Document:

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                                                                    Exhibit 10.4

                     NOTE PURCHASE AND SETTLEMENT AGREEMENT

            This NOTE PURCHASE AND SETTLEMENT AGREEMENT (this "Agreement"),
dated as of October 10, 2004 by and among TRW AUTOMOTIVE INTERMEDIATE HOLDINGS
CORP., a Delaware corporation (including any successor thereto, "Purchaser"),
TRW AUTOMOTIVE HOLDINGS CORP., a Delaware corporation (including any successor
thereto, "TRW"), AUTOMOTIVE INVESTORS L.L.C., a Delaware limited liability
company (together with any successor thereto and any permitted transferee
thereof, "AI LLC"), NORTHROP GRUMMAN CORPORATION, a Delaware corporation
(together with any successor thereto and any permitted transferee thereof,
"Northrop Grumman"), and NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP., an Ohio
corporation formerly known as TRW Inc. (including any successor thereto,
"Seller"). Each of Purchaser, TRW, AI LLC, Northrop Grumman and Seller is
referred to in this Agreement as a "Party" and, collectively, the "Parties".
Capitalized terms not defined herein have the respective meanings given to them
in the Master Purchase Agreement or the Employee Matters Agreement referred to
below.

                              W I T N E S S E T H:

            WHEREAS, BCP Acquisition Company L.L.C., a Delaware limited
liability company ("BCP LLC"), and Northrop Grumman entered into a Master
Purchase Agreement, dated as of November 18, 2002, which was subsequently
amended by Amendment No. 1 thereto, dated as of December 20, 2002, and Amendment
No. 2 thereto, dated as of February 28, 2003 (as amended, the "Master Purchase
Agreement"), and BCP LLC thereafter assigned its rights under the Master
Purchase Agreement to AI LLC;

            WHEREAS, pursuant to the Master Purchase Agreement, Purchaser issued
the $600 million original face amount of Seller Subordinated Note dated as of
February 28, 2003 plus all accrued interest thereon (as amended, the "Note"),
which Note is owned by Seller;

            WHEREAS, Seller now wishes to sell, and Purchaser now wishes to
repurchase, the Note on the terms and subject to the conditions set forth
herein;

            WHEREAS, Seller and TRW entered into an Employee Matters Agreement
dated as of February 28, 2003 (the "Employee Matters Agreement");

            WHEREAS, various issues have arisen among the Parties relating to
certain Covered Matters (as defined below) arising under the Master Purchase
Agreement and the Employee Matters Agreement;

            WHEREAS, the Parties have determined that, in order to facilitate
the purchase and sale of the Note and to avoid further expense, inconvenience
and disruption relating to such issues, it is in their respective best interests
to execute such purchase and sale and to settle any and all claims related to
such Covered Matters; and

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            NOW THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

            1.    Purchase and Sale; Settlement Payments.

            (a)   On the Closing Date referred to below, and on the terms and
subject to the conditions referred to herein:

                  (i) in consideration of the releases set forth in Section 5
            hereof with respect to the matters referred to in clause (ii) of
            Annex 1 hereto, Northrop Grumman shall pay (or cause to be paid) an
            aggregate of $52.5 million to or to the order of AI LLC (for the
            benefit of AI LLC and certain other stockholders of TRW) in
            immediately available funds in accordance with wire transfer
            instructions separately provided to Northrop Grumman by AI LLC;

                  (ii) (x) if the condition referred to in clause (x) of Section
            13(a)(iv) and all other conditions set forth in Section 13(a) and
            (b) (other than the condition referred to in clause (y) of Section
            13(a)(iv)) shall have been satisfied (or waived to the extent
            permitted by Section 13(a) or Section 13(b), as applicable), then
            Seller shall sell the Note to Purchaser, and Purchaser shall
            purchase the Note, and in consideration therefor, and for the other
            releases set forth in Section 5 hereof and the other agreements set
            forth herein, Purchaser shall pay, or cause to be paid, to Seller
            $493.5 million in immediately available funds in accordance with
            wire transfer instructions separately provided to Purchaser by
            Seller (the alternative in this clause (x) herein referred to as the
            "Note Sale Alternative"); or (y) if the condition referred to in
            clause (x) of Section 13 (a)(iv) has not been satisfied, but the
            condition referred to in clause (y) of Section 13(a)(iv) and all
            other conditions set forth in Section 13(a) and (b) (other than the
            condition referred to in clause (x) of Section 13(a)(iv)) shall have
            been satisfied (or waived to the extent permitted by Section 13(a)
            or Section 13(b), as applicable), then, in lieu of the purchase and
            sale of the Note, but in consideration for the other releases set
            forth in Section 5 hereof and the other agreements set forth herein,
            including the Note Amendment referred to below, Northrop Grumman
            shall pay (or cause to be paid) $40.5 million to TRW in immediately
            available funds in accordance with wire transfer instructions
            separately provided to Northrop Grumman by TRW, and Purchaser and
            Seller shall execute an amendment to the Note deleting the second,
            third and fourth sentences of Section 10.1 and an amendment to the
            letter agreement dated June 23, 2004 between the Seller and the
            Purchaser to replace the words "six months" in the proviso in the
            first paragraph of section 2 thereof with the phrase "six months
            plus forty-five days" (collectively, the "Note Amendment", and the
            alternative in this clause (y) herein referred to as the "Note
            Amendment Alternative"); and

                  (iii) TRW shall cause the TRW Automotive U.S. SPP to pay (or
            cause to be paid) $21,356,766 plus earnings through September 30,
            2004 in the amount of $5,681,025 calculated utilizing the
            methodology provided in the Employee

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            Matters Agreement to the TRW SPP in immediately available funds in
            accordance with wire transfer instructions separately provided to
            TRW by the TRW SPP Trustee.

            (b)   As soon as reasonably possible following the Closing and upon
request by the trustee for the TRW SPP, TRW shall cause the TRW Automotive U.S.
SPP to pay (or cause to be paid) to the TRW SPP the amount actually paid by the
TRW SPP, but in no event more than $4,730,420, in respect of payments previously
made by the TRW SPP to TRW Automotive Participants during the period from March
2003 through May 2003 to participants in the TRW Automotive U.S. SPP.

            2.    Closing; Closing Deliveries.

            (a)   The closing of the transactions contemplated by Section 1
hereof (the "Closing") will be held at the offices of Simpson Thacher & Bartlett
LLP, 425 Lexington Avenue, New York, New York 10017 within three Business Days
after the date on which the last to be fulfilled or waived of the conditions set
forth in Section 13 (other than those conditions that by their nature are to be
fulfilled at the Closing) are fulfilled or waived in accordance with this
Agreement, or at such other place and time as the parties may agree in writing.
The date on which the Closing will occur is referred to herein as the "Closing
Date".

            (b)   At the Closing:

            (i)   Northrop Grumman shall pay, or cause to be paid, to AI LLC the
                  consideration described in Section 1(a)(i) hereof;

            (ii)  (A) under the Note Sale Alternative, Seller shall deliver or
                  cause to be delivered to Purchaser the Note, free and clear of
                  all Liens, or (B) under the Note Amendment Alternative,
                  Purchaser and Seller shall execute and deliver the Note
                  Amendment and Northrop Grumman shall pay, or cause to be paid,
                  to TRW the consideration described in Section 1(a)(ii)(y)
                  hereof; and

            (iii) TRW shall cause TRW Automotive U.S. SPP to deliver to the TRW
                  SPP the consideration described in Section 1(a)(iii) hereof.

            3.    Amendment of Employee Matters Agreement.

            (a)   Effective as of the Closing Date, the definition of "Divested
TRW Automotive Business Employee" in Section 1.1 of the Employee Matters
Agreement is hereby amended by deleting the phrase "; or 143 (Lucas Closed
Operations)." from the end thereof and replacing it with the following phrase:
"; 143 (Lucas Closed Operations); or the Operating Unit Codes listed on Schedule
1.1(c)." and such amendment shall be deemed to have been effective as of
February 28, 2003. In addition, the parties agree that if either OUC 276-LVBS
Livonia Transfers or OUC 276 - LVBS VM Service constitutes a Divested Business
then such Divested Business will be deemed to have been added to Schedule
1.1(c).

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            (b)   Effective as of the Closing Date, the Employee Matters
Agreement shall be amended to append Schedule 1.1(c) (in the form attached
hereto) thereto, and such amendment shall be deemed to have been effective as of
February 28, 2003.

            4.    Certain Indemnification Matters.

            (a)   Effective as of the Closing Date, on behalf of the Purchaser
Indemnified Parties, TRW agrees that it will pursue claims for indemnification
pursuant to Section 10.5 of the Master Purchase Agreement, and Northrop Grumman
agrees that it will indemnify such Purchaser Indemnified Parties pursuant to
such Section 10.5, in each case pursuant to the terms thereof and the terms of
the Supplemental Agreement on Environmental Liability Indemnity Procedure dated
as of August 24, 2004 (the "Supplemental Agreement") between Northrop Grumman
and TRW. With respect to internal TRW staff time and related business expenses
only, Sections 1.1 and 1.2 of the Supplemental Agreement shall be interpreted to
mean that the statement submitted by TRW shall include, and Northrop Grumman
shall be liable for, internal TRW staff time and related business expenses
calculated at a fixed rate of seven and one-half (7.5) percent of the Losses
arising out of or based upon or with respect to any Environmental Liability
incurred by TRW. Such charges shall not be subject to the 50-50 sharing
arrangement that applies to Losses.

            (b)   For the avoidance of doubt, Northrop Grumman acknowledges and
agrees that Tax Losses for purposes of Article XI of the Master Purchase
Agreement shall include interest and penalties related to Tax Losses, including
interest and penalties assessed by any taxing authority.

            (c)   Effective as of the Closing Date, TRW agrees to promptly
process, or cause to be processed by Lucas Varity Automotive Holding Company, as
successor in interest by merger to Lucas Varity, Inc. and subsidiaries, a U.S.
federal income tax refund request with respect to a capital loss disallowance
relating to a transfer of the capital stock of Lucas-Varity in 1998, and to
forward, within five days of receipt, the proceeds of any recovery thereunder
promptly to Northrop Grumman upon receipt thereof. In order to allow TRW a
reasonable time period within which to fulfill its obligations under the
immediately preceding sentence, Northrop Grumman will provide TRW with written
notice and a draft of such tax refund request not less than 14 Business Days
prior to the date on which such tax refund request must be filed.
Notwithstanding the foregoing, nothing in this Section 4(c) shall be construed
to otherwise amend, limit or modify the rights and obligations of the Parties
under Article XI of the Master Purchase Agreement, including, without
limitation, the right of any Party to receive refunds pursuant to Section 11.3
of the Master Purchase Agreement.

            5.    Settlement and Release.

            (a)   Effective as of the Closing Date, in consideration of the
mutual agreement to be bound by the terms of this Agreement, Northrop Grumman,
on behalf of itself and its affiliates and their respective past and current
employees, officers, directors, representatives, agents, administrators,
executors, divisions, unincorporated entities, d/b/a entities, heirs, assigns,
successors, predecessors, parents, subsidiaries, partners, principals, owners,
investors and shareholders ("Related Parties") hereby releases and forever
discharges each of TRW and AI LLC and their respective past, current and future
Related Parties, from any and all pending and potential claims, demands,
actions, causes of action, suits, debts, liabilities, losses, damages,

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awards, judgments, attorneys' fees, settlements, interest, and other fees, costs
or expenses, of whatever nature, whether known or unknown, pending or future,
certain or contingent ("Claims/Losses") arising out of, derived from, predicated
upon or relating to the matters referred to in Annex 1 hereto (the "Covered
Matters"), irrespective of whether the Claims/Losses might have affected
Northrop Grumman's decision to enter into this Agreement. Further, Northrop
Grumman and its Related Parties relinquish, to the extent it is applicable, and
to the full extent permitted by law, any benefits of the provisions of section
1542 of the California Civil Code or any other similar, comparable or equivalent
state law, federal law, or principle of common law, which may have the effect of
limiting the above release and discharge. Notwithstanding the foregoing, the
Parties do not concede that any law but that chosen in Section 17 is applicable
to this Agreement.

            (b)   Effective as of the Closing Date, in consideration of the
mutual agreement to be bound by the terms of this Agreement, each of TRW and AI
LLC, on behalf of itself and its affiliates and their respective Related Parties
(together with all of the persons described in Section 5(a), the "Released
Persons") hereby releases and forever discharges Northrop Grumman and each of
its past, current and future Related Parties, from any and all Claims/Losses
arising out of, derived from, predicated upon or relating to the Covered
Matters, irrespective of whether the Claims/Losses might have affected TRW and
AI LLC's decision to enter into this Agreement. Further, TRW and AI LLC and
their respective Related Parties relinquish, to the extent it is applicable, and
to the full extent permitted by law, any benefits of the provisions of section
1542 of the California Civil Code or any other similar, comparable or equivalent
state law, federal law, or principle of common law, which may have the effect of
limiting the above release and discharge. Notwithstanding the foregoing, the
Parties do not concede that any law but that chosen in Section 17 is applicable
to this Agreement.

            6.    Covenant Not To Sue. Effective as of the Closing Date, the
Parties and their Related Parties shall not commence, pursue, participate in,
aid in the pursuit of or willingly become an adverse party in any action, claim,
lawsuit, arbitration or any other proceeding ("Proceeding") against the other
Parties and/or any other Released Persons arising out of, derived from,
predicated upon or relating to the Covered Matters, except for any Proceeding
for a breach of this Agreement or any representation, promise, warranty or
covenant herein.

            7.    Offer to Compromise/No Admission. This Agreement shall be
deemed to fall within the protection afforded compromises and offers to
compromise by Rule 408 of the Federal Rules of Evidence and any similar state
law provisions. Neither the terms of this Agreement nor its execution nor the
closing of the transactions contemplated hereby, nor any of the negotiations or
communications relating thereto shall be construed as an admission of wrongdoing
or liability on the part of any Party, or offered or received into evidence in
any Proceeding as any such purported admission or for any other purpose.
Notwithstanding the foregoing, the Parties agree that the Agreement may be
admissible as necessary to establish the existence of the Agreement or to
enforce or interpret its terms

            8.    Different Facts. Each Party acknowledges that if any fact
relating to this Agreement or the Covered Matters and now believed to be true is
found hereafter to be other than, or different from that which is now believed,
such Party expressly assumes the risk of such difference in fact and agrees that
this Agreement shall be and will remain effective,

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notwithstanding any such difference in fact and expressly releases and forever
discharges each of the other Parties to this Agreement and their respective
past, current and future Related Parties, from any and all Claims/Losses arising
out of, derived from, predicated upon or relating to such difference in fact.

            9.    Complete Defense. Each Party acknowledges that, effective as
of the Closing Date, this Agreement may be pleaded as a full and complete
defense to, and used as a basis for an injunction against, any Proceeding that
may be instituted, prosecuted or attempted in breach thereof. Should any Party
(or its Related Parties) institute any Proceeding to enforce any provision of
this Agreement, or to recover Claims/Losses sustained by reason of any alleged
breach of any provision thereof, or for a declaration of such Party's rights or
obligations hereunder, or to enjoin any Proceeding instituted, prosecuted or
attempted in breach of this Agreement, the prevailing party shall be entitled to
be reimbursed by the losing party for all reasonable and necessary costs and
expenses incurred thereby including, but not limited to, attorneys' fees for the
services rendered to the party finally prevailing in any such Proceeding.

            10.   Binding Effect. Each Party acknowledges that this Agreement
shall be binding upon each of them and their Related Parties, and shall inure to
the benefit of each of them, their Related Parties and all Released Persons.

            11.   Costs and Expenses. Each Party agrees to pay all of its own
costs and expenses, including attorneys' fees and costs of litigation, arising
out of or related to the Covered Matters, the execution of this Agreement and
the consummation of the transactions contemplated hereby; provided that the
foregoing shall not be construed to relieve any party hereto of any liability
for breach of any of the terms or provisions of this Agreement.

            12.   Representations and Warranties.

            (a)   Each Party represents and warrants to the other Parties that
the warranting Party (i) has full power and authority to enter into and perform
its obligations under this Agreement in accordance with its terms, and its
signatory has full power and authority to sign on behalf of such Party and all
of its Related Parties, (ii) has not assigned, sold, in any manner transferred,
encumbered, hypothecated or otherwise disposed of, in whole or in part, any of
the rights, causes of action, claims or other matters arising out of, derived
from, predicated upon or relating to the Covered Matters, and (iii) has executed
this Agreement after receiving advice of counsel, freely, without any compulsion
or duress, and after having done whatever investigation the warranting Party and
its counsel deemed appropriate, and fully intending to be bound by the terms and
provisions herein.

            (b)   Seller further represents and warrants that it has good and
valid title to the Note, free and clear of any liens, claims, encumbrances,
security interests, options, pre-emptive, drag-along or tag-along rights, rights
of first refusal or first offer, charges, restrictions or interests, legal or
beneficial, of any kind (collectively, "Liens"). Upon delivery of the Note to
Purchaser at the Closing (assuming the Closing includes the Note Sale
Alternative), good and valid title to the Note will pass to Purchaser, free and
clear of any Liens.

            13.   Closing Conditions.

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            (a)   Conditions Precedent to Obligations of Purchaser, TRW and AI
LLC. The obligation of Purchaser, TRW and AI LLC to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on the Closing
Date, of each of the following conditions (any or all of which may be waived by
each of Purchaser, TRW and AI LLC in whole or in part at its sole discretion):

                  (i) all representations and warranties of Northrop Grumman and
            Seller contained herein shall be true and correct in all material
            respects, at and as of the Closing Date with the same effect as
            though those representations and warranties had been made again at
            and as of that date;

                  (ii) Northrop Grumman and Seller shall have performed and
            complied in all material respects with all obligations and covenants
            required by this Agreement to be performed or complied with by them
            on or prior to the Closing Date;

                  (iii) there shall not be in effect any Order by a Governmental
            Body of competent jurisdiction restraining, enjoining or otherwise
            prohibiting the consummation of the transactions contemplated
            hereby, or be pending any Legal Proceeding by a Governmental Body of
            competent jurisdiction that seeks the same; and

                  (iv) either (x) Purchaser shall have received financing in an
            amount sufficient to pay the amount contemplated by Section
            1(a)(ii)(x) hereof on or prior to November 22, 2004, or (y) on
            November 23, 2004, the condition referred to in the preceding clause
            (x) shall not have been satisfied.

            (b)   Conditions Precedent to Obligations of Northrop Grumman and
Seller. The obligation of Northrop Grumman and Seller to consummate the
transactions contemplated by this Agreement is subject to the fulfillment, on
the Closing Date, of each of the following conditions (any or all of which may
be waived by each of Northrop Grumman and Seller in whole or in part at its sole
discretion):

                  (i) all representations and warranties of Purchaser, TRW and
            AI LLC contained herein shall be true and correct in all material
            respects, at and as of the Closing Date with the same effect as
            though those representations and warranties had been made again at
            and as of that date;

                  (ii) Purchaser, TRW and AI LLC shall have performed and
            complied in all material respects with all obligations and covenants
            required by this Agreement to be performed or complied with by them
            on or prior to the Closing Date; and

                  (iii) there shall not be in effect any Order by a Governmental
            Body of competent jurisdiction restraining, enjoining or otherwise
            prohibiting the consummation of the transactions contemplated
            hereby, or be pending any Legal Proceeding by a Governmental Body of
            competent jurisdiction that seeks the same.

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            14.   Assignment. No Party may assign this Agreement, directly or
indirectly, in whole or in part, without the prior written consent of the other
Parties, except in connection with a merger, reorganization or change in
control, or a sale of all or substantially all of a Party's equity and/or
assets. Any such permitted assignee must agree in writing to assume all of the
assigning Party's obligations hereunder, and the assigning Party must guarantee
such assignee's performance hereunder. Any purported assignment in contravention
of this Section 14 shall be void ab initio and of no force or effect. In the
event of a permitted assignment, this Agreement shall be binding upon such
Party's permitted successors and assigns and their Related Parties.

            15.   Full Force and Effect; Effectiveness. Except as set forth in
this Agreement, the Master Purchase Agreement and the Employee Matters Agreement
shall remain in full force and effect without further modification. This
Agreement shall be effective as of the date hereof.

            16.   Termination. This Agreement shall terminate and have no
further force and effect if the Closing has not occurred on or prior to November
30, 2004.

            17.   Governing Law/Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York without regard to
the conflict of law principles of such state. Any dispute among the Parties
relating to this Agreement shall be resolved solely in the state or federal
courts located in Manhattan, New York City. Each Party irrevocably submits to
the exclusive jurisdiction of such courts for such purposes. Each Party agrees
that service of any process, summons, notice or document by U.S. registered mail
to such Party's respective address set forth in Section 18 shall be effective
service of process for any such court action.

            18.   Notice. All notices, requests and other communications to any
Party shall be in writing and shall be deemed duly given and effective only (i)
when delivered by reputable overnight messenger or courier, (ii) when delivered
by facsimile with proof of receipt or (iii) five days after deposit for mailing
by registered or certified mail, postage prepaid, return receipt requested, to
the following addresses. Any Party may modify its information below by sending
notice to the other Parties as set forth below:

            for TRW:

            TRW Automotive Holdings Corp.
            12001 Tech Center Drive
            Livonia, MI 48150
            Fax:  (734) 855-2473
            Attention:  General Counsel

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            for AI LLC:

            Automotive Investors LLC
            c/o The Blackstone Group
            345 Park Avenue
            New York, New York 10154
            Fax:  (212) 583-5258
            Attention:  Robert L. Friedman

            for Northrop Grumman:

            Northrop Grumman Corporation
            1840 Century Park East
            Los Angeles, California 90067
            Fax:  (310) 556-4558

            Attention:  Vice President and General Counsel

            for Seller:

            c/o Northrop Grumman Corporation
            1840 Century Park East
            Los Angeles, California 90067
            Fax:  (310) 556-4558
            Attention:  Vice President and General Counsel

            19.   Amendments/Waiver. This Agreement, including this Section 19,
may be amended only by a writing that has been signed by all Parties and
specifically refers to the provision of this Agreement to be amended. No breach
of this Agreement may be waived except by a writing that has been signed by the
Party to be charged with the waiver and that specifically refers to the
provision of this Agreement to be waived. Waiver by a Party of any breach of any
provision of this Agreement by any other Party shall not operate or be construed
as a waiver of any prior, contemporaneous or subsequent breach of this
Agreement, by the same or any other Party.

            20.   Confidentiality. Each Party agrees that it shall keep the
terms of this Agreement confidential, and shall not disclose same to any person
or entity, except as required in the ordinary course of business for such
purposes as audits and accounting, or otherwise as required by law, court order
or judicial process, or to comply with applicable securities laws, or to seek
enforcement of the Agreement in a Proceeding. Should a court or government
authority order the disclosure of the terms of this Agreement to any other
person or entity, the Party required to make such disclosure shall inform the
other Parties as soon as possible, cooperate with the other Parties to obtain a
protective order or other applicable relief, and make only such disclosures as
are required by such court or government authority.

            21.   Severability. The Parties agree that each provision of this
Agreement shall be construed as separable and divisible from every other
provision. The unenforceability of any one provision shall not limit the
enforceability, in whole or in part, of any other provision hereof.

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If any provisions of this Agreement are held unenforceable, this Agreement shall
be deemed modified in a manner that preserves as many of the Parties' rights
hereunder as possible.

            22.   Cumulative Rights. All rights and remedies which a Party may
have hereunder or by operation of law or in equity are cumulative, and the
pursuit of one right or remedy shall not be deemed an election to waive or
renounce any other right or remedy. The failure of a Party to require strict
performance by the other Parties of any provision in this Agreement will not
waive or diminish that Party's right to demand strict performance thereafter of
that or any other provision hereof.

            23.   Negotiation. Each of the Parties warrants and represents that
it has relied upon its own judgment and that of its own legal counsel regarding
the proper, complete, and agreed-upon consideration for, and other terms and
provisions of, this Agreement, and that no statements, warranties, promises or
representations made by any other Party or any of its agents, employees, or
legal counsel (other than as set forth in this Agreement) have influenced or
induced it to execute this Agreement.

            24.   Construction. Section headings are inserted for the
convenience of reference only and shall be ignored in the construction of this
Agreement. The Parties hereby agree that this Agreement or any uncertainty or
ambiguity herein shall not be construed against any Party on the basis that it
drafted the Agreement but shall be construed as if all Parties jointly prepared
this Agreement.

            25.   Waiver of Jury Trial. In any Proceeding to enforce this
Agreement, the Parties waive the right to trial by jury.

            26.   Third-Party Beneficiaries. All of the Released Persons who are
not Parties to this Agreement are deemed third-party beneficiaries hereof and
may enforce their rights hereunder to the same extent as any Parties hereto.

            27.   Entire Agreement. This Agreement shall constitute the entire
agreement between the Parties with respect to the subject matter hereof and
shall supersede all previous negotiations, commitments and writings with respect
to such subject matter. The Parties acknowledge that this Agreement is executed
without reliance upon any inducements, representations, warranties, statements
or promises except for those contained herein.

            28.   Counterparts/Signatures. This Agreement may be signed in one
or more counterparts, each of which shall be deemed an original, and all of
which shall be considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each Party and received
by the other Parties. Facsimile signatures shall be deemed originals for
purposes of binding the Parties to this Agreement, provided that originals of
the faxed signature pages shall be forwarded immediately to counsel for the
other Parties.

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<PAGE>

            IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

NORTHROP GRUMMAN CORPORATION           TRW AUTOMOTIVE HOLDINGS CORP.

By: /s/ James L. Sanford               By: /s/ Joseph S. Cantie
    --------------------------------       -------------------------------------
Title: Corporate Vice President        Title: Executive Vice President and
       and Treasurer                          Chief Financial Officer

NORTHROP GRUMMAN SPACE & MISSION       AUTOMOTIVE INVESTORS L.L.C.
 SYSTEMS CORP.

By: /s/ James L. Sanford               By: /s/ Neil P. Simpkins
    --------------------------------       -------------------------------------
Title: Corporate Vice President        Title: Manager
       and Treasurer

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                                     ANNEX 1

(i)   Claims/Losses arising out of, derived from, predicated upon or relating to
      breaches of representations and warranties pursuant to Section 10.1(a)(i)
      or 10.1(b)(i) of the Master Purchase Agreement (other than with respect to
      the representations and warranties in Section 5.1, 5.2, 5.4, 5.10 or 6.1,
      or in any related schedule or in any related certificate or document
      delivered pursuant hereto). Notwithstanding the preceding sentence,
      Covered Matters shall include Claims/Losses arising out of, derived from,
      predicated upon or relating to any breaches of representations and
      warranties under Section 5.10 (Employee Benefits) of the Master Purchase
      Agreement in any manner associated with TRW's disclosures regarding (a)
      the assets or liabilities attributable to Dayton Walther participants in
      the TRW SPP and (B) the transfer of pension or welfare plan assets or
      liabilities described or referred to in Schedule A hereto;

(ii)  Claims/Losses arising out of, derived from, predicated upon or relating to
      Section 10.9 ("OPEB Indemnity") of the Master Purchase Agreement;

(iii) Claims/Losses arising out of, derived from, predicated upon or relating to
      the discharge by TRW of up to $1.1 million in Excluded Liabilities
      relating to the former aeronautical business of Seller;

(iv)  Claims/Losses arising out of, derived from, predicated upon or relating to
      the transfers of assets between the TRW Automotive U.S. SPP and the TRW
      SPP pursuant to Section 3.1 of the Employee Matters Agreement;

(v)   Claims/Losses arising out of, derived from, predicated upon or relating to
      payments of bonuses to Active TRW Automotive Employees pursuant to Section
      8.1 of the Employee Matters Agreement;

(vi)  Claims/Losses arising out of, derived from, predicated upon or relating to
      severance pay, salary continuation, notice obligations and similar
      obligations with respect to TRW Automotive participants, TRW Participants
      or Delayed Transfer Employees pursuant to Section 8.3 of the Employee
      Matters Agreement;

(vii) Claims/Losses arising out of, derived from, predicated upon or relating to
      up to $7 million of payments made by Northrop Grumman or any of its
      Affiliates on behalf of TRW or any of its Affiliates (or any benefit plans
      maintained by any of them) on and after the Closing Date in respect of
      health and welfare benefit payments, including, without limitation, those
      made to Aetna, Anthem, Delta Dental, Lumenos, Merck Medco, Medical Mutual,
      Value Options or other health care vendors; and

(viii) Claims/Losses arising out of, derived from, predicated upon or relating
      to the matters covered by Section 3.2 of the Master Purchase Agreement or
      the letter agreement relating thereto dated August 15, 2003 between
      Northrop Grumman and BCP LLC (and accepted by BCP LLC on August 17, 2003)
      including, but not

                                       12

<PAGE>

      limited to, the amounts withheld on August 21, 2003 in respect of (a)
      bonus payments pursuant to Section 8.1 of the Employee Matters Agreement
      and (b) severance and similar payments pursuant to Section 8.3 of the
      Employee Matters Agreement.

                                       13

<PAGE>

                              SCHEDULE A TO ANNEX 1

Schedule A to Annex 1 (List of Correspondence) is omitted and will be furnished
supplementally to the Commission upon request.

                                       14

<PAGE>

                                SCHEDULE 1.1 (c)

      HR OUC      LOCATION NAME

      16602       TRW VALVE CLEVELAND  (H)
      16604       TRW VALVE CLARKWOOD (H)
      47304       TRW VSSI WASHINGTON   (H)
      10507       TRW RPD GREENSBORO  (S)
      10508       TRW SSS APR McALLEN (S)
      10509       TRW ELEC. POWERED STEERING
      10510       TRW SSS ACTIVE CONTROL SYSTEMS
      10515       SSD STERLING HEIGHTS SECURITY
      10517       TRW RPD GREENSBORO  (H)
      10518       TRW SSS APR McALLEN (H)
      16600       TRW VALVE DIVISION STAFF
      16601       TRW VALVE CLEVELAND
      16603       TRW VALVE CLARKWOOD
      27302       TED CALIFORNIA
      27601       TRW LV LVB (H) CINCINNATI
      27602       TRW LV LVB (S) CINCINNATI
      27604       LV LVB DETROIT SALARIED
      27616       TRW LV LVB (S) MILFORD
      47300       TRW VSSI SEATBELTS
      47302       TRW VSSI LOUISVILLE (S)
      47303       TRW VSSI LOUISVILLE (H)
      47305       TRW VSSI McALLEN (H)
      47307       VSSI - STAFF (HOURLY)
      47308       TRW VSSI WASHINGTON PLANT (S)
      47900       TRW TECHNAR INC
      47901       TRW TECHNAR ROCHESTER HILLS
       600        VARITY NON QUALIFIED (H/W Cylendrical Sys Nuline)
      72202       TED/KNOWVILLE-MCALLEN WHSE
      92502       TRW Sensors & Components LOVELAND
      92701       TRW Sensors & Components VANDALIA (H)
      92702       TRW Sensors & Components VANDALIA (S)
      93902       TRW Sensors & Components HAMPTON
       276        LVBS - Discontinued
       276        LVBS - Buffalo
      27603       LV LVB DETROIT (UNION 1)
      27605       LV LVB DETROIT (UNION 2)
      27617       TRW LV LVB (H) MILFORD<PAGE>

                                                                    EXHIBIT 10.5

================================================================================

             THE LUCAS GROUP FUNDED EXECUTIVE PENSION SCHEME NO. 4

                             STATEMENT OF BENEFITS
                                 for Mr S Lunn

                          Date of issue: 1st April 1996

                                  ALLEN & OVERY
                                     London

================================================================================

<PAGE>
                                    CONTENTS

<TABLE>
<CAPTION>

Section                                                                               Page

<C>                                                                                   <C>
1.  Introduction ..................................................................      1

2.  The Executive Scheme ..........................................................      1

3.  Your Target Total Lucas Pension ...............................................      1

4.  Composition Of Your Retirement Benefits .......................................      2

5.  The Company's Contributions ...................................................      2

6.  Benefit Payable On Leaving Lucas Employment Over Age 50 (Other Than Death) ....      3

7.  Benefit Payable On Leaving Lucas Employment Before Age 50 (Other Than Death)...      3

8.  Ending Your Scheme Membership But Remaining In Lucas Employment At Any Age ....      3

9.  Transfer Option ...............................................................      4

10. Death Benefits ................................................................      4

11. Temporary Absence .............................................................      5

12. Investments ...................................................................      5

13. Termination, Amendment Or Merger ..............................................      5

14. Income Tax ....................................................................      6

15. Independent Actuary ...........................................................      6

16. Definitions ...................................................................      6

</TABLE>
<PAGE>

   THE TERMINOLOGY USED IN THIS STATEMENT IS EXPLAINED IN SECTION 16 BELOW.

1. INTRODUCTION

   The objective of the Lucas Group Funded Executive Pension Scheme No. 4
   (referred to below as "the Executive Scheme") is to build up a fund which is
   expected to be sufficient to enable you to purchase benefits of broadly
   equivalent value to those you would have received under Lucas' main
   tax-approved pension scheme, the Lucas Pension Scheme (the "Main Scheme"), if
   the Earnings Cap did not affect you. You are also entitled to certain
   benefits on your death in service while a member of the Executive Scheme.

   It is a condition of membership of the Executive Scheme that you continue to
   be an active member of the Main Scheme. If you opt out of the Main Scheme you
   will also be treated as having opted out of the Executive Scheme.

   Like the Main Scheme, the Executive Scheme is set up under trust. Its assets
   are therefore kept separate from those of Lucas Industries plc. The trustees
   are appointed by Lucas. Currently there is a single corporate trustee: Lucas
   Supplementary Pensions Limited, the directors of which are currently David
   Birtwistle, Bryan Mason and Guy Norris.

   The full provisions of the Executive Scheme are set out in its trust deed, a
   copy of which has been supplied to you. The trust deed will override this
   statement should there be any ambiguity or conflict.

   For further information about the Executive Scheme please contact: David
   Birtwistle, Group Pensions Executive, at Lucas Administration, 2020 The
   Crescent, Birmingham Business Park, Birmingham B37 7YE, telephone: 0121 627
   1334.

2. THE EXECUTIVE SCHEME

   The Executive Scheme will be a money purchase type scheme. It will be funded
   with the objective of building up assets which represent the difference
   between your target total Lucas pension (see 3 below) and your pension from
   the Main Scheme.

3. YOUR TARGET TOTAL LUCAS PENSION

   At Normal Pension Age

   If you had not been subject to the Earnings Cap, the principal benefit under
   the Main Scheme would have been a pension at Normal Pension Age of
   one-thirtieth of your Final Pensionable Pay for each year of your Pensionable
   Employment, provided that, when aggregated with your benefits from your
   previous arrangements, it did not exceed two-thirds of your Final Pensionable
   Pay. This will be referred to below as your "target total Lucas pension".

   Before Normal Pension Age

   At any time before Normal Pension Age your target total Lucas pension is
   calculated as a proportion of your target total Lucas pension at Normal
   Pension Age. The proportion is:

<PAGE>

                                       2

   A/B x total target Lucas pension at Normal Pension Age where:

   A is the period of your actual Pensionable Employment; and

   B is the potential period of your Pensionable Employment from the date it
   started to your Normal Pension Age.

   The calculation is based on Final Pensionable Pay at the date of calculation.

4. COMPOSITION OF YOUR RETIREMENT BENEFITS

   Because of the Earnings Cap, your retirement benefits will be provided from
   three sources:

   (a)  Pensions and/or lump sums built up during membership of your previous
        employers' pension schemes or benefits under retirement annuity
        contracts or personal pensions.

   (b)  A pension from the Main Scheme. Its amount will currently be
        one-sixtieth of your Final Pensionable Pay up to the Earnings Cap for
        each year of Pensionable Employment. This is referred to below as "your
        main Lucas pension".

   (c)  Your benefit from the Executive Scheme. This will form the top layer of
        your total retirement benefits.

5. THE COMPANY'S CONTRIBUTIONS

   Lucas will pay contributions to the Executive Scheme calculated annually by
   the Actuary as follows:

   (a)  As at 31st July in each year and as at the Termination Date the Actuary
        will work out your target total Lucas pension (see 3 above). The
        calculation will be made on the assumption that you left employment or,
        if over 50, retired immediately voluntarily. The calculated pension will
        be reduced for early payment by the same factor as then applies to your
        main Lucas pension, and your main Lucas pension will then be deducted
        from the resulting amount.

   (b)  The amount of pension calculated under (a) will be netted down to take
        account of the income tax which would be assumed to have been payable if
        the pension had actually been paid from the Main Scheme (assuming the
        rate of tax will be the same as at the effective date of the
        calculation).

   (c)  The Actuary will calculate the capital value of this netted down
        pension, making an assumption as to the rate of investment return.

   (d)  The difference between the capital value of this netted down pension and
        the amount of the Fund at the calculation date will be paid to the
        Executive Scheme on or as soon as possible following 31st July or the
        Termination Date.

<PAGE>
                                       3

   (e)  The Actuary will also calculate the contribution expected to be paid at
        the following 31st July or Normal Pension Age if earlier. This amount
        will be paid in quarterly installments in arrears during the year.

   The detailed method currently used for calculating the contributions is set
   out in the Actuary's Letter (appended).

   Lucas will also pay additional amounts to the trustees until the Termination
   Date to enable them to bear the costs of the Executive Scheme's
   establishment, administration and management, unless Lucas agrees with the
   trustees to pay these on their behalf.

6. BENEFIT PAYABLE ON LEAVING LUCAS EMPLOYMENT OVER AGE 50
   (OTHER THAN DEATH)

   If you leave Lucas' employment after your 50th birthday, the company's
   contributions will stop and the trustees will use the Fund to provide a
   pension for you (or any one or more of your spouse or dependants). You may
   instead elect to receive a lump sum rather than a pension (for tax reasons
   this election is advisable - see 14 below).

   The benefit will be paid at Normal Pension Age unless you decide to receive
   it earlier. If you defer receipt of your benefit for any period after you
   leave Lucas' employment, you should note that no further contribution would
   be paid by Lucas in any circumstances and the investment risk would be with
   you (see 12 below).

7. BENEFIT PAYABLE ON LEAVING LUCAS EMPLOYMENT BEFORE AGE 50 (OTHER THAN DEATH)

   In the above circumstances the company's contributions will stop and the
   trustees will use the Fund if and when you reach your Normal Pension Age to
   provide a pension for you (or any one or more of your spouse or dependants).
   You may instead elect to receive a lump sum rather than a pension (for tax
   reasons this election is advisable - see 14 below).

   The benefit can be paid before Nomal Pension Age either if you have reached
   age 50 or earlier if you receive an immediate pension from the Main Scheme on
   account on Incapacity. As mentioned above, the investment risk would pass to
   you as soon as you leave Lucas' employment.

8. ENDING YOUR SCHEME MEMBERSHIP BUT REMAINING IN LUCAS EMPLOYMENT AT ANY AGE

   In these circumstances, the company's contributions would stop and the same
   applies as in 7 above but no benefit can be paid until you leave Lucas'
   employment.

<PAGE>
                                        4

 9.     TRANSFER OPTION

        As an alternative to the benefits described above, you can request a
        transfer of the Fund from the Executive Scheme to another pension
        arrangement. Any transfer will be subject to the rules of the receiving
        arrangement and the relevant legislation. The possible tax implications
        of the transfer and its effect on any payment from the receiving
        arrangement would need to be considered by you at that time.

10.     DEATH BENEFITS

        If you die in Lucas' employment while an active member of the Executive
        Scheme and the Main Scheme, the amount of the Fund will be increased by
        an additional contribution by Lucas where necessary, so that the Fund
        equals:

        A + B

        where

        A         is three times Pensionable Pay at the date of death less any
                  capital sums payable or contingently payable from the Main
                  Scheme.

        X         is a widow's pension of one per cent of your Pensionable Pay
                  at the date of death multiplied by the years and months of
                  your Pensionable Employment up to Normal Pension Age less any
                  widow's pension payable or contingently payable from the Main
                  Scheme and subject, in aggregate with benefits from your
                  previous arrangements, to a maximum of two-thirds of your own
                  maximum Lucas pension (as indicated above, your maximum Lucas
                  pension is two-thirds of your Final Pensionable Pay).

        Y         is a child's allowance, payable until age 22 for each of the
                  youngest two children, of 0.5 per cent of your Pensionable Pay
                  at the date of death multiplied by the years and months of
                  your Pensionable Employment up to Normal Pension Age less any
                  children's allowances payable or contingently payable from the
                  Main Scheme and subject, in aggregate with benefits from your
                  previous arrangements, to a maximum (aggregating all
                  children's allowances) of one-third of your own maximum Lucas
                  pension.

        B         is the capital value of the net pensions and allowances in X
                  and Y, calculated by the Actuary using the interest, mortality
                  and other assumptions set out in paragraphs 4 and 5 of the
                  Actuary's Letter except that t in that letter if you die
                  leaving a widow is her rate of tax rather than yours.

        If you die without leaving a widow the amount in A above will be four
        (instead of three) times Pensionable Pay at the date of death and X will
        be inapplicable.

        If you die after the Termination Date, but before you have received the
        Fund, the Fund will be paid from the Executive Scheme.

<PAGE>

                                       5

        For tax reasons, the trustees decide who receives any lump sum benefit
        (including the Fund) on death under the discretionary trusts contained
        in the trust deed which governs the Executive Scheme. They can divide
        the benefit between different people, but it will normally go to your
        wife or other dependants. You will be invited to complete a nomination
        form indicating to whom you would like the benefit to be paid. You can
        change your nomination at any time. If you would like someone who is not
        your wife, children, dependants or legal personal representative to
        benefit, you must designate that person in a nomination form; otherwise
        the benefit will be taxed. Payments to beneficiaries who are not
        individuals will be taxed.

        The trustees will take account of your wishes, but are not legally bound
        by them.

11.     TEMPORARY ABSENCE

        If you are temporarily absent from work your membership of the Executive
        Scheme may be continued at Lucas' discretion. Your period of absence
        will normally count towards benefits under the Executive Scheme as long
        as you are still being paid by Lucas and it also counts towards
        retirement benefits under the Main Scheme.

12.     INVESTMENTS

        In the period during which Lucas contributes to the Executive Scheme,
        the selection and management of investments will be under the control of
        the trustees. The trustees will appoint one or more investment managers
        who will advise them on this and to whom the day to day investment
        function will be delegated. In this period Lucas itself has an interest
        in the investment policy. However, after your active membership of the
        Executive Scheme has ended and Lucas' contributions have stopped, the
        investment risk will pass to you. You will then be required to direct
        the trustees in the selection and management of investments after taking
        appropriate advice. Neither Lucas nor the trustees will then have any
        responsibility for this.

13.     TERMINATION, AMENDMENT OR MERGER

        Lucas reserves the right to terminate or, with the agreement of the
        trustees, to amend the Executive Scheme at any time. However, any
        amendment to the method used for calculating the company's contributions
        to the Executive Scheme requires the prior agreement of the Independent
        Actuary that the amendment is reasonable having regard to any change in
        legislation, taxation or financial conditions (including changes in the
        basis on which the Main Scheme is valued by its actuary). In the event
        of termination, benefits will be provided for beneficiaries under the
        Executive Scheme in accordance with the termination provisions of its
        governing trust deed. Except to the extent required by legislation,
        Lucas has no obligation to pay the benefits if the resources of the
        Executive Scheme are insufficient.

        Lucas also has the right to merge the Executive Scheme with any other
        similar arrangement applicable to Lucas executives. This would occur
        only if tax or legal advice made it expedient. The value of your rights
        would be unaffected and Lucas would consult with you before any such
        merger took place.

<PAGE>

                                       6

14.     INCOME TAX

        The Executive Scheme will not be approved for tax purposes. One
        consequence of this is that you will be taxed on Lucas' contributions.
        However, benefits will be tax-free if they are paid in lump sum form
        (and under discretionary trusts as above on death). It will therefore be
        advantageous to choose a lump sum on retirement rather than a pension.
        If you fail to make this choice and the trustees are accordingly forced
        to provide a pension, Lucas will not compensate you for the tax on the
        pension. The above assumes that tax legislation will not be changed in
        the future. Lucas does not undertake to compensate you for the
        consequences of any such future change in tax legislation.

15.     INDEPENDENT ACTUARY

        Lucas will appoint a Fellow of the Institute or Faculty of Actuaries to
        act from time to time as the Independent Actuary to the Executive
        Scheme. The Independent Actuary will be chosen by agreement between you
        and Lucas. If there is a failure to reach agreement, the Independent
        Actuary will be chosen by the President of the Institute of Actuaries.
        The Independent Actuary will verify annually, in a report addressed to
        you and Lucas, that the contributions paid to the Executive Scheme are
        as described above.

        The Independent Actuary is currently KPMG Peat Marwick.

16.    DEFINITIONS

        Expressions used in this statement have the meanings set out opposite
        them.

        "active member"         a full member earning retirement benefits under
                                the Lucas Pension Scheme.

        the Actuary:            the actuary or firm of actuaries appointed by
                                Lucas to advise in connection with the Executive
                                Scheme. Currently the Actuary is R. Watson &
                                Sons.

        Actuary's Letter:       letter from the Actuary to Lucas dated 18th
                                March 1996, a copy of which is appended to this
                                statement.

        Basic Pay:              your basic salary. This excludes directors'
                                fees, commission and, unless Lucas decides to
                                include them and so notifies you in writing,
                                bonus and any fluctuating emoluments. It
                                includes London weighting allowance.

        Earnings Cap:           the legal limit on the earnings that can count
                                towards benefits from tax-approved pension
                                schemes for certain categories of members
                                (including you). (Pound)82,200 is the earnings
                                cap for the tax year 1996/97.

        Final Pensionable Pay:  has the same meaning as in the Main Scheme.

<PAGE>

                                        7

        Fund:                   the assets of the Scheme or, on the distribution
                                of the Fund, the realisation value of the assets
                                (after deducting expenses).

        Incapacity:             has the same meaning as in the Main Scheme.

        Lucas:                  Lucas Industries plc.

        Normal Pension Age:     the date on which you reach age 62 years and six
                                months.

        Pensionable Bonus:      any bonus awarded to you in any year which Lucas
                                has declared to be pensionable and also which
                                you have elected to be pensionable at the
                                time the first such bonus is awarded to you. The
                                Pensionable Bonus cannot exceed in any one year
                                10 per cent. of the average of your Basic Pay
                                for Lucas' financial year ending immediately
                                before the Pensionable Bonus is awarded.

        Pensionable Employment: the period from the date your employment with
                                Lucas started (or such other date as may be
                                notified to you in writing) until the
                                Termination Date.

        Pensionable Pay:        the annual rate of your Basic Pay at any time
                                plus 20 per cent. of the total of your
                                Pensionable Bonuses in the last five years of
                                your Pensionable Employment or, if higher but
                                subject to the Inland Revenue limits applicable
                                to the Main Scheme (except the Earnings Cap), in
                                any five years ending in the last ten years of
                                your Pensionable Employment.

                                If the Pensionable Bonus is consolidated into
                                your Basic Pay in any year, the 20 per cent.
                                addition above does not apply. However,
                                Pensionable Pay must not be less than it was
                                before the consolidation took place.

        Termination Date:       the date you cease to be an active member of the
                                Executive Scheme, which is the earliest of:

                           -    the date you reach Normal Pension Age;

                           -    the date on which you retire and draw your
                                benefits from the Main Scheme;

                           -    the date your employment with Lucas ends;

                           -    the date you otherwise cease to be in
                                contributory membership of the Main Scheme (e.g.
                                because you opt out or the Main Scheme
                                terminates);

                           -    the date you opt out of the Executive Scheme;

                           -    the date on which the Executive Scheme
                                terminates;

                           -    the date of your death.

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