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Sensata Technologies Holding N.V.'s SEC Filings

S-1/A
SENSATA TECHNOLOGIES HOLDING PLC filed this Form S-1/A on 03/09/2010
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record retention services, and

 

   

security consulting, investigative and access control services.

 

All services under the Transition Services Agreement expired and were completed as of September 30, 2008. Amounts paid under the Transition Services Agreement were based on the costs incurred by Texas Instruments to provide those services, including employee costs and out-of-pocket expenses. For fiscal years 2008 and 2007, we incurred $0.2 million and $10.5 million, respectively, of costs under this agreement. No amounts were incurred during fiscal year 2009.

 

Cross License Agreement

 

We entered into a Cross License Agreement with our former owner, Texas Instruments, pursuant to which we and Texas Instruments each granted the other party a perpetual, worldwide, nonexclusive, royalty-free license to use certain technology used in the other party’s business. The license applies to each party’s patents, know-how and trade secrets that existed on or prior to the 2006 Acquisition. Although this Cross License Agreement would enable Texas Instruments to compete with us with respect to such technology, Texas Instruments has agreed pursuant to the terms of the Asset and Stock Purchase Agreement entered into in connection with the 2006 Acquisition to a non-compete agreement for a six year period with respect to our sensor and control products.

 

Advisory Agreement

 

The issuer, the issuer’s principal shareholder, Sensata Investment Co., Sensata Technologies B.V. and the Sponsors, each of which beneficially owns more than 5% of the issuer’s voting securities, entered into an Advisory Agreement pursuant to which the Sponsors were retained to provide ongoing transaction, consulting and management advisory services. Pursuant to the Advisory Agreement, we paid an aggregate of $30.0 million to the Sponsors in connection with the 2006 Acquisition for investment banking and transaction services. We are required to pay the Sponsors an aggregate fee of $4.0 million per year for management advisory services. For fiscal years 2009, 2008 and 2007, we recorded $4.0 million, $4.0 million and $4.0 million, respectively, of expenses pursuant to this agreement.

 

In addition, if the Sponsors provide services in connection with any future acquisition, disposition or financing (whether debt or equity) involving any of Sensata Technologies B.V., the issuer, Sensata Investment Co. or any of their respective subsidiaries, we are required to pay the Sponsors an aggregate fee of 1% of the gross transaction value. The fee payable to the Sponsors with respect to this offering would be approximately $5.0 million based on an assumed initial public offering price of $19.00 per share, the midpoint of the price range set forth on the cover page of this prospectus. In connection with the First Technology Automotive and Airpax acquisitions, we paid advisory fees of approximately $0.9 million and $2.8 million, respectively, to the Sponsors. The Advisory Agreement also requires us to pay the reasonable expenses of the Sponsors in connection with, and indemnify them for liabilities arising from, the Advisory Agreement.

 

The Advisory Agreement continues until April 26, 2016 and is renewable in one-year extensions, unless terminated. Bain Capital has the right to terminate the Advisory Agreement upon a change of control or initial public offering of the issuer, including the completion of the offering described in this prospectus. Bain Capital has notified us that it intends to terminate the Advisory Agreement upon completion of this offering. We are obligated to pay the Sponsors quarterly fees, transaction fees and any expenses due with respect to periods prior to the date of termination, plus the net present value (using a discount rate equal to the then yield on U.S. Treasury Securities of like maturity) of the quarterly fees that would have been payable with respect to the period from the date of termination until April 26, 2016 or any extension period. Approximately $22.1 million of the net proceeds from this offering will be used to pay these quarterly fees and expenses, resulting in the Sponsors receiving an aggregate of $27.1 million under the Advisory Agreement in connection with this offering.

 

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