Lease:  3169-B Red Hill Ave.



 Exhibit 10.38 
 STANDARD INDUSTRIAL LEASE-GROSS 
 AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 
 

 
 1. Parties. This Lease, dated, for reference purposes only, October 28, 1985, is made by and between TRICO RENTS, a
Partnership (herein called “Lessor”) and CERADYNE, INC., a California Corporation (herein called “Lessee”). 
 2. Premises. Lessor
hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all of the conditions set forth herein, that certain real property situated in the County of Orange State of California commonly known as 3169–B Red
Hill Avenue, Costa Mesa, California and described as an office suite of approximately 3,600 square feet. Said real property including the land and all improvements therein, is herein called “the Premises”. 
 3. Term. 
 3.1 Term. The term of this Lease
shall be for Five (5) Years commencing on November 1, 1985 and ending on October 31, 1990 unless sooner terminated pursuant to any provision hereof. 
 3.2 Delay in Possession. Notwithstanding said commencement date, if for any reason Lessor cannot deliver possession of the Premises to Lessee on said date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or the obligations of Lessee hereunder or extend the term hereof, but in such case, Lessee shall not be obligated to pay rent until possession of the Premises is tendered to Lessee; provided,
however, that if Lessor shall not have delivered possession of the Premises within sixty (60) days from said commencement date, Lessee may, at Lessee’s option, by notice in writing to Lessor within ten (10) days thereafter, cancel
this Lease, in which event the parties shall be discharged from all obligations hereunder; provided further, however, that if such written notice of Lessee is not received by Lessor within said ten (10) day period, Lessee’s right to cancel
this Lease hereunder shall terminate and be of no further force or effect. 
 3.3 Early Possession. If Lessee occupies the Premises
prior to said commencement date, such occupancy shall be subject to all provisions hereof, such occupancy shall not advance the termination date, and Lessee shall pay rent for such period at the initial monthly rates set forth below. 
 4. Rent. Lessee shall pay to Lessor as rent for the Premises,
                                        
                    , in advance, on the              day of each month of the
term hereof. Lessee shall pay Lessor upon the execution hereof $                     as rent for See Paragraph 47 for amendment to this
paragraph. Rent for any period during the term hereof which is for less than one month shall be a pro rata portion of the monthly installment. Rent shall be payable in lawful money of the United States to Lessor at the address stated herein or to
such other persons or at such other places as Lessor may designate in writing. 
 5. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof $3,649.00 as security for Lessee’s faithful performance of Lessee’s obligations hereunder. If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Lessor may
use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default or for the payment of any other sum to which Lessor may become obligated by reason of Lessee’s default, or to compensate Lessor for
any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with Lessor in an amount sufficient to restore said
deposit to the full amount hereinabove stated and Lessee’s failure to do so shall be a material breach of this Lease. If the monthly rent shall, from time to time, increase during the term of this Lease, Lessee shall thereupon deposit with
Lessor additional security deposit so that the amount of security deposit held by Lessor shall at all times bear the same, proportion to current rent as the original security deposit bears to the original monthly rent set forth in paragraph 4
hereof. Lessor shall not be required to keep said deposit separate from its general accounts. If Lessee performs all of Lessee’s obligations hereunder, said deposit, or so much thereof as has not theretofore been applied by Lessor, shall be
returned, without payment of interest or other increment for its use, to Lessee (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest hereunder) at the expiration of the term hereof, and after Lessee has vacated the
Premises. No trust relationship is created herein between Lessor and Lessee with respect to said Security Deposit. 
 6. Use. 
 6.1 Use. The Premises shall be used and occupied only for corporate offices for a hi-tech ceramics company and affiliated operations. or any other
use which is reasonably comparable and for no other purpose. 
 6.2 Compliance with Law. 
 (a) Lessor warrants to Lessee that the Premises, in its state existing on the date that the Lease term commences, but without regard to
the use for which Lessee will use the Premises, does not violate any covenants or restrictions of record, or any applicable building code, regulation or ordinance in effect on such Lease term commencement date. In the event it is determined that
this warranty has been violated, then it shall be the obligation of the Lessor, after written notice from Lessee, to promptly, at Lessor’s sole cost and expense, rectify any such violation. In the event Lessee does not give to Lessor written
notice of the violation of this warranty within six months from the date that the Lease term commences, the correction of same shall be the obligation of the Lessee at Lessee’s sole cost. The warranty contained in this paragraph 6.2
(a) shall be of no force or effect if, prior to the date of this Lease, Lessee was the owner or occupant of the Premises, and, in such event, Lessee shall correct any such violation at Lessee’s sole cost. 
 (b) Except as provided in paragraph 6.2(a), Lessee shall, at Lessee’s expense, comply promptly with all applicable statutes,
ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the term or any part of the term hereof, regulating the use by Lessee of the Premises. Lessee shall not use nor permit the use of the
Premises in any manner that will tend to create waste or a nuisance or, if there shall be more than one tenant in the building containing the Premises, shall tend to disturb such other tenants. 
 6.3 Condition of Premises. 
 (a) Lessor shall deliver the Premises to Lessee clean and free of debris on Lease commencement date (unless Lessee is already in possession) and Lessor further warrants to Lessee that the plumbing, lighting, air conditioning, heating, and
loading doors in the Premises shall be in good operating condition on the Lease commencement date. In the event that it is determined that this warranty has been violated, then it shall be the obligation of Lessor, after receipt of written notice
from Lessee setting forth with specificity the nature of the violation, to promptly, at Lessor’s sole cost, rectify such violation. Lessee’s failure to give such written notice to Lessor within thirty (30) days after the Lease
commencement date shall cause the conclusive presumption that Lessor has complied with all of Lessor’s obligations hereunder. The warranty contained in this paragraph 6.3(a) shall be of no force or effect if prior to the date of this Lease,
Lessee was the owner or occupant of the Premises. 
 (b) Except as otherwise provided in this Lease, Lessee hereby accepts the
Premises in their condition existing as of the Lease commencement date or the date that Lessee takes possession of the Premises, whichever is earlier, subject to all applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any covenants or restrictions of record and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto. Lessee acknowledges that neither Lessor
nor Lessor’s agent has made any representation or warranty as to the present or future suitability of the Premises for the conduct of Lessee’s business. 
 7. Maintenance, Repairs and Alterations. 
 7.1 Lessor’s Obligations. Subject to the provisions of Paragraphs 6,
7.2, and 9 and except for damage caused by any negligent or intentional act or omission of Lessee, Lessee’s agents, employees, or invitees in which event Lessee shall repair the damage, Lessor, at Lessor’s expense, shall keep in good
order, condition and repair the foundations, exterior walls and the exterior roof of the Premises. Lessor shall not, however, be obligated to paint such exterior, nor shall Lessor be required to maintain the interior surface of exterior walls,
windows, doors or plate glass. Lessor shall have no obligation to make repairs under this Paragraph 7.1 until a reasonable time after receipt of written notice of the need for such repairs. Lessee expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make repairs at Lessor’s expense or to terminate this Lease because of Lessor’s failure to keep the Premises in good order, condition and repair. 
 7.2 Lessee’s Obligations. 
 (a) Subject to the provisions of Paragraphs 6, 7.1 and 9, Lessee, at Lessee’s expense, shall keep in good order, condition and repair the Premises and every part thereof (whether or not the damaged portion of the
Premises or the means of repairing the same are reasonably or readily accessable to Lessee) including, without limiting the generality of the foregoing, all plumbing, heating, air conditioning, (Lessee shall procure and 

  


							
	 © American Industrial Real Estate Association 1980
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maintain, at Lessee’s expense, an air conditioning system maintenance contract) ventilating, electrical and lighting facilities and equipment within the
Premises, fixtures, interior walls and interior surface of exterior walls, ceilings, windows, doors, plate glass, and skylights, located within the Premises, and all landscaping, driveways, parking lots, fences and signs located in the Premises and
all sidewalks and parkways adjacent to the Premises. 
 (b) If Lessee fails to perform Lessee’s obligations under this
Paragraph 7.2 or under any other paragraph of this Lease, Lessor may at Lessor’s option enter upon the Premises after 10 days’ prior written notice to Lessee (except in the case of emergency, in which case no notice shall be required),
perform such obligations on Lessee’s behalf and put the Premises in good order, condition and repair, and the cost thereof together with interest thereon at the maximum rate then allowable by law shall be due and payable as additional rent to
Lessor together with Lessee’s next rental installment. 
 (c) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same condition as received, ordinary wear and tear excepted, clean and free of debris. Lessee shall repair any damage to the Premises occasioned by the installation or removal of its
trade fixtures, furnishings and equipment. Notwithstanding anything to the contrary otherwise stated in this Lease, Lessee shall leave the air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning,
plumbing and fencing on the premises in good operating condition. 
 7.3 Alterations and Additions. 
 (a) Lessee shall not, without Lessor’s prior written consent make any alterations, improvements, additions, or Utility Installations
in, on or about the Premises, except for nonstructural alterations not exceeding $2,500 in cumulative costs during the term of this Lease. In any event, whether or not in excess of $2,500 in cumulative cost, Lessee shall make no change or alteration
to the exterior of the Premises nor the exterior of the building(s) on the Premises without Lessor’s prior written consent. As used in this Paragraph 7.3 the term “Utility Installation” shall mean carpeting, window coverings, air
lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning, plumbing, and fencing. Lessor may require that Lessee remove any or all of said alterations, improvements, additions or Utility Installations
at the expiration of the term, and restore the Premises to their prior condition. Lessor may require Lessee to provide Lessor, at Lessee’s sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the
estimated cost of such improvements, to insure Lessor against any liability for mechanic’s and materialmen’s liens and to insure completion of the work. Should Lessee make any alterations, improvements, additions or Utility Installations
without the prior approval of Lessor, Lessor may require that Lessee remove any or all of the same. 
 (b) Any alterations,
improvements, additions or Utility Installations in, or about the Premises that Lessee shall desire to make and which requires the consent of the Lessor shall be presented to Lessor in written form, with proposed detailed plans. If Lessor shall give
its consent, the consent shall be deemed conditioned upon Lessee acquiring a permit to do so from appropriate governmental agencies, the furnishing of a copy thereof to Lessor prior to the commencement of the work and the compliance by Lessee of all
conditions of said permit in a prompt and expeditious manner. 
 (c) Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for use in the Premises, which claims are or may be secured by any mechanics’ or materialmen’s lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days’ notice prior to the commencement of any work in the Premises, and Lessor shall have the right to post notices of non-responsibility in or on the Premises as provided by law. If Lessee shall, in good
faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend itself and Lessor against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, upon the condition that if Lessor shall require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises free from the effect of such lien or claim. In addition, Lessor may require Lessee to pay Lessor’s attorneys fees and costs in participating in such action if Lessor shall decide it is to its best
interest to do so. 
 (d) Unless Lessor requires their removal, as set forth in Paragraph 7.3(a), all alterations,
improvements, additions and Utility Installations (whether or not such Utility Installations constitute trade fixtures of Lessee), which may be made on the Premises, shall become the property of Lessor and remain upon and be surrendered with the
Premises at the expiration of the term. Notwithstanding the provisions of this Paragraph 7.3(d), Lessee’s machinery and equipment, other than that which is affixed to the Premises so that it cannot be removed without material damage to the
Premises, shall remain the property of Lessee and may be removed by Lessee subject to the provisions of Paragraph 7.2(c). 
 8. Insurance; Indemnity.

 8.1 Liability Insurance - Lessee. Lessee shall, at Lessee’s expense, obtain and keep in force during the term of this Lease
a policy of Combined Single Limit Bodily Injury and Property Damage Insurance insuring Lessee and Lessor against any liability arising out of the use, occupancy or maintenance of the Premises and all other areas appurtenant thereto. Such insurance
shall be in an amount hot less than $500,000 per occurrence. The policy shall insure performance by Lessee of the indemnity provisions of this Paragraph 8. The limits of said insurance shall not, however, limit the liability of Lessee hereunder.

 8.2 Liability Insurance - Lessor. Lessor shall obtain and keep in force during the term of this Lease a policy of Combined Single
Limit Bodily Injury and Property Damage Insurance, insuring Lessor, but not Lessee, against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto in an amount not less than
$500,000 per occurrence. 
 8.3 Property Insurance. Lessor shall obtain and keep in force during the term of this Lease a policy or
policies of insurance covering loss or damage to the Premises, but not Lessee’s fixtures, equipment or tenant improvements in an amount not to exceed the full replacement value thereof, as the same may exist from time to time, providing
protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, flood (in the event same is required by a lender having a lien on the Premises) special extended perils (“all
risk”, as such term is used in the insurance industry) but not plate glass insurance. In addition, the Lessor shall obtain and keep In force, during the term of this Lease, a policy of rental value insurance covering a period of one year, with
loss payable to Lessor, which insurance shall also cover all real estate taxes and insurance costs for said period. 
 8.4 Payment of
Premium Increase. 
 (a) Lessee shall pay to Lessor, during the term hereof, in addition to the rent, the amount of any
increase in premiums for the insurance required under Paragraphs 8.2 and 8.3 over and above such premiums paid during the Base Period, as hereinafter defined, whether such premium increase shall be the result of the nature of Lessee’s
occupancy, any act or omission of Lessee, requirements of the holder of a mortgage or deed of trust covering the Premises, increased valuation of the Premises, or general rate increases. In the event that the Premises have been occupied previously,
the words “Base Period” shall mean the last twelve months of the prior occupancy. In the event that the Premises have never been previously occupied, the premiums during the “Base Period” shall be deemed to be the lowest premiums
reasonably obtainable for said insurance assuming the most nominal use of the Premises. Provided, however, in lieu of the Base Period, the parties may insert a dollar amount at the end of this sentence which figure shall be considered as the
insurance premium for the Base Period:
$                                        
.. In no event, however, shall Lessee be responsible for any portion of the premium cost attributable to liability insurance coverage in excess of $1,000,000 procured under paragraph 8.2. 
 (b) Lessee shall pay any such premium increases to Lessor within 30 days after receipt by Lessee of a copy of the premium statement or
other satisfactory evidence of the amount due. If the insurance policies maintained hereunder cover other improvements in addition to the Premises, Lessor shall also deliver to Lessee a statement of the amount of such increase attributable to the
Premises and showing in reasonable detail, the manner in which such amount was computed. If the term of this Lease shall not expire concurrently with the expiration of the period covered by such insurance, Lessee’s liability for premium
increases shall be prorated on an annual basis. 
 (c) If the Premises are part of a larger building, then Lessee shall not be
responsible for paying any increase in the property insurance premium caused by the acts or omissions of any other tenant of the building of which the Premises are a part. 
 8.5 Insurance Policies. Insurance required hereunder shall be in companies holding a “General Policyholders Rating” of at least B plus,
or such other rating as may be required by a lender having a lien on the Premises, as set forth in the most current issue of “Best’s Insurance Guide”. Lessee shall deliver to Lessor copies of policies of liability insurance required
under Paragraph 8.1 or certificates evidencing the existence and amounts of such insurance. No such policy shall be cancellable or subject to reduction of coverage or other modification except after thirty. (30) days’ prior written notice
to Lessor. Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with renewals or “binders” thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount
shall be payable by Lessee upon demand. Lessee shall not do or permit to be done anything which shall invalidate the insurance policies referred to in Paragraph 8.3. 
 8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and relieve the other, and waive their entire right of recovery against the other for loss or damage arising out of or incident to the perils
insured against under paragraph 8.3, which perils occur in, on or about the Premises, whether due to the negligence of Lessor or Lessee or their agents, employees, contractors and/or invitees. Lessee and Lessor shall, upon obtaining the policies of
Insurance required hereunder, give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease. 
 8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor from and against any and all claims arising from Lessee’s use of the Premises, or from the conduct of Lessee’s business or from any
activity, work or things done, permitted or suffered by Lessee in or about the Premises or elsewhere and shall further Indemnify and hold harmless Lessor from and against any and all claims arising from any breach or default in the performance of
any obligation on Lessee’s part to be performed under the terms of this Lease, or arising from any negligence of the Lessee, or any of Lessee’s agents, contractors, or employees, and from and against all costs, attorney’s fees,
expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought against Lessor by reason of any such claim, Lessee upon notice from Lessor shall defend
the same at Lessee’s expense by counsel satisfactory to Lessor. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property or injury to persons, in, upon or about the Premises arising from any cause
and Lessee hereby waives all claims in respect thereof against Lessor. 
 8.8 Exemption of Lessor from Liability. Lessee hereby agrees
that Lessor shall not be liable for injury to Lessee’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Lessee, Lessee’s employees, invitees, customers, or any other person in or
about the Premises, nor shall Lessor be liable for injury to the person of Lessee, Lessee’s employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether the said damage or injury results from conditions arising upon the Premises or
upon other portions of the building of which the Premises are a part, or from other sources or places and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Lessee. Lessor shall not be
liable for any damages arising from any act or neglect of any other tenant, if any, of the building in which the Premises are located. 
  


							
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 9. Damage or Destruction. 
 9.1 Definitions. 
 (a) “Premises Partial Damage” shall herein mean damage or
destruction to the Premises to the extent that the cost of repair is less than 50% of the fair market value of the Premises immediately prior to such damage or destruction. “Premises Building Partial Damage” shall herein mean damage or
destruction to the building of which the Premises are a part to the extent that the cost of repair is less than 50% of the fair market value of such building as a whole immediately prior to such damage or destruction. 
 (b) “Premises Total Destruction” shall herein mean damage or destruction to the Premises to the extent that the cost of repair
is 50% or more of the fair market value of the Premises immediately prior to such damage or destruction. “Premises Building Total Destruction” shall herein mean damage or destruction to the building of which the Premises are a part to the
extent that the cost of repair is 50% or more of the fair market value of such building as a whole immediately prior to such damage or destruction. 
 (c) “Insured Loss” shall herein mean damage or destruction which was caused by an event required to be covered by the insurance described in paragraph 8. 
 9.2 Partial Damage — Insured Loss. Subject to the provisions of paragraphs 9.4, 9.5 and 9.6, if at any time during the term of this Lease
there is damage which is an Insured Loss and which falls into the classification of Premises Partial Damage or Premises Building Partial Damage, then Lessor shall, at Lessor’s sole cost, repair such damage, but not Lessee’s fixtures,
equipment or tenant improvements, as soon as reasonably possible and this Lease shall continue in full force and effect. 
 9.3. Partial
Damage — Uninsured Loss. Subject to the provisions of Paragraphs 9.4, 9.5 and 9.6, if at any time during the term of this Lease there is damage which is not an Insured Loss and which falls within the classification of Premises Partial
Damage or Premises Building Partial Damage, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense), Lessor may at Lessor’s option either (i) repair such damage as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) give written notice to Lessee within thirty (30) days after the date of the occurrence of such damage of
Lessor’s intention to cancel and terminate this Lease, as of the date of the occurrence of such damage. In the event Lessor elects to give such notice of Lessor’s intention to cancel and terminate this Lease, Lessee shall have the right
within ten (10) days after the receipt of such notice to give written notice to Lessor of Lessee’s intention to repair such damage at Lessee’s expense, without reimbursement from Lessor, in which event this Lease shall continue in
full force and effect, and Lessee shall proceed to make such repairs as soon as reasonably possible. If Lessee does not give such notice within such 10-day period this Lease shall be cancelled and terminated as of the date of the occurrence of such
damage. 
 9.4 Total Destruction. If at any time during the term of this Lease there is damage, whether or not an Insured Loss,
(including destruction required by any authorized public authority), which falls into the classification of Premises Total Destruction or Premises Building Total Destruction, this Lease shall automatically terminate as of the date of such total
destruction. 
 9.5 Damage Near End of Term. 
 (a) If at any time during the last six months of the term of this Lease there is damage, whether or not an Insured Loss, which falls
within the classification of Premises Partial Damage, Lessor may at Lessor’s option cancel and terminate this Lease as of the date of occurrence of such damage by giving written notice to Lessee of Lessor’s election to do so within 30 days
after the date of occurrence of such damage. 
 (b) Notwithstanding paragraph 9.5(a), in the event that Lessee has an option
to extend or renew this Lease, and the time within which said option may be exercised has not yet expired. Lessee shall exercise such option, if it is to be exercised at all, no later than 20 days after the occurrence of an Insured Loss falling
within the classification of Premises Partial Damage during the last six months of the term of this Lease. If Lessee duly exercises such option during said 20 day period, Lessor shall, at Lessor’s expense, repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option during said 20 day period, then Lessor may at Lessor’s option terminate and cancel this Lease as of the expiration of said 20
day period by giving written notice to Lessee of Lessor’s election to do so within 10 days after the expiration of said 20 day period, notwithstanding any term or provision in the grant of option to the contrary. 
 9.6 Abatement of Rent; Lessee’s Remedies. 
 (a) In the event of damage described in paragraphs 9.2 or 9.3, and Lessor or Lessee repairs or restores the Premises pursuant to the provisions of this Paragraph 9, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion to the degree to which Lessee’s use of the Premises is impaired. Except for abatement of rent, if any, Lessee shall have no claim against Lessor for any damage
suffered by reason of any such damage, destruction, repair or restoration. 
 (b) If Lessor shall be obligated to repair or
restore the Premises under the provisions of this Paragraph 9 and shall not commence such repair or restoration within 90 days after such obligations shall accrue, Lessee may at Lessee’s option cancel and terminate this Lease by giving Lessor
written notice of Lessee’s election to do so at any time prior to the commencement of such repair or restoration. In such event this Lease shall terminate as of the date of such notice. 
 9.7 Termination—Advance Payments. Upon termination of this Lease pursuant to this Paragraph 9, an equitable adjustment shall be made
concerning advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee’s security deposit as has not theretofore been applied by Lessor. 
 9.8. Waiver. Lessor and Lessee waive the provisions of any statutes which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease. 
 10. Real Property Taxes. 
 10.1 Payment of Tax Increase. Lessor shall pay the real property tax, as defined in paragraph 10.3, applicable to the Premises; provided, however,
that Lessee shall pay, in addition to rent, the amount, if any, by which real property taxes applicable to the Premises increase over the fiscal real estate tax year 1985 1986. Such payment shall be made by Lessee within thirty (30) days after
receipt of Lessor’s written statement setting forth the amount of such increase and the computation thereof. If the term of this Lease shall not expire concurrently with the expiration of the tax fiscal year, Lessee’s liability for
increased taxes for the last partial lease year shall be prorated on an annual basis. 
 10.2 Additional Improvements. Notwithstanding
paragraph 10.1 hereof, Lessee shall pay to Lessor upon demand therefor the entirety of any increase in real property tax if assessed solely by reason of additional improvements placed upon the Premises by Lessee or at Lessee’s request.

 10.3 Definition of “Real Property Tax”. As used herein, the term “real property tax” shall include any form of
real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Premises by any
authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of
Lessor in the Premises or in the real property of which the Premises are a part, as against Lessor’s right to rent or other income therefrom, and as against Lessor’s business of leasing the Premises. The term “real property tax”
shall also include any tax, fee, levy, assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy, assessment or charge hereinabove included within the definition of “real property tax,” or (ii) the
nature of which was hereinbefore included within the definition of “real property tax,” or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June
1, 1978, or (iv) which is imposed as a result of a transfer, either partial or total, of Lessor’s interest in the Premises or which is added to a tax or charge hereinbefore included within the definition of real property tax by reason of
such transfer, or (v) which is imposed by reason of this transaction, any modifications or changes hereto, or any transfers hereof. 
 10.4 Joint Assessment. If the Premises are not separately assessed, Lessee’s liability shall be an equitable proportion of the real property taxes for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available. Lessor’s reasonable determination thereof, in good faith, shall be
conclusive. 
 10.5 Personal Property Taxes. 
 (a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall cause said trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor.

 (b) If any of Lessee’s said personal property shall be assessed with Lessor’s real property, Lessee shall pay
Lessor the taxes attributable to Lessee within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee’s property & See Paragraph 51 for amendment to this paragraph. 
 11. Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone and other utilities and services supplied to the Premises, together with any
taxes thereon. If any such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion to be determined by Lessor of all charges jointly metered with other premises. 
 12. Assignment and Subletting. 
 12.1 Lessor’s
Consent Required. Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee’s interest in this Lease or in the Premises, without Lessor’s prior
written consent, which Lessor shall not unreasonably withhold. Lessor shall respond to Lessee’s request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent
shall be void, and shall constitute a breach of this Lease. 
 12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof, without Lessor’s consent, to any corporation which controls, is controlled by or is under common control with Lessee, or to any corporation resulting from the merger or
consolidation with Lessee, or to any person or entity which acquires all the assets of Lessee as a going concern of the business that is being conducted on the Premises, provided that said assignee assumes, in full, the obligations of Lessee under
this Lease. Any such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of this Lease even if after such assignment or subletting the terms of this Lease are materially changed or altered without the consent of
Lessee, the consent of whom shall not be necessary. 
 12.3 No Release of Lessee. Regardless of Lessor’s consent, no subletting
or assignment shall release Lessee of Lessee’s obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations to be performed by Lessee hereunder. The acceptance of rent by Lessor from any other person
shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee of Lessee or any successor
of Lessee, in the performance of any of the terms hereof, Lessor may proceed directly against Lessee without the necessity of exhausting remedies against said assignee. Lessor may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to this Lease with assignees of Lessee, without notifying Lessee, or any successor of Lessee, and without obtaining its or their consent thereto and such action shall not relieve Lessee of liability under this Lease.

 12.4 Attorney’s Fees. In the event Lessee shall assign or sublet the Premises or request the consent of Lessor to any
assignment or subletting or if Lessee shall request the consent of Lessor for any act Lessee proposes to do then Lessee shall pay Lessor’s reasonable attorneys fees incurred in connection therewith, such attorneys fees not to exceed $350.00 for
each such request. 
  


							
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 13. Defaults; Remedies. 
 13.1 Defaults. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: 
 (a) The vacating or abandonment of the Premises by Lessee. 
 (b) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of three days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to Pay
Rent or Quit shall also constitute the notice required by this subparagraph. 
 (c) The failure by Lessee to observe or
perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in paragraph (b) above, where such failure shall continue for a period of 30 days after written notice thereof from
Lessor to Lessee; provided, however, that if the nature of Lessee’s default is such that more than 30 days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said 30-day
period and thereafter diligently prosecutes such cure to completion. 
 (d) (i) The making by Lessee of any general
arrangement or assignment for the benefit of creditors; (ii) Lessee becomes a “debtor” as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within
60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within 30
days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days. Provided,
however, in the event that any provision of this paragraph 13.1(d) is contrary to any applicable law, such provision shall be of no force or effect. 
 (e) The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in interest of Lessee or any guarantor of Lessee’s obligation
hereunder, and any of them, was materially false. 
 13.2 Remedies. In the event of any such material default or breach by Lessee,
Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or breach: 
 (a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee’s default including, but not limited to, the cost of recovering
possession of the Premises; expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorney’s fees, and any real estate commission actually paid; the worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided; that portion of the
leasing commission paid by Lessor pursuant to Paragraph 15 applicable to the unexpired term of this Lease. 
 (b) Maintain
Lessee’s right to possession in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event Lessor shall be entitled to enforce all of Lessor’s rights and remedies under this Lease,
including the right to recover the rent as it becomes due hereunder. 
 (c) Pursue any other remedy now or hereafter available
to Lessor under the laws or judicial decisions of the state wherein the Premises are located. Unpaid installments of rent and other unpaid monetary obligations of Lessee under the terms of this Lease shall bear interest from the date due at the
maximum rate then allowable by law. 
 13.3 Default by Lessor. Lessor shall not be in default unless Lessor fails to perform
obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor and to the holder of any first mortgage or deed of trust covering the Premises whose name and address
shall have theretofore been furnished to Lessee in writing, specifying wherein Lessor has failed to perform such obligation; provided, however, that if the nature of Lessor’s obligation is such that more than thirty (30) days are required
for performance then Lessor shall not be in default if Lessor commences performance within such 30-day period and thereafter diligently prosecutes the same to completion. 
 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor’s designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 6% of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3) consecutive installments of rent, then rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding paragraph 4 or any other provision of
this Lease to the contrary. 
 13.5 Impounds. In the event that a late charge is payable hereunder, whether or not collected, for
three (3) installments of rent or any other monetary obligation of Lessee under the terms of this Lease, Lessee shall pay to Lessor, if Lessor shall so request, in addition to any other payments required under this Lease, a monthly advance
installment, payable at the same time as the monthly rent, as estimated by Lessor, for real property tax and insurance expenses on the Premises which are payable by Lessee under the terms of this Lease. Such fund shall be established to insure
payment when due, before delinquency, of any or all such real property taxes and insurance premiums. If the amounts paid to Lessor by Lessee under the provisions of this paragraph are insufficient to discharge the obligations of Lessee to pay such
real property taxes and insurance premiums as the same become due, Lessee shall pay to Lessor, upon Lessor’s demand, such additional sums necessary to pay such obligations. All moneys paid to Lessor under this paragraph may be intermingled with
other moneys of Lessor and shall not bear interest. In the event of a default in the obligations of Lessee to perform under this Lease, then any balance remaining from funds paid to Lessor under the provisions of this paragraph may, at the option of
Lessor, be applied to the payment of any monetary default of Lessee in lieu of being applied to the payment of real property tax and insurance premiums. 
 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called “condemnation”), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 10% of the floor area of the building on the Premises, or more than 25% of the land area of the Premises which
is not occupied by any building, is taken by condemnation, Lessee may, at Lessee’s option, to be exercised in writing only within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the rent shall be reduced in the proportion that the floor area of the building taken bears to the total floor area of the building
situated on the Premises. No reduction of rent shall occur if the only area taken is that which does not have a building located thereon. Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold or for the taking of the fee, or as severance damages; provided, however, that
Lessee shall be entitled to any award for loss of or damage to Lessee’s trade fixtures and removable personal property. In the event that this Lease is not terminated by reason of such condemnation, Lessor shall to the extent of severance
damages received by Lessor in connection with such condemnation, repair any damage to the Premises caused by such condemnation except to the extent that Lessee has been reimbursed therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair. 
 15. Broker’s Fee. 
 (a) Upon execution of this Lease by both parties, Lessor shall pay to
                                        
                                        
    
                                        
                                        
                                        
Licensed real estate broker(s), a fee as set forth in a separate agreement between Lessor and said broker(s), or in the event there is no separate agreement between Lessor and said broker(s), the sum of
$                             , for brokerage services rendered by said broker(s) to Lessor in this
transaction. 
 (b) Lessor further agrees that if Lessee exercises any Option as defined in paragraph 39.1 of this Lease,
which is granted to Lessee under this Lease, or any subsequently granted option which is substantially similar to an Option granted to Lessee under this Lease, or if Lessee acquires any rights to the Premises or other premises described in this
Lease which are substantially similar to what Lessee would have acquired had an Option herein granted to Lessee been exercised, or if Lessee remains in possession of the Premises after the expiration of the term of this Lease after having failed to
exercise an Option, or if said broker(s) are the procuring cause of any other lease or sale entered into between the parties pertaining to the Premises and/or any adjacent property in which Lessor has an interest, then as to any of said
transactions, Lessor shall pay said broker(s) a fee in accordance with the schedule of said broker(s) in effect at the time of execution of this Lease. 
 (c) Lessor agrees to pay said fee not only on behalf of Lessor but also on behalf of any person, corporation, association, or other entity having an ownership interest in said real property or any part thereof, when
such fee is due hereunder. Any transferee of Lessor’s interest in this Lease, whether such transfer is by agreement or by operation of law, shall be deemed to have assumed Lessor’s obligation under this Paragraph 15. Said broker shall be a
third party beneficiary of the provisions of this Paragraph 15. 
 16. Estoppel Certificate. 
 (a) Lessee shall at any time upon not less than ten (10) days’ prior written notice from Lessor execute, acknowledge and deliver
to Lessor a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect)
and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to Lessee’s knowledge, any uncured defaults on the part of Lessor hereunder, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Premises. 
 (b) At Lessor’s option, Lessee’s failure to deliver such statement within such time shall be a material breach of this Lease or shall be conclusive upon Lessee (i) that this Lease is in full force and effect, without
modification except as may be represented by Lessor, (ii) that there are no uncured defaults in Lessor’s performance, and (iii) that not more than one month’s rent has been paid in advance or such failure may be considered by Lessor
as a default by Lessee under this Lease. 
  


							
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 (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof,
Lessee hereby agrees to deliver to any lender or purchaser designated by Lessor such financial statements of Lessee as may be reasonably required by such lender or purchaser. Such statements shall include the past three years’ financial
statements of Lessee. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 
 17. Lessor’s Liability. The term “Lessor” as used herein shall mean only the owner or owners at the time in question of the fee title or a lessee’s interest in a ground lease of the
Premises, and except as expressly provided in Paragraph 15, in the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Lessor’s obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest, shall be delivered to the
grantee. The obligations contained in this Lease to be performed by Lessor shall, subject as aforesaid, be binding on Lessor’s successors and assigns, only during their respective periods of ownership. 
 18. Severability. The invalidity of any provision of this Lease as determined by a court of competent jurisdiction, shall in no way affect the validity of
any other provision hereof. 
 19. Interest on Past-due Obligations. Except as expressly herein provided, any amount due to Lessor not paid
when due shall bear interest at the maximum rate then allowable by law from the date due. Payment of such interest shall not excuse or cure any default by Lessee under this Lease, provided, however, that interest shall not be payable on late charges
incurred by Lessee nor on any amounts upon which late charges are paid by Lessee. 
 20. Time of Essence. Time
is of the essence. 
 21. Additional Rent. Any monetary obligations of Lessee to Lessor under the terms of
this Lease shall be deemed to be rent. 
 22. Incorporation of Prior Agreements; Amendments. This Lease contains all agreements of the parties
with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. Except
as otherwise stated in this Lease, Lessee hereby acknowledges that neither the real estate broker listed in Paragraph 15 hereof nor any cooperating broker on this transaction nor the Lessor or any employees or agents of any of said persons has made
any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of said Premises and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease except as otherwise specifically stated in this Lease. 
 23. Notices. Any notice required or permitted to be given hereunder shall be in writing and may be given by personal delivery or by certified mail, and if given
personally or by mail, shall be deemed sufficiently given if addressed to Lessee or to Lessor at the address noted below the signature of the respective parties, as the case may be. Either party may by notice to the other specify a different address
for notice purposes except that upon Lessee’s taking possession of the Premises, the Premises shall constitute Lessee’s address for notice purposes. A copy of all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate by notice to Lessee. 
 24.
Waivers. No waiver by Lessor or any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision. Lessor’s consent to, or approval of any act, shall not be
deemed to render unnecessary the obtaining of Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other
than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such rent. 
 25. Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a “short form” memorandum of this Lease for recording purposes. 
 26. Holding Over. If Lessee, with Lessor’s consent, remains in possession of the Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this Lease pertaining to the obligations of Lessee, but all options and rights of first refusal, if any, granted under the terms of this Lease shall be deemed terminated and
be of no further effect during said month to month tenancy. 
 27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but
shall, wherever possible, be cumulative with all other remedies at law or in equity. 
 28. Covenants and Conditions. Each provision of this Lease
performable by Lessee shall be deemed both a covenant and a condition. 
 29. Binding Effect; Choice of Law. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions of Paragraph 17, this Lease shall bind the parties, their personal representatives, successors and assigns. This Lease shall be governed by the laws of the State wherein
the Premises are located. 
 30. Subordination. 
 (a) This Lease, at Lessor’s option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the real property of which the Premises
are a part and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding such subordination, Lessee’s right to quiet possession of the Premises
shall not be disturbed if Lessee is not in default and so long as Lessee shall pay the rent and observe and perform all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee or
ground lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Lessee, this Lease shall be deemed prior to such mortgage, deed of trust, or ground lease,
whether this Lease is dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof. 
 (b) Lessee agrees to execute any documents required to effectuate an attornment, a subordination or to make this Lease prior to the lien of any mortgage, deed of trust or ground lease, as the case may be.
Lessee’s failure to execute such documents within 10 days after written demand shall constitute a material default by Lessee hereunder, or, at Lessor’s option, Lessor shall execute such documents on behalf of Lessee as Lessee’s
attomey-in-fact. Lessee does hereby make, constitute and irrevocably appoint Lessor as Lessee’s attorney-in-fact and in Lessee’s name, place and stead, to execute such documents in accordance with this paragraph 30(b). 
 31. Attorney’s Fees. If either party or the broker named herein brings an action to enforce the terms hereof or declare rights hereunder, the prevailing
party in any such action, on trial or appeal, shall be entitled to his reasonable attorney’s fees to be paid by the losing party as fixed by the court. The provisions of this paragraph shall inure to the benefit of the broker named herein who
seeks to enforce a right hereunder. 
 32. Lessor’s Access. Lessor and Lessor’s agents shall have the right to enter the Premises at
reasonable times for the purpose of inspecting the same, showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or additions to the Premises or to the building of which they are a part as
Lessor may deem necessary or desirable. Lessor may at any time place on or about the Premises any ordinary “For Sale” signs and Lessor may at any time during the last 120 days of the term hereof place on or about the Premises any ordinary
“For Lease” signs, all without rebate of rent or liability to Lessee. 
 33. Auctions. Lessee shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises without first having obtained Lessor’s prior written consent. Notwithstanding anything to the contrary in this Lease, Lessor shall not be obligated to exercise any standard of
reasonableness in determining whether to grant such consent. 
 34. Signs. Lessee shall not place any sign upon the Premises without Lessor’s
prior written consent except that Lessee shall have the right, without the prior permission of Lessor to place ordinary and usual for rent or sublet signs thereon. 
 35. Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not work a merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies. 
 36. Consents. Except for
paragraph 33 hereof, wherever in this Lease the consent of one party is required to an act of the other party, such consent shall not be unreasonably withheld. 
 37. Guarantor. In the event that there is a guarantor of this Lease, said guarantor shall have the same obligations as Lessee under this Lease. 
 38. Quiet Possession. Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, conditions and provisions on Lessee’s part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the provisions of this Lease. The individuals executing this Lease on behalf of Lessor represent and warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding upon all parties holding an ownership interest in the Premises. 
 39. Options. 
 39.1 Definition. As used in this paragraph the word “Options” has the
following meaning: (1) the right or option to extend the term of this Lease or to renew this Lease or to extend or renew any lease that Lessee has on other property of Lessor; (2) the option or right of first refusal to lease the Premises
or the right of first offer to lease the Premises or the right of first refusal to lease other property of Lessor or the right of first offer to lease other property of Lessor; (3) the right or option to purchase the Premises, or the right of
first refusal to purchase the Premises, or the right of first offer to purchase the Premises or the right or option to purchase other property of Lessor, or the right of first refusal to purchase other property of Lessor or the right of first offer
to purchase other property of Lessor. 
 39.2 Options Personal. Each Option granted to Lessee in this Lease are personal to Lessee and
may not be exercised or be assigned, voluntarily or involuntarily, by or to any person or entity other than Lessee, provided, however, the Option may be exercised by or assigned to any 

  


							
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Lessee Affiliate as defined in paragraph 12.2 of this Lease. The Options herein granted to Lessee are not assignable separate and apart from this Lease.

 39.3 Multiple Options. In the event that Lessee has any multiple options to extend or renew this Lease a later option cannot be
exercised unless the prior option to extend or renew this Lease has been so exercised. 
 39.4 Effect of Default on Options.

 (a) Lessee shall have no right to exercise an Option, notwithstanding any provision in the grant of Option to the contrary,
(i) during the time commencing from the date Lessor gives to Lessee a notice of default pursuant to paragraph 13.1 (b) or 13.1 (c) and continuing until the default alleged in said notice of default is cured, or (ii) during the period
of time commencing on the day after a monetary obligation to Lessor is due from Lessee and unpaid (without any necessity for notice thereof to Lessee) continuing until the obligation is paid, or (iii) at any time after an event of default
described in paragraphs 13.1 (a), 13.1 (d), or 13.1 (e) (without any necessity of Lessor to give notice of such default to Lessee), or (iv) in the event that Lessor has given to Lessee three or more notices of default under paragraph
13.1(b), where a late charge becomes payable under paragraph 13.4 for each of such defaults, or paragraph 13.1 (c), whether or not the defaults are cured, during the 12 month period prior to the time that Lessee intends to exercise the subject
Option. 
 (b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of
Lessee’s inability to exercise an Option because of the provisions of paragraph 39.4(a) 
 (c) All rights of Lessee under
the provisions of an Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if, after such exercise and during the term of this Lease, (i) Lessee fails to pay to Lessor
a monetary obligation of Lessee for a period of 30 days after such obligation becomes due (without any necessity of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to commence to cure a default specified in paragraph 13.1
(c) within 30 days after the date that Lessor gives notice to Lessee of such default and for Lessee fails thereafter to diligently prosecute said cure to completion, or (iii) Lessee commits a default described in paragraph 13.1(a), 13.1
(d) or 13.1 (e) (without any necessity of Lessor to give notice of such default to Lessee), or (iv) Lessor gives to Lessee three or more notices of default under paragraph 13.1 (b), where a late charge becomes payable under paragraph
13.4 for each such default, or paragraph 13.1 (c), whether or not the defaults are cured. 
 40. Multiple Tenant Building. In the
event that the Premises are part of a larger building or group of buildings then Lessee agrees that it will abide by, keep and observe all reasonable rules and regulations which Lessor, may make from time to time for the management, safety, care,
and cleanliness of the building and grounds, the parking of vehicles and the preservation of good order therein as well as for the convenience of other occupants, and tenants of the building. The violations of any such rules and regulations shall be
deemed a material breach of this Lease by Lessee. 
 41. Security Measures. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of Lessee, its agents and invitees from
acts of third parties. 
 42. Easements. Lessor reserves to itself the right, from time to time, to grant such easements, rights and
dedications that Lessor deems necessary or desirable, and to cause the recordation of Parcel Maps and restrictions, so long as such easements, rights, dedications, Maps and restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material breach of this Lease. 
 43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to
pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of said party to institute suit for recovery of
such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease. 
 44. Authority. If Lessee is a corporation, trust, or general or limited partnership, each individual
executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of said entity. If Lessee is a corporation, trust or partnership, Lessee shall, within thirty
(30) days after execution of this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor. 
 45. Conflict.
Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 
 46. Addendum. Attached hereto is an addendum or addenda containing paragraphs 47 through 54 which constitutes a part of this Lease. 
 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. 
 IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY SOLELY UPON
THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 
 The parties hereto have executed this Lease at the place on
the data specified immediately adjacent to their respective signatures. 
  

									
					
	 Executed at
	 	Costa Mesa, California	 		 		 	TRICO RENTS, a partnership
					
	 on
	 	10.29.85	 		 	 By
	 	 /s/ Clarence J. Turner

					
	 Address
	 	 201 Paularino Ave,
 Costa Mesa, CA 92626
	 		 	 By
	 	  
		 	 (714) 751-4420
	 		 		 	
				
		 		 		 	“LESSOR” (Corporate seal)
					
	 Executed at
	 	10.29.85	 		 		 	CERADYNE, INC., a California Corporation
					
	 on
	 	Costa Mesa, Calif	 		 	 By
	 	 /s/ Kenneth R. Morris

					
	 Address
	 	 3169-B Red Hill Avenue
 Costa Mesa, CA
	 		 	 By
	 	  
		 	 (714) 549-0421
	 		 		 	
				
		 		 		 	“LESSEE” (Corporate seal)

 For these forms write or call the American Industrial Real Estate Association, 350 South Figuero___ Suite 275, Los
Angeles, CA 90071 (213) 687-8777 







 ADDENDUM NO. 1 
 This Addendum refers to that certain Lease dated October 28, 1985 by and between TRICO RENTS, a General Partnership, as Lessor, and CERADYNE, INC., a Delaware Corporation, as Lessee, for the premises known as
3169-B Redhill Avenue, Costa Mesa, California and the agreement to extend said Lease dated April 8, 1991. 
 The following paragraph is
hereby incorporated into the aforementioned Lease Extension and made a part thereof: 
 PARAGRAPH D. OPTION TO RENEW. 
 Lessor hereby grants to the Lessee an Option to Renew this Lease Extension for an additional five (5) years on the following terms and conditions:

  

	 	a.	The terms and conditions of the renewal period shall be the same as the terms and conditions of this Lease Extension except that the monthly rent shall be adjusted to what is then
the Fair Market Rental. The Fair Market Rental shall include provisions to reflect rental increases, if any, during the option period. 

  

	 	b.	The Option to Renew period shall commence, if exercised, on November 1, 1995 and shall terminate on October 31, 2000. 

  

	 	c.	Lessee must notify Lessor, in writing, on or before November 1, 1994 of Lessee’s decision to exercise its Option to Renew. Within thirty (30) days of receipt thereof
by the Lessor, the Lessor agrees to forward to the Lessee, in writing, the proposed rent plus adjustments, if any, for the ensuing five years of the Option to Renew period. Upon receipt of the proposed rental schedule from the Lessor, the Lessee
shall have thirty (30) days from receipt thereof to accept or to reject the proposed rent schedule. Should the Lessee reject said proposed rent then the rent shall be fixed by the method outlined in Paragraph e of this paragraph with the
specific understanding that if the negotiations have not been finalized by June 30, 1995, then the provisions of this Option to Renew agreement will automatically become null, void and of no further force or effect. 


  

	 	d.	Lessee must not be in default under any of the terms or conditions of this Lease at the time that Lessee elects to exercise said Option to Renew. 


  

	 	e.	 Special provision regarding Fair Market Rental: In the event that Lessee elects to exercise the Option to Renew and in the further event the parties fail 











	 	 
to agree on a Fair Market Rental, per Paragraph c, then the following procedure shall be utilized in fixing the Fair Market Rental:



  

	 	1.	An independent, qualified real estate appraiser or real estate appraising company shall be employed to establish the then prevailing Fair Market Rental for the premises. The
qualification for the appraiser shall include, but shall not be limited to, membership in good standing in the America Institute of Real Estate Appraisers and the individual involved shall have been awarded the MAI designation. Further, said
appraiser of appraisal company shall have a high reputation in the industry. Said appraiser shall be selected by mutual consent of the parties hereto. In the event that the parties hereto fail to agree on the selection of the first appraiser, then
each of the parties hereto may select, independently, an appraiser to establish the Fair Market Rental in question. The selected appraisers shall then be empowered to choose a third appraiser, thus providing a total of three (3) qualified MAI
type appraisers to fix the subject rent. The three (3) appraisers will then be authorized to proceed as shown in Paragraph 2 which follows. 

  

	 	2.	Assuming the parties agree on the first appraiser, then upon receipt of the appraisal from the first selected appraiser the parties shall review said appraisal. If the parties agree
to accept the recommended rental suggested by the appraiser, then this rent shall become the fixed rent, plus rent adjustments, if any, for the ensuing five (5) year period of time in question. Should the parties fail to accept or agree upon
the recommended rental by the appraiser, then the parties agree to immediately employ the two (2) additional appraisers whose qualifications shall be equivalent to those of the first appraiser, and request that these additional appraisers
establish the Fair Market Rental appraisals, the parties shall take the results of the three (3) appraisals, add the recommended Fair Market Rental suggested by all three (3) appraisals and the result shall become the fixed rent for the
five (5) year period in questions, with any appropriate adjustments. 

  

	 	3.	It is further agreed that the cost of employing any and all appraisers shall be borne fully by the Lessor and Lessee. Each party further agrees to promptly pay said appraiser’s
fees and agrees to enter into a contract for their services. 

  

	 	4.	For purposes of this appraisal the appraisers shall assume that the facility is in a restored condition, reasonable wear and tear excepted, that there is a continuous occupancy of
the premises and that the Fair Market Rental does not escalate or deescalate the rental value for improvements installed into or onto the premises by the Lessee. 

 This Document is dated April 5, 1991. 
  

					
	APPROVED BY: LESSOR	 		 	APPROVED BY: LESSEE
			
	TRICO RENTS, a General Partnership	 		 	CERADYNE, INC., a Delaware Corporation
			
		 		 	/s/ James F. Gardner
	 /s/ Clarence J. Turner
	 		 	 /s/ David P. Reed

	 Clarence J. Turner
 President
	 		 	
			
	4-19-91        	 		 	4/18/91        
	DATE	 		 	DATE









 LEASE ADDENDUM NO. 1 
  

 This Lease Addendum refers to that certain Lease dated October 28, 1985 by and between TRICO
RENTS, a Partnership, as Lessor, and CERADYNE, INC., a California Corporation, as Lessee, for the premises known as 3169-B Red Hill Avenue, Costa Mesa, California. The following paragraphs are hereby incorporated into the aforementioned Lease and
made a part thereof: 
 PARAGRAPH 47. (AMENDS PARAGRAPH 4.) The following rent rent schedule shall prevail for the duration of this Lease:

  

				
	 RENTAL PERIOD
	  	MONTHLY
RENT
	 November 1, 1985 through December 31, 1985
	  	$	2,900.00
	 January 1, 1986 through October 31, 1987
	  	$	2,900.00
	 November 1, 1987 through October 31, 1989
	  	$	3,258.00
	 November 1, 1989 through October 31, 1990
	  	$	3,649.00

 PARAGRAPH 48. SPECIAL RENT CREDIT. Lessor and Lessee acknowledge that a major consideration the
Lessee had, prior to entering into this Lease agreement is a Lease agreement that the Lessee is obligated for as Lessee, for the premises known as 16781-A Milliken, Irvine, California. As part consideration for entering into this Lease agreement,
the Lessor, as stated herein agrees not to start the rent at 3169-B Red Hill Avenue, Costa Mesa, California until the Lessee, as stated herein is successful in subleasing the aforementioned Milliken Avenue premises in the City of Irvine under terms
and conditions satisfactory to the Lessee or November 1, 1986, whichever is sooner. Should the former occur, then the commencement date of said sublease shall be deemed to be that date on which rent actually commences on the Milliken Avenue
property. When that date occurs, then rent for the Red Hill Avenue property shall commence to accrue in accordance to the schedule as shown in Paragraph 47. 
 PARAGRAPH 49. PERCENTAGE OF PREMISES. The parties hereto acknowledge that throughout the term of this Lease that there will be certain charges prorated back to the Lessee by the 











 LEASE ADDENDUM NO. 1, PG. 2 
  

 Lessor. Charges will include such items as any increase in taxes, increase in fire insurance, common area charges for
landscaping, sweeping and other exterior maintenance costs. The parties acknowledge that the total approximate square footage of the entire premises is 65,000 square feet and that the Lessee, will occupy approximately 3600 square feet
which represents 5.6 percent of the entire premises. Therefore, the percentage of the various charges which may accumulate against the entire premises to be charged to the Lessee is hereby agreed to be a maximum of 5.6 percent of such total charge.
Lessor hereby agrees to provide sufficient data to verify that any and all charges are necessary and warranted. 
 PARAGRAPH 50. COMMON AREA
CHARGES. Lessee understands that the Lessor has contracted for landscaping and sweeping charges for the premises. Lessee further acknowledges that the Lessee is to pay a prorata share of these costs throughout the term of this Lease. Although Lessor
agrees to use its best efforts to keep these costs at a minimum, it is understood and agreed that Lessor has no control over possible escalation of these costs. The current monthly costs for landscaping and sweeping is hereby agreed to be $
15.00 per month. This amount is to be paid in addition to the rent as shown in Paragraph 47. For the purposes of this agreement, all the common area charges are to be considered as additional rent. 
 PARAGRAPH 51. WATER CHARGES. The water charges for the premises are prorated. Lessor and Lessee acknowledge that the true consumption of water, by the
Lessee, will not be known until the Lessee fully occupies the premises for a period of time. However, Lessor acknowledges that for the six (6) month period of time immediately proceeding the commencement date of this Lease that the water
charges for the entire premises have been approximately $ 233.00 per month. During that interim, the 










 LEASE ADDENDUM NO. 1, PG. 3 
  

 
balance of the building has been fully occupied by other tenants. Also during this interim, the subject premises has seen limited usage by the current
Lessee. Thus, it is hereby agreed that the estimated monthly water charges for the premises will be $40.00 per month, commencing January 1, 1986. At the end of every six (6) month interval, from the commencement term of this Lease,
Lessor agrees to audit the water charges for the entire premises and to make appropriate adjustments for water charges. These adjustments may be in the form of additional charges or refunds as the case may be. Copies of all such calculations will be
made available to the Lessee. 
 PARAGRAPH 52. PARKING. It is understood and agreed that the Lessor will provide a minimum of 11 parking
spaces for use by the Lessee. Further, Lessor and Lessee acknowledge that these parking spaces are currently unassigned. However, Lessor does reserve the right to assign specific parking spaces for use by the Lessee and/or his customers. In the
event that Lessor elects to do so, Lessor agrees to provide these spaces in as convenient a manner for use by the Lessee as is practical and reasonable. 
 PARAGRAPH 53. OUTSIDE STORAGE. Lessee hereby grants permission to Lessor to tow away and store, at Lessee’s expense, all automobiles or motor vehicles belonging to Lessee or its employees or customers, which
remain in the common parking area 










 LEASE ADDENDUM NO. 1, PG. 4 
  

 
for more than 48 consecutive hours. No automobiles or motor vehicles shall be parked and left unattended in any part of the common area or service yard not
striped or designated for parking. Lessee shall not store in the parking, service or common area any materials, supplies, equipment or machinery outside the premises, whether in the open or in tanks, bins or other container devices, and shall not
otherwise obstruct parking, service or common areas. 
 This document is dated October 28, 1985. 
  

					
	 APPROVED BY: LESSOR
	 		 	 APPROVED BY: LESSEE

			
	 /s/ Clarence J. Turner
	 		 	 /s/ Kenneth R. Morris

	 TRICO RENTS, a Partnership
	 		 	 CERADYNE, INC., a Calif., Corporation












 ADDENDUM NO. 2, PG. 1 
  

 This Lease addendum refers to that certain Lease dated October 28, 1985 by and between TRICO RENTS, a
Partnership, as Lessor and CERADYNE, INC., a California Corporation, as Lessee, for the premises known as and numbered 3169-B Red Hill Avenue, Costa Mesa, California. The following paragraph is hereby incorporated into the referenced Lease and made
a part thereof. 54 OPTION TO RENEW. Lessor hereby grants to the Lessee an Option to Renew this Lease for an additional five (5) years on the following terms and conditions: 
  

	 	A.	The terms and conditions of the renewal period shall be the same as the terms and conditions of this Lease except that the monthly rent shall be adjusted to what is then the Fair
Market Rental. The Fair Market Rental shall include provisions to reflect rental increases after the commencement of the option period. 

  

	 	B.	The Option to Renew period shall commence, if exercised, on November 1, 1990 and shall terminate on October 31, 1995. 

  

	 	C.	Lessee must notify Lessor, in writing, on or before February 1, 1990 of Lessee’s intent to exercise its Option to Renew. 

  

	 	D.	Lessee must not be in default under any of the terms or conditions of this Lease at the time that Lessee elects to exercise said Option to Renew. 

  

	 	E.	Special provision regarding Fair Market Rental: In the event that Lessee elects to exercise the Option to Renew and in the further event the parties fail to agree on a Fair Market
Rental, then the following procedure shall be utilized in fixing the Fair Market Rental. Within ten (10) days from receipt of notice by the Lessor from the Lessee that it is the Lessee’s 











 ADDENDUM NO. 2, PG. 2 
  


	 	 
intent to renew said Lease, Lessor and Lessee or their respective agents shall meet with the intent of establishing the Fair Market Rental for the ensuing
five (5) year period of time. If within thirty (30) days of the initial Notice to Renew period the parties are unable to agree on a Fair Market Rental for the ensuing five (5) year period of time, then the Lessor and Lessee agree to have
the rental fixed for the subject period of time in the following manner: 


  

	 	1.	An independent, qualified real estate appraiser or real estate appraising company shall be employed to establish the then prevailing Fair Market Rental for the premises. The
qualification for the appraiser shall include, but shall not be limited to, membership in good standing in the American Institute of Real Estate Appraisers and the individual involved shall have been awarded the MAI designation. Further, said
appraiser of appraisal company shall have a high reputation in the industry. Said appraiser shall be selected by mutual consent of the parties hereto. In the event that the parties hereto fail to agree on the selection of the first appraiser, then
each of the parties hereto may select, independently, an appraiser to establish the Fair Market Rental in question. The selected appraisers shall then be empowered to choose a third appraiser, thus providing a total of three (3) qualified MAI
type appraisers to fix the subject rent. The three (3) appraisers will then be authorized to proceed as is shown in Paragraph 2 which follows.  

  

	 	2.	 Assuming the parties agree on the first appraiser, then upon receipt of the appraisal from the first selected appraiser the parties shall review said 













 ADDENDUM NO. 2, PG. 3 
  


	 	 
If the parties agree to accept the recommended rental suggested by the appraiser, then this rent shall become the fixed rent, plus rent adjustments, if any,
for the ensuing five (5) year period of time in question. Should the parties fail to accept or agree upon the recommended rental by the appraiser, then the parties agree to immediately employ the two (2) additional appraisers whose
qualifications shall be equivalent to those of the first appraiser, and request that these additional appraisers establish the Fair Market Rental for the property. Upon receipt of the additional recommended Fair Market Rental appraisals, the parties
shall take the results of the three (3) appraisals, add the recommended Fair Market Rental suggested by all three (3) appraisers, average the rent of the three (3) appraisals and the result shall become the fixed rent for the five
(5) year period in question, with any appropriate adjustments. 


  

	 	3.	It is further agreed that the cost of employing any and all appraisers shall be borne fully by the Lessor and Lessee. Each party further agrees to promptly pay said appraisers’
fees and agrees to enter into a contract for their services. 

  

	 	4.	 If for any reason the fixed rental has not been established by the expiration of this Lease, then this 













 ADDENDUM NO. 2, PG. 4 
  


	 	Lease shall become null, void and of no further force and effect unless the parties hereto agree to some form of temporary extension. 

 This document is dated October 28, 1985. 
  

					
	 APPROVED BY: LESSOR
	 		 	APPROVED BY: LESSEE
			
	 /s/ Clarence J. Turner 
	 		 	 /s/ Kenneth R. Morris 

	 TRICO RENTS, a Partnership
	 		 	 CERADYNE, INC., a Calif. Corporation