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                                                                   EXHIBIT 10.11


                         AGREEMENT AND RELEASE OF CLAIMS


1.      I, John Harland, ("Employee"), understand that my employment with
        Alliance Fiber Optic Products, Inc. (the "Company") ended effective
        August 24, 2001.

2.      I understand and agree that I will receive the following separation
        package from the Company in return for entering into this Agreement and
        Release of Claims:

        (a)    The Company will pay my salary and medical benefits until the end
               of September, 2001.

        (b)    I will be vested in an additional forty eight thousand five
               hundred shares (48,500 shares) of the Company's Common Stock I
               acquired upon exercise of the option under the Option Agreement,
               and I will be entitled to retain eighty two thousand five hundred
               shares (82,500 shares) of the Company's Common Stock I acquired
               under the Option Agreement. The Company will exercise its right
               of repurchase with respect to the balance of the shares (199,000
               shares).

        (c)    I will deliver a check in the amount of $131,000.00 as payment
               for the shares in which I am vested, or in which I become vested
               pursuant to this Agreement and Release of Claims, plus interest
               accrued pursuant to the terms of the Promissory Note. The Company
               will cancel the Promissory Note thereby declaring it null and
               void, when the correct amount is received.

        I acknowledge that this separation package is given in exchange for my
        signing this Agreement and Release of Claims, and that I am not
        otherwise entitled to receive this separation package from the Company.
        I understand this separation package is given in order to avoid costly,
        time-consuming proceedings and is not an admission of any wrongdoing by
        the Company.

3.      I agree that the above listed separation package is in full satisfaction
        of any claims, liabilities, demands or causes of action, known or
        unknown, that I ever had, now have or may claim to have had against the
        Company or any parents, subsidiaries, directors, officers, employees,
        stockholders or agents of the Company as of the date of this Agreement
        and Release of Claims (excepting claims for vested benefits based on my
        employment, workers' compensation insurance, or unemployment insurance
        benefits). Any such claims, whether for discrimination, including claims
        under the Fair Employment and Housing Act, Title VII of the Civil Rights
        Act of 1964, the Age Discrimination in Employment Act, wrongful
        termination, breach of contract, breach of public policy, physical or
        mental harm or distress or any other claims are hereby released and I
        agree and promise that I will not file any lawsuit asserting any such
        claims.

4.      When I joined AFOP, I signed the Employee's Proprietary Information and
        Inventions Agreement regarding confidential information and intellectual
        property in which I agreed to protect Company confidential information
        both during and after my employment. That agreement is incorporated by
        reference here. As a condition of accepting the separation package set
        forth in Section 3 above, I reaffirm my obligation to keep secret all
        confidential information that belongs to the Company.


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5.      I agree to return all property that belongs to the Company.

6.      I agree not to make any communications or engage in any conduct that is
        or can reasonably be construed to be disparaging of the Company, its
        officers, directors, founders, employees, agents, stockholders, products
        or services. Likewise, the Company agrees not to do the same to the
        Employee.

7.      I hereby expressly waive the provisions of California Civil Code section
        1542, regarding the waiver of unknown claims. California Civil Code
        section 1542 provides as follows:

               A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
               DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
               EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
               AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

8.      As a condition of accepting the separation package set forth in Section
        3, I agree to keep confidential the terms of this Agreement and Release
        of Claims and any negotiations or discussions leading thereto. I
        understand that I am permitted to disclose these terms to my accountant,
        attorney or spouse, if any, or if required by law.

9.      If any term of this Agreement and Release of Claims is held to be
        invalid, void or unenforceable, the remainder of this Agreement and
        Release of Claims shall remain in full force and effect and shall in no
        way be affected, and the parties shall use their best efforts to find an
        alternative way to achieve the same result.

10.     The provisions of this Agreement and Release of Claims set forth the
        entire agreement between me and the Company concerning my separation
        package and the separation of my employment, provided however, that this
        Agreement and Release of Claims does not supersede my obligations to
        maintain the confidentiality of Company information, whether arising
        from the Employee's Proprietary Information and Inventions Agreement
        referred to above in Section 5, or from operation of law. Any other
        promises, written or oral, are replaced by the provisions of this
        Agreement and Release of Claims, and are no longer effective unless they
        are contained in this document. This Agreement and Release of Claims can
        only be changed in writing, signed by me and the Chief Executive Officer
        of the Company.

11.     I agree that any future disputes between me and the Company (the
        "parties") including but not limited to disputes arising out of or
        related to this Agreement and Release of Claims, shall be resolved by
        binding arbitration, except where the law specifically forbids the use
        of arbitration as a final and binding remedy, in Santa Clara County,
        California in accordance with the rules of the American Arbitration
        Association by one arbitrator appointed in accordance with said rules.
        The Arbitrator shall apply California law, without references to rules
        of conflicts law or rules of statutory arbitration, to the resolution of
        any dispute. Judgment on the award rendered by the arbitrator may be
        entered in any court having competent jurisdiction thereof.
        Notwithstanding the foregoing, the parties may apply to any court of
        competent jurisdiction for preliminary or interim equitable relief, or
        to compel arbitration in accordance with this Section.


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12.     I have been advised and understand that I have three (3) days to decide
        whether or not to sign this Agreement. This period is designed to allow
        me to consult with a financial advisor, accountant, attorney or anyone
        else whose advice I choose to seek. The Company advises me to consult
        with an attorney.

13.     I have been advised and understand that after signing this document I
        have seven (7) days to revoke my agreement to the terms of this
        document. Any revocation should be in writing and should be delivered to
        Peter C. Chang AT the Company's headquarters at 735 North Pastoria
        Avenue, Sunnyvale, California 94085, by 5:00 p.m. at the end of the
        seventh day after signing this document or should be mailed to Peter C.
        Chang at that same address by certified mail, postmarked no later than
        seven (7) days after signing this Agreement. This Agreement will not
        become effective until the seven (7) day revocation period has passed.

14.     By signing below, I acknowledge that I am entering into this Agreement
        and Release of Claims knowingly and voluntarily. In addition, I hereby
        acknowledge by my signature that I have carefully read and fully
        understand all the provisions of this Agreement and Release of Claims.

 ................................................................................

        By my signature, I agree to the terms set forth above, and I agree to
this Agreement and Release of Claims.

Date:  8/23, 2001


                                                  /s/ JOHN M. HARLAND
                                        ----------------------------------------
                                                      John M. Harland
Date:  8/23, 2001


                                                    /s/ PETER CHANG
                                        ----------------------------------------
                                          Alliance Fiber Optics Products, Inc.

                                        By:   Peter Chang
                                            ------------------------------------

                                        Its:
                                             -----------------------------------




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