Exhibit 10.3

 

[image_001.gif]Loan Approval Notice of E.SUN BANK

No.: 15540327-1 Date:  March 12, 2015  

 

I. The adjusted lines and conditions for the credit that we grant to you are as
follows:

 

Item Line Type Currency Amount Interest Rate (Fee)/Use Condition/Repayment Mode
Availability A

Total line of credit

(for A1-A2)

NTD 120 million     A1 Short-term loan NTD 120 million

1. Interest rate (fee): The interest rate is calculated by adding an annual
interest rate of over 0.41% to the 1.37% interest rate for one-month time
deposits. That is, an interest is calculated using a floating interest rate of
over 1.78%.

2. Use condition: recurring.

3. Repayment mode: The interest is paid monthly and the principal is repaid on
its due date.

6 months A2 Financing against the O/A import payment term USD 4 million

1: Interest rate (fee): A 0.1% service fee is charged. The interest rate is
specified in "Other conditions".

2. Use condition: recurring.

3. Repayment mode: The interest is paid monthly and the principal is repaid on
its due date.

180 days B

Total line of credit

(for B1)

NTD 90 million     B1 Financing against the O/A export payment term USD 3
million

1: Interest rate (fee): A 0.3% service fee is charged. The interest rate is not
lower than (Libor+1.7%)/0.946.

2. Use condition: recurring.

3. Repayment mode: The interest is paid monthly and the principal is repaid on
its due date.

120 days Line effectiveness and joint guarantor: Item Line Type Effective From
Expiration On Deadline of First Use Joint Guarantor A Total line of credit
2015/02/06 2016/02/06 2015/06/06  

 

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B Total line of credit 2015/02/06 2016/02/06 2015/06/06  

Other conditions:

A (Total line of credit):

(1) The associated enterprise APPLIED OPTOELECTRONICS INC (Unified Business
No.:&322816A) shall provide a certificate of time deposit of foreign currency
issued by us as a collateral to secure the claims. 100% of the remaining line of
credit is provisioned as a deposit.

(2) A loan shall be made to cover 100% of the amount on an invoice or invoice
list under the O/A import term. The interest rate for a loan in USD shall not be
lower than (Libor+1.2%)/0.946 or lower than TAIFX3/0.946 for the same period of
time. The interest rates for loans in other currencies shall not be lower than
(Libor+1.2%)/0.946.

(3) The import transaction under the O/A term shall be conducted by an
associated enterprise (limited to APPLIED OPTOELECTRONICS INC and the like) and
100% of the amount on an invoice or invoice list shall be provisioned for making
a loan.

B (Total line of credit):

(1) A loan shall be made to cover 80% of the amount on an invoice or invoice
list under the O/A export term. When the loan is used, invoices and export
declaration documents shall be provided. The payments made by the buyer against
the documents shall be remitted to our repayment account to offset the loan.
Failing to do so, the line of credit is revoked and the debt is collected
immediately. The export transaction under the O/A term shall be conducted by an
associated enterprise such as APPLIED OPTOELECTRONICS INC.

(2) 20% of the used line of credit is provisioned as a collateral.

(3) Where an export transaction under the O/A term is conducted by the
associated enterprise APPLIED OPTOELECTRONICS INC, the remaining line of credit
shall not exceed USD 1 million.

 

II. Precautions:

(I) You shall provide a copy of board meeting minutes indicating your acceptance
of the above-mentioned lines of credit.

(II) We can fairly adjust the above-mentioned credit granting conditions based
on market conditions and capital costs. The conditions in the agreement signed
between you and us or the conditions approved by us when you use credits shall
prevail for future transactions between you and us.

(III) (1) You shall provide a document from APPLIED OPTOELECTRONICS INC that
authorizes its Taiwan branch to apply for lines of credit in the name of the
Taiwan branch. (2) The enterprise owner is invited to conduct more financial
transactions with us.

 

Regards

 

Taiwan branch of APPLIED OPTOELECTRONICS INC

 

 

Corporate Finance Center of E.SUN BANK

 

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