Exhibit 10.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HAMILTON PLAZA OFFICE LEASE

 

 

 

 

 

 

 

AG-SW HAMILTON PLAZA OWNER, L.P.,

a Delaware limited partnership as Landlord,

and

 

VIVUS, INC.,

a Delaware corporation as Tenant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HAMILTON PLAZA

Vivus, Inc.

 

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Page

 

SUMMARY OF BASIC
LEASE INFORMATION..............................................................................................BLI-i

 

 

OFFICE LEASE

ARTICLE 1 PROJECT, BUILDING AND PREMISES1 

ARTICLE 2 LEASE TERM2 

ARTICLE 3 BASE RENT2 

ARTICLE 4 ADDITIONAL RENT3 

ARTICLE 5 USE OF PREMISES7 

ARTICLE 6 SERVICES AND UTILITIES8 

ARTICLE 7 REPAIRS9 

ARTICLE 8 ADDITIONS AND ALTERATIONS9 

ARTICLE 9 COVENANT AGAINST LIENS11 

ARTICLE 10 INDEMNIFICATION AND INSURANCE11 

ARTICLE 11 DAMAGE AND DESTRUCTION12 

ARTICLE 12 CONDEMNATION13 

ARTICLE 13 COVENANT OF QUIET ENJOYMENT14 

ARTICLE 14 ASSIGNMENT AND SUBLETTING14 

ARTICLE 15 SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES16 

ARTICLE 16 HOLDING OVER16 

ARTICLE 17 ESTOPPEL CERTIFICATES17 

ARTICLE 18 SUBORDINATION17 

ARTICLE 19 TENANT'S DEFAULTS; LANDLORD'S REMEDIES17 

ARTICLE 20 SECURITY DEPOSIT19 

ARTICLE 21 COMPLIANCE WITH LAW19 

ARTICLE 22 ENTRY BY LANDLORD19 

ARTICLE 23 TENANT PARKING20 

ARTICLE 24 MISCELLANEOUS PROVISIONS20 

 

 

 

 

EXHIBITS

 

Exhibit AOUTLINE OF PREMISES

Exhibit BWORK LETTER

Exhibit CAMENDMENT TO LEASE Exhibit DRULES AND REGULATIONS

 

 

RIDERS

 

Rider 1EXTENSION OPTION RIDER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vivus, Inc.

Vivus, Inc.

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SUMMARY OF BASIC LEASE INFORMATION

 

This Summary of Basic Lease
Information ("Summary") is hereby incorporated into and made a part of the attached
Office Lease.  Each reference in the Office Lease to any term of this Summary
shall have the meaning as    set forth in this Summary for such term. In the
event of a conflict between the terms of this Summary and the Office Lease, the
terms of the Office Lease shall prevail.  Any capitalized terms used herein and
not otherwise defined herein shall have the meaning as set forth in the
Office Lease.

 

TERMS OF LEASE

(References are to the Office Lease)

 

DESCRIPTION

1.Date:

August 9, 2016

2.Landlord:

AG-SW HAMILTON PLAZA OWNER, L.P.,

a Delaware limited partnership

3.Address of Landlord (Section 24.19):

AG-SW Hamilton Plaza Owner, L.P. c/o SteelWave, Inc.

4000 E. Third Avenue, Suite 500 Foster City, California 94404

Attention:  Senior Vice President, Asset Management

4.Tenant:

VIVUS, INC.,

a Delaware corporation

5.Address of Tenant (Section 24.19):

Vivus, Inc.

351 Evelyn Avenue

Mountain View, California 94041 Attention:  Chief Financial Officer

With an informational copy to: JLL

4085 Campbell Avenue, #150 Menlo Park, California 94025

Attention:  Rich Branning and Cole Smith

and

 

Vivus, Inc.

900 E. Hamilton Avenue, Suite 525

Campbell, California 95008 Attention: Chief Financial Officer (After Lease
Commencement Date)

6.Premises (Article 1):

6.1Premises:

13,981 rentable square feet of space located on the fifth (5th) floor of the
Building (as defined below), designated as Suites 525 and 550, as set forth
 in Exhibit A attached hereto.

6.2Building:

The Premises are located in that certain building (sometimes referred to herein
as  the "Building"), whose address is 900 E. Hamilton
Avenue, Campbell, California 95008.

7.Term (Article 2):

7.1Lease Term:

Fifty-eight (58) full calendar months.

7.2Lease Commencement Date:

The earlier of (i) the date Tenant commences business operations in the
Premises, or (ii) the later to occur  of:

(a) December 1, 2016, or (b) the date the Premises are Ready for Occupancy (as
defined in the Tenant Work Letter attached hereto as Exhibit B).

7.3Lease Expiration Date:

The last day of the fifty-eighth (58th) full calendar month following the Lease
Commencement Date.

 

 

 

 

 

 

 

Vivus, Inc.

Vivus, Inc.

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TERMS OF LEASE

(References are to the Office Lease)

 

 

DESCRIPTION

 

7.4Amendment to Lease:

Landlord and Tenant may confirm the Lease Commencement Date and Lease Expiration
Date in an Amendment to Lease (Exhibit C) to be executed pursuant to Article 2
of the Office Lease.

8.Base Rent (Article 3):

 

Months of Lease Term

 

Annual Base Rent

Monthly Installment of Base Rent

Monthly Rental Rate per Rentable Square Foot

1 – 16

$520,093.20

$43,341.10*

$3.10

17 – 28

$535,192.68

$44,599.39

$3.19

29 – 40

$551,969.88

$45,997.49

$3.29

41 – 52

 

53 – 58

$568,747.08

 

$585,524.28

$47,395.59

 

$48,793.69

$3.39

 

$3.49

*Tenant shall not be obligated to pay monthly Base Rent for the first four (4) months of the Lease Term so long as Tenant is not in monetary or other material default under the Lease, as more particularly described in the immediately following sentence. If, at any time, Tenant is in default of any monetary or other material term, condition
or provision of this Lease beyond applicable notice and grace periods, to the
fullest extent
permitted by law, any express or implicit waiver by Landlord of Tenant’s requirement to pay monthly Base Rent during any period of time from and after the date of this Lease shall be null and void and Tenant shall immediately pay to Landlord
all Base Rent so expressly or implicitly waived by Landlord.

9.Tenant's Share of Operating Expenses, Tax Expenses and Utilities Costs
(Article 4):

 

7.74% (13,981 rentable square feet within the Premises/180,716 rentable square
feet within the Building).

10.Security Deposit (Article 20):

$198,000.00.

 

11.Parking (Article 23):

 

3.4 unreserved parking spaces within the parking areas designated for the
Building for every
1,000 rentable square feet of the Premises, for a total of forty-eight

(48) parking spaces at no charge by Landlord, on an unreserved basis.

12.Brokers (Section 24.25):

 

Cornish & Carey Commercial Newmark Knight Frank representing Landlord, and Jones
Lang LaSalle representing Tenant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vivus, Inc.

Vivus, Inc.

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OFFICE LEASE

 

This Office Lease, which includes the preceding Summary and the exhibits attached hereto and incorporated herein by this reference (the Office Lease, the Summary and the exhibits to be known sometimes collectively hereafter as the "Lease"), dated as of the date set forth in Section 1 of the Summary, is made by and between
AG-SW HAMILTON PLAZA OWNER, L.P., a Delaware limited partnership
("Landlord"), and VIVUS, INC., a Delaware corporation ("Tenant").

 

ARTICLE 1

 

PROJECT, BUILDING AND PREMISES

 

1.1 Project, Building and Premises.

 

1.1.1 Premises. Upon and subject to the terms, covenants and conditions
hereinafter set
 forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises set forth in Section
6.1 of the Summary (the "Premises"), which Premises are located in the Building
defined in Section 6.2 of the Summary and located within the Project (as defined
below). The outline of the floor plan of the Premises is set forth in Exhibit A
attached hereto.

 

1.1.2 Building and Project. The Building is part of a multi-building
commercial project currently containing two (2) office buildings and known as "Hamilton Plaza". The term "Project" as used in this Lease, shall mean, collectively: (i) the Building; (ii) the other existing building whose street address is 910 E. Hamilton
Avenue, Campbell, California (the "Other Existing Building"); (iii) the surface
parking
areas and underground garage servicing the Building and the Other Existing Building (the "Parking Facilities"); (iv) any outside
plaza areas, walkways, driveways, courtyards, public and private streets,
transportation facilitation areas and other improvements and facilities now or
hereafter constructed surrounding and/or servicing the Building
and/or the Other Existing Building, which are designated from time to time by Landlord as common areas appurtenant to or servicing
the Building, the Other Existing Building and any such other improvements; (v)
any additional buildings, improvements, facilities and common areas which
Landlord (and/or any common area association formed by Landlord, Landlord's
predecessor-in-interest and/or Landlord's assignee for the Project) may add
thereto from time to time within or as part of the Project; and (vi) the land
upon which any of the foregoing are situated. Notwithstanding the foregoing or
anything contained in this Lease to the contrary, (1) Landlord has no
obligation to expand or otherwise make any improvements within the Project, including, without limitation, any of the outside plaza areas, walkways, driveways, courtyards, public and private streets, transportation facilitation areas and other improvements and facilities which comprise the Project (as the same may be modified by Landlord from time to time without notice to Tenant), other than Landlord's obligations (if any) specifically set forth in the Tenant Work Letter,
and (2) Landlord shall have the right from time to time to include or exclude
any improvements or facilities within the Project, at such party's reasonable
election, as more particularly set forth in Section 1.1.3 below, provided that
Tenant’s access, parking, and other rights under this Lease are not materially
and adversely affected.

 

1.1.3 Tenant's and Landlord's Rights. Tenant is hereby granted the right to the
 nonexclusive use of the common corridors and hallways, stairwells, elevators, restrooms and other public or common areas located within the Building, and the non-exclusive use of those areas located on the Project that are designated by Landlord
from time to time as common areas for the Building (the "Common Areas");
provided, however, that

(x)
the manner in which such public and Common Areas are maintained and operated shall be at the sole discretion of
Landlord, (ii) Tenant's use thereof shall be subject to (A) the provisions of
any covenants,
conditions and restrictions regarding the use thereof now or hereafter recorded against the Project, and (B) such reasonable, non- discriminatory
rules, regulations and restrictions as Landlord may make from time to time, and
(iii) Tenant may not go on the roof of the Building or the Other Existing
Building without Landlord's prior consent (which may be withheld in Landlord's
sole and absolute discretion) and without otherwise being accompanied by a
representative of Landlord. Landlord reserves the right from time to time to use any of the Common Areas, and the roof, risers and conduits
of the Building and the Other Existing Building for telecommunications and/or
any other purposes,
and to do any of the following: (1) make any changes, additions, improvements, repairs and/or replacements in or to the Project
or any portion or elements thereof, including, without limitation, (x) changes
in the location, size, shape and number of driveways, entrances, loading and
unloading areas, ingress, egress, direction of traffic,
landscaped areas, walkways, public and private streets, plazas, courtyards, transportation facilitation areas and common areas, and

(y)
expanding or decreasing the size of the Project and any Common Areas and other elements thereof, including adding,
deleting and/or excluding buildings (including the Other Existing Building)
thereon and therefrom; (2) close temporarily any of the Common Areas while
engaged in making repairs, improvements or alterations to the Project;

(3) retain and/or form a common area association or associations under covenants, conditions and restrictions to own, manage, operate, maintain, repair and/or replace all or any portion of the landscaping, driveways, walkways, public and private streets, plazas, courtyards, transportation facilitation areas and/or other Common Areas located outside
of the Building and the Other Existing Building and, subject to Article 4 below,
include the Common Area assessments, fees and taxes charged by the
association(s) and the cost of maintaining, managing,
administering and operating the association(s), in Operating Expenses or Tax
Expenses; and (4) perform such other acts and make such other changes with
respect to the Project as Landlord may, in the exercise of good faith business
judgment, deem to be appropriate. In connection with any work by Landlord in,
and alterations or improvements to the
common areas for the Building and/or Project, Landlord shall use commercially reasonable efforts to minimize any material adverse
interference with Tenant's business at the Premises, and any unreasonable
interference with Tenant's access to the Premises, as a result thereof.

 

25.1 Condition of Premises. Except as expressly set forth in this Lease and in
the Tenant Work Letter attached hereto as Exhibit B, Landlord shall not be
obligated to provide or pay for any improvement, remodeling or

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

refurbishment work or services related to the improvement, remodeling or refurbishment of the Premises, and Tenant
shall accept the Premises in its "AS IS" condition on the Lease Commencement
Date, provided
that without limiting Landlord’s obligations under the Work Letter, Landlord shall (a) repair any damage caused by Landlord’s removal of furniture, fixtures and equipment from the Premises prior to delivery of possession thereof to Tenant, and

(b) cause the Premises to be in a broom clean condition on the Lease Commencement Date. On the Lease Commencement Date, Landlord shall deliver the Premises with the existing Systems and Equipment in good working condition and Tenant shall have a review period of twelve (12) months from the Lease Commencement Date (the "Review Period") to confirm such condition. In the event that Tenant notifies Landlord during the Review
Period, in writing, of any of the foregoing items that are not in good working
condition, Landlord
 shall cause such items to be promptly repaired to the extent that any deficiencies to such systems are not caused by the wrongful or negligent acts or omissions of Tenant or any of Tenant's Representatives (as defined below), or any Alterations
performed by or on behalf of Tenant. If Tenant fails to timely deliver to
Landlord such written notice of Systems or Equipment not in good working
condition within the Review Period, Landlord shall have
no obligation to perform any such work thereafter, except as otherwise expressly provided in the Lease.

 

25.2 Rentable Square Feet. The rentable square feet for the Premises are
approximately as set forth in Section 6.1 of the Summary. For purposes hereof,
the "rentable square feet" of the Premises and the
Building shall be calculated by Landlord with respect to rentable square footage pursuant to Landlord's standard rentable area measurements for the Project, to include, among other calculations, a portion of the Common Areas and service areas
attributable to the Building and the Other Existing Building. The rentable
square feet of the Premises and the Building are not subject to adjustment or
remeasurement by Tenant, but the rentable square feet of the Premises and the
rentable square feet of the Building are subject to verification from time to
time by
Landlord's planner/designer and such verification shall be made in accordance with the provisions of this Section 1.3. Tenant's architect may consult with Landlord's planner/designer regarding such verification, except to the extent it relates to the rentable square
feet of the Building; provided, however, the determination of Landlord's
planner/designer shall
be conclusive and binding upon the parties. In the event that Landlord's planner/designer determines that the rentable square footage
amounts shall be different from those set forth in this Lease, all amounts,
percentages and figures appearing or referred to in this Lease based upon such
incorrect rentable square feet (including, without limitation, the amount of the
Base Rent and Tenant's Share) shall be modified in accordance with such
determination. If
 such determination is made, it will be confirmed in writing by Landlord to Tenant. Notwithstanding the foregoing, Landlord
hereby agrees that, during the initial Lease Term, the rentable square footage
of the Premises shall
only be redetermined upon a physical change to the size of the Premises or as the result of a new load factor applicable to tenants
of the Building due to new common area amenities.

 

ARTICLE 2

 

LEASE TERM

 

This Lease shall be effective as of the date of this Lease. The term of this
Lease (the "Lease Term") shall be as set forth in Section 7.1 of the Summary and
shall commence on the date (the "Lease
Commencement Date") set forth in Section 7.2 of the Summary (subject, however, to the terms of the Tenant Work Letter and Landlord’s delivery
obligations set forth in Section 1.2), and shall terminate on the date (the
"Lease Expiration Date") set forth in Section 7.3 of the Summary, unless this
Lease is sooner terminated as hereinafter provided. For purposes of this Lease,
the term "Lease Year" shall mean each consecutive twelve (12) month period
during the Lease Term, provided that the last Lease Year shall end on the Lease
Expiration Date. If Landlord does not deliver possession of the Premises to
Tenant on or before the anticipated Lease Commencement Date (as set forth in
Section 7.2(ii)
of the Summary), Landlord shall not be subject to any liability nor shall the validity of this Lease nor the obligations of Tenant hereunder be affected, provided that Landlord shall use all commercially reasonable efforts to deliver possession to Tenant as soon as possible, including the immediate prosecution of unlawful detainer to remove holdover tenants if necessary to regain possession following the expiration of existing leases. In the event that the Lease Commencement Date is a date which is other than the anticipated Lease Commencement Date set forth in Section 7.2(ii) of the Summary, within a reasonable period of time after the date Tenant takes possession of the Premises Landlord shall deliver to Tenant an amendment to lease in the form attached hereto as Exhibit C, setting forth the Lease Commencement Date and the Lease Expiration Date, which amendment Tenant shall execute and return to Landlord within five (5) days after Tenant's receipt thereof. If Tenant fails to execute and return the amendment within such 5-day period, Tenant shall be deemed to have approved and confirmed the dates set forth therein, provided that such deemed approval shall not relieve Tenant of its obligation to execute and return the amendment.
In the event that Landlord does not deliver such amendment to Tenant, the Lease
Commencement Date shall be deemed to be the anticipated Lease Commencement Date set forth in Section 7.2(ii) of the Summary.

 

ARTICLE 3

 

BASE RENT

 

Tenant shall pay, without notice or demand, to Landlord or Landlord's agent at the management office of the
Project, or at such other place as Landlord may from time to time designate in
writing, in currency or a
check for currency which, at the time of payment, is legal tender for private or public debts in the United States of America, base
rent ("Base Rent") as set forth in Section 8 of the Summary, payable in equal
monthly installments as set forth in Section 8 of the Summary in advance on or
before the first day of each and every month during the
Lease Term, without any setoff or deduction whatsoever. The Base Rent and estimated Additional Rent for the first (1st) full month
of the Lease Term (in the aggregate amount of $60,537.73) shall be paid at the
time of Tenant's execution of this Lease. If any rental payment date (including
the Lease Commencement Date) falls on a day of the
month other than the first day of such month or if any rental payment is for a period which is shorter than one month, then the rental for any such fractional month shall be a proportionate amount of a full calendar month's rental based on the

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

proportion that the number of days in such fractional month bears to the number of days in the calendar month during
which such fractional month occurs. All other payments or adjustments required
to be made under
the terms of this Lease that require proration on a time basis shall be prorated on the same basis. If, at any time, Tenant is in default of any monetary or other material term, condition or provision of this Lease beyond applicable notice and grace
periods, to the fullest extent permitted by law, any express or implicit waiver
by Landlord of Tenant's requirement to pay Base Rent during any period of time
from and after the Lease Commencement Date shall
be null and void and Tenant shall immediately pay to Landlord all Base Rent so expressly or implicitly waived by Landlord.

 

ARTICLE 4

 

ADDITIONAL RENT

 

25.1
Additional Rent. In addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall pay as additional rent the sum of the following: (i) Tenant's Share (as such term is defined below) of the Operating
Expenses allocated to the Building (pursuant to Section 4.3.4 below); plus (ii)
Tenant's Share of the Tax Expenses allocated to the Building (pursuant to
Section 4.3.4 below); plus (iii) Tenant's Share of the
Utilities Costs allocated to the Building (pursuant to Section 4.3.4 below). Such additional rent, together with any and all other amounts
payable by Tenant to Landlord pursuant to the terms of this Lease (including,
without limitation,  pursuant to Article 6), shall be hereinafter collectively
referred to as the "Additional Rent." The Base Rent and Additional Rent are
herein collectively referred to as the "Rent." All amounts due under this
Article 4 as Additional
Rent shall be payable for the same periods and in the same manner, time and place as the Base Rent. Without limitation on other obligations of Tenant which shall survive the expiration of the Lease Term, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4 shall survive the expiration of
the Lease Term.

 

 

 

forth:

25.2

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

Definitions. As used in this Article 4, the following terms shall have the
meanings hereinafter set

 

 

 

25.2.1 "Calendar Year" shall mean each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease
Term expires.

 

25.2.2 "Expense Year" shall mean each Calendar Year, provided that Landlord,
upon notice to Tenant, may change the Expense Year from time to time to any
other twelve (12) consecutive-month period,
and, in the event of any such change, Tenant's Share of Operating Expenses, Tax Expenses and Utilities Costs shall be equitably
adjusted for any Expense Year involved in any such change.

 

25.2.3
"Operating Expenses" shall mean all expenses, costs and amounts of every kind and nature
which Landlord shall pay during any Expense Year because of or in connection
with the ownership, management, maintenance, repair, replacement, restoration or
operation of the Project, including, without limitation, any amounts paid for:
(i) the cost of operating, maintaining, repairing, renovating and managing the
utility systems, mechanical systems, sanitary and storm drainage systems, any
elevator systems and all other "Systems and Equipment" (as defined in Section
4.2.4 of this Lease), and the cost of supplies and equipment and
maintenance and service contracts in connection therewith; (ii) the cost of
licenses, certificates, permits and inspections, and
the cost of contesting the validity or applicability of any governmental enactments which may affect Operating Expenses, and
the costs incurred in connection with implementation and operation (by Landlord
or any common area association(s) formed for the Project) of a transportation
system management program or similar program; (iii) the cost of insurance
carried by Landlord, in such amounts as Landlord may reasonably determine or as
may be required by any mortgagees or the lessor of any underlying or ground
lease affecting the Project; (iv) the cost of landscaping, relamping, supplies,
tools, equipment and materials, and all fees, charges and other costs (including
consulting fees, legal fees and accounting fees) incurred in connection with the management, operation, repair and maintenance of the Project and any common area amenities; (v) the cost of parking area repair, restoration, and maintenance; (vi) any
equipment rental agreements or management agreements (including the cost of any
management fee and
the fair rental value of any office space provided thereunder); (vii) wages, salaries and other compensation and benefits of all persons engaged in the operation, management, maintenance or security of the Project, and employer's Social Security
taxes, unemployment taxes or insurance, and any other taxes which may be levied
on such wages, salaries, compensation and benefits; (viii) payments under any
easement, license, operating agreement,  declaration, restrictive covenant,
underlying or ground lease, or instrument pertaining to the sharing of costs by
the Project; (ix) the cost of janitorial service, alarm and security service, if
any, window cleaning, trash removal, replacement
of wall and floor coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and other common or public areas or facilities,
maintenance and replacement of curbs and walkways, repair to roofs and
re-roofing; (x) amortization (including interest on the unamortized cost) of the
cost of acquiring or the rental expense of personal
property used in the maintenance, operation and repair of the Project; (xi) costs for workers' compensation insurance, wages, withholding
taxes, personal property taxes, fees for required licenses and permits,
supplies, charges for management of the Building and Common Areas, and the costs
and expenses of complying with, or participating in, conservation, recycling,
sustainability, energy efficiency, waste reduction or other programs or
practices implemented or enacted from time to time at the Building, including
without limitation, in connection with any LEED (Leadership
in Energy and Environmental Design) rating or compliance system or program, including that currently coordinated through the
U.S. Green Building Council or Energy Star rating and/or compliance system or
program (collectively "Conservation Costs"); and (xii) the cost of any capital improvements or other costs (I) which are intended as a labor-saving
device or to effect other economies in the operation or maintenance of the
Project (including Conservation Costs), (II) made to the Project or any portion thereof after the Lease Commencement Date that are required
under any governmental law or regulation, or (III) repairs, replacements or
modifications of existing improvements located at the Project that are required
to keep the Project in good order and condition; provided, however, that if any
such cost described in (I), (II) or (III) above, is a capital expenditure, such
cost
shall be amortized (including interest on the unamortized cost) as Landlord shall reasonably determine. If Landlord is not

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

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furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating
Expenses which would reasonably have been incurred during such period by
Landlord if it had at
its own expense furnished such work or service to such tenant. If any of (x) the Building, (y) the Other Existing Building (but only during the period of time the same are included by Landlord within the Project) and (z) any additional buildings are added to the Project pursuant to Section 1.1.3 above (but only during the period of time after such additional buildings have been fully constructed and ready for occupancy and are included by Landlord within the Project) are less than ninety-five percent (95%) occupied during all or a portion of any Expense Year,
Landlord shall make an appropriate adjustment to the variable components of Operating Expenses for such year or applicable portion thereof, employing sound accounting and management principles, to determine the amount of Operating Expenses varying based upon occupancy that would have been paid had the Building, the Other Existing Building and
such additional buildings (if any) been ninety-five percent (95%) occupied; and
the amount so
determined shall be deemed to have been the amount of Operating Expenses for such year, or applicable portion thereof.

 

Subject to the provisions of Section 4.3.4 below, Landlord shall have the right, from time to time, to equitably allocate some or all of the Operating Expenses (and/or Tax Expenses and Utilities Costs) between the Building and the Other Existing Building and/or among different tenants of the Project and/or among different buildings of the Project as and when such different buildings are constructed and added to (and/or excluded from) the Project or otherwise (the "Cost Pools") provided such Cost Pools are equitably applied. Such Cost Pools may include, without limitation, the office space tenants and other tenants of the Project or of a building or buildings within
the Project. Such Cost Pools may also include an allocation of certain Operating
Expenses (and/or Tax Expenses and Utilities Costs) within or under covenants,
conditions and restrictions affecting the  Project. In addition, Landlord shall
have the right from time to time, in its reasonable discretion, to include or
exclude existing or future buildings in the Project for purposes of determining
Operating Expenses, Tax Expenses and Utilities Costs and/or the provision of
various services and amenities thereto, including allocation of Operating
Expenses, Tax Expenses and Utilities Costs in any such Cost Pools.

 

Notwithstanding the foregoing, Operating Expenses shall not, however, include:
(A) costs of leasing commissions, attorneys' fees and other costs and expenses
incurred in connection with negotiations or disputes with present or prospective
tenants or other occupants of the Project; (B) costs (including permit, license
and inspection costs) incurred in renovating or otherwise improving, decorating
or redecorating rentable space for other tenants or vacant rentable space; (C)
costs incurred due to the violation by Landlord of the terms and conditions of
any
lease of space in the Project; (D) costs of overhead or profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for services in or in connection with the Project to the extent the same exceeds the costs of overhead and profit increment included in the costs of such services which could be obtained from third parties on a competitive basis; (E) except as otherwise specifically provided in this Section 4.2.3, costs of interest, fees, principal or other charges
on debt or amortization on any mortgages, encumbering the Project; (F) Utilities
Costs; (G) Tax   Expenses;

(H) rental on ground leases; (I) costs associated with the investigation and/or remediation of Hazardous Materials (hereafter defined) present in, on or about the Building, unless such costs and expenses are the responsibility of Tenant as provided in this Lease, in which event all such costs and expenses shall be paid solely by; (J) except as otherwise provided in this Lease, the cost of any capital improvements; (K) the costs of repairs to the Building, if the costs of such repairs are reimbursed by the insurance carried by Landlord or subject to award under any eminent domain
proceeding; (L) depreciation, amortization and interest payments, except as
specifically permitted herein or except on materials, tools, supplies and
vendor-type equipment purchased by Landlord to enable Landlord
to supply services Landlord might otherwise contract for with a third party where such depreciation, amortization or interest payments would otherwise have been included in the charge for such third party’s services (in such circumstance, the
inclusion of all depreciation, amortization and interest payments shall be
determined in a manner consistent with generally accepted commercial office
building accounting practices, consistently applied, amortized
over the reasonably anticipated useful life of the capital item for which such amortization, depreciation or interest was calculated,
as reasonably determined by Landlord); (M) costs associated with operating the
entity which constitutes Landlord, as the same are distinguished from the costs
of operation of the Building, including
 partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may
be in issue), costs of selling, syndicating, financing, mortgaging or
hypothecating any of Landlord’s interest in the Building, costs (including
attorneys’ fees and costs of settlement judgments and payments in lieu
thereof) arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitration pertaining to Landlord’s ownership of the Building; (N) charitable and political contributions; (O) electric, gas or other
power costs for which Landlord has been directly reimbursed by another tenant or
occupant of the Building, or for which any tenant directly contracts with the
local public service company; (P) tax penalties and interest incurred as a
result of Landlord’s negligent or willful failure to make payments and/or or
file any income tax
or informational return(s) when due, unless such non-payment is due to Tenant’s non-payment of rent; (Q) costs incurred by Landlord to comply with notices of violation of the Americans With Disabilities Act, as amended, when such notices
are for conditions existing prior to the Lease Commencement Date; and (R) wages,
bonuses
and other compensation of employees of Landlord or Landlord's property manager at or above the level of Regional Vice President.

 

25.2.4
"Systems and Equipment" shall mean any plant, machinery, transformers, duct work, cable,
wires, and other equipment, facilities, and systems designed to supply heat,
ventilation, air
conditioning and humidity or any other services or utilities, or comprising or serving as any component or portion of the electrical, gas, steam, plumbing, sprinkler, communications, alarm, security, or fire/life safety systems or equipment, or any other mechanical, electrical, electronic, computer or other systems or equipment which serve the Building and/or any
other building in the Project in whole or in part.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

25.2.5 "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, assessments, charges or other impositions
of every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments,
transit assessments, fees and taxes, child care subsidies, fees and/or assessments, job training subsidies, fees and/or assessments, open space fees and/or assessments, housing subsidies and/or housing fund fees or assessments, public art fees and/or assessments,
leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales  taxes applicable to the receipt of rent, personal property
taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and
equipment, appurtenances, furniture and other personal property used in
connection with the Project), which Landlord shall pay during any Expense Year
because of or in connection with the
ownership, leasing and operation of the Project or Landlord's interest therein. For purposes of this Lease, Tax Expenses shall be calculated as if (i) the tenant improvements in the Building, the Other Existing Building and any additional buildings added to the Project pursuant to Section 1.1.3 above (but only during the period of time that such Other Existing Building and additional buildings are included by Landlord within the Project) were fully constructed, and (ii) the Project, the Building, the Other Existing Building and such additional buildings (if any) and all tenant improvements therein
were fully assessed for real estate tax purposes.

 

25.2.5.1 Tax Expenses shall include, without limitation:

 

(i) Any tax on Landlord's rent, right to rent or other income from the Project
or as against Landlord's business of leasing any of the Project;

 

(ii) Any assessment, tax, fee, levy or charge in addition to,
or in substitution, partially or totally, of any assessment, tax, fee, levy or
charge previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13") and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance,
refuse removal and for other governmental services formerly provided without
charge to property owners or occupants. It is the intention of Tenant and
Landlord that all such new and increased assessments, taxes, fees, levies, and
charges and all similar assessments, taxes, fees, levies and charges be included
within the definition of Tax Expenses for purposes of this Lease;

 

(iii)
Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the rent payable hereunder, including, without limitation, any gross income tax upon or with
respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any
portion thereof;

 

(iv)
Any assessment, tax, fee, levy or charge, upon this transaction or any document
to which Tenant is a party, creating or transferring an interest or an estate in
the Premises; and

 

 

 

reduce or minimize Tax Expenses.

(v)

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

Any reasonable expenses incurred by Landlord in attempting to protest,

 

 

 

25.2.5.2 Notwithstanding anything to the contrary contained in this Section
4.2.5, there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state net income taxes, and other taxes to the extent applicable to Landlord's net income (as opposed to rents, receipts or income attributable to
operations at the Project),

(ii)

any items included as Operating Expenses or Utilities Costs, (iii) any items
paid by Tenant under Section
4.4 of this Lease; (iv) penalties incurred solely as a result of Landlord's failure to timely remit any Tax Expenses due to applicable governmental authorities; and (v) real estate taxes directly payable by Tenant or any other tenant in the Building
under the applicable provisions of their respective leases.

 

2.2.1 "Tenant's Share" shall mean the percentage set forth in Section 9 of
the Summary. Tenant's Share was calculated by dividing the number of rentable square feet of the Premises by the total rentable square feet in the Building (as set forth in Section 9 of the Summary), and stating such amount as a percentage. Subject
to Section 1.3 above, Landlord shall have the right from time to time to
redetermine the rentable
square feet of the Premises and/or Building, and Tenant's Share shall be appropriately adjusted to reflect any such redetermination. If Tenant's Share is adjusted pursuant to the foregoing, as to the Expense Year in which such adjustment
occurs, Tenant's Share for such year shall be determined on the basis of the
number of days during such Expense Year that each such Tenant's Share was in
effect.

 

2.2.2
"Utilities Costs" shall mean all actual charges for utilities for the Building and the Project (including utilities for the Other Existing Building and additional buildings, if any, added to the Project during the period of time the same are included by Landlord within the Project) which Landlord shall pay during any Expense
Year, including, but not limited to, the costs of water, sewer and electricity,
and the costs
of HVAC (including, unless paid by Tenant pursuant to Section 6.1.2 below, the cost of electricity to operate the HVAC air handlers) and other utilities as well as related fees, assessments, measurement meters and devices and surcharges (but excluding those charges for which tenants directly reimburse Landlord or otherwise pay directly to the utility company). Utilities Costs shall be calculated assuming the Building (and, during the period of time when such buildings are included by Landlord within the Project, the Other Existing Building and any additional buildings, if any, added to the Project) are at least ninety-five percent (95%) occupied during all or any portion of an Expense Year. If, during all or any part of any Expense Year, Landlord shall not provide any utilities (the cost of which, if provided by Landlord, would be included in Utilities Costs) to a tenant (including Tenant) who has undertaken to provide the same instead of Landlord, Utilities Costs shall be deemed to be increased by an amount equal to the additional Utilities Costs which would reasonably have been incurred during such period by Landlord if Landlord

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

had at its own expense provided such utilities to such tenant, with the intention that Tenant’s Share shall equitably approximate the actual utilities usage of Tenant. Utilities Costs shall include any costs of utilities which are allocated to the Project under any declaration, restrictive covenant, or other instrument pertaining to the sharing of costs by the Project or any portion thereof, including any covenants, conditions or restrictions now or hereafter recorded
against or affecting the Project.

 

2.3

Calculation and Payment of Additional Rent.

 

2.3.1 Payment of Operating Expenses, Tax Expenses and Utilities Costs. During
the Term, Tenant shall pay to Landlord, as Additional Rent, the following, which payment shall be made in the manner set forth
in Section 4.3.2 below: (i) Tenant's Share of Operating Expenses allocated to
the Building pursuant to Section

4.3.4 below; plus (ii) Tenant's Share of Tax Expenses allocated to the Building
pursuant to Section 4.3.4 below; plus

(iii)

Tenant's Share of Utilities Costs allocated to the Building pursuant to Section
4.3.4 below.

 

3.3.2 Statement of Actual Operating Expenses, Tax Expenses and Utilities Costs
and Payment by Tenant. Landlord shall endeavor to give to Tenant on or before
the thirtieth (30th) day of June following
the end of each Expense Year, a statement (the "Statement") which shall state the Operating Expenses, Tax Expenses and Utilities Costs incurred or accrued for such preceding Expense Year that are allocated to the Building pursuant to Section
4.3.4 below, and which shall indicate therein Tenant's Share thereof. Upon
receipt of the Statement
for each Expense Year ending during the Lease Term, Tenant shall pay, with its next installment of Base Rent due, the full amount
of Tenant's Share of Operating Expenses, Tax Expenses and Utilities Costs for
such Expense Year, less the amounts, if any, paid during such Expense Year as
"Estimated Expenses," as that term is defined in Section 4.3.3 of this Lease.
The failure of Landlord to timely furnish the Statement for any Expense Year
shall
not prejudice Landlord from enforcing its rights under this Article 4. Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant's Share of the Operating Expenses, Tax Expenses and Utilities Costs for the Expense Year in which this Lease terminates, Tenant shall pay to Landlord an amount
as calculated pursuant to the provisions of Section 4.3.1 of this Lease, within
thirty (30) days after receipt of a written invoice. The provisions of this
Section 4.3.2 shall survive the expiration or earlier termination of
the Lease Term.

 

3.3.3 Statement of Estimated Operating Expenses, Tax Expenses and Utilities
Costs. In addition, Landlord shall endeavor to give Tenant a yearly expense estimate statement (the "Estimate Statement") which
shall set forth Landlord's reasonable estimate (the "Estimate") of what the
total amount of
Operating Expenses, Tax Expenses and Utilities Costs allocated to the Building pursuant to Section 4.3.4 below for the then- current
Expense Year shall be, and which shall indicate therein Tenant's Share thereof
(the "Estimated Expenses"). The failure of Landlord to timely furnish the
Estimate Statement for any Expense Year shall not
preclude Landlord from enforcing its rights to collect any Estimated Expenses under this Article 4. Following Landlord's delivery of the
Estimate Statement, Tenant shall pay, within thirty (30) days after receipt of
the Estimate Statement, and thereafter with each installment of Base Rent due, a
fraction of the Estimated Expenses for the
then-current Expense Year (reduced by any amounts paid pursuant to the last sentence of this Section 4.3.3). Such fraction shall have as its
numerator the number of months which have elapsed in such current Expense Year
to the month of
 such payment, both months inclusive, and shall have twelve (12) as its denominator. Until a new Estimate Statement is furnished, Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Expenses set forth in the previous Estimate Statement delivered by Landlord to Tenant.

 

3.3.4 Allocation of Operating Expenses, Tax Expenses and Utilities Costs to
Building. The parties acknowledge that the Building is part of a multi-building
commercial project consisting of the
Building, the Other Existing Building and such other buildings as Landlord may elect to construct and include as part of the Project from time to time (the Other Existing Building and any such other buildings are sometimes referred to herein, collectively, as the "Other Buildings"), and that certain of the costs and expenses incurred in connection with
the Project (i.e. the Operating Expenses, Tax Expenses and Utilities Costs)
shall be shared among the Building and/or such Other Buildings, while certain
other costs and expenses which are solely attributable to the Building and such
Other Buildings, as applicable, shall be allocated directly to the Building and
the Other Buildings, respectively. Accordingly, as set forth in Sections 4.1 and
4.2 above, Operating Expenses, Tax Expenses and Utilities Costs are determined
annually for the Project as a whole, and a portion of the Operating Expenses,
Tax Expenses
and Utilities Costs, which portion shall be determined by Landlord on an equitable basis, shall be allocated to the Building (as opposed to the tenants of the Other Buildings), and such portion so allocated shall be the amount of Operating Expenses,
Tax Expenses and Utilities Costs payable with respect to the Building upon which
Tenant's Share shall be calculated. Such portion of the Operating Expenses, Tax
Expenses and Utilities Costs allocated to the Building shall include all
Operating Expenses, Tax Expenses and Utilities Costs which are attributable
solely to the
Building, and an equitable portion of the Operating Expenses, Tax Expenses and Utilities Costs attributable to the Project as a whole. As an example of such allocation with respect to Tax Expenses and Utilities Costs, it is anticipated that Landlord
may receive separate tax bills which separately assess the improvements
component of Tax Expenses for each building in the Project and/or Landlord may
receive separate utilities bills from the
utilities companies identifying the Utilities Costs for certain of the utilities costs directly incurred by each such building (as measured by separate meters installed for each such building), and such separately assessed Tax Expenses and separately metered
Utilities Costs shall be calculated for and allocated separately to each such
applicable building. In addition, in the event Landlord elect to subdivide
certain common area portions of the Project such as landscaping,
public and private streets, driveways, walkways, courtyards, plazas, transportation facilitation areas and/or accessways into a separate
parcel or parcels of land (and/or separately convey all or any of such parcels
to a common area association to own, operate and/or maintain same), the
Operating Expenses, Tax Expenses and Utilities Costs for
such common area parcels of land may be aggregated and then reasonably allocated by Landlord to the Building and such Other Buildings on an equitable basis as Landlord (and/or any applicable covenants, conditions and restrictions for any such
common area association) shall provide from time to time.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

3.4 Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant
shall reimburse Landlord within thirty (30) days after receipt of written notice for any and all taxes or assessments required to be paid
by Landlord (except to the extent included in Tax Expenses by Landlord) and
chargeable to Tenant hereunder, excluding state, local and federal personal or
corporate income taxes measured by the net income of Landlord from all sources
and estate and inheritance taxes, whether or not now customary or within the
contemplation of the parties hereto, when:

 

3.4.1
said taxes are measured by or reasonably attributable to the cost or value of Tenant's equipment, furniture, fixtures and other personal property located in the Premises, or by the cost or value of any leasehold improvements made in or to the Premises by or for Tenant, to the extent the cost or value of such leasehold improvements exceeds the cost or value of a building standard build-out as determined by Landlord regardless
of whether title to such improvements shall be vested in Tenant or Landlord;

 

3.4.2 said taxes are assessed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion of the Project
(including the Parking Facilities); or

 

3.4.3 said taxes are assessed upon this transaction or any document to which
Tenant is a party creating or transferring an interest or an estate in
the Premises.

 

3.5 Late Charges. If any installment of Rent or any other sum due from Tenant
shall not be received by Landlord or Landlord's designee
by the due date therefor,
then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the amount due plus any attorneys' fees incurred by Landlord by reason of Tenant's failure to pay
Rent and/or other charges when due hereunder. The late charge shall be deemed
Additional Rent and the  right to require it shall be in addition to all of
Landlord's other rights and remedies hereunder, at law and/or in
equity and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner. In addition to the late
charge described above, any Rent or other amounts owing hereunder which are not
paid by the date that
they are due shall thereafter bear interest until paid at a rate (the "Interest Rate") equal to the lesser of (i) the "Prime Rate" or
"Reference Rate" announced from time to time by the Bank of America (or such
reasonable comparable national banking institution as selected by Landlord in
the event Bank of America ceases to exist or publish a Prime
Rate or Reference Rate), plus four percent (4%), or (ii) the highest rate permitted by applicable law. Notwithstanding the foregoing, in the
first instance each calendar year
wherein Tenant is late in making a payment to Landlord of Rent or any other sums
payable by Tenant hereunder, the foregoing late charge shall not be assessed
until five (5) days after such Rent or other amount is past due.

 

3.6 Audit. After delivery to Landlord of at least thirty (30) days' prior
written notice delivered
no later than one hundred twenty (120) days after receipt of a Statement, Tenant, at its sole cost and expense through any accountant designated by it,
shall have the right to examine
and/or audit the books and records evidencing such costs and expenses for the previous one (1) calendar year, during Landlord's reasonable business hours but not more frequently than once during any calendar year. Any such accounting firm designated by Tenant may not be compensated on a contingency fee basis. The results of any such audit (and any negotiations between the parties related
thereto) shall be maintained strictly confidential by Tenant and its accounting
firm and shall not be disclosed, published or otherwise disseminated to any
other party other than to Landlord and its authorized agents. Landlord and
Tenant each shall use its best efforts to cooperate in such negotiations and to
promptly resolve any discrepancies between Landlord and Tenant in the accounting
of such costs and expenses. If Tenant fails to timely deliver written notice of
Tenant's desire to audit a Statement pursuant to this Section 4.6 or Tenant
fails to commence and complete such audit within six (6) months after Landlord’s
delivery of the Statement in question, then Tenant shall be deemed to have
approved of such Statement and such Statement shall be final and binding
upon Tenant.

 

ARTICLE 5

 

USE OF PREMISES

 

Tenant shall use the Premises solely for general office purposes consistent with the character of the Building,
and Tenant shall not use or permit the Premises to be used for any other purpose
or purposes whatsoever. Tenant further covenants and agrees that it shall not
use, or suffer or permit any person or persons to
use, the Premises or any part thereof for any use or purpose contrary to the provisions of Exhibit D, attached hereto, or in violation of the laws of the United States of America, the state in which the Project is located, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction
over the Project. Tenant shall comply with all recorded covenants, conditions,
and restrictions,
and the provisions of all ground or underlying leases, now or hereafter affecting the Project. Tenant shall not use or allow another person or entity to use any part of the Premises for the storage, use, treatment, manufacture or sale of "Hazardous Material," as that term is defined below; provided, however, Tenant may use nominal amounts of typical cleaning supplies, office supplies and janitorial supplies which are not reportable under any environmental laws. As used herein, the term "Hazardous Material" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the state in which the Project is located or the United States Government. Tenant, at its sole cost and expense, covenants and warrants to promptly investigate, clean
up, remove, restore and otherwise remediate (including, without limitation,
preparation of
any feasibility studies or reports and the performance of any and all closures) any spills, releases or discharges of Hazardous Materials arising from or related to the acts or omissions of Tenant or Tenant's agents, employees, contractors, invitees or licensees such that the affected portions of the Project and any adjacent property are returned to the condition existing prior to the spill, release or discharge of such Hazardous Materials.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

ARTICLE 6

 

SERVICES AND UTILITIES

 

3.1
Standard Tenant Services. Landlord shall provide the following services on all days during the Lease
Term, unless otherwise stated below.

 

3.1.1
Subject to reasonable changes implemented by Landlord and to all governmental rules, regulations and guidelines applicable thereto, Landlord shall provide heating and air conditioning when necessary for
normal comfort for normal office use in the Premises, from Monday through
Friday, during the period from 7:00

a.m. to 6:00 p.m., except for the date of observation of New Year's Day,
Presidents' Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day and other locally or nationally recognized holidays as designated
by Landlord (collectively, the "Holidays"). Landlord acknowledges that Tenant
may require HVAC and electricity for the portion of the Premises other than the
Server Room (defined below) during hours both before and after the Building
Hours and, subject to the terms of this Lease and any rules, regulations
and procedures reasonably adopted by Landlord, Landlord agrees that such services shall be made available to Tenant and the Premises before and after Building Hours, at Tenant's sole cost. The initial hourly rate for HVAC after Building Hours
is $65.00 (with a minimum of two (2) hours), which hourly rate is subject to
change at any time
upon written notice from Landlord based upon reasonable changes in costs to Landlord in providing such after hours HVAC.

 

3.1.2
Landlord shall provide adequate electrical wiring and facilities and power for normal general
office use as reasonably determined by Landlord.

 

3.1.3 As part of Operating Expenses or Utilities Costs (as reasonably determined
by Landlord), Landlord shall replace lamps, starters and ballasts for Building standard lighting fixtures within the Premises. Tenant
shall bear the cost of replacement of lamps, starters and ballasts for
non-Building standard lighting fixtures within the Premises.

 

3.1.4

Landlord shall provide city water for drinking, lavatory and toilet purposes.

 

3.1.5 Landlord shall provide janitorial services five (5) days per week, except
the
date of observation of the Holidays, in and about the Premises and window washing services in a manner consistent with other
comparable "Class A" buildings in the vicinity of the Project.

 

3.1.6

Landlord shall provide nonexclusive automatic passenger elevator service at
all times.

 

 

 

Landlord.

3.1.7

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

Landlord shall provide nonexclusive freight elevator service subject to
scheduling by

 

 

 

3.2 Overstandard Tenant Use. Except in relation to Tenant's computer equipment
in the Server Room Tenant shall not, without Landlord's prior written consent,
use heat-generating machines, machines
other than normal fractional horsepower office machines, or equipment or lighting other than building standard lights in the Premises, which may affect the temperature otherwise maintained by the air conditioning system or increase the water normally furnished for the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease. If such consent is given, Landlord shall have the right to install supplementary air conditioning units or other facilities in the Premises, including supplementary or additional metering devices, and the cost thereof, including the cost of installation, operation and maintenance, increased wear and tear on existing equipment and other similar charges, shall be paid by Tenant to Landlord upon billing by Landlord. If Tenant uses water or heat or air conditioning in excess of that supplied by Landlord pursuant to Section 6.1 of this Lease, or if Tenant's consumption of electricity shall
exceed two (2) watts connected load per square foot of rentable area of the
Premises, calculated on
a monthly basis for the hours described in Section 6.1.1 above, Tenant shall pay to Landlord, within ten (10) business days after billing and as additional rent, the cost of such excess consumption, the cost of the installation, operation, and maintenance of equipment which is installed in order to supply such excess consumption, and the cost of the increased wear and tear on existing equipment caused by such excess consumption; and Landlord may install devices to separately meter any increased use, and in such event Tenant shall pay, as additional rent, the increased cost
directly to Landlord, within ten (10) days after demand, including the cost of
such additional
metering devices. If Tenant desires to use heat, ventilation or air conditioning during hours other than those for which Landlord is obligated to supply such utilities pursuant to the terms of Section 6.1 of this Lease, (i) Tenant shall give Landlord such
prior notice, as Landlord shall from time to time establish as appropriate, of
Tenant's desired use (with a
2 hour minimum), (ii) Landlord shall supply such heat, ventilation or air conditioning to Tenant at such hourly cost to Tenant
referenced above, and (iii) Tenant shall pay such cost on a monthly invoicing
basis, as additional rent.

 

3.3 Interruption of Use. Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building or Project after reasonable
effort to do so, by any accident or casualty whatsoever, by act or default of
Tenant or other parties,
or by any other cause beyond Landlord's reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant's use and possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's
business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure
to furnish any of the services or utilities as set forth in this Article 6.
Notwithstanding anything to the

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

contrary contained herein, Tenant shall be entitled to abate Base Rent due
hereunder, to the  extent that
utility services to the Premises are interrupted or suspended solely as a result of Landlord's or its authorized representatives'
gross negligence or willful misconduct, for a period of ten (10) or more
consecutive
business days, provided that Tenant is prevented from using the Premises as a result thereof.

 

3.4 Additional Services. Landlord shall also have the exclusive right, but not
the obligation,  to provide any additional services which may be requested by
Tenant, including, without limitation,
 locksmithing, lamp replacement, additional janitorial service, and additional repairs and maintenance, provided that Tenant shall pay
to Landlord upon billing, the sum of all costs to Landlord of such additional
services plus an
administration fee. Charges for any utilities or services for which Tenant is required to pay from time to time hereunder, shall be deemed
Additional Rent hereunder and shall be billed on a monthly basis.

 

3.5 Server Room. Landlord and Tenant acknowledge that a portion of the Premises
may be used as a server room (the "Server Room") which may require electricity
and HVAC services twenty-four (24) hours
per day, three hundred sixty-five (365) days per year. In the event that Tenant elects to use a portion of the Premises as a Server Room, (i) Landlord agrees that, subject to the terms of this Lease, Landlord shall provide Tenant and the Server
Room with such services, at Tenant's sole cost and expense, (ii) Tenant shall
install, at Tenant's sole
cost and expense, HVAC to the Server Room and a separate monitoring device to measure such Server Room usage and Tenant shall pay all such costs of usage pursuant to regular monthly invoicing, and (iii) notwithstanding any other term of this Lease, Tenant shall be responsible for the maintenance, repair and replacement of any such HVAC at Tenant’s
sole cost and expense.

 

3.6 Separate Metering; Compliance with Energy Regulations. Notwithstanding
anything
to the contrary herein, Landlord shall have the right to cause some or all of the electricity, water and/or other utilities provided
to the Premises to be separately metered, and Tenant shall pay for the cost of
all such utilities
so separately metered, or which are billed directly to Tenant, within ten (10) business days after invoice. Tenant acknowledges that Landlord and/or Tenant may from time to time be requested in writing or required to obtain, report and/or disclose certain energy consumption information with regard to the Premises, which may include, without limitation, benchmarking data for the U.S. Environmental Protection Agency's ENERGY STAR® Portfolio Manager and information relating to compliance with "green building" initiatives, including, if applicable, the Leadership in Energy & Environmental Design (LEED) certification program. Tenant shall throughout the Term of this Lease, comply with all Federal, State or local laws, rules and regulations relating to consumption of utilities, energy or energy efficiency (as they may be in enacted or in effect from time to time,
“Energy Regulations”), and Tenant shall, upon written request by Landlord or Landlord’s lender, deliver and/or disclose such information regarding the consumption
of utilities at the Premises as may be required to comply with applicable Energy
Regulations. Further, Tenant authorizes Landlord to disclose such information and data regarding the Premises as may be requested or required
from time to time to comply with Energy Regulations.

 

ARTICLE 7

 

REPAIRS

 

3.1 Tenant's Repairs. Subject to Landlord's repair obligations in Sections 7.2
and 11.1
below, Tenant shall, at Tenant's own expense, keep the Premises, including all improvements, fixtures and furnishings therein, in good
order, repair and condition at all times during the Lease Term, which repair
obligations shall include, without limitation, the obligation to promptly and
adequately repair all damage to the Premises and replace or
repair all damaged or broken fixtures and appurtenances; provided however, that, at Landlord's option, or if Tenant fails to make
such repairs after reasonable written notice from Landlord to Tenant, Landlord
may, but need not, make such repairs and replacements, and Tenant shall pay
Landlord the cost thereof, including a percentage of the
cost thereof (not to exceed ten percent (10%)) sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or expenses arising from Landlord's involvement with such repairs and replacements forthwith upon being
billed for same.

 

3.2 Landlord's Repairs. Anything contained in Section 7.1 above to the contrary
notwithstanding, and subject to Articles 11 and 12 of this Lease, Landlord shall repair and maintain the exterior landscaping, Common Areas, structural portions of the Building, including the foundations, roof, basic plumbing, heating, ventilating, air conditioning, electrical and fire/life safety systems serving the Building and not located in the Premises; provided, however, if such maintenance and repairs are caused in part or in whole by the act, neglect, fault of or omission of any
duty by Tenant, its agents, servants, employees or invitees, Tenant shall pay to
Landlord as additional rent, the reasonable cost of such maintenance and
repairs. Landlord shall not be liable for any failure to make
any such repairs, or to perform any maintenance. There shall be no abatement of rent and no liability of Landlord by reason of
any injury to or interference with Tenant's business arising from the making of
any repairs,
alterations or improvements in or to any portion of the Project, Building or the Premises or in or to fixtures, appurtenances and equipment
therein. Tenant hereby waives and releases its right to make
repairs  at  Landlord's  expense under Sections 1941 and 1942 of the California Civil Code; or under any similar law, statute, or ordinance now or hereafter
in effect.

 

ARTICLE 8

 

ADDITIONS AND ALTERATIONS

 

3.1 Landlord's Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises (collectively, the
"Alterations") without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
fifteen (15) days prior
to the commencement thereof, and which consent shall not be unreasonably withheld or delayed by Landlord; provided,

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

however, Landlord may withhold its consent in its sole and absolute discretion
with respect to any
Alterations which may affect the structural components of the Building or the Systems and Equipment or which can be seen from outside the Premises. Notwithstanding the foregoing, the installation by Tenant of a Wi-Fi Network shall be governed by the terms of Section 8.3 below. Tenant shall pay for all overhead, general conditions, fees and other costs
and expenses of the Alterations, and shall pay to Landlord a Landlord
supervision fee of ten percent (10%)
of the cost of the Alterations. The construction of the initial improvements to the Premises shall be governed by the terms
of the Tenant Work Letter and not the terms of this Article 8. Notwithstanding
the foregoing to
the contrary, Tenant may, at its sole cost and expense and without Landlord's written consent, perform interior, non-structural alterations or additions to the
Premises provided such alterations or additions do not affect the
structural components of the Building or Systems and Equipment or require any
permit or roof penetrations and the cost of which
does not exceed $75,000 in the aggregate over a 12 month period (the "Permitted Alterations"). Tenant shall first notify Landlord at least fifteen (15) days prior to commencing any Permitted Alterations so that Landlord may post a Notice
of Non-Responsibility on the Premises.

 

3.2 Manner of Construction. Landlord may impose, as a condition of its consent
to all Alterations or repairs of the Premises or about the Premises, such
requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors, materials, mechanics and materialmen approved by
Landlord; provided, however, Landlord may impose such requirements as Landlord
may determine, in its sole good faith business judgement, with respect to
any work affecting the structural components of the Building or Systems and Equipment (including designating specific contractors
to perform such work). Tenant shall construct such Alterations and perform such
repairs
in conformance with any and all applicable rules and regulations of any federal, state, county or municipal code or ordinance (including
California Energy Code, Title 24) and pursuant to a valid building permit,
issued by the city in which the Project is located, and in conformance with
Landlord's construction rules and regulations. In the event that any proposed
Alterations trigger the need for repairs, maintenance, improvements or
alterations outside of
the Premises for any reason, Tenant shall be solely responsible for the performance of all such work at Tenant's sole cost and expense.
Landlord's approval of the plans, specifications and working drawings for
Tenant's Alterations shall create no responsibility or liability on the part of
Landlord for their completeness, design sufficiency, or
compliance with all laws, rules and regulations of governmental agencies or authorities. All work with respect to any Alterations must be done in a good and workmanlike manner and diligently prosecuted to completion to the end that the Premises
shall at all times be a complete unit except during the period of work. In
performing the work of any such Alterations, Tenant shall have the work
performed in such manner as not to obstruct access to the Building  or Project
or the Common Areas for any other tenant of the Project, and as not to obstruct
the business of Landlord or other tenants of the Project, or interfere with the
labor force working at the Project. If  Tenant  makes any Alterations, Tenant
agrees to carry "Builder's All Risk" insurance covering the construction of such
Alterations, and such other insurance as Landlord may require, it being understood and agreed that all of such Alterations shall be insured
by Tenant pursuant to Article 10 of this Lease immediately upon completion
thereof. In
addition, Landlord may, in its reasonably discretion, require Tenant to obtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations and naming
Landlord as a co-obligee. Upon completion of any Alterations, Tenant shall (i)
cause a Notice
 of Completion to be recorded in the office of the Recorder of the county in which the Project is located in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, (ii) deliver to the management office of the Project a reproducible
copy of the "as built" drawings of the Alterations, and (iii)  deliver to
Landlord evidence of payment, contractors' affidavits and full and final waivers
of all liens for labor, services or materials.

 

3.3
Wi-Fi Network. Without limiting the generality of the foregoing, in the event Tenant desires to install
wireless intranet, Internet or any data or communications network ("Wi-Fi
Network") in the Premises
for the use by Tenant and its employees, then, to the extent permissible under applicable law, the same shall be subject to the provisions of this Section 8.3 (in addition to the other provisions of this Article 8). In the event Landlord consents
to Tenant's installation of such Wi-Fi Network, Tenant shall, in accordance with
Section 8.4 and Article 15 below, remove the Wi-Fi Network from the Premises
prior to the termination of the Lease. Tenant shall use
the Wi- Fi Network so as not to cause any interference to other tenants in the Building or to other tenants at the Project or with any other tenant's communication equipment, and not to damage the Building or Project or interfere with the normal operation of the Building or Project and Tenant hereby agrees to indemnify, defend and hold Landlord harmless from and against any and all claims, costs, damages, expenses and liabilities (including attorneys' fees) arising
out of Tenant's failure to comply with the provisions of this Section 8.3,
except to the extent same
is caused by the gross negligence or willful misconduct of Landlord and which is not covered by the insurance carried by Tenant
under this Lease (or which would not be covered by the insurance required to be
carried by Tenant
under this Lease). Should any interference occur, Tenant shall take all necessary steps as soon as reasonably possible and no later
than three (3) calendar days following such occurrence to correct such
interference. If such interference continues after such three (3) day period,
Tenant shall immediately cease operating such Wi-Fi Network
until such interference is corrected or remedied to Landlord's satisfaction. Tenant acknowledges that Landlord has granted and/or
may grant telecommunication rights to other tenants and occupants of the
Building and
to telecommunication service providers and in no event shall Landlord be liable to Tenant for any interference of the same
with such Wi-Fi Network. Landlord makes no representation that the Wi-Fi Network
will be able to receive
or transmit communication signals without interference or disturbance. Tenant shall (i) be solely responsible for any damage caused as a result of the Wi-Fi Network, (ii) promptly pay any tax, license or permit fees charged pursuant to any laws or regulations in connection with the installation, maintenance or use of the Wi-Fi Network and comply with all
precautions and safeguards recommended by all governmental authorities, (iii)
pay for all
necessary repairs, replacements to or maintenance of the Wi-Fi Network, and (iv) be responsible for any modifications, additions or repairs
to the Building or Project, including without limitation, Building or Project
systems or
infrastructure which are required by reason of the installation, operation or removal of Tenant's Wi-Fi Network. Should Landlord be required
to retain professionals to research any interference issues that may arise and
to confirm
 Tenant's compliance with the terms of this Section 8.3, Landlord shall retain such professionals at commercially reasonable

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

rates, and Tenant shall reimburse Landlord within twenty (20) days following submission to Tenant of an invoice from Landlord. This reimbursement obligation is independent of any rights or remedies Landlord may have in the event
of a breach or default by Tenant under this Lease.

 

3.4
Landlord's Property. All Alterations, improvements, fixtures (other than Tenant's trade fixtures that may be removed without damage to the Premises) and/or equipment which may be installed or placed in or about
the Premises, including any cabling and wiring associated with the Wi-Fi
Network, and all signs installed in, on or about the Premises, from time to
time, shall be at the sole cost of Tenant and shall be and become
the property of Landlord. Furthermore, Landlord may require that Tenant remove
any improvement or Alteration (including any cabling and wiring associated with
the Wi-Fi Network) upon the expiration or early termination of the
Lease Term, and repair any damage to the Premises and Building caused by such removal; provided, Landlord shall advise Tenant at the time of granting consent if Landlord requires such Alterations to be removed at the expiration or earlier
termination of the Lease. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations (including any
cabling and wiring associated with the Wi-Fi Network), Landlord may do so and
may charge the cost thereof to Tenant (together with a five percent (5%)
supervision/administration fee), and Tenant shall pay such cost to Landlord
within thirty (30) days of being billed for the same.

 

ARTICLE 9

 

COVENANT AGAINST LIENS

 

Tenant has no authority or power to cause or permit any lien or encumbrance of any kind whatsoever, whether
created by act of Tenant, operation of law or otherwise, to attach to or be
placed upon the
Project, Building or Premises, and any and all liens and encumbrances created by Tenant shall attach to Tenant's interest only. Landlord shall have the right at all times to post and keep posted on the Premises any notice which it deems necessary
for protection from such liens. Tenant covenants and agrees not to suffer or
permit any lien
of mechanics or materialmen or others to be placed against the Project, the Building or the Premises with respect to work or services
claimed to have been performed for or materials claimed to have been furnished
to Tenant or
the Premises, and, in case of any such lien attaching or notice of any lien, Tenant covenants and agrees to cause it to be immediately
released and removed of record. Notwithstanding anything to the contrary set
forth in this Lease, if any such lien is not released and removed on or before
the date that is ten (10) days after notice of such lien is delivered by
Landlord to Tenant, Landlord, at its sole option, may immediately take all
action necessary to release and remove such lien, without any duty to
investigate the validity thereof, and all sums, costs and expenses,
including reasonable attorneys' fees and costs, incurred by Landlord in
connection with such lien shall be deemed Additional Rent under this Lease and
shall immediately be due and payable by Tenant.

 

ARTICLE 10

 

INDEMNIFICATION AND INSURANCE

 

3.1 Indemnification and Waiver. Tenant hereby assumes all risk of damage to
property and injury to persons, in, on, or about the Premises and/or Parking
Facilities or the fitness center located on the Project
from any cause whatsoever and agrees that Landlord, and its partners and subpartners, and their respective officers, agents, property managers, servants, employees, and independent contractors (collectively, "Landlord Parties") shall not be liable for, and are hereby released from any responsibility for, any damage to property or injury to persons or resulting from the loss of use thereof, which damage or injury is sustained by Tenant, Tenant's employees, agents, contractors,
invitees or by other persons claiming through Tenant. Tenant shall indemnify,
defend, protect, and hold harmless the Landlord Parties from any and all loss,
cost, damage, expense and liability (including  without limitation court costs
and reasonable attorneys' fees) incurred in connection with or arising from any
cause in,
on or about the Premises (including, without limitation, Tenant's installation, placement and removal of Alterations, improvements, fixtures and/or equipment in, on or about the Premises) or the fitness center located on the Project, and any acts, omissions or negligence of Tenant or of any person claiming by, through or under Tenant, or of the contractors, agents, servants, employees, licensees or invitees of Tenant or any such person, in, on or about the Premises,
the fitness center located on the Project, the Building and Project; provided,
however, that the terms
of the foregoing indemnity shall not apply to the gross negligence or willful misconduct of Landlord. The provisions of this
Section 10.1 shall survive the expiration or sooner termination of this Lease.

 

3.2 Tenant's Compliance with Landlord's Fire and Casualty Insurance. Tenant
shall, at Tenant's expense, comply as to the Premises with all insurance company
requirements pertaining to the use of the  Premises. If Tenant's conduct or use
of the Premises for other than ordinary office use causes any increase in the
premium for such insurance policies, then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall
comply with all rules, orders, regulations or requirements of the American
Insurance Association (formerly the National Board of Fire Underwriters) and
with any similar body.

 

3.3

Tenant's Insurance. Tenant shall maintain the following coverages in the
following amounts.

 

3.3.1
Commercial General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage arising out of Tenant's operations, assumed liabilities or use of the Premises, including a Broad Form Commercial General Liability endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10.1 of this Lease, (and with owned and non-owned automobile liability
coverage, and liquor liability coverage in the event alcoholic beverages are
served on the Premises) for limits of liability not less than:

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

 

 

Bodily Injury and    Property Damage Liability

 

$5,000,000 each occurrence

$5,000,000 annual aggregate

 

Personal Injury Liability

 

$5,000,000 each occurrence

$5,000,000 annual aggregate

 

3.3.2 Physical Damage Insurance covering (i) all furniture, trade
fixtures, equipment, merchandise and all other items of Tenant's property on the Premises installed by, for, or at the expense of Tenant, and
(ii) all improvements, alterations and additions to the Premises, including any
improvements, alterations or additions installed at Tenant's request above the
ceiling of the Premises or below the floor of the Premises. Such insurance shall
be written on a "physical loss or damage" basis under a "special form" policy,
for
the full replacement cost value new without deduction for depreciation of the covered items and in amounts that meet any co-insurance
clauses of the policies of insurance and shall include a vandalism and malicious
mischief endorsement, sprinkler leakage coverage and earthquake sprinkler
leakage coverage.

 

3.3.3

Workers' compensation insurance as required by law.

 

3.3.4
Loss-of-income, business interruption and extra-expense insurance in such amounts as will
reimburse Tenant for direct and indirect loss of earnings attributable to all
perils commonly insured
against by prudent tenants or attributable to prevention of loss of access to the Premises or to the Building as a result of such perils.

 

3.3.5 Tenant shall carry comprehensive automobile liability insurance having
a combined single limit of not less than Two Million Dollars ($2,000,000.00) per
occurrence and insuring
Tenant  against liability for claims arising out of ownership,
maintenance or use of any owned, hired or non-owned automobiles.

 

3.3.6 The minimum limits of policies of insurance required of Tenant under this
Lease shall in no event limit the liability of Tenant under this Lease. Such
insurance shall: (i) name Landlord, and any other party with a material
connection to the Premises it so specifies, as an additional insured; (ii)
specifically cover
the liability assumed by Tenant under this Lease, including, but not limited to, Tenant's obligations under Section 10.1 of this Lease;
(iii) be issued by an insurance company having a rating of not less than A-;
VIII in Best's Insurance
Guide or which is otherwise acceptable to Landlord and licensed to do business in the state in which the Project is located;

(iv)
be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is excess and
is non-contributing with any insurance requirement of Tenant; (v) contain a
cross-liability endorsement or severability of interest clause acceptable
to  Landlord;  and  (vi)  with  respect  to  the  insurance  required
 in Sections 10.3.1 and 10.3.2 above, have deductible amounts not exceeding Fifty Thousand Dollars ($50,000.00). Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the
Lease Commencement Date and prior to the expiration dates thereof. In the event
Tenant receives notice of any cancellation,
nonrenewal or modification of insurance coverage from any insurer, Tenant shall send such notice to Landlord within five (5) business days of receipt. If Tenant shall fail to procure such insurance, or to deliver such policies or certificate, within such time periods, Landlord may, at its option, in addition to all of its other rights and remedies under this Lease,
and without regard to any notice and cure periods set forth in Section 19.1,
procure such policies
for the account of Tenant, and the cost thereof shall be paid to Landlord as Additional Rent within ten (10) days after delivery
of bills therefor.

 

4.1 Subrogation. Landlord and Tenant agree to have their respective insurance
companies issuing property damage insurance waive any rights of subrogation that
such companies may have against Landlord or Tenant, as the case may be, so long
as the insurance carried by Landlord and Tenant, respectively, is
not invalidated thereby. Landlord and Tenant hereby waive any right that either
may have against the other on account of any  loss or damage to their respective
property to the extent such loss or damage is insurable under policies of
insurance for fire and all risk coverage, theft, public liability, or other
similar insurance.

 

4.2 Additional Insurance Obligations.  Tenant shall carry and maintain during
the entire Lease
 Term, at Tenant's sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts
covering the Premises and Tenant's operations therein, as may be reasonably requested by Landlord, provided such additional insurance
is consistent with the amounts and types of insurance then being required by
reasonably prudent landlords of comparable buildings in the vicinity of the
Building or as otherwise required by Landlord's lenders.

 

ARTICLE 11

 

DAMAGE AND DESTRUCTION

 

4.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
notify  Landlord  of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly
and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord's reasonable control, and subject to all other terms of this Article 11, restore the base, shell, and core of the Premises and such Common Areas.
Such restoration shall be to substantially the same condition of the base,
shell, and core of the Premises and Common Areas prior to the casualty, except
for modifications required by zoning and building codes and
other laws or by the holder of a mortgage on the Building and/or Project, or the lessor of a ground or underlying lease with

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

respect to the Project and/or the Building, or any other modifications to the Common Areas deemed desirable by Landlord,
provided access to the Premises and any common restrooms serving the Premises
shall not
be materially impaired. Notwithstanding any other provision of this Lease, upon the occurrence of any damage to the Premises, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under Section 10.3 of this Lease, and Landlord shall
repair any injury or damage to the tenant improvements and alterations installed
in the Premises and shall return such tenant
improvements and alterations to their original condition; provided that if the cost of such repair by Landlord exceeds the amount of insurance proceeds received by Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior to Landlord's repair of the damage. Notwithstanding anything to the contrary herein, in no event shall Landlord be obligated to repair or restore any specialized or dedicated equipment
serving Tenant, such as any cabling, wiring, supplemental utility system,
telephone system or wireless/Wi-Fi Network. In connection with such repairs and
replacements, Tenant shall, prior
to the commencement of construction, submit to Landlord, for Landlord's review and approval, all plans, specifications and
working drawings relating thereto, and Landlord shall select the contractors to
perform such
improvement work. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's business resulting in any way from such damage or the repair thereof; provided however, that if such fire or other casualty
shall have damaged the Premises or Common Areas necessary to Tenant's occupancy,
Landlord
shall allow Tenant a proportionate abatement of Base Rent and Tenant's Share of Operating Expenses, Tax Expenses and Utilities Costs, during the time and to the extent the Premises are unfit for occupancy for the purposes permitted under
this Lease, and not occupied by Tenant as a result thereof.

 

4.2 Landlord's Option to Repair. Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises, the
Building and/or any other portion of the Project
and instead terminate this Lease by notifying Tenant in writing of such termination within sixty (60) days after the date of damage, such notice to include a termination date giving Tenant ninety (90) days to vacate the Premises, but Landlord may so elect only if the Building shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) repairs cannot reasonably be completed within one hundred eighty (180) days of the date of damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Project or ground or underlying lessor with respect to the Project and/or the Building shall have the right to require that the insurance proceeds or any
portion thereof be used to retire the mortgage debt, or shall terminate the
ground or underlying lease, as the case may be and shall exercise that right; or
(iii) the damage is not fully covered, except for deductible
amounts, by Landlord's insurance policies. In addition, if the Premises or the
Building is destroyed or damaged to any substantial extent during the last
twelve (12) months of the Lease Term, then notwithstanding anything contained in
this Article 11, Landlord or Tenant shall have the option to terminate this Lease by giving written notice to Tenant of the exercise of such option within thirty (30) days after such damage or destruction, in which event this Lease shall cease and terminate as of the date of such notice. Upon any such termination of this Lease pursuant to this Section
11.2, Tenant shall pay the Base Rent and Additional Rent, properly apportioned
up to such
date of termination, and both parties hereto shall thereafter be freed and discharged of all further obligations hereunder, except
as provided for in provisions of this Lease which by their terms survive the
expiration or earlier termination of the Lease Term.

 

4.3 Waiver of Statutory Provisions. The provisions of this Lease, including this
Article
11, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any
part of the Premises, the Building or any other portion of the Project, and any
statute or regulation of the
state in which the Project is located, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement
between the parties, and any other statute or regulation, now or hereafter in
effect, shall
have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or any other portion
of the Project.

 

ARTICLE 12

 

CONDEMNATION

 

4.1 Permanent Taking. If the whole or any part of the Premises, Building or
Project shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the
use, reconstruction or remodeling of any part of the Premises, Building or Project, or if Landlord
shall grant a deed or other instrument in lieu of such taking by eminent domain
or
condemnation, Landlord shall have the option to terminate this Lease upon ninety (90) days' notice, provided such notice is given no later than one hundred eighty (180) days after the date of such taking, condemnation, reconfiguration, vacation, deed or other instrument. If more than twenty-five percent (25%) of the rentable square feet of the Premises is taken, or if access to the Premises is substantially impaired, Tenant shall have the option to terminate this Lease upon ninety

(90) days' notice, provided such notice is given no later than one hundred eighty (180) days after the date of such taking.
Landlord shall be entitled to receive the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant's personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms of this Lease, and for moving expenses, so long as such claim does not diminish the award available to Landlord, its ground
lessor with respect to the Project or its mortgagee, and such claim is payable
separately to Tenant. All Rent shall be apportioned as of the date of such
termination, or the date of such taking, whichever shall first occur.
If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Base Rent and Tenant's Share of Operating
Expenses, Tax Expenses and Utilities Costs shall be proportionately abated.
Tenant hereby
waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

4.2 Temporary Taking. Notwithstanding anything to the contrary contained in this
Article 12, in the event of a temporary taking of all or any portion of the
Premises for a period of one hundred and eighty
(180) days or less, then this Lease shall not terminate but the Base Rent and Tenant's Share of Operating Expenses, Tax Expenses and Utilities Costs shall be abated for the period of such taking in proportion to the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be
entitled to receive the entire award made in connection with any such
temporary taking.

 

ARTICLE 13

 

COVENANT OF QUIET ENJOYMENT

 

Landlord covenants that Tenant, on paying the Rent, charges for services and other payments herein reserved
and on keeping, observing and performing all the other terms, covenants,
conditions, provisions and agreements herein contained on the part of Tenant to
be kept, observed and performed, shall, during the Lease Term, peaceably and
quietly have, hold and enjoy the Premises subject to the terms, covenants,
conditions,
provisions and agreements hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing covenant
is in lieu of any other covenant express or implied.

 

ARTICLE 14

 

ASSIGNMENT AND SUBLETTING

 

4.1
Transfers. Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder,
permit any assignment or other such foregoing transfer of this Lease or any
interest hereunder by operation of law, sublet the Premises or any part thereof,
or permit the use of the Premises by any persons other than Tenant and its
employees (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to
as a "Transferee"). If Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify Landlord in writing, which
notice (the "Transfer Notice") shall include (i) the proposed effective date of
the Transfer, which shall
not be less than twenty (20) days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
"Subject Space"), (iii) all of
the terms of the proposed Transfer, the name and address of the proposed Transferee, and a copy of all existing and/or proposed
documentation pertaining to the proposed Transfer, including all existing
operative documents
to be executed to evidence such Transfer or the agreements incidental or related to such Transfer, (iv) current financial statements
of the proposed Transferee certified by an officer, partner or owner thereof,
and (v) such other information as Landlord may reasonably require. Any Transfer
made without Landlord's prior written
consent shall, at Landlord's option, be null, void and of no effect, and shall, at Landlord's option, constitute a default by Tenant under this Lease. Each time Tenant requests Landlord's consent to a proposed Transfer, whether or not Landlord shall
grant consent, within thirty (30) days after written request by Landlord, as
Additional Rent
hereunder, Tenant shall pay to Landlord One Thousand Five Hundred Dollars ($1,500.00) to reimburse Landlord for its review and processing fees, and Tenant shall also reimburse Landlord for any reasonable legal fees incurred by Landlord in connection
with Tenant's proposed Transfer. Notwithstanding anything to the contrary
contained in this  Section 14.1, so long as Tenant delivers to Landlord (i) at
least fifteen (15) business days prior written notice of
its intention to assign or sublease the Premises to any Permitted Transferee, which notice shall set forth the name of the Permitted
Transferee, (ii) a copy of the proposed agreement pursuant to which such
assignment or sublease
shall be effectuated, and (iii) such other information concerning the Permitted Transferee as Landlord may reasonably require, including without limitation, information regarding any change in the proposed use of any portion of the Premises
and any financial information with respect to such Permitted Transferee, and so
long as (a) any change in the proposed use of the subject portion of the
Premises is in conformance with the uses permitted to be
made under this Lease and do not involve the use or storage of any Hazardous Materials (other than nominal amounts of ordinary household cleaners, office supplies and janitorial supplies which are not regulated by any environmental laws), and (b) the Permitted Transferee has a tangible net worth and net income, in the aggregate, computed in accordance
with standard commercial real estate accounting practices (but excluding
goodwill as an asset),
which is equal to or greater than Tenant as of the date of this Lease, then Tenant may assign this Lease or sublease any portion of the Premises (1) to any Related Entity, or (2) in connection with any merger, consolidation or sale of substantially
all of the assets of Tenant, without having to obtain the prior written consent
of Landlord
thereto (each such transfer shall be referred to herein as a "Permitted Transfer" and each transferee pursuant to a Permitted Transfer
shall be referred to herein as a "Permitted Transferee" ). Any Permitted
Transfer shall in no
way relieve Tenant of any liability Tenant may have under this Lease and such assignee or sublessee shall be jointly and severally
liable with Tenant hereunder. For purposes of this Section 14.1, the term
"Related Entity" shall
mean any entity controlled by, under control with, or in control of Tenant. The term "control" as used in the immediately preceding
sentence shall mean having direct ownership of fifty percent (50%) or more of
the ownership interests of an entity and having the ability to direct the
management and policies of such entity.

 

4.2 Landlord's Consent. Landlord shall not unreasonably withhold its consent to
any
 proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice. The parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any
proposed Transfer where one or more of the following apply, without limitation
as to other reasonable grounds for withholding consent:

 

4.2.1
The Transferee is of a character or reputation or engaged in a business which is not consistent
with the quality of the Building or Project;

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

 

under this Lease;

4.2.2

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

The Transferee intends to use the Subject Space for purposes which are not permitted

 

 

 

4.2.3

The Transferee is either a governmental agency or instrumentality thereof;

 

4.2.4 The Transfer will result in more than a reasonable and safe number of
occupants per floor within the Subject Space;

 

4.2.5 The Transferee is not a party of reasonable financial worth and/or
financial
stability that has and will continue to have sufficient financial strength to perform all of the remaining obligations of Tenant under the Lease (or under the sublease in the case of a sublease) from and after the date of transfer, as reasonably determined
by Landlord taking into account all relevant facts and circumstances;

 

4.2.6
The proposed Transfer would cause Landlord to be in violation of another lease or agreement
to which Landlord is a party, or would give an occupant of the Project a right
to cancel its lease;

 

4.2.7
The terms of the proposed Transfer will allow the Transferee to exercise a right of renewal,
right of expansion, right of first offer, or other similar right held by Tenant
(or will allow the Transferee to occupy space leased by Tenant pursuant to any
such right);

 

4.2.8
Either the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee, (i) is negotiating with Landlord to lease space in the Project at such time, or (ii) has negotiated with Landlord during the nine (9) month period immediately
preceding the Transfer Notice; or

 

4.2.9
The Transfer occurs at a time that less than eighty-five percent (85%) of the rentable square feet of the Project is leased and the rent charged by Tenant to such Transferee during the term of such Transfer,
calculated by using a present value analysis, is less than eighty-five percent
(85%) of the rent
being quoted by Landlord at the time of such Transfer, for comparable space in the Project for a comparable term, calculated using
a present value system.

 

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's consent, but not later than the expiration of said six-month period, enter into such Transfer of the Premises
or portion thereof, upon substantially the same terms and conditions as are set
forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section
14.1 of this Lease, provided that if there are any changes
in the terms and conditions from those specified in the Transfer Notice (i) such that Landlord would initially have been entitled
to refuse its consent to such Transfer under this Section 14.2, or (ii) which
would cause the proposed Transfer to be more favorable to the Transferee than
the terms set forth in Tenant's original Transfer
Notice, Tenant shall again submit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord's
right of recapture, if any, under Section 14.4 of this Lease).

 

4.3
Transfer Premium. If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any "Transfer Premium," as that term
is defined in this Section 14.3, received by Tenant from such Transferee.
"Transfer Premium" shall
mean all rent, additional rent or other consideration payable by such Transferee in excess of the Rent and Additional Rent payable
by Tenant under this Lease on a per rentable square foot basis if less than all
of the Premises is transferred, after deducting the reasonable expenses incurred
by Tenant for (i) any reasonable changes,
alterations and improvements to the Premises in connection with the Transfer (but only to the extent approved by Landlord), and

(ii) any reasonable brokerage commissions and reasonable legal fees in
connection with the
Transfer. "Transfer Premium" shall also include, but not be limited to, key money and bonus money paid by Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to Transferee
or for assets, fixtures, inventory, equipment, or furniture transferred by
Tenant to
Transferee in connection with such Transfer. No Transfer Premium shall be due or payable with respect to a Transfer to a Permitted Transferee.

 

4.4 Landlord's Option as to Subject Space. Notwithstanding anything to the
contrary contained
in this Article 14, except in the case of Permitted Transfer Landlord shall have the option, by giving written notice to Tenant
within twenty (20) days after receipt of any Transfer Notice or any other
written notice of Tenant's intent to enter into a Transfer, to recapture the
Subject Space or, if the proposed Transfer is an assignment or sublease
of fifty percent (50%) or more of the Premises, the entirety of the Premises, as determined in Landlord's sole discretion. Such recapture notice shall cancel and terminate this Lease with respect to either the Subject Space or entire Premises, as applicable, as of the date stated in the Transfer Notice as the effective date of the proposed Transfer (with
respect to Landlord's recapture following receipt of a Transfer Notice), and
otherwise, such
termination shall be effective on the date that is sixty (60) days after Landlord's delivery of a recapture notice. If this Lease shall be canceled
with respect to less than the entire Premises, the Rent reserved herein shall be
prorated on the basis
of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same. If Landlord declines, or fails to elect in a timely manner to recapture the Subject Space or Premises under this Section 14.4, then, provided Landlord has consented
to the proposed Transfer, Tenant shall be entitled to proceed to transfer the
Subject Space to the proposed Transferee, subject to provisions of the last
paragraph of Section 14.2 of this Lease.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

4.5
Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and conditions of this Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after
execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, and (iv) no Transfer relating to this Lease or agreement entered into with respect thereto, whether with or without Landlord's consent, shall relieve Tenant or any guarantor of the Lease from liability under this Lease. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant directly relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting
any Transfer shall be found understated by more than three percent (3%), Tenant
shall, within thirty (30) days after demand, pay the deficiency and Landlord's
costs of such audit.

 

4.6
Additional Transfers. For purposes of this Lease, the term "Transfer" shall also include (i) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, of fifty percent (50%) or more of the partners, or transfer of twenty-five percent or more of partnership interests, within a twelve

(12) month period, or the dissolution of the partnership without immediate
reconstitution thereof, and (ii) if
 Tenant is a closely held corporation (i.e., whose stock is not publicly held and not traded through an exchange or over the counter),
(A) the dissolution, merger, consolidation or other reorganization of Tenant,
(B) the sale or
other transfer of more than an aggregate of fifty percent (50%) of the voting shares of Tenant (other than to immediate family members
by reason of gift or death), within a twelve (12)-month period, or (C) the sale,
mortgage, hypothecation or pledge of more than an aggregate of fifty percent
(50%) of the value of the unencumbered assets of Tenant within a twelve (12)
month period. No such deemed transfer shall give Landlord rights to recapture
the Premises or receive any Transfer Premium. Notwithstanding the foregoing
provisions of this Section 14.6, the sale of Tenant’s
common stock on a national stock exchange
shall not be deemed a Transfer pursuant to this Section 14.6.

 

ARTICLE 15

 

SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

 

4.1
Surrender of Premises. No act or thing done by Landlord or any agent or employee of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless
such intent is specifically acknowledged in a writing signed by Landlord. The
delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises
or effect a termination of this Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this
Lease shall have been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord
or not, or a mutual termination hereof, shall not work a merger, and at the
option of Landlord shall operate as an assignment to Landlord of all subleases
or subtenancies affecting the Premises.

 

4.2
Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession
of the Premises to Landlord in as good order and condition as when Tenant took
possession
and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear, casualty, condemnation, and repairs which
are specifically made the responsibility of Landlord hereunder excepted. Upon
such expiration  or termination, Tenant shall, without expense to Landlord,
remove or cause to be removed from the Premises
all debris and rubbish, and such items of furniture, equipment, free-standing cabinet work, and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and cabling, wiring or conduit (including any such cabling or wiring associated with the Wi-Fi Network, if any) which may have been placed at the Project or within the Building by or on behalf of Tenant (including any cabling or wiring installed above
the ceiling of the Premises or below the floor of the Premises), and such
similar articles of any other persons claiming under Tenant, as Landlord may, in
its sole discretion, require to be removed, and Tenant shall repair at its own
expense all damage to the Premises and Building resulting from such removal.

 

ARTICLE 16

 

HOLDING OVER

 

If Tenant holds over after the expiration of the Lease Term hereof, with or without the express or implied consent
of Landlord, such tenancy shall be a tenancy at sufferance only, and shall not
constitute a renewal
hereof or an extension for any further term, and in such case Base Rent shall be payable at a monthly rate equal to one hundred
fifty percent (150%) of the Base Rent applicable during the last rental period
of the Lease Term under this Lease.  Such tenancy shall be subject to every
other term, covenant and agreement contained herein.
 Landlord hereby expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided
in this Lease upon the expiration or other termination of this Lease. The
provisions of this Article 16 shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein or at
 law. If Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilities
to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord
harmless from all loss, costs (including reasonable attorneys' fees) and liability resulting from such failure, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender,
and any lost profits to Landlord resulting therefrom.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

ARTICLE 17

 

ESTOPPEL CERTIFICATES

 

Within ten (10) business days following a request in writing by Landlord, Tenant
shall execute and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be in the form as may be required
by any prospective mortgagee or purchaser of the Project (or any portion
thereof), indicating therein any
exceptions thereto that may exist at that time, and shall also contain any other information reasonably requested by Landlord or Landlord's
mortgagee or prospective mortgagee. Tenant shall execute and deliver whatever
other instruments  may be  reasonably required  for  such purposes.   If Tenant
fails to  deliver  such certificate  within three  (3)  days  after

Landlord's second (2nd) written request therefor, failure by Tenant to so deliver such estoppel certificate shall be a material
default of the provisions of this Lease.  In addition, Tenant shall be liable to
Landlord, and shall  indemnify

Landlord from and against any loss, cost, damage or expense, incidental, consequential, or otherwise, including attorneys'
fees, arising or accruing directly or indirectly, from any failure of Tenant to
execute or deliver to Landlord any such estoppel certificate.

 

ARTICLE 18

 

SUBORDINATION

 

This Lease is subject and subordinate to all present and future ground or underlying leases of the Project and to the lien of any mortgages or trust deeds, now or hereafter in force against the Project, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages or
trust deeds, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto. Tenant covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage, or if any ground or underlying lease is terminated, to attorn, without any deductions or set-offs whatsoever, to the purchaser
upon any such foreclosure sale, or to the lessor of such ground or underlying
lease, as the case may
be, if so requested to do so by such purchaser or lessor and to recognize such purchaser or lessor as the lessor under this Lease.
Tenant shall, within five (5) days of request by Landlord, execute such further
instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any
such mortgages, trust deeds, ground leases or underlying leases. Tenant waives
the provisions of any
current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale.

 

ARTICLE 19

 

TENANT'S DEFAULTS; LANDLORD'S REMEDIES

 

4.1
Events of Default by Tenant. All covenants and agreements to be kept or performed by Tenant under
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any reduction of Rent. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:

 

4.1.1 Any failure by Tenant to pay any Rent or any other charge required to be
paid under this Lease, or any part thereof, when due where such failure
continues for three (3) days after written notice
thereof from Landlord to Tenant; provided however, that any such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 or any similar or
successor law; or

 

4.1.2 Any failure by Tenant to observe or perform any other provision, covenant
or  condition of this Lease to be observed or performed by Tenant where such
failure continues for twenty (20) days after written notice thereof from
Landlord to Tenant; provided however, that any such notice shall be in lieu of,
and  not in addition to, any notice required under California Code of Civil
Procedure Section 1161 or any similar or successor law; and provided further
that if the nature of such default is such that the same cannot reasonably be
cured within a twenty (20) day period, Tenant shall not be deemed to be in
default if it diligently commences such cure within such period and thereafter
diligently proceeds to rectify and cure said default as soon as possible; or

 

4.1.3 Abandonment of the Premises by Tenant. Abandonment is herein defined to
include, but is not limited to, any absence by Tenant from the Premises for three (3) business days or longer while in default of any
material provision of this Lease.

 

4.2 Landlord's Remedies Upon Default. Upon the occurrence of any such default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity, the option to pursue any one or more of the
following remedies, each and all of which shall be cumulative and nonexclusive,
without any notice or demand whatsoever.

 

4.2.1 Terminate this Lease, in which event Tenant shall immediately surrender
the Premises to Landlord, and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
rent, enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following:

 

(i) The worth at the time of award of any unpaid rent which has been earned at
the time of such termination; plus

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

(ii)
The worth at the time of award of the amount by which the unpaid rent which would
have been earned after termination until the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided; plus

 

(iii)
The worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could have
been reasonably avoided; plus

 

(iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary
course of things would be likely to result therefrom, specifically including but not limited to, brokerage commissions and advertising
expenses incurred, expenses of remodeling the Premises or any portion thereof
for a new
tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant, including, without limitation,
any rent abatement; and

 

(v) At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable law.

 

The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature
required to be paid by Tenant pursuant to the terms of this Lease,  whether  to
 Landlord  or  to  others.  As  used
 in Sections 19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by allowing interest at the Interest Rate set forth in Section 4.5 of this Lease. As used in Section 19.2.1(iii) above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%).

 

4.2.2 Landlord shall have the remedy described in California Civil Code Section
1951.4 (lessor may continue lease in effect after lessee's breach and
abandonment and recover rent as it becomes due, if
lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate
this Lease on account of any default by Tenant, Landlord may, from time to time,
without
terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.

 

4.2.3 Landlord may, but shall not be obligated to, make any such payment or
perform or otherwise cure any such obligation, provision, covenant or condition on Tenant's part to be observed or performed (and
may enter the Premises for such purposes). In the event of Tenant's failure to
perform any of its obligations or covenants under this Lease, and such failure
to perform poses a material risk of injury or harm to persons or damage to or
loss of property, then Landlord shall have the right to cure or otherwise
perform such covenant or obligation at any time after such failure to perform by
Tenant, whether or not any such notice  or  cure  period set  forth
 in Section 19.1 above has expired. Any such actions undertaken by Landlord pursuant to the foregoing provisions of this Section 19.2.3 shall not be deemed a waiver of Landlord's rights and remedies as a result of Tenant's failure to perform
and shall not release Tenant from any of its obligations under this Lease.

 

4.3 Payment by Tenant. Tenant shall pay to Landlord, within fifteen (15) days
after delivery by Landlord to Tenant of statements therefor: (i) sums equal to
expenditures reasonably made and
obligations incurred by Landlord in connection with Landlord's performance or cure of any of Tenant's obligations pursuant to the provisions of Section 19.2.3 above; and (ii) sums equal to all expenditures made and obligations incurred by Landlord
in collecting or attempting to collect the Rent or in enforcing or attempting to
enforce any
rights of Landlord under this Lease or pursuant to law, including, without limitation, all legal fees and other amounts so expended. Tenant's obligations under this Section 19.3 shall survive the expiration or sooner termination of the Lease Term.

 

4.4 Sublessees of Tenant. Whether or not Landlord elects to terminate this Lease
on account
of any default by Tenant, as set forth in this Article 19, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises
or may, in Landlord's sole discretion, succeed to Tenant's interest in such
subleases, licenses, concessions or arrangements. In the event of Landlord's
election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right
to or interest in the rent or other consideration receivable thereunder.

 

4.5
Waiver of Default. No waiver by Landlord of any violation or breach by Tenant of any of the terms,
provisions and covenants herein contained shall be deemed or construed to
constitute a waiver of any other or later violation or breach by Tenant of the
same or any other of the terms, provisions, and covenants  herein contained.
Forbearance by Landlord in enforcement of one or more of the remedies herein
provided upon
a default by Tenant shall not be deemed or construed to constitute a waiver of such default. The acceptance of any Rent hereunder by Landlord following the occurrence of any default, whether or not known to Landlord, shall not be deemed
a waiver of any such default, except only a default in the payment of the Rent
so accepted.

 

4.6
Efforts to Relet. For the purposes of this Article 19, Tenant's right to possession shall not be deemed
to have been terminated by efforts of Landlord to relet the Premises, by its
acts of maintenance or preservation with respect to the Premises, or by
appointment of a receiver to protect Landlord's
interests hereunder. The foregoing enumeration is not exhaustive, but merely illustrative of acts which may be performed by Landlord without
terminating Tenant's right to possession.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

ARTICLE 20

 

SECURITY DEPOSIT

 

Concurrent with Tenant's execution of this Lease, Tenant shall deposit with Landlord a security deposit (the "Security Deposit") in the amount set forth in Section 10 of the Summary. The Security Deposit shall be held by Landlord
as security for the faithful performance by Tenant of all the terms, covenants,
and conditions of this Lease to be kept and performed by Tenant during the Lease
Term. If Tenant defaults with respect to any provisions
of this Lease, including, but not limited to, the provisions relating to the payment of Rent, Landlord may, but shall not be required
to, use, apply or retain all or any part of the Security Deposit for the payment
of any Rent or any
other sum in default, or for the payment of any amount that Landlord may spend or become obligated to spend by reason of Tenant's default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant's
default. If any portion of the Security Deposit is so used or applied, Tenant
shall, within five (5) business days after written demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount, and Tenant's failure to do so shall be a default under this
Lease. If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, the Security Deposit, or
any balance thereof, shall be returned to Tenant, or, at Landlord's option, to the last assignee of Tenant's interest hereunder, within
sixty (60) days following the expiration of the Lease Term. Tenant shall not be
entitled to any interest on the Security Deposit. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and
all other provisions of law, now or hereafter in force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant
or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant
or any officer, employee, agent or invitee of Tenant. Subject to the provisions
of this Section 20, effective as of (a) the third anniversary of the Lease
Commencement Date (the "First Reduction Date"), Tenant shall have the right to
reduce the Security Deposit by the amount of Sixty-Four Thousand Six Hundred
Sixty-Six Dollars ($64,666.00), so that the from and after the First Reduction Date, the amount of the Security Deposit (as reduced hereby) shall be One Hundred Twenty-Nine Thousand Three Hundred Thirty-Four Dollars ($129,334.00) and (b) the fourth anniversary of the Lease Commencement Date (the "Second Reduction Date"), Tenant shall have the right
to reduce the Security Deposit by the amount of Sixty-Four Thousand Six Hundred
Sixty-Six Dollars ($64,666.00), so that the from and after the Second Reduction
Date, the amount of the Security Deposit (as reduced hereby) shall be Sixty-Four
Thousand Six Hundred Sixty-Eight Dollars ($64,668.00). Notwithstanding
anything to the contrary contained herein, any reduction of the Security Deposit shall only occur (i) upon the written request delivered
by Tenant to Landlord on or prior to the applicable reduction date, and (ii)
upon Landlord’s confirmation that no default by Tenant has occurred under the
Lease, after the expiration of any applicable notice and
cure period, as of or prior to such reduction date. Notwithstanding anything to the contrary herein, if at any time, Tenant is in default of any of the terms, covenants or conditions of this Lease, then Tenant’s right to reduce the amount of the Security Deposit, as provided herein, shall automatically terminate and shall be of no
further force or effect.

 

ARTICLE 21

 

COMPLIANCE WITH LAW

 

Tenant shall not do anything or suffer anything to be done in or about the
Premises which will in
any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply with all such governmental measures, other than the making of
structural changes or changes to the Building's life safety system (collectively
the "Excluded Changes") except to the extent such Excluded Changes are required
specifically due
to Tenant's alterations to or particular manner of use of the Premises for other than general office use. In addition, Tenant
shall fully comply with all present or future programs intended to manage
parking, transportation or
traffic in and around the Project, and in connection therewith, Tenant shall take responsible action for the transportation planning
and management of all employees located at the Premises by working directly with
Landlord, any governmental transportation management organization or any other transportation-related committees or entities. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any judicial action, regardless of whether Landlord is a party thereto, that
Tenant has violated any of said governmental measures, shall
be conclusive of that fact as between Landlord and Tenant. For purposes of Section 1938 of the California Civil Code, Landlord hereby
discloses to Tenant, and Tenant hereby acknowledges, that the Premises have not
undergone inspection
by a Certified Access Specialist (CASp). Subject to reimbursement as a component of Operating Expenses, Landlord shall comply with all laws that pertain to the common areas unless such item is Tenant's responsibility as provided herein.

 

ARTICLE 22

 

ENTRY BY LANDLORD

 

Landlord reserves the right at all reasonable times and upon reasonable notice to Tenant to enter the Premises
upon at least twenty-four (24) hours advance notice to Tenant to: (i) inspect
them; (ii) show the
 Premises to prospective purchasers, mortgagees or tenants, or to the ground or underlying lessors; (iii) to post notices of nonresponsibility; or (iv) alter, improve or repair the Premises or the Building if necessary to comply with current building
codes or other applicable laws, or for structural alterations, repairs or
improvements to the Building, or as Landlord may otherwise reasonably desire or
deem necessary.  Notwithstanding anything to the contrary
 contained in this Article 22, Landlord may enter the Premises at any time, without notice to Tenant, in emergency situations and/or
to perform janitorial or other services required of Landlord pursuant to this
Lease. Any such entries shall be without the abatement of Rent and shall include
the right to take such reasonable steps as required to accomplish the

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

stated purposes provided, however, Landlord shall use commercially reasonable efforts to minimize any unreasonable interference with Tenant's use and occupancy of the Premises as a result of any entry by Landlord permitted
under this Article 22. Tenant hereby waives any claims for damages or for any
injuries or inconvenience to or interference with Tenant's business, lost
profits, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby. For each of the above purposes, Landlord shall at all times have a key with which
to unlock all the doors in the Premises, excluding Tenant's vaults, safes and
special security
areas designated in advance by Tenant. In an emergency, Landlord shall have the right to enter without notice and use any means that
Landlord may deem proper to open the doors in and to the Premises. Any entry
into the Premises in the manner hereinbefore described shall not be deemed to be
a forcible or unlawful entry into, or a detainer of, the Premises, or an actual
or constructive eviction of Tenant from any portion of the Premises. Tenant
shall have the right to have a representative of Tenant accompany Landlord
during any such entry, provided, however, Landlord shall not be required to
delay its entry if Tenant does not have a representative available to accompany
Landlord at its intended time of entry.

 

ARTICLE 23

 

TENANT PARKING

 

Tenant shall have the right at all times, but not the obligation, to rent throughout the Lease Term the number
of parking spaces set forth in Section 11 of the Summary, located in those
portions of the
Parking Facilities as may be reasonably designated by Landlord from time to time. Tenant shall pay to Landlord for the use of such parking
spaces, on a monthly basis, the prevailing rate charged from time to time by
Landlord or Landlord's parking operator for parking spaces in the Parking
Facilities where such parking spaces are located, which prevailing
rate is currently free. Notwithstanding anything to the contrary contained herein and provided that Tenant faithfully performs all of the terms and conditions of this Lease, Landlord hereby agrees to abate Tenant's obligation to pay any parking charges otherwise payable for such unreserved parking passes so rented by Tenant during the initial Lease
Term and any extension term. Tenant's continued right to use the parking spaces
is conditioned
upon Tenant abiding by all rules and regulations which are prescribed from time to time for the orderly operation and use of the Parking
Facilities. Tenant shall cooperate in seeing that Tenant's employees and
visitors also comply  with
 such rules and regulations. In addition, Landlord may assign any parking spaces and/or make all or a portion of such spaces
reserved or institute an attendant-assisted tandem parking program and/or valet
parking program if Landlord determines in its sole discretion that such is
necessary or desirable for orderly and efficient
parking. Landlord specifically reserves the right, from time to time, to change the size, configuration, design, layout, location and all other
aspects of the Parking Facilities, and Tenant acknowledges and agrees that
Landlord, from time to
time, may, without incurring any liability to Tenant and without any abatement of Rent under this Lease temporarily close-off or
restrict access to the Parking Facilities, or temporarily relocate Tenant's
parking spaces to other parking structures and/or surface parking areas within a
reasonable distance from the Parking Facilities, for purposes of
permitting or facilitating any such construction, alteration or improvements or
to accommodate or facilitate renovation, alteration, construction or other
modification of other improvements or structures located on the Real Property.
Landlord may delegate its responsibilities hereunder to a parking operator in which case such parking operator shall have all the rights
of control attributed hereby to Landlord (as well as the parking fee abatement
obligation provided
for above). The parking rates charged by Landlord for Tenant's parking spaces shall be exclusive of any parking tax or other charges imposed by governmental authorities in connection with the
use of such parking, which taxes and/or charges shall be paid directly by Tenant
or the parking users, or, if directly imposed
against  Landlord,  Tenant shall reimburse Landlord for all such taxes and/or
charges within ten (10) days after Tenant's receipt of the
invoice from Landlord. The parking spaces provided to Tenant pursuant to this
Article 23 are provided solely for use by Tenant's own personnel and such
parking rights may not be transferred, assigned, subleased or otherwise
alienated by Tenant without Landlord's prior approval.

 

ARTICLE 24

 

MISCELLANEOUS PROVISIONS

 

4.1
Terms; Captions. The necessary grammatical changes required to make the provisions hereof apply
either to corporations or partnerships or individuals, men or women, as the case
may require, shall in all cases be assumed as though in each case fully
expressed. The captions of Articles and Sections are for convenience only and
shall not be deemed to limit, construe, affect or alter the meaning of such
Articles and Sections.

 

4.2
Binding Effect. Each of the provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of their respective successors or assigns, provided this clause shall not permit any assignment by Tenant contrary to the provisions of Article 14 of this Lease.

 

4.3 No Waiver. No waiver of any provision of this Lease shall be implied by any
failure of a
party to enforce any remedy on account of the violation of such provision, even if such violation shall continue or be repeated
subsequently, any waiver by a party of any provision of this Lease may only be
in writing, and no express waiver shall affect any provision other than the one
specified in such waiver and that one only for the time and in the manner
specifically stated.  No receipt of monies by Landlord from Tenant after the
termination of this Lease  shall in any way alter the length of the Lease Term
or of Tenant's right of possession hereunder or after the giving
of any notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit
or judgment.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

4.4 Modification of Lease; Financials. Should any current or prospective
mortgagee or
ground lessor for the Project require a modification or modifications of this Lease, which modification or modifications will not cause an increased cost or expense to Tenant or in any other way materially and adversely change the rights and obligations
of Tenant hereunder, then and in such event, upon written notice to Tenant,
Tenant agrees that this Lease may be so
modified and agrees to execute whatever documents are reasonably required therefor and deliver the same to
Landlord within ten (10) days following the request therefor. Should Landlord or
any such current
or prospective mortgagee or ground lessor require execution of a short form of Lease for recording, containing, among other customary
provisions, the names of the parties, a description of the Premises and the
Lease Term, Tenant
agrees to execute such short form of Lease and to deliver the same to Landlord within ten (10) days following the request therefor.
In addition, upon request from time to time, Tenant agrees to provide to
Landlord, within ten (10) days of written request (unless Tenant's stock is
publically traded on a national stock exchange based in the United
States of America) current financial statements for Tenant, dated no earlier
than one (1) year prior to such request, certified as accurate by Tenant or, if
available, audited financial statements prepared by an independent
certified public accountant with copies of the auditor's statement. All such financial statements will be delivered to Landlord and any such lender or purchaser in confidence and shall only be used for purposes of evaluating the
financial strength of Tenant.

 

4.5 Transfer of Landlord's Interest. Tenant acknowledges that Landlord has the
right to transfer all or any portion of its interest in the Project, the
Building and/or in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to
look solely to such transferee for the performance of Landlord's obligations hereunder after the date of transfer, upon such transferee's written assumption of Landlord's obligations hereunder. Without limiting the generality of the foregoing, it is acknowledged
and agreed that the liability of Landlord under this Lease is limited to
matters accruing during its actual period of ownership of title to the Project. The liability of any transferee of Landlord shall be limited to the interest of such transferee in the Project and such transferee shall be without personal liability under this Lease, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. Tenant further acknowledges that Landlord may assign its interest in this Lease
to a mortgage lender as additional security and agrees that such an assignment
shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look to Landlord for the performance of its obligations hereunder.

 

4.6
Prohibition Against Recording. Except as provided in Section 24.4 of this Lease, neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease null and void at Landlord's election. This section is not applicable to securities law notice and reporting requirements.

 

4.7
Landlord's Title; Air Rights. Landlord's title is and always shall be paramount to the title of Tenant.
Nothing herein contained shall empower Tenant to do any act which can, shall or
may encumber the
title of Landlord. No rights to any view or to light or air over any property, whether belonging to Landlord or any other person,
are granted to Tenant by this Lease.

 

4.8 Tenant's Signs. Tenant shall be entitled to (i) one (1) identification sign
on or near the entry doors of the Premises, and (ii) for multi-tenant floors,
one (1) identification or directional sign, as designated
by Landlord, in the elevator lobby on the floor on which the Premises are located. Such signs shall be installed by a signage contractor
designated by Landlord. Landlord shall pay for the initial installation of such
signs and Tenant shall pay for any changes thereto. The location, quality,
design, style, lighting and size of such signs shall be
consistent with the Landlord's Building standard signage program and shall be subject to Landlord's prior written approval, in its reasonable discretion. Upon the expiration or earlier termination of this Lease, Tenant shall be responsible, at its sole cost and expense, for the removal of such signage and the repair of all damage to the Building caused by such removal.
Except for such identification signs, Tenant may not install any signs on the
exterior or roof of
 the Building, the Other Existing Building or the Common Areas. Any signs, window coverings, or blinds (even if the same
are located behind the Landlord approved window coverings for the Building), or
other items visible
from the exterior of the Premises or Building are subject to the prior approval of Landlord, in its sole and absolute discretion.

 

4.9
Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties
hereto or by any third party to create the relationship of principal and agent,
partnership, joint venturer
or any association between Landlord and Tenant, it being expressly understood and agreed that neither the method of computation of Rent nor any act of the parties hereto shall be deemed to create any relationship between Landlord and
Tenant other than the relationship of landlord and tenant.

 

4.10 Application of Payments. Landlord shall have the right to apply payments
received
from Tenant pursuant to this Lease, regardless of Tenant's designation of such payments, to satisfy any accrued obligations of Tenant
hereunder, in such order and amounts as Landlord, in its sole discretion,
may elect.

 

4.11

Time of Essence. Time is of the essence of this Lease and each of
its provisions.

 

4.12 Partial Invalidity. If any term, provision or condition contained in this
Lease shall, to any
 extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not
be affected thereby, and each and every other term, provision and condition of this Lease shall be valid and enforceable to the fullest
extent possible permitted by law.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

4.13 No Warranty. In executing and delivering this Lease, Tenant has not relied
on
any representation, including, but not limited to, any representation whatsoever as to the amount of any item comprising Additional Rent
or the amount of the Additional Rent in the aggregate or that Landlord is
furnishing the same services to other tenants, at all, on the same level or on
the same basis, or any warranty or any statement of Landlord which is
not set forth herein or in one or more of the Exhibits attached hereto.

 

4.14 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything
in this Lease to the contrary, and notwithstanding any applicable law to the contrary, the liability of Landlord and the Landlord Parties hereunder (including any successor landlord) and any recourse by Tenant against Landlord or the Landlord Parties shall be limited solely and exclusively to the ownership interest of Landlord in the Project, and neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant.

 

4.15 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed  by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret
or construe this Lease. This Lease and any side letter or separate agreement executed by Landlord and Tenant in connection with this Lease and dated of even date herewith contain all of the terms, covenants, conditions, warranties and agreements
of the parties relating in any manner to the rental, use and occupancy of the
Premises,  shall be considered to be the only agreement between the parties
hereto and their representatives and agents, and none
of the terms, covenants, conditions or provisions of this Lease can be modified, deleted or added to except in writing signed
by the parties hereto. All negotiations and oral agreements acceptable to both
parties have been merged into and are included herein. There are no other
representations or warranties between the parties, and all reliance with respect
to representations is based totally upon the representations and agreements
contained in this Lease.

 

4.16 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Building, the Other Existing Building and/or in any other
buildings and/or any other portions of the Project as Landlord
in the exercise of its sole business judgment shall determine to best promote the interests of the Project. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the Lease
Term, occupy any space in the Building, the Other Existing Building or Project.

 

4.17 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes,
acts of God, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions,
fire or other casualty, and other causes beyond the reasonable control of the
party obligated to perform, except with respect to the obligations imposed with
regard to Rent and other charges to be paid by Tenant  pursuant to this Lease
and except with respect to Tenant's obligations under the Tenant Work Letter
(collectively, the "Force Majeure"), notwithstanding anything to the contrary
contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies a time
period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such
party's performance caused by a Force Majeure.

 

4.18
Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and for all those claiming under
Tenant all right now or hereafter existing to redeem by order or judgment of any
court or by any legal process or writ, Tenant's right of occupancy of the
Premises after any termination of this Lease.

 

4.19 Notices. All notices, demands, statements or communications (collectively,
"Notices") given or required to be given by either party to the other hereunder
shall be in writing, shall be sent by United States certified or registered
mail, postage prepaid, return receipt requested, or delivered personally (i) to
Tenant at the appropriate address set forth in Section 5 of the Summary, or to
such other place as Tenant may from time to time designate in a Notice to
Landlord; or (ii) to Landlord at the addresses set forth in Section 3 of the
Summary, or to such
other firm or to such other place as Landlord may from time to time designate in a Notice to Tenant. Any Notice will be deemed given on the date it is mailed as provided in this Section 24.19 or upon the date personal delivery is made. If
Tenant is notified of the identity and address of Landlord's mortgagee or ground
or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the
terms of this Lease by registered or certified mail, and such mortgagee or ground or underlying lessor shall be given a reasonable
opportunity to cure such default prior to Tenant's exercising any remedy
available to Tenant.

 

4.20
Joint and Several. If there is more than one Tenant, the obligations imposed upon Tenant under this
Lease shall be joint and several.

 

4.21 Authority. If Tenant is a corporation or partnership, each individual
executing this Lease
 on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in the
state in which the Project is located and that Tenant has full right and authority to execute and deliver this
Lease and that each person signing on behalf of Tenant is authorized to do so.
Tenant confirms that it is not in violation of any executive order or similar
governmental regulation or law, which prohibits terrorism or transactions with
suspected or confirmed terrorists or terrorist entities or with persons or
organizations that are associated with, or that provide any form of support to,
terrorists. Tenant further confirms that it will comply throughout the
Term of this Lease, with all governmental laws, rules or regulations governing transactions or business dealings with any suspected
or confirmed terrorists or terrorist entities, as identified from time to time
by the U.S. Treasury Department's Office of Foreign Assets Control or any other
applicable governmental entity.

 

 

 

HAMILTON PLAZA

Vivus, Inc.

HAMILTON PLAZA

Vivus, Inc.

--------------------------------------------------------------------------------

 

4.22 Jury Trial; Attorneys' Fees. IF EITHER PARTY COMMENCES LITIGATION
AGAINST THE OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR
THE BREACH HEREOF OR OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER,
THE PARTIES HERETO AGREE TO AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In the event of any such commencement of litigation, the prevailing party shall be entitled to recover from the other party such costs and reasonable attorneys' fees as may have been incurred, including any and all costs incurred in enforcing, perfecting
and executing such judgment.

 

4.23
Governing Law. This Lease shall be construed and enforced in accordance with the laws of the state
in which the Project is located.

 

4.24 Submission of Lease. Submission of this instrument for examination or
signature by
Tenant does not constitute a reservation of or an option for lease, and it is not effective as a lease or otherwise until execution and delivery
by both Landlord and Tenant.

 

4.25
Brokers. Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify
and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, and costs and expenses (including without limitation reasonable
attorneys' fees) with
respect to any leasing commission or equivalent compensation alleged to be owing on account of the indemnifying party's dealings with any real estate broker or agent other than the Brokers. Tenant further represents and warrants to Landlord
that Tenant will not receive (i) any portion of any potential brokerage
commission or finder's fee payable to the Broker in connection with this Lease,
or (ii) any other form of compensation from the Broker with
respect to this transaction.

 

4.26
Independent Covenants. This Lease shall be construed as though the covenants herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute
to the contrary and agrees that if Landlord fails to perform its obligations set
forth herein, Tenant shall
not be entitled to make any repairs or perform any acts hereunder at Landlord's expense or to any setoff of the
Rent or other amounts owing hereunder against Landlord except as may be
expressly provided herein; provided, however,
that the foregoing shall in no way impair the right of Tenant to commence a separate action against Landlord for any violation by Landlord of the provisions hereof so long as notice is first given to Landlord and any holder of a mortgage or deed of trust covering the Building, Project or any portion thereof, of whose address Tenant has theretofore been notified, and an opportunity is granted to Landlord and such holder to correct such violations as provided
above.

 

4.27 Building Name and Signage. Landlord shall have the right at any time to
change the name
of the Building, the Other Existing Building and/or Project and to install, affix and maintain any and all signs on the exterior
and on the interior of the Building, the Other Existing Building and/or Project
and any portion of
the Project as Landlord may, in Landlord's sole discretion, desire. Tenant shall not use the names of the Building, the Other Existing Building and/or Project or use pictures or illustrations of the Building, the Other Existing Building and/or Project
in advertising or other publicity, without the prior written consent
of Landlord.

 

4.28 Building Directory. At Landlord's cost, Landlord shall include Tenant's
name and location in the Building on one (1) line of the Building directory.

 

4.29 Landlord's Construction. It is specifically understood and agreed that
Landlord has no obligation and has made no promises to alter, remodel, improve,
renovate, repair or decorate the Premises, Building,
the Other Existing Building, Project, or any part thereof and that no representations or warranties respecting the condition of the Premises, the Building, the Other Existing Building, and/or Project have been made by Landlord to Tenant, except
as specifically set forth in this Lease. However, Tenant acknowledges that
Landlord may from time to  time, at Landlord's sole option, renovate, improve,
alter, or modify (collectively, the "Renovations") the Building, Premises, the
Other Existing Building, and/or Project, including without limitation the
Parking
Facilities, Common Areas, systems and equipment, roof, and structural portions of the same, which Renovations may include, without limitation, (i) modifying the Common Areas and tenant spaces to comply with applicable laws and regulations, including regulations relating to the physically disabled, seismic conditions, and building safety and security, and

(ii) installing new carpeting, lighting, and wall coverings in the Building Common Areas, and in connection with such Renovations, Landlord may, among other things, erect scaffolding or other necessary structures in the Building, the
Other Existing Building and/or Project, limit or eliminate access to portions of
the Project, including portions
of the Common Areas, or perform work in the Building, the Other Existing Building and/or Project, which work may create
noise, dust or leave debris in the Building, the Other Existing Building and/or
Project. Tenant
hereby agrees that such Renovations and Landlord's actions in connection with such Renovations shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no responsibility or
for any reason be liable to Tenant for any direct or indirect injury to or
interference with Tenant's
business arising from the Renovations, nor shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of Tenant's personal property or improvements resulting from the Renovations or Landlord's actions in connection with such Renovations, or for any inconvenience or annoyance occasioned by such Renovations or Landlord's actions in connection with such Renovations.

 

///continued on next page///

 

 

 

 

 

 

Vivus, Inc.

Vivus, Inc.

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written.

 

"LANDLORD":

 

AG-SW HAMILTON PLAZA OWNER, L.P.,

a Delaware limited partnership

 

By:AG-SW Hamilton Plaza GP, L.L.C., a Delaware limited liability company, its
general partner

 

By:AG-SW Hamilton Plaza Holdings, L.P., a Delaware limited partnership,

its sole member

 

By:AG CP IV Hamilton Plaza GP, L.L.C., a Delaware limited liability company, its
general partner

 

By:AG Real Estate Manager, Inc., a Delaware corporation,

its manager

 

By:          /s/ Steven G. White  Name:     Steven G. White  Title:       Vice
President 

 

"TENANT": VIVUS, INC.,

a Delaware corporation

 

 

By:  /s/ Mark Oki Name: Mark Oki  Its: CFO 

 

 

 

By:    Name:   Its:  

 

*** If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and indicate the capacity
in which they are signing. The Lease must be executed by the chairman of the
board, president
or vice president and the chief financial officer, secretary, assistant treasurer or assistant secretary, unless the bylaws or a resolution of the board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the resolution,
as the case may be, must be attached to this Lease.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vivus, Inc.

Vivus, Inc.

--------------------------------------------------------------------------------

 

EXHIBIT A

 

OUTLINE OF FLOOR PLAN OF PREMISES

 

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EXHIBIT B

 

TENANT WORK LETTER

 

This Tenant Work Letter ("Tenant Work Letter") sets forth the terms and conditions relating to the construction
of improvements for the Premises. All references in this Tenant Work Letter to
the "Lease" shall mean the relevant portions of the Lease to
which this Tenant Work Letter is attached as Exhibit B.

 

SECTION 1

 

BASE, SHELL AND CORE

 

Landlord has previously constructed the base, shell and core (i) of the Premises and (ii) of the floor(s) of the
Building on which the Premises are located (collectively, the "Base, Shell and
Core"), and Tenant
shall accept the Base, Shell and Core in its current "AS-IS" condition existing as of the date of the Lease and the Lease Commencement
Date. Except for the Tenant Improvement Allowance set forth below, Landlord
shall
not be obligated to make or pay for any alterations or improvements to the Premises, the Building or the Project.

 

SECTION 2

 

TENANT IMPROVEMENTS

 

4.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the "Tenant Improvement Allowance") in the amount
of up to, but not exceeding
Twenty Dollars ($20.00) per rentable square foot of the Premises (i.e., up to Two Hundred Seventy-Nine Thousand Six Hundred Twenty and 00/100 Dollars ($279,620.00), based on 13,981 rentable square feet in the Premises), for the costs relating to the initial design and construction of Tenant's improvements which are permanently affixed to the Premises
(the "Tenant Improvements"). In no event shall Landlord be obligated to make
disbursements
 pursuant to this Tenant Work Letter in a total amount which exceeds the Tenant Improvement Allowance. Tenant shall not be
entitled to receive any cash payment or credit against Rent or otherwise for any
portion of
the Tenant Improvement Allowance which is not used to pay for the Tenant Improvement Allowance Items (as such term is defined
below).

 

4.2 Disbursement of the Tenant Improvement Allowance. Except as otherwise set
forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord (each of which disbursement shall be made pursuant to
Landlord's standard disbursement process), only for the following items and
costs (collectively, the "Tenant Improvement Allowance Items"):

 

4.2.1 payment of the fees of the "Architect" and the "Engineers," as those terms
are defined in Section 3.1 of this Tenant Work Letter, and payment of the fees
incurred by, and the cost of documents
 and materials supplied by, Landlord and Landlord's consultants in connection with the preparation and review of the "Construction
Drawings," as that term is defined in Section 3.1 of this Tenant Work Letter;

 

 

 

Improvements;

4.2.2

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the payment of plan check, permit and license fees relating to construction of
the Tenant

 

 

 

4.2.3 the cost of construction of the Tenant Improvements, including,
without limitation, contractors' fees and general conditions, testing and inspection costs, costs of utilities, trash removal, parking and hoists,
and the costs of after-hours freight elevator usage;

 

4.2.4
the cost of any changes in the Base, Shell and Core when such changes are required by the
Construction Drawings (including if such changes are due to the fact that such
work is prepared
on an unoccupied basis), such cost to include all direct architectural and/or engineering fees and expenses incurred in connection therewith;

 

4.2.5 the cost of any changes to the Construction Drawings or Tenant
Improvements required by Code or any other applicable laws;

 

4.2.6

sales and use taxes and Title 24 fees;

 

4.2.7 the costs and expenses associated with complying with all national, state
and
local codes, including California Energy Code, Title 24, including, without limitation, all costs associated with any lighting or HVAC
retrofits required thereby;

 

 

 

Work Letter; and

4.2.8

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the "Landlord Supervision Fee," as that term is defined in Section 4.3.2 of this Tenant

 

 

 

4.2.9
all other costs to be expended by Landlord in connection with the construction of the Tenant Improvements.

 

4.3 Specifications for Building Standard Components. Landlord has established
specifications (the "Specifications") for the Building standard components to be
used in the construction of the
Tenant Improvements in the Premises, which Specifications have been received by Tenant. Unless otherwise agreed to by Landlord, the

 

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Tenant Improvements shall comply with the Specifications. The Specifications for
the Building are
attached hereto as Schedule 1; provided, however, Landlord may make changes to the Specifications from time to time.

 

SECTION 3

 

CONSTRUCTION DRAWINGS

 

4.1 Selection of Architect/Construction Drawings. Landlord shall retain an
architect/space  planner (the "Architect") to prepare the "Construction
Drawings," as that term is defined in this Section 3.1. Landlord shall retain
Landlord's engineering consultants (the "Engineers") to prepare all plans and
engineering
working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Premises. The
plans and drawings to be prepared by Architect and the Engineers hereunder shall
be known collectively as the "Construction Drawings." Notwithstanding that any
Construction Drawings are reviewed by Landlord or prepared by its Architect,
Engineers and consultants, and notwithstanding any advice or assistance which
may be rendered to Tenant by Landlord or Landlord's Architect, Engineers, and
consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings, and Tenant's waiver and indemnity set forth in Article 10 of the Lease shall specifically apply to the Construction Drawings.

 

4.2 Final Space Plan. Within three (3) business days of the full execution and
delivery of the Lease by Landlord and Tenant, Tenant shall meet with Landlord's
Architect and provide Landlord's Architect  with information regarding the
preliminary layout and designation of all proposed offices, rooms and
other partitioning, and their intended use and equipment to be contained therein (the "Information"). Landlord and Architect shall, based on such Information (subject to changes reasonably required by Landlord), prepare the final space plan for Tenant
Improvements in the Premises (collectively, the "Final Space Plan"), which Final
Space Plan shall include a layout and designation of all offices, rooms and
other partitioning, their intended use, and equipment to be contained therein,
and shall deliver the Final Space Plan to Tenant for Tenant's approval. Tenant
shall approve
or reasonably disapprove the Final Space Plan or any revisions thereto within three (3) business days after Landlord delivers the Final
Space Plan or such revisions to Tenant; provided, however, that Tenant may only
disapprove the
Final Space Plan to the extent the same is not (subject to changes reasonably required by Landlord) in substantial conformance with
the Information provided by Tenant to Architect ("Space Plan Design Problem").
Tenant's
failure to disapprove the Final Space Plan for any Space Plan Design Problem or any revisions thereto by written notice to Landlord (which notice shall specify in detail the reasonable reasons for Tenant's disapproval pertaining to any Space
Plan Design Problem) within said three (3) business day period shall be deemed
to constitute Tenant's approval of the Final Space Plan or such revisions.

 

4.3 Final Working Drawings. Based on the Final Space Plan, Landlord shall cause
the Architect and the Engineers to complete the architectural and engineering
drawings for the Premises, and Architect shall
compile a fully coordinated set of architectural, structural, mechanical, electrical and plumbing working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the "Final Working Drawings") and shall submit the same to Tenant for Tenant's approval. The Final Working Drawings may incorporate modifications to the Final Space Plan as necessary to comply with the floor load and other structural and system requirements of the Building. To the extent that the finishes and specifications are not completely
set forth in the Final Space Plan for any portion of the Tenant Improvements
depicted thereon,
the actual specifications and finish work shall be in accordance with the Specifications. Tenant shall approve or reasonably disapprove
the Final Working Drawings or any revisions thereto within three (3) business
days
after Landlord delivers the Final Working Drawings or any revisions thereto to Tenant; provided, however, that Tenant may only disapprove the Final Working Drawings to the extent the same are not (subject to changes reasonably required by Landlord)
in substantial conformance with the Final Space Plan ("Working Drawing Design
Problem"). Tenant's failure to reasonably disapprove the Final Working Drawings
or any revisions thereto by written notice
to Landlord (which notice shall specify in detail the reasonable reasons for Tenant's disapproval pertaining to any Working Drawing
Design Problem) within said three (3) business day period shall be deemed to
constitute Tenant's approval of the Final Working Drawings or such revisions.

 

4.4 Approved Working Drawings. The Final Working Drawings shall be approved
or deemed approved by Tenant (the "Approved Working Drawings") prior to the commencement of the construction of the Tenant
Improvements. Landlord shall cause the Architect to submit the Approved Working
Drawing
to the applicable local governmental agency for all applicable building permits necessary to allow "Contractor," as that term is defined in Section 4.1 of this Tenant Work Letter, to commence and fully complete the construction of the Tenant
Improvements (the "Permits"). No changes, modifications or alterations in the
Approved
 Working Drawings may be made without the prior written consent of Landlord, provided that Landlord may withhold its consent, in its sole discretion, to any change in the Approved Working Drawings, if such change would directly or indirectly
delay the Substantial Completion of the Premises and/or would result in an
Over-Allowance Cap (as defined below).

 

4.5
Time Deadlines. Landlord and Tenant shall each use its best efforts to cooperate with Architect, the Engineers, and each other, to complete all phases of the Construction Drawings and the permitting process and to
receive the Permits, and with Contractor, for approval of the
"Cost  Proposal,"  as  that  term  is  defined in Section 4.2 below as soon as possible after the execution of the Lease and, in this regard, to the extent Landlord considers
such meeting(s) to be reasonably necessary, Tenant shall meet with Landlord on a
weekly basis to discuss Tenant's progress in connection with the same.

 

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SECTION 4

 

CONSTRUCTION OF THE TENANT IMPROVEMENTS

 

4.1 Contractor. A contractor, under the supervision of and selected by Landlord,
shall
construct the Tenant Improvements (the "Contractor"). Selection of the Contractor shall be subject to Tenant's approval, such approval
not be to unreasonably withheld, conditioned or delayed. Landlord shall give
copies to Tenant of
all bids for construction of the Tenant Improvements received from Contractor and all sub-contractors (to the extent sub- contractor
bids are not included in the bids received from the Contractor.

 

4.2 Cost Proposal. After the Approved Working Drawings are signed by Landlord
and Tenant, Landlord shall provide Tenant with a cost proposal in accordance
with the Approved Working Drawings, which cost proposal shall include, as nearly
as possible, the cost of all Tenant Improvement Allowance Items to be
incurred by Tenant in connection with the construction of the Tenant
Improvements (the "Cost Proposal"). 
 Notwithstanding the foregoing, portions of the cost of the Tenant Improvements may be delivered to Tenant as such portions of the Tenant
Improvements are priced by Contractor (on an individual item-by-item or
trade-by-trade basis), even before the Approved Working Drawings are completed
(the "Partial Cost Proposal").  Tenant shall approve and
 deliver the Cost Proposal to Landlord within five (5) business days of the receipt of the same (or, as to a Partial Cost Proposal,
within two (2) business days of receipt of the same). The date by which Tenant
must approve and deliver the Cost Proposal, or the last Partial Cost Proposal to
Landlord, as the case may be, shall be known hereafter as the "Cost Proposal
Delivery Date." The total of all Partial Cost Proposals, if any, shall be known
as the Cost Proposal. Notwithstanding anything above to the contrary, if upon
Landlord's delivery of any Partial or final Cost Proposal to Tenant, the
Over-Allowance Amount (as defined below) is determined to be greater than an
amount equal to twenty- five percent (25%) of the Tenant Improvement Allowance
(the "Over-Allowance Cap"), then Landlord, in Landlord's sole discretion, shall
have the right to revise the Approved Working Drawings and/or
any other Construction Drawings (and resubmit the same to Tenant for Tenant's approval to be provided pursuant to the approval procedures and standards set forth in Section 3.3 above) to reduce the Over-Allowance Amount to an amount less than the Over-Allowance Cap and Landlord may refuse to sign any construction contract until such revisions
to the Approved Working Drawings and/or any other Construction Drawings are
approved by Tenant.

 

4.3 Construction of Tenant Improvements by Landlord's Contractor under the
Supervision of Landlord.

 

4.3.1 Over-Allowance Amount. On the Cost Proposal Delivery Date, Tenant shall
deliver to Landlord cash in an amount (the "Over-Allowance Amount") equal to the
difference between (i) the amount of the approved Cost Proposal and (ii) the
amount of the Tenant Improvement Allowance (less any portion
thereof already disbursed by Landlord, or in the process of being disbursed by Landlord, on or before the Cost Proposal Delivery Date).
The Over-Allowance Amount shall be disbursed by Landlord prior to the
disbursement
of  any then remaining portion of the Tenant Improvement Allowance, and such disbursement shall be pursuant to the same procedure as the Tenant Improvement Allowance. In the event that, after the Cost Proposal Date, any revisions, changes, or substitutions shall be made to the Construction Drawings or the Tenant Improvements, any additional costs
which arise in connection with such revisions, changes or substitutions shall be
added to the Cost Proposal and shall be paid by Tenant to Landlord immediately
upon Landlord's request to the extent such additional costs increase any
existing Over-Allowance Amount or result in an Over-Allowance Amount. Following
completion of the Tenant Improvements, Landlord shall deliver to Tenant a final
cost statement which shall indicate the final costs
of the Tenant Improvement Allowance Items, and if such cost statement indicates that Tenant has underpaid or overpaid the
Over-Allowance Amount, then within ten (10) business days after receipt of such
statement, Tenant shall deliver to Landlord the amount of such underpayment or
Landlord shall return to Tenant the amount of such overpayment, as the case
may be.

 

4.3.2 Landlord Supervision. After Landlord selects the Contractor,
Landlord shall independently retain Contractor to construct the Tenant Improvements in accordance with the Approved Working Drawings
and the Cost Proposal and Landlord shall supervise the construction by
Contractor, and Tenant shall pay a construction supervision and management fee
(the "Landlord Supervision Fee") to Landlord in an amount
equal to the product of (i) five percent (5%) and (ii) an amount equal to the Tenant Improvement Allowance plus the Over- Allowance
Amount (as such Over-Allowance Amount may increase pursuant to the terms of this
Tenant Work Letter). Notwithstanding the foregoing, in the event SteelWave CDS, Inc. is selected as the Contractor, then no Landlord
Supervision Fee shall be payable by Tenant pursuant to this Section 4.3.2.

 

4.3.3 Contractor's Warranties and Guarantees. Landlord hereby assigns to  Tenant
 all warranties and guarantees by Contractor relating to the Tenant Improvements, which assignment shall be on a non-exclusive
basis such that the warranties and guarantees may be enforced by Landlord and/or
Tenant, and Tenant hereby waives all claims against Landlord relating to, or
arising out of the construction of, the Tenant Improvements.

 

SECTION 5

 

SUBSTANTIAL COMPLETION; LEASE COMMENCEMENT DATE

 

4.1
Substantial Completion. For purposes of the Lease, including for purposes of determining the Lease
Commencement Date (as set forth in Section 7.2 of the Summary), the Premises
shall be "Ready for Occupancy" upon Substantial Completion of the Premises. For
purposes of this Lease,
"Substantial Completion" of the Premises shall occur upon the completion of construction of the Tenant Improvements in the Premises pursuant to the
Approved Working Drawings and receipt of final permit sign offs for the Tenant Improvements,
with

 

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the exception of any punchlist items and any tenant fixtures, work-stations, built-in furniture, or equipment to be installed
by Tenant or under the supervision of Contractor.

 

4.2
Tenant Delays. If there shall be a delay or there are delays in the Substantial Completion of the Premises
(as a direct, indirect, partial, or total result of any of the following
(collectively, "Tenant Delays"):

 

4.2.1
Tenant's failure to timely approve any matter requiring Tenant's approval, including a Partial Cost Proposal or the Cost Proposal and/or Tenant's failure to timely perform any other obligation or act required
of Tenant hereunder;

 

4.2.2

a breach by Tenant of the terms of this Tenant Work Letter or the Lease;

 

4.2.3

Tenant's request for changes in the Construction Drawings;

 

4.2.4 Tenant's requirement for materials, components, finishes or improvements
which are not available in a reasonable time (based upon the anticipated date of
the Lease Commencement Date);

 

4.2.5

changes to the Base, Shell and Core required by the Approved Working Drawings;

 

4.2.6

any changes in the Construction Drawings and/or the Tenant Improvements
required by

(i)

applicable laws if such changes are directly attributable to Tenant's particular
use of the Premises (e.g. for other than general office use) or Tenant's
specialized tenant improvement(s) (as determined by Landlord), and/or

(ii)

Landlord pursuant to Section 4.2 above; or

 

2.2.1

any other acts or omissions of Tenant, or its agents, or employees;

 

then, notwithstanding anything to the contrary set forth in the Lease and
regardless of the actual date of the Substantial Completion of the Premises, the
Lease Commencement Date (as set forth in Section 7.2 of  the Summary) shall be
deemed to be the date the Lease Commencement Date would have occurred if no
Tenant Delay or Delays, as set forth above, had occurred.

 

SECTION 6

 

MISCELLANEOUS

 

2.1 Tenant's Representative. Tenant has designated Roger Luong as its
sole  representative with respect to the matters set forth in this Tenant Work
Letter, who shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Letter.

 

2.2 Landlord's Representative. Landlord has designated Alexandra Arsenlis as its
sole representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority
and responsibility to act on behalf of the Landlord as required in this Tenant
Work Letter.

 

2.3 Time of the Essence in This Tenant Work Letter. Unless otherwise indicated,
all
references herein to a "number of days" shall mean and refer to calendar days. In all instances where Tenant is required to approve or
deliver an item, if no written notice of approval is given or the item is not
delivered within the stated time period, at Landlord's sole option, at the end
of said period the item shall automatically be deemed approved or
delivered by Tenant and the next succeeding time period shall commence.

 

2.4 Tenant's Lease Default. Notwithstanding any provision to the contrary
contained in the Lease,
 if an event of default by Tenant as described in Section 19.1 of the Lease or any default by Tenant under this Tenant Work
Letter has occurred at any time on or before the Substantial Completion of the
Premises, then (i) in addition to all other rights and remedies granted to
Landlord pursuant to the Lease, at law and/or in equity, Landlord
shall have the right to withhold payment of all or any portion of the Tenant Improvement Allowance and/or Landlord may cause
Contractor to cease the construction of the Premises (in which case, Tenant
shall be responsible for
any delay in the Substantial Completion of the Premises caused by such work stoppage as set forth in Section 5.2 of this Tenant Work Letter), and (ii) all other obligations of Landlord under the terms of this Tenant Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the Lease (in which case, Tenant shall be responsible
for any delay in the Substantial Completion of the Premises caused by such
inaction by
Landlord). In addition, if the Lease is terminated prior to the Lease Commencement Date, for any reason due to a default by Tenant
as described in Section 19.1 of the Lease or under this Tenant Work Letter, in
addition to any
other remedies available to Landlord under the Lease, at law and/or in equity, Tenant shall pay to Landlord, as Additional Rent under the Lease, within five (5) days of receipt of a statement therefor, any and all costs incurred by Landlord (including
any portion of the Tenant Improvement Allowance disbursed by Landlord) and not
reimbursed or otherwise paid by Tenant through the date of such termination in connection with the Tenant Improvements to the extent planned, installed and/or constructed as of such date of termination, including, but not limited to, any costs related
to the removal of all or any portion of the Tenant Improvements and restoration
costs related thereto.

 

2.5 Termination. Notwithstanding anything in the Lease (including this Tenant
Work Letter) to the contrary, Tenant acknowledges and agrees that Landlord shall
have the right to terminate the
Lease  by giving Tenant written notice of the exercise of such option (in which event the Lease shall cease and terminate as of the date of such notice) in the event Landlord is unable to obtain the Permits for the Tenant Improvements within one hundred twenty (120) days from the date of the full execution and delivery of the Lease by Landlord and Tenant, notwithstanding
Landlord's diligent and continuous efforts to obtain the Permits. Upon such
termination, the parties

 

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shall be relieved of all further obligations under the Lease except for those obligations under the Lease which expressly
survive the expiration or sooner termination of the Lease.

 

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EXHIBIT C

 

AMENDMENT TO LEASE

 

THIS  AMENDMENT  TO   LEASE 
("Amendment")  is   made   and   entered   into   effective   as    of

 _, 2016, by and between AG-SW HAMILTON PLAZA OWNER, L.P., a Delaware limited partnership
("Landlord") and VIVUS, INC., a Delaware corporation ("Tenant").

 

R E C I T A L S :

 

A.
Landlord and Tenant entered into that certain Office Lease dated as of August 9, 2016 (the "Lease")
pursuant to which Landlord leased to Tenant and Tenant leased from Landlord
certain "Premises", as described in the Lease, in that certain Building located
at 900 E. Hamilton Avenue, Campbell, California 95008.

 

B.
Except as otherwise set forth herein, all capitalized terms used in this Amendment shall have the same
meaning as such terms have in the Lease.

 

C.
Landlord and Tenant desire to amend the Lease to confirm the commencement and expiration dates
of the term, as hereinafter provided.

 

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

 

1. Confirmation of Dates. The parties hereby confirm that (a) the Premises are
Ready  for Occupancy, and (b) the term of the Lease commenced as  of(the
"Lease Commencement

 

Date") for a term of      terminated as provided in the Lease).

ending  on    

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(unless  sooner

 

 

 

2.
No Further Modification. Except as set forth in this Amendment, all of the terms and provisions of
the Lease shall remain unmodified and in full force and effect.

 

 

 

written.

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IN WITNESS WHEREOF, this Amendment to Lease has been executed as of the day and
year first   above

 

 

 

"LANDLORD":

 

AG-SW HAMILTON PLAZA OWNER, L.P.,

a Delaware limited partnership

 

By:AG-SW Hamilton Plaza GP, L.L.C., a Delaware limited liability company, its
general partner

 

By:AG-SW Hamilton Plaza Holdings, L.P., a Delaware limited partnership,

its sole member

 

By:AG CP IV Hamilton Plaza GP, L.L.C., a Delaware limited liability company, its
general partner

 

By:AG Real Estate Manager, Inc., a Delaware corporation,

its manager

 

By:            Name:       Title:        

 

"TENANT": VIVUS, INC.,

a Delaware corporation

 

By:DO NOT SIGN

Name:     Its:    

 

By:DO NOT SIGN

Name:     Its:    

 

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EXHIBIT D

 

RULES AND REGULATIONS

 

Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with
respect to the acts or omissions of any other tenants or occupants of the
Building or Real Property.

 

1. Tenant shall not place any lock(s) on any door, or install any security
system (including, without limitation, card key systems, alarms or security
cameras), in the Premises or Building without Landlord's prior
written consent, which consent shall not be unreasonably withheld, and Landlord
shall have the right to retain at all times and
to use keys or other access codes or devices to all locks and/or security system within and into the Premises, other than secured areas and vaults. A reasonable number of keys to the locks on the entry doors in the Premises shall be furnished by Landlord to Tenant at Tenant's cost, and Tenant shall not make any duplicate keys. All keys shall be returned
to Landlord at the expiration or early termination of this Lease. Further, if
and to the extent
Tenant re-keys, re-programs or otherwise changes any locks at the Project, Tenant shall be obligated to restore all such locks and key systems to be consistent with the master lock and key system at the Building, all at Tenant's sole cost and expense.

 

2.

All doors opening to public corridors shall be kept closed at all times except
for normal ingress and egress to the Premises, unless electrical hold backs have
been installed. Sidewalks, doorways, vestibules,
halls, stairways and other similar areas shall not be obstructed by Tenant or used by Tenant for any purpose other than ingress and egress
to and from the Premises.

 

3.

Landlord reserves the right to close and keep locked all entrance and exit doors
of the Building
during such hours as are customary for comparable buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any
other  persons  entering or leaving the Building at any time when it is so
locked, or any time when it is considered to be after normal business hours for
the Building, may be required to sign the Building register when so doing.
After-hours access by Tenant's authorized employees may be provided by hard-key,
card-key access or other procedures adopted by Landlord from time to time;
Tenant shall pay for the costs of all access cards provided to Tenant's
employees and
all replacements thereof for lost, stolen or damaged cards. Access to the Building and/or Real Property may be refused unless the person
seeking access has proper identification or has a previously arranged pass for
such access. Landlord
and its agents shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building
and/or Real Property of any person. In case of invasion, mob, riot, public
excitement, or
other commotion, Landlord reserves the right to prevent access to the Building and/or Real Property during the continuance of same by any
means it deems appropriate for the safety and protection of life and property.

 

4.

Landlord shall have the right to prescribe the weight, size and position of all
safes and other
heavy property brought into the Building. Safes and other heavy objects shall, if considered necessary by Landlord, stand on supports
of such thickness as is necessary to properly distribute the weight. Landlord
will not be responsible
for loss of or damage to any such safe or property in any case. All damage done to any part of the Building, its contents, occupants or visitors by moving or maintaining any such safe or other property shall be the sole responsibility of Tenant
and any expense of said damage or injury shall be borne by Tenant.

 

5.

No furniture, freight, packages, supplies, equipment or merchandise will be
brought into or
removed from the Building or carried up or down in the elevators, except upon prior notice to Landlord, and in such manner, in such specific elevator, and between such hours as shall be designated by Landlord. Tenant shall provide Landlord with not less than 24 hours prior notice of the need to utilize an elevator for any such purpose, so as to provide Landlord with a reasonable period to schedule such use and to install such padding or take such other actions or prescribe such procedures as are appropriate to protect against damage to the elevators or other parts of the Building. Tenant
shall assume all risk for damage to articles moved and injury to any persons
resulting from the
activity. If equipment, property, or personnel of Landlord or of any other party is damaged or injured as a result of or in connection
with the activity, Tenant shall be solely liable for any resulting damage
or loss.

 

6.

Landlord shall have the right to control and operate the public portions of the
Building and
Real Property, the public facilities, the heating and air conditioning, and any other facilities furnished for the common use of tenants,
in such manner as is customary for comparable buildings in the vicinity of
the Building.

 

7.

No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building,
except those of such color, size, style and in such places as are first approved
in writing by
Landlord. All tenant identification and suite numbers at the entrance to the Premises shall be installed by Landlord, at Tenant's cost
and expense, using the standard graphics for the Building. Landlord may provide
and maintain in the
first floor (main lobby) of the Building an alphabetical directory board or other directory device listing tenants, and no other directory
shall be permitted unless previously consented to by Landlord in writing.

 

8.

The requirements of Tenant will be attended to only upon application at the
management office of the Real Property or at such office location designated
by Landlord.

 

9.

Tenant shall not disturb, solicit, or canvass any occupant of the Building or Real Property and shall cooperate
with Landlord or Landlord's agents to prevent same.

 

10.

The toilet rooms, urinals, wash bowls and other apparatus shall not be used for
any purpose other than that

 

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for which they were constructed, and no foreign substance of any kind whatsoever
shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who,
or whose employees or agents, shall have caused it.

 

11.
Tenant shall not overload the floor of the Premises. Tenant shall not mark, drive nails or screws, or drill into the partitions, woodwork or plaster or in any way deface the Premises or any part thereof without Landlord's consent first had and obtained; provided, however, Landlord's prior consent shall not be required with respect to Tenant's
placement of pictures and other normal office wall hangings on the interior
walls of the Premises (but
at the end of the Term, Tenant shall repair any holes and other damage to the Premises resulting therefrom subject to reasonable
wear and tear).

 

12.
Except for vending machines intended for the sole use of Tenant's employees and invitees, no vending machine
or machines of any description other than fractional horsepower office machines
shall be installed, maintained or operated upon the Premises without the written
consent of Landlord. Tenant shall not
install, operate or maintain in the Premises or in any other area of the Building, electrical equipment that would overload the electrical
system beyond its capacity for proper, efficient and safe operation as
determined solely by Landlord.

 

13.

Tenant shall not use any method of heating or air conditioning other than that which may be supplied by Landlord,
without the prior written consent of Landlord. Tenant shall not furnish cooling
or heating to the Premises, including, without limitation, the use of electronic
or gas heating devices, portable coolers (such as "move
n cools") or space heaters, without Landlord's prior written consent, and any such approval will be for devices that meet federal,
state and local code.

 

14.

No inflammable, explosive or dangerous fluids or substances shall be used or kept by Tenant in the Premises,
Building or about the Property, except for those substances as are typically
found in similar
premises used for general office purposes and are being used by Tenant in a safe manner and in accordance with all applicable Laws,
rules and regulations. Tenant shall not, without Landlord's prior written
consent, use, store,
install, spill, remove, release or dispose of, within or about the Premises or any other portion of the Property, any asbestos- containing
materials or any solid, liquid or gaseous material now or subsequently
considered toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et
seq. or any other applicable environmental Laws which
may now or later be in effect. Tenant shall comply with all Laws pertaining to and governing the use of these materials by Tenant,
and shall remain solely liable for the costs of abatement and removal.

 

15.

Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building or Real Property by
reason of noise, odors, or vibrations, or interfere in any way with other
tenants or those having business therewith.

 

16.

Tenant shall not bring into or keep within the Real Property, the Building or the Premises any animals (except
those assisting handicapped persons), birds, fish tanks, bicycles or
other vehicles.

 

17.

Tenant shall not use or occupy the Premises in any manner or for any purpose which might injure the reputation
or impair the present or future value of the Premises or the Building. Tenant
shall not use, or permit any part of the Premises to be used, for lodging,
sleeping or for any illegal purpose.

 

18.

No cooking shall be done or permitted by Tenant on the Premises, nor shall the Premises be used for the storage
of merchandise, for lodging or for any improper, objectionable or immoral
purposes.
Notwithstanding the foregoing, Underwriters' laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages, provided that such use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations, and does not cause odors which
are objectionable to Landlord and other tenants.

 

19.

Landlord will approve where and how telephone and telegraph wires and other
cabling are to
be introduced to the Premises. No boring or cutting for wires shall be allowed without the consent of Landlord. The location of telephone, call boxes and other office equipment and/or systems affixed to the Premises shall be subject to the approval
of Landlord. Tenant shall not use more than its proportionate share of telephone
lines and other telecommunication facilities available to service the Building.

 

20.

Landlord reserves the right to exclude or expel from the Building and/or Real
Property any person
who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or
who shall in any manner do any act in violation of any of these Rules and
Regulations or cause harm to Building occupants and/or property.

 

21.

All contractors, contractor's representatives and installation technicians performing work in the Building shall
be subject to Landlord's prior approval, which approval shall not be
unreasonably withheld, and shall be required to comply with Landlord's standard
rules, regulations, policies and procedures, which may be revised from time to
time.

 

22.

Tenant, its employees and agents shall not loiter in the entrances or corridors, nor in any way obstruct the sidewalks,
lobby, halls, stairways or elevators, and shall use the same only as a means of
ingress and egress for the Premises.

 

23.

Tenant at all times shall maintain the entire Premises in a neat and clean, first class condition, free of debris.
Tenant shall not place items, including, without limitation, any boxes,
files,  trash receptacles or  loose cabling or wiring, in or near any window to
the Premises which would be visible anywhere from the exterior of the

 

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Premises.

 

24. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Building's heating and air conditioning system,
including, without limitation, the use of window blinds to block solar heat load, and shall refrain from attempting to adjust any controls. Tenant shall comply with and participate in any program for metering or otherwise measuring the use of utilities
and services, including, without limitation, programs requiring the disclosure
or reporting of the use of any utilities or services. Tenant shall also
cooperate and comply with, participate in, and assist in the
implementation of (and take no action that is inconsistent with, or which would
result in Landlord, the Building and/or
the Real Property failing to comply with the requirements of) any conservation, sustainability, recycling, energy efficiency, and waste reduction programs, environmental protection efforts and/or other programs that are in place and/or implemented
from time to time at the Building and/or the Real Property, including, without
limitation, any required reporting, disclosure, rating or compliance system or
program (including, but not limited to any
LEED [Leadership in Energy and Environmental Design] rating or compliance system, including those currently coordinated through the
U.S. Green Building Council).

 

25.
Tenant shall store all its recyclables, trash and garbage within the interior of the Premises. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the
ordinary and customary manner of removing and disposing of recyclables, trash
and garbage in the city
in which the Real Property is located without violation of any law or ordinance governing such disposal. All trash, garbage and
refuse disposal shall be made only through entry-ways and elevators provided for
such purposes at such times as Landlord shall designate.

 

26. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

 

27.
Tenant shall assume any and all responsibility for protecting the Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed, when the Premises are not occupied,
or when the Premises' entry is not manned by Tenant on a regular basis.

 

28.

No awnings or other projection shall be attached to the outside walls of the Building without the prior written consent of Landlord. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises without the prior written consent of Landlord. The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles
be placed on the windowsills. All electrical ceiling fixtures hung in offices or
spaces along the perimeter of the Building must be fluorescent and/or of a
quality, type, design and bulb color approved by Landlord.

 

29.

The washing and/or detailing of or, the installation of windshields, radios, telephones in or general work on,
automobiles shall not be allowed on the Real Property, except under specific
arrangement with Landlord.

 

30.

Food vendors shall be allowed in the Building upon receipt of a written request
from the Tenant.
The food vendor shall service only the tenants that have a written request on file in the management office of the Real Property.
Under no circumstance shall the food vendor display their products in a
public  or  Common Area including corridors and elevator lobbies. Any failure to comply with this rule shall result in immediate permanent withdrawal
of the vendor from the Building. Tenants shall obtain ice, drinking water,
linen,
barbering, shoe polishing, floor polishing, cleaning, janitorial, plant care or other similar services only from vendors who have registered with the Building office and who have been approved by Landlord for provision of such services in the Premises.

 

31.

Tenant must comply with requests by the Landlord concerning the informing of
their employees of items of importance to the Landlord.

 

32.

Tenant shall comply with any non-smoking ordinance adopted by any applicable
governmental authority. Neither Tenant nor its agents, employees, contractors, guests or invitees shall smoke or permit smoking in the Common
Areas, unless the Common Areas have been declared a designated smoking area by
Landlord, nor shall the above parties allow smoke from the Premises to emanate
into the Common Areas or any other part of the Building. Landlord shall have the
right to designate the Building (including the Premises) as a
non-smoking building.

 

33.

Tenant shall not take any action which would violate Landlord's labor contracts or which would cause a work
stoppage, picketing, labor disruption or dispute, or interfere with Landlord's
or any other tenant's or occupant's business or with the rights and privileges
of any person lawfully in the Building ("Labor Disruption").   Tenant shall take
the actions necessary to resolve the Labor Disruption, and shall have pickets
removed and, at the request of Landlord, immediately terminate any work in the
Premises that gave rise to the Labor Disruption, until Landlord gives its
written consent for the work to resume. Tenant shall have no claim for damages
against Landlord or and its trustees, members, principals, beneficiaries,
partners, officers, directors, employees, Mortgagees, or agents.

 

34.

No tents, shacks, temporary or permanent structures of any kind shall be allowed
on the Real Property. No personal belongings may be left unattended in any
Common Areas.

 

35.

Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant that in Landlord's sole opinion may impair the reputation of the Building or its desirability. Upon written notice
from Landlord, Tenant shall refrain from and discontinue such
publicity immediately.

 

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36. Landlord shall have the right to designate and approve standard window
coverings for the Premises and to establish rules to assure that the Building
presents a uniform exterior appearance. Tenant shall ensure, to
the extent reasonably practicable, that window coverings are closed on windows
in the Premises while they are exposed to the direct rays of the sun.

 

37. The work of cleaning personnel shall not be hindered by Tenant after 5:30
P.M., and cleaning work may be done at any time when the offices are
vacant.  Windows, doors and fixtures may be cleaned at any time.  Tenant shall
provide adequate waste and rubbish receptacles to prevent unreasonable hardship
to the cleaning service.

 

PARKING RULES AND REGULATIONS

 

(i)

Landlord reserves the right to establish and reasonably change the hours for the parking areas, on a non- discriminatory basis, from time to time. Tenant shall not store or permit its employees to store any automobiles in the parking areas without the prior written consent of the operator. Except for emergency repairs, Tenant and its employees shall not perform any work on any automobiles while located in the parking areas, or on the Property. The Parking Facilities may not be used by Tenant or its agents for overnight parking of vehicles. If it is necessary for Tenant or its employees to leave an automobile in the Parking Facility overnight, Tenant shall provide the operator
with prior notice thereof designating the license plate number and model of
such automobile.

 

(ii)

Tenant (including Tenant's agents) will use the parking spaces solely for the
purpose of
parking passenger model cars, small vans and small trucks and will comply in all respects with any rules and regulations that may be promulgated
by Landlord from time to time with respect to the Parking Facilities.

 

(iii)

Cars must be parked entirely within the stall lines painted on the floor, and
only small cars may be parked in areas reserved for small cars.

 

(iv)

All directional signs and arrows must be observed.

 

(v)

The speed limit shall be 5 miles per hour.

 

(vi)

Parking spaces reserved for handicapped persons must be used only by vehicles
properly designated.

 

(vii)

Parking is prohibited in all areas not expressly designated for parking,
including without limitation:

(a)

areas not striped for parking;

(b)

aisles;

(c)

where "no parking" signs are posted;

(d)

ramps; and

(e)

loading zones.

 

(viii)

Parking stickers, key cards or any other devices or forms of identification or
entry supplied by the operator shall remain the property of the operator. Such
device must be displayed as requested and may not be
mutilated in any manner. The serial number of the parking identification device may not be obliterated. Parking passes and devices
are not transferable and any pass or device in the possession of an unauthorized
holder will be void.

 

(ix)

Parking managers or attendants are not authorized to make or allow any
exceptions to these Rules.

 

(x)

Every parker is required to park and lock his/her own car.

 

(xi)

Loss or theft of parking pass, identification, key cards or other such devices must be reported to Landlord and to the parking manager immediately. Any parking devices reported lost or stolen found on any authorized car will
be confiscated and the illegal holder will be subject to prosecution. Lost or
stolen passes and devices found by Tenant or its employees must be reported to
the office of the parking manager immediately.

 

(xii)
Washing, waxing, cleaning or servicing of any vehicle by the customer and/or his agents is prohibited. Parking
spaces may be used only for parking automobiles.

 

(xiii)

Tenant agrees to acquaint all persons to whom Tenant assigns a parking space
with these Rules.

 

(xiv)
Neither Landlord nor any operator of the Parking Facilities within the Project, as the same are designated and
modified by Landlord, in its sole discretion, from time to time will be liable
for loss of or damage to any vehicle or any contents of such vehicle or
accessories to any such vehicle, or any property left in any of
the Parking Facilities, resulting from fire, theft, vandalism, accident, conduct of other users of the Parking Facilities and other persons, or any other casualty or cause. Further, Tenant understands and agrees that: (i) Landlord will not be obligated
to provide any traffic control, security protection or operator for the Parking
Facilities; (ii) Tenant uses the Parking Facilities at its own risk; and (iii)
Landlord will not be liable for personal injury or death, or theft, loss
of or damage to property. Tenant indemnifies and agrees to hold Landlord, any operator of the Parking Facilities and their
respective agents harmless from and against any and all claims, demands, and
actions arising out of the use of the Parking Facilities by Tenant and its
agents, whether brought by any of such persons or any other person.

 

(xv)
Tenant will ensure that any vehicle parked in any of the parking spaces will be kept in proper repair and will not leak excessive amounts of oil or grease or any amount of gasoline. If any of the parking spaces are at any time
used: (i) for any purpose other than parking as provided above; (ii) in any way
or
manner reasonably objectionable to Landlord; or (iii) by Tenant after default by Tenant under the Lease, Landlord, in addition to any other
rights otherwise available to Landlord, may consider such default an event of
default under the Lease.

 

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(xvi)

Tenant's right to use the Parking Facilities will be in common with other tenants of the Project and with other
parties permitted by Landlord to use the Parking Facilities. Landlord reserves
the right to assign
and reassign, from time to time, particular parking spaces for use by persons selected by Landlord, provided that Tenant's rights under the Lease are preserved. Landlord will not be liable to Tenant for any unavailability of Tenant's designated spaces, if any, nor will any unavailability entitle Tenant to any refund, deduction, or allowance. Tenant will not park in any numbered space or any space designated as: RESERVED, HANDICAPPED, VISITORS ONLY, or LIMITED
TIME PARKING (or similar designation).

 

(xvii)

If the Parking Facilities are damaged or destroyed, or if the use of the Parking Facilities is limited or prohibited
by any governmental authority, or the use or operation of the Parking Facilities
is limited or
prevented by strikes or other labor difficulties or other causes beyond Landlord's control, Tenant's inability to use the parking spaces
will not subject Landlord or any operator of the Parking Facilities to any
liability to Tenant and will not relieve Tenant of any of its obligations under
the Lease and the Lease will remain in full force and effect. Tenant will pay to
Landlord upon demand, and Tenant indemnifies Landlord against, any and all loss
or damage
to the Parking Facilities, or any equipment, fixtures, or signs used in connection with the Parking Facilities and any adjoining
buildings or structures caused by Tenant or any of its agents.

 

(xviii)

Tenant has no right to assign or sublicense any of its rights in the parking passes, except as part of a permitted
assignment or sublease of the Lease; however, Tenant may allocate the parking
passes among its employees.

 

(xix)

Tenant shall be responsible for the observance of all of the foregoing rules by
Tenant's employees, agents, clients, customers, invitees or guests. Landlord may
waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant or tenants, nor prevent Landlord from thereafter enforcing any such Rules or Regulations against any or all tenants of the Building and/or Real Property. Landlord reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord's judgment may from time to time be necessary for the management, safety, care and cleanliness of the Premises, Building and Real Property, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein. Landlord shall not be responsible to Tenant or to any other person for the nonobservance of the Rules and Regulations by another tenant or other person. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them
as a condition of its occupancy of the Premises.

 

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RIDER 1

 

EXTENSION OPTION

 

 

This Rider 1 (the "Rider") is incorporated as a part of that certain Office
Lease dated August 9, 2016, (the "Lease"), by and between AG-SW HAMILTON PLAZA
OWNER, L.P., a Delaware
limited partnership ("Landlord"), and VIVUS, INC., a Delaware corporation ("Tenant"), for the leasing of those certain premises located
at 900 E. Hamilton Avenue, Suites 525 and 550, Campbell, California , as more
particularly described in the Lease (the "Premises"). Any capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms as set forth in the Lease.

 

1. Grant of Extension Option. Subject to the provisions, limitations and
conditions set forth in this Rider, Tenant shall have one (1) option (the
"Extension Option") to extend the initial Lease Term for two (2) years (the
"Extension Term").

 

2.
Tenant's Extension Option Notice. Tenant shall have the right to deliver written notice to Landlord of its intent to exercise this Extension Option (the "Extension Option Notice"). If Landlord does not receive
the Extension Option Notice from Tenant on a date which is no earlier than
fifteen (15) months and no less than twelve (12) months prior to the expiration
of the initial Lease Term, all rights under this Extension Option
shall automatically terminate and shall be of no further force or effect. Upon the proper exercise of this Extension Option,
subject to the provisions, limitations and conditions set forth in this Rider,
the Lease Term shall be extended for the Extension Term.

 

3.
Establishing the Initial Base Rent for the Extension Term. The initial Base Rent for the Extension
Term shall be equal to the then Fair Market Rental Rate, as hereinafter defined.
As used herein, the "Fair Market Rental Rate" payable by Tenant for the
Extension Term shall mean the Base Rent for the highest and best use for
comparable space at which non-equity tenants, as of the commencement of the
lease term for the Extension Term, will be leasing non-sublease, non-equity,
unencumbered space comparable in size, location and quality
to the Premises for a comparable term, which comparable space is located in the Building and in other comparable first- class buildings in the West Valley market area, taking into consideration all out-of-pocket concessions generally being
granted at such time for such comparable space, including the condition and
value of existing tenant improvements in the Premises. The Fair Market Rental
Rate shall include the periodic rental increases that would be included for
space leased for the period of the Extension Term.

 

If Landlord and Tenant are unable to agree on the Fair Market Rental Rate for the Extension Term within ten (10) days of receipt by Landlord of the Extension Option Notice for the Extension Term, Landlord and Tenant each, at its cost and by giving notice to the other party, shall appoint a competent and impartial commercial real estate
broker (hereinafter "broker") with at least ten (10) years' full-time commercial
real
estate brokerage experience in the geographical area of the Premises to set the Fair Market Rental Rate for the space and term at issue. If either Landlord or Tenant does not appoint a broker within ten (10) days after the other party has given notice of the name of its broker, the single broker appointed shall be the sole broker and shall conclusively determine the Fair Market Rental Rate for the Extension Term. If two (2) brokers are appointed by Landlord and Tenant
as stated in this paragraph, they shall meet promptly and attempt to set the
Fair Market Rental Rate. In addition, if either of the first two (2) brokers
fails to submit their opinion of the Fair Market Rental Rate
within the time frames set forth below, then the single Fair Market Rental Rate submitted shall automatically be the initial monthly Base Rent for the Extension Term and shall be binding upon Landlord and Tenant. If the two (2) brokers are unable to agree within ten (10) days after the second broker has been appointed, they shall attempt to select a third broker, meeting the qualifications stated in this paragraph within ten (10) days after the last day the two (2) brokers are given to set the Fair Market Rental Rate. If the two (2) brokers are unable to agree on the third broker, either
Landlord or Tenant by giving ten (10) days' written notice to the other party,
can apply to the Presiding Judge of the Superior Court of the county in which
the Premises is located for the selection of a third broker who
meets the qualifications stated in this paragraph. Landlord and Tenant each shall bear one-half (½) of the cost of appointing the
third broker and of paying the third broker's fee. The third broker, however
selected, shall be a person who has not previously acted in any capacity for
either Landlord or Tenant. Within fifteen (15) days after the selection
of the third broker, the third broker shall select one of the two Fair Market
Rental Rates submitted by the first two brokers as the Fair Market Rental Rate
for the space and term at issue. The determination of the Fair Market Rental
Rate by the third broker shall be conclusive and binding upon Landlord and
Tenant. In no event shall the monthly
Base Rent for any period of the Extension Term as determined pursuant to this Rider, be less than the highest monthly Base Rent charged during the initial term of the Lease plus an escalation amount equal to the last escalation amount of Base
Rent charged during the preceding term of the Lease.

 

Upon determination of the initial monthly Base Rent for the Extension Term in
accordance with the terms outlined above, Landlord and Tenant shall immediately
execute an amendment to the Lease. Such amendment shall
set forth among other things, the initial monthly Base Rent for the Extension Term and the actual commencement date and expiration date of the Extension Term. Tenant shall have no other right to extend the Lease Term under this Rider unless
Landlord and Tenant otherwise agree in writing.

 

4. Condition of Premises and Brokerage Commissions for the Extension Term. If
Tenant timely and properly exercises this Extension Option, in strict accordance
with the terms contained herein: (1)
Tenant shall accept the Premises in its then "AS-IS" condition and, accordingly, Landlord shall not be required to perform any additional
improvements to the Premises; and (2) Tenant hereby agrees that it will be
solely responsible for
any and all brokerage commissions and finder's fees payable to any broker now or hereafter procured or hired by Tenant or

 

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who otherwise claims a commission based on any act or statement of Tenant ("Tenant's Broker") in connection with
the Extension Option. Tenant hereby further agrees that Landlord shall in no
event or
circumstance be responsible for the payment of any such commissions and fees to Tenant's Broker, and Tenant shall indemnify, defend
and hold Landlord free and harmless against any liability, claim, judgment, or
damages with respect thereto, including attorneys' fees and costs.

 

5. Limitations On, and Conditions To, Extension Option. This Extension Option is
personal to Tenant or any transferee pursuant to a Permitted Transfer and may
not be assigned, voluntarily
or involuntarily, separate from or as part of the Lease. At Landlord's option, all rights of Tenant under this Extension Option shall terminate and be of no force or effect if any of the following individual events occur or any combination thereof occur: (1) Tenant has been in monetary or other material default beyond any applicable cure period at any time during the Lease Term, or is in default beyond any applicable cure period of any monetary or other material provision
of the Lease on the date Landlord receives the Extension Option Notice; and/or
(2) Tenant has assigned its rights and obligations under all or part of the
Lease or Tenant has subleased all or part of the Premises in a transfer (except
in connection with a Permitted Transfer); and/or (3) Tenant's financial
condition is unacceptable
to Landlord at the time the Extension Option Notice is delivered to Landlord; provided, however, that if Landlord determines that Tenant's financial condition is unacceptable, such determination must be based on good faith, taking into consideration
all relevant factors; and/or (4) Tenant has failed to exercise properly this
Extension Option in
a timely manner in strict accordance with the provisions of this Rider; and/or (5) Tenant no longer has possession of the entire
Premises pursuant to the Lease, or if the Lease has been terminated earlier,
pursuant to the terms and provisions of the Lease.

 

6. Time is of the Essence. Time is of the essence with respect to each and every
time period described in this Rider.

RIDER 1

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