Exhibit 10.3


 





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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