Document:

Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

BY AND BETWEEN OCEAN SHORE HOLDING CO.,
OCEAN CITY HOME BANK

AND STEVEN E. BRADY 

 

THIS
AGREEMENT (the “Agreement”), originally effective December 21, 2004 and subsequently amended December 20,
2006 and November 28, 2007 and amended and restated in its entirety in December 17, 2008 for Section 409A compliance entered into
by and between OCEAN SHORE HOLDING CO., a Maryland chartered
corporation (the “Company”), OCEAN CITY HOME BANK
(the “Bank”), and STEVEN E. BRADY (the “Executive”)
is hereby amended and restated in its entirety effective December 17, 2014.

 

WHEREAS,
Executive serves in a position of substantial responsibility;

 

WHEREAS,
the Bank and the Company wishes to continue to assure the services of Executive for the period set forth in this Agreement under
the terms and conditions outlined in this Agreement; and

 

WHEREAS,
Executive is willing to continue to serve in the employ of the Bank and the Company for said period.

 

NOW,
THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions
hereinafter provided, the parties hereby agree as follows:

 

1.            Employment.
 Executive is employed as the President and Chief Executive Officer of the Company and the Bank. Executive shall perform all
duties and shall have all powers which are commonly incident to the offices of President and Chief Executive Officer or which,
consistent with those offices, are delegated to him by the Board of Directors of the Bank or the Company. During the term of this
Agreement, Executive also agrees to serve, if elected, as an officer and/or director of any subsidiary of the Company and the Bank
and in such capacity will carry out such duties and responsibilities reasonably appropriate to that office.

 

2.            Location
and Facilities. Executive will be furnished with the working facilities and staff customary for executive officers
with the title and duties set forth in Section 1 and as are necessary for him to perform his duties. The location of such facilities
and staff shall be at the principal administrative offices of the Company and the Bank, or at such other site or sites customary
for such offices.

 

3.            Term.

 

		(a)	The term of this Agreement shall include: (i) the initial term of this restatement which shall
commence on December 17, 2014 (the “Effective Date”) and end on the third anniversary of the Effective Date, plus (ii)
any and all extensions of the initial term made pursuant to this Section 3.

 

		(b)	Commencing on the first year anniversary date of this Agreement, and continuing on each anniversary
thereafter, the disinterested members of the boards of directors of the Bank and the Company may extend the Agreement an additional
year such that the remaining term of the Agreement shall be thirty-six (36) months, unless Executive elects not to extend the term
of this Agreement by giving written notice in accordance with Section 19 of this Agreement. The Board of Directors of the Bank
(the “Board”) will review the Agreement and Executive’s performance annually for purposes of determining whether
to extend the Agreement and the rationale and results thereof shall be included in the minutes of the Board’s meeting. The
Board of Directors of the Bank shall give notice to Executive as soon as possible after such review as to whether the Agreement
is to be extended.

 

 

    	 

    	 

    

 

4.            Base Compensation.

 

		(a)	The Bank agrees to pay Executive during the term of this Agreement a base salary at the rate of
$445,875 per year, payable in accordance with customary payroll practices.

 

		(b)	The Board shall review annually the rate of Executive’s base salary based upon factors they
deem relevant, and may maintain or increase his salary, provided that no such action shall reduce the rate of salary below the
rate in effect on the Effective Date.

 

		(c)	In the absence of action by the Board, Executive shall continue to receive salary at the annual
rate specified on the Effective Date or, if another rate has been established under the provisions of this Section 4, the rate
last properly established by action of the Board under the provisions of this Section 4. The Executive’s salary, as the same
maybe modified from time to time, is referred to in this Agreement as the “Base Salary”.

 

5.            Bonuses.
Executive shall be eligible to participate in discretionary bonuses or other incentive compensation programs that the Company and
the Bank may award from time to time to senior management employees pursuant to bonus plans or otherwise.

 

6.            Benefit
Plans.

 

		(a)	Executive shall be entitled to participate in such life insurance, medical, dental, pension, profit
sharing, retirement and stock-based compensation plans and other programs and arrangements as may be approved from time to time
by the Company and the Bank for the benefit of their employees.

 

		(b)	Notwithstanding the foregoing, the Bank shall continue to pay up to $30,000
a year (“maximum annual Bank Contribution”) towards the cost of the Executive’s individual health coverage
premium. Effective January 1, 2015, and each January 1st thereafter, the Bank shall increase the maximum annual Bank Contribution
by twenty percent (20%). Executive shall be responsible for all health insurance costs in excess of the maximum annual Bank Contribution

 

7.            Vacation
and Leave.

 

		(a)	Executive shall be entitled to paid vacation and other leave in accordance with the Bank’s
policy for senior executives, or otherwise as approved by the Board.

 

		(b)	In addition to paid vacations and other leave, Executive shall be entitled, without loss of pay,
to absent himself voluntarily from the performance of his employment for such additional periods of time and for such valid and
legitimate reasons as the Board may, in its discretion, determine. Further, the Board may grant to Executive a leave or leaves
of absence, with or without pay, at such time or times and upon such terms and conditions as the Board in its discretion may determine.

 

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		8.	Expense Payments, Reimbursements and Memberships. 

 

		(a)	Executive shall be reimbursed for all reasonable out-of-pocket business expenses that he shall
incur in connection with his services under this Agreement upon substantiation of such expenses in accordance with applicable policies
of the Company and the Bank.

 

		(b)	The Bank shall continue to pay the annual dues for a golf membership for Executive (in his own
name) at Hidden Creek Golf Club in Egg Harbor Township, New Jersey (“Golf Membership”). In the event Executive opts
to terminate his Golf Membership, Executive is entitled to the entire refundable Membership Deposit. In addition, the Bank shall
provide Executive with a health club membership. The Company or the Bank shall annually include on Executive’s Form W-2 Executive’s
membership fees for the golf and athletic clubs.

 

9.            Automobile
Allowance. During the term of this Agreement, Executive shall be entitled to an automobile allowance on terms no
less favorable that those in effect immediately prior to the execution of this Agreement. Executive shall comply with reasonable
reporting and expense limitations on the use of such automobile as may be established by the Company or the Bank from time to
time, and the Company or the Bank shall annually include on Executive’s Form W-2 any amount of income attributable to Executive’s
personal use of such automobile.

 

10.          Loyalty
and Confidentiality.

 

		(a)	During the term of this Agreement, Executive: (i) shall devote all his time, attention, skill,
and efforts to the faithful performance of his duties hereunder; provided, however, that from time to time, Executive may serve
on the boards of directors of, and hold any other offices or positions in, companies or organizations which will not present any
conflict of interest with the Company and the Bank or any of their subsidiaries or affiliates, unfavorably affect the performance
of Executive’s duties pursuant to this Agreement, or violate any applicable statute or regulation and (ii) shall not engage
in any business or activity contrary to the business affairs or interests of the Company and the Bank.

 

		(b)	Nothing contained in this Agreement shall prevent or limit Executive’s right to invest in
the capital stock or other securities of any business dissimilar from that of the Company and the Bank, or, solely as a passive,
minority investor, in any business.

 

		(c)	Executive agrees to maintain the confidentiality of any and all information concerning the operation
or financial status of the Company and the Bank; the names or addresses of any of its borrowers, depositors and other customers;
any information concerning or obtained from such customers; and any other information concerning the Company and the Bank to which
he may be exposed during the course of his employment. Executive further agrees that, unless required by law or specifically permitted
by the Board in writing, he will not disclose to any person or entity, either during or subsequent to his employment, any of the
above-mentioned information which is not generally known to the public, nor shall he employ such information in any way other than
for the benefit of the Company and the Bank.

 

11.          Termination
and Termination Pay. Subject to Section 12 of this Agreement, Executive’s employment under this Agreement
may be terminated in the following circumstances:

 

		(a)	Death. Executive’s employment under this Agreement shall terminate upon his death
during the term of this Agreement, in which event Executive’s estate shall be entitled to receive the compensation due to
Executive through the last day of the calendar month in which his death occurred.

 

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		(b)	Retirement. This Agreement shall be terminated upon Executive’s retirement under the
retirement benefit plan or plans in which he participates pursuant to Section 6 of this Agreement or otherwise.

 

		(c)	Disability.

 

		(i)	The Board or Executive may terminate Executive’s employment after having determined Executive
has a Disability. For purposes of this Agreement, “Disability” means a physical or mental infirmity that impairs Executive’s
ability to substantially perform his duties under this Agreement and that results in Executive becoming eligible for long-term
disability benefits under any long-term disability plans of the Company and the Bank (or, if there are no such plans in effect,
that impairs Executive’s ability to substantially perform his duties under this Agreement for a period of one hundred eighty
(180) consecutive days). The Board shall determine whether or not Executive is and continues to be permanently disabled for purposes
of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant.
As a condition to any benefits, the Board may require Executive to submit to such physical or mental evaluations and tests as it
deems reasonably appropriate.

 

		(ii)	In the event of such Disability, Executive’s obligation to perform services under this Agreement
will terminate. The Bank will pay Executive, as Disability pay, an amount equal to one hundred percent (100%) of Executive’s
bi-weekly rate of base salary in effect as of the date of his termination of employment due to Disability. Disability payments
will be made on a monthly basis and will commence on the first day of the month following the effective date of Executive’s
termination of employment for Disability and end on the earlier of: (A) the date he returns to full-time employment at the Bank
in the same capacity as he was employed prior to his termination for Disability; (B) his death; (C) upon his attainment of age
65 or (D) the date this Agreement would have expired had Executive’s employment not terminated by reason of disability. Such
payments shall be reduced by the amount of any short- or long-term disability benefits payable to Executive under any other disability
programs sponsored by the Company and the Bank. In addition, during any period of Executive’s Disability, Executive and his
dependents shall, to the greatest extent possible, continue to be covered under all benefit plans (including, without limitation,
retirement plans and medical, dental and life insurance plans) of the Company and the Bank, in which Executive participated prior
to his Disability on the same terms as if Executive were actively employed by the Company and the Bank.

 

		(d)	Termination for Cause.

 

		(i)	The Board may, by written notice to Executive in the form and manner specified in this paragraph,
immediately terminate his employment at any time, for “Cause.” Executive shall have no right to receive compensation
or other benefits for any period after termination for Cause except for vested benefits. Termination for Cause shall mean termination
because of, in the good faith determination of the Board, Executive’s:

 

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		(1)	Personal dishonesty;

 

		(2)	Incompetence;

 

		(3)	Willful misconduct;

 

		(4)	Breach of fiduciary duty involving personal profit;

 

		(5)	Intentional failure to perform stated duties under this Agreement;

 

		(6)	Willful violation of any law, rule or regulation (other than traffic violations or similar offenses)
that reflects adversely on the reputation of the Company and the Bank, any felony conviction, any violation of law involving moral
turpitude, or any violation of a final cease-and-desist order; or

 

		(7)	Material breach by Executive of any provision of this Agreement.

 

		(ii)	Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause
by the Company and the Bank unless there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of a majority of the entire membership of the Board at a meeting of such Board called and held for the purpose of finding
that, in the good faith opinion of the Board, Executive was guilty of the conduct described above and specifying the particulars
thereof.

 

		(e)	Voluntary Termination by Executive without Good Reason. In addition to his other rights
to terminate under this Agreement, Executive may voluntarily terminate employment during the term of this Agreement upon at least
sixty (60) days prior written notice to the Board. Following a voluntary termination of employment under this Section 11(e), Executive
will be subject to the restrictions set forth in Sections 11(g)(i) and 11(g)(ii) of this Agreement for a period of four months
from his termination date. Executive will be entitled to receive his vested rights and employee benefits up to his date of termination
and his base salary through the last day of the four-month period.

 

		(f)	Without Cause or With Good Reason.

 

		(i)	In addition to termination pursuant to Sections 11(a) through 11(e), the Board may, by written
notice to Executive, immediately terminate his employment at any time for a reason other than Cause (a termination “Without
Cause”) and Executive may, by written notice to the Board, immediately terminate this Agreement at any time within ninety
(90) days following an event constituting “Good Reason,” as defined below (a termination “With Good Reason”).

 

		(ii)	Subject to Section 12 of this Agreement, in the event of termination under this Section 11(f),
Executive shall be entitled to receive his base salary for the remaining term of the Agreement paid in one lump sum within ten
(10) calendar days of such termination. Also, in such event, Executive shall, for the remaining term of the Agreement, receive
the benefits he would have received during the remaining term of the Agreement under any retirement programs (whether tax-qualified
or non-qualified) in which Executive participated prior to his termination (with the amount of the benefits determined by reference
to the benefits received by Executive or accrued on his behalf under such programs during the twelve (12) months preceding his
termination) and continue to participate in any benefit plans of the Company and the Bank that provide health (including medical
and dental), life or disability insurance, or similar coverage, upon terms no less favorable than the most favorable terms provided
to senior executives of the Company and the Bank during such period. In the event the Company and the Bank are unable to provide
such coverage by reason of Executive no longer being an employee, the Company and the Bank shall provide Executive with comparable
coverage on an individual policy basis.

 

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		(iii)	For purposes of this Agreement a termination With Good Reason shall occur if the conditions stated
in both clauses (x) and (y) of this Section 11(f) are satisfied:

 

(x)          a voluntary termination
by the Executive shall be considered a termination With Good Reason if any of the following occur without the Executive’s
written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s written
consent:

 

(1)a material diminution of
the Executive’s Base Salary (unless the reduction is part of a company-wide or executive-level restructuring of compensation),

 

(2)a material diminution of
the Executive’s authority, duties, or responsibilities, or

 

(3)a change in the geographic
location at which the Executive must perform services for the Company by more than 25 miles from such location at the effective
date.

 

(y)          the Executive must give
notice to the Company or the Bank of the existence of one or more of the conditions described in clause (x) within sixty (60) days
after the initial existence of the condition, and the Company or the Bank shall have thirty (30) days thereafter to remedy the
condition. In addition, the Executive’s voluntary termination With Good Reason must occur within six (6) months after the
initial existence of one or more of the conditions set forth in (x)(1) – (x)(3) above.

 

(g)         Continuing
Covenant Not to Compete or Interfere with Relationships. Regardless of anything herein to the contrary, following a termination
by the Company and the Bank or Executive pursuant to Section 11(f):

 

		(i)	Executive’s obligations under Section 10(c) of this Agreement will continue in effect; and

 

		(ii)	During the period ending on the first anniversary of such termination, Executive shall not serve
as an officer, director or employee of any bank holding company, bank, savings association, savings and loan holding company, or
mortgage company (any of which, a “Financial Institution”) which Financial Institution offers products or services
competing with those offered by the Bank from any office within fifty (50) miles from the main office or any branch of the Bank
and shall not interfere with the relationship of the Company and the Bank and any of its employees, agents, or representatives.

 

 

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		12.	Termination in Connection with a Change in Control.

 

		(a)	Change in Control Defined. For purposes of this Agreement, a “Change in Control”
means a change in control of the Bank or the Company as defined in Internal Revenue Section 409A of the Code and rules, regulations,
and guidance of general application thereunder issued by the Department of the Treasury, including a “change in ownership,”
“change in effective control” or “change in ownership of a substantial portion of assets.”

 

		(b)	Termination. If within the period ending two (2) years after a Change in Control, (i) the
Company and the Bank shall terminate Executive’s employment Without Cause, or (ii) Executive voluntarily terminates his employment
With Good Reason, the Company and the Bank shall, within ten calendar days of the termination of Executive’s employment,
make a lump-sum cash payment to him equal to 2.99 times Executive’s average Annual Compensation over the five (5) most recently
completed calendar years ending with the year immediately preceding the effective date of the Change in Control. In determining
Executive’s average Annual Compensation, Annual Compensation shall include Base Salary and any other taxable income, including,
but not limited to, amounts related to the granting, vesting or exercise of restricted stock or stock option awards, commissions,
bonuses (whether paid or accrued for the applicable period), as well as, retirement benefits, director or committee fees and fringe
benefits paid or to be paid to Executive or paid for Executive’s benefit during any such year, profit sharing, employee stock
ownership plan and other retirement contributions or benefits, including to any tax-qualified plan or arrangement (whether or not
taxable) made or accrued on behalf of Executive of such year. The cash payment made under this Section 12(b) shall be made
in lieu of any payment also required under Section 11(f) of this Agreement because of a termination in such period. Executive’s
rights under Section 11(f) are not otherwise affected by this Section 12. Also, in such event, Executive shall, for a thirty-six
(36) month period following his termination of employment, receive the benefits he would have received over such period under any
retirement programs (whether tax-qualified or nonqualified) in which Executive participated prior to his termination (with the
amount of the benefits determined by reference to the benefits received by Executive or accrued on his behalf under such programs
during the twelve (12) months preceding the Change in Control) and continue to participate in any benefit plans of the Company
and the Bank that provide health (including medical and dental), life or disability insurance, or similar coverage upon terms no
less favorable than the most favorable terms provided to senior executives during such period.

 

		(c)	The provisions of Section 12 and Sections 14 through 25, including the defined terms used in such
sections, shall continue in effect until the later of the expiration of this Agreement or two years following a Change in Control.

 

		13.	Indemnification and Liability Insurance.

 

		(a)	Indemnification. The Company and the Bank agree to indemnify Executive (and his heirs, executors,
and administrators), and to advance expenses related thereto, to the fullest extent permitted under applicable law and regulations
against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit,
or proceeding in which he may be involved by reason of his having been a director or Executive of the Company, the Bank or any
of their subsidiaries (whether or not he continues to be a director or Executive at the time of incurring any such expenses or
liabilities) such expenses and liabilities to include, but not be limited to, judgments, court cost, and attorney’s fees
and the costs of reasonable settlements, such settlements to be approved by the Board, if such action is brought against Executive
in his capacity as an Executive or director of the Company and the Bank or any of their subsidiaries. Indemnification for expenses
shall not extend to matters for which Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide
indemnification prohibited by applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of
this Section 13 shall survive the term of this Agreement by a period of six (6) years.

 

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		(b)	Insurance. During the period in which indemnification of Executive is required under this
Section, the Company and the Bank shall provide Executive (and his heirs, executors, and administrators) with coverage under a
directors’ and officers’ liability policy at the expense of the Company and the Bank, at least equivalent to such coverage
provided to directors and senior executives of the Company and the Bank.

 

14.         Reimbursement
of Executive’s Expenses to Enforce this Agreement. The Company and the Bank shall reimburse Executive for
all out-of-pocket expenses, including, without limitation, reasonable attorney’s fees, incurred by Executive in connection
with successful enforcement by Executive of the obligations of the Company and the Bank to Executive under this Agreement. Successful
enforcement shall mean the grant of an award of money or the requirement that the Company and the Bank take some action specified
by this Agreement: (i) as a result of court order; or (ii) otherwise by the Company and the Bank following an initial failure
of the Company and the Bank to pay such money or take such action promptly after written demand therefor from Executive stating
the reason that such money or action was due under this Agreement at or prior to the time of such demand.

 

15.         Potential
Limitation of Benefits Under Certain Circumstances. Notwithstanding any other provisions of this Agreement, in
the event that (x) the aggregate payments or benefits to be made or afforded to the Executive under this Agreement or otherwise,
which are deemed to be parachute payments as defined in Section 280G of the Code, or any successor thereof (the “Termination
Benefits”), would be deemed to include an “excess parachute payment” under Section 280G of the Code; and (y)
if such Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar
($1.00) less than an amount equal to three (3) times the Executive’s “base amount,” as determined in accordance
with Section 280G of the Code and the Non-Triggering Amount less the product of the marginal rate of any applicable state and
federal income tax and the Non-Triggering Amount would be greater than the aggregate value of the Termination Benefits (without
such reduction) minus (1) the amount of tax required to be paid by the Executive thereon by Section 4999 of the Code and further
minus (2) the product of the Termination Benefits and the marginal rate of any applicable state and federal income tax, then the
Termination Benefits shall be reduced to the Non-Triggering Amount. The allocation of the reduction required hereby among the
Termination Benefits shall be first deducted from the cash payment due under Section 11 of this Agreement.  Notwithstanding
the foregoing, if required by regulation, the Company and the Bank shall not pay the Executive severance benefits under this Agreement
in excess of three (3) times his average annual compensation (or, if required, such other amount that may be permitted by the
Office of the Comptroller of the Currency pursuant to regulation or regulatory guidance). The Company’s independent public
accountants will determine the value of any reduction in the payments and benefits; the Company will pay for the accountants’
opinion. If the Company, Bank and/or the Executive do not agree with the accountants’ opinion, the Company will pay to the
Executive the maximum amount of payments and benefits pursuant to this Agreement or otherwise, as selected by Executive, that
the opinion indicates have a high probability of not causing any of the payments and benefits to be non-deductible and subject
to the excise tax imposed under Section 4999 of the Code. The Company may also request, and the Executive has the right to demand
that, a ruling from the IRS as to whether the disputed payments and benefits have such tax consequences. The Company or the Bank
will promptly prepare and file the request for a ruling from the IRS, but in no event will the Company or the Bank make this filing
later than thirty (30) days from the date of the accountant’s opinion referred to above. The request will be subject to
the Executive’s approval prior to filing; the Executive shall not unreasonably withhold his approval. The Company, Bank
and the Executive agree to be bound by any ruling received from the IRS and to make appropriate payments to each other to reflect
any IRS rulings, together with interest at the applicable federal rate provided for in Section 7872(1)(2) of the Code. Nothing
contained in this Agreement shall result in a reduction of any payments or benefits to which the Executive may be entitled upon
termination of employment other than pursuant to this Section 15 hereof, or a reduction in the payments and benefits specified,
below zero.

 

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16.         Injunctive
Relief. If there is a breach or threatened breach of Section 11(g) of this Agreement or the prohibitions
upon disclosure contained in Section 10(c) of this Agreement, the parties agree that there is no adequate remedy at law for such
breach, and that the Company and the Bank shall be entitled to injunctive relief restraining Executive from such breach or threatened
breach, but such relief shall not be the exclusive remedy hereunder for such breach. The parties hereto likewise agree that Executive,
without limitation, shall be entitled to injunctive relief to enforce the obligations of the Company and the Bank under this Agreement.

 

		17.	Successors
and Assigns.

 

		(a)	This Agreement shall inure to the benefit of and be binding upon any corporate or other successor
of the Company and the Bank which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Company and the Bank.

 

		(b)	Since the Company and the Bank are contracting for the unique and personal skills of Executive,
Executive shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent
of the Company and the Bank.

 

18.         No
Mitigation. Executive shall not be required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits
provided to Executive in any subsequent employment.

 

19.         Notices.
All notices, requests, demands and other communications in connection with this Agreement shall be made in writing
and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States
Post Office, by registered or certified mail, postage prepaid, addressed to the Company and/or the Bank at their principal business
offices and to Executive at his home address as maintained in the records of the Company and the Bank.

 

20.         No
Plan Created by this Agreement.  Executive, the Company and the Bank expressly declare and agree that this Agreement
was negotiated among them and that no provision or provisions of this Agreement are intended to, or shall be deemed to, create
any plan for purposes of the Employee Retirement Income Security Act or any other law or regulation, and each party expressly waives
any right to assert the contrary. Any assertion in any judicial or administrative filing, hearing, or process that such a plan
was so created by this Agreement shall be deemed a material breach of this Agreement by the party making such an assertion.

 

21.         Amendments.
No amendments or additions to this Agreement shall be binding unless made in writing and signed by all of the parties,
except as herein otherwise specifically provided.

 

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22.         Applicable
Law. Except to the extent preempted by Federal law, the laws of the State of New Jersey shall govern this Agreement
in all respects, whether as to its validity, construction, capacity, performance or otherwise.

 

23.         Severability.
The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions hereof.

 

24.         Headings.
Headings contained herein are for convenience of reference only.

 

25.         Entire
Agreement. This Agreement, together with any understanding or modifications thereof as agreed to in writing by the
parties, shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, other than written
agreements with respect to specific plans, programs or arrangements described in Sections 5 and 6.

 

26.         Required
Provisions. Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned
upon compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R. Section 545.121 and any rules and regulations promulgated thereunder.

 

27.         Source
of Payments. Unless otherwise determined by the Board of Directors of the Company, all payments and benefits provided
in this Agreement shall be paid or provided solely by the Bank. Notwithstanding anything in this Agreement to the contrary, no
provision of this Agreement shall be construed so as to result in the duplication of any payment or benefit. Unless otherwise determined
by the Board of Directors of the Company, the Company’s sole obligation under this Agreement shall be to unconditionally
guarantee the payment and provision of all amounts and benefits due hereunder to Executive and, if such amounts and benefits due
from the Bank are not timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by the Company.

 

28.         Post-Termination
Health Insurance Coverage. The Bank agrees that, upon the Executive’s termination of employment at or after
attaining age 60 for any reason (other than Cause), the Bank will continue health insurance coverage (as the same may be in effect
from time to time for employees of the Bank) for Executive and his spouse at the Bank’s expense through the date that each
of the Executive and his spouse attain age 65. Thereafter, the Bank shall fund the cost of Medicare supplement coverage for the
Executive and his spouse for the remainder of their respective lives. The Executive’s death at or after attaining age 50
shall not affect the entitlement of his spouse to receive benefits described in this Section 28.

 

29.         Compliance with Internal Revenue
Code Section 409A. 

 

		(a)	This Agreement is intended to comply with the requirements of Section 409A of the Code, and specifically,
with the “short-term deferral exception” under Treasury Regulation Section 1.409A-1(b)(4) and the “separation
pay exception” under Treasury Regulation Section 1.409A-1(b)(9)(iii), and shall in all respects be administered in accordance
with Section 409A of the Code. If any payment or benefit hereunder cannot be provided or made at the time specified herein without
incurring sanctions on Executive under Section 409A of the Code, then such payment or benefit shall be provided in full at the
earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A of the Code, all payments to be
made upon a termination of employment under this Agreement may only be made upon a “separation from service” (within
the meaning of such term under Section 409A of the Code), each payment made under this Agreement shall be treated as a separate
payment, the right to a series of installment payments under this Agreement (if any) is to be treated as a right to a series of
separate payments, and if a payment is not made by the designated payment date under this Agreement, the payment shall be made
by December 31 of the calendar year in which the designated date occurs. To the extent that any payment provided for hereunder
would be subject to additional tax under Section 409A of the Code, or would cause the administration of this Agreement to fail
to satisfy the requirements of Section 409A of the Code, such provision shall be deemed null and void to the extent permitted by
applicable law, and any such amount shall be payable in accordance with b. below. In no event shall Executive, directly or indirectly,
designate the calendar year of payment.

 

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		(b)	If when separation from service occurs Executive is a “specified employee” within the
meaning of Section 409A of the Code, and if the cash severance payment under Section 11(f)(ii) or 12(b) of this Agreement would
be considered deferred compensation under Section 409A of the Code, and, finally, if an exemption from the six-month delay requirement
of Section 409A(a)(2)(B)(i) of the Code is not available (i.e., the “short-term deferral exception” under Treasury
Regulations Section 1.409A-1(b)(4) or the “separation pay exception” under Treasury Section 1.409A-1(b)(9)(iii)), the
Bank will make the maximum severance payment possible in order to comply with an exception from the six month requirement and make
any remaining severance payment under Section 11(f)(ii) or 12(b) of this Agreement to Executive in a single lump sum without interest
on the first payroll date that occurs after the date that is six (6) months after the date on which Executive separates from service.

 

		(c)	If (x) under the terms of the applicable policy or policies for the insurance or other benefits
specified in Section 11(f)(ii) or 12(b) of this Agreement it is not possible to continue coverage for Executive and his dependents,
or (y) when a separation from service occurs Executive is a “specified employee” within the meaning of Section 409A
of the Code, and if any of the continued insurance coverage or other benefits specified in Section 11(f)(ii) or 12(b) of this Agreement
would be considered deferred compensation under Section 409A of the Code, and, finally, if an exemption from the six-month delay
requirement of Section 409A(a)(2)(B)(i) of the Code is not available for that particular insurance or other benefit, the Bank shall
pay to Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain
that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had Executive’s employment
not terminated, assuming continued coverage for 36 months. The lump-sum payment shall be made thirty (30) days after employment
termination or, if Section 29(b) of this Agreement applies, on the first payroll date that occurs after the date that is six (6)
months after the date on which Executive separates from service.

 

		(d)	References in this Agreement to Section 409A of the Code include rules, regulations, and guidance
of general application issued by the Department of the Treasury under Internal Revenue Section 409A of the Code.

 

 

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IN
WITNESS WHEREOF, the parties hereto have executed this amended and restated Agreement on December 17, 2014.

 

 

	ATTEST:	 	OCEAN SHORE HOLDING CO.
	 	 	 	 
	 	 	 	 
	/s/ Kim M. Davidson	 	By:	/s/ Robert A. Previti
	Corporate Secretary	 	 	For the Entire Board of Directors
	 	 	 	 
	 	 	 	 
	ATTEST:	 	OCEAN CITY HOME BANK
	 	 	 	 
	 	 	 	 
	/s/ Kim M. Davidson	 	By:	/s/ Robert A. Previti
	Corporate Secretary	 	 	For the Entire Board of Directors
	 	 	 	 
	 	 	 	 
	WITNESS:	 	EXECUTIVE
	 	 	 	 
	 	 	 	 
	/s/ Kim M. Davidson	 	By:	/s/ Steven E. Brady
	Corporate Secretary		 	Steven E. Brady

 

 

    	12Exhibit 10.1

 

General Credit Facility Agreement

 

The undersigned, Applied Optoelectronics,
Inc., Taiwan Branch. (hereinafter referred to as “Borrower”) and it guarantor (hereinafter referred to as
“Guarantor”, together with the Borrower, the "Undersigned") hereby agree to the terms and conditions set
forth below in addition to the General Loan Agreement, Letter of Joint Guarantee and other signed instruments with respect to the
credit facility extended by E. Sun Commercial Bank, Ltd. (hereinafter “Bank”):

 

Part I     Basic Terms

 

		1.	The two types of credit and the
line under this Agreement are as follows (marked with “V”):

  

	Credit in New Taiwan Currency (NTD)	Line of Credit	Credit in foreign currency 	Line of Credit
	■ Working Capital Loan	NTD 120 million	□ Working Capital Loan	USD
	□ Advance for domestic draft	NTD	□ Issuance of foreign letter of credit (L/C)	USD
	□ Export Loan	NTD	■ D/A, D/P, O/A financing 	USD 4 million
	□ Guarantee for issuance of commercial promissory note	NTD	□ Guarantee 	USD
	□ Issuance of domestic letter of credit	NTD	□ 	 
	□ Guarantee 	NTD	□ 	 
	□ 	 	□ 	 

 

Borrower shall draw down the line
up to the above credit line on a revolving basis, provided that the balance of each line of credit upon such drawdown shall not
exceed the general credit line of NTD 120 million. In case of foreign currency, the general credit line shall be calculated
based on the foreign exchange rate published by the Bank.

 

In the event that there exists any
outstanding debt in the credit used by Borrower under the general credit line agreement, the remaining amount of such outstanding
debt shall be incorporated into the credit line and general credit line as defined in this article for the purpose of calculation.

 

In the event that any drawdown is
in foreign currency and exceeds its single credit line or general credit line due to the fluctuation of foreign exchange rate or
otherwise, such exceeding part shall be jointly repaid by the Undersigned.

 

		2.	During the revolving credit facility term, unless otherwise provided by each type of credit, Borrower
may request for loans from the Bank during the period from February 6, 2015 to February 6, 2016, with the initial
drawdown to occur no later than June 6, 2015, or this Agreement shall be void. Even if the amount of the drawdown during
the above revolving credit term shall be repaid after expiration of such term, the Undersigned shall assume the responsibility
for repayment and guarantee as required hereunder.

 

		3.	For the purpose of drawdown of credit, Borrower shall submit a Drawdown Request acceptable to the
Bank and relevant documents and can only draw down the line with the approval of the Bank. Subject to the approval by the Bank,
the term of the drawdown shall be calculated in accordance with the relevant Drawdown Request. Each Drawdown Request and document
shall be deemed a part of this Agreement and shall have the same legal force as this Agreement.

 

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		4.	Borrower agrees that the drawdown shall be deemed received by Borrower once the Bank deposits the
drawdown into the Borrower’s bank account opened with the Bank or satisfies the purpose designated by the Borrower.

 

		5.	Base interest rate and time deposits interest rate index

 

		(I)	Base interest rate

 

		(1)	Basis of pricing:
The base interest rate = the arithmetic average of the overnight TAIBOR over the past three months + the margin determined, where
“the arithmetic average of the overnight TAIBOR over the past three months” is based on the arithmetic average of the
overnight TAIBOR published by “the Taipei Interbank Discount Center” and “the margin determined” will be
the rate determined and subject to adjustment by the Bank in consideration of the funding cost, operational cost and interest risk.
The Bank may in its sole discretion adjust the foresaid calculation to reflect the change of prevailing market environment.

 

		(2)	The reference rate will be based on the arithmetic average of the overnight TAIBOR published by
the Taipei Interbank Discount Center over a full 3-month period (rounded up to two decimal places) prior to the adjustment date.

 

		(3)	Frequency
and method of adjustment

 

		(a)	□ The base interest rate will be adjusted on a quarterly basis respectively on 23 March,
23 June, 23 September and 23 December each year (or the business day that follows if it falls on a non-business day).

 

Frequency of Adjustment Table:

	Adjustment date	23 March	23 June	23 September 	23 December
	Effective period	23 March – 22 June	23 June – 22 September	23 September – 22 December	23 December – 22 March of the following year
	Reference date to be taken	1 December – 29 February	1 March – 31 May	1 June – 31 August	1 September – 30 November

 

		(b)	□ The
base interest rate will be adjusted on a monthly basis on the 23rd day each month (or the business day that follows if it falls
on a non-business day).

  

		(4)	In case of
a major force majeure event (for example, the reference bank acquires or merges or is acquired or merged, is defunct or information
on the overnight TAIBOR is not accessible to the reference bank), the Bank may change the basis for determining the base interest
rate.

  

		(II)	Time deposits interest rate index

 

		(1)	Basis of pricing: The time deposits interest rate index means the average of the interest rates
applicable to one-year time deposits adopted by the reference bank to be selected from among the Bank of Taiwan, Changhwa Bank,
Hua Nan Bank, First Bank, Cooperative Bank, Land Bank, Mega Bank, Cathay United Bank, Taiwan Medium and Small Enterprises Bank
and the Chinatrust Bank (as posted on the website of the Bank as of the drawdown).
	 	 	 
	 	(2)	Frequency
and method of adjustment:

 

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		(a)	□ The time deposits interest rate index will be adjusted on a quarterly basis with adjustments
to occur on 21 February, 21 May, 21 August and 21 November respectively each year (or the business day that follows if it falls
on a non-business day). The reference rate taken will be the average of the daily interest rate posted by the Central Bank of Republic
of China (Taiwan) over the period from the 11th day through the 17th of the month rounded up to two decimal places.

 

Frequency of Adjustment
Table:

	Adjustment date	21 February	21 May	21 August 	21 November
	Effective period	21 February – 20 May	21 May – 20 August	21 August – 20 November	21 November – 20 February of the following year
	Reference date to be taken 	11 – 17 February	11 - 17 May	11 – 17 August	11 – 17 November

 

		(b)	■ The time deposit interest rate index will be adjusted on a monthly basis on the 21st day
each month (or the business day that follows if it falls on a non-business day) and effective from the 21st day of the month through
the 20th day of the following month. The reference rate taken will be the average of the daily interest rate posted by the Central
Bank of Republic of China (Taiwan) over the period from the 11th day through the 17th of the month rounded up to two decimal places.

 

		(3)	The undersigned agree that in the event of any of the following, the Bank may in its sole discretion
change the reference bank and forthwith select another domestic bank for the designated bank to take the reference rate.

 

		(a)	The reference bank merges
or is merged, defunct, voluntarily suspends its business, is bankrupt, subject to reorganization or involuntary business suspension,
or is put under official supervision or takeover as provided in the Article 62 of Banking Act of Republic of China.

 

		(b)	One of the reference banks
has withheld the offer of products to which the fixed interest rate applicable to one-year time deposit applies.

  

		(III)	Manner of disclosure: Each post-adjustment base interest rate and time deposit
interest rate index will be published on the interest rate bulletin board of the business units each of the Bank and the official
website of the Bank (www.esunbank.com.tw).

 

		6.	Borrower hereby authorizes the Bank to withdraw from time to time from Borrower’s current
account (account No. 0809-940-005298) with the Bank via the automatic equipment or based on the evidence of withdrawal of savings
signed by the authorized signatory of the Bank without the relevant passbook, signed request for withdrawal or check drawn by Borrower
for the amount equal to the relevant amount of obligation owed, due and payable by Borrower as well as the relevant cost and charges
incurred (including the principal, interest, default penalty, service charges, service charges of credit guarantee fund, insurance
premium, cost arising from the Bank’s enforcement of the relevant claims in Borrower). Borrower acknowledges and agrees that
the above relevant procedure shall be in accordance with the relevant rules of the Bank and that he/she shall not terminate, withdraw
or impose restrictions on the above authorization without the consent of the Bank before his/her indebtedness owed to the Bank
is duly repaid in full and nor shall he/she close the above savings account. Borrower agrees that this Agreement serve as the evidence
of the above authorization.

 

		7.	The Borrower shall repay in NTD any foreign currency loan and accrued interest at the exchange
rate designated by the Bank at the time of such repayment or at the rate as set forth in a forward foreign exchange purchase agreement
executed by Borrower and the Bank or in the original currency. In the event that Borrower delays in repayment of any loan and the
exchange rate between the foreign exchange loan and the NTD changes, the risk associated with such exchange rate variation shall
be borne by Borrower, and the Bank shall have the right to record the principal, interest and relevant costs in NTD at the exchange
rate published by the bank on the record date and the Undersigned shall not raise any objection to such conversion date, foreign
exchange rate and the amount. However, the Bank shall not be obligated to make such conversion.

 

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		8.	Borrower requesting for drawdown of the credit line shall pay in full the loan, interest, account
opening service fee and guarantee service fee and acceptance service fee. In case of delay in repayment of the Principal, Borrower
shall pay the late payment interest at the rate agreed upon by both parties. In case of delay in repayment of the principal and
interest of less than 6 months, as from the maturity date, the late payment interest at the rate of 10% shall be charged; for the
part the payment of which is delayed for more than 6 months, the late payment interest at the rate of 20% shall be charged. In
the event that Borrower fails to repay the loan or pay any costs on a timely basis, Borrower shall pay the late payment fee at
the base rate of the Bank plus the annual rate of 3.95% as from such maturity day.

 

In the event that Borrower
fails to repay any foreign exchange loan or costs on a timely basis, the late payment interest shall be charged at the foreign
exchange credit interest rate published by the Bank on the maturity date or due date or at the NTD base rate plus an annual rate
of 3.95%, whichever is higher. In case of delay in repayment of the principal and interest of less than 6 months, as from the
maturity date, the late payment interest at the rate of 10% shall be charged; for the part the payment of which is delayed for
more than 6 months, the late payment interest at the rate of 20% shall be charged. In such case, the Undersigned shall be jointly
and severally liable for the necessary costs incurred by the Bank for the purpose of enforcing its claims under this Agreement.

 

		9.	In the event that the Borrower entrusts the Bank to guarantee or accept any bills and the Bank
is obligated to make any advance due to Borrower’s non-performance under any of such, or any breach event as described in
article 5 of the Credit Facility Agreement (in case of the event descried in article 5.2, the Bank shall give a reasonable prior
notice or reminder letter) occurs, then, in order to ensure that the Borrower performs its repayment obligation in respect of such
guarantee or acceptance, the Bank may liquidate first all the bills guaranteed or accepted in the benefit of the Bank without performing
its guarantee or acceptance responsibility and dispose of any collaterals by operation of law. The Bank may, after deduction of
such amounts advanced and any other necessary costs incurred by it, retain the remaining amount of such proceeds to the extent
of the amount payable under such guarantee or bill acceptance. In the event that the collateral is insufficient or absent, the
Undersigned shall replenish the collateral or provide sufficient cash, or allow the Bank to retain the cash deposited by Borrower
with the Bank for any further repayment to the extent of the amount payable under such guarantee or acceptance (in case of time
deposit, the deposit deed shall be terminated first.) In the event that the Bank is exempted from the guarantee or acceptance obligation
without making any advance, such retained amount shall be returned to the Undersigned. (This clause
is otherwise negotiated)

 

		10.	Guarantor represents and warrants to be jointly and severally liable for the obligations, including
the principal, interest, default interest, default penalty, damages and all debts arising from the obligations owed to the Bank
by Borrower under this Agreement. Guarantor further represents and warrants that he/she will neither voluntarily withdraw his/her
guaranty nor refuse to perform his/her obligations as the guarantor by reason of the absence of Guarantor’s specimen-registered
seal on the Drawdown Request issued by Borrower.

 

		11.	The balance of the line of credit hereunder shall be determined subject to the amounts reflected
in the Drawdown Request, the Application For Issuance of Irrevocable Documentary Letter of Credit, or the Bill or the Bank’s
relevant vouchers or book records.

 

		12.	With respect to any operations, responsibilities and liabilities under the line of credit hereunder,
the Undersigned shall comply with, in addition to terms and condition of this Agreement or any other special provisions, the Uniform
Customs and Practice for Documentary Credits, the Uniform Rules for Collections, the International Rules for the
Interpretation of Trade Terms, as well as rules related to foreign exchange administration, published by International Chamber
of Commerce. In case of amendment to any of the above rules, the Bank may, subject to such amended rules, opt to change, adjust
or terminate this Agreement and the Undersigned will not raise any objection thereto.

 

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		13.	This Agreement shall be performed in Banqiao Branch of the Bank. The undersigned agree that
the Taipei District Court or the New Taipei District Court, Taiwan will be the court of first instance having jurisdiction
over all actions arising from or in connection with this Agreement.

 

Part II. Special Terms

 

General
Working Capital Loan

 

In case that the Borrower applies for general working capital loans, it is willing to abide by the following
agreements:

		1.	Each loan term shall not be longer than 180 days. In case of the loan applied in foreign currencies, the maximum term
for each loan shall not exceed  
_________.

		2.	Loan interest shall be calculated and paid from the date of loan on monthly basis based on the interest rate recorded in the
application for allocating loans, or based on   _________% increased annual rate of □ benchmark interest rate □ time
deposit interest rate index (at present it is  _________% of annual rate), and shall be adjusted with the adjustment of pricing interest
rate regulated above.

In case of the loan applied in foreign currencies, the
interest shall be calculated from the date of loan according to the interest rate recorded in the application for allocating loans
or based on  _________.

 

Advance for Domestic Drafts

In case that the Borrower applies for advance for domestic
drafts, it is willing to abide by the following agreements:

		1.	The maximum term for each loan shall not exceed  _________.

		2.	Loan interest shall be calculated and paid from
the date of loan on monthly basis based on the interest rate recorded in the application for allocating loans, or based on 
_________% increased annual rate of □ benchmark interest rate □ time deposit interest rate index (at present it is _________%
of annual rate), and shall be adjusted with the adjustment of pricing interest rate regulated above.

		3.	
The Borrower shall attach the bills obtained from legitimate transactions such as commodity sale, rental or service providing
and approved by the Bank, and transfer them to Bank with endorsement. The loan amount is decided by the Bank.

		4.	The Borrower agrees that the bills provided shall be exchanged and deposited into the special account for payment set by the
Bank on maturity date (i.e. the demand deposit account No.  _________). The Bank shall transfer money from the special account to
offset the Borrower's debts depending on the specimen seal impression at any time with the date, amount, sequence and method of
offsetting the principle and interest decided by the Bank. The offsetting of principle and interest shall be transferred into the
Borrower's only account opened in the Bank, but the Bank has no obligations for the aforesaid items. Without the Bank’s permission,
the Borrower shall not use the deposit in the special account.

		5.	In the event that bills provided by the Borrower cannot be used for acceptance or payment, or the payment is not made on
maturity date, the Bank may be free of issuing the certificate of protest and notify the refusal reasons, and the Borrower shall
redeem the bills with the same amount in cash within 3 days after receipt of the notice. In case of overdue redemption, the Bank
has no need to issue notice or exhortation, and decides that the loan term hereof expires. (This clause is otherwise negotiated)

		6.	If the bill of loan held by the Borrower is lost or destroyed due to delivery or other accidents or is invalid because it is
forged and altered, the Borrower may pay off the debt based on the amount of bill recorded in account books of Bank.

 

    	5

    	 

    

 

Export Loan

In case that the Borrower applies for the export loan,
it is willing to abide by the following agreements:

		1.	The maximum term for each loan shall not exceed _________.

		2.	Loan interest shall be calculated and paid from the date of loan on monthly basis based on the interest rate recorded in the
application for allocating loans, or based on   _________% increased annual rate of □ benchmark interest rate □ time
deposit interest rate index (at present it is _________% of annual rate), and shall be adjusted with the adjustment of pricing interest
rate regulated above.

		3.	The Bank shall require the Borrower to attach the export L/C, export collection files, foreign orders, export contract, orders
or contracts of the domestic traders purchasing export products or documents for export cooperation or contract of accepting the
processing and export approved by the Bank, and based on which the Bank can determine the allocated amount. 

		4.	Borrower’s representation:  

		(1)	If the Borrower attaches export L/C or export collection files to apply for loan, it shall entrust the Bank to handle export
negotiation or export collection formalities of abovementioned L/C, and agree that the money obtained therefrom or from other exports
will be used to repay the principal and interest of the loan first.
	 	(2)	If the Borrower attaches the foreign order or export contract to apply for loan, it shall agree, upon receipt of the order
and letter of credit under the contract or preparing export collection files, to submit the files immediately to the Bank, and
handle the bill purchased or export collection or other settlement procedures to the Bank in the loan term. The export payment
will be used to repay the principal and interest of the loan first.
	 	(3)	If the Borrower attaches the order or contract of the domestic traders purchasing export products or documents for export
cooperation or contract of accepting the processing and export to apply for allocation of loan, the Bank shall require the Borrower
to sign the letter of commitment with the domestic payer of above files paying the payables directly to the Bank. The Borrower
shall also agree to use the payment to liquidate the principal and interest of the loan first.
		(4)	If the Borrower does not attach export L/C, export collection files, orders, contracts and agreements to apply for allocation
of loan, it shall agree to use the payment from export negotiation, export collection or other exports handled in the Bank during
loan term to repay the principal and interest of the loan first.

 

Guarantee for Issuance of Commercial Promissory Notes

In case that the Borrower entrusts the Bank to be the Guarantor
as its issued commercial promissory note, it is also willing to abide by the following agreements:

		1.	The period from the issuance date to the maturity date of each commercial promissory note guaranteed shall not exceed _________ days.

		2.	The Borrower shall pay the guarantee service fee which equals to _________ % of guaranteed amount
                                                        annually, and pay the guarantee service fee to the Bank for once time on the guarantee day.

		3.	After the Bank's guarantee on the commercial promissory note presented by the Borrower, the Borrower is willing to deposit
the note payment in the special account for cashing of the settlement bank designated by the business competent authority prior
to the expiration of the note. For any delay which results the Bank's advances, the Borrower is willing to make full repayment.

 

Bill Acceptance

In case that the Borrower entrusts the Bank to make bill
acceptance, it is willing to abide by the following agreements:

		1.	The maximum term for each acceptance bill from acceptance date to the maturity date shall not exceed  _________days.

		2.	The Borrower shall pay the service fee for the bill acceptance which is  _________% of the bill amount annually in once time
to the Bank on the acceptance date.

		3.	When the Borrower entrusts the Bank for acceptance, it shall also sign a third party's endorsement of the promissory note (for
which the NTD shall prevail and the financier is the payer and is free from providing certificate of protest) approved by the Bank
and transfer to the Bank as counterfoil. The Bank may withdraw the money for payment by the promissory note a business day before
the maturity date. If the Borrower fails to compensate the payment for the promissory note signed above on time, which results
the Bank's advances, the Borrower shall repay the full advances, and pay the interests for overdue payment and penalty in accordance
with the agreement hereof.

 

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Guarantee

In case that the Borrower (namely the Appointer) entrusts
the Bank to make guarantee, it is willing to abide by the following agreements:

		1.	Guarantee items: the files which the Bank approves to issue guarantee shall prevail.

		2.	Each guaranteed money, term and contents, etc. stipulated in the Bank's guarantee files shall prevail.

		3.	In case that the Appointer entrusts the Bank to make guarantee, it shall pay the service fee which is _____% of guarantee money
in actual term or which is recorded in the application used □ at once □_______ to the Bank upon the Bank issuing guarantee
files. Each minimum service fee shall be (currency) _____________. The Appointer may also pay the postage or other expenses, if
any.

		4.	The Appointer shall perform the item subject to the Bank's guarantee according to section 1 above, and will notify the Bank
the performance progress at any time. If the Appointer delays the performance which results in the Bank's payment of guarantee
money in advance, the Appointer may return the full payment immediately, and pay the interests for late payment and penalty in
accordance with the agreement hereof.

		5.	If the Bank is notified by the beneficiary of the issued guarantee files to perform the guarantee responsibility, the Bank
shall, without recognition or concern on whether the conditions of matter guaranteed are met or there are existing disputes, directly
perform the guarantee responsibility.

		6.	In case the letter of credit is applied as guarantee method, the regulations of Uniform Customs and Practice for Letter
of Credit released by international Chamber of Commerce shall be applicable. 

 

Issuance of L/C

In case that the Borrower (namely, the Appointer) entrusts
the Bank to issue the L/C (including sight L/C, usance L/C and advance L/C), it may abide by the following agreements:

		1.	In case that the Appointer entrusts the Bank to issue domestic L/C, it is willing to abide by the following agreements:

		(1)	When the Appointer entrusts the Bank to issue the domestic sight L/C, the draft shall be payable at sight and the liquidation
date for each debt shall be the day before the beneficiary notifies the payment or the maturity date notified by the Bank. In case
that the Bank agrees to make the payment of sight draft as advance payment to beneficiary through the Appointer's application,
the maximum term for advance payment is 10 days with the interest rate calculated on monthly basis based on the Bank's _______%
increased annual interest of □ benchmark interest rate □ time deposit interest rate index (at present it is ______%
of annual interest) and shall be adjusted with the adjustment of pricing interest rate regulated above.

		(2)	When the Appointer entrusts the Bank to issue the domestic usance L/C, the maximum term of the draft shall not exceed ________
days. The Appointer shall hand over the principle and interest to the Bank for payment one day before the maturity date of the
draft under the L/C or on the date notified by the Bank.

		(3)	For all draft payment under the L/C made by the Bank in advance, the Appointer shall entrust the Bank to collocate short-term
loans as repayment depending on the Application for Issuance of the Domestic Irrevocable Credit, and take the contract and
above Application as certificates of loan and may abide by the following agreements:

		a)	The maximum term for each loan shall be _________ days. Loans still shall be handled after the period
of use of the credit line in the contract or (and) after the validity period of the L/C.

		b)	The interest is calculated based on the rate notified by the Bank, or based on _______% increased
annual interest of □ benchmark interest rate □ time deposit interest rate index (at present it is ______% of annual
interest) and shall be adjusted with the adjustment of pricing interest rate regulated above.

		c)	After the Bank transfers the loan into the Appointer's No. _______ account for ________ deposit,
the deposit shall be used to pay the amount of the draft or L/C by automation equipment or personnel in the Bank who is entitled
to sign issuing certificate of deposit expenditure or transferring through without depending on the Appointer's deposit book or
withdrawal slip, and its processing method shall be subject to related stipulations in the Bank with the contract as proof of authorization.

 

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		2.	In case that the Appointer entrusts the Bank to issue foreign L/C, it is willing to abide by the following agreements:

		(1)	When the Appointer applies for the foreign L/C in the Bank, it shall fill out one by one the Application for L/C and
files required by the Bank. For identification of the credit balance, the contracting parties agree that the amount recorded in
the Application for L/C presented by the Appointer or in the Bank's related draft and account book shall prevail.

		(2)	The Appointer admits that the difference between each amount of L/C recorded in the Application for L/C and the settled amount
has been paid by the Bank is payment made by the Bank in advance, and agrees to take the Application for L/C or the Bank's
relevant documents as certificates.
	 	(3)	When the Appointer applies for the foreign sight L/C in the Bank, it shall repay the advance and
pay the interest raised herefrom and related costs within 15 days after delivering the shipping documents under each L/C and receiving
the Bank's notice. But in any of the following circumstances, the repayment period is as follows:

	 	a)	When the shipping documents has arrived while the goods has not yet arrived, the Appointer shall submit the certificate
documents from the shipping company and make repayment within 3 days after arrival of the goods. If the goods have not arrived
after 60 days of delivery of shipping documents and receiving the Bank's notice, the Appointer shall make repayment immediately.
	 	b)	When the goods have arrived while the shipping documents have not been delivered, and the countersigning letter
of guarantee needs to be applied for, the Appointer shall make repayment immediately and pay interests for 7 days first; the same
shall apply for taking delivery of goods by duplicate B/L endorsement.
		c)	In case of partial shipment of goods, the Appointer shall repay the Bank's advances according to
the proportion of the amount of batch shipping documents to the amount of the L/C.

		(4)	When the Appointer applies for the foreign usance L/C in the Bank, the maximum term, calculated from the invoice date or payment
date of the Bank's foreign agency, for draft or loan under the L/C shall not exceed ______ days with the maturity date of the draft
or the date noticed by the Bank as the liquidation date.

		(5)	Interests of advances in foreign currency under the Special Terms shall be calculated based on the rate noticed by the Bank
during payment date of the Bank or foreign agency to the maturity date of advances. At the same time, the Bank shall adjust the
interest in a timely manner in accordance with the foreign exchange business credit interest rates set by the foreign exchange
trading center or the Bank's borrowed foreign exchange capital cost increased interest rates.

		(6)	For all draft payment under the L/C made by the Bank in advance, the Appointer shall present application, promissory note or
other debt certificates, entrust the Bank to make repayment by short-term loans in NTD it applied for, take the contract as certificate
of loan and is willing to abide by the following agreements:

		a)	The maximum term for each loan shall be _________ days. Loans still shall be handled after the period
of use of the credit line in the contract or (and) after the validity period of the L/C.

		b)	The interest is calculated based on the rate recorded in the application, or _______% increased
annual interest of □ benchmark interest rate □ time deposit interest rate index (at present it is ______% of annual
rate) and shall be adjusted with the adjustment of pricing interest rate regulated above.

		(7)	If the Appointer fails to handle the customs clearance delivery procedures after the arrival of shipping documents under
each L/C, which leads the Bank to suffer any loss, term of advances for it shall be deemed as expired after the Bank's notice and
exhortation in reasonable period, and the Bank shall request compensation in NTD, or make custom declaration and delivery of goods
in order to preserve creditor's rights. The Bank can also sell imported goods at auction or conduct disposal (including method,
price and time, etc.) to liquidate the debt for the Bank and for all expenses and losses (including taxes paid for customs clearance
delivery, transport costs and other costs) due to the disposal. Contracting parties shall take the joint responsibilities to repay
for the part not compensated. (This clause is otherwise negotiated)

 

    	8

    	 

    

 

		(8)	When the Appointer imports goods by import collection method, it shall provide countersigning letter of guarantee duplicate
bill endorsement within the agreed credit line subject to the Bank's agreement, and shall submit the affidavit (special for import
collection guarantee delivery or duplicate bill endorsement) for each time and relevant contract and documents the Bank required.
The contracting parties approve to, based on the amount and agreed items in each affidavit and related contract documents, be responsible
for the compensation for the Bank's damage until the Appointer completes the bill acceptance or makes payment after the Bank receives
the foreign documents.
	 	(9)	In the countersigning letter of guarantee duplicate bill endorsement under L/C or imported collection signed by the Bank
as applied for by the Appointer, if the goods, specifications, unit price, total amount and delivery conditions listed are inconsistent
with shipping documents received subsequently, the Appointer may be responsible for paying the balance and handling bill acceptance,
payment and other formalities according to the conditions listed in the shipping documents.
	 	(10)	Any loss suffered by the Bank due to the inconsistency between content of documents signed by the Bank and documents received,
the contracting parties may assume all responsibility for compensation.
	 	(11)	The content recorded in the affidavit of B/L or duplicate bill endorsement contained shall be regarded as attachment hereto
and the contracting party is willing to abide by it. The Appointer may provide shipping documents and purchasing goods recorded
in the L/C hereunder and alternative pledge of guaranteed goods as the guarantee of advances, loans and other debts under the L/C,
and take the contract as certificate of guarantee. The Appointer agrees the Bank to obtain the pledge of right for all delivery
certificates (such as import license and related delivery documents, etc.) of purchased material from the date of the Bank issuing
the L/C to the date of the purchased good arriving, and obtain the pledge of movables from delivery date of the purchased goods.
In case of the defects of documents listed in the shipping documents arrival notice under each L/C, if the Appointer does not accept
the defects and entrusts the Bank to negotiate with foreign negotiating bank, the Bank bears no responsibility for failure of the
negotiation. The Appointer may also be responsible for repaying the principle and interests of advances and loans and expenses
occurred according to the stipulations hereof with any loss caused to the Bank's right be compensated by contracting parties.
		(12)	Various clauses in the Special Terms shall still be applicable when the Appointer entrusts the Bank to issue the L/C financing
in a triangle trade.

		3.	Besides the above two agreements, the Appointer may still abide by the following agreements:

		(1)	If the Bank agrees to handle the L/C hereunder, the service fee shall be calculated according to the rate stipulated by the
Bank.

		(2)	Through the Bank's review, if the draft and its auxiliary documents under the L/C issued by the Bank as entrusted by the Appointer
are in line with the L/C conditions and of which the acceptance and payment are completed, the Appointer may make payment on time.
In the event that the above draft is proved to be fake, forged or altered or to be defective (including inconsistency of quality
or quantity of goods with that on documents), the Bank shall bear no responsibility, and the Appointer shall not refuse the payment
by any reason.

		(3)	In case that the L/C hereunder is transferred in error, delayed or interpreted in error, all or part of the document or goods
recorded in documents are destroyed, delayed or not sent to the goods delivery place, goods are lost or damaged in transport process
or destination because of it is uninsured or underinsured or detained by any third party or due to other factors, the Bank shall
bear no responsibility. The Appointer shall still make full payment in accordance with the amount recorded in the L/C.

		(4)	In case that the beneficiary of the L/C or the salesperson does not fulfill the contract, goods purchased under each L/C are
delivered in delay or are defective or lost and damaged due to force majeure, or the insurance company refuses claim, the claim
is insufficient or compensation is delayed, the Appointer shall assume all responsibilities. If the term of L/C has been expired
for 3 weeks, the Bank may directly cancel it and use the payments from returned remittance to compensate the advances and loans
hereunder.

 

    	9

    	 

    

 

		(5)	If required by the Bank, the Appointer may obtain the Bank's agreement for insurance types and conditions of goods under each
L/C, and hand over the original insurance policy and copy of its receipt to the Bank with the Bank as the priority beneficiary.
The Bank, if necessary, shall notice the Appointer to buy other insurance with all expenses borne by the Appointer. If the Appointer
does not apply for insurance or renew insurance after expiration, the Bank shall handle for it without the obligations in buying
insurance. If the Bank pays the coasts occurred in handling, the Appointer may make repayment immediately.

 

D/A, D/P and O/A Financing

In case that the Borrower applies for D/A, D/P and O/A
financing, it is willing to abide by the following agreements:

	1.	The term for each loan shall not exceed 180 days.
	2.	The interest shall be calculated from the date of loan based on _________  or the interest rate recorded in the application
for loans.
	3.	For the import financing part, the Bank shall apply the loan allocated as repayment for the payable
foreign exchange funds of the Borrower handling the D/A, D/P and O/A, etc. in the Bank.
	4.	The Borrower shall apply loan in other foreign currencies under D/A, D/P and O/A to the Bank with each amount calculated
in USD in accordance with the exchange rate designated by the Bank, and revolved within the limit stipulated herein.
	5.	When the
Borrower applies for importing goods under D/A, D/P and O/A, it shall provide countersigning letter of guarantee duplicate bill
endorsement within the limit of borrowed money stipulated herein subject to the Bank's agreement, and shall submit the affidavit
(special for import collection guarantee delivery or duplicate bill endorsement) for each time and relevant contract and documents
the Bank required. The contracting parties and the Guarantor approve to, based on the amount and agreed items in each affidavit
and related contract documents, undertake responsibility for the compensation for the Bank's damage until the contracting parties
complete the bill acceptance or make payment after the Bank receives the foreign documents.

		6.	When the Borrower applies for the loan under D/A, D/P and O/A, it shall present application for
loan, promissory note or other debt certificates, and entrust the Bank to make repayment by short-term loans in NTD it applied
for, take the contract as the certificate of loan and is willing to abide by the following agreements:

		(1)	The maximum term for each loan shall be _________ days. The loan still shall be conducted after the period of using the credit
line.

		(2)	The interest is calculated based on the rate recorded in the application when borrowing, or based on _______ interest rate
______ annual interest __________% (at present it is ______% of annual interest) and shall be adjusted with the adjustment of __________
interest rate regulated above.

		(3)	In case of the damage or depreciation of all or part of goods purchased or sold by using the loans due to stranding, theft,
fire and flood or other incidents of force majeure in transport, or if the insurance company refuses claim or makes inadequate
compensation or delays compensation, or such goods cannot be imported or exported for other reasons, the contracting party shall
make disposal by itself without any obligation and responsibility on the Bank.

 

    	10

    	 

    

 

Yours sincerely

 

E. Sun Commercial Bank

 

The contracting parties declare
that they have reviewed all above clauses and made full understanding. It is hereby to promise to sign the Contract with the signing
and seal as follows:

 

	Borrower:	Applied Optoelectronics, Inc., Taiwan Branch	(Seal)
	Responsible Person:	Chih-Hsiang Lin	 
	Address:	No.18, Gong 4th Rd., Linkou District,	 
	 	 New Taipei City	 
	Joint Guarantor:	 	(Seal)
	Address 	 	 
	 	 	 
	 	 	 
	Joint Guarantor:	 	(Seal)
	Address 	 	 
	 	 	 
	 	 	 
	Joint Guarantor:	 	(Seal)
	Address:	 	 
	 	 	 
	 	 	 
	Joint Guarantor:	 	(Seal)
	Address:	 	 

 

 

The March 9, 2014 year of the Republic of China’s
Era.

 

 

Credit Account No.
009977  Reviewed by:________ Handled by::________ Checked by: 

 

    	11

    	 

    

 

Promissory
Note

 

The drawer promises to pay the sum of one hundred and twenty
million New Taiwan Dollars unconditionally to E. Sun Commercial Bank or to the order of E. Sun Commercial Bank on
the date of  fixed by this promissory note.

 

	1.		The interest is calculated based on _______ interest rate ______ annual interest __________%
(at present it is ______% of annual interest) in □fixed or □floating mode since
the issuing date of this note and is paid by month. If the floating mode is selected, the drawer agrees to adjust the abovementioned
interest based on the adjustment of _______interest rate regulated above. In case of any delay in paying the interest or failure
to perform obligations when due, a penalty shall be charged as follows: 10% of the agreed interest rate for the delay or failure
that lasts for less than six months, as from the due date; 20% of the agreed interest rate for the delay or failure that exceeds
six months.

	2.		Under this note, either the protest or notification obligations stipulated in Article
89 of the Negotiable Instruments Act are waived.

	3.		Place of Payment: No. 90, Section 2, Wenhua Road, Banqiao District, New Taipei City

 

Maker: Applied Optoelectronics, Inc., Taiwan Branch (Seal)

 

 

Responsible Person: Chih-Hsiang Lin

Address: No. 18 Gong 4th Road, Linkou District, New Taipei City

 

	Maker:	(Seal)
	Address:	 
	 	 
	Maker:  	(Seal)
	Address:	 
	 	 
	Maker:   	 (Seal)
	Address:	 

 

 

The Republic of China, March 9, 2015

 

Credit Account No. 009977 

Approval Code: H145416821  Reviewed by: ________ Handled
by:  _________ Checked by: __ 

 

	L577A 2005.11 	 (In this version, the interest is left blank.)

 

    	12

    	 

    

Letter of
Authorization

 

The Authorizing Parties signed and delivered a promissory note amounting
to Ninety million New Taiwan Dollars to your bank as the guarantee for the indebtedness on March 9, 2015. To meet the actual needs,
the Authorizing Parties authorize your bank or the agents and employees of your bank to directly fill in the maturity date, interest
rate, place of payment, and other items that shall be recorded on this promissory note to effectively fulfill rights associated
with this note. Without the written approval from your bank, the Authorizing Parties shall not revoke or restrict this authorization.

 

Yours sincerely

E. Sun Commercial Bank

 

Authorizing Party: Applied Optoelectronics, Inc., Taiwan Branch
(Seal)

 

 

Responsible Person: : Chih-Hsiang Lin

 

 

	Authorizing Party: 	(Seal)
	 	 
	 	 
	Authorizing Party: 	(Seal)
	 	 
	 	 
	Authorizing Party: 	(Seal)

 

 

 

 

 

 

 

The Republic of China, March 9, 2015

 

Credit Account No. 009977

Approval Code: H145416821  Reviewed by:___ Handled
by: ___ Checked by: ___

 

 

	L577A 2005.11	  (In this version, the interest is left blank.)

 

 

 

    	13

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