Exhibit 10.1


 





FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED
CONSENT


 


THIS FIRST AMENDMENT
TO CREDIT AGREEMENT AND LIMITED CONSENT (this “Amendment”), dated as of June 24, 2016, is by and
between APPLIED OPTOELECTRONICS, INC., a Delaware corporation (the “Borrower”), EAST WEST BANK, as Agent (the
“Agent”) and the Lenders party hereto. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed thereto in the Credit Agreement.


 


W I T N E S S E T H


 


WHEREAS, the Borrower,
the Agent, and the Lenders are parties to that certain Credit Agreement dated as of June 30, 2015 (as amended, modified, extended,
restated, replaced, or supplemented from time to time, the “Credit Agreement”);


 


WHEREAS, the Borrower
has requested that the Agent and the Lenders consent to the transfer of the Foreign Branch and the modification of certain of the
Existing EWB Loan Documents, and amend certain provisions of the Credit Agreement, all as set forth herein;


 


WHEREAS, it has
been determined that Comerica Bank shall act as Documentation Agent under the terms of the Credit Agreement, all as more fully
set forth in the Amendment; and


 


WHEREAS, the Agent
and the Lenders are willing to consent to the transfer of the Foreign Branch and the modification of certain of the Existing EWB
Loan Documents and to make such amendments to the Credit Agreement, in accordance with and subject to the terms and conditions
set forth herein.


 


NOW, THEREFORE,
in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:


 


ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT


 


1.1New
Definitions. The following definitions are hereby added to Section 1.1 of the Credit Agreement in the appropriate
alphabetical order:


 


“Adjusted Current
Ratio”: As of any date of determination, the ratio of (a) total current assets minus without duplication, any
Investments in the Borrower or any Subsidiary by the Borrower or any Subsidiary, any account receivable of the Borrower or any
Subsidiary from the Borrower or any Subsidiary or any other assets of the Borrower or any Subsidiary, the obligor for which is
the Borrower or any Subsidiary to (b) total current liabilities minus without duplication, any Debt, account payable, or
any other liability of the Borrower or any Subsidiary to the Borrower or any Subsidiary, determined and consolidated for the Borrower
and its Domestic Subsidiaries in accordance with GAAP.


 


“Consolidated
Fixed Charges”: For any period, the sum of (a) Consolidated Interest Charges, and (b) scheduled principal payments on
Consolidated Funded Debt, in each case for such period, and determined and consolidated for the Borrower and its Subsidiaries
in accordance with GAAP.


 


“First Amendment
Effective Date”: June 24, 2016.


 


“Fixed Charge
Coverage Ratio”: For any period, the ratio of (a) Consolidated EBITDA less the sum of (i) Unfinanced Capital Expenditures,
(ii) Consolidated Tax Expense paid in cash, and (iii) any dividends paid in cash to (b) Consolidated Fixed Charges, in each case
for such period, and determined and consolidated for the Borrower and its Subsidiaries in accordance with GAAP; provided
that for the purposes of calculating Fixed Charge Coverage Ratio, the amount of any Unfinanced Capital Expenditures made prior
to January 1, 2016 shall be deemed to be $0.


 


“Term Loan 1”:
As defined in Section 2.2(a).


 


“Term Loan 1 Availability
Period”: The twelve (12) month period commencing on the Closing Date.


 


“Term Loan 1 Commitment”:
The commitment of a Lender to make Term Loan 1s to the Borrower pursuant to Section 2.2(a) in an aggregate principal amounts
not in excess of the amount set forth opposite such Lender’s name on Annex 1, as such amount may be adjusted from
time to time in accordance with this Agreement.


 


“Term Loan 1 Maturity
Date”: June 30, 2020.


 


“Term Loan 2”:
As defined in Section 2.2(b).


 


“Term Loan 2 Availability
Period”: The twelve (12) month period commencing on the First Amendment Effective Date.


 


“Term Loan 2 Commitment”:
The commitment of a Lender to make Term Loan 2s to the Borrower pursuant to Section 2.2(b) in an aggregate principal amounts
not in excess of the amount set forth opposite such Lender’s name on Annex 1, as such amount may be adjusted from
time to time in accordance with this Agreement.


 


“Term Loan 2 Maturity
Date”: The date that is the fifth (5th) anniversary of the First Amendment Effective Date.


 


“Unfinanced Capital
Expenditures”: Any Capital Expenditures not financed with the proceeds of Debt or any other liability or obligation of
Borrower or any Subsidiary or the proceeds of equity contribution to, or issuance of Equity Interests in, the Borrower or any Subsidiary;
provided that to the extent that any Capital Expenditures are made with the net cash proceeds of the issuance of Equity
Interests of the Borrower or its Domestic Subsidiaries after the Closing Date, any amounts in excess of 50% of such net cash proceeds
shall be deemed not to be “Unfinanced Capital Expenditures”.


 


1.2Amendment
to Existing Definitions. The following definitions set forth in Section 1.1 of the Credit Agreement are hereby amended
and restated in their entirety to read as follows:


 


“Applicable Margin”:
The Applicable Margins applicable to LIBOR Rate Loans and Base Rate Loans shall be determined from the following table:


 


	Loan Type	LIBOR Rate Loans	Base Rate Loans
	Facility A Revolving Loans	2.00%	0.00%
	Facility B Revolving Loans	2.00%	0.00%
	Term Loans	2.00%	0.00%


 


“Borrowing Base”:
At any time, the sum, at the date of the most recent Certificate required to be furnished pursuant to Section 6.1(e) or
(f), of AR Availability, plus Inventory Availability. The Agent may, from time to time, based on the ongoing performance
of the Collateral, establish reserves and make changes to applicable standards of eligibility, advance rates and reserves for any
assets in the Borrowing Base; provided, that the Agent shall discuss any such changes in advance with the Borrower and the
other Lenders, and upon obtaining Required Lenders’ consent thereto, such changes shall become effective upon the Agent’s
written notice to the Borrower and the Borrower’s written acceptance thereof, such acceptance not to be unreasonably withheld
or delayed.


 


“Current Ratio”:
As of any date of determination, ratio of total current assets to total current liabilities, in each case, determined and consolidated
for the Borrower and its Subsidiaries in accordance with GAAP.


 


“Interest Payment
Date”: The first day of each calendar month and the Expiration Date, the Term Loan 1 Maturity Date and the Term Loan
2 Maturity Date, as applicable.


 


“Interest Period”:
With respect to any LIBOR Rate Loan, the period commencing on the Borrowing, conversion or continuation date with respect to such
LIBOR Rate Loan and ending one month, two months, or three months thereafter as selected by the Borrower in its Standard Notice
of Borrowing as provided in Section 3.2 or its notice of conversion or continuation as provided in Section 2.5; provided, however,
that: (i) the first day of each Interest Period must be a LIBOR Business Day; (ii) the Borrower may not select an Interest Period
with respect to any portion of principal of a LIBOR Rate Loan which extends beyond a date on which the Borrower is required to
make a scheduled payment of that portion of principal or in any case beyond the Expiration Date, the Term Loan 1 Maturity Date
or the Term Loan 2 Maturity Date, as applicable; (iii) any Interest Period which would otherwise expire on a day which is not a
LIBOR Business Day, shall be extended to the next succeeding LIBOR Business Day, unless the result of such extension would be to
extend such Interest Period into another calendar month, in which event the Interest Period shall end on the immediately preceding
LIBOR Business Day; and (iv) any Interest Period that begins on the last LIBOR 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 Interest Period) shall end on the last
LIBOR Business Day of a calendar month.


 


“Term Commitment”:
The Term Loan 1 Commitment and Term Loan 2 Commitment of a Lender.


 


“Term Loans”:
The Term Loan 1s and the Term Loan 2s.


 


“Term Note”:
As defined in Section 2.2(c).


 


1.3Deleted
Definitions. The following definitions are hereby deleted from Section 1.1(a) of the Credit Agreement: “Term
Loan Availability Period” and “Term Loan Maturity Date”.


 


1.4Amendment
to Definition of Eligible Accounts. Clause (d) set forth in the definition of “Eligible Accounts” contained
in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:


 


(d)The accounts of
the same obligor represent in excess of twenty-five percent (25%) (or, solely with respect to (i) xxxxxxxxxxxxx and xxxxxxxx,
its wholly-owned subsidiary, in the aggregate, fifty percent (50%), (ii) xxxxxxxxx, forty percent (40%), (iii) xxxxxxxxxxx, forty percent (40%), and (iv) xxxxxxxx, thirty percent (30%)) of all Eligible Accounts.


 


1.5Amendment
to Definition of Permitted Foreign Debt. The parenthetical contained in clause (d) set forth in the definition of “Permitted
Foreign Debt” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:


 


(other than any unsecured guarantees made by
the Borrower with respect to Debt incurred by a Foreign Branch as disclosed to the Agent in writing and in existence prior to the
Closing Date)


 


1.6Amendment
to Section 2.2. Section 2.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:


 


2.2The Term Loans.


 


(a)The Term Loan 1
Commitment. Each Lender agrees, on the terms and conditions hereinafter set forth, to make one or more loans (“Term
Loan 1s”) to the Borrower during the Term Loan 1 Availability Period in an aggregate amount not to exceed such Lender’s
Term Loan 1 Commitment; provided that after giving effect to any Borrowing of Term Loan 1s, the total principal amount of
all Term Loan 1s shall not exceed the lesser of (i) the total Term Loan 1 Commitment, and (ii) one hundred percent (100%) of the
invoice amount of equipment purchased (including soft costs (i.e., freights, taxes and installation) of up to a maximum amount
of $500,000 for all such equipment) for the Borrower’s U.S. operations no earlier than January 1, 2015, but no later than
the end of the Term Loan 1 Availability Period. Once repaid, Term Loan 1s may not be reborrowed. As of the First Amendment Effective
Date, the amount available for drawing under the Term Loan 1 Commitment is $0, and the aggregate outstanding principal amount of
Term Loan 1s is $10,000,000.


 


(b)The Term Loan 2
Commitment. Each Lender agrees, on the terms and conditions hereinafter set forth, to make one or more loans (“Term
Loan 2s”) to the Borrower during the Term Loan 2 Availability Period, in an aggregate amount not to exceed such Lender’s
Term Loan 2 Commitment; provided that after giving effect to any Borrowing of Term Loan 2s, the total principal amount of
all Term Loan 2s shall not exceed the lesser of (i) the total Term Loan 2 Commitment, and (ii) one hundred percent (100%) of the
invoice amount of equipment purchased (including soft costs (i.e., freights, taxes and installation) of up to a maximum amount
of $250,000 for all such equipment) for the Borrower’s U.S. operations during the period commencing April 1, 2016 and ending
at the conclusion of the Term Loan 2 Availability Period. Once repaid, Term Loan 2s may not be reborrowed.


 


(c)Term Notes.
The Term Loans made by a Lender pursuant hereto shall be evidenced by one or more promissory notes of the Borrower, substantially
in the form of Exhibit F hereto, or otherwise in form and substance satisfactory to such Lender (as amended, modified, refinanced
or restated from time to time, collectively the “Term Notes”), payable to the order of such Lender and representing
the obligation of the Borrower to pay the unpaid principal amount of the Term Loans made by such Lender, with interest thereon
as prescribed in Section 2.4.


 


1.7Amendment
to Section 2.3(a). Section 2.3(a) of the Credit Agreement is hereby amended by amending and restating subsection (iii)
thereof in its entirety and adding a new subsection (iv) as follows:


 


(iii)Term Loan 1s.
The principal amount of the Term Loan 1s shall be payable in monthly installments payable on the first day of each calendar month,
each such installment to be in the principal amount (calculated as a percentage of the Term Loan 1s outstanding at the end of the
Term Loan 1 Availability Period) set forth below opposite the period during which such payment date is to occur:


 


	Period	Installment
	July 1, 2016 to June 30, 2017	0.8333%
	July 1, 2017 to June 30, 2018	1.6667%
	July 1, 2018 to June 30, 2019	2.5000%
	July 1, 2019 to Term Loan 1 Maturity Date	3.3333%


 


To the extent not due and payable earlier,
the Term Loan 1s, together with accrued interest thereon, shall be payable on the Term Loan 1 Maturity Date. For the avoidance
of doubt, no payment of any principal amount of the Term Loan 1s shall be required by this Section 2.3(b)(iii) prior to
July 1, 2016.


 


(iv)Term Loan 2s.
The principal amount of the Term Loan 2s shall be payable in monthly installments payable on the first day of each calendar month,
each such installment to be in the principal amount (calculated as a percentage of the Term Loan 2s outstanding at the end of the
Term Loan 2 Availability Period) set forth below opposite the period during which such payment date is to occur:


 


	Period	Installment
	June 24, 2017 to June 23, 2018	0.8333%
	June 24, 2018 to June 23, 2019	1.6667%
	June 24, 2019 to June 23, 2020	2.5000%
	June 24, 2020 to Term Loan 2 Maturity Date	3.3333%


 


To the extent not due and payable earlier,
the Term Loan 2s, together with accrued interest thereon, shall be payable on the Term Loan 2 Maturity Date. For the avoidance
of doubt, no payment of any principal amount of the Term Loan 2s shall be required by this Section 2.3(b)(iv) prior to June
24, 2017.


 


1.8Amendment
to Section 5.2(e). Section 5.2(e) of the Credit Agreement is hereby amended by replacing the “Section 2.2(a)”
with “Section 2.2(a) or (b)” therein.


 


1.9Amendment
to Section 6.1(e). Section 6.1(e) of the Credit Agreement is hereby amended and restated in its entirety to read as
follows:


 


(e)Borrowing
Base Certificates. Within thirty (30) days of the end of each month, the Borrower shall furnish to the Agent a Borrowing Base
Certificate together with a report, in form and level of detail reasonably satisfactory to the Agent, including (i) accounts receivable
aging by invoice date and reconciliations, (ii) accounts payable aging and (iii) inventory aging report and reconciliations;


 


1.10Amendment
to Section 7.1(a). Section 7.1(a) of the Credit Agreement is hereby amended and restated in its entirety to read as
follows:


 


(a)Minimum
Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio for the period of trailing four fiscal quarters then ended
to be less than 1.50 to 1.00 at the end of any fiscal quarter ending on or after the First Amendment Effective Date.


 


1.11Amendment
to Section 7.1(d). Section 7.1(d) of the Credit Agreement is hereby amended and restated in its entirety to read as
follows:


 


(d)Minimum
Unrestricted Cash Deposits. Permit, at any time, the amount of unrestricted cash of the Borrower held in deposit accounts with
the Agent, not subject to any lien other than a lien in favor of Agent, and not pledged to or held by Agent to secure a specified
obligation, to be less than $5,000,000 in the aggregate.


 


1.12Amendment
to Section 7.3(e). Section 7.3(e) of the Credit Agreement is hereby amended by adding the phrase “or intercompany
loans or advances” after the word “guarantees” therein.


 


1.13Amendment
to Section 7.7. Section 7.7 of the Credit Agreement is hereby amended by deleting the penultimate sentence thereof
and amending and restating clause (j) in its entirety as follows:


 


(j) Investments in Foreign Branches and Foreign
Subsidiaries; provided that at the time of and after giving effect to any such Investment, the Adjusted Current Ratio shall
not exceed 1.50 to 1.00, as evidenced by an Officer’s Certificate of the Borrower setting forth a calculation of the Adjusted
Current Ratio as of such time and on a pro forma basis in detail satisfactory to the Agent.


 


1.14Documentation
Agent. Article IX of the Credit Agreement is hereby amended by adding a new Section 9.8 thereto as follows:


 


9.8Documentation
Agent. Each of the Lenders hereby appoints Comerica Bank as Documentation Agent. However, anything herein to the contrary
notwithstanding, the Documentation Agent shall have no powers, duties or responsibilities under this Agreement or any other Loan
Documents except in its capacity, as applicable, as a Lender hereunder.


 


1.15Amendment
to Annex 1. Annex 1 to the Credit Agreement is hereby deleted and replaced in its entirety with Annex 1 hereto.


 


1.16Amendment
to Exhibit A. Exhibit A to the Credit Agreement is hereby deleted and replaced in its entirety with Exhibit A hereto.


 


ARTICLE II

LIMITED CONSENT


 


2.1Consent
to Transfer of Foreign Branch. Notwithstanding the provisions of the Credit Agreement or any other Loan Document to the
contrary, the Agent and the Lenders hereby consent, on a one-time basis, to the transfer of assets of the Borrower held by the
Foreign Branch located in Taiwan to the Borrower’s direct Foreign Subsidiary, Prime World International Holdings, Ltd., a
company registered in the British Virgin Islands, as described in the letter dated February 3, 2016 from the Borrower to the Lenders.


 


2.2Consent to
Modification of Certain of Existing EWB Loan Documents. Notwithstanding the provisions of the Credit Agreement, the other
Loan Documents and the Intercreditor Agreement to the contrary, the Agent and the Lenders hereby consent, on a one-time basis,
to the modification of (a) the Promissory Note described in clause (ii) of the definition of “Existing EWB Loan Documents”
pursuant to the First Modification to Promissory Note dated as of the First Amendment Effective Date, (b) the Construction Loan
Agreement described in clause (iii) of the definition of “Existing EWB Loan Documents” pursuant to the Modification
to the Construction Loan Agreement dated as of the First Amendment Effective Date, and (c) the Promissory Note described in clause
(iv) of the definition of “Existing EWB Loan Documents” pursuant to the Change in Terms Agreement dated as of the First
Amendment Effective Date.


 


2.3Effectiveness
of Consent. This consent shall be effective only to the extent specifically set forth herein and shall not (a) be construed
as a waiver of, or course of dealing with respect to, any breach, Default or Event of Default other than as specifically consented
to herein nor as a waiver of, or course of dealing with respect to, any breach, Default or Event of Default of which the Agent
or Lenders have not been informed by the Loan Parties, (b) affect the right of the Agent or any Lender to demand compliance by
the Loan Parties with all terms and conditions of the Loan Documents, except as specifically modified or waived by this Amendment,
(c) be deemed a waiver of any transaction or future action on the part of the Loan Parties requiring the Agent’s and Lenders’
consent or approval under the Loan Documents, or (d) except as consented to hereby, be deemed or construed to be a waiver or release
of, or a limitation upon, the Agent’s or Lenders’ exercise of any rights or remedies under the Credit Agreement or
any other Loan Document, whether arising as a consequence of any Default or Event of Default which may now exist or otherwise,
all such rights and remedies hereby being expressly reserved.


 


ARTICLE III

CONDITIONS TO EFFECTIVENESS


 


3.1Closing
Conditions. This Amendment shall become effective as of the day and year set forth above (the “Amendment Effective
Date”) upon satisfaction of the following conditions (in each case, in form and substance reasonably acceptable to the
Agent):


 


(a)Executed Amendment.
The Agent shall have received a copy of this Amendment duly executed by each of the Borrower and each Lender.


 


(b)Assignment of
Loans and Commitments Notes. The Agent shall have received documentation evidencing the reallocation of outstanding Loans and
Commitments among the Lenders to effectuate the amendments to Annex 1 made herein.


 


(c)Notes. The
Agent shall have received (i) amended and restated Notes for each Lender with respect to the Facility A Revolving Loans, the Facility
B Revolving Loans, and the Term Loan 1s and (ii) Term Notes for each Lender for each Term Loan 2.


 


(d)Certain Existing
EWB Loan Documents. The Agent shall have received a copy of the First Modification to Promissory Note, the Modification to
the Construction Loan Agreement and the Change in Terms Agreement, each dated as of the First Amendment Effective Date duly executed
by Borrower and East West Bank.


 


(e)Corporate Action.
The Agent shall have received the following, each dated the Amendment Effective Date: (i) copies of (A) the Certificate of Incorporation
of the Borrower, certified as of a recent date by the Secretary of State of its state of organization and (B) a good standing certificate
(or equivalent) from such state; (ii) copies of (A) the bylaws of the Borrower, and (B) resolutions of the Board of Directors
or other authorizing documents of the Borrower, in form and substance satisfactory to the Agent, approving the Loan Documents and
the Borrowings hereunder, certified by the Secretary or an Assistant Secretary of the Borrower (or, in the case of the documents
referenced in clauses (i)(A) and (ii)(A), a certification by such Secretary or Assistant Secretary that such documents have not
been amended or otherwise modified since the Closing Date); and (iii) an incumbency certificate executed by the Secretary or an
Assistant Secretary of the Borrower, certifying the names and signatures of the officers of the Borrower authorized to sign the
Loan Documents.


 


(f)Opinion.
The Agent shall have received a favorable opinion of counsel to the Borrower, covering such corporate, perfection and enforceability
matters as the Agent may reasonably request.


 


(g)Default.
After giving effect to this Amendment, no Default or Event of Default shall exist.


 


(h)Fees and Expenses.
The Agent shall have received from the Borrower such other fees and expenses that are payable in connection with the consummation
of the transactions contemplated hereby and the Agent’s counsel shall have received from the Borrower payment of all outstanding
fees and expenses previously incurred and all fees and expenses incurred in connection with the Credit Agreement and this Amendment.


 


(i)Miscellaneous.
All other documents and legal matters in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory
in form and substance to the Agent and its counsel.


 


ARTICLE IV

MISCELLANEOUS


 


4.1Amended
Terms. On and after the Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents
shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed,
the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.


 


4.2Representations
and Warranties of Loan Parties. The Borrower represents and warrants as follows:


 


(a)It has taken all
necessary action to authorize the execution, delivery and performance of this Amendment.


 


(b)This Amendment has
been duly executed and delivered by the Borrower and constitutes the Borrower’s legal, valid and binding obligation, enforceable
in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).


 


(c)No consent, approval,
authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is
required in connection with the execution, delivery or performance by the Borrower of this Amendment.


 


(d)The representations
and warranties set forth in Article IV of the Credit Agreement or in any other Loan Document are true and correct as of the
date hereof (except for those which expressly relate to an earlier date).


 


(e)After giving effect
to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.


 


(f)The Security Documents
continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Agent on behalf of the Lenders,
which security interests and Liens are perfected in accordance with the terms of the Security Documents and prior to all Liens
other than Permitted Liens.


 


(g)Except as specifically
provided in this Amendment, the Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses
or counterclaims.


 


4.3Reaffirmation
of Obligations. The Borrower hereby ratifies the Credit Agreement and acknowledges and reaffirms (a) that it is bound
by all terms of the Credit Agreement applicable to it and (b) that it is responsible for the observance and full performance
of its respective Obligations.


 


4.4Loan
Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.


 


4.5Expenses.
The Borrower agrees to pay all reasonable costs and expenses of the Agent in connection with the preparation, execution and delivery
of this Amendment, including without limitation the reasonable fees and expenses of the Agent’s legal counsel. The Borrower
hereby authorizes the Agent to debit such costs and expenses from any of the Borrower’s deposit accounts maintained with
the Agent, on the date hereof or at any time hereafter.


 


4.6Further
Assurances. The Borrower agrees to promptly take such action, upon the request of the Agent, as is necessary to carry out
the intent of this Amendment.


 


4.7Entirety.
This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements
and understandings, oral or written, if any, relating to the subject matter hereof.


 


4.8Counterparts;
Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature
page of this Amendment or any other document required to be delivered hereunder, by fax transmission or e-mail transmission (e.g.
“pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement. Without
limiting the foregoing, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed
by such manually executed counterpart.


 


4.9No Actions,
Claims, Etc. As of the date hereof, the Borrower hereby acknowledges and confirms that it has no knowledge of any actions,
causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Agent or
the Agent’s officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or
failure of such Persons to act under the Credit Agreement or any other Loan Document on or prior to the date hereof.


 


4.10GOVERNING
LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW PRINCIPLES.


 


4.11Successors
and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns.


 


4.12Waiver of
Jury Trial; Consent to Jurisdiction; Venue. The waiver of jury trial, jurisdiction and venue provisions set forth in Sections 10.17
and 10.18 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




    	 	 	 



     

    

 


IN WITNESS WHEREOF the
parties hereto have caused this Amendment to be duly executed on the date first above written.


 


 


	 	APPLIED OPTOELECTRONICS, INC., a Delaware corporation
	 	 
	 	 
	 	By: /s/ CHIH-HSIANG (THOMPSON) LIN
	 	Name: CHIH-HSIANG (THOMPSON) LIN
	 	Title: President and CEO
	 	 
	 	 
	 	EAST WEST BANK, as Agent and a Lender
	 	 
	 	 
	 	By: /s/ LINDA LEE
	 	Name: LINDA LEE
		Title:First Vice President
	 	 
	 	 
	 	COMERICA BANK, as Documentation Agent and a Lender
	 	 
	 	 
	 	By: /s/ JENTRI SMITH
	 	Name: JENTRI SMITH
	 	Title: Senior Vice President


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




    	 	13	 



     

    

ANNEX 1


 


Commitments


 


	Lender	Maximum Facility 

A Revolving 

Commitment	Facility B Revolving 

Commitment	Term Loan 1

 Commitment	Term Loan 2

 Commitment
	East West Bank	$17,500,000	$2,500,000	$5,000,000	$5,000,000
	Comerica Bank	$17,500,000	$2,500,000	$5,000,000	$5,000,000


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




    	 	14	 



     

    

EXHIBIT A


 


[FORM OF COMPLIANCE CERTIFICATE]


COMPLIANCE CERTIFICATE


 


THE UNDERSIGNED HEREBY CERTIFY THAT:


 


(1)I am the duly elected
[Title] of Applied Optoelectronics, Inc., a Delaware corporation (the “Borrower”);


 


(2)I have reviewed the
terms of the Credit Agreement, dated as of June 30, 2015(as amended, modified or supplemented, the “Credit Agreement”,
the terms defined therein and not otherwise defined in this Certificate (including Attachment No. 1 annexed hereto and made
a part hereof), being used in this Certificate as therein defined), by and among the Borrower, the Lenders party thereto and East
West Bank, as Agent, and the terms of the other Loan Documents, and I have made, or have caused to be made under my supervision,
a review in reasonable detail of the transactions and condition of Borrower and its Subsidiaries during the accounting period covered
by the attached financial statements; and


 


(3)The examination described
in paragraph (2) above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes
an Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date
of this Certificate[, except as set forth below].


 


(4)Attached as Attachment
1 is a calculation of (i) the financial covenants set forth in Section 7.1 of the Credit Agreement demonstrating compliance
with such covenants for the most recently completed fiscal quarter [year] or at such quarter [year] end and (ii) the Adjusted Current
Ratio, which is not less than 1.50 to 1.00 as of the last day of most recently completed fiscal quarter [year].


 


[Set forth [below] [in a
separate attachment to this Certificate] are all exceptions to paragraph (3) above listing, in detail, the nature of the condition
or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with
respect to each such condition or event:


 





 



 





 



 





 



 





 



 





 


 




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The foregoing certifications,
together with the computations set forth in Attachment No. 1 annexed hereto and made a part hereof and the financial statements
delivered with this Certificate in support hereof, are made and delivered this [_________ day of _____________, ____] pursuant
to Section 6.1(c) of the Credit Agreement.


 


	 	APPLIED OPTOELECTRONICS, INC.
	 	 
	 	 
	 	By:            ______________________________
	 	Name:       ______________________________
	 	Title:        ______________________________


 


 


[Add Attachment 1]




 


 


 


 


 


 


 


 


 


 


 






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