Exhibit 10.3

 

MODIFICATION TO THE CONSTRUCTION LOAN AGREEMENT

 

 

Borrower: Applied Optoelectronics, Inc. Lender: East West Bank   13115 Jess
Pirtle Blvd.   Loan Servicing Department   Sugar Land, TX 77478   9300 Flair
Drive, 6th Floor       El Monte, CA 91731

 

 

This MODIFICATION TO THE CONSTRUCTION LOAN AGREEMENT is attached to and by this
reference is made a part of the Construction Loan Agreement (Loan #[***]) dated
January 26, 2015, including all modifications thereto, and executed in
connection with a loan or other financial accommodations between Lender and
Borrower.

 

The section entitled "Financial Statements" is hereby amended and based on the
Credit Agreement dated June 30, 2015 and amendments thereafter between Borrower
and Lender.

 

The section entitled "Financial Covenants and Ratios" is hereby amended and
based on the Credit Agreement dated June 30, 2015 and amendments thereafter
between Borrower and Lender.

 

The section entitled "Construction of the Project" is hereby amended and
restated as follows:

 

Construction of the Project. Commence construction of the Project no later than
February 3, 2015, and cause the Improvements to be constructed and equipped in a
diligent and orderly manner and in strict accordance with the Plans and
Specifications approved by Lender, the Construction Contract, and all applicable
laws, ordinances, codes, regulators, and rights of adjoining or concurrent
property owners. Borrower agrees to complete the Project for purposes of final
payment to the General Contractor on or before June 30, 2016, regardless of the
reason for any delay.

 

The section entitled "Cessation of Construction" is hereby amended and restated
as follows:

 

Cessation of Construction. Prior to the completion of construction of the
improvement and equipping of the Project, the construction of the improvements
or the equipping of the Project is abandoned or work thereon ceases for a period
of more than ten (10) days for any reason, or the improvements are not completed
for purposes of the final payments to the General Contractor prior to June 30,
2016, regardless of the reason for the delay."

 

The definition of "Completion Date" is hereby amended and restated as follows:

Completion Date. The words "Completion Date" mean June 30, 2016.

 

The section entitled "NON-COMPLIANCE FEE" is hereby added under the section
entitled "AFFIRMATIVE COVENANTS" as follows:

 

NON-COMPLIANCE FEE. Borrower acknowledges that if Borrower fails to timely
furnish Lender with any financial record(s) required by this Agreement or
otherwise fails to timely perform any other term, obligation or covenant
required by this Agreement and Related Documents (singularly and collectively
"Non-Compliance"), Lender will incur costs and damages as a result of Borrower's
Non-Compliance, and in consideration of such costs and damages, Borrower agrees
to pay Lender a fee equal to 2.500% per annum of the then outstanding loan
balance, calculated based on a 30 day month over 360 days per year
("Predetermined Fee Amount"). Any fee under this section will be imposed monthly
in the Predetermined Fee Amount and due on the interest payment due date until
the Non-Compliance is cured by Borrower. A Predetermined Fee Amount will be
calculated and imposed in accordance with this section for each recurring event
of Non-Compliance.

 

The section entitled "Other Condition" is hereby added as follows:

Other Condition. Verification of mechanic lien free status to be obtained.

 

THIS MODIFICATION TO THE CONSTRUCTION LOAN AGREEMENT IS EXECUTED AS OF JUNE 14,
2016.

 

BORROWER:

 

 

APPLIED OPTOELECTRONICS, INC. By:

 

By: /s/ Chih-Hsiang (Thompson) Lin                           

Chih-Hsiang (Thompson) Lin, CEO of Applied Optoelectronics, Inc.

 

LENDER:

 

 

EAST WEST BANK

 

X___________________________

Authorized Signer

 

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