UNCONDITIONAL GUARANTY
THIS UNCONDITIONAL GUARANTY (this
“Guaranty”) is made as of August 18, 2009, by The LGL
Group, Inc., a Delaware corporation (“Guarantor”), for
the benefit of First National Bank of Omaha, a national banking
association (“Bank”).
RECITALS:
A.
M-tron Industries, Inc., a Delaware
corporation (“M-TRON”), and Piezo Technology, Inc., a
Florida corporation (“Piezo” and together with M-TRON,
“Borrowers”), each subsidiaries of Guarantor, have
applied for credit, or are presently indebted or obligated to Bank;
and
B.
For the purpose of inducing Bank to
extend credit to Borrowers and because Guarantor will benefit from
the credit extended to Borrowers, Guarantor agrees to guarantee the
prompt payment of the indebtedness and liabilities of Borrowers to
Bank in accordance with the terms and conditions of this
Guaranty.
NOW, THEREFORE, for value received, and
in consideration of the financial accommodations given or to be
given or continued to Borrowers by Bank, and for other good and
valuable consideration to Guarantor, the receipt and sufficiency of
which is hereby acknowledged:
1.
Guarantor unconditionally, absolutely and
irrevocably guarantees and promises to pay to Bank any and all
amounts, including, without limitation, principal and interest,
taxes, insurance premiums, reimbursements, late charges, default
interest, damages, indemnity obligations and all other amounts,
costs, fees, expenses and charges of any kind or type whatsoever,
which may or at any time be due to Bank pursuant to the following
agreements (collectively, the “Documents”):
a.
Amended & Restated Loan Agreement,
dated as of the date hereof, between Borrowers and Bank, as
amended, restated or otherwise modified from time to time (the
“Loan Agreement”).
b.
Term Note, dated as of the date hereof,
executed by Borrowers and payable to Bank in the amount of
$1,058,219.44, and all promissory notes given in exchange, renewal
or substitution thereof (“Term Note”).
c.
Revolving Note, dated as of the date
hereof, executed by Borrowers and payable to Bank in the amount of
$4,000,000.00, and all promissory notes given in exchange, renewal
or substitution thereof (“Revolving Note”, and
collectively with the Term Note, the “Notes”).
d.
Security Agreement, dated as of the date
hereof, executed by M-TRON in favor of Bank, as amended, restated
or otherwise modified from time to time.
e.
Security Agreement, dated as of the date
hereof, executed by Piezo in favor of Bank, as amended, restated or
otherwise modified from time to time.
f.
Patent Security Agreement, dated as of
the date hereof, executed by Borrowers in favor of Bank, as
amended, restated or otherwise modified from time to
time.
g.
Any other document, agreement, instrument
or certificate contemplated by any of the foregoing agreements, or
any other documents, agreements, instruments or certificates
entered into between Bank and Borrowers with respect to any other
money or credit heretofore or hereafter advanced by Bank to or for
the account of Borrowers.
2.
Guarantor also unconditionally guarantees
the satisfaction of all conditions by Borrowers and the full and
timely performance of all obligations to be performed by Borrowers,
under or pursuant to the Documents (the matters which are
guaranteed pursuant to Section 1 and Section 2 are hereinafter
collectively referred to as the
“Obligations”).
3.
This is an absolute and unconditional
guaranty of payment and performance and not of collection and
Guarantor unconditionally: (a) waives any requirement that Bank
first make demand upon, or seek to enforce or exhaust remedies
against, Borrowers or any other person or entity (including any
other guarantor) or any of the collateral or property of Borrowers
or such other person or entity before demanding payment from, or
seeking to enforce this Guaranty against, such Guarantor; (b)
waives all rights arising out of any statute now existing or
hereafter enacted with respect to guaranty or suretyship and which
may otherwise require Bank at any time to take legal action against
Borrowers; (c) covenants that this Guaranty will not be discharged
until all of the Obligations are fully satisfied; and (d) agrees
that this Guaranty shall remain in full effect without regard to,
and shall not be affected or impaired by, any invalidity,
irregularity or unenforceability in whole or in part of any of the
Documents, or any limitation of the liability of Borrowers or
Guarantor thereunder, or any limitation on the method or terms of
payment thereunder which may now or hereafter be caused or imposed
in any manner whatsoever.
4.
This Guaranty is a continuing guaranty,
and the obligations, undertakings and conditions to be performed or
observed by Guarantor under this Guaranty shall not be affected or
impaired by reason of the happening from time to time of the
following with respect to the Documents, all without notice to, or
the further consent of, Guarantor: (a) the waiver by Bank of the
observance or performance by Borrowers, Guarantor or any one or
more of them of any of the obligations, undertakings, conditions or
other provisions contained in any of the Documents, except to the
extent of such waiver; (b) the extension, in whole or in part, of
the time for payment of any amount owing or payable under the
Documents; (c) the modification or amendment (whether material or
otherwise) of any of the obligations of Borrowers under, or any
other provisions of, any of the Documents, except to the extent of
such modification or amendment; (d) the taking or the omission of
any of the actions referred to in any of the Documents (including,
without limitation, the giving of any consent referred to therein);
(e) any failure, omission, delay or lack on the part of Bank to
enforce, assert or exercise any provision of the Documents,
including any right, power or remedy conferred on Bank in any of
the Documents or any action on the part of Bank granting indulgence
or extension in any form; (f) the assignment to or assumption
by any third party of any or all of the rights or obligations of
Borrowers under all or any of the Documents; (g) the release or
discharge of Borrowers from the performance or observance of any
obligation, undertaking or condition to be performed by
2
Borrowers under any of the Documents by
operation of law, including any rejection or disaffirmance of any
of the Documents in any bankruptcy or similar proceedings; (h) the
receipt and acceptance by Bank or any other person or entity of
notes, checks or other instruments for the payment of money and
extensions and renewals thereof; (i) any action, inaction or
election of remedies by Bank which results in any impairment or
destruction of any subrogation, indemnity, reimbursement or
contribution rights of Guarantor, or any rights of Guarantor to
proceed against any other person or entity for reimbursement; (j)
any setoff, defense, counterclaim, abatement, recoupment,
reduction, change in law or any other event or circumstance which
might otherwise constitute a legal or equitable discharge or
defense of a guarantor, indemnitor or surety under the laws of the
State of Nebraska or any other jurisdiction; and (k) the
termination or renewal of any of the Obligations or any other
provision thereof.
5.
Guarantor represents and warrants to Bank
that: (a) neither the execution nor delivery of this Guaranty nor
fulfillment of nor compliance with the terms and provisions hereof
will conflict with, or result in a breach of the terms or
conditions of, or constitute a default under, any agreement or
instrument to which Guarantor is now a party or by which Guarantor
may be bound, or result in the creation of any lien, charge or
encumbrance upon any property or assets of Guarantor, which
conflict, breach, default, lien, charge or encumbrance could result
in a material adverse change in the financial condition of
Guarantor; (b) no further consents, approvals or authorizations are
required for the execution and delivery of this Guaranty by
Guarantor or for Guarantor’s compliance with the terms and
provisions of this Guaranty; (c) this Guaranty is the legal, valid
and binding agreement of Guarantor and is enforceable against
Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
liquidation, reorganization and other laws affecting the rights of
creditors generally and subject to general principles of equity;
(d) Guarantor has the full power, authority, capacity and legal
right to execute and deliver this Guaranty, and, to the extent
Guarantor is a corporation, partnership, limited liability company
or other form of entity, the parties executing this Guaranty on
behalf of Guarantor are fully authorized and directed to execute
the same to bind Guarantor; (e) Guarantor’s Social Security
Number or Federal Tax Identification Number is accurately set forth
herein next to Guarantor's signature; (f) any financial statements
and other information relating to Guarantor heretofore delivered to
Bank are true, correct and complete in all material respects as of
the date of this Guaranty; Guarantor understands that Bank is
relying upon such information, and Guarantor represents that such
reliance is reasonable; and the financial statements of Guarantor
delivered by Borrowers to Bank pursuant to the Loan Agreement have
been prepared in accordance with generally accepted U.S. accounting
principles consistently applied and accurately reflect, as of the
date of this Guaranty, the financial condition of Guarantor; (g)
during the term of this Guaranty, Guarantor will not transfer or
dispose of any material part of Guarantor's assets except in the
ordinary course of business for full and fair consideration and
reasonably equivalent value; (h) Guarantor will furnish to
Bank the financial information required under Section 6.08 of the
Loan Agreement and such other financial information as bank may
reasonably request; and (i)
