VIVUS INC, 8-K, 1996-05-31

VIVUS INC
8-K, 1996-05-31
SURGICAL & MEDICAL INSTRUMENTS & APPARATUS

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

MAY 31, 1996
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

VIVUS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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CALIFORNIA (PRIOR TO REINCORPORATION)
DELAWARE (FOLLOWING REINCORPORATION) 0-23490 94-3136179
- ------------------------------------- ------------------------- -----------------------------------
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>

545 MIDDLEFIELD ROAD
SUITE 200
MENLO PARK, CALIFORNIA 94025
----------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (415) 325-5511

NOT APPLICABLE
-------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

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Item 5. Other Events.

On May 30, 1996, VIVUS International Limited, a company organized under
the laws of Bermuda, and a wholly-owned subsidiary of VIVUS, INC. (the
"Registrant") entered into a distribution agreement with Astra AB, a company
organized under the laws of Sweden ("Astra") pursuant to which Astra will
distribute the Registrant's products in Europe, South America, Central America,
Australia and New Zealand (the "Agreement"). As consideration for the execution
of the Agreement, Astra will pay the Registrant $10 million in June 1996, and
the Registrant will be paid up to an additional $20 million in the event it
achieves certain milestones. Pursuant to the terms of the Agreement, the
Registrant and Astra will jointly build a specialty sales organization within
Astra called "ASTRA/VIVUS," to promote the products in certain European
markets, including the United Kingdom, France and Germany. Astra has agreed to
purchase product from the Registrant for resale into the above
mentioned markets.*

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* Confidential treatment requested pursuant to a request for
confidential treatment filed with the Commission on May 31,
1996. The portions of the exhibit for which confidential
treatment has been requested have been omitted from the
exhibit. The omitted information has been filed separately
with the Commission as part of the confidential treatment
request.

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SIGNATURES

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

Dated: May 30, 1996

VIVUS, INC.

By: /s/ LELAND F. WILSON
--------------------
Leland F. Wilson
President and Chief Executive Officer

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INDEX TO EXHIBITS

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EXHIBIT PAGE

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10.24 The Distribution Agreement made as of May 29, 1996 5
between the Registrant and Astra.*
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DISTRIBUTION AGREEMENT

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TABLE OF CONTENTS

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1. DEFINITIONS................................................................................................ -1-
1.1 "AFFILIATES"............................................................................. -1-
1.2 "VIVUS PRIORITY COUNTRIES"or "VP COUNTRIES".............................................. -1-
1.3 "FOIL POUCH PACKAGE FORM"................................................................ -2-
1.4 "MAA".................................................................................... -2-
1.5 "MAA APPROVAL"........................................................................... -2-
1.6 "MAJOR COUNTRY".......................................................................... -2-
1.7 "NET SALES".............................................................................. -2-
1.8 "PATENTS"................................................................................ -2-
1.9 "PRODUCT(S)"............................................................................. -3-
1.10 "SPC".................................................................................... -3-
1.11 "TERRITORY".............................................................................. -3-
1.12 "THIRD PARTY(IES)"....................................................................... -3-
1.13 "VIVUS COST OF GOODS".................................................................... -3-
1.14 "VIVUS TRADEMARK"........................................................................ -3-
1.15 "VIVUS ALTERNATIVE TRADEMARK"............................................................ -3-
1.16 "FIRST COMMERCIAL SALE" ................................................................. -4-

2. GRANT OF DISTRIBUTION RIGHTS............................................................................... -4-
2.1 Appointment.............................................................................. -4-
2.2 No Conflict.............................................................................. -4-
2.3 Sales Outside TERRITORY.................................................................. -4-

3. PAYMENTS................................................................................................... -4-
3.1 Initial Payments......................................................................... -4-
3.2 Transfer Price........................................................................... -5-
3.2.1 NET SALES............................................................... -5-
3.2.2 [*]..................................................................... -6-
3.2.3 Obsolete Inventory...................................................... -6-
3.3 Discounting.............................................................................. -6-
3.4 Sales.................................................................................... -6-
3.5 Provisional Payments..................................................................... -6-
3.6 Reconciliation........................................................................... -7-
3.7 Payment.................................................................................. -7-
3.8 Taxes.................................................................................... -7-
3.9 U.S. Dollars............................................................................. -7-

4. DEVELOPMENT....................................................................................... -8-
4.1 Regulatory Steering Committee............................................................ -8-
4.2 Product Development...................................................................... -8-
4.3 Regulatory Approvals..................................................................... -8-
4.3.1 MAAs.................................................................... -8-
4.3.2 Pricing/Reimbursement................................................... -9-

4.4 Exchange of Information.................................................................. -9-

5. COMMERCIALIZATION AND PROMOTION............................................................................ -9-
5.1 ASTRA Commercialization.................................................................. -9-
5.1.1 Diligence............................................................... -9-
5.1.2 Failure to Sell......................................................... -9-
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5.2 Joint Marketing Board................................................................... -10-
5.2.1 General................................................................ -10-
5.2.2 Constitution........................................................... -10-
5.2.3 Decisions.............................................................. -10-
5.3 Marketing Plans......................................................................... -10-
5.3.1 General................................................................ -10-
5.3.2. VIVUS Approval......................................................... -11-
5.4 VIVUS Specialist Division............................................................... -11-
5.4.1 Formation.............................................................. -11-
5.4.2 Operation.............................................................. -11-
5.4.3 Other Products......................................................... -12-
5.4.4 VIVUS Option........................................................... -12-
5.5 Co-Promotion Following Exercise......................................................... -14-
5.5.1 Country Marketing Team................................................. -14-
5.5.2 Reimbursement.......................................................... -14-
5.5.3 VIVUS Promotion........................................................ -15-
5.5.4 Booking Sales.......................................................... -15-
5.6 Training................................................................................ -15-

6. PRODUCT SUPPLY AND DISTRIBUTION........................................................................... -15-
6.1 Product Supply.......................................................................... -15-
6.2 Samples................................................................................. -15-
6.3 Forecasts............................................................................... -16-
6.4 Orders.................................................................................. -16-
6.4.1 Orders................................................................. -16-
6.4.2 Form of Order.......................................................... -16-
6.5 Delivery................................................................................ -16-
6.6 Product Rejection....................................................................... -16-
6.7 Suppliers............................................................................... -17-
6.8 VIVUS Cost of Goods..................................................................... -17-
6.9 Shortage of Supply...................................................................... -17-
6.9.1 Joint Efforts.......................................................... -17-
6.9.2 EU Facility............................................................ -17-
6.9.3 Allocation............................................................. -17-
6.9.4 [*].................................................................... -18-
6.9.5 [*].................................................................... -18-
6.10 [*]..................................................................................... -18-

7. EXCHANGE OF INFORMATION AND CONFIDENTIALITY............................................................... -18-
7.1 Clinical Data........................................................................... -18-
7.2 Adverse Experiences..................................................................... -18-
7.3 Nondisclosure........................................................................... -18-
7.4 Disclosure to Affiliates................................................................ -19-
7.5 Terms of AGREEMENT...................................................................... -19-
7.6 Product Data............................................................................ -19-
7.7 Regulatory Requirements................................................................. -20-

8. PATENT PROSECUTION AND LITIGATION ........................................................................ -20-
8.1 Ownership of Inventions................................................................. -20-
8.2 Maintenance of PATENTS.................................................................. -20-
8.2.1 Filings................................................................ -20-
8.2.2 Extensions............................................................. -20-
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8.3 Infringement by PRODUCT................................................................. -21-
8.4 Third Party Infringement................................................................ -21-
8.5 Recovery................................................................................ -21-
8.6 Status of Activities.................................................................... -21-

9. TRADEMARKS................................................................................................ -22-
9.1 Display................................................................................. -22-
9.2 License................................................................................. -22-
9.3 Registration............................................................................ -22-
9.4 Recordation............................................................................. -22-
9.5 Approval of Promotional Materials....................................................... -23-
9.6 Termination............................................................................. -23-

10. TERM AND TERMINATION...................................................................................... -23-
10.1 Expiration.............................................................................. -23-
10.2 Default - Events of Termination......................................................... -23-
10.2.1 Payment Obligation..................................................... -23-
10.2.2 Bankruptcy Proceedings................................................. -23-
10.3 Termination by Non-Defaulting Party..................................................... -24-
10.4 Material Non-Performance/Misrepresentation.............................................. -24-
10.5 Termination by ASTRA.................................................................... -24-
10.6 Material Non-Performance - Resolution/Arbitration....................................... -25-

11. [*]....................................................................................................... -25-
11.1 [*]..................................................................................... -25-
11.2 [*]..................................................................................... -25-

12. RIGHTS AND DUTIES UPON TERMINATION........................................................................ -25-
12.1 Payment................................................................................. -25-
12.2 Sale of Remaining Inventory............................................................. -25-
12.3 [*]..................................................................................... -25-
12.4 Survival................................................................................ -26-

13. WARRANTIES, REPRESENTATIONS, AND INDEMNIFICATIONS......................................................... -26-
13.1 General Representations................................................................. -26-
13.1.1 Duly Organized......................................................... -27-
13.1.2 Due Execution.......................................................... -27-
13.1.3 No Third Party Approval................................................ -27-
13.1.4 Binding AGREEMENT...................................................... -27-
13.1.5 Full Disclosure. ..................................................... -27-
13.2 Covenants, Representations and Warranties of VIVUS as to Manufacture and
Supply of Product................................................................................ -28-
13.2.1 Agreements............................................................. -28-
13.2.2 VIVUS Obligations...................................................... -28-
13.2.3 Specifications and Manufacturing Standards............................. -29-
13.2.4 Quality of Starting Materials and Packing Materials.................... -29-
13.2.5 Good Manufacturing GMP Standards/Regulatory Standards.................. -29-
13.2.6 Documentation.......................................................... -30-
13.2.7 ASTRA Right of Inspection.............................................. -30-
13.2.8 Quality Audit.......................................................... -30-
13.3 Indemnification by ASTRA................................................................ -30-
13.4 Indemnification by VIVUS................................................................ -31-
</TABLE>

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14. GENERAL PROVISIONS........................................................................................ -32-
14.1 Force Majeure........................................................................... -32-
14.2 Governing Law and Arbitration........................................................... -32-
14.3 Waiver of Breach........................................................................ -33-
14.4 Separability............................................................................ -33-
14.5 Entire Agreement........................................................................ -33-
14.6 Notices................................................................................. -34-
14.7 Assignment.............................................................................. -34-
14.8 No Partnership or Joint Venture......................................................... -35-
14.9 Third Party Rights...................................................................... -35-
14.10 Execution in Counterparts............................................................... -36-
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DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (hereinafter "AGREEMENT"), made as of the
29th day of May, 1996 ("Effective Date"), between VIVUS International Limited, a
company organized under the laws of Bermuda and having a place of business at
Clarendon House, Church Street, Hamilton, Bermuda ("VIVUS") and Astra AB, a
company organized under the laws of Sweden and having its registered office at
S-151 85 Sodertalje Sweden, ("ASTRA").

RECITALS

A. VIVUS has developed a product for the transurethral delivery of
alprostadil for the treatment of erectile dysfunction (as described below, the
"PRODUCT").

B. ASTRA desires to obtain from VIVUS certain distribution rights, and
in certain cases licenses, for such PRODUCT in Europe, Central and South
America, Australia and New Zealand and VIVUS is willing to grant to ASTRA such
rights on the terms and conditions set forth below.

C. VIVUS is a wholly-owned subsidiary of VIVUS, INC., a Delaware
corporation ("VIVUS INC."), which has guaranteed the performance by VIVUS of
this AGREEMENT.

AGREEMENT

1. DEFINITIONS

1.1 "AFFILIATES" shall mean any corporation, firm, partnership or other
entity, whether de jure or de facto, which directly or indirectly owns, is owned
by or is under common ownership with a party to the extent of at least fifty
percent (50%) of the equity (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction)
having the power to vote on or direct the affairs of the entity and any person,
firm, partnership, corporation or other entity actually controlled by,
controlling or under common control with such party.

1.2 "VIVUS PRIORITY COUNTRIES"or "VP COUNTRIES" shall mean the
countries of the United Kingdom, Ireland, France, Germany, Belgium, the
Netherlands, Luxembourg, Austria and Switzerland.

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1.3 "FOIL POUCH PACKAGE FORM" shall mean PRODUCT in finished dosage
form, including its cap, packaged into an individual foil pouch. [*]

1.4 "MAA" shall mean a fully completed marketing authorization
application (comparable to a New Drug Application filed with the U.S. FDA),
including all supporting documentation and data required for such application to
be accepted for review, filed by VIVUS with the requisite health regulatory
authorities of any country of the TERRITORY requesting approval for
commercialization of a PRODUCT for a particular indication in such country. It
is understood that MAA does not include applications for pricing or
reimbursement approval.

1.5 "MAA APPROVAL" shall mean, with respect to each country of the
TERRITORY for a particular PRODUCT, approval by the health regulatory authority
in such country that is the counterpart of the U.S. FDA of the MAA filed in such
country. It is understood that, as used herein, MAA APPROVAL does not include
pricing or reimbursement approval.

1.6 "MAJOR COUNTRY" shall mean the United Kingdom, France, Germany,
Italy or Spain.

1.7 "NET SALES" shall mean [*] Notwithstanding the foregoing, the
amounts described in (a) and (b) above shall be deducted only to the extent they
are stated separately on the invoice and paid by the buyer. For the purposes of
this definition a "subdistributor" does not include wholesalers and resellers of
PRODUCT who do not engage in any marketing or promotion of the PRODUCT. [*]

1.8 "PATENTS" shall mean all patents and patent applications (including
continuations, continuations-in-part, divisions, patents of addition, reissues,
renewals, extensions and SPCs) which are or become owned by VIVUS or VIVUS INC.,
or to which VIVUS or VIVUS INC. has, now or in the future, the right to grant
licenses and distribution rights, which generically or specifically claim
PRODUCT, a process for manufacturing PRODUCT, an intermediate used in such
process or a use of PRODUCT. With respect to any such patents or applications
which VIVUS or VIVUS INC. acquires or has acquired from a third party, the same
shall be included within the "Patents" hereunder to the extent that VIVUS or
VIVUS INC. has the right to license the same hereunder. A list of Patents as of
this date and the current status of each is attached as Exhibit A.

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1.9 "PRODUCT(S)" shall mean the VIVUS "MUSE" product for which an NDA
has been filed in the U.S. as of the Effective Date, and any other product to
treat male erectile dysfunction in humans which is locally administered and
contains a vasodilator, which is owned by VIVUS or VIVUS INC. or with respect to
which VIVUS or VIVUS INC. has the right to grant distribution rights to ASTRA on
the terms of this AGREEMENT. If VIVUS or VIVUS INC. acquires distribution rights
in the future with respect to such a product for the TERRITORY, it shall use
good faith efforts to acquire the necessary rights to include such product
within the scope of this AGREEMENT and if VIVUS or VIVUS INC. is unable to
obtain such rights, then VIVUS or VIVUS INC. agrees not to market itself, or
authorize any third party to market, such product in the TERRITORY during the
term of this AGREEMENT.

1.10 "SPC" shall mean a right based upon a PATENT to exclude others
from making, using or selling PRODUCT, such as a Supplementary Protection
Certificate.

1.11 "TERRITORY" shall mean Albania, Andorra, Austria, Belgium, Bosnia,
Bulgaria, Croatia, Czech Republic, Cyprus, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein,
Lithuania, Luxembourg, Macedonia, Malta, Moldavia, Monaco, Montenegro,
Netherlands, Norway, Poland, Portugal, Rumania, San Marino, Slovakia, Slovenia,
Spain, Sweden, Switzerland, Turkey, United Kingdom and Vatican City, Australia,
New Zealand and Central and South America (as defined in Exhibit B).

1.12 "THIRD PARTY(IES)" shall mean any party other than ASTRA, VIVUS
and their AFFILIATES.

1.13 "VIVUS COST OF GOODS" shall mean [*]

1.14 "VIVUS TRADEMARK" shall mean the "MUSE" trademark which VIVUS has
used in connection with the PRODUCT.

1.15 "VIVUS ALTERNATIVE TRADEMARK" shall mean a trademark other than
the VIVUS TRADEMARK which VIVUS has developed and the parties agree to use with
the PRODUCT in those countries in the TERRITORY where the VIVUS TRADEMARK is not
selected by VIVUS for use.

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1.16 "FIRST COMMERCIAL SALE" shall mean, with respect to each PRODUCT
in each country, the first bona fide, arm's length sale of such PRODUCT in such
country following receipt of MAA Approval of such PRODUCT in such country.

2. GRANT OF DISTRIBUTION RIGHTS

2.1 Appointment. VIVUS hereby appoints ASTRA as the exclusive
distributor and marketer of PRODUCT for all approved indications in the
TERRITORY, with the right to grant subdistribution rights to subdistributors who
distribute other ASTRA products, subject to VIVUS' rights with respect to the
ASTRA/VIVUS sales force in the VP COUNTRIES in Article 5 below, and all the
other terms and conditions of this AGREEMENT. ASTRA may subdistribute PRODUCTS
through other subdistributors with VIVUS' prior written approval. VIVUS reserves
all rights not expressly granted herein.

2.2 No Conflict. During the term of this AGREEMENT, ASTRA agrees that
neither ASTRA nor its AFFILIATES will market or distribute any locally applied,
vasoactive agent-containing products in the TERRITORY for the treatment of
erectile dysfunction other than PRODUCTS. In addition, ASTRA agrees not to
launch in the TERRITORY any other products with respect to which the main
indication is the treatment of erectile dysfunction without first conferring
with VIVUS in good faith in an effort to find a mutually acceptable solution.

2.3 Sales Outside TERRITORY. ASTRA agrees that neither ASTRA nor its
AFFILIATES will sell or provide PRODUCTS to AFFILIATES or THIRD PARTIES if ASTRA
knows or has reason to know that PRODUCTS sold or provided to such AFFILIATE or
THIRD PARTY may be sold or transferred, directly or indirectly, for use outside
the TERRITORY, except in the case of unsolicited, passive sales in which the
PRODUCT is intended solely for reimport into the TERRITORY.

3. PAYMENTS

3.1 Initial Payments. In consideration of the costs incurred by VIVUS
in connection with the research and development of the PRODUCT and in exchange
for the exclusive rights granted herein, ASTRA shall pay VIVUS the amounts in
(a), (b), (c) and (d) below. The [*] and [*] payment

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periods specified in (b), (c) and (d) below shall not begin to run until ASTRA
receives written notice from VIVUS of the occurrence of the MAA Submission or
MAA APPROVAL, as applicable.

(a) Ten Million Dollars ($10,000,000) within five (5) days
after execution of this AGREEMENT;

(b) [*] and

(d) [*]

(e) Notwithstanding the foregoing, ASTRA shall not be required
to make the payments under paragraph (c) or (d) above until VIVUS has obtained
any required approval from the U.S. FDA to export the particular PRODUCT to the
Territory. The foregoing payments shall be noncreditable and nonrefundable. It
is understood that a PRODUCT which contains an active ingredient different from
(i.e. in addition to or in lieu of that contained in) the first PRODUCT to meet
a particular milestone and which requires the filing of an additional MAA shall
be deemed the "SECOND PRODUCT" with respect to such milestone. It is further
understood that not more than an aggregate total of [*] shall be paid under this
Section 3.1. For purposes of paragraph (b) above, "MAA submission" shall be
deemed to have occurred upon the earlier of (i) the expiration of the period
specified in applicable regulations for any notice by the particular health
regulatory agency that such MAA will not be accepted for review, without VIVUS
having received such notice from such agency; or (ii) the receipt by VIVUS from
such agency that the MAA will be accepted for review; provided that in any case,
if no such period or acceptance is provided for in the applicable regulations,
then "MAA submission" shall be the date such MAA is filed by VIVUS.

3.2 Transfer Price. In consideration for the supply of PRODUCT by
VIVUS, ASTRA shall pay to VIVUS the amounts specified in Sections 3.2.1 and
3.2.2 below (the "Transfer Price").

3.2.1 NET SALES. For sales of PRODUCT in countries in the
TERRITORY other than ASTRA Non-Affiliate countries (as defined below), ASTRA
shall pay to VIVUS an amount equal to the percentage of the NET SALES price of
such PRODUCT with such percentage determined in accordance with the following
percentages of Annual Net Sales:

[*]

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3.2.2 [*]

3.2.3 Obsolete Inventory. For purposes of determining the
transfer price to be paid to VIVUS, any units of PRODUCT that expire or that are
accidentally destroyed by ASTRA shall be deemed to be SAMPLES, and the transfer
price to be paid by ASTRA to VIVUS for such units shall equal the Samples
Transfer Price.

3.3 Discounting. In the event that ASTRA or its AFFILIATES sells
PRODUCT to a THIRD PARTY who also purchases other products or services from
ASTRA or its AFFILIATES, and ASTRA or its AFFILIATES discounts the purchase
price of the PRODUCT to a greater degree than ASTRA or its AFFILIATE,
respectively, generally discounts the price of their other products to such
customer then in such case the NET SALES for the sale of PRODUCTS to such THIRD
PARTY shall be deemed to equal the arm's length price that THIRD PARTIES would
generally pay for the PRODUCT alone when not purchasing any other product or
service from ASTRA or its AFFILIATE. For purposes of this provision
"discounting" includes establishing the list price at a lower-than-normal level.

3.4 Sales. ASTRA shall keep and require its AFFILIATES and
subdistributors to keep complete and accurate records of all sales of PRODUCT.
VIVUS shall have the right, at VIVUS' expense, through a certified public
accountant or other representative, to examine such records during regular
business hours provided, however, that such examination shall not take place
more often than once a year and shall not cover such records for more than the
preceding three (3) years. If such examination reveals an underpayment to VIVUS
in excess of ten percent (10%) for any period then ASTRA shall promptly
reimburse VIVUS for the costs of such examination of such period and pay the
underpayment amount.

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3.5 Provisional Payments. Payments due to VIVUS under Section 3.2 shall
be provisionally made, on a per unit of PRODUCT basis, within [*] of delivery to
ASTRA of each unit of PRODUCT. The provisional payment shall be based on the
following formula:

[*]

where:

[*]

3.6 Reconciliation. Actual payments due to VIVUS under Section 3.2.1
shall be calculated for each [*] in question, according to the following
formula:

[*]
where:
[*]

for purposes of this Section 3.6, (i) the term "NET SALES UNITS" shall mean [*]

3.7 Payment. Within [*] after the end of each calendar quarter, ASTRA
shall provide VIVUS with a true accounting of all payment obligations, if any,
owed in accordance with this Section 3, together with a statement setting out
all details necessary to calculate the amounts actually due hereunder with
respect to NET SALES made in that calendar quarter, or any overpayment by ASTRA
for such calendar quarter which is owed by VIVUS to ASTRA, including, but not
limited to, units of PRODUCT sold on a country-by-country basis, gross sales of
PRODUCT in that calendar quarter on a country-by-country basis, NET SALES in
that calendar quarter on a country-by-country basis, all relevant deductions,
and all relevant exchange rate conversions. Any payments due shall accompany
such statement. If ASTRA has made an overpayment to VIVUS, ASTRA shall be
entitled to credit such overpayments against the following payment due.

3.8 Taxes. Any tax, duty or other levy paid or required to be withheld
by ASTRA on account of sums payable to VIVUS under this AGREEMENT shall be
deducted from sums otherwise due. ASTRA shall secure and send to VIVUS
documentation of any such taxes, duties or other levies withheld and paid by
ASTRA, its AFFILIATES, or its subdistributors for the benefit of VIVUS.

3.9 U.S. Dollars. All sums due under this AGREEMENT shall be payable in
U.S. dollars. Monetary conversion from the currency of a foreign country, in
which PRODUCT is sold, into United

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<PAGE> 13

States currency shall be calculated at the actual average of the buying and
selling rates of exchange for the quarter in which such sales were made as such
rates are reported, as of the last business day of such quarter, by S.E. Banken
in Stockholm.

4. DEVELOPMENT

4.1 Regulatory Steering Committee. The parties shall establish a
Regulatory Steering Committee ("Regulatory Committee") to oversee the regulatory
activities relating to the PRODUCT in the TERRITORY. The Committee will consist
of two representatives from each party. Decisions of the Regulatory Committee
shall be by majority approval, with an equal number of representatives of both
ASTRA and VIVUS voting on the matter; provided, however, if the Regulatory
Committee cannot reach agreement on a matter, the dispute shall be referred to
the Chief Executive Officer of VIVUS and the Executive Vice President for ASTRA
with overall responsibility for the PRODUCT, who shall meet promptly and
negotiate in good faith to resolve the dispute. [*]

4.2 Product Development. During the term of the AGREEMENT, VIVUS shall,
at its sole expense, carry out the remaining preclinical, pharmaceutical and
clinical development of the initial PRODUCT for the TERRITORY to achieve MAA
APPROVAL and shall keep the Regulatory Committee reasonably informed of its
activities; and VIVUS agrees to keep the Regulatory Committee reasonably
informed as to the progress of regulatory affairs with respect to the PRODUCTS
outside the TERRITORY, by way of updates to the Regulatory Committee at its
meetings and as otherwise reasonably requested by ASTRA. ASTRA shall provide
reasonable assistance to VIVUS, free of charge, regarding regulatory matters
directly related to the development of PRODUCT in the TERRITORY.

4.3 Regulatory Approvals.

4.3.1 MAAs. Except as provided below, VIVUS shall be
responsible, at its sole expense, for filing MAAs for PRODUCT in the TERRITORY
up to and including MAA APPROVAL and thereafter maintain such approval and VIVUS
shall be named on each such filing unless otherwise agreed. All such activity
shall be done in full consultation with the Regulatory Committee. VIVUS shall
also obtain any export approvals required by the U.S. FDA to export the

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PRODUCTS to the TERRITORY. VIVUS shall use all diligent efforts to obtain such
approvals for the initial PRODUCT as soon as practicable in countries within the
European Union, Norway and Switzerland. For all other countries within the
TERRITORY, promptly upon request by ASTRA, VIVUS will, as mutually agreed,
either use all diligent efforts to obtain such approvals in accordance with
mutually agreed timelines or provide ASTRA with a copy of portions of the
dossier (as amended), in English or translations already completed by VIVUS,
that are necessary to file an MAA in the particular country and including the
data then-available and in the latter case, ASTRA may pursue such approvals in
such countries at ASTRA's sole expense. All such filings will be in VIVUS' name
except where otherwise required by local law, in which case ASTRA shall ensure
that the registration is assigned back to VIVUS promptly upon termination of
ASTRA's distribution rights with respect to the PRODUCT in such country.

4.3.2 Pricing/Reimbursement. ASTRA will pursue pricing
approval and/or reimbursement within the TERRITORY where available, at ASTRA'S
option and expense. It is understood that ASTRA's decisions whether to seek or
accept governmental pricing and/or reimbursement approvals shall not be subject
to the approval of the Regulatory Committee, provided that ASTRA agrees to keep
the Regulatory Committee reasonably informed as to the status of such approvals.

4.4 Exchange of Information. Each party shall keep appropriate records
relating to the foregoing activities and shall report to the other party on the
status of such activities on a regular basis. The parties shall exchange data
and information relating to PRODUCT development to the extent reasonably
necessary or appropriate, and each party shall have the right to use such
information received from the other in connection with exercising its rights and
performing its obligations under this AGREEMENT.

5. COMMERCIALIZATION AND PROMOTION

5.1 ASTRA Commercialization.

5.1.1 Diligence. ASTRA shall [*] (a) to launch each PRODUCT in
each MAJOR COUNTRY as soon as possible and commercially justifiable after an MAA
for such PRODUCT has been approved and in other countries within the TERRITORY
as soon as is commercially reasonable; and (b) after the FIRST COMMERCIAL SALE
of a PRODUCT in a country, to achieve high volume

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<PAGE> 15

sales of such PRODUCT in such country. Without limiting the foregoing, ASTRA
agrees to devote to the marketing and promotion of the PRODUCT the resources
described in Exhibit D.

5.1.2 Failure to Sell. If ASTRA fails to launch a PRODUCT in a
MAJOR COUNTRY within twelve (12) months from the date of MAA APPROVAL for such
PRODUCT in such MAJOR COUNTRY, or if ASTRA fails to launch a PRODUCT in any
country other than a MAJOR COUNTRY within [*] after MAA APPROVAL for such
PRODUCT in such other country, then such MAJOR COUNTRY or other country (as the
case may be) shall cease to be part of the TERRITORY for all purposes of this
AGREEMENT, and all rights to distribute PRODUCT in such country shall revert to
VIVUS. [*]

5.2 Joint Marketing Board.

5.2.1 General. Promptly after the EFFECTIVE DATE, ASTRA and
VIVUS shall assemble a team of appropriate personnel from both ASTRA and VIVUS
(hereinafter referred to as the "Joint Marketing Board" or "JMB") to act as an
advisory committee to ASTRA in marketing matters, to coordinate the exchange
between the parties of information regarding the marketing and sale of PRODUCT
in the TERRITORY and to undertake and/or approve such other matters as are
provided for the JMB under this AGREEMENT.

5.2.2 Constitution. The JMB shall consist of six (6) members
three (3) of whom shall be appointed by ASTRA and three (3) of whom shall be
appointed by VIVUS. The presence of at least four (4) members, two (2) of whom
shall have been selected by each party, shall constitute a quorum for purposes
of action by the JMB. During the first two years from the Effective Date the JMB
will meet at least once each quarter and at such other times during the term as
mutually agreed.

5.2.3 Decisions. Decisions of the JMB shall be by majority
approval, with an equal number of representatives of both ASTRA and VIVUS voting
on the matter; provided, however, if the JMB cannot reach agreement on a matter,
the dispute shall be referred to the Chief Executive Officer of VIVUS and the
Executive Vice President for ASTRA with overall responsibility for the PRODUCT,
who shall meet promptly and negotiate in good faith to resolve the dispute. [*]

5.3 Marketing Plans.

5.3.1 General. ASTRA, in close consultation with the JMB,
shall prepare the detailed marketing plans for the overall TERRITORY and for
each MAJOR COUNTRY, such plans to include plans related to the prelaunch,
launch, promotion and sale of PRODUCT, and which plans

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<PAGE> 16

shall be subject to the approval of the JMB (the "Marketing Plans") under 5.2.3
above. The Marketing Plans shall be designed to fulfill ASTRA's undertakings
pursuant to Section 5.1. Subject to the provisions of this AGREEMENT, and
subject to compliance with the Marketing Plans, ASTRA shall have full control
and authority of the day-to-day commercialization of PRODUCT in the TERRITORY
and implementation of the Marketing Plans, at ASTRA's expense. ASTRA shall
implement the Marketing Plans, and the JMB will review the progress of ASTRA's
marketing efforts under the Marketing Plans.

5.3.2. VIVUS Approval. Without limiting the foregoing, it is
understood that any claim, message or other material part of promotional
materials, samples, advertising and materials for training sales representatives
with respect to PRODUCT, which has not previously been approved or used by VIVUS
in its own promotional or training activities, shall be subject to review and
approval by VIVUS prior to the use by ASTRA, its AFFILIATES and subdistributors.
VIVUS shall use all reasonable efforts to complete any such review and revert to
ASTRA with an answer within fourteen (14) days from notification by ASTRA to
VIVUS of the relevant matter.

5.4 VIVUS Specialist Division.

5.4.1 Formation. Without delay following the Effective Date,
ASTRA will appoint a separate product manager for the promotion of PRODUCT for
each of the following VP COUNTRIES: Germany, United Kingdom, France and one for
the Benelux Countries (each, a "Product Manager"). Each such appointment shall
be subject to the prior reasonable approval of VIVUS. Following appointment of
the Product Managers, ASTRA will proceed and assign such number of sales
representatives as is approved by the JMB for promotion of PRODUCT with
specialists in the VP COUNTRIES (together with the Product Managers, the
"ASTRA/VIVUS Specialist Division") as promptly as necessary so that the
ASTRA/VIVUS Specialist Division will be prepared to promote the PRODUCT in the
particular VP COUNTRY upon MAA APPROVAL in such VP COUNTRY. Except as provided
below, all staff of the ASTRA/VIVUS Specialist Division will be employed solely
by ASTRA and all costs connected with the activities of the ASTRA/VIVUS
Specialist Division will be paid for by ASTRA.

5.4.2 Operation. The ASTRA/VIVUS Specialist Division shall
have a separate identity, and members of the ASTRA/VIVUS Specialist Division
shall be portrayed to specialists and the market as "ASTRA/VIVUS"
representatives (including on business cards, stationery and other

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<PAGE> 17
identifying materials). The ASTRA/VIVUS Specialist Division will be recruited
[*] according to ASTRA's normal compensation and hiring practices, and shall be
trained and maintained at a level of quality and professionalism at least as
great as ASTRA's other first quality sales promotional forces. The ASTRA/VIVUS
Specialist Division will be managed by ASTRA with input from VIVUS through the
JMB. In addition, the parties will form an advisory committee to be composed of
each Product Manager and to be chaired by a VIVUS representative. The committee
will meet at least semi-annually and each Product Manager will provide a
reasonably detailed report on the promotional activities in the applicable
country. The Product Managers will cooperate in implementing the reasonable
suggestions of the committee chairman. The ASTRA/VIVUS Specialist Division shall
at all times be maintained at a staffing level sufficient to maintain frequent
contact with practitioners whose practices focus at least in part on the
treatment of male impotence. VIVUS shall have the right to reasonably approve
representatives to be hired or transferred into the ASTRA/VIVUS Specialist
Division. [*] It is understood that such minimum number of sales reps shall be
reasonably allocated among the VP COUNTRIES, and that no sales reps need be in
place for a particular VP COUNTRY until the FIRST COMMERCIAL SALE of a PRODUCT
in such VP COUNTRY.

5.4.3 Other Products. To the extent that the ASTRA/VIVUS Specialist
Division may do so without disadvantaging the launch and promotion of the
PRODUCTS, ASTRA may use the ASTRA/VIVUS Specialist Division to promote products
other than the "PRODUCTS" ("Other Products") of ASTRA that are appropriate for
the ASTRA/VIVUS Specialist Division. Until the Transfer Date (as defined below),
the ASTRA/VIVUS Specialist Division will promote Other Products of VIVUS only as
mutually agreed by ASTRA and VIVUS.

5.4.4 VIVUS Option. Beginning no earlier than [*] after MAA APPROVAL of
a PRODUCT in the first VP COUNTRY, VIVUS shall have the right to take over the
ASTRA/VIVUS Specialist Division in accordance with this Section 5.4.4 (the
"Option"). Following VIVUS' exercise of the Option in a particular VP COUNTRY,
VIVUS will co-promote the PRODUCTS in such VP COUNTRY as set forth in Section
5.5. below.

(a) To exercise the Option, VIVUS must give at least [*] prior
written notice to ASTRA (the "Exercise Notice") and the Exercise Notice shall
specify the number of representatives that VIVUS wishes to take over for each VP
COUNTRY, [*] for such VP COUNTRY listed on Exhibit E hereto (such number being
referred to as the "Authorized VIVUS

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<PAGE> 18
Reps"). It is understood that VIVUS may exercise the Option at different times
for different VP COUNTRIES, and that except as expressly provided in (b) below,
ASTRA shall not be obligated to transfer to VIVUS, or assist VIVUS in hiring,
any sales representatives from outside the ASTRA/VIVUS Specialist Division.

(b) Delivery of the Exercise Notice for a particular VP
COUNTRY shall be deemed an undertaking by VIVUS to take over from ASTRA on the
date specified in the Exercise Notice (the "Transfer Date") up to that number of
representatives specified in the Exercise Notice, as follows: Within thirty (30)
days after delivery of the Exercise Notice, or such later period as VIVUS may
request, ASTRA shall arrange for VIVUS to interview each member of the
ASTRA/VIVUS Specialist Division in such VP COUNTRY. Following such interviews,
VIVUS may extend offers of employment to those of the ASTRA/VIVUS Specialist
Division whom VIVUS wishes to hire. In the event that VIVUS wishes to hire more
representatives than those members of the ASTRA/VIVUS Specialist Division who
accept offers of employment from VIVUS, ASTRA shall use reasonable best efforts
to attract [*] additional representatives for VIVUS' to hire as part of its
specialty sales force, up to the number of such representatives to whom VIVUS
extended offers of employment but who did not join VIVUS, not to exceed the
maximum number of Authorized VIVUS Reps. To the extent VIVUS desires to hire
additional sales representatives, VIVUS shall be responsible for hiring such
additional representatives.

(c) On the Transfer Date, ASTRA shall transfer to VIVUS the
physical assets that were purchased for the exclusive use of those members of
the ASTRA/VIVUS Specialist Division who become employed by VIVUS in accordance
with (b) above and which VIVUS approved in writing, as well as any intangible
assets necessary or appropriate for the members of the ASTRA/VIVUS Specialist
Divisions so transferred to VIVUS to continue promoting the PRODUCT and
performing the other functions of the ASTRA/VIVUS Specialist Division in such VP
COUNTRY (e.g. sales reports, records of calls made and other documentation).
Upon such transfer, VIVUS shall pay to ASTRA an amount equal to the book value
of the physical assets so transferred, with such book value being determined in
accordance with generally accepted accounting practices consistently applied for
ASTRA's financial reporting purposes.

(d) ASTRA agrees to cooperate and use its best reasonable
efforts at all times as VIVUS may reasonably request to facilitate the
transition of the ASTRA/VIVUS Specialist

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<PAGE> 19
Division to VIVUS, subject to applicable labor laws. Without limitation, ASTRA
agrees not to solicit or entice members of the ASTRA/VIVUS Specialist Division
away from the Division. VIVUS agrees to use good faith efforts to keep ASTRA
reasonably informed with respect to VIVUS' intentions to exercise the Option, as
reasonably requested by ASTRA.

5.5 Co-Promotion Following Exercise. Following the Transfer Date for a
VP COUNTRY, ASTRA's exclusive distribution rights hereunder shall continue on
the same terms and VIVUS shall have the right to copromote the PRODUCTS with
ASTRA in such VP COUNTRY, subject to the following:

5.5.1 Country Marketing Team. At an appropriate time, ASTRA
and VIVUS shall assemble a team of appropriate personnel from both ASTRA and
VIVUS to plan and coordinate the ongoing promotional activities for the PRODUCTS
in such VP COUNTRY (each, a "Country Marketing Team "). Issues of the Country
Marketing Team which cannot be resolved by the Country Marketing Team shall be
subject to final resolution by the Joint Marketing Board in accordance with
Section 5.2 above. The Country Marketing Team shall meet on a regular basis and
shall alternate venues for each meeting between the VIVUS site and the ASTRA
site in the particular country. VIVUS and ASTRA shall at all times use their
best reasonable efforts to coordinate their respective sales promotional
activities for the PRODUCTS.

5.5.2 Reimbursement. Following the Transfer Date, [*] actually
engaged in the co-promotion of the PRODUCT in such VP COUNTRY, [*] for such VP
COUNTRY (such number of representatives hereafter referred to as the "VIVUS
Co-Promotion Reps"), as follows:

(a) [*] ("Sales Rep Costs"); provided that, for
purposes of such calculation, the Sales Rep Costs for each full time equivalent
VIVUS Co-Promotion Rep in such VP COUNTRY shall [*]

(b) The payment for Sales Rep Costs shall be made in
[*], each of which shall be due [*], in the currency of the particular VP
COUNTRY. [*] VIVUS shall submit to ASTRA a report containing an accounting of
the full time equivalent VIVUS Copromotion Reps deployed by VIVUS in the VP
COUNTRIES, together with a statement of the Sales Rep Costs for such VIVUS
Co-Promotion Reps in such VP Country during the preceding quarter. If for any
calendar quarter the actual number of full-time equivalent VIVUS Copromotion
Reps is less than the number reimbursed in advance for such quarter by ASTRA,
the excess payment shall be applied as a

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credit against the next payment due under this Section 5.5. If for any calendar
quarter the actual number of VIVUS Copromotion Reps is more than the number paid
in advance by ASTRA, subject to the [*] VIVUS Copromotion Reps to be reimbursed
hereunder, ASTRA shall pay to VIVUS the additional amount due in the next
payment due under this Section 5.5.

5.5.3 VIVUS Promotion. VIVUS' promotional efforts with respect
to the PRODUCTS in the VP COUNTRIES shall be in accordance with the Marketing
Plans then in effect; provided that VIVUS shall have the right to deploy that
number of VIVUS Co-Promotion Reps described in Section 5.5.2 above. VIVUS shall
use in connection with the marketing and promotion of PRODUCT within the
TERRITORY only promotional materials, promotional samples, advertising and
literature approved by the Joint Marketing Board or the applicable Country
Marketing Team. ASTRA agrees to supply VIVUS sales representatives with the same
quantities of promotional materials (including Promotional Samples) for PRODUCTS
as ASTRA supplies to its own sales representatives. VIVUS will use all diligent
efforts to ensure that its sales representatives to be reimbursed by ASTRA are
performing according to the reasonable performance standards in the industry
applied to professional pharmaceutical sales representatives in the relevant
country, taking ASTRA's performance measuring standards into account.

5.5.4 Booking Sales. It is understood that, during the term of
this AGREEMENT, ASTRA will book all NET SALES for PRODUCT in each country of the
TERRITORY.

5.6 Training. VIVUS will provide a one time training for ASTRA's sales
representatives with respect to the PRODUCT(s) and will provide to ASTRA
training materials for the PRODUCT(s) prepared by VIVUS for use in training
VIVUS' U.S. sales representatives. ASTRA may copy any training materials
provided by VIVUS for future training programs conducted by ASTRA. ASTRA will at
all times ensure that its sales force is fully trained with respect to the
PRODUCT(s).

6. PRODUCT SUPPLY AND DISTRIBUTION

6.1 Product Supply. Subject to the terms and conditions of this Section
6, VIVUS shall use its reasonable best efforts to supply ASTRA with all ASTRA's
commercial requirements for PRODUCT for the TERRITORY, in FOIL POUCH PACKAGE
FORM or such other form as mutually agreed, during the term of this AGREEMENT,
and ASTRA shall exclusively purchase all

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<PAGE> 21
such commercial requirements from VIVUS during the term of the AGREEMENT. ASTRA
shall prepare all such PRODUCT in final packaging form.

6.2 Samples. VIVUS shall supply ASTRA with mutually agreed quantities
of PRODUCT sales samples ("Promotional Samples"), and with quantities of PRODUCT
reasonably necessary for ASTRA to conduct quality assurance testing to verify
that lots of PRODUCT supplied by VIVUS meet the applicable specifications ("QA
Samples") (collectively, "SAMPLES"). Such PRODUCT shall be supplied in FOIL
POUCH PACKAGE FORM or such other form as mutually agreed. ASTRA shall prepare
all such PRODUCT in final packaging form, except QA Samples utilized by ASTRA.

6.3 Forecasts. During the term of this AGREEMENT, at least [*] prior to
the start of each [*] ASTRA shall provide VIVUS with [*]. Each forecast shall
indicate the [*]. Each forecast will also [*].

6.4 Orders.

6.4.1 Orders. Together with each forecast provided under
Section 6.3 above (the "Current Forecast"), [*].

6.4.2 Form of Order. ASTRA's orders shall be made pursuant to
a purchase order which is in a form mutually acceptable to the parties, and
shall provide for shipment in accordance with reasonable delivery schedules as
may be agreed upon from time to time by VIVUS and ASTRA. VIVUS shall use all
reasonable efforts to notify ASTRA within 5 days from receipt of an order of its
ability to fill any amounts of such order in excess of the quantities that VIVUS
is obligated to supply. No terms contained in any purchase order, order
acknowledgment or similar standardized form shall be construed to amend or
modify the terms of this AGREEMENT and in the event of any conflict, this
AGREEMENT shall control unless expressly agreed in writing.

6.5 Delivery. With respect to exact shipping dates, VIVUS shall use its
reasonable best efforts to ship forecasted quantities of PRODUCT on the dates
specified in ASTRA's purchase orders submitted and accepted in accordance with
Section 6.4 above. PRODUCT will be delivered FCA (Incoterms) shipping point. The
shipping packaging shall be in accordance with good commercial practice with
respect to protection of the PRODUCT during transportation.

6.6 Product Rejection. If the PRODUCT supplied by VIVUS under this
AGREEMENT fails to conform to the applicable Specifications and Manufacturing
Standards, ASTRA shall notify

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VIVUS no later than thirty (30) days after its discovery of non-conformity and
ASTRA shall present reasonable evidence to VIVUS of such nonconformity. VIVUS
shall replace, at no additional expense to ASTRA, such non-conforming PRODUCT
with new PRODUCT which does conform within thirty (30) days after receipt of
ASTRA's notification under this Section. VIVUS may analyze any unit of PRODUCT
rejected by ASTRA for nonconformity and if it is objectively established that
the PRODUCT was conforming, then ASTRA shall be responsible for payment for any
such units of PRODUCT. VIVUS shall give ASTRA written instructions as to how
ASTRA should, at VIVUS' expense, dispose of any non-conforming material, and
such instructions shall comply with all appropriate governmental requirements.

6.7 Suppliers. Without limiting VIVUS' responsibility under this
AGREEMENT, VIVUS shall have the right at any time to satisfy its supply
obligations to ASTRA hereunder either in whole or in part through arrangements
with THIRD PARTIES engaged to perform services or supply facilities or goods in
connection with the manufacture, testing, and/or packaging of PRODUCT. VIVUS
shall ensure that all such facilities comply with applicable regulations and
will give ASTRA prior written notice of any such arrangement to the extent that
such arrangement would require changes to an MAA APPROVAL application filed in
the TERRITORY.

6.8 VIVUS Cost of Goods. VIVUS shall keep complete and accurate records
of VIVUS COST OF GOODS, such records to be in a form required under U.S.
Generally Accepted Accounting Principles (GAAP), consistently applied. ASTRA
shall have the right to the extent payments were made to VIVUS on the basis of
VIVUS COST OF GOODS, at ASTRA's expense, through a certified public accountant
or other representative acceptable to VIVUS, to examine such records during
regular business hours during the life of this AGREEMENT and for one (1) year
after its termination; provided, however, that such examination shall not take
place more often than once a year and shall not cover such records for more than
the preceding three (3) years and provided further that such accountant shall
report to ASTRA only as to the accuracy of the records.

6.9 Shortage of Supply.

6.9.1 Joint Efforts.

[*]

6.9.2 EU Facility. It is understood that VIVUS currently is
planning to establish in Ireland, or another country within the European Union,
a second facility to produce PRODUCT (the

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<PAGE> 23
"EU Facility") which will initially be established with [*]. VIVUS agrees to use
its best reasonable efforts to have such EU Facility in place and operational
[*] after the Effective Date.

6.9.3 Allocation. If despite the foregoing measures VIVUS is
unable to supply worldwide requirements of PRODUCT (based upon sales history and
realistic forecasted demand), VIVUS shall allocate the quantities of PRODUCT
that VIVUS has in inventory, and that VIVUS is able to produce, on a reasonable
basis, [*] provided that (subject to 6.4 above):

(a) VIVUS shall allocate [*] of the output of PRODUCT
from the EU Facility [*] solely among ASTRA and other THIRD PARTY distributors
of PRODUCT outside the United States, taking into account the relative sales of
PRODUCT for the preceding periods in each region, and the reasonable projected
sales of PRODUCT for such regions over the next succeeding periods; and

(b) In any event ASTRA shall be entitled to [*] of
the total quantities of PRODUCT available to VIVUS from all facilities during
such period (including quantities allocated to ASTRA under (a) above).

6.9.4 [*]

6.9.5 [*]

6.10 [*]

7. EXCHANGE OF INFORMATION AND CONFIDENTIALITY

7.1 Clinical Data. All clinical and preclinical data disclosed by VIVUS
shall be deemed confidential information of VIVUS.

7.2 Adverse Experiences. With respect to adverse drug experiences
relating to the PRODUCT, the parties shall report to the appropriate regulatory
authorities in the countries in which the PRODUCT is being developed or
commercialized, in accordance with the appropriate laws and regulations of the
relevant countries and authorities. Such reporting activities within the
TERRITORY shall be coordinated by the Regulatory Committee.

7.3 Nondisclosure. "Confidential Information" means any information,
data, or know-how which the disclosing party treats confidentially and
identifies as confidential or which the recipient knows or should have reason to
believe is so treated. VIVUS and ASTRA shall not (and shall ensure that its
AFFILIATES and subdistributors do not) use or reveal or disclose to THIRD
PARTIES any

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confidential information received from the other party without first obtaining
the written consent of the disclosing party, except as may be otherwise provided
herein, or as may be required for purposes of investigating, developing,
manufacturing or marketing PRODUCT or for securing essential or desirable
authorizations, privileges or rights from governmental agencies or to carry out
any litigation concerning PRODUCT. This confidentiality obligation shall not
apply to such information which is or becomes a matter of public knowledge, or
is already in the possession of the receiving party, or is disclosed to the
receiving party by a THIRD PARTY having the right to do so, or is subsequently
and independently developed by employees of the receiving party or AFFILIATES
thereof who had no knowledge of the confidential information disclosed, or is
required by law to be disclosed. The parties shall take reasonable measures to
assure that no unauthorized use or disclosure is made by others to whom access
to such information is granted. The obligations of confidentiality under this
Section shall remain in effect until the later of five (5) years after the
expiration of the term of this AGREEMENT or fifteen (15) years from the
Effective Date.

7.4 Disclosure to Affiliates. ASTRA may disclose any information
received from VIVUS to an AFFILIATE of ASTRA and its subdistributors, provided
that ASTRA ensures that all such AFFILIATES and subdistributors comply with
Sections 7.2 and 7.3 above.

7.5 Terms of AGREEMENT. No public announcement or other public
disclosure concerning the existence of or terms of this AGREEMENT shall be made,
either directly or indirectly, by any party to this AGREEMENT, except as may be
legally required or as may be required for recording purposes, without first
obtaining the written approval of the other party and agreement upon the nature
and text of such announcement or disclosure. The party desiring to make any such
public announcement or other disclosure shall provide the other party with a
copy of the proposed announcement or disclosure for review and comment in
reasonably sufficient time prior to public release. Each party agrees that it
shall cooperate fully with the other with respect to all disclosures regarding
this AGREEMENT to the Securities Exchange Commission and any other governmental
or regulatory agencies, including requests for confidential treatment of
proprietary information of either party included in any such disclosure. In
addition, each party agrees not to disclose this AGREEMENT or its terms to THIRD
PARTIES, except to professional advisors and financing sources or under
conditions that reasonably protect the confidentiality thereof. The parties will
mutually agree upon the contents of a press release (and accompanying Q&A) which
may be issued

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upon the Effective Date, and thereafter the parties may publicly disclose
information contained in such press release or Q&A without further approvals.

7.6 Product Data. ASTRA shall not submit for written or oral
publication any manuscript, abstract or the like which includes data or other
information relating to PRODUCT without first obtaining the prior written
consent of VIVUS. The contribution of each party shall be noted in all
publications or presentations by acknowledgment or coauthorship, whichever is
appropriate. ASTRA shall not conduct, or authorize, encourage, assist or
contract with any THIRD PARTY to conduct any clinical testing of a PRODUCT
without VIVUS' prior approval.

7.7 Regulatory Requirements. Subject to the terms of this AGREEMENT,
ASTRA may comply with statutory and regulatory requirements governing the use
and sale or other distribution of PRODUCT in any manner which it reasonably
deems appropriate, including, for example, by disclosing to regulatory
authorities confidential or other information received from VIVUS or THIRD
PARTIES.

8. PATENT PROSECUTION AND LITIGATION

8.1 Ownership of Inventions. ASTRA shall have and retain sole and
exclusive title to all inventions, discoveries and know how ("Inventions") which
are made by ASTRA, its employees, agents, or other third parties acting under
authority from ASTRA relating to PRODUCT and ASTRA hereby grants to VIVUS a
non-exclusive, worldwide license, with the right to sublicense, to such
Inventions to make, have made, use and sell PRODUCTS for any indication.

8.2 Maintenance of PATENTS.

8.2.1 Filings. As between ASTRA and VIVUS, VIVUS shall, at its
expense, have responsibility for filing, prosecution and maintenance of all
PATENTS in the TERRITORY. ASTRA shall have the right to review pending PATENT
applications and make recommendations to VIVUS concerning them. VIVUS will
consider in good faith all reasonable suggestions of ASTRA with respect thereto.
VIVUS agrees to keep ASTRA informed of the course of patent prosecution or other
proceedings with respect to the PATENTS within the TERRITORY. ASTRA shall
provide such patent consultation to VIVUS at no cost to VIVUS. ASTRA shall hold
all information disclosed to it under this Section as confidential.

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8.2.2 Extensions. ASTRA shall have the right but not the
obligation to seek extensions of the terms of PATENTS in the TERRITORY. At
ASTRA's request, VIVUS shall either authorize ASTRA to act as VIVUS' agent for
the purpose of making any application for any extensions of the term of PATENTS
and provide reasonable assistance therefor to ASTRA or shall diligently seek to
obtain such extensions, in either event, at ASTRA's expense.

8.3 Infringement by PRODUCT. In the event of the institution of any
suit by a THIRD PARTY against ASTRA for patent infringement involving the
manufacture, use, sale, distribution or marketing of PRODUCT anywhere in the
TERRITORY, ASTRA shall promptly notify VIVUS in writing. ASTRA shall have the
right but not the obligation to defend such suit against it at its own expense.
VIVUS and ASTRA shall assist one another and cooperate in any such litigation at
the other's reasonable request without expense to the requesting party, and in
any event VIVUS may participate in any such suit with counsel of its choice at
its own expense.

8.4 Third Party Infringement. In the event that VIVUS or ASTRA becomes
aware of actual or threatened infringement of a PATENT anywhere in the TERRITORY
by the manufacture or sale or use of a product for the transurethral delivery of
vasodilator drug to treat or prevent erectile dysfunction in humans (the
"Field"), that party shall promptly notify the other party in writing. VIVUS
shall have the first right but not the obligation to bring, at its own expense,
an infringement action against any THIRD PARTY. If VIVUS does not commence a
particular infringement suit within the Field within [*] of receipt of a request
by ASTRA to do so, then ASTRA, after notifying VIVUS in writing and obtaining
VIVUS consent, which shall not be unreasonably withheld, shall be entitled to
bring such infringement action at its own expense and to include VIVUS as a
nominal party plaintiff. VIVUS shall keep ASTRA reasonably informed of its
activities during the [*] period. The party conducting such action shall have
full control over its conduct, including settlement thereof subject to Section
8.6. In any event, VIVUS and ASTRA shall assist one another and cooperate in any
such litigation at the other's reasonable request without expense to the
requesting party.

8.5 Recovery. VIVUS and ASTRA shall recover their respective actual
out-of-pocket expenses, or equitable proportions thereof, associated with any
litigation against infringers undertaken pursuant to Section 8.4 above or
settlement thereof from any resulting recovery made by any party. Any excess
amount of such a recovery shall be shared between ASTRA and VIVUS, with ASTRA

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receiving [*] and VIVUS receiving [*] of such excess to the extent such recovery
represents damages relative to sales in the TERRITORY within the Field.

8.6 Status of Activities. The parties shall keep one another informed
of the status of their respective activities regarding any litigation or
settlement thereof concerning PRODUCT within the TERRITORY, provided however
that no settlement or consent judgment or other voluntary final disposition of
any suit defended or action brought by a party pursuant to this Section 8 may be
entered into without the consent of the other party if such settlement would
require the other party to be subject to an injunction or to make a monetary
payment or would otherwise adversely affect the other party's rights under this
AGREEMENT.

9. TRADEMARKS

9.1 Display. All packaging materials, labels and promotional materials
for the PRODUCT shall display the VIVUS TRADEMARK or the VIVUS ALTERNATE
TRADEMARK. In addition, such materials and labels shall display the trade names
of both VIVUS and ASTRA in equal size and prominence as nearly as allowed by
local regulations. The ASTRA trademarks, trade dress, style of packaging and the
like with respect to each PRODUCT may be determined by ASTRA so as to be
consistent with ASTRA's standard trade dress and style, but shall be subject to
the approval by VIVUS, which shall not be unreasonably withheld, so as to as far
as reasonable be consistent with VIVUS' worldwide branding strategy for the
PRODUCTS.

9.2 License. VIVUS hereby grants to ASTRA an exclusive, royalty-free
license, to use the VIVUS TRADEMARK, or the VIVUS ALTERNATIVE TRADEMARK if VIVUS
elects not to utilize the VIVUS TRADEMARK in a particular country, in each
country of the TERRITORY for the term of this AGREEMENT in connection with the
marketing and promotion of PRODUCT as contemplated in this AGREEMENT, subject to
VIVUS' copromotion right. The ownership and all goodwill from the use of the
VIVUS TRADEMARK and the VIVUS ALTERNATIVE TRADEMARK shall vest in and inure to
the benefit of VIVUS.

9.3 Registration. VIVUS agrees to file, register and maintain a
registration for the VIVUS TRADEMARK in such countries of the TERRITORY as
appropriate in VIVUS' discretion, for the term of this AGREEMENT, at VIVUS'
expense, for use with the PRODUCT. In those countries of the TERRITORY where the
VIVUS TRADEMARK is not selected by VIVUS for use

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<PAGE> 28

and registration in connection with the PRODUCT, VIVUS will provide a VIVUS
ALTERNATIVE TRADEMARK; and VIVUS will develop, file, register and maintain the
VIVUS ALTERNATIVE TRADEMARK as provided above at VIVUS' sole expense.

9.4 Recordation. In those countries where a trademark license must be
recorded, VIVUS will provide and record a separate trademark license for the
VIVUS TRADEMARK and/or VIVUS ALTERNATIVE TRADEMARK, at VIVUS' sole expense.
ASTRA shall cooperate in the preparation and execution of such documents.

9.5 Approval of Promotional Materials. ASTRA shall submit
representative promotional materials, packaging, and PRODUCT using the VIVUS
TRADEMARK and/or VIVUS ALTERNATIVE TRADEMARK to VIVUS for VIVUS' reasonable
approval prior to their first use and prior to any subsequent change or addition
to such promotional materials provided that if VIVUS has not responded within
four (4) weeks after such submissions, VIVUS' approval will be deemed to have
been received.

9.6 Termination. ASTRA's right to use the VIVUS TRADEMARK and the VIVUS
ALTERNATIVE TRADEMARK shall terminate in each country of the TERRITORY in which
ASTRA's rights to distribute the PRODUCT are terminated in accordance with this
AGREEMENT. ASTRA shall cooperate in the cancellation of any trademark licenses
recorded or entered into in such countries.

10. TERM AND TERMINATION

10.1 Expiration. Unless otherwise terminated, this AGREEMENT shall
expire on the date ten (10) years after the date of first MAA APPROVAL for the
first PRODUCT in the first MAJOR COUNTRY. This AGREEMENT may be extended by
mutual written consent.

10.2 Default - Events of Termination. If any of the following events
shall occur and be continuing, such event shall constitute an event of
termination (an "Event of Termination"):

10.2.1 Payment Obligation. If a party shall fail to pay any
amount due as provided herein within ten (10) days following receipt of written
notice of such default by the other party, provided, however, that the party
making payment may do so under protest, reserving to itself all rights to seek
appropriate reimbursement of such payment pursuant to the arbitration provisions
of Section 14.2;

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<PAGE> 29

10.2.2 Bankruptcy Proceedings. Because each party acknowledges
that the services to be rendered by the other are personal in nature, inasmuch
as the respective capabilities of the parties hereto are uniquely valuable and
that the determination to enter into this AGREEMENT was based upon the unique
ability of the other party to fulfil its respective obligations hereunder, if
(i) such party shall make an assignment of substantially all of its assets for
the benefit of creditors, file a petition in bankruptcy, petition or apply to
any tribunal for the appointment of a custodian, receiver or any trustee for
such party or substantially all of such party's assets, or shall commence any
proceeding under any bankruptcy, reorganization in bankruptcy or the equivalent,
dissolution or liquidation law or statute of any jurisdiction (provided that no
entity succeeds to the business of such party following such dissolution or
liquidation) whether now or hereafter in effect; and (ii) there shall have been
filed any such petition or application against such party, or any such
proceeding shall have been commenced against such party, in which an order for
relief is entered or which remains undismissed for a period of ninety (90) days
or more; or (iii) such party by an act or knowing failure to act shall indicate
such party's consent to, approval of or acquiescence in, any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or any trustee for such party, or any substantial part of any of such
party's properties, or shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of ninety (90) days or more.
Any occurrence described in (i), (ii) or (iii) above with respect to VIVUS INC.
shall be deemed to also be such an occurrence with respect to VIVUS, and
therefore an Event of Termination.

10.3 Termination by Non-Defaulting Party. Upon the occurrence of any
Event of Termination, beyond any applicable cure or notice period set forth in
this Article 10, the party not responsible for such Event of Termination may, by
written notice to the defaulting party, terminate this AGREEMENT.

10.4 Material Non-Performance/Misrepresentation. Other than an Event of
Termination pursuant to Section 10.2 for which the non-defaulting party may seek
termination of this AGREEMENT pursuant to Section 10.3 hereof, (i) a party's
default in any other material respect in the performance or observance of any
other material term, covenant or provision of this AGREEMENT, or (ii) if any
representation by a party contained in this AGREEMENT shall prove to have been
incorrect in any material respect when made, resulting in material adverse
consequences for the other party (any such default or material incorrect
representation a "Material Non-Performance"),

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<PAGE> 30

such Material Non-Performance shall be remedied only as provided in Section 10.6
hereof, and shall not be deemed an Event of Termination permitting the
non-defaulting party to terminate this AGREEMENT pursuant to Section 10.3
hereof.

10.5 Termination by ASTRA. ASTRA may terminate this AGREEMENT on [*]

10.6 Material Non-Performance - Resolution/Arbitration. In the event of
any Material Non-Performance by a party, the other party shall, without
reasonable delay following discovery of such Material Non-Performance notify the
defaulting party in writing, and the parties shall consult with each other in
good faith to endeavor to agree upon the most effective means to cure such
Material Non-Performance and, if necessary, to effect a remedy in favor of the
non-defaulting party for the consequences of such Material Non-Performance by
the defaulting party (collectively, the "Resolution"). In the event (i) the
parties are unable to agree upon Resolution, or (ii) the defaulting party, in
the exercise of reasonable diligence shall have been unable to remedy such
Material NonPerformance, then in either such event the parties agree that the
remedy of the non-defaulting party with respect to the Material Non-Performance
by the defaulting party shall be determined by arbitration pursuant to Section
14.2 hereof, and the arbitrators shall be authorized to fashion such remedy,
including equitable relief, which may include termination of this AGREEMENT in
whole or in part, as the arbitrators shall determine appropriate, except that
termination of this AGREEMENT in whole shall only be the remedy of last resort.

11. [*]
11.1 [*]
11.2 [*]

12. RIGHTS AND DUTIES UPON TERMINATION

12.1 Payment. Upon termination of this AGREEMENT, VIVUS shall have the
right to retain any sums already paid by ASTRA hereunder, and ASTRA and VIVUS
shall each pay all sums accrued hereunder which are then due.

12.2 Sale of Remaining Inventory. Upon termination of this AGREEMENT,
ASTRA shall notify VIVUS of the amount of PRODUCT ASTRA, its AFFILIATES and its
subdistributors then have on hand. ASTRA, its AFFILIATES and its subdistributors
shall thereupon be permitted to sell

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<PAGE> 31

that amount of PRODUCT, within the ninety (90) day period following such
termination, subject to the reconciliation under Section 3.6 and shall destroy
any remaining inventory. Units that are so destroyed shall be treated as SAMPLES
for purposes of Section 3.2 above.

12.3 [*]

12.4 Survival. Upon expiration or termination of this AGREEMENT, all
rights and obligations of the parties under this AGREEMENT shall terminate
except those described in the following Sections:

Section 1, Definitions
Section 3.4, Sales
Last Sentence of Section 4.3.1, MAA's Section 7, Exchange of
Information and Confidentiality Section 8.1, Ownership of Inventions
Section 8.3, Infringement by Product Section 9.6, Termination Section
10 Term and Termination Section 12, Rights and Duties Upon Termination
Section 14, General Provisions

In addition, in the event of termination of this AGREEMENT by ASTRA pursuant to
Section 10.2.2 and 10.3, the following additional Sections shall survive for so
long as any of the VIVUS SUBLICENSES remain in full force and effect:

Section 2.2, No Conflict
Section 2.3, Sales Outside Territory
Section 3, Payment
Section 5.1, Diligence
[*]
Section 8.2, Maintenance of Patents
Section 9.2, License

Further, Section 11 shall survive expiration but not an earlier termination of
this AGREEMENT. It is understood that termination or expiration of this
AGREEMENT shall not relieve a party from any liability which, at the time of
such termination or expiration, has already accrued to the other party or which
is attributable to a period prior to such termination. Termination or expiration
of the AGREEMENT in accordance with the provisions hereof shall not limit
remedies which may be otherwise available in law or equity with respect to a
breach hereof that occurred prior to such termination.

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<PAGE> 32

13. WARRANTIES, REPRESENTATIONS, AND INDEMNIFICATIONS

13.1 General Representations. Each party hereby represents and warrants
for itself as follows:

13.1.1 Duly Organized. It is a corporation duly organized,
validly existing and is in good standing under the laws of the jurisdiction of
its incorporation, is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the conduct of its business or
the ownership of its properties requires such qualification and failure to have
such would prevent it from performing its obligations under this AGREEMENT and
has all requisite corporate power and authority to conduct its business as now
being conducted, to own, lease and operate its properties and to execute,
deliver and perform this AGREEMENT.

13.1.2 Due Execution. The execution, delivery and performance
by it of this AGREEMENT have been duly authorized by all necessary corporate
action and do not and will not (i) require any consent or approval of its
stockholders, (ii) violate any provision of any law, rule, regulation, order,
writ, judgement, injunction, decree, determination or award presently in effect
having applicability to it or any provision of its charter or by-laws or (iii)
result in a breach of or constitute a default under any material agreement,
mortgage, lease, license (including any license from a third party which is
necessary for the full performance of this AGREEMENT), permit or other
instrument or obligation to which it is a party or by which it or its properties
may be bound or affected.

13.1.3 No Third Party Approval. No authorization, consent,
approval, license, exemption of, or filing or registration with, any court or
governmental authority or regulatory body (other than health regulatory
authorities) is required for the due execution, delivery or performance by it of
this AGREEMENT, except as provided herein.

13.1.4 Binding AGREEMENT. This AGREEMENT is a legal, valid and
binding obligation of such party, enforceable against it in accordance with its
terms and conditions. It is not under any obligation to any person, contractual
or otherwise, that is in conflict with the terms of this AGREEMENT.

13.1.5 Full Disclosure. Each Party has disclosed to the other
in good faith all material information relevant to the subject matter of this
AGREEMENT and to such party's ability to observe and perform its obligations
hereunder. VIVUS further warrants that it has disclosed to ASTRA all

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<PAGE> 33

material information of which it is aware necessary or appropriate to evaluate
the PATENTS, the THIRD PARTY LICENSES for such PATENTS, the safety and efficacy
of the PRODUCT, and the estimated VIVUS COST OF GOODS and manufacturing capacity
for the PRODUCTS. Such disclosure includes information contained in publicly
available filings with the Securities & Exchange Commission.

13.2 Covenants, Representations and Warranties of VIVUS as to
Manufacture and Supply of Product. VIVUS covenants, represents and warrants to
ASTRA that:

13.2.1 Agreements. The only agreements in existence as of the
Effective Date under which VIVUS INC. has acquired rights to PATENTS are listed
in Exhibit F. All rights with respect to PATENTS referenced in Exhibit F as
patents for which "Place" or "Place et al" are listed as inventor are either
included in the license from Alza or have otherwise been transferred to VIVUS
and are owned by VIVUS. The "VOSS PATENTS", that is collectively the PATENTS,
rights and technology granted to (i) Ortho Pharmaceutical Corporation by Gene A.
Voss and Alan C. Eichler dated January 4, 1991, and assigned to VIVUS INC. by
Assignment from Ortho Pharmaceutical Corporation dated January 9, 1992, and (ii)
VIVUS INC. by Gene A. Voss and Alan C. Eichler dated December 28, 1992, (x) are
not necessary to use, manufacture, have manufactured, sell, or have sold PRODUCT
in the TERRITORY, and (y) ASTRA's use, manufacture, have manufactured, use, sale
and have sold PRODUCT in the TERRITORY will not infringe the VOSS PATENTS. The
THIRD PARTY LICENSES listed in Exhibit F, all right, title and interest of VIVUS
in which, with respect to the TERRITORY, have been assigned to VIVUS by VIVUS
INC., pursuant to an Assignment Agreement dated as of June 1, 1995. To the best
of knowledge of VIVUS as of the Effective Date, and other than as set forth
above with respect to the VOSS PATENTS, the VIVUS LICENSE and THIRD PARTY
LICENSE(S) are the only patents, knowhow and technology necessary to make, have
made, use and sell PRODUCT.

13.2.2 VIVUS Obligations. VIVUS covenants, represents and
warrants to ASTRA with respect to the THIRD PARTY LICENSES that (i) VIVUS and
VIVUS INC. will fully comply with all of VIVUS INC.'s covenants and obligations
thereunder, to the extent material to ASTRA'S rights under this AGREEMENT, (ii)
the THIRD PARTY LICENSES are in full force and effect, not having been amended,
other than as set forth in Exhibit 6.1.10 hereto, (iii) VIVUS and VIVUS INC.
have received no oral or written notification of any alleged breach or default
by VIVUS or VIVUS

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<PAGE> 34

INC., (iv) VIVUS and VIVUS INC. are not aware of any breach or default thereof
by any THIRD PARTY, (v) VIVUS has the full right and authority to sublicense
VIVUS' and VIVUS INC.'s rights to ASTRA pursuant to the VIVUS SUBLICENSES, and
(vi) VIVUS and VIVUS INC. will not terminate, or otherwise amend the THIRD PARTY
LICENSES, in any manner which would materially adversely affect the ASTRA
License.

13.2.3 Specifications and Manufacturing Standards. All
quantities of PRODUCT will comply with (i) all specifications of PRODUCT in the
MAA approved by the regulatory authorities in the respective country of the
TERRITORY, (ii) all specifications agreed upon by the parties and attached as
Exhibit G hereto and (iii) all Manufacturing Standards, as defined in Section
13.2.5 (collectively, the "Specifications and Manufacturing Standards"). VIVUS
shall only release PRODUCT for shipment to ASTRA which comply with the
Specifications and Manufacturing Standards. ASTRA shall, promptly upon receipt
of each shipment perform customary inspection. Any claim regarding the failure
of such shipment to conform to the Specifications and Manufacturing Standards
shall be submitted to VIVUS upon discovery. In the event that ASTRA and VIVUS
agree (or three is an independent finding) that any quantity of PRODUCT fails to
comply with such Specifications and Manufacturing Standards, VIVUS shall, at
VIVUS' own cost (including freight and insurance) deliver replacement quantities
of such PRODUCT to ASTRA as soon as possible. The parties shall at an
appropriate time before commencement of deliveries of PRODUCT to ASTRA conclude
a separate agreement in a format suitable for submittance to the regulatory
authorities in all countries of the TERRITORY, recording the agreed-upon
Specifications and Manufacturing Standards and measures to assure compliance
with GMP regulations regarding production, storage, transportation and release
of PRODUCT.

13.2.4 Quality of Starting Materials and Packing Materials.
All starting materials and packaging materials used in the manufacture of each
PRODUCT shall comply with the applicable Specifications and Manufacturing
Standards.

13.2.5 Good Manufacturing GMP Standards/Regulatory Standards.
All manufacturing and quality control operations utilized by VIVUS in the
manufacture of PRODUCT shall be carried out according to the procedures and
requirements set forth in the then-current version of the VIVUS Plant Master
File with respect to such PRODUCT, and (as to each PRODUCT) in accordance with
all applicable U.S. rules governing medical products and or devices in the Good

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Manufacturing Practice for Medical Products and/or devices and regulations
issued by the health regulatory authorities in the countries of the TERRITORY
for which such PRODUCT is to be sold as in effect at the time and the applicable
standards in effect at the time (collectively, the "Manufacturing Standards").

13.2.6 Documentation. VIVUS shall keep and maintain for the
approved shelf life of a PRODUCT plus two (2) years (i) reference samples and
quality control records for each batch of starting materials and packaging
material used in the manufacture of the PRODUCT and (ii) manufacturing and
quality control records for each batch of the PRODUCT. Each shipment of PRODUCT
shall be accompanied by the following written documentation: (i) the date of
manufacture, (ii) delivered amount of PRODUCT units, (iii) a certificate of
analysis setting forth the results of tests performed by VIVUS as reasonably
required by ASTRA in accordance with the Specifications and Manufacturing
Standards.

13.2.7 ASTRA Right of Inspection. VIVUS shall, upon written
request of ASTRA, permit ASTRA's authorized representative to inspect (and if
reasonably necessary to copy) the following: (i) all manufacturing and quality
control records for all manufacture of the PRODUCT and (ii) quality control
records of all starting materials used in the manufacture of a PRODUCT.

13.2.8 Quality Audit. ASTRA shall be entitled during normal
working hours and upon reasonable prior notice to VIVUS to inspect all VIVUS
facilities utilized for the manufacture, storage or quality control of the
starting materials or PRODUCT or such facilities of any third party manufacturer
or quality control operations engaged by VIVUS. VIVUS shall promptly inform
ASTRA in writing of the results of any inspection by relevant authorities of
manufacturing or quality control facilities of VIVUS or of any third party
manufacturer.

13.3 Indemnification by ASTRA. ASTRA shall defend, indemnify and hold
harmless VIVUS, its officers, directors, shareholders, employees, successors and
assigns from any loss, damage, or liability, including reasonable attorney's
fees, resulting from any claim, complaint, suit, proceeding or cause of action
against any of them alleging physical injury or death or otherwise arising out
of the administration, utilization and/or ingestion of PRODUCT or manufactured,
sold or otherwise provided to the injured party by ASTRA (or its AFFILIATE or
permitted subdistributor or contractor); or otherwise with respect to PRODUCT
supplied to, or sold or distributed by, ASTRA (or its AFFILIATE or permitted
subdistributor or contractor), provided:

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13.3.1 ASTRA shall not be obligated under this Section if it
is shown by evidence acceptable in a court of law having jurisdiction over the
subject matter and meeting the appropriate degree of proof for such action, that
the injury was the result of (a) the gross negligence or willful misconduct of
any employee or agent of VIVUS or (b) the supply by VIVUS of PRODUCT that fails
to meet applicable Specifications;

13.3.2 ASTRA shall have no obligation under this Section
unless VIVUS (i) gives ASTRA prompt written notice of any claim or lawsuit or
other action for which it seeks to be indemnified under this AGREEMENT, (ii)
ASTRA is granted full authority and control over the defense, including
settlement, against such claim or lawsuit or other action, and (iii) VIVUS
cooperates fully with ASTRA and its agents in defense of the claims or lawsuit
or other action; and

13.3.3 VIVUS shall have the right to participate in the
defense of any such claim, complaint, suit, proceeding or cause of action
referred to in this Section utilizing attorneys of its choice, at its own
expense, provided, however, that ASTRA shall have full authority and control to
handle any such claim, complaint, suit, proceeding or cause of action, including
any settlement or other disposition thereof, for which VIVUS seeks
indemnification under this Section.

13.4 Indemnification by VIVUS. VIVUS shall defend, indemnify and hold
harmless ASTRA, its officers, directors, shareholders, employees, successors and
assigns from any loss, damage, or liability, including reasonable attorney's
fees, resulting from any claim, complaint, suit, proceeding or cause of action
by a THIRD PARTY against any of them alleging physical injury or death or
otherwise arising out of (a) the administration, utilization and/or ingestion of
PRODUCT, sold or otherwise provided to the injured party by VIVUS (or its
permitted subdistributor or contractor) outside the TERRITORY or (b) the supply
by VIVUS of PRODUCT that fails to meet applicable Specifications and
Manufacturing Standards, provided:

13.4.1 VIVUS shall not be obligated under this Section if it
is shown by evidence acceptable in a court of law having jurisdiction over the
subject matter and meeting the appropriate degree of proof for such action, that
the injury was the result of the gross negligence or willful misconduct of any
employee or agent of ASTRA;

13.4.2 VIVUS shall have no obligation under this Section
unless ASTRA (i) gives VIVUS prompt written notice of any claim or lawsuit or
other action for which it seeks to be indemnified under this AGREEMENT, (ii)
VIVUS is granted full authority and control over the

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defense, including settlement, against such claim or lawsuit or other action,
and (iii) ASTRA cooperates fully with VIVUS and its agents in defense of the
claims or lawsuit or other action; and

13.4.3 ASTRA shall have the right to participate in the
defense of any such claim, complaint, suit, proceeding or cause of action
referred to in this Section utilizing attorneys of its choice, at its own
expense, provided, however, that VIVUS shall have full authority and control to
handle any such claim, complaint, suit, proceeding or cause of action, including
any settlement or other disposition thereof, for which ASTRA seeks
indemnification under this Section.

14. GENERAL PROVISIONS

14.1 Force Majeure. If the performance of any part of this AGREEMENT by
either party is prevented, restricted, interfered with or delayed by reason of
any cause beyond the reasonable control of such party, the party so affected
shall, upon giving written notice to the other party, be excused from such
performance to the extent of such prevention, restriction, interference or
delay, provided that the affected party shall use its reasonable efforts to
avoid or remove such causes of non-performance and shall continue performance
with the utmost dispatch whenever such causes are removed. When such
circumstances arise, the parties shall discuss what, if any, modification of the
terms of this AGREEMENT may be required in order to arrive at an equitable
solution.

14.2 Governing Law and Arbitration. This AGREEMENT shall be governed by
the laws of the State of New York without reference to conflict of law
principles. Except as provided in Section 11.2 above, in the event of any
dispute under this AGREEMENT, whether as to validity, construction,
enforceability or performance of this AGREEMENT or any of its provisions or
otherwise, both parties shall endeavor to settle such dispute amicably between
themselves. In the event that the parties fail to agree, such dispute shall be
settled by arbitration as follows: Either party may by notice in writing to the
other require any issue in dispute to be submitted to arbitration in accordance
with this Section 14.2. Such notice shall contain a statement of the arbitrable
issue forming the basis of the dispute and the position of the moving party as
to the proper resolution of that issue. Within thirty (30) days after receipt of
such notice, the responding party shall submit to the moving party a statement
of its conception of the arbitrable issue in question and of its position as to
the proper resolution of that issue. Within forty-five (45) days of the
responding party's response, each party shall appoint an arbitrator and give the
other party written notice thereof. In the event a

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party shall fail to appoint an arbitrator and provide written notice thereof to
the other party within such forty-five (45) day period, an arbitrator shall be
appointed for such party by the American Arbitration Association in New York, as
promptly as practicable after request by the other party. Thereafter, the two
(2) appointed arbitrators shall select a third arbitrator within thirty (30)
days after receipt of a list of proposed arbitrators having expertise in the
pharmaceutical industry proposed by the American Arbitration Association. If the
two (2) arbitrators designated by the parties are unable to agreed on the third
arbitrator within thirty (30) days, then either party with notice to the other
party, may call for such appointment by the American Arbitration Association of
the third arbitrator. Regardless of the manner of his or her selection, the
third arbitrator shall be one who is qualified by knowledge and experience in
the pharmaceutical field. Each arbitrator shall agree prior to his or her
appointment to hear the dispute promptly and render a decision as soon as
practicable thereafter. The arbitration shall be conducted in English in New
York, in accordance with the commercial arbitration rules or successor rules
then obtaining of the American Arbitration Association to the extent not
inconsistent with this Article 14.2. The arbitrators shall not amend this
AGREEMENT, but shall seek to fashion a remedy consistent with the parties'
intentions set forth in Section 10.6 hereof. The agreement of two (2) of the
three (3) arbitrators shall be sufficient to render a decision. The decision of
the panel shall be final and binding upon the parties and enforcement thereof
may be obtained in any court of competent jurisdiction. The arbitrators may
award costs and expenses, including reasonable attorneys' fees, to the
successful party, as the arbitrators deem appropriate.

14.3 Waiver of Breach. The failure of either party at any time or times
to require performance of any provision hereof shall in no manner affect its
rights at a later time to enforce the same. No waiver by either party of any
condition or term in any one or more instances shall be construed as a further
or continuing waiver of such condition or term or of another condition or term.

14.4 Separability. In the event any portion of this AGREEMENT shall be
held illegal, void or ineffective, the remaining portions hereof shall remain in
full force and effect and the parties will renegotiate the terms and conditions
of this AGREEMENT to resolve any inequities.

14.5 Entire Agreement. This AGREEMENT, entered into as of the date
written above, and the information delivered by each party to the other pursuant
to Section 13.1.5 for the purposes described therein constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all previous writings and understandings. No terms or provisions of
this

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AGREEMENT shall be varied or modified by any prior or subsequent statement,
conduct or act of either of the parties, except that the parties may amend this
AGREEMENT by written instruments specifically referring to and executed in the
same manner as this AGREEMENT.

14.6 Notices. Any notice required or permitted under this AGREEMENT
shall be sent by air mail, postage pre-paid, to the following addresses of the
parties:

ASTRA
Astra AB
S-151 85 Sodertalje
Sweden
Attn: Legal Department

VIVUS
VIVUS International Limited
c/o VIVUS, Inc.
545 Middlefield Road, Suite 200
Menlo Park, California 94025
Attention: President

copies to:

Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attention: Kenneth A. Clark

Any notice required or permitted to be given concerning this AGREEMENT
shall be effective upon receipt by the party to whom it is addressed or within
seven (7) days of dispatch whichever is earlier.

14.7 Assignment. This AGREEMENT and the distribution right and licenses
herein granted shall be binding upon and inure to the benefit of the successors
in interest of the respective parties provided, however, neither this AGREEMENT
nor any interest hereunder shall be assignable by either party without the
written consent of the other except that either party may assign this AGREEMENT
and its rights and obligations hereunder to any corporation with which it may
merge or consolidate, or to which it may transfer all or substantially all of
its assets to which this AGREEMENT relates, without obtaining the consent of the
other party; provided that the entity to whom this AGREEMENT is assigned agrees
to be bound by its terms.

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14.8 No Partnership or Joint Venture. This AGREEMENT shall not be
deemed to establish a joint venture or partnership between ASTRA and VIVUS.

14.9 Third Party Rights. The obligations of VIVUS and the rights of
ASTRA under this AGREEMENT shall be subject to and limited by any agreements
pursuant to which VIVUS acquired rights to PATENTS from a third party.

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<PAGE> 41

14.10 Execution in Counterparts. This AGREEMENT may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

ASTRA A.B. (publ)

BY: /s/ Hakan Mogren

TITLE: President & Chief Executive Officer

VIVUS INTERNATIONAL LIMITED

BY: /s/ Leland F. Wilson

TITLE: President

GUARANTY OF PERFORMANCE

In order to induce ASTRA to enter into the foregoing AGREEMENT, VIVUS, INC.
(the "GUARANTOR"), a corporation organized under the laws of the State of
California and having a principal place of business at 545 Middlefield Road,
Suite 200, Menlo Park, California 94025, and being the sole shareholder of
VIVUS, hereby irrevocably and conditionally guaranties any and all obligations
(including, without limitation, payment obligations) of VIVUS to ASTRA, whether
or not existing or hereinafter arising pursuant to the foregoing AGREEMENT
(including, without limitation all agreements, grants, undertakings, licenses
and sublicenses now or hereafter entered into pursuant to the AGREEMENT
(collectively the "VIVUS UNDERTAKINGS") or as such VIVUS UNDERTAKINGS may be
hereinafter amended or modified (with or without notice to or assent of
Guarantor).

Guarantor further agrees that the VIVUS UNDERTAKINGS may be extended,
renewed, modified, amended or compromised in any way, with or without notice or
consent of GUARANTOR.

Notice of acceptance of the Guaranty and of the incurring of any obligation
or any default of the VIVUS UNDERTAKINGS, as well as demand and protest with
respect to such VIVUS UNDERTAKINGS, are hereby waived by GUARANTOR.

-36-
<PAGE> 42

This Guaranty shall be an irrevocable, continuing, absolute and
unconditional guaranty of payment and performance by VIVUS pursuant to the VIVUS
UNDERTAKINGS.

Guarantor represents, covenants and warrants to ASTRA as follows, upon
which ASTRA relies in acceptance of this Guaranty: that (i) GUARANTOR is the
sole shareholder of all of issued and outstanding capital stock of VIVUS, (ii)
GUARANTOR will benefit from the AGREEMENT between VIVUS and ASTRA, (iii)
GUARANTOR has received good and valuable consideration for its execution,
delivery and performance of this Guaranty, and (iv) GUARANTOR has executed and
delivered this Guaranty to ASTRA.

Notice to GUARANTOR shall be given pursuant to the provisions of Section
14.6 of the AGREEMENT.

This Guaranty shall be governed by and construed in accordance with the
laws of the State of New York and shall take effect as an instrument under seal.
If after it has been conclusively determined that VIVUS has failed to perform
under this AGREEMENT, an action to enforce this Guaranty is undertaken, the
party prevailing in such enforcement action shall be entitled to recover its
reasonable out-of-pocket expenses (including fees of outside counsel) with
respect to such action.

In the event of any dispute under this Guaranty, whether as to validity,
construction, enforceability or performance of this Guaranty or any of its
provisions or otherwise, such dispute shall be settled in accordance with
Section 14.2 above, which is incorporated herein by reference, substituting
"VIVUS INC." for "VIVUS" in such section for purposes of this Guaranty.

IN WITNESS WHEREOF, the foregoing Guaranty has been executed under seal as
of this 29th day of May, 1996.

VIVUS, INC.

By: /s/ Leland F. Wilson
Leland Wilson
Its President
hereunto duly authorized

-37-
<PAGE> 43

EXHIBIT A

PATENTS

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Expiration
Inventor Country Pat. No. Title of Patent Date Comments
- -------- ------- -------- --------------- ---------- --------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Voss et United States 4,801,587 Impotence Ointment 1/31/2007 [*]
al.
- --------------------------------------------------------------------------------------------------------------
" Canada 1,320,442 " 2/17/2008 [*]
- --------------------------------------------------------------------------------------------------------------
Place et United States 5,242,391 Urethral Insert for 9/7/2010 [*]
al. Treatment of Erectile
Dysfunction
- --------------------------------------------------------------------------------------------------------------
" United States 5,474,535 Dosage and Inserter for 12/12/2012 [*]
Treatment of Erectile
Dysfunction
- --------------------------------------------------------------------------------------------------------------
" Australia 655420 Treatment of Erectile 4/22/2011 [*]
Dysfunction
- --------------------------------------------------------------------------------------------------------------
Place et South Africa 91/2984 Treatment of Erectile 4/22/2011 [*]
al. Dysfunction
- --------------------------------------------------------------------------------------------------------------
Place United States USPN Process for Diagnosing 1/09/2013
5,482,039 Erectile Dysfunction
and Related Methods
of Treatment.
- --------------------------------------------------------------------------------------------------------------
Kock et Europe Composition for the 9/1/2009 [*]
al. Austria 0432199 Treatment of Erectile
Belgium 0432199 Dysfunction
France "
Germany 68907909
Great Britain 0432198
Greece 3008867
Italy 0432199
Luxembourg "
Netherlands "
Spain 0357581
Sweden 0432199
- --------------------------------------------------------------------------------------------------------------
" Australia 638414 Composition for the 9/1/2009 [*]
Treatment of Erectile
Dysfunction
- --------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE> 44

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Inventor Country Pat. No. Title of Patent Expiration Comments
- -------- ------- -------- --------------- ---------- --------
Date
----
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
" Canada 1,335,346 A New Method of 4/25/2012 [*]
Treating Erectile
Dysfunction
- --------------------------------------------------------------------------------------------------------------
Kock et Ireland 62587 A New Method of 8/31/2009 [*]
al. Treating Erectile
Dysfunction
- --------------------------------------------------------------------------------------------------------------
" New Zealand 230400 " 8/22/2005
- --------------------------------------------------------------------------------------------------------------
" South Africa 89/6681 " 8/31/2009
- --------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE> 45

EXHIBIT A (CONT.)

PATENT APPLICATIONS

[*]

<PAGE> 46

EXHIBIT B

CENTRAL AND SOUTH AMERICA

Belize
Guatemala
Honduras
El Salvador
Nicaragua
Costa Rica
Panama
Ecuador
Columbia
Peru
Venezuela
Brazil
Bolivia
Chile
Argentina
Uruguay
Paraguay
Guyana
Suriname
French Guiana

<PAGE> 47

EXHIBIT C

[*]

<PAGE> 48

EXHIBIT D

[*]

<PAGE> 49

EXHIBIT E

[*]

<PAGE> 50

EXHIBIT F

LICENSE AGREEMENTS

1. Assignment Agreement between VIVUS, Inc. and ALZA Corporation dated December
31, 1993

2. Assignment between Ortho Pharmaceutical Corporation ("Ortho") and VIVUS, Inc.
dated June 9, 1992 (assigning to VIVUS Ortho's rights under three license
agreements between Ortho and:

(a) Amsu Ltd. dated June 23, 1989
(b) Kjell Holmquist AB dated June 26, 1989
(c) Gene A. Voss and Allen C. Eichler dated January 4, 1991)

3. License Agreement between VIVUS, Inc. and Gene A. Voss and Allen C. Eichler,
dated December 28, 1992 (amending and restating VIVUS' rights under the license
agreement between Ortho and Voss and Eichler assigned to VIVUS from Ortho)

4. Amendment between VIVUS, Inc. and AMSU, LTD. dated April 22, 1992 (amending
the license agreement between Ortho and Amsu assigned to VIVUS from Ortho)

5. Amendment between VIVUS, Inc. and AMSU, LTD. dated July 3, 1992 (amending the
license agreement between Ortho and Amsu assigned to VIVUS from Ortho)

6. Amendment between VIVUS, Inc. and Kjell Holmquist AB dated April 22, 1992
(amending the license agreement between Ortho and Amsu assigned to VIVUS from
Ortho)

7. Amendment between VIVUS, Inc. and Kjell Holmquist AB dated July 3, 1992
(amending the license agreement between Ortho and Amsu assigned to VIVUS from
Ortho)

<PAGE> 51

EXHIBIT G

SPECIFICATIONS

The following release specifications are subject to regulatory review and
approval in the TERRITORY. They will be modified as required by regulatory
authorities, and all product delivered to ASTRA must comply with such modified
specifications. Release Specifications

[*]