Exhibit 10.40

ASSET PURCHASE AGREEMENT

          This Asset Purchase Agreement (this “Agreement”) is made and entered into as of the 21stday of February, 2012 (the “Effective Date”), by and between Apricus Biosciences, Inc., a Nevada corporation with its principal address at 11975 El Camino Real, Suite 300, San Diego, CA 92130 (“Buyer”), and PediatRx Inc., a Nevada corporation with its principal address at 405 Trimmer Road, Suite 200, Califon, NJ 07830 (“Seller”).

RECITALS

          WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of Seller’s assets associated with the product known as Granisol® (granisetron HCl) Oral Solution for all countries and territories of the world excluding the United States on the terms set forth in this Agreement.

          NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I. DEFINITIONS

          As used in this Agreement, the following defined terms have the meanings described below:

          1.1      “ Action or Proceeding ” means any action, suit, proceeding, arbitration, order, inquiry, hearing, assessment with respect to fines or penalties, or litigation (whether civil, criminal, administrative, investigative or informal) threatened, commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority.

          1.2      “ Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person. “Control” and, with correlative meanings, the terms “controlled by” and “under common control with” means the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, resolution, regulation or otherwise.

          1.3      “ Closing Date ” means the Effective Date of this Agreement.

          1.4      “ Contract ” means any and all legally binding commitments, contracts, purchase orders, leases, or other agreements, whether written or oral.

          1.5      “ Encumbrance ” means any mortgage, pledge, assessment, security interest, deed of trust, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale or title retention agreement or other agreement to give any of the foregoing in the future.

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          1.6      “ Governmental Authority ” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States or other country, or any supra-national organization, state, county, city or other political subdivision.

          1.7      “ Knowledge ” with respect to any Party, means the actual knowledge of the officers (or persons performing similar functions) of such Party, after reasonable inquiry.

          1.8      “ Law ” means any federal, state or local law, statute or ordinance, or any rule, regulation, or published guidelines promulgated by any Governmental Authority.

          1.9      “ Party ” means each of Buyer and Seller.

          1.10      “ Person ” means any natural person, corporation, general partnership, limited partnership, limited liability company, proprietorship, other business organization, trust, union, association or Governmental Authority.

          1.11      “ Product ” shall mean Granisol ^® (granisetron HCl) oral solution.

          1.12      “ Purchased Assets ” means the intellectual property and the personal property specified in Exhibit A hereto.

          1.13      “ United States ” means the United States of America, its territories and possessions.

ARTICLE II. PURCHASE AND SALE OF ASSETS

          2.1      Purchase and Sale of Assets . Subject to the terms and conditions of this Agreement, on the Closing Date, Seller shall, or shall cause its relevant Affiliates to, sell, transfer, convey, assign and deliver to Buyer, free and clear from all Encumbrances, and Buyer shall purchase, acquire and accept from Seller and such Affiliates of Seller, all right, title and interest of Seller and such Affiliates in and to the Purchased Assets.

ARTICLE III. PURCHASE PRICE AND PAYMENT

          3.1       Purchase Price . As consideration for the Purchased Assets, Buyer shall deliver or cause to be delivered to Seller on the Closing Date, an amount equal to Sixty Four Thousand Nine Hundred Dollars ($64,900) (the “Purchase Price”) in immediately available funds by wire transfer into an account designated by Seller.

          3.2      Taxes . The parties agree that:

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that may become payable in connection with the sale of the Assets to Buyer, and the parties will cooperate in the filing of all necessary tax returns and other documentation with respect to all such taxes.

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER

          In order to induce Buyer to enter into this Agreement and consummate the transactions contemplated hereby, Seller hereby makes to Buyer the following representations and warranties:

          4.1       Authority of Seller . Seller has all necessary power and authority and has taken all actions necessary to enter into this Agreement and to carry out the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Seller and, when executed and delivered by Buyer, will constitute a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

          4.2      Non-Contravention . The execution and delivery by Seller of this Agreement does not, and the performance by it or its relevant Affiliates of its or their obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

          (a)      conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Certificate of Incorporation or By-laws or other organizational documents of Seller or its relevant Affiliates;

          (b)      conflict with or result in a violation or breach of any term or provision of any Law applicable to Seller, the Product, or the Purchased Assets;

          (c)      require from Seller any notice to, declaration or filing with, or consent or approval of, any Governmental Authority or other third party; or

          (d)      result in the imposition of any Encumbrance upon any of the Purchased Assets.

          4.3      Purchased Assets . Seller has good and marketable title to the Purchased Assets and the Purchased Assets are, and will be, delivered to Seller free of any Encumbrances. Seller has not granted any license, agreement or other permission to any third party with respect to any of the Purchased Assets.

          4.4       Litigation . There are no Actions or Proceedings pending or, to the Knowledge of Seller, threatened against, relating to, affecting or arising in connection with (i) the Product; (ii) Purchased Assets; (iii) this Agreement; or (iv) the transactions contemplated by this Agreement. Seller is not subject to any order that could reasonably be expected to materially impair or delay the ability of Seller to perform its obligations under this Agreement.

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          4.5       Regulatory Matters . Seller has not sought or obtained any regulatory approval for the Product, and has not marketed or sold the Product, outside of the United States. There is no Action or Proceeding by any Governmental Authority pending or, to the Knowledge of Seller, threatened regarding the Product or any Purchased Assets.

          4.6      No Non-Competition Agreements or Preferential Obligations . The Purchased Assets are not subject to any non-competition agreements with, or other agreements granting preferential rights to purchase or license the Purchased Assets to, third parties.

          4.7      Officers and Directors . The persons specified on the signature page hereof are all the officers and directors of Seller as of the Effective Date.

          4.8      No Other Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN ARTICLE IV OF THIS AGREEMENT, SELLER DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY INFORMATION FURNISHED BY SELLER WITH REGARD TO THE PRODUCT OR THE PURCHASED ASSETS, INCLUDING THE FUTURE PROFITABILITY OF THE PRODUCT, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE IV.

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER

          In order to induce Seller to enter into this Agreement and consummate the transactions contemplated hereby, Buyer hereby makes to Seller the following representations and warranties:

          5.1      Corporate Organization . Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Buyer has all required corporate power and authority to carry on its business as presently conducted, to enter into and perform this Agreement and the agreements contemplated hereby to which it is a party and to carry out the transactions contemplated hereby and thereby.

          5.2       Authority of Buyer . This Agreement and all agreements, documents and instruments executed and delivered by Buyer pursuant hereto are valid and binding obligations of Buyer, enforceable in accordance with their respective terms. The execution, delivery and performance of this Agreement and all agreements, documents and instruments executed and delivered by Buyer pursuant hereto, have been duly authorized by all necessary corporate or other action of Buyer.

          5.3      Non-Contravention . The execution and delivery by Buyer of this Agreement does not, and the performance by it of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

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          (a)      conflict with or result in a violation or breach of any of the terms, conditions or provisions of the Certificate of Incorporation, Bylaws or other organizational documents of Buyer;

          (b)      violate, conflict with or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under, any provision of any Law, regulation or rule, or any order of, or any restriction imposed by, any court or governmental agency applicable to Buyer;

          (c)      require from Buyer any notice to, declaration or filing with, or consent or approval of any Governmental Authority or other third party; or

          (d)      violate or result in a violation of, or conflict with or constitute or result in a violation of or default (whether after the giving of notice, lapse of time or both) under, accelerate any obligation under, or give rise to a right of termination of, any contract, agreement, permit, license, authorization or other obligation to which Buyer is a party or by which Buyer or any of its assets are bound.

          5.4      Litigation . There are no Actions or Proceedings pending, or to the Knowledge of Buyer threatened or anticipated, against, relating to, affecting or arising in connection with (i) this Agreement or (ii) the transactions contemplated by this Agreement. Buyer is not subject to any order that could reasonably be expected to materially impair or delay the ability of Buyer to perform its obligations under this Agreement.

          5.5      Brokers . Buyer has not retained any broker in connection with the transactions contemplated hereunder. Seller will have no obligation to pay fees of any brokers, finders, investment bankers, or financial advisors engaged by Buyer in connection with this Agreement or the transactions contemplated hereby.

          5.6      No Other Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN ARTICLE V OF THIS AGREEMENT, BUYER DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, RELATED TO THIS AGREEMENT.

ARTICLE VI. COVENANTS OF THE PARTIES

          6.1       Cooperation . Each Party shall cooperate fully with the other in preparing and filing all notices, applications, submissions, reports and other instruments and documents that are necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement, including Seller’s cooperation in the efforts of Buyer to obtain any consents and approvals of any Governmental Authority required for Buyer to be able to own the Purchased Assets.

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          6.2       Non-Competition .

                    (a)      Seller’s Covenant . Seller agrees that, for a period of seven (7) years from the Closing Date, neither it nor any of its officers or directors (which are signatories to this Agreement as provided on the signature page hereof), will directly or indirectly, whether through a partnership, licensing arrangement or any other structure, or as principal, agent, owner, partner, officer, director, employee, consultant or otherwise, research, develop, market, sell, distribute or otherwise make available any anti-emetic product in any formulation or dosing in all countries and territories of the world excluding the United States; provided, however, that the foregoing shall not prohibit (i) any officer or director of Seller (other than Joe Carusone) from acquiring, holding or selling up to 5% of the issued and outstanding shares of any class of securities listed on a national securities exchange, or (ii) Joe Carusone from acquiring, holding or selling up to 10% of the issued and outstanding shares of any class of securities of any private company or company listed on a national securities exchange.

                    (b)      Buyer’s Covenant . Buyer agrees that it will not directly or indirectly, whether through a partnership, licensing arrangement or any other structure, or as principal owner or partner use the Purchased Assets to market, sell, distribute or otherwise make available any 5HT3 chemical class anti-emetic product in any formulation or dosing in the United States, except as (i) expressly permitted by that certain Co-Promotion Agreement between the parties of even date herewith, (ii) as otherwise mutually agreed in writing by the parties or (iii) as permitted by the securing of rights from a third party (which obtained such rights by license from Seller) to do so.

          6.3       Further Assurances . For a period of twelve (12) months following the Closing Date, Seller shall from time to time, at the request of Buyer, execute and deliver, or cause to be executed and delivered, such other instruments of conveyance and transfer and take such other actions as Buyer may reasonably request, in order to more effectively consummate the transactions contemplated by this Agreement and to vest in Buyer good and marketable title to the Purchased Assets.

          6.4      Confidentiality . Seller shall maintain the confidentiality of all Purchased Assets and information therein that is of a confidential nature, and shall not disclose such information to any third party without the prior written consent of Buyer. Such obligation of confidentiality shall not apply to any specific item of information that: (i) is now or later made known to the public through no default by Seller or Affiliates; (ii) is acquired from a third party, having a right to disclose such information; or (iii) is required to be disclosed by Law, so long as Buyer is given advance notice of such disclosure and an opportunity to seek a protective order or confidential treatment, and Seller shall cooperate in any such efforts at Buyer’s request. For clarity, Buyer and Seller agree to issue a joint public statement announcing the closing of the transactions contemplated by this Agreement on such timing and in such form as the Parties shall mutually agree.

          6.5       Technology Transfer . For a period of twelve (12) months following the Closing Date, Seller shall from time to time, at the request of Buyer, provide reasonable assistance at the cost of Buyer to promptly copy and transfer information included within the Purchased Assets including but not limited to any training materials, marketing or promotional materials and other trade secrets or know how, which are necessary or useful to make, use or sell the Product in the Territory, which is in the possession and control of Buyer.

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          6.6      License to Manufacture Product . Buyer hereby grants to Seller and its Affiliates a non-exclusive, royalty-free and irrevocable license (with the right to sublicense) under the Purchased Assets to manufacture the Product anywhere in the world for importation, distribution and sale in the United States .

ARTICLE VII. INDEMNIFICATION

          7.1      Survival of Representations and Warranties . The representations and warranties of Seller or Buyer contained in this Agreement or documents executed in connection herewith shall survive the Closing Date for a period of twelve (12) months only and during such period shall bind the successors and assigns of the relevant Party, whether so expressed or not, and all such representations and warranties shall inure to the benefit of the successors and assigns of the Parties hereto, whether expressed or not.

          7.2      Indemnification .

          (a)       By Seller . From and after the Closing Date, Seller shall indemnify, defend and hold harmless Buyer, its Affiliates, and their respective officers, directors, employees, agents, successors and assigns from and against any and all costs, losses, liabilities, damages and expenses (including reasonable fees and disbursements of attorneys) incurred in connection with third party claims, demands and liabilities (“ Third Party Claims ”) arising out of or relating to any breach of any covenant, representation, warranty or agreement of Seller in this Agreement.

          (b)      By Buyer . From and after the Closing, Buyer shall indemnify, defend and hold harmless Seller, its Affiliates, and their respective officers, directors, employees, agents, successors and assigns from and against any and all Third Party Claims arising out of or relating to: (i) any breach of any covenant, representation, warranty or agreement of Buyer in this Agreement; or (ii) the research, development or commercialization of the Product after the Closing Date.

          (c)      Procedure . A person or entity intending to claim indemnification under this Section 7.2 (the “ Indemnitee ”) shall promptly notify the Party providing indemnification (the “ Indemnitor ”) of any Third Party Claim with respect to which the Indemnitee intends to claim such indemnification. Indemnitor shall have the right to control the defense of any such Third Party Claim, as to which the obligation to indemnify the Indemnitee has been acknowledged by the Indemnitor in writing. The indemnity agreement in this Section 7.2 shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action of which settlement is effected without the consent of the Indemnitor. The Indemnitee under this Section 13, its employees and agents, shall cooperate fully with the Indemnitor and its legal representative(s) in the investigations and defense of any Third Party Claim covered by this indemnification. The Indemnitee shall have the right to participate in the defense of such action at its own cost.

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          7.3       Limitation of Damages . The indemnification obligations of a party under Section 7.2 and the liability of a party for all damages whatsoever arising out of or related to this Agreement and the instruments and agreements contemplated hereby and the transactions contemplated hereby and thereby shall be limited as follows:

ARTICLE VIII. MISCELLANEOUS

          8.1       Notices . All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally against written receipt or by facsimile transmission with answer back confirmation or mailed (postage prepaid by certified or registered mail, return receipt requested) or by nationally recognized overnight courier that maintains records of delivery to the parties at the following addresses or facsimile numbers:

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With copies sent via e-mail (which shall not constitute notice hereunder):

All such notices, requests and other communications will (a) if delivered personally to the address as provided in this Section, be deemed given upon receipt, (b) if delivered by facsimile to the facsimile number as provided in this Section, be deemed given upon receipt by the sender of the answer back confirmation, provided a confirmation copy is sent by mail and (c) if delivered by mail in the manner described above or by overnight courier to the address as provided in this Section, be deemed given upon receipt. Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other party hereto in accordance with the terms of this Section.

          8.2      Entire Agreement . This Agreement supersedes all prior discussions and agreements among the parties with respect to the subject matter hereof and contains the sole and entire agreement among the parties hereto with respect to the subject matter hereof.

          8.3       Construction of Certain Terms and Phrases . Unless the context of this Agreement otherwise requires: (a) words of any gender include each other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (d) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; (e) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”; and (f) the term “including” or “includes” means “including without limitation” or “includes without limitation.” Whenever this Agreement refers to a number of days, such number shall refer to calendar days.

          8.4      Waiver . Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party hereto of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by law or otherwise afforded, will be cumulative and not alternative.

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          8.5      Amendment . This Agreement may be amended, supplemented or modified only by a written instrument duly executed by each party hereto.

          8.6      Assignment; Binding Effect . Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto without the prior written consent of the other party hereto, other than to an Affiliate or to a successor in interest of such party by reason of a merger, acquisition or sale of all or substantially all of the assets of such party with a guarantee of performance by the assigning party, and any attempt to do so, other than as permitted above, will be void. This Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their respective successors and permitted assigns.

          8.7       Headings . The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

          8.8       Severability . If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never compromised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar to terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the parties.

          8.9      Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts executed and performed in such state, without giving effect to conflicts of laws principles.

          8.10       Consent to Jurisdiction and Forum Selection . The parties hereto agree that all actions or proceedings arising in connection with this Agreement shall be initiated and tried exclusively in the local and federal courts located in San Diego County, California. The aforementioned choice of venue is intended by the parties to be mandatory and not permissive in nature, thereby precluding the possibility of litigation between the parties with respect to or arising out of this Agreement in any jurisdiction other than that specified in this section. Each party hereby waives any right it may have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this section, and stipulates that the local and federal courts located in San Diego County, California shall have personal jurisdiction and venue over each of them for purposes of litigating any dispute, controversy or proceeding arising out of or related to this Agreement. Each party hereby authorizes and agrees to accept service of process sufficient for personal jurisdiction in any action against it as contemplated by this section by registered or certified mail, return receipt requested, postage prepaid to its address for the giving of notices as set forth in this Agreement, or in the manner set forth in Section 8.1 of this Agreement for the giving of notice. Any final judgment received against a party in any action or proceeding shall be conclusive as to the subject of such final judgment and may be enforced in other jurisdictions in any manner provided by law.

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          8.11      Expenses . Except as otherwise provided in this Agreement, each party hereto shall pay its own expenses and costs incidental to the preparation of this Agreement and to the consummation of the transactions contemplated hereby.

          8.12      Counterparts . This Agreement may be executed in any number of counterparts and by facsimile, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

          8.13      Seller and Its Affiliates . Seller hereby acknowledges that any reference to Seller in this Agreement shall be to Seller and those of its Affiliates that own or possess the Purchased Assets. Seller also agrees that any reference to action to be taken by Seller under this Agreement shall, without further expression, include a covenant by Seller to cause those of its Affiliates that own or possess the Purchased Assets to take such action, as the case may be.

[Remainder of Page Intentionally Left Blank]

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          IN WITNESS WHEREOF, this Agreement has been executed by the Parties hereto all as of the date first above written.

Apricus Biosciences, Inc.

PediatRx Inc.

By signing below, each of the undersigned in his or her individual capacity, for good and valuable consideration, the receipt and sufficiency are hereby acknowledged, hereby agrees to comply with the obligations set forth in Section 6.2, entitled “Non-Competition”:

AGREED AND ACKNOWLEDGED

/s/ Cameron Durrant                                  
Name: Cameron Durrant
Role: Director, Chairman, President and CEO

/s/ David Tousley                                      
Name: David Tousley
Role: Director, Secretary and Chief Financial & Administrative Officer

/s/ Joe Carusone                                        
Name: Joe Carusone
Role: Director

/s/ Paul J. Richardson                               
Name: Paul J. Richardson
Role: Director

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EXHIBIT A

THE PURCHASED ASSETS

As used in the Agreement, the term “Purchased Assets” means:

to the extent such intellectual property and other assets are (i) owned by PediatRx or its Affiliates and (ii) necessary or useful for the Buyer to make, use, develop, offer for sale, sell, import or otherwise exploit the Product;

provided, however, that

* * * * *

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Exhibit 10.41

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “***”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE EXCHANGE ACT OF 1934.

CO-PROMOTION AGREEMENT

          This CO-PROMOTION AGREEMENT (this “ Agreement ”) is made as of February 21st, 2012 (the “ Effective Date ”), by and between Apricus Biosciences, Inc., a Nevada corporation (“ Apricus ”), and PediatRx Inc., a Nevada corporation (“ PediatRx ”). Each of Apricus and PediatRx is referred to herein individually as a “party” and collectively as the “parties.”

          WHEREAS, Apricus and PediatRx are parties to that certain Binding Term Sheet dated January 26, 2012 (the “ Term Sheet ”), pursuant to which, inter alia , the parties agreed to enter into this Agreement with respect to the promotion, manufacture and sale of Granisol® in the United States; and

          WHEREAS, this Agreement will supersede and replace the Term Sheet, insofar as it relates to the terms of this Agreement.

          NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein contained, the parties hereto intending to be legally bound hereby agree as follows:

ARTICLE 1
DEFINITIONS

          As used in this Agreement, the following terms shall have the following meanings:

          Section 1.1      “ Act ” means the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301, et. seq., as it may be amended from time to time, and the regulations promulgated thereunder, including the Generic Drug Act.

          Section 1.2      “ Adverse Drug Experience ” means any “adverse drug experience” as defined or contemplated by 21 C.F.R. 314.80 or 312.32, associated with a Product.

          Section 1.3      “ Adverse Drug Experience Report ” means any oral, written or electronic report of any Adverse Drug Experience transmitted to any Person.

          Section 1.4      “ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such first Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

          Section 1.5      “ Agreement Month ” means each calendar month during the Term (including any partial calendar month in the case of the first and last calendar months of the Term).

          Section 1.6      “ Agreement Quarter ” means the Initial Agreement Quarter, each successive period of three months during the Term after the Initial Agreement Quarter and the Final Agreement Quarter.

          Section 1.7      “ Agreement Year ” means the Initial Agreement Year, each successive period of twelve months during the Term and the Final Agreement Year.

          Section 1.8      “ Allocable Percentage ” for a particular period means the pull-through percentage determined by dividing (a) the total number of units of Product shipped by wholesalers during such period to individual locations where PediatRx Detailed the Product during such period in accordance with the call plan agreed upon by the parties under Section 2.12, by (b) the total number of units of Product shipped by the wholesalers during such period, based on Prescriber Data for such period.

          Section 1.9      “ ANDA ” means Abbreviated New Drug Application.

          Section 1.10      “ API ” means granisetron HCl.

          Section 1.11      “ Apricus Allocable Costs ” means one minus the Allocable Percentage multiplied by PediatRx COGS, plus all other out-of-pocket costs incurred by PediatRx to the extent directly related to the generation of Apricus-Generated Net Sales.

          Section 1.12      “ Apricus-Generated Net Sales ” means, with respect to sales of Product by PediatRx and its Affiliates for a particular period, one minus the Allocable Percentage for such period multiplied by Net Sales by PediatRx and its Affiliates for such period.

          Section 1.13      “ Apricus-Manufactured Product ” means any Product, the responsibility for Manufacturing of which has been transferred to Apricus pursuant to Section 4.1.

          Section 1.14      “ Apricus-Manufactured Samples ” means Samples, the responsibility for Manufacturing of which has been transferred to Apricus pursuant to Section 4.1.

          Section 1.15      “ Apricus Sales Force ” means the field force of Sales Representatives employed or engaged by Apricus, including field-based sales force management such as regional and district sales managers.

          Section 1.16      “ Apricus Trademarks ” means the trademarks set forth on Schedule A, including the “Apricus” trademark and associated design and logo.

          Section 1.17      “ Assigned Agreement ” means any of the Third Party Agreements which Apricus timely elects to have assigned to it pursuant to Section 4.4 hereto. For the avoidance of doubt, Assigned Agreements exclude the Retained Contracts.

          Section 1.18      “ cGMP ” shall mean current “Good Manufacturing Practices” as such term is defined from time to time by the FDA or other relevant Regulatory Authority having jurisdiction over the manufacture or sale of a Product pursuant to its regulations, guidelines or otherwise.

          Section 1.19      “ COGS ” means, for a particular period, the applicable party’s cost of goods sold (calculated in accordance with Section 5.3(b) for the Product in the Territory for such period.

          Section 1.20      “ Commercialize ” means to Manufacture, have Manufactured, Promote, market, sell and distribute the Product in the Territory.

          Section 1.21      “ Confidentiality Agreement ” means that certain Confidential Disclosure Agreement, dated as of November 18, 2011, between Apricus and PediatRx.

          Section 1.22      “ Control ” or “ Controlled ” means, with respect to patents, know-how or other intellectual property rights of any kind, the possession by a party of the ability to grant a license or sublicense of such rights as contemplated by this Agreement, without violating the terms of any agreement or other arrangement with any Third Party.

          Section 1.23      “Co-Pay Program ” means the Product co-pay program which PediatRx has used in the past with One2One Health Media.

          Section 1.24      “ Customers ” means Third Party wholesalers, retailer pharmacies, mail-order pharmacies, group purchasing organizations or other organizations that purchase the Product in the Territory.

          Section 1.25      “ OPDP ” means the FDA’s Office of Prescription Drug Promotion, or any successor Regulatory Authority performing comparable functions in the Territory.

          Section 1.26      “ Detail ” means an in-person, face-to-face sales presentation of a Product made by a Sales Representative to a Professional.

          Section 1.27      “ Domain Name ” has the meaning set forth in Section 2.6.

          Section 1.28      “ Encumbrance ” means any lien, pledge, security interest, right of first refusal, option, title defect, license, restriction or other adverse claim or interest or encumbrance of any kind or nature whatsoever, whether or not perfected, including any restriction on use, transfer, receipt of income or exercise of any other attribute of ownership.

          Section 1.29      “ Exclusive Area ” means the states of California, Florida, Illinois, Massachusetts, New York and Texas.

          Section 1.30      “ FDA ” means the United States Food and Drug Administration or any successor agency performing comparable functions in the Territory.

          Section 1.31      “ Final Agreement Quarter ” means the period commencing on the first day following the last full Agreement Quarter during the Term and ending on the last day of the Term.

          Section 1.32      “ Final Agreement Year ” means the period commencing on the first day following the last full Agreement Year during the Term and ending on the last day of the Term.

          Section 1.33      “ First Sales Booking Date ” means the Effective Date, unless otherwise agreed by the parties.

          Section 1.34      “ Force Majeure Event ” has the meaning set forth in Section 14.7.

          Section 1.35      “ GAAP ” has the meaning set forth in Section 5.3(b) .

          Section 1.36      “ General and Administrative Expenses ” means the general administration expenses incurred by a party or any of its Affiliates to the extent directly related to the Promotion, importation, distribution or sale of a Product in the Territory.

          Section 1.37      “ Generic Drug Act ” has the meaning set forth in Section 8.1(i) .

          Section 1.38      “ Governmental Authority ” shall mean any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or any supranational organization of which any such country is a member, which has competent and binding authority to decide, mandate, regulate, enforce, or otherwise control the activities of the parties contemplated by this Agreement.

          Section 1.39      “ Initial Agreement Quarter ” means the period commencing on the Effective Date and ending on March 31, 2012.

          Section 1.40      “ Initial Agreement Year ” means the period commencing on the Effective Date and ending on December 31, 2012.

          Section 1.41      “ Legal Requirements ” means laws, rules and regulations of any Governmental Authority in the Territory, including, for clarity, all guidelines, policies and procedures referenced in Section 3.3 of this Agreement.

          Section 1.42      “ Manufacture ,” “ Manufactured ” and “ Manufacturing ” mean all operations involved in the manufacture, receipt, incoming inspection, storage and handling of raw materials, and the manufacture, processing, purification, packaging, labeling, warehousing, quality control testing (including in-process release and stability testing), shipping and release of Product.

          Section 1.43      “ Medical Affairs Expenses ” incurred by a party means, with respect to a particular period, all out-of-pocket costs incurred by the applicable party related to the handling of medical inquiries during such period, to the extent attributable to the Product.

          Section 1.44      “ Net Operating Income ” means, for a particular period, Net Sales of Product by the applicable party and its Affiliates for such period, less (i) the portion of such Net Sales that represent PediatRx-Generated Net Sales, (ii) COGS (other than for Apricus-Generated Net Sales), (iii) Sales and Marketing Expenses and (iv) General and Administrative Expenses for such period, plus (v) PediatRx Allocable Costs for such period, plus (vi) any amounts paid by PediatRx to Apricus pursuant to Section 5.2(b) for such period. For clarity, for the purposes of calculating PediatRx’s Net Operating Income under Section 7.6, each of PediatRx-Generated Net Sales and PediatRx Allocable Costs shall be considered to be zero.

          Section 1.45      “ Net Sales ” means, with respect to a Product, for a particular period, the gross amount invoiced on sales of such Product in the Territory recognized as gross revenue in accordance with GAAP by a party or its Affiliates to independent, unrelated Third Parties during such period in bona fide arms’ length transactions, less the following deductions, calculated to arrive at net sales in accordance with GAAP: (a) freight, insurance (but only insurance with respect to shipping the Product) and other transportation charges; (b) any sales, use, value-added, excise taxes or duties or allowances on the selling price of the Product; (c) chargebacks, trade, quantity and cash discounts and rebates, including governmental rebates; (d) allowances or credits, including allowances or credits on account of rejection, defects or returns of the Product, or because of a retroactive price reduction; (e) redemption costs associated with any voucher, coupon, loyalty card or other co-pay assistance programs for the Product; and (f) fees paid to wholesalers, group purchasing organizations, pharmacy benefit managers and the like based on the sale or dispensing of the Product. Net Sales shall not include a sale or transfer to an Affiliate for resale or if done for clinical, regulatory or governmental purposes where no consideration is received; but the resale by such Affiliate shall be considered a sale of such Product. In the event a party licenses sublicenses rights to distribute and sell Product in the Territory, Net Sales shall include any portion of the licensee’s or sublicensee’s Net Sales with respect to Product received by such party from the sublicensee during the Term in the Territory.

          Section 1.46      “ Non-Exclusive Area ” means the parts of the Territory other than the Exclusive Area.

          Section 1.47      “ Order ” means any award, decision, injunction, judgment, decree, order, ruling, or verdict entered, issued, made, or rendered by any Governmental Authority or by any arbitrator.

          Section 1.48      “ PDMA ” means the Prescription Drug Marketing Act, as amended, and the rules and regulations promulgated thereunder.

          Section 1.49      “ PediatRx Allocable Costs ” means the Allocable Percentage multiplied by Apricus COGS, plus all other out-of-pocket costs incurred by Apricus to the extent directly related to the generation of PediatRx-Generated Net Sales.

          Section 1.50      “ PediatRx-Generated Net Sales ” means, with respect to sales of Product by Apricus and its Affiliates for a particular period, the Allocable Percentage for such period multiplied by Net Sales by Apricus and its Affiliates for such period.

          Section 1.51      “ PediatRx Promotional Materials ” has the meaning set forth in Section 2.12(d) .

          Section 1.52      “ PediatRx Sales Force ” means the field force of Sales Representatives employed or contracted by PediatRx.

          Section 1.53      “ PediatRx Trademarks ” means (a) Granisol® (the “ PediatRx Product Trademark ”) and (b) PediatRx ™(the “ PediatRx Corporate Trademark ”). The PediatRx Trademarks are attached hereto as Schedule C.

          Section 1.54      “ Person ” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Authority.

          Section 1.55      “ Post-Marketing Development ” means, with respect to Product, the conduct of any phase IV clinical studies, quality of life assessments, pharmacoeconomic, label expansion or other post-marketing studies.

          Section 1.56      “ Prescriber Data ” means data provided by a Third Party which measures individual locations in the Territory during a specified time period, from a source mutually agreed in writing by the parties (it being understood that wholesaler “867” data is a source agreeable to the parties).

          Section 1.57      “ Product ” means Granisol® (granisetron HCl) oral solution.

          Section 1.58      “ Product Complaints ” means any report concerning the quality, purity, quantity, weight, pharmacologic activity, labeling, identity or appearance of a Product.

          Section 1.59      “ Product ANDA ” means ANDA #078334 approved by FDA on February 28, 2008, including any and all amendments and supplements thereto and all written FDA communications related thereto.

          Section 1.60      “ Professional ” means a physician or other health care practitioner who is permitted by law to prescribe Product.

          Section 1.61      “ Promote ,” “ Promotional ” and “ Promotion ” mean, with respect to a Product, any activities undertaken to encourage sales or use of such Product, including Details, product sampling, detail aids, drop-offs, coupons, discount cards, journal advertising, direct mail programs, direct-to-consumer advertising, convention exhibits and all other forms of marketing, advertising, public relations or promotion.

          Section 1.62      “ Promotional Materials ” has the meaning set forth in Section 2.4(a) .

          Section 1.63      “ Proprietary Information ” means any proprietary or confidential information communicated from one party to the other in connection with or relating to this Agreement, the Term Sheet or the Confidentiality Agreement (whether before or after the Effective Date), which is identified as confidential or proprietary, or which the other party knows or has reason to know is confidential or proprietary, including the Technology and financial, marketing, business, technical and scientific information or data, whether communicated in writing, orally or electronically. Proprietary Information shall not include information that the receiving party can show through written documentation:

                    (a)      at the time of disclosure, is publicly known;

                    (b)      after the time of disclosure, becomes part of the public domain, except by breach of an agreement between the disclosing party or any Affiliate thereof and the receiving party or any Affiliate thereof;

                    (c)      is or was in the possession of the receiving party or any Affiliate thereof at the time of disclosure by the disclosing party and was not acquired directly or indirectly from the disclosing party or any Affiliate thereof or from any other party under an agreement of confidentiality to the disclosing party or any Affiliate thereof; or

                    (d)      is or was developed by the receiving party or its Affiliates without use of or reference to the other party’s Proprietary Information.

          Section 1.64      “ Regulatory Approval ” means any and all consents or other authorizations or approvals by the FDA or any other Regulatory Authority in the Territory that are required to develop, manufacture, market and sell a Product in the Territory; but excluding (i) Third Party drug master files with respect to API or Product, (ii) state licenses and (iii) any form of reimbursement approval.

          Section 1.65      “ Regulatory Authority ” means any Governmental Authority involved in granting approvals for the manufacturing, marketing, sale, reimbursement or pricing of pharmaceutical products.

          Section 1.66      “ Retained Contracts ” means any of the Third Party Agreements which Apricus does not timely elect to have assigned to it pursuant to Section 4.4 hereto. For the avoidance of doubt, Retained Contracts exclude the Assigned Agreements.

          Section 1.67      “ Sales and Marketing Expenses ” means the following Apricus expenses for Promotion, distribution and sale of the Product in the Territory: (a) all out-of-pocket costs for Samples incurred as well as all out-of-pocket costs for Sample warehousing and distribution directly related to the Product (excluding Sample costs paid or reimbursed by PediatRx), (b) all out-of-pocket costs for Promotional Materials and training materials directly related to the Product (excluding Promotional Materials and training materials costs paid or reimbursed by PediatRx), (c) all out-of-pocket costs for sales training meetings to the extent directly attributable to the Product, (d) all out-of-pocket costs for the purchase of Prescriber Data directly related to the Product (including any prescriber data for competitive products), (e) all out-of-pocket costs associated with market research, advisory boards, speaker programs, trade shows and “lunch and learns” and other outreach programs directly related to the Product, (f) all costs related to scientific liaisons, national and regional account managers and product managers directly related to the Product, (g) Medical Affairs Expenses, (h) all out-of-pocket costs associated with warehousing directly related to the Product from the point of completion of Manufacture to the time the Product is turned over to a carrier for delivery, (i) all out-of-pocket handling and transportation costs to fulfill orders directly related to the Product (excluding such costs, if any, treated as a deduction in the definition of Net Sales), including outbound transportation costs and costs of moving goods from a manufacturing point to a warehouse at another location from which it is ultimately to be distributed to a Customer), (j) all out-of-pocket costs associated with customer services directly related to the Product, including order entry, billing and adjustments, inquiry and credit and collection, order entry, billing, shipping, credit and collection, but in any case, not including any costs or expenses which are reimbursed by any Third Party, and (k) all other out-of-pocket costs and expenses of Apricus directly relating to Promotion, distribution or sale of Product in the Territory. In the case of Product voucher, coupon, loyalty card or other co-pay assistance programs, all out-of-pocket costs of Apricus associated with such programs shall be treated as Sales and Marketing Expenses to the extent not otherwise deducted in calculating Net Sales.

          Section 1.68      “ Sales Representatives ” means sales representatives employed by Apricus or PediatRx, or a Third Party engaged by Apricus or PediatRx, to Detail the Product, who have been trained and equipped to Detail the Product in accordance with this Agreement.

          Section 1.69      “ Samples ” means samples of a Product that are not for sale to be distributed by a party solely in connection with the performance of Details or as otherwise legally permissible under the rules, guidelines and policies applicable to any Professional.

          Section 1.70      “ Serious Adverse Drug Experience ” means any Adverse Drug Experience, including those subject to expedited reporting as defined in the regulations cited below, that is fatal or life-threatening, requires hospitalization or prolongation of existing hospitalization, results in persistent or significant disability or incapacity, is a congenital anomaly/birth defect, or is of comparable medical significance or any other event which would constitute a “serious” Adverse Drug Experience pursuant to the terms of 21 C.F.R. 314.80 or 312.32.

          Section 1.71      “ Serious Adverse Drug Experience Report ” means any Adverse Drug Experience Report that involves a Serious Adverse Drug Experience.

          Section 1.72      “ Subcontracting ” means subcontracting or sublicensing a party’s rights or obligations hereunder (a) pursuant to which a Third Party will Manufacture the Product; or (b) pursuant to which a Third Party Sales Representative is engaged to Promote the Product. “ Subcontractor ” means the Third Party with whom the Subcontracting agreement is entered into.

          Section 1.73      “ Technology ” means all pharmacological, toxicological, preclinical, clinical, technical or other information, data and analysis and know-how relating to the registration, Manufacture, use, importation, distribution or sale of a Product in the Territory and all proprietary rights relating thereto Controlled by PediatRx or its Affiliates during the Term.

          Section 1.74      “ Term ” has the meaning set forth in Section 7.1.

          Section 1.75      “ Term Sheet ” has the meaning set forth in the Preamble to this Agreement.

          Section 1.76      “ Territory ” means the United States, including its territories and possessions and Puerto Rico.

          Section 1.77      “ Therapex ” means Therapex, a division of E-Z-EM Canada, Inc., a subsidiary of E-Z-EM, Inc. or any Person which succeeds to the obligations of Therapex under the Therapex Agreement.

          Section 1.78      “ Therapex Agreement ” means that certain Manufacturing Agreement, dated as of August 30, 2010, by and between PediatRx and Therapex, as amended from time to time after the Effective Date in accordance with the terms of this Agreement.

          Section 1.79      “ Third Party ” means any Person other than Apricus or PediatRx or their respective Affiliates.

          Section 1.80      “ Third Party Agreements ” means the agreements listed in Schedule B.

          Section 1.81      “ United States Bankruptcy Code ” means the U.S. Bankruptcy Code, 11 U.S.C. §§ 101, et seq.

ARTICLE 2
PRODUCT PROMOTION AND SALES

          Section 2.1       Overview

          During the Term, subject to the terms and conditions of this Agreement (including Section 2.10, Section 2.11, PediatRx’s right to Commercialize the Product as set forth in Section 2.12, and Article 5), Apricus shall have the exclusive right to Commercialize the Product in the Exclusive Area and the non-exclusive right to Commercialize the Product in the Non-Exclusive Area in compliance with Legal Requirements. PediatRx shall have the right to Commercialize the Product in the Non-Exclusive Area in accordance with the terms and conditions of this Agreement.

          Section 2.2      Representations to Customers

          Neither party will make any false or misleading representations to Professionals, customers or others regarding the other party or the Product and will not make any representations, warranties or guarantees with respect to the specifications, features or capabilities of the Product that are not consistent with the applicable then-current FDA approved labeling and package insert (except to the extent permitted by Legal Requirements).

          Section 2.3       Staffing; Training

          Each party shall be solely responsible for all costs and expenses of compensating its Sales Representatives. Each party shall periodically provide training to each of its Sales Representatives, and shall update its training materials as appropriate.

          Section 2.4      Promotional Materials; Educational Materials

                    (a)      Apricus shall, at its own expense (which for clarity shall be included as Sales and Marketing Expenses hereunder), have the right to create, develop, produce or otherwise obtain, and utilize sales, promotional, advertising, marketing, educational and training materials (“ Promotional Materials ”) to support the Promotion for the Product. Such Promotional Materials may include, by way of example, detailing aids; leave behind items; journal advertising; educational programs; formulary binders; appropriate reprints and reprint carriers; product monographs; patient support kits; convention exhibit materials; direct mail; market research survey and analysis; training materials; and scripts for telemarketing and teleconferences.

                    (b)      Each party shall provide to the other party for review a prototype of any Promotional Materials created by such party. The other party shall notify the submitting party of any objections it has to such prototype and the basis therefor as soon as reasonably practicable, but no later than ten (10) business days following its receipt thereof. If there are objections related to regulatory concerns which may require additional investigation or clarification, such investigation or clarification will occur no later than an additional five (5) business days. Failure by the other party to notify the submitting party of any objections to the proposed prototype within such period shall constitute approval by the other party. The submitting party shall modify such Promotional Materials to the extent necessary to resolve any objections timely and reasonably made by the other party to such Promotional Materials on the grounds that such Promotional Materials are inconsistent with any Legal Requirements, and shall in good faith consider any of the other party’s other objections. The final version of the Promotional Materials approved by the submitting party (which shall include such modifications as are required to address concerns timely and reasonably made by the other party on the grounds that such Promotional Materials are inconsistent with Legal Requirements) may be produced in quantity, and Apricus shall provide PediatRx with the requisite number of copies of the final printed form in a timely manner so as to allow PediatRx to satisfy its obligation to file such materials with the FDA prior to the first use of the Promotional Materials, such filing and regulatory review for Apricus Promotional Materials to be at the expense of Apricus, but includible as Sales and Marketing Expenses or General and Administrative Expenses. PediatRx will make such filing with the FDA within two (2) business days after the date Apricus provides PediatRx with such copies of the final version of such Promotional Materials. In furtherance of the foregoing provisions of this Section 2.4(b), the parties will endeavor to cooperate to facilitate the timely and efficient review of Promotional Materials and resolution of any disputes or disagreements related to such Promotional Materials, with a view to containing both parties’ internal personnel resources and external costs associated with the creation, review and approval of such Promotional Materials. In the event both parties are Promoting the Product, they shall appoint appropriate representatives to meet on a regular basis in order to coordinate Promotional Materials to be used by the parties so as to ensure consistent promotional positioning and messaging across each party’s Promotional efforts. In the event the appointed representatives are unable to agree as to any matter, the matter shall be resolved by agreement of senior management of the parties.

                    (c)      Apricus shall own all copyrights to all Apricus Promotional Materials that are created by Apricus during the Term of this Agreement in connection with and to the extent relating to the Promotion of the Product.

          Section 2.5       Medical Inquiries

                    (a)      Lash Group or another designee of Apricus shall handle medical inquiries and all costs under the Lash Group Contract or other Apricus contract for medical inquiries will be assumed by Apricus and included as Sales and Marketing Expenses or General and Administrative Expenses. Such costs have been in the range of from $250 to $800 per month.

                    (b)      The parties acknowledge that each may receive direct requests for medical information concerning the Product from members of the medical and paramedical professions and consumers regarding the Product.

                    (c)      Any such requests will be referred to Apricus’ medical department, and Apricus shall be solely responsible for responding to such requests in compliance with all applicable Legal Requirements and the Product ANDA. Apricus shall be obligated for any costs associated with its responsibilities pursuant to this Section 2.5.

          Section 2.6      Trademarks

          Subject to this Section 2.6 and to applicable Legal Requirements, Apricus shall have the right to use the Apricus Trademarks, and include the name “Apricus Pharmaceuticals USA, Inc.” or any variation thereof in connection with its Promotion activities and any materials related thereto. Apricus recognizes that (i) the PediatRx Trademarks are owned by PediatRx, as well as the domain name “Granisol.net” (the “ Domain Name ”); and Apricus shall not acquire and shall not claim any right (except as expressly granted under Section 2.7 or Section 2.13), title or interest in or to the PediatRx Trademarks or the Domain Name by virtue of the rights granted under this Agreement or through Apricus’ use of the PediatRx Trademarks or Domain Name, and the parties agree that, as between the parties, all goodwill and improved reputation associated with the PediatRx Trademarks and Domain Name arising out of the use thereof by Apricus and its Affiliates, sublicensees and other Subcontractors shall inure to the benefit of PediatRx. Apricus shall not use the PediatRx Trademarks upon, in connection with, or in relation to, the Product, or any packaging, labels, containers, advertisements and other materials related thereto, except as is reasonable in connection with the Promotion, importation, distribution and sale of the Product in the Territory. Apricus shall as soon as practicable notify PediatRx of any apparent infringement by a Third Party of any of the PediatRx Trademarks of which Apricus becomes aware. Apricus agrees to reasonably cooperate with PediatRx to enable PediatRx to verify that the use by Apricus of the PediatRx Trademarks is consistent with the requirements in this Agreement. At no time shall Apricus remove or minimize the PediatRx name or Trademarks already contained in any packaging materials, labels, containers, advertisements and any other materials related thereto.

          Section 2.7      License Grant

                    (a)      During the Term, subject to the terms and conditions of this Agreement, PediatRx hereby grants to Apricus and its Affiliates, and Apricus and its Affiliates hereby accept, a non-exclusive right and license under the PediatRx Trademarks and the Technology to Commercialize the Product in the Territory, on the terms and subject to the conditions set forth herein. Notwithstanding the foregoing, Apricus’ right to Commercialize the Product shall be exclusive with respect to the Exclusive Area.

                    (b)      Apricus shall have the right to grant sublicenses to, or Subcontract with, Third Parties; provided that (i) all such sublicenses and subcontracts shall be consistent with the terms of this Agreement and (ii) Apricus shall be responsible for the compliance by such sublicensees and subcontractors with the terms of this Agreement.

          Section 2.8      Transfer of Product Information

          PediatRx shall provide Apricus with the following Technology as promptly as practicable after the Effective Date:

                    (a)      Copies of current manufacturing, stability and release testing documentation in the possession and Control of PediatRx for Product Manufactured for the Territory, which shall include, to the extent in the possession and Control of PediatRx, representative master and executed manufacturing batch records, test methods, stability protocols, stability results, manufacturing guides, conformance guides and specifications for the Product; and

                    (b)      To the extent not included in the materials provided to Apricus pursuant to Section 2.8(a), all other reports, data and information in the possession and Control of PediatRx relating to the Product reasonably requested by Apricus as necessary or useful for Apricus to exercise its rights hereunder or comply with Legal Requirements.

          PediatRx shall cooperate and consult with Apricus regarding the Technology transferred pursuant to this Section 2.8 as reasonably requested by Apricus and at no additional cost to Apricus.

          Section 2.9       Limitation on Other Co-Promotion Activities

          PediatRx shall not license to any Third Party any co-promotion rights in the Non-Exclusive Area for *** (***) years from the Effective Date.

          Section 2.10      Retention of Rights

                    (a)      PediatRx hereby expressly reserves the exclusive right to use, and to grant licenses under the PediatRx Corporate Trademark in the Territory for any purpose other than the Manufacture, Promotion, importation, distribution or sale of Product in the Exclusive Area.

                    (b)      Except as expressly set forth herein, nothing contained herein shall be deemed to grant Apricus, by implication, a license or other right or interest in any patent, trademark or other intellectual property right of PediatRx or its Affiliates. Except as expressly set forth herein, nothing contained herein shall be deemed to grant PediatRx, by implication, a license or other right or interest in any patent, trademark or other intellectual property right of Apricus or its Affiliates.

          Section 2.11      Negative Covenants

                    (a)      Apricus, on behalf of itself and its Affiliates, hereby covenants not to use and not to permit or cause any licensee, sublicensee or other Third Party to use, any PediatRx Trademark or Technology in the Territory, for any purpose other than as expressly authorized in this Agreement.

***Confidential Information, indicated by [***], has been omitted by this filing and filed separately with the Securities and Exchange Commission.

                    (b)      PediatRx, on behalf of itself and its Affiliates, hereby covenants not to use, and not to permit or cause any licensee, sublicensee or other Third Party to use (i) any PediatRx Product Trademark in the Territory, provided that PediatRx and its representatives and contractors may use the PediatRx Product Trademark in the Territory in accordance with this Agreement or (ii) any Apricus Trademark for any purpose other than as expressly authorized in this Agreement.

          Section 2.12      PediatRx Co-Promotion in the Non-Exclusive Area

                    (a)      PediatRx may elect, at any time during the Term, to market and have the PediatRx Sales Force Detail the Product directly to Professionals within the Non-Exclusive Area.

                    (b)      On an annual basis, each party will submit to the other party a call plan setting forth the Details to be performed by its Sales Force in the Non-Exclusive Area. Apricus and PediatRx shall coordinate each of their Sales Forces so as not to duplicate contacts in a zip code area to Professionals, pharmacists, other healthcare decision makers, etc. unless otherwise agreed.

                    (c)      Each party may purchase from the other party, at the other party’s actual out-of-pocket costs of reproduction and shipment, copies of any Promotional Materials created by the other party for use by its Sales Force, to the extent limited to Product. Upon each party’s request, the other party will provide electronic copies of such Promotional Materials created by or for it, which Promotional Materials may be modified for use by the requesting party; provided that any modification must be approved as described in Section 2.12(d) below.

                    (d)      PediatRx may create and develop its own Promotional Materials for use by the PediatRx Sales Force (“ PediatRx Promotional Materials ”). Prior to the use thereof, PediatRx shall provide to Apricus a prototype of any PediatRx Promotional Materials for review and approval in accordance with Section 2.4(b) above. The PediatRx Promotional Materials will not contain any Apricus Trademark unless such materials are approved by Apricus. In furtherance of the foregoing provisions of this Section 2.12(d), the parties will endeavor to cooperate to facilitate the timely and efficient review of PediatRx Promotional Materials and resolution of any disputes or disagreements related to Promotional Materials, with a view to containing both parties’ internal personnel resources and external costs associated with the creation, review and approval of the PediatRx Promotional Materials.

                    (e)      Each Party shall be solely responsible for costs or expenses related to any activities of the its Sales Force, including costs for its Promotional Materials, training or training materials or the purchase from the other Party of Promotional Materials for its Sales Force.

                    (f)      Each Party will cause its Sales Force and employees and agents acting on its behalf to comply with this Agreement and all applicable Legal Requirements in connection with the Promotion of the Product. It is understood, and each Party agrees, that it will be accountable for the acts or omissions of its employees and agents.

                    (g)      Each Party will not make any false or misleading representations to Professionals, customers or others regarding the other Party or the Product and will not make any representations, warranties or guarantees with respect to the specifications, features or capabilities of the Product that are not consistent with the applicable then-current FDA approved labeling, package insert or other documentation accompanying or describing the Product.

          Section 2.13      Product Website

          Subject to the terms and conditions of this Agreement, PediatRx hereby grants to Apricus and its Affiliates, and Apricus and its Affiliates hereby accept, a non-exclusive, royalty-free right and license to use the Domain Name and the registration thereof, including the trademark and service mark “granisol.net” and any intellectual property rights relating thereto, and all rights to use and access, and with the approval of PediatRx pursuant to Section 2.4(b) above, modify, change or replace such content of the site associated to the Domain Name (the “ Product Website ”), to the extent any such trademark, service mark, or intellectual property rights exist as of the Effective Date or during the Term, solely in connection with Promoting and selling the Product in the Territory, on the terms and subject to the conditions set forth herein. PediatRx shall retain the Domain Name registration and the hosting provider account for the Domain Name. Any out-of-pocket costs associated with maintaining and modifying the Product Website shall be paid by Apricus but included in the Sales and Marketing Expenses for Apricus.

ARTICLE 3
CLINICAL AND REGULATORY AFFAIRS; DEVELOPMENT

          Section 3.1      Regulatory Approvals

          PediatRx shall properly maintain and keep current and active all Regulatory Approvals for the Product that are in effect in the Territory as of the Effective Date. PediatRx’s commercially reasonable expenses for state licensing renewals and processing provided by Beckloff Associates to the extent directly attributable to the Product sold by Apricus and its Affiliates will be reimbursed by Apricus, with such expenses being includible as Sales and Marketing Expenses or General and Administrative Expenses. PediatRx shall consult with Apricus regarding any proposed supplement, amendment or alteration to the Regulatory Approvals and shall consider Apricus’ comments in good faith; provided that as the holder of the Product ANDA, PediatRx shall have final decision-making authority as to whether and how to supplement, amend or otherwise alter the Regulatory Approvals for the Product in the Territory. PediatRx shall not have the right to, and hereby covenants that it will not, transfer or assign any Regulatory Approval for the Product to any Third Party, without Apricus’ prior written consent (which Apricus may withhold in its sole discretion), except in conjunction with a permitted assignment of this Agreement made in accordance with Section 14.9.

          Section 3.2      Compliance with Regulatory Requirements

          Unless otherwise required by law or expressly required by this Agreement, including Section 3.1 and Section 3.4, PediatRx will be responsible for complying with all regulatory requirements and maintaining all contacts with Governmental Authorities with respect to the ownership of the Product ANDA, including maintaining and updating of the Product ANDA, the reporting of any Adverse Drug Experiences to the FDA and the filing of Promotional Materials with the FDA.

          Section 3.3       Advertising and Promotion Compliance

          In performing its duties hereunder, each party shall, and shall cause the Apricus Sales Force or PediatRx Sales Force, as applicable, and its employees and agents to, comply with all Legal Requirements, including the FDA’s regulations and guidelines concerning the advertising of prescription drug products, OPDP’s promotional guidelines, the PhRMA Code on Interactions with Healthcare Providers, the Prescription Drug Marketing Act of 1987, as amended, and the rules and regulations promulgated thereunder, equal employment, non-discrimination and federal and state anti-kickback Legal Requirements, and Legal Requirements with respect to submission of false claims to governmental or private health care payors, which may be applicable to the activities (including the warehousing, handling and distribution of Samples) to be performed by such party hereunder. None of Apricus, PediatRx, the Apricus Sales Force, the PediatRx Sales Force and either party’s employees and agents shall offer, pay, solicit or receive any remuneration to or from Professionals in order to induce referrals of or purchase of the Product in violation of applicable Legal Requirements, including without limitation federal or state anti-kickback Legal Requirements. The Apricus Sales Force and the PediatRx Sales Force shall have been trained in compliance with applicable Legal Requirements prior to engaging in Promotion of the Product.

          Section 3.4      Communications with Governmental Authorities

                    (a)      All communications with Governmental Authorities concerning the Product and arising from PediatRx’s ownership of the Product ANDA shall be the responsibility of PediatRx. PediatRx shall consult with Apricus regarding any such communication and shall consider in good faith Apricus’ comments.

                    (b)      Each party shall within two (2) business days after receipt of any communication from the FDA or from any other Regulatory Authority in the Territory relating to the Product, forward a copy of the same to the other party and reasonably respond to all inquiries by the other party relating thereto. If a party is required by law to communicate with the FDA or with any other Regulatory Authority in the Territory relating to the Product, then such party shall so advise the other party within two (2) business days and provide the other party in advance with a copy of any proposed written communication with the FDA or any other Regulatory Authority in the Territory as soon as reasonably practicable after preparation. Each party shall, to the extent practicable in light of applicable Legal Requirements, have a period of at least ten (10) days (or such shorter period as is practicable under the circumstances) to provide comments to the other party on such communications, which comments the other party shall use commercially reasonable efforts to incorporate into its final communications to the extent such comments are reasonable and consistent with applicable Legal Requirements.

          Section 3.5      Product Complaints

          Each party shall refer any oral or written Product Complaints which it receives concerning the Product to the other party within five (5) days of its receipt thereof; provided that all complaints concerning suspected or actual Product tampering, contamination or mix-up shall be delivered within twenty-four (24) hours of its receipt thereof. Neither party shall take any other action in respect of any such complaint without the consent of the other party unless otherwise required by Legal Requirements. The parties will collaborate to resolve any Product Complaints. All Product Complaints shall be handled under the SOPs in place with ICS and the Lash Group or such other third party retained to service Product Complaints.

          Section 3.6       Adverse Drug Experience Reports

                    (a)      Each party shall notify the other: (i) of all Serious Adverse Drug Experience Reports within forty-eight (48) hours of the time such Serious Adverse Drug Experience Report becomes known to such party (including its employees); and (ii) of all Adverse Drug Experience Reports within five (5) days of the time such Adverse Drug Experience Report becomes known to such party (including its employees).

                    (b)      Responsibility for maintaining the Adverse Drug Experience Report database shall be retained by PediatRx. PediatRx shall maintain the Adverse Drug Experience Report database in accordance with all applicable Legal Requirements through its contract with ICS and the Lash Group (as may be assigned to Apricus pursuant to Section 4.4) . PediatRx shall report Adverse Drug Experience Reports, Periodic Adverse Drug Experience Reports (PADER) and Periodic Safety Update Reports (PSUR) in accordance with International Conference on Harmonization Clinical Safety Data Management: Periodic Safety Update Reports for Marketed Drugs (ICH E2C) and 21 C.F.R. § 314.80.

          Section 3.7       Recalls or Other Corrective Action

                    (a)      PediatRx shall have final decision-making authority with respect to any recall (including recall of packaging and promotion materials), market withdrawals or any other corrective action related to the Product. PediatRx shall promptly consult with Apricus with respect to any such actions proposed to be taken by PediatRx (and in all events prior to the taking of such actions), including all actions that are reasonably likely to result in a material adverse effect on the marketability of the Product in the Territory. At PediatRx’s request, Apricus shall provide assistance to PediatRx in conducting such recall, market withdrawal or other corrective action (including retrieving Samples distributed by the Apricus Sales Force to Professionals). As the ANDA holder, PediatRx shall be responsible for all communications with the FDA with respect to any Product recall, market withdrawal or other corrective action; provided that (i) PediatRx shall consult with Apricus prior to submitting any related documentation to the FDA, (ii) PediatRx shall provide Apricus with copies of all communications received from or submitted to the FDA with respect to any such recall, market withdrawal or other corrective action within two (2) business days after receipt or submission thereof and (iii) Apricus shall be permitted to accompany PediatRx and take part in any meetings or discussions with FDA with respect to any such recall, market withdrawal or other corrective action.

                    (b)      With respect to any recall, market withdrawal or corrective action with respect to Product, (i) PediatRx shall be responsible for the out-of-pocket costs associated with such recall, market withdrawal or corrective action to the extent relating to Product Manufactured by it, and (ii) Apricus shall be responsible for the out-of-pocket costs associated with such recall, market withdrawal or corrective action to the extent relating to Product Manufactured by it. To the extent the recall, market withdrawal or corrective action relates to Product Manufactured by both parties, the responsibility for out-of-pocket costs associated therewith shall be equitably apportioned between the parties based on the relative amount of Product affected that was Manufactured by each party. For clarity, any unreimbursed costs incurred by Apricus under this Section 3.7(b) may be included by Apricus as COGS, Sales and Marketing Expenses or General and Administrative Expenses, as applicable.

          Section 3.8       Assistance

          Each party agrees to provide to the other all reasonable assistance and take all actions reasonably requested by the other party that are necessary to enable the other party to comply with any Legal Requirement applicable to the Product in the Territory. Apricus shall pay any out-of-pocket costs associated with the activities contemplated by this Article III with respect to Product sold by Apricus and its Affiliates, which shall be included in Sales and Marketing Expenses or General and Administrative Expenses for Apricus, including payments under relevant Assigned Agreements and costs of pharmacovigilance.

ARTICLE 4
MANUFACTURING AND SUPPLY; SALES

          Section 4.1       Manufacturing Transfer

                    (a)      The Assigned Agreements relating to the manufacture and supply of the Product and the API (each, an “ Assigned Manufacturing Agreement ”) shall be assigned by PediatRx in their entirety to Apricus, and shall be assumed in their entirety by Apricus promptly following (but in no event later than five (5) business days following) the Effective Date, pursuant to an Assignment and Assumption Agreement to be negotiated in good faith by the parties.

                    (b)      Promptly after the Effective Date, PediatRx shall notify each counterparty to any Assigned Manufacturing Agreement that such Assigned Manufacturing Agreement has been assigned to, and assumed by, Apricus, and shall authorize and instruct such counterparty to grant Apricus access to all technical, regulatory and other information and materials relating to the Product that are then in the possession of such counterparty in accordance with the applicable Assigned Manufacturing Agreement. Apricus shall be entitled to consult with such counterparty’s technical personnel with respect to Manufacturing activities as set forth in such Assigned Manufacturing Agreement.

          Section 4.2       Booking of Sales

          Apricus or its Affiliates shall book its sales of the Product, less the PediatRx-Generated Sales. PediatRx or its Affiliates shall book its sales of the Product, less the Apricus-Generated Sales.

          Section 4.3      Purchase of Samples by PediatRx

                    (a)      This Section 4.3 shall apply only in the event that PediatRx elects to Detail Product in the Non-Exclusive Area in accordance with Section 2.12.

                    (b)      Apricus shall provide or cause to be provided to PediatRx, as ordered by PediatRx hereunder, Apricus-Manufactured Samples to be distributed by PediatRx solely in connection with the performance of Details or as otherwise required by the rules, guidelines and policies applicable to any Professional.

                    (c)      At least *** (***) days prior to the beginning of each Agreement Quarter ending after PediatRx’s election to Detail Product in the Non-Exclusive Area, PediatRx shall submit to Apricus a written non-binding forecast by month of the number of units of Apricus-Manufactured Samples for the *** (***) month period beginning with such Agreement Quarter. Such Apricus-Manufactured Sample forecast provided by PediatRx shall be consistent with Apricus’ Third Party Product supply agreements then in effect (the relevant provisions of which shall be provided to PediatRx upon PediatRx’s request). PediatRx shall place binding orders with Apricus for Apricus-Manufactured Samples, in a mutually agreeable format, to the same extent as Apricus is required to place binding orders for Apricus-Manufactured Samples with its Third Party suppliers.

                    (d)      PediatRx acknowledges and agrees that Apricus-Manufactured Samples will be delivered from the Third Party supplier site, and will be shipped according to the terms for delivery in the Assigned Manufacturing Agreement or successor agreement, and that title to and risk of loss with respect to Apricus-Manufactured Samples will pass to PediatRx as set forth in the Assigned Manufacturing Agreement or successor agreement. PediatRx will be responsible for procuring insurance for the transport of Apricus-Manufactured Samples from the facilities of the Third Party supplier to the shipping address designated by PediatRx in its purchase order. PediatRx shall be responsible for distributing the Apricus-Manufactured Samples to its Sales Representatives in a timely manner. Apricus shall invoice PediatRx for each shipment of Apricus-Manufactured Samples, at Apricus’ out-of-pocket cost, payable within thirty (30) days of the invoice date. PediatRx shall be responsible for securing the return and appropriate disposal of and reconciling existing Sample inventories from discontinued PediatRx Sales Representatives.

                    (e)      Apricus-Manufactured Samples supplied by Apricus to PediatRx shall be used by PediatRx solely in performing Details to Professionals in accordance with this Agreement. Upon its receipt of any Samples, PediatRx shall be solely responsible for accountability and compliance with the PDMA for the PediatRx Sales Force, and other applicable Legal Requirements relating to Samples or the distribution of same by the PediatRx Sales Force, and shall be responsible for adherence by its Sales Representatives to such Legal Requirements.

                    (f) PediatRx or its designee may inspect all shipments of Apricus-Manufactured Samples and accept or reject such Samples to the extent set forth in the applicable Assigned Manufacturing Agreement or successor agreement.

***Confidential Information, indicated by [***], has been omitted by this filing and filed separately with the Securities and Exchange Commission.

          Section 4.4      Third Party Agreements

          For each Third Party Agreement, Apricus shall have seven (7) days after receipt of a complete copy of such Third Party Agreement (for each, an “ Election Date ”) in order to elect by delivery of written notice to PediatRx if such Third Party Agreement shall be assigned by PediatRx to Apricus, subject to Section 14.11. Prior to such Election Date, and following such Election Date if Apricus has elected that such Third Party Agreement be assigned to Apricus, PediatRx shall not amend, assign, delegate, terminate or cause to be terminated such Third Party Agreement or any of its rights or obligations thereunder without the prior written consent of Apricus. Apricus agrees to be responsible for any payments required under any Retained Contract relating to the Manufacture or Commercialization of Product in the Territory, provided that any such payments shall be includible as COGS, Sales and Marketing Expenses or General and Administrative Expenses. PediatRx shall not amend any Retained Contract in a way that adversely effects Apricus or its rights under this Agreement, provided that PediatRx shall have the right to terminate and/or not renew any and all Retained Contracts.

ARTICLE 5
COMPENSATION

          Section 5.1       Up-Front Payments .

          Within *** (***) days after the Effective Date, Apricus shall pay to PediatRx an up-front payment in the amount of *** Dollars ($***).

          Section 5.2      Quarterly Payments .

                    (a)      For PediatRx-Generated Net Sales . During the Term on a quarterly basis, Apricus shall pay to PediatRx the PediatRx-Generated Net Sales for such quarter, less the PediatRx Allocable Costs. For example, if for a given Agreement Quarter, (i) the Allocable Percentage is ***%, meaning that Professionals detailed by PediatRx prescribed ***% of units of Product for that Agreement Quarter, (ii) Net Sales by Apricus and its Affiliates for that Agreement Quarter are $***, (iii) and PediatRx Allocable Costs are $***, the payment to PediatRx required under this paragraph (a) would be: $*** x ***% - *** = $***. The remaining ***% of Net Sales by Apricus and its Affiliates would be utilized in the calculation of Net Operating Income under paragraph (c) below.

                    (b)       For Apricus-Generated Net Sales . During the Term on a quarterly basis, PediatRx shall pay to Apricus the Apricus-Generated Net Sales for such quarter, less the Apricus Allocable Costs. For example, if for a given Agreement Quarter, (i) the Allocable Percentage is ***%, meaning that Professionals detailed by PediatRx prescribed ***% of units of Product for that Agreement Quarter, (ii) Net Sales by PediatRx and its Affiliates for that Agreement Quarter are $***, (iii) and Apricus Allocable Costs are $***, the payment to Apricus required under this paragraph (b) would be: $*** x ***% - *** = $***. The payment of $*** would then be included in the Net Operating Income calculation by Apricus under paragraph (c) below. (For reference purposes only, the financial benefit to be derived by PediatRx for Apricus-Generated Net Sales shall result from the value of payments made by PediatRx to Apricus pursuant to this Section 5.2(b) being included within the definition of Net Operating Income pursuant to Section 1.44(vi) above, which shall result in additional payments by Apricus to PediatRx pursuant to Section 5.2(c) below.)

***Confidential Information, indicated by [***], has been omitted by this filing and filed separately with the Securities and Exchange Commission.

                    (c)      For Apricus Net Sales . During the Term on a quarterly basis, Apricus shall pay to PediatRx a percentage of Net Operating Income according to the schedule set forth below: