Exhibit 10.3


 





PROMISSORY NOTE


 


	Borrower:	
        Applied Optoelectronics,
        Inc.

        13115 Jess Pirtle Blvd

        Sugar Land, TX 77478
	Lender:	
        East West Bank

        Loan Servicing Department

        9300 Flair Drive, 6th Floor

        El Monte, CA 91731

         



	Principal Amount:  $5,000,000.00	Date of Note:  July 31, 2014
	 	 


PROMISE TO PAY.
Applied Optoelectronics, Inc. ("Borrower") promises to pay to East West Bank ("Lender"), or order, in lawful
money of the United States of America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00) or so much as
may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated
from the date of each advance until repayment of each advance.


 


PAYMENT. Borrower
will pay this loan in accordance with the following payment schedule:


 


Draw
Period. The loan will have a 7 month draw down period with interest payments due monthly at the prevailing rate on the Note
commencing one (1) month from the date of first advance and ending on the last day of the seven month draw down period from the
date of the first advance. (Term Loan Conversion Date”).


 


Term
Loan. On the Term Loan Conversion Date, the section entitled "Line of Credit" is hereby deleted and the entire outstanding
principal balance shall be converted to a fifty three (53) month fully amortized term loan. Thereafter, Borrower shall make all
payments of equal principal plus accrued interest at the prevailing rate of the Note commencing one (1) month from the Term Loan
Conversion Date and each subsequent payment of equal principal plus accrued interest shall be due on the same day of each month
after date. Borrower’s final payment will be for all principal and all accrued interest not yet paid.


 


Unless otherwise
agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to
any late charges; and then to any unpaid collection costs. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.


 


VARIABLE INTEREST
RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which
is the rate quoted by Lender for successive LIBOR Interest Periods.


 


INTEREST CALCULATION
METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year
of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is
outstanding. All interest payable under this Note is computed using this method.


 


PAYMENT DUE DATE.
If any payment required to be made by the Borrower hereunder becomes due and payable on a day other than a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and interest thereon shall be payable at the then applicable
rate during such extension.


 


PREPAYMENT.
Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not
be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. In
any event, even upon full prepayment of this Note, Borrower may pay without penalty all or a portion of the amount owed earlier
than it is due. Early partial payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation
to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. If Borrower
sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated
to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: East West Bank,
Loan Service Department, 9300 Flair Drive, 6th Floor El Monte, CA 91731.


 


LATE CHARGE.
If a payment is 11 days or more late, Borrower will be charged 2.000% of the unpaid portion of the regularly scheduled payment
or $5.00, whichever is greater.


 


INTEREST AFTER
DEFAULT. Upon default, the interest rate on this Note shall, if permitted under applicable law, immediately increase by adding
an additional 2.000 percentage point margin ("Default Rate Margin"). The Default Rate Margin shall also apply to each
succeeding interest rate change that would have applied had there been no default.


 






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DEFAULT.
Each of the following shall constitute an event of default ("Event of Default") under this Note:


 


Payment
Default. Borrower fails to make any payment when due under this Note.


 


Other
Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this
Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.


 


Default
in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase
or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's
property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.


 


False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under
this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.


 


Insolvency.
The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or
the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.


 


Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the
loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event
of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which
is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.


 


Events
Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation
party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes
or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.


 


Change
in Control. Any transaction in which any “person” or “group” (within the meaning of Section 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding
of Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group”
to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction.


 


Adverse
Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.


 


Cure Provisions. If any default, other than a default in payment is curable and if
Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it
may be cured if Borrower, after Lender sends written notice to Borrower demanding cure of such default: (1) cures the default
within thirty (30) days; or (2) if the cure requires more than thirty (30) days, immediately initiates steps which Lender deems
in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.


 


LENDER'S RIGHTS.
Upon default, only after Borrower has exhausted all remedies under the Cure Provisions section as set forth above, Lender
may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower
will pay that amount.


 






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JUDICIAL REFERENCE.
If the waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies
of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties
or, if they cannot agree, then any party may seek to have a private judge appointed in accordance with California Code of Civil
Procedure §§ 638 and 640 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive
jurisdiction of the federal courts). The reference proceedings shall be conducted pursuant to and in accordance with the provisions
of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among
others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary
and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all
records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional
relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply
to the Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before
a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall
be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.
The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in
the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to
decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant
to California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time
to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine
all issues relating to the applicability, interpretation, and enforceability of this paragraph.


 


The parties agree
that time is of the essence in conducting the referenced proceedings. The parties shall promptly and diligently cooperate with
one another and the referee, and shall perform such acts as may be necessary to obtain prompt and expeditious resolution of the
dispute or controversy in accordance with the terms hereof. The costs shall be borne equally by the parties.


 


ATTORNEYS' FEES;
EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender
fees incurred in any attempt to collect. This includes, subject to any limits under applicable law, Lender's attorneys' fees and
Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition
to all other sums provided by law.


 


JURY WAIVER.
To the extent permitted by applicable law, Lender and Borrower hereby waive the right to any jury trial in any action, proceeding,
or counterclaim brought by either Lender or Borrower against the other.


 


GOVERNING LAW.
This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of California without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of California.


 


DISHONORED ITEM
FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.


 


RIGHT OF SETOFF.
To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff
would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts
to allow Lender to protect Lender's charge and setoff rights provided in this paragraph.


 


COLLATERAL.
Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: inventory,
accounts, equipment and general intangibles described in the Commercial Security Agreement dated July 31, 2014.


 


LINE OF CREDIT.
This Note evidences a straight line of credit. Once the total amount of principal has been advanced, Borrower is not entitled
to further loan advances. Advances under this Note may be requested either orally or in writing by Borrower or as provided in
this paragraph. All oral requests shall be confirmed in writing on the day of the request, on forms acceptable to Lender. All
communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above.
The following person or persons are authorized to request advances and authorize payments under the line of credit until Lender
receives from Borrower, at Lender's address shown above, written notice of revocation of such authority: Chih-Hsiang (Thompson)
Lin, CEO of Applied Optoelectronics, Inc. Borrower agrees to be liable for all sums either: (A) advanced in accordance with
the instructions of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily
computer print-outs.


 






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CERTIFICATION
OF ACCURACY. Borrower certifies under penalty of perjury that all financial documents provided to Lender, which may include
income statements, balance sheets, accounts payable and receivable listings, inventory listings, rents rolls, and tax returns,
are the most recent such documents prepared by Borrower, that they give a complete and accurate statement of the financial condition
of Borrower, as of the dates of such statements, and that no material change has occurred since such time, except as disclosed
to Lender in writing. Borrower agrees to notify Lender immediately of the extent and character of any material adverse change
in the Borrower's financial condition. The financial documents shall constitute continuing representations of Borrower and shall
be construed by Lender to be continuing statements of the financial condition of Borrower and to be new and original statement
of all assets and liabilities of Borrower with respect to each advance under this Note and every other transaction in which Borrower
becomes obligated to Lender until Borrower advises Lender to the contrary. The financial documents are being given to induce Lender
to extend credit and Lender is relying upon such documents. Lender may verify with third parties any information contained in
financial documents delivered to Lender, obtain information from others, and ask and answer questions and requests seeking credit
experience about the undersigned.


 


CHOICE OF VENUE.
If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Los Angeles County,
State of California.


 


LIBOR INTEREST
RATE OPTION. An exhibit, titled "LIBOR INTEREST RATE OPTION," is attached to this Note and by this reference is
made a part of this Note just as if all the provisions, terms and conditions of the Exhibit had been fully set forth in this Note.


 


SUCCESSOR INTERESTS.
The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and assigns.


 


NOTIFY US OF
INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Borrower may notify Lender if Lender reports any inaccurate
information about Borrower's account(s) to a consumer reporting agency. Borrower's written notice describing the specific inaccuracy(ies)
should be sent to Lender at the following address: East West Bank Loan Service Department 9300 Flair Drive, 6th Floor El Monte,
CA 91731.


 


ORAL AGREEMENTS
NOT EFFECTIVE. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior oral or written negotiations, agreements and understandings of the parties with
respect to the subject matter hereof and shall remain in full force and effect in accordance with its terms and conditions. 
Moreover, any subsequent oral statements, negotiations, agreements or understandings of the parties shall not be effective against
Lender unless (i) expressly stated in writing, (ii) duly approved and authorized by an appropriate decision making committee of
Lender on such terms and conditions as such committee shall deem necessary or appropriate in the committee’s sole and absolute
opinion and judgment and (iii) executed by an authorized officer of Lender.  Borrower shall not rely or act on any oral statements,
negotiations, agreements or understandings between the parties at anytime whatsoever, including before or during any Lender approval
process stated above.  Borrower acknowledges and agrees that Borrower shall be responsible for its own actions, including
any detrimental reliance on any oral statements, negotiations, agreements or understandings between the parties and that Lender
shall not be liable for any possible claims, counterclaims, demands, actions, causes of action, damages, costs, expenses and liability
whatsoever, known or unknown, anticipated or unanticipated, suspected or unsuspected, at law or in equity, originating in whole
or in part in connection with any oral statements, negotiations, agreements or understandings between the parties which the Borrower
may now or hereafter claim against the Lender.  Neither this Agreement nor any other Related Document, nor any terms hereof
or thereof may be amended, supplemented or modified except in accordance with the provisions of this section.  Lender may
from time to time, (a) enter into with Borrower written amendments, supplements or modifications hereto and to the Related Documents
or (b) waive, on such terms and conditions as Lender may specify in such instrument, any of the requirements of this Agreement
or the Related Documents or any Event Default and its consequences, if, but only if, such amendment, supplement, modification
or waiver is (i) expressly stated in writing, (ii) duly approved and authorized by an appropriate decision making committee of
Lender on such terms and conditions as such committee shall deem necessary or appropriate in the committee’s sole and absolute
opinion and judgment and (iii) executed by an authorized officer of Lender.  Then such amendment, supplement, modification
or waiver shall be effective only in the specific instance and specific purpose for which given.


 


GENERAL PROVISIONS.
If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that
Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral;
or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint
and several.


 






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PRIOR TO SIGNING
THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE NOTE.


 


BORROWER ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


 


BORROWER:


 


 


 


APPLIED OPTOELECTRONICS,
INC.


 


 


 


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


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


 






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LIBOR INTEREST RATE OPTION


 


	Borrower:	
        Applied Optoelectronics,
        Inc.

        13115 Jess Pirtle Blvd

        Sugar Land, TX 77478
	Lender:	
        East West Bank

        Loan Servicing Department

        9300 Flair Drive, 6th Floor

        El Monte, CA 91731



 


This LIBOR INTEREST
RATE OPTION is attached to and by this reference is made a part of the Promissory Note, dated July 31, 2014, and executed
in connection with a loan or other financial accommodations between EAST WEST BANK and Applied Optoelectronics, Inc.


 


"Business Day"
means any day other than a Saturday, Sunday, or other day that commercial banks in Los Angeles, California are authorized or required
by law to close; provided, however that when used in connection with a LIBOR Rate, LIBOR Amount or LIBOR Interest Period such
term shall also exclude any day on which dealings in U.S. dollar deposits are not carried on in the London interbank market.


 


"LIBOR
Amount" means each principal amount for which the LIBOR Borrowing Rate applies for any specified LIBOR Interest Period.


 


"LIBOR
Interest Period" means as to any LIBOR Amount, a period of one month, two months, or three months) commencing on the date
the LIBOR Borrowing Rate becomes applicable thereto; provided, however, that: (i) the first day of each LIBOR Interest Period
must be a Business Day; (ii) no LIBOR Interest Period shall be selected which would extend beyond the maturity date of the Note;
(iii) no LIBOR Interest Period shall extend beyond the date of any principal payment required under this note; (iv) any LIBOR
Interest Period which would otherwise expire on a day which is not a Business Day, shall be extended to the next succeeding Business
Day, unless the result of such extension would be to extend such LIBOR Interest Period into another calendar month, in which event
the LIBOR Interest Period shall end on the immediately preceding Business Day; and (v) LIBOR Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at
the end of such LIBOR Interest Period) shall end on the last Business Day of a calendar month.


 


"LIBOR Rate" shall mean
the rate determined by Lender to be the London interbank offered rate for deposits in U.S. Dollars for the LIBOR Interest Period
(defined above) which appears on the Bloomberg Screen B TMM Page under the heading "LIBOR Fix" as of 11:00 a.m. (London
Time) on the second (2nd) Business Day prior to the first day of such LIBOR Interest Period (adjusted for any all assessments,
surcharges and reserve requirements). If such interest rate shall cease to be available from the described Bloomberg report, the
LIBOR Rate shall be determined from such financial reporting service as Lender shall reasonably determine and use with respect
to its other loan facilities on which interest is determined based on the London interbank offered rate. 


 


The LIBOR Borrowing Rate.


 


	(i)	The LIBOR Borrowing Rate is the LIBOR Rate plus 2.750% per annum.



 

	(ii)	Borrower may obtain LIBOR Borrowing Rate quotes from Lender between 9:00 a.m. and 11:00 a.m. (California time) on any Business Day.  Borrower may request an Advance or a new LIBOR Interest Period for an existing LIBOR Amount, only by giving Lender notice before 11:00 a.m. (California time) on such day.  If Borrower does not give notice of a new LIBOR Interest Period for an existing LIBOR Amount, Borrower is deemed to have requested a new LIBOR Interest Period of three months.



 

	(iii)	Any oral notice shall be given by, and any written notice shall be signed by, the person(s) authorized in this note, and shall specify the requested effective date of the rate, LIBOR Interest Period and LIBOR Amount, and whether Borrower is requesting a new Advance at the LIBOR Borrowing Rate under a line of credit, or a new LIBOR Interest Period for an outstanding LIBOR Amount.  No more than one LIBOR Rate Notice shall be in effect at any one time during the term of the Loan, except that, notwithstanding anything to the contrary contained in this Note, Borrower may select a separate LIBOR Rate Period for up to three (3) different parts of the Loan (each part of which must be in the minimum amount of One Hundred Thousand and 00/100 DOLLARS ($100,000.00), provided that such selection is otherwise done in strict compliance with the terms of this Note.



 

	(iv)	If at any time the LIBOR Rate is unascertainable or unavailable to Lender or if LIBOR Rate loans become unlawful, then the LIBOR Borrowing Rate (A) shall terminate automatically with respect to all LIBOR Amounts (i) on the last day of each then applicable LIBOR Interest Period, if Lender may lawfully continue to maintain such loans, or (ii) immediately if Lender may not lawfully continue to maintain such loans through such day, and (B) an interest rate equal to the daily Wall Street Journal Prime Rate, as quoted in the “Money Rates” column of The Wall Street Journal (Western Edition) all as determined by Lender minus 0.25% per annum automatically shall become effective as to such amounts upon such termination.



 






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	(v)	If at any time after the date hereof (A) any revision in or adoption of any applicable law, rule, or regulation or in the interpretation or administration thereof (i) shall subject Lender to any tax, duty, or other charge, or change the basis of taxation of payments to Lender with respect to any loans bearing interest based on the LIBOR Rate, or (ii) shall impose or modify any reserve, insurance, special deposit, or similar requirements against assets of, deposits with or for the account of, or credit extended by Lender, or impose on Lender any other condition affecting any such loans, and (B) the result of any of the foregoing is (i) to increase the cost to Lender of making or maintaining any such loans or (ii) to reduce the amount of any sum receivable under this note by Lender, Borrower shall pay Lender within 15 days after demand by Lender such additional amount as will compensate Lender for such increased cost or reduction.  The determination hereunder by Lender of such additional amount shall be conclusive in the absence of manifest error.  If Lender demands compensation, Borrower may upon three (3) Business Days' notice to Lender pay the accrued interest on all LIBOR Amounts, together with any additional amounts payable. 



 

	(vi)	Borrower shall pay to Lender, on demand, such amount as Lender reasonably determines (determined as though 100% of the applicable LIBOR Amount had been funded in the London interbank market) is necessary to compensate Lender for any direct or indirect losses, expenses, liabilities, costs, expenses or reductions in yield to Lender, whether incurred in connection with liquidation or re-employment of funds or otherwise, incurred or sustained by Lender as a result of:  (A) Any payment or prepayment of a LIBOR Amount, termination of the LIBOR Borrowing Rate on a day other than the last day of the applicable LIBOR Interest Period (including as a result of acceleration); or (B)  Any failure of Borrower to borrow, continue or prepay any LIBOR Amount after Borrower has given a notice thereof to Lender.



 

	(vii)	Borrower shall pay interest based on such rate, plus any other applicable taxes or charges hereunder, even though Lender may have obtained the funds loaned to Borrower from sources other than the London interbank market.  Lender's determination of the LIBOR Borrowing Rate and any such taxes or charges shall be conclusive in the absence of manifest error.



 

	(viii)	Nothing contained in this note, including without limitation the determination of any LIBOR Interest Period or Lender's quotation of any LIBOR Borrowing Rate, shall be construed to prejudice Lender's right, if any, to decline to make any requested Advance or to require payment on demand


 


THIS LIBOR INTEREST
RATE OPTION IS EXECUTED ON July 31, 2014.


 


BORROWER:


 


 


APPLIED OPTOELECTRONICS,
INC.


 


 


 


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


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


 


 






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