exv10w8








    Exhibit 10.8



 




    FIRST
    LEASE AMENDMENT



 



    This FIRST LEASE AMENDMENT (this “Amendment”) is made
    and entered into as of September 1st, 2006 by and between
    SY CORPORATION, a Nevada corporation (“Landlord”) and
    I-FLOW CORPORATION, a California corporation
    (“Tenant”).



 




    Recitals



 



    A. Tenant occupies approximately 51,000 square feet of
    space (the “Original Demised Premises”) within the
    building located at 20202 Windrow Drive, Lake Forest, California
    (the “Building”) pursuant to that certain Lease
    Agreement entered into as of April 14, 1997 between Tenant
    and Industrial Developments International, Inc., a Delaware
    corporation and predecessor in interest to Industrial Property
    Fund I, L.P., as landlord, with a lease term commencing on
    July 2, 1997 and terminating on August 1, 2007,
    subject to an option to renew vested in Tenant for an additional
    term of five (5) years (the “Lease”). Capitalized
    terms used but not otherwise defined herein shall have the
    meaning given to such terms in the Lease.



 



    B.  Landlord acquired its interest in the above premises
    through purchase of the real property from INDUSTRIAL
    DEVELOPMENTS INTERNATIONAL INC. and assignment of the Lease
    Agreement under an Assignment of Lease dated
    10-6-04.



 



    C.  Landlord and Tenant now desire to amend the Lease
    Agreement on the terms and conditions set out herein.



 



    NOW, THEREFORE, in consideration of the foregoing recitals and
    the mutual covenants contained herein, and for other good and
    valuable consideration, the receipt and sufficiency of which are
    hereby acknowledged, the parties hereto hereby agree as follows:



 




    Amendment
    Terms



 



    1. Additional Premises.   As of
    September 1, 2006, Landlord does hereby lease and demise to
    Tenant an additional 15,675 square feet of space (the
    “Additional Premises”, and collectively with the
    Originally Demised Premises, the “Demised Premises”),
    located within the Building, as described and depicted on
    Exhibit ‘A’, attached hereto and incorporated herein
    by reference, pursuant to all the terms and provisions of the
    Lease, as hereby amended. The total square footage of the
    Demised Premises will be 66,675 square feet of space.
    Tenant acknowledges and agrees the above square footage figure
    shall be used for determination of the additional rental amount
    irrespective that the actual amount of square footage leased to
    Tenant may differ slightly.



 



    2. Expiration Date.
      Section 1(h) of the Lease is hereby deleted
    in its entirety and in place thereof, the following is inserted:
    “Expiration Date: The Expiration Date of the Lease shall be
    August 31, 2010.”



 



    3. Renewal Option.  
    Notwithstanding Section 2 above Tenant shall retain the
    right granted under Section 3.1(a) of the Lease to exercise
    its right to renew for an additional five (5) year Renewal
    Term from and after August 31, 2010, in accordance with the
    terms of Section 3.1(a).



 



    4. Rental Rate.  
    Sections 1(d), 1(e) and 17(d) of the Lease are hereby
    amended such that commencing September 1, 2006, the Annual
    Base Rent (subject to adjustment per Section 5 below) for
    the Demised Premises through the end of the Primary Term shall
    be Six Hundred Eighty Thousand, Eighty-Five and 00/100 Dollars
    ($680,085.00), based on a calculation of $.85 per square foot of
    the Demised Premises. Base Rent shall be payable in equal
    monthly installments of Fifty-Six Thousand, Six Hundred
    Seventy-Three and 75/100 Dollars ($56,673.75) (subject to
    adjustment per Section 5 below), in advance, on the first
    day of each calendar month during the Term.




    

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    5. Rent Escalation.
      Sections 1(d) and 17(d) of the Lease are
    hereby amended such that the Annual Base Rent and corresponding
    Monthly Base Rent shall increase each year on the anniversary
    date of September 1, commencing in 2007, by three percent
    (3%) as follows:



 


	 	 	 	 	 
	

    Year


	
 
	
    Annual Base Rent

	 

	

    9-1-07 through 8-31-08


	
 
	
    $
	
    700,487.55
	
 

	

    9-1-08 through 8-31-09


	
 
	
    $
	
    721,502.18
	
 

	

    9-1-09 through 8-31-10


	
 
	
    $
	
    743,147.25
	
 









 



    6. Security Deposit.   Sections
    1(k) and 5 of the Lease are hereby amended such that commencing
    on or before September 1, 2006, Tenant shall increase the
    Security Deposit to the amount of Fifty-Six Thousand, Six
    Hundred Seventy-Three and 75/100 Dollars ($56,673.75), equal to
    one month’s Base Rent for the Demised Premises.



 



    7. Landlord Improvements.  On or
    before September 8, 2006, Landlord shall erect at its sole
    expense a chain link fence which is twelve feet (12’) in
    height with screening material (the “Chain Link
    Fence”) reasonably acceptable to Tenant which will
    physically segregate the Additional Premises from the premises
    within the Building presently occupied by another tenant (the
    “Adjacent Tenant”).



 



    8. Utilities.  Utility expenses for
    the Additional Premises shall be prorated between Tenant and the
    other tenant within the larger building on the basis of their
    relative square feet and based upon the Adjacent Tenant’s
    current utility usage. Such utilities shall be paid by Tenant as
    set forth in the Lease Agreement.



 



    9. Use of Racks.  Tenant shall have
    the right, without further consideration, during the Term of the
    Lease to use for its own business purposes the industrial racks
    presently located on the Additional Premises, provided however,
    Tenant shall abide by any and all applicable codes and
    regulations and shall not permit the racks or any other fixture
    or equipment to come within three feet (3’) of the Chain
    Link Fence. Tenant shall use reasonable commercial efforts to
    obtain a high-pile permit for use of the racks, however, should
    Tenant be denied that permit but be allowed to use the rack
    system under the permit issued to the Adjacent Tenant, as
    contemplated by this Amendment, Tenant expressly agrees to
    perform no act or to allow any condition to exist that would
    jeopardize the high-pile permit issued to the Adjacent Tenant.



 



    10. Condition of Additional
    Premises.  Landlord shall deliver possession
    of the Additional Premises to Tenant on September 1, 2006
    and in good operating condition and repair, including without
    limitation,
    roll-up
    doors, load levelers, lighting, plumbing and electrical outlets.
    Tenant shall notify Landlord no later than October 31, 2006
    of the need for repair or replacement required with respect to
    the Additional Premises, and Landlord shall timely make said
    repair or replacement at Landlord’s expense, provided that
    Landlord shall not be responsible for the repair or replacement
    of any damage caused by Tenant.



 



    11. Tenant Parking.  In addition to
    its right to use ten (10) exclusive parking spaces pursuant
    to Section 2 of the Lease, Tenant shall have the right to
    the exclusive use of an additional thirty-seven
    (37) parking spaces within the Common Area, on the same
    terms and conditions, which shall be designated by the posting
    of a sign.



 



    12. Free Rent.  Should Tenant
    construct during the term of this Lease, including the renewal
    option period if exercised, additional office space of
    approximately 2,100 square feet within Tenant’s
    Original Demised Premises, Landlord hereby agrees that upon
    completion and final approval thereof by the City of Lake
    Forest, to abate the following three month’s Base Rent (but
    not triple net charges). Such office construction shall be at
    the sole cost and expense of tenant and subject to the prior
    written approval by Landlord and the City of Lake Forest and
    shall be in compliance with all other applicable terms and
    conditions of the Lease.



 



    13. Tenant before occupation of the Additional Premises
    shall install at its sole expense on the Additional Premises
    security monitoring alarm system which shall be operational
    24 hours per day 7 days per week.



 



    14. Reaffirmation of Lease.  Except
    as expressly set forth in this Amendment, all of the terms and
    provisions of the Lease shall remain unmodified and in full
    force and effect.



 



    15. Counterparts.  This Amendment
    may be executed in multiple counterparts, each of which shall be
    deemed an original, but all of which will constitute one and the
    same instrument.



 




    [REMAINDER
    OF PAGE INTENTIONALLY BLANK]
    




    

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    LANDORD:




 



    SY CORPORATION, a Nevada Corporation



 


			
	    By: 
	
    /s/  Jeff
    Yassai

	 






			
	    Name: 
	
    Jeff Yassai
	 
	    Title: 
	
    CEO
	 



 



    TENANT:




 



    I-FLOW CORPORATION, a Delaware corporation



 


			
	    By: 
	
    /s/  James
    J. Dal Porto

	 






			
	    Name: 
	
    James J. Dal Porto
	 
	    Title: 
	
    Exec VP COO
	 
	    Date: 
	
    9/12/06
	 




    

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