Document:

Exhibit 10.5

 

TRADEMARK SECURITY AGREEMENT

 

This
TRADEMARK SECURITY AGREEMENT (this "Agreement") is made this 28th day
of September, 2017, between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (together with its successors
and assigns, "Lender"), and APPLIED OPTOELECTRONICS, INC., a Delaware corporation ("Company").

 

Recitals:

 

Company
desires to obtain loans and other financial accommodations from Lender pursuant to that certain Loan Agreement dated the date
hereof (as at any time amended, restated, supplemented or otherwise modified, the "Loan Agreement") by and between
Company and Lender.

 

Lender
is willing to make loans and other financial accommodations to Company from time to time, pursuant to the terms of the Loan Agreement,
provided that, among other things, Company executes this Agreement.

 

NOW,
THEREFORE, for Ten Dollars ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Company hereby agrees with Lender as follows:

 

1.                  
Capitalized terms used herein (including those used in the Recitals hereto), unless otherwise defined, shall have the meanings
ascribed to them in the Loan Agreement. As used herein, the term "Full Payment" shall mean full and final payment
of the Obligations (as defined in the Security Agreement) (hereinafter, the "Obligations") and termination of
Lender's financing arrangements with Company; and the term "UCC" shall mean the Uniform Commercial Code as in effect
from time to time in the State of Texas.

 

2.                   To
secure the prompt payment and performance of all of the Obligations, Company hereby grants, assigns and pledges to Lender a continuing
security interest in and lien upon all of the following property of Company, whether now owned or existing or hereafter created
or acquired and wherever located (collectively, the "Trademark Collateral"):

 

(a)               
all state (including common law), federal and foreign trademarks, service marks and trade names, corporate names, company
names, business names, fictitious business names, trade styles, trade dress, logos, other source or other business identifiers,
domain names, designs and general intangibles of like natures, together with and including all licenses therefor held by company
(unless otherwise prohibited by any license or related licensing agreement under circumstances where the granting of the security
interest would have the effect under applicable law of the termination or permitting termination of the license for breach and
where the licensor has elected such termination remedy), and all registrations and recordings thereof, and all applications filed
or to be filed in connection therewith, including registrations and applications in the United States Patent and Trademark Office,
any State of the United States or any other country or any political subdivision thereof (but excluding any "intent-to-use"
application for registration of the trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. Section 1051, prior
to the filing of a "Statement of Use" pursuant to Section 1(d) of the Lanham Act or an "Amendment to Allege Use"
pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any, that, and solely during the period,
if any, in which, the grant of a security interest therein would impair the validity or enforceability of any registration that
issues from such intent-to-use application under applicable federal law), and all extensions or renewals thereof, including any
of the foregoing identified on Exhibit A hereto (as the same may be amended, modified or supplemented from time to time),
and the right (but not the obligation) to register claims under any state or federal trademark law or regulation of any foreign
country and to apply for, renew and extend any of the same, to sue or bring opposition or cancellation proceedings in the name
of Company or in the name of Lender for past, present or future infringement or uncontested use thereof, and all rights arising
therefrom throughout the world (collectively, the "Trademarks");

 

 

 

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(a)               
all claims, causes of action and rights to sue for past, present or future infringement or unconsented use of any Trademarks
and all rights arising therefrom and pertaining thereto;

 

(b)               
all general intangibles (as defined in the UCC) related to or arising out of any of the Trademarks and all the goodwill
of Company's business symbolized by the Trademarks or associated therewith; and

 

(c)               
all proceeds of any and all of the foregoing Trademark Collateral, including, without limitation, license royalties, rights
to payment, accounts receivable, proceeds of infringement suits and all payments under insurance or any indemnity, warranty or
guaranty payable by reason nor loss or damage to or otherwise with respect to the foregoing Trademark Collateral.

 

3.                   Company represents and warrants to Lender that:

 

(a)               
Each of the Trademarks is subsisting and has not been adjudged invalid or unenforceable;

 

(b)               
To be best of its knowledge, no claim has been made that the use of any of the Trademarks does or may violate the rights
of any Person;

 

(c)
Company has the unqualified right to enter into this Agreement and perform its terms;

 

(d)
To the best of its knowledge, each of the Trademarks is valid and enforceable; and

 

(e)               
Company is the sole and exclusive owner of the entire right, title and interest in and to all of the Trademark Collateral,
free and clear of any Liens, charges and encumbrances (except licenses permitted pursuant to paragraph 6 below), including, without
limitation, pledges, assignments, licenses, registered user agreements and covenants by Company not to sue third Persons.

 

4.                   Company covenants and agrees with Lender that:

 

(a)               
Company will maintain the quality of the products associated with the Trademarks, at a level consistent with the quality
at the time of this Agreement, and will, upon Lender's request, provide Lender with a certificate to that effect executed by an
officer of Company;

 

(b)               
Company will not intentionally change the quality of the products associated with the Trademarks without Lender's prior
written consent; and

 

 

 

 

 

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(c)               
Except for Trademarks abandoned by Company in the ordinary course of business (provided such abandonment could not be reasonably
expected to have a material adverse effect on Company or its business), Company has used and will continue to use for the duration
of this Agreement, proper statutory notice in connection with its use of the registered Trademarks, including, without limitation,
filing an affidavit of use with the United States Patent and Trademark Office and any applicable foreign filing office for each
registered Trademark as required by applicable law to maintain the registration thereof without loss of protection therefor.

 

5.                  
Company hereby grants to Lender and its employees and agents the right to visit Company's plants and facilities which manufacture,
inspect or store products sold under any of the Trademarks in accordance with the terms of Section DD.06(b) of Schedule DD to the
Loan Agreement.

 

6.                  
Until Full Payment of all of the Obligations, Company shall not enter into any license agreement relating to any of the
Trademarks with any person or entity except non-exclusive licenses to customers, vendors, suppliers, agents or other service providers
of Company in the regular and ordinary course of Company's business as presently conducted and for reasonable and customary compensation,
and shall not become a party to any agreement with any person or entity that is inconsistent with Company's obligations under this
Agreement.

 

7.                  
If, before Full Payment of all of the Obligations, Company shall obtain rights to any new trademarks, or become entitled
to the benefit of any trademark application or trademark or any renewal of any Trademark, the provisions of paragraph 2 hereof
shall automatically apply thereto, and Company shall give to Lender prompt notice thereof in writing.

 

8.                  
Company irrevocably authorizes and empowers Lender to modify this Agreement by amending Exhibit A to include any
future trademarks and trademark applications under paragraph 2 or paragraph 7 hereof.

 

9.                  
At any time that an Event of Default exists, Lender shall have, in addition to all other rights and remedies given it by
this Agreement and the other Loan Documents, all rights and remedies of a secured party under the UCC and all other rights and
remedies under applicable law. Without limiting the generality of the foregoing, Lender may immediately, without demand of performance
and without notice (except as described in the next sentence, if required by applicable law, or demand whatsoever to Company, each
of which Company hereby expressly waives), collect directly any payments due Company in respect of the Trademark Collateral, or
sell at public or private sale or otherwise realize upon all or from time to time, any of the Trademark Collateral. Company hereby
agrees that ten (10) days written notice to Company of any public or private sale or other disposition of any of the Trademark
Collateral shall be reasonable notice; provided, however, that no notice shall be required hereunder if not otherwise
required by applicable law. At any such sale or disposition, Lender may, to the extent permitted by law, purchase the whole or
any part of the Trademark Collateral sold, free from any right of redemption on the part of Company, which right Company hereby
waives and releases. After deducting from the proceeds of such sale or other disposition of the Trademark Collateral all reasonable
costs and expenses incurred by Lender in enforcing its rights hereunder (including, without limitation, all reasonable attorneys'
fees), Lender shall apply the remainder of such proceeds to the payment of the Obligations in such order and manner as may be authorized
or required by the Loan Agreement. Any remainder of the proceeds after Full Payment of all of the Obligations shall be paid over
to Company. If any deficiency shall arise, Company shall remain liable therefor.

 

10.                 Company
hereby makes, constitutes and appoints Lender and any officer or agent of Lender as Lender may reasonably select, as Company's
true and lawful attorney-in-fact, with full power to do any or all of the following if an Event of Default shall exist: to endorse
Company's name on all applications, documents, papers and instruments necessary for Lender to continue the registration of or
to use the Trademarks, or to grant or issue any exclusive or nonexclusive license under the Trademarks to any other Person, or
to assign, pledge, convey or otherwise transfer title in or dispose of any Trademark Collateral to any other Person. Company hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney, being coupled
with an interest, shall be irrevocable until Full Payment of all of the Obligations, upon which time such power of attorney will
automatically terminate (unless sooner terminated by the parties).

 

 

 

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11.                 Any
and all reasonable fees, costs and expenses, of whatever kind or nature (including, without limitation, reasonable attorneys'
fees and legal expenses) incurred by Lender in connection with the preparation of this Agreement and any other documents relating
hereto and the consummation of this transaction, the filing or recording of any documents (including, without limitation, all
taxes in connection therewith) with the United States Patent and Trademark Office or in any other public offices, the payment
or discharge of any taxes, counsel fees, maintenance fees, and Liens or otherwise protecting, maintaining, or preserving the Trademark
Collateral, or in defending or prosecuting any actions or proceedings arising out of or related to the Trademark Collateral, shall
be borne and paid by Company (it being the intent of the Company and Lender that Company shall be responsible for the payment
of all sums, fees, costs and expenses incurred, including, without limitation, all renewal fees with respect to the Trademarks)
or, if paid by Lender in its sole discretion, shall be reimbursed by Company on demand by Lender and until so paid shall be added
to the principal amount of the Obligations and shall bear interest at the Default Rate then applicable to the Line of Credit.

 

12.                 Company
shall use its commercially reasonable efforts to detect any infringers of the Trademarks and shall notify Lender in writing of
material infringements detected. Company shall have the duty, through counsel acceptable to Lender, to prosecute diligently any
trademark application for a Trademark pending as of the date of this Agreement or thereafter until Full Payment of all of the
Obligations, to make federal application on registrable but unregistered Trademarks (subject to Company's reasonable discretion
in the ordinary course of business or, during the existence of an Event of Default or a Default, promptly upon Lender's request),
to file and prosecute opposition and cancellation proceedings, to file and prosecute lawsuits to enforce the Trademarks and to
do any and all acts which are deemed necessary or desirable by Lender to preserve and maintain all rights in the Trademarks, unless
in any such case Company has reasonably determined that such Trademark is no longer material to the conduct of its business. Any
expenses incurred in connection with such applications or proceedings shall be borne by Company. Company shall not abandon any
right to file a trademark application, or any pending trademark application or trademark without the consent of Lender, unless
Company has determined that such trademark application or trademark is no longer necessary or material to the conduct of its business.

 

13.                 Notwithstanding
anything to the contrary contained in paragraph 12 hereof, at any time that an Event of Default exists, Lender shall have the
right, but shall in no way be obligated, to bring suit instead in its own name to enforce the Trademarks and any license hereunder,
or to defend any suit or counterclaim in its own name to protect the Trademarks or any license hereunder, in either of which events
Company shall at the request of Lender do any and all lawful acts (including bringing suit) and execute any and all proper documents
required by Lender to aid such enforcement, or defense, and Company shall promptly, upon demand, reimburse and indemnify
Lender for all reasonable costs and expenses incurred in the exercise of Lender's rights under this paragraph 13.

14.                 If
Company fails to comply with any of its obligations hereunder and at the time of such failure or as a result thereof an
Event of Default exists, then to the extent permitted by applicable law, Lender may discharge such obligations in Company's
name or in Lender's name, in Lender's sole discretion, but at Company's expense, and Company agrees to reimburse Lender in
full for all expenses, including, without limitation, reasonable attorneys' fees, incurred by Lender in prosecuting,
defending or maintaining the Trademarks or Lender's interest therein pursuant to this Agreement.

 

 

 

 

 

 

 

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15.                 No
course of dealing between Company and Lender, nor any failure to exercise, nor any delay in exercising, on the part of Lender,
any right, power or privilege hereunder or under any of the other Loan Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

 

16.                 All
of Lender's rights and remedies with respect to the Trademark Collateral, whether established hereby or by any of the other Loan
Documents, or by any other agreements or by applicable law shall be cumulative and may be exercised singularly or concurrently.

 

17.                 The
provisions of this Agreement are severable, and if any clause or provision shall be held invalid and unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause
or provision of this Agreement in any jurisdiction.

 

18.                 This
Agreement, together with the other Loan Documents, constitutes and expresses the entire understanding of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and understandings, inducements or conditions, whether
expressed or implied, oral or written. This Agreement is subject to modification only by a writing signed by the parties, except
as provided in paragraph 8 hereof.

 

19.                 The
benefits and burdens of this Agreement shall inure to the benefit of and be binding upon the successors and assigns of Lender
and upon the successors and permitted assigns of Company. Company shall not assign its rights or delegate its duties hereunder
without the prior written consent of Lender.

 

20.                 Company hereby waives notice of Lender's acceptance hereof.

 

21.                 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas.

 

22.                 To the fullest extent permitted by applicable law, Company and Lender each waives the right to trial by jury in any action,
suit, proceeding or counterclaim of any kind arising out of or related to this Agreement or the Trademark Collateral.

 

23.                 Upon
Full Payment, Lender shall execute and deliver to Company, at Company's request and at Company's expense, all releases, termination
statements, and other instruments as may be necessary or proper to release or reflect the release of Lender's security interest
in the Trademark Collateral, including all documentation necessary to reflect such release in the United States Patent and Trademark
Office.

 

[Remainder of page intentionally left blank; signatures
appear on following pages.]

 

 

 

 

 

 

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WITNESS the execution hereof as of the date first above written.

 

 

 

	 	APPLIED OPTOELECTRONICS, INC.
	 	(“Company”)
	 	 
	 	 
	 	By: /s/ Stefan Murry                            
	 	Name: Stefan Murry
	 	Title: Chief Financial Officer
	 	 
	 	Accepted:
	 	 
	 	BRANCH BANKING AND TRUST
	 	COMPANY
	 	(“Lender”)
	 	 
	 	 
	 	By: /s/ Brannon E. Fitch                     
	 	Name: Brannon E. Fitch
	 	Title: SVP
	 	 
	 	 
	 	 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

Trademarks

 

 

 

	Trademark	Jurisdiction	Registration/Application Number	Registration/File Date

                                                                                 

		United States Patent and Trademark Office	
        3001557
	Registered Date: 

September 27, 2005
		United States Patent and Trademark Office	
        2832440
	Registered Date: 

April 13, 2004
	AOI	United States Patent and Trademark Office	
        2535730
	Registered Date: 

February 5, 2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	7Exhibit 10.6

 

PATENT
SECURITY AGREEMENT

 

This PATENT SECURITY
AGREEMENT (this “Agreement”) is made as of this 28th day of September, 2017, between BRANCH
BANKING AND TRUST COMPANY, a North Carolina banking corporation (together with its successors and assigns, “Lender”),
and APPLIED OPTOELECTRONICS, INC., a Delaware corporation (“Company”).

Recitals:

 

Company desires to
obtain loans and other financial accommodations from Lender pursuant to that certain Loan Agreement dated the date hereof (as at
any time amended, restated, supplemented or otherwise modified, the "Loan Agreement") by and between Company and
Lender.

 

Lender is willing to
make loans and other financial accommodations to Company from time to time pursuant to the terms of the Loan Agreement, provided
that, among other things, Company executes this Agreement.

 

NOW, THEREFORE, for
Ten Dollars ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Company hereby agrees with Lender as follows:

 

1.                  
Capitalized terms used herein (including those used in the Recitals hereto), unless otherwise defined, shall have the meanings
ascribed to them in the Loan Agreement. As used herein, the term "Full Payment" shall mean full and final payment of
the Obligations (as defined in the Security Agreement) (hereinafter, the "Obligations") and termination of Lender’s
financing arrangements with Company; and the term "UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the State of Texas.

 

2.                    To
secure the prompt payment and performance of all of the Obligations, Company hereby grants, assigns and pledges to Lender, a continuing
security interest in and Lien upon all of the following property of Company, whether now existing or hereafter created or acquired
(the "Patent Collateral"):

 

(a)               
the entire right, title and interest of Company in and to the patent applications and patents listed in Exhibit A
attached hereto (as the same may be amended from time to time), and all re-issues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, including, without limitation, the right to sue for past, present and future infringements
and rights corresponding thereto throughout the world (all of the foregoing being herein collectively referred to as the "Patents");
and

 

(b)               
all proceeds of the foregoing (such as, by way of example, license royalties and proceeds of infringement suits).

 

3.                  
Company covenants with and warrants to Lender that:

 

(a)               
The Patents are subsisting and have not been adjudged invalid or unenforceable, in whole or in part;

 

(b)               
Company is now and shall continue to be the sole and exclusive owner of the entire and unencumbered right, title and interest
in and to each of the Patents, free and clear of any Liens;

 

 

 

 

 

    	 	1	 

     

    

 

(c)               
Company has the unqualified right to enter into this Agreement and perform its terms; and

 

(d)               
Company has used, and will continue to use for the duration of this Agreement, proper statutory notice in connection with
its use of the Patents and has made, and will continue to make all appropriate filings with the United States Patent and Trademark
Office and any applicable foreign filing offices to maintain the Patents in existence, including, without limitation, filing all
necessary documents with the United States Patent and Trademark Office and any applicable foreign filing offices for each Patent
to maintain it without loss of protection therefor.

 

4.                  
Until Full Payment of all of the Obligations, Company shall not enter into any license agreement relating to any of the
Patents with any Person except non-exclusive licenses to customers, vendors, suppliers, agents or other service providers of Company
in the regular and ordinary course of Company's business as presently conducted and for reasonable and customary compensation,
and shall not become a party to any agreement with any Person that is inconsistent with Company's obligations under this Agreement.

 

5.                  
If, before Full Payment of all of the Obligations, Company shall obtain rights to any new patentable inventions, or become
entitled to the benefit of any patent application or patent for any reissue, division, continuation, renewal, extension or continuation-in-part
of any Patent or any improvement on any Patent, the provisions of paragraph 2 shall automatically apply thereto and Company shall
give to Lender prompt notice thereof in writing.

 

6.                  
Company irrevocably authorizes and empowers Lender to modify this Agreement by amending Exhibit A to include
any future patents and patent applications under paragraph 2 or paragraph 5 hereof.

 

7.                  
Company hereby grants to Lender and its employees the visitation, audit, and inspection rights with respect to Company and
the Patent Collateral as set forth in Section DD.06(b) of Schedule DD to the Loan Agreement.

 

8.                  
At any time that an Event of Default exists, Lender shall have, in addition to all other rights and remedies given it by
this Agreement and the other Loan Documents, all rights and remedies of a secured party under the UCC and all other rights and
remedies under applicable law. Without limiting the generality of the foregoing, Lender may immediately, without demand of performance
and without other notice (except as described in the next sentence, if required by applicable law) or demand whatsoever to Company,
each of which Company hereby expressly waives, and without advertisement (except as otherwise provided by applicable law), collect
directly any payments due Company in respect of the Patent Collateral, or sell at public or private sale or otherwise realize upon
the whole or from time to time any of the Patent Collateral, or any interest that Company may have therein. Company hereby agrees
that ten (10) days notice to Company of any public or private sale or other disposition of any of the Patent Collateral shall be
reasonable notice; provided, however, that no notice shall be required hereunder if not otherwise required by applicable
law. At any such sale or disposition, Lender may, to the extent permitted by applicable law, purchase the whole or any part of
the Patent Collateral sold, free from any right of redemption on the part of Company, which right Company hereby waives and releases.
After deducting from the proceeds of such sale or other disposition of the Patent Collateral all reasonable costs and expenses
incurred by Lender in enforcing its rights hereunder (including, without limitation, all reasonable attorneys' fees), Lender shall
apply the remainder of such proceeds to the payment of the Obligations, in such order or manner as may be authorized or required
by the Loan Agreement. Any remainder of the proceeds after Full Payment of all of the Obligations shall be paid over to Company.
If any deficiency shall arise, Company shall remain liable therefor.

 

 

 

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9.                  
Company hereby makes, constitutes and appoints Lender, and any officer or agent of Lender as Lender may reasonably select,
as Company's true and lawful attorney-in-fact, with full power to do any or all of the following if an Event of Default with respect
to Company shall exist: to endorse Company's name on all applications, documents, papers and instruments necessary for Lender to
continue the maintenance of or to use the Patents, or to grant or issue any exclusive or nonexclusive license under the Patents
to any other Person, or to assign, pledge, convey or otherwise transfer title in or dispose of any Patent Collateral to any other
Person. Company hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney,
being coupled with an interest, shall be irrevocable until Full Payment of all of the Obligations, upon which time such power of
attorney will automatically terminate (unless sooner terminated by the parties).

 

10.                
Any and all reasonable fees, costs and expenses, of whatever kind or nature, (including, without limitation, reasonable
attorneys' fees and legal expenses) incurred by Lender in connection with the preparation of this Agreement and any other documents
relating hereto and the consummation of this transaction, the filing or recording of any documents (including, without limitation,
all taxes in connection therewith) with the United States Patent and Trademark Office or in other public offices, the payment or
discharge of any taxes, counsel fees, maintenance fees or Liens, or otherwise, in protecting, maintaining and preserving any Patent
Collateral or in defending or prosecuting any actions or proceedings arising out of or related to any Patent Collateral, shall
be borne and paid by Company (it being the intent of Company and Lender that Company shall be responsible for the payment of all
sums, fees, costs and expenses, including, without limitation, all maintenance fees payable with respect to the Patents) or, if
paid by Lender in its sole discretion, shall be reimbursed by Company to Lender on demand by Lender and until so paid shall
be added to the principal amount of the Obligations and shall bear interest at the Default Rate then applicable to the Line of
Credit.

 

11.              
  Company shall use its commercially reasonable efforts to detect any infringers of the Patents and shall notify Lender in
writing of material infringements detected. Company shall have the duty, through counsel reasonably acceptable to Lender, to prosecute
diligently any patent application for a Patent pending as of the date of this Agreement or thereafter until Full Payment of all
of the Obligations, to make application on unpatented but patentable inventions (subject to Company's reasonable discretion in
the ordinary course of business, or, during the existence of an Event of Default, promptly upon Lender's request), to file and
prosecute opposition and cancellation proceedings, to file and prosecute lawsuits to protect each Patent and to do any and all
acts that are reasonably deemed necessary or desirable by Lender to preserve and maintain all rights in patent applications for
each Patent, unless in any such case Company has determined that such Patent is no longer material to the conduct of its business..
Any expenses incurred in connection with such an application or proceedings shall be borne by Company. Company shall not abandon
any pending patent application or Patent, without the prior written consent of Lender, unless Company has determined that such
patent application or Patent is no longer material to the conduct of its business.

 

12.              
  Notwithstanding anything to the contrary contained in paragraph 11 hereof, Lender shall have the right, at any time that
an Event of Default exists, but shall in no way be obligated, to bring suit in its own name to enforce the Patents and any license
hereunder, or to defend any suit or counterclaim in its own name to protect any Patents or license hereunder, in either of which
events Company shall at the request of Lender do any and all lawful acts (including bringing suit) and execute any and all proper
documents required by Lender in aid of such enforcement or defense and Company shall promptly, upon demand, reimburse and indemnify
Lender for all reasonable costs and expenses incurred by Lender in the exercise of its rights under this paragraph 12.

 

 

 

 

 

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13.              
   If Company fails to comply with any of its obligations hereunder and at the time of such failure or as a result thereof
an Event of Default exists, then to the extent permitted by applicable law, Lender may discharge such obligations in Company's
name or in Lender's name, in Lender's sole discretion, but at Company's expense, and Company agrees to reimburse Lender in full
for all reasonable expenses, including, without limitation, reasonable attorneys' fees, incurred by Lender in prosecuting, defending
or maintaining the Patents or Lender's interest therein pursuant to this Agreement.

 

14.                
No course of dealing between Company and Lender, nor any failure to exercise, nor any delay in exercising, on the part of
Lender, any right, power or privilege hereunder or under any of the other Loan Documents shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.

 

15.                
All of Lender's rights and remedies with respect to the Patent Collateral, whether established by this Agreement or any
of the other Loan Documents, or by any other agreements or by applicable law, shall be cumulative and may be exercised singularly
or concurrently.

 

16.                
The provisions of this Agreement are severable, and if any clause or provision shall be held invalid and unenforceable,
in whole or in part, in any jurisdiction, the same shall be deemed severed herefrom and shall not in any manner affect such clause
or provisions in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

 

17.                
This Agreement, together with the other Loan Documents, constitutes and expresses the entire understanding of the parties
hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings, inducements or conditions,
whether express or implied, oral or written. This Agreement is subject to modification only by writing signed by the parties, except
as provided in paragraph 6 hereof.

 

18.              
   The benefits and burdens of this Agreement shall inure to the benefit of and be binding upon the successors and assigns
of Lender and upon the successors and permitted assigns of Company. Company shall not assign its rights or delegate its rights
or assign its duties hereunder without the prior written consent of Lender.

 

19.                
Company hereby waives notice of Lender's acceptance hereof.

 

20.                
This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas.

 

21.                
To the fullest extent permitted by applicable law, Company and Lender each waives the right to trial by jury in any action,
suit, proceeding or counterclaim of any kind arising out of or related to this Agreement or the Patent Collateral.

 

22.                  Upon
Full Payment, Lender shall execute and deliver to Company, at Company’s request and at Company’s expense, all releases,
termination statements, and other instruments as may be necessary or proper to release or reflect the release of Lender’s
security interest in the Patent Collateral, including all documentation necessary to reflect such release in the United States
Patent and Trademark Office.

 

 

[Remainder of page intentionally
left blank; signatures appear on following pages.]

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement under seal as of the date first written above.

 

 

 

	 	APPLIED
OPTOELECTRONICS, INC.
	 	(“Company”)
	 	 
	 	 
	 	By: /s/ Stefan Murry                               
	 	Name: Stefan Murry
	 	Title: Chief Financial Officer
	 	 
	 	 
	 	Accepted:
	 	 
	 	BRANCH BANKING AND
TRUST 
	 	COMPANY
	 	(“Lender”)
	 	 
	 	 
	 	By: /s/ Brannon E. Fitch                       
	 	Name: Brannon E. Fitch
	 	Title: SVP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	5	 

     

    

EXHIBIT
A

 

Patents

 

 

 

	
        Patent Name
	Registration/Application Number	Registration/Application Date
	
        Aligning and directly optically coupling photodetectors to optical
        demultiplexer outputs in a multichannel receiver optical subassembly
	
        9,703,054
	July 11, 2017
	
        Wavelength-selectable laser device providing spatially-selectable
        wavelength(S)
	
        9,698,567
	July 4, 2017
	
        Multi-channel transmitter optical subassembly (TOSA) with an
        optical coupling receptacle providing an off-center fiber
	
        9,696,503
	July 4, 2017
	
        System, method and fixture for performing both optical power
        and wavelength measurements of light emitted from a laser diode
	
        9,685,757
	June 20, 2017
	
        Techniques for reducing ingress of foreign matter into an optical
        subassembly
	
        9,684,141
	June 20, 2017
	
        Pluggable optical transceiver module
	
        9,671,582
	June 6, 2017
	
        Coaxial transmitter optical subassembly (TOSA) with cuboid type
        to laser package and optical transceiver including same
	
        9,614,620
	April 4, 2017
	
        Test fixture with thermoelectric cooler and spring-operated
        holding pin
	
        9,606,145
	March 28, 2017
	Pluggable optical transceiver module 	
        9,523,826
	
        December 20, 2016

 

 

 

 

 

 

 

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        Aligning and directly optically coupling photodetectors to optical
        demultiplexer outputs in a multichannel receiver optical subassembly
	
        9,509,433
	November 29, 2016
	
        Laser array mux assembly with external reflector for providing
        a selected wavelength or multiplexed wavelengths
	
        9,502,858
	November 22, 2016
	
        Extended cavity fabry-perot laser assembly capable of high speed
        optical modulation with narrow mode spacing and WDM optical system including same
	
        9,479,280
	October 25, 2016
	
        Multi-channel optical transceiver module including thermal arrayed
        waveguide grating multiplexer and athermal arrayed waveguide grating demultiplexer
	
        9,479,259
	October 25, 2016
	
        Monitoring a multiplexed laser array in an optical communication
        system
	
        9,455,782
	September 27, 2016
	Optical coupling element and optical module having the same	
        9,448,372
	
        September 20, 2016

	
        Multi-channel optical transceiver module including dual fiber
        type direct link adapter for optically coupling optical subassemblies in the transceiver module
	
        9,448,367
	September 20, 2016
	
        Optical networking unit (ONU) packaging
	
        9,432,122
	August 30, 2016
	
        Scribe etch process for semiconductor laser chip manufacturing
	
        9,356,422
	May 31, 2016
	
        Semiconductor laser diode with integrated heating region
	
        9,343,870
	May 17, 2016
	
        Optically matched laser array coupling assembly for coupling
        laser array to arrayed waveguide grating
	
        9,341,774
	May 17, 2016

 

 

 

 

 

 

    	 	7	 

     

    

 

	
        Thermally isolated multi-channel transmitter optical subassembly
        and optical transceiver module including same
	
        9,306,671
	April 5, 2016
	
        Laser transceiver with improved bit error rate
	
        9,236,949
	January 12, 2016
	
        Thermally shielded multi-channel transmitter optical subassembly
        and optical transceiver module including same
	
        9,236,945
	January 12, 2016
	
        Method and system for alignment of photodetector array to optical
        demultiplexer outputs
	
        9,225,428
	December 29, 2015
	
        Filtered laser array assembly with external optical modulation
        and WDM optical system including same
	
        9,214,790
	December 15, 2015
	
        Reducing cross-modulation in multichannel modulated optical
        systems
	
        9,191,111
	November 17, 2015
	
        Multi-channel optical transceiver module including dual fiber
        type direct link adapter for optically coupling optical subassemblies in the transceiver module
	
        9,170,383
	October 27, 2015
	
        External cavity laser array system and WDM optical system including
        same
	
        9,160,455
	October 13, 2015
	
        Heated laser package with increased efficiency for optical transmitter
        systems
	
        9,083,468
	July 14, 2015
	
        Compact multi-channel optical transceiver module
	
        9,039,303
	May 26, 2015
	
        Wavelength-selectable laser device and apparatus and system
        including same
	
        9,002,214
	April 7, 2015

 

 

 

 

 

 

    	 	8	 

     

    

 

	
        Temperature controlled multi-channel transmitter optical subassembly
        and optical transceiver module including same
	
        8,995,484
	March 31, 2015
	
        Receptacle diplexer
	
        8,899,846
	
        December 2, 2014

	
        Distortion compensation circuit including tunable phase path
	
        8,891,974
	November 18, 2014
	
        Temperature controlled multi-channel transmitter optical subassembly
        and optical transceiver module including same
	
        8,831,433
	September 9, 2014
	
        Laser mux assembly for providing a selected wavelength
	
        8,818,208
	August 26, 2014
	
        Optical transceiver including optical fiber coupling assembly
        to increase usable channel wavelengths
	
        8,805,191
	August 12, 2014
	
        Laser package including semiconductor laser and memory device
        for storing laser parameters
	
        8,787,772
	July 22, 2014
	
        Distortion compensation circuit including one or more phase
        invertible distortion paths
	
        8,718,489
	May 6, 2014 
	
        System and method for distortion compensation including configureable
        delay
	
        8,670,675
	March 11, 2014
	
        Optical transceiver that maintains a bend diameter of an internal
        optical fiber and method of assembling same
	
        8,655,183
	February 18, 2014
	
        System and method for distortion compensation in response to
        frequency detection
	
        8,606,116
	December 10, 2013 
	Network timing	
        8,406,631
	
        March 26, 2013

 

 

 

 

 

 

 

    	 	9	 

     

    

 

	
        Systems and methods for reducing clipping in multichannel modulated
        optical systems
	
        8,358,937
	January 22, 2013
	
        Reducing cross-modulation in multichannel modulated optical
        systems
	
        8,320,773
	November 27, 2012
	
        Systems and methods for reducing clipping in multichannel modulated
        optical systems
	
        8,165,475
	April 24, 2012
	
        Reducing cross modulation in multichannel modulated optical
        systems with anti-clipping
	
        8,165,474
	April 24, 2012 
	
        Quad-port optical module with pass-through and add/drop configuration
	
        8,126,329
	February 28, 2012
	
        Distortion compensation circuit and method based on orders of
        time dependent series of distortion signal
	
        8,121,493
	February 21, 2012
	
        Gain-coupled distributed feedback semiconductor laser including
        first-order and second-order gratings
	
        8,121,170
	February 21, 2012 
	
        Fixture for securing optoelectronic packages for wire and/or
        component bonding
	
        8,091,876
	January 10, 2012
	
        Thermoelectric cooler controller
	
        8,079,222
	
        December 20, 2011

	
        Distortion compensation circuit including one or more phase
        invertible distortion paths
	
        8,073,340
	December 6, 2011
	
        Photosensor operating point
	
        8,055,138
	
        November 8, 2011

	
        Position finding system and method for use in aligning laser
        device with an optical fiber
	
        8,045,164
	October 25, 2011

 

 

 

 

 

 

 

 

 

    	 	10	 

     

    

 

	
        Clipping correction system and method for correcting clipped
        signals in a receiver
	
        7,978,985
	July 12, 2011
	
        Predistortion circuit including distortion generator diodes
        with adjustable diode bias
	
        7,925,170
	April 12, 2011
	
        Pluggable form factor release mechanism
	
        7,766,686
	August 3, 2010
	
        Distributed feedback semiconductor laser including wavelength
        monitoring section
	
        7,627,012
	December 1, 2009
	
        Complex-coupled distributed feedback semiconductor laser
	
        7,583,719
	September 1, 2009
	
        Laser drive circuit and method providing high limit clipping
        corresponding to low limit clipping in a laser
	
        7,573,923
	August 11, 2009
	
        Distributed feedback laser with improved optical field uniformity
        and mode stability
	
        7,542,503
	
        June 2, 2009

	
        Coaxial optoelectronic device separation apparatus and method
	
        7,519,260
	April 14, 2009
	
        Modular laser package system
	
        7,478,955
	
        January 20, 2009

	
        System and method for securing optoelectronic packages for mounting
        components at a mounting angle
	
        7,468,286
	December 23, 2008
	
        Method and apparatus for coupling a laser to a fiber in a two-lens
        laser system
	
        7,226,218
	June 5, 2007
	
        Method for fabricating a VCSEL with ion-implanted current-confinement
        structure
	
        7,026,178
	April 11, 2006
	
        Assembly with tapered, threaded ferrule housing for improved
        alignment of fiber with laser
	
        7,010,013
	March 7, 2006

 

 

 

 

 

 

 

 

 

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        Method and apparatus for reducing specular reflections in semiconductor
        lasers
	
        7,010,012
	March 7, 2006
	
        Optically-pumped multiple-quantum well active region with improved
        distribution of optical pumping power
	
        6,859,481
	February 22, 2005
	
        VCSEL with antiguide current confinement layer
	
        6,795,478
	September 21, 2004
	
        Multiple reflectivity band reflector
	
        6,788,466
	September 7, 2004
	
        VCSEL with heat-spreading layer
	
        6,782,019
	
        August 24, 2004

	
        VCSEL assembly with edge-receiving optical devices
	
        6,765,948
	July 20, 2004
	
        Multiple reflectivity band reflector with non-uniform profile
        and laser system employing same for laser wavelength monitoring
	
        6,765,939
	July 20, 2004
	
        Laser having multiple reflectivity band reflector
	
        6,763,053
	July 13, 2004
	
        Method and system employing multiple reflectivity band reflector
        for laser wavelength monitoring
	
        6,763,046
	July 13, 2004
	
        Alternative substrates for epitaxial growth
	
        6,746,777
	June 8, 2004
	
        Housing for passively aligning an optical fiber with a lens
	
        6,736,550
	May 18, 2004
	
        Planar lightwave circuit for conditioning tunable laser output
	
        6,735,224
	May 11, 2004
	
        Modified distributed bragg reflector (DBR) for vertical cavity
        surface-emitting laser (VCSEL) resonant wavelength tuning sensitivity control
	
        6,724,796
	April 20, 2004

 

 

 

 

 

 

 

 

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        Tunable vertical-cavity surface-emitting laser with tuning junction
	
        6,697,413
	February 24, 2004
	
        Patterned phase shift layers for wavelength-selectable vertical
        cavity surface-emitting laser (VCSEL) arrays
	
        6,696,307
	February 24, 2004 
	
        Optical fiber with mirror for semiconductor laser
	
        6,669,367
	December 30, 2003
	
        Method and apparatus for demounting workpieces from adhesive
        film
	
        6,652,707
	November 25, 2003
	
        Method for fabricating single-mode DBR laser with improved yield
	
        6,638,773
	October 28, 2003
	
        Overlapping wavelength-tunable vertical cavity surface-emitting
        laser (VCSEL) arrays
	
        6,636,544
	October 21, 2003
	
        Vertical-cavity surface-emitting laser with metal mirror and
        method of fabrication of same
	
        6,611,543
	August
26, 2003 
	
        Single-mode DBR laser with improved phase-shift section
	
        6,608,855
	August 19, 2003
	
        Double heterostructure photodiode with graded minority-carrier
        blocking structures
	
        6,603,184
	August
5, 2003 
	
        Method and apparatus for polarizing light in a VCSEL
	
        6,560,265
	May
6, 2003 
	
        Spatially coherent surface-emitting, grating coupled quantum
        cascade laser with unstable resonance cavity
	
        6,560,259
	May 6, 2003
	
        Vertical-cavity surface-emitting laser with bottom dielectric
        distributed bragg reflector
	
        6,549,556
	April 15, 2003

 

 

 

 

 

 

 

 

 

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        Multispectral radiation detectors using strain-compensating
        superlattices
	
        6,455,908
	
        6,455,908

        September 24, 2002

	
        Compliant universal substrates for optoelectronic and electronic
        devices
	
        6,406,795
	June 18, 2002
	Tunable fiber fabry-perot surface-emitting lasers 	
        6,263,002
	
        June 17, 2001

	Modular laser package system and associated methods	
        7,290,943
	
        November 6, 2007

	Tunable laser with multiple in-line section	
        13/916,652
	
        June 13, 2013

	
        Monitoring nad controlling temperature across a laser array
        in a transmitter optical subassembly (TOSA) package
	
        14/295,459
	
        June 4, 2014

	
        Tunable laser with multiple in-line section including sampled
        gratings
	
        14/551,353
	
        November 24, 2014

	
        Two-section semiconductor laser with modulation-independent
        grating section to reduce chirp
	
        14/590,456
	January 6, 2015
	
        Tunable laser including parallel lasing cavities with a common
        output
	
        14/661,772
	
        March 18, 2015

	
        Multichannel receiver optical subassembly with improved sensitivity
	
        14/665,639
	
        March 23, 2015

	
        Multi-channel transmitter optical subassembly (TOSA) with opposing
        placement of transistor outline (TO) can laser packages
	
        14/837,993
	
        August 27, 2015

	
        Receiver optical subassembly (ROSA) housing with sidewall receptacle
        to provide electrical isolation between an adjacent transmitter optical subassembly (TOSA) in a transceiver housing
	
        14/838,017
	August 27, 2015

 

 

 

 

 

 

 

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        Optical filter sub-assembly cartridge for use in a receiver
        optical subassembly (ROSA) housing
	
        14/974,492
	
        December 18, 2015

	
        Optical transceiver assembly including thermal dual arrayed
        waveguide grating
	
        14/983,773
	
        December 30, 2015

	
        Techniques for reducing the footprint of a multi-channel transmitter
        optical subassembly (TOSA) within an optical transceiver housing
	
        15/204,174
	July 7, 2016
	
        Optical component assembly having a keyed structure for ensuring
        proper insertion orientation within an optical subassembly
	
        15/241,979
	August 19, 2016

 

 

 

 

 

 

 

 

 

 

 

 

    	 	15

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