GT Advanced Technologies Inc fka GTAT

[KaOsiris]

GTAT (US) proposes according to the 8K to solve the licensing, royalty agreements between GT US and GT HK and Ch11 costs in the following way:


IN RE GT ADVANCED TECHNOLOGIES, INC. ET AL. (“Debtors”)

SETTLEMENT PROPOSAL REGARDING INTERCOMPAY CLAIMS

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This terrn sheet (the Term Sheet”) sets forth the principal terms to be included in a global settlement of a variety of intercompany issues by and between GTAT Corp. (“GT US”) and GT Advanced Technologies Limited (“GT HK”) including. among other issues:

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SETTLEMENT TERMS

1. GT HK owes to GT US approximately $25.8 million (through Q2 2015) on account of certain intercompany claims arising after the Petition Date (the GT HK Intercompany Administrative Claims”). In addition, if GT HK were to assume the ASF LA, the DSS/Poly LA, the CSA and the MSA, GT HK would owe to GT US cure costs totaling $131.5 million (through Q2 2015).

2. On the date the settlement agreement is approved by the Bankruptcy Court (the “Approval Date”). GT HK will

a. pay GT US $10 million in cash, and

b. issue to GT US a Priority Note in the amount of the difference between the GT HK Intercompany Administrative Claim and 10 million, which is estimated to be $15.8 million. The Priority Note will be an allowed, first priority administrative claim in GT HK’s chapter 11 case, which allowed claim shall not be subject to setoff or recoupment. The Priority Note will be secured by all assets of GT HK, will be payable in cash in equal monthly installments over the course of twelve months, and will bear interest at the rate of 12.5% per annum, payable in cash.

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5. To cure prepetition defaults under lhe ASF LA, the DSS/Poly LA. the CSA and the MSA, on the Approval Date, GT HK will issue to GT US a Contingent Note ¡n the original principal amount of $ 131.5 million.

a. The Contingent Note will be payable solely by application of the Contingent Payment (i.e. from the proceeds of ASF furnace sales, as set forth in item 4 above), will hear PIK interest at the rate of 12.5% per annum, and will be secured solely by the proceeds of ASF furnace sales. Such lien ¡s junior to the lien in favor of GT US that secures the Priority Note.

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