Document:

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
co-operate in all matters regarding the defence,

 

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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 OfficerEX-4.2 Tax Sharing and Indemnity Agreement

 

Exhibit 4.2

TAX SHARING AND INDEMNITY AGREEMENT

This TAX SHARING AND INDEMNITY AGREEMENT (the “Agreement”) is dated as of the 5th day of April,
2006, by and between Electrolux Holdings, Inc., an Ohio corporation (“EHI”), Electrolux Home
Products, Inc., a Delaware corporation (“EHP”), Husqvarna Professional Outdoor Products, Inc., an
Ohio corporation (“HPOP”), Husqvarna Outdoor Products Inc., a Delaware corporation (“HOP”),
Husqvarna AB, a Sweden corporation (“HAB”), and AB Electrolux (publ), a Sweden corporation (“ABE”).
EHI, EHP, HPOP, HOP, HAB, and ABE will be collectively referred to herein as the “Parties.”

R E C I T A L S

	1.	 	This Agreement is an “Ancillary Agreement,” as defined in the Master Separation Agreement
(the “MSA”) dated September 9, 2005, between ABE and HAB. For further background, refer to
Part 1, Introduction, of the MSA. The Parties intend to accomplish three objectives in this
Agreement:

a. First, the Parties intend to prescribe the specific principles under which they will
indemnify one another with respect to the Tax Liabilities that relate to EHI, EHP, HPOP, and
HOP and are paid after the Second Distribution Date.

b. Second, they want to establish a basis pursuant to which they 1) will cooperate with one
another with respect to Tax Returns that are filed after the Second Distribution Date and
with respect to any Tax audits and other Tax controversies that commence or continue after
the Second Distribution Date, and 2) will share business records and other materials that
are relevant to Taxes.

c. Finally, ABE and HAB intend to prescribe general principles by which corporations (other
than EHI, EHP, HPOP, and HOP) that are made subject to this Agreement and that do business
and are taxable in jurisdictions outside the United States can achieve substantially the
same objectives with respect to their Tax Liabilities after the Indoor Corporations and
Outdoor Corporations in each such jurisdiction are separated from one another.

	2.	 	The intent and purpose of the Demerger transaction are to effect a separation of the ABE
Group’s worldwide Outdoor Business from its worldwide Indoor Business for the purpose of
promoting and facilitating the fulfillment of the different strategic plans for each of those
businesses. ABE plans to accomplish that objective by a distribution of all the outstanding
stock of HAB to its shareholders of record on the Demerger Date. That distribution will occur
on the Final Distribution Date, when HAB will hold, directly or

 

 

	 	 	through subsidiary corporations, substantially all of the assets comprising the ABE Group’s
worldwide Outdoor Business.
	 
	3.	 	The Parties intend 1) that the distribution of that portion of the Outdoor Business conducted
in the United States will occur in a series of three distribution transactions that will each
qualify as a tax-free distribution, or “spin-off,” under Section 355 of the Internal Revenue
Code of 1986, as amended (the “Code”), and that those three transactions will be collectively
referred to as the “Spin-off” for United States federal income tax purposes, 2) that two of
those transactions will qualify both as a tax-free distribution under Section 355 of the Code
and as a “Reorganization” under Section 368 of the Code, and 3) that the MSA, either
separately or in conjunction with one or more of the Ancillary Agreements,, will constitute
the “Plan of Distribution and Reorganization,” for United States federal income tax purposes,
with respect to the United States portion of the Outdoor Business. The rights, duties, and
obligations created by this Agreement are intended to be consistent with such United States
Tax treatment and are expected to be construed and applied in a manner that will not interfere
with or contravene such Tax treatment.

NOW, THEREFORE, in consideration of the premises, it is agreed as follows:

	1.	 	Definitions. Unless otherwise defined in this Agreement, capitalized terms shall
have the definition prescribed in the MSA. Unless the context requires otherwise, the plural
includes the singular and the singular includes the plural. For purposes of this Agreement:

a. “ABE Group” consists of ABE and each corporation of which ABE owns all or a majority
interest of the capital stock.

b. “Accountant” means such national or international accounting firm with a reputation for
expertise in matters of taxation in the relevant jurisdiction as the Parties may mutually
agree to use from time to time. Selection of an Accountant shall be made with respect to
each dispute on which the Parties seek consultation. If the Parties cannot mutually agree
on the selection of the Accountant for purposes of a dispute, the selection shall be made
under the procedures prescribed in Section 14 hereof and Section 8.12 of the MSA relating to
binding arbitration.

c. “After-Tax Amount” is defined in Section 16.

d. “Audit Notification” is defined in Section 11(a).

e. “Code” is defined in the third Recital to the Agreement.

f. “Common Parent” means the corporation that is principally responsible for preparing and
submitting a consolidated or combined return or report that includes the Tax Items of more
than one member of a Group.

- 2 -

 

g. “Consolidated return,” “consolidated group,” “taxable year,” “carryback,” “member,” and
similar terms used herein and bearing on United States federal income tax liability shall
have the respective meanings ascribed to them in the Code and the Treasury Regulations
thereunder, and, where applicable, specifically the provisions thereof relating to
consolidated federal income tax returns. For state, local, or foreign tax purposes, such
terms shall be interpreted and applied in a manner so as to achieve as nearly as possible
with respect to that jurisdiction the intention reflected herein with respect to the United
States federal income tax; and “combined return,” “combined report,” or similar terms shall
mean a Tax Return that relates to a Tax that applies on a basis whereby one or more members
of a Group are consolidated or combined for purposes of reporting Tax Liability to such Tax
Authority (including through a unitary Tax Return).

h. “EHI,” “EHP,” “HPOP,” HOP,” “HAB,” and “ABE,” are defined in the opening paragraph of the
Agreement.

i. “EHI Group” means the Group that includes EHI and those of its Tax Affiliates that join
with EHI in the filing of the consolidated U.S. federal corporate income tax return.

j. “EHI’s Refunds” is defined in Section 6(a).

k. “HPOP’s and HOP’s Refunds” is defined in Section 6(b).

l. “Final Determination” shall mean the final resolution of any Tax (or other tax-related
matter) for a taxable period, including (1) by the expiration of a statute of limitations or
a period for the filing of claims for refund, amending Tax Returns, appealing from adverse
determinations or recovering any refund (including by offset), (2) by a decision, judgment,
decree, or other order by a court of competent jurisdiction that has become final and
unappealable, (3) by a closing agreement or accepted offer in compromise under Sections 7121
or 7122 of the Code, or comparable agreements under the laws of other jurisdictions, (4) by
execution of an IRS Form 870 or 870AD (or any successor IRS form) or by execution of a
comparable form under the laws of other jurisdictions (notwithstanding that, with respect to
a particular Tax issue for a particular taxable period, any such form may reserve — whether
by its terms or by operation of law — the right of the taxpayer to file a claim for refund
and/or the right of the Tax Authority to assert a further deficiency with respect to any
such Tax issue for such period), or (5) by any allowance of a refund or credit, but only
after the expiration of all periods during which such refund or credit may be recovered
(including by way of offset).

m. “Final Distribution” is the distribution by ABE to the ABE shareholders of the stock of
HAB as part of the Demerger and as the final step in the Spin-off.

n. “Final Distribution Date” is the date on which all actions (specifically including the
actual distribution of the HAB stock) required to complete the Final Distribution and

- 3 -

 

to vest the ABE shareholders of record on the Demerger Date with the burdens and benefits of
owning the HAB stock have been completed.

o. “First Distribution” is the distribution by EHP to EHI of all of the stock of HOP.

p. “Government Notice” is defined in Section 13(a).

q. “Group” means two or more corporations, all of which are Tax Affiliates.

r. “HAB Group” means the Group existing after the Demerger in which HAB is the highest-tier
entity.

s. “Income Taxes” means any Tax based on or measured by or with respect to gross or net
income (including, without limitation, capital gain taxes, minimum taxes, income taxes
collected by withholding and Taxes on Tax preference items) or receipts (together with any
interest, penalties, and additions to Tax imposed with respect thereto).

t. “Income Tax Return” means any Tax Return with respect to Income Taxes.

u. “Indemnified Party” and “Indemnifying Party” are defined in Section 13(a).

v. “Indoor Corporation” is defined in Section 17(b).

w. “IRS” means the United States Internal Revenue Service.

x. “Notice” is defined in Section 13(a).

y. “Notifying Party” and “Notified Party” are defined in Section 11(a).

z. “Objection Notice” is defined at Section 13(b).

aa. “Opinion” means the legal opinion rendered by Squire, Sanders & Dempsey L.L.P. to ABE,
EHI, and EHP with respect to certain of the United States federal income tax consequences of
the Spin-off.

bb. “Outdoor Corporation” is defined in Section 17(b).

cc. “Parties” is defined in the opening paragraph of the Agreement.

dd. “Person” means an individual, a partnership, a corporation, an association, a joint
stock company, a trust, a joint venture, an unincorporated association, a limited liability
company, a governmental entity (or any department, agency, or political subdivision
thereof), or any other entity.

ee. “Post-Distribution Carryback” is defined in Section 7(a).

- 4 -

 

ff. “Representation Right” is defined in Section 11(b).

gg. “Ruling” means the private letter ruling that the IRS issued to EHI, EHP, and ABE, dated
June 27, 2005, with respect to certain United States federal income tax consequences of the
Spin-off.

hh. “Ruling Documents” means the Request for Ruling that is dated January 31, 2005, and that
was submitted to the IRS on February 1, 2005, as well as the supplemental materials that
were submitted to the IRS on April 1, 2005, April 3, 2005, and June 8, 2005, and any other
materials that were submitted to the IRS in connection with the Ruling.

ii. “Second Distribution” is the distribution by EHI of the stock of HOP and HPOP to ABE.

jj. “Second Distribution Date” means the date on which all actions required to complete the
Second Distribution (specifically including the actual distribution of the HPOP and HOP
stock to ABE) and to vest ABE with the burdens and benefits of owning the stock of HPOP and
HOP have been completed.

kk. “Separate Liability” has the meaning prescribed in Section 2 of the Agreement, and, with
respect to Outdoor Corporations and Indoor Corporations that are listed in Schedule 17, in
Section 17(g) of the Agreement.

ll.
“Short Period Group” is defined in Section 4(a).

mm. “Spin-off” is defined in the third Recital to the Agreement.

nn. “Straddle Period” means any taxable period that begins on or before the Second
Distribution Date and ends after the Second Distribution Date. For this purpose, the fact
that a taxable period is deemed to close with respect to one or more of the Parties as a
result of one or more of the distributions that are part of the Spin-off shall be
disregarded.

oo. “Straddle Period Returns” is defined in Section 9(b).

pp. “Supplemental Ruling” means (a) any private letter ruling (other than the Ruling) issued
by the IRS in connection with the Spin-off (and/or any related transactions) or (b) any
similar ruling issued by any Tax Authority other than the IRS in connection with Spin-off
(and/or any related transactions).

qq. “Supplemental Ruling Documents” means any request for a Supplemental Ruling submitted to
the IRS or any other Tax Authority together with the appendices and exhibits thereto and any
supplemental filings or other materials subsequently submitted to the IRS or other Tax
Authority in connection with the Spin-off (and/or any related transactions).

- 5 -

 

rr. “Tax” means any tax, charge, fee, impost, levy or other assessment, including, without
limitation, all net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation, property
and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever
and includes any transferee liability in respect of such Taxes, as well as any interest,
penalties, additions to tax, or other additional amounts owing with respect to or related to
the foregoing.

ss. “Tax Affiliate” means, with respect to any Person, any other Person who, directly or
indirectly, controls, is controlled by, or is under common control with, such Person;
provided, however, that for purposes of this Agreement, Tax Affiliates of EHI will not
include HPOP or HOP, and EHI and its Tax Affiliates will not be included among the Tax
Affiliates of HPOP and HOP, unless the language of the Agreement or the context

clearly indicates otherwise.

tt. “Tax Attribute” means any net operating losses, minimum tax credits, nonconventional
fuel tax credits, net capital losses, charitable contributions, foreign income tax
deductions, foreign income tax credits, or any similar item of income, gain, loss,
deduction, or credit, or other similar item that may have the effect of increasing or
decreasing any Tax.

uu. “Tax Authority” means a governmental authority or any subdivision, agency, commission,
or authority thereof or any quasi-governmental or private body having jurisdiction over the
assessment, determination, collection, or imposition of any Tax (including, without
limitation, the IRS).

vv. “Tax Benefit” means a reduction in the amount of Taxes that would otherwise be payable,
whether resulting from a deduction, credit, reduced gain or increased loss from the
disposition of an asset, or otherwise; a person will be deemed to have recognized a Tax
Benefit at the time the amount of Taxes such person otherwise would pay is reduced.

ww. “Tax Item” is defined in Section 4(a).

xx. “Tax Liability” means the liability of any Party or other corporation subject to this
Agreement for any U.S. federal, state, or local Taxes or for any Taxes imposed by any Tax
Authority that is outside the United States.

yy. “Tax Returns” means all returns, declarations, reports, claims for refunds, information
returns, statements, and other forms required to be filed with respect to any Taxes,
including any schedule or attachment thereto, and including any amendments or supplements
thereof.

zz. “Two-Year Period” means the period of time that commences on the day after the Final
Distribution Date and that concludes at the close of the second anniversary of the Final
Distribution Date.

- 6 -

 

	2.	 	Separate Liability. For purposes of this Agreement:

a. If HPOP, HOP, EHI, EHP, or any of their Tax Affiliates files a separate Tax Return with
any Tax Authority, its Separate Liability shall be the Tax Liability originally reported on
such Tax Return and, in the event of a Final Determination, any change in such Tax Liability
as a result of the Final Determination.

b. If HPOP or HOP joins with other corporations in the filing of a consolidated or combined
return or report with any Tax Authority, the Separate Liability shall be determined as if
HPOP or HOP had filed its own separate Tax Return with such Tax Authority, except as
otherwise provided herein, in which it reported those items of income, expense, deduction,
loss, credit, and similar Tax Items that were included in such consolidated or combined
return or report and are properly attributable or allocated to HPOP or HOP, and, in the
event of a Final Determination, any change in such Separate Liability as a result of such
Final Determination. For purposes of making the foregoing computations, the following
adjustments shall be made:

i. For taxable years in which the Outdoor Business was operated as divisions of EHP,
HOP shall be treated as though it was in existence as a separate taxable corporation
that conducted the Outdoor Business of EHP in each such taxable year for purposes of
making the determinations of Tax Liability and Separate Liability prescribed in this
Agreement. HOP shall be treated as though it, rather than EHP, is obligated to pay
the portion of EHP’s Tax Liability attributable to the activities and operations of
all of the businesses that were engaged in the Outdoor Business and were held by EHP
during the taxable period in question, to the same extent as if HOP had been in
existence in such taxable period and had conducted the activities and operations of
all such businesses during such taxable period, and without regard to whether EHP
actually contributed all of such businesses to HOP. For this purpose, HOP shall be
deemed to be subject to the taxing authority of each jurisdiction to which EHP was
subject for the taxable periods in question, and in each taxable period HOP shall be
deemed to be the principal obligor on an amount of EHP debt equal to that percentage
of the total amount of EHP debt outstanding at the end of such taxable period as is
equal to the percentage of the EHP debt that HOP actually assumed prior to the First
Distribution. HOP shall be deemed to have paid or accrued such interest on such
percentage of the EHP debt as EHP actually paid or accrued on such percentage of
such debt during the taxable period in question.

ii. The taxable income brackets in the tax table in Section 11 of the Code, or in
the equivalent provision of another tax statute or ordinance, shall be allocated
among the corporations that join in the consolidated or combined return or report
for the taxable period based on the percentage that each of their taxable incomes,
determined as set forth herein, for that taxable period bears to the sum of the
taxable incomes of all members of the Group for such taxable period. In the event
any Group member has a loss, such member shall be deemed to have no taxable

- 7 -

 

income for the purpose of allocating such taxable income brackets for such taxable
period.

iii. All tax credits and adjustments to tax credits, including but not limited to
foreign tax credit, investment credit, investment credit recapture, research credit,
and targeted jobs credit, shall be allocated to the Group member earning such credit
during the taxable period (and in the case of a credit recapture, the member that
earned the recaptured credit in a prior taxable period). In allocating such
credits, tax credits (and related adjustments) shall be divided into three
categories. First, foreign tax credits shall be allocated among the Group members
separately from all other credits. Second, those credits described in Section 38 of
the Code shall be allocated among the Group members, separately from other credits.
Third, any other credits shall then be allocated among the Group members. In making
each such allocation, each Group member shall receive a proportion of the total
credits earned in each category as its separate credits bear to the total of such
credits during such taxable period.

iv. The U.S. federal alternative minimum tax (“AMT”), and any similar tax imposed by
another Tax Authority, will be determined on a consolidated or combined basis.
Members should first compute their Tax Liability on a separate entity basis without
considering the AMT. If AMT exceeds the regular tax on a consolidated or combined
basis, the excess will be allocated to the members based upon the portion of tax
preferences, adjustments, and other items causing the AMT to be applicable at the
consolidated level that are attributable to such member. If the total AMT allocated
to members of the Group exceeds the consolidated AMT in any taxable year, each
member will be allocated its proportionate share of the consolidated AMT according
to the percentage derived by dividing the separate AMT determined above by the sum
of all members’ separate AMT as determined above. This provision shall not apply
for purposes of Section 17 hereof except to the extent that a foreign Taxing
Authority imposes a Tax that is substantially similar in effect to the AMT.

v. All Tax elections shall conform to the elections made by the consolidated or
combined group.

vi. Dividends received from any other member of the Group will be treated as
qualifying for the 100 percent dividend-received deduction. The dividend- received
deduction attributable to other sources shall be allocated consistently with the
provisions of the Code and regulations applicable to corporations filing separate
returns.

vii. Determinations of short-term and long-tern capital gains and losses and
ordinary income gain and losses shall be made on a separate-return basis. Gain or
loss on intercompany transactions, whether deferred or not, shall be treated in the
manner required by Section 1.1502-13 of the Treasury Regulations.

- 8 -

 

viii. To the extent that state or local Taxes are determined on a consolidated or
combined return basis, the amount of state or local Taxes deducted in determining
Separate Liability of U.S. federal income tax shall be determined by applying the
principles prescribed herein to the consolidated or combined state or local Tax
Returns.

c. In the case of a Tax that is not paid by the filing of a Tax Return, the Separate
Liability of HPOP or HOP for such Tax shall be the amount of Tax Liability that would be
imposed on such corporation for such Tax if it were a corporation unrelated to EHI, EHP, and
their Tax Affiliates when the transaction or event giving rise to such Tax occurred or
arose. For this purpose, HOP shall be deemed to be subject to the taxing authority of each
jurisdiction to which EHP was subject for the taxable periods in question. The Separate
Liability of EHI, EHP, or any of their Tax Affiliates for a Tax that is not paid by the
filing of a Tax Return shall be the amount of Tax Liability that would be imposed on such
corporation for such Tax if it were a corporation unrelated to HPOP and HOP when the
transaction or event giving rise to such Tax occurred or arose. If the actual liability of
the EHI Group for such Tax exceeds the sum of the Separate Liabilities as determined above,
the Parties shall determine cooperatively and in good faith a fair and equitable way to
apportion such excess among EHI, EHP, HPOP, and HOP. In the event of a Final Determination,
all of such Tax Liabilities shall be recalculated to take into account changes that result
from the Final Determination.

d. If EHI, EHP, or any of their Tax Affiliates files a consolidated or combined return or
report with any Tax Authority, the Separate Liability with respect to such Tax shall be
determined collectively for the members of the EHI Group that join such Tax Return. Such
Separate Liability will be the consolidated or combined Tax Liability reflected on such Tax
Return minus the Separate Liability of any of HPOP, HOP, and their Tax Affiliates that join
in such Tax Return. In the event of a Final Determination, all of such Separate Liabilities
shall be recalculated to take into account changes that result from the Final Determination.

e. Each Party and its Tax Affiliates will take reasonable and appropriate measures to
minimize the Separate Liability of other Parties and their Tax Affiliates if it can do so
without causing an increase in its own Separate Liability or that of any of its Tax
Affiliates.

	3.	 	Taxes Allocated to EHI and EHP. ABE, EHI, and EHP will be responsible for, will pay
or cause to be paid, and will indemnify and hold HAB, HPOP, and HOP harmless from and against
any and all liability for the following Taxes or amounts:

a. The Separate Liabilities of EHI, EHP, and/or their Tax Affiliates for all Taxes relating
to all taxable periods as well as the Tax Liability reported on any consolidated or combined
tax return or report that EHI, EHP, or any of their Tax Affiliates may join and that does
not include HPOP or HOP;

- 9 -

 

b. Any Taxes imposed on or asserted against HPOP or HOP pursuant to Section 1502-6 of the
U.S. Treasury regulations or any similar provisions relating to federal, state, local, or
foreign Taxes, as a result of HPOP or HOP being included with EHI, EHP, or any of their Tax
Affiliates in a consolidated return or combined return or report, but not including any
liability for Taxes that are included in the Separate Liability of HPOP, HOP, or any of
their Tax Affiliates.

c. Except for those Taxes for which HAB, HPOP, and HOP have agreed to indemnify ABE and/or
other members of the Indoor Group pursuant to Section 12, all Taxes imposed on EHI, EHP,
HPOP, and HOP, or any of their Tax Affiliates as a result of the Spin-Off.

d. All Taxes and interest allocated or apportioned to EHI, EHP, and/or any of their Tax
Affiliates pursuant to Section 4.

	4.	 	Straddle Periods and Estimated Tax.

a. In the case of any Straddle Period for which a consolidated or combined return or report
(“consolidated return”) is filed and that includes the income, expenses, deductions, losses,
credits, and any other Tax items (“Tax Items”) of HPOP and/or HOP, on the one hand, or EHI
and/or any of its Tax Affiliates, on the other hand, (in each case, the “Short Period
Group”) for only a portion of the Straddle Period, the Tax Items of the Short Period Group
for the Straddle Period shall be allocated between (i) the portion of the Straddle Period
during which the members of the Short Period Group are so included and (ii) the portion of
such Straddle Period during which the members of the Short Period Group are not so included.
This allocation shall be made in accordance with the principles of Section 1.1502-76(b) of
the Treasury Regulations, or the equivalent provisions of the laws applicable to another Tax
Authority, as reasonably interpreted and applied by the Common Parent.

b. The Common Parent will determine the Separate Liability of the members of the Short
Period Group for the portion of the Straddle Period included in the consolidated return
using the Tax Items allocated to them and included in such consolidated return. The members
of the Short Period Group will be responsible for, will pay or cause to be paid, and will
indemnify and hold harmless the Common Parent, and its Tax Affiliates, for the amount of
such Separate Liability. The members of the Short Period Group shall pay the amount of such
Separate Liability to the Common Parent within five (5) days of receiving a written request
therefor. If such amount is not paid within such five (5) business days, members of the
Short Period Group will also pay the Common Parent interest on such Separate Liability, at
the rate of interest prescribed in Section 15 hereof, for the period beginning on the day on
which such written request is received and ending on the day before the payment is made.

c. The members of the Short Period Group will determine their Separate Liability for the
portion of the Straddle Period that is not included in the consolidated return referenced in
a. and b. above by including all of their respective Tax Items for the

- 10 -

 

Straddle Period that are not included in the consolidated return, and they will each be
responsible for, will pay or cause to be paid, and will indemnify and hold the Common Parent
and its Tax Affiliates harmless from and against the amount of such Separate Liability.

d. The members of the Short Period Group will be jointly and severally responsible for, will
pay or cause to be paid, and will indemnify and hold harmless the Common Parent and its Tax
Affiliates for the portion of any estimated Taxes or similar payments or deposits
(“estimated tax”) that are required by any Tax Authority and that are attributable to the
Separate Liability described in b. above. The members of the Short Period Group shall pay
such estimated Taxes or similar payments or deposits to the Common Parent within five (5)
business days after receiving a written request therefor, which the Common Parent will send
no sooner than ten (10) business days before such estimated Tax payment or deposit is
required to be paid. If such amount is not paid within such five (5) business days, members
of the Short Period Group will also pay the Common Parent interest on such Separate
Liability, at the rate of interest prescribed in Section 15 hereof, for the period beginning
on the day such written request is received and ending on the day before the payment is
made. The requirements of this paragraph with regard to payments of estimated tax shall
also apply to all other circumstances where a member of the Indoor Group is required to pay
estimated taxes on behalf of a member of the Outdoor Group, or vice versa, whether or not
that obligation arises because of a consolidated return.

e. Payments of estimated tax, whether made to the Common Parent, to a member of the Indoor
Group by a member of the Outdoor Group or vice versa, or directly to a Tax Authority, will
be applied toward full or partial satisfaction (as the case may be) of the Separate
Liability of the Party making such payment for the underlying Tax and of its indemnity
obligation with respect to such Tax under Section 3 or 5 hereof.

	5.	 	Taxes Allocated to HPOP and HOP.

HAB, HPOP, and HOP will be responsible for, will pay or cause to be paid, and will indemnify
and hold ABE, EHI, EHP, and their Tax Affiliates harmless from and against any and all
liability for the following Taxes or amounts:

a. The Separate Liabilities of HPOP, HOP, and/or their Tax Affiliates for all Taxes
relating to all taxable periods, as well as the Tax Liability reported on any consolidated
or combined tax return or report that HPOP or HOP may join and that does not include EHI,
EHP, or any of their Tax Affiliates.

b. All Taxes allocated to HPOP and/or HOP pursuant to Section 12.

c. All Taxes and interest allocated or apportioned to HPOP, HOP, and/or any of their Tax
Affiliates pursuant to Section 4.

	6.	 	Refunds of Indemnified Taxes.

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a. If, after the date of this Agreement, EHI, EHP, or any of their Tax Affiliates have paid
HPOP, HOP, or any of their Tax Affiliates any amounts on account of Taxes for which HPOP and
HOP are indemnified pursuant to this Agreement, HPOP and/or HOP will promptly remit to EHI
an amount equal to all refunds (including interest thereon and any amounts applied against a
Tax Liability for other taxable periods) of any such amounts (“EHI’s Refunds”).

b. If, after the date of this Agreement, HPOP, HOP, or any of their Tax Affiliates have paid
EHI, EHP, or any of their Tax Affiliates any amounts on account of Taxes for which EHI,
EHP, or their Tax Affiliates are indemnified pursuant to this Agreement, EHI will promptly
remit (and will cause its Tax Affiliates to promptly remit) to HPOP and/or HOP an amount
equal to all refunds (including interest thereon and any amounts applied against a Tax
Liability for other taxable periods) of any such amounts (“HPOP’s and HOP’s Refunds”).

c. Upon the request of EHI, HPOP and/or HOP will file or cause to be filed claims for EHI’s
Refunds in such form as EHI may reasonably request. EHI will have the sole right to
prosecute any claims for EHI’s Refunds (by suit or otherwise) at EHI’s expense and with
counsel of EHI’s choice. HPOP and HOP will cooperate fully with EHI and its counsel in
connection with any claims for EHI’s Refunds.

d. Upon the request of HPOP and HOP, EHI will file or cause to be filed claims for HPOP’s
and HOP’s Refunds in such form as HPOP and HOP may reasonably request. HPOP and HOP will
have the sole right to prosecute any claims for HPOP’s and HOP’s Refunds (by suit or
otherwise) at HPOP and HOP’s expense and with counsel of HPOP’s and HOP’s choice. EHI will
cooperate fully with HPOP and HOP and its counsel in connection with any claims for HPOP’s
and HOP’s Refunds.

e. Except as otherwise provided in this Agreement, any refunds of Taxes other than EHI’s
Refunds or HPOP’s and HOP’s Refunds will be the property of the payee of such refunds and no
other party to this Agreement or its Tax Affiliates will have any right to such refunds.

f. HPOP, HOP, or EHI may decline to file or cause to be filed any claim requested to be
filed under paragraphs c or d hereof if it reasonably determines that such claim does not
have a realistic possibility of success if litigated. Any disagreements between the Parties
as to whether a requested claim has a realistic possibility of success if litigated may be
submitted for resolution pursuant to Section 14. However, if the decision of the
arbitrators is that there is a realistic possibility of success if litigated, the Party
requesting the filing of the claim shall provide the Party filing the claim with an
indemnity, reasonably acceptable to the filing Party, against any and all penalties that may
be incurred as a result of filing such claim.

	7.	 	Tax Carrybacks

- 12 -

 

a. If HPOP or HOP incurs any net operating loss, net capital loss, or other deduction or
credit in any taxable period ending after the Second Distribution Date (a “Post-Distribution
Tax Attribute”) that may be carried back to any taxable period ending on or before the
Second Distribution Date, it shall elect, at such time and in such manner as are prescribed
by the relevant Tax law, to waive or forgo such carryback and instead carry such
Post-Distribution Tax Attribute forward to future taxable years of HPOP or HOP or their Tax
Affiliates (a “Carryback Waiver”). If the relevant Tax law permits a Carryback Waiver
(assuming a timely election) with respect to a Post-Distribution Tax Attribute, EHI and EHP
will have no obligation to cooperate or participate in a carryback of such Post-Distribution
Tax Attribute, and no such carryback shall occur. If the relevant Tax law does not permit a
Carryback Waiver (assuming a timely election) with respect to such Post Distribution Tax
Attribute, EHI and EHP will cooperate with HPOP and HOP in filing an appropriate refund
claim or amended Tax Return with respect to such Post-Distribution Tax Attribute and will
assign and promptly remit to HPOP or HOP the amount of any refund of Tax received by, or Tax
Benefit recognized by, EHI or EHP or any of their Tax Affiliates, as a result of such
Post-Distribution Tax Attribute. In remitting such amount, EHI or EHP may reduce the amount
of remittance of any refund of Tax received by it to take account of any Tax Liability that
EHI, EHP, or any of their Tax Affiliates may incur on account of such refund of Tax.

b. If EHI or EHP makes any remittance to HPOP and HOP under Section 7(a) hereof and all or
part of such Post-Distribution Tax Attribute is subsequently disallowed or a Tax Liability
is imposed on the refund that gave rise to such remittance in an amount greater than EHI or
its Tax Affiliate withheld therefrom, then HPOP and/or HOP shall promptly pay to EHI or EHP
that portion of the remittance that relates to the portion of the Post-Distribution Tax
Attribute that is disallowed or the additional Tax imposed thereon and, in addition
thereto, any other costs or expenses incurred by EHI or EHP in respect to the disallowed
portion of the Post-Distribution Tax Attribute or an additional Tax imposed thereon,
including any interest attributable thereto that is assessed by the Tax Authority.

	8.	 	No Obligation to File Amended Tax Returns.

Except as otherwise specifically provided in this Agreement, neither EHI, EHP, HPOP, HOP nor
any of their respective Tax Affiliates, will be obligated to file any amended Tax Return or
other Tax refund claim.

	9.	 	Preparation and Filing of Tax Returns.

a. EHI or EHP will prepare or cause to be prepared, and file or cause to be filed (i) all
consolidated, combined, or unitary Income Tax Returns of EHI or any of its Tax Affiliates
that include HPOP and HOP and that are listed in Schedule 9(a)(i) hereto, and (ii) all
Income Tax Returns required to be filed by or on behalf of HPOP and HOP for taxable periods
ending on or before the Second Distribution Date and that are listed in Schedule 9(a)(ii)
hereto, and (iii) all other Tax Returns required to be filed by or on behalf of HPOP and HOP
with respect to taxable events or periods occurring or ending

- 13 -

 

on or before the Second Distribution Date. EHI and EHP covenant that, except for the
returns referenced in Schedule 9(a)(i) hereto, neither they nor any of their Tax Affiliates
will file or cause to be filed any consolidated, combined, or unitary returns that include
HPOP and HOP without giving HPOP and HOP at least thirty (30) days notice of their intent to
do so and obtaining the prior written approval of HPOP and HOP to being so included, which
approval will not be unreasonably withheld.

b. HPOP and HOP or one of their Tax Affiliates will prepare or cause to be prepared, and
file or cause to be filed, all Tax Returns of HPOP and HOP other than those set forth in
Section 9(a) hereof. All Tax Returns for taxable periods including, but ending after, the
Second Distribution Date (“Straddle Period Returns”) will be prepared in a manner consistent
with the EHI Group’s past Tax accounting practice and, in the absence thereof, with
reasonable Tax accounting practices selected by HPOP and HOP.

c. HPOP and HOP will assist EHI or EHP in timely obtaining any required signatures or other
filing requirements in respect of Tax Returns prepared by EHI or EHP for HPOP and HOP
pursuant to Section 9(a).

d. Upon request of either HPOP and HOP, on the one hand, or EHI or EHP, on the other hand,
the other Parties shall make available prior to filing (and after filing) for inspection and
copying all Tax Returns and related workpapers with respect to Taxes to the extent that (i)
such Tax Return relates to Taxes for which the requesting party may be liable, (ii) such Tax
Return relates to Taxes for which the requesting party may be liable in whole or in part for
any additional Taxes owing as a result of adjustments to the amount of Taxes reported on
such Tax Return, or (iii) the requesting party reasonably determines that it must inspect
such Tax Return to confirm compliance with the terms of this Agreement. EHI, EHP, HPOP, and
HOP shall attempt in good faith to resolve any issues arising out of the review of such Tax
Returns.

	10	 	Cooperation; Access to Information; Tax Records.

a. EHI, EHP, HPOP, HOP, and their respective Tax Affiliates will cooperate fully with each
other with respect to, and will make available to each other, such Tax data and other
information as may be reasonably required for (i) the preparation of any Tax Returns
required to be prepared by EHI, EHP, HPOP, or HOP under this Agreement, (ii) determining the
liability for and amount of any Taxes due or the right to and amount of any refund of Taxes
and arranging for the timely payment of such Taxes by the appropriate Party, (iii)
examinations of Tax Returns, and (iv) any administrative or judicial proceeding in respect
of Taxes assessed or proposed to be assessed. Such cooperation shall include making all
information and documents in their possession relating to such Tax Returns, Tax Liabilities
or refunds, examinations, or administrative or judicial proceedings available to the other
party as provided in Section 10(b) hereof. EHI, EHP, HPOP, and HOP shall also make
available to the other, as reasonably requested and available, personnel (including
officers, directors, employees and agents of EHI, EHP, HPOP, and HOP and their Tax
Affiliates) responsible for preparing, maintaining and interpreting information and
documents relevant to Taxes, and personnel

- 14 -

 

reasonably required as witnesses or for purposes of providing information or documents in
connection with any administrative or judicial proceedings relating to Taxes. Any
information or documents provided under this Section 10, shall be kept confidential by the
party receiving the information or documents, except as may otherwise be necessary in
connection with the filing of Tax Returns or in connection with any administrative or
judicial proceedings relating to Taxes.

b. EHI, EHP, HPOP, HOP, and their respective Tax Affiliates shall make available to each
other for inspection and copying during normal business hours upon reasonable notice all Tax
records in their possession to the extent reasonably required by the other party in
connection with the preparation of Tax Returns, audits, litigation, or the resolution of
items under this Agreement. EHI, EHP, HPOP, HOP, and their respective Tax Affiliates shall
preserve and keep such Tax records in their possession until the expiration of any
applicable statutes of limitation and as otherwise required by law, but in any event for a
period not less than ten (10) years after the end of the calendar year that includes the
Final Distribution Date. Notwithstanding the foregoing, to the extent permitted by
applicable law, a Party or its Tax Affiliates may dispose of records sooner upon ninety (90)
days prior notice to the other Party. Such notice shall include a list of the records to be
disposed of describing in reasonable detail each file, book or other record accumulation
being disposed. The notified party shall have the opportunity, at its cost and expense, to
copy or remove, within such ninety (90) day period, all or any part of such Tax records.
For purposes of this Section 10, Tax records include Tax Returns, journal vouchers, cash
vouchers, general ledgers, material contracts, return workpapers, and any other records
pertaining to or used in the preparation of Tax Returns, including both paper and machine
records.

	11	 	Audits.

a. EHI, EHP, HPOP, and/or HOP (the “Notifying Party”) will promptly notify the other
relevant Party or Parties (the “Notified Party”) in writing upon the receipt of notice of
any pending or threatened Tax audits or assessments (i) relating to any taxable period of
HPOP and HOP ending on, prior to, or including the Second Distribution Date, or (ii) that
may affect the determination of Taxes for which the Notified Party is or may be obligated to
indemnify the Notifying Party (or any of them) pursuant to this Agreement. The notice
required under this Section 11(a) is referred to in this Agreement as the “Audit
Notification.”

b. Subject to Section 11(c) hereof, the Notified Party will have the right, at its election,
(i) to represent the Notifying Party and to exclusively control the handling of any Tax
audit or assessment referred to in Section 11(a) hereof, including in any administrative or
court proceeding relating thereto, (ii) to employ counsel of its choice at its expense and
to control the conduct of such audit, assessment, or proceeding, including settlement or
other disposition thereof, and (iii) to settle the contest of any Tax or agree to an
adjustment to any Tax referred to in Section 11(a) (the rights under (i), (ii) and (iii) are
referred to in this Agreement collectively as the
“Representation Right”); provided, however, that the Representation Right will apply only to any issues or items (x) relating

- 15 -

 

to any taxable period of HPOP and HOP ending on, prior to, or including the Second
Distribution Date, or (y) that may affect the determination of Taxes for which the Notified
Party is or may be obligated to indemnify the Notifying Party pursuant to this Agreement.
As reasonably necessary, the Notifying Party will fully cooperate, and will cause its Tax
Affiliates, agents, and advisers to fully cooperate, at the Notified Party’s expense, with
the Notified Party and its counsel in the defense against or compromise of any claim in any
said audit, assessment, or proceeding, such cooperation to include (but not be limited to)
the grant of any necessary powers of attorney.

c. To exercise the Representation Right, the Notified Party must first, within a reasonable
period following the receipt of the Audit Notification, (i) notify the Notifying Party in
writing that the Notified Party intends to exercise the Representation Right, and (ii)
deliver to the Notifying Party a written statement acknowledging the Notified Party’s
obligation to indemnify the Notifying Party in accordance with the terms of this Agreement
with respect to the Taxes as to which the Notified Party exercises the Representation Right.

d. The Notifying Party’s personnel shall have the right to participate in any administrative
or judicial proceedings for which the Notified Party exercises its Representation Right
(including assisting with field audits, administrative appeals, and subsequent litigation)
in so far as they relate to the Notifying Party, and such participation shall be reflected
by the grant of appropriate powers of attorney.

e. HPOP and HOP and EHI shall have exclusive control of all administrative and judicial
proceedings related to their respective Taxes other than those described in Section 11(a).

f. For so long as the Notified Party is exercising its Representation Right, it shall not
be required to indemnify the Notifying Party pursuant to Section 13 hereof until there
occurs a Final Determination of the Tax audit or assessment that gave rise to the Audit
Notification. After the Final Determination, the Notifying Party will calculate the amount
of any increase in Tax as a result of the Final Determination for which the Notified Party
is required to indemnify the Notifying Party and will inform the Notified Party of the
amount of such increase in accordance with the procedure described in Section 13. In making
such calculation, the Notifying Party will apply the principles described in Section 2
hereof. The Notified Party may not file an Objection Notice, as prescribed in Section
13(b), with respect to an indemnification claim submitted for a matter in which it has
exercised the Representation Right, except with respect to objections that relate solely to
the correctness of such calculation.

g. In addition to any other amounts for which the Notified Party shall indemnify the
Notifying Party, the Notifying Party shall be entitled to be reimbursed for the amount of
fees that the Notifying Party paid to an outside tax adviser if the services relating to
such fees are attributable to services rendered with respect to a matter for which the
Notified Party is or would be responsible (if a Tax were found to be owing), so long as such
services were rendered prior to the receipt by the Notifying Party of notice that the

- 16 -

 

Notified Party was exercising the Representation Right. The Notified Party will also
reimburse the Notifying Party for the time that the Notifying Party’s employees devote to a
matter for which the Notified Party is or would be responsible. The time of the Notifying
Party’s employees shall be valued for this purpose on a fair and reasonable basis to be
determined by the Notifying Party and, upon request, to be disclosed and made available to
the Notified Party, but subject to review under the dispute resolution procedures of Section
14.

h. To the fullest extent possible, the provisions of this Section 11 should be interpreted
and applied in a manner consistent with Sections 6.2, 6.3, and 6.4.1 of the MSA.

	12	 	Spin-Off Related Matters.

a. HAB (on behalf of itself and each other member of the Outdoor Group) represents,
warrants, and covenants to ABE and each member of the Indoor Group that there is no plan or
intention (i) to liquidate HPOP or HOP, (ii) to sell or otherwise dispose of the assets of
HAB, HPOP, or HOP subsequent to the Spin-off, except in the ordinary course of business, or
to merge HPOP or HOP with or into another entity other than a merger that occurs in
connection with an acquisition in pursuance of the business purpose discussed in the Ruling
and Ruling Documents, (iii) to take any action inconsistent with the information and
representations furnished in connection with the Ruling and the Opinion, (iv) to permit any
other member of the Outdoor Group to purchase stock of HAB, HPOP, or HOP other than in
accordance with the requirements of Revenue Procedure 96-30, as amplified by Revenue
Procedure 2003-48, and in conformity with the representations furnished by ABE in connection
with the Ruling and the Opinion, or (v) to enter into any transactions or any negotiations,
agreements, or arrangements with respect to transactions or events (including, without
limitation, stock issuances, pursuant to the exercise of options or otherwise, option
grants, capital contributions or acquisitions, or a series of such transactions or events)
that may cause the Spin-off to be treated under Section 355(e) of the Code as part of a plan
pursuant to which one or more persons acquire, directly or indirectly, stock of HPOP and/or
HOP (or their respective successors) representing a “50-percent or greater interest” therein
within the meaning of Section 355(d)(4) of the Code, or that may otherwise cause any of the
distributions or transfers that comprise the Spin-off not to be tax-free to EHP, EHI, and/or
ABE; provided, however, that HAB’s undertakings in this Section 12(a) shall not apply to
matters that HAB’s shareholders have the exclusive right to determine.

b. HAB covenants, represents, and warrants to ABE (for the benefit of itself, EHI, EHP, and
each other member of the Indoor Group) that (i) during the Two-Year Period, HAB, HPOP, and
HOP shall continue the active conduct of any trade or business, within the meaning of
Section 355 of the Code and the regulations promulgated thereunder, that had been conducted
throughout the five-year period prior to the Spin-off; (ii) during the Two-Year Period,
neither HPOP nor HOP will liquidate; (iii) during the Two-Year Period, none of HAB, HPOP, or
HOP will sell, exchange, transfer, or otherwise dispose of the assets of HAB, HPOP, HOP, or
any other member of the Outdoor Group, except in

- 17 -

 

the ordinary course of business, and neither HPOP nor HOP will be merged with or into
another entity, other than a merger that occurs in connection with an acquisition in
pursuance of the business purpose discussed in the Ruling and Ruling Documents; (iv) no
other member of the Outdoor Group will purchase stock of HAB, HPOP, or HOP, other than in
accordance with Revenue Procedure 96-30, as amplified by Revenue Procedure 2003-48, and in
conformity with the representations furnished in connection with the Ruling and the Opinion;
and (v) HPOP and/or HOP will not enter into, or participate in any negotiations, agreements,
or arrangements with respect to, any transaction or event, including any change in equity
structure (including without limitation, stock issuances, pursuant to the exercise of
options or otherwise, option grants, capital contributions or acquisitions, or a series of
such transactions or events), that may cause the Spin-off to be treated under Section 355(e)
of the Code as part of a plan pursuant to which one or more persons acquire, directly or
indirectly, stock of HAB, HPOP, or HOP (or their respective successors) representing a
“50-percent or greater interest” therein within the meaning of Section 355(d)(4) of the
Code, or that may otherwise cause any of the distributions or transfers that comprise the
Spin-off not to be tax-free to EHP, EHI, and/or ABE. The exclusive remedy for any violation
of any representation, warranty, or covenant set forth in this paragraph (b), as well as
those set forth in paragraph (a) of this Section 12, shall be the exercise of the right of
indemnity prescribed in Section 12(c).

c. HAB, HPOP, and HOP shall jointly and severally indemnify ABE and each other member of the
Indoor Group against and hold them harmless from any and all Taxes relating to the Spin-off,
and from any and all claims that ABE shareholders may assert with respect to Taxes relating
to the Spin-off, in the event that any member of the Indoor Group recognizes taxable gain or
other income as a result of the Spin-off being taxable because of (i) the breach of a
covenant, representation, or warranty in the Agreement by a member of the Outdoor Group;
(ii) the failure by HAB, HPOP, and/or HOP to continue the active conduct of any trade or
business, within the meaning of Section 355 of the Code and the regulations promulgated
thereunder, that had been conducted during the five-year period prior to the Spin-off; (iii)
any sale, exchange, acquisition, distribution, transfer, or other disposition of the stock
or assets of HAB, HPOP, or HOP; (iv) the liquidation of HAB, HPOP, or HOP; (v) the merger
of HAB, HPOP, or HOP with or into another corporation; (vi) any change in the equity
structure of HAB, HPOP, or HOP (including without limitation, stock issuances, pursuant to
the exercise of options or otherwise, option grants, capital contributions or acquisitions,
or a series of such transactions or events); (vii) any purchases of the stock of HAB, HPOP,
or HOP by any member of the Outdoor Group, or (viii) any other action or event occurring
after the Final Distribution Date with respect to the stock, assets, or operations of any
member of the Outdoor Group that is inconsistent with the information and representations
furnished in connection with the Ruling and the Opinion, or that is otherwise inconsistent
with the treatment of the Spin-off as a transaction that is tax-free to ABE, EHI, and EHP.

d. EHI shall have the right to obtain a Supplemental Ruling in its sole and exclusive
discretion. If EHI decides to obtain a Supplemental Ruling, HPOP, HOP, and their Tax
Affiliates shall cooperate with EHI and take any and all actions reasonably requested by EHI
in connection with obtaining the Supplemental Ruling (including, without limitation,

- 18 -

 

by making any representation or covenant or providing any materials or information requested
by any Tax Authority; provided that HPOP, HOP, and/or their Tax Affiliates shall not be
required to make any representation or covenant that is inconsistent with facts or as to
future matters or events over which it has no control). In connection with obtaining a
Supplemental Ruling, (i) EHI shall cooperate with and keep HPOP and HOP informed in a timely
manner of all material actions taken or proposed to be taken by EHI in connection therewith;
(ii) EHI shall (A) reasonably in advance of the submission of any Supplemental Ruling
Documents, provide HPOP and HOP with a draft copy thereof; (B) reasonably consider HPOP’s
and HOP’s comments on such draft copy; and (C) provide HPOP and HOP with a final copy of all
Supplemental Ruling Documents; and (iii) EHI shall provide HPOP and HOP with notice
reasonably in advance of, and HPOP and HOP shall have the right to attend, any formally
scheduled meetings with any Tax Authority (subject to the approval of the Tax Authority)
that relate to such Supplemental Ruling. Further, EHI shall provide HPOP and HOP with 30
Calendar Days to review such Supplemental Ruling Documents under this Section 12(d) and
shall not file such request prior to the expiration of 30 Calendar Days unless HPOP or HOP
agrees to such early filing in writing. EHI shall bear all costs and expenses incurred in
obtaining such Supplemental Ruling and shall reimburse for all reasonable costs and expenses
of outside third parties incurred by HPOP or HOP in connection with obtaining a Supplemental
Ruling requested by EHI.

e. HPOP and HOP hereby agree that EHI shall have, subject to Section 12(d) of this
Agreement, sole and exclusive control over the process of obtaining a Supplemental Ruling
and that only EHI shall apply for a Supplemental Ruling. HPOP and HOP further agree that
neither of them, together or separately, will seek any guidance from the IRS or any other
Tax Authority concerning the Spin-off, except as set forth in Section 12(f) of this
Agreement.

f. EHI agrees that, at the reasonable request of HPOP or HOP, EHI will cooperate with HPOP
and/or HOP and use its reasonable efforts to seek to obtain, as expeditiously as possible, a
Supplemental Ruling or other guidance from the IRS or any other Tax Authority for the
purpose of confirming (i) the Ruling or any Supplemental Ruling issued previously and (ii)
compliance on the part of HPOP, HOP, or any member of the HAB Group with its obligations
under this Agreement. HPOP and/or HOP will reimburse EHI for all reasonable costs and
expenses incurred by EHI or any of its Tax Affiliates in connection with obtaining a
Supplemental Ruling requested by HPOP and/or HOP.

g. The undertakings of HAB and other members of the Outdoor Group under this Section 12
shall apply, mutatis mutandis, with respect to any adverse Tax effects on members of the
Indoor Group or the Outdoor Group (as the case may be) by laws and regulations similar to
Section 355 of the Code of taxing jurisdictions outside the United States as a result of
actions or omissions of members of the other Group.

	13.	 	Procedures for Obtaining Indemnification.

- 19 -

 

a. If ABE, HAB, EHI, EHP, HPOP, or HOP (the “Indemnified Party”) determines that it or any
of its Tax Affiliates is or may be entitled to indemnification by another Party (the
“Indemnifying Party”) under this Agreement, the Indemnified Party will promptly deliver to
the Indemnifying Party a written notice and demand therefor (the “Notice”) specifying the
basis for its claim for indemnification, the nature of the claim, and, if known, the amount
for which the Indemnified Party reasonably believes it or any of its Tax Affiliates is
entitled to be indemnified. Except as to any amount described in Section 11(g) or Section
12(c), the Notice must be received by the Indemnifying Party no later than thirty (30) days
before the expiration of the applicable Tax statute of limitations; provided, however, that
if the Indemnified Party does not receive notice from the applicable Tax Authority
(“Government Notice”) that an item exists that could give rise to a claim for
indemnification hereunder more than thirty (30) days before the expiration of the applicable
Tax statute of limitations, then the Notice must be received by the Indemnifying Party
immediately after the Indemnified Party receives the Government Notice. Unless the
Indemnifying Party objects to the claim for indemnification (in the manner set forth in
Section 13(b) hereof), and subject to Section 11(f), the Indemnifying Party will pay the
Indemnified Party the amount set forth in the Notice, in cash or other immediately available
funds, within thirty (30) days after receipt of the Notice; provided, however, that, if the
amount for which the Indemnified Party reasonably believes it is entitled to be indemnified
is not known at the time of the Notice, the Indemnified Party will deliver to the
Indemnifying Party a further notice specifying such amount as soon as reasonably practicable
after such amount is known and payment will then be made as set forth above.

b. Subject to Section 11(f), the Indemnifying Party may object to the claim for
indemnification (or the amount thereof) set forth in any Notice by giving the Indemnified
Party, within thirty (30) days following receipt of such Notice, written notice setting
forth the Indemnifying Party’s grounds for so objecting (the “Objection Notice”). If the
Indemnifying Party does not give the Indemnified Party the Objection Notice within such
thirty (30)-day period, the Indemnified Party may exercise any and all of its rights under
applicable law to collect such amount.

c. If ABE, HAB, EHI, EHP, HPOP, and/or HOP are unable to settle any dispute regarding a
claim for indemnification within thirty (30) days after receipt of the Objection Notice, the
Parties to such dispute will, in accordance with Section 14, jointly request to resolve the
dispute as promptly as possible under the procedures set forth in Section 14.

d. Failure by the Indemnified Party to promptly deliver to the Indemnifying Party a Notice
in accordance with Section 13(a) hereof will not relieve the Indemnifying Party of any of
its obligations under this Agreement except to the extent the Indemnifying Party is
prejudiced by such failure.

e. The indemnification provisions of this Section 13 shall be the exclusive remedy following
the Second Distribution Date for the allocation of Taxes pursuant to this Agreement.

- 20 -

 

f. The rights of each Party to be indemnified under the terms of this Agreement shall be
subject to the limits prescribed in Section 6.4.2 of the MSA, under which each claim (or any
series of related claims with respect to the same or substantially the same facts and
circumstances) must exceed 200,000 Euros in order to be indemnifiable, and then the
indemnity will apply only to the extent that the claim exceeds 200,000 Euros. For purposes
of this Agreement, a “series of related claims” includes, but is not limited to, all claims
relating to the same Tax for the same taxable period. For purposes of any claims relating
to Taxes imposed by the United States or any political subdivisions in the United States,
the amount of $200,000 shall be substituted for 200,000 Euros in applying the limitations of
this Section 13(f).

	14.	 	Procedures for Resolving Disputes.

If ABE, HAB, EHI, EHP, HPOP, and/or HOP fail to mutually agree on the resolution of any
of the matters in this Agreement that require the agreement of the parties, then the Parties
involved in the disagreement shall consult the Accountant for purposes of mediating their
disagreement. Such Parties shall deliver to the Accountant copies of any schedules or
documentation that may be reasonably required by the Accountant for purposes of providing
advice to the parties and assisting them to resolve their disagreement. If such Parties are
unable to resolve their disagreement after the mediation efforts of the Accountant, they
shall submit their disagreement to binding arbitration under the procedures prescribed in
Section 8.12 of the MSA. Without limiting the generality of the foregoing, all unresolved
claims for indemnification relating to Section 12 of the Agreement, or any other dispute
arising in connection with the validity, enforcement, interpretation, construction, or
effect of the Agreement, shall be submitted to binding arbitration under the procedures
prescribed in Section 8.12 of the MSA. In any such arbitration proceeding, the Accountant
shall be available as an adviser to the arbitrators with respect to the Tax law issues
underlying the disagreement between and among the Parties, without prejudice to each of the
Parties’ right to present its own expert with respect to such issues. The arbitrators shall
resolve the disagreement on the basis of the applicable law of the relevant taxing
jurisdiction. The results of such arbitration shall be final and binding on all Parties.
The costs incurred in retaining the Accountant and of the arbitration shall be shared
equally by, on the one hand, members of the Indoor Group that are parties to the dispute
and, on the other hand, members of the Outdoor Group that are parties to the dispute.

	15.	 	Payment.

If a Party (the “Payer”) fails to make a payment due and owing under this Agreement to the
other Party or any of its Tax Affiliates (the “Payee”) within 10 business days after the
Parties hereto agree (or there is a binding determination by the arbitrators) that such
payment is due and owing, the Payer will pay to the Payee interest on such payment from and
including the date the parties reach such agreement (or such binding determination is made)
to but excluding the day the Payer makes such payment, at a rate equal to the interest rate
that the IRS would have charged the Payer with a respect to a United States

- 21 -

 

federal Income Tax deficiency during such period of time, or, in the case of a payment
relating to a jurisdiction outside the United States, the interest rate that the relevant
Tax Authority would have charged with respect to a Tax deficiency during such period of
time.

	16.	 	Treatment of Indemnity Payments.

If the receipt or accrual of any indemnity payment made under this Agreement results in any
increased Tax liability or reduction of any Tax Attribute of the Indemnified Party (compared
to the after-tax position in which such Indemnified Party would have been if the event
giving rise to such indemnity payment had not occurred), the Indemnifying Party shall pay to
the Indemnified Party an additional indemnity payment (the “After-Tax Amount”) equal to the
sum of (i) any increase in the Taxes of the Indemnified Party as a result of receiving such
payment (and such additional payment shall itself be grossed up to take into account any
increased Tax liability or reduction of Tax Attributes attributable to such payment, if
applicable) and (ii) any interest or penalty attributable to such increased Tax liability or
to the reduction of such Tax Attribute.

	17.	 	Other Corporations Subject to This Agreement.

a. In addition to each of the Parties, the corporations that are listed on Schedule 17
hereto shall be subject to this Agreement. This Section 17 shall apply only to ABE, HAB,
and the corporations that are listed on Schedule 17.

b. Schedule 17 may be amended from time to time to add or delete corporations, or to move
one or more corporations from one category on such schedule to another category, by the
mutual written agreement of ABE and HAB. Schedule 17 shall divide such additional
corporations subject to this Agreement into two categories, Outdoor Corporations (which will
be those corporations that are or will become members of the Outdoor Group) and Indoor
Corporations (which will be those corporations that are or will become members of the Indoor
Group). Subject to such revisions as are prescribed in this Section 17, 1) with respect to
a Separate Liability of an Outdoor Corporation for which an Indoor Corporation is seeking
indemnity from an Outdoor Corporation (or for which either of them is seeking cooperation in
preparing a Tax Return or other Tax document or is seeking Tax records or other assistance
or cooperation), such Indoor Corporation shall have the rights and obligations, mutatis
mutandis, that this Agreement ascribes to EHI and EHP, and such Outdoor Corporation shall
have the rights and obligations, mutatis mutandis, that this Agreement ascribes to HOP and
HPOP, but only to the extent such rights and obligations are relevant to the Tax in
question; and 2) with respect to a Separate Liability of an Indoor Corporation for which an
Outdoor Corporation is seeking indemnity (or for which either of them is seeking cooperation
in preparing a Tax Return or other Tax document or is seeking Tax records or other
assistance or cooperation), such Outdoor Corporation shall have the rights and obligations,
mutatis mutandis, that this Agreement ascribes to EHI and EHP, and such Indoor Corporation
shall have the rights and obligations, mutatis mutandis, that this

- 22 -

 

Agreement ascribes to HOP and HPOP, but only to the extent such rights and obligations are
relevant to the Tax in question.

c. Pursuant to this Section 17, HAB and ABE will cause their respective Tax Affiliates
conducting the Outdoor Business and the Indoor Business outside the United States to apply
the principles prescribed in this Agreement 1) in the allocation, satisfaction, and
indemnification with respect to their respective Separate Liabilities, 2) in the preparation
and filing of Tax Returns and the payment of Taxes after the Final Distribution Date, 3) in
achieving cooperation with respect to Tax matters and an equitable sharing of information
and records that are relevant to Tax matters, and 4) in the conduct and resolution of Tax
audits and other Tax controversies that are relevant to the respective Separate Liabilities
of such Tax Affiliates. In fulfilling this obligation, HAB and ABE will work together in
good faith to achieve an equitable application of the principles prescribed in this
Agreement to the resolution of all such issues.

d. Pursuant to this Section 17, HAB will cause its Tax Affiliates conducting the Outdoor
Business outside the United States to accept liability for all Taxes that are the Separate
Liability of that Tax Affiliate, and to pay or cause to be paid and to indemnify and hold
ABE and its Tax Affiliates harmless from and against all such Taxes. As an alternative, HAB
may elect to fulfill such obligations of one or more of its Tax Affiliates by itself making
the required payments directly to ABE, but only with the prior written consent of ABE. HAB
will also cause such Tax Affiliates to provide the cooperation with respect to preparation
of Tax Returns and other documents and access with respect to Tax records that are required
under this Agreement.

e. Pursuant to this Section 17, ABE will cause its Tax Affiliates conducting the Indoor
Business outside the United States to accept liability for all Taxes that are the Separate
Liability of that Tax Affiliate, and to pay or cause to be paid and to indemnify and hold
HAB and its Tax Affiliates harmless from and against all such Taxes. As an alternative, ABE
may elect to fulfill such obligations of one or more of its Tax Affiliates by itself making
the required payments directly to HAB, but only with the prior written consent of HAB. ABE
will also cause such Tax Affiliates to provide the cooperation with respect to preparation
of Tax Returns and other documents and access with respect to Tax records that are required
under this Agreement.

f. Except as provided in Section 12(g), all Taxes and other costs incurred by a corporation
listed in Schedule 17 as a result of transactions preceding the Demerger shall be the sole
obligation of such corporation.

g. Determination of Separate Liability.

(1) With respect to any Tax for which a Tax Return is filed, the Separate Liability
of any corporation that is subject to this Agreement pursuant to this Section 17
shall be the Tax Liability originally reported by such corporation on a separate Tax
Return filed with the relevant Tax Authority for the relevant taxable period, and,
in the event of a Final Determination, any change in such Tax

- 23 -

 

Liability as a result of such Final Determination. If such corporation did not file
a separate Tax Return with the relevant Tax Authority for the relevant taxable
period, the Separate Liability of such corporation shall be the Tax Liability that
would have been reportable on a separate Tax Return by such corporation as if it had
filed a separate Tax Return with such Taxing Authority for such taxable period and,
in the event of a Final Determination, any change in such Tax Liability as a result
of such Final Determination. If the business of a corporation listed in Schedule 17
was operated as a division of another corporation in a taxable year prior to the
Final Distribution Date, the provisions of Section 2(b)(i) of this Agreement shall
apply, mutatis mutandis, for purposes of determining the Separate Liability of such
corporation for such taxable year.

(2) With respect to any Tax for which a Tax Return is not filed, the Separate
Liability of any corporation (the “subject corporation”) that is subject to this
Agreement pursuant to this Section 17 shall be the Tax Liability that is actually
imposed on such corporation for such Tax, or, in the case where a separate liability
is not actually imposed on such corporation, the amount of liability that would be
imposed on such corporation for such Tax if it were a corporation unrelated to any
other corporation (the “related corporation”) in the ABE Group when the transaction
or event giving rise to such Tax occurred or arose. For this purpose, the subject
corporation shall be deemed to be subject to the taxing authority of each
jurisdiction to which the related corporation was subject for the taxable periods in
question. In the event of a Final Determination, all of such Separate Liabilities
shall be recalculated to take into account changes that result from the Final
Determination.

(3) In determining the Separate Liabilities for each corporation that is subject to
this Agreement pursuant to this Section 17, the Parties will act in good faith to
determine such Separate Liabilities, and will in good faith undertake to divide Tax
Liabilities that were originally determined on a consolidated or combined basis
according to principles that are reasonably designed, in light of the law and
practices relating to the Tax in question, to fairly divide and allocate the
consolidated or combined Tax Liability among the corporations that are included
pursuant to such law in the consolidated or combined group.

h. For purposes of this Section 17, Section 14 shall be applied by using an Accountant,
which may or not be the same Accountant that is used in connection with any disputes
relating to United States Tax Liability, that is an expert in the Tax laws relating to the
relevant Tax Authority.

i. In applying the other provisions of this Agreement for purposes of this Section 17, ABE
and HAB will cooperate in good faith, and will cause their respective Tax Affiliates to do
the same, in order to achieve a fair and equitable application of the principles set forth
in this Agreement and the MSA to the Indoor Corporations and the Outdoor Corporations that
have their principal place of business outside the United States.

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	18.	 	Amendments.
	 
	 	 	Any amendment, supplement, variation, alternation, or modification to this Agreement must be
made in writing and duly executed by an authorized representative or agent of each of the
parties hereto. Any amendments relating to Section 17 require the agreement only of ABE and
HAB and need to be duly executed only by authorized representatives or agents of those two
corporations.
	 
	19.	 	Assignment.
	 
	 	 	This Agreement and all the rights and obligations granted hereby shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns, it being
expressly agreed that, subject to Section 17, this Agreement shall not be assigned nor shall
any rights or obligations arising hereunder be transferred by one party without the prior
written consent of the other parties.
	 
	20.	 	Entire Agreement.
	 
	 	 	This Agreement constitutes the entire agreement between the parties and supersedes any and
all prior or contemporaneous understandings, negotiations, or agreements between the parties
relating to the transactions contemplated hereby or the subject matter of this Agreement,
and shall be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives.
	 
	21.	 	No Waiver.
	 
	 	 	The failure in any one or more instances of a party to insist upon performance of any of the
terms, covenants, or conditions of this Agreement, to exercise any right or privilege
conferred in this Agreement, or to waive any breach of any of the terms, covenants, or
conditions of this Agreement, shall not be construed as a subsequent waiver of any such
terms, covenants, conditions, rights, or privileges, but the same shall continue and remain
in full force and effect as if no such forbearance or waiver had occurred. No waiver
shall be effective unless it is in writing and signed by an authorized representative of the
waiving party.
	 
	22.	 	No Double Recovery.
	 
	 	 	No provision of this Agreement shall be construed to provide an indemnity or other recovery
for any Taxes, costs, damages, or other amounts for which the damaged person has been fully
compensated under any other provision of this Agreement or under any other agreement, action
at law or in equity, or otherwise.
	 
	23.	 	Severability.
	 
	 	 	Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdictions, be ineffective to the extent of such prohibition or

- 25 -

 

	 	 	unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any other jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, each party hereby waives any law that renders any provision hereof
prohibited or unenforceable in any respect.
	 
	24.	 	Counterparts.
	 
	 	 	This Agreement may be executed in counterparts, each of which shall be deemed to be an
original, and all such counterparts shall be deemed to constitute one and the same
instrument.
	 
	25.	 	Fees, Costs and Expenses.
	 
	 	 	Except as otherwise provided herein, each party shall be responsible for its own fees,
costs, and expenses incurred by it in connection with this Agreement.
	 
	26.	 	Third Party Beneficiaries.
	 
	 	 	Subject to Sections 12 and 17, nothing in this Agreement is intended to create, nor shall
anything in this Agreement be deemed to create or have created, any third party beneficiary
rights.
	 
	27.	 	Construction.
	 
	 	 	All references to this Agreement shall include all attachments hereto, and words importing
the singular shall include the plural and vice versa, and words importing a gender shall
include other genders.
	 
	28.	 	Headings.
	 
	 	 	The descriptive section headings contained in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of any provision
of this Agreement.
	 
	29.	 	Notices.
	 
	 	 	All notices and other communications hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, five (5) business days after mailing when
mailed by certified mail, return receipt requested, or one (1) business day after sending
via Federal Express or similar overnight courier service, or when receipt is confirmed when
sent by facsimile. Such notices or other communications shall be sent to the following
addresses, unless other addresses are subsequently specified in writing:

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	 	a.	 	If to EHI or EHP, to:

20445 Emerald Parkway, S.W.

Suite 250

P.O. Box 35920

Cleveland, OH 44135-0920

Attention:  Mr. Mark W. Russell

                 
Vice President — Taxes

	 	 	 	with a copy to:

Squire, Sanders & Dempsey L.L.P.

4900 Key Tower

127 Public Square

Cleveland, Ohio 44114

Facsimile No.: (216) 479-8780

Attention: Terrence G. Perris, Esq.

	 	b.	 	If to HPOP or HOP, to:

1030 Stevens Creek

Augusta, Georgia 30907
 

Attention: Lawrence G. Muscarella General Counsel

With copy to: Fredrik Östman Chief Financial Officer

	 	c.	 	If to ABE or to any Indoor Corporation listed on Schedule 17, to:

S:t Göransgatan 143

SE-105 45 Stockholm, Sweden

Attentions: Mr. Mikael Norman

Vice President — Group Tax Department

With copy to:

Squire, Sanders & Dempsey L.L.P.

4900 Key Tower

127 Public Square

Cleveland, Ohio 44114

Facsimile No.: (216) 479-8780

Attention: Terrence G. Perris, Esq.

	 	d.	 	If to HAB or to any Outdoor Corporation listed on Schedule 17, to:

- 27 -

 

S:t Göransgatan 143

SE-105 45 Stockholm, Sweden

Attentions: Mr. Olle Wallén

General Counsel

	30.	 	Further Assurances.
	 
	 	 	The Parties agree to execute and deliver all documents, provide all information, and take or
refrain from taking action as may be necessary or appropriate to achieve the purposes of
this Agreement. The foregoing shall include, without limitation, agreeing in good faith to
such amendments to this Agreement as may be necessary or appropriate to correct any errors
or oversights in the Agreement and to give effect to its purpose and the intent of the
Parties to achieve a fair and equitable sharing and allocation of the Tax Liabilities of the
Indoor Group and the Outdoor Group, respectively.
	 
	31.	 	Governing Law.
	 
	 	 	This Agreement shall be governed by and controlled as to its validity, enforcement,
interpretation, construction, effect, and in all other respects by the laws of Kingdom of
Sweden (without giving effect to any choice or conflict of law provision or rule thereof)
applicable to contracts made and to be performed in that nation.
	 
	32.	 	Coordination with MSA.
	 
	 	 	Except to the extent such provisions are inconsistent with the provisions of this Agreement,
the Parties shall endeavor to comply with the provisions of the MSA, to the extent they can
fairly be construed to be applicable to the matters addressed herein, as well as with the
provisions of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly authorized
representatives as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	ELECTROLUX HOLDINGS, INC.
	 

	 	 	 	 	 	 
	 

	 	By:	 	/s/ Hans Stråberg	 	/s/ Fredrik Rystedt
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Hans Stråberg	 	Fredrik Rystedt
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	President and CEO	 	Senior Vice President and CFO
	 

	 	 	 	 	 	 

- 28 -

 

	 	 	 	 	 	 	 
	 	 	ELECTROLUX HOME PRODUCTS, INC.
	 

	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mark W. Russell	 	/s/ George C. Weigand
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Mark W. Russell	 	George C. Weigand
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	Vice President - Texas	 	Senior Vice President & CFO
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	HUSQVARNA PROFESSIONAL OUTDOOR PRODUCTS, INC.
	 

	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mark W. Russell	 	/s/ George C. Weigand
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Mark W. Russell	 	George C. Weigand
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	Vice President - Texas	 	Senior Vice President & CFO
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	HUSQVARNA OUTDOOR PRODUCTS INC.
	 

	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mark W. Russell	 	/s/ George C. Weigand
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Mark W. Russell	 	George C. Weigand
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	Vice President - Texas	 	Senior Vice President & CFO
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	AB ELECTROLUX (publ)
	 

	 	 	 	 	 	 
	 

	 	By:	 	/s/ Hans Stråberg	 	/s/ Fredrik Rystedt
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Hans Stråberg	 	Fredrik Rystedt
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	President and CEO	 	Senior Vice President and CFO
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	HUSQVARNA AB
	 

	 	 	 	 	 	 
	 

	 	By:	 	/s/ Bengt Andersson	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	Bengt Andersson	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	CEO	 	 
	 

	 	 	 	 	 	 

- 29 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]