Exhibit 10.7

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “ Agreement ”) dated as of April 3, 2008, is made by and between VIVUS, INC. , a Delaware corporation (the “ Debtor ”), DEERFIELD ED CORPORATION , a Delaware corporation (“ ED ”), and the entities listed on Exhibit 1 hereto (each a “ Stockholder ,” together the “ Stockholders ” and together with ED the “ Secured Parties ”).

WHEREAS , the Debtor and the Secured Parties have entered into that certain Option and Put Agreement dated as of April 3, 2008 (the “ Option and Put Agreement ”) pursuant to which the Secured Parties have granted the Debtor an option to purchase from the Stockholders all of the outstanding shares of common stock of ED and the Debtor has agreed to grant to the Stockholders an option to require the Debtor to purchase from the Stockholders all of the outstanding shares of common stock of ED, all upon the terms and conditions set forth therein;

WHEREAS , the Debtor and ED have entered into that certain Funding and Royalty Agreement dated as of April 3, 2008 (the “ Royalty Agreement ”) pursuant to which ED has agreed to provide funds to the Debtor in consideration of the payment by the Debtor of a royalty on future sales of certain pharmaceutical products specified therein;

WHEREAS , it is a condition precedent to the Secured Parties’ execution of the Option and Put Agreement that the Debtor execute and deliver to the Secured Parties a security agreement in substantially the form hereof;

WHEREAS , the Debtor wishes to grant a security interest in favor of the Secured Parties on the terms and subject to the conditions set forth herein; and

WHEREAS , the Debtor intends to enter into a separate Security Agreement (the “ Royalty Security Agreement ”) with ED, pursuant to which the Debtor will grant to ED a security interest in the same Collateral (as defined herein) as the Debtor grants a security interest to the Secured Parties pursuant to this Agreement, which security interest shall be subordinate to the security interest granted to the Secured Parties under this Agreement.

NOW, THEREFORE , in consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

1.1                                  UCC Terms .  The following terms that are defined in the Uniform Commercial Code (as hereinafter defined) are used in this Agreement as so defined (and, in the event any such term is defined differently for purposes of Article 9 of the Uniform Commercial Code than for any other purpose or purposes of the Uniform Commercial Code, the Article 9 definition shall govern):  Account, Documents, Equipment, Inventory, Proceeds and Records.

1.2                                  Royalty Agreement Terms .  All other capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Royalty Agreement.

1.3                                  Other Defined Terms .  In addition, the following terms shall have the meanings set forth below:

“ Collateral ” means and includes the Registrations, the Intellectual Property and all of the Accounts, Equipment and Inventory arising out of or relating specifically to the Royalty Products, wherever located, of the Debtor now or hereafter held or received by, in transit to, or in the possession or control of the Debtor or ED, and any substitutions or replacements thereof and any products and proceeds thereof, including without limitation, insurance proceeds.  Equipment of which Debtor makes significant use for purposes unrelated to the Royalty Products is not Collateral.

“ Collateral Accounts ” means any Accounts comprising any or all of the Collateral.

“ Collateral Collection Accounts ” has the meaning set forth in Section 5.4 .

“ Collateral Equipment ” means Equipment comprising part of the Collateral.

“ Collateral Inventory ” means any Inventory comprising any or all of the Collateral.

“ Copyright ” means the legal right provided by the Copyright Act of 1976, as amended, to the expression contained in any work of authorship fixed in any tangible medium of expression together with any similar rights arising in any other country as a result of statute or treaty, and any right that may exist to obtain a registration with respect thereto from any Governmental Authority and any rights arising under any such application.

“ Event of Default ” shall mean any failure of the Debtor to make any payments to any of the Secured Parties when and as required pursuant to the Option and Put Agreement within fifteen (15) days after the Debtor receives written notice of such failure to pay from the Secured Parties.

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any municipal, local, city or county government, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other entity owned or controlled, through capital stock or otherwise, by any of the foregoing.

“ Intellectual Property ” means all Patents, Marks, Trade Names, Copyrights, Software, Trade Secrets, Know-How, tests, protocols, standard operating procedures, results and data owned, licensed, possessed, used or useful by the Debtor specifically relating to or necessary for the Royalty Products or the composition, manufacture, quality control, testing, packaging, storage or use of the Royalty Products.  “Intellectual Property” includes the contents of the drug master file, all adverse event reports made or received by the Debtor and all submissions made to the FDA relating to the Royalty Products.

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“ Know-How ” means ideas, designs, inventions, discoveries, concepts, compilations of information, methods, techniques, procedures and processes, whether confidential or not, whether patentable or not and whether reduced to practice or not.

“ Lien ” means any mortgage, claim, lien, security interest, pledge, escrow, charge, option, restriction or encumbrance of any kind or character whatsoever.

“ Mark ” means any word, name, symbol or device used by a Person to identify its goods or services, whether or not registered, all goodwill associated therewith, and any right that may exist to obtain a registration with respect thereto from any Governmental Authority and any rights arising under any such application.  “Mark” includes trademarks and service marks.

“ Obligations ” means all of the obligations and liabilities of the Debtor to make payments to the Secured Parties pursuant to the Option and Put Agreement.

“ Patent ” means any patent granted by the U.S. Patent and Trademark Office or by the comparable agency of any other country, and any renewal thereof, and any rights arising under any patent application filed with the U.S. Patent and Trademark Office or the comparable agency of any other country and any rights that may exist to file any such application.

“ Permitted Liens ” means (i)  Liens for current Taxes not yet delinquent or Liens for Taxes being contested in good faith and by appropriate proceedings for which adequate reserves have been made, (ii)  possessory Liens on personal property imposed by law, such as the Liens of carriers, warehousemen, mechanics, materialmen and landlords, incurred in the ordinary course for sums not constituting borrowed money, that are not overdue or which are being contested in good faith and by appropriate proceedings, (iii) the Liens granted pursuant to this Agreement (iv) Liens in favor of the Stockholders and (v) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of customs duties in connection with the importation of goods.

“ Person ” means any corporation, association, joint venture, partnership, limited liability company, organization, business, individual, trust, Governmental Authority or other legal entity.

“ Registrations ” has the meaning given such term in the Royalty Agreement.

“ Royalty Products ” has the meaning given such term in the Royalty Agreement.

“ Software ” means, with respect to a Person, all types of computer software programs owned, licensed, used or usable by such Person, including operating systems, application programs, software tools, firmware and software imbedded in equipment, including both object code and source code versions thereof.  The term “Software” also includes all written or electronic materials that explain the structure or use of the Software or that were used in the development of the Software, including logic diagrams, flow charts, procedural diagrams, error reports, manuals and training materials.

“ Trade Names ” means any words, names or symbols used by a Person to identify its business.

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“ Trade Secrets ” means the business or technical information of any Person including, but not limited to, customer lists, marketing data and Know-How that is not generally known to other Persons who are not subject to an obligation of nondisclosure and that derives actual or potential commercial value from being not generally known to other Persons.

“ Uniform Commercial Code ” means the Uniform Commercial Code as the same may be in effect from time to time in the State of Delaware; provided that if, by reason of applicable law, the validity or perfection of any security interest in any Collateral granted under this Agreement is governed by the Uniform Commercial Code as in effect in another jurisdiction, then as to the validity or perfection, as the case may be, of such security interest, “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction.

1.4                                  Construction .  Unless the context requires otherwise, words in the singular include the plural, words in the plural include the singular, and words importing any gender shall be applicable to all genders.  If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb).

ARTICLE 2

GRANT OF SECURITY INTEREST

2.1                                  Pledge and Grant of Security Interest .  The Debtor hereby pledges, assigns and delivers to the Secured Parties and grants to the Secured Parties, to secure the payment and performance in full of all of the Obligations, a lien upon and security interest in all of its right, title and interest in and to the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.

2.2                                  Security for Debtor’s Obligations .  This Agreement and the Collateral secure the full and prompt payment, at any time and from time to time as and when due (whether at the stated maturity, by acceleration or otherwise), of all of the Obligations of the Debtor.

2.3                                  Security Interests Absolute .  All rights of the Secured Parties and security interests hereunder, and all obligations of the Debtor hereunder, shall be absolute and unconditional and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

(a)                                   any extension, renewal, settlement, compromise, waiver or release in respect of any Obligation, the Option and Put Agreement or any other document evidencing or securing such Obligation, by operation of law or otherwise;

(b)                                  any modification, amendment or supplement to the Option and Put Agreement or any other document evidencing or securing any Obligation;

(c)                                   any release, non-perfection or invalidity of any direct or indirect security for any Obligation;

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(d)                                  any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Debtor or its assets or any resulting disallowance, release or discharge of all or any portion of the Obligations;

(e)                                   the existence of any claim, set-off or other right which the Secured Parties may have at any time against the Debtor or any other Person, whether in connection herewith or any unrelated transactions; provided , that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(f)                                     any invalidity or unenforceability relating to or against the Debtor for any reason of any Obligation, or any provision of applicable law or regulation purporting to prohibit the payment by the Debtor of the Obligations;

(g)                                  any failure by the Secured Parties (A) to file or enforce a claim against the Debtor (in a bankruptcy or other proceeding), (B) to give notice of the existence, creation or incurrence by the Debtor of any new or additional indebtedness or obligation under or with respect to the Obligations, (C) to commence any action against the Debtor or (D) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Obligations; or

(h)                                  any other act or omission to act or delay of any kind by the Secured Parties or the Debtor or any other corporation or Person or any other circumstance whatsoever which might, but for the provisions of this clause, constitute a legal or equitable discharge of the Debtor’s obligations hereunder.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

Debtor hereby represents and warrants as follows:

3.1                                  Ownership of Collateral .  The Debtor owns, or has valid rights as a lessee or licensee with respect to, all Collateral purported to be pledged by it hereunder, free and clear of any Liens except for Permitted Liens.  No mortgage, security agreement, financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any government or public office, and the Debtor has not filed or consented to the filing of any such mortgage, agreement, statement or notice, except (i) Uniform Commercial Code financing statements naming the Secured Parties as Secured Parties and (ii) Liens in favor of ED pursuant to the Royalty Security Agreement.

3.2                                  Security Interests; Filings .  This Agreement, together with (i) the filing of duly completed and executed Uniform Commercial Code financing statements naming the Debtor as debtor, the Secured Parties as secured parties, and describing the Collateral, in the jurisdictions set forth with respect to the Debtor on Schedule I hereto (which filing is hereby authorized by the Debtor) and (ii) to the extent required by applicable law, the filing of duly completed and executed assignments in the forms required by the U.S. Copyright Office or the U.S. Patent and Trademark Office, creates, and at all times shall constitute, a valid and perfected security interest

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in and Lien upon the Collateral in favor of the Secured Parties, to the extent a security interest and Lien therein can be perfected by such filings, recordings or possession, as applicable, superior and prior to the rights of all other Persons therein except for Permitted Liens.

3.3                                  Locations .  Schedule I lists as to the Debtor, (i) its exact legal name, (ii) the jurisdiction of its incorporation or organization, its federal tax identification number, and (if applicable) its organizational identification number, (iii) the addresses of its chief executive office and each other place of business and (iv) the address of each location at which any of the Collateral Inventory or Collateral Equipment is kept, except for any new locations established in accordance with the provisions of Section 4.2 .  The Debtor does not presently conduct business under any prior or other corporate or company name or under any trade or fictitious names, except as indicated beneath its name on Schedule I , and the Debtor has not entered into any contract or granted any Lien within the past five (5) years under any name other than its legal corporate name or a trade or fictitious name indicated on Schedule I .

3.4                                  No Violations .  The signing, delivery and performance of this Agreement by the Debtor is not prohibited or limited by, and will not result in the breach of or a default under, any provision of the certificate of incorporation, bylaws or other formation documents of the Debtor, any material agreement or instrument binding on the Debtor or any Legal Requirement applicable to the Debtor, except for such prohibitions, limitations, defaults or Legal Requirements as would not prevent or impair consummation by the Debtor of the transactions contemplated hereby, the performance by the Debtor of its obligations hereunder or the exercise of the Secured Parties of their rights hereunder.  The execution, delivery and performance of this Agreement by the Debtor, the Debtor’s compliance with the terms and provisions hereof and the Secured Parties’ exercise of any of their rights hereunder, do not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default or create a termination right under, with or without the passage of time and the giving of notice, any material contract or other instrument or obligation binding or affecting the Debtor, the Royalty Products or the Collateral including, without limitation, that certain agreement dated December 28, 2000 between Tanabe Seiyaku Co., Ltd. and the Debtor (the “ Tanabe Agreement ”), except as set forth in that certain disclosure letter of even date herewith delivered by the Debtor to ED pursuant to Section 7 of the Royalty Agreement.

3.5                                  No Restrictions .  There are no statutory or regulatory restrictions, prohibitions or limitations on the Debtor’s ability to grant to the Secured Parties a Lien upon and security interest in the Collateral pursuant to this Agreement or (except for the provisions of the federal Anti-Assignment Act (41 U.S.C. 15), as amended and the Anti-Claims Act (31 U.S.C. 3727), as amended) on the exercise by the Secured Parties of their rights and remedies hereunder (including any foreclosure upon or collection of the Collateral), and there are no contractual restrictions on the Debtor’s ability to grant such Lien and security interest.

3.6                                  Accounts .  Each Collateral Account is, or at the time it arises will be, (i) a bona fide, valid and legally enforceable indebtedness of the account debtor according to its terms, arising out of or in connection with the sale, lease or performance of goods or services by the Debtor or any of them, (ii) subject to no offsets, discounts, counterclaims, contra accounts or any other defense of any kind and character, other than warranties and discounts customarily given by the Debtor in the ordinary course of business and warranties provided by applicable law,

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(iii) to the extent listed on any schedule of Collateral Accounts at any time furnished to the Secured Parties, a true and correct statement of the amount actually and unconditionally owing thereunder, maturing as stated in such schedule and in the invoice covering the transaction creating such Collateral Account, and (iv) not evidenced by any other instrument; or if so, such other instrument (other than invoices and related correspondence and supporting documentation) shall promptly be duly endorsed to the order of the Secured Parties and delivered to the Secured Parties to be held as Collateral hereunder.  To the knowledge of the Debtor, there are no facts, events or occurrences that would in any way impair the validity or enforcement of any Collateral Accounts except as set forth above.

ARTICLE 4

COVENANTS

The Debtor agrees that so long as any Obligation remains unpaid:

4.1                                  Use and Disposition of Collateral .  So long as no Event of Default shall have occurred and be continuing, the Debtor may, in any lawful manner not inconsistent with the provisions of this Agreement, use, control and manage the Collateral in the operation of its business, and receive and use the income, revenue and profits arising therefrom and the proceeds thereof, in the same manner and with the same effect as if this Agreement had not been made; provided , however , that the Debtor will not sell or otherwise dispose of (other than sales of Royalty Products in the ordinary course of the Debtor’s business), grant any option with respect to or grant any Lien with respect to or otherwise encumber any of the Collateral or any interest therein, except for Permitted Liens, except as may be otherwise expressly permitted in accordance with the terms of this Agreement (including any applicable provisions therein regarding delivery of proceeds of sale or disposition to the Secured Parties) or except in connection with a permitted assignment under Section 10.7 of the Option and Put Agreement.

4.2                                  Change of Name, Locations, etc .  The Debtor will not (i) change its name, identity or corporate structure, (ii) change its chief executive office from the location thereof listed on Schedule I , (iii) change the jurisdiction of its incorporation or organizatio