STANDARD LEASE EXTENSION FORM

Exhibit 10.40

Date: February 4, 2005 Extension: 4

STANDARD

LEASE EXTENSION FORM

LEASE to be EXTENDED is that certain Xxxxx described as follows:

Lessor:		TRICO RENTS, A CALIFORNIA GENERAL PARTNERSHIP
Lessee:		CERADYNE, INC., A DELAWARE CORPORATION
Property Leased:		000 Xxxxxxxxx Xxxxxx - Xxxxx Xxxx, XX 00000
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
000 Xxxxxxxxx Xxxxxx - Xxxxx Xxxx, XX		02/04/05		06/01/05		10/31/10
000 Xxxxxxxxx Xxxxxx - Xxxxx Xxxx, XX		01/05/05		01/15/05		10/31/10
000 Xxxxxxxxx Xxxxxx - Xxxxx Xxxx, XX		03/23/86		05/01/84		10/31/10
0000-X Xxxxxxxxx Xxxxxx - Xxxxx Xxxx, XX		03/11/97		04/01/97		10/31/10
0000-X Xxxxxxx Xxxxxx - Xxxxx Xxxx, XX		02/04/05		06/01/05		10/31/10
0000 Xxxxxxx Xxxxxx - Xxxxx Xxxx, XX		01/24/04		04/01/04		10/31/10
0000 Xxxxxxx Xxxxxx - Xxxxx Xxxx, XX		03/31/86		04/01/86		10/31/10
0000 Xxxxxxx Xxxxxx - Xxxxx Xxxx, XX		08/06/01		08/15/01		10/31/10
0000-X Xxxxxxx Xxxxxx - Xxxxx Xxxx, XX		10/28/85		11/01/85		10/31/10
0000-X Xxxxxxx Xxxxxx - Xxxxx Xxxx, XX		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 Xxxxxx 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: XXXXXX						APPROVED BY: XXXXXX
TRICO RENTS, A CALIFORNIA GENERAL PARTNERSHIP						CERADYNE, INC., A DELAWARE CORPORATION
By: Trico Realty Inc., Its Manager
/s/ Xxxxxxxx X. Xxxxxx						/s/ Xxxxxxx X. Xxxxxxxx
5-31-05						5/31/05
Date:						Date
						AFTER HOURS EMERGENCY CONTACT:
						Name:
						Phone: