Extension No. 4 to Lease:  3169-B Red Hill Ave.



 Exhibit 10.40 
  

			
	Date: February 4, 2005	 	Extension: 4

 STANDARD 
 LEASE EXTENSION FORM 
 LEASE to be EXTENDED is that certain Lease described as follows: 
  

			
	Lessor:	  	TRICO RENTS, A CALIFORNIA GENERAL PARTNERSHIP
		
	Lessee:	  	CERADYNE, INC., A DELAWARE CORPORATION
		
	Property Leased:	  	225 Paularino Avenue - Costa Mesa, CA 92626
		
	Lease Dated:	  	August 5, 1986

 The term of the referenced lease is hereby extended from: 
 November 1, 2005 through October 31, 2010 
 With the following changes only:

 A. Security Deposit increased from: $8,743.00 to $11,730.00 
 The increase in Security Deposit will be reflected on your rent statement effective November 1, 2005. 
 B. Rent.
The monthly rent for the period of this Lease Extension shall be as follows: 
  

				
	 Months
	  	Monthly Rent
	 11/01/05 – 10/31/06
	  	$	10,200.00
	 11/01/06 – 10/31/07
	  	$	10,500.00
	 11/01/07 – 10/31/08
	  	$	10,820.00
	 11/01/08 – 10/31/09
	  	$	11,146.00
	 11/01/09 – 10/31/10
	  	$	11,480.00

 The above rental schedule does not include the estimated monthly Common Area Operating Expense, which is currently
$250.00. 
 C. Late Rent Adjustments. Notwithstanding other provisions in this lease which pertain to the payment of rent, or late charges, it is
understood and agreed that if the Lessee fails to pay the rent specified in this lease, within the timeframe specified, for three (3) or more times in any twelve month period after the commencement date of this lease, then the Lessor may, at
the Lessor’s option, increase the monthly rent for the balance of the lease by ten (10) percent. Said increase shall commence after the Lessor gives the Lessee a thirty-day notice, in writing, that the increase shall go into effect.

 D. Restoration of the Premises. On or before the scheduled termination of this Lease, or any variations thereof, the Lessee shall at Lessee’s
expense restore the Premises to the original condition, taking into consideration the reasonable wear and tear of the Premises and in accordance to the provisions of this lease. The requirements of restoration in this paragraph shall not exceed the
requirements of restoration in the original lease term. 
 E. Option to Cancel. Lessee shall have the right to cancel this Lease causing same to
become null and void and of no further force or effect under the following terms and conditions: 
  

	 	1.	Lessee shall notify Lessor in writing, a minimum of one hundred and eighty days, prior to the effective date of the selected cancellation date of the Lease.


  

	 	2.	The selected cancellation date shall be between November 1, 2008 and October 31, 2009. 

  

	 	3.	On or before the selected cancellation date the Lessee shall pay to the Lessor a cancellation fee equal to one half of the remaining sums due the Lessor as rent for the balance of
the Lease contract. 

  

	 	4.	The Lessee shall not be in default under any of the terms and conditions of this Lease. 









							
	 Premises
	  	Lease Dated	  	Commencement
Date	  	Expiration
Date
	 201 Paularino Avenue - Costa Mesa, CA
	  	02/04/05	  	06/01/05	  	10/31/10
	 205 Paularino Avenue - Costa Mesa, CA
	  	01/05/05	  	01/15/05	  	10/31/10
	 235 Paularino Avenue - Costa Mesa, CA
	  	03/23/86	  	05/01/84	  	10/31/10
	 3159-A Paularino Avenue - Costa Mesa, CA
	  	03/11/97	  	04/01/97	  	10/31/10
	 3159-B Redhill Avenue - Costa Mesa, CA
	  	02/04/05	  	06/01/05	  	10/31/10
	 3161 Redhill Avenue - Costa Mesa, CA
	  	01/24/04	  	04/01/04	  	10/31/10
	 3163 Redhill Avenue - Costa Mesa, CA
	  	03/31/86	  	04/01/86	  	10/31/10
	 3165 Redhill Avenue - Costa Mesa, CA
	  	08/06/01	  	08/15/01	  	10/31/10
	 3169-A Redhill Avenue - Costa Mesa, CA
	  	10/28/85	  	11/01/85	  	10/31/10
	 3169-B Redhill Avenue - Costa Mesa, CA
	  	08/28/85	  	11/01/85	  	10/31/10

 Note: All of the above Leases are between Trico Rents, a California General Partnership as Lessor and Ceradyne
Inc., a Delaware Corporation as Lessee. 
 F. Roof Repairs. Notwithstanding the provisions of paragraph 7.2, it is understood and agreed that the
lessee shall be responsible for all roof maintenance and repairs for the duration of this Lease or any extensions thereof. 
 G. Liability Insurance.
Notwithstanding the provisions of paragraph 8 it is understood and agreed that in the event Lessee fails to provide liability insurance, in accordance to the terms and conditions of paragraph 8, for any three consecutive months of this lease
then the Lessor may, at Lessor’s option, increase the monthly rent for the remainder of the term of this lease by ten percent. 
 All other terms and
conditions of the Lease dated August 5, 1986 shall remain the same.  
  

									
	APPROVED BY: LESSOR	 		 	APPROVED BY: LESSEE
			
	TRICO RENTS, A CALIFORNIA GENERAL PARTNERSHIP	 		 	CERADYNE, INC., A DELAWARE CORPORATION
	 By: Trico Realty Inc., Its Manager
	 		 	
			
	 /s/ Clarence J. Turner
	 		 	 /s/ Jerrold J. Pellizon

	 5-31-05
	 		 	 5/31/05

	 Date:
	 		 	 Date

			
		 		 	AFTER HOURS EMERGENCY CONTACT:
					
		 		 		 	 Name:
	 	  
					
		 		 		 	 Phone: