Micropac Industries Inc. announced that on January 23, 2013, the company entered into a Loan Agreement with Frost Bank as lender. The Loan Agreement replaces the company's current revolving line of credit with Frost entered into on June 1, 2011. Subject to the terms of the Loan Agreement, Frost will lend to the company, on a revolving basis, amounts not to exceed a total principal balance of $6,000,000.00, minus amounts available and amounts previously disbursed under outstanding Frost letters of credit.

Subject to certain terms and conditions, the company may borrow, repay and reborrow under the Loan Agreement. The interest rate for the revolving credit loans is computed at a per annum rate equal to the lesser of (a) a rate equal to the Prime Rate, to be adjusted to reflect any change in the Prime Rate, or (b) the rate permitted by applicable law. Subject to the terms of the Loan Agreement, Frost will lend to the company an aggregate amount not to exceed $7,500,000.00 in a single advance or in multiple advances, in addition to the Revolving Credit Loans.

The company will not be allowed to re-borrow under the specific advance commitment after a repayment. With respect to the specific advance loans, the company has an option of a variable interest rate equal to LIBOR plus 2.50% per annum, adjusted daily to reflect any change in LIBOR, or a fixed interest rate based on the SecureConnect Amortizing Rate for a maturity of five years with a sixty month amortization established by the Federal Home Loan Bank of Dallas in its listing of advanced pricing rates, plus 2.50%.