Document:

Exhibit

10.1

TWELFTH AMENDMENT TO CREDIT AGREEMENT

This TWELFTH AMENDMENT TO CREDIT AGREEMENT (this “Agreement”), dated as of October 3, 2019, is entered into by and among THE DIXIE GROUP, INC., a Tennessee corporation (“Dixie”), CANDLEWICK YARNS, LLC, an Alabama limited liability company (“Candlewick”), TDG OPERATIONS, LLC, a Georgia limited liability company, formerly known as Masland Carpets, LLC and successor by merger to Fabrica International, Inc. (“TDG”; together with Dixie and Candlewick, are referred to hereinafter each individually as a “Borrower,” and individually and collectively, jointly and severally, as the “Borrowers”), the persons identified as the Lenders on the signature pages hereto (the “Lenders”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement dated as of September 13, 2011, as amended by the First Amendment to Credit Agreement dated as of November 2, 2012, the Second Amendment to Credit Agreement dated as of April 1, 2013, the Third Amendment to Credit Agreement dated as of May 22, 2013, the Fourth Amendment to Credit Agreement dated as of July 1, 2013, the Fifth Amendment to Credit Agreement dated as of July 30, 2013, the Sixth Amendment to Credit Agreement dated as of August 30, 2013, the Seventh Amendment to Credit Agreement dated as of January 20, 2014, the Eighth Amendment to Credit Agreement dated as of March 14, 2014, the Ninth Amendment to Credit Agreement dated as of March 26, 2014, the Tenth Amendment to Credit Agreement, First Amendment to Security Agreement, and First Amendment to Guaranty dated as of September 23, 2016, and the Consent and Eleventh Amendment to Credit Agreement dated as of January 14, 2019 (as further amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), among Agent, the Lenders and the Borrowers, the Lenders have made loans and advances and provided other financial accommodations to the Borrowers; 

WHEREAS, the Borrowers have requested that Agent and Lenders enter into this Agreement to make certain amendments to the Credit Agreement, and Agent and the Lenders are willing to do so, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the agreements herein contained and other good and valuable consideration, the parties hereby agree as follows:

I.    DEFINITIONS AND INTERPRETATION.

1.1.    Definitions and Interpretation.  Unless otherwise defined herein or the context otherwise requires, terms used in this Agreement, including its preamble and recitals, have the meanings provided in the Credit Agreement. 

II.        AMENDMENTS TO CREDIT AGREEMENT.
Subject to the satisfaction of each of the conditions precedent set forth in Section III of this Agreement, the Credit Agreement is hereby amended as follows:
2.1.    Maximum Revolver Amount Definition.  Schedule 1.1 of the Credit Agreement is hereby amended by restating the definition of “Maximum Revolver Amount” in its entirety as follows: 

10.1

“Maximum Revolver Amount” means $125,000,000, as such amount may be increased by the amount of Additional Commitment Amounts in accordance with Section 2.2 of the Agreement or decreased by the amount of reductions in the Commitments made in accordance with Section 2.4(c) of the Agreement.
 
2.2.    Trigger Level Definition.  Schedule 1.1 of the Credit Agreement is hereby amended by restating the definition of “Trigger Level” in its entirety as follows:

“Trigger Level” means (a) through and including the earlier of (i) November 15, 2019, and (ii) the date on which a sale of the Susan Street Real Property is consummated, $13,750,000, and (b) at all times after the earlier of the foregoing dates, $15,000,000.

2.3.    Amendment to Schedule C-1.  Schedule C-1 of the Credit Agreement is hereby amended and restated in its entirety in the form of Schedule C-1 attached hereto.

III.        CONDITIONS PRECEDENT.

This Agreement shall become effective as of the date hereof, subject to the following conditions precedent having been satisfied or waived by Agent:

3.1.    Execution of Agreement.  Agent shall have received fully executed counterparts of this Agreement, duly authorized, executed and delivered by each Borrower, Agent, and each Lender, and acknowledged by each Guarantor. 
3.2.    Amendment Fee.  Agent shall have received an amendment fee in the amount of $25,000 (with each Lender to receive its Pro Rata Share thereof), and Borrowers hereby authorize Agent to charge the Loan Account for such amendment fee..
3.3.    Accuracy of Representations and Warranties.  Each of the representations and warranties of the Borrowers set forth in Section 4 of the Credit Agreement shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof).

3.4.    Other Documents.  Agent shall have received such other agreements, documents, instruments, officer’s certificates, and information executed and/or delivered by the Loan Parties as Agent may reasonably request.

3.5.    No Default or Event of Default.  No Default or Event of Default shall have occurred and be continuing.

IV.        MISCELLANEOUS.

4.1.    No Additional Obligations.  The Borrowers acknowledge and agree that the execution, delivery and performance of this Agreement shall not create (nor shall the Borrowers rely upon the existence of or claim or assert that there exists) any obligation of any of Agent or Lenders to consider or agree to any other amendment of or waiver or consent with respect to the Credit Agreement or any other instrument or agreement to which Agent or any Lender is a party (collectively, an “Additional Amendment” or “Consent”), and in the event that Agent and the Lenders subsequently agree to consider any requested Additional 

2

10.1

Amendment or Consent, neither the existence of this Agreement nor any other conduct of Agent or the Lenders related hereto, shall be of any force or effect on the Lenders’ consideration or decision with respect to any such requested Additional Amendment or Consent, and the Lenders shall not have any obligation whatsoever to consider or agree to any such Additional Amendment or Consent.

4.2.    Acknowledgments and Stipulations.  In order to induce Agent and Lenders to enter into this Agreement, each Borrower acknowledges, stipulates and agrees that (a) the Loan Documents executed by each Borrower are legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally; (b) the Liens granted by each Borrower to Agent in the Collateral are valid and duly perfected, first priority Liens, subject only to Permitted Liens; (c) each of the recitals contained at the beginning of this Agreement is true and correct; and (d) prior to executing this Agreement, each Borrower consulted with and had the benefit of advice of legal counsel of its own selection and has relied upon the advice of such counsel, and in no part upon the representation of Agent, any Lender or any counsel to Agent or any Lender concerning the legal effects of this Agreement or any provision hereof.

4.3.    Additional Representations and Warranties of the Borrowers.  Each Borrower hereby represents and warrants that on the date hereof and after giving effect to the amendments and waivers contained herein:  (a) the representations and warranties contained in Section 4 of the Credit Agreement shall be correct in all material respects on and as of such date as though made on and as of such date, and (b) no Default or Event of Default exists under the Credit Agreement on and as of such date.  Without limitation of the preceding sentence, each Borrower hereby expressly re-affirms the validity, effectiveness and enforceability of each Loan Document to which it is a party (in each case, as the same may be modified by the terms of this Agreement).  

4.4.    Effect of this Agreement.  Except as expressly amended pursuant hereto, no other changes or modifications to the Credit Agreement or any of the other Loan Documents are intended or implied, and in all other respects, the Credit Agreement and each of the other Loan Documents is hereby specifically ratified, restated and confirmed by all parties hereto as of the date hereof.  To the extent that any provision of the Credit Agreement or any of the other Loan Documents is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall control.  All references in the Credit Agreement (including without limitation the Schedules thereto) to the “Agreement” and all references in the other Loan Documents to the “Credit Agreement” shall be deemed to refer to the Credit Agreement, as amended hereby.

4.5.    Further Assurances.  The Loan Parties shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Agent to effectuate the provisions and purposes hereof.

4.6.    Governing Law.  THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.

4.7.    Binding Effect.  This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties hereto.

3

10.1

4.8.    Counterparts; Electronic Execution.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

[Continued on following page.]

4

10.1

Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

	
		
	BORROWERS:   
	THE DIXIE GROUP, INC.

By:________________________
Name:  Jon A. Faulkner 
Title:  VP/CFO

	 
	CANDLEWICK YARNS, LLC

By:________________________
Name:  Jon A. Faulkner 
Title:  President

	 
	TDG OPERATIONS, LLC

By:_________________________
Name:  Jon A. Faulkner 
Title:  President

[DIXIE—TWELFTH AMENDMENT TO CREDIT AGREEMENT]

10.1

	
		
	AGENT AND LENDERS:
	WELLS FARGO CAPITAL FINANCE, LLC,  
as Agent and as a Lender

By:_______________________
Name:  Zachary S. Buchanan
Title:  Authorized Signatory

[DIXIE—TWELFTH AMENDMENT TO CREDIT AGREEMENT]

10.1

	
		
	 
	BANK OF AMERICA, N.A., 
as a Lender

By:________________________
Name:  Todd Tarrance
Title:  Vice President

	
	
	   

SCHEDULE C-1
COMMITMENTS
	
		
	Lender
	Amount

	Wells Fargo Capital Finance, LLC
	$62,500,000

	Bank of America, N.A.
	$62,500,000

[DIXIE—TWELFTH AMENDMENT TO CREDIT AGREEMENT]Exhibit 10.1

 

		CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THE VERSION OF THIS
                            EXHIBIT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BECAUSE IT (I) IS NOT MATERIAL AND (II)
                            WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

FOURTH AMENDMENT TO LOAN AGREEMENT
AND

THIRD AMENDMENT TO SECURITY AGREEMENT

 

 

THIS FOURTH AMENDMENT
TO LOAN AGREEMENT AND THIRD AMENDMENT TO SECURITY AGREEMENT (this "Amendment") is made and entered into this 30th
day of September, 2019, by and between Applied Optoelectronics, Inc., a Delaware
corporation (hereinafter referred to as "Borrower") with its chief executive office and principal place of business
at 13139 Jess Pirtle Blvd., Sugar Land, Texas 77478, and Branch Banking and Trust Company,
a North Carolina corporation (hereinafter referred to as "Bank") with an office at 333 Clay Street, Suite 3800,
Houston, Texas 77002.

 

Recitals:

 

Bank and Borrower are
parties to a certain Loan Agreement dated September 28, 2017 (as at any time amended, restated, supplemented or otherwise modified,
the "Loan Agreement"), pursuant to which Bank has made loans and other financial accommodations to Borrower.

 

Bank and Borrower are
also parties to that certain Security Agreement dated September 28, 2017 (as at any time amended, restated, supplemented or otherwise
modified, the "Security Agreement"), pursuant to which Borrower granted a security interest in certain of its
personal property in favor of Bank to secure Borrower’s obligations under the Loan Agreement, the Security Agreement, and
the Note (as defined in the Security Agreement).

 

Borrower has requested
that Bank amend the Loan Agreement and the Security Agreement to extend the term of the credit facility thereunder and in certain
other respects, and Bank is willing to do so on the terms and subject to the conditions of this Amendment.

 

NOW, THEREFORE, for
TEN DOLLARS ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby severally
acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

1.Definitions.
Capitalized terms used in this Amendment, unless otherwise defined herein, shall have the respective meanings ascribed to
such terms in the Loan Agreement.

 

2.Amendments
to Loan Agreement. The Loan Agreement is hereby amended as follows:

 

(a)               
By deleting the reference to "$25,000,000" contained in the paragraph entitled "Line of Credit"
on page 1 of the Loan Agreement, and by substituting in lieu thereof a reference to "$20,000,000".

 

(b)               
By deleting the reference to "September 28, 2020" contained in the paragraph entitled "Line of Credit"
on page 1 of the Loan Agreement, and by substituting in lieu thereof a reference to "April 2, 2021".

 

(c)               
By deleting the last sentence of the paragraph entitled "Line of Credit" on page 1 of the Loan Agreement,
and by substituting in lieu thereof the following:

 

Unused Line Fee: Borrower shall pay
the Bank, quarterly in arrears on the last day of each calendar quarter, an unused fee on the Line of Credit equal to 0.30% per
annum on the average daily unused amount of the Line of Credit for such calendar quarter calculated on the basis of a year of 360
days for the actual number of days elapsed.

 

 

 

    	 	1	 

     

    

 

(d)               
By adding the following new sentence to the end of the paragraph entitled "Monthly Financial Statements"
on page 4 of the Loan Agreement:

 

Concurrently with the delivery of the
foregoing, Borrower shall deliver to Bank information regarding Borrower's non-GAAP U.S. earnings for the twelve-month period then
ending, and such other information as Bank shall reasonably request for purposes of calculating the Fixed Charge Coverage Ratio,
in each case in form and substance reasonably satisfactory to Bank.

 

(e)               
Effective as of March 31, 2019, by deleting the third sentence of the paragraph entitled "Officer Compliance Certificate"
on page 5 of the Loan Agreement, and by substituting in lieu thereof the following:

 

The OCC is due within the same number
of days required for the delivery of Financial Statements for each fiscal quarter’s end (except that the OCCs for the fiscal
quarters ending on or about March 31, 2019 and June 30, 2019 are due on or before October 31, 2019) and for the fiscal year end.

 

(f)                
By deleting the sentence beginning "The Borrower covenants and agrees" contained in Section 5 of the Loan
Agreement in its entirety, and by substituting in lieu thereof the following:

 

The Borrower covenants and agrees that
during any period in which an Overadvance (as defined in Schedule DD) exists it shall maintain the following financial covenants
and ratios all in accordance with GAAP unless otherwise specified:

 

(g)               
By deleting the reference to "$25,000,000" in the definition of "Availability" contained in Section
10.01 of the Loan Agreement, and by substituting in lieu thereof a reference to "$20,000,000".

 

(h)               
By deleting the definition of "Covenant Threshold Amount" from Section 10.01 of the Loan Agreement.

 

(i)                
By adding the following new definition of "Covenant Availability Reserve" to Section DD.01 of Schedule
DD to the Loan Agreement in alphabetical order:

 

Covenant Availability Reserve.
A reserve against Availability equal to (a) $0, during any Availability Period, (b) $0, at any time that the Fixed Charge Coverage
Ratio is equal to or greater than 1.5 to 1.0, tested (for the period of twelve months ended on the applicable Covenant Measurement
Date (as hereinafter defined)) as of the last day of the most recent month for which the Bank has received financial statements
in compliance with the Loan Agreement (the "Covenant Measurement Date") as long as (whether or not an OCC was
otherwise then due under this Agreement), Borrower has delivered to Bank an OCC with respect to the most recent month for which
financial statements were due in accordance with Section 3.08 certifying, among other things, as to the Fixed Charge Coverage Ratio
for the twelve-month period ending as of the last day of such month, and (c) at all other times, an amount equal to seventy-five
percent (75%) of Availability (calculated solely for this purpose without giving effect to the Covenant Availability Reserve).

 

(j)                
By adding the phrase "including, without limitation, the Covenant Availability Reserve" immediately prior to the
period at the end of the definition of "Availability Reserve" contained in Section DD.01 of Schedule DD
to the Loan Agreement.

 

 

 

 

    	 	2	 

     

    

 

(k)               
By deleting clause (k) of Section DD.03 of Schedule DD to the Loan Agreement, and by substituting in lieu thereof
the following new clause (k):

 

(k)       That
portion of Accounts due from an Account Debtor with a dollar value in excess of fifteen percent (15%) (or, in the case of Accounts
due from (i) [***] Corporation and its subsidiary, [***] Corporation, collectively, fifty percent (50%), (ii) each of
[***] LLC, [***], Inc., [***] Inc., and their respective affiliates, fifty percent (50%), (iii) [***],
Inc. and its affiliates, forty-five percent (45%), (iv) each of [***], Inc. and [***] Corporation, and their
respective affiliates, forty percent (40%), and (v) [***] LLC, thirty percent (30%) of Borrower’s aggregate
dollar amount of all outstanding Accounts. For the avoidance of doubt, the increased percentages described in clauses (i)-(v) above
shall only apply with respect to the Account Debtors described therein, but not to other Persons such as, without limitation, counterparties
to master purchase agreements or similar agreements with any such Account Debtor.

 

(l)                
By deleting the description of Accounts Aging contained in clause (a) of Section DD.06 of Schedule DD to the Loan
Agreement, and by substituting in lieu thereof the following:

 

Accounts aging
based upon invoice date by the twentieth (20th) day of each reporting period (which shall in any event identify the
Accounts by Account Debtor with respect thereto, rather, than by other Persons such as, without limitation, counterparties to master
purchase agreements or similar agreements with any such Account Debtor); provided, that at any time Borrower is required
to deliver a monthly Loan Base Report as described above, Borrower shall deliver a monthly Accounts aging.

 

(m)             
By deleting Schedule EE to the Loan Agreement in its entirety, and by substituting in lieu thereof the Schedule EE attached
as Exhibit A hereto.

 

3.Amendment
to Security Agreement. The Security Agreement is hereby amended by deleting clause (ii) following the phrase "This
Security Agreement is entered into in connection with (check applicable items):" in the introductory section on page 1 of
the Security Agreement in its entirety, and by substituting in lieu thereof the following:

 

[X] (ii)
a Promissory Note dated September 28, 2017 (including, without limitation, all addenda, extensions, renewals, modifications and
substitutions thereof, the "Note"), made by Debtor (the "Borrower") in favor of Secured Party, as modified
on September 30, 2019 to be in the principal amount of $20,000,000;

 

4.Ratification
and Reaffirmation. Borrower hereby ratifies and reaffirms the indebtedness under the Loan Agreement and the other Loan
Documents, each of the Loan Documents, and all of Borrower’s covenants, duties, indebtedness and liabilities under the Loan
Documents.

 

5.Acknowledgments
and Stipulations. Borrower acknowledges and stipulates that each of the Loan Documents executed by Borrower creates legal,
valid and binding obligations of Borrower that are enforceable against Borrower in accordance with the terms thereof; all of the
indebtedness under the Loan Agreement, the Notes and the other Loan Documents is owing and payable without defense, offset or counterclaim
(and to the extent there exists any such defense, offset or counterclaim on the date hereof, the same is hereby knowingly and voluntarily
waived by Borrower); the security interests and liens granted by Borrower in favor of Bank are duly perfected, first priority security
interests and liens; and at the beginning of business on September 27, 2019, the unpaid principal amount of the Line of Credit
totaled $20,000,000.

 

 

 

    	 	3	 

     

    

 

6.Representations
and Warranties. Borrower represents and warrants to Bank, to induce Bank to enter into this Amendment, that no Event of
Default or event which, with the passage of time or giving of notice, would become an Event of Default exists on the date hereof;
the execution, delivery and performance of this Amendment have been duly authorized by all requisite corporate action on the part
of Borrower and this Amendment has been duly executed and delivered by Borrower; and all of the representations and warranties
made by Borrower in the Loan Agreement are true and correct on and as of the date hereof.

 

7.Reference
to Loan Agreement. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to "this Agreement",
"hereunder", or words of like import shall mean and be a reference to the Loan Agreement, as amended by this Amendment.
Upon the effectiveness of this Amendment, each reference in the Security Agreement to "this Security Agreement", "hereunder",
or words of like import shall mean and be a reference to the Security Agreement, as amended by this Amendment.

 

8.Breach
of Amendment. This Amendment shall be part of the Loan Agreement and the Security Agreement, and a breach of any representation,
warranty or covenant herein shall constitute an Event of Default.

 

9.Conditions
Precedent. The amendments contained in Sections 2 and 3 hereof shall be effective as of the date of this
Amendment, subject to Bank’s receipt of each of the following on or before the date of this Amendment, in form and substance
satisfactory to Bank, together with all originals of the same to the extent requested by Bank in its sole discretion:

 

(a)               
a counterpart of this Amendment, duly executed by Borrower;

 

(b)               
a Note Modification Agreement (together with addendum thereto), duly executed by Borrower, in form and substance satisfactory
to Bank;

 

(c)               
resolutions of Borrower authorizing Borrower to enter into this Amendment and the other documents executed in connection
herewith, certified by an authorized officer of Borrower;

 

(d)               
the amendment fee referenced in Section 10 hereof; and

 

(e)               
all other approvals, opinions or documents as Bank may reasonably request.

 

10.Amendment
Fee; Expenses of Bank. In consideration of Bank’s willingness to enter into this Amendment as set forth herein, Borrower
agrees to pay to Bank an amendment fee in the amount of $30,000 in immediately available funds on the date hereof. Additionally,
Borrower agrees to pay, on demand, all costs and expenses incurred by Bank in connection with the preparation, negotiation
and execution of this Amendment and any other Loan Documents executed pursuant hereto and any and all amendments, modifications,
and supplements thereto, including, without limitation, the costs and fees of Bank’s legal counsel and any taxes, filing
fees and other expenses associated with or incurred in connection with the execution, delivery or filing of any instrument or agreement
referred to herein or contemplated hereby.

 

 

 

    	 	4	 

     

    

 

11.Release
of Claims. To induce Bank to enter into this Amendment, Borrower hereby releases, acquits
and forever discharges Bank, and all officers, directors, agents, employees, successors and assigns of Bank, from any and
all liabilities, claims, demands, actions or causes of action of any kind or nature (if there be any), whether absolute or contingent,
disputed or undisputed, at law or in equity, or known or unknown, that Borrower now has or ever had against Bank arising under
or in connection with any of the Loan Documents or otherwise. Borrower represents and warrants to Bank that Borrower has not transferred
or assigned to any Person any claim that Borrower ever had or claimed to have against Bank.

 

12.Governing
Law. This Amendment shall be governed by and construed in accordance with the internal laws of the State of Texas.

 

13.No Novation,
etc. Except as otherwise expressly provided in this Amendment, nothing herein shall be deemed to amend or modify any provision
of the Loan Agreement, the Security Agreement or any of the other Loan Documents, each of which shall remain in full force and
effect. This Amendment is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction, and the
Loan Agreement and the Security Agreement as herein modified shall continue in full force and effect.

 

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

 

15.Further
Assurances. Borrower agrees to take such further actions as Bank shall reasonably request from time to time in connection
herewith to evidence or give effect to the amendments set forth herein or any of the transactions contemplated hereby.

 

16.Miscellaneous.
This Amendment may be executed in any number of counterparts and by different parties to this Amendment on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.
Any manually executed signature page to this Amendment delivered by a party by facsimile or other electronic transmission shall
be deemed to be an original signature hereto. Section titles and references used in this Amendment shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto. This Amendment expresses
the entire understanding of the parties with respect to the subject matter hereof and may not be amended except in a writing signed
by the parties.

 

17.Waiver
of Jury Trial. To the fullest extent permitted by applicable law, each party hereby waives the right to trial by jury in any
action, suit, counterclaim or proceeding arising out of or related to this Amendment.

 

[Remainder of page intentionally left blank;

signatures appear on following page.]

 

 

 

 

    	 	5	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on
the date first written above.

 

 

	WITNESS:	 	APPLIED OPTOELECTRONICS, INC.
	 	 	(“Borrower”)
	 	 	 
	 	 	 
	______________________________	 	By: /s/ STEFAN MURRY                                     
	 	 	  Stefan Murry, Chief Financial Officer
	 	 	 
	 	 	 
	______________________________	 	By: /s/ DAVID KUO                                       
	 	 	  David Kuo, Vice President, General Counsel and Secretary
	 	 	 
	 	 	 
	 	 	[CORPORATE SEAL]
	 	 	 
	 	 	 
	 	 	Accepted by Lender:
	 	 	 
	 	 	BRANCH BANKING AND TRUST COMPANY
	 	 	(“Bank”)
	 	 	 
	 	 	 
	 	 	By: /s/ BRANNON E. FITCH                     
	 	 	  Brannon E. Fitch, Senior Vice President

 

 

 

    	 	6	 

     

    

 

EXHIBIT A

 

Schedule "EE" to BB&T Loan
Agreement

 

SCHEDULE
"EE" TO BB&T LOAN AGREEMENT

 

OFFICER COMPLIANCE CERTIFICATE

 

This certificate (the
"Certificate") is delivered pursuant to Section 3.08 of the Loan Agreement dated September 28, 2017, between APPLIED
OPTOELECTRONICS, INC. (the "Borrower") and BRANCH BANKING AND TRUST COMPANY (the "Bank"), as the
same may be amended or supplemented from time to time, being herein referred to as the Loan Agreement. All capitalized terms used
in this Certificate which are defined in the Loan Agreement are used in this Certificate with the same meanings given such terms
in the Loan Agreement.

 

I hereby certify, to
the best of my knowledge and belief and in my representative capacity on behalf of the Borrower, to the Bank as follows:

 

		1.	I am the duly elected or appointed and acting _______________________________
(Title) of the Borrower.

 

		2.	I have reviewed the financial statements of the Borrower
as of and for the period ending ______________________ attached hereto as Exhibit I, which were prepared in accordance with GAAP,
consistently applied, and are true and correct in all material aspects and fairly present the financial position and results and
operations of the Borrower.

 

		3.	The Representations and Warranties set forth in Section 2 of the Loan Agreement are true and correct
as of the date hereof.

 

		4.	I further certify that the Borrower is in compliance (unless otherwise specified) with all covenants
set forth in Sections 3, 5 and 6 of the Loan Agreement and any Schedules thereto.

 

		5.	Attached hereto is the financial information relating to calculation of the Fixed Charge Coverage
Ratio that Borrower is providing pursuant to Section 3.08 of the Loan Agreement, including information regarding Borrower's
non-GAAP U.S. earnings as of the end of the most recent fiscal quarter.

 

		6.	I further certify that (a) regardless of whether it is being tested pursuant to Section 5 of the
Loan Agreement, the Fixed Charge Coverage Ratio as of __________, 20__, is as set forth below, and (b) to the extent not provided
pursuant to item 5 above, attached hereto is additional information relating to the calculation of the Fixed Charge Coverage Ratio:[1]

 

	Fixed Charge Coverage Ratio	 	 	To	 	 

 

 

 

 

 

[1]
To be completed only if, (i) Borrower desires for the Covenant Availability Reserve to be reduced to $0 based on clause (b) of
the definition thereof, or (ii) the Fixed Charge Coverage Ratio is being tested pursuant to Section 5 of the Loan Agreement.

 

 

    	 	7	 

     

    

 

		7.	I further certify that during the fiscal quarter ending _________________________, 20__, (a) the
Borrower consummated no Specified Transactions other than Permitted Specified Transactions, and (b) the aggregate amounts of Specified
Transactions consummated by Borrower are as follows.

 

	Type of Specified Transaction	Aggregate Amount Consummated During Fiscal Quarter
	Purchases of part or all of the assets of a business or any Person	$___________________
	Purchases, redemptions, retirements or other acquisitions of any of Borrower’s capital stock or other ownership interests	$___________________
	Unsubordinated loans to directors, officers, partners, members, shareholders, subsidiaries or Affiliates	$___________________
	Sales, leases and other dispositions of asset or properties of any type described in clause (d) of the definition of Specified Transactions	$___________________
	Affiliate Transactions	$___________________
	Total:	$___________________

 

		8.	As of the date hereof, no default or Event of Default under Section 8 of the Loan Agreement and
any Schedules thereto has occurred (except as specified on Exhibit II, attached hereto, which Exhibit II also sets forth any corrective
action taken or proposed to be taken with respect to such default or Event of Default).

 

In Witness Whereof,
I have caused this Certificate to be executed and delivered to the Bank this _______ day of _____________________, 20__.

 

	Witness:	 	___________________________________
	 	 	Signature of Officer, Manager, General Partner
	 	 	 
	____________________________	 	___________________________________
	Print Name:	 	Print Name
	 	 	___________________________________
	 	 	Title

 

 

Attach Exhibit I and II, if applicable.

 

 

    	 	8

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