EX-4.1 Master Separation Agreement



Table of Contents







Exhibit
4.1




MASTER SEPARATION AGREEMENT



between



AB ELECTROLUX (publ)



and



HUSQVARNA AB





 














TABLE OF CONTENTS




									








Table of Contents




Table of Contents




	 	 	 	 	 	 	 
	1.

	 	Introduction
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	Definitions
	 	 	2	 
	 
	 	 	 	 	 	 
	3.

	 	Business Separation
	 	 	6	 
	 
	 	 	 	 	 	 
	4.

	 	Ancillary Agreements
	 	 	11	 
	 
	 	 	 	 	 	 
	5.

	 	No Representations and Warranties; Exclusive Remedy
	 	 	12	 
	 
	 	 	 	 	 	 
	6.

	 	Indemnification
	 	 	12	 
	 
	 	 	 	 	 	 
	7.

	 	Covenants
	 	 	15	 
	 
	 	 	 	 	 	 
	8.

	 	Miscellaneous
	 	 	18	 






 









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MASTER SEPARATION AGREEMENT



This Master Separation Agreement is entered into as of the 9th day of September, 2005,
by and between





	(i)	 	AB ELECTROLUX (publ), a company incorporated under the laws of the Kingdom of Sweden
(“Electrolux”); and
	 
	(ii)	 	HUSQVARNA AB, a company incorporated under the laws of the Kingdom of Sweden and a direct,
wholly-owned subsidiary of Electrolux (“Husqvarna”).




Electrolux and Husqvarna are hereinafter collectively referred to as the “Parties”, and
individually as a “Party”.





	1.	 	Introduction
	 
	1.1	 	WHEREAS, Electrolux’s Outdoor Products operation consists of the development,
manufacturing, distribution and marketing of: (i) professional and consumer products for primarily outdoor use, including but not limited
to chainsaws, grass- and brush cutters, hedge trimmers, tractors, lawn mowers, and
riders; and (ii) products for use in the construction industry, including but not
limited to power cutters and diamond tools (collectively, the “Outdoor Business”).
	 
	1.2	 	WHEREAS, the board of directors of Electrolux has concluded its intention to spin-off the
Outdoor Business to the Electrolux shareholders in a so called Lex Asea transaction, which
Demerger (as defined below) is subject to approval by the general meeting of the shareholders
of Electrolux during 2006.
	 
	1.3	 	WHEREAS, the Parties desire in order to facilitate the Demerger to consolidate certain
entities, assets, liabilities and operations of the Outdoor Business (with such additions and
exceptions as may be determined by the Parties pursuant hereto) into a group with Husqvarna as
the ultimate parent, with all other entities, assets, liabilities and operations of Electrolux
(collectively, the “Indoor Business”) retained by or transferred to Electrolux and those of
its Affiliates (as defined below) that will remain as the Indoor Group (as defined below)
following the Demerger.
	 
	1.4	 	WHEREAS, it is the intention of the Parties that, as provided by or pursuant to this
Agreement (as defined below), the Indoor Group (as defined below) shall have the benefit of
and bear the responsibility for the Indoor Business and the Outdoor Group (as defined below)
shall have the benefit of and bear the responsibility for the Outdoor Business.




 









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	1.5	 	WHEREAS, the Parties acknowledge that, (i) each of the Indoor Group and the Outdoor Group may
for a transitional period after the Demerger be dependent upon certain transitional services
provided by the other Group under separate transitional services agreements; and (ii) there
are certain other issues arising out of the Corporate Restructuring Transactions (as defined
below) and the Demerger contemplated herein that require separate agreements between the
Parties.
	 
	1.6	 	WHEREAS, the Parties acknowledge that this Agreement constitutes an initial step in the
process of defining the separation of the Indoor Business and the Outdoor Business and is
subject to supplementation prior to the Demerger.
	 
	1.7	 	NOW THEREFORE, the Parties hereto hereby agree on the following terms and conditions for the
separation of the Indoor Business and the Outdoor Business.
	 
	2.	 	Definitions
	 
	2.1	 	In this Agreement, the following terms shall have the following meanings:





	 	 	 
	“Action”

	 	means any action, suit, arbitration, inquiry,
proceeding, order or investigation by or before
any governmental authority or any arbitral
tribunal.
	 
	 	 
	“Affiliate”

	 	means, when used with respect to a specified
person, another person that directly, or
indirectly through one or more intermediaries,
controls or is controlled by or is under common
control with the person specified.
	 
	 	 
	“Agreement”

	 	means this Master Separation Agreement by and
between Electrolux and Husqvarna, including each
Appendix attached hereto, as it or they may be
amended from time to time pursuant to Section 8.6.
	 
	 	 
	“Ancillary Agreements”

	 	means all of the written agreements or other
arrangements (other than this Agreement) entered
into by the Parties or any other entities that are
members of the Indoor Group or the Outdoor Group
in connection with the Corporate Restructuring
Transactions or any other transaction contemplated
hereby, including without limitation the Corporate
Restructuring Documents and the agreements
referred to in or entered into pursuant to Section
4.1.






 









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	“Corporate Restructuring
Documents”

	 	means, collectively, the written agreements,
deeds, covenants, assignments, instruments and
other documents to be issued or entered into to
give effect to the Corporate Restructuring
Transactions.
	 
	 	 
	“Corporate Restructuring
Transactions”

	 	means, collectively, each of the Transfers set
forth in Appendix 2.1 hereto, as such appendix
may be amended and revised from time to time as
agreed between the Parties prior to the Demerger.
	 
	 	 
	“Demerger”

	 	means the spin-off of Husqvarna shares to the
Electrolux shareholders in a so-called Lex Asea
transaction after completion of the Corporate
Restructuring Transactions.
	 
	 	 
	“Demerger Date”

	 	means the record date for the Demerger.
	 
	 	 
	“Electrolux”

	 	is defined in the preamble of this Agreement.
	 
	 	 
	“Electrolux Group”

	 	means Electrolux and its Affiliates from time to
time from the date hereof until, but not
following, the Demerger Date.
	 
	 	 
	“Husqvarna”

	 	is defined in the preamble to this Agreement.
	 
	 	 
	“Indoor Assets”

	 	means any businesses, assets and rights of the
Electrolux Group, the Indoor Group or the Outdoor
Group, as the case may be, that are not Outdoor
Assets, including, without limitation, the
businesses, assets and rights Related To the
Indoor Business.
	 
	 	 
	“Indoor Business”

	 	is defined in Section 1.3.
	 
	 	 
	“Indoor Group”

	 	means Electrolux and the corporations,
partnerships, joint ventures, investments and
other entities that represent direct or indirect
equity investments of Electrolux upon completion
of the Corporate Restructuring Transactions and
from time to time thereafter, other than the
Outdoor Group.
	 
	 	 
	“Indoor Liabilities”

	 	means any and all Liabilities related to, arisen
or arising out of, incurred or incurring in, or
otherwise concerning the past, present and future
business or operation of the Electrolux Group, the
Indoor Group or the Outdoor Group, as the case may
be, that are not Outdoor Liabilities.
	 
	 	 
	“Intellectual Property”

	 	means any intellectual property rights, including
patents, trademarks, designs, service marks,
utility models, copyrights and related rights,
business names, domain names, trade secrets and
know how, whether registered or registerable, and
including any registrations or applications






 









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	 	 	for
registrations of any of the foregoing.
	 
	 	 	 	 
	“Liabilities”	 	means any and all debts, liabilities and
obligations, whether accrued or fixed, known or
unknown, absolute or contingent, matured or
unmatured, or determined, determinable or
undeterminable.
	 
	 	 	 	 
	“Losses”	 	means all direct, indirect or consequential
losses, claims, deficits, damages, penalties,
fines, costs and expenses (including settlement
costs and legal, accounting and other costs and
expenses for investigating or defending any
Actions or threatened Actions).
	 
	 	 	 	 
	“Outdoor Assets”	 	means all operating assets according to the
Electrolux accounting manual that are Related To
the Outdoor Business, exclusive of financial
assets, plus the following insofar as they are
Related To the Outdoor Business:
	 
	 	 	 	 
	 

	 	(i)
	 	all Intellectual Property and other
intangibles;
	 
	 

	 	(ii)
	 	all contracts and agreements for the purchase
of materials, parts and supplies or for the sale
of products and all other contracts and
agreements, as well as leases of personal property
and collective bargaining agreements; and
	 
	 

	 	(iii)
	 	to the extent permitted by applicable law,
all books and records, including, without
limitation, customer lists.
	 
	 	 	 	 
	“Outdoor Business”	 	is defined in Section 1.1.
	 
	 	 	 	 
	“Outdoor Group”	 	means Husqvarna and the corporations,
partnerships, joint ventures, investments and
other entities that represent direct or indirect
equity investments of Husqvarna upon completion of
the Corporate Restructuring Transactions.
	 
	 	 	 	 
	“Outdoor Liabilities”	 	means operating Liabilities, non-interest-bearing
provisions and deferred tax Liabilities according
to the Electrolux accounting manual that are
Related To the Outdoor Business, plus all other
Liabilities Related To the past, present or future
business or operation of the Outdoor Business.
	 
	 	 	 	 
	“Related To”	 	means predominantly incurred by, arising in, used
by or belonging to, where “predominantly” shall
mean to an extent of more than 50 percent.






 









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	“Restructuring Closing”

	 	means the completion of any Corporate
Restructuring Transaction contemplated herein in
accordance with the terms of this Agreement.
	 
	 	 
	“Securities Liabilities”

	 	means any and all Losses and Liabilities relating
to any violations or alleged violations of any
applicable securities laws or stock exchange
regulations or other similar law or regulations.
	 
	 	 
	“Third Party Claim”

	 	is defined in Section 6.2.1.
	 
	 	 
	“Transfer”

	 	means any sale and purchase, distribution,
transfer, split, contribution, assignment or other
similar transaction. “To Transfer” means,
correspondingly, to sell, distribute, transfer,
split off, contribute, assign or to undertake any
other such transaction.
	 
	 	 
	“Transferee”

	 	means a transferee pursuant to any Corporate
Restructuring Transaction. In the event of
corporate splits and similar transactions where a
legal entity is divided into two or more legal
entities, the Transferee with respect to the
Outdoor Business shall be the entity or entities
receiving the Outdoor Assets and the Outdoor
Liabilities and the same shall apply, mutatis
mutandis, with respect to the Transferee of the
Indoor Business.
	 
	 	 
	“Transferor”

	 	means a transferor pursuant to any Corporate
Restructuring Transaction. In the event of
corporate splits and similar transactions where a
legal entity is divided into two or more legal
entities, the Transferor with respect to the
Outdoor Business shall be the entity or entities
not receiving the Outdoor Assets and Outdoor
Liabilities and the same shall apply, mutatis
mutandis, with respect to the Transferor of the
Indoor Business.
	 
	 	 
	“Transferred Assets”

	 	means any Indoor Assets or Outdoor Assets subject
to Transfer from a Transferor to a Transferee to
give effect to the Corporate Restructuring
Transactions.
	 
	 	 
	“Transferred Entities”

	 	means the corporations, partnerships and other
entities, or interests therein, subject to
Transfer from a Transferor to a Transferee to give
effect to the Corporate Restructuring
Transactions.
	 
	 	 
	“Transferred Liabilities”

	 	means any Indoor Liabilities or Outdoor
Liabilities subject to Transfer from a Transferor
to a Transferee to give effect to the Corporate
Restructuring Transactions.






 









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	“Transitional Services
Agreements”

	 	means all of the written agreements or other
arrangements (other than this Agreement and any
leases or sub-leases entered into pursuant to
Section 3.9) entered into by the Parties or any
other members of the Indoor Group or the Outdoor
Group for the purpose of providing transitional
services during the Transitional Period in order
to facilitate and support a smooth transition for
the Indoor Business and the Outdoor Business after
the Demerger.
	 
	 	 
	“Transitional Period”

	 	means a period consisting of not more than 12
consecutive months calculated from the Demerger
Date, subject to Section 4.1.1.







	2.2	 	References in this Agreement to any gender include references to all genders, and references
in this Agreement to the singular include references to the plural and vice versa. References
in this Agreement to a Party or other person include their respective permitted successors and
assigns.
	 
	3.	 	Business Separation
	 
	3.1	 	Corporate Restructuring Transactions
	 
	3.1.1	 	On and subject to the terms and conditions of this Agreement, the Parties shall, or shall
cause the relevant members of the Indoor Group and the Outdoor Group to, take such actions as
are necessary to cause, effect and consummate the Corporate Restructuring Transactions on or
prior to the Demerger Date.
	 
	3.1.2	 	The Corporate Restructuring Transactions shall entail the Transfer from the respective
Transferors to the respective Transferees of their right, title and interest to, and the
assumption or acquisition by the respective Transferees of that right, title and interest to
the Transferred Assets, the Transferred Entities, and the Transferred Liabilities.
	 
	3.1.3	 	To the extent possible and appropriate, the Corporate Restructuring Transactions shall be
effected pursuant to Corporate Restructuring Documents based on the forms attached hereto as
Appendix 3.1.3, in each case modified as necessary and appropriate to adhere to the
laws and regulations of the jurisdictions concerned and to reflect the nature of the relevant
Corporate Restructuring Transaction. The Corporate Restructuring Transactions shall be subject
to and reference this Master Separation Agreement and the terms hereof shall apply, mutatis
mutandis, as between the parties to those Corporate Restructuring Transactions.




 









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	3.2	 	Capitalization Prior to Demerger
	 
	 	 	Anything else in this Agreement to the contrary notwithstanding,
financial assets and liabilities shall prior to the Demerger be
Transferred and allocated between the respective Transferors and
Transferees within the Electrolux Group in accordance with the
separate instructions of Electrolux Group Treasury.
	 
	3.3	 	Shared Assets
	 
	3.3.1	 	The Parties agree that for purposes of the Corporate Restructuring Transactions and the
Demerger:






	 	(i)	 	any material tangible asset, which is an Outdoor Asset, but which is
also used to a material extent by, or necessary for, the Indoor Business; and
	 
	 	(ii)	 	any material tangible asset, which is an Indoor Asset, but which is
also used to a material extent by, or necessary for, the Outdoor Business;






	 	 	shall to the extent reasonably possible be appropriately split at the time of the
relevant Corporate Restructuring Transaction on commercially reasonable terms between
the relevant members of the Indoor Group and the Outdoor Group.
	 
	3.3.2	 	To the extent that any assets referred to in Section 3.3.1 may not be reasonably split, the
Parties shall, or shall cause their relevant Affiliates to: (i) enter into an appropriate
Transitional Services Agreement or lease or sub-lease of real property with respect to such
assets; or (ii) make any necessary and appropriate back-to-back arrangements in accordance
with Section 3.5.1.
	 
	3.4	 	Non-Transfer
	 
	3.4.1	 	Nothing in this Agreement or the Ancillary Agreements shall be deemed to require the
Transfer of any Transferred Assets or the assumption of any Transferred Liabilities, which by
their terms or operation of law cannot be Transferred or assumed. The Parties shall, however,
pursuant to Section 7.3, cooperate to seek to obtain any necessary consents or approvals for
the Transfer of all Transferred Assets and Transferred Liabilities contemplated to be
Transferred pursuant to this Agreement.
	 
	3.4.2	 	Nothing in this Agreement or the Ancillary Agreements shall be deemed to constitute an
assignment or an attempt to assign any contract without the consent of the counterparty to
such contract if that would constitute a breach




 









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	 	 	thereof or adversely affect the rights of any member of the Indoor Group or the Outdoor
Group under such contract.
	 
	3.5	 	Back-To-Back Arrangements
	 
	3.5.1	 	In the event that any Transfer of Transferred Assets or Transferred Liabilities under this
Agreement or the relevant Ancillary Agreements has not been consummated as set forth in
Section 3.4.1, the member of the Indoor Group or the Outdoor Group retaining such Transferred
Asset or Transferred Liability shall hold or retain it for the use and benefit or account of
the relevant member of the Outdoor Group or the Indoor Group, at the latter’s expense, and
take such other action as may be reasonably requested by the relevant member of the other
Group in order to place it, insofar as is reasonably possible, in the same position as would
have existed had such Transferred Asset or Transferred Liability been Transferred or assumed
as contemplated in this Agreement or an Ancillary Agreement.
	 
	3.5.2	 	In the event that any Transfer of a contract under this Agreement or the relevant Ancillary
Agreements has not been consummated as set forth in Section 3.4.2, the Parties shall
cooperate with each other to effect any arrangement designed reasonably to provide for the
relevant members of the Indoor Group or the Outdoor Group the outcome of, and to permit such
members of the Indoor Group or the Outdoor Group to assume any Liabilities and perform any
obligations under, any such contract to the extent Related To their respective Businesses.
	 
	3.5.3	 	As and when any such Transferred Asset or Transferred Liability becomes transferable or
assumable, such Transfer shall be effected.
	 
	3.6	 	Employees and Employee Benefits
	 
	3.6.1	 	Any employee of the Electrolux Group who works more than 50 % for the Outdoor Business (an
“Outdoor Employee”) shall for purposes of this Agreement and the Corporate Restructuring
Documents be considered to belong to the Outdoor Group, and any employee of the Electrolux
Group who works more than 50 % for the Indoor Business (an “Indoor Employee”) shall
correspondingly be considered to belong to the Indoor Group. To the extent that it is unclear
whether an employee is an Outdoor Employee or an Indoor Employee, the Parties shall make a
reasonable determination on a case-by-case basis.
	 
	3.6.2	 	The Parties shall, or shall cause their respective Affiliates to, take the reasonably
necessary and appropriate measures under the laws and regulations of their relevant
jurisdictions to cause the allocation of employees described in




 









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	 	 	Section 3.6.1 in connection with the appropriate Corporate Restructuring Transactions.
	 
	3.6.3	 	Electrolux shall be responsible for the Indoor Employees and shall indemnify Husqvarna for
any Liabilities Relating To an Indoor Employee. Husqvarna shall be responsible for the Outdoor
Employees and shall indemnify Electrolux for any Liabilities Relating To an Outdoor Employee.
Each Party undertakes to procure the relevant transfer of all Employees to its Group who are
formally employed by the other Party.
	 
	3.6.4	 	Prior to the Demerger, the Parties shall procure, subject to any legal requirements or
collective bargaining agreements, that retirement and other post-employment benefits
obligations arising in respect of service up to the relevant Restructuring Closings, shall be
separated and allocated between the Indoor Group and the Outdoor Group, and shall determine
how any assets in separate funds, foundations or insurance contracts relating to these shall
be treated.
	 
	3.6.5	 	The Parties shall reasonably agree, prior to the Demerger Date, on an appropriate allocation
of personnel working at the central headquarters level or any shared function and of
obligations with respect to their respective benefits.
	 
	3.7	 	Intellectual Property
	 
	3.7.1	 	The Parties will on or prior to the Demerger Date enter into one or more agreements
governing the allocation of the Electrolux Group’s rights to Intellectual Property pertaining
to the Outdoor Business.
	 
	3.7.2	 	These intellectual property agreements will include, inter alia, provisions on assignment
and licensing between the Indoor Group and the Outdoor Group, handling of Intellectual
Property litigations, opposition proceedings and Intellectual Property agreements with third
parties.
	 
	3.7.3	 	Under these intellectual property agreements, the Outdoor Group will acquire the Electrolux
Group’s existing rights to certain trademarks including, but not limited to, HUSQVARNA, FLYMO,
WEED EATER, POULAN, PARTNER, JONSERED, DIAMANT BOART and DIMAS, as well as the Electrolux
Group’s patents, utility models, designs, know-how, copyrights and domain names that pertain
to the Outdoor Business. The Indoor Group will be granted a perpetual, world-wide, royalty
free and exclusive license to use the trademark HUSQVARNA for the relevant field of use by
Indoor Group.
	 
	3.7.4	 	As set out in the intellectual property agreements, the Outdoor Group will discontinue any
and all use of the trademarks ELECTROLUX, LUX or any




 









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other trademarks belonging to Electrolux in connection with the Demerger including, but
not limited to, trademarks, domain names, and in connection with double-branding.




	3.8	 	Insurance
	 
	3.8.1	 	All of Electrolux insurance policies covering the Outdoor Group are as of the date hereof in
full force and effect and will be in full force and effect on the existing terms and
conditions until an appropriate insurance program for the Outdoor Group has been established
prior to the Demerger Date.
	 
	3.8.2	 	Prior to the Demerger Date, Husqvarna shall establish a program of risk financing (utilizing
commercial insurance, self-insurance and captive arrangements as necessary and appropriate) to
provide coverage substantially similar to that currently existing with respect to the
Electrolux Group.
	 
	3.8.3	 	The Parties agree that the existing portfolio of risks related to the Outdoor Business held
in captive insurance companies of the Indoor Group shall on or prior to the Demerger Date be
directly (or indirectly through reinsurance arrangements or similar) transferred on an arm’s
length basis to the Outdoor Group or otherwise removed from the Indoor Group captive insurance
companies.
	 
	3.9	 	Lease and Sub-Leases of Real Property
	 
	 	 	In connection with the Corporate Restructuring Transactions, the relevant members of
the Indoor Group and the Outdoor Group shall enter into mutually agreeable lease
agreements, sub-leases and lease assignments on an arm’s lengths basis allocating the
use of owned and/or leased real property for the period commencing when the relevant
Corporate Restructuring Transaction has been carried out. The Parties may also, prior
to the Demerger Date, cause members of the Indoor Group and the Outdoor Group to enter
into leases, sub-leases and lease assignments even in those jurisdictions where no
Corporate Restructuring Transactions are carried out. Sub-leases shall to the greatest
extent possible pass through the relevant rights and obligations of the tenant under
the primary lease, and the landlord under the sub-lease shall have no duties to the
tenant under the sub-lease that go beyond the landlord’s rights as tenant under the
primary lease.
	 
	3.10	 	Restructuring Closing
	 
	3.10.1	 	The Restructuring Closings of the respective Corporate Restructuring Transactions shall take
place prior to the Demerger Date as instructed by Electrolux.




 









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	3.10.2	 	At each Restructuring Closing, the Parties shall cause the following events to take place,
as applicable:






	 	(i)	 	The respective Transferors and Transferees shall execute and
consummate the relevant Corporate Restructuring Documents;
	 
	 	(ii)	 	The respective Transferors and Transferees shall exchange any
documents in form and substance as may be reasonably requested for the proper
implementation of the contemplated transactions.






	3.10.3	 	The right, title, benefits, opportunities and interest in, along with the risk for, any
Transferred Entities and Transferred Assets, and the responsibility for any Transferred
Liabilities, shall pass from the respective Transferors to the respective Transferees as of
the Restructuring Closing of the respective Corporate Restructuring Transactions (or any
earlier effective date if so specified in the relevant Corporate Restructuring Document).
	 
	3.10.4	 	Following the completion of the Corporate Restructuring Transactions pursuant to this
Agreement, it is anticipated that the Outdoor Group shall have the structure set forth in
Appendix 3.10.4.
	 
	4.	 	Ancillary Agreements
	 
	4.1	 	Prior to the Demerger, Electrolux and Husqvarna shall enter into, or shall cause the
relevant members of the Indoor Group and the Outdoor Group, respectively, to enter into:
	 
	4.1.1	 	The Transitional Services Agreements. The terms and conditions of any Transitional Services
Agreements shall not be materially different from those which could be obtained from third
parties that are not Affiliates of the Parties through negotiations on an arm’s length basis.
Any Transitional Period may be extended beyond the 12-month period for non-management
services that are provided to and by entities doing business outside of the United States of
America subject to prior written agreement between the Parties;
	 
	4.1.2	 	A tax sharing and indemnity agreement, pursuant to which they shall (i) allocate liability
for certain taxes; (ii) each undertake to hold the other Party harmless and to indemnify such
other Party from any adverse tax effects after the Demerger Date caused by the acts or
omissions of the indemnifying party; and (iii) cooperate with each other in resolving issues
relating to taxable years ending before or including the date or dates of the Restructuring
Closings; notwithstanding anything herein to the contrary, the tax sharing and indemnity
agreement will exclusively govern the relationship between the parties thereto with respect to
tax matters;




 









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	4.1.3	 	The intellectual property agreements pursuant to Section 3.7;
	 
	4.1.4	 	Any agreements regarding employee benefits or employees pursuant to Sections 3.6.4 and
3.6.5;
	 
	4.1.5	 	Any agreements regarding insurance arrangements pursuant to Section 3.8; and
	 
	4.1.6	 	Any lease, sub-lease or lease assignment agreements pursuant to Section 3.9.
	 
	5.	 	No Representations and Warranties; Exclusive Remedy
	 
	5.1	 	Any and all Transfers pursuant to this Agreement and any Ancillary Agreements are
undertaken on an “as is, where is” basis and neither Party nor any of their Affiliates gives
any representation or warranty, expressed or implied (whether under the Swedish Sale of Goods
Act, as amended from time to time, or the local law equivalents thereof in other
jurisdictions, or otherwise), in this Agreement, any Ancillary Agreement or any other
agreement to be entered into pursuant hereto or thereto, or otherwise, including without
limitation (i) as to the value or freedom from encumbrances of, or any other matter (including
without limitation, merchantability or fitness) concerning any entities, shares, properties or
other assets or rights, or any Liabilities of any kind; or (ii) as to the legal sufficiency to
convey title to any of the foregoing of this Agreement, any Ancillary Agreement or any other
agreement to be entered into pursuant hereto or thereto.
	 
	5.2	 	The provisions of this Agreement and the Ancillary Agreements are in substitution for and
exclude all other representations, warranties or covenants in contract or at law (whether
under the Swedish Sale of Goods Act, as amended from time to time, or otherwise) or any other
undertakings with respect to the subject matter hereof or thereof. Neither Party nor any other
member of the Indoor Group or the Outdoor Group shall be liable in negligence, tort, in
contract, statute or otherwise at law, in relation to the other Party or Group at any time for
any damages, Losses or Liabilities except as expressly set forth in this Agreement or the
Ancillary Agreements. Both Parties expressly waives all rights to cancel, terminate or rescind
this Agreement after Demerger Date.
	 
	6.	 	Indemnification
	 
	6.1	 	Liability and Indemnification




 









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	6.1.1	 	As from the Demerger Date, Husqvarna, on behalf of the Outdoor Group, shall as between the
Parties be fully liable for any and all Liabilities, if and to the extent related to, arisen
or arising out of, incurred or incurring in or otherwise concerning the past, present and
future business or operation of the Outdoor Business, and shall indemnify and hold harmless
the Indoor Group from any and all Losses to the extent arising out of, by reason of or
otherwise in connection with (i) such Liabilities; (ii) any Liabilities of Husqvarna or other
members of the Outdoor Group under this Agreement and the Ancillary Agreements; (iii) any
Securities Liabilities arising out of events occurring after the Demerger Date and relating to
the Outdoor Group; and (iv) any Liabilities related to or arising out of the operations of
Husqvarna and its affiliates on or prior to Husqvarna’s acquisition by Electrolux.
	 
	6.1.2	 	As from the Demerger Date, Electrolux, on behalf of the Indoor Group, shall as between the
Parties be fully liable for any and all Liabilities, if and to the extent related to, arisen
or arising out of, incurred or incurring in or otherwise concerning the past, present and
future business or operation of the Indoor Business, and shall indemnify and hold harmless the
Outdoor Group from any and all Losses to the extent arising out of, by reason of or otherwise
in connection with (i) such Liabilities; (ii) any Liabilities of Electrolux or other members
of the Indoor Group under this Agreement and the Ancillary Agreements; (iii) any Securities
Liabilities arising out of events occurring before the Demerger Date and relating to the
Electrolux Group.
	 
	6.2	 	Procedures for Third Party Claims
	 
	6.2.1	 	If a Party becomes aware of any assessment, claim, Action or demand against it or any member
of its Group by any person who is not a member of the Indoor Group or the Outdoor Group
(hereinafter a “Third Party Claim”), as to which such Party is entitled to indemnification
from the other Party under Section 6.1 of this Agreement:






	 	(i)	 	the indemnified Party shall procure that written notice thereof is
given to the indemnifying Party as soon as reasonably practicable after it is
evident to the indemnified Party that the Third Party Claim may result in a claim
for compensation for Losses, provided, however, that any failure to give such
notice shall not affect the indemnified Party’s rights hereunder unless such
failure has been materially prejudicial to the indemnifying Party, and then only
to the extent of such prejudice; and provided, further, that for the purposes of
this Section 6.2, the Parties shall be deemed to have notice of those Third Party
Claims which are existing as of the date hereof or the Demerger Date.




 









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	 	(ii)	 	the indemnified Party shall:






	 
	 
	 	(a)	 	take such action and give such information
and access to personnel, premises, chattels, documents and records to
the indemnifying Party and the indemnifying Party’s advisers as the
indemnifying Party may reasonably request, as well as cause the
members of its Group to take such action and give such information
and assistance with respect thereto as the indemnifying Party may
reasonably require, all at the expense of the indemnifying Party;
	 
	 	(b)	 	not make any admission of liability,
agreement or compromise with any person, body or authority in
relation to any such Third Party Claim without prior consultation
with and the prior written agreement of the indemnifying party (such
agreement not to be unreasonably withheld or delayed); and
	 
	 	(c)	 	at the request in writing of the
indemnifying Party, allow the indemnifying Party to assume, at its
own expense, the sole conduct of such actions as the indemnifying
Party may deem appropriate in connection with any Third Party Claim
in the name of the indemnified Party, provided, however, that the
indemnified Party shall have the right to be informed of all
developments and, at its own expense, be present at all proceedings,
and provided, further, that the indemnifying Party shall settle or
compromise a Third Party Claim only if the indemnifying Party fully
indemnifies the indemnified Party for all Losses related to such
Third Party Claim.






	6.2.2	 	To the extent the indemnifying Party does not elect to assume conduct of proceedings
pursuant to Section 6.2.1(ii)(c), the indemnified Party may, subject to its duty to mitigate
its Loss, take such action as it sees fit with regard to such Third Party Claim, provided that
the indemnified Party shall ensure that the indemnifying Party is kept fully informed of any
actual or proposed developments (including any meetings) and shall on request be provided with
copies of all relevant correspondence and documentation.
	 
	6.2.3	 	Without prejudice to the generality of the foregoing, this Section 6.2 shall apply, mutatis
mutandis, to the currently pending Actions relating to the Parties, as set forth in
Appendix 6.2.3, and which the Parties agree shall be the responsibility of the Party
indicated thereon.
	 
	6.2.4	 	Anything in this Agreement to the contrary notwithstanding, in the event that one Party has
a material unindemnified interest in the outcome of a Third Party Claim, the Parties shall
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	 	 	settlement or disposition of such claim and no Party shall (i) make any admission of
liability, agreement or compromise with any person, body or authority in relation to
any such Third Party Claim; nor (ii) have the right to assume the sole conduct of any
actions; without prior consultation with and the prior written agreement of the other
Party (such agreement not to be unreasonably withheld or delayed).
	 
	6.3	 	Procedures for Other Claims
	 
	 	 	Any claim on account of an indemnifiable Loss that does not result
from a Third Party Claim shall be asserted by written notice given by
the indemnified Party to the indemnifying Party. If the indemnifying
Party does not respond or rejects the claim in whole or in part within
fifteen (15) business days after the receipt of such notice, the
indemnified Party shall be free to pursue such remedies as are
available under this Agreement.
	 
	6.4	 	Limitations
	 
	6.4.1	 	The indemnification pursuant to Section 6.1 shall be appropriately adjusted taking into
consideration the tax effect in order to provide the indemnified Party with full compensation
for any Loss, neither more nor less, on an after-tax basis.
	 
	6.4.2	 	A Party shall only be indemnified under Section 6.1 if each individual indemnifiable claim
(or any series of related claims with respect to the same or substantially the same facts or
circumstances) for Losses exceeds
€200,000, and then only by the amount by which such
indemnifiable claim exceeds
€200,000.
	 
	7.	 	Covenants
	 
	7.1	 	Further Assurances
	 
	 	 	Subject to any such actions that individually or in the
aggregate, adversely affect the Indoor Group (other than to a de
minimis extent), each Party hereto shall, at the reasonable
request of the other Party, use all reasonable efforts to execute
and deliver such documents and take such other actions as are
reasonably necessary to effectuate the transactions provided for
herein.
	 
	7.2	 	Obligation to Perform
	 
	 	 	Each Party undertakes to perform under this Agreement and/or
under any Ancillary Agreement notwithstanding that any dispute or
controversy may have arisen between the Parties.




 









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	7.3	 	Third Party Consents and Governmental Approvals
	 
	7.3.1	 	The Parties shall use their reasonable efforts to obtain, as soon as practicable, any third
party consents or approvals that are required to consummate the transactions contemplated in
this Agreement, including informing each counterparty to the material contracts that are
Transferred Assets that such contract will be assigned to the relevant Transferee as of the
respective Restructuring Closing and requesting the consent of such counterparty to such
assignment, provided, however, that in no event shall either Party be obligated to pay any
money to any third party in order to obtain such consents or approvals and provided, further,
that in no event shall Electrolux have any obligations under this Section 7.3.1 after the
first anniversary of the Demerger Date.
	 
	7.3.2	 	To the extent that the consummation of the obligations hereunder requires any governmental
approvals, the Parties will use their commercially reasonable efforts to obtain any such
governmental approvals.
	 
	7.4	 	Removal of Certain Guarantees
	 
	 	 	Each Party shall, on or prior to the Demerger Date, procure the release of the other
Party and other member of its Group from any guarantee, indemnity or other obligation
which relates to Liabilities of the first Party.
	 
	7.5	 	Intercompany Agreements
	 
	 	 	Effective as of the Demerger Date, each of the Parties shall terminate
each and every agreement between it or any member of its Group and any
member of the other Group other than this Agreement, any of the
Ancillary Agreements, and any agreement executed pursuant thereto, and
any ordinary-course trade agreements, without further Liability of
either party thereto, provided, however, that such termination shall
not have any effect whatsoever on any of their rights and/or
obligations that accrued or were incurred prior to the Demerger Date.
It is acknowledged that all inter-company financial accounts shall be
settled on or prior to the Demerger Date.
	 
	7.6	 	Communication and Inquiries
	 
	 	 	Electrolux shall promptly direct to Husqvarna all oral or written
orders, offers or inquiries, Related To the Outdoor Business, received
by the Indoor Group after the Demerger, and Husqvarna shall promptly
direct to Electrolux all oral or written orders, offers or inquiries,
Related To the Indoor Business received by the Outdoor Group after the
Demerger.




 









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	7.7	 	Non Solicitation
	 
	 	 	For a two (2) year period from the Demerger Date, each Party will not,
without the prior consent of the other Party, solicit any of the key
personnel of the other Party to work for the first Party or any of its
Affiliates except where such employees have been dismissed by the
other Party or with the consent of the other Party which shall not be
unreasonably withheld. A Party’s usual reasonable advertising for
employees shall not be deemed to conflict with this provision.
	 
	7.8	 	Access to Information
	 
	7.8.1	 	Each of the Parties agrees to grant, or cause to be granted, access to the other Party or
its Affiliates during normal working hours to all documents and other information in its
possession or under its control that such other Party reasonably requests (i) to conduct its
ongoing business; or (ii) to comply with legal requirements imposed on the requesting Party or
its Affiliates (including under applicable securities laws or stock exchange regulations), to
the extent such documents and information are reasonably necessary for such purposes.
	 
	7.8.2	 	Notwithstanding the above, in the event that any Party in its sole discretion determines
that the providing of documents or information in accordance with Section 7.8.1 could be
commercially detrimental, violate any law or agreement, or waive any attorney-client
privilege, the Parties shall take all reasonable measures to permit the requesting Party to
comply with its obligations in a manner that avoids any such harm or consequence.
	 
	7.9	 	Confidentiality
	 
	7.9.1	 	The Parties undertake not to disclose, and to procure that none of their Affiliates
disclose, following the Demerger Date, whether in oral or written or any other form, any
information of a confidential nature relating to the Outdoor Business (in the case of the
Indoor Group) or the Indoor Business (in the case of the Outdoor Group), to any third party,
unless required to do so pursuant to law or applicable stock exchange regulations.
	 
	7.9.2	 	The Parties shall inform their officers, directors, employees, advisors, agents and other
representatives and those of their Affiliates of this undertaking and shall procure that such
representatives comply with such undertakings.
	 
	7.10	 	Public Announcements
	 
	 	 	Each Party hereto shall, following the Demerger Date, consult with
the other before issuing any press release or otherwise issuing any
other similar written




 









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	 	 	public statement with respect to this Agreement or the Demerger and shall not issue any
such press release or make any such public statement without the prior consent of the
other Party, which consent shall not be unreasonably withheld. A Party may, however,
without the prior consent of the other Party, issue such press release or other similar
written public statement as may be required by law or applicable stock exchange
regulations, provided, however, that it shall still consult with the other Party in
accordance with the above.
	 
	8.	 	Miscellaneous
	 
	8.1	 	Waiver
	 
	 	 	The failure of any Party to insist upon strict adherence to any
term of this Agreement or any Ancillary Agreement on any occasion
shall not be considered a waiver of any right hereunder or
thereunder, nor shall it deprive that Party of the right
thereafter to insist upon the strict adherence to that term or
any other terms of this Agreement or the Ancillary Agreements.
	 
	8.2	 	Assignment
	 
	 	 	Neither Party hereunder may assign or otherwise transfer its
rights or obligations under this Agreement, unless prior written
approval has been given by the other Party.
	 
	8.3	 	No Third Party Rights
	 
	 	 	Nothing in this Agreement shall be deemed to give any rights to any party who is not a
Party to this Agreement.
	 
	8.4	 	No Set Off
	 
	 	 	Payments under this Agreement or the Ancillary Agreements shall,
unless otherwise agreed in writing, not be set off, deducted or
withheld against any other claims that the respective Parties, or
their respective Affiliates, may have, or purport to have against each
other.
	 
	8.5	 	Costs
	 
	8.5.1	 	Notwithstanding Section 6.4.2, professional fees and out-of pocket expenses, including but
not limited to legal, accounting and other professional advisory fees and expenses, incurred
on or prior to the Demerger Date in connection with the negotiations, preparation and
execution of this Agreement and the transactions contemplated hereby, shall be borne by
Electrolux.




 









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	8.5.2	 	Notwithstanding Section 6.4.2, all stamp, transfer, documentary, sales and use, value added,
registration and other such transfer taxes and fees and all notarial, registration and filing
fees incurred in connection with the transactions contemplated herein shall be borne by the
Party that incurs such taxes and fees.
	 
	8.6	 	Amendments and Termination
	 
	8.6.1	 	The Parties hereby agree that, prior to the Demerger, any one or more of the Corporate
Restructuring Transactions may, at the option of Electrolux, be modified, supplemented or
eliminated, provided such modification, supplement or elimination is in the opinion of
Electrolux necessary or desirable to divide appropriately the existing businesses of
Electrolux and to make such other allocations of assets and Liabilites as Electrolux may deem
appropriate.
	 
	8.6.2	 	No modifications, amendments, alterations or termination of this Agreement may be made
except in writing (containing a specific reference to this Agreement) and signed by a duly
authorized officer or representative of each of the Parties to this Agreement.
	 
	8.7	 	Notices
	 
	 	 	Any notice, request or other communication with
respect to this Agreement shall be in writing and
shall be deemed to have been duly given (i) at the
time of obtaining the return or delivery receipt, if
delivered personally or sent by reputable
international overnight courier or facsimile; or
(ii) five (5) Business Days after sent by registered
or certified mail, return or delivery receipt
requested, postage prepaid; in each case to the
Parties at the respective addresses set forth below:





	 	 	 	 	 
	 

	 	Electrolux:
	 	AB Electrolux (publ)
	 

	 	 	 	Sankt Göransgatan 143
	 

	 	 	 	S-105 45 Stockholm, Sweden
	 

	 	 	 	Attn: Group Legal Corporate
	 

	 	 	 	Fax: +46 8 738 6335
	 
	 	 	 	 
	 

	 	Husqvarna:
	 	Husqvarna AB
	 

	 	 	 	Sankt Göransgatan 143
	 

	 	 	 	S-105 45 Stockholm, Sweden
	 

	 	 	 	Attn: Legal Department
	 
	 	 	 	 
	 	 	or to such other addresses that Electrolux or Husqvarna, as the case may be, shall
specify in writing to the other Party in accordance with the provisions of this Section
8.7. All communication between Electrolux and Husqvarna shall be in English, unless
otherwise agreed.






 









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	8.8	 	Severability
	 
	 	 	If any provision of this Agreement is deemed invalid or unenforceable
in accordance with its terms, such invalidity or unenforceability
shall in no event affect the applicability of other provisions
hereunder, which other provisions shall remain in full force and
effect, provided however that the Parties shall agree on any
amendments to this Agreement as are reasonably necessary to validly
achieve, to the greatest extent possible, the same commercial effect
as had such provision been deemed valid and enforceable.
	 
	8.9	 	Priority
	 
	8.9.1	 	In the event of a conflict between the terms and conditions of this Agreement and any
Corporate Restructuring Document, this Agreement shall take precedence as between the Parties
and the Parties shall cause such Corporate Restructuring Document to be amended as
appropriate.
	 
	8.9.2	 	The Parties expressly acknowledge that there will be no amendments or adjustments under the
Corporate Restructuring Transactions with respect to any allocations of assets or liabilities
of any kind after the Demerger Date.
	 
	8.9.3	 	In the event of a conflict between the terms and conditions of this Agreement and any
Ancillary Agreement that is not a Corporate Restructuring Document, the Ancillary Agreement
shall take precedence as between the Parties and the Parties shall cause this Agreement to be
amended as appropriate.
	 
	8.10	 	Survival of terms
	 
	 	 	Termination of this Agreement shall not bring an end to any provision
of this Agreement which, in order to give effect to its meaning,
needs to survive such termination. Rights and obligations under this
Agreement, which by their nature would continue beyond the
termination of this Agreement, and such provisions, shall remain in
full force and effect thereafter, including without limitation this
Section 8.10 (Survival of terms), Section 8.11 (Governing
Law) and 8.12 (Arbitration).
	 
	8.11	 	Governing Laws
	 
	 	 	This Agreement shall be construed in accordance with and governed by
the laws of Sweden, except for its conflicts of law principles.




 









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	8.12	 	Arbitration
	 
	 	 	Any dispute controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity thereof,
shall be settled by arbitration in accordance with the Rules of the
Arbitration Institute of the Stockholm Chamber of Commerce by three
(3) arbitrators appointed in accordance with such Rules. The place of
arbitration shall be Stockholm, Sweden and the proceedings shall be
conducted in the English language.





 




IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf as
of the date above first written.




	 	 	 	 	 
	AB ELECTROLUX (PUBL)

	 	HUSQVARNA AB
	 	 
	 
	/s/ Hans Stråberg
	 	/s/ Bengt Andersson	 	 
	 

	 	 	 	 
	By: Hans Stråberg

	 	By: Bengt Andersson	 	 
	Title: Chief Executive Officer

	 	Title: Chief Executive Officer