Exhibit 10.59


 


MORTGAGE
AND SECURITY AGREEMENT


 


CROWN BANK,
N.A.


 


	
  Date:

  	
  January 4, 2006

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mortgagee:

  	
  CROWN BANK, N.A.

  	
   

  	
   

  
	
   

  	
  715 Route 70

  	
   

  	
   

  
	
   

  	
  Brick, New Jersey 08723

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  If Mortgagor is not the Borrower, the Borrower is also: Vivus, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mortgagor:

  	
  Vivus Real Estate, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  o Individual(s)

  	
   

  	
   

  
	
   

  	
  o Husband and wife

  	
   

  	
   

  
	
   

  	
  o General partnership/joint venture

  	
  State:

  	
   

  
	
   

  	
  o Limited partnership

  	
  State:

  	
   

  
	
   

  	
  ý Limited Liability Company

  	
  State: New Jersey

  	
   

  
	
   

  	
  o Corporation 

  	
  State:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address of

  	
  1172 Castro Street

  	
   

  	
   

  
	
  Mortgagor:

  	
  Mountain View, CA 94040

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mortgaged

  	
  See Exhibit “A”

  	
   

  	
   

  
	
  Premises:

  	
  Tract 1:

  	
   

  	
   

  
	
   

  	
  Street 735 Airport Road 

  	
   

  	
   

  
	
   

  	
  Township Lakewood County Ocean, New Jersey

  	
   

  
	
   

  	
  Tax Map Block(s) 1160.01, Lot(s) 229 

  	
   

  
	
   

  	
  Tract 2:

  	
   

  	
   

  
	
   

  	
  Street 745 Airport Road 

  	
   

  	
   

  
	
   

  	
  Township Lakewood County Ocean, New Jersey

  	
   

  
	
   

  	
  Tax Map Block(s) 1160.01, Lot(s) 232

  	
   

  	
   

  
					



 


Obligations:  Loan in the principal amount of $5,375,000.00 described in that certain Commercial Mortgage
Note dated even date hereof by Borrower in favor of Mortgagee (the “Note”).


 


o  This is a purchase money mortgage
given to secure all or a portion of the consideration paid for the Mortgaged
Premises.


 


ý  This is a first purchase
money mortgage lien on the Mortgaged
Premises.


 


1.                                      DEFINITIONS; INCORPORATION OF
NOTE.  All terms not otherwise defined herein shall
have the meaning given them in the Note, and if not defined, then the Uniform
Commercial Code in effect in the state in which the Mortgaged Premises is
located.  All liabilities of Mortgagor to
Mortgagee, whether under the Note, any guarantee, any other Loan Document,
other obligation or otherwise, now existing or hereafter incurred, matured or
unmatured, direct or contingent, joint or several, whether created directly or
acquired by assignment or otherwise, and any extensions, modifications or
renewals thereof and substitutions therefore; all amounts paid by Mortgagee on
behalf of Mortgagor; all principal, interest, late charges, penalties, fees and
all other such sums due or recoverable under the Loan Documents or otherwise
are referred to herein as the “Indebtedness.”


 


2.                                      PROPERTY MORTGAGED.  To
secure payment of the Indebtedness and performance of Mortgagor’s obligations
to Mortgagee under the Loan Documents, Mortgagor mortgages, grants, and conveys
to Mortgagee all of the rights and interest which Mortgagor now has or will
acquire with regard to the following property (together the “Property”):


 


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a.                                       the Mortgaged Premises;


 


b.                                      all buildings, structures and other
improvements located on the Mortgaged Premises and all rights of way, easements
and appurtenances;


 


c.                                       all fixtures, machinery, equipment and other
articles of real, personal or mixed property of Mortgagor attached to, situate
or installed in or upon, or used in the operation or maintenance of, the
Mortgaged Premises or any plant or business situated thereon, whether or not
such real, personal or mixed property is or shall be affixed to the same, and
all replacements, substitutions, accretions and proceeds of the foregoing,
including all furnishings, furniture, and appliances; machinery and equipment
of any kind whatsoever;  and all parts,
fittings, accessories, accessions, substitutions and replacements thereof;


 


d.                                      all leases, licenses, occupancy agreements or
agreements to lease all or any part of the Mortgaged Premises and all
extensions, renewals, amendments, and modifications thereof, and any options,
rights of first refusal, or guarantees relating thereto; all rents, income,
receipts, revenues, security deposits, escrow accounts, reserves, issues,
profits, and payments of any kind payable under the leases or otherwise arising
from the Mortgaged Premises; all contract rights, accounts receivable and
general intangibles relating to the Mortgaged Premises or the use, occupancy,
maintenance, construction, repair or operation thereof; all management
agreements, franchise agreements, utility agreements and deposits, building
service contracts, maintenance contracts, construction contracts, architect’s
agreements, and plans and specifications; all warranties and guaranties; and
all permits, licenses and approvals;


 


e.                                       all estates, rights, privileges, easements,
and appurtenances of any kind benefiting the Mortgaged Premises; all means of
access to and from the Mortgaged Premises, whether public or private; all water
and mineral rights; and all rights of Mortgagor as declarant under any
declaration of condominium or association applicable to the Mortgaged Premises;
and


 


f.                                         all “Proceeds” of any of the Property, which
shall additionally include whatever is received upon the use, lease, sale,
exchange, collection, or other utilization or any disposition of any of the
Mortgaged Premises, voluntary or involuntary, whether cash or noncash,
including proceeds of insurance and condemnation awards, rental or lease
payments, accounts, chattel paper, instruments, documents, contract rights,
general intangibles, equipment and inventory.


 


3.                                      SECURITY AGREEMENT.  This
Mortgage is also a security agreement pursuant to the Uniform Commercial
Code.  Mortgagor agrees to execute and
deliver to Mortgagee, upon request, any financing statements or other documents
as Mortgagee may require to perfect its security interest.  Mortgagor irrevocably appoints Mortgagee
attorney-in-fact for Mortgagor to execute, deliver and file such
instruments.  This Mortgage is effective
as a financing statement under the Uniform Commercial Code and may be filed as
a “fixture filing.”


 


4.                                      COVENANTS.  The
Mortgagor, represents, warrants, covenants and agrees that:


 


a.                                       Title and Right to Mortgage. Mortgagor has good and marketable fee
simple absolute title to the Mortgaged Premises subject only to those
exceptions to title more particularly described in the title commitment issued
to, and accepted by, Mortgagee in connection with this transaction (the “Permitted
Encumbrances”) and Mortgagor shall defend the validity, priority and
enforceability of the lien of this Mortgage against the claims of all persons
excepting only those claiming under Permitted Encumbrances.  Mortgagor has full power and lawful authority
to subject the Mortgaged Premises to the lien of this Mortgage. The execution,
delivery and performance of this Mortgage and the other Loan Documents will not
contravene any legal requirements or any agreement, document or instrument to
which Mortgagor is a party or by which Mortgagor or the Mortgaged Premises is
bound.  Mortgagor shall make, execute,
acknowledge and deliver all such further or other deeds, documents, instruments
or assurances and cause to be done all such further acts and things as may at
any time be required by Mortgagee to confirm and fully protect the lien and
priority of this Mortgage.


 


b.                                      Taxes and Other Charges. 
Mortgagor shall pay when due and before interest or penalties commence
to accrue thereon, all taxes, assessments, water and sewer rents, condominium
or other homeowners association fees, dues or maintenance charges, levies,
encumbrances and all other charges or claims of any nature and kind, which may
be assessed, levied, imposed, suffered, placed or filed at any time against the
Property or any part thereof or which by any present or future law may have
priority.  If requested by Mortgagee,
Mortgagor will


 


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immediately
deliver to Mortgagee receipts evidencing such payments.  If such receipts are not delivered within ten
(10) days after such request, then Mortgagee will have the right to
procure an official search, the cost of which shall be added to the monies secured
by this Mortgage.  If Mortgagor is a
corporation or partnership, Mortgagor shall keep in effect and in good standing
its existence and rights as a corporation or partnership, as the case may be,
under the laws of the state of its formation and its right to own property and
transact business in the state in which the Mortgaged Premises is situated and
file returns for all taxes with the proper governmental authorities, and pay,
when due and before interest or penalties are due thereon, all taxes owing to
any governmental authorities.


 


c.                                       Insurance.  Mortgagor will maintain hazard
insurance and flood insurance (if the Mortgaged Premises is in an area
designated as a flood hazard area by any governmental body) on the Mortgaged
Premises.  Mortgagor shall also maintain
any other insurance as Mortgagee may require, including title insurance,
builder’s risk insurance, general public liability insurance and loss of rents
coverage.  The insurer, agent or broker,
amounts of coverage, and forms of all policies must be acceptable to
Mortgagee.  These policies will become
the absolute property of Mortgagee on the occurrence of an Event of Default
under any of the Loan Documents.  Each
insurance company concerned is hereby authorized and directed to make payment
under such insurance including return of unearned premiums, directly to
Mortgagee instead of to Mortgagor and Mortgagee jointly, and Mortgagor appoints
Mortgagee, irrevocably, as Mortgagor’s attorney-in-fact to endorse any draft
therefore or assign any policy to itself or its nominee in the event of
foreclosure of this Mortgage or other extinguishment of the debt evidenced by
the Note.  All policies shall provide
that the insurer cannot cancel or refuse to renew without giving at least 30
days’ prior notice to Mortgagee and will insure Mortgagee as mortgagee, as to
interests in real property and fixtures, and will otherwise name Mortgagee as
additional insured, with respect to general public liability insurance, or
under a lender’s loss payable endorsement, as to interests in personal property
(or as otherwise designated by Mortgagee). 
All insurance proceeds will be payable to Mortgagor and Mortgagee.  In case of any loss or damage to the
Property, the Mortgagor shall promptly notify the insurance company and Mortgagee.  Mortgagee may, in its absolute discretion,
use the insurance proceeds received to (i) repair and restore the
Mortgaged Premises in accordance with Mortgagee’s requirements, or (ii) reduce
any amounts due under this Mortgage and/or the Note.  If Mortgagee elects to apply such proceeds to
restore the Mortgaged Premises and, in Mortgagee’s judgment, said proceeds are
insufficient to complete the restoration, the Mortgagor shall deposit the
amount of such deficiency with Mortgagee. 
If Mortgagee elects to apply such proceeds to reduce any amounts due
under this Mortgage and/or the Note, Mortgagee shall pay to the Mortgagor any
money left after paying the entire principal, interest, and any other amounts
due under this Mortgage and the Note.


 


d.                                      Repairs; Inspection. 
Mortgagor will keep the Mortgaged Premises in good condition and repair
and will not damage, destroy, abandon or permit any impairment or deterioration
of the Mortgaged Premises.  The Mortgagor
will allow Mortgagee, its agents or representatives to enter onto and inspect
the Mortgaged Premises at reasonable times, except in any emergency when
Mortgagee will have the right to enter the Mortgaged Premises at any time.  The Mortgagor will make such repairs or
replacements as may be reasonably required by Mortgagee and will replace any
fixture or appliance or equipment which is destroyed or removed with another of
at least equal quality and condition, within 30 days of such destruction or
removal.  Mortgagor shall not, without
the prior written consent of Mortgagee, (i) abandon the Mortgaged Premises
or any portion thereof or allow the same to become vacant; (ii) commit or
suffer waste with respect to the Mortgaged Premises; (iii) impair or
diminish the value or integrity of the Mortgaged Premises or the priority or
security of the lien of this Mortgage; (iv) remove, demolish or materially
alter any of the Mortgaged Premises except that Mortgagor shall have the right
to remove and dispose of, free of the lien of this Mortgage, such fixtures as
may, from time to time, become worn out or obsolete, provided that,
simultaneously with or prior to such removal, any such fixtures shall be
replaced with other fixtures which shall have a value and utility at least
equal to that of the replaced fixtures and, by such removal and replacement,
Mortgagor shall be deemed to have subjected such replacement fixtures to the
lien and priority of this Mortgage; (v) make, install or permit to be made
or installed, any additions or improvements to the Mortgaged Premises except in
a good and workmanlike manner, free of mechanic’s liens, in compliance with
legal requirements, and in accordance with plans and specifications approved by
Mortgagee; or (vi) make, suffer or permit any nuisance to exist on the
Mortgaged Premises or any portion thereof.


 


e.                                       Compliance with Laws and Regulations. 
Mortgagor shall comply with all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations,
restrictions and requirements, and Mortgagor will not permit the Mortgaged


 


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Premises
to be used for any unlawful purpose.  If
the Mortgaged Premises is a condominium or part of a planned unit development,
Mortgagor will perform all of Mortgagor’s obligations under the master deed,
declaration covenants or by-laws and regulations creating or governing same,
and the documents constituent thereto.


 


f.                                         Condemnation.  In
the event of any condemnation or taking of any part of the Mortgaged Premises
by any public or quasi-public authority or corporation, all proceeds otherwise
allocable to Mortgagor, after deducting therefrom all costs and expenses,
including, without limitation, attorneys’ fees incurred by Mortgagee in
connection with the collection of such proceeds, are assigned and shall be paid
to Mortgagee and applied, at Mortgagee’s election, (i) toward restoration
of the Mortgaged Premises; or (ii) to the Indebtedness.  No settlement for damages sustained shall be
made by Mortgagor without Mortgagee’s prior written approval.  Mortgagee shall have the right to prosecute
to final determination, or settlement, an appeal or other appropriate
proceedings in the name of Mortgagee or Mortgagor, for which Mortgagee will then
be appointed as attorney-in-fact for Mortgagor, which appointment, being for
security, is irrevocable.  Nothing herein
shall limit the rights otherwise available to Mortgagee, at law or in equity,
including the right to intervene as a party to any condemnation proceeding.


 


g.                                      Certification of Amount Due.  Upon
the request of Mortgagee, Mortgagor will, within five (5) days after such
request, certify to Mortgagee in writing: (i) the amount due under this
Mortgage and the Note, and (ii) that there are no defenses to its
obligations under any of the other Documents or, if there are defenses, a
description of such defenses.


 


h.                                      No Transfer of Title or Further Encumbrances. 
Without the prior written consent of Mortgagee, Mortgagor will not sell,
convey, transfer or alter any interest or permit any of the foregoing in all or
any part of the Property.  Mortgagor will
not create, incur, assume or suffer to exist any mortgage, lien, security
interest, encumbrance, attachment, levy, distraint or other judicial process of
any kind on or with respect to any portion of, or interest in, the Property.


 


i.                                          Covenants Regarding Financial Statements and
Information; Inspection of Books and Records.  Mortgagor will provide
Mortgagee with any and all information regarding the Mortgagor, the Mortgaged
Premises or any guarantor as requested by Mortgagee, including annual financial
statements, manually signed copies of federal and state tax returns and
certified rent rolls as to the Mortgaged Premises.  Mortgagor will permit Mortgagee to inspect
and make copies of the Mortgagor’s books, records and income tax returns upon
reasonable notice.


 


j.                                          Indemnification. 
Mortgagor will indemnify, defend and save harmless Mortgagee against and
from all liabilities, obligations, damages, penalties, claims, costs, charges
and expenses, including, without limitation, reasonable attorneys’ fees, which
may be imposed upon or incurred by Mortgagee by reason of the Mortgagor’s
ownership, use or operation of the Mortgaged Premises, including (but not
limited to) those arising by reason of any action against Mortgagor or any
other party to any of the transactions evidenced by the Loan Documents.  Unless arising from the gross negligence or
willful misconduct of Mortgagee, this indemnity will apply notwithstanding any
negligent or other contributory conduct by or on the part of any third parties
and will survive:  (i) repayment of
the Indebtedness and the full release of this Mortgage; (ii) the
extinguishment of Mortgagee’s lien by foreclosure or any other action; or (iii) 
the delivery of a deed in lieu of foreclosure.


 


5.                                      ENVIRONMENTAL COVENANTS.  The
Mortgagor further warrants, represents, covenants and agrees that:


 


  a.                                 Except as may have been disclosed in writing
to Mortgagee, neither Mortgagor nor, to the best of Mortgagor’s knowledge, any
other person has (i) used, installed or disposed of any Hazardous
Materials (hereafter defined) in, on, from, or affecting the Mortgaged Premises
except in full compliance with Applicable Environmental Laws (hereafter
defined); or (ii) received any notice from any governmental authority with
regard to Hazardous Materials in, on, from or affecting the Mortgaged
Premises.  To the best of Borrower’s
knowledge, no portion of the Mortgaged Premises is or has been at any time an “industrial
establishment” as defined in the New Jersey Industrial Site Recovery Act (“ISRA”),
and Mortgagor does not know or have reason to know of any lien or threatened
lien on its personal or real property requiring or obligating Mortgagor to make
payment pursuant to the New Jersey Spill Compensation and Control Act (“SCCA”).  If the Mortgaged Premises is or has been an “industrial
establishment,” Mortgage shall provide Mortgagee with a letter of non-applicability
on and as of the date hereof.  If the
Mortgaged Premises was used as an “industrial establishment,” and hazardous
substances were


 


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handled
there, and Mortgagor’s transactions constitute a closing, termination of, or
transfer of, operations, Mortgagor has provided Mortgagee with an approved
cleanup plan or a negative declaration, obtained at its own expense, and
Mortgagor, at its own expense, shall implement the cleanup plan to clean up
such contamination.


 


  b.                                Mortgagor shall not use the Mortgaged
Premises, nor allow it to be used, to generate, manufacture, refine, transport,
treat, store, handle, dispose of, transfer, produce or process Hazardous
Materials except in full compliance with Applicable Environmental Laws.  Mortgagor shall not cause or permit,
intentionally or unintentionally, a release of Hazardous Materials in, on, from
or affecting the Mortgaged Premises or any other use, installation, or
disposition of Hazardous Materials in violation of Applicable Environmental
Laws.


 


  c.                                 If Mortgagor receives any notice from any
governmental authority with regard to Hazardous Materials in, on, from or
affecting the Mortgaged Premises, or any notice of violation of Applicable
Environmental Laws, Mortgagor shall promptly notify Mortgagee.  Mortgagor shall conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal, and
other actions necessary to clean up and remove all Hazardous Materials in, on,
from or affecting the Mortgaged Premises in accordance with all Applicable
Environmental Laws and to the satisfaction of Mortgagee.


 


  d.                                The term “Applicable Environmental Laws”
shall mean, without limitation, all legal requirements of any governmental
authority pertaining to the preservation or enhancement of the quality of the
environment or regulating or restricting the use, transfer, storage or
remediation of Hazardous Materials, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601,
et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 6901, et seq.), the SCCA, the ISRA and the rules and
regulations adopted and publications promulgated pursuant thereto at any
time.  The term “Hazardous Materials”
shall mean, without limitation, any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials, asbestos or any material containing asbestos,
or any other substance or material regulated under any Applicable Environmental
Laws.


 


  e.                                 At any time while any Indebtedness is
outstanding, upon reasonable suspicion of any environmental condition,
violation or problem, Mortgagee may require that the Mortgagor, at the
Mortgagor’s expense and within thirty (30) days after notice from Mortgagee,
promptly cause such tests, inspections and/or procedures to be conducted by a
professional engineering firm or others for the purpose of ensuring compliance
with all Applicable Environmental Laws and having the Mortgaged Premises
certified to Mortgagee as such.  Without
limitation of Mortgagee’s rights, (i) Mortgagee will retain the right to
enter onto the Mortgaged Premises and cause such tests, inspections, and/or
procedures to be conducted and having the Mortgaged Premises certified to
Mortgagee as such; and (ii) Mortgagee will have the right, but not the
obligation, to enter onto the Mortgaged Premises or any other facility operated
by Mortgagor or to take such other actions as are necessary or advisable to
test, cleanup, remove, resolve, or minimize the impact of, any environmental
condition which, in the sole opinion of Mortgagee, could jeopardize or affect
Mortgagee’s collateral security.  All
costs and expenses incurred by Mortgagee in the exercise of any such rights
will be payable by Mortgagor upon demand and will be secured by this Mortgage
and other collateral held by Mortgagee.


 


6.                                      TAX AND INSURANCE ESCROW.  The
Mortgagor will, if required by Mortgagee, make regular monthly payments to
Mortgagee in addition to and simultaneously with payments due under the Note
equal to 1/12 of the actual or estimated yearly real estate taxes, assessments,
and insurance premiums on the Mortgaged Premises.  In the even the Mortgagee requests the
Mortgagor to make payments of real estate taxes or insurance on the Mortgaged
premises, then Mortgagor shall deposit two (2) months of payments into an
escrow account. If permitted by law, such funds retained by Mortgagee will bear
no interest and may be commingled with other funds of Mortgagee.  The Mortgagor pledges these funds as
additional security for the sums secured by this Mortgage.  These funds will not be deemed to be trust
funds and Mortgagee does not act as the Mortgagor’s agent in the payment of
taxes, assessments, and insurance premiums, or other charges.  Escrowed funds shall be used by Mortgagee to
pay the taxes, assessments, and insurance premiums when due.  If the amounts held by Mortgagee are
insufficient at any time to pay the taxes, assessments, and insurance premiums
as they fall due, the Mortgagor will pay to Mortgagee on demand any amount
necessary to make up the deficiency.  The
Mortgagor will not


 


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receive
any credit on or make any deduction from amounts due under the Note by reason
of this deposit with Mortgagee.


 


7.                                      PROTECTION OF MORTGAGEE’S
SECURITY.  If Mortgagor fails to pay any lien or charge
against the Mortgaged Premises when due, or otherwise fails to perform any
covenant or agreement in the Loan Documents, or upon any event which
jeopardizes the value of the Mortgaged Premises, then Mortgagee, at its option
and sole discretion, may disburse such sums, and take such actions as necessary
to protect its interest, including, but not limited to, defending any action or
proceeding, disbursing reasonable attorneys’ fees and entering upon the
Mortgaged Premises to make repairs without becoming liable to Mortgagor or any
other person.  Any amount disbursed by
Mortgagee will be added to the principal of the Note, accrue interest from the
date of disbursement at a rate of two percent in excess of the rate specified
in the Note and be secured by this Mortgage. 
Upon demand, the Mortgagor will repay these amounts, together with
interest, to Mortgagee.


 


8.                                      EVENTS OF DEFAULT.  An
event of default will occur under this Mortgage upon each of the following
events (each, an “Event of Default”):


 


  a.                                 any default or “Event of Default” under any
other Loan Document;


 


  b.                                failure of Mortgagor to pay any sum required
to be paid under this Mortgage as and when due; or


 


  c.                                 nonperformance of, or noncompliance with, any
of the agreements, covenants, conditions, warranties, representations or other
provisions contained in this Mortgage.


 


9.                                      REMEDIES.  Upon
the occurrence of an Event of Default, and at all times thereafter, Mortgagee
shall have the right to enforce its rights under this Mortgage and the other
Loan Documents by exercising such remedies as are available to Mortgagee under
applicable law, either by suit in equity or action at law, or both, whether for
specific performance of any provision contained in this Mortgage or any of the
other Loan Documents or in aid of the exercise of any power granted in this
Mortgage or the other Loan Documents.


 


  a.                                 Mortgagee shall have the right to obtain
judgment for the Indebtedness (including all amounts advanced or to be advanced
by Mortgagee, all costs and expenses of collection and suit, including any
bankruptcy or insolvency proceeding affecting Mortgagor, and reasonable
attorneys’ fees incurred in connection with any of the foregoing) together with
interest on such judgment at the highest rate set forth in the Note until
payment in full is received by Mortgagee.


 


  b.                                Mortgagee shall have the right to institute
an action of mortgage foreclosure against the Mortgaged Premises or take such
other action for realization on the security provided herein as applicable law
or the provisions of the Loan Documents may allow.


 


  c.                                 Mortgagee may, at any time without notice,
either in person, by agent or by a receiver appointed by a court, and without
regard to the adequacy of any security for the Indebtedness, enter upon the
Mortgaged Premises and, with or without taking possession of the Mortgaged
Premises, and with or without legal action, collect all income (which term
shall also include amounts determined by Mortgagee as fair rental value for use
and occupation of the Mortgaged Property by any person, including Mortgagor)
and, after deducting all costs of collection and administration expense
including attorneys’ fees and reasonable reserves, apply the net income to any
of the Indebtedness in such order and amounts as Mortgagee in its sole
discretion may determine.  Mortgagee
shall not be accountable for more monies than it actually receives from the
Mortgaged Premises nor shall it be liable for failure to collect the income
therefrom.  Mortgagee shall have the
right to determine the method of collection and the extent to which enforcement
of collection of income shall be prosecuted and Mortgagee’s judgment shall be
deemed conclusive and reasonable.


 


  d.                                Mortgagee may, with or without legal action,
take possession and control of the Mortgaged Premises to the exclusion of
Mortgagor and all others excepting only those claiming under Permitted
Encumbrances.  Mortgagee shall have the
authority while so in possession to insure (at Mortgagor’s expense) against all
risks by reason of having taken such possession and Mortgagor will transfer and
deliver to the Mortgagee all policies of insurance upon the Mortgaged Premises
not theretofore transferred and delivered to Mortgagee.


 


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  e.                                 Mortgagee shall have the right to take
possession of any portion of the Property constituting fixtures or other
personal property subject to the Uniform Commercial Code and any records
pertaining thereto.  Mortgagee shall have
the right to use, operate, manage, lease or otherwise control the Property in
any lawful manner and, in its sole discretion, but without any obligation to do
so, insure, maintain, repair, renovate, alter or remove the Property; use, in
connection with any assembly, use or disposition of the Property any trade
mark, trade name, trade style, copyright, brand, patent right or technical
process used or utilized by Mortgagor; sell or otherwise dispose of all or any
of the Property at any public or private sale at any time or times without
advertisement or demand upon or notice to Mortgagor, all of which are expressly
waived to the extent permitted by law, with the right of Mortgagee or its
nominee to become purchaser at any sale (unless prohibited by statute) free
from any equity of redemption and from all other claims, and after deducting
all legal and other expenses for maintaining or selling the Property, and all
attorneys’ fees, legal or other expenses for collection, sale and delivery,
apply the remaining proceeds of any sale to pay (or hold as a reserve against)
the Indebtedness and exercise all rights and remedies of a secured party under
the Uniform Commercial Code or any other applicable law.


 


  f.                                   Mortgagee, without notice, shall have the
right to obtain the appointment of a receiver for the Mortgaged Premises (which
appointment is consented to by Mortgagor) without regard to the adequacy of any
security for the Indebtedness or the insolvency of Mortgagor.


 


10.                               REMEDIES CUMULATIVE.  All
of Mortgagee’s remedies hereunder are distinct and cumulative and may be
exercised concurrently, independently, or successively and will be in addition
to every other right and remedy provided by law.  If any Indebtedness secured by this Mortgage
is now or hereafter secured by any other collateral, Mortgagee may, at its
option, exhaust all or any part of such collateral and the security hereunder,
either concurrently or independently, and in such order as it may
determine.  Mortgagee may, at any time,
without notice or consent, and without affecting any of its rights or the
liability of Mortgagor or any other party to the transactions evidenced by the
Note and this Mortgage: (a) release any person liable for payment of all
or any part of such Indebtedness or for performance of any obligation; (b) exercise
or refrain from exercising or waive any right Mortgagee may have; (c) accept
additional security of any kind; and (d) release or otherwise deal with
any property, real or personal, securing the Indebtedness.  Any forbearance or action by Mortgagee in
exercising any right or remedy under this Mortgage, the Note, or otherwise
afforded by applicable law, will not be a waiver, or preclude the exercise, of
any such right or remedy by Mortgagee.


 


11.                               NOTICES.  All
notices under this Mortgage must be in writing and may be given by person,
overnight courier or by certified mail, return receipt requested.  Each party must accept the certified mail
sent by the other.  Notices will be
addressed to the other party at the address written at the beginning of this
Mortgage.  Address changes may be made
upon written notice to the other party.


 


12.                               RENEWALS AND EXTENSIONS.  Any
renewal or extension, modification or amendment of the Note will not operate to
release, in any manner, the liability of Mortgagor or any other party liable
for the Indebtedness and their respective successors in interest.  All such modifications are subject to the
protections afforded to modifications in N.J.S.A. 46:9-8.1.


 


13.                               GOVERNING LAW.  This
Mortgage will be governed by, and construed in accordance with, the laws of the
state in which the Property is located.


 


14.                               WAIVER OF JURY TRIAL; SERVICE OF
PROCESS.  THE MORTGAGOR WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY ACTION PROCEEDING, CLAIM, DISPUTE OR COUNTERCLAIM
ARISING OUT OF THE TRANSACTIONS EVIDENCED BY THIS MORTGAGE AND AGREES THAT
SERVICE OF PROCESS MAY BE MADE UPON MORTGAGOR BY MAILING A COPY OF SUCH
PROCESS TO MORTGAGOR.


 


15.                               RECEIPT OF COPY.  The
Mortgagor acknowledges receipt of a true copy of this Mortgage without charge.


 


16.                               NO ORAL CHANGE.  This
Mortgage may only be modified or amended by an agreement in writing signed by
the Mortgagor and Mortgagee, and may only be released, discharged or satisfied
of record by an agreement in writing signed by Mortgagee.


 


7





















 


17.                               JOINT AND SEVERAL LIABILITY. 
Mortgagor, if more than one, are jointly and severally liable, and the
term “Mortgagor” means each of the parties executing this Mortgage.


 


18.  RELEASE PROVISIONS.  The release provisions of the Note are hereby
incorporated.


 


IN WITNESS WHEREOF, MORTGAGOR, INTENDING TO BE LEGALLY BOUND, HAS
EXECUTED THIS MORTGAGE AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN.


 


	
  ATTEST OR WITNESSED BY:

  	
  MORTGAGOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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

  
							



 


8





















 


LIMITED LIABILITY COMPANY
ACKNOWLEDGMENT


 


	
  STATE OF NEW
  JERSEY

  	
  :

  
	
   

  	
  SS.

  
	
  COUNTY OF UNION

  	
  :

  



 


On the 4 day of January,
2006, before me, the undersigned, an Attorney or Notary Public in and for said
State, personally appeared Timothy E. Morris, who acknowledged himself to be
the Vice President Finance and Chief Financial Officer of Vivus, Inc.,
Sole Member of Vivus Real Estate, LLC, a New Jersey Limited Liability Company
and that he as such Member, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the company
by themselves as such Member.


 


IN WITNESS WHEREOF, I
have hereunto set my hand and official seal.


 


	
  /s/ Jay Samuels

  	
   

  
	
  Jay Samuels, Esq.

  
	
  An Attorney at
  Law in the State of New Jersey

  



 


 


	
  MORTGAGE

  	
  Dated: January     ,
  2006

  
	
  VIVUS REAL ESTATE LLC

  	
   

  
	
  TO

  	
  Record and return to:

  
	
  CROWN BANK, N.A.

  	
  CROWN BANK, N.A.

  715 ROUTE 70

  BRICK, NJ 08723

  



 


To
the County Recording Officer of                                                         County:


 


This
Mortgage is fully paid.                                                                                                   
authorizes you to cancel it of record.


 


Dated:                                


 


	
  ATTEST:

  	
  CROWN BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
					



 


9





















 


EXHIBIT “A”


LEGAL DESCRIPTION OF MORTGAGED
PREMISES


 


 


 


 


As
to Tract 1 (Block 1160.01, Lot 229):


 


Being
the same premises conveyed to Mortgagor herein by Deed from 735 Airport Road,
LLC, a New Jersey Limited Liability Company dated of even date herewith and
recorded simultaneously herewith.


 


As
to Tract 2 (Block 1160.01, Lot 232):


 


Being
the same premises conveyed to Mortgagor herein by Deed from 745 Airport Road,
LLC, a New Jersey Limited Liability Company dated of even date herewith and
recorded simultaneously herewith.


 


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This
is a first purchase money mortgage lien.


 


EXHIBIT “B”


SECURITY INTEREST PROPERTY


 


 


The buildings, structures and improvements now and
hereafter constructed on the land described below and the fixtures and equipment
now and hereafter installed thereon and necessary for of adapted to the
appropriate use and enjoyment thereof, all of which shall be deemed real
property; and


 


In addition, all property of the Debtor (Mortgagor
herein) including without limitation, all tangible goods, chattels, fixtures,
furniture, furnishings, machines, equipment, all floor coverings, screens,
awnings, lighting, heating, ventilation, air-conditioning, sprinkling,
plumbing, irrigating, gas, water, sewer, incinerating and laundry systems and
fixtures, all engines, machinery, boilers, ranges, furnaces, refrigerators,
storm windows and doors, which are now or which may hereafter be placed or
located in, or on or upon the premises herein defined, together, with all
additions and accessories thereto, substitutions therefore, and replacements
thereof.  Also, included, without
limitation are oil, gas or electric furnaces and heaters, air-conditioners and
floor coverings.


 


All leases now and hereafter enforce and the rents
due or to come due thereunder.


 


All condemnation awards, rents under the assignment
of rent clause and the proceeds of insurance.


 


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