[ex103gtatprioritynote001.jpg]
EXECUTION VERSION PRIORITY NOTE $22,500,000.00 July 20, 2015 For value received,
GT Advanced Technologies Limited (“GT Hong Kong” or “Maker”), a Hong Kong
limited liability company, hereby promises to pay to GTAT Corporation, a
Delaware corporation (“GTAT Corp.” and, together with any transferee permitted
under the terms hereof, “Holder”), no event later than the Maturity Date (as
defined herein), the principal amount of $22,500,000.00, together with interest
thereon calculated in accordance with the provisions of this promissory note (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Note”). 1. Definitions. 1.1 “2010 Services Agreement” means that certain
Management and Administrative Services Agreement, effective as of July 5, 2010,
between GTAT Corp. and GT Hong Kong, as amended by that certain First Amendment
to Management and Administrative Services Agreement (Effective as of July 5,
2010), dated as of July 20, 2015. 1.2 “2011 Services Agreement” means that
certain Management and Administrative Services Agreement, effective as of April
3, 2011, between GTAT Corp. and GT Hong Kong, as amended by that certain First
Amendment to Management and Administrative Services Agreement (Effective as of
April 3, 2011), dated as of July 20, 2015. 1.3 “ASF Furnaces” means advanced
sapphire furnaces. 1.4 “ASF License Agreement” means that certain License
Agreement, by and between GTAT Corp. and GT Hong Kong, effective as of April 1,
2011, as modified by that certain Sapphire Transfer Pricing Analysis and Report
for the Fiscal Year Ended March 31, 2012, issued January 21, 2013, and as
amended by that certain First Amendment to ASF License Agreement, dated as of
July 20, 2015. 1.5 “Bankruptcy Code” means title 11 of the United States Code,
as in effect from time to time. 1.6 “Business Day” means any day that is not a
Saturday, Sunday, or other day on which banks are authorized or required to
close in the state of New York. 1.7 “Chapter 11 Cases” means the voluntary
chapter 11 bankruptcy cases initiated by GT Advanced Technologies Inc. and its
affiliated debtors in the Court, which are jointly administered under Case No.
14-11916-HJB. 1.8 “Contingent Note” means that certain Contingent Note made by
GT Hong Kong in favor of GTAT Corp. of even date herewith (as amended, restated,
supplemented, or otherwise modified from time to time).

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote002.jpg]
2 1.9 “Cost Sharing Agreement” means that certain Agreement for Sharing
Development Costs, by and between GTAT Corp. and GT Hong Kong, effective as of
April 1, 2011, as amended by that certain First Amendment to Cost Sharing
Agreement, dated as of July 20, 2015. 1.10 “Court” means the United States
Bankruptcy Court for the District of New Hampshire. 1.11 “Debenture” means that
certain Debenture between GT Hong Kong, GTAT Corp., and GT SPE, dated as of July
20, 2015. 1.12 “Debtors” means GT Advanced Technologies Inc. and its affiliated
debtors in the Chapter 11 Cases. 1.13 “DIP Financing” means the debtor in
possession financing to be provided by certain holders of the 3.00% Senior
Convertible Notes due 2017 and 3.00% Senior Convertible Notes issued by GT
Advanced Technologies Inc. 1.14 “Dollars” or “$” means United States dollars.
1.15 “Event of Default” has the meaning set forth in Section 7.1 hereof. 1.16
“GT SPE” means GT Advanced Equipment Holding LLC. 1.17 “Intercompany Settlement
Agreement” means that certain Intercompany Settlement Agreement, dated July 20,
2015, by and among GTAT Corp., GT Hong Kong, and GT SPE. 1.18 “Intercompany
Sales Agreement” means that certain Intercompany Sales Agreement, dated July 20,
2015, by and among GTAT Corp., GT Hong Kong, and GT SPE. 1.19 “Maturity Date”
means the earlier of the (i) date on which an Event of Default occurs and (ii)
date that is two years from the date hereof. 1.20 “Obligations” means all
principal, interest, fees (if any), charges, expenses, attorneys’ fees, and any
other sum chargeable to Maker under this Note. 1.21 “Poly/DSS License Agreement”
means that certain License Agreement, by and between GTAT Corp. and GT Hong
Kong, effective as of July 5, 2010, as amended by that certain Amendment No. 1
to License Agreement, effective as of April 3, 2011, as further modified by that
certain Polysilicon Transfer Pricing Analysis and Report for the Calendar Year
Ended December 31, 2013), and as further amended by that certain First Amendment
to Poly/DSS License Agreement, dated as of July 20, 2015. 1.22 “Priority Note
Collateral” means all of GT Hong Kong’s assets, whether consisting of real,
personal, tangible, or intangible property (including 100% of the outstanding
share of capital stock of any subsidiaries of GT Hong Kong and any and all
intercompany claims

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote003.jpg]
3 and receivables, whether arising prior to the date hereof or thereafter) and,
in each case, the proceeds of any of the foregoing. 2. Interest. The Note shall
bear interest on the outstanding principal amount thereof at a rate per annum
equal to 12.5%, to be paid in kind on a monthly basis; provided that any such
interest paid in kind shall accrue and be capitalized and be added to the
aggregate principal balance of this Note in arrears on a monthly basis. 3.
Payment of Principal and Interest on Note. 3.1 Payment on Maturity Date. On the
Maturity Date, Maker shall pay, in cash, the outstanding principal and accrued
interest on this Note. 3.2 No Amortization. This Note shall not amortize prior
to the Maturity Date. 3.3 No Prepayment. This Note may not be voluntarily
prepaid prior to the Maturity Date. 4. Treatment of Note; Set-Off; Taxes. 4.1
The Obligations incurred under this Note shall be treated as allowed
administrative expense claims under sections 503(b) and 507(a)(2) of the
Bankruptcy Code against Maker in the Chapter 11 Cases, which allowed claim shall
not be subject to setoff or recoupment. 4.2 All payments to be made to Holder
under this Note shall be made free and clear of and (save as required by law)
without any deduction for or on account of any tax, withholding, charges,
set-off or counterclaim (except for any income or profit tax). If Maker is
required by law to make a deduction or withholding (except for any income or
profit tax) from any payment made under this Note, then the sum payable by Maker
in respect of which such deduction or withholding is required to be made shall
be increased to the extent necessary to ensure that, after the making of such
deduction or withholding (including any deduction or withholding applicable to
additional sums payable under this Section 4.2), Holder receives and retains
(free from any liability in respect of any such deduction or withholding) a net
sum equal to the sum which it would have received and so retained had no such
deduction or withholding been made or been required to be made. If Maker makes
any payment under this Note in respect of which it is required by law to make
any deduction or withholding (except for any income or profit tax), then it
shall pay the full amount to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under applicable law
and shall deliver to Holder, within thirty (30) calendar days after it has made
such payment to the applicable authority, an original receipt or other
appropriate evidence issued by such authority evidencing the payment to such
authority of all amounts so required to be deducted or withheld from such
payment. 4.3 For the avoidance of doubt, Holder shall have full recourse to
Maker for the outstanding amount of the Obligations.

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote004.jpg]
4 5. Covenants 5.1 Total cash disbursements made by GT Hong Kong, excluding,
without duplication, (i) cash expenditures with respect to fully executed
purchase orders that will be accounted for as costs of goods sold when revenue
is recognized, provided, that for cash expenditures beginning on July 1, 2015,
such expenditures related to each fully executed purchase order shall not exceed
the total revenue to be recognized over the life of the applicable fully
executed purchase order (irrespective of any required revenue deferrals), (ii)
payments to GTAT Corp. and any cash withholding taxes related to such payments
that are royalty payments, (iii) costs related directly to the shipping and
installation of sold ASF Furnaces and sold furnace components (including cash
taxes related directly to such shipping and installation), (iv) costs related
directly to seed purchases pursuant to the Seed Agreement (as defined in the
Debtors’ motion, dated March 30, 2015 [Docket No. 1544]), and (v) payments of
certain amounts to Kerry Logistics in accordance with the Stipulation and Agreed
Order entered by the Bankruptcy Court [Docket No. 1668], shall not exceed (a)
$4.5 million in Q3 fiscal year 2015 (commencing July 5, 2015 and ending
September 26, 2015), (b) $3.75 million in Q4 fiscal year 2015 (commencing
September 27, 2015 and ending December 31, 2015), and (c) $2.50 million per
every fiscal quarter thereafter (Q1 fiscal year 2016 commencing January 1, 2016
and ending April 2, 2016 and Q2 fiscal year 2016 commencing April 3, 2016 and
ending July 2, 2016). 5.2 GT Hong Kong shall provide monthly cash reports to
GTAT Corp. with copies to the legal and financial advisors of GTAT Corp., GT
SPE, the lenders under the DIP Financing, and the official committee of
unsecured creditors appointed in the Chapter 11 Cases. 6. Security Interest 6.1
Maker hereby grants to Holder a first priority security interest in the Priority
Note Collateral to secure all of Maker’s Obligations. Maker hereby authorizes
Holder to file financing statements describing the Priority Note Collateral and
to take any and all other steps necessary or advisable to perfect or protect
such security interest. 6.2 To secure all of Maker’ Obligations, Maker also
grants to Holder a floating charge in the Priority Note Collateral, pursuant to
the Debenture; provided, however, that nothing in the Debenture shall be deemed
or interpreted to modify the rights set forth in this Note. 6.3 The security
interest securing this Note shall be (i) senior to the security interest
securing the Contingent Note and (ii) senior to the security interest securing
the Intercompany Sales Agreement. 6.4 Maker agrees to execute any further
documents, and to take any further actions, reasonably requested by Holder to
evidence or perfect the security interests granted under this Article 6, to
maintain the perfection and priority of these security interests, or to
effectuate the rights granted to Holder in this Article 6.

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote005.jpg]
5 7. Events of Default. 7.1 Definition. For purposes of this Note, an “Event of
Default” shall be deemed to have occurred if: (a) Maker fails to pay at the
Maturity Date the full amount of principal payment and interest then accrued on
this Note; (b) An Event of Default has occurred under the Contingent Note; (c)
GT Hong Kong is in material breach of any of its obligations under this Note
(other than the failure to pay at the Maturity Date the full amount of principal
and interest then accrued on this Note), the Intercompany Settlement Agreement,
the ASF License Agreement, the Cost Sharing Agreement, the Poly/DSS License
Agreement, the 2010 Services Agreement, or the 2011 Services Agreement, and such
breach is not cured within 10 days after GTAT Corp. provided notice of such
breach to GT Hong Kong; (d) GTAT Corp. and its direct and indirect subsidiaries
organized in the United States have less than $22,500,000 in unrestricted cash;
(e) The Bankruptcy Court enters an order authorizing the sale of all or
substantially all assets of GTAT Corp. at a time when the DIP Financing will not
have been repaid in full on or before consummation of such a sale; or (f) The
Chapter 11 Case of either GTAT Corp. or GT Hong Kong is converted to a case
under chapter 7 of the Bankruptcy Code. 7.2 Consequences of Events of Default.
(a) If an Event of Default has occurred, the aggregate principal amount of this
Note (together with all accrued interest thereon and all other amounts due and
payable with respect thereto) shall become immediately due and payable without
any action on the part of Holder, and Maker shall immediately pay to Holder all
amounts due and payable with respect to this Note. (b) If an Event of Default
has occurred, Holder may pursue any and all remedies available at law
(including, but not limited to, those available under the provisions of the New
York Uniform Commercial Code and those set forth in the Debenture) or in equity
to enforce the security interests granted hereunder by Maker to Holder,
including, without limitation: (i) file suit and obtain judgment and, in
conjunction with any action, seek any ancillary remedies provided by law,
including levy of attachment and garnishment, (ii) demand that Maker make the
Priority Note Collateral available to Holder as it may direct (and Maker hereby
agrees to comply with such demand), and

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote006.jpg]
6 (iii) with or without taking possession, sell, lease, or otherwise dispose of
the Priority Note Collateral at public or private sale in accordance with the
New York Uniform Commercial Code, which remedies may be pursued separately,
successively, or simultaneously. (c) Holder shall also have any other rights
that Holder may have been afforded under any contract or agreement at any time
and any other rights that Holder may have pursuant to applicable law. (d) Maker
hereby waives diligence, presentment, protest and demand, and notice of protest
and demand, dishonor, and nonpayment of this Note, and expressly agrees that
this Note, or any payment hereunder, may be extended from time to time and that
Holder hereof may accept security for this Note or release security for this
Note, all without in any way affecting the liability of Maker hereunder. (e) The
rights and remedies of Holder under this Note are cumulative. Holder shall have
all other rights and remedies not inconsistent herewith as provided under the
New York Uniform Commercial Code, by law, or in equity. No exercise by Holder of
one right or remedy shall be deemed an election, and no waiver by Holder of any
Event of Default shall be deemed a continuing waiver. No delay by Holder shall
constitute a waiver, election, or acquiescence by it. 8. Attorney’s Fees. Maker
agrees to pay or reimburse upon demand Holder for all of its reasonable
out-of-pocket costs and expenses (including reasonable attorney’s fees) incurred
in connection with the enforcement of Maker’s Obligations or the exercise of any
rights or remedies hereunder or under applicable law, including, without
limitation, the exercise of rights and remedies with respect to the Priority
Note Collateral. 9. Amendment and Waiver. Except as otherwise expressly provided
herein, the provisions of this Note may be amended and Maker may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, if Maker has obtained the written consent of Holder of this Note. 10.
Assignment and Transfer. Holder may assign at any time (or grant a participation
interest at any time in) this Note to any of its affiliates, any financial
institutions, or any other person (including upon enforcement of rights by any
secured creditor of the Holder), in which event, the assignee shall have, to the
extent of such assignment, the same rights and benefits as it would if it were
Holder, except as otherwise provided by the terms of such assignment or
participation. 11. Cancellation. After all principal and accrued interest at any
time owed on this Note has been paid in full, this Note shall be surrendered to
Maker for cancellation and shall not be reissued. 12. Payments. All payments to
be made to Holder shall be made in the lawful money of the United States of
America in immediately available funds.

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote007.jpg]
7 13. Place of Payment. Payments of principal and interest shall be delivered to
Holder at such address as is specified by prior written notice by Holder. 14.
Governing Law. All questions concerning the construction, validity, and
interpretation of this Note will be governed by and construed in accordance with
the domestic laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York. 15. Loss, Theft, Destruction, or
Mutilation of Note. Upon receipt by Maker of evidence reasonably satisfactory to
Maker of the loss, theft, destruction or mutilation of this Note, and, in case
of loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to Maker or, in case of mutilation, upon surrendering this Note for
cancellation, and upon reimbursement to Maker of all reasonable expenses
incidental thereto, Maker will make and deliver a new note of like tenor in lieu
of this Note. Any note made and delivered in accordance with the provisions of
this paragraph shall be dated as of the date hereof. 16. Waiver of Presentment,
Demand, and Dishonor. Maker hereby waives presentment for payment, protest,
demand, notice of protest, notice of nonpayment, and diligence with respect to
this Note, and waives and renounces all rights to the benefits of any statute of
limitations or any moratorium, appraisement, exemption, or homestead now
provided or that hereafter may be provided by any federal or applicable state
statute, including, but not limited to, exemptions provided by or allowed under
the Bankruptcy Code, both as to itself and as to all of its property, whether
real or personal, against the enforcement and collection of the obligations
evidenced by this Note and any and all extensions, renewals, and modifications
hereof. 17. Usury Laws. It is the intention of the Maker and Holder to conform
strictly to all applicable usury laws now or hereafter in force, and any
interest payable under this Note shall be subject to reduction to the amount not
in excess of the maximum legal amount allowed under the applicable usury laws as
now or hereafter constructed by the courts having jurisdiction over such
matters. If the maturity of this Note is accelerated by reason of an Event of
Default or otherwise, then earned interest may never include more than the
maximum amount permitted by law, computed from the date hereof until payment,
and any interest in excess of the maximum amount permitted by law shall be
canceled automatically and, if theretofore paid, shall, at the option of Holder,
either be rebated to Maker or credited on the principal amount of this Note, or
if this Note has been paid, then the excess shall be rebated to Maker. The
aggregate amount of all interest (whether designated as interest, service
charges, points, or otherwise) contracted for, chargeable, or receivable under
this Note shall under no circumstances exceed the maximum legal rate upon the
unpaid principal balance of this Note remaining unpaid from time to time. If
such interest does exceed the maximum legal rate, it shall be deemed a mistake
and such excess shall be canceled automatically and, if theretofore paid,
rebated to Maker or credited on the principal amount of this Note, or if this
Note has been repaid, then such excess shall be rebated to Maker. 18. Waiver of
Jury Trial; Consent to Jurisdiction. Maker (and, by virtue of its acceptance
hereof, Holder) hereby irrevocably waive all right to trial by jury in any
litigation, action, proceeding, cross-claim, or counterclaim in any court
(whether based on contract, tort, or

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote008.jpg]
8 otherwise) arising out of, relating to, or in connection with (a) this Note or
the validity, performance, interpretation, collection, or enforcement hereof or
(b) the actions of such party in the negotiation, authorization, execution,
delivery, administration, performance, or enforcement hereof. Maker (and, by
virtue of its acceptance hereof, Holder) further hereby waive any right of
offset or right to interpose any counterclaim in any such action, except for
compulsory counterclaims. All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined in the Bankruptcy Court, or if
the Bankruptcy Court no longer has jurisdiction or abstains, then in the state
courts of New York sitting in New York City in the Borough of Manhattan or, to
the extent subject matter jurisdiction exists therefor, the United States
District Court for the Southern District of New York, and the Maker and Holder
irrevocably submit to the exclusive jurisdiction of such courts in respect of
any such actions or proceedings. [Remainder of Page Intentionally Left Blank]

--------------------------------------------------------------------------------

 
[ex103gtatprioritynote009.jpg]

--------------------------------------------------------------------------------