect complaint files for the Manufactured Products in accordance with the provisions of the Quality Agreement.
Manufactured Products complaint reports received by Alliqua will be sent to CCT at [****] within twenty-four (24) hours after receipt
of the complaint by Alliqua. Alliqua and CCT will notify each other of any Manufactured Product complaints made by customers that
will or could require a report of an “adverse reaction” to the FDA pursuant to 21 CFR 1271.350, and will thereafter
reasonably cooperate with each other relative to any investigation or inquiry that may be initiated by FDA with respect thereto.
The complaint handling obligations of the Parties will be detailed further within the Quality Agreement and/or the Safety Data
and Exchange Agreement.

 

3.13        Warning
Letters. In the event that either Party (or, in the case of CCT, any Permitted Subcontractor) receives a warning letter from
the FDA or the equivalent from any other Governmental Authority in connection with the Manufactured Product, such Party will notify
the other Party promptly, and in any event within twenty four (24) hours (to the extent legally permitted) after receiving such
warning letter.

 

3.14        Inquiries
from Health Care Professionals. CCT shall provide reasonable assistance to Alliqua in its preparation and filing with appropriate
Regulatory Authorities related to reimbursement and health care insurance filings required for the marketing and distribution of
Manufactured Products in the Territory by Alliqua.

 

3.15        Debarment.
Neither Party shall use any employee or consultant (or, in the case of CCT, any Permitted Subcontractor or employees or consultants
thereof) who has been debarred by any Regulatory Authority, or, to such Party's knowledge, is the subject of debarment proceedings
by a Regulatory Authority. Each Party shall notify the other Party promptly upon becoming aware that any of its employees or consultants
(or, in the case of CCT, any Permitted Subcontractor or employees or consultants thereof) has been debarred or is the subject of
debarment proceedings by any Regulatory Authority.

 

3.16        Additional
Covenants of Alliqua. Alliqua shall:

 

(a)          discharge
its obligations pursuant to this Agreement in accordance with all applicable Laws, including those enforced by the FDA (including
compliance with cGTP);

 

(b)          maintain
the Manufactured Products pending sale to its customers in a facility that is properly equipped to store such Manufactured Products
in accordance with the applicable Manufactured Product labeling; and

 

    	-8-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(c)          comply
in all respects with Article 3 hereof and the Quality Agreement and the Safety Data and Exchange Agreement.

 

ARTICLE
4

PRICE AND PAYMENT TERMS

 

4.1          Purchase
Price.

 

(a)          For
all Manufactured Products ordered pursuant to Firm Orders by Alliqua at any time, Alliqua shall pay CCT a purchase price (“Purchase
Price”) for each conforming quantity of Manufactured Product delivered hereunder in accordance with the terms set forth
in Schedule 4.1 to this Agreement.

 

(b)          If
at any time during the Term, CCT notifies Alliqua in writing that CCT has incurred an increase in the costs associated with manufacturing
the Manufactured Products, the Parties shall promptly negotiate in good faith an increase in the Purchase Price to account for
such increase in costs; provided, however, that if the Parties fail to reach agreement on any such price increase, the resolution
of such disagreement shall be governed by the provisions of Section 13 of the License Agreement.

 

4.2          Taxes.
The Purchase Price and other amounts payable by Alliqua to CCT pursuant to this Agreement shall not be reduced on account of
any taxes unless required by applicable Law. CCT alone shall be responsible for paying any and all taxes (other than any withholding
taxes required by applicable Law to be paid by Alliqua) levied on account of, or measured in whole or in part by reference to,
any payments it receives from Alliqua.

 

4.3          Freight
and Insurance. In addition to the Purchase Price, for the purposes of clarity, Alliqua shall pay all actual freight and insurance
expenses incurred by Alliqua in connection with the sale and shipment of the Manufactured Products.

 

4.4          Payments.

 

(a)          Upon
each delivery of Manufactured Products, CCT shall promptly submit an invoice to Alliqua. All invoices and payments for Manufactured
Products shall be in United States dollars. Alliqua shall pay each invoice (except for any amounts disputed by Alliqua in good
faith) within thirty (30) days after receipt thereof.

 

(b)          If
an inconsistency between any invoice, purchase order, purchase order release, confirmation, acceptance or similar document and
this Agreement exists, the terms of this Agreement shall control.

 

(c)          Payment
due to CCT shall be paid in United States dollars by wire transfer to an account designated in writing by CCT.

 

    	-9-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

4.5           Interest
Charges. If CCT does not receive payment of any sum due to it on or before the due date, simple interest shall thereafter accrue
on the sum due until the date of payment at the rate of [****] per month or, if less, the maximum rate allowable by applicable
Law.

 

4.6           Pricing.
All resale prices of Manufactured Products shall be reviewed by the JSC and Alliqua shall consider in good faith any comments of
the JSC. For purposes of clarity, Alliqua shall have final discretion with respect to resale prices of the Manufactured Products
during the Term, including resale price increases and decreases and the timing thereof.

 

ARTICLE
5

INSPECTION OF MANUFACTURED PRODUCTS

 

5.1           Inspection
by Alliqua. Alliqua may inspect and analyze the Manufactured Products delivered to Alliqua for purposes of determining whether
the Manufactured Products meet the applicable Specifications at the time of delivery thereof (such Manufactured Product, “Acceptable
Manufactured Products”). Alliqua shall notify CCT in writing within thirty (30) days
after the date of delivery to Alliqua (or within thirty (30) days after discovery that any Manufactured
Product is not Acceptable Manufactured Products for reasons that could not reasonably have been detected by Alliqua’s customary
inspection on delivery) of any Manufactured Product or portion thereof which Alliqua is returning because it is not an Acceptable
Manufactured Product, including documentation of the reasons therefor. If CCT does not receive such notice within such thirty (30)-day
period, the shipped Manufactured Products will be deemed accepted as Acceptable Manufactured Products.

 

5.2           Disputes
Over Manufactured Products. CCT shall have a reasonable opportunity not to exceed thirty (30) days from the date of receipt
of the notice described in Section 5.1 to inspect and/or test such Manufactured Product that Alliqua claims is not an Acceptable
Manufactured Product. If CCT, after good faith consultation with Alliqua, disputes any determination by Alliqua that a Manufactured
Product is not an Acceptable Manufactured Product, then representative samples of such Manufactured Product shall be forwarded
to an independent Third Party laboratory jointly selected by CCT and Alliqua, in their reasonable discretion, for analysis, which
analysis shall be performed in compliance with industry standards and applicable Law. The findings of such Third Party laboratory
regarding whether the Manufactured Product was an Acceptable Manufactured Product shall be binding upon the Parties. The cost of
such analysis by such Third Party laboratory shall be borne by the Party whose analysis was not substantiated by the findings of
such Third Party laboratory.

 

5.3           Replacement
of Manufactured Products That Are Not Acceptable Manufactured Products. CCT shall, at Alliqua’s option, either replace
any Manufactured Product order or portion thereof which is not an Acceptable Manufactured Product as soon as reasonably practicable
at CCT’s cost and expense, including shipping costs, or promptly refund to Alliqua the payments made for such returned Manufactured
Products (including Alliqua’s shipping costs). At the sole option of CCT, said Manufactured Products may be returned to CCT,
at CCT’s expense including shipping costs, or destroyed in an environmentally acceptable manner, in accordance with applicable
Law, at CCT’s expense. CCT will not, however, replace any Manufactured Product which fails or ceases to conform to the Specifications
or which is unsalable, in each case, as a result of improper storage, transport or other mishandling or other event after the Manufactured
Product has been delivered to Alliqua, Alliqua’s designated courier or other Alliqua designee.

 

    	-10-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

5.4          Exclusive
Remedy. The sole and exclusive remedy available to Alliqua in connection with Manufactured Products that are not Acceptable
Manufactured Products shall be replacement of such Manufactured Product by CCT in accordance with Section 5.3 above. Notwithstanding
the immediately preceding sentence, Manufactured Products that are not Acceptable Manufactured Products shall be deemed not to
have been delivered for purposes of Section 9.2(b).

 

 

ARTICLE
6

REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS

 

6.1          Mutual
Representations and Warranties. Each Party represents and warrants to the other Party as of the Effective Date as follows:

 

(a)          It
is a corporation duly organized, validly existing and in good standing under the laws of the State of its incorporation, with the
requisite legal authority to own and use its properties and assets and to carry on its business as currently conducted.

 

(b)          It
has the requisite corporate authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise
to carry out its obligations hereunder. The execution and delivery of this Agreement by it and the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action on its part and no further consent or action is required
by it, by its Board of Directors or by its stockholders.

 

(c)          This
Agreement has been duly executed by it and is the valid and binding obligation of the Company enforceable against it in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies.

 

6.2          Additional
CCT Representations and Warranties.  CCT represents and warrants to Alliqua that at the time each Manufactured Product is delivered
to Alliqua such Manufactured Product: (a) will meet the Specifications therefor; (b) will have been manufactured, stored and handled
at CCT’s facility, and tested in accordance with the applicable Law, Regulatory Clearances and/or Approvals, Specifications
and cGTPs; (c) will have a remaining shelf life no less than [****] of the shelf life set forth in the Regulatory Clearances and/or
Approvals therefor in the Territory; (d) will not be (i) adulterated, or (ii) manufactured, stored or handled at CCT’s facility,
or tested in a manner that violates the Act, or any other applicable Law; and (e) will pass to Alliqua free and clear of any security
interest, lien or other encumbrances.

 

    	-11-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

6.3           Alliqua
Compliance with Applicable Law. Alliqua shall at all times: (a) handle, warehouse, store, label, package, market, sell, distribute
and otherwise dispose of the Manufactured Products in the Territory in compliance with all applicable Law, Regulatory Clearances
and/or Approvals, Specifications and cGTPs; and (b) except for any Regulatory Clearances and/or Approvals that CCT is responsible
for maintaining, maintain all applicable licenses, registrations and permits necessary to take control of, market, sell and distribute
such Manufactured Products in the Territory. Alliqua will not market the Manufactured Product in any manner which is inconsistent
with its labeling or with applicable Law, or otherwise make any false or misleading representations to customers or others regarding
the Manufactured Product.

 

ARTICLE
7

INDEMNIFICATION AND INSURANCE

 

7.1           CCT
Indemnification. Subject to the procedures set forth in Section 7.3, CCT shall indemnify Alliqua, its Affiliates and its and
their respective directors, officers, employees and agents (the “Alliqua Indemnified Parties”), and defend and
save each of them harmless, from and against any and all claims, lawsuits, losses, damages, liabilities, penalties, costs and expenses
(including reasonable attorneys’ fees and disbursements) (collectively, “Losses”) incurred by any of them
in connection with any and all suits, investigations, claims or demands of Third Parties (collectively, “Third Party Claims”)
in connection with, arising from or occurring as a result of: (a) the breach or inaccuracy of any representation or warranty made
by CCT in this Agreement or the Quality Agreement; (b) the breach by CCT of any of its obligations under this Agreement or the
Quality Agreement; or (c) any manufacturing defect of the Manufactured Products manufactured by CCT or on its behalf; in each case
except for those Losses for which Alliqua has an obligation to indemnify any CCT Indemnified Parties pursuant to Section 7.2 of
the License Agreement.

 

7.2           Alliqua
Indemnification. Subject to the procedures set forth in Section 7.3, Alliqua shall indemnify CCT, its Affiliates and its and
their respective directors, officers, employees and agents (the “CCT Indemnified Parties”), and defend and save
each of them harmless, from and against any and all Losses incurred by any of them in connection with any Third Party Claims in
connection with, arising from or occurring as a result of: (a) the breach or inaccuracy of any representation or warranty made
by Alliqua in this Agreement or the Quality Agreement; (b) the use of any and all Promotional Materials; (c) the breach by Alliqua
of any of its obligations under this Agreement or the Quality Agreement; or (d) any Manufactured Products manufactured by Alliqua
or on its behalf by any Person other than CCT, in each case except for those Losses for which CCT has an obligation to indemnify
any Alliqua Indemnified Parties pursuant to Section 7.1 or the License Agreement.

 

    	-12-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

7.3          Indemnification
Procedures. The Party claiming indemnity under this Article 7 (the “Indemnified Party”) shall give written
notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after learning of
such Claim. The Indemnifying Party shall have the right to assume and conduct the defense of the Claim with counsel of its choice,
and the Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense. The
Indemnified Party shall provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party's expense, in connection
with the defense of the Claim for which indemnity is being sought. Each Party shall not settle or compromise any Claim without
the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned. If the
Parties cannot agree as to the application of the foregoing Sections 7.1 and 7.2, each may conduct separate defenses of the Claim,
and each Party reserves the right to claim indemnity from the other in accordance with this Article 7 upon the resolution of the
underlying Claim.

 

7.4          Limitation
of Liability. NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, INCLUDING
LOST PROFITS, ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT EXCEPT FOR FRAUD OR WILLFUL MISCONDUCT, BREACH OF EITHER
PARTY'S CONFIDENTIALITY OBLIGATIONS, A PARTY'S INDEMNIFICATION OBLIGATIONS, A BREACH OF EACH PARTY'S EXCLUSIVITY OBLIGATIONS OR
A BREACH OF THE LICENSE GRANTS, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT ANY DAMAGES
CLAIMED BY OR PAID TO A THIRD PARTY IN A THIRD PARTY ACTION SHALL NOT BE CONSIDERED SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE,
OR INDIRECT DAMAGES FOR PURPOSES OF THIS AGREEMENT.

 

7.5          Insurance.
Each Party shall, at all times during the Term of this Agreement and for five (5) years thereafter, obtain and maintain at its
own expense the following types of insurance, with limits of liability not less than those specified below:

 

(a)          Commercial
general liability insurance against claims for bodily injury and property damage which shall include contractual coverage and product
liability coverage, with limits of not less than $[****] per occurrence and in the aggregate. The other Party, its officers, directors,
representatives and agents shall be named as additional insureds.

 

(b)          Workers
compensation and employers' liability with limits to comply with the statutory requirements of the state(s) in which the Agreement
is to be performed. The policy shall include employers' liability for not less than $[****] per accident.

 

All policies shall be
issued by insurance companies with an A.M. Best's rating of Class A-:V (or its equivalent) or higher status. Each Party shall deliver
certificates of insurance evidencing coverage to the other Party promptly after the execution of this Agreement and annually thereafter.
All policies provided for herein shall expressly provide that such policies shall not be cancelled, terminated or altered without
at least thirty (30) days prior written notice to the insured Party, and each insuring Party shall immediately notify the insured
Party in the event that a policy provided for herein is cancelled, terminated or altered.

 

    	-13-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

ARTICLE
8

CONFIDENTIAL INFORMATION

 

8.1          Confidentiality.
During the Term and for a period of five (5) years thereafter, each Party
shall maintain all Confidential Information of the other Party in trust and confidence and shall not, without the written consent
of the other Party, disclose any Confidential Information of the other Party to any Third Party or use any Confidential Information
of the other Party for any purpose other than as necessary in connection with the exercise of rights or discharge of obligations
under this Agreement. The confidentiality obligations of this Section 8.1 shall not apply to Confidential Information to the extent
that the receiving Party can establish by competent evidence that such Confidential Information: (a) is publicly known prior or
subsequent to disclosure without breach of confidentiality obligations by such Party or its employees, consultants or agents; (b)
was in such Party’s possession at the time of disclosure without any restrictions on further disclosure; (c) is received
by such receiving Party, without any restrictions on further disclosure, from a Third Party who has the lawful right to disclose
it; or (d) is independently developed by employees or agents of the receiving Party who had no access to the disclosing Party’s
Confidential Information.

 

8.2          Authorized
Disclosure. Nothing herein shall preclude a Party from disclosing
the Confidential Information of the other Party to the extent:

 

(a)          such
disclosure is reasonably necessary (i) for the filing or prosecuting of Patents as contemplated by the License Agreement; (ii)
to comply with the requirement of Regulatory Authorities with respect to obtaining and maintaining Regulatory Clearance and/or
Approval (or any pricing and reimbursement approvals) of any Manufactured Product; or (iii) for prosecuting or defending litigations
as contemplated by the License Agreement;

 

(b)          such
disclosure is reasonably necessary to its employees, agents, consultants or contractors on a need-to-know basis for the sole purpose
of performing its obligations or exercising its rights under this Agreement; provided that in each case, the disclosees are bound
by written obligations of confidentiality and non-use consistent with those contained in this Agreement;

 

(c)          such
disclosure is reasonably necessary to any bona fide potential or actual investor, acquiror, merger partner, or other financial
or commercial partner for the sole purpose of evaluating an actual or potential investment, acquisition or other business relationship;
provided that in each case, the disclosees are bound by written obligations of confidentiality and non-use consistent with those
contained in this Agreement;

 

(d)          such
disclosure is reasonably necessary to comply with applicable Laws, including regulations promulgated by applicable security exchanges,
a valid order of a court of competent jurisdiction, administrative subpoena or order.

 

Notwithstanding the foregoing,
in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to any of Sections
8.2(a) through 8.2(d), such Party shall promptly notify the other Party of such required disclosure and shall use reasonable efforts
to obtain, or to assist the other Party in obtaining, a protective order preventing or limiting the required disclosure.

 

    	-14-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

8.3          Return
of Confidential Information. Promptly after the termination or expiration of this Agreement for any reason, each Party shall
return to the other Party all tangible manifestations of such other Party’s Confidential Information at that time in the
possession of the receiving Party.

 

8.4          Publicity;
Terms of the Agreement; Confidential Treatment.

 

(a)          The
Parties agree that the terms of this Agreement (including without limitation any exhibits and schedules hereto) shall be considered
Confidential Information of each Party, subject to the special authorized disclosure provisions set forth in Section 8.2 and this
Section 8.4.

 

(b)          If
either Party desires to make a public announcement concerning the material terms of this Agreement, such Party shall give reasonable
prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as
otherwise provided herein), such approval not to be unreasonably withheld, conditioned or delayed. A Party commenting on such a
proposed press release shall provide its comments, if any, within three (3) Business Days after receiving the press release for
review. In addition, to the extent required by applicable Laws, including regulations promulgated by applicable security exchanges,
each Party shall have the right to make a press release announcing the achievement of each milestone under this Agreement as it
is achieved, and the achievements of Regulatory Clearances and/or Approvals in the Territory as they occur, subject to the other
Party’s consent as to form and substance of such announcement, which shall not be unreasonably withheld, conditioned or delayed.
In relation to the other Party’s review and approval of such an announcement, such other Party may make specific, reasonable
comments on such proposed press release within the prescribed time for commentary, but shall not withhold its consent to disclosure
of the information that the relevant milestone has been achieved and triggered a payment hereunder. Neither Party shall be required
to seek the permission of the other Party to repeat any information regarding the terms of this Agreement that has already been
publicly disclosed by such Party, or by the other Party, in accordance with this Section 8.4, provided such information remains
accurate as of such time.

 

(c)          In
addition, the Parties acknowledge that either or both Parties may be obligated to file under applicable law and regulation a copy
of this Agreement with the USA Securities and Exchange Commission or similar stock exchange authorities or other governmental authorities.
Each Party shall be entitled to make such a required filing; provided, however, that it requests confidential treatment of the
commercial terms and sensitive technical terms hereof and thereof to the extent such confidential treatment is reasonably available
to such Party. In the event of any such filing, each Party shall provide the other Party with a copy of this Agreement marked to
show provisions for which such Party intends to seek confidential treatment and shall reasonably consider and incorporate the other
Party’s comments thereon to the extent consistent with the legal requirements, with respect to the filing Party, governing
disclosure of material agreements and material information that must be publicly filed.

 

    	-15-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

8.5          Technical
Publication.  Neither Party may publish peer reviewed manuscripts or give other forms of public disclosure such as abstracts
and media presentations (such disclosure collectively, for purposes of this Section 8.5, “publication”), of
results of studies carried out under this Agreement, without the opportunity for prior review by the other Party, except to the
extent required by applicable Laws. A Party seeking publication shall provide the other Party the opportunity to review and comment
on any proposed publication that relates to the Manufactured Product at least thirty (30) days (or at least ten (10) days in the
case of abstracts and media presentations) prior to its intended submission for publication. The other Party shall provide the
Party seeking publication with its comments in writing, if any, within twenty (20) days (or within five (5) days in the case of
abstracts and media presentations) after receipt of such proposed publication. The Party seeking publication shall consider in
good faith any comments thereto provided by the other Party and shall comply with the other Party’s reasonable request to
remove any and all of such other Party’s Confidential Information from the proposed publication. In addition, the Party seeking
publication shall delay the submission for a period up to sixty (60) days in the event that the other Party can demonstrate reasonable
need for such delay in order to accommodate the preparation and filing of a patent application. If the other Party fails to provide
its comments to the Party seeking publication within such twenty (20) day period (or five (5) day period, as the case may be),
such other Party shall be deemed not to have any comments, and the Party seeking publication shall be free to publish in accordance
with this Section 8.5 after the thirty (30) day period (or ten (10) day period, as the case may be) has elapsed. The Party seeking
publication shall provide the other Party a copy of the publication at the time of the submission. Each Party agrees to acknowledge
the contributions of the other Party and its employees in all publications as scientifically appropriate.

 

8.6          Equitable
Relief. Each Party acknowledges that its breach of Article 8 of this Agreement may cause irreparable injury to the other
Party for which monetary damages may not be an adequate remedy. Therefore, each Party shall be entitled to seek injunctive and
other appropriate equitable relief to prevent or curtail any actual or threatened breach of the obligations relating to Confidential
Information set forth in this Article 8 by the other Party. The rights and remedies provided to each Party in this Article 8 are
cumulative and in addition to any other rights and remedies available to such Party at law or in equity.

 

ARTICLE
9

TERM AND TERMINATION

 

9.1          Term.
The term of this Agreement shall commence on the Effective Date and shall continue until this Agreement is terminated pursuant
to this ARTICLE 9 (the “Term”).

 

9.2          Termination.
This Agreement may be terminated as follows:

 

(a)          By
CCT upon six months’ prior written notice to Alliqua.

 

(b)          By
Alliqua upon [****] prior written notice to CCT if, on at least [****] occasions within any twelve (12) month period, CCT fails
to deliver at least [****]% of any Manufactured Products specified in a Firm Order conforming to the provisions of Schedule 2.2,
subsection (c) by the required delivery date specified therein and in conformity with the applicable Specifications.

 

    	-16-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(c)          By
either Party immediately upon written notice to the other Party if the other Party materially breaches its obligations under this
Agreement and, after receiving written notice identifying such material breach in reasonable detail, fails to cure such material
breach within sixty (60) days from the date of such notice. If the alleged breaching Party disputes in good faith the existence
or materiality of a breach specified in a notice provided by the other Party in accordance with this Section 9.2(c), and such alleged
breaching Party provides the other Party notice of such dispute within the applicable cure period, then the non-breaching Party
shall not have the right to terminate this Agreement under this Section 9.2(c) unless and until an arbitrator, in accordance with
Article 13 of the License Agreement, has determined that the alleged breaching Party has materially breached the Agreement and
such breaching Party fails to cure such breach within the applicable cure period (measured as commencing after the arbitrator’s
decision). It is understood and agreed that during the pendency of such dispute, all of the terms and conditions of this Agreement
shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

 

(d)          
To the extent permitted under applicable Laws, if at any time during the Term of this Agreement, an Event of Bankruptcy (as defined
below) relating to either Party (the “Bankrupt Party”) occurs, the other Party (the “Non-Bankrupt Party”)
shall have, in addition to all other legal and equitable rights and remedies available hereunder, the option to terminate this
Agreement upon sixty (60) days written notice to the Bankrupt Party. It is agreed and understood that if the Non-Bankrupt Party
does not elect to terminate this Agreement upon the occurrence of an Event of Bankruptcy, except as may otherwise be agreed with
the trustee or receiver appointed to manage the affairs of the Bankrupt Party, the Non-Bankrupt Party shall continue to make all
payments required of it under this Agreement as if the Event of Bankruptcy had not occurred, and the Bankrupt Party shall not have
the right to terminate any license granted herein. The term “Event of Bankruptcy” means: (a) filing, in any
court or agency pursuant to any statute or regulation of any state or country, (i) a petition in bankruptcy or insolvency, (ii)
for reorganization or (iii) for the appointment of (or for an arrangement for the appointment of) a receiver or trustee of the
Bankrupt Party or of its assets; (b) with respect to the Bankrupt Party, being served with an involuntary petition filed in any
insolvency proceeding, which such petition is not dismissed within sixty (60) days after the filing thereof; (c) proposing or being
a party to any dissolution or liquidation when insolvent; or (d) making an assignment for the benefit of creditors. Without limitation,
the Bankrupt Party’s rights under this Agreement shall include those rights afforded by 11 USAC. § 365(n) of the United
States Bankruptcy Code (the “Bankruptcy Code”) and any successor thereto. If the bankruptcy trustee of a Bankrupt
Party as a debtor or debtor-in-possession rejects this Agreement under 11 USAC. § 365(o) of the Bankruptcy Code, the Non-Bankrupt
Party may elect to retain its rights licensed from the Bankrupt Party hereunder (and any other supplementary agreements hereto)
for the duration of this Agreement and avail itself of all rights and remedies to the full extent contemplated by this Agreement
and 11 USAC. § 365(n) of the Bankruptcy Code, and any other relevant Laws..

 

    	-17-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(e)          This
Agreement shall automatically terminate upon expiration or termination of the License Agreement.

 

9.3          Effects
of Termination.

 

(a)          Upon
termination of this Agreement for any reason, all submitted Firm Orders for Manufactured Products shall be delivered and paid for
in accordance with Article 2.

 

(b)          Termination
or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit
of a Party prior to such termination or expiration.

 

(c)          Section
3.11, this Section 9.3 and Articles 1, 4, 5, 6, 7, 8 and 10 shall survive expiration or termination of this Agreement for any reason;
Schedule 2.2, subsection (h) and Section 2.4 shall survive a termination of this Agreement pursuant to Section 9.2(a) or (b); and,
with respect to Firm Orders submitted and/or filled after termination of this Agreement pursuant to Schedule 2.2, subsection (h),
the provisions of this Agreement otherwise applicable to the Manufactured Products that are the subject of such Firm Orders shall
survive termination of this Agreement.

 

ARTICLE
10

GENERAL PROVISIONS

 

10.1        Entire
Agreement; Amendment. This Agreement, together with the exhibits and schedules hereto, which are hereby incorporated herein,
represents the entire agreement and understanding between the Parties with respect to its subject matter and supersedes and terminates
any prior and/or contemporaneous discussions, representations or agreements, whether written or oral, of the Parties regarding
the subject matter hereto, and supersedes, as of the Effective Date, all prior and contemporaneous agreements and understandings
between the Parties with respect to the subject matter hereof (including for the Prior CDA). There are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as
are set forth in this Agreement. Amendments or changes to this Agreement shall be valid and binding only if in writing and signed
by duly authorized representatives of the Parties.

 

10.2        Force
Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such
performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party.
Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes
reasonable efforts to remove the condition. For purposes of this Agreement, force majeure shall mean conditions beyond the control
of the Parties, including an act of God, war, civil commotion, terrorist act, labor strike or lock-out, epidemic, failure or default
of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe,
and failure of plant or machinery (provided that such failure could not have been prevented by the exercise of skill, diligence,
and prudence that would be reasonably and ordinarily expected from a skilled and experienced person engaged in the same type of
undertaking under the same or similar circumstances). If a force majeure persists for more than ninety (90) days, then the Parties
shall discuss in good faith the modification of the Parties’ obligations under this Agreement in order to mitigate the delays
caused by such force majeure.

 

    	-18-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

10.3        Notices.
Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement,
and shall be addressed to the appropriate Party at the address specified below or such other address as may be specified by such
Party in writing in accordance with this Section 10.3, and shall be deemed to have been given for all purposes (a) when received,
if hand-delivered or sent by confirmed facsimile or a reputable courier service, or (b) five (5) Business Days after mailing, if
mailed by first class certified or registered airmail, postage prepaid, return receipt requested.

 

		If to CCT:	Anthrogenesis Corporation, d/b/a Celgene Cellular Therapeutics

Attn.: Chief Executive Officer

33 Technology Drive Warren, NJ 07059-5148

Fax: [****]

 

			With a copy to (which shall not constitute notice):

 

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036

Attn: Robert A. Cantone, Esq.

Fax No.: (212) 969-2900

and

Celgene Corporation

86 Morris Avenue

Summit, NJ 07901

Attention: General Counsel

Fax: [****]

 

		If to Alliqua:	Alliqua, Inc.

2150 Cabot Boulevard West

Langhorne, Pennsylvania 19047

Attention: Chief Executive Officer

Fax No.: [****]

 

With a copy to (which shall
not constitute notice):

 

Lowenstein Sandler LLP

65 Livingston Avenue

Roseland, New Jersey 07068

Attention: Michael Lerner, Esq.

Fax No.: (973) 597-6395

 

    	-19-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

10.4         No
Strict Construction; Headings. This Agreement has been prepared jointly by the Parties and shall not be strictly construed
against either Party. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party
may be deemed to have authored the ambiguous provision. The headings of each Article and Section in this Agreement have been inserted
for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular
Article or Section. Except where the context otherwise requires, the use of any gender shall be applicable to all genders, and
the word “or” is used in the inclusive sense (and/or). The term “including” as used herein means including,
without limiting the generality of any description preceding such term.

 

10.5         Assignment.
Neither Party may assign this Agreement without the prior written consent of the other Party, such consent not to be unreasonably
withheld, conditioned or delayed; provided, however, that either Party may assign this Agreement without the consent of the other
Party, effective upon written notice to the other Party thereof, to (i) an Affiliate of such Party, provided that the Party hereunder
who assigns this Agreement agrees in writing to continue to be bound by and subject to the terms and conditions of this Agreement
and (ii) any Person who acquires all or substantially all of such Party’s assets or that is the surviving entity in a merger,
recapitalization, combination or other similar transaction with such assigning Party and who agrees in writing to be bound by and
subject to the terms and conditions of this Agreement. Further, CCT may assign without Alliqua’s consent its rights to payments
received under this Agreement. Any permitted assignment shall be binding on the successors of the assigning Party. Any attempted
or purported assignment in violation of this Section 10.5 shall be null and void.

 

10.6         Performance
by Affiliates. Each Party may discharge any obligations and exercise any right hereunder through any of its Affiliates. Each
Party hereby guarantees the performance by its Affiliates of such Party’s obligations under this Agreement, and shall cause
its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party’s
Affiliate of any of such Party’s obligations under this Agreement shall be deemed a breach by such Party, and the other Party
may proceed directly against such Party without any obligation to first proceed against such Party’s Affiliate.

 

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

 

10.8         Severability.
If any provision of this Agreement is found by a court of competent jurisdiction to be unenforceable, then such provision shall
be construed, to the extent feasible, so as to render the provision enforceable, and if no feasible interpretation would save such
provision, it shall be severed from the remainder of this Agreement. The remainder of this Agreement shall remain in full force
and effect, unless the severed provision is essential and material to the rights or benefits received by either Party. In such
event, the Parties shall negotiate, in good faith, and substitute a valid and enforceable provision or agreement that most nearly
implements the Parties’ intent in entering into this Agreement.

 

    	-20-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

10.9         No
Waiver. No provision of this Agreement can be waived except by the express written consent of the Party waiving compliance.
Except as specifically provided for herein, the waiver from time to time by either Party of any of its rights or its failure to
exercise any remedy shall not operate or be construed as a continuing waiver of same or of any other of such Party’s rights
or remedies provided in this Agreement.

 

10.10       Independent
Contractors. For all purposes under this Agreement, Alliqua and CCT and their respective Affiliates are independent contractors
with respect to each other, and shall not be deemed to be an employee, agent, partner or legal representative of the other Party.
This Agreement does not grant any Party or its employees, consultants or agents any authority (express or implied) to do any of
the following without the prior express written consent of the other Party: create or assume any obligation; enter into any agreement;
make any representation or warranty; serve or accept legal process on behalf of the other Party; settle any claim by or against
the other Party; or bind or otherwise render the other liable in any way.

 

10.11       Governing
Law. This Agreement shall be governed by the laws of the state of New York, without regard to its choice of law provisions
that would require the application of the laws of a different jurisdiction. The Parties hereby irrevocably submit to the jurisdiction
of the state and federal courts sitting in the County and State of New York for the adjudication of disputes arising out of or
relating to this Agreement.

 

10.12       Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together
shall constitute the same legal instrument. Facsimile or PDF execution and delivery of this Agreement by any Party shall constitute
a legal, valid and binding execution and delivery of this Agreement by such Party. The Parties to this document agree that a copy
of the original signature (including an electronic copy) may be used for any and all purposes for which the original signature
may have been used. The Parties agree they will have no rights to challenge the use or authenticity of this document based solely
on the absence of an original signature.

 

[Signature page follows.]

 

    	-21-

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

IN WITNESS WHEREOF,
each of the Parties has caused this Agreement to be executed in duplicate, as of the Effective Date, by its duly authorized officer
or representative.

 

	ANTHROGENESIS CORPORATION	 	ALLIQUA, INC.
	 	 	 
	By: 	/s/ Perry Karsen	 	By: 	/s/ David Johnson
	Name: Perry Karsen 	 	Name:  David Johnson
	Title: Chief Executive Officer	 	Title:  Chief Executive Officer

 

[Signature Page to Supply Agreement]

 

    	 

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

SCHEDULE A

SPECIFICATIONS

 

[****]

 

    	 

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

SCHEDULE 2.2

 

(a)          Alliqua
shall submit to CCT as soon as practicable after the Effective Date, and in any event not later than the thirtieth (30th)
day after the date of this Agreement, and thereafter no later than the fifth (5th) Business Day of every month during the Term:

 

(i)          a
three (3) year rolling forecast (“Long Range Forecast”) organized by Manufactured Product stock keeping unit
and by quarterly periods, setting forth the quantities of each Manufactured Product that Alliqua expects to purchase from CCT during
the three (3) years commencing with the beginning of said month, and

 

(ii)         a
twelve (12)-month rolling forecast (“Forecast”) organized by Manufactured Product stock keeping unit and by
months, setting forth the quantities of each Manufactured Product that Alliqua expects to purchase from CCT during the twelve (12)-month
period commencing with the beginning of said month.

 

(b)          Alliqua
shall make all Forecasts and Long Range Forecasts in good faith given market and other information available to Alliqua. Each Forecast
shall constitute a binding commitment of Alliqua to purchase at least the percentages of Manufactured Products set forth below
pursuant to Firm Orders issued in accordance with Subsection (c) below, notwithstanding any change in the quantity of a Manufactured
Product specified in a subsequent Forecast. Except as provided in the preceding sentence, each Forecast shall be non-binding on
Alliqua. Each Long Range Forecast shall be non-binding on Alliqua. Alliqua shall be required to submit Firm Orders to purchase
at least that percentage of the quantity of each of the Manufactured Products specified in the Forecast as follows:

  

	Period of the Forecast	 	Percentage of the aggregate amount of

Manufactured Products that Alliqua is

required to submit Firm Orders for during

such period
	[****]	 	[****]
	[****]	 	[****]
	[****]	 	[****]

 

    	 

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(c)          Alliqua
shall purchase Manufactured Products solely by Firm Orders for such Manufactured Products. For a given month, CCT will accept Firm
Orders for quantities of Manufactured Products, provided such Firm Orders in the aggregate do not exceed [****] of the quantity
set forth in the binding portion of the Forecast most recently submitted for such month; provided, however, that if, with respect
to any month, Alliqua orders any Manufactured Product in excess of [****] of the quantity set forth in the binding portion of the
Forecast most recently submitted for such month, CCT shall make commercially reasonable efforts to supply such excess up to [****]
of the quantity set forth in the binding portion of the Forecast most recently submitted for such month, but shall not be liable
for its failure to do so. Alliqua shall specify a delivery date in each Firm Order that is at least sixty (60) days after the date
on which the Firm Order is submitted to CCT. CCT shall, within five (5) Business Days after CCT receives each Firm Order submitted
in accordance with the preceding two sentences, accept in writing such Firm Order. Subject to any other term or condition of this
Agreement, Alliqua shall be obligated to purchase, and CCT shall be obligated to deliver by the required delivery date set forth
therein, such quantities of each Manufactured Product as are set forth in each Firm Order. If Alliqua requests changes to any Firm
Order previously submitted by Alliqua, including any increases or decreases in quantity of Manufactured Products, required delivery
date or form of Manufactured Product, CCT shall provide Alliqua a good faith estimate of the anticipated costs of complying with
such request. If Alliqua approves such estimated costs in writing, CCT shall use commercially reasonable efforts to comply with
such changes but shall not be liable for its failure to do so. In the event that CCT complies with any such request, Alliqua shall
reimburse CCT for its commercially reasonable, documented costs incurred in complying with such request. Notwithstanding anything
to the contrary in this subsection (c), during the first six months of Manufactured Product deliveries under this Agreement, CCT
shall have no obligation to deliver, nor to accept any portion of a Firm Order requiring it to deliver, more than the following
maximum number of Units (by size) per month as follows:

 

	 	Maximum Deliveries of Units, by Unit

Dimension
	[****]	[****]	[****]
	Each of the first three months of Manufactured Product deliveries under this Agreement	[****]	[****]	[****]
	Each of the fourth, fifth and sixth months of Manufactured Product deliveries under this Agreement	[****]	[****]	[****]

 

(d)          CCT
shall promptly notify Alliqua in writing if at any time CCT has reason to believe that CCT will not be able to (i) fill a Firm
Order for any Manufactured Product in accordance with the delivery schedule specified therein by Alliqua and pursuant to the terms
and conditions of this Agreement and the Quality Agreement, or (ii) supply Manufactured Products to Alliqua in satisfaction of
the most recent Forecast, which notice in either case shall provide Alliqua with information on the extent of the expected shortfall
of supply. Upon such notice of a supply shortfall, or in any event upon CCT's failure to satisfy, within the delivery time frame
specified by Alliqua, a portion of the Manufactured Products ordered by Alliqua in compliance with this Agreement and the Quality
Agreement, Alliqua and CCT will immediately meet and work together in good faith to identify an appropriate resolution to the supply
shortfall. Any agreed resolution to the supply shortfall will be set forth in a writing executed by both Parties. Compliance by
CCT with this subsection (d) shall not relieve CCT of any other obligation or liability under this Agreement, including any obligation
or liability under subsections (e) or (f) below.

 

    	 

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

(e)          If
CCT fails to deliver at least [****] of any Manufactured Products specified in a Firm Order conforming to the provisions of Subsection
(c) above by the required delivery date specified therein and in conformity with the applicable Specifications, Alliqua, at its
option, may:

 

(i)          cancel
all or any portion of such Firm Order with respect to such Manufactured Products, in which event Alliqua shall have no liability
with respect to the portion of such Firm Order so cancelled; or

 

(ii)         accept
late delivery of all or any portion of such Firm Order with respect to such Manufactured Product, in which event the Purchase Price
otherwise payable by Alliqua with respect to all Manufactured Products delivered late and accepted by Alliqua under such Firm Order
shall be reduced by [****].

 

(f)          If
CCT fails to deliver at least [****] of any Manufactured Products specified in a Firm Order conforming to the provisions of Subsection
(c) above by the required delivery date specified therein and in conformity with the applicable Specifications, CCT shall pay to
Alliqua any reasonable, documented external expenses incurred by Alliqua resulting from CCT’s breach of its obligation to
deliver the full quantity of any Manufactured Product specified in such Firm Order by the required delivery date specified therein.
Notwithstanding anything to the contrary in this Agreement, delivery by CCT of at least [****] of the quantity ordered will be
accepted by Alliqua in full satisfaction of CCT’s obligation to supply a Firm Order. Should delivered quantities of Manufactured
Product be below [****], CCT will use commercially reasonable efforts to accelerate the subsequent delivery of Manufactured Product,
if so requested by Alliqua. Alliqua will be invoiced for the actual quantities shipped, adjusted as provided in Subsection (e)(ii)
above. CCT will not be responsible for warehousing Manufactured Product for Alliqua. CCT will make available to Alliqua or Alliqua’s
designee, as the case may be, all Manufactured Products upon release.

 

(g)          The
remedies provided for in Subsections (e) and (f) above shall be the sole remedies of Alliqua with respect to any single failure
by CCT to deliver less than [****] of any Manufactured Product specified in a Firm Order conforming to the provisions of C 2.2(c)
by the required delivery date specified therein and in conformity with the applicable Specifications; and the remedy provided for
in Section 9.2(b) of the Agreement shall be the sole remedy of Alliqua with respect to the failure of CCT on at least [****] within
any [****] period to deliver at least [****] of any Manufactured Products specified in a Firm Order conforming to the provisions
of Schedule 2.2, subsection (c) by the required delivery date specified therein and in conformity with the applicable Specifications.

 

(h)          Notwithstanding
anything to the contrary in the Agreement, following termination of the Agreement pursuant to Sections 9.2(a) or (b), during the
twelve (12) month period commencing on the date notice of termination is given pursuant to either of such Sections (the “Termination
Supply Period”), Alliqua may submit Firm Orders for quantities of Manufactured Products in accordance with subsection
(c) above, except that the Firm Orders for any month during the last nine (9) months of the Termination Supply Period may not exceed
one hundred percent (100%) of the forecasted amount for such nine (9) months in the most recent Forecast provided by Alliqua to
CCT prior to such notice of termination.

 

    	 

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

SCHEDULE
2.5

ECM
PURCHASE PRICE

 

Purchase Price per unit of Manufactured Products, regardless
of dimensions thereof: $[****]

 

Maximum dimension of Manufactured Products: [****]

 

    	 

    	 

    

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL
TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

 

SCHEDULE
4.1

BIOVANCE
PURCHASE PRICE

 

Purchase Price per unit of Manufactured Products, regardless
of dimensions thereof: $[****]

 

Maximum dimension of Manufactured Products: [****]Exhibit
10.50

 

	 

 

STOCK PURCHASE
AGREEMENT

 

BY AND
BETWEEN

 

Celgene
CORPORATION

 

AND

 

ALLIQUA,
INC.

 

NOVEMBER
14, 2013

 

 

	 

 

    	 

    	 

    

 

TABLE
OF CONTENTS

 

	 	 	PAGE
	 	 	 
	ARTICLE
    1  DEFINITIONS	1
	 	 	 
	ARTICLE
    2  PURCHASE AND SALE	5
	 	 	 
	2.1	Closing	5
	2.2	Adjustments in Share Numbers and Prices	6
	2.3	Reserve Shares	6
	2.4	Concurrent Issuances	6
	2.5	Closing Deliveries	6
	 	 	 
	ARTICLE
    3  REPRESENTATIONS AND WARRANTIES	6
	 	 	 
	3.1	Representations and Warranties of the Company	6
	3.2	Representations and Warranties of the Investor	13
	 	 	 
	ARTICLE
    4  OTHER AGREEMENTS OF THE PARTIES	15
	 	 	 
	4.1	Filing of Reports	15
	4.2	Board Representation and Observer Rights	15
	4.3	Right Of First Offer	16
	4.4	Listing of Shares	16
	4.5	Use of Proceeds	16
	4.6	Lock-Up	17
	4.7	Public Statements	17
	4.8	Additional Financing	17
	 	 	 
	ARTICLE
    5  CONDITIONS	17
	 	 	 
	5.1	Conditions Precedent to the Obligations of the Investor	17
	5.2	Conditions Precedent to the Obligations of the Company	18
	 	 	 
	ARTICLE
    6  REGISTRATION RIGHTS	19
	 	 	 
	6.1	Piggy-Back Registration Rights	19
	6.2	Registration Expenses	20
	 	 	 
	ARTICLE
    7  INDEMNIFICATION	20
	 	 
	7.1	Indemnification by the Company	20
	7.2	Indemnification by Investor	21
	7.3	Conduct of Indemnification Proceedings	21
	 	 	 
	ARTICLE
    8  GENERAL PROVISIONS	23
	 	 
	8.1	Termination	23
	8.2	Fees and Expenses	23
	8.3	Entire Agreement	23
	8.4	Notices	24
	8.5	Amendments; Waivers	24
	8.6	Construction	24

 

    	-i-

    	 

    

 

	8.7	Successors and Assigns	24
	8.8	No Third-Party Beneficiaries	25
	8.9	Governing Law; Venue; Waiver of Jury Trial	25
	8.10	Survival	25
	8.11	Execution	25
	8.12	Severability	25
	8.13	Replacement of Certificates	26
	8.14	Remedies	26

 

	Exhibit A:	Form of Warrants
	Exhibit B:	Opinion of Company Counsel

  

    	-ii-

    	 

    

 

STOCK PURCHASE
AGREEMENT

 

THIS
STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of November 14, 2013, by and between Alliqua, Inc.,
a Florida corporation (the “Company”), and Celgene Corporation, a Delaware corporation (“Investor”).

 

PREAMBLE

 

A.           Contemporaneously
with the execution and delivery of this Agreement, the Company and Anthrogenesis Corporation, a Delaware corporation doing business
as Celgene Cellular Therapeutics (“CCT”), are entering into that certain License, Marketing and Development
Agreement, dated as of the date hereof (the “License Agreement”), and that certain Supply Agreement, dated
as of the date hereof, relating to, among other things, the development and commercialization by the Company of certain CCT products;
and

 

B.           The
Investor wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (a) that
aggregate number of shares of the common stock, par value $0.001 per share, of the Company (the “Common Stock”),
which is the nearest number of whole shares of Common Stock determined by dividing (x) $6,000,000 by (y) $0.082; which
aggregate amount of shares shall collectively be referred to herein as the “Common Shares”, and (b) five year
warrants to purchase 36,585,366 shares of Common Stock at an exercise price of $0.13 per share (the “Initial Warrants”)
in the form attached hereto as Exhibit A.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investor agree as follows:

 

ARTICLE
1

DEFINITIONS

 

In
addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated:

 

“Affiliate”
means, with respect to a Person, any Person that controls, is controlled by or is under common control with such first Person.
For purposes of this definition only, “control” means (a) to possess, directly or indirectly, the power to
direct the management or policies of a Person, whether through ownership of voting securities, by contract relating to voting
rights or corporate governance or otherwise, or (b) to own, directly or indirectly, fifty percent (50%) or more of the outstanding
securities or other ownership interest of such Person. For the purposes of this Agreement, neither Party shall be considered an
Affiliate of the other, and the Affiliates of each Party shall not be considered Affiliates of the other Party or of any of such
other Party’s Affiliates.

 

“Agreement”
has the meaning set forth in the Preamble.

 

“Business
Day” means any day (other than a Saturday, Sunday or a legal holiday) on which banks are open for general business in
New York, New York.

 

    	 

    	 

    

 

“Board”
has the meaning set forth in Section 4.2.

 

“Additional
Warrants” has the meaning set forth in Section 4.8.

 

“Agreement”
has the meaning set forth in the Preamble.

 

“CCT”
has the meaning set forth in the Preamble.

 

“Closing”
means the closing of the purchase and sale of the Common Shares pursuant to Section 2.1.

 

“Closing
Date” means the date and time of the Closing which, subject to the satisfaction or waiver of the conditions set forth
in Article 5, shall take place at 9:00 a.m. EST on the date that is five (5) Business Days following the date hereof, or on such
other date and time as is mutually agreed to by the Company and the Investor.

 

“Company”
has the meaning set forth in the Preamble.

 

“Company
Counsel” means Lowenstein Sandler LLP, counsel to the Company.

 

“Common
Shares” has the meaning set forth in the Preamble.

 

“Common
Stock” has the meaning set forth in the Preamble.

 

“Competitor”
means any Person that, during the Term of the License Agreement, Commercializes or Develops a Competing Product. For purposes
of this definition, the terms “Commercializes”, “Competing Product”, Develops”, and “Term”
shall have the meanings ascribed to such terms in the License Agreement.

 

“Convertible
Securities” means any stock or securities (other than Options) convertible into or exercisable or exchangeable for Common
Stock.

 

“Disclosure
Materials” has the meaning set forth in Section 3.1(g).

 

“Equity
Securities” means any all shares of Common Stock and any securities of the Company convertible into, or exchangeable
or exercisable for, such shares, and options, warrants or other rights to acquire such shares.

 

“Equity
Financing” has the meaning set forth in Section 4.8.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded
Securities” means Equity Securities issued in connection with: (a) a grant to any existing or prospective consultants,
employees, officers or directors pursuant to any stock option, employee stock purchase or similar equity-based plans or other
compensation agreements; (b) the conversion or exchange of any securities of the Company into shares of Common Stock, or the exercise
of any options, warrants or other rights to acquire such shares; (c) any acquisition by the Company of the stock, assets, properties
or business of any Person; (d) any merger, consolidation or other business combination involving the Company; (e) a bona
fide firm commitment underwritten public offering; (f) any stock split, stock dividend or any similar recapitalization, or (g)
up to an aggregate of $6,000,000 of Common Stock issued to Persons other than the Investor and its Affiliates within 30 days of
the date hereof, on terms and conditions no less favorable to the Company than those offered to the Investor hereunder.

 

    	-2-

    	 

    

 

“First
Commercial Sale” means the First Commercial Sale of ECMs. For purposes of this definition,
the terms “First Commercial Sale”, and “ECMs”, shall have the meanings ascribed to such terms in the License
Agreement.

 

“GAAP”
has the meaning set forth in Section 3.1(g). 

 

“Indemnified
Party” has the meaning set forth in Section 7.3.

 

“Indemnifying
Party” has the meaning set forth in Section 7.3.

 

“Initial
Warrants” has the meaning set forth in the Preamble.

 

“Intellectual
Property Rights” has the meaning set forth in Section 3.1(q).

 

“Investor”
has the meaning set forth in the Preamble. 

 

“Investor
Director” has the meaning set forth in Section 4.2.

 

“Investor
Observer” has the meaning set forth in Section 4.2.

 

“knowledge”
of the Company means with respect to any statement made to the knowledge of the Company, that the statement is based upon
the actual knowledge, after reasonable due inquiry, of any executive officer of the Company as of the date of this Agreement.

 

“License
Agreement” has the meaning set forth in the Preamble.

 

“Lien”
means any lien, charge, claim, security interest, encumbrance, right of first refusal or other restriction.

 

“Losses”
means any and all losses, claims, damages, liabilities, settlement costs and expenses, including, without limitation, reasonable
attorneys’ fees.

 

“Material
Adverse Effect” means (i) a material adverse effect on the results of operations, assets, business or financial condition
of the Company and the Subsidiaries taken as a whole on a consolidated basis or (ii) material and adverse effect on the legality,
validity or enforceability of this Agreement, provided, that none of the following alone shall be deemed, in and of itself, to
constitute a Material Adverse Effect: (x) a change in the market price or trading volume of the Common Stock, (y) changes in general
economic conditions or changes affecting the industry in which the Company operates generally (as opposed to Company-specific
changes) so long as such changes do not have a disproportionate effect on the Company and the Subsidiaries taken as a whole or
(z) effects resulting from or relating to the announcement or disclosure of the sale of the Common Shares or other transactions
contemplated by, or being taken in connection with, this Agreement.

 

    	-3-

    	 

    

 

“Material
Permits” has the meaning set forth in Section 3.1(r).

 

“New
Securities” has the meaning set forth in Section 4.3.

 

“Options”
means any outstanding rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

 

“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
a government or any department or agency thereof and any other legal entity.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, a partial proceeding, such as a deposition),
whether commenced or threatened in writing.

 

“Prospectus”
means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering
of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to
the Prospectus including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.

 

“Purchase
Price” means the aggregate purchase price to be paid by the Investor for the Common Shares determined by multiplying
(i) the number of shares of Common Stock comprising the Common Shares by (ii) $0.082.

 

“Registrable
Securities” means the Common Shares and the Warrant Shares (but with respect to the Warrant Shares issuable under the
Additional Warrant, from and after the issuance of the Additional Warrant), together with any securities issued or issuable upon
any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.

 

“Registration
Statement” means any registration statement filed under Article VI, including (in each case) the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

“Rule 144,”
“Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the SEC pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“SEC”
means the United States Securities and Exchange Commission.

 

“SEC
Reports” has the meaning set forth in Section 3.1(g).

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

    	-4-

    	 

    

 

“Shares”
means shares of the Company’s Common Stock.

 

“Short
Sales” means all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts,
calls, swaps, derivatives and similar arrangements.

 

“Subsidiary”
means any entity in which the Company, directly or indirectly, owns capital stock or holds an equity
or similar interest.

 

“Supply
Agreement” has the meaning set forth in the Preamble.

 

“Trading
Day” means (i) a day on which the Common Stock is traded on a Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed or quoted on a Trading Market (other than the OTC Bulletin Board), a day on which the Common
Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not listed
or quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the Pink
Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.

 

“Trading
Market” means whichever of the New York Stock Exchange, the NYSE/Amex, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date
in question.

 

“Transaction”
has the meaning set forth in Section 3.2(h).

 

“Transaction
Documents” means this Agreement, the License Agreement, the Supply Agreement, the Warrants and the schedules and exhibits
referred to herein.

 

“Transfer
Agent” means Action Stock Transfer Corporation, or any successor transfer agent for the Company.

 

“Warrant
Shares” has the meaning set forth in Section 2.3.

 

“Warrants”
has the meaning set forth in Section 4.8.

 

ARTICLE
2

PURCHASE AND SALE

 

2.1           Closing.
Subject to the terms and conditions set forth in this Agreement, at the Closing the Company
shall issue and sell to the Investor, and the Investor shall purchase from the Company, (a) the Common Shares at a purchase price
of $0.082 per Common Share, and (b) the Initial Warrants. The date and time of the Closing shall be 11:00 a.m., New York
City Time, on the Closing Date. The Closing shall take place at the offices of Company Counsel.

 

    	-5-

    	 

    

 

2.2         Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution
payable in shares of Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive
directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date
hereof, each reference in this Agreement to the number of Common Shares and the price per Common Share shall be amended to appropriately
account for such event.

 

2.3         Reserve
Shares. The Company has authorized and has reserved and covenants to continue to reserve,
free of preemptive rights and other similar contractual rights of stockholders, a number of shares of Common Stock equal to the
number of shares of Common Stock issuable upon the exercise of the Warrants (the “Warrant Shares”).

 

2.4         Concurrent
Issuances. The Company shall not, within 30 calendar days of the execution of this Agreement,
issue any New Securities to any person at a lower per share purchase price than the per share price to be paid by the Investor
pursuant to this Agreement, or on other terms and conditions more favorable to such person than the terms and conditions applicable
to the Investor pursuant to this Agreement.

 

2.5         Closing
Deliveries.

 

(a)          At
the Closing, the Company shall deliver or cause to be delivered to the Investor the following: 

 

(i)          a
copy of the Company’s irrevocable instructions to the Transfer Agent instructing the Transfer Agent to promptly deliver
one or more stock certificates, free and clear of all restrictive and other legends (except for a customary legend to the effect
that the Common Shares have not been registered under the Securities Act), evidencing the Common Shares, registered in the name
of the Investor;

 

(ii)         a
legal opinion of Company Counsel, in the form of Exhibit B, executed by such counsel and delivered to the Investor.

 

(b)          At
the Closing, the Investor shall deliver or cause to be delivered to the Company the Purchase Price in United States dollars by
wire transfer to an account designated in writing to the Investor by the Company for such purpose.

 

ARTICLE
3

REPRESENTATIONS AND WARRANTIES

 

3.1         Representations
and Warranties of the Company. The Company hereby represents and warrants to the Investor
that, except as set forth in the SEC Reports or in the Schedules delivered concurrently herewith:

 

    	-6-

    	 

    

 

(a)          Organization
and Qualification. The Company is an entity duly organized, validly existing and in good
standing under the laws of the State of Florida, with the requisite legal authority to own and use its properties and assets and
to carry on its business as currently conducted. Each Subsidiary is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation. Neither the Company nor any Subsidiary is in violation of
any of the provisions of its respective certificate or articles of incorporation, formation, bylaws or other organizational or
charter documents. The Company and each Subsidiary is duly qualified to do business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(b)          Subsidiaries.
The Company owns or controls, directly or indirectly, all of the capital stock or comparable
equity interests of each Subsidiary free and clear of any Lien, and all issued and outstanding shares of capital stock or comparable
equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights;
and the Company has no Subsidiaries other than the following corporations, partnerships, limited liability partnerships, limited
liability companies, associations or other entities: (i) AquaMed Technologies, Inc., a Delaware corporation, (ii) Alliqua Biomedical,
Inc. a Delaware corporation, and (iii) Hepalife Biosystems, Inc. a Nevada corporation.

 

(c)          Authorization;
Enforcement. The Company has the requisite corporate authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents to which it is a party and otherwise
to carry out its obligations hereunder and thereunder including the issuance and sale of the Common Shares and Warrants. The execution
and delivery by the Company of this Agreement and each of the other Transaction Documents to which it is party and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part
of the Company and no further consent or action is required by the Company, its Board of Directors or its stockholders. Each of
the Transaction Documents to which to Company is party to has been duly executed by the Company and is the valid and binding obligation
of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.

 

    	-7-

    	 

    

 

(d)          No
Conflicts. The execution, delivery and performance by the Company of this Agreement and
the other Transaction Documents it is party to and the consummation by the Company of the transactions contemplated hereby and
thereby do not, and will not, (i) conflict with or violate any provision of the Company’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, (ii) in any material respect, conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party
or by which any property or asset of the Company is bound, or affected, or (iii) in any material respect, result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including, assuming the accuracy of the representations and warranties of the Investor set forth
in Section 3.2 hereof, federal and state securities laws and regulations and the rules and regulations of any self-regulatory
organization to which the Company or its securities are subject, including all applicable Trading Markets), or by which any property
or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such as would not, individually or
in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary is as of the date hereof, nor after giving
effect to the transactions contemplated hereby to occur at the Closing, will be Insolvent (as defined below). For purposes of
this Section 3.1(d), “Insolvent” means, with respect to the Company or any Subsidiary (i) the present fair
saleable value of such Person’s assets is less than the amount required to pay such Person’s debts and liabilities,
(ii) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its
ability to pay as such debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in which
it is engaged, as such business is now conducted and is proposed to be conducted.

 

(e)          The
Common Shares. The Common Shares are duly authorized and, when issued and paid for in accordance
with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens (other than restrictions
on transfer set forth in this Agreement or imposed by applicable securities laws) and will not be subject to preemptive or similar
rights of stockholders (other than those imposed by the Investor). When the Warrant Shares are issued in accordance with the terms
of the Warrants, such shares will be duly authorized, validly issued, fully paid and nonassessable, free and clear of all Liens
(other than restrictions on transfer set forth in this Agreement or imposed by applicable securities laws) and will not be subject
to preemptive or similar rights of stockholders (other than those imposed by the Investor).

 

(f)          Capitalization.
The aggregate number of shares and type of all authorized, issued and outstanding classes
of capital stock, Options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable
for shares of capital stock of the Company) is set forth on Schedule 3.1(f)(i). Schedule 3.1(f)(ii) sets forth the aggregate number
of shares and type of all authorized, issued and outstanding classes of capital stock, Options and other securities of the Company
(whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) after taking
into account the consummation of the transactions contemplated to occur on the Closing. All outstanding shares of capital stock
are duly authorized, validly issued, fully paid and nonassessable and have been issued in compliance in all material respects
with all applicable securities laws. Except as set forth on Schedule 3.1(f), the Company does not have outstanding any Options,
script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, nor has it entered into any agreement giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Except
for customary adjustments as a result of stock dividends, stock splits, combinations of shares, reorganizations, recapitalizations,
reclassifications or other similar events, there are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders) and the issuance and sale of the Common Shares
will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investor) and
will not result in a right of any holder of securities to adjust the exercise, conversion, exchange or reset price under such
securities.

 

    	-8-

    	 

    

 

(g)          SEC
Reports; Financial Statements. The Company (i) has filed all reports required to be filed
by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the 12 months preceding the date
hereof on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension, and (ii) has filed all reports required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof. Such reports required to be filed by
the Company under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, together with the exhibits thereto and
the documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”
and, together with this Agreement and the Schedules to this Agreement, the “Disclosure Materials”. As of their
respective dates (or, if amended or superseded by a filing prior to the Closing Date, then on the date of such filing), the SEC
Reports filed by the Company complied in all material respects with the requirements of the Securities Act and the Exchange Act
and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed (or, if amended or superseded
by a filing prior to the date hereof, then on the date of such filing) by the Company, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC
with respect thereto as in effect at the time of filing (or, if amended or superseded by a filing prior to the Closing Date, then
on the date of such filing). Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements, the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP or may be condensed or summary statements, and fairly present in all material respects the consolidated
financial position of the Company and the Subsidiaries as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. All material
agreements to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any Subsidiary
are subject are included as part of or identified in the SEC Reports, to the extent such agreements are required to be included
or identified pursuant to the rules and regulations of the SEC.

 

    	-9-

    	 

    

 

(h)          Material
Changes; Undisclosed Events, Liabilities or Developments; Solvency. Since the date of the
latest audited financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports or as
set forth in Schedule 3.1(h), (i) there has been no event, occurrence or development that, individually or in the aggregate,
has had or would reasonably be expected to result in a Material Adverse Effect, (ii) neither the Company nor any Subsidiary
has incurred any material liabilities other than (A) trade payables and accrued expenses incurred in the ordinary course
of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the SEC, (iii) the Company has not altered materially
its method of accounting or changed its auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders, in their capacities as such, or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock (other than in connection with repurchases of unvested stock issued to employees of
the Company), and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock-based plans. Neither the Company nor any Subsidiary has taken any steps to seek protection pursuant
to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.

 

(i)          Absence
of Litigation. There is no action, suit, claim, or Proceeding, or, to the Company’s
knowledge, inquiry or investigation, before or by any court, public board, government agency, self-regulatory organization or
body pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary that would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(j)          Compliance.
Except as would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect, (i)  neither the Company nor any Subsidiary is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received written notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) neither
the Company nor any Subsidiary is in violation of any order of any court, arbitrator or governmental body, and (iii) neither
the Company nor any Subsidiary is or has been in violation of any statute, rule or regulation of any governmental authority. The
Company has not taken, in violation of applicable Law, any action designed to or that would have reasonably expected to cause
or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale of the Common Shares.

 

(k)          Placement
Agent’s Fees. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commission (other than for persons engaged by the Investor or its Affiliates)
relating to or arising out of the issuance of the Common Shares to the Investor pursuant to this Agreement. The Company shall
pay, and hold the Investor harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s
fees and out-of-pocket expenses) arising in connection with any such claim for fees arising out of the issuance of the Common
Shares pursuant to this Agreement.

 

    	-10-

    	 

    

 

(l)          Private
Placement; Investment Company; U.S. Real Property Holding Corporation. Neither the Company
nor any of its Affiliates nor, any Person acting on the Company’s behalf has, directly or indirectly, at any time within
the past six months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances
that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities
Act in connection with the offer and sale by the Company of the Common Shares as contemplated hereby or (ii) cause the offering
of the Common Shares pursuant hereto to be integrated with prior offerings by the Company for purposes of any applicable law,
regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market.
Assuming the accuracy of the representations and warranties of the Investor set forth in Section 3.2, no registration under the
Securities Act is required for the offer and sale of the Common Shares by the Company to the Investor as contemplated hereby.
The Company is not required to be registered as, and is not an Affiliate of, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended. The Company is not required to be registered as a United States real property
holding corporation within the meaning of the Foreign Investment in Real Property Tax Act of 1980.

 

(m)          Registration
Rights. The Company has not granted or agreed to grant to any Person any rights (including
“piggy-back” registration rights) to have any securities of the Company registered with the SEC or any other governmental
authority that have not expired or been satisfied or waived.

 

(n)          Application
of Takeover Protections. The Company and its Board of Directors have taken all necessary
action, if any, including under the Florida Business Corporation Act, to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under
the Company’s charter documents or the laws of its state of incorporation that is or could become applicable to the Investor
or its Affiliates as a result of the Investor and the Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, as a result of the Company’s issuance of the Common Shares to the
Investor and the Investor’s ownership thereof.

 

(o)          Disclosure.
All written disclosure provided by the Company to the Investor regarding the Company, its
business and the transactions contemplated hereby are true and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. To the Company’s knowledge, no event or circumstance
has occurred or information exists with respect to the Company or any Subsidiary or their respective business, properties, operations
or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
or their but which has not been so publicly announced or disclosed.

 

(p)          Transactions
With Affiliates and Employees. Except as set forth on Schedule 3.1(p), none of the officers,
directors or employees of the Company is presently a party to any transaction with the Company that would be required to be reported
on Form 10-K by Item 13 thereof pursuant to Regulation S-K Item 404(a) (other than for ordinary course services as employees,
officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer,
director or employee or, to the Company’s knowledge, any corporation, partnership, trust or other entity in which any such
officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.

 

    	-11-

    	 

    

 

(q)          Patents
and Trademarks. The Company and each Subsidiary owns, or possesses adequate rights or licenses
to use, all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights (“Intellectual
Property Rights”) necessary to conduct their respective businesses as now conducted. The Company does not have any knowledge
of any infringement by the Company or any Subsidiary of Intellectual Property Rights of others and there is no claim, action or
proceeding being made or brought, or to the knowledge of the Company, being threatened, against the Company or any Subsidiary
regarding its Intellectual Property Rights.

 

(r)          Regulatory
Permits. The Company and each Subsidiary possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective
businesses as presently conducted and described in the SEC Reports (“Material Permits”), except where the failure
to possess such permits would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect,
and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification
of any Material Permit.

 

(s)          Employee
Relations. Neither the Company nor any Subsidiary is a party to any collective bargaining
agreement or employs any member of a union. The Company believes that its relations with its employees is as disclosed in the
SEC Reports. During the period covered by the SEC Reports, no executive officer or key employee of the Company or any Subsidiary
has notified the Company or any Subsidiary that such officer or key employee intends to leave the Company or a Subsidiary, as
applicable, or otherwise terminate such officer’s or key employee’s employment with the Company or a Subsidiary, as
applicable. To the knowledge of the Company, no executive officer or key employee of the Company or any Subsidiary is in violation
of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition
agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive
officer or key employee does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters.

 

(t)          Labor
Matters. The Company and each Subsidiary is in compliance in all material respects with
all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

    	-12-

    	 

    

 

(u)          Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Common Stock under
the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration. The
Company is in compliance with applicable OTCQB trading qualification requirements. There are no proceedings pending or, to the
Company’s knowledge, threatened against the Company relating to the Common Stock’s continued qualification for trading
on the OTCQB market.

 

3.2         Representations
and Warranties of the Investor. The Investor hereby represents and warrants to the Company
as follows:

 

(a)          Organization;
Authority. The Investor is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations hereunder. The purchase by the Investor of the Common
Shares and Warrants hereunder has been duly authorized by all necessary corporate action on the part of the Investor. This Agreement
has been duly executed and delivered by the Investor and constitutes the valid and binding obligation of the Investor, enforceable
against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(b)          No
Public Sale or Distribution. The Investor is acquiring the Common Shares and Warrants for
its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered under the Securities Act or under an exemption from such registration and in compliance with applicable
federal and state securities laws, and the Investor does not have a present arrangement to effect any distribution of the Common
Shares or Warrants to or through any person or entity; provided, however, that by making the representations herein,
such Investor does not agree to hold any of the Common Shares or Warrant Shares for any minimum or other specific term and reserves
the right to dispose of the Common Shares or Warrant Shares at any time in accordance with or pursuant to a registration statement
or an exemption under the Securities Act.

 

(c)          Investor
Status. At the time the Investor was offered the Common Shares and Warrants, it was, and
at the date hereof it is an “accredited investor” as defined in Rule 501(a) under the Securities Act or a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Investor is not a registered broker dealer
registered under Section 15(a) of the Exchange Act, or a member of the Financial Industry Regulatory Authority, Inc. or an entity
engaged in the business of being a broker dealer.

 

(d)          Experience
of Such Investor. The Investor, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks
of the prospective investment in the Common Shares and Warrants, and has so evaluated the merits and risks of such investment.
The Investor understands that it must bear the economic risk of this investment in the Common Shares indefinitely, and is able
to bear such risk and is able to afford a complete loss of such investment.

 

    	-13-

    	 

    

 

(e)          Access
to Information.  The Investor acknowledges that it has reviewed the Disclosure Materials
and has been afforded: (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the offering of the Common Shares and Warrants and the merits
and risks of investing in the Common Shares and Warrants; (ii) access to information (other than material non-public information)
about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with
respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of the Investor or its
representatives or counsel shall modify, amend or affect the Investor’s right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.

 

(f)          No
Conflicts. The execution, delivery and performance by the Investor of this Agreement and
the consummation by the Investor of the transactions contemplated hereby will not (i) result in a violation of the organizational
documents of the Investor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Investor is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to the Investor, except in the
case of clauses (ii) and (iii) above, for such that are not material and do not otherwise affect the ability of the Investor to
consummate the transactions contemplated hereby.

 

(g)          Restricted
Securities. The Investor understands that the Common Shares are characterized as “restricted
securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction
not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration
under the Securities Act only in certain limited circumstances. The Investor further understands that the certificates evidencing
the Common Shares, Warrants and Warrant Shares purchased by it will contain the following legend:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

 

    	-14-

    	 

    

 

(h)          Prohibited
Transactions. The Investor has not, directly or indirectly, and no Person acting on behalf
of or pursuant to any understanding with the Investor has, engaged in any purchases or sales in the securities, including derivatives,
of the Company (including, without limitation, any Short Sales (a “Transaction”) involving any of the Company’s
securities) since the time that the Investor was first contacted by the Company or any other Person regarding an investment in
the Company. The Investor covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with
the Investor will engage, directly or indirectly, in any Transactions in the securities of the Company (including Short Sales)
prior to the time the transactions contemplated by this Agreement are publicly disclosed.

 

ARTICLE
4

OTHER AGREEMENTS OF THE PARTIES

 

4.1         Filing
of Reports. Until the date that the Investor (or any transferee that is an Affiliate of
the Investor) ceases to own any Common Shares or Warrant Shares, the Company covenants to use its commercially reasonable efforts
to (a) timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to the Securities Act and the Exchange Act, (b) comply with the requirements
of Rule 144(c) under the Securities Act with respect to current public information about the Company, and (c) furnish to the Investor
promptly upon request therefor (i) a written statement by the Company as to its compliance with the requirements of Rule 144(c)
under the Securities Act, and the reporting requirements under the Securities Act and the Exchange Act, and (ii) such reports
and documents of the Company as the Investor may reasonably request to avail itself (or its Affiliates) of any similar rule or
regulation of the SEC allowing it (or its Affiliates) to sell any such securities without registration.

 

4.2         Board
Representation and Observer Rights.

 

(a)          For
so long as the Investor or any of its Affiliates holds at least fifty percent (50%) of the Common Shares purchased under this
Agreement, upon the request of the Investor at any time, and from time to time, the Company shall use its reasonable best efforts
to cause its board of directors (the “Board”) to (i) increase the current Board by one member and elect
to such newly created vacancy an individual designated by the Investor (the “Investor Director”) that is not
a Competitor of, or employed or Affiliated with a Competitor of the Company, and (ii) remove, upon direction from the Investor
for any reason or no reason, any person who is an Investor Director, and appoint each successor to the Investor Director as the
Investor designates; provided, that, such successor is not a Competitor of, or employed or Affiliated with a Competitor of the
Company.

 

    	-15-

    	 

    

 

(b)          For
so long as the Investor or any of its Affiliates holds at least twenty-five percent (25%) of the Common Shares purchased under
this Agreement, and during any and all periods in which no Investor Director shall be serving on the Board, upon the request of
the Investor at any time, and from time to time, the Company shall use its reasonable best efforts to permit one individual designated
by the Investor as a non-participating observer (the “Investor Observer”) to be present at all in-person and
telephonic meetings of the Board and all committees thereof; provided, that, (y) the Investor Observer executes a confidentiality
agreement acceptable to the Company agreeing to hold in confidence and trust all information that the Investor Observer receives
or is provided access to; and (z) the Company reserves the right to exclude the Investor Observer from access to any material
or meeting or portion thereof if the Board determines in good faith after consulting with legal counsel that such exclusion is
reasonably necessary to preserve the attorney client privilege or the Board determines in good faith that such exclusion is necessary
to avoid a conflict of interest between the Company and the Investor Observer. Except as provided in the proviso to the immediately
preceding sentence, the Company shall provide the Investor Observer with the same notice with respect to meetings of the Board
and all committees thereof as provided to the members of the Board and shall provide the Investor Observer any and all other information
that is provided to the members of the Board, whether in connection with any meeting of the Board or committee thereof or otherwise.

 

(c)          The
Investor Director and Investor Observer shall have access to the Company’s books and records and to participate in discussions
with the Company’s management upon reasonable advance notice and during normal business hours. The Company shall reimburse
the Investor Director or Investor Observer, as the case may be, for his or her reasonable out-of-pocket expenses (including travel,
lodging and meal expenses) incurred in connection with the attendance of meetings of the Board or any committee thereof. Notwithstanding
anything to the contrary contained herein, for purposes of this Section 4.2, any individual who is an employee of the Investor
or any direct or indirect subsidiary thereof, shall not be considered a Competitor of the Company or employed or Affiliated with
a Competitor of the Company.

 

4.3         Right
Of First Offer. For so long as the Investor or any of its Affiliates holds at least twenty-five
percent (25%) of the Common Shares purchased under this Agreement, if the Company proposes to issue any new Equity Securities
(other than Excluded Securities) (the “New Securities”) and the Company is required to first offer such New
Securities for purchase by any other stockholder of the Company, the Company shall, subject to applicable securities laws, also
be required to first offer such New Securities, to the extent applicable, to the Investor on no less favorable terms as such New
Securities are required to be offered to such other stockholder of the Company.

 

4.4         Listing
of Shares. Promptly following the date hereof, the Company shall take all necessary action
to cause the Common Shares to be qualified for trading on the OTCQB. If the Company applies to have its Common Stock or other
securities traded on any other principal stock exchange or market, it shall include in such application the Common Shares and
will take such other action as is necessary to cause such Common Shares to be so listed.

 

4.5         Use
of Proceeds. The Company will use the net proceeds from the sale of the Common Shares and
Warrants to meet its obligations under the License Agreement and for other working capital and general corporate purposes.

 

    	-16-

    	 

    

 

4.6         Lock-Up.
During the six (6) month period following the Closing, the Investor shall not, without the
consent of the Company, issue, sell, offer or agree to sell, grant any option for the sale of, pledge, enter into any swap, derivative
transaction or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of any of the Common Shares or Warrant Shares (whether any such transaction is to be settled by delivery of Common Shares or Warrant
Shares, other securities, cash or other consideration) or otherwise dispose (or publicly announce the undersigned’s intention
to do any of the foregoing) of, directly or indirectly, any Common Shares or Warrant Shares. Notwithstanding anything in this
Agreement to the contrary, subject to the requirements of Section 8.7 (including the obligation to be bound by this Section 4.6),
the Investor shall not be restricted from transferring any of the Warrants, Common Shares or Warrant Shares to any Affiliate of
the Investor.

 

4.7         Public
Statements. Except as required by applicable law or regulation, neither party hereto shall
issue any press release or other public announcement concerning the existence of or terms of this Agreement or the Transaction
Documents without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Each Party agrees
to provide to the other Party a copy of any proposed press release or other public announcement as soon as reasonably practicable
under the circumstances prior to the proposed date of dissemination thereof. The party proposing such press release or other public
announcement shall consider in good faith any changes to such proposed press release or public announcement that are requested
by the other party.

 

4.8         Additional
Financing. If at any time, and from time to time, following the date on which the First
Commercial Sale occurs and on or prior to June 30, 2015, the Company proposes to issue and sell securities of the Company with
the principal purpose of raising capital (“Equity Financing”), to the extent so requested by the Company, the
Investor shall purchase up to $4,000,000 of shares of Common Stock, at a price per share equal to the volume weighted average
price of the Common Stock for the five trading day period immediately preceding the date such Equity Financing is publicly announced;
provided, that (a) purchasers other than the Investor and its Affiliates purchase an aggregate of no less than $4,000,000 of shares
of Common Stock in the Equity Financing, at the same per share purchase price paid by, and on other terms and conditions no more
favorable to such persons than the terms and conditions applicable to the Investor in such Equity Financing, and (b) concurrently
with the consummation of the Equity Financing the Company issues and sells to the Investor five year warrants (the “Additional
Warrants” and together with the Initial Warrants, the “Warrants”) to purchase the nearest number
of whole shares of Common Stock equal to 50% of the shares of Common Stock purchased by the Investor in the Equity Financing at
an exercise price per share equal to 135% of the price per share paid in the Equity Financing. The Additional Warrants shall be
in the form attached hereto as Exhibit A. The Investor shall execute and deliver to the Company all transaction documents
reasonably requested by the Company and entered into by other purchasers participating in such Equity Financing. The Company shall
not grant to any other purchaser in connection with such Equity Financing any right not granted to the Investor.

 

ARTICLE
5

CONDITIONS

 

5.1         Conditions
Precedent to the Obligations of the Investor.  The obligation of the Investor to purchase
the Common Shares and Warrants at the Closing is subject to the satisfaction or waiver by the Investor, at or before the Closing,
of each of the following conditions:

 

(a)          Representations
and Warranties. The representations and warranties of the Company contained herein shall
be true and correct in all material respects as of the date when made and as of the Closing as though made on and as of such date
(except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific
date);

 

    	-17-

    	 

    

 

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

 

(c)          Officer’s
Certificate. The Investor shall have received a certificate of the Chief Executive Officer
or Chief Financial Officer of the Company, dated as of the Closing Date, certifying to the fulfillment of the conditions specified
in Section 5.1(a) and (b);

 

(d)          No
Suspensions of Trading in Common Stock. Trading in the Common Stock shall not have been
suspended by the SEC or any other applicable authority at any time since the date of execution of this Agreement;

 

(e)          Absence
of Litigation. No action, suit or proceeding by or before any court or any governmental
body or authority, against the Company or pertaining to the transactions contemplated by this Agreement or their consummation,
shall have been instituted on or before the Closing Date, which action, suit or proceeding would, if determined adversely, have
a Material Adverse Effect; and

 

(f)          No
Injunction. No preliminary or permanent injunction or other order issued by a court of competent
jurisdiction which prevents the consummation of the transactions contemplated by any of the Transaction Documents shall have been
issued and remain in effect, provided, however, that the parties shall use their respective commercially reasonable efforts to
have any such order or injunction lifted.

 

5.2         Conditions
Precedent to the Obligations of the Company. The obligation of the Company to sell the Common
Shares and Warrants at the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing, of each
of the following conditions:

 

(a)          Representations
and Warranties. The representations and warranties of the Investor contained herein shall
be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such
date (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific
date);

 

(b)          Performance.
The Investor shall have performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by
the Investor at or prior to the Closing;

 

(c)          Officer’s
Certificate. The Company shall have received a certificate of an officer of the Investor,
dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Section 5.2(a), and (b); and

 

    	-18-

    	 

    

 

(d)          No
Injunction. No preliminary or permanent injunction or other order issued by a court of competent
jurisdiction which prevents the consummation of the transactions contemplated hereby shall have been issued and remain in effect,
provided, however, that the parties shall use their respective commercially reasonable efforts to have any such order or injunction
lifted.

 

ARTICLE
6

REGISTRATION RIGHTS

 

6.1         Piggy-Back
Registration Rights. If at any time the Company shall determine to prepare and file with
the SEC a registration statement relating to an offering for its own account or the account of others under the Securities Act
of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to the
Investor, provided it owns Registrable Securities and is not then eligible to sell all of its Registrable Securities under Rule
144 in a three-month period, written notice of such determination and if, within ten (10) days after receipt of such notice, the
Investor shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable
Securities the Investor requests to be registered. The Investor shall comply with any request to furnish the Company a completed
selling stockholder questionnaire in customary form and acknowledges that it shall not be entitled to the inclusion of its Registrable
Securities unless it has returned such questionnaire to the Company. Notwithstanding
the foregoing, in the event that, in connection with any underwritten public offering, the managing underwriter(s) thereof shall
impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such
underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution,
then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities
with respect to which the Investor has requested inclusion hereunder as the underwriter shall permit; provided, however,
that (i) the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities,
the holders of which are not contractually entitled to inclusion of such securities in such Registration Statement or are not
contractually entitled to pro rata inclusion with the Registrable Securities and (ii) after giving effect to the immediately preceding
proviso, any such exclusion of Registrable Securities shall be made pro rata among the Investor and the holders of other securities
having the contractual right to inclusion of their securities in such Registration Statement, in proportion to the number of Registrable
Securities or other securities, as applicable, sought to be included by the Investor and such other holders. Notwithstanding the
foregoing sentence, in the case of an underwritten offering by the Company for its own account, no securities proposed to be included
by the Company in such underwritten offering shall be cutback and, after taking into account all of the securities proposed to
be included by the Company in such underwritten offering, the remaining securities shall be allocated among the Registrable Securities
and the other securities requested to be included therein in accordance with the proviso of the immediately preceding sentence.
If an offering in connection with which the Investor is entitled to registration under this Section 6.1 is an underwritten offering,
then the Investor shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten
offering using the same underwriter or underwriters and, subject to the provisions of this Agreement, on the same terms and conditions
as other shares of Common Stock included in such underwritten offering and shall enter into an underwriting agreement in a form
and substance reasonably satisfactory to the Company and the underwriter or underwriters.

 

    	-19-

    	 

    

 

6.2           Registration
Expenses. The Company shall pay all fees and expenses incurred by the Company incident to
the performance of or compliance with Article VI of this Agreement by the Company, including without limitation (a) all
registration and filing fees and expenses related to filings with the SEC, any Trading Market and in connection with applicable
state securities or Blue Sky laws, (b) printing expenses (including without limitation expenses of printing certificates
for Registrable Securities), (c) messenger, telephone and delivery expenses, (d) fees and disbursements of counsel for
the Company, (e) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement and (f) all listing fees to be paid by the Company to the Trading Market. The Company shall
also pay the reasonable legal fees of the Investor incurred in connection with its legal review of the Registration Statement
in an amount not to exceed $10,000 in the aggregate.

 

ARTICLE
7

INDEMNIFICATION

 

7.1           Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify
and hold harmless the Investor, its officers, directors, partners, members, agents and employees, each Person who controls the
Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, partners, members, agents and employees of each such controlling Person, to the fullest extent permitted by applicable
law, from and against any and all Losses, as incurred, arising out of or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement or any other agreement, certificate, instrument or document delivered
in connection with the consummation of the transactions hereby (which, for the avoidance of doubt, shall not include the License
Agreement or the Supply Agreement or any agreements, certificates, instruments or documents ancillary thereto), (ii) any breach
of any covenant, agreement or obligation of the Company contained in this Agreement or any other agreement, certificate, instrument
or document delivered in connection with the consummation of the transactions contemplated hereby (which, for the avoidance of
doubt, shall not include the License Agreement or the Supply Agreement or any agreements, certificates, instruments or documents
ancillary thereto), (iii) any cause of action, suit or claim brought or made against such Indemnified Party (as defined in Section
7.3(a) below) by a third party (including for these purposes a derivative action brought on behalf of the Company), arising out
of or resulting from (x) the execution, delivery, performance or enforcement of this Agreement or any other agreement, certificate,
instrument or document delivered in connection with the consummation of the transactions contemplated hereby (which, for the avoidance
of doubt, shall not include the License Agreement or the Supply Agreement or any agreements, certificates, instruments or documents
ancillary thereto), or (y) the status of Indemnified Party as a holder of Common Stock (unless, and only to the extent that,
such action, suit or claim is based, including in part, upon a breach of the Investor’s representations, warranties or covenants
in this Agreement or any other agreement, certificate, instrument or document delivered in connection with the consummation of
the transactions contemplated hereby (which, for the avoidance of doubt, shall not include the License Agreement or the Supply
Agreement or any agreements, certificates, instruments or documents ancillary thereto), or any conduct by the Investor that constitutes
fraud, gross negligence or willful misconduct), or (iv) any untrue or alleged untrue statement of a material fact contained in
the Registration Statement, any Prospectus or any form of Company prospectus or in any amendment or supplement thereto or in any
Company preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement
thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent,
that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding
the Investor furnished in writing to the Company by the Investor for use therein, or to the extent that such information relates
to the Investor or the Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly
approved by the Investor in writing expressly for use in the Registration Statement, or (B) with respect to any prospectus, if
the untrue statement or omission of material fact contained in such prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented, if such corrected prospectus was timely made available by the Company to the Investor, and the
Investor seeking indemnity hereunder was advised in writing not to use the incorrect prospectus prior to the use giving rise to
Losses.

 

    	-20-

    	 

    

 

7.2         Indemnification
by Investor. The Investor shall indemnify and hold harmless the Company and its directors,
officers, agents and employees to the fullest extent permitted by applicable law, from and against all Losses (as determined by
a court of competent jurisdiction in a final judgment not subject to appeal or review) arising solely out of any untrue statement
of a material fact contained in the Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising out of or relating to any omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, but only to the extent that such untrue statements or omissions are
based solely upon information regarding the Investor furnished to the Company by the Investor in writing expressly for use therein,
or to the extent that such information relates to the Investor or the Investor’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by the Investor expressly for use in the Registration Statement,
such Prospectus or such form of prospectus or in any amendment or supplement thereto. In no event shall the liability of the Investor
hereunder be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

7.3         Conduct
of Indemnification Proceedings.

 

(a)          If
any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”)
in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory
to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely
prejudiced the Indemnifying Party.

 

    	-21-

    	 

    

 

(b)          An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying
Party has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding;
or (iii) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and
the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of separate
counsel shall be at the expense of the Indemnifying Party). It shall be understood, however, that the Indemnifying Party shall
not, in connection with any one such Proceeding (including separate Proceedings that have been or will be consolidated before
a single judge) be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified
Parties, which firm shall be appointed by a majority of the Indemnified Parties. The Indemnifying Party shall not be liable for
any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld.
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

(c)          All
reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within 20 Trading Days of written notice thereof to the Indemnifying Party (regardless of whether
it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying
Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification hereunder).

 

    	-22-

    	 

    

 

(d)          If
a claim for indemnification under Section 7.1 or 7.2 is unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined
by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Article 7, any reasonable attorneys’ or other reasonable fees
or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for
such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

 

The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7.3(d) were determined by
pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 7.3(d), the Investor shall not be required
to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Investor
from the sale of the Registrable Securities subject to the Proceeding exceed the amount of any damages that the Investor has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.

 

The
indemnity and contribution agreements contained in this Article 7 are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties.

 

ARTICLE
8

GENERAL PROVISIONS

 

8.1           Termination.
This Agreement may be terminated by the Company or the Investor, by written notice to the
other party, if the Closing has not been consummated by November 29, 2013; provided that no such termination will affect
the right of any party to sue for any breach by the other party (or parties) occurring prior to such termination.

 

8.2           Fees
and Expenses. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the
Common Shares.

 

8.3           Entire
Agreement. This Agreement, together with the Exhibits and Schedules hereto, contains the
entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the Company will execute and deliver to the Investor such
further documents as may be reasonably requested in order to give practical effect to the intention of the parties under this
Agreement.

 

    	-23-

    	 

    

 

8.4           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile or email at the facsimile number or email address specified in this Section
 prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified in this
Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading
Day following the date of deposit with a nationally recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given. The addresses, facsimile numbers and email addresses for such notices and communications
are those set forth on the signature pages hereof, or such other address or facsimile number as may be designated in writing hereafter,
in the same manner, by any such Person.

 

8.5           Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Investor or, in the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.

 

8.6           Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement
and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against
any party.

 

8.7           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties
and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Investor, which consent may be withheld by the Investor in its sole discretion. The Investor
may assign its rights under this Agreement to any Person to whom the Investor assigns or transfers any Common Shares, provided
(i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company after such assignment, (ii) the Company is furnished with written notice of (x) the name and address
of such transferee or assignee and (y) the Registrable Securities with respect to which such registration rights are being transferred
or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee
is restricted under the Securities Act and applicable state securities laws, (iv) such transferee agrees in writing to be bound,
with respect to the transferred Common Shares, by the provisions hereof that apply to the “Investor” and such transferee
is not a Competitor of, or Affiliated with a Competitor of, the Company and (v) such transfer shall have been made in accordance
with the applicable requirements of this Agreement and with all laws applicable thereto.

 

    	-24-

    	 

    

 

8.8           No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto
and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Indemnified Party is an intended third party beneficiary of Section 7.1 or Section
7.2, as applicable, and (in each case) may enforce the provisions of such Section directly against the parties with obligations
thereunder.

 

8.9           Governing
Law; Venue; Waiver of Jury Trial. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT
AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE COMPANY AND THE INVESTOR HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN
THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR THE INVESTOR HEREUNDER,
IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVE, AND AGREE
NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR THE INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR
NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
THE COMPANY AND THE INVESTOR HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

 

8.10         Survival.
The representations and warranties, agreements and covenants contained herein shall survive
the Closing.

 

8.11         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission or email attachment, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or
email-attached signature page were an original thereof.

 

8.12         Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired
thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

    	-25-

    	 

    

 

8.13         Replacement
of Certificates. If any certificate or instrument evidencing any Common Shares is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate
affidavit of that fact and an agreement to indemnify and hold harmless the Company for any losses in connection therewith.

 

8.14         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, each of the Investor and the Company will be entitled to seek specific performance under this Agreement.
The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other
than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

[SIGNATURE PAGES
TO FOLLOW]

 

    	-26-

    	 

    

 

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

 

	 	Alliqua, INC.
	 	 	 
	 	By:	/s/ David Johnson
	 	 	Name:  David Johnson
	 	 	Title: Chief Executive Officer

 

	 	Address for Notice:
	 	 
	 	2150 Cabot Boulevard West
	 	Langhorne, PA  19047
	 	Attn: Chief Executive Officer
	 	Facsimile No.:  (215) 702-8535
	 	Telephone No.: (215) 702-8535
	 	 
	 	With a copy (which shall not constitute notice) to:
	 	 
	 	Lowenstein Sandler LLP
	 	65 Livingston Avenue
	 	Roseland, NJ  07068
	 	Attn: Michael Lerner, Esq.
	 	Facsimile No.: (973) 597-6395
	 	Telephone No.: (973) 597-6394

 

    	 

    	 

    

 

	 	Celgene CORPORATION
	 	 	 
	 	By:	/s/ Perry Karsen
	 	Name: Perry Karsen
	 	Title: Executive Vice President

 

	 	Address for Notice:
	 	 
	 	86 Morris Avenue
	 	Summit, New Jersey 07901
	 	Attention: General Counsel
	 	Facsimile: (908) 673-2771
	 	Telephone: (908) 673-9757
	 	 
	 	with copies (which shall not constitute notice)
    to:

 

	 	Proskauer Rose LLP
	 	Eleven Times Square
	 	New York, New York 10036
	 	Attention: Robert A. Cantone, Esq.
	 	Facsimile: (212) 969-2900
	 	Telephone: (212) 969-3235

  

    	 

    	 

    

 

Exhibit
A

 

FORM
OF WARRANT

 

NEITHER
THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. 

 

ALLIQUA,
INC. 

 

WARRANT

 

	Warrant No. [    ]	 	Dated: [                    ]

 

Alliqua,
Inc., a Florida corporation (the “Company”), hereby certifies that, for value received, Celgene Corporation,
a Delaware corporation or its registered assigns (the “Holder”), is entitled to purchase from the Company
up to a total of [                ]1
shares of common stock, $0.001 par value per share (the “Common Stock”) of the Company
(each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at
an exercise price equal to $[        ]2
per share (as adjusted from time to time as provided in Section 8, the “Exercise Price”),
at any time and on or after [                    ]
(the “Initial Exercise Date”) and through and including the date that is five (5) years from
the Initial Exercise Date, or if such day is not a Business Day (as defined in the Purchase Agreement, as defined below), on the
next preceding Business Day (the “Expiration Date”), and subject to the following terms and conditions.
This Warrant (this “Warrant”) is issued pursuant to that certain [                    ],
dated as of [                    ],
by and among the Company and the Holder (the “Purchase Agreement”).

 

1.
Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of record of this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

 

1
For the Initial Warrants, 50% of the Common Shares issued to the Investor at the Closing.
For the Additional Warrants, 50% of the shares issued to Investor and its Affiliates in the Equity Financing.

 

2
For the Initial Warrants, $0.13 per share. For the Additional Warrants, 135% of the price
per share paid by Investor and its Affiliates in the Equity Financing.

 

    	 

    	 

    

  

2.
Registration of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at
its address specified herein. Upon any such registration of transfer, a new warrant to purchase Common Stock, in substantially
the Form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not
so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

 

3.
Exercise and Duration of Warrant.

 

(a)
This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the Initial Exercise
Date and prior to 5:30 p.m., New York City time on the Expiration Date at which time the portion of this Warrant not exercised
prior thereto shall be and become void and of no value.

 

(b)
The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the Form attached hereto
(the “Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise
Price for the number of Warrant Shares as to which this Warrant is being exercised, and the date such items are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.”
The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder; provided, however,
that in the event that this Warrant is exercised in full or for the remaining unexercised portion hereof, the Holder shall deliver
this Warrant to the Company for cancellation within a reasonable time after such exercise. In the event of a partial exercise
of this Warrant, execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant
and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares. 

 

4.
Delivery of Warrant Shares.

 

(a)
Upon exercise of this Warrant, the Company shall promptly following the Exercise Date (but in no event later than three Trading
Days after the Exercise Date) credit such aggregate number of Warrant Shares to which the Holder is entitled to receive pursuant
to such exercise of this Warrant to the Holder’s or its designee’s balance account with The Depository Trust Company
(“DTC”) through its Deposit Withdrawal Agent Commission system, or if the Company’s transfer
agent for the Common Stock (the “Transfer Agent”) is not participating in the Fast Automated Securities
Transfer Program or if the certificates are required to bear a legend regarding restriction on transferability, issue and dispatch
by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled to receive
pursuant to such exercise of this Warrant. The Holder, or any Person so designated by the Holder to receive Warrant Shares, shall
be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date, irrespective of the date such Warrant
Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares,
as the case may be. For purposes of this Warrant, “Person” shall mean an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind and “Trading Day”
means a day on which the Common Stock is traded on the principal securities exchange or securities market on which the Common
Stock is then traded. 

 

    	 

    	 

    

 

(b)
This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon
surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense,
a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

 

5.
Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant
shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental
tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any
transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder.
The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant
or receiving Warrant Shares upon exercise hereof.

 

6.
Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant,
but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and
reasonable bond or indemnity, if requested. Applicants for a New Warrant under such circumstances shall also comply with such
other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe.

 

7.
Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate
of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares
upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the
Holder (after giving effect to the adjustments of Section 8, if any). The Company covenants that all Warrant Shares
so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may
be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may
be listed.

 

    	 

    	 

    

 

8.
Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject
to adjustment from time to time as set forth in this Section 8.

 

(a)
Stock Dividends, Subdivisions or Combinations. If the Company, at any time while this Warrant is outstanding, (i) pays
a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares
of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines
outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be adjusted
by multiplying the Exercise Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event. Simultaneously with any adjustment to the Exercise Price pursuant to this subsection (a), the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be adjusted proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares, as the case may be, shall
be the same as the aggregate Exercise Price in effect immediately prior to such adjustment to the Exercise Price and the number
of Warrant Shares.

 

(b)
Adjustments Upon Reorganization, Reclassification, Consolidation or Merger. In the event of any (i) capital reorganization
of the Company, (ii) reclassification of the Common Stock of the Company (other than as a result of a stock dividend or subdivision,
split-up or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale
of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than
a transaction covered by Section 8(a)), in each case which entitles the holders of Common Stock to receive (either directly
or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, this Warrant
shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding
and shall thereafter be exercisable for the kind and number of shares of stock or other securities or assets of the Company or
of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization,
reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately
prior to the time of such transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result
of such exercise; and, in such case, appropriate adjustments (in form and substance reasonably satisfactory to the Holder) shall
be made with respect to the Holder’s rights hereunder to insure that the provisions of this Section 8 shall thereafter
be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable
upon exercise of this Warrant. The provisions of this Section 8(c) shall similarly apply to all successive reorganizations,
reclassifications, consolidations, mergers, sales or similar transactions. The Company shall not effect any such reorganization,
reclassification, consolidation, merger, sale or similar transaction unless, prior to the consummation thereof, the successor
Person (if other than Company) resulting therefrom, shall assume, by written instrument substantially similar in Form and
substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities
or assets which, in accordance with the foregoing provisions, the Holder shall be entitled to receive upon exercise of this Warrant.
Notwithstanding anything to the contrary contained herein, with respect to any corporate event or transaction contemplated by
this Section 8(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to exercise
this Warrant in accordance with Section 3(b) instead of giving effect to the provisions of this Section 8(c) with
respect to this Warrant.

 

    	 

    	 

    

 

(c)
[Reserved]

 

(d)
Calculations. All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th
of a share, as applicable.

 

(e)
Certificate as to Adjustment. As promptly as reasonably practicable following any adjustment of the Exercise Price, but
in no event later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive
officer of the Company setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying
the calculation thereof. No later than five (5) Business Days following the receipt by Company of a written request by the
Holder, the Company shall furnish the Holder a certificate of an executive officer certifying the Exercise Price then in effect
and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise
of the Warrant.

 

(f)
Notice of Corporate Events. If (i) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock
applicable to all holders thereof, (iii) the Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (iv) the approval of
any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation
or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (v) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each
case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the
Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders
of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

    	 

    	 

    

 

9.
Purchase Rights. In addition to any adjustments pursuant to Section 8 above, if at any time prior to the Expiration
Date the Company grants, issues or sells (y) any securities directly or indirectly exchangeable for or convertible into Common
Stock or (z) any rights to purchase stock, warrants, securities or other property, in the case of clauses (y) and (z),
pro rata to all of the record holders of any class of shares of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

 

10.
Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise
of this Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise
of this Warrant, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.

 

11.
Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise
Notice) shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement on a day that is
not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service, or (d) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices or communications shall be as set forth in the Purchase
Agreement.

 

12.
Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the
Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation
to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholder services business
shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder’s last address as shown on the Warrant Register.

 

13.
Miscellaneous

 

(a)
Subject to compliance with applicable securities laws and Section 4.6 of the Purchase Agreement, this Warrant may be assigned
by the Holder. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors
and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended
only in writing signed by the Company and the Holder and their successors and assigns.

 

    	 

    	 

    

 

(b)
The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment.
Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above
the amount payable therefor on such exercise, (ii) will take all such action as may be reasonably necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant,
and (iii) will not close its stockholder books or records in any manner which interferes with the timely exercise of this
Warrant.

 

(c)
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE COMPANY AND, BY ACCEPTING THIS WARRANT, THE HOLDER
HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH
OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY
OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF THIS WARRANT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT
TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT,
THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH OF THE COMPANY AND, BY ACCEPTING THIS WARRANT, THE HOLDER HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN
EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS
AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

 

(d)
The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect
any of the provisions hereof.

 

(e)
In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will
attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

    	 

    	 

    

 

(f)
The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant,
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit
the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The
Company acknowledges that a breach by it of its obligations hereunder may cause irreparable harm to the Holder and that the remedy
at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to seek an injunction restraining
any breach.

 

(g)
No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares,
and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Warrant Shares or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors
of the Company. Prior to the exercise of this Warrant, the Holder shall not have or exercise any rights as a stockholder of the
Company by virtue of its ownership of this Warrant.

 

SIGNATURE
PAGE FOLLOWS

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated
above.

 

	ALLIQUA, INC.
	 	 
	By:	 	 

	 	 	Name:
	 	 	Title:

 

    	 

    	 

    

 

FORM OF
EXERCISE NOTICE 

 

(To
be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant)

 

To
Alliqua, Inc.:

 

The
undersigned is the Holder of Warrant No.      (the “Warrant”) issued by Alliqua,
Inc., a Florida corporation (the “Company”). Capitalized terms used herein and not otherwise defined
have the respective meanings set forth in the Warrant. 

 

	1.	The Warrant is currently exercisable to purchase
    a total of                  Warrant Shares.

 

	2.	The undersigned Holder hereby exercises its right
    to purchase                  Warrant Shares
    pursuant to the Warrant.

 

	3.	The holder shall pay the sum of $        
    to the Company in accordance with the terms of the Warrant.

 

	4.	Pursuant to this exercise, the Company shall deliver
    to the holder                  Warrant Shares
    in accordance with the terms of the Warrant.

 

	5.	Following this exercise, the Warrant shall be exercisable
    to purchase a total of                  Warrant
    Shares.

	 	 	 	 	 	 	 	 	 
	Dated:	 	 
	 	 	 	Name of Holder:
	 	 	 	 	 
	 	 	 	 	 	 	(Print)	 	 

	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 

	 	 	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	Title:	 	 

	 	 	 	 
	ACKNOWLEDGED
    AND AGREED TO this      day of                     ,
    20	
	 
	 	 
	ALLIQUA, INC.	 
	 	 	 
	By:	 	 
	 
	 	 	Name:	 
	 	 	Title:	 

 

    	 

    	 

    

 

FORM OF
ASSIGNMENT

 

[To
be completed and signed only upon transfer of Warrant]

 

FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                         
the right represented by the within Warrant to purchase                 
shares of Common Stock of Alliqua, Inc. to which the within Warrant relates and appoints                             
attorney to transfer said right on the books of Alliqua, Inc. with full power of substitution in the premises. 

	 	 	 
	Dated:	 	,

 

	 

	 
	 

	Address of Transferee
	 
	 

	 
	 

 

In
the presence of:

 

    	 

    	 

    

 

Exhibit B

 

OPINION
OF COMPANY COUNSEL

 

1.     The
Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Florida.

 

2.     The authorized capital stock of the Company consists of [_______] shares of Common Stock, $.001 par value, and [_________]
shares of Preferred Stock, par value $.[__] per share. 

 

3.     The Company has all necessary corporate power and authority to execute and deliver the Agreement, to perform its obligations
thereunder and to consummate the transactions contemplated thereby.

 

4.     The
Company has all necessary power and authority to issue and deliver the Common Shares; the Common Shares have been duly authorized,
and, when duly issued and delivered to the Investor, will be duly and validly issued, fully paid and nonassessable and will be
issued in compliance with federal and state securities laws.

 

5.     Assuming
the accuracy of the representations and warranties of the Investor contained in the Agreement and the compliance of such parties
with the agreements set forth herein and therein, it is not necessary, in connection with the issuance and sale of the Common
Shares, in the manner contemplated by the Agreement, to register the Securities under the Securities Act.

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