AUTOLIV INC (Form: 10-Q, Received: 07/27/2018 12:58:22)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2018

Commission File No.: 001-12933

AUTOLIV, INC.

(Exact name of registrant as specified in its charter)

Delaware		51-0378542
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Klarabergsviadukten 70, Section B7
Box 70381, SE-107 24
Stockholm, Sweden		N/A
(Address of principal executive offices)		(Zip Code)

+46 8 587 20 600

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes: ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐
(do not check if smaller reporting company)

Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: ☒

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of July 20, 2018, there were 87,132,890 shares of common stock of Autoliv, Inc., par value $1.00 per share, outstanding.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments that Autoliv, Inc. (“Autoliv,” the “Company” or “we”) or its management believes or anticipates may occur in the future. All forward-looking statements, including without limitation, statements regarding management’s examination of historical operating trends and data, estimates of future sales, operating margin, cash flow, effective tax rate or other future operating performance or financial results, and the expected impact of the completed spin-off of our Electronics business and the outlook for Autoliv following the spin-off are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements.

In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words.

Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation: changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignment, restructuring and cost reduction initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in regulatory conditions; customer bankruptcies; consolidations, restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; component shortages; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing negotiations with customers; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto (including the resolution of the Toyota Recall (see Note 12. Contingent Liabilities below)); higher expenses for our pension and other postretirement benefits including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; political conditions; dependence on and relationships with customers and suppliers; and other risks and uncertainties identified in Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, Item 1A “Risk Factors” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 22, 2018.

For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.

INDEX

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

1.	Basis of Presentation	8
2.	New Accounting Standards	9
3.	Discontinued Operations	11
4.	Revenue	13
5.	Fair Value Measurements	15
6.	Income Taxes	17
7.	Inventories	18
8.	Restructuring	18
9.	Product-Related Liabilities	19
10.	Retirement Plans	19
11.	Equity	20
12.	Contingent Liabilities	21
13.	Stock Incentive Plan	24
14.	Earnings Per Share	24
15.	Related Party Transactions	25
16.	Subsequent Events	26

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		27

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		39

ITEM 4. CONTROLS AND PROCEDURES		39

PART II - OTHER INFORMATION		40

ITEM 1. LEGAL PROCEEDINGS		40

ITEM 1A. RISK FACTORS		40

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		40

ITEM 3. DEFAULTS UPON SENIOR SECURITIES		40

ITEM 4. MINE SAFETY DISCLOSURES		40

ITEM 5. OTHER INFORMATION		40

ITEM 6. EXHIBITS		41

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in millions, except per share data)

	Three months ended						Six months ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Net sales	$	2,211.5		$	1,983.9		$	4,452.4		$	4,025.5
Cost of sales		(1,771.8	)		(1,568.6	)		(3,552.4	)		(3,181.5	)
Gross profit		439.7			415.3			900.0			844.0
Selling, general and administrative expenses		(99.8	)		(105.0	)		(200.9	)		(200.2	)
Research, development and engineering expenses, net		(117.5	)		(95.7	)		(226.0	)		(201.9	)
Amortization of intangibles		(2.9	)		(2.9	)		(5.7	)		(5.6	)
Other income (expense), net		9.6			8.1			5.1			5.8
Operating income		229.1			219.8			472.5			442.1
Income from equity method investments		1.3			0.2			2.6			0.7
Interest income		1.1			1.8			2.8			3.8
Interest expense		(13.7	)		(15.0	)		(27.3	)		(31.2	)
Other non-operating items, net		(7.7	)		(5.6	)		(11.6	)		(14.5	)
Income from continuing operations before income taxes		210.1			201.2			439.0			400.9
Income tax expense		(16.9	)		(65.1	)		(86.7	)		(116.5	)
Income from continuing operations		193.2			136.1			352.3			284.4
Loss from discontinued operations, net of income taxes (Note 3)		(159.1	)		(7.8	)		(195.8	)		(14.0	)
Net income		34.1			128.3			156.5			270.4
Less: Net income from continuing operations attributable to non-controlling interest		0.5			0.4			0.9			0.8
Less: Net loss from discontinued operations attributable to non-controlling interest		(3.6	)		(1.9	)		(8.3	)		(4.1	)
Net income attributable to controlling interest	$	37.2		$	129.8		$	163.9		$	273.7

Amounts attributable to controlling interest:
Net Income from continuing operations	$	192.7		$	135.7		$	351.4		$	283.6
Net Loss from discontinued operations (Note 3)		(155.5	)		(5.9	)		(187.5	)		(9.9	)
Net income attributable to controlling interest	$	37.2		$	129.8		$	163.9		$	273.7

Earnings per share continuing operations – basic ¹⁾	$	2.21		$	1.54		$	4.03		$	3.22
Earnings per share discontinued operations – basic ¹⁾		(1.78	)		(0.07	)		(2.15	)		(0.11	)
Basic earnings per share	$	0.43		$	1.47		$	1.88		$	3.11

Earnings per share continuing operations – diluted ¹⁾	$	2.20		$	1.54		$	4.02		$	3.21
Earnings per share discontinued operations – diluted ¹⁾		(1.77	)		(0.07	)		(2.14	)		(0.11	)
Diluted earnings per share	$	0.43		$	1.47		$	1.88		$	3.10

Weighted average number of shares outstanding, net of treasury shares (in millions)		87.1			87.9			87.1			88.1
Weighted average number of shares outstanding, assuming dilution and net of treasury shares (in millions)		87.4			88.1			87.4			88.3

Cash dividend per share – declared	$	0.62		$	0.60		$	1.24		$	1.20
Cash dividend per share – paid	$	0.62		$	0.60		$	1.22		$	1.18

¹⁾	Participating share awards with the right to receive dividend equivalents are (under the two class method) excluded from the earnings per share calculation (see Note 14 to the unaudited condensed consolidated financial statements).

See “Notes to unaudited condensed consolidated financial statements.”

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNA UDITED)

(Dollars in millions)

	Three months ended						Six months ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Net income	$	34.1		$	128.3		$	156.5		$	270.4
Other comprehensive income before tax:
Change in cumulative translation adjustments		(196.3	)		85.5			(104.8	)		174.0
Net change in cash flow hedges		0.7			(3.9	)		1.1			(6.6	)
Net change in unrealized components of defined benefit plans		7.3			1.9			8.1			3.6
Other comprehensive income, before tax		(188.3	)		83.5			(95.6	)		171.0
Tax effect allocated to other comprehensive income		(2.2	)		(0.6	)		(2.4	)		(1.1	)
Other comprehensive income, net of tax		(190.5	)		82.9			(98.0	)		169.9
Comprehensive income	$	(156.4	)	$	211.2		$	58.5		$	440.3
Less: Comprehensive income attributable to non-controlling interest		(3.1	)		(1.5	)		(7.4	)		(3.3	)
Comprehensive income attributable to controlling interest	$	(153.3	)	$	212.7		$	65.9		$	443.6

See “Notes to unaudited condensed consolidated financial statements.”

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in millions)

	As of
	June 30, 2018			December 31, 2017
Assets
Cash and cash equivalents	$	507.5		$	959.5
Receivables, net		1,863.1			1,696.7
Inventories, net		709.7			704.3
Other current assets		246.6			197.0
Related party receivables (Note 15)		46.9			—
Current assets, discontinued operations (Note 3)		—			647.2
Total current assets		3,373.8			4,204.7
Property, plant and equipment, net		1,633.4			1,608.9
Investments and other non-current assets		352.4			341.0
Goodwill		1,391.9			1,397.0
Intangible assets, net		38.3			42.6
Non-current assets, discontinued operations (Note 3)		—			955.7
Total assets	$	6,789.8		$	8,549.9

Liabilities and equity
Short-term debt	$	605.6		$	19.7
Accounts payable		966.4			957.3
Accrued expenses		849.7			829.5
Other current liabilities		261.1			279.9
Related party liabilities (Note 15)		70.5			—
Current liabilities, discontinued operations (Note 3)		—			568.2
Total current liabilities		2,753.3			2,654.6
Long-term debt		1,678.0			1,310.7
Pension liability		203.8			206.8
Other non-current liabilities		147.1			144.3
Non-current liabilities, discontinued operations (Note 3)		—			64.1
Total non-current liabilities		2,028.9			1,725.9
Common stock		102.8			102.8
Additional paid-in capital		1,329.3			1,329.3
Retained earnings (Note 11)		2,118.4			4,079.2
Accumulated other comprehensive loss (Note 11)		(383.1	)		(287.5	)
Treasury stock (Note 11)		(1,172.9	)		(1,188.7	)
Total controlling interest		1,994.5			4,035.1
Non-controlling interest (Note 11)		13.1			134.3
Total equity		2,007.6			4,169.4
Total liabilities and equity	$	6,789.8		$	8,549.9

See “Notes to unaudited condensed consolidated financial statements.”

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in millions)

	Six months ended
	June 30, 2018			June 30, 2017
Operating activities
Net income continuing operations	$	352.3		$	284.4
Net income discontinued operations		(195.8	)		(14.0	)
Depreciation and amortization		223.3			214.4
Separation costs		26.8			—
Other, net		12.6			(16.4	)
Changes in operating assets and liabilities		(356.2	)		(139.8	)
Net cash provided by operating activities (Note 3)		63.0			328.6

Investing activities
Expenditures for property, plant and equipment		(306.4	)		(270.6	)
Proceeds from sale of property, plant and equipment		2.4			10.8
Acquisitions of businesses and interest in/additional contributions to affiliates, net of cash acquired		(72.9	)		(111.5	)
Net cash used in investing activities (Note 3)		(376.9	)		(371.3	)

Financing activities
Net increase (decrease) in short-term debt		410.0			(36.7	)
Issuance of long-term debt, net of discount		582.2			—
Debt issuance costs		(2.6	)		—
Dividends paid		(106.6	)		(104.2	)
Dividends paid to non-controlling interest		(2.0	)		—
Shares repurchased		—			(157.0	)
Common stock options exercised		7.6			2.6
Capital contribution to Veoneer		(979.7	)		—
Net cash used in financing activities		(91.1	)		(295.3	)
Effect of exchange rate changes on cash and cash equivalents		(47.0	)		33.8
Decrease in cash and cash equivalents		(452.0	)		(304.2	)
Cash and cash equivalents at beginning of period		959.5			1,226.7
Cash and cash equivalents at end of period	$	507.5		$	922.5

See “Notes to unaudited condensed consolidated financial statements.”

NOTES TO UNAUDITED CONDENSED CO NSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, all amounts are presented in millions of dollars, except for per share amounts)

June 30, 2018

1. BASIS OF PRESENTATION

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the prior year audited financial statements and all adjustments considered necessary for a fair presentation have been included in the financial statements. All such adjustments are of a normal recurring nature. The result for the interim period is not necessarily indicative of the results to be expected for any future period or for the fiscal year ending December 31, 2018.

The Condensed Consolidated Balance Sheet at December 31, 2017 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP for complete financial statements.

On June 29, 2018 (the “Distribution Date”), Autoliv completed the spin-off of its Electronics segment (the “spin-off”) through the distribution of all of the issued and outstanding stock of Veoneer, Inc. (“Veoneer”). To effect the spin-off, Autoliv distributed to each Autoliv stockholder one share of Veoneer common stock, par value $1.00 per share, for every one share of Autoliv common stock, par value $1.00 per share, held by such person on the common stock record date, and each Autoliv Swedish Depository Receipt (SDR) holder received one Veoneer SDR for each Autoliv SDR held by such person on the applicable SDR record date. On July 2, 2018, Veoneer’s common stock began regular-way trading on the New York Stock Exchange under the symbol “VNE” and its SDRs began trading on Nasdaq Stockholm under the symbol “VNE SDB.” The Company did not retain any equity interest in Veoneer.

In accordance with U.S. GAAP, the financial position and results of operations of the Electronics business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. The restated historical financial statements reflecting the spin-off are unaudited, but have been derived from Autoliv’s historical audited annual reports. The sum of the individual earnings per share amounts from continuing operations and discontinued operations may not equal the total company earnings per share amounts due to rounding. The cash flows and comprehensive income related to the Electronics business have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows and Comprehensive Income, respectively, for all periods presented. With the exception of Note 3, the Notes to the Unaudited Condensed Consolidated Financial Statements reflect the continuing operations of Autoliv. See Note 3 - Discontinued Operations below for additional information regarding discontinued operations.

On April 1, 2018, in preparation for the spin-off, pursuant to the terms of a master transfer agreement entered into between Autoliv and Veoneer, assets related to the Electronics business were transferred to, and liabilities related to the Electronics business were retained or assumed by Veoneer, however, responsibility for certain product, warranty and recall liabilities for Electronics products manufactured prior to April 1, 2018 was retained by Autoliv as provided in the Distribution Agreement between Autoliv and Veoneer.

Certain amounts in the prior year’s condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as a result of the spin-off of Veoneer.

Upon completion of the spin-off, Autoliv has concluded at June 30, 2018 that it has one reportable segment, based on the way the Company evaluates its financial performance and manages its operations. Prior to the completion of the spin-off, the Company had two reportable segments, Electronics and Passive Safety. The Company’s Passive Safety reportable segment includes the Company’s airbag and seatbelt products and components.

Statements in this report that are not of historical fact are forward-looking statements that involve risks and uncertainties that could affect the actual results of the Company. A description of the important factors that could cause Autoliv’s actual results to differ materially from the forward-looking statements contained in this report may be found in this report and Autoliv’s other reports filed with the Securities and Exchange Commission (the “SEC”). For further information, refer to the consolidated financial statements, footnotes and definitions thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 22, 2018.

2. NEW ACCOU NTING STANDARDS

Adoption of New Accounting Standards

In February 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI) , which allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Act”). Consequently, the amendments in ASU 2018-02 eliminate the stranded tax effects resulting from the Act. The amendments in ASU 2018-02 are effective for all entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company early adopted ASU 2018-02 as of January 1, 2018 and made a reclassification from AOCI to Retained earnings of approximately $10 million.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost.

In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires the service cost component to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the consolidated statements of income separately from the service cost component and outside operating income. The amendments in ASU 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the consolidated statements of income. The Company adopted ASU 2017-07 in the first quarter of 2018. Prior comparative periods have not been adjusted since the impact of ASU 2017-07 is not material for any consolidated financial statements periods presented (see Note 10. Retirement Plans).

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory , which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Consequently, the amendments in this ASU 2016-16 eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of ASU 2016-16 are intellectual property and property, plant, and equipment. The amendments in ASU 2016-16 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of ASU 2016-16 effective January 1, 2018 did not have a material impact on the consolidated financial statements for any periods presented.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. In 2016, the FASB issued accounting standard updates to address implementation issues and to clarify guidance in certain areas. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Comp any expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 effective January 1, 2018 and utilized the modified retrospective (cumulative effect) transition method to all contracts not completed at the date of initial application. The Company applied the modified retrospective transition method through a cumulative adjustment to retained earnings. The adoption of the new revenue standard did not have a material impact on net sales, net income, or balance sheet.

Balance Sheet (Dollars in millions)	Balance at December 31, 2017		Adjustments due to ASU 2014-09			Balance at January 1, 2018
Assets
Inventories, net ¹⁾	$	859.1	$	(17.4	)	$	841.7
Other current assets ¹⁾		228.9		22.0			250.9

Equity
Retained Earnings ¹⁾		4,079.2		3.2			4,082.4
¹⁾ Impact at adoption which included both continuing and discontinued operations.

	Three months period ended June 30, 2018									Six months period ended June 30, 2018
Income Statement (Dollars in millions)	As Reported			Balances without adoption of ASC 606			Effect of Changes			As Reported			Balances without adoption of ASC 606			Effect of Changes
Net sales	$	2,211.5		$	2,210.8		$	0.7		$	4,452.4		$	4,448.7		$	3.7
Cost of sales		(1,771.8	)		(1,771.2	)		(0.6	)		(3,552.4	)		(3,549.2	)		(3.2	)
Operating income		229.1			229.1			0.0			472.5			472.0			0.5

	As of June 30, 2018
Balance Sheet (Dollars in millions)	As Reported		Balances without adoption of ASC 606		Effect of Changes
Assets
Inventories, net	$	709.7	$	724.7	$	(15.0	)
Other current assets		246.6		227.9		18.7

Equity
Retained Earnings		2,118.4		2,115.8		2.6

Accounting Standards Issued But Not Yet Adopted

In August 2017, the FASB issued ASU 2017-12 , Derivative and Hedging (Topic 815), Targeted improvements to accounting for hedging activities . The amendments in ASU 2017-12 better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments in ASU 2017-12 also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in ASU 2017-12 modify disclosures required in current GAAP. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments. The amendments also require new tabular disclosures related to cumulative basis adjustments for fair value hedges. The amendments in ASU 2017-12 are effective for public business entities for annual period beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the annual period that an entity adopts the amendments in ASU 2017-12. The Company believes that the pending adoption of ASU 2017-12 will not have a material impact on the consolidated financial statements since the Company terminated its existing cash flow hedges in the first quarter of 2018.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and early adoption is permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of its pending adoption of ASU 2016-13 on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company intends to adopt ASU 2016-02 in the annual period beginning January 1, 2019. The Company intends to apply the modified retrospective transition method and elect the transition option to use the effective date January 1, 2019, as the date of initial application. The Company will not adjust its comparative period financial statements for effects of the ASU 2016-02, or make the new required lease disclosures for periods before the effective date. The Company will recognize its cumulative effect transition adjustment as of the effective date. The Company’s implementation of this standard includes use of a project management framework that includes a dedicated lead project manager and a cross-functional project steering committee responsible for assessing the impact that the new standard will have on the Company’s accounting, financial statement presentation and disclosure. This team has continued its process to identify leasing arrangements and to compare its accounting policies and practices to the requirements of the new standard. In addition, the Company has selected a new system to assist with lease accounting and has started the implementation. The Company regularly enters into operating leases, for which current GAAP does not require recognition on the balance sheet. The Company anticipates that the adoption of ASU 2016-02 will primarily result in the recognition of most operating leases on its balance sheet resulting in an increase in reported right-of-use assets and leasing liabilities. The Company will continue to assess the impact from the new standard. The Company is continuing to consider control and process changes to capture lease data necessary to apply ASU 2016-02.

3. DISCONTI N UED OPERATIONS

As discussed in Note 1. Basis of Presentation above, on June 29, 2018, the Company completed the spin-off of Veoneer and the requirements for the presentation of Veoneer as a discontinued operation were met on that date. Accordingly, Veoneer’s historical financial results are reflected in the Company’s unaudited condensed consolidated financial statements as discontinued operations. The Company did not allocate any general corporate overhead or interest expense to discontinued operations.

The financial results of Veoneer are presented as loss from discontinued operations, net of income taxes in the unaudited Condensed Consolidated Statements of Income. The following table presents the financial results of Veoneer (dollars in millions).

	Three months ended						Six months ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Net sales	$	551.0		$	561.0		$	1,122.9		$	1,127.5
Cost of sales		(445.4	)		(440.8	)		(898.4	)		(893.5	)
Gross profit		105.6			120.2			224.5			234.0
Selling, general and administrative expenses		(34.0	)		(19.7	)		(59.7	)		(44.8	)
Research, development and engineering expenses, net		(118.8	)		(99.8	)		(224.0	)		(186.3	)
Amortization of intangibles		(5.2	)		(4.5	)		(10.5	)		(23.6	)
Other income (expense), net		(52.7	)		0.4			(53.4	)		12.6
Operating loss		(105.1	)		(3.4	)		(123.1	)		(8.1	)
Loss from equity method investments		(15.9	)		(7.8	)		(29.9	)		(7.8	)
Interest income		0.7			—			0.7			—
Interest expense		(0.3	)		(0.1	)		(0.4	)		(0.1	)
Other non-operating items, net		0.4			0.3			0.5			(0.3	)
Loss before income taxes		(120.2	)		(11.0	)		(152.2	)		(16.3	)
Income tax (expense) benefit		(38.9	)		3.2			(43.6	)		2.3
Loss from discontinued operations, net of income taxes		(159.1	)		(7.8	)		(195.8	)		(14.0	)
Less: Net loss attributable to non-controlling interest		(3.6	)		(1.9	)		(8.3	)		(4.1	)
Net loss from discontinued operations	$	(155.5	)	$	(5.9	)	$	(187.5	)	$	(9.9	)

The Company has incurred $79.4 million in separation costs related to the spin-off of Veoneer, of which $70.9 million has been incurred 2018 year to date and is reported in Other income (expense), net. These costs are primarily related to professional fees associated with planning the spin-off, as well as spin-off activities within finance, tax, legal and information system functions and certain investment banking fees incurred upon the completion of the spin-off.

The following table summarizes the carrying value of major classes of assets and liabilities of Veoneer, reclassified as assets and liabilities of discontinued operations at December 31, 2017 (dollars in millions).

	December 31, 2017
ASSETS
Receivables, net		460.5
Inventories, net		154.8
Other current assets		31.9
Total current assets, discontinued operations		647.2

Property, plant and equipment, net		364.2
Investments and other non-current assets		177.5
Goodwill		291.8
Intangible assets, net		122.2
Total non-current assets, discontinued operations	$	955.7

LIABILITIES
Accounts payable	$	323.5
Accrued expenses		199.1
Other current liabilities		45.6
Total current liabilities, discontinued operations		568.2

Long-term debt		11.0
Pension liability		19.1
Other non-current liabilities		34.0
Total non-current liabilities, discontinued operations	$	64.1

In connection with the spin-off, Autoliv entered into definitive agreements with Veoneer that, among other matters, set forth the terms and conditions of the spin-off and provide a framework for Autoliv’s relationship with Veoneer after the spin-off, including the following (collectively, the “Spin-off Agreements”):

Distribution Agreement

The Distribution Agreement sets forth the principal transactions taken by Veoneer and by Autoliv in connection with the spin-off and the terms to govern certain aspects of the parties’ relationship following the spin-off. The Distribution Agreement also provides for cross-indemnities that, except as otherwise provided in the Distribution Agreement, are principally designed to place financial responsibility for the obligations and liabilities of Veoneer’s business with Veoneer and financial responsibility for the obligations and liabilities of Autoliv’s business with Autoliv. However, Autoliv has agreed to indemnify Veoneer for certain warranty, recall and product liabilities for Electronics products manufactured prior to April 1, 2018, and has retained an indemnification liability.

Amended and Restated Transition Services Agreement

Pursuant to the Amended and Restated Transition Services Agreement, Autoliv or one of its subsidiaries will provide various services to Veoneer and its subsidiaries and Veoneer or one of its subsidiaries agreed to provide various services to Autoliv and subsidiaries of Autoliv for a limited time to help ensure an orderly transition following the spin-off. The services will terminate no later than March 31, 2020.

Employee Matters Agreement

The Employee Matters Agreement governs Autoliv’s and Veoneer’s compensation and employee benefit obligations with respect to the employees and non-employee directors of each company.

Pursuant to the Agreement, the Company transferred pension and postretirement benefits other than pension related to Veoneer employees. The transfer of assets and obligations to Veoneer resulted in a net decrease in the underfunded status of the sponsored pension and postretirement benefits other than pension of $22.8 million and the transfer of unrecognized losses in accumulated other comprehensive income of $6.3 million as of June 30, 2018.

Tax Matters Agreement

Pursuant to the Tax Matters Agreement, Autoliv and Veoneer allocated the liability for taxes and certain tax assets between the two companies. The Tax Matters Agreement also governs the parties’ respective rights, responsibilities, and obligations with respect to U.S. federal, state, local and foreign taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the spin-off and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and assistance and cooperation in respect of tax matters.

Pursuant to the Tax Matters Agreement, Autoliv is the primarily obligor on all taxes which relate to any period prior to April 1, 2018. Consequently, the Company is liable for any transition taxes under the Tax Cuts and Jobs Act of 2017.

Reseller Agreements

Reseller agreements are primarily comprised of arrangements between Veoneer and Autoliv business units in Japan, the U. S., India and Sweden to address situations in which customers have not yet been able to update their systems to reflect Veoneer as the supplier. Under the terms of these agreements and based on the substance of the relationships with the customers, Veoneer has the responsibility to provide the products to the customers although orders may be placed with Autoliv and Autoliv may collect the cash for the associated invoices which is then remitted to Veoneer.

Veoneer Capital Contribution

In connection with the spin-off, Autoliv capitalized Veoneer with approximately $1 billion of cash. Net assets of $2 , 129 million, including approximately $1 billion of cash, were transferred to Veoneer on or prior to the Distribution Date, including $13 million of accumulated other comprehensive loss (primarily related to pension and cumulative translation adjustment) and the non-controlling interest of $112 million. This resulted in a $2,030 million reduction to retained earnings.

The following table presents depreciation, amortization, capital expenditures, acquisition of businesses and significant non-cash items of the discontinued operations related to Veoneer (dollars in millions).

	Six months ended
	June 30, 2018			June 30, 2017
Depreciation	$	44.8		$	40.8
Amortization of intangible assets		10.5			23.6
Capital expenditures		71.1			50.0
Acquisition in affiliate, net		71.0			111.5
M/A-COM earn-out adjustment		(14.0	)		(12.7	)
Undistributed loss from equity method investment		29.9			7.8

4. REVENUE

In accordance with ASC 606, Revenue from Contracts with Customers , revenue is measured based on consideration specified in a contract with a customer, adjusted for any variable consideration (i.e. price concessions or annual price adjustments) and estimated at contract inception. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer.

In addition, from time to time, Autoliv may make payments to customers in connection with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments unless certain criteria are met warranting capitalization. The Company considers qualitative factors such as the maturity of the product and technology involved in a potential transaction as well as how current the customer relationship is, when evaluating if a payment(s) warrant capitalization. If the payments are capitalized, the amounts are amortized to revenue as the related goods are transferred.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales.

Nature of goods and services

The following is a description of principal activities from which the Company generates its revenue. The Company has after the spin-off of its Electronics business one operating segment, Passive Safety, which includes airbag and seatbelt products and components. The Company generates revenue from the sale of production parts to original equipment manufacturers (“OEMs”).

The Company accounts for individual products separately if they are distinct (i.e., if a product is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any price concessions or annual price adjustments, is based on their stand-alone selling prices for each of the products. The stand-alone selling prices are determined based on the cost-plus margin approach.

The Company recognizes revenue for production parts primarily at a point in time.

For production parts with revenue recognized at a point in time, the company recognizes revenue upon shipment to the customers and transfer of title and risk of loss under standard commercial terms (typically F.O.B. shipping point). There are certain contracts where the criteria to recognize revenue over time have been met (e.g., there is no alternative use to the Company and the Company has an enforceable right to payment). In such cases, at period end, the Company recognizes revenue and a related asset and associated cost of goods sold and inventory. However, the financial impact of these contracts is immaterial considering the very short production cycles and limited inventory days on hand, which is typical for the automotive industry.

The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e. price concessions or annual price adjustments). Customers typically pay for the production parts based on customary business practices with stated payment terms averaging 30 days.

Disaggregation of revenue

In the following tables, revenue from the Company’s continuing operations is disaggregated by primary region and products.

Net Sales by Region
(Dollars in millions)	Three months ended				Six months ended
	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
China	$	385.1	$	306.8	$	751.5	$	629.9
Japan		195.5		185.2		410.2		385.2
Rest of Asia		211.6		201.5		422.7		387.4
Americas		682.3		612.5		1,349.5		1,260.7
Europe		737.0		677.9		1,518.5		1,362.3
Total net sales	$	2,211.5	$	1,983.9	$	4,452.4	$	4,025.5

Net Sales by Products
(Dollars in millions)	Three months ended				Six months ended
	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Airbag Products ¹⁾	$	1,437.9	$	1,316.6	$	2,877.5	$	2,671.1
Seatbelt Products ¹⁾		773.6		667.3		1,574.9		1,354.4
Total net sales	$	2,211.5	$	1,983.9	$	4,452.4	$	4,025.5
¹⁾ Including Corporate and other sales.

Contract balances

The contract assets related to the Company's rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time) at the reporting date on production parts. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. There have been no impairment losses recognized related to contract assets arising from the Company’s contracts with customers. Certain contracts have resulted in consideration in advance of fulfilling the performance obligations and the amounts received have been classified as contract liabilities.

The following tables provides information about receivables, contract assets, and contract liabilities from contracts with customers.

Contract Balances with Customers
(Dollars in millions)	As of
	June 30, 2018		December 31, 2017
Receivables, net	$	1,863.1	$	1,696.7
Contract assets ¹⁾		18.7		—
Contract liabilities ²⁾		30.3		33.0
¹⁾ Included in other current assets.
²⁾ Included in other current and other non-current liabilities.

Receivables, net of allowance
(Dollars in millions)	As of
	June 30, 2018			December 31, 2017
Receivables	$	1,868.9		$	1,703.0
Allowance at beginning of period		(6.3	)		(4.2	)
Net decrease/(increase) of allowance		0.4			(1.8	)
Translation difference		0.1			(0.3	)
Allowance at end of period		(5.8	)		(6.3	)
Receivables, net of allowance	$	1,863.1		$	1,696.7

Changes in the contract assets and the contract liabilities balances during the period are as follows:

Change in Contract Balances with Customers
(Dollars in millions)
	Three months ended June 30, 2018						Six months ended June 30, 2018
	Contract assets			Contract liabilities			Contract assets			Contract liabilities
Beginning balance	$	18.0		$	33.5		$	—		$	33.0
Increases/(decreases) due to cumulative catch up adjustment		—			—			15.0			—
Increases/(decreases) due to revenue recognized		18.7			(2.0	)		18.7			(2.4	)
Increases/(decreases) due to cash received		—			—			—			—
Increases/(decreases) due to transfer to receivables		(18.0	)		—			(15.0	)		—
Translation difference		—			(1.2	)		—			(0.3	)
Ending balance	$	18.7		$	30.3		$	18.7		$	30.3

The increases/(decreases) in the table above related to contracts assets reflect the total adjustments needed to align revenue recognition for work completed but not billed at each quarter period end.

Contract costs

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. The amount of fulfillment costs was not material for any period presented.

5. FAIR VALUE MEASUREMENTS

Assets and liabilities measured at fair value on a recurring basis

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, other current liabilities and short-term debt approximate their fair value because of the short-term maturity of these instruments.

The Company uses derivative financial instruments, “derivatives”, as part of its debt management to mitigate the market risk that occurs from its exposure to changes in interest and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial policy. The derivatives outstanding at June 30, 2018 were foreign exchange swaps. All derivatives are recognized in the consolidated financial statements at fair value. Certain derivatives are from time to time designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria. For certain other derivatives hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest and foreign exchange rates.

The Company’s derivatives are all classified as Level 2 of the fair value hierarchy and there were no transfers between the levels during this or comparable periods (for further information about the hierarchy levels, see the Company’s Annual Report on Form 10-K).

The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis for the continuing operations. The carrying value is the same as the fair value as these instruments are recognized in the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements (ISDA agreements) with all derivative counterparties, the fair values in the tables below, in the Condensed Consolidated Balance Sheet at June 30, 2018, and in the Consolidated Balance Sheet at December 31, 2017, have been presented on a gross basis. According to the close-out netting agreements, transaction amounts payable to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company chose not to offset are presented below.

	June 30, 2018
				Fair Value Measurements
Description	Nominal volume			Derivative asset			Derivative liability			Balance sheet location
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	1,037.0	¹⁾	$	0.4	²⁾	$	3.4	³⁾	Other current assets/ Other current liabilities
Total derivatives not designated as hedging instruments	$	1,037.0		$	0.4		$	3.4

¹⁾	Net nominal amount after deducting for offsetting swaps under ISDA agreements is $1,021.6 million.

²⁾	Net amount after deducting for offsetting swaps under ISDA agreements is $0.4 million.

³⁾	Net amount after deducting for offsetting swaps under ISDA agreements is $3.3 million.

	December 31, 2017
				Fair Value Measurements
Description	Nominal volume			Derivative asset			Derivative liability			Balance sheet location
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	468.2	¹⁾	$	2.4	²⁾	$	0.3	³⁾	Other current assets/ Other current liabilities
Total derivatives not designated as hedging instruments	$	468.2		$	2.4		$	0.3

¹⁾	Net nominal amount after deducting for offsetting swaps under ISDA agreements is $468.2 million.

²⁾	Net amount after deducting for offsetting swaps under ISDA agreements is $2.4 million.

³⁾	Net amount after deducting for offsetting swaps under ISDA agreements is $0.3 million.

Derivatives designated as hedging instruments

There were no derivatives designated as hedging instruments as of June 30, 2018 and December 31, 2017 related to the continuing operations.

Derivatives not designated as hedging instruments

Derivatives not designated as hedging instruments relate to economic hedges and are marked to market with all amounts recognized in the Consolidated Statements of Income. The derivatives not designated as hedging instruments outstanding at June 30, 2018 and December 31, 2017 related to the continuing operations were foreign exchange swaps.

For the three months ended June 30, 2018 and June 30, 2017, the gains and losses recognized in other non-operating items, net were a loss of $4.4 million and a gain of $1.8 million, respectively, for derivative instruments not designated as hedging instruments. For the six months ended June 30, 2018 and June 30, 2017, the gains and losses recognized in other non-operating items, net were a loss of $5.3 million and a gain of $0.3 million, respectively.

For the three and six months ended June 30, 2018 and June 30, 2017, the gains and losses recognized as interest expense were immaterial.

Fair Value of Debt

The fair value of long-term debt is determined either from quoted market prices as provided by participants in the secondary market or for long-term debt without quoted market prices, estimated using a discounted cash flow method based on the Company’s current borrowing rates for similar types of financing. The Company has determined that each of these fair value measurements of debt reside within Level 2 of the fair value hierarchy.

On June 18, 2018, Autoliv announced that it priced a 5-year bond offering of EUR 500 million in the Eurobond market (the “Notes”). The Notes were issued on June 26, 2018, at an issue price of 99.527%, and carry a coupon of 0.75% (paid annually in arrears), which implies a per annum yield of 0.847%.

The fair value and carrying value of debt for the continuing operations is summarized in the table below (dollars in millions).

	June 30,		June 30,		December 31,		December 31,
	2018		2018		2017		2017
	Carrying		Fair		Carrying		Fair
	value ¹⁾		value		value ¹⁾		value
Long-term debt
U.S. Private placement	$	1,101.7	$	1,133.1	$	1,310.5	$	1,379.9
Eurobond		576.2		583.2		—		—
Other long-term debt		0.1		0.1		0.2		0.2
Total	$	1,678.0	$	1,716.4	$	1,310.7	$	1,380.1

Short-term debt
Commercial paper	$	387.5	$	387.5	$	—	$	—
Short-term portion of long-term debt		208.0		208.7		0.2		0.2
Overdrafts and other short-term debt		10.1		9.9		19.5		19.5
Total	$	605.6	$	606.1	$	19.7	$	19.7

¹⁾	Debt as reported in balance sheet.

Assets and liabilities measured at fair value on a nonrecurring basis

In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also has assets and liabilities in its balance sheet that are measured at fair value on a nonrecurring basis including certain long-lived assets, including equity method investments, goodwill and other intangible assets, typically as it relates to impairment.

The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets.

6. INCOME TAXES

The effective tax rate in the second quarter of 2018 was 8.1% compared to 33.2% in the same quarter of 2017. Discrete tax items, net in the second quarter of 2018 had a favorable impact of 19.2%, principally due to the reversal of valuation allowances against deferred tax assets as a consequence of the spin-off. In the second quarter of 2017, discrete tax items, net had an unfavorable impact of 7.3% , primarily due to valuation allowances recorded against specific deferred tax assets.

The effective tax rate in the first six months of 2018 was 19.8% compared to 29.7% for the first six months of 2017. The effective tax rate in the first six months of 2018 was favorably impacted by 7.4%, due to discrete tax items, principally the reversal of valuation allowances against deferred tax assets. In the first six months of 2017, the net impact of discrete tax items caused a 3.6% increase to the effective tax rate, primarily due to valuation allowances recorded against specific deferred tax assets.

In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017.

On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. For the six months ended June 30, 2018, the Company did not obtain additional information affecting the provisional amount initially recorded for the transition tax for the year ended December 31, 2017. As a result, the Company did not make any adjustment to the provisional transition tax recorded in December 2017. Additional work is still necessary for a more detailed analysis of the Company's deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete.

The Company files income tax returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions. At any given time, the Company is undergoing tax audits in several tax jurisdictions covering multiple years. The Company is no longer subject to income tax examination by the U.S. federal income tax authorities for years prior to 2014. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2009.

As of June 30, 2018, the Company is not aware of any proposed income tax adjustments resulting from tax examinations that would have a material impact on the Company’s condensed consolidated financial statements. The conclusion of such audits could result in additional increases or decreases to unrecognized tax benefits in some future period or periods.

During the second quarter of 2018, the Company recorded a net increase of $0.6 million to income tax reserves for unrecognized tax benefits based on tax positions related to the current year, including accruing additional interest related to unrecognized tax benefits of prior years. In addition, during the second quarter of 2018, the Company recorded a decrease of $3.1 million to income tax reserves for unrecognized tax benefits of prior years due to the release of tax reserves. Of the total unrecognized tax benefits of $32.2 million recorded at June 30, 2018, $4.0 million is classified as current tax payable and $28.2 million is classified as non-current tax payable on the Condensed Consolidated Balance Sheet.

7. INV ENTORIES

Inventories are stated at the lower of cost (principally FIFO) and net realizable value. The components of inventories for the continuing operations were as follows (dollars in millions):

	As of
	June 30, 2018			December 31, 2017
Raw materials	$	347.4		$	333.2
Work in progress		270.4			263.8
Finished products		170.7			187.9
Inventories	$	788.5		$	784.9
Inventory valuation reserve		(78.8	)		(80.6	)
Total inventories, net of reserve	$	709.7		$	704.3

8. RESTRUCTURING

Restructuring provisions are made on a case-by-case basis and primarily include severance costs incurred in connection with headcount reductions and plant consolidations. The Company expects to finance restructuring programs over the next several years through cash generated from its ongoing operations or through cash available under existing credit facilities. The Company does not expect that the execution of these activities will have a material adverse impact on its liquidity position. The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income.

The majority of the reserve balance as of June 30, 2018 pertains to restructuring activities initiated in Western Europe over the past few years. The Company anticipates that its restructuring initiatives in Western Europe for a number of plants, none of which are individually or in the aggregate material as of June 30, 2018, will continue through dates ranging from 2018 through 2021. The total amount of costs expected to be incurred in connection with these restructuring activities ranges from approximately $10 million to $28 million for each individual activity. In the aggregate, the cost for these Western European restructuring initiatives is approximately $101 million and the remaining restructuring liability as of June 30, 2018 is approximately $32 million out of the $36 million total reserve balance.

The table below summarizes the change in the balance sheet position of the restructuring reserves related to the continuing operations (dollars in millions).

	Three months ended June 30, 2018								Three months ended June 30, 2017
	Restructuring employee-related			Restructuring Other		Total			Restructuring employee-related			Restructuring Other		Total
Reserve at beginning of the period	$	40.9		$	0.2	$	41.1		$	29.3		$	0.1	$	29.4
Provision/charge		1.0			—		1.0			1.3			0.2		1.5
Provision/reversal		—			—		—			(3.7	)		—		(3.7	)
Cash payments		(3.9	)		—		(3.9	)		(4.2	)		—		(4.2	)
Translation difference		(2.2	)		—		(2.2	)		1.7			—		1.7
Reserve at end of the period	$	35.8		$	0.2	$	36.0		$	24.4		$	0.3	$	24.7

	Six months ended June 30, 2018								Six months ended June 30, 2017
	Restructuring employee-related			Restructuring Other		Total			Restructuring employee-related			Restructuring Other		Total
Reserve at beginning of the period	$	39.4		$	0.2	$	39.6		$	35.7		$	0.1	$	35.8
Provision/charge		4.3			—		4.3			3.1			0.2		3.3
Provision/reversal		—			—		—			(3.8	)		—		(3.8	)
Cash payments		(6.8	)		—		(6.8	)		(12.9	)		—		(12.9	)
Translation difference		(1.1	)		—		(1.1	)		2.3			—		2.3
Reserve at end of the period	$	35.8		$	0.2	$	36.0		$	24.4		$	0.3	$	24.7

9. PRODUCT-REL ATED LIABILITIES

The Company has reserves for product risks. Such reserves are related to product performance issues including recalls, product liability and warranty issues. For further explanation, see Note 12. Contingent Liabilities below.

For the three and six months ended June 30, 2018 and June 30, 2017, provisions and cash paid primarily relate to recall and warranty related issues. The increase in the reserve balance as of June 30, 2018 compared to the prior year was mainly due new obligations.

Pursuant to the Spin-Off Agreements, Autoliv is also required to indemnify Veoneer for recalls related to certain qualified Electronics products. At June 30, 2018, the indemnification liabilities are approximately $23 million within accrued expenses on the Consolidated Balance Sheets. Insurance receivables are included within Other current assets in the Condensed Consolidated Balance Sheets.

The table below summarizes the change in the balance sheet position of the product-related liabilities related to the continuing operations (dollars in millions).

	Three months ended						Six months ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Reserve at beginning of the period	$	80.5		$	95.4		$	95.6		$	90.6
Change in reserve		19.4			2.7			18.0			10.0
Cash payments		(5.2	)		(6.7	)		(19.7	)		(10.3	)
Translation difference		(1.4	)		0.8			(0.6	)		1.9
Reserve at end of the period	$	93.3		$	92.2		$	93.3		$	92.2

10. RETIREMENT PLANS

The Company’s most significant retirement plan is the U.S. plan for which the benefits are based on an average of the employee’s earnings in the years preceding retirement and on credited service. In a prior year, the Company closed participation in the Autoliv ASP, Inc. Pension Plan to exclude those employees hired after December 31, 2003. Within the U.S. there is also a non-qualified restoration plan that provides benefits to employees whose benefits in the primary U.S. plan are restricted by limitations on the compensation that can be considered in calculating their benefits. In December 2017 the Company decided to amend the U.S. defined pension plan, communicating a benefits freeze that will begin on December 31, 2021.

For the Company’s non-U.S. defined benefit plans the most significant individual plan resides in the U.K. The Company has closed participation in the U.K. defined benefit plan to exclude all employees hired after April 30, 2003 with few members accruing benefits.

The Net Periodic Benefit Costs from continuing operations related to Other Post-retirement Benefits were not significant to the condensed consolidated financial statements of the Company for the three and six month periods ended June 30, 2018 and June 30, 2017 and are not included in the table below.

The components of total Net Periodic Benefit Cost from continuing operations associated with the Company’s defined benefit retirement plans are as follows (dollars in millions):

	Three months ended						Six months ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Service cost	$	5.0		$	4.7		$	10.0		$	9.4
Interest cost		4.6			5.0			9.3			10.0
Expected return on plan assets		(5.6	)		(4.9	)		(11.2	)		(9.8	)
Amortization prior service cost		0.1			0.1			0.1			0.1
Amortization of actuarial loss		0.8			1.9			1.6			3.8
Net Periodic Benefit Cost	$	4.9		$	6.8		$	9.8		$	13.5

The Service cost and Amortization of prior service cost components from continuing operations are reported among other employee compensation costs in the Consolidated Statements of Income. The remaining components Interest cost, Expected return on plan assets and Amortization of actuarial loss are reported as Other non-operating items, net in the Consolidated Statements of Income.

11. E QUITY

The changes in the equity components for the six months ended June 30, 2018 were as follows (dollars in millions).

	Common stock		Additional paid in capital		Retained earnings			Accumulated other comprehensive (loss) income			Treasury stock			Total parent shareholders' equity			Non- controlling interest			Total equity
Balance at December 31, 2017	$	102.8	$	1,329.3	$	4,079.2		$	(287.5	)	$	(1,188.7	)	$	4,035.1		$	134.3		$	4,169.4
Comprehensive Income:
Net income		—		—		163.9			—			—			163.9			(7.4	)		156.5
Foreign currency translation		—		—		—			(105.2	)		—			(105.2	)		0.4			(104.8	)
Net change in cash flow hedges		—		—		—			1.1			—			1.1			—			1.1
Defined benefit pension plan		—		—		—			5.7			—			5.7			—			5.7
Total Comprehensive Income		—		—	163.9				(98.4	)		—			65.5			(7.0	)		58.5
Stock-based compensation		—		—		—			—			15.8			15.8			—			15.8
Cash dividends declared		—		—		(108.4	)		—			—			(108.4	)		—			(108.4	)
Dividends paid to non-controlling interest on subsidiary shares		—		—		—			—			—			—			(2.0	)		(2.0	)
Distribution of Veoneer		—		—		(2,029.8	)		13.0			—			(2,016.8	)		(112.2	)		(2,129.0	)
Adjustment due to adoption of ASC 606		—		—		3.3			—			—			3.3			—			3.3
Adjustment due to adoption of ASU 2018-02		—		—		10.2			(10.2	)		—			—			—			—
Balance at June 30, 2018	$	102.8	$	1,329.3	$	2,118.4		$	(383.1	)	$	(1,172.9	)	$	1,994.5		$	13.1		$	2,007.6

The following tables present details about components of accumulated comprehensive income (loss) for the three and six months ended June 30, 2018 and June 30, 2017, respectively (dollars in millions).

	Three Months ended
	June 30, 2018									June 30, 2017
	Equity attributable to									Equity attributable to
	Controlling interest			Non-controlling interest			Total			Controlling interest			Non-controlling interest			Total
Balance at beginning of period	$	4,206.2		$	135.8		$	4,342.0		$	3,853.7		$	253.2		$	4,106.9
Total Comprehensive Income:
Net income		37.2			(3.1	)		34.1			129.8			(1.5	)		128.3
Foreign currency translation		(190.9	)		(5.4	)		(196.3	)		84.6			0.9			85.5
Net change in cash flow hedges		0.7			—			0.7			(3.9	)		—			(3.9	)
Defined benefit pension plan		5.1			—			5.1			1.3			—			1.3
Total Comprehensive Income		(147.9	)		(8.5	)		(156.4	)		211.8			(0.6	)		211.2
Common Stock incentives		7.2			—			7.2			3.8			—			3.8
Cash dividends declared		(54.2	)		—			(54.2	)		(52.6	)		—			(52.6	)
Dividends paid to non-controlling interest on subsidiary shares		—			(2.0	)		(2.0	)								—
Distribution of Veoneer		(2,016.8	)		(112.2	)		(2,129.0	)		—			—			—
Repurchased shares		—			—			—			(157.0	)		—			(157.0	)
Adjustment due to adoption of ASC 606					—			—			—			—			—
Balance at end of period	$	1,994.5		$	13.1		$	2,007.6		$	3,859.7		$	252.6		$	4,112.3

	Six Months ended
	June 30, 2018									June 30, 2017
	Equity attributable to									Equity attributable to
	Controlling interest			Non-controlling interest			Total			Controlling interest			Non-controlling interest			Total
Balance at beginning of period	$	4,035.1		$	134.3		$	4,169.4		$	3,677.2		$	249.2		$	3,926.4
Total Comprehensive Income:
Net income		163.9			(7.4	)		156.5			273.7			(3.3	)		270.4
Foreign currency translation		(105.2	)		0.4			(104.8	)		167.3			6.7			174.0
Net change in cash flow hedges		1.1			—			1.1			(6.6	)		—			(6.6	)
Defined benefit pension plan		5.7			—			5.7			2.5			—			2.5
Total Comprehensive Income		65.5			(7.0	)	58.5				436.9		3.4				440.3
Common Stock incentives		15.8			—			15.8			8.2			—			8.2
Cash dividends declared		(108.4	)		—			(108.4	)		(105.6	)		—			(105.6	)
Dividends paid to non-controlling interest on subsidiary shares		—			(2.0	)		(2.0	)								—
Distribution of Veoneer		(2,016.8	)		(112.2	)		(2,129.0	)		—			—			—
Repurchased shares		—			—			—			(157.0	)		—			(157.0	)
Adjustment due to adoption of ASC 606		3.3			—			3.3			—			—			—
Balance at end of period	$	1,994.5		$	13.1		$	2,007.6		$	3,859.7		$	252.6		$	4,112.3

Stock Repurchase Program

The Company did not repurchase any shares of its common stock in the second quarter of 2018. In the second quarter of 2017, the Company repurchased 1.4 million shares of its common stock for cash at an aggregate amount of $157 million. The Company is authorized to repurchase an additional 2,986,288 shares under the stock repurchase program at June 30, 2018.

12. CONTINGENT LIABILITIES

Legal Proceedings

Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, and with the exception of losses resulting from the antitrust proceedings described below, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not have a material adverse impact on the consolidated financial position of Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability or other losses in the future.

In October 2014, one of the Company’s Brazilian subsidiaries received a notice of deficiency from the state tax authorities from the state of São Paulo, Brazil which, primarily, alleged violations of ICMS (VAT) payments and improper warehousing documentation. The aggregate assessment for all alleged violations was R$81 million (approximately $21 million), inclusive of fines, penalties and interest. The Company believed that a loss was probable with respect to at least a portion of the assessed amount and accrued an amount in 2015 that was not material to the Company’s results of operations . During the first quarter of 2018, the Brazilian authorities offered an amnesty period which would allow taxpayers to reduce the penalties associated with eligible tax matters by up to 85%. During the second quarter of 2018, the Company applied to participate in such tax amnesty program which was accepted by the Brazilian authorities. The Company paid an immaterial amount during the period ended June 30, 2018 to resolve this matter.

In March 2015, the Company was informed of an investigation being conducted in Turkey by the Directorate of Kocaeli Customs Custody, Smuggling and Enquiry into the Company’s import and customs payment structure and the associated import taxes and fees for the period of 2006–2012. The Company cannot predict the duration, scope or ultimate outcome of this investigation and is unable to estimate the financial impact it may have, or predict the reporting periods in which any such financial impacts may be recorded. Consequently, the Company has made no provision as of June 30, 2018 with respect to this investigation.

ANTITRUST MATTERS

Authorities in several jurisdictions are currently conducting or have conducted broad, and in some cases, long-running investigations of suspected anti-competitive behavior among parts suppliers in the global automotive vehicle industry. These investigations include, but are not limited to, the products that the Company sells. In addition to concluded and pending matters, authorities of other countries with significant light vehicle manufacturing or sales may initiate similar investigations. It is the Company’s policy to cooperate with governmental investigations.

On June 7-9, 201 1, representatives of the European Commission (“EC”), the European antitrust authority, visited two facilities of a Company subsidiary in Germany to gather information for an investigation of anti-competitive behavior among suppliers of occupant safety sys tems.

On November 22, 2017, the EC concluded a discrete portion of its investigation and imposed a fine on the Company of EUR 8.1 million (approximately $9.7 million) with respect to this portion of the EC’s overall investigation while it continues the more significant portion of its investigation. The Company paid this amount during the first quarter of 2018, and had previously accrued EUR 8.3 million (approximately $9.9 million) in 2017 with respect to this discrete portion of the investigation.

Management does not believe the outcome of this discrete portion of the EC’s investigation provides an indication of the total probable loss associated with the EC investigation as a whole. The Company remains unable to estimate the financial impact of what the Company believes to be the substantially more significant, continuing portion of the investigation or predict the reporting periods in which such financial impact may be recorded. Consequently, the Company has not recorded a provision for loss as of June 30, 2018 other than as noted above for the discrete portion of the investigation. However, management believes it is probable that the Company’s operating results and cash flows will be materially adversely impacted for the reporting periods in which the continuing portion of the investigation is resolved or becomes estimable.

In August 2014, the Competition Commission of South Africa (the “CCSA”) contacted the Company regarding an investigation into the Company’s sales of occupant safety systems in South Africa. In September 2017, the Company entered into a settlement agreement with the CCSA in which the Company agreed to pay an administrative penalty of R150 million (approximately $11 million), which the Competition Tribunal in South Africa confirmed on November 22, 2017. The Company had previously accrued a total of approximately $6 million in 2016 for this matter, and accrued an additional amount of approximately $5 million in 2017 with respect to the proposed settlement, and final payment of the settlement amount was made in February 2018.

In November 2016, the Company entered into a settlement agreement with the General Superintendence of the Administrative Council for Economic Defense in Brazil with respect to an investigation of an alleged cartel involving sales in Brazil of seatbelts, airbags and steering wheels by the Company’s Brazilian subsidiary and the Brazilian subsidiary of a competitor for an amount that is not material to the Company’s results of operations. Settlement amounts were accrued for this matter during the periods ended December 31, 2015 and December 31, 2016, and final payment of the accrued amounts was made in 2017.

The Company is also subject to civil litigation alleging anti-competitive conduct in the U.S. and Canada. Specifically, the Company, several of its subsidiaries and its competitors were named as defendants in a total of nineteen purported antitrust class action lawsuits filed between June 2012 and June 2015. Fifteen of these lawsuits were filed in the U.S. and were consolidated in the Occupant Safety Systems (OSS) segment of the Automobile Parts Antitrust Litigation, a Multi-District Litigation (MDL) proceeding in the United States District Court for the Eastern District of Michigan. Plaintiffs in the U.S. cases sought to represent four purported classes - direct purchasers, auto dealers, end-payors, and truck and equipment dealers who purchased in the U.S. occupant safety systems or components directly from a defendant, indirectly through purchases or leases of new vehicles containing such systems, or through purchases of replacement parts.

In May 2014, the Company, without admitting any liability, entered into separate settlement agreements with the direct purchasers, auto dealers, end-payors plaintiff classes, which were granted final approval by the MDL court in 2015 and 2016. The total settlement amount of $65 million (later reduced to approximately $60.5 million as a result of opt-outs from the direct purchaser settlement) was expensed in 2014. In April 2016, the Company entered into a settlement agreement with the truck and equipment dealers’ class, which was granted final approval by the MDL court in 2016, for an amount that is not material to the Company’s results of operations. The class settlements do not resolve any claims of settlement class members who opt-out of the settlements or the unasserted claims of any purchasers of occupant safety systems who are not otherwise included in a settlement class, such as states and municipalities. Two direct purchasers opted out of the Company’s direct purchaser class settlement and several individuals and one insurer (and its affiliated entities) opted-out of the end-payor class settlements, including the Company’s settlement.

In September 2016, the insurer (and its affiliated entities) that opted out of the end-payor class settlement filed an antitrust lawsuit in the United States District Court for the Eastern District of Michigan, the venue for the MDL, against the Company and the other settling defendants in the end-payor class settlements. The defendants’ motion to dismiss the complaint on various grounds is pending. The Company cannot predict or estimate the duration or ultimate outcome of this matter.

In March 2015, the Company, without admitting any liability, reached agreements regarding additional settlements to resolve certain direct purchasers’ global (including U.S.) or non-U.S. antitrust claims that were not covered by the direct purchaser class settlement. The total amount of these additional settlements was $81 million. Autoliv expensed during the first quarter of 2015 approximately $77 million as a result of these additional settlements, net of existing amounts that had been accrued in 2014.

The remaining four antitrust class action lawsuits were filed in Canada (Sheridan Chevrolet Cadillac Ltd. et al. v. Autoliv, Inc. et al., filed in the Ontario Superior Court of Justice on January 18, 2013; M. Serge Asselin v. Autoliv, Inc. et al., filed in the Superior Court of Quebec on March 14, 2013; Ewert v. Autoliv, Inc. et al., filed in the Supreme Court of British Columbia on July 18, 2013; and Cindy Retallick and Jagjeet Singh Rajput v. Autoliv ASP, Inc. et al., filed in the Queen’s Bench of the Judicial Center

of Regina in the province of Saskatchewan on May 14, 2014) asserting claims on behalf of putative classes of both direct and indirect purchasers of occupant safety systems. In February 2017, the Company entered into, and the courts subsequently approved, a settlemen t agreement with plaintiffs in three of the four class actions to settle on a nationwide class basis for an amount that is not material to the Company’s results of operations. Settlement amounts were accrued for this matter during the period ended December 31, 2016 and final payment of the accrued amounts was made in 2017. This national settlement includes the claims of the putative members of the fourth class action.

PRODUCT WARRANTY, RECALLS AND INTELLECTUAL PROPERTY

Autoliv is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected, the Company may face warranty and recall claims. Where such (actual or alleged) failure results, or is alleged to result, in bodily injury and/or property damage, the Company may also face product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product (or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall practices. A warranty, recall or product-liability claim brought against the Company in excess of its insurance may have a material adverse effect on the Company’s business. Vehicle manufacturers are also increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the repair or replacement costs of products when the product supplied did not perform as represented by us or expected by the customer. Accordingly, the future costs of warranty claims by the customers may be material. However, the Company believes its established reserves are adequate. Autoliv’s warranty reserves are based upon the Company’s best estimates of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves, and adjusts them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company’s recorded estimates.

In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new orders, which may have a material impact on the Company’s results of operations.

The Company carries insurance for potential recall and product liability claims at coverage levels based on our prior claims experience. In addition, a number of the agreements entered into by the Company, including the Spin-off Agreements, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future, or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance.

On June 29, 2016, the Company announced that it is cooperating with Toyota Motor Corp. in its recall of approximately 1.4 million vehicles equipped with a certain model of the Company’s side curtain airbag (the “Toyota Recall”). Toyota has informed the Company that there have been eight reported incidents where a side curtain airbag has partially inflated without a deployment signal from the airbag control unit. The incidents have all occurred in parked, unoccupied vehicles and no personal injuries have been reported. The root cause analysis of the issue is ongoing. However, at this point in time the Company believes that a compromised manufacturing process at a sub-supplier may be a contributing factor and, as no incidents have been confirmed in vehicles produced by other OEMs with the same inflator produced during the same period as those recalled by Toyota, that vehicle-specific characteristics may also contribute to the issue. The sub-supplier’s manufacturing process was changed in January 2012, and the vehicles now recalled by Toyota represent more than half of all inflators of the relevant type manufactured before the sub-supplier process was changed.

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, the Company determined pursuant to ASC 450 that a loss with respect to this issue is reasonably possible. If the Company is obligated to indemnify Toyota for the costs associated with the Toyota Recall, the Company expects that its insurance will generally cover such costs and liabilities and estimates that the Company’s loss, net of expected insurance recoveries, would be less than $20 million. However, the ultimate costs of the Toyota Recall could be materially different. The main variables affecting the ultimate cost for the Company are: the determination of proportionate responsibility (if any) among Toyota, the Company, and any relevant sub-suppliers; the ultimate number of vehicles repaired; the cost of repair per vehicle; and the actual recoveries from sub-suppliers and insurers. The Company’s insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered.

In its products, the Company utilizes technologies which may be subject to intellectual property rights of third parties. While the Company does seek to procure the necessary rights to utilize intellectual property rights associated with its products, it m ay fail to do so. Where the Company so fails, the Company may be exposed to material claims from the owners of such rights. Where the Company has sold products which infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result thereof. Such claims could be material.

The table in Note 9. Product-Related Liabilities above summarizes the change in the balance sheet position of the product related liabilities.

13. STOCK INCENTIVE PLAN

Eligible employees of Autoliv participate in Autoliv, Inc.1997 Stock Incentive Plan (the Plan) and received Autoliv stock-based awards which include stock options, restricted stock units and performance shares. In connection with the Veoneer spin-off, each outstanding Autoliv stock-based award as of June 29, 2018 was converted to stock awards that have underlying shares of both Autoliv and Veoneer common shares.

The conversion that occurred on the distribution date of Veoneer was based on the following:

•

Stock Option (SOs) - A number of SOs comprising 50% of the value of the outstanding SOs calculated immediately prior to the spin-off transaction shall continue to be applicable to Autoliv common stock. A number of SOs comprising the remaining 50% percent of the pre spin-off value shall be replaced with options to acquire shares of Veoneer common stock.

•

Restricted Stock Units (RSUs) - A number of RSUs comprising 50% of the value of the outstanding RSUs calculated immediately prior to the spin-off transaction continue to be applicable to Autoliv common stock. A number of RSUs comprising the remaining 50% of the pre spin-off value were replaced with RSUs with underlying Veoneer common stock.

•	Performance Shares (PSs) - Outstanding PSs pre spin-off were converted to time-based RSUs and shall be treated in the same manner as other outstanding RSUs (as described above) on the distribution date of Veoneer. The number of outstanding PSs pre spin-off were converted based on:

The level of actual achievement of performance goals for each outstanding PSs for the period between the first day of the performance period and December 31, 2017 (the “Performance Measurement Date”), referred to as “Level of Performance-to-Date” and;

The greater of the Level of Performance-to-Date and estimated target performance level (i.e., 100%) for the period between the Performance Measurement Date and the last day of the performance period.

In each case above, the conversion was intended to generally preserve the intrinsic value of the original award determined as of the distribution date of Veoneer. The number of converted RSUs and SOs for Autoliv and Veoneer was based on the average of Autoliv closing stock prices for the last 5 days prior to the spin-off and the average of closing stock prices of Autoliv and Veoneer, respectively, for the first 5 days after the spin-off.

As a result of the spin-off and the related conversion, it was determined that the stock based awards were modified in accordance with ASC 718, Compensation – Stock Compensation. As a result, the fair value of the RSUs and SOs immediately before and after the modification was assessed in order to determine if the modification resulted in any incremental compensation cost related to the awards, including consideration of the impact of conversion using the 5 day average. Based on the valuation performed, it was determined that the conversion did not result in any incremental compensation cost for any of the outstanding awards.

With certain limited exceptions, including the freezing of the Performance Measurement Date to December 31, 2017 as noted above, the SOs and RSUs post spin-off are subject to the same terms and conditions (including with respect to vesting and expiration) that were applicable to such Autoliv stock-based awards immediately prior to the conversion and as described in the Audited Combined Financial Statements for the year ended December 31, 2017 and corresponding notes.

The Company recorded approximately $2.4 million and $4.7 million stock-based compensation expense in continuing operations related to RSUs and PSs for the three and six months ended June 30, 2018, respectively. During the three and six months ended June 30, 2017, the Company recorded $2.6 million and $4.8 million, respectively, of stock-based compensation expense in continuing operations related to RSUs and PSs.

14. EARNINGS PER SHARE

The Company calculates basic earnings per share (EPS) by dividing net income attributable to controlling interest by the weighted-average number of shares of common stock outstanding for the period (net of treasury shares). The Company’s unvested RSUs and PSs, of which some include the right to receive non-forfeitable dividend equivalents, are considered participating

securities. The diluted EPS reflects the potential dilution that could occur if common stock were issued for awards under the Company’s Stock Incentive Pl an and is calculated using the more dilutive method of either the two-class method or the treasury stock method. T he treasury stock method assumes that the Company uses the proceeds from the exercise of stock option awards to repurchase ordinary shares at the average market price during the period. For unvested restricted stock and unvested performance share awards, assumed proceeds under the treasury stock method would include unamortized compensation cost and windfall tax benefits or shortfalls. Calcula tions of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are sim ilarly excluded from the denominator.

For the three and six months ended June 30, 2018, no shares were excluded from the computation of the diluted EPS. For the three and six months ended June 30, 2017, approximately 0.1 million shares and 0.1 million shares of common stock, respectively, were not included in the computation of the diluted EPS, which could potentially dilute basic EPS in the future.

During the three and six months ended June 30, 2018, approximately 41 thousand and 159 thousand shares of common stock, respectively, from the treasury stock have been utilized by the Company’s Stock Incentive Plan. During the three and six months ended June 30, 2017, approximately 14 thousand and 109 thousand shares of common stock, respectively, from the treasury stock were utilized by the Company’s Stock Incentive Plan.

The computation of basic and diluted EPS under the two-class method were as follows:

(In millions, except per share amounts)	Three months ended						Six months ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Numerator:
Basic and diluted:
Net income from continuing operations		192.7			135.7			351.4			283.6
Net income from discontinued operations		(155.5	)		(5.9	)		(187.5	)		(9.9	)
Net income attributable to controlling interest	$	37.2		$	129.8		$	163.9		$	273.7
Participating share awards with dividend equivalent rights		0.0			0.0			0.0			0.0
Net income available to common shareholders		37.2			129.8			163.9			273.7
Earnings allocated to participating share awards		0.0			0.0			0.0			0.0
Net income attributable to common shareholders	$	37.2		$	129.8		$	163.9		$	273.7
Denominator:
Basic: Weighted average common stock		87.1			87.9			87.1			88.1
Add: Weighted average stock options/share awards		0.3			0.2			0.3			0.2
Diluted:		87.4			88.1			87.4			88.3

Basic EPS:
Continuing operations	$	2.21		$	1.54		$	4.03		$	3.22
Discontinued operations	$	(1.78	)	$	(0.07	)	$	(2.15	)	$	(0.11	)
Basic EPS	$	0.43		$	1.47		$	1.88		$	3.11

Diluted EPS:
Continuing operations	$	2.20		$	1.54		$	4.02		$	3.21
Discontinued operations	$	(1.77	)	$	(0.07	)	$	(2.14	)	$	(0.11	)
Diluted EPS	$	0.43		$	1.47		$	1.88		$	3.10

15. RELATED PARTY TRANSACTIONS

Throughout the periods covered by the unaudited condensed consolidated financial statements, Autoliv purchased finished goods from Veoneer. Related party purchases from Veoneer amounted to approximately $20 million and $18 million for the three months ended June 30, 2018 and June 30, 2017 respectively, and to approximately $43 million and $35 million for the six months ended June 30, 2018 and June 30, 2017, respectively.

Related party balances

Amounts due to and due from related parties as of June 30, 2018 and December 31, 2017 are summarized in the below table:

	As of
Related party (Dollars in millions)	June 30, 2018		December 31, 2017
Related party receivables	$	46.9	$	—
Related party payables		70.5		—

Related party receivables primarily relate to an agreement between Autoliv and Veoneer.

The related party payables are mainly driven by Reseller Agreements put in place in connection with the spin-off. The Reseller Agreements are between Autoliv and Veoneer to facilitate the temporary arrangement of the sale of Veoneer products in the interim period post spin-off. For further information, see Note 3. Discontinued Operations above.

16. SUBSEQUENT EVENTS

There were no reportable events subsequent to June 30, 2018.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the United States Securities and Exchange Commission (the “SEC”) on February 22, 2018. Unless otherwise noted, all dollar amounts are in millions.

Autoliv, Inc. (“Autoliv” or the “Company”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden. It was created in 1997 from the merger of Autoliv AB (“AAB”) and the automotive safety products business of Morton International, Inc. The Company functions as a holding corporation and owns two principal operating subsidiaries, AAB and Autoliv ASP, Inc.

On June 29, 2018, Autoliv completed the spin-off of its Electronics business into Veoneer, Inc. (“Veoneer”) through the distribution of all of the outstanding shares of common stock of Veoneer to its stockholders as of the close of business on June 12, 2018, the common stock record date for the distribution, in a tax-free, pro rata distribution. Each Autoliv stockholder received one share of Veoneer common stock for every one share of Autoliv common stock held by such person on the common stock record date, and each Autoliv Swedish Depository Receipt (SDR) holder received one Veoneer SDR for each Autoliv SDR held by such person on the applicable SDR record date. Autoliv distributed a total of approximately 87 million shares of Veoneer common stock to the Autoliv stockholders as of the close of business on the record date. On July 2, 2018, Veoneer’s common stock began regular-way trading on the New York Stock Exchange under the symbol “VNE” and its SDRs began trading on Nasdaq Stockholm under the symbol “VNE SDB.” On April 1, 2018, pursuant to the terms of a master transfer agreement entered into between Autoliv and Veoneer, assets related to the Electronics business were transferred to, and liabilities related to the Electronics business were retained or assumed by Veoneer subject to certain exceptions. See Note 3. Discontinued Operations to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for additional information.

Autoliv is a leading developer, manufacturer and supplier of automotive safety systems to the automotive industry with a broad range of automotive safety product offerings. Upon completion of the spin-off of its Electronics business, Autoliv now operates as a single segment consisting of passive safety products. Passive safety products are primarily meant to improve vehicle safety. Passive safety products include modules and components for passenger and driver-side airbags, side-impact airbag protection systems, seatbelts, steering wheels, whiplash protection systems and child seats, and components for such systems.

Autoliv’s filings with the SEC, including this Quarterly Report on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, proxy statements and all of our other reports and statements, and amendments thereto, are available free of charge on our corporate website at www.autoliv.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC (generally the same day as the filing).

Shares of Autoliv common stock trade on the New York Stock Exchange under the symbol “ALV”. Swedish Depository Receipts representing shares of Autoliv common stock (“SDRs”) trade on NASDAQ Stockholm under the symbol “ALIV SDB”, and options in SDRs trade on the same exchange under the name “Autoliv SDB”. Options in Autoliv shares trade on NASDAQ OMX PHLX and NYSE Amex Options under the symbol “ALV”. Our fiscal year ends on December 31.

EXECUTIVE OVERVIEW

With the Veoneer spin-off executed successfully, the Autoliv team is now fully focused on the Company’s occupant safety products, managing the product launches and delivering value to Autoliv’s stakeholders.

Built on previous years’ strong order intake, the second quarter marked the step-up in organic growth that Autoliv has been anticipating. The number of product launches in the second quarter of 2018 increased by 72% compared to a year earlier. In the quarter, the growth markets, China, India, ASEAN and South America, made up 60% of the organic growth (non-U.S. GAAP measure), taking their share of sales from 21% to 24%, with China leading the way by growing organically (non-U.S. GAAP measure) by 18%. North America grew by close to 12% organically (non-U.S. GAAP measure).

The product launches are on track, with some delays in ramp-up of certain models and at a somewhat elevated level of launch costs. The Company had some headwinds from raw material pricing and currency movements in the second quarter, which limited the positive effects from the strong sales growth. Our 2018 full year indication and continued strong order intake supports that Autoliv is on track towards its 2020 targets, and Autoliv is fully focused on delivering more than $10 billion in sales and around 13% adjusted operating margin in 2020.

Favorable industry fundamentals continued to drive higher global automotive demand and production in the quarter. The Company carefully monitors the development of issues fundamental to its business such as possible NAFTA renegotiations and various trade barriers on raw materials and automotive products.

With a never-ending focu s on quality, innovation and operational excellence, Autoliv continues to execute on our growing business volumes and new opportunities in a more focused Autoliv.

Non-U.S. GAAP financial measures

Some of the following discussions refer to non-U.S. GAAP financial measures: see reconciliations for "Organic sales", "Operating working capital", "Net debt" and “Leverage ratio” provided below. Management believes that these non-U.S. GAAP financial measures provide supplemental information to investors regarding the performance of the Company’s business and assist investors in analyzing trends in the Company's business. Additional descriptions regarding management’s use of these financial measures are included below. Investors should consider these non-U.S. GAAP financial measures in addition to, rather than as substitutes for, financial reporting measures prepared in accordance with U.S. GAAP. These historical non-U.S. GAAP financial measures have been identified as applicable in each section of this report with a tabular presentation reconciling them to the most directly comparable U.S. GAAP financial measures. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies.

RESULTS OF OPERATIONS

Overview

The following table shows some of the key ratios management uses internally to analyze the Company's current and future financial performance and core operations as well as to identify trends in the Company’s financial conditions and results of operations. We have provided this information to investors to assist in meaningful comparisons of past and present operating results and to assist in highlighting the results of ongoing core operations. These ratios are more fully explained below and should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K and the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

All the results herein present the performance of Autoliv giving effect to the Veoneer spin-off, Autoliv’s former Electronics segment. Historical financial results of Veoneer are reflected as discontinued operations, with the exception of cash flows, which are presented on a consolidated basis of both continuing and discontinued operations and net income attributable to a controlling interest (Consolidated Autoliv). The focus of management’s discussion and analysis below is on continuing operations. Certain key ratios, as indicated, only reflect continuing operations. The restated historical financial statements reflecting the Veoneer spin-off are unaudited, but have been derived from Autoliv’s historical audited annual reports.

KEY RATIOS

(Dollars in millions, except per share data)

	Three months ended				Six months ended
	or as of June 30				or as of June 30
	2018		2017		2018		2017
Total parent shareholders’ equity per share	$	22.90	$	44.42	$	22.90	$	44.42
Operating working capital ¹⁾		776		619		776		619
Capital employed ²⁾		3,792		4,684		3,792		4,684
Net debt ¹⁾		1,785		572		1,785		572
Net debt to capitalization, % ³⁾		47		12		47		12

Gross margin, % ⁴⁾		19.9		20.9		20.2		21.0
Operating margin, % ⁵⁾		10.4		11.1		10.6		11.0

Return on total equity, % ⁶⁾		24.3	n/a			20.1	n/a
Return on capital employed, % ⁷⁾		21.2	n/a			21.5	n/a

No. of employees at period-end ⁸⁾		57,352		55,380		57,352		55,380
Headcount at period-end ⁹⁾		66,193		63,123		66,193		63,123
Days receivables outstanding ¹⁰⁾		79		75		78		74
Days inventory outstanding ¹¹⁾		33		33		32		33

¹⁾	See tabular presentation reconciling this non-U.S. GAAP measure to U.S. GAAP below under the heading “Liquidity and Sources of Capital”.

²⁾	Total equity and net debt.

³⁾	Net debt in relation to capital employed.

⁴ ⁾	Gross profit relative to sales.

⁵ ⁾	Operating income relative to sales.

⁶⁾	Net income from continuing operations relative to average total equity.

⁷⁾	Operating income and income from equity method investments from continuing operations, relative to average capital employed.

⁸⁾	Employees with a continuous employment agreement, recalculated to full time equivalent heads .

⁹⁾	Employees plus temporary, hourly personnel.

¹⁰⁾	Outstanding receivables relative to average daily sales from continuing operations.

¹¹⁾	Outstanding inventory relative to average daily sales from continuing operations.

THREE MONTHS ENDED JUNE 30, 2018 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2017

Market overview

Light Vehicle Production Development

Change vs. same quarter last year

	China				Japan				RoA				Americas				Europe				Total
LVP ¹⁾		8.7	%			1.1	%			5.0	%			0.0	%			4.1	%			4.1	%

¹⁾	Source: IHS July 16, 2018.

Consolidated Sales

The Company has substantial operations outside the U.S. and at the present time approximately 75% of its sales are denominated in currencies other than the U.S. dollar. This makes the Company and its performance in regions outside the U.S. sensitive to changes in U.S. dollar exchange rates when translated. The measure “Organic sales” presents the increase or decrease in the Company’s overall U.S. dollar net sales on a comparative basis, allowing separate discussion of the impacts of acquisitions/divestitures and exchange rate fluctuations and our ongoing core operations and results. The tabular reconciliations below present the change in “Organic sales” reconciled to the change in the total net sales as can be derived from our unaudited condensed consolidated financial statements.

Consolidated net sales for continuing operations increased by 11.5% compared to the same quarter of 2017 with an organic growth (non-U.S. GAAP measure) of 7.3% and positive currency translation effects of 4.2%. All regions grew organically, with North America and China as key growth areas. Organic sales growth outperformed LVP growth (according to IHS) in all regions except Europe and Rest of Asia.

Sales by Product

The tables below reconcile the reported change by product to organic change for the three months ended June 30, 2018 compared to the same period last year:

Change vs. same quarter last year					Reported			Currency			Organic
(Dollars in millions)	Q2 2018		Q2 2017		(U.S. GAAP)			effects ¹⁾			change ³⁾
Airbag products and Other ²⁾	$	1,437.9	$	1,316.6		9.2	%		3.7	%		5.5	%
Seatbelt products ²⁾		773.6		667.3		15.9	%		5.0	%		10.9	%
Total	$	2,211.5	$	1,983.9		11.5	%		4.2	%		7.3	%

¹⁾	Effects from currency translations.

²⁾	Including Corporate and other sales.

³⁾	Non-U.S. GAAP measure, see reconciliation table below.

Reconciliation of the change in “Organic sales” to U.S. GAAP financial measure

Components of net sales increase (decrease)

Three months ended June 30, 2018

(Dollars in millions)

	Airbag Products and Other ²⁾				Seatbelt Products ²⁾				Total
	$		%		$		%		$		%
Reported change	$	121.2		9.2	$	106.3		15.9	$	227.5		11.5
Currency effects ¹⁾		48.5		3.7		33.8		5.0		82.3		4.2
Organic change	$	72.7		5.5	$	72.5		10.9	$	145.2		7.3

¹⁾	Effects from currency translations.

²⁾	Including Corporate and other sales.

Airbag sales had solid organic growth (non-U.S. GAAP measure) of 5.5%, mainly from steering wheels in North America, China and Europe, and from inflatable curtains in North America. The main organic sales decline was in inflatable curtains in Europe.

Sea tbelt sales grew organically (non-U.S. GAAP measure) by close to 11% in the quarter, mainly driven by growth in China and in North America. Seatbelt sales in all regions except South Korea grew organically. Inflator replacement sales affected Continuing Op erations organic sales growth (non-U.S. GAAP measure) negatively by around 0.3pp.

Sales by Region

The tables below reconcile the reported change by geographic region to organic change for the three months ended June 30, 2018 compared to the same period last year:

					Reported change			Currency			Organic
(Dollars in millions)	Q2 2018		Q2 2017		(U.S. GAAP)			effects ¹⁾			change ²⁾
China	$	385.1	$	306.8		25.5	%		7.5	%		18.0	%
Japan	$	195.5	$	185.2		5.6	%		2.1	%		3.5	%
Rest of Asia	$	211.6	$	201.5		5.0	%		3.6	%		1.4	%
Americas	$	682.3	$	612.5		11.4	%		(1.4	)%		12.8	%
Europe	$	737.0	$	677.9		8.7	%		8.4	%		0.3	%
Total	$	2,211.5	$	1,983.9		11.5	%		4.2	%		7.3	%

¹⁾	Effects from currency translations.

²⁾	Non-U.S. GAAP measure, see reconciliation table below.

Reconciliation of the change in “Organic sales” to U.S. GAAP financial measure

Components of net sales increase (decrease)

Three months ended June 30, 2018

(Dollars in millions)

	China				Japan				Rest of Asia				Americas						Europe				Total
	$		%		$		%		$		%		$			%			$		%		$		%
Reported change	$	78.2		25.5	$	10.3		5.6	$	10.1		5.0	$	69.8			11.4		$	59.1		8.7	$	227.5		11.5
Currency effects ¹⁾		23.1		7.5		3.8		2.1		7.3		3.6		(8.9	)		(1.4	)		57.0		8.4		82.3		4.2
Organic change	$	55.1		18.0	$	6.5		3.5	$	2.8		1.4	$	78.7			12.8		$	2.1		0.3	$	145.2		7.3

¹⁾	Effects from currency translations.

Sales grew organically (non-U.S. GAAP measure) by 7.3% in the second quarter 2018 compared to the second quarter 2017, which is more than 3 percentage points above the LVP growth (according to IHS). The largest contributors to growth were the Americas and China partly offset by effects from South Korea. The decrease in inflator replacement sales had a negative impact of around 0.3pp.

The organic sales increase (non-U.S. GAAP measure) of 18% from Autoliv’s companies in China was driven by both the domestic and the global OEMs. Sales to domestic OEMs are primarily driven by a continued tailwind from new models with Geely, including Lynk & Co, along with Great Wall. The growth in sales to the global OEMs was mainly driven by sales to VW, Nissan and Honda.

The organic sales growth (non-U.S. GAAP measure) of 3.5% from Autoliv’s companies in Japan was driven by the Japanese OEMs, in particular Mitsubishi, Nissan and Subaru.

The organic sales growth from Autoliv’s companies in the Rest of Asia was driven by strong sales development in India, mainly to Suzuki, Honda and Tata, and in Thailand, almost offset by organic sales decline in South Korea, mainly with Hyundai/Kia.

Sales from Autoliv’s companies in Americas increased organically (non-U.S. GAAP measure) by 12.8%, driven by strong performance in both North and South America. North America grew by close to 12% organically (non-U.S. GAAP measure), driven primarily by new launches at FCA, Honda, Nissan and Tesla. This was partly offset by lower sales to GM, Ford and Daimler and lower inflator replacement sales. Overall growth was mainly driven by seatbelts, steering wheels and inflatable curtains. South America grew organically (non-U.S. GAAP measure) by 34%, driven by a continued strong performance with FCA and VW.

Autoliv’s companies in Europe grew organically (non-U.S. GAAP measure) by 0.3%. The organic growth was driven largely by VW, Daimler and Renault. This growth was offset by sales declines with JLR, Nissan, FCA and PSA.

Earnings

	Three months ended
(Dollars in millions, except per share data)	June 30, 2018			June 30, 2017			Change
Net Sales	$	2,211.5		$	1,983.9			11.5	%
Gross profit		439.7			415.3			5.9	%
% of sales		19.9	%		20.9	%		(1.0	)pp
S, G&A		(99.8	)		(105.0	)		(5.0	)%
% of sales		(4.5	)%		(5.3	)%		0.8	pp
R, D&E net		(117.5	)		(95.7	)		22.8	%
% of sales		(5.3	)%		(4.8	)%		(0.5	)pp
Operating income		229.1			219.8			4.2	%
% of sales		10.4	%		11.1	%		(0.7	)pp
Income before taxes		210.1			201.2			4.4	%
Tax rate		8.1	%		32.4	%		(24.3	)pp
Net income attributable to controlling interest from continuing operations		192.7			135.7			42.0	%
Net income attributable to controlling interest		37.2			129.8			(71.3	)%
Earnings per share continuing operations, diluted ¹⁾		2.20			1.54			42.9	%
Earnings per share attributable to controlling interest, diluted ¹⁾		0.43			1.47			(70.7	)%

¹⁾	Assuming dilution and net of treasury shares. Participating share awards with right to receive dividend equivalents are under the two class method excluded from the EPS calculation.

The gross profit for the second quarter of 2018 was $24 million higher than in the same quarter of 2017. The gross margin decreased by 1.0pp to 19.9%, from 20.9% in the same quarter of 2017, mainly due to adverse impact of currency changes, raw material costs and launch related costs, partly offset by operating leverage from increased sales.

Selling, General and Administrative (S,G&A) expenses decreased slightly compared to the same quarter in the prior year, while Research, Development & Engineering (R,D&E) expenses net, increased by $22 million compared to the same quarter in the prior year mainly as a result of lower engineering income and the significant increase in product launches in the second quarter of 2018.

Operating income increased by $9 million to $229 million, corresponding to a reported operating margin of 10.4% of sales, compared to 11.1% of sales in the same quarter of 2017. The decrease was mainly due to the lower gross margin and higher R,D&E, net costs. Income before taxes increased by $9 million compared to the same quarter of the previous year.

Income attributable to controlling interest from Continuing Operations increased by $57 million, partly due to the effective tax rate decline to 8.1% from 32.4% in the prior year. Discrete tax items, net for Continuing Operations had a favorable impact of 19.2pp in the quarter, mainly due to the reversal of valuation allowances that were previously recorded against deferred tax assets and are no longer required as a consequence of the spin-off.

Net income attributable to controlling interest (Consolidated Autoliv) decreased by $93 million mainly due to the net loss from discontinued operations (see Note 3. Discontinued Operations to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for additional information.).

Earnings per share (EPS) from Continuing Operations assuming dilution increased by 43% to $2.20 compared to $1.54 for the same period one year ago. The main positive items affecting EPS were 56 cents from discrete tax items, net and 10 cents from higher operating income.

The weighted average number of shares outstanding assuming dilution was 87.4 million compared to 88.1 million in the second quarter of 2017.

SIX MONTHS ENDED JUNE 30, 2018 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2017

Market overview

Light Vehicle Production Development

Change vs. same period last year

	China				Japan				RoA				Americas				Europe				Total
LVP ¹⁾		2.9	%			0.6	%			3.4	%			(0.5	)%			2.2	%			1.8	%

¹⁾	Source: IHS July 16, 2018.

Consolidated Sales

Consolidated net sales increased by 10.6% compared to the same period of 2017 with an organic growth (non-U.S. GAAP measure) of 4.4% and positive currency translation effects of around 6.2%. All regions except Europe grew organically. Key organic growth areas were China, North America and India.

Sales by product

The tables below reconcile the reported change by product to organic change for the six months ended June 30, 2018 compared to the same period last year:

Change vs. same period last year
	Six months ended
(Dollars in millions)	June 30, 2018		June 30, 2017		Reported (U.S. GAAP)			Currency effects ¹⁾			Organic change ³⁾
Airbag products and Other ²⁾	$	2,877.5	$	2,671.1		7.7	%		5.6	%		2.1	%
Seatbelt products ²⁾		1,574.9		1,354.4		16.3	%		7.5	%		8.8	%
Total	$	4,452.4	$	4,025.5		10.6	%		6.2	%		4.4	%

¹⁾	Effects from currency translations.

²⁾	Including Corporate and other sales.

³⁾	Non-U.S. GAAP measure, see reconciliation tables below.

Reconciliation of the change in “Organic sales” to U.S. GAAP financial measure

Components of net sales increase (decrease)

Six months ended June 30, 2018

(Dollars in millions)

	Airbag Products ²⁾				Seatbelt Products ²⁾				Total
	$		%		$		%		$		%
Reported change	$	206.3		7.7	$	220.5		16.3	$	426.8		10.6
Currency effects ¹⁾		150.7		5.6		100.6		7.5		251.3		6.2
Organic change	$	55.6		2.1	$	119.9		8.8	$	175.5		4.4

¹⁾	Effects from currency translations.

²⁾	Including Corporate and other sales.

Airbag sales grew organically (non-U.S. GAAP measure) by 2.1%, mainly driven by steering wheels in China, North America and Europe, and from inflatable curtains in North America, partly offset by organic sales decline of inflatable curtains in Europe.

Seatbelt sales grew organically (non-U.S. GAAP measure) by 8.8%, mainly driven by growth in North America and China. Seatbelt sales grew organically in all regions except South Korea.

Sales by Region

The tables below reconcile the reported change by geographic region to organic change for the six months ended June 30, 2018 compared to the same period last year:

	Six months ended				Reported change			Currency			Organic
(Dollars in millions)	June 30, 2017		June 30, 2017		(U.S. GAAP)			effects ¹⁾			change ²⁾
China		751.5		629.9		19.3	%		8.0	%		11.3	%
Japan		410.2		385.2		6.5	%		3.7	%		2.8	%
Rest of Asia		422.7		387.4		9.1	%		5.3	%		3.8	%
Americas		1,349.5		1,260.7		7.0	%		0.2	%		6.8	%
Europe		1,518.5		1,362.3		11.5	%		12.0	%		(0.5	)%
Total	$	4,452.4	$	4,025.5		10.6	%		6.2	%		4.4	%

¹⁾	Effects from currency translations.

²⁾	Non-U.S. GAAP measure, see reconciliation table below.

Reconciliation of the change in “Organic sales” to U.S. GAAP financial measure

Components of net sales increase (decrease)

Six months ended June 30, 2018

(Dollars in millions)

	China				Japan				Rest of Asia				Americas				Europe						Total
	$		%		$		%		$		%		$		%		$			%			$		%
Reported change	$	121.7		19.3	$	24.9		6.5	$	35.3		9.1	$	88.8		7.0	$	156.1			11.5		$	426.8		10.6
Currency effects ¹⁾		50.3		8.0		14.0		3.7		20.7		5.3		3.4		0.2		162.9			12.0			251.3		6.2
Organic change	$	71.4		11.3	$	10.9		2.8	$	14.6		3.8	$	85.4		6.8	$	(6.8	)		(0.5	)	$	175.5		4.4

¹⁾	Effects from currency translations.

In the first six months of 2018, Autoliv grew organically (non-U.S. GAAP measure) by 4.4% against the prior corresponding period, about 2.6pp more than LVP growth according to IHS. The largest contributors to the organic growth were the Americas and China partly offset by South Korea and Europe.

The organic sales increase (non-U.S. GAAP measure) from Autoliv’s companies in China of around 11% was driven by both global and domestic OEMs. Sales growth to global OEMs was mainly with VW, Nissan, Honda and GM. Sales growth to domestic OEMs was mainly with Geely, including Lynk & Co, and Great Wall.

Organic sales growth (non-U.S. GAAP measure) of close to 3% from Autoliv’s companies in Japan was mainly derived from sales of frontal airbags to Nissan and Honda and seatbelts to Subaru and Mitsubishi and inflator replacement sales. Offsetting effects were mainly decreasing sales of side airbags to Nissan and Mitsubishi and seatbelts and frontal airbags to Toyota.

Organic sales growth from Autoliv’s companies in the Rest of Asia was driven by strong sales development in India which grew organically (non-U.S. GAAP measure) by around 33%, mainly due to sales of seatbelts, frontal airbags and steering wheels to Suzuki. Tata, Hyundai/Kia and Honda also contributed to organic growth. Sales in South Korea decreased, driven mainly by unfavorable model mix with Hyundai/Kia.

The organic growth (non-U.S. GAAP measure) from Autoliv’s companies in Americas was close to 7%. North America grew organically (non-U.S. GAAP measure) by more than 5% mainly due to new model launches with FCA, Honda, Tesla and Toyota, partly offset by lower sales to GM and Hyundai/Kia. Overall growth was mainly driven by seatbelts and steering wheels. Sales in South America grew organically (non-U.S. GAAP measure) by about 36%, mainly due to increased sales of steering wheels, frontal airbags and seatbelts to FCA.

The 0.5% organic sales decline (non-U.S. GAAP measure) in the period from Autoliv’s companies in Europe was mainly driven by JLR, PSA, FCA and Nissan. Offsetting effects were mainly seen with VW, Daimler and Volvo.

Earnings

	Six months ended
(Dollars in millions, except per share data)	June 30, 2018			June 30, 2017			Change
Net Sales	$	4,452.4		$	4,025.5			10.6	%
Gross profit		900.0			844.0			6.6	%
% of sales		20.2	%		21.0	%		(0.8	)pp
S, G&A		(200.9	)		(200.2	)		0.3	%
% of sales		(4.5	)%		(5.0	)%		0.5	pp
R, D&E net		(226.0	)		(201.9	)		11.9	%
% of sales		(5.1	)%		(5.0	)%		(0.1	)pp
Operating income		472.5			442.1			6.9	%
% of sales		10.6	%		11.0	%		(0.4	)pp
Income before taxes		439.0			400.9			9.5	%
Tax rate		19.8	%		29.1	%		(9.3	)pp
Net income attributable to controlling interest from continuing operations		351.4			283.6			23.9	%
Net income attributable to controlling interest		163.9			273.7			(40.1	)%
Earnings per share continuing operations, diluted ¹⁾		4.02			3.21			25.2	%
Earnings per share attributable to controlling interest, diluted ¹⁾		1.88			3.10			(39.4	)%

¹⁾	Assuming dilution and net of treasury shares. Participating share awards with right to receive dividend equivalents are under the two class method excluded from the EPS calculation.

The gross profit for the first six months of 2018 increased by $56 million, mainly a result of higher sales. The gross margin decreased by 0.8pp compared to the same period in 2017, mainly due to adverse impact of currency changes, raw material costs and launch related costs partly offset by operating leverage from increased sales.

Selling, General and Administrative (S,G&A) expenses were nearly unchanged. Research, Development & Engineering (R,D&E) expenses, net, as percent of sales was 5.1% compared to 5.0% in the same period the prior year.

Operating income increased by $30 million to $473 million, or 10.6% of sales, for the first half of the year, a decrease of 0.4pp compared to the same period in the prior year as the gross margin decrease was not fully offset by lower S,G&A expenses as percent of sales.

Income before taxes increased by $38 million compared to the same period the previous year. Income attributable to controlling interest from Continuing Operations increased by $68 million, partly due to the decline in the effective tax rate to 19.8% from 29.1% in the prior year. Discrete tax items, net from Continuing Operations had a favorable impact of 7.4pp in the first half year, mainly due to the reversal of valuation allowances that were previously recorded against deferred tax assets and are no longer required after the Veoneer spin-off.

Net income attributable to controlling interest (Consolidated Autoliv) decreased by $110 million mainly due to the net loss from discontinued operations (see Note 3. Discontinued Operations to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for additional information.).

Earnings per share (EPS) from Continuing Operations assuming dilution increased by 25% to $4.02 compared to $3.21 for the same period one year ago. The main items affecting EPS were 52 cents from higher gross profit and 47 cents from lower tax rate, net, partly offset by 22 cents from higher R, D&E, net expenses.

The weighted average number of shares outstanding assuming dilution was 87.4 million compared to 88.3 million in the first six months 2017.

LIQUIDITY AND SOURCES OF CAPITAL

Cash flow from operations in the second quarter of 2018 amounted to $47 million compared to $179 million in the same quarter of 2017. The decrease was primarily driven by costs for separating our business segments and increased operating working capital, mainly driven by increased sales and unfavorable geographic and timing effects. Cash flow from operations in the first six months of 2018 amounted to $63 million compared to $329 million in the first six months 2017. The decrease was primarily related to costs for separation of our business segments and the increase in operating working capital due to increased sales and unfavorable geographic and timing effects.

Capital expenditures, net, of $165 million were $51 million more than depreciation and amortization expense during the quarter and $26 million higher than capital expenditures, net during the second quarter of 2017. Capital expenditures, net, of $304 million were $81 million more than depreciation and amortization expense during the first six months 2018 and $44 million more than capital expenditures, net during the first six months 2017. Acquisition of interests primarily consists of discontinued operations investments in the Zenuity joint venture.

Net cash used in financing activities amounted to $91 million compared to $295 million for the six months ended June 30, 2018 and 2017, respectively. During the first six months of 2018 the Company obtained new funds of approximately $1 billion in the form of short term debt and the 500 million Eurobond, which primarily were used to fund the capitalization of Veoneer prior to the distribution. On June 18, 2018, Autoliv announced that it priced a 5-year bond offering of EUR 500 million in the Eurobond market (the “Notes”). The Notes were issued on June 26, 2018, at an issue price of 99.527%, and carry a coupon of 0.75% (paid annually in arrears), which implies a per annum yield of 0.847%.

In addition, the Company paid dividends amounting to $107 million for the six months ending June 30, 2018, compared to $104 million during the same period last year. Last year, the Company repurchased shares in the second quarter amounting to $157 million.

The Company uses the non-U.S. GAAP measure “Operating working capital,” as defined in the table below, in its communications with investors and for management’s review of the development of the working capital cash generation from operations. The reconciling items used to derive this measure are, by contrast, managed as part of the Company’s overall cash and debt management, but they are not part of the responsibilities of day-to-day operations’ management. The historical periods in the table have been restated to only reflect continuing operations.

Reconciliation of “Operating working capital” to U.S. GAAP financial measure

(Dollars in millions)

	June 30, 2018			March 31, 2018			December 31, 2017
Total current assets continuing operations	$	3,373.8		$	3,631.9		$	3,557.5
Total current liabilities continuing operations		(2,753.3	)		(2,183.0	)		(2,086.4	)
Working capital		620.5			1,448.9			1,471.1
Cash and cash equivalents		(507.5	)		(793.9	)		(959.5	)
Short-term debt		605.6			60.2			19.7
Derivative liability and (asset), current		2.9			(1.5	)		(2.1	)
Dividends payable		54.0			53.9			52.2
Operating working capital	$	775.5		$	767.6		$	581.4

Working capital was 7.2% of sales and operating working capital (non-U.S. GAAP measure) was 9.1% of sales. The Company targets that operating working capital in relation to the last 12-month sales should not exceed 10%.

Accounts receivable in relation to sales was 79 days outstanding, compared to 76 days outstanding on December 31, 2017 and 75 days outstanding on June 30, 2017. Days inventory outstanding was 33 days, compared to 35 days on December 31, 2017 and 33 days on June 30, 2017.

As part of efficiently managing the Company's overall cost of funds, the Company routinely enters into "debt-related derivatives" (DRD) as part of its debt management. Creditors and credit rating agencies use net debt adjusted for DRD in their analyses of the Company's debt. DRD are fair value adjustments to the carrying value of the underlying debt. Included in the DRD is also the unamortized fair value adjustment related to a discontinued fair value hedge which will be amortized over the remaining life of the debt. By adjusting for DRD, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values.

Reconciliation of “Net debt” to U.S. GAAP financial measure

(Dollars in millions)

	June 30, 2018			March 31, 2018			December 31, 2017
Short-term debt	$	605.6		$	60.2		$	19.7
Long-term debt		1,678.0			1,310.2			1,310.7
Total debt		2,283.6			1,370.4			1,330.4
Cash and cash equivalents		(507.5	)		(793.9	)		(959.5	)
Debt-related derivatives		8.6			(1.6	)		(2.5	)
Net debt	$	1,784.7		$	574.9		$	368.4

The Company’s net debt position (non-U.S. GAAP measure) increased by $1,210 million during the second quarter, and by $1,416 million during the first six months, to $1,785 million at June 30, 2018, mainly due to debt incurred for the capitali zation of Veoneer. Gross interest-bearing debt increased during the second quarter by $913 million, and during the first six months by $953 million, to $2,284 million as of June 30, 2018.

The non-U.S. GAAP measure net debt is also used in the non-U.S. GAAP measure “Leverage ratio”. Management uses this measure to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. For details on leverage ratio refer to the table.

Calculation of “Leverage ratio”

(Dollars in millions)

	June 30, 2018		March 31, 2018		December 31, 2017
Net debt ¹⁾	$	1,784.7	$	574.9	$	368.4
Pension liabilities		203.8		211.5		206.8
Debt per the Policy	$	1,988.5	$	786.4	$	575.2

Net income ²⁾	$	189.1	$	283.3	$	303.0
Less: Net loss from discontinued operations ²⁾		466.8		315.5		285.0
Net income continuing operations ²⁾	$	655.9	$	598.8	$	588.0
Income taxes ²⁾		174.6		222.8		204.4
Interest expense, net ^2,3)		50.8		51.4		53.7
Depreciation and amortization of intangibles ^2,4)		325.2		314.8		307.2
EBITDA per the Policy	$	1,206.5	$	1,187.8	$	1,153.3
Leverage ratio		1.6		0.7		0.5

¹⁾	Net debt is short- and long-term debt less cash and cash equivalents and debt-related derivatives.

²⁾	Latest 12-months.

³⁾	Interest expense, net is interest expense including cost for extinguishment of debt, if any, less interest income.

⁴⁾	Including impairment write-offs related to continuing operations, if any.

Autoliv’s policy is to maintain a leverage ratio (non-U.S. GAAP measure) commensurate with a strong investment grade credit rating. The Company measures its leverage ratio as net debt (non-U.S. GAAP measure) adjusted for pension liabilities in relation to EBITDA (earnings before interest, taxes, depreciation and amortization). The long-term target is to maintain a leverage ratio of around 1x within a range of 0.5x to 1.5x. As of June 30, 2018, the Company had a leverage ratio (non-U.S. GAAP measure) of 1.6x.

During the quarter, total equity decreased by $2,334 million to $2,008 million, mainly due to $2,129 million reduction associated with the Veoneer spin-off, $54 million in dividends and $196 million related to currency translation effects. The decrease was partly offset by $34 million from net income. Total controlling interest shareholders’ equity was $1,995 million corresponding to $22.90 per share. For the first six months, total equity decreased by $2,162 million to $2,008 million, mainly due to $2,129 million reduction associated with the spin-off of Veoneer, $108 million in dividends and $105 million from currency translation effects. The decrease was partly offset by $156 million from net income.

Headcount

	June 30, 2018			March 31, 2018			June 30, 2017
Headcount continuing operations		66,193			66,001			63,123
Whereof:
Direct workers in manufacturing		71	%		72	%		71	%
Best cost countries		80	%		80	%		79	%
Temporary personnel		13	%		13	%		12	%

Compared to March 31, 2018, total headcount (permanent employees and temporary personnel) increased by 192. Compared to a year ago, headcount increased by 3,070.

Outlook

Mainly based on our customer call-offs and light vehicle production outlook according to IHS, the indication for organic sales growth for Autoliv Continuing Operations for the full year is around 8%. Currency translations are expected to have a combined positive effect of around 2%, resulting in a consolidated sales increase of around 10%. The indication for adjusted operating margin for Autoliv Continuing Operations for the full year 2018 is more than 11%.

The projected tax rate, excluding discrete items, for Continuing Operations, for the full year 2018, is expected to be around 27%, and is subject to change due to any discrete or nonrecurring events that may occur.

The projected operating cash flow for Continuing Operations for the full year 2018 excluding any discrete items is expected to be on a similar level to full year 2017, which was $870 million.

The projected capital expenditure, net, for Continuing Operations, for the full year 2018 is expected to be in the range of 5-6% of sales.

The forward looking non-U.S. GAAP financial measures above are provided on a non-U.S. GAAP basis. Autoliv has not provided a U.S. GAAP reconciliation of these measures because items that impact these measures, such as costs related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and Autoliv is unable to determine the probable significance of the unavailable information.

Spin-Off Update

On June 29, 2018, Autoliv completed the spin-off of its Electronics business into Veoneer, Inc. through the pro-rata distribution of all of the outstanding shares of Veoneer common stock to Autoliv stockholders. The intent is for the spin-off to be tax free to Autoliv and to stockholders in the U.S. and Sweden. On July 2, 2018, Veoneer’s common stock began regular-way trading on the New York Stock Exchange under the symbol “VNE” and its SDRs began trading on Nasdaq Stockholm under the symbol “VNE SDB”.

Through the spin-off, the Company expects additional value for shareholders and other stakeholders will be created by the ability to better address two distinct, growing markets with leading product offerings.

After completion of the spin-off, Mikael Bratt assumed the role of Chief Executive Officer of Autoliv. Mats Backman continues in his role as Chief Financial Officer of Autoliv.

On June 18, Autoliv announced that S&P Global Ratings affirmed its A- rating on Autoliv’s long term debt.

Total cost for the separation of our business segments in 2017 and 2018, including tax effects, amount to around $105 million compared to the original estimate of up to $150 million.

In connection with the spin-off, Autoliv provided Veoneer with an initial capitalization of approximately $1 billion. Autoliv raised the majority of the needed capital through debt financing, while the remaining amount of the capital injection was funded through cash on hand. For more information, see Note 3. Discontinued Operations to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for additional information.

New Revenue Recognition Standard

The Company adopted ASU 2014-09 - Revenue from Contracts with Customers, effective January 1, 2018. The adoption of the new revenue standard did not have a material impact on the Company’s net sales, net income, or balance sheet. For further information see Note 2. New Accounting Standards and Note 4. Revenue to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

Except as noted below, as of June 30, 2018, the Company’s future contractual obligations have not changed materially from the amounts reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 22, 2018.

On June 26, 2018, Autoliv issued EUR 500 million of 5-year notes in the Eurobond market (the “Notes”). The Notes carry a coupon of 0.75%, paid annually in arrears.

OTHER RECENT EVENTS

Launches in the Second Quarter of 2018

Honda Amaze

Driver airbag with steering wheel, passenger airbag and seatbelt with pretensioner.

Geely Borui GE

Driver airbag with steering wheel, passenger airbag, side airbag, inflatable curtain and seatbelt with pretensioner.

Honda Insight

Passenger airbag, inflatable curtain, side airbag, seatbelt with pretensioner.

Lynk & Co 02

Passenger airbag, side airbag, inflatable curtain, seatbelt with pretensioner and hood lifter.

VW Jetta

Driver airbag with steering wheel, seatbelt with pretensioner.

Subaru Ascent

Passenger airbag, side airbag and seatbelt with pretensioner.

VW Lavida

Driver airbag with steering wheel, passenger airbag and seatbelt.

Ford Focus

Passenger airbag, knee airbag, side airbag and seatbelt with pretensioner.

Volvo V60

Driver airbag with steering wheel, active seatbelt with pretensioner and pyro safety switch.

Other Events

•

On May 9, 2018, Autoliv announced that it was named a GM Supplier of the Year by General Motors. GM’s Supplier of the Year award is reserved for suppliers who distinguish themselves by meeting performance metrics for quality, execution, innovation, and total enterprise cost. Award winners represent companies who provide products and services to General Motors in the areas of vehicle components, supply chain and logistics, customer care and aftersales, and indirect services.

•	On May 31, 2018 and June 4, 2018, Autoliv and Veoneer hosted Investor Days in Stockholm and New York, respectively, where management outlined corporate strategies, operational strengths, technologies and innovation roadmaps and financial plans for respective companies as stand-alone companies.

•

On June 18, 2018, Autoliv announced that it priced a 5-year bond offering of EUR 500 million in the Eurobond market (the “Notes”). The Notes were issued on June 26 and carry a coupon of 0.75%. The Notes are trading on the Global Exchange Market (GEM) of the Irish Stock Exchange (Euronext Dublin). Standard & Poor has assigned the Notes a rating of A-.

•	On July 18, 2018, Autoliv announced that it joined the new European H2020 research project OSCCAR to improve protection and safety for occupants of the future vehicle. By partnering with vehicle manufacturers, research organizations

and other automotive suppliers, Autoliv will contribute to harmonized methods and tools for future restraint systems for future highly automated vehicles that have comfo rt and convenience enhancing features such as relaxed seating positions and rotated seats.

Dividend

On May 8, 2018, the Company declared a quarterly dividend to shareholders of 62 cents per share for the third quarter of 2018, with the following payment schedule:

Ex-date (common stock)	August 21, 2018
Ex-date (SDRs)	August 21, 2018
Record Date	August 22, 2018
Payment Date	September 6, 2018

Next Report

Autoliv intends to publish the quarterly earnings report for the third quarter of 2018 on Friday, October 26, 2018.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2018, except as set forth below, there have been no material changes to the information related to quantitative and qualitative disclosures about market risk that was provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 22, 2018. On June 26, 2018, Autoliv issued notes due 2023 in a principal amount of EUR 500 million in the Eurobond market (the “Notes”). The Notes were issued at an issue price of 99.527%, and carry a coupon of 0.75% (paid annually in arrears), which implies a per annum yield of 0.847%. See Note 5. Fair Value Measurements to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for more information.

The capital structure, as noted in this report, has changed significantly during the second quarter of 2018. The Company has recalculated what the impact would be given a one percentage point interest rate increase and concluded it would have an immaterial net interest expense impact during 2018 and 2019, respectively. This is due to our floating rate debt balance being in line with our variable rate cash and cash equivalents.

ITEM 4. CO NTROLS AND PROCEDURES

(a)	Evaluation of Disclosure Controls and Procedures

An evaluation has been carried out, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

(b)	Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTH ER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Various claims, litigation and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters.

For a description of our material legal proceedings, see Note 12. Contingent Liabilities – Legal Proceedings to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

Except as described below, as of June 30, 2018, there have been no material changes to the risk factors that were previously disclosed in Item 1A in the Company’s Form 10-K for the year ended December 31, 2017 filed with the SEC on February 22, 2018.

Potential indemnification obligations to Veoneer or a refusal of Veoneer to indemnify us pursuant to the agreements executed in connection with the internal reorganization and spin-off could materially adversely affect us.

The transaction agreements we entered into with Veoneer in connection with the internal reorganization and the spin-off provide for cross-indemnities that require Autoliv and Veoneer to bear financial responsibility for each company’s business prior to the internal reorganization or spin-off, as applicable, and to indemnify the other party in connection with a breach of such party of the transaction agreements; provided, however, certain warranty, recall and product liabilities for Electronics products manufactured prior to the completion of the internal reorganization have been retained by us and we will indemnify Veoneer for any losses associated with such warranty, recall or product liabilities pursuant to the distribution agreement entered into as part of the spin-off . Any indemnities that we are required to provide to Veoneer may be significant and could negatively affect our business. In addition, there can be no assurance that the indemnities from Veoneer will be sufficient to protect us against the full amount of any potential liabilities. Even if we do succeed in recovering from Veoneer any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves. In addition, each of these risks could have a material adverse effect on our business, results of operations and financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Stock repurchase program

During the quarter ended June 30, 2018, the Company made no stock repurchases. The Company is authorized to purchase up to 47.5 million shares of common stock under its stock repurchase program, which was first approved by the board of directors of the Company on May 9, 2000. Under the existing authorization, 2,986,288 shares may be repurchased. The stock repurchase program does not have an expiration date.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. E XHIBITS

Exhibit No.		Description

2.1		Distribution Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-12933, filing date July 2, 2018).
3.1		Autoliv’s Restated Certificate of Incorporation, as amended, incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 22, 2015).

3.2		Autoliv’s Third Restated By-Laws incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-12933, filing date December 18, 2015).

4.1		Indenture, dated March 30, 2009, between Autoliv, Inc. and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to Autoliv’s Registration Statement on Form 8-A (File No. 001-12933, filing date March 30, 2009).

4.2		Second Supplemental Indenture (including Form of Global Note), dated March 15, 2012, between Autoliv, Inc. and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-12933, filing date March 15, 2012).

4.3		Form of Note Purchase and Guaranty Agreement dated April 23, 2014, among Autoliv ASP, Inc., Autoliv, Inc. and the purchasers named therein, incorporated herein by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 25, 2014).

4.4*		Amendment and Waiver 2014 Note Purchase and Guaranty Agreement, dated May 24, 2018, among Autoliv, Inc., Autoliv ASP, Inc. and the noteholders named therein.

4.5*		General Terms and Conditions for Swedish Depository Receipts in Autoliv, Inc. representing common shares in Autoliv, Inc., effective as of May 30, 2018, with Skandinaviska Enskilda Banken AB (publ) serving as a custodian.

4.6*		Agency Agreement dated June 26, 2018 among Autoliv, Inc., Autoliv ASP, Inc. and HSBC Bank PLC.

10.1		Employee Matters Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-12933, filing date July 2, 2018).

10.2		Tax Matters Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-12933, filing date July 2, 2018).

10.3		Amended and Restated Transition Services Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-12933, filing date July 2, 2018).

10.4*		Facilities Agreement, dated May 24, 2018 among Autoliv, Inc., Autoliv ASP, J.P. Morgan Securities PLC and Skandinaviska Enskilda Banken AB (publ).

10.5*+		Separation Agreement, effective as of September 1, 2018, by and between Autoliv, Inc. and Steve Fredin.

10.6*+		Interim Employment Agreement, effective as of April 1, 2018, by and between Veoneer, Inc. and Jan Carlson.

10.7*+		Supplement to Employment Agreement, effective as of April 1, 2018, by and between Autoliv, Inc. and Jan Carlson.

10.8*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Mikael Bratt.

10.9*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Jennifer Cheng.

10.10*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Daniel Garceau.

10.11*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Michael A. Hague.

10.12*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Jordi Lombarte.

10.13*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Bradley J. Murray.

10.14*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Anthony J. Nellis.

10.15*+		Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Sherry Vasa.

31.1*		Certification of the Chief Executive Officer of Autoliv, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2*		Certification of the Chief Financial Officer of Autoliv, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Exhibit No.		Description

32.1*		Certification of the Chief Executive Officer of Autoliv, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of the Chief Financial Officer of Autoliv, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Balance Sheets; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to the Condensed Consolidated Financial Statements.

*	Filed herewith.

+	Management contract or compensatory plan.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 27, 2018

AUTOLIV, INC.

(Registrant)

By:		/s/ Mats Backman
		Mats Backman
		Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)

Exhibit 4.4

Execution Version

Amendment and Waiver

2014 note purchase and guaranty agreement

AMENDMENT AND WAIVER , dated as of May 24, 2018 (this “ Amendment and Waiver ”), among AUTOLIV ASP, INC. , an Indiana corporation (the “ Company ”), AUTOLIV, INC., a Delaware corporation (the “ Parent Guarantor ” and, together with the Company, the “ Obligors ”) and the holders of the Notes issued under the Existing Note Agreement (the “ Noteholders ”).

W I T N E S S E T H:

A. The Obligors and the Noteholders are parties to that certain Note Purchase and Guaranty Agreement, dated April 23, 2014 (as in effect immediately prior to the effectiveness of this Amendment and Waiver, the “ Existing Note Agreement ”, and, as amended by this Amendment and Waiver, the “ Note Agreement ”), by and among the Obligors and the Noteholders pursuant to which the Company issued (a) those certain 2.84% Series A Guaranteed Senior Notes due April 23, 2019, (b) those certain 3.51% Series B Guaranteed Senior Notes due April 23, 2021, (c) those certain 4.09% Series C Guaranteed Senior Notes due April 23, 2024, (d) those certain 4.24% Series D Guaranteed Senior Notes due April 23, 2026 and (e) those certain 4.44% Series E Guaranteed Senior Notes due April 23, 2029 (collectively, the “ Notes ”).

The Parent Guarantor plans to spin-off its electronics business segment, creating a new, independent publicly traded company to be called Veoneer, Inc. (such spin-off transaction, as further described in paragraph C(ii) below, including the internal reorganization being completed by the Parent Guarantor to prepare for such spin-off as described in paragraph C(i) below, being referred to herein as the “ Transaction ”).

C. The Transaction will be effected in all material respects as follows:

(i) the Parent Guarantor would engage in an internal reorganization pursuant to which it would create a new Subsidiary, to be called Veoneer, Inc., a Delaware corporation (“ Veoneer ”), to which it would transfer its electronics business segment and up to approximately $1.05 billion (the “ Internal Reorganization ”);

(ii) upon completion of the Internal Reorganization, the Parent Guarantor would effect the spin-off of Veoneer by paying a dividend of the common stock of Veoneer on a pro rata basis to all holders of the Parent Guarantor’s common shares (including through Swedish Depository Receipts) as of a certain designated date (the “ Spin-Off ”); and

(iii) following the Spin-Off, (a) the Group’s existing passive safety business segment would remain with the Group and (b) neither Veoneer nor any of its subsidiaries would have any liability or obligations in respect of the Notes or the Note Agreement.

Exhibit 4.4

D.	In connection with the Transaction, the Obligors have requested certain amendments to and waivers in respect of the Existing Note Agreement and the Noteholders are willing to agree to such amendments and waivers subject to certain conditions, as provided for herein.

NOW THEREFORE, in consideration of the premises, the mutual covenants and the agreements hereinafter set forth and other good and valuable consideration, the parties hereto hereby agree as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in the Existing Note Agreement.

2. Waivers . The Noteholders hereby waive any breach of Sections 10.1, 10.3 or 10.7 of the Note Agreement arising solely from the Internal Reorganization and/or the Spin-Off.

3. Amendments .

(a) Section 7.2 .

(i) The first paragraph of Section 7.2 of the Existing Note Agreement is hereby amended and restated in its entirety to read as follows:

“Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer of the Parent Guarantor setting forth (which, in the case of Electronic Delivery of any such financial statements, shall be by separate concurrent delivery of such certificate to each holder of Notes, which concurrent delivery may be by means of electronic mail to the email address (if any) provided by such holder to the Parent Guarantor for purposes of receiving information relating to this Agreement):”

(ii) The word “and” at the end of Section 7.2(a) is hereby deleted; the period at the end of Section 7.2(b) is hereby deleted and there is substituted therefor “; and”; and a new Section 7.2(c) is hereby added to read in its entirety as follows:

“(c) Rating – a statement of the Parent Guarantor’s Rating (as defined in Section 24.9), together with relevant supporting documentation.”

(b) Section 10.3 . The introductory language of Section 10.3 of the Existing Note Agreement, up to (but not including) paragraph (a) thereof, is hereby amended and restated in its entirety to read as follows:

“Except as permitted by Section 10.2, the Parent Guarantor will not, and will not permit any Subsidiary to, directly or indirectly, engage in any Disposition of any of its assets unless, after giving effect to such proposed Disposition, the aggregate net book value of all assets of the Group that were the subject of Dispositions made during the 365-day period ending on the date of such proposed Disposition does not exceed 10% of Consolidated Total Assets (to be determined as at the end of the immediately preceding

Exhibit 4.4

financial year), provided that the following Dispositions shall not be taken into account for purposes of this Section 10.3:”

(c) Section 11(m) . The period at the end of Section 11(l) is hereby replaced by “; or” and a new Section 11(m) is hereby added to the Existing Note Agreement to read in its entirety as follows:

(m) the Company defaults in the payment of either Downgrade Fee required to be paid pursuant to Section 24.9 for more than five Business Days after the same becomes due and payable.

(d) Definition of “Disposition” . The definition of “Disposition” set forth in Schedule B to the Existing Note Agreement is hereby amended and restated in its entirety to read as follows:

“’ Disposition ’ means any sale, lease, transfer or other disposition of assets by any Person, whether for consideration or by means of a Specified Dividend, but in all cases excluding any Specified Dividend made by one member of the Group to another member of the Group.”

(e) Definition of “Specified Dividend” . A new definition of “Specified Dividend” is hereby added to Schedule B to the Existing Note Agreement in its appropriate alphabetical order, to read in its entirety as follows:

“ Specified Dividend ” means a dividend of any stock held by any Person (except such Person’s own stock) or other assets of such Person (except cash) or a transfer of any stock or other assets of such Person pursuant to a de-merger or other similar transaction or transactions the cumulative effect of which is to divest assets from such Person, in all cases regardless of whether any consideration is received therefor.

(f) Downgrade Fee . A new Section 24.9 is hereby added to the Existing Note Agreement to read in its entirety as follows:

24.9 Downgrade Fee.

(a) On any day on which a Mid-Level Investment Grade Rating shall be in effect, a fee (the “ Mid-Level Downgrade Fee ”) shall accrue on the outstanding principal amount of the Notes in an amount equal to .50% (50 basis points) per annum.

(b) On any day on which a Below Investment Grade Rating shall be in effect, or on any day when no Rating shall be in effect, a fee (the “ BIG Fee ” and, together with the Mid-Level Downgrade Fee, the “ Downgrade Fees ”) shall accrue on the outstanding principal amount of the Notes in an amount equal to 2.5% (250 basis points) per annum.

(c) The Downgrade Fees shall, to the extent accrued, be paid on the same dates (and by the same payment method) on which interest on the Notes is payable and, if not paid when due, any unpaid Downgrade Fees shall bear interest at the Default Rate until paid in full.

Exhibit 4.4

(d) For the avoidance of doubt, it is understood and agreed that (i) only the Mid-Level Downgrade Fee or the BIG Fee, but not both, may be in effect at any time, (ii) the Downgrade Fees shall not apply on any day when a Rating shall be in effect that is higher than a Mid-Level Investment Grade Rating and (iii) the Downgrade Fees, or the suspension thereof, shall apply to successive increases and decreases in the Rating in effect from time to time (or successive times when no Rating is in effect).

(e) The following terms have the following meanings:

“ Below Investment Grade Rating” means a Rating of BB+ or lower by S&P or Fitch, or a Rating of Ba1 or lower by Moody’s.

“ Fitch ” means Fitch, Inc.

“ Mid-Level Investment Grade Rating ” means a Rating of BBB or BBB- by S&P or Fitch, or a Rating of Baa2 or Baa3 by Moody’s.

“ Moody’s” means Moody’s Investors Service, Inc.

“ Rating ” means an issuer credit rating of the Parent Guarantor’s senior unsecured debt obligations with an original maturity of one year or more by one or more of Fitch, Moody’s or S&P. If there are two different Ratings in effect at any time, the “Rating” shall be the lower of the two; if there are three Ratings in effect at any time, the “Rating” shall be the two highest ratings, if they are the same, or the lower of the two highest Ratings if the two highest Ratings differ. A Rating from any of Fitch, Moody’s and S&P shall be deemed to be in effect as of the date of the written confirmation of such Rating from such Person; provided that, for the avoidance of doubt, a Rating from S&P is currently in effect and shall, so long as it remains in effect, be deemed a Rating for purposes of this definition, without any requirement to provide the supporting documentation therefor pursuant to Section 7.2(c) (it being understood that the statement regarding such Rating, as required by such Section, shall continue to be required).

“ S&P ” means S&P Global Ratings, a division of S&P Global Inc.

4. Representations and Warranties To induce the Noteholders to agree to the amendments and waivers contemplated by this Amendment and Waiver, each of the Obligors represents and warrants, on the date of this Amendment and Waiver and on the Effective Date, as follows (it being agreed, however, that nothing in this Section 4 shall affect any of the representations and warranties previously made by such Obligor in or pursuant to the Note Agreement, and that all of such other representations and warranties, as well as the representations and warranties in this Section 4, shall survive the effectiveness of the amendments contemplated hereby):

(a) Organization; Power and Authority . Each Obligor is a corporation duly organized, validly existing and, where such concept is legally relevant, in good standing under the laws of the jurisdiction in which it is organized. Each Obligor has the corporate power and authority to execute and deliver this Amendment and Waiver and to perform the provisions hereof and of the Note Agreement.

Exhibit 4.4

(b) Authorization, Etc . This Amendment and Waiver has been duly authorized by all necessary corporate or similar action on the part of each Obligor, and this Amendment and Waiver and the Note Agreement constitute legal, valid and binding obligations of each Obligor enforceable against such Obligor in accordance with their respective terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(c) Compliance with Laws, Other Instruments, Etc . The execution and delivery of this Amendment and Waiver, and the performance by the Obligors of this Amendment and Waiver and the Note Agreement, will not (i) contravene, result in any breach of, or constitute a default, or result in the creation of any Lien in respect of any property of either Obligor under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, shareholders agreement or any other agreement or instrument to which either Obligor is bound or by which either Obligor or any of its properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to either Obligor or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to either Obligor.

(d) Governmental Authorizations, Etc . No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution or delivery of this Amendment and Waiver, or the performance of this Amendment and Waiver or the Note Agreement, by either Obligor.

(e) No Default or Event of Default . No event has occurred and is continuing and no condition exists which, immediately before giving effect to this Amendment and Waiver, constitutes or would constitute a Default or an Event of Default. No event has occurred and is continuing and no condition exists which, immediately after giving effect to this Amendment and Waiver, constitutes or would constitute a Default or an Event of Default (as each such term is defined in the Note Agreement).

(f) Fees . No fee or other consideration (other than any applicable advisors’ fees and reimbursements for out-of-pocket costs) has been paid or will be paid by either Obligor or any of their respective Subsidiaries or Affiliates to (i) any agent, lender or creditor under any Principal Bank Facility, or (ii) except for fees equal to the fees referred to in Section 5(b) hereof and Section 24.9 of the Note Agreement, any holder of notes outstanding under the Note Purchase and Guaranty Agreement, dated November 8, 2007 (the “ Other NPA ”), or any other note purchase agreement, in the case of each facility or agreement referred to in the foregoing clauses (i) and (ii) in connection with any waivers and amendments in respect thereof equivalent to the waivers and amendments effected pursuant to Sections 2 and 3 of this Amendment and Waiver.

(g) Subsidiary Guarantors . No Subsidiary is or is required to be a Subsidiary Guarantor.

Exhibit 4.4

5. Conditions Precedent. The waivers and amendments provided for in Sections 2 and 3 of this Amendment and Waiver shall become effective as of the first date on which the conditions precedent set forth below shall have been satisfied in full (the “ Effective Date ”), so long as the Effective Date shall occur on or before May 31, 2018:

(a) each Noteholder shall have received counterparts of this Amendment and Waiver duly executed by the Obligors and the Required Holders;

(b) each Noteholder shall have received, by wire transfer of immediately available funds to the account set forth in Schedule A of the Note Agreement for payments in respect of the Notes (or such other written payment instructions as any Noteholder has provided to the Company), an amendment fee equal to .10% (10 bps) of the aggregate principal amount of Notes held by it;

(c) each Noteholder shall have received evidence that the Obligors and the holders of notes issued under the Other NPA shall have entered into an agreement to provide for waivers and amendments in respect of the Other NPA substantively consistent in all material respects with this Amendment and Waiver, which agreement shall be in full force and effect on the Effective Date, and each Noteholder shall have received a copy thereof; and

(d) the Obligors shall have paid the reasonable attorneys’ fees and expenses of Morgan, Lewis & Bockius LLP incurred as counsel to the Noteholders in connection with the negotiation and documentation of this Amendment and Waiver (including a reasonable estimate of post-closing fees and expenses), all to the extent reflected in a statement of such counsel rendered to the Obligors at least one Business Day prior to the date hereof.

6. Expenses . Whether or not the waivers and amendments in respect of the Existing Note Agreement provided for in Sections 2 and 3 become effective, the Obligors will promptly (and in any event within 30 days of receiving any statement or invoice therefor) pay all reasonable fees and expenses of the Noteholders’ special counsel, Morgan, Lewis & Bockius LLP, incurred in connection with the preparation, negotiation and delivery of this Amendment and Waiver and any other documents related thereto. Nothing herein shall limit the Obligors’ obligations pursuant to Section 16 of the Note Agreement.

7. Governing Law. This Amendment and Waiver shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice‑of‑law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

8. No Other Amendments. Except as expressly amended, modified and supplemented hereby, the terms, provisions and conditions of the Note Agreement (including, without limitation, the guarantee set forth in Section 23 of the Note Agreement), the Notes and the agreements and instruments relating thereto are and shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects.

Exhibit 4.4

9. Headings. The headings of sections of this Amendment and Waiver are inserted for convenience only and shall not be deemed to constitute a part of this Amendment and Waiver.

10. Counterparts; Facsimiles. This Amendment and Waiver may be executed in any number of counterparts by the parties hereto, each of which counterparts when so executed shall be an original, but all counterparts taken together shall constitute one and the same instrument. Delivery of an executed signature page by facsimile or e-mail transmission shall be effective as delivery of a manually signed counterpart of this Amendment and Waiver.

[Remainder of page intentionally left blank. Signature pages follow.]

IN WITNESS WHEREOF, the parties have caused this Amendment and Waiver to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.

AUTOLIV ASP, INC.

By		/s/ Anthony Nellis
Name:		Anthony Nellis
Title:		VP Legal & Director

AUTOLIV, INC.

By		/s/ Mats Backman
Name:		Mats Backman
Title:		CFO

[Signature page to Amendment and Waiver to 2014 Note Purchase and Guaranty Agreement – Autoliv]

DB1/ 97484716.8

Exhibit 4.5

The below General Terms and Conditions are, in all essential respects, a translation of the Swedish version of the “General Terms and Conditions for Swedish Depository Receipts representing common shares in Autoliv, Inc., kept in safe custody with Skandinaviska Enskilda Banken AB (publ) (Sw: Allmänna viIlkor för svenska depåbevis avseende stamaktier i Autoliv. Inc., deponerade hos Skandinaviska Enskilda Banken AB (publ))”. In the event of any difference between this translation and the Swedish original version, the Swedish original version shall govern.

GENERAL TERMS AND CONDITIONS

FOR

SWEDISH DEPOSITORY RECEIPTS IN AUTOLIV, INC.

representing common shares in Autoliv, Inc.

kept in safe custody with Skandinaviska Enskilda Banken AB (publ)

Effective as from May 30, 2018

Autoliv, Inc. (the Company) has requested Skandinaviska Enskilda Banken AB (publ) (SEB) and SEB has agreed (i) to hold in safe custody common shares in the Company (the Shares) on behalf of holders of Shares and (ii) to issue Swedish Depository Receipts representing the Shares (the SDRs) to shareholders in accordance with these General Terms and Conditions (these General Terms and Conditions), in order to enable listing and trading of the Shares on the Nasdaq Stockholm AB in Sweden.

1. Safe custody, registration etc

1.1 The Shares, represented by share certificates or by a book-entry registration, are deposited on behalf of holders of SDRs in safe custody with a bank conducting business in the U.S. designated by SEB (the Sub-Custodian).

1.2 For the safe custody these General Terms and Conditions will apply. Further to these General Terms and Conditions, certain rules and regulations may apply as to the share holding in the Company. Such rules and regulations will upon request be provided by SEB to holders of SDRs, either directly or through their nominee (the Holders).

1.3 The rights of a Holder against SEB as depository according to these General Terms and Conditions relating to the Shares kept in safe custody are registered in the form of SDRs (Sw. svenska depåbevis ) in the book-entry system administered by Euroclear Sweden AB (Euroclear) in accordance with the Swedish Central Securities Depositories and Financial Instruments Accounts Act (Sw. lagen (1998:1479) om värdepapperscentraler och kontoföring av finansiella instrument ) on the accounts (VPC Accounts) designated by the Holders (the SDR Register). No certificates representing the SDRs will be issued.

2. Transfer restrictions

2.1 SEB and the Sub-Custodian may refuse to accept Shares for deposit under these General Terms and Conditions whenever notified that the Company has restricted transfer of such Shares to comply with any ownership or transfer restrictions under Swedish, U.S. or any other applicable law.

3. Deposit, withdrawal and delivery of Shares

3.1 Upon payment of all taxes and governmental charges payable in connection with a deposit of Shares, Shares may be deposited under these General Terms and Conditions by delivery to SEB or the Sub-Custodian together with appropriate instructions to SEB as to the name, address and VPC Account number which the SDRs are to be registered as well as any other information and documentation required under Swedish, U.S. or any other applicable law.

Exhibit 4.5

3.2 Upon payment of all t a xes and governmental charges payable in connection with a withdrawal of Shares, Shares may be withdrawn from the safe custody only if such withdrawal is not prohibited under Swedish, U.S. or any other applicable law or by a decision of a governmental authority. Shares will be delivered to a custody account designated by the Holder or as agreed between the Holder and SEB provided the corresponding SDRs have been surrendered to and cancelled by SEB in the SDR Register.

3.3 SEB is entitled to compensation from a Holder for all fees and costs in connection with deposit, withdrawal and delivery of Shares pursuant to this Section 3, in accordance with the price list applied by SEB from time to time.

3.4 Registrations in the SDR Register resulting from deposits or withdrawals of Shares may be temporarily suspended or withheld, during any period when the transfer books of Euroclear or the Company are closed, or if any such action is deemed in good faith to be necessary or advisable by the Company or SEB at any time.

4. Transfer and pledge of Shares, etc .

4.1 The Shares can only, as long as they are in safe custody, be transferred or pledged by a transfer or pledge of the SDRs through registration in the SDR Register by a competent account operating institute (kontoförande institut) or, in the case of SDRs registered in the name of a nominee, through notification to the nominee. In order to be accepted by the Company such transfer or pledge may not be in violation of rules or regulations regarding restrictions on transferability that may arise pursuant to the General Corporation Law of the state of Delaware, USA, the Company's certificate of incorporation or by-laws or U.S. federal law.

4.2 As regards transfers or pledges of SDRs the person considered to be the rightful Holder/pledgee as a result of a transfer or pledge is subject to these General Terms and Conditions and the rules and regulations applicable to financial instruments registered with Euroclear according to Chapter 5 in the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551) and the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479).

4.3 The registrations in the SDR Register to reflect the transfer of SDRs in particular instances may be refused, or the registration of transfer generally may be suspended, during any period when the transfer books of Euroclear or the Company are closed or if any such action is deemed in good faith to be necessary or advisable by the Company or SEB at any time.

4.4 A notice according to the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479) to a competent account operating institute or, if the SDRs are nominee registered, to the nominee, must always be made in connection with changes of ownership as well as changes of registered information of a Holder, i.e. name, address, etc. A failure to give a notice of transferred ownership may result in the acquirer losing the right against the Company, SEB and Euroclear to receive dividends or any other rights in connection with the SDRs.

5. Record date

5.1 SEB shall in consultation with the Company fix a date for the determination of the Holders entitled to dividends in cash, shares, rights, or any other property or the proceeds thereof (if the property is sold by SEB in accordance with these General Terms and Conditions), receiving information etc. to participate in and vote at a shareholders' meeting or otherwise exercise any rights whatsoever that may be exercised by the shareholders of the Company (the Record Date). It is the intention of the Company and SEB that the Record Date for such dividends or other rights shall, when practically possible, be the same date as the record date for the Shares.

6. Payments of cash dividend, withholding taxes, etc .

6.1 Payment of dividends to the Holders shall be made in Swedish kronor (SEK).

6.2 SEB shall in consultation with the Company fix the date for payment of each dividend to Holders (the Payment Date). It is the intention of SEB and the Company that the Payment Date shall, when practically possible, be the same date as the payment date for the Shares.

Exhibit 4.5

6.3 Prior to payment of any dividend according to these G e neral Terms and Conditions, SEB shall convert the funds received in a foreign currency into SEK in accordance with the exchange rat es applied by SEB from time to time. Such conversion shall take place not more than five nor l ess than three business days prior to the Payment Date by SEB entering into futures contracts with delivery on the Payment Date . The final conversion rate will be an average of the rates achieved in each such futures contract.

6.4 The person registered in the SDR Register on the Record Date as the Holder/holder of rights to dividends relating to the SDRs shall be considered to be authorized to receive dividends. Payments of dividends will be effected in SEK by Euroclear on the Payment Date. Dividend amounts for each SDR will be payable in SEK rounded down to one hundredth of one SEK. Any balance not so distributed shall be repaid to the Company.

6.5 If the person receiving dividends should not be an authorized recipient then the Company, SEB and Euroclear shall be considered to have fulfilled their respective obligations unless in the case of SEB or Euroclear either was aware that the payment of dividends was made to an unauthorized person or that, considering the specific circumstances, they have neglected what reasonably should have been regarded and the payment is not binding for the right recipient because such person was under age or had a Legal guardian according to the Code on Parents and Children (Föräldrabalken) and the right to receive dividends was in the authority of the legal guardian.

6.6 Euroclear shall pay dividends to the Holders/holders of rights to dividends relating to the SDRs in accordance with the rules and regulations applied by Euroclear from time to time. Under the present rules and regulations of Euroclear, dividends normally are paid to cash accounts linked to the VPC Accounts on which the SDRs are registered.

6.7 The dividend payments to the Holders shall be made without deduction of any costs, charges, or fees, neither from the Company, SEB, the Sub-Custodian nor Euroclear, except for the withholding tax levied in the U.S. and Sweden, on dividend payments or any other tax to be imposed by tax authorities in the U.S. or Sweden.

6.8 In case of a dividend in the form of Shares in the Company where the shareholders are not offered the option to choose a dividend in the form of cash, SEB shall cause SDRs representing such Shares to be registered in the respective VPC Account of Holders entitled to receive such Shares. The same shall apply to the distribution of a dividend in the form of shares issued by a company other than the Company and such shares are represented by Swedish depository receipts or are directly registered in the CSD register with Euroclear. In the event SEB receives a dividend in the form of shares issued by a company other than the Company, such as shares issued by a subsidiary of the Company, and registration cannot be effected in the Holders’ VPC Accounts, SEB shall be entitled on behalf of the Holders after consultation with the Company to decide how such distribution shall be transferred to those Holders entitled to receive it if the Holders are not offered the option to receive the dividend in the form of cash. This may mean that the shares distributed are sold and that the proceeds of such sale, after deduction of selling costs and any fees and taxes, are paid to the Holders.

6.9 In connect ion with distribution to Holders, the Company, SEB, the Sub-Custodian or Euroclear or any of their respective agents will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld by the Company, SEB, the Sub-Custodian or Euroclear or any of their respective agents and owing such authority or agency. In the event the Company, SEB, the Sub-Custodian or Euroclear or any of their respective agents determines that any distribution in cash, shares, rights or any other property is subject to any tax or governmental charges which it is obligated to withhold, it may use that cash, or sell all or a portion of such property as is necessary and economically and practicably feasible to pay such taxes or governmental charges, and SEB shall distribute the net proceeds of any sale or the balance of any such property or cash after deduction of such taxes or governmental charges to the Holders entitled thereto. The Holder will remain liable for any deficiency.

6.10 SEB shall use its best efforts to provide the Holders with such information as it may possess and as the Holders may reasonably request to enable such Holder or its agent to claim any benefit provided under the taxation treaty between U.S. and Sweden.

Exhibit 4.5

7. Bonus issues, split- ups and combinations of shares

7.1 SEB shall accept delivery of Shares as a result of bonus issues and effect split-ups or combinations of Shares as promptly as possible. Registrations in the Holders' respective VPC Accounts reflecting such bonus issue, split-up or combination shall be effected by Euroclear as soon as practically possible after the Record Dare without any further information to be given to the Holders by SEB.

7.2 The person registered in the SDR Register on the Record Dare as Holder/holder of rights relating to bonus issues shall be considered to be authorized to receive any Shares as a result of bonus issues or participate in any split-ups or combinations of SDRs.

7.3 Should the person receiving bonus shares or participating in split-ups or combinations of SDRs not be authorized to receive SDRs or to participate in such measures, the same principles shall apply as mentioned in Section 6.5 above.

7.4 Any taxes levied will be handled in accordance with Sections 6.7 -6.9 above.

8. New Issues, Issues of debentures, other rights, etc .

8.1 SEB will provide the Holders with information in regard to new issues, issues debentures or other rights, in which the Holders have a right to subscribe for new shares and debentures, as well as other corporate action directed to the shareholders by the Company in accordance with Section 18.1 below.

8.2 When it is not practically and economically feasible to distribute any such rights etc. as decided in Section 8.1 above, SEB shall have the right to sell such rights etc. on behalf of the Holders and to distribute the proceeds of such sale to the Holders after deduction of any taxes levied in accordance with Sections 6.7 - 6.9 above.

9. Optional dividends and other optional corporate action

9.1 If, in the o pinion of SEB, it is not practically possible for the Holders to have an option to choose between dividends in the form of cash or in any other form, SEB shall on behalf of the Holders be entitled to decide that such dividends shall be paid in cash.

9.2 If the Company decides, other than in the event of distribution of profit, to distribute to the Holders shares or other rights issued by a company other than the Company, the provisions of Section 6.8 above shall be applied.

10. Fractional shares

10.1 If the Holders for each SDR are entitled to receive fractional shares as a result of "stock dividends", bonus issues or any other corporate action by the Company, such fractional shares will be sold by SEB and the proceeds of such sale will be distributed to the Holders.

10.2 SEB will not accept deposit of fractional shares or an uneven number of fractional rights.

11. Attending and voting at a general meeting of shareholders

11.1 SEB shall, as soon as possible after receipt of information of any general meeting of shareholders of the Company, cause the Holders of record in the SDR Register on the Record Date, set in accordance with Section 5.1 above, to be furnished with information regarding such general meeting of shareholders. The information shall comprise: (a) the time and location of the general meeting of shareholders and the matters intended to be considered by the meeting, (b) reference to instructions available through the Company ’s website as to the actions that must be taken by each Holder to be able to exercise its voting rights at the general meeting, and (c) reference to materials for the general meeting available through the Company ’s website. The information as set out in (a) through (c) above will be prepared in Swedish as well as in English (with the former version being distributed to Holders with a registered address in Sweden and the latter version being distributed t o Holders with a registered address outside Sweden) . Other information and general meeting materials will be prepared in English. The Company shall, upon request from a Holder, send to such Holder the materials for the general meeting of shareholders provided through the Company’s website.

Exhibit 4.5

11.2 According to the current certificate of incorporation and by-laws of the Company notice of meetings of shareholders shall be given by the Company not later than 10 nor more than 60 days before any meeting. The Record Date shall be not less than 10 days nor more than 60 days before the date of any meeting.

12. Company reports and other information

12.1 SEB shall cause reports and other information, received by SEB from the Company for distribution to the Holders, to be furnished, in accordance with Section 18.1 below, to all Holders or others being entitled to such information according to the SDR Register. As a general rule, the information shall be prepared in English unless the Company deems, in each individual case, a translation of a document into Swedish to be appropriate with regard to the contents or the purpose of the document. The English version shall prevail.

12.2 The Company shall cause the Company´s annual report prepared in English to be available through the Company's website. The Company shall, upon request from a Holder, send the Company's annual report to such Holder.

12.3 Information from the Company is available through the Company’s website, www.autoliv.com .

13. Listing

13.1 The SDRs are listed on Nasdaq Stockholm AB. Should the SDRs be delisted from Nasdaq Stockholm AB, the Company shall, inform SEB as well as the Holders as soon as practically possible after such a decision. Notice to Holders shall be given in accordance with Section 18.1 below.

14. Custody of shares

14.1 SEB is entitled to keep a Holder`s respective Shares in custody together with other Holders' Shares that are covered by these General Terms and Conditions and, if applicable, to have the Shares represented by a joint share certificate or by joint registration in a book-entry system. The Shares are deposited with the Sub-Custodian. Such deposit will be made in the name of SEB on behalf of the Holders. SEB may give the Sub-Custodian a consent to deposit the Shares with a central securities depository such as Depositary Trust Company (DTC).

15. Fees and costs

15.1. All fees and costs in connection with the administration of the safe custody and the services rendered by Euroclear shall be paid by the Company, with those exceptions mentioned in Section 3.3 above and Section 22.3 below.

16. Change of legal requirements

16.1 If the Company decides that it is feasible to list the Shares on Nasdaq AQ Stockholm AB instead of listing the SDRs and if it is also possible to register the Shares directly with Euroclear, SEB may and is entitled to register with Euroclear in accordance with the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479) each Holder for the number of Shares that correspond to its holding of SDRs and simultaneously herewith cancel the corresponding SDRs. SEB shall inform the Holders of such registration and cancellation well in advance of the effective date and provide information of the effect of such direct registration of the Shares.

16.2 Should the applicable rules and regulations in Sweden relating to the safe custody of foreign shares etc. be changed, so that the Shares can be withdrawn from the safe custody and be held directly by the Holders or be registered on a VPC account designated by the Holder, then SEB may give the Holders a notice relating to such a change in accordance with Section 18.1 below.

Exhibit 4.5

17. Change of custodian bank

17.1 If the Company determines to appoint another Swedish bank as custodian, SEB shall assign all rights and obligations on behalf of SEB under these General Terms and Conditions to and deliver the Shares to that bank. The Company shall as soon as practically possible after a change of the custodian bank has been made inform and have the change approved by Euroclear and cause notice of such change to be mailed to the Holders in accordance with Section 18.1 below. A decision to change custodian bank in accordance with the foregoing may not be effected until six months after such date when the Holders have been informed thereof in accordance with Section 18.1 below.

18. Delivery of notices

18.1 SEB shall arrange for notices or documentation to be distributed to Holders in accordance with these General Terms and Conditions to be furnished to the Holders and other holders of rights registered in the SDR Register as entitled to receive notification pursuant to the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479). Such notices or documents shall be sent by mail to the address listed in the SDR Register. SEB and the Company may, in lieu of mailing notices, publish the corresponding information in at least one (1) national Swedish daily newspaper and through the Company’s website.

19. Amendments to these general terms and conditions

19.1 SEB shall after consultations with the Company be entitled to amend these General Terms and Conditions insofar as such amendments are required by Swedish. U.S. or any applicable legislation, court decisions or decisions by public authorities or changes in the rules and regulations of Euroclear, or if, in the opinion of SEB, such action is otherwise appropriate or necessary for practical reasons and the Holders' rights are in no material respect adversely affected.

20. Disclosure of information

20.1 SEB shall and is authorized to disclose any information concerning the Holders and their holdings of SDRs to the Company and to the Sub-Custodian.

20.2 SEB and the Company shall have the right to disclose information to registrars or governmental authorities, provided such obligation to provide information is required by Swedish or foreign law or governmental regulations. A Holder shall be obligated, upon request, to provide SEB with such information.

20.3 SEB and the Company shall also have the right, in connection with reduction or refund of taxes together with other amounts owed by the tax authorities where such rights exist, to disclose information regarding a Holder and a Holder's holdings of SDRs and the Shares represented thereby to the extent necessary.

21. Limitation of liability

21.1 With respect to the actions incumbent on SEB, the Sub-Custodian, the Company and Euroclear (in the case of Euroclear always subject to the provisions of the Swedish Central Securities Depositories and Financial Instruments Accounts Act (1998:1479), SEB, the Sub-Custodian, the Company and Euroclear shall not be deemed liable for loss due to Swedish or foreign legal decrees, Swedish or foreign action by public authorities, acts of war; strikes, blockades, boycotts, lockouts or other similar causes. The reservations with respect to strikes, blockades, boycotts and lockouts apply even if SEB, the Sub-Custodian, the Company or Euroclear itself undertakes, or is the object of, such actions.

21.2 Neither SEB, the Sub-Custodian, the Company nor Euroclear shall be obligated to provide compensation for loss arising in other situations if SEB, the Sub-Custodian, the Company or Euroclear has exercised normal prudence. Neither shall any of them be liable for indirect damages.

21.3 If SEB, the Sub-Custodian, the Company or Euroclear shall be hindered from making payment or taking any other action by circumstances such as those described in Section 21.1 above, such action may be deferred until the hindrance has ceased to exist.

Exhibit 4.5

21.4 Neither SEB , the Sub-Custodian, the Company nor Euroclear i s responsible for losses or damages inc urred by the Holders by reason o f that an y dividend, right, delivery of not ice or other that the sharehol ders of the Company are entitled to, of technical, legal or other reasons beyond Euroclear’ s control cannot be distributed or transferred to t he Holders registered in the SD R Register.

22. Termination

22.1 If (i) a decision is taken to delist the SDRs from Nasdaq Stockholm AB, (ii) a decision is taken by the Company pursuant to the certificate of incorporation or the by-laws to no longer maintain the SDR program under these General Terms and Conditions or (iii) Euroclear has decided to terminate the Service Agreement concerning registration of Swedish Depository Receipts, SEB is entitled to terminate deposits made under these General Terms and Conditions by giving notice regarding such termination to the Holders in accordance with Section 18.1 above (the Termination Notice).

22.2 For a period of twelve months from the date of the Termination Notice, these General Terms and Conditions will continue to be valid in all respects; provided, however, that the SDRs, in accordance with an undertaking by the Company, will be listed on Nasdaq Stockholm AB for a period of six months from the date of the Termination Notice, if they have not been previously delisted on the initiative of Nasdaq Stockholm AB.

22.3 For a period of two years after the expiration of twelve months from the date of the Termination Notice, SEB shall continue to hold the Shares in safe custody but shall discontinue registration of transfers (by closing the SDR Register), suspend distribution of dividends to the Holders, refuse to accept deposits of Shares or any other action required under these General Terms and Conditions. SEB shall be entitled to compensation from a Holder for all fees and costs incurred by SEB in connection with the SDRs from such date forward.

22.4 Three years after the Termination Notice has been given, SEB will be entitled to sell the Shares and deduct any fees and costs incurred in connection with any such sale of the Shares. The proceeds of any such sale together with any dividends not paid to the Holders, after deduction of fees and costs in accordance with the foregoing, will be held by SEB without liability for interest thereon for the Holders 'account.

23. Governing law and Disputes

23.1 These General Terms and Conditions and any legal matters relating to the SDRs issued by SEB in accordance therewith shall be governed by Swedish law.

23.2 Any legal proceedings relating to the SDRs shall be instituted in the District Court of Stockholm ( Stockholms tingsrätt ), Sweden, or in such other jurisdiction which competence SEB has accepted in writing.

____________________________

Exhibit 4.6

EXECUTION VERSION

AGENCY AGREEMENT

DATEd 26 June 2018

AUTOLIV, INC.

EUR 500,000,000

0.750 per cent. Guaranteed Notes due 2023

Allen & Overy LLP

0013117-0002372 ICM:29837691.10

contents


Clause	Page


1.	Definitions and Interpretation	2
2.	Appointment of Paying Agents	6
3.	Authentication, Effectuation and Delivery of Notes	6
4.	Payment to the Fiscal Agent	7
5.	Notification of Non Receipt of Payment	8
6.	Duties of the Paying Agents	8
7.	Reimbursement of the Paying Agents	9
8.	Notice of any Withholding or Deduction	9
9.	Duties of the Fiscal Agent in connection with Optional Redemption and Redemption for Taxation Reasons	9
10.	Publication and Receipt of Notices	10
11.	Cancellation of Notes and Coupons	10
12.	Issue of Replacement Notes and Coupons	11
13.	Records and Certificates	11
14.	Copies of Documents Available for Inspection	12
15.	Commissions and Expenses	12
16.	Indemnity	13
17.	Repayment by Fiscal Agent	14
18.	Conditions of Appointment	14
19.	Communication with Paying Agents	15
20.	Termination of Appointment	16
21.	Meetings of Noteholders	17
22.	Notices	17
23.	Communications	18
24.	Amendments	19
25.	Contracts (Rights of Third Parties) Act 1999	19
26.	Taxes and Stamp Duties	19
27.	General	19
28.	Governing Law and Submission to Jurisdiction	19

Schedule

1.	Forms of Global Notes		21
	Part 1	Form of the Temporary Global Note	21
	Part 2	Form of the Permanent Global Note	27
2.	Form of Definitive Note		32
	Part 1	Form of Definitive Note and Coupon	32
	Part 2	Conditions of the Notes	37
3.	Form of Deed of Covenant		53
4.	Form of Guarantee		56
5.	Form of Put Notice		61
6.	Provisions for Meetings of Noteholders		63
7.	Additional Duties of the Fiscal Agent		70

Signatories				71

0013117-0002372 ICM:29837691.10

THIS AGREEMENT is made on 26 June 2018

BETWEEN :

(1)	AUTOLIV, INC. (the Issuer );

(2)	AUTOLIV ASP, INC. (the Guarantor ); and

(3)	HSBC BANK PLC in its capacity as fiscal and principal paying agent (in such capacity the Fiscal Agent , which expression shall include any successor fiscal agent appointed under clause 20).

WHEREAS :

(A)	The Issuer has agreed to issue EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023 (the Notes ) which expression shall include, unless the context otherwise requires, any further Notes issued pursuant to Condition 14 ( Further Issues ) and forming a single series with the Notes.

(B)	The Notes will be issued in bearer form in the denominations of EUR 100,000 and integral multiples of EUR 1,000 in excess thereof up to and including EUR 199,000 each with interest coupons ( Coupons ) attached. The Notes are intended to be held in a manner which would allow Eurosystem eligibility.

(C)

The Notes will initially be represented by a temporary Global Note (the Temporary Global Note ) in or substantially in the form set out in Part 1 of Schedule 1 which will be exchanged in accordance with its terms for a permanent Global Note (the Permanent Global Note and, together with the Temporary Global Note, the Global Notes ) in or substantially in the form set out in Part 2 of Schedule 1.

(D)	The definitive Notes and Coupons will be in or substantially in the respective forms set out in Part 1 of Schedule 2. The Conditions of the Notes (the Conditions ) will be in or substantially in the form set out in Part 2 of Schedule 2.

(E)	The Notes will be issued with the benefit of a deed of covenant dated 26 June 2018 (as amended or supplemented from time to time) (the Deed of Covenant ) entered into by the Issuer substantially in the form set out in Schedule 3.

(F)	Payments in respect of the Notes will be unconditionally and irrevocably guaranteed by the Guarantor as provided in a guarantee (the Guarantee ) entered into by the Guarantor substantially in the form set out in Schedule 4.

IT IS AGREED as follows:

1.	Definitions and Interpretation

1.1	As used in this Agreement:

Agents means the Fiscal Agent and the other Paying Agents;

Auditors means the auditors for the time being of the Issuer or the Guarantor (as the case may be) or, in the event of their being unable or unwilling promptly to carry out any action requested of them as provided in this Agreement or the Conditions, such other leading firm of accountants as may be nominated or approved by the Issuer or the Guarantor (as the case may be);

Authorised Person means any person who is designated in writing by the Issuer from time to time to give Instructions to the Agents under the terms of this Agreement;

0013117-0002372 ICM:29837691.10

Authorised Signatory means any person who (i) is a Director or the Secretary of the Issuer or the Guarantor (as the case may be) or (ii) has been notified by the Issuer or the Guarantor (as the case may be) in writing to the Fiscal Agent as being duly authorised to sign documents and to do other acts and things on behalf of the Issuer or the Guarantor (as the case may be) for the purposes of this Agreement;

Basic Terms Modification means any proposal:

(a)

to change the date, or the method of determining the date, for payment of principal, interest or any other amount in respect of the Notes, to reduce or cancel the amount of principal, interest or any other amount payable on any date in respect of the Notes or to change the method of calculating the amount of principal, interest or any other amount payable in respect of the Notes on any date;

(b)

modifying any provision of the Guarantee;

(c)

to change the currency in which any amount due in respect of the Notes is payable;

(d)

to change the quorum required at any meeting of Noteholders or the majority required to pass an Extraordinary Resolution or any other resolution of Noteholders or the number or percentage of votes required to be cast, or the number or percentage of Notes required to be held, in connection with the taking of any decision or action by or on behalf of the Noteholders or any of them;

(e)

to change this definition, the definition of "Extraordinary Resolution", the definition of "outstanding" or the definition of "Written Resolution" in the Conditions or in this Agreement;

(f)

to change or waive the provisions of the Notes set out in Condition 4 ( Negative Pledge) ;

(g)

to change the law governing the Notes, the courts to the jurisdiction of which the Issuer has been submitted in the Notes, the Issuer's obligation to maintain an agent for service of process in England, in respect of actions or proceedings brought by any Noteholder, set out in Condition 15 ( Governing Law and Submission to Jurisdiction) ;

(h)

to approve any exchange or substitution of the Notes for, or the conversion of the Notes into, any other obligations or securities of the Issuer or any other person; or

(i)

in connection with any proposed exchange, substitution or conversion of the type referred to in subparagraph (h) to amend any of the provisions of the Notes describing circumstances in which Notes may be redeemed or declared due and payable prior to their scheduled maturity date;

Clearstream, Luxembourg means Clearstream Banking S.A.;

Euroclear means Euroclear Bank S.A./N.V.;

FATCA Withholding means any withholding or deduction required pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code (or any regulations thereunder or official interpretations thereof) or an intergovernmental agreement between the United States and another jurisdiction facilitating the implementation thereof (or any law implementing such an intergovernmental agreement);

0013117-0002372 ICM:29837691.10

Instructions means any written notices, directions or instructions received by the Agents from an Authorised Person or from a person reasonably believed by the Agents to be an Authorised Person;

outstanding means in relation to the Notes all the Notes issued other than:

(a)

those Notes which have been redeemed pursuant to Condition 7 ( Redemption and Purchase );

(b)

those Notes in respect of which the date for redemption in accordance with the Conditions has occurred and the redemption moneys (including premium (if any) and all interest payable thereon) have been duly paid to the Fiscal Agent in the manner provided in clause 4 (and, where appropriate, notice to that effect has been given to the Noteholders under Condition 12 ( Notices )) and remain available for payment of the relevant Notes and/or Coupons;

(c)

those Notes which have been purchased and cancelled pursuant to Condition 7 ( Redemption and Purchase );

(d)

those Notes in respect of which claims have become prescribed under Condition 9 ( Prescription );

(e)

those mutilated or defaced Notes which have been surrendered and cancelled and in respect of which replacements have been issued pursuant to Condition 11 ( Replacement of Notes and Coupons );

(f)

(for the purpose only of ascertaining the principal amount of the Notes outstanding and without prejudice to the status for any other purpose of the relevant Notes) those Notes which are alleged to have been lost, stolen or destroyed and in respect of which replacements have been issued pursuant to Condition 11 ( Replacement of Notes and Coupons ); and

(g)

the Temporary Global Note to the extent that it has been duly exchanged for the Permanent Global Note and the Permanent Global Note to the extent that it has been exchanged for the relative Notes in definitive form in each case pursuant to their respective provisions,

provided that for each of the following purposes, namely:

(i)

the right to attend and vote at any meeting of the Noteholders or the right to sign or authorise the signature of any Written Resolution or passing any Extraordinary Resolution by way of electronic consents given through the relevant clearing systems; and

(ii)

Condition 13 ( Meetings of Noteholders and Modification ) and paragraphs 4, 7 and 9 of Schedule 6,

those Notes (if any) which are for the time being held by any person (including but not limited to, the Issuer, the Guarantor or any of its other Subsidiaries) for the benefit of the Issuer, the Guarantor or any of its other Subsidiaries shall (unless and until ceasing to be so held) be deemed not to remain outstanding;

Put Notice means a notice substantially in the form set out in Schedule 5;

specified office of any Agent means the office specified in clause 22 or any other specified offices as may from time to time be duly notified pursuant to clause 22; and

0013117-0002372 ICM:29837691.10

1.2	(a) In this Agreement, unless the contrary intention appears, a reference to:

(i)

an amendment includes a supplement, restatement or novation and amended is to be construed accordingly;

(ii)

a person includes (i) any individual, company, unincorporated association, government, state agency, international organisation or other entity and (ii) its successors and assigns;

(iii)

the records of Euroclear and Clearstream, Luxembourg shall be the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customer's interest in the Notes;

(iv)

a provision of a law is a reference to that provision as extended, amended or re-enacted;

(v)

a clause or schedule is a reference to a clause of, or a schedule to, this Agreement;

(vi)

a document or any provision of a document is a reference to that document or provision as amended from time to time; and

(vii)

a time of day is a reference to London time.

(b)

In this Agreement:

(i)

words denoting the singular shall include the plural and vice versa ;

(ii)

words denoting one gender only shall include the other gender; and

(iii)

words denoting persons only shall include firms and corporations and vice versa .

(c)

Words and expressions defined in the Conditions and not otherwise defined in this Agreement shall have the same meanings when used in this Agreement.

(d)

The headings in this Agreement do not affect its interpretation.

(e)

All references in this Agreement to costs or charges or expenses shall include any value added tax or similar tax charged or chargeable in respect thereof.

(f)

References in this Agreement to principal, premium and/or interest shall include any additional amounts payable pursuant to Condition 8 ( Taxation ).

(g)

As used herein, in relation to any Notes which are to have a "listing" or be "listed" on Euronext Dublin, or any other Stock Exchange in a jurisdiction where admission to listing is approved and announced by a regulatory authority other than the Stock Exchange itself, listing and listed shall be construed to mean that such Notes have been admitted to the Official List and admitted to trading on the Global Exchange Market of Euronext Dublin (the Market ) or the relevant list of such other regulatory authority and admitted to trading on such Stock Exchange's market for listed securities, respectively. The Market is not a regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2014/65/EU).

(h)

All references in this Agreement to Euroclear and/or Clearstream, Luxembourg shall, wherever the context so admits, be deemed to include references to any additional or alternative clearing system in which the relevant Notes are from time to time accepted for clearance.

0013117-0002372 ICM:29837691.10

2.	Appointment of Paying Agents

2.1	The Issuer and the Guarantor hereby appoint, on the terms and subject to the conditions of this Agreement, HSBC Bank plc as fiscal and principal paying agent, in each case acting at its specified office.

References herein to Paying Agents shall include the Fiscal Agent and any other paying agent appointed hereunder from time to time.

2.2

Each Agent accepts its appointment, and agrees to act, as agent of the Issuer and the Guarantor in relation to the Notes and agrees to comply with the terms of this Agreement. Each Agent further agrees to perform the duties specified for it in the Conditions. The obligations of the Agents are several and not joint.

2.3

The Fiscal Agent undertakes to the Issuer that it will, in connection with the issue of the Notes, perform the duties which are stated to be performed by it in Schedule 7. Each of the Paying Agents (other than the Fiscal Agent) agrees that if any information that is required by the Fiscal Agent to perform the duties set out in Schedule 7 becomes known to it, it will promptly provide such information to the Fiscal Agent.

2.4

The Issuer hereby authorises and instructs the Fiscal Agent to elect Euroclear as common safekeeper. The Issuer acknowledges that any such election is subject to the right of Euroclear and Clearstream, Luxembourg to jointly determine that the other shall act as common safekeeper and agrees that no liability shall attach to the Fiscal Agent in respect of any such election made by it.

3.	Authentication, Effectuation and Delivery of Notes

3.1

The Issuer authorises and instructs the Fiscal Agent to (i) authenticate each of the Global Notes and any definitive Notes delivered pursuant to clause 3.4, (ii) transmit such Global Notes electronically to the common safekeeper and to give effectuation instructions in respect of the Global Notes following its authentication thereof and (iii) instruct Euroclear and Clearstream, Luxembourg to make the appropriate entries in their records to reflect the initial outstanding aggregate principal amount of the Notes. The Issuer further authorises and instructs the Fiscal Agent to destroy each Global Note retained by it following its receipt of confirmation from the common safekeeper that the relevant Global Note has been effectuated.

3.2

The Issuer authorises and instructs the Fiscal Agent to cause interests in the Temporary Global Note to be exchanged for interests in the Permanent Global Note and interests in a Global Note to be exchanged for definitive Notes in accordance with their respective terms. Following the exchange of the last interest in a Global Note, the Fiscal Agent shall cause the Global Note to be cancelled and delivered to the Issuer or as it may direct destroyed.

3.3	The Issuer undertakes that the Permanent Global Note (duly executed on behalf of the Issuer) will be available to be exchanged for interests in the Temporary Global Note in accordance with the terms of the Temporary Global Note.

3.4

If a Global Note is to be exchanged in accordance with its terms for definitive Notes, the Issuer undertakes that it will deliver to, or to the order of, the Fiscal Agent, as soon as reasonably practicable and in any event not later than 15 days before the relevant exchange is due to take place, definitive Notes (with Coupons attached) in an aggregate principal amount of EUR 500,000,000 or such lesser amount as is the principal amount of Notes represented by the Permanent Global Note to be issued in exchange for the Global Note. Each definitive Note and Coupon so delivered shall be duly executed on behalf of the Issuer.

0013117-0002372 ICM:29837691.10

3.5

The Fiscal Agent shall cause all Notes delivered to and held by it under this Agreement to be maintained in safe custody and shall ensure that interests in the Temporary Global Note are only exchanged for interests in the Permanent Global Note in accordance with the terms of the Temporary Global Note and this Agreement and that the definitive Notes are issued only in accordance with the terms of a Global Note and this Agreement.

3.6	So long as any of the Notes is outstanding the Fiscal Agent shall, within seven days of any request by the Issuer, certify to the Issuer the number of definitive Notes held by it under this Agreement.

4.	Payment to the Fiscal Agent

4.1

The Issuer or, failing the Issuer, the Guarantor shall, by no later than 10.00 a.m. (London time) on the day on which any payment of principal, premium and/or interest in respect of any of the Notes becomes due under the Conditions, transfer to an account specified by the Fiscal Agent such amount of EUR as shall be sufficient for the purposes of such payment of principal, premium and/or interest in immediately available funds.

4.2

The Issuer or, as the case may be, the Guarantor shall ensure that, before 10.00 a.m. (London time) on the second Business Day prior to each day on which any payment is to be made to the Fiscal Agent under clause 4.1, the Fiscal Agent shall receive a copy of an irrevocable payment instruction to the bank through which the payment is to be made. For the purposes of this clause 4.2, Business Day means a day on which commercial banks and foreign exchange markets settle payments and are open for general business in the United States of America and United Kingdom.

4.3

Subject to the Fiscal Agent being satisfied in its sole discretion that payment will be duly made as provided in clause 4.1, the Fiscal Agent or the relevant Paying Agent shall pay or cause to be paid all amounts due in respect of the Notes on behalf of the Issuer in the manner provided in the Conditions. If any payment provided for in clause 4.1 is made late but otherwise in accordance with the provisions of this Agreement, the Fiscal Agent and each Paying Agent shall nevertheless make payments in respect of the Notes as aforesaid following receipt by it of such payment.

4.4

Notwithstanding any other provision of this Agreement, each Paying Agent shall be entitled to make a withholding or deduction from any payment which it makes under the Notes for or on account of any Tax, if and only to the extent so required by Applicable Law, in which event such Paying Agent shall make such payment after such withholding or deduction has been made and shall account to the relevant Authority within the time allowed for the amount so withheld or deducted or, at its option, shall reasonably promptly after making such payment return to the Issuer the amount so deducted or withheld, in which case, the Issuer shall so account to the relevant Authority for such amount. For the avoidance of doubt, FATCA Withholding is a deduction or withholding which is deemed to be required by Applicable Law for the purposes of this c lause 4. In this clause 4.4 and clauses 4.5 and 18.11, Applicable Law means any law or regulation, Authority means any competent regulatory, prosecuting, Tax or governmental authority in any jurisdiction and Tax means any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of any Authority having power to tax.

4.5

In the event that the Issuer determines in its sole discretion that any deduction or withholding for or on account of any Tax will be required by Applicable Law in connection with any payment due to any Paying Agent on the Notes, then the Issuer will be entitled to redirect or reorganise any such payment in any way that it sees fit in order that the payment may be made without such deduction or withholding provided that any such redirected or reorganised payment is made through a recognised institution of international standing and such payment is otherwise made in accordance with this Agreement. The Issuer will promptly notify the Fiscal Agent of any such redirection or reorganisation. For the avoidance of doubt, FATCA Withholding is a deduction or withholding which is deemed to be required by Applicable Law for the purposes of this clause 4.5 . If for any reason the Fiscal Agent considers in its sole discretion that the amounts to be received by the Fiscal Agent pursuant to clause 4.1 will be, or the amounts actually received by it pursuant thereto are,

0013117-0002372 ICM:29837691.10

insufficient to satisfy all claims in respect of all payments then falling due in respect of the Notes, the Fiscal Agent shall then forthwith notify the Issuer and the Guarantor of such insufficiency and, until such time as the Fiscal Agent has received the full amount of all such payments, neither the Fiscal Agent nor any Paying Agent shall be obliged to pay any such claims.

4.6	For the avoidance of doubt, the Paying Agents shall not have any obligation to make any payment of principal, premium or interest in respect of the Notes to the Noteholders until the Fiscal Agent has been put in funds by the Issuer.

5.	Notification of Non Receipt of Payment

The Fiscal Agent shall notify each of the other Paying Agents, and the Issuer and the Guarantor forthwith:

(a)

if it has not by the relevant date specified in clause 4.1 received unconditionally the full amount in Euro required for the payment; and

(b)

if it receives unconditionally the full amount of any sum payable in respect of the Notes or Coupons after such date.

The Fiscal Agent shall, at the request and expense of the Issuer or the Guarantor, forthwith upon receipt of any amount as described in subparagraph (b), cause notice of that receipt to be published under Condition 12 ( Notices ).

6.	Duties of the Paying Agents

6.1

Subject to the payments to the Fiscal Agent provided for by clause 4 being duly made, the Paying Agents shall act as paying agents of the Issuer and the Guarantor in respect of the Notes and pay or cause to be paid on behalf of the Issuer and/or the Guarantor, on and after each date on which any payment becomes due and payable, any principal, premium (if any) and/or interest then payable under the Conditions and this Agreement.

6.2

If default is made by the Issuer and the Guarantor in respect of any payment, then unless and until the full amount of the relevant payment has been made in accordance with the provisions of this Agreement (except as to the time of making the same) or other arrangements satisfactory to the Fiscal Agent have been made, neither the Fiscal Agent nor any of the other Paying Agents shall be bound to act as paying agents.

6.3

Without prejudice to clauses 6.1 and 6.2, if the Fiscal Agent pays any amounts to the holders of Notes or Coupons or to any other Paying Agent at a time when it has not received payment in full in respect of the Notes in accordance with clause 4.1 (the excess of the amounts so paid over the amounts so received being the Shortfall ), the Issuer (failing which the Guarantor) will, in addition to paying amounts due under clause 4.1, pay to the Fiscal Agent on demand interest (at a rate which represents the Fiscal Agent's cost of funding the Shortfall) on the Shortfall (or the unreimbursed portion thereof) until the receipt in full by the Fiscal Agent of the Shortfall.

6.4

Whilst any Notes are represented by a Global Note, all payments due in respect of the Notes shall be made to, or to the order of, the holder of the Global Note, subject to and in accordance with the provisions of the Global Note. On the occasion of each payment, the Fiscal Agent shall instruct Euroclear and Clearstream, Luxembourg to make the appropriate entries in their records to reflect such payment.

6.5

If on presentation of a Note or Coupon the amount payable in respect of the Note or Coupon is not paid in full (otherwise than as a result of withholding or deduction for or on account of any Taxes as permitted by the Conditions) the Fiscal Agent shall instruct Euroclear and Clearstream, Luxembourg to make the appropriate entries in their records to reflect such shortfall in payment.

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7.	Reimbursement of the Paying Agents

7.1	If a Paying Agent other than the Fiscal Agent makes any payment in accordance with this Agreement:

(a)

it shall notify the Fiscal Agent of the amount so paid by it and the serial number and outstanding amount of each Note in relation to which such payment was made; and

(b)

the Fiscal Agent shall pay to such Paying Agent out of the funds received by it under clause 4 by wire transfer in euros and in same day, freely transferable, cleared funds to such account with such bank as such Paying Agent has by notice to the Fiscal Agent specified for the purpose, an amount equal to the amount so paid by such Paying Agent.

7.2	If the Fiscal Agent makes any payment in accordance with this Agreement, it shall be entitled to appropriate for its own account out of the funds received by it under clause 4 an amount equal to the amount so paid by it.

8.	Notice of any Withholding or Deduction

8.1

If the Issuer or the Guarantor is, in respect of any payment in respect of the Notes, compelled to withhold or deduct any amount for or on account of any Taxes as contemplated by Condition 8 ( Taxation ), the Issuer or, as the case may be, the Guarantor shall give notice to the Fiscal Agent as soon as it becomes aware of the requirement to make the withholding or deduction and shall give to the Fiscal Agent such information as the Fiscal Agent shall require to enable it to comply with the requirement.

8.2

Without prejudice to clause 8.1, the Issuer or the Guarantor shall notify the Fiscal Agent in the event that it determines that any payment to be made by any Paying Agent under the Notes is a payment which could be subject to FATCA Withholding if such payment were made to a recipient that is generally unable to receive payments free from FATCA Withholding, and the extent to which the relevant payment is so treated, provided, however, that the Issuer’s obligation under this clause 8 shall apply only to the extent that such payments are so treated by virtue of characteristics of the Issuer, the Notes, or both.

9.	Duties of the Fiscal Agent in connection with Optional Redemption and Redemption for Taxation Reasons

9.1

If the Issuer decides to redeem all of the Notes for the time being outstanding under Condition 7.2 ( Redemption for Taxation Reasons ), it shall give notice of the decision and of the principal amount of Notes which it has decided to redeem to the Fiscal Agent at least 15 days before the giving of the notice to Noteholders in accordance with Condition 12 ( Notices ).

9.2

If the Issuer decides to redeem all or some only of the Notes for the time being outstanding under Condition 7.3 ( Redemption at the Option of the Issuer ) or Condition 7.5 ( Redemption at the Option of the Holders ), it shall give notice of the decision and of the principal amount of Notes which it has decided to redeem to the Fiscal Agent at least 15 days before the giving of the notice to Noteholders in accordance with Condition 12 ( Notices ).

9.3

If the Issuer decides to redeem all of the Notes for the time being outstanding under Condition 7.5 ( Redemption at the Option of the Holders ), it shall give notice of the decision and of the principal amount of Notes which it has decided to redeem to the Fiscal Agent at least 15 days before the giving of the notice to Noteholders in accordance with Condition 12 ( Notices ).

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9.4

Each Paying Agent will keep a stock of Put Notices and will make them available on demand to holders of definitive Notes, the Conditions of which provide for redemption at the option of Noteholders. Upon receipt of any Note deposited in the exercise of a put option in accordance with the Conditions, the Paying Agent with which the Note is deposited shall hold the Note (together with any Coupons relating to it deposited with it) on behalf of the depositing Noteholder (but shall not, save as provided below, release it) until the due date for redemption of the relevant Note consequent upon the exercise of the option, when, subject as provided below, it shall present the Note (and any such unmatured Coupons) to itself for payment of the amount due together with any interest due on the date of redemption in accordance with the Conditions and shall pay those moneys in accordance with the directions of the Noteholder contained in the relevant Put Notice.

If, prior to the due date for its redemption, an Event of Default has occurred and is continuing or the Note becomes immediately due and repayable or if upon due presentation payment of the redemption moneys is improperly withheld or refused, the Paying Agent concerned shall post the Note (together with any such Coupons) by uninsured post to, and at the risk of, the relevant Noteholder (unless the Noteholder has otherwise requested and paid the costs of insurance to the relevant Paying Agent at the time of depositing the Notes) at the address given by the Noteholder in the relevant Put Notice. At the end of each period for the exercise of any put option, each Paying Agent shall promptly notify the Fiscal Agent of the principal amount of the Notes in respect of which the option has been exercised with it together with their serial numbers and the Fiscal Agent shall promptly notify those details to the Issuer and the Guarantor.

9.5	The Fiscal Agent shall instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records in respect of all Notes redeemed by the Issuer to reflect such redemptions.

10.	Publication and Receipt of Notices

10.1	On behalf of and at the written request and expense of the Issuer (failing which the Guarantor), the Fiscal Agent shall cause to be published all notices required to be given by the Issuer and/or the Guarantor under the Conditions.

10.2	The Fiscal Agent, on receipt of a notice or other communication received on behalf of the Issuer or the Guarantor, shall as soon as reasonably practicable forward a copy to the Issuer and the Guarantor.

11.	Cancellation of Notes and Coupons

11.1

All Notes which are redeemed, all definitive Notes which are surrendered in connection with redemption (together with all unmatured Coupons attached to or delivered with Notes), all Coupons which are paid and all Global Notes which are exchanged in full (in accordance with the provisions of clause 3.2) will be cancelled by the Paying Agent by or to which they are redeemed, surrendered, paid or exchanged. Each of the Paying Agents shall give to the Fiscal Agent details of all payments made by it and shall deliver all cancelled Notes and Coupons to the Fiscal Agent (or as the Fiscal Agent may specify). Where Notes are purchased by or on behalf of the Issuer or the Guarantor, the Issuer or, as the case may be, the Guarantor, will promptly notify the Fiscal Agent in writing of all Notes it has purchased.

11.2

The Fiscal Agent or its authorised agent shall (unless otherwise instructed by the Issuer in writing and save as provided in clause 13.1) destroy all cancelled Notes and Coupons and, upon written request, shall furnish the Issuer and the Guarantor with a certificate of destruction containing written particulars of the serial numbers of the Notes and the number by maturity date of Coupons so destroyed.

11.3	The Principal Paying Agent shall instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records in respect of all Notes which are cancelled.

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12.	Issue of Replacemen t Notes and Coupons

12.1	The Issuer shall cause a sufficient quantity of additional forms of Notes and Coupons to be available, upon request, to the Fiscal Agent at its specified office for the purpose of issuing replacement Notes or Coupons as provided below.

12.2

The Fiscal Agent shall, subject to and in accordance with Condition 11 ( Replacement of Notes and Coupons ) and the following provisions of this clause, cause to be delivered any replacement Notes or Coupons which the Issuer may determine to issue in place of Notes or Coupons which have been lost, stolen, mutilated, defaced or destroyed.

12.3

In the case of a mutilated or defaced Note, the Fiscal Agent shall ensure that (unless otherwise covered by such indemnity as the Issuer may require) any replacement Note only has attached to it Coupons corresponding to those attached to the mutilated or defaced Note which is presented for replacement.

12.4

The Fiscal Agent shall obtain verification, in the case of an allegedly lost, stolen or destroyed Note, or Coupon in respect of which the serial number is known, that the Note or Coupon has not previously been redeemed or paid. The Fiscal Agent shall not issue a replacement Note or Coupon unless and until the applicant has:

(a)

paid such expenses and costs as may be incurred in connection with the replacement;

(b)

furnished it with such evidence and indemnity as the Issuer may reasonably require; and

(c)

in the case of a mutilated or defaced Note or Coupon, surrendered it to the Fiscal Agent.

12.5

The Fiscal Agent shall cancel mutilated or defaced Notes or Coupons in respect of which replacement Notes or Coupons have been issued pursuant to this clause. The Fiscal Agent shall, unless otherwise requested by the Issuer or the Guarantor, destroy all those Notes and Coupons and shall furnish the Issuer and the Guarantor with a destruction certificate containing the information specified in clause 11.2.

12.6

The Fiscal Agent shall, on issuing any replacement Note or Coupon, forthwith inform the Issuer and the other Paying Agents of the serial number of the replacement Note or Coupon issued and (if known) of the serial number of the Note or Coupon in place of which the replacement Note or Coupon has been issued. Whenever replacement Coupons are issued under this clause, the Fiscal Agent shall also notify the other Paying Agents of the maturity dates of the lost, stolen, mutilated, defaced or destroyed Coupons and of the replacement Coupons issued.

12.7

Whenever a Note or Coupon for which a replacement Note or Coupon has been issued and the serial number of which is known is presented to a Paying Agent for payment, the relevant Paying Agent shall immediately send notice to the Issuer and (if it is not itself the Fiscal Agent) the other Paying Agents and shall not be obliged to make any payment in respect of such Note or Coupon.

13.	Records and Certificates

13.1

The Fiscal Agent shall in respect of the Coupons of each maturity, retain until the expiry of ten years from the Relevant Date (as defined in the Conditions) in respect of the Coupons either (i) all paid Coupons of that maturity or (ii) a list of the serial numbers of Coupons of that maturity still remaining unpaid and unexchanged.

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13.2

The Fiscal Agent shall (i) keep full and complete records of (such records to be made available to the Issuer and the Guarantor at all reasonable times), and (ii) upon written request give to the Issuer and the Guarantor, as soon as possible and in any event within four months after the date of redemption, purchase, payment or replacement of a Note or Coupon (as the case may be), a certificate stating (as applicable):

(a)

the aggregate principal amount of Notes which have been redeemed and the aggregate amount in respect of Coupons which have been paid;

(b)

the serial numbers of those Notes in definitive form (other than serial numbers of Coupons);

(c)

the total number by maturity date of those Coupons;

(d)

the aggregate principal amounts of Notes (if any) which have been purchased by or on behalf of the Issuer, the Guarantor or any of its/the Guarantor's other Subsidiaries and cancelled (subject to delivery of the Notes to the Fiscal Agent in accordance with clause 11.1 above) and the serial numbers of such Notes in definitive form and the total number by maturity date of the Coupons attached to or exchanged or surrendered with the purchased Notes,

(e)

the aggregate principal amounts of Notes and the aggregate amounts in respect of Coupons which have been surrendered or exchanged and replaced and the serial numbers of those Notes in definitive form and the total number by maturity date of those Coupons surrendered therewith and

(f)

the total number by maturity date of unmatured Coupons missing from Notes which have been redeemed or surrendered and replaced and the serial numbers of the Notes in definitive form to which the missing unmatured Coupons appertained.

14.	Copies of Documents Available for Inspection

14.1	The Guarantee shall be deposited with the Fiscal Agent and shall be held in safe custody by the Fiscal Agent on behalf of the Noteholders and Couponholders.

14.2

The Paying Agents shall hold copies of all documents required to be so available by the Conditions or the rules of any relevant stock exchange (or any other relevant authority) and shall make such copies available for inspection by Noteholders at its specified office during normal business hours. For this purpose, the Issuer and/or the Guarantor shall furnish each Paying Agent with sufficient copies of each of the relevant documents.

15.	Commissions and Expenses

15.1

The Issuer or, failing the Issuer, the Guarantor shall pay to the Fiscal Agent such fees and commissions in respect of the services of the Paying Agents under this Agreement as shall be agreed between the Issuer, the Guarantor and the Fiscal Agent. The Issuer and the Guarantor shall not be concerned with the apportionment of such fees and commissions among the Paying Agents.

15.2

The Issuer (and failing the Issuer, the Guarantor) shall pay to the Fiscal Agent an amount equal to any value added tax which may be payable in respect of the fees and commissions together with all reasonable expenses incurred by the Paying Agents in connection with their services under this Agreement.

15.3

The Fiscal Agent shall arrange for the payment of the fees and commissions due to the other Agents and arrange for the reimbursement of their expenses promptly after the receipt of the relevant moneys from the Issuer or the Guarantor (as the case may be). Neither the Issuer nor the Guarantor shall be responsible for any payment or reimbursement by the Fiscal Agent to the other Paying Agents.

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15.4

The fees, commissions and expenses payable to the Fiscal Agent for services rendered and the performance of its obligations under this Agreement shall not be abated by any remuneration or other amounts or profits receivable by the Agent (or to its knowledge by any of its associates) in connection with any transaction effected by the Fiscal Agent with or for the Issuer.

16.

Indemnity

16.1

The Issuer shall indemnify (and failing the Issuer so indemnifying, the Guarantor agrees to indemnify) each of the Paying Agents against any losses, liabilities, costs, claims, actions, demands or expenses (together, Losses ) (including, but not limited to, all reasonable costs, legal fees, charges and expenses (together, Expenses ) paid or incurred in defending or disputing any Losses) which it may incur or which may be made against it as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement except for any Losses or Expenses resulting from its own negligence, wilful default or fraud or that of its directors, officers or employees or the breach by it of the terms of this Agreement.

16.2

The Paying Agents shall indemnify each of the Issuer and the Guarantor against any Losses (including Expenses) paid or incurred in defending or disputing any Losses which it may incur or which may be made against it as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement to the extent that any Losses or Expenses result directly from its own negligence, wilful default or fraud or that of its directors, officers or employees or the breach by it of the terms of this Agreement.

16.3

The Fiscal Agent will only be liable to the Issuer or the Guarantor for losses, liabilities, costs, expenses and demands arising directly from the performance of its obligations under this Agreement suffered by or occasioned to the Issuer ( Liabilities ) to the extent that the Fiscal Agent has been negligent, fraudulent or in wilful default in respect of its obligations under this Agreement. The Fiscal Agent shall not otherwise be liable or responsible for any Liabilities or inconvenience which may result from anything done or omitted to be done by it in connection with this Agreement. For the avoidance of doubt the failure of the Fiscal Agent to make a claim for payment of interest and principal on the Issuer, or to inform any other paying agent or clearing system of a failure on the part of the Issuer to meet any such claim or to make a payment by the stipulated date, shall not be deemed to constitute negligence, fraud or wilful default on the part of the Fiscal Agent.

16.4	The indemnities set out in this clause 16 shall survive any termination or expiry of this Agreement.

16.5

Liabilities arising under clause 16.3 shall be limited to the amount of the Issuer’s and/or the Guarantor’s actual loss. Such actual loss shall be determined (i) as at the date of default of the Fiscal Agent or, if later, the date on which the loss arises as a result of such default and (ii) without reference to any special conditions or circumstances known to the Fiscal Agent at the time of entering into the Agreement, or at the time of accepting any relevant instructions, which increase the amount of the loss. Under no circumstances will the Paying Agents be liable to the Issuer, the Guarantor or any other party to this Agreement for any special, punitive, indirect or consequential loss or damage of any kind whatsoever (including, without limitation, loss of profit), whether or not foreseeable, even if advised of the possibility of such loss or damage.

16.6

The liability of the Fiscal Agent under clause 16.3 will not extend to any Liabilities arising through any acts, events or circumstances not reasonably within its control, or resulting from the general risks of investment in or the holding of assets in any jurisdiction, including, but not limited to, Liabilities arising from: nationalisation, expropriation or other governmental actions; any law, order or regulation of a governmental, supranational or regulatory body; regulation of the banking or securities industry including changes in market rules or practice, currency restrictions, devaluations or fluctuations; market conditions affecting the execution or settlement of transactions or the value of assets; breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; and strikes or industrial action.

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17.	Repayment by Fiscal Agent

Sums paid by or by arrangement with the Issuer or the Guarantor to the Fiscal Agent pursuant to the terms of this Agreement shall not be required to be repaid to the Issuer or as the case may be, the Guarantor unless and until any Note or Coupon becomes void under the provisions of Condition 9 ( Prescription ) but in that event the Fiscal Agent shall forthwith repay to the Issuer or, as the case may be, the Guarantor sums equivalent to the amounts paid by the Issuer or, as the case may be, the Guarantor to the Fiscal Agent and not disbursed by virtue of the Notes becoming void.

18.	Conditions of Appointment

18.1

Save as provided in clause 18.3, the Fiscal Agent shall be entitled to deal with money paid to it by the Issuer or the Guarantor for the purposes of this Agreement in the same manner as other money paid to a bank by its customers and shall not be liable to account to the Issuer or the Guarantor for any interest or other amounts in respect of such money. No money held by any Paying Agent need be segregated except as required by law.

18.2	In acting under this Agreement and in connection with the Notes and the Coupons the Paying Agents shall act solely as agents of the Issuer and the Guarantor and will not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders or the Couponholders.

18.3	No Paying Agent shall exercise any right of set-off or lien against the Issuer, the Guarantor or any holders of Notes or Coupons in respect of any moneys payable to or by it under the terms of this Agreement.

18.4

Except as otherwise required by law, each of the Paying Agents shall be entitled to treat the holder of any Note or Coupon as the absolute owner for all purposes (whether or not any payment in respect of the relevant Note or Coupon shall be overdue and notwithstanding any notice of ownership or writing on the Note or Coupon or any notice of previous loss or theft of the Note or Coupon) and shall not be required to obtain any proof thereof as to the identity of such bearer.

18.5

The Paying Agents shall be obliged to perform such duties and only such duties as are set out in this Agreement and the Notes and no implied duties or obligations (including without limitation duties or obligations of a fiduciary or equitable nature) shall be read into this Agreement or the Notes against the Paying Agents other than the duty to act honestly and in good faith.

18.6

Each of the Paying Agents may consult with any expert or legal, financial and other professional advisers and the opinion of such advisers shall be full and complete protection in respect of any action taken, omitted or suffered under this Agreement in good faith and in accordance with the opinion of such advisers.

18.7

Each of the Paying Agents shall be protected and shall incur no liability for or in respect of any action taken, omitted or suffered in reliance upon any instruction, request or order from the Issuer or the Guarantor or any document which it reasonably believes to be genuine and to have been delivered, signed or sent by the proper party or parties or upon written instructions from the Issuer or the Guarantor.

18.8

Any of the Paying Agents, their officers, directors or employees may become the owner of, or acquire any interest in, Notes or Coupons with the same rights that it or he would have if the Paying Agent concerned were not appointed under this Agreement, and may engage or be interested in any financial or other transaction with the Issuer or the Guarantor, and may act on, or as depositary, trustee or agent for, any committee or body of holders of the Notes or Coupons or other obligations of the Issuer or the Guarantor, as freely as if such Paying Agent were not appointed under this Agreement, without regard to the interests of the Issuer or the Guarantor and shall be entitled to retain and shall not in any way be liable to account for any profit made or share of brokerage or commission or remuneration or other amount or benefit received thereby or in connection therewith.

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18.9

None of the Paying Agents shall be under any obligation to take any action under this Agreement (i) which may be illegal or contrary to applicable law or regulation , or the rules, operating procedures or market practice of any relevant stock exchange or other market or clearing system or (ii) which it expects will result in any expense, loss, charge or liability accruing to it, the payment of which or adequate indemnity against which within a reasonable time is not, in its opinion, assured to it.

18.10

None of the Agents shall have any obligation or duty (i) to monitor or inquire as to the performance of the Issuer of its obligations under the Notes, this Agreement or any other relevant documents or (ii) to determine or take any steps to ascertain whether any relevant event under the Notes has occurred.

18.11

Each party to this Agreement shall, within ten business days of a written request by another party, supply to that other party such forms, documentation and other information relating to it, its operations, or the Notes as that other party reasonably requests for the purposes of that other party's compliance with Applicable Law and shall notify the relevant other party reasonably promptly in the event that it becomes aware that any of the forms, documentation or other information provided by such party is (or becomes) inaccurate in any material respect; provided, however, that no party shall be required to provide any forms, documentation or other information pursuant to this clause 18.11 to the extent that: (i) any such form, documentation or other information (or the information required to be provided on such form or documentation) is not reasonably available to such party and cannot be obtained by such party using reasonable efforts; or (ii) doing so would or might in the reasonable opinion of such party constitute a breach of any: (a) Applicable Law; (b) fiduciary duty; or (c) duty of confidentiality. For the purposes of this clause 18.11, Applicable Law shall be deemed to include (i) any rule or practice of any Authority by which any party to this Agreement is bound or with which it is accustomed to comply; (ii) any agreement between any Authorities; and (iii) any agreement between any Authority and any party to this Agreement that is customarily entered into by institutions of a similar nature. Applicable Law and Authority shall have the meanings set out in clause 4.5 above.

18.12

Nothing in this Agreement shall require the Fiscal Agent to assume an obligation of the Issuer arising under any provision of the listing, prospectus, disclosure or transparency rules (or equivalent rules of any other competent authority besides the FCA or PRA).

18.13

The Fiscal Agent is authorised by the PRA and regulated by the FCA and PRA. Nothing in this Agreement shall require the Fiscal Agent to carry on an activity of the kind specified by any provision of Part II (other than article 5 (accepting deposits)) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, or to lend money to the Issuer.

18.14

The Fiscal Agent shall not be responsible to anyone with respect to the legality of this Agreement or the validity or legality of the Notes or Coupons.

18.15

In the case of any default by the Issuer or the Guarantor, the Fiscal Agent shall have no duty or responsibility in the performance of the Issuer’s obligations under the Conditions.

19.	Communication with Paying Agents

A copy of all communications relating to the subject matter of this Agreement between the Issuer or the Guarantor and any of the Paying Agents other than the Fiscal Agent shall be sent to the Fiscal Agent.

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20.	Termination o f Appointment

20.1

The Issuer and the Guarantor may terminate the appointment of any Paying Agent at any time and/or appoint additional or other Paying Agents by giving to the Paying Agent whose appointment is concerned and, where appropriate, the Fiscal Agent at least 45 days' prior written notice to that effect, provided that, so long as any of the Notes is outstanding:

(a)

in the case of a Paying Agent, the notice shall not expire less than 45 days before any due date for the payment of interest; and

(b)

notice shall be given under Condition 12 ( Notices ) at least 30 days before the removal or appointment of a Paying Agent.

20.2	The termination of the appointment of a Paying Agent under this Agreement shall not entitle the Paying Agent to any amount by way of compensation but shall be without prejudice to any amount then accrued due.

20.3

All or any of the Paying Agents may resign their respective appointments under this Agreement at any time by giving to the Issuer, the Guarantor and, where appropriate, the Fiscal Agent at least 90 days' prior written notice to that effect provided that, in the case of a Paying Agent, so long as any of the Notes is outstanding and in definitive form, the notice shall not expire less than 45 days before any Interest Payment Date. Following receipt of a notice of resignation from a Paying Agent, the Issuer shall promptly, and in any event not less than 30 days before the resignation takes effect, give notice of such resignation to the Noteholders under Condition 12 ( Notices ). If the Fiscal Agent resigns or is removed pursuant to clauses 20.1 or 1.1 above or in accordance with this clause 20.3, the Issuer and the Guarantor shall promptly and in any event within 30 days appoint a successor (being a leading bank acting through its office in London). If the Issuer and the Guarantor fail to appoint a successor within such period, the Fiscal Agent shall be entitled, on behalf of the Issuer and the Guarantor, to appoint in its place as a successor Fiscal Agent a reputable financial institution of good standing which the Issuer and the Guarantor shall approve.

20.4

Notwithstanding the provisions of clauses 20.1, 20.2 and 20.3, so long as any of the Notes is outstanding, the termination of the appointment of a Paying Agent (whether by the Issuer and the Guarantor or by the resignation of the Paying Agent) shall not be effective unless upon the expiry of the relevant notice there is:

(a)

a Fiscal Agent;

(b)

a Paying Agent (which may be the Fiscal Agent) having its specified office in the place (if any) required by the rules and regulations of the relevant Stock Exchange or any other relevant authority; and

(c)

a Paying Agent (which may be the Fiscal Agent) in a jurisdiction within Europe.

20.5

Any successor Paying Agent shall execute and deliver to its predecessor, the Issuer, the Guarantor and, where appropriate, the Fiscal Agent an instrument accepting its appointment under this Agreement, and the successor Paying Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of the predecessor with like effect as if originally named as a Paying Agent.

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20.6

If the appointment of a Paying Agent under this Agreement is terminated (whether by the Issuer and the Guarantor or by the resignation of the relevant Paying Agent), the Paying Agent shall on the date on which the termination takes effect deliver to its successor Paying Agent (or, if none, the Fiscal Agent) all Notes and Coupons surrendered to it but not yet destroyed and all records concerning the Notes and Coupons maintained by it (except such documents and records as it is obliged by law or regulation to retain or not to release) and pay to its successor Paying Agent (or, if none, to the Fiscal Agent) the amounts (if any) held by it in respect of Notes or Coupons which have become due and payable but which have not been presented for payment, but shall have no other duties or responsibilities under this Agreement.

20.7

If the Fiscal Agent or any of the other Paying Agents shall change its specified office, it shall give to the Issuer, the Guarantor and, where appropriate, the Fiscal Agent not less than 45 days' prior written notice to that effect giving the address of the new specified office. As soon as practicable thereafter and in any event at least 30 days before the change, the Fiscal Agent shall, at the request of the Issuer, give to the Noteholders on behalf of and at the expense of the Issuer (failing which, the Guarantor) notice of the change and the address of the new specified office under Condition 12 ( Notices ).

20.8

A corporation into which any Paying Agent for the time being may be merged or converted or a corporation with which the Paying Agent may be consolidated or a corporation resulting from a merger, conversion or consolidation to which the Paying Agent shall be a party shall, to the extent permitted by applicable law, be the successor Paying Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement. Notice of any merger, conversion or consolidation shall forthwith be given to the Issuer, the Guarantor and, where appropriate, the Fiscal Agent.

21.	Meetings of Noteholders

21.1

The provisions of Schedule 6 shall apply to meetings of the Noteholders and shall have effect in the same manner as if set out in this Agreement provided that, so long as any of the Notes are represented by a Global Note, the expression Noteholders shall include the persons for the time being shown in the records of Euroclear and/or Clearstream, Luxembourg (other than Clearstream, Luxembourg, if Clearstream, Luxembourg shall be an accountholder of Euroclear, and Euroclear, if Euroclear shall be an accountholder of Clearstream, Luxembourg), as the holders of a particular principal amount of such Notes (each an Accountholder ) (in which regard a certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Notes standing to the account of any person shall be conclusive and binding save in the case of manifest error) for all purposes other than with respect to the payment of principals and interest on such Notes, the right to which shall be vested as against the Issuer solely in the bearer of each Global Note in accordance with and subject to its terms, and the expressions holder and holders shall be construed accordingly and the expression Notes shall mean units of EUR 500,000,000 principal amount of Notes.

22.

Notices

22.1	All notices or other communications under or in connection with this Agreement shall be in English and shall be delivered in person, sent by first class pre‑paid post or by facsimile in accordance with the address and facsimile details below.

22.2

Any notice shall, in the case of a letter, be effective only on actual delivery, and, in the case of a facsimile, when a transmission report showing the successful transmission of the facsimile is received by the sender. However, a notice given in accordance with the above but received on a day which is not a business day or after 5.00pm in the place of receipt will only be deemed to be given on the next business day.

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22.3	The address and facsimile number of each party for all notices under or in connection with this Agreement are:

(a) in the case of the Issuer:	Autoliv, Inc.
	World Trade Center Klarabergsviadukten 70, Sec C 107 24 Stockholm Sweden

	Facsimile No:	+46 8 587 206 33
	Email:	Par-Ola.Wirenlind@autoliv.com
	(Attention:	Par-Ola Wirenlind (Treasurer))

(b) in the case of the Guarantor:	Autoliv ASP, Inc.
	World Trade Center Klarabergsviadukten 70, Sec E 107 24 Stockholm Sweden

	Facsimile No:	+46 8 587 206 33
	Email:	Par-Ola.Wirenlind@autoliv.com
	(Attention:	Par-Ola Wirenlind (Treasurer))


(c) in the case of the Fiscal Agent:	HSBC Bank plc
	8 Canada Square London E14 5HQ
	Facsimile No:	+44 (0)345 587 0429
	Email:	ctla.payingagency@hsbc.com
	(Attention:	The Senior Manager, CTLA Client Services, Corporate Trust and Loan Agency)

or to such other address or facsimile number or marked for the attention of such other person or department as may from time to time be notified by any party to the others by not less than five days' written notice in accordance with the provisions of this clause. In this clause 22, business day in relation to any place means a day on which commercial banks are open for general business in the that place.

23.	Communications

23.1

In no event shall the Agents be liable for any Losses arising in regards to receiving or transmitting any data from the Issuer, the Guarantor, any Authorised Person or any party to the transaction via any non-secure method of transmission or communication, such as, but without limitation, by facsimile or email.

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23.2

The Issuer and the Guarantor accept that some methods of communication are not secure and the Agents shall incur no liability for receiving Instructions via any such non-secure method. The Agents are authorised to comply with and rely upon any such notice, Instructions or other communications believed to have been sent or given by an Authorised Person or an appropriate party to the transaction (or authorised representative thereof). The Issuer, the Guarantor and each authorised officer of the Issuer and the Guarantor shall use all reasonable endeavours to ensure that Instructions transmitted to the Agents pursuant to this Agreement are complete and correct. Any Instructions shall be conclusively deemed to be valid Instructions from the Issuer, the Guarantor or an authorised officer of the Issuer or the Guarantor to the Agents for the purposes of this Agreement.

24.	Amendments

The Fiscal Agent, the Issuer and the Guarantor may agree, without the consent of any Noteholder, to:

(a)

any modification of the Notes, the Coupons or of this Agreement which is of a formal, minor or technical nature or is made to correct a manifest error or to comply with mandatory provisions of the law; or

(b)

any modification (except a Basic Terms Modification) of the Notes, the Coupons or this Agreement which is not materially prejudicial to the interests of the Noteholders.

Any such modification shall be binding on the Noteholders and, unless the Fiscal Agent agrees otherwise, any modification shall be notified by the Issuer to the Noteholders as soon as practicable thereafter in accordance with Condition 12 ( Notices ).

25.	Contracts (Rights of Third Parties) Act 1999

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

26.	Taxes and Stamp Duties

The Issuer or, failing the Issuer, the Guarantor agrees to pay any and all stamp and other documentary taxes or duties which may be payable in connection with the execution, delivery, performance and enforcement of this Agreement by the Paying Agent.

27.

General

27.1	This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

27.2

If any provision in or obligation under this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation, under this Agreement, and (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under this Agreement.

28.	Governing Law and Submission to Jurisdiction

28.1	This Agreement and any non-contractual obligations arising out of or in connection with this Agreement are governed by, and construed in accordance with, English law.

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28.2

Subject to clause 28.4 below , the English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement, including any dispute as to its existence, validity, interpretation, performance, breach or termination or the consequences of its nullity and any dispute relating to any non-contractual obligations arising out of or in connection with it (a Dispute ) and each party submits to the exclusive jurisdiction of the English courts.

28.3	For the purposes of clauses 28.2 and 28.4, the Issuer and the Guarantor each waives any objection to the English courts on the grounds that they are an inconvenient or inappropriate forum to settle any Dispute.

28.4	To the extent allowed by law, the Agents may, in respect of any Dispute or Disputes, take (i) proceedings in any other court with jurisdiction; and (ii) concurrent proceedings in any number of jurisdictions.

28.5

Each of the Issuer and the Guarantor irrevocably appoints Airbags International Limited at Viking Way, Congleton, Cheshire, CW12 1TT as its agent under this Agreement for service of process in any proceedings before the English courts in relation to any Dispute and agrees that, in the event of Airbags International Limited being unable or unwilling for any reason so to act, it will immediately appoint another person as its agent for service of process in England in respect of any Dispute. The Issuer and the Guarantor each agrees that failure by a process agent to notify it of any process will not invalidate service. Nothing in this clause shall affect the right to serve process in any other manner permitted by law.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

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Schedule 1

Forms of Global Notes

Part 1

Form of the Temporary Global Note

AUTOLIV, INC.

TEMPORARY GLOBAL NOTE

EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023

unconditionally and irrevocably guaranteed by

AUTOLIV ASP, INC.

This temporary Global Note is issued in respect of the EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023 (the Notes ) of Autoliv, Inc. (the Issuer ). The Notes are issued subject to and with the benefit of an Agency Agreement (the Agency Agreement ) dated 26 June 2018, between, among others, the Issuer, Autoliv ASP, Inc. (the Guarantor ) and HSBC Bank plc as Fiscal Agent (the Fiscal Agent ) and the Conditions of the Notes (the Conditions ) set out in Part 2 of Schedule 2 to the Agency Agreement. Words and expressions defined in the Conditions shall have the same meanings when used in this temporary Global Note.

Payments in respect of the Notes are unconditionally and irrevocably guaranteed by the Guarantor as provided in a Guarantee dated 26 June 2018 entered into by the Guarantor.

1.	Promise to Pay

Subject as provided in this temporary Global Note, the Issuer, for value received, promises to pay the bearer of this temporary Global Note the sum of EUR 500,000,000 (five hundred million Euros) or such lesser sum as is equal to the principal amount of the Notes represented by this temporary Global Note on 26 June 2023 or on such earlier date as the principal or other amounts in respect of this temporary Global Note may become due under the Conditions and to pay interest on (and which is calculated by reference to) the principal sum for the time being outstanding of this temporary Global Note at the rate of 0.750 per cent. per annum from (and including) 26 June 2018 payable annually in arrear on 26 June in each year until payment of the principal sum has been made or duly provided for in full together with any premium and other amounts as may be payable, all subject to and under the Conditions.

The principal amount of Notes represented by this temporary Global Note shall be the aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. and Clearstream Banking S.A. (each a relevant Clearing System and together the relevant Clearing Systems ). The records of the relevant Clearing Systems (which expression in this temporary Global Note means the records that each relevant Clearing System holds for its customers which reflect the amount of such customer's interest in the Notes) shall be conclusive evidence of the principal amount of Notes represented by this temporary Global Note and, for these purposes, a statement issued by a relevant Clearing System (which statement shall be made available to the bearer upon request) stating the nominal amount of Notes represented by this temporary Global Note at any time shall, save in the case of manifest error, be conclusive evidence of the records of the relevant Clearing System at that time.

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2.	Exchange for Permanent Global Note and Purchases

The permanent Global Note to be issued on exchange for interests in this temporary Global Note will be substantially in the form set out in Part 2 of Schedule 1 to the Agency Agreement.

Subject as provided below, the permanent Global Note will only have an entry made to represent definitive Notes after the date which is 40 days after the closing date for the Notes (the Exchange Date ).

Interests in this temporary Global Note may be exchanged for interests recorded in the records of the relevant Clearing Systems in a duly executed and authenticated permanent Global Note without charge, in full or partial exchange for this temporary Global Note, in order that the permanent Global Note represents an aggregate principal amount of Notes equal to the principal amount of this temporary Global Note submitted for exchange. Notwithstanding the foregoing, no such exchange shall be made unless there shall have been presented to the Fiscal Agent or such other person as the Fiscal Agent may direct (the Exchange Agent ) by a relevant Clearing System a certificate to the effect that it has received from or in respect of a person entitled to a beneficial interest in a particular principal amount of the Notes (as shown by its records) a certificate of non-US beneficial ownership from such person in the form required by it.

Notwithstanding the foregoing, where this temporary Global Note has been exchanged in part for the permanent Global Note pursuant to the foregoing and definitive Notes have been issued in exchange for the total amount of Notes represented by the permanent Global Note pursuant to its terms, then interests in this temporary Global Note will no longer be exchangeable for interests in the permanent Global Note but will be exchangeable, in full or partial exchange, for duly executed and authenticated definitive Notes, without charge, in the denomination of EUR100,000 and integral multiples of EUR1,000 in excess thereof up to and including EUR199,000 each with interest coupons attached, such definitive Notes to be substantially in the form set out in Part 1 of Schedule 2 to the Agency Agreement. Notwithstanding the foregoing, definitive Notes shall not be so issued and delivered unless there shall have been presented to the Exchange Agent by Euroclear or Clearstream, Luxembourg a certificate to the effect that it has received from or in respect of a person entitled to a beneficial interest in a particular principal amount of Notes (as shown by its records) a certificate of non-US beneficial ownership from such person in the form required by it.

Any person who would, but for the provisions of this temporary Global Note and of the Agency Agreement, otherwise be entitled to receive either (a) an interest in the permanent Global Note or (b) definitive Notes shall not be entitled to require the exchange of an appropriate part of this temporary Global Note for an interest in the permanent Global Note or definitive Notes unless and until he shall have delivered or caused to be delivered to Euroclear or Clearstream, Luxembourg a certificate of non-US beneficial ownership in the form required by it.

This temporary Global Note may be exchanged by the bearer hereof on any day (other than a Saturday or Sunday) on which banks are open for general business in the United Kingdom. The aggregate principal amount of interests in the permanent Global Note recorded in the records of the relevant Clearing Systems or, as the case may be, definitive Notes issued upon an exchange of this temporary Global Note will, subject to the terms hereof, be equal to the aggregate principal amount of this temporary Global Note submitted by the bearer for exchange (to the extent that such principal amount does not exceed the aggregate principal amount of this temporary Global Note).

Upon (a) any exchange of a part of this temporary Global Note for an interest in the permanent Global Note or for a definitive Note, (b) receipt of instructions from Euroclear or Clearstream, Luxembourg that, following the purchase by or on behalf of the Issuer, the Guarantor or any of the Issuer’s other subsidiaries of a part of this temporary Global Note, part is to be cancelled or (c) any redemption of a part of this temporary Global Note, the Issuer shall procure that the portion of the principal amount of this temporary Global Note so exchanged, cancelled or redeemed shall be entered pro rata in the records of the relevant Clearing Systems. On an exchange in whole of this temporary Global Note, this temporary Global Note shall be surrendered to or to the order of the Fiscal Agent.

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Benefits

Until the entire principal amount of this temporary Global Note has been extinguished in exchange for the permanent Global Note and/or definitive Notes, the bearer of this temporary Global Note shall (subject as provided below) in all respects be entitled to the same benefits as if he were the bearer of the definitive Notes referred to above, except that the bearer of this temporary Global Note shall only be entitled to receive any payment on this temporary Global Note on presentation of certificates as provided below. Accordingly, except as ordered by a court of competent jurisdiction or as required by law or applicable regulation, the Issuer and any Paying Agent may (subject as provided below) deem and treat the holder of this temporary Global Note as the absolute owner of this temporary Global Note for all purposes. All payments of any amounts payable and paid to such holder shall, to the extent of the sums so paid, discharge the liability for the moneys payable on this temporary Global Note and on the relevant definitive Notes and/or Coupons.

Payments

Payments due in respect of Notes for the time being represented by this temporary Global Note shall be made to the bearer of this temporary Global Note only upon presentation by Euroclear or, as the case may be, Clearstream, Luxembourg to the Fiscal Agent at its specified office of a certificate to the effect that it has received from or in respect of a person entitled to a particular principal amount of the Notes (as shown on its records) a certificate of non-US beneficial ownership in the form required by it. Each payment so made will discharge the Issuer's obligations in respect thereof.

The bearer of this temporary Global Note will not be entitled to receive any payment of interest due on or after the Exchange Date unless, upon due certification, exchange of this temporary Global Note is improperly withheld or refused.

Upon any payment in respect of the Notes represented by this temporary Global Note, the Issuer shall procure that the amount so paid shall be entered pro rata in the records of the relevant Clearing Systems. In the case of any payment of principal the Issuer shall procure that the amount so paid shall be entered pro rata in the records of the relevant Clearing Systems and, upon such entry being made, the principal amount of the Notes recorded in the records of the relevant Clearing Systems and represented by this temporary Global Note shall be reduced by the amount so paid. Any failure to make such entries shall not affect the discharge referred to in the first paragraph above.

5.	Accountholders

For so long as any of the Notes is represented by this temporary Global Note or by this temporary Global Note and the permanent Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, each person (other than Clearstream, Luxembourg, if Clearstream, Luxembourg shall be an accountholder of Euroclear, and Euroclear, if Euroclear shall be an accountholder of Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear and/or Clearstream, Luxembourg as the holder of a particular principal amount of Notes (each an Accountholder ) (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Notes standing to the account of any person shall, save in the case of manifest error, be conclusive and binding for all purposes) shall be treated as the holder of that principal amount for all purposes (including but not limited to for the purposes of any quorum requirements of, or the right to demand a poll or, meetings of the Noteholders and giving notice to the Issuer pursuant to Condition 10 ( Events of Default ) and Condition 7.5 ( Redemption at the Option of the Holders ) other than with respect to the payment of principal, premium and interest on the Notes, the right to which shall be vested, as against the Issuer, solely in the bearer of this temporary Global Note in accordance with and subject to its terms. Each Accountholder must look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for its share of each payment made to the bearer of this temporary Global Note.

0013117-0002372 ICM:29837691.10

In the event that this Global Note (or any part of it) has become due and repayable in accordance with the Conditions or that the maturity date of the Notes has occurred and, in either case, payment in full of the amount due has not been made to the bearer in accordance with the provisions set out above, then from 8.00 p.m. (London time) on such day each Accountholder will become entitled to proceed directly against the Issuer on, and subject to, the terms of the Deed of Covenant executed by the Issuer on 26 June 2018 in respect of the Notes and the bearer will have no further rights under this Global Note (but without prejudice to the rights which any person may have under the Deed of Covenant).

Notices

For so long as all of the Notes are represented by this temporary Global Note or by this temporary Global Note and the permanent Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg (as the case may be) for communication to the relevant Accountholders rather than by publication as required by Condition 12 ( Notices ). Any such notice shall be deemed to have been given to the Noteholders on the day after the day on which such notice is delivered to Euroclear and/or Clearstream, Luxembourg (as the case may be) as aforesaid.

Whilst any of the Notes held by a Noteholder are represented by a Global Note, notices to be given by such Noteholder may be given by such Noteholder (where applicable) through the applicable clearing system's operational procedures approved for this purpose and otherwise in such manner as the Fiscal Agent and the applicable clearing system approve for this purpose.

7.	Prescription

Claims against the Issuer and the Guarantor in respect of principal or premium and interest on the Notes represented by this temporary Global Note will be prescribed after 10 years (in the case of principal) and five years (in the case of interest) from the Relevant Date (as defined in Condition 8 ( Taxation )).

8.	Put Option

For so long as all of the Notes are represented by this temporary Global Note or by this temporary Global Note and the permanent Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, the option of the Noteholders provided for in Condition 7.5 ( Redemption at the Option of the Holders ) may be exercised by an Accountholder giving notice to the Fiscal Agent in accordance with the standard procedure of Euroclear and/or Clearstream, Luxembourg (as the case may be) (which may include notice being given on his instruction by Euroclear or Clearstream, Luxembourg or any common safe-keeper for them to the Fiscal Agent by electronic means) and in a form acceptable to Euroclear and Clearstream, Luxembourg of the principal amount of the Notes in respect of which such option is exercised and the Issuer shall procure that the portion of the principal amount of this temporary Global Note so redeemed shall be entered in the records of the relevant Clearing System.

9.	Redemption at the Option of the Issuer

For so long as all of the Notes are represented by this temporary Global Note or by this temporary Global Note and the permanent Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, no selection of Notes to be redeemed will be required under Condition 7.4 ( Provisions relating to Partial Redemption ) in the event that the Issuer exercises its option pursuant to Condition 7.3 ( Redemption at the Option of the Issuer ) in respect of less than the aggregate principal amount of the Notes outstanding at such time. In such event, selection of the interests in this temporary Global Note subject to the exercise of this option will be made in accordance with the standard rules and procedures of Euroclear and/or Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion).

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10.	Euroclear and Clearstream, Luxembourg

Notes represented by this temporary Global Note are transferable in accordance with the rules and procedures of Euroclear and Clearstream, Luxembourg, as appropriate.

11.	Authentication and Effectuation

This temporary Global Note shall not become valid or enforceable for any purpose unless and until it has been authenticated by or on behalf of the Fiscal Agent and effectuated by the entity appointed as common safe-keeper by the relevant Clearing Systems.

The Notes are intended to be held in a manner which would allow Eurosytem eligibility and as such this Global Note is intended upon issue to be deposited with one of Euroclear or Clearstream, Luxembourg as common safekeeper. This does not necessarily mean that the Notes represented by the Global Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra day credit operations by the Eurosystem either upon issue or at any or all times during their life, such recognition depending upon the European Central Bank being satisfied that Eurosystem eligibility criteria have been met).

12.	Contracts (Rights of third Parties) Act 1999

No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this temporary Global Note, but this does not affect any right or remedy of any person which exists or is available apart from that Act.

13.	Severability

If any provision in or obligation under this temporary Global Note is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under this temporary Global Note, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under this temporary Global Note.

14.	Governing Law

This temporary Global Note and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, English law.

IN WITNESS whereof the Issuer has caused this temporary Global Note to be signed by a person duly authorised on its behalf.

AUTOLIV, INC.

By:

(Duly authorised)

Issued in London on 26 June 2018.

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CERTIFICATE OF AUTHENTICATION

This is the temporary Global Note

described in the Agency Agreement

By or on behalf of

HSBC Bank plc as Fiscal Agent

(without recourse, warranty or liability)

CERTIFICATE OF EFFECTUATION

Effectuated without recourse,

warranty or liability by

as common safe-keeper

By:

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Part 2

Form of the Perma nent Global Note

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

AUTOLIV, INC.

PERMANENT GLOBAL NOTE

EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023

unconditionally and irrevocably guaranteed by

AUTOLIV ASP, INC.

This permanent Global Note is issued in respect of the EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023 (the Notes ) of Autoliv, Inc. (the Issuer ). The Notes are initially represented by a temporary Global Note interests in which will be exchanged in accordance with the terms of the temporary Global Note for interests in this permanent Global Note and, if applicable, definitive Notes. The Notes are issued subject to and with the benefit of an Agency Agreement (the Agency Agreement ) dated 26 June 2018, between, among others, the Issuer, Autoliv ASP, Inc. (the Guarantor) and HSBC Bank plc as Fiscal Agent (the Fiscal Agent ) and the Conditions of the Notes (the Conditions ) set out in Part 2 of Schedule 2 to the Agency Agreement. Words and expressions defined in the Conditions shall have the same meanings when used in this permanent Global Note.

Payments in respect of the Notes are unconditionally and irrevocably guaranteed by the Guarantor as provided in a Guarantee dated 26 June 2018 entered into by the Guarantor.

1.	Promise to Pay

Subject as provided in this permanent Global Note, the Issuer, for value received, promises to pay the bearer of this permanent Global Note the sum of EUR 500,000,000 (five hundred million Euros) or such lesser sum as is equal to the principal amount of the Notes represented by this permanent Global Note or such other amounts as are expressed to be payable in respect of the Notes represented by this permanent Global Note on early redemption of the Notes on 26 June 2023 or on such earlier date as the principal or other amounts in respect of this permanent Global Note may become due under the Conditions and to pay interest on (and which is calculated by reference to) the principal sum for the time being outstanding of this permanent Global Note at the rate of 0.750 per cent. per annum payable annually in arrear on 26 June in each year until payment of the principal sum has been made or duly provided for in full together with any premium and other amounts as may be payable, all subject to and under the Conditions.

The principal amount of Notes represented by this permanent Global Note shall be the aggregate amount from time to time entered in the records of both Euroclear Bank S.A./N.V. and Clearstream Banking S.A. (each a relevant Clearing System and together the relevant Clearing Systems ). The records of the relevant Clearing Systems (which expression in this permanent Global Note means the records that each relevant Clearing System holds for its customers which reflect the amount of such customer's interest in the Notes) shall be conclusive evidence of the principal amount of Notes represented by this permanent Global Note and, for these purposes, a statement issued by a relevant Clearing System (which statement shall be made available to the bearer upon request) stating the nominal amount of Notes represented by this permanent Global Note at any time shall, save in the case of manifest error, be conclusive evidence of the records of the relevant Clearing System at that time.

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2.	Exchange of Interests in the Temporary Global Note for Interests in this Permanent Global Note

Upon any exchange of an interest recorded in the records of the relevant Clearing Systems in the temporary Global Note representing the Notes for an interest recorded in the records of the relevant Clearing Systems in this permanent Global Note, the Issuer shall procure that details of such exchange shall be entered pro rata in the records of the relevant Clearing Systems.

3.	Exchange for Definitive Notes and Purchases

Upon the occurrence of an Exchange Event (as further described below), this permanent Global Note may be exchanged for duly executed and authenticated definitive Notes without charge and the Fiscal Agent or such other person as the Fiscal Agent may direct (the Exchange Agent ) shall deliver, in full (but not in part) exchange for this permanent Global Note, an aggregate principal amount of duly executed and authenticated definitive Notes with Coupons attached equal to the total principal amount of this permanent Global Note.

An Exchange Event will occur if:

(a)

the Issuer has been notified that both Euroclear Bank S.A./N.V. ( Euroclear ) and Clearstream Banking S.A . ( Clearstream, Luxembourg ) have announced an intention permanently to cease business or have in fact done so and no successor clearing system is available; or

(b)

the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Notes in definitive form.

The Issuer will promptly give notice to Noteholders if an Exchange Event occurs. In the case of (a) above, the bearer of this permanent Global Note, acting on the instructions of one or more of the Accountholders (as defined below), may give notice to the Issuer and the Fiscal Agent requesting exchange and, in the case of (b) above, the Issuer may also give notice to the Fiscal Agent of its intention to exchange this permanent Global Note for definitive Notes. Any exchange shall occur no later than 45 days after the date of receipt of the first relevant notice by the Fiscal Agent.

Exchanges will be made upon presentation of this permanent Global Note at the office of the Fiscal Agent on any day on which banks are open for general business in Luxembourg. In exchange for this permanent Global Note the Issuer will deliver, or procure the delivery of, an equal aggregate principal amount of definitive Notes (having attached to them all Coupons in respect of interest which has not already been paid on this permanent Global Note), security printed in accordance with any applicable legal and stock exchange requirements and in or substantially in the form set out in the Agency Agreement. On exchange of this permanent Global Note, the Issuer will procure that it is cancelled and, if the holder so requests, returned to the holder together with any relevant definitive Notes.

The definitive Notes to be issued on exchange will be in bearer form in the denominations of EUR100,000 and integral multiples of EUR1,000 in excess thereof up to and including EUR199,000 each with interest coupons ( Coupons ) attached and will be substantially in the form set out in Part 1 of Schedule 2 to the Agency Agreement.

Upon (a) receipt of instructions from Euroclear and Clearstream, Luxembourg that, following the purchase by or on behalf of the Issuer or any of its subsidiaries of a part of this permanent Global Note, part is to be cancelled or (b) any redemption of a part of this permanent Global Note, the Issuer shall procure that the portion of the principal amount of this permanent Global Note so cancelled or redeemed shall be entered pro rata in the records of the relevant Clearing Systems. On an exchange in whole of this permanent Global Note, this permanent Global Note shall be surrendered to or to the order of the Fiscal Agent.

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Benefits

Until the entire principal amount of this permanent Global Note has been extinguished in exchange for definitive Notes or in any other manner envisaged by the Conditions, the bearer of this permanent Global Note shall (subject as provided below) in all respects be entitled to the same benefits as if he were the bearer of the definitive Notes referred to above. Accordingly, except as ordered by a court of competent jurisdiction or as required by law or applicable regulation, the Issuer and any Paying Agent may (subject as provided below) deem and treat the holder of this permanent Global Note as the absolute owner of this permanent Global Note for all purposes. All payments of any amounts payable and paid to such holder shall, to the extent of the sums so paid, discharge the liability for the moneys payable on this permanent Global Note and on the relevant definitive Notes and/or Coupons.

Payments

Payments due in respect of Notes for the time being represented by this permanent Global Note shall be made to the bearer of this permanent Global Note and each payment so made will discharge the Issuer's obligations in respect thereof.

Upon any payment in respect of the Notes represented by this permanent Global Note, the Issuer shall procure that the amount so paid shall be entered pro rata in the records of the relevant Clearing Systems. In the case of any payment of principal the Issuer shall procure that the amount so paid shall be entered pro rata in the records of the relevant Clearing Systems and, upon any such entry being made, the principal amount of the Notes recorded in the records of the relevant Clearing Systems and represented by this permanent Global Note shall be reduced by the amount so paid. Any failure to make such entries shall not affect the discharge referred to in the previous paragraph.

6.	Accountholders

For so long as any of the Notes is represented by this permanent Global Note or by this permanent Global Note and the temporary Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, each person (other than Clearstream, Luxembourg, if Clearstream, Luxembourg shall be an accountholder of Euroclear, and Euroclear, if Euroclear shall be an accountholder of Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear and/or Clearstream, Luxembourg as the holder of a particular principal amount of Notes (each an Accountholder ) (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Notes standing to the account of any person shall, save in the case of manifest error, be conclusive and binding for all purposes) shall be treated as the holder of that principal amount for all purposes (including but not limited to for the purposes of any quorum requirements of, or the right to demand a poll or, meetings of the Noteholders and giving notice to the Issuer pursuant to Condition 10 ( Events of Default ) and Condition 7.5 ( Redemption at the Option of the Holders ) other than with respect to the payment of principal, premium and interest on the Notes, the right to which shall be vested, as against the Issuer, solely in the bearer of this permanent Global Note in accordance with and subject to its terms. Each Accountholder must look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for its share of each payment made to the bearer of this permanent Global Note.

In the event that (a) this Global Note (or any part of it) has become due and repayable in accordance with the Conditions or that the maturity date of the Notes has occurred and, in either case, payment in full of the amount due has not been made to the bearer in accordance with the provisions set out above, or (b) following an Exchange Event, this Global Note is not duly exchanged for definitive Notes by the day provided above, then from 8.00 p.m. (London time) on such day each Accountholder will become entitled to proceed directly against the Issuer on, and subject to, the terms of the Deed of Covenant executed by the Issuer on 26 June 2018 in respect of the Notes and the bearer will have no further rights under this Global Note (but without prejudice to the rights which any person may have under the Deed of Covenant).

0013117-0002372 ICM:29837691.10

Notices

For so long as all of the Notes are represented by this permanent Global Note or by this permanent Global Note and the temporary Global Note and such Global Note(s) are held on behalf of Euroclear and/or Clearstream, Luxembourg, notices to Noteholders may be given by delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg (as the case may be) for communication to the relevant Accountholders rather than by publication as required by Condition 12 ( Notices ). Any such notice shall be deemed to have been given to the Noteholders on the day after the day on which such notice is delivered to Euroclear and/or Clearstream, Luxembourg (as the case may be) as aforesaid.

8.	Prescription

Claims against the Issuer and the Guarantor in respect of principal or premium and interest on the Notes represented by this permanent Global Note will be prescribed after 10 years (in the case of principal) and five years (in the case of interest) from the Relevant Date (as defined in Condition 8 ( Taxation )).

9.	Put Option

For so long as all of the Notes are represented by this permanent Global Note or by this permanent Global Note and the temporary Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, the option of the Noteholders provided for in Condition 7.5 ( Redemption at the Option of the Holders ) may be exercised by an Accountholder giving notice to the Fiscal Agent in accordance with the standard procedures of Euroclear and/or Clearstream, Luxembourg (as the case may be) (which may include notice being given on his instructions by Euroclear or Clearstream, Luxembourg or any common safe-keeper for them to the Fiscal Agent by electronic means) and in a form acceptable to Euroclear and Clearstream, Luxembourg of the principal amount of the Notes in respect of which such option is exercised and the Issuer shall procure that the portion of the principal amount of this permanent Global Note so redeemed shall be entered in the records of the relevant Clearing System.

10.	Redemption at the Option of the Issuer

For so long as all of the Notes are represented by this permanent Global Note or by this permanent Global Note and the temporary Global Note and such Global Note(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, no selection of Notes to be redeemed will be required under Condition 7.4 ( Provisions relating to Partial Redemption ) in the event that the Issuer exercises its option pursuant to Condition 7.3 ( Redemption at the Option of the Issuer ) in respect of less than the aggregate principal amount of the Notes outstanding at such time. In such event, selection of the interests in this permanent Global Note subject to the exercise of this option will be made in accordance with the standard rules and procedures of Euroclear and/or Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion).

11.	Euroclear and Clearstream, Luxembourg

Notes represented by this permanent Global Note are transferable in accordance with the rules and procedures of Euroclear and Clearstream, Luxembourg, as appropriate.

12.	Authentication and Effectuation

This permanent Global Note shall not become valid or enforceable for any purpose unless and until it has been authenticated by or on behalf of the Fiscal Agent and effectuated by the entity appointed as common safe-keeper by the relevant Clearing Systems.

0013117-0002372 ICM:29837691.10

13.	Contracts (Rights of third Parties) Act 1999

No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this permanent Global Note, but this does not affect any right or remedy of any person which exists or is available apart from that Act.

14.	Severability

If any provision in or obligation under this permanent Global Note is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under this permanent Global Note, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under this permanent Global Note.

15.	Governing Law

This permanent Global Note and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, English law.

IN WITNESS whereof the Issuer has caused this permanent Global Note to be signed by a person duly authorised on its behalf.

AUTOLIV, INC.

By:

(Duly authorised)

Issued in London on 26 June, 2018.

CERTIFICATE OF AUTHENTICATION

This is the permanent Global Note

described in the Agency Agreement

By or on behalf of

HSBC Bank plc as Fiscal Agent

(without recourse, warranty or liability)

CERTIFICATE OF EFFECTUATION

Effectuated without recourse,

warranty or liability by

as common safe-keeper

By:

0013117-0002372 ICM:29837691.10

Schedule 2

Form of Definitive Note

Part 1

Form of Definitive Note and Coupon

( Face of Note )

000000

XS1713462585

00 00000

AUTOLIV, INC.

( incorporated with limited liability under the laws of State of Delaware, U.S.A. )

EUR [●] 0.750 per cent. Guaranteed Notes due 2023

unconditionally and irrevocably guaranteed

as to payment of principal, premium (if any) and interest by

AUTOLIV ASP, INC.

( incorporated with limited liability under the laws of State of Indiana, U.S.A. )

The issue of the Notes was authorised by a resolution of the Board of Directors of Autoliv, Inc. (the Issuer ) passed on 18 April 2018 and the resolution of a committee of the Board of Director of the Issuer dated 14 June 2018; and the giving of the guarantee in respect of the Notes was authorised by a resolution of the Board of Directors of Autoliv ASP, Inc. (the Guarantor ) passed on 23 May 2018.

This Note forms one of a series of Notes issued as bearer Notes in the denominations of EUR 100,000 and integral multiples of EUR 1,000 in excess thereof up to and including EUR199,000 in an aggregate principal amount of EUR 500,000,000.

The Issuer for value received and subject to and in accordance with the Conditions endorsed hereon hereby promises to pay to the bearer on 26 June 2023, [ ] (or on such earlier date as the principal sum (as determined under the Conditions) may become repayable under the said Conditions) the principal sum of:

EUR[ relevant denomination ] ([●]/Redemption Amount]

together with interest on the principal amount of EUR [ relevant denomination ] at the rate of 0.750 per cent. per annum determined under Condition 5 ( Interest ) payable annually in arrear on 26 June and together with such premium and other amounts as may be payable, all subject to and under the Conditions.

The Notes are issued pursuant to an Agency Agreement (the Agency Agreement ) dated 26 June 2018 between, among others, the Issuer, the Guarantor and HSBC Bank plc as Fiscal Agent. Payments of principal, premium (if any) and interest in respect of the Notes are unconditionally and irrevocably guaranteed by the Guarantor as provided in a guarantee (the Guarantee ) dated 26 June 2018 entered into by the Guarantor. The Notes have the benefit of, and are subject to, the provisions contained in the Agency Agreement, the Guarantee and the Conditions.

If any provision in or obligation under this Note is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under this Note, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under this Note.

0013117-0002372 ICM:29837691.10

Neither this Note nor any of the Coupons relating to this Note shall become valid or enforceable for any purpose unless and until this Note has been authenticated by or on behalf of the Fiscal Agent.

IN WITNESS WHEREOF this Note and the Coupons relating to this Note have been executed on behalf of the Issuer.

Dated as of [●],

Issued in London, England.

AUTOLIV, INC.

By:

CERTIFICATE OF AUTHENTICATION

This is one of the Notes described

in the Agency Agreement.

By or on behalf of

HSBC Bank plc as Fiscal Agent

(without recourse, warranty or liability)

0013117-0002372 ICM:29837691.10

( Reverse of Note )

CONDITIONS OF THE NOTES

(as set out in Part 2 of this Schedule 2)

FISCAL AND PRINCIPAL PAYING AGENT

HSBC BANK PLC

and/or such other or further Fiscal Agent or Paying Agents and/or specified offices as may from time to time be appointed by the Issuer and notice of which has been given to the Noteholders.

0013117-0002372 ICM:29837691.10

FORM OF COUPON

( Face of Coupon )

AUTOLIV, INC

EUR [ ● ] 0.750 per cent. Guaranteed Notes due 2023

unconditionally and irrevocably guaranteed by AUTOLIV ASP, INC.

This Coupon relating to a Note payable in the denomination of EUR is payable to bearer, separately negotiable and subject to the Conditions of the Notes

Coupon for

EUR[●] per EUR1,000

due on

[●] [●]

AUTOLIV, INC.

By:

[●]00 000000

000000

0013117-0002372 ICM:29837691.10

( Reverse of Coupon )

FISCAL AND PRINCIPAL PAYING AGENT:

HSBC BANK PLC

0013117-0002372 ICM:29837691.10

Part 2

Conditions of the Notes

The €500,000,000 0.750 per cent. Guaranteed Notes due 2023 (the “ Notes ” ) , which expression shall in these Conditions, unless the context otherwise requires, include any further notes issued pursuant to Condition 14 ( Further Issues ) and forming a single series with the Notes of Autoliv, Inc. (the “ Issuer ”) are issued subject to and with the benefit of an Agency Agreement dated 26 June 2018 (such agreement as amended and/or supplemented and/or restated from time to time, the “ Agency Agreement ”) made between the Issuer, Autoliv ASP, Inc. (the “ Guarantor ”) as guarantor and HSBC Bank plc as fiscal agent and principal paying agent (the “ Fiscal Agent ”) and the other initial paying agents named in the Agency Agreement (together with the Fiscal Agent, the “ Paying Agents ”). The holders of the Notes (the “ Noteholders ”) and the holders of the interest coupons appertaining to the Notes (the “ Couponholders ” and the “ Coupons ” respectively) are entitled to the benefit of a Deed of Covenant (the “ Deed of Covenant ”) dated 26 June 2018 and made by the Issuer. The original of the Deed of Covenant is held by the Common Safekeeper for Euroclear (as defined below) and Clearstream, Luxembourg (as defined below).

The statements in these Conditions include summaries of, and are subject to, the detailed provisions of and definitions in the Agency Agreement. Copies of the Agency Agreement and the Deed of Covenant are available for inspection during normal business hours by the Noteholders and Couponholders at the specified office of each of the Paying Agents. The Noteholders and the Couponholders are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Agency Agreement and the Deed of Covenant applicable to them. References in these Conditions to the Fiscal Agent and the Paying Agents shall include any successor appointed under the Agency Agreement.

1.	Form, Denomination and Title

1.1	Form and Denomination

The Notes are in bearer form, serially numbered, in the denomination of €100,000 and integral multiples of €1,000 in excess thereof up to and including €199,000 each with Coupons attached on issue.

1.2

Title

Title to the Notes and to the Coupons will pass by delivery.

1.3	Holder Absolute Owner

The Issuer, the Guarantor and any Paying Agent will (except as otherwise required by law) deem and treat the bearer of any Note or Coupon as the absolute owner for all purposes (whether or not the Note or Coupon shall be overdue and notwithstanding any notice of ownership or writing on the Note or Coupon or any notice of previous loss or theft of the Note or Coupon) and shall not be required to obtain any proof thereof or as to the identity of such bearer.

2.	Status of the Notes

The Notes and the Coupons are direct, unconditional and (subject to the provisions of Condition 4 ( Negative Pledge )) unsecured obligations of the Issuer and (subject as provided above) rank and will rank pari passu , without any preference among themselves, with all other outstanding unsecured and unsubordinated obligations of the Issuer, present and future, but, in the event of insolvency, only to the extent permitted by applicable laws relating to creditors‘ rights.

0013117-0002372 ICM:29837691.10

Guarantee

3.1

Guarantee

The payment of the principal and interest in respect of the Notes has been unconditionally and irrevocably guaranteed by the Guarantor under a deed of guarantee (the “ Guarantee ”) dated 26 June 2018 and executed by the Guarantor.

3.2	Status of the Guarantee

The obligations of the Guarantor under the Guarantee constitute direct, unconditional and (subject to the provisions of Condition 4 ( Negative Pledge )) unsecured obligations of the Guarantor and (subject as provided above) rank and will rank pari passu with all other outstanding unsecured and unsubordinated obligations of the Guarantor, present and future, but, in the event of insolvency, only to the extent permitted by applicable laws relating to creditors' rights. The original of the Guarantee is held by the Fiscal Agent on behalf of, and copies are available during normal business hours for inspection by, the Noteholders and Couponholders at its specified office.

4.	Negative Pledge

4.1	Negative Pledge

So long as any of the Notes remains outstanding (as defined in the Agency Agreement) neither Issuer nor the Guarantor will, and each will procure that none of its Subsidiaries (as defined below) will, create or have outstanding any mortgage, charge, lien, pledge or other security interest (each a “ Security Interest ”) upon, or with respect to, any of its or their present or future business, undertaking, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness (as defined below), unless the Issuer or the Guarantor, as the case may be, in the case of the creation of a Security Interest, before or at the same time and, in any other case, promptly, takes any and all action necessary to ensure that (a) all amounts payable by it under the Notes and the Coupons (and/or the Guarantee, as the case may be) are secured by the Security Interest equally and rateably with the Relevant Indebtedness; or (b) such other Security Interest or other arrangement (whether or not it includes the giving of a Security Interest) shall be provided as is approved by an Extraordinary Resolution (as defined in the Agency Agreement) of the Noteholders; provided that, the foregoing provisions shall not apply to any Security Interest (i) arising by operation of law or (ii) created by an entity which becomes a Subsidiary after the date of creation of such Security Interest where the Security Interest was not created in connection with or in contemplation of such entity becoming a Subsidiary and does not extend to or cover any undertaking, assets or revenues (including any uncalled capital) of the Issuer, the Guarantor or any of their respective other Subsidiaries.

4.2	Interpretation

For the purposes of these Conditions:

“ Relevant Indebtedness ”: means (i) any present or future indebtedness (whether being principal, premium, interest or other amounts) for or in respect of any notes, bonds, debentures, debenture stock, loan stock or other securities which are for the time being or are or are intended by the issuer thereof to be quoted, listed or ordinarily dealt in on any stock exchange, over-the-counter or other securities market and (ii) any guarantee or indemnity in respect of any such indebtedness; and

“ Subsidiary ” means in relation to any person (the “ first person ”) at any particular time, any other person (the ” second person ”):

(x)

whose affairs and policies the first person controls or has power to control, whether by ownership or share capital, contract, the power to appoint or remove members of the governing body of the second person or otherwise; or

(y)

whose financial statements are, in accordance with applicable law and generally accepted accounting principles, consolidated with those of the first person.

0013117-0002372 ICM:29837691.10

Interest

5.1	Interest Rate and Interest Payment Dates

The Notes bear interest on their outstanding principal amount from and including 26 June 2018 at the rate of 0.750 per cent. per annum (the “ Rate of Interest ”), payable annually in arrear on 26 June (each an “ Interest Payment Date ”). The first payment (representing a full year’s interest) (for the period from and including 26 June 2018 to but excluding 26 June 2019 and amounting to €7.50 per €1,000 principal amount of Notes) shall be made on 26 June 2019.

5.2	Interest Accrual

Each Note will cease to bear interest from and including its due date for redemption unless, upon due presentation, payment of the principal in respect of the Note is improperly withheld or refused or unless default is otherwise made in respect of payment. In such event, interest will continue to accrue until whichever is the earlier of:

(a)

the date on which all amounts due in respect of such Note have been paid; and

(b)

five days after the date on which the full amount of the moneys payable in respect of such Notes has been received by the Fiscal Agent and notice to that effect has been given to the Noteholders in accordance with Condition 12 ( Notices ).

5.3	Calculation of Broken Interest

When interest is required to be calculated in respect of a period of less than a full year, it shall be calculated by applying the Rate of Interest to each €1,000 principal amount of Notes (the “ Calculation Amount ”) and on the basis of (a) the actual number of days in the period from and including the date from which interest begins to accrue (the “ Accrual Date ”) to but excluding the date on which it falls due divided by (b) the actual number of days from and including the Accrual Date to but excluding the next following Interest Payment Date. The resultant figure shall be rounded to the nearest cent, half a cent being rounded upwards. The interest payable in respect of a Note shall be the product of such rounded figure and the amount by which the Calculation Amount is multiplied to reach the denomination of the relevant Note, without any further rounding.

Payments

6.1	Payments in respect of Notes

Payments of principal and interest in respect of each Note will be made against presentation and surrender (or, in the case of part payment only, endorsement) of the Note, except that payments of interest due on an Interest Payment Date will be made against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant Coupon, in each case at the specified office outside the United States of any of the Paying Agents.

6.2	Method of Payment

Payments will be made by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee or, at the option of the payee, by euro cheque.

6.3	Missing Unmatured Coupons

Each Note should be presented for payment together with all relative unmatured Coupons, failing which the full amount of any relative missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the full amount of the missing unmatured Coupon which the amount so paid bears to the total amount due) will be deducted from the amount due for payment.

0013117-0002372 ICM:29837691.10

Each amount so deducted will be paid in the manner mentioned above against presentation and surrender (or, in the case of part payment only, endorsement) of the relative missing Coupon at any time before the expiry of 10 years after the Relevant Date (as defined in Condition 8 ( Taxation )) in respect of the relevant Note (whether or not the Coupon would otherwise have become void pursuant to Condition 9 ( Prescription )) or, if later, five years after the date on which the Coupon would have become due, but not thereafter.

6.4	Payments subject to applicable laws

All payments in respect of the Notes are subject in all cases to (i) any fiscal or other laws and regulations applicable in the place of payment, but without prejudice to the provisions of Condition 8 and (ii) any withholding or deduction required pursuant to the U.S. Internal Revenue Code 1986 (the “ Code ”) or otherwise imposed pursuant to Sections 1471 to 1474 (inclusive) of the Code, any United States Treasury Regulations or agreements thereunder, any official interpretations thereof, any successor, substitute or similar legislation or law or any law implementing an intergovernmental approach thereto.

6.5	Payment only on a Presentation Date

A holder shall be entitled to present a Note or Coupon for payment only on a Presentation Date and shall not, except as provided in Condition 5 ( Interest ), be entitled to any further interest or other payment if a Presentation Date is after the due date.

“ Presentation Date ” means a day which (subject to Condition 9 ( Prescription )):

(x)

is or falls after the relevant due date;

(y)

is a Business Day in the place of the specified office of the Paying Agent at which the Note or Coupon is presented for payment; and

(z)

in the case of payment by credit or transfer to a euro account as referred to above, is a TARGET2 Settlement Day.

In this Condition, “ Business Day ” means, in relation to any place, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in that place and “ TARGET2 Settlement Day ” means any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET2) System is open.

6.6	Initial Paying Agents

The names of the initial Paying Agents and their initial specified offices are set out at the end of these Conditions. The Issuer and the Guarantor reserve the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents provided that:

(a)

there will at all times be a Fiscal Agent;

(b)

so long as the Notes are listed on any stock exchange or admitted to listing by any other relevant authority, there will at all times be at least one Paying Agent (which may be the Fiscal Agent) having a specified office in the place (if any) required by the rules and regulations of the relevant Stock Exchange or any other relevant authority; and

(c)

there will at all times be a Paying Agent (which may be the Fiscal Agent) in a jurisdiction within Europe.

Notice of any variation, termination, appointment and/or of any changes in specified offices will be given to the Noteholders promptly by the Issuer in accordance with Condition 12 ( Notices ).

0013117-0002372 ICM:29837691.10

7.	Redemption and Purchase

7.1	Redemption at Maturity

Unless previously redeemed or purchased and cancelled as provided below, the Issuer will redeem the Notes at their principal amount on 26 June 2023 (the “ Maturity Date ”).

7.2	Redemption for Taxation Reasons

If:

(a)

as a result of any change in, or amendment to, the laws or regulations of a Relevant Jurisdiction (as defined in Condition 8 ( Taxation )), or any change in the application or official interpretation of the laws or regulations of a Relevant Jurisdiction, which change or amendment becomes effective after 21 June 2018, on the next Interest Payment Date either (i) the Issuer would be required to pay additional amounts as provided or referred to in Condition 8 ( Taxation ) or (ii) the Guarantor would be unable for reasons outside its control to procure payment by the Issuer and in the making payment itself would be required to pay such additional amounts; and

(b)

the requirement cannot be avoided by the Issuer or, as the case may be, the Guarantor taking reasonable measures available to it,

the Issuer may at its option, having given not less than 30 nor more than 60 days’ notice to the Noteholders in accordance with Condition 12 ( Notices ) (which notice shall be irrevocable), redeem all the Notes, but not some only, at any time at their principal amount together with interest accrued to but excluding the date of redemption, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer or, as the case may be, the Guarantor would be obliged to pay such additional amounts, were a payment in respect of the Notes then due. Prior to the publication of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Fiscal Agent to make available at its specified offices to the Noteholders (i) a certificate signed by two authorised signatories of the Issuer or, as the case may be, two authorised signatories of the Guarantor stating the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred and (ii) an opinion of independent legal advisers of recognised standing to the effect that the Issuer or, as the case may be, the Guarantor has or will become obliged to pay such additional amounts as a result of the change or amendment.

7.3	Redemption at the Option of the Issuer

The Issuer may, having given:

(a)

not less than 15 nor more than 30 days’ notice to the Noteholders in accordance with Condition 12 ( Notices ); and

(b)

notice to the Fiscal Agent not less than 15 days before the giving of the notice referred to in (a),

(which notices shall be irrevocable and shall specify the date fixed for redemption), redeem the Notes, in whole or in part, at any time at the Relevant Early Redemption Amount.

0013117-0002372 ICM:29837691.10

In this Condition, “ Relevant Early Redemption Amount ” means:

(i)

in relation to any date fixed for redemption which falls in the period up to and including the date falling three months prior to the Maturity Date, such amount as is equal to the greater of the amounts in subparagraphs (A) and (B) below together with interest accrued to but excluding the date fixed for redemption:

(A)

the principal amount outstanding of the Notes; and

(B)

an amount (as reported in writing to the Issuer and the Fiscal Agent by the Determination Agent) which is equal to the sum of the present values of the principal amount outstanding of the Notes at the date fixed for redemption and the Remaining Term Interest (exclusive of interest accrued to the date fixed for redemption) discounted to the date fixed for redemption on an annual basis at the Reference Bond Rate plus 0.20 per cent.

In this Condition:

“ Calculation Date ” means the date which is the second TARGET2 Settlement Day prior to the date fixed for redemption;

“ Determination Agent ” means an investment bank or financial institution of international standing selected by the Issuer and notified to the Fiscal Agent and the Noteholders;

“ Reference Bond ” means the DBR 1.5% 15/05/2023 (ISIN: DE0001102317) (or, where the Determination Agent advises the Issuer and the Fiscal Agent that, for reasons of illiquidity or otherwise, such government bond is not appropriate for such purpose, such other government bond as the Determination Agent may recommend);

“ Reference Bond Price ” means, with respect to any date fixed for redemption, (A) the arithmetic average of the Reference Government Bond Dealer Quotations for such date fixed for redemption, after excluding the highest and lowest such Reference Government Bond Dealer Quotations, or (B) if the Determination Agent obtains fewer than four such Reference Government Bond Dealer Quotations, the arithmetic average of all such quotations;

“ Reference Bond Rate ” means, with respect to any date fixed for redemption, the rate per annum equal to the annual yield to maturity or interpolated yield to maturity on an Actual/Actual (ICMA) basis of the Reference Bond, assuming a price for the Reference Bond (expressed as a percentage of its nominal amount) equal to the Reference Bond Price for such date fixed for redemption;

“ Reference Government Bond Dealer ” means each of the five banks selected by the Issuer after consultation with the Determination Agent, or their affiliates, which are (A) primary government securities dealers, or (B) market makers experienced in pricing corporate bond issues;

“ Reference Government Bond Dealer Quotations ” means, with respect to each Reference Government Bond Dealer and any Calculation Date, the arithmetic average, as determined by the Determination Agent, of the bid and offered prices for the Reference Bond (expressed in each case as a percentage of its nominal amount) at 11 a.m. (Central European time) on the Calculation Date quoted in writing to the Determination Agent by such Reference Government Bond Dealer; and

“ Remaining Term Interest ” means the aggregate amount of scheduled payment(s) of interest on the Notes for the remaining term of the Notes determined on the basis of the Rate of Interest from and including the date fixed for redemption; and

0013117-0002372 ICM:29837691.10

(ii)

in relation to any date fixed for redemption which falls in the period from, but excluding, the date falling three months prior to the Maturity Date to but excluding the Maturity Date, such amount as is equal to the principal amount outstanding of the Notes together with interest accrued to but excluding the date fixed for redemption.

7.4	Provisions relating to Partial Redemption

In the case of a partial redemption of Notes, Notes to be redeemed will be selected individually by lot in such place and in such manner as the Fiscal Agent may decide not more than 30 days before the date fixed for redemption. Notice of any such selection will be given not less than 15 days before the date fixed for redemption. Each notice will specify the date fixed for redemption and the aggregate principal amount of the Notes to be redeemed, the serial numbers of the Notes called for redemption, the serial numbers of Notes previously called for redemption and not presented for payment and the aggregate principal amount of the Notes which will be outstanding after the partial redemption.

7.5	Redemption at the Option of the Holders

If a Change of Control Put Event (as defined below) occurs, each Noteholder shall have the option (unless, prior to the giving of the Change of Control Notice (as defined below), the Issuer shall have given notice under Condition 7.2 ( Redemption for Taxation Reasons ) or Condition 7.3 ( Redemption at the Option of the Issuer ) (if applicable)) to require the Issuer to redeem or, at the Issuer’s option, purchase (or procure the purchase of) that Noteholder’s Notes at their principal amount together with interest accrued to but excluding the Change of Control Settlement Date (as defined below). Such option (the “ Change of Control Put Option ”) shall operate as set out below.

If a Change of Control Put Event occurs then, within 14 days of the Issuer becoming aware that such Change of Control Put Event has occurred, the Issuer shall give notice (a “ Change of Control Notice ”) to the Noteholders in accordance with Condition 12 ( Notices ) specifying the nature of the Change of Control Put Event and the procedure for exercising the Change of Control Put Option.

To exercise the Change of Control Put Option, the holder of the Notes must deliver at the specified office of any Paying Agent on any Business Day (as defined in Condition 6.5 ( Payment only on a Presentation Date )) at the place of such specified office falling within the period of 30 days after the Change of Control Notice is given by the Issuer (the “ Change of Control Put Period ”), a duly signed and completed notice of exercise in the form (for the time being current and which may, if this Note is held through Euroclear Bank SA/NV (“ Euroclear ”) or Clearstream Banking S.A. (“ Clearstream, Luxembourg ”), be any form acceptable to and delivered in a manner acceptable to Euroclear or Clearstream, Luxembourg, as applicable) obtainable from any specified office of any Paying Agent (a “ Change of Control Exercise Notice ”) and in which the holder must specify a bank account (or, if payment is to be made by cheque, an address) to which payment is to be made under this Condition 7.5 accompanied by such Notes or evidence satisfactory to the Paying Agent concerned that such Notes will, following the delivery of the Change of Control Exercise Notice, be held to its order or under its control. A Change of Control Exercise Notice given by a holder of any Note shall be irrevocable except where, prior to the due date of redemption, an Event of Default has occurred and is continuing, in which event such holder, at its option, may elect by notice to the Issuer in accordance with Condition 12 ( Notices ) to withdraw the Change of Control Exercise Notice.

If 80 per cent. or more in nominal amount for the Notes then outstanding have been redeemed or purchased pursuant to this Condition 7.5, the Issuer may, on giving not less than 30 nor more than 60 days’ notice to Noteholders (such notice being given within 30 days after the Change of Control Settlement Date), redeem or purchase (or procure the purchase of), at its option, all but not some only of the remaining outstanding Notes at their principal amount together with interest (if any) accrued to (but excluding) the date fixed for such redemption or purchase.

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Any Note which is the subject of a Change of Control Exercise Notice which has been delivered to a Paying Agent prior to the expiry of the Change of Control Put Period shall be redeemed or, as the case may be, purchased by (or on behalf of) the Issuer on the date which is the seventh day immediately following the last day of the Change of Control Put Period (the “ Change of Control Settlement Date ” ).

A Change of Control Put Event will be deemed to occur if:

(i)

a person or persons, acting together, other than a holding company whose shareholders are or are to be substantially similar to the pre-existing shareholders of the Issuer or any holding company of the Issuer, acquire (i) the beneficial ownership (directly or indirectly) of more than 50 per cent. of the total voting rights represented by shares of the Issuer, or (ii) have the power to appoint or remove the majority of the members of the board of directors of the Issuer (each such event being, a “Change of Control”);

(ii)

on the date (the “Relevant Announcement Date”) that is the earlier of (1) the date of the first public announcement of the relevant Change of Control and (2) the date of the earliest Relevant Potential Change of Control Announcement (as defined below) (if any) the Notes have been assigned:

(A)

an investment grade credit rating ( Baa3/BBB-/BBB- or equivalent or better ) from any Rating Agency (provided by such Rating Agency at the invitation or with the consent of the Issuer) and such rating from any Rating Agency is, within the Change of Control Period, either downgraded to a non-investment grade credit rating ( Ba1/BB+/BB+ or equivalent or worse ) or withdrawn and is not, within the Change of Control Period, subsequently (in the case of a downgrade) upgraded or (in the case of a withdrawal) reinstated to an investment grade credit rating by such Rating Agency; or

(B)

a non-investment grade credit rating ( Ba1/BB+/BB+ or equivalent or worse ) from any Rating Agency (provided by such Rating Agency at the invitation or with the consent of the Issuer) and such rating from any Rating Agency is, within the Change of Control Period, downgraded by one or more notches ( for illustration, Ba1/BB+/BB+ to Ba2/BB/BB being one notch ) or withdrawn and is not, within the Change of Control Period, subsequently (in the case of a downgrade) upgraded or (in the case of a withdrawal) reinstated to its earlier credit rating or better by such Rating Agency; or

(C)

no credit rating from any Rating Agency and a Negative Rating Event also occurs within the Change of Control Period,

provided that , if at the time of the occurrence of the Change of Control the Notes carry a credit rating from more than one Rating Agency, at least one of which is investment grade, then sub-paragraph (A) will apply; and

(iii)

in making any decision(s) referred to above the relevant Rating Agency announces publicly or confirms in writing to the Issuer that such decision(s) resulted, in whole or in part, from the occurrence of the Change of Control or the Relevant Potential Change of Control Announcement (whether or not the Change of Control shall have occurred at the time such rating is downgraded and/or withdrawn).

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In these Conditions:

“ Change of Control Period ” means the period commencing on the Relevant Announcement Date and ending 90 days after the Change of Control (or such longer period for which the Issuer is under consideration (such consideration having been announced publicly within the period ending 90 days after the Change of Control) for rating review or, as the case may be, rating by a Rating Agency, such period not to exceed 60 days after the public announcement of such consideration);

“ Fitch ” means Fitch Ratings Limited;

“ Moody’s ” means Moody’s Investors Services Limited;

“ Negative Rating Event ” shall be deemed to have occurred, if at any time there is no rating assigned to the Notes by any Rating Agency (at the invitation or with the consent of the Issuer), either (i) the Issuer does not, prior to or not later than 21 days after the occurrence of the relevant Change of Control, seek, and thereafter throughout the Change of Control Period use all reasonable endeavours to obtain, a rating of the Notes or (ii) if the Issuer does so seek and use all such reasonable endeavours, it is unable to obtain such rating of at least investment grade (Baa3/BBB-/BBB- or equivalent or better) by the end of the Change of Control Period and the relevant Rating Agency announces publicly or confirms in writing to the Issuer and/or the Guarantor that the failure to issue a rating of at least investment grade (Baa3/BBB-/BBB- or equivalent or better) was as a result, in whole or in part, of the Change of Control or the Relevant Potential Change of Control Announcement (whether or not the Change of Control had occurred at such time);

“ Rating Agency ” means Moody’s, S&P, Fitch or any of their respective successors or any other internationally recognised rating agency (a “ Substitute Rating Agency ”) substituted for any of them by the Issuer from time to time;

“ Relevant Potential Change of Control Announcemen t” means any public announcement or statement by the Issuer, any actual or potential bidder or any adviser acting on behalf of any actual or potential bidder relating to any potential Change of Control where within 180 days following the date of such announcement or statement, a Change of Control occurs; and

“S&P ” means Standard & Poor’s Credit Market Services Europe Limited.

7.6

Purchases

The Issuer, the Guarantor or any of the Issuer’s other Subsidiaries (as defined above) may at any time purchase Notes (provided that, if they should be cancelled under Condition 7.7 below, all unmatured Coupons appertaining to the Notes are purchased with the Notes) in any manner and at any price. Such Notes may be held, reissued, resold or, at the option of the Issuer or Guarantor, surrendered to the Fiscal Agent for cancellation.

7.7	Cancellations

All Notes which are purchased pursuant to Condition 7.5 or which are to be redeemed will forthwith be cancelled, together with all relative unmatured Coupons attached to the Notes or surrendered with the Notes, and accordingly may not be reissued or resold.

7.8	Notices Final

Upon the expiry of any notice as is referred to in Condition 7.2 or Condition 7.3 above, the Issuer shall be bound to redeem the Notes to which the notice refers in accordance with the terms of such Condition.

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Taxation

8.1	Payment without Withholding

All payments in respect of the Notes by or on behalf of the Issuer or the Guarantor shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (“ Taxes ”) imposed or levied by or on behalf of any of the Relevant Jurisdiction, unless the withholding or deduction of the Taxes is required by law. In that event, the Issuer or, as the case may be, the Guarantor will pay such additional amounts as may be necessary in order that the net amounts received by the Noteholders and Couponholders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Notes or, as the case may be, Coupons in the absence of the withholding or deduction; except that no additional amounts shall be payable in relation to any payment in respect of any Note or Coupon:

(a)

the holder of which is liable for Taxes in respect of such Note or Coupon by reason of having some connection with the Relevant Jurisdiction other than a mere holding of the Note or Coupon; or

(b)

presented for payment in the United States; or

(c)

presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by satisfying any statutory or procedural requirements (including, without limitation, the provision of information or a Internal Revenue Service Form W-8 or Form W-9 (or a successor form)); or

(d)

presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note or Coupon to another Paying Agent in a Member State of the European Union; or

(e)

presented for payment more than 30 days after the Relevant Date (as defined below) except to the extent that a holder would have been entitled to additional amounts on presenting the same for payment on the last day of the period of 30 days assuming that day to have been a Presentation Date (as defined in Condition 6 ( Payments )).

Notwithstanding the foregoing, no additional amounts shall be payable for or on account of (i) any taxes, duties, assessments or governmental charges that are imposed otherwise than by deduction or withholding from payments made under or with respect to the Notes, (ii) any taxes, duties, assessments or governmental charges that are imposed on or with respect to any payment on an Notes to an Noteholder who is a fiduciary, partnership, limited liability company, or person other than the Beneficial Owner of such payment to the extent that the Beneficial Owner with respect to such payment (or portion thereof) would not have been entitled to the additional amounts had the payment (or the relevant portion thereof) been made directly to such Beneficial Owner and (iii) any deduction or withholding imposed or required pursuant to an agreement described in Section 1471(b) of the Code, or otherwise imposed pursuant to Sections 1471 through 1474 of the Code (or any regulations thereunder or official interpretations thereof) or an intergovernmental agreement between the United States of America and another jurisdiction facilitating the implementation thereof (or any fiscal or regulatory legislation, rules or practices implementing such an intergovernmental agreement). As used in clause (ii) above, “ Beneficial Owner ” means the person who is required by the laws of the relevant tax jurisdiction to include the payment in income for tax purposes.

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8.2	Interpretation

In these Conditions:

(a)

Relevant Date means the date on which the payment first becomes due but, if the full amount of the money payable has not been received by the Fiscal Agent on or before the due date, it means the date on which, the full amount of the money having been so received, notice to that effect has been duly given to the Noteholders by the Issuer in accordance with Condition 12 ( Notices ); and

(b)

Relevant Jurisdiction means United States or any political subdivision or any authority thereof or therein having power to tax or any other jurisdiction or any political subdivision or any authority thereof or therein having the power to tax to which the Issuer or the Guarantor, as the case may be, to which payments of principal and interest on the Notes and Coupons or payments made under the Guarantee become generally subject to tax.

8.3	Additional Amounts

Any reference in these Conditions to any amounts in respect of the Notes shall be deemed also to refer to any additional amounts which may be payable under this Condition.

9.	Prescription

Notes and Coupons will become void unless presented for payment within periods of 10 years (in the case of principal) and five years (in the case of interest) from the Relevant Date in respect of the Notes or, as the case may be, the Coupons, subject to the provisions of Condition 6 ( Payments ).

10.	Events of Default

10.1	Events of Default

The holder of any Note may give notice to the Issuer that the Note is, and it shall accordingly forthwith become, immediately due and repayable at its principal amount, together with interest accrued to the date of repayment, if any of the following events (“ Events of Default ”) shall have occurred and be continuing:

(a)

if default is made in the payment of any principal or interest due in respect of the Notes or any of them and the default continues for a period of 7 days in the case of principal or 14 days in the case of interest; or

(b)

if the Issuer or the Guarantor fails to perform or observe any of its other obligations under these Conditions or the Guarantee and (except in any case where the failure is incapable of remedy, when no continuation or notice as is hereinafter mentioned will be required) the failure continues for the period of 30 days following the service by any Noteholder on the Issuer or the Guarantor (as the case may be) of notice requiring the same to be remedied; or

(c)

if (i) any Indebtedness for Borrowed Money (as defined below) of the Issuer, the Guarantor or any Material Subsidiary becomes due and repayable prematurely by reason of an event of default (however described); (ii) the Issuer, the Guarantor or any Material Subsidiary fails to make any payment in respect of any Indebtedness for Borrowed Money on the due date for payment or, as the case may be, within any originally applicable grace period; or (iii) any security given by the Issuer, the Guarantor or any Material Subsidiary for any Indebtedness for Borrowed Money becomes enforceable; or (iv) default is made by the Issuer, the Guarantor or any Material Subsidiary in making any payment due or, as the case may be, within any originally applicable grace period under any guarantee and/or indemnity given by it in relation to any Indebtedness for Borrowed Money of any other person; provided that, the aggregate amount of the relevant Indebtedness for Borrowed Money in respect of which one or more of the events mentioned above in this Condition 10.1(c) have occurred and are continuing exceeds €40 million or its equivalent in any other currency; or

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(d)

if any final order is made by any competent court or resolution is passed for the winding up or dissolution of the Issuer, the Guarantor or any Material Subsidiary save for the purposes of reorganisation (i) on terms previously approved by an Extraordinary Resolution of the Noteholders or (ii) in the case of a Material Subsidiary, whereby the undertaking and assets of the Material Subsidiary are transferred to or otherwise vested in the Issuer or another of its Subsidiaries; or

(e)

if the Issuer, the Guarantor or any Material Subsidiary ceases or threatens to cease to carry on the whole or substantially all of its business (except a cessation (i) for the purposes of reorganisation or similar arrangement on terms previously approved by an Extraordinary Resolution of the Noteholders or (ii) in the case of a Material Subsidiary, in connection with the transfer of all or the major part of its business to the Issuer, the Guarantor or any other Subsidiary of either of them which thereby becomes a Material Subsidiary, and provided that a bona fide disposal for full value on an arm’s length basis of the whole or substantially all of the business of the Issuer, the Guarantor or a Material Subsidiary shall be deemed not to be a cessation for the purposes of this paragraph) or the Issuer, the Guarantor or any Material Subsidiary stops or threatens to stop payment of, or is unable to, or admits inability to, pay, its debts (or any class of its debts) as they fall due, or is adjudicated bankrupt or insolvent by a court of competent jurisdiction; or

(f)

if (i) proceedings are initiated against the Issuer, the Guarantor or any Material Subsidiary under any applicable liquidation, insolvency, composition, reorganisation or other similar laws or an application is made (or documents filed with a court) for the appointment of an administrative or other receiver, manager, administrator, liquidator or other similar official, or an administrative or other receiver, manager, administrator, liquidator or other similar official is appointed, in relation to the Issuer, the Guarantor or any Material Subsidiary or, as the case may be, in relation to the whole or substantially all of the undertaking or assets of any of them or an encumbrancer takes possession of the whole or substantially all of the undertaking or assets of any of them, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against the whole or substantially all of the undertaking or assets of any of them (except in any such case for the purpose of a reconstruction, merger, consolidation, amalgamation or other similar arrangement the terms of which have previously been approved by an Extraordinary Resolution of Noteholders or, in the case of a Material Subsidiary, in connection with the transfer of all or the major part of its business, undertaking and assets to the Issuer, Guarantor or another Subsidiary of either of them which thereby becomes a Material Subsidiary), and (ii) in any such case is not discharged within 45 days; or

(g)

if the Issuer, the Guarantor or any Material Subsidiary initiates or consents to judicial proceedings relating to itself under applicable liquidation, insolvency, composition, reorganisation or other similar laws (including the obtaining of a moratorium) or makes a conveyance or assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally (or any class of its creditors) or convenes a meeting to consider a proposal for an arrangement or composition with its creditors generally (or any class of its creditors); or

(h)

if the Guarantee ceases to be, or is claimed by the Issuer or the Guarantor not to be, in full force and effect.

10.2	Interpretation

For the purposes of this Condition:

(a)

“ Indebtedness for Borrowed Money ” means any indebtedness (whether being principal, premium, interest or other amounts) for or in respect of any borrowed money or any liability under or in respect of any acceptance or acceptance credit or any notes, bonds, debentures, debenture stock, loan stock or other securities;

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(b)

“ Material Subsidiary ” means each Subsidiary of the Issuer (or the Guarantor, as the case may be) the EBITDA of which (on an unconsolidated basis) as at the date at which its latest audited financial statements were prepared or, as the case may be, for the financial period to which those financial statements relate accounts for 10 per cent. or more of the Consolidated EBITDA (all as calculated by reference to the latest audited consolidated financial statements of the Issuer), provided that if a Subsidiary has been acquired since the date as at which the latest audited consolidated financial statements of the Issuer were prepared, the financial statements shall be deemed to be adjusted in order to take into account the acquisition of that Subsidiary (that adjustment being certified by the auditors as representing an accurate reflection of the Consolidated EBITDA of the Issuer); and

(c)

“ Consolidated EBITDA ” means, for any financial period, the consolidated profit or loss of the Issuer and its Subsidiaries (the “ Group ”), as shown in the income statement:

(i)

before deducting any income tax expense, as shown in the income statement;

(ii)

before deducting any finance costs and excluding any finance income, as shown in the income statement;

(iii)

after adding back any amount attributable to the amortisation or depreciation of assets of the Group or any members of the Group;

(iv)

before taking into account any exceptional items of a one-off or non-recurring nature (including, without limitation, the costs associated with any restructuring programme or with any disposal not made in the ordinary course of business);

(v)

after adding back or deducting , as the case may be, the amount of any loss or gain against book value arising on a disposal of any asset (other than in the ordinary course of trading) and any loss or gain arising on any upward or downward revaluation of any asset (including without limitation any impairment of goodwill);

(vi)

before taking in to account any unrealised gains or loss on any derivative instrument;

(vii)

after deducting the amount of profit (or adding back the amount of any loss) of any member of the Group which is attributable to non-controlling interests; and

(viii)

after excluding any amortisation or gains or losses under IAS 39 arising from the discontinuation of hedging agreements,

where, for the purposes of this definition, the exchange rate to be used shall be the exchange rate used in the financial statements of the Group for the relevant financial period.

Consolidated EBITDA shall be adjusted by including (or excluding), on a pro-forma basis, EBITDA attributable to companies or businesses acquired (or divested) during the relevant financial period as if they had been acquired (or divested) on the first day of the relevant financial period; and

10.3

Reports

A report by any two authorised signatories of the Issuer that in their opinion a Subsidiary of the Issuer is or is not or was or was not at any particular time or throughout any specified period a Material Subsidiary shall, in the absence of manifest error, be conclusive and binding on all parties.

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11.	Replacement of Notes and Coupons

Should any Note or Coupon be lost, stolen, mutilated, defaced or destroyed it may be replaced at the specified office of the Fiscal Agent upon payment by the claimant of the expenses incurred in connection with the replacement and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Notes or Coupons must be surrendered before replacements will be issued.

12.

Notices

12.1	Notices to the Noteholders

Notices required to be given to the Holders of the Notes pursuant to these Conditions shall be valid if published in a leading English language daily newspaper (which is expected to be the Financial Time s) or, if such publication is not practicable, in an English language newspaper having general circulation in Europe. The Issuer shall also ensure that notices are duly given or published in a manner which complies with the rules and regulations of any stock exchange or other relevant authority on which the Notes are for the time being listed. Any such notice shall be deemed to have been given on the date of first publication (or if published more than once or on different dates, on the first date on which publication shall have been made). Couponholders will be deemed for all purposes to have notice of the contents of any notice given to Noteholders in accordance with this Condition 12.

12.2	Notices from the Noteholders

Notices to be given by any Noteholder shall be in writing and given by lodging the same, together with the relative Note or Notes, with the Fiscal Agent or, if the Notes are held in a clearing system, may be given through the clearing system in accordance with its standard rules and procedures.

13.	Meetings of Noteholders and Modification

13.1	Meetings of Noteholders

The Agency Agreement contains provisions for convening meetings of the Noteholders to consider any matter affecting their interests, including the modification by Extraordinary Resolution of any of these Conditions or the Guarantee or any of the provisions of the Agency Agreement. The quorum at any meeting for passing an Extraordinary Resolution will be one or more persons present holding or representing more than 50 per cent. in principal amount of the Notes for the time being outstanding, or at any adjourned such meeting one or more persons present whatever the principal amount of the Notes held or represented by him or them, except that at any meeting the business of which includes any matter defined in the Agency Agreement as a Basic Terms Modification, including the modification of the Guarantee or certain of these Conditions (including the date of maturity of the Notes or any date for payment of interest thereon, reducing or cancelling the amount of principal or the rate of interest payable in respect of the Notes or altering the currency of payment of the Notes), the necessary quorum for passing an Extraordinary Resolution will be one or more persons present holding or representing not less than two-thirds, or at any adjourned meeting not less than one-third, of the principal amount of the Notes for the time being outstanding. The Agency Agreement provides that (i) a resolution passed at a meeting duly convened and held in accordance with the Agency Agreement by a majority consisting of not less than three-fourths of the votes cast on such resolution, (ii) a resolution in writing signed by or on behalf of the holders of not less than three-fourths in principal amount of the Notes for the time being outstanding or (iii) consent given by way of electronic consents through the relevant clearing system(s) (in a form satisfactory to the Fiscal Agent) by or on behalf of the holders of not less than three-fourths in principal amount of the Notes for the time being outstanding, shall, in each case, be effective as an Extraordinary Resolution of the Noteholders. An Extraordinary Resolution passed by the Noteholders will be binding on all Noteholders, whether or not they are present at any meeting and whether or not they voted on the resolution, and on all Couponholders.

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13.2	Modification

The Fiscal Agent, the Issuer and the Guarantor may agree, without the consent of the Noteholders or Couponholders, to:

(a)

any modification of, the Notes, the Coupons or any of the provisions of the Agency Agreement which is of a formal, minor or technical nature or is made to correct a manifest error or to comply with mandatory provisions of the law, or

(b)

any modification (except a Basic Terms Modification (being a matter in respect of which an increased quorum is required as mentioned above)) of the Notes, the Coupons or the Agency Agreement which is not materially prejudicial to the interests of the Noteholders.

Any modification shall be binding on the Noteholders and the Couponholders and, unless the Fiscal Agent agrees otherwise, any modification shall be notified by the Issuer to the Noteholders as soon as practicable thereafter in accordance with Condition 12 ( Notices ).

14.	Further Issues

The Issuer may from time to time without the consent of the Noteholders or Couponholders create and issue further notes, having terms and conditions the same as those of the Notes, or the same except for the amount and date of the first payment of interest, which may be consolidated and form a single series with the outstanding Notes.

15.	Governing Law and Submission To Jurisdiction

15.1	Governing Law

The Agency Agreement, the Guarantee, the Deed of Covenant, the Notes and the Coupons and any non-contractual obligations arising out of or in connection with them are governed by, and construed in accordance with English law.

15.2	Submission to Jurisdiction

(a)

Subject to Condition 15.2(c) below, the English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with the Notes or the Coupons, including any dispute as to their existence, validity, interpretation, performance, breach or termination or the consequences of their nullity and any dispute relating to any non-contractual obligations arising out of or in connection with the Notes and/or the Coupons (a “Dispute”) and each of the Issuer, the Guarantor and any Noteholders and Couponholders in relation to any Dispute submits to the exclusive jurisdiction of the English courts.

(b)	For the purposes of this Condition, each of the Issuer and the Guarantor waives any objection to the English courts on the grounds that they are an inconvenient or inappropriate forum to settle any Dispute.

(c)	To the extent allowed by law, the Noteholders and the Couponholders may, in respect of any Dispute or Disputes, take (i) proceedings in any other court with jurisdiction; and (ii) concurrent proceedings in any number of jurisdictions.

15.3	Appointment of Process Agent

The Issuer irrevocably appoints Airbags International Limited at Viking Way, Congleton, Cheshire CW12 1TT as its agent for service of process in any proceedings before the English courts in relation to any Dispute and agrees that, in the event of Airbags International Limited being unable or unwilling for any reason so to act, it will promptly appoint another person as its agent for service of process in England in respect of any Dispute. The Issuer agrees that failure by a process agent to notify it of any process will not invalidate service. Nothing in this Condition shall affect the right to serve process in any other manner permitted by law.

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15.4	Other Documents

Each of the Issuer and the Guarantor (in each case where applicable) has in the Agency Agreement, the Deed of Covenant and the Guarantee submitted to the jurisdiction of the English courts and appointed an agent in England for service of process, in terms substantially similar to those set out above.

15.5	Waiver of Trial by Jury

Without prejudice to Condition 15.2 the Issuer waives any right it may have to a jury trial or any claim or cause of action in connection with the Notes and the Coupons. These Conditions may be filed as a written consent to a bench trial.

16.	Rights of Third Parties

No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term or condition of the Notes, but this does not affect any right or remedy of any person which exists or is available apart from that Act.

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Schedule 3

Form of Deed of Covenant

THIS DEED OF COVENANT is made on 26 June 2018 by Autoliv, Inc. (the Issuer ) in favour of the account holders or participants specified below of Clearstream Banking S.A. ( Clearstream, Luxembourg ) and/or Euroclear Bank S.A./N.V. ( Euroclear ) (each a Clearing System ).

WHEREAS :

(A)

The Issuer has entered into an Agency Agreement (the Agency Agreement , which expression includes the same as it may be amended, supplemented, novated or restated from time to time) dated 26 June 2018 between the Issuer, Autoliv ASP, Inc. as guarantor (the Guarantor ), HSBC Bank plc as fiscal agent (the Fiscal Agent ) and the other agents named therein in relation to the issue of EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023 (the Notes ). The terms and conditions of the Notes (the Conditions ) are set out in Schedule 2 to the Agency Agreement.

(B)	Payments of principal, premium (if any) and interest in respect of the Notes are unconditionally and irrevocably guaranteed by the Guarantor as provided in a guarantee (the Guarantee ) dated 26 June 2018 entered into by the Guarantor.

(C)	The Notes will be issued in bearer form and will initially be represented by, and comprised in, Global Notes (as defined in the Agency Agreement), in each case representing a certain number of underlying Notes (the Underlying Notes ).

(D)

Each Global Note may, after issue, be deposited with a depositary for one or more Clearing Systems (each a Relevant Clearing System and together, the Relevant Clearing System ). Upon any deposit of a Global Note the Underlying Notes represented by the Global Note will be credited to a securities account or securities accounts with the Relevant Clearing System. Any account holder with the Relevant Clearing System which has Underlying Notes credited to its securities account from time to time (other than any Relevant Clearing System which is an account holder of any other Relevant Clearing System) (each an Accountholder ) will, subject to and in accordance with the terms and conditions and operating procedures or management regulations of the Relevant Clearing System, be entitled to transfer the Underlying Notes and (subject to and upon payment being made by the Issuer to the bearer in accordance with the terms of the Global Note) will be entitled to receive payments from the Relevant Clearing System calculated by reference to the Underlying Notes credited to its securities account.

(E)

In certain circumstances specified in each Global Note, the bearer of the Global Note will have no further rights under the Global Note (but without prejudice to the rights which any person may have pursuant to this Deed of Covenant). The time at which this occurs is referred to as the Relevant Time . In those circumstances, each Accountholder will, subject to and in accordance with the terms of this Deed and the Guarantee, acquire against the Issuer and the Guarantor all those rights which the Accountholder would have had if, prior to the Relevant Time, duly executed and authenticated definitive Notes had been issued in respect of its Underlying Notes and the definitive Notes were held and beneficially owned by the Accountholder.

NOW THIS DEED WITNESSES AS FOLLOWS :

If at any time the bearer of the Global Note ceases to have rights under it in accordance with its terms, the Issuer covenants with each Accountholder that each Accountholder shall automatically acquire at the Relevant Time, without the need for any further action on behalf of any person, against the Issuer all those rights which the Accountholder would have had if at the Relevant Time it held and beneficially owned executed and authenticated definitive Notes in respect of each Underlying Note represented by the Global Note which the Accountholder has credited to its securities account with the Relevant Clearing System at the Relevant Time.

0013117-0002372 ICM:29837691.10

The Issuer's obligation under this clause shall be a separate and independent obligation by reference to each Underlying Note which an Accountholder has credited to its securities account with the Relevant Clearing System and the Issuer agrees that an Accountholder may assign its rights under this Deed in whole or in part.

2.	The records of the Relevant Clearing System shall be conclusive evidence of the identity of the Accountholders and the number of Underlying Notes credited to the securities account of each Accountholder. For these purposes a statement issued by the Relevant Clearing System stating:

(a)

the name of the Accountholder to which the statement is issued; and

(b)

the aggregate principal amount of Underlying Notes credited to the securities account of the Accountholder as at the opening of business on the first day following the Relevant Time on which the Relevant Clearing System is open for business,

shall, in the absence of manifest error, be conclusive evidence of the records of the Relevant Clearing System at the Relevant Time.

3.	In the event of a dispute, the determination of the Relevant Time by the Relevant Clearing System shall (in the absence of manifest error) be final and conclusive for all purposes in connection with the Accountholders with securities accounts with the Relevant Clearing System.

The Issuer undertakes in favour of each Accountholder that, in relation to any payment to be made by it under this Deed, it will comply with the provisions of Condition 8 ( Taxation ) of the Notes to the extent that they apply to any payments in respect of Underlying Notes as if those provisions had been set out in full in this Deed.

5.	The Issuer will pay any stamp and other duties and taxes, including interest and penalties, payable on or in connection with the execution of this Deed and any action taken by any Accountholder to enforce the provisions of this Deed.

The Issuer represents, warrants and undertakes to and with each Accountholder that it has all corporate power, and has taken all necessary corporate or other steps, to enable it to execute, deliver and perform this Deed, and that this Deed constitutes legal, valid and binding obligations of the Issuer enforceable in accordance with its terms subject to the laws of bankruptcy and other laws affecting the rights of creditors generally.

7.	This Deed shall take effect as a deed poll for the benefit of the Accountholders from time to time. This Deed shall be deposited with and held by the Common Safekeeper for Euroclear and Clearstream, Luxembourg until all the obligations of the Issuer under this Deed have been discharged in full.

The Issuer acknowledges the right of every Accountholder to the production of, and the right of every Accountholder to obtain (upon payment of a reasonable charge) a copy of, this Deed, and further acknowledges and covenants that the obligations binding upon it contained in this Deed are owed to, and shall be for the account of, each and every Accountholder, and that each Accountholder shall be entitled severally to enforce those obligations against the Issuer.

If any provision in or obligation under this Deed is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under this Deed, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under this Deed.

0013117-0002372 ICM:29837691.10

10.	(a) This Deed and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, English law.

(b)

Subject to clause 10(d) below, the English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed, including any dispute as to its existence, validity, interpretation, performance, breach or termination or the consequences of its nullity and any dispute relating to any non-contractual obligations arising out of or in connection with it (a Dispute ) and each of the Issuer and any Accountholders in relation to any Dispute submits to the exclusive jurisdiction of the English courts.

(c)

For the purposes of this clause 10 the Issuer waives any objection to the English courts on the grounds that they are an inconvenient or inappropriate forum to settle any Dispute.

(d)

To the extent allowed by law, each Accountholder may, in respect of any Dispute or Disputes, take (i) proceedings in any other court with jurisdiction; and (ii) concurrent proceedings in any number of jurisdictions.

(e)

The Issuer irrevocably appoints Airbags International Limited at Viking Way, Congleton, Cheshire CW12 1TT as its agent under this Deed for service of process in any proceedings before the English courts in relation to any Dispute and agrees that, in the event of Airbags International Limited being unable or unwilling for any reason so to act, it will immediately appoint another person as its agent for service of process in England in respect of any Dispute. The Issuer agrees that failure by a process agent to notify it of any process will not invalidate service. Nothing in this clause shall affect the right to serve process in any other manner permitted by law.

(f)

IN WITNESS whereof this Deed has been executed as a deed poll by the Issuer on the date which appears first on page 1.

EXECUTED as a DEED by

AUTOLIV, INC

By:

Name:

Title:

0013117-0002372 ICM:29837691.10

Schedule 4

Form of Guarantee

GUARANTEE of AUTOLIV ASP, INC.

THIS GUARANTEE is given on 26 June 2018 by Autoliv ASP, Inc. (the Guarantor ).

WHEREAS :

(A)

The Guarantor has agreed to guarantee the obligations of Autoliv, Inc. (the Issuer ) under (i) the EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023 (the Notes ) to be issued by the Issuer pursuant to an Agency Agreement (the Agency Agreement ) dated 26 June 2018 between the Issuer, the Guarantor, HSBC Bank plc as Fiscal Agent (the Fiscal Agent ) and the other agents named therein and (ii) the Deed of Covenant executed by the Issuer on 26 June 2018 in respect of the Notes (the Deed of Covenant ).

(B)	Terms defined in the Conditions of the Notes (the Conditions ), the Agency Agreement and the Deed of Covenant and not otherwise defined in this Guarantee shall have the same meaning when used in this Guarantee.

NOW THIS DEED WITNESSES AS FOLLOWS :

1.	The Guarantor as primary obligor unconditionally and irrevocably:

(a)

guarantees to (i) the holder from time to time of each Note or Coupon and (ii) each Accountholder, by way of continuing guarantee the due and punctual payment of all amounts payable by the Issuer on or in respect of the Note or Coupon (including any premium or additional amounts which may become payable under Condition 8 ( Taxation )) and the Deed of Covenant as and when the same shall become due according to the Conditions and the Deed of Covenant; and

(b)

agrees that, if and each time that the Issuer fails to make any payments as and when the same become due, the Guarantor will on demand (without requiring the relevant Noteholder, Couponholder or Accountholder first to take steps against the Issuer or any other person) pay to the relevant Noteholder or Couponholder, or as the case may be, the Accountholder the amounts (as to which the certificate of the relevant Noteholder or Couponholder, or as the case may be, the Accountholder shall in the absence of manifest error be conclusive) in the currency in which the amounts are payable by the Issuer under the Notes or the Deed of Covenant.

If any sum which, although expressed to be payable by the Issuer under the Notes, Coupons or the Deed of Covenant is for any reason (whether or not now existing and whether or not now known or becoming known to the Issuer, the Guarantor or any relevant Noteholder, Couponholder and/or Accountholder) not recoverable from the Guarantor on the basis of a guarantee then (a) it will nevertheless be recoverable from it as if it were the sole principal debtor and will be paid by it to the relevant Noteholder, Couponholder and/or Accountholder on demand, and (b) as a separate and additional liability under this Guarantee the Guarantor agrees, as a primary obligation, to indemnify each relevant Noteholder, Couponholder and each Accountholder in respect of such sum by way of a full indemnity in the manner and currency as is provided for in the Notes and the Deed of Covenant, and to indemnify each relevant Noteholder, Couponholder and each Accountholder against all losses, claims, costs, charges and expenses to which it may be subject or which it may incur in recovering such sum.

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If any payment received by any relevant Noteholder, Couponholder or Accountholder pursuant to the provisions of the Notes, Coupons or the Deed of Covenant shall (whether on the subsequent bankruptcy, insolvency or corporate reorganisation of the Issuer or, without limitation, on any other event) be avoided or set aside for any reason, such payment shall not be considered as discharging or diminishing the liability of the Guarantor and this Guarantee shall continue to apply as if such payment had at all times remained owing by the Issuer and the Guarantor shall indemnify the relevant Noteholders, Couponholders and/or Accountholders (as the case may be) in respect thereof provided that the obligations of the Issuer and/or the Guarantor under this clause 3 shall, as regards each payment made to any relevant Noteholder, Couponholder or Accountholder which is avoided or set aside, be contingent upon such payment being reimbursed to the Issuer or other persons entitled through the Issuer.

All payments by the Guarantor under this Guarantee shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature ( Taxes ) imposed or levied by or on behalf of the any Relevant Jurisdiction (as defined in Condition 8 ( Taxation )), unless the withholding or deduction of the Taxes is required by law. In that event, the Guarantor will pay such additional amounts as may be necessary in order that the net amounts received by the holders of the Notes and Coupons and the Accountholders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Notes or, as the case may be, Coupons, or the Deed of Covenant in the absence of the withholding or deduction; except that no additional amounts shall be payable with respect to any payment in respect of any Note:

(a)

the relevant holder or Accountholder of which is liable for such Taxes in respect of such Note or Coupon by reason of his having some connection with United States of America other than by reason of being a relevant holder or Accountholder; or

(b)

presented for payment in the United States; or

(c)

presented for payment by or on behalf of a holder or Accountholder who would have been able to avoid such withholding or deduction by satisfying any statutory or procedural requirements (including, without limitation, the provision of information or a Internal Revenue Service Form W-8 or Form or W-9 (or a successor form)); or

(d)

presented for payment by or on behalf of a holder or Accountholder who would have been able to avoid such withholding or deduction by presenting the relevant Note or Coupon to another Paying Agent in a Member State of the European Union; or

(e)

presented for payment more than 30 days after the Relevant Date (as defined in Condition 8 ( Taxation )) except to the extent that a relevant holder or Accountholder would have been entitled to additional amounts on presenting the same for payment on the last day of the period of 30 days assuming that day to have been a Presentation Date (as defined in Condition 6 ( Payments )).

5.	The obligations of the Guarantor under this Guarantee shall not be affected by any matter or thing which but for this provision might operate to affect the obligations including, without limitation:

(a)

any time or indulgence granted to or composition with the Issuer or any other person;

(b)

the taking, variation, renewal or release of remedies or securities against the Issuer or any other person; or

(c)

any unenforceability, invalidity or irregularity.

0013117-0002372 ICM:29837691.10

Where any discharge (whether in respect of the obligations of the Issuer or any security for the obligations of the Issuer or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be repaid on bankruptcy, liquidation or otherwise without limitation, the liability of the Guarantor under this Guarantee shall continue as if there had been no discharge or arrangement. The holder of any Note or Coupon or an Accountholder, acting in good faith, shall be entitled to concede or compromise any claim that any payment, security or other disposition is liable to avoidance or repayment.

The Guarantor will not, and the Guarantor will procure that none of its Subsidiaries (as defined in Condition 4.2 ( Interpretation )) will, create or have outstanding any mortgage, charge, lien, pledge or other security interest (each a Security Interest) upon, or with respect to, any of its or their present or future business, undertaking, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness (as defined in Condition 4.2 ( Interpretation )), unless the Guarantor, in the case of the creation of the Security Interest, before or at the same time and, in any other case, promptly, takes any and all action necessary to ensure that (a) all amounts payable by it under this Guarantee are secured by the Security Interest equally and rateably with the Relevant Indebtedness; or (b) such other Security Interest or other arrangement (whether or not it includes the giving of a Security Interest) shall be provided as is approved by an Extraordinary Resolution of the Noteholders; provided that, the foregoing provisions shall not apply to any Security Interest (i) arising by operation of law or (ii) created by an entity which becomes a Subsidiary after the date of creation of such Security Interest where the Security Interest was not created in connection with or in contemplation of such entity becoming a Subsidiary and does not extend to or cover any undertaking, assets or revenues (including any uncalled capital) of the Guarantor or any of its Subsidiaries.

8.	The Guarantor represents and warrants that:

(a)

the obligations of the Guarantor under this Guarantee constitute the direct, unconditional and (subject to the provisions of clause 7) unsecured obligations of the Guarantor and (subject as provided above) rank and will rank pari passu with all other outstanding unsecured and unsubordinated obligations of the Guarantor, present and future, but, in the event of insolvency, only to the extent permitted by applicable laws relating to creditors' rights; and

(b)

all necessary governmental consents and authorisations for the giving and implementation of this Guarantee have been obtained.

Until all amounts which may be or become payable under the Notes, the Coupons and the Deed of Covenant have been irrevocably paid in full, the Guarantor shall not by virtue of this Guarantee be subrogated to any rights of any holder of any Note or Coupon or any Accountholder or claim in competition with such holders against the Issuer.

10.	This Guarantee shall enure for the benefit of the Noteholders, the Couponholders and the Accountholders and shall be deposited with and held by the Fiscal Agent.

11.

If any provision in or obligation under this Guarantee is or becomes invalid, illegal or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair (i) the validity, legality or enforceability under the law of that jurisdiction of any other provision in or obligation under this Guarantee, or (ii) the validity, legality or enforceability under the law of any other jurisdiction of that or any other provision in or obligation under this Guarantee.

12.	This Guarantee and any non-contractual obligations arising out of or in connection with it are governed by, and construed in accordance with, English law.

0013117-0002372 ICM:29837691.10

13.

(a) Subject to subparagraph (c) below , the English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with this Guarantee, including any dispute as to its existence, validity, interpretation, performance, breach or termination or the consequences of its nullity and any dispute relating to any non-contractual obligations arising out of or in connection with it (a Dispute ) and each of the Guarantor and any Noteholders, Couponholders or Accountholders in relation to any Dispute submits to the exclusive jurisdiction of the English courts.

(b)

For the purposes of subparagraphs (a) and (c), the Guarantor waives any objection to the English courts on the grounds that they are an inconvenient or inappropriate forum to settle any Dispute.

(c)

To the extent allowed by law, the Noteholders, the Couponholders and the Accountholders may, in respect of any Dispute or Disputes, take (i) proceedings in any other court with jurisdiction and (ii) concurrent proceedings in any number of jurisdictions.

(d)

The Guarantor irrevocably appoints Airbags International Limited at Viking Way, Congelton, Chesire, CW12 1TT as its agent under this Guarantee for service of process in any proceedings before the English courts in relation to any Dispute and agrees that in the event of Airbags International Limited being unable or unwilling for any reason so to act, it will immediately appoint another person as its agent for service of process in England in respect of any Dispute. The Guarantor agrees that failure by a process agent to notify it of any process will not invalidate service. Nothing in this sub-paragraph shall affect the right to serve process in any other manner permitted by law.

(e)

IN WITNESS whereof this Guarantee has been executed as a deed poll by the Guarantor.

0013117-0002372 ICM:29837691.10

Executed as a deed by AUTOLIV ASP, INC.	)
acting by [ NAME OF DIRECTOR ]	)	……………………………..
and [ NAME OF DIRECTOR/SECRETARY ]	)	Director


		……………………………..
		Director/Secretary

0013117-0002372 ICM:29837691.10

Schedule 5

Form of Put Notice

AUTOLIV, INC

( incorporated with limited liability under the laws of State of Delaware, U.S.A. )

EUR 500,000,000

0.750 per cent. Guaranteed Notes due 2023

unconditionally and irrevocably guaranteed by

as to payment of principal, premium (if any) and interest by

AUTOLIV ASP, INC.

( incorporated with limited liability under the laws of State of Indiana, U.S.A. )

By depositing this duly completed Notice with any Paying Agent for the EUR 500,000,000 0.750 per cent. Guaranteed Notes due 2023 (the Notes ) of Autoliv, Inc. (the Issuer ), the undersigned holder of the Notes which are surrendered with this Notice and referred to below irrevocably exercises its option to have [the full………] ¹ principal amount of the Notes redeemed in accordance with Condition 7.5 ( Redemption and Purchase – Redemption at the Option of the Holders ) on [●].

This Notice relates to Notes in the aggregate principal amount of…………….bearing the following serial numbers:

………………………………………………....................………...........................…...........................................................

If the Notes referred to above are to be returned ² to the undersigned under clause 9.4 of the Agency Agreement, they should be returned by uninsured post to:

………………………………………………....................………..........................................................................................

Payment Instructions

Please make payment in respect of the above-mentioned Notes by cheque posted to the above address/transfer to the following bank account

[ To be completed by recipient Paying Agent ]

[Details of missing unmatured Coupons ……………………….. ³ ]

Received by: …………………………………………

[ Signature and stamp of Paying Agent ]

At its office at: ……………………….. On: …………………..

0013117-0002372 ICM:29837691.10

NOTES :

1.	Complete as appropriate.

2.	The Agency Agreement provides that Notes so returned will be sent by post, uninsured and at the risk of the Noteholder, unless the Noteholder otherwise requests and pays the costs of such insurance to the relevant Paying Agent at the time of depositing the Note referred to above.

3.	This is only relevant for Notes in definitive form.

N.B. Notwithstanding the deposit of any Notes with the Paying Agent, the Paying Agent acts solely as an agent of the Issuer and the Guarantor and will not assume any obligation or responsibility towards or relationship of agency or trust for or with any of the owners or holders of the Notes or Coupons or any other third party.

This Put Notice is not valid unless paragraphs requiring completion are duly completed and it is signed. Once validly given, this Put Notice may not be withdrawn without the prior consent of the Issuer.

0013117-0002372 ICM:29837691.10

Schedule 6

Provisions for Meetings of Noteholders

DEFINITIONS

1.	As used in this Schedule, the following expressions have the following meanings unless the context otherwise requires:

Block Voting Instruction means an English language document issued by a Paying Agent in which:

(a)

it is certified that on the date thereof Notes (whether in definitive form or represented by a Global Note) (not being Notes in respect of which a Voting Certificate has been issued and is outstanding in respect of the meeting specified in such Block Voting Instruction) have been deposited with such Paying Agent or (to the satisfaction of such Paying Agent) are held to its order or under its control or are blocked in an account with a Clearing System and that no such Notes will cease to be so deposited or held or blocked until the first to occur of:

(i)

the conclusion of the meeting specified in such Block Voting Instruction; and

(ii)

the surrender to the Paying Agent, not less than 48 Hours before the time for which such meeting is convened, of the receipt issued by such Paying Agent in respect of each such deposited Note which is to be released or (as the case may require) the Notes ceasing with the agreement of the Paying Agent to be held to its order or under its control or so blocked and the giving of notice by the Paying Agent to the Issuer in accordance with paragraph 3(e) of the necessary amendment to the Block Voting Instruction;

(b)

it is certified that each holder of such Notes has instructed such Paying Agent that the vote(s) attributable to the Notes so deposited or held or blocked should be cast in a particular way in relation to the resolution(s) to be put to such meeting and that all such instructions are, during the period commencing 48 Hours prior to the time for which such meeting is convened and ending at the conclusion or adjournment thereof, neither revocable nor capable of amendment;

(c)

the aggregate principal amount of the Notes so deposited or held or blocked is listed distinguishing with regard to each such resolution between those in respect of which instructions have been given that the votes attributable thereto should be cast in favour of the resolution and those in respect of which instructions have been so given that the votes attributable thereto should be cast against the resolution; and

(d)

one or more persons named in such Block Voting Instruction (each hereinafter called a proxy ) is or are authorised and instructed by such Paying Agent to cast the votes attributable to the Notes so listed in accordance with the instructions referred to in (c) above as set out in such Block Voting Instruction;

Clearing System means Euroclear and/or Clearstream, Luxembourg and includes , in respect of any Note, any clearing system on behalf of which such Note is held or which is the bearer or holder of a Note, in either case whether alone or jointly with any other Clearing System(s). For the avoidance of doubt, the provisions of clause 1.2(h) shall apply to this definition;

0013117-0002372 ICM:29837691.10

Eligible Person means any one of the following persons who shall be entitled to attend and vote at a meeting:

(a)

a holder of a Note in definitive form;

(b)

a bearer of any Voting Certificate;

(c)

a proxy specified in any Block Voting Instruction;

Extraordinary Resolution means:

(a)

a resolution passed at a meeting duly convened and held in accordance with the provisions of this Schedule by a majority consisting of not less than three-fourths of the Eligible Persons voting thereon upon a show of hands or, if a poll is duly demanded, by a majority consisting of not less than three-fourths of the votes cast on such poll;

(b)

a resolution in writing signed by or on behalf of all the Noteholders/the holders of not less than three-fourths in principal amount of the Notes for the time being outstanding (a Written Resolution ) which resolution may be contained in one document or in several documents in like form each signed by or on behalf of one or more of the holders; or

(c)

consent given by way of electronic consents through the relevant Clearing System(s) (in a form satisfactory to the Fiscal Agent) by or on behalf of the holders of not less than three-fourths in principal amount of the Notes for the time being outstanding;

Voting Certificate means an English language certificate issued by a Paying Agent in which it is stated:

(a)

that on the date thereof Notes (whether in definitive form or represented by a Global Note) (not being Notes in respect of which a Block Voting Instruction has been issued and is outstanding in respect of the meeting specified in such Voting Certificate) were deposited with such Paying Agent or (to the satisfaction of such Paying Agent) are held to its order or under its control or are blocked in an account with a Clearing System and that no such Notes will cease to be so deposited or held or blocked until the first to occur of:

(i)

the conclusion of the meeting specified in such Voting Certificate; and

(ii)

the surrender of the Voting Certificate to the Paying Agent who issued the same; and

(b)

that the bearer thereof is entitled to attend and vote at such meeting in respect of the Notes represented by such Voting Certificate;

24 Hours means a period of 24 hours including all or part of a day on which banks are open for business both in the place where the relevant meeting is to be held and in each of the places where the Paying Agents have their specified offices (disregarding for this purpose the day on which the meeting is to be held) and that period shall be extended by one period or, to the extent necessary, more periods of 24 hours until there is included all or part of a day on which banks are open for business in all of the places where the Paying Agents have their specified offices; and

48 Hours means a period of 48 hours including all or part of two days on which banks are open for business both in the place where the relevant meeting is to be held and in each of the places where the Paying Agents have their specified offices (disregarding for this purpose the day on which the meeting is to be held) and that period shall be extended by one period or, to the extent necessary, more periods of 24 hours until there is included all or part of two days on which banks are open for business in all of the places where the Paying Agents have their specified offices.

0013117-0002372 ICM:29837691.10

For the purposes of calculating a period of Clear Days in relation to a meeting, no account shall be taken of the day on which the notice of such meeting is given (or in the case of an adjourned meeting, the day on which the meeting to be adjourned is held) or the day on which such meeting is held.

All references in this Schedule to a "meeting" shall, where the context so permits, include any relevant adjourned meeting.

EVIDENCE OF ENTITLEMENT TO ATTEND AND VOTE

2.	A holder of a Note (whether in definitive form or represented by a Global Note) may require the issue by any Paying Agent of Voting Certificates and Block Voting Instructions in accordance with the terms of paragraph 3.

For the purposes of paragraph 3 below the Fiscal Agent and each Paying Agent shall be entitled to rely, without further enquiry, on any information or instructions received from a Clearing System and shall have no liability to any Noteholder or other person for any loss, damage, cost, claim or other liability occasioned by its acting in reliance thereon, nor for any failure by a Clearing System to deliver information or instructions to the Fiscal Agent or any Paying Agent.

The holder of any Voting Certificate or the proxies named in any Block Voting Instruction shall for all purposes in connection with the relevant meeting be deemed to be the holder of the Notes to which such Voting Certificate or Block Voting Instruction relates and the Paying Agent with which such Notes have been deposited or the person holding Notes to the order or under the control of such Paying Agent or the Clearing System in which such Notes have been blocked shall be deemed for such purposes not to be the holder of those Notes.

PROCEDURE FOR ISSUE OF VOTING CERTIFICATES, BLOCK VOTING INSTRUCTIONS AND PROXIES

3.	(a) Definitive Notes - not held in a Clearing System

If Notes have been issued in definitive form and are not held in an account with any Clearing System, the Fiscal Agent may from time to time prescribe further regulations (in accordance with paragraph 22) to enable the holders of such Notes to attend and/or vote at a meeting in respect of such Notes.

(b)

Global Notes and definitive Notes held in a Clearing System – Voting Certificate

A holder of a Note (not being a Note in respect of which instructions have been given to the Fiscal Agent in accordance with paragraph 3(c)) represented by a Global Note or which is in definitive form and is held in an account with any Clearing System may procure the delivery of a Voting Certificate in respect of such Note by giving notice to the Clearing System through which such Noteholder's interest in the Note is held specifying by name a person (an Identified Person ) (which need not be the Noteholder himself) to collect the Voting Certificate and attend and vote at the meeting. The relevant Voting Certificate will be made available at or shortly prior to the commencement of the meeting by the Fiscal Agent against presentation by such Identified Person of the form of identification previously notified by such holder to the Clearing System. The Clearing System may prescribe forms of identification (including, without limitation, a passport or driving licence) which it considers appropriate for these purposes. Subject to receipt by the Fiscal Agent from the Clearing System, no later than 24 Hours before the time for which such meeting is convened, of notification of the principal amount of the Notes to be represented by any such Voting Certificate and the form of identification against presentation of which such Voting Certificate should be released, the Fiscal Agent shall, without any obligation to make further enquiry, make available Voting Certificates against presentation of the form of identification corresponding to that notified.

0013117-0002372 ICM:29837691.10

(c)

Global Notes and definitive Notes held in a Clearing System – Block Voting Instruction

A holder of a Note (not being a Note in respect of which a Voting Certificate has been issued) represented by a Global Note or which is in definitive form and is held in an account with any Clearing System may require the Fiscal Agent to issue a Block Voting Instruction in respect of such Note by first instructing the Clearing System through which such Noteholder's interest in the Note is held to procure that the votes attributable to such Note should be cast at the meeting in a particular way in relation to the resolution or resolutions to be put to the meeting. Any such instruction shall be given in accordance with the rules of the Clearing System then in effect. Subject to receipt by the Fiscal Agent, no later than 24 Hours prior to the time for which such meeting is convened, of notification of the principal amount of the Notes in respect of which instructions have been given and the manner in which the votes attributable to such Notes should be cast, the Fiscal Agent shall, without any obligation to make further enquiry, appoint a proxy to attend the meeting and cast votes in accordance with those instructions.

(d)

Each Block Voting Instruction shall be deposited by the relevant Paying Agent at the place specified by the Fiscal Agent for the purpose not less than 24 Hours before the time appointed for holding the meeting at which the proxy or proxies named in the Block Voting Instruction proposes to vote, and in default the Block Voting Instruction shall not be treated as valid unless the Chairman of the meeting decides otherwise before such meeting proceeds to business. A copy of each Block Voting Instruction shall (if so requested by the Issuer) be deposited with the Issuer before the commencement of the meeting but the Issuer shall not as a result be obliged to investigate or be concerned with the validity of or the authority of the proxy or proxies named in such Block Voting Instruction.

(e)

Any vote given in accordance with the terms of a Block Voting Instruction shall be valid notwithstanding the previous revocation or amendment of the Block Voting Instruction or of any of the instructions of the relevant Noteholder or the relevant Clearing System (as the case may be) pursuant to which it was executed provided that no intimation in writing of such revocation or amendment has been received from the relevant Paying Agent by the Issuer at its registered office by the time being 24 Hours before the time appointed for holding the meeting at which the Block Voting Instruction is to be used.

CONVENING OF MEETINGS, QUORUM AND ADJOURNED MEETINGS

The Issuer or the Guarantor may at any time, and the Issuer shall upon a requisition in writing in the English language signed by the Noteholders of not less than 10 per cent. in principal amount of the Notes for the time being outstanding, convene a meeting and if the Issuer makes default for a period of seven days in convening such a meeting the same may be convened by the relevant Noteholders. Whenever the Issuer or the Guarantor is about to convene any such meeting the Issuer or the Guarantor, as the case may be, shall forthwith give notice in writing to the Fiscal Agent of the day, time and place of the meeting and of the nature of the business to be transacted at the meeting. Every such meeting shall be held at such time and place approved by the Fiscal Agent.

At least 21 Clear Days' notice specifying the place, day and hour of the meeting shall be given to the Noteholders prior to any meeting in the manner provided by Condition 12 ( Notices ). Such notice, which shall be in the English language, shall state generally the nature of the business to be transacted at the meeting thereby convened and, where an Extraordinary Resolution will be proposed at the meeting, shall either specify in such notice the terms of such resolution or state fully the effect on the Noteholders of such resolution, if passed. Such notice shall include statements as to the manner in which Noteholders may arrange for Voting Certificates or Block Voting Instructions to be issued. A copy of the notice shall be sent by post to the Issuer (unless the meeting is convened by the Issuer) and to the Guarantor (unless the meeting is convened by the Guarantor).

0013117-0002372 ICM:29837691.10

The person (who may but need not be a Noteholder) nominated in writing by the Issuer shall be entitled to take the chair at the relevant meeting but if no such nomination is made or if at any meeting the person nominated shall not be present within 15 minutes after the time appointed for holding the meeting the Noteholders present shall choose one of their number to be Chairman failing which the Issuer may appoint a Chairman. The Chairman of an adjourned meeting need not be the same person as was Chairman of the meeting from which the adjournment took place.

At any such meeting one or more Eligible Persons present and holding or representing in the aggregate more than 50 per cent. in principal amount of the Notes for the time being outstanding shall (subject as provided below) form a quorum for the transaction of business (including the passing of an Extraordinary Resolution) PROVIDED THAT at any meeting the business of which includes any Basic Terms Modification (which shall only be capable of being effected after having been approved by Extraordinary Resolution) the quorum shall be one or more Eligible Persons present and holding or representing in the aggregate not less than two-thirds of the principal amount of the Notes for the time being outstanding. No business (other than the choosing of a Chairman) shall be transacted at any meeting unless the requisite quorum be present at the commencement of the relevant business.

If within 15 minutes (or such longer period not exceeding 30 minutes as the Chairman may decide) after the time appointed for such meeting a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the meeting shall if convened upon the requisition of Noteholders be dissolved. In any other case it shall stand adjourned for such period being not less than 13 Clear Days nor more than 42 Clear Days and to such place as may be appointed by the Chairman either at or subsequent to such meeting and approved by the Fiscal Agent. If within 15 minutes (or a longer period not exceeding 30 minutes as the Chairman may decide) after the time appointed for any adjourned meeting a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the Chairman may either dissolve such meeting or adjourn the same for such period, being not less than 13 Clear Days (but without any maximum number of Clear Days) and to such place as may be appointed by the Chairman either at or subsequent to such adjourned meeting and approved by the Fiscal Agent, and the provisions of this sentence shall apply to all further adjourned such meetings.

At any adjourned meeting one or more Eligible Persons present (whatever the principal amount of the Notes so held or represented by them) shall (subject as provided below) form a quorum and shall have power to pass any resolution and to decide upon all matters which could properly have been dealt with at the meeting from which the adjournment took place had the requisite quorum been present PROVIDED THAT at any adjourned meeting the quorum for the transaction of business comprising any Basic Terms Modification shall be one or more Eligible Persons present and holding or representing in the aggregate not less than one‑third of the principal amount of the Notes for the time being outstanding.

10.	Notice of any adjourned meeting shall be given in the same manner as notice of an original meeting but as if 10 were substituted for 21 in paragraph 5 and such notice shall state the required quorum.

CONDUCT OF BUSINESS AT MEETINGS

11.

Every question submitted to a meeting shall be decided in the first instance by a show of hands. A poll may be demanded (before or on the declaration of the result of the show of hands) by the Chairman, the Issuer, the Guarantor or any Eligible Person (whatever the amount of the Notes so held or represented by him).

12.

At any meeting, unless a poll is duly demanded, a declaration by the Chairman that a resolution has been carried or carried by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

0013117-0002372 ICM:29837691.10

13.

Subject to paragraph 15 , if at any such meeting a poll is so demanded it shall be taken in such manner and, subject as provided below, either at once or after an adjournment as the Chairman directs and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded as at the date of the taking of the poll. The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the motion on which the poll has been demanded.

14.

The Chairman may, with the consent of (and shall if directed by) any such meeting, adjourn the same from time to time and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place.

15.	Any poll demanded at any such meeting on the election of a Chairman or on any question of adjournment shall be taken at the meeting without adjournment.

16.

Any director or officer of the Issuer or, as the case may be, the Guarantor, their lawyers and financial advisers and any director or officer of any of the Paying Agents may attend and speak at any meeting. Save as aforesaid, no person shall be entitled to attend and speak nor shall any person be entitled to vote at any meeting unless he is an Eligible Person. No person shall be entitled to vote at any meeting in respect of Notes which are deemed to be not outstanding by virtue of the proviso to the definition of "outstanding" in clause 1.

17.	At any meeting:

(a)

on a show of hands every Eligible Person present shall have one vote; and

(b)

on a poll every Eligible Person present shall have one vote in respect of each EUR1,000, in principal amount of the Notes held or represented by such Eligible Person.

Without prejudice to the obligations of the proxies named in any Block Voting Instruction, any Eligible Person entitled to more than one vote need not use all his votes or cast all the votes to which he is entitled in the same way.

18.	The proxies named in any Block Voting Instruction need not be holders. Nothing herein shall prevent any of the proxies named in any Block Voting Instruction from being a director, officer or representative of or otherwise connected with the Issuer.

19.	The Noteholders shall in addition to the powers set out above have the following powers exercisable only by Extraordinary Resolution (subject, in the case of an Extraordinary Resolution to be proposed at a meeting, to the provisions relating to quorum contained in paragraphs 7 and 9) namely:

(a)

power to sanction any compromise or arrangement proposed to be made between the Issuer the Guarantor and the Noteholders and Couponholders or any of them;

(b)

power to approve any abrogation, modification, compromise or arrangement in respect of the rights of the Noteholders and Couponholders against the Issuer or the Guarantor against any other or others of them or against any of their property whether such rights arise under this Agreement, the Notes or the Coupons or otherwise;

(c)

power to agree to any modification of the provisions contained in this Agreement or the Conditions, the Notes, the Guarantee or the Deed of Covenant which is proposed by the Issuer or the Guarantor;

(d)

power to give any authority or sanction which under the provisions of this Schedule or the Notes is required to be given by Extraordinary Resolution;

0013117-0002372 ICM:29837691.10

(e)

power to appoint any persons (whether Noteholders or not) as a committee or committees to represent the interests of the Noteholders and to confer upon such committee or committees any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution;

(f)

power to approve any scheme or proposal for the exchange or sale of the Notes for, or the conversion of the Notes into, or the cancellation of the Notes in consideration of, shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities of the Issuer or the Guarantor or any other company formed or to be formed, or for or into or in consideration of cash, or partly for or into or in consideration of such shares, stock, notes, bonds, debentures, debenture stock and/or other obligations and/or securities as stated above and partly for or into or in consideration of cash; and

(g)

power to approve the substitution of any entity for the Issuer and/or the Guarantor (or any previous substitute) as principal debtor and/or guarantor, as the case may be.

20.

Any Extraordinary Resolution (i) passed at a meeting of the Noteholders duly convened and held (ii) passed as an Extraordinary Resolution in writing or (iii) passed by way of electronic consents given by holders through the relevant Clearing System(s), in accordance with the provisions of this Schedule shall be binding upon all the Noteholders whether present or not or whether or not represented at any meeting and whether or not voting on such Extraordinary Resolution and upon all Couponholders and each of them shall be bound to give effect to the resolution accordingly and the passing of any such Extraordinary Resolution shall be conclusive evidence that the circumstances justify its passing. Notice of the result of voting on any Extraordinary Resolution duly considered by the Noteholders shall be published in accordance with Condition 12 ( Notices ) by the Issuer within 14 days of the result being known PROVIDED THAT non-publication of such notice shall not invalidate such result.

21.

Minutes of all resolutions and proceedings at every meeting shall be made and entered in books to be from time to time provided for that purpose by the Issuer and any such minutes, if purporting to be signed by the Chairman of the meeting at which such resolutions were passed or proceedings transacted shall be conclusive evidence of the matters contained in them and, until the contrary is proved, every such meeting in respect of the proceedings of which minutes have been made shall be deemed to have been duly held and convened and all resolutions passed or proceedings transacted at the meeting to have been duly passed or transacted.

22.

Subject to all other provisions contained in this Schedule, the Fiscal Agent may without the consent of the Issuer, the Guarantor, the Noteholders or the Couponholders prescribe any other regulations regarding the calling and/or the holding of meetings of Noteholders and attendance and voting at them as the Fiscal Agent may in its sole discretion think fit (including, without limitation, the substitution for periods of 24 hours and 48 hours referred to in this Schedule of shorter periods). Any regulations prescribed by the Fiscal Agent may but need not reflect the practices and facilities of any relevant clearing system. Notice of any other regulations may be given to Noteholders in accordance with Condition 12 ( Notices ) and/or at the time of service of any notice convening a meeting.

0013117-0002372 ICM:29837691.10

Schedule 7

Additional Duties of the Fiscal Agent

The Fiscal Agent and the Issuer will comply with the following provisions:

1.	The Fiscal Agent will inform each of Euroclear and Clearstream, Luxembourg (the ICSDs ), through the common service provider appointed by the ICSDs to service the Notes (the CSP ), of the initial issue outstanding amount ( IOA ) for the Notes on or prior to the issue date of the Notes.

If any event occurs that requires a mark up or mark down of the records which an ICSD holds for its customers to reflect such customers' interest in the Notes, the Fiscal Agent will (to the extent known to it) promptly provide details of the amount of such mark up or mark down, together with a description of the event that requires it, to the ICSDs (through the CSP) to ensure that the IOA of the Notes remains at all times accurate.

3.	The Fiscal Agent will at least once every month reconcile its record of the IOA of the Notes with information received from the ICSDs (through the CSP) with respect to the IOA maintained by the ICSDs for the Notes and will promptly inform the ICSDs (through the CSP) of any discrepancies.

4.	The Fiscal Agent will promptly assist the ICSDs (through the CSP) in resolving any discrepancy identified in the IOA of the Notes.

5.	The Fiscal Agent will promptly provide to the ICSDs (through the CSP) details of all amounts paid by it under the Notes (or, where the Notes provide for delivery of assets other than cash, of the assets so delivered).

6.	The Fiscal Agent will (to the extent known to it) promptly provide to the ICSDs (through the CSP) notice of any changes to the Notes that will affect the amount of, or date for, any payment due under the Notes.

7.	The Fiscal Agent will (to the extent known to it) promptly provide to the ICSDs (through the CSP) copies of all information that is given to the holders of the Notes.

8.	The Fiscal Agent will promptly pass on to the Issuer all communications it receives from the ICSDs directly or through the CSP relating to the Notes.

9.	The Fiscal Agent will (to the extent known to it) promptly notify the ICSDs (through the CSP) of any failure by the Issuer to make any payment or delivery due under the Notes when due.

0013117-0002372 ICM:29837691.10

Signat ories

AUTOLIV, INC.

By:		/s/ Mats Backman

AUTOLIV ASP, INC.

By:		/s/ Christian Hanke

HSBC BANK PLC

By:		/s/ Jenny Pennell

0013117-0002372 ICM:29837691.10

Exhibit 10.4

EXECUTION VERSION

FACILITIES AGREEMENT

24 May 2018

US$800,000,000

for

AUTOLIV, INC., and AUTOLIV ASP, INC.

with

J.P. MORGAN SECURITIES PLC and SKANDINAVISKA ENSKILDA BANKEN AB (publ)

as active bookrunners and co-ordinators

and

SKANDINAVISKA ENSKILDA BANKEN AB (publ)

as Facility Agent

Allen & Overy LLP

Contents

Clause		Page

1.	Interpretation	1
2.	Facilities	17
3.	Purpose	20
4.	Conditions Precedent	20
5.	Loans	21
6.	Certain Funds	22
7.	Repayment	24
8.	Prepayment and Cancellation	24
9.	Interest Periods	28
10.	Interest	29
11.	Changes to the Calculation of Interest	30
12.	Optional Currencies	31
13.	Payments	34
14.	Taxes	37
15.	Increased Costs	43
16.	Illegality	44
17.	Guarantee	44
18.	Representations and Warranties	49
19.	Undertakings	53
20.	Default	62
21.	The Facility Agent and the Co-ordinators	65
22.	Fees	73
23.	Expenses	75
24.	Stamp Duties	75
25.	Indemnities	75
26.	Evidence and Calculations	76
27.	Amendments and Waivers	76
28.	Changes to the Parties	79
29.	Disclosure of Information	82
30.	Confidentiality of Funding Rates and Reference Bank Quotations	84
31.	Set-Off	86
32.	Pro Rata Sharing	86
33.	Severability	87
34.	Counterparts	87
35.	Notices	87
36.	Language	89
37.	Jurisdiction	90
38.	Governing Law	91
39.	Integration	91
40.	Waiver of immunity	91
41.	Waiver of Jury Trial	91
42.	USA Patriot Act	92


0010023-0003304 BK:44601953.9

Schedule

1.	Commitments	93
2.	Conditions Precedent Documents	94
3.	Form of Request	96
4.	Form of Novation Certificate	97
5.	Form of Compliance Certificate	98
6.	Form of Increase Confirmation	99
7.	Form of Extension Request	101


0010023-0003304 BK:44601953.9

THIS AGREEMENT is dated 24 May 2018 and is made BETWEEN :

(1)	AUTOLIV, INC. (incorporated under the laws of the State of Delaware, USA) (in this capacity, the Parent );

(2)	AUTOLIV, INC. (incorporated under the laws of the State of Delaware, USA) and AUTOLIV ASP, INC. (incorporated under the laws of the State of Indiana, USA) (each a Guarantor and together, the Guarantors );

(3)	AUTOLIV, INC. (incorporated under the laws of the State of Delaware, USA) (in this capacity, the Borrower );

(4)	J.P. MORGAN SECURITIES PLC and SKANDINAVISKA ENSKILDA BANKEN AB (publ) as active bookrunners and co-ordinators (the Co-ordinators);

(5)	THE PERSONS NAMED ON THE SIGNATURE PAGES TO THIS AGREEMENT as mandated lead arrangers (the Mandated Lead Arrangers );

(6)	THE FINANCIAL INSTITUTIONS listed in Schedule 1 as lenders (the Original Lenders ); and

(7)	SKANDINAVISKA ENSKILDA BANKEN AB (publ) as facility agent (the Facility Agent ).

IT IS AGREED as follows:

1.	Inter pretation

1.1	Definitions

In this Agreement:

Acceptable Bank means a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or A3 or higher by Moody's Investor Services Limited or a comparable rating from an internationally recognised credit rating agency.

Affiliate means a Subsidiary or a holding company of a person or any other Subsidiary of that holding company.

AFM means The Netherlands Authority for the Financial Markets ( Stichting Autoriteit Financiële Markten ).

Available Commitment means a Lender's Commitment minus:

(a)

the Original Dollar Amount of its participation in any outstanding Loans; and

(b)

in relation to any proposed drawdown, the Original Dollar Amount of its participation in any Loans that are due to be made on or before the proposed Drawdown Date,

other than that Lender's participation in any Loans that are due to be repaid or prepaid on or before the proposed Drawdown Date.

Availability Period means the period from and including the date of this Agreement to and including the date falling four months after the date of this Agreement.


0010023-0003304 BK:44601953.9	1

Basel II means the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel II: International Convergence of Capital Measurement and Capital Standards: a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement.

Basel III means:

(a)

the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(b)

the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(c)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".

Board means the Board of Governors of the Federal Reserve System of the United States of America or any successor thereof.

Break Costs means the amount (if any) by which:

(a)

the interest (other than the part attributable to the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

Business Day means a day (other than a Saturday or a Sunday):

(a)

on which banks are open for general business in:

(i)

London, Stockholm and New York; and

(ii)

in relation to a transaction involving an Optional Currency other than Sterling, the principal financial centre of the jurisdiction of that Optional Currency; and

(b)

in relation to a transaction involving Euros, which is a TARGET Day.

Certain Funds Period has the meaning given to it in Clause 6 (Certain Funds).


0010023-0003304 BK:44601953.9	2

Change in Law means the occurrence, after the date of this Agreement, of any of the following:

(a)

the adoption or taking effect of any law, rule, regulation or treaty;

(b)

any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority;

(c)

the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; or

(d)

the implementation or application of or compliance with Basel III or CRD IV or any other law or regulation which implements Basel III or CRD IV (whether such implementation, application or compliance is by a Governmental Authority, Finance Party or any of its Affiliates.

Commitment means:

(a)

in relation to a Lender which is a Lender on the date of this Agreement, the aggregate of the amounts in US Dollars set opposite its name in Schedule 1 and the amount of any other Lender's Commitment acquired by it under Clause 28 (Changes to the Parties) or assumed by it in accordance with Clause 2.6 (Increase); and

(b)

in relation to a Lender which becomes a Lender after the date of this Agreement, the amount of any other Lender's Commitment acquired by it under Clause 28 (Changes to the Parties) or assumed by it in accordance with Clause 2.6 (Increase),

to the extent not cancelled, reduced or transferred under this Agreement.

Compliance Certificate means a certificate substantially in the form set out in Schedule 5 (Form of Compliance Certificate).

CRD IV means:

(a)

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and

(b)

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms,

and as either of these may be amended, supplemented or restated from time to time.

Dangerous Substance means any radioactive emissions and any natural or artificial substance (whether in solid or liquid form or in the form of a gas or vapour and whether alone or in combination with any other substance) capable of causing harm to man or any other living organism or damaging the environment or public health or welfare including but not limited to any controlled, special, hazardous, toxic, radioactive or dangerous waste.

DCB means The Dutch Central Bank ( De Nederlandsche Bank N.V. ).

Default means an Event of Default or an event which, with the giving of notice, lapse of time, determination of materiality or fulfilment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default.


0010023-0003304 BK:44601953.9	3

Defaulting Lender means any Lender:

(a)

which has failed to make its participation in a Loan available or has notified the Facility Agent that it will not make its participation in a Loan available by the Drawdown Date of that Loan in accordance with Clause 5.3 (Advance of Loans);

(b)

which has otherwise rescinded or repudiated a Finance Document; or

(c)

with respect to which an Insolvency Event has occurred and is continuing,

unless, in the case of paragraph (a) above:

(i)

its failure to pay is caused by:

(A)

administrative or technical error; or

(B)

a Disruption Event; and,

payment is made within three Business Days of its due date; or

(ii)

the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.

DFSA means The Dutch Financial Supervision Act ( Wet op het financieel toezicht , Wft ) and all rules promulgated thereunder and pursuant thereto as well as communications and published guidelines of the DCB and the AFM.

Disruption Event means either or both of:

(a)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i)

from performing its payment obligations under the Finance Documents; or

(ii)

from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

Drawdown Date means the date of the advance of a Loan.

Environmental Claim means any claim by any person as a result of or in connection with any violation of Environmental Law or any Environmental Contamination which could give rise to any remedy or penalty (whether interim or final) or liability for any Obligor or any Finance Party which could reasonably be expected to have a material adverse effect.


0010023-0003304 BK:44601953.9	4

Environmental Contamination means each of the following and their consequences:

(a)

any release, emission, leakage, or spillage of any Dangerous Substance into any part of the environment; or

(b)

any accident, fire, explosion or sudden event which is directly or indirectly caused by or attributable to any Dangerous Substance; or

(c)

any other pollution of the environment.

Environmental Law means any national or supranational law, regulation or directive concerning the protection of human health or the environment or concerning Dangerous Substances.

Environmental License means any authorisation by any Environmental Law.

ERISA means the United States Employee Retirement Income Security Act of 1974, as amended.

ERISA Affiliate means each trade or business, whether or not incorporated, that would be treated as a single employer with any Obligor under section 414 of the US Code. When any provision of this Agreement relates to a past event, the term ERISA Affiliate includes any person that was an ERISA Affiliate of an Obligor at the time of that past event.

EURIBOR means, in relation to any Loan in Euro:

(a)

the applicable Screen Rate as of 11.00 a.m. (Brussels time) on the Rate Fixing Day for Euro and for a period equal in length to the Interest Period of that Loan; or

(b)

as otherwise determined pursuant to Clause 11.1 (Unavailability of Screen Rate),

and if, in either case, that rate is less than zero, EURIBOR shall be deemed to be zero.

Euro means the single currency of the Participating Member States.

Event of Default means an event specified as such in Clause 20.1 (Events of Default).

Extension Request has the meaning set out in paragraph (a) of Clause 2.7 (Extension option).

Facility means the US$800,000,000 multi currency term loan facility made available under this Agreement as set out in Clause 2.1 (The Facility).

Facility Agent's Spot Rate of Exchange means the Facility Agent's spot rate of exchange for the purchase of the relevant Optional Currency in such foreign exchange market as the Facility Agent selects, in each case with US Dollars at or about 11.00 a.m. on a particular day.

Facility Office means the office(s) notified by a Lender to the Facility Agent:

(a)

on or before the date it becomes a Lender; or

(b)

by not less than five Business Days' notice,

as the office(s) through which it will perform all or any of its obligations under this Agreement.


0010023-0003304 BK:44601953.9	5

FATCA means:

(a)

Sections 1471 to 1474 of the US Code or any associated regulations;

(b)

any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

(c)

any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the United States Internal Revenue Service or any Governmental Authority.

FATCA Application Date means:

(a)

in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the US Code (which relates to payments of interest and certain other payments from sources within the USA), 1 July 2014;

(b)

in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the US Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the USA), 1 January 2019; or

(c)

in relation to a "passthru payment" described in section 1471(d)(7) of the US Code not falling within paragraphs (a) or (b) above, 1 January 2019,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.

FATCA Exempt Party means a Party that is entitled to receive payments free from any FATCA Deduction.

Fee Letters means:

(a)

the letter from the Co-ordinators to the Obligors and the letters from the Facility Agent to the Obligors, each dated on or about the date of this Agreement and setting out (among other matters) the amount of the fees referred to in Clause 22 (Fees); and

(b)

any agreement setting out fees payable by the Parent to a Finance Party referred to in paragraph (e) of Clause 2.6 (Increase) of this Agreement or under any other Finance Document.

Finance Document means this Agreement, the Fee Letters, any Novation Certificate, any Request, any Extension Request or any other document designated as such by the Facility Agent and the Obligors' Agent.

Finance Party means the Facility Agent, a Co-ordinator or a Lender.


0010023-0003304 BK:44601953.9	6

Financial Indebtedness means any indebtedness in respect of:

(a)

monies borrowed;

(b)

any debenture, bond, note, loan stock or other security;

(c)

any acceptance credit;

(d)

receivables sold or discounted (otherwise than on a non-recourse basis);

(e)

the acquisition cost of any asset to the extent payable before or after the time of acquisition or possession by the party liable where the advance or deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset;

(f)

any lease entered into primarily as a method of raising finance or financing the acquisition of the asset leased;

(g)

any currency swap or interest swap, cap or collar arrangement or other derivative instrument (and when calculating the value of any such transaction, only the marked-to-market value shall be taken into account);

(h)

any amount raised under any other transaction having the commercial effect of a borrowing or raising of money; or

(i)

any guarantee, indemnity or similar assurance against financial loss of any person.

Funding Rate means any individual rate notified by a Lender to the Facility Agent pursuant to paragraph (a)(ii) of Clause 11.4 (Cost of funds).

Governmental Authority means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

Group means the Parent and its Subsidiaries.

Impaired Agent means the Facility Agent at any time when:

(a)

it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

(b)

the Facility Agent otherwise rescinds or repudiates a Finance Document;

(c)

(if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of Defaulting Lender; or

(d)

an Insolvency Event has occurred and is continuing with respect to the Facility Agent;

unless, in the case of paragraph (a) above:

(i)

its failure to pay is caused by:

(A)

administrative or technical error; or


0010023-0003304 BK:44601953.9	7

(B)

a Disruption Event; and

payment is made within three Business Days of its due date; or

(ii)

the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

Increase Confirmation means a confirmation substantially in the form set out in Schedule 6 (Form of Increase Confirmation).

Increase Lender has the meaning given to that term in Clause ‎2.6 (Increase).

Initial Termination Date means the date falling six months after the date of this Agreement.

Insolvency Event in relation to a Finance Party means that the Finance Party:

(a)

is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(b)

becomes insolvent or is unable to pay its debts, in each case under the laws of any relevant jurisdiction applicable to that Finance Party, or fails or admits in writing its inability generally to pay its debts as they become due;

(c)

makes a general assignment, arrangement or composition with or for the benefit of its creditors;

(d)

institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, all other than by way of an Undisclosed Administration, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;

(e)

has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and:

(i)

results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or

(ii)

is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;

(f)

has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(g)

seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets, all other than by way of an Undisclosed Administration;


0010023-0003304 BK:44601953.9	8

(h)

has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;

(i)

causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or

(j)

takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

Interest Period means each period determined in accordance with Clause 9 (Interest Periods).

Interpolated Screen Rate means, in relation to any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

(a)

the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and

(b)

the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,

each as of:

(i)

in relation to any Loan in Euro, 11.00 a.m. (Brussels time); or

(ii)

in relation to any other Loan, 11.00 a.m.,

in each case, on the Rate Fixing Day for the currency of that Loan.

Lender means, subject to Clause 28 (Changes to the Parties) and Clause 2.6 (Increase), a bank or financial institution listed in Schedule 1 in its capacity as a provider of Loans.

LIBOR means, in relation to any Loan:

(a)

the applicable Screen Rate as of 11.00 a.m. on the applicable Rate Fixing Day for the currency of that Loan and for a period equal in length to the Interest Period of that Loan; or

(b)

as otherwise determined pursuant to Clause 11.1 (Unavailability of Screen Rate),

and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

Loan means, subject to Clause 12 (Optional Currencies), the principal amount of each borrowing by the Borrower under this Agreement or the principal amount outstanding of that borrowing.

Majority Lenders means, subject to Clause 27.3 (Disenfranchisement of Defaulting Lenders) at any time, a Lender or Lenders whose Commitments aggregate more than 66 ² / ₃ % of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66 ² / ₃ % of the Total Commitments immediately prior to the reduction).

Margin means the percentage rate per annum determined in accordance with Clause 10.2 (Adjustment of Margin).


0010023-0003304 BK:44601953.9	9

Margin Stock has the meaning assigned to such term in Regulation U of the Bo ard.

Material Subsidiary means any Subsidiary of the Parent:

(a)

(i) the book value of whose assets (consolidated if it itself has Subsidiaries) equals or exceeds:

(A)

ten per cent.; or

(B)

during the Certain Funds Period and with regards to Clause 20.6 (Insolvency) only, five per cent.,

of the book value of the consolidated total assets of the Group; or

(ii)

whose revenues (consolidated if it itself has Subsidiaries) equal or exceed:

(A)

ten per cent.; or

(B)

during the Certain Funds Period and with regard to Clause 20.6 (Insolvency) only, five per cent.,

of the revenues of the Group taken as a whole; or

(iii)

whose trading profits (consolidated if it itself has Subsidiaries) before interest and tax equal or exceed:

(A)

ten per cent.; or

(B)

during the Certain Funds Period and with regard to Clause 20.6 (Insolvency) only, five per cent.,

of the trading profits before interest and tax of the Group as a whole,

as determined by reference to the most recent accounts of the Subsidiary and the most recent consolidated accounts of the Group; or

(b)

any Subsidiary of the Parent which becomes a member of the Group after the date of the latest consolidated accounts of the Group at the time of determination and which would fulfil any of the tests in (a)(i), (ii) or (iii) above if tested on the basis of its latest accounts (consolidated if it itself has Subsidiaries) and those latest accounts of the Group; or

(c)

prior to the delivery of each set of accounts pursuant to Clause 19.2 (Financial information), any Subsidiary of the Parent to which has been transferred (whether by one transaction or a series of transactions, related or not) the whole or substantially the whole of the assets of a Subsidiary which immediately prior to such transaction or any of such transactions was a Material Subsidiary.

Moody's means Moody's Investors Services Limited, or any successor to its rating business.

Multiemployer Plan means a "multiemployer plan" within the meaning of section 3(37) or 4001(a)(3) of ERISA.

New Lender has the meaning given to it in paragraph (a) of Clause 28.2 (Transfers by Lenders).


0010023-0003304 BK:44601953.9	10

Novation Certificate has the meaning given to it in Clause 28.3 ( Procedure for novations ).

Obligor means the Parent, each Guarantor and the Borrower.

Obligors' Agent means the Parent, or such other Obligor from time to time nominated by the Obligors' Agent to replace it as Obligors' Agent and approved for such purpose by the Facility Agent.

Optional Currency means Euro provided it is freely available in the amount required and convertible into US Dollars in the Stockholm interbank market on the Rate Fixing Date and the Drawdown Date.

Original Dollar Amount in relation to a Loan, means:

(a)

if that Loan is denominated in US Dollars, the amount of that Loan; or

(b)

if that Loan is denominated in an Optional Currency, the equivalent in US Dollars of the amount of that Loan, calculated at the Facility Agent's Spot Rate of Exchange one Business Day before the Rate Fixing Day applicable to that Loan.

Original Group Accounts means the audited consolidated accounts of the Group for the year ended 31 December 2017.

Participating Member State means a member state of the European Union that adopts a single currency in accordance with the legislation of the European Union relating to European Economic and Monetary Union.

Party means a party to this Agreement.

Plan means an "employee benefit plan" within the meaning of section 3(3) of ERISA maintained by an Obligor or any ERISA Affiliate currently or at any time within the last five years, or to which the an Obligor or any ERISA Affiliate is required to make payments or contributions or has made payments or contributions within the past five years.

Rate Fixing Day means:

(a)

the second Business Day before the first day of an Interest Period for a Loan denominated in any currency other than Sterling; or

(b)

in the case of a Loan denominated in Sterling only, the first day of the Interest Period for that Loan,

or such other day as is generally treated as the rate fixing day by market practice in the relevant interbank market for leading banks to give quotations for deposits in the relevant currency for delivery on the first day of the relevant Interest Period, as determined by the Facility Agent.

Rating Agency means Moody's or Standard & Poor's.

Reference Bank Quotation means any quotation supplied to the Facility Agent by a Reference Bank.

Reference Bank Rate means:

(a)

the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request by the Reference Banks:


0010023-0003304 BK:44601953.9	11

(i)

in relation to LIBOR:

(A)

(other than where paragraph (B) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

(B)

if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator; or

(ii)

in relation to EURIBOR:

(A)

(other than where paragraph (B) below applies) as the rate at which the relevant Reference Bank believes one prime bank is quoting to another prime bank for interbank term deposits in Euro within the Participating Member States for the relevant period; or

(B)

if different, as the rate (if any and applied to the relevant Reference Bank and the relevant period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator.

Reference Banks means, subject to Clause 28.7 (Reference Banks), such banks as the Facility Agent may appoint in consultation with the Borrower, provided that no person may be appointed as Reference Bank without its consent.

Repeating Representations means each of the representations set out in Clause 18 (with the exception of Clause 18.10 (Taxes on payments), Clause 18.21 (Stamp duties) and Clause 18.23 (Material adverse change)).

Reportable Event means any of the events set forth in section 4043 of ERISA or the related regulations as to which the notice requirement has not been waived by the PBGC.

Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

Request means a request made by the Obligors' Agent for a Loan, substantially in the form of Schedule 3.

Restricted Margin Stock means Margin Stock owned by any Obligor or any member of the Group, which represents not more than 33⅓ per cent. of the aggregate value (determined in accordance with Regulation U of the Board), on a consolidated basis, of the assets of each Obligor and all members of the Group (other than Margin Stock) that are subject to the provisions of Clause 19 (Undertakings) (including, without limitation, Clauses 19.8 (Negative pledge) and 19.9 (Transactions similar to security)).

Sanctions Authority means:

(a)

the US Government, including the US Department of the Treasury (including its Office of Foreign Assets Control), the US Department of State, and the US Department of Commerce;

(b)

the United Nations Security Council;


0010023-0003304 BK:44601953.9	12

(c)

the European Union (includ ing sanctions imposed against certain states, organisations and individuals under the European Union’s Common Foreign and Security Policy);

(d)

the United Kingdom (including Her Majesty’s Treasury);

(e)

Japan; or

(f)

the Swedish Government,

and any authority acting for on behalf of any of such entity in connection with administering and enforcing the Sanctions Laws.

Sanctions Laws means the economic or financial sanctions laws and/or sanctions regulations, sanctions-related trade embargoes and/or restrictive measures, or sanctions-related prohibitions imposed, administered, enacted or enforced from time to time by any Sanctions Authority.

Sanctions List means any list of persons or entities published in connection with Sanctions Laws or public announcements of Sanctions Laws or public designation or public identification made by or on behalf of any Sanctions Authority (including, providing such lists and information are publicly available, in the case of Her Majesty’s Treasury, the “Consolidated List of Financial Sanctions Targets and the Investment Ban List”, and, in the case of the Office of Foreign Assets Control of the United States Department of the Treasury, the “Specially Designated Nationals and Blocked Persons” list and the “Foreign Sanctions Evaders” list); or, providing such lists and information are publicly available, by any national authority implementing at a national level the published lists prescribed by the United Nations Security Council or the European Union, provided that the scope of any such national implementation shall not exceed the scope of such published lists.

Sanctions Restricted Party means a person:

(a)

that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person or a country or territory that is subject to nationwide or territory wide Sanctions Laws which directly apply to that person);

(b)

that is directly or indirectly owned or controlled by or, acting on behalf of, a person referred to in (a) above;

(c)

with whom a national of any country that is subject to the jurisdiction of, or otherwise bound by the prescriptions of, a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities; or

(d)

or any person otherwise the subject of any sanctions.

Screen Rate means:

(a)

in relation to LIBOR, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed (before any correction, recalculation or republication by the administrator) on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate); and


0010023-0003304 BK:44601953.9	13

(b)

in relation to EURIBOR, the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed (before any correction, recalculation or republication by the administrator) on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate),

or, in each case, on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If any such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Obligors’ Agent and the Lenders.

Security Interest means any mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.

SEK and Swedish Kronor means the lawful currency for the time being of Sweden.

Separate Loan has the meaning given to that term in Clause 7.1 (Repayment).

Signing Date means the date of this Agreement.

Standard & Poor's means Standard & Poor's Credit Market Services Limited, or any successor to its rating business.

Sterling means the currency for the time being of the United Kingdom.

Subsidiary means an entity from time to time of which a person has direct or indirect control or owns directly or indirectly more than fifty per cent. (50%) of the share capital or similar right of ownership.

TARGET Day means a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.

Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

Total Commitments means the aggregate for the time being of the Commitments of all the Lenders, being US$800,000,000 at the date of this Agreement.

Termination Date means the Initial Termination Date, subject to an extension pursuant to Clause 2.7 (Extension option).

Transfer Date has the meaning given to it in paragraph (c) of Clause 28.3 (Procedure for novations).

Undisclosed Administration means an undisclosed administration ( stille curatele ) applicable to a Lender, imposed by the DCB under or based on section 1:76 of the DFSA, as to Lenders which are supervised by the DCB under the DFSA and in relation to which the DCB has not publicly disclosed the appointment of a custodian ( curator ) with regard to the relevant Lender..

Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents.


0010023-0003304 BK:44601953.9	14

Unrestricted Margin Stock means any Margin Stock owned by either Obligor or any member of the Group which is not Restricted Margin Stock.

US Code means the United States Internal Revenue Code of 1986.

USA means the United States of America.

US Dollars and US$ means the currency for the time being of the USA

US Tax Obligor means:

(a)

the Borrower which is resident for tax purposes in the USA; or

(b)

an Obligor some or all of whose payments under the Finance Documents are from sources within the USA for USA federal income tax purposes.

VAT means:

(a)

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(b)

any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

Veoneer means Veoneer, Inc..

1.2	Construction

(a)	In this Agreement, unless the contrary intention appears, a reference to:

(i)

an amendment includes a supplement, novation or re-enactment and amended is to be construed accordingly;

(ii)

assets includes present and future properties, revenues and rights of every description;

(iii)

an authorisation includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration and notarisation;

(iv)

know your customer requirements are the identification checks that a Finance Party requests in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer;

(v)

a Default or an Event of Default is “continuing” if it has not been remedied or waived;

(vi)

a material adverse effect means:

(A)

a material adverse effect on the business or financial condition of the Parent or the Group as a whole; or

(B)

a material adverse effect on the ability of any Obligor to perform its payment obligations under any of the Finance Documents.


0010023-0003304 BK:44601953.9	15

(vii)

a month is a reference to a period starting on one day in a calendar month and ending on the numeri cally corresponding day in the next calendar month, except that:

(A)

if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that calendar month; or

(B)

if an Interest Period commences on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which it is to end;

(viii)

a person includes any individual, company, unincorporated association or body of persons (including a partnership, joint venture or consortium), government, state, agency, international organisation or other entity;

(ix)

a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

(x)

winding up also includes amalgamation, reconstruction, reorganisation, administration, dissolution, liquidation, merger or consolidation and any equivalent or analogous procedure under the law of any jurisdiction (but, for the avoidance of doubt, reorganisation does not include a mere transfer of assets from one member of the Group to another whether the transferor continues to exist);

(xi)

a provision of law is a reference to that provision as amended or re-enacted;

(xii)

a Clause or a Schedule is a reference to a clause of or a schedule to this Agreement;

(xiii)

a person includes its successors, transferees and assigns;

(xiv)

a Finance Document or another document is a reference to that Finance Document or other document as amended; and

(xv)

a time of day is a reference to London time.

(b)	Unless the contrary intention appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

(c)	The index to and the headings in this Agreement are for convenience only and are to be ignored in construing this Agreement.

(d)	(i) Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999; and

(ii)

notwithstanding any term of any Finance Document, the consent of any third party is not required for any variation (including any release or compromise of any liability order) or termination of that Finance Document.


0010023-0003304 BK:44601953.9	16

2.	Facil ities

2.1	The Facility

Subject to the terms of this Agreement, the Lenders grant to the Borrower a multicurrency term loan facility under which the Lenders will make Loans to the Borrower denominated in US Dollars or Optional Currencies.

2.2	Facility Limits

The aggregate Original Dollar Amount of all outstanding Loans shall not at any time exceed the Total Commitments.

2.3	Finance Parties’ rights and obligations

(a)

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

(b)

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Party's participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Obligor.

(c)	A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.

2.4	Appointment of Obligors' Agent

(a)

Each Obligor irrevocably authorises the Obligors' Agent to give all notices (including, without limitation, Requests and notices of prepayment and cancellation) and instructions and make such agreements (including, without limitation, to confirm the continuation of any guarantees or indemnities following any amendment or waiver, however fundamental, or in relation to an alternative basis for determining the rate of interest and/or funding applicable to a Loan (as described in paragraph (b) of Clause 11.4 (Cost of funds)) expressed to be capable of being given or made by the Obligors' Agent in this Agreement.

(b)

The authorisation of the Obligors' Agent shall be effective notwithstanding that the exercise of the Obligors' Agent's authority may affect the Obligors without further reference to or the consent of the Obligors. Each Obligor shall, as regards the Facility Agent and each Lender, be bound by any action taken by the Obligors' Agent on its behalf as though that Obligor had itself taken such action.


0010023-0003304 BK:44601953.9	17

2.5	Change of currency

(a)	Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(i)

any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent; and

(ii)

any translation from one currency or currency unit to another shall be at the official conversion rate recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent acting reasonably.

(b)

If a change in any currency of a country occurs, this Agreement will be amended to the extent the Facility Agent specifies to be necessary to reflect the change in currency, to put the Finance Parties in the same position, so far as possible, that it would have been in if no change in currency had occurred and to comply with any generally accepted conventions and market practice in the relevant interbank market.

2.6

Increase

(a)	The Parent may by giving prior notice to the Facility Agent by no later than the date falling ten Business Days after the effective date of a cancellation of:

(i)

the Available Commitments of a Defaulting Lender in accordance with Clause 8.4 (Right of cancellation in relation to a Defaulting Lender); or

(ii)

the Commitments of a Lender in accordance with Clause 16 (Illegality),

request that the Total Commitments be increased (and the Total Commitments under the Facility shall be so increased) in an aggregate amount in US Dollars of up to the amount of the Available Commitments or Commitments so cancelled as follows:

(A)

the increased Commitments will be assumed by one or more Lenders or other banks or financial institutions (each an Increase Lender ) selected by the Parent (each of which shall not be a member of the Group) and each of which confirms its willingness to assume (whether in the Increase Confirmation or otherwise) and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender;

(B)

each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender;

(C)

each Increase Lender shall become a Party as a Lender and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender;

(D)

the Commitments of the other Lenders shall continue in full force and effect; and


0010023-0003304 BK:44601953.9	18

(E)

any increase in the Total Commitments shall take effect on the date specified by the Parent in the notice referred to above or any later date on which the conditions set out in paragraph (b) below are satisfied.

(b)	An increase in the Total Commitments will only be effective on:

(i)

the execution by the Facility Agent of an Increase Confirmation from the relevant Increase Lender; and

(ii)

in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase, the performance by the Facility Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Facility Agent shall promptly notify to the Parent and the Increase Lender;

(c)

Each Increase Lender, by executing the Increase Confirmation, confirms that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.

(d)

Unless the Facility Agent otherwise agrees or the increased Commitment is assumed by an existing Lender or Lenders, the Parent shall, on the date upon which the increase takes effect, pay to the Facility Agent (for its own account) a fee of US$2,500 and the Parent shall promptly on demand pay the Facility Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.6.

(e)	The Parent may pay to the Increase Lender a fee in the amount and at the times agreed between the Parent and the Increase Lender in a separate Fee Letter.

(f)	Paragraphs (g), (h) and (i) of Clause 28.2 (Transfers by Lenders) shall apply mutatis mutandis in this Clause ‎2.6 in relation to an Increase Lender as if references in that Clause to:

(i)

an Existing Lender were references to all the Lenders immediately prior to the relevant increase;

(ii)

the New Lender were references to that Increase Lender ; and

(iii)

a re-transfer were references to a transfer .

2.7	Extension option

The Parent may request each Lender to extend the Termination Date as follows.

(a)

The Parent may, by delivering a written request to that effect in the form set out in Schedule 7 (Form of Extension Request) (the Extension Request ) to the Facility Agent not earlier than 60 days and not later than 45 days before the Initial Termination Date request an extension of the original Termination Date by six months.

(b)

The Extension Request delivered pursuant to paragraph (a) above must confirm that, as at the date of that Extension Request:

(i)

no Default is outstanding or, in the Parent’s opinion, might result from the extension requested in that Extension Request; and

(ii)

the Repeating Representations are correct in all material respects;


0010023-0003304 BK:44601953.9	19

(c)

The Facility Agent must promptly notify the Lenders of the receipt of an Extension Request.

(d)

Each Lender shall respond in writing to the Extension Request no later than 30 days after receipt thereof. If a Lender fails to respond to the Facility Agent within this time period, it will be deemed to have refused the Extension Request.

(e)

The Termination Date will be extended by the period so requested upon the Initial Termination Date provided that:

(i)

each Lender has agreed to extend its Commitments for the period so requested;

(ii)

the fee payable pursuant to paragraph (a) of Clause 22.4 (Extension Fee) in respect of that extension has been paid; and

(iii)

no Default is continuing, and the Repeating Representations are correct in all material respects, on the Initial Termination Date.

(f)

The Facility Agent shall notify the Lenders and the Parent of any extension taking effect in accordance with paragraph (d) above.

(g)

The Extension Request under this Clause 2.7 is irrevocable.

Purpose

(a)	The Borrower shall apply each Loan towards funding a capital injection into Veoneer.

(b)	Without affecting the obligations of any Obligor in any way, no Finance Party is bound to monitor or verify the application of any Loan.

4.	Conditions Precedent

4.1	Documentary conditions precedent

(a)	The Obligors' Agent may not deliver the first Request until the Facility Agent has notified the Borrower and the Lenders that it has received all of the documents set out in Schedule 2 in form and substance satisfactory to it on or before the time specified in Schedule 2.

(b)

Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require) the Facility Agent to give that notification. The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.2	Further conditions precedent

Subject to Clause 6 (Certain Funds), the obligation of each Lender to participate in any Loan is subject to the further conditions precedent that:

(a)

on both the date of the Request and the Drawdown Date:

(i)

the representations and warranties in Clause 18 (Representations and Warranties) to be repeated on those dates are correct and will be correct immediately after the Loan is made;

(ii)

no Default is outstanding or might result from the Loan; and


0010023-0003304 BK:44601953.9	20

(iii)

no change of control, as defined in Clause 8.5(d) ( Mandatory Prepayment ), has occurred in respect of the Parent;

(b)

the making of the Loan would not cause Clause 2.2 (Facility Limits) to be contravened; and

(c)

the making of the Loan would not result in more than five Loans being outstanding at any one time. Any Separate Loan shall not be taken into account in this paragraph (c).

Loans

5.1

Drawdown

The Borrower may borrow a Loan if the Facility Agent receives from the Obligors' Agent, not later than 9.00 a.m. (Swedish time) two Business Days before the proposed Drawdown Date or, in the case of a Loan denominated in an Optional Currency, not later than 9.00 a.m. (Swedish time) three Business Days before the proposed Drawdown Date, a duly completed Request. Each Request is irrevocable.

5.2	Completion of Requests

A Request will not be regarded as having been duly completed unless:

(a)

the Drawdown Date is a Business Day falling within the Availability Period;

(b)

the amount of the Loan is:

(i)

a minimum of US$25,000,000 and an integral multiple of US$5,000,000, or an equivalent amount in any Optional Currency; or

(ii)

the balance of the relevant undrawn Commitment; or

(iii)

such other amount as the Facility Agent (acting on the instructions of the Majority Lenders) may agree;

(c)

the amount selected under paragraph (b) above does not cause Clause 2.2 (Facility Limits) to be contravened;

(d)

the currency selected complies with Clause 12 (Optional Currencies);

(e)

the Interest Period selected complies with Clause 9 (Interest Periods); and

(f)

the payment instructions comply with Clause 13 (Payments).

Each Request must specify one Loan only, but the Obligors' Agent may, subject to the other terms of this Agreement, deliver more than one Request on any one day.

5.3	Advance of Loans

(a)	The Facility Agent shall promptly notify each Lender of the details of the requested Loan and the amount of its participation in the Loan.

(b)	Subject to the terms of this Agreement, each Lender shall make its participation in the Loan available to the Facility Agent for the Borrower in the currency in which it is to be borrowed, on the relevant Drawdown Date.


0010023-0003304 BK:44601953.9	21

(c)	The amount of each Lender's participation in the Loan will be the proportion of the Loan which its Commitment bears to the Total Commitments on the proposed Drawdown Date.

6.	Certain Funds

Certain Funds Period means the period from and including the Signing Date to and including the earlier of:

(a)

the last day of the Availability Period; and

(b)

the Drawdown Date.

Major Breach means a breach of:

(a)

Clause 19.7 (Pari passu ranking);

(b)

Clause 19.8 (Negative pledge);

(c)

Clause 19.9 (Transactions similar to security);

(d)

Clause 19.10 (Disposals);

(e)

Clause 19.11 (Change of business);

(f)

Clause 19.12 (Mergers);

(g)

Clause 19.14 (Third party guarantees);

(h)

Clause 19.21( Solvency); and

(i)

Clause 19.22 (Subsidiary Borrowings);

(j)

Clause 19.24 (Anti-corruption law); and

(k)

Clause 19.25 (Sanctions).

Major Default means any of the following Events of Default:

(a)

Clause 20.2 (Non-payment);

(b)

Clause 20.3 (Breach of other obligations) but only insofar as it relates to a Major Breach;

(c)

Clause 20.4 (Misrepresentation) but only insofar as it relates to a Major Representation;

(d)

Clauses 20.6 (Insolvency);

(e)

Clause 20.7 (Insolvency proceedings);

(f)

Clause 20.8 (Appointment of receivers and managers);

(g)

Clause 20.11 (Cessation of business); or

(h)

Clause 20.12 (US Bankruptcy Laws).


0010023-0003304 BK:44601953.9	22

Major Representation means any of the following representat ions and warranties contained in this Agreement:

(a)

Clause 18.2 (Status);

(b)

Clause 18.3 (Powers and authority);

(c)

Clause 18.4 (Legal validity);

(d)

Clause 18.5 (Non-conflict);

(e)

Clause 18.25 (Anti-corruption law); and

(f)

Clause 18.26 (Sanctions).

Spin-Off means the distribution in kind of 100 per cent. of the shares in Veoneer by the Parent to its shareholders and the listing of Veoneer on the New York Stock Exchange and Nasdaq Stockholm.

6.1	Certain Funds

(a)	Subject to paragraph (b) below, during the Certain Funds Period no Lender may:

(i)

refuse to participate in any Loan;

(ii)

cancel its Commitment;

(iii)

exercise any right of rescission, set-off, counter claim or similar right or remedy which it may have in relation to any Loan;

(iv)

rescind, terminate or cancel this Agreement or otherwise exercise any similar right or remedy or make or enforce any claim under the Finance Documents it may have to the extent to do so would prevent or limit the making of a Certain Funds Utilisation; or

(v)

accelerate or cause repayment or prepayment of any Loan.

(b)	Paragraph (a) does not apply if:

(i)

the Parent has not delivered all of the documents set out in Schedule 2 (Conditions Precedent Documents);

(ii)

a Major Representation is not correct in any material respect or will not be correct in any material respect immediately after the Loan is made;

(iii)

a Major Default is continuing or would result from the proposed Loan;

(iv)

any change of control, as defined in Clause 8.5(d) (Mandatory Prepayment), occurs in respect of the Parent; or

(v)

no event described in Clause 16 (Illegality) has occurred.

(c)	Nothing in this Clause 6.1 (Certain Funds) affects the rights of any Finance Party in respect of any continuing Default on expiry of the Certain Funds Period irrespective of whether that Default occurred during the Certain Funds Period or not.


0010023-0003304 BK:44601953.9	23

6.2	Compliance

The Parent must comply in all material respects with all laws and regulations relevant in the context of the Spin-Off.

6.3	Information

Unless prohibited from doing so by any law, regulation (including for the avoidance of doubt the regulations of any stock exchange on which the Parent’s shares are listed) or confidentiality undertaking which the Parent has entered into with a third party in good faith, the Parent must promptly supply to the Facility Agent:

(a)

copies of all documents, notices or announcements received or issued by it in relation to the Spin-Off; and

(b)

any other information regarding the progress of the Spin-Off as the Facility Agent may reasonably request.

6.4	Spin-Off indemnity

The Parent shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate, against any cost, loss or liability incurred by that Finance Party or its Affiliate (or officer or employee of that Finance Party or Affiliate) in connection with or arising out of the funding of the Spin-Off (including but not limited to those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the Spin-Off), unless such loss or liability is caused by the gross negligence or wilful misconduct of that Finance Party or its Affiliate (or employee or officer of that Finance Party or Affiliate). Any Affiliate or any officer or employee of a Finance Party or its Affiliate may rely on this Clause 6.4.

Repayment

7.1

Repayment

The Borrower shall repay each Loan in full on the Termination Date.

8.	Prepayment and Cancellation

8.1	Automatic cancellation

The Commitments of each Lender shall, to the extent not already voluntarily cancelled under Clause 8.2 (Voluntary cancellation) or Clause 8.3 (Additional right of prepayment and cancellation), be automatically cancelled in full on the Termination Date.

8.2	Voluntary cancellation

(a)

The Obligors' Agent may, by giving not less than five days' prior written notice to the Facility Agent (or such shorter period of notice as the Majority Lenders may agree), cancel in whole or in part the undrawn amount of the Total Commitments (but the cancellation in part of either shall be in a minimum of US$25,000,000 and an integral multiple of US$5,000,000).

(b)	Any such cancellation shall reduce the Commitment of each Lender in respect of the relevant Facility pro rata .


0010023-0003304 BK:44601953.9	24

8.3	Additional right of prepayment and cancellation

If:

(a)

any Lender makes a notification to the Facility Agent under Clause 11.3 (Market disruption);

(b)

any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 14.2 (Tax gross-up);

(c)

any Lender claims indemnification from the Parent under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased costs);

(d)

an Obligor becomes obliged to pay any amount in accordance with Clause 16 (Illegality) to any Lender,

then, without prejudice to the obligations of the Borrower under those Clauses, the Obligors' Agent may, whilst the relevant circumstances continue, serve a notice of prepayment and cancellation on that Lender through the Facility Agent. On the date falling five Business Days after the date of service of the notice:

(i)

the Borrower shall prepay the participations of that Lender in all the Loans; and

(ii)

the Commitments of that Lender shall be cancelled.

8.4	Right of cancellation in relation to a Defaulting Lender

(a)	If any Lender becomes a Defaulting Lender, the Parent may, at any time whilst the Lender continues to be such, give the Facility Agent five Business Days' notice of cancellation of each Available Commitment of that Lender.

(b)	On the notice referred to in paragraph (a) above becoming effective, each Commitment of the Defaulting Lender shall immediately be reduced to zero.

(c)	The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders.

8.5	Mandatory Prepayment

(a)	If, at any time after the date of this Agreement:

(i)

it is or becomes unlawful for any Obligor to perform any of its obligations under the Finance Documents; or

(ii)

the guarantee of any Guarantor is not effective or is alleged by any Obligor to be ineffective for any reason,

then the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Obligors' Agent:

(A)

cancel the Total Commitments; and/or

(B)

demand that all or part of the Loans, together with accrued interest and all other amounts accrued under the Finance Documents, be repaid forthwith, whereupon they shall be repaid immediately.


0010023-0003304 BK:44601953.9	25

(b)	If, at any time after the date of this Agreement:

(i)

a representation or warranty made, repeated or deemed to be repeated under Clause 18.26 (Sanctions) is incorrect in any material respect when made, repeated or deemed to be repeated; or

(ii)

an Obligor does not comply with Clause 19.25 (Sanctions),

any Lender may, by notice to the Facility Agent (which shall promptly notify the Obligors’ Agent):

(A)

reduce its Commitments under the Facility to zero; and

(B)

demand that all or part of its share in the Loans, together with accrued interest and all its other amounts accrued and owing to it under the Finance Documents, be repaid forthwith, whereupon they shall be repaid immediately.

Any such notice will take effect in accordance with its terms.

(c)

If a change of control occurs, the Parent shall promptly notify the Facility Agent upon becoming aware of that change of control and any Lender shall have the right, within one month (or such longer period as the Parent and the Facility Agent acting on the instructions of all the Lenders may agree) of the Facility Agent receiving notice of the change of control under this paragraph, to require the Facility Agent to reduce, by notification to the Parent (the Notification of Reduction ), its Commitments under the Facility to zero. Thirty days following receipt of a Notification of Reduction with respect to a Lender, that Lender's Commitment will be cancelled in full and the Borrower shall repay that Lender's participations in all Loans together with accrued interest and all other amounts accrued under the Finance Documents in respect of that Lender.

(d)

For the purposes of paragraph (c) above, Clause 4.2(a)(iii) (Further conditions precedent) and Clause 6.1(b) (Certain Funds) a change of control occurs if a person or group of persons acting in concert at any time after the date of this Agreement acquires more than 50 per cent. of the shares which carry the right to vote in the Parent.

(e)	If at any time after the date of this Agreement the aggregate amount of net proceeds from relevant disposals is more than US$50,000,000 or its equivalent is any other currency in any financial year of the Parent, the Parent must:

(i)

promptly notify the Facility Agent; and

(ii)

procure that an amount at least equal to the excess is applied towards prepaying the Loans.

(f)	For the purposes of paragraph (e) above,:

(i)

net proceeds means any amount received by a member of the Group as consideration for a relevant disposal to a person which is not a member of the Group, including the amount of any intercompany loan repaid or prepaid to continuing members of the Group, less all Taxes and reasonable costs and expenses incurred by any member of the Group in connection with the relevant disposal; and

(ii)

relevant disposal means a disposal of any asset or business (whether by way of a share or asset sale) other than a disposal permitted pursuant to Clauses 19.10(b)(i), 19.10(b)(ii), 19.10(b)(iv), 19.10(b)(v) and 19.10(b)(vi).


0010023-0003304 BK:44601953.9	26

(g)	If at any time after the date of this Agreement the aggregate amount of net proceeds from capital markets issue(s)/relevant issue(s) is more than US$50,000,000 or its equivalent is any other currency in any financial year of the Parent, the Parent must:

(i)

immediately notify the Facility Agent; and

(ii)

procure that an amount at least equal to the excess is applied towards prepaying the Loans.

(h)	For the purposes of paragraph (g) above:

(i)

capital markets issue means any public or private bond or other capital markets issue including, without limitation, any issue or placement of any debt, equity or hybrid financial instrument (including any convertible or exchangeable instrument), other than any issue by the Parent of short term commercial paper ;

(ii)

net proceeds means any amount received by a member of the Group as consideration for a capital markets/relevant issue less all Taxes and reasonable costs and expenses incurred by any member of the Group in connection with that capital markets/relevant issue; and

(iii)

relevant issue means any issue, sale or public offering of any equity security (including any preference share) or any public or private bond or other capital markets issue.

(i)	Any prepayment under paragraphs (e) or (g) above must be made on the last day of the Interest Period of the Loan to be prepaid in which the excess occurred.

(j)

The amount to be prepaid under paragraphs (e) or (g) above will also be applied in reducing Commitments in accordance with Clause 8.6(e) (Miscellaneous provisions). If the amount to be applied in prepaying the Loans is more than the amount of Loans (if any) then outstanding, the Commitments will be automatically reduced in an amount equal to the excess.

(k)	Any prepayment of a Loan pursuant to this Clause 8.5 shall be applied pro rata to each Lender's participation in that Loan.

8.6	Miscellaneous provisions

(a)	Any notice of prepayment and cancellation or notice of cancellation under this Agreement is irrevocable. The Facility Agent shall notify the Lenders promptly of receipt of any such notice.

(b)	All prepayments under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty. All cancellations under this Agreement shall be made without penalty.

(c)	No prepayment or cancellation is permitted except in accordance with the express terms of this Agreement.

(d)	Subject to Clause 2.6 (Increase), no amount of a Commitment which is cancelled under this Agreement may subsequently be reinstated.

(e)	If all or part of a Lender's participation in a Loan is repaid or prepaid and is not available for re-borrowing (other than by operation of Clause 12.2 (Revocation of currency)), an equivalent amount of that Lender's Commitment will be deemed to be cancelled on the date of repayment or prepayment.


0010023-0003304 BK:44601953.9	27

8.7	Application of prepayments

Any prepayment of a Loan pursuant to Clause 8.5(e) (Mandatory Prepayment) or Clause 8.5(g) (Mandatory Prepayment) will be applied pro rata to each Lender's participation in that Loan.

9.	Interest Periods

9.1

Selection

(a)	The Obligors' Agent must select the first Interest Period for a Loan in the relevant Request and may select subsequent Interest Periods in a Selection Notice.

(b)	Each Selection Notice for a Loan is irrevocable and must be delivered to the Facility Agent by the Borrower by not later than 9 a.m. (Swedish time) three Business Days before the commencement of the relevant Interest Period.

(c)	If the Borrower fails to deliver a Selection Notice to the Facility Agent by 9 a.m. (Swedish time) three Business Days before the commencement of the relevant Interest Period, the relevant Interest Period will, subject to the other provisions of this Clause 9.1 (Selection), be one month.

(d)	Subject to the following provisions of this Clause each Interest Period for a Loan will be one, two, three or six months or any other period agreed by the Borrower and the Facility Agent (acting on the instructions of all the Lenders).

(e)	The first Interest Period for a Loan will start on its Utilisation Date and each subsequent Interest Period will start on the last day of the preceding Interest Period.

9.2	Non-Business Days

If an Interest Period for a Loan would otherwise end on a day which is not a Business Day, that Interest Period shall instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

9.3	Overrunning of the Termination Date

If an Interest Period in respect of a Loan borrowed under the Facility would otherwise overrun the Termination Date it shall be shortened so that it ends on the Termination Date.

9.4	Notification

The Facility Agent shall notify each relevant Party of the duration of each Interest Period promptly after ascertaining its duration.

9.5	Other adjustments

(a)	Subject to paragraph (b) below, the Facility Agent and the Parent may enter into such other arrangements as they may agree for the adjustment of Interest Periods and the consolidation and/or division of Loans.

(b)	The Facility Agent may not agree an Interest Period longer than six months without the prior consent of all the Lenders which have (or will have) a participation in the relevant Loan.


0010023-0003304 BK:44601953.9	28

10.	Inter e st

10.1	Interest rate

(a)	The rate of interest on each Loan for its Interest Period is the rate per annum determined by the Facility Agent to be the aggregate of the applicable:

(i)

Margin; and

(ii)

(A) in relation to any Loan in Euro, EURIBOR; or

(B)

in relation to any other Loan, LIBOR.

10.2	Adjustment of Margin

(a)	The initial Margin is 0.30 per cent. per annum.

(b)	Subject to the other provisions of this Clause 10.2, the Margin will be calculated by reference to the table below and the number of Months that have elapsed since the Signing Date:


Number of Months since Signing Date	Margin (per cent. per annum)
From and including the Signing Date to the date falling three Months after the Signing Date:	0.30
From and including the date falling three Months after the Signing Date to the date falling six Months after the Signing Date:	0.45
From and including the date falling six Months after the Signing Date to the date falling nine Months after the Signing Date:	0.60
From and including the date falling nine Months after the Signing Date to the Termination Date:	0.80

(c)	Any change in the Margin will apply to all Loans outstanding and on each Loan made on or after the relevant date set out in paragraph (b) above.

10.3

Due dates

Except as otherwise provided in this Agreement, accrued interest on each Loan is payable by the Borrower on the last day of the Interest Period for that Loan and also, if the Interest Period is longer than six months, on the dates falling at six monthly intervals after the first day of that Interest Period.

10.4	Default interest

(a)

If an Obligor fails to pay any amount payable by it under the Finance Documents, it shall forthwith on demand by the Facility Agent pay interest on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate (the default rate ) determined by the Facility Agent to be one per cent. per annum above, as applicable:

(i)

the rate on the overdue amount under Clause 10.1 (Interest rate) immediately before the due date (if of principal of a Loan to the end of the relevant Interest Period current at the due date of payment); or


0010023-0003304 BK:44601953.9	29

(ii)

in all other cases (incl uding principal of a Loan following the relevant Interest Period current at the due date of payment), the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amou nt for such successive Interest Periods of such duration as the Facility Agent may determine (each a Designated Interest Period ).

(b)	The default rate will be determined if calculated by reference to LIBOR or EURIBOR on each Business Day or the first day of, or two Business Days before the first day of, the relevant Designated Interest Period, as appropriate.

(c)	Default interest will be compounded at the end of each Designated Interest Period (if calculated by reference to LIBOR or EURIBOR).

10.5	Notification of rates of interest

(a)	The Facility Agent shall promptly notify the Obligors' Agent and the relevant Lenders of the determination of a rate of interest under this Agreement.

(b)	The Agent shall promptly notify the Borrower of each Funding Rate relating to a Loan.

11.	Changes to the Calculation of Interest

11.1	Unavailability of Screen Rate

(a)	Interpolated Screen Rate : If no Screen Rate is available for LIBOR or, if applicable, EURIBOR for the Interest Period of a Loan, the applicable LIBOR or EURIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan.

(b)	Reference Bank Rate : If no Screen Rate is available for LIBOR or, if applicable, EURIBOR for:

(i)

the currency of a Loan; or

(ii)

the Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate,

the applicable LIBOR or EURIBOR shall be the Reference Bank Rate as of 11.00 a.m. on the applicable Rate Fixing Day for the currency of that Loan and for a period equal in length to the Interest Period of that Loan.

(c)	Cost of funds : If paragraph (b) above applies but no Reference Bank Rate is available for the relevant currency or Interest Period there shall be no LIBOR or EURIBOR (as applicable) for that Loan and Clause 11.4 (Cost of funds) shall apply to that Loan for that Interest Period.

11.2	Calculation of Reference Bank Rate

(a)

Subject to paragraph (b) below, if LIBOR or EURIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by 11.30 a.m. on the applicable Rate Fixing Day the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.

(b)	If at or about noon on the applicable Rate Fixing Day none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.


0010023-0003304 BK:44601953.9	30

11.3	Market disruption

If before close of business in London on the applicable Rate Fixing Day for the relevant Interest Period the Facility Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 50 per cent. of that Loan) that the cost to it of funding its participation in that Loan from the wholesale market for the relevant currency would be in excess of LIBOR or EURIBOR (as applicable) then Clause 11.4 (Cost of funds) shall apply to that Loan for the relevant Interest Period.

11.4	Cost of funds

(a)	If this Clause 11.4 applies, the rate of interest on each Lender's share of the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

(i)

the Margin; and

(ii)

the rate notified to the Facility Agent by that Lender as soon as practicable and in any event no later than the date falling five Business Days before the date on which interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to the relevant Lender of funding its participation in that Loan from whatever source it may reasonably select (such calculation of cost shall be certified in reasonable detail and disclosed to the Obligors’ Agent, provided that this shall not in any way require a Lender to reveal any information it considers to be confidential about itself or its operations).

(b)	If this Clause 11.4 applies and the Facility Agent or the Obligors’ Agent so requires, the Facility Agent and the Obligors’ Agent shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

(c)	Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Obligors’ Agent, be binding on all Parties.

11.5	Break Costs

(a)	The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

(b)	Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

12.	Optional Currencies

12.1

Selection

(a)	The Obligors' Agent may select the currency of a Loan in the relevant Request.

(b)	The currency of each Loan must be US Dollars or an Optional Currency.

(c)	The Facility Agent shall notify each Lender of the currency of each Loan, the applicable Facility Agent's Spot Rate of Exchange and the Original Dollar Amount promptly after they are ascertained.


0010023-0003304 BK:44601953.9	31

12.2	Revocation of currency

If before 9.30 a.m. on any Rate Fixing Day, the Facility Agent receives notice from a Lender that:

(a)

it is impracticable for it to fund its participation in a Loan in the relevant Optional Currency during that Interest Period in the ordinary course of business in the London interbank market (or the European interbank market as appropriate); and/or

(b)

the use of the proposed Optional Currency might contravene any law or regulation,

the Facility Agent shall give notice to the Obligors' Agent and to the Lenders to that effect before 11.00 a.m. on that day. In this event:

(i)

that Lender's participation in the Loan (or, if more than one Lender is similarly affected, those Lenders' participations in the Loan) shall be treated as a separate Loan denominated in US Dollars during the relevant Interest Period;

(ii)

LIBOR shall be determined pursuant to Clause 11.1 (Unavailability of Screen Rate) save that, for the purposes of such determination, all references in Clause 11.1 (Unavailability of Screen Rate) and in the definition of Interpolated Screen Rate to “11.00 a.m.” shall be deemed to read “1.00 p.m.”.

12.3	Amount of Optional Currencies

(a)

If a Loan is to be drawn down in an Optional Currency, the amount of each Lender's participation in that Loan will be determined by converting into that Optional Currency that Lender's participation in the Original Dollar Amount of that Loan on the basis of the Facility Agent's Spot Rate of Exchange one Business Day before the Rate Fixing Day applicable to that Loan.

(b)	The Facility Agent shall notify the Lenders and the Obligors' Agent of Optional Currency amounts (and the applicable Facility Agent's Spot Rate of Exchange) promptly after they are ascertained.

12.4	Change of currency

(a)	Subject to Clause 12.2 (Revocation of currency), a Loan will remain denominated in the same currency through successive Interest Periods, unless the currency is changed in accordance with this Clause 12.4 (Change of currency).

(b)

The Borrower may change the currency of a Loan made to it with effect from the start of an Interest Period by giving to the Facility Agent a duly completed Selection Notice by no later than 9 a.m. (Swedish time) three Business Days before the relevant Interest Period. Subject to Clause 12.2 (Revocation of currency), the relevant Loan will remain denominated in that currency until it is changed again under this Clause 12.4 (Change of currency).

(c)	If a Loan is to be denominated in different currencies during two successive Interest Periods, then subject to paragraph (d) below:

(i)

the Borrower must repay that Loan on the last day of its current Interest Period in the currency in which it is then denominated (the old currency ); and

(ii)

subject to Clause 12.6 (Conditions precedent), the Lenders must re-advance the Loan in the currency in which it is to be denominated for its next Interest Period (the new currency ).


0010023-0003304 BK:44601953.9	32

The amount of the Loan in the new currency will be calculated at the Facility Agent 's Spot Rate of Exchange on the date of the Selection Notice referred t o at (b) above by the Facility Agent by reference to its Base Currency Amount. The Facility Agent must then notify the Lenders promptly of that amount.

(d)	Alternatively, if the Facility Agent and the Borrower agree:

(i)

the Facility Agent must apply the amount of the Loan (or so much of that amount as is necessary) in the new currency to purchase an amount of the old currency sufficient to discharge the obligation of the Borrower to repay the Loan in the old currency;

(ii)

the Facility Agent must apply any amount of the old currency purchased under paragraph (i) above towards repaying the Loan in the old currency;

(iii)

the Facility Agent will notify the Borrower promptly if there is a shortfall or an excess;

(iv)

if there is a shortfall, the Borrower must pay to the Facility Agent, on the date on which the Loan is due to be repaid in the old currency, an amount in the old currency equal to the shortfall; and

(v)

if there is an excess, the Facility Agent must pay to the Borrower, on the date on which the Loan is due to be repaid in the old currency, an amount in the new currency equal to the excess.

(e)	If the day on which the old currency is due to be repaid is not also a Business Day for the new currency:

(i)

the Facility Agent must notify the Borrower and the Lenders promptly;

(ii)

the Loan will remain in the old currency until the next day which is a Business Day for both the old and the new currencies; and

(iii)

during this period, the Loan will have Interest Periods running from one Business Day to the next Business Day.

(f)	The Parent must indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent as a result of any foreign exchange contract entered into for the purpose of this Clause 12.4 (Change of currency).

12.5	Same Optional Currency during successive Interest Periods

(a)	If a Loan is to be denominated in the same Optional Currency during two successive Interest Periods, the Facility Agent must calculate the amount of the Loan in the Optional Currency for the second of those Interest Periods.

(b)

The amount of that Loan in the Optional Currency for the second Interest Period will be the amount determined by notionally converting the Base Currency Amount of the Loan into that Optional Currency on the basis of the Facility Agent's Spot Rate of Exchange three Business Days before the relevant Interest Period.


0010023-0003304 BK:44601953.9	33

(c)

If the amount calculated is less than the existing amount of that Loan in the Optional Currency during the first Interest Period, the Facility Agent must promptly notify the Borrower and, subject to paragraph (e) below , the Borrower must repay on the last day of the first Interest Period an amount equal to the difference and the amount of the Loan in the Optional Currency will be reduced accordingly.

(d)

If the amount calculated is more than the existing amount of that Loan in the Optional Currency during the first Interest Period, the Facility Agent must promptly notify each Lender and, subject to paragraph (e) below and Clause 12.6 (Conditions precedent), each Lender must advance on the last day of the first Interest Period its Pro Rata Share of an amount equal to the difference and the amount of the Loan in the Optional Currency will be increased accordingly.

(e)

If the calculation made by the Facility Agent under paragraph (a) above shows that the amount of the Loan in the Optional Currency has increased or decreased by less than five per cent. since it was borrowed or (if later) the most recent adjustment under paragraph (c) or (d) above, no payment is required under paragraph (c) or (d) above and the amount of the Loan will remain the same.

12.6	Conditions precedent

Each Lender will only be obliged to re-advance its participation in a Loan in a new currency or make any payment increasing the amount of a Loan in an Optional Currency under this Clause if on the date of the relevant payment:

(a)

no Default is continuing or would result from that change of currency or payment; and

(b)

the Repeating Representations are correct in all material respects.

13.

Payments

13.1

Place

All payments by an Obligor or a Lender under the Finance Documents shall be made to the Facility Agent to its account at such office or bank in the principal financial centre of the country of the relevant currency (or, in the case of Euros, in the principal financial centre of a Participating Member State, Stockholm or London) as it may notify to that Obligor or that Lender for this purpose. Notwithstanding the above, all payments by the Parent to the Co-ordinators under Clauses 22 (Fees) and 23 (Expenses) shall be made to the Co-ordinators in the manner agreed by the Co-ordinator and the Parent.

13.2

Funds

Payments under the Finance Documents to the Facility Agent shall be made for value on the due date at such times and in such funds as the Facility Agent may specify as being customary at the time for the settlement of transactions in the relevant currency in the place for payment.

13.3	Distribution

(a)

Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to paragraphs (b) to (e) below, be made available by the Facility Agent to that Party by payment (on the date and in the currency and funds of receipt) to its account with such office or bank in the principal financial centre of the country of the relevant currency (or, in the case of Euros, in the principal financial centre of a Participating Member State, Stockholm or London) as it may notify to the Facility Agent for this purpose by not less than five Business Days' prior notice.


0010023-0003304 BK:44601953.9	34

(b)	Each Facility Agent may apply any amount received by it for an Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from an Obligor under the Finance Documents or in or towards the purchase of any amount of any currency to be so applied.

(c)

Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

(d)

Unless paragraph (e) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

(e)

If the Facility Agent is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower:

(i)

the Facility Agent shall notify the Parent of that Lender's identity and the Borrower to whom that sum was made available shall on demand refund it to the Facility Agent; and

(ii)

the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower to whom that sum was made available, shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

13.4

Currency

(a)	A repayment or prepayment of a Loan or any part of a Loan is payable in the currency in which the Loan is denominated on its due date.

(b)	Interest is payable in the currency in which the relevant amount in respect of which it is payable is denominated.

(c)	Amounts payable in respect of costs, expenses and taxes and the like are payable in the currency in which they are incurred.

(d)	Any other amount payable under the Finance Documents is, except as otherwise provided in the Finance Documents, payable in US Dollars.

13.5	Set-off and counterclaim

All payments made by an Obligor under the Finance Documents shall be made without set-off or counterclaim.

13.6	Non-Business Days

(a)	If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment shall instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).


0010023-0003304 BK:44601953.9	35

(b)	During any extension of the due date for payment of any principal under this Agreement interest is payable on that principal at the rate payable on the original due da te.

13.7	Impaired Agent

(a)

If, at any time, the Facility Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with Clause 13.1 (Place) and Clause 13.2 (Funds) may instead either pay that amount direct to the required recipient or, if it is not reasonably practicable to pay that amount direct, pay that amount to an interest-bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment (the Paying Party ) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the Recipient Party ). In each case such payments must be made on the due date for payment under the Finance Documents.

(b)	All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or Recipient Parties pro rata to their respective entitlements.

(c)	A Party which has made a payment in accordance with this Clause ‎13.7 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

(d)

Promptly upon the appointment of a successor Agent in accordance with Clause 21.12 (Resignation of the Facility Agent), each Paying Party shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 13.3 (Distribution).

(e)	A Paying Party shall, promptly upon request by a Recipient Party and to the extent:

(i)

that it has not given an instruction pursuant to paragraph (d) above; and

(ii)

that it has been provided with the necessary information by that Recipient Party,

give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.

13.8	Partial payments

(a)	If the Facility Agent receives a payment insufficient to discharge all the amounts then due and payable by the Borrower under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of the Borrower under the Finance Documents in the following order:

(i)

first , in or towards payment pro rata of any unpaid, fees, costs and expenses of the Facility Agent under the Finance Documents;

(ii)

secondly , in or towards payment pro rata of any accrued interest due but unpaid under this Agreement;

(iii)

thirdly , in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(iv)

fourthly , in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.


0010023-0003304 BK:44601953.9	36

(b)	The Facility Agent shall, if so directed by all the Lenders, vary the order set out in subparagraphs (a)(ii) to (iv) above .

(c)	Paragraphs (a) and (b) above will override any appropriation made by the Borrower.

13.9	Disruption to Payment Systems

If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Parent that a Disruption Event has occurred:

(a)

the Facility Agent may, and shall if requested to do so by the Parent, consult with the Parent with a view to agreeing with the Parent such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;

(b)

the Facility Agent shall not be obliged to consult with the Parent in relation to any changes mentioned in paragraph (a) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

(c)

the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

(d)

any such changes agreed upon by the Facility Agent and the Parent shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause ‎27 (Amendments and Waivers);

(e)

the Facility Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause ‎13.9; and

(f)

the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.

14.

Ta xes

14.1	Definitions

(a)	In this Agreement:

Protected Party means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

Tax Credit means a credit against, relief or remission for, or repayment of any Tax.

Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax indemnity).


0010023-0003304 BK:44601953.9	37

(b)	Unless a contrary indication appears, in this Clause 14 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.

14.2	Tax gross-up

(a)	Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

(b)

The Parent shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Finance Party it shall notify the Parent and that Obligor.

(c)	If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

(d)	If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(e)

Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

14.3	Tax indemnity

(a)

The Parent shall (within three Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

(b)	Paragraph (a) above shall not apply:

(i)

with respect to any Tax assessed on a Finance Party:

(A)

under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(B)

under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

(ii)

to the extent a loss, liability or cost:

(A)

is compensated for by an increased payment under Clause 14.2 (Tax gross-up); or


0010023-0003304 BK:44601953.9	38

(B)

would have been compensated for by an increased payment under Clause 14.2 ( Tax gross-up ); or

(C)

relates to a FATCA Deduction required to be made by a Party.

(c)	A Protected Party making, or intending to make, a claim under paragraph (a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Parent.

(d)	A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3, notify the Facility Agent.

14.4	US Taxation - delivery of forms and statements

(a)	Within 31 days after the date of this Agreement, each Lender (which is not a United States person as such term is defined in section 7701(a)(30) of the US Code) shall submit to the Obligors' Agent and the Facility Agent duly completed and signed copies of either:

(i)

Form W-8BEN-E (entitling the relevant Lender to a complete exemption from withholding on all amounts to be received by it, including fees, under the Finance Documents); or

(ii)

Form W-8ECI (relating to all amounts to be received by the relevant Lender, including fees, under the Finance Documents),

of the United States Internal Revenue Service.

(b)	Any New Lender (as defined in Clause 28.2 (Transfers by Lenders)) shall comply with the provisions of paragraph (a) above within 31 days, or earlier if requested, of it becoming a New Lender under this Agreement.

(c)

Other than as set out in paragraphs (a) and (b) above, each Lender (and any New Lender) shall submit to the Obligors' Agent and the Facility Agent such additional duly completed and signed copies of the applicable forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may be:

(i)

reasonably requested by an Obligor or the Facility Agent from that Lender (or New Lender); and or

(ii)

required under then current United States law or regulations to determine the United States withholding taxes on payment in respect of all amounts to be received by that Lender (or New Lender), including fees, under the Finance Documents.

(d)

Upon the request of an Obligor or the Facility Agent, any New Lender that is a United States person (as such term is defined in Section 7701(a)(30) of the US Code) shall submit to the Obligors' Agent or the Facility Agent (as applicable) duly completed Internal Revenue Service Form W-9, establishing that it is such a United States person.

(e)

If any Lender (or any New Lender) determines that it is unable to submit any form or certificate that it is obliged to submit pursuant to this Clause 14.4, or that any information or declaration contained in any such form or certificate previously submitted has either ceased or will cease to be true, accurate and complete in all respects, it shall promptly notify the Obligors' Agent and the Facility Agent of such fact.


0010023-0003304 BK:44601953.9	39

14.5	Tax credit

If an Obligor makes a Tax Payment and the Finance Party determines that:

(a)

a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

(b)

that Finance Party has obtained and utilised that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

14.6

VAT

(a)

All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

(b)

If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier ) to any other Finance Party (the Recipient ) under a Finance Document, and any Party other than the Recipient (the Relevant Party ) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

(i)

(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

(ii)

(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

(c)

Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.


0010023-0003304 BK:44601953.9	40

(d)

Any reference in this Clause 14.6 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term representative member to have the same meaning as in the Value Added Tax Act 1994).

(e)

In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.

14.7	FATCA Information

(a)	Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:

(i)

confirm to that other Party whether it is:

(A)

a FATCA Exempt Party; or

(B)

not a FATCA Exempt Party;

(ii)

supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and

(iii)

supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.

(b)	If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

(c)	Paragraph (a) above shall not oblige any Finance Party to do anything and paragraph (a)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

(i)

any law or regulation;

(ii)

any fiduciary duty; or

(iii)

any duty of confidentiality.

(d)

If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii) above (including where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.


0010023-0003304 BK:44601953.9	41

(e)	If the Borrower is a US Tax Obligor or the Facility Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Finance Party shall, within ten Business Days of:

(i)

where the Borrower is a US Tax Obligor and the Finance Party is an Original Lender, the date of this Agreement;

(ii)

where the Borrower is a US Tax Obligor on a Transfer Date or a date on which an increase in Commitments takes effect pursuant to Clause 2.6 (Increase) and the Finance Party is a New Lender or an Increase Lender, the relevant Transfer Date or date on which an increase in Commitments takes effect pursuant to Clause 2.6 (Increase);

(iii)

the date a new US Tax Obligor accedes as the Borrower; or

(iv)

where the Borrower is not a US Tax Obligor, the date of a request from the Facility Agent,

supply to the Facility Agent:

(A)

a withholding certificate on Form W-8, Form W-9 or any other relevant form; or

(B)

any withholding statement or other document, authorisation or waiver as the Facility Agent may require to certify or establish the status of such Finance Party under FATCA or that other law or regulation.

(f)	The Facility Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Finance Party pursuant to paragraph (e) above to the Borrower.

(g)

If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Facility Agent by a Finance Party pursuant to paragraph (e) above is or becomes materially inaccurate or incomplete, that Finance Party shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Facility Agent unless it is unlawful for that Finance Party to do so (in which case that Finance Party shall promptly notify the Facility Agent). The Facility Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the Borrower.

(h)

The Facility Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Finance Party pursuant to paragraph (e) or (g) above without further verification. The Facility Agent shall not be liable for any action taken by it under or in connection with paragraphs (e) to (g) above.

14.8	FATCA Deduction

(a)

Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

(b)

Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Parent and the Facility Agent and the Facility Agent shall notify the other Finance Parties.


0010023-0003304 BK:44601953.9	42

15.	Increase d Costs

15.1	Increased costs

(a)	Subject to Clause 15.2 (Exceptions), the Parent shall forthwith on demand by a Finance Party pay to that Finance Party the amount of any increased cost incurred by it or any of its Affiliates as a result of:

(i)

any Change in Law; or

(ii)

compliance with any regulation made after the date of this Agreement,

(including any law or regulation relating to taxation, change in currency of a country, or reserve asset, special deposit, cash ratio, liquidity or capital adequacy requirements or any other form of banking or monetary control).

(b)	In this Agreement increased cost means:

(i)

an additional cost incurred by a Finance Party or any of its Affiliates as a result of it having entered into, or performing, maintaining or funding its obligations under, this Agreement;

(ii)

that portion of an additional cost incurred by a Finance Party or any of its Affiliates in making, funding or maintaining all or any advances comprised in a class of advances formed by or including that Finance Party's participations in the Loans made or to be made under this Agreement as is attributable to a Finance Party making, funding or maintaining those participations;

(iii)

a reduction in any amount payable to a Finance Party or any of its Affiliates or the effective return to a Finance Party or any of its Affiliates under this Agreement or (to the extent that it is attributable to this Agreement) on its capital; or

(iv)

the amount of any payment made by a Finance Party or any of its Affiliates, or the amount of any interest or other return foregone by a Finance Party or any of its Affiliates, calculated by reference to any amount received or receivable by that Finance Party or any of its Affiliates from any other Party under this Agreement.

(c)	As soon as practicable after becoming aware that the Parent is liable, or will become liable, to pay any amount in accordance with the provisions of paragraph (a) above, the Facility Agent will notify the Parent accordingly.

15.2	Exceptions

Clause 15.1 (Increased costs) does not apply to any increased cost:

(a)

compensated for by the operation of Clause 14 (Taxes);

(b)

attributed to any change in the rate of, or change in the basis of calculating, tax on the overall net income of a Lender (or the overall net income of a division or branch of that Lender) imposed in the jurisdiction in which its principal office for the time being is situate;

(c)

attributable to the implementation or application of, or compliance with Basel II or any law or regulation that implements or applies Basel II (but excluding any amendment that arises out of Basel III or CRD IV); or


0010023-0003304 BK:44601953.9	43

(d)

attributable to a FATCA Deduction required to be made by a Party.

15.3

Claims

(a)

A Finance Party intending to make a claim for an Increased Cost must provide the Parent with a certificate confirming the amount of (and the calculation leading to such amount, provided that this shall not in any way require a Finance Party to reveal any information it considers to be confidential about itself or its operations), and the events giving rise to, the claim.

(b)

Failure or delay on the part of any Finance Party to demand compensation pursuant to this Clause shall not constitute a waiver of such Finance Party’s right to demand such compensation; provided that the Parent shall not be required to compensate a Finance Party pursuant to this Clause for any increased costs incurred or reductions suffered more than six months prior to the date that such Finance Party notifies the Parent of such Finance Party’s intention to claim compensation therefor.

16.	Illegality

If it is or becomes unlawful in any jurisdiction for a Lender to give effect to any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so, then:

(a)

that Lender may notify the Obligors' Agent through the Facility Agent accordingly; and

(b)

(i) the Borrower shall forthwith prepay the participations of that Lender in all the Loans made to it; and

(ii) the Commitments of that Lender shall forthwith be cancelled.

17.

Guarantee

17.1	Guarantee and Indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

(a)

as principal obligor guarantees to each Finance Party prompt performance by the Borrower of all its obligations under the Finance Documents;

(b)

undertakes with each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall forthwith on demand by the Facility Agent pay that amount as if that Guarantor instead of the Borrower were expressed to be the principal obligor; and

(c)

agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of the Borrower not paying any amount which would, but for that unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 if the amount claimed had been recoverable on the basis of a guarantee.


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17.2	Limitatio ns of guarantee by Autoliv ASP, Inc.

The obligations of Autoliv ASP, Inc. under this Clause 17 only extend to the obligations of Autoliv Inc. as Borrower under this Agreement.

17.3	Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

17.4	Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 17 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

17.5	Waiver of defences

The obligations of each Guarantor under this Clause 17 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 17 (without limitation and whether or not known to it or any Finance Party) including:

(a)

any time, waiver or consent granted to, or composition with, any Obligor or other person;

(b)

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

(c)

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(d)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

(e)

any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

(f)

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

(g)

any insolvency or similar proceedings.


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17.6	Guarantor intent

Without prejudice to the generality of Clause 17.5 (Waiver of defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

17.7	Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

17.8	Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

(a)

refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

(b)

hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause 17.

17.9	Deferral of Guarantor's rights

Until all amounts which may be or become payable by the Borrower under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17:

(a)

to be indemnified by an Obligor;

(b)

to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;

(c)

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;


0010023-0003304 BK:44601953.9	46

(d)

to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 17.1 ( Guarantee and Indemnity );

(e)

to exercise any right of set-off against any Obligor; and/or

(f)

to claim or prove as a creditor of any Obligor in competition with any Finance Party.

If a Guarantor receives any benefit, payment or distribution in relation to any such rights it shall hold that benefit, payment or distribution (to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full) on trust for the Finance Parties and shall promptly pay or transfer the same as the Facility Agent may direct for application in accordance with Clause 13 (Payments).

17.10

Release of Guarantors' right of contribution

If any Guarantor (a Retiring Guarantor ) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date that Retiring Guarantor ceases to be a Guarantor:

(a)

that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

(b)

each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.

17.11

Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

17.12

Consideration and enforceability

(a)	Each Guarantor represents, warrants and agrees that:

(i)

it will receive valuable direct and indirect benefits as a result of the transactions financed by the Loans; and

(ii)

these benefits will constitute "reasonably equivalent value" and "fair consideration" as those terms are used in the fraudulent transfer laws.

(b)	Each Guarantor acknowledges and agrees that the Finance Parties have acted in good faith in connection with the guarantee granted under this Clause 17, and the transactions contemplated by this Agreement.

(c)	This Clause 17 shall be enforceable against each Guarantor to the maximum extent permitted by the fraudulent transfer laws.


0010023-0003304 BK:44601953.9	47

(d)	Each Guarantor's liability under this Clause 17 shall be limited so that no obligation of, or transfer by, a Guarantor under this Clause 17 is subject to avoidance and turnover under the fraudulent transfer laws.

(e)	For the purposes of this Clause, "fraudulent transfer laws" means applicable United States bankruptcy and state fraudulent transfer and conveyance statutes and the related case law.

17.13

US Guarantors

(a)	In this Agreement:

fraudulent transfer law means any applicable United States bankruptcy and State fraudulent transfer and conveyance statute and any related case law;

US Debtor means an Obligor that is incorporated or organised under the laws of the United States of America or any State of the United States of America (including the District of Columbia) or that has a place of business or property in the United States of America.

US Guarantor means any Guarantor that is a US Debtor; and

terms used in this subclause are to be construed in accordance with the fraudulent transfer laws.

(b)	Each US Guarantor acknowledges that:

(i)

it will receive valuable direct or indirect benefits as a result of the transactions financed by the Finance Documents;

(ii)

those benefits will constitute reasonably equivalent value and fair consideration for the purpose of any fraudulent transfer law; and

(iii)

each Finance Party has acted in good faith in connection with the guarantee given by that U.S. Guarantor and the transactions contemplated by the Finance Documents.

(c)	Each Finance Party agrees that each US Guarantor's liability under this Clause is limited so that no obligation of, or transfer by, any US Guarantor under this Clause is subject to avoidance and turnover under any fraudulent transfer law.

(d)	Each US Guarantor represents and warrants to each Finance Party that:

(i)

the aggregate amount of its debts (including its obligations under the Finance Documents) is less than the aggregate value (being the lesser of fair valuation and present fair saleable value) of its assets;

(ii)

its capital is not unreasonably small to carry on its business as it is being conducted;

(iii)

it has not incurred and does not intend to incur debts beyond its ability to pay as they mature; and

(iv)

it has not made a transfer or incurred any obligation under any Finance Document with the intent to hinder, delay or defraud any of its present or future creditors.

(e)	Each representation and warranty in this subclause:

(i)

is made by each US Guarantor on the date of this Agreement; and


0010023-0003304 BK:44601953.9	48

(ii)

is deemed to be repeated by each US Guarantor on the date of each Request and the first day of each Interest Period; and

is, when repeated, applied to the circumstances existing at the time of repetition.

18.	Rep resentations and Warranties

18.1	Representations and warranties

Each Obligor makes the representations and warranties set out in this Clause 18 to each Finance Party.

18.2

Status

(a)	It is a limited liability company, duly incorporated and validly existing under the laws of the jurisdiction of its incorporation.

(b)	Each Material Subsidiary has the power to own its assets and carry on its business as it is being conducted.

18.3	Powers and authority

It has the power to enter into and perform, and has taken all necessary action to authorise the entry into, performance and delivery of, the Finance Documents to which it is or will be a party and the transactions contemplated by those Finance Documents.

18.4	Legal validity

Each Finance Document to which it is or will be a party constitutes, or when executed in accordance with its terms will constitute, its legal, valid and binding obligation enforceable in accordance with its terms.

18.5	Non-conflict

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents to which it is a party do not and will not:

(a)

conflict with any law or regulation or judicial or official order; or

(b)

conflict with the constitutional documents of any Obligor; or

(c)

conflict with any document which is binding upon any Obligor or any asset of any Obligor in a manner which could reasonably be expected to have a material adverse effect.

18.6	No default

(a)	No Default is outstanding or might result from the making of any Loan.

(b)

No other event is outstanding which constitutes (or with the giving of notice, lapse of time, determination of materiality or the fulfilment of any other applicable condition or any combination of the foregoing, would constitute) a default under any document which is binding on any member of the Group or any asset of any member of the Group to an extent or in a manner which could reasonably be expected to have a material adverse effect.


0010023-0003304 BK:44601953.9	49

18.7	Authorisations

(a)

All authorisations which would reasonably be considered to be required in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents to which it is a party have been obtained or effected (as appropriate) and are in full force and effect.

(b)	All acts, conditions and things required to be done, fulfilled and performed under the laws of the United States of America in order to make the Finance Documents admissible in evidence in the United States of America have been done, fulfilled and performed.

18.8

Accounts

In the case of the Parent, the audited consolidated accounts of the Group most recently delivered to the Facility Agent (which, at the date of this Agreement, are the Original Group Accounts):

(i)

have been prepared in accordance with accounting principles and practices generally accepted in the USA consistently applied; and

(ii)

fairly represent the consolidated financial condition of the Group as at the date to which they were drawn up.

18.9	Litigation

(a)

Other than as specifically disclosed to the Facility Agent prior to the date of this Agreement, no litigation, arbitration or administrative proceedings are current or, to its knowledge, pending or threatened, which are reasonably to be expected to be adversely determined, and which might, if adversely determined, have a material adverse effect.

(b)	In respect of any litigation, arbitration or administrative proceedings disclosed to the Facility Agent prior to the date of this Agreement, there has been no development in the conduct of those proceedings which might have a material adverse effect.

18.10

Taxes on payments

It will not be required to make any deduction or withholding from any payment it may make to any Finance Party under the Finance Documents.

18.11

No immunity

In any proceedings taken in England and Wales, the United States of America or any other relevant state or jurisdiction, in each case in relation to the Finance Documents, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.

18.12

Pari passu ranking

Its obligations under the Finance Documents will rank at least pari passu with the claims of all its other unsecured creditors save those whose claims are preferred solely by any bankruptcy, insolvency, liquidation or other similar laws of general application.


0010023-0003304 BK:44601953.9	50

18.13

Winding up: re-organisation etc.

It has not taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of its knowledge and belief) threatened against it for its winding-up, dissolution, administration or re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its assets or revenues.

18.14

Environmental Law

Other than as specifically disclosed to the Facility Agent prior to the date of this Agreement, each Obligor is and has been in compliance with all applicable Environmental Laws and Environmental Licenses in all material respects and, so far as it is aware, there are no circumstances that may at any time prevent or interfere with continued compliance by it with all applicable Environmental Laws and Environmental Licenses in all material respects. Other than as disclosed to the Facility Agent prior to the date of this Agreement, no Environmental Claim is pending or, to the best of its knowledge, threatened against it or any of its properties.

18.15

ERISA

Each Plan of the Obligors and their respective ERISA Affiliates complies in all material respects with all applicable requirements of law and regulation. No Reportable Event has occurred with respect to any Plan which might have a material adverse effect, and no steps have been taken to terminate any Plan. No Obligor or any Subsidiary or ERISA Affiliate of an Obligor has had a complete or partial withdrawal from any Multiemployer Plan or initiated any steps to do so.

18.16

Investment Company Act

No Obligor is an "investment company" or a company "controlled" by an "investment company", within the meaning of the United States Investment Company Act of 1940, as amended.

18.17

Federal Power Act

No Obligor is a "public utility" within the meaning of, or otherwise subject to regulation under, the United States Federal Power Act.

18.18

Other regulation

No Obligor is subject to regulation under any United States Federal or State statute or regulation that limits its ability to incur or guarantee indebtedness.

18.19

Margin Stock

(a)	The proceeds of the Loans have been and will be used only for the purposes described in Clause 3 (Purpose).

(b)	No Obligor is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations U and X of the Board of Governors of the United States Federal Reserve System).

(c)

None of the transactions contemplated in this Agreement (including, without limitation, the borrowings hereunder and the use of the proceeds thereof) will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934 (or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X).


0010023-0003304 BK:44601953.9	51

18.20

Solvency

(a)	The Parent has not incurred and does not intend to incur or believe it will incur debts beyond its ability to pay as they mature.

(b)	The Parent has made no transfer or incurred any obligation under this Agreement with the intent to hinder, delay or defraud any of its present or future creditors.

(c)	For purposes of this Clause 18.20:

(i)

debt means any liability on a claim;

(ii)

claim means (A) any right to payment, whether or not that right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (B) any right to an equitable remedy for breach of performance if that breach gives rise to payment, whether or not the right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured; and

(iii)

terms used in this Clause 18.20 shall be construed in accordance with the applicable United States bankruptcy and New York fraudulent conveyance statutes and the related case law.

18.21

Stamp duties

No stamp or registration duty or similar taxes or charges are payable in respect of any Finance Document.

18.22

No Security Interests

Other than as permitted by the provisions of Clause 19.8 (Negative pledge), no Security Interest exists over all or any of its present or future revenues or assets.

18.23

Material adverse change

There has been no material adverse change in the condition (financial or otherwise) of the Borrower or the Group as a whole since the date of the Original Group Accounts.

18.24

Jurisdiction and governing law

(a)

Its:

(i)

irrevocable submission under this Agreement to the jurisdiction of the courts of England and New York;

(ii)

agreement that this Agreement and any non-contractual obligations arising out of it are governed by English law; and

(iii)

agreement not to claim any immunity to which it or its assets may be entitled,

are legal, valid and binding under the laws of its jurisdiction of incorporation.

(b)	Any judgment obtained in England or in New York will be recognised and be enforceable by the courts of its jurisdiction of incorporation.


0010023-0003304 BK:44601953.9	52

18.25

Anti-corruption law

Each member of the Group maintains policies designed to promote compliance with applicable anti-corruption laws and, to the best of its knowledge and belief, having made due and careful enquiry, each such member has conducted its business in accordance, and is in compliance, with those laws.

18.26

Sanctions

No Obligor, nor any of its respective Subsidiaries or its (or its respective Subsidiaries’) directors or officers or (to the best of its knowledge and belief, having made due and careful inquiry) its (or its respective Subsidiaries’) employees or agents:

(a)

is a Sanctions Restricted Party;

(b)

is, to the extent it is or should be aware, subject to or involved in any action, claim, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority;

(c)

has, to the best of its knowledge and belief, having made due and careful inquiry, directly or indirectly engaged in transactions on behalf of the Group or any Obligor with a Sanctions Restricted Party save to the extent that such a transaction is expressly permitted by the relevant Sanctions Laws; or

(d)

has directly or indirectly has engaged in or engages in transactions on behalf of the Group or any Obligor that evade or violate, are intended to evade or violate or attempt to evade or violate, any Sanctions Laws applicable to any Obligor.

The representations and warranties above shall not be made by nor apply to any Obligor in so far as they would violate or expose any Party (including such Obligor) or any of its Subsidiaries or any director, officer or employee thereof to any liability under any anti-boycott or blocking law, regulation or statute that is in force from time to time and applicable to such entity (including without limitation EU Regulation (EC) 2271/96 and Section 7 of the German Foreign Trade Ordinance ( Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außen¬wirtschafts¬verordnung – AWV )).

18.27

Times for making representations and warranties

The representations and warranties set out in this Clause 18:

(a)

are made on the date of this Agreement; and

(b)

(with the exception of Clause 18.10 (Taxes on payments), Clause 18.21 (Stamp duties) and Clause 18.23 (Material adverse change)) are deemed to be repeated by each Obligor on the date of each Request, the date of each Extension Request, each date upon which an extension of the Termination Date takes effect in accordance with Clause 2.7 (Extension option) and the first day of each Interest Period, in each case with reference to the facts and circumstances then existing.

19.	Undertakings

19.1

Duration

The undertakings in this Clause 19 remain in force from the date of this Agreement for so long as any amount is or may be outstanding under this Agreement or any Commitment is in force.


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19.2	Financial information

The Parent shall supply to the Facility Agent in sufficient copies for all the Lenders:

(a)

as soon as the same are available (and in any event within 180 days of the end of each of its financial years), its audited consolidated accounts for that financial year.

(b)

as soon as the same are available (and in any event within 90 days of the end of the first half-year of each of its financial years):

(i)

its unaudited consolidated accounts for that half-year; and

(ii)

the unaudited accounts of Autoliv ASP, Inc. for that half-year.

(c)

as soon as the same are available (and in any event within 60 days of the end of each financial quarter):

(i)

its unaudited consolidated accounts for that financial quarter; and

(ii)

subject to paragraph (d) below, the unaudited accounts of Autoliv ASP, Inc. for that financial quarter.

(d)

as soon as the same are available (and in any event within 120 days of the end of that financial quarter) the unaudited accounts of Autoliv ASP, Inc. for the fourth quarter of that financial year.

19.3	Information - miscellaneous

The Parent shall supply to the Facility Agent:

(a)

any press release issued by the Parent and any information in the possession or control of any member of the Group regarding its financial condition and operations about matters which are reasonably likely to affect any Finance Party’s rights under the Finance Documents; and

(b)

(unless already provided to the Facility Agent) promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending, and which might, if adversely determined, have a material adverse effect on the financial condition of any Material Subsidiary or on the Group as a whole or on the ability of any Obligor to perform its obligations under this Agreement; and

(c)

promptly, such further information in the possession or control of any member of the Group regarding its financial condition and operations as any Finance Party may reasonably request;

(d)

immediately upon its occurrence, details of any change in the credit rating assigned to the Parent's long term unsecured and unsubordinated debt by either or both of the Rating Agencies;

(e)

promptly upon becoming aware of them, the details of any claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority against it, any of its direct or indirect owners or any other member of the Group or any of their respective directors, officers or employees as well as information on what steps are being taken with regards to answer or oppose such; and


0010023-0003304 BK:44601953.9	54

(f)

promptly upon becoming aware that it, any of its direct or indirect owners or any other member of the Group or any of their respective directors, officers or employees has become or is likely to become a Sanctions Restricted Party.

19.4	Notification of Default

Each Obligor shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon its occurrence.

19.5	Compliance certificates

(a)	The Parent shall supply to the Facility Agent:

(i)

within five Business Days of delivery of the accounts specified in paragraph (a), (b)(i) and (c)(i) of Clause 19.2 (Financial information); and

(ii)

promptly at any other time, if the Facility Agent so requests, a Compliance Certificate signed by one of its senior officers on its behalf:

(A)

setting out computations as to compliance with Clause 19.22 (Subsidiary Borrowings) as at the date at which the accounts referred to in paragraph (i) above were drawn up;

(B)

confirming the credit ratings which currently apply to the Parent's long term unsecured and unsubordinated debt; and

(C)

certifying that no Default is outstanding or, if a Default is outstanding, specifying the Default and the steps, if any, being taken to remedy it.

(b)

The Parent does not need to supply a Compliance Certificate (the First Certificate ) with the audited consolidated accounts delivered in accordance with paragraph (a) of Clause 19.2 (Financial information) if that First Certificate would be the same as the Compliance Certificate (the Second Certificate ) supplied with the unaudited consolidated accounts delivered in accordance with paragraph (c)(i) of Clause 19.2 (Financial information) in respect of the fourth financial quarter of that financial year. The Parent must instead confirm in writing to the Facility Agent that the First Certificate would be the same as the Second Certificate.

19.6	Authorisations

Each Obligor shall promptly:

(a)

obtain, maintain and comply with the terms of; and

(b)

supply certified copies to the Facility Agent of,

any authorisation required under any law or regulation to enable it to perform its obligations under, or for the validity or enforceability of, any Finance Document.

19.7	Pari passu ranking

Each Obligor shall procure that its obligations under the Finance Documents do and will rank at least pari passu with all its other present and future unsecured obligations, except for obligations mandatorily preferred by law applying to companies generally.


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19.8	Negative pledge

(a)	No Obligor shall, and the Parent shall procure that no other member of the Group will, create or permit to subsist any Security Interest on any of its assets (other than Unrestricted Margin Stock).

(b)	Paragraph (a) does not apply to:

(i)

any lien arising by operation of law in the ordinary course of business and securing amounts not more than 30 days overdue;

(ii)

any Security Interest disclosed in writing to the Facility Agent prior to the execution of this Agreement which secures Financial Indebtedness outstanding at the date of this Agreement;

(iii)

any Security Interest arising in relation to set-off arrangements between cash balances and bank borrowings with the same bank which arise in the ordinary course of business;

(iv)

any Security Interest existing at the time of acquisition on or over any asset acquired by a member of the Group after the date of this Agreement which was not created in contemplation of or in connection with that acquisition, provided that the principal amount secured by such Security Interest and outstanding at the time of acquisition is not subsequently increased and the Security Interest is discharged within three months;

(v)

in the case of any company which becomes a member of the Group after the date of this Agreement, any Security Interest existing on or over its assets when it becomes a member of the Group which was not created in contemplation of or in connection with it becoming a member of the Group, provided that:

(A)

the principal amount secured by such Security Interest and outstanding when the relevant company became a member of the Group is not increased;

(B)

no amount is secured by any such Security Interest which is not secured by the relevant Security Interest when the relevant company becomes a member of the Group; and

(C)

the Security Interest is discharged within three months;

(vi)

any Security Interest replacing any of the Security Interests permitted by paragraphs (iv) and (v), provided that the amount secured by any replacement Security Interest shall not exceed the amount outstanding and secured by the original Security Interest at the time of the creation of the replacement Security Interest, the value of the replacement asset over which the replacement Security Interest is created does not exceed the value of the asset over which the original Security Interest was held, the replacement Security Interest secures the same obligations as the original Security Interest and such replacement Security Interest is discharged within the original three-month period specified in paragraphs (iv) and (v); and

(vii)

any other Security Interest provided that at the time that the Security Interest is created, the aggregate amount of indebtedness secured by all Security Interests permitted under this (b)(vii) of Clause 19.8 (other than those permitted by subparagraphs (b)(i) to (b)(vi) above of this Clause 19.8), when taken together with the aggregate value of financing raised or the amount involved in the financing of an asset in transactions described in Clause 19.9 (Transactions similar to security), does not exceed five per cent. of the book value of the consolidated total assets of the Group, as determined by reference to the most recent consolidated accounts of the Group delivered pursuant to Clause 19.2 (Financial information).


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19.9	Transactions similar to security

No Obligor shall, and the Parent shall procure that no other Material Subsidiary will:

(a)

sell, transfer or otherwise dispose of a material part of its assets (either in one transaction or a series of transactions, whether related or not) on terms whereby it is or may be leased to or re-acquired or acquired by a member of the Group or any of its related entities; or

(b)

sell, transfer or otherwise dispose of any of its receivables on recourse terms, except for the discounting of bills or notes in the ordinary course of trading,

in each case, in circumstances where the transaction is entered into primarily as a method of raising finance or of financing the acquisition of an asset, save where the aggregate of (i) financing raised or the amount involved in the financing of the acquisition of an asset in transactions described in this Clause 19.9 (Transactions similar to security) and (ii) the Security Interests permitted by sub-paragraph (b)(vii) of Clause 19.8 (Negative pledge), does not exceed five per cent. of the book value of the consolidated total assets of the Group, as determined by reference to the most recent consolidated accounts of the Group delivered pursuant to Clause 19.2 (Financial information ). This paragraph does not apply to Unrestricted Margin Stock.

19.10

Disposals

(a)

No Obligor shall, and the Parent shall procure that no other Material Subsidiary will, either in a single transaction or in a series of transactions, whether related or not and whether voluntarily or involuntarily, sell, transfer, grant or lease or otherwise dispose of all or any substantial part of its assets.

(b)	Paragraph (a) does not apply to:

(i)

disposals made in the ordinary course of trading of the disposing entity; or

(ii)

disposals of assets in exchange for other assets comparable or superior as to type, value and quality; or

(iii)

disposals made on an arms length basis for full market consideration; or

(iv)

disposals made with the prior written consent of the Majority Lenders; or

(v)

any disposal of assets from:

(A)

an Obligor to another Obligor; or

(B)

a Material Subsidiary (other than an Obligor) to an Obligor or any other Subsidiary; or

(C)

any other Subsidiary of the Parent to any member of the Group,

provided that all such disposals in this paragraph (v) are made for full market consideration; or

(vi)

any disposal made to Veoneer (or any of its Subsidiaries) pursuant to the Spin-Off.


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19.11

Change of busin ess

The Parent shall procure that no substantial change is made to the general nature or scope of the business of the Parent or of the Group from that carried on at the date of this Agreement other than as a consequence of the Spin-Off.

19.12

Mergers

The Parent shall not, without the prior written consent of the Majority Lenders, finalise or effectuate any amalgamation, demerger, merger or reconstruction other than as a consequence of the Spin-Off.

19.13

Insurances

Each Obligor shall, and the Parent will procure that the Group taken as a whole will, effect and maintain such insurance over and in respect of its property, assets and business with reputable underwriters or insurance companies and in such a manner and to such extent as is reasonable and customary for a business enterprise engaged in the same or similar businesses and in the same or similar localities.

19.14

Third party guarantees

No Obligor shall, and will ensure that no other member of the Group shall, without the prior consent of the Majority Lenders, grant any guarantee, bond, indemnity, counter-indemnity or similar instrument in respect of any material obligation of a person other than a member of the Group, save for:

(a)

on the terms of the Finance Documents;

(b)

any guarantee related to the purchase or supply of goods and/or services by such Obligor or a member of the Group or a consortium or a group of companies of which such Obligor or a member of the Group is a party, which guarantee is given in the ordinary course of business; or

(c)

any other guarantee where the aggregate amount of material obligations guaranteed by all such guarantees does not exceed US$50,000,000 at any time.

19.15

Environmental Matters

Each Obligor that directly or indirectly owns, leases, occupies or uses real property in the United States shall, in all material respects, comply with:

(a)

all applicable Environmental Law; and

(b)

the terms and conditions of all Environmental Licenses applicable to it,

and for this purpose will implement procedures to monitor compliance with and to prevent any liability under Environmental Law.

19.16

Notice requirements

Each Obligor will give the Facility Agent prompt notice of the occurrence of any of the following events:

(a)

non-compliance in any material respect with any Environmental Law or Environmental License of which it is aware;


0010023-0003304 BK:44601953.9	58

(b)

any Environmental Claim or any other claim, notice or other communication served on it in respect of any alleged breach of any Environmental Law or Environmental License which could reasonably be expected to have a material adverse effect;

(c)

any actual or suspected Environmental Contamination which might have a material adverse effect;

(d)

any Reportable Event;

(e)

termination of any Plan maintained, or contributed to, by the Obligor or any ERISA Affiliate or any action that might result in termination of a Plan; or

(f)

complete or partial withdrawal from any Multiemployer Plan by the Obligor or any ERISA Affiliate or any action that might result in complete or partial withdrawal from any Multiemployer Plan.

In each notice delivered under this Clause, the relevant Obligor will include reasonable details concerning the occurrence that is the subject of the notice as well as the Obligor's proposed course of action, if any. Delivery of a notice under this Clause will not affect the Obligor's obligations to comply with any other provision of this Agreement.

19.17

Investment Company Act

No Obligor will, either by act or omission, become, or permit any other Obligor to become, an "investment company" or a company "controlled" by an "investment company", within the meaning of the United States Investment Company Act of 1940, as amended.

19.18

Public utility status

No Obligor will, either by act or omission, become or permit any other Obligor or, as a result of its obligations under this Agreement, the Lender to become subject to regulation under the United States Federal Power Act of 1920, as amended.

19.19

ERISA

No Obligor will take any action or omit to take any action or permit any Subsidiary or ERISA Affiliate to take any action or omit to take any action with respect to any Plan that might result in the imposition of a lien or other Security Interest on any property of the Obligor or any Subsidiary or otherwise have a material adverse effect.

19.20

Margin Stock

The Obligors will use the proceeds of the Loans only for the purpose described in Clause 3 (Purpose). No Obligor will engage in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations U and X issued by the Board of Governors of the United States Federal Reserve System). The Obligors shall procure that none of the proceeds of the Loans will be used for any purpose that will violate or result in the violation of Section 7 of the Securities Exchange Act of 1934 (or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X). If requested by the Facility Agent, the Obligors' Agent will furnish to the Facility Agent in connection with any Loan hereunder a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U.


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19.21

Solvency

The Parent will, at all times, maintain sufficient capital to conduct its current and proposed business and operations, maintain its ability to pay its debts as they become due, and continue to own property having a value – both at fair valuation and at present fair saleable value – greater than the total amount of the probable liability of the Parent on its debts and obligations (including this Agreement).

19.22

Subsidiary Borrowings

(a)	In this Clause 19.22:

Borrowings means:

(a)

the outstanding principal amount of any monies borrowed;

(b)

the outstanding principal amount of any debenture, bond, note, loan stock or other security;

(c)

the outstanding principal amount of any acceptance under any acceptance credit opened by a bank or other financial institution and not attributable to goods or documents of title to goods in the ordinary course of documentary credit transactions;

(d)

the principal amount, outstanding for more than 90 days on its original terms and created in connection with the payment of the acquisition price of any asset before or after the time of acquisition or possession by the party liable, where the advance or deferred payment is arranged primarily as a method of raising finance or financing the acquisition of an asset;

(e)

any fixed or minimum premium payable on the repayment or redemption of any instrument referred to in subparagraph (b) above; and

(f)

the outstanding principal amount of any indebtedness of any person of a type referred to in subparagraphs (a) - (e) above which is the subject of a guarantee indemnity and/or other form of assurance against financial loss.

For the avoidance of doubt, the amount of any provision for pension liabilities made in the accounts delivered in accordance with Clause 19.2 (Financial information) shall not constitute Borrowings for the purposes of this definition.

Subsidiary Borrowings means, at any time, the aggregate amount of all Borrowings of the Parent's Subsidiaries (other than the Borrower, Autoliv ASP, Inc., Veoneer (and each of its Subsidiaries) and Autoliv AB (publ)) at that time (without double counting in relation to intra‑Group Borrowings or guarantees given by one Subsidiary in relation to the Borrowings of another).

(b)

For the purposes of this Clause 19.22 figures shall be expressed in US Dollars and, where any currency has to be converted into US Dollars for this purpose, such conversion shall be made at the rate of exchange applied in the relevant financial accounts delivered under Clause 19.2 (Financial information).

(c)	The Parent shall procure that Subsidiary Borrowings shall at no time exceed US$600,000,000 (or its equivalent).


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19.23

Know your customer requirements

(a)

Each Obligor must promptly on the request of any Finance Party supply to that Finance Party documentation or other evidence which is reasonably requested by that Finance Party (whether for itself, on behalf of any Finance Party or any prospective new Lender) to enable a Finance Party or prospective new Lender to carry out and be satisfied with the results of all applicable know your customer requirements.

(b)	Each Lender must promptly on the request of the Facility Agent supply to the Facility Agent documentation or other evidence which is reasonably required by the Facility Agent to carry out and be satisfied with the results of all applicable know your customer requirements.

(c)	Each Lender agrees that any information it receives under this Clause 19.23 (Know your customer requirements) shall be kept confidential in accordance with Clause 29 (Disclosure of Information).

19.24

Anti-corruption law

(a)	Each Obligor shall ensure that it, and each of its Subsidiaries:

(i)

maintains policies designed to promote compliance with applicable anti-corruption laws; and

(ii)

complies at all times (to the best of its knowledge and belief, having made due and careful enquiry) with those laws.

(b)

No Obligor will (and each Obligor shall ensure that none of their respective Subsidiaries will) directly or indirectly use the proceeds of the Loans for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other applicable jurisdictions.

19.25

Sanctions

(a)	Each Obligor shall ensure that none of them, nor any of their respective Subsidiaries or their (or their respective Subsidiaries’) directors, officers or employees when acting on behalf of the Group or any Obligor:

(i)

is or will become a Sanctions Restricted Party;

(ii)

require any Finance Party to take any action that would cause it to violate any Sanctions Laws, it being understood that any Finance Party can refuse to honour any such request otherwise validly made by the Borrower under this Agreement; and

(iii)

breach any Sanctions Laws.

(b)	No Obligor will (and each Obligor shall ensure that none of their respective Subsidiaries will) directly or indirectly use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds:

(i)

to, or for the benefit of, any person who, at the time at which such proceeds are used, lent, contributed or otherwise made available to, or for the benefit of, that person, is a Sanctions Restricted Party;

(ii)

in a manner which would violate Sanctions Law applicable to any Finance Party.


0010023-0003304 BK:44601953.9	61

(c)	Each Obligor will maintain policies designed to p romote compliance by it and their respective Subsidiaries with Sanctions Laws applicable to the Obligors and their respective Subsidiaries and the business of each Obligor and their respective Subsidiaries.

19.26

Capital contribution to Veoneer

The Obligors shall not make a capital contribution into Veoneer which is greater than US$1,200,000,000.

20.

Default

20.1	Events of Default

Each of the events set out in this Clause 20 is an Event of Default (whether or not caused by any reason whatsoever outside the control of an Obligor or any other person).

20.2	Non-payment

An Obligor does not pay on the due date any amount payable by it under the Finance Documents at the place at and in the currency in which it is expressed to be payable and, if the non-payment is caused solely by administrative or technical error, or relates solely to non-payment of interest or fees, it is not remedied within three Business Days.

20.3	Breach of other obligations

An Obligor does not comply with any provision of the Finance Documents (other than Clause 19.25 (SanctionsSanctions)) and those referred to in Clause 20.2 (Non-payment)), provided that, if such non-compliance is capable of remedy, such non-compliance remains unremedied for a period of 14 days.

20.4	Misrepresentation

A representation, warranty or statement made or repeated or deemed to be repeated in or in connection with any Finance Document or in any document delivered by or on behalf of an Obligor under or in connection with any Finance Document (other than the representations and warranties in Clause 18.26 (Sanctions)) is incorrect in any material respect when made or repeated or deemed to be repeated.

20.5	Cross-default

(a)	Any Financial Indebtedness of a member of the Group is not paid when due or within any applicable grace period provided for in the relevant documentation.

(b)	An event of default howsoever described occurs under any document relating to Financial Indebtedness of a member of the Group.

(c)	Any Financial Indebtedness of a member of the Group becomes prematurely due and payable or is placed on demand as a result of an event of default (howsoever described) under the document relating to that Financial Indebtedness.

(d)	Any commitment for, or underwriting of, any Financial Indebtedness of a member of the Group is cancelled or suspended as a result of an event of default (howsoever described) under the document relating to that Financial Indebtedness.


0010023-0003304 BK:44601953.9	62

(e)	Any Security Interest securing Financial Indebtedness over any asset of a member of the Group becomes enforceable .

(f)	No Event of Default shall occur under this Clause 20.5 unless the aggregate amount of all the Financial Indebtedness with respect to which an event or events under paragraphs (a) to (e) above occurs or occur is at least US$80,000,000 (or its equivalent in other currencies).

20.6	Insolvency

(a)	An Obligor or any Material Subsidiary is, or is deemed for the purposes of any law to be, unable to pay its debts as they fall due or to be insolvent, or admits inability to pay its debts as they fall due.

(b)	An Obligor or any Material Subsidiary suspends making payments on all or any class of its debts or announces an intention to do so, or a moratorium is declared in respect of any of its indebtedness.

(c)	An Obligor or any Material Subsidiary, by reason of financial difficulties, begins negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to the readjustment or rescheduling of any of its indebtedness.

20.7	Insolvency proceedings

(a)	Any step (including petition, proposal or convening a meeting) is taken with a view to a composition, assignment or arrangement with any creditors of an Obligor or any Material Subsidiary.

(b)	A meeting of an Obligor or any Material Subsidiary is convened for the purpose of considering any resolution for (or to petition for) its winding-up or for its administration or any such resolution is passed.

(c)	Any person presents a petition for the winding-up or for the administration of an Obligor or any Material Subsidiary, other than a petition which is frivolous or vexatious, or which is dismissed within 30 days.

(d)	An order for the winding-up or administration of an Obligor or any Material Subsidiary is made.

(e)

Any other step (including petition, proposal or convening a meeting) is taken with a view to the rehabilitation, administration, custodianship, liquidation, winding-up or dissolution of an Obligor or any Material Subsidiary or any other insolvency proceedings involving an Obligor or any Material Subsidiary, unless such step is taken by a third party and is frivolous or vexatious.

20.8	Appointment of receivers and managers

(a)	Any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like is appointed in respect of an Obligor or any Material Subsidiary or any part of its assets.

(b)	The directors of an Obligor or any Material Subsidiary requests the appointment of a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like.

(c)	Any other steps are taken to enforce any Security Interest over any part of the assets of an Obligor or any Material Subsidiary, unless such steps are considered (in the reasonable opinion of the Facility Agent) to be frivolous or vexatious.


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20.9	Creditors' process

Any attachment, sequestration, distress or execution affects any asset of an Obligor or any Material Subsidiary and is not discharged within 14 days.

20.10

Analogous proceedings

There occurs, in relation to an Obligor or any Material Subsidiary, any event anywhere which appears to correspond with any of those mentioned in Clauses 20.6 (Insolvency) to 20.9 (Creditors' process) (inclusive).

20.11

Cessation of business

An Obligor or any Material Subsidiary ceases, or threatens to cease, to carry on all or a substantial part of its business other than as a direct consequence of the Spin-Off.

20.12

US Bankruptcy Laws

(a)	Any Obligor makes a general assignment for the benefit of creditors.

(b)	Any Obligor commences a voluntary case or proceeding under the United States Bankruptcy Code or under any other United States Federal or State bankruptcy, insolvency or other similar law (collectively US Bankruptcy Law ).

(c)	An involuntary case under any US Bankruptcy Law is commenced against any Obligor and the petition is not controverted within 30 days and is not dismissed or stayed within 90 days after commencement of the case.

(d)	A custodian, conservator, receiver, liquidator, assignee, trustee, sequestrator or other similar official is appointed under any US Bankruptcy Law for or takes charge of, all or substantial part of the property of any Obligor.

(e)	An order for relief or other order approving any case or proceeding is entered under any US Bankruptcy Law.

20.13

ERISA

(a)	Any event or condition occurs that presents a material risk that any Obligor or any ERISA Affiliate may incur a material liability to a Plan or, with respect to any Plan, to the United States Internal Revenue Service or to the United States Pension Benefit Guaranty Corporation.

(b)	Any failure by any Plan to satisfy the minimum funding requirements of section 412 or 430 of the US Code, as amended, or section 302 of ERISA applicable to such Plan, whether or not waived, where such failure could reasonably be expected to result in a material adverse effect.

20.14

Acceleration

(a)	Upon the occurrence of an Event of Default described in Clause 20.12 (US Bankruptcy Laws):

(i)

the Total Commitments will, if not already cancelled under this Agreement, immediately and automatically be cancelled; and

(ii)

the Loans, together with accrued interest, and all other amounts outstanding under the Finance Documents, will be immediately due and payable, without the requirement of notice or any other formality.


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(b)

On and at any time after the occurrence of an Event of Default for as long as such Event of Default is continuing (other than an Event of Default described in Clause 20.12 ( US Bankruptcy Laws )) the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Obligors ' Agent:

(i)

cancel the Total Commitments; and/or

(ii)

demand that all or part of the Loans, together with accrued interest and all other amounts accrued under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

(iii)

demand that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Facility Agent acting on the instructions of the Majority Lenders.

21.	The Facility Agent and the Co-ordinators

21.1	Appointment and duties of the Facility Agent

(a)	Each Finance Party (other than the Facility Agent) irrevocably appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.

(b)

Each Party appointing the Facility Agent irrevocably authorises the Facility Agent on its behalf to perform the duties and to exercise the rights, powers and discretions that are specifically delegated to it under or in connection with the Finance Documents, together with any other incidental rights, powers and discretions.

21.2	Duties of the Facility Agent

(a)	The Facility Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

(b)	Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

(c)	Paragraph (b) above shall not apply to any Novation Certificate.

(d)	Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

(e)	If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

(f)	If the Facility Agent is aware of the non-payment of any principal, interest, ticking fee or other fee payable to a Finance Party (other than the Facility Agent or a Co-ordinator) under this Agreement it shall promptly notify the other Finance Parties.

(g)	The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).


0010023-0003304 BK:44601953.9	65

21.3	Instructions

(a)	The Facility Agent shall:

(i)

unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it in accordance with any instructions given to it by:

(A)

all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(B)

in all other cases, the Majority Lenders; and

(ii)

not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above.

(b)

The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion. The Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

(c)

Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

(d)

The Facility Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

(e)	In the absence of instructions, the Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

(f)	The Facility Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.

21.4	Role of the Co-ordinators

Except as specifically provided in this Agreement, no Co-ordinator has any obligations of any kind to any other Party under or in connection with any Finance Document.

21.5	No fiduciary duties

(a)	Nothing in any Finance Document constitutes the Facility Agent or a Co-ordinator as a trustee or fiduciary of any other person.

(b)	Neither the Facility Agent nor a Co-ordinator shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.


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21.6	Business with the Group

The Facility Agent and each Co-ordinator may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

21.7	Rights and discretions

(a)	The Facility Agent may rely on

(i)

any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(ii)

assume that:

(A)

any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

(B)

unless it has received notice of revocation, that those instructions have not been revoked; and

(iii)

rely on a certificate from any person:

(A)

as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(B)

to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.

(b)	The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent) that:

(i)

no Default has occurred (unless it has actual knowledge of a Default arising under Clause 20.2 (Non-payment));

(ii)

any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and

(iii)

any notice or request made by the Parent is made on behalf of and with the consent and knowledge of all the Obligors.

(c)	The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

(d)

Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be necessary.

(e)	The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any


0010023-0003304 BK:44601953.9	67

other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so r elying.

(f)	The Facility Agent may act in relation to the Finance Documents through its officers, employees and agents.

(g)	Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

(h)

Notwithstanding any other provision of any Finance Document to the contrary, no Facility Agent or Co-ordinator is obliged to do or omit to do anything if it would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

(i)

Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

21.8	Responsibility for documentation

Neither the Facility Agent nor any Co-ordinator is responsible to any other Party for:

(a)

the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, a Co-ordinator, an Obligor or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or

(b)

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or

(c)

any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

21.9	No duty to monitor

The Facility Agent shall not be bound to enquire:

(a)

whether or not any Default has occurred;

(b)

as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

(c)

whether any other event specified in any Finance Document has occurred.


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21.10

Exclusion of liability

(a)	Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:

(i)

any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct;

(ii)

exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document, other than by reason of its gross negligence or wilful misconduct; or

(iii)

without prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation, for negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of:

(A)

any act, event or circumstance not reasonably within its control; or

(B)

the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

(b)

No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this subclause and enforce its terms under the Contracts (Rights of Third Parties) Act 1999.

(c)

The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.

(d)	Nothing in this Agreement shall oblige the Facility Agent or a Co-ordinator to carry out:

(i)

any "know your customer" or other checks in relation to any person; or

(ii)

any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

on behalf of any Lender and each Lender confirms to the Facility Agent and each Co-ordinator that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or Co-ordinator.


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(e)

Without prejudice to any provision of any Finance Document excluding or limit ing the Facility Agent's liability, any liability of the Facility Agent arising under or in connection with any Finance Document shall be limited to the amount of actual loss which has been suffered (as determined by reference to the date of default of th e Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss. In no event shal l the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.

21.11

Indemnities

(a)

Without limiting the liability of the Borrower under the Finance Documents, each Lender shall forthwith on demand indemnify the Facility Agent, for that Lender's proportion of any liability or loss (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Facility Agent in any way relating to or arising out of its acting as the Facility Agent, except to the extent that the liability or loss arises directly from the Facility Agent 's gross negligence or wilful misconduct (or, in the case of any cost, loss or liability pursuant to Clause 13.9 (Disruption to Payment Systems) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent).

(b)

A Lender's proportion of the liability or loss set out in paragraph (a) above will be the proportion which the Original Dollar Amount of its participation in the Loans (if any) bears to the Original Dollar Amount of all the Loans on the date of the demand. However, if there are no such Loans outstanding on the date of demand, then the proportion will be the proportion which its Commitment bears to the Total Commitments at the date of demand or, if the Total Commitments have then been cancelled, bore to the Total Commitments immediately before being cancelled.

21.12

Resignation of the Facility Agent

(a)	The Facility Agent may resign and appoint one of its Affiliates as successor by giving notice to the Lenders and the Parent.

(b)	Alternatively the Facility Agent may resign by giving 30 days' notice to the Lenders and the Parent, in which case the Majority Lenders (after consultation with the Parent) may appoint a successor Facility Agent.

(c)	If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Facility Agent (after consultation with the Parent) may appoint a successor Facility Agent.

(d)

If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement) agree with the proposed successor Facility Agent amendments to this Clause 21 and any other term of this Agreement dealing with the rights or obligations of the Facility Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Facility Agent's normal fee rates and those amendments will bind the Parties.


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(e)

The retiring Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for th e purposes of performing its functions as agent under the Finance Documents. The Parent shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.

(f)	The Facility Agent's resignation notice shall only take effect upon the appointment of a successor. On giving the notification, the successor Facility Agent will succeed to the position of the Facility Agent and the term Facility Agent will mean the successor Facility Agent.

(g)

Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 25.3 (Indemnity to the Facility Agent) and this Clause 21 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

(h)	After consultation with the Parent, the Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above. In this event, the Facility Agent shall resign in accordance with paragraph (b) above.

(i)

The Facility Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Facility Agent under the Finance Documents, either:

(i)

the Facility Agent fails to respond to a request under Clause 14.7 (FATCA Information) and the Parent or a Finance Party reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

(ii)

the information supplied by the Facility Agent pursuant to Clause 14.7 (FATCA Information) indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(iii)

the Facility Agent notifies the Parent and a Finance Party that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) the Parent or a Finance Party reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and the Parent or that Finance Party, by notice to the Facility Agent, requires it to resign.

21.13

Confidentiality

(a)	In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

(b)	If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or department and the Facility Agent shall not be deemed to have notice of it.


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21.14

Relationship with the Lenders

(a)	The Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

(i)

entitled to or liable for any payment due under any Finance Document on that day; and

(ii)

entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

(b)

Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address and (where communication by electronic mail or other electronic means is permitted under Clause 35.3 (Electronic communication)) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 35.2 (Addresses for notices) and paragraph (a)(ii) of Clause 35.3 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

21.15

Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Facility Agent and each Co-ordinator that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

(a)

the financial condition, status and nature of each member of the Group;

(b)

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

(c)

whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

(d)

the adequacy, accuracy or completeness any information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.


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21.16

Facility Agent's management time

Any amount payable to the Facility Agent under Clause 25.3 (Indemnity to the Facility Agent), Clause 23 (Expenses) and Clause 21.11 (Indemnities) shall include the cost of utilising the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Parent and the Lenders, and is in addition to any fee paid or payable to the Facility Agent under Clause 22 (Fees).

21.17

Deduction from amounts payable by the Facility Agent

If any Party owes an amount to the Facility Agent under the Finance Documents the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

21.18

Role of Reference Banks

(a)	No Reference Bank is under any obligation to provide a quotation or any other information to the Facility Agent.

(b)	No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.

(c)

No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any officer, employee or agent of each Reference Bank may rely on this Clause 21.18 subject to paragraph (d) of Clause 1.2 (Construction) and the provisions of the Contracts (Rights of Third Parties) Act 1999.

21.19

Third party Reference Banks

A Reference Bank which is not a Party may rely on Clause 21.18 (Role of Reference Banks), paragraph (b) of Clause 27.2 (Exceptions) and Clause 30 (Confidentiality of Funding Rates and Reference Bank Quotations) subject to paragraph (d) of Clause 1.2 (Construction) and the provisions of the Contracts (Rights of Third Parties) Act 1999.

22.

Fees

22.1	Upfront fee

The Parent shall pay to each Lender (through the Facility Agent) an upfront fee in an amount agreed in the Fee Letter between the Facilities Agent, the Lenders and the Parent. The upfront fee is payable on the Signing Date and the Drawdown Date as agreed in the Fee Letter.

22.2	Facility Agent's fee

The Parent shall pay to the Facility Agent for its own account an agency fee in the amount agreed in the Fee Letter between the Facility Agent and the Obligors. The agency fee is payable annually in advance. The first payment of this fee is payable within five Business Days of the date of this Agreement and each subsequent payment is payable on each anniversary of the date of this


0010023-0003304 BK:44601953.9	73

Agreement for so long as any amount is or may be outstanding u nder this Agreement or any Commitment is in force.

22.3	Ticking fee

(a)	The Parent shall pay to each Lender (through the Facility Agent) a ticking fee in US Dollars computed at the rate set out in the table below on the undrawn, uncancelled amount of that Lender’s Commitment:


Number of Months from Signing Date	Ticking Fee (per cent per annum of the applicable Margin)
From and including the Signing Date to the date falling one month after the Signing Date	0%
From and including the date falling one month after the Signing Date to the date falling two months after the Signing Date	10%
From and including the date falling two months after the Signing Date to the date falling three months after the Signing Date	20%
From and including date falling three months after the Signing Date to the date falling four months after the Signing Date	30%

(b)	Ticking fee will accrue on each day on which any Commitment is in force. For this purpose Loans shall be taken at their Original Dollar Amount.

(c)	Accrued ticking fee shall be payable quarterly in arrear from the date of this Agreement. Accrued ticking fee shall also be payable to the Facility Agent for the relevant Lender on the cancelled amount of its Commitment at the time the cancellation comes into effect.

(d)	No ticking fee is payable to a Lender on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.

22.4	Extension Fee

(a)	The Parent must pay to the Facility Agent for each Lender following delivery of an Extension Request pursuant to Clause 2.7 (Extension option) an extension fee computed at the rate of 0.05 per cent. of that Lender's extended Commitments.

(b)	The extension fee is payable on the Initial Termination Date, on the amount of each Lender's extended Commitments in respect of that Extension Request.

22.5

VAT

Any fee referred to in this Clause 22 is exclusive of any value added tax or any other direct tax which might be chargeable in connection with that fee. If any value added tax or other direct tax is so chargeable, it shall be paid by the Borrower at the same time as it pays the relevant fee.


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23.

Expen ses

23.1	Initial and special costs

The Parent shall forthwith on demand pay the Facility Agent and the Co-ordinators the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with:

(a)

the negotiation, preparation, printing and execution of:

(i)

this Agreement and any other documents referred to in this Agreement; and

(ii)

any other Finance Document executed after the date of this Agreement; and

(b)

any amendment, waiver, consent or suspension of rights (or any proposal for any of the foregoing) requested by or on behalf of an Obligor or, in the case of Clause 2.5 (Change of currency), the Facility Agent, and relating to a Finance Document or a document referred to in any Finance Document.

(c)

any other matter, not of an ordinary administrative nature, arising out of or in connection with a Finance Document.

23.2	Enforcement costs

The Parent shall forthwith on demand pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

24.	Stamp Duties

The Parent shall pay and forthwith on demand indemnify each Finance Party against any liability it incurs in respect of, any stamp, registration and similar tax which is or becomes payable in connection with the entry into, performance or enforcement of any Finance Document.

25.	Indemnities

25.1	Currency indemnity

(a)

If a Finance Party receives an amount in respect of an Obligor's liability under the Finance Documents or if that liability is converted into a claim, proof, judgment or order in a currency other than the currency (the contractual currency ) in which the amount is expressed to be payable under the relevant Finance Document:

(i)

that Obligor shall indemnify that Finance Party as an independent obligation against any loss or liability arising out of or as a result of the conversion;

(ii)

if the amount received by that Finance Party, when converted into the contractual currency at a market rate in the usual course of its business is less than the amount owed in the contractual currency, the Obligor concerned shall forthwith on demand pay to that Finance Party an amount in the contractual currency equal to the deficit; and

(iii)

the Obligor shall forthwith on demand pay to the each Finance Party forthwith on demand any exchange costs and taxes payable in connection with any such conversion.

(b)	Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable.


0010023-0003304 BK:44601953.9	75

25.2	Other indemnities

The Parent shall forthwith on demand indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of:

(a)

the occurrence of any Default;

(b)

a change in the currency of a country or the operation of Clause 2.5 (Change of currency), Clause 20.14 (Acceleration) or Clause 32 (Pro Rata Sharing); or

(c)

a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment or (other than by reason of negligence or default by that Finance Party) a Loan not being made after the Obligors' Agent has delivered a Request.

25.3	Indemnity to the Facility Agent

The Parent shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:

(a)

investigating any event which it reasonably believes is a Default;

(b)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

(c)

instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement.

26.	Evidence and Calculations

26.1

Accounts

Accounts maintained by a Finance Party in connection with this Agreement are prima facie evidence of the matters to which they relate.

26.2	Certificates and determinations

Any certification or determination by a Finance Party of a rate or amount under the Finance Documents is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

26.3	Calculations

Interest and the fees payable under Clause 22 (Fees) accrue from day to day and are calculated on the basis of the actual number of days elapsed and a year of 360 days or, where market practice otherwise dictates, 365 days.

27.	Amendments and Waivers

27.1

Procedure

(a)	Subject to Clause 27.2 (Exceptions), any term of the Finance Documents may be amended or waived with the agreement of the Obligors' Agent and the Majority Lenders. The Facility Agent may effect, on behalf of any Finance Party, an amendment or waiver permitted under this Clause.


0010023-0003304 BK:44601953.9	76

(b)	The Facility Agent shall promptly notify the other Parties of any amendment or waiver effected under paragraph (a) above , and any such amendment or waiver shall be binding on all the Parties.

27.2	Exceptions

(a)	An amendment or waiver which relates to:

(i)

the definitions of Majority Lenders, Sanctions Authority, Sanctions Laws, Sanctions List and Sanctions Restricted Party in Clause 1.1 (Definitions);

(ii)

an extension of the date for, or a decrease in an amount or a change in the currency of, any payment under the Finance Documents (including the Margin and any fee payable under Clause 22 (Fees));

(iii)

an increase in or extension of any Commitment, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility;

(iv)

a change in the guarantee of the Parent or Autoliv ASP, Inc.;

(v)

a term of a Finance Document which expressly requires the consent of all Lenders; or

(vi)

(A) Clause 2.3 (Finance Parties’ rights and obligations);

(B)

paragraphs (b) to (k) of Clause 8.5 (Mandatory Prepayment);

(C)

paragraphs (e) and (f) of Clause 19.3 (Information - miscellaneous);

(D)

Clause 18.26 (Sanctions);

(E)

Clause 19.2519.24 (Sanctions);

(F)

Clause 28.2 (Transfers by Lenders);

(G)

Clause 32 (Pro Rata Sharing);

(H)

Clause 37 (Jurisdiction);

(I)

Clause 38 (Governing Law); or

(J)

this Clause 27 (Amendments and Waivers),

must not be made without the prior consent of all the Lenders.

(b)	An amendment or waiver which relates to the rights or obligations of the Facility Agent or a Co-ordinator or a Reference Bank (each in their capacity as such) may not be effected without the consent of the Facility Agent, Co-ordinator or that Reference Bank, as the case may be.

(c)

If any Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any of the terms of any Finance Document or other vote of Lenders under the terms of this Agreement within 15 Business Days (unless the Parent and the Facility Agent agree to a longer time period in relation to any request) of that request being made, its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage (including unanimity) of Total Commitments has been obtained to approve that request.


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27.3	Disenfranchisement of Defaulting Lenders

(a)

For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender's Commitments will be reduced by the amount of its undrawn Commitments.

(b)	For the purposes of this Clause 27.3, the Facility Agent may assume that the following Lenders are Defaulting Lenders:

(i)

any Lender which has notified the Facility Agent that it has become a Defaulting Lender;

(ii)

any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of " Defaulting Lender " has occurred,

unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Facility Agent) or the Facility Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.

27.4	Excluded Commitments

If any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within five Business Days (unless the Parent and the Facility Agent agree to a longer time period in relation to any request) of that request being made:

(a)

its Commitment(s) shall not be included for the purpose of calculating the Total Commitments under the Facility when ascertaining whether any relevant percentage (including unanimity) of Total Commitments has been obtained to approve that request; and

(b)

its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.

27.5	Replacement of a Defaulting Lender

(a)	The Parent may, at any time a Lender has become and continues to be a Defaulting Lender, by giving not less than ten Business Days' prior written notice to the Facility Agent and such Lender:

(i)

replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause 28 (Changes to the Parties) all (and not part only) of its rights and obligations under this Agreement; or

(ii)

require such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to Clause ‎‎28 (Changes to the Parties) all (and not part only) of the undrawn Commitment of the Lender,

to a Lender or other bank or financial institution (a Replacement Lender ) selected by the Parent, and which (unless the Facility Agent is an Impaired Agent) is acceptable to the Facility Agent (acting reasonably) and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lender's participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender's participation in the outstanding utilisations and all accrued interest, broken funding costs (to indemnify that Lender for broken funding) and other amounts payable in relation thereto under the Finance Documents.


0010023-0003304 BK:44601953.9	78

(b)	Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions:

(i)

the Parent shall have no right to replace the Facility Agent;

(ii)

neither the Facility Agent nor the Defaulting Lender shall have any obligation to the Parent to find a Replacement Lender;

(iii)

the transfer must take place no later than ten Business Days after the notice referred to in paragraph (a) above; and

(iv)

in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents.

27.6	Waivers and Remedies Cumulative

The rights of each Finance Party under the Finance Documents:

(a)

may be exercised as often as necessary;

(b)

are cumulative and not exclusive of its rights under the general law; and

(c)

may be waived only in writing and specifically.

Delay in exercising or non-exercise of any such right is not a waiver of that right.

28.	Changes to the Parties

28.1	Transfers by Obligors

No Obligor may assign, transfer, novate or dispose of any of, or any interest in, its rights and/or obligations under the Finance Documents.

28.2	Transfers by Lenders

(a)

A Lender (the Existing Lender ) may, subject to paragraph (b) below, at any time assign, transfer or novate any of its Commitments and/or its rights and/or obligations under this Agreement to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the New Lender ).

(b)	(i) A transfer of part of a Commitment must be in a minimum amount of at least US$10,000,000 or its remaining Commitment, if less, unless the New Lender is another Lender or an Affiliate of a Lender or unless an Event of Default has occurred which is continuing.

(ii)

The prior consent of the Parent is required for any such assignment, transfer or novation, unless the New Lender is another Lender or an Affiliate of a Lender or unless an Event of Default has occurred which is continuing. However, the prior consent of the Parent must not be unreasonably withheld or delayed and will be deemed to have been given if, within ten Business Days of receipt by the Parent of an application for consent, it has not been expressly refused.


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(c)	The Facility Agent is not obliged to execute a Novation Certificate until it has completed all know your cus tomer requirements to its satisfaction. The Facility Agent must promptly notify the Existing Lender and the New Lender if there are any such requirements.

(d)	A transfer of obligations will be effective only if either:

(i)

the obligations are novated in accordance with Clause 28.3 (Procedure for novations); or

(ii)

the New Lender confirms to the Facility Agent and the Obligors' Agent that it undertakes to be bound by the terms of this Agreement as a Lender in form and substance satisfactory to the Facility Agent. On the transfer becoming effective in this manner the Existing Lender shall be relieved of its obligations under this Agreement to the extent that they are transferred to the New Lender.

(e)	Nothing in this Agreement restricts the ability of a Lender to subcontract an obligation if that Lender remains liable under this Agreement for that obligation.

(f)

On each occasion an Existing Lender assigns, transfers or novates any of its Commitments, or any of its rights and/or obligations under this Agreement the New Lender shall, on the date the assignment, transfer and/or novation takes effect, pay to the Facility Agent for its own account a fee of US$2,500.

(g)	An Existing Lender is not responsible to a New Lender for:

(i)

the execution, genuineness, validity, enforceability or sufficiency of any Finance Document or any other document;

(ii)

the collectability of amounts payable under any Finance Document; or

(iii)

the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document.

(h)	Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

(i)

has made its own independent investigation and assessment of the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

(ii)

will continue to make its own independent appraisal of the creditworthiness of the Obligors and their related entities while any amount is or may be outstanding under this Agreement or any Commitment is in force.

(i)	Nothing in any Finance Document obliges an Existing Lender to:

(i)

accept a re‑transfer from a New Lender of any of the Commitments and/or rights and/or obligations assigned, transferred or novated under this Clause 28; or

(ii)

support any losses incurred by the New Lender by reason of the non‑performance by the Obligors of their obligations under the Finance Documents or otherwise.

(j)	Any reference in this Agreement to a Lender includes a New Lender but excludes a Lender if no amount is or may be owed to or by it under this Agreement and its Commitment has been cancelled or reduced to nil.


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28.3	Procedure for novations

(a)	A novation is effected if:

(i)

the Existing Lender and the New Lender deliver to the Facility Agent a duly completed certificate, substantially in the form of Schedule 4 (a Novation Certificate ); and

(ii)

the Facility Agent executes that Novation Certificate.

(b)	Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to execute any duly completed Novation Certificate on its behalf.

(c)	To the extent that they are expressed to be the subject of the novation in the Novation Certificate:

(i)

the Existing Lender and the other Parties (in this paragraph (c), the Existing Parties ) will be released from their obligations to each other;

(ii)

the New Lender and the Existing Parties will assume obligations towards each other which differ from the obligations discharged pursuant to paragraph (i) above only insofar as they are owed to or assumed by the New Lender instead of the Existing Lender;

(iii)

the rights of the Existing Lender against the Existing Parties and vice versa will be cancelled; and

(iv)

the New Lender and the Existing Parties will acquire rights against each other which differ from the rights cancelled pursuant to paragraph (iii) above only insofar as they are exercisable by or against the New Lender instead of the Existing Lender,

all on the date of execution of the Novation Certificate by the Facility Agent or, if later, the date specified in the Novation Certificate (the Transfer Date ).

28.4	The Register

The Facility Agent, acting solely for this purpose as an agent of the Obligors, shall maintain at one of its offices a copy of each Novation Certificate delivered to it and a register (the Register ) for the recordation of the names and addresses of each Lender and the Commitments of and obligations owing to each Lender. Without limitation of any other provision of this Clause 28 (Changes to the Parties), no transfer of an interest in a Loan or Commitment hereunder shall be effective unless and until recorded in the Register. The entries in the Register shall be conclusive absent manifest error and each Obligor, the Facility Agent and each Lender shall treat each person whose name is recorded in the Register as a Lender notwithstanding any notice to the contrary.

28.5	Security over Lenders' rights

In addition to the other rights provided to Lenders under this Clause ‎28, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender by way of any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank, except that no such charge, assignment or Security Interest shall:

(a)

release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or


0010023-0003304 BK:44601953.9	81

(b)

require any payments to be made by an Obligor other than or in exc ess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

28.6	Pro rata interest settlement

If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 28.3 (‎Procedure for novations) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

(a)

any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ( Accrued Amounts ) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six months, on the next of the dates which falls at six monthly intervals after the first day of that Interest Period); and

(b)

the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that:

(i)

when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(ii)

the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 28.6, have been payable to it on that date, but after deduction of the Accrued Amounts.

28.7	Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent may (in consultation with the Borrower and the Lenders) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.

29.	Disclosure of Information

29.1	Disclosure (General)

Each Lender shall keep confidential any and all information made available to it by any Obligor pursuant to or in connection with the Finance Documents, other than information:

(a)

which at the relevant time is in the public domain; or

(b)

which, after such information has been made available to that Lender, becomes generally available to third parties by publication or otherwise through no breach of this Clause 29 by that Lender; or

(c)

which was lawfully in the possession of that Lender or its advisers prior to such disclosure (as evidenced by that Lender's written records or the written records of that Lender's advisers) and which was not acquired directly or indirectly from an Obligor; or

(d)

disclosed to any person:


0010023-0003304 BK:44601953.9	82

(i)

to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock e xchange or pursuant to any applicable law or regulation;

(ii)

to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; or

(e)

the disclosure of which is made to an Affiliate of that Lender in circumstances where it is that Lender's usual practice to make such disclosure or where such disclosure is required as part of that Lender's management or reporting policies or where such disclosure is in the reasonable opinion of that Lender required to protect its position, or to assist in the recovery of amounts, hereunder; or

(f)

the disclosure of which is made to any person with whom it is proposing to enter, or has entered, into any kind of transfer, participation or other agreement in relation to this Agreement; or

(g)

the disclosure of which is made by that Lender to its professional advisers; or

(h)

which is disclosed to another party to this Agreement in the specific circumstances whereby it is made available to that party,

provided that, if a Lender makes such information available to any person in accordance with paragraphs (d), (e), (f) or (g) above, it takes reasonable endeavours to ensure that such party keeps that information confidential to the same extent as set out above.

29.2	Disclosure to numbering service providers

(a)	Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:

(i)

the names of the Obligors;

(ii)

the country of domicile of the Obligors;

(iii)

the place of incorporation of the Obligors;

(iv)

the date of this Agreement;

(v)

Clause 38 (Governing law);

(vi)

the names of the Facility Agent and the Co-ordinators;

(vii)

the date of each amendment and restatement of this Agreement;

(viii)

the amount of the Total Commitments;

(ix)

the currencies of the Facility;

(x)

the type of the Facility;

(xi)

the ranking of the Facility;


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(xii)

the Termination Date for the Facility;

(xiii)

changes to any of the information previously supplied pursuant to paragraphs (i) to (xii) above; and

(xiv)

such other information agreed between such Finance Party and the Parent,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

(b)

The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

(c)	The Parent represents that none of the information set out in paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.

(d)	The Facility Agent shall notify the Parent and the other Finance Parties of:

(i)

the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or one or more Obligors; and

(ii)

the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.

30.	Confidentiality of Funding Rates and Reference Bank Quotations

30.1	Confidentiality and disclosure

(a)	The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below.

(b)	The Facility Agent may disclose:

(i)

any Funding Rate (but not any Reference Bank Quotation) to the Borrower pursuant to Clause 10.5 (Notification of rates of interest); and

(ii)

any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Facility Agent and the relevant Lender or Reference Bank, as the case may be.

(c)	The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to:

(i)

any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (i) is informed in writing


0010023-0003304 BK:44601953.9	84

of its confidential nature and that it may be pric e-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requiremen ts of confidentiality in relation to it;

(ii)

any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;

(iii)

any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and

(iv)

any person with the consent of the relevant Lender or Reference Bank, as the case may be.

(d)

The Facility Agent's obligations in this Clause 30 relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 10.5 (Notification of rates of interest) provided that (other than pursuant to paragraph (b)(i) above) the Facility Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.

30.2	Related obligations

(a)

The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose.

(b)	The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:

(i)

of the circumstances of any disclosure made pursuant to paragraph (c)(ii) of Clause 30.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

(ii)

upon becoming aware that any information has been disclosed in breach of this Clause 30.

30.3	No Event of Default

No Event of Default will occur under Clause 20.3 (Breach of other obligations) by reason only of an Obligor's failure to comply with this Clause 30.


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31.

Set- Off

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

32.	Pro Rata Sharing

32.1	Redistribution

If any amount owing by an Obligor under the Finance Documents to a Finance Party (the recovering Finance Party ) is discharged by payment, set‑off or any other manner other than in accordance with Clause 13 (Payments) (a recovery ), then:

(a)

the recovering Finance Party shall, within three Business Days, notify details of the recovery to the Facility Agent;

(b)

the Facility Agent shall determine whether the recovery is in excess of the amount which the recovering Finance Party would have received had the recovery been received by the Facility Agent and distributed in accordance with Clause 13 (Payments);

(c)

subject to Clause 32.3 (Exceptions), the recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the redistribution ) equal to the excess;

(d)

the Facility Agent shall treat the redistribution as if it were a payment by the relevant Obligor under Clause 13 (Payments) and shall pay the redistribution to the Finance Parties (other than the recovering Finance Party) in accordance with Clause 13.8 (Partial payments); and

(e)

after payment of the full redistribution, the recovering Finance Party will be subrogated to the portion of the claims paid under paragraph (d) above and the relevant Obligor will owe the recovering Finance Party a debt which is equal to the redistribution, immediately payable and of the type originally discharged.

32.2	Reversal of redistribution

If under Clause 32.1 (Redistribution):

(a)

a recovering Finance Party must subsequently return a recovery, or an amount measured by reference to a recovery, to an Obligor; and

(b)

the recovering Finance Party has paid a redistribution in relation to that recovery,

each Finance Party shall, within three Business Days of demand by the recovering Finance Party through the Facility Agent, reimburse the recovering Finance Party all or the appropriate portion of the redistribution paid to that Finance Party together with interest on the amount to be returned to the recovering Finance Party for a period whilst it held the re-distribution. Thereupon the subrogation in paragraph (e) of Clause 32.1 (Redistribution) will operate in reverse to the extent of the reimbursement.


0010023-0003304 BK:44601953.9	86

32.3	Exceptions

(a)	A recovering Finance Party is not obliged to pay a redistribution to the extent that it would not, after the payment, have a valid claim against the Obligor concerned in the amount of the redistribution pursuant to paragraph (e) of Clause 32.1 (Redistribution).

(b)

A recovering Finance Party is not obliged to share with any other Finance Party any amount which the recovering Finance Party has received or recovered as a result of taking legal proceedings, if the other Finance Party had an opportunity to participate in those legal proceedings but did not do so and did not take separate legal proceedings.

33.	Severability

If a provision of any Finance Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect:

(a)

the validity or enforceability in that jurisdiction of any other provision of the Finance Documents; or

(b)

the validity or enforceability in other jurisdictions of that or any other provision of the Finance Documents.

34.	Counterparts

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

35.

Notices

35.1	Giving of notices

All notices or other communications under or in connection with this Agreement shall be given in writing and, unless otherwise stated, may be made by letter or, in the case of a Request and information provided by the Parent or the Facility Agent in relation to Clauses 19.2 (Financial information) and 19.3 (Information - miscellaneous) only, by e-mail. Any such notice will be deemed to be given as follows:

(a)

if by letter, when delivered personally or on actual receipt; and

(b)

if by e-mail, when actually received in readable form.

However, a notice given in accordance with the above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place.

35.2	Addresses for notices

(a)	The address of each Party (other than the Obligors and the Facility Agent) for all notices under or in connection with this Agreement is:

(i)

those notified by that Party for this purpose to the Facility Agent on or before the date it becomes a Party; or

(ii)

any other notified by that Party for this purpose to the Facility Agent by not less than five Business Days' notice.


0010023-0003304 BK:44601953.9	87

(b)	Th e address of the Parent is:

Autoliv, Inc,

Box 70381

SE-107 24 Stockholm

Sweden

Attention: Treasurer

With a copy to:

Attention: VP for Legal Affairs, General Counsel and Secretary

or such other as the Parent may notify to the Facility Agent by not less than five Business Days' notice.

(c)	The address number of the other Guarantor is:

Autoliv ASP, Inc.

3350 Airport Road

Ogden

Utah 84405

Attention: Director of Finance

With a copy to:

Attention: VP for Legal Affairs, General Counsel and Secretary

or such other as the Borrower may notify to the Facility Agent by not less than five Business Days' notice.

(d)	The address of the Facility Agent is:

Facility Agent:

Skandinaviska Enskilda Banken AB (publ)

Loans Agency

One Carter Lane

London

EC4V 5AN

United Kingdom

Email: agency@seb.co.uk

Attention: Loans Agency

With a copy to:

Skandinaviska Enskilda Banken AB (publ)

Email: sco@seb.se

Attention: Structured Credit Operations

or such other as the Facility Agent may notify to the other Parties by not less than five Business Days' notice.


0010023-0003304 BK:44601953.9	88

(e)	Subject to Clause 35.4 ( Communication when the Facility Agent is an Impaired Agent ) all notices from or to an Obligor or the Obligors' Agent shall be sent through the Facil ity Agent.

(f)	Promptly upon changing its address, the Facility Agent shall notify the other Parties.

35.3	Electronic communication

(a)	Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:

(i)

notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and

(ii)

notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.

(b)	The Parties agree that, unless and until notified to the contrary, any such electronic communication as specified in paragraph (a) above is to be an accepted form of communication.

(c)

Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.

(d)

Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5:00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

(e)	Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 35.3.

35.4	Communication when the Facility Agent is an Impaired Agent

If the Facility Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Facility Agent, communicate with each other directly and (while the Facility Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Facility Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Facility Agent has been appointed.

36.

Language

(a)	Any notice given under or in connection with any Finance Document shall be in English.

(b)	All other documents provided under or in connection with any Finance Document shall be:

(i)

in English; or

(ii)

if not in English, accompanied by a certified English translation and, in this case, the English translation shall prevail unless the document is a statutory or other official document.


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37.	Jurisdi ction

37.1	Submission

(a)

For the benefit of each Finance Party, each Obligor agrees that the courts of England have jurisdiction to settle any disputes in connection with any Finance Document (including a dispute relating to the existence, validity or termination of any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document) and accordingly submits to the jurisdiction of the English courts.

(b)

Without prejudice to paragraph (a) above and for the benefit of each Finance Party, each Obligor agrees that any New York State court or Federal court sitting in New York City has jurisdiction to settle any disputes in connection with any Finance Document and accordingly submits to the jurisdiction of those courts.

(c)	The English and New York courts are the most appropriate and convenient courts to settle any such dispute and each Obligor waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document.

37.2	Service of process

Without prejudice to any other mode of service, each Obligor:

(a)

irrevocably appoints:

(i)

Airbags International Limited, Viking Way, Congleton, Cheshire, CW12 1TT United Kingdom, as agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(ii)

CT Corporation System, 111 Eighth Avenue, 13 Floor, New York, New York 10011, as its agent for service of process in relation to any proceedings before any courts located in the State of New York in connection with any Finance Document;

(b)

agrees to maintain agents for service of process in England and in the State of New York until all Commitments have terminated and the Loans and all other amounts payable under the Finance Documents have been finally, irrevocable and indefeasibly repaid in full;

(c)

agrees that failure by a process agent to notify the Obligor of the process will not invalidate the proceedings concerned;

(d)

consents to the service of process relating to any proceedings by prepaid posting of a copy of the process to its address for the time being applying under Clause 35.2 (Addresses for notices); and

(e)

agrees that if the appointment of any person mentioned in paragraph (a) above ceases to be effective, the Obligor shall immediately appoint a further person in England or in the State of New York, as appropriate, to accept service of process on its behalf in England or in the State of New York, as appropriate, and, if the Obligor does not appoint a process agent within 15 days, the Lender is entitled and authorised to appoint a process agent for the Obligor by notice to the Obligor.


0010023-0003304 BK:44601953.9	90

37.3	Forum convenience and enforcement abroad

Each Obligor:

(a)

waives objection to the English and New York State and Federal courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with any Finance Document; and

(b)

agrees that a judgment or order of an English or New York State or Federal court in connection with any Finance Document is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

37.4	Non-exclusivity

Nothing in this Clause 37 limits the right of a Finance Party to bring proceedings against an Obligor in connection with any Finance Document:

(a)

in any other court of competent jurisdiction; or

(b)

concurrently in more than one jurisdiction.

38.	Governing Law

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

39.	Integration

The Finance Documents contain the complete agreement between the parties on the matters to which they relate and supersede all prior commitments, agreements and understandings, whether written or oral, on those matters.

40.	Waiver of immunity

Each Obligor irrevocably and unconditionally:

(a)

agrees not to claim any immunity from proceedings brought by a Finance Party against it in relation to a Finance Document and to ensure that no such claim is made on its behalf;

(b)

consents generally to the giving of any relief or the issue of any process in connection with those proceedings; and

(c)

waives all rights of immunity in respect of it or its assets.

41.	Waiver of Jury Trial

THE OBLIGORS AND THE FINANCE PARTIES WAIVE ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED ON OR ARISING FROM ANY FINANCE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THE FINANCE DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


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42.	USA Patr iot Act

Each Finance Party that is subject to the requirements of the USA Patriot Act hereby notifies each Obligor that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Obligors, which information includes the name and address of the Obligors and other information that will allow such Finance Party to identify the Obligors in accordance with the USA Patriot Act. Each Obligor agrees that it will provide each Finance Party with such information as it may request in order for such Finance Party to satisfy the requirements of the USA Patriot Act.

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.


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Schedule 1

Commitments

Lenders	Commitments US$
Skandinaviska Enskilda Banken AB (publ)	400,000,000
JPMorgan Chase Bank, N.A., London Branch	400,000,000
Total Commitments	US$800,000,000


0010023-0003304 BK:44601953.9	93

Schedule 2

Conditions Precedent Documents

To be delivered before the signing date

1.	Each Obligor

(a)	A copy of a resolution of the board of directors of each Obligor:

(i)

approving the terms of, and the transactions contemplated by, this Agreement and resolving that it execute this Agreement;

(ii)

authorizing a specified person or persons to execute this Agreement on its behalf; and

(iii)

authorizing a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with this Agreement.

2.	Other documents

2.1	Each Fee Letter referred to in Clause 22 (Fees), executed by the parties to it.

To be delivered within two weeks of the signing date

3.	Each Obligor

(a)	A copy of the memorandum and articles of association and certificate of incorporation of each Obligor.

(b)	A specimen of the signature of each person authorised by the resolution referred to in paragraph 1(a) above.

(c)	A certificate of a director of each Obligor confirming that the borrowing or guaranteeing, as appropriate, of the Commitment in full would not cause any borrowing or guaranteeing limit binding on it to be exceeded.

4.	Other documents

(a)	A certificate of an authorised signatory of the Parent certifying that each copy document specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

(b)	Evidence that the process agents referred to in Clause 37.2 (Service of process) have accepted their appointments under that Clause.

(c)

Confirmation from the Parent that it is not, to the best of its knowledge and belief after full and due enquiry, in breach of any other agreement to which it is a party (other than any immaterial breaches which cannot be expected to have an adverse effect on the interests of the Finance Parties under the Finance Documents).

(d)

A copy of any other authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary in connection with the entry into and performance of, and the transactions contemplated by, any Finance Document or for the validity and enforceability of any Finance Document.


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5.	Legal opinions

(a)	A legal opinion of Allen & Overy LLP, New York, legal advisers in the State of New York, USA to the Finance Parties.

(b)	A legal opinion of Taft Stettinius & Hollister LLP (or any other Indiana law firm approved by the Facility Agent), legal advisers in the State of Indiana, USA to the Parent.

(c)	A legal opinion of Allen & Overy LLP, London, legal advisers in England to the Finance Parties.

6.	Other documents and evidence

(a)	Such documentation and other evidence requested by a Finance Party which it is entitled to request in accordance with paragraph (a) of Clause 19.23 (Know your customer requirements).

(b)	A certificate of a director of the Parent identifying each Material Subsidiary of the Parent as at 30 April 2018.

(c)	The press release announcing the Parent’s board approval of the Spin-Off and the declaration of the distribution in kind of the shares in Veoneer by the Parent to its shareholders.

To be delivered before the first request

7.	Further documents and evidence

(a)	A certificate from the secretary of the Parent confirming that the record date in respect of the Spin-Off has occurred and that the Parent will complete the Spin-Off.

(b)	Evidence that all fees and expenses then due and payable from the Obligors under this Agreement have been or will be paid in accordance with the relevant Fee Letter.


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Schedule 3

Form of Request


To:	[Skandinaviska Enskilda Banken AB (publ)] as Facility Agent]

From:	[OBLIGORS' AGENT]	Date:[●]

Autoliv Inc. US$800,000,000 Credit Agreement

dated [●] 2018 ( the Agreement)

1.	We wish to utilise the Facility as follows:

(a)

Drawdown Date: [ ]

(b)

Amount: [ ]

(c)

Currency: [ ]

(d)

Interest Period: [ ]

(e)

Payment instructions: [ ]

2.	We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Request.

By:

[OBLIGORS' AGENT]

Authorised Signatory


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Schedule 4

Form of Novation Certificate


To:	[Skandinaviska Enskilda Banken AB (publ)] as Facility Agent

From:	[THE EXISTING LENDER] and [THE NEW LENDER]	Date:	[ ]

Autoliv Inc. US$800,000,000 Credit Agreement

dated [●] 2018 ( the Agreement)

We refer to Clause 28.3 (Procedure for novations).

1.	We [ ] (the Existing Lender ) and [ ] (the New Lender ) agree to the Existing Lender and the New Lender novating the Existing Lender's Commitment (or part) and/or rights and obligations referred to in the Schedule in accordance with Clause 28.3 (Procedure for novations).

2.	The proposed Transfer Date is [date of novation].

3.	The Facility Office and address for notices of the New Lender for the purposes of Clause 35.2 (Addresses for notices) are set out in the Schedule.

4.	This Novation Certificate and any non-contractual obligations arising out of it are governed by English law.

5.	This Novation Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Novation Certificate.

6.	This Novation Certificate has been entered into on the date stated at the beginning of this Novation Certificate.

THE SCHEDULE

Commitments/rights and obligations to be novated

[Insert relevant details]


[Existing Lender]	[New Lender]
By:	By:
Date:	Date:
[ New Lender ]
[Facility Office	Address for notices]
[AGENT]
By:
Date:


0010023-0003304 BK:44601953.9	97

Schedule 5

Form of Compliance Certificate


To:	[Skandinaviska Enskilda Banken AB (publ)] as Facility Agent

From:	AUTOLIV INC.	Date:	[ ]

Autoliv Inc. US$800,000,000 Credit Agreement

dated [●] 2018 ( the Agreement)

1.	This is the Compliance Certificate referred to in Clause 19.5 (Compliance certificates) of the Agreement.

2.	We confirm that as at [relevant balance sheet date] Subsidiary Borrowings were [ ] (Covenant level requirement not more than US$600,000,000).

3.	We confirm the credit rating as at the date of this Compliance Certificate of the long term unsecured and unsubordinated debt of Autliv Inc. given by:

(a)	Moody’s was [ ]; and

(b)	Standard & Poor’s was [ ].

4.	We confirm that no Default is outstanding as at the date of this Compliance Certificate. *

By:

AUTOLIV INC.

*	If this statement cannot be made, the certificate should identify any Default that is outstanding and the steps, if any, being taken to remedy it.


0010023-0003304 BK:44601953.9	98

Schedule 6

Form of Increase Confirmation


To:		[Skandinaviska Enskilda Banken AB (publ)] as Facility Agent and Autoliv, Inc. as the Parent

From:		[the Increase Lender] (the Increase Lender )

Dated:

Autoliv Inc. US$800,000,000 Credit Agreement

dated [●] 2018 ( the Agreement)

1.	We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation.

2.	We refer to Clause 2.6 (Increase) of the Agreement.

3.	The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the Relevant Commitment ) as if it was an Original Lender under the Agreement.

4.	The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the Increase Date ) is [ ].

5.	On the Increase Date, the Increase Lender becomes party to the relevant Finance Documents as a Lender.

6.	The Facility Office and address and attention details for notices to the Increase Lender for the purposes of Clause ‎35.2 (Addresses for notices) are set out in the Schedule.

7.	The Increase Lender expressly acknowledges the limitations on the Lenders' obligations referred to in paragraph (f) of Clause 2.6 (Increase).

8.	The Increase Lender confirms, for the benefit of the Facility Agent and without liability to any Obligor, that it is not a Defaulting Lender.

9.	This Increase Confirmation and any non-contractual obligations arising out of or in connection with it are governed by English law.

10.	This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation.

11.	This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation.


0010023-0003304 BK:44601953.9	99

THE SCHEDULE

Relevant Commitment/rights and obligations to be assumed by the Increase Lender

[ insert relevant details ]

[ Facility office address and attention details for notices and account details for payments ]

[ Increase Lender ]

By:

This Increase Confirmation is accepted as an Increase Confirmation for the purposes of the Agreement by the Facility Agent, and the Increase Date is confirmed as [●].

Facility Agent

By:


0010023-0003304 BK:44601953.9	100

Schedule 7

Form of Extension Request


To:		Skandinaviska Enskilda Banken AB (publ) as Facility Agent

From:		The Parent

Autoliv Inc. US$800,000,000 Credit Agreement

dated [●] 2018 ( the Agreement)

1.	We wish to extend the Termination Date of the Agreement by six months (the Extension ).

2.	We confirm that, as at the date of this Extension Request:

(a)

no default is outstanding or might result from the Extension; and

(b)

the Repeating Representations are correct in all material respects.

3.	This Extension Request is irrevocable.


By:		…………………………………………………

The Parent as Obligors’ Agent

[Authorised Signatory]


0010023-0003304 BK:44601953.9	101

Signatories

Parent

AUTOLIV, INC.

By:	/s/	Mats Backman
		Mats Backman

Guarantors

AUTOLIV, INC.

By:	/s/	Mats Backman
		Mats Backman

AUTOLIV ASP, INC.

By:	/s/	Anthony Nellis
		Anthony Nellis

Borrower

AUTOLIV, INC.

By:	/s/	Mats Backman
		Mats Backman

Signature pages to facilities agreement

Co-ordinators

J.P. MORGAN SECURITIES PLC

By:	/s/	Liv Loge
Liv Loge, Managing Director

Signature pages to facilities agreement

SKANDINAVISKA ENSKILDA BANKEN AB (publ)

By:	/s/	Penny Neville-Park		/s/	Alison Butt
		Penny Neville-Park			Alison Butt

Signature pages to facilities agreement

Mandated Lead Arrangers

J.P. MORGAN SECURITIES PLC

By:	/s/	Liv Loge
		Liv Loge, Managing Director

Signature pages to facilities agreement

SKANDINAVISKA ENSKILDA BANKEN AB (publ)

By:	/s/	Penny Neville-Park		/s/	Alison Butt
		Penny Neville-Park			Alison Butt

Signature pages to facilities agreement

Original Lenders

JPMORGAN CHASE BANK, N.A., LONDON BRANCH

By:	/s/	Philip Garner
		Philip Garner
		Vice President

Signature pages to facilities agreement

SKANDINAVISKA ENSKILDA BANKEN AB (publ)

By:	/s/	Penny Neville-Park		/s/	Alison Butt
		Penny Neville-Park			Alison Butt

Signature pages to facilities agreement

Facility Agent

SKANDINAVISKA ENSKILDA BANKEN AB (publ)

By:	/s/	Penny Neville-Park		/s/	Alison Butt
		Penny Neville-Park			Alison Butt

Signature pages to facilities agreement

Exhibit 10.5

MUTUAL SEPARATION AGREEMENT

This agreement regarding termination of employment, “the Agreement”, is entered into

BETWEEN:

(1)	Autoliv Inc., referred to as “the Company”;

(2)	Steve Fredin, referred to as “the Employee”; together referred to as “the Parties”.

1-	Background

1.1	The Employee is employed by the Company pursuant to the terms and conditions outlined in the Employee’s employment agreement dated August 8, 2011.

1.2	The Company and the Employee have agreed that the employment of the Employee shall cease on the terms set out in this agreement. This agreement will take effect on September 1, 2018, “the Agreement Effective Date”.

The Employee shall be released from all duties linked to the Company on January 1, 2019, “the Release Date”, except for being reasonably available over the phone and email to answer any questions that the Company may have. Apart from what is explicitly stated below, the agreement supersedes all earlier oral and written agreements between the Company, or any associated company, and the Employee, relating to the employment of the Employee. For the purpose of this agreement, “associated company” means a legal entity directly or indirectly controlling or controlled by or under common control with the Company, irrespective of the country of registration of such legal entity.

The provisions of this Separation Agreement, including the avoidance of doubt section 5.6 below, shall not waive or terminate any rights to indemnification the Employee may have under the Company’s Restated Certificate of Incorporation, Re-stated Bylaws or the Indemnification Agreement between the Employee and the Company.

2-	Termination of the Employment

2.1	The Employee’s employment with the Company shall cease 18 calendar months after the Agreement Effective Date, “the Termination Date”. Any change to be requested by the Employee to apply an earlier termination date due to new employment is subject to the written approval of the Company.

3-	Compensation

3.1

The Employee shall be entitled to his current monthly salary, pension and other current perquisites until the termination date. Other perquisites include 401(k), non-qualified retirement plan, medical, dental, vision, long-term disability life insurance, and company vehicle benefits as per U.S. policy. Employee remains eligible for vested benefits in accordance with existing retiree benefits in accordance with those established policies, plans and procedures.

3.2	The Employee shall be entitled to “the Short Term Incentive” in accordance with the Company’s (Autoliv Inc.’s) policy for the performance year 2018.

3.3

Not later than one month after the Termination Date, the Company shall pay a lump sum severance payment, “the Severance Payment”, equivalent to 12-months equivalent of the clauses (i) through (iii) of Section 6.1 of the Severance Agreement (dated August 8, 2011) signed between the Parties. The payment does not constitute a basis for any form of pension entitlement or right to vacation pay.

1 (3)

3.4	Not later than one month following the Termination Date, the Company shall pay any vacation pay accrued until the Agreement Effective Date. Any vacation days earned between the Release Date and the Termination Date will be registered as used by the Employee.

3.5

The Assignee is responsible for the reporting and payment of any and all income taxes levied on him for all remuneration, allowances and benefits provided by the company pursuant to this agreement or otherwise in, in accordance with the laws of the USA and Sweden. Such remuneration, benefits, reimbursements and allowances shall be includible in the taxable income of the assignee in accordance with the laws of the USA and Sweden and subject to normal payroll deductions to the extent required by law.

The company will compensate the Assignee for any additional tax cost that occurs on his employment income as a result of his assignment in Sweden for Project Nova for the period between October 2017 and December 2018. Employment income includes base salary, STI, LTI and benefits in kind provided during the assignment. The company will also provide the Assignee with assistance to prepare and file the annual tax return in the countries where he needs to file a tax return necessary.

A reconciliation of the amount of taxes paid will determine that the assignee and the company pay the correct amount of taxes respectively and that the assignee has not suffered a higher tax burden from having his employment income taxed in Sweden. A third party as appointed by the company (and the cost associated with such determination shall be borne by the company) determines the grounds for the division of the amount of taxes between the parties. The third party will assist the parties with this tax reconciliation .

4-	Undertakings

4.1

The Employee has an obligation of loyalty that follows by an employment relationship. Accordingly, the Employee has a duty to be loyal to the Company until the Termination Date and thus carry out, inter all, the remaining tasks and assignments the Employee is instructed to carry out as well as not being engaged in any business competing with the Company or its associated companies.

4.2

The Employee will continue to be bound by the confidentiality undertaking under section 8 of the Employment Agreement. The Employee is thereby not allowed to in any way disclose sensitive or otherwise confidential information regarding the Company or any of its associated companies to any other company or individual not employed by the company or its associated companies. This confidentiality undertaking is not limited in time.

4.3

The Parties agree that the Non-Competition Covenant as described in section 14 of the Executive’s employment agreement dated August 8, 2011 becomes operative during the twelve (12) months immediately following the Termination Date and the Company shall pay the Executive compensation as described in section 14 of the employment agreement dated August 8, 2011.

5-	Other Issues and Final Settlement

5.1

The Employee participates in Autoliv, Inc. 1997 Stock Incentive Plan (“Incentive Plan”). The Parties agree that the Employee’s entitlement under the Incentive Plan will be handled in accordance with the rules and regulations prescribed by the Incentive Plan. With reference to the rules of the plan, the Parties note that all of the Employee’s Restricted Stock Units and Performance Shares promised but not vested will not vest and shall be forfeited as of the Termination Date. The Employee’s unexercised stock options, if any, will remain exercisable for three (3) months after the Termination Date or until the expiration date for the options, whichever occurs first.

5.2	The Parties agree that the Employee shall have no priority rights to re-employment.

2 (3)

5.3

The separation between the Employee and the Company is based on mutual trust and the Parties agree that they shall use their best endeavors to act in a fair and considerate way regarding all issues relating to this separation, including internal and external communication and other practical matters that have to be resolved as consequence of separation. The Parties have further agreed to keep the contents of this agreement confidential other than such disclosures that are required to comply with applicable laws.

5.4

On the date the Employee is released from all duties, the Employee shall return the Company all keys, credit cards, documents, mobile phone, laptop computer and all other property the Employee may have in his possession and which belongs to the Company or its associated Companies. Employee may keep his corporate fuel card through February 29, 2020.

5.5

The Employee acknowledges that he has no claim whatsoever outstanding against either the Company, its associated companies or any of their respective officers, directors and employees in connection with the position as an executive. To the extent that any such claim exists or may exist, the Employee irrevocably waive such claim and release the Company, its associated companies and each of their respective officers, directors and employees from any liability whatsoever in respect of such claim.

5.6

Through the signing of this agreement and fulfillment of the provisions herein, all unsettled matters between the Parties shall be deemed to be finally settled and the Employee shall have no claims against the Company or any of its associated companies as regards to salary, vacation pay, incentives, pension contributions, damages or otherwise.

6-	Governing Law and Disputes

This agreement shall be governed by and construed in accordance with the laws of Sweden.

This agreement has been duly executed in two original copies, of which each of the Parties has taken a copy.

Stockholm, Sweden

March 11, 2018

On behalf of Autoliv Inc.		The Employee

/s/ Jan Carlson		/s/ Steve Fredin
Jan Carlson		Steve Fredin
Chairman and President
Autoliv Inc.


/s/ Karin Eliasson
Karin Eliasson
GVP, Human Resources

3 (3)

Exhibit 10.6

Employment Agreement

This Employment Agreement (this “ Veoneer Employment Agreement ”) is made by and between Veoneer, Inc., a Delaware corporation (“ Veoneer ”), and Jan Carlson (“ Executive ”), dated as of March 21, 2018. Reference is made to that certain Employment Agreement, dated as of March 31, 2007, as amended or supplemented from time to time, by and between Autoliv, Inc. (“ Autoliv ”) and Executive (the “ Autoliv Employment Agreement ”).

Autoliv is currently in the process of reorganizing its corporate structure to align with its two reporting segments – Passive Safety and Electronics – and upon completion of the internal reorganization, the Passive Safety business (“ PAS ”) and the Electronics business (“ ELE ”), will each be a separate entity within the Company (the “ Internal Reorganization ”). The ELE business will be named “Veoneer, Inc.”

Effective as of the Internal Reorganization, Veoneer desires to engage Executive as the President and Chief Executive Officer of Veoneer. In his capacity as President and Chief Executive Officer for Veoneer, Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him and shall report directly to the Board of Directors of Veoneer. The principal work place for Executive shall be Stockholm, Sweden. Executive is willing to serve as such effective as of the Internal Reorganization in accordance with the terms and conditions of this Employment Agreement unless or until another employment agreement is signed with Veoneer.

3.	This Veoneer Employment Agreement shall be effective as of the Internal Reorganization. The earliest date on which the Internal Reorganization would be completed would be April 1, 2018.

4.	Following the Internal Reorganization, Executive will continue to serve as the President and Chief Executive Officer of Autoliv. The Autoliv Employment Agreement shall remain in place and unchanged following the Internal Reorganization.

5.	The Autoliv Employment Agreement and Severance Agreement shall continue to govern the rights and obligations of the parties with respect to Executive’s employment thereunder. Notwithstanding anything in this Veoneer Employment Agreement or the Autoliv Employment Agreement to the contrary:

The Autoliv Employment Agreement and Severance Agreement shall continue to govern the compensation and benefits payable to Executive. Executive’s current base salary and benefits shall remain unchanged as of the date of the Internal Reorganization. The expense related to the Executive’s base salary and other benefits shall be allocated between each of Autoliv and Veoneer based upon actual time and services rendered by Executive to each company.

The Autoliv Employment Agreement and Severance Agreement shall continue to govern the compensation and benefits payable to Executive in the event of his termination of employment. Should Executive incur a termination of employment entitling him to severance pay and benefits pursuant to the terms and conditions of the Autoliv Employment Agreement, one hundred percent (100%) shall be borne by Autoliv.

[Signatures on following page]

IN WITNESS WHEREOF , this Employment Agreement has been executed the day and year first above written.

For Veoneer

/s/ James Ringler
James Ringler
Chairman of the Compensation Committee & Lead Director


Executive


/s/ Jan Carlson
Jan Carlson

/s/ Karin Eliasson
Karin Eliasson
GVP Human Resources and Sustainability

Exhibit 10.7

Supplement to Employment Agreement

This Supplement (“ Supplement ”) to the Employment Agreement dated as of March 31, 2007, as amended or supplemented from time to time, by and between Autoliv, Inc. (“ Autoliv ”) and Jan Carlson (the “ Autoliv Employment Agreement ”) is made by and between Autoliv, and Jan Carlson (“ Executive ”), dated as of March 21, 2018.

2.	Effective as of the Internal Reorganization, Veoneer desires to engage Executive as the President and Chief Executive Officer of Veoneer, and Veoneer and Executive shall enter into an employment agreement in connection therewith (the “ Veoneer Employment Agreement ”).

3.	This Veoneer Employment Agreement shall be effective as of the Internal Reorganization. The earliest date on which the Internal Reorganization would be completed would be April 1, 2018.

4.	Following the Internal Reorganization, Executive will continue to serve as the President and Chief Executive Officer of Autoliv. The Autoliv Employment Agreement shall remain in place and unchanged following the Internal Reorganization.

5.	The Autoliv Employment Agreement shall continue to govern the rights and obligations of the parties with respect to Executive’s employment thereunder. Notwithstanding anything in this Veoneer Employment Agreement or the Autoliv Employment Agreement to the contrary:

The Autoliv Employment Agreement shall continue to govern the compensation and benefits payable to Executive. Executive’s current base salary and benefits shall remain unchanged as of the date of the Internal Reorganization. The expense related to the Executive’s base salary and other benefits shall be allocated between each of Autoliv and Veoneer based upon actual time and services rendered by Executive to each company.

The Autoliv Employment Agreement and Severance Agreement shall continue to govern the compensation and benefits payable to Executive in the event of his termination of employment. Should Executive incur a termination of employment entitling him to severance pay and benefits pursuant to the terms and conditions of the Autoliv Employment Agreement and Severance Agreement, one hundred percent (100%) of such expense shall be borne by Autoliv.

[Signatures on following page]

IN WITNESS WHEREOF , this Employment Agreement has been executed the day and year first above written.

For Autoliv Inc.

/s/ James Ringler

James Ringler

Chairman of the Compensation Committee & Lead Director

Executive

/s/ Jan Carlson

Jan Carlson

/s/ Karin Eliasson

Karin Eliasson

GVP Human Resources and Sustainability

Exhibit 10.8

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into on March 20, 2018 by and between Autoliv Inc., a Delaware corporation (the “ Company ”), and Mikael Bratt, personal code number …………….. (the “ Executive ”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as the Chief Executive Officer and President, of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Effective Date . It is anticipated that, in connection with a restructuring of Autoliv, Inc., Veoneer Inc. shall be spun-off from the Company and become a free-standing company (the “ Spin-Off ”). The effective date of this Agreement (the “ Effective Date ”) shall be the effective date of the Spin-off Transaction, or such other date to which the parties agree. If the Spin-Off for any reason is not finalized, this Agreement will not become effective and any previous employment agreement between Autoliv, Inc. and the Executive (the “Prior Agreement”) will continue to apply.

2. Employment . The Executive is hereby employed on the Effective Date as the Chief Executive Officer and President of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chairman of the Board of Directors of the Company (the “ Chairman of the Board ”). The principal workplace for the Executive shall be Stockholm, Sweden.

3. Employment Period . The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “ Employment Period ”); provided , however , that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than twelve (12) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than twelve (12) calendar months prior to such date of termination; provided , further , however , that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 12-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the last day of the month preceding the Executive’s 65th birthday (“ Retirement ”).

4. Extent of Service . During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided , however , that the Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consent of the Chairman of the Board, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided that nothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5. Compensation and Benefits .

(a) Base Salary . During the Employment Period, the Executive shall receive a gross salary at the rate of SEK 9,000,000 per year (“ Base Salary ”), less normal withholdings, payable in equal monthly or other installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “ Compensation Committee ”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement. In addition to Base Salary, the Executive shall be entitled to the vacation supplement (currently 0.8 percent (0.8%) of 1/12 of Base Salary per vacation day).

(b) Bonus . During the Employment Period, the Executive shall be eligible to participate in the Company’s bonus plan for executive officers, if any, pursuant to which he will have an opportunity to receive an annual bonus based upon the achievement of performance goals established from year to year by the Compensation Committee (such bonus earned at the stated “target” level of achievement being referred to herein as the “ Target Bonus ”). Until otherwise changed by the Compensation Committee, the Executive’s Target Bonus shall be fifty percent (50%) of his Base Salary.

(c) Equity Incentive Compensation . During the Employment Period, the Executive shall be eligible for equity grants under the Autoliv, Inc. Amended and Restated 1997 Stock Incentive Plan or any successor plan or plans, having such terms and conditions as awards to other peer executives of the Company, as determined by the Compensation Committee in its sole discretion, unless the Executive consents to a different type of award or different terms of such award than are applicable to other peer executives of the Company. Nothing herein requires the Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year. For the avoidance of doubt, the Executive shall not be eligible to receive any additional equity grants from the company with respect to calendar year 2018.

- 2 -

(d) Automobile . The Company shall provide the Executive with a company car. The Executive and his immediate family may also use the company car for personal purposes. The Company shall bear all petrol, maintenance and repair costs, as well as insurance costs and vehicle tax related to the Company car. The Executive shall, however, be liable for the payment of tax on the taxable benefit resulting from the right to use the company car for personal purposes.

(e) Medical Benefits . The Executive and his spouse or significant other is entitled to a medical care insurance made available by the Company to the Executive.

(f) Expenses . The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by him in the performance of his duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(g) Conditions of Employment . Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6. Holidays . The Executive shall be entitled to yearly holidays amounting to 30 days.

7. Pension . The Company shall pay pension premiums for defined contribution pension insurance in Sweden, with an amount equal to forty percent (40%) of the Executive’s Base Salary. The pension premiums shall include premiums under the ITP plan, giving the Executive certain benefits in the event of his temporary or permanent illness. The insurance shall be taken out at a reputable insurance company, to be approved of in advance by the Company.

8. Business or Trade Information . The Executive shall not during or after the termination of his employment hereunder disclose to any person, firm of company whatsoever or use for his own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated company of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to his Date of Termination, if the Executive’s employment has terminated; provided , however , that nothing in this Section 8 shall preclude the Company from pursuing arbitration in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

- 3 -

9. Company Property . The Executive shall upon the termination of his employment hereunder for whatever reason immediately deliver to the Company all designs, specifications, correspondence and other documents, papers, the car provided hereunder and all other property belonging to the Company or any of its affiliated companies or which may have been prepared by him or have come into his possession in the course of his employment.

10. Termination of Employment .

(a) Death; Retirement . The Executive’s employment shall terminate automatically upon his death or Retirement.

(b) Termination by the Company . The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “ Cause ” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “ Board ”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chairman of the Board establishes to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(c) Termination by the Executive . The Executive may terminate his employment during the Employment Period with Good Reason or without Good Reason. “ Good Reason ” shall mean the occurrence, without the Executive’s express written consent, of any of the following “ Good Reason Events ”:

(i) the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect on the Effective Date other than any such alteration primarily attributable to the fact that the Company may no longer be a public company;

(ii) a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

- 4 -

(iii) the relocation of the Executive’s principal place of employment to a location more than 45 kilometers from the Executive’s principal place of employment on the Effective Date or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

(iv) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

(v) the failure by the Company to continue in effect any compensation plan in which the Executive participates on the Effective Date which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed on the Effective Date; or

(vi) the failure by any successor to the business of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

A termination by the Executive shall not constitute termination for Good Reason unless the Executive shall first have delivered to the Company written notice setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event), and there shall have passed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by the Executive. The Executive’s termination for Good Reason must occur within a period of 160 days after the occurrence of an event of Good Reason. The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Good Reason shall not include the Executive’s death. For purposes of this Agreement, the Spin-Off, and any changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off, shall not constitute a Good Reason Event.

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facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

(e) Date of Termination . “ Date of Termination ” means (i) if the Executive’s employment is terminated other than by reason of death or Retirement, the end of the notice period specified in Section 3 hereof (if applicable), or (ii) if the Executive’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Executive, or (iii) if the Executive’s employment is terminated by reason of Retirement, the Date of Termination shall be the date of Retirement.

(f) Dispute Concerning Termination . Any disputes regarding the termination of the Executive’s employment shall be settled in accordance with Section 16 hereof (including, without limitation, the provisions regarding costs and expenses related to arbitration). If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 10(f)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of the arbitrators (which is not appealable or with respect to which the time for appeal there from has expired and no appeal has been perfected); provided , however , that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

(g) Compensation During Dispute . If the Date of Termination is extended in accordance with Section 10(f) hereof, the Company shall continue to provide the Executive with the compensation and benefits specified in Section 5 hereof until the Date of Termination, as determined in accordance with Section 10(f) hereof. Amounts paid under this Section 10(g) are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement; provided, however , that in the event that the arbitration results in a determination that the Executive is not entitled to the severance payments set forth in Section 11(a) hereof, then the Executive shall be obligated to promptly repay to the Company the compensation received by the Executive during the extended period pursuant to this Section 10(g).

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11. Obligations of the Company Upon Termination of Employment .

(a) Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason . If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 21(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination. In addition, the Company shall pay all relevant social costs attributable to such lump sum severance payment, in accordance with relevant Swedish law. For purposes of the Prior Agreement, the Spin-Off or any other changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off shall not constitute an event that would permit the Executive to terminate his employment for “Good Reason” (as defined in the Prior Agreement) or a termination of the Executive’s employment by Autoliv other than for “Cause” (as defined in the Prior Agreement).

(b) Death . If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive or the Executive’s legal representatives under this Agreement, other than such death benefits he or they would otherwise be entitled to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliated companies.

(c) Retirement . If the Executive’s employment is terminated in connection with his Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

(d) Cause; Voluntary Resignation . If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns his employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

12. Non-Duplication of Benefits . Notwithstanding anything to contrary in this Agreement, the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein shall be offset and reduced to the extent necessary by any other compensation or benefits of the same or similar type, including those payable under local laws of any relevant jurisdiction, so that such other compensation or benefits, if any, do not augment the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein. It is intended that this Agreement not duplicate compensation or benefits the Executive is entitled to under country “redundancy” laws, the Company’s severance policy, if any, any related or similar policies, or any other contracts, agreements or arrangements between the Executive and the Company.

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13. Non-Competition Covenant; Payment for Non-Competition Covenant .

(a) Except as provided in Section 13(b), during the twelve (12) months immediately following the termination of his employment with the Company, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in his employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “ Non-Competition Covenant ”).

(b) The Non-Competition Covenant shall not apply:

(i) in the event the Executive’s employment is terminated by the Company other than for Cause; or

(ii) in the event the Executive resigns for Good Reason.

(c) If the Executive does not comply with the Non-Competition Covenant when applicable, then (i) the Executive shall not be entitled to any benefits pursuant to Section 13(d) below during the period in which the Executive is not in compliance with such Non-Competition Covenant, and (ii) the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the last twelve (12) months prior to the Date of Termination.

(d) If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided , however , that the aggregate monthly payments from the Company pursuant to this Section 13(d) shall not exceed sixty percent (60%) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 60% aggregate amount has been paid, no further payments will be made under this Section 13(d). As a condition to the receipt of such payments, the Executive must inform the Company of his base salary in his new employment on a monthly basis. No payments shall be made under this Section 13 if the Executive’s employment is terminated in connection with his Retirement.

14. Inventions .

(a) The general nature of any discovery, invention, secret process or improvement made or discovered by the Executive during the period of the Executive’s employment by the Company (hereinafter called “ the Executive’s Inventions ”) shall be notified by the Executive to the Company forthwith upon it being made or discovered.

(b) The entitlement as between the Company and the Executive to the Executive’s Inventions shall be determined in accordance with the current Act (1949:345) on the Right to Inventions made by Employees and the Executive acknowledges that because of the nature of his duties and the particular responsibilities arising therefrom he has a special obligation to further the interests of the Company’s undertaking.

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(c) Where the Executive’s Inventions are to be assigned to the Company, the Executive shall make a full disclosure of the same to the Company and if and whenever required to do so shall at the expense of the Company apply, singly or jointly with the Company or other persons as required by the Company, for letters patent or other equivalent protection in Sweden and in any other part of the world of the Executive’s Inventions.

15. Entire Agreement . This Agreement supersedes the Prior Agreement and any other previous agreements and arrangements whether written, oral or implied between the Company or Autoliv and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of his employment under this Agreement.

16. Disputes . Disputes regarding this Agreement (including, without limitation, disputes regarding the existence of Cause or Good Reason) shall be settled by arbitration in accordance with the Swedish Arbitration Act. The arbitration shall take place in Stockholm and, unless otherwise agreed to by both parties, there shall be three (3) arbitrators. The provisions on voting and cumulation of parties and claims in the Swedish Procedural Code shall be applied in the arbitration. All costs and expenses for the arbitration, whether initiated by the Company or by the Executive, including the Executive’s costs for solicitor, shall be borne by the Company, unless the arbitrators determine the Executive’s claim(s) to be frivolous and in bad faith, in which case the arbitrators may allocate costs as they deem fit. Any payments due to the Executive pursuant to the preceding sentence shall be made within fifteen (15) business days after delivery of the Executive’s written request for payment accompanied with such evidence of costs and expenses incurred as the Company reasonably may require.

17. Governing Law . This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

18. Amendment . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.

19. Autoliv Plan . Any outstanding awards to the Executive under the Autoliv Plan shall vest, be exercisable, expire and/or be forfeited from and after the Spin-Off as determined under the terms and conditions of the Autoliv Plan and such awards, as such terms and conditions may be amended by the Compensation Committee of the Board of Directors of Autoliv in connection with the Spin-Off.

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20. Notices . All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive :		Mikael Bratt

If to the Company :		Autoliv Inc.
		WTC, Klarabergsviadukten 70,
		111 64 Stockholm, Sweden
		Attention: Secretary

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

21. U.S. Tax Code Section 409A . This Section 21 shall apply only in the event that the Executive is or becomes a taxpayer under the laws of the United States at any time during the Employment Period.

(a) General . This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive as a result of the application of Section 409A of the Code.

(b) Definitional Restrictions . Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“ Non-Exempt Deferred Compensation ”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such termination of employment, as the case may be, meet any description or definition of “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

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(c) Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A ‑3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “ Required Delay Period ”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

(d) Treatment of Installment Payments . Each payment of termination benefits under this Agreement shall be considered a separate payment, as described in Treas. Reg. Section 1.409A‑2(b)(2), for purposes of Section 409A of the Code.

(e) Timing of Release of Claims . Whenever in this Agreement a payment or benefit is conditioned on the Executive’s execution and non-revocation of a release of claims, such as the separation agreement referenced in Section 11(a) hereof, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (c) above, such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period.

(f) Timing of Reimbursements and In-kind Benefits . If the Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement and if such payments or reimbursements are includible in the Executive’s federal gross taxable income, the amount of such expenses payable or reimbursable in any one calendar year shall not affect the amount payable or reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. The right to any reimbursement for expenses incurred or provision of in-kind benefits is limited to the lifetime of the Executive, or such shorter period of time as is provided with respect to each particular right to reimbursement in-kind benefits pursuant to the preceding provisions of this Agreement. No right of the Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.

( signatures on following page )

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

	/s/ Mikael Bratt
	Mikael Bratt



	Autoliv, Inc.



	/s/ Jan Carlson
	Jan Carlson
	Chairman of the Board



	/s/ James M. Ringler
	James M. Ringler
	Chairman of the Compensation Committee

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Exhibit 10.9

EMPLOYMENT AGREEMENT

劳动合同

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into on March 21, 2018 by and between Autoliv (Shanghai) Management Co. Ltd. (the “ Company ”), and Jennifer Cheng (the “ Executive ”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

本劳动合同(“ 本合同 ”)由奥托立夫(上海)管理有限公司(“ 公司 ”)与程翠香(“ 签约人 ”)于2018年3月21日订立并自第1条中约定的生效日起开始生效。此处提及的“公司”应在可行的情况下视为包括公司的关联方。

BACKGROUND

背景

The Company desires to engage the Executive as President, China of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

公司希望根据本合同条款约定, 雇佣签约人自生效日起担任公司总裁。签约人同意根据本合同条款和条件约定担任公司总裁一职。

因此, 鉴于前述背景和本合同所含的双方的约定, 以及双方确认充分知悉的其他良好和有价值的对价, 双方约定如下:

Effective Date . It is anticipated that, in connection with a restructuring of Autoliv, Inc., Veoneer Inc. shall be spun-off from Autoliv Inc. and become a free-standing company (the “ Spin-Off ”). The effective date of this Agreement (the “ Effective Date ”) shall be the effective date of the Spin-off Transaction, or such other date to which the parties agree. If the Spin-Off for any reason is not finalized, this Agreement will not become effective and any previous employment agreement between Autoliv (Shanghai) Management Co. Ltd. and the Executive (the “Prior Agreement”) will continue to apply.

生效日 . 关于Autoliv Inc.重组, 预期Veoneer Inc.将从Autoliv Inc.中分拆, 成为独立公司(“ 分拆 ”)。本合同的生效日(“ 生效日 ”)指分拆交易生效之日, 或双方同意的其他日期。若分拆因任何原因未能完成, 则本合同将自始不发生效力, 公司与签约人之间仍将适用之前的劳动合同(“ 先前合同 ”)。

Employment . The Executive is hereby employed on the Effective Date as the President, of t he Company and other affiliates in China of Autoliv Inc . In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to her by the Chief Executive Officer and President of Autoliv Inc. (the “ Chief Executive Officer ”) . The principal workplace for the Exec utive shall be Shanghai, China .

工作 . 签约人自生效日起担任公司及Autoliv, Inc.在中国的其他关联企业的总裁。任职期间, 签约人应当享有Autoliv Inc. 首席执行官和总裁(“ 首席执行官 ”)所赋予的、与该职位相适应的职责、义务和权力。签约人主要工作地点将位于中国上海。

Employment Period . The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “ Employment Period ”); provided , however , that (i) the Company must give the Executive written notice of termination of the Executive’s employment according to Chinese Employment Contract Law and other relevant laws and regulations, and (ii) the Executive must give the Company written notice of termination of her employment not less than six (6) calendar months prior to such date of termination; provided , further , however , that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of the notice period or the retirement of the Executive from the company (“ Retirement ”).

工作期限 . 公司同意自生效日起雇佣签约人, 签约人同意自生效日起履责, 直至公司或签约人终止本合同(“ 工作期限 ”), 但(i)公司需根据中国劳动法及相关法律法规规定书面通知签约人终止劳动合同事宜, 并且(ii)签约人需至少提前六(6)个日历月书面通知公司终止劳动合同事宜; 但公司根据本合同第10条b款约定的事由主张终止的, 签约人劳动合同应立即终止。尽管有上述约定, 签约人的劳动合同应当在通知期限届满, 或签约人自公司退休之日自动终止(“ 退休 ”)。

Extent of Service . During the Employment Period, the Executive shall use her best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote her full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of her duties as may in the interests of the Company be reasonably necessary; provided , however , that the Executive shall not receive any remuneration in addition to that set out in Section 5

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hereof in respect of her work during such time. During the Employment Period, the Executive shall not, without the consen t of the Chief Executive Officer , directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided that nothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

工作内容 . 在工作期限内, 签约人应尽最大努力提升公司及其母公司、子公司、关联公司的利益。此外, 签约人应当在正常工作时间之外为公司合理必要利益投入精力以履行其职责; 但签约人不得因此而获取除本合同第5条约定之外的任何报酬。任职期间, 非经首席执行官, 签约人不得直接或间接, 独自或与董事、经理、代理或任何其他人、企业或公司中雇员共同, 从事、涉及或有意参与任何与签约人在本合同第4条项下职责有潜在冲突的业务(包括在任何公司竞争对手中持股、持有债权、股份或其他任何所有权权益), 但本合同第4条不得妨碍签约人在任何公司竞争对手之外的实体中持股、持有债权、股份或其他任何所有权权益。

5.	Compensation and Benefits .

薪酬和福利

(a)

Base Salary . During the Employment Period, the Executive shall receive a gross salary at the rate of CNY 2,803,832 per year (“ Base Salary ”), less normal withholdings, payable in monthly installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “ Compensation Committee ”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

基本薪酬 . 在工作期限内, 签约人每年应得人民币2,803,832元的薪酬总额(“ 基本薪酬 ”), 扣除法定税款, 根据现有或不时变动的公司员工薪酬制度按月发放。公司董事会薪酬委员会(“ 薪酬委员会 ”)将在工作期限内按年审核签约人的基本薪酬。就本合同而言, 任何对签约人年度基本薪酬的调整应当构成签约人的基本薪酬。

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(b)

Bonus . During the Employment Period, the Executive shall be eligible to participate in the Company’s bonus plan for executive officers, if any, pursuant to which he will have an opportunity to receive an annual bonus based upon the achievement of performance goals established from year to year by the Compensation Committee (such bonus earned at the stated “target” level of achievement being referred to herein as the “ Target Bonus ”). Until otherwise changed by the Compensation Committee, the Executive’s Target Bonus shall be forty five percent (4 5 %) of her Base Salary.

奖金 . 在工作期限内, 签约人有资格加入公司面向管理人员的奖金计划(若有), 根据薪酬委员会每年度设立的绩效目标达标情况, 签约人有机会获得一笔年度奖金(根据达成“目标”等级所得的奖金, 以下简称“ 目标奖金 ”)。除非薪酬委员会另行变更, 签约人的目标奖金应为其基本薪酬的百分之四十五(45%)。

(c)

Expenses. The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by her in the performance of her duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

津贴 . 就签约人根据履行本合同项下职责期间产生的合理的差旅、住宿以及其他费用, 根据公司不时生效的政策、惯例、程序, 签约人有权获得津贴或报销。签约人应当根据公司要求, 向公司提供报销所需的收据、付款凭证或其他可以证明实际支付费用的证明。

(d)	Conditions of Employment . Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

工作条件 . 公司实行的正常工作条件下, 适用本合同第4条项下的福利。

6.	Vacation . The Executive shall be entitled to yearly vacation amounting to 20 days.

假期 . 签约人有权每年享有20天假期。

7.	Benefits . The Company shall provide the Executive with a company car and driver or, if consistent with local policies where the Executive is based, a car allowance. The Executive will be paid a monthly housing allowance of CNY 30,000

福利 . 公司应当向签约人配备公司专车及驾驶员, 或根据签约人工作地地方政策向其提供车补。公司将每月向签约人支付住房补贴人民币30,000元。

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Business or Trade Information . The Executive shall not during or after the termi nation of her employment hereunder disclose to any person, firm of c ompany whatsoever or use for her own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated compan y of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to her Date of Termination, if the Executive’s employment has terminated; provided , however , that nothing in this Section 8 shall preclude the Company from pursuing arbitrati on in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

商业或交易信息 . 签约人不得在工作期间及劳动合同终止之后向公司的任何人、企业披露其已知或之后得知的任何公司(包括任何公司的母公司、子公司或关联公司)相关信息或其商业或交易秘密, 亦不得出于自用或其他任何非公司目的进行使用。上述限制自信息为公众所知晓时不再适用, 但因违反本合同约定使得信息为公众所知晓的除外。若签约人不遵守本第8条的规定, 则公司有权, 若签约人仍在职, 向签约人主张其前十二(12)个月获得的月平均基本薪资; 若签约人劳动合同被终止, 向签约人主张六(6)倍于其终止日前十二(12)个月获得的月平均基本薪资作为损害赔偿金。本第8条规定不排除公司根据本合同第16条规定提起仲裁, 并在公司有证据向仲裁员证明, 签约人违反本合同第8条的规定导致公司遭受的损害赔偿, 已超过前述条款中约定的签约人应向公司支付的损害赔偿总额的情况下, 向签约人主张额外损害赔偿的权利。

Company Property . The Executive shall upon the termination of her employment hereunder for whatever reason immediately deliver to the Company all designs, specifications, correspondence and other documents, papers, the car provided hereunder and all other property belonging to the Company or any of its affiliated companies or which may have been prepared by her or have come into her possession in the course of her employment.

公司财产 . 任何原因导致签约人终止工作的, 签约人应当立即向公司交接全部设计、说明书、通信及其他文档、文件, 公司专车, 其他所有公司或其关联公司的财产, 以及在签约人任职期间配置或持有的财产。

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10.	Termination of Employment .

劳动合同终止

(a)	Death; Retirement . The Executive’s employment shall terminate automatically upon her death or Retirement.

死亡、退休 . 签约人死亡或退休, 其劳动合同应当自动终止。

(b)

Termination by the Company . The Company may terminate the Executive’s employment during the Employment Period with Cause or for other reasons pursuant to Chinese Employment Contract Law and other relevant laws and regulations. “ Cause ” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “ Board ”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and Executive Vice President Human Resources establishes to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

公司终止 . 在工作期限内, 公司可根据正当理由或《中华人民共和国劳动合同法》及相关法律法规规定的其他理由终止签约人的劳动合同。公司终止签约人劳动合同的“ 正当理由 ”是指(i)公司董事会(“ 董事会 ”)书面要求签约人实质履行职责, 且该要求明确指出董事会认定签约人未能实质履行签约人职责的情形, 该要求送达签约人后, 签约人仍故意持续不实质履行签约人对公司的职责(不包括因身体或心理疾病原因导致的履行不能), 或(ii)签约人故意做出明显并严重有损于公司财政或其他方面的行为。就本条第(i)和(ii)款而言, (x)针对签约人, 任何作为或不作为不得被认定为“故意”, 除非行为已由签约人作出或被签约人省略, 且该作为或不作为是恶意的, 无法被合理相信其是为了公司的最大利益; 且(y)根据本合同第10(f)条规定, 若就本条款的适用出现争议, 除非首席执行官及人力资源执行副总裁向董事会提出明确且具有说服力的证据证明存在正当理由, 否则公司主张存在“正当理由”的情形均无效。

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(c)	Termination by the Executive . The Executive may terminate her employment during the Employment Period with Good Reason or without Good Reason. “ Good Reason ” shall mean the occurrence, without the Executive’s express written consent, of any of the following “ Good Reason Events ” :

签约人终止 . 在工作期限内, 无论是否存在充足理由, 签约人均可终止劳动合同。“ 充足理由 ”是指非经签约人明示书面同意, 发生下列“ 充足理由事件 ”之一:

(i)

the assignment to the Executive of any duties inconsistent with the Executive’s status as an executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive’s responsibilities from those in effect on the Effective Date other than any such alteration primarily attributable to the fact that the Company may no longer be a public company;

签约人的职责与签约人公司管理人员身份不符, 或对签约人义务的性质或状态较生效日相比作出实质不利变更, 但因公司不再作为上市公司而导致的变更除外;

(ii)

a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

公司降低签约人于生效日生效的年度基本薪资, 或经不时增长后的年度基本薪资;

(iii)

the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

公司未在到期支付签约人报酬之日后七(7)日内向签约人支付其现有报酬;

(iv)

the failure by the Company to continue in effect any compensation plan in which the Executive participates on the Effective Date which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed on the Effective Date; or

公司未持续执行签约人于生效日参与的薪酬计划, 且该薪酬计划对签约人薪酬总额有重大影响, 除非针对该薪酬计划另行制定了合理的安排(于持续性替代或备选方案中体现), 或公司未持续执行签约人薪酬计划(或其替代或备选方案)对于生效日所确定的福利, 无论是在支付的金额或时间, 还是与其他参与者相比在水平上, 都没有实质的不利影响; 或

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(v)

the failure by any successor to the business of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

公司业务承继方(无论是通过直接或间接收购、兼并、合并或其他方式)未能明示同意将按照承继发生前所要求的方式和程度继续承担履行本合同的义务。

签约人在向公司递交书面通知并明确告知公司其有权主张终止本合同的充足理由后方可正当解除本合同(该通知至迟应在事项发生后90日内发出), 公司在之后的合理期间内(不少于30日)可以采取措施纠正、撤销或实质改变签约人主张的充足理由。签约人在该充足理由出现之日起160日后方有权解除本合同。签约人以充足理由解除本合同的权利不因签约人身体或心理疾病而受影响。签约人持续劳动关系不应视为其对本合同项下任何作为或不作为构成充足理由的允许或放弃。就本合同而言, 分拆, 以及与分拆相关的签约人劳动合同中条款与条件的任何变更, 均不构成充足理由事件。

(d)

Notice of Termination . Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “ Notice of Termination ” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for

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termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

终止通知 . 公司或签约人终止本合同(非因死亡原因)应当由一方向另一方发送书面终止的通知。就本合同而言, “ 终止通知 ”是指一份书面通知, 其应当(i)指出所依据的本合同中特定的终止条款, (ii)合理篇幅描述依据前述条款终止签约人劳动合同的事实和情形, 且(iii)明示终止日期。此外, 终止通知要求包含一份经董事会会议做出的且由不少于董事会全体董事四分之三(3/4)表决通过的决议, 董事会会议召开的目的是为了审阅该终止通知(经合理通知签约人并听取签约人及其法律顾问的意见)并由董事会善意检查签约人是否存在违反本终止通知定义中第(i)和(ii)项确定的行为, 并明示详细指出。公司未在终止通知中表明任何条件形成的事实或情形并不意味着公司放弃本合同项下的任何权利或排除公司在行使本合同项下权利的过程中宣称存在上述事实或情形的权利。

(e)

Date of Termination . “ Date of Termination ” means (i) if the Executive’s employment is terminated other than by reason of death or Retirement, the end of the notice period specified in Section 3 hereof (if applicable), or (ii) if the Executive’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Executive, or (iii) if the Executive’s employment is terminated by reason of Retirement, the Date of Termination shall be the date of Retirement.

终止日期 . “ 终止日期 ”是指(i)若签约人劳动合同非因死亡、退休、满足本合同第3条(若适用)所指通知期限届满而终止, 或(ii)若签约人劳动合同因死亡而终止, 终止日期即为签约人死亡日期, 或(iii)若签约人劳动合同因退休而终止, 终止日期即为退休日期。

(f)

Dispute Concerning Termination . Any disputes regarding the termination of the Executive’s employment shall be settled in accordance with Section 16 hereof (including, without limitation, the provisions regarding costs and expenses related to arbitration). If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section

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10(f)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of the arbitrators (which is not appealable or with respect to which the time for appeal there from has expired and no appeal has been perfected); provided , however , that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.

终止相关争议 . 任何与签约人劳动合同终止相关的争议应当适用本合同第16条予以解决(包括但不限于仲裁相关成本和费用的规定)。若终止通知发出之日起十五(15)日内, 或虽超过十五(15)日, 但仍处于终止日期前(不根据本款决定), 收到终止通知的一方通知另一方存在有关终止的争议, 则终止日期应当延长至争议解决之日, 或通过双方协商书面认可的方式或通过终局判决、决定或仲裁员裁决(不得上诉或上诉期已届满无法上诉)。终止日期应当根据签约人提供的争议通知方可延长, 并要求该通知由签约人善意提供且其为争议的解决尽到合理的勤勉义务。

(g)

Compensation During Dispute . If the Date of Termination is extended in accordance with Section 10(f) hereof, the Company shall continue to provide the Executive with the compensation and benefits specified in Section 5 hereof until the Date of Termination, as determined in accordance with Section 10(f) hereof. Amounts paid under this Section 10(g) are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement; provided, however , that in the event that the arbitration results in a determination that the Executive is not entitled to the severance payments set forth in Section 11(a) hereof, then the Executive shall be obligated to promptly repay to the Company the compensation received by the Executive during the extended period pursuant to this Section 10(g).

争议期间薪酬 . 若终止日期根据第10(f)条的规定延长, 则公司应当向签约人不间断提供本合同第5条项下约定的薪酬和福利, 直至根据第10(f)条规定的终止日期。根据本款规定应当支付的金额应当与本合同项下其他到期应付款项一齐支付, 且不得抵销或减少任何本合同项下的其他应付款项。但若仲裁裁决认定签约人无权获取本合同第11(a)条项下的遣散费, 则签约人应当立即向公司返还其根据本款在延长期间所收到的薪酬。

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11.	Obligations of the Company Upon Termination of Employment .

劳动合同终止后公司义务

(a)

Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason . If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 21(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination. For purposes of the Prior Agreement, the Spin-Off or any other changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off shall not constitute an event that would permit the Executive to terminate her employment or a termination of the Executive’s employment by Autoliv other than for “Cause”.

公司非因正当理由终止; 签约人因充足理由终止 . 若, 在工作期限内, 公司非因正当理由终止与签约人的劳动合同, 或签约人因充足理由终止劳动合同, 则, 且仅在终止日期之后四十五(45)日内, 签约人应当另行签署一份协议, 该协议形式由公司提供, 内容包含放弃全部请求并承诺不起诉, 且该另行签署的协议在前述期间内不能被撤销。终止日期之后六十(60)日内(或根据第21条第c款的要求稍后的日期内), 公司应当向签约人一次性现金支付一笔等同于签约人一点五(1.5)倍基本薪酬的遣散费, 且该遣散费的支付在终止日期前立即生效。就前期合同而言, 分拆或与分拆相关的任何其他签约人劳动合同中条款与条件的变更, 均不应构成签约人终止其劳动合同的事件, 或构成奥托立夫除“正当理由”外终止签约人劳动合同的事件。

(b)

Death . If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive or the Executive’s legal representatives under this Agreement, other than such death benefits he or they would otherwise be entitled to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliated companies.

死亡 . 在在工作期限内若因签约人死亡导致劳动合同终止的, 本合同应当终止, 且不应使签约人或签约人在本合同项下的法定代理人承担进一步的义务, 除非该死亡使其获益, 或前述人员有权获得公司或其关联公司中任何计划、项目、政策、惯例、合同或协议项下的利益。

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(c)

Retirement . If the Executive’s employment is t erminated in connection with her Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the c ovenants set forth in Section 13 herein.

退休 . 在工作期限内若签约人因退休使得劳动合同终止, 则本合同应当终止, 且不应使签约人承担进一步的义务, 但签约人仍将受到本合同第13条规定的约束。

(d)

Cause; Voluntary Resignation . If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns her employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

正当理由; 自愿离职 . 在工作期限内若公司根据正当理由终止签约人劳动合同, 或签约人无充足理由自愿解除劳动关系, 则本合同应当终止, 且不应使签约人承担进一步的义务, 但签约人仍将受到本合同第13条规定的约束。

12.

Non-Duplication of Benefits . Notwithstanding anything to contrary in this Agreement, the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein shall be offset and reduced to the extent necessary by any other compensation or benefits of the same or similar type, including those payable under local laws of any relevant jurisdiction, so that such other compensation or benefits, if any, do not augment the aggregate of any amounts payable to the Executive by the Company pursuant to Section 5 (including any compensation and benefits paid pursuant to such section during any applicable termination notice period pursuant to Section 3), Section 10(g) or Section 11 herein. It is intended that this Agreement not duplicate compensation or benefits the Executive is entitled to under country “redundancy” laws, the Company’s severance policy, if any, any related or similar policies, or any other contracts, agreements or arrangements between the Executive and the Company.

不重复给付福利 . 尽管本合同中存在相反约定, 但公司根据第5条(包括根据第3条约定, 在任何终止通知期间适用本条款而应支付的任何薪酬和福利)、第10条第g款或第11条应向签约人支付的任何款项的总额, 应当在必要程度内同其他相同或相似类型的薪酬或福利进行抵销和降低, 包括那些根据相关管辖地地方法律规定应当支付的薪酬或福利, 使得其他薪酬或福利(若有)不会对由公司根据第5条(包括任何根据第3条规定在终止通知期间应当根据该条款支付的薪酬和福利)、第10条第g款或第11条规定应向签约人支付的款项总额造成增加。本合同的目的是不重复给付签约人有权根据地方“冗余”法律、公司遣散政策(若有)以及任何相关或类似政策, 或任何签约人与公司之间的其他合同、协议或安排而获得的薪酬或福利。

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13.	Non-Competition Covenant; Payment for Non-Competition Covenant .

竞业禁止约定; 竞业禁止约定的费用 .

(a)

During the twelve (12) months immediately following the termination of her employment with the Company, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in her employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “ Non-Competition Covenant ”).

在终止其与公司工作后的十二(12)月内, 签约人不得(i) 接受有能力利用签约人在其于公司工作期间取得的与公司有关的保密信息的公司竞争对手的工作, (ii)成为该公司竞争对手的合伙人或所有者, 或者(iii)担任该竞争对手的顾问(“ 竞业禁止约定 ”)。

(b)	The Non-Competition Covenant shall not apply:

竞业禁止约定不适用:

(i)

In the event the Executive’s employment is terminated by the Company other than for Cause; or

若签约人劳动合同被公司非因正当理由终止; 或

(ii)

In the event the Executive resigns for Good Reason.

若签约人因充足理由终止劳动合同。

(c)

If the Executive does not comply with the Non-Competition Covenant when applicable, then (i) the Executive shall not be entitled to any benefits pursuant to Section 13(d) below during the period in which the Executive is not in compliance with such Non-Competition Covenant, and (ii) the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the last twelve (12) months prior to the Date of Termination.

若签约人应当遵守而未遵守竞业禁止约定的, 那么(i)在签约人未遵守竞业禁止约定期间, 签约人无权根据下列第13(d)条取得任何福利, 并且(ii)公司有权根据签约人在其终止日之前最后十二(12)个月的薪酬, 向签约人等同于月度基本薪酬其六(6)倍的赔偿。

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(d)

If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided , however , that the aggregate monthly payments from the Com pany pursuant to this Section 13( d ) shall not exceed thirty percent ( 30 %) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 30 % aggregate amount has been paid, no further payments wi ll be made under this Section 13( d ). As a condition to the receipt of such payments, the Executive must inform the C ompany of her base salary in her new employment on a monthly basis. No payments shall be made under this Section 13 if the Executive’s employment is terminated in connection with her Retirement.

如果竞业禁止义务生效的, 那么公司应当就签约人因竞业禁止义务所造成的不便, 在终止日之后向签约人支付不超过十二(12)个月的补偿, 金额等同于签约人阅读基本薪酬减去签约人在此期间后一份工作(如有)每月所受领的工资, 但是公司根据本合同第13(d)条向签约人支付的月度款项总金额应不超过终止日时签约人年度基本薪酬的百分之三十(30%), 并且30%的总金额支付完毕后, 本合同第13(d)条下不再有其他支付义务。作为受领该款项的条件, 签约人应当每月向公司汇报她在新工作的基本薪酬。如果签约人的工作因其退休有关原因被终止的, 则本合同第13条不再有支付义务。

14.	Inventions .

发明 .

(a)

The general nature of any discovery, invention, secret process or improvement made or discovered by the Executive during the period of the Executive’s employment by the Company (hereinafter called “ the Executive’s Inventions ”) shall be notified by the Executive to the Company forthwith upon it being made or discovered.

签约人在签约人为公司所雇佣期间创造或发现的任何性质的发现、发明、保密方法或改进(以下简称 “ 签约人发明 ”)应由签约人再发明或发现后立即向公司通知。

(b)

The entitlement as between the Company and the Executive to the Executive’s Inventions shall be determined in accordance with the current Act (1949:345) on the Right to Inventions made by Employees and the Executive acknowledges that because of the nature of her duties and the particular responsibilities arising therefrom he has a special obligation to further the interests of the Company’s undertaking.

公司和签约人对于签约人发明的权利应根据现行的雇员发明权利法案(1949:345), 并且签约人确认, 由于其职务的性质和由其产生的责任, 他对于公司的未来利益有着特别责任。

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(c)

Where the Executive’s Inventions are to be assigned to the Company, the Executive shall make a full disclosure of the same to the Company and if and whenever required to do so shall at the expense of the Company apply, singly or jointly with the Company or other persons as required by the Company, for letters patent or other equivalent protection in Sweden and in any other part of the world of the Executive’s Inventions.

鉴于签约人发明应转让给公司, 签约人应在需要的情况下, 根据公司的要求单独或与公司或其他人员共同随时将全部信息披露给公司, 以在瑞典和世界上任何其他地方取得签约人发明的专利证书或类似保护费用由公司承担。

15.

Entire Agreement . This Agreement supersedes the Prior Agreement and any other previous agreements and arrangements whether written, oral or implied between the Company or Autoliv and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of her employment under this Agreement.

完整协议 . 在不影响公司或签约人在本合同项下雇佣开始前所享有任何权利的情况下, 本合同取代公司或奥托立夫和签约人就关于签约人雇佣事宜的先前合同, 以及任何其他书面、口头或暗示的此前协议和安排。

16.	Disputes . Disputes regarding this Agreement (including, without limitation, disputes regarding the existence of Cause or Good Reason) shall be settled by arbitration in accordance with the Chinese Conciliation and Arbitration for Employment Disputes Law.

争议解决 . 有关本合同的争议(包括但不限于关于是否存在正当理由或充足理由的争议)应根据中华人民共和国劳动争议调解仲裁法提交仲裁。

17.	Governing Law . This Agreement shall be governed by and construed in accordance with Chinese law and, where applicable, the laws of any applicable local jurisdictions.

管辖法律 . 本合同应受中国法律以及其他可适用的管辖地法律的管辖并根据其进行解释。

18.	Amendment . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board.

变更 . 未经董事会特别指派的官员与签约人签署书面协议, 本合同任何条款均不得被修改、放弃或免除。

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19.

Autoliv Plan . Any outstanding awards to the Executive under the Autoliv Plan shall vest, be exercisable, expire and/or be forfeited from and after the Spin-Off as determined under the term s and conditions of the Autoliv Plan and such awards , as such terms and conditions may be amended by the Compensation Committee of the Board of Directors of Autoliv in connection with the Spin-Off.

奥托立夫计划 . 奥托立夫计划下签约人的任何未结奖金应在分拆后依据奥托立夫计划的条款条件决定授予、执行、到期和/或罚没, 并且该奖金可能会依据奥托立夫计划的条款条件由与分拆相关的奥托立夫董事会补偿委员会进行变更。

20.	Notices . All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

通知 . 本合同下的所有通知和其他交流应以书面形式进行, 并通过邮资已付及返还回执的挂号信发送至以下地址:

If to the Executive:		Jennifer Cheng

如果寄送给签约人 :		程翠香



If to the Company:		Autoliv (Shanghai) Management Co. Ltd.
		No. 1000 Beihe Highway 201807 Shanghai-Jiading China
如果寄送给公司 :		奥托立夫(上海)管理有限公司
		上海市嘉定区北和公路1000号 201807

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

或寄送至一方根据本合同约定以书面形式提供给另一方的其他地址。通知或交流应在接收方收到时生效。

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21.	U.S. Tax Code Section 409A . This Section 2 1 shall apply only in the event that the Executive is or becomes a taxpayer under the laws of the United States at any time during the Employment Period.

美国税法第409A条 . 本第21条仅在签约人属于或在工作期限内的任意时间内成为美国法律下的纳税人时适用。

(a)

General . This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive as a result of the application of Section 409A of the Code.

总则 . 本合同应以本合同项下任何款项或福利应按照美国1986年内陆税务法案第409A条, 以及根据美国内陆税务总署和美国财政部据此发布的指导或规定(“ 美国税法 ”), 豁免或者符合其要求的方式支付或提供的方式进行解释。但是, 本合同所提供福利的税收待遇属于无保证或担保的。公司和气董事、官员、雇员或顾问均不对任何税费、利息、罚息或其他签约人由于美国税法第409A条所应缴纳的款项负责。

(b)

Definitional Restrictions . Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“ Non-Exempt Deferred Compensation ”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of a Change in Control or the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control or termination of employment, as the case may be, meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “change in control event” or “separation from service,” as the case may

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be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

定义限制 . 除非本合同另有约定, 对于任何款项或福利可以构成美国税法第409A条规定的不合格的“延期补偿”(“ 不合格延期补偿 ”), 在控制权变更或签约人终止工作的情况下, 应根据本合同支付或分配, 或者不合格延期补偿款项的另一种形式将生效; 不合格延期补偿不得向签约人支付或者分配, 和/或不合格延期补偿的款项不得变更为另一种形式, 在此情况下不构成不合格延期补偿, 除非此类情况导致控制权变更或者签约人终止工作(视情况而定), 致使出现税法第409A条和适用法规(除了该定义中可能适用的选择性条款以外)所规定的“控制权变更情形”或“离开职位”(视情况而定)。无论如何, 本条款不禁止由控制权变更或终止工作导致的不合格延期补偿的适用。如果本条款对任何不合格延期补偿的支付或分配形成阻碍, 则该付款或分配应在构成第409A条规定的“控制权变更情形”或“离开职位”(视情况而定)时间产生之日, 或者不晚于本条下列第(c)项约定的时间完成。如果本条款对任何金额或福利以另一种形式支付形成阻碍的, 则该付款应以该指定情况或情形不存在的状态下以同样方式完成。

(c)

Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A‑3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “ Required Delay Period ”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

特定情况下的六个月延期 . 除非本合同另有约定, 若本合同项下的任何款项或福利由于签约人在属于“特殊工作”(定义见美国税法第409A条和该法案的最终规定)期间离开职位导致不合格延期补偿需要支付或者分配, 那么根据公司依照美国财政部规定第1.409A 3(j)(4)(ii)(国内关系法令), (j)(4)(iii)(利益冲突), 或(j)(4)(vi)(工作税收支付)指定的任何可接接

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受的加速付款 , (i) 该款项应当在签约人离开职位后六个月内支付的不合格延期补偿金额应当在其离职后累计并在第七个月的第一天完成支付或分配 ( 或者 , 若签约人在此期间内死亡的 , 在其死亡后三十 (30) 天内完成 )( 无论哪种情况 , 均称为 “ 要求延迟期间 ”); 并且 (ii) 任何剩余款项或福利的正常支付或分配计划将在要求延期吃钱届满后继续进行。

(d)	Treatment of Installment Payments . Each payment of termination benefits under this Agreement shall be considered a separate payment, as described in Treas. Reg. Section 1.409A‑2(b)(2), for purposes of Section 409A of the Code.

分期付款待遇 . 为符合美国税法第409A条, 本合同项下的每笔终止福利应视为单独的付款, 依据美国财政部第1.409A‑2(b)(2)条进行。

(e)

Timing of Release of Claims . Whenever in this Agreement a payment or benefit is conditioned on the Executive’s execution and non-revocation of a release of claims, such as the separation agreement referenced in Section 11(a) hereof, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (c) above, such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period.

发出请求的时间. 本合同项下的款项或福利均签约人基于执行和不可撤销地发出请求生效, 据此应参见本合同第11(a)条提及的另行签署协议, 该弃权应当得到执行并且所有撤销其应在终止日后60日内届满; 逾期者应视为签约人放弃该款项或福利。如果该款项或福利构成不合格延期补偿的, 那么根据本条前述第(c)项, 该本应在60日内支付的款项或福利(包括任何分期款项)应累计并在终止日后第60天支付, 若该申请已经得到执行且不可撤销期间已经届满。若该付款或福利不属于税法第409A条的范围, 则公司可以在该60日的期间内任意选择行使或开始支付的时间。

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(f)

Timing of Reimbursements and In-kind Benefits . If the Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement and if such payments or reimbursements are includible in the Executive’s federal gross taxable income, the amount of such expenses payable or reimbursable in any one calendar year shall not affect the amount payable or reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. The right to any reimbursement for expenses incurred or provision of in-kind benefits is limited to the lifetime of the Executive, or such shorter period of time as is provided with respect to each particular right to reimbursement in-kind benefits pursuant to the preceding provisions of this Agreement. No right of the Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.

报销和非现金福利的时间. 如果签约人有权根据本合同就任何应税费用进行核销或报销, 并且该核销或报销费用包含在签约人应税总收入中的, 则任何自然年度的此类核销或报销费用将不会对其他年度的核销或报销费用产生影响, 并且合规费用的报销应当在该费用产生的次年12月31日之前完成。签约人有权申请费用报销或者非现金福利的期限为终生, 除非本合同前述条款中对于各特定权利报销规定的期限更短。签约人在本合同项下的报销福利不因清算或者变更为其他权益而灭失。

( signatures on following page )

(后附签署页)

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

本协议由页首的日期和年份签署,

/s/ Jennifer Cheng
Jennifer Cheng
程翠香


For and on behalf of
代表
Autoliv (Shanghai) Management Co. Ltd.
奥托立夫(上海)管理有限公司
(Signature and Company Chop)
(签字或公司盖章)



/s/ Jan Carlson
Name:		Jan Carlson
姓名:		Jan Carlson
Title:		Chief Executive Officer and President of
Autoliv Inc.
职位:		Autoliv Inc. 首席执行官和总裁



/s/ Karin Eliasson
Name:		Karin Eliasson
姓名:		Karin Eliasson
Title:		Group Vice President, Human Resources
and Sustainability of Autoliv Inc.
职位:		Autoliv Inc. 人力资源与可持续发展, 集团副
总裁

- 21 -

Exhibit 10.10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into on March 21, 2018 by and between Autoliv ASP Inc. (the “ Company ”), and Dan Garceau (the “ Executive ”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as President, Americas of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

1. Effective Date . It is anticipated that, in connection with a restructuring of Autoliv, Inc., Veoneer Inc. shall be spun-off from the Company and become a free-standing company (the “ Spin-Off ”). The effective date of this Agreement (the “ Effective Date ”) shall be the effective date of the Spin-off Transaction, or such other date to which the parties agree. If the Spin-Off for any reason is not finalized, this Agreement will not become effective and any previous employment agreement between Autoliv ASP, Inc. and the Executive (the “Prior Agreement”) will continue to apply.

2. Employment . The Executive is hereby employed on the Effective Date as the President, Americas of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer and President of the Company (the “ Chief Executive Officer ”). The principal workplace for the Executive shall be Auburn Hills Michigan, United States. The parties acknowledge that the Executive may work from the company’s office in Utah from time to time.

3. Employment Period . The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “ Employment Period ”); provided , however , that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than six (6) calendar months prior to such date of termination; provided , further , however , that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of the notice period or the first day of the month in which the Executive becomes 65 years old. (“ Retirement ”).

4. Extent of Service . During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated compan y of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated compan y . In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided , however , that the Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consen t of the Chief Executive Officer , directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided that nothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5. Compensation and Benefits .

(a) Base Salary . During the Employment Period, the Executive shall receive a gross salary at the rate of USD 502,138 per year (“ Base Salary ”), less normal withholdings, payable in 26 equal installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “ Compensation Committee ”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

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(d) Automobile . The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. If a company car is provided, the Executive and his immediate family may also use the company car for personal purposes and the Company shall bear all petrol, maintenance and repair costs, as well as insurance costs related to the Company car. If a car allowance is provided, the Company shall also bear all petrol, maintenance and repair costs but no other, costs for the automobile in addition to the allowance. Whether a company car or a car allowance is provided, the Executive shall be liable for the payment of tax on the car allowance or on the taxable benefit resulting from the right to use the company car for personal purposes.

(e) Expenses . The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by him in the performance of his duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(f) Conditions of Employment . Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6. Vacation . The Executive shall be entitled to yearly vacation amounting to 25 days.

7. Pension and Benefits . During the Employment Period, the Executive shall be eligible to participate in any non-qualified deferred compensation plan and/or qualified retirement plan of the Company (collectively, the “ U.S. Savings Plans ”) and any additional welfare benefit plans, practices, policies and programs provided by the Company, if any, to the extent available to similarly-situated employees in the United States and subject to eligibility requirements and terms and conditions of each such plan; provided, however , that nothing herein shall limit the ability of the Company to amend, modify or terminate any such benefit plans, policies or programs at any time and from time to time.

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10. Termination of Employment .

(a) Death; Retirement . The Executive’s employment shall terminate automatically upon his death or Retirement.

(b) Termination by the Company . The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “ Cause ” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “ Board ”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and Executive Vice President Human Resources establishes to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(ii) a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

(iii) the relocation of the Executive’s principal place of employment to a location more than 30 miles from the Executive’s principal place of employment on the Effective Date or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s present business travel obligations;

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(iv) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

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(d) Notice of Termination . Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “ Notice of Termination ” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4 ) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii ) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

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11. Obligations of the Company Upon Termination of Employment .

(a) Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason . If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 21(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination. For purposes of the Prior Agreement, the Spin-Off or any other changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off shall not constitute an event that would permit the Executive to terminate his employment or a termination of the Executive’s employment by Autoliv other than for “Cause” (as defined in the Prior Agreement).

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13. Non-Competition Covenant; Payment for Non-Competition Covenant .

(b) The Non-Competition Covenant shall not apply:

(i) in the event the Executive’s employment is terminated by the Company other than for Cause; or

(ii) in the event the Executive resigns for Good Reason.

14. Inventions .

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15. Entire Agreement . This Agreement supersedes any other previous agreements and arrangements whether written, oral or implied between the Company or Autoliv and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of his employment under this Agreement.

17. Governing Law . This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

20. Notices . All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:		Dan Garceau

If to the Company:		Autoliv ASP Inc.
		1320 Pacific Drive
		Auburn Hills
		48326 Michigan

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or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(b) Definitional Restrictions . Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“ Non-Exempt Deferred Compensation ”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such termination of employment, as the case may be, meet any description or definition of “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

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Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “ Required Delay Period ” ); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

( signatures on following page )

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

		/s/ Dan Garceau
		Dan Garceau

Autoliv Inc.

		/s/ Jan Carlson
		Jan Carlson
		Chief Executive Officer and President

		/s/ Karin Eliasson
		Karin Eliasson
		GVP Human Resources and Sustainability

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Exhibit 10.11

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into on March 21, 2018 by and between Autoliv Inc. (the “ Company ”), and Mike Hague (the “ Executive ”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as President, Europe of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

1. Effective Date . It is anticipated that, in connection with a restructuring of Autoliv, Inc., Veoneer Inc. shall be spun-off from the Company and become a free-standing company (the “ Spin-Off ”). The effective date of this Agreement (the “ Effective Date ”) shall be the effective date of the Spin-off Transaction, or such other date to which the parties agree. If the Spin-Off for any reason is not finalized, this Agreement will not become effective and any previous employments term and conditions between Autoliv ASP Inc. and the Executive (the “Prior Employment”) will continue to apply.

2. Employment . The Executive is hereby employed on the Effective Date as the President Europe of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to his by the Chief Executive Officer and President of the Company (the “ Chief Executive Officer ”). The principal workplace for the Executive shall be Dachau, Germany. Further, as requested by the Company, in his capacity as the Company’s President, Europe, the Executive will take the position as a Managing Director of subsidiaries or associated companies of the Company, in particular as a Managing Director of the German subsidiary Autoliv B.V. & Co. KG and will perform all necessary activities to execute these positions.

3. Employment Period . The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “ Employment Period ”); provided , however , that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than six (6) calendar months prior to such date of termination; provided , further , however , that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. The right of the Company and the Executive to terminate the employment for good cause (termination in

the meaning of section 626 of the German Civil Code (BGB)) with immediate effect remains unaffected. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate at the latest upon expiry of the month in which the Executive reaches the applicable statutory retirement age or his complete reduction in earning capacity is determined (“ Retirement ”).

4. Extent of Service . During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided , however , that the Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consent of the Chief Executive Officer, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided that nothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5. Compensation and Benefits .

(a) Base Salary . During the Employment Period, the Executive shall receive a gross salary at the rate of USD 532,510 per year (“ Base Salary ”), less normal withholdings, payable in 26 equal installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “ Compensation Committee ”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

Equity Incentive Compensation . During the Employment Period, the Executive shall be eligible for equity grants under the Autoliv, Inc. Amended and Restated 1997 Stock Incentive Plan or any successor plan or plans, having such terms and conditions as awards to other peer executives of the Company, as determined by the Compensation Committee in its sole discretion, unless the Executive consents to a different type of award or different terms of such award than are applicable to other peer executives of the Company. Nothing herein

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requires the Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year. For the avoidance of doubt, the Executive shall not be eligible to receive any additional equity grants from the company with respect to calendar year 2018. The Autoliv, Inc. Amended and Restated 1997 Stock Incentive Plan, or any successor plan or plans, may be terminated, adjusted or altered by the Company at its reasonably exercised discretion (in the meaning of “nach billigem Ermessen” according to section 315 of the German Civil Code (BGB)).

(c) Expenses . The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by him in the performance of his duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(d) Conditions of Employment . Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

Payments and Benefits Provided by Third Parties . The Company and the Executive agree that all payments and benefits owed by the Company to the Executive with regard to this Agreement can be provided by subsidiaries of the Company, in particular the German subsidiary Autoliv B.V. & Co. KG to the Executive and shall be deemed as performance of this Agreement by the Company vis-à-vis the Executive.

6. Vacation . The Executive shall be entitled to yearly vacation amounting to 30 days.

7. Benefits . The Executive will be covered by the US social security plan as appropriate and will continue to keep his current participation in the US 401k retirement plan according to the applicable rules in the Home country. Additionally, the Company will pay a monthly gross cash Retirement Replacement Allowance of 25% of gross base salary.

The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. The Company will also reimburse the cost of a Health & Gym Club Membership until end of 2019. The Company shall bear any tax and employee’s contributions to social security possibly payable due to these benefits.

Accommodation costs, as agreed between the Executive and the Company, plus costs for utilities such as heating and electricity, shall be paid by the Company end of year 2020. The Company shall bear any tax and employee’s contributions to social security possibly payable due to these benefits.

In the event that the Company asks the Executive to change work location, the Company will pay travel and moving cost for the Executive. In the event that the Executive returns to his home country after termination of employment for reasons other than Cause, retirement and resignation without Good Reason, the Company will pay travel and moving cost for the Executive.

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The Company will pay for two round-trip, economy class air tickets, between Germany and the U.S.A or Korea for the Executive and the accompanying family member until end of 2019. The Company shall bear any tax and employee’s contributions to social security possibly payable due to this benefit.

The Executive’s income will be tax equalized between Germany and the U.S.A. according to then applicable practices of the Company.

The Autoliv Group Expatriate Medical Plan, a private health insurance, shall cover the Executive and his accompanying family members.

10. Termination of Employment .

(a) Death; Retirement . The Executive’s employment shall terminate automatically upon his death or Retirement.

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duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and Executive Vice President Human Resources establishes to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(ii) a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

(iii) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

(iv) the failure by the Company to continue in effect any compensation plan in which the Executive participates on the Effective Date which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other participants, as existed on the Effective Date; or

(v) the failure by any successor to the business of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

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the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by the Executive. The Executive’s termination for Good Reason must occur within a period of 160 days after the occurrence of an event of Good Reason. The Executive’s right to terminate employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. Good Reason shall not include the Executive’s death. For purposes of this Agreement, the Spin-Off, and any changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off, shall not constitute a Good Reason Event.

(d) Notice of Termination . Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “ Notice of Termination ” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

(e) Date of Termination . Date of Termination . “ Date of Termination ” means (i) if the Executive’s employment is terminated other than by reason of death or Retirement, the end of the notice period specified in Section 3 hereof (if applicable), or (ii) if the Executive’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Executive, or (iii) if the Executive’s employment is terminated by reason of Retirement, the Date of Termination shall be the date of Retirement.

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Revocation of the Appointment as Managing Director . Notwithstanding the terms regarding the termination of employment, the appointment as Managing Director of a German subsidiary (GmbH), in particular of the Autoliv B.V. & Co. KG , can be revoked at any time by resolution of the shareholders´ of the applicable German subsidiary.

11. Obligations of the Company Upon Termination of Employment .

Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason . If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 21(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination. For purposes of the Prior Agreement, the Spin-Off or any other changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off shall not constitute an event that would permit the Executive to terminate his employment or a termination of the Executive’s employment by Autoliv other than for “Cause” (as defined in the Prior Employment).

(a) Death . If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive or the Executive’s legal representatives under this Agreement, other than such death benefits he or they would otherwise be entitled to receive under any plan, program, policy or practice or contract or agreement of the Company or its affiliated companies.

(b) Retirement . If the Executive’s employment is terminated in connection with his Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

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(c) Cause; Voluntary Resignation . If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns his employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

13. Non-Competition Covenant; Payment for Non-Competition Covenant .

(b) The Non-Competition Covenant shall not apply:

(i) in the event the Executive’s employment is terminated by the Company other than for Cause (pursuant to Section 10(b) hereof) or other than for good cause (in the meaning of section 626 of the German Civil Code (BGB)); or

(ii) in the event the Executive resigns for Good Reason.

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14. Inventions .

16. Disputes . Disputes regarding this Agreement (including, without limitation, disputes regarding the existence of Cause, good cause or Good Reason) shall be settled by arbitration in accordance with the rules of arbitration of the Deutsche Institution für Schiedsgerichtsbarkeit e.V. (DIS) (DIS-Schiedsgerichtsordnung) under exclusion from the system of ordinary courts. The arbitration shall take place in Munich and, unless otherwise agreed to by both parties, there shall be three (3) arbitrators. Each party has the right to name one of the arbitrators, the third arbitrator has to be named by the arbitrators, named by the parties. All costs and expenses for the arbitration, whether initiated by the Company or by the Executive, including the Executive’s costs for solicitor, shall be borne by the Company, unless the arbitrators determine the Executive’s claim(s) to be frivolous and in bad faith, in which case the

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arbitrators may allocate costs as they deem fit. Any payments due to the Executive pursuant to the preceding sentence shall be made within fifteen (15) business days after delivery of the Executive’s written request for payment accompanied with such evidence of costs and expenses incurred as the Company reasonably may require.

17. Governing Law . This Agreement shall be governed by and construed in accordance with German law.

20. Notices . All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:		Michael A Hague

If to the Company:		Autoliv Inc.
		WTC, Klarabergsviadukten 70
		111 64 Stockholm, Sweden

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

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(b) Definitional Restrictions . Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“ Non-Exempt Deferred Compensation ”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such termination of employment, as the case may be, meet any description or definition of or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

(c) Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A‑3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “ Required Delay Period ”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

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( signatures on following page )

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/ Mike Hague

Mike Hague

Autoliv Inc.

/s/ Jan Carlson

Jan Carlson

Chief Executive Officer and President

/s/ Karin Eliasson

Karin Eliasson

GVP Human Resources and Sustainability

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Exhibit 10.12

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into on March 21, 2018 by and between Autoliv Inc., a Delaware corporation (the “ Company ”), and Jordi Lombarte (the “ Executive ”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as the Chief Technology Officer of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

1. Effective Date . It is anticipated that, in connection with a restructuring of Autoliv, Inc., Veoneer Inc. shall be spun-off from the Company and become a free-standing company (the “ Spin-Off ”). The effective date of this Agreement (the “ Effective Date ”) shall be the effective date of the Spin-off Transaction, or such other date to which the parties agree. If the Spin-Off for any reason is not finalized, this Agreement will not become effective and any previous employment terms and conditions between Autoliv ASP Inc. and the Executive (the “Prior Employment”) will continue to apply.

2. Employment . The Executive is hereby employed on the Effective Date as Chief Technology Officer of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer and President of the Company (the “ Chief Executive Officer ”). The principal workplace for the Executive shall be Auburn Hills Michigan, United States.

The Company and the Executive have agreed that the principal workplace of the Executive will be changed to Stockholm, Sweden during 2020 with the existing terms and conditions of this Agreement. The Company will provide the required support for the relocation of the Executive to Sweden.

hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of notice period or the last day of the month preceding the Executive’s 65th birthday ( “ Retirement ” ) .

4. Extent of Service . During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided , however , that the Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consent of the Chief Executive Officer, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided that nothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5. Compensation and Benefits .

(a) Base Salary . During the Employment Period, the Executive shall receive a gross salary at the rate of USD 430,000 per year (“ Base Salary ”), less normal withholdings, payable in 26 equal installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “ Compensation Committee ”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

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Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year. For the avoidance of doubt, the Executive shall not be eligible to receive any additional equity grants from the company with respect to calendar year 2018.

(d) Automobile . The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. If a company car is provided, the Executive and his immediate family may also use the company car for personal purposes and the Company shall bear all petrol, maintenance and repair costs, as well as insurance costs related to the Company car. If a car allowance is provided, the Company shall also bear all petrol, maintenance and repair costs but no other costs for the automobile in addition to the allowance. Whether a company car or a car allowance is provided, the Executive shall be liable for the payment of tax on the car allowance or on the taxable benefit resulting from the right to use the company car for personal purposes.

(f) Conditions of Employment . Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6. Vacation . The Executive shall be entitled to yearly vacation amounting to 25 days.

Temporary Benefits. The Executive will be provided an annual housing allowance of USD 85,500 (gross) until end of August 2020. The Executive will also be reimbursed the schooling fees for one child until August 2020. Executive and his family will be eligible for one home trip per year until July 2020.

In the event that the Executive returns to his home country after termination of employment for reasons other than Cause and resignation without Good Reason, the Company will pay travel and moving cost for the Executive.

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8. Business or Trade Information . The Executive shall not during or after the termination of his employment hereunder disclose to any person, firm of company whatsoever or use for his own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated compan y of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to his Date of Termination, if the Executive’s employment has terminated; provided , however , that nothing in this Section 8 shall preclude the Company from pursuing arbitrati on in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

10. Termination of Employment .

(a) Death; Retirement . The Executive’s employment shall terminate automatically upon his death or Retirement.

(b) Termination by the Company . The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “ Cause ” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “ Board ”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and Executive Vice President Human Resources establishes to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

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(ii) a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

(iii) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

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11. Obligations of the Company Upon Termination of Employment .

(a) Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason . If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 21(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination. For purposes of the Prior Employment, the Spin-Off or any other changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off shall not constitute an event that would permit the Executive to terminate his employment or a termination of the Executive’s employment by Autoliv other than for “Cause”.

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13. Non-Competition Covenant; Payment for Non-Competition Covenant .

(b) The Non-Competition Covenant shall not apply:

(i) in the event the Executive’s employment is terminated by the Company other than for Cause; or

(ii) in the event the Executive resigns for Good Reason.

14. Inventions .

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17. Governing Law . This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

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20. Notices . All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:		Jordi Lombarte


If to the Company:		Autoliv Inc.
		WTC, Klarabergsviadukten 70,
		111 64 Stockholm, Sweden
		Attention: Secretary

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(b) Definitional Restrictions . Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“ Non-Exempt Deferred Compensation ”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such termination of employment, as the case may be, meet any description or definition of “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

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(c) Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A ‑3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “ Required Delay Period ” ); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/ Jordi Lombarte
Jordi Lombarte


Autoliv, Inc.


/s/ Jan Carlson
Jan Carlson
Chief Executive Officer and President


/s/ Karin Eliasson
Karin Eliasson
GVP, Human Resources and Sustainability

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Exhibit 10.13

International Assignment Employment Agreement

This International Assignment Agreement (this “Agreement”) is made and entered into on March 21, 2018 by and between Autoliv Inc. (the “Company”) and Bradley Murray (the “Executive”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

1. Employment and Term

The Company desires to engage the Executive as President, Asia of the Company from and after April 1, 2018 (the “Effective Date”), in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to his by the Chief Executive Officer and President of the Company (the “Chief Executive Officer”). The principal workplace for the Executive shall be Yokohama, Japan. The Company reserves the right to change the normal place of work, if necessary.

This Agreement is for an initial period of two (2) years (the “Assignment Period”), unless it is terminated at a prior date in accordance with Article 13 below.

2. Duties of the Executive

The Executive understands and accepts that the Autoliv standards of Business Conducts and Ethics will define obligations such as confidentiality, inventions, improvements and management of proprietary information. In addition, the Executive understands and accepts that the Executive and any visiting family members shall carefully observe and conform to laws, regulations, rules and cultural practices in the Country of Service and not adopt an active position in relation to political, religious, ethnic or other important local issues that could endanger the Company’s position in the Country of Service.

3. Compensation

3.1 Annual Base Salary

During the assignment, the Executive shall be paid a gross annual base salary of USD 414,099, to be paid in 26 equal installments in arrears twice per month into a bank account as assigned by the Executive. The Executive’s payroll will be processed in the U.S. on the Autoliv North America (ANA) payroll system. The salary shall be subject to an annual review, the first review date being January 1, 2019.

3.2 Foreign Service Allowance

During the assignment, the Executive will be eligible to receive a net annual Foreign Service Allowance (FSA) of USD 222,119, to be paid in 26 equal installments in arrears into a bank account as assigned by the Executive.

3.3 Short Term Incentive

During the assignment, the Executive shall be paid a gross annual Short-Term Incentive equivalent to 45% of the annual base salary at the target performance level according to the rules applicable in the Company for the respective performance year. The maximum cap for the Short-Term Incentive will be two times (2 X) the target level.

3 .4 Long Term Incentive

During the Employment Period, the Executive shall be eligible for equity grants under the Autoliv, Inc. Amended and Restated 1997 Stock Incentive Plan or any successor plan or plans, having such terms and conditions as awards to other peer executives of the Company, as determined by the Compensation Committee in its sole discretion, unless the Executive consents to a different type of award or different terms of such award than are applicable to other peer executives of the Company. Nothing herein requires the Compensation Committee to grant the Executive equity awards or other long-term incentive awards in any year. For the avoidance of doubt, the Executive shall not be eligible to receive any additional equity grants from the company with respect to calendar year 2018.

4. Removal

Upon repatriation to the home country, the Company shall pay verified removal expenses including freight insurance and any customs duty for normal household goods, not exceeding 40 m ³ .

The Company will not pay any removal expenses, custom duty, etc., for cars, boats, motorcycles, caravans/trailers, animals, liquor, etc. Antiquities and other special and expensive items are not included in normal household goods and will not be moved at the expense of the Company.

5. Accommodation

Accommodation costs, at a level of JPY 1,500,000 per month plus additional costs for utilities such as heating and electricity shall be paid by the Company. The Executive will be responsible for all damages and repairs to the accommodation at the end of the rental/lease period .

6. Company Car and Health & Gym Club Membership

The Executive is entitled to a company car. The Company will also pay for necessary maintenance and running costs of the car.

The Company will reimburse the cost of a Club Membership throughout the Executives assignment with the Company.

7. Working Hours and Public H olidays

7.1 Staggered Working Hours

It may be necessary to work hours other than regular working hours at the place of service. The overall salary and benefit package have been defined to reflect and include additional hours the Executive may be required to work.

7.2 Public Holidays

Public holidays in the Host Country are free from work.

8. Vacation and Time Off

The Executive shall be entitled to paid vacation in line with the Company’s policy.

9. Travel Regulations

9.1 Home Leave

The Company will pay a total number of four (4) round-trip business class air tickets for each 12 months of service to be used for the Executive and for his spouse between Japan and the U.S.A

9 .2 Travel in Case of I llness

In the case of serious illness or accident involving the Executive or his spouse, a Medical Doctor, approved by the Company, will decide if the Executive should be transferred to the Home Country, or elsewhere, for medical attention. This decision is based on consultation with the Executive and the family if the circumstances so permit. The Company will arrange and pay for such travel.

9.3 Emergency Travel

Upon death or critical illness (if the patient’s life is at risk) of a close relative (parents of the Executive or his spouse or Executive’s children who are not on assignment), the Company will pay one return ticket to the Home Country to attend the funeral service or attend to related matters.

10. Business or Trade Information

The Executive shall not during or after the termination of his employment hereunder disclose to any person, firm of company whatsoever or use for his own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated company of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 10, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to his Date of Termination, if the Executive’s employment has terminated; provided , however , that nothing in this Section 10 shall preclude the Company from pursuing arbitration according to the applicable laws.

11. Social Security, Pension and Medical Plans

11.1 Social Security, Pension and Retirement

The Executive will continue to be covered by the Home Country’s social security plan as appropriate and will continue keep his current participation in the Home Company’s pension (including the excess pension plan) and retirement plans according to the applicable rules in the Home country.

11.2 Medical Plan and Travel Insurance

The Autoliv Group Expatriate Medical Plan, a private health insurance as provided by Allianz, shall cover the Executive and his spouse, as applicable, including travel insurance. The Executive’s son Kurtis J. Murray will be covered by the same plan until October 31, 2018.

For a period of twelve (12) months from the Termination Date, Autoliv will subsidize Employee’s medical and dental benefits (to continue medical and dental coverage) by continuing to pay the Employer premium costs.

12. Taxation

The Executive is responsible for the reporting and payment of any and all income taxes levied on him for all remuneration, allowances and benefits provided by the Company, in accordance with the laws of and Japan and the U.S.A.

The Company will cover income taxes levied on the Executive in the Host Country for assignment related benefits not provided by the Home Company prior to the assignment (e.g. housing, home leave, company car or transportation expenses).

12.1 Tax Consultation

The Executive will be entitled to assistance in the preparation and filing of the annual tax return both Japan and the U.S.A.

12.2 Tax Equalization

The Executive’s income will be tax equalized between Japan and the U.S.A. according to then applicable practices of the Company during the Assignment Period. Additionally, the company acknowledges the internal memo from 2014 sent to the Executive about tax equalization of inheritance tax in case of the Executives death during the Assignment Period. The company and the Executive have agreed to define the principles of implementation latest by July 1, 2018.

13. Termination

The Agreement will cease automatically at the expiration of the Assignment Period, the “Termination Date”. if the Executive and the Company do not agree on prolonging the Assignment at least six months prior to the end of the original Assignment Period. Each party is entitled to terminate the Assignment Period before the date of expiration. The mutual period of notice of termination of the agreement shall be six (6) months, or until the Termination Date of the Agreement if the notice is given during the last six months of the Assignment Period.

14. Non-Competition Covenant; Payment for Non-Competition Covenant.

During the twelve (12) months immediately following the termination of his employment with the Company, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in his employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “Non-Competition Covenant”).

The Non-Competition Covenant shall not apply in the event the Executive’s employment is terminated by the Company other than for Cause.

If the Executive does not comply with the Non-Competition Covenant when applicable, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the last twelve (12) months prior to the Date of Termination.

If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided, however, that the aggregate monthly payments from the Company pursuant to this Section 14 shall not exceed sixty percent (60%) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 60% aggregate amount has been paid, no further payments will be made under this Section 14. As a condition to the receipt of such payments, the Executive must inform the Company of his base salary in his new employment on a monthly basis.

15. Entire Agreement

This Agreement supersedes any other previous agreements and arrangements whether written, oral or implied between the Company or Autoliv and the Executive relating to the employment of the Executive, without prejudice to any rights accrued to the Company or the Executive prior to the commencement of his employment under this Agreement.

The Severance Payments, equivalent to USD 800,000 as described in the Prior Agreement will not be paid on April 1, 2018, but the payment of the same amount will be postponed to the earlier of the Termination Date and latest 6 months after the Termination.

The Severance Agreement dated August 15, 1999, amended December 15, 2008 will continue to apply.

1 6 . Amendments and Severability

Amendments to this Agreement are only valid if made in writing and signed by the signatories to this Agreement. If any provision of this Agreement should be found not to be enforceable or applicable the remaining provisions of this Agreement will be interpreted so as best to reasonably affect the intentions of the parties and shall not render invalid any other part of this Agreement.

17. Governing Law and Points of Dispute

This Agreement shall be governed by the laws of the Country of Service. Disputes arising out of the application or the interpretation of this Agreement shall, if not solved in direct discussions between the Company and the Executive, be referred to arbitration and be decided according to Home Country law. The Company will cover the costs of arbitration court unless the Arbitration Board states that the Executive intentionally or by negligence caused the arbitration process.

This Agreement has been signed by each party and a copy of this Agreement has been provided to all parties concerned. It is the only Agreement valid for the assignment and replaces all previous international assignment contracts signed between the Executive and Autoliv (including its subsidiaries).

March 21, 2018


Signed on behalf of Autoliv		I have read, understood and agree to be bound by this Agreement:


/s/ Jan Carlson		/s/ Bradley Murray
Jan Carlson,		Bradley Murray
Chairman and CEO


/s/ Karin Eliasson
Karin Eliasson
Group Vice President
Human Resources and Sustainability

Exhibit 10.14

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into on March 21, 2018 by and between Autoliv Inc., a Delaware corporation (the “ Company ”), and Anthony Nellis (the “ Executive ”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as the General Counsel, Executive Vice President, Legal Affairs and Secretary of the Board of Directors of the Company (the “ Board ”) of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

1. Effective Date . It is anticipated that, in connection with a restructuring of Autoliv, Inc., Veoneer Inc. shall be spun-off from the Company and become a free-standing company (the “ Spin-Off ”). The effective date of this Agreement (the “ Effective Date ”) shall be the effective date of the Spin-off Transaction, or such other date to which the parties agree. If the Spin-Off for any reason is not finalized, this Agreement will not become effective and any previous employment terms and conditions between Autoliv ASP, Inc. and the Executive (the “Prior Employment”) will continue to apply.

2. Employment . The Executive is hereby employed on the Effective Date as the General Counsel, Executive Vice President, Legal Affairs and Secretary of the Board of Directors of the Company (the “ Board ”) of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to him by the Chief Executive Officer and President of the Company (the “ Chief Executive Officer ”). The principal workplace for the Executive shall be Auburn Hills Michigan, United States.

3. Employment Period . The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “ Employment Period ”); provided , however , that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of his employment not less than six (6) calendar months prior to such date of termination; provided , further , however , that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of notice period or the last day of the month preceding the Executive’s 65th birthday (“ Retirement ”).

4. Extent of Service . During the Employment Period, the Executive shall use his best efforts to promote the interests of the Company and those of any parent, subsidiary and associated compan y of the Company, and shall devote his full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated compan y . In addition, the Executive shall devote as much time outside normal business hours to the performance of his duties as may in the interests of the Company be reasonably necessary; provided , however , that the Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of his work during such time. During the Employment Period, the Executive shall not, without the consen t o f the Chief Executive Officer , directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided that nothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5. Compensation and Benefits .

(a) Base Salary . During the Employment Period, the Executive shall receive a gross salary at the rate of USD 400,000 per year (“ Base Salary ”), less normal withholdings, payable in 26 equal installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “ Compensation Committee ”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

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(d) Automobile . The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. If a company car is provided, the Executive and his immediate family may also use the company car for personal purposes and the Company shall bear all petrol, maintenance and repair costs, as well as insurance costs related to the Company car. If a car allowance is provided, the Company shall also bear all petrol, maintenance, repair costs but no other costs for the automobile in addition to the allowance. Whether a company car or a car allowance is provided, the Executive shall be liable for the payment of tax on the car allowance or on the taxable benefit resulting from the right to use the company car for personal purposes.

(f) Conditions of Employment . Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6. Vacation . The Executive shall be entitled to yearly vacation amounting to 25 days.

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10. Termination of Employment .

(a) Death; Retirement . The Executive’s employment shall terminate automatically upon his death or Retirement.

(b) Termination by the Company . The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “ Cause ” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “ Board ”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer and Executive Vice President Human Resources establishes to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

(ii) a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

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(iv) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

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11. Obligations of the Company Upon Termination of Employment .

(a) Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason . If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 21(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination. The Spin-Off or any other changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off shall not constitute an event that would permit the Executive to terminate his employment or a termination of the Executive’s employment by Autoliv other than for “Cause”.

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13. Non-Competition Covenant; Payment for Non-Competition Covenant .

(b) The Non-Competition Covenant shall not apply:

(i) in the event the Executive’s employment is terminated by the Company other than for Cause; or

(ii) in the event the Executive resigns for Good Reason.

14. Inventions .

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17. Governing Law . This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

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20. Notices . All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive :		Anthony Nellis




If to the Company :		Autoliv Inc.
		WTC, Klarabergsviadukten 70,
		111 64 Stockholm, Sweden
		Attention: Secretary

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(b) Definitional Restrictions . Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“ Non-Exempt Deferred Compensation ”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such termination of employment, as the case may be, meet any description or definition of “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

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(c) Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of the Executive’s separation from service during a period in which he is a “specified employee” (as defined in Code Section 409A and the final regulations thereunder), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A ‑3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes), (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Executive’s separation from service (or, if the Executive dies during such period, within thirty (30) days after the Executive’s death) (in either case, the “ Required Delay Period ” ); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

( signatures on following page )

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/ Anthony Nellis

Anthony Nellis

Autoliv, Inc.

/s/ Jan Carlson

Jan Carlson

Chief Executive Officer and President

/s/ Karin Eliasson

Karin Eliasson

GVP, Human Resources and Sustainability

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Exhibit 10.15

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made and entered into on March 21, 2018 by and between Autoliv Inc. (the “ Company ”), and Sherry Vasa (the “ Executive ”), to be effective as of the Effective Date, as defined in Section 1. References herein to the “Company” shall, as applicable, be deemed to include the Company’s affiliates.

BACKGROUND

The Company desires to engage the Executive as Executive Vice President, Human Resources and Sustainability of the Company from and after the Effective Date, in accordance with the terms of this Agreement. The Executive is willing to serve as such in accordance with the terms and conditions of this Agreement.

1. Effective Date . It is anticipated that, in connection with a restructuring of Autoliv, Inc., Veoneer Inc. shall be spun-off from the Company and become a free-standing company (the “ Spin-Off ”). The effective date of this Agreement (the “ Effective Date ”) shall be the effective date of the Spin-off Transaction, or such other date to which the parties agree. If the Spin-Off for any reason is not finalized, this Agreement will not become effective and any previous employments term and conditions between Autoliv ASP Inc. and the Executive (the “Prior Employment”) will continue to apply.

2. Employment . The Executive is hereby employed on the Effective Date as the Executive Vice President Human Resources and Sustainability of the Company. In this capacity, the Executive shall have the duties, responsibilities and authority commensurate with such position as shall be assigned to her by the Chief Executive Officer and President of the Company (the “ Chief Executive Officer ”). The principal workplace for the Executive shall be Stockholm, Sweden.

3. Employment Period . The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company from the Effective Date and thereafter unless and until terminated by the Company or the Executive (the “ Employment Period ”); provided , however , that (i) the Company must give the Executive written notice of termination of the Executive’s employment not less than six (6) calendar months prior to such date of termination, and (ii) the Executive must give the Company written notice of termination of her employment not less than six (6) calendar months prior to such date of termination; provided , further , however , that in the event of a termination by the Company for Cause pursuant to Section 10(b) hereof, the 6-month notice requirement provided in clause (i) of the foregoing provision shall not apply and the Executive’s termination of employment shall be effective immediately. Notwithstanding the foregoing, the Executive’s employment shall automatically terminate on the earlier occurrence of the end of the notice period or the last day of the month preceding the Executive’s 65th birthday (“ Retirement ”).

4. Extent of Service . During the Employment Period, the Executive shall use her best efforts to promote the interests of the Company and those of any parent, subsidiary and associated company of the Company, and shall devote her full time and attention during normal business hours to the business and affairs of the Company and any parent, subsidiary and associated company. In addition, the Executive shall devote as much time outside normal business hours to the performance of her duties as may in the interests of the Company be reasonably necessary; provided , however , that the Executive shall not receive any remuneration in addition to that set out in Section 5 hereof in respect of her work during such time. During the Employment Period, the Executive shall not, without the consent of the Chief Executive Officer, directly or indirectly, either alone or jointly with or as a director, manager, agent or servant of any other person, firm or company, be engaged, concerned or interested in any business in a manner that would conflict with the Executive’s duties under this Section 4 (including holding any shares, loan, stock or any other ownership interest in any competitor of the Company), provided that nothing in this Section 4 shall preclude the Executive from holding shares, loan, stock or any other ownership interest in an entity other than a competitor of the Company as an investment.

5. Compensation and Benefits .

(a) Base Salary . During the Employment Period, the Executive shall receive a gross salary at the rate of USD 360,000 per year (“ Base Salary ”), less normal withholdings, payable in 26 equal installments as are or become customary under the Company’s payroll practices for its employees from time to time. The Compensation Committee of the Board of Directors of the Company (the “ Compensation Committee ”) shall review the Executive’s Base Salary annually during the Employment Period. Any adjustments to the Executive’s annual base salary shall become the Executive’s Base Salary for purposes of this Agreement.

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(d) Expenses . The Executive shall be entitled to receive payment or reimbursement for all reasonable traveling, hotel and other expenses incurred by her in the performance of her duties under this Agreement, in accordance with the policies, practices and procedures of the Company as in effect from time to time. The Executive shall provide the Company with receipts, vouchers or other evidence of actual payment of the expenses to be reimbursed, as requested by the Company.

(e) Conditions of Employment . Normal conditions of employment as issued by the Company apply to the receipt of benefits under this Section 5.

6. Vacation . The Executive shall be entitled to yearly vacation amounting to 30 days.

The Company shall provide the Executive with a company car or, if consistent with local policies where the Executive is based, a car allowance. Accommodation costs as agreed between the Executive and the Company, plus costs for utilities such as heating and electricity, shall be paid by the Company until end of year 2019.

The Company will pay for one round-trip, economy class air tickets, between Sweden and the U.S.A for the Executive and the accompanying family member until end of 2019.

The Executive’s income will be tax equalized between Sweden and the U.S.A. according to then applicable practices of the Company.

The Autoliv Group Expatriate Medical Plan and a private health insurance shall cover the Executive and accompanying family members (Bernard James Vasa III (Birthdate February 18, 1965) and Madison Jody Vasa (Birthdate October 12, 1994)). Madison Jody Vasa’s medical plan and private health insurance will be valid until October 12, 2020.

During the employment period, if requested by the Executive, the Company shall provide assistants in the preparation and filing of the Executives annual tax return in both her home country of USA and in Sweden. The tax adviser shall be selected by the Company.

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8. Business or Trade Information . The Executive shall not during or after the termination of her employment hereunder disclose to any person, firm of company whatsoever or use for her own purpose or for any purposes other than those of the Company any information relating to the Company (including any parent, subsidiary or associated company of the Company) or its business or trade secrets of which he has or shall hereafter become possessed. These restrictions shall cease to apply to any information which may come into the public domain (other than by breach of the provisions hereof). In the event that the Executive does not comply with this Section 8, the Company shall be entitled to damages equal to six (6) times the average monthly Base Salary that the Executive received during the preceding twelve (12) months, if the Executive continues to be employed, or during the last twelve (12) months prior to her Date of Termination, if the Executive’s employment has terminated; provided , however , that nothing in this Section 8 shall preclude the Company from pursuing arbitration in accordance with Section 16 herein and seeking additional damages from the Executive in the event that the Company is able to demonstrate to the arbitrators that the value of the damages incurred by the Company due to the Executive’s violation of this Section 8 exceed the aggregate value of the damages paid by the Executive to the Company pursuant to the foregoing provision.

9. Company Property . The Executive shall upon the termination of her employment hereunder for whatever reason immediately deliver to the Company all designs, specifications, correspondence and other documents, papers, the car provided hereunder and all other property belonging to the Company or any of its affiliated companies or which may have been prepared by her or have come into her possession in the course of her employment.

10. Termination of Employment .

(a) Death; Retirement . The Executive’s employment shall terminate automatically upon her death or Retirement.

(b) Termination by the Company . The Company may terminate the Executive’s employment during the Employment Period with or without Cause. “ Cause ” for termination by the Company of the Executive’s employment shall mean (i) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board of Directors of the Company (the “ Board ”), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Chief Executive Officer establishes to the Board by clear and convincing evidence that Cause exists, subject to Section 10(f) hereof.

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(c) Termination by the Executive . The Executive may terminate her employment during the Employment Period with Good Reason or without Good Reason. “ Good Reason ” shall mean the occurrence, without the Executive’s express written consent, of any of the following “ Good Reason Events ”:

(ii) a reduction by the Company in the Executive’s annual base salary as in effect on the Effective Date or as the same may be increased from time to time;

(iii) the failure by the Company to pay to the Executive any portion of the Executive’s current compensation within seven (7) days of the date such compensation is due;

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(d) Notice of Termination . Any termination by the Company or the Executive of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto. For purposes of this Agreement, a “ Notice of Termination ” shall mean a written notice which shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the termination date. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder.

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11. Obligations of the Company Upon Termination of Employment .

(a) Termination by the Company Other Than for Cause; Termination by the Executive for Good Reason . If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause, or the Executive shall terminate employment for Good Reason, then, and only if within forty-five (45) days after the Date of Termination the Executive shall have executed a separation agreement containing a full general release of claims and covenant not to sue, in the form provided by the Company, and such separation agreement shall not have been revoked within such time period, within sixty (60) days after the Date of Termination (or such later date as may be required pursuant to Section 21(c) herein), the Company shall pay to the Executive a lump sum severance payment, in cash, equal to one and a half times (1.5x) the Executive’s Base Salary as in effect immediately prior to the Date of Termination. For purposes of the Prior Employment, the Spin-Off or any other changes to the terms and conditions of the Executive’s employment in connection with the Spin-Off shall not constitute an event that would permit the Executive to terminate her employment or a termination of the Executive’s employment by Autoliv other than for “Cause”.

(c) Retirement . If the Executive’s employment is terminated in connection with her Retirement during the Employment Period, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

(d) Cause; Voluntary Resignation . If the Executive’s employment is terminated by the Company for Cause during the Employment Period, or the Executive voluntarily resigns her employment without Good Reason, this Agreement shall terminate without further obligations to the Executive; provided , however , that the Executive shall nonetheless be subject to the covenants set forth in Section 13 herein.

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13. Non-Competition Covenant; Payment for Non-Competition Covenant .

(a) Except as provided in Section 13(b), during the twelve (12) months immediately following the termination of her employment with the Company, the Executive shall not (i) accept employment with a competitor of the Company in a capacity in which such competitor can make use of the confidential information relating to the Company that the Executive has obtained in her employment with the Company, (ii) engage as a partner or owner in such competitor of the Company, nor (iii) act as an advisor to such competitor (the “ Non-Competition Covenant ”).

(b) The Non-Competition Covenant shall not apply:

(i) in the event the Executive’s employment is terminated by the Company other than for Cause; or

(ii) in the event the Executive resigns for Good Reason.

(d) If the Non-Competition Covenant becomes operative, then the Company shall pay to the Executive, as compensation for the inconvenience of such Non-Competition Covenant, up to twelve (12) monthly payments equal to the Executive’s monthly Base Salary as in effect on the Date of Termination, less the monthly salary earned during such month by the Executive in a subsequent employment, if any; provided , however , that the aggregate monthly payments from the Company pursuant to this Section 13(d) shall not exceed sixty percent (60%) of the Executive’s annual Base Salary as in effect on the Date of Termination, and once the 60% aggregate amount has been paid, no further payments will be made under this Section 13(d). As a condition to the receipt of such payments, the Executive must inform the Company of her base salary in her new employment on a monthly basis. No payments shall be made under this Section 13 if the Executive’s employment is terminated in connection with her Retirement.

14. Inventions .

(b) The entitlement as between the Company and the Executive to the Executive’s Inventions shall be determined in accordance with the current Act (1949:345) on the Right to Inventions made by Employees and the Executive acknowledges that because of the nature of her duties and the particular responsibilities arising therefrom he has a special obligation to further the interests of the Company’s undertaking.

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17. Governing Law . This Agreement shall be governed by and construed in accordance with Swedish law and, where applicable, the laws of any applicable local jurisdictions.

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20. Notices . All notices and other communications hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:		Sherry Vasa

If to the Company:		Autoliv Inc.
		WTC, Klarabergsviadukten 70
		111 64 Stockholm, Sweden

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(b) Definitional Restrictions . Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“ Non-Exempt Deferred Compensation ”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of a the Executive’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such termination of employment, as the case may be, meet any description or definition of “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any Non-Exempt Deferred Compensation upon a termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service,” as the case may be, or such later date as may be required by subsection (c) below. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

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( signatures on following page )

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IN WITNESS whereof this Agreement has been executed the day and year first above written.

/s/ Sherry Vasa
Sherry Vasa

Autoliv Inc.

/s/ Jan Carlson
Jan Carlson
Chief Executive Officer and President

/s/ Karin Eliasson
Karin Eliasson
GVP, Human Resources and Sustainability

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Exhibit 31.1

CERTIFICATION of

the Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Mikael Bratt, certify that:

I have reviewed this quarterly report on Form 10-Q of AUTOLIV, INC.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 27, 2018

/s/ Mikael Bratt

Mikael Bratt

President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION of

the Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Mats Backman, certify that:

I have reviewed this quarterly report on Form 10-Q of AUTOLIV, INC.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

July 27, 2018

/s/ Mats Backman

Mats Backman

Chief Financial Officer

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Autoliv, Inc. (the “Company”) for the period ended June 30, 2018, filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mikael Bratt, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 27, 2018

/s/ Mikael Bratt

Mikael Bratt

President and Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Autoliv, Inc. (the “Company”) for the period ended June 30, 2018, filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mats Backman, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 27, 2018

/s/ Mats Backman

Mats Backman

Chief Financial Officer