LOAN AGREEMENT

[Non Borrowing Base]

THIS LOAN AGREEMENT (this “Agreement”), dated as of this 12th day of May, 2020,
by and between M-TRON INDUSTRIES, INC., a Delaware corporation, and PIEZO
TECHNOLOGY, INC., a Florida corporation, whose address is 2525 Shader Road,
Orlando, Florida 32804 (jointly and severally, individually and/or collectively,
the “Borrower”), and SYNOVUS BANK, its successors and/or assigns (the “Lender”),
whose address is 1148 Broadway, Columbus, Georgia 31901.

RECITALS

A.Borrower has requested and Lender has agreed to make a revolving credit
facility to Borrower in the maximum principal amount of THREE MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000.00) (the “Loan”) to be used by
Borrower as working capital and general operations, subject to the terms and
conditions contained in this Agreement.

B.Borrower and Lender have negotiated the terms and conditions of, and wish to
enter into, this Agreement in order to set forth the terms and conditions of the
Loan.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, Borrower and Lender agree as follows:

1.DEFINITIONS.  As used in this Agreement the terms listed below shall have the
following meanings unless otherwise required by the context:

(a)Capital Expenditures: Means all expenditures which would be required to be
capitalized and shown on the balance sheet of the Borrower, including
expenditures in respect to Capital Leases, but excluding expenditures made in
connection with the replacement, substitution or restoration of assets to the
extent financed (a) from insurance proceeds (or other similar recoveries) paid
on account of the loss of or damage to the assets being replaced or restored or
(b) with awards of compensation arising from the taking of eminent domain or
condemnation of the assets being replaced.

(b)Capital Lease: Means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real and personal property by such
Person that is accounted for as a capital lease on the balance sheet of such
Person.

(c)Code:  Means the Uniform Commercial Code (or any successor statute), as
adopted and in force in Florida or, when the laws of any other state govern the
method or manner of the perfection or enforcement of any security interest in
any of the Collateral, the Uniform Commercial Code (or any successor statute) of
such state.  Any term used in this Agreement and in any financing statement
filed in connection herewith which is defined in the Code and not otherwise
defined in this Agreement or in any other Loan Document has the meaning given to
the term in the Code.

(d)Collateral:  Shall have the meaning set forth in the Security Agreement.

(e)Commitment: That certain Term Sheet dated as of April 20, 2020 by and between
Lender and Borrower.

(f)Debt Service: All principal and interest due and payable under the Note.

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(g)Debt Service Coverage Ratio: Shall be calculated as follows:  EBITDA on a
rolling twelve (12) month basis divided by all principal and interest payments
for like periods.

(h)EBITDA: As applies to any Person, the sum of earnings before interest, taxes,
depreciation and amortization.

(i)Financing Statements: The financing statements from Borrower to Lender to
perfect Lender’s security interest in the personal property described in the
Security Agreement.

(j)GAAP: Generally accepted accounting principles consistently applied, as
adopted in the United States, and as amended from time to time.

(k)Governmental Authority: Any governmental or quasi-governmental authority,
agency, authority, board, commission, or governing body authorized by federal,
state or local laws or regulations as having jurisdiction over the Lender and
the Borrower.

(l)Loan: That certain revolving credit facility in the amount of THREE MILLION
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000.00), as evidenced by the
Note and secured by the Security Agreement and other Loan Documents as provided
herein.

(m)Loan Documents:  Any and all documents evidencing, securing, or executed in
connection with the Loan, including, without limitation, the Note, the Security
Agreement, and this Agreement.

(n)Note: That certain Revolving Promissory Note dated as of even date herewith
from Borrower in favor of Lender in the principal amount of $3,500,000.00, as
the same may be amended, restated, modified or replaced from time to time.

(o)Person: A natural person, a partnership, a joint venture, an unincorporated
association, a limited liability company, a corporation, a trust, any other
legal entity, or any Governmental Authority.

(p)Security Agreement: That certain Security Agreement dated as of even date
herewith from Borrower in favor of Lender, as the same may be amended, restated,
modified or replaced from time to time.

(q)Total Liabilities: Means the Borrower’s total stated liabilities, less
subordinated debt.

 

2.LOAN. From the date hereof until and including May 12, 2022, Borrower may
borrow, repay and reborrow, and Lender may advance and readvance under the Note
from time to time, so long as the total principal balance outstanding at any one
time does not exceed the principal amount stated on the face of the Note.
Lender’s obligation to make advances under the Note shall terminate upon the
earlier to occur of: (i) an Event of Default under this Agreement or any other
Loan Document, or (ii) May 12, 2022.  Lender shall be under no obligation
whatsoever to make any advances to Borrower after May 12, 2022.

 

3.EXPENSES:  Borrower shall pay all fees and charges incurred in the procuring
and making of the Loan and all other expenses incurred by Lender during the term
of the Loan, including without limitation Documentary Stamp Taxes, if
applicable, Intangible Taxes, if applicable, recording expenses, and the fees of
the attorneys for Lender. The Borrower shall also pay any and all insurance
premiums, taxes, assessments, and other charges, liens and encumbrances upon the
Collateral.  Such

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amounts, unless sooner paid, shall be paid from time to time as Lender shall
request either to the Person to whom such payments are due or to Lender if
Lender has paid the same.

 

4.WARRANTIES AND REPRESENTATIONS. Borrower represent and warrant (which
representations and warranties shall be deemed continuing) as follows:

 

(a)Organization Status.  M-TRON INDUSTRIES, INC. (i) is duly organized under the
laws of the State of Delaware, (ii) is in good standing under the laws of the
State of Florida, (iii) is qualified to do business in the State of Florida, and
(iv) has shares of stock which have been duly and validly issued.  PIEZO
TECHNOLOGY, INC. (i) is duly organized under the laws of the State of Florida,
(ii) is in good standing under the laws of the State of Florida, (iii) is
qualified to do business in the State of Florida, and (iv) has shares of stock
which have been duly and validly issued.

 

(b)Compliance with Laws.  Borrower is in compliance with all laws, regulations,
ordinances and orders of all Governmental Authorities.

 

(c)Accurate Information.  All information now and hereafter furnished to Lender
is and will be true, correct and complete in all material respects. Any such
information relating to Borrower’s or any Guarantor’s financial condition has
and will accurately reflect such financial condition as of the date(s) thereof,
(including all contingent liabilities of every type), and Borrower and each
Guarantor further represent that its financial condition has not changed
materially or adversely since the date(s) of such documents.

 

(d)Authority to Enter into Loan Documents.  The Borrower has full power and
authority to enter into the Loan Documents and consummate the transactions
contemplated hereby, and the facts and matters expressed or implied in the
opinions of its legal counsel are true and correct.

 

(e)Validity of Loan Documents.  The Loan Documents have been approved by those
Persons having proper authority, and are in all respects legal, valid and
binding according to their terms.

 

(f)Priority of Lien on Personalty.  No chattel mortgage, bill of sale, security
agreement, financing statement or other title retention agreement (except those
executed in favor of Lender) has been or will be executed with respect to any of
the Collateral or otherwise approved by Lender in accordance with the Security
Agreement.

 

(g)Conflicting Transactions of Borrower.  The consummation of the transaction
hereby contemplated and the performance of the obligations of Borrower under and
by virtue of the Loan Documents will not result in any breach of, or constitute
a default under, any lease, loan or credit agreement, or other instrument to
which Borrower is a party or by which they may be bound or affected.

 

(h)Pending Litigation.  There are no actions, suits or proceedings pending
against Borrower, or the Collateral, or circumstances which could lead to such
action, suits or proceedings against or affecting Borrower, the Collateral, or
involving the validity or enforceability of any of the Loan Documents, before or
by any Governmental Authority, except actions, suits and proceedings which have
been specifically disclosed to and approved by Lender in writing; and Borrower
is not in default with respect to any order, writ, injunction, decree or demand
of any court or any Governmental Authority.

 

(i)Condition of Collateral. The Collateral is not now damaged or injured as a
result of any fire, explosion, accident, flood or other casualty.

 

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(j)Discharge of Liens and Taxes.  Borrower has duly filed, paid and/or
discharged all taxes or other claims that may become a lien on any of its
property or assets, except to the extent that such items are being appropriately
contested in good faith and an adequate reserve for the payment thereof is being
maintained.

 

(k)Sufficiency of Capital.  Borrower, and after consummation of this Agreement
and after giving effect to all indebtedness incurred and liens created by
Borrower in connection with the Note and any other Loan Documents, will not be,
insolvent within the meaning of 11 U.S.C. § 101, as in effect from time to time.

 

(l)ERISA.  Each employee pension benefit plan, as defined in Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), maintained by Borrower and/or
any Guarantor meets, as of the date hereof, the minimum funding standards of
ERISA and all applicable regulations thereto and requirements thereof, and of
the Internal Revenue Code of 1986, as amended. No “Prohibited Transaction” or
“Reportable Event” (as both terms are defined by ERISA) has occurred with
respect to any such plan.

 

(m)Indemnity.  Borrower will indemnify Lender and its affiliates from and
against any losses, liabilities, claims, damages, penalties or fines imposed
upon, asserted or assessed against or incurred by Lender arising out of the
inaccuracy or breach of any of the representations contained in this Agreement
or any other Loan Documents.

 

(n)No Default.  Borrower is not in default in any material respect under any
agreement or instrument to which it is a party or by which it may be bound which
would individually or in the aggregate have a material adverse effect on the
financial condition or business of Borrower.

 

(o)Brokerage. Any brokerage commission due in connection with the transaction
contemplated hereby has been paid in full and any such commission coming due in
the future will be paid promptly by Borrower. Borrower agrees to and shall
indemnify Lender from any liability, claim or loss arising by reason of any such
brokerage commission. This provision shall survive the repayment of the Loan and
shall continue in full force and effect so long as the possibility of such
liability, claim or loss exists.

 

(p)Warranty of Title. The Project conforms to all applicable zoning and other
governmental regulations and to all covenants, conditions and restrictions
contained in any deed or affecting the Project.

 

(q)Ownership of Properties/Liens. Borrower owns good and, in the case of real
property, marketable title to all of its properties, real and personal, tangible
and intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all liens, charges and
claims (including infringement claims with respect to patents, trademarks,
service marks, copyrights and the like).

 

5.COVENANTS.  Borrower covenants and agrees with Lender as follows:

 

(a)Taxes.  Borrower certifies that it has filed or caused to be filed all
federal, state and other tax returns which are required to be filed, and have
paid or caused to be paid all taxes as shown on said returns or in any manner
due to be paid (including, but not limited to, ad valorem and personal property
taxes) or on any assessment received by Borrower and not being contested in good
faith, to the extent that such taxes have become due.  Borrower further
certifies that it has paid all other taxes, levies and charges of any nature,
including any governmental charges.

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(b)Notice of Litigation.  Borrower shall promptly give Lender written notice of
(a) a judgment entered against Borrower, or (b) the commencement of any action,
suit, claim, counterclaim or proceeding against or investigation of Borrower
which, if adversely determined, would materially adversely affect the business
of Borrower, or which questions the validity of this Agreement, the Note or the
Security Agreement, or any other actions or agreements taken or to be made
pursuant to any of the foregoing.

 

(c)Notice of Default.  Borrower shall promptly give Lender written notice of any
act of default under any agreement with Lender or under any other contract to
which Borrower is a party and of any acceleration of indebtedness caused thereby
which would have a materially adverse affect to the business of Borrower.

 

(d)Reports.  Borrower shall promptly furnish Lender with copies of all
governmental agency, and other special reports pertaining to or affecting
Borrower, which would materially adversely affect the business of Borrower.

 

(e)Change in Ownership, Control or Management of Borrower.  Borrower shall not
change its ownership, control or management structure during the term of the
Loan and not more than fifty percent (50%) of the now current issued and
outstanding membership interest/stock of the Borrower may be sold, conveyed,
pledged, transferred or assigned without the prior written consent of Lender.

 

(f)Change in Fiscal Year. Borrower shall not change its fiscal year without the
prior written consent of Lender. Borrower’s fiscal year ends on December 31.

 

(g)No Sale of Assets.  Borrower shall not, during the term of the Loan, transfer
any material portion of their respective assets unless such transfer is in the
ordinary course of Borrower’s business, for fair market value and such fair
market value is given to Borrower, in its sole name, and such transfer will not
have a material adverse effect on the financial condition of Borrower and/or its
ability to perform the obligations hereunder, as determined by Lender in its
sole and absolute discretion.

(h)Title to Collateral.  Borrower will deliver to Lender, on demand, any
contracts, bills of sale, statements, receipted vouchers or agreements under
which Borrower claims title to any of the Collateral.

(i)Payment of Debts.  Borrower shall pay and discharge when due, and before
subject to penalty or further charge, and otherwise satisfy before maturity or
delinquency, all obligations, debts, taxes, and liabilities of whatever nature
or amount, except those which Borrower in good faith disputes or with respect to
which Borrowers have obtained a valid extension of time within which to pay any
such debts, taxes and liabilities.

(j)Collection of Insurance Proceeds.  Borrower will cooperate with Lender in
obtaining for Lender the benefits of any insurance or other proceeds lawfully or
equitably payable to it in connection with the transaction contemplated hereby
and the collection of any indebtedness or obligation of Borrower to Lender
incurred hereunder.

(k)Indebtedness.  Borrower shall not incur, create, assume or permit to exist
any indebtedness or liability on account of advances or deposits, any
indebtedness or liability for borrowed money, any indebtedness constituting the
deferred purchase price of any property or assets, any indebtedness owed under
any conditional sale or title retention agreement, contingent obligations
pursuant to guaranties, endorsements, letters of credit and other secondary
liabilities, or any other

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indebtedness or liability evidenced by notes, bonds, debentures or similar
obligations without the prior written approval of Lender, except for (i) the
Loan, (ii) the endorsement of checks for collection in the ordinary course of
business and (iii) debt payable to suppliers and other trade creditors in the
ordinary course of business on ordinary and customary trade terms and which is
not past due.  Notwithstanding the foregoing, and specifically limited to the
initial outbreak of the Covid-19 pandemic in North America, funds received by
the Borrower pursuant to the Paycheck Protection Plan of the CARES Act or
existing or new intercompany debt facilities will not be subject to the
prohibitions set forth in this subparagraph.

(l)Guaranties.  Except as may be in existence prior to the date hereof, as
previously disclosed to the Lender, Borrower shall not guarantee or otherwise in
any way become or be responsible for obligations of any other Person, whether by
agreement to purchase the indebtedness of any other Person, or agreement for the
furnishing of funds to any other Person through the purchase of goods, supplies
or services (or by way of stock purchase, capital contribution, advance or loan)
for the purpose of paying or discharging indebtedness of any other Person, or
otherwise.

(m)Advances. Borrower shall not make any advances, dividends, loans, or
distributions to any of its subsidiaries, affiliates, shareholders, members,
officers or directors, without the prior written consent of Lender.

(n)Further Assurances and Preservation of Security.  Borrower will do all acts
and execute all documents for the better and more effective carrying out of the
intent and purposes of this Agreement, as Lender shall reasonably require from
time to time, and will do such other acts necessary or desirable to preserve and
protect the collateral at any time securing or intending to secure the Note, as
Lender may require.

(o)No Assignment.  Borrower shall not assign this Agreement or any interest
therein and any such assignment is void and of no effect.  Lender may assign
this Agreement and any other Agreements contemplated hereby, and all of its
rights hereunder and thereunder, and all provisions of this Agreement shall
continue to apply to the Loan.  Lender agrees to notify Borrower of any such
assignment.  Lender also shall have the right to participate the Loan with any
other lending institution.

(p)Access to Books and Records.  Borrower shall allow Lender, or its agents,
after reasonable prior notice and during reasonable normal business hours, to
access Borrower’s books, records and such other documents, and allow Lender, at
Borrower’s expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof. Lender shall be entitled to a field exam,
audit and inventory appraisal on an annual basis at Borrower’s expense
throughout the term of the Loan.

(q)Business Continuity.  Borrower shall conduct its business in substantially
the same manner and locations as such business is now and has previously been
conducted during the term of the Loan.

(r)Insurance.  

(A)Borrower shall obtain, maintain and keep in full force and effect during the
term of the Loan adequate insurance coverage, with all premiums paid thereon and
without notice or demand, with respect to its properties and business against
loss or damage of the kinds and in the amounts customarily insured against by
companies of established reputation engaged in the same or similar businesses
including, without limitation:

(i)Public liability insurance insuring against all claims for personal or bodily
injury, death, or property damage in an amount of not less than One Million
Dollars

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($1,000,000.00) single limit coverage, and Two Million Dollars ($2,000,000.00)
in the aggregate. Such policy shall include an additional insured endorsement
naming the Lender as loss payee;

 

(ii)Insurance in such amounts and against such other casualties and
contingencies as may from time to time be required by Lender;

 

(iii)Workers compensation insurance coverage which evidences Borrower’s
compliance with all of the requirements of applicable law with respect to
workers compensation insurance; and

(iv)Excess liability insurance in an amount not less than One Million Dollars
($1,000,000.00).

(B)All policies of insurance required hereunder shall:  (i) be written by
carriers which are licensed or authorized to transact business in the State of
Florida, and are rated “A” or higher, Class XII or higher, according to the
latest published Best’s Key Rating Guide and which shall be otherwise acceptable
to Lender in all other respects, (ii) provide that the Lender shall receive
thirty (30) days’ prior written notice from the insurer before a cancellation,
modification, material change or non-renewal of the policy becomes effective,
and (iii) be otherwise satisfactory to Lender.

 

(C)Borrower shall not, without the prior written consent of Lender, take out
separate insurance concurrent in form or contributing with regard to any
insurance coverage required by Lender.

 

(D)At all times during the term of the Loan, Borrower shall have delivered to
Lender the original (or a certified copy) of all policies of insurance required
hereby, together with receipts or other evidence that the premiums therefor have
been paid.

 

(E)Not less than thirty (30) days prior to the expiration date of any insurance
policy, Borrower shall deliver to Lender the original (or certified copy), or
the original certificate, as applicable, of each renewal policy, together with
receipts or other evidence that the premiums therefor have been paid.

 

(F)The delivery of any insurance policy and any renewals thereof, shall
constitute an assignment thereof to Lender, and Borrower hereby grants to Lender
a security interest in all such policies, in all proceeds thereof and in all
unearned premiums therefor.

 

(s)Subordination of Debt.  Borrower will fully subordinate all of the Borrower’s
debts owed to third parties, including, without limitation, officers, employees,
stockholders, and affiliates, upon terms and conditions acceptable to Lender.
Notwithstanding the foregoing, so long as the Borrower is in compliance with the
financial covenants contained herein and there is no Event of Default, and no
condition exists, which but for the giving of notice or the passage of time
would constitute and Event of Default, the Borrower shall be permitted to make
regular scheduled payments of principal and interest on such subordinated
debt.  Notwithstanding the foregoing, the Borrower shall be permitted to (i)
payback proceeds received from the Payroll Protection Program (otherwise know as
the PPP), including but not limited to return of the proceeds, or otherwise
settlement of such loan, in whole or in part, at the borrowers discretion, and
(ii) make settlements of existing or future inter-company debt at the discretion
in its discretion.

(t)Indemnification. Borrower hereby indemnifies and holds Lender, its directors,
officers, agents, employees and attorneys harmless from and against any
liability, loss, expenses, damage

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of any nature, and claims, including, without limitation, brokers’ claims,
arising in connection with the Loan.

(u)Estoppel Certificate. At any time during the term of the Loan, within ten
(10) Business Days after written demand of such Borrower by the Lender therefor,
the Borrower shall deliver to the Lender a certificate, duly executed and in
form satisfactory to the Lender, stating and acknowledging, to the best of such
Borrower’s knowledge, the then unpaid principal balance of, and interest due and
unpaid, under the Loan, the fact that there are no defenses, off sets,
counterclaims or recoupments thereto (or, if such should not be the fact, then
the facts and circumstances relating to such defenses, off sets, counterclaims
or recoupments.

(v)Commitment Fee.  Upon the execution of this Agreement, Borrower shall pay to
Lender a commitment fee in the amount of $17,500.00 in connection with the Loan.

6.FINANCIAL AND REPORTING REQUIREMENTS.

(a)Debt Service Coverage Ratio.  At all times during the term of the Loan,
Borrower, on a consolidated and consolidating basis, shall maintain a minimum
Debt Service Coverage Ratio of not less than 1.50 to 1.00, to be tested
quarterly on a rolling twelve (12) month basis within forty-five (45) days of
each quarter-end and annually based within ninety (90) days of fiscal year
end.  The Lender will rely on audited financial statements for The LGL Group,
Inc. and provide eliminations to demonstrate Borrower’s operating performance
and covenant testing on an annual basis.  Quarterly covenant testing will be
based on internally prepared financial statements for Borrower showing
eliminations between Borrower entities.  For purposes hereof, “Debt Service
Coverage Ratio” shall be calculated as follows: EBITDA on a rolling twelve (12)
month basis divided by all principal and interest payment for like periods.

(b)Total Liabilities to Tangible Net Worth Ratio. At all times during the term
of the Loan, Borrower shall maintain a maximum ratio of Total Liabilities to
Tangible Net Worth of not more than 2.00 to 1.00. For purposes hereof, “Total
Liabilities” shall be defined as total liabilities, less subordinated debt; and
“Tangible Net Worth” shall be defined as net worth, less dues from [or loans to]
affiliated/related parties, less intangible assets, plus subordinated
debt.  This covenant shall be measured annually upon Lender’s receipt of the
financial statements of Borrower required herein.

(c)Depository Relationship. At all times during the term of the Loan, the
Borrower shall maintain its primary operating and reserve depository account(s)
and treasury management services with Lender.  Notwithstanding the foregoing,
Borrowers may maintain other depository accounts with other banking institutions
with written approval from Lender (that shall not be unreasonably withheld,
conditioned or delayed) where reasonably required to meet Borrowers’ petty cash
needs in geographic areas where Lender does not maintain branch offices.

(d)Borrowers’ Annual Financial Statements.  Within ninety (90) days after the
end of each fiscal year, Borrowers will supply Lender with (i) annual audited
financial statements which provide eliminations to demonstrate Borrowers’
operating performance and covenant testing for the prior fiscal year in form
acceptable to Lender in its sole and absolute discretion, and (ii) such
supporting documentation as Lender reasonably requests.

(e)Borrowers’ Quarterly Financial Statements. Within forty-five (45) days after
the end of each fiscal quarter and annually within ninety (90) days of fiscal
year end, Borrowers will supply Lender with (i) quarterly internally-prepared
financial statements certified by Borrowers’ CFO or other authorized company
representative acceptable to Lender, which will provide all eliminations between
the

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Borrowers and The LGL Group, Inc. for the prior fiscal quarter in form
acceptable to Lender in its sole and absolute discretion, prepared in accordance
with GAAP and all other applicable statutes, (ii) a covenant compliance
certificate confirming compliance with the financial covenants set forth herein,
in form satisfactory to Lender in its sole and absolute discretion, and (iii)
such supporting documentation as Lender reasonably requests.

(f)Covenant Compliance Certificates.  Borrower shall supply Lender with
quarterly and annual Covenant Compliance Certificates certified by Borrowers’
CFO or other authorized company representative acceptable to Lender.

(g)SEC Filings for The LGL Group, Inc.  Within ninety (90) days of fiscal year
end, Borrower shall provide Lender with audited SEC filings for The LGL Group,
Inc.

(h)Form of Financial Statements. The form and content of each financial
statement as required in Sections (d) through (g) above, shall be acceptable to
Lender in its sole discretion, shall be certified by each party to be correct
and complete, and shall include a complete description of all contingent
liabilities, including, without limitation, all indebtedness guaranteed.  

7.DEFAULT.  Upon the occurrence of any of the following events (each an “Event
of Default” and collectively, the “Events of Default”) and written notice
actually given or should have been given to Lender (whichever is earlier) or
following written notice by Lender to Borrower to cure same but Borrower failed
to do so after thirty (30) days, Lender may at its option exercise any of its
remedies set forth herein:

(a)Borrower fails to perform any obligation under this Agreement or the Note,
when due, whether on the scheduled due date or upon acceleration, maturity or
otherwise; or

 

(b)Borrower fails to perform any other obligation under the Loan Documents; or

 

(c)Borrower fails to pay or perform any other obligation, liability or
indebtedness to any other party; or

 

(d)A “Default” or an “Event of Default” (as defined in each respective document)
occurs (beyond any applicable notice and cure period) under any of the Loan
Documents; or

 

(e)If any warranty or representation made by Borrower in this Agreement or
pursuant to the terms hereof shall at any time be false or misleading in any
material respect, or if any Borrower shall fail to keep, observe or perform any
of the terms, covenants, representations or warranties contained in this
Agreement, the Note, the Security Agreement or any other document given in
connection with the Loan, or is unwilling to meet its obligations thereunder; or

 

(f)The dissolution of, termination of existence of, loss of good standing status
by Borrower, its subsidiaries or affiliates, if any, or any party to the Loan
Documents; or

 

(g)The resignation or withdrawal of any partner or any material owner/member of
Borrower, as determined by Lender in its sole discretion; or

 

(h)Borrower becomes the subject of any bankruptcy or other voluntary or
involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships, is adjudged insolvent by a court of competent
jurisdiction and if the aforesaid adjudications, order, judgments or decrees are
not vacated or set aside or stayed within ninety (90) days from the date of
entry thereof; or

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(i)The entry of a judgment or order against Borrower which Lender deems to be of
a material nature, in Lender’s sole discretion or for the payment of money in
excess of $500,000 and such judgment or order has continued unsatisfied or
unstated for a period of more than thirty (30) days; or

 

(j)The seizure or forfeiture of, or the issuance of any writ of possession,
garnishment or attachment, or any turnover order for any property of Borrower;
or

 

(k)The determination by Lender that it is insecure for any reason; or

 

(l)A material alteration in the kind or type of Borrower’s prospects or
business, financial or otherwise, is made without the prior written consent of
Lender; or

 

(m)Lender determines in good faith, in its sole discretion, that the prospects
for payment or performance of Borrower’s obligations under the Loan Documents
are impaired or there has occurred a material adverse change in the business or
prospects of Borrower, financial or otherwise or that Lender determines that it
is insecure for any reason; or

 

(n)If Borrower defaults under any loan, contract or agreement extended by Lender
or any of its affiliates, as the same may be amended, restated, modified or
replaced from time to time; or

 

(o)The failure of Borrower to timely provide any of the information as required
in Section 6 (d) through (g) above;

 

(p)The failure of Borrower to timely satisfy any of the covenants as required in
Section 6 (d) through (g) above;

 

(q)The failure of the Borrower’s business to comply with any law or regulation
controlling its operation; or

 

(r)Borrower admits in writing its inability to pay its debts generally as they
become due.

 

8.REMEDIES OF LENDER.  Upon the happening of an Event of Default, then Lender
may, at its option, upon written notice to Borrower:

(a)Cancel this Agreement;

(b)Commence an appropriate legal or equitable action to enforce performance of
this Agreement;

(c)Accelerate the payment of the Note and the Loan and any other sums secured by
the Security Agreement, apply all or any portion of any equity funds toward
payment of the Loan, and commence appropriate legal and equitable action to
collect all such amounts due Lender;

(d)Exercise any other rights or remedies Lender may have under the Security
Agreement or other Loan Documents referred to in this Agreement or executed in
connection with the Loan or which may be available under applicable law.

9.GENERAL TERMS.  The following shall be applicable throughout the period of
this Agreement or thereafter as provided herein:

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(a)Rights of Third Parties.  All conditions of the Lender hereunder are imposed
solely and exclusively for the benefit of Lender and its successors and assigns,
and no other Person shall have standing to require satisfaction of such
conditions or be entitled to assume that Lender will make advances in the
absence of strict compliance with any or all thereof, and no other Person shall,
under any circumstances, be deemed to be a beneficiary of this Agreement or the
Loan Documents, any provisions of which may be freely waived in whole or in part
by the Lender at any time if, in its sole discretion, it deems it desirable to
do so.

(b)Borrower is not Lender’s Agent.  Nothing in this Agreement, the Note, the
Security Agreement or any other Loan Document shall be construed to make the
Borrower the Lender’s agent for any purpose whatsoever, or the Borrower and
Lender partners, or joint or co‑venturers, and the relationship of the parties
shall, at all times, be that of debtor and creditor.

(c)Loan Expense/Enforcement Expense. Borrower agrees to pay to Lender on demand
all reasonable costs and expenses incurred by Lender in seeking to enforce
Lender’s rights and remedies under this Agreement, including court costs, costs
of alternative dispute resolution and reasonable attorneys’ fees and costs,
whether or not suit is filed or other proceedings are initiated hereon.

(d)Evidence of Satisfaction of Conditions.  Lender shall, at all times, be free
independently to establish to its good faith and satisfaction, and in its
absolute discretion, the existence or nonexistence of a fact or facts which are
disclosed in documents or other evidence required by the terms of this
Agreement.

(e)Headings.  The headings of the sections, paragraphs and subdivisions of this
Agreement are for the convenience of reference only, and shall not limit or
otherwise affect any of the terms hereof.

(f)Invalid Provisions to Affect No Others.  If performance of any provision
hereof or any transaction related hereto is limited by law, then the obligation
to be performed shall be reduced accordingly; and if any clause or provision
herein contained operates or would prospectively operate to invalidate this
Agreement in part, then the invalid part of said clause or provision only shall
be held for naught, as though not contained herein, and the remainder of this
Agreement shall remain operative and in full force and effect.

(g)Application of Interest to Reduce Principal Sums Due.  In the event that any
charge, interest or late charge is above the maximum rate provided by law, then
any excess amount over the lawful rate shall be applied by Lender to reduce the
principal sum of the Loan or any other amounts due Lender hereunder.

(h)Governing Law.  The laws of the State of Florida shall govern the
interpretation and enforcement of this Agreement.

(i)Number and Gender.  Whenever the singular or plural number, masculine or
feminine or neuter gender is used herein, it shall equally include the others
and shall apply jointly and severally.

(j)Prior Agreement.  To the extent necessary, this Agreement shall be deemed to
be an amendment to any prior loan agreement between Borrower and Lender, and in
the event of a conflict between the terms of this Agreement or any such prior
agreement, the terms of this Agreement shall govern.

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(k)Waiver.  If Lender shall waive any provisions of the Loan Documents, or shall
fail to enforce any of the conditions or provisions of this Agreement, such
waiver shall not be deemed to be a continuing waiver and shall never be
construed as such; and Lender shall thereafter have the right to insist upon the
enforcement of such conditions or provisions.  Furthermore, no provision of this
Agreement shall be amended, waived, modified, discharged or terminated, except
by instrument in writing signed by the parties hereto.

(l)Notices.  All notices from the Borrower to Lender and Lender to Borrower
required or permitted by any provision of this Agreement shall be in writing and
sent by registered or certified mail or nationally recognized overnight delivery
service and addressed as follows:

TO LENDER:SYNOVUS BANK

1148 Broadway

Columbus, GA 31901

Attention:  Legal Department

 

 

TO BORROWER:

M-TRON INDUSTRIES, INC.

 

PIEZO TECHNOLOGY, INC.

 

2525 Shader Road

 

Orlando, FL 32804

 

Attention:

 

Such addresses may be changed by such notice to the other party.  Notice given
as hereinabove provided shall be deemed given on the date of its deposit in the
United States Mail and, unless sooner actually received, shall be deemed
received by the party to whom it is addressed on the third calendar day
following the date on which said notice is deposited in the mail, or if a
courier system is used, on the date of delivery of the notice.

(m)Successors and Assigns.  This Agreement shall inure to the benefit of and be
binding on the parties hereto and their heirs, legal representatives, successors
and assigns; but nothing herein shall authorize the assignment hereof by the
Borrower.

(n)USA Patriot Act Notice.  Lender hereby notifies Borrower and Guarantor that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), Lender is required to obtain,
verify and record information that identifies Borrower and Guarantor, which
information includes the name and address of Borrower and Guarantor and other
information that will allow Lender to identify Borrower and Guarantor in
accordance with the Act.

(o)Counterparts, Facsimiles.  This Agreement may be executed in counterparts.
Each executed counterpart of this Agreement will constitute an original
document, and all executed counterparts, together, will constitute the same
agreement. Any counterpart evidencing signature by one party that is delivered
by facsimile by such party to the other party hereto shall be binding on the
sending party when such facsimile is sent, and such sending party shall within
ten (10) days thereafter deliver to the other parties a hard copy of such
executed counterpart containing the original signature of such party or its
authorized representative.

(p)WAIVER OF JURY TRIAL.  LENDER, BORROWER AND GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT AND ANY

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AGREEMENT TO BE CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
ENTERING INTO THIS AGREEMENT.

 

[CONTINUES ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be
executed on the date first above written.

BORROWER:

 

M-TRON INDUSTRIES, INC., a Delaware corporation

 

 

By:___/s/ William Drafts_________________

Name:  William Drafts

Title:  President and CEO

 

 

By:_____/s/ Linda Biles__________________

Name:  Linda Biles

Title:  Vice President

 

 

PIEZO TECHNOLOGY, INC., a Florida corporation

 

 

By:_______/s/ William Drafts___________________________

Name:  William Drafts

Title:  President

 

 

By:_____/s/ Linda Biles__________________

Name:  Linda Biles

Title:  Vice President

 

 

LENDER:

 

SYNOVUS BANK

 

 

By: _____/s/ Paul Jessen_________________

Name:  Paul Jessen

Title:  Authorized Signatory

 

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