Exhibit 10.58


 


COMMERCIAL
MORTGAGE NOTE


(for use in New Jersey)


 


CROWN BANK, N.A.


 


 


Amount:  $5,375,000.00


 


Dated:  January 4, 2006 


 


 


FOR VALUE RECEIVED, the undersigned (individually and collectively (if more than one),
jointly and severally, the “Borrower”), with an address at 1172 Castro Street,
Mountain View, CA 94040, unconditionally promises to pay to the order of Crown
Bank, N.A.  (the “Bank”), at its office
located at 715 Route 70, P.O. Box 130, Brick, New Jersey 08723, or at such
other place as the Bank may direct, FIVE MILLION THREE HUNDRED SEVENTY-FIVE
THOUSAND DOLLARS ($5,375,000.00), together with interest at the rate and on the
terms provided in this Commercial Mortgage Note (including all renewals,
extensions and/or modifications, this “Note”). 
The Commitment Letter from the Bank to Borrower, this Note and all
documents executed in connection with this Note are referred to herein
collectively as the “Loan Documents.”


 


1.                                      INTEREST RATE.  The
Borrower will pay the Bank interest on the unpaid principal balance at the
annual rate set forth below (calculated on the actual number of days elapsed
over a 360-day year) from the date of this Note until the entire principal
balance has been paid whether or not judgment is obtained. At no time, however,
will the interest rate exceed the maximum allowable by law.


 


ý                                   Adjustable Rate.  For
the first year of this Note, the interest rate will be fixed at eight and
one-quarter (8.25 %) percent, which is equal to the Wall Street Journal Prime
Rate plus one (1%) percent and then adjusted annually to a fixed rate for the
year equal to the Wall Street Journal Prime Rate plus one (1%) percent, with a
floor rate of seven and one-half (7.50%) percent at all times, subject to the
Term Loan Agreement.


 


2.                                      TERM.  This
Note matures, and all unpaid principal, accrued interest and all other amounts
recoverable under the Loan Documents are payable on February 1, 2016 (the “Maturity
Date”).


 


3.                                      PAYMENTS.  The
Borrower will pay principal and interest and real estate taxes by making
payments as follows (which payments, will be applied first to any fees, costs,
expenses or charges under the Loan Documents, then to the payment of accrued
interest, and the balance only applied to principal): 12 consecutive monthly
installments of principal and interest in the amount of $46,202.30 plus real
estate taxes, said amount being based upon a twenty (20) year amortization schedule at
the interest rate as set forth above with principal and interest payments
adjusted annually at the time of interest rate reset.  Payments will be made by the Borrower on the
first day of each month beginning March 1, 2006, until the Maturity Date
of February 1, 2016, at which time the Borrower will pay all remaining
outstanding principal plus interest and any fees and charges incurred.


 


4.                                      PREPAYMENTS. 
During the term of the Loan, for the loss on income, there shall be a
premium for the prepayment of the Loan before its scheduled maturity.  (a)  Except as set forth in subsection (b) below,
if the Loan is prepaid, in whole or in part, within the first year of its term,
the premium shall be five (5%) percent of the prepaid amount.  If prepayment occurs in the second year of
its term, the premium shall be four (4%) percent.  If prepayment occurs in the third year the prepayment
shall be three (3%) percent.  If
prepayment occurs in the fourth year the premium shall be two (2%) percent, and
one (1%) percent if it occurs in the fifth year.  At no time shall the prepayment premium be
less than one (1%) percent.  (b)  If
the Borrower sells one of the two buildings to an independent party at a later
date, the Bank will assess a one (1%) percent premium provided that the Bank
receives a payment reducing the Loan in an amount equal to forty (40%) percent
of the initial appraised value and the remaining parcel has a loan to value not
less than sixty (60%) percent of the remaining balance of the Loan.  In addition, the Borrower must pay a Five
Thousand ($5,000.00) and 00/100 Dollar release fee for the release of the
parcel.


 


5.                                      LATE FEE.  If
the Bank does not receive the entire amount of any payment required under this
Note within fifteen (15) days of its due date, the Borrower will pay a late fee
of five (5%) percent of that entire amount. 
Any such late charge assessed is immediately due and payable.


 





















 


6.                                      MORTGAGE, OTHER COLLATERAL AND
GUARANTEES.  Borrower’s payment and performance
obligations hereunder shall be secured by a first mortgage lien on certain real
property located generally at 735 and 745 Airport Road, (Block 1160.01, Lots
229 and 232) Lakewood, Ocean County, New Jersey (referred to as the “Property”
and sometimes referred to as the “Mortgaged Premises”), assignment of rents and
leases on the Mortgaged Premises, a lien on all property of Vivus Real Estate,
LLC affixed to and used in the operation of the Mortgaged Premises, and the
assignment of a $700,000.00 Certificate of Deposit to be opened with the Bank
prior to or at Closing and may also be secured by other liens, assignments or
security interests in certain property and guaranteed by certain guarantees
(any party executing a guarantee being referred to herein as a “Guarantor”).  Any security interests in any other
collateral given to the Bank by any Borrower or Guarantor in connection with
any other obligation to the Bank will also secure repayment of this Note,
including but not limited to fixtures, rents, equipment and machinery.


 


7.                                      REPRESENTATIONS AND WARRANTIES. 
Borrower continually represents and warrants to the Bank that (a) if
Borrower or any Guarantor is an entity, it is duly organized and existing and
in good standing in the state of its organization, has the authority to conduct
business in the state where the Mortgaged Premises are located and has the
power to own its properties and to carry on its business, and the execution,
delivery and performance of the Loan Documents have been duly authorized by all
necessary action; (b) the execution, delivery, and performance of the Loan
Documents by Borrower and any other parties thereto do not require the consent
or approval of any other party and do not conflict with, result in a violation
of, or constitute a default under any agreement or other instrument binding
upon such parties or any law, regulation, court decree, or order applicable to
such parties; and (c) the Loan Documents constitute legal, valid and
binding obligations of the parties thereto enforceable in accordance with their
respective terms.


 


8.                                      AFFIRMATIVE COVENANTS. 
Borrower covenants and agrees with the Bank that, at all times any
amounts owing to the Bank exist, Borrower shall (a) furnish or cause
others under the control of Borrower to furnish such information (including,
without limitation, tax returns and financial information) with respect to
Borrower’s or any Guarantor’s financial condition and business operations as
the Bank may reasonably request from time to time and cooperate; (b) permit
employees or agents of the Bank full and complete access to the Mortgaged
Premises, and to Borrower’s financial records, to make extracts from and/or audit
such records and to discuss Borrower’s business, finances and affairs with
Borrower’s officers and outside accountants, all at Borrower’s expense, if an
event of default has occurred and is continuing; and (c) observe any
financial covenants set forth in the Commitment Letter, including the Borrower’s
agreement to maintain a checking account for the purpose of transacting the
business of the Borrower, including, but not limited to, direct debit of the
Loan payments under this Note.  At no
time during the term of this Note shall the amount in the account be less than
the monthly payment due under this Note, Borrower will continue to maintain its
authority to do business in the State of New Jersey, where the Mortgaged
Premises are located.


 


9.                                      NEGATIVE COVENANTS.  Borrower covenants and agrees with the Bank that, at all times any
amounts owing to the Bank exist, Borrower shall not permit any secondary
financing on the Mortgaged Premises, unless prior approval of the Bank is
granted; such prior approval shall not be unreasonably withheld so long as the
Borrower applies first to the Bank for such secondary financing.


 


10.                               DEFAULT.  Each
of the following shall constitute an event of default (“Event of Default”)
under this Note:  (a) failure of
Borrower to make any payment to the Bank (whether upon the Maturity Date or
otherwise) when due hereunder; (b) failure of Borrower or any Guarantor to
comply with or to perform any term, condition or covenant contained in the Loan
Documents that remain uncured for fifteen (15) days after Borrower received
written notice of such failure or the occurrence of any default or “Event of
Default” under any other Loan Document or, except for non-monetary default, if
such compliance cannot be effected within fifteen (15) days, Borrower commences
such compliance within the fifteen (15) days, and diligently and continuously
pursues the same; (c) any representation, warranty, certification, or
other information furnished by or on behalf of the Borrower or any Guarantor
was false or misleading in any material respect when made; (d) the
institution of proceedings by or against the Borrower or any Guarantor under
any bankruptcy or insolvency law, or any law for the benefit of creditors or
relief of debtors, (provided, however, that the institution of involuntary
proceedings against the Borrower or any Guarantor will not be an Event of
Default if such proceeding is discharged or dismissed within thirty (30) days
after the commencement date thereof), or a custodianship, trusteeship, receivership
or assignment for the benefit of creditors is imposed upon or sought by the
Borrower, any Guarantor or any part of the Property; (e) the existence of
any liens for taxes due with respect to the Property unless the liens are being
contested in good


 





















 


faith
and adequate reserves have been deposited with the Bank, or construction lien
claims which have not been dismissed for thirty (30) days or for which escrows,
satisfactory in amount to the Bank, have not been established by the Borrower; (f) the
failure of the Borrower or any Guarantor to comply with any other obligation
owed to the Bank, now existing or arising after the date of this Note; and (g) any
event which, in the Bank’s judgment, materially adversely affects (a) the
ability of the Borrower or any Guarantor to perform any of its obligations
under the Loan Documents or any Guaranty as applicable; (b) the business
or financial condition of the Borrower or any Guarantor; or (c) the
operations or value of the Property or other collateral or the Bank’s lien or
security interest on the Property or other collateral.


 


11.                               REMEDIES.  Upon
the occurrence of an Event of Default, at Bank’s option (with the exception of (d) above,
which shall be automatic upon said occurrence), all amounts owing to Bank will become
due and payable immediately, without additional notice of any kind to Borrower
or any Guarantor, and interest will continue to accrue on the full amount
thereof at a rate equal to 2% per annum in excess of the rate of interest
otherwise charged hereunder.  In
addition, the Bank shall have all the rights and remedies provided in the other
Loan Documents or available at law, in equity, or otherwise.  All of the Bank’s rights and remedies shall
be cumulative and may be exercised singularly or concurrently.  Election by the Bank to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make
expenditures or take action to perform any obligation of Borrower or of any
Guarantor shall not affect the Bank’s right to declare an Event of Default and
to exercise its rights and remedies.


 


12.                               RIGHT OF SETOFF. 
Borrower grants to the Bank a contractual possessory security interest
in, and hereby assigns, conveys, delivers, pledges, and transfers to the Bank
all of Borrower’s right, title and interest in and to, Borrower’s present and
future bank accounts.  Borrower
authorizes the Bank to charge or set off all sums owing to the Bank against any
and all such accounts and, at the Bank’s option, to administratively freeze all
such accounts to allow the Bank to protect the Bank’s charge and setoff rights
provided in this paragraph.


 


13.                               EXPENSES.  Borrower agrees to pay the Bank upon demand all reasonable costs and
expenses of collection of this Note (including the reasonable fees and expenses
of outside counsel), and any judicial or non-judicial enforcement of the Bank’s
rights under the Note and other Loan Documents including, without limitation,
any court proceeding, bankruptcy or insolvency case, appeal, or post-judgment
collection services.


 


14.                               GENERAL PROVISIONS.  Borrower waives presentment, demand for
payment, protest, notice of dishonor, and notice of default or of an Event of
Default.  Upon any change in the terms of
this Note or any of the other Loan Documents, and unless otherwise expressly
stated in writing, Borrower and any Guarantor shall not be released from
liability.  Borrower agrees that the Bank
may renew or extend this Note, or release any party, Guarantor or collateral,
or impair, fail to realize upon or perfect the Bank’s security interest in any
collateral, and take any other action deemed necessary by the Bank without the
consent of or notice to anyone.


 


15.                               GOVERNING LAW.  This
Note shall be construed according to the laws of the State of New Jersey,
without regard to conflicts of law.


 


16.                               SEVERABILITY.  If
any provision of the Loan Documents is found to be invalid or unenforceable,
such provision shall be stricken and all remaining provisions of the Loan
Documents shall remain valid and enforceable.


 


17.                               WAIVER; AMENDMENTS.  No
amendment of the Loan Documents, and no waiver of any one or more of the
provisions hereof and thereof, shall be effective unless set forth in a writing
prepared by Borrower or Guarantor, whichever is applicable, and signed by the
Bank; provided, however, that any such waiver shall be restricted to the
matters specified in such writing.


 


18.                               ENTIRE AGREEMENT.  The
Loan Documents constitute the sole agreement of the parties regarding the
subject matter hereof and thereof and supersede all oral negotiations and prior
writings regarding the subject matter hereof and thereof.


 


19.                               WAIVER OF JURY TRIAL; CONSENT TO
JURISDICTION; SERVICE OF PROCESS.  BORROWER
KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY MATTER
RELATING TO, ARISING FROM OR IN CONNECTION WITH THE LOAN DOCUMENTS.  BORROWER ALSO CONSENTS TO THE JURISDICTION OF
THE COURTS OF THE STATE WHOSE LAWS GOVERN THE LOAN DOCUMENTS AND


 





















 


AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY
MAILING A COPY OF SUCH PROCESS TO BORROWER.


 


20.                               FURTHER ASSURANCES. 
Borrower agrees to cooperate and take all necessary steps as reasonably
requested by the Bank to carry out the spirit and intent of the Loan Documents,
including, without limitation, executing or reexecuting any of the Loan
Documents.


 


21.                               SUCCESSORS AND ASSIGNS.  The
Loan Documents shall be binding upon Borrower and Borrower’s successors and
assigns and shall inure to the benefit of the Bank, its successors and
assigns.  Borrower may not assign or
transfer Borrower’s rights under the Loan Documents without the prior written
consent of the Bank.


 


IN WITNESS WHEREOF, BORROWER, INTENDING TO BE LEGALLY BOUND, HAS
EXECUTED THIS NOTE AS OF THE DATE ABOVE WRITTEN.


 


	
  ATTEST OR WITNESSED BY:

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
  Vivus, Inc., a Delaware Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Jay Samuels

  	
   

  	
  By:

  	
   /s/ Timothy E. Morris

  	
   

  
	
  Jay Samuels, Esq.

  	
   

  	
  Timothy E. Morris, Vice President Finance

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Vivus Real Estate, LLC,

  
	
   

  	
  a New Jersey Limited Liability Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Jay Samuels

  	
   

  	
  By:

  	
   /s/ Timothy E. Morris

  	
   

  
	
  Jay Samuels, Esq.

  	
   

  	
  Vivus, Inc., a Delaware Corporation, Sole Member

  Timothy E. Morris, Vice President Finance

  and Chief Financial Officer