UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 22, 2022

 

BK Technologies Corporation

(Exact name of registrant as specified in its charter)

 

Nevada

001-32644

83-4064262

(State or other jurisdiction of

(Commission

(IRS Employer

incorporation or organization)

File No.)

Identification Number)

 

7100 Technology Drive, West Melbourne, FL

32904

(Address of principal executive offices)

(Zip Code)

 

(321) 984-1414

(Registrant’s telephone number including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: 

 

Title of Each Class

 

Trading Symbol(s)

 

Name of Each Exchange on Which Registered

Common Stock, par value $0.60 per share

 

BKTI

 

NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐ 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

On November 22, 2022, certain subsidiaries (the “Subsidiaries”) of BK Technologies Corporation, a Nevada corporation (the “Company”), entered into an Invoice Purchase and Security Agreement (the “PSA”) with Alterna Capital Solutions LLC (the “Lender”) providing for the purchase by the Lender of certain of the Subsidiaries’ accounts receivable.

 

Pursuant to the PSA, the Subsidiaries agree to sell eligible accounts receivable to the Lender for an amount equal to the face amount of each account receivable less a reserve percentage. The maximum amount potentially available to be deployed by the Lender at any given time is $15 million. The Subsidiaries have agreed to pay a funds usage fee equal to the per annum rate equal to the sum of the prime rate plus 1.85% of the unpaid face amount due on all purchased accounts receivable, minus a reserve account.

 

The PSA provides for the payment of fees by the Subsidiaries and includes customary representations and warranties, indemnification provisions, covenants and events of default. Subject in some cases to cure periods, amounts outstanding under the PSA may be accelerated for typical defaults including, but not limited to, the failure to make payments when due, the failure to perform any covenant, the inaccuracy of representations and warranties, the occurrence of debtor-relief proceedings, and the occurrence of unpermitted liens against the purchased accounts receivable and collateral. The Subsidiaries have granted the Lender a security interest in all of their respective personal property to secure their obligations under the PSA.

 

The PSA provides for an initial twelve (12) month term, followed by automatic annual renewal terms unless the Subsidiaries provide written notice pursuant to the PSA prior to the end of any term.

 

In connection with the PSA, the Subsidiaries delivered a Guaranty (the “Cross Guaranty”), cross-guarantying the prompt payment and performance of the liabilities and obligations of the other Subsidiary to the Lender under the PSA, and the Company delivered a Commercial Guaranty (the “Parent Guaranty”) to the Lender, guaranteeing the prompt payment and performance of the liabilities and obligations of the Subsidiaries to the Lender under the PSA.

 

The foregoing summary of the PSA, the Cross Guaranty, and the Parent Guaranty do not purport to be complete and are qualified in their entirety by reference to the text of the PSA, the Cross Guaranty, and the Guaranty, copies of which are filed as Exhibits 10.1, 10.2, and 10.3 hereto and incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.

 

 Description

10.1*

 

Invoice Purchase and Security Agreement between the Subsidiaries and the Lender dated November 22, 2022

 

 

 

10.2

 

Guaranty by the Subsidiaries in favor of the Lender dated November 22, 2022

 

 

 

10.3

 

Commercial Guaranty by the Company in favor of the Lender dated November 22, 2022

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

BK TECHNOLOGIES CORPORATION

 

 

 

 

Date: November 29, 2022

By:

/s/ Scott A. Malmanger

 

 

Scott A. Malmanger

 

 

Chief Financial Officer

 

 

 
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EXHIBIT 10.1

 

INVOICE PURCHASE AND SECURITY AGREEMENT

 

THIS INVOICE PURCHASE AND SECURITY AGREEMENT (“Agreement”) is made on this 22nd day of November 2022 between BK Technologies, Inc., a Nevada corporation, and RELM Communications, Inc., a Florida corporation (individually and collectively, "Sellers") and Alterna Capital Solutions LLC, a Florida Limited Liability Company ("Purchaser").

 

1. Definitions and Index to Definitions. The following terms shall have the following meanings. All capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in Article 9 of the Uniform Commercial Code (the "UCC") as adopted in the Chosen State:

 

1.1. “Account” – the right to payment of a monetary obligation, whether or not earned by performance, for property that has been or is to be sold, licensed, assigned, or otherwise disposed of or for services rendered or to be rendered.

 

1.2. “Account Debtor” - any person who is obligated to Seller on an Account, Chattel Paper, or General Intangible.

 

1.3. "Advance Rate" – 85%, which percent may be revised at any time by Purchaser in Purchaser's Permitted Discretion.

 

1.4. “Affiliate” - With respect to any person that is a corporation, each other person that owns or controls directly or indirectly the person, any person that controls or is controlled by or is under common control with the person, and each of that person’s senior executive officers, directors, and partners and, for any person that is a limited liability company, that person’s managers and members.

 

1.5. "Avoidance Claim" - Any claim that a payment received by Purchaser is a preference or otherwise avoidable under the United States Bankruptcy Code or any other debtor-relief statute.

 

1.6. "Balance Subject to Funds Usage Daily Rate" - The unpaid Face Amount due on all Purchased Accounts minus the Reserve Account.

 

1.7. “Business Day” – A day on which a bank is open for business in the Chosen State.

 

1.8. "Chosen State" - Florida.

 

1.9. "Clearance Days" – Two (2) calendar days.

 

1.10. "Closed" - An Account for which Purchaser has received full payment.

 

1.11. "Collateral" - All now owned and hereafter acquired personal property and fixtures, and proceeds thereof, (including proceeds of proceeds) of Seller including without limitation: Accounts including accounts receivable; Chattel Paper; Inventory; Equipment; Instruments, including Promissory Notes; Investment Property; Documents; Deposit Accounts; Letter of Credit Rights; General Intangibles; and Supporting Obligations.

 

1.12. “Collateral Monitoring Fee” – 0.10%, assumed on the average eligible accounts receivable and inventory balance, which shall be charged and paid on the last day of each month.

 

1.13. “Complete Termination” - Complete Termination occurs upon satisfaction of the following conditions: (i) payment in full of all Obligations of Seller to Purchaser (other than Obligations under Sections 19, 27 and 36 hereof which survive the payment in full of the other Obligations indefinitely); (ii) if Purchaser has issued or caused to be issued guarantees, promises, or letters of credit on behalf of Seller, acknowledgement from any beneficiaries thereof that Purchaser or any other issuer has no outstanding direct or contingent liability therein; and (iii) Seller and all guarantors of the Obligations have executed and delivered to Purchaser a general release in a form reasonably acceptable to Purchaser.

 

 
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1.14. “Default Rate” shall mean the lesser of: (i) 8% above the Funds Usage Percentage or (ii) the maximum interest rate allowed by applicable law.

 

1.15. "Early Termination Fee" - See Section 23.1.

 

1.16. "Eligible Account" - An Account that is acceptable for purchase by Purchaser, as determined by Purchaser in its Permitted Discretion.

 

1.17. "Events of Default" - See Section 21 herein.

 

1.18. “Exposed Payments” - With respect to an Account which Seller has repurchased or could be required to repurchase hereunder, payments received by Purchaser from or for the Account of a Payor that has become subject to a bankruptcy proceeding, to the extent such payments cleared the Payor’s deposit account within ninety (90) days of the commencement of said bankruptcy case.

 

1.19. “Face Amount” - The Face Amount due on an Account on the Purchase Date.

 

1.20. “Facility Fee” – 1.0% of the Maximum Amount, which the Seller shall pay upon execution of this Agreement and on any incremental increases to the Maximum Amount. 0.75% of the Maximum Amount, which the Seller shall pay on the first day of each Renewal Term, if any.

 

1.21. "Funds Usage Daily Fee" – The fee the Seller shall pay to Purchaser on a daily basis on the Balance Subject to Funds Usage Daily Rate, which shall be calculated as the Funds Usage Daily Rate multiplied by the Balance Subject to Funds Usage Daily Rate.

 

1.22. “Funds Usage Percentage” – a per annum rate equal to the sum of the Prime Rate plus 1.85%. The Funds Usage Percentage shall increase or decrease on the same date and in the same amount as any change in the Prime Rate.

 

1.23. “Funds Usage Daily Rate” – for any day, the Funds Usage Percentage in effect as of such day divided by 360.

 

1.24. "Ineligible Account" - An Account other than an Eligible Account as determined by Purchaser in its Permitted Discretion.

 

1.25. "Invoice" - The document that evidences or is intended to evidence an Account. Where the context so requires, reference to an Invoice shall be deemed to refer to the Account to which it relates.

 

1.26. “Maximum Amount" –$15,000,000.

 

1.27. "Misdirected Payment Fee" – The fee the Seller shall pay to the Purchaser for each payment on account of a Purchased Account which has been received by Seller or by a third party (“Misdirected Payment”) and not paid to Purchaser on the next Business Day following (a) the date of receipt of the Misdirected Payment by Seller or a third party or (b) the date of Seller's knowledge of receipt of the Misdirected Payment by such third party. The amount of the Misdirected Payment Fee shall be 15% of the amount of the Misdirected Payment.

 

1.28. “Missing Notation Fee” – The fee the Seller shall pay to the Purchaser on the Purchase Date of an Invoice if the Invoice is missing a notice of assignment legend as required by Section 4 herein. The amount of the Missing Notation Fee shall be 15% of the Face Amount of the Invoice on the Purchase Date.

 

1.29. “Obligations” - All present and future Obligations and liabilities owing by Seller to Purchaser, whether direct or indirect, absolute or contingent, including Obligations and liabilities that are likely to become owing by Seller to Purchaser, including without limitation interest, fees, and costs, whether arising hereunder or otherwise, and whether arising before, during or after the commencement of any case filed under title 11 of the United States Bankruptcy Code or any other debtor relief proceeding in which Seller is a Debtor.

 

 
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1.30. "Parties" - Seller and Purchaser.

 

1.31. "Payor" - An Account Debtor, other obligor, or entity obligated on an Account, making payment on behalf of such party.

 

1.32. “Permitted Discretion” – A determination made in good faith and in the exercise of what the Purchaser believes is reasonable business judgment.

 

1.33. “Permitted Liens” – Liens identified on Schedule A hereto.

 

1.34. “Purchase Date” - The date on which Purchaser has advised Seller in writing that it has agreed to purchase an Account

 

1.35. "Purchase Price" - The Face Amount of a Purchased Account on the Purchase Date.

 

1.36. "Purchased Account" - An Account purchased by Purchaser which is not Closed or repurchased by Seller.

 

1.37. “Purchased Eligible Account” – An Eligible Account purchased by Purchaser which is not Closed or repurchased by Seller.

 

1.38. “Renewal Term” – See Section 23.

 

1.39. "Required Reserve Amount" – The Reserve Percentage multiplied by the unpaid balance of all Purchased Accounts, plus all amounts due on Ineligible Accounts, plus all accrued fees and expenses.

 

1.40. "Reserve Account" - A bookkeeping account on the books of the Purchaser representing the portion of the Purchase Price which has not been paid by Purchaser to Seller, maintained by Purchaser to secure Seller's performance with the provisions hereof.

 

1.41. “Reserve Percentage” - 100% minus the Advance Rate.

 

1.42. "Reserve Shortfall" - The amount by which the Reserve Account is less than the Required Reserve Amount.

 

1.43. "Term” - See Section 23.

 

1.44. Termination Date" - The earlier of (i) the date on which Purchaser terminates this Agreement pursuant to the terms hereof, or (ii) the end of the Term or the last Renewal Term which was not extended under Section 23.

 

2. Assignment and Sale. In the absence of a continuing Event of Default Seller hereby sells and shall continue to sell to Purchaser as absolute owner, and Purchaser hereby purchases and shall continue to purchase from Seller, with full recourse, each of Seller's Eligible Accounts which Seller submits to Purchaser, so long as such sale and purchase of an Eligible Account would not result in an Overadvance (as hereinafter defined) or cause the aggregate amount of Purchased Accounts to exceed the Maximum Account as Purchaser determines in its Permitted Discretion. Each Account shall be accompanied by such documentation supporting and evidencing the Account as Purchaser may reasonably request. Purchaser shall pay the Purchase Price of any Purchased Account, less (i) the Reserve Percentage multiplied by the Purchase Price and (ii) any amounts then due and payable to Purchaser from Seller, within two (2) Business Days of the Purchase Date. Seller represents that all Purchased Accounts are true, correct, and collectible and are sold to Purchaser free and clear of any claims. Purchaser may, but need not, purchase from Seller such Accounts as Purchaser determines to be Eligible Accounts.

 

 
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3. Reserve Account.

 

3.1. Purchaser may pay any amounts due Seller hereunder by a credit to the Reserve Account to the extent (but only to the extent) of any Reserve Shortfall.

 

3.2. Seller shall pay to Purchaser within two (2) Business Days following written demand the amount of any Reserve Shortfall.

 

3.3. So long as there is no existing Event of Default, Purchaser shall pay to Seller within ten days (or more frequently upon Seller's request), any amount by which the Reserve Account exceeds the Required Reserve Amount (including, without limitation, as a result of a repurchase by Seller of any Purchased Account).

 

3.4. Purchaser may charge the Reserve Account with any Obligation then due and payable by Seller.

 

3.5. Except as provided in Section 3.3, Purchaser may retain the Reserve Account until Complete Termination.

 

4. Notice of Assignment and Lock Box. Purchaser is hereby authorized to notify any Account Debtor obligated with respect to any Purchased Account that the underlying Purchased Account has been assigned to Purchaser by Seller and that payment thereof is to be made to the order of and directly and solely to Purchaser. All Invoices for Purchased Accounts sent by Seller to Account Debtors shall contain on the face of the Invoice the following statement: "This account is assigned and payable only to Alterna Capital Solutions LLC (“ACS”). All payments shall be sent to ACS at: P.O. Box 936601, Atlanta, GA 31193-6601."

 

5. Exposed Payments. Upon termination of this Agreement, Seller shall pay to Purchaser (or Purchaser may retain), to hold in a non-segregated, non-interest-bearing account the amount of all Exposed Payments (the “Preference Reserve”). Purchaser may charge the preference reserve with the amount of any Exposed Payments that Purchaser pays to the bankruptcy estate of the Payor that made the Exposed Payment, because of a claim asserted under Section 547 of the Bankruptcy Code. Purchaser shall refund to Seller from time to time that balance of the preference reserve for which a claim under Section 547 of the Bankruptcy Code can no longer be asserted due to the passage of the statute of limitations, settlement with the bankruptcy estate of the Payor or otherwise.

 

6. Authorization for Purchases. Subject to the terms and conditions of this Agreement, Purchaser is authorized to purchase Accounts upon telephonic, facsimile, or other instructions received from anyone purporting to be an officer, employee, or representative of Seller.

 

7. Fees. Seller shall pay to Purchaser throughout the Term and any Renewal Term of this Agreement, all applicable fees, which may include but are not limited to: the Collateral Monitoring Fee, Facility Fee, the Funds Usage Daily Fee, the Misdirected Payment Fee, Missing Notation Fee and Early Termination Fee on the date(s) that each fee is due and payable as provided as set forth in Sections 1.12, 1.17, 1.22, 1.23, 1.30 and 1.31 herein, and shall be charged by the Purchaser to the Reserve Account. All computations of interest and fees shall be made by Purchaser on the basis of a three hundred and sixty (360) day year, for the actual number of days elapsed. The actual number of days excludes the day on which the funds are advanced and includes the day on which the interest or fee is paid. Each determination by Purchaser of an interest rate hereunder shall be conclusive and binding for all purposes absent manifest error.

 

8. Other Charges and Expenses. Seller shall reimburse Purchaser for all actual and documented out-of-pocket costs and expenses incurred in connection with this Agreement, including but not limited to the following: $20.00 per wire, the actual UCC filing fees and other search costs paid to unaffiliated third parties, the actual field examination fees directly incurred by Purchaser with unaffiliated third parties in the administration of this Agreement, and all reasonable outside attorney’s fees and costs actually incurred by Purchaser in connection with this Agreement (collectively, “Reimbursable Expenses.”). Reimbursable Expenses are due at the time of payment of the applicable fees or expenses by Purchaser and may be charged to the Reserve Account at Purchaser’s Permitted Discretion.

 

9. Repurchase of Accounts. Seller shall within five (5) Business Days of demand by Purchaser repurchase any Purchased Account that Purchaser reasonably determines at any time is uncollectible for any reason or is otherwise no longer an Eligible Account and on such demand shall pay to Purchaser the then unpaid amount due on the Purchased Account, together with any accrued but unpaid fees relating to the Purchased Account. Purchaser shall retain its security interest in any Purchased Account repurchased by Seller.

 

 
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10. Security Interest. To secure payment and performance of all present and future Obligations of Seller to Purchaser, Seller grants to Purchaser a continuing first priority security interest in and to the Collateral. Seller shall execute and deliver to Purchaser such documents and instruments, including without limitation, UCC-1 financing statements, as Purchaser may reasonably request from time to time in order to evidence and perfect its security interest in the Collateral. Seller authorizes Purchaser to file a UCC-1 financing statement, including without limitation, original financing statements, amendments, and continuation statements, in all jurisdictions and offices Purchaser deems appropriate which names Seller as the debtor and describes the Collateral. Notwithstanding the creation of this security interest, it is the intent of the Parties that the relationship of the Parties in respect to all Purchased Accounts shall at all times be that of purchaser and seller, and not that of lender and borrower. Neither Purchaser nor Seller is or shall be a fiduciary of the other Party.

 

11. Clearance Days. Clearance Days shall be added to the date on which Purchaser receives any payment before such payment is credited to reduce outstanding amounts due hereunder.

 

12. Authorization to Purchaser. Seller will attempt to work with the Purchaser to develop a reasonable plan to implement, at Seller's sole expense, the powers identified in this Section 12. Notwithstanding the foregoing, Purchaser shall have Permitted Discretion to exercise at any time any of the following powers until all of the Obligations have been fully satisfied and discharged: (a) receive, take, endorse, assign, deliver, accept and deposit, in the name of Purchaser or Seller, proceeds of any Collateral; (b) take or bring, in the name of Purchaser or Seller, all steps, actions, suits or proceedings deemed by Purchaser necessary or desirable to effect collection of or other realization upon all Collateral; (c) file any claim under (i) any bond or (ii) under any trust fund with respect to any of the foregoing issued for the benefit of Seller individually or as a member of a class or group; (d) with respect to any credit insurance policy in which Seller is an insured, in the name of Seller and/or Purchaser: (i) file a claim thereunder; and (ii) as required under the policy, assign to the insurer any rights that Seller and/or Purchaser may have in Seller’s Accounts; (e) pay any sums necessary to discharge any lien, claim, or encumbrance which is senior to Purchaser's security interest in any assets of Seller, which sums shall be included as Obligations of and in connection with such sums the Default Rate shall accrue and shall be immediately due and payable on the Balance Subject to Funds Usage Daily Rate; (f) file in the name of Seller or Purchaser or both (i) mechanics lien or related notices, or (ii) claims under any payment bond, in connection with goods or services sold by Seller in connection with the improvement of realty; (g) notify any Account Debtor and/or Payor obligated with respect to any Account, that the underlying Account has been assigned to Purchaser by Seller and that payment thereof is to be made to the order of and directly and solely to Purchaser; (h) communicate directly with Seller's Account Debtors and/or Payors to verify the amount and validity of any Account created by Seller; (i) endorse and deposit on behalf of Seller any checks tendered by an Account Debtor "in full payment" of its obligation to Seller(and Seller shall not assert against Purchaser any claim arising therefrom, irrespective of whether such action by Purchaser effects an accord and satisfaction of Seller's claims, under §3-311 of the Uniform Commercial Code, or otherwise); and (j) in Purchaser’s name or on behalf of Seller, with Seller to be bound thereby, extend the time of payment of, compromise or settle for cash, credit, return of merchandise, and upon any terms or conditions (collectively, a “Settlement”), all Accounts and discharge or release any Account Debtor or other obligor (including filing of any public record releasing any lien granted to Seller by such Account Debtor), without affecting any of the Obligations. All settlements are presumed to be commercially reasonable, with the burden of proof on Seller with respect thereto.

 

13. ACH Authorization. In order to satisfy any of the Obligations or to recover any overpayment made by Purchaser to Seller, Purchaser is authorized and may process electronic debit or credit entries through the ACH system to any deposit account of Seller. Purchaser shall provide prompt written notice to Seller of any such debit or credit entry.

 

14. Agreements by Seller.

 

14.1. After written notice by Purchaser to Seller following the occurrence and during the continuance of an Event of Default, Seller shall not (a) grant any extension of time for payment of any of its Accounts, (b) compromise or settle any of its Accounts for less than the full amount, (c) release in whole or in part any Payor, or (d) grant credits, discounts, allowances, deductions, or return authorizations for any Accounts.

 

14.2. Seller shall keep at its principal place of business all books of account and business records customary for the industry, which books and records are subject to inspection by Purchaser and its agents and representatives during normal business hours, at mutually acceptable dates and times following reasonable prior notice of such inspection from Purchaser to Seller. Purchaser or its designee shall have access, during reasonable business hours at mutually acceptable dates and times following reasonable prior written notice if prior to an Event of Default and at any time if on or after an Event of Default, to all premises where Collateral is located for the purposes of inspecting (and removing, if after the occurrence of an Event of Default) any of the Collateral, and Seller shall permit Purchaser or its designee to make copies of such books and records (other than privileged materials or other materials where disclosure is prohibited by law or contract) as Purchaser may request.

 

 
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14.3. Seller shall give Purchaser thirty (30) Business Days' prior written notice of any proposed change to its present name, the address of its headquarters or where its books and records are located, any proposed purchase of a majority interest in its voting equity ownership or proposed purchase of all or substantially all of its assets, and any proposed change to its jurisdiction of organization or type of legal organization.

 

14.4. Seller shall pay when due all of its payroll and other taxes (subject to the right of contest through appropriate proceedings with the maintenance of appropriate reserves required by GAAP) and shall provide proof of payment to Purchaser.

 

14.5. Seller shall not create, incur, or permit the existence of any lien upon any Collateral (other than Permitted Liens) without prior consent of Purchaser, which consent will not be unreasonably withheld so long as the subordinate secured party and Purchaser enter into a consent agreement acceptable to Purchaser. As of the date of this Agreement, Purchaser consents to the existence of the UCC liens and other liens identified on Schedule A attached hereto, subject to the terms and conditions set forth in Schedule A.

 

14.6. Seller shall provide Purchaser, within two (2) Business Days of receipt by Seller, copies of any business or legal notices, summonses, complaints, or other proceedings received by Seller which, in each case, if adversely determined, could reasonably be expected to have a material adverse effect on Seller’s financial condition.

 

14.7. Seller shall pay to Purchaser on the next banking day following the date of receipt by Seller the amount of (a) any payment on account of a Purchased Account; and (b) after the occurrence of an Event of Default, any payment on account of any Account. Seller shall hold the funds described herein in trust for Purchaser and such funds shall not be commingled with any funds of Seller.

 

14.8. Seller shall provide to Purchaser, within ten (10) days of the end of each calendar month the following information: (a) a detailed aging of accounts receivable as of the last day of each month, (b) a detailed aging of accounts payable as of the last day of each month, (c) a detailed bank statement as of the last day of each month, and (d) internally prepared financial statements including a profit and loss statement and balance sheet.

 

14.9. Seller shall provide to Purchaser, within ten (10) days of filing thereof, copies of the Seller’s quarterly Federal withholding (Form 941) filings and annual federal and state income tax returns (Form 1120), together with copies of tax deposit receipts or other proof of deposits and payments pertaining thereto.

 

14.10. Seller shall provide to Purchaser, annually within ninety (90) days after the close of Seller’s fiscal year, financial statements, including a profit and loss statement and balance sheet.

 

14.11. In the event that Seller sends a notice of assignment to a Payor obligated with respect to any Account pursuant to Section 12(g), (a) Seller shall not direct such Payor to pay such Account to Seller or any other entity or individual, or undermine or interfere with such notice of assignment in any manner; and (b) Seller agrees that a violation of this Section 14.11 will put the value of the Collateral at risk and will cause irreparable harm to Purchaser and Purchaser shall be entitled to injunctive relief to prevent such violation without the necessity of proving that actual damages are not an adequate remedy. Purchaser will be entitled to any proceeds of Accounts received by Seller from such violation.

 

 
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15. Account Statement. Purchaser may make available to Seller a statement setting forth the transactions arising hereunder. Each statement shall be considered correct and binding upon Seller as an account statement, except to the extent that Purchaser receives, within thirty (30) days after the availability of such statement, written notice from Seller of any specific exceptions by Seller to that statement, and then it shall be binding against Seller as to any items to which it has not objected.

 

16. Account Disputes. Seller shall notify Purchaser of all disputes concerning any Purchased Account, and at Purchaser's request Seller shall settle all disputes concerning any Purchased Account, at Seller's sole cost and expense. Seller shall not, without Purchaser's prior consent, compromise or adjust a Purchased Account or grant any additional discounts, allowances, or credits on a Purchased Account. Purchaser may attempt to settle, compromise, or litigate any dispute upon such terms, as Purchaser deems advisable.

 

17. Overadvance. If at any time and for any reason the total aggregate amount of outstanding Balance Subject to Funds Usage Daily Rate exceeds the Purchased Accounts which are Eligible Accounts (any such excess being an “Overadvance”), without limiting the Purchaser’s right to declare an Event of Default, Seller will upon demand by Purchaser immediately pay to Purchaser in cash the amount of any such Overadvance. . Without affecting Seller’s obligation to immediately repay to Purchaser the amount of each Overadvance, Seller shall pay Purchaser a fee (the “Overadvance Fee”) in an amount of $500.00 per each occurrence of an Overadvance, plus interest on such Overadvance at the Default Rate with respect to any Over advance which has not been repaid within five days after notice thereof from Purchaser to Seller. Without limiting the foregoing, all Overadvances shall be deemed Obligations and shall be secured by the Collateral and guaranteed under all guaranties executed in connection with the Agreement.

 

18. Representation and Warranties. Seller represents and warrants that (a) Seller is fully authorized to enter into this Agreement; (b) this Agreement constitutes a legal and valid obligation that is binding upon Seller and that is enforceable against it, subject to bankruptcy, insolvency, moratorium, receivership and similar laws affecting creditors generally and to general principles of equity; (c) Seller is solvent and in good standing in the state of its organization; (d) there are no pending actions, suits, or other legal proceedings of any kind (whether civil or criminal) now pending (or, to its knowledge, overtly threatened in writing) against Seller, the adverse result of which would reasonably be expected to have a material adverse effect on its property or financial condition, or threaten its continued operations; (e) Seller has not conducted business under or used any other name, whether legal or fictitious, other than RELM Wireless Corporation; (f) the Purchased Accounts are and will (i) remain bona fide existing Obligations created by the sale and delivery of goods or the rendition of services in the ordinary course of its business, (ii) are unconditionally owed and will be paid to Purchaser without defenses, disputes, offsets, counterclaims, or rights of return or cancellation, (iii) not sales to any Affiliates of Seller, and (iv) “arm’s length” transactions; (g) Seller has not received notice of actual or imminent bankruptcy, insolvency, or material impairment of the financial condition of any applicable Account Debtor regarding Purchased Accounts; (h) None of the Seller, any of its subsidiaries, any director or officer, or any employee, agent, or Affiliate, of the Seller or any of its subsidiaries is a person that is, or is owned or controlled by persons that are, (i) the subject of any sanctions administered or enforced by the US Department of the Treasury’s Office of Foreign Assets Control, the US Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, the Hong Kong Monetary Authority or other relevant sanctions authority (collectively, "Sanctions"), or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions, including, without limitation, currently, Cuba, the Crimea region of Ukraine, Iran, North Korea, Sudan and Syria (i) None of the Seller or any of its subsidiaries, nor to the knowledge of the Seller, any director, officer, agent, employee, Affiliate or other person acting on behalf of the Seller or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of any applicable anti-bribery law, including but not limited to, the United Kingdom Bribery Act 2010 (the "UK Bribery Act") and the U.S. Foreign Corrupt Practices Act of 1977 (the "FCPA"). Furthermore, the Seller and, to the knowledge of the Seller, its Affiliates have conducted their businesses in compliance with the UK Bribery Act, the FCPA and similar laws, rules or regulations and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

19. Indemnification. Seller agrees to indemnify Purchaser and hold it harmless against any and all manner of suits, claims, liabilities, demands, damages, expenses, reasonable outside attorneys’ fees, and collection costs resulting from or arising out of this Agreement, whether directly or indirectly (“Indemnified Loss”) and shall pay to Purchaser on demand the amount of such Indemnified Loss; provided that such indemnity shall not be available to the extent that such suits, claims, liabilities, demands, damages, expenses, attorneys’ fees or collection costs (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of Purchaser or (y) result from a claim brought by Seller against Purchaser for breach in bad faith of Purchaser’s material obligations hereunder, if Seller has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. Without limiting the generality of the foregoing, the Seller’s indemnification shall include but not be limited to, any loss arising out of the Purchaser’s exercise of its rights pursuant to Section 12 herein and any assertion of any Avoidance Claim. With respect to an Avoidance Claim, Seller shall notify Purchaser within two (2)Business Days of Seller's becoming aware of the assertion of an Avoidance Claim. This provision shall survive termination of this Agreement.

 

 
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20. Disclaimer of Liability. Purchaser will not be liable to Seller for any lost profits, lost savings or other consequential, incidental, punitive, or special damages resulting from or arising out of or in connection with this Agreement.

 

21. Default and Events of Default. The following events will constitute an Event of Default hereunder:

 

(a) Seller defaults in the payment of any Obligations and does not cure the default within five (5) Business Days of the date when such Obligations are due and payable; (b) Seller fails to perform any covenant or agreement, provision or other undertaking under this Agreement and such failure continues without cure for fifteen (15) or more days following notice thereof from Purchaser to Seller(provided, however, that so long as such failure is reasonably susceptible of cure and Seller is diligently using its best efforts to effect such cure, Seller shall have an additional ten (10) days to cure such failure); (c) any representation or warranty of the Seller contained in this Agreement proves to be false in any material respect; (d) Seller or any guarantor of the Obligations becomes subject to any debtor-relief proceedings and, in the case of an involuntary proceeding, suffers the entry against it of a judgment, decree, or order for relief or files an answer admitting the material allegations of a petition filed against it in any such proceeding, or any such proceeding commenced against it remains undismissed for a period of sixty (60) days; (e) any guarantor fails to perform or observe any of the guarantor's Obligations to Purchaser or shall notify Purchaser of its intention to rescind, modify, terminate or revoke any guaranty, or any guaranty shall cease to be in full force and effect for any reason whatever; or (f) any lien, garnishment, attachment or the like shall be issued against or shall attach to the Purchased Accounts, the Collateral (other than Permitted Liens) or any portion thereof and the same is not released within five (5) days.

 

SELLER WAIVES ANY REQUIREMENT THAT PURCHASER INFORM SELLER BY AFFIRMATIVE ACT OR OTHERWISE OF ANY ACCELERATION OF SELLER'S OBLIGATIONS. PURCHASER'S FAILURE TO CHARGE OR ACCRUE INTEREST OR FEES AT ANY "DEFAULT" OR "PAST DUE" RATE SHALL NOT BE DEEMED A WAIVER BY PURCHASER OF ITS CLAIM FOR SUCH INTEREST OR FEES.

 

Upon the occurrence and during the continuance of any Event of Default, in addition to any rights Purchaser has under this Agreement or applicable law, Purchaser may immediately terminate this Agreement, at which time all Obligations shall immediately become due and payable without notice.

 

20.1 At option of Purchaser, (i) from and after the occurrence and during the continuance of an Event of Default, and without constituting a waiver of any such Event of Default, and/or (ii) if the Obligations (other than Obligations under Sections 19, 27 and 36 hereof which survive the payment in full of the other Obligations indefinitely) are not paid in full by the Termination Date, the Obligations shall bear interest at the Default Rate.

 

22. Amendment and Waiver. This Agreement may only be modified in writing signed by all Parties. No failure or delay in exercising any right shall impair any right that Purchaser has, nor shall any waiver by Purchaser be deemed a waiver of any default or breach occurring subsequently. Purchaser's rights and remedies are cumulative and not exclusive of each other or of any rights or remedies that Purchaser would otherwise have.

 

 
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23. Term and Termination Date. This Agreement shall be effective when executed by all of the Parties, shall continue in full force and effect for twelve (12) months thereafter (the "Term"), and shall be further extended automatically annually (the "Renewal Term"), unless Seller provides written notice of its intention to terminate at least sixty (60) days prior the end of the respective Term or Renewal Term. Notwithstanding the preceding sentence, such termination shall not occur, and the Agreement shall continue as if no notice was given unless, on the Termination Date, Seller has fully repaid Purchaser all Obligations (other than Obligations under Sections 19, 27 and 36 hereof which survive the payment in full of the other Obligations indefinitely).

 

23.1. If Seller provides notice of its intent to terminate under Section 23 herein, then in addition to any other fees or amounts due under this Agreement, Seller agrees that it will pay Purchaser an Early Termination Fee equal to 2.0% of the Maximum Amount if this Agreement is terminated during the first twelve (12) months of this Agreement but before the last day of the Term, and 1.0% of the Maximum Amount if this Agreement is terminated during the second twelve months but before the last day of the then-current Renewal Term (“Early Termination Fee”). The Early Termination Fee will be waived should the Seller obtain traditional or asset-based financing with a FDIC bank or its affiliate.

 

23.2. Purchaser may terminate this Agreement at any time by giving Seller thirty (30) days' prior written notice of termination, whereupon this Agreement shall terminate on the earlier date of thirty (30) days thereafter or the end of the then current Term or Renewal Term, upon which Termination Date Seller shall fully repay to Purchaser all Obligations (other than Obligations under Sections 19, 27 and 36 hereof which survive the payment in full of the other Obligations indefinitely).

 

24. No Lien Termination without Release. In recognition of the Purchaser's right to have its reasonable outside attorneys' fees and other actual and documented out-of-pocket expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of all Obligations by Seller, Purchaser shall not be required to record any terminations or satisfactions of any of Purchaser's liens on the Collateral unless and until Complete Termination has occurred. Seller understands that this provision constitutes a waiver of its rights under §9-513 of the UCC.

 

25. Conflict. Unless otherwise expressly stated in any other agreement between Purchaser and Seller, if a conflict exists between the provisions of this Agreement and the provisions of such other agreement, the provisions of this Agreement shall control.

 

26. Severability. In the event any one or more of the provisions contained in this Agreement is held to be invalid, illegal, or unenforceable in any respect, then such provision shall be ineffective only to the extent of such prohibition or invalidity, and the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

 

27. Expenses. In addition to those expenses set forth in Section 8 herein, Seller agrees to reimburse Purchaser the actual and documented amount of all out-of-pocket costs and expenses incurred and paid by Purchaser, including reasonable outside attorneys' fees and expenses, which Purchaser may incur (a) protecting, preserving or enforcing any lien, security or other right granted by Seller to Purchaser or arising under applicable law, whether or not suit is brought, including but not limited to the defense of any Avoidance Claims or the defense of Purchaser's lien priority; (b) for travel and reasonable outside attorneys' fees and expenses incurred in complying with any subpoena or other legal process in any way relating to Seller; and (c) for the actual amount of all costs and expenses, including reasonable outside attorneys' fees, which Purchaser may incur in enforcing this Agreement, or in connection with any federal or state insolvency proceeding commenced by or against Seller or any Payor, including those (i) arising out of an automatic stay, (ii) seeking dismissal or conversion of a bankruptcy proceeding or (iii) opposing confirmation of Seller's plan thereunder. All expenses will be subtracted from the Reserve Account and are payable by Seller upon demand by Purchaser. This provision shall survive termination of this Agreement.

 

28. Entire Agreement. This Agreement supersedes all prior or contemporaneous agreements and understandings between the Parties, verbal or written, express or implied, relating to the subject matter hereof. No promises of any kind have been made by Purchaser or any third party to induce Seller to execute this Agreement. No course of dealing, course of performance, or trade usage, and no parol evidence of any nature, shall be used to supplement or modify any terms of this Agreement.

 

29. Choice of Law. This Agreement shall be governed by, construed under, and enforced in accordance with the internal laws of the Chosen State.

 

30. Jury Trial Waiver. IN RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (a) ARISING HEREUNDER, OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

 
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31. Venue; Jurisdiction. The Parties agree that any suit, action, or proceeding arising out of the subject matter or the interpretation, performance, or breach of this Agreement, shall, if Purchaser so elects, be instituted in the Courts of Orange County, Florida (each an "Acceptable Forum"). Each Party agrees that the Acceptable Forums are convenient to it, and each Party irrevocably submits to the jurisdiction of the Acceptable Forums, irrevocably agrees to be bound by any judgment rendered in connection with this Agreement and waives any and all objections to jurisdiction or venue that it may have under the laws of the Acceptable Forums or otherwise in those courts in any such suit, action, or proceeding. Should such proceeding be initiated in any other forum, Seller waives any right to oppose any motion or application made by Purchaser as a consequence of such proceeding having been commenced in a forum other than an Acceptable Forum.

 

32. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were upon the same instrument. Delivery of an executed counterpart of the signature page to this Agreement by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement, and any Party delivering such an executed counterpart of the signature page to this Agreement by such means to any other Party shall thereafter also promptly deliver a manually executed counterpart of this Agreement to such other Party, provided that the failure to deliver such manually executed counterpart shall not affect the validity, enforceability, or binding effect of this Agreement.

 

33. Notice. All notices required to be given to any Party shall be deemed given upon the first to occur of (i) transmittal sent by commercial overnight carrier, (ii) transmittal by electronic means to a receiver under the control of such Party; or (iii) actual receipt by such Party or an employee or agent of such Party. Notices shall be sent to the following addresses, or to such other addresses as each such Party may in writing hereafter indicate:

 

 

PURCHASER:

Alterna Capital Solutions LLC

2420 Lakemont Ave, Suite 350

Orlando, FL 32814

President, Eugene Stanley Carpenter

Email: scarpenter@alternacs.com

 

 

 

 

SELLER:

BK Technologies, Inc.

7100 Technology Inc.

W. Melbourne, FL 32904

CFO, Scott A. Malmanger

Email: smalmanger@bktechnologies.com

 

 

 

 

 

RELM Communications, Inc.

7100 Technology Inc.

W. Melbourne, FL 32904

CFO, Scott A. Malmanger

Email: smalmanger@bktechnologies.com

 

 
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34. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

 

35. Assignment. Purchaser may assign its rights and delegate its duties hereunder. Upon such assignment, Seller shall be deemed to have attorned to the assignee, shall owe the same Obligations to such assignee and shall accept performance hereunder from the assignee as if such assignee were Purchaser.

 

36. Confidentiality and Nondisclosure. The Parties agree that the terms of this Agreement, all business methods and trade secrets, and any and all other records and information clearly and specifically identified by the applicable Party as confidential will be held in strict confidence and treated as the confidential property of the other Party. A Party will not, except in the due performance of its duties or the enforcement of its rights under this Agreement, disclose any of the foregoing to any person, unless specifically authorized to do so in writing by the other Party or unless required by law. The provisions of this Section shall survive the termination of this Agreement.

 

37. Time of the Essence. It is agreed that time is of the essence in all matters herein.

 

38. Service of Process. Seller agrees that Purchaser may effect service of process upon Seller by regular mail at the address set forth herein or at such other address as may be reflected in the records of Purchaser, or at the option of Purchaser by service upon Seller’s agent for the service of process.

 

39. Headings. The title of this Agreement and the subject headings of the sections and subsections of this Agreement are included for the purposes of convenience and shall not affect the construction of interpretation of any of its provisions.

 

40. Construction. This Agreement and all agreements relating to the subject matter hereof are the product of negotiation and preparation by and among each party and its respective attorneys and shall be construed accordingly.

 

 
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IN WITNESS WHEREOF the Parties hereto have affixed their hands and seals on the day and year first above written.

 

SELLER: BK Technologies, Inc.

 

 

 

 

By:

/s/ Scott A. Malmanger

 

Name:

Scott A. Malmanger

 

Title:

Chief Financial Officer

 

 

 

 

SELLER: RELM Communications, Inc.

 

 

 

 

By:

/s/ Scott A. Malmanger

 

Name:

Scott A. Malmanger

 

Title:

Chief Financial Officer

 

 

 

 

PURCHASER: Alterna Capital Solutions LLC

 

 

 

 

By:

/s/ Eugene Stanley Carpenter

 

Name:

Eugene Stanley Carpenter

 

Title:

President

 

 

 
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EXHIBIT 10.2

 

GUARANTY

 

THIS DOCUMENT CONTAINS A WAIVER OF TRIAL BY JURY

 

This GUARANTY dated as of November 22, 2022, is made by the Person(s) signing below (individually or collectively, “Guarantor”), in favor of ALTERNA CAPITAL SOLUTIONS LLC (“Creditor”).

 

FOR GOOD AND VALUABLE CONSIDERATION, and to induce Creditor to extend financial accommodations to Debtor, Guarantor agrees as follows:

 

1. DEFINITIONS.

 

1.1 All terms contained herein that are not specifically defined shall have the meaning provided in the Uniform Commercial Code.

 

1.2 The following terms shall have the following meanings:

 

1.2.1 “Acceptable Forums” – See Section 16.1 hereof.

 

1.2.2 “Agreement” – This guaranty, as amended.

 

1.2.3 “Bankruptcy Code” – Title 11 of the United States Code.

 

1.2.4 “Chosen State” –Florida.

 

1.2.5 “Credit Documents” –That certain Invoice Purchase and Security Agreement made by Debtor to the order of Creditor dated of essentially even date herewith among Guarantors and Creditor, all documents executed in connection therewith, and all amendments or renewals to or of any of the foregoing, or any other document evidencing Guaranteed Obligations.

 

1.2.6 “Creditor” – See Preamble.

 

1.2.7 “Debtor” – Each Guarantor.

 

1.2.8 “Guaranteed Obligations” – All present and future obligations of Debtor to Creditor, including but not limited to obligations arising out of the Credit Documents, including interest that, but for the filing of a petition under the Bankruptcy Code with respect to Debtor, would have accrued on any such obligations, and attorneys’ fees.

 

1.2.9 “Guarantor” – See Preamble.

 

1.2.10 “Party” – Creditor and/or Guarantor.

 

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2. GUARANTY.

 

2.1 Promise to Pay and Perform. Guarantor unconditionally and irrevocably guarantees to Creditor the prompt payment and performance of the Guaranteed Obligations, and agrees to pay same on demand, without regard to any reduction in the amount thereof in any insolvency proceeding of the Debtor, whether or not the Guaranteed Obligations are found to be invalid, illegal or unenforceable, this being a guaranty of payment and not a guaranty of collection.

 

2.2 Cumulative Obligations. The obligations hereunder are in addition to any other obligations of Guarantor under any other guaranties of the indebtedness or other obligations of Debtor or any other person given to Creditor. This Agreement shall not affect or invalidate any such other guaranties.

 

2.3 Continuing Obligation. This Agreement shall remain in full force and effect notwithstanding the fact that no Guaranteed Obligations may be outstanding.

 

2.4 Joint and Several Obligation; Independent Obligation. Guarantor is directly, jointly, and severally with all other guarantors of the Guaranteed Obligations liable to Creditor. The obligations of Guarantor hereunder are direct and primary and are independent of the obligations of Debtor or any other such guarantor,

 

2.5 Separate Actions. Creditor may bring a separate action against Guarantor irrespective of whether:

 

2.5.1 It brings an action against Debtor or any other guarantor, or

 

2.5.2 Creditor joins Debtor or any other guarantor in such action.

 

2.6 Election of Remedies. Guarantor’s liability hereunder shall not be contingent upon Creditor’s exercise of any remedies against Debtor or any other guarantor or the enforcement of any lien. Creditor’s release of Debtor or any other guarantor shall not release Guarantor.

 

3. COVENANTS.

 

3.1 Guarantor has adequate means to obtain all relevant information, on a continuing basis, concerning Debtor’s financial condition as well as all other circumstances that bear upon the risk of nonpayment of the Guaranteed Obligations. Guarantor bears the sole responsibility for being and keeping informed thereof, and relieves Creditor of any duty to disclose any present or future information relating thereto,

 

3.2 Guarantor shall, from time to time, at the expense of Guarantor, promptly execute and deliver all further documents and take all further action that may be necessary, or that Creditor may reasonably request, to enable Creditor to exercise and enforce its rights and remedies hereunder.

 

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4. PAYMENTS.

 

4.1 Nature and Application of Payments. Creditor may apply any payment with respect to the Guaranteed Obligations or any other amounts due hereunder in such order, as Creditor shall determine in its sole discretion, irrespective of any contrary instructions received from any other person.

 

4.2 Indefeasible Payment; Revival. If any portion of any payment to Creditor hereunder is set aside and repaid by Creditor after being made by Guarantor, the amount so set aside shall be revived as Guaranteed Obligations and Guarantor shall be liable for the amount Creditor is required to repay plus all costs and expenses (including attorneys’ fees, costs, and expenses) incurred by Creditor in connection therewith.

 

4.3 ACH Authorization. In order to satisfy any of the Guaranteed Obligations, Guarantor authorizes Creditor to initiate electronic debit or credit entries through the ACH system to any deposit account maintained by Guarantor.

 

5. REPRESENTATIONS AND WARRANTIES.

 

5.1 Guarantor represents and warrants as follows (which representations and warranties shall be true, correct, and complete at all times):

 

5.1.1 This Agreement is not made by Guarantor in reliance on any representation or warranty, express or implied, by Creditor concerning the financial condition of Debtor or the nature and extent of any security for the Guaranteed Obligations,

 

5.1.2 No promises have been made to Guarantor by any person to induce Guarantor to enter into this Agreement.

 

5.1.3 Guarantor is informed of the financial condition of Debtor and of all other circumstances that a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations.

 

5.1.4 The consideration received by Guarantor in connection with this Agreement is adequate and satisfactory in all respects, and represents reasonably equivalent value, to support this Agreement and Guarantor’s obligations hereunder.

 

6. WAIVERS.

 

6.1 Guarantor waives:

 

6.1.1 ALL SURETYSHIP DEFENSES, WHETHER ARISING IN EQUITY, BY CONTRACT, STATUTE OR BY OPERATION OF LAW.

 

6.1.2 Notice of (a) any adverse change in the financial condition of any Debtor, (b) any default in the performance of the Guaranteed Obligations; and (c) any other notice to which Guarantor might be entitled.

 

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6.1.3 Any defense or claim arising out of (a) the release of any collateral securing the Guaranteed Obligations or (b) any fact that may increase Guarantor’s risk hereunder.

 

6.1.4 Any claim of usury.

 

6.1.5 Any other defense arising because of any disability or other defense (other than the defense that the Guaranteed Obligations have been fully paid) of Debtor including any defense arising from any statute of limitations.

 

6.1.6 Any defense based on the invalidity, irregularity, or unenforceability of all or any part of the Guaranteed Obligations or any other circumstance that might constitute a defense of a guarantor.

 

6.1.7 Any claim or defense based on (a) the validity, legality or enforceability in whole or in part of the Guaranteed Obligations, (b) any assignment, amendment, transfer, modification, renewal, waiver, compromise, addition or supplement relating to Guaranteed Obligations, (c) any setoff, counterclaim or any circumstances which might constitute a defense or discharge of Guarantor.

 

6.1.8 Any lack of power or authority of Debtor.

 

6.1.9 Any defense to payment hereunder resulting from Creditor releasing the Debtor or any other obligor owing the Guaranteed Obligations from their obligation to pay the Guaranteed Obligations, as well as Creditor’s failure to give Guarantor notice thereof.

 

6.1.10 All Guarantor’s rights of reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to Guarantor.

 

6.1.11 All rights and defenses arising out of an election of remedies, such as a nonjudicial foreclosure with respect to security for Guaranteed Obligations, has destroyed Guarantor’s rights of subrogation and reimbursement against the Debtor.

 

7. ACKNOWLEDGEMENTS AND AGREEMENTS.

 

7.1 Modifications to Credit Documents and Guaranteed Obligations. Without notice to Guarantor and without affecting or impairing the obligations of Guarantor hereunder, Creditor may, compromise or settle, extend the period of duration or the time for the payment, or discharge the performance of, or may refuse to, or otherwise not enforce, or may, release any obligor of the Guaranteed Obligations or may grant other indulgences to Debtor in respect thereof, or may amend the Credit Documents.

 

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7.2 Subordination.

 

7.2.1 Guarantor subordinates any present and future indebtedness of Debtor to Guarantor (“Guarantor Indebtedness”) to the payment of the Guaranteed Obligations, and shall not accept any payment with respect thereto until the Guaranteed Obligations have been fully paid.

 

7.2.2 Any payment received by Guarantor in respect of Guarantor Indebtedness shall be held by Guarantor as trustee for Creditor, and promptly paid over to Creditor on account of the Guaranteed Obligations without reducing the liability of the Guarantor hereunder.

 

7.2.3 Upon Creditor’s request, Guarantor shall:

 

(a) Mark any notes evidencing the indebtedness of Debtor to Guarantor with a legend that the same are subject to this Agreement, or

 

(b) Deliver the notes to Creditor for safekeeping.

 

7.3 All notices shall be effective upon:

 

7.3.1 The sending of an email to one of the email addresses below or

 

7.3.2 Delivery to a recognized overnight delivery service of a properly addressed notice, delivery prepaid, with instructions to make delivery on the next business day.

 

7.4 The addresses of the Parties are as set forth below or as may otherwise be specified from time to time in a writing sent by one Party to the other in accordance with the provisions hereof.

 

BK Technologies Inc.

 

Address:

7100 Technology Inc.

 

W. Melbourne, FL 32904

Attention:

Scott A. Malmanger

Email address:

smalmanger@bktechnologies.com

 

 

RELM Communications, Inc.

 

Address:

7100 Technology Inc.

 

W. Melbourne, FL 32904

 

Attention:

Scott A. Malmanger

Email address:

smalmanger@bktechnologies.com

 

Page 5 of 9

 

 

 

 

Creditor

 

Address:

2420 Lakemont Ave, Suite 350

 

Orlando, FL 32814222

Attention:

Eugene Stanley Carpenter

Email address:

SCarpenter@AlternaCS.com

 

8. AMENDMENT AND WAIVER. 

 

8.1 Only a writing signed by all Parties hereto may amend this Agreement. No failure or delay in exercising any right hereunder shall impair any such right that Creditor may have, nor shall any waiver by Creditor hereunder be deemed a waiver of any default or breach subsequently occurring. Creditor’s rights and remedies herein are cumulative and not exclusive of each other or of any rights or remedies that Creditor would otherwise have.

 

9. ATTORNEY’S FEES.

 

9.1 In the event that either Party finds it necessary to retain counsel in connection with any contract claim regarding the interpretation, defense, or enforcement of this Agreement, the prevailing Party shall recover its reasonable attorney’s fees and expenses from the unsuccessful Party.

 

9.2 It shall be presumed (subject to rebuttal only by the introduction of competent evidence to the contrary) that the amount recoverable is the amount billed to the prevailing Party by its counsel and that such amount will be reasonable if based on the billing rates charged to the prevailing Party by its counsel in similar matters.

 

9.3 In the event that Guarantor asserts a claim against Creditor hereunder, it shall do so in writing prior to and as a condition of the commencement of any litigation by Guarantor, setting forth the specific amount of Guarantor’s claim against Creditor (the “Damage Claim”). In the event that litigation results in a judgment against Creditor of less the Damage Claim, the court must find that Creditor was the prevailing Party for the purposes of Section 9.1.

 

9.4 In the event that either Party finds it necessary to retain counsel in connection with any non-contractual claim against the other Party (such as a tort claim), Guarantor shall pay the reasonable attorney’s fees incurred by Creditor in connection therewith.

 

10. COSTS AND EXPENSES. 

 

10.1 Guarantor agrees to reimburse Creditor on demand for the actual costs of photocopying (which, if performed by Creditor’s employees, shall be at the rate of $.10/page), travel, and attorneys’ fees and expenses incurred in complying with any subpoena or other legal process attendant to any litigation in which Guarantor is a party.

 

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11. SUCCESSORS AND ASSIGNS.

 

11.1 This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

 

11.2 Creditor may assign its rights and delegate its duties hereunder in connection with an assignment of the Guaranteed Obligations. Upon such assignment, Guarantor shall:

 

11.2.1 Be deemed to have attorned to the assignee;

 

11.2.2 Owe the same Guaranteed Obligations to the assignee, and

 

11.3 Accept performance from the assignee as if the assignee were Creditor.

 

12. ENTIRE AGREEMENT.

 

12.1 No one has made promises to Guarantor as an inducement to execute this Agreement. Guarantor shall not refer to any course of dealing, course of performance or trade usage or parole evidence to supplement or modify any terms of this Agreement.

 

13. REVOCATION.

 

13.1 Guarantor waives any right to revoke this Agreement.

 

13.2 If, contrary to the express intent of this Agreement, any such revocation is attempted by Guarantor:

 

13.2.1 It shall not be effective until thirty days after written notice thereof has been actually received by any officer of Creditor;

 

13.2.2 It shall not apply to any Guaranteed Obligations in existence on such date (including any subsequent continuation, extension, or renewal thereof);

 

13.2.3 It shall not apply to any Guaranteed Obligations made or created after such date pursuant to a commitment of Creditor which was, or is believed in good faith by Creditor to be, in existence on the date of such revocation;

 

13.2.4 No payment by any other surety of Debtor, or from any other source, prior to the date of such revocation shall reduce the obligations of Guarantor hereunder.

 

14. CHOICE OF LAW.

 

14.1 The laws of the Chosen State shall govern this Agreement.

 

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15. WAIVER OF TRIAL BY JURY.

 

15.1 IN RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING HEREUNDER, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

16. VENUE; JURISDICTION.

 

16.1 Any suit, action or proceeding arising hereunder, or the interpretation, performance or breach hereof, including an action in tort, shall, if Creditor so elects, be instituted in (the “Acceptable Forums”):

 

16.1.1 The United States District Court for the District in which Creditor’s chief executive office is located (“Controlling City”) or

 

16.1.2 Any court sitting in the state in which the Controlling City is located.

 

16.2 Guarantor agrees that the Acceptable Forums are convenient to it, and irrevocably submits to the jurisdiction of the Acceptable Forums and waives all objections to jurisdiction or venue.

 

16.3 Guarantor waives any right to oppose any motion or application made by Creditor to transfer such proceeding to an Acceptable Forum in the event that Guarantor commences such proceeding in any other forum.

 

17. SERVICE OF PROCESS.

 

17.1 Guarantor agrees that Creditor may effect service of process upon Guarantor by regular mail at the address set forth herein or at such other address as may be reflected in the records of Creditor, or at the option of Creditor by service upon Guarantor’s agent for the service of process.

 

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IN WITNESS WHEREOF, Guarantor has executed this Agreement as of the date first written above.

 

 

BK Technologies, Inc.

 

 

 

 

 

 

By:

/s/ Scott A. Malmanger

 

 

Scott A. Malmanger, Chief Financial Officer

 

 

 

 

 

RELM Communications, Inc.

 

 

 

 

 

By:

 /s/ Scott A. Malmanger

 

 

Scott A. Malmanger, Chief Financial Officer

 

 

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EXHIBIT 10.3

 

 

COMMERCIAL GUARANTY

(CORPORATE GUARANTOR)

 

IN CONSIDERATION of the sum of One Dollar ($1.00), cash in hand paid, and other good and valuable consideration, as well as for the purpose of seeking to induce Alterna Capital Solutions LLC having a principal office at 2420 Lakemont Ave, Suite 350, Orlando, FL 32814 (hereinafter termed the "ACS"), to extend or continue to extend financial accommodations to BK Technologies, Inc., a Nevada corporation and RELM Communications, Inc., a Florida Corporation (individually and collectively, the "Principal"), BK Technologies Corporation, a Nevada corporation (hereinafter termed the "Guarantor") does hereby absolutely and unconditionally guarantee to said ACS and to its endorsers, transferees, successors or assigns of either this guaranty or any of the obligations secured hereunder, the prompt payment and performance, according to their respective terms, of all Liabilities (as hereinafter defined) of the Principal to the ACS.

 

1. The term "Liability" or "Liabilities" as used herein shall include, without limitation: (a) all of the obligations of the Guarantor hereunder, and (b) all present and future liabilities and obligations of Principal to ACS, whether or not evidenced by any note or other instrument, whether direct or indirect, absolute or contingent, due or to become due, joint or several, primary or secondary, liquidated or unliquidated, secured or unsecured, original or renewed or extended, whether arising before, during, or after the commencement of any bankruptcy case in which Principal is a Debtor, including but not limited to any obligations arising pursuant to letters of credit or acceptance transactions or any other financial accommodations including, but not limited to, those arising directly or indirectly out of or in connection with the Credit Documents (hereinafter defined), and including such obligations and liabilities arising under successive transactions renewing, increasing, extending, or continuing any of the foregoing, changing fees, charges or other terms thereof, or creating new or additional obligations and liabilities after prior obligations, or liabilities have been in whole or in part satisfied, and further including all such obligations and liabilities however arising, whether heretofore, now, or hereafter made, incurred, or created, whether voluntarily or involuntarily, whether secured or unsecured (and if secured, regardless of the nature or extent of the security), regardless of whether Principal may be liable individually or jointly with others. The term “Credit Documents” means any and all present or future agreements and the documents evidencing any extension of credit between, inter alia, Principal and ACS, all documents executed in connection therewith, and all permitted amendments or renewals to or of any of the foregoing, or any other document evidencing a Liability. This guaranty is additional and supplemental to any and all other guaranties heretofore and hereafter executed by any Guarantor for benefit of ACS, whether or not relating to the Liabilities, and shall not supersede or be superseded by any other document or guaranty executed by any Guarantor or any other person or entity for any purpose.

 

2. The Guarantor waives notice of acceptance of this guaranty and notice of any Liability to which it may apply, and waives presentment, demand for payment, protest, notice of dishonor or nonpayment of any Liabilities and any suit or the taking of other action by ACS against and any other notice to any party liable thereon (including the Guarantor). The undersigned does irrevocably consent and agree that the ACS may obtain credit reports on the Guarantor, the Principal, and any other guarantor at any time, at ACS’s sole option and expense, for any reason, including but not limited to determining whether there has been an adverse change in the financial condition of the Guarantor, the Principal, or any guarantor.

 

 
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3. ACS may at any time and from time to time without notice to the Guarantor (except as required by law), without incurring responsibility to the Guarantor, without impairing, releasing or otherwise affecting the obligations of the Guarantor, in whole or in part, and without the endorsement or execution by the Guarantor of any additional consent, waiver or guaranty (a) change the manner, place or terms of payment, and change or extend the time of or renew or alter, any Liability or installment thereof, or any security therefor, and may extend additional financial accommodations to Principal, with or without security, thereby creating new Liabilities, the payment of which shall be guaranteed hereunder, and the guaranty herein made shall apply to the Liabilities as so changed, extended, renewed, increased or otherwise altered; (b) sell, exchange, release, surrender, realize upon or otherwise deal with in any manner and in any order any property at any time pledged or mortgaged to secure the Liabilities and any offset thereagainst; (c) exercise or refrain from exercising any rights against Principal or others (including the Guarantor) or act or refrain from acting in any other manner; (d) settle or compromise any Liability or any security therefor and may subordinate the payment of all or any part thereof to the payment of any Liability (whether or not due) of Principal to creditors of Principal other than ACS and the Guarantor; (e) apply any sums from any sources to any Liability without regard to any Liabilities remaining unpaid, and (f) take or omit to take any other action with respect to the Liabilities, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Liabilities pursuant to the terms hereof; it is the unambiguous and unequivocal intention of Guarantor that the Guarantor shall be obligated to pay the Liabilities when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or un-contemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Liabilities and that no act or omission of any kind by the ACS shall affect or impair this guaranty and the ACS shall have no duties whatsoever to the Guarantor.

 

4. No invalidity, irregularity or unenforceability of all or any part of the Liabilities or of any security therefor shall affect, impair or be a defense to this guaranty, and this guaranty is a primary and absolute obligation of the Guarantor.

 

5. This guaranty is a continuing one, and all Liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. The death or insanity of any Guarantor shall have the effect of a notice of termination only after the ACS has actually received written notice from such Guarantor's legal representative; provided, however, that no notice of such death or insanity shall affect, in any manner, rights arising under this guaranty with respect to Liabilities that shall have been created, contracted, assumed or incurred prior to receipt by ACS of written notice of such death or insanity, or Liabilities that shall have been created, contracted for, assumed or incurred after receipt of such written notice pursuant to any agreement entered into by ACS prior to receipt of such notice, and the estate of such Guarantor shall then remain liable for any such Liabilities, and the sole effect of such notice of such death or insanity shall be to exclude (as to that Guarantor only) from this guaranty Liabilities thereafter arising that are unconnected with Liabilities theretofore arising or transactions theretofore entered into. The obligations of any other Guarantor shall remain unaffected by the death or insanity of any one or more Guarantors.

 

6. All notices provided to be given to ACS herein shall be sent by registered or certified mail, return receipt requested, to the address shown in the preamble to this agreement.

 

7. Any and all rights and claims of the Guarantor against Principal or any of its property shall be subordinate and subject in right of payment to the prior payment in full of all Liabilities.

 

 
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8.

The Guarantor shall be in default hereunder upon: (a) non-payment by the Guarantor of any Liability when due and payable; (b) failure of the Guarantor to perform any agreement creating or otherwise affecting any Liability or any provision hereof, or to pay in full, when due, any other obligation of Principal or the Guarantor; (c) the dissolution, termination of existence, or insolvency of Principal or the Guarantor, appointment of a receiver of any part of the property of Principal or of any material part of the property of Guarantor, assignment for the benefit of creditors or the commencement of any case or proceedings in bankruptcy or insolvency by Principal or by the Guarantor or the failure to timely contest to or to dismiss within sixty (60) days of filing, any involuntary case or proceeding seeking the adjudication of Principal, or the Guarantor as bankrupt or insolvent; (d) the entry of a final, unappealable judgment having a material adverse effect against Principal or the Guarantor; (e) the taking of possession of any substantial part of the property of Principal or the Guarantor at the instance of any governmental authority; (f) the merger, consolidation or reorganization of Principal or the Guarantor; (g) the determination by ACS that a material adverse change has occurred in the financial condition of Principal or the Guarantor from the conditions set forth in the most recent financial statement of any such party heretofore furnished to ACS or from the condition of such party as heretofore most recently disclosed to ACS in any manner; (h) falsity in any material respect of, or any material omission in any representation or statement made to ACS by or on behalf of Principal or the Guarantor in connection with any Liability or other obligation of such parties, or (i) the occurrence of Default or Event of Default under any of the Credit Documents.

 

9. Upon the occurrence and during the continuance of any default hereunder, ACS shall have all of the remedies available to it under all applicable law. Without limiting the generality of the foregoing, ACS may, at its option and without notice or demand: (a) declare any Liability accelerated and due and payable at once, and (b) take possession of any collateral security wherever located, and sell, resell, assign, transfer and deliver all or any part of said property of Principal , at any public or private sale, for cash or on credit, and upon any such sale, ACS, unless prohibited by law the provisions of which cannot be waived, may purchase all or any part of said property to be sold, free from and discharged of all trusts, claims, right of redemption and equities of the Principal whatsoever;. Until all of the obligations of Principal to ACS (other than obligations under the Credit Documents which survive the payment in full of the other obligations indefinitely) have been paid and performed in full, Guarantor shall have not exercise any right of subrogation to ACS against Principal, and Guarantor hereby waives any rights to enforce any remedy which ACS may have against Principal and any rights to participate in any security for the obligations to ACS.

 

10. Guarantor shall pay all actual and documented out-of-pocket costs of collection and reasonable outside attorneys' fees, including reasonable outside attorneys' fees of any suit out of court, in trial, on appeal, in any bankruptcy cases, proceedings, any bankruptcy advocacy appeals and bankruptcy appeals or otherwise, incurred or paid by ACS in enforcing the payment of any Liability or enforcing or preserving any right or interest of ACS hereunder, including the collection, sale or delivery of any collateral security from time to time pledged hereunder, and after deducting such fees, costs and expenses from the proceeds of sale or collection, ACS may apply any residue to pay any of the Liabilities and the Guarantor shall continue to be liable for any deficiency with interest, which shall remain a Liability.

 

11. If claim is ever made upon ACS for repayment or recovery of any amount or amounts received by ACS in payment or on account of any of the Liabilities and ACS repays all or part of said amount by reason of any judgment, decree or order of any court or administrative body having jurisdiction over ACS or any of its property or any settlement or compromise of any such claim effected by ACS with any such claimant (including Principal), then the Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon the Guarantor, notwithstanding any revocation hereof or the cancellation of any instrument evidencing any Liability, and the Guarantor shall be and remain liable to ACS hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by ACS.

 

 
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12.

Any acknowledgment, new promise, payment of principal or interest, or otherwise, whether by Principal or others (including the Guarantor), with respect to any of the Liabilities shall, if the statute of limitations in favor of the Guarantor against ACS shall have commenced to run, toll the running of such statute of limitations and, if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations.

 

13. ACS shall not be bound to take any steps necessary to preserve any rights in any of the property of the Guarantor against prior parties who may be liable in connection therewith, and the Guarantor hereby agrees to take any such steps. ACS may, nevertheless, at any time after and during the continuance of a default (a) take any action it may deem appropriate for the care or preservation of such property or of any rights of the Guarantor or ACS therein; (b) demand, sue for, collect or receive any money or property at any time due, payable or receivable on account of or in exchange for any property of the Guarantor; (c) compromise and settle with any person liable on such property, or (d) extend the time of payment or otherwise change the terms thereof as to any party liable thereon, all without notice to, without incurring responsibility to, and without affecting any of the obligations of the Guarantor.

 

14. No delay on the part of ACS in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute a waiver thereof. No waiver of any of its rights hereunder, and no modification or amendment of this guaranty, shall be deemed to be made by ACS unless the same shall be in writing, duly signed on behalf of ACS, and each such waiver, if any, shall apply only with respect to the specific instance involved, and shall in no way impair the rights of ACS or the obligations of the Guarantor to ACS in any other respect at any other time.

 

15. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. ACS shall not be required to proceed first against Principal, or any other person, firm or corporation, whether primarily or secondarily liable, or against any collateral security held by it, before resorting to the Guarantor for payment, and the Guarantor shall not be entitled to assert as a defense to the enforceability of the guaranty set forth herein any defense of Principal with respect to any Liability.

 

16. Guarantor hereby subordinates any and all indebtedness of Principal now or hereafter owed to Guarantor to all indebtedness of Principal to ACS, and agrees with ACS that Guarantor shall not demand or accept any payment of principal or interest from Principal, shall not claim any offset or other reduction of Guarantor's obligations hereunder because of any such indebtedness and shall not take any action to obtain any of the security described in and encumbered by the security instruments; provided, however, that, if ACS so requests, such indebtedness shall be collected, enforced and received by Guarantor as trustee for ACS and be paid over to ACS on account of the indebtedness of Principal to ACS, but without reducing or affecting in any manner the Liability of Guarantor under the other provisions of this Guaranty.

 

17. Each Guarantor warrants and represents to ACS that all financial statements heretofore delivered by said Guarantor to ACS are true and correct in all respects as of the date hereof.

 

a. Guarantor agrees to furnish to ACS (i) within ninety (90) calendar days after the close of its fiscal year, a copy of its annual report setting forth the balance sheet, income and surplus account, and any changes in financial condition as of the close of each fiscal year (if such financial statements were audited in previous years, the financial statement is to be audited by and carry the opinion of an independent certified public accounting firm acceptable to ACS); (ii) within forty-five (45) calendar days after close of each quarter a financial statement of such quarter, the accuracy of which is certified by its chief financial officer; (iii) provide to the ACS copies of its Federal Income Tax Returns, including all schedules, annually, within thirty (30) calendar days of filing with the Internal Revenue Service; and (iv) promptly provide to the ACS such other financial information, statements and reports as ACS may request from time to time.

 

 
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b. The Guarantors shall furnish ACS, upon request, properly completed and executed attestation forms, using ACS’s attestation form or a form approved by ACS in its sole discretion, certifying their personal and other financial statements to ACS all of which must be acceptable to the ACS in its sole discretion.

 

c. Guarantor shall promptly, from time to time, furnish ACS with such other financial reports and data as ACS may reasonably request.

 

d. ACS shall have no duty to pass on to Guarantor at any time its knowledge about the financial affairs or condition of Principal or of any other Guarantor of the Liabilities. Guarantor warrants that it has independent means to keep itself informed about these matters.

 

18. This guaranty may not be changed orally or by implication, and no obligation of Guarantor can be released or waived by ACS or any officer or agent of ACS, except by a writing, signed by a duly authorized officer of ACS. This guaranty shall be irrevocable by Guarantor until all indebtedness guaranteed hereby has been completely repaid and all obligations and undertakings of Principal under, by reason of, or pursuant the Credit Documents have been completely performed.

 

19. If from any circumstances whatsoever fulfillment of any provisions of this guaranty, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by any applicable usury statute or any other applicable law as of the date hereof, with regard to obligations of like character and amount, then ipso facto the obligation to be fulfilled shall be reduced to the limit of such validity, so that in no event shall any exaction be possible under this guaranty that is in excess of the limit of such validity as of the date hereof, but such obligation shall be fulfilled to the limit of such validity. The provisions of this paragraph shall control over every other provision of this guaranty.

 

20. Guarantor and any other guarantors of the Liabilities, whether executing this guaranty or a separate guaranty, shall be jointly and severally liable for payment and performance of the Liabilities. The failure of any other person required by ACS to guaranty the Liabilities to sign this guaranty or a separate guaranty shall not release or affect the obligations or liability of the Guarantor. If more than one party is a guarantor of the Liabilities, whether executing this guaranty or a separate guaranty, the term "Guarantor" shall include each as well as all of them. An executed facsimile (i.e., the transmission by any signatory via facsimile machine, by email or other electronic media of his or her signature on an original of any copy of this Guaranty) shall be an acceptable form of acceptance of this Guaranty. This Guaranty may be executed by the parties hereto individually or in combination, in any number of identical counterparts, and the signatures of all signatories hereto need not be contained on any one single counterpart hereof; that, if so executed, each of such counterparts shall be deemed an original for all purposes and all such counterparts shall, collectively, constitute one guaranty (but in making proof of this Guaranty it shall not be necessary to produce or account for more than one such counterpart); that a facsimile signature (i.e., the transmission by any signatory via facsimile machine, by email or other electronic media of his or her signature on an original of any copy of this guaranty) shall be deemed to be the delivery by such signatory of his or her original signature hereon; and that, if desired, the signature pages from separately executed original counterparts of this guaranty may be combined to form one or more fully executed original counterparts. ACS is authorized to maintain, store and otherwise retain this Guaranty in its original, inscribed tangible form or a record thereof in an electronic medium or other non-tangible medium which permits such record to be retrieved in perceivable forms and such retrieved form shall be deemed a duplicate original.

 

 
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21. The term "Guarantor" wherever used herein shall mean the Guarantor or any one or more of them. Anyone executing this guaranty shall be bound by the terms hereof without regard to execution of this guaranty or of any other guaranty by anyone else. This guaranty is binding upon the Guarantor, his, their, or its executors, administrators, successors or assigns, and shall inure to the benefit of ACS, its successors, endorsees or assigns. This Guaranty shall in no event be impaired by any change which may arise by reason of the death of Principal or Guarantor, if individuals, or by reason of the dissolution of Principal or Guarantor, if Principal or Guarantor is a corporation or partnership.

 

22. Notwithstanding anything to the contrary in this guaranty, the Guarantor hereby irrevocably waives all rights it may have at law or in equity (including, without limitation, any law subrogating the Guarantor to the rights of the ACS) to seek contribution, indemnification, or any other form of reimbursement from the Principal, or any other person now or hereafter primarily liable for any obligation of the Principal to the ACS, for any disbursement made by the Guarantor under or in connection with this guarantee or otherwise.

 

23. This agreement has been delivered in the State of Florida and shall be construed in accordance with the laws of Florida (without giving effect to Florida's principles of conflicts of law), and the laws of the United States applicable to transactions in such state. Wherever possible, each provision of this agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this agreement. To the extent permitted by applicable law, the Guarantor hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect. Guarantor, whether or not a Florida resident, hereby waives any plea or claim of lack of personal jurisdiction or improper venue in any action, suit or proceeding brought upon to enforce this Guaranty or the Liabilities. The Guarantor specifically authorizes any such action to be instituted and prosecuted in any Circuit Court in Florida, or United States District Court of Florida, at the election of ACS, where venue would lie and be proper against any Principal.

 

24. GUARANTOR AND ACS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ACS MAKING THE LOAN OR EXTENSION OF CREDIT EVIDENCED BY THIS AGREEMENT.

 

Dated effective this 22nd day of November 2022:

 

GUARANTOR(s)

 

 

BK Technologies Corporation

 

 

 

 

By:

/s/ Scott A. Malmanger

 

Print Name: Scott A. Malmanger

 

As Its: Chief Financial Officer

 

 

 
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