Document:

a5809045ex10_15.htm

    
      Exhibit
10.15

      
         

        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

      

       

      SETTLEMENT
AGREEMENT

      

      

      BETWEEN THE
UNDERSIGNED

      

      Autoliv France, société en nom collectif with
a share capital of 26,455,000 euros, the registered office of which is located 2
rue Villaret de Joyeuse, 75017 Paris, registered with the Paris Companies
Register under number 622 009 918, represented by Mr. Lars Sjöbring, in his
capacity as General Counsel, duly empowered,

      

      Hereinafter
referred to as "Autoliv
France"

      

      AND:

      

      Autoliv, Inc, company organized under
the laws of Delaware, the registered office of which is located World Trade
Center, Klarabergsviadukten 70, Sec E, Box 70381, 107 24 Stockholm, Sweden,
represented by Mr. Lars Sjöbring, in his capacity as General
Counsel,

      

      Hereinafter
referred to as "Autoliv
Inc",

       

      OF THE
FIRST PART

      

      AND:

      

      Mr. Benoît Marsaud, residing
at [xxx], a French national, registered with the social security bodies under
number [xxx],

      

      Hereinafter
referred to as "Mr.
Marsaud"

       

      OF THE OTHER
PART

      

      

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

      

      

      

      RECITALS

      

      Mr. Marsaud was
hired by the Autoliv group, the first employment relationship being within
Klippan France SA as Product manager, under an indefinite term employment
contract dated 7 January 1980.

      

      Mr. Marsaud's
career then evolved within the group, and resulted in him working within a
number of subsidiaries, in various different European countries, taking on
various different duties.

      

      As from 1 May
1996, Mr. Marsaud was recruited by Autoliv France to the position of Industrial
director, a management role, position III C in the grid provided by the
Metallurgy collective bargaining agreement, with a basic fixed salary of
1,225,000 FRF (186,750 euros), on top of which he was also entitled to a
variable remuneration on the basis of objectives. The said employment contract,
formalized on 10 October 1996, referring to Mr. Marsaud's sole
position  as employee within the group, expressly provided for the
continuation of his length of service as from 7 January 1980, in addition to a
contractual termination indemnity and notice period as well as a covenant not to
compete for a period of 12 months following termination.

      

      On the basis of
two contractual documents executed on 30 March 2005 between Autoliv Inc on
behalf of Autoliv France, and Mr. Marsaud, the latter was granted firstly a
specific indemnity in the event of a change of control of the group, and
secondly, in the absence of change of control of the group, a termination
indemnity replacing that provided in the aforementioned contract dated 10
October 1996, as well as the payment of a notice period of 18
months.

      

      An addendum dated
1 May
2005, to the employment contract of 10 October 1996, executed between Mr.
Marsaud and Autoliv Inc on behalf of Autoliv France, provided for an additional
retirement scheme.

      

      This provision,
which could not enter into force, was replaced as agreed by the parties, by a
retainer bonus, which would be paid to Mr. Marsaud if he were still member of
group management in 2010. The parties' agreement on this point was
formalized by an addendum signed in the same conditions by Autoliv Inc and Mr.
Marsaud, dated 25 May 2007.

      

      Mr. Marsaud was
promoted to the position of Chief Operating Officer as of 1 September
2006.

      

      Mr. Marsaud was
further granted the benefit of stock option and Restricted Stock Unit
plans.

      

      An addendum was
executed between Autoliv France and Mr. Marsaud on 30 April 2008, under which
the parties intended to clarify firstly the scope of their previous agreements,
confirming that the retainer bonus had indeed replaced the additional
retirement scheme, and secondly  that this retainer bonus would
only be due to Mr. Marsaud if he were still member of group management on 30
April 2010, i.e. if he had not either presented his resignation or been notified
of his dismissal on any grounds, prior to this date.

      

      Given the
significant differences of opinion between Mr. Marsaud, and Autoliv France and
Autoliv Inc regarding the group's strategic direction, which clearly resulted in
more and more distinct operational, it was therefore decided to modify Mr.
Marsaud duties, in particular those of Chief Operating Officer as from 18 July
2008, and to assign him to the role of Director of special projects, within the
scope of his position as Industrial director.

       

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

      This decision was
announced on this same date of 18 July 2008 within the group.

      

      Mr. Marsaud's
collective bargaining agreement position and remuneration remained identical, it
being noted that the strategic matters entrusted to him required a high level of
expertise and considerable knowledge of the group, and particularly of Autoliv
France.

      

      However,
immediately following the announcement of this change of duties, Mr. Marsaud
informed the company of his refusal of this decision, indicating that this would
result in a change in his position, and therefore a change to his employment
contract. He therefore made it clear that he would forcibly refuse to carry out
the duties of Director of special projects, and that he wished to retain his
contractual duties, noting that he had obtained very good results in his
position as Industrial director. He added that he had acted normally in his
position as management executive by sharing his vision of the strategy to be
implemented, having in mind the interests of the group.

      

      As a result, he
categorically refused to carry out the role of Director of special
projects.

      

      Autoliv France
considering that this was merely an adaptation of his duties, those that it
intended to entrust to him being perfectly coherent with his qualification and
professional experience, it indicated to Mr. Marsaud that it considered his
refusal as a fault, and that it therefore had no choice but to consider his
dismissal.

      

      Mr. Marsaud was
therefore invited to a preliminary meeting regarding his envisaged dismissal
scheduled on 29 July 2008, by a hand-delivered letter with proof of receipt
dated 24 July 2008.

      

      At this
preliminary meeting, which was held in the Autoliv France offices, and at which
Mr. Marsaud chose not to be assisted, he was informed, in line with the
provisions of article L 1232-2 of the Labor code, of the grounds for the
envisaged decision. His comments were also noted.

      

      Mr. Marsaud was
dismissed on the grounds specified in the termination letter sent to him by
registered post with proof of receipt on 30 July 2008, presented on 31 July
2008, i.e.:

      

      « Over
recent months, we have been faced with fundamental differences of opinion
between you and the company regarding the group's strategic direction, which has
resulted in more and more distinct difficulties damaging the proper running of
the company.

      

      As
a result, after a number of discussions, we were required to modify your duties,
in assigning you the tasks of director of special projects within the scope of
your position as industrial director.

      

      This
change in your tasks did not result in any modification of your remuneration,
category, level or coefficient, as you remained a management executive, the
duties you were entrusted with requiring considerable expertise, which could
therefore only be given to an experienced person with in depth knowledge of our
company and our group.

       

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

      

      

      You
refused to carry out this new assignment however, despite them being entrusted
to you in the scope of our managerial authority, arguing that in your view, this
resulted in your demotion, and therefore a unilateral modification of your
employment contract and your responsibilities.

      

      Given
the reasons which led us to modify your duties, we announced this change in
duties both within the group and externally, reiterating to you that this was by
no means a demotion, your collective bargaining agreement positioning and
remuneration remaining strictly unchanged. We further insisted on the high level
of responsibilities that you would retain.

      

      You
continued to categorically refuse to carry out the role of director of special
projects however, openly challenging our managerial authority.

      

      We therefore had no choice, after
having further tried to reason with you, to bring an end to this situation in
order to preserve the interests of our company.»

      

      Mr. Marsaud's most
recent monthly gross salary amounted to 34,615 euros, on top of which he was
eligible for a variable remuneration on the achievement of
objectives.

      

      As soon as he
received his termination letter, Mr. Marsaud informed Autoliv France as well as
Autoliv Inc, in particular through his counsel, that he firstly disputed the
procedure followed, with respect to the applicable statutory provisions and
those defined by the collective bargaining agreement, and further, the grounds
for the measure, on the merits.

      

      He stated that,
far from having committed any fault in performing his work, he simply refused
the unilateral modification of his position, indicating that the new position as
Director of special projects, despite the fact that his salary and position
within the collective bargaining agreement were to be maintained, would result
in a unilateral modification of his employment contract, constituting a
demotion.

      

      In this respect,
he stated that his responsibilities were no longer related to those inherent to
his contractual duties, this being clear, particularly from the fact that he no
longer had any employees under his responsibility, and that he was no longer
member of management bodies, further made worse due to the fact that the
assignments he was entrusted with were in fact vague and lacked veritable
substance.

      

      He further
insisted on the conditions under which this modification of his duties was
imposed on him and announced within the group and externally, this having placed
him in a particularly uncomfortable position.

      

      Mr. Marsaud
believed as a result that his dismissal, after a significant number of years
service within the group, was not based on genuine or proper grounds, and he
therefore requested compensation for the financial and psychological damage he
believed that he had suffered as a result of this measure and its sudden
effect.

       

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

      Mr. Marsaud
indicated that this measure would damage his reputation both vis-à-vis his
professional and family circle.

      

      Furthermore, he
indicated that his means of subsistence would be necessarily troubled as a
result of the difficulties he would have in finding a similar job particularly
in the current context of the employment market, and given his age.

      

      Autoliv France and
Autoliv Inc indicated to Mr. Marsaud that they confirmed purely and simply the
express grounds stipulated in the dismissal letter sent to him, highlighting his
attitude opposing management which was not acceptable from an executive of his
level. In this respect, they confirmed that the modification of his duties had
been decided in the interests of the group and in the scope of the employer's
management authority, respecting his qualification and level of responsibility.
As a result, they indicated that there had been no modification of his
employment contract.

      

      Finally, with
respect to the procedure followed, Mr. Marsaud was informed that it had been
respected, and that he had had the opportunity to present his own explanations
on a number of occasions.

      

      Each of the
parties maintained their position, therefore in disagreement over the financial
consequences of the termination of the employment contract and the conditions
under which it arose.

      

      However, the
parties continued their contact through their respective counsel, in an attempt
to find a mutual solution to the dispute.

      

      After
further discussions, the parties, assisted by their respective counsel decided,
having noted the precise extent of their dispute, both with respect to the
grounds and the circumstances of the termination of their contractual relations,
and all its financial consequences, with full knowledge of their respective
rights, decided to make reciprocal concessions and end their dispute on the
basis of an irrevocable settlement agreement, the terms of which are as
follows.

      

      

      

      IRREVOCABLE SETTLEMENT
AGREEMENT

      

      

      ARTICLE
1:

      

      Autoliv France
maintains its position that Mr. Marsaud's dismissal was based on the grounds
previously mentioned included in the dismissal letter dated 30 July 2008, but,
without challenging the grounds of this dismissal, it accepts, as a concession,
on the basis of the prejudice alleged by Mr. Marsaud, to pay him a lump sum definitive and global
settlement indemnity of one million five hundred and twenty five thousand
(1,525,000) euros gross, fully subject to social security contributions given
the current legal provisions on this matter.

       

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

      The net amount of
the aforementioned settlement indemnity therefore amounts, after deduction of
all employee social security contributions, to one million three hundred and
ninety five thousand, three hundred and ninety four euros and fifty eight cents
(1,,395,394.58 euros).

      

      The net amount of
this LUMP SUM DEFINITIVE AND GLOBAL SETTLEMENT INDEMNITY amounting to one
million three hundred and ninety five thousand, three hundred and ninety four
euros and fifty eight cents (1,,395,394.58 euros) is therefore paid to Mr.
Marsaud by bank wire, half payable within 48 hours at the latest, and the
remainder on 31 January 2009.

      

      Mr. Marsaud
confirms definitive receipt of this sum.

      

      This LUMP SUM
DEFINITIVE and GLOBAL SETTLEMENT INDEMNITY shall be considered as
damages.

      

      ARTICLE
2:

      

      The contractual
notice period of 18 months shall commence on 1 August 2008 and end on 30 January
2010.

      

      In this respect,
it is agreed that Mr. Marsaud shall work the period of this notice from 1 August
2008 to 31 December 2008, being paid on usual pay dates. During this time he
shall fulfill the role of Director of special projects.

      

      It is noted that,
Mr. Marsaud having requested not to work his notice period beyond 31 December
2008, this request having been accepted by Autoliv France, his employment
contract shall definitively terminate as of 31 December 2008. On this date he
will be removed from the payroll, and no further sums shall be paid to him, in
particular with respect to the period from 1 January 2009 to 31 January 2010,
ultimately not worked at his request.

      

      With respect to
the notice period worked from 1 August 2008 to 31 December 2008, Mr. Marsaud
shall receive the gross sum of 190,382.00 euros, including half of his 13th month
entitlement. This sum shall be paid on a monthly basis, on ordinary pay dates,
after social security contributions have been withheld at the rates in force.
The sum of 19,038.20 euros gross related to annual leave on this period shall be
paid to him by wire transfer on 31 January 2009, after social security has been
withheld at the rates in force.

      

      ARTICLE
3:

      

      It is expressly
agreed that the non compete obligation binding Mr. Marsaud, for a period of 12
months, which Mr. Marsaud undertakes to scrupulously respect until its term,
shall commence as of 1 August 2008 to terminate on 31 July 2009.

      

      The parties
expressly agree that during the period from 1 August 2008 to 31 December 2008,
Mr. Marsaud shall be paid as usual, and he waives his rights, given the sums
obtained as a result of the present settlement agreement, to the financial
consideration for the non compete clause from 1 January 2009 to 31 July
2009.

       

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

        

      

      ARTICLE
4:

      

      On the date of
termination of the employment contract between the parties, Autoliv undertakes
to pay the following sums to Mr. Marsaud:

      

      (a) Payment in lieu of annual leave
intended to settle the balance of rights acquired by Mr. Marsaud in this
respect as of 31 December 2008, further to deduction of annual leave accrued
during the notice period referred to in article 2 above.

      

      The amount due
shall be calculated on 31 December 2008, taking into account the annual leave
that may have been taken before this date. This sum shall be paid to Mr. Marsaud
on 31 January 2009.

      

      (b) Collective bargaining agreement
severance indemnity corresponding to Mr. Marsaud's length of service
calculated, in line with the contractual documents, as from 7 January 1980, i.e.
the total sum of 1,268,874 (one million two hundred and sixty eight thousand,
eight hundred and seventy four) euros. This sum is paid to Mr. Marsaud within 48
hours at the latest, in advance as an additional concession, by bank
wire.

      

      Mr. Marsaud
confirms definitive receipt of this sum.

      

      

      

      ARTICLE
5:

      

      As an additional
concession, Autoliv Inc further accepts to bear the fees incurred by Mr. Marsaud
for the purposes of his representation by counsel, Maître Alexandre Khanna up to
15,000 (fifteen thousand) euros. Autoliv Inc shall pay the invoice sent to it by
the latter directly, up to the aforementioned maximum sum.

      

      As a final
concession, Autoliv France accepts to allow Mr. Marsaud to benefit from the
company vehicle, covering all related expenses (insurance, maintenance) until 31
January 2010.

      

      This vehicle being
considered as a benefit in kind, it shall be declared as such and subject to
social security contributions. The sum total of this benefit in kind is valued
at 6,000 (six thousand) euros gross.

      

      With respect to
this vehicle, Mr. Marsaud shall have the possibility either to express his wish
by 31 December 2008 to retain the vehicle until 31 January 2010, in which case
the sum of  6,000 euros gross shall be deducted from the total
settlement indemnity referred to in article 1 above and payable on 31 January
2009, or not to express any such wish, therefore returning the vehicle to
Autoliv France on or before 31 December 2008.

      

      Mr. Marsaud shall
therefore return the vehicle to Autoliv France in good working order either on
31 December 2008 or on 31 January 2010.

       

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

        

      

      

      ARTICLE
6:

      

      It is reiterated
that Mr. Marsaud received a sum of 85,000 euros gross as payment of his variable
remuneration corresponding to 2008. This sum was paid to him in July 2008 and
covers his entire rights in this respect for the year 2008. Mr. Marsaud
expressly acknowledges this.

      

      It is expressly
agreed that Mr. Marsaud, who, as agreed between the parties, shall not continue
to work after 31 December 2008, shall not be entitled to or receive any variable
remuneration on the basis of years post 2008.

      

      ARTICLE
7:

      

      As a result of the
present agreement and the payment of sums referred to in articles 1, 2 and 4
above, which he fully accepts. Mr. Marsaud, who further accepts that all sums
which he could claim in respect to his entire employment and work within Autoliv
France, Autoliv Inc and any other company of the Autoliv group, expressly and
irrevocably undertakes to waive his rights, claims, legal action of any nature
against or in relation to Autoliv France, Autoliv Inc and any other company of
the Autoliv group, with respect to:

      

      
        	
                -  

              	
                the
      performance of his employment contract, in particular salary, contractual
      bonuses, overtime, compensatory rest, variable remuneration, annual leave,
      RTT (time off in lieu) days, days off, indemnities, additional pension,
      retention bonus, RSUs, stock options, damages covering any prejudice such
      as those with respect to bullying, discrimination,
  etc.);

              

      

      

      
        	
                -  

              	
                the
      termination of his employment contract (in particular contractual and
      collective bargaining agreement termination indemnities, payment in lieu
      of notice and outstanding annual leave, and damages on the basis of the
      grounds for dismissal and the procedure followed, payment under the
      Individual Training Right etc.)

              

      

      

      
        	
                -  

              	
                the
      performance and termination of any corporate office within any group
      company

              

      

      

      Mr. Marsaud
therefore waives any claim of legal action filed or pending against Autoliv
France, Autoliv Inc, and any company of the Autoliv group or any members of
management, the origin or subject of which would be related to the performance
or termination of his employment contract or corporate offices, and more
generally related to any de facto or de jure relationship which may ever have
existed between the parties.

      

      The entire present
clause is essential, because without its drafting and acceptance by Mr. Marsaud,
the present agreement would not have been accepted.

       

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

        

      ARTICLE
8:

      

      The parties
declare that they have been assisted by their respective counsel, and that they
are fully aware and informed of their rights and obligations, as well as the
social security and tax consequences on the sums referred to in the present
settlement agreement as well as their implication in terms of unemployment
benefits.

      

      ARTICLE
9:

      

      The parties agree
that the present settlement agreement shall remain confidential, and may not be
disclosed to any third party without the express authorization of the other
party, with the exception of the tax administration, social security and
unemployment bodies (ASSEDIC, URSSAF...), any controlling authority, the courts in
the event that they so request, or by Autoliv France and Autoliv Inc in the
scope of their reporting obligation to the US Securities Exchange
Commission.

      

      ARTICLE
10:

      

      The parties
undertake reciprocally to abstain from any action, declaration, affidavit or
statement which could damage the reputation or interests of the other party, any
other company of the Autoliv group or any members of its management, in
particular in relation to any procedure before any courts or
tribunals.

      

      ARTICLE
11:

      

      The present
agreement, as mutually agreed between the parties, is executed within the scope
of articles 2044 et seq. of the Civil Code. It therefore represents “Res
Judicata” between the parties, and cannot be countered on the basis of error in
law or absence of consideration.

      

      The parties
expressly waive their rights to claim under articles 2053 and 2054 of the Civil
Code, the terms of which do not apply to the agreement negotiated and executed
between them.

      

      As a result of the
above, the parties mutually and definitively accept without reserve to discharge
each other from any obligations, subject to all the commitments referred to
above have been respected.

      

      ARTICLE
12:

      

      The parties
undertake to perform all obligations under the present settlement agreement in
good faith and without reserve, and agree that in the event that one of the
parties does not respect its obligations, it would be liable for damages payable
to the other party under the terms of general common law.

      

      Executed in PARIS
on

      

      In duplicate, one
for each of the parties

      

      
        ENGLISH
TRANSLATION FOR INFORMATION PURPOSES ONLY

        

      
        
          	
                  Mr. Marsaud
      (1)

                	
                  For Autoliv
      France and Autoliv Inc

                
	 
      	
                  Lars
      Sjöbring (1)

                
	 
      	
                  Acting in
      his capacity as General Counsel, authorized to sign the present
      agreement

                

        

      

      

      

      

      

      

      

      

      

      

      

      _________________________________________________________________

      (1) The parties
must hand-write the following prior to signing: « Lu et approuvé
sans réserve ni contrainte- Bon pour transaction irrévocable et définitive et
renonciation à toute instance et action ». The parties shall also
initial each page of the agreement.a5809045ex10_16.htm

    Exhibit
10. 16

     

    Autoliv
Inc. Series
No:                                                      Bond
1/2008

     

     

    

     

     

    

     

     

    

     

     

    TERMS
AND CONDITIONS

     

     

    for

     

     

    Autoliv
Inc.

     

    

    Issue
of

    

    SKr
150,000,000

    3
Month STIBOR + 0.82% Floating Rate Bonds due 2010

    (the
"Bonds")

    

    

    

    
      	
              §1

            	
              Definitions

            

    

    

    
      	
               
      

            	
              The
      following expressions shall have the meaning ascribed to them
      below.

            

    

    

    
      	
               
      

            	
              Account
      Operator:

            	
              A bank or
      other entity granted permission to be an account operator under the
      Registration of Financial Instruments Act (1998:1479) and with whom a
      Bondholder has opened a VP-Account concerning a
  Bond.

            

    

    

    
      	
               
      

            	
              Business
      Day:

            	
              A day on
      which banks settle payments in
Stockholm.

            

    

    

    
      	
               
      

            	
              Bond:
 	
               

            	
              A promissory
      note of the kind described in the Registration of Financial Instruments
      Act (1998:1479) and issued by the Issuer in accordance with these terms
      and conditions.

            

    

    

    
      	
               
      

            	
              Bondholder:

            	
              Institution
      or person who is recorded on a VP-Account as creditor in respect of a
      Bond.

            

    

    

    
      	
               
      

            	
              Calculation
      Agent:

            	
              AB SEK
      Securities, org. No. 556608-8885

            

    

     

    -1-

    
      	
               
      

            	
              STIBOR:

            	
              The interest
      rate (1) quoted at approximately 11 a.m. (Stockholm time) on the relevant
      Business Day on Reuter’s page ”SIDE” (or through such other system or on
      such other page as shall replace the system or page stated)
      or,  if no such quotation is given - (2), at the time indicated
      above according to notification from the Calculation
      Agent  corresponding to the arithmetic mean of the Reference
      Banks quoted interest rates for deposits of SKr 100,000,000 in the
      Interbank Market in Stockholm for the relevant period or -if only one or
      no such quotation is available - (3), the Calculation
      Agent’s  assessment of the interest rate offered by the
      Reference Banks, for lending of SKr 100,000,000 for the relevant period in
      the Interbank Market in Stockholm

            

    

    

    
      	
               
      

            	
              ISIN
No.:

            	
              SE0002655522

            

    

    

    
      	
               
      

            	
              Issue
    Date:

            	
              17 October
      2008

            

    

    

    
      	
               
      

            	
              Issuer:

            	
              Autoliv
      Inc., IRS Employers Identification Number:
  51-0378542

            

    

    

    
      	
               
      

            	
              Issuing
      Dealer:

            	
              AB SEK
      Securities, org. no. 556608-8885

            

    

    

    
      	
               
      

            	
              Group
      Company:

            	
              Each company
      that is part of the group, in addition to the Issuer, and, according to
      latest audited consolidated statement, has assets or business volume
      exceeding 10 per cent. of the group’s aggregated assets or business
      volume.

            

    

    

    
      	
               
      

            	
              Loan:

            	
              The loan
      which will be represented by these
Bonds.

            

    

    

    
      	
               
      

            	
              Maturity
      Date:

            	
              15 October
      2010. If the Maturity Date falls on a day which is not a Business Day,
      such day shall be postponed to the first following day that is a Business
      Day unless that day falls in the next calendar month in which case that
      date will be the first preceding day that is a Business
    Day.

            

    

    

    
      	
               
      

            	
              SKr:

            	
              The lawful
      currency of the Kingdom of Sweden

            

    

    

    
      	
               
      

            	
              VP-Account:

            	
              A securities
      account maintained pursuant to the Registration of Financial Instruments
      Act where the Bondholder’s possession of Bonds is
    registered.

            

    

     

    
      	
            	
              VPC:

            	VPC AB, org.
      No. 556112-8074

      
-2-

    

                                                       

    §2        Registration

    

    
      	
               
      

            	
              The Bonds
      will be registered in a VP-Account on behalf of the Bondholder, and no
      physical notes representing the Bonds will be issued. The Issuer is
      entitled to access to the registry of Bondholders, including nominee list
      of owners, at all times.

            

    

    

    
      	
               
      

            	
              No person
      shall be registered in a VP-Account as a Bondholder unless such person
      shall have first provided to the Issuer an IRS Form W-8 or other
      documentation that, in the sole discretion of the Issuer, satisfies the
      requirements of Title 26 of the United States Code of Federal Regulations,
      § 1.871-14(c)(2) or any similar requirements of U.S. tax law that may be
      in effect at the time registration is sought. Each Bondholder shall
      provide to the Issuer a replacement Form W-8 or other documentation
      meeting the requirements of the foregoing sentence upon the earliest of
      (i) the date on which the previously provided form or other documentation
      expires, (ii) the date that is fifteen days after any information on the
      previously provided form or documentation becomes incorrect, or (iii) a
      request by the Issuer for a replacement from or other
      documentation.  The Issuer shall provide VPC with copies of all
      forms and other documentation that the Issuer obtains under this §
      2.

            

    

    

    

    
      	
               
      

            	
              A request
      concerning the registration of a Bond shall be addressed to the Account
      Operator.

            

    

    

    
      	
               
      

            	
              Any person
      who acquires the right to receive payment under a Bond through a mandate,
      a pledge, regulations in the Code on Parenthood and Guardianship,
      conditions in a will or in a deed of gift or otherwise shall register such
      right to receive payment.

            

    

    

    
      	
               
      

            	
              §3

            	
              Nominal
      Amount

            

    

    

    
      	
               
      

            	
              The initial
      Nominal Amount is SKr 150,000,000 and is represented by denominations
      (“Denominations”)
      in the initial amount of SKr
10,000,000.

            

    

    

    §4        Status

    

    These Bonds
constitutes a direct, unconditional, unsecured and unsubordinated obligation of
the Issuer and ranks and will rank pari passu with all other
unsecured obligations (other than subordinated obligations) of the
Issuer.

    

    
      	
               
      

            	
              §5

            	
              Interest
      Rate Provisions

            

    

    

    
      	
               
      

            	
              The Loan
      will bear a floating interest, from (but excluding) the Issue Date to (and
      including) the Maturity Date, payable quarterly in arrears on each
      Interest Payment Date.

            

    

    

    The amount of interest (the “Interest Amount”) payable per
Denomination on each Interest Payment Date will be calculated and determined by
the Calculation Agent in accordance with the following formula:-

     

    -3-

    
 

    
      	
              SKr
      10,000,000 x (Floating Rate + 0.82%) x Day Count
  Fraction

            

    

    

    Where:-

    

    

    ”Day Count Fraction” means the
actual number of days in the relevant Interest Period divided by
360.

    

    “Floating Rate” means 3 months
STIBOR, which means that the rate for a  Reset Date will be the rate
for deposits of SKr for a period of 3 months which appears on
the  Reuter’s page ”SIDE” (or through such other system or on such
other page as shall replace the system or page stated) on the day that is two
(2) Business Days preceding that Reset Date. Fall Back Provision: please refer
to the definition of STIBOR above.

    

    ”Interest Period” means each
period beginning on (but excluding) the Issue Date, or any Interest Payment Date
and ending on (and including) the next Interest Payment Date. Each Interest
Period is 3 months, except for the initial Interest Period, that runs from (but
excluding) the Issue Date to (and including) 15 January 2009. The final Interest
Period runs from (but excluding) 15 July 2010 to (and including) the Maturity
Date.

    

    “Interest Payment Dates” means
15 January, 15 April, 15 July and 15 October in each year, from and including 15
January 2009 (short first Interest Period) to and including the Maturity Date.
If an Interest Payment Date falls on a day which is not a Business Day, such day
shall be postponed to the first following day that is a Business Day unless that
day falls in the next calendar month in which case that date will be the first
preceding day that is a Business Day.

    

    “Reference Banks” means four
major banks, as appointed by the Calculation Agent, quoting STIBOR at such
relevant time.

    

    ”Reset Date” means the first
day in each Interest Period.

    

    ”Representative Amount” means
an amount which is representative for one sole transaction in the Stockholm
interbank market at the relevant time (11.00 a.m. Stockholm time).

    

    In case the Calculation Agent cannot
determine the rate of interest due to such impediment as referred to in §18
section 1 below, the rate of interest for the nearest preceding Interest Period
will be applied. As soon as the impediment has ceased, the Calculation Agent
shall determine the new rate of interest in accordance with the definition of
STIBOR, to be applied from and including the second Business Day after the day
of determination for the remaining relevant Interest Period.

    

    
      	
               
      

            	
              §6

            	
              Payments

            

    

     

    -4-

    
 

    
      	
               
      

            	
              Payment of
      principal and interest shall be made in the Currency in which the Loan has
      been issued to the person, who on the 5th
      (fifth) Business Day prior to the due date or on the Business Day closer
      to the due date which may generally be applied on the Swedish bond market
      (the "Record
      Date"), is the Bondholder.

            

    

    

    
      	
               
      

            	
              Where the
      Bondholder has specified, through an Account Operator, that an amount
      shall be deposited into a specified bank account, the deposit shall be
      made through VPC on the relevant payment date. Otherwise VPC will forward
      such amount to the address registered by VPC on the Record Date in respect
      of such Bondholder. In the event that any relevant payment date falls on a
      day which is not a Business Day, the amount shall be deposited on the
      first following day that is a Business Day unless that day falls in the
      next calendar month in which case that date will be the first preceding
      day that is a Business Day. For the avoidance of any doubt, interest shall
      only accrue up to but excluding the Maturity
  Date.

            

    

    

    
      	
               
      

            	
              In the event
      that VPC, due to a delay of the Issuer or any other impediment, is unable
      to disburse the amounts in accordance with the above, the amount shall be
      disbursed by VPC, as soon as the impediment has ceased, to the person
      registered as Bondholder on the Record
Date.

            

    

    

    
      	
               
      

            	
              In the event
      that the Issuer, due to an impediment of VPC, as described in §18 below,
      is unable to disburse the amount in accordance with the above, the amount
      shall be disbursed by VPC, as soon as the impediment ceases. In such case
      interest shall accrue in accordance with §8 section 2
    below.

            

    

    

    
      	
               
      

            	
              In the event
      it transpires that any person to whom a payment has been made in
      accordance with the above was not entitled to receive such amount, VPC and
      the Issuer shall nevertheless be deemed to have fulfilled their payment
      obligation.  However, the aforementioned shall not apply where
      VPC and the Issuer knew that the amount had fallen into the wrong hands or
      failed to exercise the degree of care reasonably required in the
      circumstances.

            

    

    

    
      	
               
      

            	
              Notwithstanding
      anything contained in this § 6, VPC shall not participate in the making of
      any payment hereunder (and the Issuer shall instead make such payment
      without the participation of VPC) unless the Issuer, in accordance with
      §2, have confirmed to VPC that no United States taxes are required to be
      withheld from such payment.

            

    

    

    
      	
               
      

            	
              §7

            	
              Redemption
      Amount

            

    

    
      	
               
      

            	
              The Maturity
      Redemption Amount payable per Denomination on the Maturity Date will be
      SKr 10,000,000.

            

    

    

    
      	
               
      

            	
              §8

            	
              Interest
      on Overdue Amount

            

    

    

    In the event of late payment, interest shall
accrue on the overdue amount from and including the due date up to but excluding
the date of actual payment at a rate of interest equal to STIBOR for the term of
one week, during the period of the delay with an addition of two percentage
units. STIBOR shall, in such context, be determined on the first Business Day of
each calendar week during the period of delay. Subject to the provisions in the
second paragraph, interest on overdue amounts in respect of interest bearing
Loans shall in no case be less than the rate of interest applicable to the
relevant Loan on the relevant due date with an addition of two percentage units.
Interest on overdue amounts shall not be capitalised.

     

    -5-

    In the event that the delay is a consequence
of impediments encountered by the Issuer, Issuing Dealer or VPC as specified in
§18, section 1, interest on overdue amounts in respect of the Loan shall be
payable at a rate of interest which does not exceed the interest rate applicable
to the Loan on the relevant due date.

    

    
      	
               
      

            	
              §9

            	
              Period
      of Limitation

            

    

    

    
      	
               
      

            	
              Claims
      against the Issuer will be time-barred unless made within 10 (ten) years
      (or in the case of claims in respect of interest 3 years) after the due
      date for payment. Amounts being reserved for payment that have been barred
      will be for the account of the
Issuer.

            

    

    

    
      	
               
      

            	
              If the
      period of limitation is interrupted, a new limitation period for 10 (ten)
      years will start to run in respect of principal and 3 (three) years in
      respect of interest. In both cases the new period of limitation will
      commence on the day stipulated in the Limitations Act (1981:130) in
      respect of interruption of
limitations.

            

    

    

    §10     
Events of Default

    

    
      	
               
      

            	
              The Issuing
      Dealer shall have the right, on behalf of each Bondholder, to declare the
      Loan together with any accrued interest thereon due and payable
      immediately or at such time as the Issuing Dealer may determine
      if:

            

    

    

    
      	
              a)

            	
              the Issuer
      does not pay on the due date any interest amount or the Maturity
      Redemption Amount due in respect of such part of the Loan, provided that a
      default which is due to a technical or administrative error should not be
      regarded as an event of default unless payment is delayed for more than
      two Business Days; or

            

    

    

    
      	
              b)

            	
              the Issuer
      does not comply with its obligations (other than those referred to in
      section a)) pursuant to these terms and conditions, or otherwise acts in
      contravention of these terms and conditions, provided that the Issuing
      Dealer have required the Issuer to remedy such situation and the Issuer
      fails to do so within 15 days. The Issuing Dealer shall however have the
      right to declare the Loan due and payable without prior request for remedy
      when the failure to comply is not capable of remedy in the Issuing
      Dealer’s opinion; or

            

    

    

    
      	
              c)

            	
              the Issuer
      or a Group Company fails to pay when due any other loan raised by the
      Issuer or the Group Company and as a result thereof such loan is or is
      capable of being declared due and payable prior to its stated maturity or,
      if there are no provisions in respect of termination or the outstanding
      payment constitutes a final repayment, the delay in payment continues for
      15 days, provided that the occurrence of any of the events described in
      this paragraph shall not constitute an Event of Default unless the
      indebtedness concerned or the liability of the Issuer or such Group
      Company under the loan concerned exceeds U.S. Dollar 10,000,000 (ten
      million USD) or its equivalent in the currency in which the obligations in
      respect of which such event occurs are denominated;
  or

            

    

     

    -6-

    
 

    
      	
              d)

            	
              the Issuer
      or a Group Company fails to pay within 14 Business Days of receipt of a
      legitimate written claim under any guarantee issued by it in respect of a
      loan of a third party or fails to meet its obligation, as principal or
      surety to reimburse a person for amounts paid as a result of such surety
      or guarantee, provided that the occurrence of any of the events described
      in this paragraph shall not constitute an Event of Default unless the
      indebtedness concerned or the liability of the Issuer or such Group
      Company under the guarantee concerned exceeds USD 10,000,000 (ten million
      USD) or its equivalent in the currency in which the obligations in respect
      of which such event occurs are denominated;
or

            

    

    

    
      	
              e)

            	
              a distress
      is levied on any fixed assets of the Issuer or a Group Company;
      or

            

    

    

    
      	
              f)

            	
              the Issuer
      or a Group Company suspends payments;
or

            

    

    

    
      	
              g)

            	
              the Issuer
      or a Group Company applies for, or consents to, an application for
      corporate reorganisation in accordance with the national legislation or
      other similar procedure; or

            

    

    

    
      	
              h)

            	
              the Issuer
      or a Group Company is declared bankrupt;
or

            

    

    

    
      	
              i)

            	
              a resolution
      is passed for the winding-up of the Issuer or that a Group Company shall
      enter compulsory liquidation; or

            

    

    

    
      	
              j)

            	
              the Board of
      Directors of the Issuer prepares a merger plan according to which the
      Issuer shall be merged into a new or existing company without the prior
      written consent of the Issuing
Dealer.

            

    

    

    The Issuing Dealer shall have the right to
declare the Loan prematurely due and payable as a consequence of a circumstance
specified in sub-sections a) - e) above only in the event that such
circumstance, in the reasonable opinion of the Issuing Dealer, may have a
materially adverse effect on the interests of the Bondholders and, as a
consequence of a circumstance specified in sub-sections f) - i) above, with
respect to Group Companies, only in the event that such circumstance, in the
reasonable opinion of the Issuing Dealer, may have a materially adverse effect
on the interests of the Bondholders.

    

    In the event that the Issuing Dealer’s right
of termination is caused by a decision of a court of law, governmental
authority, or shareholders' meeting, it is not necessary that such decision has
gained legal force and that the period for appeal has expired.

    

    The Issuer shall
immediately notify the Issuing Dealer upon the occurrence of a circumstance
specified in sub-sections a) - j) above. In the absence of such notice, the
Issuing Dealer shall have the right to assume that no such circumstance has
occurred or is expected to occur, provided that the Issuing Dealer do not have
knowledge to the contrary. Upon reasonable request from the Issuing Dealer, the
Issuer shall provide the Issuing Dealer with a certificate regarding the
circumstances specified in this section. In addition, the Issuer shall provide
the Issuing Dealer with further information, which a Issuing Dealer may request
regarding the circumstances specified in this section and, upon request from
Issuing Dealer, provide it with any relevant document(s).

    

    
      	
               
      

            	
              The Issuer’s
      obligation to provide information pursuant to the preceding paragraph is
      only applicable provided that it does not violate rules issued by, or set
      forth in contracts with, an exchange or authorised marketplace on which
      the Issuer’s or a Group Company’s shares or debt instruments are listed,
      or otherwise does not violate applicable law or regulations issued by a
      governmental authority.

            

    

     

    -7-

    §
11     Change of Control

    

    If at any time
while any Bond hereunder remains outstanding a Change of Control has occurred (a
“Put Event”), the
Issuing Dealer, on behalf of the Bondholder’s, will have the option to require
the Issuer to redeem that Bond on the Optional Redemption Date (as defined
below) at its Redemption Amount (as defined in §7), together with accrued
interest to and including the Optional Redemption Date.

    

    A “Change of Control” shall be
deemed to have occurred at each time (whether or not approved by the Board of
Directors or the Executive Board of the Issuer) that any person (“Relevant Person”) or persons
acting in concert or any person or persons acting on behalf of any such
person(s), at any time directly or indirectly owns or acquires, (A) more than 50
per cent. of the issued ordinary share capital of the Issuer or (B) such number
of the shares in the capital of the Issuer carrying more than 50 per cent. of
the voting rights normally exercisable at a general meeting of the Issuer,
provided that a Change of Control shall not be deemed to have occurred if the
shareholders of the Relevant Person are also, or immediately prior to the event
which would otherwise constitute a Change of Control were, all of the
shareholders of the Issuer.

    

    Promptly upon the
Issuer becoming aware that a Put Event has occurred, the Issuer shall give
notice (a “Put Event
Notice”) to the Bondholders in accordance with §14 specifying the nature
of the Put Event and the circumstances giving rise to it and the procedure for
exercising the option contained in this §11.

    

    To exercise the
option to require redemption of a Bond under this §11 the holder of that Bond
must deliver such Bond, on any Business Day falling within the period (the
“Put Period”) of 45 days
after a Put Event Notice is given, to the Account Operator, accompanied by a
duly signed and completed notice of exercise (a “Put Option Notice”) and in
which the holder must specify the relevant VP-account to which payment is to be
made under this §11. The Account Operator to which such Bond and Put Option
Notice are delivered will issue to the holder concerned a non-transferable
receipt (a “Put Option
Receipt”) in respect of the Bond so delivered.

    

    The Issuer shall
redeem the Bonds, in respect of which Put Option Receipts have been issued, 60
days after the bondholder has received the Put Event Notice (the Optional Redemption Date),
unless previously redeemed and purchased. Payment in respect of any Bond so
delivered will be made on the Optional Redemption Date.

     

    -8-

    
 

    §12      Covenants

    

    The Issuer undertakes as long as any amount
hereunder remains outstanding:

    

    
      	
              a)

            	
              not to
      provide any security or permit any third party to provide security -
      either in the form of a guarantee or otherwise - for other market loans
      which have been incurred or may be raised by the
    Issuer.

            

    

    

    
      	
              b)

            	
              not to
      provide security for market loans - in any form other than a guarantee,
      which in turn may not be secured - which have been incurred or may be
      incurred by a party other than the Issuer;
and

            

    

    

    
      	
              c)

            	
              to ensure
      that all Group Companies, in their own borrowing, comply with the
      provisions of subsections a) and b) above with respect to market loans -
      in which context the relevant subsidiaries shall be subject to the
      provisions applicable to the Issuer subject to the exception, however,
      that the Issuer or a Group Company may provide guarantees for other Group
      Companies which in turn may not be
secured.

            

    

    

    
      	
               
      

            	
              In each case
      unless if the Issuing Dealer’s consent to the giving of collateral, or, if
      at least comparably valuable security is provided to the Bondholders at
      the same time.

            

    

    

    "Market loans" as used above
means loans in exchange for the issuance of commercial paper, bonds or other
securities (including medium term notes or other market loan programmes), which
are sold, brokered, or invested pursuant to an organised procedure.

    

    

    
      	
               
      

            	
              §13

            	
              Calculation
      Agent

            

    

    

    
      	
               
      

            	
              The
      calculations and determinations made by the Calculation Agent shall (save
      in the case of manifest error) be final and binding upon all
      parties.  The Calculation Agent shall have no responsibility for
      good faith errors or omissions in any calculation made by it as provided
      herein.

            

    

    

    
      	
               
      

            	
              In the event
      that a change in circumstances not accounted for herein occurs which in
      the reasonable opinion of the Calculation Agent requires changes in these
      terms and conditions, then the Issuer shall be entitled to make such
      adjustments of the terms hereof as the Calculation Agent in its sole and
      absolute discretion shall deem necessary in order to preserve to the
      largest extent possible to the Issuer and the Bondholder in the original
      economic basis hereunder.

            

    

    

    
      	
               
      

            	
              The Issuer
      shall inform the Bondholder of any changes which may be made in accordance
      with this section as soon as practicable
  thereafter.

            

    

    

    
      	
               
      

            	
              The
      Calculation Agent shall have no responsibility for good faith errors or
      omissions in any calculation made by it as provided
  herein.

            

    

     

    -9-

    
      	
               
      

            	
              §14

            	
              Notices

            

    

    

    
      	
               
      

            	
              Any notices
      shall be sent to each Bondholder at the address as registered with
      VPC.

            

    

    

    
      	
               
      

            	
              §15

            	
              Change
      of these terms

            

    

    

    
      	
               
      

            	
              These terms
      and conditions can be changed upon agreement thereof between the Issuer
      and all of the Bondholders. Such agreement shall be confirmed in writing
      and signed by or on behalf of the Issuer and each
    Bondholder.

            

    

    

    
      	
               
      

            	
              §16

            	
              Listing

            

    

    

    
      	
               
      

            	
              The Loan
      will not be listed.

            

    

    

    
      	
               
      

            	
              §17

            	
              Nominee
      Registration

            

    

    

    
      	
               
      

            	
              For Bonds
      registered in nominee form under Chapter 3 of the Registration of
      Financial Instruments Act (1998:1479) the nominee shall be regarded as
      Bondholder for the purpose of these terms and
  conditions.

            

    

    

    
      	
               
      

            	
              §18

            	
              Limitation
      of the Issuer’s and VPC’s Liability

            

    

    

    
      	
               
      

            	
              In respect
      of the measures to be taken by the Issuer, the Issuing Dealer, the
      Calculation Agent and VPC, respectively, and taking in the case of VPC
      into account the provisions of the Registration of Financial Instruments
      Act (1998:1479), the Issuer, the Issuing Dealer, the Calculation Agent and
      VPC shall not be responsible for any damages arising out of any Swedish or
      foreign legislation, any measure undertaken by any Swedish or foreign
      public authority, act of war, strike, blockade, boycott, lock-out or any
      other similar circumstances. The reservation in respect of strike,
      blockade, boycott and lock-out shall apply even if the Issuer, the Issuing
      Dealer, the Calculation Agent or VPC themselves take or are subject to
      such actions.

            

    

    

    
      	
               
      

            	
              Nor shall
      the Issuer, the Issuing Dealer, the Calculation Agent or VPC be held
      responsible for any other damage as long as the Issuer, the Issuing
      Dealer, the Calculation Agent or VPC, as applicable, have acted with
      reasonable care. In addition, in no case shall there be any right to
      reimbursement for indirect damage.

            

    

    

    
      	
               
      

            	
              Should the
      Issuer, the Issuing Dealer, the Calculation Agent or VPC not be able to
      fulfil their obligations under these terms because of any of the events
      stated in the first paragraph, such obligations shall be fulfilled as soon
      as the obstacle has been removed.

            

    

    

    
      	
               
      

            	
              The above
      shall apply, unless otherwise stated in the Registration of Financial
      Instruments Act (1998:1479).

            

    

    

    §19     Confidentiality

     

    -10-

    
      	
               
      

            	
              The Issuer
      shall be entitled to require extracts from the book of debts, including
      nominee list of owners, at VPC.

            

    

    

    The Issuer and VPC
may not unduly disclose any information on Bondholders to third parties,
however, The Issuer is entitled to disclose any information on bondholders to
the Arranger.

    

    §20      Selling
Restriction

    

    The Bonds may not be sold or otherwise
transferred to any U.S. person (within the meaning of Section 7701(a) of the
Internal Revenue Code of 1986). This restriction shall not apply in case of
repurchasing/cancellation by the Issuer. For the avoidance of doubt the
restriction is not applicable when the Bonds are redeemed.

    

    

    §21      Governing
Law and Jurisdiction

    

    
      	
               
      

            	
              Swedish law
      shall apply to the interpretation and application of these terms and
      conditions.

            

    

    

    
      	
               
      

            	
              Disputes
      shall be settled by the District Court of Stockholm in the first
      instance.

            

    

    

    

    

    

    

    *****

     

    Stockholm as of 17
October 2008

    

    

    
      Autoliv
Inc.

    

    

    
      
        	
                 

              	 
      	
                 

              
	
                Name:

              	 
      	
                Name:

              
	
                Title:

              	 
      	
                Title:

              

      

    

     

    -11-

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