TAX SHARING AGREEMENT

Exhibit 10.1

TAX SHARING AGREEMENT

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

RECITALS

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

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

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

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

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

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

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

ARTICLE I. DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II. TAX RETURNS AND TAX PAYMENTS

2.01 OBLIGATIONS TO FILE TAX RETURNS.

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

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

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