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the date on which the last condition in the Master Purchase Agreement is fulfilled or waived; and

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the earlier of:

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the date on which each of the specified subsidiaries designated as “Foreign Entities” pursuant to the Master Purchase Agreement has been determined to be an “Agreed Foreign Entity” (meaning that each step necessary for the purchase and sale of the outstanding capital stock of such Foreign Entities to a designated acquirer can be completed, subject only to the completion of all other conditions to closing the Automotive Sale); and

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the later of March 1, 2003 and the date on which 90% of the aggregate specified tax benefits associated with the transfer of the Foreign Entities can be achieved by the transfer of the Agreed Foreign Entities.

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$3.757 billion in cash, subject to a dollar-for-dollar purchase price adjustment if:

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the amount of working capital is greater than or less than a specified target working capital amount; or

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existing indebtedness of the Automotive Business is assumed by the Purchaser, as agreed by Northrop Grumman and BCP Acquisition.

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a subordinated promissory note from the Purchaser in the face amount of $600 million (as described in the section entitled “Terms of the Subordinated Note” below); and

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up to 42.4% of the outstanding equity interests of the Purchaser (the “TRW Equity Interest”), which the parties expect to be reduced to under 20% before the Automotive Sale closes, as described in the section entitled “Reduction of the TRW Equity Interest” below.

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Maturity:    Initially 15 years, subject to reduction to 12 years if the debt rating on the lowest rated securities of the Purchaser is investment grade (defined as being rated as Baa3 or above by Moody’s Investor Services and BBB- or above by Standard and Poor’s) on or at any date after the fifth anniversary of the Automotive Sale.

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Interest Rate:    Initially 8% per annum, subject to increase to 10% per annum from the fifth anniversary of the Automotive Sale onwards if the debt rating on the lowest rated securities of the Purchaser is investment grade (as defined above) on or at any date after the fifth anniversary of the Automotive Sale. The note is payable “in kind” rather than in cash until maturity, unless the Purchaser declares and pays a dividend to its shareholders (other than a stock dividend), in which case the interest on the note becomes payable quarterly in cash. Payment “in kind” means that additional notes with a principal amount equal to the amount of interest payable will be issued to TRW, but interest will not be paid to TRW in cash.

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Redemption:    The note may be redeemed by the Purchaser in whole or in part at any time at a redemption price equal to 100% of the principal amount of the note plus accrued and unpaid interest to the redemption date.

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Change of Control:    If a change of control of the Automotive Business occurs at a time when the debt rating on the lowest-rated debt securities of the Purchaser is investment grade (as defined above), the holders of the note may require the Purchaser to redeem the notes at 100% of the principal amount of the note plus all accrued and unpaid interest to the redemption date.

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Restrictive Covenants:    No proceeds from any sale of any assets of the Purchaser or its subsidiaries (other than in the ordinary course of business) may be distributed to its stockholders, unless the note is first redeemed. The Purchaser may not enter into any contract, arrangement or transaction with any of its direct or indirect stockholders or their affiliates (other than subsidiaries) without the unanimous approval of the executive committee of the board of directors of the Purchaser.

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Defaults:    Events of Default under the note include:

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the failure to pay principal amounts or any interest amounts which are payable in cash when such amounts become due and payable;

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breach of the restrictive covenants described above; and

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the bankruptcy of certain entities included in the Purchaser.

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Ranking:    The obligations under the note will reside at an intermediate holding company in the chain of companies comprising the Purchaser and are unsecured and subordinated in right of payment to all other debt of that entity and its subsidiaries.

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Transferability:    The holder of the note may transfer all or any part of the note (in increments of no less than $50 million in principal amount) with the prior written consent of the Purchaser. This consent will not unreasonably be withheld if the transfer would not adversely affect the Purchaser.

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The TRW Merger shall have been completed;

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Any required waiting periods (including extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder shall have terminated or expired;

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Any required clearances, approvals or confirmations of the transactions contemplated by the Master Purchase Agreement and the Ancillary Agreements described below shall have been obtained pursuant to the regulations of the European Commission;

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Any other foreign merger control or foreign investment clearances required by law prior to the closing shall have been received; and

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No injunction, order, decree or other legal restraint or prohibition of the transactions contemplated by the Master Purchase Agreement shall be in effect, nor shall there be any legal proceeding pending by a governmental body seeking the same.

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the transfers of assets and equity interests to the New Auto Entities contemplated by the Master Purchase Agreement has been consummated in accordance with the terms of the applicable transfer documents;

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the financing transactions contemplated by certain financing commitment letters for the benefit of the Purchaser shall have been completed on the terms and conditions identified in the commitment letters, and either:

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such financing shall not include any funding of the “Senior Subordinated Facility” (as defined in the commitment letters); or

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such financing shall have been completed on or after March 27, 2003; and

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no material adverse change in the Automotive Business shall have occurred.

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by the mutual written consent of Northrop Grumman and BCP Acquisition;

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by Northrop Grumman or BCP Acquisition if the Automotive Sale is not completed by the close of business on March 31, 2003, provided that the terminating party is not then in default in any material respect of any of its covenants or obligations under the Master Purchase Agreement (this termination right is referred to as the “Deadline Termination Right”);

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by Northrop Grumman or BCP Acquisition if there is in effect a final, nonappealable judgment, order or decree restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Master Purchase Agreement;

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by Northrop Grumman if BCP Acquisition has breached any of its covenants or agreements in any material respect that would cause certain conditions not to be satisfied, provided that the breach is not cured within 30 days after notice of such breach, with certain limitations;

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by BCP Acquisition if Northrop Grumman, TRW or TRW Automotive has breached any of its covenants or agreements in any material respect that would cause certain conditions not to be satisfied, provided that the breach is not cured within 30 days after notice of such breach, with certain limitations;

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by Northrop Grumman or BCP Acquisition if the agreement and plan of merger governing the TRW Merger (referred to as the “Merger Agreement”) is terminated (this termination right is referred to as the “Merger Termination Right”); and

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by BCP Acquisition if TRW and TRW Automotive are not able to certify the accuracy of certain representations and warranties and other matters when they become parties to the Master Purchase Agreement and Northrop Grumman, TRW and TRW Automotive are unable to cure any breaches giving rise to such inability within 30 days of the date that TRW and TRW Automotive become parties (this termination right is referred to as the “Non-Certification Termination Right”).

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based on the Deadline Termination Right or the Merger Termination Right described above, and

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TRW pays Northrop Grumman a fee in connection with the termination of the Merger Agreement,

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the failure of any representation or warranty of Northrop Grumman, TRW or TRW Automotive set forth in Article V of the Master Purchase Agreement or any of the Ancillary Agreements described below, or any representation or warranty contained in any certificate delivered by or on behalf of such parties pursuant to the Master Purchase Agreement, to be true and correct as of the date made;

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the breach or default in the performance of any covenant or other agreement of Northrop Grumman, TRW or TRW Automotive under the Master Purchase Agreement or any of the Ancillary Agreements; and

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the liabilities designated as excluded liabilities pursuant to the Master Purchase Agreement.

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any losses arising out of or with respect to any employee benefit plan subject to Title IV of the Employee Retirement Income Security Act of 1974, as amended, by reason of certain companies being included as a member of a group under common control within the meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended or treated as a single employer with Northrop Grumman prior to the Automotive Sale;

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50% of any losses with respect to environmental liabilities associated with the operation or ownership of the Automotive Business on or prior to the Automotive Sale (specifically excluding any asbestos-related product liability claims or liabilities), regardless of whether the liabilities arise before or after the Automotive Sale, and subject to certain limitations;

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50% of any losses regarding the criminal investigation of Kelsey-Hayes Company (formerly known as Fruehauf Corporation) by the U.S. Attorney for the Southern District of Illinois;

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Certain specified cash amounts related to the cost of medical benefits, retiree life benefits and other post-retirement welfare benefits of certain retired employees of the Automotive Business and their dependents and beneficiaries, which are payable for the 2003 through 2008 years as provided in the Master Purchase Agreement; and

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100% of certain specified tax losses or liabilities, including among others, those associated with the Automotive Business relating to specified tax amounts due on or prior to the Automotive Sale (excluding income taxes resulting from extraordinary transactions undertaken on the closing date but after the Automotive Sale is completed). There is a reciprocal indemnity obligation of the Purchaser in favor of Northrop Grumman and its affiliates with respect to certain tax losses and liabilities, including among others, those associated with the Automotive Business relating to specified tax amounts due beginning the day after the closing date of the Automotive Sale.

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the failure of any representation or warranty of BCP Acquisition set forth in Article VI of the Master Purchase Agreement or any of the Ancillary Agreements described below, or any representation or warranty contained in any certificate delivered by or on behalf of BCP Acquisition and certain of its affiliates pursuant to the Master Purchase Agreement, to be true and correct as of the date made;

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the breach or default in the performance of any covenant or other agreement of BCP Acquisition and certain of its affiliates under the Master Purchase Agreement;

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the breach or default in the performance of any covenant or other agreements of certain specified entities under any of the Ancillary Agreements to which such entity is a party; and

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the liabilities designated as “Automotive Liabilities” pursuant to the Master Purchase Agreement.

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Intellectual Property License Agreements (providing for (i) the license of certain intellectual property rights owned by TRW to certain entities which will engage in the automotive business after the Automotive Sale, and (ii) the license of certain intellectual property rights owned by such entities to TRW after the Automotive Sale);

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Transition Services Agreement (providing for certain services and support (i) to be provided by TRW to the Purchaser, and (ii) to be provided by the Purchaser to TRW, in each case after the Automotive Sale);

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Employee Matters Agreement (providing for the allocation between TRW and the Purchaser of certain assets and liabilities and certain other matters relating to employees, employee benefit plans and compensation agreements); and

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Insurance Allocation Agreement (allocating certain insurance policies and arrangements of TRW and related insurance coverage between TRW and the Purchaser).

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The amount of cash and cash equivalents in the Pro Formas would be reduced by $1.05 billion, to reflect the amount of cash received from the Automotive Sale, as compared to the $5.0 billion cash and cash equivalents reflected in the Pro Formas. If the TRW Equity Interest is not reduced from 42.4% prior to the closing of the Automotive Sale, “cash and cash equivalents” would instead be reduced by $1.24 billion.

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A new asset category called “Note Receivable” will be added to reflect that a portion of the agreed sale price ($600 million) is in the form of a promissory note (the “Note”) with interest paid in kind as opposed to in cash. The Note will be recorded at a discounted value of approximately 80% of its face value.

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A second new asset category, called “Investments” would be added reflecting the value ($172 million) of the under-20% equity interest. If the TRW Equity Interest equity position remained at 42.4%, the amount of investment would instead be $368 million.

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The difference between the value of the preceding three items and the value of the assets of the Automotive Business would be recorded as goodwill of approximately $400 million.

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No adjustment would be made to the debt presentation in the combined pro forma balance sheet because no decisions have yet been made as to the alternative uses of the cash, although Northrop Grumman has stated that the cash likely will be used to pay down debt once the most cost effective terms and alternatives for such a debt reduction are determined.

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At the sub-20% investment position (which is the expected investment level of TRW at the closing date), Northrop Grumman intends to account for its investment using the cost method of investment accounting. In the event that the closing investment is equal to or greater than 20%, Northrop Grumman would be required to utilize the equity method. Northrop Grumman does not expect its equity interest to equal or exceed 20% at closing.

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Interest on the Note will be recognized as interest income at 8% per annum on the accreted value of the Note. Such amount is a non-cash item, since the interest will be paid in kind under normal circumstances and would not actually generate cash.

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No return on the $5.0 billion cash proceeds was provided for in the Pro Forma income statements, so no changes are necessary to adjust for the lower cash proceeds.

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Northrop Grumman’s and TRW’s dependence on sales to the United States government;

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Northrop Grumman’s and TRW’s successful performance of internal plans;

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the performance of the former TRW automotive business after the Automotive Sale;

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customers’ budgetary restraints;

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customer changes in short-range and long-range plans;

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domestic and international competition in both the defense and commercial areas;

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product performance and customer expectations;

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continued development and acceptance of new products;

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performance issues with key suppliers and subcontractors;

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government import and export policies;

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acquisition or termination of government contracts, which may include termination for the convenience of the government;

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the outcome of political and legal processes;

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legal, financial and governmental risks related to international transactions and global needs for military and commercial aircraft, electronic systems and support, information technologies, naval vessels, space systems and related products and technologies; and

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other economic, political and technological risks and uncertainties and other risk factors set out in Northrop Grumman’s and TRW’s filings from time to time with the SEC, including, without limitation, Northrop Grumman’s and TRW’s respective reports on Form 10-K and Form 10-Q.

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NOTE:

Please sign exactly as your name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.