Document:

EX-10.1

FIRST AMENDMENT TO MASTER REPURCHASE AGREEMENT AND OTHER REPURCHASE DOCUMENTS

(Wachovia/MMA)

THIS FIRST AMENDMENT TO MASTER REPURCHASE AGREEMENT, dated as of November 21, 2007 (this
“Amendment No. 1”), is entered into by and among MMA REALTY CAPITAL REPURCHASE SUBSIDIARY,
LLC, a Maryland limited liability company, as the seller (together with its successors and
permitted assigns, the “Seller”), VARIABLE FUNDING CAPITAL COMPANY LLC, a Delaware limited
liability company, as the purchaser (together with its successors and assigns,
“Purchaser”), WACHOVIA CAPITAL MARKETS, LLC, a Delaware limited liability company (together
with its successors and assigns, “WCM”), as the deal agent for VFCC (together with its
successors and assigns in such capacity, the “Deal Agent”), MMA REALTY CAPITAL, LLC, a
Maryland limited liability company, as the limited guarantor (together with its successors and
permitted assigns, “Limited Guarantor”), MUNICIPAL MORTGAGE & EQUITY, LLC, a Delaware
limited liability company, as the parent (together with its successors and permitted assigns, “the
Parent”), and consented to by MMA CAPITAL CORPORATION, a Michigan corporation, as the
pledgor (together with its successors and permitted assigns, the “Pledgor”). Capitalized
terms used and not otherwise defined herein shall have the meanings given to such terms in the
Repurchase Agreement (as defined below).

R E C I T A L S

WHEREAS, the Seller, the Limited Guarantor, the Parent, the Purchaser and the Deal Agent are
parties to that certain Master Repurchase Agreement, dated as of November 13, 2006 (as amended by
this Amendment No. 1, the “Repurchase Agreement”);

WHEREAS, the Seller, the Parent and the Limited Guarantor desire to make certain modifications
to the Repurchase Documents;

WHEREAS, the Purchaser and the Deal Agent are willing to modify the Repurchase Documents as
requested by the Seller, the Parent and the Limited Guarantor on the terms and conditions specified
herein; and

WHEREAS, the Pledgor is a party to other Repurchase Documents and related agreements that may
be affected, directly or indirectly, by this Amendment No. 1 and desires to evidence its agreement
to the amendments and modifications set forth herein.

NOW THEREFORE, in consideration of the foregoing recitals, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

Section 1. Amendment to Repurchase Agreement.

(a) The definition of “Facility Maturity Date” contained in Subsection 1.1(b) to the
Repurchase Agreement is hereby amended and restated in its entirety as follows:

““Facility Maturity Date”: Subject to Article X, the earliest of
(a) December 31, 2007, (b) the date on which the Liquidity Agreement terminates,
expires or is unavailable and (c) the date on which this Agreement shall terminate
in accordance with the provisions hereof or by operation of Applicable Law.”

(b) The definition of “Maximum Amount” contained in Subsection 1.1(b) to the
Repurchase Agreement is hereby amended and restated in its entirety as follows:

““Maximum Amount”: Subject to Subsection 2.3(a) of this Agreement,
$9,000,000; provided, however, on and after the Facility Maturity
Date, the Maximum Amount shall mean the aggregate Purchase Price outstanding for all
Transactions.”

(c) The definition of “LC Permitted Draw Amount” contained in Subsection 1.1(b) to the
Repurchase Agreement is hereby amended and restated in its entirety as follows:

““LC Permitted Draw Amount”: On any date of determination, the maximum
amount that the Deal Agent is permitted to draw under the Letter of Credit, which
amount shall be set forth in a Credit Support Annex and shall be equal to the lesser
of (x) $5,445,000 and (y) the sum of (a) the Base Credit Support
plus (b) the Excess Credit Support.”

Section 2. Amendment to Fee Letter.

The definition of “Letter of Credit Amount” contained in the Fee Letter is hereby amended and
restated in its entirety as follows:

““Letter of Credit Amount”: $5,445,000 in the aggregate.”

	 	 	 	Section 3. Repurchase Documents in Full Force and Effect as Modified.

Except as specifically modified hereby, the Repurchase Documents shall remain in full force
and effect. All references to any Repurchase Document shall be deemed to mean each Repurchase
Document as modified by this Amendment No. 1. This Amendment No. 1 shall not constitute a novation
of the Repurchase Documents, but shall constitute a modification thereof. The parties hereto agree
to be bound by the terms and conditions of the Repurchase Documents, as modified by this Amendment
No. 1, as though such terms and conditions were set forth herein. For the avoidance of doubt, the
parties acknowledge and agree that the Funding Expiration Date has occurred and that no additional
purchases or advances of Purchase Price shall be made under the Repurchase Agreement.

Section 4. Representations.

Each of the Seller, the Parent the Limited Guarantor and the Pledgor represent and warrant,
as of the date of this Amendment No. 1, as follows:

(a) it is duly incorporated or organized, validly existing and in good standing under the laws
of its jurisdiction of organization and each jurisdiction where it conducts business;

(b) the execution, delivery and performance by it of this Amendment No. 1 is within its
corporate, company or partnership powers, has been duly authorized and does not contravene (1) its
Authority Documents or its applicable resolutions, (2) any Applicable Law or (3) any Contractual
Obligation, Indebtedness or Guarantee Obligation;

(c) no consent, license, permit, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority or other Person is required in connection with the
execution, delivery, performance, validity or enforceability by or against it of this Amendment
No. 1;

(d) this Amendment No. 1 has been duly executed and delivered by it;

(e) this Amendment No. 1, as well as each of the Repurchase Documents as modified by this
Amendment No. 1, constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally or by general principles of equity;

(f) no Default or Event of Default exists or will exist after giving effect to this Amendment
No. 1; and

(g) each of the Repurchase Documents is in full force and effect and neither the Seller, the
Parent, the Limited Guarantor nor the Pledgor has any defense, offset, counterclaim, abatement,
right of rescission or other claims, legal or equitable, available to the Seller, the Parent, the
Limited Guarantor, the Pledgor or any other Person with respect to this Amendment No. 1, the
Repurchase Agreement, the Repurchase Documents or any other instrument, document and/or agreement
described herein or therein, as modified and amended hereby, or with respect to the obligation of
the Seller, the Parent and the Limited Guarantor to repay the Obligations and other amounts due
under the Repurchase Documents.

Section 5. Conditions Precedent.

The effectiveness of this Amendment No. 1 is subject to the following conditions precedent:
(i) delivery to the Deal Agent of this Amendment No. 1 duly executed by each of the parties hereto;
(ii) delivery to the Deal Agent of the originals of one (1) or more replacement Letters of Credit
in the aggregate amount of the Letter of Credit Amount, which Letters of Credit shall be in form
and substance satisfactory to the Deal Agent in its discretion; (iii) the aggregate Purchase Price
outstanding for all Transactions shall be equal to or less than the Maximum Amount as of the date
of this Amendment No. 1; (iv) the payment of all reasonable legal fees and expenses of Moore & Van
Allen PLLC, as counsel to the Deal Agent, in the amount to be set forth on a separate invoice; and
(v) such other documents, agreements or certifications as the Deal Agent may reasonably require.

Upon the satisfaction of the conditions precedent in this Section 5 of this Amendment
No. 1, the Deal Agent shall deliver to the Seller the Letters of Credit issued by the Letter of
Credit Issuers in the aggregate Letter of Credit Amount of $100,000,000.

Section 6. Miscellaneous.

(a) This Amendment No. 1 may be executed in any number of counterparts (including by
facsimile), and by the different parties hereto on the same or separate counterparts, each of which
shall be deemed to be an original instrument but all of which together shall constitute one and the
same agreement.

(b) The descriptive headings of the various sections of this Amendment No. 1 are inserted for
convenience of reference only and shall not be deemed to affect the meaning or construction of any
of the provisions hereof.

(c) This Amendment No. 1 may not be amended or otherwise modified, waived or supplemented
except as provided in the Repurchase Agreement.

(d) The interpretive provisions of Sections 1.2, Section 1.3 and
Section 1.4 of the Repurchase Agreement are incorporated herein mutatis
mutandis.

(e) This Amendment No. 1 represents the final agreement among the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the
parties. There are no unwritten oral agreements between the parties.

(f) THIS AMENDMENT NO. 1 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT
NO. 1 SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

1

IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be executed by
their respective officers thereunto duly authorized, as of the date first above written.

	 	 	THE SELLER:

MMA REALTY CAPITAL REPURCHASE SUBSIDIARY, LLC, a Maryland limited liability company

By: /s/Thomas P. Cornett

Name: Thomas P. Cornett

Title: Senior Vice President

MMA Realty Capital Repurchase Subsidiary, LLC

3000 Bayport Drive, Suite 1100

Tampa, Florida 33607

Attention: Thomas P. Cornett

Facsimile No.: (813) 425–8000

Confirmation No.: (813) 868–8076

[Signatures Continued on the Following Page]

2

THE PURCHASER:

VARIABLE FUNDING CAPITAL COMPANY LLC,

as a Purchaser

By: Wachovia Capital Markets, LLC,

as attorney–in–fact

By: /s/ Douglas R. Wilson, Sr.

Name: Douglas R. Wilson, Sr.

Title: Director

Variable Funding Capital Company LLC

c/o Wachovia Capital Markets, LLC

301 South College Street, TW10

Charlotte, North Carolina 28288

Attention: Conduit Administration

Facsimile No.: (704) 383–9579

Confirmation No. (704) 374–2520

[Signatures Continued on the Following Page]

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THE DEAL AGENT:

WACHOVIA CAPITAL MARKETS, LLC

By: /s/ H. Lee Goins III

Name: H. Lee Goins III

Title: Vice President

Wachovia Capital Markets, LLC

301 South College Street, NC0166

Charlotte, North Carolina 28288

Attention: Lee Goins

Facsimile No.: (704) 715–0066

Confirmation No.: (704) 715–7655

[Signatures Continued on the Following Page]

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THE LIMITED GUARANTOR:

MMA REALTY CAPITAL, LLC,

a Maryland limited liability company

By: /s/Thomas P. Cornett

Name: Thomas P. Cornett

Title: Senior Vice President

MMA Realty Capital, LLC

3000 Bayport Drive, Suite 1100

Tampa, Florida 33607

Attention: Thomas P. Cornett

Facsimile No.: (813) 425–8000

Confirmation No.: (813) 868–8076

[Signatures Continued on the Following Page]

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THE PARENT:

MUNICIPAL MORTGAGE & EQUITY, LLC,

a Delaware limited liability company

By: /s/Thomas P. Cornett

Name: Thomas P. Cornett

Title: Senior Vice President

Municipal Mortgage & Equity, LLC

3000 Bayport Drive, Suite 1100

Tampa, Florida 33607

Attention: Thomas P. Cornett

Facsimile No.: (813) 425–8000

Confirmation No.: (813) 868–8076

[Signatures Continued on the Following Page]

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Acknowledged and agreed to by the Pledgor with

respect to provisions expressly applicable to it:

MMA CAPITAL CORPORATION,

a Michigan corporation

By: /s/Thomas P. Cornett

Name: Thomas P. Cornett

Title: Senior Vice President

MMA Capital Corporation

3000 Bayport Drive, Suite 1100

Tampa, Florida 33607

Attention: Thomas Cornett

Facsimile No.: (813) 425–8000

Confirmation No.: (813) 868–8076

7exv4w1

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Exhibit 4.1

Roll of Deeds No. H 1169/2007

Recorded at Munich on 25 July 2007

Today, this 25th day of July 2007 appeared before me

Dr. Eva-Maria Hepp, notary public at Munich

80539 Munich, Maximilianstraße 34/IV,

in the office of Hengeler Mueller

Partnership of attorneys

Leopoldstraße 8-10 D-80802 Munich,

where the notarization took place on request of the parties

	(1)	 	Dr. Martin Bentler, born 18 January 1961

having his business address at Wittelsbacherplatz 2, 80333 Munich

identified by his identity card, and
	 
	 	 	Mr. Solms U.Wittig, born 7 February 1964

having his business address at Baierbrunner Straße 15, 81379 Munich

identified by his identity card,
	 
	 	 	hereafter not acting in their own name, but under exclusion of any personal liability in the
name and on behalf of
	 
	 	 	Siemens Aktiengesellschaft with its business address at Wittelsbacherplatz 2, 80333 Munich,
Germany (HRB 6684),
	 
	 	 	by virtue of a power of attorney dated 18 July 2007, the original of which has been
presented to the notary during the notarisation and a certified copy of which is attached to
this deed;

	(2)	 	Dr. Daniel Wiegand, born 21 February 1973
	 
	 	 	having his business address at Leopoldstraße 8-10, 80802 Munich

personally known to me, and
	 
	 	 	Dr. Stephan Bühler, born 23 October 1964

having his business address at Werner-von-Siemens-Str. 50, 91052 Erlangen,
identified by his identity card

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	 	 	hereafter not acting in their own name, but under exclusion of any personal liability in the
name and on behalf of
	 
	 	 	Siemens International Holding B.V. with its business address at Prinses Beatrixlaan 800,
2595 BN Den Haag, The Netherlands (no. 27044420- Kamer van Koophandel),
	 
	 	 	by virtue of a power of attorney dated 18 July 2007, the original of which has been
presented to the notary during the notarisation and a certified copy of which is attached to
this deed;

	(3)	 	Mr. Jiri Philippi, born 4 December 1968

having his business address at Wittelsbacherplatz 2, 80333 Munich

identified by his identity card, and
	 
	 	 	Dr. Jan Wittenberg, born 5 March 1970

having his business address at Werner-von-Siemens-Str.50, 91052 Erlangen,

identified by his passport
	 
	 	 	hereafter not acting in their own name, but under exclusion of any personal liability in the
name and on behalf of
	 
	 	 	Siemens Beteiligungen U.S.A. GmbH with its business address at Wittelsbacherplatz 2, 80333
Munich, Germany (HRB 157985),
	 
	 	 	by virtue of a power of attorney dated 18 July 2007, the original of which has been
presented to the notary during the notarisation and a certified copy of which is attached to
this deed;

	(4)	 	Dr. Christoph H. Seibt, born 17 August 1965

having his business address at Alsterarkaden 27, 20354 Hamburg

identified by his identity card
	 
	 	 	hereafter not acting in his own name, but under exclusion of any personal
liability in the name and on behalf of
	 
	 	 	CAS Two Holdinggesellschaft mbH with its business address at Vahrenwalder Straße 9, 30165
Hanover, Germany (HRB 59424),
by virtue of a power of attorney dated 24 July 2007, the original of which has been
presented to the notary during the notarisation and a certified copy of which is attached to
this deed; and

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	(5)	 	Dr. Jochen Etzel, born 6 February 1960

having his business address at Vahrenwalder Straße 9, 30165 Hanover, Germany

identified by his identity card
	 
	 	 	hereafter not acting in his own name, but under exclusion of any personal liability in the
name and on behalf of
	 
	 	 	Continental Aktiengesellschaft with its business address at Vahrenwalder Straße 9, 30165
Hanover, Germany (HRB 3527)
	 
	 	 	by virtue of a power of attorney dated 24 July 2007, the original of which has been
presented to the notary during the notarisation and a certified copy of which is attached to
this deed

The persons present requested that the notary public notarizes this deed in English language. The
notary public having a good command of written and spoken English language made sure that the
persons present have good command of the English language. She informed the persons present about
their right to have an interpreter present during notarization or to request for a certified
translation of this deed. The persons present explicitly waived this right.

Reference is made to the Reference Deed (notarial deed no. H 1168 / 2007 of the notary Dr.
Eva-Maria Hepp, Munich dated 24 July 2007) comprising the Exhibits and Schedules referred to in
this deed. The Reference Deed, the original of which was on hand during the notarization,
constitutes an integral part of this deed. The persons appearing declare to have knowledge of the
said Reference Deed and waived the rights to have the Reference Deed read again aloud and to have
it attached to this deed. The Parties are informed that hereby the Exhibits and Schedules become an
integral part of this deed, whereas, for the avoidance of doubt, the annexes referred to in Exhibit
1.4 are not part of the Reference Deed or this deed.

Reference was further made to the Contribution Agreements (as defined in Section 1.3 of the SPA),
(notarial deeds no. T 1349/2007 of the notary public Ludwig Thiede, Munich, dated 23 May 2007 and
notarial deeds no. A 2463/2007 and A 2464/2007 of the notary public Dr. Manfred Asam, Munich, both
dated 29 June 2007). Certified Copies of the Contribution Agreements were on hand during the
notarization. The persons appearing declare to have knowledge of the said Contribution Agreements
and waived
the rights to have the Contribution Agreements read again aloud and to have them attached to this
deed.

To the extent that the Sale and Purchase Agreement provides for numbered Exhibits and Schedules
which are contained under the same number in the Reference Deed, the reference to such Exhibit or
Schedule in the Sale and Purchase Agreement shall be deemed to be a reference to the corresponding
Exhibit or Schedule, as the case may be, of the same number in the Reference Deed.

Upon request I hereby record the declarations of the persons appearing made before me as follows:

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SALE AND PURCHASE AGREEMENT

EXECUTION COPY

25 JULY 2007

 

regarding the

sale and purchase of the

Siemens VDO Automotive Group

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Sale and Purchase Agreement

by and between

	1.	 	Siemens Aktiengesellschaft with its business address at Wittelsbacherplatz 2, 80333 Munich,
Germany,

 - herein “Seller 1” -

	2.	 	Siemens International Holding B.V. with its business address at Prinses Beatrixlaan 800, 2595
BN Den Haag, The Netherlands,

 - herein “Seller 2” -

	3.	 	Siemens Beteiligungen U.S.A. GmbH with its business address at Wittelsbacherplatz 2, 80333
Munich, Germany,

 - herein “Seller 3” -

 - each of Seller 1, Seller 2 and Seller 3 herein also referred to

as a “Seller” and collectively as “Sellers” -

	4.	 	CAS Two Holdinggesellschaft mbH with its business address at Vahrenwalder Straße 9, 30165
Hanover, Germany,

 - herein “Purchaser” -

	5.	 	Continental Aktiengesellschaft with its business address at Vahrenwalder Straße 9, 30165
Hanover, Germany

 - herein “Guarantor” -

 - each of Sellers, Purchaser and Guarantor herein also referred to

individually as a “Party” and collectively as “Parties” -

 

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Table of Contents

	 	 	 	 	 	 	 	 	 
	A.	 	BUSINESS STRUCTURE, CARVE-OUT AND TRANSACTION DATES	 	 	12	 
	 

	 	1.
	 	Business Structure and Carve-out
	 	 	12	 
	 

	 	2.
	 	Transaction Dates
	 	 	17	 
	B.	 	SALE, PURCHASE AND ASSIGNMENT, PURCHASE PRICE	 	 	18	 
	 

	 	3.
	 	Sale, Purchase and Assignment of the Shares and the Shareholder
Loans
	 	 	18	 
	 

	 	4.
	 	Purchase Price
	 	 	20	 
	 

	 	5.
	 	Termination of Intercompany Financing Arrangements
	 	 	23	 
	C.	 	CLOSING CONDITIONS AND CLOSING	 	 	26	 
	 

	 	6.
	 	Closing Conditions and Closing
	 	 	26	 
	D.	 	GUARANTEES AND REMEDIES	 	 	30	 
	 

	 	7.
	 	Sellers’ Guarantees
	 	 	30	 
	 

	 	8.
	 	Guarantees of Purchaser and Guarantor
	 	 	37	 
	 

	 	9.
	 	Remedies
	 	 	38	 
	E.	 	Tax INDEMNITY	 	 	42	 
	 

	 	10.
	 	Tax Indemnity
	 	 	42	 
	F.	 	SELLERS’ COVENANTS AND OTHER UNDERTAKINGS	 	 	49	 
	 

	 	11.
	 	Sellers’ Covenants
	 	 	49	 
	 

	 	12.
	 	Pension Funding Obligation
	 	 	54	 
	 

	 	13.
	 	Non-Compete Undertaking, Use of Trademarks, Non-Solicitation
Undertaking
	 	 	56	 
	G.	 	LIMITATIONS	 	 	58	 
	 

	 	14.
	 	Expiration and Limitations of Claims
	 	 	58	 
	H.	 	PURCHASER’S COVENANTS AND INDEMNITIES	 	 	61	 
	 

	 	15.
	 	Purchaser’s Covenants
	 	 	61	 
	 

	 	16.
	 	Indemnification of Sellers by Purchaser
	 	 	64	 
	I.	 	GUARANTOR’S GUARANTEE	 	 	65	 
	 

	 	17.
	 	Guarantor’s Guarantee
	 	 	65	 
	J.	 	MISCELLANEOUS	 	 	66	 
	 

	 	18.
	 	Restrictions of Announcement and Confidentiality
	 	 	66	 
	 

	 	19.
	 	Notices
	 	 	67	 
	 

	 	20.
	 	Costs, Expenses, Fees and Charges
	 	 	68	 
	 

	 	21.
	 	Entire Agreement, Interpretation, Rule of Conflict
	 	 	69	 
	 

	 	22.
	 	No Third Party Rights
	 	 	69	 
	 

	 	23.
	 	No Assignment, No Set-off
	 	 	69	 
	 

	 	24.
	 	Certain Terminology and Terms
	 	 	70	 
	 

	 	25.
	 	Governing Law, Dispute Resolution
	 	 	70	 
	 

	 	26.
	 	Invalid Provisions, Unintended Gaps (Salvatorische Klausel)
	 	 	71	 

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Exhibits and Schedules

	 	 	 
	Exhibit A

	 	Business Definition
	Exhibit 1.1

	 	Structure as of the Scheduled Closing Date
	Exhibit 1.4

	 	Draft Amendment to SAG Contribution Agreement
	Exhibit 1.7.1

	 	VDO Subsidiaries
	Exhibit 1.7.2

	 	Consolidated Companies
	Exhibit 1.7.3

	 	Material Joint Venture Participations
	Exhibit 3.1.2

	 	Loan Assignment Agreement 1
	Exhibit 3.2.2

	 	Loan Assignment Agreement 2
	Exhibit 4.1.2

	 	Equity Value Bridge
	Exhibit 5.3

	 	Form for Additional Loan Assignment Agreements
	Exhibit 6.5.7

	 	Sellers’ Representatives Incumbent on Boards of the
Companies
	 
	 	 
	Exhibit 7.3

	 	Persons Relevant for Due Inquiry
	Exhibit 9.4.5.2

	 	Joint Instruction Letter
	Exhibit 11.3

	 	Permitted Actions between Signing Date and Closing Date
	Exhibit 11.3.2

	 	Capex Plan
	Exhibit 11.5

	 	Terminating Services
	Exhibit 12.3.3

	 	Actuarial Assumptions for Calculation of the DBO Amount
	Exhibit 13.1

	 	Restricted Activities
	Exhibit 15.1

	 	Sellers’ Securities
	Exhibit 20.1

	 	IPO-Related Costs
	Schedule 7.1.3

	 	Bankruptcy Proceedings
	Schedule 7.1.5

	 	VDO Subsidiaries
	Schedule 7.1.6

	 	Majority Participations, Equity Interest
	Schedule 7.1.7

	 	Enterprise Agreements
	Schedule 7.1.8

	 	Material Intellectual Property Rights
	Schedule 7.1.10

	 	Litigation
	Schedule 7.1.11

	 	Permits
	Schedule 7.1.12

	 	Compliance with Laws
	Schedule 7.1.13

	 	Conduct of Business
	Schedule 7.1.14

	 	Collective Labor Agreements
	Schedule 7.1.17

	 	Environmental Contaminations
	Schedule 7.1.19

	 	IT Systems

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Definitions

	 	 	 
	Additional Loan Assignment Agreements

	 	as defined in Section 5.3
	Adjustment Amount

	 	as defined in Section 5.6
	Affiliate(s)

	 	shall mean any affiliate within the
meaning of Section 15 German Stock
Corporation Act (AktG)
	Agreement

	 	as defined in Recital (C)
	Antitrust Clearances

	 	as defined in Section 6.1.1
	Best Knowledge of Sellers

	 	as defined in Section 7.3
	BodeHewitt

	 	as defined in Section 12.3
	BodeHewitt Report

	 	as defined in Section 12.3
	Business

	 	as defined in Recital (A)
	Business Day(s)

	 	as defined in Section 24.1
	Capex Plan

	 	as defined in Section 11.3.2
	Capital Increase 1

	 	as defined in Section 1.3.1
	Capital Increase 2

	 	as defined in Section 1.3.2
	Capital Increase 3

	 	as defined in Section 1.3.3
	Capital Increases

	 	as defined in Section 1.3
	Carve-Out Agreements

	 	as defined in Section 11.7
	Cash Pooling Agreements

	 	as defined in Section 5.1
	Chinese Carve-out Business

	 	as defined in Section 1.6.1
	Chinese Carve-out Companies

	 	as defined in Section 1.6.1
	CIT

	 	as defined in Section 4.3.3.1
	Closing

	 	as defined in Section 6.5
	Closing Conditions

	 	as defined in Section 6.1
	Closing Date

	 	as defined in Section 2.4
	Closing Events

	 	as defined in Section 6.5
	Collective Employment Agreements

	 	as defined in Section 15.7.1
	Company/Companies

	 	as defined in Section 1.7.1
	Competing Business

	 	as defined in Section 13.2
	Confidential Information

	 	as defined in Section 18.2
	Consolidated Company/Companies

	 	as defined in Section 1.7.2
	Contest

	 	as defined in Section 10.8.3
	Contractual Penalty

	 	as defined in Section 6.6
	Contribution Agreements

	 	as defined in Section 1.3
	Contribution Profit

	 	as defined in Section 4.3.2
	Data Room

	 	as defined in Section 9.4.5.2
	DBO Amount

	 	as defined in Section 12.2.1
	Deemed Step-up Potential

	 	as defined in Section 4.3.2
	De Minimis Claims

	 	as defined in Section 14.3
	Deductible

	 	as defined in Section 14.3
	Disclosure Schedules

	 	as defined in Section 7.2
	Effective Date

	 	as defined in Section 2.2

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	Effective Date Accounts

	 	as defined in Section 7.1.15
	Enterprise Value

	 	as defined in Section 4.1.1
	Environmental Contamination

	 	as defined in Section 7.1.17
	Equity Value Bridge

	 	as defined in Section 4.1.2
	Equity Value

	 	as defined in Section 4.1.2
	Exchange Rates

	 	as defined in Section 24.2
	Exempted Claims

	 	as defined in Section 14.1
	Expected Step-up Potential

	 	as defined in Section 4.3.1
	Final Intercompany Debt Balance

	 	as defined in Section 5.5
	Final Intercompany Loan Purchase Price

	 	as defined in Section 5.5
	Grace Period

	 	as defined in Section 13.4
	Guarantor

	 	shall mean Continental Aktiengesellschaft
	Hedge Market Value

	 	as defined in Section 5.7
	Hedges

	 	as defined in Section 5.7
	Indian Carve-out Business

	 	as defined in Section 1.6.2
	Indian NewCo

	 	as defined in Section 1.6.2
	Intercompany Financing Loans

	 	as defined in Section 5.2.2
	Intercompany Loan Purchase Price

	 	as defined in Section 5.3
	Intercompany Financing Arrangements

	 	as defined in Section 5.1
	Liability Cap

	 	as defined in Section 14.4
	Loan Assignment Agreement 1

	 	as defined in Section 3.1.2
	Loan Assignment Agreement 2

	 	as defined in Section 3.2.2
	Loan Purchaser(s)

	 	as defined in Section 3.4
	Losses

	 	as defined in Section 9.1
	Management Team

	 	as defined in Section 7.3
	Material Adverse Effect

	 	as defined in Section 7.4
	Material Assets

	 	as defined in Section 7.1.9
	Material Intellectual Property Rights

	 	as defined in Section 7.1.8
	Material Joint Venture Participations

	 	as defined in Section 1.7.3
	Neutral Auditor

	 	as defined in Section 5.5
	Party/Parties

	 	shall mean individually or collectively
Sellers, Purchaser and the Guarantor
	Pension and/or Benefit Schemes

	 	as defined in Section 15.7.3
	Pension Asset Value

	 	as defined in Section 12.2.3
	Pension Deficit Amount

	 	as defined in Section 12.2
	Permits

	 	as defined in Section 7.1.11
	Post-Effective Date Obligation

	 	as defined in Section 10.6
	Post-Employment Benefit Obligations

	 	as defined in Section 12.2.2
	Pre-Effective Date Obligation

	 	as defined in Section 10.6
	Preliminary Intercompany Financing 

Loans

	 	as defined in Section 5.4
	Preliminary Intercompany Loan 

Purchase Price

	 	as defined in Section 5.4
	Purchase Price

	 	as defined in Section 4.1

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	Purchaser

	 	shall mean CAS Two Holdinggesellschaft mbH
	Purchaser Claim

	 	as defined in Section 9.1
	Receiving Plan

	 	as defined in Section 12.5
	Relevant Employees

	 	as defined in Section 12.2.1
	Restricted Activities

	 	as defined in Section 13.1
	Restricted Employees

	 	as defined in Section 13.5
	Retained Employees

	 	as defined in Section 16.1.4
	SAG Contribution Agreement

	 	as defined in Section 1.3.1
	Scheduled Closing Date

	 	as defined in Section 2.3
	Section 52 Registration

	 	as defined in Section 1.3
	Seller 1

	 	shall mean Siemens Aktiengesellschaft
	Seller 1 Shares

	 	as defined in Section 1.5.1
	Seller 2

	 	shall mean Siemens International
Holding B.V.
	Seller 2 Shares

	 	as defined in Section 1.5.2
	Seller 3

	 	shall mean Siemens Beteiligungen U.S.A.
GmbH
	Seller 3 Shares

	 	as defined in Section 1.5.3
	Seller(s)

	 	shall mean Seller 1, Seller 2 and Seller 3
	Sellers’ Account

	 	as defined in Section 4.5
	Sellers’ Affiliates

	 	as defined in Section 5.1
	Sellers’ Conduct Covenants

	 	as defined in Section 11.11
	Sellers’ Covenants

	 	as defined in Section 11.11
	Sellers’ Guarantees

	 	as defined in Section 7.1
	Sellers’ Indemnification Claims

	 	as defined in Section 16.1
	Sellers’ Other Covenants

	 	as defined in Section 11.11
	Sellers’ Securities

	 	as defined in Section 15.1
	Share Certificate 1

	 	as defined in Section 1.5.1
	Share Certificate 2

	 	as defined in Section 1.5.2
	Share Certificate 3

	 	as defined in Section 1.5.3
	Share Certificates

	 	as defined in Section 1.7.5
	Shareholder Loan 1

	 	as defined in Section 1.3.1
	Shareholder Loan 2

	 	as defined in Section 1.3.1
	Shareholder Loan 3

	 	as defined in Section 1.3.2
	Shareholder Loan Interest

	 	as defined in Section 4.1.4
	Shareholder Loan Purchase Price

	 	as defined in Section 4.2.1
	Shareholder Loans

	 	as defined in Section 1.7.7
	Share Purchase Price

	 	as defined in Section 4.2.2
	Share Purchase Price Interest

	 	as defined in Section 4.1.3
	Shares

	 	as defined in Section 1.7.4
	SIBUSA Contribution Agreement

	 	as defined in Section 1.3.3
	Signing Date

	 	as defined in Section 2.1
	SIH Contribution Agreement

	 	as defined in Section 1.3.2

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	Step-up Agreements

	 	as defined in Section 4.3.2
	Subsidiary Shares

	 	as defined in Section 1.7.6
	Tax/Taxes

	 	as defined in Section 10.1
	Tax Benefits

	 	as defined in Section 10.2.2
	Tax Indemnification Claim

	 	as defined in Section 10.2
	Tax Refunds

	 	as defined in Section 10.3
	Terminating Services

	 	as defined in Section 11.5
	Third Party Claim

	 	as defined in Section 9.6
	Time Limitations

	 	as defined in Section 14.1
	Title Claims

	 	as defined in Section 14.1.1
	Transferring Employees

	 	as defined in Section 11.8
	Unfunded Pension Compensation

	 	as defined in Section 12.5
	VDO AG

	 	as defined in Section 1.2
	VDO Subsidiaries

	 	as defined in Section 1.7.1
	VDO Trademarks

	 	as defined in Section 13.3
	Year-End Accounts

	 	as defined in Section 7.1.16
	2007 CIT Assessment Notice

	 	as defined in Section 4.3.3.2
	2007 CIT Return

	 	as defined in Section 4.3.3.1

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R E C I T A L S

	(A)	 	WHEREAS, Sellers are, amongst other activities, through their direct and indirect
subsidiaries engaged in the activities described in Exhibit A (herein collectively
“Business”).
	 
	(B)	 	WHEREAS, Guarantor and its Affiliates, amongst other activities, are engaged in the
development, manufacturing, marketing and distribution of tires, other products made of
natural or synthetic rubber and of components for the automotive industry, in particular brake
systems, airbag systems, suspension systems and other components.
	 
	(C)	 	WHEREAS, Seller 1, the ultimate parent company of Seller 2 and Seller 3, after a strategic
review of its business portfolio, has concluded that it wishes to sell and transfer the
Business to Purchaser upon the terms and conditions of this Sale and Purchase Agreement
(herein “Agreement”).
	 
	(D)	 	WHEREAS, Purchaser wishes to purchase and acquire the Business from Sellers upon the terms
and conditions of this Agreement.

NOW, THEREFORE, the Parties agree as follows:

	A.	 	BUSINESS STRUCTURE, CARVE-OUT AND TRANSACTION DATES

	1.	 	Business Structure and Carve-out

	1.1	 	The legal structure of the Companies (as defined in Section 1.7.1 below) engaged in the
Business held directly or indirectly by Sellers as of the Scheduled Closing Date (as defined
in Section 2.3 below) is shown in Exhibit 1.1.
	 
	1.2	 	Siemens VDO Automotive AG is a stock corporation (Aktiengesellschaft) organized under the
laws of Germany registered with the commercial register (Handelsregister) maintained at the
lower court (Amtsgericht) of Regensburg under registration number HRB 10510 and having its
corporate domicile (Sitz) in Regensburg, Germany (herein “VDO AG”). As of the Signing Date,
the stated capital (Grundkapital) of VDO AG amounts to EUR 50,000.00 (in words: fifty thousand
Euro) and is divided in 50,000 (in words: fifty thousand) registered no-par value shares
(Namens-Stückaktien) with an arithmetical participation in the stated capital (rechnerischer
Anteil am Grundkapital) of EUR 1.00 per share.

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	1.3	 	The Business as formerly conducted directly or indirectly by Sellers and Sellers’ Affiliates
(as defined in Section 5.1 below) has been reorganized and transferred to VDO AG as follows:

	 	1.3.1	 	Under a contribution agreement (Einbringungsvertrag) dated 23 May 2007
(notarial deed no. T 1349/2007 of the notary Ludwig Thiede, Munich) (herein “SAG
Contribution Agreement”), Seller 1 has agreed to transfer the Business as previously
conducted by Seller 1 in Germany (including participations in domestic and foreign
subsidiaries pertaining to the Business) to VDO AG as mixed contribution in kind
(gemischte Sacheinlage) with economic effect as of 01 June 2007, 0:00 hours in exchange
for (i) issuance of 75,000,000 new shares in VDO AG with an arithmethical participation
in the stated capital (rechnerischer Anteil am Grundkapital) of VDO AG of EUR 1.00 per
share to be issued by VDO AG to Seller 1 in accordance with a capital increase
(Kapitalerhöhung) resolved by the shareholders’ meeting of VDO AG on 23 May 2007
(herein “Capital Increase 1”) and (ii) a claim for additional consideration
(Mehrvergütungsanspruch) against VDO AG in the amount of EUR 2,180,000,000.00 (in
words: Euro two billion one hundred eighty million) (subject to adjustments in
accordance with Section 2.6 of the SAG Contribution Agreement) for which payment has
been deferred (gestundet) under the SAG Contribution Agreement such that the amount of
EUR 2,180,000,000.00 (in words: Euro two billion one hundred eighty million) plus
interest thereon at a rate of EURIBOR (as defined in the underlying loan agreement)
plus 0.125 percent p.a. as from 01 June 2007 is owed by VDO AG to Seller 1 as
shareholder loan (herein “Shareholder Loan 1”). In accordance with Section 10.4 of the
SAG Contribution Agreement, Seller 1 has granted VDO AG an additional shareholder loan
in the amount of EUR 1,389,607,965.00 (in words: Euro one billion three hundred
eighty-nine million six hundred and seven thousand nine hundred sixty-five) (herein
“Shareholder Loan 2”) which bears interest at a rate of EURIBOR (as defined in the
underlying loan agreement) plus 0.125 percent p.a. as from 01 June 2007.
	 
	 	1.3.2	 	Under a contribution agreement (Einbringungsvertrag) dated 29 June 2007
(notarial deed no. A 2463/2007 of the notary Dr. Manfred Asam, Munich) (herein “SIH
Contribution Agreement”), Seller 2 has agreed to transfer shares in certain foreign and
domestic subsidiaries operating in the Business (including all shares in Kyros 31 GmbH,
Munich, which in turn holds 44.93 percent of the capital interests (Class B Common
Stock) in Siemens VDO Holding Inc., Wilmington, Delaware, USA) to VDO AG as mixed
contribution in kind (gemischte Sacheinlage) with economic effect as of 29 June 2007,
24:00
hours in exchange for (i) issuance of 7,500,000 new registered
no-par value shares (Namens-Stückaktien) in VDO AG with an arithmetical participation in the
stated capital (rechnerischer Anteil am Grundkapital) of VDO AG of EUR 1.00 per
share to be issued by VDO AG to Seller 2 in accordance with a capital increase
(Kapitalerhöhung) resolved by the shareholders’ meetings of VDO AG on 23 May 2007
and on 29 June 2007 (herein “Capital Increase 2”) and (ii) a claim for additional
consideration (Mehrvergütungsanspruch) against VDO AG in the amount of EUR
800,000,000.00 (in words: Euro eight hundred million) for which payment has been
deferred (gestundet) under the SIH Contribution Agreement so that the amount of
EUR 800,000,000.00 (in words: Euro eight hundred million) plus interest thereon
at a rate of EURIBOR (as defined in the underlying loan agreement) plus 0.125
percent p.a. as from 29 June 2007 is owed by VDO AG to Seller 2 as shareholder
loan (herein “Shareholder Loan 3”).

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	 	1.3.3	 	Under a contribution agreement (Einbringungsvertrag) dated 29 June 2007
(notarial deed no. A 2464/2007 of the notary Dr. Manfred Asam, Munich) (herein “SIBUSA
Contribution Agreement”), Seller 3 has agreed to transfer 55.07 percent of the capital
interests (Class A Common Stock) in Siemens VDO Holding Inc., Wilmington, Delaware, USA
as contribution in kind (Sacheinlage) with effect as of 29 June 2007, 24:00 hours in
exchange for issuance of 11,250,000 new registered no-par value shares
(Namens-Stückaktien) in VDO AG with an arithmetical participation in the stated capital
(rechnerischer Anteil am Grundkapital) of VDO AG of EUR 1.00 per share to be issued by
VDO AG to Seller 3 in accordance with a capital increase (Kapitalerhöhung) resolved by
the shareholders’ meeting of VDO AG on 23 May 2007 and amended by shareholder
resolution dated 29 June 2007 (herein “Capital Increase 3”).

	 	 	The SAG Contribution Agreement, the SIH Contribution Agreement and the SIBUSA Contribution
Agreement shall herein be collectively referred to as “Contribution Agreements”. The Capital
Increase 1, Capital Increase 2, the Capital Increase 3 shall herein be collectively referred
to as “Capital Increases”. As a matter of precaution, the parties to the Contribution
Agreements have agreed to fulfil the requirements set forth in Section 52 German Stock
Corporation Act (AktG) (Nachgründung) and the Contribution Agreements shall be registered
with the commercial register (Handelsregister) of VDO AG in accordance with the provisions
of Section 52 German Stock Corporation Act (AktG) (Nachgründung) (herein “Section 52
Registration”).

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	1.4	 	As of the Signing Date, the Capital Increases have not yet been registered with the
commercial register (Handelsregister) maintained at the lower court (Amtsgericht) of
Regensburg and therefore not become effective yet. Seller 1 shall procure (bewirken) that, as
soon as reasonably practicable after the Signing Date (i) all amendments to the SAG
Contribution Agreement shall, substantially in the form as attached as Exhibit 1.4, be
notarized and (ii) the shareholders’ meeting of VDO AG shall, as a matter of precaution,
approve the execution of the Contribution Agreements (as amended) with a view to rules on post
formation transactions (Nachgründung) pursuant to Section 52 Stock Corporation Act (AktG) and
(iii) both the management board (Vorstand) and the chairman of the supervisory board
(Aufsichtsratsvorsitzende) of VDO AG shall apply for the registration of the Contribution
Agreements and of the resolution (Beschluss) and implementation (Durchführung) of the Capital
Increases with the commercial register (Handelsregister) maintained at the lower court
(Amtsgericht) of Regensburg in accordance with Sections 52 (6), 184, 188 Stock Corporation Act
(AktG).
	 
	1.5	 	Upon registration of the Capital Increases with the commercial register (Handelsregister),
the stated capital (Grundkapital) of VDO AG shall amount to EUR 93,800,000.00 (in words: Euro
ninety three million eight hundred thousand) and shall be divided in 93,800,000 (in words:
ninety three million eight hundred thousand) registered no-par value shares
(Namens-Stückaktien) with an arithmetical participation in the stated capital (rechnerischer
Anteil am Grundkapital) of EUR 1.00 per share which shall be held by Sellers as follows:

	 	1.5.1	 	Seller 1 shall hold 75,050,000 (in words: seventy-five million fifty thousand)
registered no-par value shares (Namens-Stückaktien) with an arithmetical participation
in the stated capital (rechnerischer Anteil am Grundkapital) of EUR 1.00 (in words:
Euro one) per share (herein “Seller 1 Shares”) for which a collective share certificate
(Sammelurkunde) shall be issued in the name of Seller 1 (herein “Share Certificate 1”);
	 
	 	1.5.2	 	Seller 2 shall hold 7,500,000 (in words: seven million five hundred thousand)
registered no-par value shares (Namens-Stückaktien) with an arithmetical participation
in the stated capital (rechnerischer Anteil am Grundkapital) of EUR 1.00 (in words:
Euro one) per share (herein “Seller 2 Shares”) for which a collective share certificate
(Sammelurkunde) shall be issued in the name of Seller 2 (herein “Share Certificate 2”);
	 
	 	1.5.3	 	Seller 3 shall hold 11,250,000 (in words: eleven million two hundred fifty
thousand) registered no-par value shares (Namens-Stückaktien) with an arithmetical
participation in the stated capital (rechnerischer
Anteil am Grundkapital) of EUR 1.00 (in words: Euro one) per share (herein
“Seller 3 Shares”) for which a collective share certificate (Sammelurkunde) shall
be issued in the name of Seller 3 (herein “Share Certificate 3”).

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	1.6	 	The following activities relating exclusively to the Business which are currently still held
or conducted by Sellers or Sellers’ Affiliates are to be carved out and transferred to the
Companies in accordance with the principles of the Contribution Agreements as follows:

	 	1.6.1	 	Seller 1 shall procure (bewirken) that the activities (including without
limitation all assets and liabilities regardless whether such assets and liabilities
are to be shown on a balance sheet or not, contracts, contractual offers
(Vertragsangebote) and all staff) relating exclusively to the Business carried out by
Siemens Ltd. China and Siemens International Trading Ltd., each a wholly owned direct
or indirect subsidiary of Seller 1 (herein “Chinese Carve-out Business”) shall, as soon
as legally and practically possible, be sold by Siemens Ltd. China and Siemens
International Trading Ltd. to Siemens VDO Asia Pacific Co. Ltd. and Siemens VDO
Automotive Changchun Co, Ltd., each a wholly owned subsidiary of VDO AG (herein
“Chinese Carve-out Companies”); provided that (mit der Maßgabe, dass) the purchase
price for the Chinese Carve-out Business payable to Siemens Ltd. China and Siemens
International Trading Ltd. shall be paid by Seller 1 and Seller 1 shall waive any and
all claims for reimbursement (Ersatzansprüche) resulting from such payment, if any,
against Purchaser, the Chinese Carve-out Companies and any other Company.
	 
	 	1.6.2	 	Seller 1 shall procure (bewirken) that the activities (including without
limitation all assets and liabilities regardless whether such assets and liabilities
are to be shown on a balance sheet or not, contracts, contractual offers
(Vertragsangebote) and all staff) relating exclusively to the Business carried out by
Siemens Ltd., India with the exception of the property used by the Business in
Bangalore, India (herein “Indian Carve-out Business”) shall, as soon as legally and
practically possible, (i) be sold and transferred by Siemens Ltd., India to Siemens VDO
Automotive Components Private Limited (herein “Indian NewCo”), and (ii) after such sale
and transfer, all but one (1) shares in Indian NewCo shall be contributed by Seller 1
to the capital reserves (Einbringung in die Kapitalrücklage) of VDO AG without issuance
of new shares and without any additional consideration and (iii) the remaining one (1)
share shall be transferred to a VDO Subsidiary.

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	1.7	Companies, Consolidated Companies, Material Joint Venture Participations, Shares, Share
Certificates, Subsidiary Shares and Shareholder Loans shall each have the following meaning in
this Agreement:

	 	1.7.1	 	“Companies” and each individually a “Company” shall mean (i) VDO AG, (ii) the
direct or indirect majority participations of VDO AG listed in Exhibit 1.7.1
(herein “VDO Subsidiaries”) and (iii) Indian NewCo and Siemens VDO Asia Pacific Co.
Ltd..
	 
	 	1.7.2	 	“Consolidated Companies” and each individually a “Consolidated Company” shall
mean all Companies listed in Exhibit 1.7.2.
	 
	 	1.7.3	 	“Material Joint Venture Participations” shall mean the participations in the
joint ventures as listed in Exhibit 1.7.3.
	 
	 	1.7.4	 	“Shares” shall mean the Seller 1 Shares, the Seller 2 Shares and the Seller 3
Shares.
	 
	 	1.7.5	 	“Share Certificates” shall mean the Share Certificate 1, the Share Certificate
2 and the Share Certificate 3.
	 
	 	1.7.6	 	“Subsidiary Shares” shall mean the shareholdings of the Companies in the VDO
Subsidiaries and the Material Joint Venture Participations as set forth in Exhibit
1.7.1 and 1.7.3.
	 
	 	1.7.7	 	“Shareholder Loans” shall mean the Shareholder Loan 1, the Shareholder Loan 2
and the Shareholder Loan 3.

	2.	 	Transaction Dates

	 	 	Signing Date, Effective Date, Scheduled Closing Date and Closing Date shall each have the
following meaning in this Agreement:
	 
	2.1	 	“Signing Date” shall be the day on which this Agreement has been notarized.
	 
	2.2	 	“Effective Date” shall be 30 June 2007, 24:00 hours.
	 
	2.3	 	“Scheduled Closing Date” shall be (i) the last Business Day (as defined in Section 24.1
below) of the month in which the last Closing Condition (as defined in Section 6.1 below)
shall have been fulfilled provided that the last Closing Condition shall have been fulfilled
at least ten (10) Business Days prior to the end of such month, or (ii) in the event that the
last Closing Condition shall have
been fulfilled less than ten (10) Business Days prior to the end of a given month, the last
Business Day of the calendar month immediately following the month in which the last Closing
Condition has been fulfilled, or (iii) any other day as agreed between the Parties.

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	2.4	 	"Closing Date” shall be the day on which all, and not some only, of the Closing Events (as
defined in Section 6.5 below) shall have taken place or have been duly waived.

	B.	 	SALE, PURCHASE AND ASSIGNMENT, PURCHASE PRICE

	3.	 	Sale, Purchase and Assignment of the Shares and the Shareholder Loans

	3.1	 	Seller 1 hereby sells to Purchaser

	 	3.1.1	 	the Seller 1 Shares with all rights and obligations pertaining thereto,
including the dividend rights (Gewinnbezugsrechte) to all profits for the current
business year (ending 30 September 2007) and all subsequent business years not yet
distributed to Seller 1 as of the Closing Date, with commercial effect (mit
wirtschaftlicher Wirkung) as of the Effective Date and undertakes to transfer title to
(übereignen) the Seller 1 Shares and deliver (übergeben) the Share Certificate 1 to
Purchaser on the Scheduled Closing Date in accordance with Section 6.5 below; and
	 
	 	3.1.2	 	the Shareholder Loan 1 and the Shareholder Loan 2 with all rights and
obligations pertaining thereto (including all accrued interest) and undertakes to
assign (abtreten) the Shareholder Loan 1 and the Shareholder Loan 2 to Purchaser on the
Scheduled Closing Date in accordance with a separate assignment agreement substantially
in the form as attached hereto as Exhibit 3.1.2 (herein “Loan Assignment
Agreement 1”).

	 	 	Purchaser hereby purchases the Seller 1 Shares, the Shareholder Loan 1 and the Shareholder
Loan 2 from Seller 1 and undertakes to accept the transfer and assignment thereof in
accordance with Sections 3.1.1 and 3.1.2.
	 
	3.2	 	Seller 2 hereby sells to Purchaser

	 	3.2.1	 	the Seller 2 Shares with all rights and obligations pertaining thereto,
including the dividend rights (Gewinnbezugsrechte) to all profits for the current
business year (ending 30 September 2007) and all subsequent business years not yet
distributed to Seller 2 as of the Closing
Date, with commercial effect (mit wirtschaftlicher Wirkung) as of the Effective
Date and undertakes to transfer title to (übereignen) the Seller 2 Shares and
deliver (übergeben) the Share Certificate 2 to Purchaser on the Scheduled Closing
Date in accordance with Section 6.5 below; and

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	 	3.2.2	 	the Shareholder Loan 3 with all rights and obligations pertaining thereto
(including all accrued interest) and undertakes to assign (abtreten) the Shareholder
Loan 3 to Purchaser on the Scheduled Closing Date in accordance with a separate
assignment agreement substantially in the form as attached hereto as Exhibit
3.2.2 (herein “Loan Assignment Agreement 2”).

	 	 	Purchaser hereby purchases the Seller 2 Shares and the Shareholder Loan 3 from Seller 2 and
undertakes to accept the transfer and assignment thereof in accordance with the foregoing
sentence.
	 
	3.3	 	Seller 3 hereby sells to Purchaser the Seller 3 Shares with all rights and obligations
pertaining thereto, including the dividend rights (Gewinnbezugsrechte) to all profits for the
current business year (ending 30 September 2007) and all subsequent business years not yet
distributed to Seller 3 as of the Closing Date, with commercial effect (mit wirtschaftlicher
Wirkung) as of the Effective Date and undertakes to transfer title to (übereignen) the Seller
3 Shares and deliver (übergeben) the Share Certificate 3 to Purchaser on the Scheduled Closing
Date in accordance with Section 6.5 below. Purchaser hereby purchases the Seller 3 Shares from
Seller 3 and undertakes to accept the assignment thereof in accordance with the foregoing
sentence.
	 
	3.4	 	Purchaser shall be entitled to nominate one or several of its Affiliates to purchase and
acquire some or all of the Shareholder Loans or the Intercompany Financing Loans (as defined
in Section 5.2.2 below) instead of Purchaser (herein “Loan Purchaser(s)”). Purchaser shall
exercise the foregoing right by submitting, within twenty (20) Business Days after the Signing
Date, a written notification to Sellers specifying the Loan Purchaser(s) and the Shareholder
Loans or the Intercompany Financing Loans which such Loan Purchaser(s) shall acquire. Upon
such written notification by Purchaser, the relevant Loan Purchaser shall declare in notarial
form to the acting notary that it shall purchase and acquire the relevant Shareholder Loan or
the Intercompany Financing Loan in lieu of Purchaser. Purchaser shall remain liable for all
its obligations arising under this Agreement, and shall exclusively be entitled and
responsible for exercising all rights and remedies, if any, on behalf of the Loan
Purchaser(s). Sellers hereby accept such declaration of adherence (Vertragsbeitritt) of Loan
Purchaser(s).

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	4.	 	Purchase Price

	4.1	 	The purchase price for (i) the Shares and (ii) the Shareholder Loans to be paid by Purchaser
to Sellers shall be:

	 	4.1.1	 	an amount of:

EUR 11,439,000,000.00

(in words: Euro eleven billion four hundred thirty-nine million)

	 	 	 	(herein “Enterprise Value”);

	 	 	minus

	 	4.1.2	 	a net deduction of EUR 363,851,000.00 (in words: Euro three hundred
sixty-three million eight hundred fifty-one thousand) for net financial debt and
debt-like items of the Consolidated Companies existing as of the Effective Date
(excluding, for the avoidance of doubt, the Shareholder Loans) which are set forth in
Exhibit 4.1.2 (herein “Equity Value Bridge”);

	 	 	equaling an amount of:

EUR 11,075,149,000.00

(in words: Euro eleven billion seventy-five million

one hundred forty-nine thousand)

	 	 	(herein “Equity Value”);
	 
	 	 	plus

	 	4.1.3	 	an amount equivalent to interest on the Share Purchase Price (as defined in
Section 4.2.2 below) as from (and including) 01 July 2007 until (and including) the
date of payment at a rate of (i) five (5) percent p.a. for the period as from (and
including) 01 July 2007 until (and including) ninety (90) days after the Signing Date
and (ii) seven (7) percent p.a. for the period, if any, beginning (and including)
ninety-one (91) days after the Signing Date until (and including) the date of payment
(herein “Share Purchase Price Interest”);

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	 	 	plus

	 	4.1.4	 	an amount equivalent to the interest accrued and not yet paid on the
Shareholder Loans until and including the date of payment (herein “Shareholder Loan
Interest”);

	 	 	(herein “Purchase Price”). Five (5) Business Days prior to the Scheduled Closing Date,
Sellers shall notify Purchaser of the Share Purchase Price Interest and the Shareholder Loan
Interest calculated as per the Scheduled Closing Date.
	 
	4.2	 	The Parties agree that the Purchase Price shall be allocated as follows:

	 	4.2.1	 	an amount of EUR 4,369,607,965.00 (in words: Euro four billion three hundred
sixty-nine million nine hundred and sixty five), equaling the aggregate principal
balance of the Shareholder Loans (herein “Shareholder Loan Purchase Price”) shall be
allocated to the Shareholder Loans, and each the Shareholder Loan Purchase Price and
the Shareholder Loan Interest shall be further allocated to the individual Shareholder
Loans by allocating an amount equaling the principal balance and the interest accrued
and not yet paid for the respective Shareholder Loan to each of the Shareholder Loans;
	 
	 	4.2.2	 	the balance of the Equity Value minus the Shareholder Loan Purchase Price
(herein “Share Purchase Price”) shall be allocated to the Shares, and the Share
Purchase Price as well as the Share Purchase Price Interest shall be further allocated
to the Seller 1 Shares, Seller 2 Shares and Seller 3 Shares on a pro rata basis.

	4.3	 	The Parties agree in relation to the deemed step-up potential realized in connection with the
transfer of the Business to VDO AG under the SAG Contribution Agreement on the following:

	 	4.3.1	 	On the Scheduled Closing Date Purchaser shall pay to Seller 1 an amount equal
to twenty-three (23) percent of the amount by which the Deemed Step-up Potential (as
defined in Section 4.3.2 below) as determined on the basis of the Step-up Agreements
(as defined in Section 4.3.2 below) exceeds the amount of EUR 4,100,000,000.00 (in
words: four billion one hundred million) (herein “Expected Step-up Potential”) or,
alternatively, Seller 1 shall pay to Purchaser an amount equal to twenty-three (23)
percent of the amount by which the Deemed Step-up Potential as determined on the basis
of the Step-up Agreements falls short of the Expected Step-up Potential.
	 
	 	4.3.2	 	"Deemed Step-up Potential” shall mean the amount of the profit realized for
tax purposes by Seller 1 upon the contribution of the Business, other than shares,
under the SAG Contribution Agreement, but regardless of whether and how the assets of
the transferred Business
are subject to depreciation (herein “Contribution Profit”). Such Contribution
Profit shall be initially determined based on identical informal agreements
regarding the allocation of values to the assets contributed under the SAG
Contribution Agreement (i) between Seller 1 and the competent tax auditors of
Seller 1 and (ii) between VDO AG and the competent tax auditors of VDO AG ((i)
and (ii) herein the “Step-up Agreements”).

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	 	4.3.3	 	In the event that the Deemed Step-up Potential (as initially determined on the
basis of the Step-up Agreements) shall change as a result of either

	 	4.3.3.1	 	the filing of the corporate income tax (herein “CIT”) return of Seller 1
for the year 2007 (herein “2007 CIT Return”) (in which case the excess
Deemed Step-up Potential or the Deemed Step-up Potential shortfall shall be
determined on the basis of the Contribution Profit that will underlie the
2007 CIT Return), or
	 
	 	4.3.3.2	 	the receipt of a CIT assessment notice for 2007 by Seller 1 (herein “2007
CIT Assessment Notice”) and subsequently upon any amendment to the 2007 CIT
Assessment Notice, (in which case the excess Deemed Step-up Potential or the
Deemed Step-up Potential shortfall shall be determined on the basis of the
Contribution Profit that underlies the 2007 CIT Assessment Notice or the
2007 CIT Assessment Notice as amended),

	 	 	 	Purchaser or Seller 1, as the case may be, shall make adjustment payments
applying the principles set out under Section 4.3.1 above to Seller 1 or
Purchaser, as the case may be, such adjustment payments to be calculated on the
basis of the Contribution Profit determined in the 2007 CIT Return or 2007 CIT
Assessment Notice, as the case may be.
	 
	 	4.3.4	 	Payments and adjustment payments to be made under this Section 4.3 shall be
due no later than twenty (20) Business Days after the relevant obligor has been
notified of the Step-up Agreement (but in no event prior to the Scheduled Closing
Date), the filing of 2007 CIT Return or the receipt of the relevant 2007 CIT Assessment
Notice, as the case may be, and shall bear interest for the period from (but not
including) the Effective Date until (and including) the date of the respective payment
at a rate of five (5) percent p.a.

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	4.4	 	On the Scheduled Closing Date, Purchaser shall, in accordance with the provisions set out in
Section 6.5 below, pay the Purchase Price free of costs and charges in immediately available
funds into Sellers’ Account (as defined in Section 4.5 below).
	 
	4.5	 	All payments owed by Purchaser to Sellers under this Agreement shall be paid by Purchaser
free of costs and charges in immediately available funds by wire transfer to the following
account of Seller 1 who shall receive the payment also in trust (treuhänderisch) for Seller 2
and Seller 3:

	 	 	 
	Account number:

	 	2037 000 000 
	Bank:

	 	Deutsche Bank Munich
	IBAN:

	 	DE65700700100203700000
	Bank identification code (Bankleitzahl):

	 	700 700 10 

	 	 	(herein “Sellers’ Account”).
	 
	4.6	 	Except as herein provided otherwise, each of the Parties shall pay interest on any amounts
becoming due and payable to the other Party, or Parties, as the case may be, under this
Agreement as from (but not including) the respective due date until (and including) the
respective day of payment at the rate of twelve (12) percent p.a. In case Purchaser is in
default with the payment of any portion of the Purchase Price, for the avoidance of doubt the
foregoing default interest shall be in addition to the interest payable in accordance with
Section 4.1.3 and Section 4.1.4 above.

	5.	 	Termination of Intercompany Financing Arrangements

	5.1	 	The Companies have entered into various cash pooling agreements with Sellers and certain
Affiliates of Sellers denominated in Euro, US Dollars and other currencies (herein
collectively “Cash Pooling Agreements”). Sellers shall procure (bewirken) that (i) the Cash
Pooling Agreements, and (ii) any other inter-company financing arrangements (excluding for the
avoidance of doubt the Shareholder Loans) existing with any of the Companies on the one hand
and any Seller or any Affiliate of Sellers (excluding any of the Companies) (herein “Sellers’
Affiliates”) on the other hand ((i) and (ii) herein collectively “Intercompany Financing
Arrangements”) shall be terminated prior to the Scheduled Closing Date (but without
prejudicing the solvency of the Companies prior to the Scheduled Closing Date) with effect no
later than as of the Scheduled Closing Date.
	 
	5.2	 	As it regards the settlement of the Intercompany Financing Arrangements, the Parties agree as
follows:

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	 	5.2.1	 	Sellers shall procure (bewirken) that the balances outstanding after
termination of the Intercompany Financing Arrangements (including interest accrued
thereon in accordance with the terms of the Intercompany Financing Arrangements) which
are owed by Sellers and Sellers’ Affiliates to the Companies shall be repaid and
settled directly between the parties concerned prior to the Scheduled Closing Date;
	 
	 	5.2.2	 	Sellers shall procure (bewirken) that the balances outstanding after
termination of the Intercompany Financing Arrangements (including interest accrued
thereon in accordance with the terms of the Intercompany Financing Arrangements) which
are owed by the Companies to Sellers and Sellers’ Affiliates shall be repaid and
settled directly between the parties concerned prior to the Scheduled Closing Date
where such repayment is reasonably feasible and legally permissible and that the
remaining balances shall be treated as shareholder loans extended by the relevant
Seller or Sellers’ Affiliate to the relevant Company (such loans herein the
“Intercompany Financing Loans”).

	5.3	 	Seller 1 hereby sells the Intercompany Financing Loans with all rights and obligations
pertaining thereto (including all accrued interest) for a purchase price equalling the
outstanding amounts of such loans in Euro (herein “Intercompany Loan Purchase Price”) and
undertakes to assign or cause the relevant Sellers’ Affiliate to assign (abtreten) the
Intercompany Financing Loans to Purchaser or one or several Loan Purchasers on the Scheduled
Closing Date in accordance with separate assignment agreements substantially in the form as
attached hereto as Exhibit 5.3 (herein “Additional Loan Assignment Agreements”). For
purposes of calculation of the Intercompany Loan Purchase Price, the Exchange Rates (as
defined in Section 24.2 below) applicable two (2) Business Days prior to the Scheduled Closing
Date shall be used for converting any non-EURO denominated amounts into EURO denominated
amounts.
	 
	5.4	 	Five (5) Business Days prior to the Scheduled Closing Date, Sellers shall deliver to
Purchaser an estimate of the aggregate amount of the Intercompany Financing Loans as per the
Closing Date (herein “Preliminary Intercompany Financing Loans”). On the Scheduled Closing
Date, Purchaser shall make a preliminary payment on the Intercompany Loan Purchase Price in an
amount equal to the amount of the Preliminary Intercompany Financing Loans (herein
“Preliminary Intercompany Loan Purchase Price”) free of costs and charges in immediately
available funds by wire transfer into Sellers’ Account in accordance with Section 6.5 below.

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	5.5	 	Within ten (10) Business Days after the Closing Date, Sellers shall determine the final
amount of the Intercompany Financing Loans (herein “Final Intercompany Debt Balance”) and the
final amount of the Intercompany Loan Pur
	 
	 	 	chase Price (herein “Final Intercompany Loan Purchase Price”) and shall deliver a statement
to such effect to Purchaser. To the extent Purchaser approves of the Final Intercompany Debt
Balance and the Final Intercompany Loan Purchase Price or to the extent Purchaser does not
object to it within thirty (30) days after delivery thereof, the Final Intercompany Debt
Balance and the Final Intercompany Loan Purchase Price shall become binding as between the
Parties. If Purchaser objects to the Final Intercompany Debt Balance and the Final
Intercompany Loan Purchase Price within the aforesaid thirty (30) days’ period and Sellers
and Purchaser can not agree on the Final Intercompany Debt Balance and the Final
Intercompany Loan Purchase Price within thirty (30) days following the objections of
Purchaser, each of Sellers and Purchaser shall be entitled to request the “Institut der
Wirtschaftsprüfer in Deutschland e.V.”, Düsseldorf, to appoint an auditor to act as an
arbitrator (Schiedsgutachter) (herein “Neutral Auditor”) to determine the Final Intercompany
Debt Balance and the Final Intercompany Loan Purchase Price, if and to the extent such
positions are in dispute between Sellers and Purchaser. The Neutral Auditor shall decide
only on the items in dispute between the Parties and shall give Sellers and Purchaser
adequate opportunity to present their views in writing and at a hearing or hearings to be
held in the presence of Sellers and Purchaser and their advisors. The final decision of the
Neutral Auditor must not fall beyond or outside the position taken by the Parties. The
Neutral Auditor shall give reasons for its decision on the specific items in dispute between
Sellers and Purchaser. The costs and expenses incurred by the Neutral Auditor shall be borne
equally by Sellers on the one hand and Purchaser on the other hand. The Final Intercompany
Debt Balance and the Final Intercompany Loan Purchase Price as determined by the Neutral
Auditor shall be final and binding on the Parties subject to Section 319 German Civil Code
(BGB).
	5.6	 	Upon the Final Intercompany Debt Balance and the Final Intercompany Loan Purchase Price
becoming binding in accordance with the foregoing, any deviation between the Preliminary
Intercompany Loan Purchase Price and the Final Intercompany Loan Purchase Price (herein
“Adjustment Amount”) shall be settled as follows:

	 	5.6.1	 	In the event that an Adjustment Amount shall be in favor of Sellers, Purchaser
shall pay such Adjustment Amount plus interest thereon at a rate of five (5) percent
p.a. as from (but not including) the Closing Date until (and including) the day of
payment, by wire transfer into Sellers’ Account.

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	 	5.6.2	 	In the event that an Adjustment Amount shall be in favor of Companies, Seller
1 shall pay to VDO AG (on behalf of each of the Companies concerned) such Adjustment
Amount plus interest thereon at a rate of five (5) percent p.a. as from (but not
including) the Closing
Date until (and including) the day of payment, by wire transfer into an account
of VDO AG, such account to be notified to Seller 1 at least three (3) Business
Days prior to the due date (Fälligkeitstag).

	 	 	Any Adjustment Amount shall be due and payable five (5) Business Days after the day on which
the debtor of the respective amount has been notified thereof in writing.
	 
	5.7	 	Sellers shall procure (bewirken) that all foreign exchange forward contracts existing between
the Companies and Sellers or Sellers’ Affiliates (herein “Hedges”) shall be terminated two (2)
Business Days prior to the Scheduled Closing Date on at arm’s length basis using the Exchange
Rates as of two (2) Business Days prior to the Scheduled Closing Date (herein “Hedge Market
Value”). Sellers shall provide Purchaser (i) seven (7) Business Days prior to the Scheduled
Closing Date with a list of all Hedges to be terminated and (ii) three (3) Business Days after
the Closing Date with a list of the individual values of all Hedges terminated including the
swap points and currency spot rates used for the termination. In the event that the Hedge
Market Value as of the Closing Date is negative from the perspective of the Companies,
Purchaser shall, for the account of the Companies, pay to Sellers an amount equal to such
negative Hedge Market Value into Sellers’ Account within ten (10) Business Days after the
Closing Date. In the event that the Hedge Market Value as of the Closing Date is positive from
the perspective of the Companies, Sellers shall pay to VDO AG (on behalf of each of the
Companies concerned) into an account of VDO AG (such account to be notified to Seller 1 at
least three (3) Business Days prior to the due date (Fälligkeitstag)) an amount equal to such
positive Hedge Market Value within ten (10) Business Days after the Closing Date. In the event
that the Parties can not agree on the Hedge Market Value within ten (10) Business Days after
the Closing Date, the dispute resolution procedure set forth in Section 5.5 above shall apply
mutatis mutandis.

	C.	 	CLOSING CONDITIONS AND CLOSING

	6.	 	Closing Conditions and Closing

	6.1	 	This Agreement shall be closed (erfüllt) pursuant to Section 6.5 below only if

	          6.1.1	 	the merger control clearances under the applicable merger control rules of:

	                    6.1.1.1	 	the European Community;
	 

	                    6.1.1.2	 	the United States of America;

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	                   6.1.1.3	 	Canada; and
	 
	                   6.1.1.4	 	the Republic of Korea;

	 	 	 	shall have been obtained or shall be deemed to be obtained, e.g. because of the
lapse of waiting periods or because jurisdiction has been declined (herein
“Antitrust Clearances”); and
	 
	 	6.1.2	 	the Capital Increases shall have been registered with the commercial register
(Handelsregister) of VDO AG and the Section 52 Registration with the commercial
register (Handelsregister) of VDO AG shall have occurred and the Share Certificates
shall have been issued to Sellers in accordance with Section 1.5 above;

	 	 	(herein collectively “Closing Conditions”).
	 
	6.2	 	Purchaser shall be responsible for obtaining the Antitrust Clearances and shall take all
actions necessary to prepare and to make the filings for the Antitrust Clearances (except for
the filing with the European Commission) within twelve (12) Business Days after the Signing
Date and to furnish all information required in connection therewith. As far as the merger
filing with the European Commission is concerned, Purchaser shall use its best efforts (i) to
file the draft Form CO on or before 04 September 2007 and (ii) to file the final Form CO at
the earliest date acceptable to the European Commission. Sellers undertake to cooperate, and
shall use best efforts to cause the Companies to cooperate, with Purchaser in providing all
reasonably required information concerning the Business and to assist in such filings and the
merger clearance proceedings without undue delay. Further, the Parties agree on the following:

	 	6.2.1	 	Purchaser shall give Sellers reasonable advance notice of any notification,
submission or other communication which it proposes to make or submit to any antitrust
authority and provide Sellers with copies of such draft notification, submission or
correspondence and any supporting documentation or information reasonably requested by
Sellers. Purchaser undertakes to take any comments of Sellers in relation to any such
notification, submission or communication in due consideration. Any such notification,
submission or communication shall require the prior consent of Sellers, such consent
not to be unreasonably withheld. Purchaser further agrees to keep Sellers fully
informed as to the progress of any notification made in order to obtain the Antitrust
Clearances. Sellers and their advisers shall be entitled to attend all meetings with
any antitrust authority or other persons or bodies
(unless prohibited by the authority or such other persons) and make oral
submissions at such meetings to the extent necessary.

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	 	6.2.2	 	Purchaser shall undertake (or cause to be undertaken) any and all steps
necessary to avoid or eliminate each and every impediment (including any add-on
acquisitions) under any antitrust, competition or trade regulation law that may be
asserted by any antitrust or other governmental party so as to enable the Parties to
close the transactions as contemplated under this Agreement including committing to and
effecting as promptly as practicable, the sale, divestiture or disposition of such
assets, properties or businesses of Purchaser and/or its Affiliates and/or the
Companies, and the conclusion of such other arrangements, as are necessary or advisable
to avoid the effect of materially delaying or preventing the consummation of the
transactions contemplated under this Agreement.

	6.3	 	The Parties shall notify each other in writing without undue delay (i) of any of the Closing
Conditions having been fulfilled and/or (ii) the definitive (endgültige) failure of any of the
Closing Conditions to be fulfilled.
	 
	6.4	 	If not all of the Closing Conditions shall have been fulfilled within twelve (12) months
after the Signing Date,

	 	6.4.1	 	Sellers (jointly but not individually) shall, until Closing (as defined in
Section 6.5 below) shall have occurred, be entitled to withdraw from (zurücktreten)
this Agreement if any of the Closing Conditions contained in Section 6.1.1 above has
not been fulfilled or duly waived; and
	 
	 	6.4.2	 	Purchaser and Guarantor (jointly but not individually) shall, until Closing
shall have occurred, be entitled to withdraw from (zurücktreten) this Agreement if the
Closing Condition contained in Section 6.1.2 above has not been fulfilled or duly
waived;

	 	 	in each case, with effect for all Parties by written notice to the other Party/Parties. In
the event of a withdrawal, none of the Parties shall have any obligation or incur any
liability towards the other Parties except that (i) any obligation of Purchaser to pay the
Contractual Penalty or further damages, if any, pursuant to Section 6.6 below, (ii) any
liability of any Party for willful behaviour, and (iii) the provisions in Sections 17
through 26 below shall in each case survive and remain in full force and effect.

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	6.5	 	The closing of the transactions contemplated under this Agreement (herein “Closing”) shall
occur on the Scheduled Closing Date. On the Scheduled Closing Date, the Parties or their respective duly authorized representatives shall convene at
the offices of Hengeler Mueller, Munich, or at such place as agreed between the Parties and
the following events (herein “Closing Events”) shall take place simultaneously (Zug-um-Zug):

	 	6.5.1	 	Payment by Purchaser of the Purchase Price into Sellers’ Account;
	 
	 	6.5.2	 	Payment by Purchaser of the Preliminary Intercompany Loan Purchase Price into
Sellers’ Account;
	 
	 	6.5.3	 	Transfer of title (Übereignung) to the Shares and delivery (Übergabe) of the
Share Certificates by Sellers to Purchaser and registration of Purchaser in the share
register (Aktienregister) of VDO AG;
	 
	 	6.5.4	 	Execution of both the Loan Assignment Agreement 1 between Seller 1 and
Purchaser or one of the Loan Purchasers;
	 
	 	6.5.5	 	Execution of the Loan Assignment Agreement 2 between Seller 2 and Purchaser or
one of the Loan Purchasers;
	 
	 	6.5.6	 	Execution of the Additional Loan Assignment Agreements between Seller 1 or the
relevant Sellers’ Affiliates on the one hand and Purchaser or one or several Loan
Purchasers on the other hand;
	 
	 	6.5.7	 	Delivery by Sellers of resignation letters signed by the representatives of
Sellers and Sellers’ Affiliates incumbent on supervisory or advisory boards of the
Companies as identified in Exhibit 6.5.7, such resignations becoming effective
as of the earliest legally possible withdrawal date; and
	 
	 	6.5.8	 	Execution of a closing protocol by Sellers and Purchaser confirming the due
fulfillment or waiver, as the case may be, of all Closing Conditions and the due
performance or waiver, as the case may be, of all Closing Events.

	6.6	 	Purchaser shall pay to Sellers a contractual penalty (Vertragsstrafe) in the amount of EUR
100,000,000.00 (in words: Euro one hundred million) (herein “Contractual Penalty”) in the
event that:

	 	6.6.1	 	Sellers shall have effectively withdrawn (sind wirksam zurückgetreten) from
this Agreement pursuant to Section 6.4 above because not all of the Antitrust
Clearances have been obtained within the twelve (12) months’ period after the Signing
Date; or

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	 	6.6.2	 	Purchaser has not, at the latest ten (10) Business Days following the
Scheduled Closing Date, fulfilled all Closing Events (or the respective parts thereof)
to be fulfilled by Purchaser on the Scheduled Closing Date in accordance with Section
6.5 above.

	 	 	The Contractual Penalty constitutes Sellers’ minimum damage (Mindestschaden) and shall not
prejudice Sellers in whatsoever form to claim further damages against Purchaser incurred in
connection with this Agreement or the transactions contemplated hereunder, provided that the
aggregate liability of Purchaser and Guarantor for such damages (including the Contractual
Penalty) shall not exceed EUR 500,000,000.00 (in words: Euro five hundred million).

	D.	 	GUARANTEES AND REMEDIES

	7.	 	Sellers’ Guarantees

	7.1	 	Sellers hereby guarantee as joint and several debtors (Gesamtschuldner), subject to any
limitations contained in this Agreement, in particular, but not limited to, the remedies set
out in Section 9 below, the Time Limitations (as defined in Section 14.1 below), the exclusion
of De Minimis Claims (as defined in Section 14.3 below), the Deductible (as defined in Section
14.3 below) and the Liability Cap (as defined in Section 14.4 below) by way of an independent
guarantee pursuant to Section 311 (1) German Civil Code (BGB) that the statements set forth
hereinafter are true and correct as of the Signing Date or as of any other date explicitly
referred to below (herein collectively “Sellers’ Guarantees”):

	 	7.1.1	 	Enforceability, Capacity. This Agreement constitutes the legal, valid, and
binding obligation of Sellers, enforceable under applicable law against each Seller in
accordance with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to
or affecting the rights of creditors. As per the Signing Date and the Closing Date,
each Seller has the absolute and unrestricted right, power, authority and capacity to
execute this Agreement and to perform its obligations hereunder. The execution of this
Agreement and the performance of the obligations hereunder have been duly authorized
and approved by all necessary corporate action of Sellers. Except for the Antitrust
Clearances, the execution and performance of this Agreement by Sellers does not require
any notice to any person or any consent or governmental authorization.
	 
	 	7.1.2	 	Existence of the Companies. As per the Closing Date, each of the Companies is
duly incorporated and validly existing under the laws of
its jurisdiction and has all requisite corporate power and authority to own its
respective properties and assets.

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	 	7.1.3	 	Bankruptcy or Judicial Composition Proceedings. No bankruptcy or judicial
composition proceedings concerning any Consolidated Company are pending (anhängig) or,
to the Best Knowledge of Sellers (as defined in Section 7.3 below), have been applied
for. To the Best Knowledge of Sellers, no circumstances exist which would require the
application for any such bankruptcy or judicial composition proceedings concerning any
Consolidated Company except as disclosed in Schedule 7.1.3. To the Best
Knowledge of Sellers, no circumstances exist pursuant to any applicable bankruptcy laws
which could justify the voidance of this Agreement.
	 
	 	7.1.4	 	Ownership of the Shares. As per the Closing Date, each Seller is the sole and
unrestricted owner of the Shares sold by it. As of the Closing Date, the Shares (i)
have been duly authorized and validly issued, (ii) are fully paid up, non-assessable
and have not been repaid and (iii) have not been pledged, assigned, charged or used as
a security to or by a third party and are free and clear of any other third party
rights. Except as set forth in Section 1 above, as per the Signing Date and the Closing
Date there are no pending applications for registration and/or resolutions of the
shareholder’s meeting or the supervisory board requiring such registration which have
been passed but not yet registered. VDO AG has not issued any bonds
(Schuldverschreibungen) providing for conversion rights (Wandlungsrechte) or
subscription rights (Bezugsrechte) or options (Optionsrechte) under option schemes for
            shares in VDO AG to any third parties.
	 
	 	7.1.5	 	VDO Subsidiaries. Except as disclosed in Schedule 7.1.5, as per the
Closing Date the Subsidiary Shares (i) are, upon the registration of the Capital
Increases and the occurrence of the Section 52 Registration, owned by the Companies as
set out in Exhibit 1.7.1 and Exhibit 1.7.3 respectively, (ii) have been duly authorized
and validly issued, (iii) are fully paid up, non-assessable and have not been repaid
and (iv) have not been pledged, assigned, charged or used as a security to or by a
third party and are free and clear of any other third party rights with in rem effect
(dingliche Rechte).
	 
	 	7.1.6	 	Majority Participations, Equity Interests. Except as disclosed in Schedule
7.1.6 or Exhibit 1.7.1, as per the Closing Date the Consolidated Companies have no
majority participations and do not hold any equity interest in another entity other
than a VDO Subsidiary which involves direct payment obligations (Nachschusspflichten)
of the Consolidated Companies, except, in each case, where such payment obligations would
not result in a Material Adverse Effect.

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	 	7.1.7	 	Enterprise Agreements. Except as disclosed in Schedule 7.1.7, the
Consolidated Companies are not party to any enterprise agreements with any entity other
than a Consolidated Company within the meaning of Sections 291 and 292 German Stock
Corporation Act (AktG) or comparable profit sharing or pooling agreements or any such
arrangements under the laws of other jurisdictions.
	 
	 	7.1.8	 	Material Intellectual Property Rights. Except as disclosed in Schedule
7.1.8, to the Best Knowledge of Sellers and subject to the scope of the transfer of
patents, trademarks, utility models, design rights, copyrights, software, domains and
other intellectual property rights in accordance with the terms and conditions of the
Contribution Agreements, the Consolidated Companies own, or lawfully use, all such
patents, trademarks, utility models, design rights, copyrights, software, domains and
other intellectual property rights which are necessary for carrying out the Business in
substantially the same fashion and manner as conducted on the Signing Date and the lack
of which or the restriction to use would, in each case, result in a Material Adverse
Effect (herein collectively “Material Intellectual Property Rights”). Except as
disclosed in Schedule 7.1.8 (i) the Material Intellectual Property Rights which are
owned by the Consolidated Companies are not subject to any in rem (dinglich) security
interest, mortgage, charge or lien (excluding, for the avoidance of doubt, any
licenses), and (ii) to the Best Knowledge of Sellers, the Material Intellectual
Property Rights which are owned by the Consolidated Companies are not subject to any
opposition or nullification claim or any similar challenge by any third party, except,
in each case, where the incorrectness of any of the statements in (i) or (ii) would not
result in a Material Adverse Effect.
	 
	 	7.1.9	 	Material Assets. Subject to the scope of the transfer of the tangible fixed
assets (materielles Anlagevermögen) in accordance with the terms and conditions of the
Contribution Agreements, the Consolidated Companies own or hold lawful possession of
all tangible fixed assets (materielles Anlagevermögen) which are necessary for carrying
out the Business in substantially the same fashion and manner as on the Signing Date
and the lack of which would, in each case, result in a Material Adverse Effect (herein
collectively “Material Assets”). The Material Assets are not charged with any rights of
third parties, including the transfer for security purposes (Sicherungsübereignungen),
except for (i) customary (handelsübliche) or statutory rights of retention of title (Eigentumsvorbehalte), liens, pledges or other security rights in
favor of suppliers, mechanics, workers, landlords, carriers and the like for
supplies and services made or delivered for the benefit of the Business, (ii) any
other security rights granted to banks and other financial institutions in
respect of debt reflected in the Effective Date Accounts (as defined in Section
7.1.15 below), (iii) statutory security rights in favour of tax authorities or
other governmental entities, and (iv) encumbrances (Belastungen) other than
rights under (i) through (iii) above which would, in each case, not result in a
Material Adverse Effect.

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	 	7.1.10	 	Litigation and Product Liability. To the Best Knowledge of Sellers and except as
disclosed in Schedule 7.1.10, (i) neither the Consolidated Companies nor
Sellers or any of Sellers’ Affiliates with respect to the Business are involved as
defendant in any pending court or administrative proceedings, including arbitration
proceedings, having a litigation value (Streitwert) in excess of EUR 3,000,000.00 (in
words: Euro three million) and (ii) no such proceedings have been threatened in writing
except for warranty claims or product liability claims in the ordinary course of
business. To the Best Knowledge of Sellers and except as disclosed in Schedule
7.1.10, there are no product liability claims or product recalls for safety reasons
pending or threatened in writing against any Consolidated Company (or Sellers or any of
Sellers’ Affiliates with respect to the Business) in connection with any products
manufactured and/or sold by the Business except where such product liability claims or
product recalls would, in each case, not result in a Material Adverse Effect.
	 
	 	7.1.11	 	Permits. To the Best Knowledge of Sellers and except as disclosed in Schedule
7.1.11, the Consolidated Companies are, subject to the scope of the transfer of
governmental approvals and other public licenses and permits in accordance with the
terms and conditions of the Contribution Agreements, in possession of all governmental
approvals and other public licenses and permits which are necessary to operate the
Business in substantially the same fashion or manner as conducted on the Signing Date
and the lack of which would, in each case, result in a Material Adverse Effect (herein
collectively “Permits”). To the Best Knowledge of Sellers, no event has occurred as a
result of which (i) any of the Permits may be revoked, suspended, annulled, or
materially modified or restricted or (ii) conditions may be imposed to the Permits,
except, in each case, for revocations, suspensions, annulations, modifications,
restrictions or conditions which would, in each case, not result in a Material Adverse
Effect.

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	 	7.1.12	 	Compliance with Laws. To the Best Knowledge of Sellers and except as disclosed in
Schedule 7.1.12, the Consolidated Companies conduct their Business in all
material respects in compliance with all applicable laws and Permits except where the
failure to so comply would not, in each case, result in a Material Adverse Effect.
	 
	 	7.1.13	 	Conduct of Business. To the Best Knowledge of Sellers and except for transactions
described or contemplated under this Agreement or disclosed in Schedule 7.1.13,
during the period from the Effective Date until the Signing Date, the Consolidated
Companies have continued to conduct their respective business operations in all
material respects in the ordinary course of business in a manner consistent with past
practice, except where the failure to do so would not, in each case, result in a
Material Adverse Effect.
	 
	 	7.1.14	 	Collective Labor Agreements. To the Best Knowledge of Sellers, Schedule
7.1.14 contains a true and complete list of all material collective labor
agreements (i.e. agreements which are entered into between a Consolidated Company and a
group of employees or a representative body of employees of a Consolidated Company,
unless such agreements repeat mandatory statutory law only) which contain limitations
for such Consolidated Company to terminate employment agreements for operational
reasons (betriebsbedingte Kündigungen).
	 
	 	7.1.15	 	Effective Date Accounts. The combined interim financial statements (kombinierter
Zwischenabschluss) of the Consolidated Companies as of the Effective Date, comprising a
balance sheet (Bilanz), an income statement (Gewinn- und Verlustrechnung), a statement
of changes in equity (Veränderungen des Eigenkapitals), a statement of cash flows
(Kapitalflussrechnung) and certain selected notes (ausgewählte Anhangangaben) for the
period starting 01 October 2006 until the Effective Date (herein collectively
“Effective Date Accounts”) have been prepared by the management of the Consolidated
Companies and reviewed by KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft in accordance with the IDW PS 900 standard, it being
understood that (i) the retroactive accounting of the assets received by VDO AG under
the SAG Contribution Agreement at fair market value for tax purposes and (ii) the
recalculation of the Pension Deficit Amount (as defined in Section 12.2 below) are not
reflected in the Effective Date Accounts. Nothing has come to the attention
of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft which would justify the assumption that the Effective
Date Accounts have, in any material respect, not
been prepared in accordance with International Financial Reporting Standards.

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	 	7.1.16	 	Year-End Accounts. The audited combined financial statements (geprüfter kombinierter
Abschluss) of the Consolidated Companies for the financial year ended 30 September 2006
(including comparable period (Vergleichsperiode) 2005), comprising a combined balance
sheet (kombinierte Bilanz), a combined income statement (kombinierte Gewinn- und
Verlustrechnung), a combined statement of changes in equity (Aufstellung der im
kombinierten Eigenkapital erfassten Erträge und Aufwendungen), a combined statement of
cash flows (kombinierte Kapitalflussrechnung) and notes (Anhang) (herein “Year-End
Accounts”) have been prepared by the management of the Consolidated Companies in
accordance with the International Financial Reporting Standards consistently applied
and certified by an unqualified audit opinion by KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, and present, based on the facts
known at the time of preparation and as of the aforementioned balance sheet date
(Bilanzstichtag), a true and fair view (ein den tatsächlichen Verhältnissen
entsprechendes Bild) of the assets, liabilities and earnings situation of the
Consolidated Companies.
	 
	 	7.1.17	 	Environmental Liabilities. To the Best Knowledge of Sellers and except as disclosed
in Schedule 7.1.17, there exists no Environmental Contamination (as defined
below) on the sites owned or operated by the Consolidated Companies which would, in
each case, result in a Material Adverse Effect. “Environmental Contamination” means
pollutants, contaminants or other dangerous substances as defined in Art. 2 (2) of the
European Community Council Directive 67/548 EEC (as amended until the date hereof)
which (i) are present in the soil, in the surface water or in the ground water, (ii)
pose an imminent endangerment to human life, public health or the environment and (iii)
are mandatorily required to be remedied as of the Signing Date pursuant to any
environmental laws as applied and enforced as per the Signing Date at the respective
location.
	 
	 	7.1.18	 	No Profit Distribution or Other Payments. During the period from the Effective Date
until the Signing Date, none of the Companies has paid any dividend to Sellers or any
Sellers’ Affiliates except for any amounts recorded as “dividends declared but unpaid”
in the Effective Date Accounts, or made any other cash payments to Sellers or any of
Sellers’ Affiliates, except for (i) payments under trade contracts (Verkehrsgeschäfte)
between the Companies on the one hand and Sellers or any of Sellers’ Affiliates on the
other hand, (ii) payments
made under or in connection with the Intercompany Financing Arrangements or the
Hedges and (iii) interest payments under the Shareholder Loans in accordance with
the terms of the respective loan agreements.

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	 	7.1.19	 	IT Systems. To the Best Knowledge of Sellers and except as disclosed in Schedule
7.1.19, the IT systems (including without limitation hardware, software and network
components) used by the Consolidated Companies as of the Signing Date are owned by, or
properly licensed, leased or otherwise supplied to, the Consolidated Companies and
substantially adequate for the operational and business requirements of the
Consolidated Companies as of the Signing Date, except, in each case, where the
incorrectness of any of the foregoing statements would not result in a Material Adverse
Effect.
	 
	 	7.1.20	 	Shareholder Loans. As per the Closing Date, each of the Shareholder Loans constitutes
a valid claim in the amount of its principal balance as set forth in Section 1.3.1 and
1.3.2 above of the respective Seller against VDO AG and the aggregate principal balance
outstanding under the Shareholder Loans as of Closing Date equals the Shareholder Loan
Purchase Price.
	 
	 	7.1.21	 	Non-Consolidated Companies. As per the Closing Date none of the Companies which are
not Consolidated Companies has increased its net financial debt (i) outside of the
ordinary course of business or (ii) by more than EUR 15,000,000.00 (in words: Euro
fifteen million) in comparison to the average net financial debt shown in its
respective year-end accounts of the two (2) preceding business years, except for any
financial debt owed to another Company.

	7.2	 	All Schedules referred to in Section 7.1 are collectively referred to as the “Disclosure
Schedules”. Sellers do not give or assume any guarantees other than those set forth in Section
7.1 above and none of the Sellers’ Guarantees shall be construed as a guarantee or
representation with respect to the quality of the purchase object (Kaufgegenstand) within the
meaning of Sections 276 (1), 443 German Civil Code (BGB) (Garantie für die Beschaffenheit der
Sache). The Parties agree that if any disclosure of events or documents made in the Disclosure
Schedules is below any materiality threshold provided for such disclosure requirement, or
contains additional information, such disclosure shall not be used to construe the extent of
the required disclosure (including any standard of materiality) pursuant to the relevant
Sellers’ Guarantee.
	 
	7.3	 	For the purpose of this Agreement, “Best Knowledge of Sellers” shall mean the actual
knowledge (positive Kenntnis) of Messrs. Wolfgang Dehen, Klaus Egger,
Helmut Matschi and Reinhard Pinzer (herein “Management Team”) which they had as of the
Signing Date in relation to the Sellers’ Guarantees. The Best Knowledge of the Management
Team includes the knowledge which the Management Team obtained after they have carried out
prior to the Signing Date a due enquiry process involving the individuals listed in
Exhibit 7.3 with regard to the specific Sellers’ Guarantees identified in
Exhibit 7.3.

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	7.4	 	For the purpose of this Agreement, “Material Adverse Effect” shall mean any change or effect
that results, in each single event, in Losses (as defined in Section 9.1 below) of the
Consolidated Companies in excess of EUR 30,000,000.00 (in words: Euro thirty million) it being
understood that a series of events based on the same factual origin (gleicher
Lebenssachverhalt) shall constitute a single event.

	8.	 	Guarantees of Purchaser and Guarantor

	 	 	Each of Purchaser and Guarantor guarantees (as joint and several debtors) (Gesamtschuldner)
as of the Signing Date:
	 
	8.1	 	Enforceability, No Conflict. Purchaser is a limited liability company duly organized and
validly existing under the laws of Germany registered with the commercial register
(Handelsregister) maintained at the lower court (Amtsgericht) of Hanover under HRB 59424.
Guarantor is a stock corporation duly organized and validly existing under the laws of Germany
registered with the commercial register (Handelsregister) maintained at the lower court
(Amtsgericht) of Hanover under HRB 3527. This Agreement constitutes the legal, valid and
binding obligation of Purchaser and Guarantor, enforceable against Purchaser and Guarantor in
accordance with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally. Purchaser and Guarantor have the absolute and unrestricted
right, power, authority, and capacity to execute this Agreement and to perform their
obligations under this Agreement, which actions have been duly authorized and approved by all
necessary corporate action of Purchaser and Guarantor. Except for the Antitrust Clearances,
Purchaser and Guarantor are not required to give any notice to any person or obtain any
consent or governmental authorization in connection with the execution of this Agreement by
Purchaser and Guarantor. Neither the execution of this Agreement nor the consummation or
performance of any of the transactions contemplated thereby will directly or indirectly
violate the certificate of incorporation or by-laws or any contract of Purchaser and Guarantor
or violate any applicable law, rule, regulation, judgment, injunction, order or decree in any
jurisdiction concerned under this Agreement.

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	8.2	 	Litigation. There is no action, suit, investigation or proceeding pending against, or to the
knowledge of Purchaser and Guarantor, as of the Signing Date, threatened against or affecting
Purchaser and Guarantor before any court or arbitrator or governmental body, agency or
official body which in any manner challenges or seeks to prevent, enjoin, alter or materially
delay the transactions contemplated under this Agreement.
	 
	8.3	 	Financial Capability. As of the Closing Date, Purchaser will have sufficient immediately
available funds or binding and unconditional and irrevocable financing commitments to pay the
Purchase Price and the Preliminary Intercompany Loan Purchase Price.
	 
	8.4	 	Finders’ Fees. Purchaser and Guarantor do not have any obligation or liability to pay any
fees or commissions to any broker, finder or agent with respect to the transaction
contemplated under this Agreement for which Sellers could become wholly or partly liable.
	 
	8.5	 	Acquisition at Own Account. Purchaser is acquiring the Business for investment at Purchaser’s
own account, and neither as a nominee nor an agent nor with a view to the resale or
distribution of any material part thereof (i.e. a part of the Business with a fair market
value exceeding EUR 500,000,000.00 (in words: Euro five hundred million) in the individual
case) after the Closing Date, and Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the Business to a third party. Purchaser has not
entered, and has no present intention to enter, into any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such person or to any
third person, with respect to the Business or any part thereof.

	9.	 	Remedies

	9.1	 	In the event of any breach or non-fulfillment by Sellers of any of Sellers’ Guarantees or
Sellers’ Covenants (as defined in Section 11.11 below) contained in this Agreement (herein
“Purchaser Claim”), Sellers shall be liable for putting Purchaser, or, if in the best interest
of the Companies, the respective Company into the same position that it would have been in if
the Sellers’ Guarantees or Sellers’ Covenants had been correct or had not been breached
(Naturalrestitution), or, at the election of Purchaser, to pay damages for non-performance
(kleiner Schadenersatz). For purposes of determining the liability of Sellers, all losses
incurred by the respective Company or Purchaser in accordance with Section 249 et seq. German
Civil Code (BGB), excluding however (i) any potential or actual reduction (Minderung) in value
of the Companies beyond the actual damage incurred, (ii) any consequential damages
(Folgeschäden) unless such consequential damages are specifically covered by the purpose and
intent
of the respective Sellers’ Guarantee or Sellers’ Covenant (vom Sinn und Zweck der
betreffenden Garantie oder Verkäuferverpflichtung spezifisch erfasst), (iii) any lost
profits (entgangener Gewinn), (iv) any frustrated expenses (vergebliche Aufwendungen) or (v)
any incidental or internal costs and expenses incurred by the Companies or Purchaser, shall
be taken into account, it being understood that all relevant losses shall be calculated on a
Euro-for-Euro basis (herein “Losses”).

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	9.2	 	If and to the extent damages are paid to any of the Companies, such payments shall, to the
extent legally permissible, be construed and deemed as contributions (Einlagen) made by
Purchaser into the respective Company and shall be treated as a reduction of the Purchase
Price as between the Parties. In no event Sellers shall owe to Purchaser a gross-up for Taxes
(as defined in Section 10.1 below) falling due on a Purchaser Claim compensation. If and to
the extent a Purchaser Claim relates to a Company in which Sellers, immediately prior to the
Closing, directly or indirectly hold less than one hundred (100) percent of the total equity,
the amount of Losses to be paid by Sellers hereunder shall be the total amount of Losses
incurred by the respective Company multiplied by the direct or indirect shareholding
percentage of Sellers immediately prior to the Closing.
	 
	9.3	 	In the event of an alleged Purchaser Claim, Purchaser will give Sellers written notice of the
alleged breach or non-fulfillment of the respective Sellers’ Guarantee or Sellers’ Covenant,
as the case may be, with such notice stating the nature thereof and the amount involved to the
extent that such amount has been determined at the time when such notice is given, without
undue delay (unverzüglich) after discovery of such breach or non-fulfillment. Without
prejudice to the validity of the Purchaser Claim or alleged claim in question, Purchaser shall
allow, and shall cause the Companies to allow, Sellers and their accountants and professional
advisors to investigate the matter or circumstance alleged to give rise to such Purchaser
Claim, and whether and to what extent any amount is payable in respect of such Purchaser Claim
and, for such purpose, Purchaser shall give, and shall cause the Companies to give, subject to
them being paid their reasonable out-of-pocket costs and expenses, such information and
assistance reasonably necessary to assess the Purchaser Claim, including access to Purchaser’s
and the Companies’ premises and personnel and the right to examine and copy or photograph any
assets, accounts, documents and records, as Sellers or their accountants or professional
advisors may reasonably request in a manner which reasonably avoids the risk of a breach by
Purchaser or any of its Affiliates (including the Companies) of any confidentiality
obligation, provided that any such information requests and any exchange of information shall
take place during regular business hours and under reasonable circumstances without
interference with the business operations of the Guarantor and its Affiliates (including the
Companies) and in compliance with applicable
laws. Sellers agree that all information obtained under this Section 9.3 shall be treated as
Confidential Information (as defined in Section 18.2 below). This provision shall also apply
in case court or arbitration proceedings are pending between the Parties.

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	9.4	 	Sellers shall not be liable for, and Purchaser shall not be entitled to bring, any Purchaser
Claim under or in connection with this Agreement, if and to the extent that:

	 	9.4.1	 	the matter to which the Purchaser Claim relates has been taken into account
(i) in the Effective Date Accounts by way of a provision (Rückstellung) reasonably
associated with the matter in question, liability (Verbindlichkeit), exceptional
depreciation (außerplanmäßige Abschreibung) or depreciation to reflect lower market
values (Abschreibung auf den niedrigeren beizulegenden Wert) or (ii) in the Equity
Value Bridge;
	 
	 	9.4.2	 	the amount of the Purchaser Claim is recovered or could have been reasonably
recovered from a third party or under an insurance policy in force on the Effective
Date;
	 
	 	9.4.3	 	the payment or settlement of any item giving rise to a Purchaser Claim results
in a Tax Benefit (as defined in Section 10.2.2 below) to the Companies or Purchaser;
	 
	 	9.4.4	 	Purchaser or any of the Companies has, after the Closing Date, participated in
causing (mitverursacht) such Purchaser Claim within the meaning of Section 254 (1)
German Civil Code (BGB) or has failed to comply with its duty to mitigate damages
pursuant to Section 254 (2) German Civil Code (BGB);
	 
	 	9.4.5	 	the matter to which the Purchaser Claim relates was known by Purchaser,
Guarantor or their representatives or professional advisors as of the Signing Date;
without limiting the generality of the foregoing, Purchaser shall be deemed to have
knowledge of all matters disclosed in:

	 	9.4.5.1	 	any information received by Purchaser in writing or text form (Textform)
within the meaning of Section 126b German Civil Code (BGB) or provided to
Purchaser in electronic form or by other media in connection with the
transactions contemplated under this Agreement, in particular (i) any
presentation materials delivered (ausgehändigt) to the representatives of
Purchaser or Guarantor at any management
presentation or expert meeting and (ii) any answers given by Sellers
or their representatives to any questions raised by Purchaser, its
Affiliates, representatives, officers, employees or professional
advisors;

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	 	  9.4.5.2	 	the documents contained in the data room (herein “Data Room”), an
electronic copy of which will be set aside and preserved by the acting
notary for a period of five (5) years after the Closing Date in accordance
with a joint instruction letter attached hereto as Exhibit 9.4.5.2,
provided that the relevant information was disclosed therein in a manner and
in such detail to enable Purchaser, Guarantor or their representatives and
professional advisors to reasonably appreciate the significance of the
matter disclosed; or
	 
	 	  9.4.5.3	 	the Disclosure Schedules or elsewhere in this Agreement;

	 	9.4.6	 	the Purchaser Claim results from or is increased by the passing of, or any
change in, after the Effective Date, any law, statute, ordinance, rule, regulation,
common law rule or administrative practice of any government, governmental department,
agency or regulatory body; or
	 
	 	9.4.7	 	the procedures set forth in Sections 9.3 or 9.6 were not observed by Purchaser
or the Companies, unless the liability of Sellers was not increased as a result of such
failure to comply with the procedures set forth in Sections 9.3 or 9.6.

	9.5	 	When calculating the amount of the liability of Sellers under this Agreement all advantages
in connection with the relevant matter shall be taken into account (Vorteilsausgleich) and
Sellers shall not be liable under this Agreement in any respect of any Purchaser Claim for any
losses suffered by Purchaser or the Companies to the extent of any corresponding savings by or
net benefit to the Purchaser or any Affiliate of Purchaser arising therefrom.
	 
	9.6	 	If (i) an order of any governmental authority (Behörde) is issued or threatened to be issued
against Purchaser or any of the Companies or (ii) any of the Companies or Purchaser is sued or
threatened to be sued by a third party, including without limitation any governmental
authority (herein “Third Party Claim”), in each case in a manner which may reasonably be
expected to give rise to a Purchaser Claim, Purchaser shall give Sellers notice of such Third
Party Claim without undue delay (unverzüglich) and the following principles shall apply:

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	 	9.6.1	 	Purchaser shall procure (bewirken) that Sellers shall be provided with all
information relevant in relation to the Third Party Claim and shall
be given reasonable opportunity to comment or discuss with Purchaser any measures
which Sellers propose to take or to omit in connection with a Third Party Claim.
In particular, Sellers shall be given an opportunity to comment on, participate
in, and review any reports and all relevant Tax and social security audits or
other measures and shall receive copies of all relevant orders (Bescheide) of any
authority without undue delay (unverzüglich), but in any event at least ten (10)
days prior to the expiry of any relevant objection period (Einspruchs- oder
Widerspruchsfrist).
	 
	 	9.6.2	 	No admission of liability shall be made by or on behalf of Purchaser or the
Companies and the Third Party Claim shall not be compromised, disposed of or settled
without the prior written consent of Sellers.
	 
	 	9.6.3	 	Sellers agree that all information obtained under this Section 9.6 shall be
treated as Confidential Information pursuant to Section 18 below.
	 
	 	9.6.4	 	To the extent that Sellers are in breach of a Sellers’ Guarantee or Sellers’
Covenant, all costs and expenses reasonably incurred by Sellers in defending such Third
Party Claim shall be borne by Sellers; if it turns out that Sellers were not in breach,
any costs and expenses reasonably incurred by Sellers in connection with the defense
shall be borne by Purchaser.

	 	 	Section 10.8 operates as lex specialis.

	E.	 	TAX INDEMNITY

	10.	 	Tax Indemnity

	10.1	 	“Tax” or “Taxes” shall mean:

	 	10.1.1	 	with respect to the Companies, any non-appealable (formell bestandskräftig) taxes and
customs duties (Zölle) within the meaning of Section 3 of the German Tax Code (AO)
(Steuern und steuerliche Nebenleistungen) or equivalent taxes under the laws of any
other jurisdiction together with any penalties, fines, interests or additions thereto
and social security contributions (Sozialversicherungsbeiträge), irrespective whether
the Tax is assessed or to be withheld or payable by law; and

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	 	10.1.2	 	any of the aforementioned listed payments imposed on Purchaser or a
Company as a secondary liability (Haftungsschuld);

	 	 	but excluding in any case, for the avoidance of doubt, deferred taxes and/or notional tax
losses (such as reductions of loss carry forwards or future depreciation).

	10.2	 	Sellers shall, subject to the provisions of this Section 10, indemnify and hold harmless
Purchaser and the Companies from and against any Taxes (as defined below) which are imposed on
the Companies under applicable laws and relate to taxable periods (Veranlagungszeiträume)
ending on or before the Effective Date (herein “Tax Indemnification Claim”). Sellers shall not
be responsible for, and Purchaser shall not be entitled to bring any Tax Indemnification
Claim, if and to the extent:

	 	10.2.1	 	liabilities (Verbindlichkeiten) or provisions (Rückstellungen) for Taxes of the
Companies are included in the Effective Date Accounts, it being understood, that such
liabilities and/or provisions may be applied and credited against any claim by
Purchaser under Section 10.1 above irrespective of whether such liability or provision
relates to the specific Tax giving rise to such claim;

	 	10.2.2	 	Purchaser, any of the Companies or any of their respective Affiliates are entitled to
any benefits in respect of Taxes, including (without limitation) benefits resulting
from the lengthening of any amortization or depreciation periods, higher depreciation
allowances, a step-up in the Tax basis of assets, the non-recognition of liabilities or
provisions (Phasenverschiebung) (herein collectively “Tax Benefits”) as the result of
an adjustment or payment giving rise to a Tax Indemnification Claim, it being
understood that the corresponding Tax Benefits shall reduce the Tax Indemnification
Claim (i) in the full amount if and to the extent the Tax Benefits arise in periods
prior to the Effective Date or (ii) in the amount of the net present value of the Tax
Benefits if and to the extent the Tax Benefits arise in periods after the Effective
Date whereby the net present value shall be calculated on the basis of (a) the Tax rate
applicable in the year in which the Tax Benefit arises in the relevant jurisdiction,
(b) an equal distribution of the reverse effect over eight (8) years in the case of
pension provisions, five (5) years in the case of fixed assets and one (1) year in the
case of current assets and other liabilities and (c) an applied discount rate of five
(5) percent per annum;

	 	10.2.3	 	the amount of the Taxes is recovered or could have been recovered from a third party
after the Closing Date;

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	 	10.2.4	 	the amount of the Taxes results from (i) any change in the accounting and taxation
principles or practices of the Companies (including methods of submitting Tax returns)
introduced after the Closing Date, (ii) any transaction, action or omission (including
but not limited to the change in the exercise of any Tax election right, the
termination of any Tax consolidation scheme, the approval or implementation of any
reorganization measure or the sale of any asset) taken by Purchaser or the Companies
after the Closing Date unless such transaction, action or omission is required by
applicable mandatory laws or implemented with the prior written consent of Sellers or
(iii) a non-compliance with the procedures of Sections 10.7 and 10.8 below, unless the
liability of Sellers under this Section 10 was not increased as a result of such
failure to comply with the procedures set forth in Section 10.7 and 10.8 below; or

	 	10.2.5	 	each individual Tax Indemnification Claim does not exceed EUR 1,000,000.00 (in words:
Euro one million), whereby individual claim shall mean a claim for a specific type of
Tax (Steuerart) for a specific taxable period (Veranlagungszeitraum).

	10.3	 	Purchaser shall pay to Sellers (i) any refunds of Taxes relating to the Business and received
by Purchaser, any of the Companies or any of their respective Affiliates by receipt of cash
payment, set-off, deduction or otherwise, which relate to periods ending on or before the
Effective Date (herein “Tax Refunds”), except where the respective claims for Tax Refunds are
shown in the Effective Date Accounts, and (ii) an amount equal to any unused Tax liability
(Verbindlichkeit) or Tax provision (Rückstellung) of any of the Companies as shown in the
Effective Date Accounts which may be dissolved as a result of a non-appealable decision by any
Tax authority, except to the extent that such Tax provision has been set off against any Tax
Indemnification Claim. Purchaser shall notify Sellers in writing without undue delay
(unverzüglich), but in no case later than ten (10) Business Days, of any relevant decision by
the Tax authority resulting in a Tax Refund. Any amount payable to Sellers pursuant to this
Section 10.3 shall be due and payable within seven (7) Business Days after the relevant
decision of the Tax authority resulting in a Tax Refund. Section 10.2.5 shall apply mutatis
mutandis with respect to the Tax Refunds owed by Purchaser to Sellers under this Section 10.3.

	10.4	 	If and to the extent the taxable income of the Companies for periods ending on or before the
Effective Date is increased after the Closing Date by the Tax authorities and such increase of
the taxable income does not result in an actual Tax payment of the Companies due to the fact
(i) that Taxes on the taxable income of the relevant Company are assessed directly against a
Seller or a Sellers’ Affiliate due to the existence of a fiscal unity (Organschaft) or similar
tax consolidation scheme or (ii) the increase of the taxable income of the Company results in a
reduction of a loss carry forward of any of Sellers or a Sellers’ Affiliate or a reduction
of a loss carry forward attributed to any of Sellers or a Sellers’ Affiliate due the
existence of a fiscal unity or similar tax consolidation scheme, Purchaser shall compensate
and indemnify Sellers by way of payment of an amount calculated in accordance with the
principles set out in Section 10.2.2 above for any Tax Benefits of Purchaser, the Companies
or their Affiliates in periods beginning after the Effective Date.

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	10.5	 	Purchaser shall indemnify and hold harmless Sellers and Sellers’ Affiliates from and against
any Taxes:

	 	10.5.1	 	relating to periods after the Effective Date (in particular to taxable periods or
portions thereof between the Effective Date and the Closing Date) which are payable by
any of Sellers or Sellers’ Affiliates for the account of the Companies or the Business,
in particular for the Chinese Carve-out Business and the Indian Carve-out Business, but
with the exception of Taxes levied on capital gains or income caused solely by the
carve-out of the Chinese or Indian Business, including, for the avoidance of doubt,
value added tax (Umsatzsteuer) paid by any of Sellers or Sellers’ Affiliates for the
account of the Companies under the fiscal unity for value added tax (Umsatzsteuer) in
Germany, the calculation of such Taxes to be made in accordance with the applicable
provisions of this Agreement, in particular Section 10.6 below;

	 	10.5.2	 	which (i) are owed by any of Sellers or any of Sellers’ Affiliates and result,
directly or indirectly, from profit or income derived through or any other taxable
event realized by the Business, in particular the Indian Carve-out Business and the
Chinese Carve-out Business (but with the exception of Taxes levied on capital gains or
income caused solely by the carve-out of the Chinese or Indian Business), on or after
the Effective Date or (ii) would be owed by any of Sellers or any of Sellers’
Affiliates based, directly or indirectly, on profit or income derived through, or on
any other taxable event realized by the Business (but with the exception of Taxes
levied on capital gains or income caused solely by the carve-out of the Chinese or
Indian Business) on or after the Effective Date if such taxable event were not
neutralized by other events realized by other operations than the Business (such as
e.g. losses suffered by the relevant Seller or the Sellers’ Affiliate through
operations other than the Business), it being understood that the amount of Taxes which
a Seller is to be indemnified from and against under this Section 10.5.2 shall in each
case be calculated as if the Indian Carve-out Business or the Chinese Carve-out
Business, as
the case may be, constituted a stand-alone entity being subject to Tax
(Steuersubjekt) as of the Effective Date;

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	 	10.5.3	 	relating to periods prior to the Effective Date which have been paid by a Seller or
Sellers’ Affiliate, if and to the extent the corresponding income item or benefit is
received or realized by the Companies after the Effective Date; or

	 	10.5.4	 	which are payable by a Seller or Sellers’ Affiliate and result from (i) any change in
the accounting and taxation principles or practices of the Companies (including methods
of submitting Tax returns) introduced after the Closing Date; or (ii) any transaction,
action or omission taken by Purchaser or the Companies after the Closing Date,
including but not limited to (a) the change in the exercise of any Tax election right,
(b) the termination of any Tax consolidation scheme or (c) the approval or
implementation of any reorganization measure or (d) the sale of any asset, with respect
to each measure, unless executed with the prior written consent of Sellers.

	10.6	 	With regard to Tax periods beginning before the Effective Date and ending after the Effective
Date, the portion of Taxes related to the time period (Zeitraum) ending on (and including) the
Effective Date (herein “Pre-Effective Date Obligation”), and the portion of Taxes related to
the time period (Zeitraum) beginning after the Effective Date (herein “Post-Effective Date
Obligation”), shall be determined as follows:

	 	10.6.1	 	In the case of Taxes other than Taxes based upon or related to income, sales,
transfers, gross receipts, wages, capital expenditures, expenses or any similar Tax
base, such portion shall be deemed to be the amount of such Tax for the entire Tax
period multiplied by a fraction, the denominator of which is the number of days of the
entire Tax period and the numerator of which is (i) in the case of a Pre-Effective Date
Obligation the number of days of the portion of such period ending on (and including)
the Effective Date, and (ii) in case of a Post-Effective Date Obligation the number of
days of the portion of such period beginning after the Effective Date.

	 	10.6.2	 	In the case of any Taxes based upon or related to income, sales, gross receipts,
wages, capital expenditures, expenses or any similar Tax base, such portion shall be
deemed equal to the amount that would be payable if (i) the relevant Tax period ended
on the Effective Date in case of a Pre-Effective Date Obligation, or (ii) started after
the Effective Date in case of a Post-Effective Date Obligation.

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	 	 	As far as consistent with applicable law and accounting standards, all determinations
necessary to give effect to the allocations under this Section 10.6 shall be made in a
manner consistent with past practice of the Business.

	10.7	 	The Parties agree to fully cooperate with each other in connection with any Tax matter
relating to any time periods ending on or before the Closing Date, including the preparation
and filing of any Tax return and transfer pricing documentation. Such cooperation shall
include, without limitation, providing or making available during normal business hours and at
the expense of Sellers (excluding, however, any internal costs of Purchaser and the Companies)
of all relevant books, records and documentation and the assistance of officers and employees.
The Parties agree to retain, until the expiration of any applicable statute of limitation, all
books, records and documentation relating to the Companies or the Business that may be
relevant in connection with any audit or investigation for which Sellers may be responsible
hereunder and, during normal business hours and at the expense of Sellers (excluding, however,
any internal costs of Purchaser and the Companies); to provide access to electronic data if
and to the extent required by applicable laws. Tax returns of the Companies relating to a
period beginning before the Closing Date shall not be filed, amended or changed by Purchaser
or the Companies without the prior written consent of Sellers, such consent not to be
unreasonably withheld, and, except if required by mandatory law, it being understood that the
terms of the Contribution Agreements relating to Tax matters shall remain unaffected. The
Sellers will use reasonable efforts to provide a document to the Purchaser prior to the
Closing Date which contains a list of tainted shareholdings and other matters with potential
detrimental or adverse impact on, or in connection with, future restructuring of the Business.

	10.8	 	Purchaser shall procure (bewirken) that Sellers are informed of all Tax assessments and
announcements of Tax audits or any other facts or circumstances which may give rise to a Tax
Indemnification Claim. The Parties agree on the following:

	 	10.8.1	 	Purchaser shall, and shall procure that the Companies shall, forward to Sellers
without undue delay (unverzüglich) but in no case later than within ten (10) Business
Days after receipt by Purchaser and/or the relevant Company copies of any
correspondence of and with the Tax authorities relating to a potential or alleged Tax
Indemnification Claim. Each notification shall be in writing and copies of any
documents related thereto and not yet known to Sellers shall be attached to such
correspondence. Purchaser shall, at the expense of Sellers (excluding, however, any
internal costs of Purchaser and the Companies), (i) grant, and shall ensure that the
relevant Company grants, Sellers and Sellers’ advisors the right to participate in
meetings, discussions and correspondence with the Tax authorities, including in the case of Tax audits
the right to attend any formal meetings with the Tax auditor (the final meeting
pursuant to Section 201 German Fiscal Code (AO) or comparable foreign
provisions), (ii) request, and shall ensure that each relevant Company requests,
that the relevant Tax auditor provide questions in writing and that such
questions be forwarded without undue delay (unverzüglich) to Sellers for Sellers’
evaluation and comments, and (iii) duly incorporate, and shall ensure that each
relevant Company incorporates in its statements to the Tax authorities any
comments Sellers may have, unless such comments are in violation of applicable
laws.

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	 	10.8.2	 	Purchaser shall not, and shall ensure that Companies shall not, (i) settle, concede
or give their consent to the findings of any and all Tax audits relating to time
periods ending on or before the Effective Date and (ii) make an admission of liability,
compromise or settlement of a Third Party Claim by Tax or other governmental
authorities without the prior written consent of Sellers unless Purchaser waives its
claims under this Section 10 with respect to the findings or Third Party Claims in
question.

	 	10.8.3	 	Purchaser shall procure (bewirken) that, upon the request of Sellers and at the
expense of Sellers (excluding, however, any internal costs of Purchaser and the
Companies), objections are filed and legal proceedings are instituted and conducted
against any orders, audits, decrees or judgments in accordance with Sellers’
directions. Alternatively, Sellers may elect, at any time, to direct, through counsel
of its own choice and at their own expense, any reasonable actions including, without
limitation, legal remedies to be taken with respect to any audit, claim for refund and
administrative or judicial proceeding involving any asserted liability with respect to
taxable periods or portions thereof ending on or before the Effective Date, or any
refunds, credits or other benefits to which Sellers may be entitled pursuant to this
Section 10 (herein collectively “Contest”).

	 	10.8.4	 	If Sellers elect to direct a Contest, then (i) Sellers shall within fifteen (15)
Business Days after having been notified by Purchaser of a Tax Indemnification Claim
notify Purchaser of its intent to do so, (ii) Purchaser shall cooperate and follow
Sellers’ instructions and shall cause the Companies or their respective successors to
cooperate and follow Sellers’ instructions in each phase of such Contest, and (iii)
Purchaser shall without undue delay (unverzüglich) , but in no case later than ten (10)
Business Days, empower and shall cause the Companies or their respective successor
promptly to empower (by power of attorney and such other documentation as may be necessary
and appropriate and as prepared by
Sellers) the designated representatives of Sellers to represent the relevant
Company or their successor in the Contest insofar as the Contest involves an
asserted Tax liability relating to taxable periods or portions thereof ending on
or before the Effective Date, or any refunds, credits or other benefits to which
Sellers may be entitled pursuant to this Section 10. Further, Purchaser shall
procure that Sellers shall be promptly provided with all relevant information
and/or documents regarding services delivered or services received for the period
during which the Companies formed part of a value-added Tax group with any of
Sellers or Sellers’ Affiliate.

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	10.9	 	If Purchaser fails to comply with any of its obligations under this Section 10, or denies
fulfilment of such obligations, Purchaser shall indemnify and hold harmless Sellers and
Sellers’ Affiliates from and against any Taxes and any and all direct or indirect
disadvantages or damages of Sellers or Sellers’ Affiliates (e.g. the findings of a Tax audit,
including but not limited to the determination of additional income allocated to Sellers or
any other result of a Tax audit) which may result from such non-compliance or denial.

	10.10	 	Section 9.2 shall apply mutatis mutandis.

	10.11	 	Even if the Purchaser is aware or could be aware of a fact or circumstance that gives or can
give rise for an indemnification obligation of the Sellers under this Section 10, Sellers
shall not be released from any of their obligations set forth in this Section 10. Section 442
German Civil Code (BGB) and Section 377 German Commercial Code (HGB) shall not apply.

	F.	 	SELLERS’ COVENANTS AND OTHER UNDERTAKINGS

	11.	 	Sellers’ Covenants

	11.1	 	For the period between the Signing Date and the Closing Date, Sellers shall, to the extent
legally permissible, use best efforts that the Companies shall continue to operate the
Business substantially consistent with past practice, except in each case, where any failure
to do so would not result in a Material Adverse Effect.

	11.2	 	For the period between the Signing Date and the Closing Date, Sellers shall not:

	 	11.2.1	 	Resolve, pay or make any dividends or other distributions (whether by reduction of
capital or redemption (Einziehung) or purchase of shares
or otherwise) to be paid or made by any of the Companies to Sellers or any of
Sellers’ Affiliates;

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	 	11.2.2	 	cause VDO AG to repay the principal balance of any of the Shareholder Loans in whole
or in part or accept any such repayments from VDO AG;

	 	11.2.3	 	increase or reduce the share capital of VDO AG (including but not limited to
increases of the conditional capital (bedingtes Kapital) and/or authorized capital
(genehmigtes Kapital)) or repurchase or redeem (einziehen) any of the Shares, issue any
bonds (Schuldverschreibungen), including, without limitation, bonds, providing for
conversion rights (Wandlungsrechte) or subscription rights (Bezugsrechte) or option
rights (Optionsrechte) under option schemes for shares in VDO AG; or

	 	11.2.4	 	pass resolutions in the shareholder’s meeting of VDO AG regarding any amendment of
the articles of association of VDO AG or which require a qualified majority
(qualifizierte Mehrheit) of seventy-five (75) percent of the votes cast except as
provided in this Agreement.

	11.3	 	For the period between the Signing Date and the Closing Date, Sellers shall, to the extent
legally permissible, use best efforts that the Consolidated Companies shall, except as
disclosed in Exhibit 11.3 or with the prior consent of Purchaser (which shall not be
unreasonably withheld and not be delayed for more than five (5) Business Days), not:

	 	11.3.1	 	permit any of its Material Assets or Material Intellectual Property Rights to be
subjected to any mortgage, pledge, lien, security interest or encumbrance, except for
those arising by operation of law or in the ordinary course of business;

	 	11.3.2	 	make any material capital expenditure (i.e. exceeding an amount of EUR 15,000,000.00
(in words: Euro fifteen million)) or commitment therefore, except (i) pursuant to
contracts or commitments existing on the Signing Date, or (ii) for measures already
included in the capital expenditure budget as shown in Exhibit 11.3.2 (herein
“Capex Plan”);

	 	11.3.3	 	incur any incremental (zusätzliche) liability for borrowed money outside the ordinary
course of business or in excess of EUR 15,000,000.00 (in words: Euro fifteen million)
in the individual case or to issue any guarantee for obligations or liabilities of any
third party (other than a Company), in each case excluding (i) liabilities for borrowed
money or guarantees towards any other Company, (ii) liabilities
for borrowed money or guarantees to be incurred or issued in the ordinary course
of business and in amounts and on terms consistent with past practice and (iii)
liabilities for borrowed money or guarantees to be incurred or issued in
connection with contracts or commitments existing on the Signing Date or already
approved in the relevant budget or the Capex Plan;

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	 	11.3.4	 	grant any increase in wages, salaries, bonus, extra compensation, pension, severance
pay or other remuneration of any directors or employees other than increases (i) which
are provided by collective bargaining agreements (Tarifverträge) or references to such
bargaining agreements in the individual employment contracts or (ii) which are granted
in the ordinary course of business consistent with past practice;

	 	11.3.5	 	cancel or waive any claims or rights with an individual market value in excess of EUR
3,000,000.00 (in words: Euro three million) or settle (vergleichen) any pending court
or administrative proceedings, including arbitration proceedings, with a litigation
value (Streitwert) in excess of EUR 3,000,000.00 (in words: Euro three million);

	 	11.3.6	 	enter into any new collective bargaining agreement (Tarifvertrag) outside the
ordinary course of business and with the exception of industry wide collective
bargaining agreements;

	 	11.3.7	 	enter into any real property transaction involving contractual obligations with a net
present value in excess of EUR 15,000,000.00 (in words: Euro fifteen million) in the
individual case;

	 	11.3.8	 	sell the Business in whole or any material parts thereof (i.e. a part of the Business
with a fair market value exceeding EUR 50,000,000.00 (in words: Euro fifty million) in
the individual case);

	 	11.3.9	 	perform transactions under the German Transformation Act (UmwG) involving any
Consolidated Company as a party thereto;

	 	11.3.10	 	make payments other than under service agreements or on account of trade payables
to, or incur non-trade liabilities vis-à-vis, any of Sellers or Sellers’ Affiliates
exceeding EUR 3,000,000.00 (in words: Euro three million) in the individual case,
except for such payments or liabilities in the ordinary course of business or under the
Shareholder Loans or Intercompany Financing Arrangements;

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	 	11.3.11	 	waive or release any indebtedness, liability or obligation or other payment owed to
any Company by any of Sellers or Sellers’ Affiliates outside the ordinary course of
business; or

	 	11.3.12	 	agree, whether or not in writing, to do any of the foregoing.

	11.4	 	Sellers agree that, prior to the Closing Date, Purchaser shall, to the extent legally
permissible and subject to Sellers’ consent, which shall not be unreasonably withheld or
delayed, be entitled to receive such information on the Business (including copies of
documents, accounts and records) as it reasonably requests for the purpose of preparing the
Closing. Any such information requests and any exchange of information shall take place during
regular business hours and under reasonable circumstances without interference with the
business operations of any of the Companies and in full compliance with applicable laws.
Information requests shall be exclusively addressed to the individuals who shall be identified
by Sellers and communicated to Purchaser within five (5) Business Days after the Signing Date.

	11.5	 	The Parties are in agreement that the service level agreements for the services listed in
Exhibit 11.5 hereto (herein “Terminating Services”) between the Companies on the one
hand and Sellers or Sellers’ Affiliates on the other hand shall be terminated on or prior to
the Scheduled Closing Date with effect as of the Closing Date provided, however, that the
Parties shall agree in good faith on procedures for a reasonable support of Purchaser and the
Companies in the area of the Terminating Services by Sellers and Sellers’ Affiliates for a
reasonable period of time after the Closing Date, if and to the extent required for a
reasonable transition. With respect to all other service level agreements and all other
agreements and internal arrangements for the provision of services, the lease of premises or
the delivery of goods (excluding, for the avoidance of doubt, the Contribution Agreements, the
Intercompany Financing Arrangements and the Shareholder Loans) existing or to be entered into
between the Companies on the one hand and Sellers or Sellers’ Affiliates on the other hand,
the Parties agree to discuss in good faith the conclusion, amendment, termination or
continuation at substantially unchanged terms of such service level agreements after the
Signing Date and to use best efforts to cause their respective Affiliates to implement such
conclusion, amendment, termination or continuation.

	11.6	 	Sellers shall procure (bewirken) that as soon as reasonably practicable (i) the Capital
Increases shall be registered with the commercial register (Handelsregister) maintained at the
lower court (Amtsgericht) of Regensburg in accordance with the terms of the resolutions of the
shareholders meeting of VDO AG dated 23 May 2007 and the Contribution Agreements, (ii) all
steps required for the implementation of the Contribution Agreements shall be consummated,
(iii) the Chinese Carve-out Business shall be transferred to the Chinese Carve-out Companies in accordance with Section 1.6.1 above, and (iv) the Indian Carve-Out Business shall
be transferred to Indian NewCo in accordance with Section 1.6.2 above. The Parties are in
agreement that the obligations of Sellers to take certain actions to implement the
Contribution Agreements shall not lapse on 30 September 2007, but continue until the Closing
Date (if later). To the extent further steps shall be reasonably required after the Closing
Date to implement the Contribution Agreements, the Parties shall discuss in good faith with
a view to agree on the taking of such further steps by Sellers, the Companies and Purchaser.

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	11.7	 	Sellers shall, and shall procure (bewirken) that the relevant Sellers’ Affiliates shall,
timely consult with Purchaser and its advisers with regard to all material contemplated steps,
including, without limitation, (i) the passing of shareholders resolutions of VDO AG, (ii) the
amendment of the Contribution Agreements and/or any other sale, contribution, transfer or
similar agreements relating to the transfer of the Business to the Companies entered into
between Sellers and Sellers’ Affiliates on the one hand and the Companies on the other hand
(herein “Carve-Out Agreements”), and (iii) the general allocation of personnel, in each case
with a view to implement the contribution of the Business to VDO AG and the Companies in
accordance with the terms and conditions of the Contribution Agreements and the Carve-Out
Agreements.

	11.8	 	Sellers shall procure (bewirken) that no more than the equivalent of three hundred (300) full
time employees shall transfer to any of the Companies pursuant to Section 12.8 of the SAG
Contribution Agreement (herein collectively “Transferring Employees”). Notwithstanding Section
12.8.1 lit. a) of the SAG Contribution Agreement, Seller 1 shall consult with VDO AG and, to
the extent permitted by law, Purchaser with respect to the identity of the Transferring
Employees, it being understood that the identification of the Transferring Employees shall be
in Seller 1’s sole discretion.

	11.9	 	If and to the extent any intellectual property rights which were exclusively applicable to
the Business prior to 01 June 2007 and are owned by Seller 1, but have not been transferred to
VDO AG under the SAG Contribution Agreement by apparent omission or mistake (offensichtliches
Versehen), the Parties shall procure (bewirken) that such omission or mistake shall be
corrected without undue delay (unverzüglich) in accordance with the terms and conditions of
the SAG Contribution Agreement and without further consideration.

	11.10	 	Seller 1 hereby grants its consent (Zustimmung), in accordance with Section 4 of the SIBUSA
Contribution Agreement and Section 4 of the SIH Contribution Agreement to the execution of any
sales, share transfers and reorganizations to the extent they result in all shares in Siemens
VDO Holding Inc. being held by one party.

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	11.11	 	The covenants of Sellers contained in Sections 11.1 through 11.3 shall herein be referred to
as “Sellers’ Conduct Covenants” and the covenants of Sellers contained in Sections 11.4
through 11.10 shall herein be referred to as “Sellers’ Other Covenants” and the Sellers’
Conduct Covenants and the Sellers’ Other Covenants are herein collectively referred to as
“Sellers’ Covenants”.

	12.	 	Pension Funding Obligation

	12.1	 	The Parties are in agreement that the Pension Deficit Amount (as defined in Section 12.2
below) of the Consolidated Companies existing as of the Effective Date shall be determined on
the basis of an independent actuarial valuation as of the Effective Date and shall be settled
by Sellers and Sellers’ Affiliates in accordance with this Section 12.

	12.2	 	The “Pension Deficit Amount” shall be the difference between the DBO Amount and the Pension
Asset Value whereby the

	 	12.2.1	 	“DBO Amount” shall be the value existing on the Effective Date of the Post Employment
Benefit Obligations (as defined in Section 12.2.2 below) in respect of current and
former (deferred vested and retirees) employees of the Consolidated Companies (herein
“Relevant Employees”);

	 	12.2.2	 	“Post Employment Benefit Obligations” shall mean any and all obligations of any of
the Consolidated Companies relating to or in connection with the payment of (i)
pensions (and lump sums payable in addition to, or by commutation of, pension on
retirement), (ii) post retirement medical benefits (OPEB), (iii) deferred compensation
and (iv) termination indemnities (Abfertigungen) as applicable in Austria and Italy
(TFR) and/or (v) survival benefits as applicable in Germany (Übergangsgeld und
Sterbegeld);

	 	12.2.3	 	“Pension Asset Value” shall be the market value existing on the
Effective Date of the pension assets held for the account of the Consolidated Companies
(e.g. transferring plan vehicles, dedicated bank accounts for pension cash, deferred
contribution funds, and the assets to be transferred to VDO AG under Section 12.6 of
the SAG Contribution Agreement).

	12.3	 	Seller 1 has commissioned BodeHewitt AG & Co. KG (herein “BodeHewitt”) to calculate the
Pension Deficit Amount of the Consolidated Companies as of the Effective Date subject to
following calculation methodology:

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	 	12.3.1	 	the DBO Amount shall be the defined benefit obligation (DBO), representing the
actuarial present value of the Post Employment Benefit Obligations generated by service
of the Relevant Employees up to the Effective Date;

	 	12.3.2	 	the DBO Amount and the Pension Asset Value shall be determined separately for each
plan or arrangement for Post Employment Benefit Obligations and calculated by the
recognized local pension actuaries in each relevant country which calculated the
relevant pension figures for the most recent audited financial statements of the
Consolidated Company concerned;

	 	12.3.3	 	the DBO Amount shall be calculated by using the same calculation methodology
historically applied by Sellers and the Consolidated Companies for its most recent
audited financial statements and the actuarial assumptions set forth in Exhibit
12.3.3 whereby, for the avoidance of doubt, the DBO Amount shall be calculated in
compliance with International Accounting Standard IAS 19 except that in those countries
where the Consolidated Companies calculated the relevant pension figures for its most
recent audited financial statements under local GAAP requirements, the Sellers reserve
the right to apply the calculation methodology as used in such audited financial
statements;

	 	12.3.4	 	the Pension Asset Value shall be the fair market value of the pension assets as of
the Effective Date.

	 	 	Seller 1 shall make available to Purchaser a complete copy of the actuarial report prepared
by BodeHewitt including the methodology and assumptions applied (herein “BodeHewitt Report”)
without undue delay (unverzüglich), but in any event no later than five (5) Business Days
after obtaining the BodeHewitt Report from BodeHewitt.

	12.4	 	The Parties shall procure (bewirken) that, subject to applicable law, the Post Employment
Benefit Obligations shall be assumed by, or, as the case may be, be transferred (without
recourse to the transferee) from Seller or the relevant Sellers’ Affiliate to, the relevant
Consolidated Company or, at the election of Purchaser, to Purchaser or an Affiliate of
Purchaser or to plans or arrangements operated or designated by either of them. The Parties
agree to cooperate in order to establish the arrangements and make the transfers of Post
Employment Benefit Obligations and to achieve any regulatory or legal approvals and/or
clearances from regulatory or legal authorities which either Party reasonably considers
necessary or desirable in connection with such transfer. The Parties acknowledge that the
employees of the Consolidated Companies will cease to participate in employee benefit plans
and arrangements of Sellers and Sellers’ Affiliates with
effect as of the Closing Date, unless such employee benefit plans explicitly allow continued
membership for a transitional period of time after a change of control in the Company
concerned.

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	12.5	 	Ten (10) Business Days after receiving the BodeHewitt Report from BodeHewitt, Seller 1 shall
pay to VDO AG an amount equal to the Pension Deficit Amount as of the Effective Date as
determined by the BodeHewitt Report, plus interest for the period from (but not including) the
Effective Date until (and including) the date of payment at a rate of five (5) percent p.a.
(herein “Unfunded Pension Compensation”). Seller 1 reserves the right to pay the Unfunded
Pension Compensation or parts thereof into plans, schemes or arrangements for the provision of
(or contribution to) post employment benefits to the Relevant Employees, e.g. SV Pension Trust
e.V. (herein “Receiving Plan”) or to cause a Sellers’ Affiliate to make such payment. Any such
payment into a Receiving Plan shall constitute both a payment of Seller 1 with full release
from its obligation to pay the relevant portion of the Unfunded Pension Compensation and a
payment of the relevant Consolidated Company under the respective arrangements with the
Receiving Plan (doppelte Tilgungsbestimmung).

	13.	 	Non-Compete Undertaking, Use of Trademarks, Non-Solicitation Undertaking

	13.1	 	Sellers hereby undertake that neither Sellers nor any of Sellers’ Affiliates shall engage,
directly or indirectly, as a proprietor, shareholder, partner or otherwise in the activities
listed in Exhibit 13.1 (herein “Restricted Activities”) for thirty (30) months from
the Closing Date. Nothing in this Section 13.1 shall preclude Sellers and Sellers’ Affiliates
from continuing any business activities they have been conducting already at the Signing Date,
including organic growth of such activities (i) stipulated in a business, strategy or R&D plan
as of the Signing Date or (ii) based on R&D activities existing as of the Signing Date. Seller
1 further agrees, for a period of thirty (30) months from the Closing Date not to sublicense
or otherwise make available, whether by way of sale of business or through sub-licenses, any
rights under the licenses granted to Seller 1 under Section 6.5 of the SAG Contribution
Agreement to a third party (excluding, for the avoidance of doubt, any Sellers  ́ Affiliates)
for use of such rights in the field of (i) the Restricted Activities as conducted by the
Companies at the Closing Date or (ii) organic growth of such Restricted Activities. For the
avoidance of doubt, any rights granted by Seller 1 to any third party prior to the Signing
Date shall remain unaffected.

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	13.2	 	Nothing in Section 13.1 above shall prohibit Sellers or any of Sellers’ Affiliates from (i)
acquiring or owning, directly or indirectly, any shareholdings in other
companies engaged in the Restricted Activities (herein “Competing Business”) if such
shareholding represents (a) less than twenty (20) percent of such company’s voting capital
or (b) less than fifty (50) percent of such company’s voting capital provided that the
annual turnover of such Competing Business amounts to less than EUR 50,000,000 (in words:
Euro fifty million), (ii) acquiring or owning, directly or indirectly, any shareholdings in
a company engaged in the Competing Business if such Competing Business does, at the date of
the acquisition, not account for more than thirty (30) percent of the total annual net sales
of such company as reported for the last fiscal year prior to the date of such acquisition,
or (iii) merging with a company that carries on a Competing Business or engaging in any
equity transaction with such company which achieves substantially the same economic effects
as a merger, if such Competing Business does, at the date of the acquisition, not account
for more than thirty (30) percent of the total annual net sales of such merger party as
reported for the last fiscal year prior to the date of such acquisition. Nothing in Section
13.1 above shall prevent Sellers or any of Sellers’ Affiliates from acquiring, directly or
indirectly, shares or assets of any company which carries on a Competing Business and
continuing such Competing Business if Sellers or Sellers’ Affiliates offer the Competing
Business or interest for sale within one (1) year from completion of the relevant
transaction on reasonable commercial terms but a buyer cannot be found provided that Sellers
shall have first offered such Competing Business to Purchaser at fair market value.

	13.3	 	Sellers shall, and shall procure (bewirken) that Sellers’ Affiliates shall, not use, whether
by itself or through third parties, any of the “VDO” trademarks listed in Annex 6.2.1 to the
SAG Contribution Agreements (herein “VDO Trademarks”). Seller 1 agrees not to exercise the
license granted under Section 6.5.1 of the SAG Contribution Agreement in relation to the VDO
Trademarks.

	13.4	 	In case of a breach of the undertakings of Sellers contained in Section 13.1 and Section 13.3
above Purchaser may request that Sellers immediately discontinue such breaches and refrain
from any such breaches in the future. If and to the extent Sellers have not stopped such
breaches within a period of three (3) months after such request for discontinuation has been
made (herein “Grace Period”) by Purchaser in writing, Purchaser shall, in addition, be
entitled to the amount of Losses (which shall, in deviation from Section 9.1 above, in this
case also comprise any consequential damages (Folgeschäden) and lost profits (entgangener
Gewinn)) suffered by Purchaser or any of its Affiliates, including the Companies, as a
consequence of aforesaid breach of Sellers’ undertakings contained in Section 13.1 and Section
13.3 above after the Grace Period.

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	13.5	 	Sellers shall not, and shall procure (bewirken) that Sellers’ Affiliates shall not, for a
period of one (1) year from the Closing Date, solicit or entice away from any of the
Companies, or offer employment to or employ, or offer or conclude any contract for services
with, any person that was employed by any of the Companies as
director or member of the senior management during the eighteen (18) months prior to the
Closing Date (herein “Restricted Employees”), provided, however, that this Section 13.5 shall
not restrict any of Sellers or Sellers’ Affiliates to make generalized solicitations by use of
advertisements or by engaging human resource consultants not targeted or focused on any
Restricted Employee and to freely employ any Restricted Employee responding to such
solicitations. In case of a breach of the foregoing covenant, Sellers shall be liable to pay
to Purchaser (and/or, at Purchaser’s discretion, to any of the Companies) for each breach a
lump sum penalty (pauschalierter Schadenersatz) in the amount of the relevant director’s or
manager’s gross annual salary including any bonus, extra payments, etc. paid by VDO AG and/or
the relevant Company, provided that such lump sum penalty (pauschalierter Schadenersatz) shall
constitute Purchaser’s sole remedy and shall exclude Purchaser to claim further damages or
losses incurred by Purchaser in connection with such breach.

	G.	 	LIMITATIONS

	14.	 	Expiration and Limitations of Claims

	14.1	 	All claims of Purchaser arising under this Agreement shall be time-barred eighteen (18)
months after the Closing Date. Exempted herefrom are:

	 	14.1.1	 	all claims of Purchaser arising (i) from a breach of the Sellers’ Guarantee contained
in Section 7.1.2 (Existence of Companies) or a breach of Sellers’ Guarantee contained
in Section 7.1.4 (Ownership of the Shares) in respect of defects of title to the Shares
or (ii) in relation to specific performance claims (Erfüllungsansprüche) to transfer
title to the Shares which shall be time-barred on the fifth (5th)
anniversary of the Closing Date (herein collectively “Title Claims”);

	 	14.1.2	 	all claims of Purchaser arising under the Sellers’ Guarantee in Section 7.1.17 above
(Environmental Contamination) which shall be time-barred three (3) years after the
Closing Date;

	 	14.1.3	 	all Tax Indemnification Claims which shall be time-barred for each claim three (3)
months after the date of the final, non-appealable assessment concerning the respective
Tax, but not earlier than three (3) months after the date at which Purchaser’s right to
bring any Tax Indemnification Claims is no longer barred by Section 10.2.1 above (i.e.
the date at which the aggregate amount of Tax Indemnification Claims first exceeds the
aggregate amount of liabilities and provisions for Taxes included in the Effective Date
Accounts);

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	 	14.1.4	 	all claims of Purchaser arising from a breach of the undertakings of Sellers
contained in Section 13 (Non-Compete Undertaking, Use of Trademarks, Non-Solicitation
Undertaking) above, except for any claims arising from a breach of the undertaking of
Sellers contained in Section 13.3 above (Use of VDO Trademarks), which shall be
time-barred for each claim three (3) months after Purchaser or any of its Affiliates
(including the Companies) becomes aware of the underlying facts and circumstances, but
in any event thirty-three (33) months after the Closing Date;

	 	14.1.5	 	any claims arising from a breach of the undertaking of Sellers contained in Section
13.3 above (Use of VDO Trademarks) and all claims of Purchaser arising as a result of
willful or intentional breaches of Sellers’ obligations under this Agreement which
shall be time-barred in accordance with the statutory rules in Sections 195, 199 German
Civil Code (BGB);

	 	 	(herein collectively “Time Limitations”). “Exempted Claims” shall mean any (i) Title Claims,
(ii) Purchaser Claims arising from a breach of the Sellers’ Guarantee contained in Section
7.1.18 (No Profit Distribution or Other Payments) and Section 7.1.20 (Shareholder Loans)
above, (iii) Purchaser Claims arising from a breach of or the Sellers’ Conduct Covenants
contained in Section 11.2 above, (iv) Tax Indemnification Claims, (v) claims arising from a
breach of the Sellers’ undertakings contained in Section 12 (Pension Funding Obligation) or
Section 13 (Non-Compete Undertaking, Use of Trademarks, Non-Solicitation Undertaking) above
and (vi) claims referred to in Section 14.1.5 above.

	14.2	 	The expiry period for any claims of Purchaser under this Agreement shall be tolled (gehemmt)
pursuant to Section 209 German Civil Code (BGB) by any timely demand for fulfillment pursuant
to Section 9.3 above provided that Purchaser commences judicial proceedings within three (3)
months after the expiry of the relevant Time Limitations. Section 203 German Civil Code (BGB)
shall not apply, unless the Parties agree in writing that the expiry period shall be tolled on
the basis of pending settlement negotiations.

	14.3	 	No liability shall attach to Sellers under or in connection with this Agreement if and to the
extent the individual claim is less than EUR 1,000,000.00 (in words: Euro one million) (herein
“De Minimis Claims”) and until the aggregate amount of claims (excluding any De Minimis
Claims) exceeds an amount of EUR 100,000,000.00 (in words: Euro one hundred million)
(Freibetrag) (herein “Deductible”). If the aggregate amount of claims under this Agreement
(excluding any De Minimis Claims and Exempted Claims) exceeds the Deductible,
the Purchaser may claim only the excess of such claims above the Deductible subject to the
other provisions of this Section 14. This Section 14.3 shall not apply to any Exempted
Claims and claims arising from a breach of the Sellers’ Other Covenants.

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	14.4	 	The aggregate liability of Sellers under this Agreement shall not exceed ten (10) percent of
the Purchase Price (herein “Liability Cap”). The Liability Cap shall not apply to any Exempted
Claims and claims arising from a breach of the Sellers’ Other Covenants, provided, however,
that Sellers’ overall liability under this Agreement, except for claims of Purchaser arising
as a result of wilful or intentional breaches of Sellers’ obligations under this Agreement
shall in no event exceed the Purchase Price.

	14.5	 	The Parties are in agreement that the remedies that Purchaser or any of the Companies may
have against Sellers for breach of obligations set forth or in connection with this Agreement
are solely governed by this Agreement, and that the remedies provided for by this Agreement
shall be the exclusive remedies available to Purchaser and/or the Companies in connection with
this Agreement and that, apart from such remedies, (i) any right of Purchaser to withdraw
(zurücktreten) from this Agreement or to require the winding up of the transaction
contemplated hereunder (e.g. by way of großer Schadenersatz or Schadenersatz statt der
Leistung), (ii) any claims for breach of pre-contractual obligations (culpa in contrahendo),
including but not limited to claims arising under Sections 241 (2), 311 (2) (3) German Civil
Code (BGB)) or ancillary obligations (Nebenpflichten), including but not limited to claims
arising under Section 280 German Civil Code (BGB), (iii) any claims based on frustration of
contract pursuant to Section 313 German Civil Code (BGB) (Störung der Geschäftsgrundlage),
(iv) all remedies of Purchaser for defects of the purchase object under Sections 437 through
441 German Civil Code (BGB) are hereby expressly excluded and waived (verzichtet) by
Purchaser. Claims based on willful deceit (arglistige Täuschung) or other intentional behavior
(Vorsatz) of Sellers shall remain unaffected by this Section 14.5. Sellers’ liability for
intentional behavior of the persons assisting Sellers in the performance of its obligations
(Erfüllungsgehilfen) within the meaning of Section 278 German Civil Code (BGB) is, however,
excluded.

	14.6	 	The remedies that Purchaser may have against Sellers for breach of any obligations set forth
in or in connection with this Agreement shall not be superseded, replaced or prejudiced by any
provision of the Contribution Agreements (or any exhibit, amendment or ancillary agreement
entered into in order to implement or amend a Contribution Agreement). Sellers hereby waive
any recourse claims (Regressansprüche) against the Companies which might arise under the terms
of the Contribution Agreements as a result of a Purchaser Claim being brought against Sellers
under this Agreement.

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	H.	 	PURCHASER’S COVENANTS AND INDEMNITIES

	15.	 	Purchaser’s Covenants

	15.1	 	With effect as of the Closing Date, Purchaser hereby assumes (i) all guarantees, comfort
letters and other securities of any kind which Sellers or any Sellers’ Affiliates have
provided in favour of the Business to banks, other financial institutions, suppliers,
customers or other third parties on or prior to the Signing Date and listed in Exhibit
15.1 hereto, and (ii) any additional guarantees, comfort letters and other securities of
any kind which may be provided in favour of any Company with respect to the Business after the
Signing Date with Purchaser’s prior consent, such consent not to be unreasonably withheld ((i)
and (ii) herein collectively “Sellers’ Securities”). Purchaser shall further, as of the
Scheduled Closing Date or as soon as possible thereafter, replace the Sellers’ Securities and
shall procure that any deeds or instruments evidencing the Sellers’ Securities shall be
returned to Sellers, so that Sellers and the Sellers’ Affiliates are fully released from all
such Sellers’ Securities.

	15.2	 	Purchaser shall (i) procure (bewirken) that the Companies shall, as soon as reasonably
possible after the Closing Date, provide a sufficient and adequate insolvency risk insurance
as required under the German Old Age Part Time Act (Altersteilzeitgesetz) for old-age part
time funds (Altersteilzeitguthaben) of the employees of the Companies which shall replace the
current collateral provided by Seller 1 on behalf of the Companies and (ii) provide adequate
proof thereof to Sellers as soon as reasonably possible after the Closing Date.

	15.3	 	Purchaser undertakes and covenants to procure insurance coverage for the Business effective
from the Closing Date which shall be commensurate to the insurance coverage existing in the
industry in which the Business operates, it being understood that the insurance coverage
provided to the Business under Siemens group insurance policies ceases with effect as of the
Closing Date. Such insurance coverage shall also include any risks relating to the period
prior to the Closing Date to cover any claims for which insurance claims cannot reasonably be
filed prior to the Closing Date and therefore are not recoverable by the Companies after the
Closing Date due to the existing insurance coverage on “claims made” basis.

	15.4	 	Purchaser shall procure (bewirken):

	 	15.4.1	 	that each of the Companies shall refrain from using the name, trademark or logo
“Siemens” or any other marks, logos, names or reference which, in each case, indicate a
connection between the Companies and the Siemens group immediately after Closing, it
being understood that
the Companies shall be permitted to use up business paper, materials used in
digital media and other materials bearing the name, trademark or logo “Siemens”
or any other marks, logos, names or reference which, in each case, indicate a
connection between the Companies and the Siemens group for a period of six (6)
months after the Closing Date; and

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	 	15.4.2	 	that following the Closing Date each of the Companies shall provide Sellers and
Sellers’ Affiliates, upon request and at the expense of Sellers and Sellers’ Affiliates
(excluding internal costs of the Companies), with (i) all accounting data relating to
periods prior to (and including) the Closing Date necessary for the deconsolidation of
the Consolidated Companies by Sellers and all necessary assistance and access to the
management of the Consolidated Companies to the extent required for the audit of the
data to be delivered and (ii) reasonable access to, and the right to take copies
(including, for the avoidance of doubt, electronic copies) of, the books, accounts and
other records held by any Company to the extent that such books, accounts, and records
relate to the periods prior to the Closing Date; provided that all information obtained
under this Section 15.4.2 shall be treated as Confidential Information pursuant to
Section 18 below.

	15.5	 	Purchaser shall procure (bewirken) that the assets received by VDO AG under the SAG
Contribution Agreement will be accounted for at the fair market value (gemeiner Wert) for Tax
purposes in accordance with Seller 1’s instruction and the allocation made by Seller 1 for Tax
purposes.

	15.6	 	Subject to Section 15.9 below, Purchaser shall procure (bewirken) that for a period of
thirty-six (36) months after the Closing Date

	 	15.6.1	 	the Companies shall maintain their existing sites (Standorte) in Germany except where
restructurings of the Companies’ sites were already contemplated in the business plan
of the Companies prior to the Signing Date; and provided that, with respect to
Regensburg, such period shall be extended to sixty (60) months after the Closing Date;
and

	 	15.6.2	 	to the extent reasonably practicable, the existing headquarter of the Business in
Regensburg shall be maintained substantially in its current form, e.g. as divisional or
regional headquarter, provided that Purchaser currently has no intention not to
maintain such headquarter beyond such period.

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	15.7	 	Purchaser shall procure (bewirken):

	 	15.7.1	 	that the Companies shall be bound by the terms and conditions of any collective
bargaining agreements (Tarifverträge), shop agreements (Betriebsvereinbarungen) and
group shop agreements (Konzernbetriebsvereinbarungen) (herein “Collective Employment
Agreements”) applicable to the Companies as at the Closing Date, it being understood
that nothing in this Section 15.7.1 shall prohibit the Companies to terminate or amend
the Collective Employment Agreements in accordance with their existing terms;

	 	15.7.2	 	that (i) the Collective Employment Agreements shall remain in full force in respect
for the Companies after the Closing Date by way of collective continued obligations
(kollektivrechtliche Fortgeltung) or (ii) in the event that the collective continued
obligations (kollektivrechtliche Fortgeltung) should not be possible, without undue
delay following the Closing Date to offer to the competent trade unions and work
councils to conclude collective bargaining agreements, shop agreements and group shop
agreements substantially identical to the Collective Employment Agreements;

	 	15.7.3	 	that, for a period of thirty-six (36) months after the Closing Date, the Companies
shall continue without material alteration all pension schemes, pension arrangements
and other employee benefit plans applicable for the Companies as at the Closing Date
(herein “Pension and/or Benefit Schemes”) and to fulfill all obligations arising under
the Pension and/or Benefit Schemes and, to the extent such Pension and/or Benefit
Schemes cannot be continued after the Closing Date, to have such Pension and/or Benefit
Schemes substituted by pension and other employee benefits that are the same as or, in
the aggregate comparable to the benefits received by the employees of the Companies
prior to the Closing Date and it being understood that (i) the employees of the
Companies will not suffer any disadvantages in connection with the transition of the
Pension and/or Benefit Schemes and (ii) that nothing in this Section 15.7.3 shall
prohibit the Companies to terminate or amend Pension and/or Benefit Schemes in
accordance with their existing terms.

	15.8	 	Subject to Section 15.9 below, Purchaser shall use its commercially reasonable best efforts
that for a period of thirty-six (36) months after the Closing Date the Companies shall not lay
off any employees employed in Germany as of the Closing Date for operational grounds
(betriebsbedingte Kündigung), unless such lay-offs (i) are permissible under the existing
Collective Employment Agreements or (ii) were already contemplated in the business plan of the
Companies prior to the Signing Date. This Section 15.8 operates for the benefit
(echter Vertrag zugunsten Dritter) of the group works council of the Companies
(Konzernbetriebsrat VDO AG) or, if no such group works council exists, the general works
council (Gesamtbetriebsrat) of the Companies.

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	15.9	 	In the event that the basis for Purchaser’s undertakings contained in Sections 15.6 and 15.8
changes substantially during the thirty-six (36) months period after the Closing Date, e.g.
through changes in the customer environment, the competitive position or the employment
situation of the Companies (Veränderungen des Kunden-, Wettbewerbs- oder
Beschäftigungsumfelds), the representatives of Purchaser and the Companies shall discuss in
good faith (in gutem Glauben) with the employee representatives with a view to finding a
reasonable solution which avoids site closures or lay-offs of employees for operational
grounds (betriebsbedingte Kündigungen) to the extent possible.

	16.	 	Indemnification of Sellers by Purchaser

	16.1	 	Purchaser and Guarantor shall as joint and several debtors (Gesamtschuldner) indemnify and
hold harmless Sellers and Sellers’ Affiliates and any of their successors, officers,
directors, shareholders, employees and agents from and against any and all losses, liabilities
(whether present or future, actual or contingent), damages and reasonable costs and expenses
(including Taxes, reasonable legal fees, expenses and disbursements) arising out of or in
connection with:

	 	16.1.1	 	all obligations and liabilities (including reasonable legal fees, expenses and
disbursements) arising out of or in connection with any breach of Purchaser’s covenant
pursuant to Section 15.1 above relating to the Sellers’ Securities;

	 	16.1.2	 	any liability in connection with the conduct of the Business (prior to, on or after
the Closing Date) for which Sellers or any of Sellers’ Affiliates or any of their
successors, officers, directors, shareholders, employees or agents are held liable;

	 	16.1.3	 	any claims brought under Section 24 Federal Soil Protection Act
(Bundes-Bodenschutzgesetz), Section 9 (2) Environmental Impairment Act
(UmweltschadensG) or any similar statutory or other claims against Sellers or Sellers’
Affiliates by any of the Companies or any onward buyer of the Business or any
subsequent user of the sites operated by the Companies; or

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	 	16.1.4	 	any obligations or liabilities towards employees of the Business which are supposed
to be transferred to VDO AG under the SAG Contribution Agreement, but are not legally transferred to VDO AG as a result of an
objection to such transfer by the employee (herein “Retained Employee”), to the
extent that such obligations or liabilities relate to periods after the Effective
Date, in particular including severance payments of whatsoever nature payable to
a Retained Employee in connection with its termination, salary payments and
employee benefit payments for periods between the Effective Date and termination
of the respective Retained Employee;

	 	 	in each case unless and to the extent Purchaser has the right to claim damages or
indemnification from Sellers in respect of such losses, liabilities, damages or costs under
the terms of this Agreement (all claims of Sellers under this Section 16.1 herein
collectively “Sellers’ Indemnification Claims”).

	16.2	 	All Sellers’ Indemnification Claims against Purchaser shall be time-barred six (6) months
after Sellers or any of Sellers’ Affiliates have been notified in writing of a claim or
liability giving rise to a Sellers’ Indemnification Claim.

	16.3	 	Section 9.3 and Section 14.2 above shall apply mutatis mutandis to any Sellers’
Indemnification Claims.

	I.	 	GUARANTOR’S GUARANTEE

	17.	 	Guarantor’s Guarantee

	 	 	Guarantor hereby unconditionally and irrevocably guarantees to Sellers the due and punctual
performance of any payment obligations of Purchaser under this Agreement, in particular the
payment of (i) the Purchase Price, (ii) the Intercompany Loan Purchase Price, (iii) any
Sellers’ Indemnification Claims and (iv) the Contractual Penalty or any further claims for
damages, if any, in accordance with Section 6.6 above. Guarantor hereby waives any rights
which it may have to require the Sellers to proceed first against or claim payment from
Purchaser to the intent that as between Sellers and Guarantor the latter shall be liable as
principal debtor as if it had entered into the undertaking to pay any payment obligation
under this Agreement.

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	J.	 	MISCELLANEOUS

	18.	 	Restrictions of Announcement and Confidentiality

	18.1	 	Each of the Parties undertakes that prior to the Closing Date it will not make and cause all
of its Affiliates not to make any announcement in connection with
this Agreement unless (i) required by applicable mandatory laws or stock exchange
regulations or (ii) the other Party has given its consent to such announcement, including
the form of such announcement, which consent may not be unreasonably withheld and may be
subject to conditions. If and to the extent any announcement or disclosure of information
regarding the subject matter of this Agreement is to be made under applicable mandatory laws
or any applicable stock exchange rules, the Party concerned shall, to the extent permissible
under applicable laws or stock exchange regulations, not disclose any such information
without first informing the other Parties thereof.

	18.2	 	The Parties expressly acknowledge and agree that this Agreement and its terms and all
information, whether written or oral, furnished by either Party to the other Party or any
Affiliate of such other Party in connection with the preparation and negotiation of this
Agreement and the due diligence conducted by Purchaser in connection therewith (herein
“Confidential Information”) shall be deemed to be confidential and shall be maintained by each
Party and their respective Affiliates in strict confidence, it being understood that this
shall also apply to any Confidential Information disclosed under Section 9.3 and 9.6 above or
any comparable provisions.

	18.3	 	The receiving Party shall use the same degree of care as it uses with regard to its own
Confidential Information to prevent disclosure, use or publication of the Confidential
Information. Confidential Information of the originating Party shall be held in strict
confidence by the receiving Party unless the receiving Party is able to prove that the
Confidential Information is or has been:

	 	18.3.1	 	obtained legally and freely from a third party without any restrictions;

	 	18.3.2	 	independently developed by the receiving Party at a prior time or in a separate and
distinct manner without benefit of any of the Confidential Information of the
disclosing Party, and documented to be as such;

	 	18.3.3	 	made available by the disclosing Party for general release independent of the
receiving Party;

	 	18.3.4	 	made public as required by applicable laws, regulations, court proceedings or stock
exchange regulations; or

	 	18.3.5	 	within the public domain or later becomes part of the public domain as a result of
acts by someone other than the receiving Party and through no fault or wrongful act of
the receiving Party.

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	18.4	 	A receiving Party may disclose Confidential Information of a disclosing Party to directors,
officers, and employees of the receiving Party or agents of the receiving Party including their respective brokers, lenders or insurance carriers who have
specifically agreed in writing to non-disclosure of the terms and conditions hereof and who
have a need to know such information in connection with the transactions contemplated under
this Agreement. Any disclosure hereof required by legal process pursuant to this Section 18
shall only be made after providing the disclosing Party with notice thereof in order to
permit the disclosing Party to seek an appropriate protective order or exemption. Violation
by a Party or its agents of the foregoing provisions shall entitle the disclosing Party, at
its option, to obtain injunctive relief without a showing of irreparable harm or injury and
without bond. The provisions of this Section 18 shall survive and remain effective for a
period of three (3) years after the Closing Date.

	19.	 	Notices

	 	 	All notices and other communications hereunder shall be made in writing and shall be
delivered or sent by registered mail or courier to the addresses below or to such other
addresses which may be specified by any Party to the other Parties in the future in writing:

	 	 	If to Sellers:
	 
	 	 	Siemens AG

Corporate Finance — Mergers & Acquisitions

Attn. Dr. Martin Bentler

Wittelsbacherplatz 2

D-80333 Munich

Germany
	 
	 	 	with a copy to:
	 
	 	 	Siemens AG

Legal Services — M&A Transactions

Attn.: Dr. Stephan Bühler

Werner-von-Siemens-Straße 50

D-91052 Erlangen

Germany

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	 	 	with a further copy to:
	 
	 	 	Hengeler Mueller

Dr. Hans-Jörg Ziegenhain / Dr. Maximilian Schiessl

Leopoldstraße 8-10

D-80802 Munich

Germany
	 
	 	 	If to Purchaser or Guarantor:
	 
	 	 	Continental AG

Attn.: Head of Law Department, Dr. Christian zur Nedden

Vahrenwalder Straße 9

D-30165 Hannover

Germany
	 
	 	 	with a copy to:
	 
	 	 	Freshfields Bruckhaus Deringer

Dr. Christoph H. Seibt / Dr. Marius Berenbrok

Alsterarkaden 27

D-20354 Hamburg

Germany

	20.	 	Costs, Expenses, Fees and Charges

	20.1	 	All costs, expenses, fees and charges in connection with the transactions contemplated under
this Agreement, including legal services, shall be borne by the Party commissioning the
respective costs, fees and charges. Any costs, expenses and fees (including success fees and
break fees) for services rendered by any of the banks, advisers and accountants listed in
Exhibit 20.1 hereto in connection with the contemplated initial public offering of
            shares of VDO AG shall be borne by Sellers.

	20.2	 	Purchaser shall bear all official fees charged by the antitrust authorities in connection
with the Antitrust Clearances and any sales, transfer or stamp Taxes, or other similar
charges, payable by reason of the transactions contemplated under this Agreement.

	20.3	 	Sellers shall bear the notarial fees incurred with the notarization of this Agreement
including, for the avoidance of doubt, the fees of a notarial accession of one or several Loan
Purchasers in accordance with Section 3.4 above.

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	21.	 	Entire Agreement, Interpretation, Rule of Conflict

	21.1	 	This Agreement comprises the entire agreement between the Parties concerning the subject
matter hereof and supersedes and replaces all oral and written declarations of intention made
by the Parties in connection with the contractual negotiations. Changes or amendments to this
Agreement (including this Section 21.1) must be made in writing by the Parties or in any other
legally required form, if so required.

	21.2	 	All Exhibits and Disclosure Schedules to this Agreement constitute an integral part of this
Agreement.

	21.3	 	In this Agreement the headings are inserted for convenience only and shall not affect the
interpretation of this Agreement; where a German term has been inserted in quotation marks
and/or italics it alone (and not the English term to which it relates) shall be authoritative
for the purpose of the interpretation of the relevant English term in this Agreement. The
terms “including” and “in particular” shall always mean “including, without limitation” and
“in particular, without limitation”, respectively.

	21.4	 	Except as explicitly provided otherwise in Sections 11.6, 11.9 and 14.6 above, this Agreement
shall not supersede or replace or prejudice any of the Contribution Agreements and the terms
and conditions of the Contribution Agreements shall remain unaffected by this Agreement.

	22.	 	No Third Party Rights
	 
	 	 	This Agreement shall not grant any rights to, and are not intended to operate for, the
benefit of third parties unless otherwise explicitly provided for herein. Wherever under
this Agreement any party other than Purchaser is to be indemnified by Sellers, such other
party, in particular the Companies, shall not be entitled to bring any claims for
indemnification against Sellers (kein echter Vertrag zugunsten Dritter).

	23.	 	No Assignment, No Set-off

	23.1	 	No Party shall be entitled to assign any rights or claims under this Agreement without the
written consent of the other Parties.

	23.2	 	No Party, except as provided otherwise herein, shall be entitled (i) to set-off (aufrechnen)
any rights and claims it may have against any rights or claims any
other Party may have under this Agreement or (ii) to refuse to perform any obligation it may
have under this Agreement on the grounds that it has a right of retention
(Zurückbehaltungsrecht) unless the rights or claims of the relevant Party claiming a right
of set-off (Aufrechnung) or retention (Zurückbehaltung) have been acknowledged (anerkannt)
in writing by the relevant other Party/Parties or have been confirmed by final decision of a
competent court (Gericht) or arbitration court (Schiedsgericht).

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	24.	 	Certain Terminology and Terms

	24.1	 	“Business Days” shall be the banking days (Bankarbeitstage) prevailing in Frankfurt am Main,
excluding, for the avoidance of doubt, Saturdays.

	24.2	 	Any currency conversions under or in connection with this Agreement shall be determined using
the following exchange rates: (i) the European Central Bank fixing rates which are published
both by electronic market information providers (e.g. Reuters page ECB37) and on the ECB’s
website www.ecb.int shortly after 2.15 p.m. CET on the relevant date, or (ii) in the event
that such rates are not published on the relevant date, the rates published on the latest day
before the relevant date for which such rates are published, or (iii) if the European Central
Bank generally does not publish exchange rates for a certain currency, the rates published on
the homepage of the Financial Times for the relevant date or the latest day before the
relevant date for which such rates are published, whatever the case may be ((i) through (iii)
herein “Exchange Rates”) . In case cross-rates have to be used where one leg of the currency
pair is not the Euro, these cross-rates will be calculated by taking the corresponding two (2)
fixing rates against the Euro.

	24.3	 	Interest payable under any provision of this Agreement shall be calculated on the basis of
actual days elapsed divided by 360.

	25.	 	Governing Law, Dispute Resolution

	25.1	 	This Agreement shall be governed by, and be construed in accordance with, the laws of the
Federal Republic of Germany, without regard to principles of conflicts of laws and without
regard to the UN Convention on the Sale of Goods.

	25.2	 	All disputes arising under or in connection with this Agreement (including any disputes in
connection with its validity) shall be finally settled by three arbitrators in accordance with
the Arbitration Rules of the German Institution of Arbitration e.V. (DIS) without recourse to
the ordinary courts of law. The venue of the arbitration shall be Munich. The language of the
arbitral proceedings shall be German provided that no translation of English language documents shall be required.

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	26.	 	Invalid Provisions, Unintended Gaps (Salvatorische Klausel)

	26.1	 	In the event that one or more provisions of this Agreement shall, or shall be deemed to, be
invalid or unenforceable, the validity and enforceability of the other provisions of this
Agreement shall not be affected thereby. In such case, the Parties hereto agree to recognize
and give effect to such valid and enforceable provision or provisions, which correspond as
closely as possible with the commercial intent of the Parties.

	26.2	 	The same shall apply in the event that this Agreement contains any unintended gaps
(unbeabsichtigte Vertragslücken).

	 	 	 	Read out aloud to the parties by the acting notary;

respectively in presence of the notary; agreed by the

parties and signed by them as follows:

	 	 	 
	 

	 	EXECUTED by the parties
	 
	 	 
	 

	 	Signed by

for and behalf of

Siemens Aktiengesellschaft
	 
	 	 
	 

	 	Signed by

for and behalf of

Siemens International Holding B.V.
	 
	 	 
	 

	 	Signed by

for and behalf of

Siemens Beteiligungen U.S.A. GmbH
	 
	 	 
	 

	 	Signed by

for and behalf of

CAS Two Holdinggesellschaft mbH
	 
	 	 
	 

	 	Signed by

for and behalf of

Continental Aktiengesellschaft

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