Exhibit 10.1
FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment to the Lease ("Amendment") is entered into as of
June 1, 2004 ("Effective Date"), by and between Kyung S. Lee and Ieesun Kim Lee
("Lessor"), and CASTELLE, a California corporation ("Lessee"), with reference to
the following:
RECITALS
A. Lessor and Lessee entered into that certain lease agreement dated
August 16, 2000 (the "Lease Agreement") whereby Lessor leases to Lessee
and Lessee leases from Lessor a building containing an approximately
16,600 square feet portion of a 26,865 square foot building, the leased
portion commonly known as 855 Jarvis Drive Suite 100, Morgan Hill,
California, and more particularly described in the Lease ("Premises").
B. Lessor and Lessee wish by this Amendment to amend the Lease to:
(i) Extend the Term by five (5) years from June 1, 2004 through May
31, 2009 (the "Extension Term");
(ii) Revise the Base Rent per month to $1.04 per square foot of the
Premises for the Extension Term;
(iii) Set a maximum not to exceed amount for operating expenses
payable by Lessee during the Extension Term to $0.23 per square foot of
the Premises, for a maximum monthly charge of $0.23 x 16,600 sq ft =
$3,818 per month;
(iv) Provide for a right to extend the Term for one option period of
three years commencing at the end of the Extension Term (the "Option
Term") with the rent fixed at 95% of "Fair Market Value" throughout the
duration of the Option Term; and
(v) Provide that the Security Deposit shall be returned to Lessee at
the end of the Extension Term.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lessor and Lessee agree as
follows:
AMENDMENTS AND AGREEMENTS
1. Definitions. The term "Lease" as used in this Amendment shall mean
the Lease Agreement, as amended by this Amendment, and as further amended from
time to time. Unless defined otherwise in this Amendment, all capitalized terms
used but not defined in this Amendment shall have the same meaning and
definition given them in the Lease.
2. Extension of the Term. The Original Term of the Lease was five (5)
years commencing November 1, 2000, and the Expiration Date of the Lease was
October 30, 2005. The Term of the Lease is hereby extended for a five (5) year
period from the Effective Date (June 1, 2004) through May 31, 2009 (the
"Extension Term"). As of the Effective Date, May 31, 2009 shall be the
Expiration Date, without giving effect to any Option Term.
3. Base Rent during the Extension Term. The Base Rent during the
Extension Term shall be fixed at $1.04 per square foot of the Premises = $17,264
per month, commencing on the Effective Date. There shall be no Base Rent
Adjustment either during the Extension Term or during any Option Term.
E-1
4. Operating Expenses. The amount due from Lessee during the Extension
Term and any Option Term for the Common Area Operating Expenses shall not exceed
$0.23 per square foot of the Premises, for a maximum monthly charge of $0.23 x
16,600 sq ft = $3,818 per month.
5. Option Term. Lessee shall have the right to extend the Term for one
option period of three years commencing at the end of the Extension Term (the
"Option Term") with the rent fixed at 95% of "Fair Market Value" as defined in
Section 51 of the Lease throughout the duration of the Option Term. Accordingly,
for the purpose of enabling Lessee to exercise and have the benefit of the
Option Term, the first paragraph of Section 51 of the Lease is hereby deleted
and replaced for the purpose of this Amendment with the following:
"51. Option to Extend. Lessee shall have the option and right to extend the
Term of this Lease for one option period of three years commencing at the
end of the Extension Term (the "Option Term") with the rent fixed at 95% of
"Fair Market Value" (as defined in the paragraph below) for the duration of
the Option Term provided that: (1) Lessee is not in default at the time of
such exercise; and (ii) Lessee has delivered written notice to Lessor no
less than ninety (90) days prior to the expiration of that then existing
Term of the Lease of Lessee's intention to extend the term of the Lease."
6. Security Deposit. The Security Deposit provided to Lessor by Lessee
of $46,480 as set forth in Section 1.7 and referenced in Section 5 of the Lease
shall be returned to Lessee at the end of the Extension Term.
7. Inconsistency. In the event of any inconsistency or conflict between
the terms of this Amendment and the terms of the Lease with respect to the
matters which are the subject of this Amendment, the terms of this Amendment
shall control.
8. Effectiveness of the Lease. Except as expressly amended by this
Amendment, the terms and provisions of the Lease shall remain unchanged and in
full force and effect.
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Amendment
at the place and on the dates above their respective signatures, effective as of
the Effective Date.
Executed at: , California Executed at: , California
- -------------------------------- ----------------------------------
on: May 21, 2004 on: May 26, 2004
- -------------------------------- ----------------------------------
By Lessor: By Lessee:
Kyung S. Lee and Ieesun Kim Lee Castelle
- -------------------------------- ----------------------------------
By:/s/Kyung S. Lee By:/s/Scott C. McDonald
- --------------------------------- ---------------------------------
Name:Kyung S. Lee Name:Scott C. McDonald
- --------------------------------- ---------------------------------
Title: Owner Title: President and CEO
- --------------------------------- ---------------------------------
E-2