Exhibit 10.1
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT (this "Third Amendment") is
dated as of the 3rd day of October, 2006 and is by and between M-TRON
INDUSTRIES, INC., A Delaware corporation ("M-TRON") and PIEZO TECHNOLOGY, INC.,
A Florida corporation ("Piezo" and M-TRON and Piezo are collectively referred to
as the "Borrowers") and FIRST NATIONAL BANK OF OMAHA, a national banking
association established at Omaha, Nebraska (the "Bank"). The Third Amendment
amends certain provisions of a loan agreement between the Borrowers and the Bank
dated October 14, 2004, including amendments thereto on May 31, 2005 and on June
30, 2006 (the "Loan Agreement") as set forth in this Third Amendment. All
capitalized terms contained in this Third Amendment not otherwise defined herein
shall have the meaning defined in the Loan Agreement.
WITNESSETH:
WHEREAS, the Borrowers have requested that the Loan Agreement be
amended to allow LGL Group, Inc. an Indiana corporation ("LGL"), the guarantor
under the Loan Agreement ("Guarantor") and an Affiliate of the Borrowers, to
invest or loan up to $3,000,000 to M-TRON for the purpose of allowing M-TRON to
make equity investments in entities which are subject to the reporting
requirements of the Securities Exchange Act of 1934 (the "34 Act"); and
WHEREAS, the Bank agrees to amend the Loan Agreement to allow LGL to
invest in or loan to M-TRON an aggregate amount up to $3,000,000 on the terms
and conditions set forth in this Third Amendment.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the receipt and adequacy of which is hereby acknowledged by M-TRON,
Piezo and the Bank, the Loan Agreement is hereby amended as follows:
1. Section 2.15 of the Loan Agreement is hereby amended by adding
the following sentence to the end of the existing section:
"The Borrowers further agree that the proceeds of the Loans
shall not be used to purchase any stock or equity in any form
of, invest in or loan any funds to any entity."
2. Section 7.08 of the Loan Agreement is hereby amended by adding
the following sentence to the end of the existing section:
"Notwithstanding the foregoing, so long as the proceeds of the
Loans are not used for the same, and so long as none of the
equity investments are made from any margin account of either
Borrower or LGL, the Borrowers shall be allowed to use the
proceeds of any loan or equity investment from LGL, after the
date of this Third Amendment to purchase an equity investment
in any entity which is subject to the reporting requirements
of the 34 Act."
3. Section 7.10 of the Loan Agreement is hereby amended by adding
the following sentence to the end of the existing section:
"Notwithstanding the foregoing, the Borrowers shall be allowed
to enter into such agreements or arrangements with LGL, after
the date of this Third Amendment, and in compliance with all
other terms of this Agreement, to allow the LGL to loan to or
purchase the equity of M-TRON in an aggregate amount not
exceeding $3,000,000."
4. Article VII of the Loan Agreement is hereby amended by adding
a new section 7.14 as follows:
"SECTION 7.14. PAYMENT OF LGL INDEBTEDNESS. In the event that
LGL and M-TRON agree that any portion of the amount authorized
to be invested or loaned to M-TRON by LGL under Section 7.10
of this Agreement is in the form of any type of indebtedness,
the Borrowers agree that (i) such loan shall only be made in
full compliance with the terms of this Agreement, (ii) the
payment of any interest due on such loan shall only be made in
compliance with the terms of this Agreement and (iii) the
repayment of any principal of such loan or indebtedness shall
only be paid exclusively from the dividends or distributions
received from the entities in which the proceeds of such loan
or indebtedness from LGL were invested or from the liquidation
of such investment in such entities".
5. All other provisions of the Loan Agreement not specifically
amended by this Third Amendment shall remain in full force and
effect.
6. Borrowers certify by their execution hereof that all of the
representations and warranties set forth in the Loan Agreement
and all amendments thereto are true and correct as of the date
of this Third Amendment, and that no Event of Default under
the Loan Agreement, and no event which, with the giving of
notice or passage of time or both, would become such and Event
of Default, has occurred as of the execution of this Third
Amendment, except as disclosed to the Bank in writing. All
other terms and conditions of the Loan Agreement not affected
or amended by this Third Amendment are hereby ratified and
confirmed.
7. Guarantor, by its execution of this Third Amendment,
acknowledges and consents to this Third Amendment and agrees
and confirms that its separate guarantee of the Borrowers
obligations to the Bank are, and continue to be, valid and
binding obligations of the Guarantor.
8. Borrowers acknowledge and agree that, except as amended by
this Third Amendment, the Loan Agreement continues to be the
valid and binding obligation of each Borrower.
IN WITNESS WHEREOF, the parties hereto and caused this Third Amendment
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
(Signatures appear on the following page)
M-TRON INDUSTRIES, INC., a Delaware
corporation
By /s/
--------------------------------
Name:
Title:
PIEZO TECHNOLGY, INC., a Florida
corporation
By /s/
--------------------------------
Name:
Title:
FIRST NATIONAL BANK OF OMAHA
By /s/
--------------------------------
Name:
Title:
Acknowledgement by Guarantor:
THE LGL GROUP, INC., formerly known
as XXXXX CORPORATION
By /s/
--------------------------------
Name:
Title:
