Exhibit 10.1

Execution Copy

Framework Agreement

(the “Agreement”)

Milbank, Tweed, Hadley & McCloy LLP

Taunusanlage 15

60325 Frankfurt am Main, Germany

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Framework Agreement

dated as of February 15, 2013

by and among

 

1. Deutsche Balaton AG, a stock corporation organized under the laws of the
Federal Republic of Germany, with its seat in Heidelberg and its business
address at Ziegelhäuser Landstraße 1, 69120 Heidelberg, and registered with the
commercial register of the local court of Mannheim under HRB 338172 (“Balaton”)

 

2. Gentherm Incorporated, a corporation organized under the laws of the State of
Michigan, USA, with its seat in Northville, USA and its business address at
Northville, Michigan, 21680 Haggerty Road, Ste. 101, 48167 USA (“Gentherm Inc.”)

 

3. Gentherm Europe GmbH, a limited liability company organized under the laws of
the Federal Republic of Germany, with its seat in Augsburg and its business
address at Ulmer Straße 160B, 86156 Augsburg, and registered with the commercial
register of the local court of Augsburg under HRB 25596 (“Purchaser”)

- the parties under 2. and 3. collectively “Gentherm” -

- Balaton, Gentherm Inc. and Purchaser each a “Party” and,

collectively, the “Parties” -

 

2

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Table of Contents

 

1. Definitions

     7   

2. Settlement; Escrow of Settlement Agreement

     9   

3. Sale and Purchase of the Shares

     10   

4. Shareholding of Balaton in Gentherm Inc.

     10   

5. Closing; Subsequent Acts

     10   

6. Confidentiality

     12   

7. Termination

     13   

8. Notices; Accounts

     14   

9. Choice of Law, Venue

     15   

10. Interpretation, Formalities, Severability

     15   

11. Miscellaneous

     16   

 

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List of Annexes

 

   

Annex

 

  

Topic

 

   

Annex P.14

 

   Executed Trustee Agreement    

Annex 2

 

   Draft of Registration Rights Agreement    

Annex 3

 

   Draft of Settlement Agreement    

Annex 4

 

   Draft of SPA    

Annex 5

 

   Draft of Balaton Rights Agreement    

Annex 5.5

 

   Notification re. Waiver    

Annex 6.2

 

   Press Release Gentherm

 

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Preamble

 

P.1 Whereas, Gentherm Inc. holds all shares in Purchaser.

 

P.2 Whereas, Purchaser holds 2,429,403 of the bearer shares with no par value
(auf den Inhaber lautende Aktien ohne Nennbetrag (Stückaktien)) in W.E.T.
Automotive Systems A.G., a stock corporation organized under the laws of the
Federal Republic of Germany with its seat in Odelzhausen, its business address
at Rudolf-Diesel-Str. 12, 85235 Odelzhausen and registered with the commercial
register of the local court of Munich under HRB 119793 (the “Company”), and
Gentherm Inc. holds 2,660 of the bearer shares with no par value (auf den
Inhaber lautende Aktien ohne Nennbetrag (Stückaktien)) in the Company. The
Company has a registered share capital of EUR 9,600,000 divided into 3,200,000
bearer shares with no par value (each a “W.E.T. Share”), which are admitted for
trading in the Regulated Market of the Frankfurt Stock Exchange.

 

P.3 Whereas, Balaton holds 442,253 of the W.E.T. Shares (the “Shares”), which
are booked on deposit accounts to the benefit of Balaton.

 

P.4 Whereas, Purchaser (then named Amerigon Europe GmbH) as controlling entity
and the Company as controlled entity entered into a domination and profit and
loss transfer agreement on June 16, 2011 (the “DPLTA”).

 

P.5 Whereas, the annual shareholders’ meeting of the Company dated August 16,
2011 (the “2011 Shareholders’ Meeting”) has adopted, inter alia, the following
resolutions:

 

  -  

resolutions under agenda item 3 and agenda item 4 on the discharge of the
members of the executive board of the Company and the members of the supervisory
board of the Company, respectively, for fiscal year 2010 (the “Discharge
Resolutions 2011”), and

 

  -  

resolution under agenda item 6 on the approval of the DPLTA (the “DPLTA Approval
Resolution”).

 

P.6 Whereas, the annual shareholders’ meeting of the Company dated June 14, 2012
(the “2012 Shareholders’ Meeting”) has adopted, inter alia, the following
resolutions:

 

  -  

resolutions under agenda item 3 and agenda item 4 on the discharge of the
members of the executive board of the Company and the members of the supervisory
board of the Company, respectively, for fiscal year 2011 (the “Discharge
Resolutions 2012”), and

 

  -  

resolution under agenda item 6 on the confirmation pursuant to Sec. 244 German
Stock Corporation Act (AktG) of the DPLTA Approval Resolution (the “Confirmatory
Resolution”).

 

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P.7 Whereas, following the 2011 Shareholders’ Meeting, Balaton filed a challenge
and voidance action (Anfechtungs- und Nichtigkeitsklage) with the Regional Court
Munich I (Landgericht München I) (file no. 5 HK O 20488/11) against the Company
with respect to the Discharge Resolutions 2011 and the DPLTA Approval Resolution
(the “Balaton Court Action 2011”). By first instance decision of the Regional
Court Munich I (Landgericht München I) dated April 5, 2012, the court declared
the DPLTA Approval Resolution void, but dismissed the Balaton Court Action 2011
with respect to the Discharge Resolutions 2011. Each of the Company and Balaton
appealed against this first instance decision to the Higher Regional Court of
Munich (Oberlandesgericht München) (file no. 7 U 1805/12). Such appeal has not
yet been decided on.

 

P.8 Whereas, following the 2012 Shareholders’ Meeting, Balaton filed a challenge
and voidance action (Anfechtungs- und Nichtigkeitsklage) with the Regional Court
Munich I (Landgericht München I) (file no. 5 HK O 14081/12) against the Company
with respect to the Discharge Resolutions 2012 and the Confirmatory Resolution
(the “Balaton Court Action 2012”).

 

P.9 Whereas, Balaton, furthermore, filed two applications with the Regional
Court Munich I (Landgericht München I) (file no. 17 HK O 27730/11 and 17 HK O
16045/12) against the Company each regarding the appointment of a special
auditor pursuant to Sec. 142 para. 2 German Stock Corporations Act (AktG) (the
“Balaton Court Applications” and, together with the Balaton Court Action 2011
and the Balaton Court Action 2012, the “Balaton Actions”). By first instance
decision of the Regional Court Munich I dated January 17, 2013 one of the
Balaton Court Applications (file no. 17 HK O 27730/11) was dismissed. The other
Balaton Court Application (file no. 17 HK O 16045/12) has not yet been decided
on.

 

P.10 Whereas, Gentherm Inc. has informed Balaton that it will seek to obtain
written waivers or written declarations of non-exercise of rights from all of
the holders of Gentherm Inc.’s Series C Preferred Stock effectively waiving the
rights such holders have to participate in the issuance of equity by Gentherm
Inc.

 

P.11 Whereas, while holding up their respective legal positions regarding the
subject matters of the various Balaton Actions, the Parties intend to finally
settle all Balaton Actions through the Balaton Documentation. The Parties are
aware that (i) the Company concluded, among others, a currency related swap with
Hypovereinsbank and that the aforementioned contractual parties to such currency
related swaps are currently in legal proceedings concerning the validity of such
currency related swaps and related claims and (ii) that the outcome of such
lawsuit (and its further handling) may be of interest to the shareholders of the
Company.

 

P.12

Whereas, Purchaser desires to acquire the Shares, and Balaton is willing to
exchange, the Shares against shares in Gentherm Inc. as ultimate parent company

 

6

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  of the Company and a cash payment as consideration and subject to and under
the terms of the Balaton Documentation. As Balaton via its shareholding in
Gentherm Inc. will become an indirect shareholder in the Company, upon receiving
the shares in Gentherm Inc., Balaton will—not as consideration but as a
consequence—become an indirect shareholder in the Company. This allows Balaton
to participate indirectly in the Company and therewith continue its investment
in the Company.

 

P.13 Whereas, Gentherm Inc. requests and Balaton agrees to certain restrictions
in respect of Balaton’s future shareholding in Gentherm Inc. as set forth in the
Balaton Rights Agreement.

 

P.14 Whereas, the Parties and the Trustee have executed a Trustee Agreement
attached to this Agreement as Annex P.14.

Now, therefore, it is agreed as follows:

1.

Definitions

“2011 Shareholders’ Meeting” is defined in Section P.5.

“2012 Shareholders’ Meeting” is defined in Section P.6.

“Agreement” shall mean this Framework Agreement.

“Balaton” is defined in the Recitals.

“Balaton Actions” is defined in Section P.9.

“Balaton Cash Account” is defined in Section 8.5.

“Balaton Court Action 2011” is defined in Section P.7.

“Balaton Court Action 2012” is defined in Section P.8.

“Balaton Court Applications” is defined in Section P.9.

“Balaton Documentation” shall mean this Agreement, the Settlement Agreement, the
SPA, the Balaton Rights Agreement, the Registration Rights Agrement and any
notice, certificate or other agreement (except for the Trustee Agreement)
related to any of the foregoing, collectively.

“Balaton Rights Agreement” shall mean the agreement attached to this Agreement
in draft form as Annex 5.

“Balaton Securities Account” is defined in Section 8.5.

“Business Day” shall mean a day on which the banks are open to the public for
regular business in both Frankfurt am Main, Germany, and Michigan, United
States.

 

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“Cash Consideration” is defined in Section 5.2(f).

“Closing” is defined in Section 5.1.

“Closing Action” is defined in Section 5.2.

“Closing Date” is defined in Section 5.1.

“Company” is defined in Section P.2.

“Confidential Information” shall mean any information relating to the Balaton
Documentation and/or the Trustee Agreement, the nature and details of the
negotiations that preceded the execution of this Agreement, and information
shared by the Parties with each other concerning their respective businesses at
any time prior to execution of this Agreement, in whatever form, and includes
information given orally and in any document, electronic file or any other way
of representing or recording information which contains or is derived or copied
from such information, except to the extent that the relevant facts (i) are or
become public knowledge other than as a result of any breach of Section 6.1 of
this Agreement, (ii) are or were known by the relevant person before the date
the information is or was disclosed to it or (iii) are lawfully obtained after
that date and that have not been disclosed by any party hereto in accordance
with the terms contained in the Balaton Documentation.

“Confirmatory Resolution” is defined in Section P.6.

“Declarations of Withdrawal” shall mean the letters attached to the Settlement
Agreement in draft form as Annex 4.1.

“Discharge Resolutions 2011” is defined in Section P.5.

“Discharge Resolutions 2012” is defined in Section P.6.

“DPLTA” is defined in Section P.4.

“DPLTA Approval Resolution” is defined in Section P.5.

“Gentherm” is defined in the Recitals.

“Gentherm Affiliate” shall mean any direct or indirect subsidiary of Gentherm
other than the Company and its direct or indirect subsidiaries.

“Gentherm Common Stock” shall mean 3,300,000 fully paid and nonassessable shares
of the common stock, without par value, of Gentherm Inc.

“Gentherm Inc.” is defined in the Recitals.

“Gentherm Representative” shall mean an attorney-at-law of Milbank, Tweed,
Hadley & McCloy LLP with business address Taunusanlage 15, 60323 Frankfurt or
Maximilianstrasse 15, 80539 Munich, or any person nominated by Gentherm Inc.
prior to the Closing Date.

“Notice” is defined in Section 8.1.

“Parties” is defined in the Recitals.

 

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“Party” is defined in the Recitals.

“Proceedings Courts” shall mean the district court Munich I and the Higher
Regional Court of Munich.

“Publication” is defined in Section 11.6.

“Purchaser” is defined in the Recitals.

“Purchaser’s Deposit Account” shall mean Purchaser’s deposit account which shall
be communicated in writing by Purchaser to Trustee at least three calendar days
prior to the Closing Date.

“Registration Rights Agreement” shall mean the agreement attached to this
Agreement in draft form as Annex 2.

“Settlement Agreement” shall mean the agreement attached to this Agreement in
draft form as Annex 3.

“Shares” is defined in Section P.3.

“Share Certificate” shall mean a physical certificate of the Gentherm Common
Stock representing the consideration payable in shares of Gentherm Common Stock
as provided in Section 3.3 of the SPA.

“SPA” shall mean the agreement attached to this Agreement in draft form as Annex
4.

“Trustee” shall mean any partner or associate of the law firm Gütt Olk Feldhaus,
Partnerschaft von Rechtsanwälten in Munich, or any other person mutually agreed
by Gentherm Inc. and Balaton prior to the Closing Date.

“Trustee Account” shall mean Trustee’s bank account, which has been communicated
in writing by Trustee to the Parties on or prior to the date hereof.

“Trustee Agreement” shall mean the agreement attached to this Agreement as Annex
P.14.

“Trustee’s Deposit Account” shall mean Trustee’s deposit account, which has been
communicated in writing by Trustee to the Parties on or prior to the date
hereof.

“W.E.T. Share” is defined in Section P.2.

2.

Settlement; Escrow of Settlement Agreement

 

2.1 On Closing and as further provided for in Section 5.2, the Parties shall
sign the Settlement Agreement, the signed versions and signature pages of which
shall not be exchanged between any of the Parties but shall be held in escrow by
the Trustee, who shall, in this respect and with respect to the signed
Declarations of Withdrawal, not act as a receiving agent (Empfangsvertreter)
pursuant to Sec. 164 para. 3 German Civil Code (Bürgerliches Gesetzbuch, BGB)
for any Party.

 

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2.2 The Trustee shall be instructed not to exchange or make available to any
Party or third party the signature pages of the Settlement Agreement and the
signed Declarations of Withdrawal, and, therefore, the Settlement Agreement
shall not become effective, prior to the confirmation by the Trustee that he has
received the Share Certificate from Gentherm.

 

2.3 Between signing of this Agreement and Balaton’s receipt of the Share
Certificate, Gentherm or any Gentherm Affiliate shall not in any way object to
Balaton’s entitlement to procure any of the Balaton Actions and shall not file
any declarations with the relevant courts that doubt, question or challenge
Balaton’s ability to uphold or support such Balaton Actions.

3.

Sale and Purchase of the Shares

On Closing and as further provided for in Section 5.2, the Parties shall sign
the SPA and the Registration Right Agreement.

4.

Shareholding of Balaton in Gentherm Inc.

On Closing and as further provided for in Section 5.2, the Parties shall sign
the Balaton Rights Agreement.

5.

Closing; Subsequent Acts

 

5.1 The consummation of this Agreement (the “Closing”) shall take place at the
offices of Trustee in Munich at 8.00 a.m. CET on the first Business Day
following the satisfaction of the conditions set forth in Section 5.5, unless
otherwise agreed between the Parties (that date set or agreed for the Closing to
take place hereafter referred to as the “Closing Date”). In the event the
conditions set forth in Section 5.5 have not been satisfied by February 28,
2013, this Framework Agreement shall automatically terminate, be of no further
force or effect whatsoever and no Party shall have any obligation to any other
Party hereunder whatsoever, except that the Parties shall have such rights and
obligations under the Trustee Agreement as shall exist in the event of
termination of this Agreement.

 

5.2 On the Closing Date, the Parties shall take the actions (each a “Closing
Action”) in the order set out below, unless and to the extent such Closing
Actions have not already been taken before the Closing Date:

 

  (a)

Gentherm Inc. delivers to Balaton written waivers, or other legal binding
indications of waiver or non-exercise of rights, from all of the holders of
Gentherm Inc.’s Series C Preferred Stock effectively waiving the rights

 

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  such holders have to participate in the issuance of equity by Gentherm Inc.
evidencing that Gentherm Inc. is in a position to issue the Gentherm Common
Stock.

 

  (b) The Parties shall sign the Settlement Agreement in accordance with
Section 2 (it being understood that the Settlement Agreement shall not, directly
or indirectly, be delivered to (“zugehen”) Gentherm Inc or the Purchaser unless
in accordance with Section 2.1 and the Trustee Agreement).

 

  (c) The Parties shall sign the SPA.

 

  (d) The Parties shall sign the Balaton Rights Agreement and the Registration
Rights Agreement.

 

  (e) Gentherm Inc. shall have placed the Share Certificate with the Trustee.

 

  (f) Purchaser shall pay the amount of the cash payment payable as
consideration for the Shares to Balaton as provided for in Section 3.2 of the
SPA (the “Cash Consideration”) to the Trustee Account.

 

  (g) Balaton shall instruct its bank to book the Shares to the Trustee’s
Deposit Account and such bookings shall have occurred, but only following
delivery of the Share Certificate and the amount set forth above under (f) was
transferred to the Trustee.

 

  (h) Balaton shall deliver originals of the signed Declarations of Withdrawal
to the Trustee;

 

  (i) Gentherm shall deliver a written statement of the Company to the Trustee
that the Company irrevocably represents to publish any and all documents
pursuant to Section 149 German Stock Corporation Act (AktG) in the Federal
Gazette (Bundesanzeiger) related to the settlement of any court proceedings in
question and irrevocably authorizing Balaton to make such publications;

 

5.3 Immediately upon fulfillment of the Closing Actions as set forth in
Section 5.2 and the Publication in accordance with Section 11.6, the Trustee
shall, in accordance with the terms of the Trustee Agreement,

 

  (a) release the Declarations of Withdrawal to the Proceedings Court, and

 

  (b) deliver the Share Certificate to Balaton, and

 

  (c) pay the Cash Consideration to the Balaton Cash Account, and

 

  (d) transfer the Shares from the Trustee’s Deposit Account to Gentherm Europe.

 

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5.4 If on the Closing Date Balaton or Gentherm fail or have failed to comply in
any material respect with their respective obligations hereunder, the
non-failing Party may, in addition to its rights under applicable law, by
written notice to the failing Party:

 

  (a) defer the date scheduled for the Closing until such failure to comply has
been cured, or

 

  (b) proceed to Closing so far as practicable,

in each case without prejudice to its rights hereunder.

 

5.5 It is a condition to the obligation of the Parties to commence the Closing
that Gentherm Inc. has obtained written waivers, or other indications of waiver
or non-exercise of rights, from all of the holders of Gentherm Inc.’s Series C
Preferred Stock effectively waiving the rights such holders have to participate
in the issuance of equity by Gentherm Inc. on the same basis as at the equity
issuance of Gentherm Inc. described in this Agreement. Gentherm Inc. shall
notify (i) Balaton of the status of receipt of such waivers on a periodic basis
and (ii) Balaton and Trustee in the form attached hereto as Annex 5.5 after all
such waivers have been obtained.

 

5.6 After delivery of the originals of the signed Declarations of Withdrawal to
the Trustee as set forth in Section 5.2(h), Balaton shall not withdraw, revoke,
contest or otherwise challenge the validity of the Declarations of Withdrawal
towards Gentherm, the Company, any of the Proceedings Courts or any other third
party. For the avoidance of doubt, the Trustee shall only be entitled to release
the Declarations of Withdrawal and the Settlement Agreement as set forth in the
Trustee Agreement.

6.

Confidentiality

 

6.1 The Parties mutually undertake to keep Confidential Information secret and
confidential vis-à-vis any third party, except that Confidential Information may
be disclosed:

 

  (a) to persons affiliated with a Party and its officers, directors, employees
and to professional advisers who have a need to know such information, so long
as such persons have been made aware of the confidential nature of the
Confidential Information and have agreed to be bound by the terms of this
Section 6; or

 

  (b)

where requested or required by any court of competent jurisdiction or any
competent judicial, governmental, supervisory or regulatory body or where
required by the rules of any stock exchange, regulation or law, but only after
giving written notice of such required disclosure to the other

 

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  Parties (except that the Parties expressly acknowledge that the Company,
Gentherm Inc., Balaton and/or Purchaser are required or considers to be required
under applicable law to publish respectively disclose the content of the Balaton
Documentation and/or the Trustee Agreement and no prior notice shall be required
in such regard); or

 

  (c) where disclosure is required in order for a Party to honor or enforce any
provision of the Balaton Documentation and/or the Trustee Agreement; or

 

  (d) with the prior written consent of all of the other Parties.

 

6.2 No press releases or other public announcement concerning the transactions
contemplated by the Balaton Documentation and/or the Trustee Agreement shall be
made by any Party unless the form and text of such announcement shall first have
been approved by Gentherm Inc. and Balaton except that (a) if that Party is
required by law or by applicable stock exchange regulations to make an
announcement, the aforementioned approval requirement shall not apply and
(b) Gentherm shall be permitted to issue a press release concerning the
transactions contemplated by the Balaton Documentation and/or the Trustee
Agreement, as attached hereto as Annex 6.2, and (c) Balaton shall be permitted
to issue an ad-hoc release concerning the transactions contemplated by the
Balaton Documentation and/or the Trustee Agreement.

 

6.3 The Parties are aware that the publication of this Agreement, the Balaton
Documentation and the Trustee Agreement by the Company in their original
language and with a translation into German language of each of the agreements
part of the Balaton Documentation and the Trust Agreement in the Federal Gazette
(Bundesanzeiger) shall be a condition precedent to the effectiveness of this
Agreement.

7.

Termination

 

7.1 Prior to Closing, this Agreement may be terminated by written notice:

 

  (a) at any time by mutual agreement of Gentherm Inc. and Balaton; Purchaser
hereby acknowledges that such mutual agreement shall also be binding for
Purchaser;

 

  (b) by Gentherm Inc. or Balaton at any time on or ten days after signing of
the Trustee Agreement if the Closing has not taken place by such date;

 

  (c) by Gentherm Inc. if Balaton is in material breach of any obligation under
the Balaton Documentation and/or the Trustee Agreement that is incurable or has
not been cured within five Business Days following written notice by Gentherm
Inc.; or

 

  (d)

by Balaton if any of Gentherm Inc or the Purchaser is in material breach of

 

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  any obligation under the Balaton Documentation and/or the Trustee Agreement
that is incurable or has not been cured within five Business Days following
written notice by Balaton to Gentherm Inc.

 

7.2 Section 6 of this Agreement shall apply and shall continue to apply and be
in full force following termination of this Agreement. Gentherm Inc. and the
Purchaser each undertake to use reasonable efforts to ensure that the Company
does not disclose any Confidential Information to any court which is competent
for disputes between the Company and Balaton or any of its affiliated companies
at the moment or in the future, unless Closing has occurred. This Section 7.2 of
this Agreement shall continue to apply following termination of this Agreement.
Gentherm Inc. is fully responsible for any misuse or breach of the
confidentiality by the Company and shall indemnify Balaton for any damages
resulting thereof.

8.

Notices; Accounts

 

8.1 All declarations, notices or other communications under the Balaton
Documentation (“Notice”) shall be in writing and in the English language and
delivered by hand, by courier, by facsimile or scanned letter transmitted by
email to the person at the addresses set forth in Section 8.2, or such other
addresses as may be designated by the respective Party to the other Parties in
the same manner.

 

8.2 Any Notice to be given under or in connection with the Balaton Documentation
shall be addressed as follows:

 

  (a) If directed to Balaton:

 

       Deutsche Balaton AG, Attn: Jens Jüttner, Ziegelhäuser Landstraße 1 69120
Heidelberg, Fax +49 62 21 6 49 24 24, e-mail: juettner@deutsche-balaton.de and
flick@deutsche-balaton.de

 

  (b) If directed to Purchaser or Gentherm Inc.:

 

       Gentherm Europe GmbH and Gentherm Incorporated, Attn: Daniel R. Coker,
21680 Haggerty Road, Suite 101, Northville, Michigan 48167, United States of
America, Fax +1 248 504 0500, e-mail: dcoker@gentherm.com

 

       with a copy to: Dr. Peter Memminger, Milbank, Tweed, Hadley & McCloy LLP,
Taunusanlage 15, 60325 Frankfurt am Main, Fax +49 (0) 69 71914 3500, e-mail:
pmemminger@milbank.com

 

8.3 Each Party shall communicate any change of its respective address as soon as
possible in writing to the respective other Parties. Until such communication,
the address as hitherto shall be relevant.

 

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8.4 The receipt of copies of Notices by a Party’s advisor shall not constitute
or substitute the receipt of such Notices by the Party itself.

 

8.5 Unless Balaton in writing informs Gentherm and the Trustee otherwise, the
Cash Consideration shall be transferred to the account to be communicated to the
Trustee (the “Balaton Cash Account”).

9.

Choice of Law, Venue

 

9.1 The Balaton Documentation, excluding the Balaton Rights Agreement and the
Registration Rights Agreement, shall be governed by and construed in all
respects in accordance with the laws of the Federal Republic of Germany with the
exception of (a) its conflict of laws provisions and (b) the rules of the Vienna
Convention for Sale of Goods dated April 11, 1980, unless explicitly provided
otherwise. The Balaton Rights Agreement shall be governed by Michigan, United
States law as set forth therein, the Registration Rights Agreement shall be
governed by the laws of New York, New York, United States, as set forth therein.

 

9.2 The courts of Frankfurt am Main, Germany, have exclusive jurisdiction to
settle any dispute arising out of or in connection with the Balaton
Documentation, excluding any dispute arising under the Balaton Rights Agreement
and the Registration Rights Agreement. For the Balaton Rights Agreement the
courts in Oakland County, Michigan, United States shall have exclusive
jurisdiction. For the Registration Rights Agreement the Federal Court in New
York, New York, United States shall have exclusive jurisdiction.

10.

Interpretation, Formalities, Severability

 

10.1 Capitalized terms are defined within the Balaton Documentation and such
definitions shall apply to each and every use of such terms within the Balaton
Documentation.

 

10.2 In case of doubt, the meaning of the German expressions used in the Balaton
Documentation shall prevail over the meaning of the English expressions to which
they relate. The foregoing shall not apply to the Balaton Rights Agreement and
the Registration Rights Agreement.

 

10.3 A reference to any agreement of the Balaton Documentation implies reference
to all annexes included in such agreement.

 

10.4

A Party’s failure or delay to insist on strict performance of any provision of
the Balaton Documentation or exercise any power, right or remedy hereunder shall
not operate as or be deemed to be a waiver thereof or of any right or remedy for
breach of a like or different nature nor shall any single or any partial
exercise of

 

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  any power, right or remedy preclude its further exercise or the exercise of
any other power, right or remedy.

 

10.5 Changes, amendments and waivers to the Balaton Documentation shall be valid
only if made in writing and must be signed by all Parties to be effective. This
shall also apply to amendments of this provision.

 

10.6 In the event that any agreement or any provision of the Balaton
Documentation shall be or become invalid or unenforceable or if the Balaton
Documentation should show a gap, this shall not affect the validity of the
remaining provisions of the Balaton Documentation. In any such case, such valid
and enforceable provision shall apply which the parties would have agreed upon
in the light of the economic purpose pursued with this Balaton Documentation,
had they considered the matter when executing the Balaton Documentation.

11.

Miscellaneous

 

11.1 Except as otherwise stated in the Balaton Documentation, all payments under
or in connection with the Balaton Documentation shall be made free of all taxes,
bank charges and other deductions by wire transfer of immediately available
funds, value as of the relevant due date.

 

11.2 Except as otherwise stated in the Balaton Documentation, the Parties shall
not be entitled to exercise any right of set-off or retention right with respect
to any payment or action to be made by them under the Balaton Documentation
unless their claim is finally decided by a final court judgment or arbitration
award.

 

11.3 Each of the Parties hereto shall pay their own costs and expenses in
relation to the preparation, execution and carrying into effect of the Balaton
Documentation.

 

11.4 Except for the rights and claims of Gentherm Inc. towards Balaton under
Section 4 and 5 of the Settlement Agreement, which Gentherm Inc. may assign to
any of its subsidiaries, and except as otherwise provided herein or in the
Registration Rights Agreement, no Party shall be entitled to assign any rights
or claims under the Balaton Documentation without the prior written approval of
the other Parties. However, if any right shall be or is assigned or any
obligation is transferred or passes over to another person, in particular to the
Company, such assignment or transfer has to be published in accordance with
Section 149 German Stock Corporation Act (AktG). Sections 11.6 and 11.7 of this
Agreement shall apply accordingly. For the avoidance of doubt, Balaton is
allowed to transfer all or part of the Gentherm Common Stock or other Gentherm
shares to any third party or affiliated company at any time without any
publication other than applicable under US law and without approval of Gentherm
Inc., the Purchaser or the Company.

 

16

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11.5 Except as provided for in Section 2 of the Settlement Agreement and in
Section 6 of this Agreement, none of the provisions of the Balaton Documentation
shall give rise to any rights of any third person not a Party.

 

11.6 The Parties acknowledge that for the effectiveness of this Agreement, the
Company has to publish the complete wording of this Agreement, the Balaton
Documentation and the Trustee Agreement in the Federal Gazette (Bundesanzeiger)
including German translations (the “Publication”) in compliance with sections
248a, 142, 149 German Stock Corporation Act (AktG). To the extent the
Publication is incomplete, all rights and obligations under this Agreement shall
remain unaffected. Each Party hereby waives its rights (i) to reclaim any of the
received performance, (ii) to exercise retention rights
(Zurückbehaltungsrechte), (iii) to exercise rights to refuse performance
(Leistungsverweigerungsrecht) even if the performance was made pursuant to an
ineffective agreement.

 

11.7 If the Publication pursuant to sections 248a, 142, 149 German Stock
Corporation Act (AktG) is incomplete or omitted, Balaton is entitled to publish
the Balaton Documentation and the Trustee Agreement following a period of two
weeks that has Balaton set the Company or Gentherm to arrange for the
Publication. Gentherm has to indemnify Balaton for reasonable costs for such
Publication.

 

11.8 Gentherm hereby indemnifies (leistet Schadensersatz) Balaton and each of
the shareholders of the Company against any damage as a result of an omitted,
incomplete or incorrect Publication.

 

11.9 Each of Gentherm Inc. and the Purchaser separately undertakes, for a period
of four years from the date hereof, not to make a public statement critical of
Balaton or its subsidiaries or affiliates or any of their directors, officers,
supervisory board members or employees, or take any other action likely to
damage the reputation of such persons. The Parties each acknowledge and agree
that money damages would not be a sufficient remedy for any breach (or
threatened breach) of the foregoing by Gentherm and that, in the event of any
breach or threatened breach hereof, Balaton will be entitled to seek injunctive
and other equitable relief from Gentherm Inc. or the Purchaser as the case may
be.

 

11.10 Balaton undertakes, for a period of four years from the date hereof, that
neither it nor any of its affiliated companies within the meaning of Sect. 15
AktG or its or their directors and officers, will make a public statement
critical of Gentherm Inc. or its subsidiaries or affiliates or any of their
directors, officers or employees, or take any other action likely to damage the
reputation of such persons. The Parties each acknowledge and agree that money
damages would not be a sufficient remedy for any breach (or threatened breach)
of the foregoing by Balaton and that, in the event of any breach or threatened
breach hereof, Gentherm Inc. will be entitled to seek injunctive and other
equitable relief from Balaton.

 

17

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18

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SIGNATURE PAGE – FRAMEWORK AGREEMENT

IN WITNESS WHEREOF, the Parties have caused this Framework Agreement to be
signed by a duly authorized signatory thereof, all as of the date first written
above.

 

Deutsche Balaton AG

 

/s/ Jens Jüttner

 

Gentherm Europe GmbH

 

/s/ Peter Memminger, as representative

based on a PoA

 

Gentherm Incorporated

 

/s/ Peter Memminger, as representative

based on a PoA

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Annex P.14 – Executed Trustee Agreement

[See the executed Trustee Agreement which is part of this publication.]

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Annex 2 – Draft of Registration Rights Agreement

[See the executed Registration Rights Agreement which (i) reflects an executed
version of the draft attached to this agreement as Annex 2 and (ii) is part of
this publication.]

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

Annex 3 – Draft of Settlement Agreement

[See the executed Settlement Agreement which (i) reflects an executed version of
the draft attached to this agreement as Annex 3 and (ii) is part of this
publication.]

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

Annex 4 – Draft of SPA

[See the executed SPA which (i) reflects an executed version of the draft
attached to this agreement as Annex 4 and (ii) is part of this publication.]

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

Annex 5 – Draft of Balaton Rights Agreement

[See the executed Balaton Rights Agreement which (i) reflects an executed
version of the draft attached to this agreement as Annex 5 and (ii) is part of
this publication.]

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Annex 5.5 – Notification re. Waiver

 

To: Deutsche Balaton AG, fax number 06221 6492424

 

To: Gütt Olk Feldhaus, fax number 089 24 22 411—50

 

RE: [NOTIFICATION REGARDING RECEIPT OF WAIVER]

Please be aware that on [date] we have obtained the last oustanding indications
of waiver or non-exercise of rights, from our holders of Gentherm Inc.’s Series
C Preferred Stock effectively waiving the rights such holders have to
participate in the issuance of equity by Gentherm Inc. on the same basis as the
equity issuance of Gentherm Inc. described in the Framework Agreement between
Deutsche Balaton AG, Gentherm Inc. and Gentherm Europe GmbH dated [date].

Yours faithfully,

[Signature(s) for Gentherm Inc.]

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Annex 6.2 – Press Release Gentherm

 

LOGO [g488967g99j05.jpg]

NEWS RELEASE for February 15, 2013

Contact: Allen & Caron Inc

     Jill Bertotti (investors)

     jill@allencaron.com

     Len Hall (media)

     len@allencaron.com

     (949) 474-4300

GENTHERM ANNOUNCES AGREEMENT TO ACQUIRE ALL W.E.T. SHARES

OWNED BY LARGEST MINORITY SHAREHOLDER

Clears Path to Complete Integration of W.E.T.

NORTHVILLE, MICHIGAN, U.S.A. AND HEIDELBERG, GERMANY (February 15, 2013) . . .
Gentherm Incorporated (NASDAQ-GS: THRM), the global market leader and a
developer of innovative thermal management technologies, today announced it has
reached an agreement to acquire all the shares of W.E.T. Automotive Systems AG
(W.E.T.) owned by Heidelberg, Germany-based Deutsche Balaton AG, the largest
minority shareholder of W.E.T. The acquisition of the shares by Gentherm is a
major step in completing its acquisition of W.E.T., a publicly-traded German
automotive thermal control and electronic components company. Deutsche Balaton
remains indirectly a shareholder of W.E.T. via Gentherm.

Upon completion of the transaction, Deutsche Balaton has agreed to withdraw its
legal case opposing the registration of a Domination and Profit and Loss
Transfer Agreement (DPLTA), which, under German law, would essentially allow
Gentherm and W.E.T. to be managed as one operational entity.

Gentherm initially acquired a majority interest in W.E.T. in May 2011 to create
a larger and more global company with a broad range of thermal products and
manufacturing capabilities. “The purchase of Deutsche Balaton’s shares will
enable Gentherm to more completely achieve the synergies inherent in the
combined companies,” noted Gentherm President and CEO Daniel R. Coker.

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The transaction involves the issuance of 3.3 million Gentherm common shares and
payment of approximately $7.5 million in cash in exchange for Deutsche Balaton’s
442,253 shares in W.E.T. (or 13.8 percent of the total outstanding W.E.T.
shares). For a limited time, the holders of the Gentherm Series C Preferred
Stock have the right to purchase up to 30 percent, in the aggregate, of any
common share offering. Such holders have all agreed to waive those rights in
connection with the stock issuance to Balaton described above. For purposes of
the transaction, the Gentherm shares are valued at $13.00 per share, yielding an
€85 per share valuation of the W.E.T. shares. Another minority shareholder in
W.E.T. has agreed to simultaneously sell 23,044 W.E.T. shares to Gentherm for
€85 per share in cash. The acquisition of Deutsche Balaton’s shares and the
shares held by such other minority shareholder will bring the total stock of
W.E.T. held by Gentherm to 2,897,360 shares, representing approximately 90
percent of W.E.T.’s outstanding shares. Closing of the transaction is expected
to occur within a few days.

“The share purchase will allow Gentherm and W.E.T. to continue the process of
combining into one entity, integrating our broad array of capabilities and
fulfilling the promise of the acquisition we have always envisioned,” Coker
said. “Upon the registration of a DPLTA, we will be able to accelerate this
process and better serve our customers and generate greater shareholder value
without the ongoing distraction of legal issues associated with the combination
of the two companies.”

“Upon closing of the transaction, Deutsche Balaton, which has proven to be a
savvy investor in W.E.T., having held its position for 10 years, will be a
significant European investor in Gentherm,” added Coker. “This fits well with
our strategy to expand our global shareholder base to include investors located
outside the U.S., and we are pleased to have Deutsche Balaton as an equity
partner.”

“We have always believed in W.E.T. and recognized it as a very valuable asset in
our portfolio. We are convinced that the combination of Gentherm and W.E.T. will
create an extraordinary value opportunity and are enthusiastic about being able
to participate,” said Thomas Zours, Chairman of the Supervisory Board at
Deutsche Balaton.

In connection with the share purchase from Deutsche Balaton, Gentherm has agreed
to offer to acquire, upon registration of the DPLTA, the remaining shares of
W.E.T. held by other minority shareholders. Such remaining shares represent
approximately 10 percent of the total outstanding W.E.T. shares. Gentherm will
offer a total payment of €85 per W.E.T. share, or an aggregate of approximately
$37 million in cash. Further details about the technical implementation of such
offer will be announced shortly after the registration of the DPLTA.

Gentherm and W.E.T. intend to pursue swift registration of the DPLTAafter the
transaction is consummated.

About Gentherm

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Gentherm Incorporated (NASDAQ-GS:THRM) is a global developer and marketer of
innovative thermal management technologies for a broad range of heating and
cooling and temperature control applications. Automotive products include
actively heated and cooled seat systems and cup holders, heated and ventilated
seat systems, thermal storage bins, heated seat and steering wheel systems,
cable systems and other electronic devices. The Company’s advanced technology
team is developing more efficient materials for thermoelectrics and systems for
waste heat recovery and electrical power generation for the automotive market
that may have far-reaching applications for consumer products as well as
industrial and technology markets. Gentherm has more than 6,000 employees in
facilities in the U.S., Germany, Mexico, China, Canada, Japan, England, Korea,
Malta, Hungary and the Ukraine. For more information, go to www.gentherm.com.

Certain matters discussed in this release are forward-looking statements that
involve risks and uncertainties, and actual results may be different. Important
factors that could cause the Company’s actual results to differ materially from
its expectations in this release are risks that sales may not significantly
increase, additional financing, if necessary, may not be available, new
competitors may arise and adverse conditions in the automotive industry may
negatively affect its results. The liquidity and trading price of its common
stock may be negatively affected by these and other factors. Please also refer
to Gentherm’s Securities and Exchange Commission (SEC) filings and reports,
including, but not limited to, its Form 10-Q for the period ended September 30,
2012, and its Form 10-K for the year ended December 31, 2011; all of which are
available free of charge on the SEC’s website at www.sec.gov. Gentherm expressly
disclaims any intent or obligation to update any forward-looking statements.

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