Document:

Exhibit 10.2

 

	MAKER:	Applied Optoelectronics, Inc.	
     

    NOTE MODIFICATION AGREEMENT

     
	xxxxxxxxxx
	ADDRESS:	13139 Jess Pirtle Blvd	Account Number
	 	Sugar Land, Texas	00001
	 	77478	Note Number
	 	 	 

 

 

	$20,000,000.00	$60,000,000.00	September 28, 2017	December 29, 2021
	Modified Principal Amount	Original Principal  Amount	Original Date	Modification Date

 

This Note Modification Agreement (hereinafter
referred to as “Agreement”) is made and entered into as of this 29th day of December, 2021 by APPLIED OPTOELECTRONICS,
INC., as maker(s) and co-maker(s), if any, of the Promissory Note as defined below (whether one or more, hereinafter referred to jointly
and severally as “Borrower”), in favor of TRUIST BANK, a North Carolina banking corporation f/k/a Branch Banking and
Trust Company, a North Carolina banking corporation (including its successors and assigns, hereinafter referred to as “Bank”).

 

Borrower previously executed a Promissory Note
payable to Bank as more particularly identified by the description of the original amount and date set forth above (including all previous
renewals, extensions and modifications thereof, collectively the “Promissory Note”). Borrower and Bank hereby agree that the
Promissory Note shall be modified only to the limited extent as is hereinafter set forth; that all other terms, conditions, and covenants
of such Promissory Note shall remain in full force and effect; and that this Agreement shall constitute a renewal, extension and modification
of the Promissory Note and not a novation.

 

NOW, THEREFORE, in mutual consideration of the
premises, the sum of One Dollar ($1.00) and other good and valuable consideration, each to the other parties paid, the parties hereto
agree that the Promissory Note is hereby amended as follows (checked items contain applicable modifications):

 

[_] Borrower
shall pay a prepayment fee as set forth in the Prepayment Fee Addendum attached hereto.

		[_]	This Agreement hereby permanently reduces the principal amount of the loan
to Borrower to the Modified Principal Amount set forth above.

 

INTEREST RATE, PRINCIPAL AND INTEREST PAYMENT
TERM MODIFICATIONS

 

Interest shall accrue from the date hereof
on the unpaid balance outstanding from time to time at the:

 

		[_]	Fixed rate of      % per annum.

		[_]	Variable rate of Bank's Prime Rate plus      %
per annum to be adjusted       as Bank's Prime Rate changes. 

		[_]	As of the Modification Date, any fixed, floating or average maximum rate
and fixed minimum rate in effect by virtue of the Promissory Note(s) are hereby deleted. If checked here [_],
the interest rate will not exceed a(n) [_] fixed [_] average
maximum rate of      % or a [_] floating maximum rate of the greater
of      % or Bank's Prime Rate; and the interest rate will not decrease below a fixed minimum rate of
     %. If an average maximum rate is specified, a determination of any required reimbursement of interest
by Bank will be made: [_] when the Promissory Note is repaid in full by Borrower [_] annually
beginning on      .

		[X]	The Adjusted Term SOFR Rate as more specifically described in the Addendum
to Note attached hereto and incorporated herein.

 

The term “Prime Rate,” if used herein,
means the rate of interest per annum announced by Bank from time to time and adopted as its Prime Rate at its executive offices in Winston-Salem,
North Carolina. The Prime Rate is one of several rate indexes employed by Bank when extending credit, and not necessarily the lowest rate.
Any change in the interest rate resulting from a change in Bank’s Prime Rate shall become effective as of the opening of business
on the effective date of the change.

 

 

 

    	 	1	 

     

    

 

Principal and interest
are payable as follows:

 

[X] Principal
(plus any accrued interest not otherwise scheduled herein) is due in full at maturity on April 15, 2023.

[_] Payable
in consecutive       installments of [_] Principal [_] Principal
and Interest 

commencing on      
and continued on the same day of each calendar period thereafter, in       equal payments of $     ,
with one final payment of all remaining principal and accrued interest due on           .

		[X]	Accrued interest is payable monthly commencing on January 5, 2022 and continuing
on the same day of each calendar period thereafter, with one final payment of all remaining interest due on April 15, 2023.

		[_]	Bank reserves the right in its sole discretion to adjust the fixed payment
due hereunder       on       and continuing on the same day of each calendar
period thereafter, in order to maintain an amortization period of no more than       months from the date
of this Agreement. Borrower understands the payment may increase if interest rates increase.

		[X]	This Agreement evidences a revolving line of credit and advances under this
Agreement, as well as directions for payment from Borrower’s accounts, may be requested orally or in writing by Borrower. Bank may,
but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either (i) advanced in
accordance with the instructions of an authorized person or (ii) credited to any of Borrower’s accounts maintained with Bank. Prior
to an Event of Default (as defined in the Loan Agreement, as hereinafter defined), Borrower may borrow, repay, and reborrow pursuant to
the terms of the Loan Agreement dated September 28, 2017, between Borrower and Bank (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the “Loan Agreement”). 

		[X]	Borrower hereby authorizes Bank to automatically draft from its demand deposit
or savings account(s) maintained with Bank or another bank, any payment(s), including late fees and other fees and charges due under this
Agreement on the date(s) due. Borrower shall provide appropriate account number(s) for account(s) at Bank or another bank.

		[_]	.

 

The following
scheduled payment(s) is (are) deferred:

 

[_] $
      principal}

[_]$
      interest} Payments due on      

 

is (are) hereby deferred.
Payments will resume on       according to the schedule contained herein or to the existing schedule (if
no other changes are made herein).

 

APPLICATION OF PAYMENTS. Unless otherwise
expressly required by applicable law, payments will be applied to any unpaid collection costs, late and other charges and fees, accrued
unpaid interest, and principal in such order as Bank may determine in its sole and absolute discretion.

 

INTEREST CALCULATION; REAMORITIZATION. All
interest shall be computed and charged for the actual number of days elapsed on the basis of a year consisting of three hundred sixty
(360) days. In the event periodic accruals of interest shall exceed any periodic fixed payment amount described above, the fixed payment
amount shall be immediately increased, or additional supplemental interest payments required on the same periodic basis as specified above
(increased fixed payments or supplemental payments to be determined in Bank's sole discretion), in such amounts and at such times as shall
be necessary to pay all accruals of interest for the period and all accruals of unpaid interest from previous periods. Such adjustments
to the fixed payment amount or supplemental payments shall remain in effect for so long as any interest accruals shall exceed the original
fixed payment amount and shall be further adjusted upward or downward to reflect changes in any variable interest rate; provided that
unless elected otherwise above, the fixed payment amount shall not be reduced below the original fixed payment amount. However, Bank shall
have the right, in its sole discretion, to lower the fixed payment amount below the original payment amount.

 

LATE FEE; RETURNED ITEM FEE. Borrower shall
pay to Bank, or order, a late fee in the amount of five percent (5.0%) of any installment past due for ten (10) or more days after written
notice is received by Borrower regarding same. When any installment payment is past due for ten (10) or more days, subsequent payments
shall first be applied to the past due balance. In addition, Borrower shall pay to Bank a returned payment fee (currently $25.00) if Borrower
or any other obligor hereon makes any payment at any time by check or other instrument, or by any electronic means, which is returned
to Bank because of nonpayment due to nonsufficient funds.

 

 

 

    	 	2	 

     

    

 

FEES AND CHARGES. Borrower agrees that
the only interest charge is the interest actually stated in the Promissory Note, as modified, and that any renewal or origination fee
shall be deemed charges rather than interest, which charges are fully earned and non-refundable. It is further agreed that any late charges
are not a charge for the use of money but are imposed to compensate Bank for some of the administrative services, costs and losses associated
with any delinquency or default under the Promissory Note, and such charges shall be fully earned and non-refundable when accrued. All
other charges imposed by Bank upon Borrower in connection with the Promissory Note, as modified, and the loan evidenced thereby including,
without limitation, any commitment fees, loan fees, facility fees, origination fees, discount points, default and late charges, prepayment
fees, reasonable attorneys’ fees and reimbursements for costs and expenses paid by Bank to third parties or for damages incurred
by Bank are and shall be deemed to be charges made to compensate Bank for underwriting and administrative services and costs, other services,
and costs or losses incurred or to be incurred by Bank in connection with the Promissory Note, as modified, and the loan and shall under
no circumstances be deemed to be charges for the use of money. Bank may, at its option, charge any reasonable fees for the modification,
renewal, extension, or amendment of any of the terms of the Promissory Note(s) or this Agreement not prohibited by applicable law. All
such charges shall be fully earned and non-refundable when due.

 

COLLATERAL. Unless otherwise provided herein,
it is expressly understood and agreed by Borrower that any and all real and personal property given or pledged, whether by Borrower or
a third party, as collateral to secure the Promissory Note, shall remain as security for the Promissory Note as modified hereby. In addition
to Bank’s right of setoff and other liens and security interests previously granted to Bank, Borrower hereby grants to Bank a security
interest in all of its deposit accounts maintained with Bank, which shall serve as collateral for the indebtedness and obligations evidenced
by the Promissory Note and this Agreement.

 

ADDITIONAL COLLATERAL.
[_] The Promissory Note, as modified, and the performance of the terms of any agreement or instrument relating
to, evidencing, or securing the Promissory Note shall be additionally secured by the collateral hereinafter described, a new security
instrument shall be executed by Borrower and/or Debtor(s)/Grantor(s), and all other steps necessary to perfect or record Bank’s
lien with priority acceptable to Bank shall be taken. All of the terms, conditions and covenants of the below-described agreements (“Additional
Agreements”) are expressly made a part of the Promissory Note and this Agreement by reference in the same manner and with the same
effect as if set forth herein at length, and Bank is entitled to the benefits of and remedies provided in the Additional Agreements and
any other related documents given by Borrower, any guarantor, or any pledgor in favor of Bank.

 

	Date:      	Type of Agreement:      
	From:      
	Date:      	Type of Agreement:      
	From:      	 
	Date:      	Type of Agreement:      
	From:      	 

 

[_]       ________________________________________________________________________________________________________________

 

JOINT AND SEVERAL OBLIGATION; NO NOVATION OR
RELEASE. If the Promissory Note being modified by this Agreement is signed by more than one person or entity, the Promissory Note
shall be the joint and several obligation and liability of all of the undersigned. It is expressly agreed that this Agreement is a modification
of the Promissory Note only and not a novation. The original indebtedness and obligation of Borrower evidenced by the Promissory Note
is not extinguished hereby and except for the modifications contained herein, the Promissory Note, and any other loan documents securing
or relating to the Promissory Note, shall be and remain in full force and effect. This Agreement shall not release or affect the liability
of any guarantors, endorsers or obligors of the Promissory Note. Borrower hereby represents and warrants to Bank that all guarantors,
endorsers, pledgors or other obligors of Borrower’s indebtedness have approved and consented to the terms of this Agreement, have
waived any objection hereto, have affirmed any and all obligations to Bank and certify that there are no defenses or offsets against such
obligations to Bank, including without limitation the Promissory Note. Bank expressly reserves all rights as to any party with right of
recourse on the Promissory Note.

 

 

 

    	 	3	 

     

    

 

WAIVER BY BORROWER. Each of the parties
signing this Agreement regardless of the time, order or place of signing waives presentment, demand, protest, and notices of every kind,
and assents to any one or more extensions or postponements of the time of payment or any other indulgences, to any substitutions, exchanges
or releases of collateral by Bank, and to the additions or releases of any other parties or persons primarily or secondarily liable herefor.

 

DEFAULT RATE OF INTEREST; ATTORNEY’S
FEES AND COSTS. From and after any Event of Default under this Agreement, the Promissory Note, or any related loan document, including
failure to pay upon final maturity, interest shall accrue on the sum of the principal balance then outstanding at the rate of fifteen
percent (15.0%) per annum (“Default Rate”), until such principal and interest have been paid in full; provided that such rate
shall not exceed at any time the highest rate of interest permitted by the laws of the State of Texas; and further that such rate shall
apply after judgment. If the Promissory Note and this Agreement are placed with an attorney for collection, Borrower agrees to pay, in
addition to principal, interest, and late fees, if any, all costs of collection, including but not limited to all reasonable attorneys'
fees incurred by Bank, whether or not there is a lawsuit, expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any court costs.

 

FINANCIAL STATEMENTS. To
the maximum extent permitted by applicable law, Borrower hereby waives all rights, remedies, claims, and defenses based upon or related
to Sections 51.003, 51.004, and 51.005 of the Texas Property Code, to the extent the same pertain or may pertain to any enforcement of
this Note. Unless otherwise required under the Loan Agreement, if applicable, and as long as any indebtedness evidenced by the Promissory
Note, as modified hereby, remains outstanding or as long as Bank remains obligated to make advances, each Borrower shall furnish annually
an updated financial statement in a form satisfactory to Bank, which, when delivered shall be the property of Bank.

 

GOVERNING LAW; CHOICE OF VENUE. All rights
and obligations arising hereunder shall be governed by and construed in accordance with the laws of the same state which governs the interpretation
and enforcement of the Promissory Note. Any legal action with respect to the indebtedness evidenced by the Promissory Note and this Agreement
may be brought in the courts of the State of Texas and County of Harris or in the appropriate United States District Court situated in
Texas, and Borrower hereby accepts and unconditionally submits to the jurisdiction of such courts. Borrower hereby waives any objection
to the laying of venue based on the grounds of forum non conveniens with respect thereto.

 

REQUIRED INFORMATION. To help the government
fight the funding of terrorism and money laundering activities, federal law requires Bank to obtain, verify and record information that
identifies each person or entity obtaining a loan including Borrower’s legal name, address, tax identification number, date of birth,
driver’s license, organizational documents or other identifying documents. Failure to provide the required information will result
in a violation of the U.S. Patriot Act and will constitute a default under this instrument. In addition, no Borrower, any of its affiliates,
or any of their respective directors, officers, managers, partners, or any other authorized representatives is named as a “Specially
Designated National and Blocked Person”, on the list published by the U.S. Department of the Treasury Office of Foreign Assets Control
(OFAC) at its official website.

 

NON-WAIVER BY BANK. Borrower agrees that
if Bank has released any collateral, it shall not be required or obligated to take any further steps to release such collateral from any
lien or security interest unless Bank determines, in its sole discretion, that it may do so without releasing or impairing its existing
liens and security interests or its priority in other collateral; and unless Borrower bears the reasonable cost of such action. No delay
or omission on the part of Bank in exercising any right under the Promissory Note or this Agreement shall operate as a waiver of such
right or of any other right of Bank, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same,
or of any other right on any future occasion.

 

MISCELLANEOUS. Wherever possible, the provisions
of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective only to the extent of any such prohibition
or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. This Agreement may
be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and
the same instrument. The headings in this Agreement are included for convenience only and shall neither affect the construction or interpretation
of any provision in this Agreement nor affect any of the rights or obligations of the parties to this Agreement. Time is of the essence
in the performance of this Agreement.

 

 

 

    	 	4	 

     

    

 

WAIVER OF JURY TRIAL. UNLESS EXPRESSLY PROHIBITED
BY APPLICABLE LAW, BORROWER AND BANK HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS AGREEMENT, THE
PROMISSORY NOTE OR ANY OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN BORROWER
AND BANK, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. BORROWER AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT BORROWER OR BANK MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BANK AND BORROWER TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN AND BORROWER TO ENTER INTO THIS AGREEMENT. FURTHER, BORROWER HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD
NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS THE
AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION. BORROWER AND BANK EACH ACKNOWLEDGE THAT IT HAS HAD THE OPPORTUNITY TO CONSULT
WITH COUNSEL REGARDING THIS PARAGRAPH, THAT IT FULLY UNDERSTANDS ITS TERMS, CONTENT AND EFFECT, AND THAT IT VOLUNTARILY AND KNOWINGLY
AGREES TO THE TERMS OF THIS PARAGRAPH.

 

 

 

 

 

(SIGNATURES ON FOLLOWING PAGE)

 

 

 

    	 	5	 

     

    

 

NOTE MODIFICATION SIGNATURE PAGE

 

	Borrower: Applied Optoelectronics, Inc.	 
	Account Number:	xxxxxxxxxx	Note Number:	00001
	Modification Amount:	$20,000,000.00	Modification Date:	December 29, 2021 

 

 

 

IN WITNESS WHEREOF, the undersigned
have caused this Note Modification Agreement to be executed, as of the date first written above.

 

	 	 	 	 
	 	 	APPLIED OPTOELECTRONICS, INC.	 
	WITNESS:	 	Name of Corporation	 
	 	 	 	 
	_____________________________________	By:	/s/ Stefan Murry	 
	Print Name: _____________________________________	Name:	Stefan Murry	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 
	_____________________________________	By:	/s/ David Kuo	 
	Print Name: _____________________________________	Name:	David Kuo	 
	 	Title:	Vice President, General Counsel and Secretary	 
	 	 	 	 
	 	 	 	 

 

 

 

    	 	6Exhibit 10.3

 

ADDENDUM
TO PROMISSORY NOTE

(Term
SOFR)

 

December 29, 2021

 

This ADDENDUM TO PROMISSORY NOTE (“Addendum”)
is hereby made a part of the Promissory Note dated September 28, 2017 (including all addenda, renewals, extensions, modifications and
substitutions thereof, the “Note”) from APPLIED OPTOELECTRONICS, INC., a Delaware corporation (“Borrower”)
payable to the order of TRUIST BANK, a North Carolina banking corporation f/k/a Branch Banking and Trust Company, a North Carolina
banking corporation (including its successors and assigns, hereinafter referred to as "Bank") in the original principal amount
of $60,000,000, and a modified principal amount of $20,000,000.

 

1.       INTEREST
RATE. Interest shall accrue during each Interest Period at a variable rate of interest per annum equal to the Adjusted Term SOFR Rate;
provided however, in no instance shall the interest rate ever be less than 2.31% per annum (the “Minimum Rate”).

 

2.       DEFINITIONS.
Any capitalized terms not defined herein shall have the meaning set forth in the Note.

“Adjusted Term SOFR
Rate” means the variable annual interest rate calculated for each Interest Period equal to the sum obtained by adding (i) Term
SOFR for said Interest Period plus (ii) the Margin.

 

“Determination Day”
means that date which is (i) two U.S. Government Securities Business Days prior to the first day of the Interest Period if such day
is a U.S. Government Securities Business Day or (ii) if the first day of the Interest Period is not a U.S. Government Securities Business
Day then two U.S. Government Securities Business Days prior to the U.S. Government Securities Business Day immediately preceding the commencement
of the Interest Period.

 

“Interest Period”
means a one month period commencing with the date of the Note and each subsequent Interest Period shall commence on the day which
corresponds numerically to the date of the Note; provided that if there is no such numerically corresponding day, then the Interest Period
shall commence on the next preceding calendar day; and further provided that the initial Interest Period may commence on the booking date
and result in a shorter initial Interest Period. No Interest Period shall extend beyond the maturity date of the Note.

 

“Margin” means
1.56%.

 

“Term SOFR”
means the Term SOFR reference rate for a one month tenor as administered by the Term SOFR Administrator and quoted by Bloomberg Finance
L.P., or any quoting service or commonly available source utilized by Bank on the Determination Day; provided that if as of 5:00 p.m.
(New York time) on the Determination Day, Term SOFR for such tenor has not been published by the Term SOFR Administrator, then the rate
used will be Term SOFR for such tenor as published by the Term SOFR Administrator for the immediately preceding U.S. Government Securities
Business Day on which such rate was published on the Term SOFR Administrator’s website so long as such immediately preceding U.S.
Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Determination Day;
and further provided if Term SOFR would be less than 0.75%, then it shall be deemed to be 0.75%.

 

“Term SOFR Administrator”
means CME Group Benchmark Administration Limited or a successor administrator of the Term SOFR Reference Rate selected by Bank in
its sole discretion.

 

“U.S. Government
Securities Business Day” Any day except for (i) a Saturday, (ii) a Sunday, or (iii) a day on which the Securities Industry and
Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of
trading in United States government securities.

 

3.       EFFECT
OF BENCHMARK TRANSITION EVENT.

(a)       In
the event Bank determines in its sole discretion that (i) there is a public announcement by the administrator of a Benchmark or a Relevant
Governmental Body that such Benchmark will cease or has ceased to be published; (ii) a public announcement is made by the administrator
of a Benchmark or any Relevant Governmental Body that the Benchmark is no longer representative; or (iii) a Relevant Governmental Body
has determined that Bank may no longer utilize the Benchmark for purposes of setting interest rates (each a “Benchmark Transition
Event”); Bank will have no obligation to make, fund or maintain a loan based on the Benchmark and on a date and time determined
by Bank, without any further action or consent of by Borrower or amendment to this Addendum or any other Loan Document, the first available
alternative set forth in the order below that can be determined by Bank shall replace the Benchmark (“Successor Rate”):

 

 

 

    	 	1	 

     

    

 

(x)       Relevant
Governmental Body Recommended Rate; or

(y)      Alternative
Benchmark Rate.

 

(b)       In
connection with the implementation of a Successor Rate, Bank will have the right to make Conforming Changes from time to time and, notwithstanding
anything to the contrary herein or in any other Loan Document, any amendments implementing such Successor Rate or Conforming Changes will
become effective without any further action or consent of Borrower. Notwithstanding anything else herein, if at any time any Successor
Rate as so determined would otherwise be less than zero percent (0%), the Successor Rate will be deemed to be zero percent (0%) for the
purposes of this Addendum and the other Loan Documents. For avoidance of doubt, following the implementation of a Successor Rate, the
interest rate under the Note will be the Successor Rate plus the Margin, if any and subject to any Minimum Rate.

 

(c)       Bank
will notify (in one or more notices) Borrower of the implementation of any Successor Rate. Any determination or decision that may be made
by Bank pursuant to this Section, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence
of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and
binding absent manifest error and may be made in Bank’s sole discretion and without consent from Borrower.

 

(d)       In
the event Bank determines in its sole discretion that Bank cannot make, fund, or maintain a loan based upon the Benchmark due to illegality
or the inability to ascertain or determine said rate on the basis provided for herein (“Unavailability Period”) and
a Benchmark Transition Event has not occurred, then at the election of Bank the Benchmark shall convert to the Alternative Benchmark Rate
for purposes of calculating the interest rate on the then outstanding principal balance and for interest accruing on any fundings or advances
requested by Borrower and, thereafter, the interest rate on the Note shall adjust simultaneously with any fluctuation in the Alternative
Benchmark Rate. In the event Bank determines that the circumstances giving rise the Unavailability Period have ended, at such time as
determined by Bank the Benchmark will revert to the prior Benchmark (provided a Benchmark Transition Event has not occurred). Bank shall
provide notice, which may be after the implementation of the Alternative Benchmark Rate as contemplated hereunder, to Borrower of any
Benchmark change that is made pursuant to this Section. For avoidance of doubt, following conversion to the Alternative Benchmark Rate,
the interest rate under the Note will be the Alternative Benchmark Rate plus the Margin, if any and subject to any Minimum Rate.

 

(e)       For
purposes of this Section, in addition to the definitions set forth in Section 2, the following definitions shall apply:

 

“Alternative
Benchmark Rate” means a rate of interest per annum equal to the Bank’s Prime Rate minus two and 5/10 percent (2.5%) which
shall adjust daily with changes in Bank’s Prime Rate.

 

“Bank’s
Prime Rate” means, for any day, a rate per annum equal to Bank's announced Prime Rate, and shall change effective on the date
any change in Bank’s Prime Rate is publicly announced as being effective; provided however, if the Note is governed by Subtitles
9 or 10 of Title 12 of the Commercial Law Article of the Annotated Code of Maryland, “Prime Rate” shall mean the Wall Street
Journal Prime Rate, which is the Prime Rate published in the “Money Rates” section of the Wall Street Journal from time to
time, and shall change effective on the date any change in such rate is reported.

 

“Benchmark”
means initially Term SOFR, and thereafter is it will be the then-current Successor Rate.

 

“Conforming
Changes” means, with respect to any Successor Rate, any technical, administrative or operational changes (including changes
to the definitions such as “Business Day,” “Interest Period,” timing and frequency of determining rates and making
payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the
applicability of breakage provisions and other technical, administrative or operational matters) that Bank decides may be appropriate
to reflect the adoption and implementation of such Successor Rate and to permit the administration thereof by Bank in a manner Bank decides
is reasonably necessary in connection with the administration of this Addendum and the other Loan Documents.

 

 

 

    	 	2	 

     

    

 

“Loan Documents”
means the Note, this Addendum, any loan agreement including any schedule attached thereto, deed of trust, mortgage, security deed,
assignment of leases and rents, guaranty agreement, security agreement, financing statements, and all other documents, certificates, and
instruments executed in connection therewith, and all renewals, extensions, modifications, substitutions, and restatements thereof and
therefor; provided however, for purposes of Section 3 any swap agreement shall not be deemed a Loan Document.

 

“Relevant
Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed
or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 

“Relevant
Governmental Body Recommended Rate” means, in respect of any relevant day, the rate (inclusive of any spreads or adjustments
which may be positive or negative) recommended as the replacement for the Benchmark by the Relevant Governmental Body (which rate may
be produced by the Federal Reserve Bank of New York or another administrator).

 

4.       ADDITIONAL
COSTS. In the event that any applicable law or regulation, guideline or order or the interpretation or administration thereof by any
governmental or regulatory authority charged with the interpretation or administration thereof (whether or not having the force of law)
(i) shall change the basis of taxation of payments to Bank of any amounts payable by the Borrower hereunder (other than taxes imposed
on the overall net income of Bank) or (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by Bank, or (iii) shall impose any other condition with respect
to the Note, and the result of any of the foregoing is to increase the cost to Bank of making or maintaining the loan evidenced by the
Note or to reduce any amount receivable by Bank under the loan evidenced by the Note, and Bank determines that such increased costs or
reduction in amount receivable was attributable to the use of the current Benchmark, then the Borrower shall from time to time, upon demand
by Bank, pay to Bank additional amounts sufficient to compensate Bank for such increased costs ("Additional Costs"). A detailed
statement as to the amount of such Additional Costs, prepared in good faith and submitted to the Borrower by Bank, shall be conclusive
and binding in the absence of manifest error.

 

 

(SIGNATURES ON FOLLOWING PAGE)

 

 

 

    	 	3	 

     

    

 

In Witness Whereof, Borrower has caused this Addendum
to Promissory Note to be duly executed as of the date first written above.

 

	 	 	APPLIED OPTOELECTRONICS, INC.	 
	WITNESS:	 	Name of Corporation	 
	 	 	 	 
	_____________________________________	By:	/s/ Stefan Murry	 
	Print Name: _____________________________________	Name:	Stefan Murry	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 
	_____________________________________	By:	/s/. David Kuo	 
	Print Name: _____________________________________	Name:	David Kuo	 
	 	Title:	Vice President, General Counsel and Secretary	 
	 	 	 	 

 

 

 

 

    	 	4

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