THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Endwave Corporation (ENWV)

6/6/2006 Proxy Information

Indemnification

Our Bylaws provide that we will indemnify our directors and executive officers and may indemnify our other officers, employees and other agents to the extent not prohibited by Delaware law. The Bylaws also require us to advance litigation expenses in the case of stockholder derivative actions or other actions. The indemnified party must repay such advances if it is ultimately determined that the indemnified party is not entitled to indemnification.

Transactions with Northrop Grumman Corporation

Northrop Grumman Corporation was a beneficial owner of a significant portion of our outstanding common stock from March 2000 through the beginning of December 2005. The record holder of such shares was most recently Northrop Grumman Space & Mission Systems Corp., a wholly-owned subsidiary of Northrop Grumman Corporation. We maintain a supply agreement and a technology services agreement with Northrop Grumman Space & Mission Systems Corp. The supply agreement, which specifies volume and price commitments, was effective by its terms through December 31, 2005 and has been extended by mutual agreement until December 31, 2006 while parties negotiate the terms of a new supply agreement. Under the existing agreement, we recorded purchases of $7.1 million, $4.2 million and $3.1 million for 2005, 2004 and 2003, respectively.

We also sell various products and services under purchase orders and agreements to various subsidiaries and divisions of Northrop Grumman Corporation, and recognized revenues of $61,000, $86,000 and $345,000 in 2005, 2004 and 2003, respectively. In the years ended December 31, 2005, 2004 and 2003, we incurred costs related to these revenues of approximately $39,000, $51,000 and $124,000.

At December 31, 2004, we had accounts receivable of $15,000 and accounts payable of $1.3 million related to our supplier and customer relationships, respectively, with Northrop Grumman Corporation and its subsidiaries.

Some radios incorporating our transceivers that are manufactured and shipped by one of our customers have experienced degraded performance after installation in the field. The cause of the degradation was identified to be a faulty semiconductor component originally developed and supplied by TRW Inc. that was incorporated in the transceiver. TRW was later acquired by Northrop Grumman Corporation and renamed Northrop Grumman Space & Mission Systems Corp., and its foundry is referred to in this report by its tradename, Velocium. Pursuant to a settlement agreement between TRW and us, we are responsible for the direct costs associated with the repair and replacement of the degraded transceivers produced under our supply agreement with the customer. Northrop Grumman Space & Mission Systems Corp., as successor to TRW, compensated our customer for the indirect costs associated with the repair and replacement of the degraded radios and transceivers. These indirect costs include the costs associated with removing and replacing the radios in the field as well as removing and replacing the transceiver module in each returned radio. Under an agreement we entered into with Northrop Grumman Space & Mission Systems Corp. in March 2005, we agreed to pay $300,000 to Northrop Grumman Space & Mission Systems Corp. as final reimbursement for these indirect costs and to assume sole responsibility for any future product failures attributable to the TRW semiconductor component. We are in the process of designing a replacement component, which will be fabricated by an alternate supplier, that we believe will eliminate the degradation of performance in future production units. We expect to complete the design and qualification of this replacement component by mid-2006 at a cost of approximately $115,000. During 2001, we reserved $4.6 million for warranty charges to cover the actual repair of the transceivers containing these faulty components, of which $2.4 million had been used or reversed through December 31, 2005. We believe that our remaining reserve is adequate to cover our remaining warranty obligations.

9/12/2005 Proxy Information

Indemnification

Our bylaws provide that we will indemnify our directors and executive officers and may indemnify our other officers, employees and other agents to the extent not prohibited by Delaware law. Our bylaws also require us to advance litigation expenses in the case of stockholder derivative actions or other actions. The indemnified party must repay such advances if it is ultimately determined that the indemnified party is not entitled to indemnification.

Transactions with Northrop Grumman Corporation

Northrop Grumman Corporation was the beneficial owner of approximately 19.3% of our outstanding common stock as of July 29, 2005. The record holder of such shares is Northrop Grumman Space & Mission Systems Corp., a wholly-owned subsidiary of Northrop Grumman Corporation. We maintain a supply agreement and a technology services agreement with Northrop Grumman Space & Mission Systems Corp. The supply agreement specifies volume and price commitments and is effective through December 31, 2005. Under these agreements, we recorded purchases of $4.2 million, $3.1 million and $7.2 million for 2004, 2003 and 2002, respectively.

We also sell various products and services under purchase orders and agreements to various subsidiaries and divisions of Northrop Grumman Corporation, and recognized revenues of $86,000, $345,000 and $837,000 in 2004, 2003 and 2002, respectively. In the years ended December 31, 2004, 2003 and 2002, we incurred costs related to these revenues of approximately $51,000, $124,000 and $235,000.

At December 31, 2004, we had accounts receivable of $15,000 and accounts payable of $1.3 million related to our supplier and customer relationships, respectively, with Northrop Grumman Corporation and its subsidiaries. At December 31, 2003, we had accounts receivable of $105,000 and accounts payable of $1.4 million related to our supplier and customer relationships, respectively, with Northrop Grumman Corporation and its subsidiaries. At December 31, 2002, we had accounts receivable of $100,000 and accounts payable of $1.0 million related to our supplier and customer relationships, respectively, with Northrop Grumman Corporation and its subsidiaries.

Some transceivers that were manufactured by us in 2000 and 2001 have experienced degraded performance after installation in the field. The cause of the degradation was identified to be a faulty semiconductor component originally developed and supplied by TRW Inc. that was incorporated in the transceiver. TRW Inc. was later acquired by Northrop Grumman Corporation and renamed Northrop Grumman Space & Mission Systems Corp. Pursuant to a settlement agreement between TRW and us, we are responsible for the direct costs associated with the repair and replacement of the degraded transceivers produced under our supply agreement with the customer. Northrop Grumman Space & Mission Systems Corp., as successor to TRW, compensated our customer for the indirect costs associated with the repair and replacement of the degraded radios and transceivers. These indirect costs include the costs associated with removing and replacing the radios in the field as well as removing and replacing the transceiver module in each returned radio. Under an agreement we entered into with Northrop Grumman Space & Mission Systems Corp. in March 2005, we paid $300,000 to Northrop Grumman Space & Mission Systems Corp. as final reimbursement for these indirect costs and assumed sole responsibility for any future product failures attributable to the TRW semiconductor component. We are in the process of designing a replacement component, which will be fabricated by an alternate supplier, that we believe will eliminate the degradation of performance in future production units. We expect to complete the design and qualification of this replacement component by the end of 2005 at a cost to us of approximately $120,000. During 2001, we reserved $4.6 million for warranty charges to cover the actual repair of the transceivers containing these faulty components, of which approximately $1.6 million had been used through June 30, 2005. We believe that our remaining reserve is adequate to cover our remaining warranty obligations.

Northrop Grumman CorporationÕs significant beneficial ownership stake in us is attributable to our acquisition of TRW Milliwave, in which shares of our capital stock were issued to TRW Inc. as the sole stockholder of TRW Milliwave. TRW Inc. was subsequently acquired by Northrop Grumman Corporation and renamed Northrop Grumman Space & Mission Systems Corp. In connection with the acquisition of TRW Milliwave, we entered into an investor rights agreement with TRW Inc. and several other holders of our capital stock, which we refer to in this prospectus as the old registration rights agreement. Our only remaining obligations under the old registration rights agreement are various obligations to register the shares held by such stockholders under the Securities Act of 1933. Those obligations expire on October 14, 2005.

In connection with the foregoing settlement, we entered into a new registration rights agreement with Northrop Grumman Space & Mission Systems Corp. The new registration rights agreement provides that the expiration date of the registration rights afforded to Northrop Grumman Space & Missions Systems Corp. under the old registration rights agreement will be extended to October 14, 2008 or such earlier date on which it holds less than 5% of our outstanding common stock.