Translation of the Approval Notice of Credit Line, dated June 12, 2018

1. General credit extension

comprehensive credit line

(1) Short term loan -

Import 0/A

1. Revolving loans

2. 120-day repayment period

3. The current reference rate for 120-day period is 1.95%

4. A copy of the Invoice must be obtained before the loan can be issued; credited in full amount; the remittance restricted only to the suppliers (must not be enterprises/individuals)

1. Revolving loans

2. 90-day repayment period

3. The current reference rate for 90-day period is 2%

Additional (special) conditions:

1. For case 1, the loan can only be issued once the received remittance (must not be enterprises/individuals) reaches NTD 50,000,000. And starting from the 1st day of the month following the loan being issued for the first time, remittances received during each quarter shall reach USD 10,000,000, so that the loan being issued can exceed NTD 200,000,000 for case 1.

2. For case 1, starting from the 1st day of the month following the loan being issued, the amount of average deposit during each quarter shall take a proportion of 30% in the average credit amount, if not, 30% of the credit balance shall be collected through the cash deposited in the account or pledge of a a banking deposit.

3. For case 1, an accountant's statement shall be obtained before the loan can be issued, stating that the accountant's check report for the 2017 financial statements shall be issued before July 31, 2018. And your company shall be required to provide the 2017 financial statements and the latest interim report of 2018 to the Bank before July 31, 2018.

4. Before the loan can be issued, a letter of responsibility issued by Prime World International Holdings Ltd. shall be required.

5. At the end of each quarter (March, May, August, and November), the Applied Optoelectronics, Inc.'s shareholding in Prime World International Holdings Ltd. shall be checked, which must not be less than 100%.