170530-V16
  Exhibit 10.2

 
 
[bkti_ex102000.jpg]
 
Line of Credit Note
 
 
$5,000,000.00
 
Date: January 13, 2020

 
THIS NOTE IS NOT SECURED BY REAL ESTATE LOCATED IN THE STATE OF FLORIDA AND WAS
EXECUTED OR DELIVERED IN THE STATE OF FLORIDA:
 
FLORIDA DOCUMENTARY STAMP TAX IN THE AMOUNT OF $2,450.00 HAS BEEN PAID ON OR
WILL BE PAID DIRECTLY TO THE DEPARTMENT OF REVENUE, CERTIFICATE OF REGISTRATION
NO. 78-8015377427-3.
 
Promise to Pay. On or before January 31, 2021, for value received, BK
Technologies, Inc. (the "Borrower") promises to pay to JPMorgan Chase Bank,
N.A., whose address is 450 S Orange Ave, Floor 10, Orlando, FL 32801-3383 (the
"Bank") or order, in lawful money of the United States of America, the sum of
Five Million and 00/100 Dollars ($5,000,000.00) or so much thereof as may be
advanced and outstanding, plus interest on the unpaid principal balance computed
on the basis of the actual number of days elapsed in a year of 360 days at the
"Adjusted LIBOR Rate" (the "Note Rate") and at the rate of 3.00% Per Annum above
the Note Rate, at the Bank's option, upon the occurrence of any default under
this Note, whether or not the Bank elects to accelerate the maturity of this
Note, from the date such increased rate is imposed by the Bank.
 
Definitions. As used in this Note, the following terms have the following
respective meanings:
 
"Adjusted LIBOR Rate" means, with respect to the relevant Interest Period, the
sum of (i) the Applicable Margin plus (ii) (a) the LIBOR Rate applicable to such
Interest Period multiplied by (b) the Statutory Reserve Rate.
 
"Applicable Margin" means 1.90% Per Annum.
 
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that the term "Business Day" shall also exclude any day
on which banks are not open for general business in London.
 
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
 
"Interest Period" means each consecutive one month period, the first of which
shall commence on the date of this Note, ending on the day which corresponds
numerically to such date one (1) month thereafter, provided, however, that if
there is no such numerically corresponding day in such first succeeding month,
such Interest Period shall end on the last Business Day of such first succeeding
month. If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.
 
"LIBOR Rate" means with respect to any LIBOR advance for any Interest Period,
the London interbank offered rate ("LIBOR") as administered by ICE Benchmark
Administration (or any other person that takes over the administration of such
rate for Dollars, the "IBA") for a period equal in length to such Interest
Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that
displays such rate (or, in the event such rate does not appear on a Reuters page
or screen, on any successor or substitute page on such screen that displays such
rate, or on the appropriate page of such other information service that
publishes such rate from time to time as shall be selected by the Bank in its
reasonable discretion; in each case, the "LIBOR Screen Rate") at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period; provided that, if any LIBOR Screen Rate shall be less than
zero, such rate shall be deemed to be zero for the purposes of this Note. If no
LIBOR Screen Rate is available to the Bank, the applicable LIBOR Rate for the
relevant Interest Period shall instead be the rate determined by the Bank to be
the rate at which the Bank offers to place U.S. dollar deposits having a
maturity equal to such Interest Period with first-class banks in the London
interbank market at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period.
 
LIBOR is intended to represent the rate at which contributing banks may obtain
short-term borrowings from each other in the London interbank market. In July
2017, the U.K. Financial Conduct Authority announced that, after the end of
2021, it would no longer persuade or compel contributing banks to make rate
submissions to the IBA for purposes of the IBA setting LIBOR. As a result, it is
possible that commencing in 2022, LIBOR may no longer be available or deemed an
appropriate reference rate upon which to determine the interest rate on LIBOR
Rate advances. In light of this eventuality, public and private sector industry
initiatives are currently underway to identify new or alternative reference
rates to be used in place of LIBOR. In the event LIBOR is no longer available
(or in certain other circumstances), the "Illegality/Alternate Rate of Interest"
provision below provides a mechanism for determining an alternative rate of
interest. The Bank will notify the Borrower in advance of any change to the
reference rate upon which the interest rate on LIBOR Rate advances is based.
However, the Bank does not warrant or accept any responsibility for, and shall
not have any liability with respect to, the administration, submission or any
other matter related to LIBOR or other rates in the definition of "LIBOR Rate"
or with respect to any alternative, successor rate thereto, or replacement rate
thereof, including without limitation, whether the composition or
characteristics of any such alternative, successor or replacement reference rate
will be similar to, or produce the same value or economic equivalence of, the
LIBOR Rate or have the same volume or liquidity as did LIBOR prior to its
discontinuance or unavailability.
 

 
"Per Annum" means for a year deemed to be comprised of 360 days.
 
"Prime Rate" means the rate of interest last quoted by The Wall Street Journal
as the "Prime Rate" in the U.S. or, if The Wall Street Journal ceases to quote
such rate, the highest per annum interest rate published by the Federal Reserve
Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest
Rates) as the "bank prime loan" rate or, if such rate is no longer quoted
therein, any similar rate quoted therein (as determined by the Bank) or any
similar release by the Federal Reserve Board (as determined by the Bank). Each
change in the Prime Rate shall be effective from and including the date such
change is publicly announced or quoted as being effective.
 
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) established by the
Federal Reserve Board to which the Bank is subject with respect to the Adjusted
LIBOR Rate, for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Federal Reserve Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D of the
Federal Reserve Board. LIBOR Rate advances shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to the Bank under such Regulation D of the Federal Reserve
Board or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
 
Illegality/Alternate Rate of Interest. If:
 
(i)
any applicable domestic or foreign law, treaty, rule or regulation now or later
in effect (whether or not it now applies to the Bank) or the interpretation or
administration thereof by a governmental authority charged with such
interpretation or administration, or compliance by the Bank with any guideline,
request or directive of such an authority (whether or not having the force of
law), shall make it unlawful or impossible for the Bank to maintain or fund the
advances evidenced by this Note, or
 
(ii)
the Bank determines that quotations of interest rates for the relevant deposits
referred to in the definition of Adjusted LIBOR Rate are not being provided for
purposes of determining the interest rate on the advances evidenced by this
Note, or
 
(iii)
the Bank determines that the relevant interest rates referred to in the
definition of Adjusted LIBOR Rate do not accurately cover the cost to the Bank
of making funding or maintaining the advances evidenced by this Note,
 
then, upon notice of such circumstances from the Bank to the Borrower: (a) the
obligation of the Bank to make advances shall be suspended until the Bank
notifies the Borrower that the circumstances giving rise to the suspension no
longer exists, and (b) subject to the terms and conditions of this Note and the
other Related Documents, the entire outstanding balance of any advance shall be
replaced with an advance bearing interest at the greater of (x) Prime Rate and
(y) 2.50% (the "Interim Alternate Rate"), and the Borrower may request advances
upon this Note bearing interest at the Interim Alternate Rate.
 
In no event shall the interest rate exceed the maximum rate allowed by law. Any
interest payment that would for any reason be unlawful under applicable law
shall be applied to principal.
 
Interest will be computed on the unpaid principal balance from the date of each
borrowing.
 
Interest Payments. Until maturity, the Borrower will pay consecutive monthly
installments of interest only commencing February 1, 2020.
 
The Borrower shall make all payments on this Note and the other Related
Documents, without setoff, deduction, or counterclaim, to the Bank at the Bank's
address above or at such other place as the Bank may designate in writing. If
any payment of principal or interest on this Note shall become due on a day that
is not a Business Day, the payment will be made on the next succeeding Business
Day. Payments shall be allocated among principal, interest and fees at the
discretion of the Bank unless otherwise agreed or required by applicable law.
Acceptance by the Bank of any payment that is less than the payment due at that
time shall not constitute a waiver of the Bank's right to receive payment in
full at that time or any other time.
 
2

 
 
Authorization for Direct Payments (ACH Debits). To effectuate any payment due
under this Note or under any other Related Documents, the Borrower hereby
authorizes the Bank to initiate debit entries to Account Number
______________________________ at the Bank and to debit the same to such
account. This authorization to initiate debit entries shall remain in full force
and effect until the Bank has received written notification of its termination
in such time and in such manner as to afford the Bank a reasonable opportunity
to act on it. The Borrower represents that the Borrower is and will be the owner
of all funds in such account. The Borrower acknowledges: (1) that such debit
entries may cause an overdraft of such account which may result in the Bank’s
refusal to honor items drawn on such account until adequate deposits are made to
such account; (2) that the Bank is under no duty or obligation to initiate any
debit entry for any purpose; and (3) that if a debit is not made because the
above-referenced account does not have a sufficient available balance, or
otherwise, the payment may be late or past due.
 
Late Fee. Any principal or interest which is not paid within 10 days after its
due date (whether as stated, by acceleration or otherwise) shall be subject to a
late payment charge of five percent (5.00%) of the total payment due, in
addition to the payment of interest, up to the maximum amount of One Thousand
Five Hundred and 00/100 Dollars ($1,500.00) per late charge. The Borrower agrees
to pay and stipulates that five percent (5.00%) of the total payment due is a
reasonable amount for a late payment charge. The Borrower shall pay the late
payment charge upon demand by the Bank or, if billed, within the time specified.
 
Purpose of Loan. The Borrower acknowledges and agrees that this Note evidences a
loan for a business, commercial, agricultural or similar commercial enterprise
purpose, and that no advance shall be used for any personal, family or household
purpose. The proceeds of the loan shall be used only for the Borrower's working
capital purposes.
 
Credit Facility. The Bank has approved a credit facility to the Borrower in a
principal amount not to exceed the face amount of this Note. The credit facility
is in the form of advances made from time to time by the Bank to the Borrower.
This Note evidences the Borrower's obligation to repay those advances. The
aggregate principal amount of debt evidenced by this Note is the amount
reflected from time to time in the records of the Bank. Until the earliest to
occur of maturity, any default, event of default, or any event that would
constitute a default or event of default but for the giving of notice, the lapse
of time or both, the Borrower may borrow, pay down and reborrow under this Note
subject to the terms of the Related Documents.
 
Usury. The Bank does not intend to charge, collect or receive any interest that
would exceed the maximum rate allowed by law. If the effect of any applicable
law is to render usurious any amount called for under this Note or the other
Related Documents, or if any amount charged or received with respect to this
Note, or any prepayment by the Borrower, results in the computation or earning
of any interest in excess of that permitted by law, then any and all excess
interest shall be (and the same hereby is) waived by the Bank, and any and all
excess amounts collected by the Bank shall be automatically credited against,
and shall be deemed to have been payments in reduction of, the then outstanding
principal balance of this Note, and any portion of such excess paid to the Bank
which exceeds the then outstanding principal balance of this Note shall be paid
by the Bank to the Borrower), and the provisions of this Note and the other
Related Documents shall immediately be deemed reformed and the amounts
thereafter collectable reduced, without the necessity of the execution of any
new document, so as to comply with the then applicable law. All sums paid, or
agreed to be paid, by the Borrower for the use, forbearance, or detention of
money under this Note or the other Related Documents shall, to the maximum
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full thereof, so
that the rate or amount of interest on account of such indebtedness does not
exceed the usury ceiling from time to time in effect and applicable to such
indebtedness, for so long as such indebtedness is outstanding. To the extent
federal law permits the Bank to contract for, charge or receive a greater amount
of interest, the Bank will rely on federal law instead of Florida law.
 
 
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
 
 
3

 
Miscellaneous. This Note binds the Borrower and its successors, and benefits the
Bank, its successors and assigns. Any reference to the Bank includes any holder
of this Note. This Note is subject to that certain Credit Agreement by and
between the Borrower and the Bank, dated January 13, 2020, and all amendments,
restatements and replacements thereof (the "Credit Agreement") to which
reference is hereby made for a more complete statement of the terms and
conditions under which the loan evidenced hereby is made and is to be repaid.
The terms and provisions of the Credit Agreement are hereby incorporated and
made a part hereof by this reference thereto with the same force and effect as
if set forth at length herein. No reference to the Credit Agreement and no
provisions of this Note or the Credit Agreement shall alter or impair the
absolute and unconditional obligation of the Borrower to pay the principal and
interest on this Note as herein prescribed. Capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. If any one or more of the obligations of the Borrower under this Note
or any provision hereof is held to be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrower and the remaining provisions shall not in any way be
affected or impaired; and the invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of such
obligations or provisions in any other jurisdiction. Time is of the essence
under this Note and in the performance of every term, covenant and obligation
contained herein.
 
 
 
 
 
 
Borrower:
Address:
7100 Technology Drive
West Melbourne, FL 32904
 
BK Technologies, Inc.
 
 
 
By:
/s/ William P. Kelly
 
 
 
 
William P. Kelly, EVP and CFO    
 
 
 
 
Printed Name
Title
 
 
 
 
 
 
 
Date Signed:
1/30/20

 
 
 
 
4