Document:

Exhibit 10.2

 

	MAKER:	Applied Optoelectronics, Inc.	BB&T	xxxxxxxxx
	 	 	 	 
	ADDRESS:	13139 Jess Pirtle Blvd	NOTE MODIFICATION AGREEMENT	Account Number
	 	Sugar Land, Texas	 	000001
	 	77478	 	Note Number

 

 

	$20,000,000.00	$60,000,000.00	September 28, 2017	September 30, 2019
	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 30th day of September, 2019 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 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.

[X] 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 LIBOR 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 2, 2021.

		[_]	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 October 5, 2019
and continuing on the same day of each calendar period thereafter, with one final payment of all remaining interest due on April
2, 2021.

		[_]	Bank reserves the right in its sole discretion to adjust the fixed
payment due hereunder      [monthly, quarterly, annually] 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.

 

 

 

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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:      	 

 

		[_]	 

 

		[X]	The security interest in the collateral hereinafter described is
hereby terminated with the consent of Bank and such collateral shall cease to serve as security for payment of the Promissory Note
or this Agreement: Equipment of Borrower and certain real property of Borrower described on Exhibit A of that certain Deed of Trust
dated March 30, 2018, by Borrower in favor of Bank, and more commonly referred to as 13139 Jess Pirtle Blvd, Sugar Land, Texas
77478. 

 

 

 

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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.

 

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.

 

 

 

 

    	 	4	 

     

    

 

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.

 

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	 

     

    

 

BB&T

NOTE MODIFICATION SIGNATURE PAGE

 

	Borrower: Applied Optoelectronics, Inc.	 
	Account Number:	xxxxxxxx	 	Note Number:	00001
	Modification Amount:	$20,000,000.00	 	Modification Date:	September 30, 2019

 

 

 

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:	 	 
	 	 	 	 
	Print Name: _____________________________________	Name:	Stefan Murry	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 
	_____________________________________	By:	 	 
	 	 	 	 
	Print Name: _____________________________________	Name:	David Kuo	 
	 	Title:	Vice President, General Counsel and Secretary	 
	 	 	 	 
	 	 	 	 

 

 

 

 

    	 	6Exhibit 10.3

 

BB&T

 

ADDENDUM TO PROMISSORY NOTE

BB&T Account No. xxxxxxxx

 

 

THIS ADDENDUM TO PROMISSORY
NOTE (“Addendum”) is hereby made a part of the Note Modification Agreement dated September 30, 2019, from APPLIED
OPTOELECTRONICS, INC. (“Borrower”) payable to the order of BRANCH BANKING AND TRUST COMPANY (“Bank”)
in the principal amount of $20,000,000.00, which Note Modification Agreement amends that certain Promissory Note dated September
28, 2017 (including all renewals, extensions, modifications and substitutions thereof, the “Note”).

 

 

I.       DEFINITIONS.

 

1.1       Adjusted
LIBOR Rate means a rate of interest per annum equal to the sum obtained (rounded upwards, if necessary, to the next higher
1/16th of 1.0%) by adding (i) the One Month LIBOR plus (ii) one and one-half percent (1.50%) per annum, which shall
be adjusted monthly on the first day of each LIBOR Interest Period. The Adjusted LIBOR Rate shall be adjusted for any change in
the LIBOR Reserve Percentage so that Bank shall receive the same yield. The interest rate will in no instance exceed the maximum
rate permitted by applicable law and if checked here [_] the interest rate will not decrease
below a fixed minimum rate of ______%. If checked here [_] the interest rate will not exceed
[_] a fixed maximum rate of _______% or [_] an average
maximum rate of      %. If an average maximum rate is specified, a determination of any required
reimbursement of interest by Bank will be made: [_] when the Note is repaid in full by Borrower
or [_] annually beginning on __________. If the loan has been repaid prior to this date, no
reimbursement will be made.

 

1.2       Business
Day means a day other than a Saturday, Sunday, legal holiday or any other day when Bank is authorized or required by applicable
law to be closed.

 

1.3       LIBOR
Advance means the advances made by Bank to Borrower evidenced by this Note upon which the Adjusted LIBOR Rate of interest shall
apply.

 

1.4       LIBOR
Interest Period means the period, as may be elected by Borrower applicable to any LIBOR Advance, commencing on the date the
Note is first made (or the date of any subsequent LIBOR addendum to the Note) and (i) if adjusted monthly, ending on the day that
is immediately prior to the numerically corresponding day of each month thereafter or (ii) if adjusted quarterly, ending on the
day that is immediately prior to the numerically corresponding day of each quarter thereafter; provided that:

 

(a) any LIBOR Interest
Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such LIBOR Interest Period shall end on the next preceding Business
Day; and

 

(b) any LIBOR Interest
Period which begins on a day for which there is no numerically corresponding day in a subsequent month if adjusted monthly or in
a subsequent quarter if adjusted quarterly, shall end on the last Business Day of each subsequent month if adjusted monthly or
on the last Business Day of each subsequent quarter if adjusted quarterly.

 

 

 

    	 	1	 

     

    

 

1.5       LIBOR
Reserve Percentage means the maximum aggregate rate at which reserves (including, without limitation, any marginal supplemental
or emergency reserves) are required to be maintained under Regulation D by member banks of the Federal Reserve System with respect
to dollar funding in the London interbank market. Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall
reflect any other reserves required to be maintained by such member banks by reason of any applicable regulatory change against
(i) any category of liability which includes deposits by reference to which the Adjusted LIBOR Rate is to be determined or (ii)
any category of extensions of credit or other assets related to LIBOR.

 

1.6       One
Month LIBOR means the average rate quoted by Bloomberg Finance L.P., or any quoting service or commonly available source utilized
by Bank, on the determination date for deposits in U. S. Dollars offered in the London interbank market for one month determined
at approximately 11:00 am London time two (2) Business Days prior to the commencement of the applicable LIBOR Interest Period;
provided that if the above method for determining One Month LIBOR shall not be available, the rate quoted in The Wall Street
Journal, or a rate determined by a substitute method of determination agreed on by Borrower and Bank; provided, if such
agreement is not reached within a reasonable period of time (in Bank's sole judgment), a rate reasonably determined by Bank in
its sole discretion as a rate being paid, as of the determination date, by first class banking organizations (as determined by
Bank) in the London interbank market for U. S. Dollar deposits; and provided further that if One Month LIBOR determined as provided
above would be less than zero percent (0%), then One Month LIBOR shall be deemed to be zero percent (0%).

 

1.7       Standard
Rate means, for any day, a rate per annum equal to Bank's announced Prime Rate Equivalent (as defined in the Loan Agreement
dated September 28, 2017 between Borrower and Bank) and each change in the Standard Rate shall be effective on the date any change
in the Prime Rate is publicly announced as being effective.

 

II.       LOAN
BEARING ADJUSTED LIBOR RATE

 

2.1       Application
of Adjusted LIBOR Rate. The Adjusted LIBOR Rate shall apply to the entire principal balance outstanding of a LIBOR Advance
for any LIBOR Interest Period.

 

2.2       Adjusted
LIBOR Based Rate Protections.

 

(a)       Inability
to Determine Rate. In the event that Bank shall have determined, which determination shall be final, conclusive and binding,
that by reason of circumstances occurring after the date of this Note affecting the London interbank market, adequate and fair
means do not exist for ascertaining the One Month LIBOR on the basis provided for in this Note, Bank shall give notice (by telephone
confirmed in writing or by telecopy) to Borrower of such determination, whereupon (i) no LIBOR Advance shall be made until Bank
notifies Borrower that the circumstances giving rise to such notice no longer exist, and (ii) any request by Borrower for a LIBOR
Advance shall be deemed to be a request for an advance at the Standard Rate.

 

 

 

 

 

    	 	2	 

     

    

 

(b)       Illegality;
Impracticability. In the event that Bank shall determine, which determination shall be final, conclusive and binding, that
the making, maintaining or continuance of any portion of a LIBOR Advance (i) has become unlawful as a result of compliance by Bank
with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any of the same not having the
force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause
Bank material hardship, as a result of contingencies occurring after the date of this Note materially and adversely affect the
London interbank market or Bank's ability to make LIBOR Advances generally, then, and in any such event, Bank shall give notice
(by telephone confirmed in writing or by telecopy) to Borrower of such determination. Thereafter, (x) the obligation of Bank to
make any LIBOR Advances or to convert any portion of the loan to a LIBOR Advance shall be suspended until such notice shall be
withdrawn by Bank, and (y) any request by Borrower for a LIBOR Advance shall be deemed to be a request for an advance at the Standard
Rate.

 

 

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

 

 

 

 

 

 

 

 

 

 

 

    	 	3

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