The 9% Senior Subordinated Notes Indenture limits, under certain circumstances, the
borrowers ability and the ability of its Restricted Subsidiaries to: incur additional indebtedness, create liens, pay dividends and make other distributions in respect of the capital stock of Sensata Technologies, redeem the capital stock of
Sensata Technologies, make certain investments or certain restricted payments, sell certain kinds of assets, enter into certain types of transactions with affiliates and effect mergers or consolidations. These covenants are subject to a number of
important exceptions and qualifications.
certain changes in the law of any relevant taxing jurisdiction become effective that would impose withholding taxes or other deductions on the payments on the 9% Senior Subordinated Notes or the guarantees, Sensata Technologies may redeem the notes
of that series in whole, but not in part, at any time, at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, and additional amounts, if any, to the date of redemption.
Upon a change in control, Sensata Technologies will be required
to make an offer to purchase the 9% Senior Subordinated Notes at a purchase price equal to 101% of their principal amount, plus accrued interest to the date of repurchase.
As per the terms of the 9% Senior Subordinated Notes, Restricted Subsidiaries are also subject to restrictive covenants. As of
December 31, 2009 and 2008, all of the subsidiaries of Sensata Technologies were Restricted Subsidiaries. Under certain circumstances, Sensata Technologies will be permitted to designate subsidiaries as Unrestricted
Subsidiaries. Unrestricted Subsidiaries will not be subject to the restrictive covenants of the 9% Senior Subordinated Notes Indenture. Unrestricted Subsidiaries will not guarantee any of the 9% Senior Subordinated Notes.
Additional securities may be issued under the 9% Senior
Subordinated Notes Indenture in one or more series from time to time, subject to certain limitations.
The 9% Senior Subordinated Notes are general unsecured obligations of Sensata Technologies and are subordinated in right of payment to all
existing and future senior debt of Sensata Technologies, including its obligations under the Senior Notes and the Senior Secured Credit Facility, and to all indebtedness and other liabilities (including trade payables) of Sensatas subsidiaries
that are not Guarantors.
The guarantees of each
Guarantor with respect to the 9% Senior Subordinated Notes are general unsecured obligations of such Guarantor.
11.25% Senior Subordinated Notes
The outstanding 11.25% Senior Subordinated Notes (the 11.25% Senior Subordinated Notes) were issued under an indenture dated as
of July 23, 2008 among Sensata Technologies B.V., as issuer, The Bank of New York Mellon, as trustee, The Bank of New York (Luxembourg) S.A., as Luxembourg paying agent, and the Guarantors (the 11.25% Senior Subordinated Notes
Indenture). The 11.25% Senior Subordinated Notes mature on January 15, 2014. Interest is payable semi-annually in cash to holders of 11.25% Senior Subordinated Notes of record at the close of business on January 1 or July 1
immediately preceding the interest payment date, on January 15 and July 15 of each year, commencing on January 15, 2009. Interest is paid on the basis of a 360-day year consisting of twelve 30-day months.
The 11.25% Senior Subordinated Notes were issued in an aggregate
principal amount of 141.0 million. Proceeds from the issuance of the 11.25% Senior Subordinated Notes were used to refinance amounts outstanding under an existing Senior Subordinated Term Loan, originally issued as bridge financing in
July 2007 for the acquisition of Airpax. The 11.25% Senior Subordinated Notes were issued and the Senior Subordinated Term Loan was retired in a non-cash transaction.