First Amend. To Build To Suit Facility

EXHIBIT 10.4.1


FIRST AMENDMENT TO LEASE


THIS FIRST AMENDMENT TO LEASE (this "First Amendment") is made and entered into as of the 13th day of March 2000 by and between VALLEY MEDIA, INC., a Delaware corporation ("Tenant"), and BETTY KUHN, an individual ("Landlord").


Recitals


A. Pursuant to that Build-to-Suit Facility Absolute Net Lease dated as of October 3, 1989 (the "Original Lease"), Carl D. Panattoni ("Panattoni") leased to Pacific Rice Products, Inc., a California corporation ("Pacific"), a building consisting of approximately 60,000 rentable square feet commonly known as 1277 Santa Anita Court, Woodland (Yolo County), California, together with easements for ingress and egress and parking (the "Property"), all as more particularly described in the Original Lease.


B. Panattoni and Pacific modified the Original Lease pursuant to: (i) that certain Letter Agreement dated as of March 15, 1990 from Panattoni to Pacific (as approved and accepted by Pacific) (the "Letter Agreement"); (ii) that certain First Amendment to Absolute Net Lease dated as of November 1990 (the "First Amendment"); and (iii) that certain Second Amendment to Absolute Net Lease dated as of November 1990 (the "Second Amendment"). The Original Lease, as modified by the Letter Agreement, the First Amendment and the Second Amendment, shall be referred to in this Sublease as the "Revised Lease."


C. Landlord succeeded to the right, title and interest of Panattoni under the Revised Lease. Pacific Grain Rice Products, Inc., a California corporation ("Grain"), succeeded to the right, title and interest of Pacific under the Revised Lease.


D. Pursuant to that certain Assignment, Assumption and Consent Agreement dated as of May 9, 1994 (the "Assignment"), Grain assigned to Valley Record Distributors, Inc., a California corporation ("Record"), all of Grain's right, title and interest under the Revised Lease. Record accepted the assignment and assumed the obligations of the tenant under the Revised Lease from and after the Effective Date (as defined in the Assignment), and Landlord consented to the assignment and assumption.


E. The Revised Lease, as modified by the Assignment, shall be referred to in this Sublease as the "Lease."


F. Record changed its name to Valley Media, Inc., a California corporation. Tenant and Record then merged.


G. Tenant is the current holder of all of the right, title and interest of the tenant under the Lease. Landlord is the current holder of all of the right, title and interest of the landlord under the Lease.


H. The term of the Lease expires on May 31, 2000.


I. Upon the terms and conditions set forth in this First Amendment, Landlord and Tenant desire to extend the term of the Lease through May 31, 2003 and to make certain other modifications to the Lease.


Agreement Terms and Conditions


NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, Landlord and Tenant agree as follows:


1. Lease Term. The expiration of the term of the Lease is hereby
---------- extended from May 31, 2000 to May 31, 2003.


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