EXHIBIT 10.9
SUBLEASE
This Sublease ("Sublease") is made as of April 2 , 1999, by and
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between Faroudja Laboratories, Inc., a California corporation ("Sublandlord"),
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Medical, Inc., a Delaware corporation ("Subtenant"), and is
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based upon the following facts and circumstances:
A. Sublandlord is the tenant under that certain Lease Agreement and
addendum thereto dated August 27, 1997 (the "Master Lease"), with ▇▇▇▇
▇▇▇▇▇▇▇▇▇, Trustee, or his Successor Trustee, UTA dated July 20, 1977 (▇▇▇▇
▇▇▇▇▇▇▇▇▇ Survivor's Trust) as amended, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee, or his
Successor Trustee, UTA dated July 20, 1977 (▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Separate Trust) as
amended (the "Master Landlord"), a copy of which Master Lease is attached to
this Sublease and marked as Exhibit A.
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B. Subtenant desires to sublease from Sublandlord the premises
commonly known as ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("Subleased
Premises"), consisting of the entirety of the premises leased to Sublandlord
under the Master Lease. All the defined terms used herein shall have the meaning
given to such terms in the Master Lease, unless otherwise noted herein.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Sublease, and for valuable consideration, the receipt and sufficiency of
which are acknowledged by the parties, the parties agree as follows:
1. Sublease. Sublandlord subleases to Subtenant and Subtenant
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subleases from Sublandlord the Subleased Premises, subject to the terms,
covenants, and conditions contained in this Sublease. Subtenant and Sublandlord
hereby agree that any statements of square footage (rentable, usable or
otherwise) set forth in the Master Lease or in this Sublease that may have been
used in calculating the Basic Rent or any other matters, are not subject to
revision, whether or not the actual square footage is more or less, and the
Basic Rent is not subject to revision. Subtenant hereby acknowledges and agrees
that, as of the start of this Sublease, the Subleased Premises are in good order
and condition, and Subtenant accepts the Subleased Premises on an "AS IS" basis,
in the condition existing as of the start of this Sublease.
2. Term.
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2.1 Subject to the conditions set forth herein, the term of this
Sublease shall commence on April 2 , 1999 or upon delivery by Sublandlord to
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Subtenant of Master Landlord's written consent as provided provided in Section
3.1 below, if later ("Commencement Date").
2.2 Subtenant shall immediately commence efforts to extend its
current lease on the premises adjacent to the Subleased Premises, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (the "Adjacent Premises"), until September 30,
2003. Subtenant agrees to notify Sublandlord immediately if it is successful in
extending said lease.
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2.3 If Subtenant is successful in extending the lease on the
Adjacent Premises on or before July 1, 1999, this Sublease shall extend until,
and expire on, September 30, 2003. If Subtenant is not successful in extending
the lease on the Adjacent Premises on or before July 1, 1999, this Sublease
shall extend until, and expire on, June 30, 2001. The date on which the Sublease
expires is referred to hereinafter as the Expiration Date.
3. Master Landlord's Written Consent to this Sublease.
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3.1 The Master Landlord's written consent to this Sublease in
accordance with the terms of the Master Lease is a condition subsequent to the
validity of this Sublease. If the Master Landlord denies Sublandlord's request
for consent or if Master Landlord's consent has not been obtained and a copy of
that consent delivered to Subtenant on or before the Commencement Date, then
either Sublandlord or Subtenant shall thereafter each have the ongoing right,
subject to the terms of this Section, to terminate this Sublease pursuant to a
notice so stating and delivered to the other party ("Termination Notice"). If
either party gives the Termination Notice, then this Sublease shall terminate
immediately following receipt of the Termination Notice by the other party
("Termination Date"). Subtenant agrees to cooperate with the Sublandlord, at no
cost or expense to the Sublandlord, in obtaining the written consent of the
Master Landlord to this Sublease, which cooperation shall include, but not be
limited to, providing documents, materials and information requested or required
by the Master Landlord.
3.2 Except as provided otherwise above, if this Sublease is
terminated pursuant to one party's giving the Termination Notice, then this
Sublease shall be terminated, Sublandlord shall return to Subtenant the first
month's Basic Rent and the Security Deposit, and the parties shall be released
from any further obligations under this Sublease as of the Termination Date.
4. Basic Rent, Additional Rent, Management Fee, and Security Deposit.
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4.1 Subtenant shall pay Basic Rent ("Basic Rent") on the first
day of each month during the term of this Sublease as follows:
(i) From May 1, 1999, or the Commencement Date, if later,
to May 1, 2000, Subtenant shall pay the sum of Eighteen Thousand Dollars
($18,000) per month. Subtenant shall pay Basic Rent for the first month of this
Sublease concurrently with the execution hereof.
(ii) From May 1, 2000 to September 30, 2000, Subtenant
shall pay the sum of Nineteen Thousand Five Hundred Dollars ($19,500) per month.
(iii) From October 1, 2000 to June 30, 2001, Subtenant
shall pay the sum of Twenty Thousand Dollars ($20,000) per month.
4.2 If the term of this Sublease extends beyond June 30, 2001, in
accordance with Section 2.3 hereof, Basic Rent shall be payable thereafter as
follows:
(i) From July 1, 2001 to September 30, 2001, Subtenant
shall pay the sum of Twenty Thousand Dollars ($20,000) per month.
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(ii) From October 1, 2001 to September 30, 2002, Subtenant
shall pay the sum of Twenty Thousand Five Hundred Dollars ($20,500) per month.
(iii) From October 1, 2002 to September 30, 2003, Subtenant
shall pay the sum of Twenty One Thousand Dollars ($21,000) per month.
4.2 Throughout the term of this Sublease, Subtenant shall pay
Sublandlord, in addition to Basic Rent, all amounts charged to or payable by
Sublandlord under the Master Lease, including, but not limited to, Additional
Rent (which Additional Rent includes without limit: Real Estate Property Taxes,
Property Insurance, Utilities, Landscape, and Miscellaneous charges) and
Management Fees.
4.3 Concurrent with Subtenant's execution of this Sublease,
Subtenant shall deliver to Sublandlord the amount of Thirty-Nine Thousand
Dollars ($39,000) which amount shall constitute the first month's rent and a
security deposit of $21,000 ("Security Deposit") to be held by Sublandlord in
accordance with the terms hereof. The Security Deposit shall be held by
Sublandlord as security for the faithful performance by Subtenant of all the
terms, covenants, and conditions of this Sublease to be kept and performed by
Subtenant during the term. If Subtenant defaults with respect to any provision
of this Sublease, including, but not limited to, any provision relating to the
payment of Basic Rent, Sublandlord may (but shall not be required to) use,
retain and apply all or any part of the Security Deposit for the payment of any
Basic Rent or any other sum in default, or for the payment of any amount which
Sublandlord may spend or become obligated to spend by reason of Subtenant's
default, or to compensate Sublandlord for any other loss or damage which
Sublandlord may suffer as a result of Subtenant's default. If any portion of the
Security Deposit is so used or applied, Subtenant shall, within five (5) days
after written demand therefor, deposit with Sublandlord in cash or a cashier's
check an amount sufficient to restore the Security Deposit to its original
amount, and Subtenant's failure to do so shall constitute a material default
under this Sublease.
4.4 No trust relationship is created between Sublandlord and
Subtenant with respect to the Security Deposit. Sublandlord shall not be
required to keep the Security Deposit separate from its general funds, and
Subtenant shall not be entitled to interest on the Security Deposit. If
Subtenant shall fully and faithfully perform every provision of this Sublease,
the Security Deposit, or any balance thereof, shall be returned to Subtenant
(or, at Sublandlord's option, to the last assignee of Subtenant's interest
hereunder) within fifteen (15) days following the expiration of the Sublease
term or vacation of the Premises by Subtenant, whichever event occurs last. In
the event of a termination of Sublandlord's interest in this Sublease, the
Security Deposit, or any portion thereof not previously applied, may be released
by Sublandlord to Sublandlord's transferee and, if so released, Subtenant agrees
to look solely to such transferee for proper application of the Security Deposit
in accordance with the terms of this Section and the return thereof in
accordance herewith.
5. Use. Subtenant shall use and occupy the Subleased Premises for
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general office and research and development purposes in accordance with the
provisions of the Master Lease and this Sublease, provided that such use shall
be in accordance with all applicable governmental laws and ordinances, and for
no other use or purpose.
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6. Master Lease.
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6.1 As applied to this Sublease, the words "Landlord" and
"Tenant" in the Master Lease shall be deemed to refer to Sublandlord and
Subtenant, respectively, under this Sublease. Except as otherwise expressly
provided in this Sublease, the covenants, agreements, provisions, and conditions
of the Master Lease are made a part of and incorporated into this Sublease as if
recited in full in this Sublease.
6.2 Except as otherwise expressly provided in this Sublease, the
rights and obligations of the Master Landlord and the Tenant under the Master
Lease will be deemed the rights and obligations of Sublandlord and Subtenant,
respectively, under this Sublease, and will inure to the benefit of, and be
binding on, Sublandlord and Subtenant, respectively. As between the parties to
this Sublease only, in the event of a conflict between the terms of the Master
Lease and the terms of this Sublease, the terms of this Sublease shall control.
6.3 Subtenant recognizes that Sublandlord is not in a position to
render any of the services or to perform any of the obligations required of
Master Landlord by the terms of the Master Lease, including, but not limited to,
the services or obligations of Master Landlord under the following sections of
the Master Lease:
12 (Property Insurance).
21 (Destruction).
40 ("As-Is" Basis).
41 (Rules and Regulations and Common Area).
43 (Utilities of the Building in which the Premises are
Located).
44 (Parking).
Therefore, despite anything to the contrary in this Sublease,
Subtenant agrees that Sublandlord shall have no obligation, responsibility or
liability for the performance or non-performance of Master Landlord's
obligations, responsibilities or liabilities under the Master Lease, Subtenant
shall look solely to Master Landlord therefor, and Sublandlord shall not be
liable to Subtenant for any default of the Master Landlord under the Master
Lease.
6.4 Subtenant shall not have any claim against Sublandlord based
on the Master Landlord's failure or refusal to comply with any of the provisions
of the Master Lease. Despite the Master Landlord's failure or refusal to comply
with any of those previsions of the Master Lease, this Sublease shall remain in
full force and effect and Subtenant shall pay the Basic Rent and all other
charges provided for in this Sublease without any abatement, deduction or
offset.
6.5 Whenever consent or approval of the Master Landlord is
required under the Master Lease, then consent or approval of Sublandlord shall
also be required, which Sublandlord's consent or approval shall be subject to
the same standards, terms and conditions of Master Landlord's consent or
approval. Whenever notice to the Master Landlord is required under the Master
Lease, then notice to Sublandlord shall also be required.
6.6 Subtenant acknowledges and agrees that, in accordance with
Section 16 (Assignment and Subletting) of the Master Lease, Subtenant shall have
no right to sub-sublease the Subleased Premises without the prior agreement of
the Master Landlord.
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Sublandlord shall use reasonable efforts to assist Subtenant in obtaining the
agreement of Master Landlord to a sub-sublease of the Subleased Premises to an
affiliate of Subtenant.
6.7 In accordance with Section 46B (Assignment and Subletting
(Continued)) of the Master Lease, the following terms shall apply to this
Sublease:
If Master Landlord and Sublandlord jointly and voluntarily elect, for
any reason whatsoever, to terminate the Master Lease prior to the scheduled
Master Lease termination date, then this Sublease (if then still in effect)
shall terminate concurrently with the termination of the Master Lease.
Subtenant expressly acknowledges and agrees that (1) the voluntary
termination of the Master Lease by Master Landlord and Sublandlord and the
resulting termination of this Sublease shall not give Subtenant any right
or power to make any legal or equitable claim against Master Landlord,
including, without limitation, any claim for interference with contract or
interference with prospective economic advantage, and (2) Subtenant hereby
waives any and all rights it may have under law or at equity against Master
Landlord to challenge such an early termination of the Sublease, and
unconditionally releases and relieves Master Landlord, and its officers,
directors, employees and agents, from any and all claims, demands, and/or
causes of action whatsoever (collectively, "Claims"), whether such matters
are known or unknown, latent or apparent, suspected or unsuspected,
foreseeable or unforeseeable, which Subtenant may have arising out of or in
connection with any such early termination of this Sublease. Subtenant
knowingly and intentionally waives any and all protection which is or may
be given by Section 1542 of the California Civil Code which provides as
follows: "A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement
with debtor."
The term of this Sublease is therefore subject to early termination.
Subtenant's initials here below evidence (a) Subtenant's consideration of
and agreement to this early termination provision, (b) Subtenant's
acknowledgment that, in determining the net benefits to be derived by
Subtenant under the terms of this Sublease, Subtenant has anticipated the
potential for early termination, and (c) Subtenant's agreement to the
general waiver and release of Claims above.
Initials: /s/ A.M. Initials: /s/ K.B.
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Subtenant Sublandlord
7. Variations from Master Lease. As between Sublandlord and
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Subtenant, the terms and conditions of the Master Lease are modified as stated
below in this Section:
7.1 The following provisions of the Master Lease shall not apply
to this Sublease:
1 (Use) (First Sentence Only).
2 (Term).
4A (Basic Rent).
4F (Place of Payment of Basic Rent and Additional Rent).
4G (Security Deposit).
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31 (Notices).
39 (Basic Rent).
52 (Landlord's Corporate Authority).
53 (Punch List).
7.2 Despite anything contained in the Master Lease to the
contrary, as between Sublandlord and Subtenant only, in the event of damage to
or condemnation of the Subleased Premises or of the building in which the
premises are located, the Basic Rent payable hereunder shall not be abated, all
insurance proceeds or condemnation awards received by Sublandlord under the
Master Lease shall be deemed to be the property of Sublandlord, and Sublandlord
shall have no obligation to rebuild or restore the Subleased Premises.
7.3 Any notice that may or must be given by either party under
this Sublease will be delivered (i) personally, (ii) by certified mail, return
receipt requested, or (iii) by a nationally recognized overnight courier,
addressed to the party to whom it is intended. Any notice given to Sublandlord
or Subtenant shall be sent to the respective address set forth on the signature
page below, or to such other address as that party may designate for service of
notice by a notice given in accordance with the provisions of this section. A
notice sent pursuant to the terms of this section shall be deemed delivered (A)
when delivery is attempted, if delivered personally, (B) three (3) business days
after deposit into the United States mail, or (C) the day following deposit with
a nationally recognized overnight courier.
7.4 All amounts payable under this Sublease by Subtenant are
payable directly to Sublandlord. Subtenant shall make any and all such payments
to Faroudja Laboratories, Inc.
7.5 Subtenant shall name Sublandlord as an additional insured
under all insurance policies Subtenant is required to obtain hereunder pursuant
to the Master Lease, including but not limited to those policies required under
Sections 10 (Liability Insurance), 11 (Tenant's Personal Property Insurance and
▇▇▇▇▇▇▇'▇ Compensation Insurance), and 12 (Property Insurance) of the Master
Lease.
8. Broker. Subtenant represents to Sublandlord that (i) Subtenant
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has had no dealings with any real estate broker or agent in connection with the
negotiation of this Sublease except for Bristol Commercial and CPS Realty Group
and (ii) Subtenant knows of no real estate broker or agent who is entitled to a
commission or finders fee in connection with this Sublease except for Bristol
Commercial and CPS Realty Group. Subtenant shall indemnify, protect, defend and
hold harmless Sublandlord against all claims, demands, losses, liabilities,
lawsuits, judgments and costs and expenses (including reasonable attorneys'
fees) for any subleasing commission, finder's fee, or equivalent compensation
alleged to be owing on account of the Subtenant's dealings with any real estate
broker or agent other than fees owed to Bristol Commercial and CPS Realty Group
by Sublandlord. The terms of this section shall survive the expiration or
earlier termination of this Sublease.
9. Indemnity. Subtenant shall, at Subtenant's sole expense and with
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counsel reasonably acceptable to Sublandlord, indemnify, defend, protect and
hold harmless Master Landlord, Sublandlord and their respective shareholders,
directors, officers, employees, partners, affiliates and agents from and against
all claims, demands, losses, liabilities, lawsuits, judgments and costs and
expenses (including reasonable attorney's fees) caused by, arising or resulting
from (a) the failure of Subtenant to perform any of the covenants, agreements,
terms,
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provisions, or conditions contained herein or in the Master Lease that Subtenant
is obligated to perform under the provisions of this Sublease, (b) Subtenant's
use or occupancy of the Subleased Premises, (c) the release of any Hazardous
Materials in or about the Subleased Premises, or the violation of any
Environmental Law, by Subtenant or Subtenant's agents, contractors or invitees.
This indemnification includes losses attributable to diminution in the value of
the Subleased Premises, loss or restriction of use of the Subleased Premises,
adverse effect on the marketing of any space on the Subleased Premises, and all
other liabilities, obligations, penalties, fines, claims, actions (including
remedial or enforcement actions of any kind and administrative or judicial
proceedings, orders, or judgments), damages (including consequential and
punitive damages), and costs (including attorney, consultant, and expert fees
and expenses) resulting from any such failure, use or occupancy by Subtenant.
This indemnification shall survive the expiration or termination of this
Sublease.
10. Cancellation of Master Lease. In the event the Master Lease is
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canceled or terminated for any reason, or involuntarily surrendered by operation
of law before the expiration date of this Sublease, then this Sublease shall
also terminate.
11. General Provisions.
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11.1 Severability. If any provision of this Sublease or the
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application of any provision of this Sublease to any person or circumstance is,
to any extent, held to be invalid or unenforceable, the remainder of this
Sublease or the application of that provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, will not be
affected, and each provision of this Sublease will be valid and be enforced to
the fullest extent permitted by law.
11.2 Entire Agreement; Waiver. This Sublease constitutes the
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final, complete and exclusive statement between the parties to this Sublease
pertaining to the Subleased Premises, supersedes all prior and contemporaneous
understandings or agreements of the parties, and is binding on and inures to the
benefit of their respective heirs, representatives, successors, and assigns. No
party has been induced to enter into this Sublease by, nor is any party relying
on, any representation or warranty outside those expressly set forth in this
Sublease. Any agreement made after the date of this Sublease is ineffective to
modify, waive, release, terminate, or effect an abandonment of this Sublease, in
whole or in part, unless that agreement is in writing, is signed by the parties
to this Sublease, and specifically states that agreement modifies this Sublease.
11.3 Captions. Captions to the sections in this Sublease are
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included for convenience only and do not modify any of the terms of this
Sublease.
11.4 Further Assurances. Each party to this Sublease will at its
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own cost and expense execute and deliver such further documents and instruments
and will take such other actions as may be reasonably required to evidence or
carry out the intent and purposes of this Sublease.
11.5 Governing Law. This Sublease will be governed by and in all
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respects construed in accordance with the laws of the State of California.
11.6 Capitalized Terms. All terms spelled with initial capital
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letters in this Sublease that are not expressly defined in this Sublease will
have the respective meanings given such terms in the Master Lease.
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11.7 Word Usage. Unless the context clearly requires otherwise,
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(a) the plural and singular numbers will each be deemed to include the other;
(b) the masculine, feminine, and neuter genders will each be deemed to include
the others; (c) "shall," "will," "must," "agrees," and "covenants" are each
mandatory; (d) "may" is permissive; (e) "or" is not exclusive; and (f)
"includes" and "including" are not limiting.
The parties have executed this Sublease as of the date specified above.
Sublandlord: FAROUDJA LABORATORIES, INC.,
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Its: VP Bus. Develop. & General Counsel
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Date: 2 April 1999
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Address of Sublandlord: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Subtenant: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Medical, Inc.
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its: Chief Financial Officer
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Date: April 2, 1999
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Address of Subtenant: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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[LETTERHEAD OF FARIYDJA LABORATORIES]
Faroudja Laboratories, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
By Hand
April 21, 1999
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President, Finance and Administration
▇▇▇▇▇▇ Smart Medical, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Sublease of 733 Palomar
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Dear Alistair:
Enclosed please find a fully executed copy of the Consent to
Sublease ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
Now that we have received the Master Landlord's consent, the
sublease between ▇▇▇▇▇▇ Smart and Faroudja Laboratories is in
full force and effect. I have asked our Controller, Ita Geva, to
give you a call to discuss procedures for billing and payment.
Please let me know when you have received ▇▇▇▇▇/Arrillaga's
agreement to extend your current lease at 735 Palomar so that I
can determine the final amount of the brokers' commissions and
make appropriate payment arrangements.
On behalf of all of us at Faroudja, I would like to extend our
best wishes for a long and prosperous tenancy.
Yours truly,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President
Business Development & General Counsel
cc: I. Geva (w/encl.)
[LETTERHEAD OF ▇▇▇▇▇/▇▇▇▇▇▇▇▇▇]
April 7, 1999
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Faroudja Laboratories
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: CONSENT TO SUBLEASE TO ▇▇▇▇▇▇ ▇▇▇▇▇▇ MEDICAL, INC., A CALIFORNIA
CORPORATION FOR A PERIOD OF FOUR YEARS FIVE MONTHS NINETEEN DAYS,
COMMENCING APRIL 12, 1999 AND TERMINATING SEPTEMBER 30, 2003
Gentlemen:
This letter is written with regard to your proposed sublease of all of the
10,000(plus or minus sign) square feet of space (as shown on Exhibit A attached
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hereto) (the "Sublet Premises") leased by Tenant at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, under Lease Agreement dated August 27, 1997 ("Master
Lease"), by and between ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Separate Property Trust and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ Separate Property Trust ("Master Landlord"), and Faroudja Laboratories,
Inc., a California corporation ("Tenant"), which Tenant is proposing to sublease
to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Medical, Inc., a Delaware corporation ("Subtenant") on the
terms and conditions set forth in the proposed Sublease dated April 2, 1999,
submitted by Tenant to Master Landlord on April 2, 1999 (the "Sublease").
Pursuant to Master Lease Paragraph 16 ("Assignment and Subletting") Master
Landlord hereby approves Tenant's subleasing said space to Subtenant, under the
Sublease, subject to the following terms and conditions:
1. Master Landlord's Consent shall in no way void or alter any of the terms of
the Lease by and between Master Landlord and Tenant, nor shall this Consent
alter or diminish in any way Tenant's obligations to Master Landlord.
2. Tenant shall not give Subtenant any rights or privileges in excess of those
given Tenant under the terms of the Master Lease.
3. Subtenant shall not have a separate address from the address of the
Premises. Therefore, Tenant shall provide Subtenant with internal mail
delivery. Tenant and Subtenant shall share (the prorata shares to be
determined in a separate agreement between Tenant and Subtenant) the
existing signage allocated to Tenant for the Premises.
Initial: /s/ K.B. /s/ A.M. /s/ ▇.▇.
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4. Master Landlord has not reviewed the terms of any agreement between Tenant
and Subtenant, and in approving said Sublease, Master Landlord is in no way
approving any term, covenant or condition therein contained, and said
Sublease is subject and subordinate to all terms, covenants and conditions
of the Master Lease. Master Landlord shall not be bound by any agreement
other than the terms of the Master Lease between Master Landlord and
Tenant. In the event of conflict in the terms, covenants and conditions
between the Sublease and the Master Lease, the terms, covenants and
conditions of the Master Lease shall prevail and take precedence over said
Sublease. Master Landlord does not make any warranties or representations
as to the condition of the Leased Premises or the terms of the Lease
between Master Landlord and Tenant. This Consent to Sublease shall in no
event be construed as consent to any future sublease agreement (including
any extensions and/or amendments to the current Sublease) between Tenant
and Subtenant, or any other party; and any future sublease agreement
(including any extensions and/or amendments to the current Sublease)
between Tenant and Subtenant, or any other party shall require the prior
written consent of Master Landlord. Under no circumstances will Master
Landlord consent to a sub-sublease or assignment under the Sublease.
5. A. It is agreed by all parties hereto that in the event Master Landlord
terminates the Master Lease, pursuant to any right therein contained, said
Sublease shall automatically terminate simultaneously with the Master
Lease. Notwithstanding anything to the contrary set forth above, Master
Landlord, at Master Landlord's sole option and election, may choose to
allow Subtenant to remain in possession of the Sublet Premises leased under
said Sublease subject to all terms, covenants and conditions of said Master
Lease by giving Subtenant written notice prior to the effective date of
termination of said Master Lease, of Master Landlord's election to allow
Subtenant to remain in possession of the Sublet Premises in which event
Subtenant shall be entitled and obligated to remain in possession of the
Sublet Premises under the terms of said Sublease, subject to all terms,
covenants and conditions of the Master Lease, including, without limitation
to, payment of Basic Rent at the greater of: (i) the rate provided for in
the Master Lease, or (ii) the rate provided for in the Sublease. Such
election by Master Landlord shall not operate as a waiver of any claims
Master Landlord may have against Tenant. Following such written notice by
Master Landlord Subtenant shall then, as of the effective date of said
termination of said Master Lease, be liable to and shall attorn in writing
directly to Master Landlord as though said Sublease were executed directly
between Master Landlord and Subtenant; provided, however, it is
specifically agreed between the parties hereto, that whether Master
Landlord elects to allow Subtenant to remain in possession of the Sublet
Premises under the terms of the Sublease, subject to the Master Lease, or
allow said Sublease to automatically terminate simultaneously with the
Master Lease, Master Landlord shall not, in any event, nor under any
circumstances be responsible or liable to Subtenant for (i) the return of
any security deposit paid by Subtenant to Tenant, nor shall Subtenant be
given credit for any prepaid rental or other monetary consideration paid by
Subtenant to Tenant under said Sublease; (ii) any other claim or
Initial: /s/ K.B. /s/ A.M. /s/ ▇.▇.
--------------------------
damage of any kind or nature whatsoever by reason of or in connection with
Master Landlord's termination of said Master Lease and/or Sublease; and
(iii) any default of Tenant under the Sublease.
B. In the event Master Landlord has terminated the Master Lease, and has
not elected, in writing prior to the effective date of termination of said
Master Lease, to allow Subtenant to remain in the Sublet Premises as set
forth above, said Sublease shall terminate co-terminously with the
effective termination of the Master Lease automatically, without notice,
and Subtenant and/or Tenant, jointly and severally, shall surrender the
Sublet Premises to Master Landlord in good condition and repair as of the
effective termination of the Master Lease, with Master Landlord having no
obligation or liability whatsoever to Subtenant by reason of or in
connection with such early termination of the Master Lease. In the event
Subtenant and/or Tenant fails to timely surrender the Sublet Premises to
Master Landlord in good condition and repair as of the date the Master
Lease terminates, Subtenant and/or Tenant, jointly and severally, shall be
liable to Master Landlord in such event for all damages, costs, claims,
losses, liabilities, fees or expenses sustained by Master Landlord,
including, but not limited to, loss of rental income, attorney's fees and
court costs resulting from or in connection with Subtenant's failure to
timely vacate the Sublet Premises and surrender the Sublet Premises to
Master Landlord as of the effective termination date of said Master Lease.
C. As a condition to Landlord's consent to the Sublease, by execution of
this Consent to Sublease, Subtenant hereby agrees to be bound by the
following provision in relation to both Tenant and Master Landlord:
If Master Landlord and Tenant jointly and voluntarily elect, for any
reason whatsoever, to terminate the Master Lease prior to the
scheduled Master Lease Termination Date, then this Sublease (if then
still in effect) shall terminate concurrently with the termination of
the Master Lease. Subtenant expressly acknowledges and agrees that (1)
the voluntary termination of the Master Lease by Master Landlord and
Tenant and the resulting termination of this Sublease shall not give
Subtenant any right or power to make any legal or equitable claim
against Master Landlord or Tenant, including without limitation any
claim for interference with contract or interference with prospective
economic advantage, and (2) Subtenant hereby waives any and all rights
it may have under law or at equity to challenge such an early
termination of the Sublease, and unconditionally releases and relieves
Master Landlord and Tenant, and their officers, directors, employees
and agents, from any and all claims, demands, and/or causes of action
whatsoever (collectively, "Claims"), whether such matters are known or
unknown, latent or apparent, suspected or unsuspected, foreseeable or
unforeseeable, which Subtenant may have arising out of or in
connection with any such early termination of this Sublease. Subtenant
knowingly and intentionally waives any and all protection which is or
may be given by Section 1542 of the California Civil Code which
provides as follows: "A general release does not extend to claims
which the
Initial: /s/ K.B. /s/ A.M. /s/ ▇.▇.
--------------------------
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with debtor."
The term of this Sublease is therefore subject to early termination.
Subtenant's initials here below evidence (a) Subtenant's consideration
of and agreement to this early termination provision, (b) Subtenant's
acknowledgment that, in determining the net benefits to be derived by
Subtenant under the terms of this Sublease, Subtenant has anticipated
the potential for early termination, and (c) Subtenant's agreement to
the general waiver and release of Claims above.
Initials: /s/ A.M. Initials: /s/ K.B.
--------------- ---------------
Subtenant Subtenant
6. In consideration of Master Landlord's consent to the Sublease, Tenant
irrevocably assigns to Master Landlord, as security for Tenant's
obligations under this Lease, all rent and income payable to Tenant under
the Sublease. Therefore Master Landlord may collect all rent due under the
Sublease and apply it towards Tenant's obligations under the Master Lease.
Tenant and Subtenant agree to pay same to Master Landlord upon demand
without further consent of Tenant and Subtenant required; provided,
however, that until the occurrence of a default by Tenant under the Master
Lease, Tenant shall have the right to collect such rent. Tenant hereby
irrevocably authorizes and directs Subtenant, upon receipt of a written
notice from Master Landlord stating that a default exists in the
performance of Tenant's obligations under the Master Lease, to pay to
Master Landlord the rents due and to become due under the Sublease. Tenant
agrees that Subtenant shall have the right to rely on any such statement
and request from Master Landlord, and that Subtenant shall pay such rents
to Master Landlord without any obligation or right to inquire as to whether
such default exists and notwithstanding any notice or claim from Tenant to
the contrary. Tenant shall have no right or claim against Subtenant or
Master Landlord for any such rents so paid by Subtenant to Master Landlord.
It is further agreed between the parties hereto that neither Tenant's
assignment of such rent and income, nor Master Landlord's acceptance of any
payment of rental or other sum due by Subtenant to Tenant under said
sublease, whether payable directly to Master Landlord or endorsed to Master
Landlord by Tenant, shall in any way nor in any event be construed as
creating a direct contractual relationship between Master Landlord and
Subtenant, unless the Parties expressly so agree in writing and such
acceptance shall be deemed to be an accommodation by Master Landlord to,
and for the convenience of, Tenant and Subtenant. Any direct contractual
agreement between Master Landlord and Subtenant must be in writing.
7. Pursuant to the provisions of Paragraph 16 entitled "Assignment and
Subletting" of the Master Lease, Master Landlord hereby requires Tenant to
pay to Master Landlord, as
Initial: /s/ K.B. /s/ A.M. /s/ ▇.▇.
--------------------------
Additional Rent, all rents and/or additional consideration received by
Tenant from said Sublease in excess of the Basic Rent payable to Master
Landlord in said Lease (hereinafter referred to as "Excess Rent"). Tenant
and Subtenant acknowledge that any Excess Rent is owed to Master Landlord
and Tenant hereby agrees to pay any Excess Rent to Master Landlord as due
under said Sublease. Tenant and Subtenant represent and warrant to Master
Landlord that: (1) the information to be completed and provided by Tenant
and Subtenant on the attached Exhibit B "Summary of Amounts/Consideration
---------
to be Paid by Subtenant" accurately represents amounts to be paid by
Subtenant under said Sublease; (2) no additional consideration is due
Tenant under said Sublease, other than the additional consideration (if
any) identified on Exhibit B; and (3) no changes in the terms and/or
---------
conditions of said Sublease shall be made without Master Landlord's prior
written approval.
8. This Consent is conditional upon Master Landlord's receipt of Master
Landlord's reasonable costs and attorney's fees, to which Master Landlord
is entitled under Paragraph 16 of the Master Lease. Tenant shall pay such
fees and costs to Landlord, pursuant to the invoice provided to Tenant by
Landlord with this Consent, upon execution of this Consent by Tenant and
Subtenant.
9. This Consent to Sublease shall only be considered effective, and Master
Landlord's consent to the Sublease given, when (i) Landlord receives
payment from Tenant of Landlord's costs, and (ii) this Letter Agreement is
executed by Master Landlord, Tenant, and Subtenant, and Guarantors (if any)
under the Master Lease.
Please execute this letter in the space provided below, obtain the signature of
Subtenant, and return all copies to our office no later than April 21, 1999. In
the event Tenant fails to return the fully executed documents to Landlord by
April 21, 1999, this Consent shall be automatically rescinded, in which event,
Tenant shall be required to resubmit its request in the event Tenant desires to
go forward with said Sublease. A fully executed copy will be returned to you
after execution by the Master Landlord.
Very truly yours,
▇▇▇▇▇/ARRILLAGA
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(Signatures Continued on Following Page)
Initial: /s/ K.B. /s/ A.M. /s/ ▇.▇.
--------------------------
THE UNDERSIGNED Tenant and Subtenant do hereby jointly and severally agree to
the terms and conditions of this Consent to Sublease.
TENANT: SUBTENANT:
FAROUDJA LABORATORIES, INC. ▇▇▇▇▇▇ ▇▇▇▇▇▇ MEDICAL, INC.
a California corporation a Delaware corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Print Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Print Name ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------- ------------------
VP Business Development & Title Chief Financial Officer
Title General Counsel -----------------------
-------------------------
Initial: /s/ A.M. /s/ ▇.▇.
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