Third Amendment to Loan Agreement among M-Tron Industries, Piezo Technology, and First National Bank of Omaha

 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 LYNCH CORPORATION By /s/ -------------------------------- Name: Title: