Applied Optoelectronics entered into a loan agreement, a promissory note, an addendum to the promissory note, a BB&T security agreement, a trademark security agreement and a patent security agreement with Branch Banking and Trust Company. The credit facility provides the company with a three-year, $50 million revolving line of credit. Borrowings under the credit facility will be used for general corporate purposes.
The company will make monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid.
The company’s obligations under the credit facility will be secured by the company’s accounts receivable, inventory, intellectual property, all business assets with the exception of real estate and equipment. Borrowings under the credit facility will bear interest at a rate equal to the one-month LIBOR + 1.50%.
The company terminated its first amendment to a credit agreement and limited consent, with East West Bank and Comerica Bank; the company also terminated, with each lender, its $17.5 million amended and restated revolving credit note, its $2.5 million amended and restated revolving credit note, its $5 million term note and first modification to promissory note, all dated June 24, 2016. The revolving credit notes amends and restates in-part the company’s existing credit facility with the lenders that were originally entered into on June 30, 2015.