Document:

Amend. No. 1 dtd 12/22/04 to the Credit Agreement dtd 8/18/04

 EXHIBIT 10.25 
  
 AMENDMENT NO. 1 TO THE 
 CREDIT AGREEMENT 
  
 Dated
as of December 22, 2004 
  
 AMENDMENT NO. 1 TO THE CREDIT
AGREEMENT (this “Amendment”) among Ceradyne, Inc., a Delaware corporation (“Ceradyne”), Ceradyne ESK, LLC, a Delaware limited liability company (“ESK
LLC”), ESK Ceramics GmbH & Co. KG (“ESK KG”; and collectively with Ceradyne and ESK LLC, the “Borrowers”), the banks, financial institutions and other lenders party hereto
(collectively, the “Lenders”) and Wachovia Bank, National Association, as collateral agent and administrative agent (in such capacity, the “Administrative Agent”)
for the Lenders. 
  
 PRELIMINARY STATEMENTS:

  
 (1) The Borrowers, the Guarantors (as defined therein), the
Administrative Agent and the Lenders have entered into a Credit Agreement dated as of August 18, 2004 (such Credit Agreement, as supplemented or otherwise modified through the date hereof, the “Credit
Agreement”). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement. 
  

(2) The Borrower, the Administrative Agent and the Lenders have agreed to amend the Credit Agreement in certain respects as set forth below.

  
 SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, hereby amended as follows: 
  
 (a) Section 1.01 is amended by inserting the following proviso immediately before the period at the end of the definition of
“EBITDA”: 
  
 “; provided,
that, except for purposes of determining Excess Cash Flow, EBITDA shall be adjusted on a pro forma basis, in a manner reasonably acceptable to the Administrative Agent, to include, as of the first day of any such period, the
Acquisition or any Permitted Acquisition closed during such period, including, without limitation, adjustments reflecting any non-recurring costs and any extraordinary expenses of the Acquisition or any Permitted Acquisition closed during such
period calculated on a basis consistent with GAAP and Regulation S-X of the Securities Exchange Act of 1934, as amended, or as approved by the Administrative Agent” 
  
 (b) Section 5.02(g) is amended by (i) deleting the word “and” at the end of clause (A) thereof, (ii) deleting the
punctuation mark “.” at the end of clause (B) thereof and inserting “; and” in replacement therefor and (iii) inserting the following new clause (C): 
  
 “(C) Ceradyne may declare and make dividend payments or other distributions to its stockholders payable
solely in the common stock or other common Equity Interests of Ceradyne.” 
  
 (c) Section 5.04 is amended by deleting the figure “$25,000,000” where it appears in subsection (c) thereof and inserting the figure “$32,000,000” in replacement therefor. 
  
  
 Amendment No. 1 to Ceradyne Credit Agreement 

 2 
  

 (d) Section 5.04 is further amended by deleting the final paragraph thereof in its entirety. 

 
 SECTION 2. Conditions of Effectiveness. This Amendment shall become
effective when, and only when, and as of the date (the “Amendment No. 1 Effective Date”) on which, (a) the Administrative Agent shall have received counterparts of this Amendment executed by the Borrowers, the
Guarantors and the Required Lenders, and dated the date of receipt thereof by the Administrative Agent (unless otherwise specified), and (b) the Administrative Agent shall have received payment of all accrued expenses of the Administrative Agent
(including the reasonable and accrued fees of counsel to the Administrative Agent invoiced on or prior to the date hereof). 
  
 SECTION 3. Reference to and Effect on the Loan Documents. (a) On and after the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the Notes and each of the other Loan Documents to “the Credit
Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment. 
  
 (b) The Credit Agreement, the Notes and each of the other Loan Documents, as
specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral
described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan Documents, in each case as amended by this Amendment. 
  
 (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. 
  
 SECTION 4. Consent. Each of Ceradyne, ESK LLC and ESK KG, as Guarantors under the Credit Agreement (the
“Guaranty”) in favor of the Administrative Agent and the Lenders party to the Credit Agreement, hereby consents to this Amendment and hereby confirms and agrees that (a) notwithstanding the effectiveness of such
Amendment, the Guaranty is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that, on and after the effectiveness of such Amendment, each reference in the Guaranty to the “Credit
Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a reference to the Credit Agreement, as amended by such Amendment, and (b) each of the Collateral Documents to which such Guarantor is a party
and all of the Collateral described therein do, and shall continue to, secure the payment of all of the obligations to be secured thereunder. 
  
 SECTION 5. Costs, Expenses. The Borrower agrees to pay on demand all reasonable costs and expenses of the Administrative Agent in connection with
the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for
the Administrative Agent) in accordance with the terms of Section 9.04 of the Credit Agreement. 
  
 SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this Amendment. 
  
  
 Amendment No. 1 to Ceradyne Credit Agreement 

 3 
  

 SECTION 7. Governing Law. This Amendment shall be governed by, and construed in accordance with,
the laws of the State of New York. 
  
 [REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK] 
  
  
 Amendment No. 1 to Ceradyne Credit Agreement 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective
officers thereunto duly authorized, as of the date first above written. 
  

			
	CERADYNE, INC.
		
	By	 	 /s/ Jerrold J. Pellizzon

	 	 	Name: Jerrold J. Pellizzon
	 	 	Title: CFO
	
	CERADYNE ESK, LLC
		
	By	 	 /s/ Jerrold J. Pellizzon

	 	 	Name: Jerrold J. Pellizzon
	 	 	Title: CFO
	
	ESK CERAMICS GMBH & CO. KG
		
	By:	 	 /s/ Jerrold J. Pellizzon

	 	 	Name: Jerrold J. Pellizzon
	 	 	Title: CFO

  
  
 Amendment No. 1 to Ceradyne Credit Agreement 

			
	 WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent and as a Lender

		
	By:	 	/s/ Richard L. Nelson
	 	 	 Name: Richard L. Nelson
 Title:   Vice
PresidentSalary & Bonus Agreement

 Exhibit 10.7 
  
 Named Executive Officer Salary and Bonus Arrangements for 2005 
  
 Base Salaries 
  
 The base salaries for 2005 for the executive officers (the “named executive officers”) of First PacTrust Bancorp, Inc. (the “Company”)
and Pacific Trust Bank who will be named in the compensation table that will appear in the Company’s upcoming 2005 annual meeting proxy statement are as follows: 
  

				
	 Name and Title

	  	Base Salary

	 Hans R. Ganz
 President and Chief Executive Officer
	  	$	225,493
	 James P. Sheehy
 Secretary and Treasurer
	  	$	121,763
	 Melanie M. Stewart
 Executive Vice President – Lending
	  	$	130,499
	 Regan J. Gallagher
 Senior Vice President – Controller
	  	$	89,918
	 Rachel M. Carrillo
 Senior Vice President – Branch Operations
	  	$	85,821

  
 Description of 2005 Bonus Incentive
Plan 
  
 On March 15, 2005, the Company’s Board of
Directors approved a cash incentive bonus plan for 2005 (the “2005 Bonus Plan”) for all officers and employees of the Company and the Bank. Bonuses will be paid under the 2005 Bonus Plan in early 2006 if and to the extent the
Company’s performance in 2005 meets or exceeds certain minimum levels on certain key performance indicators. 
  
 The key performance indicators used to determine whether any bonuses will be paid under the 2005 Bonus Plan will be the same for all employees. The
amounts of the bonuses under the 2005 Bonus Plan, if earned, will be determined, in part, by multiplying the employee’s salary by an the employee’s payout percentage up to a maximum of 45% of salary, plus a discretionary component which
may or may not be paid in whole or in part based on the Compensation Committee’s qualitative assessment of individual contributions toward the Company’s success relative to Customer Service, Deposit Growth, Compliance, Loan Originations
and Portfolio Growth, Loan Charge-Off and Delinquency Ratios. While the payout percentages will vary from employee to employee, they will increase proportionately for all employees if and to the extent the Company attains a net income level above
the minimum threshold. All named executive officers are eligible under the plan. 
  
 Discretionary Bonus 2005: The total discretionary amount available for distribution to all employees will not to exceed 4% of after-tax net income. 

 Director Fee Arrangements for 2005 
  
 Each director of First PacTrust Bancorp, Inc., (the “Company”) also is a director of Pacific Trust Bank (the
“Bank”). As of the March 11, 2005 shareholder record date for the 2005 annual meeting, as for 2004, each non-employee director receives a fee of $600 for each Bank board meeting attended. In addition, the Chairman of the Board receives an
additional $300 per Bank board meeting attended and each director receives $200 per Bank committee meeting attended. Attendance by telephone is compensated at one-third the rate for directors attending in person. Directors are not paid a fee for
service on the Company’s board. There are no deferred compensation arrangements with any non-employee director.

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