Exhibit 10(d)

MASTER AGREEMENT OF PURCHASE AND SALE

between

GOODRICH CORPORATION

and

TRW INC.

Dated as of June 18, 2002

 

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TABLE OF CONTENTS

                  Page             ARTICLE I DEFINITIONS       Section 1.1  
Definitions   1       ARTICLE II PRELIMINARY TRANSFERS; SALE AND
PURCHASE OF ASSETS       Section 2.1   Preliminary Transactions   14 Section 2.2
  Sale of Equity Interests   14 Section 2.3   Transfer of Assets; Retained
Assets   15 Section 2.4   Assumption of Liabilities; Excluded Liabilities   18
Section 2.5   The Purchase Price   23 Section 2.6   Purchase Price Adjustment  
23 Section 2.7   Allocation of Consideration   25 Section 2.8   Proration   27  
    ARTICLE III CLOSING       Section 3.1   Closing   28 Section 3.2  
Deliveries at Closing   28       ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF TRW       Section 4.1   Organization and Existence   28
Section 4.2   Power and Authority   29 Section 4.3   Authorization   29
Section 4.4   Binding Effect   29 Section 4.5   Interest in Subsidiaries and
Affiliates   29 Section 4.6   No Defaults; Consents   30 Section 4.7   Financial
Statements   31 Section 4.8   No Undisclosed Liabilities   32 Section 4.9  
Absence of Certain Changes   32 Section 4.10   Litigation   32 Section 4.11  
Compliance with Applicable Law   32 Section 4.12   Taxes   33 Section 4.13  
Employee Benefit Plans   34 Section 4.14   Intellectual Property   39
Section 4.15   Labor Relations; Employees   40 Section 4.16   Environmental
Matters   41 Section 4.17   Real Property   42

 

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                          Section 4.18   Material Contracts   43 Section 4.19  
Title to Assets   45 Section 4.20   Affiliated Transactions   45 Section 4.21  
Product Liability; Airworthiness   45 Section 4.22   Insurance   45 Section 4.23
  Inappropriate Payments   46 Section 4.24   Entire Business; Sufficiency of
Assets   46 Section 4.25   Brokers and Finders   46 Section 4.26   No Other
Representations and Warranties   46       ARTICLE V REPRESENTATIONS AND
WARRANTIES
OF BUYER       Section 5.1   Organization and Existence   47 Section 5.2   Power
and Authority   47 Section 5.3   Authorization   47 Section 5.4   Binding Effect
  47 Section 5.5   No Defaults; Consents   48 Section 5.6   Litigation   48
Section 5.7   Financing   48 Section 5.8   Brokers or Finders   49 Section 5.9  
Investment Representations   49 Section 5.10   No Other Representations and
Warranties   49 Section 5.11   Certain Transactions   50       ARTICLE VI
COVENANTS       Section 6.1   Conduct of the Business   50 Section 6.2   Access
to Information   53 Section 6.3   Reasonable Best Efforts   54 Section 6.4  
Consents and Approvals   55 Section 6.5   Further Assurances   57 Section 6.6  
Property Transfer Taxes; Other Expenses; Bulk Transfer Laws   57 Section 6.7  
Publicity   58 Section 6.8   Employees and Employee Benefit Plans   59
Section 6.9   Novation of Government Contracts; Hedging Contracts   84
Section 6.10   Tax Matters   84 Section 6.11   Transition and Ancillary
Agreements   86 Section 6.12   Waiver of Bulk Sales Requirement   87
Section 6.13   Post-Closing Access to Records and Employees   87 Section 6.14  
Intellectual Property Licenses; Related Matters   88 Section 6.15  
Non-Competition Agreement   89 Section 6.16   No Hire and Non-Solicitation of
Employees   90 Section 6.17   No Shop   91 Section 6.18   Certain Transactions  
91 Section 6.19   Environmental Matters   92

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                          Section 6.20   Insurance Matters   92 Section 6.21  
Communications with Customers   93 Section 6.22   Claim Management   93      
ARTICLE VII CONDITIONS       Section 7.1   Conditions to Each Party’s
Obligations   94 Section 7.2   Conditions to Obligations of Buyer   95
Section 7.3   Conditions to Obligations of TRW   95       ARTICLE VIII
TERMINATION       Section 8.1   Termination   96 Section 8.2   Effect of
Termination   97 Section 8.3   Extension; Waiver   97       ARTICLE IX SURVIVAL;
INDEMNIFICATION       Section 9.1   Survival Periods   98 Section 9.2  
Indemnification   98 Section 9.3   Claims   100 Section 9.4   Limitation of
Liability   100 Section 9.5   Nature of Remedies   101       ARTICLE X
MISCELLANEOUS       Section 10.1   Notices   101 Section 10.2   Amendments and
Waivers   102 Section 10.3   Headings   102 Section 10.4   Counterparts   102
Section 10.5   Entire Agreement   102 Section 10.6   Governing Law   103
Section 10.7   Resolution of Disputes   103 Section 10.8   Waiver of Jury Trial
  104 Section 10.9   Assignment   104 Section 10.10   Fees and Expenses   104
Section 10.11   Binding Nature; Third-Party Beneficiaries   104 Section 10.12  
Severability   104 Section 10.13   No Right of Setoff   105 Section 10.14  
Currency   105 Section 10.15   Specific Performance   105 Section 10.16  
Construction   105

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      List of Schedules   1.1(a)   “Knowledge of TRW” 1.1(b)   “Knowledge of
Buyer” 1.1(c)   Reference Balance Sheet 2.1   Preliminary Transfers 2.2   List
of Aerospace Subsidiaries, Aerospace Affiliates, and Equity Interests 2.3(a)  
List of Asset Selling Subsidiaries 2.3(a)(xiv)   Assumed Hedging Contracts
2.3(b)   Other Retained Assets 2.3(b)(x)   Retained Real Property 2.4(a)(iv)  
Pre-Closing Customer Contract Claims 2.4(a)(vii)   Assumed Guarantees 2.4(b)(v)
  Procedures Governing Certain Claims 2.4(b)(xiv)   Retained Liabilities 2.7  
Purchase Price Allocation 3.2(a)   TRW’s Closing Deliverables 3.2(b)   Buyer’s
Closing Deliverables 5.7   Commitment Letter 6.1(a)   Permitted Pre-Closing
Actions 6.1(a)(xv)   2002 Capital Expenditure Plan 6.8(b)   Excluded Employees
6.8(d)(iii)   Certain Collective Bargaining Agreements 6.8(d)(iii)(C)   Retiree
Medical Plans 6.8(e)   UK Transferred Employees 6.8(e)(ii)   Provisions with
Respect to TRW UK Pension Scheme 6.8(h)   Assumed Employment Agreements 6.8(k)  
Severance Policies 6.14(a)   Form of License with Respect to the Licensed-Back
Intellectual Property 6.14(b)   Form of License with Respect to the Licensed
Intellectual Property 6.14(c)   Licensed Trademarks 6.14(e)   Licensed Domain
Names 6.20   Terms and Conditions of Insurance Agreement 7.1(a)   Required
Consents

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MASTER AGREEMENT OF PURCHASE AND SALE

     This MASTER AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is dated as
of June 18, 2002, and is between Goodrich Corporation (“Buyer”), a corporation
organized under the laws of New York, and TRW INC. (“TRW”), an Ohio corporation.

RECITALS

     TRW, acting directly and through certain Subsidiaries, and by virtue of its
equity interests in certain Affiliates and non-controlled entities, is engaged
worldwide in the aeronautical systems business, including developing and
manufacturing of products and providing services related to flight control
systems, cargo systems, hoists & winches, power systems, engine systems and
missile actuation systems (the “Business”).

     Buyer desires to purchase from TRW and its Subsidiaries, and TRW desires to
sell to Buyer, certain assets and certain liabilities of the Business, on and
subject to the terms and conditions stated in this Agreement.

TERMS AND CONDITIONS

     In consideration of the premises and of other good and valuable
consideration, and intending to be legally bound hereby, Buyer, on behalf of
itself, and TRW, on behalf of itself and the other TRW Selling Shareholders and
the Asset Selling Subsidiaries, hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Definitions. (a) As used in this Agreement, the following terms
shall have the following meanings:

     “Aboveground Storage Tank” shall have the meaning ascribed to such term in
Section 6901 et seq., as amended, of RCRA, or any applicable state or local
statute, law, rule or regulation, governing aboveground storage tanks.

     “Aerospace Affiliates” shall mean the entities engaged in the Business in
which TRW directly or indirectly holds an equity interest (but less than a 100%
interest), such entities being those listed on Schedule 2.2 hereof.

 

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     “Aerospace Subsidiaries” shall mean the entities engaged in the Business,
in which TRW directly or indirectly holds all of the equity interest, such
entities being those listed on Schedule 2.2 hereof.

     “Affiliate” shall mean, with respect to any Person, any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person.

     “Asset Selling Subsidiaries” shall mean certain direct and indirect
Subsidiaries of TRW engaged in the Business, each of which is identified on
Schedule 2.3(a) hereof, and which will be selling certain assets and
transferring certain liabilities to Buyer in connection with the transactions
contemplated by this Agreement.

     “Assets” shall mean, collectively, the Acquired Assets and the Equity
Interests.

     “Business Day” shall mean any day that is not a Saturday, Sunday or other
day on which banks are required or authorized by law to be closed in the City of
New York.

     “Business Intellectual Property” shall mean, collectively, (i) Equity
Intellectual Property, (ii) Transferred Intellectual Property, (iii) Licensed
Trademarks and (iv) Licensed Intellectual Property.

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

     “Confidentiality Agreement” shall mean the Confidentiality Agreement, dated
April 19, 2002, between Buyer and TRW.

     “Contracts” shall mean all agreements, legally binding commitments,
contracts, leases (including leases and subleases of real property), indentures,
collective bargaining agreements, licenses, undertakings and other arrangements,
written and oral.

     “Control” as applied to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management of
that Person, whether through ownership of voting securities or otherwise;
provided that with respect to Aerospace Affiliates, the ownership of a majority
of the voting stock in an Aerospace Affiliate or the right, whether by contract
or otherwise, to elect at least a majority of the board or similar governing
body of an Aerospace Affiliate shall be deemed “control.”

     “Copyrights” shall mean all copyrights, mask works, copyright and mask work
registrations and applications therefor, and all other rights corresponding
thereto throughout the world.

     “Default” shall mean an occurrence which constitutes a breach or default
under a contract, order or other commitment, after the expiration of any grace
period provided without cure.

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     “Domain Names” shall mean all domain names, uniform resource locators
(“URLs”) and other names and locators associated with the Internet, and all
domain name registration documentation and content associated therewith.

     “Environment” means soils, land surface or subsurface strata, surface
water, sediments, groundwater or outdoor atmosphere.

     “Environmental Claim” means any claim, demand, action, suit, complaint,
proceeding, directive, investigation, lien, demand letter, or written notice of
alleged noncompliance, violation, or liability, by any Person asserting an
Environmental Liability.

     “Environmental Condition” means the presence of Hazardous Substances above
regulatory standards in the Environment or building materials, or the Release of
Hazardous Substances to the Environment above regulatory standards or from
building materials, including, but not limited to, the migration or movement of
Hazardous Substances in or through the Environment.

     “Environmental Laws” shall mean all federal, state, regional, local or
foreign statutes, laws, rules, regulations in existence as of the Closing Date,
where the Business is conducted, currently in existence, any of which govern (or
purport to govern) or relate to pollution, protection of the Environment,
Releases or threatened Releases of Hazardous Substances, solid or hazardous
waste, as any of these terms are or may be defined in such statutes, laws,
rules, regulations, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release, transport or handling of
Hazardous Substances and all laws and regulations with regard to record keeping,
notification, disclosure and reporting requirements respecting Hazardous
Substances, including the following U.S. laws and any similar foreign laws: the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendment and Reauthorization Act of 1986, 42 U.S.C.,
et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and subsequent Hazardous and Solid Waste Amendments of
1984, 42 U.S.C. et seq. (collectively “RCRA”); the Hazardous Materials
Transportation Act, as amended, 49 U.S.C., et seq.; the Clean Water Act, as
amended, 33 U.S.C., et seq.; the Clear Air Act, as amended (42 U.S.C.-7642); the
Toxic Substances Control Act, as amended, 15 U.S.C. et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act as amended, 7 U.S.C.-136y; the
Emergency Planning and Community Right-to-Know Act of 1986, as amended, 42
U.S.C., et seq. (Title III of SARA).

     “Environmental Liability” shall mean all liabilities and obligations with
respect to all actions, grievances, claims, arbitrations, suits, proceedings,
investigations, or requirements, arising under, from or related to Environmental
Laws or Hazardous Substances with respect to the operations or ownership of the
Assets or the Business on or prior to the Closing Date, including without
limitation: (A) any violation or alleged violation of or non-compliance with
Environmental Laws, with respect to the ownership, lease, maintenance or
operation of the Assets or the Business on or prior to the Closing Date,
including, but not limited to, any fines or penalties and the costs associated
with

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correcting any such violations or non-compliance; (B) loss of life or injury to
persons or property (whether or not such loss, injury or damage arose or was
made manifest before the Closing Date or arises or becomes manifest on or after
the Closing Date) caused (or allegedly caused) by any Environmental Condition
at, on, in, under, migrating or discharged from or in the vicinity of the
Assets, to the extent such Environmental Condition resulted from actions or
inactions on or prior to the Closing Date; (C) any Remediation (whether or not
such Remediation commenced before the Closing Date or commences on or after the
Closing Date) of any Environmental Condition at, on, in, under, migrating or
discharged from or in the vicinity of the Assets, to the extent such
Environmental Condition resulted from actions or inactions on or prior to the
Closing Date; (D) any loss of life or injury to persons or property (whether or
not such loss, injury or damage arose or was made manifest before the Closing
Date or arises or becomes manifest on or after the Closing Date) caused (or
allegedly caused) by Hazardous Substances to the extent that such Hazardous
Substances have been generated in connection with the Business and transported
to any Off-Site Location or the arrangement for such activities on or prior to
the Closing Date; and (E) the Remediation (whether or not such Remediation
commenced before the Closing Date or commences on or after the Closing Date) of
Environmental Conditions related to Hazardous Substances to the extent that such
Hazardous Substances have been generated in connection with the Business and
transported to any Off-Site Location, or the arrangement for such activities on
or prior to the Closing Date.

     “Environmental Permit” shall mean any permit, approval, identification
number, license or other authorization required under any applicable
Environmental Law.

     “Equipment” shall mean all equipment and tangible personal property used or
held for use primarily in the Business by TRW Participants (whether as owner,
lessor, lessee or otherwise).

     “Equity Intellectual Property” shall mean all Intellectual Property owned
by, subject to ownership by, licensed to, or subject to license to the Aerospace
Affiliates, Aerospace Subsidiaries and Subsidiaries thereof.

     “Excluded Intellectual Property” shall mean all Intellectual Property other
than the Transferred Intellectual Property.

     “Final Determination” shall mean (i) any final determination of liability
in respect of a Tax that, under applicable law, is not subject to further
appeal, review or modification through proceedings or otherwise (including the
expiration of a statute of limitations or a period for the filing of claims for
refunds, amended returns or appeals from adverse determinations), including a
“determination” as defined in Section 1313(a) of the Code or execution of an
Internal Revenue Service Form 870AD or (ii) the payment of Tax by Buyer, TRW or
any of their Affiliates, whichever is responsible for payment of such Tax under
applicable law, with respect to any item disallowed or adjusted by a Taxing
Authority, provided that such responsible party determines that no action should
be taken to recoup such payment and the other party consents, which consent
shall not be unreasonably withheld.

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     “GAAP” shall mean United States generally accepted accounting principles as
in effect on the date hereof.

     “Governmental Entity” shall mean any federal, state, provincial, county,
municipal or local government in the United States, or any political subdivision
of any of the foregoing, or any non-U.S. entity of a type similar to the
foregoing, or any entity, authority, agency, ministry, commission, tribunal,
arbitral body, court or other similar body exercising executive, legislative,
judicial, regulatory or administrative authority or functions of or pertaining
to government, including any authority or quasi-governmental entity established
to perform any of these functions.

     “Hazardous Substances” means any chemicals, materials or substances defined
as or included in the definition of “hazardous substances”, “hazardous wastes”,
“hazardous materials”, “hazardous constituents”, “restricted hazardous
materials”, “extremely hazardous substances”, “toxic substances”,
“contaminants”, “pollutants”, “toxic pollutants”, or words of similar meaning
and regulatory effect under any applicable Environmental Law including, without
limitation, petroleum or petroleum products and asbestos or asbestos-containing
materials, polychlorinated biphenyls, or any other chemicals, materials or
substances defined or regulated as toxic, or hazardous or as a pollutant or
contaminant under any applicable Environmental Law.

     “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

     “Income Taxes” shall mean U.S. federal, state, local or foreign net income
or capital gain Taxes (but not any gross income Taxes and not any withholding
Taxes).

     “Insurance Agreement” shall mean the agreement relating to the allocation
of insurance proceeds, which shall be entered into pursuant to Section 6.20
hereto.

     “Intellectual Property” shall mean all (i) Patents; (ii) Trade Secrets;
(iii) Copyrights; (iv) Domain Names; (v) Software and (vi) Trademarks.

     “Inventories” shall mean all inventory, work in process, finished goods,
assemblies, sub-assemblies, components, raw materials, and other personal
property used or held for use primarily in the Business and held for sale (or
for use in products to be held for sale) by any of the TRW Participants.

     “knowledge of Buyer” means the actual knowledge, after reasonable inquiry,
of the persons specified on Schedule 1.1(b) hereto.

     “knowledge of TRW” means the actual knowledge, after reasonable inquiry, of
the persons specified on Schedule 1.1(a) hereto.

     “Leased Real Property” means the real property (other than the real
property listed on Schedule 2.3(b)(x)) leased by or for any of the TRW
Participants that is used or held for use primarily in the Business, as tenant,
together with, to the extent leased by any of the TRW Participants, all
buildings and other structures, facilities or

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improvements currently located thereon, all fixtures thereto, and all easements,
licenses, rights and other appurtenances relating to the foregoing.

     “Licensed Intellectual Property” shall mean all Intellectual Property
(other than Transferred Intellectual Property) owned by or licensed to TRW and
the Asset Selling Subsidiaries that is used or held for use in the Business, as
currently conducted, as well as other businesses currently owned by TRW and to
which TRW will grant Buyer a license pursuant to Section 6.14(b), 6.14(c),
6.14(d) or 6.14(e) hereto. The Licensed Intellectual Property does not
constitute Transferred Intellectual Property.

     “Licensed Trademarks” shall mean the Trademarks set forth in Schedule
6.14(c) that will be licensed by TRW or an Asset Selling Subsidiary to Buyer.

     “Licensed-Back Intellectual Property” shall mean the Intellectual Property
included in the Transferred Intellectual Property and Equity Intellectual
Property that is used or held for use in the other businesses currently owned by
TRW, as currently conducted, and to which Buyer will grant TRW a license
pursuant to Section 6.14(a) hereto.

     “Lien” shall mean any mortgage, pledge, lien (statutory or otherwise and
including, without limitation, environmental and tax liens), security interest,
easement, right of way, limitation, encroachment, covenant, claim, restriction,
right, option, conditional sale or other title retention agreement, charge or
encumbrance of any kind or nature.

     “Local Standard Practice Instructions” shall mean the document included in
Section 4.7 of the TRW Disclosure Letter.

     “Material Adverse Effect” shall mean any circumstance of, change in, or
effect on, the Business that has a material adverse effect on (a) the business,
results of operations, condition (financial or otherwise), or assets of the
Business, or the condition of the Assets, taken as a whole or (b) the ability of
TRW to consummate the transactions contemplated herein; provided, however, that
“Material Adverse Effect” shall not include any adverse effect to the extent
resulting from (i) the Preliminary Transfers, (ii) announcement of the execution
of this Agreement and the transactions contemplated hereby, (iii) any action
taken by TRW or Buyer or any of their respective representatives or other action
required by the terms of this Agreement or necessary to consummate the
transactions contemplated by this Agreement or (iv) general economic conditions
or other conditions affecting the industry in which the Business generally
operates, except to the extent the Business is affected in a disproportionate
manner as compared to other companies in the same industry. For the avoidance of
doubt, neither TRW’s planned spin-off of its automotive operations nor a
business combination transaction involving all or substantially all of the
assets or capital stock of TRW alone will constitute a Material Adverse Effect
unless such spin-off or transaction results in a material adverse effect on the
business, results of operations, condition (financial or otherwise), or assets
of the Business, or the condition of the Assets, taken as a whole or the ability
of TRW to consummate the transactions contemplated herein.

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     “Net Asset Value” shall have the meaning and be calculated in the manner
set forth on the Reference Balance Sheet, including the notes thereto, attached
hereto as Schedule 1.1(c).

     “Off-Site Location” means any real property other than the Real Property.

     “Owned Real Property” means the real property (excluding the real property
listed on Schedule 2.3(b)(x)) owned by any of the TRW Participants that is used
or held for use primarily in the Business together with all buildings and other
structures, facilities or improvements currently or hereafter located thereon,
all fixtures thereto, and all easements, licenses, rights and other
appurtenances relating to the foregoing.

     “Patents” shall mean all United States, international and foreign patents
and applications therefor and all reexaminations, reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof.

     “Permits” shall mean permits, licenses, variances, exemptions, orders,
approvals, authorizations, certificates, filings, franchises, qualifications,
notices and rights.

     “Permitted Encumbrances” shall mean with respect to each parcel of Real
Property: (a) zoning, planning and building codes and other applicable laws
regulating the use, development and occupancy of the Real Property and permits,
consents and rules under such laws; (b) encumbrances, easements, rights-of-way,
covenants, conditions, restrictions and other matters affecting title to such
Real Property which do not materially detract from the value of such Real
Property or materially restrict the use of such Real Property; (c) other
encumbrances, easements, rights-of-way, covenants, conditions, restrictions and
other matters affecting title to such Real Property set forth in Section 4.17 of
the TRW Disclosure Letter; (d) leases and subleases of Real Property set forth
in Section 4.17 of the TRW Disclosure Letter; and (e) all easements,
encumbrances or other matters which are necessary for utilities and other
similar services on the Real Property.

     “Permitted Liens” shall mean: (i) Liens identified in the TRW Disclosure
Letter, or reflected or referred to in the Financial Statements (including the
notes thereto), (ii) Liens for Taxes and other governmental levies not yet due
and payable or, if due, (A) not delinquent or (B) being contested in good faith
by appropriate proceedings during which collection or enforcement against the
property is stayed and with respect to which adequate reserves have been
established and are being maintained to the extent required by GAAP, (iii)
mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other Liens,
including all statutory Liens, arising or incurred in the ordinary course of
business that do not materially interfere with or materially affect the value or
use of the respective underlying asset to which such Liens relate, (iv) original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business and (v) Liens that do
not materially interfere with or materially affect the value or use of the
respective underlying asset to which such Liens relate.

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     “Person” shall mean any individual, corporation, general partnership,
limited partnership, limited liability partnership, limited liability company,
joint stock company, unincorporated organization or association, trust, joint
venture or other organization or entity (including, without limitation, any
Governmental Entity) as well as any syndicate or group that would be deemed to
be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.

     “Post-Closing Tax Period” shall mean any Tax period that begins after the
Closing Date.

     “Pre-Closing Tax Period” shall mean any Tax period that ends on or before
the Closing Date.

     “Real Property” shall mean the Owned Real Property and the Leased Real
Property.

     “Receivables” means any and all accounts receivable, notes and other
amounts receivable in respect of the Business.

     “Reference Balance Sheet” shall mean the Balance Sheet of the Business as
of May 31, 2002, as adjusted pursuant to the Supplemental Accounting Principles
and as attached hereto as Schedule 1.1(c).

     “Release” shall mean any spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, release, presence
or migration of Hazardous Substances in or into the Environment above regulatory
standards or into or out of any property, including the movement of Hazardous
Substances through or in the Environment or property.

     “Remediation” means an action of any kind to address an Environmental
Condition, including the following activities: (a) monitoring, investigation,
assessment, treatment, cleanup, containment, encapsulation, removal, mitigation,
response or restoration work; (b) obtaining any permits, consents, approvals or
authorizations of any Governmental Entity necessary to conduct any such
activity; (c) preparing and implementing any plans or studies for any such
activity; (d) obtaining a written notice from a Governmental Entity with
jurisdiction over the Real Property or an Off-Site Location under Environmental
Laws that no material additional work is required by such Governmental Entity;
(e) the use, implementation, application, installation, operation or maintenance
of removal actions on the Real Property or an Off-Site Location, remedial
technologies applied to the surface or subsurface soils, excavation and
treatment or disposal of soils at an Off-Site Location, systems for long-term
treatment of surface water or groundwater, engineering controls or institutional
controls; and (f) any other activities reasonably determined to be necessary or
appropriate or required under Environmental Laws to address an Environmental
Condition.

     “Restructuring Taxes” shall mean any and all Taxes, including stamp duty
and stamp taxes with respect to any transaction entered into in connection with
the transfer, by or at the direction of TRW, of the Retained Assets or any other
assets that are

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not being sold to Buyer pursuant to this Agreement whether such transfer or
transaction occurs before or after the Closing.

     “Software” shall mean all computer software, including all source code,
object code, and firmware.

     “Spanish Affiliate” shall mean Compania Espanola de Sistemas Aeronauticos
SA.

     “Standard Practice Instructions” shall mean the TRW Standard Practice
Instructions, a copy of which has been provided to Buyer under separate cover,
which sets forth the written policies and requirements for financial reporting
of TRW’s operating units.

     “Subsidiary” shall mean, with respect to any Person, any corporation,
partnership, joint venture or other business entity in which such Person
directly or indirectly owns, in the aggregate, a majority of the equity
interest.

     “Supplemental Accounting Principles” shall mean those accounting principles
included as part of Section 4.7 of the TRW Disclosure Letter.

     “Tax” or “Taxes” shall mean all federal, state, local and foreign taxes of
any kind whatsoever, including income, gross receipts, license, premium,
windfall profits, environmental (including under Section 59A of the Code), fees,
levies, duties, tariffs, income, profits, transfer, gains, excise, inventory,
property (real, personal or intangible), custom, sales, use, license,
registration, withholding, payroll, employment, social security, workers’
compensation, alternative or add-on minimum, unemployment compensation, net
worth, capital stock, ad valorem, stamp, documentary, value added and franchise
taxes and similar charges whether computed on a unitary, combined or any other
basis, including any interest, penalty or addition thereto, whether disputed or
not, in each case, whether disputed or not, and including any tax liability that
results from Treasury Regulation Section 1.1502-6 or any similar provision of
state, local or foreign law, by contract or otherwise.

     “Tax Authority” shall mean any U.S., non-U.S., federal, national, state,
provincial, county or municipal or other local government, and any subdivision,
agency, commission or authority thereof, or any quasi-governmental body
exercising any taxing authority or any other authority exercising Tax regulatory
authority.

     “Tax Returns” shall mean any and all reports, returns, information returns,
statements, declaration, elections, claims for refund, estimates or other
documents (including any related or supporting documentation) filed or required
to be filed with any Tax Authority in connection with any determination,
assessment, payment or collection of any Tax.

     “Trade Secrets” shall mean all inventions (whether patentable or not),
invention disclosures, trade secrets, proprietary information, know how,
discoveries, improvements, Software, shop rights, developments, research data,
designs, technology,

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test procedures, processes, research data, computer data bases, product
development information, blueprints, drawings, sketches, proposal files,
designs, design libraries, design data, plans, specifications, procedures,
models and prototypes, samples, engineering and R&D notebooks, reports,
analyses, assembly instructions, quality control documentation, installation and
operation manuals, manufacturing techniques and processes, product literature,
business methods and processes, business data, customer lists and contacts,
business plans, confidential price lists, marketing plans, financial
information, cost and pricing data, documents, business reports, and all other
confidential or proprietary information that has commercial value.

     “Trademarks” shall mean all trade names, logos, common law trademarks and
service marks, trademark and service mark registrations and applications
therefor throughout the world.

     “Transferred Intellectual Property” shall mean all of TRW and the Asset
Selling Subsidiaries’ right, title and interest in the Intellectual Property
that is used primarily in the Business, including, without limitation, the
Intellectual Property listed as “Transferred Intellectual Property” in Section
4.14(a) of the TRW Disclosure Letter.

     “Treasury Regulations” shall mean the Income Tax Regulations promulgated
under the Code, as amended.

     “TRW Entities” shall mean, collectively, the TRW Participants and the TRW
Selling Shareholders.

     “TRW Participants” shall mean, collectively, TRW, the Asset Selling
Subsidiaries, the Aerospace Subsidiaries their Subsidiaries, the Aerospace
Affiliates controlled by TRW and their Subsidiaries and the UK Holdco described
in Section 2 of Schedule 2.1.

     “TRW Selling Shareholders” shall mean TRW and direct and indirect
Subsidiaries of TRW that hold equity interests in the Aerospace Subsidiaries and
Aerospace Affiliates, each of which is identified on Schedule 2.2 hereof.

     “UK Items” shall mean the following items set forth on Schedule 2.7: (i) UK
Holdco Class A and Class B — Shares, (ii) TRW Aeronautical Systems Ltd. -
Assets, (iii) Lucas Aerospace Ltd. — Assets and (iv) Lucas Industries Ltd. —
Assets.

     “Underground Storage Tank” shall have the meaning ascribed to such term in
Section 6901 et seq., as amended, of RCRA, or any applicable state or local
statute, law, ordinance, code, rule, regulation, order ruling, or decree
governing underground storage tanks.

     “WARN Act” shall mean the Worker Adjustment and Retraining Notification Act
or similar local, state or foreign law.

     (b)  Each of the following terms has the meaning set forth in the Section
set forth opposite each term:

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          Term   Section

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

2002 Financial Statements
    4.7 (a)
Accounting Arbitrator
    2.6 (c)
Actions
    4.10  
Acquired Assets
    2.3 (a)
Adjustment Amount
    2.6 (a)
Actuarial Review Principles
    6.8 (u)
Actuary’s Letter
    6.8 (u)
Aerospace Employees
    6.8 (a)
Affected Employees
    6.8 (a)
Agreement
    Preamble
Ancillary Agreements
    6.11  
Assumed Contracts
    2.3 (a)(viii)
Assumed Liabilities
    2.4 (a)
Assumed Plan
    4.13 (a)
Australian Transferred Employees
    6.8 (o)
Business
    Recitals
Business Plan
    4.13 (a)
Buyer
    Preamble
Buyer PBO
    6.8 (u)
Buyer’s Allocation
    2.7 (a)
Buyer’s Appraisal
    2.7 (a)
Buyer’s Appraiser
    2.7 (a)
Buyer’s Canadian Pension Plan
    6.8 (f)
Buyer’s Canadian Salaried Pension Plan
    6.8 (f)
Buyer U.S. Pension Plan
    6.8 (d)
Canadian Hourly Fund
    6.8 (f)
Canadian Hourly Pension Plan
    6.8 (f)(iii)
Canadian Retiree Medical Plan
    6.8 (f)
Canadian Salaried Affected Employee Liabilities
    6.8 (f)
Canadian Transferred Employees
    6.8 (f)
Cap
    9.4 (a)
Closing
    3.1  
Closing Balance Sheet
    2.6 (a)
Closing Date
    3.1  
Closing Price
    2.7 (a)
Commitment Letter
    5.7  
Consenting Members
    6.8 (u)
Currency Averaged Pension Deficit
    6.8 (u)
Damages
    9.2 (a)
Dispute
    10.7  
EA Affected Employees
    6.8 (p)
Employment Act
    6.8 (p)
Equity Interests
    2.2  
ERISA
    4.13 (a)

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ERISA Affiliate
    4.13 (a)
Estimated Full Funding Amount
    6.8 (u)
EU Merger Regulation
    4.6 (b)
Excluded Liabilities
    2.4 (b)
Excluded Taxes
    6.10 (b)(i)
FAS
    4.13 (f)
FAS 87
    4.13 (m)(i)
Final Allocation
    2.7 (a)
Financing
    5.7  
Final Transfer Amount
    6.8 (f)
French Pension Plan
    6.8 (r)
French Transferred Employees
    6.8 (r)
Full Funding Amount
    6.8 (u)
Funds
    6.8 (o)
German Pension Plan
    6.8 (b)
German Transferred Employees
    6.8 (q)
Governmental Antitrust Consents
    7.1 (c)
Governmental Antitrust Entity
    6.4 (a)
Historical Financial Statements
    4.7 (c)
Hourly Defined Benefit Plans
    6.8 (d)(iii)
Hourly Retiree Medical Plans
    6.8 (d)
Indemnified Party
    9.2 (c)
Indemnifying Party
    9.3  
Initial Allocation
    2.7 (a)
IRS
    4.13 (c)
Lay-off Payments
    6.8 (g)
Local Transfer Agreements
    6.11 (b)
Losses
    6.10 (b)
Majority Voting Power
    6.18 (a)
Master Trust
    6.8 (d)(iii)(B)
Material Contracts
    4.18 (a)
Measurement Date
    6.8 (s)
Medical Plans
    6.8 (d)(ii)(C)
Members
    6.8 (u)
Minimum Claim Amount
    9.4 (a)
Multiemployer Plan
    4.13 (i)
Multiple Employer Plan
    4.13 (i)
Net UK Appraiser Adjustment
    2.7 (a)
Non-Represented Employees
    6.8 (d)(ii)
Non-U.S. Benefit Plan
    4.13 (m)
Offer Employee
    6.8 (b)
PBO
    4.13 (f)
Pension Deficit
    6.8 (u)
Pension Plan
    4.13 (c)
Pension Surplus
    6.8 (u)
Plans
    4.13 (a)

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PLU Gmb
    6.8 (q)
Pre-Closing Customer Contract Claims
    2.4 (a)(iv)
Pre-Closing Campaign Claims
    2.4 (a)(iii)
Preliminary Transfers
    2.1 (a)
Product Liability Claims
    2.4 (a)(viii)
Purchase Price
    2.5 (a)
RCRA
    1.1  
Regulations
    6.8 (a)(ii)
Regulatory Amount
    6.8 (f)
Represented Employees
    6.8 (d)(iii)
Residual Purchase Price
    2.7 (a)
Retained Assets
    2.3 (b)
Retiree Plan
    4.13  
Revised Allocation
    2.7 (a)
Shared Campaign Claims
    2.4 (a)(iii)
Singapore Transferred Employees
    6.8 (p)
SGA
    6.8 (o)
Stock Savings Plan
    6.8 (d)(ii)(B)
Superannuation
    6.8 (o)
Superannuation Commitment
    6.8 (o)
Tax Act
    6.8 (o)
Threshold
    9.4 (a)
Towers Report
    6.8 (u)
Transfer Amount
    6.8 (u)
Transfer Consents
    6.8 (u)
Transfer Consent Period
    6.8 (u)
TRW
    Preamble
TRW Canadian Salaried Pension Plan
    6.8 (f)
TRW Disclosure Letter
    Article IV
TRW PBO
    6.8 (u)
TRW U.S. Salaried Pension Plan
    6.8 (d)
TRW’s Allocation
    2.7 (a)
TRW’s Appraisal
    2.7 (a)
TRW’s Appraiser
    2.7 (a)
Transfer Amount
    6.8 (f)
Transfer Date
    6.8 (f)
Transfer Taxes
    6.6 (a)(i)
Transferred Employee
    6.8 (b)
Transition Agreement
    6.11 (a)
UK Affected Employees
    6.8 (a)
UK Transferred Employees
    6.8 (e)
unadjusted Transfer Amount
    6.8 (u)
URL
    1.1  
US Transferred Employees
    6.8 (d)
Union 401(k) Plan
    6.8 (d)(iii)
Welfare Benefits
    6.8 (c)

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ARTICLE II

PRELIMINARY TRANSFERS; SALE AND PURCHASE OF ASSETS

     Section 2.1 Preliminary Transactions.

     (a)  Prior to the transfers and conveyance of Assets pursuant to the terms
of this Article II, TRW shall complete the internal restructuring transactions
and transfers set forth on Schedule 2.1 after receiving all necessary clearances
from the UK Inland Revenue (collectively, the “Preliminary Transfers”).

     (b)  In completing the Preliminary Transfers, TRW will not be permitted to
modify or deviate from the Preliminary Transfers without the prior written
consent of Buyer, which consent shall not be unreasonably withheld or delayed;
provided, however, that TRW shall furnish to Buyer all information reasonably
necessary to assess the effect on Buyer of any such modification or deviation.
Buyer shall promptly provide TRW with the basis for any withholding of a consent
pursuant to the preceding sentence.

     (c)  Without limiting the foregoing subsections of this Section 2.1, and
notwithstanding anything to the contrary in Section 6.1 hereof, TRW may, in its
sole discretion, cause any Aerospace Subsidiary or Aerospace Affiliate to make a
distribution of any Retained Assets prior to the Closing. Buyer shall cause any
such assets that are not distributed prior to the Closing to be transferred by
such Aerospace Subsidiary or Aerospace Affiliate to TRW at or, to the extent not
included in the Net Asset Value on the Closing Balance Sheet, after the Closing.

     (d)  Without limiting the foregoing subsections of this Section 2.1, and
notwithstanding anything to the contrary in Section 6.1 hereof, TRW may, in its
sole discretion, cause any Aerospace Subsidiary or Aerospace Affiliate to make a
distribution of cash, cash equivalents and notes prior to the Closing. Buyer
shall cause any such assets that are not distributed prior to Closing to be
transferred by such Aerospace Subsidiary or Aerospace Affiliate to TRW at or, to
the extent not included in the Net Asset Value on the Closing Balance Sheet,
after the Closing.

     Section 2.2 Sale of Equity Interests. Subject to the terms and conditions
of this Agreement, at the Closing, TRW shall, and shall cause the other TRW
Selling Shareholders to, sell, transfer, convey, assign and deliver to Buyer and
Buyer shall purchase, acquire and accept from TRW or the applicable TRW Selling
Shareholder all of the equity interests of the Aerospace Subsidiaries and
Aerospace Affiliates as set forth on Schedule 2.2 hereof held by such TRW
Selling Shareholder (the “Equity Interests”). At the Closing, Buyer shall assume
all liabilities and obligations arising out of or resulting from the ownership
of the equity interests of the Aerospace Affiliates on and after the Closing
Date, except for those liabilities that relate to TRW or its

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Subsidiaries breaching or failing to perform an obligation on or before the
Closing Date, pursuant to the agreements relating to such equity ownership.

     Section 2.3 Transfer of Assets; Retained Assets.

     (a)  Subject to the terms and conditions of this Agreement and the
Ancillary Agreements, at the Closing, TRW shall, and shall cause the Asset
Selling Subsidiaries identified on Schedule 2.3(a) to, sell, convey, assign,
transfer and deliver to Buyer and Buyer shall purchase, acquire and accept (x)
from TRW, all of TRW’s right, title and interest in and to the rights,
properties and assets, other than the Retained Assets and the Equity Interests,
which are used or held for use primarily in the Business, tangible and
intangible, wherever located and (y) from the Asset Selling Subsidiaries, all of
the Asset Selling Subsidiaries’ right, title and interest in and to the rights,
assets and properties, other than the Retained Assets and the Equity Interests,
which are used or held for use primarily in the Business, tangible and
intangible, wherever located (each and all such items being herein referred to
as the “Acquired Assets”), including all of such right, title and interest to
the following:

       (i) all books of account, general, financial, tax and personnel records
for the Affected Employees which become employees of Buyer or its Subsidiaries,
invoices, shipping records, supplier lists, correspondence and other documents,
records and files and any rights thereto owned by TRW or the Asset Selling
Subsidiaries (including those stored in electronic format), and used or held for
use primarily in the Business, other than organizational documents, minute and
stock record books and the corporate seals of TRW and the Asset Selling
Subsidiaries and other than as provided in Section 2.3(b)(iv);

       (ii) all sales and promotional literature, customer lists and other
sales-related materials used or held for use primarily in the Business;

       (iii) all Receivables other than those referred to in Section 2.3(b)(ii)
which primarily relate to the Business;

       (iv) prepaid expenses, deferred charges, advance payments, and similar
items of the type reflected on the Reference Balance Sheet which primarily
relate to the Business;

       (v) all Inventories used or held for use primarily in the Business by TRW
or an Asset Selling Subsidiary;

       (vi) all Owned Real Property used or held for use primarily in the
Business by TRW or an Asset Selling Subsidiary and all Leased Real Property used
or held for use primarily in the Business by TRW or an Asset Selling Subsidiary;

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       (vii) all Equipment used or held for use primarily in the Business by TRW
or an Asset Selling Subsidiary;

       (viii) subject to Section 6.5 hereof, Contracts primarily related to the
Business or to which the Acquired Assets are subject, including (A) all orders,
contracts, and commitments for the purchase or use of goods and services
primarily for the benefit of the Business; (B) all rights under all bids and
offers that primarily relate to the Business; (C) all awards, orders, contracts,
commitments, and proposals for the design, development, manufacture or sale of
Inventories that primarily relate to the Business; (D) all distributorship
agreements, sales agency agreements, teaming, and similar business alliance
agreements relating to the design, manufacture, sale and distribution of
Inventories for use primarily in the Business; and (E) all other assignable
contracts, licenses, sublicenses, agreements, leases and commitments used or
held for use primarily in the Business, including all agreements with individual
Affected Employees assumed by Buyer pursuant to Section 6.8(i) (collectively,
the “Assumed Contracts”);

       (ix) all existing claims and other rights arising from the performance or
breach by third parties of their obligations under the Assumed Contracts;

       (x) all Transferred Intellectual Property, subject to the terms of
Section 6.14 herein;

       (xi) to the extent transferable, all Permits issued by any Governmental
Entity used or held for use primarily in the Business by TRW or any of the Asset
Selling Subsidiaries and all applications therefor;

       (xii) all existing causes of action, judgments, claims, reimbursements
and demands, of whatever nature (including rights under and pursuant to all
warranties, representations and guarantees made by suppliers of products,
materials or Equipment, or components thereof) and rights to insurance proceeds
(to the extent such rights to insurance proceeds are allocated to Buyer in the
Insurance Agreement) in favor of TRW or the Asset Selling Subsidiaries other
than those specified in Section 2.3(b)(vi);

       (xiii) all Plan assets transferred to Buyer pursuant to Section 6.8, or
held in connection with any Assumed Plan; and

       (xiv) all hedging Contracts that primarily relate to the Business, as set
forth on Schedule 2.3(a)(xiv); provided that TRW shall be solely responsible for
any fees, penalties or other consideration in connection with obtaining any
novations (or replacements of such contracts on the same economic terms and
conditions) of such contracts.

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     (b)  Notwithstanding Section 2.3(a), the term “Acquired Assets” shall not
include the following (each and all such items other than Equity Interests being
herein referred to as “Retained Assets”), but only to the extent not included in
the Net Asset Value for purposes of the Closing Balance Sheet:

       (i) all cash and cash equivalent items, including but not limited to such
items held by or for the account of TRW and the Asset Selling Subsidiaries,
whether or not arising from the conduct of the Business, including, without
limitation, demand accounts, certificates of deposit, time deposits, marketable
securities, negotiable instruments and the proceeds of accounts receivable paid
on or prior to the Closing Date;

       (ii) all intercompany accounts receivable and notes for those accounts
receivable and notes where the obligor is TRW or any Affiliate of TRW which will
remain an Affiliate of TRW after the consummation of the transactions
contemplated by this Agreement;

       (iii) the Licensed Trademarks and Licensed Intellectual Property and all
other Excluded Intellectual Property;

       (iv) any records which TRW or any Asset Selling Subsidiary is required by
law to retain in its possession or any records for which it is the business
custom to retain; provided in each case that a copy of any such record shall be
furnished to Buyer;

       (v) all causes of action, judgments, claims, reimbursements and demands,
of whatever nature (including rights under and pursuant to all warranties,
representations and guarantees made by suppliers of products, materials or
Equipment, or components thereof), in favor of TRW or any Asset Selling
Subsidiary to the extent related to the Retained Assets and the Excluded
Liabilities;

       (vi) any claims under insurance policies maintained by TRW or the Asset
Selling Subsidiaries to the extent related to Retained Assets or Excluded
Liabilities or to the extent allocated to TRW or the Asset Selling Subsidiaries
pursuant to the Insurance Agreement;

       (vii) all other rights, property interests (whether real or personal) and
assets (whether tangible or intangible) of TRW and its Affiliates that are not
primarily used or held for use in the Business;

       (viii) such other rights, properties and assets set forth on
Schedule 2.3(b) hereto;

       (ix) except as may be provided in Section 6.8 hereof and except for
assets held in connection with any Assumed Plan, any agreement with any
individual Affected Employee or any claim to any surplus assets in any
retirement plan or trust for same; and

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       (x) the Real Property set forth on Schedule 2.3(b)(x).

     Section 2.4 Assumption of Liabilities; Excluded Liabilities.

     (a)  Subject only to the provisions of this Agreement, at the Closing,
Buyer shall assume and agree to pay, perform and discharge when due, only the
following liabilities and obligations of TRW or the Asset Selling Subsidiaries
(the “Assumed Liabilities”):

       (i) all accrued liabilities and obligations in categories that are
reflected on both the Reference Balance Sheet and the Closing Balance Sheet, but
only to the extent such accrued liabilities and obligations are set forth on the
Closing Balance Sheet;

       (ii) all liabilities and obligations under the Assumed Contracts to the
extent relating to performance after the Closing;

       (iii) solely to the extent provided in this Section 2.4(a)(iii),
liabilities and obligations arising out of, resulting from, or relating to
customer claims which have not been resolved or settled prior to the Closing
Date, including but not limited to those claims seeking return, replacement,
modification and/or repair of products sold by the Business either pursuant to
express product warranties extended by a TRW Participant prior to the Closing
Date or product warranties or obligations implied or provided by law or pursuant
to contractual claims of design or manufacturing defects including, without
limitation, contractual claims arising from an event or events arising out of a
recall or “rollover” of a product designed, manufactured or sold by TRW or the
Asset Selling Subsidiaries prior to the Closing Date (such claims collectively,
“Pre-Closing Campaign Claims”); provided that with respect to all liabilities
and obligations arising out of, resulting from, or relating to Pre-Closing
Campaign Claims that are asserted within five years following the Closing Date,
that are required to be paid and that relate solely to products shipped by a TRW
Participant prior to the Closing Date (“Shared Campaign Claims”), to the extent
that liabilities for such Shared Campaign Claims payable to third parties for
repair or replacement of products (at standard manufacturing cost), in the
aggregate, exceed $6,082,000, TRW and Buyer shall share equally the next
$2,000,000 of such Shared Campaign Claims in excess of $6,082,000 (but only to
the extent of such excess); provided, further, that to the extent such Shared
Campaign Claims exceed $8,082,000, TRW shall be solely liable for such excess;
and provided, further, that Buyer shall manage such Shared Campaign Claims in
accordance with the procedures set forth in Section 6.22 hereof;

       (iv) solely to the extent provided in this Section 2.4(a)(iv),
liabilities and obligations arising out of, resulting from, or

18

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  relating to customer claims which have not been resolved or settled prior to
the Closing Date relating to breach of contract, including but not limited to
claims relating to late delivery or late performance of contract milestones, in
each case with respect to products designed, manufactured or sold for the
Business by a TRW Participant prior to the Closing Date (such claims
collectively, “Pre-Closing Customer Contract Claims”); provided that Buyer and
TRW shall share equally any liabilities and obligations to third parties that
are asserted within five years following the Closing Date which arise out of,
result from, or relate to those Pre-Closing Customer Contract Claims set forth
on Schedule 2.4(a)(iv) only to the extent that such liabilities and obligations
to third parties, in the aggregate, exceed $6,013,000 but are less than
$8,013,000 (but only to the extent of the amount in excess of $6,013,000);
provided, further, that to the extent that such liabilities and obligations
exceed $8,013,000, TRW shall be solely liable for all such excess (but only to
the extent of such excess); provided, further, that Buyer shall have no
liability or obligation with respect to any Pre-Closing Customer Contract Claim
not set forth on Schedule 2.4(a)(iv); and provided, further, that Buyer shall
manage such Pre-Closing Customer Contract Claims in accordance with the
procedures set forth in Section 6.22 hereof;

       (v) the first $3,913,000 of Environmental Liabilities, and to the extent
that Environmental Liabilities, in the aggregate, exceed $3,913,000 but are less
than $8,913,000, one-half of all such Environmental Liabilities in excess of
$3,913,000 (and only to the extent of such excess); provided that to the extent
Environmental Liabilities, in the aggregate, exceed $8,913,000, Buyer shall
assume no liability for the excess of such Environmental Liabilities above such
amount. Buyer shall be entitled to manage any proceedings relating to any
Environmental Claim and any Remediation arising therefrom; provided that at any
time after Buyer ceases to have any further liability with respect to
Environmental Liabilities pursuant to this Section 2.4(a)(v), TRW may elect,
upon written notice to Buyer, to manage any further Environmental Claim and any
further Remediation and shall be entitled to control and appoint lead counsel or
consultants for any defense, investigation or remedial action relating to such
Environmental Claim or Remediation; provided, further, that in managing any
Environmental Claim or Remediation, TRW shall obey all applicable laws, rules,
regulations or orders of any Governmental Entity relating thereto and shall not
unreasonably interfere, to the extent practicable, with the operations of the
Business (and if TRW fails to meet the conditions set forth in this proviso,
Buyer shall be entitled to resume the management of Environmental Claims and
Remediation). A party’s management of Environmental Claims and Remediation shall
be governed by the provisions set forth in Section 6.19(b) hereof. For the
avoidance of doubt, this Section 2.4(a)(v) shall not apply to, and Buyer shall
have no liability under this Section for,

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      any asbestos-related claim or liability, which shall be governed
exclusively by Section 2.4(b)(v);

       (vi) all liabilities and obligations expressly assumed by Buyer pursuant
to this Agreement and the Ancillary Agreements, including without limitation
obligations assumed pursuant to Sections 6.6 and 6.10(b) hereof;

       (vii) all liabilities and obligations under any guarantees issued,
granted or provided in connection with the Business as set forth on
Schedule 2.4(a)(vii);

       (viii) all liabilities and obligations arising out of, resulting from, or
relating to claims, whether founded upon negligence, strict liability in tort,
and/or other similar legal theory, seeking compensation or recovery for or
relating to injury to person or damage to property from (x) an event or events
occurring after the Closing Date, but arising out of a defect or alleged defect
(other than recall or “rollover”) of a product designed, but not manufactured or
sold, for the Business by TRW, an Aerospace Subsidiary, an Aerospace Affiliate
or an Asset Selling Subsidiary prior to the Closing Date or (y) an event or
events occurring on or after May 1, 2004, but arising out of a defect or alleged
defect (other than a recall or “rollover”) of a product manufactured or sold for
the Business by TRW, an Aerospace Subsidiary, an Aerospace Affiliate or an Asset
Selling Subsidiary prior to the Closing Date (such events described in
subclauses (x) and (y) are collectively referred to as “Product Liability
Claims”), provided, however, that TRW shall purchase the insurance coverage
described in Section 6.20(b) hereof;

       (ix) solely to the extent specifically provided in Section 6.8 hereof,
obligations of TRW or its Affiliates with respect to Affected Employees; and

       (x) any liabilities arising out of any continuation of conduct, by Buyer,
its subsidiaries, that took place as of the Closing Date which had infringed
upon or otherwise misappropriated the Intellectual Property rights of another
person as of the Closing Date, if such conduct continues following notice to
Buyer or its Subsidiaries that such conduct constitutes infringement or
misappropriation of the Intellectual Property rights of another Person
(provided, however, that nothing in this Section 2.4(a)(x) shall affect Buyer’s
ability to seek any remedy for a breach of the representations and warranties
contained in Section 4.14 hereof).

     (b)  Notwithstanding anything in this Agreement to the contrary, Buyer
shall not assume or be deemed to have assumed, and TRW or the Asset Selling
Subsidiaries, as the case may be, shall be solely and exclusively liable with
respect to, all liabilities and obligations, whether known or unknown, and,
except as specifically noted

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  below, whether arising before or after the Closing, of TRW or the Asset
Selling Subsidiaries resulting from or related to the Business other than the
Assumed Liabilities (collectively, the “Excluded Liabilities”) including the
following:

       (i) all intercompany accounts payable and notes existing as of the
Closing Date, other than the Ancillary Agreements, where the obligee is TRW or
any Affiliate of TRW which will remain an Affiliate of TRW after the
consummation of the transactions contemplated by this Agreement;

       (ii) except as specifically provided in Section 6.8, all obligations and
liabilities of TRW or its Affiliates with respect to their respective employees
(including the Affected Employees) and former employees including, but not
limited to, those arising from or relating to their employment with TRW or its
Affiliates, or the termination thereof including medical, other health benefits,
life insurance plans, pension plans, retiree benefits, workers compensation
claims and obligations and liabilities with respect to any Plan that is not an
Assumed Plan;

       (iii) all liabilities (including Taxes and Restructuring Taxes) to the
extent relating to or arising out of the Retained Assets;

       (iv) any indebtedness for borrowed money of TRW or the Asset Selling
Subsidiaries (other than borrowed money of the Aerospace Affiliates in an amount
not to exceed $4.4 million) and any guarantees in respect thereof, except as set
forth on Schedule 2.4(a)(vii);

       (v) any and all liabilities to employees, former employees, third
parties, Governmental Entities, customers or any other Persons relating to the
exposure to, use of, manufacture of, transport of or any action taken by TRW or
its Subsidiaries prior to the Closing Date with respect to asbestos, including
but not limited to the incorporation of asbestos into products of the Business
or the use of asbestos or products containing asbestos in the operation of the
Business, or the presence of asbestos in any facility or location used in the
conduct of the Business prior to the Closing, but excluding all liabilities and
obligations relating to removal of asbestos from any Owned Real Property or
Leased Real Property following the Closing Date, provided that the presence of
asbestos in its then-current condition at any Owned Real Property or Leased Real
Property is lawful as of the Closing Date. The defense of all legal claims of
any nature, under any legal or equitable theory of recovery whatsoever,
concerning asbestos-containing products used or actions taken prior to the
Closing Date shall be strictly governed by the procedures set forth in
Schedule 2.4(b)(v) to this Agreement;

       (vi) all liabilities and obligations with respect to claims of
infringement or other misappropriation of the Intellectual Property

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      rights of other persons by the Business that either arose on or before the
Closing Date or that related to continuation of conduct that took place as of
the Closing Date which had infringed or otherwise misappropriated the
Intellectual Property rights of another Person as of the Closing Date (except
for any continuation of conduct that takes place following notice to Buyer or
its subsidiaries that such conduct constitutes infringement or misappropriation
of Intellectual Property rights of another person; provided, however that
nothing in this exception shall affect Buyer’s ability to seek any remedy for a
breach of the representations and warranties contained in Section 4.14 hereof);

       (vii) all liabilities related to any site that was previously owned or
operated by the TRW Participants and which is not, as of the Closing Date, being
operated in connection with the Business;

       (viii) all liabilities and obligations resulting from or relating to
litigation, proceedings, actions, claims, or investigations at law or in equity
pending against TRW or the Asset Selling Subsidiary to the extent relating to
matters occurring on or prior to the Closing Date, other than described in
clauses (ix), (x), (xi) and (xii) of this Section 2.4(b);

       (ix) to the extent Environmental Liabilities, in the aggregate, exceed
$3,913,000 but are less than $8,913,000, one-half of such Environmental
Liabilities in excess of $3,913,00 (but only to the extent of such excess); and
to the extent Environmental Liabilities exceed $8,913,000, 100% of the excess of
such Environmental Liabilities above $8,913,000 (and only to the extent of such
excess);

       (x) to the extent that Shared Campaign Claims exceed $6,082,000 but are
less than $8,082,000, one-half of the excess over $6,082,000 (and only to the
extent of such excess), and to the extent that Shared Campaign Claims exceed
$8,082,000, 100% of the amount in excess of $8,082,000 (and only to the extent
of such excess);

       (xi) to the extent that Pre-Closing Customer Contract Claims exceed
$6,013,000 but are less than $8,013,000, one-half of the excess over $6,013,000
(and only to the extent of such excess), and to the extent that the Pre-Closing
Customer Contract Claims exceed $8,013,000, 100% of the amount in excess of
$8,013,000 (and only to the extent of such excess);

       (xii) all liabilities and obligations arising out of, resulting from, or
relating to claims, whether founded upon negligence, strict liability in tort,
and/or other similar legal theory, seeking compensation or recovery for or
relating to injury to person or damage to property from (x) an event or events
occurring before the Closing Date, and arising out of a defect or alleged defect
(other than a recall or “rollover”) of a product

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      designed, manufactured or sold for the Business by TRW, an Aerospace
Subsidiary, an Aerospace Affiliate or an Asset Selling Subsidiary prior to the
Closing Date and (y) an event or events occurring after the Closing Date but
prior to May 1, 2004, and arising out of a defect or alleged defect (other than
recall or “rollover”) of a product manufactured or sold for the Business by TRW,
an Aerospace Subsidiary, an Aerospace Affiliate or an Asset Selling Subsidiary
prior to the Closing Date;

       (xiii) fines or penalties associated with noncompliance with
import/export laws on or prior to the Closing Date;

       (xiv) those liabilities and obligations listed on Schedule 2.4(b)(xiv);
and

       (xv) all Excluded Taxes.

     (c)  Except for the Assumed Liabilities and except as expressly provided
otherwise in this Agreement, neither Buyer nor any of its Affiliates is
assuming, and shall not be deemed to have assumed, any debts, liabilities,
commitments or obligations (including Taxes), whether fixed, contingent or
absolute, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whether or not required by GAAP to be reflected in
financial statements or disclosed in the notes thereto, of any Aerospace
Subsidiary, Aerospace Affiliate or their respective Subsidiaries, and TRW or the
Asset Selling Subsidiaries shall remain solely and exclusively liable with
regard thereto.

     (d)  Nothing in this Agreement shall be construed to impose on TRW any
liability or obligation that does not arise out of, relate to, or concern
actions taken by TRW, its Subsidiaries, or Affiliates on or before the Closing
Date.

     Section 2.5 The Purchase Price.

     (a)  In consideration of the aforesaid sale, conveyance, assignment,
transfer and delivery to Buyer of the Assets and the agreement of TRW to enter
into this Agreement, and subject to the adjustments set forth in Section 2.6,
Buyer shall assume the Assumed Liabilities and pay or cause to be paid in full
to TRW (or its designated Affiliates) for the benefit of TRW and the Asset
Selling Subsidiaries (and TRW shall apportion the Purchase Price among the
selling parties) an aggregate purchase price of $1,500,000,000 (one billion,
five hundred million dollars) in cash (the “Purchase Price”). The Purchase Price
will be payable at the Closing by wire transfer of same day funds to an account
or accounts and in such amounts as designated by TRW. TRW shall designate such
account or accounts and amounts in writing at least two Business Days prior to
Closing.

     Section 2.6 Purchase Price Adjustment.

     (a)  Within 90 days after the Closing Date, Buyer shall cause Ernst & Young
LLP to prepare and deliver to TRW a balance sheet dated as of the Closing Date

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  prepared in accordance with GAAP, consistently applied, as interpreted by the
Supplemental Accounting Principles and in a manner consistent with the
preparation of the Reference Balance Sheet (the “Closing Balance Sheet”). TRW
shall cause its and its Affiliates’ respective officers and employees to fully
cooperate and assist Buyer and its representatives in connection with the
preparation of the Closing Balance Sheet. The “Adjustment Amount” (which may be
a negative value) shall be an amount equal to the difference between the Net
Asset Value set forth on the Closing Balance Sheet and the Net Asset Value set
forth on the Reference Balance Sheet.

     (b)  If TRW disagrees with the determination of the Adjustment Amount, TRW
shall notify Buyer in writing of such disagreement within the 30-day period
immediately following the delivery of the Closing Balance Sheet, which notice
shall describe the specific nature of any such disagreement and provide
reasonable supporting documentation for such disagreement; provided, however,
TRW shall not disagree with any valuation made by Buyer which has been made in
accordance with GAAP, as interpreted by the Supplemental Accounting Principles.
During the 30-day period of its review, TRW shall have reasonable access to any
documents, schedules or work papers used in the preparation of the Closing
Balance Sheet. TRW agrees that any failure by it to notify Buyer of any such
disagreement prior to end of the 30-day period immediately following the
delivery of the Closing Balance Sheet shall be deemed to be an acceptance by TRW
of the Closing Balance Sheet and shall constitute a complete waiver of any right
of TRW to dispute such Closing Balance Sheet and Adjustment Amount for purposes
of this Agreement.

     (c)  Buyer and TRW agree to negotiate in good faith to resolve any such
disagreement regarding the determination of the Adjustment Amount, and any
resolution of such disagreement agreed to in writing by Buyer and TRW shall be
final and binding upon the parties and their successors and assigns. If Buyer
and TRW are unable to resolve such disagreement identified by TRW pursuant to
Section 2.6(b) within 30 days after delivery to Buyer of written notice of such
disagreement by TRW, then the disputed matters shall be referred for final
determination to PriceWaterhouseCoopers. If PriceWaterhouseCoopers is unable or
unwilling to serve, Buyer and TRW shall jointly select an arbitrator from an
internationally recognized accounting firm that is not the independent auditor
for either Buyer or TRW; provided, however, that if Buyer and TRW are unable to
select such an accounting firm within 45 days after delivery of written notice
of a disagreement, the Center for Public Resources shall make such selection.
(PriceWaterhouseCoopers or the internationally recognized accounting firm so
selected shall be referred to herein as the “Accounting Arbitrator”). The
Accounting Arbitrator shall only consider those items and amounts as to which
Buyer and TRW have disagreed within the time periods and on the terms specified
above and shall resolve the matter in accordance with the terms and provisions
of this Agreement and the Ancillary Agreements. The Accounting Arbitrator is
expressly limited to the selection of either TRW’s or Buyer’s position on a
disputed item (or a position in between the positions of TRW or Buyer) and it
shall thus select as a resolution for each disputed matter the position of
either Buyer or TRW (or a position in between the positions of TRW or Buyer)
(based solely on presentations and supporting material provided by the parties
and not pursuant to any independent review) and the Accounting Arbitrator may
not impose

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an alternative resolution outside those bounds. The Accounting Arbitrator shall
deliver to Buyer and TRW, as promptly as practicable and in any event within
45 days after its appointment, a written report setting forth the resolution of
each disputed matter and its determination of the Adjustment Amount determined
in accordance with the terms of this Agreement. Such report shall be final,
non-appealable and binding upon the parties to the fullest extent permitted by
applicable law and may be enforced in any court having competent jurisdiction.
The 45-day period for delivering the written report may be extended for up to
30 days for good cause by the mutual written consent of the parties or by the
Accounting Arbitrator at its sole discretion. The fees, expenses and costs of
the Accounting Arbitrator shall be borne one-half by Buyer and one-half by TRW.

     (d)  If and to the extent the Adjustment Amount is not zero, as finally
determined after the procedures set forth in this Section 2.6, the Purchase
Price shall be increased on a dollar for dollar basis by the amount of the
Adjustment Amount if a positive number, or decreased on a dollar for dollar
basis by the Adjustment Amount if a negative number, as the case may be. If the
Purchase Price is decreased as a result of the purchase price adjustment
mechanism set forth in this Section 2.6, TRW shall pay to Buyer the amount of
such decrease along with interest accrued thereon, and if the Purchase Price is
increased as a result of the purchase price adjustment mechanism set forth in
this Section 2.6, Buyer shall pay to TRW the amount of such increase along with
interest accrued thereon, in either case, by delivery within two (2) Business
Days of such determination. Interest on the amount of such increase or decrease
shall accrue at a rate equal to daily average one month LIBOR plus one percent
(1%) commencing on the Closing Date. All payments pursuant to this
Section 2.6(d) shall be made by wire transfer of same day funds to an account
designated by TRW or Buyer, as the case may be, within two (2) Business Days of
such determination.

     Section 2.7 Allocation of Consideration.

     (a)  TRW and Buyer agree to allocate the Purchase Price and the Assumed
Liabilities (the sum of the Purchase Price and the Assumed Liabilities shall be
referred to herein as the “Closing Price”) as set forth in Schedule 2.7 hereto
(the amount set forth on Schedule 2.7 with respect to each item, an “Initial
Allocation”); provided that no later than fourteen (14) days after the date
hereof, Buyer shall either retain Corporate Value Consulting (Standard & Poor’s)
or select and retain such other third-party accounting firm or appraisal firm as
is reasonably acceptable to TRW (“Buyer’s Appraiser”) to determine the
reasonableness of the allocation of the Closing Price.

       (i) Buyer’s Appraiser shall provide Buyer and TRW with an appraisal of
each UK Item (“Buyer’s Appraisal”). If the aggregate of the Buyer’s Appraisals
with respect to the UK Items is within 10% of the aggregate Initial Allocations
with respect to the UK Items, then the Buyer’s Appraisal shall be accepted by
Buyer and TRW, and the Closing Price allocated to each UK Item shall equal the
amount of Buyer’s Appraisal and that amount shall be the final allocation with
respect to each such item (the “Final Allocation”); provided, however, that in
the event that the aggregate Buyer’s Appraisals with respect to the UK Items
varies

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      by more than 10% in either direction from the aggregate Initial
Allocations with respect to the UK Items, TRW may retain American Appraisal or
select and retain such other third-party accounting firm or appraisal firm as is
reasonably acceptable to Buyer (“TRW’s Appraiser”) to determine the
reasonableness of Buyer’s Appraisal and to provide Buyer and TRW with an
appraisal of such items (the “TRW’s Appraisal”), in which case the Final
Allocation will be the average of the Buyer’s Appraisal and TRW’s Appraisal and
the Final Allocation so determined shall be accepted by Buyer and TRW.

       (ii) After the Final Allocation has been determined with respect to each
UK Item, the Net UK Appraisal Adjustment (as defined in the following sentence)
shall be computed. The “Net UK Appraisal Adjustment” shall equal (i) the
aggregate Final Allocations with respect to the UK Items minus (ii) the
aggregate Initial Allocation with respect to the UK Items. If the Net UK
Appraisal Adjustment is less than zero (i.e., a negative number), then the
Initial Allocation with respect to each non-UK Item will be adjusted and
increased by a pro rata amount (based on Initial Allocations) of the absolute
value of the Net UK Appraisal Adjustment (each such adjusted Initial Allocation,
a “Revised Allocation”); provided, however, that if the Net UK Appraisal
Adjustment is greater than zero (i.e., a positive number), then the Revised
Allocation with respect to each non-UK Item will be the Initial Allocation with
respect to such item reduced by a pro rata amount (based on Initial Allocations)
of the Net UK Appraisal Adjustment; provided further, however, if the Net UK
Appraisal Adjustment is equal to zero, then no change shall be made to the
Initial Allocations and the Revised Allocation with respect to each non-UK Item
will be the Initial Allocation with respect to such item.

       (iii) After the Revised Allocation has been determined with respect to
each non-UK Item, Buyer’s Appraiser will provide Buyer and TRW with an
allocation of the Residual Purchase Price (as defined in the following sentence)
to the non-UK Items (the “Buyer’s Allocation”). The “Residual Purchase Price”
shall equal the excess of (i) the Closing Price over (ii) the aggregate Final
Allocations with respect to the UK Items. With respect to each non-UK Item, if
the Buyer’s Allocation is within 10% of the Revised Allocation, then the Buyer’s
Allocation shall be accepted by Buyer and TRW and shall be the Final Allocation;
provided, however, that in the event that the Buyer’s Allocation varies by more
than 10% in either direction from the Revised Allocation, TRW may elect to have
TRW’s Appraiser determine the reasonableness of Buyer’s Allocation and provide
Buyer and TRW with an allocation of the Residual Purchase Price (the “TRW’s
Allocation”), in which case the Final Allocation will be the average of the
Buyer’s Allocation and TRW’s Allocation and the Final Allocation so determined
shall be accepted by Buyer and TRW.

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       (iv) Each party will bear the cost of any third-party accounting firm or
appraisal firm it retains.

     (b)  Within 30 days of determination of the Adjustment Amount pursuant to
Section 2.6 hereof, Buyer shall prepare a revised Purchase Price allocation to
provide for the allocation of the Adjustment Amount in a manner that is
consistent with the Purchase Price allocation determined pursuant to Section
2.7(a) and shall deliver such revised allocation to TRW for TRW’s review and
approval; provided, however, that if TRW does not approve of such revised
Purchase Price allocation, TRW shall select and retain a third-party accounting
firm or appraisal firm to determine the reasonableness of the allocation of the
Adjustment Amount. If Buyer does not approve the revised allocation so
determined, the dispute shall be resolved according to the procedures set forth
in Section 2.6(c) hereof, provided, however, that in no event shall the
aggregate allocation to the UK Items result in an allocation that is less than
actual fair market value of the UK Items determined under the principles of
Section 2.7(a)(i).

     (c)  Neither TRW, Buyer nor any of their respective Affiliates shall file
any Tax Return or other document relating to Taxes or otherwise take any
position or agree to take any position relating to Taxes which is inconsistent
with the allocation (including any revision under this Section 2.7) determined
pursuant to this Section 2.7 unless required to do so pursuant to a Final
Determination.

     Section 2.8 Proration.

     (a)  Buyer and TRW agree that all of the items normally prorated, including
those listed below, relating to the business and operation of the Acquired
Assets will be prorated as of the Closing Date, with TRW liable to the extent
such items relate to any time period through the Closing Date, and Buyer liable
to the extent such items relate to periods subsequent to the Closing Date:

       (i) personal property, real estate, occupancy and any other similar
non-Income Taxes, assessments and other charges, if any, on or with respect to
the ownership, use or business and operation of the Acquired Assets;

       (ii) rent and Taxes (other than Income Taxes);

       (iii) any permit, license or registration fees with respect to any
Environmental Permit or other Permit; and

       (iv) sewer rents and charges for water, telephone, electricity, gas and
other utilities.

     (b)  In connection with such proration, in the event that actual amounts
are not available at the Closing Date, the proration shall be based upon the
actual amount of such Taxes or fees for the preceding year (or appropriate
period) for which such actual Taxes or fees are available and such Taxes or fees
shall be reprorated upon request of either TRW or Buyer made within sixty
(60) days of the date that the actual amounts

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become available. TRW and Buyer agree to furnish each other with such documents
and other records as may be reasonably requested in order to confirm all
adjustment and proration calculations made pursuant to this Section 2.8.

ARTICLE III

CLOSING

     Section 3.1 Closing. Upon the terms and subject to the conditions of this
Agreement and the Ancillary Agreements, the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements (the “Closing”)
shall take place no later than five (5) Business Days following the satisfaction
or waiver of the conditions set forth in Article VII hereof, at 10:00 a.m., at
the offices of Skadden, Arps, Slate, Meagher & Flom, LLP, Four Times Square, New
York, New York 10036, or at such other time and place as shall be agreed upon by
the parties hereto. The date on which the Closing occurs is herein referred to
as the “Closing Date.” The Closing will be deemed to have occurred as of
11:59 p.m. local time on the Closing Date.

     Section 3.2 Deliveries at Closing.

     (a)  At the Closing, TRW shall deliver or cause to be delivered to Buyer
(unless previously delivered), the items identified on Schedule 3.2(a).

     (b)  At the Closing, Buyer shall deliver or cause to be delivered to TRW
(unless previously delivered), the items identified on Schedule 3.2(b).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF TRW

     Except as disclosed in a separate disclosure statement, a copy of which has
been delivered by TRW to Buyer prior to the execution of this Agreement and is
attached hereto (the “TRW Disclosure Letter”), TRW hereby represents and
warrants to Buyer the matters set forth below. Information disclosed in any
section of the TRW Disclosure Letter shall be deemed to be disclosed with
respect to such other sections of this Agreement or the TRW Disclosure Letter to
which such disclosure on its face would reasonably pertain in light of the form
and substance of the disclosure made. All representations and warranties
relating to the Spanish Affiliate are made only to the knowledge of TRW.

     Section 4.1 Organization and Existence. Each of the TRW Entities is a legal
entity duly established, validly existing, and (where applicable) in good
standing under the laws of its jurisdiction of organization or incorporation, as
the case may be. Each of the TRW Entities has all requisite power and authority
to own, lease and operate its properties and to conduct the Business as it is
currently conducted, except where the

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failure to have such power and authority, individually or in the aggregate, has
not resulted, and is not reasonably likely to result, in a Material Adverse
Effect. Each of the TRW Entities is duly qualified or licensed to do business
under the laws of each jurisdiction in which the nature of the activities
conducted by it makes such qualification necessary, except where the failure to
be so qualified or licensed, individually or in the aggregate, has not resulted,
and is not reasonably likely to result, in a Material Adverse Effect.

     Section 4.2 Power and Authority. TRW has all requisite corporate or other
organizational power and authority to execute and deliver, to perform its
obligations under, and to consummate the transactions contemplated by, this
Agreement and the Ancillary Agreements to which it is a party. Each of the TRW
Selling Shareholders and Asset Selling Subsidiaries has all requisite corporate
or other organizational power and, as of the Closing, will have the corporate or
other organizational authority to execute and deliver, to perform its
obligations under, and to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements to which it is a party.

     Section 4.3 Authorization. The execution and delivery by TRW of, the
performance by TRW of its obligations under, and the consummation by TRW of the
transactions contemplated by, this Agreement have been, and the other Ancillary
Agreements, as of the Closing, will be, duly authorized by all requisite
organizational action of TRW. The execution and delivery by each of the Asset
Selling Subsidiaries and the TRW Selling Shareholders of, the performance by
each of the Asset Selling Subsidiaries and the TRW Selling Shareholders of its
obligations under, and the consummation by each of the Asset Selling
Subsidiaries and the TRW Selling Shareholders of the transactions contemplated
by, the Ancillary Agreements, as of the Closing, will be duly authorized by all
requisite organizational action of each such Asset Selling Subsidiary and TRW
Selling Shareholder.

     Section 4.4 Binding Effect. This Agreement has been duly executed and
delivered by TRW and is, and each Ancillary Agreement will be duly executed and
delivered by each TRW Entity which is a party thereto and when executed and
delivered by all parties thereto will be, the valid and binding obligation of
the TRW Entities which are a party hereto or thereto, enforceable against the
TRW Entities which are a party hereto or thereto in accordance with their terms,
assuming due authorization, executions and delivery by Buyer (and as applicable,
Buyer’s Affiliates).

     Section 4.5 Interest in Subsidiaries and Affiliates.

     (a)  Section 4.5 of the TRW Disclosure Letter sets forth the name and
jurisdiction of organization or incorporation, the authorized capital stock,
partnership capital or equivalent, the number and type of its issued and
outstanding shares of capital stock, partnership interest or similar ownership
interests and the current ownership of such shares, partnership interests or
similar ownership interests of each Aerospace Subsidiary and their Subsidiaries
and each Aerospace Affiliate and their Subsidiaries.

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     (b)  All of the shares of capital stock of, or other equity interest in,
the Aerospace Subsidiaries and the Aerospace Affiliates owned by TRW Selling
Shareholders, (i) are owned by one or more TRW Selling Shareholders, free and
clear of all Liens, and (ii) have been duly authorized, validly issued and are
fully paid and nonassessable.

     (c)  There are no outstanding options, warrants, convertible securities or
other rights, agreements, arrangements or commitments relating to the capital
stock of, or other equity interest in, any Aerospace Subsidiary or in any
Aerospace Affiliate, obligating any TRW Selling Shareholder, Aerospace
Subsidiary or Aerospace Affiliate, at any time or upon the occurrence of certain
events, to offer, issue, sell, transfer, vote or otherwise dispose of or sell
any shares of capital stock of, or other equity interest in, any Aerospace
Subsidiary or Aerospace Affiliate.

     Section 4.6 No Defaults; Consents. (a) Neither the execution and delivery
of this Agreement or any Ancillary Agreement by the TRW Entities, nor the
consummation of the transactions contemplated by this Agreement or the Ancillary
Agreements will violate, breach, contravene, conflict with, result in the
termination or acceleration of, entitle any party to payment under, entitle any
party to exercise any right of first refusal, first offer, preemptive right or
other option right under, or otherwise constitute or give rise to a Default
under, as applicable, (i) any provision of the articles of incorporation, the
by-laws or similar organizational documents of any of the TRW Entities, (ii) any
Contract or other instrument or obligation to which any of the TRW Entities is a
party or by which any of the Assets or Subsidiary interests are bound, or
(iii) any writ, injunction, decree, statute, rule or regulation applicable to
any TRW Selling Shareholder, any Asset Selling Subsidiary or the Assets or the
Subsidiary interests; except, in the case of the foregoing clauses (ii) and
(iii), for such violations, breaches, conflicts, terminations, accelerations,
entitlements or Defaults which, individually or in the aggregate, have not
resulted in, or which would not reasonably be likely to result in, a Material
Adverse Effect.

     (b)  No filing with or notice to, and no permit, authorization,
registration, consent or approval of, any Governmental Entity is required on the
part of any TRW Entity for the execution, delivery and performance by TRW of
this Agreement or the consummation by any TRW Entity of the transactions
contemplated hereby, except (i) the filing of a notification and report form
under the HSR Act and the termination or expiration of any waiting period under
the HSR Act, (ii) the filings, consents, approvals or clearances required under
any foreign antitrust or investment laws (including without limitation under
Council Regulation No. 4064/89 of the European Community, as amended (the “EU
Merger Regulation”)), (iii) the filings, consents, approvals or clearances
required by the department of defense or department of aviation of any
jurisdiction, including, without limitation, the United States Department of
Defense, the Ministry of Defense of the United Kingdom and the Federal Aviation
Agency, or (iv) where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings or give such notice would not
have, individually or in the aggregate, and would not reasonably be likely to
have, a Material Adverse Effect.

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     Section 4.7 Financial Statements.

     (a)  Section 4.7(a) of the TRW Disclosure Letter contains the Supplemental
Accounting Principles and the following financial statements relating to the
Business: the balance sheet of the Business as of March 29, 2002 and May 31,
2002 and the related Statement of Operations for the respective three-month
period and five-month period then ended (collectively the “2002 Financial
Statements”).

     (b)  The 2002 Financial Statements have been prepared in accordance with
the books of account and other financial records of the TRW Entities, the
Standard Practice Instructions as applied by the Business, Local Standard
Practice Instructions in use by the Business and with the Supplemental
Accounting Principles, in use by the Business, as of the dates and for the
periods set forth. The 2002 Financial Statements present fairly, in all material
respects, in accordance with GAAP consistently applied, the consolidated
financial condition and results of operations of the Business as of March 31,
2002 and May 31, 2002 and for the respective three-month period and five-month
period then ended, subject to normal year-end adjustments, except that they
exclude all applicable footnote disclosure as required by GAAP and except as set
forth in Section 4.7(b) of the TRW Disclosure Letter.

     (c)  Section 4.7(c) of the TRW Disclosure Letter contains the following
financial statements relating to the Business: the balance sheets of the
Business as of December 31, 2000 and December 31, 2001, and the related
statements of operations for the annual periods ended on such dates,
respectively (collectively, the “Historical Financial Statements”). The
Historical Financial Statements have been prepared in accordance with the books
of account and other financial records of the TRW Entities, the Standard
Practice Instructions as applied by the Business and Local Standard Practice
Instructions in use by the Business, as of the dates and for the periods therein
set forth. The Historical Financial Statements present fairly, in all material
respects, in accordance with GAAP consistently applied, the consolidated
financial condition and results of operations of the Business as of December 31,
2000 and December 31, 2001 and for the respective twelve-month periods then
ended, except that they exclude all applicable footnote disclosure as required
by GAAP and except as set forth in Section 4.7(c) of the TRW Disclosure Letter.

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     Section 4.8 No Undisclosed Liabilities. The TRW Participants have no
liabilities (whether absolute, accrued, contingent or otherwise) that are
required by GAAP (as consistently applied by the Business in accordance with the
Standard Practice Instructions or the Business’ Local Standard Practice
Instructions, which are in accordance with GAAP) to be reflected on the
consolidated financial statements of the Business or reflected in the footnotes
thereto, except (a) liabilities disclosed and reserved against in the May 31,
2002 Balance Sheet, (b) items disclosed in Section 4.8 of the TRW Disclosure
Letter, (c) liabilities incurred in the ordinary course of business consistent
with past practice since May 31, 2002 and (d) liabilities that, individually or
in the aggregate, have not resulted in, or which would not be reasonably likely
to result in, a Material Adverse Effect.

     Section 4.9 Absence of Certain Changes. Since May 31, 2002, the TRW
Entities have conducted the Business in the ordinary course of business
consistent with past practice and have not experienced any development or change
which, individually or in the aggregate, has resulted in or which would be
reasonably likely to result in a Material Adverse Effect. From May 31, 2002
until the date of this Agreement, none of the TRW Entities has undertaken any
actions that are material in the aggregate to the Business and that would be
prohibited under Section 6.1(a) if undertaken after the date hereof.

     Section 4.10 Litigation. Except as set forth in the litigation schedule
included in Section 4.10 of the TRW Disclosure Letter, as of the date of
litigation schedule there is no claim, demand, action, suit, in law or in
equity, or proceeding or audit outside the ordinary course of business or, to
the knowledge of TRW, investigation (collectively “Actions”) before or involving
any Governmental Entity or private arbitration tribunal pending or, to the
knowledge of TRW, threatened, against any TRW Entity in respect of the Assets or
the Business which, individually or in the aggregate, has resulted in, or which,
if determined adversely to TRW, would be reasonably likely to result in a
Material Adverse Effect. There are no judgments, decrees, orders, agreements or
litigation or other adversary proceeding settlements specifically against or
binding upon any of the TRW Participants or the Business, or which prohibit or
restrict the Business as currently conducted, or to the knowledge of TRW, any
such actions threatened against any of the TRW Participants except as set forth
in Section 4.10 of the TRW Disclosure Letter or that, individually or in the
aggregate, have not resulted in, and would, if determined adversely to TRW, not
reasonably be likely to result in, a Material Adverse Effect.

     Section 4.11 Compliance with Applicable Law.

     (a)  Each TRW Entity holds all Permits necessary for each of them to own,
lease or operate its properties and assets and for the lawful conduct of their
respective businesses (with respect to the Business), except where the failure
to hold such Permits would not, individually or in the aggregate, be reasonably
likely to result in a Material Adverse Effect. No material Permit is or will be
materially impaired by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.

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     (b)  Each TRW Entity is in compliance with the terms of its respective
Permits (with respect to the Business), except where noncompliance with the
terms of such Permits would not, individually or in the aggregate, be reasonably
likely to result in a Material Adverse Effect.

     (c)  Each TRW Entity has complied and is in compliance, in all material
respects, with all material laws, rules and regulations, ordinances, judgments,
decrees, orders, writs, and injunctions of all Governmental Entities applicable
to the Business except as disclosed in Section 4.11 of the TRW Disclosure
Letter, and no written notice has been received by a TRW Entity (with respect to
the Business) alleging any material violation of any of the foregoing.

     Section 4.12 Taxes.

     (a)  All material Tax Returns required to be filed with respect to each of
the Asset Selling Subsidiaries and their Subsidiaries (including the
consolidated federal income Tax Return of TRW and any state, local or foreign
Tax Return that includes any of the Aerospace Subsidiaries on a consolidated,
combined or unitary basis) have been timely filed, and all such Tax Returns are
true, correct and complete in all material respects; all Taxes shown as due on
such Tax Returns as filed have been paid; there are no material Tax liens (other
than Permitted Liens) on the Acquired Assets of the Business; and TRW and each
other entity transferring a United States real property interest (within the
meaning of Section 897(c)(1) of the Code) hereunder is not a foreign person
within the meaning of Section 1445(f)(3) of the Code.

     (b)  Each of the TRW-controlled Aerospace Affiliates and their respective
Subsidiaries have withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, former employee,
independent contractor, creditor, stockholder, or other third party.

     (c)  No position has been asserted or adjustment proposed in writing by any
Tax Authority, and there are no pending or, to the knowledge of TRW, threatened
actions or proceedings for the assessment or collection of Taxes against the
TRW-controlled Aerospace Affiliates or any of their Subsidiaries, which, if
asserted by such Tax Authority in a Tax period ending after the date of this
Agreement, has resulted or would reasonably be likely to result in a Material
Adverse Effect. No issues have been raised in any examination by any Taxing
Authority with respect to any of the Acquired Assets, the TRW-controlled
Aerospace Affiliates or their respective Subsidiaries which, by application of
similar principles, reasonably could be expected to result in a proposed
deficiency or increase in Tax for any other period not so examined. Section
4.12(c) of the TRW Disclosure Letter lists all state, local, and foreign income
Tax Returns filed with respect to any of the TRW-controlled Aerospace Affiliates
and their respective Subsidiaries for taxable periods ended on or after
December 31, 1999, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of audit. TRW
delivered or made available to Buyer correct and complete copies all Tax
Returns, examination reports, and statements of deficiencies assessed against or

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  agreed to by the TRW-controlled Aerospace Affiliates and their respective
Subsidiaries since December 31, 1999.

     (d)  None of the TRW-controlled Aerospace Affiliates and their respective
Subsidiaries has waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency.

     (e)  To the knowledge of TRW no liability is outstanding or has been
asserted against any of the Aerospace Affiliates or their Subsidiaries, with
respect to material Taxes of any other Person pursuant to any Tax allocation or
sharing agreement with any such Person, or any agreement to indemnify any such
Person with respect to Taxes.

     (f)  Each of the TRW-controlled Aerospace Affiliates and their respective
Subsidiaries qualifies and has since the date of its formation qualified to be
treated as a corporation for federal income tax purposes and none of the
TRW-controlled Aerospace Affiliates and their respective Subsidiaries nor, to
the knowledge of TRW, any of the shareholders thereof has taken a position
inconsistent with such treatment with regard to any Tax.

     Section 4.13 Employee Benefit Plans.

     (a)  Section 4.13 of the TRW Disclosure Letter contains a true and complete
list of each Assumed Plan and of each material Plan. For all purposes herein,
“Plan” shall mean each material “welfare” plan, fund or program (within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)); each material “pension” plan, fund or program (within the
meaning of Section 3(2) of ERISA); and each other material employee benefit
plan, including, but not limited to, any bonus, retention, incentive, deferred
compensation, vacation, stock purchase, stock option, severance, change of
control or fringe benefit plan, agreement, program or written policy, in each
case, that is sponsored, maintained or contributed to or required to be
contributed to by TRW or any ERISA Affiliate thereof (in any event, including
the Aerospace Subsidiaries and the Aerospace Affiliates and their respective
Subsidiaries) or to which TRW or any ERISA Affiliate thereof is party, for the
benefit of any employee or former employee of the Business (the “Plans”). Each
Plan that is (i) sponsored and maintained solely by any Aerospace Subsidiary or
any Aerospace Affiliate or any of their respective Subsidiaries and (ii)
expressly assumed by Buyer pursuant to Section 6.8 and identified as such on
Section 4.13 of the TRW Disclosure Letter shall be referred to herein as an
“Assumed Plan.” For purposes of this Agreement, (x) “Business Plan” means each
Assumed Plan and each Plan with respect to which Buyer receives assets pursuant
to Section 6.8 and (y) “ERISA Affiliate” means, with respect to any entity,
trade or business, any other entity, trade or business that is, or was at the
relevant time, a member of a group described in Section 4.14(b), (c), (m) or
(o) of the Code or Section 4001(b)(1) of ERISA that includes or included the
first entity, trade or business, or that is, or was at the relevant time, a
member of the same “controlled group” as the first entity, trade or business
pursuant to Section 4001(a)(14) of ERISA.

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     (b)  With respect to each Plan that is a Multiemployer Plan (as defined in
Section 4.13(i)), the representations in Sections 4.13(b) through (g) and (k)
through (m) shall not be applicable.

     (c)  With respect to each Business Plan, TRW has heretofore delivered or
made available to Buyer true and complete copies of each of the following
documents: (i) a copy of the Plan (or to the extent no such copy exists, an
accurate written description thereof), and any amendments, trusts, and insurance
contracts with respect thereto; (ii) a copy of the most recent summary plan
description and summary of material modifications required under ERISA with
respect thereto; (iii) with respect to each Business Plan that is a pension plan
within the meaning of Section 3(1) of ERISA (a “Pension Plan”), a copy of each
trust or other funding arrangement; (iv) the most recent determination letter
(or analogous approval in a jurisdiction other than the United States) most
recently issued by the U.S. Internal Revenue Service (“IRS”) (or other relevant
national or provincial tax authority); (v) the most recently prepared actuarial
report and financial statement and (vi) the two most recent Annual Reports
(Form 5500 Series). Except as specifically provided in the foregoing documents
delivered or made available to Buyer, there are no amendments to any Business
Plan that has been adopted or approved, nor has any party undertaken to make any
such amendments or to adopt or approve any new Business Plan. With respect to
each material Plan (other than a Business Plan), TRW has heretofore delivered or
made available to Buyer true and complete copies of each of the following
documents: (i) a copy of the Plan (or to the extent no such copy exists, an
accurate written description thereof) and (ii) a copy of the most recent summary
plan description and summary of material modifications under ERISA with respect
thereto, to the extent these documents exist for such plans.

     (d)  With respect to each Plan that is subject to United States law, each
such Plan that is a Pension Plan is now and always has been operated in
accordance with its terms and the requirements of all applicable laws,
regulations and rules promulgated thereunder, including, without limitation,
ERISA and the Code, except to the extent such noncompliance would not reasonably
be expected to result in a Material Adverse Effect. There are no material
pending or, to the knowledge of TRW, threatened claims (other than claims for
benefits in the ordinary course) or lawsuits with respect to the Affected
Employees which have been asserted or instituted, and, to the knowledge of TRW,
no set of circumstances exists which may reasonably give rise to a claim or
lawsuit, against the Assumed Plans, any fiduciaries thereof with respect to
their duties to the Assumed Plans or the assets of any of the trusts under any
of the Assumed Plans which could reasonably be expected to result in any
material liability of Buyer, the Aerospace Subsidiaries or the Aerospace
Affiliates or any of their respective subsidiaries to the Pension Benefit
Guaranty Corporation, the Department of Treasury, the Department of Labor, any
Multiemployer Plan, any Plan, any participant in a Plan, or any other party.

     (e)  Each Business Plan that is intended to be qualified under Section
401(a) of the Code or Section 401(k) of the Code has timely received a favorable
determination letter from the IRS that has not been revoked to the effect that
such Business Plan and the related trust is so qualified, and no fact or event
has occurred since the date of such determination letter or letters from the IRS
to adversely affect the

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qualified status of any such Business Plan or the exempt status of any such
trust. No trust funding any Business Plan is intended to meet the requirements
of Code Section 501(c)(9).

     (f)  With respect to each Business Plan that is subject to United States
law, no liability under Title IV or Section 302 of ERISA has been incurred by
TRW, the Aerospace Affiliates or the Aerospace Affiliates or any of their
respective ERISA Affiliates that has not been satisfied in full, and to the
knowledge of TRW, no condition exists that presents a material risk to Buyer of
incurring any such liability, other than liability for premiums due the Pension
Benefit Guaranty Corporation (which premiums have been fully paid when due).
Without limiting the generality of the foregoing, with respect to each Business
Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971
of the Code: (i) there does not exist any accumulated funding deficiency within
the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not
waived; (ii) as of January 1, 2002, the fair market value of the assets of such
Business Plan held with respect to the Affected Employees equals or exceeds the
projected benefit obligation (“PBO”) determined in accordance with Statement of
Financial Accounting No. 87 (“FAS”) of the accrued obligations of such Business
Plan (whether or not vested); (iii) no reportable event within the meaning of
Section 4043(c) of ERISA for which the 30-day notice requirement has not been
waived has occurred, and the consummation of the transactions contemplated by
this Agreement or the Ancillary Agreements will not result in the occurrence of
any such reportable event; (iv) no liability (other than for premiums to the
PBGC) under Title IV of ERISA has been or is expected to be incurred by the
Aerospace Subsidiaries or the Aerospace Affiliates or any of their respective
Subsidiaries or ERISA Affiliates; (v) the PBGC has not instituted proceedings to
terminate any such Business Plan and to the knowledge of TRW, no condition
exists that presents a risk that such proceedings will be instituted or which
would constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any such Business Plan; and
(vi) there is not now, nor to the knowledge of TRW, do any circumstances exist
that could give rise to, any requirement for the posting of security with
respect to any such Business Plan or the imposition of any Lien on the assets of
the Business or any Aerospace Subsidiary or Aerospace Affiliate or any of their
respective subsidiaries under ERISA or the Code.

     (g)  With respect to each Business Plan that is subject to United States
law, all pension contributions and payments required to be made with respect to
any Business Plan by applicable law or regulation or by any plan document or
other contractual undertaking, and all premiums due or payable with respect to
insurance policies funding any Business Plan, for any period through the date
hereof have been timely made or paid in full or, to the extent not required to
be made or paid on or before the date hereof, have been fully reflected on the
Financial Statements. Each Assumed Plan that is an employee welfare benefit plan
under Section 3(1) of ERISA either (i) is funded through an insurance company
contract and is not a “welfare benefit fund” with the meaning of Section 419 of
the Code or (ii) is unfunded.

     (h)  Except as set forth in Section 4.13 of the TRW Disclosure Letter, no
Plan provides that the consummation of the transactions contemplated by this

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Agreement will, either alone or in combination with another event, (i) entitle
any current or former employee or officer of the Business to any severance pay,
unemployment compensation or other payment or benefit, except as expressly
provided in this Agreement, or (ii) materially accelerate the time of payment or
vesting of any amount or benefit, or increase the amount of compensation or
benefits due any such employee or officer.

     (i)  Except as set forth in Section 4.13 of the TRW Disclosure Letter: (i)
no Plan is a “multiemployer plan” within the meaning of Section 4001(a)(3) of
ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing
sponsors at least two of whom are not under common control, within the meaning
of Section 4063 of ERISA (a “Multiple Employer Plan”); (ii) none of TRW, the
Aerospace Subsidiaries or the Aerospace Affiliates nor any ERISA Affiliates
thereof has, at any time during the last six years, contributed to or been
obligated to contribute to any Multiemployer Plan or Multiple Employer Plan with
respect to any Affected Employee; (iii) none of the Aerospace Subsidiaries or
the Aerospace Affiliates nor any ERISA Affiliates has incurred or, to the
knowledge of TRW, is reasonably expected to incur, any liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan (as those terms are defined in Part I of Subtitle E of Title
IV of ERISA) that has not been satisfied in full; (iv) as a result of the
transaction set forth in this Agreement or otherwise, to the knowledge of TRW,
no such Multiemployer Plan is in reorganization, and no increased contributions
may be required to avoid a reduction in benefits or an excise tax; and (v)
neither TRW nor any subsidiary has failed to make any required contribution with
respect to such Multiemployer Plan.

     (j)  There does not now exist, nor do any circumstances exist that could
reasonably be expected to result in a liability of the Aerospace Subsidiaries
(other than the Asset Selling Subsidiaries) or the Aerospace Affiliates or any
of their respective subsidiaries following the Closing, as a result of joint and
several liability, with respect to any liabilities of an entity other than the
Aerospace Subsidiaries or the Aerospace Affiliates or any of their respective
Subsidiaries (i) under Title IV of ERISA, (ii) under Section 302 of ERISA,
(iii) under Sections 412 and 4971 of the Code, or (iv) as a result of a failure
to comply with the continuation coverage requirements of Section 601 et seq. of
ERISA and Section 4980B of the Code. None of the Aerospace Affiliates or
Aerospace Subsidiaries or any of their respective Subsidiaries, nor any
fiduciary with respect to a Business Plan, has engaged in any “prohibited
transaction” (as defined in Section 4975 of the Code or Section 406 of ERISA),
which could subject any of the Business Plans or their related trusts, the
Aerospace Affiliates (other than the Asset Selling Subsidiaries) or Aerospace
Subsidiaries or any of their respective Subsidiaries or any Person that any such
entity has an obligation to indemnify, to any material tax or penalty imposed
under Section 4975 of the Code or Section 502 of ERISA.

     (k)  With respect to Affected Employees and former employees of the
Business, no TRW Participant has or could reasonably be expected to have any
liability for life, health, medical or other welfare benefits to former
employees or persons who could become former employees or beneficiaries or
dependents thereof, except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of

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ERISA and at no expense to the TRW Participant (each such plan, practice or
arrangement, a “Retiree Plan”). With respect to Affected Employees and former
employees of the Business, each Retiree Plan that is an Assumed Plan can be
freely amended or terminated without the consent of participants without
liability according to its terms, and no representations or communications have
been made that any such Retiree Plan could or would not be so amended or
terminated.

     (l)  Each individual who renders services to the Aerospace Subsidiaries or
the Aerospace Affiliates or any of their respective Subsidiaries who is
classified as having the status of an independent contractor or other
non-employee status for any purpose (including for purposes of taxation and Tax
reporting and under the Plans) is properly so characterized except as would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.

     (m)  With respect to each Business Plan that is not subject to United
States law (each, a “Non-U.S. Benefit Plan”):

       (i) all employer and employee payments, contributions or accruals
(including premiums) for each Non-U.S. Benefit Plan required by law or by the
terms of such Non-U.S. Benefit Plan have been made when due, or, if applicable,
accrued, in accordance with “FAS 87”;

       (ii) the fair market value of the assets of any funded Non-U.S. Benefit
Plan that is a Pension Plan (excluding any book reserves or balance sheet
accruals) equals or exceeds the benefit obligations of such Plans determined on
a PBO basis;

       (iii) each Non-U.S. Benefit Plan required to be registered has been
registered (including pursuant to the UK Pension Schemes Act of 1993) and has
been maintained in good standing with applicable laws and regulatory authorities
(including the UK Pension Schemes Act of 1993);

       (iv) all amounts required to be reserved under each book reserved
Non-U.S. Benefit Plan have been so reserved in accordance with normal accounting
practices prevailing in the country where such plan is maintained;

       (v) if intended to qualify for special tax treatment, each Non-U.S.
Benefit Plan meets all requirements for such treatment and TRW knows of no
circumstances that might give reason to any applicable governmental authority to
revoke such treatment;

       (vi) Section 4.13(l) of the TRW Disclosure Letter lists each Non-U.S.
Benefit Plan that is a defined benefit pension plan; and

       (vii) No power has been exercised to provide additional benefits in
respect of any UK Affected Employee or to admit a UK

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      Affected Employee on special terms and no proposal or announcement has
been made to any UK Affected Employee about the introduction, continuance,
increase or improvement of any pension, lump sum, death, ill-health, disability
or accident benefit.

     (n)  There are no actions, proceedings or claims (other than routine claims
for benefits) outstanding, pending or threatened by the UK Affected Employees or
any of them in respect of the TRW UK pension scheme relating to any act, event,
omission or other matter arising out of or in connection with the TRW UK pension
scheme.

     (o)  TRW has taken all necessary action with respect to trade unions, work
councils and employee representatives required to be, or which would be
customarily, taken prior to the date hereof in connection with the transactions
contemplated by this Agreement.

     Section 4.14 Intellectual Property.

     (a)  Section 4.14(a) of the TRW Disclosure Letter sets forth a true and
complete list of all material (i) Patents, (ii) Trademarks, (iii) Copyright,
(iv) Domain Names and (v) Software (but excluding off-the-shelf Software)
included in the Equity Intellectual Property and Transferred Intellectual
Property. Within 30 days following the date of this Agreement, Section 4.14(a)
of the TRW Disclosure Letter will be updated to specify whether such
Intellectual Property constitutes Equity Intellectual Property or Transferred
Intellectual Property.

     (b)  The Equity Intellectual Property and Transferred Intellectual Property
includes all of the Intellectual Property used or held for use primarily in the
Business by the TRW Participants. The Business Intellectual Property includes
all of the Intellectual Property used in the operation of the Business
immediately prior to the Closing (with the exception of Software obtained
pursuant to corporate-level agreements listed in Section 4.14(b) of the TRW
Disclosure Letter) and, to TRW’s knowledge, no facts or circumstances exist with
respect to the Business Intellectual Property that would reasonably be expected
to preclude, or limit or impair in any material respect, Buyer’s ability to
conduct the Business as currently conducted.

     (c)  To the knowledge of TRW, other than as set forth in Section 4.14(c) of
the TRW Disclosure Letter, no TRW Participant has interfered with, infringed
upon, misappropriated or violated any Intellectual Property rights of any third
party. No TRW Participant has received written notice from any third party
alleging any such interference, infringement, misappropriation or violation. To
the knowledge of TRW, no third party has interfered with, infringed upon,
misappropriated or violated any Business Intellectual Property in any material
respect and TRW has no knowledge of any information, materials, facts or
circumstances that would render any of the Business Intellectual Property
invalid or unenforceable in any material respect.

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     (d)  The owned Business Intellectual Property, excluding the Licensed
Trademarks and the Licensed Intellectual Property, is owned by one of the TRW
Participants free and clear of any Liens other than Permitted Liens. Except as
disclosed in Section 4.14(d) of the TRW Disclosure Letter, one of the TRW
Participants owns all right, title and interest in and to, or has a valid and
enforceable right to use, by license or other agreement, and assign, convey and
otherwise transfer all of its right, title and interest in and to the
Transferred Intellectual Property to Buyer except where the failure to make such
transfer, individually or in the aggregate, would not reasonably be likely to
result in a Material Adverse Effect.

     (e)  All material application, registration, maintenance and renewal fees
in connection with the registered owned Business Intellectual Property and
applications therefor have been paid and all material documents and certificates
in connection with such registered owned Business Intellectual Property have
been filed with the relevant patent, copyright, trademark or other authority in
the United States, regional or non-U.S. jurisdictions, as the case may be, for
the purposes of maintaining such registered owned Business Intellectual Property
except as would not reasonably be likely, individually or in the aggregate, to
result in a Material Adverse Effect.

     (f)  Other than as set forth in Section 4.14(f) of the TRW Disclosure
Letter, no TRW Participant licenses any Business Intellectual Property to third
parties, or permits third parties to use any Business Intellectual Property
rights and no TRW Participant owes any material royalties or payments to any
third party for using or licensing to others any Business Intellectual Property.

     (g)  The TRW Participants have taken commercially reasonable steps to
protect the TRW Participants’ rights in confidential information and Trade
Secrets of the TRW Participants or as required by any other person who has
provided its confidential or proprietary information, source code or Trade
Secrets to the TRW Participants, including by requesting that employees of the
Business assign to a TRW Participant their Intellectual Property rights created
for the Business, except where the failure to take such steps would not
reasonably be likely to result in a material adverse impact or the Business.

     Section 4.15 Labor Relations; Employees. Except as set forth in the TRW
Disclosure Letter, to the knowledge of TRW, none of the Affected Employees is
represented by any labor organization and no union organizing activities have
occurred with respect to Affected Employees within the past year. Except as set
forth in the TRW Disclosure Letter, no TRW Participant is a party to or bound by
any collective bargaining or similar agreement with any labor organization
applicable to Affected Employees. Except as set forth in Section 4.15 of TRW
Disclosure Letter, (i) there is no labor strike, dispute, lock-out or stoppage
pending or, to the knowledge of TRW, threatened, against or affecting the
Business and the Business has not experienced any such strike, dispute, lock-out
or stoppage within the past two years and (ii) to the knowledge of TRW, the
Business has not materially breached or otherwise failed to comply with the
provisions of any collective bargaining or union contract and there are no
material written grievances outstanding against the Business under any such
agreement or contract. With respect to

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the Affected Employees, the TRW Participants have in the past been and are in
compliance in all material respects with applicable laws respecting employment,
employment practices, employee classification, labor relations, safety and
health, wages, hours and terms and conditions of employment except where
failures to comply would not, individually or in the aggregate, be reasonably
likely to result in a Material Adverse Effect. The TRW Participants have
complied with their payment obligations to all Affected Employees in respect of
all wages, salaries, commissions, bonuses, benefits, vacation pay and other
compensation due and payable to such employees under any policy, practice,
agreement, plan, program or applicable law except where failures to comply would
not, individually or in the aggregate, be reasonably likely to result in a
Material Adverse Effect.

     Section 4.16 Environmental Matters. Except as set forth in Section 4.16 of
the TRW Disclosure Letter, or except as has not, individually or in the
aggregate, resulted in, or would not be reasonably likely to result in, a
Material Adverse Effect:

     (a)  The TRW Participants are, and within all applicable statutes of
limitation have been, in compliance in all respects with all Environmental Laws
applicable to the operation of the Business as currently or formerly conducted;

     (b)  The TRW Participants have obtained all Environmental Permits (each of
which is in full force and effect) required for the conduct and operation of the
Business and are in compliance with the terms and conditions therein;

     (c)  No review by, or approval of, any Governmental Entity or other Person
is required under any order or agreement currently in effect in connection with
the execution or delivery of this Agreement and the consummation of the
transactions contemplated hereby; and

     (d)  There is no Environmental Claim pending, or to the knowledge of TRW,
threatened, against any TRW Participant, or against any Person (including
without limitation any predecessor of any TRW Participant) whose liability any
TRW Participant has or may have retained or assumed either contractually or by
operation of law, in connection with, related to or arising out of the ownership
or operation of the Business.

     (e)  As soon as practicable following the date of this Agreement, TRW will
provide Buyer with a list of any Aboveground Storage Tanks or Underground
Storage Tanks that are beneath any Owned Real Property or Leased Real Property
as of the date of this Agreement.

     (f)  TRW has previously furnished to Buyer or its representatives the
results of any ground, water or soil monitoring undertaken by the TRW
Participants or undertaken by any Governmental Entity and known to TRW relating
to the TRW Participants or any real property currently or previously owned or
leased by the TRW Participants.

     (g)  Section 4.16 of the TRW Disclosure Letter identifies all material
environmental audits, assessments or occupational health studies undertaken by
the TRW

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Participants or its agents or undertaken by any Governmental Entity or any other
Person and known to TRW, relating to the TRW Participants or any real property
currently or previously owned or leased by the TRW Participants. As soon as
practicable following the date of this Agreement, TRW will provide Buyer with a
list of all material written communications between the TRW Participants and any
Governmental Entity arising under or related to Environmental Laws.

     Section 4.17 Real Property.

     (a)  Section 4.17(a) of the TRW Disclosure Letter includes a complete and
correct list of each parcel of Owned Real Property.

     (b)  Section 4.17(b) of the TRW Disclosure Letter includes a complete and
correct list of all leases relating to the Leased Real Property. True, correct
and complete copies, including all amendments thereto, of each such lease have
been provided to Buyer or its representatives.

     (c)  The applicable TRW Participant holds good, valid and marketable title
to each parcel of Owned Real Property in fee simple absolute, free and clear of
all Liens, except for Permitted Encumbrances and Permitted Liens and is in
exclusive possession thereof. To the knowledge of TRW, no material expenditures
are required, in TRW’s reasonable discretion, to be made for the repair or
maintenance of any improvements on the Owned Real Property or for the Owned Real
Property to be used for its intended purpose other than routine repairs and
maintenance in the ordinary course of business.

     (d)  The applicable TRW Participant holds good, valid and marketable
leasehold title to each parcel of Leased Real Property, free and clear of all
Liens, other Permitted Liens and Permitted Encumbrances, and is in exclusive
possession as lessee thereof. Each parcel of Leased Real Property is held under
a valid, binding and enforceable lease, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium, and other
similar laws relating to or limiting creditors’ rights generally. No TRW
Participant is in material default under any material agreement relating to the
Leased Real Property nor, to the knowledge of TRW, is any other party thereto in
material default thereunder. There is no pending or, to the knowledge of TRW,
threatened action or proceeding that could materially interfere with the use by
the lessee of any such Leased Real Property. To the knowledge of TRW, no
material expenditures are required, in TRW’s reasonable discretion, to be made
for the repair or maintenance of any improvements on the Leased Real Property
which exceed those set forth in the 2002 Capital Expenditure Plan (which is set
forth on Schedule 6.1(a)(xv)), or for routine repairs and maintenance in the
ordinary course of business.

     (e)  There are no condemnation proceedings or eminent domain proceedings of
any kind pending or, to the knowledge of TRW, threatened with respect to any
portion of the Real Property.

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     (f)  None of the improvements comprising the Real Property, or the
businesses conducted by any TRW Participant thereon, is in violation of any
building line or use or occupancy restriction, limitation, condition or covenant
of record or any zoning or building law, code, or ordinance, public utility or
other easement or other applicable law, except for violations which,
individually or in the aggregate, have not resulted in, and would not reasonably
be likely to result in, a Material Adverse Effect.

     Section 4.18 Material Contracts.

     (a) Section 4.18 of the TRW Disclosure Letter lists each of the following
Contracts of the TRW Participants that relate primarily to the Business and
exist as of the date hereof (the “Material Contracts”):

       (i) all material distributor and sales agent agreements to which any of
the TRW Entities is a party;

       (ii) the material contracts for the top 14 vendors and top 20 customers
of the Business, based on 2001 revenues of the Business;

       (iii) all joint venture and partnership agreements and similar material
contracts involving a sharing of profits or expenses (including joint research
and development contracts);

       (iv) all material employment contracts with Affected Employees whose base
salary exceeds $150,000;

       (v) all material licenses, licensing arrangements, and other Contracts
providing in whole or in part for the use of, or limiting the use of, Business
Intellectual Property other than Contracts entered into in the ordinary course
of business which contain customary provisions entitling the other party thereto
to receive a license to use Intellectual Property rights upon termination of
such Contract in the event the applicable TRW Entity is in material breach
thereof provided that any such Contracts have not been materially breached as of
the date of this Agreement;

       (vi) all loan agreements, indentures, letters of credit, mortgages,
security agreements, pledge agreements, deeds of trust, bonds, notes, guarantees
and other agreements and instruments relating to the borrowing of money or
obtaining of or extension of credit pursuant to which an Aerospace Subsidiary or
an Aerospace Affiliate or any Subsidiary thereof is a guarantor or obligor and
in each case which will be an Assumed Liability;

       (vii) all Contracts that contain a provision or covenant materially
prohibiting, impairing, limiting or restricting, or purporting to materially
prohibit, impair, limit or restrict, the ability of the TRW Participants to
(i) sell or license any products or services of or to any other

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      person in any material respect, (ii) engage in any line of business, or
(iii) compete with or to obtain products or services from any person or limiting
the ability of any person to provide products or services to the TRW
Participants;

       (viii) Contracts with any director, or officer, or stockholder or
Affiliate of the TRW Participants;

       (ix) Contracts granting any third party any rights of first refusal,
rights of first offer, preemptive rights, or similar rights;

       (x) all material Contracts between any of the Aerospace Affiliates, the
Aerospace Subsidiaries or their Subsidiaries, on one hand, and TRW or any
Affiliate of TRW (other than the Aerospace Affiliates and the Aerospace
Subsidiaries), on the other hand;

       (xi) all asset purchase agreements and other acquisition or divestiture
agreements, including but not limited to any agreements relating to the sale,
lease or disposal of any Acquired Assets or any assets of any Aerospace
Subsidiary or Aerospace Affiliate or any of their Subsidiaries (other than sales
of inventory in the ordinary course of business);

       (xii) Contracts or other commitments relating to capital expenditure or
expenditures in excess of $5 million in any calendar year;

       (xiii) all Contracts relating to the lease of real property leased
(whether as lessor or lessee), used or operated by the TRW Participants;

       (xiv) all collective bargaining agreements; and

       (xv) all settlement contracts, consent orders and similar agreements
under which the TRW Participants have ongoing obligations.

     (b)  Each Material Contract is valid and binding on the TRW Participants
pursuant to its terms and is in full force and effect, except as disclosed in
Section 4.18 of the TRW Disclosure Letter. None of the TRW Entities, or, to the
knowledge of TRW, any other party thereto, is in breach of or default under, any
Material Contract and, to the knowledge of TRW, no event has occurred and no
condition exists which, with the lapse of time, the giving of notice, or both,
or the happening of any further event or condition, would become a default of a
provision under any Material Contract, except for such breaches or defaults
which have not resulted in, or would not be reasonably likely to result in,
individually or in the aggregate, a Material Adverse Effect. None of the TRW
Entities has released or waived any material right or benefit under any such
Material Contract other than in the ordinary course of business consistent with
past practices.

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     Section 4.19 Title to Assets. The TRW Participants (i) own or have other
legal rights to all of the Assets and (ii) have good title to the Assets owned
by them free and clear of all Liens, other than Permitted Liens and Permitted
Encumbrances; provided, that this representation does not concern Intellectual
Property or Real Property which are the subject of the representations in
Sections 4.14 and 4.17 hereof.

     Section 4.20 Affiliated Transactions. Except as described in Section 4.20
of the TRW Disclosure Letter, and except for trade payables and receivables
arising in the ordinary course of business for purchases and sales of goods or
services consistent with past practice on terms no less favorable than those
available from non-Affiliated parties, the Aerospace Subsidiaries, the Aerospace
Affiliates or their Subsidiaries have not been a party over the past 12 months
to any material transaction or agreement with TRW or any Affiliate of TRW (other
than the Aerospace Subsidiaries, the Aerospace Affiliates or their respective
Subsidiaries). Except as set forth in Section 4.20 of the TRW Disclosure Letter,
there are no material agreements or other transactions between the TRW
Participants, on the one hand, and any Affiliate of the TRW Participants, on the
other hand, and no director or officer of a TRW Participant has, directly or
indirectly, any material interest in any of the assets or properties of the TRW
Participants. Prior to the Closing, all amounts due and owing to or from the TRW
Participants by or to any of the Affiliates of the TRW Participants (excluding
employee compensation and other incidents of employment) shall be paid in full.

     Section 4.21 Product Liability; Airworthiness. Except as set forth in
Section 4.21 of the TRW Disclosure Letter, none of the TRW Participants has
received any written notice relating to, nor does TRW have any knowledge of any
facts or circumstances which are reasonably expected to give rise to, any claim
involving any service provided or any product designed, manufactured, serviced,
produced, modified, distributed or sold by or on behalf of the TRW Participants
resulting from an alleged defect in design, manufacture, materials or
workmanship, performance, or any alleged failure to warn, or from any alleged
breach of implied warranties or representations, or any alleged noncompliance
with any applicable laws, requirements, specifications, rules and regulations,
other than notices or claims that have been settled or resolved by the TRW
Participants prior to the date of this Agreement or those that would not,
individually or in the aggregate, and would not reasonably be likely to have,
have a Material Adverse Effect. Except as set forth in Section 4.21 of the TRW
Disclosure Letter, there is no publicly and formally announced rule or
regulation by any Governmental Entity that could reasonably be expected to
affect the various airworthiness or repair station approvals, licenses, permits,
qualifications or certifications applicable to the goods, services, assets,
facilities or operations of the TRW Participants, except to the extent that such
rules or regulations would not, individually or in the aggregate, have, and
would not reasonably be likely to have, a Material Adverse Effect.

     Section 4.22 Insurance. Section 4.22 of the TRW Disclosure Letter lists all
material insurance policies or contracts (or programs) of self-insurance owned
or held by any TRW Participant on the date hereof which cover the Business or
the Assets. All such insurance policies are in full force and effect, are valid
and enforceable, all premiums due thereunder have been paid and cover against
the risks of the nature

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normally insured against by entities in the same or similar lines of business in
coverage amounts typically and reasonable carried by such entities. In the last
two years, no TRW Participant has received notice of cancellation or termination
other than in connection with normal renewals, of any such insurance policies,
and no claim is pending as of the date of this Agreement under any insurance
policy involving an amount in excess of $750,000.

     Section 4.23 Inappropriate Payments. None of the TRW Participants nor, to
the knowledge of TRW, any of their respective officers, directors, principal
stockholders, employees, agents or representatives with respect to the Business
has knowingly violated any law relating to bribery, kickbacks, illegal political
contributions, payments from corporate funds to governmental officials, in their
individual capacities, for the purpose of affecting their action or the action
of the government they represent, to obtain favorable treatment in securing
business or licenses or to obtain special concessions, or illegal payments from
corporate funds to obtain or retain business.

     Section 4.24 Entire Business; Sufficiency of Assets. The sale of the Assets
by TRW and the Asset Selling Subsidiaries, together with the sale of the Equity
Interests by TRW and the TRW Selling Shareholders, to Buyer pursuant to this
Agreement will convey to Buyer the entire Business and all of the assets and
properties used or held for use (whether owned, leased or held under license)
primarily in connection with the operation of the Business as heretofore
conducted (except for the Retained Assets) including, without limitation, all
assets and properties relating to the Business reflected in the balance sheet of
the Business as of December 31, 2001 and assets and properties acquired since
December 31, 2001 in the conduct of the Business (except for the Retained Assets
and assets and properties disposed of since such date without violation of the
terms and provisions of this Agreement). Except as set forth in Section 4.24 of
the TRW Disclosure Letter and except for the Retained Assets (other than those
Retained Assets described in Section 2.3(b)(vii) hereof) as of the Closing Date,
the Assets will constitute all of the assets used by TRW immediately prior to
the Closing to conduct the Business as heretofore conducted, other than the
rights of Buyer under the Ancillary Agreements.

     Section 4.25 Brokers and Finders. Except for Goldman, Sachs & Co. and
Credit Suisse First Boston Corporation, whose fees and expenses will be paid by
TRW, none of the TRW Entities has employed any broker, financial advisor or
finder or incurred any liability for any broker, financial advisory or finders’
fees in connection with this Agreement or the transactions contemplated hereby.

     Section 4.26 No Other Representations and Warranties. No TRW Participant or
any other Person makes any other express or implied representation or warranty
on behalf of a TRW Participant or any of their Affiliates other than as
expressly set forth in this Article.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants to TRW as follows:

     Section 5.1 Organization and Existence. Buyer and each of Buyer’s
Affiliates who will participate in the transactions contemplated by this
Agreement is a legal entity duly established, validly existing and (where
applicable) in good standing under the laws of its jurisdiction of organization
or incorporation, as the case may be, and has all requisite power and authority
to own, lease and operate its properties and to conduct its business as it is
currently conducted, except where the failure to have such power and authority,
individually or in the aggregate, has not resulted in, and is not reasonably
likely to result in, a material adverse effect on Buyer’s ability to consummate
the transactions contemplated hereby. Buyer, and each of Buyer’s Affiliates who
will participate in the transactions contemplated by this Agreement, is duly
qualified or licensed to do business under the laws of each jurisdiction in
which the nature of the activities conducted by it makes such qualification
necessary, except where the failure to be so qualified or licensed, individually
or in the aggregate, has not resulted or is not reasonably likely to result, in
a material adverse effect on Buyer’s ability to consummate the transactions
contemplated hereby.

     Section 5.2 Power and Authority. Buyer, and each of Buyer’s Affiliates who
will participate in the transactions contemplated by this Agreement, has all
requisite corporate or other organizational power and authority to execute and
deliver, to perform its obligations under, and to consummate the transactions
contemplated by, this Agreement and the Ancillary Agreements to which it is a
party. Buyer, and each of Buyer’s Affiliates who will participate in the
transactions contemplated by this Agreement, has all requisite corporate or
other organizational power and, as of the Closing will have the corporate or
other organizational authority to execute and deliver, to perform its
obligations under, and to consummate the transactions contemplated by, this
Agreement and the Ancillary Agreements to which it is a party.

     Section 5.3 Authorization. The execution and delivery by Buyer (and each of
Buyer’s Affiliates who will participate in the transactions contemplated by this
Agreement) of, the performance by Buyer (and each of Buyer’s Affiliates who will
participate in the transactions contemplated by this Agreement) of its
obligations under, and the consummation by Buyer (and each of Buyer’s Affiliates
who will participate in the transactions contemplated by this Agreement) of the
transactions contemplated by this Agreement have been, and the other Ancillary
Agreements, as of the Closing, will be, duly authorized by all requisite
corporate or other organizational action of Buyer (and each of Buyer’s
Affiliates who will participate in the transactions contemplated by this
Agreement).

     Section 5.4 Binding Effect. This Agreement has been duly executed and
delivered by Buyer and is, and each Ancillary Agreement will be duly executed
and delivered by Buyer (and each of Buyer’s Affiliates who is a party to such
Ancillary

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Agreement) and when executed and delivered by all parties thereto will be, the
valid and binding obligation of Buyer (and as applicable, Buyer’s Affiliates),
enforceable against Buyer (and as applicable, Buyer’s Affiliates) in accordance
with their terms, assuming due authorization, executions and delivery by the
relevant TRW Entity.

     Section 5.5 No Defaults; Consents.

     (a)  Neither the execution and delivery of this Agreement or any Ancillary
Agreement, nor the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements, will violate, breach, contravene,
conflict with, result in the termination or acceleration of, entitle any party
to any payment under, entitle any party to exercise any right of first refusal,
first offer, preemptive right or other option right under, or otherwise
constitute or give rise to a Default under, as applicable, (i) any provision of
the articles of incorporation, the by-laws or similar organizational documents
of Buyer or any of Buyer’s Affiliates, (ii) any Contract or other instrument or
obligation to which Buyer or any of Buyer’s Affiliates is a party; or (iii) any
writ, injunction, decree, statute, rule or regulation applicable to Buyer or
Buyer’s Affiliates; except in the case of the foregoing clauses (ii) and (iii)
such violations, breaches, conflicts, terminations, accelerations, entitlements,
or Defaults which, individually or in the aggregate, have not resulted in, or
which would not reasonably be likely to result in, a material adverse effect on
Buyer’s ability to consummate the transactions contemplated hereby.

     (b)  No filing with or notice to, and no permit, authorization,
registration, consent or approval of, any Governmental Entity is required on the
part of Buyer or any of its Subsidiaries for the execution, delivery and
performance by Buyer of this Agreement or the consummation by Buyer of the
transactions contemplated hereby, except (i) the filing of a notification and
report form under the HSR Act and the termination or expiration of any waiting
period under the HSR Act, (ii) the filings, consents, approvals or clearances
required under any foreign antitrust or investment laws (including without
limitation under EU Merger Regulation) or (iii) where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or give
such notice would not have, individually or in the aggregate, a material adverse
effect on Buyer’s ability to consummate the transactions contemplate hereby.

     Section 5.6 Litigation. There are no judgments, decrees, orders, writs or
injunctions, nor any actions, claims, suits or proceeding before or involving
any Governmental Entity or private arbitration tribunal pending or, to the
knowledge of Buyer, threatened, against Buyer or any of Buyer’s Affiliates which
has resulted, or which would be reasonably likely to result, in a prohibition
against, or a material delay in completing, all or any part of the transactions
contemplated by this Agreement.

     Section 5.7 Financing. Buyer has or will have available, at or prior to
Closing, sufficient cash in immediately available funds to pay the Purchase
Price and necessary to consummate the transactions contemplated hereby. Buyer
has received the executed commitment letter attached to Schedule 5.7 hereof (the
“Commitment Letter”) with respect to the financing arrangements for the
transactions contemplated hereby (the “Financing”). As of the date of this
Agreement, the Commitment Letter is in full force

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and effect and has not been amended or rescinded. The aggregate proceeds of the
Financing provided for in the Commitment Letter, together with available cash
and other credit facilities available to Buyer, will be sufficient to pay the
Purchase Price and satisfy the other obligations of Buyer and its Affiliates
necessary to consummate the transactions contemplated hereby. As of the date
hereof, Buyer believes that such Financing will be obtained.

     Section 5.8 Brokers or Finders. Except for Merrill Lynch, whose fees and
expenses will be paid by Buyer, neither Buyer, nor any Affiliate thereof, has
employed any broker, financial advisor or finder or incurred any liability for
any broker, financial advisory or finders’ fees in connection with this
Agreement or the transactions contemplated hereby.

     Section 5.9 Investment Representations.

     (a)  Buyer is acquiring the Equity Interests to be acquired by it hereunder
for its own account, solely for the purpose of investment and not with a view
to, or for sale in connection with, any distribution thereof in violation of the
federal securities laws or any applicable foreign or state securities law.

     (b)  Buyer is an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act of 1933, as amended.

     (c)  Buyer understands that the acquisition of the Equity Interests to be
acquired by it pursuant to the terms of this Agreement involves substantial
risk. Buyer and its officers have experience as an investor in securities and
Equity Interests of companies such as the ones being transferred pursuant to
this Agreement and acknowledges that it can bear the economic risk of its
investment and has such knowledge and experience in financial or business
matters that Buyer is capable of evaluating the merits and risks of its
investment in the Equity Interests to be acquired by it pursuant to the
transactions contemplated hereby.

     (d)  Buyer understands that the Equity Interests to be acquired by it
hereunder have not been registered under the Securities Act on the basis that
the sale provided for in this Agreement is exempt from the registration
provisions thereof. Buyer acknowledges that such securities may not be
transferred or sold except pursuant to the registration and other provisions of
applicable securities laws or pursuant to an applicable exemption therefrom.

     (e)  Buyer acknowledges that the offer and sale of the Equity Interests to
be acquired by it in the transactions contemplated hereby has not been
accomplished by the publication of any advertisement.

     Section 5.10 No Other Representations and Warranties. Except for the
representations and warranties contained in this Article V, neither Buyer nor
any other Person makes any other express or implied representation or warranty
on behalf of Buyer or any of its Affiliates.

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     Section 5.11 Certain Transactions. There are no existing agreements or
arrangements pursuant to which Buyer will divest or otherwise dispose of the
assets of or equity in, or by any other manner, the Business, except as set
forth in Sections 6.3 and 6.4.

ARTICLE VI

COVENANTS

     Section 6.1 Conduct of the Business.

     (a)  During the period from the date hereof until the Closing, except as
otherwise provided for in this Agreement or any Ancillary Agreement or with the
prior written consent of Buyer (which consent shall not be unreasonably withheld
or delayed), TRW shall, and shall cause each of the other TRW Participants
(other than the Spanish Affiliate), and will use its reasonable best efforts to
cause the Spanish Affiliate (including by not providing consent to an action
that would otherwise be prohibited by this Section 6.1) to, (1) operate the
Business in the ordinary course consistent with past practice; (2) maintain the
existing assets of the Business in the ordinary course consistent with past
practice and (3) use reasonable best efforts, generally consistent with existing
practices, to keep available the services of employees and preserve
relationships with all key customers, suppliers, licensors, licensees,
distributors, creditors and other Persons having business dealings with the
Business in order to preserve, in all material respects, the goodwill and
ongoing operations of the Business at the Closing. Except (a) for actions
necessary to effectuate the Preliminary Transfers, (b) for actions permitted
pursuant to the first sentence of this Section 6.1(a), and (c) as set forth in
Schedule 6.1(a) hereof, TRW shall not, and shall cause the other TRW
Participants (other than the Spanish Affiliate, for which TRW shall use its
reasonable best efforts to cause the Spanish Affiliate) not to (in each case
only with respect to the Business):

       (i) enter into any sale commitment in excess of $10 million or purchase
commitment in excess of $5 million;

       (ii) other than in the ordinary course of business consistent with past
practice, sell, transfer, lease, sublease, license or otherwise dispose of any
real property, real property interest, personal property (tangible or
intangible) or any other material asset that would otherwise be an Acquired
Asset or any asset of any Aerospace Subsidiary (or Subsidiary thereof) or any
Aerospace Affiliate (or Subsidiary thereof);

       (iii) enter into any lease of real property or any renewals thereof
involving a term of one (1) year or more;

       (iv) enter into any lease of personal property or any renewals thereof
involving a term of one (1) year or more, other than in the ordinary course of
business, consistent with past practice;

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       (v) other than in the ordinary course of business consistent with past
practice, enter into any transaction, contract or commitment or otherwise incur
any obligation or liability that would constitute an Assumed Liability;    
     (vi) abandon, sell, license, assign, or grant any security interest in or
to any material item of the Business Intellectual Property other than in the
ordinary course of business;          (vii) fail to perform or cause to be
performed all applicable material filings, recordings and other acts, and pay or
cause to be paid all required fees and taxes, to maintain and protect its
interest, in each and every material item of the Business Intellectual Property,
except where it has been determined by a TRW Entity in the ordinary course of
business, not to maintain or protect such interests;          (viii) (A) grant
any increase in compensation or benefits or make any bonus payments to any of
its directors, officers, employees or consultants except in the ordinary course
of business consistent with past practice, (B) adopt or amend (or otherwise
increase or accelerate the vesting of benefits or severance with respect to or
make any payment not otherwise due to) any employee benefit plan, agreement or
arrangement with or for the benefit of any of its directors, officers, employees
or consultants that Buyer could assume or employ as of the Closing Date pursuant
to this Agreement, or (C) take any action that could give rise to severance
benefits payable to any employee as a result of consummation of any of the
transactions contemplated by this Agreement except in each case (x) as required
by contractual commitments existing on the date hereof and(y) as required by
applicable law;          (ix) except in the ordinary course of business, permit
or allow any Acquired Asset or any asset of any Aerospace Subsidiary (or
Subsidiary thereof) or any Aerospace Affiliate (or Subsidiary thereof) to be
subjected to any Lien, other than Permitted Liens, Permitted Encumbrances and
material Liens that will be released at or prior to the Closing;    
     (x) make any material change in any method of accounting or accounting
practice or policy used by the TRW Entities, other than such changes required by
GAAP or applicable law;          (xi) except in the ordinary course of business
consistent with past practice, enter into, modify, extend or terminate any
Material Contract or enter into a Contract that would be a Material Contract if
in existence on the date hereof; provided that in no event shall any TRW
Participant or any Affiliate thereof enter into any new hedging Contract (other
than a replacement of any existing hedging Contract, on the same

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  economic terms and conditions, that is entered into in connection with
transferring the hedging Contracts that primarily relate to the Business to
Buyer);          (xii) settle any suit, claim, action or proceeding, whether
pending on the date hereof or hereafter made or brought if such settlement
contains injunctive, equitable or other provisions that affect the ongoing
operation of the Business;          (xiii) with respect to any Aerospace
Subsidiary (or Subsidiary thereof) or any Aerospace Affiliate (or Subsidiary
thereof), (A) redeem, purchase or otherwise acquire any shares of its capital
stock or any securities or obligations convertible into or exchangeable for any
shares of its capital stock, or any options, warrants or conversion or other
rights to acquire any shares of its capital stock or any such securities or
obligations; (B) effect any reorganization or recapitalization; (C) split,
combine or reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock; or (D) issue, deliver, or sell,
or authorize or propose the issuance, delivery or sale (including the grant of
any encumbrance) of, any shares of any class of its capital stock (including
shares held in treasury), any securities convertible into or exercisable or
exchangeable for any such shares, any notes, bonds or other securities or any
rights, warrants or options to acquire same or any other interest;    
     (xiv) merge with, enter into a consolidation with or acquire an interest of
5% or more in any Person or acquire substantially all of the assets or business
of any Person;          (xv) make any capital expenditure or commitment for any
capital expenditure in excess of $1 million individually;
provided, however, that the Business can make any capital expenditures or
commitments that are reflected in its 2002 Capital Expenditure Plan, a true,
accurate and complete copy of which is set forth on Schedule 6.1(a)(xv);    
     (xvi) permit any Aerospace Subsidiary or Aerospace Affiliate, or any of
their respective Subsidiaries to incur or guarantee additional indebtedness for
borrowed money individually in excess of $1 million individually; provided that
this restriction shall not apply to the Spanish Affiliate to the extent that the
Spanish Affiliate may incur or guarantee such additional indebtedness without
the consent of TRW;          (xvii) except as otherwise explicitly permitted by
this Agreement or required by applicable law, amend or restate the certificate
of incorporation or by-laws (or other organizational documents) of any

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  Aerospace Subsidiary or Aerospace Affiliate, or any of their respective
Subsidiaries; provided that this restriction shall not apply to the Spanish
Affiliate to the extent that the Spanish Affiliate may amend or restate such
organizational documents without the consent of TRW;          (xviii) take or
agree or commit to take any action that would make any representation or
warranty of TRW under this Agreement inaccurate in any material respect, at, or
as of any time prior to, the Closing Date or that would, or would be reasonably
likely to, result in any of the conditions set forth in Article VII not being
satisfied on the Closing Date
(provided, however that a breach of this covenant shall only be considered a
breach of representation and warranty for purposes of Article IX); and    
     (xix) agree, commit or resolve to do any of the foregoing.

Notwithstanding the foregoing, during the thirty (30) Business Days immediately
preceding the anticipated Closing Date, TRW shall, and shall cause all TRW
Participants to, settle intercompany accounts payable and accounts receivable
and arrange for the termination of other matters as contemplated by this
Agreement, including Sections 2.3 and 2.4 hereof. TRW shall determine the method
by which such intercompany accounts are eliminated including, but not limited
to, by means of setoff, settlement or capital contribution. TRW shall terminate
the involvement of the Business in TRW’s accounts receivable securitization
program, terminate the related security interests, and have the previously
transferred receivables transferred back to the Business prior to the Closing.

     (b)  Promptly following the date hereof, Buyer shall appoint a
representative who shall have authority to respond to any request for consent to
a TRW Participant taking an action that would otherwise be prohibited by
Section 6.1(a) hereof. Promptly following the appointment of such
representative, Buyer shall provide TRW with the name and contact information
for such representative.

     Section 6.2 Access to Information.

     (a)  TRW shall permit, and shall cause the other TRW Participants to
permit, to the extent permitted by law, Buyer and any of its agents,
representatives, advisors and consultants to have reasonable access to the
premises taking into account, among other things, the level of disruption to the
operations at any facility, the number of employees at such facility and the
size of such facility, and reasonable access to the non-privileged books and
records of the TRW Participants related to the Business (including records and
files relating to Taxes), and to the officers and employees of the TRW Entities
with knowledge of the whereabouts and/or contents of such books and records;
provided, such access does not interfere with the conduct of, or otherwise
disrupt, the Business or the other businesses of TRW and is consistent with
applicable laws and regulations (including, without limitation, industrial
security and export control laws and regulations); provided, further, that any
such access shall occur after reasonable notice and during normal business
hours. In an effort to prevent any interference or disruption caused by such
access, TRW may, at its sole discretion, reasonably limit the number of

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individuals and the number of visits to its facilities. Buyer shall coordinate
all such access with a TRW employee who will be identified to Buyer promptly
after the execution of this Agreement, and shall not directly or indirectly
contact any other employee of TRW or of the Business without the prior approval
of the designated employee.

     (b)  Any information regarding the Business or Assets heretofore or
hereafter obtained from TRW or its Subsidiaries or Affiliates by Buyer or their
representatives shall be subject to the terms of the Confidentiality Agreement,
and such information shall be held in confidence by Buyer and its
representatives in accordance with the terms of the Confidentiality Agreement.

     (c)  If requested by Buyer, TRW shall allow Ernst & Young LLP personnel who
are familiar with the Business, on behalf of Buyer, to conduct as promptly as
practicable following the Closing Date an audit of the financial statements of
the Business as of, and for the twelve months ended, December 31, 2000 and
December 31, 2001, and shall cooperate with the conduct of such audit. The cost
of such audit shall be borne by Buyer.

     Section 6.3 Reasonable Best Efforts.

     (a)  Upon the terms and subject to the conditions of this Agreement and the
Ancillary Agreements, each of the parties hereto shall use its reasonable best
efforts to take, or cause to be taken, all appropriate actions, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement and the Ancillary Agreements as promptly as
practicable including, without limitation, (i) subject to Section 6.4, the
preparation and filing of all forms, registrations and notices required to be
filed to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements and the taking of such actions as are necessary to obtain
any requisite approvals, consents, orders, exemptions or waivers by any third
party or Governmental Entity and (ii) using their reasonable best efforts to
cause the satisfaction of all conditions to Closing. Subject to Section 6.4,
each party shall promptly consult with the other with respect to, provide any
necessary information with respect to, and provide copies of all filings made by
such party with any Governmental Entity or any other information supplied by
such party to a Governmental Entity in connection with this Agreement and the
Ancillary Agreements and the transactions contemplated hereby and thereby.
Subject to Section 6.4, TRW and Buyer shall, and shall cause their respective
Affiliates to, with respect to a threatened or pending preliminary or permanent
injunction or other order, decree or ruling or statute, rule, regulation or
executive order that would adversely affect the ability of any party to this
Agreement or an Ancillary Agreement to consummate the transactions contemplated
hereby or thereby, use their respective reasonable best efforts to prevent the
entry, enactment or promulgation thereof, as the case may be (including by
pursuing any available appeal process).

     (b)  Subject to Section 6.4, each party hereto shall promptly inform the
other of any communication from any Governmental Entity regarding any of the
transactions contemplated by this Agreement and the Ancillary Agreements.
Subject to

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Section 6.4, if any party or Affiliate thereof receives a request for additional
information or documentary material from any such Governmental Entity with
respect to the transactions contemplated by this Agreement, then such party will
use its reasonable best efforts to make, or cause to be made, as soon as
practicable and after consultation with the other party, an appropriate response
in compliance with such request.

     (c)  Neither this Section 6.3 nor Section 6.4 shall be deemed to require
any party hereto to sell or otherwise dispose, hold separate, agree to sell or
otherwise dispose of any assets or facilities, or to take any other actions
affecting, or accept any limitations on, its ability, the ability of its
Affiliates or the ability of the Business, to own their respective assets or
conduct their respective businesses substantially as currently conducted or
proposed to be conducted, which, if such actions or limitations were with
respect to a comparable amount of assets, businesses or product lines of the
Business would be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect on the Business. Any action or limitation contemplated
by this Section 6.3 or by Section 6.4 affecting the ability of TRW, Buyer or
their Affiliates, to own their respective assets or conduct their respective
businesses substantially as currently conducted or proposed to be conducted
shall not be required to be effective prior to the Closing.

     Section 6.4 Consents and Approvals.

     (a)  Without limiting the generality of the undertakings pursuant to
Section 6.3 and subsections (b) and (c) of this Section 6.4 and upon the terms
and subject to the conditions herein provided, each of TRW and Buyer shall use
its reasonable best efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary under applicable antitrust laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, (i) to comply promptly with all
legal requirements which may be imposed on it with respect to this Agreement and
the transactions contemplated hereby by any Governmental Entities with
regulatory jurisdiction over enforcement of any applicable antitrust laws
(“Governmental Antitrust Entity”) (which actions shall include, without
limitation, furnishing all information required by applicable law in connection
with approvals of or filings with any Governmental Antitrust Entity), including
filing, or causing to be filed, as promptly as practicable, any required
notification and report forms (x) under the HSR Act with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
or (y) under other applicable non-U.S. laws with the applicable non-U.S.
Governmental Antitrust Entities including without limitation filings required
pursuant to the EU Merger Regulation, (ii) to obtain any consent, authorization,
order or approval of, or any exemption by, any Governmental Antitrust Entity
required to be obtained or made by TRW and Buyer, or any of their Subsidiaries
or Affiliates in connection with the transaction contemplated by this Agreement
or the taking of any action contemplated by this Agreement, and (iii) to take
any action reasonably necessary to defend vigorously, lift, mitigate or, rescind
the effect of any litigation or administrative proceeding involving any
Governmental Antitrust Entity adversely affecting the transaction contemplated
by this Agreement or this Agreement, including promptly appealing any adverse
court or administrative decision. Without limitation of the foregoing, TRW,
Buyer and their respective Affiliates shall not extend any waiting period

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under the HSR Act, the EU Merger Regulation or any other foreign antitrust
merger control laws or enter into any agreement with the FTC or the Antitrust
Division not to consummate the transactions contemplated by this Agreement,
except with the prior written consent of the other parties hereto.

     (b)  Without limiting the generality of the undertakings pursuant to
Section 6.3 and subsections (a) and (c) of this Section 6.4 and subject to
appropriate confidentiality protections, TRW and Buyer shall each furnish to the
other such necessary information and reasonable assistance as the other party
may request in connection with the foregoing and, shall each provide counsel for
the other party with copies of all filings made by such party, and all
correspondence between such party (and its advisors) with any Governmental
Antitrust Entity and any other information supplied by such party and such
party’s Affiliates to a Governmental Antitrust Entity in connection with this
Agreement and the transactions contemplated hereby, provided, however, that
materials may be redacted (i) to remove references concerning the valuation of
the Business and (ii) as necessary to comply with contractual arrangements. Each
party shall, subject to applicable law permit counsel for the other party to
review in advance, and consider in good faith the views of the other party in
connection with, any proposed written communication to any Governmental
Antitrust Entity. TRW and Buyer agree not to participate, or to permit their
affiliates to participate, in any substantive meeting or discussion, either in
person or by telephone, with any Governmental Antitrust Entity in connection
with this Agreement and the transactions contemplated hereby unless it consults
with the other party in advance and, to the extent not prohibited by such
Governmental Antitrust Entity, gives the other party the opportunity to attend
and participate. Upon the terms and subject to the conditions herein  provided,
in case at any time after the Closing Date any further action is necessary or
desirable to secure the approvals from any and all Governmental Antitrust
Entities necessary to carry out the purposes of this Agreement, the proper
officers and/or directors of the parties shall use their best efforts to take or
cause to be taken all such necessary action.

     (c) Consistent with the undertakings pursuant to Section 6.3 and
subsections (a) and (b) of this Section 6.4, TRW and Buyer agree to take or
cause to be taken the following actions: (i) provide as promptly as practicable
information and documents requested by any Governmental Antitrust Entity
necessary, proper or advisable to permit consummation of the transactions
contemplated by this Agreement; (ii) without in any way limiting the provisions
of (c)(i) above, use its best efforts to certify as soon as practicable their
substantial compliance with any requests for additional information or
documentary material that may be made under the HSR Act; and (iii) take
promptly, in the event that any permanent or preliminary injunction or other
order is entered or becomes reasonably foreseeable to be entered in any
proceeding that would make consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements in accordance with the terms thereof
unlawful or that would prevent or delay consummation of any such transactions,
any and all steps (including the appeal thereof and the posting of a bond)
necessary to vacate, modify or suspend such injunction or order so as to permit
such consummation on a schedule as close as possible to that contemplated by
this Agreement.

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     Section 6.5 Further Assurances.

     (a)  Subject to Section 6.5(b), on and after the Closing Date, TRW and
Buyer shall cooperate and use their respective reasonable best efforts to take
or cause to be taken all appropriate actions and do, or cause to be done, all
things necessary or appropriate to consummate and make effective the
transactions contemplated hereby, including the execution of any additional
documents or instruments of any kind, the obtaining of consents which may be
reasonably necessary or appropriate to carry out any of the provisions hereof
and the taking of all such other actions as such party may reasonably be
requested to take by the other party hereto from time to time, consistent with
the terms of this Agreement and the Ancillary Agreements, in order to effectuate
the provisions and purposes of this Agreement and the Ancillary Agreements and
the transactions contemplated hereby and thereby.

     (b)  Notwithstanding subsection (a), nothing in this Agreement shall be
deemed to require the conveyance, assignment or transfer of any Asset that by
its terms or by operation of applicable law cannot be freely conveyed, assigned,
transferred or assumed. To the extent a party hereto has been unable to obtain
any governmental or any third party consents or approvals required under
applicable law for the transfer of any Asset and to the extent not otherwise
prohibited by the terms of any Asset, TRW and its Affiliates shall continue to
be bound by the terms of such applicable Asset and Buyer shall pay, perform and
discharge fully all of the obligations of TRW and its Affiliates thereunder from
and after the Closing to the extent that the corresponding benefit is received.
TRW shall, without consideration therefor, pay, assign and remit to Buyer
promptly all monies, rights and other consideration received in respect of such
performance. To the extent permitted by law, TRW and its Affiliates shall
exercise or exploit their rights in respect of such Assets only as reasonably
directed by Buyer and at Buyer’s expense. Each party hereto shall continue to
use reasonable best efforts to obtain all such unobtained consents or approvals
required to be obtained by it at the earliest practicable date; provided that
neither TRW, Buyer nor any of their Affiliates or Subsidiaries shall be required
to pay any consideration, other than a de minimus amount, in connection with
such consents or approvals. If and when any such consents or approvals shall be
obtained, then TRW and its Affiliates shall promptly assign their rights and
obligations thereunder to Buyer without payment of consideration and Buyer
shall, without the payment of any consideration therefor, assume such rights and
obligations. Each party shall execute such good and sufficient instruments as
may be necessary to evidence such assignment and assumption.

     Section 6.6 Property Transfer Taxes; Other Expenses; Bulk Transfer Laws.

     (a)  The payment of fees, charges, Taxes or other payments (including, any
notary and registration fees) required to be made by TRW or Buyer to any Tax
Authority or other Person in connection with the transfer of the Assets,
including by way of license, pursuant to the terms of the Agreement shall be
treated as follows:

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       (i) Buyer and TRW shall each pay or cause to be paid, and shall
indemnify, defend and hold harmless the other for, one half of any and all real
property, transfer, personal property, sales and use, value added, stamp taxes,
documentary taxes and similar Taxes (including any Taxes imposed by way of
withholding) and notary fees (“Transfer Taxes”) attributable to the transactions
contemplated by this Agreement; provided, however, that TRW shall pay or cause
to be paid and indemnify, defend and hold harmless Buyer against any and all
Restructuring Taxes and any and all UK stamp duties and stamp Taxes that relate
to the transactions described in Schedule 2.1;          (ii) TRW, on the one
hand, and Buyer, on the other hand, shall each pay or cause to be paid, and
shall indemnify, defend and hold harmless the other for, their own expenses in
connection with the filings and other actions necessary for compliance with the
HSR Act and other any regulatory filings (provided, however, that Buyer shall
pay all governmental fees and charges imposed with respect to such regulatory
filings);          (iii) each of TRW and Buyer shall pay or cause to be paid,
and shall indemnify and hold harmless the other party for, any such other fees,
charges or the other payments for which such party is legally responsible under
applicable law and which are not covered by clauses (i) and (ii); and    
     (iv) TRW and Buyer shall cooperate and work together as the parties may
mutually agree in the future to reduce or to obtain exemption where available
from sales and use, value added, goods and services taxes and any other Transfer
Tax. In addition, TRW and Buyer agree that the transfer of the Acquired Assets
in each country constitutes the transfer of a going concern in each country for
purposes of obtaining exemption as such from any sales and use, value added,
goods and services taxes and other Transfer Taxes.

     (b)  Each of TRW and Buyer will be responsible for the preparation and
filing of any Tax Return with respect to any Transfer Taxes for which such party
is legally responsible under applicable law. The non-filing party shall pay the
other the amount of any Transfer Taxes shown due on any Tax Return relating to
Transfer Taxes for which such party is liable under Section 6.6(a)(i) of this
Agreement within three (3) Business Days of demand by the filing party.

     Section 6.7 Publicity. Except as otherwise required by law or court process
or by any listing agreement with a national securities exchange or trading
market, until the Closing, or the date the Agreement is terminated pursuant to
Article VIII, TRW and Buyer shall not, and each of them shall cause their
respective officers, directors, partners, Affiliates, representatives and agents
not to, disclose or cause the disclosure of information, or issue or cause the
publication of the initial press release or public

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announcement, with respect to the transactions contemplated by this Agreement or
any Ancillary Agreement, without the prior review and approval thereof by the
other party hereto, such approval not to be unreasonably withheld. All
subsequent press releases or public announcements by any party hereto with
respect to the transactions contemplated by this Agreement or any Ancillary
Agreement require consultation, to the extent practicable, with the other party
hereto. Nothing in this Section 6.7 shall restrict TRW from disclosing
information with respect to the transactions contemplated by this Agreement or
any Ancillary Agreement to a third party who may engage in a business
combination transaction resulting in the acquisition (by purchase or otherwise)
of all or substantially all of the capital stock or assets of TRW; provided that
such third party is subject to a customary confidentiality agreement.

     Section 6.8 Employees and Employee Benefit Plans.

     (a)  General. For purposes hereof, (i) “Affected Employees” shall mean
those current employees of the Business (including those employees who are on
vacation, approved leave of absence, lay-off status or short-term disability and
excluding those on long-term disability) as of the Closing Date; (ii)
“Regulations” shall mean Section 18A of the Employment Act Cap. 91 of Singapore,
the Transfer of Undertakings (Protection of Employment) Regulations 1981, as
amended, or Section L122-12, paragraph 2 of the French Labor Code, as amended,
or Section 613a of the Civil Code of Germany, as amended; and (iii) “Aerospace
Employee” shall mean any Affected Employee employed by the Aerospace
Subsidiaries or by the Aerospace Affiliates as of the Closing Date, but
specifically excluding the UK-based Affected Employees (“UK Affected
Employees”).

     (b)  Transferred Employees. The parties hereto intend that there will be a
continuity of employment for all Affected Employees following the Closing Date,
except for the persons identified on Schedule 6.8(b) hereof as expressly
excluded and persons on extended leaves of absence as specifically referred to
herein. In order to effectuate such transfer of employment as of the Closing
Date, except as otherwise provided herein, Buyer shall make a general offer of
employment on terms no less favorable than the employees’ current conditions of
employment in the aggregate, provided that, unless required by applicable law or
otherwise provided for herein, Buyer shall not be obligated to continue such
terms beyond the Closing Date, through a general notice of transfer (pursuant to
methodologies mutually agreed upon by TRW and Buyer) to each Affected Employee
who is not an Aerospace Employee or a U.K. Affected Employee, and who will not
become an employee of Buyer by operation of the Regulations and who is not
identified on Schedule 6.8(b) (each an “Offer Employee”). Such general offer of
employment will be deemed accepted by each Offer Employee unless (A) expressly
rejected by the Offer Employee prior to the Closing Date or (B) if the Offer
Employee otherwise indicates by his or her actions that such offer of employment
has not been accepted and Buyer notifies TRW within 30 days following the
Closing Date of such non-acceptance of the offer (each Offer Employee who acts
under (A) or (B), a “Non-Acceptance Offer Employee”). For purposes of this
Agreement, “Transferred Employee” shall mean (i) each Offer Employee other than
a Non-Acceptance Offer Employee; provided that, in the case of Offer Employees
on short term

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disability or other approved leaves of absence, such employees must commence
service with Buyer prior to the six-month anniversary of the Closing Date to
become Transferred Employees; (ii) each Affected Employee whose employment
transfers to Buyer pursuant to operation of Regulations and (iii) each Affected
Employee who is a UK Affected Employee or an Aerospace Employee. Any Affected
Employee who does not commence employment with Buyer as described above shall
not be treated as a Transferred Employee. Except as otherwise provided in this
Section 6.8, all Transferred Employees will cease to accrue benefits under and
participate as active participants in all Plans (that are not Assumed Plans) as
of the Closing Date. The parties will cooperate to comply with legal and
regulatory requirements to accomplish the employment transfers described in this
Section 6.8, including without limitation any requirements for TRW to terminate
the employment of any Affected Employee and for Buyer to make a specific
employment offer to such Affected Employees, and TRW will transfer (at TRW’s
cost and expense) any work permits or passes applicable to the Affected
Employees who receive offers to become Transferred Employees. No later than
30 days after the date of this Agreement, TRW shall provide Buyer with respect
to each Affected Employee (i) years of service; (ii) job title; (iii) base
salary or current wages; (iv) date of hire; (v) employment status; and (vi) work
location. TRW shall update the information required to be provided by the
preceding sentence and shall deliver such updated information to Buyer no later
than 15 days prior to the Closing Date.

     (c)  Pre-Closing Welfare Benefits. Notwithstanding anything in this
Agreement to the contrary, TRW and the Asset Selling Subsidiaries shall be
solely responsible for (A) claims for the type of benefits described in Section
3(1) of ERISA (whether or not covered by ERISA) (“Welfare Benefits”) that are
incurred by or with respect to any Affected Employee (other than an Aerospace
Employee) and his or her beneficiaries or dependents on or before the Closing
Date and (B) claims relating to COBRA continuation coverage attributable to
“qualifying events” with respect to any Affected Employee (other than an
Aerospace Employee) and his or her beneficiaries and dependents that occur on or
before the Closing Date. For purposes of the foregoing, a medical/dental claim
shall be considered incurred when the services are rendered, the supplies are
provided or medications are prescribed, and not when the condition arose;
provided that claims relating to a hospital confinement that begins on or before
the Closing Date but continues thereafter shall be treated as incurred on or
before the Closing Date. A disability claim shall be considered incurred on or
before the Closing Date if the injury or illness resulting in such disability
occurs on or prior to the Closing Date.

     (d)  US Transferred Employees. The provisions of this Section 6.8(d) apply
only to US-based Transferred Employees (“US Transferred Employees”).

       (i) Workers’ Compensation. TRW will bear the entire cost and expense of
all workers’ compensation claims arising out of injuries identifiably sustained
by US Transferred Employees on or before the Closing. Buyer will bear the entire
cost and expense of all workers’ compensation claims arising out of injuries
identifiably sustained by US Transferred Employees after the Closing. TRW will
bear the entire cost and expense of all workers’ compensation claims arising out
of injuries

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  without an identifiable date of occurrence and which are alleged to have
arisen either before or before and after the Closing which are filed within
sixty (60) calendar days after the Closing Date. Buyer shall bear the entire
cost and expense of all workers’ compensation claims arising out of injuries
sustained by US Transferred Employees without an identifiable date of occurrence
and which are alleged to have arisen either before or before and after the
Closing which are filed more than sixty (60) calendar days after the Closing
Date. From and after the Closing, Buyer will use its reasonable efforts to
facilitate the return to work of any Transferred Employees who were on
disability leave on the Closing Date as a result of a work-related injury or
illness.          (ii) Non-Represented Employees. The following provisions of
this Section 6.8(d)(ii) shall apply only to US Transferred Employees whose terms
of employment are not governed by a collective bargaining agreement
(“Non-Represented Employees”).

       (A) Buyer is not assuming, and will not have liability for the
continuation of, or any liability for claims under, any Plan (other than the
Assumed Plans and, to the extent of liabilities assumed in connection with the
receipt of assets as provided in this Section 6.8, the Business Plans)
applicable to Non-Represented Employees, and Buyer will not be deemed a
successor employer to TRW and any Asset Selling Subsidiary with respect to any
such Plan. No Plan adopted or maintained by Buyer with respect to the
Non-Represented Employees will be deemed a successor plan of any plan maintained
or adopted by TRW or an Asset Selling Subsidiary.          (B) No assets held in
trust for any Plan (other than the TRW Salaried Pension Plan ) applicable to the
Non-Represented Employees, specifically including but not limited to, , the
Lucas Retirement Account Plan and the TRW Employee Stock Ownership and Savings
Plan (“Stock Savings Plan”), will be transferred to Buyer or to any Plan adopted
or maintained by Buyer.          (C) From the Closing Date until the first
anniversary thereof, Buyer will provide all Non-Represented Employees with
benefits (including, if so determined by Buyer, defined benefit pension plans
and defined contribution pension plans) that are comparable in the aggregate to
those maintained by TRW for the Non-Represented Employees prior to the Closing;
provided, however, without limiting the generality of the foregoing, Buyer shall
not be required to provide equity-based compensation or post-retirement medical,
dental or other post-retirement welfare benefits to any person. Buyer will waive
any

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  pre-existing condition exclusions otherwise applicable to the Non-Represented
Employees under any benefit plan of Buyer providing medical, dental and vision
benefits in which such Non-Represented Employee becomes eligible to participate
(“Medical Plans”), and will credit all payments made by each Non-Represented
Employee against annual deductibles and out-of-pocket maximums under Medical
Plans prior to the Closing Date to the annual deductibles and out-of-pocket
maximums under the Buyer’s Medical Plans. Buyer will give each Non-Represented
Employee credit for such employee’s service with TRW or any Asset Selling
Subsidiary prior to the Closing Date (to the extent recognized by TRW or the
Asset Selling Subsidiaries, as applicable, under their respective plans) only
for purposes of any participation requirement and for vesting (but not for
benefit accrual purposes, or to the extent such treatment would result in a
duplication of benefits or a duplicative accrual on or after the Closing Date of
benefits for the same period of service, or to the extent such service is prior
to a specific date before which service would not have been credited for
employees of Buyer) under any defined benefit pension plan and defined
contribution savings plan of Buyer in which such Non-Represented Employee
becomes eligible to participate. Except as otherwise provided herein, TRW and
Buyer reserve the right to establish, eliminate or change any employee benefit
plans in the future when and as they deem appropriate.          (D) TRW will
provide Non-Represented Employees who, prior to the Closing, have met the
requirements for retiree medical under TRW’s retiree medical plan with benefit
coverage under the TRW Retiree Select Medical Plan upon their retirement from
Buyer and will provide retired employees of the Business immediately prior to
the Closing with retiree medical plan benefit coverage under TRW’s Retire Select
Medical Plan if such employees have met the requirements for such coverage.

       (iii) Represented Employees. The following provisions of this
Section 6.8(d)(iii) shall apply only to Transferred Employees whose terms of
employment are governed by a collective bargaining agreement listed on
Schedule 6.8(d)(iii) (“Represented Employees”).

       (A) Buyer shall assume the collective bargaining agreements applicable to
the Represented Employees as of the Closing and shall continue all terms and
conditions of employment under such assumed collective bargaining agreements
through the expiration or other termination of such agreements in conformity
with labor laws and regulations of the applicable country. Buyer and TRW shall
take all steps necessary under ERISA Section 4204 so that the transaction
contemplated by this Agreement will not

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  constitute a partial or complete withdrawal under section 4201 of ERISA, other
than the posting of any bond, escrow or other security. If Buyer withdraws in a
complete or partial withdrawal with respect to the Business during the five-year
period following the Closing, TRW will be secondarily liable for any withdrawal
liability it would have had if it had withdrawn as of the Closing Date, to the
extent Buyer fails to satisfy such liability upon Buyer’s complete or partial
withdrawal.

       (B) Certain of the Aerospace Subsidiaries and Aerospace Affiliates
maintain defined benefit plans (the “Hourly Defined Benefit Plans”) for the
benefit of their Affected Employees covered by collective bargaining agreements,
all of the assets for which are held in the TRW Master Trust (the “Master
Trust”). At the Closing, Buyer shall assume all of the relevant TRW Subsidiary’s
obligations and liabilities, and acquire all of the relevant TRW Subsidiary’s
right, title and interests in, to and under the Hourly Defined Benefit Plans by
adopting, effective as of the Closing Date, the Hourly Defined Benefit Plans;
provided that TRW will continue to be responsible for the payment of benefits
from the Hourly Defined Benefit Plans until the transfer described in this
Section 6.8(d)(ii)(B) is made. Participation in the Hourly Defined Benefit
Plans, as adopted by Buyer, by the Transferred Employees participating
thereunder shall not be deemed terminated, nor shall their employment be deemed
otherwise interrupted for purposes of the Hourly Defined Benefit Plans, as
adopted by Buyer, by reason of the transactions contemplated under this
Agreement and notwithstanding anything in the Agreements to the contrary, the
Transferred Employees shall maintain their service credit under the Hourly
Defined Benefit Plan for benefit accrual purposes. Buyer shall, prior to or at
the Closing, complete all actions as shall be necessary or desirable to evidence
its sponsorship of the Hourly Defined Benefit Plans and the assumption of the
ongoing administration and management of such Plans, including establishing or
designating one or more successor trusts for the maintenance of the Hourly
Defined Benefit Plans’ assets. As soon as administratively possible after
receipt by TRW of evidence that Buyer has taken the actions required by this
Section 6.8(d)(iii)(B), TRW shall cause cash (or property in kind, if reasonably
requested by Buyer and approved by TRW, which approval shall not be unreasonably
withheld) equal to the fair market value, as of the date immediately preceding
the date of transfer, of the assets attributable to the Hourly Defined Benefit
Plans held by the TRW master trustee to be transferred to the successor trust or
trusts established by Buyer.

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       (C) Certain of the Aerospace Subsidiaries in the United States maintain
the retiree medical plans set forth on Schedule 6.8(d)(iii)(C) (the “Hourly
Retiree Medical Plans”), providing medical benefits to retirees and their
eligible beneficiaries. At the Closing, Buyer shall assume all of TRW’s
obligations and liabilities under the Hourly Retiree Medical Plans with respect
to Non-Represented Employees. TRW will provide retired employees of the Business
immediately prior to the Closing with retiree medical plan benefit coverage
under the Hourly Retiree Medical Plans if such former employees meet the
requirements for coverage.

       (D) Lucas Western Inc. sponsors and maintains the Lucas Western Inc.
401(k) Plan for the benefit of the Represented Employees at its Diamond Bar,
California facility (the “Union 401(k) Plan”). Buyer shall assume all of Lucas
Western Inc.’s obligations and liabilities, and acquire all of Lucas Western
Inc.’s right, title and interest in, to and under the Union 401(k) Plan and
Lucas Western Inc. shall transfer to Buyer on the Closing Date all of the assets
held with respect to the Union 401(k) Plan.

     (e)  UK Transferred Employees. The provisions of this Section 6.8(e) apply
only to Transferred Employees employed by TRW Limited or any of its Subsidiaries
(“UK Transferred Employees”). TRW and Buyer acknowledge that the transaction
contemplated by this Agreement constitutes a relevant transfer under the
Regulations.

       (i) Buyer will continue, and will cause any Subsidiary of Buyer to which
the contract of employment of any UK Transferred Employee is transferred by
operation of the Regulations to continue all terms and conditions of employment
defined in individual contracts and in collective bargaining agreements
applicable to UK Transferred Employees as of the Closing through the respective
expiration or other termination of such agreements to the extent required by
Regulations, subject to any ability to modify such terms or conditions as set
forth in the applicable contract or agreement. Schedule 6.8(e) contains each
form of individual contract entered into with UK Transferred Employees and lists
each collective bargaining agreement applicable to UK Affected Employees.    
     (ii) TRW shall transfer assets and liabilities from the TRW UK Pension
Scheme in accordance with the terms and conditions of Schedule 6.8(e)(ii).    
     (iii) TRW will bear the entire cost and expense of all employers’ liability
claims arising out of injuries sustained (or to the extent sustained) by UK
Transferred Employees on or before the Closing. Buyer will bear the entire cost
and expense of all employers’ liability

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  claims arising out of injuries sustained (or to the extent sustained) by UK
Transferred Employees after the Closing.

     (f)  Canadian Affected Employees. The provisions of this Section 6.8(f)
apply only to Canadian based Transferred Employees of TRW or any Asset Selling
Subsidiary, (“Canadian Transferred Employees”)

       (i) As of the Closing, TRW and the applicable Asset Selling Subsidiary
(TRW Aeronautical Systems Canada Limited) hereby assign to Buyer and Buyer
hereby assumes the employment contracts, and collective bargaining agreement of
TRW, any of its Subsidiaries or the relevant Canadian Asset Selling Subsidiary
with respect to Canadian Transferred Employees. TRW shall provide Buyer with
each form of contract with Canadian Transferred Employees no later than thirty
Business Days after the Closing and a statement of the number of employees
subject to such form agreements.          (ii) Salaried Pension Plan

       (A) The Buyer shall, effective as of and from the Closing Date, designate
a registered pension plan to provide pension benefits to Canadian salaried
Affected Employees from and after the Closing Date (the “Buyer’s Canadian
Salaried Pension Plan”).

       (B) Effective as of the Closing Date, each Canadian salaried Affected
Employee who is a member of the TRW Canada Limited Salaried Pension Plan (the
“TRW Canadian Salaried Pension Plan”) shall cease to actively participate in and
accrue benefits under the TRW Canadian Salaried Pension Plan and shall commence
participation in and accrue benefits under the Buyer’s Canadian Salaried Pension
Plan. The Buyer shall enroll each Canadian salaried Affected Employee in the
Buyer’s Canadian Salaried Pension Plan effective as at the Closing Date. The
Buyer’s Canadian Salaried Pension Plan shall recognize each Canadian salaried
Affected Employee’s period of service prior to the Closing Date (as recognized
under the TRW Canadian Salaried Pension Plan) for the purposes of vesting of and
eligibility for benefits under the Buyer’s Canadian Salaried Pension Plan.

       (C) All benefits accrued by a Canadian salaried Transferred Employee
under the TRW Canadian Salaried Pension Plan up to the Closing Date shall be
transferred from the TRW Canadian Salaried Pension Plan to the Buyer’s Canadian
Salaried Pension Plan, subject to and upon the completion of, the transfer of
assets from the TRW Canadian Salaried Pension Plan to the

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  Buyer’s Canadian Salaried Pension Plan as contemplated by this
Section 6.8(f)(ii).

       (D) Upon the completion of the transfer of assets from the TRW Canadian
Salaried Pension Plan to the Buyer’s Canadian Salaried Pension Plan, the Buyer’s
Canadian Salaried Pension Plan shall, for each Canadian salaried Affected
Employee, recognize such period of service (as recognized under the TRW Canadian
Salaried Pension Plan) for all purposes relating to the determination of such
Canadian salaried Affected Employee’s benefits under the Buyer’s Canadian
Salaried Pension Plan.

       (E) As soon as practicable after the Closing Date, TRW shall update the
pension records of each Canadian salaried Affected Employee in relation to the
TRW Canadian Salaried Pension Plan up to the Closing Date, and shall provide to
TRW’s actuary such data, records and other information as is necessary to enable
TRW’s actuary to determine the amount of the Canadian Salaried Affected Employee
Liabilities for the TRW Canadian Salaried Pension Plan. As soon as practicable
after such information has been provided to TRW’s actuary, TRW shall instruct
its actuary to determine the amount of the Canadian Salaried Affected Employee
Liabilities for the TRW Canadian Salaried Pension Plan. TRW shall make the
details of these calculations and their results available to the Buyer and its
actuary for their review and confirmation, and shall furnish to them such data
and other information as may be required or requested to permit a review,
recalculation and confirmation of the Canadian Salaried Affected Employee
Liabilities by the Buyer and its actuary. The Buyer shall within thirty
(30) days of receiving such information and data (or such later date as the
parties may agree to) notify TRW as to its agreement or disagreement with TRW’s
calculation of the Canadian Salaried Affected Employee Liabilities. For purposes
of this Section 6.8(f)(ii)(E), “Canadian Salaried Affected Employee Liabilities”
means the greatest of the going concern liabilities, the solvency liabilities
and the projected benefit obligation for the benefits accrued by the Canadian
salaried Affected Employees under the TRW Canadian Salaried Pension Plan. For
these purposes, the ongoing liabilities shall be calculated as of the Closing
Date using the actuarial methods and assumptions set out in the most recent
actuarial report filed with the regulators in respect of plan, the solvency
liabilities shall be calculated as of the Closing using the actuarial methods
and assumptions which would have as of December 31, 2001 or January 1, 2002
(whichever is plan’s traditional measurement date) had an actuarial report
prepared as of that date for filing with the regulators in of such plan, and
projected benefit obligation shall be calculated as of

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  the Closing Date using the same actuarial methods and assumptions as used by
TRW to calculate the projected benefit obligations as of January 1, 2002 as
documented on page 5 of the Towers Report.

       (F) If the Buyer and TRW cannot reach agreement with respect to
calculations under this Section 6.8(f)(ii), any such disputes shall be referred
to and settled with final and binding effect by an independent actuary mutually
agreeable to the Buyer and TRW. The costs, fees and expenses which are
associated with any such appointment shall be borne equally by TRW and the
Buyer.

       (G) As soon as practicable, but in any event within thirty (30) days
after final agreement is reached between TRW and the Buyer with respect to the
amount of the Canadian Salaried Affected Employee Liabilities in relation to the
TRW Canadian Salaried Pension Plan, TRW shall instruct its actuary to make
application to the applicable governmental authorities for approval of the
transfer of assets equal to the Transfer Amount from the TRW Canadian Salaried
Pension Plan to the Buyer’s Canadian Pension Plan. For purposes of this
Section 6.8(f)(ii)(G), “Transfer Amount” means, in relation to the TRW Canadian
Salaried Pension Plan, the amount of assets of the TRW Canadian Salaried Pension
Plan to be transferred to the Buyer’s Canadian Salaried Pension Plan, determined
as at the Closing Date to be equal to the Canadian Salaried Affected Employee
Liabilities. Written confirmation of any and all approvals of applicable
governmental authorities shall be forwarded by TRW to the Buyer within five
(5) business days of receipt of such approvals.

       (H) If any governmental authority or court refuses to permit a transfer
of assets from the TRW Canadian Salaried Pension Plan to the Buyer’s Canadian
Salaried Pension Plan in an amount equal to the Transfer Amount, the transfer
shall be made from the TRW Canadian Salaried Pension Plan in the amount that
such governmental authority or court advises would be acceptable to it. The
asset transfer amount approved by the governmental authority or court, whether
equal to the Transfer Amount or some other amount, shall be referred to as the
“Regulatory Amount”. TRW shall provide Buyer all information relevant to
calculate the Regulatory Amount. In the event that the Regulatory Amount is
greater than the Transfer Amount, the Buyer shall not be required to pay any
amount to TRW or any other person in respect of such excess.

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       (I) From the Closing Date to the Transfer Date, TRW shall cause the
funding agent for the TRW Canadian Salaried Pension Plan to accept and record,
as required, all benefit payments relating to Canadian salaried Affected
Employees under the TRW Canadian Salaried Pension Plan and shall remain
responsible for all benefit calculations, communications and the completion of
all forms and reports under the TRW Canadian Salaried Pension Plan relating to
the Canadian salaried Affected Employees. All benefit payments payable between
the Closing Date and the Transfer Date to Canadian salaried Affected Employees
under the terms of the TRW Canadian Salaried Pension Plan shall be payable out
of such plan. For purposes of this Section 6.8(f)(ii), “Transfer Date” means the
date assets are actually transferred from the TRW Canadian Salaried Pension Plan
to the Buyer’s Canadian Salaried Pension Plan.

       (J) Within thirty (30) days of receipt of all required approvals from the
governmental authorities in relation to the TRW Canadian Salaried Pension Plan,
TRW shall calculate the Final Transfer Amount and shall advise the Buyer of such
Final Transfer Amount. For purposes of this Section 6.8(f)(ii), the term “Final
Transfer Amount” shall mean, in relation to the TRW Canadian Salaried Pension
Plan, the Regulatory Amount adjusted for (i) a proportionate share of the fund
rate of return (positive or negative) earned by the TRW Canadian Salaried
Pension Plan from the Closing Date to the Transfer Date, (ii) any data
corrections identified subsequent to the determination of the Canadian Salaried
Affected Employee Liabilities, (iii) any benefit payments paid pursuant to
Section 6.8(f)(ii), and (iv) all fees and expenses relating to the Canadian
Salaried Affected Employee Liabilities between the Closing Date and the Transfer
Date. TRW shall make the details of these calculations and their results
available to the Buyer and its actuary for their review and confirmation, and
shall furnish to them such other information and data as may reasonably be
required or requested to permit a review, recalculation and confirmation of the
Final Transfer Amount by the Buyer and its actuary. The Buyer shall notify TRW
within thirty (30) days of receiving such information and data as to its
agreement or disagreement with TRW’s calculation of the Final Transfer Amount.

       (K) Within thirty (30) days of TRW and the Buyer reaching agreement on a
Final Transfer Amount, TRW shall cause an amount of cash, assets in kind or a
combination thereof, as determined by TRW and the Buyer, equal to the Final
Transfer Amount, to be transferred from the TRW Canadian Salaried Pension Plan
to the Buyer’s Canadian Salaried Pension Plan.

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       (iii) Hourly Pension Plan

       (A) Effective as of the Closing Date, TRW shall cause TRW Canada to
assign and transfer to Buyer or its subsidiary or affiliate, as applicable, its
rights, obligations and liabilities with respect to the Retirement Pension Plan
for Hourly-Paid Employees of Lucas Industries Canada Limited (the “Canadian
Hourly Pension Plan”) and its related funding medium (the “Canadian Hourly
Fund”). Effective as of the Closing Date, the Buyer or its subsidiary or
affiliate, as applicable, shall accept such assignment and transfer, provided
that any required approvals of the employee association or bargaining agent are
obtained. TRW shall cause TRW Canada to cause to be filed with the applicable
federal and provincial regulatory authorities, as soon as possible after the
Closing Date, such documentation as may be required with respect to the
assumption of sponsorship of the Canadian Hourly Pension Plan and the Canadian
Hourly Fund as provided for hereunder. The Buyer agrees to do all things
required of it under applicable laws to establish that it or its affiliate or
subsidiary, as applicable, is the successor sponsor under the terms of the
Canadian Hourly Pension Plan and the Canadian Hourly Fund as provided hereunder.

       (B) TRW shall cause TRW Canada to be responsible for satisfying any and
all governmental reporting and/or disclosure requirements applicable to the
Canadian Hourly Pension Plan and the Canadian Hourly Fund with respect to plan
years ending prior to the Closing Date and the Buyer shall be responsible for
satisfying any and all governmental reporting and/or disclosure requirements
with respect to plan years ending on or after the Closing Date. TRW shall cause
TRW Canada to co-operate with the Buyer with respect to such reporting
requirements for the plan year in which the Closing occurs. Prior to and
following the Closing Date, TRW shall cause TRW Canada to provide the Buyer with
such books, records and other relevant data within its control or access
relating to the Canadian Hourly Pension Plan and the Canadian Hourly Fund as the
Buyer shall reasonably request.

       (C) The parties acknowledge that TRW Canada and the Canadian Hourly Fund
participate in the TRW Canada Master Trust. The parties shall co-operate with
each other to effect the removal of the Canadian Hourly Fund and its assets (in
cash or in kind, as agreed to by the parties) from the TRW Canada Master Trust.
Without limiting the generality of the foregoing, the removal shall occur on a
fair market value basis, determined as of the date immediately preceding the
date of removal.

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       (iv) TRW Aeronautical Systems Canada Ltd. maintains a retiree medical
plan (the “Canadian Retiree Medical Plan”), providing medical and life insurance
benefits to retirees and their eligible beneficiaries. At the Closing, Buyer
shall assume all of TRW Aeronautical Systems Canada Ltd.’s obligations and
liabilities under the Canadian Retiree Medical Plan with respect to the Canadian
Transferred Employees and TRW shall retain liabilities for all other current or
former Canadian employees of the Business and will provide retired employees of
the Business with retiree medical plan benefit coverage under Canadian Retiree
Medical Plan if such employees has met the requirements for such coverage.

     (g)  Subsequent Terminations or Layoffs. Buyer will be solely responsible
for all costs related to the termination or layoff of a Transferred Employee by
it after the Closing Date, including but not limited to severance expenses,
penalties, damages and/or attorneys’ fees related to Buyer’s failure to comply
with the WARN Act or any other applicable law (“Lay-off Payments”). Buyer will
give all Transferred Employees full credit for such employee’s services with TRW
or any Subsidiary thereof prior to the Closing Date. TRW shall be solely
responsible for all Lay-off Payments with respect to terminations of employment
of any Affected Employees before or after Closing and arising from any notice of
termination given by TRW or any of its subsidiaries of any Affected Employee
prior to the Closing Date. TRW shall be solely responsible for all severance
payments (and similar payments) to Affected Employees incurred as a result of
the transactions contemplated by this Agreement which are not caused (i) by
Buyer’s failure to offer employment to or accept transfers of employment of
Affected Employees consistent with Section 6.8(b) or (ii) by a termination of
employment following the Closing Date. TRW will also be responsible for
complying with all obligations and liabilities arising under the WARN Act and
any comparable state law with respect to any actions taken by TRW prior to or on
the Closing Date.

     (h)  Personal Employee Contracts.

       (i) TRW will be solely responsible for all obligations arising under all
plans, programs, practices or agreements with respect to Affected Employees, if
any, providing financial incentives to such employees relating to their services
to TRW during the process of selling the Business.          (ii) With respect to
any expatriate/inpatriate Transferred Employees, Buyer or a Subsidiary of Buyer
will assume as of the Closing the agreements between TRW or any of the Asset
Selling Subsidiaries and such Transferred Employees listed on Schedule 6.8(h)
through the terms thereof, subject to the ability to modify or amend according
to the terms thereof.

     (i)  Payroll Obligations. TRW shall pay each Transferred Employee who is a
participant in any cash incentive plan of TRW or the Asset Selling Subsidiaries
a

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bonus for the plan year in which the Closing Date occurs equal to a pro rated
portion of the full bonus amount that would have otherwise been paid for such
year to such Transferred Employee pursuant to the terms of such plans as in
effect immediately prior to the Closing Date. Such bonus shall be paid based
upon the bonus performance for the full year and shall be pro rated based upon
the number of days the Transferred Employee is employed by TRW or the Asset
Selling Subsidiary for the plan year in which the Closing Date occurs, and shall
be paid at the time bonuses for such plan year are paid.

     (j)  Vacation. As of the Closing, Buyer will assume all obligations of TRW,
the Aerospace Affiliates and the Asset Selling Subsidiaries to Transferred
Employees for any accrued vacation entitlement and vacation pay entitlement
solely to the extent such liability is properly reflected on the Closing Balance
Sheet. TRW, the Aerospace Affiliates and the Asset Selling Subsidiaries will
have no obligation to make any payment to Transferred Employees after the
Closing with respect to any such accrued vacation entitlement and vacation pay
entitlement to the extent such liability is properly reflected on the Closing
Balance Sheet. Buyer will give the Transferred Employees full credit for their
respective service with TRW and the Asset Selling Subsidiaries prior to the
Closing Date for purposes of entitlement and accrual of vacation and vacation
pay from and after the Closing Date (to the extent Buyer gives credit to its
similarly situated employees for such purposes).

     (k)  Severance. From the Closing Date until the first anniversary thereof,
Buyer will provide all Transferred Employees with a severance policy comparable
in the aggregate to that provided by TRW, and the Asset Selling Subsidiaries,
respectively, immediately prior to the Closing Date and listed in Schedule
6.8(k) and, for all purposes with respect to such severance policies, will
provide each of the Transferred Employees credit for past service with TRW and
its Subsidiaries and Affiliates to the extent such service was credited under
severance plans of TRW, or the Asset Selling Subsidiaries. From the Closing Date
until the first anniversary thereof, Buyer will cause the Aerospace Subsidiaries
and will use its reasonable best efforts to cause the Aerospace Affiliates to
maintain the severance policies in place as of the date of this Agreement with
respect to the Affected Employees, or severance policies that are comparable in
the aggregate to such severance policies and for purposes of Section 2.4 such
severance obligations are deemed assumed by Buyer.

     (l) Aerospace Subsidiary and Aerospace Affiliate Employees. With respect to
employees of the Aerospace Subsidiaries and Aerospace Affiliates, Buyer shall,
or shall cause the Aerospace Subsidiaries and Aerospace Affiliates that will be
controlled by Buyer (and shall use reasonable efforts to cause the Aerospace
Affiliates not controlled directly or indirectly by Buyer) to, (a) honor all
terms and conditions of employment defined in individual contracts and in
applicable collective bargaining agreements through the respective expiration or
other termination of such agreements to the extent required by the labor laws
and regulations of the applicable country, and (b) assume the
expatriate/inpatriate agreements between TRW or any of its Subsidiaries or
Affiliates, on the one hand, and any Aerospace Employees, on the other hand.

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     (m)  Transition Services. TRW and the Asset Selling Subsidiaries shall
reasonably cooperate with Buyer to implement this Section 6.8, including, but
not limited to, allowing Buyer access to the Affected Employees for interviews
on a mutually convenient basis prior to the Closing Date, as well as access to
their personnel records and other related information, as reasonably requested
by Buyer. TRW and the Asset Selling Subsidiaries agree to provide to Buyer
administrative payroll and benefits services during a transition period after
the Closing Date on a fully reimbursed basis pursuant to a transition services
agreement, the terms of which shall be mutually agreed upon by TRW and Buyer,
for the purpose of providing continuous benefits coverage to the Transferred
Employees.

     (n)  Alternate Procedure. TRW and the Asset Selling Subsidiaries agree
that, pursuant to the “Alternate Procedure” (provided in Section 5 of Revenue
Procedure 96-60, 1996-2 C.B. 399), with respect to filing and furnishing IRS
Forms W-2, W-3, W-4, W-5, and 941, (i) TRW and the Asset Selling Subsidiaries,
as applicable, shall report on a “predecessor-successor” basis (as set forth
therein), (ii) TRW and the Asset Selling Subsidiaries, as applicable, shall be
relieved from furnishing Forms W-2 to any of the Transferred Employees, and
(iii) Buyer shall assume the obligations of TRW and its Affiliates, as
applicable, to furnish such Forms W-2 to any such Transferred Employees for the
year in which the Closing occurs; provided that, in each case TRW and the Asset
Selling Subsidiaries shall cooperate with Buyer in such transition procedures by
supplying Buyer with all relevant wage, withholding and other relevant
information in respect of periods prior to the Closing Date on a timely basis.

     (o)  Australian Employees. The provisions of this Section 6.8(o) apply only
to Australia-based Transferred Employees of TRW or any Asset Selling Subsidiary,
(“Australian Transferred Employees”).

       (i) Any offer of employment to an Australian based Affected Employee
shall be conditional on Closing and shall also require the Australian
Transferred Employee to resign from employment with TRW or the Asset Selling
Subsidiary if the Australian Transferred Employee accepts employment with Buyer.
The offer must be in the form as agreed between Buyer and TRW and shall be made
by Buyer at least fifteen Business Days prior to the Closing Date. Buyer and TRW
shall use reasonable endeavors to ensure that each Australian Transferred
Employee accepts the offer.          (ii) On Closing, TRW shall (A) pay each
Australian Transferred Employee his accrued entitlement to annual leave and long
service leave, and (B) provide Buyer with documentation concerning all
entitlements to which each Australian Transferred Employee is entitled as at the
Closing Date, including accrued sick leave, annual leave and long service leave
together with evidence of payment of the amounts referred to in clause (A)
above.

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       (iii) Buyer shall, with respect to all existing benefit plans as listed
in Section 4.13 of the TRW Disclosure Letter in which each Australian
Transferred Employee is eligible to participate waive all limitations relating
to pre-existing conditions, exclusions or waiting periods applicable to the
Australian Transferred Employees.          (iv) From the Closing Date, Buyer
shall (A) treat each Australian Transferred Employee as if the Australian
Transferred Employee had been continuously employed by Buyer from the time of
commencement of employment with TRW or with any predecessor of TRW in any part
of the Business, and (B) deal with all entitlements (including bonus payments or
incentive schemes) to which each Australian Transferred Employee is entitled as
if each entitlement had been accrued by the Australian Transferred Employee
while in the employment of Buyer in each case, except to the extent doing so
would result in a duplication of benefits for the same period of service;
provided, that TRW will reimburse Buyer as soon as practicable following
calculation of amounts for any bonus amounts TRW would have otherwise been
required to pay the Australian Transferred Employees pursuant to Section 6.8(i)
in the absence of this Section 6.8(o)(iv).          (v) Superannuation.

       (A) For purposes of this Section 6.8(o)(v), the following definitions
will apply:

  “Funds” shall mean the Lucas (Australia) Staff Superannuation Fund, a subplan
of the Mercer Master Retirement Trust, the Mercer Retirement Fund, and the AMP
SuperLeader Fund.

  “SGA” means the Superannuation Guarantee (Administration) Act 1992 (Cth).

  “Superannuation” shall mean any fund, scheme, benefit or contribution and
shall include any pension, retirement, provident or similar fund, scheme,
benefit or contribution.

  “Superannuation Commitment” means every amount: (x) needed to satisfy any
actual or contingent liability, including under the governing rules of a
superannuation fund, a contract of employment, an industrial instrument such as
an award or agreement, or any law for any superannuation contribution;
(y) needed to satisfy any moral obligation to pay superannuation contributions
or benefits in accordance with the same practices, standards and procedures that
applied before the date concerned; or (z) needed so that on the date concerned,
the employer is free of actual and contingent liability (making the assumption
that the

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  superannuation guarantee charge accrues from day to day during each
contribution period) for superannuation guarantee charge under the SGA for any
contribution period or part period under the SGA up to that date.

   “Tax Act” means the Income Tax Assessment Act 1936 and the Income Tax
Assessment Act 1997, jointly, as applicable.

       (B) To the extent permitted by applicable law and by the trustee of the
Funds, TRW and Buyer shall each do what is reasonably needed so that with effect
from the Closing Date: (x) TRW shall cease to contribute to, and participate in,
the Fund as employer in relation to each Australian Transferred Employee who is
a member of the Funds; and (y) Buyer shall contribute to, and participate in,
the Funds in place of TRW as employer in relation to each Australian Transferred
Employee on terms no less favorable to those on which TRW did immediately prior
to the date hereof until at least the first anniversary of the Closing Date.

       (C) Prior to and following the Closing, TRW shall give and do all that is
reasonably needed on its part to ensure that the trustee of the Funds gives
Buyer all records and information reasonably needed, including information
concerning each Australian Affected Employee and such Australian Affected
Employee’s participation in the Funds, such that Buyer can contribute to and
participate in the Funds in respect of each Australian Affected Employee and
assume responsibility for superannuation for each Australian Affected Employee.

       (D) TRW shall pay to the Funds on or before Closing the full amount of
the TRW’s Superannuation Commitment in respect of every Australian Affected
Employee for any period up to the Closing Date.

       (E) TRW shall not, without the prior written consent of Buyer, do
anything or omit to do anything that would, either directly or indirectly:
(x) alter the method for calculating the benefits payable by the Funds in
respect of any Australian Transferred Employee; (y) increase the obligations of
TRW as employer of any Australian Transferred Employee in relation to the Funds
or contributions to it; or (z) increase from the present Superannuation
Commitment of TRW, the Superannuation Commitment of Buyer after Closing for an
Australian Transferred Employee or the Australian Affected Employee’s
dependents.

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     (p)  Singapore Transferred Employees. The provisions of this Section 6.8(p)
apply only to Singapore-based Transferred Employees of TRW or any Asset Selling
Subsidiary, (“Singapore Transferred Employees”).

       (i) With respect to Singapore Transferred Employees who are employed by a
TRW or an Asset Selling Subsidiary and are subject to the regulations of the
Singapore Employment Act Cap.91 Revised Edition 1996 (the “Employment Act”, and
such employees collectively, the “EA Affected Employees”), the parties
acknowledge and agree that the EA Affected Employees, and the terms and
conditions of their employment, shall be transferred to Buyer in compliance with
the Employment Act and that the individual contracts of employment shall have
and shall be deemed to have effect after the Closing as if originally made
between Buyer and the EA Affected Employees.          (ii) To the extent
required by applicable laws and regulations and subject to any right of an
Affected Employee to consent, Buyer shall continue to observe and comply with
all terms and conditions of employment defined in individual contracts
applicable to the Singapore Transferred Employees as of the Closing through the
expiration or other termination of the respective individual contracts in
conformity with the applicable labor laws and regulations.

     (q) German Transferred Employees. The provisions of this Section 6.8(q)
apply only to Germany-based Transferred Employees of TRW or any Asset Selling
Subsidiary, (“German Transferred Employees”). As of the Closing, TRW or the
applicable Asset Selling Subsidiary shall assign and Buyer shall assume all
employment contracts of Pierburg Luftahrtgerate Union GmbH (“PLU Gmb”) with
German Transferred Employees, subject to the right of any individual to consent
to the assumption of such contracts, with all rights and claims as well as all
obligations and liabilities resulting therefrom, including, without limitation,
the pension liability with respect to the German Transferred
Employees; provided, however, that this sentence shall not be read as requiring
Buyer to assume any Plans other than such individual employment contracts. PLU
Gmb and Buyer acknowledge that these employment relationships, with rights and
obligations including pension obligations will pass to Buyer pursuant to
Section 613a Civil Code of Germany as a result of the purchase of the sold
Business. TRW shall provide Buyer with each form of contract with such employees
no later than thirty Business Days after the Closing together with a statement
of the number of employees subject to such form agreement. Without limiting the
forgoing, Buyer will assume all of PLU Gmb’s obligations and liabilities under
the pension plan maintained by PLU Gmb (the “German Pension Plan”) for the
German Transferred Employees as of the Closing, as referenced in, and pursuant
to assumptions consistent with those used for, the Towers Report, but in any
event to the extent required by law. As soon as practicable following the
Closing, TRW will transfer all of the assets held with respect to the German
Pension Plan in respect of the German Transferred Employees’ accrued liabilities
to Buyer.

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     (r)  French Transferred Employees. The provisions of this Section 6.8(r)
apply only to France-based Transferred Employees of TRW or any Asset Selling
Subsidiary, (“French Transferred Employees”). As of the Closing, TRW or the
applicable Asset Selling Subsidiary shall assign and Buyer shall assume all
employment contracts of the relevant French Asset Selling Subsidiary with French
Transferred Employees, subject to the right of any individual to consent to the
assumption of such contracts, with all rights and claims as well as all
obligations and liabilities resulting therefrom, including, without limitation,
the pension liability with respect to the French Transferred
Employees; provided, however, that this sentence shall not be read as requiring
Buyer to assume any Plans other than such individual employment contracts. TRW
and Buyer acknowledge that these employment relationships, with rights and
obligations including pension obligations with respect to French Affected
Employees will pass to Buyer (pursuant to Article L. 122-12 of the French Labour
Code) as a result of the purchase of the sold Business. TRW shall provide Buyer
with each form of contract with such employees no later than thirty Business
Days after the Closing together with a statement of the number of employees
subject to such form agreement. Without limiting the forgoing, Buyer will assume
all of TRW’s and the Asset Selling Subsidiary’s obligations and liabilities
under any pension plans, including the pension plan for executives (the “French
Pension Plan”), maintained by TRW or any of its Subsidiaries for the French
Transferred Employees and those already entitled to and receiving benefits under
such pension plans as of the Closing, as referenced in, and pursuant to
assumptions consistent with those used for, the Towers Report, but in any event
to the extent required by law. As soon as practicable following the Closing, TRW
will transfer all of the assets held with respect to the French Pension Plan in
respect of the French Transferred Employees’ accrued liabilities to Buyer.

     (s)  US Salaried Asset Transfer

       (i) As soon as practicable following the Closing Date, Buyer will:

       (A) establish a defined benefit pension plan designed to be a qualified
plan under section 401(a) of the Code; or

       (B) designate an existing defined benefit pension plan that is so
qualified, (such plan, in either case, the “Buyer U.S. Pension Plan”) to provide
benefits to Transferred Employees who were participants in the TRW Salaried
Pension Plan as of the Closing Date and to accept the transfer of assets and
assumption of liabilities from the TRW Salaried Pension Plan as provided for in
Section 6.8(s)(ii).

       (ii) Subject to Section 6.8(s)(vi), as soon as practicable following the
Closing, TRW will cause the trustees of the TRW Salaried Pension Plan to
transfer to the Buyer U.S. Pension Plan an amount in cash, to the extent
reasonably practicable, as may be determined by the trustees

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  of the TRW Salaried Pension Plan (or in kind, to the extent requested by
Buyer) calculated in accordance with the following formula:

  W = X minus Z, both adjusted for Y

       where:

  W = the amount to be transferred to the Buyer U.S. Pension Plan under this
Section 6.8(s)(ii);     X = the assets in the TRW Salaried Pension Plan equal to
the “Projected Benefit Obligations” (calculated in accordance with FAS 87) of
the Transferred Employees as of the Closing Date (the “Measurement Date”)
determined on the basis of the actuarial and other assumptions and methods used
by the TRW Salaried Pension Plan, subject to Section 6.8(s)(iii), but in no
event less than the amount required to be transferred under section 414(l) of
the Code (using ERISA section 4044 safe harbor assumptions to the extent
applicable and where not applicable relying on the assumptions used in the most
recent expense valuation calculated in accordance with FAS 87 prior to the date
of the Agreement);     Y = the sum of:

  the time-weighted rate of return (positive or negative), net of expenses, on
the assets in the TRW Salaried Pension Plan from the Measurement Date and ending
on the last day of the month immediately preceding the date of transfer under
this Section 6.8(s)(ii) applied solely to X and Z; and     for the month during
which the date of transfer occurs, interest at the total rate of return on a
90-day Treasury Bill as determined by Merrill Lynch for the last day of the
month preceding the month of transfer; and

  Z = any benefits paid by the TRW Salaried Pension Plan to such employees after
the Closing Date and prior to the date of such transfer under this Section
6.8(s)(ii) to the Transferred Employees.

       (iii) All determinations of the amount of assets of the TRW Salaried
Pension Plan to be transferred under Section 6.8(s)(ii) will be made by the
actuaries for the TRW Salaried Pension Plan. Buyer may retain its designated
actuary to perform the determinations under Section

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  6.8(s)(ii). If there is a dispute between those actuaries, then TRW and Buyer
will agree on a third actuary to resolve the dispute. The independent actuary
shall act on the following bases, as applicable:

       (A) the independent actuary shall not act as an arbitrator;    
     (B) TRW and Buyer shall each provide the independent actuary with all
information relating to the dispute which the independent actuary reasonably
requires; and          (C) any findings or reports prepared by the independent
actuary will be provided to both TRW and Buyer at the same time.

       (iv) The decision of the independent actuary is, in the absence of fraud
or manifest error, final and binding on the parties. TRW and Buyer shall each
pay one half of the independent actuary’s costs.          (v) In connection with
matters addressed in this Section 6.8(s), TRW and Buyer will co-operate in:

       (A) the filing of any IRS Forms 5310-A required with respect to the
transfer of assets and liabilities described in this Section 6.8(s);    
     (B) making all other filings required under the Code or ERISA and any
applicable securities laws; implementing all appropriate communications with
participants;          (C) transferring appropriate records;          (D) taking
all such other actions as may be necessary and appropriate to implement the
provisions of this Section 6.8(s) in a timely manner; and    
     (E) transferring all information to enable the enrolled actuaries for the
TRW Salaried Pension Plan and Buyer the Salaried Pension Plan to issue the
certifications required by section 6058(b) of the Code (Form 5310-A).

       (vi) The transfer referred to in Section 6.8(s)(ii) will not take place
until as soon as practicable after the later of:

       (A) the expiration of the 30-day period following the filing of any
required notices with the IRS pursuant to section 6058(b) of the Code;

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       (B) the date TRW has delivered to Buyer (with respect to the TRW Salaried
Pension Plan) a copy of the most recent determination letter from the IRS to the
effect that the TRW Salaried Pension Plan is qualified under section 401(a) of
the Code, together with documentation (in a form and substance satisfactory to
Buyer acting reasonably) evidencing the due adoption of any amendments to the
TRW Salaried Pension Plan required by the IRS as a condition to such
qualification and a certificate from TRW that no events have occurred that would
adversely affect the continued validity of such determination letters (apart
from the enactment of any United States’ federal law for which the remedial
amendment period under section 401(b) of the Code has not yet expired); and    
     (C) the date Buyer has delivered to TRW a copy of the most recent
determination letter from the IRS to the effect that the Buyer U.S. Pension Plan
is qualified under section 401(a) of the Code, together with documentation (in a
form and substance satisfactory to TRW acting reasonably) evidencing the due
adoption of any amendments to the Buyer U.S. Pension Plan required by the IRS as
a condition to such qualification and a certificate from Buyer that no events
have occurred that would adversely affect the continued validity of such letters
(apart from the enactment of any United States’ federal law for which the
remedial amendment period under section 401(b) of the Code has not yet expired).

       (vii) The parties agree to pursue the receipt of the items described in
this Section 6.8(s) as soon as reasonably practicable following the Closing
Date. For each Buyer U.S. Pension Plan which is newly created (if any), Buyer
will provide TRW with written evidence (in form and substance satisfactory to
TRW acting reasonably) of:

        (A) the adoption of the Buyer U.S. Pension Plan by Buyer; and

          (B) the creation of the trust under the Buyer U.S. Pension Plan.    
      (C) Notwithstanding anything in this Agreement to the contrary, the
Transferred Employees who became participants in the Buyer U.S. Pension Plan
will be given service credit for such plan for benefit accrual purposes equal to
their service credit under the TRW Salaried Pension Plan.

     (t)  Cooperation. TRW and Buyer will cooperate to effectuate the provisions
of this Section 6.8, including without limitation, informing and consulting

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with trade unions, works councils, and employee representatives prior to the
Closing Date in accordance with, and at such time or times as shall be required
under, applicable law. TRW and Buyer shall cooperate and consult with one
another as necessary as to the content of such information and consultation.

               (u)  Pension Shortfall

  (i) For purposes of this Section 6.8(u), (a) “Buyer PBO” shall be calculated
pursuant to the provisions of Schedule 6.8(u) to the Agreement, (b) “TRW PBO”
shall have the meaning set forth in the Actuary’s Letter that is part of
Schedule 6.8(e)(ii) (the “Actuary’s Letter”), (c) the “Transfer Amount” shall
have the meaning set forth in the Actuary’s Letter, (d) “unadjusted Transfer
Amount” shall have the meaning set forth in the Actuary’s Letter, (e) “Full
Funding Amount” is the amount by which the Buyer PBO exceeds the TRW PBO (but in
no event greater than $35 million), (f) the “Pension Surplus” means the excess,
if any, of the unadjusted Transfer Amount over the TRW PBO, (g) the “Pension
Deficit” means the excess of €17.1 million (or €19.4 million, if the assets
applicable to French and German pension liabilities, denominated in Euros as of
January 1, 2002, are not transferred by TRW to Buyer) over the German pension
liability, denominated in Euros as of January 1, 2002, retained by TRW (which is
a component of the German pension liability described in the Towers Perrin
Summary Report provided in Annex 1 to Section 4.13 of the TRW Disclosure Letter
(the “Towers Report”) and is determined under the same assumptions set forth in
the Towers Report), if any, with respect to former TRW employees converted into
US dollars at the spot $/€ exchange rate two days before the payment thereof in
accordance with paragraphs (iii), (iv) or (vi) below, plus $6.2 million, (h)
“Members” shall have the meaning set forth in Schedule 6.8(e)(ii), (i)
“Consenting Members” shall have the meaning set forth in Schedule 6.8(e)(ii),
and (j) “Currency Averaged Pension Deficit” means the excess of €17.1 million
(or €19.4 million, if the assets applicable to French and German pension
liabilities, denominated in Euros as of January 1, 2002, are not transferred by
TRW to Buyer) over the German pension liability, denominated in Euros as of
January 1, 2002, retained by TRW, if any, with respect to former TRW employees
converted into US dollars at the average of the spot $/€ exchange rates on
(i) January 1, 2002 and (ii) two days before payment, plus $6.2 million. In the
event of any conflict between the provisions of this Section 6.8(u) and
Schedule 6.8(e)(ii), the provisions of this Section 6.8(u) shall control. For
the avoidance of doubt, (x) once a Pension Deficit is paid, the amount deemed
paid for purposes of this Agreement shall not vary when referred to in other
calculations in this Section 6.8(u) and (y) the amount of the Buyer PBO, TRW
PBO, Transfer Amount, unadjusted Transfer Amount, Full Funding Amount and
Pension Surplus each shall be deemed to be in pounds sterling for purposes of
this Agreement.

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  (ii) The parties hereby agree to use their reasonable best efforts to
effectuate the calculation of the unadjusted Transfer Amount and the transfer of
the Transfer Amount pursuant to Schedule 6.8(e)(ii), including without
limitation soliciting consents from Members to transfer their accrued benefits
under the TRW Pension Scheme to a Buyer UK Pension Scheme in the event such
Members become UK Transferred Employees (the “Transfer Consents”), and
instructing their respective actuaries to perform the actuarial services
necessary to calculate the unadjusted Transfer Amount and the TRW PBO and the
Buyer PBO as promptly as practicable. Buyer shall solicit Transfer Consents as
soon as practicable following the execution of this Agreement, and TRW shall
cooperate fully in assisting Buyer to solicit such consents. The period during
which Members may provide Transfer Consents shall be four weeks following the
later of the Closing Date and the date of commencement of the solicitation of
Transfer Consents and may be extended up to an additional six weeks at the
discretion of Buyer (the “Transfer Consent Period”), and the end of such
four-week or extended period shall be the end of the Transfer Consent Period for
purposes of this Section 6.8(u). Buyer agrees to consider in good faith any
request by TRW that it be permitted to make the payments described in subsection
(iii) and (iv) below in lieu of transferring the Transfer Amount pursuant to
this Section 6.8(u)(ii).     (iii) If at the six-month anniversary of the end of
the Transfer Consent Period (or earlier in the case of (y) below), (x) the
Transfer Amount has not been transferred or (y) the Trustees of the TRW Pension
Scheme have determined not to permit the transfer of any portion of the Pension
Surplus to a Buyer UK Pension Scheme, TRW shall transfer the Pension Deficit in
a lump sum within five business days following the first to occur of (a) the
six-month anniversary of the end of the Transfer Consent Period or (b) the
action by the trustees of the TRW Pension Scheme denying the transfer of the
Pension Surplus, but in no event prior to the Closing Date.     (iv) If at the
nine-month anniversary of the end of the Transfer Consent Period, (or earlier in
the case of (y) below), (x) the Transfer Amount has not been transferred or
(y) the Trustees of the TRW Pension Scheme have determined not to permit the
transfer of any portion of the Pension Surplus to a Buyer UK Pension Scheme, TRW
shall transfer the Full Funding Amount (or if the Full Funding Amount cannot be
calculated, $35 million (as modified below, the “Estimated Full Funding
Amount”)), converted to U.S. dollars at the spot $/£ exchange rate on the date
that is two days before payment, to Buyer within five business days following
the first to occur of (a) the nine-month anniversary of the end of the Transfer
Consent Period or (b) the action of the trustees of the TRW Pension Scheme
denying the transfer of the Pension Surplus, but in no event prior to three
months after the end of the Transfer Consent Period. Within five business days
following the final calculation of the Full Funding Amount, TRW and Buyer shall,
if necessary, adjust the amount transferred as the

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    Estimated Full Funding Amount by a payment in U.S. dollars from Buyer to TRW
equal to the excess of the Estimated Full Funding Amount over the Full Funding
Amount, so that Buyer will have actually received and retained the Full Funding
Amount in US dollars (the Full Funding Amount having been converted to U.S.
dollars at the spot $/£ exchange rate on the date that is two days before
payment) pursuant to this Section 6.8(u)(iv).     (v) If the Transfer Amount is
transferred to the Buyer UK Pension Scheme following the time that a cash
payment is made by TRW to Buyer pursuant to Section 6.8(u)(iii) or (iv) above
and within 48 months following the end of the Transfer Consent Period, Buyer
shall reimburse TRW for such cash payment by paying to TRW the amount obtained
by netting the payment required by paragraph (vi) below against the refund of
such cash payment plus interest on such amount from the one-year anniversary of
the date on which TRW made the payment under clause (iii) to the date on which
Buyer makes the payment required under this sentence at a rate equal to the
daily average one month LIBOR plus one percent (1%) during such period. If the
Transfer Amount is transferred to the Buyer UK Pension Scheme more than
48 months following the end of the Transfer Consent Period, Buyer shall have no
obligation to reimburse TRW for any cash payments made under this
Section 6.8(u). For the avoidance of doubt, TRW shall have no obligation to make
any payment to the Buyer under this Section 6.8(u)(v).     (vi) If a transfer of
the Transfer Amount is made from the TRW Pension Scheme to the Buyer UK Pension
Scheme, TRW will pay Buyer in US dollars within five business days following
such transfer, the amount determined, if any, under clause (a) or (b) below, as
applicable:

  (a) If the Pension Surplus (transferred as part of the Transfer Amount) is
less than the Full Funding Amount, an amount in US dollars equal to the sum of
(1) the excess of (A) the Full Funding Amount over (B) the Pension Surplus
converted to US dollars at the average of the $/£ exchange rate at January 1,
2002 and the date that is two days before the transfer of the Transfer Amount,
plus (2) the Pension Deficit; or     (b) If the Pension Surplus (transferred as
part of the Transfer Amount) is equal to or greater than the Full Funding
Amount, an amount in US dollars equal to the (1) the Currency Averaged Pension
Deficit, less (2) the quotient obtained by dividing (A) the excess of the
Pension Surplus over the Full Funding Amount converted to US dollars at the
average of the $/£ exchange rate at January 1, 2002 and the date that is two
days before the transfer of the Transfer Amount, by (B) three.

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    For the avoidance of doubt, Buyer shall have no obligation to make any
payment to TRW under this Section 6.8(u)(vi).     (vii) The Buyer UK Pension
Scheme shall be required to maintain “ringfencing” on the use of the Pension
Surplus for no more than five years from the Closing Date, and Buyer shall be
specifically permitted to use the Pension Surplus for Consenting Members for (a)
employer contribution holidays, (b) retirement redundancy benefits and
(c) augmentations. In the event the trustees of the TRW Pension Scheme require a
deviation from the provisions of this Section 6.8(u)(viii) in order to
effectuate a transfer of the Transfer Amount, the parties agree that such
transfer will not occur unless expressly agreed to by Buyer and, if it would be
adversely affected, TRW.     (viii) At the Closing, TRW will pay Buyer a cash
amount in US dollars equal to $20.7 million in connection with the retiree
medical liability assumed by Buyer pursuant to Section 6.8(d)(iii)(C).     (ix)
At the Closing, TRW will pay Buyer a cash amount in US dollars equal to $300,000
in connection with the retiree medical liability assumed by Buyer pursuant to
Section 6.8(f)(iv).

     The unadjusted Transfer Amount will be calculated by TRW’s actuary as
provided in Schedule 6.8(e)(ii) and Buyer’s actuary shall have the right to
review the TRW actuary’s calculation pursuant to the terms of paragraph 4 of
Schedule 6.8(e)(ii) with disputes settled pursuant to paragraph 4 of Schedule
6.8(e)(ii). Buyer’s actuary will calculate the Full Funding Amount subject to
the right of TRW’s actuary to review those calculations pursuant to the same
principles as are set forth in paragraph 4 of Schedule 6.8(e)(ii), with disputes
settled pursuant to the same principles as are set forth in paragraph 8 of
Schedule 6.8(e)(ii) (such principles in paragraph 4 and 8, the “Actuarial Review
Principles”). TRW’s actuary will calculate the retained German pension liability
of TRW subject to the right of Buyer’s actuary to review pursuant to the
Actuarial Review Principles.

     (v)  Access to Affected Employees. After the Closing, Buyer will permit TRW
(and its subsidiaries and affiliates) to have access to Transferred Employees of
Buyer or the Aerospace Subsidiaries or controlled Aerospace Affiliates whom TRW
or its Subsidiaries or Affiliates may reasonably need in order to defend or
prosecute any legal or administrative action to which TRW or any of its
Subsidiaries or Affiliates is a party and which relates to the conduct of the
Business prior to the Closing. TRW or the applicable Subsidiary or Affiliate
will pay or reimburse Buyer for all reasonable expenses which may be incurred by
such employees in connection therewith, including, without limitation, all
travel, lodging, and meal expenses, and TRW or the applicable Subsidiary or
Affiliate will compensate Buyer for the number of whole business days spent by
each such employee in providing such services at the rate of one hundred thirty
percent (130%) of the average daily gross pay per business day (excluding the
value of employee benefits) of such employee during the calendar month in which
such services are

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performed. Buyer may deny such access to the extent it reasonably believes such
access would be disruptive to the business, other than to a de minimus extent,
or to the extent such access interferes, other than to a de minimus extent, with
the conduct of the business.

     Section 6.9 Novation of Government Contracts; Hedging Contracts. The
parties will cooperate and use their reasonable best efforts to obtain, to the
extent legally required, the novation of all government contracts and
subcontracts included in the Acquired Assets. Subject to Section 2.3(a)(xiv),
the parties will cooperate and use their reasonable best efforts to obtain the
novation of each hedging Contract set forth on Schedule 2.3(a)(xiv).

     Section 6.10 Tax Matters.

     (a) Assistance and Cooperation. Within sixty (60) days after the receipt of
a customary package of Tax information materials from TRW, Buyer shall provide
to TRW a package of Tax information materials, including schedules and work
papers required by TRW to enable TRW to prepare and file all Tax Returns
required to be prepared and filed by it with respect to the Acquired Assets to
the extent that TRW or any of the Asset Selling Subsidiaries has transferred the
relevant books and records to Buyer in connection herewith. Buyer shall prepare
such package in good faith in a manner consistent with TRW’s past practice.
After the Closing Date, each of TRW and Buyer shall (and shall cause their
respective Affiliates to), at the reasonable request of the other party,
(i) assist the other party in preparing and filing any Tax Returns, amended Tax
Returns or refund claims which such other party is responsible for preparing and
filing including Tax Returns and amended Tax Returns with respect to the
Acquired Assets, and (ii) cooperate fully with the other party in preparing for
any audits of, or disputes with any Tax Authority regarding, any Tax Returns of
TRW or its Affiliates, any of the Aerospace Subsidiaries or their Affiliates or
the Acquired Assets. Such assistance and cooperation shall include providing the
other party and, at the direction of the other party, any Tax Authority, with
copies (at the other party’s expense) of relevant Tax Returns or portions
thereof, together with accompanying schedules, related work papers and documents
relating to rulings or other determinations by Tax Authorities. Each of TRW and
Buyer shall make its employees available on a basis mutually convenient to both
parties to provide explanations of any documents or information provided
hereunder to the other party and, at the direction of the other party, any Tax
Authority. In connection therewith, TRW and Buyer shall not dispose of any Tax
work papers, books or records relating to any of the Aerospace Subsidiaries or
the Acquired Assets until the later of the expiration of the six-year period
following the Closing Date or expiration of the statute of limitations of the
taxable period to which such Tax Returns and other documents relate, without
regard to extensions, except to the extent notified by the other party in
writing of such extensions for the respective Tax periods, and thereafter shall
give the other party reasonable written notice, and the opportunity to take
possession of any such items, before disposing of such items. Any information
obtained under this Section 6.10(a) shall be kept confidential except as may be
otherwise necessary in connection with the filing of Tax Returns or claims for
refund or in conducting an audit or other Tax proceeding.

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     (b)  Tax Indemnification.

     For the purpose of this Section 6.10, “Losses” shall mean any and all
actual losses, liabilities, costs and expenses (including reasonable attorneys’
fees and costs of investigation), after giving effect to any amounts recovered
from third parties, including amounts recovered under insurance policies, with
respect to such Losses.

       (i) Indemnification by TRW. Notwithstanding any other provision of this
Agreement or any Ancillary Agreement, TRW shall indemnify Buyer, from and
against and in respect of any and all Losses incurred by Buyer, which may be
imposed on, sustained, incurred or suffered by or assessed against Buyer,
directly or indirectly, to the extent relating to or arising out of:

       (A) any liability for Taxes imposed upon or relating to TRW, the TRW
Selling Shareholders or the Asset Selling Subsidiaries for any period (whether
before or after the Closing Date);          (B) any liability for Taxes imposed
on each of the Aerospace Affiliates, the Aerospace Subsidiaries, and the
Acquired Assets for any Pre-Closing Tax Period;          (C) any liability, or
increase in a liability, for Taxes imposed on Buyer or any of its Affiliates
(including, after the Closing Date, the TRW-controlled Aerospace Affiliates) as
a result of any failure by TRW to perform or comply with its obligations under
this Agreement;          (D) any Taxes for which TRW is liable pursuant to
Section 6.6; and          (E) any liability for Restructuring Taxes (together
with the Taxes described in clauses (A) through (E), “Excluded Taxes”).

       (ii) Indemnification by Buyer. Notwithstanding any other provision of
this Agreement or any Ancillary Agreement, Buyer shall indemnify TRW from and
against and in respect of any and all Losses incurred by TRW or its Affiliates,
which may be imposed on, sustained, incurred or suffered by or assessed against
TRW or its Affiliates, directly or indirectly, to the extent relating to or
arising out of:

       (A) any liability for Taxes imposed upon or relating to Buyer or Buyer’s
designee for any period (whether before or after the Closing Date) for which TRW
is not required to indemnify Buyer pursuant to Section 6.10(b)(i) hereof;

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       (B) any liability for Taxes imposed on any of the Aerospace Affiliates
and any liability for Taxes incurred in connection with the Business, for
Post-Closing Tax Periods;          (C) any liability, or increase in a
liability, for Taxes imposed on TRW or any of its Affiliates as a result of any
failure by Buyer to perform or comply with its obligations under this Agreement;
and          (D) any and all Taxes for which Buyer is liable pursuant to
Section 6.6.

       (iii) Payment in full of any amount due from TRW or Buyer under this
Section 6.10(l) shall be made to the affected party in immediately available
funds at least two business days before the date payment of the Taxes to which
such payment relates is due, or, if no Tax is payable, within fifteen days after
written demand is made for such payment.

     (c)  Survival of Tax Provisions. Notwithstanding any other provision of
this Agreement to the contrary, any claim to be made pursuant to Section 6.10
hereof shall survive until thirty days after the expiration of the applicable
statutes of limitations relating to the Taxes at issue.

     (d)  Tax Treatment. Any payment made pursuant to this Section 6.10 will be
treated as an adjustment to the Purchase Price for all Tax purposes. TRW and
Buyer agree, and agree to cause the controlled Aerospace Affiliates (and to use
reasonable best efforts to cause the Aerospace Affiliates not controlled
directly or indirectly by TRW), not to take any position inconsistent with this
Section 6.10(d) for Tax purposes in connection with their respective Federal,
state and local Tax returns and other filings, unless required to do otherwise
pursuant to a Final Determination.

     (e)  TRW warrants and undertakes to Buyer that all documents forming part
of the title to any asset that is the subject of the restructuring described in
Schedule 2.1 and that a UK resident company may wish to enforce or produce in
evidence are or will be duly stamped and have where appropriate been or will be
adjudicated. If this warranty is untrue, or if this undertaking is not
satisfied, with respect to any document and in the reasonable opinion of Buyer
it is necessary to procure stamping of such document, then at Buyer’s option
(i) TRW shall pay to Buyer by way of liquidated damages an amount equal to any
unpaid stamp duty and any interest or penalties payable in respect thereof or
(ii) TRW shall procure the stamping of such document.

     Section 6.11 Transition and Ancillary Agreements.

     (a)  Between the signing of this Agreement and the Closing, the parties
shall negotiate in good faith and enter into an agreement (the “Transition
Agreement”) pursuant to which TRW shall, or shall cause its Affiliates to,
provide such services as requested by Buyer, which services may be necessary to
facilitate the operation of the

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Business during the period following the Closing and shall include at a maximum
those services that are currently provided to the Business by TRW or any of its
Affiliates, including without limitation all services set forth in
Section 4.24(a) of the TRW Disclosure Letter (but not those noted in
Section 4.24(b) of the TRW Disclosure Letter), and which are necessary to
conduct the Business as currently conducted. At Buyer’s request, these services
shall be provided (i) during the period from the Closing Date until the first
anniversary of the Closing Date, (ii) in substantially the same manner as of the
date hereof and (iii) at a cost not to exceed the direct cost of providing such
services without taking into account any allocation of overhead. Between the
signing of this Agreement and the Closing, the parties shall negotiate in good
faith such other agreements as are reasonably necessary to consummate the
transactions contemplated by this Agreement, and such agreements together with
the Transition Agreement, the Local Transfer Agreements, the Insurance Agreement
and the license agreements referenced in Sections 6.11(a), 6.14(a), 6.14(b) and
6.20 hereof shall constitute the “Ancillary Agreements”. If, and to the extent
an Affiliate of TRW is a party to any of the Ancillary Agreements, TRW will
unconditionally guarantee the performance of such Affiliate under that
agreement. If, and to the extent an Affiliate of Buyer is a party to any of the
Ancillary Agreements, Buyer will unconditionally guarantee the performance of
such Affiliate under that agreement.

     (b)  For those foreign jurisdictions where (i) applicable laws in such
jurisdiction require any of the parties to be a party to a Local Transfer
Agreement in order to effect the sale, assignment, transfer or delivery (as the
case may be) of Assets in such jurisdiction, or (ii) a Local Transfer Agreement
is otherwise deemed necessary or appropriate for tax or other purposes, TRW or
the applicable TRW Selling Shareholders or Asset Selling Subsidiaries. Buyer
shall negotiate in good faith to enter into a Local Transfer Agreement for each
such jurisdiction between the date hereof and the Closing Date. “Local Transfer
Agreements” shall mean the separate transfer and sale agreements to be entered
into by TRW, the applicable TRW Selling Shareholders or Asset Selling
Subsidiaries and Buyer for the transfer, assignment and sale of the Equity
Interest or the Acquired Assets, as the case may be, in such form and substance
as may be reasonably required to give effect to such transfer, assignment and
sale or the allocation of the Purchase Price in accordance with Section 2.7
under the applicable laws in effect in the jurisdiction in which the relevant
Acquired Assets are located or which governs the Equity Interest. The terms of
the Local Transfer Agreements shall be consistent with and governed by the terms
of this Agreement.

     Section 6.12 Waiver of Bulk Sales Requirement. Each of the parties hereto
waives compliance with any applicable bulk sales laws, including without
limitation the Uniform Commercial Code Bulk Transfer provisions.

     Section 6.13 Post-Closing Access to Records and Employees. Buyer shall
permit, to the extent permitted by law, TRW, and any of its agents,
representatives, advisors and consultants, to have reasonable access to the
employees of the Business for information relating to periods up to and
including the Closing which is reasonably requested by TRW, subject to the same
conditions and limitations as set forth in Section

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6.2(a). This Section 6.13 does not apply to Taxes or Tax Returns, which are
covered by Section 6.10(d) hereof.

     Section 6.14 Intellectual Property Licenses; Related Matters.

     (a)  Buyer License. The parties shall enter into a license agreement,
substantially on the terms and in the form of Schedule 6.14(a), whereby Buyer
shall grant to TRW, effective as of Closing, a perpetual, irrevocable,
royalty-free, in those jurisdictions where TRW has such rights, non-exclusive
license set forth on Schedule 6.14(a) to the Licensed-Back Intellectual
Property, and to use the foregoing, to make, have made, use and sell products
and processes in the fields other than the Business.

     (b)  TRW License. The parties shall enter into a license agreement,
substantially on the terms and in the form of Schedule 6.14(b), whereby TRW
shall grant to Buyer, effective as of Closing, a perpetual, irrevocable,
royalty-free, in those jurisdictions where TRW has such rights, non-exclusive
license set forth on Schedule 6.14(b) to the Licensed Intellectual Property, and
to use the foregoing, to make, have made, use and sell products and processes in
the fields of the Business.

     (c)  Lucas Trademarks. The parties shall negotiate in good faith to enter
into a license agreement at Closing whereby TRW shall grant to Buyer a perpetual
royalty-free license with respect to the trademarks listed in Schedule 6.14(c),
which license shall be non-exclusive, except such license shall be exclusive
with respect to those trademarks listed on Schedule 6.14(c) that are used as of
the date hereof in the aerospace field (except for those trademarks that are
used in the design, development, manufacture or sale of (i) engine valves, valve
train components and valve train systems for aircraft applications;
(ii) occupant restraint components and systems and occupant head and body
protection components and systems for aircraft applications; (iii) automotive
components and (iv) power systems and engine systems for applications other than
aircraft).

     (d)  Trademark License. Notwithstanding Section 2.3(b)(iii) hereof, Buyer
and its Affiliates shall have the right to resell any and all of the Inventories
included in the Assets. Within four months of the Closing with respect to
products with a serial number or other conclusive mark identifying whether TRW
or the Buyer manufactured such product, and within 30 days of the Closing, with
respect to all other products and inventory, Buyer will, and will cause its
Affiliates to, institute a procedure whereby a stamp or other indelible
identifying mark is affixed to products sold by the Business in order to
distinguish such products from products sold by the Business prior to the
Closing. Following the Closing, Buyer shall use the names, forms, marketing
materials, signage and similar items of any TRW Entity included in the Acquired
Assets only to the extent that the use thereof cannot be commercially reasonably
avoided in the conduct of the Business following the Closing and shall in any
event cease all such uses, for any purpose whatsoever, not more than four months
following the Closing.

     (e)  Effective as of the Closing, TRW shall grant to Buyer a limited,
royalty-free license to use the Domain Names listed on Schedule 6.14(e) attached
hereto

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solely in connection with the Business for a period of three (3) months from the
date of Closing. Buyer shall cease all uses, for any purpose whatsoever no more
than three months following the Closing.

     Section 6.15 Non-Competition Agreement. During the period beginning on the
Closing Date and ending on the third anniversary thereof, none of TRW nor any of
its Subsidiaries shall directly or indirectly engage in any business or activity
in any geographic area in which the Business operates which is in competition
with the Business, as conducted on the Closing Date; provided, however, that
neither TRW nor any of its Affiliates shall be prevented from:

       (i) acquiring as an investment in the ordinary course of business
(including investments by any trust of any of its employee benefit plans) any
securities required to be registered under the Securities Exchange Act of 1934,
as amended, of any Person to the extent that such acquisitions do not result in
TRW or any of its Affiliates owning in the aggregate 5% or more of any class of
such securities;          (ii) acquiring (through merger, stock purchase or sale
of all or substantially all of the assets or otherwise) of ownership of or any
equity interest in any Person, provided that the annual revenues of such Person
from any business that competes with the Business are not more than 10% of such
Person’s total annual revenues (based on the most recent full fiscal year
revenues of such Person); or          (iii) engaging and continuing to engage in
any business or activities in which TRW or any of its Subsidiaries shall be
engaged immediately after the Closing, including:

       (A) the design, development, manufacture and sale of missile and
spacecraft products;          (B) the design, development, manufacture and sale
of engine valves and valve train components and valve train systems for aircraft
applications;          (C) the design, development, manufacture and sale of
occupant restraint components and systems and occupant head and body protection
components and systems for aircraft applications;          (D) the design,
development, manufacture and sale of avionics;          (E) the design,
development, manufacture and sale of automotive components;

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       (F) the design, development, manufacture and sale of power systems and
engine systems for applications other than on aircraft;          (G) the design,
development, provision and sale of software, information consulting and related
services;          (H) integration of products into systems (e.g. UAVs and other
aeronautical and space platforms); and          (I) purchasing aeronautical
systems products from third parties and incorporating such products into other
TRW products and selling such products;

Nothing in this Agreement shall restrict the activities of any Person or any of
its Affiliates who engages in a business combination transaction resulting in
the acquisition (by purchase or otherwise) of all or substantially all of the
capital stock or assets of TRW; provided that nothing in this Section 6.15 shall
be construed to allow TRW or any of its subsidiaries to directly or indirectly
engage in any business or activity otherwise prohibited by this Section 6.15 (it
being understood that if TRW is merged with an unaffiliated third party, the
resulting merged company will not be subject to the terms of this Section 6.15,
except that the assets of the resulting merged company that were the assets of
TRW immediately prior to such merger, as well as all subsidiaries of such merged
company that were previously subsidiaries of TRW, shall remain bound by this
Section 6.15).

     Section 6.16 No Hire and Non-Solicitation of Employees. None of TRW, any of
its Affiliates or any of their respective representatives will at any time prior
to one year from the Closing Date, directly or indirectly, solicit the
employment or services of, or hire in any capacity (whether as an employee,
consultant, independent contractor or otherwise), any Affected Employee who is a
Transferred Employee without Buyer’s prior written consent. None of Buyer, any
of its Affiliates or any of their respective representatives will at any time
prior to one year from the Closing Date, directly or indirectly, solicit the
employment or services of, or hire in any capacity (whether as an employee,
consultant, independent contractor or otherwise), any TRW Employee without TRW’s
prior written consent. For purposes of this Section 6.16, the term “solicit the
employment or services” shall not be deemed to include generalized searches for
employees through media advertisements of general circulation, employment firms,
open job fairs or otherwise provided that such searches are not focused or
targeted on Persons employed by Buyer or any of its Affiliates or TRW or any of
its Affiliates, as the case may be. Nothing in this Agreement shall restrict the
activities of any Person or any of its Affiliates who engages in a business
combination transaction resulting in the acquisition (by purchase or otherwise)
of all or substantially all of the capital stock or assets of TRW; provided that
nothing in this Section 6.16 shall be construed to allow TRW or any of its
subsidiaries to directly or indirectly solicit the employment of or hire any
Affected Employee who is a Transferred Employee if otherwise prohibited by this

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Section 6.16 (it being understood that if TRW is merged with an unaffiliated
third party, the resulting merged company will not be subject to the terms of
this Section 6.16, except that the portion of the resulting merged company that
was TRW immediately prior to such merger, as well as all subsidiaries of such
merged company that were previously subsidiaries of TRW, shall remain bound by
this Section 6.16).

     Section 6.17 No Shop. From the date hereof until the earlier to occur of
(i) termination of this Agreement pursuant to the terms and conditions hereof
and (ii) the Closing, each TRW Participant will not (and each TRW Participant
will cause each of its employees, officers, directors, representatives and
agents not to) (a) solicit, initiate, entertain, consider, encourage or accept
the submission of any proposal or offer from any third party relating to the
acquisition (whether by merger, purchase of stock, purchase of assets or
otherwise) of all or substantially all or any significant part of the Business
or of the Assets (other than through an offer or proposal for a majority of the
shares of TRW), or (b) participate in any discussions or negotiations (and each
TRW Participant shall immediately cease any discussions or negotiations that are
ongoing) regarding, furnish any information with respect to, assist or
participate in any effort or attempt by any third party to do or seek any of the
foregoing.

     Section 6.18 Certain Transactions.

     (a)  Buyer shall not, and shall not permit any of its Subsidiaries to,
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of or equity in, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets if the entering into of a definitive agreement relating to or the
consummation of such acquisition, merger or consolidation would reasonably be
expected to (i) impose any material delay in the obtaining of, or significantly
increase the risk of not obtaining, any authorizations, consents, orders,
declarations or approvals of any Governmental Entity necessary to consummate the
transactions contemplated by this Agreement or the expiration or termination of
any applicable waiting period, (ii) significantly increase the risk of any
Governmental Entity entering an order prohibiting the consummation of the
transactions contemplated by this Agreement, (iii) significantly increase the
risk of not being able to remove any such order on appeal or otherwise or
(iv) materially delay or prevent the consummation of the transactions
contemplated by this Agreement. Notwithstanding the foregoing, the restrictions
set forth in this Section 6.18 shall not apply (x) in the event a third party
commences a tender offer or exchange offer for equity securities of Buyer, which
tender offer or exchange offer, if consummated, would result in such third-party
offeror and/or its affiliates beneficially owning securities having not less
than a majority of the ordinary voting power in the election of directors
(“Majority Voting Power”) or (y) to any merger, consolidation or other business
combination as a result of which Buyer’s stockholders own securities of the
ultimate parent of the resulting entity having less than Majority Voting Power.

     (b)  Prior to Closing, Buyer shall not, and shall not permit any of its
Subsidiaries to, divest or otherwise dispose of or enter into any agreement or
arrangement

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to divest or otherwise dispose of any of the assets of or equity in, or by any
other manner, the Business, except as set forth in Sections 6.3 and 6.4 hereof.

     Section 6.19 Environmental Matters. Each party agrees that it will not, and
agrees to use and use its reasonable best efforts to ensure that its Affiliates
do not, voluntarily or by discretionary action, accelerate the timing, or
increase the cost, of any obligations of the other party under this Agreement,
except as required by law, provided the conduct of Phase I or Phase II
environmental assessments as part of a sale of any Real Property or sale of the
Business shall not be construed as a violation of this Section 6.19; provided,
further, that this Section 6.19(a) shall not require either party to refrain
from taking any action for which it has a bona fide commercial purpose.

     (b)  If pursuant to Section 2.4(a)(v) hereof either party shall be entitled
to manage any proceedings relating to any Environmental Claim and any
Remediation arising therefrom, such party must conduct its actions including any
Remediation in a good workmanlike and expeditious manner, consistent with
industry standards, and use only competent and qualified professionals.
Additionally, such party must continue to perform such Remediation until the
project fully complies with applicable legal and Governmental Entity
requirements.

     (c)  In connection with any Remediation, the party entitled to the
management thereof shall: (i) consult with the other party in connection with
such Remediation; (ii) provide all material correspondence to and from
Government Entities and any other third parties to the other party; (iii) give
due and proper consideration to all reasonable directions of the other party and
take into account such directions in the conduct of the Remediation;
(iv) provide the other party a draft scope of any investigation prior to
implementation of any Remediation and allow the other party the opportunity to
comment on such draft scope; (v) provide the other party with all material
drafts of specifications for the scope of remedial work prior to implementation
of such work; (vi) give the other party the opportunity to make comments and
provide input on such draft scope and give due and proper consideration to such
comments; (vii) give the other party the opportunity to observe the progress of
any Remediation and provide the other party advance notice of any material
Remediation; (viii) provide the other party with the opportunity to be present
and participate in any meeting of the Governmental Entity considering the
Remediation; and (ix) provide the other party with quarterly reports on the
progress of all investigations and Remediations.

     Section 6.20 Insurance Matters. Between the signing of this Agreement and
the Closing, TRW and Buyer shall negotiate in good faith and enter into the
Insurance Agreement, based upon the terms and conditions set forth in Schedule
6.20 hereto.

     (b)  TRW shall maintain aviation products liability insurance for the
period beginning on the Closing Date thru April 30, 2004 for claims, lawsuits or
proceedings arising out of any occurrences taking place on the Closing Date thru
April 30, 2004 and relating to a product manufactured by the Business prior to
the Closing Date. Subject to insurance market conditions and insurer agreement,
TRW shall use all

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reasonable efforts to continue an insurance program with at least the annual
limits in place as of the date of this Agreement, and TRW shall use its
reasonable best efforts to have Buyer included as an additional insured under
said insurance. TRW shall have no obligation to maintain aviation products
liability insurance for claims, lawsuits or proceedings arising out of an
occurrence taking place after April 30, 2004. Buyer agrees to fully cooperate
with TRW and its insurers in the investigation, analysis and resolution of any
aviation product liability claim that is covered by the insurance that is the
subject of this paragraph or which is covered by any previous insurance
purchased by TRW. Buyer further agrees to substantively continue the processes
and procedures relating to the investigation of incidents and the handling of
claims that currently fall within the responsibility of the Business’ Aerospace
Safety Review Board (ASRB) and to provide TRW immediate notice of any occurrence
that might give rise to a claim under the insurance described hereunder. TRW
shall provide Buyer with a certificate of insurance evidencing the purchase of
insurance required pursuant to this Section 6.20(b) promptly following the
receipt of such certificate.

     (c)  Buyer shall maintain aviation products liability insurance for claims,
lawsuits or proceedings that relate to a product manufactured by the Business on
or after the Closing Date. Furthermore, beginning on May 1, 2004 Buyer shall
maintain aviation products liability insurance for any aviation product
liability claim, lawsuit or proceeding arising out of a product of the Business
irrespective of when the product was manufactured. Subject to insurance market
conditions and insurer agreement, Buyer shall use all reasonable efforts to
continue an insurance program with at least the annual limits in place as of the
date of this Agreement, and Buyer shall use its reasonable best efforts to have
TRW included as an additional insured for a period beginning with the Closing
Date and ending not less on April 30, 2009. TRW agrees to cooperate with Buyer
and its insurers in the investigation, analysis and resolution of any aviation
product liability claim that is the subject of Buyer’s aviation product
liability insurance. Buyer shall provide TRW with a certificate of insurance
evidencing the purchase of insurance required pursuant to this Section 6.20(c)
promptly following the receipt of such certificate.

     Section 6.21 Communications with Customers. Buyer and TRW shall cooperate
with each other and shall use their respective reasonable best efforts to obtain
each of the third-party consents set forth in Section 4.6 of the TRW Disclosure
Letter. With respect thereto, subject to applicable law, TRW and Buyer will
(a) communicate the initial disclosure of Buyer’s agreement to acquire the
Business to third parties and the form and content of such disclosure shall be
mutually agreed upon by Buyer and TRW and (b) permit the other party to review
in advance any proposed communication between it and any third party regarding
any such consent.

     Section 6.22 Claim Management.

     (a)  Buyer agrees that it will not, and agrees to use and use its
reasonable best efforts to ensure that its Affiliates do not, voluntarily or by
discretionary action, accelerate the timing, or increase the cost, of any
obligations of TRW under this

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Agreement relating to Shared Campaign Claims or Pre-Closing Customer Contract
Claims, except as required by law.

     (b)  If pursuant to Section 2.4(a)(iii) or (iv) hereof Buyer shall manage
any proceedings relating to any Shared Campaign Claims or Pre-Closing Customer
Contract Claims, Buyer must conduct its actions in a good workmanlike and
expeditious manner, consistent with industry standards, and use only competent
and qualified professionals with the goal of minimizing any amounts payable
consistent with industry practice and consistent with the ordinary course of
business of the Business.

     (c)  In connection with management of any Shared Campaign Claims or
Pre-Closing Customer Contract Claims for which TRW shall bear sole liability
pursuant to Section 2.4 hereof, Buyer shall: (i) consult with TRW in connection
with such management; (ii) provide any material correspondence to and from the
parties seeking payment pursuant to any Shared Campaign Claims or Pre-Closing
Customer Contract Claims, that is reasonably requested by TRW; and (iii) give
due and proper consideration to all reasonable directions of TRW in the conduct
of such management. With respect to all Shared Campaign Claims and Pre-Closing
Customer Contract Claims, Buyer shall provide TRW with quarterly reports on the
progress of all settlements of Shared Campaign Claims and Pre-Closing Customer
Contract Claims.

ARTICLE II

CONDITIONS

     Section 7.1 Conditions to Each Party’s Obligations. The respective
obligation of each party to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing of the following conditions:

     (a)  all authorizations, consents, registrations, notices or approvals
required by third parties (other than Governmental Antitrust Entities) and set
forth in Schedule 7.1(a) hereto shall have occurred or been obtained;

     (b)  any waiting period (and any extension thereto) (i) applicable to the
consummation of the transactions contemplated by this Agreement under the HSR
Act shall have expired or been terminated and (ii) approval by the European
Commission of the transactions contemplated by this Agreement shall have been
obtained pursuant to the EU Merger Regulation;

     (c)  all waiting periods applicable to the transactions contemplated by
this Agreement or any Ancillary Agreement under any applicable other antitrust
or competition law shall have expired or been terminated, all filings required
by law to be made prior to Closing by TRW or Buyer with, and all consents,
approvals and authorizations required by law to be obtained prior to Closing by
TRW or by Buyer from any Governmental Antitrust Entities under any applicable
foreign antitrust or

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competition law (collectively, “Governmental Antitrust Consents”) in order to
consummate the transactions contemplated by this Agreement shall have been made
or obtained (as the case may be), except where the failure for such waiting
periods to expire or to be terminated, to make such filings, or to obtain any
such Governmental Antitrust Consents, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect if the transactions
contemplated by this Agreement were consummated to the extent legally
permissible;

     (d)  no provision of any applicable law or regulation and no judgment,
injunction (preliminary or permanent), order or decree that prohibits, makes
illegal or enjoins the consummation of the transactions contemplated by this
Agreement shall be in effect (each party taking any and all steps required by
Section 6.3 and Section 6.4 of this Agreement), except where the applicable law
or regulation or judgment, injunction, order or decree is not reasonably likely
to have more than an immaterial effect on the Business if the transactions
contemplated by this Agreement were consummated to the extent legally
permissible; and

     (e)  the Preliminary Transfers shall have been completed in accordance with
Schedule 2.1 hereto.

     Section 7.2 Conditions to Obligations of Buyer. The obligation of Buyer to
effect the transactions contemplated by this Agreement shall further be subject
to the satisfaction at or prior to the Closing of the following conditions,
which are for the benefit of Buyer only and may only be waived by Buyer at or
prior to the Closing in its sole discretion:

     (a)  all representations and warranties of TRW in this Agreement (without
taking into account any materiality or Material Adverse Effect qualification)
shall be true and correct, except where such failure to be so true and correct,
individually or in the aggregate, has not resulted in, and would not be
reasonably likely to result in, a Material Adverse Effect, in each case as of
the Closing Date with the same effect as though such representations and
warranties had been made at and as of such time, other than representations and
warranties that expressly speak as of a specific date or time (which shall be
true and correct, as modified in the manner described above with respect to
representations and warranties which do not speak as of a specific date or time,
only as of such time);

     (b)  TRW shall have performed and complied with in all material respects
all of its covenants, undertakings and agreements required by this Agreement to
be performed or complied with by it at or prior to the Closing; and

     (c)  TRW shall have delivered or caused to be delivered to Buyer each of
the documents specified in Schedule 3.2(a) hereof;

     Section 7.3 Conditions to Obligations of TRW. The obligation of TRW to
effect the transactions contemplated by this Agreement shall be further subject
to the satisfaction at or prior to the Closing of the following conditions,
which are for the

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benefit of TRW only and may only be waived by TRW at or prior to the Closing in
its sole discretion:

     (a)  all representations and warranties of Buyer in this Agreement (without
taking into account any materiality or material adverse effect qualification)
shall be true and correct, except where such failure to be so true and correct,
individually or in the aggregate, has not resulted in and would not be
reasonably likely to result in, a material adverse effect on Buyer’s ability to
consummate the transactions contemplated hereby, in each case as of the Closing
Date with the same effect as though such representations and warranties had been
made at and as of such time, other than representations and warranties that
speak as of a specific date or time (which shall be true and correct, as
modified in the manner described above with respect to representations and
warranties which do not speak as of a specific date or time, only as of such
time);

     (b)  Buyer shall have performed and complied with in all material respects
all of its respective covenants, undertakings and agreements required by this
Agreement to be performed or complied with by it at or prior to the Closing;

     (c)  Buyer shall have delivered or caused to be delivered to TRW each of
the documents specified in Schedule 3.2(b) hereof.

ARTICLE III

TERMINATION

     Section 8.1 Termination. This Agreement may be terminated at any time prior
to the Closing by:

     (a)  mutual written consent of TRW and Buyer;

     (b)  either TRW or Buyer if the Closing shall not have occurred on or prior
to the six month anniversary of this Agreement; provided, however, that if
(i) the Closing has not occurred by such date by reason of nonsatisfaction of
any of the conditions set forth in Section 7.1(a), Section 7.1(b) or
Section 7.1(c) and (ii) all other conditions set forth in Article VII have
heretofore been satisfied or waived or are then capable of being satisfied, then
such date shall automatically be extended to the date that is the nine month
anniversary of this Agreement; provided, further, that the right to terminate
this Agreement under this Section 8.1(b) shall not be available to any party
whose failure to fulfill in any material respect any obligation under this
Agreement has caused or resulted in the failure of the Closing to occur on or
before such date, whether or not such date has been so extended;

     (c)  TRW (i) if Buyer shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform would
render any condition to TRW’s obligations under Section 7.1 or 7.3 hereof
incapable of being

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satisfied; provided, however, that if such breach or failure to perform is
curable by Buyer through the exercise of its reasonable best efforts, and for so
long as Buyer continues to exercise such reasonable best efforts, TRW may not
terminate this Agreement under this Section 8.1(c); provided, further, that the
preceding proviso shall not in any event be deemed to extend the date set forth
in Section 8.1(b), or (ii) if a condition under Section 7.1 or 7.3 hereof to
TRW’s obligations hereunder has been rendered incapable of being satisfied;

     (d)  Buyer (i) if TRW shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform would
render any condition to Buyer’s obligations under Section 7.1 or 7.2 hereof
incapable of being satisfied; provided, however, that if such breach or failure
to perform is curable by TRW through the exercise of its reasonable best
efforts, and for so long as TRW continues to exercise such reasonable best
efforts, Buyer may not terminate this Agreement under this Section 8.1(d);
provided, further, that the preceding proviso shall not in any event be deemed
to extend the date set forth in Section 8.1(b), or (ii) if a condition under
Section 7.1 or 7.2 hereof to Buyer’s obligations hereunder has been rendered
incapable of being satisfied; or

     (e)  either TRW or Buyer if any court of competent jurisdiction or other
competent Governmental Entity shall have issued a statute, rule, regulation,
order, decree or injunction or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such statute, rule, regulation, order, decree or injunction or
other action shall have become final and non-appealable, unless the failure to
consummate the Closing because of such action by a Governmental Entity shall be
due to the failure of the party seeking to terminate this Agreement to have
fulfilled any of its obligations under Section 6.3 or Section 6.4.

     Section 8.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1 hereof, this Agreement (except for
Section 6.2(b), Section 6.6(a), Section 8.4 and Article X) shall forthwith
become void and have no effect, without any liability on the part of any party
hereto or its Affiliates; provided, however, that nothing contained in this
Section 8.2 shall relieve any party from liability for any breach of this
Agreement.

     Section 8.3 Extension; Waiver. At any time prior to the Closing, each of
the parties hereto may (i) extend the time for the performance of any of the
obligations or acts of the other party hereto, (ii) waive any inaccuracies in
the representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, (iii) waive compliance with any of the
agreements of the other party contained herein or (iv) waive any condition to
its obligations hereunder. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. No failure or delay in exercising any
right, power or privilege hereunder will operate as a waiver thereof, nor will
any single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege hereunder.

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ARTICLE IV

SURVIVAL; INDEMNIFICATION

Section 9.1 Survival Periods.

     (a)  All representations and warranties of the parties contained in this
Agreement or any certificate or instrument delivered in connection herewith
shall survive the Closing for a period of eighteen (18) months immediately
following the date of the Closing, except that (i) the representations and
warranties contained in Section 4.16 (Environmental Matters) shall not survive
the Closing, and (ii) the representations and warranties contained in
Section 4.12 (Taxes) shall survive the Closing for the period of the applicable
statute of limitations. The Closing shall not in and of itself constitute a
waiver by any party of any rights it may have with respect to any obligations of
the other parties hereunder. In the event that an Indemnified Party (as defined
below) provides written notice in accordance with Section 10.1 to the
Indemnifying Party (as defined below) within the 18 month period set forth in
the first sentence of this Section 9.1(a), and such claim shall not have been
finally resolved before the expiration of the applicable period referred to in
the first sentence of this Section 9.1(a), any representation, warranty,
covenant or agreement that is the basis for such claim shall continue to survive
and shall remain a basis for indemnity only as to such specific claim (but as to
no other claim) until such claim is finally resolved. Notwithstanding the
foregoing, there shall be no period of time within which notice of or a claim
for indemnity against TRW must be provided by Buyer with respect to those items
set forth in Section 9.2(a)(iii), (iv) or (v), or a claim for indemnity against
Buyer must be provided by TRW with respect to those items set forth in
Section 9.2(b)(iii) or (iv) hereof.

     (b)  This Section 9.1 shall not limit any covenant or agreement of the
parties contained in this Agreement or the Ancillary Agreements which by its
terms contemplates performance after the Closing, and shall not extend the
applicability of any covenant or agreement of the parties contained in this
Agreement or the Ancillary Agreements which by its terms solely relates to the
period between the date hereof and the Closing.

     Section 9.2 Indemnification. Except for all claims related to Taxes (which
shall be governed solely by Section 6.10) and subject to the other provisions of
this Article IX, from and after the Closing:

     (a)  TRW shall indemnify, defend and hold harmless Buyer and its Affiliates
from and against any and all costs and expenses (including reasonable attorney’s
fees), suits, proceedings, judgments, settlements, fines, losses, claims,
liabilities, deficiencies, interest, awards, penalties, demands, assessments and
damages, (excluding punitive, special, exemplary, consequential, incidental or
indirect damages unless payable to a third party and directly attributable to
actions of TRW or its Affiliates, but including losses attributable to the loss
of profits of the Business that are directly attributable to breaches of this
Agreement by TRW or its Affiliates) (collectively, “Damages”) to the extent
relating to or arising out of (i) any breach of any representation

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or warranty made by TRW in this Agreement or the Ancillary Agreements (such
Damages determined, except in the case of Section 4.7 (Financial Statements),
without regard to any materiality or Material Adverse Effect qualification),
(ii) breach of or failure to perform any covenant, agreement or undertaking,
made by or on behalf of TRW under this Agreement, required to be taken prior to
the Closing, (iii) breach of or failure to perform any covenant, agreement or
undertaking, made by or on behalf of TRW under this Agreement, required to be
taken after the Closing, (iv) any failure of TRW to comply with any applicable
bulk sales laws in connection with the transfers hereunder (unless any Damages
thereunder arise as a result of Buyer’s failure to satisfy the Assumed
Liabilities); or (v) any Excluded Liability; provided, however, that Buyer will
pay over to TRW any insurance proceeds received in respect of any such Damages
to the extent such Damages shall have been paid by TRW pursuant to this
Section 9.2(a) and such proceeds have not already been applied by Buyer to
offset all or any portion of such Damages.

     (b)  Buyer shall indemnify and hold harmless TRW and its Affiliates from
and against any Damages to the extent caused by (i) any breach of any
representation or warranty made by Buyer in this Agreement or the Ancillary
Agreements, (ii) breach of or the failure to perform any covenant, agreement or
undertaking, made by or on behalf of Buyer under this Agreement, required to be
taken prior to the Closing, (iii) breach of or failure to perform any covenant,
agreement or undertaking, made by or on behalf of Buyer under this Agreement,
required to be taken after Closing or (iv) the Assumed Liabilities; provided,
however, that TRW will pay over to Buyer any insurance proceeds received in
respect of any such Damages to the extent such Damages shall have been paid by
Buyer pursuant to this Section 9.2(b) and such proceeds have not already been
applied by TRW to offset all or any portion of such Damages.

     (c)  For purposes of this Agreement, the term “Indemnified Party” shall
mean any party hereto which shall incur or suffer any Damages in respect of
which indemnification may be sought pursuant to the terms of this Article IX.
For purposes of this Agreement, Damages shall be calculated after giving effect
to any related tax benefit net of any reserves on the Closing Balance Sheet and
amounts recovered from third parties, including amounts recovered under
insurance policies with respect to such Damages, net of any costs to recover
such amounts. Any Indemnified Party having a claim under these indemnification
provisions shall make a good faith effort to recover all losses, costs, damages
and expenses from insurers of such Indemnified Party under applicable insurance
policies so as to reduce the amount of any Damages hereunder. No Indemnified
Party will, in any event, be entitled to any incidental, indirect,
consequential, special, exemplary or punitive damages resulting from or arising
out of any claim under this Section 9.2, unless payable to a third party and
directly attributable to actions of TRW or its Affiliates (it being understood
that damages attributable to the loss of profits of the Business that are
directly attributable to breaches of this Agreement by TRW or its Affiliates
shall be recoverable). Notwithstanding, anything in this Article IX, Section 2.4
shall govern all indemnification claims for any and all Environmental
Liabilities, Shared Campaign Claims, Pre-Closing Customer Contract Claims, and
Product Liability Claims, and Buyer shall not be entitled to any indemnification
claim for a breach of a representation, warranty or covenant relating to such
matters.

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     Section 9.3 Claims. If an Indemnified Party intends to seek indemnification
pursuant to this Article IX with respect to third party claims, such Indemnified
Party shall promptly provide written notice to the party from whom
indemnification is being sought (the “Indemnifying Party”), in writing in
accordance with Section 10.1 hereof of such claim describing such claim in
reasonable detail including the sections of this Agreement which form the basis
for such claim; copies of all material written evidence thereof and the
estimated amount of the Damages that have been or may be sustained by an
Indemnified Party; provided that the failure to provide such notice shall not
affect the obligations of the Indemnifying Party unless it is actually
materially prejudiced thereby, subject, however, to the time periods specified
in Section 9.1 hereof. In the event that such claim involves a claim by a third
party against the Indemnified Party, the Indemnifying Party shall have twenty
days after receipt of such notice to decide whether it will undertake, conduct
and control, through counsel of its own choosing and at its own expense, the
settlement or defense thereof, and if it so decides, the Indemnified Party shall
cooperate with the Indemnifying Party in connection with the settlement or
defense of such claim; provided, however, that the Indemnified Party may
participate in such settlement or defense through counsel chosen by it;
provided, further, that the fees and expenses of such counsel shall be borne by
the Indemnified Party. Notwithstanding anything in this Section 9.3 to the
contrary, the Indemnifying Party may not, without the consent of the Indemnified
Party, settle or compromise any action or consent to the entry of any judgment
unless such settlement or compromise includes as an unconditional term thereof
the delivery by the claimant or plaintiff to the Indemnified Party of a duly
executed written release of the Indemnified Party from all liability in respect
of such action, which release shall be reasonably satisfactory in form and
substance to counsel for the Indemnified Party; provided that the Indemnifying
Party shall not effect a settlement or compromise without the prior written
consent of the Indemnified Party if such settlement or compromise contains
injunctive, equitable or other provisions that materially affect, the ongoing
business of the Indemnified Party. So long as the Indemnifying Party has agreed
to undertake, conduct and control the settlement or defense of any such claim
and is contesting any such claim in good faith, the Indemnified Party shall not
pay or settle any such claim without the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. If the Indemnifying Party
elects not to defend the Indemnified Party against such claim or demand, whether
by not giving the Indemnified Party timely notice as provided above or
otherwise, then the Indemnified Party shall have the right to defend against
such claim or demand and the portion of any such claim or demand as to which the
defense by the Indemnified Party is unsuccessful (and the reasonable costs and
expenses pertaining to such defense) shall be a liability of the Indemnifying
Party hereunder.

     Section 9.4 Limitation of Liability.

     (a)  In no event shall TRW be liable for indemnification pursuant to
Section 9.2(a)(i) for any claim that is less than $100,000 (the “Minimum Claim
Amount”) and in no event shall TRW be liable for indemnification pursuant to
Section 9.2(a)(i) unless and until the aggregate of all such claims that exceed
the Minimum Claim Amount result in total Damages which are incurred or suffered
by Buyer that exceed five million dollars ($5,000,000) (the “Threshold”), in
which case Buyer shall be entitled to

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indemnification for only such Damages that are in excess of the threshold; and
provided, however, that the aggregate liability of TRW pursuant to Section
9.2(a)(i) shall not be in excess of an aggregate amount of twenty-five percent
(25%) of the Purchase Price (the “Cap”).

     (b)  In no event shall Buyer be liable for indemnification pursuant to
Section 9.2(b)(i) for any claim that is less than the Minimum Claim Amount and
in no event shall Buyer be liable for indemnification pursuant to
Section 9.2(b)(i) unless and until the aggregate of all such claims exceeding
the Minimum Claim Amount result in total Damages which are incurred or suffered
by TRW that exceed the Threshold, in which case TRW shall be entitled to
indemnification for only such Damages that are in excess of the threshold; and
provided, however, that the aggregate liability of Buyer pursuant to
Section 9.2(b)(i) shall not be in excess of the Cap.

     Section 9.5 Nature of Remedies. If the Closing shall occur, the remedies
set forth in this Article IX shall be the sole and exclusive remedies of, and in
lieu of any other remedies that may be available to, the Indemnified Parties
arising out of or relating to, whether based on contract, tort or other claims,
this Agreement and the Business or any other agreements or documents signed or
executed in relation to the transactions contemplated hereby and thereby by the
parties to this Agreement or their Affiliates, except as otherwise expressly
provided in this Agreement or such other agreements or documents.

ARTICLE V

MISCELLANEOUS

     Section 10.1 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given (i) by personal delivery to the appropriate address as set forth below
(or at such other address for the party as shall have been previously specified
in writing to the other party), (ii) by reliable overnight courier service (with
confirmation) to the appropriate address as set forth below (or at such other
address for the party as shall have been previously specified in writing to the
other party), or (iii) by facsimile transmission (with confirmation) to the
appropriate facsimile number set forth below (or at such other facsimile number
for the party as shall have been previously specified in writing to the other
party) with follow-up copy by reliable overnight courier service the next
Business Day:

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     (a)   if to Buyer, to:

        Goodrich Corporation     Four Coliseum Centre     2730 West Tyvola Road
    Charlotte, N.C. 28217 USA     Attention: Corporate Secretary     Telecopy:
704-423-7034           and

     (b)   if to TRW, to:

        TRW Inc.     1900 Richmond Road     Cleveland, OH 44124 USA    
Attention: Secretary     Telecopy: 216-291-7070

     All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. (New York City time) and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place of
receipt.

     Section 10.2 Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by an
authorized officer of each party. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by an authorized
officer of the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.

     Section 10.3 Headings. The table of contents and the article, section,
paragraph and other headings contained in this Agreement are inserted for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.

     Section 10.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.

     Section 10.5 Entire Agreement. This Agreement, the Ancillary Agreements,
the TRW Disclosure Letter, the Exhibits hereto, the Schedules hereto, and the
Confidentiality Agreement constitute the entire agreement between the parties
hereto

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with respect to the subject matter hereof, and supersede and cancel all prior
agreements, negotiations, correspondence, undertakings, understandings and
communications of the parties, oral and written, with respect to the subject
matter hereof.

     Section 10.6 Governing Law. THIS AGREEMENT, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OR CHOICE OF LAWS OR ANY OTHER LAW THAT WOULD MAKE THE LAWS OF ANY
OTHER JURISDICTION OTHER THAN THE STATE OF NEW YORK APPLICABLE HERETO.

     Section 10.7 Resolution of Disputes. Except for the resolution of matters
as addressed by Sections 2.6 and 6.10 hereof (which shall be resolved in
accordance with the procedures set forth in those sections), all other disputes
arising out of or relating to this Agreement or an Ancillary Agreement or the
breach, termination or validity thereof or the parties’ performance hereunder or
thereunder (“Dispute”) shall be resolved as provided by this Section 10.7.

     (a)  Mediation.

       (i) If the Dispute has not been resolved by executive officer negotiation
within thirty (30) days of the disputing party’s notice requesting negotiation,
or if the parties fail to meet within twenty (20) days from delivery of said
notice, such Dispute shall be submitted to non-binding mediation in accordance
with the then-current Model Procedure for Mediation of Business Disputes of the
CPR Institute for Dispute Resolution. The mediation shall be completed within
thirty (30) days of the time the mediator is selected. Unless otherwise agreed,
the parties will select a mediator from the CPR Panels of Distinguished
Neutrals; provided, however, that if no mediator from that list can be mutually
agreed upon, each party will submit to the CPR its own list of acceptable
mediators from the CPR Panels of Distinguished Neutrals and the CPR shall
appoint one of those listed as the mediator for the parties. The costs of the
mediation, including the mediator’s fees, shall be borne equally by the parties
to the Dispute.          (ii) By agreeing to mediation, the parties do not
intend to deprive any court of its jurisdiction to issue an injunction,
attachment or other order in aid of mediation proceedings. The parties agree to
participate in good faith in the mediation to its conclusion. If the Dispute has
not been resolved by mediation within ninety (90) days of the disputing party’s
notice requesting negotiation pursuant to Section 10.7(a)(i), then either party
may pursue other available remedies. The parties hereby unconditionally and
irrevocably submit to the exclusive jurisdiction of the courts of the State of
New York located within the County of New York and of the United States of
America located in the

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  Southern District of the State of New York for the purpose of any preliminary
relief in aid of mediation or in connection with any other action or proceeding
arising out of this Agreement or any Ancillary Agreement, and hereby waive any
objection to such jurisdiction including without limitation objections by reason
of lack of personal jurisdiction, improper venue, or inconvenient forum.

     (b)  Notwithstanding anything to the contrary in this Agreement, TRW and
Buyer, as parties to the Confidentiality Agreement, acknowledge that their
remedies at law for a breach or threatened breach of the Confidentiality
Agreement would be inadequate and, in recognition of this fact, upon a breach or
threatened breach of the Confidentiality Agreement, either party to the
Confidentiality Agreement, without posting any bond, and in addition to all
other remedies which may be available, shall be entitled to immediately seek or
obtain equitable relief in the form of specific performance, a temporary
restraining order, a temporary or permanent injunction or any other equitable
remedy which may then be available.

     Section 10.8 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION, CLAIM, SUIT,
LITIGATION OR OTHER PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 10.9 Assignment. This Agreement may not be assigned by any party
hereto without the written consent of the other party; provided, however, that
Buyer may assign this Agreement or any of its rights, remedies and obligations
hereunder to one or more of its wholly-owned Subsidiaries without the consent of
TRW; provided, that Buyer guarantees the performance of such Subsidiaries and
provided further, that no such assignment shall relieve Buyer of any of its
rights and obligations hereunder.

     Section 10.10 Fees and Expenses. Except as otherwise provided in Section
6.6, whether or not the transactions contemplated by this Agreement are
consummated, each party shall bear its own fees and expenses incurred in
connection with the transactions contemplated by this Agreement.

     Section 10.11 Binding Nature; Third-Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their respective successors (whether by operation of law or otherwise) and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any other Person or Persons any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.

     Section 10.12 Severability. This Agreement shall be deemed severable; the
invalidity or unenforceability of any term or provision of this Agreement shall
not affect the validity or enforceability of this Agreement or of any other term
hereof, which shall remain in full force and effect, for so long as the economic
or legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially

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adverse to any party. TRW and Buyer hereby acknowledge and agree that the
covenants set forth in Section 6.16 and Section 6.17 are reasonable in scope and
in all other respects. If it is ever held that any restriction hereunder is too
broad to permit enforcement of such restriction to its fullest extent, each
party agrees that such restriction may be enforced to the maximum extent
permitted by law, and each party hereby consents and agrees that such scope may
be judicially modified accordingly in any proceeding brought to enforce such
restriction.

     Section 10.13 No Right of Setoff. Neither party hereto nor any Affiliate
thereof may deduct from, set off, holdback or otherwise reduce in any manner
whatsoever against any amounts such Persons may owe to the other party hereto or
any of its Affiliates any amounts owed by such other party or its Affiliates to
the first party or its Affiliates.

     Section 10.14 Currency. All monetary amounts mentioned or referred to
herein are in United States dollars unless otherwise indicated.

     Section 10.15 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.

     Section 10.16 Construction.

     (a)  For the purposes hereof, (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires, (ii) the words “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole (including the TRW
Disclosure Letter, the Schedules hereto and the Exhibits hereto) and not to any
particular provision of this Agreement, and article, section, paragraph, exhibit
and schedule references are to the articles, sections, paragraphs, and exhibits
and schedules of this Agreement unless otherwise specified, (iii) the words
“including” and words of similar import when used in this Agreement shall mean
“including, without limitation,” unless otherwise specified, (iv) the word “or”
shall not be exclusive, (v) Buyer and TRW will be referred to herein
individually as a “party” and collectively as “parties” (except where the
context otherwise requires), (vi) the phrases “used or held for use primarily in
the Business,” “primarily related to the Business” and “primarily arising from
the conduct of the Business” are to be determined in relation to the business of
TRW and its Affiliates collectively and (vii) the phrase “transactions
contemplated by this Agreement” or “transactions contemplated herein” shall
include the transactions contemplated by the Exhibits and Schedules to this
Agreement.

     (b)  The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no

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presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

     (c)  Any reference to any federal, state, local or non-U.S. statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

                  TRW INC.       By:     /s/ William B. Lawrence             

--------------------------------------------------------------------------------

      Name:
Title:   William B. Lawrence
Executive Vice President,
General Counsel and Secretary       GOODRICH CORPORATION       By:     /s/
Marshall O. Larsen             

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      Name:
Title:   Marshall O. Larsen
President and Chief Operating
Officer

 

 

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