Exhibit 10.4

 

PREPAYMENT AGREEMENT

 

between

 

GTAT CORPORATION

 

and

 

APPLE INC.

 

Dated as of October 31, 2013

 

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PREPAYMENT AGREEMENT

 

THIS PREPAYMENT AGREEMENT #C56-13-03457, is entered into as of October 31, 2013
(this “Agreement”), between GTAT Corporation, a Delaware corporation having its
principal place of business at 243 Daniel Webster Highway, Merrimack, NH 03054
(“GTAT” or “Supplier”) and Apple Inc., a California corporation having its
principal place of business at 1 Infinite Loop, Cupertino, California 95014,
United States (“Apple”).

 

RECITALS

 

WHEREAS, concurrently with execution of this Agreement, Apple and GTAT are
entering into a Master Development and Supply Agreement, #C56-13-02947,
effective October 31, 2013 (such agreement, as the same may be amended, modified
and supplemented from time to time, the “MDSA”) and a Statement of Work to MDSA
(such statement of work, as the same may be amended, modified and supplemented
from time to time, the “SOW”), providing certain terms and conditions for
Apple’s purchase of goods that GTAT will develop, manufacture, sell and deliver
to Apple for use in connection with Apple’s products; and

 

WHEREAS, Apple has agreed, subject to certain conditions described below, to
make a prepayment to GTAT up to Five Hundred Seventy Eight Million U.S. Dollars
(US$578,000,000) (the “Prepayment”) as payment in advance for the purchase of
Goods (as defined in the SOW) by Apple pursuant to the MDSA and SOW; and

 

WHEREAS, Apple would not be willing to make the Prepayment if GTAT did not
execute this Agreement and the other Transaction Documents (defined as provided
below).

 

NOW, THEREFORE, in consideration of the premises of the mutual covenants herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:

 

1.              Definitions.

 

Certain capitalized terms have the meaning set forth of Attachment 1. 
Capitalized terms used but not otherwise defined herein shall have the meaning
set forth in the MDSA or SOW.

 

2.              Prepayment.

 

(a)                                 Subject to Sections 2(c) and (d) below, and
provided that, at the time for each payment (i) no Trigger Event (as defined
below) has occurred and (ii) there are no ongoing disputes under the Facility
Lease Agreement which have a material impact on the use of the manufacturing
facility to be located in Mesa, AZ that Apple is purchasing and developing (the
“Mesa Facility”) for its intended purpose, Apple will make the Prepayment by
remitting funds to an account designated by GTAT as follows (the “Milestone
Payments”):

 

·                  $[***] within [***] Business Days after execution of all of
the Transaction Documents;

·                  $[***] by close of business on [***];

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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·                  $[***]  by close of business on [***];

·                  $[***]  by close of business on [***].

 

(b)                                 The Prepayment proceeds shall be used
exclusively to [***].

 

(c)                                  Apple reserves the right to conduct audits
of [***].  In addition, if any portion of any previous Milestone Payment has not
been transferred to the SPE pursuant to Section 4(d) below and the SPE Loan
Agreement, Apple shall be entitled to receive immediate repayment of such amount
and may withhold any subsequent Milestone Payment until such amount has been
received or the transfer under the SPE Loan Agreement has occurred.

 

(d)                                 Apple shall be entitled to not pay the first
Milestone Payment and any subsequent Milestone Payment until Apple, in its sole
discretion, has received documentary evidence that all liens held by Bank of
America related to GTAT’s loan facility with Bank of America have been
terminated and released.  Apple shall be entitled to not pay any Milestone
Payment if GTAT does not take any reasonable action requested by Apple that
Apple deems necessary to perfect and continue the security interests granted to
Apple under the Transaction Documents and such lack of cooperation prevents or
precludes Apple from being able to perfect or continue such security interest.
If GTAT has not met the technology specifications in Exhibit B to this Agreement
by the deadlines set forth in Exhibit B, Apple shall be entitled to cancel any
subsequent Milestone Payment and to receive repayment within five (5) Business
Days of all or a portion of all previous Milestone Payments.  If Apple and GTAT
have not executed the MEPA (as defined in the SOW) prior to the payment of the
second Milestone Payment, Apple shall be entitled to cancel and not pay the
second Milestone Payment and any subsequent Milestone Payment and to receive
repayment within five (5) Business Days of all or a portion of all previous
Milestone Payments.

 

(e)                                  Subject to any right to accelerate
repayment hereunder, each calendar quarter beginning January 1, 2015 and through
the calendar quarter ending December 31, 2019, Apple shall recoup Twenty Eight
Million Nine Hundred Thousand U.S. Dollars (US$28,900,000) during that calendar
quarter towards the Prepayment Balance (the “Quarterly Recoupment Amount”) from
accounts payable owed by Apple to GTAT [***].

 

(f)                                   Provided that GTAT is, and remains at all
times, in compliance with [***].  Nothing in the immediately preceding sentence
shall relieve GTAT of its obligations under Section 2(h).

 

(g)                                  If GTAT elects to terminate the exclusivity
restrictions set forth in Section 9 of the SOW, it shall repay the Prepayment
Balance to Apple within 180 days of such election.  The exclusivity restrictions
in the SOW will remain in effect until GTAT makes such repayment.

 

(h)                                 Notwithstanding Section 2(e) or 2(f) above,
if Apple has not recouped the Prepayment in full by January 1, 2020, GTAT will
by January 13, 2020 pay the Prepayment Balance to Apple by transfer of
immediately available funds to an account designated by Apple.

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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3.              Execution of Transaction Documents.

 

(a)                                 Contemporaneously with execution of this
Agreement, GTAT will deliver (i) evidence of the formation of a Delaware Limited
Liability Company as a wholly-owned subsidiary (the “SPE”) and (ii) the LLC
Agreement and GTAT Board resolution forming the SPE, which documents shall be in
form and substance acceptable to Apple.  The LLC Agreement will contain
customary provisions that ensure the SPE is and remains bankruptcy-remote.

 

(b)                                 Contemporaneously with execution of this
Agreement, the parties will execute the Transaction Documents, all of which
shall be in form and substance acceptable to Apple.

 

4.              Covenants.  GTAT shall:

 

(a)                                 cause its obligations under this Agreement,
the MDSA, and the SOW at all times to rank at least pari passu with all its
other unsecured and unsubordinated obligations for indebtedness, except for
those preferred by operation of law;

 

(b)                                 participate in conference calls or meetings
with Apple regarding GTAT’s financial condition, at least once each quarter, or
more frequently as reasonably requested by Apple;

 

(c)                                  immediately notify Apple of the occurrence
of any Trigger Event or any event that would constitute a Trigger Event upon
notice thereof by Apple, and any event which, to the best of GTAT’s knowledge,
with the passing of time or giving of notice to Apple, or both, would constitute
a Trigger Event;

 

(d)                                 within two (2) Business Days of any
Milestone Payment, loan such Milestone Payment to the SPE pursuant to the SPE
Loan Agreement, and cause the SPE to use the Prepayment [***];

 

(e)                                  not encumber its membership interests in
the SPE or its interests in the Furnaces other than as set forth in the SPE Loan
Agreement, the SPE Loan Assignment Agreement and the Pledge Agreement;

 

(f)                                   operate the SPE consistent with the LLC
Agreement and not cause the SPE to have any business other than ownership of the
Mesa Furnaces;

 

(g)                                  deliver to Apple:

 

(i)                                     as soon as available after the end of
each fiscal year of GT Advanced Technologies Inc. (and, in any event, the
earlier of 90 days after the end of such fiscal year or as soon as publicly
available) copies of the annual, audited, consolidated financial statements for
GT Advanced Technologies Inc. in English that are or will be filed with the
Securities and Exchange Commission (containing a balance sheet and statements of
income, and cash flows, and notes thereto, as of the end of and for such fiscal
year and the immediately preceding fiscal year);

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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(ii)                                  as soon as available (and in any event
within 60 days after the end of each fiscal quarter of GT Advanced Technologies
Inc.) copies of all interim unaudited quarterly consolidated financial
statements for GT Advanced Technologies Inc. in English that are or will be
filed with the Securities and Exchange Commission (containing a consolidated
balance sheet and consolidated statements of income, and cash flows, and notes
thereto, as of the end of and for the interim period covered thereby and the
comparable interim period in the immediately preceding fiscal year); and

 

(iii)                               as soon as available (and in any event
within 30 Business Days after the end of each fiscal quarter of GT Advanced
Technologies Inc.) a statement setting forth in reasonable detail: (1) the
amount of the Prepayment recouped by Apple or repaid by GTAT during the previous
fiscal quarter of the GTAT, (2) the Prepayment Balance as of the last day of
such fiscal quarter of GTAT, (3) Consolidated Cash Balance as of the last day of
such fiscal quarter; and (4) the Projections.

 

(h)                                 at the time of delivery of the financial
statements provided for in Section 4(g) above, provide to Apple a duly completed
Compliance Certificate substantially in the form of Exhibit C hereto stating
that no Trigger Event or event which with the passing of time or giving of
notice to Apple, or both, would constitute a Trigger Event, exists, or if any
Trigger Event or such other event does exist, specifying the nature and extent
thereof and what action GTAT proposes to take with respect thereto.

 

5.              Trigger Events.  Each of the following events shall constitute a
“Trigger Event” immediately upon Apple giving GTAT notice of the occurrence
thereof, which notice may consist of any written notice to GTAT, including by
electronic mail:

 

(a)                                 if Apple has given GTAT notice of one or
more breaches under the SOW or the MDSA for which the cumulative liquidated
damages for such breach(es) is One Hundred Million US Dollars (US$100,000,000)
or more;

 

(b)                                 any breach by GTAT of Section 2 or 4 of this
Agreement;

 

(c)                                  termination of the SOW by Apple for Cause
(as defined in the SOW);

 

(d)                                 any indebtedness of GTAT or Supplier
Affiliate in excess of One Hundred Million US Dollars (US$100,000,000)
(“Material Debt”) in the aggregate is accelerated, or the holder (i.e.,
creditor) or holders of Material Debt or any trustee or agent on its or their
behalf, pursuant to their rights under the applicable debt instrument, cause
Material Debt to become due or require the prepayment, repurchase, redemption or
defeasance thereof, before its scheduled maturity, provided that if any
convertible notes or bonds issued by the Consolidated Entities become redeemable
prior to their maturity because the stock of GT Advanced Technologies Inc. or
the trading price of such notes has reached the conversion price is not a
Trigger Event under this provision;

 

(e)                                  if GTAT notifies Apple in writing that it
will no longer perform its material obligations under the MDSA or SOW for any or
no reason;

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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(f)                                   if GTAT or any Supplier Affiliate is
subject to an Insolvency Proceeding or if an Insolvency Proceeding is filed
against GTAT or any Supplier Affiliate and, if such Insolvency Proceeding is
involuntary, is not dismissed within sixty (60) days;

 

(g)                                  if any Transaction Document shall have not
been executed or becomes invalid or unenforceable in its entirety;

 

(h)                                 if as of the last day of any fiscal quarter
of GTAT, [***];

 

(i)                                     if as of the last day of any fiscal
quarter of GTAT, [***];

 

(j)                                    if the Projections show a Cash Balance of
less than [***] at the end of the six-month period reflected in the applicable
Projections;

 

(k)                                 if the Consolidated DPO is more than [***];
or

 

(l)                                     if two of any of the following have
occurred at the end of any fiscal quarter of GTAT and both are continuing
forty-five (45) days following the end of that fiscal quarter:

 

(i)                                     the Consolidated Cash Balance is below
One Hundred Twenty Five Million United States Dollars (US$125,000,000);

 

(ii)                                  the Projections show a Consolidated Cash
Balance of less than $100 million at the end of the following fiscal quarter; or

 

(iii)                               Consolidated DPO is more than 70 days.

 

6.              Remedies.

 

(a)                                 Upon the occurrence and during the
continuance of any Trigger Event, Apple may take any or all of the following
actions, in each case, in its discretion:

 

(i)                                     demand repayment of the entire
Prepayment Balance, in which event, GTAT shall immediately repay such balance;

 

(ii)                                  accelerate the Prepayment Balance;

 

(iii)                               from time to time, apply the Prepayment
Balance to any amounts Apple owes to GTAT from time to time after such Trigger
Event;

 

(iv)                              foreclose on GTAT’s membership interests in
the SPE pursuant to the Pledge Agreement;

 

(v)                                 foreclose on the collateral under the GTAT
Security Agreement; or

 

(vi)                              foreclose on the SPE’s assets pursuant to the
Secured Guarantee Agreement.

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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Upon electing to take any or all of the foregoing actions, Apple shall give
written notice thereof to GTAT; provided, the failure by Apple to give any such
notice shall not affect the right of Apple to take any or all such actions as it
may deem appropriate in its discretion or any other right or remedy of Apple
hereunder.

 

(b)                                 The rights described in this Section 6 are
in addition to any other rights and remedies available under this Agreement, the
SOW, the MDSA, or applicable law or in equity except to the extent that such
rights and remedies are inconsistent with the express terms of this Section 6
(in which case the terms of this Section 6 shall apply).

 

7.              Miscellaneous.

 

(a)                                 THE PARTIES ACKNOWLEDGE THAT EACH HAS READ
THE AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND
CONDITIONS.  FURTHER, THE PARTIES AGREE THAT THE AGREEMENT IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THEM, WHICH SUPERSEDES ALL
PROPOSALS AND PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS
BETWEEN THEM RELATING TO THE SUBJECT MATTER HEREOF, EXCLUDING ANY NONDISCLOSURE
AGREEMENTS, THE MDSA, AND THE SOW.

 

(b)                                 No provision of this Agreement shall be
construed against any party by reason of such party having, or being deemed to
have, drafted the provision or any provision of the MDSA or the SOW.  GTAT and
Apple each acknowledge that it has been advised by its counsel in the
preparation, negotiation and execution of this Agreement, the MDSA, and the SOW.

 

(c)                                  Notwithstanding any provision to the
contrary contained herein, in the MDSA or in the SOW, to the extent the
obligations of GTAT shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the
obligations of GTAT hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including,
without limitation, the Bankruptcy Code of the United States).

 

(d)                                 In the event of any conflict between the
provisions of this Agreement and either the MDSA or the SOW, the order of
precedence will be (i) this Agreement; (ii) the SOW; and (iii) the MDSA.

 

(e)                                  This Agreement was drafted with the joint
participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair
meaning thereof. All references to “$” are to the legal tender of the United
States of America.

 

(f)                                   The parties may amend this Agreement in
the manner set forth in Section 24 of Attachment 1 to the MDSA.

 

(g)                                  Except as provided in Section 5, all
notices will be provided as set forth in Section 19 of Attachment 1 to the MDSA.

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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(h)                                 If a court of competent jurisdiction finds
any provision of this Agreement unlawful or unenforceable, that provision will
be enforced to the maximum extent permissible so as to effect the intent of the
parties, and the remainder of this Agreement will continue in full force and
effect.  If this Agreement is held unenforceable in a final non-appealable
judgment, order or other decision of a federal, state, local or foreign court
having jurisdiction as a result of any provision in the MDSA also being held
unenforceable or the MDSA or SOW is so held unenforceable, GTAT shall promptly
refund the Prepayment Balance in immediately available funds to a bank account
designated by Apple.

 

(i)                                     No party hereto may assign or delegate
its rights or obligations under this Agreement without the other’s prior written
consent; provided, however, that Apple may assign all of its rights and
obligations under this Agreement without the consent of GTAT (x) in connection
with the sale of all or substantially all of its assets relating to Apple, or
(y) to an affiliate of subsidiary of Apple, and in each case, Apple shall give
written notice to GTAT of such assignment.  This Agreement shall be binding
upon, and inure to the benefit of, the successors, representatives, and
administrators of the parties.

 

(j)                                    If any lawsuit or other action or
proceeding relating to this Agreement is brought by either party hereto against
the other party hereto, the prevailing party shall be entitled to recover
reasonable attorneys’ fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).

 

(k)                                 THE VALIDITY, CONSTRUCTION AND EFFECT OF
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO ITS LAWS REGARDING CHOICE OF APPLICABLE LAW.

 

(l)                                     Any disputes arising out of this
Agreement shall be resolved under the terms and procedures set forth in Sections
15 and 16 of Attachment 1 to the MDSA.

 

(m)                             The parties agree that this Agreement relates to
a transaction involving not less than one million United States dollars
($1,000,000) in the aggregate and the parties have submitted to the jurisdiction
of the courts of the State of California, in each case, within the meaning of
California Code of Civil Procedure section 410.40, and the federal courts with
jurisdiction in such territory.

 

(n)                                 This Agreement may be executed in any number
of counterparts each of which shall be an original with the same effect as if
the signatures thereof and hereto were upon the same instrument.  The delivery
of an executed signature page by facsimile or similar electronic means
(including .PDF file) shall have the same effect as the delivery of an original.

 

(o)                                 Captions, headings and the table of contents
in this Agreement are for convenience only, and are not to be deemed part of
this Agreement.

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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IN WITNESS WHEREOF, each of GTAT and Apple has caused this Prepayment Agreement
to be executed and delivered by its duly authorized officer on the date first
set forth above.

 

 

GTAT CORPORATION

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

 

APPLE INC.

 

 

 

 

 

 

 

By: Peter Oppenheimer

 

Title: Senior Vice President, Chief Financial Officer

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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ATTACHMENT 1

Definitions

 

“Apple Furnace Lease Agreement” means the agreement pursuant to which the SPE
leases the Furnaces to Apple.

 

“Business Day” is a day other than a Saturday, Sunday or day on which banks in
San Francisco, California, U.S.A. are authorized or required to be closed for
business.

 

“Conditional Assignment Agreement” means the agreement pursuant to which GTAT
conditionally assigns its interests in the SPE Loan Agreement to Apple.

 

“Consolidated Cash Balance” means, as set forth in the Consolidated Entities’
financial statements filed with the Securities and Exchange Commission, as of
any date of determination, the sum of the following as stated on the
consolidated balance sheet of GTAT and the Consolidated Entities, to the extent
the following are permitted under GTAT’s guidelines for the investment of its
cash and cash equivalents (excluding restricted cash): (i) cash; (ii) marketable
obligations issued or unconditionally guaranteed by, and backed by the full
faith and credit of, a government, maturing within twelve (12) months of the
date of acquisition; (iii) certificates of deposit, time deposits and bankers’
acceptances maturing within twelve (12) months of the date of acquisition, and
overnight bank deposits, in each case which are issued by a leading commercial
bank, and not subject to offset rights; (iv) repurchase obligations with a final
maturity of not more than twelve (12) months for underlying investments entered
into with any bank meeting the qualifications specified in clause (iii);
(v) commercial paper maturing within twelve (12) months of the date of
acquisition; and (vi) AAA rated Money Market funds with at least $1.0 billion in
assets and seeks to maintain a stable Net Asset Value (NAV) of $1.00 per share.

 

“Consolidated DPO” means, as of any date of determination, for GTAT and the
Consolidated Entities, the average of the opening accounts payable and the
ending accounts payable for that fiscal quarter divided by the cost of goods
sold plus the change in inventory for that fiscal quarter, all multiplied by 91
days.  As an example, if in Fiscal Quarter 1, the opening accounts payable were
$16.42 million, the ending accounts payable were $45.29 million, the cost of
goods sold was $109.71 million, the ending inventory was $150.74 and the opening
inventory was $119.64, Consolidated DPO is 35.72 days, calculated as follows:

 

DPO = 91 days x [(opening a/p + ending a/p)/2]/[cost of goods sold + (ending
inventory — opening inventory)] or

 

91 x [(16.42) + (45.29)/2]/(109.71 + (150.74-119.64)] = 35.72 days.

 

“Consolidated Entities” means any Supplier Affiliate that, together with GTAT,
is consolidated on the financial statements and reports as filed with the
Securities and Exchange Commission.

 

“GTAT Furnace Lease Agreement” means the agreement pursuant to which the SPE
leases the Mesa Furnaces or the Furnace Components, as applicable, to GTAT.

 

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“GTAT Security Agreement” means the security agreement between Apple and GTAT
pursuant to which GTAT grants to Apple a security interest in all of GTAT’s
assets.

 

“Mesa Facility Agreement” means the agreement pursuant to which Apple leases the
Mesa Facility to GTAT.

 

“Insolvency Proceeding” means a judicial or extra-judicial settlement with
creditors, an assignment for the benefit of creditors, bankruptcy or an
equivalent proceeding in the applicable jurisdiction, or a liquidation or
dissolution proceeding, or appointment of a receiver or trustee (or the like) in
bankruptcy or similar proceeding.

 

“LLC Agreement” means the agreement that is the formation document of the SPE.

 

“Pledge Agreement” means the agreement pursuant to which GTAT pledges its
membership interests in the SPE to Apple.

 

“Prepayment Balance” means, at any time, the portion of the Prepayment that has
not, in accordance with this Agreement, been applied to purchases of Goods by
Apple or repaid to Apple as of such time.

 

“Projections” means the consolidated rolling (forward) six-month cash flow
projections of GTAT and the Consolidated Entities, by month, detailing the
sources and uses of cash, and ending cash balance (excluding restricted cash) by
month over the rolling six-month period.

 

“Secured Guarantee Agreement” means the agreement pursuant to which the SPE
guarantees the obligations of GTAT to Apple under this Agreement, the SOW and
the MDSA and secured such guarantee with a security interest in its assets.

 

“SPE Loan Agreement” means the agreement pursuant to which GTAT loans the amount
necessary to purchase the Furnace Components and related equipment to the SPE.

 

“Supplier Affiliate” means any entity that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, Supplier.

 

“Transaction Documents” means the MDSA, the SOW, this Agreement, the Apple
Furnace Lease Agreement, the Conditional Assignment Agreement, the Pledge
Agreement, SPE Loan Agreement, the GTAT Furnace Lease Agreement, the LLC
Agreement, the Secured Guarantee Agreement, GTAT Security Agreement and the Mesa
Facility Lease Agreement.

 

[***] Portions of this exhibit have been redacted pursuant to a confidential
treatment request.  An unredacted version of this exhibit has been filed
separately with the Commission

 

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EXHIBIT A

 

[***]

 

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EXHIBIT B

 

[***]

 

13

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EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:             ,               

To:                             Apple

 

Ladies and Gentlemen:

 

Reference is made to that certain Prepayment Agreement, dated as of
October [    ], 2013 (“Prepayment Agreement”) between GTAT Corporation (“GTAT”)
and Apple Inc. (“Apple”).  Capitalized terms not defined herein have the
meanings given them in the Prepayment Agreement.

 

The undersigned officer hereby certifies as of the date hereof that he/she is
the                                                                            
    of GTAT, and that, as such, he/she is authorized to execute and deliver this
Certificate to Apple, and that:

 

1.                                      Attached hereto as Schedule 1 are the
financial statements, including Projections, required by Section 4(g) of the
Prepayment Agreement for the fiscal period of GTAT ended as of the above date. 
Such financial statements fairly present the financial condition, results of
operations and cash flows of GTAT and the Consolidated Entities (including the
SPE) in accordance with Generally Accepted Accounting Principles as of such date
and for such period, subject only to normal year-end audit adjustments and the
absence of footnotes.

 

2.                                      The undersigned has reviewed and is
familiar with the terms of the Prepayment Agreement and has made, or has caused
to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of GTAT during the accounting period covered
by the attached financial statements.

 

3.                                      As of the above date, Consolidated Cash
Balance is [        ]; Consolidated DPO is [        ].

 

4.                                      A review of the activities of GTAT and
the SPE during such fiscal period has been made under the supervision of the
undersigned with a view to determining whether during such fiscal period GTAT
performed and observed all their obligations under the Prepayment Agreement, and

 

select one:]

 

[to the best knowledge of the undersigned during such fiscal period, GTAT
performed and observed each covenant and condition of the Prepayment Agreement,
and no Trigger Event or event with the passing of time or giving of notice, or
both, would constitute a Trigger Event has occurred and is continuing.]

 

14

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—or—

 

[the following covenants or conditions have not been performed or observed and
the following is a list of each such Trigger Event and its nature and status:]

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                                 ,                  .

 

 

SUPPLIER

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

15

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SCHEDULE 1 TO COMPLIANCE CERTIFICATE

 

FINANCIAL STATEMENTS

 

16

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