STUTTGART, Germany -- Daimler AG, Chrysler, Cerberus and the U.S. Pension Benefit Guaranty Corporation (PBGC) have signed a binding agreement under which Daimler's remaining 19.9 percent shareholding in Chrysler will be redeemed and Daimler will forgive repayment of the loans extended to Chrysler, which were already written off in the 2008 financial statements.

In addition, Daimler has agreed to pay $200 million into Chrysler's pension plans on the date of the execution of definitive agreements and in each of the next two years. This will help Daimler to secure pension payments to former employees of DaimlerChrysler. The existing pension guaranty of $1 billion vis-a-vis the PBGC will be reduced to an amount of $200 million and will remain in place until August 2012.

Chrysler and Cerberus said they will waive any claims that might arise from representations and warranties made in am Aug. 3, 2007 transaction, including the accusations made against Daimler in 2008 that Daimler allegedly improperly managed certain issues in the period between the signing of the agreement and the conclusion of the transaction. This also applies to the accusation that incomplete information was provided on the transaction.

Following the transfer of the term sheet into the final definitive agreements, the relationship between Daimler and Chrysler will solely consist of supplier-customer relations, including limited support for certain dealer financing until the end of September, as well as certain guaranties.

The effect on EBIT resulting from this agreement, which will be reflected in Daimler's financial statements for the second quarter of 2009, is estimated at up to $0.7 billion. The payments to be made in the years 2009 through 2011 amount to $200 million per year.