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EXHIBIT 10.35
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CONFIDENTIAL
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VIA FACSIMILE
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January 28, 1999
     
Greg L. Pickrell, Esq.
Coudert Brothers 
530 Lytton Avenue
Suite 300
Palo Alto, CA 94301
     
Dear Greg:
     
I am writing to follow up on our discussions regarding the issues raised in 
your July 30, 1998 letter regarding the registration rights of Yves Faroudja 
and Isabell Faroudja under the Registration and Shareholders Rights Agreement 
dated March 7, 1997 (the "Agreement") and Yves Faroudja's Warrant to Purchase 
Shares of Faroudja, Inc. Common Stock dated January 20, 1997 (the "Warrant"). 
The registration rights under the Agreement and the Warrant are referred to 
collectively in this letter as the "Registration Rights." This dialog results 
from the Faroudja, Inc. (the "Company") Registration Statement on Form S-1 
which was declared effective on August 12, 1998 (the "Registration 
Statement") and the right and opportunity of Mr. and Mrs. Faroudja to 
exercise their Registration Rights and participate therein.

Our most recent discussion involved your comments on my November 11, 1998 
letter responding to your July 30, 1998 letter. As expressed in my letter and 
our conversations, the Company wishes to resolve this matter amicably.  In 
furtherance of that objective, a revised proposal follows.
     
If the Faroudjas wish to register the securities they could have included in the
Registration Statement through the exercise of their rights under the Agreement,
or if Mr. Faroudja wishes to register the securities he could have registered in
the Registration Statement through the exercise of his rights under the Warrant,
the Company is willing to use its reasonable efforts, on one occasion, to
register, at the Company's expense, the offer and sale of such 

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Greg L. Pickrell, Esq.
January 28, 1999
Page 2
     
     
securities under the Securities Act of 1933, as amended, as soon as possible 
following a written request for such registration.  
     
Such a filing would, however, be subject to the following conditions: 
     
(i)       registration on Form S-3 (or an equivalent SEC form) is available for
          the securities in question; 
     
(ii)      the transaction or transactions in which such securities would be sold
          occurs over a period of not more than ninety (90) days following the
          effective date of the registration statement; and 

(iii)     the filing of a registration statement would not be seriously
          detrimental to the Company in the good faith judgment of the Board of
          Directors of the Company.  
     
If the Board of Directors determines that filing a registration statement 
would be seriously detrimental to the Company, the Company would have the 
right to defer such filing (x) for up to 120 days after receipt of the 
request, or (y) if the Company is engaged or has fixed plans to engage in a 
registered public offering as to which the Registration Rights could be 
exercised, the Company may defer such filing for a period beginning 60 days 
prior to the initial filing with the SEC of the registration statement 
relating to such offering, and ending not more than 90 days after the 
effective date of such registration statement. The Company may defer such 
filing for the period described in (x) or (y), but not both.  If the Company 
exercises its right to defer the filing of a registration statement because 
it is engaged or has fixed plans to engage in a registered public offering, 
the Faroudjas may elect to include in such offering shares as to which the 
Registration Rights were exercised, unless the Board of Directors determines 
that inclusion of all or part of such shares would be seriously detrimental 
to the Company or the success of the offering.  Any shares not included in 
such offering would continue to be entitled to the registration rights set 
forth in this paragraph or any other applicable Registration Rights. The 
rights described herein shall have no effect on the Faroudja's existing 
Registration Rights.
     
I have enclosed two signed copies of this letter.  If Mr. and Mrs. Faroudja 
are satisfied with this proposal, please have each of them sign and date both 
copies of this letter in the space provided below.  One executed copy should 
be

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Greg L. Pickrell, Esq.
January 28, 1999
Page 3
     
retained for the Faroudja's files and the other copy should be returned to 
me. This letter, countersigned by Mr. and Mrs. Faroudja, shall be deemed to 
amend the Agreement and the Warrant.
     
Please do not hesitate to call me at 408.617.7257 if you have any further 
questions or comments. 
     
Yours truly,
     
/S/ KENNETH S. BOSCHWITZ
     
Kenneth S. Boschwitz, Vice President
Business Development & General Counsel
     
cc:  Mr. Yves Faroudja
      Stuart D. Buchalter, Esq.
     
     
     
Agreed and Accepted:
     

/S/ YVES C. FAROUDJA                         /S/ ISABELL FAROUDJA     
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Yves C. Faroudja                             Isabell Faroudja
          
2-25-99                                      2-25-99
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Date                                         Date