Alliqua, Inc. (Form: 8-K, Received: 02/07/2013 17:30:30)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

_________________

Date of Report (Date of earliest event reported): February 5, 2013

Alliqua, Inc.

(Exact Name of Registrant as Specified in its Charter)

Florida		000-29819		58-2349413
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

850 Third Avenue Suite 1801 New York, New York		10022
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (646) 218-1450

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

David I. Johnson . Alliqua, Inc. (the “Company”) previously announced a strategic realignment of the senior executive team, including the election on January 30, 2013 of David Johnson (one of our directors) as Chief Executive Officer. On February 5, 2013 (effective February 4, 2013), the Company and Mr. Johnson entered into a new employment agreement.

David I. Johnson, age 55, had been named as a director of the Company and Executive Chairman of Aquamed Technologies, Inc., our wholly-owned subsidiary, on November 29, 2012. Prior thereto, Mr. Johnson served as the chief executive officer of ConvaTec Inc., or ConvaTec, from 2008 through 2012. ConvaTec was a division of Bristol-Myers Squibb, Inc. until 2008, when it was sold from its pharmaceutical parent to Avista Capital Partners and Nordic Capital in a deal valued at $4.1 billion. ConvaTec is a leading developer and marketer of innovative medical technologies. With four key business units – Ostomy Care, Wound Therapeutics, Continence and Critical Care, and Infusion Devices – ConvaTec provides a broad array of products and customer solutions developed from rigorous science and borne from collaboration with healthcare professionals and end-users. Concurrently with the sale of ConvaTec to Avista Capital Partners and Nordic Capital, ConvaTec acquired the assets of Copenhagen-based Unomedical to expand ConvaTec’s manufacturing and infrastructure into Europe. Prior to his tenure with ConvaTec, Mr. Johnson held several senior positions in the U.S., Europe and Canada with Zimmer Inc., Thermo Fisher Scientific Inc. and Baxter Corporation. He served as a member of ConvaTec’s Board of Directors and the Board of the Advanced Medical Technology Association, or AdvaMed, where he chaired the Global Wound Sector Team for four years. Mr. Johnson received an undergraduate business degree in marketing from the Northern Alberta Institute of Technology in Edmonton, Alberta, Canada, completed the INSEAD Advanced Management Program in Fontainbleu, France, and is a fellow from the Wharton School of the University of Pennsylvania.

In connection with his appointment as Chief Executive Officer, the Company entered into an Executive Employment Agreement (the “Employment Agreement”) with Mr. Johnson. The Employment Agreement has an initial term of three years and will be automatically renewed for an additional one-year term unless terminated by either party upon written notice provided not less than four months before the end of the initial term. Under the Employment Agreement, Mr. Johnson is entitled to an annual salary of $350,000, which may be increased, but not decreased, in the Board’s discretion. Mr. Johnson is also eligible to receive an annual bonus of up to 100% of his base salary, provided that he is employed with the Company on December 31 of the year to which the bonus relates. The amount of Mr. Johnson’s annual bonus, if any, will be determined based upon the achievement of certain performance criteria. The performance criteria for 2013 are to be determined within sixty (60) days of the date of the Employment Agreement. The performance criteria for all future years will be set by the Compensation Committee of the Board after consultation with Mr. Johnson. Mr. Johnson is also entitled to a monthly automobile allowance of $750, reimbursement of up to $200 per month for the cost of a term life insurance policy having a face amount of $1 million, and benefit plans provided by the Company to all employees and executive employees.

Mr. Johnson is entitled to receive the following equity awards pursuant to the Alliqua, Inc. 2011 Long-Term Incentive Plan (the “2011 Plan”) or, if there are not sufficient shares available under the 2011 Plan, pursuant to a stand-alone award agreement:

(i)

a nonqualified stock option to purchase a number of shares of the Company’s common stock equal to three percent of the Company’s total outstanding common stock (determined on a fully-diluted basis as of February 4, 2013), with the following terms: (A) an exercise price equal the fair market value of a share of common stock on the date of grant; (B) immediate vesting; and (C) a term of 10 years; and

(ii)

an award of nonqualified stock options on the last business day of each calendar quarter through February 4, 2016 relating to a number of shares of common stock equal to 0.333% percent of the Company’s outstanding common stock as of the date of grant (determined on a fully-diluted basis), with the following terms: (A) an exercise price equal to the fair market value of a share of common stock on the date of grant, (B) the first eight (8) grants will be 100% vested on the first anniversary of their respective dates of grant and the last four (4) grants will be 100% vested on the date of grant, (C) immediate vesting of any unvested restricted stock units upon the effective date of a “Change in Control” (as defined in the 2011 Plan) and (D) a term of ten years.

Mr. Johnson is also eligible to receive additional equity such amount and on such terms as is determined by the Board. These options are in addition to the options he received upon joining the Company in November 2012, described in our Form 8-K dated December 5, 2012.

The employment agreement also contains certain confidentiality, non-solicitation and non-disparagement requirements for Mr. Johnson.

The Company has the right to terminate the Employment Agreement at any time for cause. “Cause” is defined as Mr. Johnson’s commission of any of the following: an act of theft, embezzlement or fraud; an act of intentional dishonesty or willful misrepresentation of a material nature; any willful misconduct with regard to the Company; a material breach of any fiduciary duties owed to the Company; conviction of, or pleading nolo contendere or guilty to, a felony or misdemeanor (other than a traffic infraction) that is reasonably likely to cause damage to the Company or its reputation; a material violation of the Company’s written policies, standards or guidelines that is not cured within 30 days; refusal to perform the material duties and responsibilities required by the Employment Agreement, subject to a 30 day cure period; and a material breach of the Employment Agreement or any other agreement to which Mr. Johnson and the Company are parties that is not cured within 30 days. The Employment Agreement may also be terminated by either party at any time without cause upon 30 days written notice, and by Mr. Johnson with good reason upon 90 days written notice, which shall include a 30 day cure period. “Good Reason” is defined as the occurrence, without Mr. Johnson’s prior written consent, of a material reduction in base salary, a material diminution in title, duties, responsibility or authority, relocation of his primary office to an office located 35 miles from the office in Langhorne, Pennsylvania, a material breach by the Company of any agreement with Mr. Johnson or failure by the Company to have any successor assume the Employment Agreement.

If Mr. Johnson is terminated by reason of death or disability, the Company will pay to him or his estate or a pro rata portion of any earned, but unpaid, bonus for services rendered during the year preceding the date of termination. If Mr. Johnson’s employment is terminated by the Company without cause or by him with good reason, subject to compliance with the confidentiality, non-solicitation and non-disparagement requirements of the Employment Agreement and the execution of a release of claims, (i) the Company will pay him an amount equal to the sum of 24 months base salary; (ii) either his pro rata bonus for the year if termination of employment is in the first two years of the term, or two years of bonus calculated at the target bonus level (payable over 24 months) if termination is after the first two years of the term ; (iii) all outstanding stock options and other equity awards granted to Mr. Johnson will vest, to the extent not previously vested, and the stock options will remain exercisable for three months; and (iv) the Company will provide continued healthcare coverage until the earlier of (x) the expiration of the severance period, or (y) the date that Mr. Johnson’s “COBRA” coverage terminates or expires or (z) the date that Mr. Johnson obtains new employment that offers substantially similar health benefits.

The foregoing summary of the Executive Employment Agreement is not complete, and is qualified in its entirety by reference to the full text of the agreement that is attached as Exhibit 10.1 to this Current Report on Form 8-K. Readers should review the Executive Employment Agreement for a more complete understanding of its terms and conditions.

James Sapirstein . The Company also previously announced the resignation of James Sapirstein as chief executive officer of the Company, and his agreement to assume the role of Chief Executive Officer of Alliqua BioMedical, Inc., the Company's wholly-owned subsidiary focused on inroducing new active pharmaceutical ingredients into its hydrogel technology for the topical delivery of local and systemic therapies. On February 5, 2013, effective February 4, Mr. Sapirstein also resigned as a director and president of the Company, and entered into a First Amendment to Executive Employment Agreement. The amendment reflects Mr. Sapirstein’s new position with the Company, and provides for him to receive a bonus of $52,500 for his services in 2012, as well as $5,000 towards his counsel fees in negotiating the amendment.

The foregoing summary of the First Amendment to Executive Employment Agreement is not complete, and is qualified in its entirety by reference to the full text of the agreement that is attached as Exhibit 10.1 to this Current Report on Form 8-K. Readers should review the First Amendment to Executive Employment Agreement for a more complete understanding of its terms and conditions.

ITEM 7.01 REGULATION FD DISCLOSURE.

On February 5, 2013, the Company issued a press release announcing the appointment of Mr. Johnson as Chief Executive Officer and the change in Mr. James Sapirstein’s position from Chief Executive Officer at Alliqua, Inc. to Chief Executive Officer of Alliqua BioMedical, the Company’s wholly-owned subsidiary focused on introducing new active pharmaceutical ingredients into its hydrogel technology for the topical delivery of local and systemic therapies. A copy of that press release is filed as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained herein and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any of our filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this Item 7.01, including Exhibit 99.1 hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

Exhibit Number		Description

10.1		Executive Employment Agreement, dated as of February 4, 2013, between Alliqua, Inc. and David Johnson

10.2		First Amendment to Executive Employment Agreement, dated as of February 4, 2013, between Alliqua, Inc. and James Sapirstein

10.3		Indemnification Agreement, dated as of February 4, 2013, in favor of David Johnson

10.4		Nonqualified Stock Option Agreement in favor of David Johnson

99.1		Press Release, dated February 5, 2013

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALLIQUA, INC.

Date February 7, 2013	By:	/s/ Steven Berger
	Name:	Steven Berger
	Title:	Chief Financial Officer

EXHIBIT 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (“ Agreement ”) is entered into effective February 4, 2013 (the “ Effective Date ”) by and between Alliqua, Inc., with its principal place of business at 850 Third Avenue, Suite 1801, New York, NY 10022 (the “ Company ”), and David Johnson (“ Executive ”). In consideration of the mutual promises and covenants contained in this Agreement, the parties agree as follows:

1. Agreement to Employ . The Company desires to secure the services of Executive as its President and Chief Executive Officer (“ CEO ”). The Company and Executive desire to enter into this Agreement to, among other things, set forth the terms of Executive’s employment with the Company. The Company and Executive acknowledge that this Agreement supersedes any other offer, agreement or promises made by anyone, specifically concerning the offer of employment by the Company and the terms of Executive’s employment, and this Agreement comprises the complete agreement between Executive and the Company concerning Executive’s employment by the Company.

2. Term of Agreement . This Agreement shall be binding upon and enforceable against the Company and Executive immediately when both parties execute the Agreement. The Agreement’s stated term and the employment relationship created hereunder will begin on the Effective Date and will remain in effect for three (3) years, unless earlier terminated in accordance with Section 8 (the “ Initial Employment Term ”). This Agreement shall be automatically renewed for successive one (1) year terms after the Initial Employment Term (each one-year period, a “ Renewal Term ”), unless terminated by either party upon written notice (“ Non-Renewal Notice ”) provided not less than four (4) months before the end of the Initial Employment Term or any Renewal Term, or unless earlier terminated in accordance with Section 8. The period during which Executive is employed under this Agreement (including any Renewal Term) will be referred to as the “ Employment Period .”

3. Surviving Agreement Provisions . Notwithstanding any provision of this Agreement to the contrary, the parties’ respective rights and obligations under Sections 6 through 12 shall survive any termination or expiration of this Agreement or the termination of Executive’s employment for any reason whatsoever.

4. Services to be Provided by Executive .

(a) Position and Responsibilities . Subject to the Agreement’s terms, Executive shall serve as the Company’s President and CEO and shall report directly and solely to the Company’s board of directors (the “ Board ”). Executive shall have the duties and privileges customarily associated with an executive occupying such role at a publicly-traded company, and shall perform all reasonable acts customarily associated with such role, or necessary and/or desirable to protect and advance the best interests of the Company. Executive shall also serve as a Member of the Board and as Chairman of the board of directors of AquaMed Technologies, Inc. (the “ AquaMed Board ”). The Company shall make reasonable efforts, consistent with the Board’s fiduciary duties, to cause Executive to be nominated and re-elected as a member of the Board and as Chairman of the AquaMed Board at the expiration of each then-current term as a director; provided, however, if Executive’s employment terminates for any reason, Executive agrees he immediately shall resign from the Board and the AquaMed Board if so requested in writing by the Board. For purposes of this Agreement only, all references to the Board shall not include Executive.

(b) Primary Office . Executive’s primary office shall be at 2150 Cabot Boulevard West, Langhorne, Pennsylvania (the “ Primary Office ” ), subject to reasonable travel requirements.

(c) Executive’s Employment Representations . Executive agrees that, taking into account Executive’s other business activities as described herein, he shall devote reasonably sufficient working time to the Company’s affairs in order to properly carry out Executive’s duties. Executive has disclosed, and the Company understands and acknowledges, that Executive is a member of the Advisory Board of Flextronics International, Ltd., is currently in discussions with two other companies to serve on their boards of directors and/or as a consultant, and that Executive may pursue other similar activities in the future, all of which may collectively require material portions of Executive’s business time and attention, but none of which are competitive with the Business (as defined herein) of the Company. In addition to the business activities described in the preceding sentence, during the Employment Period, Executive may serve as a member of any board of directors, or as a trustee of, or in any manner be affiliated with, any present or future for-profit business venture (“ Outside Business Relationship ”), and may provide services to civic, religious, and not for profit organizations, without the consent of the Board; provided, however, that: (i) Executive first provides written notice to the Board of Executive’s intention to engage in an Outside Business Relationship; and (ii) such Outside Business Relationship is not competitive with the Business (as defined herein) of the Company. Executive represents to the Company that Executive (x) is not , to Executive’s knowledge, violating and will not violate any contractual, legal, or fiduciary obligations or burdens to which Executive is subject as of the Effective Date by entering into this Agreement or providing services under the Agreement’s terms; (y) is , to Executive’s knowledge, under no contractual, legal, or fiduciary obligation or burden that will interfere with his ability to perform services under the Agreement’s terms; and (z) has no bankruptcies, convictions, disputes with regulatory agencies, or other discloseable or disqualifying events that would have any material impact on the Company or its ability to conduct securities offerings.

5. Compensation for Services . As compensation for the services Executive will perform under this Agreement during the Employment Period, the Company will pay Executive, and Executive shall accept as full compensation, the following:

(a) Base Salary . Executive shall receive a bi-weekly salary of thirteen thousand four hundred sixty-one dollars and fifty-four cents (U.S. $13,461.54) (annualized, three hundred fifty thousand dollars (U.S. $350,000.00)), less required withholdings (the “ Base Salary ”), payable in equal installments bi-weekly pursuant to the Company’s normal payroll practices. The Base Salary may be increased in the discretion of the Board, but not decreased without the prior written consent of Executive. If increased, the increased amount shall constitute Base Salary for purposes of this Agreement. Executive’s compensation shall be subject to all appropriate federal and state withholding taxes.

(b) Bonus Plans . In each calendar year of the Employment Period, commencing with the 2013 calendar year, Executive shall be eligible to receive annual cash bonuses of up to one hundred percent (100%) of his Base Salary. Within sixty (60) days of the Effective Date, and within sixty (60) days of the conclusion of each calendar year of the Employment Period thereafter, the Compensation Committee of the Board, after consultation with Executive, shall establish reasonable written objective performance goals for Executive (the “ Annual Objectives ”). Executive shall be entitled to an annual cash bonus equal to one hundred percent (100%) of his Base Salary (the “ Target Bonus ”) upon achievement of all Annual Objectives. In the event Executive does not achieve all Annual Objectives, the amount of such annual bonus shall be in the sole discretion of the Compensation Committee of the Board and consistent with the terms of any written bonus or incentive plan then in effect. The Company shall pay any annual bonus on or before March 15 th of the calendar year following the calendar year to which the bonus relates. Except as otherwise set forth in this Agreement, Executive shall not be entitled to an annual bonus unless he is employed by the Company as of December 31 st of the year to which the bonus relates.

(c) Equity Award . During the Employment Period, Executive shall receive the following equity awards pursuant to the Alliqua, Inc. 2011 Long-Term Incentive Plan and any amendments thereto (the “ 2011 Plan ”) or, if there are not sufficient shares available under the 2011 Plan, pursuant to a stand-alone award agreement:

(i) An award of nonqualified stock options on the Effective Date with respect to the number of shares of the Company’s common stock equal to 3% of the Company’s total outstanding shares of common stock (determined on a fully-diluted basis as of the Effective Date), subject to the terms and conditions of a nonqualified stock option award agreement consistent with this Agreement and, if granted pursuant to the 2011 Plan, the 2011 Plan, which terms shall include: (A) an exercise price equal to the fair market value of a share of common stock at the close of the market on the Effective Date, (B) immediate vesting and exercisability of 100% of such options on the Effective Date, and (C) a term of ten (10) years (subject to early termination of forfeiture in accordance with the terms of the nonqualified stock option award agreement).

(ii) An award of nonqualified stock options on the last business day of each calendar quarter during the period commencing on the Effective Date and ending on the third anniversary of the Effective Date, with the number of shares subject to each such grant equal to 0.333% of the Company’s outstanding shares of common stock as of the date of grant (determined on a fully-diluted basis) (each a “ Quarterly Grant ”). Each Quarterly Grant shall be subject to the terms and conditions of a nonqualified stock option agreement consistent with this Agreement and, if granted pursuant to the 2011 Plan, the 2011 Plan, which terms shall include: (A) an exercise price equal to the fair market value of a share of common stock at the close of the market on the date of grant, (B) the first eight (8) grants will be 100% vested and exercisable on the first anniversary of their respective dates of grant, and the last four (4) grants will be 100% vested and exercisable immediately on their respective dates of grant, (C) immediate vesting of 100% of the then unvested optioned shares upon the effective date of a “Change in Control” (as defined in the 2011 Plan) with respect to such grant), and (D) a term of ten (10) years (subject to early termination of forfeiture in accordance with the terms of the nonqualified stock option award agreement).

(iii) Subject to the discretion of the Board, Executive will be eligible to receive additional equity compensation pursuant to the 2011 Plan (or pursuant to stand-alone award agreements).

(d) Vacation . During the Employment Period, Executive shall be entitled to five weeks of paid vacation. Vacation shall be taken at such times and intervals as shall be determined by Executive, subject to the reasonable business needs of the Company.

(e) Reimbursement of Ordinary Business Expenses . The Company shall reimburse Executive for all reasonable business expenses upon the presentation of itemized statements of such expenses in accordance with Company policies and procedures as may be in effect from time to time.

(f) Automobile Allowance . During the Employment Period, Executive shall be entitled to an automobile allowance in an amount equal to $750.00 per month.

(g) Life Insurance . During the Employment Period, the Company will reimburse Executive, up to the maximum amount of $200.00 per month, for the cost of a term life insurance policy having a face amount of $1,000,000. Executive shall be the owner of such policy and shall be entitled to name the beneficiary(ies) thereof.

(h) Other Benefits and Perquisites . Executive shall be entitled to participate in the benefit plans provided by the Company for all employees generally, and for the Company’s executive employees, including the availability of health and dental insurance benefits. The Company shall be entitled to modify, amend or terminate these benefit plans in its sole discretion at any time, provided such modification, amendment or termination is applicable to all employees generally. Any reimbursement of expenses made under this Agreement shall only be made for eligible expenses incurred during the Employment Period, and no reimbursement of any expense shall be made by the Company after December 31st of the year following the calendar year in which the expense was incurred. The amount eligible for reimbursement under this Agreement during a taxable year may not affect expenses eligible for reimbursement in any other taxable year, and the right to reimbursement under this Agreement is not subject to liquidation or exchange for another benefit. Executive will comply with the Company’s policies regarding these benefits, including all Internal Revenue Service rules and requirements.

6. Confidential Information .

(a) Confidential Information . The Company shall provide Executive with confidential information and trade secrets of the Company (hereinafter referred to as “ Confidential Information ”), shall place Executive in a position to develop and have ongoing access to Confidential Information of the Company, shall entrust Executive with business opportunities of the Company, and shall place Executive in a position to develop business goodwill on behalf of the Company. For purposes of this Agreement, Confidential Information includes, but is not limited to:

(i) Technologies developed by the Company and any research data or other documentation related to the development of such technologies, including, without limitation, all designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, developed or acquired by Executive, individually or in conjunction with others, during the period of Executive’s employment by the Company;

(ii) All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, logs, drawings, models and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression that are conceived, developed or acquired by Executive individually or in conjunction with others during the Employment Period (whether during business hours or otherwise and whether on any Company premises or otherwise) that relate to the Company’s Business (defined below), trade secrets, products or services;

(iii) Customer lists and prospect lists developed by the Company;

(iv) Information regarding the Company’s customers which Executive acquired as a result of his employment with the Company, including but not limited to, customer contracts, work performed for customers, customer contacts, customer requirements and needs, data used by the Company to formulate customer bids, customer financial information, and other information regarding the customer’s business;

(v) Information related to the Company’s Business (defined below), including but not limited to marketing strategies and plans, sales procedures, operating policies and procedures, pricing and pricing strategies, business plans, sales, profits, and other business and financial information of the Company;

(vi) Training materials developed by and utilized by the Company; and

(vii) Any other information that Executive acquired as a result of his employment with the Company and which the Company would not want disclosed to a business competitor or to the general public.

Executive understands and acknowledges that such Confidential Information gives the Company a competitive advantage over others who do not have the information, and that the Company would be irreparably harmed if the Confidential Information were disclosed.

For purposes of this Agreement, Confidential Information shall not include information that: (i) prior to disclosure, is or was known or generally available to the public; (ii) after disclosure, become known to the public through no act or omission of Executive or any other person or entity with an obligation of confidentiality to the Company; (iii) is or was independently developed by Executive without the use of or reference to Confidential Information of the Company, and can be demonstrated by Executive through reasonable evidence was developed by Executive in this manner; or (iv) is required to be disclosed pursuant to an applicable law, rule, regulation, government requirement or court order, or the rules of any stock exchange (provided however, Executive shall advise the Company of such required disclosure promptly upon learning thereof in order to afford the Company a reasonable opportunity to contest, limit and/or assist Executive in crafting such disclosure and shall cooperate with the Company concerning any such attempt to contest, limit or craft the disclosure).

(b) Disclosure of Confidential Information . Executive agrees that he shall hold all Confidential Information of the Company in trust for the Company and shall not during or after his employment terminates for any reason: (i) use the information for any purpose other than the benefit of the Company; or (ii) disclose to any person or entity any Confidential Information of the Company except as necessary during Executive’s employment with the Company to perform services on behalf of the Company. Executive shall also take reasonable steps to safeguard such Confidential Information in Executive’s possession or control to prevent its disclosure to unauthorized persons.

(c) Return of Information . Upon termination of employment, or at any earlier time as directed by the Company, Executive shall immediately deliver to the Company any and all Confidential Information in Executive’s possession, any other documents or information that Executive acquired as a result of his employment with the Company and any copies of any such documents/information. Executive shall not retain any originals or copies of any documents or materials related to the Company’s Business – whether in hard copy or digital form – which Executive came into possession of or created as a result of his employment with the Company. Executive acknowledges that such information, documents and materials are the exclusive property of the Company. After Executive delivers to the Company all Confidential Information in Executive’s possession and all other documents and/or information relating to the Company’s Business, Executive shall immediately delete all Company Confidential Information and other documents and/or information relating to the Company’s Business from any computer, cellular phone or other digital or electronic device owned by Executive. In addition, upon termination of employment, or at any time earlier as directed by the Company, Executive shall immediately deliver to the Company any property of the Company in Executive’s possession.

7. Restrictive Covenants . In consideration for (i) the Company’s promise to provide Confidential Information to Executive and Executive’s return promise to hold the Company’s Confidential Information in trust, (ii) the substantial economic investment made by the Company in the Confidential Information and goodwill of the Company, and the business opportunities disclosed or entrusted to Executive, (iii) the compensation and other benefits provided by the Company to Executive, and (iv) the Company’s employment of Executive pursuant to this Agreement, and to protect the Company’s Confidential Information, customer relationships, and goodwill, Executive agrees to enter into the following restrictive covenants.

(a) Non-Solicitation . Executive agrees that, during the Employment Period and thereafter during the Restricted Period (defined below), other than in connection with his authorized duties under this Agreement, Executive shall not, directly or indirectly, either as a principal, manager, agent, employee, consultant, officer, director, stockholder, partner, investor, owner, or lender or in any other capacity, and whether personally or through other persons or entities:

(i) Solicit business from, interfere with, attempt to solicit business with, or do business with any customer or client of the Company with whom the Company did business or who the Company solicited within the preceding eighteen (18) months and: (1) who or which Executive contacted, called on, serviced or did business with during Executive’s employment at the Company; (2) who or which Executive learned of solely as a result of Executive’s employment with the Company; or (3) about whom Executive received Confidential Information. This restriction in this Section 7(a)(i) only prohibits soliciting, attempting to solicit or transacting business with any person or entity, other than the Company, engaged in the Business (as defined below) of the Company or any Affiliate (as defined below); or

(ii) Solicit, induce or attempt to solicit or induce, engage or hire, on behalf of himself or any other person or entity, any person who is an employee or consultant of the Company or who was employed by the Company within the preceding twelve (12) months (general advertisements and similar solicitations not directed at any specific individuals shall not be considered solicitation for this purpose).

Notwithstanding the foregoing, the restrictions contained in this Section shall not apply to any individual who is a family member of Executive.

(b) Non-Disparagement . Executive agrees that the Company’s goodwill and reputation are assets of great value to the Company and its affiliates which were obtained through great costs, time and effort. Therefore, Executive agrees that during his employment and after the termination of his employment, Executive shall not in any way, directly or indirectly, disparage, libel or defame the Company or any Affiliate, their respective business or business practices, products or services, or employees. The Company agrees that Executive’s goodwill and reputation are assets of great value to Executive which were obtained through great costs, time and effort. Therefore, the Company agrees that during Executive’s employment and after the termination of his employment, members of the Company’s Board and any Affiliate’s Board, as well as the Company’s and any Affiliate’s executive officers shall not in any way, directly or indirectly, disparage, libel or defame Executive or Executive’s business practices or services. Provided, however, that the obligation to refrain from making disparaging, libelous, or defamatory statements imposed upon the persons identified in this Section 7(b) (“ Negative Statements ”) shall apply only to Negative Statements made to third parties who are not obligated to refrain from making Negative Statements. Provided further, that nothing contained in this Section 7(b) shall be construed to prohibit the making of Negative Statements: (i) to the extent necessary to comply with any law, court order, or subpoena; (ii) in connection with any discovery request in a legal action to which a response is required by law; or (iii) to the extent necessary to enforce a party’s rights hereunder.

For purposes of this Agreement:

“ Restricted Period ” means a period of fifteen (15) months immediately following the date of Executive’s termination from employment for any reason.

“ Business ” means a person or entity whos e business is th e development , manufacture an d/or marketing of biomedical products, utilizing a t ransdermal delivery system for the delivery of active pharmaceutical ingredients or biomedical products for the treatme nt of a dvanced wound care ; or any other business the Company engages in during Executive’s employment and in which Executive participated or of which Executive had knowledge of Confidential Information.

“ Affiliate ” means, any entity which directly or indirectly controls, is controlled by, or is under common control with the Company for so long as such control exists, where “control” means the decision-making authority as to such entity and, further, where such control shall be presumed to exist where an entity owns more than fifty percent (50%) of the equity having the power to vote on or direct the affairs of the other entity.

(c) Tolling . If Executive violates any of the restrictions contained in this Section 7 (other than subsection (b) of this Section 7), the Restricted Period shall be suspended and will not run in favor of Executive from the time of the commencement of any violation until the time when Executive cures the violation.

(d) Remedies . Executive acknowledges that the restrictions contained in Sections 6 and 7 of this Agreement, in view of the nature of the Company’s business and his position with the Company, are reasonable and necessary to protect the Company’s legitimate business interests, Confidential Information and goodwill and that any violation of Sections 6 and 7 of this Agreement may result in irreparable injury to the Company. In the event of a breach or threatened breach by Executive of Sections 6 or 7 of this Agreement, the Company may seek a temporary restraining order and injunctive relief restraining Executive from the commission of any breach. Nothing contained in this Agreement shall be construed as prohibiting the Company from pursuing any other remedies available to it for any breach or threatened breach, including, without limitation, the recovery of money damages. The existence of any claim or cause of action by Executive against the Company not predicated on this Agreement shall not constitute a defense to the enforcement by the Company of Section 6 or 7 of this Agreement. If Executive, in the future, seeks or is offered employment, or any other position or capacity with another person or entity, Executive agrees to inform each such person or entity of the restrictions in Sections 6 and 7 of this Agreement. The Company shall be entitled to advise such person or entity of the provisions of Section 6 and 7 and to otherwise deal with such person or entity to ensure that the provisions of Sections 6 and 7 are enforced.

(e) Reformation . The courts shall be entitled to modify the duration and scope of any restriction contained herein to the extent such restriction would otherwise be unenforceable, and such restriction as modified shall be enforceable. Executive acknowledges that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect the Company’s investment in its Confidential Information, businesses, customer relationships and the goodwill thereof. Executive acknowledges that the scope and duration of the restrictions contained herein are necessary and reasonable in light of the time that Executive has been engaged in the business of the Company, Executive’s reputation in the markets for the Company’s business and Executive’s relationship with the suppliers, customers and clients of the Company obtained through Executive’s employment with the Company.

8. Termination of Agreement . The employment relationship between Executive and the Company created under this Agreement shall terminate before the expiration of the stated term of this Agreement upon the occurrence of any one of the following events:

(a) Death or Permanent Disability . This Agreement, and Executive’s employment, shall be terminated effective on the death or permanent disability of Executive. For this purpose, “permanent disability” shall mean that Executive (i) has, by reason of any medically determinable physical or mental impairment that can reasonably be expected, based on a determination of Executive’s treating physician, to last for a continuous period of not less than twelve (12) months, (ii) been receiving income replacement benefits for a period of not less than three (3) months under an accident and health or long-term disability benefits plan covering employees of the Company, or (iii) is determined to be totally disabled by the U.S. Social Security Administration.

(b) Termination by the Company for Cause . The Company may terminate Executive’s employment hereunder for Cause at any time after providing written notice to Executive. For purposes of this Agreement, the term “ Cause ” shall mean any of the following:

(i) an act or acts of theft, embezzlement, or fraud by Executive;

( ii) an act or acts of intentional dishonesty or willful misrepresentation of a material nature that is reasonably likely to cause material damage to the Company or the Company’s reputation;

(iii) a material breach b y Executive of any fiduciary duties owed by him to the Company;

(iv) Executive’s conviction of, or pleading nolo contendere or guilty to, a felony or misdemeanor (other than a traffic infraction) that is reasonably likely to cause material damage to the Company or the Company’s reputation;

(v) a material violation of the Company’s written policies, standards or guidelines, which Executive failed to cure within thirty (30) days after receiving written notice from the Board specifying the details of the alleged violation;

(vi) Executive’s refusal to perform the material duties and responsibilities required to be performed by Executive under the terms of this Agreement, which Executive failed to cure within thirty (30) days after receiving written notice from the Board specifying the details of the alleged refusal; and

(vii) a material breach by Executive of this Agreement or any other agreement to which Executive and the Company are parties that is not cured by Executive within thirty (30) days after receiving written notice from the Board specifying the details of the alleged material breach.

(c) Termination by the Company Without Cause . Subject to the Company’s obligations pursuant to Section 9(c) of this Agreement, the Company may terminate this Agreement and Executive’s employment at any time upon thirty (30) days written notice to Executive without Cause, during which period Executive shall not be required to perform any services for the Company other than to assist the Company in training his successor and generally preparing for an orderly transition.

(d) Termination by Executive . Executive may terminate this Agreement and his employment without Good Reason at any time upon thirty (30) days written notice to the Company. Executive may also terminate his employment for Good Reason. For purposes of this Agreement, the term “ Good Reason ” shall mean the occurrence of any of the following without Executive’s prior written consent:

(i) a material reduction in Executive’s Base Salary;

(ii) a material diminution in Executive’s title, duties, responsibility or authority;

(iii) the relocation of Executive’s primary office to an office located more than thirty-five (35) miles from the Primary Office;

(iv) a material breach by the Company of this Agreement or any other agreement to which Executive and the Company are parties; or

(v) failure by the Company to secure in writing the agreement of any successor entity to the Company to assume the Agreement, including a successor to all or substantially all of the assets of the Company.

Any event described in (i) through (v) shall not constitute Good Reason unless Executive delivers to the Company a written notice of termination for Good Reason within ninety (90) days after Executive first learns of the existence of the circumstances giving rise to Good Reason, and within thirty (30) days following delivery of such notice, the Company has failed to cure the circumstances giving rise to Good Reason.

(e) Separation from Service . For purposes of this Agreement, including, without limitation, Sections 8 and 9, any references to a termination of Executive’s employment shall mean a “separation from service” as defined by Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and the Treasury Regulations and other guidance issued thereunder.

(f) Notice of Termination . Any termination of Executive’s employment hereunder (other than as a result of the death of Executive or as a result of the expiration of the Employment Term or any Renewal Term if either party has given a Non-Renewal Notice to the other), whether by the Company or by Executive, shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “ Notice of Termination ” shall mean a written notice that shall indicate (i) the specific termination provision in this Agreement relied upon; (ii) the basis for the termination; and (iii) the date of termination.

9. Compensation Upon Termination for Any Reason . Upon the termination of Executive’s employment under this Agreement before the expiration of the stated term in this Agreement, Executive shall be entitled to the following:

(a) Termination by the Company for Cause or as a Result of the Resignation of Executive Without Good Reason . In the event that Executive’s employment is terminated either by the Company for Cause, or as a result of Executive’s resignation without Good Reason, the Company shall , in addition to any benefits provided under any employee benefit plan or program of the Company, pay the following amounts to Executive (or his estate or other legal representative, as the case may be) within the time period required by applicable law (and in all events within thirty (30) days of such termination):

(i) any accrued but unpaid Base Salary (as determined pursuant to Section 5(a) hereof) for services rendered to the date of termination;

(ii) any accrued but unpaid expenses required to be reimbursed pursuant to Section 5(e) hereof; and

(iii) any earned, but unpaid, bonus under Section 5(b) for services rendered during the year preceding the date of termination.

The amounts described in Sections 9(a)(i)-(iii) above, together with benefits provided under any employee benefit plan or program of the Company, shall be referred to herein as the “ Accrued Obligations .”

(b) Termination by Reason of Death or Disability of Executive . In the event that Executive’s employment is terminated by reason of Executive’s death or Disability, the Company shall pay the following amounts to Executive (or his estate or other legal representative, as the case may be) within the time period required by applicable law (and in all events within thirty (30) days of such termination):

(i) the Accrued Obligations; and

(ii) notwithstanding anything to the contrary in this Agreement with respect to the requirement of being employed as of December 31 st , a pro-rata portion (based on a fraction, the numerator of which is the number of days in the calendar year on which Executive performed services prior to termination and the denominator of which is the number of days in such calendar year) of Executive’s annual bonus that he would have earned had he been employed as of December 31 st of the year in which his employment ends, but calculated at the Target Bonus level (the “ Pro-Rata Target Bonus ”).

(c) Termination by the Company Without Cause , or by Executive for Good Reason During the First Two Years of the Initial Employment Term . In the event that Executive’s employment is terminated at any time during the first two (2) years of the Initial Employment Term and such termination is initiated by the Company without Cause or by Executive for Good Reason , the Company shall pay and/or provide the following to Executive:

(i) the Accrued Obligations within the time period required by applicable law (and in all events within thirty (30) days of such termination);

(ii) the Pro-Rata Target Bonus within thirty (30) days of such termination; and

(iii) subject to compliance with the restrictive covenants in Sections 6 and 7 and the execution and timely return by Executive of a release of claims in substantially the form of Exhibit A hereto (the “ Release ”) which the Company shall deliver to Executive within five (5) business days following the termination of Executive’s employment, and subject to the provisions of Section 11 below:

(1) The Company shall pay Executive an amount equal to two (2) years Base Salary , p ayable in twenty-four (24) equal monthly installments (the “ Severance Period ”). The first installment shall commence on the sixtieth (60 th ) day following the termination of Executive’s employment but shall include all installment amounts that would have been paid during the first sixty (60) days following the termination of Executive’s employment had installments commenced immediately following the date of termination;

(2) T he Company shall provide Executive and his dependents with continued healthcare coverage under the Company’s group health and dental plans at the same cost, if any, imposed on active employees of the Company, until the earlier of (x) the expiration of the Severance Period; (y) the date that Executive’s “COBRA” coverage terminates or expires; or (z) the date that Executive obtains new employment that offers substantially similar health and dental coverage. Such continuing health and dental coverage provided by the Company shall be provided pursuant to COBRA. To the extent any such benefits are otherwise taxable to Executive, such benefits shall, for purposes of Section 409A of the Code, be provided as separate in-kind payments of those benefits, and the provision of in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in any other calendar year; and

(3) notwithstanding anything to the contrary contained in the 2011 Plan or in any successor plan, award agreement, or similar equity incentive scheme, any stock options and other equity-based awards granted to Executive that have not vested as of the date of termination shall immediately become 100% vested and all restrictions shall lapse. All stock options vested prior to the date of termination or which vest as a result of this Section 9(c)(iii)(3) shall remain exercisable f or three (3) months following the expiration of the Initial Employment Term (unless the originally prescribed term of any such vested stock options expires sooner), as if Executive remained actively employed by the Company during such period.

In the event Executive fails to comply with the restrictive covenants in Section 7 or does not timely execute and return (or otherwise revokes) a release of claims in the form and substance reasonably requested by the Company, no amount shall be payable to Executive pursuant to this Section 9(c)(iii).

(d) Termination by the Company Without Cause , or by Executive for Good Reason After the First Two Years of the Initial Employment Term . In the event that Executive’s employment is terminated at any time after the first two (2) years of the Initial Employment Term and such termination is initiated by the Company without Cause or by Executive for Good Reason, the Company shall pay and/or provide the following to Executive:

(i) the Accrued Obligations within the time period required by applicable law (and in all events within thirty (30) days of such termination); and

(ii) subject to compliance with the restrictive covenants in Sections 6 and 7 and the execution and timely return by Executive of the Release which the Company shall deliver to Executive within five (5) business days following the termination of Executive’s employment, and subject to the provisions of Section 11 below:

(1) The Company shall pay Executive an amount equal to the sum of (x) two (2) years Base Salary and (y) two (2) years of Executive’s annual bonus calculated at the Target Bonus level , p ayable in twenty-four (24) equal monthly installments (the “ Severance Period ”). The first installment shall commence on the sixtieth (60 th ) day following the termination of Executive’s employment but shall include all installment amounts that would have been paid during the first sixty (60) days following the termination of Executive’s employment had installments commenced immediately following the date of termination;

(3) notwithstanding anything to the contrary contained in the 2011 Plan or in any successor plan, award agreement, or similar equity incentive scheme, any stock options and other equity-based awards granted to Executive that have not vested as of the date of termination shall immediately become 100% vested and all restrictions shall lapse. All stock options vested prior to the date of termination or which vest as a result of this Section 9(d)(ii)(3) shall remain exercisable f or three (3) months following the expiration of the Initial Employment Term or any Renewal Term, as the case may be (unless the originally prescribed term of any such vested stock options expires sooner), in each case as if Executive remained actively employed by the Company during such period.

10. Other Provisions .

(a) Remedies; Legal Fees . Each of the parties to this Agreement shall be entitled to enforce its rights under this Agreement, specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The prevailing part y shall be entitled to attorney’s fees.

(b) Limitations on Assignment . In entering into this Agreement, the Company is relying on the unique personal services of Executive; services from another person will not be an acceptable substitute. Except as provided in this Agreement, Executive may not assign this Agreement or any of the rights or obligations set forth in this Agreement without the explicit written consent of the Company. Any attempted assignment by Executive in violation of this Section 10(b) shall be void. Except as provided in this Agreement, nothing in this Agreement entitles any person other than the parties to the Agreement to any claim, cause of action, remedy, or right of any kind, including, without limitation, the right of continued employment. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company without Executive’s prior written consent, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. The Company further agrees that, in the event of any disposition of its business and assets described in the preceding sentence, it shall cause such assignee or transferee expressly to assume the liabilities, obligations and duties of the Company hereunder.

(c) No Mitigation or Offset . In the event of termination of Executive’s employment for any reason, Executive shall be under no obligation to seek other employment and there shall be no offset against amounts due to h im on account of any remuneration or benefits from any subsequ ent employment that he may obtain.

(d) Severability and Reformation . The parties intend all provisions of this Agreement to be enforced to the fullest extent permitted by law. If, however, any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future law, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part hereof, and the remaining provisions shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance. In lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the Company and Executive hereby request the court to whom disputes relating to this Agreement are submitted to reform the otherwise unenforceable covenant in accordance with this Section 10(d ).

(e) Notices . Any notice or other communication required, permitted or desired to be given under this Agreement shall be deemed delivered when personally delivered; the business day, if delivered by overnight courier; the same day, if transmitted by facsimile on a business day before noon, Eastern Time; the next business day, if otherwise transmitted by facsimile; and the third business day after mailing, if mailed by prepaid certified mail, return receipt requested, as addressed or transmitted as follows (as applicable):

If to Executive:

The address of Executive’s principal residence kept in the Company’s records, with a copy to him (during the Employment Period) at his office.

If to the Company:

Alliqua, Inc.

850 Third Avenue, Suite 1801

New York, NY 10022

Facsimile: (646) 218-1401

(f ) Further Acts . Whether or not specifically required under the terms of this Agreement, each party shall execute and deliver such documents and take such further actions as shall be necessary in order for such party to perform all of his or its obligations specified in the Agreement or reasonably implied from the Agreement’s terms.

( g ) Publicity and Advertising . Executive agrees that the Company may use his name, picture, or likeness for any advertising, publicity or other business purpose at any time, during the term of this Agreement and may continue to use materials generated during the term of this Agreement for a period of six (6) months thereafter. The use of Executive’s name, picture, or likeness shall not be deemed to result in any invasion of Executive’s privacy or in violation of any property right Executive may have; and Executive shall receive no additional consideration if his name, picture or likeness is so used. Executive further agrees that any negatives, prints or other material for printing or reproduction purposes prepared in connection with the use of his name, picture or likeness by the Company shall be and are the sole property of the Company.

( h ) GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS (RULES) THEREOF.

( i ) Venue . The exclusive venue for all suits or proceedings arising from or related to this Agreement shall be in a court of competent jurisdiction in New York, New York.

( j ) Waiver . A party’s waiver of any breach or violation of any Agreement provisions shall not operate as, or be construed to be, a waiver of any later breach of the same or other Agreement provision.

( k ) Entire Agreement , Amendment, Binding Effect . This Agreement constitutes the entire agreement between the parties concerning the subject matter in this Agreement. No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized, unless incorporated in this Agreement by written amendment, such amendment to become effective on the date stipulated in it. Executive acknowledges and represents that in executing this Agreement, he did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. Any amendment to this Agreement must be signed by all parties to this Agreement. This Agreement will be binding on and inure to the benefit of the parties hereto and their respective successors, heirs, legal representatives, and permitted assigns (if any). This Agreement supersedes any prior agreements between Executive and the Company concerning the subject matter of this Agreement.

( l ) Counterparts . This Agreement may be executed in counterparts, with the same effect as if both parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

( m ) Indemnification . The Company agrees to maintain a directors’ and officers’ liability insurance policy covering Executive in an amount, and on terms and conditions (including without limitation, with respect to scope, exclusions, sub-amounts and deductibles), no less favorable to him than the coverage the Company provides other senior executives and directors from time to time. In addition, the Company and Executive shall execute an Indemnification Agreement in the form attached and incorporated as Exhibit B. Executive’s right to indemnification pursuant to such directors’ and officers’ liability insurance and pursuant to the Indemnification Agreement shall be in addition to, and not in lieu of, Executive’s right to indemnification pursuant to applicable statutes and the Company’s Bylaws and Certificate of Incorporation or other similar governing document.

(n) Attorney’s Fees . The Company agrees to pay or reimburse Executive for reasonable attorney’s fees incurred by Executive in connection with the review of this Agreement, up to a maximum of $10,000. Such payment will be made promptly following execution of this Agreement.

11. Section 409A of the Code .

(a) To the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code; (ii) Executive is deemed at the time of his separation from service to be a “specified employee” under Section 409A of the Code; and (iii) at the time of Executive’s separation from service the Company is publicly traded (as defined in Section 409A of Code), then such payments (other than any payments permitted by Section 409A of the Code to be paid within six (6) months of Executive’s separation from service) shall not be made until the earlier of (x) the first day of the seventh month following Executive’s separation from service or (y) the date of Executive’s death following such separation from service. Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 11 shall be paid to Executive or Executive’s beneficiary in one lump sum , plus interest thereon at the Delayed Payment Interest Rate (as defined below) computed from the date on which each such delayed payment otherwise would have been made to Executive until the date of payment . For purposes of the foregoing, the “ Delayed Payment Interest Rate ” shall mean the national average annual rate of interest payable on jumbo six-month bank certificates of deposit, as quoted in the business section of the most recently published Sunday edition of The New York Times preceding Executive’s separation from service.

( b) In the case of any amounts payable to Executive under this Agreement, or under any plan of the Company, that may be treated as payable in the form of “a series of installment payments”, as defined in Treas. Reg. §1.409A-2(b)(2)(iii), Executive’s right to receive such payments shall be treated as a right to receive a series of separate payments for purposes of Treas. Reg. §1.409A-2(b)(2)(iii).

(c) It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Treasury Regulations and guidance of general applicability issued thereunder so as to not subject Executive to the payment of additional interest and taxes under Section 409A of the Code, and in furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions.

12. Section 4999 Excise Taxes .

(a) Certain Reductions in Agreement Payments . Notwithstanding anything in this Agreement to the contrary, in the event a nationally recognized independent accounting firm designated by the Company and reasonably acceptable to Executive (the “ Accounting Firm ”) shall determine that receipt of all payments or distributions by the Company in the nature of compensation to or for Executive’s benefit, whether paid or payable pursuant to this Agreement or otherwise (a “ Payment ”), would subject Executive to the excise tax under Section 4999 of the Code, the Accounting Firm shall determine as required below in this Section 12(b) whether to reduce any of the Payments paid or payable pursuant to this Agreement (the “ Agreement Payments ”) to the Reduced Amount (as defined below). The Agreement Payments shall be reduced to the Reduced Amount only if the Accounting Firm determines that Executive would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if Executive’s Agreement Payments were so reduced. If the Accounting Firm determines that Executive would not have a greater Net After-Tax Receipt of aggregate Payments if Executive’s Agreement Payments were so reduced, then Executive shall receive all Agreement Payments to which Executive is entitled.

(b) Accounting Firm Determinations . If the Accounting Firm determines that aggregate Agreement Payments should be reduced to the Reduced Amount, the Company shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm under this Section 12(b) shall be binding upon the Company and Executive (absent manifest error) and shall be made as soon as reasonably practicable and in no event later than fifteen (15) days following the date of Executive’s termination of employment. For purposes of reducing the Agreement Payments to the Reduced Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced. The reduction of the amounts payable hereunder, if applicable, shall be made by first reducing or eliminating those payments or benefits which are payable in cash and then by reducing or eliminating payments which are not payable in cash, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the date of Executive’s termination of employment. For this purpose, where multiple payments or benefits are to be paid at the same time, they shall be reduced or eliminated on a pro-rata basis.

(c) Overpayments; Underpayments . As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement which should not have been so paid or distributed (an “ Overpayment ”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement which should have been so paid or distributed (an “ Underpayment ”), in each case consistent with the calculation of the Reduced Amount hereunder. In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or Executive which the Accounting Firm believes has a high probability of success determines that an Overpayment has been made, Executive shall pay any such Overpayment to the Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided , however , that no amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be paid promptly (and in no event later than sixty (60) days following the date on which the Underpayment is determined) by the Company to or for the benefit of Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

(d) Definitions . The following terms shall have the following meanings for purposes of this Section 12:

(i) “ Reduced Amount ” shall mean the greatest amount of Agreement Payments that can be paid that would not result in the imposition of the excise tax under Section 4999 of the Code.

(ii) “ Net After-Tax Receipt ” shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on Executive with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws, determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws which applied to Executive’s taxable income for the immediately preceding taxable year, or such other rate(s) as the Accounting Firm determined to be likely to apply to Executive in the relevant taxable year(s).

(e) Fees and Expenses . All fees and expenses of the Accounting Firm shall be paid solely by the Company.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first indicated above.

	THE COMPANY : ALLIQUA, INC.

	By:
		Jerome B. Zeldis MD, PhD
		Chairman of the Board

	EXECUTIVE :


	David Johnson

EXHIBIT 10.2

FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this “ Amendment ”) is made and entered as of this 4 th day of February, 2013, by and between Alliqua, Inc., a Florida corporation (the “ Company ”), and James Sapirstein (“ Executive ”) for purposes of amending that certain Executive Employment Agreement dated as of September 28, 2012, by and between the Company and Executive (the “ Agreement ”). Terms used in this Amendment with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

WHEREAS , Section 10(k) of the Agreement provides that the parties to the Agreement may amend the Agreement in a writing signed by the parties; and

WHEREAS , the Company desires to amend the Agreement to change Executive’s position from Chief Executive Officer to CEO, Alliqua BioMedical Division, and to modify his responsibilities as appropriate to reflect the change in his position; and

WHEREAS , in connection with Executive’s change in position and responsibilities, he will be resigning as a member of the Company’s Board of Directors and the parties desire to amend the Agreement to reflect such resignation; and

WHEREAS , the parties further desire to evidence Executive’s consent to his change in position and responsibilities in writing.

NOW THEREFORE , pursuant to Section 10(k) of the Agreement, in consideration of the mutual promises, conditions, and covenants contained herein and in the Agreement, and other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties agree as follows:

1. Section 4(a) of the Agreement is hereby amended by deleting said section in its entirety and substituting in lieu thereof the following new Section 4(a):

(a) Position and Responsibilities . Subject to the Agreement’s terms, Executive agrees to serve the Company as CEO, Alliqua BioMedical Division, with said position reporting to the Chief Executive Officer (“ CEO ”) of the Company. Executive shall have the duties and responsibilities as shall be mutually agreed upon by Executive and the CEO, and shall perform all reasonable acts necessary and/or desirable to protect and advance the best interests of the Company, which duties, responsibilities and acts may include the development and marketing of therapeutic products based on the Company’s technology in consultation with the Company’s research consultants and/or clinical team. As of February 4, 2013, Executive shall resign as a member of the Board of Directors of the Company (the “ Board ”).

2. Section 4 of the Agreement is hereby amended by the addition of Section 4(d) as noted herein and shall be fully binding and enforceable as if originally set forth therein:

(d) Company’s Employment Representations.

(i) In connection with the negotiation of this Amendment, the Company shall pay Executive’s reasonable legal fees in conjunction with same to a maximum amount of $5,000.00.

(ii) In Executive’s capacity as CEO, Alliqua BioMedical Division, Executive, at the discretion of the CEO, may attend meetings of the Board as part of the Company’s Senior Leadership Team.

3. Section 5(b) of the Agreement is hereby amended by deleting said section in its entirety and substituting in lieu thereof the following new Section 5(b):

(b) Bonus Plans . For 2012, Executive shall receive $52,500 as a bonus, payable on or before March 15, 2013. For fiscal years during the Employment Period after 2012, Executive shall be eligible to receive periodic bonuses of up to sixty percent (60%) of his Base Salary upon achievement of target objectives and performance criteria, payable on or before March 15 th of the fiscal year following the fiscal year to which the bonus relates. Except to the extent provided by Section 9(c), Executive shall be entitled to a bonus for a year, subject to achievement of the performance criteria, if he is employed by the Company as of December 31 for the year to which services to which the bonus applies were performed. Targets and performance criteria shall be established by the CEO after consultation with Executive. The evaluation of Executive’s performance, as measured by the applicable targets and the awarding of bonuses, if any, shall be authorized at the Board’s sole discretion upon the CEO’s recommendation.

4. Except as expressly amended by this Amendment, the Agreement shall continue in full force and effect in accordance with the provisions thereof.

5. In the event of a conflict between the Agreement and this Amendment, the Amendment shall govern.

6. Executive hereby consents to the change in his title, duties, responsibility and authority reflected in this Amendment, and intends for his signature to this Amendment to serve as his written consent to the change as required by Section 8(d) of the Agreement.

* * * * * * * * * *

[ Remainder of Page Intentionally Left Blank Signature Page Follows .]

IN WITNESS WHEREOF , the parties have executed this Amendment as of the date first indicated above.

	THE COMPANY:

	ALLIQUA, INC.

	By:
Jerome B. Zeldis MD, PhD		Chairman of the Board

	EXECUTIVE:

		James Sapirstein

EXHIBIT 10.3

INDEMNIFICATION AGREEMENT

This Indemnification Agreement, dated as of February 4, 2013, is made by and between Alliqua, Inc., a Florida corporation (the “Corporation”) and David Johnson (the “Indemnitee”).

RECITALS

A. The Corporation recognizes that competent and experienced persons are increasingly reluctant to serve or to continue to serve as directors or officers of corporations unless they are protected by comprehensive liability insurance or indemnification, or both, due to increased exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such directors and officers;

B. The statutes and judicial decisions regarding the duties of directors and officers are often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors and officers with adequate, reliable knowledge of legal risks to which they are exposed or information regarding the proper course of action to take;

C. The Corporation and Indemnitee recognize that plaintiffs often seek damages in such large amounts and the costs of litigation may be so enormous (whether or not the case is meritorious), that the defense and/or settlement of such litigation is often beyond the personal resources of directors and officers;

D. The Corporation believes that it is unfair for its directors and officers to assume the risk of huge judgments and other expenses which may occur in cases in which the director or officer received no personal profit and in cases where the director or officer was not culpable;

E. The Corporation, after reasonable investigation, has determined that the liability insurance coverage presently available to the Corporation may be inadequate in certain circumstances to cover all possible exposure for which Indemnitee should be protected. The Corporation believes that the interests of the Corporation and its shareholders would best be served by a combination of such insurance and the indemnification by the Corporation of the directors and officers of the Corporation;

F. The Corporation’s Amended and Revised Bylaws (the “Bylaws”) require the Corporation to indemnify its directors and officers to the fullest extent permitted by law;

G. Section 607.0850 of the Florida Statutes, under which the Corporation is organized, empowers the Corporation to indemnify its officers, directors, employees and agents by agreement and to indemnify persons who serve, at the request of the Corporation, as the directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification provided by Section 607.0850 is not exclusive;

H. Section 607.0831 of the Florida Statutes states that a director is not personally liable for monetary damages to the corporation or any other person for any statement, vote, decision, or failure to act, regarding corporate management or policy, by a director;

I. The Board of Directors has determined that contractual indemnification as set forth herein is not only reasonable and prudent but also promotes the best interests of the Corporation and its shareholders;

J. The Corporation desires and has requested Indemnitee to serve or continue to serve as a director or officer of the Corporation free from undue concern for unwarranted claims for damages arising out of or related to such services to the Corporation; and

K. Indemnitee is willing to serve, continue to serve or to provide additional service for or on behalf of the Corporation on the condition that he is furnished the indemnity provided for herein.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1. Generally .

To the fullest extent permitted by the laws of the State of Florida:

(a) The Corporation shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that Indemnitee is or was or has agreed to serve at the request of the Corporation as a director, officer, employee or agent of the Corporation, or while serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity. For the avoidance of doubt, the foregoing indemnification obligation includes, without limitation, claims for monetary damages against Indemnitee to the fullest extent permitted under Section 607.0831 of the Florida Statutes as in existence on the date hereof.

(b) The indemnification provided by this Section 1 shall be from and against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such action, suit or proceeding and any appeal therefrom, but shall only be provided if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action, suit or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

(c) Notwithstanding the foregoing provisions of this Section 1, in the case of any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Corporation, or while serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the Florida courts or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Florida courts or such other court shall deem proper.

(d) The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that Indemnitee’s conduct was unlawful.

Section 2. Successful Defense; Partial Indemnification . To the extent that Indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 hereof or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred in connection therewith. For purposes of this Agreement and w ithout limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any action, suit, proceeding or investigation, or in defense of any claim, issue or matter therein, and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which Indemnitee is entitled.

Section 3. Determination That Indemnification Is Proper . Any indemnification hereunder shall (unless otherwise ordered by a court) be made by the Corporation unless a determination is made that indemnification of such person is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 1(b) hereof. Any such determination shall be made (i) by a majority vote of the directors who are not parties to the action, suit or proceeding in question (“disinterested directors”), even if less than a quorum, (ii) by a majority vote of a committee of disinterested directors designated by majority vote of disinterested directors, even if less than a quorum, (iii) by a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote on the matter, voting as a single class, which quorum shall consist of shareholders who are not at that time parties to the action, suit or proceeding in question, (iv) by independent legal counsel, or (v) by a court of competent jurisdiction.

Section 4. Advance Payment of Expenses; Notification and Defense of Claim .

(a) Expenses (including attorneys’ fees) incurred by Indemnitee in defending a threatened or pending civil, criminal, administrative or investigative action, suit or proceeding, or in connection with an enforcement action pursuant to Section 5(b), shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding within thirty (30) days after receipt by the Corporation of (i) a statement or statements from Indemnitee requesting such advance or advances from time to time, and (ii) an undertaking by or on behalf of Indemnitee to repay such amount or amounts, only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Corporation as authorized by this Agreement or otherwise. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment. Advances shall be unsecured and interest-free.

(b) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim thereof is to be made against the Corporation hereunder, notify the Corporation of the commencement thereof. The failure to promptly notify the Corporation of the commencement of the action, suit or proceeding, or Indemnitee’s request for indemnification, will not relieve the Corporation from any liability that it may have to Indemnitee hereunder, except to the extent the Corporation is prejudiced in its defense of such action, suit or proceeding as a result of such failure.

(c) In the event the Corporation shall be obligated to pay the expenses of Indemnitee with respect to an action, suit or proceeding, as provided in this Agreement, the Corporation, if appropriate, shall be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Corporation, the Corporation will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same action, suit or proceeding, provided that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in such action, suit or proceeding at Indemnitee’s expense and (2) if (i) the employment of counsel by Indemnitee has been previously authorized in writing by the Corporation, (ii) counsel to the Corporation or Indemnitee shall have reasonably concluded that there may be a conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any significant issue between the Corporation and Indemnitee in the conduct of any such defense or (iii) the Corporation shall not, in fact, have employed counsel to assume the defense of such action, suit or proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Corporation, except as otherwise expressly provided by this Agreement. The Corporation shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Corporation or Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.

(d) Notwithstanding any other provision of this Agreement to the contrary, to the extent that Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Corporation or any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee is or was serving or has agreed to serve at the request of the Corporation, a witness or otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party in the action, suit or proceeding, the Corporation shall indemnify Indemnitee against all expenses (including attorneys’ fees) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

Section 5. Procedure for Indemnification .

(a) To obtain indemnification, Indemnitee shall promptly submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Corporation shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b) The Corporation’s determination whether to grant Indemnitee’s indemnification request shall be made promptly, and in any event within 60 days following receipt of a request for indemnification pursuant to Section 5(a). The right to indemnification as granted by Section 1 of this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or fails to respond within such 60-day period. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 hereof where the required undertaking, if any, has been received by the Corporation) that Indemnitee has not met the standard of conduct set forth in Section 1 hereof, but the burden of proving such defense by clear and convincing evidence shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or one of its committees, its independent legal counsel, and its shareholders) to have made a determination prior to the commencement of such action that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct set forth in Section 1 hereof, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors or one of its committees, its independent legal counsel, and its shareholders) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has or has not met the applicable standard of conduct. The Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such proceeding or otherwise shall also be indemnified by the Corporation.

(c) The Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification pursuant to this Section 5, and the Corporation shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption. Such presumption shall be used as a basis for a determination of entitlement to indemnification unless the Corporation overcomes such presumption by clear and convincing evidence.

Section 6. Insurance and Subrogation .

(a) The Corporation may purchase and maintain insurance on behalf of Indemnitee who is or was or has agreed to serve at the request of the Corporation as a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against, and incurred by, Indemnitee or on Indemnitee’s behalf in any such capacity, or arising out of Indemnitee’s status as such, whether or not the Corporation would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement. If the Corporation has such insurance in effect at the time the Corporation receives from Indemnitee any notice of the commencement of a proceeding, the Corporation shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the policy. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.

(b) In the event of any payment by the Corporation under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Corporation shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

(c) The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.

Section 7. Certain Definitions . For purposes of this Agreement, the following definitions shall apply:

(a) The term “action, suit or proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative.

(b) The term “by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Corporation, or while serving as a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise” shall be broadly construed and shall include, without limitation, any actual or alleged act or omission to act.

(c) The term “expenses” shall be broadly and reasonably construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise compensated by the Corporation or any third party, provided that the rate of compensation and estimated time involved is approved by the Board, which approval shall not be unreasonably withheld), actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under this Agreement, Section 607.0850 of the Florida Statutes or otherwise.

(d) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and shall include, without limitation, all direct and indirect payments of any type or nature whatsoever (including, without limitation, all penalties and amounts required to be forfeited or reimbursed to the Corporation), as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan).

(e) The term “Corporation” shall include, without limitation and in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

(f) The term “other enterprises” shall include, without limitation, employee benefit plans.

(g) The term “serving at the request of the Corporation” shall include, without limitation, any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries.

(h) A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Agreement.

Section 8. Limitation on Indemnification . Notwithstanding any other provision herein to the contrary, the Corporation shall not be obligated pursuant to this Agreement :

(a) Claims Initiated by Indemnitee . To indemnify or advance expenses to Indemnitee with respect to an action, suit or proceeding (or part thereof) initiated by Indemnitee, except with respect to an action, suit or proceeding brought to establish or enforce a right to indemnification (which shall be governed by the provisions of Section 8(b) of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.

(b) Action for Indemnification . To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to indemnification in such action, suit or proceeding, in whole or in part, or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish their right to indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that nothing in this Section 8(b) is intended to limit the Corporation’s obligation with respect to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 4 hereof.

(c) Section 16 Violations . To indemnify Indemnitee on account of any proceeding with respect to which final judgment is rendered against Indemnitee for payment or an accounting of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

(d) Non-compete and Non-disclosure . To indemnify Indemnitee in connection with proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements the Indemnitee may be a party to with the Corporation, or any subsidiary of the Corporation or any other applicable foreign or domestic corporation, partnership, joint venture, trust or other enterprise, if any.

Section 9. Certain Settlement Provisions . The Corporation shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding without the Corporation’s prior written consent, which shall not be unreasonably withheld. The Corporation shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld.

Section 10. Savings Clause . If any provision or provisions of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify Indemnitee as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the full extent permitted by applicable law.

Section 11. Contribution . In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event, the Corporation shall, to the fullest extent permitted by law, contribute to the payment of Indemnitee’s costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, in an amount that is just and equitable in the circumstances, taking into account, among other things, contributions by other directors and officers of the Corporation or others pursuant to indemnification agreements or otherwise; provided, that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to (i) the failure of Indemnitee to meet the standard of conduct set forth in Section 1 hereof, or (ii) any limitation on indemnification set forth in Section 6(c), 8 or 9 hereof.

Section 12. Form and Delivery of Communications . Any notice, request or other communication required or permitted to be given to the parties under this Agreement shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

If to the Corporation:

Alliqua, Inc.

850 Third Avenue

Suite 1801

New York NY 10022

Attn: President

Facsimile: (646) 218-1401

If to Indemnitee:

Section 13. Subsequent Legislation . If the Florida Statutes are amended after adoption of this Agreement to expand further the indemnification permitted to directors or officers, then the Corporation shall indemnify Indemnitee to the fullest extent permitted by the Florida Statutes, as so amended.

Section 14. Nonexclusivity . The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the Corporation’s Certificate of Incorporation or Bylaws, in any court in which a proceeding is brought, the vote of the Corporation’s shareholders or disinterested directors, other agreements or otherwise, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as an agent of the Corporation and shall inure to the benefit of the heirs, executors and administrators of Indemnitee. However, no amendment or alteration of the Corporation’s Certificate of Incorporation or Bylaws or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement

Section 15. Enforcement . The Corporation shall be precluded from asserting in any judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Corporation agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which a proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Corporation to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Corporation of its obligations under this Agreement.

Section 16. Interpretation of Agreement . It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.

Section 17. Entire Agreement . This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superseded by this Agreement.

Section 18. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 19. Successor and Assigns . All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement in form and substance reasonably satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

Section 20. Service of Process and Venue . For purposes of any claims or proceedings to enforce this agreement, the Corporation consents to the jurisdiction and venue of any federal or state court of competent jurisdiction in the state of New York, and waives and agrees not to raise any defense that any such court is an inconvenient forum or any similar claim.

Section 21. Supersedes Prior Agreement . This Agreement supersedes any prior indemnification agreement between Indemnitee and the Corporation or its predecessors.

Section 22. Governing Law . This Agreement shall be governed exclusively by and construed according to the laws of the State of Florida, as applied to contracts between Florida residents entered into and to be performed entirely within Florida. If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Florida govern indemnification by the Corporation of its officers and directors, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

Section 23. Employment Rights . Nothing in this Agreement is intended to create in Indemnitee any right to employment or continued employment.

Section 24. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.

Section 25. Headings . The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

	ALLIQUA, INC.

	By:
		Jerome B. Zeldis MD, PhD
		Chairman of the Board


	INDEMNITEE:

	By:
	Name:	David Johnson

EXHIBIT 10.4

NONQUALIFIED STOCK OPTION AGREEMENT

ALLIQUA, INC.

2011 LONG-TERM INCENTIVE PLAN

1. Grant of Option . Pursuant to the Alliqua, Inc. 2011 Long-Term Incentive Plan (the “ Plan ”) for Employees, Contractors, and Outside Directors of Alliqua, Inc., a Florida corporation (the “ Company ”), the Company grants to

David Johnson

(the “ Participant ”),

an option (the “ Option ” or “ Stock Option ”) to purchase a total of Twelve Million Two Hundred Sixteen Thousand One Hundred Ninety-Five (12,216,195) full shares of Common Stock of the Company (the “ Optioned Shares ”) at an “ Option Price ” equal to $0.075 per share (being equal to the Fair Market Value per share of the Common Stock on the Date of Grant).

The “ Date of Grant ” of this Stock Option is February 4, 2013. The “ Option Period ” shall commence on the Date of Grant and shall expire on the tenth (10 th ) anniversary of the Date of Grant, unless terminated earlier in accordance with Section 4 below. The Stock Option is a Nonqualified Stock Option. This Stock Option is intended to comply with the provisions governing nonqualified stock options under the final Treasury Regulations issued on April 17, 2007, in order to exempt this Stock Option from application of Section 409A of the Code.

2. Subject to Plan . The Stock Option and its exercise are subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Nonqualified Stock Option Agreement (the “ Agreement ”). The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. The Stock Option is subject to any rules promulgated pursuant to the Plan by the Board or the Committee and communicated to the Participant in writing.

3. Vesting; Time of Exercise . The Optioned Shares shall be 100% vested and the Stock Option shall be immediately exercisable on the Date of Grant.

4. Term; Forfeiture .

a. The unexercised portion of the Stock Option that relates to Optioned Shares which are vested will terminate at the first of the following to occur:

i. 5 p.m. on the date the Option Period terminates;

ii. 5 p.m. on the date which is twelve (12) months following the date of the Participant’s Termination of Service due to death or Total and Permanent Disability;

iii. immediately upon the Participant’s Termination of Service by the Company for Cause (as defined below);

iv. immediately upon the Participant’s violation of any non-compete or non-solicitation agreement entered into between the Company and the Participant (including, without limitation, the “Employment Agreement” (as defined below));

v. in the event of the Participant’s Termination of Service by the Company without Cause (as defined below) or by the Participant for Good Reason (as defined below), in either case during the first two years of the Initial Employment Term, 5 p.m. on the date which is three (3) months following the expiration of the “Initial Employment Term” (as defined below), determined as if the Participant had remained actively employed by the Company during such period;

vi. in the event of the Participant’s Termination of Service by the Company without Cause (as defined below) or by the Participant for Good Reason (as defined below), in either case after the first two years of the Initial Employment Term, 5 p.m. on the date which is three (3) months following the expiration of the “Initial Employment Term” (as defined below) or any “Renewal Term” (as defined below), as the case may be, determined as if the Participant had remained actively employed by the Company during such period;

vii. 5 p.m. on the date which is ninety (90) days following the date of the Participant’s Termination of Service for any reason not otherwise specified in this Section 4.a. ; and

viii. 5 p.m. on the date the Company causes any portion of the Stock Option to be forfeited pursuant to Section 7 hereof.

b. For purposes of this Agreement, the terms “ Cause ”, “ Good Reason ”, “ Initial Employment Term ”, and “ Renewal Term ” each shall have the meanings set forth for such terms in the Executive Employment Agreement, by and between the Participant and the Company, dated February 4, 2013 (the “ Employment Agreement ”).

5. Who May Exercise . Subject to the terms and conditions set forth in Sections 3 and 4 above, during the lifetime of the Participant, the Stock Option may be exercised only by the Participant, or by the Participant’s guardian or personal or legal representative. If the Participant’s Termination of Service is due to his death prior to the dates specified in Section 4.a. hereof, and the Participant has not exercised the Stock Option as to the maximum number of vested Optioned Shares as set forth in Section 3 hereof as of the date of death, the following persons may exercise the exercisable portion of the Stock Option on behalf of the Participant at any time prior to the earliest of the dates specified in Section 4.a. hereof: the personal representative of his estate, or the person who acquired the right to exercise the Stock Option by bequest or inheritance or by reason of the death of the Participant; provided that the Stock Option shall remain subject to the other terms of this Agreement, the Plan, and Applicable Laws, rules, and regulations.

6. No Fractional Shares . The Stock Option may be exercised only with respect to full shares, and no fractional share of stock shall be issued.

7. Manner of Exercise . Subject to such administrative regulations as the Committee may from time to time adopt, the Stock Option may be exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect to which the Stock Option is to be exercised, the date of exercise thereof (the “ Exercise Date ”) which shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. On the Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to be purchased, payable as follows: (a) cash, check, bank draft, or money order payable to the order of the Company, (b) if the Company, in its sole discretion, so consents in writing, Common Stock (including Restricted Stock) owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, and which the Participant has not acquired from the Company within six (6) months prior to the Exercise Date, (c) if the Company, in its sole discretion, so consents in writing, by delivery (including by FAX) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price, and/or (d) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock so tendered.

Upon payment of all amounts due from the Participant, the Company shall either cause certificates for the Common Stock then being purchased to be delivered to the Participant (or the person exercising the Participant’s Stock Option in the event of his death) or cause the Common Stock then being purchased to be electronically registered in the Participant’s name (or the name of the person exercising the Participant’s Stock Option in the event of his death), promptly after the Exercise Date. The obligation of the Company to deliver or register such shares of Common Stock shall, however, be subject to the condition that, if at any time the Company shall determine in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock thereunder, then the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.

If the Participant fails to pay for any of the Optioned Shares specified in such notice or fails to accept delivery thereof, then that portion of the Participant’s Stock Option and right to purchase such Optioned Shares may be forfeited by the Participant.

8. Nonassignability . The Stock Option is not assignable or transferable by the Participant except by will or by the laws of descent and distribution.

9. Rights as Shareholder . The Participant will have no rights as a shareholder with respect to any of the Optioned Shares until the issuance of a certificate or certificates to the Participant or the registration of such shares in the Participant’s name for the shares of Common Stock. The Optioned Shares shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 10 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such certificate or certificates. The Participant, by his or her execution of this Agreement, agrees to execute any documents requested by the Company in connection with the issuance of the shares of Common Stock .

10. Adjustment of Number of Optioned Shares and Related Matters . The number of shares of Common Stock covered by the Stock Option, and the Option Prices thereof, shall be subject to adjustment in accordance with Articles 11 - 13 of the Plan.

11. Nonqualified Stock Option . The Stock Option shall not be treated as an Incentive Stock Option.

12. Voting . The Participant, as record holder of some or all of the Optioned Shares following exercise of this Stock Option, has the exclusive right to vote, or consent with respect to, such Optioned Shares until such time as the Optioned Shares are transferred in accordance with this Agreement; provided , however , that this Section shall not create any voting right where the holders of such Optioned Shares otherwise have no such right.

13. Specific Performance . The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

14. Participant’s Representations . Notwithstanding any of the provisions hereof, the Participant hereby agrees that he will not exercise the Stock Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Company shall be final, binding, and conclusive. The obligations of the Company and the rights of the Participant are subject to all Applicable Laws, rules, and regulations.

15. Investment Representation . Notwithstanding anything herein to the contrary, the Participant hereby represents and warrants to the Company, that:

a. The Common Stock that will be received upon exercise of the Stock Option are acquired for investment purposes only for the Participant’s own account and not with a view to or in connection with any distribution, re-offer, resale or other disposition not in compliance with the Securities Act of 1933 (the “ Securities Act ”) and applicable state securities laws;

b. The Participant, alone or together with the Participant’s representatives, possesses such expertise, knowledge and sophistication in financial and business matters generally, and in the type of transactions in which the Company proposes to engage in particular, that the Participant is capable of evaluating the merits and economic risks of acquiring Common Stock upon the exercise of the Stock Option and holding such Common Stock;

c. The Participant has had access to all of the information with respect to the Common Stock underlying the Stock Option that the Participant deems necessary to make a complete evaluation thereof, and has had the opportunity to question the Company concerning the Stock Option;

d. The decision of the Participant to acquire the Common Stock upon exercise of the Stock Option for investment has been based solely upon the evaluation made by the Participant;

e. The Participant understand that the Common Stock underlying the Stock Option constitutes “restricted securities” under the Securities Act and has not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Participant’s investment intent as expressed herein. The Participant further understands that the Common Stock underlying the Stock Option must be held indefinitely unless it is subsequently registered under the Securities Act or an exemption from such registration is available;

f. The Participant acknowledges and understands that the Company is under no obligation to register the Common Stock underlying the Stock Option and that the certificates evidencing such Common Stock will be imprinted with a legend which prohibits the transfer of such Common Stock unless it is registered or such registration is not required in the opinion of counsel satisfactory to the Company and any other legend required under applicable state securities laws; and

g. The Participant is an “accredited investor,” as such term is defined in Section 501 of Regulation D promulgated under the Securities Act.

16. Participant’s Acknowledgments . The Participant acknowledges that a copy of the Plan has been made available for his review by the Company, and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Stock Option subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.

17. Law Governing . This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Florida (excluding any conflict of laws rule or principle of Florida law that might refer the governance, construction, or interpretation of this Agreement to the laws of another state).

18. No Right to Continue Service or Employment . Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee or as a Contractor or as an Outside Director, or interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Contractor or Outside Director at any time.

19. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

20. Covenants and Agreements as Independent Agreements . Each of the covenants and agreements that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

21. Entire Agreement . This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter, including, without limitation, the Employment Agreement. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

22. Parties Bound . The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.

23. Modification . No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties; provided, however, that the Company may change or modify this Agreement without the Participant’s consent or signature if the Company determines, in its sole discretion, that such change or modification is necessary for purposes of compliance with or exemption from the requirements of Section 409A of the Code or any regulations or other guidance issued thereunder. Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.

24. Headings . The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

25. Gender and Number . Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

26. Notice . Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

	a.	Notice to the Company shall be addressed and delivered as follows:

		Alliqua, Inc. 850 Third Avenue, Suite 1801 New York, NY 10022 Attn: President Facsimile: (646) 218-1401

	b.	Notice to the Participant shall be addressed and delivered as set forth on the signature page.

27. Tax Requirements . The Participant is hereby advised to consult immediately with his or her own tax advisor regarding the tax consequences of this Agreement. The Company or, if applicable, any Subsidiary (for purposes of this Section 27 , the term “ Company ” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with this Award. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Award. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

28. Registration Covenant . The Company agrees to use its best efforts to file a registration statement under the Securities Act on Form S-8 with respect to the Plan not later than 180 days from the Date of Grant. Such registration will be maintained for no less than one year following the expiration period of all options issued to Participant under the Plan.

* * * * * * * *

[ Remainder of Page Intentionally Left Blank - Signature Page Follows. ]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

	COMPANY: ALLIQUA, INC.

	By:
		Jerome B. Zeldis MD, PhD Chairman of the Board

	PARTICIPANT:

	Signature

	Name:	David Johnson
	Address:

EXHIBIT 99.1

Alliqua Strengthens and Realigns Executive Team

David Johnson appointed CEO of Alliqua, Inc. and James Sapirstein CEO of Alliqua BioMedical Division

NEW YORK, NY – February 5, 2013 -- Alliqua, Inc. (OTCQB:ALQA) ("Alliqua" or the "Company") today announced a strategic realignment of the senior executive team. This change is designed to strengthen the leadership of the Company’s differentiated businesses including the sales of Alliqua’s marketed brands, SilverSeal ® and Hydress ® . The Alliqua Board of Directors has approved David Johnson, who joined the Board in December of 2012 and is currently the executive chairman of AquaMed Technologies, to now assume the additional responsibility of chief executive officer of Alliqua, Inc. Concurrently, James Sapirstein will become the chief executive officer of Alliqua BioMedical, Inc., a wholly-owned subsidiary of the Company.

“David is an excellent choice to take on these additional responsibilities, with his deep background in leading world class organizations, most recently Convatec Inc., a $1.7B global leader in wound therapeutic technologies; and will position the company well to build value for our shareholders,” said Jerome Zeldis, M.D., Ph.D., chairman of the Alliqua Board of Directors. “Under James Sapirstein’s leadership as CEO, Alliqua has adopted a new a strategic corporate plan including a process to bolstering our proprietary product pipeline. His skills and counsel will continue to be valuable to Alliqua as we move forward and take the next step by realigning our leadership team to best support our business.”

“In the two months since I joined Alliqua, it has become apparent that great opportunities exist for both the immediate commercialization of our existing wound care products, SilverSeal ® and Hydress ® , as well as our platform hydrogel technology,” said Dave Johnson. “In addition, we will continue to pursue opportunistic ways to expand our technology platforms to better serve our customers and to expand into new therapeutic areas.”

James Sapirstein added, “As the chief executive of Alliqua BioMedical, we will focus on the expansion of Alliqua’s proprietary product line by introducing new active pharmaceutical ingredients into our hydrogel technology for the topical delivery of local and systemic therapies. By doing so, we may realize the significant potential of our Company’s hydrogel technology.”

About Alliqua, Inc.

Alliqua, Inc. (ALQA) ("Alliqua") is a biopharmaceutical company focused on the development, manufacturing, and distribution of proprietary transdermal wound care and drug delivery technologies. Alliqua's leading technology platform produces hydrogels, a 3-dimensional cross-linked network of water soluble polymers capable of numerous chemical configurations.

Alliqua currently markets its new line of 510K FDA-approved hydrogel products for wound care under the SilverSeal ® brand. Alliqua’s electron beam production process, located at its 16,000 square foot GMP manufacturing facility in Langhorne PA, allows Alliqua to aggressively develop and custom manufacture a wide variety of hydrogels. Alliqua’s hydrogels can be customized for various transdermal applications to address market opportunities in the treatment of wounds as well as the delivery of numerous drugs or other agents for pharmaceutical and cosmetic industries. Additionally, Alliqua’s drug delivery platform, in combination with certain active pharmaceutical ingredients, can provide pharmaceutical companies with a transdermal technology to enhance patient compliance and potentially extend the patent life of valuable drug franchises. Additionally, our subsidiary, HepaLife Biosystems, Inc., focuses on the development of a cell-based bioartificial liver system, known as HepaMate™.

For additional information, please visit www.alliqua.com . To receive future press releases via email, please visit: http://alliqua.com/contacts .

Any statements contained in this press release regarding our ongoing research and development and the results attained by us to-date have not been evaluated by the Food and Drug Administration.

Legal Notice Regarding Forward-Looking Statements

This release contains forward-looking statements. Forward-looking statements are generally identifiable by the use of words like "may," "will," "should," "could," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of the our control that can make such statements untrue, including, but not limited to, inadequate capital, adverse economic conditions, intense competition, lack of meaningful research results, entry of new competitors and products, adverse federal, state and local government regulation, termination of contracts or agreements, technological obsolescence of our products, technical problems with our research and products, price increases for supplies and components, inability to carry out research, development and commercialization plans, loss or retirement of key executives and research scientists and other specific risks. We currently have no commercial products intended to diagnose, treat, prevent or cure any disease. The statements contained in this press release regarding our ongoing research and development and the results attained by us to-date have not been evaluated by the Food and Drug Administration. There can be no assurance that further research and development, and/or whether clinical trial results, if any, will validate and support the results of our preliminary research and studies. Further, there can be no assurance that the necessary regulatory approvals will be obtained or that we will be able to develop new products on the basis of our technologies. In addition, other factors that could cause actual results to differ materially are discussed in our Annual Report on Form 10-K filed with the SEC on March 29, 2012 and our most recent Form 10-Q filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC's web site at www.sec.gov. We undertake no obligation to publicly update or revise our forward- looking statements as a result of new information, future events or otherwise.

Contacts for Alliqua, Inc.

Steven Berger

Chief Financial Officer

646-218-1450

info@alliqua.com