AMERICAN STANDARD COMPANIES INC (Form: 8-K, Received: 07/20/2007 14:53:23)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 16, 2007

AMERICAN STANDARD COMPANIES INC.

(Exact name of registrant as specified in its charter)

Delaware

1-11415

13-3465896

(State or other jurisdiction of

incorporation or organization)

(Commission File No.)

(I.R.S. Employer

Identification No.)


One Centennial Avenue, P.O. Box 6820, Piscataway, NJ		08855-6820
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (732) 980-6000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:

¨	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Agreements with WABCO Holdings Inc.

On July 16, 2007, American Standard Companies Inc. (“American Standard”) entered into definitive agreements with WABCO Holdings Inc. (“WABCO”) that, among other things, set forth the terms and conditions of the separation of WABCO from American Standard and provide a framework for American Standard’s relationship with WABCO after the separation. These agreements govern the relationship between WABCO and American Standard subsequent to the completion of the separation and provide for the allocation between WABCO and American Standard of American Standard’s assets, liabilities and obligations attributable to periods prior to the separation. In addition to the Separation and Distribution Agreement, which contains many of the key provisions related to the spin-off of WABCO and the distribution of WABCO’s common shares to American Standard’s shareholders, the parties also entered into, on July 16, 2007, a Tax Sharing Agreement, a Transition Services Agreement, and Employee Matters Agreement and an Indemnification and Cooperation Agreement. A summary of certain important features of the material agreements, which are referenced below, can be found in the section entitled “Certain Relationships and Related Party Transactions” in WABCO’s Information Statement, which was attached as Exhibit 99.1 to WABCO’s Form 8-K filed with the Securities and Exchange Commission on July 20, 2007 (the “Information Statement”), and is incorporated herein by reference.

Separation and Distribution Agreement

On July 16, 2007, American Standard entered into a Separation and Distribution Agreement with WABCO that sets forth American Standard’s agreements with WABCO regarding principal transactions necessary to separate WABCO from American Standard. This agreement also sets forth the other agreements that govern certain aspects of American Standard’s relationship with WABCO after the completion of the separation from American Standard and provides for the allocation of certain assets to be transferred, liabilities to be assumed and contracts to be assigned to WABCO and American Standard as part of the separation. The description of the Separation and Distribution Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Separation and Distribution Agreement attached hereto as Exhibit 2.1.

Tax Sharing Agreement

On July 16, 2007, American Standard entered into a Tax Sharing Agreement with WABCO that governs the parties’ respective rights, responsibilities and obligations after the distribution with respect to taxes, including ordinary course of business taxes and taxes, if any, incurred as a result of any failure of the distribution of all of the common shares of WABCO to qualify as a tax-free distribution for U.S. federal income tax purposes within the meaning of Section 355 of the Internal Revenue Code of 1986, as amended. The description of the Tax Sharing Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Tax Sharing Agreement attached hereto as Exhibit 10.1.

Transition Services Agreement

On July 16, 2007, American Standard entered into a Transition Services Agreement with WABCO that governs the orderly transition of WABCO becoming an independent company. Under the Transition Services Agreement, American Standard has agreed to provide WABCO with various services, including services relating to human resources, payroll, treasury and risk management, environmental technology, tax compliance, telecommunications services and information technology services. The cost of each transition services will generally be on the same payment terms and calculated using the same cost allocation methodologies for the particular service as those associated with the costs on WABCO’s historical financial statements. The description of the Transition Services Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Transition Services Agreement attached hereto as Exhibit 10.2.

Employee Matters Agreement

On July 16, 2007, American Standard entered into an Employee Matters Agreement with WABCO that allocates liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the separation, including the treatment of outstanding incentive awards and certain retirement and welfare benefit obligations, both in and outside of the United States. The description of the Employee Matters Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Employee Matters Agreement attached hereto as Exhibit 10.3.

Indemnification and Cooperation Agreement

On July 16, 2007, American Standard, WABCO, and certain of their subsidiaries entered into an Indemnification and Cooperation Agreement. Pursuant to this agreement, American Standard Europe BVBA, or ASE, a subsidiary of WABCO, has agreed to be responsible for and to indemnify American Standard and its subsidiaries (including certain subsidiaries formerly engaged in the Bath and Kitchen business) and their respective affiliates against any fines related to the European Commission’s investigation, as outlined in a Statement of Objections received by American Standard on March 28, 2007, into possible infringement of European Union competition regulations. The description of the Indemnification and Cooperation Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Indemnification and Cooperation Agreement attached hereto as Exhibit 10.4.

Item 9.01

Financial Statements and Exhibits.

The following exhibits are filed or furnished as part of this Report to the extent described in Item 1.01.

(d)	Exhibits


2.1		Separation and Distribution Agreement, dated as of July 16, 2007, by and between American Standard Companies Inc. and WABCO Holdings Inc.

10.1		Tax Sharing Agreement, dated as of July 16, 2007, by and among American Standard Companies Inc. and certain of its subsidiaries and WABCO Holdings Inc. and certain of its subsidiaries.

10.2		Transition Services Agreement, dated as of July 16, 2007, by and between American Standard Companies Inc. and WABCO Holdings Inc.

10.3		Employee Matters Agreement, dated as of July 16, 2007, by and between American Standard Companies Inc. and WABCO Holdings Inc.

10.4		Indemnification and Cooperation Agreement, dated as of July 16, 2007, by and among American Standard Companies Inc. and certain of its subsidiaries and WABCO Holdings Inc. and certain of its subsidiaries.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


AMERICAN STANDARD COMPANIES INC.

By:		/s/ Mary Elizabeth Gustafsson
Name:		Mary Elizabeth Gustafsson
Title:		Senior Vice President, General Counsel and Secretary

DATE: July 20, 2007

Exhibit 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

by and between

AMERICAN STANDARD COMPANIES INC.

and

WABCO HOLDINGS INC.

Dated as of July 16, 2007

TABLE OF CONTENTS


		Page
ARTICLE I DEFINITIONS AND INTERPRETATION		2
Section 1.1.	General	2
Section 1.2.	References; Interpretation	19
Section 1.3.	Effective Time	19
Section 1.4.	Other Matters	19
ARTICLE II THE SEPARATION		20
Section 2.1.	General	20
Section 2.2.	Transfer of Assets	20
Section 2.3.	Assumption and Satisfaction of Liabilities	20
Section 2.4.	Intercompany Accounts	21
Section 2.5.	Bank Accounts; Cash Balances	21
Section 2.6.	Limitation of Liability	22
Section 2.7.	Transfers Not Effected On or Prior to the Effective Time; Transfers Deemed Effective as of the Effective Time	23
Section 2.8.	Conveyancing and Assumption Instruments	25
Section 2.9.	Shared Contracts	25
Section 2.10.	Further Assurances	26
Section 2.11.	Novation of Liabilities; Consents	27
Section 2.12.	Guarantees and Letters of Credit	27
Section 2.13.	Disclaimer of Representations and Warranties	29
ARTICLE III CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION		30
Section 3.1.	ASD Reorganization	30
Section 3.2.	Certificate of Incorporation; Bylaws; Rights Plan	30
Section 3.3.	Directors	30
Section 3.4.	Resignations	30
Section 3.5.	Ancillary Agreements	30
ARTICLE IV THE DISTRIBUTION		30
Section 4.1.	Stock Dividend to ASD; Distribution	30
Section 4.2.	Fractional Shares	31
Section 4.3.	Actions in Connection with the Distribution	31
Section 4.4.	Sole Discretion of ASD	32
Section 4.5.	Conditions to Distribution	32
ARTICLE V CERTAIN COVENANTS		34
Section 5.1.	No Solicit	34
Section 5.2.	Legal Names and Other Parties’ Trademark	34
Section 5.3.	Auditors and Audits; Annual and Quarterly Financial Statements and Accounting	35
Section 5.4.	No Restrictions on Corporate Opportunities	37
ARTICLE VI RELEASES AND INDEMNIFICATION		38
Section 6.1.	Release of Pre-Distribution Claims	38
Section 6.2.	Indemnification by ASD	40
Section 6.3.	Indemnification by WABCO	40

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Section 6.4.	Procedures for Indemnification	40
Section 6.5.	Indemnification Payments	42
Section 6.6.	Additional Matters; Survival of Indemnities	42
ARTICLE VII CONFIDENTIALITY; ACCESS TO INFORMATION		43
Section 7.1.	Provision of Corporate Records	43
Section 7.2.	Access to Information	43
Section 7.3.	Witness Services	44
Section 7.4.	Confidentiality	44
Section 7.5.	Privileged Matters	45
Section 7.6.	Ownership of Information	47
Section 7.7.	Other Agreements	47
ARTICLE VIII DISPUTE RESOLUTION		47
Section 8.1.	Negotiation	47
Section 8.2.	Arbitration	48
Section 8.3.	Selection of Arbitrator(s)	48
Section 8.4.	Arbitration Procedures	49
Section 8.5.	Discovery	49
Section 8.6.	Confidentiality of Proceedings	49
Section 8.7.	Pre-Hearing Procedure and Disposition	50
Section 8.8.	Continuity of Service and Performance	50
Section 8.9.	Awards	50
Section 8.10.	Costs	50
Section 8.11.	Adherence to Time Limits	50
Section 8.12.	Limitation on Actions	51
ARTICLE IX INSURANCE		51
Section 9.1.	Policies and Allocation of Related Rights and Obligations	51
Section 9.2.	Third Party Shared Policies	51
Section 9.3.	Administration of Third Party Shared Policies; Other Matters	52
Section 9.4.	Agreement for Waiver of Conflict and Shared Defense	54
Section 9.5.	Cooperation	54
Section 9.6.	Miscellaneous	54
ARTICLE X PROVISIONS RELATING TO B&K SALE		54
Section 10.1.	B&K Sale	54
Section 10.2.	Certain Parameters	54
Section 10.3.	B&K Sale Proceeds	54
ARTICLE XI MISCELLANEOUS		55
Section 11.1.	Complete Agreement; Construction	55
Section 11.2.	Ancillary Agreements	55
Section 11.3.	Counterparts	55
Section 11.4.	Survival of Agreements	55
Section 11.5.	Expenses	55
Section 11.6.	Notices	56
Section 11.7.	Waivers	56
Section 11.8.	Amendments	56
Section 11.9.	Assignment	57
Section 11.10.	Termination, Etc.	57

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Section 11.11.	Payment Terms	57
Section 11.12.	No Circumvention	57
Section 11.13.	Subsidiaries	58
Section 11.14.	Third Party Beneficiaries	58
Section 11.15.	Title and Headings	58
Section 11.16.	Exhibits and Schedules	58
Section 11.17.	Closing	58
Section 11.18.	Governing Law	58
Section 11.19.	Consent to Jurisdiction	58
Section 11.20.	Specific Performance	59
Section 11.21.	Waiver of Jury Trial	59
Section 11.22.	Severability	59
Section 11.23.	Construction	59
Section 11.24.	Authorization	59

EXHIBITS

Exhibit A – Employee Matters Agreement

Exhibit B – Indemnification and Cooperation Agreement

Exhibit C – Tax Sharing Agreement

Exhibit D – Transition Services Agreement

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INDEX OF DEFINED TERMS


Term		Page
2007 Internal Control Audit and Management Assessments		9
Action		2
Affiliate		2
Agent		2
Agreement		1, 2
Agreement Disputes		2, 48
Amended Financial Reports		2, 37
Ancillary Agreements		2
ASD		1, 2
ASD Accounts		2, 22
ASD Common Stock		3
ASD Disclosure		3
ASD Employee		3
ASD Group		3
ASD Indemnitees		3
Assets		3
Audited Party		4, 37
B&K Business		4
B&K Sale		5, 55
B&K Sale Agreement		5, 55
B&K Sale Proceeds		5, 56
Business		5
Business Day		5
Business Entity		5
Claims Administration		5
Code		1, 5
Commission		5
Confidential Business Information		5
Confidential Information		5
Confidential Operational Information		5
Consents		6
Contract		6
control		2
Conveyancing and Assumption Instruments		6
corporate opportunities		39
CPR		6, 49
Dispute Notice		6, 49
Distribution		6
Distribution Date		6
Distribution Disclosure Documents		6
Effective Time		7
Employee Matters Agreement		7
Exchange Act		7

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Form 10		7
Form 10-K		7
Governmental Approvals		7
Governmental Entity		7
Group		7
Guaranty Release		7, 29
HVAC Business		7
Indebtedness		7
Indemnifiable Loss		7
Indemnifiable Losses		7
Indemnifying Party		8, 42
Indemnitee		8, 41
Indemnity and Cooperation Agreement		8
Information		8
Information Statement		8
Insurance Administration		8
Insurance Proceeds		8
Insured Claims		9
Intellectual Property		9
Intercompany Accounts		9
Internal Contributions		9
Internal Control Audit and Management Assessments		37
Internal Distributions		9
Law		9
Liabilities		9
Liable Party		10, 28
linked		22
New York Courts		10, 60
NYSE		10
Other Parties’ Auditors		10, 37
Other Party		10, 28
Other Party Marks		10, 35
Parties		1
Party		1, 10
Person		10
Plan		10
Policies		10
Pre-Separation Disclosure		10
Prime Rate		10
Record Date		11
Records		11
Remainco Assets		11
Remainco Balance Sheet		12
Remainco Business		12
Remainco Liabilities		12
Reorganization		1, 14

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Reorganization Documents		14
Rules		14, 49
Securities Act		14
Security Interest		14
Separation		1, 14
Shared Contracts		14
Shared Contractual Liabilities		14
Software		14
Subsidiary		15
Tax		15
Tax Return		15
Tax SharingAgreement		15
Third Party Claim		15, 42
Third Party Shared Policies		15
Trademarks		15
Transfer		15, 21
Transition Services Agreement		15
VCS Assets		15
VCS Business		16
VCS Contracts		16
VCS Liabilities		17
WABCO		1, 19
WABCO Accounts		19, 22
WABCO Balance Sheet		19
WABCO Common Stock		1, 19
WABCO Disclosure		19
WABCO Employee		19
WABCO Group		19
WABCO Indemnitees		20
Wholly Owned Subsidiary		20

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SEPARATION AND DISTRIBUTION AGREEMENT

THIS SEPARATION AND DISTRIBUTION AGREEMENT (this “ Agreement ”), is entered into as of July 16, 2007, by and between American Standard Companies Inc., a Delaware corporation (“ ASD ”), and WABCO Holdings Inc., a Delaware corporation ( WABCO ”) (each a “ Party ” and together, the “ Parties ”).

R E C I T A L S:

WHEREAS, ASD, acting through its direct and indirect Subsidiaries, currently conducts a number of businesses, including (i) the VCS Business, (ii) the HVAC Business and (iii) the B&K Business;

WHEREAS, the Board of Directors of ASD has determined that it is appropriate, desirable and in the best interests of ASD and its stockholders to separate ASD into three separate companies: (i) one comprising the VCS Business, which shall be owned and conducted, directly or indirectly, by WABCO, all of the common stock of which is intended to be distributed to ASD shareholders, (ii) one comprising the HVAC Business, which shall continue to be owned and conducted, directly or indirectly, by ASD and (iii) one comprising the B&K Business, which ASD currently intends to sell to one or more third parties;

WHEREAS, in order to effect such separation, the Board of Directors of ASD has determined that it is appropriate, desirable and in the best interests of ASD and its stockholders: (i) for ASD and its Subsdiaries to enter into a series of transactions whereby ASD and its Subsidiaries will be reorganized such that (A) ASD and/or one or more other members of the ASD Group will own all of the Remainco Assets and assume (or retain) all of the Remainco Liabilities, and (B) WABCO and/or one or more other members of the WABCO Group will own all of the VCS Assets and assume (or retain) all of the VCS Liabilities (the transactions referred to in clauses (A) and (B) being referred to herein as the “ Reorganization ”); and thereafter (ii) for ASD to distribute to the holders of ASD Common Stock on such record date as may be established by the Board of Directors of ASD on a pro rata basis (in each case without consideration being paid by such stockholders) all of the issued and outstanding shares of common stock, par value $0.01 per share, of WABCO (the “ WABCO Common Stock ”) (such transactions, as may be amended or modified from time to time in accordance with the terms and subject to the conditions of this Agreement, the “ Separation ”);

WHEREAS, ASD and WABCO have determined that it is necessary and desirable, on or prior to the Effective Time, to allocate, transfer or assign to the WABCO Group the VCS Assets and VCS Liabilities, and to allocate, transfer or assign to the ASD Group the Remainco Assets and Remainco Liabilities;

WHEREAS, the Parties intend that the Internal Contributions, the Internal Distributions and the Distribution generally will qualify as tax-free for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended (the “ Code ”), and that this Agreement is intended to be, and is hereby adopted as, a plan of reorganization under Section 368 of the Code;

WHEREAS, the Parties intend in this Agreement to set forth the principal arrangements between them with respect to the Separation and Distribution and that certain other agreements will govern certain other matters following the Effective Time.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1. General . As used in this Agreement, the following capitalized terms shall have the following meanings:

(1) “ Action ” shall mean any demand, action, claim, charge, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation by or before any Governmental Entity or any arbitration or mediation tribunal.

(2) “ Affiliate ” shall mean, when used with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purposes of this definition and Section 1.1(92) , “ control ”, when used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by Contract or otherwise. After the Distribution, ASD and WABCO shall not be deemed to be under common control for purposes hereof due solely to the fact that ASD and WABCO have common stockholders.

(3) “ Agent ” shall mean The Bank of New York.

(4) “ Agreement ” shall have the meaning set forth in the preamble hereof.

(5) “ Agreement Disputes ” shall have the meaning set forth in Section 8.1 .

(6) “ Amended Financial Reports ” shall have the meaning set forth in Section 5.3(b) .

(7) “ Ancillary Agreements ” shall mean all of the written Contracts, instruments, assignments or other arrangements (other than this Agreement or the B&K Sale Agreement (and other documents contemplated thereby)) entered into in connection with the transactions contemplated hereby, including the Conveyancing and Assumption Instruments, the Tax Sharing Agreement, the Transition Services Agreement, the Employee Matters Agreement and the Indemnity and Cooperation Agreement.

(8) “ ASD ” shall have the meaning set forth in the preamble hereof.

(9) “ ASD Accounts ” shall have the meaning set forth in Section 2.5(a) .

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(10) “ ASD Common Stock ” shall mean the issued and outstanding shares of common stock, par value $0.01 per share, of ASD.

(11) “ ASD Disclosure ” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) filed with or furnished to

(A) the Commission,

(B) any other Governmental Entity, or

on or after the Effective Time by or on behalf of any member of the ASD Group in connection with the registration, sale or distribution of securities or disclosure related thereto (including periodic disclosure obligations).

(12) “ ASD Employee ” shall have the meaning set forth in the Employee Matters Agreement.

(13) “ ASD Group ” shall mean (i) ASD and each of its Affiliates immediately following the Effective Time and (ii) each Person that is or becomes an Affiliate of ASD at or after the Effective Time, in each case, other than the members of the WABCO Group.

(14) “ ASD Indemnitees ” shall mean each member of the ASD Group and each of their Affiliates, and each of their respective directors, officers, employees and agents and each of the heirs, executors, successors and assigns of any of the foregoing, except the WABCO Indemnitees.

(15) “ Assets ” shall mean assets, properties, claims and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the Records or financial statements of any Person, including the following:

(i) all accounting and other legal and business books, records, ledgers and files, whether printed, electronic or written;

(ii) all computers and other electronic data processing and communications equipment, fixtures, machinery, equipment, furniture, office equipment, automobiles, trucks and other transportation equipment, special and general tools, test devices, prototypes and models and other tangible personal property;

(iii) all inventories of products, goods, materials, parts, raw materials and supplies;

(iv) all interests in real property of whatever nature, including easements, whether as owner, mortgagee or holder of a Security Interest in real property, lessor, sublessor, lessee, sublessee or otherwise;

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(v) all interests in any capital stock or other equity interests of any Subsidiary or any other Person, all bonds, notes, debentures or other securities issued by any Subsidiary or any other Person, all loans, advances or other extensions of credit or capital contributions to any Subsidiary or any other Person and all other investments in securities of any Person;

(vi) all Contracts and any rights or claims (whether accrued or contingent) arising under any Contracts;

(vii) all deposits, letters of credit and performance and surety bonds;

(viii) all written (including in electronic form) technical information, data, specifications, research and development information, engineering drawings and specifications, operating and maintenance manuals, and materials and analyses prepared by consultants and other third parties;

(ix) all Intellectual Property;

(x) all Software;

(xi) all cost information, sales and pricing data, customer prospect lists, supplier records, customer and supplier lists, customer and vendor data, correspondence and lists, product data and literature, artwork, design, development and business process files and data, vendor and customer drawings, specifications, quality records and reports and other books, records, studies, surveys, reports, plans and documents;

(xii) all prepaid expenses, trade accounts and other accounts and notes receivables;

(xiii) all rights under Contracts, all claims or rights against any Person, whether sounding in tort, contract or otherwise, whether accrued or contingent;

(xiv) all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution;

(xv) all licenses, permits, approvals and authorizations which have been issued by any Governmental Entity;

(xvi) all cash or cash equivalents, bank accounts, brokerage accounts, lock boxes and other deposit arrangements; and

(xvii) all interest rate, currency, commodity or other swap, collar, cap or other hedging or similar Contracts or arrangements.

(16) “ Audited Party ” shall have the meaning set forth in Section 5.3(a) .

(17) “ B&K Business ” means the business and operations of the Bath and Kitchen segment of ASD as described in the

Form 10-K.

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(18) “ B&K Sale ” shall have the meaning set forth in Section 10.1 .

(19) “ B&K Sale Agreement ” shall have the meaning set forth in Section 10.2 .

(20) “ B&K Sale Proceeds ” shall have the meaning set forth in Section 10.3 .

(21) “ Business ” shall mean the VCS Business or the Remainco Business, as applicable.

(22) “ Business Day ” means any day that is not a Saturday, a Sunday or any other day on which banks are required or authorized by Law to be closed in New York, New York or Brussels, Belgium.

(23) “ Business Entity ” shall mean any corporation, partnership, trust, limited liability company or other incorporated or unincorporated organization or other entity which may legally hold title to Assets.

(24) “ Claims Administration ” shall mean the administration of claims made under the Third Party Shared Policies, including the reporting of claims to the unaffiliated, third-party insurance carriers that issued the Third Party Shared Policies, management and defense of such claims, negotiating the resolution of such claims, and providing for appropriate releases upon settlement of such claims.

(25) “ Code ” shall have the meaning set forth in the recitals hereto.

(26) “ Commission ” shall mean the United States Securities and Exchange Commission or any successor agency thereto.

(27) “ Confidential Information ” shall mean business, operations or other information, data or material concerning a Party and/or its Affiliates which, prior to or following the Effective Time, has been disclosed by a Party or its Affiliates to the other Party or its Affiliates, in written, oral (including by recording), electronic, or visual form to, or otherwise has come into the possession of, the other, including pursuant to the access provisions of Section 7.1 or Section 7.2 or any other provision of this Agreement or any Ancillary Agreement (except to the extent that such information can be shown to have been (i) in the public domain through no action of such Party or its Affiliates or (ii) lawfully acquired from other sources by such Party or its Affiliates to which it was furnished; provided , however , in the case of clause (ii) that, to the furnished Party’s knowledge, such sources did not provide such information in breach of any confidentiality or fiduciary obligations).

(28) “ Consents ” shall mean any consents, waivers or approvals from, or notification requirements to, any Person other than a Governmental Entity.

(29) “ Contract ” shall mean any contract, obligation, indenture, agreement, lease, purchase order, commitment, permit, license, note, bond, mortgage, arrangement or undertaking (whether written or oral and whether express or implied) that is legally binding on any Person or any part of its property under applicable Law, but excluding this Agreement and any Ancillary Agreement save as otherwise expressly provided in this Agreement or any Ancillary Agreement.

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(30) “ Continuing Arrangements ” shall mean those arrangements set forth on Schedule 1.1(30) and such other commercial arrangements between the Parties or their Affiliates that are intended to survive and continue following the Effective Time.

(31) “ Contribution ” shall mean the contribution by ASD of all of the outstanding stock of WABCO Group Inc. and WABCO Group International Inc. to WABCO in exchange for WABCO Common Stock.

(32) “ Conveyancing and Assumption Instruments ” shall mean, collectively, the various Contracts and other documents entered into and to be entered into to effect the transfer of Assets and the assumption of Liabilities in the manner contemplated by this Agreement or otherwise relating to, arising out of or resulting from the transactions contemplated by this Agreement (other than the Ancillary Agreements), each of which shall be in such form and dated as of such date as the Parties shall reasonably agree.

(33) “ CPR ” shall have the meaning set forth in Section 8.3 .

(34) “ Dispute Notice ” shall have the meaning set forth in Section 8.1(a) .

(35) “ Distribution ” shall mean the distribution by ASD of all of the issued and outstanding shares of WABCO Common Stock to holders of record of shares of ASD Common Stock as of the Record Date on the basis of one share of WABCO Common Stock (which includes a related preferred stock purchase right) for every three issued and outstanding shares of ASD Common Stock.

(36) “ Distribution Date ” shall mean July 31, 2007, or such later date as shall be determined by the Board of Directors of ASD to be the date on which the Distribution shall occur.

(37) “ Distribution Disclosure Documents ” shall mean the Form 10 and all exhibits thereto (including the Information Statement), the current report on Form 8-K attaching the final form of Information Statement and the registration statement on Form S-8 related to securities to be offered under WABCO’s employee benefit plans, in each case as filed by WABCO with the Commission in connection with the Distribution.

(38) “ Effective Time ” shall mean 11:59 p.m., New York City, New York time, on July 31, 2007.

(39) “ Employee Matters Agreement ” shall mean the Employee Matters Agreement by and between ASD and WABCO, dated as of the date hereof and substantially in the form attached as Exhibit A hereto.

(40) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time that reference is made thereto.

(41) “ Form 10 ” shall mean the registration statement on Form 10 filed by WABCO with the Commission in connection with the Distribution and all amendments thereto.

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(42) “ Form 10-K ” shall mean the Annual Report on Form 10-K for the fiscal year ended December 31, 2006 filed by ASD and all amendments thereto.

(43) “ Governmental Approvals ” shall mean any notices or reports to be submitted to, or other filings to be made with, or any consents, registrations, approvals, permits or authorizations to be obtained from, any Governmental Entity.

(44) “ Governmental Entity ” shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission, department, board, bureau or court, whether domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any official thereof.

(45) “ Group ” shall mean either the WABCO Group or the ASD Group.

(46) “ Guaranty Release ” shall have the meaning set forth in Section 2.12(b) .

(47) “ HVAC Business ” means the business and operations of the Air Conditioning Systems and Services Segment of ASD as described in the Form 10-K.

(48) “ Indebtedness ” shall mean (i) any indebtedness for borrowed money or the deferred purchase price of property as evidenced by a note, bonds or other instruments, (ii) obligations as lessee under capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance, lien or charge of any kind existing on any asset owned or held by any Person, whether or not such Person has assumed or become liable for the obligations secured thereby, (iv) any obligation under any interest rate swap agreement, (v) accounts payable, (vi) reimbursement obligations with respect to surety and performance bonds or letters of credit, and (vii) obligations under direct or indirect guarantees of (including obligations, contingent or otherwise, to assure a creditor against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i), (ii), (iii), (iv), (v) and (vi) above.

(49) “ Indemnifiable Loss ” and “ Indemnifiable Losses ” shall mean any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including costs and expenses provided for in Section 11.5(c) and the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder), excluding special, consequential, indirect or punitive damages (other than special, consequential, indirect and/or punitive damages awarded to any third party against an indemnified party).

(50) “ Indemnifying Party ” shall have the meaning set forth in Section 6.4(b) .

(51) “ Indemnitee ” shall have the meaning set forth in Section 6.4(b) .

(52) “ Indemnity and Cooperation Agreement ” shall mean the Indemnity and Cooperation Agreement by and between ASD and WABCO, dated as of the date hereof and substantially in the form attached as Exhibit B hereto.

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(53) “ Information ” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), communications and materials otherwise related to or made or prepared in connection with or in preparation for any legal proceeding, and other technical, financial, employee or business information or data.

(54) “ Information Statement ” shall mean the Information Statement attached as an exhibit to the Form 10 sent to the holders of shares of ASD Common Stock in connection with the Distribution, including any amendment or supplement thereto.

(55) “ Insurance Administration ” shall mean, with respect to each Third Party Shared Policy: (i) the accounting for premiums, retrospectively-rated premiums, defense costs, indemnity payments, deductibles and retentions, as appropriate, under the terms and conditions of such Third Party Shared Policy; (ii) the reporting to the relevant unaffiliated, third-party insurer that issues such Third Party Shared Policy of any losses or claims which may be covered by such Third Party Shared Policy; and (iii) the distribution of Insurance Proceeds related to such Third Party Shared Policy, subject to the terms of ARTICLE IX .

(56) “ Insurance Proceeds ” shall mean those monies (i) received by an insured from an unaffiliated third-party insurer under any Third Party Shared Policy, or (ii) paid by such third-party insurer on behalf of an insured under any Third Party Shared Policy, in either case net of any applicable premium adjustment, retrospectively-rated premium, deductible, retention, or cost of reserve paid or held by or for the benefit of such insured.

(57) “ Insured Claims ” shall mean those Liabilities that, individually or in the aggregate, are covered within the terms and conditions of any of the Third Party Shared Policies, whether or not subject to deductibles, co-insurance, uncollectibility or retrospectively-rated premium adjustments.

(58) “ Intellectual Property ” shall mean all intellectual property and industrial property rights of any kind or nature, including all United States and foreign (i) patents, patent applications, patent disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions and extensions thereof, (ii) Trademarks, (iii) copyrights and copyrightable subject matter, whether statutory or common law, registered or unregistered and published or unpublished, (iv) rights of publicity, (v) moral rights and rights of attribution and integrity, (vi) rights in Software, (vii) trade secrets and all other confidential and proprietary information, know-how, inventions, improvements, processes, formulae, models and methodologies, (viii) rights to personal information, (ix) telephone numbers and internet protocol addresses, (x) applications and registrations for the foregoing, and (xi) rights and remedies against past, present, and future infringement, misappropriation, or other violation of the foregoing.

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(59) “ Intercompany Accounts ” shall mean any receivable, payable or loan between any member of the ASD Group, on the one hand, and any member of the WABCO Group, on the other hand that is reflected in the Records of the relevant members of the ASD Group and the WABCO Group, except for any such receivable, payable or loan that arises pursuant to this Agreement or any Ancillary Agreement or Continuing Arrangement.

(60) “ Internal Contributions ” shall mean each of (i) the contribution by A&G Bermuda L.P. of its assets relating to the VCS Business to Beta Bermuda L.P., (ii) the contribution by Trane Brazil of its assets relating to the VCS Business to Beta Brazil, (iii) the contribution by American Standard International Inc. of all of the equity of its subsidiaries engaged in the VCS Business to Beta (ASII) Spinco and (iv) the contribution by American Standard Inc. of all of the equity of its subsidiaries engaged in the VCS Business to Beta (ASI) Spinco.

(61) “ Internal Control Audit and Management Assessments ” shall have the meaning set forth in Section 5.3(a) .

(62) “ Internal Distributions ” shall mean each of (i) the distribution of all of the equity of Beta Bermuda L.P. and Beta LLC by A&G Bermuda L.P. to American Standard Europe Holdings Inc. and American Standard International L.L.C., (ii) the distribution of all of the equity of Beta Brazil by Wabco Canada L.P. to Wabco Holding Co. ULC, (iii) the distribution of all of the equity of Beta (ASII) Spinco by American Standard International Inc. to ASD and (iv) the distribution of all of the equity of Beta (ASI) Spinco by American Standard Inc. to ASD.

(63) “ Law ” shall mean any United States or non-United States federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

(64) “ Liabilities ” shall mean any and all debts, liabilities, and obligations, whether accrued or fixed, known or unknown, absolute or contingent, matured or unmatured, reserved or unreserved, or determined or determinable of any kind or nature whatsoever, including those arising under any Law or Action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity, and those arising under any Contract or any fines, damages or equitable relief which may be imposed in connection with any of the foregoing and including all costs and expenses related thereto.

(65) “ Liable Party ” shall have the meaning set forth in Section 2.11(b) .

(66) “ New York Courts ” shall have the meaning set forth in Section 11.19 .

(67) “ NYSE ” shall mean the New York Stock Exchange.

(68) “ Other Parties’ Auditors ” shall have the meaning set forth in Section 5.3(a)(2) .

(69) “ Other Party ” shall have the meaning set forth in Section 2.11(a) .

(70) “ Other Party Marks ” shall have the meaning set forth in Section 5.2(a) .

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(71) “ Party ” shall have the meaning set forth in the preamble hereof.

(72) “ Person ” shall mean any natural person, firm, individual, corporation, business trust, joint venture, association, company, limited liability company, partnership or other organization or entity, whether incorporated or unincorporated, or any Governmental Entity.

(73) “ Plan ” shall have the meaning set forth in the Employee Matters Agreement.

(74) “ Policies ” shall mean insurance policies and insurance Contracts of any kind (other than life and benefits policies or Contracts), including primary, excess and umbrella policies, comprehensive general liability policies, director and officer liability, fiduciary liability, automobile, aircraft, property and casualty, business interruption, workers’ compensation and employee dishonesty insurance policies, bonds and self-insurance and captive insurance company arrangements, together with the rights, benefits and privileges thereunder.

(75) “ Pre-Separation Disclosure ” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) filed with or furnished to

(A) the Commission,

(B) any other Governmental Entity, or

prior to the Effective Time by ASD, WABCO, or any of their respective Affiliates, in connection with the registration, sale, or distribution of securities or disclosure related thereto (including periodic disclosure obligations).

(76) “ Prime Rate ” shall mean the rate per annum publicly announced by JPMorgan Chase Bank (or successor thereto) from time to time as its prime rate in effect at its principal office in New York City. For purposes of this Agreement, any change in the Prime Rate shall be effective on the date such change in the Prime Rate is publicly announced as effective.

(77) “ Record Date ” shall mean the date to be determined by the Board of Directors of ASD as the record date for the Distribution.

(78) “ Records ” shall mean any Contracts, documents, books, records or files.

(79) “ Remainco Assets ” shall mean:

(i) the ownership interests (to the extent held by ASD, WABCO or any of their respective Affiliates immediately prior to the Effective Time) in each member of the ASD Group;

(ii) all Contracts to which ASD, WABCO or any of their Affiliates is a party or by which they or any of their respective Affiliates or any of their respective Assets are bound and any rights or claims (whether accrued or contingent) of ASD, WABCO, or any of their respective Affiliates arising thereunder, other than VCS Contracts;

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(iii) all Assets owned, leased or held by ASD, WABCO, or any of their respective Affiliates immediately prior to the Effective Time (other than VCS Assets), including inventory, accounts receivable, goodwill, and all Assets reflected on the Remainco Balance Sheet, or the accounting records supporting such balance sheet and any Assets acquired by or for the Remainco Business subsequent to the date of such balance sheet which, had they been so acquired on or before such date and owned as of such date, would have been reflected on such balance sheet if prepared on a consistent basis, subject to any disposition of such Assets subsequent to the date of such balance sheet;

(iv) subject to ARTICLE IX , any rights of any member of the ASD Group under any Third Party Shared Policies to the extent related to the Remainco Business;

(v) the Assets listed or described on Schedule 1.1(79)(v) and any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement or the Reorganization Documents as Assets to be retained by, or assigned or transferred to, any member of the ASD Group;

(vi) all ASD Accounts, and, subject to the provisions of Section 2.5 , all cash, cash equivalents, and securities on deposit in such accounts immediately prior to the Effective Time; and

(vii) any collateral securing any Remainco Liability immediately prior to the Effective Time.

Notwithstanding the foregoing, the Remainco Assets shall not in any event include the Assets listed or described on Schedule 1.1(79)(vii) .

(80) “ Remainco Balance Sheet ” shall mean the unaudited pro forma balance sheet of the HVAC Business and B&K Business (after giving effect to the Distribution) as of March 31, 2007, as set forth on Schedule 1.1(80) ; provided, that to the extent any Assets or Liabilities are Transferred by any Party or any member of its Group to ASD or any member of the ASD Group or vice versa in connection with the Separation and prior to the Distribution Date, such assets and/or liabilities shall be deemed to be included or excluded from the Remainco Balance Sheet, as the case may be.

(81) “ Remainco Business ” shall mean:

(i) the B&K Business;

(ii) the HVAC Business;

(iii) any other business, operations, or assets where such business was conducted through the use of the Remainco Assets prior to the Effective Time;

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(iv) the businesses and operations of Business Entities acquired or established by or for any member of the ASD Group after the Effective Time; and

(v) all other businesses and operations (whether or not such business or operations are or have been terminated, divested or discontinued);

provided , however , the Remainco Business shall not include any business, operation, or asset expressly included in the VCS Business pursuant to this Agreement.

(82) “ Remainco Liabilities ” shall mean:

(i) the Liabilities listed or described on Schedule 1.1(82)(i) and any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained, assumed or retired by any member of the ASD Group;

(ii) any and all Liabilities of ASD, WABCO, or any of their respective Affiliates, to the extent relating to, arising out of or resulting from:

(A) the operation or conduct of the Remainco Business, as conducted at any time prior to, on or after the Effective Time (including any Liability to the extent relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative of ASD, WABCO, or any of their respective Affiliates (whether or not such act or failure to act is or was within such Person’s authority) with respect to the Remainco Business);

(B) the operation or conduct of any business conducted by any member of the ASD Group at any time after the Effective Time (including any Liability to the extent relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative of ASD or any of its Affiliates after the Effective Time (whether or not such act or failure to act is or was within such Person’s authority) with respect to the Remainco Business); or

(iii) any and all Liabilities to the extent relating to, arising out of or resulting from any terminated, discontinued or divested Business Entity, business, real property, Asset or operation formerly owned or managed by, or associated with, any member of the ASD Group or any of the Remainco Businesses (other than those Business Entities described on Schedule 1.1(82)(iii) ;

(iv) any and all Liabilities (including under applicable federal and state securities Laws) relating to, arising out of or resulting from:

(A) a misstatement or omission contained in the sections of the Distribution Disclosure Documents described in Schedule 1.1(82)(iv)(A) hereto;

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(B) any Pre-Separation Disclosure, but only to the extent such Liabilities arise out of, or result from, matters related to the Remainco Business; and

(v) any and all Liabilities, including those Liabilities relating to, arising out of or resulting from any Indebtedness of any member of the ASD Group (whether incurred prior to, on or after the Effective Time);

(vi) any and all Liabilities to the extent relating to, arising out of or resulting from any Action relating to the Remainco Business or Remainco Assets;

(vii) any and all Liabilities of the guarantor under the guarantees and obligations of the obligor under letters of credit listed or described on Schedule 1.1(82)(vii) ;

(viii) all Liabilities reflected as Liabilities or obligations on the Remainco Balance Sheet or on the accounting records supporting such balance sheet, and all Liabilities arising or assumed after the date of such balance sheet which, had they arisen or been assumed on or before such date and been retained as of such date, would have been reflected on such balance sheet if prepared on a consistent basis, subject to any discharge of such Liabilities subsequent to the date of the Remainco Balance Sheet; and

(ix) any and all obligations of an insured Person under each Third Party Shared Policy to the extent related to or arising out of the Remainco Business.

Notwithstanding the foregoing, the Remainco Liabilities shall not in any event include any Liabilities (including Liabilities under VCS Contracts and VCS Liabilities) that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities to be retained or assumed by any member of the WABCO Group, including any Liabilities set forth on Schedule 1.1(82)(ix) , or for which any member of the WABCO Group is liable pursuant to this Agreement or such Ancillary Agreement.

FOR THE AVOIDANCE OF DOUBT, NO LIABILITY SHALL BE A REMAINCO LIABILITY SOLELY AS A RESULT OF ASD OR ANY OTHER MEMBER OF THE ASD GROUP BEING NAMED AS PARTY TO, OR IN, ANY ACTION.

(83) “ Reorganization ” shall have the meaning set forth in the recitals hereto.

(84) “ Reorganization Documents ” shall have the meaning set forth in Section 3.1 .

(85) “ Rules ” shall have the meaning set forth in Section 8.2 .

(86) “ Securities Act ” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time that reference is made thereto.

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(87) “ Security Interest ” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, condition, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever, excluding restrictions on transfer under securities Laws.

(88) “ Separation ” shall have the meaning set forth in the recitals hereto.

(89) “ Shared Contracts ” means Contracts entered into prior to the Effective Time which are between or among a member of the ASD Group and/or a member of the WABCO Group and one or more third parties that benefit both (i) the VCS Businesses and (ii) the Remainco Business.

(90) “ Shared Contractual Liabilities ” means Liabilities in respect of Shared Contracts.

(91) “ Software ” shall mean all computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, and technology supporting the foregoing, and all documentation, including flowcharts and other logic and design diagrams, technical, functional and other specifications, and user manuals and training materials related to any of the foregoing.

(92) “ S ubsidiar y ” shall mean with respect to any Person (i) a corporation, fifty percent (50%) or more of the voting capital stock of which is, as of the time in question, directly or indirectly owned by such Person and (ii) any other limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or other entity in which such Person, directly or indirectly, owns fifty percent (50%) or more of the equity economic interest thereof or has the power to elect or direct the election of fifty percent (50%) or more of the members of the governing body of such entity or otherwise has control over such entity (e.g., as the managing partner of a partnership).

(93) “ Tax ” shall have the meaning set forth in the Tax Sharing Agreement.

(94) “ Tax Sharing Agreement ” shall mean the Tax Sharing Agreement by and between ASD, WABCO, and certain members of the ASD Group and the WABCO Group, dated as of the date hereof, and substantially in the form attached as Exhibit C hereto.

(95) “ Tax Return ” shall have the meaning set forth in the Tax Sharing Agreement.

(96) “ Third Party Claim ” shall have the meaning set forth in Section 6.4(b) .

(97) “ Third Party Shared Policies ” shall mean all Policies, whether or not in force at the Effective Time, issued by unaffiliated third-party insurers to ASD, WABCO, or any of their respective Affiliates, which cover risks that relate to both the Remainco Business and the VCS Business.

(98) “ Trademarks ” shall mean all United States and foreign trademarks, service marks, corporate names, trade names, domain names, logos, slogans, designs, trade dress and other similar designations of source or origin, whether registered or unregistered, together with the goodwill symbolized by any of the foregoing.

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(99) “ Transfer ” shall have the meaning set forth in Section 2.2(a) .

(100) “ Transition Services Agreement ” shall mean the Transition Services Agreement by and between ASD and WABCO, dated as of the date hereof, and substantially in the form attached as Exhibit D hereto.

(101) “ VCS Assets ” shall mean:

(i) the ownership interests (to the extent held by ASD, WABCO or any of their respective Affiliates immediately prior to the Effective Time) in each member of the WABCO Group;

(ii) all VCS Contracts, any rights or claims (whether accrued or contingent) of ASD, WABCO, or any of their respective Affiliates, arising thereunder;

(iii) all Assets owned, leased or held by ASD, WABCO, or any of their respective Affiliates immediately prior to the Effective Time that, in ASD’s reasonable determination, are used exclusively in the VCS Business, including inventory, accounts receivable, goodwill, and all Assets reflected on the WABCO Balance Sheet, or the accounting records supporting such balance sheet and any Assets acquired by or for the VCS Business subsequent to the date of such balance sheet which, had they been so acquired on or before such date and owned as of such date, would have been reflected on such balance sheet if prepared on a consistent basis, subject to any disposition of such Assets subsequent to the date of such balance sheet;

(iv) subject to ARTICLE IX, any rights of any member of the WABCO Group under any Third Party Shared Policies to the extent related to the VCS Business;

(v) the Assets listed or described on Schedule 1.1(101)(v) and any and all Assets that are expressly contemplated by this Agreement, any Ancillary Agreement or the Reorganization Documents as Assets to be retained by, or assigned or transferred to, any member of the WABCO Group; and

(vi) all WABCO Accounts, and, subject to the provisions of Section 2.5 , all cash, cash equivalents, and securities on deposit in such accounts immediately prior to the Effective Time, after giving effect to any withdrawal by, or other distribution of cash to, ASD which may occur on or prior to the Effective Time.

Notwithstanding the foregoing, the VCS Assets shall not in any event include:

(A) the Assets listed or described on Schedule 1.1(101)(vi)(A) ; or

(B) any Remainco Assets or other Assets that are expressly contemplated by any Ancillary Agreement as Assets to be retained by, transferred or assigned to, any member of the ASD Group.

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(102) “ VCS Business ” shall mean:

(i) the business and operations of the Vehicle Control Systems segment of ASD as described in the Form 10;

(ii) any other business, operations, or assets where such business was conducted exclusively through the use of the VCS Assets prior to the Effective Time, and

(iii) the businesses and operations of Business Entities acquired or established by or for any member of the WABCO Group after the Effective Time.

(103) “ VCS Contracts ” shall mean the following Contracts to which ASD or any of its Affiliates is a party or by which it or any of its Affiliates or any of their respective Assets is bound, except for any such Contract or part thereof that is expressly contemplated not to be transferred or assigned by any member of the ASD Group to WABCO pursuant to any provision of this Agreement or any Ancillary Agreement:

(i) any Contract entered into in the name of, or expressly on behalf of, any division, business unit or member of the WABCO Group;

(ii) any Contract that relates exclusively to the VCS Business;

(iii) any Contract representing capital or operating equipment lease obligations of facilities or equipment exclusively used by any member of the WABCO Group;

(iv) any Contract or part thereof that is otherwise expressly contemplated pursuant to this Agreement or any of the Ancillary Agreements or Reorganization Documents to be retained by, transferred or assigned to, any member of the WABCO Group;

(v) the Contracts listed or described on Schedule 1.1(103)(v) .

(104) “ VCS Liabilities ” shall mean:

(i) the Liabilities listed or described on Schedule 1.1(104)(i) and any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained, assumed or retired by any member of the WABCO Group;

(ii) any and all Liabilities of ASD, WABCO, or any of their respective Affiliates, to the extent relating to, arising out of or resulting from:

(A) the operation or conduct of the VCS Business, as conducted at any time prior to, on or after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative of ASD, WABCO, or any of their respective Affiliates (whether or not such act or failure to act is or was within such Person’s authority));

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(B) the operation or conduct of any business conducted by any member of the WABCO Group at any time after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative of WABCO or any of its Affiliates after the Effective Time (whether or not such act or failure to act is or was within such Person’s authority)); or

(iii) any and all Liabilities to the extent relating to, arising out of or resulting from any terminated, discontinued or divested Business Entity, business, real property, Asset or operation formerly owned or managed by, or associated with any member of the WABCO Group or any of the VCS Businesses (including those Business Entities listed and described on Schedule 1.1(104)(iii) );

(iv) any and all Liabilities (including under applicable federal and state securities Laws) relating to, arising out of or resulting from:

(A) the Distribution Disclosure Documents (including the Form 10 and the Information Statement), except to the extent specifically enumerated as a Remainco Liability on Schedule 1.1(82)(iv)(A) ;

(B) any Pre-Separation Disclosure, but only to the extent such Liabilities arise out of or result from matters related to the VCS Business; and

(v) any and all Liabilities, including those Liabilities listed on Schedule 1.1(104)(v) , relating to, arising out of or resulting from any Indebtedness of any member of the WABCO Group (whether incurred prior to, on or after the Effective Time);

(vi) any and all Liabilities relating to, resulting from, or arising out of any Action listed or described on Schedule 1.1(104)(vi) ;

(vii) any and all Liabilities of the guarantor under the guarantees and obligations of the obligor under letters of credit listed or described on Schedule 1.1(104)(vii) ;

(viii) all Liabilities reflected as Liabilities or obligations on the WABCO Balance Sheet or on the accounting records supporting such balance sheet, and all Liabilities arising or assumed after the date of such balance sheet which, had they arisen or been assumed on or before such date and been retained as of such date, would have been reflected on such balance sheet if prepared on a consistent basis, subject to any discharge of such Liabilities subsequent to the date of the WABCO Balance Sheet;

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(ix) any and all obligations of an insured Person under each Third Party Shared Policy to the extent related to or arising out of the VCS Business; and

(x) any and all Liabilities of any Business Entity that, following the Distribution, will be owned, directly or indirectly, by WABCO, except for those Liabilities assumed or retained by a member of the ASD Group pursuant to the Reorganization Documents.

Notwithstanding the foregoing, the VCS Liabilities shall in any event not include any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the schedules hereto or thereto) as Liabilities to be retained or assumed by any member of the ASD Group, including any Liabilities set forth on Schedule 1.1(104)(x) , or for which any member of the ASD Group is liable pursuant to this Agreement or such Ancillary Agreement.

FOR THE AVOIDANCE OF DOUBT, NO LIABILITY SHALL BE A VCS LIABILITY SOLELY AS A RESULT OF WABCO OR ANY OTHER MEMBER OF THE WABCO GROUP BEING NAMED AS PARTY TO, OR IN, ANY ACTION.

(105) “ WABCO ” shall have the meaning set forth in the preamble hereto.

(106) “ WABCO Accounts ” shall have the meaning set forth in Section 2.5(a) .

(107) “ WABCO Balance Sheet ” shall mean the unaudited balance sheet of the VCS Business, as of March 31, 2007, that is included in the Information Statement; provided, that to the extent any Assets or Liabilities are Transferred by any Party or any member of its Group to WABCO or any member of the WABCO Group or vice versa in connection with the Separation and prior to the Distribution Date, such assets and/or liabilities shall be deemed to be included or excluded from the WABCO Balance Sheet, as the case may be.

(108) “ WABCO Common Stock ” shall have the meaning set forth in the recitals hereto.

(109) “ WABCO Disclosure ” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) filed with or furnished to

(A) the Commission,

(B) any other Governmental Entity, or

on or after the Effective Time by or on behalf of any member of the WABCO Group in connection with the registration, sale, or distribution of securities or disclosure related thereto (including periodic disclosure obligations).

(110) “ WABCO Employee ” shall have the meaning set forth in the Employee Matters Agreement.

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(111) “ WABCO Group ” shall mean WABCO and each Person identified on Schedule 1.1(111) , and each Person that is or becomes an Affiliate of WABCO at or after the Effective Time.

(112) “ WABCO Indemnitees ” shall mean each member of the WABCO Group and each of their Affiliates, and their respective directors, officers, employees and agents and each of the heirs, executors, successors and assigns of any of the foregoing.

(113) “ Wholly Owned S ubsidiar y ” shall mean, with respect to any Person, any Subsidiary of such Person if all of the common stock or other similar equity ownership interests (but not including non-voting preferred stock) in such Subsidiary (other than any director’s qualifying shares or investments by foreign nationals mandated by applicable Law) is owned directly or indirectly by such Person.

Section 1.2. References; Interpretation . References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. Any action to be taken by the Board of Directors of a Party may be taken by a committee of the Board of Directors of such Party if properly delegated by the Board of Directors of a Party to such committee. Unless the context otherwise requires:

(i) the words “include”, “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation”;

(ii) references in this Agreement to Articles, Sections, Annexes, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement;

(iii) the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement; and

(iv) references in this Agreement to any time shall be to New York City, New York time unless otherwise expressly provided herein.

Section 1.3. Effective Time . This Agreement shall be effective as of the Effective Time.

Section 1.4. Other Matters . The Ancillary Agreements will govern ASD’s and WABCO’s respective rights, responsibilities and obligations after the Distribution with respect to the matters set forth in such Ancillary Agreement, except as expressly set forth in this Agreement or any other Ancillary Agreement.

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ARTICLE II

THE SEPARATION

Section 2.1. General . Subject to the terms and conditions of this Agreement, including Section 4.4, the Parties shall use, and shall cause their respective Affiliates to use, their respective commercially reasonable efforts to consummate the transactions contemplated hereby, a portion of which have already been implemented prior to the date hereof. It is the intent of the Parties that prior to consummation of the Distribution, ASD, WABCO and their respective Subsidiaries shall be reorganized, to the extent necessary, such that immediately following the consummation of such reorganization, subject to Section 2.7, (i) all of ASD’s and its Subsidiaries’ right, title and interest in and to the VCS Assets will be owned or held by a member or members of the WABCO Group, the VCS Business will be conducted by the members of the WABCO Group and the VCS Liabilities will be assumed directly or indirectly by (or retained by) a member of the WABCO Group; and (ii) all of ASD’s and its Subsidiaries’ right, title and interest in and to the Remainco Assets will be owned or held by a member or members of the ASD Group, the Remainco Business will be conducted by the members of the ASD Group and the Remainco Liabilities will be assumed directly or indirectly by (or retained by) a member of the ASD Group.

Section 2.2. Transfer of Assets .

(a) On or prior to the Effective Time and to the extent not already completed:

(i) ASD shall and hereby does, on behalf of itself and the other members of the ASD Group, as applicable, transfer, contribute, assign, distribute, and convey, or cause to be transferred, contributed, assigned, distributed and conveyed (“ Transfer “), to WABCO or another member of the WABCO Group all of ASD’s and the other members’ of the ASD Group’s right, title and interest in and to the VCS Assets; and

(ii) WABCO shall and hereby does, on behalf of itself and the other members of the WABCO Group, as applicable, Transfer to ASD or another member of the ASD Group all of WABCO’s and the other members’ of the WABCO Group’s right, title and interest in and to the Remainco Assets.

(b) Unless otherwise agreed to by the Parties, each of ASD and WABCO, as applicable, shall be entitled to designate the Business Entity within such Party’s respective Group to which any Assets are to be transferred pursuant to Section 2.2(a) or Section 2.7 .

Section 2.3. Assumption and Satisfaction of Liabilities . Except as otherwise specifically set forth in this Agreement or any Ancillary Agreement, from and after the Effective Time, (a) ASD shall, or shall cause another member of the ASD Group to, accept, assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance with their respective terms, all of the Remainco Liabilities and (b) WABCO shall, or shall cause another member of the WABCO Group to, accept, assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance with their respective terms, all the VCS Liabilities, in each case regardless of (i) when or where such Liabilities arose or arise, (ii) where or against whom such Liabilities are

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asserted or determined, (iii) whether arising from or alleged to arise from negligence, gross negligence, recklessness, violation of law, willful misconduct, bad faith, fraud or misrepresentation by any member of the ASD Group or the WABCO Group, as the case may be, or any of their past or present respective directors, officers, employees, or agents, (iv) which entity is named in any action associated with any Liability and (v) whether the facts on which they are based occurred prior to, on or after the date hereof.

Section 2.4. Intercompany Accounts .

(a) Each Intercompany Account (other than receivables, payables and loans otherwise specifically provided for under or created by this Agreement or any Ancillary Agreement or Continuing Arrangements) which exists and is reflected immediately prior to the Effective Time in any general ledger account or other Records of ASD, WABCO or any of their respective Affiliates, shall be satisfied and/or settled by the relevant members of the ASD Group and the WABCO Group no later than the Effective Time by (i) forgiveness by the relevant obligee, (ii) one or a related series of distributions of and/or contributions to capital, (iii) payment by the relevant obligor to the relevant obligee, or (iv) dividends or a combination of the foregoing, in each case as determined by ASD.

(b) If an Intercompany Account is not satisfied or settled as described in Section 2.4(a) for any reason, such Intercompany Account shall continue to be outstanding after the Effective Time (unless previously satisfied in accordance with its terms) and thereafter (i) shall be an obligation of the relevant Party (or the relevant member of such Party’s Group), each responsible for fulfilling its (or a member of such Party’s Group’s) obligations in accordance with the terms and conditions applicable to such obligation, and (ii) shall be for each relevant Party (or the relevant member of such Party’s Group) an obligation to a third-party and shall no longer be an Intercompany Account.

Section 2.5. Bank Accounts; Cash Balances .

(a) The Parties agree to take, or cause the respective members of their respective Groups to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all Contracts governing each bank and brokerage account owned by WABCO or any other member of the WABCO Group (the “ WABCO Accounts ”), including all WABCO Accounts listed or described on Schedule 2.5(a) , so that such WABCO Accounts, if currently linked (whether by automatic withdrawal, automatic deposit, or any other authorization to transfer funds from or to, hereinafter “ linked ”) to any bank or brokerage account owned by ASD or any other member of the ASD Group (the “ ASD Accounts ”), including all ASD Accounts listed or described on Schedule 2.5(b) , are de-linked from the ASD Accounts. From and after the Effective Time, no ASD Employee shall have any authority to access or control any WABCO Account, except as provided for through the Transition Services Agreement.

(b) The Parties agree to take, or cause the respective members of their respective Groups to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all Contracts governing the ASD Accounts so that such ASD Accounts, if currently linked to a WABCO Account, are de-linked from the WABCO Accounts. From and after the Effective Time, no WABCO Employee shall have any authority to access or control any ASD Account, except as provided for through the Transition Services Agreement.

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(c) It is intended that, following consummation of the actions contemplated by sections (a) and (b) above, there will continue to be in place a centralized cash management system pursuant to which the WABCO Accounts will be managed centrally and funds collected will be transferred into one or more centralized accounts maintained by WABCO.

(d) It is intended that, following consummation of the actions contemplated by sections (a) and (c) above, there will continue to be in place a centralized cash management system pursuant to which the ASD Accounts will be managed centrally and funds collected will be transferred into one or more centralized accounts maintained by ASD.

(e) With respect to any outstanding checks issued by ASD, WABCO, or any of their respective Subsidiaries prior to the Effective Time, such outstanding checks shall be honored following the Effective Time by the entity or Group owning the account on which the check is drawn.

(f) As between the two Parties (and the members of their respective Groups) all payments and reimbursements received after the Effective Time by either Party (or member of its Group) that relate to a Business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, promptly upon receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause the applicable member of its Group to pay over to the other Party the amount of such payment or reimbursement without right of set-off.

(g) The Parties agree that, prior to the Effective Time, ASD or any other member of the ASD Group may withdraw any and all cash or cash equivalents from the WABCO Accounts for the benefit of ASD or any other member of the ASD Group.

Section 2.6. Limitation of Liability .

(a) Except as otherwise expressly provided in this Agreement, no Party or any member of such Party’s Group shall have any Liability to any other Party or any member of each other Party’s Group in the event that any Information exchanged or provided pursuant to this Agreement (but excluding any such information included in the Distribution Disclosure Documents, Liability for which will be governed by Section 2.3) which is an estimate or forecast, or which is based on an estimate or forecast, is found to be inaccurate.

(b) Except as provided in Section 2.4 , Section 2.12 or as set forth in subsection (c) below, no Party or any member of such Party’s Group shall have any Liability to any other Party or any member of such other Party’s Group based upon, arising out of or resulting from any Contract, arrangement, course of dealing or understanding existing on or prior to the Effective Time (other than as expressly set forth in this Agreement, any Ancillary Agreement or any Continuing Arrangements or any Contract entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby), and each Party hereby terminates, and shall cause all members in its Group to terminate, any and all Contracts, arrangements, course of dealings or understandings between it or any members in its Group and

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the other Party, or any members of its Group, effective as of the Effective Time (other than this Agreement, any Ancillary Agreement or any Continuing Arrangements or any Contract entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby), unless such Contract, arrangement, course of dealing or understanding is set forth in any Ancillary Agreement or Continuing Arrangement, and any such Liability, whether or not in writing, which is not reflected in any Ancillary Agreement or Continuing Arrangement, is hereby irrevocably cancelled, released and waived effective as of the Effective Time. No such terminated Contract, arrangement, course of dealing or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time.

(c) The provisions of Section 2.6(b) shall not apply to any of the following Contracts, arrangements, course of dealings or understandings (or to any of the provisions thereof):

(i) any Contracts to which any Person other than the Parties and their respective Affiliates is a Party (it being understood that to the extent that the rights and obligations of the Parties and the members of their respective Groups under any such Contracts constitute Remainco Assets or VCS Assets, Remainco Liabilities, or VCS Liabilities, such Contracts shall be assigned or retained pursuant to ARTICLE II ); and

(ii) any Contracts, agreements, arrangements, commitments or understandings to which any non-Wholly Owned Subsidiary or non-Wholly Owned Affiliate of ASD or WABCO is a Party.

Section 2.7. Transfers Not Effected On or Prior to the Effective Time; Transfers Deemed Effective as of the Effective Time .

(a) To the extent that any Transfers or assumptions contemplated by this ARTICLE II shall not have been consummated on or prior to the Effective Time, the Parties shall cooperate to effect such Transfers or assumptions as promptly following the Effective Time as shall be practicable. Nothing herein shall be deemed to require the Transfer of any Assets or the assumption of any Liabilities which by their terms or operation of Law cannot be Transferred or assumed; provided , however , that the Parties shall, and shall cause the respective members of their Groups to, cooperate and use commercially reasonable efforts to seek to obtain any necessary Consents or Governmental Approvals for the Transfer of all Assets and assumption of all Liabilities contemplated to be Transferred or assumed pursuant to this ARTICLE II . In the event that any such Transfer or assumption of Assets or Liabilities has not been consummated from and after the Effective Time (i) the Party (or relevant member in its Group) retaining such Asset shall thereafter hold (or shall cause such member in its Group to hold) such Asset for the use and benefit of the Party (or relevant member in its Group) entitled thereto (at the expense of the Person entitled thereto) and (ii) the Party intended to assume such Liability shall, or shall cause the applicable member of its Group to, pay or reimburse the Party (or the relevant member of its Group) retaining such Liability for all amounts paid or incurred in connection with the retention of such Liability. In addition, the Party retaining such Asset or Liability (or relevant member of its Group) shall (or shall cause such member in its Group to) treat, insofar as reasonably possible and to the extent permitted by applicable Law, such Asset or Liability in the

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ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the Party to which such Asset or Liability is to be transferred or assumed in order to place such Party, insofar as reasonably possible, in the same position as if such Asset or Liability had been transferred or assumed as contemplated hereby and so that all the benefits and burdens relating to such Asset or Liability, including possession, use, risk of loss, potential for gain, and dominion, control and command over such Asset or Liability, are to inure from and after the Effective Time to the relevant member of the ASD Group or the WABCO Group, as the case may be, entitled to the receipt of such Asset or Liability. In furtherance of the foregoing, the Parties agree that, as of the Effective Time, each Party shall be deemed to have acquired complete and sole beneficial ownership over all of the Assets, together with all rights, powers and privileges incident thereto, and shall be deemed to have assumed in accordance with the terms of this Agreement all of the Liabilities, and all duties, obligations and responsibilities incident thereto, which such Party is entitled to acquire or required to assume pursuant to the terms of this Agreement.

(b) If and when the Consents, Governmental Approvals and/or conditions, the absence or non-satisfaction of which caused the deferral of transfer of any Asset or assumption of any Liability pursuant to Section 2.7(a) , are obtained or satisfied, the transfer, assignment or novation of the applicable Asset or Liability shall be effected in accordance with and subject to the terms of this Agreement and/or the applicable Ancillary Agreement as promptly as practicable after the receipt of such Consents, Governmental Approvals and/or absence or satisfaction of conditions.

(c) The Party (or relevant member of its Group) retaining any Asset or Liability due to the deferral of the transfer or assignment of such Asset or the deferral of the assumption of such Liability pursuant to Section 2.7(a) shall (i) not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced, or agreed in advance to be reimbursed by the Party (or relevant member of its Group) entitled to such Asset, other than reasonable attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by the Party entitled to such Asset (or relevant member of its Group) and (ii) be indemnified for all Indemnifiable Losses arising out of any actions (or omissions to act) of such retaining Party taken at the direction of the other Party (or relevant member of its Group) in connection with and relating to such retained Asset or Liability, as the case may be.

(d) Until the earlier of (i) receipt of audit opinions with respect to each Party’s financial statements for the year ended December 31, 2008 or (ii) the two year anniversary of this Agreement, if either Party determines that it (or any member of its Group) owns any Asset that was allocated by the terms of this Agreement to be Transferred to the other Party at the Effective Time or that is agreed by such Party and the other Party in their good faith judgment to be an Asset that more properly belongs to the other Party or an Asset that such other Party or Subsidiary was intended to have the right to continue to use, then the Party owning such Asset shall as applicable (i) Transfer any such Asset to the Party (or relevant member of its Group) identified as the appropriate transferee and following such Transfer, such Asset shall be a VCS Asset or Remainco Asset, as the case may be, or (ii) grant such mutually agreeable rights with respect to such Asset to permit such continued use, subject to, and consistent with this Agreement, including with respect to assumption of associated Liabilities. In connection with such transfer, contribution, assignment, distribution or conveyance, the receiving party shall assume all Liabilities related to such asset.

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(e) After the Effective Time, each Party (or any member of its Group) may receive mail, telegrams, packages and other communications properly belonging to the other Party (or any member of its Group). Accordingly, at all times after the Effective Time, each Party authorizes the other Party (or any member of its Group) to receive and open all mail, telegrams, packages and other communications received by such Party (or any member of its Group) and not unambiguously intended for such first Party, any member of such first Party’s Group or any of their respective officers, directors, employees or other agents, and to the extent that they do not relate to the business of the receiving Party, the receiving party shall promptly deliver such mail, telegrams, packages or other communications (or, in case the same relate to both businesses, copies thereof) to the other Party as provided for in Section 11.6 . The provisions of this Section 2.7(e) are not intended to, and shall not, be deemed to constitute an authorization by any Party (or any member of its Group) to permit the other to accept service of process on its (or its members’) behalf and no Party (or any member of its Group) is or shall be deemed to be the agent of the other Party (or any member of its Group) for service of process purposes.

Section 2.8. Conveyancing and Assumption Instruments . In connection with, and in furtherance of, the Transfers of Assets and the acceptance and assumptions of Liabilities contemplated by this Agreement, the Parties shall execute or cause to be executed, on or prior to the Effective Time, or after the Effective Time with respect to Section 2.7, by the appropriate entities, the Conveyancing and Assumption Instruments necessary to evidence the valid and effective assumption by the applicable Party (or any member of its Group) of its assumed Liabilities, and the valid Transfer to the applicable Party (or any member of its Group) of all right, title and interest in and to its accepted Assets, including the transfer of real property with quit claim deeds, as may be appropriate.

Section 2.9. Shared Contracts With respect to Shared Contractual Liabilities pursuant to, under or relating to a given Shared Contract, such Shared Contractual Liabilities shall be allocated, unless otherwise allocated pursuant to this Agreement or an Ancillary Agreement, between the Parties as follows:

(i) first, if a Liability is incurred exclusively in respect of a benefit received by one Party or its Group, the Party or Group receiving such benefit shall be responsible for such Liability.

(ii) second, if a Liability cannot be exclusively allocated to one Party or its Group under clause (i) above, such Liability shall be allocated among both Parties and their respective Groups based on the relative proportions of total benefit received (over the term of the Shared Contract, measured as of the date of allocation) under the relevant Shared Contract. Notwithstanding the foregoing, each Party and its Group shall be responsible for any or all Liabilities arising out of or resulting from such Party’s or Group’s breach of the relevant Shared Contract.

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(b) If ASD or any member of the ASD Group, on the one hand, or WABCO or any member of the WABCO Group, on the other hand, receives any benefit or payment under any Shared Contract which was intended for the other Party or its Group, ASD, on the one hand, or WABCO, on the other hand, will use its respective commercially reasonable efforts, or will cause any member of its Group to use its commercially reasonable efforts, to deliver, transfer or otherwise afford such benefit or payment to the other Party.

(c) Notwithstanding anything to the contrary herein, the Parties have determined that it is advisable that certain Shared Contracts, or portions thereof, will be separated or assigned to a member of the ASD Group or WABCO Group, as applicable. The Parties shall use their commercially reasonable efforts to separate the Shared Contracts which are identified on Schedule 2.9(c)(i) into separate Contracts between the appropriate third party and either WABCO or a member of the WABCO Group or ASD or a member of the ASD Group. ASD or a member of the ASD Group will use commercially reasonable efforts to assign the rights and obligations, but only to the extent relating to the VCS Business, under the Shared Contracts which are identified on Schedule 2.9(c)(ii) to WABCO or a member of the WABCO Group. The Parties agree to cooperate and provide reasonable assistance prior to the Effective Time and for a period of six (6) months following the Effective Time (with no obligation on the part of either Party to pay any costs or fees with respect to such assistance) in effecting the separation or assignment of such Shared Contracts as described above.

Section 2.10. Further Assurances.

(a) In addition to and without limiting the actions specifically provided for elsewhere in this Agreement, including Section 2.7 , each of the Parties shall cooperate with each other and use (and will cause the relevant member of its Group to use) commercially reasonable efforts, prior to, on and after the Effective Time, to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

(b) Without limiting the foregoing, each Party shall cooperate with the other Party, from and after the Effective Time, to execute and deliver, or use commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Consents and/or Governmental Approvals, and to take all such other actions as such Party may reasonably be requested to take by any other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the Transfers of the applicable Assets and the assignment and assumption of the applicable Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each Party will, at the reasonable request, of the other Party, take such other actions as may be reasonably necessary to vest in such other Party good and marketable title to the Assets allocated to such Party under this Agreement or any of the Ancillary Agreements, free and clear of any Security Interest, if and to the extent it is practicable to do so.

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Section 2.11. Novation of Liabilities; Consents .

(a) Each Party, at the request of the other Party, shall use commercially reasonable efforts to obtain, or to cause to be obtained, any Consent, release, substitution or amendment required to novate or assign all obligations under Contracts, licenses and other obligations or Liabilities for which a member of such Party’s Group and a member of the other Party’s Group are jointly or severally liable and that do not constitute Liabilities of such other Party as provided in this Agreement (such other Party, the “ Other Party ”), or to obtain in writing the unconditional release of all parties to such arrangements (other than any member of the Group who assumed or retained such Liability as set forth in this Agreement), so that, in any such case, the members of the applicable Group will be solely responsible for such Liabilities; provided , however , that no Party shall be obligated to pay any consideration therefor to any third party from whom any such Consent, substitution or amendment is requested (unless such Party is fully reimbursed by the requesting Party).

(b) If the Parties are unable to obtain, or to cause to be obtained, any such required Consent, release, substitution or amendment, the Other Party or a member of such Other Party’s Group shall continue to be bound by such Contract, license or other obligation that does not constitute a Liability of such Other Party and, unless not permitted by Law or the terms thereof, as agent or subcontractor for such Party, the Party or member of such Party’s Group who assumed or retained such Liability as set forth in this Agreement (the “ Liable Party ”) shall, or shall cause a member of its Group to, pay, perform and discharge fully all the obligations or other Liabilities of such Other Party or member of such Other Party’s Group thereunder from and after the Effective Time; provided , however , that the Other Party shall not be obligated to extend, renew or otherwise cause such Contract, license or other obligation to remain in effect beyond the term in effect as of the Effective Time. The Liable Party shall indemnify each Other Party and the members of such Other Party’s Group and hold each of them harmless against any and all Liabilities arising in connection therewith; provided , that the Liable Party shall have no obligation to indemnify the Other Party or any member of such Other Party’s Group with respect to any matter to the extent that such Other Party has engaged in any knowing violation of Law or fraud in connection therewith. The Other Party shall, without further consideration, promptly pay and remit, or cause to be promptly paid or remitted, to the Liable Party or to another member of the Liable Party’s Group, all money, rights and other consideration received by it or any member of its Group in respect of such performance by the Liable Party (unless any such consideration is an Asset of such Other Party pursuant to this Agreement). If and when any such Consent, release, substitution or amendment shall be obtained or such agreement, lease, license or other rights or obligations shall otherwise become assignable or able to be novated, the Other Party shall promptly assign, or cause to be assigned, all rights, obligations and other Liabilities thereunder of any member of such Other Party’s Group to the Liable Party or to another member of the Liable Party’s Group without payment of any further consideration and the Liable Party, or another member of such Liable Party’s Group, without the payment of any further consideration, shall assume such rights and obligations and other Liabilities.

Section 2.12. Guarantees and Letters of Credit .

(a) ASD shall (with the commercially reasonable cooperation of WABCO and the other members of the WABCO Group) use its commercially reasonable efforts, if so

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requested by WABCO, to have any member of the WABCO Group removed as guarantor of, or obligor for, any Remainco Liability, including with respect to those guarantees and obligations listed or described on Schedule 2.12(a) , to the extent that they relate to Remainco Liabilities.

(b) WABCO shall (with the commercially reasonable cooperation of ASD and the other members of the ASD Group) use its commercially reasonable efforts, if so requested by ASD, to have any member of the ASD Group removed as guarantor of, or obligor for, any VCS Liability, including with respect to those guarantees listed or described on Schedule 2.12(b) , to the extent that they relate to the VCS Liabilities (each of the releases referred to in paragraphs (a) and (b) of this subsection, a “ Guaranty Release “).

(c) If ASD or WABCO is unable to obtain, or to cause to be obtained, any removal of any guarantee or other obligation as set forth in clauses (a) and (b) of this Section 2.12 , (i) the relevant beneficiary shall indemnify and hold harmless the guarantor or obligor for any Indemnifiable Loss arising from or relating thereto (in accordance with the provisions of Article VI ) and shall or shall cause one of its Subsidiaries, as agent or subcontractor for such guarantor or obligor to pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder, (ii) the relevant beneficiary shall pay to the guarantor or obligor a fee payable at the end of each calendar quarter based on a rate of 0.65% per annum on the average outstanding amount of the obligation underlying such guarantee or obligation during such quarter and (iii) each of ASD and WABCO shall not renew or extend the term of, increase its obligations under, or transfer to a third party, any loan, guarantee, lease, contract or other obligation for which the other Party is or may be liable unless all obligations of such other Party and the other members of such Party’s Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to such other Party; provided, however, with respect to leases, in the event a Guaranty Release is not obtained and such first Party wishes to extend the term of such guaranteed lease then such first Party shall have the option of extending the term if it provides such security as is reasonably satisfactory to the guarantor under such guaranteed lease.

(d) ASD and WABCO shall cooperate and WABCO shall use commercially reasonable efforts to replace all letters of credit issued by ASD or other members of the ASD Group on behalf of or in favor of any member of the WABCO Group or the VCS Business (the “ASD LCs”) as promptly as practicable with letters of credit from WABCO or a member of the WABCO Group as of the Effective Time. With respect to any ASD LCs that remain outstanding after the Effective Time, WABCO shall (i) indemnify and hold harmless ASD Indemnitees for any damages arising from or relating to such letters of credit, including, without limitation, any fees in connection with the issuance and maintenance thereof, (ii) pay to ASD a fee payable at the end of each calendar quarter based on a rate of 0.65% per annum on the average outstanding balance during such quarter of any outstanding ASD LCs and (iii) without the prior written consent of ASD, WABCO shall not, and shall not permit any member of the WABCO Group to, enter into, renew or extend the term of, increase its obligations under, or transfer to a third party, any loan, lease, Contract or other obligation in connection with which ASD or any member of the ASD Group has issued any letters of credit which remain outstanding. The parties hereto agree that neither ASD nor any member of the ASD Group will have any obligation to renew any letters of credit issued on behalf of or in favor of any member of the WABCO Group or the VCS Business after the expiration of any such letter of credit.

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Section 2.13. Disclaimer of Representations and Warranties . EACH OF ASD (ON BEHALF OF ITSELF AND EACH OTHER MEMBER OF THE ASD GROUP), AND WABCO (ON BEHALF OF ITSELF AND EACH OTHER MEMBER OF THE WABCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED HEREBY OR THEREBY, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED, DISTRIBUTED, OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, DISTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM OF DEED OR CONVEYANCE WITHOUT WARRANTY) AND THE RESPECTIVE TRANSFEREES SHALL BEAR ALL ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS, CONTRACTS, OR JUDGMENTS ARE NOT COMPLIED WITH. ALL WARRANTIES OF HABITABILITY, MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES ARISING UNDER THE UNIFORM COMMERCIAL CODE (OR SIMILAR FOREIGN LAWS), ARE HEREBY DISCLAIMED.

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ARTICLE III

CERTAIN ACTIONS PRIOR TO THE DISTRIBUTION

Section 3.1. ASD Reorganization . The Parties agree to take, or cause the members of their respective Groups to take, prior to the Distribution, all actions necessary, subject to the terms of this Agreement, to effectuate the Reorganization (such documentation necessary to effect the Reorganization, the “ Reorganization Documents ”) as set forth on Schedule 3.1 , and as updated from time to time.

Section 3.2. Certificate of Incorporation; Bylaws; Rights Plan . On or prior to the Effective Time, all necessary actions shall be taken to adopt the form of amended and restated certificate of incorporation and amended and restated by-laws and the form of Rights Agreement filed by WABCO with the Commission as exhibits to the Form 10.

Section 3.3. Directors . On or prior to the Effective Time, ASD shall take all necessary action to cause the Board of Directors of WABCO to consist of the individuals identified in the Form 10 (including the Information Statement) at the time declared effective as directors of WABCO.

Section 3.4. Resignations .

(a) Subject to Section 3.4(b) , on or prior to the Effective Time, (i) ASD shall cause all its employees and any employees of its Affiliates who will not become a WABCO Employee immediately following the Effective Time to resign, effective as of the Effective Time, from all positions as officers or directors of any member of the WABCO Group in which they serve, and (ii) WABCO shall cause all WABCO Employees to resign, effective as of the Effective Time, from all positions as officers or directors of any member of the ASD Group in which they serve.

(b) No Person shall be required by any Party to resign from any position or office with another Party if such Person is disclosed in the Information Statement as the Person who is to hold such position or office following the Distribution.

Section 3.5. Ancillary Agreements . On or prior to the Effective Time, ASD and WABCO shall enter into, and/or (where applicable) shall cause a member or members of their respective Groups to enter into, the Ancillary Agreements.

ARTICLE IV

THE DISTRIBUTION

Section 4.1. Stock Dividend to ASD; Distribution . Prior to the Distribution Date, WABCO shall issue to ASD as a stock dividend such number of shares of WABCO Common Stock (or ASD and WABCO shall take or cause to be taken such other appropriate actions to ensure that ASD has the requisite number of shares of WABCO Common Stock) as may be requested by ASD after consultation with WABCO in order to effect the Distribution, which shares as of the date of issuance shall represent (together with such shares previously held by

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ASD) all of the issued and outstanding shares of WABCO Common Stock. Subject to conditions and other terms in this ARTICLE IV , ASD will cause the Agent on the Distribution Date to distribute all of the outstanding shares of WABCO Common Stock then owned by ASD to holders of ASD Common Stock on the Record Date, and to credit the appropriate class and number of such shares of WABCO Common Stock to book entry accounts for each such holder or designated transferee or transferees of such holder of WABCO Common Stock. For stockholders of ASD who own ASD Common Stock through a broker or other nominee, their shares of WABCO Common Stock will be credited to their respective accounts by such broker or nominee. Subject to conditions and other terms in this ARTICLE IV , each holder of ASD Common Stock on the Record Date (or such holder’s designated transferee or transferees) will be entitled to receive in the Distribution one (1) share of WABCO Common Stock (which includes a related preferred stock purchase right) for every three (3) shares of ASD Common Stock held by such stockholder. No action by any such stockholder shall be necessary for such stockholder (or such stockholder’s designated transferee or transferees) to receive the applicable number of shares of WABCO Common Stock (and, if applicable, cash in lieu of any fractional shares) such stockholder is entitled to in the Distribution.

Section 4.2. Fractional Shares . ASD stockholders who, after aggregating the number of shares of WABCO Common Stock (or fractions thereof) to which such stockholder would be entitled on the Record Date, would be entitled to receive a fraction of a share of WABCO Common Stock in the Distribution, will receive cash in lieu of fractional shares. Fractional shares of WABCO Common Stock will not be distributed in the Distribution nor credited to book-entry accounts. The Agent shall, as soon as practicable after the Distribution Date (a) determine the number of whole shares and fractional shares of WABCO Common Stock allocable to each other holder of record or beneficial owner of ASD Common Stock as of close of business on the Record Date, (b) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions at then prevailing trading prices on behalf of holders who would otherwise be entitled to fractional share interests, and (c) distribute to each such holder, or for the benefit of each such beneficial owner, such holder’s or owner’s ratable share of the net proceeds of such sale, based upon the average gross selling price per share of WABCO Common Stock after making appropriate deductions for any amount required to be withheld for United States federal income tax purposes. WABCO shall bear the cost of brokerage fees and transfer taxes incurred in connection with these sales of fractional shares, which such sales shall occur as soon after the Distribution Date as practicable and as determined by the Agent. None of ASD, WABCO or the applicable Agent will guarantee any minimum sale price for the fractional shares of WABCO Common Stock. Neither ASD nor WABCO will pay any interest on the proceeds from the sale of fractional shares. The Agent will have the sole discretion to select the broker-dealers through which to sell the aggregated fractional shares and to determine when, how and at what price to sell such shares. Neither the Agent nor the selected broker-dealers will be Affiliates of ASD or WABCO.

Section 4.3. Actions in Connection with the Distribution .

(a) WABCO shall file such amendments and supplements to the Form 10 as ASD may reasonably request, and such amendments as may be necessary in order to cause the same to become and remain effective as required by Law, including filing such amendments and supplements to the Form 10 and Information Statement as may be required by the Commission

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or federal, state or foreign securities Laws. ASD shall mail to the holders of ASD Common Stock, at such time on or prior to the Distribution Date as ASD shall determine, the Information Statement included in the Form 10, as well as any other information concerning WABCO, WABCO’s business, operations and management, the Separation and such other matters as ASD shall reasonably determine are necessary and as may be required by Law.

(b) WABCO shall also prepare, file with the Commission and cause to become effective any registration statements or amendments thereof required to effect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the transactions contemplated by this Agreement, or any of the Ancillary Agreements, including any transactions related to financings or other credit facilities. Promptly after receiving a request from ASD, WABCO shall prepare and, in accordance with applicable Law, file with the Commission any such documentation that ASD determines is necessary or desirable to effectuate the Distribution, and ASD and WABCO shall each use commercially reasonable efforts to obtain all necessary approvals from the Commission with respect thereto as soon as practicable.

(c) Promptly after receiving a request from ASD, WABCO shall prepare and file, and shall use commercially reasonable efforts to have approved and made effective, an application for the original listing on the NYSE of the WABCO Common Stock to be distributed in the Distribution, subject to official notice of distribution.

(d) Nothing in this Section 4.3 shall be deemed, by itself, to create a Liability of ASD for any portion of the Form 10.

Section 4.4. Sole Discretion of ASD . ASD shall, in its sole and absolute discretion, determine the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions to effect the Distribution and the timing of and conditions to the consummation thereof. In addition, ASD may, in accordance with Section 11.10 , at any time prior to the Distribution Date and from time to time until the completion of the Distribution decide to abandon the Distribution or modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution. None of WABCO, any other member of the WABCO Group, any WABCO Employee or any Third-Party shall have any right or claim to require the consummation of the Separation or the Distribution, each of which shall be effected at the sole discretion of the Board of Directors of ASD.

Section 4.5. Conditions to Distribution . Subject to Section 4.4 , the following are conditions to the consummation of the Distribution. The conditions are for the sole benefit of ASD and shall not give rise to or create any duty on the part of ASD or the Board of Directors of ASD to waive or not waive any such condition.

(a) The Form 10 shall have been declared effective by the Commission, with no stop order in effect with respect thereto;

(b) The WABCO Common Stock to be delivered in the Distribution shall have been approved for listing on the NYSE, subject to official notice of distribution;

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(c) ASD shall have obtained a private letter ruling from the Internal Revenue Service in form and substance satisfactory to ASD (in its sole discretion), and such ruling shall remain in effect as of the Distribution Date, to the effect, among other things, that (i) the Internal Contributions followed by the Internal Distributions generally will qualify as tax-free for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code; (ii) the Contribution followed by the Distribution generally will qualify as tax-free for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code, (iii) no gain or loss will be recognized by ASD on the Contribution, (iv) no gain or loss will be recognized by WABCO on the Contribution, (v) no gain or loss will be recognized by (and no amount will otherwise be included in the income of) the shareholders of ASD upon their receipt of WABCO common stock pursuant to the Distribution; and (vi) no gain or loss will be recognized by ASD pursuant to the Distribution;

(d) ASD shall have obtained an opinion from Skadden, Arps, Slate, Meagher & Flom LLP, its tax counsel, in form and substance satisfactory to ASD (in its sole discretion), substantially to the effect that the Distribution, as well as the Internal Distributions, will qualify as tax-free for Federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code;

(e) All permits, registrations and consents required under the securities or blue sky Laws of states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Distribution shall have been obtained and be in full force and effect; and

(f) No order, injunction or decree issued by any Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Distribution or any of the transactions related thereto, including the Transfer of Assets and assumption of Liabilities pursuant to Article II hereof, shall be in effect.

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ARTICLE V

CERTAIN COVENANTS

Section 5.1. No Solicit . None of ASD or WABCO or any member of their respective Groups will from the Effective Time through and including the two year anniversary of the Effective Time, without the prior written consent of the other applicable Party, either directly or indirectly, on their own behalf or in the service or on behalf of others, solicit, aid, induce or encourage (i) in the case of ASD or any other member of the ASD Group, any employee at the level of grade 11 or higher, and in the case of WABCO or any other member of the WABCO Group, any employee at the level of grade 11 or higher and those employees listed on Schedule 5.1 or (ii) any employee working at a facility or location at which employees of the other Party or member of the other Party’s Group also work to leave his or her employment; provided , however , that nothing in this Section 5.1 shall be deemed to prohibit, any general solicitation for employment through advertisements and search firms not specifically directed at employees of such other applicable Party; provided , further , that the applicable Party has not encouraged or advised such firm to approach any such employee.

Section 5.2. Legal Names and Other Parties’ Trademark .

(a) Except as otherwise specifically provided in any Ancillary Agreement, as soon as reasonably practicable after the Distribution Date, but in any event within six (6) months thereafter, each Party shall cease (and shall cause all of the other members of its Group to cease): (i) making any use of any names or Trademarks that include (A) any of the Trademarks of the other Party or such other Party’s Affiliates (including, in the case of WABCO, “ASD” or “American Standard Companies Inc.” or any other name or Trademark containing the words “American Standard”, and in the case of ASD, “WBC” or “WABCO Holdings Inc.” or any other name or Trademark containing the words “WABCO”) and (B) any names or Trademarks related thereto including any names or Trademarks confusingly similar thereto or dilutive thereof (with respect to each Party, such Trademarks of the other Party or any of such other Party’s Affiliates, the “ Other Party Marks ”), and (ii) holding themselves out as having any affiliation with the other Party or such other Party’s Affiliates; provided , however , that the foregoing shall not prohibit any Party or any member of a Party’s Group from (1) making factual reference that it was formerly affiliated with ASD, (2) making use of any Other Party Mark in a manner that would constitute “fair use” under applicable Law if any unaffiliated third party made such use or would otherwise be legally permissible for any unaffiliated third party without the consent of the Party owning such Other Party Mark, and (3) making references in internal historical and tax records. In furtherance of the foregoing, as soon as practicable, but in no event later than six (6) months following the Distribution Date, each Party shall (and cause all of the other members of its Group to) remove, strike over or otherwise obliterate all Other Party Marks from all of such Party’s and its Affiliates’ assets and other materials, including any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, websites, email, computer software and other materials and systems; provided , however , that WABCO shall promptly after the Distribution Date post a disclaimer in a form and manner reasonably acceptable to ASD on the “www.wabco-auto.com” website informing its customers that as of the Effective Time and thereafter WABCO, and not ASD, is responsible for the operation of the VCS Business, including such website and any applicable services. Any use by any Party or

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any of such Party’s Affiliates of any of the Other Party Marks as permitted in this Section 5.2 is subject to their compliance with all quality control standards and related requirements and guidelines in effect for the Other Party Marks as of the Effective Time. The Parties shall (and shall cause the other members of its Group to) not use the Other Party Marks as permitted in this Section 5.2 in a manner that is reasonably likely to reflect negatively on such names or marks, or on the other Party or its Affiliates.

(b) Notwithstanding the foregoing requirements of Section 5.2(a) , if any Party or any member of such Party’s Group used commercially reasonable efforts to comply with Section 5.2(a) but is unable, due to regulatory or other circumstance beyond its control, to effect a legal name change in compliance with applicable Law such that an Other Party Mark remains in such Party’s or its Group member’s legal name, then such Party or its relevant Group member will not be deemed to be in breach hereof as long as it continues to use commercially reasonable efforts to effectuate such name change and does effectuate such name change within twelve (12) months after the Distribution Date, and, in such circumstances, such Party or Group member may continue to include in its assets and other materials references to the Other Party Mark that is in such Party’s or Group member’s legal name which includes references to “WABCO” or “American Standard” as applicable, but only to the extent necessary to identify such Party or Group member and only until such Party’s or Group member’s legal name can be changed to remove and eliminate such references.

(c) Notwithstanding the foregoing requirements of Section 5.2(a) , WABCO shall not be required to change any name including the words “American Standard” in any third-party contract or license, or in property records with respect to real or personal property, if an effort to change the name is commercially unreasonable; provided , however , that (i) WABCO on a prospective basis from and after the Distribution Date shall change the name in any new or amended third-party contract or license or property record and (ii) WABCO shall not advertise or make public any continued use of the “American Standard” name permitted by this Section 5.2(c) .

Section 5.3. Auditors and Audits; Annual and Quarterly Financial Statements and Accounting .

(a) Each Party agrees that during the period ending on March 31, 2009 with respect to paragraph (1) below and March 31, 2008 with respect to paragraph (2) (and with the consent of the other applicable Party, which consent shall not be unreasonably withheld or delayed, during any period of time after March 31, 2008 reasonably requested by such requesting Party so long as there is a reasonable business purpose for such request) and in any event solely with respect to the preparation and audit of each of the Party’s financial statements for any of the years ended December 31, 2007, 2006 and 2005, the printing, filing and public dissemination of such financial statements, the audit of each Party’s internal control over financial reporting related to such financial statements and such Party’s management’s assessment thereof, and each Party’s management’s assessment of such Party’s disclosure controls and procedures related to such financial statements:

(1) Annual Financial Statements . Each Party shall provide to the other Party on a timely basis all information reasonably required to meet its schedule for the preparation, printing,

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filing, and public dissemination of its annual financial statements and for management’s assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K and, to the extent applicable to such Party, its auditor’s audit of its internal control over financial reporting and management’s assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the Commission’s and Public Company Accounting Oversight Board’s rules and auditing standards thereunder (such assessments and audit being referred to as the “ Internal Control Audit and Management Assessments ”). Without limiting the generality of the foregoing, each Party will provide all required financial and other Information with respect to itself and its Subsidiaries to its auditors in a sufficient and reasonable time and in sufficient detail to permit its auditors to take all steps and perform all reviews necessary to provide sufficient assistance to each other Party’s auditors with respect to information to be included or contained in such other Party’s annual financial statements and to permit such other Party’s auditors and management to complete the Internal Control Audit and Management Assessments, to the extent applicable to such Party.

(2) Access to Personnel and Records . Each audited Party shall authorize, and use its commercially reasonable efforts to cause, its respective auditors to make available to the other Party’s auditors (each such other Party’s auditors, collectively, the “ Other Parties’ Auditors ”) both the personnel who performed or are performing the annual audits of such audited party (each such Party with respect to its own audit, the “ Audited Party ”) and work papers related to the annual audits of such Audited Party, in all cases within a reasonable time prior to such Audited Party’s auditors’ opinion date, so that the Other Parties’ Auditors are able to perform the procedures they consider necessary to take responsibility for the work of the Audited Party’s auditors as it relates to their auditors’ report on such other Party’s financial statements, all within sufficient time to enable such other Party to meet its timetable for the printing, filing and public dissemination of its annual financial statements. Each Party shall make available to the Other Parties’ Auditors and management its personnel and Records in a reasonable time prior to the Other Parties’ Auditors’ opinion date and other Parties’ management’s assessment date so that the Other Parties’ Auditors and other Parties’ management are able to perform the procedures they consider necessary to conduct the 2007 Internal Control Audit and Management Assessments.

(b) Amended Financial Reports . In the event a Party restates any of its financial statements that includes such Party’s audited or unaudited financial statements with respect to any balance sheet date or period of operation between January 1, 2002 and December 31, 2007, such Party will deliver to the other Party a substantially final draft, as soon as the same is prepared, of any report to be filed by such first Party with the Commission that includes such restated audited or unaudited financial statements (the “ Amended Financial Reports ”); provided , however , that such first Party may continue to revise its Amended Financial Report prior to its filing thereof with the Commission, which changes will be delivered to the other Party as soon as reasonably practicable; provided , further , however , that such first Party’s financial personnel will actively consult with the other Party’s financial personnel regarding any changes which such first Party may consider making to its Amended Financial Report and related disclosures prior to the anticipated filing of such report with the Commission, with particular focus on any changes which would have an effect upon the other Party’s financial statements or related disclosures. Each Party will reasonably cooperate with, and permit and make any necessary employees available to, the other Party, in connection with the other Party’s preparation of any Amended Financial Reports.

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(c) Financials; Outside Auditors . If any Party or member of its respective Group is required, pursuant to Rule 3-09 of Regulation S-X or otherwise, to include in its Exchange Act filings audited financial statements or other information of the other Party or member of the other Party’s Group, the other Party shall use its commercially reasonable efforts (i) to provide such audited financial statements or other information, and (ii) to cause its outside auditors to consent to the inclusion of such audited financial statements or other information in the Party’s Exchange Act filings.

(d) Third Party Agreements . Nothing in this Section 5.3 shall require any Party to violate any agreement with any third party regarding the confidentiality of confidential and proprietary information relating to that third party or its business; provided , however , that in the event that a Party is required under this Section 5.3 to disclose any such information, such Party shall use commercially reasonable efforts to seek to obtain such third party’s consent to the disclosure of such information.

Section 5.4. No Restrictions on Corporate Opportunities .

(a) In the event that ASD or any other member of the ASD Group, or any director or officer of ASD or any other member of the ASD Group, acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both ASD or any other member of the ASD Group and WABCO or any other member of the WABCO Group, neither ASD nor any other member of the ASD Group, nor any director or officer of ASD or any other member of the ASD Group, shall have any duty to communicate or present such corporate opportunity to WABCO or any other member of the WABCO Group and shall not be liable to WABCO or any other member of the WABCO Group or to WABCO’s stockholders for breach of any fiduciary duty as a stockholder of WABCO or an officer or director thereof by reason of the fact that ASD or any other member of the ASD Group pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person or entity, or does not present such corporate opportunity to WABCO or any other member of the WABCO Group.

(b) In the event that WABCO or any other member of the WABCO Group, or any director or officer of WABCO or any other member of the WABCO Group, acquires knowledge of a potential transaction or matter that may be a corporate opportunity for both ASD or any other member of the ASD Group and WABCO or any other member of the WABCO Group, neither WABCO nor any other member of the WABCO Group, nor any director or officer of WABCO or any other member of the WABCO Group, shall have any duty to communicate or present such corporate opportunity to ASD or any other member of the ASD Group and shall not be liable to ASD or any other member of the ASD Group or to ASD’s stockholders for breach of any fiduciary duty as a stockholder of ASD or an officer or director thereof by reason of the fact that WABCO or any other member of the WABCO Group pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person or entity, or does not present such corporate opportunity to ASD or any other member of the ASD Group.

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(c) For the avoidance of doubt, to the extent that any person who is a director or officer of ASD or any other member of the ASD Group is also a director or officer of WABCO or any other member of the WABCO Group, such person shall have no duty to communicate or present any corporate opportunity of which he or she acquires knowledge to WABCO or any other member of the WABCO Group and shall not be liable to WABCO or any other member of the WABCO Group or to WABCO’s stockholders for breach of any fiduciary duty as an officer or director of WABCO by reason of the fact that ASD or any other member of the ASD Group pursues or acquires such corporate opportunity, directs such corporate opportunity to another person or entity, or does not present such corporate opportunity to WABCO or any other member of the WABCO Group.

(d) For the purposes of this Section 5.4 , “ corporate opportunities ” of WABCO or any other member of the WABCO Group shall include, but not be limited to, business opportunities that WABCO or any other member of the WABCO Group are financially able to undertake, that are, by their nature, in a line of business of WABCO or any other member of the WABCO Group, including the VCS Business, are of practical advantage to them and are ones in which WABCO or any other member of the WABCO Group have an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of ASD or any other member of the ASD Group or any of their officers or directors will be brought into conflict with that of WABCO or any other member of the WABCO Group, and “ corporate opportunities ” of ASD or any other member of the ASD Group shall include, but not be limited to, business opportunities that ASD or any other member of the ASD Group are financially able to undertake, that are, by their nature, in a line of business of ASD or any other member of the ASD Group, including the Remainco Business, are of practical advantage to them and are ones in which ASD or any other member of the ASD Group have an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of WABCO or any other member of the WABCO Group or any of their officers or directors will be brought into conflict with that of ASD or any other member of the ASD Group.

ARTICLE VI

RELEASES AND INDEMNIFICATION

Section 6.1. Release of Pre-Distribution Claims .

(a) Except (i) as provided in Section 6.1(b) , (ii) as may be otherwise provided in any Ancillary Agreement and (iii) for any matter for which any Party is entitled to indemnification or contribution pursuant to this ARTICLE VI , each Party, for itself and each member of its respective Group, their respective Affiliates and all Persons who at any time prior to the Effective Time were directors, officers, agents or employees of any member of their respective Group (in each case, in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, do hereby remise, release and forever discharge the other Party and the other members of such other Parties’ Group, their respective Affiliates and all Persons who at any time prior to the Effective Time were shareholders, directors, officers, agents or employees of any member of such other Parties (in each case, in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever,

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whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, including for fraud, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Effective Time, including in connection with all activities to implement the Distribution, the Separation and any of the other transactions contemplated hereunder and under any of the Ancillary Agreements.

(b) Nothing contained in Section 6.1(a) shall impair or otherwise affect any right of any Party, and as applicable, a member of the Party’s Group to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings unrelated to the Separation and Distribution and explicitly contemplated in this Agreement or any Ancillary Agreement to continue in effect after the Effective Time. In addition, nothing contained in Section 6.1(a) shall release any person from:

(i) any Liability assumed, transferred by, or assigned or allocated to, a Party or a member of such Party’s Group pursuant to or contemplated by this Agreement or any Ancillary Agreement including (A) with respect to ASD, any Remainco Liability and (B) with respect to WABCO, any VCS Liability;

(ii) any Liability provided in or resulting from any other Contract or understanding that is entered into after the Effective Time between one Party (and/or a member of such Party’s Group), on the one hand, and the other Party (and/or a member of such Party’s Group), on the other hand;

(iii) any Liability that the Parties may have with respect to indemnification or contribution pursuant to this Agreement or otherwise for claims brought against the Parties by a third-party, which Liability shall be governed by the provisions of this ARTICLE VI and, if applicable, the appropriate provisions of the Ancillary Agreements;

(iv) any Liability with respect to any Continuing Arrangements.

In addition, nothing contained in Section 6.1(a) shall release ASD from indemnifying any director, officer or employee of WABCO who was a director, officer or employee of ASD or any of its Affiliates on or prior to the Effective Time, to the extent such director, officer or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification pursuant to obligations existing prior to the Effective Time, it being understood that if the underlying obligation giving rise to such Action is a VCS Liability, WABCO shall indemnify ASD for such Liability (including ASD’s costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this ARTICLE VI .

(c) Each Party shall not, and shall not permit any member of its Group to, make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against any other Party or any member of any other Party’s Group, or any other Person released pursuant to Section 6.1(a) , with respect to any and all Liabilities released pursuant to Section 6.1(a) .

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(d) It is the intent of each Party, by virtue of the provisions of this Section 6.1 , to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Effective Time, whether known or unknown, between one Party (and/or a member of such Party’s Group) and the other Party (and/or a member of such other Party’s or parties’ Group) (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Effective Time), except as specifically set forth in Section 6.1(a) and 6.1(b) .

(e) If any Person associated with a Party (including any director, officer or employee of a Party) initiates an Action with respect to claims released by this Section 6.1 , the Party with which such Person is associated shall indemnify the other Party against such Action in accordance with the provisions set forth in this ARTICLE VI .

(f) At any time, at the request of any other Party, each Party shall cause each member of its respective Group and to the extent practicable each other Person on whose behalf it released Liabilities pursuant to this Section 6.1 to execute and deliver releases reflecting the provisions hereof.

Section 6.2. Indemnification by ASD . Except as otherwise specifically set forth in any provision of this Agreement or any Ancillary Agreement or as set forth in Schedule 6.2, following the Effective Time, ASD shall indemnify, defend and hold harmless the WABCO Indemnitees from and against any and all Indemnifiable Losses arising out of, by reason of or otherwise in connection with (i) the Remainco Liabilities or (ii) any breach by any member of the ASD Group of any provision of this Agreement or any Ancillary Agreement, unless such Ancillary Agreement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder.

Section 6.3. Indemnification by WABCO . Except as otherwise specifically set forth in any provision of this Agreement or of any Ancillary Agreement, WABCO shall indemnify, defend and hold harmless the ASD Indemnitees from and against any and all Indemnifiable Losses arising out of, by reason of or otherwise in connection with (i) the VCS Liabilities or (ii) any breach by WABCO or any member of the WABCO Group of any provision of this Agreement or any Ancillary Agreement, unless such Ancillary Agreement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder; provided , however , that a claim for indemnification of any Indemnifiable Matter (as such term is defined in the Indemnification and Cooperation Agreement) may be made against WABCO hereunder but only after any such claim has not been satisfied pursuant to the provisions of the Indemnification and Cooperation Agreement and may include all Indemnifiable Losses in respect thereto, including attorney’s fees incurred in connection with ASD’s enforcement of its rights hereunder.

Section 6.4. Procedures for Indemnification .

(a) An Indemnitee shall give the Indemnifying Party notice of any matter that an Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement (other than a Third Party Claim which shall be governed by Section 6.4(b) ), within ten (10) Business Days of such determination, stating the amount of the Loss claimed, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed by such Indemnitee or arises; provided , however , that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying

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Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred during the period in which the Indemnitee failed to give such notice).

(b) Third Party Claims . If a claim or demand is made against an ASD Indemnitee or a WABCO Indemnitee (each, an “ Indemnitee ”) by any Person who is not a party to this Agreement or an Affiliate of a Party (a “ Third Party Claim ”) as to which such Indemnitee is or may be entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Party which is or may be required pursuant to this ARTICLE VI or pursuant to any Ancillary Agreement to make such indemnification (the “ Indemnifying Party ”) in writing, and in reasonable detail, of the Third Party Claim promptly (and in any event within ten (10) Business Days) after receipt by such Indemnitee of written notice of the Third Party Claim; provided , however , that the failure to provide notice of any such Third Party Claim pursuant to this sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been materially prejudiced as a result of such failure (except that the Indemnifying Party or Parties shall not be liable for any expenses incurred during the period in which the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim.

(c) Other than in the case of a Liability being managed by a Party in accordance with any Ancillary Agreement, an Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, that is reasonably acceptable to the applicable Indemnitees, if it gives notice of its intention to do so to the applicable Indemnitees within thirty (30) days of the receipt of such notice from such Indemnitees. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, at its own expense and, in any event, shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party. In the event of a conflict of interest between the Indemnifying Party and the applicable Indemnitee(s), or in the event that any Third Party Claim seeks equitable relief which would restrict or limit the future conduct of the Indemnitee’s business or operations, such Indemnitee(s) shall be entitled to retain, at the Indemnifying Party’s Expense, separate counsel as required by the applicable rules of professional conduct and to participate in (but not control) the defense, compromise, or settlement of that portion of the Third Party Claim that seeks equitable relief with respect to the Indemnitee(s).

(d) If an Indemnifying Party elects not to assume responsibility for defending a Third Party Claim, or fails to notify an Indemnitee of its election as provided in Section 6.4(c) , such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party. If the Indemnitee is conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in such defense and make available to

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the Indemnitee all witnesses, pertinent Information, material and information in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnitee.

(e) Unless the Indemnifying Party has failed to assume the defense of the Third Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third Party Claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed. If an Indemnifying Party has failed to assume the defense of the Third Party Claim within the time period specified in clause (c) above, it shall not be a defense to any obligation to pay any amount in respect of such Third Party Claim that the Indemnifying Party was not consulted in the defense thereof, that such Indemnifying Party’s views or opinions as to the conduct of such defense were not accepted or adopted, that such Indemnifying Party does not approve of the quality or manner of the defense thereof or that such Third Party Claim was incurred by reason of a settlement rather than by a judgment or other determination of liability.

(f) In the case of a Third Party Claim, no Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third Party Claim without the consent (not to be unreasonably withheld) of the Indemnitee if the effect thereof is to permit any injunction, declaratory judgment, other order or other nonmonetary relief to be entered, directly or indirectly, against any Indemnitee.

(g) Except as otherwise provided in Section 11.20 , absent fraud or willful misconduct by an Indemnifying Party, the indemnification provisions of this ARTICLE VI shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or losses resulting from any breach of this Agreement (including with respect to monetary or compensatory damages or losses arising out of or relating to, as the case may be, any VCS Liability or Remainco Liability), and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this ARTICLE VI against any Indemnifying Party.

(h) Notwithstanding the foregoing, to the extent any Ancillary Agreement or Schedule 6.2 provides procedures for indemnification that differ from the provisions set forth in this Section 6.4, the terms of the Ancillary Agreement or Schedule 6.2 will govern.

(i) Any Indemnitee that has made a claim for indemnification pursuant to this section 6.4 shall use commercially reasonable efforts to mitigate any Indemnifiable Losses in respect thereof.

Section 6.5. Indemnification Payments . Indemnification required by this ARTICLE VI shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or an Indemnifiable Loss or Liability incurred.

Section 6.6. Additional Matters; Survival of Indemnities .

(a) The indemnity and contribution agreements contained in this ARTICLE VI shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee; and (ii) the knowledge by the Indemnitee of Liabilities for which it might be entitled to indemnification or contribution hereunder.

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(b) The rights and obligations of each Party and their respective Indemnitees under this ARTICLE VI shall survive the sale or other transfer by any Party or its Affiliates of any Assets or businesses or the assignment by it of any and all Liabilities.

ARTICLE VII

CONFIDENTIALITY; ACCESS TO INFORMATION

Section 7.1. Provision of Corporate Records . Other than in circumstances in which indemnification is sought pursuant to ARTICLE VI (in which event the provisions of such Article will govern) and without limiting the applicable provisions of ARTICLE VI , and subject to appropriate restrictions for classified, privileged or Confidential Information:

(a) After the Effective Time, upon the prior written request by WABCO for specific and identified Information which relates to (x) WABCO or the conduct of the VCS Business, as the case may be, up to the Effective Time, or (y) any Ancillary Agreement to which ASD and WABCO are parties, ASD shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if the Party making the request has a reasonable need for such originals) in the possession or control of ASD or any of its Affiliates, but only to the extent such items so relate and are not already in the possession or control of the requesting Party.

(b) After the Effective Time, upon the prior written request by ASD for specific and identified Information which relates to (x) ASD or the conduct of the Remainco Business up to the Effective Time, or (y) any Ancillary Agreement to which WABCO and ASD are parties, WABCO shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if the Party making the request has a reasonable need for such originals) in the possession or control of WABCO or any of its Affiliates, but only to the extent such items so relate and are not already in the possession or control of the requesting Party.

Section 7.2. Access to Information . Other than in circumstances in which indemnification is sought pursuant to ARTICLE VI (in which event the provisions of such Article will govern) and without limiting the applicable provisions of ARTICLE VI , from and after the Effective Time, each of ASD and WABCO shall afford to the other and its authorized accountants, counsel and other designated representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information and to the requirements of any applicable state and/or federal regulation such as a Code of Conduct or Standard of Conduct, to the personnel, properties, and Information of such Party and its Subsidiaries insofar as such access is reasonably required by the other Party, and only for the duration such access is required, and relates to (x) such other Party or the conduct of its business prior to the Effective Time or (y) any Ancillary Agreement to which each of the Party requesting such access and the Party requested to grant such access are Parties. Nothing in this Section 7.2 shall require any Party to violate any agreement with any third party regarding

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the confidentiality of confidential and proprietary information relating to that third party or its business; provided , however , that in the event that a Party is required to disclose any such information, such Party shall use commercially reasonable efforts to seek to obtain such third party Consent to the disclosure of such information. Each of ASD and WABCO shall inform their respective officers, employees, agents, consultants, advisors, authorized accountants, counsel and other designated representatives who have or have access to the other Party’s Confidential Information of their obligation to hold such information confidential to the same extent as is applicable to the Parties.

Section 7.3. Witness Services . At all times from and after the Effective Time, each of ASD and WABCO shall use its commercially reasonable efforts to make available to the other, upon reasonable written request, its and its Subsidiaries’ officers, directors, employees and agents as witnesses to the extent that (i) such Persons may reasonably be required to testify in connection with the prosecution or defense of any Action in which the requesting Party may from time to time be involved (except for claims, demands or Actions between members of each Group) and (ii) there is no conflict in the Action between the requesting Party and the other Party except for the time and effort required in connection with the services of the officers, directors and employees and agents of the other Party.

Section 7.4. Confidentiality .

(a) Notwithstanding any termination of this Agreement, for a period of five (5) years from the Effective Time the Parties shall hold, and shall cause each of their respective Subsidiaries to hold, and shall each cause their respective officers, employees, agents, consultants and advisors to hold, in strict confidence, and not to disclose or release or use, for any ongoing or future commercial purpose, without the prior written consent of the other Party, any and all Confidential Information concerning any other Party; provided , that the Parties may disclose, or may permit disclosure of, Confidential Information (i) to their respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such information for auditing and other non-commercial purposes and are informed of their obligation to hold such information confidential to the same extent as is applicable to the Parties and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if the Parties or any of their respective Subsidiaries are required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule, or (iii) as necessary in order to permit a Party to prepare and disclose its financial statements, or other required disclosures; provided , further , that each Party (and members of its Group as necessary) may use, or may permit use of, Confidential Information of the other Party in connection with such first Party performing its obligations, or exercising its rights, under this Agreement or any Ancillary Agreement. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made pursuant to clause (ii) above, each Party, as applicable, shall promptly notify the other of the existence of such request or demand and shall provide the other a reasonable opportunity to seek an appropriate protective order or other remedy, which such Parties will cooperate in obtaining. In the event that such appropriate protective order or other remedy is not obtained, the Party whose Confidential Information is required to be disclosed shall or shall cause the other applicable Party or Parties to furnish, or cause to be furnished, only that portion of the Confidential Information that is legally required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such information.

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(b) Notwithstanding anything to the contrary set forth herein, (i) the Parties shall be deemed to have satisfied their obligations hereunder with respect to Confidential Information if they exercise the same degree of care (but no less than a reasonable degree of care) as they take to preserve confidentiality for their own similar information and (ii) confidentiality obligations provided for in any agreement between each Party or its Subsidiaries and their respective employees shall remain in full force and effect. Notwithstanding anything to the contrary set forth herein, Confidential Information of any Party in the possession of and used by any other Party as of the Effective Time may continue to be used by such Party in possession of the Confidential Information in and only in the operation of the VCS Business or the Remainco Business, as the case may be; provided , such Confidential Information may be used only so long as the Confidential Information is maintained in confidence and not disclosed in violation of Section 7.4(a) . Such continued right to use may not be transferred (directly or indirectly) to any third party without the prior written consent of the applicable Party, except pursuant to Section 11.9 .

(c) Each Party acknowledges that it and the other members of its Group may have in their possession confidential or proprietary information of third parties that was received under confidentiality or non-disclosure agreements with such third party prior to the Effective Time. Such Party will hold, and will cause the other members of its Group and their respective representatives to hold, in strict confidence the confidential and proprietary information of third parties to which they or any other member of their respective Groups has access, in accordance with the terms of any agreements entered into prior to the Effective Time between one or more members of the such Party’s Group (whether acting through, on behalf of, or in connection with, the separated Businesses) and such third parties.

(d) Upon the written request of a Party, the other Party shall promptly, (i) deliver to such requesting Party all original Confidential Information (whether written or electronic) concerning such requesting Party and/or its Subsidiaries, and (ii) if specifically requested by such requesting Party, destroy any copies of such Confidential Information (including any extracts there from). Upon the written request of such requesting Party, the other Party shall cause one of its duly authorized officers to certify in writing to such requesting Party that the requirements of the preceding sentence have been satisfied in full.

Section 7.5. Privileged Matters .

(a) Pre-Separation Services . The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the ASD Group and the WABCO Group, and that each of the members of the ASD Group and the WABCO Group should be deemed to be the client with respect to such pre-separation services for the purposes of asserting all privileges which may be asserted under applicable Law.

(b) Post-Separation Services . The Parties recognize that legal and other professional services will be provided following the Effective Time which will be rendered

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solely for the benefit of ASD or WABCO or their successors or assigns, as the case may be. With respect to such post-separation services, the Parties agree as follows:

(i) ASD shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the Remainco Business, whether or not the privileged information is in the possession of or under the control of ASD or WABCO. ASD shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Remainco Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by ASD, whether or not the privileged information is in the possession of or under the control of ASD or WABCO or their successors or assigns; and

(ii) WABCO shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the VCS Business, whether or not the privileged information is in the possession of or under the control of ASD or WABCO or their successors or assigns. WABCO shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting VCS Liabilities, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by WABCO, whether or not the privileged information is in the possession of or under the control of ASD or WABCO or their successors or assigns.

(c) The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 7.5 , with respect to all privileges not allocated pursuant to the terms of Section 7.5(b) . All privileges relating to any claims, proceedings, litigation, disputes, or other matters which involve both ASD and WABCO in respect of which both Parties retain any responsibility or Liability under this Agreement, shall be subject to a shared privilege among them.

(d) No Party may waive any privilege which could be asserted under any applicable Law, and in which any other Party has a shared privilege, without the consent of the other Party, which shall not be unreasonably withheld or delayed or as provided in subsections (e) or (f) below. Consent shall be in writing, or shall be deemed to be granted unless written objection is made within twenty (20) days after notice upon the other Party requesting such consent.

(e) In the event of any litigation or dispute between or among any of the Parties, or any members of their respective Groups, either such Party may waive a privilege in which the other Party or member of such Group has a shared privilege, without obtaining the consent of the other Party; provided , that such waiver of a shared privilege shall be effective only as to the use of information with respect to the litigation or dispute between the relevant Parties and/or the applicable members of their respective Groups, and shall not operate as a waiver of the shared privilege with respect to third parties.

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(f) If a dispute arises between or among the Parties or their respective Subsidiaries regarding whether a privilege should be waived to protect or advance the interest of any Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other Parties, and shall not unreasonably withhold consent to any request for waiver by another Party. Each Party specifically agrees that it will not withhold consent to waiver for any purpose except to protect its own legitimate interests.

(g) Upon receipt by any Party or by any Subsidiary thereof of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject to a shared privilege or as to which another Party has the sole right hereunder to assert a privilege, or if any Party obtains knowledge that any of its or any of its Subsidiaries’ current or former directors, officers, agents or employees have received any subpoena, discovery or other requests which arguably calls for the production or disclosure of such privileged information, such Party shall promptly notify the other Party or Parties of the existence of the request and shall provide the other Party or Parties a reasonable opportunity to review the information and to assert any rights it or they may have under this Section 7.5 or otherwise to prevent the production or disclosure of such privileged information.

(h) The transfer of all Information pursuant to this Agreement is made in reliance on the agreement of ASD and WABCO as set forth in Section 7.4 and Section 7.5 , to maintain the confidentiality of privileged information and to assert and maintain all applicable privileges. The access to information being granted pursuant to Section 7.1 and Section 7.2 hereof, the agreement to provide witnesses and individuals pursuant to Section 7.3 hereof, the furnishing of notices and documents and other cooperative efforts contemplated by Section 7.5 hereof, and the transfer of privileged information between and among the Parties and their respective Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

Section 7.6. Ownership of Information . Any information owned by one Party or any of its Subsidiaries that is provided to a requesting Party pursuant to this ARTICLE VII shall be deemed to remain the property of the providing Party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.

Section 7.7. Other Agreements . The rights and obligations granted under this ARTICLE VII are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of information, or privileged matter with respect thereto, set forth in any Ancillary Agreement.

ARTICLE XIII

DISPUTE RESOLUTION

Section 8.1. Negotiation .

(a) In the event of a controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity, termination or

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breach of this Agreement or otherwise arising out of, or in any way related to this Agreement or the transactions contemplated hereby, including any claim based on contract, tort, statute or constitution (but excluding any controversy, dispute or claim arising out of any Contract relating to the use or lease of real property if any third party is a necessary party to such controversy, dispute or claim) (collectively, “ Agreement Disputes ”), the general counsel or chief legal officer (as appropriate) of the relevant Parties (or such other executive officer designated by the relevant Party) shall negotiate for a reasonable period of time to settle such Agreement Dispute; provided , that (i) such reasonable period shall not, unless otherwise agreed by the relevant Parties in writing, exceed forty-five (45) days from the time of receipt by a Party of written notice of such Agreement Dispute (“ Dispute Notice ”) and (ii) the relevant employees from both Parties with knowledge and interest in the dispute shall first have tried to resolve the differences between the Parties. Within thirty (30) days of receipt of the Dispute Notice, the receiving Party shall submit to the other Party a written response. The Dispute Notice and the response shall each include a statement of the Party’s position, a general summary of the arguments supporting that position, the name and title of the executive who will represent the party and any other person(s) who will attend settlement meetings.

(b) In the event of any Agreement Dispute with respect to which a Dispute Notice has been delivered in accordance with this Section 8.1 , and if arbitration proceedings are initiated pursuant to Section 8.2 within 180 days following receipt of the Dispute Notice, (i) the relevant Parties shall not assert the defenses of statute of limitations and laches with respect to the period beginning after the date of receipt of the Dispute Notice, and (ii) any contractual time period or deadline under this Agreement or any Ancillary Agreement to which such Agreement Dispute relates occurring after the Dispute Notice is received shall not be deemed to have passed until such Agreement Dispute has been resolved. Nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences and discussions in connection with efforts to settle an Agreement Dispute that is not otherwise independently discoverable shall be offered or received as evidence or used for impeachment or for any other purpose in any arbitration, but shall be considered as to have been disclosed for settlement purposes.

Section 8.2. Arbitration . If the Agreement Dispute has not been resolved for any reason after thirty (30) days have elapsed from the receipt by a Party of a Dispute Notice, such Agreement Dispute shall be exclusively and finally determined, at the request of any relevant Party, by arbitration conducted where the Parties agree it would be most convenient, and in the absence of agreement in New York City, before and in accordance with the CPR Rules for Non-Administered Arbitration then currently in effect, except as modified herein (the “ Rules ”).

Section 8.3. Selection of Arbitrator(s) . In the event that any Party’s claim or counterclaims equals or exceed $2 million, exclusive of interest or attorneys’ fees, the Agreement Dispute shall be heard and determined by three (3) arbitrators; otherwise, the Agreement Dispute shall be heard and determined by one (1) arbitrator. In the event that one arbitrator shall hear the Agreement Dispute, the Parties shall attempt to agree upon a qualified individual to serve as arbitrator. If the Parties are unable to agree on an arbitrator within 30 days of the receipt by respondent of a copy of the demand for arbitration, then the arbitrator shall be selected and appointed by the International Institute for Conflict Prevention & Resolution (“ CPR ”) in accordance with the listing and ranking method in the Rules, and in any such procedure, each party shall be given a limited number of strikes, excluding strikes for cause. In the event that

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three arbitrators shall hear the Agreement Dispute, and if there are only two Parties to the arbitration, each Party shall appoint its arbitrator within twenty (20) days of receipt by respondent of a copy of the demand for arbitration. The two party-appointed arbitrators shall have twenty (20) days from the appointment of the second arbitrator to agree on a third arbitrator who shall chair the arbitral tribunal. Any arbitrator not timely appointed by the Parties shall be appointed by the CPR in accordance with the listing and ranking method in the Rules, and in any such procedure, each party shall be given a limited number of strikes, excluding strikes for cause. If any appointed arbitrator declines, resigns, becomes incapacitated, or otherwise refuses or fails to serve or to continue to serve as an arbitrator, the Party or arbitrators entitled to appoint such arbitrator shall promptly appoint a successor. In the event that an arbitrator is objected to, CPR shall decide whether such objection is valid and whether the challenged arbitrator shall be removed. Any controversy concerning the jurisdiction of the arbitrator(s), whether an Agreement Dispute is arbitrable, whether arbitration has been waived, whether an assignee of this Agreement is bound to arbitrate, or as to the interpretation of enforceability of this ARTICLE VIII shall be determined by the arbitrator(s).

Section 8.4. Arbitration Procedures . The arbitrator(s) shall attempt to resolve the disputed based on pleadings, sworn statements and other written materials without the need for live hearings. In the event the arbitrator(s) determine that oral argument is beneficial to the arbitrator(s) understanding of the issues, oral argument may be conducted. In the event the arbitrator(s) determine that live hearings are necessary for the proper resolution of the dispute, a hearing shall be conducted. Any oral argument to be conducted shall be held no later than 150 days following appointment of the arbitrator(s). Any hearing to be conducted shall be held no later than 180 days following appointment of the arbitrator(s).

Section 8.5. Discovery . The arbitrator(s), consistent with the expedited nature of arbitration, shall permit discovery only if there is clear and convincing evidence that discovery is necessary. If the arbitrator(s) so determine, they may permit limited document discovery and no more than three depositions per party of no more than 8 hours each. Notwithstanding the foregoing, each Party will, upon the written request of the other Party, promptly provide the other with copies of documents on which the producing Party may rely in support of a claim or defense or which are relevant to the issues raised in the Agreement Dispute. All discovery, if any, shall be completed within 90 days following the appointment of the arbitrator(s). Adherence to formal rules of evidence shall not be required and the arbitrator(s) shall consider any evidence and testimony that the arbitrator(s) determine to be relevant, in accordance with the Rules and procedures that the arbitrator(s) determine to be appropriate. In resolving any Agreement Dispute, the Parties intend that the arbitrator(s) shall apply the substantive Laws of the State of New York, without regard to any choice of law principles thereof that would mandate the application of the laws of another jurisdiction. The Parties intend that the provisions to arbitrate set forth herein be valid, enforceable and irrevocable, and any award rendered by the arbitrator(s) shall be final and binding on the Parties. The Parties agree to comply and cause the members of their applicable Group to comply with any award made in any such arbitration proceedings and agree to enforcement of or entry of judgment upon such award, in any court of competent jurisdiction.

Section 8.6. Confidentiality of Proceedings . Without limiting the provisions of the Rules, unless otherwise agreed in writing by or among the relevant Parties or permitted by this

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Agreement, the relevant Parties shall keep, and shall cause the members of their applicable Group to keep, confidential all matters relating to the arbitration or the award. All negotiations, conferences and discussions pursuant to this ARTICLE VIII shall be treated as compromise and settlement negotiations; provided, that such matters may be disclosed (i) to the extent reasonably necessary in any proceeding brought to enforce this agreement to arbitrate or any arbitral award or for entry of a judgment upon the award and (ii) to the extent otherwise required by Law or regulatory authority.

Section 8.7. Pre-Hearing Procedure and Disposition . Nothing contained herein is intended to or shall be construed to prevent any Party, from applying to any court of competent jurisdiction for interim measures or other provisional relief in connection with the subject matter of any Agreement Disputes, including to compel a party to arbitrate any Agreement Dispute or to require witnesses to obey subpoenas issued by the arbitrator(s). Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect. The Parties agree to accept and honor any orders relating to interim or provisional remedies that are issued by the arbitrator(s) and agree that any such interim order or remedy may be enforced, as necessary, in any court of competent jurisdiction.

Section 8.8. Continuity of Service and Performance . During the course of dispute resolution pursuant to the provisions of this ARTICLE VIII , the Parties will continue to provide all other services and honor all other commitments under this Agreement and each Ancillary Agreement with respect to all matters not subject to such dispute resolution.

Section 8.9. Awards . The arbitrator(s) shall make an award and issue a reasoned opinion in writing setting forth the basis for such award within 30 days following the submission of all written materials in support of and in opposition to any claim, or if there is a hearing, within 30 days of such hearing. The arbitrator(s) shall be entitled, if appropriate, to award any remedy in such proceedings that is permitted under this Agreement and applicable law, including monetary damages, specific performance and other forms of legal and equitable relief. The Parties hereby waive any claim to exemplary, punitive, multiple or similar damages in excess of compensatory damages, attorneys’ fees, costs and expenses of arbitration, except as may be expressly required by statute or as necessary to indemnify a Party for a Third Party Claim and the arbitrator(s) are not empowered to and shall not award such damages. Any final award must provide that the party against whom an award is issued shall comply with the order within a specified period of time, not to exceed 30 days.

Section 8.10. Costs . If any Party attempts, unsuccessfully, to prevent an Arbitration Dispute from being arbitrated such Party shall reimburse the prevailing party for all costs incurred in compelling arbitration. Except as otherwise may be provided in any Ancillary Agreement, the costs of arbitration pursuant to this Article VIII shall be borne by the non-prevailing Party as determined by the arbitrator.

Section 8.11. Adherence to Time Limits . In accepting appointment, an arbitrator shall commit that his or her schedule permits him or her to devote the reasonably necessary time and

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attention to the arbitration proceedings and to resolving the Agreement Dispute within the time periods set by this Agreement and by the Rules. Any time limits set out in this ARTICLE VIII or in the Rules may be modified upon written agreement of the parties and the arbitrator(s) or by order of the arbitrator(s) for good cause shown. Any failure of the arbitrator(s) to comply with such time limits or to render a final award within the time specified shall not impair the validity of the award or cause the award to be void or voidable, nor shall it be a basis for challenge of the validity or enforceability of the award or of the arbitration proceedings.

Section 8.12. Limitation on Actions . Notwithstanding anything to the contrary in this Agreement, (a) no Action shall be commenced (including the dispute resolution procedures set forth in this Article VIII) by an Indemnitee against an Indemnifying Party or any of their respective Affiliates more than 12 months after the Indemnitee acquires, or reasonably should have acquired, knowledge of the facts giving rise to its right to indemnification under Article VI (it being understood that if no such Action is commenced within such 12-month period, the Indemnifying Party shall be discharged from liability for such claim); and (b) no Action shall be commenced (including the dispute resolution procedures set forth in this Article VIII) by a Party against the other Party asserting any claim arising from breach of any obligation of such other Party under this Agreement more than 12 months after such first Party acquires, or reasonably should have acquired, knowledge of such breach, provided, however, regardless of such first Party’s knowledge of the facts giving rise to its claim based on a breach of this Agreement, no Action shall be commenced by such first Party against the other Party more than 36 months after the occurrence of the initial event giving rise to such claim for such breach (it being understood that if no such Action is commenced within such 12-month or 36-month periods, as applicable, the breaching Party shall be discharged from liability for such breach).

ARTICLE IX

INSURANCE

Section 9.1. Policies and Allocation of Related Rights and Obligations . WABCO acknowledges and agrees on its own behalf, and on behalf of each other member of the WABCO Group, that (i) neither WABCO nor any other member of the WABCO Group has any rights to or under any Third Party Shared Policy, except as expressly provided in this ARTICLE IX and (ii) nothing in this ARTICLE IX shall be deemed to constitute (or to reflect) an assignment of any rights to or under any Third Party Shared Policy. Notwithstanding anything to the contrary herein, all rights to or under insurance policies of any type or description in respect of any and all asbestos-related Liabilities shall be addressed in accordance with Schedule 6.2.

Section 9.2. Third Party Shared Policies .

(a) With respect to Third Party Shared Policies of workers’ compensation, automobile liability, general/product liability, excess/umbrella liability, directors & officers, crime or fiduciary liability for claims that arise out of insured events with an occurrence date prior to the Effective Time, to the extent reasonably possible, ASD will, or will cause the applicable insurance companies or members of the ASD Group that are insured thereunder to (i) continue to provide WABCO and any other member of the WABCO Group with access to and coverage under the applicable Third Party Shared Policies, and (ii) reasonably cooperate with WABCO and take commercially reasonable actions as may be necessary or advisable to assist WABCO in submitting such claims under the applicable Third Party Shared Policies; provided , that WABCO

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shall be responsible for any and all deductibles, self-insured retentions, retrospective premiums, claim-handling charges, co-payments or any other charge or fee legally due and owing relating to such claims and neither ASD nor the insurance company or member of the ASD Group shall be required to maintain such Third Party Shared Policies beyond their current terms. For the avoidance of doubt, if an occurrence date is after the Effective Time, then no payment for any damages, costs of defense, or other sums with respect to such claim shall be available to WABCO under such Third Party Shared Policies.

(b) With respect to all Third Party Shared Policies, WABCO agrees and covenants (on behalf of itself and each other member of the WABCO Group, and each other Affiliate of WABCO) not to make any claim or assert any rights against ASD and any other member of the ASD Group, or the unaffiliated third-party insurers of such Third Party Shared Policies, except as expressly provided under this Section 9.2.

Section 9.3. Administration of Third Party Shared Policies; Other Matters .

(a) Administration . With respect to all Third Party Shared Policies, from and after the Effective Time, ASD or a member of the ASD Group shall be responsible for the Insurance Administration and Claims Administration of such Third Party Shared Policies; provided , that the retention of such administrative responsibilities by ASD or a member of the ASD Group is in no way intended to limit, inhibit or preclude any right to insurance coverage for any Insured Claim of a named insured under such Third Party Shared Policies as contemplated by the terms of this Agreement; provided further , that the retention of such administrative responsibilities by ASD or a member of the ASD Group shall not relieve the Person submitting any Insured Claim of the primary responsibility for reporting such Insured Claim accurately, completely and in a timely manner, or of such Person’s authority to settle any such Insured Claim within any period permitted or required by the relevant Third Party Shared Policy. At its discretion, and in accordance with the terms of the Third Party Shared Policies, ASD may discharge its administrative responsibilities with respect to such Third Party Shared Policies by contracting for the provision of administrative services to any unaffiliated Person, including, after the Effective Time, WABCO or any of its Affiliates. ASD will use its commericially reasonable efforts to notify the appropriate member of the WABCO Group of such discharge. WABCO shall reimburse ASD for any costs incurred by ASD related to Insurance Administration and Claims Administration to the extent such costs (which include defense, out-of-pocket expenses, and direct and indirect costs of employees or agents of ASD providing the administrative services) are (i) not covered under the Third Party Shared Policies and (ii) related to VCS Liabilities. ASD or any member of the ASD Group shall not settle any Insured Claim of WABCO or any member of WABCO Group under the Third Party Shared Policies without first obtaining the approval of WABCO or such member of WABCO Group. Such approval shall not be unreasonably withheld, delayed or conditioned.

(b) Exceeding Policy Limits . Where VCS Liabilities are specifically covered under a Third Party Shared Policy for periods prior to the Effective Time, or where such Third Party Shared Policy covers claims made after the Effective Time with respect to an occurrence prior to the Effective Time, then from and after the Effective Time, WABCO may claim

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coverage for Insured Claims under such Third Party Shared Policy as and to the extent that such insurance is available up to the full extent of the applicable limits of liability of such Third Party Shared Policy (and may receive any Insurance Proceeds with respect thereto as contemplated by Section 9.3(d) ), subject to the terms of this Section 9.3 . It is expressly understood that so long as ASD is an Affiliate of WABCO prior to the Effective Time, ASD may claim such coverage on behalf of WABCO, provided that ASD will use its commercially reasonable efforts to notify WABCO of such claim.

(c) Claims Not Reimbursed . Except as set forth in this Section 9.3 , ASD and WABCO shall not be liable to one another (nor shall any member of the ASD Group be liable to any member of the WABCO Group) for claims, or portions of claims, not reimbursed by insurers under any Third Party Shared Policy for any reason not within the control of ASD or WABCO, including coinsurance provisions, deductibles, quota share deductibles, self-insured retentions, bankruptcy or insolvency of any insurance carrier(s), Third Party Shared Policy limitations or restrictions, any coverage disputes, any failure to timely file a claim by ASD or WABCO (or any of the members of their respective Groups), or any defect in such claim or its processing. The liability of ASD and WABCO to one another for such claims is expressly limited to the amount of Insurance Proceeds received with respect to such claims and allocated to the respective Parties in accordance with Section 9.4(e). It is expressly understood that the foregoing provisions in this Section 9.3(c) shall not limit any Party’s liability to any other Party for indemnification pursuant to ARTICLE VI .

(d) Allocation of Insurance Proceeds . Insurance Proceeds received with respect to claims, costs and expenses under the Third Party Shared Policies shall be paid to or on behalf of the insured under the relevant Third Party Shared Policy, which insured shall thereafter administer the Third Party Shared Policies by paying the Insurance Proceeds, as appropriate, to ASD with respect to Remainco Liabilities and WABCO with respect to VCS Liabilities. In the event that the aggregate limits on any Third Party Shared Policies are exceeded by the aggregate of outstanding Insured Claims by the Parties or members of their respective Groups, the Parties agree to allocate the Insurance Proceeds received thereunder based upon their respective percentage of the total of their bona fide claims which were covered under such Third Party Shared Policy, and any Party who has received Insurance Proceeds in excess of such Party’s respective percentage of Insurance Proceeds shall pay to the other Party the appropriate amount so that each Party will have received its respective percentage of Insurance Proceeds pursuant hereto. Each of the Parties agrees to use commercially reasonable efforts to maximize available coverage under those Third Party Shared Policies applicable to it, and to take all commercially reasonable steps to recover from all other responsible parties in respect of an Insured Claim to the extent coverage limits under a Third Party Shared Policy have been exceeded or would be exceeded as a result of such Insured Claim.

(e) Allocation of Deductibles . In the event that the Parties or members of their respective Groups have bona fide claims under any Third Party Shared Policy arising from the same occurrence and for which a deductible is payable, the Parties agree that the aggregate amount of the deductible paid shall be borne by the Parties in the same proportion which the Insurance Proceeds received by each such Party bears to the total Insurance Proceeds received under the applicable Third Party Shared Policy pursuant to Section 9.3(d) , and any Party who has paid more than such allocable share of the deductible shall be entitled to receive from the other Party an appropriate amount so that each Party has borne its allocable share of the deductible pursuant hereto.

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Section 9.4. Agreement for Waiver of Conflict and Shared Defense . In the event that Insured Claims of more than one of the Parties exist relating to the same occurrence, the Parties shall jointly defend and waive any conflict of interest necessary to the conduct of the joint defense. Nothing in this ARTICLE IX shall be construed to limit or otherwise alter in any way the obligations of the Parties, including those created by this Agreement, by operation of Law or otherwise.

Section 9.5. Cooperation . The Parties agree to use (and cause the members in their respective Groups to use) their commercially reasonable efforts to cooperate with respect to the various insurance matters contemplated by this ARTICLE IX .

Section 9.6. Miscellaneous . Nothing in this Agreement shall be deemed to restrict WABCO or ASD, or any members of their respective Groups, from acquiring at its own expense any insurance Policy in respect of any Liabilities or covering any period. Except as otherwise provided in this Agreement, from and after the Effective Time, WABCO and ASD shall be responsible for obtaining and maintaining their respective insurance programs for their risk of loss and such insurance arrangements shall be separate programs apart from each other and each will be responsible for its own deductibles and retentions for such insurance programs. WABCO acknowledges and agrees on its own behalf, and on behalf of each member of the WABCO Group, that ASD has provided to WABCO prior to the Effective Time all information necessary for WABCO or the appropriate member of the WABCO Group to obtain such insurance policies and insurance programs necessary to cover any and all risk of loss related to the VCS Business.

ARTICLE X

PROVISIONS RELATING TO B&K SALE

Section 10.1. B&K Sale . The Parties hereto understand and acknowledge that ASD is conducting a process and exploring the possible sale of the B&K Business to one or more third parties whether by sale of stock, asset (direct or indirect) or merger, and whether the global B&K Business is sold to one or more third parties or whether the B&K Business is sold separately in regions to one or more third parties (a “ B&K Sale ”).

Section 10.2. Certain Parameters . The terms and provisions of any agreements that relate to a B&K Sale (each, a “ B&K Sale Agreement ”) may include provisions (including representations and warranties, covenants and indemnification) that could have an effect on WABCO following the Distribution and WABCO shall have no right to object to, and ASD shall be permitted to enter into any B&K Sale Agreement, containing such provisions. ASD will provide to WABCO, within ten (10) days after the execution of a B&K Sale Agreement, a copy of such agreement. ASD shall have the sole right to control the B&K Sale process and negotiate the terms of a B&K Sale.

Section 10.3. B&K Sale Proceeds . The cash proceeds from a B&K Sale received by ASD and/or any of its Subsidiaries at the closing of a B&K Sale (including any cash held by any

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of ASD Subsidiaries that are engaged in the B&K Business, collectively, the “ B&K Sale Proceeds “) shall be solely the right of ASD. Neither WABCO, nor any member of the WABCO Group or any other Person (other than ASD and the members of the ASD Group) shall have any rights to or other interest in the B&K Sale Proceeds.

ARTICLE XI

MISCELLANEOUS

Section 11.1. Complete Agreement; Construction . This Agreement, including the Exhibits and Schedules, and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. In the event of any conflict between the terms and conditions of the body of this Agreement and the terms and conditions of any Schedule, the terms and conditions of such Schedule shall control. In the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of any Ancillary Agreement, the terms and conditions of such Ancillary Agreement shall control.

Section 11.2. Ancillary Agreements . This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.

Section 11.3. Counterparts . This Agreement may be executed in more than one counterparts, all of which shall be considered one and the same agreement, and, except as otherwise expressly provided in Section 1.3 , shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Parties. Execution of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic copy of a signature shall be deemed to be, and shall have the same effect as, executed by an original signature.

Section 11.4. Survival of Agreements . Except as otherwise contemplated by this Agreement or any Ancillary Agreement, all covenants and agreements of the Parties contained in this Agreement and each Ancillary Agreement shall survive the Effective Time and remain in full force and effect in accordance with their applicable terms.

Section 11.5. Expenses .

(a) Except as otherwise expressly provided (i) in this Agreement (including paragraphs (b) and (c) of this Section 11.5 ) or (ii) the Ancillary Agreements, the Parties agree that all out-of-pocket fees and expenses (including the costs to obtain Consents) incurred and directly related to the transactions contemplated hereby, including any Liability incurred following the Separation as a result of the consummation of the Separation, shall be borne and paid by the Person incurring such cost or Liability.

(b) Each of ASD and WABCO shall be responsible for payment of its respective outside advisors for all work performed, whether in connection with the Separation or otherwise, prior to, on or after the Effective Time, provided , however , that ASD shall pay all fees earned, and all costs and expenses incurred, prior to the Effective Time directly related to the Separation by the entities listed or described on Schedule 11.5(b) and payable to such entities.

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(c) With respect to any expenses incurred pursuant to a request for further assurances granted under Section 2.10, the Parties agree that any and all fees and expenses incurred by either Party shall be borne and paid by the requesting Party; it being understood that no Party shall be obliged to incur any third-party accounting, consulting, advisor, banking or legal fees, costs or expenses, and the requesting Party shall not be obligated to pay such fees, costs or expenses, unless such fee, cost or expense shall have had the prior written approval of the requesting Party. Notwithstanding the foregoing, each Party shall be responsible for paying its own internal fees, costs and expenses (e.g., salaries of personnel). With respect to any fees, costs and expenses incurred by either Party in satisfying its obligations under Section 5.3, the requesting Party shall be responsible for the other Party’s fees, costs and expenses.

Section 11.6. Notices . All notices, requests, claims, demands and other communications under this Agreement and, to the extent applicable and unless otherwise provided therein, under each of the Ancillary Agreements, as between the Parties, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt unless the day of receipt is not a Business Day, in which case it shall be deemed to have been duly given or made on the next Business Day) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 11.6 ):

If to ASD:

American Standard Companies Inc.

1 Centennial Avenue

Piscataway, NJ 08855

U.S.A.

Attn: Mary Beth Gustafsson, General Counsel

Facsimile: +1 732.980.3377

If to WABCO:

c/o WABCO Europe BVBA

Chaussée de Wavre, 1789 Box 15

1160 Brussels

Belgium

Attn: General Counsel

Facsimile: +32 2 663 98 89

With a Copy to:

McDermott Will & Emery LLP

227 W. Monroe Street

Chicago, IL 60606

U.S.A.

Attn: Neal J. White

Facsimile: +1 312.984.7700

Section 11.7. Waivers . The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

Section 11.8. Amendments . Subject to the terms of Section 11.10 , this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

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Section 11.9. Assignment . The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted transferees and assigns. Notwithstanding the foregoing, this Agreement shall not be assignable, in whole or in part, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be null and void; provided, that (i) a Party may assign this Agreement in connection with a merger transaction in which such Party is not the surviving entity or the sale by such Party of all or substantially all of its Assets, and upon the effectiveness of such assignment the assigning Party shall be released from all of its obligations under this Agreement if the surviving entity of such merger or the transferee of such Assets shall agree in writing, in form and substance reasonably satisfactory to the other Party, to be bound by the terms of this Agreement as if named as a “Party” hereto and (ii) ASD may assign all or a portion of its rights hereunder to indemnification to one or more buyers of the B&K Business.

Section 11.10. Termination, Etc. Notwithstanding anything to the contrary herein, this Agreement (including ARTICLE VI (Indemnification) hereof) may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Effective Time by and in the sole discretion of ASD without the approval of WABCO or the stockholders of ASD. In the event of such termination, no Party shall have any Liability to any other Party or any other Person. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties.

Section 11.11. Payment Terms .

(a) Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount to be paid or reimbursed by any Party (and/or a member of such Party’s Group), on the one hand, to any other Party (and/or a member of such Party’s Group), on the other hand, under this Agreement shall be paid or reimbursed hereunder within five (5) Business Days after presentation of an invoice or a written demand therefor and setting forth, or accompanied by, reasonable documentation or other reasonable explanation supporting such amount.

(b) Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement shall bear interest at a rate per annum equal to the then effective Prime Rate plus 2% (or the maximum legal rate, whichever is lower), calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.

Section 11.12. No Circumvention . The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is to materially undermine the effectiveness of any of the provisions of this Agreement or any Ancillary Agreement (including adversely affecting the rights or ability of any Party to successfully pursue indemnification, contribution or payment pursuant to ARTICLE VI ).

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Section 11.13. Subsidiaries . Each of the Parties shall cause (or with respect to an Affiliate that is not a Subsidiary, shall use commercially reasonable efforts to cause) to be performed all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party or by any entity that becomes a Subsidiary or Affiliate of such Party on and after the Effective Time.

Section 11.14. Third Party Beneficiaries . Except as provided in ARTICLE VI relating to Indemnitees and for the release under Section 6.1 of any Person provided therein and except as specifically provided in any Ancillary Agreement, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

Section 11.15. Title and Headings . Titles and headings to Sections and Articles are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

Section 11.16. Exhibits and Schedules . The Exhibits and Schedules attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

Section 11.17. Closing . The closing and consummation of the transactions contemplated by this Agreement to occur prior to or at the Distribution shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York.

Section 11.18. Governing Law . This Agreement shall be governed by and construed in accordance with the internal Laws, and not the Laws governing conflicts of Laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law), of the State of New York.

Section 11.19. Consent to Jurisdiction . Subject to the provisions of ARTICLE VIII , each of the Parties irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York (the “ New York Courts ”), for the purposes of any suit, action or other proceeding to compel arbitration or for provisional relief in aid of arbitration in accordance with ARTICLE VIII or for provisional relief to prevent irreparable harm, and to the non-exclusive jurisdiction of the New York Courts for the enforcement of any award issued thereunder. Each of the Parties further agrees that service of any process, summons, notice or document by United States registered mail to such Party’s respective address set forth in Section 11.6 shall be effective service of process for any action, suit or proceeding in the New York Courts with respect to any matters to which it has submitted to jurisdiction in this Section 11.19 . Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the New York Courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

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Section 11.20. Specific Performance . The Parties agree that irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to (i) an injunction or injunctions to enforce specifically the terms and provisions hereof in any arbitration in accordance with ARTICLE VIII , (ii) provisional or temporary injunctive relief in accordance therewith in any New York Court, and (iii) enforcement of any such award of an arbitral tribunal or a New York Court in any court of the United States, or any other any court or tribunal sitting in any state of the United States or in any foreign country that has jurisdiction, this being in addition to any other remedy or relief to which they may be entitled.

Section 11.21. Waiver of Jury Trial . SUBJECT TO ARTICLE VIII AND SECTIONS 11.19 AND 11.20 HEREIN, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF AND PERMITTED UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.21 .

Section 11.22. Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, and the Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 11.23. Construction . The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

Section 11.24. Authorization . Each of the Parties hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of each such Party enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Separation and Distribution Agreement to be duly executed as of the day and year first above written.


AMERICAN STANDARD COMPANIES INC.

By		/s/ G. P ETER D’A LOIA
Name:		G. Peter D’Aloia
Title:		Senior Vice President and Chief Financial Officer

WABCO HOLDINGS INC.

By		/s/ U LRICH M ICHEL
Name:		Ulrich Michel
Title:		Chief Financial Officer

[Signature Page to Separation and Distribution Agreement]

Exhibit 10.1

TAX SHARING AGREEMENT

This Tax Sharing Agreement (this “ Agreement ”) is entered into as of July 16, 2007 among American Standard Companies Inc., a Delaware corporation (“ ASD ”), WABCO Holdings Inc, a Delaware corporation and wholly-owned subsidiary of ASD (“ WABCO ”), Trane L.P., a Bermuda LP treated as a corporation for U.S. federal income tax purposes (“ TBLP ”), American Standard Europe L.P., a Bermuda limited partnership treated as a corporation for U.S. federal income tax purposes (“ WLP ”), Ideal Standard Wabco Trane Indústria E Comércio Ltda., a Brazilian limited company treated as a disregarded entity for U.S. federal income tax purposes (“ Trane Brazil ”), and WABCO do Brasil Industria e Comercio de Freios Ltda., a Brazilian company treated as a corporation for U.S. federal income tax purposes (“ WABCO Brazil ” and, together with ASD, WABCO, TBLP, WLP and Trane Brazil, the “ Parties ”). Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to such terms in the Separation and Distribution Agreement, dated as of July 16, 2007, between ASD and WABCO (the “ Distribution Agreement ”).

RECITALS

WHEREAS, ASD is the common parent corporation of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”), that has filed consolidated federal income tax returns.

WHEREAS, WABCO is a newly-formed, wholly-owned subsidiary of ASD.

WHEREAS, ASD will effect the restructuring transactions described in the Distribution Agreement for the purpose of aggregating the VCS Business in the WABCO Group prior to the Distribution (collectively, the “ Reorganization ”).

WHEREAS, on the Distribution Date, ASD will distribute all of the issued and outstanding shares of WABCO Common Stock on a pro rata basis to holders of ASD Common Stock (the “ Distribution ”).

WHEREAS, the Parties intend that the Distribution will qualify as a non-taxable transaction under Section 355 of the Code, after which none of WABCO or its Subsidiaries will be a member of the ASD Group for federal income tax purposes.

WHEREAS, the Parties desire to set forth their rights and obligations with respect to Taxes (as defined herein) due for periods before and after the Distribution Date.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I. DEFINITIONS

1.01 GENERAL. As used in this Agreement, the following terms shall have the following meanings:

“ Affiliate ” shall have the meaning set forth in the Distribution Agreement.

“ Agreement ” shall have the meaning set forth in the Preamble to this Agreement.

“ ASD ” shall have the meaning set forth in the Preamble to this Agreement.

“ ASD Common Stock ” shall have the meaning set forth in the Distribution Agreement.

“ ASD Filed Tax Return ” shall have the meaning set forth in Section 2.01(a).

“ ASD Group ” shall have the meaning set forth in the Distribution Agreement.

“ ASD Taxes ” shall have the meaning set forth in Section 2.03(a).

“ B&K Business ” shall have the meaning set forth in the Distribution Agreement.

“ B&K Foreign Tax Liability ” shall have the meaning set forth in Section 2.03(a).

“ Benefit Item ” shall have the meaning set forth in Schedule 2.03(d).

“ Business Day ” shall have the meaning set forth in the Distribution Agreement.

“ Claim ” shall have the meaning set forth in Section 4.02.

“ Code ” shall have the meaning set forth in the Recitals.

“ Dispute ” shall have the meaning set forth in Section 8.01.

“ Distribution ” shall have the meaning set forth in the Recitals.

“ Distribution Agreement ” shall have the meaning set forth in the Preamble to this Agreement.

“ Distribution Date ” shall have the meaning set forth in the Distribution Agreement.

“ External Distribution Tax Liability ” shall have the meaning set forth in Section 2.03(a).

“ Final Determination ” shall mean a determination within the meaning of Section 1313 of the Code or any similar provision of state or local Tax law.

“ Foreign Taxes ” shall mean all Taxes imposed by a Taxing Authority of any jurisdiction outside of the United States.

“ Governmental Entity ” shall have the meaning set forth in the Distribution Agreement.

“ Indemnifiable Losses ” shall have the meaning set forth in the Distribution Agreement.

“ Indemnified Party ” shall have the meaning set forth in Section 4.02.

“ Indemnifying Party ” shall have the meaning set forth in Section 4.02.

“ Parties ” shall have the meaning set forth in the Preamble to this Agreement.

“ Person ” shall have the meaning set forth in the Distribution Agreement.

“ Post-Distribution Period ” shall mean any taxable year or other taxable period beginning after the Distribution Date and, in the case of any taxable year or other taxable period that begins before and ends after the Distribution Date, that part of the taxable year or other taxable period that begins at the beginning of the day after the Distribution Date.

“ Pre-Distribution Period ” shall mean any taxable year or other taxable period that ends on or before the Distribution Date and, in the case of any taxable year or other taxable period that begins before and ends after the Distribution Date, that part of the taxable year or other taxable period through the close of the Distribution Date.

“ Preliminary Tax Advisor ” shall have the meaning set forth in Section 8.01.

“ Prime Rate ” shall have the meaning set forth in the Distribution Agreement.

“ Prohibited Acts ” shall have the meaning set forth in Section 3.02.

“ Proposed Acquisition Transaction ” means a transaction or series of related transactions (or any agreement, understanding, arrangement or substantial negotiations, within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, to enter into a transaction or series of related transactions), as a result of which WABCO (or any successor thereto) would merge or consolidate with any other Person or as a result of which any Person or any group of Persons would (directly or indirectly) acquire, or have the right to acquire (through an option or otherwise) from WABCO (or any successor thereto) and/or one or more holders of WABCO common stock, respectively, any amount of stock of WABCO, that would, when combined with any other changes in ownership of the stock of WABCO pertinent for purposes of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, comprise more than thirty-five percent (35%) of the value of all outstanding stock of WABCO as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series; provided , however , that the foregoing shall not include an acquisition (other than involving a public offering) with respect to which there were no agreement, understanding, arrangement or substantial negotiations, within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, regarding the acquisition or a similar acquisition at any time during the two year period ending on the date of the Distribution. For purposes of determining whether a transaction constitutes an indirect acquisition for purposes of the first sentence of this definition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock (including any redemption of WABCO equity pursuant to the exception in Section 3.02(iii)) shall be treated as an indirect acquisition of stock by the non-exchanging

shareholders. This definition and the application thereof is intended to monitor compliance with Section 355(e) of the Code and the Treasury Regulations promulgated thereunder and shall be interpreted accordingly by the Parties in good faith.

“ Remainco Business ” shall have the meaning set forth in the Distribution Agreement.

“ Reorganization ” shall have the meaning set forth in the Recitals.

“ Restructuring Tax Liability ” shall have the meaning set forth in Section 2.03(a).

“ Ruling ” shall have the meaning set forth in Section 2.01(b).

“ Ruling Request ” shall mean the request for rulings submitted by ASD to the Internal Revenue Service on March 15, 2007, including the exhibits attached thereto, and all related supplements.

“ Subsidiary ” shall have the meaning set forth in the Distribution Agreement.

“ Tax ” or “ Taxes ” shall mean (i) all taxes, charges, fees, duties, levies, imposts, rates or other assessments or governmental charges of any kind imposed by any federal, state, local or foreign Governmental Entity, including, without limitation, income, gross receipts, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, custom duties, property, sales, use, license, capital stock, transfer, franchise, registration, payroll, withholding, social security, unemployment, disability, value added, alternative or add-on minimum or other taxes, whether disputed or not, and including any interest, penalties, charges or additions attributable thereto, (ii) liability for the payment of any amount of the type described in clause (i) above arising as a result of being (or having been) a member of any group or being (or having been) included or required to be included in any Tax Return related thereto, and (iii) liability for the payment of any amount of the type described in clauses (i) or (ii) above as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other Person.

“ Tax Advisor ” shall have the meaning set forth in Section 8.01.

“ Tax Benefit ” shall mean the reduction in Tax liability of the Indemnified Party arising in connection with any Claim determined, without duplication, as the sum of (i) the product of any deduction available to the Indemnified Party (whether or not currently used or usable) and the actual combined income tax rate of the Indemnified Party in the year the Claim arose, (ii) the amount of any refund and (iii) the amount of reduction in Taxes for any credit utilized in the year the Claim arose.

“ Tax Certificates ” shall mean certificates of officers of ASD and WABCO, dated as of July 31, 2007, provided to Skadden, Arps, Slate, Meagher & Flom LLP in connection with the Tax Opinion.

“ Tax Contest ” shall have the meaning set forth in Section 5.01.

“ Tax Cost ” shall mean the increase in Tax liability of the Indemnified Party arising in connection with any Claim determined as the product of any income or gain resulting from the payment of such Claim by the Indemnifying Party and the actual combined income tax rate of the Indemnified Party in the year the indemnification payment is accrued by the Indemnified Party.

“ Tax Information Packages ” shall mean any information required in order to prepare and file any ASD Filed Tax Return.

“ Taxing Authority ” shall mean any Governmental Entity having jurisdiction over the assessment, determination, collection or imposition of any Tax.

“ Tax Materials ” shall have the meaning set forth in Section 3.01(a).

“ Tax Opinion ” shall mean the written opinion of Skadden, Arps, Slate, Meagher & Flom LLP, dated as of July 31, 2007, regarding certain U.S. federal income tax consequences of certain transactions executed as part of the Reorganization and the Distribution.

“ Tax Return ” shall mean any return, report, certificate, form or similar statement or document (including any related supporting information or schedule attached thereto and any information return, amended tax return, claim for refund or declaration of estimated tax) required to be supplied to, or filed with, a Governmental Entity, or any bill for or notice related to ad valorem or other similar Taxes received from a Governmental Entity, in each case, in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

“ TBLP ” shall have the meaning set forth in the Preamble to this Agreement.

“ Trane Brazil ” shall have the meaning set forth in the Preamble to this Agreement.

“ Trane Brazil Contribution ” shall mean Trane Brazil’s contribution of its assets relating to the VCS Business to WABCO Brazil as part of the Reorganization.

“ VCS Assets ” shall have the meaning set forth in the Distribution Agreement.

“ VCS Business ” shall have the meaning set forth in the Distribution Agreement.

“ VCS Tax Liability ” shall have the meaning set forth in Section 2.03(a).

“ WABCO ” shall have the meaning set forth in the Preamble to this Agreement.

“ WABCO Brazil ” shall have the meaning set forth in the Preamble to this Agreement.

“ WABCO Brazil Restructuring Tax Liability ” shall have the meaning set forth in Section 2.03(b).

“ WABCO Common Stock ” shall have the meaning set forth in the Distribution Agreement.

“ WABCO Filed Tax Return ” shall have the meaning set forth in Section 2.01(b).

“ WABCO Group ” shall have the meaning set forth in the Distribution Agreement.

“ WABCO Taxes ” shall have the meaning set forth in Section 2.03(b).

“ WLP ” shall have the meaning set forth in the Preamble to this Agreement.

“ WLP Contribution ” shall mean WLP’s contribution of its assets relating to the Trane and B&K Businesses to TBLP as part of the Restructuring.

“ WLP Restructuring Tax Liability ” shall have the meaning set forth in Section 2.03(b).

1.02 INTERPRETATION. For all purposes of this Agreement: (i) the terms defined in this Agreement include the plural as well as the singular; (ii) all references in this Agreement to “Preamble”, “Recitals”, “Articles”, “Sections” and other subdivisions are to the designated Preamble, Recitals, Articles, Sections and other subdivisions of the body of this Agreement; (iii) pronouns of either gender or neuter include, as appropriate, the other pronoun forms; (iv) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; (v) “or” is not exclusive; (vi) “including” shall be deemed to be followed by “but not limited to”; and (vii) any definition of or reference to any statute shall be construed as referring also to any rules and regulations promulgated thereunder.

ARTICLE II. TAX RETURNS AND TAX PAYMENTS

2.01 OBLIGATIONS TO FILE TAX RETURNS.

(a) The ASD Group shall have the sole and exclusive responsibility for the preparation and filing of each Tax Return filed after the Distribution Date that includes any member of the ASD Group or any assets or operations of the Remainco Business other than Tax Returns listed on Schedule 2.01(a) (each, an “ ASD Filed Tax Return ”); provided , however , that (x) WABCO shall prepare and deliver to ASD in a manner consistent with past practices pro forma Tax Returns and Tax Information Packages with respect to each member of the WABCO Group or portion of the VCS Business included in, or reflected on, an ASD Filed Tax Return no later than ninety (90) days before the due date for the filing of the relevant Tax Return, (y) ASD shall provide to WABCO no later than thirty (30) days in advance of the due date for the filing thereof, and WABCO shall have a reasonable opportunity to review and comment on, any such ASD Filed Tax Return (or the relevant portion thereof) to the extent that WABCO is responsible for any portion of the Taxes reported on such ASD Filed Tax Return, and (z) in the case of any ASD Filed Tax Return that includes any member of the WABCO Group or the VCS Business only for the portion of the relevant taxable period that ends on the Distribution Date, taxable income, assets or other attributes of the VCS Business shall be allocated by ASD to the portion of such taxable period that ends on the Distribution Date based on an actual or hypothetical closing of the books at the close of the Distribution Date performed by ASD. Each member of the WABCO Group hereby irrevocably authorizes and designates ASD as its agent, coordinator and administrator for the purpose of taking any and all actions necessary or incidental to the filing of any such ASD Filed Tax Returns and, except as otherwise provided herein, for the purpose of making payments to, or collecting refunds from, any Governmental Entity in respect of an ASD Filed Tax Return. Except as otherwise provided herein, ASD shall have the exclusive right to file, prosecute,

compromise or settle any claim for, or refund of, Taxes in respect of an ASD Filed Tax Return for which ASD bears responsibility hereunder and to determine whether any refunds of Taxes to which the ASD Group may be entitled shall be received by way of refund or credit against the Tax liability of the ASD Group. For purposes of this Section, validly filed extensions of time to file tax returns should be treated as extending the date such returns are required to be filed.

(b) The WABCO Group shall have the sole and exclusive responsibility for the preparation and filing of (A) each Tax Return that is required to be filed after the Distribution Date that includes any member of the WABCO Group or any assets or operations of the VCS Business that is not an ASD Filed Tax Return and (B) Tax Returns listed on Schedule 2.01(a) (each, a “ WABCO Filed Tax Return ”); provided , however , that, except as otherwise required by law, (1) all WABCO Filed Tax Returns shall be prepared on a basis that is consistent with the Tax Opinion and the private letter ruling received by ASD on July 10, 2007 (the “ Ruling ”) with respect to the Reorganization transactions addressed therein and the Distribution and consistent with past practices of ASD, (2) WABCO shall provide to ASD no later than thirty (30) days in advance of the due date for the filing thereof, and ASD shall have a reasonable opportunity to review and comment on, any such WABCO Filed Tax Return (or the relevant portion thereof) to the extent that ASD is responsible for any portion of the Taxes reported on such WABCO Filed Tax Return and (3) in the case of any WABCO Filed Tax Return that includes any member of the WABCO Group or the VCS Business only for the portion of the relevant taxable period that begins after the Distribution Date, taxable income, assets or other attributes of the VCS Business shall be allocated by ASD to the portion of such taxable period that begins after the Distribution Date based on an actual or hypothetical closing of the books at the close of the Distribution Date. For purposes of this Section, validly filed extensions of time to file tax returns should be treated as extending the date such returns are required to be filed.

2.02 OBLIGATION TO REMIT TAXES. Subject to Section 2.01 and subject always to the ultimate division of responsibility for Taxes set out in Section 2.03, the ASD Group and the WABCO Group shall each remit or cause to be remitted to the applicable Governmental Entity in a timely manner any Taxes due in respect of any Tax Return that such Party is required to file (or, in the case of a Tax for which no Tax Return is required to be filed, which is otherwise payable by such Party or a member of such Party’s group (the ASD Group or the WABCO Group) to any Governmental Entity). In the case of any ASD Filed Tax Return or WABCO Filed Tax Return, for which the Party not required to file such Tax Return is obligated under this Agreement to pay all or a portion of the Taxes reported as due on such Tax Return, the Party filing such Tax Return shall notify the other Party, in writing, of its obligation to pay such Taxes and the Party receiving such notice shall pay such amount to the Party filing such Tax Return in accordance with the notice and payment provisions contained in ARTICLE IV.

2.03 TAX SHARING OBLIGATIONS AND PRIOR AGREEMENTS.

(a) ASD and the members of the ASD Group shall be responsible for the payment of (and shall be entitled to any refund of, whether received in cash or applied against future Tax obligations) all Taxes attributable to any member of the ASD Group or the Remainco Businesses for any Pre-Distribution Period or Post-Distribution Period other than (i) Taxes arising as a result of (A) the Distribution, except to the extent such Taxes arise as a result of any breach of any covenant or any other obligation contained in the Tax Materials or this Agreement by ASD or any member of the ASD Group or

any shareholder of ASD (the “ External Distribution Tax Liability ”), or (B) the Reorganization or any transaction associated therewith as described in the Ruling or the Distribution Agreement and paid after the Distribution except to the extent such Taxes arise as a result of any action undertaken by ASD, any member of the ASD Group or any shareholder of ASD after the Distribution (the “ Restructuring Tax Liability ”), (ii) claims for indemnification made by one or more buyers of the B&K Business, or any assignee of such claims, with respect to Foreign Taxes resulting from (Y) any audit, examination, investigation, or other proceeding by any Governmental Entity in respect of Taxes or Tax matters of the B&K Business, or (Z) any underpayment of Taxes identified by a buyer of the B&K Business relating to Taxes or Tax Returns of the B&K Business, each with respect to periods prior to the earlier of (I) the date of sale of the B&K Business, or if the B&K Business is not sold to a single buyer, the date the buyer making the indemnification claim purchased a portion of the B&K Business to which such claim relates, or (II) December 31, 2007 (the “ B&K Foreign Tax Liability ”) and (iii) Taxes imposed with respect to the ownership of the VCS Assets or the operation of the VCS Business by any member of the ASD Group (the “ VCS Tax Liability ”) (collectively, the “ ASD Taxes ”).

(b) WABCO and the members of the WABCO Group shall be responsible for the payment of (and shall be entitled to any refund of, whether received in cash or applied against future Tax obligations) (i) all Taxes attributable to any member of the WABCO Group, the ownership of any VCS Asset or the operation of the VCS Business for any Pre-Distribution Period or Post-Distribution Period, (ii) the External Distribution Tax Liability, (iii) the Restructuring Tax Liability, (iv) the B&K Foreign Tax Liability, and (v) the VCS Tax Liability (collectively, the “ WABCO Taxes ”), provided , however , that the portion of the Restructuring Tax Liability incurred by TBLP and its Subsidiaries (the “ WLP Restructuring Tax Liability ”) shall be assumed by WLP in connection with the WLP Contribution; provided further , that the portion of the Restructuring Tax Liability incurred or assumed by Trane Brazil and its Subsidiaries attributable to Canadian and Brazilian Taxes (the “ WABCO Brazil Restructuring Tax Liability ”) shall be assumed by WABCO Brazil in connection with the Trane Brazil Contribution.

(c) If, prior to the Distribution, a deposit were made with respect to any Tax for which WABCO, WLP or WABCO Brazil is responsible under this Agreement, such deposit shall be assigned to such responsible Party and such Party shall only be liable for the amount of such Tax ultimately due in excess of the applicable deposit. Refunds of such deposits shall be remitted to, and any credits with respect to Taxes attributable to such deposits shall be for the benefit of, WABCO or the WABCO subsidiary responsible for the Tax with respect to which the deposit was made.

(d) Notwithstanding anything else to the contrary contained herein or in any other Transaction Agreement, the Parties agree to allocate the Benefit Items set forth on Schedule 2.03(d) in accordance therewith.

(e) Except as set forth in this Agreement and in consideration of the mutual indemnities and other obligations of this Agreement, any and all prior Tax sharing or allocation agreements or practices between any member of the ASD Group and any member of the WABCO Group shall be terminated with respect to the WABCO Group as of the Distribution Date, and no member of the WABCO Group shall have any continuing rights or obligations thereunder. Notwithstanding the prior sentence, the Indemnity and Guaranty Agreement entered into among Ideal Standard Do Brasil Indústria E Comércio De Materiais Sanitários Ltda, Wabco Do Brasil Indústria E Comércio De Freios Ltda, and Ideal Standard Wabco Trane Indústria E Comércio Ltda, dated July 13, 2007, shall not be terminated as of the Distribution Date and the parties shall continue to be bound by such agreement.

2.04 AMENDED RETURNS.

(a) WABCO shall not, and shall not permit any member of the WABCO Group, to file any amended Tax Return that includes any member of the ASD Group or any of the assets or operations of the Remainco Businesses without the consent of ASD, not to be unreasonably withheld. ASD shall provide a response to a request for such consent from WABCO within seven (7) Business Days following the receipt of such request. Receipt of consent by WABCO or a member of the WABCO Group from ASD under the provisions of this Section 2.04(a) shall not limit or modify WABCO’s continuing indemnification obligation under Section 4.01(b).

(b) ASD shall not, and shall not permit any member of the ASD Group, to file any amended Tax Return that includes any member of the WABCO Group or any of the assets or operations of the VCS Business without the consent of WABCO, not to be unreasonably withheld. WABCO shall provide a response to a request for such consent from ASD within seven (7) Business Days following the receipt of such request. Receipt of consent by ASD or a member of the ASD Group from WABCO under the provisions of this Section 2.04(b) shall not limit or modify ASD’s continuing indemnification obligation under Section 4.01(a).

ARTICLE III. REPRESENTATIONS AND COVENANTS

3.01 COMPLIANCE WITH THE RULING AND TAX OPINION.

(a) ASD (on behalf of itself and all other members of the ASD Group) hereby represents and warrants that (i) it has examined (A) the Ruling, (B) the Tax Opinion, (C) the Ruling Request, (D) the Tax Certificates and (E) any other materials delivered or deliverable in connection with the issuance of the Ruling and the rendering of the Tax Opinion (collectively, the “ Tax Materials ”) and (ii) the facts presented and representations made therein, to the extent descriptive of or otherwise relating to ASD or any member of the ASD Group or the Remainco Businesses, were, at the time presented or represented and from such time until and including the Distribution Date true, correct and complete in all material respects. ASD (on behalf of itself and all other members of the ASD Group) hereby confirms and agrees to comply with any and all covenants and agreements in the Tax Materials applicable to ASD or any member of the ASD Group or the Remainco Businesses.

(b) WABCO (on behalf of itself and all other members of the WABCO Group) hereby represents and warrants that (i) it has examined the Tax Materials and (ii) the facts presented and representations made therein, to the extent descriptive of or otherwise relating to WABCO or any member of the WABCO Group or the VCS Business, were at the time presented or represented and from such time until and including the Distribution Date true, correct and complete in all respects. WABCO (on behalf of itself and all other members of the WABCO Group) hereby confirms and agrees to comply with any and all covenants and agreements in the Tax Materials applicable to WABCO or any member of the WABCO Group or the VCS Business.

3.02 OPINION REQUIREMENT FOR MAJOR TRANSACTIONS. WABCO (on behalf of itself and all other members of the WABCO Group) hereby covenants and agrees that no member of the WABCO Group will take or permit to be taken within two (2) years of the Distribution the following

actions: (i) any Proposed Acquisition Transaction or approval of any Proposed Acquisition Transaction for any purpose; (ii) the issuance of any WABCO equity or rights to acquire any WABCO equity (other than (A) any such issuance qualifying under Treas. Reg. § 1.355-7(d)(8) in connection with the performance of services, or (B) any issuances which, in the aggregate, would not result in a Proposed Acquisition Transaction); (iii) redemptions or repurchases of any WABCO equity (except to the extent consistent with the requirements of Rev. Proc. 96-30 and statements made with respect thereto in the Ruling Request and the Ruling); (iv) recapitalizations or other dispositions of, or modifications to the terms of, any WABCO equity; (v) any liquidation, merger or consolidation involving WABCO (including, for purposes of clarification, the conversion of WABCO into a limited liability company); (vi) any sale of all or substantially all of WABCO’s assets in a single transaction or series of related transactions; (vii) the disposition or discontinuance of the operation of any active trade or business assets except in the ordinary course of business; or (viii) actions or positions inconsistent with any representation or covenant of WABCO or any member of the WABCO Group contained in Section 3.01(b) or Section 6.02 of this Agreement and no member of the WABCO Group will take or permit to be taken any action at any time that could jeopardize, directly or indirectly, any of the conclusions contained in the Ruling or the Tax Opinion (collectively, the “ Prohibited Acts ”). Notwithstanding the foregoing, WABCO or a member of the WABCO Group may take any of the Prohibited Acts if WABCO obtains (1) the written consent of ASD, not to be unreasonably withheld, or (2) (a) an unqualified opinion of a nationally recognized law firm, in form and substance reasonably satisfactory to ASD, that the taking of such action will not adversely affect, directly or indirectly, any of the conclusions contained in the Ruling or the Tax Opinion, or (b) a supplemental ruling from the Internal Revenue Service that the taking of such action will not adversely affect, directly or indirectly, any of the conclusions contained in the Ruling, provided , however , that no request for a supplemental ruling shall be made prior to obtaining ASD’s consent, not to be unreasonably withheld, and that ASD shall have the right to participate in the preparation of all material correspondence, calls, meetings and similar events related to obtaining such supplemental ruling. ASD shall provide a response to a request for consent from WABCO under the provisions of this Section 3.02 within seven (7) Business Days following the receipt of such request. Receipt of consent by WABCO or a member of the WABCO Group from ASD under the provisions of this Section 3.02 shall not limit or modify WABCO’s continuing indemnification obligation under Section 4.01(b).

3.03 AMERICAN STANDARD COVENANTS. Notwithstanding anything else to the contrary contained in this Agreement or any other agreement, ASD (on behalf of itself and all other members of the ASD Group) hereby confirms and agrees that neither ASD nor any member of the ASD Group will take or permit to be taken any action at any time that would likely jeopardize, directly or indirectly, any of the conclusions contained in the Ruling or the Tax Opinion.

ARTICLE IV. INDEMNITY OBLIGATIONS AND PAYMENTS

4.01 INDEMNITY OBLIGATIONS.

(a) ASD shall indemnify and hold harmless WABCO from and against, and will reimburse WABCO for (i) all ASD Taxes and (ii) all Taxes and Indemnifiable Losses arising out of, based upon or relating or attributable to any breach of any representation, covenant or obligation of any member of the ASD Group under this Agreement.

(b) Notwithstanding whether any action is permitted or consented to hereunder and notwithstanding anything else to the contrary contained herein, the WABCO Group shall indemnify and hold harmless ASD from and against, and will reimburse ASD for (i) all WABCO Taxes and (ii) all Taxes and Indemnifiable Losses arising out of, based upon or relating or attributable to any breach of or inaccuracy in any representation, covenant or obligation of any member of the WABCO Group under this Agreement.

(c) WLP shall indemnify and hold harmless TBLP and its Subsidiaries from and against, and will reimburse TBLP and its Subsidiaries for (i) the WLP Restructuring Tax Liability and (ii) all Taxes and Indemnifiable Losses arising out of, based upon or relating or attributable to any breach of any representation, covenant or obligation of WLP under this Agreement.

(d) WABCO Brazil shall indemnify and hold harmless Trane Brazil and its Subsidiaries from and against, and will reimburse Trane Brazil and its Subsidiaries for (i) the WABCO Brazil Restructuring Tax Liability and (ii) all Taxes and Indemnifiable Losses arising out of, based upon or relating or attributable to any breach of any representation, covenant or obligation of WABCO Brazil under this Agreement.

4.02 NOTICE. A Party making a claim for indemnification under this Agreement (the “ Indemnified Party ”) shall provide the Party from whom such indemnification is sought (the “ Indemnifying Party ”) with written notice of such claim describing such claim in reasonable detail and accompanied by reasonable documentation supporting such claim (the “ Claim ”) no later than twenty (20) Business Days after the Indemnified Party (i) files a Tax Return reporting Taxes due which are subject to reimbursement or (ii) receives written notice with respect to Taxes that may be subject to indemnification under this Agreement, provided , however , that in the event that timely notice is not provided, the Indemnifying Party shall be relieved of its obligation to indemnify the Indemnified Party only to the extent that such delay results in actual increased costs or actual prejudice.

4.03 TIMING OF PAYMENTS. The Indemnifying Party shall pay the amount of any Claim to the Indemnified Party within ten (10) Business Days of receipt of the Claim, provided that , if such Claim is still subject to the outcome of any Tax Contest, then payment shall not be due until ten (10) Business Days after such Claim either is resolved through a Final Determination, or prior to a Final Determination, if the Indemnified Party and the Indemnifying Party agree on the indemnification obligation under this Agreement with respect to such Claim. All indemnification payments due under this Agreement shall be made by wire transfer of immediately available funds to a bank account of the Indemnified Party. Late payments shall be subject to interest at a rate per annum equal to the then effective Prime Rate plus 2% (or the maximum legal rate, whichever is lower), calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.

4.04 TREATMENT OF PAYMENTS. The Parties agree that any payment made among the Parties pursuant to this Agreement shall be treated, to the extent permitted by law, for all Tax purposes as a non-taxable payment made immediately prior to the Distribution.

4.05 PAYMENTS NET OF INSURANCE PROCEEDS, TAX COSTS AND BENEFITS. The amount due with respect to any Claim by an Indemnified Party under this Agreement shall be determined net of the amount of related insurance proceeds, Tax Benefit and Tax Cost to the Indemnified Party.

ARTICLE V. TAX CONTESTS

5.01 NOTICE. The Indemnified Party shall promptly notify the Indemnifying Party in writing upon receipt by the Indemnified Party or any member of its group of a written communication from any Governmental Entity with respect to any pending or threatened audit, claim, dispute, suit, action, proposed assessment or other proceeding (a “ Tax Contest ”) concerning any Taxes for which the Indemnifying Party may be liable under this Agreement.

5.02 CONTROL OF CONTESTS BY ASD. Subject to the limitations in any agreement relating to the sale or other disposition of all or any portion of the B&K Business, ASD shall have the sole responsibility and control over the handling of any Tax Contest, including the exclusive right to communicate with agents of the Governmental Entity and to control, resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Contest, involving any ASD Filed Tax Return , but excluding Tax Contests involving the B&K Foreign Tax Liability and the Tax Contests listed on Schedule 5.02; provided , however , that ASD shall not resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Contest that affects the liability of WABCO or a member of the WABCO Group under this Agreement without the consent of WABCO, not to be unreasonably withheld. WABCO shall provide a response to a request for such consent from ASD within seven (7) Business Days following the receipt of such request. Subject to ASD’s rights under this Section 5.02, upon request by WABCO, WLP or WABCO Brazil, such requesting party shall, at its own expense, be allowed to participate in the handling of any such Tax Contest with respect to any item that may affect the liability of WABCO (or any member of the WABCO Group), WLP or WABCO Brazil, as the case may be, under this Agreement, provided , however , that such rights shall be limited to the extent that ASD’s right to control or otherwise participate in the relevant Tax Contest are limited pursuant to any agreement for a sale or other disposition of all or any portion of the B&K Business.

5.03 CONTROL OF CONTESTS BY WABCO. WABCO shall have the full responsibility and control over the handling of any Tax Contest, including the exclusive right to communicate with agents of the Governmental Entity and to control, resolve, settle or agree to any deficiency, claim or

adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Contest, involving any WABCO Filed Tax Return, the B&K Foreign Tax Liability and the Tax Contests listed on Schedule 5.02; provided , however , that WABCO’s right to control or otherwise participate in a Tax Contest involving a WABCO Filed Tax Return, a Tax Contest listed on Schedule 5.02 or the B&K Foreign Tax Liability shall be limited to the extent that ASD’s right to control or otherwise participate in the relevant Tax Contest are limited pursuant to any agreement relating to the sale or other disposition of all or any portion of the B&K Business; provided , further , that WABCO shall not resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Contest that affects the liability of ASD or a member of the ASD Group under this Agreement without the consent of ASD, not to be unreasonably withheld. ASD shall provide a response to a request for such consent from WABCO within seven (7) Business Days following the receipt of such request. Subject to WABCO’s rights under this Section 5.03 and subject to any limitations in any agreement relating to the sale or other disposition of all or any portion of the B&K Business, upon request by ASD, ASD shall, at its own expense, be allowed to participate in the handling of any such Tax Contest with respect to any item that may affect the liability of ASD or any member of the ASD Group, as the case may be, under this Agreement.

ARTICLE VI. COOPERATION

6.01 GENERAL. Each Party shall fully cooperate, and shall cause all members of such Party’s group (the ASD Group or the WABCO Group) to fully cooperate, with the other Parties in connection with the preparation and filing of any Tax Return or the conduct of any Tax Contest (including, where appropriate or necessary, providing a power of attorney) concerning any issues or any other matter contemplated under this Agreement. Each Party shall make its employees and facilities available on a mutually convenient basis to facilitate such cooperation.

6.02 CONSISTENT TREATMENT. Unless and until there has been a Final Determination to the contrary, each Party agrees not to take any position on any Tax Return, in connection with any Tax Contest or otherwise that is inconsistent with (a) the allocation of Taxes and Benefit Items between the ASD Group and the WABCO Group as set forth in this Agreement, (b) the Ruling, (c) the Tax Opinion, or (d) the Tax treatment of any transaction included in the Reorganization agreed upon by the parties.

ARTICLE VII. RETENTION OF RECORDS; ACCESS

7.01 For so long as the contents thereof may become material in the administration of any matter under applicable Tax law, but in any event until the later of (i) the expiration of any applicable statutes of limitation and (ii) seven years after the Distribution Date, the Parties shall (a) retain records, documents, accounting data and other information (including computer data) necessary for the preparation and filing of all Tax Returns in respect of Taxes of any member of either the ASD Group or

the WABCO Group for any Pre-Distribution Period or any Post-Distribution Period or for any Tax Contests relating to such Tax Returns, and (b) give to the other Parties reasonable access to such records, documents, accounting data and other information (including computer data) and to its personnel (insuring their cooperation) and premises, for the purpose of the review or audit of such Tax Returns to the extent relevant to an obligation or liability of a Party under this Agreement or for purposes of the preparation or filing of any such Tax Return, the conduct of any Tax Contest or any other matter reasonably and in good faith related to the Tax affairs of the requesting Party. At any time after the Distribution Date that the ASD Group proposes to destroy such material or information, it shall first notify the WABCO Group in writing and the WABCO Group shall be entitled to receive such materials or information proposed to be destroyed. At any time after the Distribution Date that the WABCO Group proposes to destroy such material or information, it shall first notify the ASD Group in writing and the ASD Group shall be entitled to receive such materials or information proposed to be destroyed.

ARTICLE VIII. DISPUTE RESOLUTION

8.01 In the event of any disagreement arising under this Agreement, including any dispute in connection with a claim by a third party (a “ Dispute ”), the Parties shall promptly notify the chief financial officer of each of ASD and WABCO (each, a “ CFO ” and, together, the “ CFOs ”) of such Dispute, who together shall attempt in good faith to resolve such Dispute. If such Dispute is not resolved within seven (7) Business Days following the date on which the CFOs receive notification, the Parties to such Dispute shall each separately retain an independent, nationally recognized law or accounting firm (each, a “ Preliminary Tax Advisor ” and, together, the “ Preliminary Tax Advisors ”), which Preliminary Tax Advisors shall jointly retain a third independent, nationally recognized law or accounting firm which must be located in New York, New York (the “ Tax Advisor ”) on behalf of the Parties to the Dispute to act as an arbitrator in order to resolve the Dispute. The Tax Advisor’s determination as to any Dispute shall be made in accordance with the terms of this Agreement and shall be final and binding on the Parties and not subject to collateral attack for any reason (other than manifest error). All fees and expenses of the Preliminary Tax Advisor shall be borne by the Party that engaged such advisor and all of the fees and expenses of the Tax Advisor shall be shared equally by each of the Parties to the Dispute.

ARTICLE IX. MISCELLANEOUS PROVISIONS

9.01 GOVERNING LAW. This Agreement and the legal relations between the Parties hereto shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof to the extent such rules would require the application of the law of another jurisdiction.

9.02 APPLICATION TO PRESENT AND FUTURE SUBSIDIARIES. This Agreement is being entered into by ASD and WABCO on behalf of themselves and the members of their respective

groups (the ASD Group and the WABCO Group). This Agreement shall constitute a direct obligation of each such entity and shall be deemed to have been readopted and affirmed on behalf of any entity that becomes a Subsidiary of ASD or WABCO in the future.

9.03 FURTHER ASSURANCES. Subject to the provisions hereof, the Parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.

9.04 SURVIVAL. Notwithstanding any other provision of this Agreement to the contrary, all representations, covenants and obligations contained in this Agreement shall survive until the expiration of the applicable statute of limitations with respect to any such matter (including extensions thereof).

9.05 DISTRIBUTION AGREEMENT. To the extent not inconsistent with any specific term of this Agreement, the provisions of the Distribution Agreement shall apply in relevant part to this Agreement, including 11.1 Complete Agreement; Construction, 11.6 Notices, 11.7 Waivers, 11.8 Amendments, 11.9 Assignment, 11.10 Termination, Etc., 11.14 Third-Party Beneficiaries, 11.15 Title and Headings, 11.16 Exhibits and Schedules, 11.19 Consent to Jurisdiction, 11.20 Specific Performance, 11.21 Waiver of Jury Trial, 11.22 Severability and 11.24 Authorization.

* * *

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.


AMERICAN STANDARD COMPANIES INC.

By:		/s/ G. P ETER D’A LOIA
Name:		G. Peter D’Aloia
Title:		Senior Vice President and Chief Financial Officer

WABCO HOLDINGS INC.

By:		/s/ U LRICH M ICHEL
Name:		Ulrich Michel
Title:		Chief Financial Officer

TRANE L.P.

By:		/s/ G. P ETER D’A LOIA
Name:		G. Peter D’Aloia for American Standard International Inc., the managing member of Trane Holdings LLC, acting as general partner of Trane L.P.

AMERICAN STANDARD EUROPE L.P.

By:		/s/ G. P ETER D’A LOIA
Name:		G. Peter D’Aloia for American Standard International Inc., managing member of American Standard Europe Holdings LLC, general partner of American Standard Europe L.P.

IDEAL STANDARD WABCO TRANE INDÚSTRIA E COMÉRCIO LTDA.

By:		/s/ P EDRO L AURENTINO M ARCON
Name:		Pedro Laurentino Marcon
Title:		Officer

WABCO DO BRASIL INDUSTRIA E COMERCIO DE FREIOS LTDA.

By:		/s/ M ANOEL L UIZ S IMÕES G ARNEIRO
Name:		Manoel Luiz Simões Garneiro
Title:		Officer

Exhibit 10.2

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (the “Services Agreement”) is made as of this 16 ^th day of July , 2007 by and between American Standard Companies Inc., a Delaware corporation (“ ASD ”), and WABCO Holdings Inc., a Delaware corporation (“ WABCO ”). ASD and WABCO have entered into a Separation and Distribution Agreement dated as of July 16, 2007 (as amended from time to time, the “ Separation Agreement ”), which sets forth, among other things, the terms of the separation of the VCS Business from ASD, which shall occur in a series of transactions. Prior to the Effective Time, the VCS Business received certain services from and provided certain services to ASD and certain of its Subsidiaries and Affiliates. Each of the ASD and WABCO desires that these services continue to be provided after the Effective Time upon the terms and conditions set forth in this Services Agreement.

In consideration of the mutual covenants and agreements contained in this Agreement, the Parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions Incorporated . All capitalized terms not otherwise defined in this Services Agreement have the meaning ascribed to them in the Separation Agreement.

1.2 Additional Definitions . Unless the context otherwise requires, the following terms, and their singular or plural, used in this Services Agreement shall have the meanings set forth below:

(a) “ ASD ” shall have the meaning set forth in the preamble to this Services Agreement.

(b) “ ASD Entities ” means, collectively, ASD and its Affiliates that are listed as Providers on Schedule A or Recipients on Schedule B (and which shall not include any WABCO Entities).

(d) “ Confidential Information ” shall have the meaning set forth in Section 8.1 of this Services Agreement.

(e) “ Force Majeure ” shall have the meaning set forth in Section 6.1 of this Agreement.

(f) “ Initial Term ” shall have the meaning set forth in Section 4.1.

(g) “ Losses ” shall mean any and all damages, losses, deficiencies, liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including internal costs and the costs and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the reasonable costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder).

(h) “ Party ” means each of the entities set forth on the signature pages to this Services Agreement.

(i) “ Person ” means an individual, partnership, corporation, trust, unincorporated association, or other entity or association.

(j) “ Prime Rate ” shall mean the rate per annum publicly announced by JPMorgan Chase Bank (or successor thereto) from time to time as its prime rate in effect at its principal office in New York City. For purposes of this Agreement, any change in the Prime Rate shall be effective on the date such change in the Prime Rate is publicly announced as effective.

(k) “ Provider ” shall mean the person identified on Schedule A or B to this Services Agreement providing the services set forth therein.

(l) “ Recipient ” shall mean the person identified on Schedule A or B to this Services Agreement receiving the services set forth therein.

(m) “ Renewal Term ” shall have the meaning set forth in Section 4.1 of this Agreement.

(n) “ Sales and Service Tax ” shall have the meaning set forth in Section 3.4(a).

(o) “ Term ” shall mean the Initial Term and the Renewal Term, if any, or, with respect to a particular service provided for hereunder, such shorter period as may be applicable pursuant to the terms of this Services Agreement or the exercise of a Party’s right of early termination as provided for herein.

(p) “ WABCO ” shall have the meaning set forth in the preamble to this Services Agreement.

(q) “ WABCO Entities ” means, collectively, WABCO and its Affiliates that are listed as Recipients on Schedule A or as Providers on Schedule B (and which shall not include any ASD Entities).

(r) “ WABCO Provided Services ” shall have the meaning set forth in Section 2.2 of this Services Agreement.

Other terms are used as defined elsewhere herein.

ARTICLE 2

SERVICES PROVIDED

2.1 ASD Provided Services . Pursuant to the terms of this Services Agreement, the ASD Entities agree to provide, or cause to be provided, to the WABCO Entities, commencing on the date immediately following the Effective Time, the services described in Schedule A to this Services Agreement (the “ ASD Provided Services ”).

2.2 WABCO Provided Services . Pursuant to the terms of this Services Agreement, the WABCO Entities agree to provide, or cause to be provided, to the ASD Entities, commencing on the date immediately following the Effective Time, the services described in Schedule B to this Services Agreement (the “ WABCO Provided Services ”).

2.3 Other Services . If, after the execution of this Services Agreement and prior to the two month anniversary of the Effective Time, the Parties determine that a service provided by or to the VCS Business as conducted by ASD prior to the Effective Time was inadvertently omitted from the Schedules to this Services Agreement, then the Parties shall negotiate in good faith to attempt to agree to the terms and conditions upon which such services would be added to this Services Agreement, it being agreed that the charges for such services should be determined on a basis consistent with the methodology for determining the initial prices provided for herein ( i.e. , sufficient to cover a Provider’s reasonable estimate of its actual costs and, if applicable, consistent with the prices such Provider would charge to an Affiliate), in each case without taking into account any profit margin or projected savings from increased efficiency. Upon the Parties’ agreement on the fees and other specific terms and conditions applicable to such services, the Parties shall update this Services Agreement through the substitution of the relevant Schedule, or additions or supplements to the relevant Schedule, which substitutions, additions or supplements shall describe the service and the related fees and other specific terms and conditions applicable thereto.

ARTICLE 3

COMPENSATION

3.1 Compensation for ASD Provided Services . Subject to Section 3.5, the compensation for the ASD Provided Services for the duration of the Term shall be as described for each individual service provided to the WABCO Entities as set forth on Schedule A. For the avoidance of doubt, the ASD Provided Services shall commence on the date immediately following the Effective Time.

3.2 Compensation for WABCO Provided Services . Subject to Section 3.5, the compensation for the WABCO Provided Services for the duration of the Term shall be as described for each individual service provided by the WABCO Entities set forth on Schedule B. For the avoidance of doubt, the WABCO Provided Services shall commence on the date immediately following the Effective Time.

3.3 Allocation of Certain Expenses .

(a) Each Provider shall bear the costs and expenses of obtaining any and all consents from third parties which may be necessary in connection with such Provider’s performance of its obligations hereunder, including, with respect to the obligations of the WABCO Entities acting in their capacity as Providers, the costs of obtaining the consent to the assignment of all leases of equipment and licenses of software which may be necessary to provide the services contemplated hereby.

(b) In addition to the payment of all compensation provided under Section 3.1 or Section 3.2, as applicable, Recipient shall reimburse Provider for all reasonable out-of-pocket costs and expenses incurred by Provider or its Affiliates in connection with providing the applicable services hereunder (including all travel-related expenses) to the extent that such costs and expenses are not reflected in the compensation for such services on Schedule A or Schedule B, as applicable; provided, however, any such expenses exceeding $1000 per month (other than routine business travel and related expenses) shall require advance approval of Recipient. Any travel-related expenses incurred by Provider in performing the applicable services hereunder shall be incurred and charged to Recipient in accordance with Provider’s then applicable business travel policies.

(c) In the event that Recipient terminates any individual service as contemplated by Section 4.2 earlier than the expiration of the Initial Term or the Renewal Term, if applicable, Recipient shall reimburse Provider for any and all costs and expenses incurred by Provider or any of its subsidiaries as a result of such early termination by Recipient, including incremental early termination fees and other costs incurred in order to terminate or reduce the level of services provided by third parties under Contracts with Recipient or any of its subsidiaries, which services are affected by such early termination, such reimbursement to be due and payable within five business days following Recipient’s receipt of any invoice from Provider with respect to such costs and expenses.

3.4 Taxes .

(a) In addition to the compensation payable to Provider determined exclusive of the taxes payable by Recipient under this Section 3.4, Recipient will pay and be liable for all sales, service, value added, lease, use, transfer, consumption or similar taxes levied and measured by: (i) the cost of services provided to Recipient under this Agreement or (ii) Provider’s cost in acquiring property or services used or consumed by Provider in providing Services under this Agreement (the “ Sales and Service Taxes ”). Such taxes will be payable by Recipient to Provider in accordance with Section 3 or as otherwise mutually agreed in writing by the parties and under the terms of the applicable law which govern the relevant Sales and Service Tax. Recipient’s obligation to pay Sales and Service Taxes under this Section 3.4 shall be subject to the receipt of (i) a computation of the Sales and Service Taxes payable under this Section 3.4 identifying the nature and amount of the goods or services on which the Sales and Service Tax is assessed and the applicable rate and (ii) a valid and customary invoice (or other document) under the terms of applicable law for each Sales and Service Tax. If Recipient complies with the terms of this Section 3.4 regarding the payment of Sales and Service Taxes, it shall not be liable for any interest, penalties or other charges attributable to Provider’s improper filing relating to Sales and Service Taxes or late payment or failure to remit Sales and Service Taxes to the relevant taxing authority.

(b) Each of Provider and Recipient shall pay and be responsible for their own personal property taxes and taxes based on their own income or profits or assets.

(c) Payments for services or other amounts under this Agreement shall be made net of withholding taxes, provided however , that if Provider reasonably believes that a reduced rate of withholding applies or Provider is exempt from withholding, Recipient shall only be required to apply such reduced rate of withholding or not withhold if Provider provides Recipient with evidence reasonably satisfactory to Recipient that a reduced rate of or no withholding is required, including rulings or certificates from, or other correspondence with taxing authorities and tax opinions rendered by qualified persons, to the extent reasonably requested by Recipient. Recipient shall promptly remit any amounts withheld to the appropriate taxing authority and in the event that Recipient receives a refund of any amounts previously withheld from payments to Provider and remitted, Recipient shall surrender such refund to Provider.

(d) Each of Provider and Recipient shall promptly notify the other party of any deficiency claim or similar notice by a taxing authority with respect to Sales and Service Taxes payable under this Service Agreement, and of any pending tax audit or other proceeding relating to Sales and Service Taxes or withholding with respect to this Service Agreement, and shall afford such party all reasonable opportunity to participate in any such audit or proceeding affecting its interests.

3.5 Price Adjustments .

(a) The Parties shall review the Providers’ respective costs of providing services hereunder as of September 30, 2007, and each two-month anniversary thereafter. If it is determined in connection with any such review that a Provider’s cost of providing services hereunder (taken individually) exceeds by at least five percent (5%) the charge for such service(s) because of a significant increase in usage by the Recipient or other circumstances beyond the reasonable control of the Provider (including, without limitation, events of Force Majeure), then, upon request of such Provider, such Provider and its Recipient shall negotiate in good faith to determine an appropriate adjustment to the then-current prices for such services on a basis consistent with the methodology for determining the initial prices provided for herein (as described in Section 2.3).

(b) If the Parties determine (which determination shall be made in good faith) that the initial prices set forth on the Schedules hereto are not consistent with the methodology for determining the initial prices as described in Section 3.5(a), then the Parties shall negotiate in good faith to adjust such charges in a manner that is consistent with such methodology.

3.6 Terms of Payment; Dispute Resolution; Audits .

(a) Provider shall invoice the Recipient for the Services provided by Section 3.1 or Section 3.2, as applicable, monthly in advance on the first calendar day of each month of the term following the date hereof (or the first business day following each such date). Provider

shall also provide invoices to Recipient monthly in arrears for amounts, such as Sales and Service Taxes and out-of-pocket or other expenses, that are payable in addition to the flat fee for service that was paid in advance pursuant to the first sentence of this Section 3.6. Payment shall be made by Recipients within 30 days after receipt of an invoice and other required documentation. No Recipient shall withhold any payments to its Provider under this Services Agreement (other than any required withholding for taxes) and such payments shall be made without any other set-off or deduction, notwithstanding any dispute that may be pending between them, whether under this Services Agreement or otherwise (any required adjustment being made on subsequent invoices). Subject to the provisions of Section 3.6(c), amounts not paid on or before the date required to be paid hereunder shall accrue interest at a rate per annum equal to the then effective Prime Rate plus 2% (the “ Default Interest Rate ”) (or the maximum legal rate whichever is lower), calculated for the actual number of days elapsed, accrued from the date such payment was due hereunder until the date of the actual receipt of payment.

(b) All amounts due for services rendered pursuant to this Services Agreement shall be billed and paid in the currency in which the rate for such service is quoted, as stated herein or as shown on the Schedules hereto.

(c) If there is a dispute between any Recipient and any Provider regarding the amounts shown as billed to such Recipient on any invoice, such Provider shall furnish to such Recipient reasonable documentation to substantiate the amounts billed including, but not limited to, listings of the dates, times and amounts of the services in question where applicable and practicable. Upon delivery of such documentation, such Recipient and such Provider shall cooperate and use their best efforts to resolve such dispute among themselves. If such disputing parties are unable to resolve their dispute within thirty (30) calendar days of the initiation of such procedure, and such Recipient believes in good faith and with a reasonable basis that the amounts shown as billed to such Recipient are inaccurate or are otherwise not in accordance with the terms of this Services Agreement, then such Recipient shall have the right, at its own expense, to have any disputed invoice(s) audited as provided in Section 3.6(d).

(d) Any audit pursuant to Section 3.6(c) shall be limited solely to the purpose of verifying the amounts in dispute and shall be made by an independent certified public accounting firm selected and paid for by the Recipient initiating such audit and reasonably satisfactory to the Provider being audited (such accounting firm, the “ Independent Accountants ”). Any such audit shall be reasonably conducted by the Independent Accountants during the normal business hours of the Provider being audited. Such Provider shall reasonably cooperate with the Independent Accountants and shall make available to the Independent Accountants all applicable cost and other data may be reasonably necessary for the sole purpose of verifying the amounts in dispute. The Independent Accountants shall not disclose any of the underlying data and information to said Recipient or to any other Person (except may be required by law) and, prior to any such audit the Independent Accountants shall, if requested by the Provider being audited, enter into a confidentiality agreement reasonably acceptable to such Provider.

ARTICLE 4

TERM AND TERMINATION

4.1 Term . Except as expressly provided otherwise in this Services Agreement, or with respect to specific services as indicated on the Schedules hereto, the term of this Services Agreement shall be for an initial period of six (6) months commencing at 12:01 a.m. on the date immediately following the date hereof and ending on the six (6) month anniversary of the Effective Time (the “ Initial Term ”). Effective between the respective Provider and Recipient, the Initial Term may be extended for an additional period of six (6) months, or such other period set forth on Schedule A or Schedule B (the “ Renewal Term ”), at the request of a Recipient by written notice from such Recipient to its Provider, with copies to ASD and WABCO; any such notice shall be made not less than two months prior to the end of the Initial Term. The obligation of any Recipient to make a payment for services previously rendered shall not be affected by the expiration of the Initial Term or Renewal Term and shall continue until full payment is made.

4.2 Termination of Individual Services . Effective between the respective Provider and Recipient, a Recipient may terminate at any time during the Initial Term or Renewal Term any individual service provided under this Services Agreement on a service-by-service basis (and/or location-by-location basis where individual service is provided to multiple locations of a Recipient) upon written notice to the Provider identifying the particular service (or location) to be terminated and the effective date of termination, which date shall not be less than 30 days after receipt of such notice unless the Provider otherwise agrees. The termination of any individual Services pursuant to this Section 4.2 shall not affect this Services Agreement with respect to the Services not terminated under this Section 4.2. In addition, effective between the respective Provider and Recipient, a Provider may terminate at any time during the Initial Term or Renewal Term any individual service provided under this Services Agreement upon written notice to the Recipient identifying the particular service to be terminated and the effective date of termination if the employee that was providing the applicable service is no longer employed by the Provider (and there is no other employee employed by Provider at the time that could reasonably provide such service).

4.3 Termination of Agreement . This Services Agreement shall terminate on the earliest to occur of (a) the latest date on which any service is to be provided as indicated on Schedule A and Schedule B, (b) the date on which the provision of all services has terminated or been canceled pursuant to Section 4.2 and (c) the date on which this Agreement is terminated pursuant to Section 4.4.

4.4 Breach of Agreement . If either Party shall materially breach any of its obligations under this Services Agreement, including, but not limited to, any failure to perform any services or to make payments when due, and said Party does not cure such breach within 30 days after receiving written notice thereof from the non-breaching Party, the non-breaching Party may terminate this Services Agreement, including the provision of services pursuant hereto, immediately by providing written notice of termination. The failure of a Party to exercise its rights hereunder with respect to a breach by the other Party shall not be construed as a waiver of such rights nor prevent such Party from subsequently asserting such rights with regard to the same or similar defaults. In the event of a termination of this Services Agreement, Provider shall

be entitled to all outstanding amounts due from Recipient for the provision of Services rendered prior to the date of termination. This Section 4.4, Article VII, Article VIII and Article IX shall survive any termination of this Agreement.

ARTICLE 5

CERTAIN COVENANTS

5.1 Reasonable Care . Each Provider shall perform the services that it is required to provide to its respective Recipient(s) under this Services Agreement with reasonable skill and care and shall use at least that degree of skill and care that it would exercise in similar circumstances in carrying out its own business. Each Provider shall take necessary measures to protect the respective Recipient’s data that is processed by such Provider from destruction, deletion or unauthorized change and allow its recovery in events of Force Majeure; provided , however , that a Provider shall be deemed to have satisfied this obligation if the measures taken to protect and recover Recipient’s data are reasonably equivalent to what it uses in carrying out its own business.

5.2 Cooperation . It is understood that it will require significant efforts of all Parties to implement this Services Agreement and ensure performance hereunder at the agreed upon level (subject to all the terms and conditions of this Services Agreement). The Parties will cooperate (acting in good faith and using reasonable commercial efforts) to effect a smooth and orderly transition of the services provided hereunder from the Providers to the respective Recipients including, without limitation, the separation of the VCS Business from the businesses retained by ASD and its Affiliates; provided , however , that this Section 5.2 shall not require any Party hereto to incur any out-of-pocket expenses unless and except expressly provided otherwise herein or in the Separation Agreement.

5.3 Points of Contact . Each Provider and Recipient has named a point of contact as set forth on Schedules A and B. Such points of contact shall be responsible for the implementation of this Services Agreement between the respective Provider and its Recipient, including resolution of any issues which may arise during the performance hereunder on a day to-day basis.

5.4 Personnel . Each Provider, in providing the services, as it deems necessary or appropriate in its sole discretion, may (a) use the personnel of the Provider or its Affiliates (it being understood that such personnel can perform the services on behalf of the Provider on a full-time or part-time basis, as determined by Provider or its Affiliates) and (b) employ the services or third parties to the extent such third party services are routinely utilized to provide similar services to other businesses of the Provider or are reasonably necessary for the efficient performance of any such services. In performing the services, employees and representatives of Provider shall be under the direction, control and supervision of Provider (and not the Recipient) and the Provider shall have the sole right to exercise all authority with respect to the employment (including termination of employment), assignment and compensation of such employees and representatives (it being understood that Recipient has no right hereunder to require that Provider perform the services hereunder with specifically identified employees and that the assignment of employees to perform such services shall be determined in the sole discretion of Provider).

In addition, Provider shall not be required to provide any service to the extent the provision of such service requires Provider to hire any additional employees or maintain the employment of any specific employee.

5.5 Further Assurances . From time to time after the date hereof, without further consideration, each Party shall use reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things reasonably necessary, proper or advisable under applicable laws, and execute and deliver such documents as may be required or appropriate to carry out the provisions of this Services Agreement and to consummate, perform and make effective the transactions contemplated hereby.

5.6 Migration Projects . Each Provider will provide the respective Recipient with reasonable support necessary to transition or migrate the services to Recipient or any third party or parties chosen by the Recipient, which may include consulting and training and providing reasonable access to data and other information and to Provider’s employees; provided , however , that such activities shall not unduly burden or interfere with Provider’s business and operations.

5.7 Certain Disbursements/Receipts . The Parties hereto contemplate that, from time to time on or after the Effective Time, ASD-related entities and/or WABCO-related entities (any such party, the “ Paying Party ”), as a convenience to another WABCO-related entity or ASD-related entity, as the case may be (the “ Responsible Party ”), in connection with the transactions contemplated by this Services Agreement or the Separation Agreement, may make certain payments that are properly the responsibility of the Responsible Party (whether pursuant to the Separation Agreement or this Services Agreement or otherwise (any such payment made, a “ Disbursement ”). Similarly, from time to time on or after the Effective Time, ASD-related entities and/or WABCO-related entities (any such party, the “ Receiving Party ”) may receive from third parties certain payments to which another WABCO-related entity or ASD-related entity, as the case may be, is entitled (any such Party, the “Other Party”, and any such payment received, a “Receipt”). Accordingly, with respect to Disbursements and Receipts, the Parties hereto agree as follows.

(a) Disbursements.

(i) A Paying Party may request reimbursement for Disbursements made by check within seven (7) business days after notice of such Disbursement has been given to the Responsible Party in writing and with mutually acceptable supporting documentation.

(ii) In case of a Disbursement by wire, if notice in writing and with mutually acceptable supporting documentation has been given by 2 p.m. of the Responsible Party’s local time at least one business day prior to the payment of such Disbursement, the Responsible Party shall reimburse the Paying Party for the amount of such payment (in the local currency equivalent paid by the Paying Party) on the date the Disbursement is made by the Paying Party. If notice as provided above has not been given prior to the payment of such Disbursement, the Responsible Party shall reimburse the Paying Party for the amount of such payment (in the local currency equivalent paid by the Paying Party) within three (3) business day after receipt by the Responsible Party of such notice from the Paying Party.

(b) Receipts . A Receiving Party shall remit Receipts to the Other Party (in the same currency as such payment is received) within three (3) business days of receipt thereof.

(c) Certain Exceptions . Notwithstanding anything to the contrary set forth above, if, with respect to any particular transaction(s), it is impossible or impracticable under the circumstances to comply with the procedures set forth in subsections (a) and of this Section 5.7 (including the time periods specified therein), the parties will cooperate to find a mutually agreeable alternative that will achieve substantially similar economic results from the point of view of the Paying Party or the Other Party, as the case may be; i.e. , an alternative pursuant to which the Paying Party will not incur any material interest expense or the Other Party will not be deprived of any material interest income; provided , however , that if a Receiving Party cannot comply with the procedures set forth in subsection (b) of this Section because it does not become aware of a Receipt on behalf of the other Party in time (e.g. because of the commingling of funds in an account), such Receiving Party shall remit such Receipt (without interest thereon) to the other Party within 24 hours after it becomes aware of such Receipt.

(d) Interest Rate . The rate for any interest income or expense that is paid or payable pursuant to Section 5.7(c) shall be at a rate per annum equal to the then effective Prime Rate plus 2%.

ARTICLE 6

FORCE MAJEURE

6.1 Force Majeure . No Provider (or any Person acting on its behalf) shall bear any responsibility or liability for any losses arising out of any delay, inability to perform or interruption of its performance of obligations under this Services Agreement due to any acts or omissions of its respective Recipient or for events beyond its reasonable control (hereinafter referred to as “ Force Majeure ”) including, without limitation, acts of God, act of governmental authority, act of the public enemy or due to war, riot, flood, civil commotion, insurrection, labor difficulty, severe or adverse weather conditions, lack of or shortage of electrical power, malfunctions of equipment or software programs or any other cause beyond the reasonable control of the Party whose performance is affected by the Force Majeure event. In such event, the obligations hereunder of the Provider in providing such service, and the obligations of the Recipient to pay for any such service, shall be postponed for such time as its performance is suspended or delayed on account thereof.

ARTICLE 7

INDEMNITY

7.1 Indemnity .

(a) The liability of Provider with respect to this Services Agreement or in connection with the performance, delivery or provision of any Service provided under this Services Agreement shall be limited to the Losses of Recipient arising from Provider’s willful misconduct or gross negligence; provided that in no event shall the liability exceed the fees previously paid to Provider by Recipient in respect of the Service from which such liability flows.

(b) Recipient hereby agrees to indemnify Provider and its Affiliates from any and all Losses resulting from a demand, claim, lawsuit, action or proceeding relating to Provider’s conduct in connection with the provision of Services to Recipient under this Services Agreement, except to the extent such Losses arise out of the willful misconduct or gross negligence of Provider or any of its employees, agents, officers and directors. Provider hereby agrees to indemnify Recipient and its Affiliates from any and all Losses resulting from a demand, claim, lawsuit, action or proceeding relating to Provider’s willful misconduct or gross negligence in connection with the provision of Services to Recipient under this Services Agreement. The Persons entitled to indemnification pursuant to the foregoing shall be third party beneficiaries of the rights to indemnification described in this Section 7.1(b).

(c) Notwithstanding the foregoing, no Party shall be liable for any special, consequential, indirect or punitive damages (other than special, consequential, indirect and/or punitive damages awarded to any third party against an indemnified party) with respect to its performance or nonperformance hereunder, or the provision of or failure to provide any Service hereunder, whether such damages or other relief are sought based on breach of contract, negligence, strict liability or any other legal or equitable relief.

ARTICLE 8

CONFIDENTIALITY

8.1 With respect to any information disclosed by one Party to another Party for the purpose of this Services Agreement or otherwise accessible to such other Party during the performance hereunder (“ Confidential Information ”), the receiving Party agrees that it will use the same skill and care as set forth in Section 5.1 to prevent the disclosure or accessibility to others of the disclosing Party’s Confidential Information and will use such Confidential Information only for the purpose of this Services Agreement. The receiving Party shall limit dissemination of and access to the other’s Confidential Information to only such of its employees or agents (including, in the case of the Provider, any third party engaged to provide the services hereunder) or consultants who have a need to know for the purpose of this Services Agreement.

8.2 Specifically excluded from the foregoing obligation is any and all information that:

(a) is already known to the receiving Party at the time of disclosure or thereafter is independently developed by the receiving Party without breach of this Services Agreement;

(b) is already in the public domain at the time of disclosure, or thereafter becomes publicly known other than as the result of a breach by the receiving Party of its obligations under this Services Agreement;

(d) is furnished by the disclosing Party to a third party without a similar restriction on its rights; or

(e) upon advice of counsel, must be produced by the receiving Party as a matter of law; provided , however , that in such case the receiving Party shall promptly notify the disclosing Party and, insofar as is permissible and reasonably practicable without placing the disclosing Party under penalty of law gave it an opportunity to appear and to object to such production before producing the requested information.

ARTICLE 9

MISCELLANEOUS

9.1 Dispute Resolution; Continuation of Services Pending Outcome of Dispute . In the event of any dispute between the Parties or between Providers and Recipients, such disputing Parties shall first attempt to resolve such disputes by negotiating in fairness and good faith. If, after a reasonable period of time, the Parties have been unable to resolve such dispute, the Parties shall follow the dispute resolution procedures set forth in Article VIII of the Separation Agreement, which Article is incorporated herein by reference as if stated herein in its entirety. Notwithstanding the existence of any dispute between the Parties, no Provider shall discontinue the supply of any service provided for herein, unless so provided in an arbitral determination that the respective Recipient is in default of obligation under this Services Agreement.

9.2 Notices . Any notice provided or permitted to be given to a Party under this Services Agreement must be in writing, and may be served by depositing same in the mail, addressed to the Person to be notified, postage prepaid, and registered or certified, with a return receipt requested. Notice given by registered or certified mail shall be deemed given and effective on the date of delivery as shown on the return receipt. Notice may be served in any other manner including telex, telecopy or telegram but shall be deemed given and effective as of the time of actual delivery thereof to the addressees. For purposes of the giving of notice, Recipients and Providers shall be notified at the addresses listed on the Schedules hereto, lessees and lessors shall be notified at the addresses of their respective leased premises and ASD and WABCO shall be notified at the addresses listed below:

If to ASD:

c/o American Standard Companies Inc.

1 Centennial Avenue

Piscataway, NJ 08855

U.S.A.

Attn: Mary Beth Gustafsson, General Counsel

Facsimile: + 1 732.980.3377

If to WABCO:

c/o WABCO Europe BVBA

Chaussée de Wavre, 1789 Box 15

1160 Brussels

Belgium

Attn: General Counsel

Facsimile: + 32 2 663 98 89

With a copy to:

McDermott Will & Emery LLP

227 W. Monroe Street

Chicago, IL 60606

U.S.A

Attn: Neal J. White

Facsimile: +1 312.984.7700

Any Party may change its respective address for notice by the giving of notice of such change in the manner provided above.

9.3 Entire Agreement . Except for those matters provided for in the Separation Agreement or the other agreements contemplated therein, this Services Agreement sets forth the entire agreement of the Parties with respect to its subject matter. This Services Agreement shall not be modified or amended except by written instrument executed by each Party provided ,

however , that a modification or amendment affecting only the relationship between a certain Provider and its Recipient does not require signature by the other Parties. The Schedules to this Services Agreement shall be deemed incorporated in this Services Agreement and shall form a part of it.

9.4 Waiver . The failure of a Party to insist upon strict performance of any provision of this Services Agreement shall not constitute a waiver of, or estoppel against, asserting the right to require such performance in the future, nor shall a waiver or estoppel in any one instance constitute a waiver or estoppel with respect to a later breach of a similar nature or otherwise.

9.5 Severability . If any of the terms and conditions of this Services Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter of this Services Agreement, such contravention or invalidity shall not invalidate the entire Services Agreement. Instead, this Services Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid, and equitable adjustment shall be made and necessary provisions added so as to give effect to the intention of the Parties as expressed in this Services Agreement at the time of the execution of this Services Agreement and of any amendments to this Services Agreement.

9.6 Construction . This Services Agreement shall be construed and enforced in accordance with and governed by the laws of the State of New York, without reference to its conflicts of law rules or principles. The headings in this Services Agreement are not to be considered part of this Services Agreement and are inserted for convenience, identification and reference only and are not intended to interpret, define, or limit the scope, extent, or intent of this Services Agreement or any provision of this Services Agreement. Whenever the context requires, the gender of all words used in this Services Agreement shall include the masculine, feminine and neuter, and the number of all words shall include the singular and the plural.

9.7 Counterpart Execution . This Services Agreement may be executed in counterparts with the same effect as if all of the Parties had signed the same document. Such counterparts shall be construed together and shall constitute one and the same instrument, notwithstanding that all of the Parties are not signatories to the original or the same instrument, or that signature pages from different counterparts are combined. The signature of any Party to one counterpart shall be deemed to be a signature to and may be appended to any other counterpart.

9.8 Successors and Assigns .

(a) This Services Agreement shall inure to the benefit of and shall be binding upon the Parties, their respective legal representatives, successors, and permitted assignees, and all Persons claiming by, through, or under right of any of the aforesaid Persons. This Services Agreement may not be assigned by any Party without the prior written consent of the other Parties; provided , however , that no consent shall be required in the case of assignment by a ASD Entity to a direct or indirect Subsidiary of ASD or by a WABCO Entity to a direct or indirect Subsidiary of WABCO, and provided further that no such assignment shall relieve any Party of any of its obligations hereunder. Notwithstanding the foregoing, a Party may assign this

Services Agreement in connection with a merger transaction in which such Party is not the surviving entity or the sale by such Party of all or substantially all of its Assets, and upon the effectiveness of such assignment the assigning Party shall be released from all of its obligations under this Agreement if the surviving entity of such merger or the transferee of such Assets shall agree in writing, in form and substance reasonably satisfactory to the other Party, to be bound by the terms of this Agreement as if named as a “Party” hereto.

(b) At the request of any Provider or Recipient that is a Party hereto, any other Provider or Recipient that is receiving benefits or has obligations hereunder and is not a signatory hereto shall execute and deliver to the other Parties a counterpart hereof. The failure of any Person that is receiving benefits or has obligations hereunder to execute a counterpart hereof shall not affect the enforceability of this Services Agreement against such Person or against any other Party hereto.

9.9 No Third Party Rights . The provisions of this Service Agreement are intended to bind the Parties to each other and are not intended and do not create rights in any other person, including any employee of the VCS Business or ASD, and no Person is intended to be or is a third party beneficiary of any of the provisions of this Services Agreement.

9.10 Authorization . Each of the Parties hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of each such Party enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

[SIGNATURE PAGES FOLLOW]

WITNESS WHEREOF, the duly authorized officers or representatives of the parties hereto have duly executed this Services Agreement as of the date first written above.


AMERICAN STANDARD COMPANIES INC.

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: Senior Vice President and Chief Financial Officer


WABCO HOLDINGS INC.

By:		/s/ U LRICH M ICHEL
		Name: Ulrich Michel
		Title: Chief Financial Officer

Exhibit 10.3

EMPLOYEE MATTERS AGREEMENT

BY AND BETWEEN AMERICAN STANDARD COMPANIES, INC. AND

WABCO HOLDINGS INC.

EMPLOYEE MATTERS AGREEMENT

This EMPLOYEE MATTERS AGREEMENT (this “Agreement”), dated as of July 16, 2007 is by and between American Standard Companies Inc., a Delaware corporation (“ASD”), and WABCO Holdings Inc., a Delaware corporation (“WABCO”) (each a Party, and together the “Parties”).

WHEREAS, the Board of Directors of ASD has determined that it is in the best interests of ASD and its shareholders for ASD to distribute to the holders of ASD Common Stock on such record date as may be established by the Board of Directors of ASD on a pro rata basis all of the issued and outstanding shares of common stock, par value $0.01 per share, of WABCO (the “WABCO Common Stock”) (such transaction, the “Distribution”);

WHEREAS, in furtherance of the foregoing, ASD and WABCO have entered into a Separation and Distribution Agreement, dated as of July 16, 2007 (the “Separation Agreement”), and other specific agreements that will govern certain matters relating to the Separation (as defined in the Separation Agreement) and the Distribution and the relationship of ASD, WABCO, and their respective Affiliates following the Distribution;

WHEREAS, ASD and WABCO have entered into a Transition Services Agreement, dated as of July 16, 2007 (the “Transition Agreement”) that will govern the provision of transition services and matters relating to transition of inter-company services and the relationship of ASD, WABCO and their respective affiliates following Separation; and

WHEREAS, ASD and WABCO desire to enter into this Agreement to provide for the allocation of assets, liabilities, and responsibilities with respect to certain matters relating to employees (including employee compensation and benefit plans and programs) between them.

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Separation Agreement. For purposes of this Agreement the following terms shall have the following meanings:

1.1 “Agreement” means this Employee Matters Agreement.

1.2 “Ancillary Benefits” means company contributions to the American Standard Companies Inc. Employee Stock Ownership Plan, active medical, life and dental benefits, and accruals for retiree life and medical benefits all to the extent applicable.

1.3 “ASD Defined Benefit Retirement Plans” means The American Standard Pension Plan and the American Standard Merged Hourly Pension Plan.

1.4 “ASD Defined Contribution Plans” means the American Standard Companies Inc. Employee Stock Ownership Plan and the Savings Plan of American Standard Inc. and Participating Subsidiary Companies.

1.5 “ASD Employee” means any individual who, as of the Effective Time, is either actively employed by or then on a leave of absence from ASD or an ASD Group member (including maternity, paternity, family, sick, short-term or long-term disability leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves), but does not include any ASD Transferee or any WABCO Employee. Notwithstanding the foregoing, WABCO Employees who are on long term disability benefits at the Effective Time (“WABCO LTD Employees”) shall be considered ASD Employees unless and until either (a) their employment is terminated by ASD or (b) they return to work or are able to return to work, at which time they shall become WABCO Employees.

1.6 “ASD Equity-Based Plans” means the American Standard Companies Inc. 2002 Omnibus Incentive Plan, as amended and the American Standard Companies Inc. Stock Incentive Plan, each as amended from time to time.

1.7 “ASD Transferees” means individuals who, immediately prior to the Effective Time, performed services for WABCO or a WABCO Group member as employees of ASD or an ASD Group member (other than WABCO or a WABCO Group member) and who will become employees of WABCO or a WABCO Group member as of the Effective Time or other individuals who are transferring to WABCO or a WABCO Group member from ASD or an ASD Group member as of the Effective Time.

1.8 “COBRA” means the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Code Section 4980B and ERISA Sections 601 through 608.

1.9 “Code” means the Internal Revenue Code of 1986, as amended, or any successor federal income tax law. Reference to a specific Code provision also includes any proposed, temporary, or final regulation in force under that provision.

1.10 “Disposition Year” means the ASD fiscal year during which the Distribution occurs.

1.11 “Effective Time” shall mean 11:59 p.m., New York City, New York time, on July 31, 2007.

1.12 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. Reference to a specific provision of ERISA also includes any proposed, temporary, or final regulation in force under that provision.

1.13 “Health and Welfare Plans,” when immediately preceded by “ASD,” means the health and welfare plans established and sponsored by ASD or an ASD Group member (other than WABCO or a WABCO Group member), and when immediately preceded by “WABCO,” means the health and welfare plans sponsored and maintained by WABCO or a WABCO Group member before or after the Effective Time.

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1.14 “HIPAA” means the health insurance portability and accountability requirements for “group health plans” under the Health Insurance Portability and Accountability Act of 1996, as amended.

1.15 “Incentive Stock Option” means an option which qualifies as an incentive stock option under the provisions of Section 422 of the Code.

1.16 “Individual Agreement” means an individual contract or agreement (whether written or unwritten) entered into between ASD, an ASD Group member, WABCO, or a WABCO Group member and a ASD Employee, ASD Transferee or WABCO Employee that establishes the right of such individual to special compensation or benefits, including, but not limited to, any supplemental pension benefit, deferred compensation, severance, hiring bonus, loan, guaranteed payment, or disability benefit.

1.17 “Option,” when immediately preceded by “ASD,” means an option (either nonqualified or incentive) to purchase shares of ASD Common Stock pursuant to an ASD Equity-Based Plan and, when immediately preceded by “WABCO,” means an option to purchase shares of WABCO Common Stock, which option is granted pursuant to the WABCO Long Term Incentive Plan as part of the adjustment to ASD Options as set forth in Section 5.2.

1.18 “Participating Company” means (a) ASD, (b) any Person (other than an individual) that ASD has approved for participation in, and which is participating in, a Plan and (c) any Person (other than an individual) which, by the terms of such a Plan, participates in such Plan.

1.19 “Plan,” when immediately preceded by “ASD,” means any plan, policy, program, payroll practice, on-going arrangement, contract, trust, insurance policy or other agreement or funding vehicle (including a Health and Welfare Plan) for which the eligible classes of participants include employees or former employees of ASD or an ASD Group member (which may include employees of WABCO Group members prior to the Effective Time), and when immediately preceded by “WABCO,” means any plan, policy, program, payroll practice, on-going arrangement, contract, trust, insurance policy or other agreement or funding vehicle (including a Health and Welfare Plan) for which the eligible classes of participants are limited to employees or former employees (and their eligible dependants) of WABCO or a WABCO Group member, but no other ASD Group member.

1.20 “Restricted Stock Unit,” when immediately preceded by “ASD,” means a unit granted by ASD pursuant to an ASD Equity-Based Plan representing a general unsecured promise by ASD to deliver a share of ASD Common Stock (or an amount in cash equal to the value thereof) and when immediately preceded by “WABCO,” means a unit granted by WABCO representing a general unsecured promise by WABCO to deliver a share of WABCO Common Stock, which unit is granted pursuant to the WABCO Long Term Incentive Plan as part of the adjustment to ASD Restricted Stock Units as set forth in Section 5.2.

1.21 “WABCO Employee” means any individual who, as of the Effective Time, is either actively employed by or then on a short-term leave of absence from WABCO or a WABCO Group

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member (including maternity, paternity, family, sick, short-term disability leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves), but shall not include WABCO LTD Employees, unless such employees return to work with WABCO.

1.22 “WABCO 401(k) Plan” means the tax-qualified 401(k) defined contribution savings plan to be established by WABCO or a WABCO Group member prior to the Effective Time.

1.23 “WABCO Long Term Incentive Plan” means the WABCO Holdings Inc. Omnibus Incentive Plan adopted or to be adopted by WABCO.

ARTICLE II

GENERAL PRINCIPLES

2.1 Assumption and Retention of Liabilities . ASD and WABCO intend that employment-related Liabilities associated with employees of the WABCO business are to be assumed by WABCO or a WABCO Group member and that employment-related Liabilities associated with former employees of the WABCO business (whether such individuals were employed by a WABCO Group member or otherwise) are also to be assumed by WABCO, except as specifically set forth herein. As of the Effective Time, WABCO or another member of the WABCO Group shall assume and agree to pay, perform, fulfill, and discharge, except as expressly provided in this Agreement, (i) all Liabilities arising under or related to WABCO Plans, (ii) all employment or service-related Liabilities with respect to (A) all WABCO Employees (and their dependents and beneficiaries), (B) all former employees of WABCO or a WABCO Group member (and their dependents and beneficiaries) and (C) any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or nonpayroll worker or in any other employment or similar relationship primarily connected to WABCO or a WABCO Group member, (iii) all employment or service-related Liabilities with respect to all ASD Transferees and (iv) any Liabilities expressly transferred to WABCO or a WABCO Group member under this Agreement. Notwithstanding the foregoing, Liabilities described in part (B) of clause (ii) of the preceding sentence shall not be assumed by WABCO to the extent that any individual described in such clause is actively employed by an ASD Group member as of the Effective Time and is not an ASD Transferee. To the extent that any employment and service-related Liabilities exist with respect to former ASD Employees whose last employment with an ASD Group member was primarily connected to the VCS Business and which are not otherwise specifically dealt with herein, the parties shall cooperate to effect the transfer to, and assumption of, such Liabilities by WABCO.

2.2 WABCO Participation in the ASD Plans . Except as set forth in Section 4.1 of this Agreement, effective as of the Effective Time, WABCO and each WABCO Group member shall cease to be Participating Companies in any ASD Plan, and ASD and WABCO shall take all necessary action before the Effective Time to effectuate such cessation as a Participating Company.

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2.3 Sponsorship of the WABCO Plans . Effective no later than immediately prior to the Effective Time, ASD and WABCO shall take such actions (if any) as are required to cause WABCO or a WABCO Group member to assume, sponsorship of, and all liabilities with respect to, each WABCO Plan.

2.4 Terms of Participation by WABCO Employees in WABCO Plans . ASD and WABCO shall adopt, or cause to be adopted, all reasonable and necessary amendments and procedures to prevent WABCO Employees and former employees from receiving duplicative benefits from the ASD Plans and the WABCO Plans. With respect to WABCO Employees and ASD Transferees, each WABCO Plan shall provide that for purposes of determining eligibility to participate, vesting, and entitlement to benefits (but not for accrual of pension benefits under any defined benefit pension plan), service prior to the Effective Time with ASD or an ASD Group member shall be treated as service with WABCO or the applicable WABCO Group member. Such service also shall apply for purposes of satisfying any waiting periods, evidence of insurability requirements, or the application of any preexisting condition limitations under any WABCO Plan. Each WABCO Plan shall, to the extent practicable, waive pre-existing condition limitations with respect to WABCO Employees and ASD Transferees.

2.5 Approval of Plan . Prior to the Effective Time, ASD shall cause WABCO to adopt the WABCO Long Term Incentive Plan.

2.6 Employment of ASD Transferees . Except for purposes of the Options and Restricted Stock Units described in Section 5.2 and subject to the last sentence of Section 3.1(b), as of the Effective Time, all ASD Transferees shall terminate their employment with ASD or an ASD Group member and shall commence to be employees of WABCO or a WABCO Group member (as determined by WABCO), provided, however, that such termination shall not be treated as a separation of service for purposes of any plan or agreement (or any benefit thereunder) which is subject to the provisions of Section 409A of the Code.

2.7 Delivery of Shares; Registration Statement . From and after the Effective Time, WABCO shall have sole responsibility for delivery of shares of WABCO Common Stock in satisfaction of any obligations to deliver such shares under the ASD Plans (including delivery to ASD Employees and former ASD Employees) and shall do so without compensation from any ASD Group member. WABCO shall cause a registration statement on Form S-8 (or other appropriate form) to be filed with respect to such delivery prior to the Effective Time and shall cause such registration to remain in effect for so long as there may be an obligation to deliver WABCO shares under such ASD Plans. ASD shall use commercially reasonable efforts to assist WABCO in completing such registration. WABCO and ASD shall cooperate to establish a procedure whereby the other party shall be promptly informed of the obligation to deliver shares to a current or former WABCO Employee or an ASD Employee, as the case may be.

2.8 Labor Relations . To the extent required by applicable law or any agreement with a labor union, works council or similar employee organization, WABCO shall provide notice, engage in consultation and take any similar action which may be required on its part in connection with the Distribution and shall fully indemnify each ASD Group member against any Liabilities arising from its failure to comply with such requirements.

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ARTICLE III

DEFINED CONTRIBUTION, DEFINED BENEFIT AND NON-QUALIFIED DEFERRED COMPENSATION PLANS

3.1

401(k) Plan .

(a)

Establishment of Plan and Trust . ASD and WABCO shall adopt or cause to be adopted the WABCO 401(k) Plan and any trust agreements or other plan documents reasonably necessary and shall cause trustees to be appointed for such plan. Such actions shall be completed prior to the Effective Time.

(b)

Assumption of Liabilities and Transfer of Assets . In accordance with applicable law, ASD and WABCO shall cause, in the manner described herein, the accounts under the ASD Defined Contribution Plans of each WABCO Employee and former WABCO Employee and each ASD Transferee to be transferred to the WABCO 401(k) Plan as soon as practicable after the Effective Time. As soon as practicable after the Effective Time: (i) ASD shall cause the accounts (including any outstanding loan balances) of each WABCO Employee, former WABCO employee and ASD Transferee in the ASD Defined Contribution Plans to be transferred to the WABCO 401(k) Plan and its related trust; (ii) WABCO (or any successor WABCO Group member) and the WABCO 401(k) Plan shall assume and be solely responsible for all liabilities under the WABCO 401(k) Plan relating to the accounts that are so transferred as of the time of such transfer; and (iii) WABCO shall cause such transferred accounts to be accepted by the WABCO 401(k) Plan and its related trust and shall cause the WABCO 401(k) Plan to satisfy all protected benefit requirements under the Code and applicable law with respect to the transferred accounts. In determining whether a WABCO Employee is vested in his or her account under the WABCO 401(k) Plan, the WABCO 401(k) Plan shall credit each WABCO Employee and ASD Transferee with all the individual’s service credited under the ASD Defined Contribution Plans. Participants in the ASD Defined Contribution Plans will not be treated as having experienced a termination of service for purposes of such plans as a result of the Distribution or the occurrence of the Effective Time.

3.2

Other United States Retirement and Non-Qualified Deferred Compensation Plans .

(a)

Following the Effective Time, ASD (or the appropriate ASD Group member) shall retain all Liabilities with respect to each ASD Defined Benefit Plan which is a tax-qualified pension plan under the Internal Revenue Code of the United States. All WABCO Employees and ASD Transferees who are participants in the American Standard Pension Plan as of the Effective Time and who terminate their employment with all ASD Group members as a result of the Distribution shall be fully vested in their account balances in that plan.

(b)

Following the Effective Time, ASD shall retain sponsorship of and all Liabilities with respect to each ASD Plan covering United States taxpayers which is a

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non-qualified pension, savings or deferred compensation plan. A list of such plans is set forth on Schedule 3.2b. For purposes of determining when a distribution is required from the ASD Plans described in this Section 3.2(b), WABCO Employees who were participants in such plans will be treated as not having experienced a separation from service until such employees have separated from service from all WABCO Group members.

(c)

ASD shall provide WABCO with a list of the WABCO Employees and ASD Transferees who are participants in the plans described in this Section 3.2 and WABCO shall, from and after the Effective Time, provide ASD with notice of the separations from service of any such individual.

3.3 Non-U.S. Retirement Plans . Notwithstanding anything to the contrary herein, following the Effective Time, ASD (or the appropriate ASD Group member) shall retain sponsorship of the WABCO Equipment of Canada Hourly Employee Pension Plan, including retaining all Liabilities and plan assets thereto. With respect to any ASD Plan covering non-U.S. WABCO Employees and which is a defined benefit or defined contribution retirement or pension plan, WABCO shall cause each such WABCO Employee to become covered by a corresponding WABCO Plan which is a defined benefit or defined contribution retirement or pension plan, effective as of the Effective Time or as soon as practicable thereafter and shall, to the extent such coverage does not commence until following the Effective Time, indemnify ASD for any continued participation by such employee in the corresponding ASD Plan. ASD will reasonably cooperate with WABCO in complying with the immediately preceding sentence. With respect to any WABCO Plan, which is a retirement or pension plan covering non-U.S. ASD Employees, ASD shall cause each such ASD Employee to become covered by a corresponding ASD Plan which is a defined benefit or defined contribution retirement or pension plan, effective as of the Effective Time or as soon as practicable thereafter and shall, to the extent such coverage does not commence until following the Effective Time, indemnify WABCO for any continued participation by such employee in the corresponding WABCO Plan. WABCO will reasonably cooperate with ASD in complying with the immediately preceding sentence. The parties have set forth on Schedule 3.3a a listing of those non-U.S. ASD retirement or pension plans in which WABCO Employees are known to participate and have set forth on Schedule 3.3b a listing of those non-U.S. WABCO retirement or pension plans in which ASD Employees are known to participate. Schedules 3.3a and 3.3b may be updated by mutual written consent of ASD and WABCO at any time up to 60 days after the Effective Time.

ARTICLE IV

HEALTH AND WELFARE PLANS

4.1 Transitional Services under Health and Welfare Plans; Cessation of Participation in ASD Plans . For the period commencing upon the Effective Time through December 31, 2007 (or such earlier date as the parties may mutually agree), ASD shall permit WABCO Employees and ASD Transferees to continue to participate in the ASD United States Plans in which such employees participated immediately prior to the Effective Time and which are Health and Welfare Plans which provide group health, life, dental, accidental death & dismemberment, health care reimbursements, dependent care assistance and disability benefits. The terms and conditions of such continued participation shall be governed by the Transition Services Agreement and the terms of the applicable ASD Plans. For the avoidance of doubt, WABCO Employees and ASD Transferees who do not participate in an ASD Plan which is a Health and Welfare Plan in the United States will cease to be active participants in all ASD Plans (including those which are

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Health and Welfare Plans) as of the Effective Time, except as set forth below. The date upon which a WABCO Employee or ASD Transferee ceases to participate in the United States ASD Health and Welfare Plans is hereinafter referred to as the “Benefits Transition Date.” With respect to any ASD Plan outside the United States covering WABCO Employees and which is a Health and Welfare Plan, WABCO shall cause each such WABCO Employee to become covered by a corresponding WABCO Plan which is a Health and Welfare Plan, effective as of the Effective Time or as soon as practicable thereafter and shall, to the extent such coverage does not commence until following the Effective Time, indemnify ASD for any continued participation by such employee in the corresponding ASD Plan. ASD will reasonably cooperate with WABCO in complying with the immediately preceding sentence. With respect to any WABCO Plan, which is a Health and Welfare Plan covering ASD Employees, ASD shall cause each such ASD Employee to become covered by a corresponding ASD Plan which is a Health and Welfare Plan, effective as of the Effective Time or as soon as practicable thereafter and shall, to the extent such coverage does not commence until following the Effective Time, indemnify WABCO for any continued participation by such employee in the corresponding WABCO Plan. WABCO will reasonably cooperate with ASD in complying with the immediately preceding sentence. The parties have set forth on Schedule 4.1a a listing of those non-U.S. ASD Health and Welfare Plans in which WABCO Employees are known to participate and have set forth on Schedule 4.1b a listing of those non-U.S. WABCO Health and Welfare Plans where ASD Employees are known to participate. Schedules 4.1a and 4.1b may be updated by mutual written consent of ASD and WABCO at any time up to 60 days after the Effective Time.

4.2

Allocation of Health and Welfare Plan Liabilities .

(a)

Without limiting the obligations of WABCO under the Transition Services Agreement, all Liabilities relating to, arising out of, or resulting from health and welfare coverage or claims incurred by or on behalf of WABCO Employees, ASD Transferees, or their covered dependents (other than Liabilities relating to health and welfare coverage or claims incurred under the WABCO Health and Welfare Plans, if such WABCO Employees or ASD Transferees participate in the WABCO Health and Welfare Plans on or before the Benefits Transition Date) under the ASD Health and Welfare Plans on or before the Benefits Transition Date shall remain Liabilities of ASD, and all Liabilities relating to health and welfare coverage or claims incurred by or on behalf of WABCO Employees, ASD Transferees, or their covered dependents after the Benefits Transition Date shall be Liabilities of WABCO under the corresponding WABCO Health and Welfare Plans. A claim or Liability (i) for medical and dental benefits shall be deemed to be incurred upon the rendering of health services giving rise to the obligation to pay such benefits; (ii) for life insurance and accidental death and dismemberment insurance benefits shall be deemed to be incurred upon the occurrence of the event giving rise to the entitlement to such benefits; and (iii) for disability benefits shall be deemed to be incurred on the date an individual is deemed to be disabled, as defined under the applicable plan.

(b)

Without limiting the obligations of WABCO under the Transition Services Agreement, ASD shall be responsible for all Liabilities under the applicable ASD Health and Welfare Plans that relate to, arise out of, or result from any hospitalization of a WABCO Employee, former employee, ASD Transferee or his

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or her covered dependent which begins on or before the Benefits Transition Date under a ASD Health and Welfare Plan and continues after the Benefits Transition Date until such hospitalization or treatment for such condition is concluded or coverage is discontinued subject to applicable plan rules and limitations.

4.3 Health and Welfare Plan Transitional Coverage Rules . WABCO shall cause WABCO Employees, ASD Transferees and their covered dependents who participate in ASD Health and Welfare Plans immediately before the Benefits Transition Date to be automatically eligible for enrollment on the day following the Benefits Transition Date in WABCO Health and Welfare Plans corresponding to the ASD Health and Welfare Plans in which the WABCO Employee, ASD Transferee, and his or her covered dependents, if any, participated immediately before the Benefits Transition Date. The transfer of employment from ASD or an ASD Group member to WABCO or a WABCO Group member as of the Effective Time shall not be required to be treated as a “status change” with respect to any WABCO Employee or ASD Transferee under the ASD Health and Welfare Plans or the WABCO Health and Welfare Plans.

4.4 Retiree Welfare Benefits . Each WABCO Employee and ASD Transferee shall be deemed to have terminated employment with all ASD Group members as of the Effective Time for purposes of each U.S. ASD Health and Welfare Plan which provides post-termination welfare benefits (other than for purposes of COBRA coverage, which is governed by the provisions of Section 4.7 hereof). ASD or the applicable ASD Group member shall retain all Liabilities with respect to such plans, other than Liabilities under those plans set forth on Schedule 4.4 which are provided to former WABCO Employees in the United States pursuant to a collective bargaining agreement, which Liabilities shall be assumed and performed by WABCO as of the Effective Time and with respect to which WABCO will fully indemnify each ASD Group member. To the extent that current WABCO Employees have, as of the Effective Time, attained age 55 with 10 years of service credit under the ASD retiree medical plan, such employees may, at the time of retirement from all WABCO Group members, elect coverage under either (1) the ASD retiree medical plan or (2) a retiree medical plan of the applicable WABCO Group member, in each case as may be in effect at the time and as may be amended or terminated in accordance with its terms from time to time. The WABCO Employee will, upon such election, forfeit his or her entitlement to the coverage that was not elected. WABCO Employees who retire between the Effective Time and the Benefits Transition Date and who elect coverage under the WABCO retiree medical plan, shall be provided coverage under the ASD retiree medical plan until their Benefits Transition Date. WABCO Employees who, as of the Effective Time, have achieved age 55 with 10 years of service credit under the ASD welfare plan shall be entitled to retiree life insurance coverage from ASD provided that they retiree from WABCO no later than December 31, 2008, which is the end of the transition period during which ASD is continuing to offer retiree life insurance coverage to its non-union employees. Notwithstanding anything to the contrary herein, following the Effective Time, ASD (or the appropriate ASD Group member) shall retain sponsorship of retiree health, life insurance and other welfare benefits for WABCO retirees in Canada, including retention of all Liabilities and assets or policies associated therewith.

4.5 Workers’ Compensation Liabilities . Except as provided below, all workers’ compensation Liabilities relating to, arising out of, or resulting from any claim by ASD Transferees or WABCO Employees that result from an accident or from an occupational disease which is incurred or becomes manifest, as the case may be, on or before the Effective Time and while such individual was employed by ASD or an ASD Group member shall be retained by ASD, provided that WABCO shall reimburse ASD or the applicable ASD Group member for any deductibles or co-payments paid in respect of such Liabilities, to the extent attributable to such

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Liabilities. WABCO and each WABCO Group member shall be solely responsible for all workers’ compensation Liabilities relating to, arising out of, or resulting from any claim incurred for a compensable injury sustained by a WABCO Employee or ASD Transferee that results from an accident or from an occupational disease which is incurred or becomes manifest, as the case may be, after the Effective Time. For purposes of this Agreement, an injury shall be deemed to be sustained upon the occurrence of the event giving rise to eligibility for workers’ compensation benefits or, in the case of an occupational disease, at such time as the occupational disease is diagnosed by a qualified medical professional. ASD, each ASD Group member, WABCO and each WABCO Group member shall cooperate with respect to any notification to appropriate governmental agencies of the disposition and the issuance of new, or the transfer of existing, workers’ compensation insurance policies and claims handling contracts.

4.6 Payroll Taxes and Reporting . ASD and WABCO shall, to the extent practicable, (i) treat WABCO (or a WABCO Group member designated by WABCO) as a “successor employer” and ASD (or the appropriate ASD Group member) as a “predecessor,” within the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to WABCO Employees and ASD Transferees for purposes of taxes imposed under the United States Federal Unemployment Tax Act or the United States Federal Insurance Contributions Act, and (ii) cooperate with each other to avoid, to the extent possible, the filing of the more than one IRS Form W-2 with respect to each WABCO Employee and ASD Transferee for the Disposition Year. Without limiting in any manner the obligations and Liabilities of the parties under the Tax Sharing Agreement, ASD, each ASD Group member, WABCO and each WABCO Group member shall each bear its responsibility for payroll tax obligations and for the proper reporting to the appropriate governmental authorities of compensation earned by their respective employees after the Effective Time, including compensation related to the exercise of Options or the vesting or exercise of other equity awards.

4.7 COBRA and HIPAA Compliance . ASD shall be responsible for administering compliance with the health care continuation requirements of COBRA, the certificate of creditable coverage requirements of HIPAA, and the corresponding provisions of the ASD Health and Welfare Plans with respect to WABCO Employees and ASD Transferees and their covered dependents who incur a COBRA qualifying event or loss of coverage under the ASD Health and Welfare Plans at any time on or before the Benefits Transition Date. Subject to the provisions of the Transition Service Agreement, effective immediately after the Benefits Transition Date, WABCO shall be responsible for administering compliance with the health care continuation requirements of COBRA, the certificate of creditable coverage requirements of HIPAA, and the corresponding provisions of the WABCO Health and Welfare Plans with respect to WABCO Employees, ASD Transferees and their covered dependents who incur a COBRA qualifying event or loss of coverage under the WABCO Health and Welfare Plans at any time after the Benefits Transition Date.

4.8 Vacation and Paid Time Off . As of the Effective Time, the applicable WABCO Group Member shall credit each WABCO Employee and ASD Transferee with the unused vacation days and personal and sickness days that such individual has accrued immediately prior to the Effective Time in accordance with the vacation and personnel policies applicable to such employee immediately prior to the Effective Time.

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4.9 WABCO LTD Employees . WABCO shall hire or cause a WABCO Group member to hire each WABCO LTD Employee if such individual is able to return to work within the time period prescribed under the applicable leave policy governing such employee at the time the disability commenced and shall indemnify each ASD Group member against any Liability with respect to a failure by WABCO or a WABCO Group member to hire such employee. To the extent that a WABCO Employee in the United States is on short-term disability leave as of the Effective Time and subsequently becomes entitled to long-term disability benefits as a result of such disability (without having returned to work), such long-term disability benefits will be provided under the applicable ASD Plan. On or about one year after the Effective Time, ASD shall calculate the net present value of the Ancillary Benefits provided to the WABCO LTD Employees in accordance with the assumptions used under FAS106 to determine the costs of said benefits, whereupon WABCO shall pay such amount to ASD.

ARTICLE V

INCENTIVE COMPENSATION, EQUITY COMPENSATION AND OTHER BENEFITS

5.1

ASD Cash-Based Incentive Plans .

(a)

ASD Annual Bonus Plans . As of the Effective Time, WABCO shall assume all Liabilities with respect to the participation of each WABCO Employee and ASD Transferee who is then participating in any cash-based annual bonus or incentive compensation plan of an ASD Group member. The Management Development and Compensation Committee of the WABCO Board of Directors (or its designee) shall have the discretion to make equitable adjustments to the performance metrics, goals and payments under such plans to reflect the Distribution.

(b)

ASD Long-Term Incentive Plans . As of the Effective Time, WABCO shall assume all Liabilities with respect to the participation of each WABCO Employee and ASD Transferee who is then participating in any cash-based long-term incentive compensation plan of an ASD Group member. The Management Development and Compensation Committee of the WABCO Board of Directors (or its designee) shall have the discretion to make equitable adjustments to the performance metrics, goals and payments under such plans to reflect the Distribution.

5.2 Awards under the ASD Equity-Based Plan or Otherwise . ASD and WABCO shall use their commercially reasonable efforts to take all actions necessary or appropriate so that each outstanding ASD Option and ASD Restricted Stock Unit outstanding immediately prior to the Effective Time shall be adjusted as set forth in this Section 5.2.

(a)

ASD Options.

(i)

2007 Grants and Incentive Stock Options Held By WABCO Employees and ASD Transferees . Each ASD Option issued under an ASD Equity-Based Plan that is (1) held by a WABCO Employee or an ASD Transferee, (2) outstanding immediately prior to the Effective Time and (3) either an Incentive Stock Option or any ASD Option granted during 2007 will be

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converted, as of the Effective Time, solely into a WABCO Option. The number of shares of WABCO Common Stock subject to the converted option will be equal to the number of shares of ASD Common Stock subject to the ASD Option immediately prior to the Effective Time, multiplied by a fraction, the numerator of which is the fair market value of a share of ASD Common Stock immediately prior to the Effective Time (based on the closing price of the ASD Common Stock immediately prior to the Effective Time, trading regular way, hereinafter, the “ASD Closing Price”) and the denominator of which is the fair market value of a share of WABCO Common Stock immediately following the Effective Time (based on the opening trading prices of WABCO immediately following the Effective Time, hereinafter, the “Opening WABCO Stock Price”), with the result being rounded down to the nearest whole share. The fraction described in the preceding sentence is referred to hereinafter as the “WABCO Concentrated Method Fraction”. The per share exercise price of the converted WABCO Option will be equal to the per share exercise price of the original ASD Option divided by the WABCO Concentrated Method Fraction, with the result being rounded up to the nearest whole cent.

(ii)

Other Incentive Stock Options . Each ASD Option issued under an ASD Equity-Based Plan that is (1) held by an individual who is not a WABCO Employee or ASD Transferee, (2) outstanding immediately prior to the Effective Time and (3) an Incentive Stock Option will be converted, as of the Effective Time, solely into an adjusted ASD Option. The number of shares of ASD Common Stock subject to the adjusted ASD Option will be equal to the number of shares of ASD Common Stock subject to the option immediately prior to the Effective Time multiplied by a fraction, the numerator of which is the fair market value of a share of ASD Common Stock immediately prior to the Effective Time (based on the closing price of ASD Common Stock immediately prior to the Effective Time, trading regular way) and the denominator of which is the fair market value of ASD Common Stock immediately following the Effective Time (based on the opening trading prices of the ASD Common Stock on the first trading day immediately following the Effective Time, hereinafter, the “Opening ASD Stock Price”), with the result being rounded down to the nearest whole share. The fraction described in the preceding sentence is referred to hereinafter as the “ASD Concentrated Method Fraction”. The per share exercise price of the adjusted ASD Option will be equal to the per share exercise price of the original ASD Option divided by the ASD Concentrated Method Fraction, with the result being rounded up to the nearest whole cent.

(iii)

2007 Options Grants Held By Individuals Other Than WABCO Employees or ASD Transferees and all Pre-2007 Option Grants which are not Incentive Stock Options . Each ASD Option that is not described in clause (i) or (ii) hereof and which is outstanding immediately prior to the Effective Time will be converted into two separate options, an adjusted ASD Option

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and a WABCO Option. The number of shares of stock subject to each of the adjusted ASD Options will be equal to the number of shares of ASD Common Stock subject to the ASD Option immediately prior to the Effective Time. The number of shares of stock subject to the WABCO Option will be equal to the number of shares of WABCO Common Stock the option holder would have received had the option to acquire the Company’s common stock been fully exercised immediately prior to the Effective Time, rounded down to the nearest whole share. The per share exercise price of the adjusted ASD Option shall be equal to the product of (1) the per share exercise price of the ASD Option immediately prior to the Effective Time multiplied by (2) a fraction, the numerator of which shall be the Opening ASD Stock Price and the denominator of which shall be the sum of (i) the Opening ASD Stock Price and (ii) the quotient determined by dividing the Opening WABCO Stock Price by the WABCO Distribution Ratio (as defined below), which product shall be rounded up to the nearest whole cent. The per share exercise price of the WABCO Option shall be equal to the product of (1) the per share exercise price of the ASD Option immediately prior to the Effective Time multiplied by (2) a fraction, the numerator of which shall be the Opening WABCO Stock Price and the denominator of which shall be the sum of (i) the Opening ASD Stock Price and (ii) the quotient determined by dividing the Opening WABCO Stock Price by the WABCO Distribution Ratio, which product shall be rounded up to the nearest whole cent. For purposes of this paragraph (b), “WABCO Distribution Ratio” shall mean the amount determined by dividing (x) the number one (1) by (y) the number of shares of WABCO Common Stock distributed in respect of each share of ASD Common Stock in the Distribution.

(iv)

Option Terms . Each adjusted ASD Option issued shall be subject to the same terms and conditions regarding term, vesting, and other provisions regarding exercise as set forth in the original ASD Option, except as set forth below. Each WABCO Option issued pursuant to this Section 5.2(a) shall be subject to the same terms and conditions regarding term, vesting, and other provisions regarding exercise as set forth in the related ASD Option before the Effective Time, except as set forth below. Notwithstanding the foregoing, ASD will take such action as is necessary to ensure that with respect to Adjusted ASD Options that are held by WABCO Employees as of or following the Effective Time, such individuals will not incur a termination of employment as a result of the Separation for purposes of the Adjusted ASD Options. WABCO will take such action as is necessary to ensure that with respect to the WABCO Option grants that are held by ASD Employees as of or following the Effective Time, such individuals will not incur a termination of employment as a result of the Separation (or such subsequent transfer of employment) for purposes of the WABCO Options. For purposes of the vesting and termination provisions of the Adjusted AD Options and the WABCO Options, continued service with an ASD Group member or a WABCO Group Member shall be considered to be continued service for purposes of such option.

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(b)

Restricted Stock Units.

(i)

Restricted Stock Units held by WABCO Employees and ASD Transferees . Each Restricted Stock Unit based upon ASD common stock that is outstanding and held by a WABCO Employee or an ASD Transferee immediately prior to the Effective Time will be converted into a WABCO Restricted Stock Unit. The number of shares of WABCO Common Stock subject to the WABCO Restricted Stock Unit will be equal to the number of shares of ASD Common Stock subject to the ASD Restricted Stock Unit immediately prior to the Effective Time multiplied by a fraction, the numerator of which is the ASD Closing Price and the denominator of which is the Opening WABCO Stock Price.

(ii)

Other Restricted Stock Units . Each other ASD Restricted Stock Unit will be converted into an adjusted ASD Restricted Stock Unit. The number of shares of ASD Common Stock subject to the adjusted ASD Restricted Stock Unit will be equal to the number of shares of ASD Common Stock subject to the ASD Restricted Stock Unit immediately prior to the Effective Time multiplied by a fraction, the numerator of which is the ASD Closing Price and the denominator of which is the ASD Opening Price.

(iii)

Restricted Stock Unit Terms . WABCO Restricted Stock Units and adjusted ASD Restricted Stock Units shall remain subject to their existing vesting schedule and other terms and conditions so long as the holder thereof shall have remained (or, in accordance herewith, is deemed to have remained) in employment with a member of the ASD Group or a member of the WABCO Group, as the case may be.

(c)

Change in Control Provisions . The ASD and WABCO Options and Restricted Stock Units shall have the change in control provisions set forth on Annex I hereto.

(d)

Taxes . All adjustments described in this Section 5.2 shall be done in a manner which complies with the requirements of Section 409A and Section 424 of the Code, to the extent applicable.

(e)

Partial Interests in Shares . To the extent that any adjustment in stock options or stock appreciation rights described in this Section 5.2 results in any fractional interest in shares, such fractional interest shall be rounded down to the nearest whole share. No fractional interests in shares or stock appreciation rights shall be payable in cash or otherwise.

(f)

Administration . Each of ASD and WABCO shall establish an appropriate administration system in order to handle exercises and delivery of shares in an orderly manner and provide reasonable levels of service for equity award holders.

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5.3 Individual Agreements . As of the Effective Time, WABCO shall, or shall cause a WABCO Group member to assume, and shall thereafter perform, each Individual Agreement with an ASD Transferee. A list of such Individual Agreements is provided on Schedule 5.3.

5.4 ASD Employee Stock Purchase Plan . ASD shall take such action as is necessary or appropriate to cause WABCO Employees and ASD Transferees to receive a refund in cash of all amounts contributed during the offering period in progress under the ASD Employee Stock Purchase Plan as soon as practicable following the Effective Time.

5.5 Confidentiality and Proprietary Information . No provision of the Separation Agreement or this Agreement shall be deemed to release any individual for any violation of any agreement or policy pertaining to confidential or proprietary information of ASD or any of its Affiliates or of WABCO or any of its Affiliates, respectively, or otherwise relieve any individual of his or her obligations under any such agreements or policies.

ARTICLE VI

GENERAL AND ADMINISTRATIVE

6.1 Sharing of Participant Information . To the maximum extent permitted under applicable law, ASD and WABCO shall share, ASD shall cause each applicable ASD Group member to share, and WABCO shall cause each applicable WABCO Group member to share, with each other and their respective agents and vendors all participant information reasonably necessary for the efficient and accurate administration of each of the ASD Plans and the WABCO Plans. ASD and WABCO and their respective authorized agents shall, subject to applicable laws on confidentiality, be given reasonable and timely access to, and may make copies of, all information relating to the subjects of this Agreement in the custody of the other party, to the extent necessary for such administration. Until the Effective Time, all participant information shall be provided in the manner and medium applicable to Participating Companies in the ASD Plans generally, and thereafter until the time at which the Parties subsequently determine, all participant information shall be provided in a manner and medium that are compatible with the data processing systems of ASD as in effect as of the Effective Time, unless otherwise agreed to by ASD and WABCO.

6.2 Non-Termination of Employment; No Third Party Beneficiaries . Except as expressly provided in this Agreement or as set forth in Schedule 6.2, no provision of this Agreement or the Separation Agreement shall be construed to create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part of any future, present, or former employee of ASD, an ASD Group member, WABCO, or a WABCO Group member under any ASD Plan or WABCO Plan or otherwise. Except as expressly provided in this Agreement, nothing in this Agreement shall preclude WABCO or any WABCO Group member, at any time after the Effective Time, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any WABCO Plan, any benefit under any WABCO Plan or any trust, insurance policy or funding vehicle related to any WABCO Plan; and (iii) except as expressly provided in this Agreement, nothing in this Agreement shall preclude ASD or any ASD Group member, at any time after the Effective Time, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any ASD Plan, any benefit under any ASD Plan or any trust, insurance policy or funding vehicle related to any ASD Plan.

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6.3 Audit Rights with Respect to Information Provided . Each of ASD and WABCO, and their duly authorized representatives, shall have the right to conduct audits with respect to all information provided to it by the other party. The parties shall cooperate to determine the procedures and guidelines for conducting audits under this Section 6.3, which shall require reasonable advance notice by the auditing party. The auditing party shall have the right to make copies of any records at its expense, subject to applicable law. The parties agree that time will be of the essence in the conduct and completion of such audits.

6.4 Fiduciary Matters . ASD and WABCO each acknowledge that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable law, and no party shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination (as supported by advice from counsel experienced in such matters) that to do so would violate such a fiduciary duty or standard. Each party shall be responsible for taking such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities and shall fully release and indemnify the other party for any Liabilities caused by the failure to satisfy any such responsibility.

6.5 Consent of Third Parties . If any provision of this Agreement is dependent on the consent of any third party (such as a vendor or governmental entity) and such consent is withheld, ASD and WABCO shall use commercially reasonable efforts to implement the applicable provisions of this Agreement to the full extent practicable. If any provision of this Agreement cannot be implemented due to the failure of such third party to consent, ASD and WABCO shall negotiate in good faith to implement the provision in a mutually satisfactory manner. The phrase “commercially reasonable efforts” as used herein shall not be construed to require the incurrence of any non-routine or unreasonable expense or liability or the waiver of any right.

6.6 Taxation . Obligations and Liabilities with respect to tax deductions with respect to equity and other compensation and benefits provided in this Agreement shall be governed by Schedule 2.03(d) of the Tax Sharing Agreement between ASD and WABCO. WABCO and ASD shall cooperate to comply with applicable law governing tax reporting and withholding with respect to compensation paid pursuant to the plans and agreements referenced herein.

ARTICLE VII

MISCELLANEOUS

7.1 Complete Agreement; Construction . This Agreement, including the Schedules and the Annex, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.

7.2 Counterparts . This Agreement may be executed in more than one counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Parties. Execution of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic copy of a signature shall be deemed to be, and shall have the same effect as, executed by an original signature.

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7.3 Survival of Agreements . Except as otherwise contemplated by this Agreement or any covenants and agreements of the Parties contained in this Agreement shall survive the Effective Time and remain in full force and effect in accordance with their applicable terms.

7.4 Notices . All notices, requests, claims, demands and other communications under this Agreement as between the Parties, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt unless the day of receipt is not a Business Day, in which case it shall be deemed to have been duly given or made on the next Business Day) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 7.4):

To ASD:

American Standard Companies Inc.

1 Centennial Avenue

Piscataway, NJ 08855

U.S.A.

Attn: Mary Beth Gustafsson, General Counsel

Facsimile: (732) 980 - 3377

To WABCO:

c/o

WABCO Europe BVBA

Chaussée de Wavre, 1789 Box 15

1160 Brussels

Belgium

Attn: General Counsel

Facsimile: + 32 2 663 98 89

With a copy to:

McDermott Will & Emery LLP

227 W. Monroe Street

Chicago, IL 60606

U.S.A.

Attn: Neal J. White

Facsimile: (312) 984 - 7700

7.5 Waivers . The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

7.6 Assignment . The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted transferees and assigns. Notwithstanding the foregoing, this Agreement shall not be assignable, in whole or in part, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be null and void.

7.7 Amendments . Subject to the terms of Section 7.8, this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

7.8 Termination, Etc . Notwithstanding anything to the contrary herein, this Agreement may be amended, modified or terminated at any time prior to the Effective Time by and in the sole

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discretion of ASD without the approval of WABCO or the stockholders of ASD. In the event of a termination, no Party shall have any Liability to any other Party or any other Person. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties.

7.9 No Circumvention . The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is to materially undermine the effectiveness of any of the provisions of this Agreement or any Ancillary Agreement.

7.10 Subsidiaries . Each of the Parties shall cause to be performed all actions, agreements and obligations set forth herein to be performed by any Subsidiary or Affiliate of such Party or by any entity that becomes a Subsidiary or Affiliate of such Party on and after the date hereof.

7.11 Third Party Beneficiaries . This Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

7.12 Title and Headings . Titles and headings to Sections and Articles are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

7.13 Schedules . The Schedules attached hereto are incorporated herein by reference and shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

7.14 Governing Law . This Agreement shall be governed by and construed in accordance with the internal Laws, and not the Laws governing conflicts of Laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law), of the State of New York.

7.15 Consent to Jurisdiction . Subject to the provisions of Article VIII of the Separation Agreement, each of the Parties irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York (the “ New York Court “), for the purposes of any suit, action or other proceeding to compel arbitration or for provisional relief in aid of arbitration in accordance with Article VIII of the Separation Agreement or for provisional relief to prevent irreparable harm, and to the non-exclusive jurisdiction of the New York Court for the enforcement of any award issued thereunder. Each of the Parties further agrees that service of any process, summons, notice or document by United States registered mail to such Party’s respective address set forth in 7.4 shall be effective service of process for any action, suit or proceeding in the New York Courts with respect to any matters to which it has submitted to jurisdiction in this 7.15. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the New York Court, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

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7.16 Specific Performance . The Parties agree that irreparable damage would occur in the event that the provisions of this Agreement were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to (i) an injunction or injunctions to enforce specifically the terms and provisions hereof in any arbitration in accordance with Article VIII of the Separation Agreement, (ii) provisional or temporary injunctive relief in accordance therewith in the New York Court, and (iii) enforcement of any such award of an arbitral tribunal or the New York Court in any court of the United States, or any other any court or tribunal sitting in any state of the United States or in any foreign country that has jurisdiction, this being in addition to any other remedy or relief to which they may be entitled.

7.17 Dispute Resolution . The resolution of any dispute between the Parties with respect to this Agreement shall be governed by the provisions of the Separation Agreement with respect to the resolution of disputes, including, without limitation, the provisions of Article VIII of the Separation Agreement.

7.18 Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, and the Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

7.19 Construction . The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

7.20 Authorization . Each of the Parties hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of each such Party enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to be duly executed as of the day and year first above written.


AMERICAN STANDARD COMPANIES INC.

By		/s/ G. P ETER D’A LOIA
Name:		G. Peter D’Aloia
Title:		Senior Vice President and Chief Financial Officer

WABCO HOLDINGS INC.

By		/s/ U LRICH M ICHEL
Name:		Ulrich Michel
Title:		Chief Financial Officer

ANNEX I

CHANGE IN CONTROL PROVISIONS APPLICABLE TO ADJUSTED EQUITY AWARDS FOLLOWING DISTRIBUTION


	WABCO change in control	ASD change in control
WABCO Options and Restricted Stock Units held by WABCO employees	WABCO Options and WABCO RSUs accelerate if not assumed/replaced WABCO Options and WABCO RSUs also accelerate upon qualifying termination from WABCO following change in control	WABCO Options and WABCO RSUs will continue in effect following ASD change in control, which will not affect WABCO awards Subsequent termination of employment of WABCO employee will not accelerate vesting of WABCO Options and WABCO RSUs awards

ASD Options and Restricted Stock Units held by WABCO employees	ASD Options and ASD RSUs will continue in effect following WABCO change in control, which will not affect ASD awards ASD Options and ASD RSUs will accelerate upon qualifying termination from WABCO following change in control	ASD Options and ASD RSUs accelerate if not assumed/replaced Subsequent termination of employment of WABCO employee will not accelerate vesting of ASD Options and ASD RSUs

WABCO Options and Restricted Stock Units held by ASD employees	WABCO Options and WABCO RSUs accelerate if not assumed/replaced Subsequent termination of employment will not accelerate vesting of WABCO Options and WABCO RSUs	WABCO Options and WABCO RSUs will continue in effect following ASD change in control, which will not affect WABCO awards WABCO Options and WABCO RSUs will accelerate upon qualifying termination from ASD following change in control

ASD Options and Restricted Stock Units held by ASD employees	ASD Options and ASD RSUs will continue in effect following WABCO change in control, which will not affect ASD awards Subsequent termination of employment of ASD employee will not accelerate vesting of ASD Options and ASD RSUs	ASD Options and ASD RSUs accelerate if not assumed/replaced ASD Options and ASD RSUs also accelerate upon qualifying termination from ASD following change in control

*	The applicable change in control definitions will be (i) in the case of ASD, the change in control definition set forth in the applicable ASD Equity-Based Plan and (ii) in the case of WABCO, the definition set forth in the WABCO Long-Term Incentive Plan.

Exhibit 10.4

INDEMNIFICATION AND COOPERATION AGREEMENT

This INDEMNIFICATION AND COOPERATION AGREEMENT (this “ Agreement ”) is made and entered into as of July 16, 2007 by and among American Standard Companies Inc. (“ ASD ”), Ideal Standard, France SAS (“ IS France ”), Ideal Standard GmbH & Co. OHG (“ IS Belgium ”), WABCO Austria GesmbH (“ WABCO Austria ”), Ideal Standard GmbH (Germany) (“ IS Germany ”), Ideal Standard Italia s.r.l. (Italy) (“ IS Italy ”), Ideal Standard Nederland BV (“ Venlo ”), WABCO Holdings Inc. (“ WABCO ”) and American Standard Europe BVBA ( “ ASE ” or the “ Indemnitor ”). Each of the foregoing parties is individually referred to herein as a “ Party ” and collectively as the “ Parties .” Certain capitalized terms used herein are defined in Section 1.1. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Distribution Agreement (defined below).

RECITALS

WHEREAS, the Board of Directors of ASD has determined that it is appropriate, desirable and in the best interests of ASD and its shareholders to separate ASD into three separate companies: (i) one comprising the VCS Business, which shall be owned and conducted, directly or indirectly, by WABCO, all of the common stock of which is intended to be distributed to ASD shareholders, (ii) one comprising the HVAC Business, which shall continue to be owned and conducted, directly or indirectly, by ASD and (iii) one comprising the B&K Business, which ASD currently intends to sell to one or more third parties;

WHEREAS, as part of the foregoing, ASD and WABCO have entered into the Separation and Distribution Agreement, dated as of July 16, 2007 (the “ Distribution Agreement ”), which provides, among other things, for the pro-rata distribution by ASD of all of its shares in WABCO Common Stock to the holders of ASD Common Stock, and the execution and delivery of certain other agreements in order to facilitate and provide for the foregoing, including without limitation, the Tax Sharing Agreement, the Employee Matters Agreement, the Transition Services Agreement and this Agreement;

WHEREAS, on March 28, 2007, the Charged Parties, along with a number of other companies not affiliated with ASD or WABCO, received a Statement of Objections from the European Commission (the “ Statement of Objections ”) alleging infringements of European Union competition rules by certain bathroom fixture and fittings companies, including the Charged Parties;

WHEREAS, the Parties acknowledge and agree that the Indemnifiable Matters relate to the B&K Business that is conducted by a division of ASD which is intended to be sold and, upon completion of such sale, will no longer be owned by ASD, WABCO or any of their Affiliates;

WHEREAS, given the standard practice of the European Commission, it is anticipated that each Charged Party will be held jointly and severally liable for any fines or other

judgments that may be rendered against or imposed on any of the other Charged Parties in connection with the Bathroom Fittings and Fixtures Proceedings;

WHEREAS, the alleged wrongdoings, as outlined in the Statement of Objections, are alleged to have occurred between May 5, 1988 and November 9, 2004, and while it is expected that a fine will be imposed in the Bathroom Fixtures and Fittings Proceedings, the exposure relating thereto is a contingent liability the amount of which is uncertain as of the date hereof;

WHEREAS, this Agreement constitutes an integral part of the overall allocation of Assets and Liabilities in the Separation (including the determination by ASD not to transfer any Indebtedness to WABCO or ASE (other than Indebtedness incurred by WABCO in connection with the Distribution) and to indemnify WABCO and its Affiliates, including ASE, against the Remainco Liabilities (which include, among other things, significant asbestos liabilities which are attributable, in part, to historical operations of the WABCO Group)) and the determination by ASD to proceed with the Separation on the basis of this overall allocation;

WHEREAS, the Parties acknowledge that WABCO or ASE will receive substantial benefits from the Separation and the transactions contemplated by the Distribution Agreement and Ancillary Agreements, and in consideration thereof, WABCO and ASE have agreed to enter this Agreement to provide for the indemnification, cooperation and other obligations specified herein including the obligation of ASE to be responsible for the indemnification obligations specified herein;

WHEREAS, the Parties desire to set forth the agreements, understandings and procedures pursuant to which ASE shall indemnify, defend and hold harmless the Indemnitees against the Indemnifiable Losses relating to the Indemnifiable Matters;

WHEREAS, the Parties have also concluded that it is in their common interests with respect to the Indemnifiable Matters to cooperate with one another and to provide access to documents, information, and analyses, with respect to the Indemnifiable Matters; and

WHEREAS, the Parties recognize and acknowledge that any unauthorized disclosure or dissemination of any documents or information exchanged between the Parties would be detrimental to them and to the conduct of any potential claims.

NOW, THEREFORE, in consideration of the recitals and of the respective agreements and covenants contained herein, and intending to be legally bound hereby, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Certain Definitions . For purposes of this Agreement, the following terms shall have the meanings specified:

(a) “ Accepted and Confirmed Bank Guarantee ” shall have the meaning specified in Section 4.1(b)(ii).

(b) “ Appeal Deadline Date ” means the date specified in the Initial Decision or as required under applicable Laws of the European Union in respect of the Bathroom Fittings and Fixtures Proceedings pursuant to which the Charged Parties are required to submit an appeal to the Initial Decision rendered against such Charged Party.

(d) “ ASD Charged Parties ” means ASD and any other member of the ASD Group (other than any WABCO Charged Party or B&K Charged Party) that is or becomes a named party in the Bathroom Fittings and Fixtures Proceedings from and after the Effective Time.

(e) “ ASD Election Notice ” shall have the meaning specified in Section 2.2(c).

(f) “ ASD Non-Appeal Notice ” shall have the meaning specified in Section 2.2(c).

(g) “ ASE ” shall have the meaning specified in the Preamble to this Agreement.

(h) “ ASE Election Notice ” shall have the meaning specified in Section 2.2(c).

(i) “ ASE Non-Appeal Notice ” shall have the meaning specified in Section 2.2(c).

(j) “ Bathroom Fittings and Fixtures Proceedings ” means the proceedings initiated by the Commission of the European Communities contemplated by that certain Statement of Objections, dated March 26, 2007, relating to case COMP/E-1/39.092, as the same may be amended, supplemented or superseded by a new Statement of Objections, including any appeals relating thereto.

(k) “ B&K Buyer Parties ” means those Persons that acquire all or any portion of the B&K Business pursuant to a B&K Sale.

(l) “ B&K Charged Parties ” means, collectively, Venlo, IS France, IS Belgium, IS Germany and IS Italy and any member of the ASD Group that is sold to a B&K Buyer Party and is or becomes a named party in the Bathroom Fittings and Fixtures Proceedings from and after the Effective Time.

(m) “ B&K Sale Agreement ” shall have the meaning specified in Section 4.5.

(n) “ Change in Control ” means, and shall be deemed to have occurred if, on or after the Effective Time, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of WABCO or any of its Subsidiaries acting in such capacity, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of WABCO or ASE, as applicable, representing more than 35% of the total voting power represented by WABCO’s or ASE’s, as applicable, then outstanding Voting Securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the board of directors of WABCO or ASE, as applicable, and any new director whose election by the board of directors of WABCO or ASE, as applicable, or nomination for election by WABCO’s or ASE’s, stockholders as applicable, was approved by a vote of at least two thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the stockholders of WABCO or ASE, as applicable, approve a merger or consolidation of WABCO or ASE, as applicable, with any other corporation other than a merger or consolidation that would result in the Voting Securities of WABCO or ASE, as applicable, outstanding

immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 65% of the total voting power represented by the Voting Securities of WABCO or ASE, as applicable, or such surviving entity outstanding immediately after such merger or consolidation, (iv) the stockholders of WABCO or ASE, as applicable, approve a plan of complete liquidation of WABCO or ASE, as applicable, or an agreement for the sale or disposition by WABCO or ASE, as applicable, of (in one transaction or a series of related transactions) all or substantially all of their respective assets, or (v) WABCO or ASE, as applicable, shall file or have filed against it, and such filing shall not be dismissed, any bankruptcy, insolvency or dissolution proceedings, or a trustee, administrator or creditors committee shall be appointed to manage or supervise the affairs of WABCO or ASE, as applicable,

(o) “ Charged Party ” means any ASD Charged Party, B&K Charged Party or WABCO Charged Party.

(p) “ Common Interest Materials ” shall have the meaning specified in Section 3.4(b).

(q) “ Defense Agreement ” shall have the meaning specified in Section 3.3.

(r) “ Defense Costs ” shall mean fees, costs and expenses incurred on or after the Effective Time by a Party in connection with the defense of any Indemnifiable Matter, including, without limitation, legal, consultant, expert, economists, witness, accounting and other professional fees and expenses, but excluding, for the avoidance of doubt, the payment of any amounts to Governmental Entities in connection with any such Indemnifiable Matter.

(s) “ Dispute ” shall have the meaning specified in Section 5.1.

(t) “ Distribution Agreement ” shall have the meaning specified in the Recitals to this Agreement.

(u) “ Escrow Account ” shall have the meaning specified in Section 4.1(b).

(v) “ Escrow Agreement ” shall have the meaning specified in Section 4.1(b).

(w) “ Escrowed Amount ” shall have the meaning specified in Section 4.1(b).

(x) “ Indemnifiable Loss ” and “ Indemnifiable Losses ” shall mean any and all fines, penalties, judgments, obligations, interest and amounts paid in settlement, in each case arising solely out of the Indemnifiable Matters and that are imposed on any Indemnitee (whether directly or indirectly, through contract, operation of law or otherwise, or through theories of successor or transferee liability, de facto merger or similar indirect theory of liability), including, without limitation, the Initial Decision Amount (as may be modified pursuant to any appeal judgment(s)) and the amount of any interest that will accrue on the Initial Decision Amount and will be due and owing to the European Commission between the Payment Due Date and the date on which the fine and any accrued interest thereon have been paid in full following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by the Charged Parties in connection with the Bathroom Fittings and Fixtures Proceedings), in each case determined in accordance with the Initial Decision and the applicable rules in force in the European Union.

(y) “ Indemnifiable Matters ” shall mean (i) the Bathroom Fittings and Fixtures Proceedings, and (ii) following a B&K Sale, any indemnification claims that may be brought against any member of the ASD Group (and their respective Affiliates and their respective directors, officers, employees and agents, in each case, together with their respective heirs, executors, administrators, successors and assigns) by any B&K Buyer Party or any of their respective Affiliates (including any B&K Charged Party) or their Representatives solely in connection with the Bathroom Fittings and Fixtures Proceedings. For the avoidance of doubt, third party Actions that have arisen or may arise prior to or after the Effective Time that relate to or arise out of the subject matter of the Bathroom Fittings and Fixtures Proceedings (including, without limitation, shareholder lawsuits but excluding the Bathroom Fittings and Fixtures Proceedings themselves and excluding any indemnification claims brought by a B&K Buyer Party or any of their respective Affiliates (including any B&K Charged Party) or Representatives), are not Indemnifiable Matters under this Agreement. The Distribution Agreement (rather than this Agreement) addresses, allocates responsibility and indemnification obligations for, and shall exclusively control, with respect to such third party Actions.

(z) “ Indemnitees ” shall mean the ASD Charged Parties and the B&K Charged Parties and their respective Affiliates (other than any member of the WABCO Group or a WABCO Charged Party) and their respective directors, officers, employees and agents, in each case, together with their respective heirs, executors, administrators, successors and assigns, and, if applicable, the B&K Buyer Parties and other assignees following any assignment by ASD in accordance with Section 6.3 hereof.

(aa) “ Indemnitee Representative ” shall have the meaning specified in Section 6.17.

(bb) “ Indemnitor ” shall have the meaning set forth in the Preamble to this Agreement.

(cc) “ Indemnitor Representative ” shall have the meaning specified in Section 6.16.

(dd) “ Initial Decision ” shall mean the initial decision rendered by the European Commission in the Bathroom Fittings and Fixtures Proceedings in which the Initial Decision Amount is imposed.

(ee) “ Initial Decision Amount ” shall mean the aggregate amount of the fines (or other amounts, if any) imposed by the European Commission on all Charged Parties on the Initial Decision Date as reflected in the Initial Decision.

(ff) “ Initial Decision Date ” shall mean the first date upon which the European Commission imposes a fine on any Charged Party and/or any of the other Indemnitees or Indemnitors or any other member of the ASD Group or WABCO Group in the Bathroom Fittings and Fixtures Proceedings.

(gg) “ IS Belgium ” shall have the meaning specified in the Preamble to this Agreement.

(hh) “ IS France ” shall have the meaning specified in the Preamble to this Agreement.

(ii) “ IS Germany ” shall have the meaning specified in the Preamble to this Agreement.

(jj) “ IS Italy ” shall have the meaning specified in the Preamble to this Agreement.

(kk) “ New York Courts ” shall have the meaning specified in Section 6.6.

(ll) “ Non-Appeal Notice ” shall mean either an ASE Non-Appeal Notice or an ASD Non-Appeal Notice, as applicable.

(mm) “ Party ” shall have the meaning specified in the Preamble to this Agreement.

(nn) “ Payment Due Date ” means the date specified in the Initial Decision or as required under the rules in force in the European Union in respect of the Bathroom Fittings and Fixtures Proceedings pursuant to which the Charged Parties are required to make payment of the Initial Decision Amount.

(oo) “ Privilege ” shall have the meaning specified in Section 3.3(a).

(pp) “ Privileged Information ” shall have the meaning specified in Section 3.3(a).

(qq) “ Release Date ” shall have the meaning specified in Section 4.2.

(rr) “ Representative ” shall mean any Affiliates, directors, officers, members, partners, employees, accountants, agents, counsel and other professional advisors of any of the Parties to this Agreement.

(ss) “ Statement of Objections ” shall have the meaning specified in the Recitals to this Agreement.

(tt) “ Venlo ” shall have the meaning specified in the Preamble to this Agreement.

(uu) “ Voting Securities ” means any securities of WABCO or ASE, as applicable, that vote generally in the election of directors of WABCO or ASE, respectively.

(vv) “ WABCO ” shall have the meaning specified in the Preamble to this Agreement.

(ww) “ WABCO Austria ” shall have the meaning specified in the Preamble to this Agreement.

(xx) “ WABCO Charged Parties ” means ASE, WABCO Austria and any other member of the WABCO Group that is or becomes a named party in the Bathroom Fittings and Fixtures Proceedings from and after the Effective Time.

ARTICLE II

INDEMNIFICATION

Section 2.1 Indemnification; Release .

(a) The Indemnitor shall indemnify and hold harmless the Indemnitees from and against, and shall reimburse the Indemnitees with respect to, any and all Indemnifiable Losses, whether arising prior to or following the Effective Time and whether or not arising out of any acts or omissions by any Indemnitee occurring prior to or following the Effective Time. For the avoidance of doubt, Indemnifiable Losses shall not include Defense Costs.

(b) WABCO and the WABCO Charged Parties hereby remise, release and forever discharge the Indemnitees from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract, by operation of law or otherwise (or any theories of successor or transferee liability or de facto merger or similar indirect theory of liability), including for fraud or willful misconduct, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the date of this Agreement, in each case relating to any of the Indemnifiable Matters. WABCO and the WABCO Charged Parties hereby unconditionally and irrevocably agree, on behalf of themselves and any of their Affiliates, that they shall not initiate, pursue or cause or be initiated or pursued, directly or indirectly, any judicial proceeding or Action seeking a judgment, holding or declaration that this Agreement or any of the indemnification or release obligations of WABCO and the WABCO Charged Parties provided hereunder is, was or would be illegal, invalid or unenforceable in accordance with its terms, and WABCO and the WABCO Charged Parties unconditionally and irrevocably agree that they shall not raise or assert any defense to this effect in any such proceeding or Action. WABCO and the WABCO Charged Parties acknowledge that they will receive substantial direct and indirect benefits from the transactions contemplated by the Distribution Agreement and the Ancillary Agreements (including, without limitation, the assumption by ASD of the Remainco Liabilities) and that the waiver, release and agreements set forth in this Section 2.1(b) are knowingly made in contemplation of such benefits and after the advice of counsel.

Section 2.2 Bathroom Fittings and Fixtures Proceedings .

(a) ASE shall have the right and the duty to control the defense of the Bathroom Fittings and Fixtures Proceedings (on behalf of itself, the other WABCO Charged Parties and the B&K Charged Parties); provided, however, from and after the time a B&K Sale is consummated, upon the prior written consent of ASD, the B&K Buyer Parties (on behalf of themselves and the B&K Charged Parties) shall have the right to observe and participate in the defense of the Bathroom Fittings and Fixtures Proceedings, the specific scope of such observation and participation to be determined by mutual agreement of ASD and ASE in good faith, it being understood that, without ASE’s prior written consent, such observation and participation shall in no event constitute active control in the defense, including, without limitation, affirmative rights to determine whether to appeal the Initial Decision or take other actions contemplated by this Section 2.2 (on behalf of the WABCO Charged Parties or B&K Charged Parties). ASD shall have the right and the duty to control the defense of the Bathroom Fittings and Fixtures Proceedings on behalf of itself and the ASD Charged Parties.

(b) ASD shall be entitled to select and engage counsel on behalf of itself and the ASD Charged Parties in respect of their defense and involvement in the Bathroom Fittings and Fixtures Proceedings. The Indemnitor Representative shall be entitled to select counsel on behalf of the WABCO Charged Parties and B&K Charged Parties in respect of their involvement and defense in the Bathroom Fittings and Fixtures Proceedings; it being acknowledged that the Indemnitor Representative shall provide prior notice to ASD and the B&K Charged Parties of the selection of any such counsel other than counsel retained by the WABCO Charged Parties and B&K Charged Parties at the Effective Time and it is further acknowledged that to the extent the Indemnitor Representative (on behalf of the WABCO Charged Parties and B&K Charged Parties) choose not to retain either Baker & McKenzie or McDermott Will & Emery, ASD shall be entitled to retain either such law firm and WABCO and ASE shall not object (and shall provide a waiver of privilege to the extent requested to do so by ASD) in any way to ASD retaining such counsel on its own behalf in connection with any matter, including the Bathroom Fittings and Fixtures Proceedings. From and after the time a B&K Sale is consummated, upon the prior written consent of ASD, the B&K Buyer Parties (on behalf of themselves and the B&K Charged Parties) shall be entitled to select counsel on behalf of the B&K Charged Parties in respect of their observation of and participation in the Bathroom Fittings and Fixtures Proceedings to the limited extent contemplated by Section 2.2(a); it being understood that the Defense Costs associated with such counsel shall be the responsibility of the B&K Charged Parties as further provided in Section 2.2(e) hereof.

(c) Once an Initial Decision is rendered in the Bathroom Fittings and Fixtures Proceedings, and to the extent that the Charged Parties have standing under applicable Law to appeal the Initial Decision, (i) ASD (on behalf of the ASD Charged Parties) shall have the right, in its sole discretion and without the consent of any other Party, to appeal the Initial Decision with respect to the decision rendered against any ASD Charged Party, (ii) ASE (on behalf of the WABCO Charged Parties and the B&K Charged Parties) shall have the right, in its sole discretion and without the consent of any other Party, to appeal the Initial Decision with respect to the decision rendered against any WABCO Charged Party or any B&K Charged Party, (iii) the WABCO Charged Parties and the B&K Charged Parties may not decide to forego an appeal to the Initial Decision with respect to the decision rendered against any WABCO Charged Party or any B&K Charged Party if the failure to appeal the Initial Decision would, in any way (as determined in good faith by ASD) prejudice ASD’s appeal of the Initial Decision with respect to the decision rendered against any ASD Charged Party; it being understood that if the Indemnitor Representative provides written notice to ASD no later than twenty Business Days prior to the Appeal Deadline Date that it does not wish to appeal the Initial Decision with respect to the decision rendered against any WABCO Charged Party or any B&K Charged Party (an “ ASE Non-Appeal Notice ”), ASD shall have the right, if it has determined in good faith that such non-appeal would, in any way prejudice ASD’s appeal of the Initial Decision with respect to the decision rendered against any ASD Charged Party, to cause the WABCO Charged Parties and the B&K Charged Parties to appeal the Initial Decision with respect to the decision rendered against the WABCO Charged Parties and the B&K Charged Parties by delivering a written notice within ten Business Days after its receipt of the ASE Non-Appeal Notice to the Indemnitor Representative and the B&K Charged Parties of its election to exercise such right (the “ ASD Election Notice ”), and upon delivery of the ASD Election Notice the provisions of Section 4.7 shall become applicable, (iv) ASD (on behalf of the ASD Charged Parties) may not decide to forego an

appeal to the Initial Decision with respect to the decision rendered against any ASD Charged Party if the failure to appeal the Initial Decision would, in any way (as determined in good faith by ASE) prejudice ASE’s appeal of the Initial Decision (on behalf of the WABCO Charged Parties and B&K Charged Parties) with respect to the decision rendered against any WABCO Charged Party or B&K Charged Party; it being understood that if ASD provides written notice to the Indemnitor Representative no later than twenty Business Days prior to the Appeal Deadline Date that it does not wish to appeal the Initial Decision with respect to the decision rendered against any ASD Charged Party (an “ ASD Non-Appeal Notice ”), the Indemnitor Representative shall have the right, if it has determined in good faith that such non-appeal would, in any way prejudice ASE’s appeal of the Initial Decision with respect to the decision rendered against any WABCO Charged Party or B&K Charged Party, to cause the ASD Charged Parties to appeal the Initial Decision with respect to the decision rendered against the ASD Charged Parties by delivering a written notice within ten Business Days after its receipt of the ASD Non-Appeal Notice to ASD of its election to exercise such right (the “ ASE Election Notice ”), and upon delivery of the ASE Election Notice the provisions of Section 4.8 shall become applicable and (v) except in connection with an appeal initiated by ASE (or ASD, in the case of an ASD Election Notice), as applicable, on behalf of the B&K Charged Parties, the B&K Charged Parties shall not have the right to otherwise appeal the Initial Decision with respect to the decision rendered against any B&K Charged Party, unless the B&K Charged Parties agree to indemnify the ASD Charged Parties and the WABCO Charged Parties for any fines imposed on the B&K Charged Parties in the Bathroom Fittings and Fixtures Proceedings with such indemnification to be provided pursuant to an agreement that is mutually acceptable to ASD and ASE. Upon prior written notice delivered by ASE (or ASD, in the case of an ASD Election Notice), as applicable, the B&K Charged Parties agree to be a party to any appeal of the Initial Decision initiated by ASE (or ASD, in the case of an ASD Election Notice), as applicable, on behalf of the WABCO Charged Parties and B&K Charged Parties.

(d) Each of ASD (on behalf of the ASD Charged Parties) and ASE (on behalf of the WABCO Charged Parties and B&K Charged Parties) will give the other Party prompt notice of any intent to appeal the Initial Decision with respect to the decision rendered against such Charged Parties; provided, that any Non-Appeal Notice must be delivered in accordance with Section 2.2(c). Any written submissions and responses, or the provision of any information or documents to Governmental Entities, in each case, with respect to the Bathroom Fittings and Fixtures Proceedings, including the contents of any submissions in the appeals process, if applicable, shall be prepared by ASD (with respect to any such matters submitted on behalf of any ASD Charged Party) and ASE (with respect to any such matters submitted on behalf of any WABCO Charged Party or any B&K Charged Party); provided, that if ASD delivers an ASD Election Notice, the contents of any such submissions on behalf of any WABCO Charged Party or any B&K Charged Party shall be prepared at the direction of ASD (which may include preparation by counsel to the WABCO Charged Parties and B&K Charged Parties existing as of the Effective Time or at the time of any such submission) and with consultation with the Indemnitor Representative; provided, further, however, if ASE delivers an ASE Election Notice, the contents of any such submissions on behalf of any ASD Charged Party shall be prepared at the direction of ASE (which may include preparation by counsel to the ASD Charged Parties existing as of the Effective Time or at the

time of any such submission) and with consultation with ASD. The Parties shall, and shall cause their Affiliates to, promptly inform the other of any communication from any Governmental Entity relating to the Bathroom Fixtures and Fittings Proceedings and shall promptly furnish the other with copies of any such written notices or other communications. In the event that any Party or its Affiliates receives a request for information or other documentary material from any such Governmental Entity relating to the Bathroom Fixtures and Fittings Proceedings, ASD or ASE, as the case may be, shall endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other Party, an appropriate response in compliance with such request and to provide the other Parties (and their counsel), upon request, advance drafts of all filings or submissions in connection therewith. ASD or ASE, as applicable, shall provide the other with a reasonable opportunity in light of the circumstances to review and comment on such filings or submissions (including any memorandum of law, pleadings and briefs) and shall consider in good faith modifications or comments to such filings or submissions that are requested by the other. ASD and ASE shall each offer the other the opportunity to jointly participate in any scheduled hearings or other meetings with Governmental Entities with respect to the Bathroom Fittings and Fixtures Proceedings, except in the unusual circumstance where it is impractical (given the timing and circumstances) to do so, provided that in such case, the Party participating in such informal meeting or discussions shall promptly provide notice to the other Parties of the content and substance of any such meetings or discussions. For the avoidance of doubt, the Parties acknowledge that the information and documents referred to in this Section 2.2(d) shall be subject to Sections 3.3, 3.4 and 4.6 of this Agreement.

(e) In connection with the Bathroom Fittings and Fixtures Proceedings, (i) ASD shall be responsible for the Defense Costs of the ASD Charged Parties incurred prior to the delivery of an ASE Election Notice, if any, or if no ASE Election Notice is delivered, at all times from and after the Effective Time, and (ii) ASE shall be responsible for the Defense Costs of the WABCO Charged Parties and the B&K Charged Parties incurred prior to the delivery of an ASD Election Notice, if any, or if no ASD Election Notice is delivered, at all times from and after the Effective Time; provided, however, if the B&K Charged Parties engage counsel on their own behalf to the limited extent permitted by Section 2.2(a), the B&K Buyer Parties and/or B&K Charged Parties, as applicable, shall be responsible for the Defense Costs associated with the B&K Charged Parties’ limited involvement in the Bathroom Fittings and Fixtures Proceedings. If and only if ASD delivers an ASD Election Notice in accordance with Section 2.2(c), then from and after the delivery of such ASD Election Notice, ASD shall be responsible for the Defense Costs of the WABCO Charged Parties and the B&K Charged Parties incurred at the direction of ASD. If and only if ASE delivers an ASE Election Notice in accordance with Section 2.2(c), then from and after the delivery of such ASE Election Notice, ASE shall be responsible for the Defense Costs of the ASD Charged Parties incurred at the direction of ASE.

(f) Notwithstanding anything to the contrary contained in this Agreement, the rights and obligations of the Parties with respect to the settlement of the Bathroom Fixtures and Fittings Proceedings shall be governed exclusively by this Section 2.2(f). No Charged Party may consent to the entry of any judgment or enter into any settlement with respect to the Bathroom Fittings and Fixtures Proceedings, whether prior to the Initial Decision Date or at any time thereafter without the consent of ASD and ASE;

provided, that, ASE may enter into any settlement with respect to the Bathroom Fittings and Fixtures Proceedings if (x) the settlement relates solely to the liability of the WABCO Charged Parties and B&K Charged Parties and (y) ASD has determined in good faith that such settlement would not in any way prejudice (i) ASD’s defense of any outstanding charges in the Bathroom Fixtures and Fittings Proceedings against any ASD Charged Party or (ii) any ASD Charged Party’s right to indemnification under this Agreement. ASE shall notify ASD in writing of any settlement into which ASE proposes to enter, and within seven (7) calendar days of its receipt of such notice ASD shall notify ASE of its determination as to whether the conditions in clauses in (y)(i) and (y)(ii) of the preceding sentence have been met.

(g) Following the consummation of a B&K Sale, if ASD shall receive notice or otherwise learn of the assertion of any indemnification claim that may be brought against ASD or any of its Affiliates or their respective Representatives by the B&K Buyer Parties or any of their Affiliates (including, following a B&K Sale, any B&K Charged Party) or their Representatives that relate to the Bathroom Fittings and Fixtures Proceedings and as to which ASD is or may be entitled to indemnification pursuant to this Agreement, ASD shall notify the Indemnitor Representative in writing, and in reasonable detail, of such claim promptly (and in any event within five (5) Business Days) after receipt by ASD of written notice of, or upon becoming aware of, such claim; provided , however , that the failure to provide notice of any such claim pursuant to this sentence shall not release the Indemnitor from any of its obligations hereunder except and solely to the extent the Indemnitor shall have been materially prejudiced as a result of such failure. Thereafter, ASD shall deliver to the Indemnitor Representative, promptly (and in any event within five (5) Business Days) after ASD’s receipt thereof, copies of all notices and documents received by ASD relating to such claim.

ARTICLE III

COOPERATION AND OTHER MATTERS

Section 3.1 Cooperation . Each Party to this Agreement, through and with the involvement of its respective counsel to the extent contemplated by Section 2.2(a), shall in good faith cooperate, engage in communications and share and exchange documents, information, and analyses in connection with, and in order to respond to, the Indemnifiable Matters. Such cooperation shall include, without limitation, (i) the provision to the other Parties to this Agreement of records and information which are necessary to the defense or appeal of such Indemnifiable Matters and which are reasonably requested by any other Party and making employees (and, to the extent reasonably feasible, former employees) available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, regardless of whether any conflict of interest exists between or among any Parties hereto with respect to any Indemnifiable Matter and (ii) consultation regarding the defense of the Indemnifiable Matters. For the avoidance of doubt, the Parties acknowledge that the information and documents referred to in this Section 3.1 shall be subject to Sections 3.3, 3.4 and 4.6 of this Agreement.

Section 3.2 Witness Services . Subject to Section 4.6, each of the Parties shall use their respective reasonable efforts to make available to the other Parties, upon reasonable written request, their and their Affiliates officers, directors, employees and agents as witnesses to the extent that such individuals may reasonably be required to testify or otherwise cooperate in connection with the defense of the Indemnifiable Matters (including any appeals relating thereto).

Section 3.3 Privileged Information .

(a) Each Party hereto agrees to maintain, preserve and assert all privileges, including privileges arising under or relating to the attorney-client relationship (which shall include the attorney-client and work product privileges), not heretofore waived, that relate, directly or indirectly, to the Indemnifiable Matters (each a “ Privilege ”). Each Party hereto acknowledges and agrees that any costs associated with asserting any Privilege shall be borne by the Party requesting that such Privilege be asserted. Each Party agrees that it shall not waive any Privilege that could be asserted under applicable Law without the prior written consent of ASD (in the case of a waiver by any member of the WABCO Group, or following a B&K Sale, any waiver by a B&K Charged Party) or ASE (in the case of a waiver by an ASD Charged Party or any waiver by a B&K Charged Party). The rights and obligations created by this Section 3.3 shall apply to all information relating to the Indemnifiable Matters as to which, but for the Distribution, either Party would have been entitled to assert or did assert the protection of a Privilege (“ Privileged Information ”), including (i) any and all information generated prior to the Effective Time but which, after the Effective Time, is in the possession of either Party and (ii) all information generated, received or arising after the Effective Time that refers to or relates to Privileged Information generated, received or arising prior to the Effective Time. In connection with the Bathroom Fittings and Fixtures Proceedings, the respective counsel of the Parties hereto shall enter into a customary and mutually agreeable joint defense agreement containing provisions consistent with this Article III (the “ Defense Agreement ”). If, at any time from and after the consummation of a B&K Sale, a B&K Charged Party elects to engage its own counsel in respect of the B&K Charged Parties involvement in the Bathroom Fittings and Fixtures Proceedings in accordance with Section 2.2(b) of this Agreement, such Charged Party shall ensure that its counsel shall execute a joinder to the Defense Agreement pursuant to which such counsel will agree to be bound by the rights and restrictions imposed on the other counsel party to the Defense Agreement as of the date hereof.

(b) Upon receipt by any Party of any subpoena, discovery or other request that may call for the production or disclosure of Privileged Information or if any Party obtains knowledge that any current or former employee of such Party has received any subpoena, discovery or other request that may call for the production or disclosure of Privileged Information of the other Parties, such Party shall notify promptly the other Parties of the existence of the request and shall provide the other Parties a reasonable opportunity to review the information and to assert any rights it may have under this Section 3.3 or otherwise to prevent the production or disclosure of Privileged Information. The Parties hereto agree that they will not produce or disclose any information or document over which they reasonably believe another Party has any claim of Privilege under this Section 3.3 unless (i) the Party who may claim a Privilege has provided its written consent to such production or disclosure (which consent shall not be unreasonably withheld) or (ii) a court of competent jurisdiction has issued a ruling that the information is not entitled to protection under any applicable Privilege.

(c) ASD’s (on behalf of the members of the ASD Group) transfer of books and records and other information to the members of the WABCO Group, and ASD’s agreement to permit WABCO and ASE to possess Privileged Information existing or generated prior to the Effective Time, are made in reliance on WABCO’s agreement, as set forth in Distribution Agreement, to maintain the confidentiality of Privileged Information and to assert and maintain all applicable

Privileges. The access to information being granted pursuant to this Agreement and the Distribution Agreement, the agreement to provide witnesses and individuals pursuant to Section 3.2 of this Agreement and the transfer of Privileged Information to WABCO and ASE pursuant to this Agreement and the Distribution Agreement shall not be deemed a waiver of any Privilege that has been or may be asserted under this Section 3.3 or otherwise. Nothing in this Agreement or the Distribution Agreement shall operate to reduce, minimize or condition the rights granted to ASD in, or the obligations imposed upon WABCO by, this Section 3.3.

Section 3.4 Common Interest . (a) The Parties hereto and their respective counsel believe that (i) there is a mutuality of interest with respect to the Indemnifiable Matters and (ii) communications between or among the Parties’ counsel and communications involving the Parties in the presence of such counsel regarding Indemnifiable Matters have been and will continue to be essential to the provision of legal advice regarding Indemnifiable Matters and the continued effective representation of the Parties in connection with Indemnifiable Matters. Accordingly, it is the intention and understanding of the each of the Parties, on behalf of itself and its respective counsel and other Representatives, that any communications among the Parties or their counsel regarding Indemnifiable Matters are confidential and protected from disclosure to any third party by the attorney-client, common interest and work-product privileges, whether or not so identified or marked. The protection from disclosure includes, but is not limited to, disclosure in litigation relating to Indemnifiable Matters. Notwithstanding anything to the contrary herein, nothing shall prevent the disclosure of the existence of this Agreement or the terms hereof.

(b) “ Common Interest Materials ” shall include, without limitation, all work and communications preparatory to the identification of and related to the defense of the Indemnifiable Matters. In order to accomplish the objectives of this Agreement, the Parties agree that the following shall be deemed to be Common Interest Materials and shall be covered by this Agreement: (i) all work product and communications relating to the Indemnifiable Matters or this Agreement, (ii) all communications and information relating to the Indemnifiable Matters or this Agreement made or given by, between, or among the Parties hereto or their respective counsel and disclosed by one Party or its counsel to any other Party or its counsel, (iii) memoranda of law and all analyses and materials related to Indemnifiable Matters, (iv) all agreements, contracts and other memoranda, including preparatory materials, drafts and all oral and written communications pertaining to Indemnifiable Matters, and (v) any documents or information that would otherwise be protected by any applicable privilege or work product protection from disclosure to third parties other than the Parties hereto. For the avoidance of doubt, Common Interest Materials shall not include this Agreement or any information relating the Indemnifiable Matters or to a Party which is or becomes publicly available other than through a breach of this Agreement by the disclosing Party.

(c) No Common Interest Materials received by a Party, or its counsel, from another Party, or its counsel, shall be disclosed to any third party without prior consent of the Party that has supplied the materials pursuant to this Agreement (which consent shall not be unreasonably withheld). Notwithstanding the foregoing and any other restriction or limitation contained herein, in the event of any dispute between or among the Parties, each Party may disclose Common Interest Material in or in connection with any proceeding resulting from such dispute to the extent reasonably necessary, but shall use its reasonable best efforts to obtain a

confidentiality stipulation with respect to the Common Interest Materials. In addition, if Common Interest Materials are required by applicable Law to be disclosed in connection with any Action or otherwise, or are requested to be disclosed to any Governmental Entity, any Party may disclose such materials (to the extent lawful to do so) if (i) before doing so it uses its reasonable best efforts in consultation with the relevant other Parties (or their counsel) to obtain a confidentiality stipulation with respect to such disclosure and (ii) if such efforts are not successful, it limits the scope of any disclosures to only that portion of the Common Interest Materials which it believes in good faith, after consultation with outside counsel, that it is required to furnish under applicable Law or in order to appropriately conduct such Action or the defense thereof, as the case may be.

(d) The Parties agree that if any attempt is made by any third party to secure or obtain Common Interest Materials, the other Parties shall be promptly notified and shall be given copies of any writings or documents, including subpoenas, summonses and the like, which relate to the attempt by the third party to obtain the information and such other Parties shall be given a reasonable opportunity to oppose the production of such requested Common Interest Material.

(e) The Parties agree that the Common Interest Materials created or produced by any other Party to this Agreement shall only be used in connection with the Indemnifiable Matters to which they relate. Except as otherwise expressly set forth herein, a Party may not use any Common Interest Material that are created or produced by any other Party in connection with any other matter or proceeding without the express prior written consent of the Party that created or produced such material. However, nothing in this Agreement shall prevent any Party from using Common Interest Materials that it created or produced in any other subsequent proceeding or matter. The Common Interest Materials shall remain the property of the producing Party and, following the conclusion of any Action, shall be returned to such Party upon twenty (20) days’ written notice.

(f) Each Party acknowledges that, as a result of this Agreement, legal counsel for each of the other Parties may have access to confidential information of such Party in the form of Common Interest Materials. Each Party hereby acknowledges and agrees that nothing in this Agreement and no sharing of information with such legal counsel pursuant to the terms of this Agreement shall be deemed to create an attorney-client relationship between any attorney and anyone other than the client of that attorney. Each Party hereby represents and agrees that it will not seek to disqualify counsel for any other Party from continuing to represent such other Party in any subsequent proceedings, whether or not that other Party’s interests become adverse to it, on the basis of access to information obtained hereunder.

(g) Each of the Parties hereto agrees, on behalf of itself and its respective counsel and other Representatives, that to the extent the Parties, their counsel and other Representatives of the Parties have already been in communication with one another about Indemnifiable Matters, their communications and work-product are subject to Section 3.4.

ARTICLE IV

COVENANTS

Section 4.1 Payment; Timing; Escrow .

(a) Payment . The Parties acknowledge and agree that the Indemnitors shall be responsible for and shall pay, on behalf of the Indemnitees, any and all Indemnifiable Losses imposed on any of the Indemnitees in connection with the Indemnifiable Matters and the Indemnitees shall in no event be required to make any such payment and then seek indemnification hereunder; provided, however, if ASD or any of the other Indemnitees makes any such payment for any reason whatsoever, nothing herein shall limit its rights to seek indemnification from the Indemnitors in accordance with Section 2.1 hereof, except to the extent provided in Section 4.7(c), if applicable.

(b) Escrow . Following the Initial Decision Date and at least thirty (30) calendar days prior to the Payment Due Date (the “ Funding Date ”), ASE shall deposit the Initial Decision Amount (the “Escrowed Amount”) by wire transfer in immediately available cash into an escrow account (the “ Escrow Account ”) with a third party banking institution which is mutually acceptable to ASD and WABCO to be governed by an escrow agreement entered into among WABCO, ASE, the other WABCO Charged Parties, ASD and the escrow agent (the “ Escrow Agreement ”) in substance and form reasonably acceptable to ASD and WABCO, which Escrow Agreement shall contain customary terms and conditions and shall reflect the agreed upon mechanics set forth in this Section 4.1. Following the deposit of the Escrowed Amount into the Escrow Account, seven Business Days prior to the Payment Due Date (or such earlier date as ASD and WABCO may mutually agree):

(i) if, in accordance with Section 2.2, neither ASE (on behalf of the WABCO Charged Parties or B&K Charged Parties) nor ASD (on behalf of the ASD Charged Parties) appeal the Initial Decision by the Appeal Deadline Date, the Escrowed Amount will be released (pursuant to a written instruction that ASD is required to deliver to the escrow agent in accordance with the Escrow Agreement) to the European Commission in the manner specified in the Initial Decision or otherwise provided by applicable Law; or

(ii) if, in accordance with Section 2.2, ASE (on behalf of the WABCO Charged Parties or B&K Charged Parties) or ASD (on behalf of the ASD Charged Parties) appeal the Initial Decision by the Appeal Deadline Date with respect to the decision rendered against any such Charged Party, the Escrowed Amount will be released seven Business Days prior to the Payment Due Date (pursuant to a written instruction that ASD is required to deliver to the escrow agent in accordance with the Escrow Agreement) to the European Commission in the manner specified in the Initial Decision or otherwise provided by applicable Law; provided, however, in lieu of the foregoing, if, at least nine Business Days prior to the Payment Due Date, ASE provides or causes to be provided (x) a bank guarantee that is accepted by the European Commission which guarantees the Initial Decision Amount and the amount of any interest that will accrue on the Initial Decision Amount and will be due and owing to the European Commission between the Payment Due Date and the date on which the fine

and any accrued interest thereon have been paid in full following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by the Charged Parties in connection with the Bathroom Fittings and Fixtures Proceedings), in each case determined in accordance with the Initial Decision and the applicable rules in force in the European Union (with copies of such bank guarantee being simultaneously provided to ASD and the escrow agent) and (y) such other evidence, to ASD’s reasonable satisfaction, that the European Commission has accepted the bank guarantee in the form and amount provided by ASE, the Escrowed Amount shall be released if ASD determines, in its good faith discretion, that clause (x) and (y) above have been satisfied (such guarantee being referred to herein as an “ Accepted and Confirmed Bank Guarantee ”), pursuant to a written instruction delivered by ASD to the escrow agent in accordance with the Escrow Agreement, by wire transfer of immediately available funds to an account designated by ASE. For the avoidance of doubt, from and after the time ASE provides or causes to be provided an Accepted an Confirmed Bank Guarantee in accordance with this Agreement (whether through an Early Payment or pursuant to this Section 4.1(b)(ii)), according to the standard practice of the European Commission, ASE shall have the right, with the consent of ASD, to replace such bank guarantee, in whole or in part, with a provisional payment in the manner specified by the Initial Decision or as otherwise agreed by the European Commission and ASD.

(c) Interest . Any interest that accrues on the Escrowed Amount between the date such funds are deposited into the Escrow Account and the date such funds are released from the Escrow Account pursuant to any of subclauses (i) or (ii) above shall be delivered to ASE, after deduction for any fees and expenses of the escrow agent and its reasonable expenses of outside advisors, at the time such Escrowed Amount is so released.

(d) Early Payment . Notwithstanding anything to the contrary contained in this Section 4.1, if (i) with the prior written consent of ASD, ASE (on behalf of the WABCO Charged Parties and the B&K Charged Parties) pays or causes to be paid the Initial Decision Amount in cash to the European Commission prior to the Funding Date or (ii) WABCO (on behalf of the WABCO Charged Parties and the B&K Charged Parties) provides or causes to be provided prior to the Funding Date an Accepted an Confirmed Bank Guarantee (each, an “ Early Payment ”), ASE shall no longer have any obligation to deposit any funds into the Escrow Account on the Funding Date or thereafter.

Section 4.2 Letter of Credit . From and after the date hereof until the date (the “ Release Date ”) the Indemnitor pays the Escrowed Amount in cash to the Escrow Account in accordance with Section 4.1 (or the date an Early Payment is made) if a Change of Control of WABCO or ASE, as applicable, should occur, then, upon the demand of ASD, ASE (or any such successor) shall be required to post a letter of credit or similar security obligation reasonably acceptable to ASD in respect of the Indemnifiable Losses under this Agreement in an amount equal to $880,000,000 USD (which amount shall be converted to EURO at the time such letter of credit or similar security obligation is required to be posted, based on the prevailing exchange rate at the close of business on the second Business Day immediately prior to such time such letter of credit or similar security obligation is required to be posted) or, if an Initial Decision has been rendered, such other amount as may be specified in the Initial Decision; provided, however, in

the event of a Change of Control of WABCO or ASE, as applicable, with ASD’s prior written consent (which may be withheld in its sole and absolute discretion) in lieu of ASE posting such letter of credit or similar security obligation, the Person acquiring WABCO or ASE, as applicable, may provide to ASD and the other Indemnitees a full, unconditional and irrevocable guarantee of the Indemnitor’s obligations hereunder. In the event of a Change of Control of WABCO or ASE, as applicable, such letter of credit, similar security obligation or guarantee, as applicable, shall be posted or delivered at or prior to the consummation of such Change of Control. For the avoidance of doubt, the posting of such a letter of credit, similar security obligation or guarantee, as applicable, shall in no event relieve the Indemnitors (or its successors) with respect to any Indemnifiable Losses under this Agreement, and shall not result in a cap on the Indemnitor’s (or any of its successors) Indemnifiable Losses with respect thereto. The letter of credit or similar security obligation shall provide that, without any further action on the part of the Indemnitor, funds thereunder shall be released to ASD (or, at the direction of ASD, to the applicable Indemnitee) upon such time as ASD provides a written instruction to the applicable bank or other issuer of such letter of credit, that any such Indemnitee is entitled to be reimbursed for Indemnifiable Losses under this Agreement. Upon such payment in full to the Indemnitees, the letter of credit shall be terminated.

Section 4.3 Public Announcements . No Party hereto shall issue any press release or make any similar public announcement or communication concerning any information relating to any Indemnifiable Matter, without the prior written consent of ASD (in the case of a public statement by any member of the WABCO Group or, following a B&K Sale, a statement by any B&K Charged Party) or WABCO (in the case of a public statement by any member of the ASD Group), in each case such consent not to be unreasonably withheld. Notwithstanding the foregoing, either ASD or WABCO may make or cause to be made any such press release or similar public announcement or communication as such Party may deem necessary or appropriate, including in order to comply with the requirements of any applicable Laws or the rules and regulations of each stock exchange upon which the securities of ASD or WABCO, as applicable, are listed; provided , that to the extent in the good faith judgment of ASD or WABCO it is reasonably practicable to do so, ASD or WABCO, as applicable, (x) will provide the other with a reasonable opportunity in light of the circumstances to review the intended communication and (y) consider in good faith modifications to the intended communication that are requested by the other. For the avoidance of doubt, the Parties acknowledge that, without the written consent of any Party, this Agreement may be filed as an exhibit to any periodic or current report filed by ASD or WABCO from and after the date hereof.

Section 4.4 Access to Information and Confidentiality . The Parties acknowledge that Sections 7.2 and 7.4 of the Distribution Agreement are hereby incorporated by reference but solely as they relate to the Indemnifiable Matters.

Section 4.5 B&K Buyer Parties Cooperation . ASD shall in good faith seek to include a provision in any definitive sale agreement relating to a B&K Sale (the “ B&K Sale Agreement ”) whereby WABCO would be a third party beneficiary of the obligations of the B&K Buyer Parties (i) to cooperate with WABCO and ASE in connection with the Bathroom Fittings and Fixtures Proceedings and (ii) to acknowledge that ASE will have authority and control over the investigation, prosecution, defense and appeal of the Bathroom Fittings and Fixtures Proceedings on behalf of the B&K Charged Parties. Notwithstanding the foregoing, the parties

acknowledge and agree that, as of the Effective Time, no agreement relating to a B&K Sale will have been finalized with any B&K Buyer Parties and that, as a result, neither ASD nor any B&K Charged Party can ensure that any of the provisions set forth in the first sentence hereof will be included in the B&K Sale Agreement. Therefore, WABCO and ASE acknowledge that ASD shall have no liability hereunder if any such definitive B&K Sale Agreement does not include such provisions for the benefit of WABCO and ASE.

Section 4.6 ASD Cooperation . Nothing in this Agreement shall be deemed to impose any obligation on ASD to cooperate with WABCO or any of the WABCO Charged Parties and/or any of the B&K Charged Parties (or B&K Buyer Parties) with respect to the production of any documentation or information not subject to Section 3.3. that would, in the good faith judgment of ASD, prejudice in any respect any substantive, procedural or jurisdictional defenses that ASD may assert with respect to the Bathroom Fittings and Fixtures Proceedings. This Section 4.6 shall also apply in respect of the cooperation referred to in Section 3.2. For the avoidance of doubt , this Section 4.6 shall not affect ASD’s obligation to cooperate to the extent that in the reasonable judgment of ASE, ASD’s cooperation is required to assist ASE with its substantive defense.

Section 4.7 ASD Election Notice . Notwithstanding anything to the contrary contained in this Agreement, in the event that ASE delivers an ASE Non-Appeal Notice and ASD responds by delivering an ASD Election Notice, in each case in accordance with Section 2.2, then:

(a) if the Escrowed Funds were released to the European Commission in accordance with Section 4.1(b)(ii) and the Initial Decision Amount is reduced on appeal following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by, or at the direction of, ASD in connection with the Bathroom Fittings and Fixtures Proceedings) then ASD shall have the right to, and the WABCO Charged Parties and B&K Charged Parties acknowledge that ASD shall be entitled to, the amount of such reduction, plus accrued interest on such reduction amount determined in accordance with the applicable rules in force in the European Union, which such amount shall be distributed to ASD when refunded by the European Commission;

(b) if, in lieu of the Escrowed Funds being released to the European Commission in accordance with Section 4.1(b)(ii), ASE provided, or caused to be provided, a bank guarantee to the European Commission covering the Initial Decision Amount plus interest as required pursuant to Section 4.1(b)(ii) and the Initial Decision Amount is reduced on appeal following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by, or at the direction of, ASD in connection with the Bathroom Fittings and Fixtures Proceedings) then the Indemnitor is hereby obligated to pay, or cause to be paid, to ASD a cash amount equal to the amount of such reduction; and the amount of the fine, as so reduced, plus accrued interest shall be paid by ASE (or its designees (including bank guarantor as may be provided in the relevant bank guarantee)) to the European Commission in accordance with applicable rules in force in the European Union; and

(c) if the Initial Decision Amount is increased on appeal following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by, or at the direction of, ASD in connection with the Bathroom Fittings and Fixtures Proceedings) then ASD hereby agrees to indemnify and hold harmless the WABCO Charged Parties and the B&K Charged Parties from and against, and shall reimburse and be responsible for the payment to the European

Commission of, any such increased amount; it being understood that ASD is only responsible for the amount by which the fine was increased over the Initial Decision Amount and the Indemnitor remains responsible for, and indemnify the Indemnitees in accordance with Section 2.2 with respect to, the payment of the Initial Decision Amount plus accrued interest.

Section 4.8 ASE Election Notice . Notwithstanding anything to the contrary contained in this Agreement, in the event that ASD delivers an ASD Non-Appeal Notice and ASE responds by delivering an ASE Election Notice, in each case in accordance with Section 2.2, then:

(a) if the Escrowed Funds were released to the European Commission in accordance with Section 4.1(b)(ii) and the Initial Decision Amount is reduced on appeal following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by, or at the direction of ASE in connection with the Bathroom Fittings and Fixtures Proceedings) then ASE shall have the right to, and the ASD Charged Parties and B&K Charged Parties acknowledge that ASE shall be entitled to, the amount of such reduction, plus accrued interest on such reduction amount determined in accordance with the applicable rules in force in the European Union, which such amount shall be distributed to ASE when refunded by the European Commission;

(b) if, in lieu of the Escrowed Funds being released to the European Commission in accordance with Section 4.1(b)(ii), ASE provided, or caused to be provided, a bank guarantee to the European Commission covering the Initial Decision Amount plus interest as required pursuant to Section 4.1(b)(ii) and the Initial Decision Amount is reduced on appeal following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by or at the direction of ASE in connection with the Bathroom Fittings and Fixtures Proceedings) then the Indemnitor shall have no obligation to pay, or cause to be paid, to ASD the amount of such reduction; and the amount of the fine, as so reduced, plus accrued interest shall be paid by ASE (or its designees (including bank guarantor as may be provided in the relevant bank guarantee)) to the European Commission in accordance with applicable rules in force in the European Union; and

(c) if the Initial Decision Amount is increased on appeal following the rendering of a final resolution of the Bathroom Fittings and Fixtures Proceedings (including the final judgment concluding the appeal process initiated by, or at the direction of ASE in connection with the Bathroom Fittings and Fixtures Proceedings) then the Indemnitor hereby agrees to indemnify and hold harmless the Indemnitees from and against, and shall reimburse and be responsible for the payment to the European Commission of, any such increased amount in addition to the Initial Decision Amount in accordance with Section 2.2 with respect to, the payment of the Initial Decision Amount plus accrued interest.

Section 4.9 Limitation on ASE Fundamental Changes . From and after the Effective Time until the earlier of (x) the Release Date or (y) the date a letter of credit or similar security obligation is posted in accordance with Section 4.2 in connection with a Change of Control of WABCO or ASE, as applicable, ASE agrees not to and WABCO agrees to cause ASE not to, directly or indirectly, sell, lease, transfer or otherwise dispose (in one transaction or series of related transactions), including any disposition by means of a merger, consolidation or similar transaction or any transfer to any Affiliate or other member of the WABCO Group, any shares of capital stock of a material Subsidiary, or a material amount of its assets, properties or divisions or other assets outside the ordinary course of business, in each case, other than to the extent ASD shall provide its prior written consent to such sale, disposition or other transfer.

ARTICLE V

DISPUTE RESOLUTION

Section 5.1 Negotiation . The Parties shall make a good faith attempt to resolve any dispute arising in connection with the Agreement (a “Dispute”) through negotiation. Within 10 days after notice of a Dispute is given by either ASD (on behalf of any Indemnitee) to ASE (on behalf of WABCO or any other WABCO Charged Party), or vice versa, ASD and the Indemnitor Representative shall select one or more representatives who are the general counsel or other senior executive officer of such disputing Party and such representatives shall meet and make a good faith attempt to resolve such Dispute and shall continue to negotiate in good faith in an effort to resolve such Dispute without the necessity of any formal proceedings.

Section 5.2 Arbitration . If such representatives fail to resolve the Dispute within the 10 day period, unless otherwise mutually agreed by ASD and ASE, ASD or ASE shall have the right to submit such Dispute to final and binding arbitration. It is the intent of the Parties that any such arbitration be structured in such a way as to result in a resolution of such Dispute as promptly as practicable in accordance herewith. The arbitration panel shall consist of 3 members, one selected by ASD, one selected by ASE and the third to be mutually agreed upon by ASD and ASE. The Party instituting the arbitration proceeding shall provide notice to the other Parties describing in reasonable detail the nature of the Dispute, the claims of the disputing Party and the requested relief. Within 15 days of receipt of a demand for arbitration, the other Party shall furnish the disputing Party with a written statement answering the claims, in reasonable detail, of the disputing Party. All Parties will provide all reasonable cooperation to the other Party and the arbitration panel in conducting the arbitration proceeding. The prevailing Party in any arbitration shall be entitled to expense reimbursement, including costs of attorneys’ and other professional fees, incurred in connection with the arbitration. In connection with any Dispute, the arbitration panel shall be obligated to apply solely principles of Law. Any arbitration shall be conducted pursuant to the Rules. The decision of the arbitration panel shall be final and non-appealable and may be enforced in any court of competent jurisdiction.

Section 5.3 Discovery . With respect to discovery in an arbitration proceeding, the arbitration panel must allow each Party to make discovery requests for documents of the other Parties where the information sought is reasonably calculated to lead to discovery of admissible evidence, and each Party agrees to respond to such discovery request within a reasonable time.

Section 5.4 Awards . The arbitration panel shall be instructed to use best efforts to complete all arbitration hearings within 2 weeks from the date of the arbitrator’s appointment and render a decision within 1 month from such date. The arbitration panel shall be entitled, if appropriate, to award any remedy in such proceedings that is permitted under this Agreement and applicable Law, including monetary damages, specific performance and other forms of legal and equitable relief. The Parties hereby waive any claim to exemplary, punitive, multiple or similar damages in excess of compensatory damages, attorneys’ fees, costs and expenses of arbitration, except as may be expressly required by statute or as necessary to indemnify a Party for a Third Party Claim and the arbitration panel is not empowered to and shall not award such damages. Any final award must provide that the Party against whom an award is issued shall comply with the order within a specified period of time, not to exceed 10 days.

Section 5.5 Pre-Hearing Procedure and Disposition . Nothing contained herein is intended to or shall be construed to prevent any Party, from applying to any court of competent jurisdiction for interim measures or other provisional relief in connection with the subject matter of any Dispute, including to compel a Party to arbitrate any Dispute or to require witnesses to obey subpoenas issued by the arbitrator(s). Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the Parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any Party to respect the arbitral tribunal’s orders to that effect. The Parties agree to accept and honor any orders relating to interim or provisional remedies that are issued by the arbitrator(s) and agree that any such interim order or remedy may be enforced, as necessary, in any court of competent jurisdiction.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Authorization; Enforceability . Each of the Parties hereto represents and warrants that: (i) the execution, delivery and performance of this Agreement and the transactions contemplated by this Agreement (1) are within the corporate or other legal authority of such Party, (2) have been duly authorized by all necessary corporate or other proceedings by such Party and (3) do not and will not conflict with or result in any breach or contravention of any applicable Law or any Contract or of the certificate of incorporation, bylaws, or any similar organizational documents of such Party; and (ii) the execution and delivery of this Agreement will result in a valid and legally binding obligation of such Party enforceable against it in accordance with the terms and provisions hereof.

Section 6.2 Notices . All notices, requests, claims, demands and other communications under this Agreement as between the Parties, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt unless the day of receipt is not a Business Day or the time of receipt in such Business Day is after 6:00 p.m. (addressee’s local time), in which case it shall be deemed to have been duly given or made at 9:00 a.m. (addressee’s local time) on the next Business Day) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 6.2):

If to ASD or any other ASD Charged Party, to:

American Standard Companies Inc.

One Centennial Avenue

P.O. Box 6820

Piscataway, NJ 08855-6820

Attn: Mary Beth Gustafsson, Esq.

Facsimile: 732-980-6057

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Eileen T. Nugent

Thomas W. Greenberg

Facsimile: 212-735-2000

If to WABCO or a WABCO Charged Party, to:

c/o WABCO Europe BVBA

Chaussée de Wavre, 1789 Box 15

1160 Brussels

Belgium

Attn: General Counsel

Facsimile: +32 2 663 98 89

With a copy to:

McDermott Will & Emery LLP

227 W. Monroe Street

Chicago, IL 60606

Attn: Neal J. White

Facsimile: 312-984-7700

Following a B&K Sale, if to a B&K Charged Party, to the B&K Buyer Parties at the address specified in notice provisions in the agreement relating to such B&K Sale.

Section 6.3 Successors and Assigns; Additional WABCO Parties .

(a) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. Neither this Agreement, nor any rights, interests or obligations hereunder, may be directly or indirectly assigned, delegated, sublicensed or transferred by WABCO or any of the WABCO Charged Parties, in whole or in part, to any other Person without the prior written consent of ASD. ASD shall have the right, without the prior consent of any other Party hereto, at any time, to assign all or a portion of its rights to indemnification under this Agreement to any B&K Buyer Party. In addition, ASD may assign all or any portion of its rights hereunder to any of its Affiliates or in connection with a collateral assignment for the benefit of its lenders. Promptly following any such assignment

permitted pursuant to the prior two sentences, ASD shall provide written notice to the Indemnitor Representative and the other Parties of such assignment. WABCO and ASE may assign all or any portion of its rights hereunder to any of its Affiliates or in connection with a collateral assignment for the benefit of its lenders. Nothing in any such assignment relieves WABCO or ASE of their obligations to ASD or any other Indemnitee.

(b) If, at any time following the Effective Time, any member of the WABCO Group (other than WABCO, ASE and WABCO Austria) becomes a named party in the Bathroom Fittings and Fixtures Proceedings (such newly named party, an “ Additional WABCO Party ” and collectively, the “ Additional WABCO Parties ”), WABCO shall cause the Additional WABCO Parties to execute and deliver one or more joinder agreements to this Agreement reasonably acceptable to ASD to the effect that such Additional WABCO Parties are parties hereto, that such Additional WABCO Parties agree to be bound by the obligations of the WABCO Charged Parties herein.

Section 6.4 Amendment, Modification and Waiver . This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the Parties hereto.

Section 6.5 Governing Law . This Agreement shall be governed by and construed in accordance with the internal Laws, and not the Laws governing conflicts of Laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law), of the State of New York.

Section 6.6 Consent to Jurisdiction . Each of the Parties irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York (the “ New York Courts ”), for the purposes of any suit, action or other proceeding to compel arbitration or for provisional relief in aid of arbitration in accordance with this Agreement or for provisional relief to prevent irreparable harm, and to the non-exclusive jurisdiction of the New York Courts for the enforcement of any award issued thereunder. Each of the Parties further agrees that service of any process, summons, notice or document by United States registered mail to such Party’s respective address set forth in Section 6.2 shall be effective service of process for any action, suit or proceeding in the New York Courts with respect to any matters to which it has submitted to jurisdiction in this Section 6.6. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the New York Courts, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

Section 6.7 Specific Performance . The Parties to this Agreement acknowledge and agree that the Indemnitees would suffer irreparable damage in the event that WABCO or the WABCO Charged Parties fail to perform any of their obligations under the Agreement in accordance with the specific

terms of the Agreement or otherwise breaches any such obligations or any of the provisions of this Agreement were not performed in accordance with their specific terms and that remedies at law would be inadequate to protect the Indemnitees against any actual or threatened breach of this Agreement by WABCO or the WABCO Charged Parties. Accordingly, notwithstanding anything to the contrary contained in the Agreement, and without prejudice to any other rights and remedies otherwise available to the Indemnitees, WABCO and the WABCO Charged Parties agree to the granting of equitable relief in the Indemnitees favor, including injunctive relief to prevent or cure breaches of this Agreement by WABCO and the WABCO Charged Parties and specific performance requiring WABCO and the WABCO Charged Parties to perform their obligations under this Agreement, in each case in an arbitration proceeding (without first complying with the negotiation provisions described above) or in court without proof of actual damages. ASE shall reimburse the Indemnitees for reasonable legal fees and other costs incurred to enforce this Agreement.

Section 6.8 Further Assurances . WABCO hereby agrees to, and to cause ASE to, execute and deliver, for the benefit of the Indemnitees (including any assignee of any Indemnitee permitted under this Agreement), such documents as may be reasonably requested by ASD (on behalf of the Indemnitees), evidencing ASE’s agreement that the indemnification obligations set forth in this Agreement inure to the benefit of and are enforceable by the Indemnitees and their permitted assigns.

Section 6.9 Construction . Unless otherwise stated, references to Articles and Sections are references to Articles and Sections of this Agreement.

Section 6.10 Third Parties . Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the Parties hereto any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement; provided, however, that the Indemnitees, to the extent not a Party hereto, and the B&K Buyer Parties or other assignees permitted under Section 6.3 shall, from and after any assignment of indemnification rights by ASD, be third party beneficiaries to enforce the rights to indemnification from ASE under this Agreement.

Section 6.11 Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

Section 6.12 Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect or incapable of being enforced by any rule of Law or public policy, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby and will nevertheless remain in full force and effect, and the Parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 6.13 Entire Agreement . This Agreement, the Distribution Agreement, the Defense Agreement, and the other Ancillary Agreements and any Annexes, Exhibits and Schedules attached hereto and thereto, shall constitute the entire agreement among the Parties

with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings, both written and verbal, among the Parties or any of them with respect to the subject matter hereof and thereof. Notwithstanding anything to the contrary contained in the Distribution Agreement, the provisions of the Agreement, and the Defense Agreement shall exclusively govern and control all the respective rights, responsibilities and obligations of the Parties after the Effective Time with respect to the Indemnifiable Matters. Except as set forth in the preceding sentence, nothing in the Agreement shall modify or limit the rights and remedies of ASD or WABCO under the Distribution Agreement or any of the Ancillary Agreements (other than this Agreement) relating to, arising out of or resulting from any breach by ASD or WABCO of the Distribution Agreement or any of the Ancillary Agreements (other than this Agreement). In the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of the Distribution Agreement or any Ancillary Agreement, the terms and conditions of this Agreement shall control with respect to the Indemnifiable Matters.

Section 6.14 No Circumvention . The Parties agree not to directly or indirectly take any actions, act in concert with any Person who takes an action, or cause or allow any of such Parties’ Affiliates to take any actions (including the failure to take a reasonable action) such that the resulting effect is to undermine the effectiveness of any of the provisions of this Agreement (including, without limitation, adversely affecting the rights or ability of Indemnitees to successfully pursue indemnification or payment pursuant to this Agreement).

Section 6.15 Survival . The rights and obligations of WABCO and the WABCO Charged Parties and the Indemnitees under the Agreement shall survive the sale or other transfer by any such Party of any assets or businesses or the assignment by it of any Liabilities or the sale by any Indemnitee or WABCO and the WABCO Charged Parties of the capital stock or other equity interests of any Subsidiary to any Person, including, in each case, any Change of Control of such Party.

Section 6.16 Appointment of Indemnitor Representative .

(a) Each of the WABCO Charged Parties (other than ASE) (“ Other WABCO Charged Parties ”) hereby authorizes, directs and appoints ASE (the “ Indemnitor Representative ”), to act as the sole and exclusive agent, attorney-in-fact and representative of such affiliated Other WABCO Charged Parties, with full power of substitution with respect to all matters under this Agreement, including determining, giving and receiving notices and process hereunder, contesting and settling any and all claims for indemnification pursuant to this Agreement or resolving any other disputes hereunder. Any actions taken, exercises of rights, power or authority and any decision or determination made by the Indemnitor Representative consistent therewith, shall be absolutely and irrevocably binding on each of the WABCO Charged Parties as if such WABCO Charged Parties personally had taken such action, exercised such rights, power or authority or made such decision or determination in such Other WABCO Charged Party’s individual capacity. Notwithstanding anything to the contrary contained in this Agreement, any action required to be taken by any Other WABCO Charged Parties hereunder or any action which such Other WABCO Charged Party, at its election, has the right to take hereunder, shall be taken only by the Indemnitor Representative and no Other WABCO Charged Party acting on its own shall be entitled to take any such action. All deliveries, including any notices

hereunder, to be made by any Indemnitee to any Other WABCO Charged Party hereunder shall be made exclusively to the Indemnitor Representative on behalf of the Other WABCO Charged Parties, and any delivery so made to the Indemnitor Representative shall constitute full performance of the obligations hereunder of the Indemnitee to the WABCO Charged Parties. The Indemnitee shall not be liable for allocation of particular deliveries among the WABCO Charged Parties.

(b) Notwithstanding any notice received by any Indemnitee to the contrary (except any notice of the appointment of a successor Indemnitor Representative approved by the Indemnitee) and absent bad faith or willful misconduct, each Indemnitee (i) shall be fully protected in relying upon and shall be entitled to rely upon, shall have no liability to any WABCO Charged Party with respect to, actions, decisions and determinations of the Indemnitor Representative and (ii) shall be entitled to assume that all actions, decisions and determinations of the Indemnitor Representative are fully authorized by each of the Other WABCO Charged Parties.

(c) The Indemnitor Representative shall not be liable to any Other WABCO Charged Party, Indemnitee or any such Person’s respective Affiliates for any decisions made or actions taken by the Indemnitor Representative. Each of the Other WABCO Charged Parties agree, to indemnify its respective Indemnitor Representative from and against any damages that the Indemnitor Representative may incur as a result of acting as the Indemnitor Representative hereunder or in connection with the performance of any of its duties hereunder to the fullest extent permitted by applicable Law, except to the extent that such damages are caused by actions taken by, or omitted to be taken by, the Indemnitor Representative in bad faith.

Section 6.17 Appointment of Indemnitee Representative .

(a) Each of the Indemnitees hereby authorizes, directs and appoints ASD (the “ Indemnitee Representative ”), to act as the sole and exclusive agent, attorney-in-fact and representative of the affiliated Indemnitees, with full power of substitution with respect to all matters under this Agreement, including determining, giving and receiving notices and process hereunder, contesting and settling any and all claims for indemnification pursuant to this Agreement or resolving any other disputes hereunder. Any actions taken, exercises of rights, power or authority and any decision or determination made by the Indemnitee Representative consistent therewith, shall be absolutely and irrevocably binding on each of the Indemnitees as if such Indemnitee personally had taken such action, exercised such rights, power or authority or made such decision or determination in such Indemnitee’s individual capacity. Notwithstanding anything to the contrary contained in this Agreement, any action required to be taken by any Indemnitee hereunder or any action which such Indemnitee, at its election, has the right to take hereunder, shall be taken only by the Indemnitee Representative and no Indemnitee acting on its own shall be entitled to take any such action. All deliveries, including any notices hereunder, to be made by any Indemnitor to any Indemnitee hereunder shall be made exclusively to the Indemnitee Representative on behalf of the Indemnitees, and any delivery so made to the Indemnitee Representative shall constitute full performance of the obligations hereunder of the Indemnitor to the Indemnitees. The Indemnitor shall not be liable for allocation of particular deliveries among the Indemnitees.

(b) Notwithstanding any notice received by any Indemnitors to the contrary (except any notice of the appointment of a successor Indemnitee Representative) and absent bad faith or

willful misconduct, each Indemnitor (i) shall be fully protected in relying upon and shall be entitled to rely upon, shall have no liability to any Indemnitee with respect to, actions, decisions and determinations of the Indemnitee Representative and (ii) shall be entitled to assume that all actions, decisions and determinations of the Indemnitee Representative are fully authorized by each of the Indemnitees.

(c) The Indemnitee Representative shall not be liable to any Indemnitee, Indemnitor or any such Person’s respective Affiliates for any decisions made or actions taken by the Indemnitee Representative. Each of the Indemnitees agree, to indemnify its respective Indemnitee Representative from and against any damages that the Indemnitee Representative may incur as a result of acting as the Indemnitee Representative hereunder or in connection with the performance of any of its duties hereunder to the fullest extent permitted by applicable Law, except to the extent that such damages are caused by actions taken by, or omitted to be taken by, the Indemnitee Representative in bad faith.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written.


AMERICAN STANDARD COMPANIES INC.

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: Senior Vice President and Chief Financial Officer

WABCO HOLDINGS INC.

By:		/s/ U LRICH M ICHEL
		Name: Ulrich Michel
		Title: Chief Financial Officer

AMERICAN STANDARD EUROPE BVBA

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: By Power of Attorney

IDEAL STANDARD FRANCE SAS

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: By Power of Attorney

IDEAL STANDARD GMBH & CO OHG

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: By Power of Attorney


WABCO AUSTRIA GESMBH

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: By Power of Attorney

IDEAL STANDARD GMBH

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: By Power of Attorney

IDEAL STANDARD ITALIA S.R.L.

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: By Power of Attorney

IDEAL STANDARD NEDERLAND BV

By:		/s/ G. P ETER D’A LOIA
		Name: G. Peter D’Aloia
		Title: By Power of Attorney