Document:

EX-10(A) Amend #2 to Receivables Purchase Agrmt

 

Exhibit 10(a)

AMENDMENT NO. 2

dated as of April 1, 2002

to

RECEIVABLES PURCHASE AGREEMENT

Dated as of November 20, 2001

     This AMENDMENT NO. 2
(the “Amendment”) is executed as of April 1, 2002, among TRW RECEIVABLES INC., a Delaware corporation, as Seller, TRW INC., an
Ohio corporation, as Servicer, CHARTA CORPORATION, Delaware corporation
(“Charta”), CIESCO, L.P., a New York limited partnership (“CIESCO”), WCP
FUNDING, INC., a Delaware corporation (“WCP”), CORPORATE RECEIVABLES
CORPORATION, a California corporation (“CRC”), and CORPORATE ASSET FUNDING
COMPANY, INC., a Delaware corporation (“CAFCO”) (Charta, Ciesco, WCP, CRC and
CAFCO are collectively referred to as the “Conduit Purchasers” and each,
individually, a “Conduit Purchaser”), CITIBANK, N.A., as Committed Purchaser
and Managing Agent, and CITICORP NORTH AMERICA, INC., a Delaware corporation,
as Agent for the Conduit Purchasers and the Committed Purchasers. Capitalized
terms used herein without definition shall have the meanings ascribed thereto
in the “RPA” referred to below.

WITNESSETH:

     WHEREAS, the Seller, the Servicer and the other parties hereto are parties
to that certain Receivables Purchase Agreement dated as of November 20, 2001
(as amended, the “RPA”); and

     WHEREAS, the parties hereto have agreed to amend the RPA on the terms and
conditions hereinafter set forth;

     NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

     Section 1. Amendments to the RPA. The RPA is hereby amended as follows:

     1.1 The following definitions are hereby amended and restated in their
entirety as follows:

		
	 	     ‘ “Affiliate Obligor Overconcentration Amount” means, at any time,
the amount by which the aggregate Outstanding Balance of Eligible
Receivables owing from Affiliate Obligors exceeds the product of
(i) 10.0% and (ii) the Unadjusted Net Receivables Pool Balance at
such time.’

1

 

		
	 	     ‘ “Canadian Obligor Overconcentration Amount” means, at any time,
the amount by which the aggregate Outstanding Balance of Eligible
Receivables owing by Canadian Obligors exceeds the product of (i)
10.0% and (ii) the Unadjusted Net Receivables Pool Balance at such
time.’

		
	 	     ‘ “Dilution Reserve” means, at any time, an amount equal to the
product of (i) the Dilution Reserve Percentage and (ii) the
Unadjusted Net Receivables Pool Balance at such time.’

		
	 	     ‘ “Loss Reserve” means, at any time, an amount equal to the product
of (i) the Loss Reserve Percentage and (ii) the Unadjusted Net
Receivables Pool Balance at such time.’

		
	 	     ‘ “Net Receivables Pool Balance” means at any time of calculation
hereunder, an amount equal to (i) Unadjusted Net Receivables Pool
Balance at such time, minus (ii) the Aggregate Overconcentration
Amount at such time.’

		
	 	     ‘ “Obligor Overconcentration Amount” means, at any time, the sum of
(A) the aggregate, for all Obligors not having a Special
Concentration Limit, of the amounts by which the aggregate
Outstanding Balance of all Eligible Receivables of each such
Obligor exceeds the product of (i) the applicable Concentration
Limit for such Obligor and (ii) the Unadjusted Net Receivables Pool
Balance at such time, plus (B) the aggregate, for all Obligors
having a Special Concentration Limit, of the amounts by which the
aggregate Outstanding Balance of all Eligible Receivables of each
such Obligor exceeds the lesser of (1) the product of (I) the
applicable Special Concentration Limit for such Obligor and (II)
the Unadjusted Net Receivables Pool Balance at such time and (2)
the product of (x) the applicable Special Concentration Limit for
such Obligor and (y) the Purchase Limit at such time.’

     1.2 The following definition is added in the appropriate location:

		
	 	     ‘ “Unadjusted Net Receivables Pool Balance” means at any time of
calculation hereunder, an amount equal to (i) the Outstanding
Balances of all Eligible Receivables, minus (ii) the aggregate
Outstanding Balance of Defaulted Receivables that would otherwise
be Eligible Receivables at such time, minus (iii) all cash
Collections received by the Servicer in respect of the Receivables
described in clause (i) above which have not been applied to reduce
the Outstanding Balance of such Receivables, minus (iv) the
aggregate amount of reductions that would result from the
application of all Dilution Factors which have not yet been applied
by the Servicer to the Outstanding Balance of any Receivables.’

     1.3 Clause (iii) of Section 5.01(m) is hereby deleted in its entirety and
replaced with the following:

		
	 	     “(iii) by no later than March 29, 2002, (A) all Collections
currently remitted to the Lock-Box Account maintained at Comerica
Bank are re-directed to a Lock-Box Account subject to a Lock-

2

 

		
	 	     Box
Agreement or (B) a Lock-Box Agreement is entered into with respect
to the Lock-Box Accounts maintained at Comerica Bank”

     1.4 Clause (iii) of Section 5.04(x) is hereby deleted in its entirety and
replaced with the following:

		
	 	     “(iii) by no later than March 29, 2002, (A) all Collections
currently remitted to the Lock-Box Account maintained at Comerica
Bank are re-directed to a Lock-Box Account subject to a Lock-Box
Agreement or (B) a Lock-Box Agreement is entered into with respect
to the Lock-Box Accounts maintained at Comerica Bank”

		
	 	     1.5 Item 3 on Schedule IV is hereby deleted in its entirety and
replaced with the following:

		
	 	     “3. By no later than March 29, 2002, the Seller shall take all
steps necessary to (A) re-direct all Collections currently remitted
to the Lock-Box Account maintained at Comerica Bank to a Lock-Box
Account subject to a Lock-Box Agreement or (B) enter into a
Lock-Box Agreement with respect to the Lock-Box Accounts maintained
at Comerica Bank.”

     Section 2. Effective Date. This Amendment shall become effective and
shall be deemed effective as of the date first written above when the Agent
shall have received a copy of this Amendment duly executed by each of the
parties hereto.

     Section 3. Reference to and Effect on the RPA. Upon the effectiveness of
this Amendment, (i) the Seller and the Servicer each hereby reaffirms all
covenants, representations and warranties made by it in the RPA to the extent
the same are not amended hereby and agrees that all such covenants,
representations and warranties shall be deemed to have been remade as of the
effective date of this Amendment and (ii) each reference in the RPA to “this
Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be, and any references to the RPA in any other document, instrument or
agreement executed and/or delivered in connection therewith shall mean and be,
a reference to the RPA as amended hereby.

     Section 4. Expenses. The Seller hereby reaffirms its obligations under
Section 10.06(a) of the RPA to pay the reasonable fees, costs and expenses
(including, without limitation, the reasonable fees and expenses of counsel)
incurred by the Agent and the Managing Agent in connection with the execution
and delivery of this Amendment and the agreements and instruments related
hereto.

     Section 5. Effect. Except as otherwise amended by this Amendment, the
RPA, the Sale Agreement, the Transfer Agreements and the other Facility
Documents shall each continue in full force and effect and are hereby ratified
and confirmed.

     Section 6. Governing Law. This Amendment will be governed by and
construed in accordance with the laws of the State of New York.

3

 

     Section 7. Severability. Each provision of this Amendment shall be
severable from every other provision of this Amendment for the purpose of
determining the legal enforceability of any provision hereof, and the
unenforceability of one or more provisions of this Amendment in one
jurisdiction shall not have the effect of rendering such provision or
provisions unenforceable in any other jurisdiction.

     Section 8. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

4

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.

	 	 	 
		
TRW RECEIVABLES INC., as Seller
	 	 	 
	 	By	
 /s/ E. L. Bennardo
	 	 	

	 	 	
Name: E. L. Bennardo
	 	 	
Title: Assistant Treasurer
	 	 	 
	 	

TRW INC., as Servicer
	 	 	 
	 	By	
/s/ Ronald P. Vargo
	 	 	

	 	 	
Name: R. P. Vargo
	 	 	
Title: Vice President and Treasurer
	 	 	 
	 	CITICORP NORTH AMERICA, INC., as Agent
	 	 	 
	 	By	
/s/ David J. Donofrio
	 	 	

	 	 	
Name: David J. Donofrio
	 	 	
Title: Vice President
	 	 	 
	 	CHARTA CORPORATION
	 	 	 
	 	By:	
Citicorp North America, Inc., as
Attorney-in-Fact
	 	 	 
	 	By	
/s/ David J. Donofrio
	 	 	

	 	 	
Name: David J. Donofrio
	 	 	
Title: Vice President
	 	 	 
	 	CIESCO, L.P.
	 	By:	
Citicorp North America, Inc., as Attorney-in-Fact
	 	 	 
	 	By	
/s/ David J. Donofrio
	 	 	

	 	 	
Name: David J. Donofrio
	 	 	
Title: Vice President

Signature Page
to
Amendment No.
1

 

	 	 	 
	 	 	
CORPORATE ASSET FUNDING COMPANY, INC.
	 	 	

	 	 	
By: Citicorp North America, Inc.,
as Attorney-in-Fact
	 	 	

	 	 	
By /s/ David J. Donofrio
	 	 	

	 	 	
Name: David J. Donofrio
	 	 	
Title: Vice President
	 	 	 
	 	 	
CORPORATE RECEIVABLES CORPORATION
	 	 	

	 	 	
By: Citicorp North America, Inc., as
Attorney-in-Fact
	 	 	

	 	 	
By /s/ David J. Donofrio
	 	 	

	 	 	
Name: David J. Donofrio
	 	 	
Title: Vice President
	 	 	 
	 	 	
WCP FUNDING, INC.
	 	 	

	 	 	
By: Citicorp North America, Inc., as
Attorney-in-Fact
	 	 	

	 	 	
By /s/ David J. Donofrio
	 	 	

	 	 	
Name: David J. Donofrio
	 	 	
Title: Vice President
	 	 	 
	 	 	
CITIBANK, N.A., as Committed Purchaser and
Managing Agent
	 	 	

	 	 	
By /s/ David J. Donofrio
	 	 	

	 	 	
Name:
	 	 	
Title: Attorney-in-fact

Signature Page
to
Amendment No.
1EX-10(D) Master Agreement of Purchase of Sale

 

Exhibit 10(d)

MASTER AGREEMENT OF PURCHASE AND SALE

between

GOODRICH CORPORATION

and

TRW INC.

Dated as of June 18, 2002

 

 

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

 

 

	 	 	 	 	 
	 	 	 	 	
	 	 	 	 	
	
	
	
	

	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

ii

 

	 	 	 	 	 
	 	 	 	 	
	 	 	 	 	
	
	
	
	

	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

iii

 

	 	 	 
	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

iv

 

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.

 

 

     “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.

2

 

     “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

3

 

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.

4

 

     “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

5

 

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.

6

 

     “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.

7

 

     “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

8

 

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,

9

 

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:

10

 

	 	 	 	 	 
	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)

11

 

	 	 	 	 	 
	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)

12

 

	 	 	 	 	 
	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)

13

 

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

14

 

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;

15

 

		
	 	     (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.

16

 

     (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

17

 

		
	 	     (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

 

	 
	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,

19

 

	 	 
	 	
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

20

 

	 
	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

21

 

	 	 
	 	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

22

 

	 	 
	 	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

23

 

	 
	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

24

 

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

25

 

	 	 
	 	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.

26

 

		
	 	     (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

27

 

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

28

 

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.

29

 

     (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.

30

 

     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.

31

 

     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.

32

 

     (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

33

 

	 
	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.

34

 

     (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

35

 

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

36

 

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

37

 

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

38

 

	 	 
	 	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.

39

 

     (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

40

 

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

41

 

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.

42

 

     (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

43

 

	 	 
	 	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.

44

 

     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

45

 

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

47

 

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

48

 

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.

49

 

     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;

50

 

		
	 	     (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

51

 

		
	 	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

52

 

		
	 	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

53

 

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

54

 

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

55

 

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:

57

 

		
	 	     (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

58

 

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

59

 

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

60

 

		
	 	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

61

 

		
	 	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

62

 

		
	 	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

64

 

		
	 	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

65

 

		
	 	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

66

 

		
	 	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.

67

 

		
	 	     (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.

68

 

		
	 	     (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.

69

 

		
	 	     (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

70

 

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.

71

 

     (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.

72

 

		
	 	     (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

73

 

		
	 	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.

74

 

     (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.

75

 

     (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

76

 

		
	 	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

77

 

		
	 	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;

78

 

		
	 	     (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

79

 

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

81

 

			
	 	 	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.

82

 

			
	 	 	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

83

 

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.

84

 

     (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;

85

 

		
	 	     (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

86

 

 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

87

 

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

95

 

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

96

 

 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

102

 

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 

103

 

		
	 	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

104

 

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

105

 

 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	 	  
	 	 	 	 	

	 	 		 	Name:
Title:	 	Marshall O. Larsen

President and Chief Operating

Officer

 

 

106

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