EXHIBIT 10.2

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, dated as of June 27,
2019 (as amended, restated, extended, supplemented or otherwise modified from
time to time, this “Security Agreement”), is made by GENTHERM INCORPORATED, a
Michigan corporation (the “Company”) and each other party identified as a
“Grantor” on the signature pages hereto and such other parties as may become
Grantors hereunder after the date hereof (each individually, a “Grantor” and
collectively, the “Grantors”), in favor of BANK OF AMERICA, N.A., as the
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated as of August 7, 2014
(as amended, restated, extended, supplemented or otherwise modified from time to
time prior to the date hereof, the “Existing Credit Agreement”), among Gentherm
Incorporated, a Michigan corporation (the “Company”), Gentherm (Texas), Inc., a
Texas corporation (“Gentherm Texas”), Gentherm Licensing, Limited Partnership, a
Michigan limited partnership (“Gentherm Licensing US”), Gentherm Medical, LLC,
an Ohio limited liability company (“Gentherm Medical”), Gentherm GmbH, a German
limited liability company (“Gentherm Germany”), Gentherm Enterprises GmbH, a
German limited liability company (“Gentherm Enterprises”), Gentherm Licensing
GmbH, a German limited liability company (“Gentherm Licensing Germany”; Gentherm
Licensing Germany, together with Gentherm Germany and Gentherm Enterprises, the
“German Borrowers”), Gentherm Global Power Technologies Inc., an Alberta
corporation (“Global”), Gentherm Canada ULC, an Alberta unlimited liability
company (“Gentherm Canada”; Gentherm Canada, together with Global, the “Canadian
Borrowers”), the Designated Borrowers from time to time party thereto (the
Designated Borrowers, together with the Company, Gentherm Texas, Gentherm
Licensing US, Gentherm Medical, the German Borrowers and the Canadian Borrowers,
the “Borrowers” and each, a “Borrower”), the lenders party thereto (the
“Existing Lenders”) and Bank of America, N.A., as the administrative agent, the
Existing Lenders required, as a condition precedent to their entering into the
Existing Credit Agreement and making extensions of credit to or for the account
of the Borrowers thereunder, the Borrowers and the guarantors party thereto to
execute that certain pledge and security agreement dated as of August 7, 2014
(as amended, restated, extended, supplemented or otherwise modified prior to the
date hereof, the “Existing Security Agreement”); and

WHEREAS, the Lenders have agreed to amend and restate the Existing Credit
Agreement pursuant to the Amended and Restated Credit Agreement dated as of the
date hereof (as amended, restated, extended, supplemented or otherwise modified
from time to time, the “Credit Agreement”) among the Borrowers, the Lenders
identified therein and the Administrative Agent; and

WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to participate in Letters of Credit under the Credit Agreement that the Grantors
agree to amend and restate the Existing Security Agreement in accordance with
the terms of this Security Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to induce the Lenders and the L/C
Issuer to make and maintain the Credit Extensions and to induce the Secured
Parties to enter into Secured Swap Agreements and Secured Treasury Management
Agreements, each Grantor agrees, for the benefit of each Secured Party, as
follows:

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ARTICLE 1.

DEFINITIONS

SECTION 1.1.    Certain Terms. The following terms (whether or not underscored)
when used in this Security Agreement, including its preamble and recitals, shall
have the following meanings (such definitions to be equally applicable to the
singular and plural forms thereof):

“Administrative Agent” is defined in the preamble.

“Collateral” is defined in Section 2.1.

“Collateral Account” is defined in clause (b) of Section 4.3.

“Company” is defined in the preamble.

“Computer Hardware and Software Collateral” means all of the Grantors’ right,
title and interest throughout the world in and to:

(a)    all computer and other electronic data processing hardware, integrated
computer systems, central processing units, memory units, display terminals,
printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer hardware,
including all operating system software, utilities and application programs in
whatsoever form;

(b)    all software programs (including source code, object code and all related
applications and data files), designed for use on the computers and electronic
data processing hardware described in clause (a) above;

(c)    all firmware associated therewith;

(d)    all documentation (including flow charts, logic diagrams, manuals,
guides, specifications, training materials, charts and pseudo codes) with
respect to such hardware, software and firmware described in the preceding
clauses (a) through (c); and

(e)    all rights with respect to all of the foregoing, including copyrights,
licenses, options, warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, improvements, error
corrections, updates, additions or model conversions of any of the foregoing.

“Control Agreement” means an authenticated record in form and substance
reasonably satisfactory to the Administrative Agent that provides for the
Administrative Agent to have “control” (as defined in the UCC) over certain
Collateral.

“Copyright Collateral” means all of the Grantors’ right, title and interest
throughout the world in and to:

(a) all copyrights, registered or unregistered and whether published or
unpublished, now or hereafter in force including copyrights registered in the
United States Copyright Office and corresponding offices in other countries of
the world, and registrations and recordings thereof and all applications for
registration thereof, whether pending or in preparation and all extensions and
renewals of the foregoing (“Copyrights”);

 

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(b)    all express or implied Copyright licenses and other agreements for the
grant by or to such Grantor of any right to use any items of the type referred
to in clause (a) above (each a “Copyright License”), to the extent permitted by
any such Copyright License;

(c)    the right to sue for past, present and future infringements of any of the
Copyrights owned by such Grantor, and for breach or enforcement of any Copyright
License; and

(d)    all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits).

“Credit Agreement” is defined in the second recital.

“Distributions” means all dividends paid on Equity Interests, liquidating
dividends paid on Equity Interests, shares (or other designations) of Equity
Interests resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Equity Interests constituting
Collateral.

“Existing Credit Agreement” is defined in the first recital.

“Existing Lenders” is defined in the first recital.

“Existing Security Agreement” is defined in the first recital.

“Foreign Equity” is defined in Section 7.14.

“Foreign Jurisdiction” is defined in Section 7.14.

“Foreign Located Assets” is defined in Section 7.14.

“Foreign Perfection” is defined in Section 7.14.

“Foreign Jurisdiction” is defined in Section 7.14.

“Filing Statements” is defined in Section 3.7(b).

“General Intangibles” means all “general intangibles” and all “payment
intangibles”, each as defined in the UCC, and shall include all interest rate or
currency protection or hedging arrangements, all tax refunds, all licenses,
permits, concessions and authorizations and all Intellectual Property Collateral
(in each case, regardless of whether characterized as general intangibles under
the UCC).

“Grantor” and “Grantors” are defined in the preamble.

“Intellectual Property” means Trademarks, Patents, Copyrights, Trade Secrets and
all other similar types of intellectual property under any Law, statutory
provision or common Law doctrine in the United States or anywhere else in the
world.

“Intellectual Property Collateral” means, collectively, the Computer Hardware
and Software Collateral, the Copyright Collateral, the Patent Collateral, the
Trademark Collateral and the Trade Secrets Collateral.

“IP Filings” is defined in Section 3.7(b)(ii).

 

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“Owned Intellectual Property Collateral” means all Intellectual Property that is
owned by and used in the business of each Grantor that is (a) not licensed to a
Grantor pursuant to a Trademark License, Patent License or Copyright License;
and (b) not in the public domain.

“Patent Collateral” means all of the Grantors’ right, title and interest
throughout the world in and to:

(a) inventions and discoveries, whether patentable or not, all letters patent
and applications for letters patent throughout the world, including all patent
applications in preparation for filing and all reissues, divisionals,
continuations, continuations-in-part, extensions, renewals and reexaminations of
any of the foregoing (“Patents”);

(b)    all Patent licenses, and other agreements for the grant by or to such
Grantor of any right to use any items of the type referred to in clause
(a) above (each a “Patent License”), to the extent permitted by any such Patent
License;

(c)    the right to sue third parties for past, present and future infringements
of any Patent or Patent application, and for breach or enforcement of any Patent
License; and

(d)    all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits).

“Permitted Liens” means all Liens permitted by Section 7.01 of the Credit
Agreement.

“Securities Act” is defined in Section 6.2(a).

“Security Agreement” is defined in the preamble.

“Security Agreement Supplement” is defined in Section 7.6.

“Termination Date” means the date on which all Obligations (other than any
contingent claims for indemnification or expense reimbursement not yet asserted)
have been indefeasibly paid in full in cash, all Letters of Credit have been
terminated or expired (other than Letters of Credit as to which other
arrangements satisfactory to the Administrative Agent and the L/C Issuer shall
have been made; provided, that, Cash Collateralization of 102% of the undrawn
amount of any Letter of Credit shall constitute a satisfactory arrangement), all
Secured Swap Agreements have been terminated or have been otherwise provided for
on terms reasonably satisfactory to the parties thereto and the Commitments
shall have been terminated.

“Trademark Collateral” means all of the Grantors’ right, title and interest
throughout the world in and to:

(a) (i) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, certification
marks, collective marks, logos and other source or business identifiers, and all
goodwill of the business associated therewith, now existing or hereafter adopted
or acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and applications in
the United States Patent and Trademark Office and corresponding offices in other
countries of the world, and all common-Law rights relating to the foregoing, and
(ii) the right to obtain all reissues, extensions or renewals of the foregoing
(collectively referred to as “Trademarks”);

 

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(b) all Trademark licenses and other agreements for the grant by or to such
Grantor of any right to use any Trademark (each a “Trademark License”), to the
extent permitted by any such Trademark License;

(c)    all of the goodwill of the business connected with the use of, and
symbolized by the Trademarks described in clause (a) and, to the extent
applicable, clause (b);

(d)    the right to sue third parties for past, present and future infringements
or dilution of the Trademarks described in clause (a) and, to the extent
applicable, clause (b) or for any injury to the goodwill associated with the use
of any such Trademark or for breach or enforcement of any Trademark License; and

(e)    all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits).

“Trade Secrets Collateral” means all of the Grantors’ right, title and interest
throughout the world in and to:

(a) all common Law and statutory trade secrets and all other confidential,
proprietary or useful information and all know-how (collectively referred to as
“Trade Secrets”) obtained by or used in or contemplated at any time for use in
the business of a Grantor, whether or not such Trade Secret has been reduced to
a writing or other tangible form, including all documents and things embodying,
incorporating or referring in any way to such Trade Secret;

(b) all Trade Secret licenses and other agreements for the grant by or to such
Grantor of any right to use any Trade Secret (each a “Trade Secret License”)
including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret License, to the extent permitted by any
such Trade Secret License; and

(c)    all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits).

“ULC” is defined in Section 7.17.

“ULC Legislation” is defined in Section 7.17.

“ULC Shares” is defined in Section 7.17.

SECTION 1.2.    Credit Agreement Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Security Agreement, including
its preamble and recitals, have the meanings provided in the Credit Agreement.

SECTION 1.3.    UCC Definitions. When used herein the terms Account,
Certificated Securities, Chattel Paper, Commercial Tort Claim, Commodity
Account, Commodity Contract, Deposit Account, Document, Electronic Chattel
Paper, Equipment, Goods, Instrument, Inventory, Investment Property,
Letter-of-Credit Rights, Payment Intangibles, Proceeds, Promissory Notes,
Securities Account, Security Entitlement, Supporting Obligations and
Uncertificated Securities have the meaning provided in Article 8 or Article 9,
as applicable, of the UCC. Letters of Credit has the meaning provided in
Section 5-102 of the UCC.

 

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ARTICLE 2.

SECURITY INTEREST

SECTION 2.1.    Grant of Security Interest. Each Grantor hereby grants to the
Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, a continuing security interest in all of such Grantor’s right,
title and interest in the following property, whether now or hereafter existing,
owned or acquired by such Grantor, and wherever located (collectively, the
“Collateral”), to secure the payment and performance of the Obligations of such
Grantor:

(a)    Accounts;

(b)    Chattel Paper;

(c)    Commercial Tort Claims listed on Item I of Schedule II (as such schedule
may be amended or supplemented from time to time);

(d)    Deposit Accounts;

(e)    Documents;

(f)    Equipment;

(g)    General Intangibles;

(h)    Goods;

(i)    Instruments;

(j)    Inventory;

(k)    Investment Property;

(l)    Intellectual Property Collateral;

(m)    Letter-of-Credit Rights and Letters of Credit;

(n)    Supporting Obligations;

(o)    all books, records, writings, databases, information and other property
relating to, used or useful in connection with, evidencing, embodying,
incorporating or referring to, any of the foregoing in this Section;

(p)    all Proceeds and products of the foregoing and, to the extent not
otherwise included, (i) all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof) and (ii) all tort claims; and

(q)    all other property and rights of every kind and description and interests
therein.

Notwithstanding the foregoing, the term “Collateral” shall not include, and the
grant of a security interest as provided hereunder shall not extend to
(i) Investment Property consisting of Equity Interests of any Subsidiary that is
a first-tier Foreign Subsidiary, any CFC Holdco or any Disregarded Entity
Borrower,

 

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in excess of 66% of the voting Equity Interests of such entity, (ii) any asset,
(x) the granting of a security interest in which would be void or illegal under
any applicable governmental Law, rule or regulation, or pursuant thereto would
result in, or permit the termination of, such asset or results in a material
adverse tax consequence for the Company and its Subsidiaries, taken as a whole,
or (y) which contains a valid and enforceable prohibition on the creation of a
security interest therein so long as such prohibition remains in effect and is
valid notwithstanding Sections 9-406 and 9-408 of the UCC, (iii) any
Intellectual Property for which a perfected Lien thereon is not effected either
by filing of a Filing Statement or by appropriate evidence of such Lien being
filed in either the United States Copyright Office or the United States Patent
and Trademark Office, (iv) any personal property (other than personal property
described in clause (iii) above) for which the attachment or perfection of a
Lien thereon is not governed by the UCC, or (v) any assets as to which the
Administrative Agent and the Company agree that the cost or other consequences
of obtaining a security interest therein or perfection thereof are excessive in
view of the benefits to be obtained by the Secured Parties therefrom.

SECTION 2.2.    Grantors Remain Liable. Anything herein to the contrary
notwithstanding:

(a)    the Grantors will remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and will perform all
of their duties and obligations under such contracts and agreements to the same
extent as if this Security Agreement had not been executed;

(b)    the exercise by the Administrative Agent of any of its rights hereunder
will not release any Grantor from any of its duties or obligations under any
such contracts or agreements included in the Collateral; and

(c)    no Secured Party will have any obligation or liability under any
contracts or agreements included in the Collateral by reason of this Security
Agreement, nor will any Secured Party be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.

SECTION 2.3.    Distributions on Pledged Equity Interests. In the event that any
Distribution with respect to any Equity Interests pledged hereunder is permitted
to be paid (in accordance with Section 7.06 of the Credit Agreement), such
Distribution or payment may be paid directly to the applicable Grantor. If any
Distribution is made in contravention of Section 7.06 of the Credit Agreement,
such Grantor shall hold the same segregated and in trust for the Administrative
Agent until paid to the Administrative Agent in accordance with Section 4.1.5.

SECTION 2.4.    Security Interest Absolute, etc. This Security Agreement shall
in all respects be a continuing, absolute, unconditional and irrevocable grant
of security interest, and shall remain in full force and effect until the
Termination Date has occurred. All rights of the Secured Parties and the
security interests granted to the Administrative Agent (for its benefit and the
ratable benefit of each other Secured Party) hereunder, and all obligations of
the Grantors hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of:

(a)    any lack of validity, legality or enforceability of any Loan Document;

(b)    the failure of any Secured Party (i) to assert any claim or demand or to
enforce any right or remedy against any Loan Party or any other Person
(including any other Grantor) under the provisions of any Loan Document or
otherwise, or (ii) to exercise any right or remedy against any other guarantor
(including any other Grantor) of, or collateral securing, any Obligations;

 

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(c)    any change in the time, manner or place of payment of, or in any other
term of, all or any part of the Obligations, or any other extension, compromise
or renewal of any Obligations, by operation of law or otherwise; and to the
fullest extent permitted by applicable Law, each Grantor waives any defense
arising out of any such extension, compromise or renewal even though such
extension, compromise or renewal may operate, pursuant to applicable Law, to
impair or extinguish any right or remedy of any Grantor against any Collateral;

(d)    any reduction, limitation, impairment or termination of any Obligations
for any reason, including any claim of waiver, release, surrender, alteration or
compromise or any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations or otherwise and shall not be subject to (and each
Grantor hereby waives any right to or claim of) any of the foregoing;

(e)    any amendment to, rescission, waiver, or other modification of, or any
consent to or departure from, any of the terms of any Loan Document;

(f)    any addition, exchange or release of any collateral or of any Person that
is (or will become) a grantor (including the Grantors hereunder) of the
Obligations, or any surrender, release, invalidity, impairment or non-perfection
of any collateral (or any security interest therein), or any amendment to or
waiver or release of or addition to, or consent to or departure from, any other
collateral held by any Secured Party securing any of the Obligations;

(g)    any change in the corporate existence, structure or ownership of the
Grantors or any other Grantor of or other Person liable for any of the
Obligations;

(h)    any insolvency, bankruptcy, reorganization or other similar proceeding
under any Debtor Relief Law affecting any Loan Party or its assets or any
resulting release or discharge of any obligation of any Loan Party; or

(i)    any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Loan Party, any surety
or any guarantor.

SECTION 2.5.    Postponement of Subrogation. Each Grantor agrees that it will
not exercise any rights against another Grantor which it may acquire by way of
rights of subrogation under any Loan Document to which it is a party nor shall
any Grantor seek or be entitled to seek any contribution or reimbursement from
any Loan Party, in respect of any payment made under any Loan Document, in
connection with any Collateral or otherwise, until following the Termination
Date. Any amount paid to such Grantor on account of any such subrogation rights
prior to the Termination Date shall be held in trust for the benefit of the
Secured Parties and shall immediately be paid and turned over to the
Administrative Agent for the benefit of the Secured Parties in the exact form
received by such Grantor (duly endorsed in favor of the Administrative Agent, if
required), to be credited and applied against the Obligations, whether matured
or unmatured, in accordance with Section 6.1; provided, that, if such Grantor
has made payment to the Secured Parties of all or any part of the Obligations
and the Termination Date has occurred, then at such Grantor’s request, the
Administrative Agent (on behalf of the Secured Parties) will, at the expense of
such Grantor, execute and deliver to such Grantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to such Grantor of an interest in the Obligations
resulting from such payment. In furtherance of the foregoing, at all times prior
to the Termination Date, such Grantor shall refrain from taking any action or
commencing any proceeding against any Loan Party (or its successors or assigns,
whether in connection with any proceeding under any Debtor Relief Law or
otherwise) to recover any amounts in respect of payments made under this
Security Agreement to any Secured Party.

 

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ARTICLE 3.

REPRESENTATIONS AND WARRANTIES

In order to induce the Secured Parties to enter into the Credit Agreement and
make and maintain Credit Extensions thereunder and enter into Secured Treasury
Management Agreements and Secured Swap Agreements, the Grantors represent and
warrant to each Secured Party as set forth below.

SECTION 3.1.    As to Equity Interests of the Grantors’ Subsidiaries, Investment
Property.

(a)    With respect to any Material Subsidiary of any Grantor that is:

(i)    a corporation, business trust, joint stock company or similar Person, all
Equity Interests issued by such Subsidiary are duly authorized and validly
issued, fully paid and non-assessable (or equivalent thereof to the extent
applicable in the jurisdiction in which Equity Interests are issued), and
represented by a certificate;

(ii)    a limited liability company organized under the laws of any State of the
United States, no Equity Interest issued by such Subsidiary expressly provides
that such Equity Interest is a security governed by Article 8 of the UCC; and

(iii)    a partnership or limited liability company, no Equity Interest issued
by such Subsidiary (A) is dealt in or traded on securities exchanges or in
securities markets, or (B) is held in a Securities Account, except, with respect
to this clause (a)(iii), Equity Interests (1) for which the Administrative Agent
is the registered owner or (2) that are subject to a Control Agreement entered
into by such Grantor, the Administrative Agent and the issuer of such Equity
Interest.

(b)    Each Grantor has delivered all Certificated Securities constituting
Collateral held by such Grantor on the Closing Date to the Administrative Agent,
together with duly executed undated blank stock powers, or other equivalent
instruments of transfer reasonably acceptable to the Administrative Agent.

(c)    With respect to Uncertificated Securities constituting Collateral (other
than Uncertificated Securities credited to a Securities Account) owned by any
Grantor, such Grantor has caused the issuer thereof either to (i) register the
Administrative Agent as the registered owner of such security or (ii) agree in
an authenticated record with such Grantor and the Administrative Agent that such
issuer will comply with instructions with respect to such security originated by
the Administrative Agent without further consent of such Grantor; provided,
that, this clause (c) shall only apply to the Equity Interests of Gentherm
International GmbH being pledged hereunder by Gentherm Medical, LLC, as of the
date that is sixty (60) days after the date hereof (or such later date as the
Administrative Agent may agree in its sole discretion).

(d)    The percentage of the issued and outstanding Equity Interests of each
Subsidiary pledged by each Grantor hereunder is as set forth on Schedule I
hereto.

 

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SECTION 3.2.    Grantor Name, Location, etc.

(a)    The jurisdiction in which each Grantor is located for purposes of
Sections 9-301 and 9-307 of the UCC is set forth in Item A of Schedule II
hereto.

(b)    Each location as to which a secured party would have filed a UCC
financing statement in the five years prior to the date hereof to perfect a
security interest in Equipment, Inventory and General Intangibles owned by such
Grantor is set forth in Item B of Schedule II hereto.

(c)    The Grantors do not have any trade names other than those set forth in
Item C of Schedule II hereto.

(d)    During the twelve months preceding the date hereof, no Grantor has been
known by any legal name different from the one set forth on the signature page
hereto, nor has such Grantor been the subject of any merger or other corporate
reorganization or otherwise acquired assets outside of the ordinary course of
business, except as set forth in Item D of Schedule II hereto.

(e) Each Grantor’s state issued organizational identification number and federal
taxpayer identification number is (and, during the four months preceding the
date hereof, such Grantor has not had a federal taxpayer identification number
different from that) set forth in Item E of Schedule II hereto.

(f)    No Grantor is a party to any federal, state or local government contract
that is material to its business except as set forth in Item F of Schedule II
hereto.

(g)    No Grantor maintains any Deposit Accounts, Securities Accounts or
Commodity Accounts with any Person, in each case, except as set forth on Item G
of Schedule II hereto.

(h)    No Grantor is the beneficiary of any Letters of Credit, except as set
forth on Item H of Schedule II hereto.

(i)    No Grantor has any Commercial Tort Claims in which a suit has been filed
by such Grantor in excess of $500,000, except as set forth on Item I of Schedule
II hereto.

(j)    The name set forth on the signature page attached hereto is the true and
correct legal name (as defined in the UCC) of each Grantor.

(k) Each Grantor has used its commercially reasonable efforts to obtain a legal,
valid and enforceable consent of each issuer of any Letter of Credit to the
assignment of the Proceeds of such Letter of Credit to the Administrative Agent
and no Grantor has consented to, and is otherwise aware of, any Person (other
than the Administrative Agent pursuant hereto) having control (within the
meaning of Section 9-107 of the UCC) over, or any other interest in any of such
Grantor’s rights in respect thereof.

SECTION 3.3.    Ownership, No Liens, etc. Each Grantor has rights in or the
power to transfer the Collateral, and each Grantor owns its Collateral free and
clear of any Lien, except for any security interest (a) in the case of the
Equity Interests of each Subsidiary pledged hereunder, created by this Security
Agreement and (b) in all other Collateral (other than the Equity Interests of
each Subsidiary pledged hereunder) that is a Permitted Lien. No effective
financing statement or other filing similar in effect covering all or any part
of the Collateral is on file in any recording office, except those filed in
favor of the Administrative Agent relating to this Security Agreement, Permitted
Liens (but only in the case of Collateral other than the Equity Interests of
each Subsidiary pledged hereunder) or as to which a duly authorized termination
statement relating to such financing statement or other instrument has been
delivered to the Administrative Agent on or prior to the Closing Date.

 

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SECTION 3.4.    Possession of Inventory, Control; etc.

(a) Each Grantor has, and agrees that it will maintain, exclusive possession of
its Documents, Instruments, Promissory Notes, Goods, Equipment and Inventory,
other than (i) Equipment and Inventory in transit in the ordinary course of
business, (ii) Equipment and Inventory that is in the possession or control of a
warehouseman, bailee agent or other Person (other than a Person controlled by or
under common control with the applicable Grantor) that has been notified of the
security interest created in favor of the Secured Parties pursuant to this
Security Agreement, and on or prior to the Closing Date, or such later date as
the Administrative Agent shall agree, has authenticated a record acknowledging
that it holds possession of such Collateral for the Secured Parties’ benefit and
waives any Lien held by it against such Collateral, and (iii) Instruments or
Promissory Notes that have been delivered to the Administrative Agent pursuant
to Section 3.5. In the case of Equipment or Inventory described in clause
(ii) above, no lessor or warehouseman of any premises or warehouse upon or in
which such Equipment or Inventory is located has (A) issued any warehouse
receipt or other receipt in the nature of a warehouse receipt in respect of any
such Equipment or Inventory, (B) issued any Document for any such Equipment or
Inventory, (C) received notification of any Secured Party’s interest (other than
the security interest granted hereunder) in any such Equipment or Inventory or
(D) any Lien on any such Equipment or Inventory.

(b)    Each Grantor is the sole entitlement holder of its Securities Accounts
and Commodity Accounts and no other Person (other than the Administrative Agent
pursuant to this Security Agreement or any other Person with respect to
Permitted Liens) has control or possession of, or any other interest in, any of
such accounts or any other securities or property credited thereto.

SECTION 3.5.    Negotiable Documents, Instruments and Chattel Paper. Each
Grantor has delivered to the Administrative Agent possession of all originals of
all Documents, Instruments, Promissory Notes, and tangible Chattel Paper
constituting Collateral and owned or held by such Grantor on the Closing Date
duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to the
Administrative Agent.

SECTION 3.6.    Intellectual Property Collateral. Except as disclosed to the
Administrative Agent, in respect of each Grantor:

(a) to the best of such Grantor’s knowledge after due and diligent investigation
and inquiry, the Owned Intellectual Property Collateral is valid, subsisting,
unexpired and enforceable and has not been abandoned or adjudged invalid or
unenforceable, in whole or in part;

(b) such Grantor is the sole and exclusive owner of the entire right, title and
interest in and to the Owned Intellectual Property Collateral (subject to
Permitted Liens), and, to such Grantor’s knowledge, (i) with respect to any
Owned Intellectual Property Collateral that is material to the business of such
Grantor, no claim has been made that such Grantor is or may be, in conflict
with, infringing, misappropriating, diluting, misusing or otherwise violating
any of the rights of any third party or that challenges the ownership, use,
protectability, registerability, validity or enforceability of such Owned
Intellectual Property Collateral or any other Intellectual Property Collateral
that is material to the business of such Grantor and (ii) there is no valid
basis for any such claims;

 

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(c)    such Grantor has made all filings and recordations that it has reasonably
deemed appropriate to protect its interest in any Owned Intellectual Property
Collateral that is material to the business of such Grantor, including
recordations of all of its interests in the Patent Collateral, the Trademark
Collateral and the Copyright Collateral in the United States Patent and
Trademark Office, the United States Copyright Office and corresponding offices
in other countries of the world, as appropriate;

(d) such Grantor has taken all reasonable steps to safeguard its Trade Secrets
and to its knowledge (i) none of the Trade Secrets of such Grantor has been
used, divulged, disclosed or appropriated for the benefit of any other Person
other than such Grantor; (ii) no employee, independent contractor or agent of
such Grantor has misappropriated any Trade Secrets of any other Person in the
course of the performance of his or her duties as an employee, independent
contractor or agent of such Grantor; and (iii) no employee, independent
contractor or agent of such Grantor is in default or breach of any term of any
employment agreement, non-disclosure agreement, assignment of inventions
agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Grantor’s
Intellectual Property Collateral;

(e) no action by such Grantor is currently pending which asserts that any third
party is infringing, misappropriating, diluting, misusing or voiding any Owned
Intellectual Property Collateral that is material to the business of such
Grantor and, to such Grantor’s knowledge, no third party is infringing upon,
misappropriating, diluting, misusing or voiding any Intellectual Property owned
or used by such Grantor in any material respect, or any of its respective
licensees;

(f)    no settlement or consents, covenants not to sue, nonassertion assurances,
or releases have been entered into by such Grantor or to which such Grantor is
bound that adversely affects its rights to own or use any Intellectual Property
Collateral that is material to the business of such Grantor;

(g)    except for the Permitted Liens, such Grantor has not made a previous
assignment, sale, transfer or agreement constituting a present or future
assignment, sale or transfer of any Intellectual Property Collateral for
purposes of granting a security interest or as collateral that has not been
terminated or released;

(h)    such Grantor uses adequate standards of quality in the manufacture,
distribution, and sale of all products sold by it and in the provision of all
services rendered by it under or in connection with any Trademarks and has taken
all commercially reasonable action necessary to ensure that all licensees of any
Trademarks owned by such Grantor use such adequate standards of quality;

(i)    the consummation of the transactions contemplated by the Loan Documents
will not result in the termination or material impairment of any of the
Intellectual Property Collateral;

(j) all employees, independent contractors and agents who have contributed to
the creation or development of any Owned Intellectual Property Collateral have
been a party to an enforceable “work for hire” and assignment agreement with
such Grantor in accordance with applicable Laws, according and granting
exclusive ownership of such Owned Intellectual Property Collateral to such
Grantor;

 

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(k) such Grantor owns directly or is entitled to use by license or otherwise,
all Intellectual Property used in, reasonably necessary for or material to the
conduct of such Grantor’s business; and

(l)    as of the Closing Date, set forth on Schedule III hereto is a complete
and accurate list of (i) (A) all issued and applied-for Patents owned by each
Grantor, including those that have been issued by or are on file with the United
States Patent and Trademark Office or corresponding offices in other countries
of the world and (B) all Patent Licenses, (ii) (A) all registered and
applied-for Trademarks owned by each Grantor, including those that are
registered, or for which an application for registration has been made, with the
United States Patent and Trademark Office or corresponding offices in other
countries of the world and (B) all Trademark Licenses, and (iii) (A) all
registered and applied-for Copyrights owned by each Grantor, including those
that are registered, or for which an application for registration has been made,
with the United States Copyright Office or corresponding offices in other
countries of the world and (B) all Copyright Licenses, including an indication
of which of those Copyright Licenses are exclusive licenses granted to such
Grantor in respect of any Copyright that is registered with the United States
Copyright Office.

SECTION 3.7.    Validity, etc.

(a)    This Security Agreement creates a valid security interest in the
Collateral securing the payment of the Obligations.

(b) Each Grantor has filed or caused to be filed all UCC-1 financing statements
in the filing office for each Grantor’s jurisdiction of organization listed in
Item A of Schedule II hereto (collectively, the “Filing Statements”) (or has
authenticated and delivered to the Administrative Agent the Filing Statements
suitable for filing in such offices) and has taken all other:

(i)    actions necessary to obtain control of the Collateral as provided in
Sections 9-104, 9-105, 9-106 and 9-107 of the UCC, provided, that, entering into
and delivering any Control Agreement shall be deemed necessary to the extent
required by Section 4.1.3;

(ii) actions requested by the Administrative Agent reasonably necessary to
perfect the Administrative Agent’s security interest with respect to any
Intellectual Property Collateral (including any notice filings with respect to
such security interest with the United States Patent and Trademark Office and/or
the United States Copyright Office, as applicable, in form and substance
reasonably satisfactory to the Administrative Agent) (collectively, the “IP
Filings”); and

(iii) actions requested by the Administrative Agent reasonably necessary to
perfect the Administrative Agent’s security interest with respect to any
Collateral evidenced by a certificate of ownership.

(c)    Upon the filing of the Filing Statements and the IP Filings with the
appropriate agencies therefor the security interests created under this Security
Agreement shall constitute a perfected security interest in the Collateral
described on such Filing Statements or IP Filings, as applicable, in favor of
the Administrative Agent on behalf of the Secured Parties to the extent that a
security interest therein may be perfected (i) by filing pursuant to the
relevant UCC and/or (ii) by filing with the United States Patent and Trademark
Office or the United States Copyright Office, in each case, prior to all other
Liens, except for Permitted Liens that are senior by operation of Law (in which
case such security interest shall be second in priority of right only to the
Permitted Liens until the obligations secured by such Permitted Liens have been
satisfied).

 

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SECTION 3.8.    Authorization, Approval, etc. Except as have been obtained or
made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or any
other third party is required either:

(a)    for the grant by the Grantors of the security interest granted hereby or
for the execution, delivery and performance of this Security Agreement by the
Grantors;

(b)    for the perfection or maintenance of the security interests hereunder
including the first priority (subject to Permitted Liens that are senior by
operation of Law (in which case such security interest shall be second in
priority of right only to the Permitted Liens until the obligations secured by
such Permitted Liens have been satisfied)) nature of such security interest
(except with respect to the Filing Statements, the IP Filings or, with respect
to motor vehicles, the notation or registration of liens on the related
certificates of title) or the exercise by the Administrative Agent of its rights
and remedies hereunder; or

(c) for the exercise by the Administrative Agent of the voting or other rights
provided for in this Security Agreement, or, except (i) with respect to any
securities issued by a Subsidiary of the Grantors, as may be required in
connection with a disposition of such securities by Laws affecting the offering
and sale of securities generally, the remedies in respect of the Collateral
pursuant to this Security Agreement and (ii) any “change of control” or similar
filings required by state licensing agencies.

SECTION 3.9.    Best Interests. It is in the best interests of each Grantor
(other than the Company) to execute this Security Agreement inasmuch as such
Grantor will, as a result of being a Subsidiary of the Company, derive
substantial direct and indirect benefits from the Credit Extensions made from
time to time to the Borrowers by the Lenders pursuant to the Credit Agreement
and the execution and delivery of the Secured Treasury Management Agreements and
Secured Swap Agreements among the Loan Parties and certain Secured Parties, and
each Grantor agrees that the Secured Parties are relying on this representation
in agreeing to make such Credit Extensions pursuant to the Credit Agreement to
the Borrowers.

ARTICLE 4.

COVENANTS

Each Grantor covenants and agrees that, until the Termination Date, such Grantor
will perform, comply with and be bound by the obligations set forth below.

SECTION 4.1.    As to Investment Property; Deposit Accounts, etc.

SECTION 4.1.1.    Equity Interests of the Grantors’ Subsidiaries. No Grantor
will allow any of its Subsidiaries:

(a)    that is a corporation, business trust, joint stock company or similar
Person, to issue Uncertificated Securities;

(b)    that is a partnership or limited liability company, to (i) issue Equity
Interests that are to be dealt in or traded on securities exchanges or in
securities markets,

 

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(ii) expressly provide in its Organization Documents that its Equity Interests
are securities governed by Article 8 of the UCC, or (iii) place such
Subsidiary’s Equity Interests in a Securities Account, except, with respect to
this clause (b), Equity Interests (1) for which the Administrative Agent is the
registered owner or (2) that are subject to a Control Agreement entered into by
such Grantor, the Administrative Agent and the issuer of such Equity Interests;
and

(c)    to issue Equity Interests in addition to or in substitution for the
Equity Interests pledged hereunder, except to such Grantor (and such Equity
Interests are promptly pledged and delivered to the Administrative Agent
pursuant to the terms of this Security Agreement).

SECTION 4.1.2.    Certificated and Uncertificated Securities.

(a)    Such Grantor will deliver all Certificated Securities that constitute
Collateral owned or held by such Grantor to the Administrative Agent, together
with duly executed undated blank stock powers, or other equivalent instruments
of transfer reasonably acceptable to the Administrative Agent.

(b) Such Grantor will cause the issuer of any and all Uncertificated Securities
(other than Uncertificated Securities credited to a Securities Account)
constituting Investment Property and Collateral owned or held by such Grantor,
to either (i) register the Administrative Agent as the registered owner thereof
on the books and records of the issuer or (ii) execute a Control Agreement
relating to such Investment Property pursuant to which the issuer agrees to
comply with the Administrative Agent’s instructions with respect to such
Uncertificated Securities without further consent by such Grantor provided,
that, this clause (b) shall only apply to the Equity Interests of Gentherm
International GmbH being pledged hereunder by Gentherm Medical, LLC, as of the
date that is sixty (60) days after the date hereof (or such later date as the
Administrative Agent may agree in its sole discretion).

SECTION 4.1.3.    Deposit Accounts, Securities Accounts and Commodity Accounts.
Such Grantor will, upon the request of the Administrative Agent, enter into and
deliver Control Agreements with respect to (a) any Deposit Accounts maintained
with any depositary institution other than the depositary institution acting as
Administrative Agent and (b) any Securities Accounts, Commodity Accounts,
Commodity Contracts or Securities Entitlements constituting Investment Property
owned or held by any Grantor; provided, that, such Grantor shall not be required
to enter into and deliver Control Agreements for any Deposit Account maintained
exclusively for the purpose of payroll, 401(k) and other retirement plans and
employee benefits and healthcare benefits.

SECTION 4.1.4.    Negotiable Documents, Instruments and Chattel Paper. Each
Grantor agrees that it will, promptly following receipt thereof, deliver to the
Administrative Agent possession of all originals of negotiable Documents,
Instruments, Promissory Notes and Chattel Paper that it acquires following the
Closing Date duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance reasonably satisfactory to the
Administrative Agent. No Grantor shall create any tangible Chattel Paper without
placing a legend on such tangible Chattel Paper reasonably acceptable to the
Administrative Agent indicating that the Administrative Agent has a security
interest in such Chattel Paper.

 

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SECTION 4.1.5.    Distributions; Voting Rights; etc. Each Grantor agrees
promptly upon receipt of notice of the occurrence of an Event of Default from
the Administrative Agent and without any request therefor by the Administrative
Agent, so long as such Event of Default shall continue:

(a)    to deliver (properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Distributions with respect
to Investment Property that is Collateral, all interest, principal, other cash
payments on Payment Intangibles, and all Proceeds of the Collateral, in each
case thereafter received by such Grantor, all of which shall be held by the
Administrative Agent as additional Collateral; and

(b)    with respect to Collateral consisting of general partner interests or
limited liability company interests:

(i)    to promptly modify its Organization Documents to admit the Administrative
Agent as a general partner or member, as applicable;

(ii) so long as the Administrative Agent has notified such Grantor of the
Administrative Agent’s intention to exercise its voting power under this clause,
that the Administrative Agent may exercise (to the exclusion of such Grantor)
the voting power and all other incidental rights of ownership with respect to
such Investment Property and such Grantor hereby grants the Administrative Agent
an irrevocable proxy, exercisable under such circumstances, to vote such
Investment Property; and

(iii)    to promptly deliver to the Administrative Agent such additional proxies
and other documents as may be reasonably necessary to allow the Administrative
Agent to exercise such voting power.

All dividends, Distributions, interest, principal, cash payments, Payment
Intangibles and Proceeds that may at any time and from time to time be held by
such Grantor, but which such Grantor is then obligated to deliver to the
Administrative Agent, shall, until delivery to the Administrative Agent, be held
by such Grantor separate and apart from its other property in trust for the
Administrative Agent. The Administrative Agent agrees that unless an Event of
Default shall have occurred and be continuing and the Administrative Agent shall
have given the notice referred to in this Section 4.1.5, such Grantor will have
the exclusive voting power with respect to any Investment Property constituting
Collateral and the Administrative Agent will, upon the written request of such
Grantor, promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by such Grantor which are necessary to allow such Grantor
to exercise that voting power; provided, that, no vote shall be cast, or
consent, waiver, or ratification given, or action taken by such Grantor that
would impair the value of any such Collateral or be inconsistent with or violate
any provision of any Loan Document.

SECTION 4.1.6.    Continuous Pledge. Each Grantor will at all times keep pledged
to the Administrative Agent pursuant hereto, on a first-priority, perfected
basis all Investment Property, all Distributions with respect thereto, all
Payment Intangibles to the extent they are evidenced by a Document, Instrument,
Promissory Note or Chattel Paper, and all interest and principal with respect to
such Payment Intangibles, and all Proceeds and rights from time to time received
by or distributable to such Grantor in respect of any of the foregoing
Collateral.

 

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SECTION 4.2.    Change of Name, etc. No Grantor will change its name or place of
incorporation or organization or federal taxpayer identification number except
upon 30 days’ prior written notice to the Administrative Agent.

SECTION 4.3.    As to Accounts.

(a)    Each Grantor shall have the right to collect all Accounts so long as no
Event of Default shall have occurred and be continuing.

(b)    Upon (i) the occurrence and during the continuance of an Event of Default
and (ii) the delivery of written notice (unless an Event of Default pursuant to
Section 8.01(f) of the Credit Agreement shall have occurred, in which case, no
such notice shall be required) by the Administrative Agent to each Grantor, all
Proceeds of Collateral received by such Grantor shall be delivered in kind to
the Administrative Agent for deposit in a Deposit Account of such Grantor
maintained with the depositary institution acting as Administrative Agent
(together with any other Accounts pursuant to which any portion of the
Collateral is deposited with the depositary institution acting as Administrative
Agent, the “Collateral Accounts”), and such Grantor shall not commingle any of
such Proceeds, and shall hold separate and apart from all other property, all
such Proceeds in express trust for the benefit of the Administrative Agent until
delivery thereof is made to the Administrative Agent.

(c)    Following the delivery of notice pursuant to clause (b)(ii) (to the
extent required thereby), the Administrative Agent shall have the right to apply
any amount in the Collateral Account to the payment of any Obligations which are
due and payable.

(d)    With respect to each Collateral Account, it is hereby confirmed and
agreed that (i) deposits in such Collateral Account are subject to a security
interest as contemplated hereby, (ii) such Collateral Account shall be under the
control of the Administrative Agent and (iii) the Administrative Agent shall
have the sole right of withdrawal over such Collateral Account.

(e)    The Administrative Agent will make available to the applicable Grantor
all amounts in any Collateral Account upon the request of such Grantor, so long
as no Event of Default has occurred and is then continuing (as certified by the
Company to the Administrative Agent).

SECTION 4.4.    As to Grantors’ Use of Collateral.

(a)    Subject to clause (b), each Grantor (i) may in the ordinary course of its
business, at its own expense, sell, lease or furnish under contracts of service
any of the Inventory normally held by such Grantor for such purpose, and use and
consume, in the ordinary course of its business, any raw materials, work in
process or materials normally held by such Grantor for such purpose, (ii) will,
at its own expense, endeavor to collect, as and when due, all amounts due with
respect to any of the Collateral, including the taking of such action with
respect to such collection as the Administrative Agent may request following the
occurrence and during the continuance of an Event of Default or, in the absence
of such request, as such Grantor may deem advisable, and (iii) may grant, in the
ordinary course of business, to any party obligated on any of the Collateral,
any rebate, refund or allowance to which such party may be lawfully entitled,
and may accept, in connection therewith, the return of Goods, the sale or lease
of which shall have given rise to such Collateral.

(b)    At any time following the occurrence and during the continuance of an
Event of Default, whether before or after the maturity of any of the
Obligations, the Administrative Agent may (i) revoke any or all of the rights of
each Grantor set forth in clause (a), (ii) notify any parties

 

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obligated on any of the Collateral to make payment to the Administrative Agent
of any amounts due or to become due thereunder and (iii) enforce collection of
any of the Collateral by suit or otherwise and surrender, release, or exchange
all or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness thereunder or
evidenced thereby.

(c)    Upon the request of the Administrative Agent following the occurrence and
during the continuance of an Event of Default, each Grantor will, at its own
expense, notify any parties obligated on any of the Collateral to make payment
to the Administrative Agent of any amounts due or to become due thereunder.

(d)    At any time following the occurrence and during the continuation of an
Event of Default, the Administrative Agent may endorse, in the name of such
Grantor, any item, howsoever received by the Administrative Agent, representing
any payment on or other Proceeds of any of the Collateral.

(e)    No Grantor shall take or omit to take any action the taking or the
omission of which would result in any impairment in the collectability of, or
any other material impairment or alteration of, any obligation of the maker of
any Payment Intangible or other Instrument constituting Collateral, except as
otherwise provided in this Section 4.4.

SECTION 4.5.    As to Intellectual Property Collateral.

(a)    Each Grantor covenants and agrees to comply with the following provisions
as such provisions relate to any Intellectual Property Collateral material to
the business of such Grantor:

(i)    such Grantor shall not (A) do or fail to perform any act whereby any of
the Patent Collateral may lapse or become abandoned or dedicated to the public
or unenforceable, (B) itself or permit any of its licensees to (I) fail to
continue to use any of the Trademark Collateral in order to maintain the
Trademark Collateral in full force free from any claim of abandonment for
non-use, (II) fail to maintain as in the past the quality of products and
services offered under the Trademark Collateral, (III) fail to employ the
Trademark Collateral registered with any federal or state or foreign authority
with an appropriate notice of such registration, (IV) adopt or use any other
Trademark which is confusingly similar or a colorable imitation of any of the
Trademark Collateral, unless rights in such Trademark Collateral inure solely to
Grantor and do not infringe or weaken the validity or enforceability of any of
the Intellectual Property Collateral, (C) do or permit any act or knowingly omit
to do any act whereby any of the Trademark Collateral may lapse or become
invalid or unenforceable, or (D) do or permit any act or knowingly omit to do
any act whereby any of the Copyright Collateral or any of the Trade Secrets
Collateral may lapse or become invalid or unenforceable or placed in the public
domain except upon expiration of the end of an unrenewable term of a
registration thereof, unless, in the case of any of the foregoing requirements
in clauses (A), (B), (C) and (D), such Grantor shall reasonably and in good
faith determine that any of such Intellectual Property Collateral is of
negligible economic value to such Grantor, and the loss of such Intellectual
Property Collateral would not have a Material Adverse Effect on its business;

(ii)    such Grantor shall promptly notify the Administrative Agent if it knows,
or reasonably suspects, that any application or registration relating to any
material item of the Intellectual Property Collateral may become abandoned or
dedicated to the public or

 

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placed in the public domain or become invalid or unenforceable, or of any
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any foreign counterpart
thereof or any court) regarding such Grantor’s ownership of any such
Intellectual Property Collateral, its right to register the same or to keep and
maintain and enforce the same; and

(iii)    such Grantor shall take all reasonably necessary steps, including in
any proceeding before the United States Patent and Trademark Office, the United
States Copyright Office and corresponding offices in other countries of the
world, to maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and taxes
(except to the extent that dedication, abandonment or invalidation is permitted
under the foregoing clause (a) or (b)).

(b)    Upon the request of the Administrative Agent, each Grantor covenants and
agrees to provide a complete and accurate list of (i) (A) all issued and
applied-for Patents owned by each Grantor, including those that have been issued
by or are on file with the United States Patent and Trademark Office or
corresponding offices in other countries of the world and (B) all Patent
Licenses, (ii) (A) all registered and applied-for Trademarks owned by each
Grantor, including those that are registered, or for which an application for
registration has been made, with the United States Patent and Trademark Office
or corresponding offices in other countries of the world and (B) all Trademark
Licenses, and (iii) (A) all registered and applied-for Copyrights owned by each
Grantor, including those that are registered, or for which an application for
registration has been made, with the United States Copyright Office or
corresponding offices in other countries of the world and (B) all Copyright
Licenses, including an indication of which of those Copyright Licenses are
exclusive licenses granted to such Grantor in respect of any Copyright that is
registered with the United States Copyright Office.

(c)    Each Grantor covenants and agrees from time to time to execute and
deliver to the Administrative Agent such IP Filings as are reasonably necessary
to assure the Administrative Agent of its security interests granted hereunder.

SECTION 4.6.    As to Letter-of-Credit Rights.

(a)    Each Grantor, by granting a security interest in its Letter-of-Credit
Rights to the Administrative Agent, intends to (and hereby does) collaterally
assign to the Administrative Agent its rights (including its contingent rights)
to the Proceeds of all Letter-of-Credit Rights of which it is or hereafter
becomes a beneficiary or assignee. Such Grantor will promptly use its
commercially reasonable efforts to cause the issuer of each letter of credit and
each nominated person (if any) with respect thereto to consent to such
assignment of the Proceeds thereof in a consent agreement in form and substance
satisfactory to the Administrative Agent and deliver written evidence of such
consent to the Administrative Agent.

(b)    Upon the occurrence and during the continuance of an Event of Default,
such Grantor will, promptly upon request by the Administrative Agent, (i) notify
(and such Grantor hereby authorizes the Administrative Agent to notify) the
issuer and each nominated person with respect to each of the letters of credit
issued in favor of such Grantor that the Proceeds thereof have been assigned to
the Administrative Agent hereunder and any payments due or to become due in
respect thereof are to be made directly to the Administrative Agent and
(ii) arrange for the Administrative Agent to become the transferee beneficiary
of such letter of credit.

 

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SECTION 4.7.    As to Commercial Tort Claims. Each Grantor covenants and agrees
that, until the Termination Date, with respect to any Commercial Tort Claim in
excess of $500,000 hereafter arising, it shall deliver to the Administrative
Agent a supplement in form and substance reasonably satisfactory to the
Administrative Agent, together with all supplements to schedules thereto
identifying such new Commercial Tort Claims and take all such action reasonably
requested by the Administrative Agent to grant to the Administrative Agent and
perfect a security interest in such Commercial Tort Claim.

SECTION 4.8.    Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic chattel
paper or any “transferable record,” as that term is defined in Section 201 of
the U.S. Federal Electronic Signatures in Global and National Commerce Act, or
in Section 16 of the U.S. Uniform Electronic Transactions Act as in effect in
any relevant jurisdiction, such Grantor shall promptly notify the Administrative
Agent thereof and, at the request of the Administrative Agent, shall take such
action as the Administrative Agent may reasonably request to vest in the
Administrative Agent control under Section 9-105 of the UCC of such electronic
chattel paper or control under Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Administrative Agent agrees with such Grantor that
the Administrative Agent will arrange, pursuant to procedures reasonably
satisfactory to the Administrative Agent and so long as such procedures will not
result in the Administrative Agent’s loss of control, for the Grantor to make
alterations to the electronic chattel paper or transferable record permitted
under Section 9-105 of the UCC or, as the case may be, Section 201 of the U.S.
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the U.S. Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Grantor
with respect to such electronic chattel paper or transferable record.

SECTION 4.9.    Further Assurances, etc. Each Grantor agrees that, from time to
time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary or that the Administrative Agent may reasonably request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, such Grantor will:

(a)    from time to time upon the request of the Administrative Agent, promptly
deliver to the Administrative Agent such stock powers, instruments and similar
documents, reasonably satisfactory in form and substance to the Administrative
Agent, with respect to such Collateral as the Administrative Agent may
reasonably request and will, from time to time upon the request of the
Administrative Agent, after the occurrence and during the continuance of any
Event of Default, promptly transfer any securities constituting Collateral into
the name of any nominee designated by the Administrative Agent;

(b)    file (and hereby authorize the Administrative Agent to file) such Filing
Statements or continuation statements, or amendments thereto, IP Filings, and
such other instruments or notices (including any assignment of claim form under
or pursuant to the federal assignment of claims statute, 31 U.S.C. § 3726, any
successor or amended version thereof or any regulation promulgated under or
pursuant to any version thereof), as may be reasonably necessary or that the
Administrative Agent may reasonably request in order to perfect and preserve the
security interests and other rights granted or purported to be granted to the
Administrative Agent hereby; and

 

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(c) furnish to the Administrative Agent, from time to time at the Administrative
Agent’s request, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.

With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. Each Grantor agrees that a carbon, photographic or
other reproduction of this Security Agreement or any UCC financing statement
covering the Collateral or any part thereof shall be sufficient as a UCC
financing statement where permitted by Law. Each Grantor hereby authorizes the
Administrative Agent to file financing statements describing as the collateral
covered thereby “all of the debtor’s personal property or assets” or words to
that effect, notwithstanding that such wording may be broader in scope than the
Collateral described in this Security Agreement.

ARTICLE 5.

THE ADMINISTRATIVE AGENT

SECTION 5.1.    Administrative Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Administrative Agent its attorney-in-fact, with
full authority in the place and stead of such Grantor and in the name of such
Grantor or otherwise, from time to time in the Administrative Agent’s
discretion, following the occurrence and during the continuance of an Event of
Default, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Security Agreement, including:

(a)    to ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

(b)    to receive, endorse, and collect any drafts or other Instruments,
Documents and Chattel Paper, in connection with clause (a) above;

(c)    to file any claims or take any action or institute any proceedings which
the Administrative Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Administrative
Agent with respect to any of the Collateral; and

(d)    to perform the affirmative obligations of such Grantor hereunder.

Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

SECTION 5.2.    Administrative Agent Has No Duty. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest (on behalf of
the Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any of such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or responsibility
for:

(a)    ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Investment
Property, whether or not the Administrative Agent has or is deemed to have
knowledge of such matters; or

 

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(b)    taking any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.

SECTION 5.3.    Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, that, the Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
(a) any of the Collateral in its physical possession, if it handles the custody
and preservation of the Collateral in the same manner as it deals with similar
property for its own account and (b) any other Collateral, if it takes such
action for that purpose as each Grantor reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
Default, but failure of the Administrative Agent to comply with any such request
at any time shall not in itself be deemed a failure to exercise reasonable care.

ARTICLE 6.

REMEDIES

SECTION 6.1.    Certain Remedies. If any Event of Default shall have occurred
and be continuing:

(a)    The Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the UCC
(whether or not the UCC applies to the affected Collateral) and also may:

(i)    take possession of any Collateral not already in its possession without
demand and without legal process;

(ii)    require each Grantor to, and each Grantor hereby agrees that it will, at
its expense and upon request of the Administrative Agent forthwith, assemble all
or part of the Collateral as directed by the Administrative Agent and make it
available to the Administrative Agent at a place to be designated by the
Administrative Agent that is reasonably convenient to both parties;

(iii)    enter onto the property where any Collateral is located and take
possession thereof without demand and without legal process;

(iv)    deliver any notice of exclusive control under any Control Agreement; and

(v) without notice except as specified below, lease, license, sell or otherwise
dispose of the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. Each Grantor agrees that,
to the extent notice of sale shall be required by Law, at least ten days’ prior
written notice (unless an Event of Default pursuant to Section 8.01(f) of the
Credit Agreement shall have occurred, in which case, no such notice shall be
required) to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Administrative
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.

 

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(b)    All cash Proceeds received by the Administrative Agent in respect of any
sale of, collection from, or other realization upon, all or any part of the
Collateral shall be applied by the Administrative Agent against, all or any part
of the Obligations as set forth in Section 8.03 of the Credit Agreement.

(c)    The Administrative Agent may:

(i)    transfer all or any part of the Collateral into the name of the
Administrative Agent or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder;

(ii)    notify the parties obligated on any of the Collateral to make payment to
the Administrative Agent of any amount due or to become due thereunder;

(iii)    withdraw, or cause or direct the withdrawal, of all funds with respect
to any Collateral Account;

(iv)    enforce collection of any of the Collateral by suit or otherwise, and
surrender, release or exchange all or any part thereof, or compromise or extend
or renew for any period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto;

(v) endorse any checks, drafts, or other writings in any Grantor’s name to allow
collection of the Collateral;

(vi)    take control of any Proceeds of the Collateral; and

(vii)    execute (in the name, place and stead of any Grantor) endorsements,
assignments, stock powers and other instruments of conveyance or transfer with
respect to all or any of the Collateral.

(d)    Without limiting the foregoing, in respect of the Intellectual Property
Collateral:

(i)    upon the request of the Administrative Agent, each Grantor shall execute
and deliver to the Administrative Agent an assignment or assignments of the
Intellectual Property Collateral, subject (in the case of any licenses
thereunder) to any valid and enforceable requirements to obtain consents from
any third parties, and such other documents as are necessary or appropriate to
carry out the intent and purposes hereof;

(ii)    each Grantor agrees that the Administrative Agent may file applications
and maintain registrations for the protection of the Intellectual Property
Collateral and/or bring suit in the name of such Grantor, the Administrative
Agent or any Secured Party to enforce the Intellectual Property Collateral and
any licenses thereunder and, upon the request of the Administrative Agent, each
Grantor shall use all commercially reasonable efforts to assist with such filing
or enforcement (including the execution of relevant documents); and

 

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(iii)    in the event that the Administrative Agent elects not to make any
filing or bring any suit as set forth in clause (ii), each Grantor shall, upon
the request of Administrative Agent, use all commercially reasonable efforts,
whether through making appropriate filings or bringing suit or otherwise, to
protect, enforce and prevent the infringement, misappropriation, dilution,
unauthorized use or other violation of the Intellectual Property Collateral.

Notwithstanding the foregoing provisions of this Section 6.1, for the purposes
of this Section 6.1, “Collateral” and “Intellectual Property Collateral” shall
include any “intent to use” trademark application only to the extent (x) that
the business of such Grantor, or portion thereof, to which that mark pertains is
also included in the Collateral and (y) that such business is ongoing and
existing.

SECTION 6.2.    Securities Laws. If the Administrative Agent shall determine to
exercise its right to sell all or any of the Collateral that are Equity
Interests pursuant to Section 6.1, each Grantor agrees that, upon request of the
Administrative Agent, each Grantor will, at its own expense:

(a)    execute and deliver, and cause (or, with respect to any issuer which is
not a Subsidiary of such Grantor, use its best efforts to cause) each issuer of
the Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the opinion of
the Administrative Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the
“Securities Act”), and cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by Law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the SEC
applicable thereto;

(b)    use its best efforts to exempt the Collateral under the state securities
or “Blue Sky” laws and to obtain all necessary governmental approvals for the
sale of the Collateral, as requested by the Administrative Agent;

(c)    cause (or, with respect to any issuer that is not a Subsidiary of such
Grantor, use its best efforts to cause) each such issuer to make available to
its security holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and

(d)    do or cause to be done all such other acts and things as may be necessary
to make such sale of the Collateral or any part thereof valid and binding and in
compliance with applicable Law.

Each Grantor acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Administrative Agent or the Secured
Parties by reason of the failure by such Grantor to perform any of the covenants
contained in this Section and consequently agrees that, if such Grantor shall
fail to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as reasonably determined by the
Administrative Agent) of such Collateral on the date the Administrative Agent
shall demand compliance with this Section.

SECTION 6.3.    Compliance with Restrictions. Each Grantor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Administrative Agent is hereby authorized to comply with
any limitation or restriction in connection with

 

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such sale as it may be advised by counsel is necessary in order to avoid any
violation of applicable Law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to Persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Collateral), or in order to obtain
any required approval of the sale or of the purchaser by any Governmental
Authority or official, and such Grantor further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Administrative Agent be
liable nor accountable to such Grantor for any discount allowed by the reason of
the fact that such Collateral is sold in compliance with any such limitation or
restriction.

SECTION 6.4.    Protection of Collateral. The Administrative Agent may from time
to time, at its option, (a) perform any act required under this Agreement or
otherwise necessary to carry out the intent and purpose of this Agreement which
any Grantor fails to perform after being requested in writing so to perform (it
being understood that no such request need be given after the occurrence and
during the continuance of an Event of Default) and (b) take any other action
which the Administrative Agent deems reasonably necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein and, in each case, the expenses of the Administrative Agent incurred in
connection therewith shall be payable by such Grantor pursuant to and consistent
with Section 11.04 of the Credit Agreement.

ARTICLE 7.

MISCELLANEOUS PROVISIONS

SECTION 7.1.    Loan Document. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article XI thereof. To the extent of any
conflict between the terms contained in this Security Agreement and the terms
contained in the Credit Agreement, the terms of the Credit Agreement shall
control.

SECTION 7.2.    Binding on Successors, Transferees and Assigns; Assignment. This
Security Agreement shall remain in full force and effect until the Termination
Date has occurred, shall be binding upon the Grantors and their successors,
transferees and assigns and shall inure to the benefit of and be enforceable by
each Secured Party and its successors, transferees and assigns; provided, that,
no Grantor may (unless otherwise permitted under the terms of the Credit
Agreement or this Security Agreement) assign any of its obligations hereunder
without the prior written consent of all Lenders.

SECTION 7.3.    Amendments, etc. No amendment to or waiver of any provision of
this Security Agreement, nor consent to any departure by any Grantor from its
obligations under this Security Agreement, shall in any event be effective
unless the same shall be in writing and signed by the Administrative Agent (on
behalf of the Lenders or the Required Lenders, as the case may be, pursuant to
Section 11.01 of the Credit Agreement) and the Grantors and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

SECTION 7.4.    Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party (in the case of any Grantor, in care of the Company) specified in the
Credit Agreement or at such other address or facsimile number as may be
designated by such party in a notice to the other party. Any notice or other
communication, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any such notice or other communication, if transmitted by
facsimile, shall be deemed given when transmitted and electronically confirmed.

 

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SECTION 7.5.    Release of Liens. Upon (a) the Disposition of Collateral in
accordance with the Credit Agreement or (b) the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to (i) such Collateral (in the case of clause (a)) or (ii) all
Collateral (in the case of clause (b)), without delivery of any instrument or
performance of any act by any party. Upon the occurrence of the Termination
Date, this Agreement and all obligations of each Grantor hereunder shall
automatically terminate without delivery of any instrument or performance of any
act by any party. Upon the consummation of any transaction or termination
permitted by the Credit Agreement, the Administrative Agent will, at the
Grantors’ sole expense, deliver to the Grantors, without any representations,
warranties or recourse of any kind whatsoever, all Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantors such
documents as the Grantors shall reasonably request to evidence such termination.

SECTION 7.6.    Additional Grantors. Upon the execution and delivery by any
other Person of a supplement in the form of Annex I hereto (the “Security
Agreement Supplement”), such Person shall become a “Grantor” hereunder with the
same force and effect as if it were originally a party to this Security
Agreement and named as a “Grantor” hereunder. The execution and delivery of such
supplement shall not require the consent of any other Grantor hereunder, and the
rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor as a party to this
Security Agreement. The schedules to this Security Agreement shall be deemed to
be updated to include the information set forth on the schedules to each
Security Agreement Supplement from and after the date of such Security Agreement
Supplement. For the avoidance of doubt, non-U.S. Loan Parties shall not be
required to become a “Grantor” hereunder.

SECTION 7.7.    No Waiver; Remedies. In addition to, and not in limitation of
Section 2.4, no failure on the part of any Secured Party to exercise, and no
delay in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided and under each other
Loan Document are cumulative and not exclusive of any remedies provided by Law

SECTION 7.8.    Headings. The various headings of this Security Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Security Agreement or any provisions thereof.

SECTION 7.9.    Severability. If any provision of this Security Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Security Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations
to replace the illegal, invalid or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the illegal, invalid or unenforceable provisions. The invalidity of a provision
in a particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

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SECTION 7.10.    Governing Law; Jurisdiction; Etc.

(a)    GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b)    SUBMISSION TO JURISDICTION. EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT RELATED THERETO, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
SECURITY AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c)    WAIVER OF VENUE. EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN CLAUSE (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d)    SERVICE OF PROCESS. EACH PARTY HERETO AGREES THAT THE PROCESS BY WHICH
ANY SUIT, ACTION OR PROCEEDING IS BEGUN MAY BE SERVED ON IT BY BEING DELIVERED
IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING IN NEW YORK TO THE PROCESS
AGENT FOR SUCH PARTY. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS, INCLUDING SERVICE ON ANY PROCESS AGENT, IN THE MANNER PROVIDED FOR
NOTICES (OTHER THAN ELECTRONIC NOTICES) IN SECTION 11.02 OF THE CREDIT
AGREEMENT. NOTHING HEREIN CONTAINED SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY OTHER PERSON
PARTY HERETO TO BRING PROCEEDINGS AGAINST SUCH PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.

 

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SECTION 7.11.    Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 7.12.    Counterparts. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Security Agreement by facsimile or via other electronic means shall be effective
as delivery of a manually executed counterpart of this Security Agreement.

SECTION 7.13.    Security Agreements. Without limiting any of the rights,
remedies, privileges or benefits provided hereunder to the Administrative Agent
for its benefit and the ratable benefit of the other Secured Parties, each
Grantor and the Administrative Agent hereby agree that the terms and provisions
of this Security Agreement in respect of any Collateral subject to the pledge or
other Lien of any other security agreement entered into for the benefit of the
Secured Parties are, and shall be deemed to be, supplemental and in addition to
the rights, remedies, privileges and benefits provided to the Administrative
Agent and the other Secured Parties under such other security agreement and
under applicable Law to the extent consistent with applicable Law; provided,
that, in the event that the terms of this Security Agreement conflict or are
inconsistent with the applicable other security agreement or applicable Law
governing such other security agreement, (a) to the extent that the provisions
of such other security agreement or applicable foreign Law are, under applicable
foreign Law, necessary for the creation, perfection or priority of the security
interests in the Collateral subject to such other security agreement, the terms
of such other security agreement or such applicable Law shall be controlling and
(b) otherwise, the terms hereof shall be controlling.

SECTION 7.14.    Perfection under Foreign Law. Notwithstanding any other
provision of this Agreement with respect to (a) the assets or properties of any
Grantor that are located in a non-U.S. jurisdiction (a “Foreign Jurisdiction”)
or hereafter are moved to a Foreign Jurisdiction (any assets or properties so
located or moved being “Foreign Located Assets”), and (b) Equity Interests in
any Foreign Subsidiary that are owned by any Grantor (such Equity Interests
being “Foreign Equity”):

(a)    except with respect to the Luxembourg Share Pledge Agreement, no action
in any jurisdiction other than the United States shall be required in order to
create or perfect any security interest in any assets of the Grantors (it being
understood and agreed that no security agreements and no pledge agreements shall
be governed under the laws of any jurisdiction other than the United States);
and

(b)    no representation or warranty by any Grantor herein as to the perfection
of any security interest granted in any Foreign Located Asset or Foreign Equity
shall be deemed to refer to any action to create or perfect any security
interest in or Lien on such Foreign Located Assets or Foreign Equity owned by
such Grantor under the law of any Foreign Jurisdiction (“Foreign Perfection”)
that may be required under the laws of any Foreign Jurisdiction in connection
therewith.

 

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SECTION 7.15.    Acknowledgement Regarding Any Supported QFCs. The terms and
provisions of Section 11.22 of the Credit Agreement are incorporated herein by
reference, mutatis mutandis, and the parties hereto agree to such terms and
provisions.

SECTION 7.16.    Amendment and Restatement of the Existing Security
Agreement.    The parties to the Existing Security Agreement each hereby agrees
that the Existing Security Agreement automatically shall be deemed amended,
superseded and restated in its entirety by this Security Agreement. All
indebtedness, obligations, liabilities and liens created by the Existing
Security Agreement shall continue unimpaired and in full force and effect, as
amended and restated in this Security Agreement. This Security Agreement does
not constitute a novation of the obligations and liabilities existing under the
Existing Security Agreement, and this Security Agreement evidences the
obligations of the Grantors under the Existing Security Agreement as continued
and amended and restated hereby.

SECTION 7.17.    ULC Shares. Notwithstanding any provisions to the contrary
contained in this Security Agreement, any other Loan Document or any other
document or agreement to which any party to this Security Agreement is also
party, each Grantor that is a registered and beneficial owner of the shares and
other Equity Interests pledged hereunder (collectively, the “ULC Shares”) of an
unlimited company, unlimited liability company or unlimited liability
corporation incorporated or otherwise existing under the laws of any province or
territory of Canada or under the federal laws of Canada, or any other entity
whose members or shareholders have liability comparable to that of members or
shareholders of any of those entities (each, a “ULC”) that is from time to time
an issuer of ULC Shares, is the sole registered and beneficial owner of such ULC
Shares. Each such Grantor will remain so until the ULC Shares are, with the
prior written consent of the Administrative Agent (which has not been revoked)
and in the course of realization of the security interests under this Security
Agreement, transferred on the books and records of the applicable issuer of ULC
Shares into the name of the Administrative Agent, its nominee, any Secured Party
or a purchaser designated by the Administrative Agent. Accordingly, each such
Grantor shall be entitled to receive and retain for its own account any
dividend, distribution, payment or other proceeds in respect of the ULC Shares
(except insofar as such Grantor has granted a security interest in the dividend
or other distribution in favor of the Administrative Agent under this Agreement,
in which case the other terms of the security interest will apply) and shall
have the right to vote the ULC Shares and to control the direction, management
and policies of the issuer of ULC Shares to the same extent as such Grantor
would if the ULC Shares were not pledged to the Administrative Agent. Nothing in
this Security Agreement or any other Loan Document is intended to or shall
constitute the Administrative Agent, any Secured Party or any person other than
the Grantors, a shareholder or member of any issuer of ULC Shares for the
purposes of the Business Corporations Act (Alberta), the Companies Act (Nova
Scotia), the Business Corporations Act (British Columbia) or any other
applicable legislation governing the formation of a ULC (“ULC Legislation”)
until such time as the ULC Shares are transferred in the course of realization
as described above in this Section. To the extent any provision of this Security
Agreement would have the effect of constituting the Administrative Agent or any
Secured Party or any person other than the Grantors as a shareholder or member
of any ULC that is from time to time an issuer of ULC Shares for the purposes of
the ULC Legislation before then, the provision shall be deemed not to apply to
the ULC Shares or that ULC, as the case may be, and shall be ineffective without
otherwise invalidating or rendering this Security Agreement unenforceable or
invalidating or rendering the provision in question unenforceable insofar as it
relates to property that is not the ULC Shares. Notwithstanding anything else in
this Security Agreement, except upon the exercise of rights to sell or otherwise
dispose of the ULC Shares following the occurrence of an Event of Default, the
applicable Grantors shall not cause, permit or enable any issuer of ULC Shares
to cause, permit, or enable, the Administrative Agent or any Secured Party to:
(a) be registered as a shareholder of the issuer of ULC Shares; (b) have any
notation entered in its favor in the share register or

 

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other books and records of a ULC in respect of the ULC Shares; (c) act or
purport to act as a shareholder of the issuer of ULC Shares, or obtain, exercise
or attempt to exercise any rights of a shareholder of the issuer of ULC Shares,
including the right to attend a meeting of the issuer of ULC Shares, or to vote
the ULC Shares; (d) be held out as shareholder or member of the issuer of ULC
Shares; or (e) receive, directly or indirectly, any dividends, property or other
distributions from the issuer of ULC Shares by reason of the Administrative
Agent or any Secured Party holding a security interest in the ULC Shares. The
limitations in this Section shall not restrict the Administrative Agent from
(i) exercising the rights to sell or otherwise dispose of ULC Shares that it is
entitled to exercise under this Security Agreement or (ii) having the ULC Shares
registered in its name, in either case at any time that the Administrative Agent
is entitled to realize on all or any portion of the ULC Shares pursuant to this
Security Agreement and, in either case, provided that the Administrative Agent
has (y) given notice to such Grantor of its intention to realize upon those ULC
Shares (including by selling or disposing of or re-registering those ULC Shares)
and (z) consented in writing to any change in registration and not revoked its
consent.

[signature pages follow]

 

30

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IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Responsible Officer as of the
date first written above.

 

GRANTORS:    

GENTHERM INCORPORATED,

a Michigan corporation

    By:   /s/ Matteo Anversa     Name: Matteo Anversa     Title: Chief Financial
Officer

 

   

GENTHERM (TEXAS), INC.,

a Texas corporation

    By:   /s/ Matteo Anversa     Name: Matteo Anversa     Title: Chief Financial
Officer

 

   

GENTHERM MEDICAL, LLC,

an Ohio limited liability company

    By:   /s/ Matteo Anversa     Name: Matteo Anversa     Title: Manager

 

   

GENTHERM PROPERTIES I, LLC,

a Michigan limited liability company

    By:   /s/ Matteo Anversa     Name: Matteo Anversa     Title: Chief Financial
Officer

 

   

GENTHERM PROPERTIES II, LLC,

a Michigan limited liability company

    By:   /s/ Matteo Anversa     Name: Matteo Anversa     Title: Chief Financial
Officer

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Accepted and agreed to as of the date first above written.

 

BANK OF AMERICA, N.A., as Administrative Agent

By:   /s/ Felicia Brinson Name: Felicia Brinson Title: Assistant Vice President