10. CONFIDENTIALITY..........................................................46

    10.1     RESTRICTIONS ON USE.............................................46
    10.2     USE OF OWN INFORMATION..........................................47
    10.3     EXCEPTIONS TO CONFIDENTIALITY...................................47
    10.4     EXCEPTIONS TO NON-DISCLOSURE....................................48
    10.5     DISCLOSURE BY LAW...............................................48
    10.6     SCOPE OF CONFIDENTIALITY........................................49
    10.7     SECURITY OF INFORMATION.........................................49
    10.8     PERSONNEL CONFIDENTIALITY.......................................49
    10.9     RETURN OF CONFIDENTIAL INFORMATION..............................50
    10.10    PUBLICATIONS....................................................50
    10.11    OTHER RIGHTS....................................................50
    10.12    USE OF OTHER PARTY'S NAME.......................................50
    10.13    PRESS RELEASES AND OTHER DISCLOSURES............................50

11. INVENTIONS...............................................................52

    11.1     DISCLOSURE OF INVENTIONS........................................52
    11.2     OWNERSHIP OF INVENTIONS AND INTELLECTUAL PROPERTY RIGHTS........52
    11.3     JOINT INVENTIONS AND JOINT PATENTS..............................52
    11.4     COOPERATION OF EMPLOYEES........................................53

12. PATENTS AND INTELLECTUAL PROPERTY........................................53

    12.1     PATENT RIGHTS...................................................53
    12.2     JOINT PATENT RIGHTS.............................................54
    12.3     FEMPHARM PATENT PROCEEDINGS.....................................55
    12.4     INFRINGEMENT PROCEEDINGS IN THE FIELD...........................55
    12.5     OTHER INFRINGEMENT PROCEEDINGS..................................57

13. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS..............................57

    13.1     WARRANTY........................................................58
    13.2     ADDITIONAL WARRANTIES OF FEMPHARM AND THE ACRUX
              CONTROLLED AFFILIATES..........................................58
    13.3     ADDITIONAL WARRANTIES OF VIVUS..................................62
    13.4     DISCLAIMER OF WARRANTIES........................................62
    13.5     DISCLAIMER OF LIABILITY.........................................63

14. TERM AND TERMINATION.....................................................63

    14.1     TERM............................................................63
    14.2     TERMINATION BY FEMPHARM.........................................63
    14.3     TERMINATION BY VIVUS............................................64
    14.4     NO RELEASE......................................................66

    14.5     CONSEQUENCES OF AGREEMENT TERMINATION...........................66
    14.6     VIVUS TERMINATION OF SPECIFIC PROVISIONS FOR UNCURED BREACH.....70
    14.7     LIMITATION OF TERMINATION FOR BREACH AFTER COMMERCIAL LAUNCH....72
    14.8     TERMINATION FOR FAILURE TO ACHIEVE MONASH AMENDMENT.............73
    14.9     REMEDIES........................................................74

15. GENERAL..................................................................74

    15.1     NOTICES.........................................................74
    15.2     INDEMNIFICATION.................................................75
    15.3     DAMAGES FOR BREACH OF REPRESENTATIONS AND WARRANTIES............77
    15.4     WAIVER..........................................................78
    15.5     SEVERANCE.......................................................78
    15.6     SUCCESSORS AND ASSIGNS..........................................78
    15.7     CONTINUING OBLIGATIONS..........................................78
    15.8     VARIATION.......................................................78
    15.9     APPLICABLE LAW..................................................78
    15.10    DISPUTE RESOLUTION..............................................79
    15.11    DISPUTE REGARDING LICENSE NECESSITY.............................80
    15.12    COUNTERPARTS....................................................81
    15.13    COSTS...........................................................81
    15.14    PAYMENT.........................................................81
    15.15    ENTIRE AGREEMENT................................................81
    15.16    INJUNCTIVE RELIEF...............................................81
    15.17    INDEPENDENT CONTRACTORS.........................................82
    15.18    FORCE MAJEURE...................................................82
    15.19    BANKRUPTCY......................................................82
    15.20    ACRUX DDS AS A PARTY............................................82
    15.21    SURVIVAL OF SUBLICENSES.........................................83

         The accountants appointed under Section 4.8 are not authorised to, and
         will not, disclose to FemPharm any information other than the accuracy
         or inaccuracy of the amounts to be verified and will be required to
         execute a reasonable confidentiality agreement with Vivus and/or the
         sublicensee or Affiliate, as applicable.

4.10     STATEMENT ERRORS

         Should it be established from any report and verification referred to
         in Sections 4.7 and 4.8 that the royalties which should have been paid
         in respect of any Royalty Period to which the report and verification
         relates are more or less than the royalties actually paid then the
         difference will be remitted within ten (10) Business Days:

          (a)  to FemPharm (in the case of the royalty paid being less than that
               which should have been paid);

                                       23

          (b)  to Vivus (in the case of the royalty paid being more than that
               which should have been paid).

4.11     CURRENCY CONVERSION

         If the Territory includes any country outside the United States of
         America, all Net Sales resulting from sales of the Product in countries
         other than the United States of America will be converted into United
         States dollars for purposes of calculating royalties owed under this
         Article 4, by using the arithmetic average of the currency exchange
         rates quoted on each of the last ten (10) Business Days during the
         applicable Royalty Period in the Wall Street Journal (East Coast
         Edition). All payments by Vivus hereunder shall be made in US dollars.

4.12     WITHHOLDING TAXES

         If any taxes, withholding or otherwise, are levied by any taxing
         authority in connection with the accrual or payment of royalties or
         other amounts payable under this Agreement and are obliged to be paid
         or deducted by Vivus then:

          (a)  Vivus will pay such taxes to such taxing authority on behalf of
               FemPharm; and

          (b)  Vivus will remit to FemPharm in full satisfaction of its royalty
               obligations under this Agreement the net amount after reduction
               by the amount of such taxes; and

          (c)  Vivus will deliver to FemPharm promptly following payment written
               evidence of such payment and such other related documentation
               that FemPharm may reasonably require.

5.       CLINICAL DEVELOPMENT
--------------------------------------------------------------------------------
5.1      OVERVIEW OF DEVELOPMENT

         The Parties intend to work cooperatively to pursue development of the
         Product in order to obtain regulatory approval for the use of the
         Product in the Field in the

                                       24

         Territory, using commercially reasonable, diligent efforts in
         accordance with and subject to the terms of this Agreement.

5.2      TRANSFER OF TECHNICAL INFORMATION

         Within sixty (60) days after the Effective Date, FemPharm shall
         transfer to Vivus without charge copies of all existing Licensed
         Know-How, including (to the extent existing) (i) copies of all
         Regulatory Materials and other Know-How developed or acquired in
         connection with the Phase IIb Study, any preceding phase I or II study
         on the Product, or any other clinical or pre-clinical development in
         connection with, or directly applicable to, a Product in the Field,
         whether developed or acquired by FemPharm, any Acrux Controlled
         Affiliate, or others working under authority of such entities; and (ii)
         copies of all material Know-How relating to or used in connection with,
         or relevant to, the manufacturing of Products by FemPharm, any Acrux
         Controlled Affiliate, or others, including, such Know-How as generated
         or used during process development, stability studies, formulation
         development, scale up of manufacturing, production of preclinical and
         clinical product batches, validation studies, development of quality
         assurance/quality control testing, process controls for Products in the
         Field, and related regulatory affairs (all to the extent relating to
         Products in the Field); and all Know-How contained in the DMF or in the
         CMC section of any IND or NDA (or their counterparts in other
         countries) with respect to Products in the Field. Thereafter during the
         term of this Agreement, upon request of Vivus, FemPharm shall transfer
         to Vivus without charge copies of all such previously undisclosed
         Licensed Know-How, if any, including that developed or acquired after
         the Effective Date, and shall use all reasonable efforts to enable and
         assist Vivus in understanding and implementing the Licensed Know-How.
         FemPharm and the Acrux Controlled Affiliates shall use good faith,
         diligent efforts to obtain from each of their other licensees the right
         to disclose to Vivus, its Affiliates and their sublicensees, Know-How
         and Regulatory Materials that are relevant to, or useful for, Products.
         In addition, if requested by Vivus and at Vivus' expense for actual
         reasonable internal time of FemPharm or its Affiliate's time (billed at
         (*)% the applicable employee's salary and benefits), FemPharm shall
         generate and provide to Vivus reasonably promptly a report describing
         in reasonable detail (according to an agreed format) all research and
         development conducted or completed by or under authority of any of
         FemPharm and the Acrux Controlled Affiliates, and the results thereof,
         with respect to MDTS products involving the delivery of testosterone.

                                       25

5.3      CONDUCT OF PHASE IIB STUDY

         As from the Effective Date until the time of transfer of the Phase IIb
         Study to Vivus pursuant to Section 5.4, FemPharm will, at its expense
         (except as otherwise provided below), conduct the development of the
         Product in such trial, in cooperation with and as reasonably directed
         by Vivus. FemPharm shall consult with Vivus and keep Vivus fully
         apprised of the status of, and plans and schedule for, all activities
         related to the Phase IIb Study, including providing reasonable advance
         notice, before proceeding with any filings, meetings, or telephone or
         other discussions with the FDA or similar regulatory authority,
         scheduled or unscheduled, that pertain to the Phase IIb Study, and
         shall give Vivus control of such matters. Vivus will provide FemPharm
         reasonable assistance and cooperation in conducting such trial, through
         the time of transfer to Vivus, and such development work will be
         managed and supervised by the Development Committee. If Vivus decides
         to modify the Phase IIb Study, then Vivus will be responsible to pay
         FemPharm, quarterly in advance, any extra costs that Vivus requires
         FemPharm incur as a result of such modifications, including fully
         burdened full time equivalent (FTE) labour costs of scientific,
         clinical and management personnel at FemPharm and the Acrux Controlled
         Affiliates that Vivus requires be added due to such modification, but
         only for that portion of the FTE that is additional and required by
         Vivus to be dedicated to performance of the Phase IIb Study. For
         purposes of this Agreement, FemPharm's fully burdened FTE rates shall
         be (*)% of the employee's salary and benefits (or in the case of a
         contractor, (*)% of the cash compensation paid to the contractor),
         calculated in accordance with reasonable accounting principles,
         consistently applied and in accordance with a budget approved by the
         Development Committee. Except to the extent otherwise expressly set
         forth in this Agreement, however, FemPharm shall be solely responsible
         for, and Vivus shall have no obligation to reimburse, the costs and
         expenses (i) associated with completing the Phase IIb Study (as
         currently planned), including for preparation of the final report and
         analysis, and the report to be delivered to Vivus under Section 5.2,
         (ii) for any adverse event reporting that FemPharm or an Acrux
         Controlled Affiliate is required to perform, or (iii) associated

                                       26

         with FemPharm otherwise fulfilling its obligations under this
         Agreement, or conducting or completing any other research, development,
         or other work by or on behalf of any of FemPharm and the Acrux
         Controlled Affiliates.

5.4      TRANSFER OF DEVELOPMENT RESPONSIBILITY

         FemPharm will transfer and assign full regulatory and clinical
         responsibility for the Product in the Field in the Territory, including
         the IND, to Vivus, provided that the transition of the Phase IIb Study
         shall be made promptly upon request by Vivus, according to a schedule
         reasonably specified by Vivus. After full transfer of responsibility to
         Vivus, FemPharm's involvement will be as set forth below.

5.5      DEVELOPMENT RESPONSIBILITIES

         Other than FemPharm's conduct of the ongoing Phase IIb Study in
         accordance with Section 5.3 and except as otherwise determined by the
         Parties, Vivus will be solely responsible for conducting, at its own
         expense, all activities relating to the clinical development,
         regulatory approval and commercialization of the Product in the
         Territory, using diligent, commercially reasonable efforts, provided
         that both Parties will use such efforts to perform their
         responsibilities to achieve the targets set forth in the Development
         Plan. Vivus will pay to Fempharm, prior to the beginning of a calendar
         quarter, an amount equal to the FemPharm expenses in the approved
         budget in the Development Plan for such quarter, including payments to
         third parties and fully burdened FTE costs of labour associated with
         work at FemPharm and its Affiliates pursuant to this Agreement ((*)% of
         salary and benefits, plus any out of pocket expenses provided for in
         the Development Plan). FemPharm will maintain reasonably detailed
         records of the time expended and work performed in the development and
         will provide copies and a summery of such records, and a reconciliation
         of expenditures, for each such quarter to Vivus within fifteen (15)
         Business Days of the end of the quarter. The actual expenditure versus
         budget for the previous quarter will be reconciled in the payment from
         Vivus to Acrux for the following quarter or refunded to Vivus, as Vivus
         requests. Vivus shall not be required to reimburse any cost or
         expenses, other than those set forth in the Development Plan, except to
         the extent approved by Vivus in advance in writing. Vivus shall not be
         required to develop more than one Product at a time, and shall have no
         obligation to develop another Product in the Territory after a
         marketing approval of a Product in the Field has been obtained in the
         Territory.

                                       27

5.6      DEVELOPMENT COMMITTEE

         Within thirty (30) days of the Effective Date, the Parties will
         establish a committee to review and discuss the development of the
         Product (the "Development Committee"), comprising two (2) members of
         FemPharm's (or the Acrux Controlled Affiliate's) staff nominated by
         FemPharm and two (2) members of Vivus' staff nominated by Vivus. At
         least one member appointed by each Party shall have appropriate
         technical credentials, experience and knowledge and ongoing familiarity
         with, in the case of Vivus, the development under this Agreement and,
         in the case of FemPharm, any pre-clinical and clinical development of
         Product by FemPharm or the Acrux Controlled Affiliate, as well as the
         Licensed Intellectual Property and the development and use thereof. If
         relevant Product development is being performed by an Acrux Controlled
         Affiliate, then Vivus shall have the right to require that at least one
         of FemPharm's members be an employee of the Acrux Controlled Affiliate
         who is involved in such development or, in the alternative, to require
         that such an employee otherwise attend the Development Committee
         meetings. Each Party will give the other written notification
         concerning its staff members who are nominated to serve on the
         Development Committee. Subject to the foregoing, either Party may
         replace any of its members on the Development Committee by written
         notice. Additionally, Vivus shall be entitled to have representatives
         of its sublicensees attend the meetings as it considers appropriate.
         The Development Committee is responsible for review and approval of the
         Development Planand is additionally intended to provide a forum to:

          (a)  Enable Vivus to obtain scientific, clinical and regulatory input
               and data from FemPharm relating to development of the Product in
               the Territory, including with respect to work that each Party has
               performed in accordance with the Development Plan, and to keep
               Vivus informed regarding the work of FemPharm and the Acrux
               Controlled Affiliates related to Product;

          (b)  keep FemPharm reasonably apprised of the progress and results of,
               and planned activities related to, development of Products in the
               Field in the Territory under the Development Plan, sufficient for
               FemPharm to understand

                                       28

               the general status of the development under the Development Plan
               and nature of any significant issues that Vivus has encountered
               that have caused Vivus to fail to meet the schedule targeted in
               the Development Plan, and to review and approve, as appropriate,
               the Development Plans proposed by Vivus;

          (c)  evaluate the markets of the Product for use in the Field in
               relation to the development strategy for the Product, and adjust
               the Development Plan appropriately based thereon; and

          (d)  foster a cooperative relationship between the Parties regarding
               activities under this Agreement and the other activities of
               FemPharm and the Acrux Controlled Affiliates with respect to
               Product.

         To the extent requested by the Steering Committee, the Development
         Committee will keep the Steering Committee informed about the status of
         the activities conducted by the Development Committee pursuant to this
         Agreement. The Development Committee will refer all matters that are to
         be decided by the Development Committee, but for which agreement cannot
         be reached by the Development Committee, to the Steering Committee for
         the Steering Committee's review and final decision on such matters. The
         Development Committee will establish rules for its operation. After
         marketing approval of a Product is obtained, the Development Committee
         shall not be required to meet if there is no significant Product
         development by Vivus to discuss at the applicable time.

5.7      DEVELOPMENT PLANS

         The development of the Product will be conducted by the Parties, each
         using diligent, commercially reasonable efforts to perform its
         responsibilities set forth in the Development Plan. The Parties expect
         that an initial Development Plan will be appended to the Agreement as
         annexure A within one hundred eighty (180) days after the Effective
         Date, reflecting the Parties' understanding and intent at such time of
         the planned Product development activities in the Territory for the
         remainder of then current calendar year (and if mutually desired at the
         time, the following calendar year). The Development Plans proposed by
         Vivus will be reviewed and approved by the Development Committee from
         time to time as appropriate. On an annual basis

                                       29

         commencing in the final calendar year covered by the initial
         Development Plan (no later than October 15 of each year), Vivus will
         prepare and submit to the Development Committee for approval a
         reasonably detailed Development Plan outlining development
         responsibilities for the Product for the upcoming calendar year, it
         being agreed that Vivus may propose updates and revisions to the
         Development Plan more often as Vivus considers appropriate. After
         reviewing the proposal and discussing the development efforts to date,
         the Development Committee will consider changes to and amend the
         Development Plan to reflect revised regulatory and development
         activities designed to meet the goal of obtaining regulatory approval
         for the Product in the Territory in a commercially reasonable time
         frame based on the use of diligent, commercially reasonable efforts by
         Vivus to perform the development. Notwithstanding the foregoing, no
         Development Plan shall be required after marketing approval of a
         Product is obtained except to the extent required by the Development
         Committee.

5.8      BUDGETS

         The Development Committee will prepare and include in the Development
         Plans, a budget that sets forth the estimated costs and expenses
         (including fully-burdened internal labor costs, as described in Section
         5.5 above) that are budgeted to be incurred by FemPharm in conducting
         its responsibilities, if any, for Product development under the
         Development Plan. Each updated Development Plan will include an updated
         budget for FemPharm's responsibilities, if any, to be approved by the
         Development Committee. Vivus shall not be required to reimburse any
         costs or expenses other than those budgeted, unless agreed in advance
         in writing. Each Party shall bear its own costs and expenses associated
         with Committee meetings.

5.9      STEERING COMMITTEE

         Within thirty (30) days of the Effective Date, the Parties will
         establish a steering committee (the "Steering Committee"), comprising
         of one (1) member selected by FemPharm from its senior executives and
         one (1) member selected by Vivus from its senior executives; each
         having responsibility at the respective Party for development of
         Product. Each Party will give the other written notification concerning
         its executive nominated to serve on the Steering Committee. Either
         Party may replace its

                                       30

         member on the Steering Committee with an equivalent senior executive by
         providing written notice of the change to the other Party. A member of
         the Steering Committee cannot simultaneously serve as a member of the
         Development Committee. The Steering Committee will be responsible for
         resolving issues upon which the Development Committee has been unable
         to reach agreement and for serving as the initial means for discussing
         and seeking to resolve any issues or disputes between the Parties
         arising under this Agreement. Members of the Steering Committee will
         consult with members of the Development Committee, as they consider
         necessary, when resolving such issues and disputes and the decision of
         the Steering Committee binds the Development Committee.

5.10     FINAL DECISION

         If the Steering Committee has been unable to reach agreement on any
         issue or matter after diligent discussions, or if such discussions have
         not occurred due to unreasonable delay by FemPharm's representative,
         then the issue will be referred to Vivus to determine the issue, except
         as otherwise provided below. Vivus must consider the issue, having
         considered the views put forward by the Development Committee and the
         Steering Committee. Vivus' decision is final and binding on the Parties
         and the Committees in respect of each such issue and matter, provided
         that the foregoing does not permit Vivus to amend the terms of this
         Agreement, or change the Outside Dates, or otherwise impose an
         obligation on FemPharm, without FemPharm's written consent.

5.11     PROCEDURES OF COMMITTEES

         Each Party will provide the other Party in writing with the name,
         title, e-mail address, telephone number and facsimile number of its
         nominees to each Committee. The Development Committee will meet
         semi-annually during the term of the Development Plan, and more often
         as mutually agreed. The Steering Committee will meet as needed to
         resolve disputes and issues, promptly on the good faith request of
         either Party. All Committee meetings will be at such times agreed to by
         FemPharm and Vivus and will be in person or by telephone or video
         conference.

                                       31

5.12     DECISIONS OF COMMITTEES

         A quorum of the Development Committee at a meeting is two (2)
         representatives of each Party present at such meeting in person or by
         telephone or videoconference. A quorum of the Steering Committee at a
         meeting is one (1) representative of each Party present at such meeting
         in person or by telephone or videoconference. A unanimous vote of the
         members of the Committee present (in person, by telephone or
         videoconference) at such meeting is required to take any action on
         behalf of the Committee. In particular, neither Committee may make a
         binding decision unless a quorum is present. Each Party shall use best
         efforts to cause a quorum to be present at each meeting. No decision of
         a Committee shall be considered binding upon either Party, except to
         the extent set forth in writing and signed by both Parties.
         Notwithstanding anything to the contrary, no approval of the
         Development Committee shall be required for the day to day development
         activities, which shall be controlled by Vivus or its designee.

5.13     CHAIRPERSONS - DEVELOPMENT COMMITTEE

         The chair of the Development Committee will be a Vivus member of the
         Development Committee. Except to the extent otherwise approved by the
         Development Committee, the chair will be responsible for preparing the
         timetable for the meetings, and for preparing the agendas, minutes and
         resolutions, communications with the Steering Committee and other
         communications regarding tasks assigned by the Development Committee.
         All drafts of minutes and resolutions must be approved by the members
         of the Development Committee at the next meeting. The chair does not
         have a second or deciding vote.

5.14     CHAIRPERSONS - STEERING COMMITTEE

         The chair of the Steering Committee will be Vivus' member of the
         Steering Committee. Except to the extent otherwise approved by the
         Steering Committee, the chair will be responsible for preparing the
         timetable for the meetings, and for preparing the agendas, minutes and
         resolutions, communications with the Development Committee and other
         communications regarding tasks assigned by the Steering Committee. All
         drafts of minutes and resolutions must be approved by the members of
         the Steering Committee at the next meeting. The chair does not have a
         second or deciding vote.

                                       32

5.15     MINUTES AND REPORTS

         Each Committee will be responsible for keeping accurate minutes of its
         deliberations or discussions that record all proposed decisions and all
         actions recommended or taken. The chair will provide the Parties with
         the approved minutes of each meeting promptly after approval and, in
         the case of the Development Committee, a written accompanying report
         summarizing, in reasonable detail, the discussions of the Development
         Committee concerning: the status of the Development Plan, of the work
         and progress to date, any issues requiring resolution, and any
         decisions by the Development Committee. All records made by each
         Committee will be available to both Parties.

5.16     GLOBAL DEVELOPMENT COMMITTEE

         At such time as any pre-clinical or clinical development is undertaken
         by or under authority of FemPharm or any Acrux Controlled Affiliates
         anywhere in the world (outside of the Territory) for a Product within
         the Field, the Parties shall establish a joint committee among Vivus,
         FemPharm (and/or the Acrux Controlled Affiliate, as the case may be)
         and any Additional Partner(s) to discuss and coordinate such
         development of such Product (the "Global Development Committee"). To
         the extent there are no Additional Partners, and meetings of the
         Development Committee are ongoing at the time, the function of the
         Global Development Committee set forth in this Section 5.16 shall be
         handled by the members of the Development Committee. The primary role
         of such Global Development Committee shall be to provide a forum for
         communication between Vivus, FemPharm (and/or an Acrux Controlled
         Affiliate(s), as the case may be) and any Additional Partner(s) with
         respect to activities related to the ongoing preclinical and clinical
         development of Products in the Field, other than the work under the
         Development Plan under this Agreement. FemPharm, the Acrux Controlled
         Affiliates, Vivus, and each Additional Partner having rights to Product
         in the Field shall each have at least two (2) representatives on such
         Global Development Committee. Each member of the Global Development
         Committee shall keep the other members fully informed in English
         (subject to Section 5.17) as to the ongoing preclinical and clinical
         development of, and regulatory activities with respect to, such
         Products in the Field. It is understood and agreed, however, that
         formal approval of such Global Development Committee shall not be
         required for any such activities. The Global Development Committee
         shall meet no less frequently than twice each calendar year, or as
         otherwise agreed by the Parties, until the termination or expiration of
         this Agreement and each of Vivus, FemPharm, Acrux Controlled
         Affiliates, and any Additional Parties shall give a full report in
         English (subject to

                                       33

         Section 5.17) at each such meeting of activities relating to the
         particular Products to which such Party, the Controlled Affiliate,
         Acrux Controlled Affiliate or Additional Partner has rights and that is
         undergoing preclinical or clinical development in the Field. Additional
         Partners will participate in such meeting only with respect to Products
         for which they have rights in the Field.

5.17     NO OBLIGATION TO TRANSLATE

         It is understood and agreed that any documents to be provided by
         FemPharm, an Acrux Controlled Affiliate, Vivus, or Additional Partner
         under Section 5.16 may be provided in the language in which such
         documents exist, and FemPharm, the Acrux Controlled Affiliate, Vivus,
         and the Additional Partners shall not be obligated to provide
         translations of such documents (except to the extent such translation
         has already been prepared).

5.18     INFORMATION AND RESULTS

         Except as otherwise agreed by FemPharm in writing, Vivus shall make
         available and disclose to FemPharm, no less often than once every six
         (6) months, in the form selected by Vivus and reasonably acceptable to
         Vivus, and to the extent not previously disclosed, all patient results
         from Clinical Trials by Vivus or its Affiliate on Products under this
         Agreement and all Regulatory Materials prepared by Vivus or its
         Affiliate, including any NDA filed by Vivus or its Affiliate with the
         FDA for a Product under this Agreement. It is understood that
         inadvertent failure to disclose any of the foregoing information will
         not be deemed a breach, provided that Vivus makes the disclosure of
         such information promptly after becoming aware that such information
         has not been disclosed. To the extent Vivus has the right to provide
         such patient results from the Clinical Trials by its sublicensees on
         Products under this

                                       34

         Agreement, Vivus will also make such results available in the manner
         described above. Vivus agrees to use good faith, diligent efforts to
         obtain such rights from its sublicensee. If the NDA is filed by a
         sublicensee Vivus, Vivus will use good faith, diligent efforts to
         obtain the right to disclose the NDA to FemPharm. As between Vivus and
         FemPharm, each Party will own all results and data that it generates,
         subject to any licenses granted under this Agreement to the other
         Party. In particular, as between Vivus and FemPharm, Vivus will own all
         clinical data and results of testing Product generated by Vivus under
         this Agreement (the "Data"). FemPharm and its Affiliates have the right
         to use all Data required to be delivered by Vivus solely in developing
         and seeking regulatory approval of a Product in the Field in Australia
         and New Zealand, and no Data, Regulatory Materials, or other Know-How
         provided by Vivus shall be used for any other purpose, such as without
         limitation for purposes of development or marketing approval for a
         country other than New Zealand and Australia, except as otherwise
         agreed by the Parties in a separate writing. Such Know-How will be
         disclosed to licensees of FemPharm and the Acrux Controlled Affiliates
         for Australia or New Zealand only to the extent the licensee provides
         equivalent disclosure to Vivus and Vivus' sublicensees.

5.19     PRODUCT FAILURE

          (a)  Technology Failures. In the event the Product experiences
               significant technical issues that arise out of or relate to the
               MDTS system, including failure of the MDTS system to deliver
               testosterone, or another Androgen added to the Field in
               accordance with this Agreement, in a manner suitable for
               development or commercialization of a Product in the Field and
               Territory, inadequate physical or chemical stability of any
               portion of the MDTS system, issues arising out of any Acrux
               Penetration Enhancer or any other formulation developed by
               FemPharm and used in an MDTS system, or other issues that
               significantly impact the efficacy, toxicity, safety, or ability
               to obtain approval, then, to the extent that Vivus reasonably
               concludes that the issue would likely prevent the approval of the
               Product in the Field and Territory by the FDA or other
               appropriate regulatory authority or cause the Product to not be
               commercially viable, Vivus shall have the right, subject to the
               terms of Section 5.19(b) below, to select for addition to the
               Field, and development and

                                       36

               commercialization in the Territory under this Agreement as an
               alternate Product, an alternate Androgen (excluding any Androgen
               (other than a Restricted Androgen) for which FemPharm or its
               Affiliate has commenced Clinical Trials, or which FemPharm or its
               Affiliate has licensed to a non-Affiliate third party in a fully
               arms length transaction, in conformance with Section 2.5(b)) or
               alternate configuration of the MDTS technology.

          (b)  Upon selection by Vivus of an alternate Product pursuant to
               Section 5.19(a) above, development and commercialization of the
               selected Product shall be in accordance with the terms of this
               Agreement, including the same milestone payments and, if the
               alternate Product is based upon another Androgen, no greater
               royalties than those set forth in Article 4, except that (i)
               Vivus shall not be required to pay under Section 3.2 any
               milestone payments for achieving a milestone for which a
               milestone payment previously was made for a Product, and (ii) the
               Parties shall discuss in good faith and agree on new, appropriate
               diligence milestones dates in Section 6.2 for such alternate
               Product. If Vivus does not select such alternate Product within
               90 days of Vivus concluding that the issue will prevent the
               original Product from being approved or commercially viable, then
               the Agreement shall terminate under Article 14, with the effects
               of such termination being the same as if terminated by Vivus
               under Section 14.3(d).

5.20     SUBCONTRACTS

         Subject to the provisions of this Agreement, Vivus may subcontract to
         third parties portions of the Development Plan to be performed by
         Vivus, provided Vivus agrees to keep the Development Committee
         reasonably informed of any contract research organizations or other
         contractors hired by Vivus, and provided further that such
         subcontractors are subject to confidentiality provisions consistent
         with the terms of this Agreement, and that Vivus remains responsible
         for all work performed by such subcontractors.

                                       36

5.21     CLINICAL PRODUCT SUPPLY

         Except as otherwise provided in this Agreement, as between the Parties,
         Vivus is solely responsible for all manufacturing of its requirements
         of the Product for use in development throughout the Territory. Vivus
         will use diligent, reasonable efforts to manufacture, or to have its
         designee manufacture, sufficient quantities of the Product meeting all
         applicable specifications and legal requirements in a timely manner for
         use in conducting the development of the Product in the Territory
         pursuant to the Development Plan.

6.       DILIGENCE OBLIGATIONS
--------------------------------------------------------------------------------
6.1      PRODUCT DEVELOPMENT DILIGENCE OBLIGATIONS

         Each Party will use diligent, commercially reasonable efforts to
         perform all the tasks and responsibilities assigned to it in the
         Development Plan in accordance with the development schedule set forth
         in the Development Plan, in an effort to obtain all necessary
         regulatory approvals in the Territory. If Vivus knows that it will be
         unable to meet any timeline or milestone date set out in the
         Development Plan, then it will bring the matter to the attention of
         FemPharm at the next Development Committee meeting or, if Vivus
         reasonably concludes that the delay is caused by a significant issue
         that is likely, unless it can be addressed by additional work, to
         prevent the Product from being approved by the FDA, as soon as
         reasonably practicable. The Development Committee will discuss in good
         faith the causes of any such delays and Vivus' suggested courses of
         action to complete the subject tasks and determine whether to return
         the Product development program to the schedule in the Development Plan
         or to reasonably adjust the schedule. In such process, the Development
         Committee shall extend reasonably the timeline or milestone dates in
         the Development Plan unless the delay was a result of a material breach
         by Vivus of its obligation to use diligent, commercially reasonable
         efforts in the development of the Product.

                                       37

6.2      DILIGENCE PAYMENT FOR DEVELOPMENT DELAYS

         If Vivus (including its Affiliates and sub-licensees) does not achieve
         the milestone event listed in Section 3.2(e) by its Outside Date (as
         defined below), or the milestone event listed in Section 3.2(f) by its
         Outside Date, then within ten (10) Business Days after the end of each
         full month of delay after the applicable Outside Date, Vivus will pay
         to FemPharm (*) percent (* %) of the milestone payment associated with
         the delayed event, until the corresponding milestone payment is paid in
         full, either as a result of meeting the milestone or as a result of
         such diligence payments. As used herein, "Outside Date" means (i) with
         respect to the Section 3.2(e) milestone (*); and (ii) with respect to
         the Section 3.2(f) milestone, (*). To the extent any diligence payments
         are made under this Section 6.2, and the milestone is achieved before
         the corresponding milestone payment has been paid in full, then upon
         achieving the milestone Vivus shall pay the amount of the milestone
         payment, reduced by the amount of payments for that milestone made
         under this Section 6.2. If the Section 3.2(e) or 3.2(f) milestone
         payment is paid in full as a result of this Section 6.2, then such
         payment will be deemed to satisfy the payment obligation under Section
         3.2(e) or 3.2(f), as the case may be, and no further payment shall be
         due or payable as a result of completion of the particular milestone by
         any Product. However, if Vivus' inability to meet a milestone event by
         the applicable Outside Date is caused by delays outside of Vivus'
         reasonable control, that are circumstances described in subsection
         (a)-(d) below, then the Parties will meet and agree on reasonable
         adjustment to the applicable Outside Dates to accommodate such delays,
         provided that Vivus has used diligent, commercially reasonable efforts
         to meet the milestone events. The fact that payments become due or
         payable under this Section 6.2 shall not, itself, necessarily mean or
         suggest that there has been a lack of diligence by Vivus. For purposes
         of this Section 6.2, delays due to the following matters will be
         considered outside of Vivus' control:

          (a)  a change in the specifications of the Product, or in the planned
               development of the Product, required by the FDA or other
               regulatory authority due to the medical, regulatory or scientific
               attributes of the Product, that necessitates additional
               development effort beyond that set forth in the Development Plan
               or contemplated when establishing the schedule in the Development
               Plan;

                                       38

          (b)  other delays in development caused by the FDA, or other
               regulatory authority, that were reasonably unanticipated by
               Vivus; or

          (c)  delays caused by FemPharm not conducting its responsibilities as
               set out in the Development Plan in a timely manner.

          (d)  Additional clinical development work required to be conducted due
               to failure of the studies conducted under the Development Plan to
               show sufficient levels of efficacy or safety, or the data is
               otherwise equivocal.

6.3      REVERSION FOR FAILURE OF DILIGENCE.

         If at any time prior to achieving regulatory approval of the Product
         Vivus fails to use, and/or to continue using, diligent, commercially
         reasonable efforts to develop the Product in the Territory during the
         term of the Agreement, then FemPharm may give Vivus written notice of
         such failure of diligence. If Vivus does not commence within ninety
         (90) days of such notice using diligent, commercially reasonable
         efforts to develop Product in the Territory, then FemPharm may no later
         than ninety (90) days after such failure provide the notice of
         termination of this Agreement, including the license and other rights
         granted to Vivus, under Section 14.2(a), but only if such failure
         constitutes a material breach of this Agreement by Vivus, and subject
         to Section 15.10.

7.       REGULATORY MATTERS
--------------------------------------------------------------------------------
7.1      REGULATORY MATERIALS

          (a)  Vivus is solely responsible for preparing and filing all
               Regulatory Materials for the development of the Product in the
               Territory except as otherwise set forth in this Agreement,
               including carrying out all registration and approval procedures
               necessary to comply with all appropriate laws and regulations
               relating to the manufacture, packaging, import, promotion,
               advertising and sale of the Product in the Territory. All costs
               incurred by Vivus with respect to such registrations and
               approvals will be borne by Vivus. FemPharm has the right to
               review and comment on all such Regulatory Materials prepared by
               Vivus, including application for registration and regulatory
               approval, (to the

                                       39

               extent disclosure of same does not violate confidentiality
               obligations) and to the extent reasonably practicable Vivus will
               consider all such comments provided to Vivus in advance of
               filing. Vivus will use good faith efforts to obtain for FemPharm
               the right to so comment on Regulatory Materials from Product of
               Vivus' sublicensees under the Licensed Intellectual Property.
               Similarly, Vivus has the right to review and comment on all
               Regulatory Materials for Product developed by or under authority
               of FemPharm or an Acrux Controlled Affiliate in the Field outside
               the Territory (to the extent disclosure of same does not violate
               confidentiality obligations, subject to the following), and
               FemPharm, the Acrux Controlled Affiliate, or licensee, as the
               case may be, shall provide Vivus with a reasonable opportunity to
               provide comments and consider all of Vivus' comments provided to
               FemPharm in advance of filing to the extent reasonably
               practicable.

          (b)  FemPharm and its Affiliates and licensees (subject to the last
               sentence of Section 5.18) have a right of reference (at no cost
               to them) to the NDA and other Regulatory Materials filed by Vivus
               for the Product in the Field and Territory, which right of
               reference shall be solely for Australia and New Zealand as part
               of the development, approval and commercialisation of the Product
               in the Field for such countries, and such Regulatory Materials
               shall not be referenced by or under authority of FemPharm or any
               Acrux Controlled Affiliate for any other country or Product.
               FemPharm is solely responsible for carrying out all of its
               registration and approval procedures necessary to comply with all
               appropriate laws and regulations relating to the manufacture,
               packaging, import, promotion, advertising and sale of such
               Product in the Field in Australia and New Zealand. Without
               limiting the other terms of this Agreement, each Party will
               provide the other Party (at no cost to such other Party) with
               reasonable telephone support to respond to such other Party's
               questions regarding the Regulatory Materials and supporting
               materials that it is required to disclose under this Agreement.

                                       40

7.2      RELATIONSHIP WITH REGULATORY AUTHORITIES

         Vivus, as the sponsor of the Regulatory Materials for the Product in
         the Territory, has sole responsibility for interacting with all
         regulatory authorities in the Territory with respect to the Product in
         the Field, including meetings with such regulatory authorities, and
         responding to inquiries of and conducting other communications with
         such regulatory authorities, with regard to such Regulatory Materials
         or the Product. Vivus has sole authority and responsibility for all
         regulatory obligations regarding the Product in the Field in the
         Territory, including, but not limited to, the regulatory approval
         applications and registrations and related materials, all promotional
         materials, Product labeling, responding to medical inquiries, and
         Product complaints relating to the Territory, except as otherwise
         provided in this Agreement or the Development Plan, or determined by
         the Development Committee. Similarly, FemPharm, as the sponsor of its
         Regulatory Materials for the Product in the Field in Australia and New
         Zealand, has sole responsibility for interacting with all regulatory
         authorities in Australia and New Zealand with respect to its
         development of such Product in the Field for such countries, and for
         all such other regulatory obligations in its development of the Product
         in Australia and New Zealand. Each Party will provide the other Party
         with reasonable advance notice of, and any preparatory material for,
         any hearing before, or meeting with, any regulatory authority regarding
         the Product in such Party's territory (I.E., the Territory in the case
         of Vivus, and Australia and New Zealand in the case of FemPharm), and
         such other Party has the right to have two (2) of its employees attend
         such hearings or meetings at its own cost, to the extent the Party
         responsible for the meeting has the right to include them and is
         reasonably practicable under the circumstances. All such materials, and
         information learned in connection with such meeting or hearings, shall
         be treated as the Confidential Information of the Party disclosing the
         materials or conducting the meeting.

7.3      ADVERSE EVENTS AND COMPLAINTS REPORTING

         The Parties agree that appropriate reporting of adverse events and
         other safety data relating to the Product is critical. Specific details
         regarding the management of information of adverse events, medical
         inquiries and Product complaints related to the

                                       41

         use of the Product in the Territory and outside will be delineated in a
         separate document, to be agreed to by the Parties within ninety (90)
         days after the Effective Date. The pharmacovigilance and product
         labeling representatives of each Party will work in good faith together
         to develop a document that identifies:

          (a)  which safety information will be exchanged;

          (b)  when such information will be exchanged;

          (c)  how the global safety database will be established;

          (d)  which Party will be obligated to obtain follow-up information on
               incomplete safety reports;

          (e)  which Party will review the literature for safety report
               information;

          (f)  which Party will prepare required periodic safety updates; and

          (g)  the identification of any other details required to appropriately
               manage safety information for the Product.

         Subject to any specific details of the above document, it is expected
         that Vivus will be responsible for pharmacovigilance, adverse reaction
         reporting and related matters for Products inside the Field in the
         Territory, and that FemPharm shall be responsible for
         pharmacovigilance, adverse reaction reporting and related matters for
         Products in the Field in all countries outside of the Territory. The
         Parties also agree to use good faith, reasonable efforts to reach
         agreement with any of their respective licensees (or sublicensees, as
         applicable) of Products in the Field to include such entities in the
         pharmacoviligance and related safety and adverse event reporting
         document discussed above.

8.       PRODUCT COMMERCIALIZATION
--------------------------------------------------------------------------------
8.1      OVERVIEW

                                       42

         Vivus has the exclusive rights, subject to the terms of this Agreement,
         to promote, market, distribute and sell Product for use in the Field
         throughout the Territory, itself and/or through its Affiliates and
         sub-licensees.

8.2      COMMERCIALIZATION OBLIGATIONS

         Vivus hereby covenants and agrees with FemPharm, during the term of
         this Agreement commencing with regulatory approval of the NDA for the
         Product by the FDA in the Field and Territory (permitting marketing of
         the Product in the Territory), to:

          (a)  actively and diligently promote the sale of the Product using
               commercially reasonable efforts in the Territory;

          (b)  not, and to require that its Controlled Affiliates and
               sub-licensees do not, sell the Product licensed hereunder outside
               the Territory nor sell such Product to any person which it knows,
               or for which it has been provided reasonable documentation, is
               selling such Product outside the Territory, each to the extent
               set forth in Section 2.6; and

          (c)  provide for and maintain, or cause to be provided for and
               maintained, a sales organisation and a marketing program
               reasonably adequate and competent to promote, stimulate interest
               in, and sell the Product effectively in the Territory, for a
               commercially reasonable period of time after commercial launch.

         Each Party is entitled to assign and otherwise transfer without consent
         all its right, title and interest in this Agreement, including its
         obligations, to any other Person that acquires all or substantially all
         of such Party's business or assets, whether by asset purchase, merger,
         acquisition or other similar transaction, PROVIDED THAT such Person
         agrees in writing to be bound by the terms hereof as the successor in
         interest or assignee. Any other attempt to transfer or assign shall be
         void without the prior written consent of the other Party. If a Party
         is acquired by another corporation or other entity that was not its
         Affiliate prior to the acquisition, then no Intellectual Property
         rights of the acquiring entity developed prior to the acquisition, or
         developed thereafter without using the Licensed Technology, shall be
         included in the rights licensed to the other Party under this
         Agreement.

10.      CONFIDENTIALITY
--------------------------------------------------------------------------------
10.1     RESTRICTIONS ON USE

         Subject to the further provisions of this Article 10, each Party agrees
         that it will keep all Confidential Information disclosed to it by the
         other Party secret and confidential, and will not disclose it to any
         third party, or use it for its own benefit or the benefit of

                                       46

         any third party, except that either Party may use and disclose the
         other Party's Confidential Information:

          (a)  for the purposes of exercising the licenses and other rights
               granted by this Agreement; or

          (b)  as otherwise permitted with the prior written consent of the
               other Party.

         Any disclosure authorized in accordance with the foregoing shall be
         subject to reasonable confidentiality provisions materially as
         protective of the Confidential Information as the terms of this
         Agreement.

10.2     USE OF OWN INFORMATION

         Except for Section 10.13, nothing in this Article 10 prevents a Party
         from disclosing or dealing in its absolute discretion with any of its
         own Confidential Information, provided that FemPharm will use
         reasonable efforts to keep its Confidential Information relating to the
         Product and the Field secret and confidential so as to avoid any
         adverse affect on the value or protection of the Licensed Intellectual
         Property to the extent relevant to the Field and the Territory and
         further provided that such disclosure and dealing by FemPharm shall be
         subject to the other terms of this Agreement, including Sections 2.1
         and 10.13.

10.3     EXCEPTIONS TO CONFIDENTIALITY

         The obligations of confidentiality and non-use as provided in Section
         10.1 above do not extend to, and notwithstanding Section 1.1
         Confidential Information shall not include, any particular information
         or Know-How received by a Party that it can demonstrate by competent
         evidence:

          (a)  was available to the public or otherwise in the public domain
               prior to receipt by such Party, or subsequent to such receipt
               becomes available to the public or part of the public domain,
               other than as a result of a breach of this Agreement;

          (b)  was already known to the recipient Party by lawful means at the
               time of receipt (including trade secrets and inventions not
               disclosed in existing patent applications) other than directly or
               indirectly from the other Party;

                                       47

          (c)  was obtained by the recipient Party from a third party who has a
               lawful right to disclose it, provided that the information has
               not been obtained directly or indirectly from the other Party to
               this Agreement and is not subject to an obligation of
               confidentiality; or

          (d)  was independently developed by the receiving Party without use of
               the other Party's Confidential Information.

10.4     EXCEPTIONS TO NON-DISCLOSURE

         Notwithstanding the restrictions of Section 10.1, a Party may disclose
         the Confidential Information of the other Party beyond the disclosure
         authorized in Section 10.1, subject to compliance with the following
         provisions of this Section 10.4, solely to the extent such disclosure:

          (a)  is to its professional advisors, and provided that such
               disclosure is reasonably necessary or desirable and is subject to
               reasonable confidentiality protections;

          (b)  is required by any court or other judicial or quasi-judicial
               tribunal or any administrative or government body, or as is
               required by law, provided that such disclosure is no more than is
               necessary to avoid the imposition of a penalty for failing or
               refusing to disclose the Confidential Information, and that the
               Confidential Information is disclosed in such a way as to limit
               as far as possible the disclosure of the Confidential
               Information, and that such disclosing Party first complies with
               Section 10.5; or

          (c)  as reasonably necessary in prosecuting or defending any
               litigation or enforcing this Agreement, provided that such Party
               has first notified the other Party giving full details of the
               circumstances of the required disclosure and of the relevant
               information to be disclosed and takes reasonable steps to
               preserve the confidentiality of the information.

10.5     DISCLOSURE BY LAW

         Before any disclosure in reliance on Section 10.4(b), the Party subject
         to the disclosure obligation must, unless it is not practicable to do
         so:

                                       48

          (a)  immediately notify the other Party giving full details of the
               circumstances of the required disclosure and of the relevant
               information to be disclosed;

          (b)  to the maximum extent permitted by law give the other Party a
               reasonable opportunity in a court of law or other appropriate
               body to:

               (i)  challenge the proposed disclosure;

               (ii) challenge the obligation of the Party or any other person to
                    make that disclosure; and/or

               (iii) secure a protective order or other ruling limiting or
                    preventing the disclosure and/or to protect or preserve the
                    confidentiality of the relevant information; and

          (c)  take reasonable steps to preserve the confidentiality of the
               information being disclosed and to comply with any such
               protective order or ruling.

10.6     SCOPE OF CONFIDENTIALITY

         In the case of uncertainty as to the confidentiality of any information
         a Party must treat the information as Confidential Information until
         such Party or the other Party confirms that the information is not
         Confidential Information.

10.7     SECURITY OF INFORMATION

         Each Party must use its reasonable endeavours to minimise the risk of
         disclosure of any Confidential Information of the other Party, by
         providing reasonable security of its premises, its records and
         materials.

10.8     PERSONNEL CONFIDENTIALITY

         Each Party agrees to procure written and signed confidentiality and
         non-publication undertakings with respect to the Confidential
         Information of the other Party, in terms materially as protective of
         such other Party's Confidential Information as this Article 10, from
         all employees, agents and contractors of such Party who have or are
         likely to have access to Confidential Information of the other Party.

                                       49

10.9     RETURN OF CONFIDENTIAL INFORMATION

         Upon termination of this Agreement, each Party may by written notice to
         the other Party demand the return of all tangible property comprising
         Confidential Information provided by such Party, but only to the extent
         set forth in Article 14 and provided that Vivus shall not be required
         to return any product.

10.10    PUBLICATIONS

         Neither Party shall make or authorize any oral public disclosure, or
         any submission to any outside person for publication of an abstract or
         manuscript, disclosing the Confidential Information of the other Party,
         including any scientific data resulting from the other Party's
         non-clinical development or clinical development under this Agreement,
         in each case except to the extent approved in writing by such other
         Party or as otherwise permitted in this Article 10.

10.11    OTHER RIGHTS

         Nothing herein contained excludes the right of either Party at common
         law or in equity to protect its Confidential Information by application
         to any court for injunction or otherwise. Notwithstanding anything to
         the contrary in this Article 10, the Parties agree that the use and
         disclosure of concepts and information retained in the unaided memories
         of individuals who had access to Know-How from the other Party shall
         not be considered a breach of the terms of this Agreement. This Section
         10.11 shall not be construed to grant any rights under any Patent in
         such concepts.

10.12    USE OF OTHER PARTY'S NAME

         Neither Party shall make any use of the other Party's name unless
         approved by the other Party in writing, such approval not to be
         unreasonably withheld, or in the circumstances set forth in Section
         10.13.

10.13    PRESS RELEASES AND OTHER DISCLOSURES

         The Parties will issue a joint press release, in the form attached as
         annexure D, promptly after the Effective Date. The Parties agree that
         no other publication or other public disclosure of the terms of this
         Agreement will be made by a Party without the

                                       50

         consent of the other Party, (with failure to respond to any request for
         consent beyond ten (10) days from the request to be deemed consent),
         such consent not to be unreasonably withheld. Notwithstanding the
         foregoing, a Party may make disclosures authorized pursuant to Section
         10.10 and may disclose the terms of this Agreement:

          (a)  to the extent required by law or regulation or court order, or by
               the rules of any stock exchange on which the stock or shares of
               the Party or any of its Affiliates are listed or other government
               body; and

          (b)  in confidence to its professional advisors, and its existing or
               potential investors, acquirors, and merger partners on a need to
               know basis under conditions which reasonably ensure the
               confidentiality thereof;

          (c)  in confidence, pursuant to non-disclosure and non-use
               restrictions at least as stringent as included in this Article
               10, to other parties that have a need to know such information
               for a purpose related to this Agreement;

          (d)  in connection with the enforcement of this Agreement or rights
               under this Agreement;

          (e)  in confidence as is reasonable in connection with a merger,
               acquisition of stock or assets, proposed merger or acquisition,
               or the like;

          (f)  as advisable or required in connection with any government or
               regulatory filings, including filings with the SEC; provided
               however, prior to any such disclosure the non-disclosing Party
               shall be allowed to review the proposed disclosure, and the
               disclosing Party agrees to consider in good faith any proposed
               revisions thereof provided to the disclosing Party within ten
               (10) Business Days of the non-disclosing Party's receipt of the
               proposed disclosure and the Party making such disclosure shall

11.      INVENTIONS
--------------------------------------------------------------------------------
11.1     DISCLOSURE OF INVENTIONS

         During the term of this Agreement, each Party will promptly disclose to
         the other Party the Inventions invented jointly by employees of both
         Parties and for which the disclosing Party desires to seek Patent
         protection, and Vivus will promptly disclose to FemPharm all
         Improvements, provided that Vivus shall not be considered in breach of
         such disclosure obligation as a result of an inadvertent failure to
         disclose an Invention so long as Vivus promptly discloses the
         Improvement after discovering the failure to disclose.

11.2     OWNERSHIP OF INVENTIONS AND INTELLECTUAL PROPERTY RIGHTS

         As between the Parties, each Party (or its Affiliate) will own the
         entire right, title and interest in and to all the Inventions made by
         such Party's (or its Affiliate's) employees or others acting on behalf
         of such Party or Affiliate and all Intellectual Property rights in and
         to such Inventions, subject only to the licenses and other rights (if
         any) to the extent granted to the other Party thereto under this
         Agreement.

11.3     JOINT INVENTIONS AND JOINT PATENTS

         All right, title and interest in all Patents to the extent claiming
         Inventions invented jointly by the employees of both Parties ("Joint
         Inventions")will be owned jointly by FemPharm and Vivus (that is, each
         Party having an equal and undivided interest therein). Patent filings
         to the extent claiming a Joint Invention will be conducted as set out
         in Section 12.2. Neither Party may assign its interest in any Joint
         Patent unless notice of such transfer has been first given to the other
         Party and the transferee agrees in writing to be bound by the terms of
         this Agreement with respect to the interest so transferred and as
         otherwise set forth in Section 9.3. Except as otherwise expressly
         provided in this Agreement, neither Party shall have any obligation to
         account to the other for profits, or to obtain any consent of the other
         Party to license or exploit, Joint Inventions (whether or not patented)
         or Joint Patent, by reason of joint ownership thereof, and each Party
         hereby waives any right it may have under the laws of any jurisdiction
         to require any such consent or accounting.

                                       52

11.4     COOPERATION OF EMPLOYEES

         Each Party represents and agrees that all employees acting on its
         behalf in performing its obligations under this Agreement will be
         obligated under a binding written agreement to assign to such Party, or
         as such Party will direct, all inventions made or conceived by such
         employee.

12.      PATENTS AND INTELLECTUAL PROPERTY
--------------------------------------------------------------------------------
12.1     PATENT RIGHTS

         All right, title and interest owned by a Party in Intellectual Property
         will remain owned and retained exclusively by such Party, subject only
         to the applicable license and other rights granted to Vivus and
         FemPharm in this Agreement. FemPharm will have sole responsibility for
         and control over, at its discretion, the filing, prosecution,
         maintenance and enforcement of the FemPharm Patents, at FemPharm's
         expense, except as otherwise provided below. FemPharm shall use
         diligent commercially reasonable efforts to obtain and maintain at all
         times broad Patent protection for the Products in the Field and
         Territory under this Agreement, including by using reasonable efforts
         to prepare, file, prosecute and maintain Patents as desirable for
         Products in the Field and Territory and to pursue as appropriate
         interferences, re-examinations, reissues, oppositions and similar
         proceedings regarding the FemPharm Patents. During the term of this
         Agreement and thereafter to the extent Vivus has surviving rights,
         FemPharm will keep Vivus reasonably informed regarding the status,
         preparation, filing, prosecution and maintenance of all patent
         applications and patents included or to be included in the FemPharm
         Patents licensed to Vivus pursuant to Section 2.1 (including inventions
         for which Vivus may desire to have a Patent application filed), and
         without limiting the foregoing will reasonably consider, and give Vivus
         a reasonable opportunity to provide, comments on such preparation,
         filing, prosecution, or maintenance efforts that relate to Product, the
         Field or the Territory. FemPharm may elect to cease preparing, filing,
         prosecuting or maintaining any particular FemPharm Patent, or to cease
         diligently pursue any interferences, re-examinations, reissues,
         oppositions or similar proceeding relating to a particular FemPharm
         Patent, but only to the extent that FemPharm has provided to Vivus, as
         far

                                       53

         in advance as practicable, written notice describing its intent and, to
         the extent desired by Vivus, has reasonably transitioned the
         preparation, filing, prosecution, and maintenance to Vivus without
         prejudice to Vivus' rights under this Agreement. If Vivus then
         undertakes such activities, Vivus shall bear all of its actual out of
         pocket costs and expenses incurred in such activities, and may credit
         against amounts subsequently owed to FemPharm under this Agreement any
         such actual costs and expenses borne, subject to providing FemPharm
         with receipts and invoices and other documents as is reasonable to
         properly evidence the costs and expenses and payment thereof. FemPharm
         shall use reasonable efforts to cooperate and provide such documents
         and assistance as is reasonably requested, in connection with such
         activities by or under authority of Vivus.

12.2     JOINT PATENT RIGHTS

         As to each Joint Invention, the Parties will discuss and reasonably
         agree on whether and where to file a Joint Patent claiming the Joint
         Invention, and on which Party shall assume responsibility for the
         preparation, filing, prosecution and maintenance of such Joint Patents,
         in each country in the world for which prosecution of the Joint Patent
         is desired by a Party. The Parties will share equally in the expenses
         of such activities related to Joint Patents. Each Party will reimburse
         the other for its share of such expenses borne by the other Party upon
         written request, no less frequently than quarterly and shall cooperate
         and provide such documents and assistance as is reasonably requested in
         connection with such activities. Each Party will keep the other
         reasonably informed of, and consult with the other Party with respect
         to, all significant actions in the course of such Party's prosecution
         of the Joint Patents. If the Party having responsibility for
         prosecuting a particular Joint Patent elects not to assume or continue
         such responsibility, the other Party will have the right, but not the
         obligation, to do so. If either Party elects not to continue to support
         prosecution or maintenance of a particular Joint Patent, it may do so
         on written notice to the other Party, and in such case it will assign
         its entire interest in such Joint Patent to the other Party if such
         other Party elects to prosecute and maintain such Joint Patent at its
         sole expense; subject to any licenses and exclusivity in this
         Agreement. Upon any such assignment, the Party that elected to
         discontinue its involvement, and assign its interest, shall not be
         required to bear any expenses under this Section 12.2.

                                       54

12.3     FEMPHARM PATENT PROCEEDINGS

         Each Party will promptly notify the other of any legal proceedings,
         including opposition or declaration of invalidity proceedings,
         initiated or pursued by any third party against any of the FemPharm
         Patents. FemPharm has the sole right and authority to defend against
         any such proceedings, including defending against any defenses or
         counterclaims of invalidity or unenforceability (including such
         counterclaims as may arise out of an infringement claim under Section
         12.4). For clarity, all infringement actions involving a Field
         Infringement (as defined in Section 12.4) shall be pursued under
         Section 12.4, and FemPharm shall have the right to control only the
         defense of the FemPharm Patents in such Field Infringement actions in
         the event that a defense or counterclaim is asserted against the
         FemPharm Patents, shall use reasonable efforts, in such defense, not to
         adversely impact the Field Infringement action by Vivus. FemPharm will
         keep Vivus reasonably informed of the actions taken to defend the
         FemPharm Patents and the progress of such actions. In such case, only
         (*) % of FemPharm's costs and expenses of such involvement shall be
         reimbursed out of the recovery in the Field Infringement action. Vivus
         will provide FemPharm with reasonable assistance and cooperation in
         such actions, at FemPharm's sole expense, in an effort to obtain a
         successful resolution or termination of such proceedings or
         counterclaims governed by this Section 12.3. Vivus will have the right
         to have counsel of its choosing participate in any such defense of the
         FemPharm patents, at its sole expense, subject to Section 12.4.
         FemPharm will not settle any claim, suit or action involving FemPharm
         Patents in any manner that would materially negatively impact upon the
         FemPharm Patents, the Licensed Intellectual Property, or Vivus' rights
         or exclusivity thereunder, or that would materially negatively impact
         upon or limit or restrict the ability of Vivus to sell the Products in
         the Territory.

12.4     INFRINGEMENT PROCEEDINGS IN THE FIELD

         Each Party will promptly notify the other if it becomes aware that any
         third party is infringing any FemPharm Patent in the Territory. If any
         third party is infringing, or believed to be infringing any FemPharm
         Patent in the Territory in connection with the exploitation, making,
         use, import, offer for sale, or sale of a product in the Field in the
         Territory (a "Field Infringement"), then the Parties will promptly
         thereafter meet and discuss in good faith appropriate steps to take to
         cause such Field Infringement to cease.

                                       55

          (a)  Vivus or its designee has the first right and authority, but not
               the obligation, to take reasonable steps to cause termination of
               such Field Infringement, which may include initiating a lawsuit
               or other appropriate legal action, at its expense, as Vivus or
               its designee reasonably determines is appropriate; provided that
               Vivus agrees that it will not initiate a lawsuit asserting
               infringement of the FemPharm Patents unless it has first
               discussed the matter with FemPharm. Vivus will keep FemPharm
               reasonably informed of the actions taken to cause termination of
               a Field Infringement and the progress of any such actions
               (including notifying FemPharm promptly if the third party raises
               any defenses or counterclaims of invalidity or unenforceability
               of any FemPharm Patents). FemPharm will provide Vivus or the
               designee with reasonable assistance and cooperation in such
               actions, at Vivus's or the designee's expense (other than as set
               forth in Section 12.3), including joining such action as a party
               plaintiff and taking such other actions as are required by
               applicable law for Vivus or the designee to pursue such action.
               FemPharm will have the right to have counsel of its choosing
               participate in any such action, at its sole expense, provided
               that Vivus will have the right to control the action. Vivus will
               not settle any claim, suit or action that it brought under this
               Section 12.4 involving FemPharm Patents in any manner that would
               negatively impact upon the FemPharm Patents or the Licensed
               Intellectual Property without FemPharm's consent, not to be
               unreasonably withheld or delayed.

          (b)  If Vivus and its designees have not, within four (4) months of
               request by FemPharm, initiated and pursued reasonable efforts to
               cause such Field Infringement to cease, then each Party (and
               Vivus' designees) shall thereafter have the right and authority,
               but not the obligation, to take any such steps or actions at its
               expense. Whichever of such parties first does so shall thereafter
               control the action and the other Party will provide the
               controlling Party (or designee) with reasonable assistance and
               cooperation in such actions, at

                                       56

               expense of the controlling Party or designee (except as set forth
               in Section 12.3), including joining such action as a party
               plaintiff and taking such other actions as required by applicable
               law to pursue such action.

          (c)  The Party bringing the suit, action or legal proceedings will:

               (i)  be reimbursed for its costs and expenses associated with
                    bringing the legal proceedings out of the proceeds of any
                    damages or costs recovered or as otherwise provided by
                    agreement between the Parties; and

               (ii) indemnify the other Party against any liability awarded
                    against such other Party as a result of the subject matter
                    of such suit brought by the indemnifying Party, unless
                    caused by the acts or omissions of the indemnified Party.

          (d)  Any amounts remaining out of damages and costs and other amounts
               recovered from a third party due to infringement of the FemPharm
               Patents under a suit, action or legal proceeding brought against
               a Field Infringement, will be retained by the Party that brought
               the action as follows:

               (i)  if Vivus or its designee brought the action, then Vivus or
                    the designee, as the case may be, shall retain (*) percent
                    (* %) of the recovery and will pay the remaining (*) percent
                    (* %) to FemPharm; and

               (ii) if FemPharm brought the action, the recovery shall be (*)%
                    to Vivus and (*) % to FemPharm.

12.5     OTHER INFRINGEMENT PROCEEDINGS

         For clarity, FemPharm retains the sole and exclusive right to enforce
         and defend the FemPharm Patents against all third party infringements
         worldwide, except as otherwise provided in Section 12.4 with respect
         solely to Field Infringement.

                                       57

13.      REPRESENTATIONS AND WARRANTIES; DISCLAIMERS
--------------------------------------------------------------------------------
13.1     WARRANTY

         Each Party, and each Acrux Controlled Affiliate, represents, warrants
         and covenants that: (i) it has the legal power and authority to enter
         into this Agreement and to perform all of its obligations hereunder;
         (ii) it has and will have the right and authority to grant the rights
         and licenses granted by it hereunder; (iii) this Agreement is a legal
         and valid obligation binding upon it and enforceable in accordance with
         its terms; (iv) it has not previously made, and during the term of this
         Agreement will not make, any commitment or grant or authorization of
         rights which are in conflict in any material way with, or that will
         restrict or impair, the rights, licenses, or exclusivity granted to
         Vivus herein.

13.2     ADDITIONAL WARRANTIES OF FEMPHARM AND THE ACRUX CONTROLLED AFFILIATES

         Each of FemPharm and Acrux DDS Pty Limited represents, warrants, and
         covenants as follows:

         (a) it has not received notice that it has failed to comply with, and
         it has not failed to comply with, any obligation, law, regulation, or
         order in a manner that will materially adversely affect the rights
         granted to Vivus under this Agreement;

         (b) Annexure B sets forth a list of all FemPharm Patents (whether
         issued or pending) owned by, or licensed to, any of FemPharm and the
         Acrux Controlled Affiliates. Except for the Patents listed in Annexure
         B, there are no Patents related to or useful for Products in the Field
         that are owned by, or licensed to, FemPharm or any Acrux Controlled
         Affiliate. All Patents in Annexure B are owned by FemPharm or an Acrux
         Controlled Affiliate, except as expressly identified in Annexure B.
         None of FemPharm and the Acrux Controlled Affiliates shall grant any
         third party any license or rights under any Patent that is within the
         FemPharm Patents that derogate from or reduce the license or rights
         granted to Vivus under this Agreement;

         (c) FemPharm has sufficient rights to the FemPharm Patents identified
         in the annexure B for it to grant to Vivus the exclusive right (with
         respect to all Persons) under such Intellectual Property, including the
         right to grant and authorize

                                       58

         sublicenses, to exploit, import, export, make, have made, use, offer
         for sale and sell Products for use in the Field in the Territory;

         (d) as of the Effective Date: (i) the existing FemPharm Patents are in
         full force and effect and not subject to any pending re-examination,
         opposition, interference or claim of invalidity proceedings, none of
         the Licensed Intellectual Property is subject to any litigation or
         similar proceedings, and neither FemPharm nor any Acrux Controlled
         Affiliate has knowledge of a third party threat of such a proceeding,
         or of facts that likely would be the basis for instituting such
         proceeding; (ii) none of FemPharm and the Acrux Controlled Affiliates
         has reason to believe that any of the existing FemPharm Patents likely
         will be invalid, unenforceable, or will fail to issue, or that the
         claims of any pending FemPharm Patent likely will be materially limited
         or restricted beyond the presently pending claims;

         (e) as of the Effective Date, none of FemPharm and the Acrux Controlled
         Affiliates is aware of any Person that is infringing a FemPharm Patent
         in the Territory;

         (f) FemPharm and/or one of the Acrux Controlled Affiliates have access
         and rights to all Regulatory Materials filed by or under authority of
         any of them with regulatory authorities, and the supporting raw data
         for such materials, relevant to Product and may be useful to support
         the development or marketing approval of the Product in the Field in
         the Territory, and has the right to include the same within the
         Know-how disclosed to Vivus hereunder;

         (g) FemPharm has not knowingly failed to provide to Vivus any documents
         or information requested by Vivus as part of its due diligence process,
         and FemPharm and Acrux DDS Party Limited believe that FemPharm has
         provided to Vivus, prior to the Effective Date, access to sufficient
         Know-How Controlled by FemPharm or any Acrux Controlled Affiliate for
         Vivus to conduct a reasonable and fully informed evaluation of the
         Licensed Technology and the development status and results relating to
         the current Product in deciding whether or not to enter into this
         Agreement, including all adverse information and all relevant
         agreements. None of the materials provided to Vivus by FemPharm or an
         Acrux Controlled Affiliate prior to the Effective Date contained any
         untrue statement of material fact, and to FemPharm's

                                       59

         and Acrux Controlled Affiliate's knowledge, none of FemPharm or any
         Acrux Controlled Affiliate failed to disclose to Vivus, or concealed,
         any material fact that would, absent such disclosure, make the
         materials provided to Vivus materially misleading;

         (h) as of the Effective Date, to each of FemPharm's and the Acrux
         Controlled Affiliates' knowledge, none of FemPharm and the Acrux
         Controlled Affiliates has made an untrue statement of a material fact,
         or has failed to disclose a material fact, to any regulatory authority
         with respect to the Product in the Field, or any portion thereof;

         (i) Acrux DDS Pty Limited shall use diligent, commercially reasonable
         efforts to (*). FemPharm and the Acrux Controlled Affiliates shall not
         terminate, amend or modify the (*). FemPharm shall notify Vivus in
         writing immediately if any of FemPharm, Acrux Limited or the Acrux
         Controlled Affiliates receives from the licensor of any Licensed
         Intellectual Property any notice of breach or termination, or any other
         indication of a dispute or matter that could lead to breach or
         termination, of the license agreement, or which could otherwise affect
         Vivus' rights thereunder;

         (j) FemPharm will not deliver to Vivus confidential or proprietary
         Know-How of any third party unless FemPharm has the right to do so for
         use and disclosure by Vivus in the manner set forth in this Agreement,
         unless FemPharm expressly identifies at the time of such disclosure the
         particular Know-How that FemPharm does not have the right to license to
         Vivus hereunder;

         (k) all employees, consultants, and other contractors of each of
         FemPharm and the Acrux Controlled Affiliates performing work related to
         or useful for any Product in the Field, including Monash, Barry Reed,
         William Charman, Dr. Barrie Finnin, and Dr. Tim Morgan in each case to
         the extent acting as an employee, consultant, or contractor of FemPharm
         or an Acrux Controlled Affiliate, have been and shall be subject to a
         written agreement that vests in FemPharm or an Acrux Controlled
         Affiliate all right, title, and interest in and to their work product,
         including all associated Intellectual Property rights;

                                       60

         (l) none of this Agreement, or the exercise by or under authority of
         Vivus of the license rights granted to Vivus under this Agreement, will
         violate or otherwise be affected by any of the terms or conditions
         imposed in connection any government funding or sponsorship obtained by
         FemPharm or an Acrux Controlled Affiliate;

         (m) FemPharm and the Acrux Controlled Affiliates are not aware, as of
         the Effective Date, (1) of any Patent of any third party, including
         Affiliates, that will be infringed by the manufacture, use import, or
         sale of a Product in the Field in the Territory, or (2) that any
         Licensed Know-How in any of their possession, and related to or useful
         for Product, was misappropriated from a third party.

         (n) none of the terms and conditions of the Monash License, including
         Sections 6, 7, 8.1, 8.3, 12.2, and 19.1 of the Monash License, or the
         Acrux DDS License bind Vivus;

         (o) the FemPharm Patents are not subject to any lien or encumbrance (as
         defined in the Monash License) that could materially limit or adversely
         affect Vivus' rights granted under this Agreement;

         (p) Acrux Limited is not controlled by any Person, and FemPharm and
         Acrux DDS Pty Limited, and Cosmeceutical Solutions Pty Limited are the
         only Affiliates of Acrux Limited that have any interest in (i) any
         Licensed Intellectual Property, (ii) any Competitive Product or (iii)
         any technology, product or Intellectual Property related to or useful
         for the Product in the Field, the delivery of testosterone or other
         Androgen's, or the delivery of a selective androgen receptor modulator,
         to females, or any transdermal or mucosal delivery; and

         (q) none of FemPharm and the Acrux Controlled Affiliates are currently
         researching or developing, or have current plans to commence research
         or development of, any MDTS product for the treatment of sexual
         dysfunction in human females, other than the Product.

                                       61

13.3     ADDITIONAL WARRANTIES OF VIVUS

13.4     DISCLAIMER OF WARRANTIES

         EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, VIVUS AND
         FEMPHARM MAKE NO REPRESENTATIONS, WARRANTIES OR CONDITIONS OF ANY KIND,
         EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AND EACH PARTY HEREBY
         DISCLAIMS ALL OTHER WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
         WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

                                       62

13.5     DISCLAIMER OF LIABILITY

         EXCEPT WITH RESPECT TO A BREACH OF SECTIONS 2.5, 10, OR THE EXCLUSIVITY
         IN SECTION 2.1(a), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
         OTHER BASED UPON THIS AGREEMENT FOR ANY SPECIAL, CONSEQUENTIAL,
         INDIRECT, OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS
         AGREEMENT, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR
         NOT SUCH PARTY HAS BEEN ADVISED OR IS AWARE OF THE POSSIBILITY OF SUCH
         DAMAGES.

14.      TERM AND TERMINATION
--------------------------------------------------------------------------------
14.1     TERM

         This Agreement will continue in full force and effect from the
         Effective Date until expiration, unless earlier terminated pursuant to
         Sections 5.19(b), 14.2, 14.3 or 14.8 below, on the date that Vivus no
         longer has, and shall not have in the future, any payment obligations
         to FemPharm under this Agreement. Upon such expiration, Vivus retains a
         non-exclusive, fully-paid license in the Territory to continue to make,
         have made, use, sell and otherwise exploit Products in the Field.

14.2     TERMINATION BY FEMPHARM

         FemPharm is entitled by written notice to Vivus to terminate this
         Agreement upon the happening of any of the following events, provided
         that FemPharm provides Vivus with written notice of termination within
         one hundred eighty (180) days after it becomes aware of the occurrence
         of the applicable event:

          (a)  any material breach by Vivus of any of the terms and conditions
               of this Agreement, where such breach is not fully cured and
               rectified within ninety (90) days, or with respect to payment
               obligations, within forty-five (45) days, after the giving of
               written notice by FemPharm to Vivus specifying such breach and
               requiring rectification thereof, provided that if such breach
               (other than a payment breach) is not capable of cure within the
               initial ninety (90) day period and Vivus is making diligent good
               faith efforts to cure, then Vivus shall

                                       63

               have an additional ninety (90) days to cure such breach, and
               subject to Section 15.10, and except as otherwise provided in
               Section 14.7;

          (b)  a petition or other application or resolution being passed
               against Vivus, or being presented by Vivus, in a bankruptcy
               proceeding that requires the winding up, liquidation or
               dissolution of Vivus or notice by Vivus of its intention to
               propose such a resolution being given;

          (c)  the appointment of a receiver, or receiver and manager, for all
               of Vivus's property in bankruptcy;

          (d)  if Vivus (or any of its Affiliates) bring any action, suit,
               defense or counterclaim seeking to invalidate or have held
               unenforceable: (i) any claim in any FemPharm Patent in
               substantially the same form that the claim is issued or pending
               on July 31, 2003 (an "Existing FP Claim"); or (ii) any claim in a
               FemPharm Patent filed after July 31, 2003 that is substantially
               the same as any such Existing FP Claim and that is entitled to an
               effective filing date (e.g. as defined under 35 USCss.120) that
               is the filing date of a FemPharm Patent filed prior to July 31,
               2003.

14.3     TERMINATION BY VIVUS

         Vivus is entitled by written notice to FemPharm to terminate this
         Agreement upon the happening of any of the following events, provided
         that Vivus provides FemPharm (except in case of subsection (d)) with
         written notice of termination within one hundred eighty (180) days
         after Vivus becomes aware of the occurrence of the applicable event:

          (a)  a material breach by FemPharm of any of the terms and conditions
               under this Agreement or a material breach by an Acrux Controlled
               Affiliate of its obligations, representations, or warranties in
               this Agreement, where such breach is not fully cured or rectified
               within ninety (90) days after the giving of written notice by
               Vivus to FemPharm specifying such breach or non-observance and
               requiring rectification thereof, provided that if such breach is
               not capable of cure within the initial ninety (90) day period and
               FemPharm

                                       64

               and the Acrux Controlled Affiliates are making diligent good
               faith efforts to cure, then FemPharm shall have an additional
               ninety (90) days to cure such breach, and subject to Section
               15.10;

          (b)  a petition or other application being presented or resolution
               being passed by or against FemPharm, Acrux DDS Pty Ltd, or Acrux
               Limited in a bankruptcy proceeding that requires the winding up,
               liquidation or dissolution of the applicable entity, or notice by
               such entity of its intention to propose such a resolution being
               given;

          (c)  the appointment of a receiver, or receiver and manager, for all
               of FemPharm's property in bankruptcy or the rejection of this
               Agreement by any such receiver or manager;

          (d)  Vivus has provided sixty (60) days written notice that Vivus is
               terminating the Agreement for its convenience; or

          (e)  if FemPharm (or any of its Affiliates) bring any action, suit,
               defense or counterclaim seeking to invalidate or have held
               unenforceable: (i) any claim in any Patent Controlled by Vivus or
               its Affiliate in substantially the same form that the claim is
               issued or pending on July 31, 2003 (an "Existing V Claim"); or
               (ii) any claim in a Patent Controlled by Vivus or its Affiliate
               filed after July 31, 2003 that is substantially the same as any
               such Existing V Claim and that is entitled to an effective filing
               date (e.g. as defined under 35 USCss.120) that is the filing date
               of such a Patent filed prior to the July 31, 2003.

         Further, in lieu of proceeding under Section 14.3(a), 14.3(b), 14.3(c)
         or 14.3(e) based upon a particular event, Vivus shall have the right to
         avail itself of the provisions of Section 14.6 based upon the event,
         rather than terminating the Agreement in its entirety under Section
         14.3(a), 14.3(b), 14.3(c), or 14.3(e), provided that proceeding under
         Section 14.6 based upon an event shall not prevent Vivus from
         proceeding under Section 14.3 with respect to any later event covered
         by Section 14.3.

                                       65

14.4     NO RELEASE

         Termination of this Agreement does not release either Party from any
         liability that has accrued prior to such termination, or release either
         Party from any obligation that survives termination of this Agreement.

14.5     CONSEQUENCES OF AGREEMENT TERMINATION

          (a)  The terms of this Section 14.5(a) shall apply upon termination
               pursuant to Section 14.2 or Section 14.3(d), except if Vivus has
               previously exercised its rights, under Section 14.3(a) or 14.6 to
               terminate portions of this Agreement pursuant to Section 14.6 due
               to uncured material breach.

               (i)  Section 2.1 of this Agreement shall automatically terminate,
                    and Section 2.3 shall survive, except rights under Section
                    2.3(b) shall survive to the extent set forth below.

               (ii) Upon such termination, Vivus will be deemed automatically to
                    grant to FemPharm a perpetual, irrevocable, royalty-free,
                    fully paid, non-exclusive license (with full rights to
                    sublicense): (A) under the Improvement Blocking Patent
                    Rights to exploit, import, make, have made, use, offer for
                    sale and sell Products in the Field throughout the
                    Territory; and (B) under the Reversion IP to exploit,
                    import, make, have made, use, offer for sale and sell
                    Products in the Field in the Territory. As used herein,
                    "Reversion IP" means all trade secrets in the Improvements
                    to the extent Controlled by Vivus or its Controlled
                    Affiliate during the term and necessary or reasonably useful
                    for the development, manufacture or commercialization of
                    Products in the Field. Additionally, FemPharm shall have the
                    right under Section 2.3(b) to negotiate toward a
                    non-exclusive license under the Reversion IP for countries
                    outside of the Territory, New Zealand, and Australia,
                    provided that such license shall be royalty free if this
                    Agreement has been terminated by FemPharm under Section
                    14.2(a) for Vivus' material breach.

                                       66

               (iii) Upon such termination, Vivus will be deemed automatically
                    to grant to FemPharm the non-exclusive right to access, use
                    and cross reference all Regulatory Materials, including all
                    registrations and regulatory approvals, filed by Vivus with,
                    or obtained by Vivus from, the FDA in the development of
                    Products in the Field and Territory; provided that all
                    access, use or cross reference by and under authority of
                    FemPharm shall be solely for the purpose of development and
                    commercialization of Products in the Field in the Territory.
                    Additionally, the Parties agree that FemPharm's right to
                    negotiate under Section 2.3(b) toward a license under the
                    Reversion IP as set forth in Section 14.5(a)(ii) above
                    includes the right to negotiate toward rights to access, use
                    and cross-reference such Regulatory Materials for countries
                    outside the Territory, New Zealand, and Australia.
                    Notwithstanding anything to the contrary, except as
                    expressly set forth in this Section 14.5(a), no right,
                    license, or exclusivity to or under any Intellectual
                    Property is or shall be granted by Vivus or its Affiliates
                    and Vivus and its Affiliates shall maintain all right,
                    title, and interest in and to all Intellectual Property and
                    Know-How. Without limiting the foregoing, no right or
                    license is or shall be granted by Vivus or its Affiliates in
                    or to any trademarks, trade names, logos, or the like.

               (iv) To the extent not previously disclosed by Vivus, Vivus will
                    use reasonable efforts for a period of 90 days after
                    termination of this Agreement to disclose and provide copies
                    to FemPharm of all the Data (as defined in Section 5.18)
                    generated by Vivus during the term of the Agreement that
                    Section 5.18 requires Vivus to disclose and provide copies
                    to FemPharm, and FemPharm (and its Affiliates and licensees)
                    shall have full rights to use such Data for developing and
                    exploiting Product in the Field to the extent that FemPharm
                    is licensed to do so, and is licensed to authorize its
                    Affiliates and sublicensees to do so, as set forth in
                    Sections 14.5(a)(ii) and 14.5(a)(iii) above, and provided
                    that such Data shall remain the Confidential Information of
                    Vivus and its Affiliate and sublicensee, as the case may be.

                                       67

               (v)  To the extent provided for in any supply agreement between
                    Vivus and FemPharm pursuant to Section 8.6 above, Vivus will
                    continue to manufacture (or have manufactured) and supply to
                    FemPharm the Product covered by such agreement for use in
                    the Field and Territory until FemPharm is able to obtain its
                    own supply of its requirements of Products for use in the
                    Field and Territory (provided that such period shall not
                    exceed one (1) year) and will work cooperatively and
                    reasonably with FemPharm to achieve a smooth transition of
                    the manufacture of the Reverted Product to FemPham, and (if
                    applicable) to assist FemPharm in seeking to obtain a
                    manufacturing agreement with Vivus's contract manufacturer
                    of the Reverted Product on commercially reasonable terms,
                    provided that in each case such transition shall not impose
                    an unreasonable burden on Vivus.

               (vi) Vivus shall, within thirty (30) days after termination,
                    return to FemPharm all Confidential Information delivered or
                    provided by FemPharm to Vivus; provided that Vivus shall be
                    entitled to keep a record copy of such Confidential
                    Information and shall not be required to return any product.
                    Article 10 shall survive termination (excluding the
                    obligation to issue a press release under Section 10.13),
                    but only for a period of five (5) years. Notwithstanding
                    termination of Vivus' rights, Vivus and its Affiliates and
                    sublicensees shall have the right to continue to market,
                    sell, offer to sell, and import any Product, in existence at
                    the time of termination, in the Territory for six (6) months
                    after termination PROVIDED THAT the terms of Article 4 will
                    survive and remain in force as to all such sales.

               (vii) In the event an action under Section 12.4 was commenced
                    during the term of the Agreement and is ongoing at the time
                    of termination, Section 12.4 shall continue to apply to the
                    action in accordance with its terms, except that the Party
                    bringing the action for purposes of allocating any recovery
                    under Section 12.4(d) shall be deemed to be the Party
                    controlling the action at the time of termination. If
                    FemPharm assumes control of an action initiated by Vivus,
                    then

                                       68

                    Section 12.4(c)(ii) shall apply as if FemPharm is the Party
                    bringing the action and all costs and expenses incurred by
                    Vivus in the action prior to the date of termination shall
                    be reimbursed out of any recovery before allocation under
                    Section 12.4(d).

               (viii) Section 14.5(c) shall apply.

          (b)  Upon termination of this Agreement pursuant to Section 14.3
               (other than 14.3(d)), or upon any termination (but not
               expiration) of this Agreement after Vivus had previously
               exercised its rights, under Section 14.3(a) or 14.6, to terminate
               portions of this Agreement pursuant to Section 14.6 due to
               uncured material breach, the terms of this Section 14.5(b) shall
               apply.

               (i)  Section 2.1 of this Agreement shall automatically terminate.
                    Notwithstanding termination of Vivus' rights, Vivus and its
                    Affiliates and sublicensees shall have the right to continue
                    to market, sell, offer to sell, and import any Product, in
                    existence at the time of termination, in the Territory for
                    six (6) months after termination PROVIDED THAT the terms of
                    Article 4 will survive and remain in force as to all such
                    sales.

               (ii) Section 2.3(b) shall automatically terminate.

               (iii) Article 10 (excluding the obligation to issue a press
                    release under Section 10.13) shall survive such termination,
                    but only for a period of five (5) years.

               (iv) Each Party shall, within thirty (30) days after termination,
                    return to the other Party all Confidential Information
                    delivered or provided by such other Party, except that it
                    may keep one copy of such information purely for archival
                    purposes and Vivus shall not be required to return Product.

               (v)  In the event an action under Section 12.4 was commenced
                    during the term of the Agreement and is ongoing at the time
                    of termination, Section 12.4 shall continue to apply to the
                    action in accordance with its terms, except that Vivus shall
                    be considered the Party bringing the

                                       69

                    action for purposes of allocating any recovery under Section
                    12.4(d). If FemPharm assumes control of an action initiated
                    by Vivus, then Section 12.4(c)(ii) shall apply as if
                    FemPharm is the Party bringing the action and all costs and
                    expenses incurred by Vivus in the action prior to the date
                    of termination shall be reimbursed out of any recovery
                    before allocation under Section 12.4(d). For clarity, Vivus
                    shall have the right to continue to pursue any such action
                    commenced by Vivus to the extent desired.

               (vi) Section 14.5(c) shall apply.

          (c)  In addition to survival as set forth in Sections 14.5(a) or
               14.5(b) above, as applicable, Sections 1.1, 1.2, 4.9, 9.3, 11.1
               (excluding Vivus' obligation to disclose Improvements), 11.2,
               11.3, 12.2, 13.4, 13.5, 14.1, 14.4, and 14.5 will survive
               termination of the Agreement for any reason and expiration of
               this Agreement, except termination under Section 14.8. Article 15
               shall survive any such termination and expiration of this
               Agreement. Except as otherwise expressly set forth in this
               Section 14.5 above or 14.8, all terms and conditions of this
               Agreement shall terminate and have no further force or effect
               upon any termination or expiration of this Agreement, even if
               termination of the particular Article or Section is not expressly
               referenced in this Section 14.5 or 14.8. For clarity, the
               Development Plan shall be deemed terminated and of no further
               force or effect upon any termination or expiration of this
               Agreement. Notwithstanding anything to the contrary, no payment
               shall be due or payable under Section 3 or 6.2 unless the payment
               became due and payable prior to the date on which the notice of
               termination was given.

14.6     VIVUS TERMINATION OF SPECIFIC PROVISIONS FOR UNCURED BREACH

         If there occurs a material breach by FemPharm of any of the terms and
         conditions under this Agreement, and such breach is not fully cured or
         rectified within ninety (90) days after the giving of written notice by
         Vivus to FemPharm specifying such breach or non-observance and
         requiring rectification thereof, then, subject to Section 15.10, Vivus
         may, as described in Section 14.3, (in lieu of proceeding under Section
         14.3(a)), cause the following changes to occur under the Agreement:

                                       70

          (a)  The following Sections of the Agreement shall automatically
               terminate: 2.3(b), 2.6(b), 5.1, 5.3, 5.6, 5.7, 5.8, 5.9, 5.10,
               5.11, 5.12, 5.13, 5.14, 5.15, 5.16 (but only to the extent
               desired by Vivus), 5.18, 5.21, 7.1(b), 7.2 (except the first two
               sentences), 8.2(b), 8.2(1), 8.2(2), 8.2(3), 8.3, 8.5, 14.2(d),
               and 14.5(a). For clarity, all obligations of Vivus to pay
               reimbursement shall terminate immediately. Vivus shall be
               entitled to withhold consent to development in the Territory
               under Section 2.1(c) for any reason or no reason..

          (b)  Section 8.6 shall terminate, except for the restrictions on
               Product purchased from Vivus. The obligation to issue a press
               release under Section 10.13, and the obligation of Vivus to
               disclose Improvements under Section 11.1, shall terminate except
               to the extent otherwise reasonably specified by Vivus.
               Notwithstanding anything to the contrary, each of FemPharm and
               the Acrux Controlled Affiliates shall, within thirty (30) days of
               Vivus' request return to Vivus all Confidential Information
               delivered or provided by Vivus, except that FemPharm may keep one
               copy of such information purely for archival purposes.

          (c)  Notwithstanding this Section 14.6, Articles 3 and 4 shall survive
               and remain in force. Section 12.4 shall continue to apply in
               accordance with its terms, except that if FemPharm assumes
               control of an action initiated by Vivus, then Section 12.4(c)(ii)
               shall apply as if FemPharm is the Party bringing the action and
               all costs and expenses incurred by Vivus in the action prior to
               the date of Vivus relinquishing control shall be reimbursed out
               of any recovery before allocation under Section 12.4(d). Section
               7.1 shall terminate except for the first and last sentences of
               Section 7.1(a) which shall survive. FemPharm and the Acrux
               Controlled Affiliates shall cooperate in any reasonable manner
               requested by Vivus to achieve a smooth transition to Vivus of any
               and all Development Plan responsibilities of FemPharm.

          (d)  If Vivus elects to exercise its rights under this Section 14.6
               due to an uncured material breach by FemPharm of its obligations
               under Section 2.5(b), then Section 2.5(a) shall be deemed to
               terminate unless Vivus achieves an injunction that enjoins
               FemPharm from further violations of the terms of Section 2.5(b).

                                       71

14.7     LIMITATION OF TERMINATION FOR BREACH AFTER COMMERCIAL LAUNCH

         Commencing upon the First Commercial Sale of a Product in the
         Territory, but subject to Section 15.10, FemPharm shall have the right
         to terminate the Agreement under Section 14.2(a) only for the following
         uncured material breaches by Vivus:

          (a)  Material breach of the obligations in Section 8.2(a) or 8.2(c);

          (b)  Breach of the payment obligations under the Agreement, which
               breach remains uncured one hundred twenty days after notice.

         If Vivus materially breaches any other obligation under the Agreement,
         and such breach would permit termination of the Agreement under Section
         14.2(a) but for this Section 14.7, and such breach is not fully cured
         or rectified within ninety (90) days after the giving of written notice
         by FemPharm to Vivus specifying such breach or non-observance and
         requiring rectification thereof, provided that if such breach (other
         than a payment breach) is not capable of cure within the initial ninety
         (90) day period and Vivus is making diligent good faith efforts to
         cure, then Vivus shall have an additional ninety (90) days to cure such
         breach, then (subject to Section 15.10) FemPharm shall have the right
         to cause the following changes to the Agreement on written notice to
         Vivus (but not to terminate the Agreement in its entirety):

               (i)  The following Sections of the Agreement shall automatically
                    terminate: 2.4, 2.7, 5.2, 5.18, and 5.19.

               (ii) The penultimate sentence of Section 7.1(a) shall terminate.
                    The obligations of FemPharm in the penultimate sentence of
                    Section 7.2 shall terminate, and only the rights of FemPharm
                    under such sentence shall survive.

               (iii) If FemPharm elects to exercise its rights under this
                    Section 14.7 due to an uncured material breach by Vivus of
                    its obligations under Section 2.5(a), then Section 2.5(b)
                    shall be deemed to terminate unless FemPharm achieves an
                    injunction that enjoins Vivus from further violations of the
                    terms of Section 2.5(a).

                                       72

14.8     TERMINATION FOR FAILURE TO ACHIEVE (*)

         Vivus has the right to terminate this Agreement by providing written
         notice thereof to FemPharm within thirty (30) days after the occurrence
         of the following: Acrux DDS Pty Limited. has not (*) within (*) after
         the Effective Date that (*). If Vivus terminates the Agreement under
         this Section 14.8, then:

          (a)  FemPharm shall (*), and (*) Additionally, FemPharm and Acrux
               Limited shall promptly (*) of this Section 14.8.

          (b)  In the event of termination under this Section 14.8, all terms
               and conditions of this Agreement shall terminate and have no
               further force or effect except that this Section 14.8 and
               Articles and Sections 9.3, 10 (but only for five (5) years after
               termination and excluding the obligation to issue a press release
               under Section 10.13), 11.2, 11.3, 12.2, 13.4, 13.5, 14.4, 14.9,
               and 15 shall survive. For clarity, all of Vivus' payment
               obligations, including obligations to reimburse FemPharm, shall
               terminate and have no further force or effect immediately upon
               Vivus' notice. The Development Plan shall be deemed terminated
               and of no further force or effect.

                                       73

14.9     REMEDIES

         Termination of this Agreement as provided in Sections 5.19(b), 14.2,
         14.3, and 14.8, and termination of certain provisions of this Agreement
         as provided in Section 14.6 and 14.7, is a cumulative remedy, and each
         Party will be entitled to seek any other rights or remedies available
         to it at law or in equity for any breach or non-observance of this
         Agreement.


15.      GENERAL
--------------------------------------------------------------------------------
15.1     NOTICES

         Any notice given pursuant to this Agreement must be in writing and may
         be given by pre-paid express courier addressed to the other Party at
         the address specified in this Agreement or as subsequently notified in
         writing, or by hand delivery or facsimile or electronic transmission to
         the same address and any such notice is deemed to have been received:

          (a)  if served by express courier on the date signed for;

          (b)  if served by hand delivery, on the date delivered by hand;

          (c)  if sent by facsimile transmission, when the transmitting machine
               produces a written report that the notice has been effectively
               sent to the other party, if the sender confirms such notice by
               express courier or hand delivery;

          (d)  if sent by electronic transmission, when the transmitting
               computer produces a written report that the notice has been
               effectively sent to the other party, if the sender confirms such
               notice by express courier or hand delivery;

         If a notice is deemed under clause (c) or (d) to have been received on
         a day which is not a Business Day, it is deemed to have been received
         on the next Business Day.

                                       74

         The address for service of any notice is:

         To FemPharm

         FemPharm Pty Ltd
         103-113 Stanley Street
         West Melbourne   Victoria    3003
         Australia
         Facsimile:
         Email:

         with a copy to:

         Mr. P G Willcocks
         Lander & Rogers, Lawyers
         Level 12, 600 Bourke Street
         Melbourne Victoria 3000
         Australia
         Facsimile:
         Email:

         To Vivus


         with a copy to:
         Facsimile:
         Email:

15.2     INDEMNIFICATION

          (a)  Vivus is responsible for, and will indemnify, hold harmless and
               defend FemPharm, its Affiliates and their respective officers,
               directors, employees and agents against any and all claims,
               damages, losses, costs, expenses (including reasonable attorneys'
               and professional fees and other expenses of litigation), and
               liabilities, resulting from any third party claims, actions,
               suits, or allegations ("Claims") to the extent the Claim results
               from or arises out of: (a) the negligence, recklessness, or
               willful misconduct of Vivus, its Controlled Affiliates, or its
               sub-licensees, or their respective officers, directors,
               employees, or agents; (b) Vivus's breach of its obligations,
               representations or warranties under this Agreement; or (c) the
               development, manufacture, promotion, use or sale of any Product
               by Vivus, its Affiliate, or its sub-licensee, or by any of their
               respective customers or end-users.

                                       75

               Notwithstanding the foregoing, Vivus's obligations under this
               Section 15.2 will not apply to any Claim, to the extent that such
               Claim arises out of or results from (i) the development,
               manufacture, use, promotion, and/or sale of any product or
               technology (including Product) by FemPharm or its Affiliate or
               licensee (other than Vivus, but including Product sold by Vivus
               under any supply agreement with FemPharm or any Acrux Controlled
               Affiliate), or any of their respective customers or end-users;
               (ii) FemPharm's or an Acrux Controlled Affiliate's breach of its
               obligations, representations, or warranties under this Agreement;
               or (iii) the negligence, recklessness, or willful misconduct of
               FemPharm, its Affiliates, or licensees (other than Vivus) or
               their respective officers, directors, employees, or agents; or
               (iv) claims of any participant in the Phase IIb Study or any
               other Clinical Trials performed by or under authority of FemPharm
               or an Acrux Controlled Affiliate.

          (b)  FemPharm and Acrux Limited shall be responsible for, and will
               indemnify, hold harmless and defend Vivus, its Affiliates and
               their respective officers, directors, employees and agents
               against any and all claims, damages, losses, costs, expenses
               (including reasonable attorneys' and professional fees and other
               expenses of litigation), and liabilities, resulting from any
               third party claims, actions, suits, or allegations ("Claims")
               resulting from or arising out of: (i) the development,
               manufacture, use, promotion, and/or sale of any product
               (including Product) by FemPharm or an Acrux Controlled Affiliate
               or their licensees (other than Vivus, but including Product sold
               by Vivus under any supply agreement with FemPharm or any Acrux
               Controlled Affiliate and including liability to patients in
               connection with any Clinical Trials by FemPharm), or any of
               FemPharm's or an Acrux Controlled Affiliate's or FemPharm
               licensee's respective customers or end-users; (ii) FemPharm's or
               an Acrux Controlled Affiliate's breach of its obligations,
               representations, or warranties under this Agreement; or (iii) the
               negligence, recklessness, or willful misconduct of FemPharm, an
               Acrux Controlled Affiliate, or licensees (other than Vivus) or
               their respective officers, directors, employees, or agents.
               Notwithstanding the foregoing, FemPharm's and Acrux Limited's
               obligations under this Section 15.2 will not apply to any Claim,
               to the extent that such Claim is the subject of an
               indemnification obligation under Section 15.2(a) above.

                                       76

          (c)  A Party that intends to claim indemnification under this Section
               15 (the "Indemnitee") shall promptly notify the other Party (the
               "Indemnitor") in writing of any Claim, in respect of which the
               Indemnitee intends to claim such indemnification, and the
               Indemnitor shall have sole control of the defense and/or
               settlement thereof. The indemnity arrangement in this Section 15
               shall not apply to amounts paid in settlement of any action with
               respect to a Claim, if such settlement is effected without the
               consent of the Indemnitor, which consent shall not be withheld
               unreasonably. The failure to deliver written notice to the
               Indemnitor within a reasonable time after the commencement of any
               action with respect to a Claim, if prejudicial to its ability to
               defend such action, shall relieve such Indemnitor of any
               liability to the Indemnitee under this Section 15 but the
               omission so to deliver written notice to the Indemnitor shall not
               relieve the Indemnitor of any liability that it may have to any
               Indemnitee otherwise than under this Section 15. The Indemnitee
               under this Section 15, shall cooperate fully with the Indemnitor
               and its legal representatives in the investigation of any action
               with respect to a Claim covered by this indemnification, at the
               Indemnitor's expense. Notwithstanding the foregoing, the
               Indemnitor shall not be responsible for any costs or expenses
               incurred by the Indemnitee or its Affiliate, or the directors,
               officers, employees, successors or assigns of the Indemnitee or
               its Affiliate, without the prior written consent of the
               Indemnitor, not to be unreasonably withheld.

15.3     DAMAGES FOR BREACH OF REPRESENTATIONS AND WARRANTIES

         Notwithstanding anything to the contrary, a breach of warranty under
         this Agreement shall have the same effect as a breach of a covenant,
         and each Party shall be entitled to recover for a breach of a warranty
         by the other Party the same contractual damages as if such other Party
         had breached a covenant, subject to Section 13.5.

                                       77

15.4     WAIVER

         A waiver by any Party of any breach or a failure to enforce or to
         insist upon the observance of a condition of this Agreement will not be
         a waiver of any other or of any subsequent breach. No waiver under this
         Agreement is binding unless in writing and signed by the Party giving
         the waiver.

15.5     SEVERANCE

         If any part of this Agreement is held to be invalid, unenforceable,
         illegal, void or voidable for any reason, this Agreement will be
         construed and be binding on the Parties to the maximum extent possible,
         as if the invalid, unenforceable, illegal, void or voidable part had
         been deleted from this Agreement or read down to the extent necessary
         to overcome the difficulty.

15.6     SUCCESSORS AND ASSIGNS

         This Agreement is binding on and continues for the benefit of each
         Party, its successors and permitted assigns.

15.7     CONTINUING OBLIGATIONS

         The expiration or termination of this Agreement does not operate to
         terminate any of the surviving obligations under this Agreement, which
         will remain in full force and effect and binding on the Party
         concerned.

15.8     VARIATION

         No variation, modification or amendment of this Agreement is binding on
         the Parties unless in writing and signed by both Parties.

15.9     APPLICABLE LAW

         This Agreement, and all disputes under Section 15.10, shall be governed
         by and construed in accordance with the laws of California, USA, and
         the Parties submit themselves to the non-exclusive jurisdiction of the
         courts having San Francisco within their jurisdiction.

                                       78

15.10    DISPUTE RESOLUTION

         If any claim, controversy, difference or dispute between the Parties
         arises at any time under this Agreement, including as to its existence,
         validity, interpretation, effect, breach or termination, (a "Dispute"),
         then either Party may give the other a written notice of Dispute
         reasonably identifying and providing a description of the Dispute.
         Notwithstanding the existence of a Dispute, the Parties must continue
         to perform this Agreement, unless the Agreement is terminated in
         accordance with its terms. If there is a Dispute, however, regarding
         whether or not a breach of this Agreement has occurred, then notice of
         such a Dispute will toll the cure period, and the Agreement will remain
         in effect until the Dispute is resolved. If such a Dispute is finally
         resolved in favour of the Party giving notice of breach, then the
         Agreement will terminate sixty (60) days after the final determination
         is made unless the other Party cures the breach within such sixty (60)
         day period. If a Party gives written notice of a Dispute, then senior
         executive officers from both Parties will meet promptly thereafter and
         negotiate in good faith to resolve the Dispute as quickly and cost
         effectively as possible. If the Parties have not resolved the Dispute
         within sixty (60) days of the date of the written notice of the
         Dispute, then either Party may, by written notice to the other Party,
         submit such Dispute to final and binding arbitration under the then
         current Comprehensive Arbitration Rules and Procedures of the Judicial
         Arbitration and Mediation Services ("JAMS"), except as such rules may
         be modified in this agreement ("Rules"). The Parties agree that any
         such Dispute will be settled by three (3) arbitrators which are
         appointed within 90 days of service by one Party of a request for
         arbitration on the other Party. Each Party will select one arbitrator,
         and the third arbitrator will be appointed by JAMS, as provided in the
         Rules. The arbitration proceedings will take place, and the
         arbitrators' award will be rendered, in Honolulu, Hawaii or such other
         location as may be agreed in writing by the Parties. The decision of
         the arbitrators will be final and binding on the Parties. The
         arbitrators will prepare and deliver to the Parties a written, reasoned
         opinion conferring their decision. Judgment on the award so rendered
         may be entered in any court having competent jurisdiction thereover.
         Each Party may, without breach of this Section 15.10 or waiving any
         remedy under this Agreement, seek from any court having jurisdiction
         any injunctive or provisional relief necessary to protect the rights or

                                       79

         property of that Party pending the arbitration award. Each Party shall
         bear its own costs and expenses and attorneys' fees and an equal share
         of the arbitrators' and any administrative fees of arbitration. The
         Parties further agree that any payments made pursuant to this Agreement
         pending resolution of the dispute shall be refunded if an arbitrator or
         court determines that such payments are not due.

15.11    DISPUTE REGARDING LICENSE NECESSITY.

         If FemPharm disputes, under Section 4.3, that a particular patent
         license is "necessary" as defined in that Section, then the Parties
         shall resolve such dispute by submitting such dispute for resolution to
         a mutually agreed independent patent attorney with substantial
         experience regarding the scope, validity and enforceability of patents
         covering subject matters similar to the third party patent in question
         (the "Neutral"). If the Parties cannot agree on a Neutral within thirty
         (30) days of the request of either Party, then the Neutral shall be
         selected by the Chairman of the Intellectual Property section of the
         American Bar Association. The Neutral shall not have any current
         interest in or current or prior involvement with either Party, unless
         the Parties agree otherwise. Within 10 days following the
         identification of the Neutral, each Party shall submit to the Neutral
         in writing its statement of the issue in dispute; and the basis for its
         position that the patent license that is the subject of the dispute is,
         or is not, (as applicable) "necessary" as defined in Section 4.3. No
         ex-parte communication with the Neutral shall be allowed without the
         consent of the other Party. The Neutral may follow such procedures as
         he or she desires, provided that the Neutral shall decide the issue in
         favor of one Party within thirty (30) days of submission of the
         statements. If the Neutral determines that the subject patent license
         is "necessary", then Vivus shall be entitled to credit royalties as
         provided in Section 4.3, and otherwise no credit shall be permitted
         (except as may otherwise be agreed by the Parties in writing). The
         Parties shall equally share the costs associated with the Neutral's
         activities under this Section 15.11. Each Party shall cooperate to
         allow the Neutral to complete his/her obligations under this Section.
         If Vivus has in fact taken a license for the Product, the license shall
         be considered necessary unless otherwise established in such
         proceeding.

                                       80

15.12    COUNTERPARTS

         This Agreement may be signed in any number of counterparts and all such
         counterparts taken together are deemed to constitute one and the same
         document.

15.13    COSTS

         Each Party must pay their own legal, accounting and other costs in
         relation to the negotiation, preparation, execution and implementation
         of this Agreement.

15.14    PAYMENT

         All payments to be made under this Agreement must be paid by electronic
         transfer to the bank account nominated in writing by the Party to whom
         the payment is to be made and received into that account in cleared
         funds on the date the payment is due.

15.15    ENTIRE AGREEMENT

         This Agreement, and the Guaranty Agreement, constitutes the entire
         agreement and basis of the transaction between the Parties in relation
         to its subject matter and supersedes all other prior and
         contemporaneous communications, negotiations, arrangements and
         agreements between FemPharm and Vivus whether oral or in writing,
         except that confidential information disclosed by a Party pursuant to
         the non disclosure agreement between FemPharm and Vivus prior to the
         Effective Date shall be treated as Confidential Information of the
         disclosing Party to the extent set forth in this Agreement, and the
         Estradiol Agreement shall remain in full force and effect.

15.16    INJUNCTIVE RELIEF

         Each Party acknowledges that monetary damages alone may not be adequate
         compensation for a breach of this Agreement by the other Party,
         including breach of Article 10. Each Party is entitled to seek
         injunctive relief from a court of competent jurisdiction as a remedy
         for any breach or threatened breach of this Agreement, in addition to
         any other remedies available at law or in equity under or independently
         of this Agreement, each to the extent available in accordance with
         applicable law.

                                       81

15.17    INDEPENDENT CONTRACTORS

         The relationship of the Parties hereto is that of independent
         contractors. The Parties hereto shall not be deemed to be agents,
         partners or joint venturers of the others for any purpose as a result
         of this Agreement or the transactions contemplated thereby, and neither
         Party shall have the authority to agree to any obligation or commitment
         for the other.

15.18    FORCE MAJEURE

         Neither Party shall lose any rights hereunder, be considered in breach
         of this Agreement, or be liable to the other Party for damages or
         losses on account of its failure to perform if the failure is
         occasioned by war, strike, fire, act of God, earthquake, flood,
         lockout, embargo, failure of suppliers, power failures, or any other
         reason where failure to perform is beyond the reasonable control of the
         non-performing Party (a "Force Majeure"), provided that after the Force
         Majeure occurs, the non-performing Party uses reasonable efforts to
         avoid the effects of such Force Majeure, and to perform its
         obligations, each to the extent reasonably practicable (it being agreed
         that in no event shall a Party be required to settle any labor dispute
         or disturbance).

15.19    BANKRUPTCY

         All rights and licenses granted under or pursuant to this Agreement by
         each Party as a licensor are, and shall otherwise be deemed to be, for
         purposes of Section 365(n) of Title 11, U.S. Code (the "Bankruptcy
         Code"), licenses of rights to "intellectual property" as defined under
         section 101(35A) of the Bankruptcy Code. The Parties agree that each
         licensee of such rights under this Agreement, shall retain and may
         fully exercise all rights and elections it would have in the case of a
         licensor bankruptcy under the Bankruptcy Code. Each Party agrees during
         the term of this Agreement to create or maintain current copies, or if
         not amenable to copying, detailed descriptions or other appropriate
         embodiments, of all such intellectual property licensed to the other
         Party.

15.20    ACRUX DDS AS A PARTY

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         Acrux DDS Pty Limited agrees to be fully and independently bound by the
         Sections to which it is expressly a party under this Agreement, and
         including also the provisions of Article14 (it being understood that
         only Vivus or FemPharm may terminate this Agreement in accordance with
         its terms). Notwithstanding the foregoing, Acrux DDS Pty Limited
         acknowledges that Vivus shall have no independent obligations to Acrux
         DDS Pty Limited under this Agreement, and all of Vivus' obligations
         under this Agreement and this Section 15.20 shall be satisfied upon
         Vivus' performance or tender of performance to FemPharm. In addition,
         any notice given to or from FemPharm and FemPharm's consent, approval,
         agreement, actions or inactions shall be deemed notices to and from,
         and the consent, approval, or agreement of, or actions or inactions
         authorized by Acrux DDS Pty Limited. Acrux DDS Pty Limited agrees to be
         likewise bound by any and all amendments to this Agreement, which
         amendments shall not require Acrux DDS' Pty Limited's approval. It is
         understood and agreed that Acrux DDS Pty Limited may look only to
         FemPharm for any share of or benefit from Vivus' performance or
         undertakings under this Agreement, and Vivus shall have no
         responsibilities to Acrux DDS Pty Limited in that regard.

15.21    SURVIVAL OF SUBLICENSES

         If FemPharm terminates the Agreement, then any existing sublicense
         agreement with a non-Affiliate granted by Vivus hereunder shall remain
         in force provided that such sublicensee agrees in writing to be bound
         by and perform to the same extent as required of Vivus under this
         Agreement. For clarity, it is understood that the foregoing shall not
         have the effect of expanding or increasing the rights of the
         sublicensee beyond the rights granted to it under the sublicense
         agreement.

EXECUTED by FEMPHARM PTY                       )
LTD by being signed by:                        )
                                               )
                                               )
                                               )
                                               )
/s/ Igor Gonda                                   /s/ Igor Gonda
--------------------------------------           -------------------------------
Signature of director/secretary                  Signature of director

                                       83

Igor Gonda                                       Igor Gonda
--------------------------------------           -------------------------------
Name of director/secretary (please print)        Name of director (please print)




EXECUTED by VIVUS INC. by being                )
signed by:                                     )
                                               )
                                               )
                                               )
                                               )
                                                 /s/ Leland Wilson
                                                 -------------------------------
                                                 Signature

Leland Wilson, President & CEO
-------------------------------------            -------------------------------
                                                 Name and Title




EXECUTED by ACRUX DDS PTY                      )
LTD by being signed by:                        )
                                               )
                                               )
                                               )
                                               )
/s/ Igor Gonda                                   /s/ Igor Gonda
-------------------------------------            -------------------------------
Signature of director/secretary                  Signature of director

Igor Gonda                                       Igor Gonda
-------------------------------------            -------------------------------
Name of director/secretary (please print)        Name of director (please print)

-------   -------   ----------   -----------   -------   -------   ----------
PATENTS                                        DATE OF   DATE OF   EXPIRATION
GRANTED   COUNTRY   PATENT NO.   APPLIC. NO.   ISSUE     FILING    DATE
-------   -------   ----------   -----------   -------   -------   ----------


                                      (**)

    5.2      TRANSFER OF TECHNICAL INFORMATION...............................35
    5.3      CONDUCT OF PHASE IIB STUDY......................................36
    5.4      TRANSFER OF DEVELOPMENT RESPONSIBILITY..........................36
    5.5      DEVELOPMENT RESPONSIBILITIES....................................36
    5.6      DEVELOPMENT COMMITTEE...........................................36
    5.7      DEVELOPMENT PLANS...............................................38
    5.8      BUDGETS.........................................................39
    5.9      STEERING COMMITTEE..............................................39
    5.10     FINAL DECISION..................................................40
    5.11     PROCEDURES OF COMMITTEES........................................40
    5.12     DECISIONS OF COMMITTEES.........................................41
    5.13     CHAIRPERSONS - DEVELOPMENT COMMITTEE............................41
    5.14     CHAIRPERSONS - STEERING COMMITTEE...............................42
    5.15     MINUTES AND REPORTS.............................................42
    5.16     GLOBAL DEVELOPMENT COMMITTEE....................................42
    5.17     NO OBLIGATION TO TRANSLATE......................................43
    5.18     INFORMATION AND RESULTS.........................................43
    5.19     PRODUCT FAILURE.................................................44
    5.20     SUBCONTRACTS....................................................46
    5.21     CLINICAL PRODUCT SUPPLY.........................................46

6.  DILIGENCE OBLIGATIONS....................................................46

    6.1      PRODUCT DEVELOPMENT DILIGENCE OBLIGATIONS.......................46
    6.2      DILIGENCE PAYMENT FOR DEVELOPMENT DELAYS........................47
    6.3      REVERSION FOR FAILURE OF DILIGENCE..............................48

7.  REGULATORY MATTERS.......................................................49

    7.1      REGULATORY MATERIALS............................................49
    7.2      RELATIONSHIP WITH REGULATORY AUTHORITIES........................50
    7.3      ADVERSE EVENTS AND COMPLAINTS REPORTING.........................51

8.  PRODUCT COMMERCIALIZATION................................................52

    8.1      OVERVIEW........................................................52
    8.2      COMMERCIALIZATION OBLIGATIONS...................................52
    8.3      COMMERCIALIZATION PLANS.........................................53
    8.4      LAUNCH DILIGENCE................................................54
    8.5      MANUFACTURE IN TERRITORY........................................54
    8.6      SUPPLY OF PRODUCT TO FEMPHARM...................................54

9.  SUB-LICENSING AND ASSIGNMENT.............................................55

    9.1      SUB-LICENSE.....................................................55
    9.2      VIVUS BOUND.....................................................55
    9.3      ASSIGNMENT......................................................55

10. CONFIDENTIALITY..........................................................56

    10.1     RESTRICTIONS ON USE.............................................56
    10.2     USE OF OWN INFORMATION..........................................56
    10.3     EXCEPTIONS TO CONFIDENTIALITY...................................57
    10.4     EXCEPTIONS TO NON-DISCLOSURE....................................57
    10.5     DISCLOSURE BY LAW...............................................58
    10.6     SCOPE OF CONFIDENTIALITY........................................59
    10.7     SECURITY OF INFORMATION.........................................59
    10.8     PERSONNEL CONFIDENTIALITY.......................................59
    10.9     RETURN OF CONFIDENTIAL INFORMATION..............................59
    10.10    PUBLICATIONS....................................................60
    10.11    OTHER RIGHTS....................................................60
    10.12    USE OF OTHER PARTY'S NAME.......................................60
    10.13    PRESS RELEASES AND OTHER DISCLOSURES............................60

11. INVENTIONS...............................................................62

    11.1     DISCLOSURE OF INVENTIONS........................................62
    11.2     OWNERSHIP OF INVENTIONS AND INTELLECTUAL PROPERTY RIGHTS........62
    11.3     JOINT INVENTIONS AND JOINT PATENTS..............................62
    11.4     COOPERATION OF EMPLOYEES........................................63

12. PATENTS AND INTELLECTUAL PROPERTY........................................63

    12.1     PATENT RIGHTS...................................................63
    12.2     JOINT PATENT RIGHTS.............................................64
    12.3     FEMPHARM PATENT PROCEEDINGS.....................................65
    12.4     INFRINGEMENT PROCEEDINGS IN THE FIELD...........................66
    12.5     OTHER INFRINGEMENT PROCEEDINGS..................................68

13. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS..............................68

    13.1     WARRANTY........................................................68
    13.2     ADDITIONAL WARRANTIES OF FEMPHARM AND THE
              ACRUX CONTROLLED AFFILIATES....................................68
    13.3     ADDITIONAL WARRANTIES OF VIVUS..................................72

                                        4

    13.4     DISCLAIMER OF WARRANTIES........................................73
    13.5     DISCLAIMER OF LIABILITY.........................................73

14. TERM AND TERMINATION.....................................................73

    14.1     TERM............................................................73
    14.2     TERMINATION BY FEMPHARM.........................................74
    14.3     TERMINATION BY VIVUS............................................75
    14.4     NO RELEASE......................................................76
    14.5     CONSEQUENCES OF AGREEMENT TERMINATION...........................76
    14.6     VIVUS TERMINATION OF SPECIFIC PROVISIONS FOR UNCURED BREACH.....81
    14.7     LIMITATION OF TERMINATION FOR BREACH AFTER COMMERCIAL LAUNCH....82
    14.8     TERMINATION FOR FAILURE TO ACHIEVE MONASH AMENDMENT.............83
    14.9     REMEDIES........................................................84

15. GENERAL..................................................................85

    15.1     NOTICES.........................................................85
    15.2     INDEMNIFICATION.................................................86
    15.3     DAMAGES FOR BREACH OF REPRESENTATIONS AND WARRANTIES............88
    15.4     WAIVER..........................................................88
    15.5     SEVERANCE.......................................................89
    15.6     SUCCESSORS AND ASSIGNS..........................................89
    15.7     CONTINUING OBLIGATIONS..........................................89
    15.8     VARIATION.......................................................89
    15.9     APPLICABLE LAW..................................................89
    15.10    DISPUTE RESOLUTION..............................................90
    15.11    DISPUTE REGARDING LICENSE NECESSITY.............................91
    15.12    COUNTERPARTS....................................................92

                                        5

    15.13    COSTS...........................................................92
    15.14    PAYMENT.........................................................92
    15.15    ENTIRE AGREEMENT................................................92
    15.16    INJUNCTIVE RELIEF...............................................92
    15.17    INDEPENDENT CONTRACTORS.........................................93
    15.18    FORCE MAJEURE...................................................93
    15.19    BANKRUPTCY......................................................93
    15.20    ACRUX DDS AS A PARTY............................................94
    15.21    SURVIVAL OF SUBLICENSES.........................................94

         The accountants appointed under Section 4.8 are not authorised to, and
         will not, disclose to FemPharm any information other than the accuracy
         or inaccuracy of the amounts to be verified and will be required to
         execute a reasonable confidentiality agreement with Vivus and/or the
         sublicensee or Affiliate, as applicable.

4.10     STATEMENT ERRORS

         Should it be established from any report and verification referred to
         in Sections 4.7 and 4.8 that the royalties which should have been paid
         in respect of any Royalty Period to which the report and verification
         relates are more or less than the royalties actually paid then the
         difference will be remitted within ten (10) Business Days:

          (a)  to FemPharm (in the case of the royalty paid being less than that
               which should have been paid);

                                       33

          (b)  to Vivus (in the case of the royalty paid being more than that
               which should have been paid).

4.11     CURRENCY CONVERSION

         If the Territory includes any country outside the United States of
         America, all Net Sales resulting from sales of the Product in countries
         other than the United States of America will be converted into United
         States dollars for purposes of calculating royalties owed under this
         Article 4, by using the arithmetic average of the currency exchange
         rates quoted on each of the last ten (10) Business Days during the
         applicable Royalty Period in the Wall Street Journal (East Coast
         Edition). All payments by Vivus hereunder shall be made in US dollars.

4.12     WITHHOLDING TAXES

         If any taxes, withholding or otherwise, are levied by any taxing
         authority in connection with the accrual or payment of royalties or
         other amounts payable under this Agreement and are obliged to be paid
         or deducted by Vivus then:

          (a)  Vivus will pay such taxes to such taxing authority on behalf of
               FemPharm; and

          (b)  Vivus will remit to FemPharm in full satisfaction of its royalty
               obligations under this Agreement the net amount after reduction
               by the amount of such taxes; and

          (c)  Vivus will deliver to FemPharm promptly following payment written
               evidence of such payment and such other related documentation
               that FemPharm may reasonably require.

5.       CLINICAL DEVELOPMENT
--------------------------------------------------------------------------------
5.1      OVERVIEW OF DEVELOPMENT

         The Parties intend to work cooperatively to pursue development of the
         Product in order to obtain regulatory approval for the use of the
         Product in the Field in the Territory, using commercially reasonable,
         diligent efforts in accordance with and subject to the terms of this
         Agreement.

                                       34

5.2      TRANSFER OF TECHNICAL INFORMATION

         Within sixty (60) days after the Effective Date, FemPharm shall
         transfer to Vivus without charge copies of all existing Licensed
         Know-How, including (to the extent existing) (i) copies of all
         Regulatory Materials and other Know-How developed or acquired in
         connection with any clinical or pre-clinical development in connection
         with, or directly applicable to, a Product in the Field, whether
         developed or acquired by FemPharm, any Acrux Controlled Affiliate, or
         others working under authority of such entities; and (ii) copies of all
         material Know-How relating to or used in connection with, or relevant
         to, the manufacturing of Products by FemPharm, any Acrux Controlled
         Affiliate, or others, including, such Know-How as generated or used
         during process development, stability studies, formulation development,
         scale up of manufacturing, production of preclinical and clinical
         product batches, validation studies, development of quality
         assurance/quality control testing, process controls for Products in the
         Field, and related regulatory affairs (all to the extent relating to
         Products in the Field); and all Know-How contained in the DMF or in the
         CMC section of any IND or NDA (or their counterparts in other
         countries) with respect to Products in the Field. Thereafter during the
         term of this Agreement, upon request of Vivus, FemPharm shall transfer
         to Vivus without charge copies of all such previously undisclosed
         Licensed Know-How, if any, including that developed or acquired after
         the Effective Date, and shall use all reasonable efforts to enable and
         assist Vivus in understanding and implementing the Licensed Know-How.
         FemPharm and the Acrux Controlled Affiliates shall use good faith,
         diligent efforts to obtain from each of their other licensees the right
         to disclose to Vivus, its Affiliates and their sublicensees, Know-How
         and Regulatory Materials that are relevant to, or useful for, Products.
         In addition, if requested by Vivus and at Vivus' expense for actual
         reasonable internal time of FemPharm or its Affiliate's time (billed at
         (*)% the applicable employee's salary and benefits), FemPharm shall
         generate and provide to Vivus reasonably promptly a report describing
         in reasonable detail (according to an agreed format) all research and
         development conducted or completed by or under authority of any of
         FemPharm and the Acrux Controlled Affiliates, and the results thereof,
         with respect to MDTS products involving the delivery of Estradiol.

                                       35

5.3      DEVELOPMENT RESPONSIBILITIES

         Except as otherwise determined by the Parties, Vivus will be solely
         responsible for conducting, at its own expense, all activities relating
         to the clinical development, regulatory approval and commercialization
         of the Product in the Territory, using diligent, commercially
         reasonable efforts, provided that both Parties will use such efforts to
         perform their responsibilities to achieve the targets set forth in the
         Development Plan. Vivus will pay to Fempharm, prior to the beginning of
         a calendar quarter, an amount equal to the FemPharm expenses in the
         approved budget in the Development Plan for such quarter, including
         payments to third parties and fully burdened FTE costs of labour
         associated with work at FemPharm and its Affiliates pursuant to this
         Agreement ((*)% of salary and benefits, plus any out of pocket expenses
         provided for in the Development Plan). FemPharm will maintain
         reasonably detailed records of the time expended and work performed in
         the development and will provide copies and a summery of such records,
         and a reconciliation of expenditures, for each such quarter to Vivus
         within fifteen (15) Business Days of the end of the quarter. The actual
         expenditure versus budget for the previous quarter will be reconciled
         in the payment from Vivus to Acrux for the following quarter or
         refunded to Vivus, as Vivus requests. Vivus shall not be required to
         reimburse any cost or expenses, other than those set forth in the
         Development Plan, except to the extent approved by Vivus in advance in
         writing. Vivus shall not be required to develop more than one Product
         at a time, and shall have no obligation to develop another Product in
         the Territory after a marketing approval of a Product in the Field has
         been obtained in the Territory.

5.4      DEVELOPMENT COMMITTEE

         Within thirty (30) days of the Effective Date, the Parties will
         establish a committee to review and discuss the development of the
         Product (the "Development Committee"),

                                       36

         comprising two (2) members of FemPharm's (or the Acrux Controlled
         Affiliate's) staff nominated by FemPharm and two (2) members of Vivus'
         staff nominated by Vivus. At least one member appointed by each Party
         shall have appropriate technical credentials, experience and knowledge
         and ongoing familiarity with, in the case of Vivus, the development
         under this Agreement and, in the case of FemPharm, any pre-clinical and
         clinical development of Product by FemPharm or the Acrux Controlled
         Affiliate, as well as the Licensed Intellectual Property and the
         development and use thereof. If relevant Product development is being
         performed by an Acrux Controlled Affiliate, then Vivus shall have the
         right to require that at least one of FemPharm's members be an employee
         of the Acrux Controlled Affiliate who is involved in such development
         or, in the alternative, to require that such an employee otherwise
         attend the Development Committee meetings. Each Party will give the
         other written notification concerning its staff members who are
         nominated to serve on the Development Committee. Subject to the
         foregoing, either Party may replace any of its members on the
         Development Committee by written notice. Additionally, Vivus shall be
         entitled to have representatives of its sublicensees attend the
         meetings as it considers appropriate. The Development Committee is
         responsible for review and approval of the Development Planand is
         additionally intended to provide a forum to:

          (a)  Enable Vivus to obtain scientific, clinical and regulatory input
               and data from FemPharm relating to development of the Product in
               the Territory, including with respect to work that each Party has
               performed in accordance with the Development Plan, and to keep
               Vivus informed regarding the work of FemPharm and the Acrux
               Controlled Affiliates related to Product;

          (b)  keep FemPharm reasonably apprised of the progress and results of,
               and planned activities related to, development of Products in the
               Field in the Territory under the Development Plan, sufficient for
               FemPharm to understand the general status of the development
               under the Development Plan and nature of any significant issues
               that Vivus has encountered that have caused Vivus to fail to meet

                                       37

               the schedule targeted in the Development Plan, and to review and
               approve, as appropriate, the Development Plans proposed by Vivus;

          (c)  evaluate the markets of the Product for use in the Field in
               relation to the development strategy for the Product, and adjust
               the Development Plan appropriately based thereon; and

          (d)  foster a cooperative relationship between the Parties regarding
               activities under this Agreement and the other activities of
               FemPharm and the Acrux Controlled Affiliates with respect to
               Product.

         To the extent requested by the Steering Committee, the Development
         Committee will keep the Steering Committee informed about the status of
         the activities conducted by the Development Committee pursuant to this
         Agreement. The Development Committee will refer all matters that are to
         be decided by the Development Committee, but for which agreement cannot
         be reached by the Development Committee, to the Steering Committee for
         the Steering Committee's review and final decision on such matters. The
         Development Committee will establish rules for its operation. After
         marketing approval of a Product is obtained, the Development Committee
         shall not be required to meet if there is no significant Product
         development by Vivus to discuss at the applicable time.

5.5      DEVELOPMENT PLANS

         The development of the Product will be conducted by the Parties, each
         using diligent, commercially reasonable efforts to perform its
         responsibilities set forth in the Development Plan. The Parties expect
         that an initial Development Plan will be appended to the Agreement as
         annexure A within one hundred eighty (180) days after the Effective
         Date, reflecting the Parties' understanding and intent at such time of
         the planned Product development activities in the Territory for the
         remainder of then current calendar year (and if mutually desired at the
         time, the following calendar year). The Development Plans proposed by
         Vivus will be reviewed and approved by the Development Committee from
         time to time as appropriate. On an annual basis commencing in the final
         calendar year covered by the initial Development Plan (no later than
         October 15 of each year),

                                       38

         Vivus will prepare and submit to the Development Committee for approval
         a reasonably detailed Development Plan outlining development
         responsibilities for the Product for the upcoming calendar year, it
         being agreed that Vivus may propose updates and revisions to the
         Development Plan more often as Vivus considers appropriate. After
         reviewing the proposal and discussing the development efforts to date,
         the Development Committee will consider changes to and amend the
         Development Plan to reflect revised regulatory and development
         activities designed to meet the goal of obtaining regulatory approval
         for the Product in the Territory in a commercially reasonable time
         frame based on the use of diligent, commercially reasonable efforts by
         Vivus to perform the development. Notwithstanding the foregoing, no
         Development Plan shall be required after marketing approval of a
         Product is obtained except to the extent required by the Development
         Committee.

5.6      BUDGETS

         The Development Committee will prepare and include in the Development
         Plans, a budget that sets forth the estimated costs and expenses
         (including fully-burdened internal labor costs, as described in Section
         5.3 above) that are budgeted to be incurred by FemPharm in conducting
         its responsibilities, if any, for Product development under the
         Development Plan. Each updated Development Plan will include an updated
         budget for FemPharm's responsibilities, if any, to be approved by the
         Development Committee. Vivus shall not be required to reimburse any
         costs or expenses other than those budgeted, unless agreed in advance
         in writing. Each Party shall bear its own costs and expenses associated
         with Committee meetings.

5.7      STEERING COMMITTEE

         Within thirty (30) days of the Effective Date, the Parties will
         establish a steering committee (the "Steering Committee"), comprising
         of one (1) member selected by FemPharm from its senior executives and
         one (1) member selected by Vivus from its senior executives; each
         having responsibility at the respective Party for development of
         Product. Each Party will give the other written notification concerning
         its executive

                                       39

         nominated to serve on the Steering Committee. Either Party may replace
         its member on the Steering Committee with an equivalent senior
         executive by providing written notice of the change to the other Party.
         A member of the Steering Committee cannot simultaneously serve as a
         member of the Development Committee, provided that membership in the
         steering committee or development committee under the Testosterone
         Agreement shall not preclude membership in either the Steering
         Committee or the Development Committee hereunder (and vice versa). The
         Steering Committee will be responsible for resolving issues upon which
         the Development Committee has been unable to reach agreement and for
         serving as the initial means for discussing and seeking to resolve any
         issues or disputes between the Parties arising under this Agreement.
         Members of the Steering Committee will consult with members of the
         Development Committee, as they consider necessary, when resolving such
         issues and disputes and the decision of the Steering Committee binds
         the Development Committee.

5.8      FINAL DECISION

         If the Steering Committee has been unable to reach agreement on any
         issue or matter after diligent discussions, or if such discussions have
         not occurred due to unreasonable delay by FemPharm's representative,
         then the issue will be referred to Vivus to determine the issue, except
         as otherwise provided below. Vivus must consider the issue, having
         considered the views put forward by the Development Committee and the
         Steering Committee. Vivus' decision is final and binding on the Parties
         and the Committees in respect of each such issue and matter, provided
         that the foregoing does not permit Vivus to amend the terms of this
         Agreement, or change the Outside Dates, or otherwise impose an
         obligation on FemPharm, without FemPharm's written consent.

5.9      PROCEDURES OF COMMITTEES

         Each Party will provide the other Party in writing with the name,
         title, e-mail address, telephone number and facsimile number of its
         nominees to each Committee. The Development Committee will meet
         semi-annually during the term of the Development Plan, and more often
         as mutually agreed. The Steering Committee will meet as needed to

                                       40

         resolve disputes and issues, promptly on the good faith request of
         either Party. All Committee meetings will be at such times agreed to by
         FemPharm and Vivus and will be in person or by telephone or video
         conference.

5.10     DECISIONS OF COMMITTEES

         A quorum of the Development Committee at a meeting is two (2)
         representatives of each Party present at such meeting in person or by
         telephone or videoconference. A quorum of the Steering Committee at a
         meeting is one (1) representative of each Party present at such meeting
         in person or by telephone or videoconference. A unanimous vote of the
         members of the Committee present (in person, by telephone or
         videoconference) at such meeting is required to take any action on
         behalf of the Committee. In particular, neither Committee may make a
         binding decision unless a quorum is present. Each Party shall use best
         efforts to cause a quorum to be present at each meeting. No decision of
         a Committee shall be considered binding upon either Party, except to
         the extent set forth in writing and signed by both Parties.
         Notwithstanding anything to the contrary, no approval of the
         Development Committee shall be required for the day to day development
         activities, which shall be controlled by Vivus or its designee.

5.11     CHAIRPERSONS - DEVELOPMENT COMMITTEE

         The chair of the Development Committee will be a Vivus member of the
         Development Committee. Except to the extent otherwise approved by the
         Development Committee, the chair will be responsible for preparing the
         timetable for the meetings, and for preparing the agendas, minutes and
         resolutions, communications with the Steering Committee and other
         communications regarding tasks assigned by the Development Committee.
         All drafts of minutes and resolutions must be approved by the members
         of the Development Committee at the next meeting. The chair does not
         have a second or deciding vote.

                                       41

5.12     CHAIRPERSONS - STEERING COMMITTEE

         The chair of the Steering Committee will be Vivus' member of the
         Steering Committee. Except to the extent otherwise approved by the
         Steering Committee, the chair will be responsible for preparing the
         timetable for the meetings, and for preparing the agendas, minutes and
         resolutions, communications with the Development Committee and other
         communications regarding tasks assigned by the Steering Committee. All
         drafts of minutes and resolutions must be approved by the members of
         the Steering Committee at the next meeting. The chair does not have a
         second or deciding vote.

5.13     MINUTES AND REPORTS

         Each Committee will be responsible for keeping accurate minutes of its
         deliberations or discussions that record all proposed decisions and all
         actions recommended or taken. The chair will provide the Parties with
         the approved minutes of each meeting promptly after approval and, in
         the case of the Development Committee, a written accompanying report
         summarizing, in reasonable detail, the discussions of the Development
         Committee concerning: the status of the Development Plan, of the work
         and progress to date, any issues requiring resolution, and any
         decisions by the Development Committee. All records made by each
         Committee will be available to both Parties.

5.14     GLOBAL DEVELOPMENT COMMITTEE

         At such time as any pre-clinical or clinical development is undertaken
         by or under authority of FemPharm or any Acrux Controlled Affiliates
         anywhere in the world (outside of the Territory) for a Product within
         the Field, the Parties shall establish a joint committee among Vivus,
         FemPharm (and/or the Acrux Controlled Affiliate, as the case may be)
         and any Additional Partner(s) to discuss and coordinate such
         development of such Product (the "Global Development Committee"). To
         the extent there are no Additional Partners, and meetings of the
         Development Committee are ongoing at the time, the function of the
         Global Development Committee set forth in this Section 5.14 shall be
         handled by the members of the Development Committee. The primary role
         of such Global Development Committee shall be to provide a forum for
         communication

                                       42

         between Vivus, FemPharm (and/or an Acrux Controlled Affiliate(s), as
         the case may be) and any Additional Partner(s) with respect to
         activities related to the ongoing preclinical and clinical development
         of Products in the Field, other than the work under the Development
         Plan under this Agreement. FemPharm, the Acrux Controlled Affiliates,
         Vivus, and each Additional Partner having rights to Product in the
         Field shall each have at least two (2) representatives on such Global
         Development Committee. Each member of the Global Development Committee
         shall keep the other members fully informed in English (subject to
         Section 5.15) as to the ongoing preclinical and clinical development
         of, and regulatory activities with respect to, such Products in the
         Field. It is understood and agreed, however, that formal approval of
         such Global Development Committee shall not be required for any such
         activities. The Global Development Committee shall meet no less
         frequently than twice each calendar year, or as otherwise agreed by the
         Parties, until the termination or expiration of this Agreement and each
         of Vivus, FemPharm, Acrux Controlled Affiliates, and any Additional
         Parties shall give a full report in English (subject to Section 5.15)
         at each such meeting of activities relating to the particular Products
         to which such Party, the Controlled Affiliate, Acrux Controlled
         Affiliate or Additional Partner has rights and that is undergoing
         preclinical or clinical development in the Field. Additional Partners
         will participate in such meeting only with respect to Products for
         which they have rights in the Field.

5.15     NO OBLIGATION TO TRANSLATE

         It is understood and agreed that any documents to be provided by
         FemPharm, an Acrux Controlled Affiliate, Vivus, or Additional Partner
         under Section 5.14 may be provided in the language in which such
         documents exist, and FemPharm, the Acrux Controlled Affiliate, Vivus,
         and the Additional Partners shall not be obligated to provide
         translations of such documents (except to the extent such translation
         has already been prepared).

5.16     INFORMATION AND RESULTS

         Except as otherwise agreed by FemPharm in writing, Vivus shall make
         available and disclose to FemPharm, no less often than once every six
         (6) months, in the form selected

                                       43

         by Vivus and reasonably acceptable to Vivus, and to the extent not
         previously disclosed, all patient results from Clinical Trials by Vivus
         or its Affiliate on Products under this Agreement and all Regulatory
         Materials prepared by Vivus or its Affiliate, including any NDA filed
         by Vivus or its Affiliate with the FDA for a Product under this
         Agreement. It is understood that inadvertent failure to disclose any of
         the foregoing information will not be deemed a breach, provided that
         Vivus makes the disclosure of such information promptly after becoming
         aware that such information has not been disclosed. To the extent Vivus
         has the right to provide such patient results from the Clinical Trials
         by its sublicensees on Products under this Agreement, Vivus will also
         make such results available in the manner described above. Vivus agrees
         to use good faith, diligent efforts to obtain such rights from its
         sublicensee. If the NDA is filed by a sublicensee Vivus, Vivus will use
         good faith, diligent efforts to obtain the right to disclose the NDA to
         FemPharm. As between Vivus and FemPharm, each Party will own all
         results and data that it generates, subject to any licenses granted
         under this Agreement to the other Party. In particular, as between
         Vivus and FemPharm, Vivus will own all clinical data and results of
         testing Product generated by Vivus under this Agreement (the "Data").
         FemPharm and its Affiliates have the right to use all Data required to
         be delivered by Vivus solely in developing and seeking regulatory
         approval of a Product in the Field in Australia and New Zealand, and no
         Data, Regulatory Materials, or other Know-How provided by Vivus shall
         be used for any other purpose, such as without limitation for purposes
         of development or marketing approval for a country other than New
         Zealand and Australia, except as otherwise agreed by the Parties in a
         separate writing. Such Know-How will be disclosed to licensees of
         FemPharm and the Acrux Controlled Affiliates for Australia or New
         Zealand only to the extent the licensee provides equivalent disclosure
         to Vivus and Vivus' sublicensees.

5.17     PRODUCT FAILURE

          (a)  Technology Failures. In the event the Product experiences
               significant technical issues that arise out of or relate to the
               MDTS system, including failure of the MDTS system to deliver
               Estradiol, or another Estrogen added to the Field in

                                       44

               accordance with this Agreement, in a manner suitable for
               development or commercialization of a Product in the Field and
               Territory, inadequate physical or chemical stability of any
               portion of the MDTS system, issues arising out of any Acrux
               Penetration Enhancer or any other formulation developed by
               FemPharm and used in an MDTS system, or other issues that
               significantly impact the efficacy, toxicity, safety, or ability
               to obtain approval, then, to the extent that Vivus reasonably
               concludes that the issue would likely prevent the approval of the
               Product in the Field and Territory by the FDA or other
               appropriate regulatory authority or cause the Product to not be
               commercially viable, Vivus shall have the right, subject to the
               terms of Section 5.17(b) below, to select for addition to the
               Field, and development and commercialization in the Territory
               under this Agreement as an alternate Product, an alternate
               Estrogen (excluding any Estrogen (other than a Restricted
               Estrogen) for which FemPharm or its Affiliate has commenced
               Clinical Trials, or which FemPharm or its Affiliate has licensed
               to a non-Affiliate third party in a fully arms length
               transaction, in conformance with Section 2.5(b)) or alternate
               configuration of the MDTS technology.

          (b)  Upon selection by Vivus of an alternate Product pursuant to
               Section 5.17(a) above, development and commercialization of the
               selected Product shall be in accordance with the terms of this
               Agreement, including the same milestone payments and, if the
               alternate Product is based upon another Estrogen, no greater
               royalties than those set forth in Article 4, except that (i)
               Vivus shall not be required to pay under Section 3.2 any
               milestone payments for achieving a milestone for which a
               milestone payment previously was made for a Product, and (ii) the
               Parties shall discuss in good faith and agree on new, appropriate
               diligence milestones dates in Section 6.2 for such alternate
               Product. If Vivus does not select such alternate Product within
               90 days of Vivus concluding that the issue will prevent the
               original Product from being approved or commercially viable, then
               the Agreement shall terminate under Article 14, with the effects
               of such termination being the same as if terminated by Vivus
               under Section 14.3(d).

                                       45

5.18     SUBCONTRACTS

         Subject to the provisions of this Agreement, Vivus may subcontract to
         third parties portions of the Development Plan to be performed by
         Vivus, provided Vivus agrees to keep the Development Committee
         reasonably informed of any contract research organizations or other
         contractors hired by Vivus, and provided further that such
         subcontractors are subject to confidentiality provisions consistent
         with the terms of this Agreement, and that Vivus remains responsible
         for all work performed by such subcontractors.

5.19     CLINICAL PRODUCT SUPPLY

         Except as otherwise provided in this Agreement, as between the Parties,
         Vivus is solely responsible for all manufacturing of its requirements
         of the Product for use in development throughout the Territory. Vivus
         will use diligent, reasonable efforts to manufacture, or to have its
         designee manufacture, sufficient quantities of the Product meeting all
         applicable specifications and legal requirements in a timely manner for
         use in conducting the development of the Product in the Territory
         pursuant to the Development Plan.

6.       DILIGENCE OBLIGATIONS
--------------------------------------------------------------------------------
6.1      PRODUCT DEVELOPMENT DILIGENCE OBLIGATIONS

         Each Party will use diligent, commercially reasonable efforts to
         perform all the tasks and responsibilities assigned to it in the
         Development Plan in accordance with the development schedule set forth
         in the Development Plan, in an effort to obtain all necessary
         regulatory approvals in the Territory. If Vivus knows that it will be
         unable to meet any timeline or milestone date set out in the
         Development Plan, then it will bring the matter to the attention of
         FemPharm at the next Development Committee meeting or, if Vivus
         reasonably concludes that the delay is caused by a significant issue
         that is likely, unless it can be addressed by additional work, to
         prevent the Product from being approved by the FDA, as soon as
         reasonably practicable. The Development Committee

                                       46

         will discuss in good faith the causes of any such delays and Vivus'
         suggested courses of action to complete the subject tasks and determine
         whether to return the Product development program to the schedule in
         the Development Plan or to reasonably adjust the schedule. In such
         process, the Development Committee shall extend reasonably the timeline
         or milestone dates in the Development Plan unless the delay was a
         result of a material breach by Vivus of its obligation to use diligent,
         commercially reasonable efforts in the development of the Product.

6.2      DILIGENCE PAYMENT FOR DEVELOPMENT DELAYS

         If Vivus (including its Affiliates and sub-licensees) does not achieve
         the milestone event listed in Section 3.2(a) by its Outside Date (as
         defined below), then within ten (10) Business Days after the end of
         each full month of delay after the applicable Outside Date, Vivus will
         pay to FemPharm (*) percent (* %) of the milestone payment associated
         with the delayed event, until the corresponding milestone payment is
         paid in full, either as a result of meeting the milestone or as a
         result of such diligence payments. As used herein, "Outside Date" means
         with respect to the Section 3.2(a) milestone (*). To the extent any
         diligence payments are made under this Section 6.2, and the milestone
         is achieved before the corresponding milestone payment has been paid in
         full, then upon achieving the milestone Vivus shall pay the amount of
         the milestone payment, reduced by the amount of payments for that
         milestone made under this Section 6.2. If the Section 3.2(a) milestone
         payment is paid in full as a result of this Section 6.2, then such
         payment will be deemed to satisfy the payment obligation under Section
         3.2(a), and no further payment shall be due or payable as a result of
         completion of the particular milestone by any Product. However, if
         Vivus' inability to meet a milestone event by the applicable Outside
         Date is caused by delays outside of Vivus' reasonable control, that are
         circumstances described in subsection (a)-(d) below, then the Parties
         will meet and agree on reasonable adjustment to the Outside Date to
         accommodate such delays, provided that Vivus has used diligent,
         commercially reasonable efforts to meet the milestone events. The fact
         that payments become due or payable under this Section 6.2 shall not,
         itself, necessarily mean or suggest that there has been a lack of
         diligence by Vivus. For purposes of this Section 6.2, delays due to the
         following matters will be considered outside of Vivus' control:

                                       47

          (a)  a change in the specifications of the Product, or in the planned
               development of the Product, required by the FDA or other
               regulatory authority due to the medical, regulatory or scientific
               attributes of the Product, that necessitates additional
               development effort beyond that set forth in the Development Plan
               or contemplated when establishing the schedule in the Development
               Plan;

          (b)  other delays in development caused by the FDA, or other
               regulatory authority, that were reasonably unanticipated by
               Vivus; or

          (c)  delays caused by FemPharm not conducting its responsibilities as
               set out in the Development Plan in a timely manner.

          (d)  Additional clinical development work required or necessary for
               approval in USA to be conducted due to new findings from the
               Women's Health Initiative Study or failure of the studies
               conducted under the Development Plan to show sufficient levels of
               efficacy or safety, or the data is otherwise equivocal.

6.3      REVERSION FOR FAILURE OF DILIGENCE.

         If at any time prior to achieving regulatory approval of the Product
         Vivus fails to use, and/or to continue using, diligent, commercially
         reasonable efforts to develop the Product in the Territory during the
         term of the Agreement, then FemPharm may give Vivus written notice of
         such failure of diligence. If Vivus does not commence within ninety
         (90) days of such notice using diligent, commercially reasonable
         efforts to develop Product in the Territory, then FemPharm may no later
         than ninety (90) days after such failure provide the notice of
         termination of this Agreement, including the license and other rights
         granted to Vivus, under Section 14.2(a), but only if such failure
         constitutes a material breach of this Agreement by Vivus, and subject
         to Section 15.10.

                                       48

7.       REGULATORY MATTERS
--------------------------------------------------------------------------------
7.1      REGULATORY MATERIALS

          (a)  Vivus is solely responsible for preparing and filing all
               Regulatory Materials for the development of the Product in the
               Territory except as otherwise set forth in this Agreement,
               including carrying out all registration and approval procedures
               necessary to comply with all appropriate laws and regulations
               relating to the manufacture, packaging, import, promotion,
               advertising and sale of the Product in the Territory. All costs
               incurred by Vivus with respect to such registrations and
               approvals will be borne by Vivus. FemPharm has the right to
               review and comment on all such Regulatory Materials prepared by
               Vivus, including application for registration and regulatory
               approval, (to the extent disclosure of same does not violate
               confidentiality obligations) and to the extent reasonably
               practicable Vivus will consider all such comments provided to
               Vivus in advance of filing. Vivus will use good faith efforts to
               obtain for FemPharm the right to so comment on Regulatory
               Materials from Product of Vivus' sublicensees under the Licensed
               Intellectual Property. Similarly, Vivus has the right to review
               and comment on all Regulatory Materials for Product developed by
               or under authority of FemPharm or an Acrux Controlled Affiliate
               in the Field outside the Territory (to the extent disclosure of
               same does not violate confidentiality obligations, subject to the
               following), and FemPharm, the Acrux Controlled Affiliate, or
               licensee, as the case may be, shall provide Vivus with a
               reasonable opportunity to provide comments and consider all of
               Vivus' comments provided to FemPharm in advance of filing to the
               extent reasonably practicable.

          (b)  FemPharm and its Affiliates and licensees (subject to the last
               sentence of Section 5.16) have a right of reference (at no cost
               to them) to the NDA and other Regulatory Materials filed by Vivus
               for the Product in the Field and Territory, which right of
               reference shall be solely for Australia and New Zealand as part
               of the development, approval and commercialisation of the Product
               in the Field for such countries, and such Regulatory Materials
               shall not be referenced by or under

                                       49

               authority of FemPharm or any Acrux Controlled Affiliate for any
               other country or Product. FemPharm is solely responsible for
               carrying out all of its registration and approval procedures
               necessary to comply with all appropriate laws and regulations
               relating to the manufacture, packaging, import, promotion,
               advertising and sale of such Product in the Field in Australia
               and New Zealand. Without limiting the other terms of this
               Agreement, each Party will provide the other Party (at no cost to
               such other Party) with reasonable telephone support to respond to
               such other Party's questions regarding the Regulatory Materials
               and supporting materials that it is required to disclose under
               this Agreement.

7.2      RELATIONSHIP WITH REGULATORY AUTHORITIES

         Vivus, as the sponsor of the Regulatory Materials for the Product in
         the Territory, has sole responsibility for interacting with all
         regulatory authorities in the Territory with respect to the Product in
         the Field, including meetings with such regulatory authorities, and
         responding to inquiries of and conducting other communications with
         such regulatory authorities, with regard to such Regulatory Materials
         or the Product. Vivus has sole authority and responsibility for all
         regulatory obligations regarding the Product in the Field in the
         Territory, including, but not limited to, the regulatory approval
         applications and registrations and related materials, all promotional
         materials, Product labeling, responding to medical inquiries, and
         Product complaints relating to the Territory, except as otherwise
         provided in this Agreement or the Development Plan, or determined by
         the Development Committee. Similarly, FemPharm, as the sponsor of its
         Regulatory Materials for the Product in the Field in Australia and New
         Zealand, has sole responsibility for interacting with all regulatory
         authorities in Australia and New Zealand with respect to its
         development of such Product in the Field for such countries, and for
         all such other regulatory obligations in its development of the Product
         in Australia and New Zealand. Each Party will provide the other Party
         with reasonable advance notice of, and any preparatory material for,
         any hearing before, or meeting with, any regulatory authority regarding
         the Product in such Party's territory (I.E., the Territory in the case
         of Vivus, and Australia and New Zealand in the case of FemPharm), and
         such other Party

                                       50

         has the right to have two (2) of its employees attend such hearings or
         meetings at its own cost, to the extent the Party responsible for the
         meeting has the right to include them and is reasonably practicable
         under the circumstances. All such materials, and information learned in
         connection with such meeting or hearings, shall be treated as the
         Confidential Information of the Party disclosing the materials or
         conducting the meeting.

7.3      ADVERSE EVENTS AND COMPLAINTS REPORTING

         The Parties agree that appropriate reporting of adverse events and
         other safety data relating to the Product is critical. Specific details
         regarding the management of information of adverse events, medical
         inquiries and Product complaints related to the use of the Product in
         the Territory and outside will be delineated in a separate document, to
         be agreed to by the Parties within ninety (90) days after the Effective
         Date. The pharmacovigilance and product labeling representatives of
         each Party will work in good faith together to develop a document that
         identifies:

          (a)  which safety information will be exchanged;

          (b)  when such information will be exchanged;

          (c)  how the global safety database will be established;

          (d)  which Party will be obligated to obtain follow-up information on
               incomplete safety reports;

          (e)  which Party will review the literature for safety report
               information;

          (f)  which Party will prepare required periodic safety updates; and

          (g)  the identification of any other details required to appropriately
               manage safety information for the Product.

         Subject to any specific details of the above document, it is expected
         that Vivus will be responsible for pharmacovigilance, adverse reaction
         reporting and related matters for Products inside the Field in the
         Territory, and that FemPharm shall be responsible for

                                       51

         pharmacovigilance, adverse reaction reporting and related matters for
         Products in the Field in all countries outside of the Territory. The
         Parties also agree to use good faith, reasonable efforts to reach
         agreement with any of their respective licensees (or sublicensees, as
         applicable) of Products in the Field to include such entities in the
         pharmacoviligance and related safety and adverse event reporting
         document discussed above.

8.       PRODUCT COMMERCIALIZATION
--------------------------------------------------------------------------------
8.1      OVERVIEW

         Vivus has the exclusive rights, subject to the terms of this Agreement,
         to promote, market, distribute and sell Product for use in the Field
         throughout the Territory, itself and/or through its Affiliates and
         sub-licensees.

8.2      COMMERCIALIZATION OBLIGATIONS

         Vivus hereby covenants and agrees with FemPharm, during the term of
         this Agreement commencing with regulatory approval of the NDA for the
         Product by the FDA in the Field and Territory (permitting marketing of
         the Product in the Territory), to:

          (a)  actively and diligently promote the sale of the Product using
               commercially reasonable efforts in the Territory;

          (b)  not, and to require that its Controlled Affiliates and
               sub-licensees do not, sell the Product licensed hereunder outside
               the Territory nor sell such Product to any person which it knows,
               or for which it has been provided reasonable documentation, is
               selling such Product outside the Territory, each to the extent
               set forth in Section 2.6; and

          (c)  provide for and maintain, or cause to be provided for and
               maintained, a sales organisation and a marketing program
               reasonably adequate and competent to promote, stimulate interest
               in, and sell the Product effectively in the Territory, for a
               commercially reasonable period of time after commercial launch.

         writing to be bound by the terms hereof as the successor in interest or
         assignee. Any other attempt to transfer or assign shall be void without
         the prior written consent of the other Party. If a Party is acquired by
         another corporation or other entity that was not its Affiliate prior to
         the acquisition, then no Intellectual Property rights of the acquiring
         entity developed prior to the acquisition, or developed thereafter
         without using the Licensed Technology, shall be included in the rights
         licensed to the other Party under this Agreement.

10.      CONFIDENTIALITY
--------------------------------------------------------------------------------
10.1     RESTRICTIONS ON USE

         Subject to the further provisions of this Article 10, each Party agrees
         that it will keep all Confidential Information disclosed to it by the
         other Party secret and confidential, and will not disclose it to any
         third party, or use it for its own benefit or the benefit of any third
         party, except that either Party may use and disclose the other Party's
         Confidential Information:

          (a)  for the purposes of exercising the licenses and other rights
               granted by this Agreement; or

          (b)  as otherwise permitted with the prior written consent of the
               other Party.

         Any disclosure authorized in accordance with the foregoing shall be
         subject to reasonable confidentiality provisions materially as
         protective of the Confidential Information as the terms of this
         Agreement.

10.2     USE OF OWN INFORMATION

         Except for Section 10.13, nothing in this Article 10 prevents a Party
         from disclosing or dealing in its absolute discretion with any of its
         own Confidential Information, provided that FemPharm will use
         reasonable efforts to keep its Confidential Information relating to the
         Product and the Field secret and confidential so as to avoid any
         adverse affect on the value or protection of the Licensed Intellectual
         Property to the extent relevant to the Field and the Territory and
         further provided that such disclosure and dealing by FemPharm shall be
         subject to the other terms of this Agreement, including Sections 2.1
         and 10.13.

                                       56

10.3     EXCEPTIONS TO CONFIDENTIALITY

         The obligations of confidentiality and non-use as provided in Section
         10.1 above do not extend to, and notwithstanding Section 1.1
         Confidential Information shall not include, any particular information
         or Know-How received by a Party that it can demonstrate by competent
         evidence:

          (a)  was available to the public or otherwise in the public domain
               prior to receipt by such Party, or subsequent to such receipt
               becomes available to the public or part of the public domain,
               other than as a result of a breach of this Agreement;

          (b)  was already known to the recipient Party by lawful means at the
               time of receipt (including trade secrets and inventions not
               disclosed in existing patent applications) other than directly or
               indirectly from the other Party;

          (c)  was obtained by the recipient Party from a third party who has a
               lawful right to disclose it, provided that the information has
               not been obtained directly or indirectly from the other Party to
               this Agreement and is not subject to an obligation of
               confidentiality; or

          (d)  was independently developed by the receiving Party without use of
               the other Party's Confidential Information.

10.4     EXCEPTIONS TO NON-DISCLOSURE

         Notwithstanding the restrictions of Section 10.1, a Party may disclose
         the Confidential Information of the other Party beyond the disclosure
         authorized in Section 10.1, subject to compliance with the following
         provisions of this Section 10.4, solely to the extent such disclosure:

                                       57

          (a)  is to its professional advisors, and provided that such
               disclosure is reasonably necessary or desirable and is subject to
               reasonable confidentiality protections;

          (b)  is required by any court or other judicial or quasi-judicial
               tribunal or any administrative or government body, or as is
               required by law, provided that such disclosure is no more than is
               necessary to avoid the imposition of a penalty for failing or
               refusing to disclose the Confidential Information, and that the
               Confidential Information is disclosed in such a way as to limit
               as far as possible the disclosure of the Confidential
               Information, and that such disclosing Party first complies with
               Section 10.5; or

          (c)  as reasonably necessary in prosecuting or defending any
               litigation or enforcing this Agreement, provided that such Party
               has first notified the other Party giving full details of the
               circumstances of the required disclosure and of the relevant
               information to be disclosed and takes reasonable steps to
               preserve the confidentiality of the information.

10.5     DISCLOSURE BY LAW

         Before any disclosure in reliance on Section 10.4(b), the Party subject
         to the disclosure obligation must, unless it is not practicable to do
         so:

          (a)  immediately notify the other Party giving full details of the
               circumstances of the required disclosure and of the relevant
               information to be disclosed;

          (b)  to the maximum extent permitted by law give the other Party a
                  reasonable opportunity in a court of law or other appropriate
                  body to:

               (i)  challenge the proposed disclosure;

               (ii) challenge the obligation of the Party or any other person to
                    make that disclosure; and/or

                                       58

               (iii) secure a protective order or other ruling limiting or
                    preventing the disclosure and/or to protect or preserve the
                    confidentiality of the relevant information; and

          (c)  take reasonable steps to preserve the confidentiality of the
               information being disclosed and to comply with any such
               protective order or ruling.

10.6     SCOPE OF CONFIDENTIALITY

         In the case of uncertainty as to the confidentiality of any information
         a Party must treat the information as Confidential Information until
         such Party or the other Party confirms that the information is not
         Confidential Information.

10.7     SECURITY OF INFORMATION

         Each Party must use its reasonable endeavours to minimise the risk of
         disclosure of any Confidential Information of the other Party, by
         providing reasonable security of its premises, its records and
         materials.

10.8     PERSONNEL CONFIDENTIALITY

         Each Party agrees to procure written and signed confidentiality and
         non-publication undertakings with respect to the Confidential
         Information of the other Party, in terms materially as protective of
         such other Party's Confidential Information as this Article 10, from
         all employees, agents and contractors of such Party who have or are
         likely to have access to Confidential Information of the other Party.

10.9     RETURN OF CONFIDENTIAL INFORMATION

         Upon termination of this Agreement, each Party may by written notice to
         the other Party demand the return of all tangible property comprising
         Confidential Information provided by such Party, but only to the extent
         set forth in Article 14 and provided that Vivus shall not be required
         to return any product.

                                       59

10.10    PUBLICATIONS

         Neither Party shall make or authorize any oral public disclosure, or
         any submission to any outside person for publication of an abstract or
         manuscript, disclosing the Confidential Information of the other Party,
         including any scientific data resulting from the other Party's
         non-clinical development or clinical development under this Agreement,
         in each case except to the extent approved in writing by such other
         Party or as otherwise permitted in this Article 10.

10.11    OTHER RIGHTS

         Nothing herein contained excludes the right of either Party at common
         law or in equity to protect its Confidential Information by application
         to any court for injunction or otherwise. Notwithstanding anything to
         the contrary in this Article 10, the Parties agree that the use and
         disclosure of concepts and information retained in the unaided memories
         of individuals who had access to Know-How from the other Party shall
         not be considered a breach of the terms of this Agreement. This Section
         10.11 shall not be construed to grant any rights under any Patent in
         such concepts.

10.12    USE OF OTHER PARTY'S NAME

         Neither Party shall make any use of the other Party's name unless
         approved by the other Party in writing, such approval not to be
         unreasonably withheld, or in the circumstances set forth in Section
         10.13.

10.13    PRESS RELEASES AND OTHER DISCLOSURES

         The Parties will issue a joint press release, in the form attached as
         annexure D, promptly after the Effective Date. The Parties agree that
         no other publication or other public disclosure of the terms of this
         Agreement will be made by a Party without the consent of the other
         Party, (with failure to respond to any request for consent beyond ten
         (10) days from the request to be deemed consent), such consent not to
         be unreasonably withheld.

                                       60

         Notwithstanding the foregoing, a Party may make disclosures authorized
         pursuant to Section 10.10 and may disclose the terms of this Agreement:

          (a)  to the extent required by law or regulation or court order, or by
               the rules of any stock exchange on which the stock or shares of
               the Party or any of its Affiliates are listed or other government
               body; and

          (b)  in confidence to its professional advisors, and its existing or
               potential investors, acquirors, and merger partners on a need to
               know basis under conditions which reasonably ensure the
               confidentiality thereof;

          (c)  in confidence, pursuant to non-disclosure and non-use
               restrictions at least as stringent as included in this Article
               10, to other parties that have a need to know such information
               for a purpose related to this Agreement;

          (d)  in connection with the enforcement of this Agreement or rights
               under this Agreement;

          (e)  in confidence as is reasonable in connection with a merger,
               acquisition of stock or assets, proposed merger or acquisition,
               or the like;

          (f)  as advisable or required in connection with any government or
               regulatory filings, including filings with the SEC; provided
               however, prior to any such disclosure the non-disclosing Party
               shall be allowed to review the proposed disclosure, and the
               disclosing Party agrees to consider in good faith any proposed
               revisions thereof provided to the disclosing Party within ten
               (10) Business Days of the non-disclosing Party's receipt of the
               proposed disclosure and the Party making such disclosure shall

11.      INVENTIONS
--------------------------------------------------------------------------------
11.1     DISCLOSURE OF INVENTIONS

         During the term of this Agreement, each Party will promptly disclose to
         the other Party the Inventions invented jointly by employees of both
         Parties and for which the disclosing Party desires to seek Patent
         protection, and Vivus will promptly disclose to FemPharm all
         Improvements, provided that Vivus shall not be considered in breach of
         such disclosure obligation as a result of an inadvertent failure to
         disclose an Invention so long as Vivus promptly discloses the
         Improvement after discovering the failure to disclose.

11.2     OWNERSHIP OF INVENTIONS AND INTELLECTUAL PROPERTY RIGHTS

         As between the Parties, each Party (or its Affiliate) will own the
         entire right, title and interest in and to all the Inventions made by
         such Party's (or its Affiliate's) employees or others acting on behalf
         of such Party or Affiliate and all Intellectual Property rights in and
         to such Inventions, subject only to the licenses and other rights (if
         any) to the extent granted to the other Party thereto under this
         Agreement.

11.3     JOINT INVENTIONS AND JOINT PATENTS

         All right, title and interest in all Patents to the extent claiming
         Inventions invented jointly by the employees of both Parties ("Joint
         Inventions")will be owned jointly by FemPharm and Vivus (that is, each
         Party having an equal and undivided interest therein). Patent filings
         to the extent claiming a Joint Invention will be conducted as set out
         in Section 12.2. Neither Party may assign its interest in any Joint
         Patent unless notice of such transfer has been first given to the other
         Party and the transferee agrees in writing to be bound by the terms of
         this Agreement with respect to the interest so transferred and as
         otherwise set forth in Section 9.3. Except as otherwise expressly
         provided in this Agreement, neither Party shall have any obligation to
         account to the other for profits, or to obtain any consent of the other
         Party to license or exploit, Joint Inventions (whether or not patented)
         or Joint Patent, by reason of joint ownership thereof, and each Party
         hereby waives any right it may have under the laws of any jurisdiction
         to require any such consent or accounting.

                                       62

11.4     COOPERATION OF EMPLOYEES

         Each Party represents and agrees that all employees acting on its
         behalf in performing its obligations under this Agreement will be
         obligated under a binding written agreement to assign to such Party, or
         as such Party will direct, all inventions made or conceived by such
         employee.

12.      PATENTS AND INTELLECTUAL PROPERTY
--------------------------------------------------------------------------------
12.1     PATENT RIGHTS

         All right, title and interest owned by a Party in Intellectual Property
         will remain owned and retained exclusively by such Party, subject only
         to the applicable license and other rights granted to Vivus and
         FemPharm in this Agreement. FemPharm will have sole responsibility for
         and control over, at its discretion, the filing, prosecution,
         maintenance and enforcement of the FemPharm Patents, at FemPharm's
         expense, except as otherwise provided below. FemPharm shall use
         diligent commercially reasonable efforts to obtain and maintain at all
         times broad Patent protection for the Products in the Field and
         Territory under this Agreement, including by using reasonable efforts
         to prepare, file, prosecute and maintain Patents as desirable for
         Products in the Field and Territory and to pursue as appropriate
         interferences, re-examinations, reissues, oppositions and similar
         proceedings regarding the FemPharm Patents. During the term of this
         Agreement and thereafter to the extent Vivus has surviving rights,
         FemPharm will keep Vivus reasonably informed regarding the status,
         preparation, filing, prosecution and maintenance of all patent
         applications and patents included or to be included in the FemPharm
         Patents licensed to Vivus pursuant to Section 2.1 (including inventions
         for which Vivus may desire to have a Patent application filed), and
         without limiting the foregoing will reasonably consider, and give Vivus
         a reasonable opportunity to provide, comments on such preparation,
         filing, prosecution, or maintenance efforts that relate to Product, the

                                       63

         Field or the Territory. FemPharm may elect to cease preparing, filing,
         prosecuting or maintaining any particular FemPharm Patent, or to cease
         diligently pursue any interferences, re-examinations, reissues,
         oppositions or similar proceeding relating to a particular FemPharm
         Patent, but only to the extent that FemPharm has provided to Vivus, as
         far in advance as practicable, written notice describing its intent
         and, to the extent desired by Vivus, has reasonably transitioned the
         preparation, filing, prosecution, and maintenance to Vivus without
         prejudice to Vivus' rights under this Agreement. If Vivus then
         undertakes such activities, Vivus shall bear all of its actual out of
         pocket costs and expenses incurred in such activities, and may credit
         against amounts subsequently owed to FemPharm under this Agreement any
         such actual costs and expenses borne, subject to providing FemPharm
         with receipts and invoices and other documents as is reasonable to
         properly evidence the costs and expenses and payment thereof. FemPharm
         shall use reasonable efforts to cooperate and provide such documents
         and assistance as is reasonably requested, in connection with such
         activities by or under authority of Vivus.

12.2     JOINT PATENT RIGHTS

         As to each Joint Invention, the Parties will discuss and reasonably
         agree on whether and where to file a Joint Patent claiming the Joint
         Invention, and on which Party shall assume responsibility for the
         preparation, filing, prosecution and maintenance of such Joint Patents,
         in each country in the world for which prosecution of the Joint Patent
         is desired by a Party. The Parties will share equally in the expenses
         of such activities related to Joint Patents. Each Party will reimburse
         the other for its share of such expenses borne by the other Party upon
         written request, no less frequently than quarterly and shall cooperate
         and provide such documents and assistance as is reasonably requested in
         connection with such activities. Each Party will keep the other
         reasonably informed of, and consult with the other Party with respect
         to, all significant actions in the course of such Party's prosecution
         of the Joint Patents. If the Party having responsibility for
         prosecuting a particular Joint Patent elects not to assume or continue
         such responsibility, the other Party will have the right, but not the
         obligation, to do so. If either Party elects not to continue to support
         prosecution or maintenance of a particular Joint Patent, it may do so
         on written

                                       64

         notice to the other Party, and in such case it will assign its entire
         interest in such Joint Patent to the other Party if such other Party
         elects to prosecute and maintain such Joint Patent at its sole expense;
         subject to any licenses and exclusivity in this Agreement. Upon any
         such assignment, the Party that elected to discontinue its involvement,
         and assign its interest, shall not be required to bear any expenses
         under this Section 12.2.

12.3     FEMPHARM PATENT PROCEEDINGS

         Each Party will promptly notify the other of any legal proceedings,
         including opposition or declaration of invalidity proceedings,
         initiated or pursued by any third party against any of the FemPharm
         Patents. FemPharm has the sole right and authority to defend against
         any such proceedings, including defending against any defenses or
         counterclaims of invalidity or unenforceability (including such
         counterclaims as may arise out of an infringement claim under Section
         12.4). For clarity, all infringement actions involving a Field
         Infringement (as defined in Section 12.4) shall be pursued under
         Section 12.4, and FemPharm shall have the right to control only the
         defense of the FemPharm Patents in such Field Infringement actions in
         the event that a defense or counterclaim is asserted against the
         FemPharm Patents, shall use reasonable efforts, in such defense, not to
         adversely impact the Field Infringement action by Vivus. FemPharm will
         keep Vivus reasonably informed of the actions taken to defend the
         FemPharm Patents and the progress of such actions. In such case, only
         (*) % of FemPharm's costs and expenses of such involvement shall be
         reimbursed out of the recovery in the Field Infringement action. Vivus
         will provide FemPharm with reasonable assistance and cooperation in
         such actions, at FemPharm's sole expense, in an effort to obtain a
         successful resolution or termination of such proceedings or
         counterclaims governed by this Section 12.3. Vivus will have the right
         to have counsel of its choosing participate in any such defense of the
         FemPharm patents, at its sole expense, subject to Section 12.4.
         FemPharm will not settle any claim, suit or action involving FemPharm
         Patents in any manner that would materially negatively impact upon the
         FemPharm Patents, the Licensed Intellectual Property, or Vivus' rights
         or exclusivity thereunder, or that would materially negatively impact
         upon or limit or restrict the ability of Vivus to sell the Products in
         the Territory.

                                       65

12.4     INFRINGEMENT PROCEEDINGS IN THE FIELD

         Each Party will promptly notify the other if it becomes aware that any
         third party is infringing any FemPharm Patent in the Territory. If any
         third party is infringing, or believed to be infringing any FemPharm
         Patent in the Territory in connection with the exploitation, making,
         use, import, offer for sale, or sale of a product in the Field in the
         Territory (a "Field Infringement"), then the Parties will promptly
         thereafter meet and discuss in good faith appropriate steps to take to
         cause such Field Infringement to cease.

          (a)  Vivus or its designee has the first right and authority, but not
               the obligation, to take reasonable steps to cause termination of
               such Field Infringement, which may include initiating a lawsuit
               or other appropriate legal action, at its expense, as Vivus or
               its designee reasonably determines is appropriate; provided that
               Vivus agrees that it will not initiate a lawsuit asserting
               infringement of the FemPharm Patents unless it has first
               discussed the matter with FemPharm. Vivus will keep FemPharm
               reasonably informed of the actions taken to cause termination of
               a Field Infringement and the progress of any such actions
               (including notifying FemPharm promptly if the third party raises
               any defenses or counterclaims of invalidity or unenforceability
               of any FemPharm Patents). FemPharm will provide Vivus or the
               designee with reasonable assistance and cooperation in such
               actions, at Vivus's or the designee's expense (other than as set
               forth in Section 12.3), including joining such action as a party
               plaintiff and taking such other actions as are required by
               applicable law for Vivus or the designee to pursue such action.
               FemPharm will have the right to have counsel of its choosing
               participate in any such action, at its sole expense, provided
               that Vivus will have the right to control the action. Vivus will
               not settle any claim, suit or action that it brought under this
               Section 12.4 involving FemPharm Patents in any manner that would
               negatively impact upon the FemPharm Patents or the Licensed
               Intellectual Property without FemPharm's consent, not to be
               unreasonably withheld or delayed.

          (b)  If Vivus and its designees have not, within four (4) months of
               request by FemPharm, initiated and pursued reasonable efforts to
               cause such Field

                                       66

               Infringement to cease, then each Party (and Vivus' designees)
               shall thereafter have the right and authority, but not the
               obligation, to take any such steps or actions at its expense.
               Whichever of such parties first does so shall thereafter control
               the action and the other Party will provide the controlling Party
               (or designee) with reasonable assistance and cooperation in such
               actions, at expense of the controlling Party or designee (except
               as set forth in Section 12.3), including joining such action as a
               party plaintiff and taking such other actions as required by
               applicable law to pursue such action.

          (c)  The Party bringing the suit, action or legal proceedings will:

               (i)  be reimbursed for its costs and expenses associated with
                    bringing the legal proceedings out of the proceeds of any
                    damages or costs recovered or as otherwise provided by
                    agreement between the Parties; and

               (ii) indemnify the other Party against any liability awarded
                    against such other Party as a result of the subject matter
                    of such suit brought by the indemnifying Party, unless
                    caused by the acts or omissions of the indemnified Party.

          (d)  Any amounts remaining out of damages and costs and other amounts
               recovered from a third party due to infringement of the FemPharm
               Patents under a suit, action or legal proceeding brought against
               a Field Infringement, will be retained by the Party that brought
               the action as follows:

               (i)  if Vivus or its designee brought the action, then Vivus or
                    the designee, as the case may be, shall retain (*) percent
                    (* %) of the recovery and will pay the remaining (*) percent
                    (* %) to FemPharm; and

               (ii) if FemPharm brought the action, the recovery shall be (*)%
                    to Vivus and (*) % to FemPharm.

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12.5     OTHER INFRINGEMENT PROCEEDINGS

         For clarity, FemPharm retains the sole and exclusive right to enforce
         and defend the FemPharm Patents against all third party infringements
         worldwide, except as otherwise provided in Section 12.4 with respect
         solely to Field Infringement.

13.      REPRESENTATIONS AND WARRANTIES; DISCLAIMERS
--------------------------------------------------------------------------------
13.1     WARRANTY

         Each Party, and each Acrux Controlled Affiliate, represents, warrants
         and covenants that: (i) it has the legal power and authority to enter
         into this Agreement and to perform all of its obligations hereunder;
         (ii) it has and will have the right and authority to grant the rights
         and licenses granted by it hereunder; (iii) this Agreement is a legal
         and valid obligation binding upon it and enforceable in accordance with
         its terms; (iv) it has not previously made, and during the term of this
         Agreement will not make, any commitment or grant or authorization of
         rights which are in conflict in any material way with, or that will
         restrict or impair, the rights, licenses, or exclusivity granted to
         Vivus herein.

13.2     ADDITIONAL WARRANTIES OF FEMPHARM AND THE ACRUX CONTROLLED AFFILIATES

         Each of FemPharm and Acrux DDS Pty Limited represents, warrants, and
         covenants as follows:

         (a) it has not received notice that it has failed to comply with, and
         it has not failed to comply with, any obligation, law, regulation, or
         order in a manner that will materially adversely affect the rights
         granted to Vivus under this Agreement;

         (b) Annexure B sets forth a list of all FemPharm Patents (whether
         issued or pending) owned by, or licensed to, any of FemPharm and the
         Acrux Controlled Affiliates. Except for the Patents listed in Annexure
         B, there are no Patents related to or useful for Products in the Field
         that are owned by, or licensed to, FemPharm or any Acrux Controlled

                                       68

         Affiliate. All Patents in Annexure B are owned by FemPharm or an Acrux
         Controlled Affiliate, except as expressly identified in Annexure B.
         None of FemPharm and the Acrux Controlled Affiliates shall grant any
         third party any license or rights under any Patent that is within the
         FemPharm Patents that derogate from or reduce the license or rights
         granted to Vivus under this Agreement;

         (c) FemPharm has sufficient rights to the FemPharm Patents identified
         in the annexure B for it to grant to Vivus the exclusive right (with
         respect to all Persons) under such Intellectual Property, including the
         right to grant and authorize sublicenses, to exploit, import, export,
         make, have made, use, offer for sale and sell Products for use in the
         Field in the Territory;

         (d) as of the Effective Date: (i) the existing FemPharm Patents are in
         full force and effect and not subject to any pending re-examination,
         opposition, interference or claim of invalidity proceedings, none of
         the Licensed Intellectual Property is subject to any litigation or
         similar proceedings, and neither FemPharm nor any Acrux Controlled
         Affiliate has knowledge of a third party threat of such a proceeding,
         or of facts that likely would be the basis for instituting such
         proceeding; (ii) none of FemPharm and the Acrux Controlled Affiliates
         has reason to believe that any of the existing FemPharm Patents likely
         will be invalid, unenforceable, or will fail to issue, or that the
         claims of any pending FemPharm Patent likely will be materially limited
         or restricted beyond the presently pending claims;

         (e) as of the Effective Date, none of FemPharm and the Acrux Controlled
         Affiliates is aware of any Person that is infringing a FemPharm Patent
         in the Territory;

         (f) FemPharm and/or one of the Acrux Controlled Affiliates have access
         and rights to all Regulatory Materials filed by or under authority of
         any of them with regulatory authorities, and the supporting raw data
         for such materials, relevant to Product and may be useful to support
         the development or marketing approval of the Product in the Field in
         the Territory, and has the right to include the same within the
         Know-how disclosed to Vivus hereunder;

                                       69

         (g) FemPharm has not knowingly failed to provide to Vivus any documents
         or information requested by Vivus as part of its due diligence process,
         and FemPharm and Acrux DDS Party Limited believe that FemPharm has
         provided to Vivus, prior to the Effective Date, access to sufficient
         Know-How Controlled by FemPharm or any Acrux Controlled Affiliate for
         Vivus to conduct a reasonable and fully informed evaluation of the
         Licensed Technology and the development status and results relating to
         the current Product in deciding whether or not to enter into this
         Agreement, including all adverse information and all relevant
         agreements. None of the materials provided to Vivus by FemPharm or an
         Acrux Controlled Affiliate prior to the Effective Date contained any
         untrue statement of material fact, and to FemPharm's and Acrux
         Controlled Affiliate's knowledge, none of FemPharm or any Acrux
         Controlled Affiliate failed to disclose to Vivus, or concealed, any
         material fact that would, absent such disclosure, make the materials
         provided to Vivus materially misleading;

         (h) as of the Effective Date, to each of FemPharm's and the Acrux
         Controlled Affiliates' knowledge, none of FemPharm and the Acrux
         Controlled Affiliates has made an untrue statement of a material fact,
         or has failed to disclose a material fact, to any regulatory authority
         with respect to the Product in the Field, or any portion thereof;

         (i) Acrux DDS Pty Limited shall use diligent, commercially reasonable
         efforts to (*). FemPharm and the Acrux Controlled Affiliates shall not
         terminate, amend or modify (*). FemPharm shall notify Vivus in writing
         immediately if any of FemPharm, Acrux Limited or the Acrux Controlled
         Affiliates receives from the licensor of any Licensed Intellectual
         Property any notice of breach or termination, or any other indication
         of a dispute or matter that could lead to breach or termination, of the
         license agreement, or which could otherwise affect Vivus' rights
         thereunder;

                                       70

         (j) FemPharm will not deliver to Vivus confidential or proprietary
         Know-How of any third party unless FemPharm has the right to do so for
         use and disclosure by Vivus in the manner set forth in this Agreement,
         unless FemPharm expressly identifies at the time of such disclosure the
         particular Know-How that FemPharm does not have the right to license to
         Vivus hereunder;

         (k) all employees, consultants, and other contractors of each of
         FemPharm and the Acrux Controlled Affiliates performing work related to
         or useful for any Product in the Field, including Monash, Barry Reed,
         William Charman, Dr. Barrie Finnin, and Dr. Tim Morgan in each case to
         the extent acting as an employee, consultant, or contractor of FemPharm
         or an Acrux Controlled Affiliate, have been and shall be subject to a
         written agreement that vests in FemPharm or an Acrux Controlled
         Affiliate all right, title, and interest in and to their work product,
         including all associated Intellectual Property rights;

         (l) none of this Agreement, or the exercise by or under authority of
         Vivus of the license rights granted to Vivus under this Agreement, will
         violate or otherwise be affected by any of the terms or conditions
         imposed in connection any government funding or sponsorship obtained by
         FemPharm or an Acrux Controlled Affiliate;

         (m) FemPharm and the Acrux Controlled Affiliates are not aware, as of
         the Effective Date, (1) of any Patent of any third party, including
         Affiliates, that will be infringed by the manufacture, use import, or
         sale of a Product in the Field in the Territory, or (2) that any
         Licensed Know-How in any of their possession, and related to or useful
         for Product, was misappropriated from a third party.

         (n) none of the terms and conditions of the Monash License, including
         Sections 6, 7, 8.1, 8.3, 12.2, and 19.1 of the Monash License, or the
         Acrux DDS License bind Vivus;

         (o) the FemPharm Patents are not subject to any lien or encumbrance (as
         defined in the Monash License) that could materially limit or adversely
         affect Vivus' rights granted under this Agreement;

                                       71

         (p) Acrux Limited is not controlled by any Person, and FemPharm and
         Acrux DDS Pty Limited, and Cosmeceutical Solutions Pty Limited are the
         only Affiliates of Acrux Limited that have any interest in (i) any
         Licensed Intellectual Property, (ii) any Competitive Product or (iii)
         any technology, product or Intellectual Property related to or useful
         for the Product in the Field, the delivery of Estradiol or other
         estrogens, progestins with estrogenic activity, or derivatives of such
         estrogens or progestins, or the delivery of a selective estrogen
         receptor modulator, to females, or any transdermal or mucosal delivery;
         and

         (q) none of FemPharm and the Acrux Controlled Affiliates are currently
         researching or developing, or have current plans to commence research
         or development of, any MDTS product using Estrogen Monotherapy for the
         treatment of menopausal symptoms in human females, other than the
         Product.

13.3     ADDITIONAL WARRANTIES OF VIVUS

13.4     DISCLAIMER OF WARRANTIES

         EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, VIVUS AND
         FEMPHARM MAKE NO REPRESENTATIONS, WARRANTIES OR CONDITIONS OF ANY KIND,
         EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AND EACH PARTY HEREBY
         DISCLAIMS ALL OTHER WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
         WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

13.5     DISCLAIMER OF LIABILITY

         EXCEPT WITH RESPECT TO A BREACH OF SECTIONS 2.5, 10, OR THE EXCLUSIVITY
         IN SECTION 2.1(a), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
         OTHER BASED UPON THIS AGREEMENT FOR ANY SPECIAL, CONSEQUENTIAL,
         INDIRECT, OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS
         AGREEMENT, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR
         NOT SUCH PARTY HAS BEEN ADVISED OR IS AWARE OF THE POSSIBILITY OF SUCH
         DAMAGES.

14.      TERM AND TERMINATION
--------------------------------------------------------------------------------
14.1     TERM

         This Agreement will continue in full force and effect from the
         Effective Date until expiration, unless earlier terminated pursuant to
         Sections 5.17(b), 14.2, 14.3 or 14.8 below, on the date that Vivus no
         longer has, and shall not have in the future, any payment obligations
         to FemPharm under this Agreement. Upon such expiration, Vivus retains a
         non-exclusive, fully-paid license in the Territory to continue to make,
         have made, use, sell and otherwise exploit Products in the Field.

                                       73

14.2     TERMINATION BY FEMPHARM

         FemPharm is entitled by written notice to Vivus to terminate this
         Agreement upon the happening of any of the following events, provided
         that FemPharm provides Vivus with written notice of termination within
         one hundred eighty (180) days after it becomes aware of the occurrence
         of the applicable event:

          (a)  any material breach by Vivus of any of the terms and conditions
               of this Agreement, where such breach is not fully cured and
               rectified within ninety (90) days, or with respect to payment
               obligations, within forty-five (45) days, after the giving of
               written notice by FemPharm to Vivus specifying such breach and
               requiring rectification thereof, provided that if such breach
               (other than a payment breach) is not capable of cure within the
               initial ninety (90) day period and Vivus is making diligent good
               faith efforts to cure, then Vivus shall have an additional ninety
               (90) days to cure such breach, and subject to Section 15.10, and
               except as otherwise provided in Section 14.7;

          (b)  a petition or other application or resolution being passed
               against Vivus, or being presented by Vivus, in a bankruptcy
               proceeding that requires the winding up, liquidation or
               dissolution of Vivus or notice by Vivus of its intention to
               propose such a resolution being given;

          (c)  the appointment of a receiver, or receiver and manager, for all
               of Vivus' property in bankruptcy;

          (d)  if Vivus (or any of its Affiliates) bring any action, suit,
               defense or counterclaim seeking to invalidate or have held
               unenforceable: (i) any claim in any FemPharm Patent in
               substantially the same form that the claim is issued or pending
               on July 31, 2003 (an "Existing FP Claim"); or (ii) any claim in a
               FemPharm Patent filed after July 31, 2003 that is substantially
               the same as any such Existing FP Claim and that is entitled to an
               effective filing date (e.g. as defined under 35 USCss.120) that
               is the filing date of a FemPharm Patent filed prior to July 31,
               2003.

                                       74

14.3     TERMINATION BY VIVUS

         Vivus is entitled by written notice to FemPharm to terminate this
         Agreement upon the happening of any of the following events, provided
         that Vivus provides FemPharm (except in case of subsection (d)) with
         written notice of termination within one hundred eighty (180) days
         after Vivus becomes aware of the occurrence of the applicable event:

          (a)  a material breach by FemPharm of any of the terms and conditions
               under this Agreement or a material breach by an Acrux Controlled
               Affiliate of its obligations, representations, or warranties in
               this Agreement, where such breach is not fully cured or rectified
               within ninety (90) days after the giving of written notice by
               Vivus to FemPharm specifying such breach or non-observance and
               requiring rectification thereof, provided that if such breach is
               not capable of cure within the initial ninety (90) day period and
               FemPharm and the Acrux Controlled Affiliates are making diligent
               good faith efforts to cure, then FemPharm shall have an
               additional ninety (90) days to cure such breach, and subject to
               Section 15.10;

          (b)  a petition or other application being presented or resolution
               being passed by or against FemPharm, Acrux DDS Pty Ltd, or Acrux
               Limited in a bankruptcy proceeding that requires the winding up,
               liquidation or dissolution of the applicable entity, or notice by
               such entity of its intention to propose such a resolution being
               given;

          (c)  the appointment of a receiver, or receiver and manager, for all
               of FemPharm's property in bankruptcy or the rejection of this
               Agreement by any such receiver or manager;

          (d)  Vivus has provided sixty (60) days written notice that Vivus is
               terminating the Agreement for its convenience; or

          (e)  if FemPharm (or any of its Affiliates) bring any action, suit,
               defense or counterclaim seeking to invalidate or have held
               unenforceable: (i) any claim in

                                       75

               any Patent Controlled by Vivus or its Affiliate in substantially
               the same form that the claim is issued or pending on July 31,
               2003 (an "Existing V Claim"); or (ii) any claim in a Patent
               Controlled by Vivus or its Affiliate filed after July 31, 2003
               that is substantially the same as any such Existing V Claim and
               that is entitled to an effective filing date (e.g. as defined
               under 35 USCss.120) that is the filing date of such a Patent
               filed prior to the July 31, 2003.

         Further, in lieu of proceeding under Section 14.3(a), 14.3(b), 14.3(c)
         or 14.3(e) based upon a particular event, Vivus shall have the right to
         avail itself of the provisions of Section 14.6 based upon the event,
         rather than terminating the Agreement in its entirety under Section
         14.3(a), 14.3(b), 14.3(c), or 14.3(e), provided that proceeding under
         Section 14.6 based upon an event shall not prevent Vivus from
         proceeding under Section 14.3 with respect to any later event covered
         by Section 14.3.

14.4     NO RELEASE

         Termination of this Agreement does not release either Party from any
         liability that has accrued prior to such termination, or release either
         Party from any obligation that survives termination of this Agreement.

14.5     CONSEQUENCES OF AGREEMENT TERMINATION

          (a)  The terms of this Section 14.5(a) shall apply upon termination
               pursuant to Section 14.2 or Section 14.3(d), except if Vivus has
               previously exercised its rights, under Section 14.3(a) or 14.6 to
               terminate portions of this Agreement pursuant to Section 14.6 due
               to uncured material breach.

               (i)  Section 2.1 of this Agreement shall automatically terminate,
                    and Section 2.3 shall survive, except rights under Section
                    2.3(b) shall survive to the extent set forth below.

               (ii) Upon such termination, Vivus will be deemed automatically to
                    grant to FemPharm a perpetual, irrevocable, royalty-free,
                    fully paid, non-exclusive

                                       76

                    license (with full rights to sublicense): (A) under the
                    Improvement Blocking Patent Rights to exploit, import, make,
                    have made, use, offer for sale and sell Products in the
                    Field throughout the Territory; and (B) under the Reversion
                    IP to exploit, import, make, have made, use, offer for sale
                    and sell Products in the Field in the Territory. As used
                    herein, "Reversion IP" means all trade secrets in the
                    Improvements to the extent Controlled by Vivus or its
                    Controlled Affiliate during the term and necessary or
                    reasonably useful for the development, manufacture or
                    commercialization of Products in the Field. Additionally,
                    FemPharm shall have the right under Section 2.3(b) to
                    negotiate toward a non-exclusive license under the Reversion
                    IP for countries outside of the Territory, New Zealand, and
                    Australia, provided that such license shall be royalty free
                    if this Agreement has been terminated by FemPharm under
                    Section 14.2(a) for Vivus' material breach.

               (iii) Upon such termination, Vivus will be deemed automatically
                    to grant to FemPharm the non-exclusive right to access, use
                    and cross reference all Regulatory Materials, including all
                    registrations and regulatory approvals, filed by Vivus with,
                    or obtained by Vivus from, the FDA in the development of
                    Products in the Field and Territory; provided that all
                    access, use or cross reference by and under authority of
                    FemPharm shall be solely for the purpose of development and
                    commercialization of Products in the Field in the Territory.
                    Additionally, the Parties agree that FemPharm's right to
                    negotiate under Section 2.3(b) toward a license under the
                    Reversion IP as set forth in Section 14.5(a)(ii) above
                    includes the right to negotiate toward rights to access, use
                    and cross-reference such Regulatory Materials for countries
                    outside the Territory, New Zealand, and Australia.
                    Notwithstanding anything to the contrary, except as
                    expressly set forth in this Section 14.5(a), no right,
                    license, or exclusivity to or under any Intellectual
                    Property is or shall be granted by Vivus or its Affiliates
                    and Vivus and its Affiliates shall maintain all right,
                    title, and interest in and to all Intellectual Property and

                                       77

                    Know-How. Without limiting the foregoing, no right or
                    license is or shall be granted by Vivus or its Affiliates in
                    or to any trademarks, trade names, logos, or the like.

               (iv) To the extent not previously disclosed by Vivus, Vivus will
                    use reasonable efforts for a period of 90 days after
                    termination of this Agreement to disclose and provide copies
                    to FemPharm of all the Data (as defined in Section 5.16)
                    generated by Vivus during the term of the Agreement that
                    Section 5.16 requires Vivus to disclose and provide copies
                    to FemPharm, and FemPharm (and its Affiliates and licensees)
                    shall have full rights to use such Data for developing and
                    exploiting Product in the Field to the extent that FemPharm
                    is licensed to do so, and is licensed to authorize its
                    Affiliates and sublicensees to do so, as set forth in
                    Sections 14.5(a)(ii) and 14.5(a)(iii) above, and provided
                    that such Data shall remain the Confidential Information of
                    Vivus and its Affiliate and sublicensee, as the case may be.

               (v)  To the extent provided for in any supply agreement between
                    Vivus and FemPharm pursuant to Section 8.6 above, Vivus will
                    continue to manufacture (or have manufactured) and supply to
                    FemPharm the Product covered by such agreement for use in
                    the Field and Territory until FemPharm is able to obtain its
                    own supply of its requirements of Products for use in the
                    Field and Territory (provided that such period shall not
                    exceed one (1) year) and will work cooperatively and
                    reasonably with FemPharm to achieve a smooth transition of
                    the manufacture of the Reverted Product to FemPham, and (if
                    applicable) to assist FemPharm in seeking to obtain a
                    manufacturing agreement with Vivus' contract manufacturer of
                    the Reverted Product on commercially reasonable terms,
                    provided that in each case such transition shall not impose
                    an unreasonable burden on Vivus.

                                       78

               (vi) Vivus shall, within thirty (30) days after termination,
                    return to FemPharm all Confidential Information delivered or
                    provided by FemPharm to Vivus; provided that Vivus shall be
                    entitled to keep a record copy of such Confidential
                    Information and shall not be required to return any product.
                    Article 10 shall survive termination (excluding the
                    obligation to issue a press release under Section 10.13),
                    but only for a period of five (5) years. Notwithstanding
                    termination of Vivus' rights, Vivus and its Affiliates and
                    sublicensees shall have the right to continue to market,
                    sell, offer to sell, and import any Product, in existence at
                    the time of termination, in the Territory for six (6) months
                    after termination PROVIDED THAT the terms of Article 4 will
                    survive and remain in force as to all such sales.

               (vii) In the event an action under Section 12.4 was commenced
                    during the term of the Agreement and is ongoing at the time
                    of termination, Section 12.4 shall continue to apply to the
                    action in accordance with its terms, except that the Party
                    bringing the action for purposes of allocating any recovery
                    under Section 12.4(d) shall be deemed to be the Party
                    controlling the action at the time of termination. If
                    FemPharm assumes control of an action initiated by Vivus,
                    then Section 12.4(c)(ii) shall apply as if FemPharm is the
                    Party bringing the action and all costs and expenses
                    incurred by Vivus in the action prior to the date of
                    termination shall be reimbursed out of any recovery before
                    allocation under Section 12.4(d).

               (viii) Section 14.5(c) shall apply.

          (b)  Upon termination of this Agreement pursuant to Section 14.3
               (other than 14.3(d)), or upon any termination (but not
               expiration) of this Agreement after Vivus had previously
               exercised its rights, under Section 14.3(a) or 14.6, to terminate
               portions of this Agreement pursuant to Section 14.6 due to
               uncured material breach, the terms of this Section 14.5(b) shall
               apply.

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               (i)  Section 2.1 of this Agreement shall automatically terminate.
                    Notwithstanding termination of Vivus' rights, Vivus and its
                    Affiliates and sublicensees shall have the right to continue
                    to market, sell, offer to sell, and import any Product, in
                    existence at the time of termination, in the Territory for
                    six (6) months after termination PROVIDED THAT the terms of
                    Article 4 will survive and remain in force as to all such
                    sales.

               (ii) Section 2.3(b) shall automatically terminate.

               (iii) Article 10 (excluding the obligation to issue a press
                    release under Section 10.13) shall survive such termination,
                    but only for a period of five (5) years.

               (iv) Each Party shall, within thirty (30) days after termination,
                    return to the other Party all Confidential Information
                    delivered or provided by such other Party, except that it
                    may keep one copy of such information purely for archival
                    purposes and Vivus shall not be required to return Product.

               (v)  In the event an action under Section 12.4 was commenced
                    during the term of the Agreement and is ongoing at the time
                    of termination, Section 12.4 shall continue to apply to the
                    action in accordance with its terms, except that Vivus shall
                    be considered the Party bringing the action for purposes of
                    allocating any recovery under Section 12.4(d). If FemPharm
                    assumes control of an action initiated by Vivus, then
                    Section 12.4(c)(ii) shall apply as if FemPharm is the Party
                    bringing the action and all costs and expenses incurred by
                    Vivus in the action prior to the date of termination shall
                    be reimbursed out of any recovery before allocation under
                    Section 12.4(d). For clarity, Vivus shall have the right to
                    continue to pursue any such action commenced by Vivus to the
                    extent desired.

               (vi) Section 14.5(c) shall apply.

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          (c)  In addition to survival as set forth in Sections 14.5(a) or
               14.5(b) above, as applicable, Sections 1.1, 1.2, 4.9, 9.3, 11.1
               (excluding Vivus' obligation to disclose Improvements), 11.2,
               11.3, 12.2, 13.4, 13.5, 14.1, 14.4, and 14.5 will survive
               termination of the Agreement for any reason and expiration of
               this Agreement, except termination under Section 14.8. Article 15
               shall survive any such termination and expiration of this
               Agreement. Except as otherwise expressly set forth in this
               Section 14.5 above or 14.8, all terms and conditions of this
               Agreement shall terminate and have no further force or effect
               upon any termination or expiration of this Agreement, even if
               termination of the particular Article or Section is not expressly
               referenced in this Section 14.5 or 14.8. For clarity, the
               Development Plan shall be deemed terminated and of no further
               force or effect upon any termination or expiration of this
               Agreement. Notwithstanding anything to the contrary, no payment
               shall be due or payable under Section 3 or 6.2 unless the payment
               became due and payable prior to the date on which the notice of
               termination was given.

14.6     VIVUS TERMINATION OF SPECIFIC PROVISIONS FOR UNCURED BREACH

         If there occurs a material breach by FemPharm of any of the terms and
         conditions under this Agreement, and such breach is not fully cured or
         rectified within ninety (90) days after the giving of written notice by
         Vivus to FemPharm specifying such breach or non-observance and
         requiring rectification thereof, then, subject to Section 15.10, Vivus
         may, as described in Section 14.3, (in lieu of proceeding under Section
         14.3(a)), cause the following changes to occur under the Agreement:

          (a)  The following Sections of the Agreement shall automatically
               terminate: 2.3(b), 2.6(b), 5.1, 5.4, 5.5, 5.6, 5.7, 5.8, 5.9,
               5.10, 5.11, 5.12, 5.13, 5.14 (but only to the extent desired by
               Vivus), 5.16, 5.19, 7.1(b), 7.2 (except the first two sentences),
               8.2(b), 8.2(1), 8.2(2), 8.2(3), 8.3, 8.5, 14.2(d), and 14.5(a).
               For clarity, all obligations of Vivus to pay reimbursement shall
               terminate immediately. Vivus shall be entitled to withhold
               consent to development in the Territory under Section 2.1(c) for
               any reason or no reason.

                                       81

          (b)  Section 8.6 shall terminate, except for the restrictions on
               Product purchased from Vivus. The obligation to issue a press
               release under Section 10.13, and the obligation of Vivus to
               disclose Improvements under Section 11.1, shall terminate except
               to the extent otherwise reasonably specified by Vivus.
               Notwithstanding anything to the contrary, each of FemPharm and
               the Acrux Controlled Affiliates shall, within thirty (30) days of
               Vivus' request return to Vivus all Confidential Information
               delivered or provided by Vivus, except that FemPharm may keep one
               copy of such information purely for archival purposes.

          (c)  Notwithstanding this Section 14.6, Articles 3 and 4 shall survive
               and remain in force. Section 12.4 shall continue to apply in
               accordance with its terms, except that if FemPharm assumes
               control of an action initiated by Vivus, then Section 12.4(c)(ii)
               shall apply as if FemPharm is the Party bringing the action and
               all costs and expenses incurred by Vivus in the action prior to
               the date of Vivus relinquishing control shall be reimbursed out
               of any recovery before allocation under Section 12.4(d). Section
               7.1 shall terminate except for the first and last sentences of
               Section 7.1(a) which shall survive. FemPharm and the Acrux
               Controlled Affiliates shall cooperate in any reasonable manner
               requested by Vivus to achieve a smooth transition to Vivus of any
               and all Development Plan responsibilities of FemPharm.

          (d)  If Vivus elects to exercise its rights under this Section 14.6
               due to an uncured material breach by FemPharm of its obligations
               under Section 2.5(b), then Section 2.5(a) shall be deemed to
               terminate unless Vivus achieves an injunction that enjoins
               FemPharm from further violations of the terms of Section 2.5(b).

14.7     LIMITATION OF TERMINATION FOR BREACH AFTER COMMERCIAL LAUNCH

         Commencing upon the First Commercial Sale of a Product in the
         Territory, but subject to Section 15.10, FemPharm shall have the right
         to terminate the Agreement under Section 14.2(a) only for the following
         uncured material breaches by Vivus:

          (a)  Material breach of the obligations in Section 8.2(a) or 8.2(c);

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          (b)  Breach of the payment obligations under the Agreement, which
               breach remains uncured one hundred twenty days after notice.

         If Vivus materially breaches any other obligation under the Agreement,
         and such breach would permit termination of the Agreement under Section
         14.2(a) but for this Section 14.7, and such breach is not fully cured
         or rectified within ninety (90) days after the giving of written notice
         by FemPharm to Vivus specifying such breach or non-observance and
         requiring rectification thereof, provided that if such breach (other
         than a payment breach) is not capable of cure within the initial ninety
         (90) day period and Vivus is making diligent good faith efforts to
         cure, then Vivus shall have an additional ninety (90) days to cure such
         breach, then (subject to Section 15.10) FemPharm shall have the right
         to cause the following changes to the Agreement on written notice to
         Vivus (but not to terminate the Agreement in its entirety):

               (i)  The following Sections of the Agreement shall automatically
                    terminate: 2.4, 2.7, 5.16, and 5.17.

               (ii) The penultimate sentence of Section 7.1(a) shall terminate.
                    The obligations of FemPharm in the penultimate sentence of
                    Section 7.2 shall terminate, and only the rights of FemPharm
                    under such sentence shall survive.

               (iii) If FemPharm elects to exercise its rights under this
                    Section 14.7 due to an uncured material breach by Vivus of
                    its obligations under Section 2.5(a), then Section 2.5(b)
                    shall be deemed to terminate unless FemPharm achieves an
                    injunction that enjoins Vivus from further violations of the
                    terms of Section 2.5(a).

14.8     TERMINATION FOR FAILURE TO ACHIEVE (*)

         Vivus has the right to terminate this Agreement by providing written
         notice thereof to FemPharm within thirty (30) days after the occurrence
         of the following: Acrux DDS Pty Limited. has not (*) after the
         Effective Date that

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         (*). If Vivus terminates the Agreement under this Section 14.8, then:

          (a)  FemPharm shall (*), and (*). Additionally, FemPharm and  Acrux
               Limited shall promptly (*) of this Section 14.8.

          (b)  In the event of termination under this Section 14.8, all terms
               and conditions of this Agreement shall terminate and have no
               further force or effect except that this Section 14.8 and
               Articles and Sections 9.3, 10 (but only for five (5) years after
               termination and excluding the obligation to issue a press release
               under Section 10.13), 11.2, 11.3, 12.2, 13.4, 13.5, 14.4, 14.9,
               and 15 shall survive. For clarity, all of Vivus' payment
               obligations, including obligations to reimburse FemPharm, shall
               terminate and have no further force or effect immediately upon
               Vivus' notice. The Development Plan shall be deemed terminated
               and of no further force or effect.

14.9     REMEDIES

         Termination of this Agreement as provided in Sections 5.17(b), 14.2,
         14.3, and 14.8, and termination of certain provisions of this Agreement
         as provided in Section 14.6 and 14.7, is a cumulative remedy, and each
         Party will be entitled to seek any other rights or remedies available
         to it at law or in equity for any breach or non-observance of this
         Agreement.

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15.      GENERAL
--------------------------------------------------------------------------------
15.1     NOTICES

         Any notice given pursuant to this Agreement must be in writing and may
         be given by pre-paid express courier addressed to the other Party at
         the address specified in this Agreement or as subsequently notified in
         writing, or by hand delivery or facsimile or electronic transmission to
         the same address and any such notice is deemed to have been received:

          (a)  if served by express courier on the date signed for;

          (b)  if served by hand delivery, on the date delivered by hand;

          (c)  if sent by facsimile transmission, when the transmitting machine
               produces a written report that the notice has been effectively
               sent to the other party, if the sender confirms such notice by
               express courier or hand delivery;

          (d)  if sent by electronic transmission, when the transmitting
               computer produces a written report that the notice has been
               effectively sent to the other party, if the sender confirms such
               notice by express courier or hand delivery;

         If a notice is deemed under clause (c) or (d) to have been received on
         a day which is not a Business Day, it is deemed to have been received
         on the next Business Day.

         The address for service of any notice is:
         To FemPharm


         FemPharm Pty Ltd
         103-113 Stanley Street
         West Melbourne   Victoria    3003
         Australia
         Facsimile:
         Email:

                                       85

         with a copy to:

         Mr. P G Willcocks
         Lander & Rogers, Lawyers
         Level 12, 600 Bourke Street
         Melbourne Victoria 3000
         Australia Facsimile:
         Email:

         To Vivus


         with a copy to:
         Facsimile:
         Email:

15.2     INDEMNIFICATION

          (a)  Vivus is responsible for, and will indemnify, hold harmless and
               defend FemPharm, its Affiliates and their respective officers,
               directors, employees and agents against any and all claims,
               damages, losses, costs, expenses (including reasonable attorneys'
               and professional fees and other expenses of litigation), and
               liabilities, resulting from any third party claims, actions,
               suits, or allegations ("Claims") to the extent the Claim results
               from or arises out of: (a) the negligence, recklessness, or
               willful misconduct of Vivus, its Controlled Affiliates, or its
               sub-licensees, or their respective officers, directors,
               employees, or agents; (b) Vivus' breach of its obligations,
               representations or warranties under this Agreement; or (c) the
               development, manufacture, promotion, use or sale of any Product
               by Vivus, its Affiliate, or its sub-licensee, or by any of their
               respective customers or end-users. Notwithstanding the foregoing,
               Vivus' obligations under this Section 15.2 will not apply to any
               Claim, to the extent that such Claim arises out of or results
               from (i) the development, manufacture, use, promotion, and/or
               sale of any product or technology (including Product) by FemPharm
               or its Affiliate or licensee (other than Vivus, but including
               Product sold by Vivus under any supply agreement with FemPharm or
               any Acrux Controlled Affiliate), or any

                                       86

               of their respective customers or end-users; (ii) FemPharm's or an
               Acrux Controlled Affiliate's breach of its obligations,
               representations, or warranties under this Agreement; or (iii) the
               negligence, recklessness, or willful misconduct of FemPharm, its
               Affiliates, or licensees (other than Vivus) or their respective
               officers, directors, employees, or agents; or (iv) claims of any
               participant in any Clinical Trials performed by or under
               authority of FemPharm or an Acrux Controlled Affiliate.

          (b)  FemPharm and Acrux Limited shall be responsible for, and will
               indemnify, hold harmless and defend Vivus, its Affiliates and
               their respective officers, directors, employees and agents
               against any and all claims, damages, losses, costs, expenses
               (including reasonable attorneys' and professional fees and other
               expenses of litigation), and liabilities, resulting from any
               third party claims, actions, suits, or allegations ("Claims")
               resulting from or arising out of: (i) the development,
               manufacture, use, promotion, and/or sale of any product
               (including Product) by FemPharm or an Acrux Controlled Affiliate
               or their licensees (other than Vivus, but including Product sold
               by Vivus under any supply agreement with FemPharm or any Acrux
               Controlled Affiliate and including liability to patients in
               connection with any Clinical Trials by FemPharm), or any of
               FemPharm's or an Acrux Controlled Affiliate's or FemPharm
               licensee's respective customers or end-users; (ii) FemPharm's or
               an Acrux Controlled Affiliate's breach of its obligations,
               representations, or warranties under this Agreement; or (iii) the
               negligence, recklessness, or willful misconduct of FemPharm, an
               Acrux Controlled Affiliate, or licensees (other than Vivus) or
               their respective officers, directors, employees, or agents.
               Notwithstanding the foregoing, FemPharm's and Acrux Limited's
               obligations under this Section 15.2 will not apply to any Claim,
               to the extent that such Claim is the subject of an
               indemnification obligation under Section 15.2(a) above.

          (c)  A Party that intends to claim indemnification under this Section
               15 (the "Indemnitee") shall promptly notify the other Party (the
               "Indemnitor") in writing

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               of any Claim, in respect of which the Indemnitee intends to claim
               such indemnification, and the Indemnitor shall have sole control
               of the defense and/or settlement thereof. The indemnity
               arrangement in this Section 15 shall not apply to amounts paid in
               settlement of any action with respect to a Claim, if such
               settlement is effected without the consent of the Indemnitor,
               which consent shall not be withheld unreasonably. The failure to
               deliver written notice to the Indemnitor within a reasonable time
               after the commencement of any action with respect to a Claim, if
               prejudicial to its ability to defend such action, shall relieve
               such Indemnitor of any liability to the Indemnitee under this
               Section 15 but the omission so to deliver written notice to the
               Indemnitor shall not relieve the Indemnitor of any liability that
               it may have to any Indemnitee otherwise than under this Section
               15. The Indemnitee under this Section 15, shall cooperate fully
               with the Indemnitor and its legal representatives in the
               investigation of any action with respect to a Claim covered by
               this indemnification, at the Indemnitor's expense.
               Notwithstanding the foregoing, the Indemnitor shall not be
               responsible for any costs or expenses incurred by the Indemnitee
               or its Affiliate, or the directors, officers, employees,
               successors or assigns of the Indemnitee or its Affiliate, without
               the prior written consent of the Indemnitor, not to be
               unreasonably withheld.

15.3     DAMAGES FOR BREACH OF REPRESENTATIONS AND WARRANTIES

         Notwithstanding anything to the contrary, a breach of warranty under
         this Agreement shall have the same effect as a breach of a covenant,
         and each Party shall be entitled to recover for a breach of a warranty
         by the other Party the same contractual damages as if such other Party
         had breached a covenant, subject to Section 13.5.

15.4     WAIVER

         A waiver by any Party of any breach or a failure to enforce or to
         insist upon the observance of a condition of this Agreement will not be
         a waiver of any

                                       88

         other or of any subsequent breach. No waiver under this Agreement is
         binding unless in writing and signed by the Party giving the waiver.

15.5     SEVERANCE

         If any part of this Agreement is held to be invalid, unenforceable,
         illegal, void or voidable for any reason, this Agreement will be
         construed and be binding on the Parties to the maximum extent possible,
         as if the invalid, unenforceable, illegal, void or voidable part had
         been deleted from this Agreement or read down to the extent necessary
         to overcome the difficulty.

15.6     SUCCESSORS AND ASSIGNS

         This Agreement is binding on and continues for the benefit of each
         Party, its successors and permitted assigns.

15.7     CONTINUING OBLIGATIONS

         The expiration or termination of this Agreement does not operate to
         terminate any of the surviving obligations under this Agreement, which
         will remain in full force and effect and binding on the Party
         concerned.

15.8     VARIATION

         No variation, modification or amendment of this Agreement is binding on
         the Parties unless in writing and signed by both Parties.

15.9     APPLICABLE LAW

         This Agreement, and all disputes under Section 15.10, shall be governed
         by and construed in accordance with the laws of California, USA, and
         the Parties submit themselves to the non-exclusive jurisdiction of the
         courts having San Francisco within their jurisdiction.

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15.10    DISPUTE RESOLUTION

         If any claim, controversy, difference or dispute between the Parties
         arises at any time under this Agreement, including as to its existence,
         validity, interpretation, effect, breach or termination, (a "Dispute"),
         then either Party may give the other a written notice of Dispute
         reasonably identifying and providing a description of the Dispute.
         Notwithstanding the existence of a Dispute, the Parties must continue
         to perform this Agreement, unless the Agreement is terminated in
         accordance with its terms. If there is a Dispute, however, regarding
         whether or not a breach of this Agreement has occurred, then notice of
         such a Dispute will toll the cure period, and the Agreement will remain
         in effect until the Dispute is resolved. If such a Dispute is finally
         resolved in favour of the Party giving notice of breach, then the
         Agreement will terminate sixty (60) days after the final determination
         is made unless the other Party cures the breach within such sixty (60)
         day period. If a Party gives written notice of a Dispute, then senior
         executive officers from both Parties will meet promptly thereafter and
         negotiate in good faith to resolve the Dispute as quickly and cost
         effectively as possible. If the Parties have not resolved the Dispute
         within sixty (60) days of the date of the written notice of the
         Dispute, then either Party may, by written notice to the other Party,
         submit such Dispute to final and binding arbitration under the then
         current Comprehensive Arbitration Rules and Procedures of the Judicial
         Arbitration and Mediation Services ("JAMS"), except as such rules may
         be modified in this agreement ("Rules"). The Parties agree that any
         such Dispute will be settled by three (3) arbitrators which are
         appointed within 90 days of service by one Party of a request for
         arbitration on the other Party. Each Party will select one arbitrator,
         and the third arbitrator will be appointed by JAMS, as provided in the
         Rules. The arbitration proceedings will take place, and the
         arbitrators' award will be rendered, in Honolulu, Hawaii or such other
         location as may be agreed in writing by the Parties. The decision of
         the arbitrators will be final and binding on the Parties. The
         arbitrators will prepare and deliver to the Parties a written, reasoned
         opinion conferring their decision. Judgment on the award so rendered
         may be entered in any court having competent jurisdiction thereover.
         Each Party may, without breach of this Section 15.10 or waiving any
         remedy under this Agreement, seek from any court having jurisdiction
         any injunctive or

                                       90

         provisional relief necessary to protect the rights or property of that
         Party pending the arbitration award. Each Party shall bear its own
         costs and expenses and attorneys' fees and an equal share of the
         arbitrators' and any administrative fees of arbitration. The Parties
         further agree that any payments made pursuant to this Agreement pending
         resolution of the dispute shall be refunded if an arbitrator or court
         determines that such payments are not due.

15.11    DISPUTE REGARDING LICENSE NECESSITY.

         If FemPharm disputes, under Section 4.3, that a particular patent
         license is "necessary" as defined in that Section, then the Parties
         shall resolve such dispute by submitting such dispute for resolution to
         a mutually agreed independent patent attorney with substantial
         experience regarding the scope, validity and enforceability of patents
         covering subject matters similar to the third party patent in question
         (the "Neutral"). If the Parties cannot agree on a Neutral within thirty
         (30) days of the request of either Party, then the Neutral shall be
         selected by the Chairman of the Intellectual Property section of the
         American Bar Association. The Neutral shall not have any current
         interest in or current or prior involvement with either Party, unless
         the Parties agree otherwise. Within 10 days following the
         identification of the Neutral, each Party shall submit to the Neutral
         in writing its statement of the issue in dispute; and the basis for its
         position that the patent license that is the subject of the dispute is,
         or is not, (as applicable) "necessary" as defined in Section 4.3. No
         ex-parte communication with the Neutral shall be allowed without the
         consent of the other Party. The Neutral may follow such procedures as
         he or she desires, provided that the Neutral shall decide the issue in
         favor of one Party within thirty (30) days of submission of the
         statements. If the Neutral determines that the subject patent license
         is "necessary", then Vivus shall be entitled to credit royalties as
         provided in Section 4.3, and otherwise no credit shall be permitted
         (except as may otherwise be agreed by the Parties in writing). The
         Parties shall equally share the costs associated with the Neutral's
         activities under this Section 15.11. Each Party shall cooperate to
         allow the Neutral to complete his/her obligations under this Section.
         If

                                       91

         Vivus has in fact taken a license for the Product, the license shall be
         considered necessary unless otherwise established in such proceeding.

15.12    COUNTERPARTS

         This Agreement may be signed in any number of counterparts and all such
         counterparts taken together are deemed to constitute one and the same
         document.

15.13    COSTS

         Each Party must pay their own legal, accounting and other costs in
         relation to the negotiation, preparation, execution and implementation
         of this Agreement.

15.14    PAYMENT

         All payments to be made under this Agreement must be paid by electronic
         transfer to the bank account nominated in writing by the Party to whom
         the payment is to be made and received into that account in cleared
         funds on the date the payment is due.

15.15    ENTIRE AGREEMENT

         This Agreement and the Guaranty Agreement constitute the entire
         agreement and basis of the transaction between the Parties in relation
         to its subject matter and supersedes all other prior and
         contemporaneous communications, negotiations, arrangements and
         agreements between FemPharm and Vivus whether oral or in writing,
         except that confidential information disclosed by a Party pursuant to
         the non disclosure agreement between FemPharm and Vivus prior to the
         Effective Date shall be treated as Confidential Information of the
         disclosing Party to the extent set forth in this Agreement, and the
         Testosterone Agreement shall remain in full force and effect.

15.16    INJUNCTIVE RELIEF

         Each Party acknowledges that monetary damages alone may not be adequate
         compensation for a breach of this Agreement by the other Party,
         including breach of Article 10. Each Party is entitled to seek
         injunctive relief from a court of competent

                                       92

         jurisdiction as a remedy for any breach or threatened breach of this
         Agreement, in addition to any other remedies available at law or in
         equity under or independently of this Agreement, each to the extent
         available in accordance with applicable law.

15.17    INDEPENDENT CONTRACTORS

         The relationship of the Parties hereto is that of independent
         contractors. The Parties hereto shall not be deemed to be agents,
         partners or joint venturers of the others for any purpose as a result
         of this Agreement or the transactions contemplated thereby, and neither
         Party shall have the authority to agree to any obligation or commitment
         for the other.

15.18    FORCE MAJEURE

         Neither Party shall lose any rights hereunder, be considered in breach
         of this Agreement, or be liable to the other Party for damages or
         losses on account of its failure to perform if the failure is
         occasioned by war, strike, fire, act of God, earthquake, flood,
         lockout, embargo, failure of suppliers, power failures, or any other
         reason where failure to perform is beyond the reasonable control of the
         non-performing Party (a "Force Majeure"), provided that after the Force
         Majeure occurs, the non-performing Party uses reasonable efforts to
         avoid the effects of such Force Majeure, and to perform its
         obligations, each to the extent reasonably practicable (it being agreed
         that in no event shall a Party be required to settle any labor dispute
         or disturbance).

15.19    BANKRUPTCY

         All rights and licenses granted under or pursuant to this Agreement by
         each Party as a licensor are, and shall otherwise be deemed to be, for
         purposes of Section 365(n) of Title 11, U.S. Code (the "Bankruptcy
         Code"), licenses of rights to "intellectual property" as defined under
         section 101(35A) of the Bankruptcy Code. The Parties agree that each
         licensee of such rights under this Agreement, shall retain and may
         fully exercise all rights and elections it would have in the case of a
         licensor bankruptcy under the Bankruptcy Code. Each Party agrees during
         the term of this Agreement to create or maintain current copies, or if
         not amenable to copying, detailed descriptions or other appropriate
         embodiments, of all such intellectual property licensed to the other
         Party.

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15.20    ACRUX DDS AS A PARTY

         Acrux DDS Pty Limited agrees to be fully and independently bound by the
         Sections to which it is expressly a party under this Agreement, and
         including also the provisions of Article14 (it being understood that
         only Vivus or FemPharm may terminate this Agreement in accordance with
         its terms). Notwithstanding the foregoing, Acrux DDS Pty Limited
         acknowledges that Vivus shall have no independent obligations to Acrux
         DDS Pty Limited under this Agreement, and all of Vivus' obligations
         under this Agreement and this Section 15.20 shall be satisfied upon
         Vivus' performance or tender of performance to FemPharm. In addition,
         any notice given to or from FemPharm and FemPharm's consent, approval,
         agreement, actions or inactions shall be deemed notices to and from,
         and the consent, approval, or agreement of, or actions or inactions
         authorized by Acrux DDS Pty Limited. Acrux DDS Pty Limited agrees to be
         likewise bound by any and all amendments to this Agreement, which
         amendments shall not require Acrux DDS Pty Limited's approval. It is
         understood and agreed that Acrux DDS Pty Limited may look only to
         FemPharm for any share of or benefit from Vivus' performance or
         undertakings under this Agreement, and Vivus shall have no
         responsibilities to Acrux DDS Pty Limited in that regard.

15.21    SURVIVAL OF SUBLICENSES

         If FemPharm terminates the Agreement, then any existing sublicense
         agreement with a non-Affiliate granted by Vivus hereunder shall remain
         in force provided that such sublicensee agrees in writing to be bound
         by and perform to the same extent as required of Vivus under this
         Agreement. For clarity, it is understood that the foregoing shall not
         have the effect of expanding or increasing the rights of the
         sublicensee beyond the rights granted to it under the sublicense
         agreement.

EXECUTED by FEMPHARM PTY                       )
LTD by being signed by:                        )
                                               )
                                               )
                                               )
                                               )
/s/ Igor Gorda                                   /s/ Igor Gorda
-------------------------------------            -------------------------------
Signature of director/secretary                  Signature of director

Igor Gorda                                       Igor Gorda
-------------------------------------            -------------------------------
Name of director/secretary (please print)        Name of director (please print)




EXECUTED by VIVUS INC. by being                )
signed by:                                     )
                                               )
                                               )
                                               )
                                               )
                                                 /s/ Leland Wilson
---------------------------------------          -------------------------------
                                                 Signature


---------------------------------------          -------------------------------
Leland Wilson, President & CEO                   Name and Title

-------   -------   ----------   -----------   -------   -------   ----------
PATENTS                                        DATE OF   DATE OF   EXPIRATION
GRANTED   COUNTRY   PATENT NO.   APPLIC. NO.   ISSUE     FILING    DATE
-------   -------   ----------   -----------   -------   -------   ----------


                                      (**)

PURCHASER:        TANABE HOLDING AMERICA, INC.
                  401 Hackensack Avenue, 10th Floor
                  Hackensack, NJ 07601
                  Attention:

COMPANY:          VIVUS, INC.
                  1172 Castro Street
                  Mountain View, CA 94040

Bank:
Address:
ABA No.
Acct. No.
Acct. Name:       VIVUS, Inc.
Reference:        Tanabe Loan

SECURED PARTY:             TANABE HOLDING AMERICA, INC.
                           401 Hackensack Avenue, 10th Floor
                           Hackensack, NJ 07601
                           Attention:


COMPANY:                   VIVUS, INC.
                           1172 Castro Street
                           Mountain View, CA 94040

         2.7.1    The price of Product delivered for the first (*) during the
                  calendar years 2004, 2005 and 2006 shall be $ (**) per (*).

         2.7.2    The Price of Product delivered in excess of (*) kg shall be
                  mutually agreed by the parties hereto.

2.8      Packaging. Product shall be supplied to VIVUS: (a) in airtight and
         moisture-proof containers which have stability to support storage; (b)
         in standard quantities of (*), and no less than (*) and no more than
         (*); (c) in plastic packing material sufficient to prevent breakage of
         bottles while in transport; and (d) with a packaging label(s)
         displaying, in addition to the standard requirements, the tare weight,
         packaging job number, and bottle serial number per packaging job. The
         tare weight indicated shall contain the weight of the empty bottle, cap
         and cap insert, but neither of the label weights or that of external
         protective materials. A copy of a certificate of analysis for each such
         lot shall accompany such lot. A second copy of such certificate of
         analysis shall be separately sent to VIVUS.

2.9      Shipping Terms; Payment. All prices set forth in Section 2.7 above
         shall be CIP (Incoterms 2000) to an airport (in the case of shipment by
         airfreight) or to an address (in the case of shipment by courier
         service). The manner of shipment shall be designated by NeraPharm and
         the airport or address shall be designated by VIVUS. All payments
         hereunder shall be made in U.S. dollars, by direct bank transfer to an
         account designated in NeraPharm's Invoice. Payment terms shall be
         forty-five (45) days from the date of Invoice.

2.10     Taxes. VIVUS shall be responsible for the payment of any taxes, tariffs
         or duties in excess of those covered by NeraPharm pursuant to CIP
         (Incoterms 2000) related to the import of the Product into the country
         of destination.

         satisfactory sample returned to NeraPharm to verify such
         non-conformity. If VIVUS rejects a shipment before the date on which
         payment therefore is due, it may withhold payment for such shipment or
         the rejected portion thereof. The warranties given by NeraPharm in
         Article 5 below shall survive any failure to reject by VIVUS under
         Section 3.9.

3.10     Returns and Settlement of Claims. NeraPharm shall be obliged to respond
         in writing to VIVUS accepting or refusing a rejection notice from VIVUS
         within forty-five (45) days from the date of receipt of such rejection
         notice in accordance with Section 3.9 above. In case of disagreement
         between the parties, the claim shall be submitted for tests and
         decision to an independent testing organization which meets appropriate
         GMP or consultant of recognized repute within the United States
         pharmaceutical industry mutually agreed upon by the parties (the
         "Laboratory"), the appointment of which shall not be unreasonably
         withheld or delayed by either party. The determination of such entity
         with respect to all or part of any shipment of Product shall be final
         and binding upon the parties. The fees and expenses of the Laboratory
         making such determination shall be paid by the party against which the
         determination is made (i.e., the party whose argument is rejected by
         the Laboratory). Products accepted by NeraPharm as not meeting the
         applicable requirements and Specifications or so decided by the
         Laboratory shall be returned by VIVUS to NeraPharm. NeraPharm shall use
         its best efforts to replace the quantities of Product returned by VIVUS
         within the shortest possible time, but no later than sixty (60) days
         from the return of such quantities. The replacement of returned Product
         shall have priority over the supply of Product ordered for shipment,
         not more than thirty (30) days before or any time after the return of
         the rejected quantity to NeraPharm. Without limiting the remedies of
         VIVUS, if NeraPharm fails to replace returned Product within
         one-hundred and fifty (150) days from the date Product is returned to
         NeraPharm, VIVUS shall have the right (i) to cancel such replacement
         shipment by written notice and (ii) to reclaim immediately (either
         through refund or setoff, at VIVUS' discretion) the amounts paid
         pursuant to Section 2.7 above for the Product that was returned but not
         replaced, if such payment for such Product had already been made to
         NeraPharm.

3.11     Presence At Facility. Upon reasonable notice given by VIVUS to
         NeraPharm and at reasonable frequency, VIVUS shall have the right to
         assign a reasonable number of employees or consultants of VIVUS to
         inspect and audit the Facility at which Product is manufactured in
         order to verify NeraPharm's compliance with the current GMP and other
         agreed requirements, provided, however that (a) such employees or
         consultants shall not unreasonably interfere with order activities
         being carried out of Facility, and (b) that such employees or
         consultants shall observe all rules and regulations applicable to
         visitors and to individuals employed at the Facility.

4.1      Regulatory Approvals.

         4.1.1    Requirements. VIVUS and its marketing partners shall notify
                  NeraPharm in a timely fashion about their requirements for the
                  submission and maintenance of DMFs related to the manufacture
                  and control of the Product adequate to comply with applicable
                  regulatory agencies' (including without limitation the FDA's)
                  standards with respect to the Product in the United States,
                  Europe, Canada, and other countries as is or becomes necessary
                  for VIVUS and its marketing partners to import, export and
                  sell the MUSE/ALISTA System worldwide. NeraPharm will submit,
                  at NeraPharm's expense, a DMF or its equivalent in any other

                                        5

                  country imposing requirements fully identical to that of the
                  United States, Canada or the European Union within two (2)
                  months after such requirement received from VIVUS or its
                  marketing partners. In case VIVUS or its marketing partner
                  requires the submission of a DMF in a country not covered by
                  the foregoing stipulations, VIVUS will assist NeraPharm,
                  directly or through others, to obtain the full details of
                  requirements of a DMF on the manufacture and control of the
                  Product in the country concerned. NeraPharm will use its best
                  efforts to fulfill these requirements and to submit such
                  document with content and form required in the country in
                  question and at the time required by VIVUS. NeraPharm shall
                  keep VIVUS and its marketing partners, as appropriate,
                  informed about its ability or inability to submit and maintain
                  such documentation as well as the intended or possible times
                  of such submissions.

         4.1.2    DMF Submission. NeraPharm shall submit, at NeraPharm's
                  expense, DMFs in every country in English or a translation in
                  English. An English copy of the open part of each DMF, where
                  such open part exists, shall be provided to VIVUS in parallel
                  with the submission thereof to the applicable regulatory
                  agency. NeraPharm agrees to maintain all information filed
                  with the regulatory agencies current and reflective of current
                  manufacturing practices and product specifications and to
                  update this information as required. From time to time during
                  the term of this Agreement, NeraPharm shall provide letters of
                  authorization, instruments and/ or documents, and take such
                  other actions, as VIVUS may reasonably request for purposes of
                  obtaining regulatory approvals necessary for VIVUS and its
                  marketing partners to import, export and sell Product as
                  incorporated into the MUSE/ALISTA System. NeraPharm agrees to
                  notify VIVUS in a timely fashion of any significant changes,
                  deletions or modifications to any DMF or Product process or
                  specification, and not to implement any such changes that
                  would cause a delay in obtaining regulatory approvals to
                  market products incorporating the Product without prior
                  written agreement with VIVUS.

5.1      Process and Product Warranties. NeraPharm warrants and represents that:
         ------------------------------

         5.1.1    Specifications. All Product supplied to VIVUS hereunder shall
                  comply with the Specifications for the Product and shall
                  conform with the information shown on the Certificate of
                  Analysis and Batch Release Sheet provided for the particular
                  shipment according to Section 3.2 hereof;

         5.1.2    GMP. The Facility, and all Product supplied to VIVUS hereunder
                  meets (a) all United States and European regulatory
                  requirements for commercialization of the Product, including
                  without limitation maintenance of a current DMF, compliance
                  with GMP, demonstration of commercial production capability,
                  and demonstration of acceptable stability of such Product; (b)
                  all ISO 9000 regulatory requirements applicable to the
                  Product: and (c) all requirements imposed by other regulatory
                  agencies with which a DMF has been filed for the Product;

         5.1.3    USP/Ph Eur. All Product supplied to VIVUS hereunder shall meet
                  all USP and European Pharmacopoeia and other applicable
                  standards and shall be fit for human use;

         5.1.4    Compliance with FFDCA. None of the Product supplied to VIVUS
                  hereunder shall be adulterated or misbranded within the
                  meaning of the Federal Food, Drug and Cosmetics Act, 21
                  U.S.C.A. ss.301 et seq., as amended and in effect of the time
                  of shipment (the "Act"), or within the meaning of any state or
                  municipal laws applicable to the Products and containing terms
                  with substantially similar meanings as the meanings of
                  adulteration or misbranding under the Act; provided, however,
                  that this provision shall not apply to, and NeraPharm shall
                  have no responsibility for, misbranding caused directly by
                  VIVUS as a result of labels or package text specified by VIVUS
                  for the Product;

         5.1.5    Timing. All Product supplied to VIVUS hereunder shall have
                  been manufactured within twenty-two (22) weeks prior to
                  receipt by VIVUS;

         5.1.6    Notification. NeraPharm will provide written notice to VIVUS
                  of any proposed alterations to the Facility or to any Product
                  manufacturing or testing process; provided, however, that
                  under no circumstances shall any such alteration be made
                  without VIVUS' express prior written consent, or before
                  regulatory approval, if required for any suchalteration, is
                  received in each country in which Product is then being sold;
                  and

         5.1.7    No Encumbrance. Title to all Product supplied to VIVUS
                  hereunder shall pass to VIVUS as provided herein free and
                  clear of any security interest, lien, or other encumbrance.

10.1     Language. This Agreement is in English language only, which language
         shall be controlling in all respects, and all versions hereof in any
         other language shall not be binding on the parties hereto. All
         communications and notices to be made or given pursuant to this
         Agreement shall be in the English language.

                                       10

10.2     Government Approvals. NeraPharm shall:

         10.2.1   at its own expense, comply with all applicable laws, and
                  obtain all approvals and make and maintain in force all
                  filings, registrations, reports, licenses, permits and
                  authorizations required by national and local governments
                  within the Czech Republic in order for NeraPharm to perform
                  its obligations under this Agreement; and

         10.2.2   advise VIVUS of any legislation, rule, regulation or other law
                  (including but not limited to any customs, tax, trade,
                  intellectual property or tariff law) which is in effect or
                  which may come into effect in the Czech Republic after the
                  Effective Date of this Agreement and which affects the
                  transfer of Product to VIVUS under this Agreement, or which
                  has a material effect on any provision of this Agreement.

11.1     Assignment. The parties agree that their rights and obligations under
         this Agreement may not be assigned or otherwise transferred to a third
         party without the prior written consent of the other party hereto.
         Notwithstanding the foregoing, either party may transfer or assign its
         rights and obligations under this Agreement to a successor to all or
         substantially all of its business or assets relating to this Agreement
         whether by sale, merger, operation of law or otherwise; provided that
         such assignee or transferee has agreed to be bound by the terms and
         conditions of this Agreement. Subject to the foregoing, this Agreement
         shall be binding upon and inure to the benefit of the parties hereto,
         their successors and assigns.

11.2     Governing Law. This Agreement shall be governed by, and construed and
         interpreted in accordance with, the laws of the United Kingdom without
         reference to conflict of laws principles and excluding the 1980 U. N.
         Convention on Contracts for the International Sale of Goods.

11.3     Arbitration. Any dispute or claim arising out of or in connection with
         this Agreement or the performance, breach or termination thereof, shall
         be finally settled by binding arbitration in London, England under the
         Rules of Arbitration of the International Chamber of Commerce by three
         (3) arbitrators appointed in accordance with said rules. The decision
         and/ or award rendered by the arbitrators shall be written, final and
         non-appealable and may be entered in any court of competent
         jurisdiction. The parties agree that, any provision of applicable law
         notwithstanding, they will not request, and the arbitrator shall have
         no authority to award, punitive or exemplary damages against any party.
         The costs of any arbitration, including administrative fees and fees of
         the arbitrators, shall be shared equally by the parties, unless
         otherwise determined by the arbitrators. Each party shall bear the cost
         of its own attorneys' and expert fees. The arbitral proceedings and all
         pleadings and written evidence shall be in the English language. Any
         written evidence originally in a language other than English shall be
         submitted in English translation accompanied by the original or true
         copy thereof. Notwithstanding the foregoing, either party may apply to
         any court of competent jurisdiction for injunctive relief without
         breach of this arbitration provision.

                                       11

11.4     Notices. Any notice or report required or permitted to be given or made
         under this Agreement by either party shall be in writing and delivered
         to the other party at its address indicated below (or to such other
         address as a party may specify by notice hereunder by courier or by
         registered or certified airmail, postage prepaid, or by facsimile;
         provided, however, that all facsimile notices shall be promptly
         confirmed, in writing, by registered or certified airmail, postage
         prepaid. All notices shall be effective as of the date received by the
         addressee.

If to VIVUS:               VIVUS, Inc.
                           1172 Castro Street
                           Mountain View, CA  94040
                           Attn:   C. E. O. and C. F. O.


With a copy to:            Wilson, Sonsini, Goodrich & Rosati
                           650 Page Mill Road
                           Palo Alto, California 94304-1050
                           Attn:

If to NeraPharm:           NeraPharm, spol. s.r.o.
                           Ul. Prace 657
                           277 11  Neratovice
                           Czech Republic

11.5     Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
         PARTY OR ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
         INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS
         RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS
         AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING
         NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH
         PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME. THESE
         LIMITATIONS SHALL APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL
         PURPOSE OF ANY LIMITED REMEDY, AND THE PARTIES ACKNOWLEDGE THAT THIS
         PARAGRAPH REPRESENTS A REASONABLE ALLOCATION OF RISK.

11.6     Force Majeure. Neither party will be liable for its failure to perform
         any of its obligations hereunder during any period in which such
         performance is delayed by acts of God, fire, war, embargo, riots,
         strikes or other similar cause outside the control of such party.

11.7     Confidential Terms. Except as expressly provided herein, each party
         agrees not to disclose any terms of this Agreement to any third party
         without the consent of the other party, except as required by
         securities or other applicable laws, to prospective investors and to
         such party's accountants, attorneys and other professional advisors.

11.8     Headings. Headings included herein are for convenience only, do not
         form a part of this Agreement and shall not be used in any way to
         construe or interpret this Agreement.

11.9     Non-Waiver. Any waiver of the terms and conditions hereof must be
         explicitly in writing. The waiver by either of the parties of any
         breach of any provision hereof by the other shall not be construed to
         be a waiver of any succeeding breach of such provision or a waiver of
         the provision itself.

11.10    Severability. Should any section, or portion thereof, of this Agreement
         be held invalid by reason of any law, statute or regulation existing
         now or in the future in any jurisdiction by any court of competent
         authority or by a legally enforceable directive of any governmental
         body, such section or portion thereof shall be validly reformed so as
         to approximate the intent of the parties as nearly as possible and, if
         unreformable, shall be deemed divisible and deleted with respect to
         such jurisdiction, but the Agreement shall not otherwise be affected.

                                       13

11.11    Independent Contractors. The relationship of VIVUS and NeraPharm
         established by this Agreement is that of independent contractors.
         Nothing in this Agreement shall be construed to create any other
         relationship between VIVUS and NeraPharm. Neither party shall have any
         right, power or authority to assume, create or incur any expense,
         liability or obligation, express or implied, on behalf of the other.

11.12    Trademarks. VIVUS, in its sole discretion, shall select the trademarks,
         trade names and trade dresses to be used in connection with the Product
         and all such trademarks, trade names and trade dresses shall be and
         become the exclusive property of VIVUS. NeraPharm shall use said
         trademarks, trade names and trade dresses for the sole purpose of
         manufacturing the Product for supply to VIVUS and at no time shall
         adopt any trademark, trade name or trade dress that may be confusingly
         similar therewith. NeraPharm shall acquire no rights in and to any
         trademarks, trade names and trade dresses selected by VIVUS under this
         Section 11.12.

11.13    Entire Agreement. The terms and provisions contained in the Agreement,
         including the Exhibits hereto, constitute the entire agreement between
         the parties and shall supersede all previous communications,
         representations, agreements or understandings, either oral or written,
         between the parties with respect to the subject matter thereof.
         Notwithstanding the foregoing, neither party waives any rights it may
         have under the Supply Agreement. No agreement or understanding varying
         or extending this Agreement shall be binding upon either party hereto,
         unless set forth in a writing which specifically refers to the
         Agreement signed by duly authorized officers or representatives of the
         respective parties, and the provisions hereof not specifically amended
         thereby shall remain in full force and effect.

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