EXHIBIT 10.4
LEASE TERMINATION AGREEMENT
THIS LEASE TERMINATION AGREEMENT ("AGREEMENT") dated for reference
purposes only as of the 14th day of September, 2005, is entered into by and
between CARDIAC SCIENCE, INC., a Delaware corporation, and its successors and
assigns (collectively, "TENANT"), and TERRACE TOWER ORANGE COUNTY, LLC, a
Delaware limited liability company and its successors and assigns (collectively,
"LANDLORD"), for the premises located at 1900 Main Street, Suite 700, Irvine,
California 92614 (the "PREMISES").
1. Landlord and Tenant are parties to that certain Lease for the Premises
dated March 31, 2003 (the "LEASE"). The term of the Lease is scheduled to expire
September 30, 2008. However, Landlord and Tenant desire to terminate the Lease
early upon the terms and conditions set forth herein. Defined terms which are
used in this Agreement without definition have the meanings given to them in the
Lease.
2. Subject to satisfaction of the terms and conditions set forth below,
including, without limitation, the consummation of a Replacement Lease as set
forth below in Paragraph 4 and Landlord's receipt of the Termination Fee (as
defined below in Paragraph 3), and provided Tenant complies with all terms and
conditions of the Lease through the Termination Date (as defined below), in
consideration of the mutual promises contained herein, (i) Tenant shall
surrender all rights under the Lease and possession of the Premises not later
than December 31, 2005 (the "OUTSIDE SURRENDER DATE") and (ii) all obligations
of Tenant to pay Monthly Base Rent and additional rent (as defined in Section
5(a) of the Lease) under the Lease (but not Tenant's obligation to pay
Termination Fee installments as provided in Paragraph 3 below) shall terminate
on the date Tenant actually surrenders possession of the Premises to Landlord
(the "ACTUAL SURRENDER DATE"), provided in no event shall Tenant's obligation to
pay Monthly Base Rent, additional rent and parking charges terminate prior to
October 31, 2005 regardless of any earlier Actual Surrender Date. Tenant agrees
to leave the Premises vacant, broom clean and in good order, condition and
repair on the Actual Surrender Date, with all of Tenant's personal property
removed to the extent required by the Lease as well as all phone and data
cabling removed from the Premises at Tenant's sole cost and expense, and Tenant
shall otherwise comply with the provisions of the Lease regarding surrender of
the Premises as of the Actual Surrender Date. Notwithstanding any provision of
the Lease or this Agreement to the contrary, Landlord hereby agrees that (i)
other than Tenant's phone and data cabling which is to be removed by Tenant upon
Tenant's surrender of the Premises at Tenant's sole cost and expense, Tenant
shall not be required to remove any Tenant Improvements or Alterations at any
time or pay for any damage to the Premises caused by any such removal, and (ii)
Landlord shall not treat any Tenant Improvements or Alterations as abandoned.
3. As consideration for Landlord's agreement to terminate the Lease early,
Tenant shall pay to Landlord in cash or wire transfer of funds, the sum of Six
Hundred Fifty Thousand and No/100ths Dollars ($650,000.00) (the "TERMINATION
FEE") as follows: Four Hundred Thousand and No/100ths Dollars ($400,000.00)
shall be due and payable by Tenant on November 1, 2005. The remaining balance of
Two Hundred Fifty Thousand and No/100ths Dollars ($250,000.00) shall be due and
payable by Tenant in five (5) equal monthly installments of Fifty Thousand and
No/100ths Dollars ($50,000.00) on the first day of each calendar month
commencing on December 1, 2005 and ending on April 1, 2006. Tenant's payment of
the monthly installments of Fifty Thousand and No/100ths Dollars ($50,000.00)
per month for the months of November and December shall be in lieu of Monthly
Base Rent and Operating Expenses for such months, provided Tenant shall also pay
during all periods of Tenant's occupancy until the later of the Actual Surrender
Date or October 31, 2005, all parking charges and after-hours HVAC charges for
such periods of Tenant's remaining occupancy. Tenant may surrender possession of
the Premises to Landlord at any time prior to the Outside Surrender Date;
provided, that any such early surrender shall not affect Tenant's obligation to
pay any then unpaid installments of the Termination Fee or Monthly Base Rent,
additional rent, parking charges and after hours HVAC charges through to the
later of the Actual Surrender Date or October 31, 2005.
4. This Agreement is subject to and contingent upon Landlord consummating
a new lease for the Premises with a replacement tenant (the "REPLACEMENT
LEASE"). If Landlord does not enter into the Replacement Lease by October 1,
2005, then, at Landlord's sole option and election, upon written notice to
Tenant made not later than October 6, 2005, this Agreement shall
be deemed null and void and of no further force or effect, in which case the
Lease shall remain in full force and effect and shall expire in accordance with
its existing terms as unmodified by the terms of this Agreement. The foregoing
contingency is for the benefit of Landlord only.
5. Landlord hereby agrees that subject to (a) Tenant's surrender of the
Premises on or before the Outside Surrender Date in accordance with the terms of
the Lease and this Agreement and (b) payment of the Termination Fee in
accordance with Section 3 of this Agreement, the Lease and all obligations of
Tenant under the Lease shall terminate as of 11:59 p.m. on the date of payment
of the final installment of the Termination Fee (the "TERMINATION DATE").
Landlord shall retain the original Letter of Credit currently held by Landlord
in the amount of $146,241.00 until the Termination Date at which time, upon
Landlord's receipt of the final installment of the Termination Fee, Landlord
shall return the original Letter of Credit to Tenant. Effective as of the
Termination Date, Tenant on the one hand, and Landlord on the other hand, for
themselves and their successors and assigns, hereby remise, release and forever
discharge the other party, and their representatives, shareholders, trustees,
officers, directors, partners, affiliates, employees and agents and their
respective successors and assigns, from any and all claims, liabilities, losses,
damages, acts, demands, grievances, suits, actions, causes of action, debts,
liens, charges, accounts, contracts, agreements, promises, costs or expenses
whatsoever, whether at law, admiralty or in equity (individually, a "CLAIM" or
collectively, "CLAIMS") of any nature whatsoever, known or unknown, fixed or
contingent which Tenant or Landlord or their successors and assigns may have
from and after the Termination Date, arising out of or connected in any way with
the Lease or arising out of or in any way connected with the use, occupancy or
condition of the Premises; provided, however, the foregoing release shall not
extend to (a) any obligations, liabilities or losses that are based on this
Agreement, (b) any indemnity obligations under the Lease arising from acts,
circumstances or events occurring prior to the Actual Surrender Date or (c)
liability for third party claims against Landlord and/or Tenant arising from
acts, circumstances or events occurring prior to the Actual Surrender Date.
6. Except as expressly provided in Section 5, effective as of the
Termination Date, Landlord, on the one hand, and Tenant on the other hand,
expressly waive any and all rights conferred upon them by the provisions of
California Civil Code Section 1542 and the provisions of any other applicable
laws restricting the release of claims which the Landlord or Tenant does not
know of or suspect to exist at the time of executing this Agreement, and
expressly consents that this Agreement shall be given full force and effect
according to each and all of its express terms and provisions. California Civil
Code Section 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR."
Landlord and Tenant hereby understand and acknowledge the significance and
consequences of such release and specific waiver of California Civil Code
Section 1542 and each acknowledges having been advised by independent legal
counsel concerning the same.
Landlord's Initials: /s/ SJ Tenant's Initials: /s/ MM
7. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
8. This Agreement may not be modified or amended except by a written
agreement executed by the parties hereto.
9. This Agreement may be executed in two or more counterparts, each of
which shall be an original, but all of which together shall constitute one
agreement binding on all of the parties hereto notwithstanding that all of the
parties hereto are not signatories to the same counterpart.
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10. This Agreement shall be construed and interpreted in accordance with
the laws of the State of California applicable to agreements made and to be
performed in said State, without giving effect to conflicts of law provisions
thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement.
LANDLORD: TENANT:
TERRACE TOWER ORANGE COUNTY, LLC, CARDIAC SCIENCE, INC., a
a Delaware limited liability company Delaware corporation
By: Terrace Tower U.S.A., Inc.,
a Delaware corporation, By: /s/ Michael Matsyik
Its Manager Print Name: Mike Matsyik
By: /s/ Steve Johnston Print Title: Chief Financial
Print Name: Steve Johnston Officer
Print Title: Executive Vice President Date: September 14, 2005
Date: September 30, 2005
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