Enters Two Lease Agreements for New Industrial Buildings in Houston, Texas

Applied Optoelectronics, Inc. has entered into two new lease agreements for industrial buildings in Houston, Texas, identified as Building 4 and Building 5. These new leases follow the company's previously disclosed agreements for Buildings 1, 2, and 3 within the same industrial park, with the same landlord affiliate. The company intends to use these facilities, totaling approximately 1,093,807 square feet, for light manufacturing, warehousing, and related ancillary activities.

The lease for Building 4 covers 356,186 square feet at 17331 Chimney Rock Road, Houston, Texas. The initial monthly basic rent for this building is $220,835.32, which will increase annually to $307,582.40 by the 109th to 120th lease months. Building 5, located at 17433 Chimney Rock Road, encompasses 737,621 square feet, with a starting monthly basic rent of $457,325.02, rising to $636,968.43 during the same period.

Each lease has an initial term of 120 full calendar months, plus any partial month from the commencement date. The company will also be responsible for 100% of the operating costs, taxes, and insurance costs allocated to each building. A significant component of the agreement is an option to purchase both buildings for a combined price of $146,570,138, subject to potential adjustments.

The company is required to provide aggregate security deposits totaling $11.3 million. Additionally, Applied Optoelectronics, Inc. will pay approximately $2.55 million for structural-steel design modifications. These modifications are intended to prepare the buildings for the potential future installation of rooftop solar panels.