Prospectus dated 16 September 2010

Rheinmetall Aktiengesellschaft

(a stock corporation (Aktiengesellschaft) under the laws of the Federal Republic of Germany ("Germany"))

€ [●] Fixed Rate Notes of 2010/2015 (the "2015 Notes" or the "Notes" where the context so requires) - or - € [●] Fixed Rate Notes of 2010/2017 (the "2017 Notes" or the "Notes" where the context so requires)

For the avoidance of doubt, the Issuer will either issue the 2015 Notes or the 2017 Notes. After the pricing of the Notes (i.e. on or around 16 September 2010), the Issuer will decide which tranche of Notes (i.e. the 2015 Notes or the 2017 Notes) will be issued. Relevant details of the relevant tranche of Notes will be published in the Pricing Notice (for further information see "Subscription and Sale").

Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF"), in its capacity as the competent authority under the Luxembourg "Act on Securities Prospectuses" (loi relative aux prospectus pour valeurs mobilières) (the "Luxembourg Act"), which implements Directive 2003/71/EC (the "Prospectus Directive"), for its approval of this prospectus (the "Prospectus"). The CSSF is the competent authority under the Luxembourg Act with regard to the public offer described in the Prospectus.

Rheinmetall Aktiengesellschaft (the "Issuer" or "Rheinmetall AG" and, together with its consolidated subsidiaries, "Rheinmetall", the "Rheinmetall-Group" or the "Group") has requested the CSSF to provide the competent authorities in Germany, the Republic of Austria ("Austria") and The Netherlands with a certificate of approval attesting that the Prospectus has been drawn up in accordance with the Luxembourg Act (the "Notification"). The Issuer may request the CSSF to provide competent authorities in additional host member states within the European Economic Area with a Notification.

This Prospectus has been approved by the CSSF, has been filed with said authority and will be published in electronic form on the website of the Luxembourg Stock Exchange (www.bourse.lu).

Application has been made for admission to listing of the Notes on the official list of the Luxembourg Stock Exchange and to trading of the Notes on the regulated market of the Luxembourg Stock Exchange (Bourse de Luxembourg) which is a regulated market in the meaning of Directive 2004/39/EC.

This Prospectus constitutes a prospectus for purposes of Article 5.3 of the Prospectus Directive and Article 8.3 of the Luxembourg Act.

Joint Lead Managers

Crédit Agricole Deutsche Bank UniCredit Bank

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RESPONSIBILITY STATEMENT

Rheinmetall AG with its registered office at Rheinmetall Platz 1, 40476 Düsseldorf, Germany, assumes responsibility for the contents of this Prospectus, including any documents incorporated by reference herein, and hereby declares that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import.

This Prospectus should be read and understood in conjunction with any supplement hereto and with any other documents incorporated herein by reference.

The Issuer has confirmed to the managers set forth in the section "Address List" (each a "Manager" and together, the "Managers") that this Prospectus contains the information which, according to the particular nature of the Issuer and of the Notes, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the Issuer, and of the rights attaching to the Notes; that the information contained herein with respect to the Issuer and the Notes is accurate in all material respects and is not misleading; that any opinions and intentions expressed herein are honestly held and based on reasonable assumptions; that there are no other facts, the omission of which would make any statement, whether fact or opinion, in this Prospectus misleading in any material respect; and that all reasonable enquiries have been made to ascertain all facts and to verify the accuracy of all statements contained herein.

No representation, warranty or undertaking, whether expressed or implied, is made, and no responsibility is accepted, by the Managers with respect to the accuracy or completeness of this Prospectus, any supplement thereto or any further information supplied in connection with the Notes. The Managers accept no liability in relation to this Prospectus, any supplement thereto or its distribution or with regard to other information supplied by the Issuer herein, save for mandatory provisions of law.

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IMPORTANT NOTICE

General

This Prospectus should be read and understood in conjunction with the documents incorporated by reference herein.

This Prospectus may only be used for the purpose for which it has been published. The distribution of this Prospectus and the offering, sale and delivery of the Notes in certain jurisdictions may be restricted by law. The publication and distribution of this Prospectus constitute neither an offer nor an invitation to submit an offer to persons in jurisdictions in which such an offer or such an invitation to submit offers are not permitted, or to persons to whom making such an offer or such an invitation to submit offers is prohibited by law.

Persons into whose possession this Prospectus, including any documents incorporated by reference herein, comes are required to inform themselves about and observe any such restrictions. For a description of restrictions applicable in the United States of America and the European Economic Area and certain restrictions addressing additional securities laws of the United Kingdom and Italy, see "Selling Restrictions".

In particular, the Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, (the "Securities Act") and are subject to tax law requirements of the United States of America; subject to certain exceptions, the Notes may not be offered, sold or delivered within the United States of America or to U.S. persons.

Exclusiveness

No person is authorised to provide any information or make any representations whatsoever in connection with the issue of the Notes that deviate from those contained in this Prospectus including any documents incorporated by reference herein. If such other information is nonetheless provided or other representations are made, these should not be considered authorised by the Issuer or the Managers (as defined herein). Neither the distribution of this Prospectus, nor any sale in connection with the Prospectus, is intended under any circumstances to give the impression that the information contained in this document is accurate at any time after the date of this Prospectus.

In this Prospectus, all references to "€", "EUR" or "euro" are to the single currency of the member states of the European Union (each an "EU Member State" and together, the "EU Member States") participating in the third stage of the European Economic and Monetary Union.

Requirements

This Prospectus contains at the date hereof all information which, according to the nature of the Issuer and the Notes, respectively, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the Issuer and of the rights attached to the Notes.

Significance of Delivery

Neither the delivery of this Prospectus, any documents incorporated by reference herein nor the offering, sale or delivery of any Note shall, in any circumstances, imply that there has been no adverse change in the financial situation of the Issuer since the date hereof.

The delivery of this Prospectus, any documents incorporated by reference herein or the offering, sale or delivery of the Notes does not at any time imply that the information contained herein concerning the Issuer is correct

- 4 - subsequent to the date hereof or that any other written information delivered in connection therewith is correct subsequent to the date indicated in the document containing the same.

Exclusion

This Prospectus does not constitute an offer or an invitation to subscribe for or purchase any Notes and should not be considered as a recommendation by the Issuer or the Managers that any recipient of this Prospectus should subscribe for or purchase any Notes. Each recipient shall be deemed to have made its own investigation and appraisal of the financial condition and affairs as well as of the creditworthiness of the Issuer. This Prospectus may not be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. This Prospectus is not intended to provide the basis of any credit or other evaluation.

Stabilisation

In connection with the Notes, Deutsche Bank acting as the stabilising manager (the "Stabilising Manager") (or persons acting on behalf of the Stabilising Manager) may over-allot the Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant tranche of Notes and 60 days after the date of the allotment of the relevant tranche of Notes.

Any stabilisation action or over-allotment must be conducted by the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) in accordance with all applicable laws and regulations.

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TABLE OF CONTENTS

RESPONSIBILITY...... 3

IMPORTANT NOTICE ...... 4

SUMMARY OF THE PROSPECTUS ...... 7 Summary of the Terms and Conditions of the Notes and General Information ...... 7 Summary of the Description of the Issuer ...... 10 Summary of the Risk Factors ...... 12 Summary of the Risks relating to the Notes ...... 13 Summary of the Risks relating to the Issuer...... 14 GERMAN LANGUAGE VERSION OF THE SUMMARY OF THE PROSPECTUS ...... 18 Zusammenfassung der Informationen in Bezug auf die Schuldverschreibungen und Allgemeine Informationen ...... 18 Zusammenfassung der Emittentenbeschreibung ...... 22 Zusammenfassung der Risiken in Bezug auf die Schuldverschreibungen ...... 24 Zusammenfassung der Risiken in bezug auf die Emittentin...... 25 RISK FACTORS ...... 29 Risks relating to the Notes...... 29 Risks relating to the Issuer...... 32 DESCRIPTION OF THE ISSUER...... 43

TERMS AND CONDITIONS OF THE NOTES ...... 57

ANLEIHEBEDINGUNGEN ...... 69

GENERAL INFORMATION...... 82 Key information...... 82 Information concerning the Notes ...... 82 Incorporation by Reference ...... 84 Documents on Display...... 85 TAXATION...... 86

SUBSCRIPTION AND SALE...... 90

SELLING RESTRICTIONS ...... 92

ADDRESS LIST...... 95

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SUMMARY OF THE PROSPECTUS

The following constitutes the summary (the "Summary") of the essential characteristics and risks associated with Rheinmetall-Group (as defined below) and the € [●] Fixed Rate Notes of 2010/2015 (the "2015 Notes" or the "Notes" where the context so requires) and the € [●] Fixed Rate Notes of 2010/2017 (the "2017 Notes" or the "Notes" where the context so requires). This Summary should be read as an introduction to this Prospectus. Any decision by an investor to invest in the Notes should be based on consideration of this Prospectus as a whole, including the documents incorporated by reference and supplements thereto. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of such court, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liability attaches to the Issuer who has tabled this Summary including any translation thereof, and applied for its notification, but only if the Summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus. The following description of certain general features of the Notes does not purport to be complete and is taken from and qualified in its entirety by the remainder of this Prospectus.

Words and expressions defined in other parts of this Prospectus and not otherwise defined in this part of the Prospectus shall have the same meanings in this part of the Prospectus.

Summary of the Terms and Conditions of the Notes and General Information

Issuer: ...... Rheinmetall Aktiengesellschaft (the "Issuer" or "Rheinmetall AG" and, together with its consolidated subsidiaries, "Rheinmetall", the "Rheinmetall-Group" or the "Group")

Joint Lead Managers:...... Crédit Agricole Corporate and Investment Bank S.A. Deutsche Bank AG, London Branch UniCredit Bank AG

(together, the "Joint Lead Managers" and together with any co-managers, if any, the "Managers")

Aggregate Principal Amount:...... 2015 Notes: € [●]

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2017 Notes: € [●]

Specified Denomination:………... € 1,000

Currency:...... Euro ("EUR", "€")

Issue Date:...... 22 September 2010

Interest:...... The 2015 Notes shall bear interest on their principal amount at the Rate of Interest (as defined below) per annum from, and including, the Issue Date to, but excluding, the Maturity Date. Interest shall be payable in arrear on 22 September in each year (each such date, an "Interest Payment Date"). The first Interest Payment Date shall be 22 September 2011 (the "First Interest Payment Date").

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"Rate of Interest" means an amount expressed as a percentage, as determined between the Issuer and the Managers and as published in a notice on the website of the Luxembourg Stock Exchange (www.bourse.lu) on or around 20 September 2010 (the "Pricing Notice").

The Terms and Conditions provide for a step-up of the rate of interest subject to certain requirements being satisfied.

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The 2017 Notes shall bear interest on their principal amount at the Rate of Interest (as defined below) per annum from, and including, the Issue Date to, but excluding, the Maturity Date. Interest shall be payable in arrear on 22 September in each year (each such date, an "Interest Payment Date"). The first Interest Payment Date shall be 22 September 2011 (the "First Interest Payment Date").

"Rate of Interest" means an amount expressed as a percentage, as determined between the Issuer and the Managers and as published in a notice on the website of the Luxembourg Stock Exchange (www.bourse.lu) on or around 20 September 2010 (the "Pricing Notice").

The Terms and Conditions provide for a step-up of the rate of interest subject to certain requirements being satisfied.

Maturity Date:...... Unless previously redeemed in whole or in part or purchased and cancelled, the 2015 Notes will be redeemed at their principal amount on 22 September 2015.

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Unless previously redeemed in whole or in part or purchased and cancelled, the 2017 Notes will be redeemed at their principal amount on 22 September 2017.

Issue Price: ...... The issue price of the Notes (the "Issue Price") will be determined between the Issuer and the Managers on the basis of a bookbuilding process and will be published in the Pricing Notice.

Form: ...... The Notes will be issued in the format of a "new global note". The Notes will initially be represented by a temporary global bearer note (the "Temporary Global Note"), without interest coupons, which will be deposited with a common safekeeper for both Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream Luxembourg", and, together with Euroclear, the "ICSDs") on or around the Issue Date. The Notes have been accepted for clearance through Euroclear and Clearstream Luxembourg. Except as otherwise described herein, interests in the Temporary Global Note will be exchangeable for interests in a permanent global note (the "Permanent Global Note" and, each of the Temporary Global Note and the Permanent Global Note, a "Global Note" and, together, the "Global Notes") without interest coupons, not earlier than 40 days after the Issue Date upon certification as to non-U.S. beneficial ownership (subject to certain exceptions set forth in the certification).

The Notes are intended to be held in a manner which will allow Eurosystem eligibility. This simply means that the Notes are intended upon issue to be - 8 -

deposited with one of the ICSDs as common safekeeper and does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue or at any or all times during their life. Such recognition will depend on satisfaction of the Eurosystem eligibility criteria.

The Notes are being issued in bearer form and will not be represented by definitive Notes.

Principal Paying Agent:...... Deutsche Bank Aktiengesellschaft

Paying Deutsche Bank Luxembourg S.A. Agent……………………..

Luxembourg Listing Agent: ...... Deutsche Bank Luxembourg S.A.

Status:...... The Notes constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer ranking pari passu among themselves and pari passu with all other unsecured and unsubordinated obligations of the Issuer, present and future, unless such obligations are accorded priority under mandatory provisions of statutory law.

Taxes: All payments of principal and interest will be made without any withholding or deduction by the Issuer at source of any present or future taxes, duties, assessments or governmental charges of whatever kind which are imposed, levied or collected by or in or on behalf of a regional or local authority empowered to impose taxes therein unless the Issuer is required by law to make such withholding or deduction. In that event, the Issuer will pay such additional amounts as may be necessary to ensure the payment to the Noteholders of the full nominal amount of principal and interest, subject to customary exceptions set out in the terms and Conditions of the Notes.

Early Redemption: ...... If, as a result of any change in, or amendment to, the laws or regulations prevailing in Germany, certain withholding taxes are levied on payments of principal or interest in respect of the Notes and the Issuer is obliged to pay Additional Amounts (as defined in § 5 of the Terms and Conditions of the Notes), the Issuer may redeem the Notes in whole, but not in part.

Events of Default: ...... The Terms and Conditions of the Notes provide for certain events of default entitling the Noteholders to demand an early redemption of the Notes.

Cross-Default:…………………… The Terms and Conditions of the Notes provide for a cross-default provision.

Negative Pledge: ...... The Terms and Conditions of the Notes provide for a negative pledge provision.

Change of Control:……………… The Terms and Conditions of the Notes provide for a change of control provision.

Restrictions on asset The Terms and Conditions of the Notes provide for certain restrictions on the disposals:………………………. Issuer to dispose of certain of its assets.

Resolutions of Noteholders:……. The Terms and Conditions of the Notes may be amended by the Issuer with the consent of the Noteholders upon a majority vote pursuant to §§ 5 of the Act on Debt Securities of 2009 (Schuldverschreibungsgesetz aus - 9 -

Gesamtemissionen - "SchVG"), as amended from time to time. The Noteholders may agree on amendments with material effect on the Terms and Conditions of the Notes with the majority specified in § 12 (c)(i) of the Terms and Conditions of the Notes including any measures in accordance with §5 paragraph 3 SchVG. Resolutions by majority shall be binding on all Noteholders. Resolutions which do not provide for identical conditions for all are void, unless the Noteholders who are disadvantaged have expressly agreed upon their disadvantageous treatment.

Notesholders' Representative:… According to the Terms and Condtions of the Notes, Deutsche Bank Aktiengesellschaft, Grosse Gallusstrasse 10 – 14, 60272 Frankfurt am Main, Germany has been appointed as representative for all Noteholders (the "Noteholders' Representative"). The responsibilities and functions assigned to the Noteholders' Representative are determined by the relevant provisions of the Terms and Conditions.

Offer of the Notes:...... The Notes will be sold to institutional investors and retail investors in compliance with the public offer restrictions in force. A public offer will be made in Luxembourg, Germany, Austria and The Netherlands following the effectiveness of the Notification of the Prospectus by the CSSF.

Governing Law: ...... The Notes are governed by German law.

Jurisdiction:……………………… Non-exclusive place of jurisdiction for any legal proceedings arising under the Notes is Frankfurt am Main, Germany.

Listing and Trading of the Notes:.. Application has been made to admit the Notes to listing on the official list of the Luxembourg Stock Exchange and to trading on the regulated market of the Luxembourg Stock Exchange (Bourse de Luxembourg).

Rating of the Notes: ...... Expected provisional rating of Baa3 by Moody’s Investors Service, Inc.

Securities Codes:...... 2015 Notes:

ISIN: XS0543373962 Common Code: 054337396 German Securities Code (WKN): A1EWPS

2017 Notes:

ISIN: XS0542369219 Common Code: 054236921 German Securities Code (WKN): A1EWSC

Summary of the "Description of the Issuer"

Rheinmetall Aktiengesellschaft (the "Issuer" or "Rheinmetall AG" and, together with its consolidated subsidiaries, "Rheinmetall", the "Rheinmetall-Group" or the "Group") is a publicly listed stock corporation (Aktiengesellschaft) organised under German law and registered in the commercial register (Handelsregister) of the Düsseldorf local court under HRB 39401. Its registered office is in Düsseldorf, Germany, which is also the location of the Group's headquarters. The head office is located at Rheinmetall Platz 1, 40476 Düsseldorf, Germany; its telephone number is: +49 (0)211 473 01.

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The Issuer was established on 13 April 1889 as "Rheinische Metallwaaren und Maschinenfabrik Actiengesellschaft", operated as "Rheinmetall Berlin Aktiengesellschaft" from 1956 until 1996, when it changed its name to its current name "Rheinmetall Aktiengesellschaft".

The Issuer is the strategic management and financial holding company of the Rheinmetall Group, consisting of the corporate sectors defence (the "Defence Sector") and automotive (the "Automotive Sector"). The Issuer assumes strategic responsibilities on behalf of the entire Group, including in respect of finance, accounting, investor relations and corporate communications, tax, legal and human resources, and, together with its wholly-owned subsidiary Rheinmetall Immobiliengesellschaft mbH, also manages the real estate portfolio of the Group. As at 31 December 2009 and 30 June 2010, the Issuer employed 107 and 105 personnel, respectively.

The Defence Sector is one of the leading European suppliers of army technology and offers a wide range of systems and components of armoured and other military vehicles (including the infantry fighting vehicle Puma, the reconnaissance and combat vehicle Fuchs and the transport vehicle Boxer), weapons and ammunition (including the main armament of the Leopard 2 tank), propellants, air defence and defence electronics. The operations of the Group's Defence Sector are organised into six divisions: Land System, Weapon and Munition, Propellants, Air Defence, C4ISTAR, Simulation and Training. With sales of € 1,898 million in 2009, the Defence Sector generated 55% of the Group's total sales for fiscal year 2009 (€ 1,814 million or 47% in fiscal year 2008); in the first six months ended 30 June 2010, the Defence Sector had sales of € 762 million (€ 789 million in the first six months in fiscal year 2009).

Kolbenschmidt Pierburg AG is the management company of the Group's Automotive Sector (the "Kolbenschmidt Pierburg-Group"). The Kolbenschmidt Pierburg-Group is a major supplier of the automotive industry worldwide and develops, produces and supplies power train components and sub-systems in close cooperation with its customers and strategic alliance and joint venture partners in production locations in Europe, North and South America and Asia. The headquarters of the Kolbenschmidt Pierburg Group are located in Neckarsulm, Germany. The Kolbenschmidt Pierburg-Group comprises the following six divisions: KS Kolbenschmidt, Pierburg, Pierburg Pump Technology, KS Aluminium-Technologie, KS Gleitlager and Motor Service. With sales of € 1,522 million in 2009, the Automotive Sector generated 45% of the Group's total sales for fiscal year 2009 (€ 2,055 million or 53% fiscal year 2008); in the first six months ended 30 June 2010, the Automotive Sector had sales of € 966 million (€ 717 million in the first six months in fiscal year 2009).

In the first six months of fiscal year 2010, investments in property and equipment (Sachanlagevermögen) and intangible assets (immaterielle Vermögenswerte) amounted to € 80 million (first six months in fiscal year 2009: € 71 million).

In April 2010, the joint venture between Rheinmetall and MAN Nutzfahrzeuge AG ("MAN") – Rheinmetall MAN Military Vehicles GmbH ("RMMV") – was cleared by the relevant competition authorities. Moreover, in July 2010, the Issuer acquired 100% of the shares and voting rights in SIMRAD Optronics ASA of Nøtterøy, Norway. Also, effective 1 July 2010, the Rheinmetall-Group took up 51% in Verseidag Ballistic Protection GmbH and expects to take over the defence business operations and assets of French EPC Group's Italian subsidiary Società Esplosivi Industriali SpA.

The current members of the Issuer’s Executive Board are Klaus Eberhardt (CEO), Dr. Gerd Kleinert and Dr. Herbert Müller (CFO).

Currently, no shareholder holds more than 5% of the voting rights of the Issuer, save only for two Fidelity Investment funds who notified the Issuer on 2 June 2010 that they hold an aggregate of 6.6% of the voting rights in the Issuer.

Save as disclosed in this Prospectus, there has been no material adverse change in the prospects of the Issuer since 31 December 2009. There has been no significant change in the financial or trading position of Rheinmetall Group since the date of the last published unaudited interim report (30 June 2010).

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The independent auditor of the Issuer, PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, has audited the annual consolidated financial statements prepared by the Issuer as of and for fiscal year ended 31 December 2008 and 31 December 2009, respectively, and has rendered, in each case, an unqualified auditor's report thereon (uneingeschränkter Bestätigungsvermerk).

The following table sets out selected financial information relating to the Rheinmetall-Group:

Period from Period from Fiscal Year ended Fiscal Year ended 1 January 1 January 31 December 2009 31 December 2008 until 30 June until 30 June 2010 2009 (unaudited) (unaudited) (audited) (audited) (in € million)

Sales 1,728 1,506 3,420 3,869 Order backlog 5,247 3,826 4,940 3,683 Total operating performance 1,862 1,566 3,395 3,927 Net operating income 98 (63) 13 243* EBITDA 178 28 180 411* EBIT 104 (62)* 15 245* EBT 78 (89)* (46) 193* Net income 57 (70)* (52) 142* Cash flows 134 25* 120 308*

30 June 2010 31 December 2009 31 December 2008 (unaudited) (audited) (audited) (in € million) Equity 1,210 1,134 1,080* Balance sheet totals 3,869 3,835 3,612* Non-current financial liabilities 179 180 360 Current financial liabilities 284 353 48 Cash and cash equivalents 125 557 203 Employees (capacities) as at balance sheet date 20,181 19,766 21,020

* Since December 31, 2009 actuarial gains and losses arising in connection with the valuation of pension obligations and associated plan assets have been recognised directly in equity. The amendment to accounting affects the balance sheet, income statement and income and expenses recognised in equity, but not the cash flow statement. The presentation of the cash flow statement was amended to the effect that the balance of interest paid and received is not longer allocated to financing activities but is instead included in the cash flow from operating activities. Prior-year comparatives have been adjusted accordingly.

Summary of the Risk Factors

An investment in the Notes involves certain risks relating to the Issuer and the Notes. While all of these risk factors are contingencies which may or may not occur, potential investors should be aware that (i) the ability of the Issuer to fulfil its obligations under the Notes may affect the risks associated with investing in the Notes and/or (ii) a decrease in the market value of the Notes whereby the market value falls short of the expectations (financial or otherwise) of a Noteholder upon making an investment in the Notes may lead to a volatility in the Notes.

Potential investors should consider two main categories of risks, "Risks Relating to the Notes" and "Risks Relating to the Issuer", a summary of which is set out below:

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Summary of the Risks relating to the Notes

Risk Factors relating to the Notes comprise, inter alia, the following risks:

The market value of the Notes may decrease if the creditworthiness of the Issuer worsens: The materialisation of any of the risks referred to below (see "Summary of the Risks relating to the Issuer") may affect the Issuer’s ability fully to perform all obligations under the Notes when they fall due in which case the market value of the Notes may suffer.

The market value of the Notes may decrease if the interest rate level for durations equal to the remaining term of the Notes increases: If interest rates in general or particularly with regard to obligations of corporate debtors or corporate debtors with activities in the industries sector for durations equal to the remaining term of the Notes increase, the market value of the Notes may decrease.

Rating of the Notes: A rating of the Notes, if received at all, may not adequately reflect all risks of the investment in the Notes. Equally, ratings may be suspended, downgraded or withdrawn. Such suspension, downgrading or withdrawal may have an adverse effect on the market value and trading price of the Notes.

There may not be a market for the Notes: Even if a listing is granted, there can be no assurance that there will be sufficient liquidity in the market. If such risks were to materialise, Noteholders may not be able to sell their Notes at fair market value or at all.

Inflation risk: The real yield from an investment is reduced by inflation. The higher the rate of inflation, the lower the real yield on the Notes. If the inflation rate is equal to or higher than the nominal yield, the real yield is zero or even negative.

Credit risk: Noteholders are subject to the risk of a partial or total failure of the Issuer to make interest and/or redemption payments that the Issuer is obliged to make under the Notes. A materialisation of the credit risk may result in partial or total failure of the Issuer to make interest and/or redemption payments.

Risk of early redemption: Noteholders may be exposed to risks connected to the reinvestment of cash proceeds from the sale or early redemption of any Note.

Transaction costs/charges: Incidental costs may significantly reduce or eliminate any profit from holding the Notes.

Suitability: Potential investors should determine whether an investment in the Notes is appropriate in their particular circumstances and should consult with their legal, business and tax advisers to determine the consequences of an investment in the Notes and to arrive at their own evaluations of the investment. If an investment is not suitable for the respective investor, such investor may not take all or some risks inherent with an investment in the Notes into consideration before making an investment decision.

Taxation: Potential purchasers and sellers of the Notes should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Notes are transferred or other jurisdictions.

Independent Review and Advice: A potential investor may not rely on the Issuer, the Managers or any of their respective affiliates in connection with its determination as to the legality of its acquisition of the Notes or as to the other matters referred to above. Without independent review and advice, an investor may not adequately understand the risks inherent with an investment in the Notes and may lose parts or all of his capital invested without taking such or other risks into consideration before investing in the Notes.

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Risks in connection with the application of the German Act on Issues of Debt Securities (Gesetz über Schuldverschreibungen aus Gesamtemissionen): A Noteholder is subject to the risk of being outvoted and of losing rights towards the Issuer against his will in the case that Noteholders agree to amendments of the Terms and Conditions of the Notes by majority vote according to the German Act on Issues of Debt Securities. The Issuer has appointed a Noteholders’ Representative for all Noteholders and as such a particular Noteholder may lose, in whole or in part, the possibility to enforce and claim his rights against the Issuer regardless of other Noteholders.

Summary of the Risks relating to the Issuer

The business of the Rheinmetall-Group and, as a result, the value of the Notes, are exposed to a number of risks which – if they were to materialise – could materially adversely affect Rheinmetall's business, financial position and results of operations. Those risks may be related mainly to factors, current or future developments or other circumstances in the following areas:

- General – Development of innovative products: The future success of the Rheinmetall-Group depends on its ability to develop and bring to the market new and improved products in a timely manner. The automotive market and the defence market entail technical challenges, the mastering of which could make the development by the Group of innovations time consuming. Consequently, Rheinmetall may be unable to further develop and adapt innovative products quickly enough.

- General – Liquidity position is cyclical: Rheinmetall's liquidity position is cyclical, primarily, as a result of the payment behaviour of customers in the Defence Sector (such as a decrease in advance payments). The general lack of liquidity, caused by the disruptions in the financial markets, potentially combined with future downgrades of Rheinmetall's credit rating as well as ethical factors relating to the Group's Defence Sector, could adversely impact the Group's ability to secure additional debt financing or increase the costs of additional debt financing.

- General – Changes in foreign exchange rates and hedging: Rheinmetall operates worldwide and is thus exposed to financial risks that arise from changes in exchange rates. The Group's hedging strategy could ultimately prove to be (partially) unsuccessful.

- General – Warranty and product liability claims: Rheinmetall is exposed to potential product liability lawsuits and other proceedings alleging violations of due care, violation of warranty obligations, treatment errors and claims arising from breaches of contract, recall campaigns or fines imposed by governmental bodies.

- General – Acquisition, joint ventures and strategic alliances: Acquisitions, joint ventures and strategic alliances are an important element of the internationalisation and growth strategy of the Rheinmetall-Group. The discontinuation of one or more joint ventures or strategic alliances, or the inability of Rheinmetall to enter into new or to expand existing joint ventures or strategic alliances, could adversely affect the Group's business, results of operations and financial condition.

- General – Supplier and other counterparty default: In its Defence Sector, Rheinmetall sources parts of its raw materials from local suppliers in the markets into which it imports its products, while it follows its customers in the Automotive Sector, where it sources most of its supplies in the country where it produces its products. If one or more of Rheinmetall's suppliers were unable to meet its delivery obligations for any reason (for example, insolvency, destruction of production plants or refusal to perform following a change in control), Rheinmetall may be unable to source raw materials from other suppliers upon short notice at the required volume and/or quality.

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- General – Demand for qualified key personnel: The success of the Rheinmetall-Group depends on its ability to hire and retain qualified executives as well as a wide variety of employees in key functions and specialists.

- General – Holding structure of the Issuer: The Issuer is the Group's holding company. It generates income mainly from the allocation of costs within the Group, rent and interest payments as well as the distribution of dividends or transfer of profits by its subsidiaries and joint ventures as well as, where applicable, proceeds from the disposal of shareholdings. Therefore, the ability of the Issuer to fulfil its obligations under the Notes depends on the ability of its subsidiaries and joint ventures to pay for the Issuer's central holding company services and to distribute dividends or to transfer profits to the Issuer.

- General – Dependence on the protection of its intellectual property rights and business secrets: The commercial success of the Rheinmetall-Group depends on its ability to maintain the competitiveness of its products and to ensure high technological standards. The Group is thus exposed not only to the risks associated with the protection of its own IP rights and business secrets but also with its dependence on third-party technologies.

- Risks associated with the complexity of the business conducted by the Group: Unexpected technical obstacles, problems with partners or subcontractors and delays in acceptance and invoicing could have a negative impact on the Group's business, results of operations and financial condition.

- General – IT and data protection risks: The Group relies on centralised and decentralised, standardised and individual, highly integrated information technology systems, processes and networks to support business processes and external and internal communications. These systems, processes and networks are potentially vulnerable to damage or interruption from a variety of sources which could severely compromise the management of the Group's or a single Group company's business and production processes.

- General – Ownership of production facilities bears environmental risks: The majority of the land owned or rented and occupied by the Rheinmetall-Group has been, and continues to be, used for industrial and production purposes and is thus inherently subject to possible contamination and the Issuer has made provision in its financial statements for any contamination that has been ascertained on the Group's properties.

- General – Property loss and business interruption: The consequences of damage and loss caused by fire, natural hazards, supply shortage, or other disturbances at Rheinmetall's production facilities or within the Group's supply chains — with customers and with suppliers — can be severe.

- General – Procurement and price fluctuation risks in respect of raw materials: The raw materials, parts and components required for the business of the Rheinmetall-Group may not be available at all, or in the quality or quantity required, or in time. The Rheinmetall-Group is also exposed to fluctuations in prices of raw materials.

- General – Fluctuation in prices for energy: The Rheinmetall-Group depends on large quantities of energy for production purposes and is thus affected by changes in energy prices. The Rheinmetall-Group might be unable to secure a supply of energy at cost-efficient prices or to compensate for or pass on its increased costs resulting from increased energy prices to customers.

- Defence – Dependence on government spending: Defence technology is a very political area and Rheinmetall conducts most of its business with government customers and security agencies, in particular, in the defence markets in Germany and the rest of Europe. While the Group expects global military spending to remain stable in the short to medium term, a reduction in defence budgets in Germany or elsewhere in Europe as well as a more restrictive budgetary policy or the earmarking of

- 15 -

specific major projects without a concurrent increase in military spending could adversely affect Rheinmetall's business, results of operations and financial condition.

- Defence – Complex legal and regulatory framework: Many of the Defence Sector's business activities are subject to a complex legal and regulatory environment which is constantly evolving both at national and international level. Rheinmetall may not be able to anticipate developments within the legal and regulatory framework.

- Defence – Restricted access to military markets due to export controls: Product exports account for a substantial portion of the Defence Sector's sales. All product exports from Germany require an export licence under the War Weapons Control Act (Kriegswaffenkontrollgesetz) and/or Foreign Economic Relations Act (Außenwirtschaftsgesetz)/Foreign Economic Relations Regulation (Außenwirtschaftsverordnung) and export licences will be granted or refused depending on the country of importation. Exports from production locations outside of Germany are subject to export control rules and regulations as applicable in the relevant jurisdictions.

- Defence – Reputational risks: Due to the nature of the Defence Sector's business activities, Rheinmetall is subject to reputational risks.

- Automotive – Significant impact of global economy on sales to original equipment manufacturers ("OEMs"): The Automotive Sector generates a large percentage of its sales from OEMs who, in turn, depend on the development of the global economy, including, among other things, demand for automotives and income available for consumer spending.

- Automotive – Cyclical industry: Global production of vehicles and (as a result) sales to OEMs (from whom the Automotive Sector currently generates more than half of its sales) are cyclical and depend, among other things, on general economic conditions and consumer spending and preferences, which can be affected by a number of factors, including fuel costs and the availability of consumer financing. Future developments in the markets in which the Automotive Sector operates are difficult to predict and there is a risk that the Automotive Sector's facilities are underutilised or have insufficient capacity to meet customer demand if the markets in which the Automotive Sector is active either grow or decline faster than anticipated.

- Automotive – Intense competition could reduce Rheinmetalls’s sales or put continued pressure on its sales prices: The automotive supply industry is highly competitive and has been characterised by rapid technological change, high capital expenditures, intense pricing pressure from major customers, periods of oversupply and continuous advancements in process technologies and manufacturing facilities. As OEMs are increasingly affected by innovation and cost-cutting pressures from competitors, they seek price reductions in both the initial bidding process and during the term of the contract with their suppliers, such as the Automotive Sector. The Automotive Sector's existing competitors may pursue aggressive pricing policies and offer conditions to OEMs that are more favourable than Rheinmetall's.

- Automotive – Risks associated with market trends and development could affect the vehicle mix sold by OEMs: In fiscal year 2009, the Group generated more than half of its sales from OEMs. Global production of vehicles and consequently sales to OEM customers are currently subject to a number of trends and technical developments that may affect the vehicle mix sold by and thus the sales to OEMs.

- Legal – Corporate restructurings and claims brought by outside shareholders / shareholder actions: The Group is currently subject to three legal proceedings that have been initiated by outside shareholders with a view to reviewing the suitability of the share exchange ratio and the amount of cash compensation offered to them in connection with restructuring measures (squeeze-outs) in accordance with applicable German corporate law. There is no guarantee that the outside shareholders in Simrad Optronics ASA which were squeezed out by the Issuer in July 2010 will not bring claims in connection with this squeeze- out. - 16 -

- Legal – South African Apartheid litigation: The Issuer is involved in the so-called Khulumani case in the United States of America which deals with, among other things, claims against companies that allegedly supported the former apartheid regime in South Africa.

- Legal – Changes in tax laws and tax audits: The Group operates in a global environment and is thus subject to changes in tax laws and the amount of taxes imposed on companies. Additional tax expenses could also accrue at the level of the Issuer, its subsidiaries or joint ventures in relation to previous tax assessment periods (2007 onward) which have not been subject to a tax audit yet.

- 17 -

GERMAN LANGUAGE VERSION OF THE SUMMARY OF THE PROSPECTUS ZUSAMMENFASSUNG DES PROSPEKTS

Der folgende Abschnitt stellt die Zusammenfassung (die "Zusammenfassung") der wesentlichen Merkmale und Risiken in Bezug auf die Rheinmetall-Gruppe (wie nachfolgend definiert) und die € [●] Festverzinslichen Schuldverschreibungen von 2010/2015 (die "2015 Schuldverschreibungen" oder die "Schuldverschreibungen", soweit der Kontext dies verlangt) und die € [●] Festverzinslichen Schuldverschreibungen von 2010/2017 (die "2017 Schuldverschreibungen" oder die "Schuldverschreibungen", soweit der Kontext dies verlangt) dar. Die Zusammenfassung ist als Einleitung zu diesem Prospekt zu verstehen. Ein Anleger sollte jede Entscheidung zur Anlage in die Schuldverschreibungen auf die Prüfung des gesamten Prospekts einschließlich der durch Verweis einbezogenen Dokumente und Nachträgen hierzu stützen. Für den Fall, dass vor einem Gericht Ansprüche auf Grund der in diesem Prospekt enthaltenen Informationen geltend gemacht werden, könnten klagende Anleger auf Grund einzelstaatlicher Rechtsvorschriften die Kosten für eine Übersetzung des Prospekts vor Prozessbeginn zu tragen haben. Die Emittentin, die die Zusammenfassung einschließlich einer Übersetzung dieser vorgelegt und deren Notifizierung beantragt hat, kann haftbar gemacht werden, jedoch nur für den Fall, dass die Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie zusammen mit anderen Teilen des Prospekts gelesen wird. Die nachstehende Zusammenfassung der allgemeinen Merkmale ist keine vollständige Darstellung, sondern gehört zum Prospekt und ist im Zusammenhang mit dem Prospekt insgesamt zu lesen.

Wörter und Ausdrücke, die in den anderen Teilen des Prospekts definiert werden und in diesem Teil des Prospekts nicht anders definiert werden, haben die gleiche Bedeutung wie in diesem Teil des Prospekts.

Zusammenfassung der Anleihebedingungen der Schuldverschreibungen und Allgemeine Informationen

Emittentin:...... Rheinmetall Aktiengesellschaft (die "Emittentin" oder "Rheinmetall AG" und zusammen mit ihren konsolidierten Tochtergesellschaften, "Rheinmetall", "Rheinmetall-Gruppe" oder die "Gruppe")

Joint Lead Manager: ...... Crédit Agricole Corporate and Investment Banking S.A. Deutsche Bank AG, London Branch UnitCredit Bank AG

(zusammen die "Joint Lead Manager" und zusammen mit Co-Managern, soweit vorhanden, die "Manager")

Gesamtnennbetrag: ...... 2015 Schuldverschreibungen: € [●]

- oder -

2017 Schuldverschreibungen: € [●]

Nennbetrag:………...... € 1.000

Währung:...... Euro ("EUR" oder "€")

Begebungstag:...... 22. September 2010

Zinsen:...... Die 2015 Schuldverschreibungen werden bezogen auf ihren Nennbetrag mit dem jährlichen Zinssatz (wie nachfolgend definiert) ab dem Begebungstag (einschließlich) bis zum Endfälligkeitstag (ausschließlich) verzinst. Die Zinsen

- 18 -

sind nachträglich am 22. September eines jeden Jahres (jeweils ein "Zinszahltag") zahlbar. Der erste Zinszahltag ist der 22. September 2011 (der "Erste Zinszahltag").

"Zinssatz" bezeichnet einen Betrag, ausgedrückt als Prozentsatz, wie zwischen der Emittentin und den Managern festgelegt und wie auf der Internetseite der Luxemburger Börse (www.bourse.lu) am oder um den 20. September 2010 veröffentlicht (die "Preisfestsetzungsmitteilung").

Die Anleihebedingungen sehen für den Fall des Eintritts bestimmter Voraussetzungen eine Erhöung des Zinssatzes vor.

- oder -

Die 2017 Schuldverschreibungen werden bezogen auf ihren Nennbetrag mit dem jährlichen Zinssatz (wie nachfolgend definiert) ab dem Begebungstag (einschließlich) bis zum Endfälligkeitstag (ausschließlich) verzinst. Die Zinsen sind nachträglich am 22. September eines jeden Jahres (jeweils ein "Zinszahltag") zahlbar. Der erste Zinszahltag ist der 22. September 2011 (der "Erste Zinszahltag").

"Zinssatz" bezeichnet einen Betrag, ausgedrückt als Prozentsatz, wie zwischen der Emittentin und den Managern festgelegt und wie auf der Internetseite der Luxemburger Börse (www.bourse.lu) am oder um den 20. September 2010 veröffentlicht (die "Preisfestsetzungsmitteilung").

Die Anleihebedingungen sehen für den Fall des Eintritts bestimmter Voraussetzungen eine Erhöung des Zinssatzes vor.

Endfälligkeitstag: ...... Sofern die 2015 Schuldverschreibungen nicht vorzeitig vollständig oder teilweise zurückgezahlt oder gekauft und entwertet wurden, werden sie zu ihrem Nennbetrag am 22. September 2015 zurückgezahlt.

- oder -

Sofern die 2017 Schuldverschreibungen nicht vorzeitig vollständig oder teilweise zurückgezahlt oder gekauft und entwertet wurden, werden sie zu ihrem Nennbetrag am 22. September 2017 zurückgezahlt.

Emissionspreis: ...... Der Emissionspreis der Schuldverschreibungen (der "Emissionspreis") wird auf der Grundlage eines Bookbuildingverfahrens zwischen der Emittentin und den Managern festgelegt und wird in der Preisfestsetzungsmitteilung veröffentlicht.

Form: ...... Die Schuldverschreibungen werden im Format einer "new global note" begeben und werden zunächst durch eine vorläufige Globalurkunde (die "Vorläufige Globalurkunde") ohne Zinsscheine verbrieft, die bei einem common safekeeper für Euroclear Bank SA/NV ("Euroclear") und Clearstream Banking, société anonyme ("Clearstream Luxembourg", und, zusammen mit Euroclear, die "ICSDs") am oder um den Begebungstag hinterlegt wird. Die Schuldverschreibungen sind für eine Abwicklung durch Euroclear und Clearstream Luxembourg qualifiziert. Ausgenommen unter den hier beschriebenen Umständen wird die Vorläufige Globalurkunde gegen eine Dauerglobalurkunde (die "Dauerglobalurkunde" und die Vorläufige - 19 -

Globalurkunde und die Dauerglobalurkunde jeweils eine "Globalurkunde" und zusammen die "Globalurkunden") ohne Zinsscheine nicht vor Ablauf von 40 Tagen nach dem Begebungstag unter Bestätigung der sogenannte non-U.S. beneficial ownership (vorbehaltlich bestimmter Ausnahmen, die in dieser Bestätigung aufgeführt werden) ausgetauscht.

Die Schuldverschreibungen werden in einer Art und Weise verwahrt, die eine EZB-Fähigkeit ermöglicht. Dies bedeutet, dass die Schuldverschreibungen zum Zeitpunkt ihrer Emission bei einer der internationalen zentralen Verwahrstellen (ICSDs) in ihrer Funktion als common safekeeper eingereicht werden. Das bedeutet nicht notwendiger Weise, dass die Schuldverschreibungen zum Zeitpunkt ihrer Emission oder zu einem anderen Zeitpunkt während ihrer Laufzeit als geeignete Sicherheit im Sinne der Geldpolitik des Eurosystems und für Zwecke der untertägigen Kreditfähigkeit durch das Eurosystem anerkannt werden. Eine solche Anerkennung hängt von der Erfüllung der Kriterien der Eignung des Eurosystems ab.

Die Schuldverschreibungen werden in Form von Inhaberpapieren begeben. Es werden keine effektiven Stücke ausgestellt.

Hauptzahlstelle:...... Deutsche Bank Aktiengesellschaft

Zahlstelle………………………… Deutsche Bank Luxembourg S.A.

Listing Agent in Luxemburg: ...... Deutsche Bank Luxembourg S.A.

Status:...... Die Schuldverschreibungen begründen direkte, unbedingte, nicht nachrangige und unbesicherte Verbindlichkeiten der Emittentin, die untereinander und mit allen anderen gegenwärtigen und zukünftigen unbesicherten und nicht nachrangigen Verbindlichkeiten der Emittentin gleichrangig sind, soweit diesen Verbindlichkeiten kein Vorrang auf Grund verbindlicher gesetzlicher Vorschriften zukommt.

Steuern: Kapital und Zinsen sind ohne Einbehalt und Abzug durch die Emittentin an der Quelle von oder wegen irgendwelchen gegenwärtigen oder zukünftigen Steuern, Abgaben, Veranlagungen oder regierungsseitigen Gebühren gleich welche Art, die von oder in der Bundesrepublik Deutschland oder für deren Rechnung einer dort zur Steuererhebung ermächtigten Gebiteskörperschaft oder Behörde auferlegt, erhoben oder eingezigen werden ("Quellensteuern"), zu zahlen, es sei denn, die Emittentin ist zu einem solchen Einbehalt oder Abzug gesetzlich verpflichtet. In diesem Fall wir die Emittentin vorbehaltlich üblicher Ausnahmen, die in den Anleihebedingungen beschrieben sind, diejenigen zusätzlichen Beträge zahlen, die erforderlich sind, um die Zahlung von Zinsen und Kapital zum jeweiligen vollen Nennbetrag an die Anleihegläubiger sicherzustellen.

Vorzeitige Rückzahlung: ...... Sofern in Folge einer Änderung oder Ergänzung der in Deutschland geltenden Gesetze und Verordnungen eine Quellensteuer auf Zahlungen des Nennbetrags oder der Zinsen in Bezug auf die Schuldverschreibungen erhoben wird und die Emittentin zur Zahlung Zusätzlicher Beträge (wie in § 5 der Anleihebedingungen der Schuldverschreibungen definiert) verpflichtet ist, kann die Emittentin die Schuldverschreibungen vollständig, nicht aber teilweise, zurückzahlen.

- 20 -

Kündigungsgründe:...... Die Anleihebedingungen der Schuldverschreibungen sehen Kündigungsgründe vor, die die Gläubiger berechtigen, eine vorzeitige Rückzahlung der Schuldverschreibungen zu verlangen.

Cross-Default-Klausel:………… Die Anleihebedingungen der Schuldverschreibungen sehen Regelungen bezüglich eines Cross-Defaults vor.

Negativverpflichtung: ...... Die Anleihebedingungen der Schuldverschreibungen sehen Regelungen bezüglich einer Negativverpflichtung vor.

Kontrollwechsel:……………… Die Anleihebedingungen der Schuldverschreibungen sehen Regelungen bezüglich eines Kontrollwechsels vor.

Beschränkungen von Die Anleihebedingungen der Schuldverschreibungen sehen Beschränkungen Veräußerungen von Vermögens- bei Veräußerungen von Vermögenwerten der Emittentin vor. werten:……………………………

Beschlüsse der Die Anleihebedingungen können durch die Emittentin mit Zustimmung der Anleihegläubiger:……………… Anleihegläubiger aufgrund Mehrheitsbeschlusses nach Maßgabe der §§ 5 ff. des Gesetzes über Schuldverschreibungen aus Gesamtemissionen (Schuldverschreibungsgesetz – "SchVG") in seiner jeweils gültigen Fassung geändert werden. Die Anleihegläubiger können insbesondere einer Änderung wesentlicher Inhalte der Anleihebedingungen mit den in § 12 (c)(i) der Anleihebedingungen genannten Mehrheiten zustimmen, einschließlich der in § 5 Absatz 3 SchVG vorgesehenen Maßnahmen. Die Mehrheitsbeschlüsse der Anleihegläubiger sind für alle Anleihegläubiger gleichermaßen verbindlich. Ein Mehrheitsbeschluss der Anleihegläubiger, der nicht gleiche Bedingungen für alle Anleihegläubiger vorsieht, ist unwirksam, es sei denn die benachteiligten Anleihegläubiger stimmen ihrer Benachteiligung ausdrücklich zu.

Gemeinsamer Vertreter:………… Deutsche Bank Aktiengesellschaft, Grosse Gallusstrasse 10 – 14, 60272 Frankfurt am Main, Deutschland wurde in den Anleihebedingungen als gemeinsamer Vertreter der Anleihegläubiger bestellt. Die Aufgaben und Befugnisse des gemeinsamen Vertreters ergeben sich aus den Anleihebedingungen.

Angebot der Die Schuldverschreibungen werden an institutionelle und private Investoren Schuldverschreibungen:…...... unter Wahrung der geltenden Verkaufsbeschränkungen für ein öffentliches Angebot angeboten. Ein öffentliches Angebot erfolgt in Luxemburg, Deutschland, Österreich und den Niederlanden, nachdem die Notifizierung durch die CSSF erfolgt ist.

Anwendbares Recht:...... Die Schuldverschreibungen unterliegen deutschem Recht.

Gerichtsstand:….………………… Nicht-ausschließlicher Gerichtsstand für alle sich aus den Schuldverschreibungen ergebenden Rechtsstreitigkeiten ist Frankfurt am Main, Deutschland.

Börsenzulassung der Es wurde ein Antrag auf Zulassung der Schuldverschreibungen zur Official Schuldverschreibungen:...... List der Luxemburger Wertpapierbörse und zum Handel im geregelten Markt der Luxemburger Wertpapierbörse (Bourse de Luxembourg) gestellt.

Rating der Erwartetes vorläufiges Rating von Baa3 durch Moody’s Investors Service, Inc. Schuldverschreibungen: ......

- 21 -

Wertpapierkennnummern:...... 2015 Schuldverschreibungen:

ISIN: XS0543373962 Common Code: 054337396 WKN: A1EWPS

2017 Schuldverschreibungen:

ISIN: XS0542369219 Common Code: 054236921 WKN: A1EWSC

Zusammenfassung der Emittentenbeschreibung

Die Rheinmetall Aktiengesellschaft (die "Emittentin" oder "Rheinmetall AG" und, gemeinsam mit ihren konsolidierten Tochtergesellschaften, "Rheinmetall", der "Rheinmetall-Konzern" oder der "Konzern") ist eine nach deutschem Recht errichtete Aktiengesellschaft, eingetragen im Handelsregister des Amtsgerichts Düsseldorf unter HR B 39401. Der Sitz sowie die Hauptverwaltung der Rheinmetall AG ist in Düsseldorf. Die Geschäftsadresse lautet Rheinmetall Platz 1, 40476 Düsseldorf und die Telefonnummer lautet +49 (0)211 473 01.

Die Emittentin wurde am 13. April 1889 als "Rheinische Metallwaaren und Maschinenfabrik Actiengesellschaft" gegründet, war ab 1956 als "Rheinmetall Berlin Aktiengesellschaft" operativ tätig, bis sie 1996 ihre Firma in "Rheinmetall Aktiengesellschaft" änderte.

Die Emittentin ist die strategische Management- und Finanzholding des Rheinmetall Konzerns, der sich aus den Unternehmensbereichen Defence und Automotive zusammen setzt. Die Emittentin übernimmt strategische Aufgaben für den Konzern, darunter Finanzierung, Rechnungslegung, Investor Relations und Unternehmenskommunikation, Steuern, Recht und Human Resources, und verwaltet – gemeinsam mit ihrer 100 %-Tochter Rheinmetall Immobiliengesellschaft mbH – die Immobilien im Besitz des Konzerns. Zum 31. Dezember 2009 bzw. 30. Juni 2010 beschäftigte die Emittentin 107 bzw. 105 MitarbeiterInnen.

Als einer der führenden europäischen Anbieter von Heerestechnik verfügt der Unternehmensbereich Defence über ein breites Portfolio von Plattformen und Komponenten gepanzerter und anderer militärischer Fahrzeuge (einschließlich des Schützenpanzers Puma, des Aufklärungs- und Kampffahrzeugs Fuchs und des Transportfahrzeugs Boxer), Waffen und Munition (einschließlich der Hauptwaffe des Leopard 2 Panzers), Antriebe, Flugabwehr und Verteidigungselektronik. Die Tochtergesellschaften und Beteiligungen von Rheinmetall Defence sind in die sechs Geschäftsbereiche Fahrzeugsysteme, Waffe und Munition, Antriebe, Flugabwehr, Verteidigungselektronik (C4ISTAR) und Simulation und Ausbildung eingeteilt. Im Geschäftsjahr 2009 betrug der Umsatz des Unternehmensbereichs Defence € 1.898 Millionen und damit 55 % vom Gesamtumsatz des Konzerns (Geschäftsjahr 2008: € 1.814 Millionen bzw. 47 %); im ersten Halbjahr endend am 30. Juni 2010 erreichte der Unternehmensbereich Defence einen Umsatz von € 762 Millionen (gegenüber € 789 Millionen im ersten Halbjahr des Geschäftsjahres 2009).

Die Kolbenschmidt Pierburg AG ist die Führungsgesellschaft des Unternehmensbereichs Automotive des Konzerns (der "Kolbenschmidt Pierburg-Konzern"). Der Kolbenschmidt Pierburg-Konzern ist ein bedeutender Zulieferer der weltweiten Automobilindustrie und entwickelt, produziert und liefert in enger Zusammenarbeit mit seinen Kunden und in strategischen Allianzen und mit Joint Venture Partnern in Produktionsstandorten in Europa, Nord- und Südamerika und Asien. Die Zentrale des Kolbenschmidt Pierburg-Konzerns befinden sich in Neckarsulm, Deutschland. Der Kolbenschmidt Pierburg-Konzern besteht aus den folgenden sechs Geschäftsbereichen: Pierburg, Pierburg Pump Technology, KS Kolbenschmidt, KS Gleitlager, KS Aluminium- Technologie und Motor Service. Im Geschäftsjahr 2009 betrug der Umsatz des Unternehmensbereichs Automotive € 1.522 Millionen und damit 45 % vom Gesamtumsatz des Konzerns (Geschäftsjahr 2008: € 2.055

- 22 -

Millionen oder 53 %); im ersten Halbjahr endend am 30. Juni 2010 erreichte der Unternehmensbereich Automotive einen Umsatz von € 966 Millionen (gegenüber € 717 Millionen im ersten Halbjahr des Geschäftsjahres 2009).

Im den ersten sechs Monaten des Geschäftsjahres 2010 beliefen sich die Investitionen in das Sachanlagevermögen und immaterielle Vermögenswerte auf € 80 Millionen (erste sechs Monate des Geschäftsjahres 2009: € 71 Millionen).

Das Gemeinschaftsunternehmen der Rheinmetall und der MAN Nutzfahrzeuge AG ("MAN") – Rheinmetall MAN Military Vehicles GmbH ("RMMV") – hat im April 2010 die Zustimmung der zuständigen Wettbewerbsbehörden erlangt. Darüber hinaus hat die Emittentin im Juli 2010 die Übernahme von 100 % der Anteile und Stimmrechte der SIMRAD Optronics ASA in Nøtterøy, Norway, abgeschlossen. Weiterhin hat der Rheinmetall-Konzern mit Wirkung zum 1. Juli 2010 51 % an der Verseidag Ballistic Protection GmbH erworben und erwartet, die Geschäftstätigkeiten und Wirtschaftsgüter des Verteidigungssektors der italienischen Tochtergesellschaft Società Esplosivi Industriali SpA des französischen EPC Konzerns zu übernehmen.

Die derzeitigen Mitglieder des Vorstands der Emittenin sind: Klaus Eberhardt (CEO), Dr. Gerd Kleinert and Dr. Herbert Müller (CFO).

Mit Ausnahme zweier Fidelity Investment Fonds, die der Emittentin am 2. Juni 2010 mitgeteilt haben, dass sie gemeinsam 6,6 % der Stimmrechte der Emittentin halten, hält kein Aktionär mehr als 5 % der Stimmrechte der Emittentin.

Sofern in diesem Prospekt nicht an anderer Stelle offen gelegt, haben sich die Geschäftsaussichten der Emittentin seit dem 31. Dezember 2009 nicht wesentlich nachteilig verändert. Seit Veröffentlichung des letzten ungeprüften Zwischenabschlusses der Emittentin zum 30. Juni 2010 hat sich die Finanz- oder Geschäftslage der Emittentin nicht wesentlich verändert.

Der unabhängige Abschlussprüfer der Emittentin, die PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, hat die von der Emitentin aufgestellten Konzernabschlüsse für die Geschäftsjahre zum 31. Dezember 2008 bzw. 31. Dezember 2009, geprüft und in beiden Fällen einen uneingeschränkten Bestätigungsvermerk erteilt.

Die nachfolgende Tabelle zeigt wesentliche konsolidierte Finanzinformationen:

1. Januar bis 1. Januar bis Geschäftsjahresende Geschäftsjahresende 30. Juni 2010 30. Juni 2009 31. Dezember 2009 31. Dezember 2008 (ungeprüft) (ungeprüft) (geprüft) (geprüft) (in € Millionen)

Umsatz 1.728 1.506 3.420 3.869 Auftragseingang 5.247 3.826 4.940 3.683 Gesamtleistung 1.862 1.566 3.395 3.927 Betriebliches Ergebnis 98 (63) 13 243* EBITDA 178 28 180 411* EBIT 104 (62)* 15 245* EBT 78 (89)* (46) 193* Konzern-Jahresüberschuss /-fehlbetrag 57 (70)* (52) 142* Cash flows 134 25* 120 308*

- 23 -

30. Juni 2010 31. Dezember 2009 31. Dezember 2008 (ungeprüft) (geprüft) (geprüft) (in € Millionen) Bilanzielles Eigenkapital 1.210 1.134 1.080* Bilanzsumme 3.869 3.835 3.612* Langfristige Finanzverbindlichkeiten 179 180 360 Kurzfristige Finanzverbindlichkeiten 284 353 48 Liquide 125 Mittel/Finanzmittelfonds 557 203 Mitarbeiter (Kapazitäten) am Bilanzstichtag 20.181 19.766 21.020

* Seit dem 31. Dezember 2009 werden versicherungsmathematische Gewinne und Verluste aus der Bewertung von Pensionsverpflichtungen und dazugehörigem Fondsvermögen direkt im Eigenkapital erfasst. Die Änderung der Bilanzierung hat Auswirkungen auf die Bilanz, auf die Gewinn- und Verlustrechnung sowie die im Eigenkapital erfassten Erträge und Aufwendungen, nicht aber auf die Kapitalflussrechnung. Die Darstellung der Kapitalflussrechnung wurde dahingehend geändert, dass die Differenz aus gezahlten und erlangten Zinsen nicht mehr den Finanzierungsaktivitäten sondern dem Kapitalfluss aus operativen Tätigkeiten zugeordnet wird. Die Vorjahresvergleiche wurden entsprechend angepasst.

Zusammenfassung der Risiken in Bezug auf die Schuldverschreibungen

Risikofaktoren in Bezug auf die Schuldverschreibungen umfassen, unter anderen, die folgenden Risiken:

Der Marktwert der Schuldverschreibungen wird gemindert, wenn sich die Kreditwürdigkeit der Emittentin verschlechtert: Der Eintritt eines der im Folgenden genannten Risiken (siehe "Zusammenfassung der Risiken in Bezug auf die Emittentin") kann die Fähigkeit der Emittentin, alle Verpflichtungen aus den Schuldverschreibungen bei Fälligkeit vollständig zu erfüllen, möglicherweise beeinflussen. Dies kann zu einer Minderung des Marktwerts der Schuldverschreibungen führen.

Der Marktwert der Schuldverschreibungen wird gemindert, wenn das Zinsniveau für Laufzeiten, die der restlichen Laufzeit der Schuldverschreibungen entsprechen, ansteigt: Wenn die Zinssätze im Allgemeinen oder insbesondere im Hinblick auf Verbindlichkeiten von Gesellschaftsschuldnern oder von Gesellschaftsschuldnern mit Geschäftstätigkeiten im Industriesektor für Laufzeiten, die der restlichen Laufzeit der Schuldverschreibung entsprechen, steigen, kann dies zu einer Minderung des Marktwerts der Schuldverschreibungen führen.

Rating der Schuldverschreibungen: Ein Rating der Schuldverschreibungen, falls dieses vorhanden ist, spiegelt möglicherweise nicht sämtliche Risiken einer Anlage in die Schuldverschreibungen wider. Ebenso können Ratings ausgesetzt, herabgestuft oder zurückgezogen werden. Das Aussetzen, Herabstufen oder die Rücknahme eines Ratings können den Marktwert und den Kurs der Schuldverschreibungen beeinträchtigen.

Es gibt möglicherweise keinen Markt für die Schuldverschreibungen: Auch wenn eine Börsenzulassung erfolgt ist, ist nicht sichergestellt, ob ein solcher Markt ausreichend liquide ist. Tritt ein solches Risiko ein, sind die Gläubiger möglicherweise nicht in der Lage, ihre Schuldverschreibungen zu einem angemessenen Marktwert bzw. überhaupt zu verkaufen.

Inflationsrisiko: Die reale Rendite aus einer Anlage wird durch Inflation geschmälert. Je höher die Inflationsrate, desto niedriger die reale Rendite einer Schuldverschreibung. Entspricht die Inflationsrate der Nominalrendite oder übersteigt sie diese, ist die reale Rendite null oder gar negativ.

Kreditrisiko: Gläubiger sind dem Risiko ausgesetzt, dass die Emittentin Zins- und/oder Tilgungszahlungen, zu denen sie im Zusammenhang mit der Schuldverschreibung verpflichtet ist, teilweise oder vollumfänglich nicht

- 24 - leisten kann. Konkret spiegelt sich dieses Kreditrisiko darin wider, dass die Emittentin möglicherweise Zins- und/oder Tilgungszahlungen teilweise oder vollumfänglich nicht leisten kann.

Risiko einer vorzeitigen Rückzahlung: Für die Gläubiger bestehen Risiken im Zusammenhang mit der Wiederanlage von Bargeldeinnahmen aus dem Verkauf oder der vorzeitigen Rückzahlung von Schuldverschreibungen.

Transaktionskosten/Gebühren: Nebenkosten können die Erträge aus Schuldverschreibungen erheblich mindern oder gar aufzehren.

Eignung: Potenzielle Investoren sollten feststellen, ob eine Anlage in die Schuldverschreibungen im Hinblick auf deren individuelle Situation geeignet ist und sollten daher ihre Rechts- oder Steuerberater und Wirtschaftsprüfer zu Rate ziehen, um die Folgen einer Anlage in die Schuldverschreibungen zu prüfen und sich ein eigenes Urteil über die Anlage bilden zu können. Sollte eine Anlage für den jeweiligen Investor nicht geeignet sein, berücksichtigt der Investor möglicherweise nicht alle oder einige der mit einer Anlage in die Schuldverschreibungen einhergehenden Risiken, bevor er eine Anlageentscheidung trifft.

Besteuerung: Potenzielle Käufer und Verkäufer der Schuldverschreibungen sollten sich vergegenwärtigen, dass sie gegebenenfalls verpflichtet sind, Steuern oder andere Gebühren oder Abgaben nach Maßgabe der Gesetze und Praktiken desjenigen Landes zu zahlen, in das die Schuldverschreibungen übertragen werden, oder möglicherweise auch nach Maßgabe anderer Rechtsordnungen.

Unabhängige Einschätzung und Beratung: Ein potenzieller Investor kann hinsichtlich der Beurteilung, ob der Erwerb der Schuldverschreibungen rechtmäßig ist oder in Bezug auf andere vorstehend aufgeführte Punkte die Emittentin, den/die Manager oder deren verbundene Unternehmen nicht verantwortlich machen. Ohne eine unabhängige Überprüfung bzw. Beratung ist der Investor möglicherweise nicht in der Lage, die Risiken, die mit einer Anlage in die Schuldverschreibungen verbunden sind, ausreichend zu erkennen und kann daher einen teilweisen oder vollständigen Verlust seines Kapitals erleiden, das er investiert hat, ohne vor einer Anlage in die Schuldverschreibungen diese oder andere Risiken in Betracht gezogen zu haben.

Risiken im Zusammenhang mit der Anwendung des Gesetzes über Schuldverschreibungen aus Gesamtemissionen: Für einen Gläubiger besteht das Risiko, dass er überstimmt wird und gegen seinen Willen Rechte gegenüber der Emittentin verliert, falls Gläubiger mit einer Stimmenmehrheit gemäß dem Schuldverschreibungsgesetz ihre Zustimmung zu Änderungen der Anleihebedingungen erteilen. Die Emittentin hat einen Gemeinsamen Vertreter aller Gläubiger bestellt und als solches besteht das Risiko, dass ein einzelner Gläubiger ganz oder teilweise die Möglichkeit verliert, seine Rechte gegenüber der Emittentin unabhängig von den anderen Gläubigern durchzusetzen und geltend zu machen.

Zusammenfassung der Risiken in Bezug auf die Emittentin

Die Geschäfte des Rheinmetall-Konzerns – und damit einhergehend der Wert der Schuldverschreibungen – sind einer Reihe von Risiken ausgesetzt, die, würden sie eintreten, die Geschäfts-, Finanz- und Ertragslage des Rheinmetall-Konzerns wesentlich negativ beeinflussen könnten. Diese Risiken sind im Wesentlichen mit Einflüssen bzw. gegenwärtigen oder zukünftigen Entwicklungen oder anderen Umständen aus den folgenden Bereichen verbunden:

- Allgemein – Entwicklung innovativer Produkte: Der zukünftige Erfolg des Rheinmetall-Konzern ist von seiner Fähigkeit abhängig, rechtzeitig neue und verbesserte Produkte zu entwickeln und auf den Markt zu bringen. Sowohl der Unternehmensbereich Defence wie auch der Unternehmensbereich Automotive müssen technische Herausforderungen meistern, welche im Ergebnis die Entwicklung innovativer Produkte aufwendig und zeitintensiv machen könnten. Als Folge könnte Rheinmetall außerstande sein, weiterhin ausreichen zügig innovative Produkte zu entwickeln und umzusetzen.

- 25 -

- Allgemein – Liquiditätslage ist zyklisch: Vor allem aufgrund des Zahlungsverhaltens der Kunden im Unternehmensbereich Defence (u.a. Rückgang von Vorauszahlungen) ist die Liquiditätslage des Rheinmetall-Konzerns zyklisch. Der allgemeine von den Störungen der Finanzmärkte hervorgerufene Liquiditätsengpass, möglicherweise im Zusammenwirken mit zukünftigen Zurückstufungen des Ratings des Rheinmetall-Konzerns sowie – auf den Unternehmensbereich Defence bezogenen – ethische Gesichtspunkte, könnten die Fähigkeit des Konzerns, zusätzliches Fremdkapital aufzunehmen, beeinträchtigen oder die Kosten der Aufnahme zusätzlichen Fremdkapitals erhöhen.

- Allgemein – Änderungen von Wechselkursen und Sicherungsgeschäfte: Rheinmetall ist weltweit tätig und daher aus Veränderungen der Wechselkurse entstehenden finanziellen Risiken ausgesetzt. Die Sicherungsstrategie des Konzerns könnte sich letztlich als (teilweise) erfolglos erweisen.

- Allgemein – Garantie- und Produkthaftungsforderungen: Rheinmetall ist Produkthaftungsprozessen und anderen Verfahren hinsichtlich angeblicher Sorgfaltspflichtverletzungen, Verletzungen von Garantieverpflichtungen, Anwendungsfehlern sowie Vertragsverletzungsforderungen, Rückrufaktionen und von staatlichen Stellen auferlegten Bußgeldern ausgesetzt.

- Allgemein – Übernahmen, Joint Ventures und strategische Allianzen: Übernahmen, Joint Ventures und strategische Allianzen sind wichtige Elemente der Internationalisierungs- und Wachstumsstrategie des Rheinmetall-Konzerns. Die Beendigung eines oder mehrerer Joint Ventures oder strategischer Allianzen oder ein Unvermögen des Rheinmetall-Konzerns, neue Joint Ventures oder strategische Allianzen aufzubauen oder bestehende auszuweiten, könnten die Geschäfts-, Ertrags- und Finanzlage des Konzerns negativ beeinflussen.

- Allgemein – Lieferverzug und andere Versäumnisse von Gegenparteien: Im Unternehmensbereich Defence bezieht der Konzern das Rohmaterial teilweise von lokalen Anbietern in den Märkten, in welche die Produkte geliefert werden, wohingegen Rheinmetall im Unternehmensbereich Automotive den Kunden folgt, und der Bedarf überwiegend aus den Ländern gedeckt wird, in dem die Produkte hergestellt werden. Sollten einer oder mehrere Lieferanten aus beliebigen Gründen (beispielsweise Insolvenz, Zerstörung von Produktionsstätten oder Erfüllungsverweigerung nach Wechsel des Managements) nicht in der Lage sein, ihre Lieferverpflichtungen zu erfüllen, könnte Rheinmetall außerstande sein, kurzfristig von anderen Lieferanten Rohmaterialien in der erforderlichen Menge oder Qualität zu beschaffen.

- Allgemein – Bedarf an qualifiziertem Schlüsselpersonal: Der Erfolg des Rheinmetall-Konzerns ist abhängig von seiner Fähigkeit, qualifizierte Führungskräfte sowie eine große Bandbreite von Mitarbeitern in Schlüsselpositionen und Spezialisten zu rekrutieren und zu halten.

- Allgemein – Holdingstruktur der Emittentin: Die Emittentin ist die zentrale Holdinggesellschaft des Konzerns. Ihre Einkünfte bestehen im Wesentlichen aus der Kostenzuweisung innerhalb des Konzerns, Miet- und Zinszahlungen sowie der Ausschüttung von Dividenden oder Gewinnen ihrer Tochtergesellschaften und Joint Ventures sowie, soweit einschlägig, Einnahmen aus der Veräußerung von Beteiligungen. Aus diesem Grund hängt die Fähigkeit der Emittentin, ihre Verbindlichkeiten aus den Schuldverschreibungen zu erfüllen, von der Fähigkeit ihrer Tochtergesellschaften und Joint Ventures ab, für die Leistungen der zentralen Holdinggesellschaft zu zahlen und Dividenden oder Gewinne an die Emittentin auszuschütten.

- Allgemein – Abhängigkeit vom Schutz geistigen Eigentums und von Geschäftsgeheimnissen: Der Geschäftserfolg des Rheinmetall-Konzerns hängt von seiner Fähigkeit ab, die Wettbewerbsfähigkeit seiner Produkte zu erhalten und hohe technische Standards sicherzustellen. Daher ist der Konzern nicht nur den aus dem Schutz der Rechte an eigenem geistigen Eigentum resultierenden Risiken ausgesetzt sondern auch abhängig von Technologien Dritter.

- Allgemein – Risiken in Zusammenhang mit der Komplexität der Geschäftstätigkeit des Konzerns: Unerwartete technische Schwierigkeiten, Probleme bei Partner- oder Subunternehmen und - 26 -

Verschiebungen bei Abnahme- und Abrechnungszeitpunkten könnten sich nachteilig auf die Geschäfts-, Ertrags- und Finanzlage des Konzerns auswirken.

- Allgemein – EDV und Datenschutzrisiken: Der Konzern ist zur Unterstützung seiner Geschäftsprozesse und für die externe und interne Kommunikation auf zentrale und dezentrale, standardisierte wie individuelle hochintegrierte Informationstechnologiesysteme, -prozesse und -netzwerke angewiesen. Diese Systeme, Prozesse und Netzwerke sind potentiell für Schäden oder Unterbrechungen aus verschiedenartigen Ursachen anfällig, welche die Führung des Konzerns oder der Geschäfte und Produktionsprozesse einzelner Konzerngesellschaften ernstlich beeinträchtigen könnten.

- Allgemein – Besitz der Produktionsstätten birgt Umweltrisiken: Der überwiegende Teil der dem Rheinmetall-Konzern gehörenden oder gemieteten und genutzten Grundstücke wurde und wird weiterhin für industrielle und Produktionszwecke verwendet und ist damit einhergehend möglichen Verunreinigungen ausgesetzt. Die Emittentin hat in ihrer Bilanz Vorkehrungen für die mögliche Verunreinigung von Grundstücken des Konzerns getroffen.

- Allgemein – Vermögensschaden und Betriebsunterbrechung: Die Folgen von durch Feuer, Elementarrisiken, Lieferengpässen und anderen Störungsereignisse an den Produktionsstätten der Rheinmetall oder innerhalb der Lieferketten des Konzerns – einschließlich Kunden und Lieferanten – hervorgerufenen Schäden und Verlusten können erheblich sein.

- Allgemein – Beschaffungs- und Preisrisiko hinsichtlich Rohmaterialien: Die für die Geschäfte des Rheinmetall-Konzerns erforderlichen Rohmaterialien könnten entweder gar nicht oder nicht in der erforderlichen Qualität oder Menge oder nicht rechtzeitig erhältlich sein. Der Rheinmetall-Konzern ist zudem Preisänderungen von Rohmaterialien ausgesetzt.

- Allgemein – Energiepreisschwankungen: Der Rheinmetall-Konzern benötigt für seine Produktion große Mengen von Energie und wird daher durch Veränderungen im Energiepreis betroffen. Es könnte dem Konzern unmöglich sein, die Energieversorgung zu kosteneffizienten Preisen sicherzustellen oder gestiegene Energiekosten zu kompensieren oder an seine Kunden weiterzureichen.

- Defence – Abhängigkeit vom Ausgabeverhalten öffentlicher Haushalte: Verteidigungstechnologie ist ein sehr politisches Geschäftsfeld, und der Rheinmetall-Konzern unterhält den Großteil seines Geschäfts im Unternehmensbereich Defence mit staatlichen Abnehmern und Sicherheitseinrichtungen, insbesondere auf den Verteidigungsmärkten in Deutschland und dem restlichen Europa. Zwar rechnet der Konzern kurz- bis mittelfristig mit stabilen globalen Verteidigungsausgaben, jedoch kann eine Reduzierung der Verteidigungshaushalte in Deutschland oder anderswo in Europa wie auch eine restriktivere Haushaltspolitik oder eine Zweckbindung für bestimmte Großprojekte ohne gleichzeitige Ausweitung der Verteidigungsausgaben die Geschäfts-, Ertrags- und Finanzlage des Konzerns negativ beeinflussen.

- Defence – komplexer rechtlicher und regulatorischer Rahmen: Im Unternehmensbereich Defence unterliegen die Geschäftstätigaktivitäten des Konzerns komplexen rechtlichen und regulatorischen Rahmenbedingungen, die auf nationaler wie internationaler Ebene ständigen Veränderungen ausgesetzt sind. Rheinmetall könnte nicht in der Lage sein, diesen Entwicklungen vorzugreifen.

- Defence – beschränkter Zugang zu militärischen Märkten durch Ausfuhrkontrolle: Der Export von Produkten macht einen erheblichen Anteil des Umsatzes des Unternehmensbereichs Defence aus. Alle Exporte aus Deutschland heraus bedürfen einer Ausfuhrlizenz nach dem Kriegswaffenkontrollgesetz und/oder dem Außenwirtschaftsgesetz / der Außenwirtschaftsverordnung. Die Genehmigung oder Verweigerung von Ausfuhrlizenzen hängt vom konkreten Einfuhrland ab. Exporte von anderen Produktionsstandorten außerhalb Deutschlands unterliegen den am jeweiligen Standort anwenbaren Exportkontrollvorschriften.

- 27 -

- Defence – Reputationsrisiken: Aufgrund des Wesens der Geschäftstätigkeit des Unternehmens-bereichs Defence bestehen Reputationsrisiken für Rheinmetall.

- Automotive – Signifikanter Einfluss der Weltwirtschaft auf Verkäufe an Erstausrüster (OEMs): Der Unternehmensbereich Automotive erwirtschaftet einen hohen Prozentsatz seines Umsatzes mit Erstausrüstern, die wiederum von der weltweiten Konjunkturentwicklung, einschließlich der Automobilnachfrage sowie ausreichend hohe Verbraucherausgaben, abhängig sind.

- Automotive – zyklische Industrie: Die weltweite Produktion von Fahrzeugen und im Ergebnis der Umsatz mit Erstausrüstern sind zyklisch und hängen, neben anderen Dingen, von allgemeinen wirtschaftlichen Bedingungen und den Konsumausgaben und -vorlieben ab, die von verschiedenen Faktoren beeinflusst werden, darunter Treibstoffkosten und die Verfügbarkeit von Verbraucherdarlehen. Zukünftige Entwicklungen in den vom Unternehmensbereich Automotive bedienten Märkten sind schwer vorherzusagen, und es besteht das Risiko, dass die Werke des Unternehmensbereichs Automotive nicht ausgelastet werden oder durch ungenügende Kapazität der Kundennachfrage nicht gewachsen sind, wenn die Märkte des Unternehmensbereichs Automotive stärker als vorhergesehen schrumpfen oder wachsen.

- Automotive – Intensiver Wettbewerb könnte die Umsätze von Rheinmetall verringern oder die Verkaufspreise unter Druck setzen: Die Automobilzulieferindustrie steht in einem harten Wettbewerb und wird von schnellem technologischem Wandel, hohen Investitionsaufwendungen, starkem Preisdruck von großen Kunden, Zeiten des Überangebots und ständigen Fortschritten in Verfahrenstechnik und Produktionsanlagen bestimmt. Da Erstausrüster dem ständigen Einfluss von Innovationen und Kosten senkenden Maßnahmen der Wettbewerber ausgesetzt sind, bemühen sie sich bei ihren Vorlieferanten, wie auch dem Unternehmensbereich Automotive, um Preissenkungen sowohl im Ausschreibungsverfahren als auch während der Vertragslaufzeit. Die bestehenden Mitbewerber des Unternehmensbereichs Automotive könnten eine aggressive Preispolitik verfolgen und Erstausrüstern günstigere Konditionen anbieten als Rheinmetall.

- Automotive – Verschiebungen im Produktmix durch Markttendenzen und -entwicklungen: Im Geschäftsjahr 2009 hat der Unternehmensbereich Automotive mehr als die Hälfte seines Umsatzes mit Erstausrüstern gemacht. Die weltweite Fahrzeugproduktion und in der Folge der Umsatz mit Erstausrüstern ist derzeit einer Reihe von Strömungen und technischen Entwicklungen ausgesetzt, die den von Erstausrüstern verkauften Produktmix – und damit den Umsatz von Rheinmetall – beeinflussen könnten.

- Recht – gesellschaftsrechtliche Umstrukturierungen und Forderungen außen stehender Aktionäre / Aktionärsklagen: Im Rahmen von gesellschaftsrechtlichen Umstrukturierungen ist der Konzern gegenwärtig drei von außen stehenden Aktionären angestrengten Spruchverfahren zur Überprüfung der Angemessenheit der Umtauschverhältnisse bzw. der Höhe der angebotenen Barabfindung konfrontiert. Zudem kann nicht ausgeschlossen werden, dass die außen stehenden Aktionäre der Simrad Optronics ASA im Zusammenhang mit deren squeeze out im Juli 2010 Forderungen gegen die Emittentin stellen werden.

- Recht – Apartheid-Klageverfahren: Die Emittentin ist an dem sogenannten Khulumani-Fall in den Vereinigten Staaten von Amerika beteiligt, der sich unter anderem mit Forderungen gegen Unternehmen beschäftigt, die das frühere Apartheid-Regime in Südafrika unterstützt haben sollen.

- Recht – Änderungen in Steuerrecht und Steuerprüfung: Der Konzern ist in einem globalen Umfeld tätig und damit Änderungen steuerlicher Vorschriften und der den Gesellschaften auferlegten Steuern ausgesetzt. Auch auf der Ebene der Emittentin, ihrer Tochterunternehmen oder Joint Ventures könnten zusätzliche Steueraufwendungen bezüglich früherer Veranlagungszeiträume (2007 folgend) entstehen, für die eine Betriebsprüfung noch nicht abgeschlossen ist.

- 28 -

RISK FACTORS

Before deciding to purchase the Notes, investors should carefully review and consider the following risk factors and the other information contained in this Prospectus. Should one or more of the risks described below materialise, this may have a material adverse effect on the cash flows, results of operations and financial condition of Rheinmetall-Group. Moreover, if any of these risks occur, the market value of the Notes and the likelihood that the Issuer will be in a position to fulfill its payment obligations under the Notes may decrease, in which case the Noteholders could lose all or part of their investments. Investors should note that the risks discussed below may not prove to be exhaustive and, therefore, may not be the only risks to which the Issuer and Rheinmetall -Group are exposed. Additional risks and uncertainties, which are not currently known to the Issuer or which the Issuer currently believes are immaterial, could likewise impair the business operations of the Issuer or Rheinmetall-Group and have a material adverse effect on their cash flows, results of operations and their financial condition. The order in which the risks are presented does not reflect the likelihood of their occurrence or the magnitude of their potential impact on the cash flows, results of operations and financial condition of Rheinmetall-Group.

Words and expressions defined in other parts of this Prospectus and not otherwise defined in this part of the Prospectus shall have the same meanings in this part of the Prospectus.

The information in this section "Risk Factors" includes risk factors relating to:

1. the Notes; and

2. the Issuer.

Risks relating to the Notes

The market value of the Notes may decrease if the creditworthiness of the Issuer worsens

The materialisation of any of the risks referred to below (see "Risks relating to the Issuer") may affect the Issuer’s ability to fully perform all obligations under the Notes when they fall due in which case the market value of the Notes may suffer. In addition, even if the likelihood that the Issuer will be in a position to fully perform all obligations under the Notes when they fall due actually has not decreased, market participants could nevertheless be of that opinion. Market participants may in particular be of such opinion if any of the rating agencies decreases the rating assigned to long-term debt of the Issuer, or if market participants' assessment of the creditworthiness of corporate debtors in general or debtors operating in the industries sector adversely change.

If any of these risks occur, third parties would only be willing to purchase Notes for a lower price than before the materialisation of said risk. The market value of the Notes may therefore decrease.

The market value of the Notes may decrease if the interest rate level for durations equal to the remaining term of the Notes increases

If interest rates in general or particularly with regard to obligations of corporate debtors or corporate debtors with activities in the industries sector for durations equal to the remaining term of the Notes increase, the market value of the Notes may decrease. The longer the remaining term of a debt instrument, the stronger is its market value affected by changes of the interest rate level. As the term of the Notes is five years, changes in interest rates will have a strong impact on the market value of the Notes. There are further factors which may affect the market value of the Notes, including, but not limited to global or national economic factors and crises in the global or national financial or corporate sector.

- 29 -

Rating of the Notes

A rating of the Notes, if received at all, may not adequately reflect all risks of the investment in the Notes. Equally, ratings may be suspended, downgraded or withdrawn. Such suspension, downgrading or withdrawal may have an adverse effect on the market value and trading price of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time.

There may not be a market for the Notes

Prior to the issue of the Notes, there has been no public market for the Notes. Application has been made for the Notes to be admitted to listing on the official list of the Luxembourg Stock Exchange and to trading on the regulated market of the Luxembourg Stock Exchange (Bourse de Luxembourg). The issue of the Notes is not conditional upon such listing and trading being granted. No assurances can be given that such listing will be obtained. In addition, even if a listing is granted there can be no assurance that there will be sufficient liquidity in the market. If any of these risks were to materialise, Noteholders may not be able to sell their Notes at fair market value or at all.

Inflation Risk

The inflation risk is the risk of future money depreciation. The real yield from an investment is reduced by inflation. The higher the rate of inflation, the lower the real yield on the Notes. If the inflation rate is equal to or higher than the nominal yield, the real yield is zero or even negative.

Credit Risk

Any person who purchases the Notes is relying on the creditworthiness of the Issuer and has no rights against any other person. Noteholders are subject to the risk of a partial or total failure of the Issuer to make interest and/or redemption payments that the Issuer is obliged to make under the Notes. The worse the creditworthiness of the Issuer, the higher the risk of loss (see also "Risks relating to the Issuer" below).

A materialisation of the credit risk may result in partial or total failure of the Issuer to make interest and/or redemption payments.

Risk of early redemption

In the event that the Issuer would be obliged to increase the amounts payable in respect of any Notes due to any withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of Germany or any political subdivision thereof or any authority therein or thereof having power to tax, the Issuer may redeem all outstanding Notes in accordance with the Terms and Conditions of the Notes. Noteholders may be exposed to risks connected to the reinvestment of cash proceeds from the sale or early redemption of any Note.

Transaction Costs/Charges

When the Notes are purchased or sold, several types of incidental costs (including transaction fees and commissions) are incurred in addition to the purchase or sale price of the Note. Credit institutions as a rule charge commissions which are either fixed minimum commissions or pro-rata commissions, depending on the order value. To the extent that additional – domestic or foreign – parties are involved in the execution of an order, including but not limited to domestic dealers or brokers in foreign markets, Noteholders may also be charged for the brokerage fees, commissions and other fees and expenses of such parties (third party costs). These incidental costs may significantly reduce or eliminate any profit from holding the Notes.

- 30 -

Suitability

Potential investors should determine whether an investment in the Notes is appropriate in their particular circumstances and should consult with their legal, business and tax advisers to determine the consequences of an investment in the Notes and to arrive at their own evaluations of the investment.

Investment in the Notes is only suitable for investors who:

(i) have the requisite knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Notes;

(ii) are capable of bearing the economic risk of an investment in the Notes for an indefinite period of time;

(iii) are acquiring the Notes for their own account for investment, not with a view to resale (unless investors are capable of bearing the risk of a possible decline of the market value of the Notes), distribution or other disposition of the Notes (subject to any applicable law requiring that the disposition of the investor's property be within its control); and

(iv) will recognise that it may not be possible to make any transfer of the Notes for a substantial period of time, if at all.

If an investment is not suitable for the respective investor, such investor may not take all or some risks inherent with an investment in the Notes into consideration before making an investment decision.

Taxation

Potential purchasers and sellers of the Notes should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Notes are transferred or other jurisdictions. In some jurisdictions, no official statements of the tax authorities or court decisions may be available for financial instruments such as the Notes. Potential investors are advised not to rely on the tax summary contained in this Prospectus but to ask for their own tax adviser's advice on their individual taxation with respect to the acquisition, sale and redemption of the Notes. Only these advisors are in a position to duly consider the specific situation of the potential investor. These risk factors have to be read in connection with the section "Taxation" of this Prospectus.

Independent Review and Advice

Each potential investor in Notes must determine, based on its own independent review and such professional advice as it deems appropriate under the circumstances, that its acquisition of the Notes is fully consistent with its (or if it is acquiring the Notes in a fiduciary capacity, the beneficiary's) financial needs, objectives and condition, complies and is fully consistent with all investment policies, guidelines and restrictions applicable to it (whether acquiring the Notes as principal or in a fiduciary capacity) and is a fit, proper and suitable investment for it (or if it is acquiring the Notes in a fiduciary capacity, for the beneficiary), notwithstanding the clear and substantial risks inherent in investing in or holding the Notes.

A potential investor may not rely on the Issuer, the Managers or any of their respective affiliates in connection with its determination as to the legality of its acquisition of the Notes or as to the other matters referred to above.

Without independent review and advice, an investor may not adequately understand the risks inherent with an investment in the Notes and may lose parts or all of his capital invested without taking such or other risks into consideration before investing in the Notes.

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Risks in connection with the application of the German Act on Issues of Debt Securities (Gesetz über Schuldverschreibungen aus Gesamtemissionen)

A Noteholder is subject to the risk of being outvoted and of losing rights towards the Issuer against his will in the case that Noteholders agree pursuant to the Terms and Conditions of the Notes to amendments of the Terms and Conditions of the Notes by majority vote according to the German Act on Issues of Debt Securities (Gesetz über Schuldverschreibungen aus Gesamtemissionen). The Issuer has appointed a Noteholders’ Representative for all Noteholders and as such a particular Noteholder may lose, in whole or in part, the possibility to enforce and claim his rights against the Issuer regardless of other Noteholders.

Risks relating to the Issuer

General

Rheinmetall depends on its ability to further develop and bring to the market innovative products in a timely manner which includes securing sufficient funding and recovery of research and development costs

The future success of the Rheinmetall-Group depends on its ability to develop and bring to the market new and improved products in a timely manner. The automotive market, in particular, is characterised by progressive development towards higher performance and simultaneously more fuel-efficient, less polluting and quieter engines, growing demand by customers and stricter regulations with respect to engine efficiency, as well as towards affordable cars and hybrid or even electric vehicle concepts. The defence market, on the other hand, is characterised by a high degree of complexity due to the high-tech art technologies involved, the harsh environments in which the products of the Defence Sector are operated and the demand for a high level of reliability. All of these demands entail technical challenges, the mastering of which could make the development by the Group of innovations time consuming. Consequently, Rheinmetall may be unable to further develop and adapt innovative products quickly enough.

In order to maintain its competitive position, the Group must be able to continuously make investments both in its Defence Sector and its Automotive Sector. In fiscal year 2009, the proportion of investments to net sales 3.9% (2.9% in fiscal year 2008) in the Defence Sector and was 4.6% (7.1% in fiscal year 2008) in the Automotive Sector. If the Group were unable to finance its investment needs, its business, financial condition and results of operations could be adversely affected. Moreover, the Group may not be able to recover its investment costs if, for example, its Automotive Sector were to develop a product for a specific model range which then proves to be unsuccessful and is discontinued. Likewise, many of its contracts in the Defence Sector are so-called development orders where the Group's customer, e.g., the Bundeswehr (the German armed forces), undertakes to reimburse the Group for a specific amount of research and development ("R&D") but where the Group bears the risk of cost overruns.

If any of these risks materialised, Rheinmetall's business, results of operations and financial condition could be adversely affected.

The Group's liquidity position is cyclical

Rheinmetall's liquidity position is cyclical, primarily, as a result of the payment behaviour of customers in the Defence Sector (such as a decrease in advance payments). The Group's best net liquidity position generally exists as at fiscal year end and Rheinmetall then starts to slowly build up working capital from the first quarter through, generally, November of each fiscal year when it starts to reduce its net cash position and to utilise its existing syndicated and bilateral credit lines, and thus reduces its net liquidity position during those periods.

Rheinmetall's liquidity position will be adversely impacted if:

* the Group's customers were to extend their normal payment terms;

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* its suppliers were to tighten terms of payment, in particular, in respect of up-front payments and milestones;

* R&D and/or production processes were delayed, resulting in delayed deliveries and thus later than anticipated and forecasted cashflows; or

* the Group has to provide financial assistance to distressed suppliers.

Moreover, the general lack of liquidity, caused by the disruptions in the financial markets, potentially combined with future downgrades of Rheinmetall's credit rating as well as ethical factors relating to the Group's Defence Sector, could adversely impact the Group's ability to secure additional debt financing or increase the costs of additional debt financing.

Rheinmetall is exposed to risks associated with changes in foreign exchange rates and hedging

Rheinmetall operates worldwide and although it is the general policy of the Group to hedge all currency risks it is thus exposed to financial risks that arise from changes in exchange rates. Currency exchange fluctuations could cause losses if assets denominated in currencies with a falling exchange rate lose value, while at the same time liabilities denominated in currencies with a rising exchange rate appreciate. In addition, fluctuations in foreign exchange rates could enhance or minimise fluctuations in the prices of raw materials. Consequently, fluctuations in exchange rates could affect the Group's results of operations.

Transactions involving the delivery of products and services with third parties and companies within the Rheinmetall-Group result in cash inflows and outflows which are denominated in currencies other than the functional currency of the respective member of the Group. Rheinmetall is particularly exposed to fluctuations in, e.g., United States dollar, British pound, Swiss francs, South African rand, Brazilian real, Norwegian kroner and Czech koruna. To the extent that cash outflows of the relevant member of the Group in any one foreign currency are not offset by cash inflows resulting from operational business in the same currency, Rheinmetall hedges the remaining net currency exposure on a case-by-case basis by using appropriate derivative financial instruments, such as currency forwards with a term of up to seven years and currency options with a term of up to 12 months.

Moreover, a number of the Issuer's consolidated subsidiaries as well as joint ventures report their results in currencies other than the euro, which requires the Issuer to convert the relevant items into euro when preparing its consolidated financial statements. These translation risks are generally not hedged.

The Group's hedging strategy could ultimately prove to be (partially) unsuccessful. Also, any hedging transaction executed in the form of a derivative financial instrument may result in losses due to IFRS accounting methods on individual reporting dates. Should any of these risks materialise, this could have a material adverse effect on Rheinmetall's financial condition and results of operations.

Rheinmetall is constantly exposed to potential warranty and product liability claims

Rheinmetall is exposed to potential product liability lawsuits and other proceedings alleging violations of due care, violation of warranty obligations, treatment errors and claims arising from breaches of contract, recall campaigns or fines imposed by governmental bodies. Any such lawsuits and proceedings if initiated and/or any such other claims could result in increased costs for the Group. Moreover, defective products could result in loss of sales, loss of customers and loss of market acceptance. The risks arising from such warranty and product liability lawsuits, proceedings and other claims are insured up to levels considered economically reasonable by the Group, but the insurance coverage could prove insufficient in individual cases. Additionally, any major defect in one of Rheinmetall's products could also have a material adverse effect on the Group's reputation and market perception, which in turn could adversely affect Rheinmetall's sales and results of operations.

Moreover, in the Automotive Sector, vehicle manufacturers are increasingly requiring a contribution from their suppliers to potential product liability, warranty and recall claims. In addition, the Automotive Sector has been - 33 - subject to continuing efforts by its original equipment manufacturers ("OEMs") customers to change contract terms and conditions concerning warranty and recall participation.

Furthermore, Rheinmetall manufactures many products pursuant to customer specifications. If the products manufactured and delivered by the Group's Defence and Automotive Sectors do not meet the requirements stipulated by its customers at the agreed date of delivery, production of the relevant products is generally discontinued until the cause of the product defect has been identified and remedied; however, the Group's customers could potentially claim damages on the basis of breach of contract, even if the cause of the defect is remedied at a later point in time. In addition, failure to satisfy applicable quality requirements could negatively affect the market acceptance of the Group's (other) products and its market reputation in various market segments. If any of these risks were to materialise, Rheinmetall's business, financial condition and results of operations could be adversely affected.

Acquisitions, joint ventures and strategic alliances are important but may not always be successful

Acquisitions, joint ventures and strategic alliances are an important element of the internationalisation and growth strategy of the Rheinmetall-Group. The discontinuation of one or more joint ventures or strategic alliances, or the inability of Rheinmetall to enter into new or to expand existing joint ventures or strategic alliances, could adversely affect the Group's business, results of operations and financial condition.

Moreover, integrating these businesses within the Rheinmetall-Group can prove more difficult and take longer than envisaged, requiring a more significant involvement by senior managers and the team concerned and, in turn, negatively impacting the Group's results of operations and financial condition.

In addition, there is no guarantee that the newly acquired or formed businesses will perform as expected in accordance with the business plan underlying the investment decision. This type of variance can lead to accounting impairments arising on goodwill and other intangible assets, thereby negatively impacting the Group's results of operations and financial condition.

The Group faces risks relating to supplier and other counterparty default

In its Defence Sector, Rheinmetall sources parts of its raw materials from local suppliers in the markets into which it imports its products, while it follows its customers in the Automotive Sector, where it sources most of its supplies in the country where it produces its products. Moreover, the Group's procurement logistics are mainly organised on a just-in-time or just-in-sequences basis and supply delays, cancellations, strikes, insufficient quantities or inadequate quality can lead to interruptions in production and, therefore, have a negative impact on the Group's supply chain continuity, its profitability and financial condition. Rheinmetall tries to limit these risks by trying to select suppliers carefully and monitoring them regularly. However, if one or more of Rheinmetall's suppliers were unable to meet its delivery obligations for any reason (for example, insolvency, destruction of production plants or refusal to perform following a change in control), Rheinmetall may be unable to source input products from other suppliers upon short notice at the required volume and/or quality.

Moreover, an ongoing economic downturn and continuing disruptions in the financial markets, including the bankruptcy, insolvency or restructuring of one or more financial institutions and insurance companies and the inability of these counterparties to honour their obligations vis-á-vis Rheinmetall under existing financial investment, hedging and insurance contracts could adversely affect Rheinmetall's business, financial condition and results of operations.

The Rheinmetall-Group is in demand for qualified key personnel

The success of the Rheinmetall-Group depends on its ability to hire and retain qualified executives as well as a wide variety of employees in key functions and specialists, such as engineers and software experts for R&D. While the Rheinmetall-Group tries to counter these risks by offering fair and competitive performance-related remuneration, good fringe benefits, wide-ranging professional development opportunities as well as promotions - 34 - opportunities and additionally maintains close ties with selected universities and technical colleges so as to obtain access to qualified and suitable graduates at an early stage, there is no guarantee that the Group will be able to retain all relevant personnel or to attract new executives and employees with the required qualifications. The inability of the Group to hire and/or retain all relevant personnel in narrow disputed labour market segments could have a material adverse effect on its business, financial condition and results of operations.

The holding structure of the Issuer bears risks

The Issuer is the Group's holding company and performs strategic management and financial holding functions. It generates income mainly from the allocation of costs within the Group, rent and interest payments as well as the distribution of dividends or transfer of profits by its subsidiaries and joint ventures as well as, where applicable, proceeds from the disposal of shareholdings. Therefore, the ability of the Issuer to fulfil its obligations under the Notes depends on the ability of its subsidiaries and joint ventures to pay for the Issuer's central holding company services and to distribute dividends or to transfer profits to the Issuer.

Moreover, as the parent company, the Issuer issues or procures the issuance of guarantees on commitments undertaken by its subsidiaries on commercial contracts. At 31 December 2009, guarantees issued by the Issuer in support of the Group (including joint ventures) stood at € 1.019 billion. Also, the Issuer has profit and loss transfer agreements (Gewinnabführungsverträge) in place with its major consolidated German subsidiaries which generally obligate the Issuer to compensate these subsidiaries for any net losses (Fehlbeträge) incurred during the relevant subsidiary's a fiscal year. If any of the risks associated with guarantees issued in favour of its subsidiaries or the profit and loss transfer agreements were to materialise, Rheinmetall's business, results of operations and financial condition could be adversely affected.

The Group's success depends on the protection of its intellectual property rights and business secrets

The commercial success of the Rheinmetall-Group depends on its ability to maintain the competitiveness of its products and to ensure high technological standards. The Group is thus exposed not only to the risks associated with the protection of its own IP rights and business secrets but also with its dependence on third-party technologies.

The Rheinmetall-Group has significant R&D expenditure in each fiscal year and conducts most of its R&D in-house and controls the technologies that are critically important to its business through patents, licenses and trademarks as well as non-disclosure agreements with employees, consultants and joint venture partners. However, the Issuer can offer no guarantee that the Group's means of protecting its IP rights will be adequate, that existing or future non-disclosure agreements will not be violated, that business secrets and know-how will not otherwise be revealed or independently developed by its competitors, including its joint venture and strategic alliance partners, or that the Group will obtain adequate compensation in the event of infringement.

In the Automotive Sector, the Group's IP rights may be infringed from time to time without Rheinmetall seeking full infringement protection and/or remedies. Rheinmetall believes that its IP rights and interests are additionally secured by its special manufacturing know-how which is not accessible to third parties as well as the constant development of its automotive products.

While the Issuer is not aware of any current infringements of third-party IP rights by the Rheinmetall-Group, it can offer no assurance that third parties will not bring infringement actions and/or claim damages for the alleged infringement. Any infringement action and/or damages claim against the Group could result in high costs for litigation, tie up management resources, cause delay in the delivery of products or obligate Rheinmetall to obtain licenses; also, there is a risk that Rheinmetall may not be able to obtain relevant licences at all or on reasonable commercial terms. If any of these risks materialised, the Group's business, results of operations and financial condition could be negatively impacted.

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Risks associated with the complexity of the business conducted by the Group

The nature of the Group's business is complex and these complexities may harbor risks in form of unexpected technical obstacles which can ultimately result in cost overruns and even penalty payments to customers for delayed deliveries as well as delays in production, problems with partners or subcontractors and delays in acceptance and invoicing. Rheinmetall seeks to limit these risks through professional project management, extensive quality management efforts and contractual stipulations; however, there is no assurance that those measures will at all times prove successful. If any of these risks were to materialise, the Group's business, results of operations and financial condition could be negatively impacted.

IT and data protection risks

The Group relies on centralised and decentralised, standardised and individual, highly integrated information technology systems, processes and networks to support business processes and external and internal communications. These systems, processes and networks are potentially vulnerable to damage or interruption from a variety of sources which could severely compromise the management of the Group's or a single Group company's business and production processes. The Group additionally faces daily challenges to protect its networks, systems and processes against potential internal and external threats, such as viruses.

Although Rheinmetall has taken precautions to manage risks relating to system and network disruptions, an extended outage in a data center and/or telecommunications network used by the Group's systems, human error or internal or external security breaches could lead to unanticipated interruptions and other impediments of Rheinmetall's systems, networks and/or processes and ultimately result in unrecoverable data loss.

Rheinmetall cannot offer any assurances that it will at all times be successful in the management of its outsourcing partners and suppliers who provide its IT infrastructure, systems and related processes, including data obtained from or stored for third-parties, thus subjecting the Group to damages claims and potentially impacting its financial condition.

Ownership of the Group's production facilities bears environmental risks

The majority of the land owned or rented and occupied by the Rheinmetall-Group has been, and continues to be, used for industrial and production purposes and is thus inherently subject to possible contamination and the Issuer has made provision in its financial statements for any contamination has been ascertained on the Group's properties.

Moreover, the Issuer actively manages the Group's environmental risks by:

* ensuring compliance of plants and products with applicable environmental laws, requirements and regulations;

* issuing and monitoring the application of extensive guidelines on quality assurance and stringent quality controls;

* certification in accordance with international standards such as DIN 9001, TS 16949 and ISO 14001; as well as

* preventative maintenance, ongoing methodical modernisation of equipment and the improvement of production processes and manufacturing techniques.

Rheinmetall could be adversely affected by property loss and business interruption

The consequences of damage and loss caused by fire, natural hazards, supply shortage, or other disturbances at Rheinmetall's production facilities or within the Group's supply chains — with customers and with suppliers — - 36 - can be severe. The risks arising from business interruption and loss of production are insured up to levels considered economically reasonable by the Group, but its insurance coverage could prove insufficient in individual cases. Furthermore, such events could injure or damage individuals, third party property or the environment or simply result in the loss of certain customers, which could, among other things, lead to considerable financial costs for Rheinmetall. The realisation of any of these risks could have a material adverse effect on the Group's business, financial condition and results of operations.

The Rheinmetall-Group is exposed to procurement and price fluctuation risks in respect of raw materials

The raw materials required for the business of the Rheinmetall-Group, e.g., copper, pure aluminium and aluminium alloys, nickel and steel, as well as parts and components may not be available at all, or in the quality or quantity required, or in time. While the Group secures its supplies from a variety of sources and suppliers, effectively manages its supply contracts and otherwise closely monitors the procurement markets as well as its suppliers, if any of these procurement risks were to materialise, this could have a material adverse impact on the Group's financial results.

Moreover, the Rheinmetall-Group is exposed to fluctuations in prices of raw materials. In the recent past, copper, aluminium, nickel and steel prices have fluctuated on a worldwide basis and, for the most part, have steadily increased since 2009. The Automotive Sector has established a central commodities office which controls and optimises procurement timing and volumes. The commodities office employs derivative financial instruments to hedge the Group's procurement risks, primarily exchange traded commodities futures contracted on a financial basis. Also, where possible, contracts with customers are subject to price escalation clauses. If the Group were unable to compensate for or pass on its increased costs to customers, such price increases could have a material adverse impact in the Group's financial results.

The Rheinmetall-Group is exposed to fluctuation in prices for energy

The Rheinmetall-Group depends on large quantities of energy for production purposes and is thus affected by changes in energy prices. The Issuer aims to address this risk by coordinating Group-wide invitations to tender, entering into long-term contracts with energy suppliers as well as by optimising the Group's electricity price portfolio via the European Energy Exchange (EEX). However, if the Rheinmetall-Group were unable to secure a supply of energy at cost-efficient prices or to compensate for or pass on its increased costs resulting from increased energy prices to customers, such price increases could have a material adverse impact on the Group's financial results.

Defence

The business of the Defence Sector depends on government spending

Defence technology is a very political area and Rheinmetall conducts most of its business with government customers and security agencies, in particular, in the defence markets in Germany (which accounted for 36% of sales in fiscal year 2009) and the rest of Europe (which accounted for 30% of sales in fiscal year 2009). In the past, defence spending throughout Europe has remained stable, albeit at a relatively low level of an estimated approx. 1.7% of the average gross domestic product in 2007 throughout the European Union, compared with an estimated approx. 4.5% of gross domestic product in 2007 in the United States of America. However, the barriers to entry to the US military spending market are high and can, in most cases, only be achieved through US joint ventures or US subsidiaries which bear other risks, including in respect of integration, currency exchange and performance.

While the Group expects global military spending to remain stable in the short to medium term, a reduction in defence budgets in Germany or elsewhere in the European Union as well as a more restrictive budgetary policy or the earmarking of specific major projects without a concurrent increase in military spending could adversely affect Rheinmetall's business, results of operations and financial condition. Moreover, if governments in the core defence markets serviced by Rheinmetall were to – including as a result of future decreases in respect of budgets - 37 - available for military spending in response to sovereign indebtedness resulting from the various stabilisation programmes set-up for banks or, most recently, member states of the European Union – postpone or even cancel, in whole or in part, previous/existing orders or refrain from, in whole or in part, new orders, this could also have an adverse effect on Rheinmetall's business, results of operations and financial condition. In addition, the deterioration of political relations between countries or changes in political leadership could cause governments to cancel or unfavourably modify contracts in progress or under negotiation or impose or increase tariffs, all of which could have an adverse effect on Rheinmetall's business, results of operations and financial condition.

The business conducted by the Defence Sector is subject to a complex legal and regulatory framework

Many of the Defence Sector's business activities are subject to a complex legal and regulatory environment which is constantly evolving both at national and international level. The legal and regulatory framework in which the Defence Sector operates covers a broad range of areas, relating to compliance and, in particular, due to their magnitude, export controls and corruption prevention.

Although the Rheinmetall-Group closely monitors developments within this legal and regulatory framework and has a comprehensive compliance organisation in place, subjecting the Group's employees to strict guidelines and standards, it may not always be able to anticipate them in advance which could, in turn, adversely affect its business. Moreover, despite the steps taken by the Issuer for the Group to comply with all applicable laws and regulations, there are inherent risks, including the interpretative powers of regulatory agencies and changes in the legal/judicial precedents as well as sanctioning powers. In most cases, regulators together with judicial authorities have the right to pursue legal proceedings which could lead to civil, administrative or even criminal rulings. Any of these rulings could result in an order on the Group or individual Group companies to temporarily cease activities and thus result in an adverse impact on Rheinmetall's results of operations and financial condition.

Export controls could restrict access to military markets

Product exports account for a substantial portion of the Defence Sector's sales. In Germany, nearly all of the Defence Sector's products are either "war weapons" (as defined in the war weapons list (Kriegswaffenliste) annexed to the War Weapons Control Act (Kriegswaffenkontrollgesetz) or "other defence goods" (as defined in part I section A of the export list (Ausfuhrliste) annexed to the Foreign Economic Relations Regulation (Außenwirtschaftsverordnung) and similar classifications apply in other jurisdictions where the Defence Sector conducts business. Exporting these products to customers outside of their country of manufacture always requires specific government approvals.

In Germany, all product exports require an export licence under the War Weapons Control Act and/or Foreign Economic Relations Act (Außenwirtschaftsgesetz)/Foreign Economic Relations Regulation and export licences will be granted or refused depending on the country of importation. In particular:

* exports into countries within the European Union as well as Japan, Australia, Norway, Canada, the United States of America, New Zealand and Switzerland will generally be licensed, provided only that the end- use of the product within the relevant privileged country of importation is guaranteed;

* exports into countries which are subject to weapons embargos from the European Union or the United Nations or which are listed in country list K as annexed to the Foreign Economic Relations Regulation (currently Cuba and Syria) will not be licensed at all;

* exports into the rest of the world will be licensed on a case-by-case basis; in cases of high political importance, the German Federal Security Council (Bundessicherheitsrat), a committee of the German Government comprised of, among others, the German Chancellor, the Secretaries of State, Defence, Interior, Justice and Economics, is tasked to decide on the granting of the license.

Exports from production locations outside of Germany are subject to export control rules and regulations as applicable in the relevant jurisdiction. - 38 -

Export controls entail the following risks in particular:

* export licences are exclusively subject to political assessment and Rheinmetall generally has no claim to a licence; also, the possibilities to assert the granting of a license in the courts are very limited;

* countries for which export licences have been granted could become subject to weapons embargos by the United Nations or the European Union which would invalidate the previously granted licence and, consequently, bar exports of the products into these countries;

* where the underlying political situation in a licensed country of importation changes materially, the relevant government may withdraw a previously granted licence;

* export control legislation or the administrative practice in relation thereto could change, and while existing licences may be grandfathered (subject to the immediately preceding events), there is no guarantee that Rheinmetall will be able to obtain export licences for similar products in the future.

Overall, further restrictions on access to military markets would have a negative impact on Rheinmetall's business, results of operations and financial condition.

The Defence Sector is subject to reputational risks

Due to the nature of the Defence Sector's business activities, Rheinmetall is subject to reputational risks. In particular, activists and other third parties have in the past, and could continue to claim, that the Defence Sector breaches applicable laws and conventions relating to anti-personnel land mines and cluster munitions.

Rheinmetall fully complies with all applicable legal and regulatory requirements and fully supports and adheres to the position of the German Government, which has made considerable diplomatic efforts in relation to the adoption of a convention on cluster munitions, which was signed by Germany in late 2008 (the "Oslo Convention") as well as the ban on anti-personnel landmines as stipulated in the so-called Ottawa Convention in late 1997. Rheinmetall does not produce, assemble, maintain or deliver (i) cluster munitions or any kind of components relating to cluster munitions as defined in the Oslo Convention or (ii) anti-personnel landmines as defined in the Ottawa Convention.

If any of those or another reputational risk were to materialise, this could adversely affect the Group's business, results of operations and financial condition.

Automotive

The impact of the global economy on sales to OEMs is significant

The Automotive Sector, which the Group operates under the umbrella of Kolbenschmidt Pierburg AG, generates a large percentage of its sales from OEMs.

In response to the global economic downturn, OEMs slowed or even halted production in late 2008 to wind down existing inventories, thus adversely affecting the demand for, and consequently the sales of, the Automotive Sector's products to its OEM customers. Although production has been increasing over the last months, uncertainty remains and sustaining economic recovery in major markets around the world remains a primary concern and automotive production could fall again or remain at the current levels for an extended period. Tax increases in response to sovereign indebtedness resulting from the various stabilisation programmes set-up for banks or, most recently, member states of the European Union, could further reduce the income available for consumer spending and may hence be another factor that could weaken the global demand in the automotive markets. A continued weakness in, or deterioration of, the global automotive markets, the consumer credit markets or consumer spending in general is likely to adversely affect the Group's sales and results of operations. - 39 -

Moreover, a combination of significantly lower global production levels, tightened liquidity and increased cost of capital has caused severe financial distress among a number of OEMs and have forced these companies to implement various forms of restructuring actions, including reorganisations under bankruptcy laws. There can be no assurance that any of these restructuring measures will be successful. If one or more of Rheinmetall's OEM customers were lost or to terminate a supply contract prematurely, the original investment made by the Group to provide such products or outstanding claims against such OEM could be lost in whole or in part.

The realisation of any of these risks could have a material adverse effect on the Group's business, financial condition and results of operations.

The Automotive Sector operates in a cyclical industry

Global production of vehicles and (as a result) sales to OEMs (from whom the Automotive Sector currently generates more than half of its sales) are cyclical and depend, among other things, on general economic conditions and consumer spending and preferences, which can be affected by a number of factors, including fuel costs and the availability of consumer financing. As the volume of automotive production fluctuates, the demand for the Group's products aimed at the OEM market also fluctuates, as OEMs generally do not commit to purchasing minimum quantities from their suppliers or fixed prices.

Future developments in the markets in which the Automotive Sector operates are difficult to predict and there is a risk that the Automotive Sector's facilities are underutilised or have insufficient capacity to meet customer demand if the markets in which the Automotive Sector is active either grow or decline faster than anticipated. An underutilisation could result in idle capacity costs, write-offs of inventories and losses on products due to falling average sales prices and falling production volumes produce declines in sales and margins as well as earnings. In an effort to counter these risks, the Automotive Sector has launched a comprehensive restructuring programme in 2008.

The risks related to the cyclical nature of the industry in which the Automotive Sector operates could have a material adverse effect on Rheinmetall's business, financial condition and results of operations.

The Automotive Sector is subject to intense competition, which could reduce Rheinmetall's sales or put continued pressure on its sales prices

The automotive supply industry is highly competitive and has been characterised by rapid technological change, high capital expenditures, intense pricing pressure from major customers, periods of oversupply and continuous advancements in process technologies and manufacturing facilities.

As OEMs are increasingly affected by innovation and cost-cutting pressures from competitors, they seek price reductions in both the initial bidding process and during the term of the contract with their suppliers, such as the Automotive Sector. In particular, vehicle manufacturers expect lower prices from suppliers for the same, and in some cases even enhanced, functionality, as well as consistently high product quality. If the Automotive Sector were unable to offset continued price reductions through improved operating efficiencies and reduced expenditures, price reductions could impact profit margins.

The Automotive Sector's existing competitors may pursue aggressive pricing policies and offer conditions to OEMs that are more favourable than Rheinmetall's. Moreover, the markets in which the Automotive Sector operates are characterised by a trend toward consolidation. Increased consolidation among the Automotive Sector's competitors could allow competitors to further benefit from economies of scale, offer more comprehensive product portfolios and increase the size of their serviceable markets. This, much like increased consolidation and/or cooperations or alliances between any of the Group's OEM customers, could require Rheinmetall to accept considerable reductions in the profits of the Automotive Sector and the loss of market share due to price pressures. In addition, competitors may gain control over or influence on suppliers or customers of Rheinmetall's Automotive Sector by acquiring shareholdings in such companies, which could adversely affect the Sector’s supplier relationships. - 40 -

The realisation of any of these risks could have a material adverse effect on Rheinmetall-Group's business, financial condition and results of operations.

The Automotive Sector is exposed to risks associated with market trends and developments that could affect the vehicle mix sold by OEMs

Global production of vehicles and consequently sales to OEM customers are currently subject to a number of trends and technical developments that may affect the vehicle mix sold by OEMs, including:

* due to increasingly stringent consumption and emission standards through the industrial world, including the European Union, the United States of America and Japan, as well as oil price fluctuations and the resulting significant increase in fuel costs, car manufacturers are increasingly forced to develop environmentally-friendly technologies aimed at lower fuel consumption and a reduction of CO2-emissions. These developments have caused a trend towards vehicles with lower fuel consumption, in particular, smaller cars, in these markets;

* over the past decade, hybrid electric vehicles, combining a conventional internal combustion engine propulsion system with an electric propulsion system, have become increasingly popular and their market share may increase further in the coming years. Moreover, market participants are continuing to develop electric vehicles using only one or more electric motors for propulsion and if these participants were able to develop functional electric vehicles that suit customers' tastes, electric vehicle may become popular and gain market share in the medium to long term.

As a consequence of these market trends and technical developments, the vehicle mix sold by the Automotive Sector’s customers has shifted over the last years and may shift further in the future. The parts and components produced by the Automotive Sector partly relate to up-scale vehicle models and diesel engines and should the Automotive Sector not be able to develop appropriate strategies as a response to these or similar market trends and technical developments, the effects of these trends and technical developments could materially impact the Automotive Sector's sales and profit margins and therefore its business, financial condition and results of operations.

Legal Risks

Risks associated with corporate restructurings and claims brought by outside shareholders/shareholder actions

The Group is currently subject to three legal proceedings that have been initiated by outside shareholders with a view to reviewing the suitability of the share exchange ratio and the amount of cash compensation offered to them in connection with restructuring measures (squeeze-outs) in accordance with applicable German corporate law. In the proceedings instituted to squeeze out the outside shareholders in Kolbenschmidt Pierburg AG following the acquisition by the Issuer of 95% of the voting rights, the claims brought by outside shareholders were dismissed by the Stuttgart district court in September 2008; however, 55 of the affected outside shareholders lodged appeals against this decision with the Stuttgart higher regional court which are still pending. The length and outcome of the other two legal proceedings opened in 1998 and 2003 in connection with the merger of Kolbenschmidt AG and Pierburg GmbH into Kolbenschmidt Pierburg AG and the squeeze out of outside shareholders in Aditron AG are also still open. However, Rheinmetall takes the view that the claims asserted in all three court proceedings are not justified.

Moreover, there is no guarantee that the outside shareholders in Simrad Optronics ASA which were squeezed out by the Issuer in July 2010 will not bring claims in connection with this squeeze-out.

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South African Apartheid litigation

The Issuer is involved in the so-called Khulumani case in the United States of America which deals with, among other things, claims against companies that allegedly supported the former apartheid regime in South Africa. These proceedings against Rheinmetall AG are currently suspended due to ongoing parallel proceedings brought against other companies affected by the Khulumani case. The Issuer regards the legal action as inadmissible and does not regard the US courts as having jurisdiction. The claimants are not US citizens, the event did not take place on US territory and prosecutions have already been carried out in Germany for the legal violations upon which the action is based. However, the Issuer has made appropriate provisions for legal costs.

Change in tax laws and tax audits

The Group operates in a global environment and is thus subject to changes in tax laws and the amount of taxes imposed on companies. Additional tax expenses could also accrue at the level of the Issuer, its subsidiaries or joint ventures in relation to previous tax assessment periods which have not been subject to a tax audit yet. In ongoing tax audits which relate to assessment periods 2004 to 2006 in Germany as well as future tax audits, the tax laws and/or relevant facts could be interpreted by the tax authorities – for example in the area of transfer pricing – in a manner that differs from that of the Issuer. As a result, the tax authorities could revise original tax assessments and substantially increase the tax burden (including interest and penalty payments) of the affected entities within the Group. The Issuer takes the view that the current amount of provisions and liabilities shown in the annual consolidated financial statements of Rheinmetall for fiscal year 2009 as well as its interim consolidated financials statements as at 30 June 2010 reflects a potential exposure from such tax audits. The realisation of any of these risks could have a material adverse effect on Rheinmetall's business, results of operations and financial condition.

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DESCRIPTION OF THE ISSUER

Statutory auditors

The independent auditor of Rheinmetall Aktiengesellschaft (the "Issuer" or "Rheinmetall AG" and, together with its consolidated subsidiaries, "Rheinmetall", the "Rheinmetall-Group" or the "Group") is PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Moskauer Straße 19, 40227 Düsseldorf, Germany ("PwC"), a member of the German Chamber of Chartered Accountants (Wirtschaftsprüferkammer), Rauchstraße 26, 10787 Berlin, Germany. PwC has audited the annual consolidated financial statements prepared by the Issuer as of and for fiscal years ended 31 December 2008 and 31 December 2009, respectively, and has rendered, in each case, an unqualified auditor's report thereon (uneingeschränkter Bestätigungsvermerk).

Selected financial information for the Rheinmetall-Group

The following table sets out selected financial information relating to the Rheinmetall-Group. The information has been extracted from the audited financial consolidated statements of the Issuer for fiscal year ended 31 December 2009 as well as the unaudited consolidated interim financial statements of the Issuer for the period ended 30 June 2010. These consolidated financial statements of the Issuer have been prepared in accordance with the International Financial Reporting Standards as adopted in the European Union.

Period from Period from Fiscal Year Fiscal Year 1 January until 30 1 January until ended 31 ended 31 June 2010 30 June 2009 December 2009 December 2008 (unaudited) (unaudited) (audited) (audited) (in € million)

Sales 1,728 1,506 3,420 3,869 Order backlog 5,247 3,826 4,940 3,683 Total operating performance 1,862 1,566 3,395 3,927 Net operating income 98 (63) 13 243* EBITDA 178 28 180 411* EBIT 104 (62)* 15 245* EBT 78 (89)* (46) 193* Net income 57 (70)* (52) 142* Cash flows 134 25* 120 308*

30 June 2010 31 December 31 December 2009 2008 (unaudited) (audited) (audited) (in € million) Equity 1,210 1,134 1,080* Balance sheet totals 3,869 3,835 3,612* Non-current financial liabilities 179 180 360 Current financial liabilities 284 353 48 Cash and cash equivalents 125 557 203 Employees (capacities) as at balance sheet date 20,181 19,766 21,020

* Since December 31, 2009 actuarial gains and losses arising in connection with the valuation of pension obligations and associated plan assets have been recognised directly in equity. The amendment to accounting affects the balance sheet, income statement and income and expenses recognised in equity, but not the cash flow statement. The presentation of the cash flow statement was amended to the effect that

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the balance of interest paid and received is not longer allocated to financing activities but is instead included in the cash flow from operating activities. Prior-year comparatives have been adjusted accordingly.

Information about Rheinmetall AG

History and Development

Rheinmetall AG emerged from "Rheinische Metallwaaren und Maschinenfabrik Actiengesellschaft", which was established on 13 April 1889, and operated as "Rheinmetall Berlin Aktiengesellschaft" from 1956 until 1996. Since then, the Issuer operates under its current name "Rheinmetall Aktiengesellschaft". Rheinmetall AG is a publicly listed stock corporation (Aktiengesellschaft) established under German law.

Rheinmetall AG's has its registered office in Düsseldorf, Germany, which is also the location of the Group's headquarters. Rheinmetall AG is registered in the commercial register (Handelsregister) of the Düsseldorf local court under HRB 39401.

Rheinmetall AG's head office is located at Rheinmetall Platz 1, 40476 Düsseldorf, Germany; its telephone number is: +49 (0)211 473 01.

Business overview

Principal activities of Rheinmetall AG

Rheinmetall AG is the strategic management and financial holding company of the Rheinmetall Group, consisting of the corporate sectors defence (the "Defence Sector") and automotive (the "Automotive Sector"). The Issuer assumes strategic responsibilities on behalf of the entire Group, e.g., in the following areas: finance, accounting, investor relations and corporate communications, tax, legal and human resources. Together with its wholly-owned subsidiary Rheinmetall Immobiliengesellschaft mbH, which specialises in real estate activities, the Issuer also manages the real estate portfolio of the Group which, as at 30 June 2010 comprised the property located in Düsseldorf-Derendorf covering an area of approx. 2.4 hectares and a training terrain located in the Lüneburg heath in northern Germany which covers an area of more than 53 square kilometres. As at 31 December 2009 and 30 June 2010, the Issuer employed 107 and 105 personnel, respectively.

Defence Sector

The Defence Sector is one of the leading European suppliers of army technology and offers a wide range of systems and components of armoured and other military vehicles, weapons and ammunition, air defence and defence electronics.

With sales of € 1,898 million in 2009, the Defence Sector generated 55% of the Group's total sales for fiscal year 2009 (€ 1,814 million or 47% in fiscal year 2008); in the first six months ended 30 June 2010, the Defence Sector had sales of € 762 million (€ 789 million in the first six months in fiscal year 2009).

The Defence Sector had 9,304 employees as at 31 December 2009 (compared with 9,217 as at 31 December 2008) and 9,376 as at 30 June 2010.

The operations of the Group's Defence Sector are organised into six divisions, which operate as profit centres and which are responsible for their own market segments:

The "Land System division" offers an array of products which extents from armoured vehicles (including infantry fighting vehicles such as the Puma, reconnaissance and combat vehicles such as the Fuchs and self- propelled howitzers) via support vehicles (such as armoured recovery vehicles, armoured bridge-laying vehicles and mine clearing systems), command and functional vehicles (such as advanced protective vehicle systems and transport vehicles such as the Boxer) to modular turret systems as well as services and logistics offerings.

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Moreover, the Land System division supplies technology for detecting and classifying nuclear, biological and chemical hazards. The Land Systems division also harbours the joint venture with MAN Nutzfahrzeuge AG ("MAN") – Rheinmetall MAN Military Vehicles GmbH ("RMMV") – a provider of complete solutions in the market for military wheeled vehicles, covering the entire range of armoured and unarmoured transport, command and role-specific vehicles for the international armed forces. The Land Systems division operates production facilities in Germany and the Netherlands.

The "Weapon and Munition division" offers an array of large- and medium-calibre weapons and ammunition as well as weapon stations. These include the main armament of the Leopard 2 tank and of the PzH 2000 self- propelled howitzer as well as the MLG27 light naval gun and the MK30-2/ABM automatic cannon for infantry fighting vehicles, such as the Puma. Moreover, the division is a leading supplier in the field of protection systems, such as smoke grenades, vehicle protection systems, and airborne flares. Furthermore, the division is actively working to develop and market a variety of forward-looking new technologies. These include non-lethal weapons and systems for safeguarding critical infrastructure (such as camouflage systems for nuclear power plants) and other assets, as well as facilities for recycling and disposing of ammunition. The Weapon and Munition division operates production facilities in Germany, Switzerland, Austria, [Italy,] Norway, South Africa, Canada and the United States of America.

The "Propellants division" develops and manufactures propellants for military and civil sector requirements. Beside artillery and mortar charge systems and propellant powder for small-, medium- and large-calibre applications, the Propellants division develops and produces propellant components, combustible cast parts and related production materials. These products include modular propelling charges for rapid-fire, long-range self- propelled howitzers and field guns. In addition, the Propellants division supplies all types of single- and multi- based propellant powders for all types of ammunition. The Propellants division also applies its defence technology expertise to special purposes in the automotive (e.g., airbags, seat belt tighteners) and aviation industries (e.g., flares), as well as in certain medical and fastening applications. Another field of expertise in the non-military sector is the preservation of paper. The Propellants division operates production facilities in Germany and Switzerland.

The "Air Defence division" is one of the leading makers of air defence systems and offers short-range cannon- and missile-supported systems. The Air Defence division is the sole system supplier able to deliver radar systems, fire control technology, automatic cannon and AHEAD airburst ammunition. The Air Defence division additionally advises and supports customers on fielding and maintaining new and existing weapon systems, including training programmes, and supplying combat performance upgrades to extend the useful service life of systems and equipment, e.g., by retrofitting aging automatic cannons with AHEAD technology. The Air Defence division operates production facilities in Switzerland and Germany.

The "C4ISTAR division" (short for Command, Control, Communications, Computers, Intelligence, Surveillance, Target Acquisition & Reconnaissance) possesses a broad technological base in the field of defence electronics and works in close cooperation with the Group's customers to conceptualise and create new products and system solutions. The C4ISTAR division offers ground forces worldwide technology products, encompassing fire control units, command & control and reconnaissance systems for combat vehicles of all types, as well as unmanned air vehicles, such as reconnaissance and target acquisition drones. The C4ISTAR division also offers components ranging from ground surveillance sensor equipment to thermal-imaging systems. Moreover, the potential inclusion of the C4ISTAR division's products in a complex network-based environment can be tested for customers under realistic conditions using NECLab, the division’s concept development and experimentation facility. The C4ISTAR division operates production facilities in Germany and the United Kingdom.

The "Simulation and Training division" provides simulation and training systems. Simulators spare real-world equipment from wear-and-tear and exposure to the elements, as well as enabling training in extreme situations that would be virtually impossible to practise in the field. Simulators lend themselves to ground, air and naval forces as well as civil sector users, recreating a realistic environment for training individual operators and crews. Moreover, they can be used to train entire units in tactical operations to prepare troops for out-of-area peace enforcement missions. The Simulation and Training division's portfolio of products ranges from - 45 - computer-assisted training software and part-task trainers to full-mission simulators and operating agreements for the combat training centre and the flight training centres. Furthermore, the division is supporting the process of force transformation by networking simulators designed for various components of the military. The Simulation and Training division operates facilities in Germany.

The Defence Sector conducts research and development ("R&D") both by means of self-financed development projects as well as developments specifically ordered and paid for by its customers. Self-financed R&D amounted to € 85 million in fiscal year 2009 (fiscal year 2008: € 61 million), of which € 30 million were capitalised in 2009 (compared with € 11 million in 2008). Currently, the most important self-financed development projects relate to the armament of the German infantry, the C-RAM, or counter rockets, artillery and mortars, system as well as the armoured multi purpose vehicle (AMPV).

Automotive Sector

Kolbenschmidt Pierburg AG is the management company of the Group's Automotive Sector (the "Kolbenschmidt Pierburg-Group"). The Kolbenschmidt Pierburg-Group is a major supplier of the automotive industry worldwide and develops, produces and supplies power train components and sub-systems in close cooperation with its customers and strategic alliance and joint venture partners in production locations in Europe, North and South America and Asia. The headquarters of the Kolbenschmidt Pierburg Group are located in Neckarsulm, Germany.

With sales of € 1,522 million in 2009, the Automotive Sector generated 45% of the Group's total sales for fiscal year 2009 (€ 2,055 million or 53% fiscal year 2008); in the first six months ended 30 June 2010, the Automotive Sector had sales of € 966 million (€ 717 million in the first six months in fiscal year 2009).

The Kolbenschmidt Pierburg-Group employed 10,339 employees as at 31 December 2009 (compared with 11,682 as at 31 December 2008) and 10,679 as at 30 June 2010.

The Kolbenschmidt Pierburg-Group comprises the following six divisions:

Within the Kolbenschmidt Pierburg-Group, the Pierburg division is the specialist for emission control, air supply, actuators and solenoid valves, offering high-technology solutions, such as DC-motor driven exhaust gas recirculation systems, secondary air systems, divert-air valves, as well as many different versions of drive and control modules. Consequently, R&D is important and the Pierburg division deploys modern development tools as well as engineering technology, including a fully fitted-out electronic laboratory with electromagnetic compatibility chambers and air-conditioned zones to assist the various product areas in the testing of prototypes and specimens as well as engine and roller dynamometers and vibration units which enable all relevant measurements and tests to be carried out in order to address growing systems responsibility, to comply with the specified quality and to cater to and satisfy customer needs as a full-services provider. The Pierburg division operates production facilities in Germany, the Czech Republic, Spain, India and the United States of America.

The Pierburg Pump Technology division specialises in advanced pump technology. The product portfolio ranges from coolant pumps, oil pumps and water recirculation pumps to vacuum pumps. Thanks to its commitment to R&D, Pierburg Pump Technology has devised solutions and created the preconditions for powerful yet fuel-efficient engines with ingenious temperature and oil management systems. The division's R&D centres in Germany cooperate closely with the R&D departments of other divisions of the Automotive Sector. The Pierburg Pump Technology division operates production facilities in Germany, France, Italy, Mexico, India and Brazil.

The KS Kolbenschmidt division develops, produces and markets gasoline and diesel engine pistons for cars and commercial vehicles and is among the foremost players in its segment. Other products include pistons for two-cycle engines and compressors as well as large bore-pistons for stationary, marine and locomotive applications. The KS Kolbenschmidt division conducts significant R&D at the development centres in Germany, the United States of America, Brazil and Japan for the purposes of continuously advancing its piston concepts and - 46 - developing new types of pistons, materials and surface coatings in order to address the rising demands of its customers on gasoline and diesel engines. Moreover, the KS Kolbenschmidt division collaborates closely with various universities and research institutes in Germany and abroad. The KS Kolbenschmidt division operates production facilities in Germany, France, the Czech Republic, the United States of America, Mexico, Brazil, China and Japan.

The KS Gleitlager division is the specialist in high-precision sliding elements within the Kolbenschmidt Pierburg-Group and its core capability is the development and production of eco-friendly internal combustion engine bearings. The division's current product portfolio covers bearing shells, bushings and thrust washers made of aluminium, bronze and brass, of either solid metal or steel composites as well as dry bearings of steel-plastic composites for low-maintenance and maintenance-free applications. KS Gleitlager's R&D efforts are strictly geared to the requirements of its customers and the introduction of new technologies in production and surface treatment, innovative development work and a clear customer orientation have made the KS Gleitlager division one of the world's leading suppliers of engine bearings and dry bearings (Permaglide®). The KS Gleitlager division has own production facilities in Germany, Brazil, and the United States of America.

The KS Aluminium-Technologie division manufactures engine blocks, cylinder heads and other car components from aluminium and aluminium-silicon alloys, materials that play a leading role in promoting lightweight engine construction and hence feature cost-benefit advantages in modern car engineering. Carmakers expect their cylinder crankcases to combine low cost with low weight and rigidity, along with resistance to high stress and the division is thus focusing its R&D efforts on the further development of technologies. The division operates facilities in Germany and China. Moreover, through KS ATAG TRIMET Guss GmbH, its non-consolidated joint venture with Trimet Aluminium AG, the KS Aluminium-Technologie division additionally operates a facility in Eastern Germany.

The Motor Service division is the parts specialist of the Kolbenschmidt Pierburg-Group and pools its worldwide aftermarket activities directed at engine repair shops and parts retailers. Single-source aftermarket parts and components assure customers of the trouble-free functioning, dimensional precision, and extended durability of all Kolbenschmidt Pierburg-Group sourced products. The Motor Service division supplies retailers in 130 countries worldwide.

Investments

In the first six months of fiscal 2010, investments in property and equipment (Sachanlagevermögen) and intangible assets (immaterielle Vermögenswerte) amounted to € 80 million (first six months in fiscal year 2009: € 71 million).

In addition, in April 2010, the joint venture between Rheinmetall and MAN Nutzfahrzeuge AG ("MAN") – Rheinmetall MAN Military Vehicles GmbH ("RMMV") – was cleared by the relevant competition authorities. RMMV combines both Rheinmetall's and MAN's expertise in wheeled tactical and logistical vehicles and caters to the needs of the military at home and abroad for protected and unprotected transport, command and multifunctional vehicles. Rheinmetall holds a 51% stake in the company, with the remaining 49% held by MAN. In a first step, the development and sales activities of Rheinmetall and MAN in the wheeled vehicle sector have been transferred to RMMV effective 1 May 2010. In a second step, Rheinmetall and MAN agreed to integrate their relevant production facilities into the joint venture structure by the end of 2011, though they will remain at their present locations in Kassel, Germany (Rheinmetall) and Vienna, Austria (MAN). During the first phase, the Issuer expects RMMV to have approx. 370 employees which the Issuer then expects to increase to around 1,300 following completion of the second phase. Also, pursuant to the Issuer’s current projections and estimates, following completion of the second phase, annual sales of RMMV could be in excess of € 1 billion.

Moreover, in July 2010, following a squeeze-out procedure conducted in accordance with the Norwegian Companies Act, the Issuer completed its takeover of SIMRAD Optronics ASA of Nøtterøy, Norway ("Simrad Optronics") and now holds 100% of the shares and voting rights in Simrad Optronics. Simrad Optronics produces components for remote control weapon stations, electro-optical devices and weapon system upgrades for - 47 - a global client base and generated sales of Norwegian krone 624 million, or € 71 million (calculated on the basis of the 2009 average exchange rate of € 1 = Norwegian krone 8.7908), in fiscal year 2009. Simrad Optronics will be integrated into the Weapon and Munition division.

Effective 1 July 2010, the Rheinmetall-Group took up 51% in Verseidag Ballistic Protection GmbH ("Verseidag"). Verseidag manufactures products aimed at protecting the crews of civilian and military vehicles, aircraft and ships from ballistic threats and explosive devices and specialises in developing and producing advanced metal and ceramic materials as well as special textile fabrics specifically designed to deliver maximum survivability. Verseidag employed on average 50 employees in fiscal year 2009 employees and generated sales in fiscal year 2009 of around € 21 million.

Moreover, Rheinmetall-Group is expecting to take over the defence business operations and assets of French EPC Group's Italian subsidiary Società Esplosivi Industriali SpA ("SEI") within the third quarter of 2010. SEI supplies aircraft ammunition and underwater defence systems and in fiscal year 2009, SEI's 115 employees generated sales of around € 20 million.

Principal Markets

With its two corporate sectors, the Defence Sector and the Automotive Sector, Rheinmetall is active in two diverse and unaffiliated markets.

Defence Sector

Overall, the Defence Sector is among the largest compared with the respective segments of European competitors with a similar product range. Major competitors include BAE Systems (UK), General Dynamics (USA), EADS and Krauss-Maffei Wegmann (Germany). Thales (France), Saab (Sweden), Diehl Defence (Germany), Nexter (France), Patria (Finland), RUAG (Switzerland) and Oto Melara (Italy).

The defence industry is largely unaffected by economic cycles as military spending has proven resilient in the recessionary environment in 2009. Customers in the Defence Sector are mainly governments, ministries of defence and related procurement entities in 80 countries worldwide. The Defence Sector is continuously seeking to expand its global reach, in particular, into the Middle East and India. In this context, in recent years, Rheinmetall has established branch offices (e.g., in Greece, India and the United Arab Emirates) and established international joint ventures and strategic alliances (e.g., Rheinmetall Denel Munition in South Africa) acquired equity stakes in complementary business, such as recently, Simrad Optronics in Norway.

In fiscal year 2009, 36% of overall sales in the Defence Sector were generated in Germany (compared with 34% in fiscal year 2008), 30% in Europe (excl. Germany) (compared with 34% in fiscal year 2008) and 16% in the growth regions in the Middle East and Asia (compared with 19% in fiscal year 2008). Much like most of its European competitors, the Defence Sector does not have a strong foothold in the United States of America, the largest defence market in the world; however, following the build-up of its own ammunition production facilities in the United States of America, the Defence Sector generated 10% of its overall sales in fiscal year 2009 in North America.

Automotive Sector

As a Tier-1-supplier for almost all of the renowned original equipment manufacturers ("OEMs"), including the VW group (incl. Audi), Ford, General Motors, Renault/Nissan, Daimler and BMW, the Automotive Sector provides its products directly to the OEMs. This business is characterised by series and large-scale production and depends on the development of the worldwide automobile markets. In addition to the OEM business, the Automotive Sector has and continues to reach out to non-OEM-businesses, such as large-bore-pistons for ships, locomotives and power plants, MiR(marine, industrial, recreational)-pistons, continuous-casting-products for the construction industry as well as the after-market-business for both its own as well as third-party products.

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The Automotive Sector's product range is strategically focused on power train components, such as pistons, plain bearings, pumps and engine blocks, and power train sub-systems, e.g., exhaust gas recirculation cooling modules. Automobile experts consider the power train sector one of the strongest growing fields of technology in the entire area of automobile manufacturing, mostly due to the worldwide increasing carbon dioxide and emission regulations. For example, the requirements relating to the EU 5 and EU 6 norms for diesel engines provide a significant benefit to the Pierburg division with its exhaust gas recirculation valves and cooling modules.

The Automotive Sector follows its customers and is thus active with subsidiaries, plants and joint ventures in all regions where vehicles are being manufactured in considerable scale – Europe, North and South America, Japan, China and India. In previous years, Rheinmetall has accelerated the construction of new production sites primarily in low cost locations, such as the Czech Republic, Mexico and India. Also, the Automotive Sector has been active for years with non-consolidated joint ventures in China and India.

In fiscal year 2009, 33% of overall sales in the Automotive Sector were generated in Germany (compared with 32% in fiscal year 2008), 44% in Europe (excl. Germany) (compared with 44% in fiscal year 2008), 11% in North America (compared with 10% in fiscal year 2008) and 5% in the growth regions in Asia (compared with 5% in fiscal year 2008).

In Europe and worldwide, the Automotive Sector has gained leading market positions and is one of the world's largest suppliers in the markets for pistons, including gasoline pistons, plain bearings for light commercial vehicles (LCV), high-end engine blocks (8/10/12 cylinder), exhaust gas recirculation systems, secondary air systems and solenoid valves. Major competitors of the Automotive Sector include: Bosch (Germany), Conti VDO (Germany), Valeo (France), Tesma (a member of the Canadian Magna Group), Mahle (Germany), Federal Mogul (USA), Honsel (Germany) and Nemak (a member of the Mexican Alfa group).

Organisational structure

Rheinmetall AG is the strategic management and financial holding company of the Rheinmetall-Group and all business operations are conducted by the Defence Sector and the Automotive Sector with their respective main managing companies Rheinmetall Radfahrzeuge GmbH with its 51% subsidiary Rheinmetall MAN Military Vehicles GmbH, Rheinmetall Landsysteme GmbH, Rheinmetall Waffe Munition GmbH, Rheinmetall Air Defence AG and Rheinmetall Defence Electronics GmbH (Defence Sector) and Kolbenschmidt Pierburg AG with its main operating subsidiaries Pierburg GmbH, Pierburg Pump Technology GmbH, KS Kolbenschmidt GmbH, KS Aluminium-Technologie GmbH, KS Gleitlager GmbH, MS Motor Service International GmbH (Automotive Sector).

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The following overview shows the relevant organisational structure of the Rheinmetall-Group:

Rheinmetall AG 100% 100%

Rheinmetall Rheinmetall Rheinmetall Rheinmetall Rheinmetall Kolbenschmidt Radfahrzeuge Landsysteme Waffe Air Defence Defence Pierburg AG GmbH GmbH Munition AG Electronics GmbH GmbH

51% 100% Rheinmetall MAN Military Vehicles GmbH

Pierburg Pierburg Pump KS KS KS MS Motor GmbH Technology Kolbenschmidt Gleitlager Aluminium Service GmbH GmbH GmbH Technologie International GmbH GmbH

Automotive Defence

Trend information

Save as disclosed in this Prospectus, there has been no material adverse change in the prospects of the Issuer since 31 December 2009.

Administrative, management and supervisory bodies

In accordance with the German Stock Corporation Act (Aktiengesetz), the governing bodies of the Issuer are the Vorstand (the "Executive Board"), the Aufsichtsrat (the "Supervisory Board") and the annual shareholders' meeting (Hauptversammlung). The powers of these bodies are set forth in the German Stock Corporation Act and the Issuer's articles of association (Satzung). The Executive Board and the Supervisory Board work independently of each other. No person may serve on both boards at the same time.

The Executive Board is responsible for managing Rheinmetall AG's day-to-day business and represents the Issuer in dealings with third parties. The Supervisory Board appoints and may dismiss members of the Executive Board. The Supervisory Board supervises and advises the Executive Board in its management of the Issuer and represents Rheinmetall AG in transactions between a member of the Executive Board and Issuer. In general, the Supervisory Board is not directly involved in the day-to-day management of the Issuer. However, pursuant to Rheinmetall AG's articles of association and the rules of procedure for the Executive Board, specific transactions require the consent of the Supervisory Board.

In performing their duties, members of both the Executive Board and Supervisory Board must exercise the duties of care expected of a reasonable business person. Members of the Executive Board and the Supervisory Board must consider a broad range of interests, including those of Rheinmetall AG and its shareholders and employees.

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Executive Board

The Supervisory Board appoints the members of the Executive Board for a term of up to five years. Members may be re-elected for additional terms of office. Pursuant to the articles of association of Rheinmetall AG, the Executive Board consists of at least two members. The Supervisory Board determines the number of members of the Executive Board. Currently, the Executive Board has three members.

Any two members of the Executive Board or one member of the Executive Board together with an authorised signatory with statutory power of attorney (Prokurist) are authorised to represent the Issuer in its day-to-day business dealings.

The Executive Board must report regularly to the Supervisory Board, particularly on business policy, strategy, profitability, risk profile, risk management and compliance systems, on the current business of Rheinmetall AG and the Group, as well as on any exceptional matters that may arise from time to time.

As at the date of this Prospectus, the members of the Executive Board of Rheinmetall AG are:

Name Function Positions outside of the Issuer Klaus Eberhardt CEO (responsible for the Chairman of the supervisory boards of (i) MTU Defence Sector) Aero Engines Holding AG and (ii) MTU Aero Engines GmbH and a member on the supervisory boards of (i) Hirschmann Automotive GmbH, (ii) Eckart Wälzholz-Junius Familienstiftung and (iii) Dietrich Wälzholz Familienstiftung Dr. Gerd Kleinert Member (responsible for Chairman of the supervisory board of Läpple AG the Automotive Sector and and member of the supervisory board (Beirat) of chairman of the executive Gebr. Röchling KG board of Kolbenschmidt Pierburg AG) Dr. Herbert Müller CFO (responsible for --- finance and controlling)

The business address of the members of the Executive Board is c/o Rheinmetall AG, Rheinmetall Platz 1, 40476 Düsseldorf, Germany.

Supervisory Board

In accordance with the German Co-Determination Act (Mitbestimmungsgesetz), the Supervisory Board of the Issuer consists of sixteen members, of which eight are representatives of the shareholders and eight represent the employees, thereof six staff members and two labour union representatives. The members representing the shareholders are elected at annual shareholders' meetings for a fixed term of usually five years. Each term expires at the end of the annual general meeting in the fourth financial year after the year in which the relevant Supervisory Board member was elected. The employee representatives are elected by the employees. Supervisory Board members may be re-elected.

Unless otherwise provided by law, resolutions of the Supervisory Board are passed by a simple majority of the votes cast. The Supervisory Board's main functions are:

– to supervise and advise the Executive Board in its management of the Issuer;

– to appoint the members of the Executive Board; and

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– to consent to matters that are subject to the Supervisory Board's consent under German law or the Issuer's articles of association and specific matters which the Supervisory Board has (in the rules of procedure for the Executive Board or otherwise) made subject to its prior approval.

As at the date of this Prospectus, the members of the Supervisory Board of Rheinmetall AG are:

Name (Principal occupation) Function Membership in other supervisory boards and comparable bodies of business enterprises Klaus Greinert Chairman Chairman of the supervisory board (Beirat) of Gebr. Röchling KG and member of the supervisory board of (i) DURAVIT AG, and (ii) DURAVIT S.A. Joachim Stöber (*) Vice-Chairman Member of the supervisory board of GEA Group AG (Union secretary of the IG Metall executive board) Dr. Michael Mielke (*) Member --- (Head of product line Acuators of Pierburg GmbH) Prof. Dr. Andreas Georgi Member Member of the supervisory boards of (i) Asea Brown (Consultant and Professor of Boveri Aktiengesellschaft, (ii) Felix Schoeller Leadership and Control Problems in Holding GmbH & Co. KG, (iii) Oldenburgische Enterprise, Landesbank AG, and (iv) RWE Dea AG. Ludwig-Maximillians-Universität, Munich) Dr. Siegfried Goll Member Member of the supervisory boards of (i) Leuze (Consulting Engineer) Geschäftsführungs-GmbH, (ii) Voss Holding GmbH & Co. KG, and (iii) Witzenmann GmbH Heinrich Kmett (*) Member Member of the supervisory board of Kolbenschmidt (Chairman of the works councils of Pierburg AG Kolbenschmidt Pierburg AG, KS Kolbenschmidt GmbH and MS Motor Service International GmbH) Dr. Rudolf Luz (*) Member Vice chairman of the supervisory board of (First representative of IG Metall, Kolbenschmit Pierburg AG Heilbronn/Neckarsulm) Dr. Peter Mihatsch Member Member of the supervisory board of (i) Vodafone (Consulting Engineer) Holding GmbH, and (ii) Vodafone D2 GmbH Dr. Peter Mitterbauer Member Chairman of the supervisory board of (i) FFG (Chairman of the executive board Österreichische Forschungsförderungsgesellschaft of Miba AG) mbH and (ii) ÖIAG Österreichische Industrieholding AG and member of the supervisory boards of (i) Andritz AG, (ii) Erste Österreichische Spar-Casse Privatstiftung, and (iii) Oberbank AG Detlef Moog Member Chairman of the supervisory boards of (Engineer and Economist) (i) Rheinmetall Landsysteme GmbH, and (ii) Rheinmetall Waffe und Munition GmbH Wolfgang Müller (*) Member Member of the supervisory boards of (i) KS (Chairman of the works council of Aluminium-Technologie GmbH, and (ii) KS ATAG KS Aluminium-Technologie GmbH GmbH) Prof. Dr. Frank Richter Member Member of the advisory board (Beirat) of Gebr. (Professor for strategic Röchling KG and member of the supervisory board management and finance at the of Universitätsklinikum Ulm University of Ulm)

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Reinhard Sitzmann Member Member of the shareholder committee (General manager of Hirschmann (Gesellschafterausschuss) of Opti M&A GmbH and Multimedia Holding B.V.) member of the advisory boards (Beiräte) of (i) Hirschmann Car Communication GmbH, and (ii) Xiamen Hongfa Electroacoustic Co., Ltd. Harald Töpfer (*) Member --- (Chairman of the works council of Rheinmetall Radfahrzeuge GmbH / Rheinmetall MAN Military Vehicles GmbH) Wolfgang Tretbar (*) Member --- (Chairman of the corporate works council of Rheinmetall AG and Chairman of the works council of Pierburg GmbH, Nettetal) Peter Winter (*) Member Member of the supervisory board of Rheinmetall (Member of the works council of Defence Electronics GmbH Rheinmetall Defence Electronics GmbH) ______(*) employee representatives

The business address of each member of the Supervisory Board is c/o Rheinmetall AG, Rheinmetall Platz 1, 40476 Düsseldorf, Germany.

Conflicts of interest

As of the date of this Prospectus, neither any member of the Executive Board nor any member of the Supervisory Board of Rheinmetall AG have reported any potential conflicts of interests between any duties to Rheinmetall AG and their private interests or other duties.

Board practices

Audit Committee

In accordance with the authorisation in the articles of association, the Supervisory Board has, among other things, created an audit committee (the "Audit Committee"). The Audit Committee is tasked with supporting the Supervisory Board in the performance of its supervisory functions. One member of the Audit Committee is an independent financial expert and has particular knowledge and experience in the application of accounting principles and internal control processes from his professional practice. The Audit Committee is jointly represented by two shareholder representatives and two employee representatives. As at the date of this Prospectus, the members of the Audit Committee are: Klaus Greinert (Chairman), Prof. Frank Richter, Joachim Stöber and Heinrich Kmett.

In the current fiscal year, the Audit Committee held three meetings on 17 March 2010, 6 May 2010 and 10 August 2010. In its meetings, the Audit Committee focused on accounting issues, the individual and consolidated financial statements for fiscal year 2009, the proposal on the appropriation of profits and the dividend amount, and discussed the quarterly accounts for fiscal year 2010 with the Executive Board prior to their publication. The Audit Committee additionally prepares the award of the audit assignment to PwC as the statutory auditors elected by the annual general meeting on 11 May 2010, while also verifying the independence of said auditor as required by the German Corporate Governance Code. The members of the Audit Committee also monitor the accounting process and the effectiveness of the internal control system, the risk management system and internal auditing. In addition, the Audit Committee also looked closely at compliance issues and was

- 53 - supplied with the report of the Chief Compliance Officer, who regularly informs the Executive Board and Audit Committee of his activities, and issues immediate notifications in cases of urgency.

Declaration of conformity in accordance with section 161 of the German Stock Corporation Act

In December 2009, the Executive Board and the Supervisory Board issued the following joint declaration of conformity in relation to the recommendations of the German Corporate Governance Code Government Commission pursuant to section 161 of the German Stock Corporation Act:

"Rheinmetall AG's Executive and Supervisory Boards declare 1. THAT, since the issuance of the preceding declaration of conformity in December 2008, Rheinmetall AG has fully carried out the recommendations of the German Corporate Governance Code Government Commission as amended up to June 6, 2008 and June 18, 2009 (officially published in the digital Federal Gazette on August 8, 2008, and August 5, 2009, respectively). 2. THAT Rheinmetall AG will fully carry out the recommendations of the German Corporate Governance Code Government Commission as amended up to June 18, 2009, and officially published on August 5, 2009, in the digital Federal Gazette."

Major shareholders

As at the date of this Prospectus, based on notifications received by the Issuer under the German Securities Trading Act, no shareholder holds more than 5% of the voting rights of the Issuer, save only for two Fidelity Investment funds who notified the Issuer on 2 June 2010 that they hold an aggregate of 6.6% of the voting rights in the Issuer.

The following table shows the shareholders currently known to the Issuer whose voting rights in the Issuer are above the 3% threshold as at the date of this Prospectus:

Shareholder Notification date

DWS Investment GmbH, Frankfurt am 28 June 2010 Main Fidelity Investment funds, Boston 2 June 2010 Allianz Global Investors Kapitalanlagegesellschaft mbH, Frankfurt 1 April 2010 am Main Harris Associates L.P., Chicago 4 December 2009 Rheinmetall AG, Düsseldorf 10 January 2008

Financial information concerning Rheinmetall AG's assets and liabilities, financial position and profit and losses

The published audited consolidated financial statements of the Rheinmetall-Group dated 31 December 2008 and 31 December 2009 in each case including the auditor's report thereon, and the published interim consolidated financial statements for Rheinmetall-Group for the first half year 2010 dated 30 June 2010 are incorporated by reference into this Prospectus as indicated in the Section headed "Incorporation by Reference".

Major legal and arbitration proceedings

The Group is currently subject to three legal proceedings that have been initiated by outside shareholders with a view to reviewing the suitability of the share exchange ratio and the amount of cash compensation offered to them in connection with restructuring measures (squeeze-outs) in accordance with applicable German corporate law. In the proceedings instituted to squeeze out the outside shareholders in Kolbenschmidt Pierburg AG following the

- 54 - acquisition by the Issuer of 95% of the voting rights, the claims brought by outside shareholders were dismissed by the Stuttgart district court in September 2008; however, 55 of the affected outside shareholders lodged appeals against this decision with the Stuttgart higher regional court which are still pending. The length and outcome of the other two legal proceedings opened in 1998 and 2003 in connection with the merger of Kolbenschmidt AG and Pierburg GmbH into Kolbenschmidt Pierburg AG and the squeeze out of outside shareholders in Aditron AG are also still open. However, Rheinmetall takes the view that the claims asserted in all of these court proceedings are not justified.

Moreover, the Issuer is involved in the so-called Khulumani case in the United States of America which deals with, among other things, claims against companies that allegedly supported the former apartheid regime in South Africa. These proceedings against Rheinmetall AG are currently suspended due to ongoing parallel proceedings brought against other companies affected by the Khulumani case. The Issuer regards the legal action as inadmissible and does not regard the US courts as having jurisdiction. The claimants are not US citizens, the event did not take place on US territory and prosecutions have already been carried out in Germany for the legal violations upon which the action is based. However, the Issuer has made appropriate provisions for legal costs.

Significant change in Rheinmetall AG's financial or trading position

There has been no significant change in the financial or trading position of Rheinmetall Group since the date of the last published unaudited interim report (30 June 2010).

Additional information

Share capital

As at the date of this Prospectus, the registered share capital of the Issuer amounts to € 101,373,440, divided into 39,599,000 ordinary no-par value bearer shares and a notional nominal value of € 2.56 per share. After deducting 1,355,997 treasury shares, 38,243,003 ordinary no-par value bearer shares of the Issuer are entitled to vote.

The annual general meeting held on 11 May 2010 has authorised the Executive Board, with the consent of the Supervisory Board, to increase the share capital of Rheinmetall AG by up to € 50,000,000 (the "Authorised Capital") by issuing new no-par value shares against cash contributions and/or contributions in kind on one or more occasions by 10 May 2015. The new shares may be issued to employees of Rheinmetall AG and dependent Group companies (abhängige Konzernunternehmen). Subject to the consent of the Supervisory Board, the Executive Board may, under specific circumstances as more fully discussed in section 4(3) of the Issuer's Articles of Association, exclude existing shareholders' subscription rights.

The annual general meeting held on 11 May 2010 has created a conditional capital in the amount of up to € 20,000,000 (the "Conditional Capital"). The Conditional Capital may only be implemented by issuing up to 7,812,500 ordinary bearer or registered no-par value shares to the extent that (i) the holders of option or conversion rights related to warrant-linked or convertible bonds issued or guaranteed by Rheinmetall AG or its direct or indirect majority-owned subsidiaries (Mehrheitsbeteiligungsgesellschaften) on or before 10 May 2015 make use of their option or conversion rights or (ii) the parties obligated to exercise their option or conversion right under mandatorily exercisable or convertible warrant-linked or convertible bonds issued or guaranteed by Rheinmetall AG or its direct or indirect majority-owned subsidiaries on or before 10 May 2015 satisfy their exercise or conversion obligations and (iii) the Conditional Capital is required according to the terms and conditions of the warrant-linked bonds or convertible bonds.

As at the date of this Prospectus, the Issuer has not utilised the Authorised Capital or the Conditional Capital.

Moreover, the annual general meeting held on 11 May 2010 has authorised the Executive Board until 10 May 2015 based on section 71(1) no. 8 of the German Stock Corporation Act, as amended by the Act Implementing the Shareholders' Rights Directive (ARUG) in July 2009, to acquire treasury shares in an amount of up to 10% of the

- 55 - share capital outstanding at the time the resolution was adopted. More details about this authorisation to acquire treasury shares can be found on the Issuer's website at http://www.rheinmetall.com/investor relations.

Articles of association

In accordance with Article 2 of its articles of association, the purpose of Rheinmetall AG includes the formation of companies, the acquisition and divestment of shareholdings as well as equity and similar interests in enterprises engaging in mechanical engineering, metalworking and in the processing of other materials, industrial electronics and related industries, the management of such enterprises and their grouping under common management when appropriate, as well as the acquisition, sale, development, utilisation and management of realty (land and buildings) whether related to the aforesaid enterprises or not.

Third party information and statement by experts and declaration of any interest

Other than expressly provided in this Prospectus, Rheinmetall AG has not relied on third party information and/or statements by experts. Rheinmetall AG confirms that, where information has been sourced from a third party, this information has been accurately reproduced and that as far as Rheinmetall AG is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

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TERMS AND CONDITIONS OF THE NOTES (Non-binding English language version)

The following is the text of the terms and conditions of the notes (the "Terms and Conditions") applicable to the 2015 Notes and the 2017 Notes. If issued, the final Terms and Conditions of the 2015 Notes will be an integral part of the Global Notes representing the 2015 Notes and, if issued, the final Terms and Conditions of the 2017 Notes will be an integral part of the Global Notes representing the 2017 Notes.

The German version of these Terms and Conditions of the Notes is the only legally binding version. The English translation is for convenience only.

§ 1 Form, Denomination, Temporary Global Note – Exchange, Clearing System, Records of the ICSDs, Further Issues and Noteholders

(a) [In case of the 2015 Notes insert: The issue of Rheinmetall Aktiengesellschaft, Düsseldorf, Federal Republic of Germany (the "Issuer") in the aggregate principal amount of Euro ("EUR") [●] (in words: EUR [●]) is divided into [●] bearer notes in the denomination of EUR 1,000 each (the "Notes").] [In case of the 2017 Notes insert: The issue of Rheinmetall Aktiengesellschaft, Düsseldorf, Federal Republic of Germany (the "Issuer") in the aggregate principal amount of Euro ("EUR") [●] (in words: EUR [●]) is divided into [●] bearer notes in the denomination of EUR 1,000 each (the "Notes").]

(b) The Notes are initially represented by a temporary global note (the "Temporary Global Note") without coupons. The Temporary Global Note will be exchangeable for Notes represented by a permanent global note (the "Permanent Global Note" and, together with the Temporary Global Note, the "Global Notes" and each a "Global Note") without coupons. The Temporary Global Note and the Permanent Global Note shall each be signed by two authorised signatories of the Issuer and shall each be authenticated by or on behalf of the Principal Paying Agent (as defined in § 9(a)). Definitive notes and interest coupons will not be issued.

(c) The Temporary Global Note shall be exchanged for the Permanent Global Note on a date (the "Exchange Date") not later than 180 days after the date of issue of the Temporary Global Note. The Exchange Date shall not be earlier than 40 days after the date of issue of the Temporary Global Note. Such exchange shall only be made upon delivery of certifications to the effect that the beneficial owner or owners of the Notes represented by the Temporary Global Note is not a U.S. person (other than certain financial institutions or certain persons holding Notes through such financial institutions). Payment of interest on Notes represented by a Temporary Global Note will be made only after delivery of such certifications. A separate certification shall be required in respect of each such payment of interest. Any such certification received on or after the 40th day after the date of issue of the Temporary Global Note will be treated as a request to exchange such Temporary Global Note pursuant to this sub-paragraph (c). The Permanent Global Note delivered in exchange for the Temporary Global Note shall be delivered outside of the United States. For purposes of this § 1 and § 4(a) "United States" means the United States of America (including its states and the District of Columbia) and its territories (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and Northern Mariana Islands).

(d) The Temporary Global Note (if it will not be exchanged) and/or the Permanent Global Note will be kept in custody by or on behalf of a Clearing System until all obligations of the Issuer under the Notes have been satisfied. "Clearing System" means each of the following: Clearstream Banking, société anonyme, Luxembourg ("CBL") and Euroclear Bank SA/NV) ("Euroclear") (CBL and Euroclear each an "ICSD" and together, the "ICSDs") or any successor in respect of the functions performed by each of the Clearing Systems. The Notes are issued in new global note ("NGN") form and are kept in custody by a common safekeeper on behalf of both ICSDs.

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(e) The nominal amount of the Notes represented by the Temporary Global Note and the Permanent Global Note shall be the aggregate amount from time to time entered in the records of both ICSDs. The records of the ICSDs (which expression means the records that each ICSD holds for its customers which reflect the amount of such customer's interest in the Notes) shall be conclusive evidence of the nominal amount of the Notes represented by the Temporary Global Note and the Permanent Global Note and, for these purposes, a statement issued by a ICSD stating the nominal amount of the Notes so represented at any time shall be conclusive evidence of the records of the relevant ICSD at that time.

On any redemption or payment of interest being made in respect of, or purchase and cancellation of, any of the Notes represented by the Temporary Global Note and the Permanent Global Note the Issuer shall procure that details of such redemption, payment or purchase and cancellation (as the case may be) in respect of the Temporary Global Note and the Permanent Global Note shall be entered pro rata in the records of the ICSDs and, upon any such entry being made, the nominal amount of the Notes recorded in the records of the ICSDs and represented by the Temporary Global Note and the Permanent Global Note shall be reduced by the aggregate nominal amount of the Notes so redeemed or purchased and cancelled.

On an exchange of a portion only of the Notes represented by the Temporary Global Note, the Issuer shall procure that details of such exchange shall be entered pro rata in the records of the ICSDs.

(f) The Issuer reserves the right to issue from time to time additional notes with identical terms without the consent of the Noteholders (as defined below), so that the same shall be consolidated, form a single issue with and increase the aggregate principal amount of the Notes. The term "Note" shall, in the event of such increase, also comprise such additionally issued notes.

(g) "Noteholder" means any holder of a proportionate co-ownership or other equivalent beneficial interest or right in the Notes.

§ 2 Interest

(a) The Notes bear interest from their issue date on their aggregate principal amount at the Rate of Interest (as defined below) per annum. Interest with respect to the relevant Interest Period shall be payable annually in arrear on 22 September of each year commencing on 22 September 2011 (each an "Interest Payment Date" and the period from the issue date (inclusive) up to the first Interest Payment Date (exclusive) and thereafter as from any Interest Payment Date (inclusive) up to the next following Interest Payment Date (exclusive) being an "Interest Period").

[In case of the 2015 Notes insert: "Rate of Interest" means subject to the following provision [●] per cent.] [In case of the 2017 Notes insert: "Rate of Interest" means subject to the following provision [●] per cent.]

If on the Business Day (as defined in § 4(b)) falling ten Business Days before the relevant Interest Payment Date (each an "Observation Date"):

(a) the Notes carry a solicited credit rating (a "Credit Rating") from more than one Rating Agency (as defined below) whereby at least one of such Credit Ratings constitutes an Investment Grade Credit Rating (as defined below), the Rate of Interest remains unchanged; or

(b) the Notes carry a Credit Rating from only one Rating Agency and such Credit Rating does not constitute an Investment Grade Credit Rating, the Rate of Interest shall be increased by an additional 1.25 (one point two five) percentage points per annum (the "Step-Up Coupon") as of the Interest Period subsequent to such Observation Date; or - 58 -

(c) the Notes carry a Credit Rating from only one Rating Agency and such Credit Rating is cancelled due to circumstances that lie exclusively in the area of responsibility of the Issuer or if the Issuer withdraws such Credit Rating, the Issuer, irrespective of the requirements for the Step-up Coupon being satisfied or not on the next Observation Date, shall be obliged to pay the Step-Up Coupon with regard to the Interest Period immediately following the Observation Date until the Notes again carry an Investment Grade Credit Rating on a following Observation Date; or

(d) the Notes carry a Credit Rating from only one Rating Agency and such Credit Rating will be canceled by such Rating Agency, the Issuer shall be obliged to pay the Step-Up Coupon from the Interest Period subsequent to the immediately following Observation Date if at the time of the cancelation of such Credit Rating the requirements in respect of the Step-Up Coupon were triggered; otherwise the Rate of Interest remains unchanged. For so long as any of the Notes are outstanding, the Issuer shall use all reasonable efforts to procure a new Credit Rating from at least one Rating Agency, provided, that where the Issuer has not so procured a new Credit Rating on the first anniversary of the cessation of the last remaining Credit Rating, the Issuer shall pay the Step-Up Coupon with regard to the immediately following Interest Period.

For the avoidance of doubt, only the Observation Date shall be relevant for the determination whether a Step-Up Coupon is triggered. A downgrading or upgrading between two Observation Dates does not trigger a Step-Up Coupon. If the Issuer is obliged to pay a Step-Up Coupon, it shall give notice to the Noteholders in accordance with § 11(b).

"Rating Agency" means Moody's Investors Services ("Moody's"), Standard & Poor's Rating Services, a division of McGraw-Hill Companies ("S&P") and Fitch Ratings Limited ("Fitch")) or any another recognised rating agency or the relevant successors of such rating agencies.

"Investment Grade Rating " means a Credit Rating which need to be Baa3 or better for Moody's, BBB- or better for S&P and Fitch or any comparable rating by any other recognised rating agency in respect of the Notes.

(b) If interest is required to be calculated for a period of less than a full year, such interest shall be calculated on the basis of the Day Count Fraction. "Day Count Fraction", in respect of the calculation of an amount for any period of time (the "Calculation Period") means:

(aa) where the Calculation Period is equal to or shorter than the Interest Period during which it falls, the actual number of days in the Calculation Period divided by the product of (i) the actual number of days in such Interest Period and (ii) the number of Interest Periods in any year; and

(bb) where the Calculation Period is longer than one Interest Period, the sum of: (i) the actual number of days in such Calculation Period falling in the Interest Period in which it begins divided by the product of (x) the actual number of days in such Interest Period and (y) the number of Interest Periods in any year; and the actual number of days in such Calculation Period falling in the next Interest Period divided by the product of (x) the actual number of days in such Interest Period and (y) the number of Interest Periods in any year.

(c) The Notes shall cease to bear interest from the beginning of the day they are due for redemption or, in case the Issuer fails to make any such redemption payment under the Notes when due, from the beginning of the day on which such payment is made. In such case, the applicable rate of interest shall be determined pursuant to the applicable statutory provisions1.

1 The default rate of interest established by law is, as of the date of this Prospecuts, five percentage points above the basic rate of interest (currently 0.12 per cent.) published by the Deutsche Bundesbank from time to time, Sec. 288 (1), 247 (1) German Civil Code.

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§ 3 Maturity, Early Redemption and Repurchase

(a) [In case of the 2015 Notes insert: The Notes shall be redeemed at their principal amount on 22 September 2015 (the "Maturity Date").] [In case of the 2017 Notes insert: The Notes shall be redeemed at their principal amount on 22 September 2017 (the "Maturity Date").]

(b) The Issuer is not entitled to call the Notes for early redemption, except in the events mentioned in § 3(c).

(c) The Issuer may upon giving not less than 30 nor more than 60 days’ notice to the Noteholders in accordance with § 11 redeem the Notes (in whole but not in part) at their principal amount plus accrued interest, if any, if the Issuer has or will become obliged by a legislative body, a court or any authority to pay Additional Amounts pursuant to § 5 as a result of any change in or amendment to the laws or any rules or regulations thereunder of the Federal Republic of Germany ("Germany") or any political subdivision or any authority of or in Germany, or any change in or amendment to any official interpretation or application of those laws or rules or regulations by a legislative authority, court or other authority, and that obligation cannot be avoided by the Issuer taking such reasonable measures it deems appropriate.

No such notice of redemption may be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay the Additional Amounts pursuant to § 5 for the first time.

The Issuer shall give notice to the Paying Agent (as defined in § 9(a)) about such early redemption before notifying the Noteholders. Such notice shall set forth the underlying facts on which the Issuer’s right to early redemption is based.

(d) The Issuer is entitled to purchase Notes in the market or otherwise.

(e) If the Issuer announces a Change of Control as set out in paragraph (ii) below in this § 3(e), each Noteholder is entitled at its option to require the Issuer to redeem on the Record Date (as defined below) any or all of such Notesholder's Notes at their nominal amount together with interest accrued, if any, to but excluding the Record Date, on giving not less than 15 days’ notice prior to the Record Date to the Paying Agent. Such notice is irrevocable.

The Issuer will as soon as practicable after becoming aware of a Change of Control:

(i) fix the Record Date; and

(ii) announce the Change of Control and the Record Date in accordance with § 11.

"Change of Control" in this § 3(e) shall mean a situation where a person or group of persons acting in concert holds directly or indirectly more than 50 per cent. of the ordinary shares (Stammaktien) or any voting rights (Stimmrechte) of the Issuer.

"persons acting in concert" in this § 3(e) shall be construed as contemplated in § 2(5) of the German Act on the Acquisition of Securities and Takeovers (Wertpapiererwerbs- und Übernahmegesetz).

"Record Date" in this § 3(e) shall mean the Business Day fixed and published by the Issuer pursuant to this § 3(e), which will be not less than 40 nor more than 60 calendar days after the announcement set out in paragraph (ii) above in this § 3(e) is published.

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§ 4 Payments

(a) The Issuer irrevocably undertakes to pay, as and when due, principal and interest on the Notes in EUR. Payment of principal and interest on the Notes shall be made, subject to applicable fiscal and other laws and regulations, to the Paying Agent for on-payment to the Clearing System or to its order for credit to the respective account holders of the relevant Clearing System upon presentation of the Global Note at the specified office of any Paying Agent outside the United States. Payment of interest on the Notes represented by the Temporary Global Note shall be made to the Clearing System, upon due certification as provided in § 1(c). Payments to the Clearing System or to its order shall to the extent of amounts so paid constitute the discharge of the Issuer from its corresponding liabilities under the Notes. Any reference in these Terms and Conditions of the Notes to principal or interest will be deemed to include any Additional Amounts as set forth in § 5.

(b) If the due date for any payment of principal and/or interest is not a Business Day, payment shall be effected only on the next Business Day. The Noteholders shall have no right to claim payment of any interest or other indemnity in respect of such delay in payment.

For purposes of these Terms and Conditions of the Notes a "Business Day" means a day on which (i) the Clearing System settles payments and (ii) the Trans-European Automated Real-time Gross Settlement Express Transfer System 2 (TARGET) or any successor system thereto is operating.

(c) The Issuer may deposit with the Local Court (Amtsgericht) in Frankfurt am Main, Germany, principal or interest not claimed by Noteholders within twelve months after the Maturity Date, even though such Noteholders may not be in default of acceptance of payment. If and to the extent that the deposit is effected and the right of withdrawal is waived, the respective claims of such Noteholders against the Issuer shall cease.

§ 5 Taxation

All payments of principal and interest in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties or governmental charges of whatever nature imposed or levied by way of withholding or deduction at source by or on behalf of Germany, or by or on behalf of any political subdivision or authority therein having power to tax, unless such withholding or deduction is required by law. In such event, the Issuer shall pay such additional amounts (the "Additional Amounts") as shall result in receipt by the Noteholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no Additional Amounts shall be payable with respect to any Note:

(a) as far as German Kapitalertragsteuer (including, Abgeltungsteuer), including church tax (Kirchensteuer) (if any) and the German Solidarity Surcharge (Solidaritätszuschlag) or any other tax which may substitute the German Kapitalertragsteuer is concerned;

(b) to, or to a third party on behalf of, a Noteholder where such Noteholder is liable to such withholding or deduction by reason of having, or having had, some connection with Germany other than by reason only of the holding of such Note or the receipt of the relevant payment in respect thereof;

(c) to, or to a third party on behalf of, a Noteholder where no such withholding or deduction would have been required to be withheld or deducted if the Note were credited at the time of payment to a securities deposit account with a bank outside Germany;

(d) where such withholding or deduction is imposed pursuant to European Council Directive 2003/48/EC (or any amendment thereof), any international bilateral agreement, any other directive or any law - 61 -

implementing or complying with, or introduced in order to conform to such directive or any arrangements entered into between a EU member state and certain other countries and territories in connection with such directive or international bilateral agreement;

(e) to the extent such withholding or deduction is required by or on behalf of a Noteholder who could lawfully avoid (but has not so avoided) such withholding or deduction by complying or procuring that any third party complies with any statutory requirements or by making or procuring that a third party makes a declaration of non-residence or other similar claim for exemption to any tax authority in the place where the payment is effected; or

(f) to the extent such withholding or deduction is required more than 30 days after the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made.

§ 6 Period for Presentation

The period for presentation of Notes due, as established in § 801 paragraph 1 sentence 1 of the German Civil Code (Bürgerliches Gesetzbuch), is reduced to ten years.

§ 7 Status and Negative Pledge

(a) The obligations under the Notes constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other unsecured and unsubordinated obligations of the Issuer, unless such obligations are accorded priority under mandatory provisions of statutory law.

(b) The Issuer undertakes until such time as principal and interest and Additional Amounts pursuant to § 5, if any, have been completely placed at the disposal of the Paying Agent, not to secure or have secured and, to the extend permitted by law, not to permit any Material Subsidiary to secure or have secured by any Security upon the whole or any part of its own, present and future assets, any present or future Capital Market Indebtedness and Borrowing Obligations and any guarantee or indemnity given in respect thereof other than any Permitted Security, unless these Notes at the same time share pari passu and pro rata in such Security which Security shall be approved by an independent accounting firm of international standing as being equivalent security for the benefit of the Noteholders.

(c) "Security" in this § 7 means any mortgage, charge, pledge, lien or other encumbrance (other than an encumbrance arising solely by operation of law) as well as assignment and/or transfer of title for security purposes and global assignment.

"Capital Market Indebtedness" in this § 7 shall mean any indebtedness, present or future, of the Issuer in the form of Notes, bonds, debentures or similar instruments with an original maturity of more than one year, which can ordinarily be traded on any stock exchange or other securities market, or guarantee or indemnity of the Issuer for such indebtedness or respective guarantee or indemnity of any third party for such indebtedness.

"Borrowing Obligations" in this § 7 shall mean any obligation resulting from any borrowing(s) (including, but not limited to Schuldschein-loans, bank credits or other credits), and shall also include any nondomestic private placements, to the extent that such private placements are not already covered by the definition of "Capital Market Indebtedness".

"Material Subsidiary" in these Terms and Conditions of the Notes shall mean any corporation or partnership incorporated or established, as applicable, in a member country of the Organisation for Economic Co-operation and Development (OECD) and in which the Issuer directly or indirectly holds more - 62 -

than 50 per cent. of the share capital and more than 50 per cent. of the voting rights, and whose balance sheet total, as shown in its most recent audited consolidated annual accounts exceeds 2 per cent. of the consolidated balance sheet total.

"Permitted Security" in this § 7 shall mean:

(i) Security which is in existence at the issue date of the Notes;

(ii) (x) Security that is created after the issue date of the Notes; and/or

(y) Security existing over the assets or shares of newly acquired direct or indirect Material Subsidiaries of the Issuer acquired after the issue date of the Notes;

whereby the total sum of such Security must not exceed 5 per cent. of the balance sheet total of the latest audited financial statements of the Rheinmetall Group (Konzern) available at the relevant date (forthwith the "Threshold"); if and to the extent the Threshold is exceeded in the context of a Permitted Security pursuant to (y) above, the Issuer is obliged to effect the release of the relevant Security within twelve months of the creation of such Security or acquisition of such direct or indirect Material Subsidiaries, respectively, to such extent as is necessary to meet, or even fall short of, the Threshold. For the avoidance of doubt: any depositing of Security pursuant to (x) must not exceed the Threshold at any time;

(iii) Security arising in the ordinary course of business, whereby, for the avoidance of doubt, - subject to the following reference to the general terms of conditions (Allgemeine Geschäftsbedingungen) of financial institutions - any depositing of Security in connection with pure financing activities shall not be comprised by the term ordinary course of business used in this § 7 (c) (iii); as well as Security in the form of a retention of title arrangement entered into by such member of the Rheinmetall Group (Konzern) in its ordinary course of business; as well as any origination of Security by act of law in the ordinary course of business or by the general terms of conditions (Allgemeine Geschäftsbedingungen) of financial institutions.

(iv) any Security over assets that in accordance with IFRS (International Financial Reporting Standards) have to be capitalised in the Issuer’s consolidated balance sheet, but which have to be attributed to the Issuer and/or a Material Subsidiary exclusively due to an economic assessment, but not pursuant to statutory provisions concerning title and rights in rem (dingliche Rechte) of the Issuer and/ or any Material Subsidiary.

§ 8 Events of Default

(a) Upon the occurrence of an event of default, each Noteholder is entitled to declare due by notice his entire claims arising from the Notes and to demand payment at par plus accrued interest. Subject to § 8(b), an event of default shall have occurred, if

(i) the Issuer, for any reason whatsoever, fails to pay within seven days after the relevant due date principal or interest on this issue, including Additional Amounts which may have to be paid according to § 5, or

(ii) the Issuer fails to duly perform any other obligation under these Terms and Conditions of the Notes, for any reason whatsoever, and such failure continues for more than 30 days after receipt of a written notice to this effect from the Paying Agent, or

(iii) the Issuer or any Material Subsidiary, within 30 days after the due date fails to fulfil an obligation to pay principal or interest in respect of, or is called upon to repay prematurely due to default, any other

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obligations arising from borrowed money having an aggregate principal amount of at least EUR 40,000,000 or its equivalent in other currencies or if securities granted therefore are enforced on behalf of or by the creditors entitled thereto and the failure, default or enforcement is not caused by the fact that the Issuer or any such Material Subsidiary is prevented, directly or indirectly, by any government or other authority from fulfilling the relevant obligations, or

(iv) the Issuer or any Material Subsidiary announces its inability to meet its financial obligations, or

(v) insolvency proceeding is commenced by court against the Issuer or any of its Material Subsidiaries which has not been dismissed or stayed within 60 days after the commencement thereof in case of any insolvency proceeding under the laws of any OECD Member State; or (as the case may be), or the Issuer institutes such a proceeding or suspends payments, or

(vi) the Issuer or any Material Subsidiary ceases its business operations to such an extent that as a result thereof (x) the value of its assets is diminished considerably and (y) it becomes likely that the Issuer will not be able to fulfil its payment obligations vis-à-vis the Noteholders under the Notes, or

(vii) the Issuer enters into liquidation, unless such liquidation is to take place in connection with a merger, consolidation or any other form of combination with another company and such other or new company (x) assumes all obligations arising from these Terms and Conditions of the Notes and (y) obtains a rating which is at least equivalent to the Issuer’s rating immediately prior to such merger, consolidation or other form of combination, or

(viii) the Issuer or any Material Subsidiary disposes either in a single transaction or a series of transactions (whether related or not) all or any part of its respective assets (Vermögenswerte), except for any assets which are specified as "assets held for sale" in the consolidated annual accounts 2009 of the Issuer, to any person other than any member of the Rheinmetall Group (Konzern). The first sentence of this § 8 (a)(viii) does not apply to any disposal:

(a) if the book value of the asset disposed does not exceed EUR 1,000,000, no matter whether the disposal was made in the ordinary course of business or not in the ordinary course of business of the disposing entity. For the avoidance of doubt: if more than one asset is disposed in one related transaction (e.g. on the basis of one purchase agreement), the threshold amount of EUR 1,000,000 does not relate to the book value of each single asset disposed but relates to the accumulated book value of all assets disposed in this related transaction;

(b) if the disposal is made in the ordinary course of business of the disposing entity;

(c) if not pursuant to § 8 (a) (viii) (b) in the ordinary course of business of the disposing entity if being on arm's length terms and if at least 80 per cent. of the Net Proceeds remain in the Rheinmetall Group (Konzern) for corporate purposes and not more than 20 per cent. of the Net Proceeds are distributed to the shareholder(s) of the Issuer; and

(d) if not in the ordinary course of business of the disposing entity pursuant to § 8 (a) (viii) (b) and if not already permitted under sub-clause (a) to (c) up to, and including, a threshold amount (Freibetrag) equal to the higher of (i) 3 (three) per cent. of the Issuer's consolidated total assets amount of balance sheet (Konzernbilanzsumme) as of the balance sheet date (Bilanzstichtag) of the most recent published audited consolidated annual accounts of the Rheinmetall Group (Konzern); and (ii) EUR 100,000,000 (the "Basket Amount"), where the assets disposed are charged to the Basket Amount at their respective book value, provided that any such disposal is on arm's length terms.

For purposes of this sub-clause (d), the book value of any asset disposed shall be credited to the Basket Amount in the chronological order of the relevant asset disposal taking effect, i.e. closing - 64 -

occurs.

"Net Proceeds" means the proceeds of any asset disposal after deducting:

(aa) reasonable fees, costs and expenses incurred by any member of the Rheinmetall Group (Konzern) with respect to that disposal, payable or paid to persons who are not members of the Rheinmetall Group (Konzern);

(bb) any tax incurred and required to be paid by the seller in connection with that disposal (as reasonably determined by the seller at the point of time of such disposal); and

(cc) amounts reasonably retained to cover possible liabilities in connection with a relevant disposal (as reasonably determined by the seller at the point of time of such disposal).

(b) In the cases of § 8(a)(ii) and (iii) an event of default shall only have occurred, if the Paying Agent has received notices from Noteholders in accordance with § 8(c), representing a nominal amount equal to at least 5 per cent. of the aggregate principal amount of all Notes outstanding (including any increases, if any).

(c) Such notice for repayment according to this § 8 has to be given in writing by the Noteholders to the Paying Agent. The notice should contain a proof-of-ownership, e.g. an up-to-date certificate of deposited securities. In the cases of § 8(a)(i), (iv)-(viii), claims fall due on the fifth Business Day after receipt of such notice. In the cases of § 8(a)(ii) and (iii), claims fall due on the fifth Business Day after receipt by the Paying Agent of such notice that results in the threshold amount defined in § 8(b) being reached or exceeded, as the case may be, unless, in the case of § 8(a)(ii), the obligation has been fulfilled or, in the case of § 8(a)(iii), the payment obligation has been fulfilled or the performance thereof has been waived or postponed, respectively, prior to the claims falling due.

(d) A call by Noteholders shall be announced in accordance with § 11 by the Issuer.

§ 9 Agents

(a) The Issuer has appointed

Deutsche Bank Aktiengesellschaft Grosse Gallusstraße 10-14 60272 Frankfurt am Main Germany,

as principal paying agent (the "Principal Paying Agent"); and

Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer 1115 Luxembourg The Grand Duchy of Luxembourg,

as paying agent (the "Paying Agent").

(b) The Principal Paying Agent and the Paying Agent act solely as agents of the Issuer and do not assume any obligations towards or relationship of contract, agency or trust for or with any of the Noteholders. The agents are exempt from the restrictions of § 181 of the German Civil Code (Bürgerliches Gesetzbuch).

(c) The Issuer reserves the right at any time to vary or terminate the appointment of any agent and to appoint financial institutions of recognised standing as successor or additional Principal Paying Agent or Paying - 65 -

Agent. Notice of any change in the agents or in the specified office of any agent will promptly be given to the Noteholders pursuant to § 11.

As long as the Notes are listed on the Luxembourg Stock Exchange, the Issuer will appoint, and will maintain, a Paying Agent with a specified office in such city as may be required by the rules of the Luxembourg Stock Exchange.

§10 Substitution of the Issuer

(a) The Issuer shall be entitled to substitute at any time without the consent of the Noteholders for the Issuer any other company of which at least 50 per cent. of the shares are directly or indirectly owned by the Issuer (the "New Issuer") in respect of all obligations arising from or in connection with the Notes, if

(i) the New Issuer assumes all obligations of the Issuer arising from or in connection with the Notes,

(ii) the New Issuer has obtained any necessary authorisation from the competent authorities to the effect that the New Issuer may transfer to the Paying Agent, in EUR and without the withholding at source or deduction at source of any taxes, fees or duties, all amounts required for the performance of the payment obligations arising from or in connection with the Notes,

(iii) the New Issuer has agreed to indemnify and hold harmless each Noteholder against any tax or duty imposed on such Noteholder in respect of such substitution;

(iv) the Issuer irrevocably and unconditionally guarantees in favour of each Noteholder such obligations of the New Issuer,

(v) the New Issuer, if a foreign company, has appointed an authorised agent domiciled in Germany for accepting services of process (Zustellungsbevollmächtigter) for any legal disputes before German courts;

(vi) the Issuer (Rheinmetall Aktiengesellschaft as guarantor) and the New Issuer accept the obligations pursuant to these Terms and Conditions of the Notes, and

(vii) in case the Issuer does not own directly or indirectly 100 per cent. of the shares of the New Issuer, the New Issuer delivers as a condition precedent for the substitution of the Issuer, a legal opinion of an internationally reputable law firm confirming the legal validity and enforceability of the substitution of the Issuer and the guarantee to the Paying Agent.

(b) In the event of such substitution, any reference in these Terms and Conditions of the Notes to the Issuer shall from then on be deemed to refer to the New Issuer; any reference to Germany, other than in § 12(a), shall from then on be deemed to refer to the country where the New Issuer is domiciled or, if different, is treated as resident for tax purposes.

(c) Any substitution effected in accordance with § 10(a) shall be binding on the Noteholders and shall be announced in accordance with § 11.

§ 11 Announcements

(a) All notices concerning the Notes will be made by means of electronic publication on the internet website of the Luxembourg Stock Exchange (www.bourse.lu) in accordance with all applicable laws. Any notice so given will be deemed to have been validly given on the third day following the date of such publication.

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(b) So long as any Notes are traded on the regulated market of the Luxembourg Stock Exchange, § 11(a) shall apply. In the case of notices regarding the Rate of Interest and subject to all applicable laws, the Issuer may deliver the relevant notice to the Clearing System for communication by the Clearing System to the Noteholders, in lieu of publication set forth in § 11(a); any such notice shall be deemed to have been given to the Noteholders on the fifth day after the day on which the said notice was given to the Clearing System.

§ 12 Applicable Law, Place of Performance, Jurisdiction, Amendment of the Terms and Conditions of the Notes and Noteholders' Representative)

(a) The form and content of the Notes as well as all the rights and duties arising therefrom shall be governed exclusively by the laws of Germany. Place of performance is Frankfurt am Main.

(b) Non-exclusive court or venue for all litigation with the Issuer arising from legal relations established in these Terms and Conditions of the Notes is Frankfurt am Main.

(c) The Terms and Conditions of the Notes may be amended by the Issuer with the consent of the Noteholders upon a majority vote pursuant to §§ 5 of the Act on Debt Securities of 2009 (Schuldverschreibungsgesetz aus Gesamtemissionen - "SchVG"), as amended from time to time. The Noteholders may agree on amendments with material effect on the Terms and Conditions of the Notes with the majority specified in subparagraph (c)(i) including any measures in accordance with §5 paragraph 3 SchVG. Resolutions by majority shall be binding on all Noteholders. Resolutions which do not provide for identical conditions for all are void, unless the Noteholders who are disadvantaged have expressly agreed upon their disadvantageous treatment.

(i) Subject to the following and the quorum required pursuant to § 18 paragraph 4 SchVG in conjunction with § 15 paragraph 3 SchVG, the resolutions by the Noteholders shall be passed by an ordinary resolution (einfache Mehrheit). Resolutions in respect of amendments with material effect on the Terms and Conditions of the Notes, in particular the matters listed in § 5 paragraph 3, item 1 to 9 SchVG, shall be passed by a majority of not less than 75 per cent. of the participating votes (qualifizierte Mehrheit).

(ii) Resolutions by the Noteholders will be conducted exclusively by vote taken without a meeting (Abstimmung ohne Versammlung) (§18 SchVG). A meeting of Noteholders and the absorption of costs by the Issuer for such a meeting will only take place in the circumstances stipulated by § 18 paragraph 4, sentence 2 SchVG.

(iii) Resolutions of the Noteholders conducted by vote taken without a meeting (Abstimmung ohne Versammlung) shall be passed in accordance with § 18 SchVG. Noteholders, whose Notes comprise 5 per cent. of the relevant outstanding aggregate principal amount of the Notes may request a vote taken without a meeting (Abstimmung ohne Versammlung) pursuant to § 9 in conjunction with § 18 SchVG. Further particulars in respect of the resolution and the election shall be stipulated by the request for casting vote (Aufforderung zur Stimmenabgabe) by the person supervising the vote (Abstimmungsleiter). Together with the request for casting vote (Aufforderung zur Stimmenabgabe) the subject matter of the vote (Beschlussgegenstand) and the proposals of the resolution will be announced to the Noteholders.

(iv) The vote will be chaired by a notary appointed by the Issuer or, if the Noteholders' Representative (as defined below) has convened the vote, by the Noteholders' Representative.

(v) Each Noteholder participating in any vote shall cast votes in accordance with the principal amount or the notional share of its entitlement to the outstanding Notes.

(vi) The notice of noteholder vote (the "Notice of Noteholder Vote") shall provide what proof is required - 67 -

to be entitled to vote in the noteholder vote. Unless otherwise provided for in the Notice of Noteholder Vote, a voting certificate provided by an agent appointed by the Issuer shall entitle its bearer to vote in the noteholder vote. The voting certificate shall be dated and shall specify the noteholder vote concerned and the principal amount of Notes held by such Noteholder. The Notice of Noteholder Vote may also require a proof of identity of a person exercising a voting right.

(d) "Noteholders' Representative" shall be Deutsche Bank Aktiengesellschaft, Grosse Gallusstrasse 10-14, 60272 Frankfurt am Main, Germany. The liability of the Noteholders' Representative shall be limited to ten times the amount of its annual remuneration, unless the Noteholders' Representative has acted willfully or with gross negligence. The Noteholders' Representative shall have the duties and powers provided by law or granted by majority resolution of the Noteholders. The Noteholders' Representative shall comply with the instructions of the Noteholders. To the extent that the Noteholders' Representative has been authorised to assert certain rights of the Noteholders, the Noteholders shall not be entitled to assert such rights themselves, unless explicitly provided for in the relevant majority resolution. The Noteholders' Representative shall provide reports to the Noteholders on its activities. The regulations of the SchVG apply with regard to the recall and the other rights and obligations of the Noteholders' Representative. The Noteholder's Representative may demand from the Issuer to furnish all information required for the performance of the duties entrusted to it.

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ANLEIHEBEDINGUNGEN (Terms and Conditions of the Notes (binding German language version))

Nachfolgend ist der Text der Anleihebedingungen (die "Anleihebedingungen") der 2015 Schuldverschreibungen und der 2017 Schuldverschreibungen abgedruckt. Soweit begeben, werden die endgültigen Anleihebedingungen für die 2015 Schuldverschreibungen Bestandteil der Globalurkunden, die die 2015 Schuldverschreibungen verbriefen, und, soweit begeben, werden die endgültigen Anleihebedingungen für die 2017 Schuldverschreibungen Bestandteil der Globalurkunden, die die 2017 Schuldverschreibungen verbriefen.

Die deutschsprachige Fassung dieser Anleihebedingungen ist bindend. Die englischsprachige Fassung dient nur zu Lesezwecken.

§ 1 Form, Nennbetrag, Vorläufige Globalurkunde – Austausch. Clearing System. Register der ICSDs, Begebung weiterer Schuldverschreibungen und Anleihegläubiger

(a) [Im Fall der 2015 Schuldverschreibungen einfügen: Die Begebung der Schuldverschreibungen der Rheinmetall Aktiengesellschaft, Düsseldorf, Bundesrepublik Deutschland (die "Emittentin") im Gesamtnennbetrag von Euro ("EUR") [●] (in Worten: EUR [●]) ist eingeteilt in [●] auf den Inhaber lautende Schuldverschreibungen im Nennbetrag von je EUR 1.000 (die "Schuldverschreibungen").] [Im Fall der 2017 Schuldverschreibungen einfügen: Die Begebung der Schuldverschreibungen der Rheinmetall Aktiengesellschaft, Düsseldorf, Bundesrepublik Deutschland (die "Emittentin") im Gesamtnennbetrag von Euro ("EUR") [●] (in Worten: EUR [●]) ist eingeteilt in [●] auf den Inhaber lautende Schuldverschreibungen im Nennbetrag von je EUR 1.000 (die "Schuldverschreibungen").]

(b) Die Schuldverschreibungen sind anfänglich durch eine vorläufige Globalurkunde (die "Vorläufige Globalurkunde") ohne Zinsscheine verbrieft. Die Vorläufige Globalurkunde wird gegen Schuldverschreibungen, die durch eine Dauerglobalurkunde (die "Dauerglobalurkunde" und zusammen mit der Vorläufigen Globalurkunde die "Globalurkunden" und jeweils eine "Globalurkunde") ohne Zinsscheine verbrieft sind, ausgetauscht. Die Vorläufige Globalurkunde und die Dauerglobalurkunde tragen jeweils die Unterschriften zweier ordnungsgemäß bevollmächtigter Vertreter der Emittentin und sind jeweils von der Hauptzahlstelle (wie in § 9(a) definiert) oder in deren Namen mit einer Kontrollunterschrift versehen. Einzelurkunden und Zinsscheine werden nicht ausgegeben.

(c) Die Vorläufige Globalurkunde wird an einem Tag (der "Austauschtag") gegen die Dauerglobalurkunde ausgetauscht, der nicht mehr als 180 Tage nach dem Tag der Ausgabe der Vorläufigen Globalurkunde liegt. Der Austauschtag für einen solchen Austausch darf nicht weniger als 40 Tage nach dem Tag der Ausgabe der Vorläufigen Globalurkunde liegen. Ein solcher Austausch darf nur nach Vorlage von Bescheinigungen erfolgen, wonach der oder die wirtschaftlichen Eigentümer der durch die Vorläufige Globalurkunde verbrieften Schuldverschreibungen keine U.S.-Personen sind (ausgenommen bestimmte Finanzinstitute oder bestimmte Personen, die Schuldverschreibungen über solche Finanzinstitute halten). Zinszahlungen auf durch eine Vorläufige Globalurkunde verbriefte Schuldverschreibungen erfolgen erst nach Vorlage solcher Bescheinigungen. Eine gesonderte Bescheinigung ist hinsichtlich einer jeden solchen Zinszahlung erforderlich. Jede Bescheinigung, die am oder nach dem 40. Tag nach dem Tag der Ausgabe der Vorläufigen Globalurkunde eingeht, wird als ein Ersuchen behandelt werden, diese Vorläufige Globalurkunde gemäß dieses Unterabsatzes (c) auszutauschen. Die Dauerglobalurkunde, die im Austausch für die Vorläufige Globalurkunde geliefert wird, ist außerhalb der Vereinigten Staaten zu liefern. Für die Zwecke dieses § 1 und des § 4(a) bezeichnet "Vereinigte Staaten" die Vereinigten Staaten von Amerika (einschließlich deren Bundesstaaten und des District of Columbia) sowie deren Territorien (einschließlich Puerto Rico, den

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U.S. Virgin Islands, Guam, Amerikanisch Samoa, den Wake Island und den Northern Mariana Islands).

(d) Die Vorläufige Globalurkunde (falls diese nicht ausgetauscht wird) und/oder die Dauerglobalurkunde wird/werden solange von einem oder im Namen eines Clearing Systems verwahrt, bis sämtliche Verbindlichkeiten der Emittentin aus den Schuldverschreibungen erfüllt sind. "Clearing System" bedeutet jeweils Folgendes: Clearstream Banking, société anonyme, Luxemburg ("CBL") und Euroclear Bank SA/NV ("Euroclear") (CBL und Euroclear jeweils ein "ICSD" und zusammen die "ICSDs") oder etwaige Rechtsnachfolger in Bezug auf die von dem jeweiligen Clearing System ausgeübten Funktionen. Die Schuldverschreibungen werden in Form einer new global note ("NGN") ausgegeben und von einem common safekeeper im Namen beider ICSDs verwahrt.

(e) Der Nennbetrag der durch die Vorläufige Globalurkunde und die Dauerglobalurkunde verbrieften Schuldverschreibungen entspricht dem jeweils in den Registern beider ICSDs eingetragenen Gesamtbetrag. Die Register der ICSDs (unter denen man die Register versteht, die jeder ICSD für seine Kunden über den Betrag ihres Anteils an den Schuldverschreibungen führt) sind schlüssiger Nachweis über den Nennbetrag der durch die Vorläufige Globalurkunde und die Dauerglobalurkunde verbrieften Schuldverschreibungen, und eine zu diesen Zwecken von einem ICSD ausgestellte Bestätigung mit dem Nennbetrag der so verbrieften Schuldverschreibungen ist schlüssiger Nachweis über den Inhalt des Registers des jeweiligen ICSD zu diesem Zeitpunkt.

Bei einer Rückzahlung oder Zinszahlung bezüglich der durch die Vorläufige Globalurkunde und die Dauerglobalurkunde verbrieften Schuldverschreibungen bzw. bei Ankauf und Entwertung der durch die Vorläufige Globalurkunde und die Dauerglobalurkunde verbrieften Schuldverschreibungen stellt die Emittentin sicher, dass die Einzelheiten über Rückzahlung und Zahlung bzw. Ankauf und Entwertung bezüglich der Vorläufigen Globalurkunde und der Dauerglobalurkunde anteilig in den Unterlagen der ICSDs vermerkt werden, und, dass nach dieser Eintragung der in den Unterlagen der ICSDs eingetragene und durch die Vorläufige Globalurkunde und die Dauerglobalurkunde verbriefte Nennbetrag der Schuldverschreibungen um den Gesamtnennbetrag der so zurückgezahlten bzw. angekauften und entwerteten Schuldverschreibungen gemindert wird.

Sofern lediglich ein Teil der durch die Vorläufige Globalurkunde verbrieften Schuldverschreibungen ausgetauscht wird, wird die Emittentin sicherstellen, dass die Einzelheiten dieses Austauschs anteilig in die Aufzeichnungen der ICSDs aufgenommen werden.

(f) Die Emittentin behält sich vor, von Zeit zu Zeit ohne Zustimmung der Anleihegläubiger (wie nachfolgend definiert) weitere Schuldverschreibungen mit gleicher Ausstattung in der Weise zu begeben, dass sie mit den Schuldverschreibungen zusammengefasst werden, eine einheitliche Anleihe mit ihnen bilden und ihren Gesamtnennbetrag erhöhen. Der Begriff "Schuldverschreibungen" umfasst im Falle einer solchen Erhöhung auch solche zusätzlich begebenen Schuldverschreibungen.

(g) "Anleihegläubiger" bezeichnet jeden Inhaber eines Miteigentumsanteils oder vergleichbaren anderen Rechts an den Schuldverschreibungen.

§ 2 Verzinsung

(a) Die Schuldverschreibungen werden ab dem Begebungstag bezogen auf den Gesamtnennbetrag mit dem jährlichen Zinssatz (wie nachfolgend definiert) verzinst. Zinsen für die jeweilige Zinsperiode sind nachträglich am 22. September eines jeden Jahres fällig, erstmals am 22. September 2011 (jeweils ein "Zinszahlungstag" und der Zeitraum ab dem Begebungstag (einschließlich) bis zum ersten Zinszahlungstag (ausschließlich) und danach von jedem Zinszahlungstag (einschließlich) bis zum nächstfolgenden Zinszahlungstag (ausschließlich) jeweils eine "Zinsperiode").

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[Im Fall der 2015 Schuldverschreibungen einfügen: "Zinssatz" bedeutet vorbehaltlich der nachfolgenden Bestimmungen [●] % p.a.] [Im Fall der 2017 Schuldverschreibungen einfügen: "Zinssatz" bedeutet vorbehaltlich der nachfolgenden Bestimmungen [●] % p.a.]

Sofern an dem Geschäftstag (wie in § 4(b) definiert), der zehn Geschäftstage vor dem entsprechenden Zinszahlungstag liegt (jeweils ein "Beobachtungstag"):

(a) die Schuldverschreibungen von mehr als einer Ratingagentur (wie nachstehend definiert) ein angefordertes Kreditrating (ein "Kreditrating") erhalten haben, und mindestens eines dieser Kreditratings ein Investmentgradekreditrating (wie nachstehend definiert) ist, bleibt der Zinssatz unverändert; oder

(b) die Schuldverschreibungen nur von einer Ratingagentur ein Kreditrating erhalten haben, und dieses Kreditrating kein Investmentgradekreditrating ist, erhöht sich der Zinssatz ab der auf den Beobachtungstag folgenden Zinsperiode um zusätzliche 1,25 %-Punkte jährlich (der "Step-Up Kupon"); oder

(c) die Schuldverschreibungen nur von einer Ratingagentur ein Kreditrating erhalten haben, und dieses Kreditrating ausschließlich aufgrund von Umständen, die im Verantwortungsbereich der Emittentin liegen, eingestellt wird oder von der Emittentin zurückgenommen wird, ist die Emittentin unabhängig davon, ob am nächsten Beobachtungstag die Voraussetzungen für einen Step-Up Kupon vorliegen oder nicht, verpflichtet, den Step-Up Kupon von der auf den nächsten Beobachtungstag folgenden Zinsperiode an zu zahlen, bis an einem folgenden Beobachtungstag mindestens eine Ratingagentur den Schuldverschreibungen wieder ein Investmentgradekreditrating erteilt; oder

(d) die Schuldverschreibungen nur von einer Ratingagentur ein Kreditrating erhalten haben, und die Ratingagentur dieses Kreditrating einstellt, ist die Emittentin nur verpflichtet, ab der auf den Beobachtungstag folgenden Zinsperiode den Step-Up Kupon zu zahlen, wenn die Voraussetzungen für einen Step-Up Kupon zum Zeitpunkt der Einstellung des Kreditratings vorgelegen haben; andernfalls bleibt der Zinssatz unverändert. Solange Schuldverschreibungen ausstehend sind, wird sich die Emittentin in diesem Fall unter Anwendung aller verhältnismäßigen Mittel bemühen, dass mindestens ein Kreditrating für die Schuldverschreibungen wieder erteilt wird; sofern die Schuldverschreibungen am Jahrestag nach Einstellung des ursprünglichen Kreditratings kein alternatives Kreditrating erhalten haben, ist die Emittentin verpflichtet, ab der nächstfolgenden Zinsperiode den Step-Up Kupon zu zahlen.

Zur Klarstellung: für die Feststellung, ob die Voraussetzungen für einen Step-Up Kupon vorliegen, ist ausschließlich der jeweilige Beobachtungstag maßgeblich. Eine Herab- oder Heraufstufung des Kreditratings im Zeitraum zwischen zwei Beobachtungstagen erfüllt die Voraussetzungen eines Step-Up Kupons nicht. Ist die Emittentin verpflichtet, einen Step-Up Kupon zu zahlen, wird sie die Anleihegläubiger gemäß § 11(b) informieren.

"Ratingagentur" bezeichnet jeweils Moody's Investor Services, Inc. ("Moody's"), Standard & Poor's Rating Services, a division of the McGraw-Hill Companies ("S&P"), und Fitch Ratings Limited ("Fitch") oder eine andere anerkannte Ratingagentur oder die jeweilige Nachfolgerin dieser Ratingagenturen.

"Investmentgradekreditrating" bezeichnet ein Kreditrating, welches im Hinblick auf die Schuldverschreibungen Baa3 oder besser für Moody's, BBB- oder besser für S&P und Fitch bzw. ein vergleichbares Rating von einer anderen anerkannten Ratingagentur sein muss.

(b) Sofern Zinsen für einen Zeitraum von weniger als einem Jahr zu berechnen sind, erfolgt die Berechnung auf der Grundlage des Zinstagequotienten.

"Zinstagequotient" bezeichnet im Hinblick auf die Berechnung eines Betrages für einen beliebigen - 71 -

Zeitraum (der "Zinsberechnungszeitraum"):

(aa) Falls der Zinsberechnungszeitraum gleich oder kürzer als die Zinsperiode ist, innerhalb welche er fällt, die tatsächliche Anzahl von Tagen im Zinsberechnungszeitraum, dividiert durch das Produkt aus (i) der tatsächlichen Anzahl von Tagen in der jeweiligen Zinsperiode und (ii) der Anzahl der Zinsperioden in einem Jahr.

(bb) Falls der Zinsberechnungszeitraum länger als eine Zinsperiode ist, die Summe: (i) der tatsächlichen Anzahl von Tagen in demjenigen Zinsberechnungszeitraum, der in die Zinsperiode fällt, in der er beginnt, geteilt durch das Produkt aus (x) der tatsächlichen Anzahl von Tagen in dieser Zinsperiode und (y) der Anzahl von Zinsperioden in einem Jahr, und (ii) der tatsächlichen Anzahl von Tagen in demjenigen Zinsberechnungszeitraum, der in die nächste Zinsperiode fällt, geteilt durch das Produkt aus (x) der tatsächlichen Anzahl von Tagen in dieser Zinsperiode und (y) der Anzahl von Zinsperioden in einem Jahr.

(c) Die Verzinsung der Schuldverschreibungen endet mit Beginn des Tages, an dem sie zur Rückzahlung fällig werden, oder, sollte die Emittentin eine solche Zahlung aus diesen Schuldverschreibungen bei Fälligkeit nicht leisten, mit Beginn des Tages der tatsächlichen Zahlung. Der in einem solchen Fall anzuwendende Zinssatz richtet sich nach den gesetzlichen Bestimmungen.2

§ 3 Fälligkeit, vorzeitige Rückzahlung und Rückkauf

(a) [Im Fall der 2015 Schuldverschreibungen einfügen: Die Schuldverschreibungen werden am 22. September 2015 (der "Endfälligkeitstag") zum Nennbetrag zurückgezahlt.] [Im Fall der 2017 Schuldverschreibungen einfügen: Die Schuldverschreibungen werden am 22. September 2017 (der "Endfälligkeitstag") zum Nennbetrag zurückgezahlt.]

(b) Die Emittentin ist, abgesehen von den in § 3(c) genannten Fällen, nicht berechtigt, die Schuldverschreibungen zur vorzeitigen Rückzahlung zu kündigen.

(c) Die Emittentin ist berechtigt, durch eine Bekanntmachung an die Anleihegläubiger gemäß § 11 unter Einhaltung einer Frist von nicht weniger als 30 und nicht mehr als 60 Tagen die Schuldverschreibungen zum Nennbetrag zuzüglich gegebenenfalls aufgelaufener Zinsen (insgesamt und nicht teilweise) zurückzuzahlen, wenn die Emittentin in Folge einer Gesetzesänderung oder einer Änderung von darunter erlassenen Bestimmungen und Vorschriften der Bundesrepublik Deutschland ("Deutschland") oder einer ihrer Gebietskörperschaften oder Behörden oder als Folge einer Änderung der offiziellen Auslegung oder Anwendung dieser Gesetze, Bestimmungen oder Vorschriften durch eine gesetzgebende Körperschaft, ein Gericht oder eine Behörde verpflichtet ist oder verpflichtet sein wird, Zusätzliche Beträge gemäß § 5 zu zahlen und die Emittentin diese Verpflichtung nicht durch das Ergreifen zumutbarer Maßnahmen abwenden kann.

Die Rückzahlungsbekanntmachung darf nicht früher als 90 Tage vor dem Tag erfolgen, an dem die Emittentin erstmals verpflichtet wäre, Zusätzliche Beträge gemäß § 5 zu zahlen.

Die Emittentin wird die Zahlstelle (wie § 9(a) definiert) vor dieser Bekanntmachung von der vorzeitigen Rückzahlung informieren. Die Bekanntmachung und die Information der Zahlstelle sollen diejenigen Tatsachen enthalten, auf welche die Emittentin ihr Kündigungsrecht stützt.

(d) Die Emittentin ist berechtigt, Schuldverschreibungen am Markt oder auf sonstige Weise zu erwerben.

2 Der gesetzliche Verzugszinssatz beträgt zum Datum dieses Prospekts fünf Prozentpunkte über dem von der Deutsche Bundesbank von Zeit zu Zeit festgelegten Basiszinssatz (derzeit 0,12 %), §§ 288 Absatz 1, 247 Absatz 1 BGB.

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(e) Wenn die Emittentin einen Kontrollwechsel entsprechend nachstehendem Absatz (ii) in diesem § 3(e) bekannt macht, ist jeder Anleihegläubiger berechtigt, von der Emittentin zum Stichtag (wie nachfolgend definiert) die Rückzahlung einzelner oder aller seiner Schuldverschreibungen zum Nennbetrag zuzüglich bis zu dem Stichtag (ausschließlich) gegebenenfalls aufgelaufener Zinsen zu verlangen. Eine entsprechende Erklärung ist mit einer Frist von nicht weniger als 15 Tagen vor dem Stichtag gegenüber der Zahlstelle abzugeben und kann nicht widerrufen werden.

Die Emittentin wird, sobald wie möglich, nachdem sie Kenntnis von einem Kontrollwechsel erhalten hat,:

(i) den Stichtag festlegen; und

(ii) den Kontrollwechsel und den Stichtag gemäß § 11 bekannt machen.

"Kontrollwechsel" bedeutet in diesem § 3(e) eine Situation, in der eine Person oder gemeinsam handelnde Personen direkt oder indirekt mehr als 50 % der Stammaktien oder Stimmrechte der Emittentin halten.

"gemeinsam handelnde Personen" ist in diesem § 3(e) entsprechend der Bedeutung auszulegen, die dieser Formulierung in § 2 Abs. 5 des Wertpapiererwerbs- und Übernahmegesetzes zugewiesen wird.

"Stichtag" bedeutet in diesem § 3(e) den von der Emittentin gemäß diesem § 3(e) festgelegten und bekannt gemachten Geschäftstag, der nicht weniger als 40 und nicht mehr als 60 Tage nach dem Tag der Veröffentlichung der Bekanntmachung entsprechend vorstehendem Absatz (ii) in diesem § 3(e) liegen darf.

§ 4 Zahlungen

(a) Die Emittentin verpflichtet sich unwiderruflich, Kapital und Zinsen auf die Schuldverschreibungen bei Fälligkeit in EUR zu zahlen. Die Zahlung von Kapital und Zinsen erfolgt, vorbehaltlich geltender steuerrechtlicher und sonstiger gesetzlicher Regelungen und Vorschriften, an die Zahlstelle zur Weiterleitung an das Clearingsystem oder dessen Order zur Gutschrift auf den Konten der jeweiligen Kontoinhaber des betreffenden Clearing Systems gegen Vorlage der Globalurkunde bei der bezeichneten Geschäftsstelle einer der Zahlstellen außerhalb der Vereinigten Staaten. Die Zahlung von Zinsen auf Schuldverschreibungen, die durch die Vorläufige Globalurkunde verbrieft sind, erfolgt an das Clearing System nach ordnungsgemäßer Bescheinigung gemäß § 1(c). Die Zahlung an das Clearingsystem oder nach dessen Weisung befreit die Emittentin in Höhe der geleisteten Zahlung von ihren entsprechenden Verbindlichkeiten aus den Schuldverschreibungen. Eine Bezugnahme in diesen Anleihebedingungen auf Kapital oder Zinsen der Schuldverschreibungen schließt jegliche Zusätzlichen Beträge gemäß § 5 ein.

(b) Falls ein Fälligkeitstag für die Zahlung von Kapital und/oder Zinsen kein Geschäftstag ist, erfolgt die Zahlung erst am nächstfolgenden Geschäftstag; die Anleihegläubiger sind nicht berechtigt, Zinsen oder eine andere Entschädigung wegen eines solchen Zahlungsaufschubs zu verlangen.

Für Zwecke dieser Anleihebedingungen bezeichnet "Geschäftstag" einen Tag, an dem (i) das Clearingsystem Zahlungen abwickelt und (ii) das Trans-European Automated Real-time Gross Settlement Express Transfer System 2 (TARGET) oder ein Nachfolgesystem zur Verfügung steht.

(c) Die Emittentin ist berechtigt, Kapital- oder Zinsbeträge, die nicht innerhalb von zwölf Monaten ab dem Fälligkeitstag von Anleihegläubigern geltend gemacht werden, beim Amtsgericht Frankfurt am Main, Deutschland, zu hinterlegen, selbst wenn sich die betreffenden Anleihegläubiger nicht im Annahmeverzug befinden. Sofern und soweit eine entsprechende Hinterlegung vorgenommen wird und auf das Auszahlungsrecht verzichtet wird, erlöschen die betreffenden Ansprüche der Anleihegläubiger gegen die Emittentin.

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§ 5 Besteuerung

Alle in Bezug auf die Schuldverschreibungen zahlbaren Kapital- oder Zinsbeträge werden ohne Einbehalt oder Abzug für oder wegen Steuern oder Abgaben oder regierungsseitigen Gebühren gleich welcher Art gezahlt, die von oder in Deutschland, oder für deren Rechnung oder von oder für Rechnung einer Gebietskörperschaft oder Steuerbehörde dieses Staates auferlegt oder erhoben werden, es sei denn, ein solcher Abzug oder Einbehalt ist gesetzlich vorgeschrieben. In einem solchen Fall wird die Emittentin diejenigen zusätzlichen Beträge ("Zusätzliche Beträge") zahlen, die erforderlich sind, damit die den Anleihegläubigern zufließenden Beträge jeweils den Beträgen entsprechen, die die Anleihegläubiger ohne einen solchen Einbehalt oder Abzug erhalten hätten; jedoch sind solche zusätzlichen Beträge nicht zu zahlen:

(a) in Bezug auf die deutsche Kapitalertragsteuer (einschließlich der Abgeltungsteuer), einschließlich Kirchensteuer (soweit diese anfällt) und dem Solidaritätszuschlag oder jede andere Steuer, welche die deutsche Kapitalertragsteuer ersetzen sollte;

(b) an einen Anleihegläubiger oder an einen Dritten für einen Anleihegläubiger, falls dieser Anleihegläubiger aufgrund einer über die bloße Inhaberschaft der Schuldverschreibungen oder den Erhalt der unter diesen zu leistenden Zahlungen hinausgehenden gegenwärtigen oder ehemaligen Verbindung zu Deutschland einem solchen Einbehalt oder Abzug unterliegt;

(c) an einen Anleihegläubiger oder an einen Dritten für einen Anleihegläubiger, falls kein Einbehalt oder Abzug erfolgen müsste, wenn die Schuldverschreibungen zum Zeitpunkt der fraglichen Zahlung einem Depot bei einer nicht in Deutschland ansässigen Bank gutgeschrieben gewesen wären;

(d) falls ein solcher Einbehalt oder Abzug aufgrund der Richtlinie des Rates der Europäischen Union 2003/48/EC (oder jedwede Änderung dieser Richtlinie), einem internationalen zwischenstaatlichen Abkommen oder einer anderen Einkommensteuer-Richtlinie oder durch ein diese Richtlinie umsetzendes oder sie befolgendes oder zu ihrer Befolgung erlassenes Gesetz oder durch ein anderes Abkommen zwischen einem EU-Mitgliedsstaat und bestimmten anderen Ländern und Territorien im Zusammenhang mit einer solchen Richtlinie oder Abkommen erfolgt;

(e) soweit der Einbehalt oder Abzug im Hinblick auf einen Anleihegläubiger oder im Hinblick auf einen Dritten für einen Anleihegläubiger vorzunehmen ist, der einen solchen Einbehalt oder Abzug dadurch rechtmäßigerweise hätte vermeiden können (aber nicht vermieden hat), dass er gesetzliche Vorschriften beachtet, oder dafür sorgt, dass Dritte dieses tun, oder, dass er eine Nichtansässigkeitserklärung oder einen ähnlichen Antrag auf Befreiung gegenüber den am Zahlungsort zuständigen Steuerbehörden abgibt oder dafür sorgt, dass Dritte dieses tun; oder

(f) soweit der Einbehalt oder Abzug zu einem Zeitpunkt vorzunehmen ist, der mehr als 30 Tage nach dem Tag der erstmaligen Fälligkeit der Zahlung oder (im Fall des Zahlungsverzugs) dem Tag der vollständigen Zahlung des fälligen Betrages liegt.

§ 6 Vorlegungsfrist

Die Vorlegungsfrist gemäß § 801 Absatz 1 Satz 1 BGB für fällige Schuldverschreibungen wird auf zehn Jahre verkürzt.

§ 7 Status und Negativverpflichtung

(a) Die Schuldverschreibungen begründen unbesicherte und nicht nachrangige Verbindlichkeiten der Emittentin, die untereinander und mit allen anderen unbesicherten und nicht nachrangigen - 74 -

Verbindlichkeiten der Emittentin gleichrangig sind, soweit diesen Verbindlichkeiten nicht durch zwingende gesetzliche Bestimmungen ein Vorrang eingeräumt wird.

(b) Die Emittentin verpflichtet sich, solange bis Kapital und Zinsen sowie etwaige Zusäzliche Beträge gemäß § 5 im vollen Umfang bei der Zahlstelle bereitgestellt worden sind, für keine gegenwärtigen oder zukünftigen Kapitalmarktverbindlichkeiten und Kreditverbindlichkeiten eine Garantie oder Gewährleistung einzugehen und hierfür keine Sicherheiten, ausgenommen die Zugelassenen Sicherheiten, am gesamten oder irgendeinem Teil des gegenwärtigen oder zukünftigen eigenen Vermögens der Emittentin zu bestellen und, soweit gesetzlich zulässig, dafür Sorge zu tragen, dass dies auch durch keine Wesentliche Tochtergesellschaft geschieht, es sei denn, dass diese Schuldverschreibungen zu gleicher Zeit und im gleichen Rang anteilig an dieser Sicherheit teilnehmen und die Sicherheit von einer unabhängigen Wirtschaftsprüfungsgesellschaft von internationalem Rang als für die Zwecke der Anleihegläubiger gleichwertige Sicherheit anerkannt wird.

(c) "Sicherheit" bedeutet in diesem § 7 jede Art von Grundpfandrechten, Mobiliarpfandrechten oder sonstigen dinglichen Belastungen (mit Ausnahme von dinglichen Belastungen aufgrund gesetzlicher Vorschriften) sowie die Sicherungsübereignung bzw. -abtretung und die Globalzession.

"Kapitalmarktverbindlichkeit" bedeutet in diesem § 7 jede gegenwärtige oder zukünftige Verbindlichkeit der Emittentin in Form von Schuldverschreibungen oder ähnlichen Instrumenten mit einer ursprünglichen Laufzeit von mehr als einem Jahr, die üblicherweise an einer Börse oder einem anderen Wertpapiermarkt gehandelt werden können, oder eine Garantie oder Gewährleistung der Emittentin für eine solche Verbindlichkeit oder eine entsprechende Garantie oder Gewährleistung eines Dritten für eine solche Verbindlichkeit.

"Kreditverbindlichkeit" bedeutet in diesem § 7 jede Verpflichtung aus der Aufnahme von Krediten (einschließlich, aber ohne darauf beschränkt zu sein, Schuldscheindarlehen, Bankkredite und sonstige Kredite) sowie ausländische Privatplatzierungen, soweit solche Privatplatzierungen nicht bereits dem Begriff der "Kapitalmarktverbindlichkeit" unterfallen.

"Wesentliche Tochtergesellschaften" im Sinne dieser Anleihebedingungen sind jede unmittelbare und mittelbare Beteiligung an einer Kapital- oder Personengesellschaft mit Sitz in einem Mitgliedstaat der Organisiation für wirtschaftliche Zusammenarbeit und Entwicklung (OECD), an der die Emittentin direkt oder indirekt mehr als 50% des Kapitals und mehr als 50% der Stimmrechte hält und deren Bilanzsumme mehr als 2 % der konsolidierten Bilanzsumme, wie im jeweils letzten testierten Konzern-Jahresabschluss des Rheinmetall-Konzerns ausgewiesen, übersteigt.

"Zugelassene Sicherheit" bedeutet in diesem § 7:

(i) eine Sicherheit, die bei Begebung der Schuldverschreibungen besteht;

(ii) (x) eine Sicherheit die nach Begebung der Schuldverschreibungen bestellt wird; und/oder

(y) eine bestehende Sicherheit über Vermögenswerte oder Aktien von nach Begebung der Schuldverschreibungen neu erworbenen direkten oder indirekten Wesentlichen Tochtergesellschaften der Emittentin;

wobei der Gesamtbetrag dieser Sicherheiten 5% der konsolidierten Bilanzsumme des zum jeweiligen Zeitpunkt letzten vorliegenden, testierten Jahresabschlusses des Rheinmetall-Konzerns (im folgenden der "Schwellenwert") nicht übersteigen darf. Sobald und soweit der Schwellenwert im Rahmen einer nach (y) zulässigen Sicherheitenstellung überschritten wird, ist die Emittentin verpflichtet, innerhalb von 12 Monaten nach Bestellung der betreffenden Sicherheiten bzw. dem Erwerb der betreffenden direkten oder indirekten Wesentlichen Tochtergesellschaften die Freigabe der betreffenden Sicherheiten bis zu einer Höhe herbeizuführen, die maximal dem Schwellenwert entspricht. Zur - 75 -

Klarstellung: Eine Sicherheitenstellung nach (x) darf den Schwellenwert zu keiner Zeit überschreiten;

(iii) eine Sicherheit, die im Rahmen der normalen Geschäftstätigkeit entsteht, wobei, zur Klarstellung, eine Sicherheitenstellung im Rahmen einer reinen Finanzierungstätigkeit nicht zur normalen Geschäftstätigkeit der Emittentin im Sinne dieses § 7 (c) (iii) zählt - vorbehaltlich der nachfolgenden Bezugnahme auf allgemeine Geschäftsbedingungen von Kreditinstituten; sowie eine Sicherheit in der Form eines Eigentumsvorbehalts, soweit dies im Rahmen der normalen Geschäftstätigkeit des Unternehmens des Rheinmetall-Konzerns geschieht, sowie eine Sicherheit, die im Rahmen der normalen Geschäftstätigkeit kraft Gesetzes oder im Rahmen üblicher allgemeiner Geschäftsbedingungen von Kreditinstituten entsteht;

(iv) eine Sicherheit über Vermögenswerte, die nach IFRS (International Financial Reporting Standards) in der Konzernbilanz der Emittentin aktiviert werden müssen, aber die ausschließlich nach wirtschaftlicher Betrachtung, nicht aufgrund gesetzlicher Vorschriften über dingliche Rechte der Emittentin und/oder einer Wesentlichen Tochtergesellschaft zuzurechnen sind.

§ 8 Kündigung der Schuldverschreibungen

(a) Jeder Anleihegläubiger ist berechtigt, seine sämtlichen Forderungen aus den Schuldverschreibungen bei Vorliegen eines Kündigungsgrundes durch Kündigung fällig zu stellen und Rückzahlung zum Nennbetrag einschließlich gegebenenfalls aufgelaufener Zinsen zu verlangen. Vorbehaltlich des § 8(b) gilt es als Kündigungsgrund, wenn

(i) die Emittentin, gleichgültig aus welchen Gründen, Kapital oder Zinsen auf diese Schuldverschreibungen, einschließlich etwaiger gemäß § 5 zu zahlender Zusätzlicher Beträge, innerhalb von sieben Tagen nach dem betreffenden Fälligkeitstag nicht zahlt, oder

(ii) die Emittentin die ordnungsgemäße Erfüllung einer sonstigen Verpflichtung aus diesen Schuldverschreibungen, gleichgültig aus welchen Gründen, unterlässt und die Unterlassung länger als 30 Tage andauert, nachdem die Emittentin hierüber eine schriftliche Mitteilung von der Zahlstelle erhalten hat, oder

(iii) die Emittentin oder eine Wesentliche Tochtergesellschaft innerhalb einer Frist von 30 Tagen nach Fälligkeit einer Verpflichtung zur Zahlung von Kapital oder Zinsen aus anderen Verbindlichkeiten aus aufgenommenen Geldern in einem Gesamtnennbetrag von mindestens EUR 40.000.000 oder einem entsprechenden Gegenwert in anderen Währungen nicht nachkommt oder infolge Rückstandes eine solche Verpflichtung vorzeitig einlösen muss oder wenn dafür eingeräumte Sicherheiten zugunsten der oder durch die berechtigten Gläubiger in Anspruch genommen werden und die Nichterfüllung oder der Rückstand oder die Inanspruchnahme nicht darauf beruht, dass die Emittentin oder eine solche Wesentliche Tochtergesellschaft mittelbar oder unmittelbar durch Maßnahmen irgendeiner Regierung oder Behörde an der Erfüllung der betreffenden Verpflichtungen gehindert ist, oder

(iv) die Emittentin oder eine Wesentliche Tochtergesellschaft ihre Zahlungsunfähigkeit bekannt gibt, oder

(v) gegen die Emittentin oder eine Wesentliche Tochtergesellschaft ein Insolvenzverfahren gerichtlich eröffnet worden ist, das nicht innerhalb von 60 Tagen nach dessen jeweiligen Eröffnung aufgehoben oder ausgesetzt worden ist, oder die Emittentin oder eine ihrer Wesentlichen Tochtergesellschaften ein solches Verfahren beantragt oder ihre Zahlungen eingestellt hat, oder

(vi) die Emittentin oder eine Wesentliche Tochtergesellschaft ihre Geschäftstätigkeit insoweit einstellt, - 76 -

als hierdurch (x) der Wert ihres Vermögens wesentlich vermindert und (y) es wahrscheinlich wird, dass die Emittentin ihre Zahlungsverpflichtungen gegenüber den Anleihegläubigern nicht mehr erfüllen kann, oder

(vii) die Emittentin in Liquidation tritt, es sei denn, dass eine solche Liquidation im Zusammenhang mit einer Verschmelzung, Konsolidierung oder einer anderen Form des Zusammenschlusses mit einer anderen Gesellschaft vorgenommen wird und diese andere oder neue Gesellschaft (x) alle Verpflichtungen aus diesen Anleihebedingungen übernimmt und (y) ein Rating erhält, das dem der Emittentin unmittelbar vor dem Zeitpunkt der Verschmelzung, Konsolidierung oder anderen Form des Zusammenschlusses mindestens entspricht, oder

(viii) die Emittentin oder eine ihrer Wesentlichen Tochtergesellschaften in einer einzelnen Transaktion oder in einer Reihe von Transaktionen (unabhängig davon, ob diese miteinander zusammenhängen oder nicht) die Gesamtheit oder einen Teil ihrer Vermögenswerte, ausgenommen hiervon sind die im konsolidierten Jahresabschluss von 2009 der Emittentin als "Zur Veräußerung vorgesehene Vermögenswerte" bestimmten Vermögenswerte, an Personen veräußert, bei denen es sich nicht um Gesellschaften des Rheinmetall-Konzerns handelt. Der erste Satz dieses § 8(a)(viii) findet keine Anwendung auf Veräußerungen:

(a) bei denen der Buchwert des jeweils veräußerten Vermögenswerts EUR 1.000.000 nicht übersteigt, unabhängig davon, ob die Veräußerung im Rahmen der üblichen oder unüblichen Geschäftstätigkeit des veräußernden Unternehmens erfolgt. Zur Klarstellung: Sofern mehr als ein Vermögenswert in einer zusammenhängenden Transaktion veräußert wird (z.B. unter einem Kaufvertrag), bezieht sich der Betrag von EUR 1.000.000 nicht auf den Buchwert jedes einzelnen veräußerten Vermögenswerts sondern auf die kumulierten Buchwerte aller in dieser zusammenhängenden Transaktion veräußerten Vermögenswerte;

(b) die im Rahmen der üblichen Geschäftstätigkeit des veräußernden Unternehmens erfolgen;

(c) außerhalb der üblichen Geschäftstätigkeit des veräußernden Unternehmens nach § 8 (a) (viii) (b) zu üblichen Marktbedingungen und bei denen mindestens 80 % der Nettoerlöse für Unternehmenszwecke beim Rheinmetall-Konzern verbleiben und nicht mehr als 20 % an den oder die Aktionäre der Emittentin ausgeschüttet werden; und

(d) außerhalb der üblichen Geschäftstätigkeit des veräußernden Unternehmens nach § 8 (a) (viii) (b) zu üblichen Marktbedingungen und die nicht bereits gemäß den Unterabsätzen (a) bis (c) zulässig sind, bis zu einem Freibetrag in Höhe des höheren Werts von (i) 3 (drei) Prozent der Konzernbilanzsumme der Emittentin zum Bilanzstichtag des jeweils zuletzt veröffentlichten testierten Konzern-Jahresabschlusses des Rheinmetall-Konzerns und (ii) EUR 100.000.000 (der "Freibetrag"), wobei die veräußerten Vermögenswerte mit ihren jeweiligen Buchwerten in Ansatz gebracht werden.

Für die Zwecke dieses Unterabsatzes (d) gilt: Der Buchwert veräußerter Vermögenswerte wird in der chronologischen Reihenfolge der Wirksamkeit der Veräußerung des jeweiligen Vermögenswerts (d. h. mit dinglichem Vollzug) auf den Freibetrag angerechnet.

"Nettoerlöse" bezeichnet die Erlöse aus der Veräußerung von Vermögenswerten nach Abzug von:

(aa) angemessenen Provisionen, Kosten und Auslagen, die einer Konzerngesellschaft des Rheinmetall-Konzerns in Bezug auf diese Veräußerung entstehen und an Personen zu zahlen sind oder gezahlt wurden, die nicht dem Rheinmetall-Konzern angehören;

(bb) vom Veräußerer im Zusammenhang mit dieser Veräußerung gezahlten oder zu zahlenden Steuern (wie vom Veräußerer zum Zeitpunkt der Veräußerung in angemessener Weise - 77 -

angesetzt); und

(cc) in angemessener Weise einbehaltenen Beträgen zur Berücksichtigung möglicher Verpflichtungen im Zusammenhang mit der betreffenden Veräußerung (wie vom Veräußerer zum Zeitpunkt der Veräußerung in angemessener Weise angesetzt).

(b) In den Fällen des § 8(a)(ii) und (iii) liegt ein Kündigungsgrund erst dann vor, wenn Kündigungen von Anleihegläubigern gemäß § 8(c) im Gesamtnennbetrag von mindestens fünf Prozent aller ausstehenden Schuldverschreibungen (einschließlich eventueller Aufstockungen) bei der Zahlstelle eingegangen sind.

(c) Eine Kündigung zur Rückzahlung gemäß dieses § 8 ist vom Anleihegläubiger schriftlich gegenüber der Zahlstelle zu erklären. Die Kündigung soll einen Eigentumsnachweis, z.B. eine aktuelle Depotbestätigung, enthalten. In den Fällen der § 8(a)(i), (iv)-(viii) tritt die Fälligkeit am fünften Geschäftstag nach Zugang der Kündigung ein. In den Fällen der § 8(a)(ii) und (iii) tritt die Fälligkeit am fünften Geschäftstag nach Zugang der Kündigung bei der Zahlstelle ein, die zum Erreichen beziehungsweise Überschreiten des Schwellenwertes gemäß § 8(b) führt, es sei denn, dass vor Fälligkeit im Falle des § 8(a)(ii) die Verpflichtung erfüllt oder im Falle des § 8(a)(iii) die Zahlungsverpflichtung erfüllt oder jeweils auf ihre Erfüllung verzichtet oder die Erfüllung aufgeschoben worden ist.

(d) Eine Kündigung durch Anleihegläubiger wird gemäß § 11 durch die Emittentin veröffentlicht.

§ 9 Beauftragte Stellen

(a) Die Emittentin hat

Deutsche Bank Aktiengesellschaft Große Gallusstraße 10-14 60272 Frankfurt am Main Deutschland

als Hauptzahlstelle (die "Hauptzahlstelle"); und

Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer 1115 Luxemburg Großherzogtum Luxemburg

als Zahlstelle (die "Zahlstelle") bestellt.

(b) Die Hauptzahlstelle und die Zahlstelle handeln ausschließlich als Vertreter der Emittentin und übernimmen keine Verpflichtungen gegenüber den Anleihegläubigern; es wird kein Vertrags-, Auftrags- oder Treuhandverhältnis zwischen ihnen und den Anleihegläubigern begründet. Die Zahlstellen sind von den Beschränkungen des § 181 des Bürgerlichen Gesetzbuchs (BGB) befreit.

(c) Die Emittentin behält sich das Recht vor, jederzeit die Benennung von Zahlstellen zu verändern oder zu beenden und namhafte Finanzinstitutionen als Nachfolger bzw. zusätzliche Hauptzahlstelle oder Zahlstellen zu ernennen. Den Anleihegläubigern werden Änderungen in bezug auf die Zahlstellen und deren angegebenen Geschäftsstellen umgehend gemäß § 11 bekanntgemacht.

Solange die Schuldverschreibungen an der Luxemburger Börse notiert werden, wird die Emittentin sicherstellen, dass eine Zahlstelle mit einer benannten Geschäftsstelle an dem von der Luxemburger Börse vorgeschriebenen Ort bestellt ist.

- 78 -

§ 10 Schuldnerersetzung

(a) Die Emittentin ist jederzeit berechtigt, ohne Zustimmung der Anleihegläubiger eine andere Gesellschaft, an der die Emittentin direkt oder indirekt mehr als 50 % der Stimmrechte zustehen, als Schuldnerin (die "Neue Emittentin") für alle Verpflichtungen aus oder in Verbindung mit den Schuldverschreibungen an die Stelle der Emittentin zu setzen, sofern

(i) die Neue Emittentin alle Verpflichtungen der Emittentin aus oder in Verbindung mit den Schuldverschreibungen übernimmt,

(ii) die Neue Emittentin alle etwa notwendigen Genehmigungen von den zuständigen Behörden erhalten hat, wonach die Neue Emittentin alle Beträge, die zur Erfüllung der aus oder in Verbindung mit den Schuldverschreibungen entstehenden Zahlungsverpflichtungen erforderlich sind, in EUR und ohne Einbehalt an der Quelle oder Abzug an der Quelle von irgendwelchen Steuern, Gebühren oder Abgaben an die Zahlstelle transferieren darf,

(iii) die Neue Emittentin sich verpflichtet hat, jeden Anleihegläubiger hinsichtlich solcher Steuern oder Abgaben freizustellen, die einem Anleihegläubiger als Folge der Ersetzung auferlegt werden;

(iv) die Emittentin unbedingt und unwiderruflich die Verpflichtungen der Neuen Emittentin gegenüber den Anleihegläubigern garantiert,

(v) die Neue Emittentin, falls sie ihren Sitz in einem anderen Land als Deutschland hat, einen Zustellungsbevollmächtigten mit Sitz in Deutschland für Rechtsstreitigkeiten vor deutschen Gerichten bestellt hat,

(vi) die Emittentin (Rheinmetall Aktiengesellschaft als Garantin) und die Neue Emittentin die Verpflichtungen aus diesen Anleihebedingungen übernehmen, und

(vii) die Neue Emittentin, in einem Fall, in dem die Emittentin nicht direkt oder indirekt 100% der Anteile an der Neuen Emittentin hält, der Zahlstelle als Vollzugsvoraussetzung der Schuldnerersetzungsvereinbarung ein Rechtsgutachten einer international angesehenen Rechtsanwaltskanzlei vorlegt, das die Rechtswirksamkeit der Schuldnerersetzung und der Garantie bestätigt.

(b) Im Falle einer solchen Schuldnerersetzung gilt jede in diesen Anleihebedingungen enthaltene Bezugnahme auf die Emittentin fortan als auf die Neue Emittentin bezogen und, mit Ausnahme des § 12(a), jede Bezugnahme auf Deutschland als Bezugnahme auf das Land, in dem die Neue Emittentin ihren Sitz hat oder, falls abweichend, als Steuerinländer gilt.

(c) Eine Schuldnerersetzung gemäß § 10(a) ist für die Anleihegläubiger bindend und ist unverzüglich gemäß § 11 öffentlich bekannt zu machen.

§ 11 Bekanntmachungen

(a) Alle die Schuldverschreibungen betreffenden Bekanntmachungen erfolgen durch elektronische Publikation auf der Website der Luxemburger Börse (www.bourse.lu) in Übereinstimmung mit allen einschlägigen Gesetzen. Jede Bekanntmachung gilt am dritten Tag nach dem Tag der Veröffentlichung als wirksam erfolgt.

(b) Solange Schuldverschreibungen am geregelten Markt der Luxemburger Börse zugelassen sind, findet § - 79 -

11(a) Anwendung. Soweit dies Bekanntmachungen über den Zinssatz betrifft und vorbehaltlich aller einschlägigen Gesetze, kann die Emittentin eine Bekanntmachung gemäß § 11(a) durch eine Bekanntmachung an das Clearing System zur Weiterleitung an die Anleihegläubiger ersetzen; jede derartige Bekanntmachung gilt am fünften Tag nach dem Tag der Bekanntmachung an das Clearing System als den Anleihegläubigern mitgeteilt.

§ 12 Anwendbares Recht, Erfüllungsort, Gerichtsstand, Änderung der Anleihebedingungen und Gemeinsamer Vertreter

(a) Form und Inhalt der Schuldverschreibungen sowie alle sich daraus ergebenden Rechte und Pflichten bestimmen sich ausschließlich nach dem Recht der Bundesrepublik Deutschland. Erfüllungsort ist Frankfurt am Main.

(b) Nicht-ausschließlicher Gerichtsstand für alle sich aus den in diesen Anleihebedingungen geregelten Rechtsverhältnissen ergebenden Rechtsstreitigkeiten mit der Emittentin ist Frankfurt am Main.

(c) Die Anleihebedingungen können durch die Emittentin mit Zustimmung der Anleihegläubiger aufgrund Mehrheitsbeschlusses nach Maßgabe der §§ 5 ff. des Gesetzes über Schuldverschreibungen aus Gesamtemissionen (Schuldverschreibungsgesetz – "SchVG") in seiner jeweils gültigen Fassung geändert werden. Die Anleihegläubiger können insbesondere einer Änderung wesentlicher Inhalte der Anleihebedingungen mit den in Absatz (c)(i) genannten Mehrheiten zustimmen, einschließlich der in § 5 Absatz 3 SchVG vorgesehenen Maßnahmen. Die Mehrheitsbeschlüsse der Anleihegläubiger sind für alle Anleihegläubiger gleichermaßen verbindlich. Ein Mehrheitsbeschluss der Anleihegläubiger, der nicht gleiche Bedingungen für alle Anleihegläubiger vorsieht, ist unwirksam, es sei denn die benachteiligten Anleihegläubiger stimmen ihrer Benachteiligung ausdrücklich zu.

(i) Vorbehaltlich des nachstehenden Satzes und der Erreichung der erforderlichen Beschlussfähigkeit gemäß § 18 Absatz 4 SchVG i.V.m. § 15 Absatz 3 SchVG, beschließen die Anleihegläubiger mit der einfachen Mehrheit der an der Abstimmung teilnehmenden Stimmrechte. Beschlüsse, durch welche der wesentliche Inhalt der Bedingungen, insbesondere in den Fällen des § 5 Absatz 3 Nummer 1 bis 9 SchVG, geändert wird, bedürfen zu ihrer Wirksamkeit einer Mehrheit von mindestens 75 % der an der Abstimmung teilnehmenden Stimmrechte (qualifizierte Mehrheit).

(ii) Alle Beschlüsse der Anleihegläubiger werden ausschließlich im Wege der Abstimmung ohne Versammlung (§ 18 SchVG) durchgeführt. Eine Gläubigerversammlung und eine Übernahme der Kosten für eine solche Versammlung durch die Emittentin findet ausschließlich im Fall des § 18 Absatz 4, Satz 2 SchVG statt.

(iii) Beschlüsse der Anleihegläubiger im Wege der Abstimmung ohne Versammlung werden nach § 18 SchVG getroffen. Anleihegläubiger, deren Schuldverschreibungen zusammen 5 % des jeweils ausstehenden Gesamtnennbetrags der Schuldverschreibungen erreichen, können schriftlich die Durchführung einer Abstimmung ohne Versammlung nach Maßgabe von § 9 i.V.m. § 18 SchVG verlangen. Die Aufforderung zur Stimmabgabe durch den Abstimmungsleiter regelt die weiteren Einzelheiten der Beschlussfassung und der Abstimmung. Mit der Aufforderung zur Stimmabgabe werden die Beschlussgegenstände sowie die Vorschläge zur Beschlussfassung den Anleihegläubigern bekannt gegeben.

(iv) Die Abstimmung wird von einem von der Emittentin beauftragten Notar oder, falls der Gemeinsame Vertreter (wie nachfolgend definiert) zur Abstimmung aufgefordert hat, vom Gemeinsamen Vertreter geleitet.

(v) An Abstimmungen der Anleihegläubiger nimmt jeder Anleihegläubiger nach Maßgabe des - 80 -

Nennbetrags oder des rechnerischen Anteils seiner Berechtigung an den ausstehenden Schuldverschreibungen teil.

(vi) Der Hinweis zur Anleihegläubigerabstimmung (der "Hinweis zur Anleihegläubigerabstimmung") legt fest, welcher Nachweis für die Ausübung des Anleihegläubigerstimmrechts notwendig ist. Soweit dies der Hinweis zur Anleihegläubigerabstimmung nicht anderes regelt, berechtigt ein Zertifikat, das von einem von der Emittentin zu bestellenden Vertreter auszugeben ist, den Inhaber des Zertifikats zur Abstimmung. Das Zertifikat muss datiert sein und soll die maßgebliche Anleihegläubigerabstimmung und den vom Anleihegläubiger gehaltenen maßgeblichen Nennbetrag angeben. Der Hinweis zur Anleihegläubigerabstimmung kann ferner den Nachweis der Identität der Person fordern, die vom Stimmrecht Gebrauch macht.

(d) "Gemeinsamer Vertreter" ist die Deutsche Bank Aktiengesellschaft, Große Gallusstraße 10-14, 60272 Frankfurt am Main, Deutschland. Die Haftung des Gemeinsamen Vertreters ist auf das Zehnfache seiner jährlichen Vergütung beschränkt, es sei denn, dem Gemeinsamen Vertreter fällt Vorsatz oder grobe Fahrlässigkeit zu Last. Der Gemeinsame Vertreter hat die Aufgaben und Befugnisse, welche ihm durch Gesetz oder von den Anleihegläubigern durch Mehrheitsbeschluss eingeräumt wurden. Er hat die Weisungen der Gläubiger zu befolgen. Soweit er zur Geltendmachung von Rechten der Anleihegläubiger ermächtigt ist, sind die einzelnen Anleihegläubiger zur selbständigen Geltendmachung dieser Rechte nicht befugt, es sei denn der Mehrheitsbeschluss sieht dies ausdrücklich vor. Über seine Tätigkeit hat der Gemeinsame Vertreter den Anleihegläubigern zu berichten. Für die Abberufung und die sonstigen Rechte und Pflichten des Gemeinsamen Vertreters gelten die Vorschriften des SchVG. Der Gemeinsame Vertreter kann vom Schuldner verlangen, alle Auskünfte zu erteilen, die zur Erfüllung der ihm übertragenen Aufgaben erforderlich sind.

- 81 -

GENERAL INFORMATION

Key information

Interest of natural and legal persons involved

Each Manager is entitled to customary fees in connection with the issuance of the Notes. Furthermore, the auditors of the Issuer and legal advisors to the Managers and the Issuer, respectively, are entitled to customary fees auditor and legal fees, as the case may be.

Certain of the Managers and their affiliates have from time to time performed, and in the future may perform, various financial advisory, commercial banking (including lending) and investment banking services for the Issuer and its affiliates, for which they have received and/or will receive fees and expenses.

Besides the disclosed interests above, so far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer.

Use of Proceeds, Net Proceeds, Total Expenses and Reasons for the Offering

The net proceeds of the Notes will be used for general corporate purposes. The amount of net proceeds will be published in the Pricing Notice. The estimated total expenses amount to approximately € 200,000,000.

Information concerning the Notes

Subject Matter of the Prospectus

The subject matter of the Prospectus is a total of € [●] Fixed Rate Notes 2010/2015 in denominations of € 1,000 (the "2015 Notes" or the "Notes" where the context so requires) and of € [●] Fixed Rate Notes 2010/2017 in denominations of € 1,000 (the "2017 Notes" or the "Notes" where the context so requires). The Notes are governed by German law and constitute Notes in bearer form in accordance with Sec. 793 et seq. of the German Civil Code.

For the avoidance of doubt, the Issuer will either issue the 2015 Notes or the 2017 Notes. After the pricing of the Notes (i.e. on or around 16 September 2010), the Issuer will decide which tranche of Notes (i.e. the 2015 Notes or the 2017 Notes) will be issued. Relevant details of the relevant tranche of Notes will be published in the Pricing Notice (as further described below - for further information see "Subscription and Sale").

The security codes of the 2015 Notes are as follows:

ISIN:...... XS0543373962 Common Code:...... 054337396 German Securities Code (WKN)...... A1EWPS

The security codes of the 2017 Notes are as follows:

ISIN:...... XS0542369219 Common Code:...... 054236921 German Securities Code (WKN)...... A1EWSC

- 82 -

Authorisation to issue the Notes

The issue of the Notes was authorised by the Issuer’s Management Board on 25 August 2010 and by the Issuer’s Supervisory Board on 25 August 2010.

Yield

Once calculated in accordance with the ICMA (International Capital Market Association) method and based on the relevant Issue Price to be published as described below, on the relevant Rate of Interest to be published as described above and based on the relevant Maturity Date and based on the assumption that the requirements relating to the Step-up Coupon as determined in § 2 (a) of the Terms and Conditions of the Notes are not met, the relevant initial return on the issue (yield) for subscribers will be published in the Pricing Notice.

Issue Price

The relevant Issue Price of the Notes will be determined between the Issuer and the Managers on the basis of a bookbuilding process and will be published in the Pricing Notice. For further information see "Subscription and Sale - Method of determination of the Issue Price and the Rate of Interest" below.

Listing and Trading Information

Application has been made for admission to listing of the relevant Notes on the official list of the Luxembourg Stock Exchange and to trading of the relevant Notes on the regulated market of the Luxembourg Stock Exchange (Bourse de Luxembourg) which is a regulated market in the meaning of Directive 2004/39/EC.

Applicability of the German Bond Act (Schuldverschreibungsgesetz) and Noteholders’ Representative

The Terms and Conditions of the Notes may be amended by the Issuer with the consent of the Noteholders upon a majority vote pursuant to §§ 5 of the Act on Debt Securities of 2009 (Schuldverschreibungsgesetz aus Gesamtemissionen - "SchVG"), as amended from time to time. The Noteholders may agree on amendments with material effect on the Terms and Conditions of the Notes with the majority specified in § 12 (c)(i) including any measures in accordance with §5 paragraph 3 SchVG. Resolutions by majority shall be binding on all Noteholders. Resolutions which do not provide for identical conditions for all are void, unless the Noteholders who are disadvantaged have expressly agreed upon their disadvantageous treatment.

The Issuer has appointed Deutsche Bank Aktiengesellschaft, Grosse Gallusstrasse 10-14, 60272 Frankfurt am Main, Germany as Noteholders’ Representative. The liability of the Noteholders' Representative shall be limited to ten times the amount of its annual remuneration, unless the Noteholders' Representative has acted willfully or with gross negligence. The Noteholders' Representative shall have the duties and powers provided by law or granted by majority resolution of the Noteholders. The Noteholders' Representative shall comply with the instructions of the Noteholders. To the extent that the Noteholders' Representative has been authorised to assert certain rights of the Noteholders, the Noteholders shall not be entitled to assert such rights themselves, unless explicitly provided for in the relevant majority resolution. The Noteholders' Representative shall provide reports to the Noteholders on its activities. The regulations of the SchVG apply with regard to the recall and the other rights and obligations of the Noteholders' Representative. The Noteholder's Representative may demand from the Issuer to furnish all information required for the performance of the duties entrusted to it.

Rating of the Notes

As at the date of this Prospectus, the Issuer expects a provisional rating of the Notes of Baa3 by Moody’s Investors Service, Inc.

- 83 -

Incorporation by Reference

The following documents shall be incorporated into and shall form part of this Prospectus:

(i) The Issuer’s consolidated annual report 2008 (the "Consolidated Annual Report 2008")

- the audited consolidated financial statements of the Issuer for the fiscal year ended on 31 December 2008 consisting of:

• Consolidated balance sheet (page 58 of the Consolidated Annual Report 2008);

• Consolidated income statement (page 59 of the Consolidated Annual Report 2008);

• Consolidated statement of cash flows (page 60 of the Consolidated Annual Report 2008);

• Statement of changes in equity (page 61 of the Consolidated Annual Report 2008);

• Notes to the consolidated financial statements (pages 62 – 113 of the Consolidated Annual Report 2008)

- the Auditor's report (page 119 of the Consolidated Annual Report 2008).

(ii) The Issuer’s annual report 2009 (the " Consolidated Annual Report 2009")

- the audited consolidated financial statements of the Issuer for the fiscal year ended on 31 December 2009 consisting of:

• Consolidated balance sheet (page 66 of the Consolidated Annual Report 2009);

• Consolidated income statement and statement of comprehensive income (page 67 of the Consolidated Annual Report 2009);

• Consolidated statement of cash flows (page 68 of the Consolidated Annual Report 2009);

• Statement of changes in equity (page 69 of the Consolidated Annual Report 2009);

• Notes to the consolidated financial statements (pages 70 – 127 of the Consolidated Annual Report 2009)

- the Auditor's report (page 129 of the Consolidated Annual Report 2009).

(iii) The Issuer’s interim financial report Q2/2010 (the "Interim Financial Report Q2/2010")

- the unaudited consolidated semiannual financial statements of the Issuer for the period 1 January 2010 until 30 June 2010 (Q2/2010) consisting of:

• Consolidated balance sheet (page 15 of the Interim Financial Report Q2/2010);

• Consolidated income statement and statement of comprehensive income (pages 16 - 17 of the Interim Financial Report Q2/2010);

• Consolidated statement of cash flows (page 18 of the Interim Financial Report Q2/2010);

• Statement of changes in equity (page 19 of the Interim Financial Report Q2/2010); - 84 -

• Notes to the consolidated semiannual financial statements (pages 20 – 23 of the Interim Financial Report Q2/2010).

Any information not listed in the table above but included in the documents incorporated by reference into this Prospectus is given for information purposes only.

As long as any Notes are listed on the official list of the Luxembourg Stock Exchange and traded on the regulated market of the Luxembourg Stock Exchange (Bourse de Luxembourg) and any applicable laws so require, the documents incorporated by reference are available on the website of the Luxembourg Stock Exchange (www.bourse.lu) and may be inspected and are available free of charge during normal business hours at the specified office of the Principal Paying Agent at Deutsche Bank Aktiengesellschaft, Grosse Gallusstrasse 10-14, 60272 Frankfurt am Main, Germany .

Documents on Display

During the validity of this Prospectus, copies of

(i) the Issuer's constitutional documents (including the articles of association (Satzung);

(ii) the Consolidated Annual Report 2008;

(iii) the Consolidated Annual Report 2009;

(iv) the Interim Financial Report Q2/2010; and

(v) this Prospectus and any supplement thereto can be inspected at the registered office of the Issuer, Rheinmetall Platz 1, 40476 Düsseldorf, Germany, during usual business hours.

- 85 -

TAXATION

The following general discussion of certain tax consequences in certain jurisdictions of an investment in the Notes is only a summary of the material tax considerations. Although this discussion reflects the opinion of the Issuer it must not be misunderstood as a guarantee in an area of law which is not free from doubt. It does not purport to be a comprehensive description of all tax considerations, which may be relevant to a decision to purchase Notes, and in particular, does not consider any specific facts or circumstances that may apply to a particular purchaser. This summary is based on the laws of the respective jurisdictions currently in force and as applied on the date of this Prospectus, which are subject to change, possibly with retroactive or retrospective effect.

Potential purchasers of Notes are advised to consult their own tax advisors as to the tax consequences of the purchase, ownership and disposition of Notes, including the effect of any state or local taxes, under the tax laws of each country of which they are residents.

Luxembourg

Withholding Tax

All payments of interest and principal by the Issuer in the context of the holding, disposal, redemption or repurchase of the Notes can be made free and clear of any withholding or deduction for or on account of any taxes of whatsoever nature imposed, levied, withheld, or assessed by Luxembourg or any political subdivision or taxing authority thereof or therein, in accordance with the applicable Luxembourg law, subject however to:

(i) the application of the Luxembourg laws of 21 June, 2005 implementing the European Union Savings Directive (Council Directive 2003/48/EC) (the "EU Savings Tax Directive") and several agreements concluded with certain dependent or associated territories of the European Union, i.e. Aruba, British Virgin Islands, Guernsey, the Isle of Man, Jersey, Montserrat and Netherlands Antilles, and providing for the possible application of a withholding tax (20 per cent. from 1 July 2008 to 30 June 2011 and 35 per cent. from 1 July 2011) on interest paid by a Luxembourg paying agent to certain non Luxembourg resident investors (individuals and residual entities within the meaning of Article 4.2 of the EU Savings Tax Directive) in the event of the Issuer appointing a paying agent in Luxembourg within the meaning of the above-mentioned directive (see section "EU Savings Tax Directive" below) or agreements;

(ii) the application as regards Luxembourg resident individuals of the amended Luxembourg law of 23 December 2005 which has introduced a 10 per cent. withholding tax (which is final when Luxembourg resident individuals are acting in the context of the management of their private wealth) on savings income (i.e. with certain exemptions, savings income within the meaning of the Luxembourg laws of 21 June 2005 implementing the EU Savings Tax Directive paid by a Luxembourg paying agent). This law should apply to savings income accrued as from 1 July 2005 and paid as from 1 January 2006.

Responsibility for the withholding of tax in application of the above-mentioned Luxembourg laws of 21 June 2005 and 23 December 2005 as amended is assumed by the Luxembourg paying agent within the meaning of these laws and not by the Issuer.

Germany

General

The Business Tax Reform Act 2008 (Unternehmensteuerreformgesetz 2008) introduced, inter alia, the so-called flat withholding tax (Abgeltungsteuer), a new taxation regime for investment income. The flat withholding tax regime took effect on 1 January 2009 and changed the taxation of investment income for private investors

- 86 - significantly but also provides for certain modifications regarding the taxation of business investors. The new flat withholding tax applies to both current investment income like e.g. the interest payments under the Notes and capital gains from the sale, assignment or redemption of the Notes.

Tax Residents

Private Investors

Interest and Capital Gains

Interest payable on the Notes to persons who are tax residents of Germany (i.e., persons whose residence or habitual abode is located in Germany) are subject to flat withholding tax at a rate of 25 per cent. (plus 5.5 per cent. solidarity surcharge thereon and, if applicable, church tax) according to Sec. 20 para. 1 German Income Tax Act (Einkommensteuergesetz). Capital gains from the sale, assignment or redemption of the Notes, including interest having accrued up to the disposition of a Note and credited separately ("Accrued Interest"), if any, qualify – irrespective of any holding period – as investment income pursuant to Sec. 20 para. 2 German Income Tax Act as well and are subject to the flat withholding tax.

Capital gains are determined by taking the difference between the sale, assignment or redemption price (after the deduction of expenses incurred directly in connection with the sale, assignment or redemption) and the acquisition price of the Notes.

Expenses (other than such expenses directly incurred in connection with the sale, assignment or redemption) related to interest payments or capital gains under the Notes are – except for a standard lump sum (Sparer- Pauschbetrag) of € 801 (€ 1,602 for married couples) – not deductible.

According to the flat tax regime losses from the sale or redemption of the Notes can only be set-off against other investment income including capital gains subject to certain limitations. If the set-off is not possible in the assessment period in which the losses have been realised, such losses can be carried forward (no carryback) into future assessment periods only and can be set-off against investment income and capital gains generated in these future assessment periods subject to certain limitations. Capital losses suffered prior to 1 January 2009 can only be set-off against capital gains under the new law until 31 December 2013.

Withholding

If the Notes are held in a custody with or administrated by a German credit institution, financial services institution (including a German permanent establishment of such foreign institution), securities trading company or securities trading bank (the "Disbursing Agent"), the flat withholding tax at a rate of 25 per cent. (plus 5.5 per cent. solidarity surcharge thereon and, if applicable, church tax) will be withheld by the Disbursing Agent on interest payments and upon the sale, assignment or redemption of the Notes. The flat withholding tax is imposed on the interest payments and the excess of the proceeds from the sale, assignment or redemption (after the deduction of expenses incurred directly in connection with the sale, assignment or redemption) over the acquisition costs for the Notes, if the Notes were held in custody by the Disbursing Agent since their acquisition. The Disbursing Agent will provide for the set-off of losses with current investment income and capital gains from other securities.

If the Notes are not kept in a custodial account with a Disbursing Agent, the flat withholding tax will apply on interest paid by a Disbursing Agent upon presentation of a coupon (whether or not presented with the Note to which it appertains) to a holder of such coupon (other than a non-German bank or financial services institution) (Tafelgeschäft). In this case proceeds from the sale, assignment or redemption of the Notes will also be subject to the flat tax.

In general, no flat tax will be levied if the holder of a Note filed a withholding exemption certificate (Freistellungsauftrag) with the Disbursing Agent (in the maximum amount of the standard lump sum of € 801 - 87 -

(€ 1,602 for married couples)) to the extent the income does not exceed the maximum exemption amount shown on the withholding exemption certificate. Similarly, no withholding tax will be deducted if the holder of the Note has submitted to the Disbursing Agent a certificate of non-assessment (Nichtveranlagungsbescheinigung) issued by the competent tax office.

For private investors the withheld flat withholding tax is, in general, definitive. Private investors having a lower personal income tax rate may, upon application, include the capital investment income in their personal income tax return to achieve a lower tax rate. Investment income not subject to the flat withholding tax (e.g. since there is no Disbursing Agent) must be included into the personal income tax return and will be subject to the flat withholding tax rate of 25 per cent. (plus 5.5 per cent. solidarity surcharge thereon and, if applicable, church tax) upon assessment, unless the investor does not have a lower personal income tax rate and does not apply for such lower tax rate.

Business Investors

Interest payable on the Notes and capital gains or losses from the sale, assignment or redemption of the Notes are subject to corporation tax or income tax, as the case may be, (each plus solidarity surcharge thereon) in the hands of a business investor at the investor’s personal tax rate and have also to be considered for trade tax purposes.

Withholding tax, if any, including solidarity surcharge are credited as prepayments against the investors’s corporate or personal income tax liability and the solidarity surcharge in the course of the tax assessment procedure, i.e. the withholding tax is not definitive. Any potential surplus will be refunded. However, in general no withholding deduction will apply on the gains from the sale, assignment or redemption of the Notes if (i) the Notes are held by a corporation in terms of Sec. 43 para. 2 sentence 3 no. 1 German Income Tax Act or (ii) the proceeds from the Notes qualify as income of a domestic business and the investor notifies this to the Disbursing Agent by use of the officially required form according to Sec. 43 para. 2 sentence 3 no. 2 German Income Tax Act.

Non-Residents

Interest payable on the Notes, including Accrued Interest, if any, and capital gains are not subject to German taxation, unless (i) the Notes form part of the business property of a permanent establishment, including a permanent representative, or a fixed base maintained in Germany by the holder of the Notes; or (ii) the interest income otherwise constitutes German-source income. In the cases (i) and (ii) a tax regime similar to that explained above under "Tax Residents" applies.

Non-residents of Germany are, as a rule, exempt from German withholding tax on interest and the solidarity surcharge thereon. However, where the interest is subject to German taxation as set forth in the preceding paragraph and Notes are held in a custodial account with a Disbursing Agent, withholding tax is levied as explained above under "Tax Residents". If Notes are not kept in a custodial account with a Disbursing Agent and interest or proceeds from the sale, assignment or redemption of the Notes are paid by the Issuer or a Disbursing Agent upon presentation of a coupon to a holder of such coupon (other than a non-German bank or financial services institution) (Tafelgeschäft) flat withholding tax will also generally apply. The flat withholding tax may be refunded based upon an assessment to tax or under an applicable tax treaty.

Inheritance and Gift Tax

No inheritance or gift taxes with respect to any Note will arise under the laws of Germany, if, in the case of inheritance tax, neither the decedent nor the beneficiary, or, in the case of gift tax, neither the donor nor the donee, is a resident of Germany and such Note is not attributable to a German trade or business for which a permanent establishment is maintained, or a permanent representative has been appointed, in Germany. Exceptions from this rule apply to certain German expatriates.

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Other Taxes

No stamp, issue, registration or similar taxes or duties will be payable in Germany in connection with the issuance, delivery or execution of the Notes. Currently, net assets tax is not levied in Germany.

European Directive on the Taxation of Savings Income

Germany has implemented the EU Savings Tax Directive into national legislation by means of an Interest Information Regulation (Zinsinformationsverordnung, ZIV) in 2004. Starting on 1 July 2005, Germany has therefore begun to communicate all payments of interest on the Notes and similar income to the beneficial owners Member State of residence if the instruments have been kept in a custodial account with a Disbursing Agent.

EU Savings Tax Directive

Under the EU Savings Tax Directive each EU Member State must require paying agents (within the meaning of the EU Savings Tax Directive) established within its territory to provide to the competent authority of this state details of the payment of interest made to any individual resident in another EU Member State as the beneficial owner of the interest. The competent authority of the EU Member State of the paying agent is then required to communicate this information to the competent authority of the EU Member State of which the beneficial owner of the interest is a resident.

For a transitional period, Austria, Belgium and Luxembourg may opt instead to withhold tax from interest payments within the meaning of the EU Savings Tax Directive at a rate of 20 per cent. since 1 July 2008, and of 35 per cent. from 1 July 2011.

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SUBSCRIPTION AND SALE

The Issuer has agreed in an agreement to be signed prior to the Issue Date to sell to the Managers, and the Managers have agreed, subject to certain customary closing conditions, to purchase, the Notes on the Issue Date. The relevant Issue Price will be published in the Pricing Notice. Proceeds to the Issuer will be net of commissions of up to 0.40 per cent. of the principal amount of the relevant Notes payable to the Managers. The Issuer has furthermore agreed to reimburse the Managers for certain expenses incurred in connection with the issue of the Notes.

The Managers are entitled, under certain circumstances, to terminate the agreement reached with the Issuer. In such event, no Notes will be delivered to investors. Furthermore, the Issuer has agreed to indemnify the Managers against certain liabilities in connection with the offer and sale of the Notes.

Offer of the Notes

Offer Period and determination of Pricing Details

The relevant Notes will be offered to investors by the Joint Lead Managers during an offer period which will commence on or around 16 September 2010 and which will end on or around 22 September 2010. The Notes may also be publicly offered after the end of the offer period subject to applicable laws and regulations. During the offer period investors may submit orders to the Joint Lead Managers. The relevant Issue Price, the relevant Rate of Interest, the relevant number of Notes to be issued, the relevant aggregate principal amount of the issue, (and on that basis the relevant net proceeds) and the relevant yield (based on the calculation as described under "General Information - Yield" above) will be determined on the basis of the orders received by the Joint Lead Managers on the pricing date which is expected to be on or about 16 September 2010 (the "Pricing Date"). The relevant number of Notes to be issued and the relevant aggregate principal amount will be determined on the basis of the number and the volume of orders which offer a yield acceptable to the Issuer. Such information as well as the results of the offer and the yield will be included in a notice which will be filed with the CSSF and published on the website of the Luxembourg Stock Exchange (www.bourse.lu) after the date of pricing and prior to the Issue Date (the "Pricing Notice"). Any onsale of Notes will be subject to market conditions. Should the Issuer and the Joint Lead Managers determine any shortening or extension of the offer period, which could be the result of changing market conditions, such changes will be notified in the same manner as the pricing details will be published.

For the avoidance of doubt, the Issuer will either issue the 2015 Notes or the 2017 Notes. After the pricing of the Notes (i.e. on or around 16 September 2010), the Issuer will decide which tranche of Notes (i.e. the 2015 Notes or the 2017 Notes) will be issued.

Notification and Public Offer

The Issuer has requested the CSSF for a Notification of the Prospectus into Germany, Austria and The Netherlands. The Issuer may request the CSSF to provide competent authorities in additional host member states within the European Economic Area with a Notification.

The relevant Notes will be sold to institutional investors and retail investors in compliance with the public offer restrictions in force. A public offer of the relevant Notes will be made in Luxembourg, Germany, Austria and The Netherlands following the effectiveness of the Notification of the Prospectus by the CSSF.

Conditions and technical details of the Offer

The following sets out details of the offer which is required to comply with the requirements of the applicable prospectus regulation. There are no conditions to which the offer is subject. Prior to the Pricing Date, the Joint Lead Managers will open an order book. The Joint Lead Managers will invite investors to provide offers to purchase Notes using the information system Bloomberg or any other commonly used information systems. Upon such invitation, purchase orders of investors will be made through, and investors may submit their offers to buy Notes, - 90 - using the information system Bloomberg or any other commonly used information systems. Any offer made by investors will specify a minimum credit spread and the number of Notes the relevant investor is willing to purchase. Following the publication of the Pricing Notice, the Joint Lead Managers will offer the relevant Notes upon request through banking institutions in Luxembourg, Germany, Austria and The Netherlands.

Subscription rights for the Notes will not be issued. Therefore, there are no procedures for the exercise of any right of pre-emption, the negotiability of subscription rights and the treatment of subscription rights not exercised.

Any investor who has submitted an order in relation to the relevant Notes whose order is accepted will receive a confirmation by electronic mail, fax or through commonly used information systems relating to the respective allotment of the relevant Notes. Before an investor receives a confirmation from the Joint Lead Managers or from a person acting on behalf of the Joint Lead Managers that its purchase order for the relevant Notes has been accepted, the investor may reduce or withdraw its purchase orders. Any investor will receive relating to the respective allotment of the Notes a confirmation relating to the results of the offer. There is no minimum or maximum amount of Notes to be purchased. Investors may place offers to purchase Notes in any amount.

Confirmation in relation to an order and allotments

Following the pricing of the Notes and confirmation which orders have been accepted and which amounts have been allotted to particular investors, the Issue Date, which is expected to be 22 September 2010, will be determined and included in the Pricing Notice. Delivery and payment of the relevant Notes will be made within six business days after the Pricing Date of the Notes and the confirmation of the allotment to investors.

Charges and costs relating to the Offer

The Issuer will not charge any costs, expenses or taxes directly to any investor. Investors must inform themselves about any costs, expenses or taxes in connection with the Notes which are generally applicable in their respective country of residence, including any charges their own depository banks charge them for purchasing or holding securities.

Method of determination of the Issue Price and the Rate of Interest

The Rate of Interest and the Issue Price for the Notes will be determined at the time of pricing on the basis of a yield which is determined by adding a credit spread to the level of the Midswaps at the time of pricing. The credit spread will be determined on the basis of the orders received and confirmed by the Joint Lead Managers. Orders will specify a minimum credit spread and may only be confirmed at or above such credit spread. The level of the Midswaps will be determined as the average yield of the bid and ask prices of Interest-Swap Transactions ("Midswaps") with a maturity similar to the maturity of the relevant Notes shown on the Reuters page ICAPEURO or on any other screen page which is conventionally used to price Eurobond transactions at the time of pricing. The resulting yield will be used to determine the relevant Issue Price (which is expected to be less than par) and the relevant Rate of Interest (which is expected to be a percentage figure which can be evenly divided by 1/8 of a full per cent. and which will be correspondingly higher if a higher Issue Price is determined and which will be correspondingly lower if a lower Issue Price is determined), all to correspond to the yield which reflects the level of the Midswaps and the credit spread. In the event that the figures for the relevant Midswaps shall not be shown as set out above and the relevant figures shall be determined in a manner which banks and other institutional market participants apply at that time. The resulting figure will represent the yield of the Notes and such yield will be used to determine the relevant rate of interest and the relevant Issue Price.

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SELLING RESTRICTIONS

General

Each of the Managers has agreed not to take any action and will not take any action in any jurisdiction that would permit a public offering of the Notes, or possession or distribution of any offering material in relation thereto, in any country or jurisdiction where action for that purpose is required, except as provided below. Each of the Managers will comply, to the best of its knowledge and belief, with all applicable laws and regulations (including any amendments, changes or modifications thereto from time to time) in each country or jurisdiction in which it purchases, offers, sells or delivers the Notes or has in its possession or distribute such offering material and will obtain any consent, approval or permission required by it for the purchase, offer, sale or delivery by it in each such country or jurisdiction, in all cases at its own expense, and the other Managers shall have no responsibility therefor. The Managers have not represented that the Notes may at any time lawfully be sold in compliance with any applicable laws and regulations in any jurisdiction, or pursuant to any exemption thereunder, or assume any responsibility for facilitating such sale.

United States

The Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act ("Regulation S").

The Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to a United States person, except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code of 1986 and regulations thereunder.

The Managers have agreed that, they will not offer, sell or deliver the Notes (a) as part of their distribution at any time or (b) otherwise until 40 days after the later of the commencement of the offering and the Issue Date within the United States or to, or for the account or benefit of, U.S. persons and that they will have sent to each dealer to which they sell any Notes during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes within the United States or to, or for the account or benefit of, U.S. persons. Terms used in this paragraph have the meanings given to them by Regulation S.

In addition, until 40 days after the commencement of the offering, an offer or sale of the Notes within the United States by any dealer that is not participating in the offering may violate the registration requirements of the Securities Act.

The Notes will be issued in accordance with the provisions of U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D) (the "D Rules"). Each Manager has represented and agreed that:

(i) except to the extent permitted under the D Rules, (i) it has not offered or sold, and during a 40-day the restricted period will not offer or sell, Notes in bearer form to a person who is within the United States or its possessions or to a United States person, and (ii) such Manager has not delivered and will not deliver within the United States or its possessions definitive Notes in bearer form that are sold during the restricted period;

(ii) it has and throughout the restricted period will have in effect procedures reasonably designed to ensure that its employees or agents who are directly engaged in selling Notes in bearer form are aware that such Notes may not be offered or sold during the restricted period to a person who is within the United States or its possessions or to a United States person, except as permitted by the D Rules;

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(iii) if such Manager is a United States person, it has represented that it is acquiring the Notes in bearer form for purposes of resale in connection with their original issuance and if such Manager retains Notes in bearer form for its own account, it will only do so only in accordance with the requirements of U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D) (6); and

(iv) with respect to each affiliate that acquires Notes in bearer form from such Manager for the purposes of offering or selling such Notes during the restricted period, such Manager either (a) has repeated and confirmed the representations and agreements contained in sub-clauses (i), (ii) and (iii) on such affiliate's behalf or (b) has agreed that it will obtain from such affiliate for the benefit of the Issuer the representations and agreements contained in sub-clauses (i), (ii) and (iii).

Terms used in the above paragraph have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder, including the D Rules.

Public Offer Selling Restriction Under the Prospectus Directive

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), each Manager has represented and agreed that with effect from, and including, the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date") it has not made and will not make an offer of the Notes to the public in that Relevant Member State, except that it may, with effect from, and including, the Relevant Implementation Date, make an offer of the Notes to the public in that Relevant Member State:

(a) if the Notes specify that an offer of those Notes may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State (a "Non-exempt Offer"), following the date of publication of a prospectus in relation to such Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State in accordance with the Prospectus Directive;

(b) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(c) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than Euro 43,000,000 and (3) an annual net turnover of more than Euro 50,000,000, as shown in its last annual or consolidated accounts; or

(d) at any time to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant Manager or Managers nominated by the Issuer for any such offer; or

(e) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Notes referred to in (b) to (e) above shall require an Issuer or any Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression "offer of the Notes to the public" in relation to the Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that member state by any measure implementing the Prospectus Directive in that member state and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

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Selling Restrictions Addressing Additional United Kingdom Securities Laws

Each Joint Lead Manager has represented and agreed that:

(i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which section 21 (1) of the FSMA does not apply to the Issuer; and

(ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom.

Selling Restrictions Addressing Italian Securities Laws

This Prospectus has not registered pursuant to Italian securities legislation and, accordingly, each Joint Lead Manager has represented and agreed that it has not offered or sold, and will not offer or sell, any Notes in the Republic of Italy in a solicitation to the public, and that sales of the Notes in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulation.

Each of the Joint Lead Managers has represented and agreed that it will not offer, sell or deliver any Notes or distribute copies of any document relating to the Notes in the Republic of Italy except:

(a) to qualified investors (investitori qualificati), as defined under Article 34-ter, paragraph 1, letter b), of CONSOB Regulation No. 11971 of 14 May 1999, as amended (the "Regulation 11971/1999"); or

(b) in any other circumstances where an express exemption from compliance with the rules on offers of securities to be made to the public applies, as provided under Article 100 of Legislative Decree No. 58 of 24 February 1998 (the "Financial Services Act") and Article 34-ter, paragraph 1, of Regulation 11971/1999.

Please also note that, in accordance with Article 100-bis of the Financial Services Act, where no exemption under (b) above applies, the subsequent distribution of the Notes on the secondary market in the Republic of Italy must be made in compliance with the rules on offers of securities to be made to the public provided under the Financial Services Act and Regulation 11971/1999. Failure to comply with such rules may result, inter alia, in the sale of such Notes being declared null and void and in the liability of the intermediary transferring the notes for any damages suffered by the investors.

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ADDRESS LIST

THE ISSUER

Rheinmetall AG Rheinmetall Platz 1 40476 Düsseldorf Germany

JOINT LEAD MANAGERS

Crédit Agricole SA Deutsche Bank AG, London Branch 9 Quai du Président Paul Doumer Winchester House 92920 Paris La Défense 1 Great Winchester Street France London EC2N 2DB United Kingdom

UniCredit Bank AG Arabellastraße 12 81925 Munich Germany

PRINCIPAL PAYING AGENT

Deutsche Bank Aktiengesellschaft Grosse Gallusstrasse 10-14 60272 Frankfurt am Main Germany

PAYING AGENT

Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer 1115 Luxembourg The Grand Duchy of Luxembourg

LUXEMBOURG LISTING AGENT

Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer 1115 Luxembourg The Grand Duchy of Luxembourg

LEGAL ADVISERS

To the Issuer as to German Law To the Managers as to German Law Simmons & Simmons White & Case LLP MesseTurm Bockenheimer Landstrasse 20 Friedrich-Ebert-Anlage 49 60323 Frankfurt am Main 60308 Frankfurt am Main Germany Germany

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AUDITORS TO THE ISSUER

PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft Moskauer Strasse 19 40227 Düsseldorf Germany

FR: 1689916_3

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