Exhibit 10.10(a)

                            ASSET PURCHASE AGREEMENT

                                 by and between

                     ACTIVE TOOL & MANUFACTURING CO., INC.,

                        PROACTIVE ACQUISITION CORPORATION

                                       and

                             WILLIAMS CONTROLS, INC.

                               Dated July 28, 1999

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<S>              <C>      <C>                                                                                          <C>

                                TABLE OF CONTENTS

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ARTICLE I         PURCHASE OF ACQUIRED ASSETS .............................................AND ASSUMPTION OF LIABILITIES 1
                  1.1      The Transaction...............................................................................1
                  1.2      Acquired Assets...............................................................................1
                  1.3      Assumed Liabilities...........................................................................3
                  1.4      Purchase Price................................................................................4
                  1.5      Payment of Purchase Price.....................................................................4
                  1.6      Allocation....................................................................................4

ARTICLE II        CLOSING................................................................................................4
                  2.1      Closing Date..................................................................................4
                  2.2      Deliveries at the Closing.....................................................................4
                  2.3      Third Party Consents..........................................................................5

ARTICLE III       REPRESENTATIONS AND WARRANTIES OF THE SELLER...........................................................5
                  3.1      Organization..................................................................................5
                  3.2      Authority and Enforceability..................................................................5
                  3.3      No Conflict or Violation......................................................................5
                  3.4      Title.........................................................................................6
                  3.5      Intellectual Property.........................................................................6
                  3.6      No Tax Liens; No Waiver.......................................................................8
                  3.7      Compliance With Laws..........................................................................9
                  3.8      Litigation or Proceedings.....................................................................9
                  3.9      Third-Party Consents..........................................................................9
                  3.10     Warranties....................................................................................9
                  3.11     Environmental Matters.........................................................................9
                  3.12     Other Purchasers.............................................................................10
                  3.13     Assumed Contracts............................................................................10
                  3.14     Employee Relations...........................................................................11

ARTICLE IV        REPRESENTATIONS AND WARRANTIES OF THE BUYER...........................................................11
                  4.1      Organization.................................................................................11
                  4.2      Authority and Enforceability.................................................................11
                  4.3      No Conflict or Violation.....................................................................11
                  4.4      Condition of Purchased Assets................................................................12
                  4.5      Nonreliance..................................................................................12


                                       i
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                                                                                                                      ----

ARTICLE V         COVENANTS.............................................................................................12
                  5.1      Conduct of Business..........................................................................12
                  5.2      Consents.....................................................................................12
                  5.3      Efforts of the Parties.......................................................................12
                  5.4      Parties'Access to Records After Closing......................................................12
                  5.5      Disposal of Records..........................................................................13
                  5.6      Further Assurances...........................................................................13
                  5.7      Cooperation in Litigation....................................................................13
                  5.8      Press Releases...............................................................................13
                  5.9      Other Tax Payments...........................................................................14
                  5.10     Financing....................................................................................14
                  5.11     Product Liability Insurance..................................................................14
                  5.12     The Buyer's Obligation with Respect to the Seller's Employees................................14

ARTICLE VI        CONDITIONS TO CLOSING.................................................................................15
                  6.1      Conditions to Obligations of the Buyer.......................................................15
                  6.2      Conditions to Obligations of the Seller......................................................16

ARTICLE VII INDEMNIFICATION.............................................................................................17
                  7.1      Definitions..................................................................................17
                  7.2      Indemnification from the Seller..............................................................17
                  7.3      Indemnification from the Buyer...............................................................18
                  7.4      Calculation of Losses........................................................................19
                  7.5      Termination of Indemnification...............................................................20
                  7.6      Procedures Relating to Indemnification for Third Party Claims................................20
                  7.7      Other Claims.................................................................................22
                  7.8      Adjustment to the Purchase Price.............................................................22
                  7.9      Express Limitation on Liability of Shareholders..............................................22

ARTICLE VIII  TERMINATION...............................................................................................22
                  8.1      Termination..................................................................................22
                  8.2      Effect of Termination........................................................................23

                                       ii
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ARTICLE IX        MISCELLANEOUS.........................................................................................23
                  9.1      Exhibits and Schedules.......................................................................23
                  9.2      Amendment....................................................................................23
                  9.3      Extension; Waiver............................................................................23
                  9.4      Entire Agreement; No Third Party Beneficiaries; Permitted Assigns............................24
                  9.5      Governing Law; Venue.........................................................................24
                  9.6      Certain Definitions..........................................................................24
                  9.7      Notices......................................................................................25
                  9.8      Counterparts; Headings.......................................................................26
                  9.9      Expenses.....................................................................................26
                  9.10     Successors and Assigns.......................................................................26
                  9.11     Confidentiality..............................................................................26
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                                      iii
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                            ASSET PURCHASE AGREEMENT


         THIS ASSET PURCHASE  AGREEMENT (the "Agreement") is made as of July 28,
1999,  by and  between  Active  Tool  &  Manufacturing  Co.,  Inc.,  a  Michigan
corporation  (the  "Seller"),  ProActive  Acquisition  Corporation,  a  Michigan
corporation (the "Buyer") and Williams  Controls,  Inc., a Delaware  corporation
("Parent"),  solely with respect to certain  provisions of this  Agreement.  The
Seller, Parent and the Buyer are referred to from time to time in this Agreement
as the "Parties."

                                   BACKGROUND

         A. The Seller,  through its ProActive Pedals division,  is and has been
engaged in the development,  design,  engineering,  production,  marketing,  and
sales of adjustable pedal systems,  including  modular versions of such systems,
electro-mechanical  systems  that allow  brake,  accelerator  and, if  required,
clutch  pedals of a vehicle  to be  adjusted  in unison  (forward  or  backward)
relative to the position of the driver,  including  supplemental  components for
such systems (collectively "Pedal Systems" or the "Business").

         B. The Seller  desires to sell and the Buyer desires to purchase all of
Seller's  assets  which are used  exclusively  in the  Business,  subject to the
Buyer's assumption of certain liabilities of the Business, and Parent's guaranty
of certain  of Buyer's  obligations  under  this  Agreement,  upon the terms and
subject to the conditions of this Agreement.

         NOW,  THEREFORE,  in consideration of the mutual covenants contained in
this Agreement, the Parties agree as follows.

                                    AGREEMENT

                                    ARTICLE I

                         PURCHASE OF ACQUIRED ASSETS AND
                            ASSUMPTION OF LIABILITIES

         1.1 The  Transaction.  Upon the terms and subject to the  conditions of
this  Agreement,  the  Seller  agrees to sell,  assign,  transfer,  convey,  and
deliver, or cause to be sold, assigned, transferred,  conveyed and delivered, to
the Buyer and the Buyer  agrees to  purchase,  at the  Closing  (as  defined  in
Section 2.1),  the Acquired  Assets as provided in Section 1.2, the Buyer agrees
to assume the  Assumed  Liabilities  as  provided  in Section 1.3 and the Parent
agrees to execute the Guaranty  Agreement  in the form  attached as Schedule 1.1
(the "Guaranty Agreement").


                                       1
<PAGE>

         1.2 Acquired  Assets.  Upon the terms and subject to the  conditions of
this Agreement, the Seller shall execute and deliver to the Buyer on the Closing
Date (as defined in Section 2.1) a bill of sale in a form reasonably  acceptable
to each of the Parties  (the "Bill of Sale")  pursuant to which the Seller shall
sell,  assign,  transfer,  convey,  and deliver the Acquired Assets to the Buyer
free and clear of all Liens (as defined in Section  9.6),  other than  Permitted
Encumbrances  (as defined in Section 3.5). The term "Acquired  Assets" means all
of the assets of the Seller used  exclusively  in the  Business,  including  the
following:

                  (a) all fixed assets and inventory  located on the premises of
7464/7472 Nineteen Mile Road, Sterling Heights, Michigan, including the property
of the Seller listed on Schedule 1.2(a);

                  (b)      all tooling of the Seller relating to the Business;

                  (c) all  right,  title and  interest  of the Seller in, to and
under all contracts,  agreements,  leases,  purchase orders, customer orders and
work orders listed on Schedule 1.2(b) (the "Assumed Contracts");

                  (d) all Intellectual  Property,  as defined below, relating to
the Business,  goodwill associated  therewith,  licenses and sublicenses granted
and obtained  with respect  thereto,  and rights  thereunder,  remedies  against
infringements  thereof,  and rights to the protection of interests therein under
the laws of all jurisdictions;

                  (e) accounts, notes and other receivables of the Business;

                  (f) claims, deposits, prepayments,  refunds, causes of action,
choses in action, rights of recovery, rights of set off and rights of recoupment
(including  any such item  relating  to the  payment of taxes)  relating  to the
Business;

                  (g) all right,  title and interest of the Seller in and to the
name "ProActive Pedals" and variations thereof;

                  (h) to the extent  legally  assignable,  all right,  title and
interest  of the  Seller  in, to and under all  franchises,  licenses,  permits,
orders, certificates, approvals, and other governmental authorizations which are
necessary  to own,  lease or operate  the  Acquired  Assets (the  "Licenses  and
Permits");

                  (i)  all  customer  lists,   supplier  lists,  trade  secrets,
engineering  data and  proprietary  information  of the Seller  relating  to the
Business; and

                  (j) all books and  records of the Seller,  including,  but not
limited  to,  financial  and  accounting  records,  shipping  records,  sale and
purchase correspondence and files relating to the Business.


                                       2
<PAGE>

         For purposes of this Agreement,  "Intellectual  Property" means (i) all
inventions  (whether  patentable or  unpatentable  and whether or not reduced to
practice),  all improvements thereto, and all patents, patent applications,  and
patent    disclosures,    together   with   all    reissuances,    continuances,
continuations-in-part,  revisions,  extensions, and reexaminations thereof; (ii)
all trademarks,  service marks,  trade dress,  logos, trade names, and corporate
names,   together  with  all   translations,   adaptations,   derivations,   and
combinations  thereof  and  all  applications,  registrations  and  renewals  in
connection  therewith;  (iii) all copyrightable  works, all copyrights,  and all
applications,  registrations and renewals in connection therewith; (iv) all mask
works and all applications,  registrations and renewals in connection therewith;
(v) all trade secrets and confidential  business  information  (including ideas,
research and development,  know-how, formulas,  compositions,  manufacturing and
production  processes  and  techniques,   technical  data,  designs,   drawings,
specifications,  pricing and cost  information  and business and marketing plans
and  proposals);   (vi)  all  computer  software  (including  data  and  related
documentation);  and (vii) all  copies  and  tangible  embodiments  thereof  (in
whatever form or medium).

         1.3  Assumed  Liabilities.  (a)  Upon  the  terms  and  subject  to the
conditions of this Agreement,  the Buyer shall execute and deliver to the Seller
on the Closing Date an agreement in a form reasonably  acceptable to each of the
Parties (the  "Assumption  Agreement")  pursuant to which Buyer shall assume and
agree  to pay,  perform,  and  discharge  when due and on a  timely  basis,  the
following obligations and liabilities of the Seller (collectively,  the "Assumed
Liabilities"):

                           (i)   all obligations  and  liabilities of the Seller
under the Assumed Contracts;

                           (ii)  all   outstanding   trade   payables,   accrued
liabilities and other unpaid debts and liabilities of the
Seller  relating  exclusively  to the  Business,  as reflected on the  financial
statements  for the  Business  and  other  liabilities  of the  Seller  relating
exclusively  to the  Business  which  are  incurred  in the  ordinary  course of
operations after the date of such financial statements,  other than intercompany
payables or any  liabilities  of the Business due to the Seller or any affiliate
of the Seller,  other than those assumed by the Buyer under  Section  1.3(a)(i),
(iii) or (iv);

                           (iii)  all  service  and  warranty   obligations  and
liabilities arising out of or related to the sale of  Pedal  Systems   designed,
manufactured  or sold by the  Seller  on or  prior to the  Closing  Date and any
litigation  arising  out of or  related  to such  obligations  and  liabilities,
including  any  obligations  or  liabilities  arising  out of or  related to any
alleged defect or  imperfection in any Pedal Systems  designed,  manufactured or
sold by the Seller ("Product  Liability"),  provided the Seller had no knowledge
of the foregoing as of the Closing Date; and

                           (iv) all liabilities for  infringement by the Seller,
if any, of third party owned Intellectual Property arising out of or relating to
the  Business  on or prior to the  Closing  Date,  provided  the  Seller  had no
knowledge of the foregoing as of the Closing Date, and, provided  further,  that
notwithstanding  the  preceding  clause,  the  Buyer  shall  be  liable  for all
liabilities for infringement, if any, by the Seller of Lemelson patents referred
to in Schedule 3.6(b).

                  (b) The Buyer  shall not  assume or agree to pay (i)  Seller's
obligations  under the  Confidential  Settlement  Agreement  and  Release of All
Claims dated December 5, 1997 between  Comcorp  Technologies,  Inc. f/k/a Brecom
Corporation, a Michigan corporation,  and DeCouper Industries,  Inc., a Michigan
corporation,  Edmond B. Cicotte, an individual, and Seller; or (ii) any taxes of
any nature  arising out of or due to the operations of the Business prior to the
Closing.


                                       3
<PAGE>

                  (c) Except as specifically  provided in Section 1.3, the Buyer
shall not assume any other liabilities of Seller.

         1.4 Purchase Price. The purchase price for the Acquired Assets shall be
an  amount  equal  to  Five  Million  Seven  Hundred  Fifty   Thousand   Dollars
($5,750,000).

         1.5 Payment of Purchase  Price.  The Buyer and the Parent  shall pay to
the Seller the Purchase Price by wire transfer of immediately  available federal
funds to such account(s) as the Seller shall designate.

         1.6  Allocation.  The Parties  acknowledge  that the  allocation of the
Purchase  Price and  Assumed  Liabilities  to the  Acquired  Assets and  Assumed
Liabilities (the "Allocation")  shall be determined as provided in Schedule 1.6.
The Parties  agree (a) to complete  within 60 days after the  Closing,  Internal
Revenue  Service  Form 8594  based  upon such  Schedule,  (b) to report  for tax
reporting purposes the transactions  contemplated by this Agreement consistently
with the  allocation  set forth in such  Schedule and (c) to take no position in
any  examination,  claim for refund,  or contest of any adjustment to any return
that is inconsistent with the allocation set forth in such Schedule. The Parties
shall report  (including with respect to the filing of Form 8594 to the Internal
Revenue Service) the sale and purchase of the Acquired Assets for all income tax
purposes  in a  manner  consistent  with  such  Allocation  and  shall  not,  in
connection  with the filing of such return,  make any Allocation of the Purchase
Price and Assumed  Liabilities which is contrary to the Allocation.  The Parties
agree to consult with one another with respect to any tax audit,  controversy or
litigation relating to the Allocation.

                                   ARTICLE II

                                     CLOSING

         2.1 Closing Date. The closing of the transactions  contemplated by this
Agreement  (the  "Closing")  shall take place at the  offices of Dykema  Gossett
PLLC, 400 Renaissance Center, Detroit, Michigan 48243 at 10:00 a.m., local time,
on or before July 28, 1999,  or at such other  location,  time or date as may be
agreed upon by the Parties (the "Closing Date").

         2.2      Deliveries at the Closing.  At the Closing:

                  (a) the  Seller  shall  deliver  to the Buyer (i) the  various
agreements,  certificates,  and other documents and  instruments  referred to in
Section  6.1,  and (ii) such other  documents  as the Buyer or its  counsel  may
reasonably request to demonstrate  satisfaction of the conditions and compliance
with the agreements set forth in this Agreement;

                  (b) the Buyer and  Parent  shall  deliver  to the  Seller  the
payment of the Purchase  Price as provided in Section 1.4 on July 29, 1999,  and
the  Buyer  shall   deliver  to  the  Seller  the  various   other   agreements,
certificates,  and other documents and  instruments  referred to in Section 6.2,

                                       4
<PAGE>

and such other documents as the Seller or its counsel may reasonably  request to
demonstrate  satisfaction  of the conditions and compliance  with the agreements
set forth in this Agreement; and


                  (c) the  Parent  shall  deliver  to the  Seller  the  Guaranty
Agreement.

         2.3 Third Party Consents.  To the extent that the Seller's rights under
any agreement, contract, commitment, lease, license, permit or other asset to be
assigned  to the Buyer  under this  Agreement  may not be  assigned  without the
consent of another person which has not been obtained (a) this  Agreement  shall
not constitute an agreement to assign the same if an attempted  assignment would
constitute  a breach  thereof or be  unlawful,  and (b) the Seller shall use its
commercially  reasonable  efforts  to obtain  any such  required  consent(s)  as
promptly as possible.  If any such  consent is not obtained or if any  attempted
assignment  would be  ineffective  or would impair the Buyer's  rights under the
asset in question  so that the Buyer would not in effect  acquire the benefit of
all such  rights,  the Seller,  to the maximum  extent  permitted by law and the
asset,  shall act after the Closing as the Buyer's  agent in order to obtain for
the Buyer the benefits  thereunder  and shall  cooperate,  to the maximum extent
permitted  by law  and  the  asset,  with  the  Buyer  in any  other  reasonable
arrangement designed to provide such benefits to the Buyer.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

         The Seller represents and warrants to the Buyer as follows:

         3.1 Organization.  The Seller is a corporation duly organized,  validly
existing, and in good standing under the laws of the state of its incorporation.
The Seller has all requisite  corporate power and authority to own,  lease,  and
operate the  Acquired  Assets and to operate the Business as and where now being
conducted.

         3.2 Authority and  Enforceability.  The Seller has all requisite  power
and  authority to enter into this  Agreement  and to carry out the  transactions
contemplated by this Agreement. The execution, delivery, and performance of this
Agreement and the other agreements and documents to be executed and delivered by
the Seller pursuant to the provisions of this Agreement (the "Seller Documents")
have been duly authorized by all necessary  corporate  action on the part of the
Seller.  This  Agreement  and the Seller  Documents  have been duly executed and
delivered by the Seller and constitute the legal,  valid, and binding obligation
of the Seller,  enforceable in accordance with their respective terms, except as
the enforceability thereof may be limited by applicable bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting  creditors'  rights
generally and general equitable principles.


                                       5
<PAGE>


         3.3 No Conflict or Violation. Except as set forth in Schedule 3.10, the
execution, delivery, and performance of this Agreement and the Seller Documents,
the  consummation  by the  Seller of the  transactions  contemplated  hereby and
thereby,  and the compliance with the terms of this Agreement and thereof do not
(a) violate  any  provision  of the  Articles of  Incorporation,  Bylaws,  other
organizational documents or any resolutions adopted by the Board of Directors or
the  shareholders  of the  Seller,  (b)  violate,  or  result  in a breach of or
constitute a default in any material  respect  under,  any term,  condition,  or
provision of any contract,  agreement,  purchase order, work order, warranty, or
undertaking  (whether  oral or written)  to which  Seller is a party or by which
Seller is bound  (assuming  receipt of necessary  consents),  or (c) violate any
law, regulation, order, judgment, or decree of any court or governmental body or
authority to which, to the knowledge of the Seller, the Business or the Acquired
Assets is subject.

         3.4  Financial  Statements.  The Seller has  provided  to the Buyer the
following  financial  statements for the Business:  balance sheet as of June 30,
1999 and income  statements  for the year ended  December  31, 1998 and the five
months ended June 30, 1999 (collectively,  the "Business Financial Statements").
The Business Financial  Statements are derived from the books and records of the
Business and reflect in all material respects the financial  transactions of the
Business for the periods covered by the Business  Financial  Statements,  except
that the Business  Financial  Statements do not contain any charge for corporate
overhead.

         3.5  Title.  The  Seller  has good and  marketable  title to all of the
Acquired Assets,  free and clear of all Liens of any nature  whatsoever,  except
(a) as set forth on Schedule  3.5,  which Liens shall be released at or prior to
Closing,  (b) Liens for current taxes,  assessments or governmental  charges not
yet due and  delinquent,  and (c)  Liens of  mechanics,  materialmen,  laborers,
warehousemen,  carriers, and other similar common law or statutory liens arising
in the ordinary  course of business which are not yet due and payable or, if due
and payable,  have been  adequately  bonded or are being contested in good faith
(collectively, the "Permitted Encumbrances").

         3.6      Intellectual Property

                  (a) To the  knowledge of the Seller,  the Business owns or has
the right to use pursuant to license,  sublicense,  agreement, or permission all
Intellectual  Property  necessary for the operation of its business as presently
conducted and as presently  proposed to be conducted.  Each item of Intellectual
Property owned or used by the Business  immediately prior to the Closing will be
owned  or  available  for  use by the  Buyer  on no  less  favorable  terms  and
conditions  immediately subsequent to the Closing except to the extent the Buyer
has agreed to modify such terms and  conditions  and subject to Section  3.10 of
this  Agreement.  The  Business has taken all  necessary  action to maintain and
protect each item of Intellectual Property that it owns or uses.

                  (b) To the  knowledge  of the  Seller,  the  Business  has not
interfered with, infringed upon, misappropriated or otherwise come into conflict
with any  Intellectual  Property rights of third parties.  None of the directors
and  officers  of  the  Business  or  the  Seller   (including   employees  with
responsibility for Intellectual  Property matters) has ever received any charge,
complaint, claim, demand or notice alleging any such interference, infringement,
misappropriation  or  violation  (including  any claim  that the  Business  must
license or  refrain  from using any  Intellectual  Property  rights of any third
party except as listed in Schedule  3.6(b)).  To the knowledge of the Seller and
its employees with  responsibility for Intellectual  Property matters,  no third
party has interfered with,  infringed upon,  misappropriated,  or otherwise come
into conflict with any Intellectual Property rights of the Business.


                                       6
<PAGE>

                  (c) Schedule  3.6(c)  identifies  each patent or  registration
which has been issued to the Business,  or invention disclosures prepared by the
Seller,  if any, with respect to any of its  Intellectual  Property,  identifies
each pending  patent  application  or  application  for  registration  which the
Business  has  made  with  respect  to  any of its  Intellectual  Property,  and
identifies each license,  agreement,  or other  permission which the Business or
the Seller has granted to any third party with  respect to any of the  Business'
Intellectual  Property (together with any exceptions).  The Seller has delivered
to the Buyer  correct and complete  copies of all such  patents,  registrations,
applications,  licenses,  agreements and permission (as amended to date) and has
made  available to the Buyer  correct and complete  copies of all other  written
documentation  evidencing ownership and prosecution (if applicable) of each such
item. Schedule 3.6(c) also identifies each trade name or unregistered  trademark
used by the  Business.  With  respect  to each  item  of  Intellectual  Property
required to be identified on Schedule 3.6(c):

                           (i)      The Business possesses all right,  title and
                                    interest in and to the item,  free and clear
                                    of any Lien, license or restriction;

                           (ii)     The item  is  not subject to any outstanding
                                    injunction, judgment, order, decree,  ruling
                                    or charge;

                           (iii)    No  action,   suit,   proceeding,   hearing,
                                    investigation,  charge, complaint,  claim or
                                    demand is pending or to the knowledge of the
                                    Seller and its employees with responsibility
                                    for   Intellectual   Property   matters   is
                                    threatened  which  challenges  the legality,
                                    validity,  enforceability,  use or ownership
                                    of the item; and

                           (iv)     Except as  identified  on  Schedule  3.6(c),
                                    neither the Business nor the Seller has ever
                                    agreed  to  indemnify   any  person  for  or
                                    against  any   interference,   infringement,
                                    misappropriation   or  other  conflict  with
                                    respect to the item.

                  (d)  Schedule  3.6(d)  identifies  each  item of  Intellectual
Property  that any third  party  owns and that the  Business  uses  pursuant  to
license,  sublicense,  agreement  or  permission  and which is  material  to the
Business as  currently  conducted  (excluding  packaged  commercially  available
software available to the public through retail dealers which have been licensed
to the Seller pursuant to end-user  licensees).  The Seller has delivered to the
Buyer complete and correct copies of all such licenses, sublicenses, agreements,
and permission (as amended to date). With respect to each of the foregoing items
of Intellectual Property required to be identified on Schedule 3.6(d):



                                       7
<PAGE>

                           (i)      The   license,   sublicense,   agreement  or
                                    permission   covering  the  item  is  legal,
                                    valid,  binding,  enforceable,  and in  full
                                    force and effect;

                           (ii)     The   license,   sublicense,   agreement  or
                                    permission will continue to be legal, valid,
                                    binding,  enforceable, and in full force and
                                    effect  on  identical  terms  following  the
                                    consummation     of     the     transactions
                                    contemplated  hereby subject to Section 3.10
                                    of this Agreement;

                           (iii)    No   party  to  the   license,   sublicense,
                                    agreement  or  permission  is in  breach  or
                                    default,  and no event  has  occurred  which
                                    with   notice   or  lapse   of  time   would
                                    constitute  a breach  or  default  or permit
                                    termination,  modification  or  acceleration
                                    thereunder;

                           (iv)     To the knowledge of the Seller,  no party to
                                    the   license,   sublicense,   agreement  or
                                    permission   has  repudiated  any  provision
                                    thereof;

                           (v)      With   respect  to  each   sublicense,   the
                                    representations  and warranties set forth in
                                    subparagraphs  (i)  through  (iv)  above are
                                    true  and  correct   with   respect  to  the
                                    underlying license;

                           (vi)     The underlying item of Intellectual Property
                                    is   not   subject   to   any    outstanding
                                    injunction,  judgment, order, decree, ruling
                                    or charge;

                           (vii)    No  action,   suit,   proceeding,   hearing,
                                    investigation,  charge, complaint,  claim or
                                    demand is pending or to the knowledge of the
                                    Seller and its employees with responsibility
                                    for   Intellectual   Property   matters   is
                                    threatened  which  challenges  the legality,
                                    validity or enforceability of the underlying
                                    item of Intellectual Property; and

                           (viii)   Neither  the  Business  nor the  Seller  has
                                    granted any sublicense or similar right with
                                    respect   to   the   license,    sublicense,
                                    agreement or permission.

                  (e) To the  knowledge  of the  Seller and its  employees  with
responsibility  for  Intellectual   Property  matters,  the  Business  will  not
interfere with, infringe upon,  misappropriate,  or otherwise come into conflict
with,  any  Intellectual  Property  rights of third  parties  as a result of the
continued  operation  of its business as  presently  conducted  and as presently
proposed to be conducted.

         3.7      No Tax Liens; No Waiver

                  (a) None of the  Acquired  Assets  are  subject to any lien in
favor of the United  States  pursuant to the Internal  Revenue Code of 1986,  as
amended (the "IRC") for nonpayment of federal taxes, or any lien in favor of any
state  under any  comparable  provision  of state law,  under  which  transferee
liability  might  be  imposed  upon  Buyer  as  purchaser  under  the IRC or any
comparable  provision of state or local law,  except for ad-valorem  taxes which
are not yet due and payable.


                                       8
<PAGE>

                  (b)  Except as  provided  on  Schedule  3.7,  Seller is not in
default under, nor has it failed to pay, any tax liability to any federal, state
or  local  authority,  and no audit or other  review  by any such  authority  is
pending,  or, to the  knowledge  of  Seller,  contemplated  with  respect to the
Business or the Acquired Assets for any period of operation prior to the Closing
Date.

         3.8  Compliance  With Laws.  Except as set forth on Schedule  3.8,  the
Seller is not in violation nor has it violated any applicable  order,  judgment,
injunction,  award or decree  relating to the Business.  To the knowledge of the
Seller,  except as disclosed on Schedule 3.8, the Seller has not violated nor is
it in  violation  of any  federal,  state,  local or foreign  law,  ordinance or
regulation or any other  requirement  of any  governmental  or regulatory  body,
court or arbitrator applicable to the Business.

         3.9  Litigation  or  Proceedings.  Except as set forth on Schedule 3.9,
there is no litigation,  arbitration or proceeding  pending or, to the knowledge
of the Seller,  threatened  against or  affecting  the  Business or the Acquired
Assets, at law or in equity, by or before any court,  arbitrator or governmental
body or authority that could  reasonably be expected to have a Material  Adverse
Effect (as defined in Section 9.6.  Except as set forth on Schedule  3.9,  there
are presently no  outstanding  judgments,  decrees or orders of any court or any
governmental body or authority against or affecting the Business or the Acquired
Assets.

         3.10  Third-Party  Consents.  Except as set forth on Schedule  3.10, no
consent,  authorization or approval of, and no filing with, any third parties to
any  Assumed  Contract  or  any  governmental  authority  is  required  for  the
execution,  delivery, and performance of this Agreement and the Seller Documents
by the Seller and the consummation of the transactions  contemplated  hereby and
thereby.

         3.11  Warranties.  Schedule 3.11 sets forth true and complete copies of
the form of all  warranties  issued by the Seller  relating to the Business that
are still in effect. There are no outstanding  unresolved claims which have been
asserted against Seller under such  warranties,  nor are there, to the knowledge
of the Seller,  any  outstanding  unresolved  claims which have been  threatened
against Seller under such warranties, which could reasonably be expected to have
a Material Adverse Effect (as defined in Section 9.6).

         3.12 Product  Liability.  There are no outstanding  unresolved  Product
Liability  claims which have been asserted  against the Seller relating to Pedal
Systems  sold by the Seller,  nor are there,  to the  knowledge  of Seller,  any
outstanding  unresolved  Product  Liability  claims  which have been  threatened
against  Seller  relating  to Pedal  Systems  sold by the  Seller,  which  could
reasonably be expected to have a Material Adverse Effect.

         3.13 Environmental Matters.   Except as disclosed on Schedule 3.13,  to
              the knowledge of Seller:


                                       9
<PAGE>

                  (a)  There  has  been  no  generation,  production,  refining,
processing,  manufacturing,  use,  storage,  disposal,  treatment,  shipment  or
receipt of a Hazardous  Material,  as defined below,  at or from the Business or
relating to the  operation  of the  Business in violation of or in a manner that
could give rise to liability under Environmental Laws, as defined below.

                  (b) The  operations of the Business are in compliance and have
been in  compliance  with all  applicable  Environmental  Laws,  except for such
noncompliance which would not interfere with continued operation of the Business
or impair its fair saleable value.

                  (c) The Seller has  received no notice of  violation,  alleged
violation,   non-compliance,   liability   or  potential   liability   regarding
environmental  matters or compliance with  Environmental Laws with regard to the
Business from any Person, nor does Seller or have knowledge or reason to believe
that any such notice will be received from or is being threatened by any Person.

                  (d)  No  judicial  proceedings,   governmental  administrative
actions, investigations or internal or non-public agency proceedings relating at
the Business are pending or threatened,  under any  Environmental  Law, to which
Seller is or will be named as a party,  nor are there any  consent  decrees,  or
other  decrees,  consent  orders,  agreements,  administrative  orders  or other
orders,   judicial  or   administrative   requirements   outstanding  under  any
Environmental Law with respect to the Business.

         For purposes of this  Agreement,  (i) "Hazardous  Materials"  means any
substance (a) the presence of which at, on, over,  beneath,  in or upon any real
or  personal  property,  building,   substance,   container  of  any  nature  or
description,  subsurface strata, ambient air or ambient water (including surface
and  groundwater)  requires  investigation,  removal  or  remediation  under any
Environmental  Law  or  common  law,  (b)  which  is  defined  as  a  "hazardous
substance,"    "hazardous   material,"   "hazardous   waste,"   "pollutant"   or
"contaminant" under any Environmental Law, and/or (c) which is toxic, explosive,
corrosive,  flammable,  infectious,  radioactive,  carcinogenic,  mutagenic,  or
otherwise  hazardous and is regulated by any  governmental  authority  under any
Environmental  Law,  (d) the  presence of which  causes or  threatens to cause a
nuisance upon real  property or to adjacent  properties or poses or threatens to
pose a hazard to the  environment,  and/or to the health or safety of persons on
or  about  any real  property,  and/or  (e)  which  contains  urea-formaldehyde,
polychlorinated  biphenyls,  asbestos or asbestos containing  materials,  radon,
petroleum or petroleum products;  and (ii) "Environmental Law or Laws" means any
and all federal,  state,  local or municipal laws, rules,  orders,  regulations,
statutes,  treaties,   ordinances,   codes,  decrees,  or  requirements  of  any
governmental  authority  regulating,   relating  to  or  imposing  liability  or
standards  of  conduct  concerning  environmental  protection,  health or safety
matters,   including  all  requirements  pertaining  to  reporting,   licensing,
permitting,  investigation,  removal or  remediation  of emissions,  discharges,
releases,  or threatened releases of Hazardous  Materials,  chemical substances,
pollutants  or  contaminants  or  relating  to  the   manufacture,   generation,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling  of   Hazardous   Materials,   chemical   substances,   pollutants   or
contaminants,  including,  without limitation,  the Comprehensive  Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), the Toxic Substance
Control Act ("TSCA"),  the Resource Conservation and Recovery Act ("RCRA"),  the
Clean Air Act ("CAA") and the Clean Water Act ("CWA"),  all as are in effect and
may have been amended as of the date of this Agreement.

                                       10
<PAGE>

         3.14 Other Purchasers. No other Person has any right, claim or interest
in or to the  Business  or the  Acquired  Assets,  including  by reason of prior
negotiation,  letter of intent or agreement.  The  transactions  contemplated by
this  Agreement  will  not  give  rise to any  claim  or  cause  of  action  for
interference with any right, claim, interest or agreement of any other Person.

         3.15  Assumed  Contracts.  All  of  the  contracts,  leases  and  other
agreements  which  constitute  a part of the  Assumed  Contracts  are  valid and
binding upon Seller in accordance with their terms,  and Seller has not received
any notice of default under, or with respect to, any such  contracts,  leases or
other  agreements nor, to Seller's  knowledge,  is it in default under , or with
respect to, any of the foregoing.  Purchase order  O6131025,  dated November 17,
1995, issued to Seller by DaimlerChrysler  Corporation ("Chrysler") with respect
to Pedal  Systems for the Dodge Viper (the "Viper PO") is valid and binding upon
the Seller in  accordance  with its terms and the Seller  has not  received  any
notice of default  under,  or with  respect  to,  such  purchase  order nor,  to
Seller's  knowledge,  is it in default under, or with respect to, the Viper P.O.
The Seller has no reason to believe or  knowledge  of any reason  that  Chrysler
will not fulfill its obligations under the Viper PO.

         3.16  Employee  Relations.  Seller  is  not  a  party  to a  collective
bargaining  agreement  with  respect  to the  Business,  and there  have been no
organization efforts by any trade unions within the last five years with respect
to the employees of the Business.

                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF THE BUYER

         The Buyer hereby represents and warrants to the Seller as follows:

         4.1 Organization.  The Buyer is a Michigan  corporation duly organized,
validly  existing,  and in good  standing  under  the  laws of the  state of its
incorporation. The Buyer has all requisite corporate power and authority to own,
lease,  and operate its  properties  and assets and to carry out its business as
and where now being conducted.

         4.2 Authority and Enforceability. The Buyer has all requisite power and
authority  to  enter  into  this  Agreement  and to carry  out the  transactions
contemplated by this Agreement. The execution, delivery, and performance of this
Agreement  and the other  agreements  and documents to be delivered by the Buyer
pursuant to the provisions of this Agreement (the "Buyer  Documents")  have been
duly authorized by all necessary  corporate  action on the part of the Buyer, as
appropriate.  This Agreement and the Buyer Documents have been duly executed and
delivered by the Buyer and constitute the legal,  valid, and binding  obligation
of the Buyer  enforceable in accordance with their respective  terms,  except as
the enforceability thereof may be limited by applicable bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting  creditors'  rights
generally and general equitable principles.

                                       11
<PAGE>

         4.3 No Conflict or Violation. The execution,  delivery, and performance
of this Agreement and the Buyer Documents,  the consummation by the Buyer of the
transactions  contemplated hereby and thereby, and the compliance with the terms
of this Agreement and the Buyer  Documents by the Buyer does not (a) violate any
provision of the Articles of  Incorporation  or Bylaws of the Buyer, (b) violate
or result in a breach of or constitute a default in any material  respect under,
any term, condition, or provision of any material agreement,  contract, mortgage
or lease to which  Buyer or Parent is a party or by which any of its  assets may
be bound or affected, (c) violate any law, regulation, order, judgment or decree
of any court or governmental  body or authority to which the Buyer or any of its
assets,  to the knowledge of the Buyer, is subject,  except where the violation,
breach or default would not  reasonably  be expected to have a material  adverse
effect on the Buyer.

         4.4 Condition of Purchased  Assets.  THE BUYER, ON BEHALF OF ITSELF AND
ANY  AFFILIATES  OR RELATED  PARTIES,  UNDERSTANDS  AND AGREES THAT THE ACQUIRED
ASSETS ARE SOLD, ASSIGNED,  LEASED,  TRANSFERRED AND CONVEYED TO BUYER IN AN "AS
IS" CONDITION ON A "WHERE IS" BASIS WITHOUT ANY WARRANTY OF  MERCHANTABILITY  OR
FITNESS  FOR A  PARTICULAR  PURPOSE OR ANY OTHER  WARRANTY,  EXPRESS OR IMPLIED,
EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT.

         4.5  Nonreliance.  In  connection  with its  decision to  purchase  the
Acquired  Assets,  the Buyer, on behalf of itself and its affiliates and related
parties,  acknowledges that (a) it is a sophisticated  party with such knowledge
and experience in business  matters that it appreciates  the merits and risks of
purchasing the Acquired Assets and consummating the transactions contemplated by
this Agreement, (b) it has conducted its own due diligence investigation and has
had the  opportunity  to ask questions  and receive  answers with respect to any
information it deems material to an investment  decision,  and (c) the Seller is
making no  representation  or  warranty  with  respect  to any  forward  looking
financial projections,  budgets or other financial data relating to the Acquired
Assets or the Business prepared or furnished by or on behalf of the Seller.

                                    ARTICLE V

                                    COVENANTS

         5.1  Conduct of  Business.  Except as  otherwise  contemplated  by this
Agreement,  during the period  from the date of this  Agreement  and  continuing
until the  Closing  Date,  the Seller  agrees to  operate  the  Business  in the
ordinary course and consistent with past practices.

         5.2 Consents. The Seller shall use its commercially  reasonable efforts
to obtain, prior to the Closing Date, the consents specified on Schedule 5.2.

         5.3 Efforts of the Parties. Subject to the terms and conditions of this
Agreement,  each of the Parties shall use its commercially reasonably efforts to
take,  or cause to be taken,  all  actions  and to do, or cause to be done,  all
things  necessary or desirable to consummate the  transactions  contemplated  by
this Agreement.


                                       12
<PAGE>

         5.4 Parties'  Access to Records  After  Closing.  Except as provided in
Schedule 5.4 of this Agreement,  the Parties agree to preserve until the seventh
anniversary of the Closing Date, all records in their possession relating to any
of the Acquired Assets,  Assumed Liabilities or the Business. The Buyer has been
informed  that the Seller  shall  include the  operation  of the Business in its
federal and state  income tax returns for all periods  prior to the Closing Date
and for such purposes the Buyer shall permit authorized  employees of the Seller
or the  shareholders  of the  Seller as of the date of this  Agreement  or their
representatives  and  successors to gather and prepare such  information  as the
Seller or the  shareholders  of the Seller as of the date of this  Agreement may
reasonably  require for  preparing  such tax  returns.  In the event that either
Party or the  shareholders  of the Seller as of the date of this Agreement needs
access to records in the  possession  of the other Party  relating to any of the
Acquired Assets, Assumed Liabilities,  or the Business for purposes of complying
with or  exercising  their rights  under this  Agreement,  preparing  income tax
returns,  for complying with any audit request,  subpoena or other investigative
demand by any governmental authority or for bringing, responding to or defending
any claim,  lawsuit,  arbitration  or other legal  proceeding,  each Party shall
allow representatives of the other Party or of the shareholders of the Seller as
of the date of this Agreement access to such records,  including  reasonable use
of office space and  facilities,  during regular  business hours at such Party's
place of  business  for the sole  purpose of  obtaining  information  for use as
provided  for in  this  section,  and  shall  permit  such  other  Party  or the
shareholders of the Seller as of the date of this Agreement to make extracts and
copies thereof as may be necessary or convenient.

         5.5 Disposal of Records.  Either Party may at any time and from time to
time subsequent to the Closing Date and prior to the seventh  anniversary of the
Closing  Date,  dispose  of the  records  in their  possession  relating  to the
Business by giving sixty days' prior notice of such  disposal to the other Party
and, in the case of the Seller,  Thomas S. Vaughn of Dykema  Gossett  PLLC,  400
Renaissance  Center,  Detroit,  Michigan  48243-1668,  as  representative of the
shareholders  of the  Seller;  provided,  however,  that  if  such  records  are
pertinent to any dispute, claim, litigation,  governmental  investigation or the
determination of any federal, state or local tax liability of the other Party or
the shareholders of the Seller as of the date of this Agreement, the other Party
or  shareholders  of the Seller as of the date of this Agreement  shall have the
right,  by giving  written  notice to the Party  desiring  to dispose of records
within such sixty-day period, to require said Party to retain such records until
such time as the other Party or the shareholders of the Seller as of the date of
this  Agreement  may  specify or provide  such  records to the other Party or to
Thomas S. Vaughn on behalf of the  shareholders  of the Seller as of the date of
this Agreement.

         5.6 Further  Assurances.  Each Party shall cooperate with the other and
execute and deliver to the other Party such other  instruments and documents and
take such other actions as may be reasonably  requested from time to time by the
other Party as  necessary  to carry out,  evidence,  and  confirm  the  intended
purposes  of this  Agreement.  The  Parties  agree to use good faith  efforts to
cooperate with each other to facilitate the identification of the records of the
Seller that relate to the Business.




                                       13
<PAGE>

         5.7  Cooperation  in Litigation.  In the event that,  after the Closing
Date,  either Party shall  require the  participation  of officers and employees
employed by another  Party to aid in the defense or  settlement of litigation or
claims by third  parties,  and so long as there  exists no  conflict of interest
between the Parties, each Party shall use its commercially reasonable efforts to
make such  officers and  employees  available to  participate  in such  defense,
provided  that  the  Party  requiring  the  participation  of such  officers  or
employees shall pay all reasonable  out-of-pocket  costs,  charges, and expenses
arising from such participation.

         5.8 Press Releases. Except as required by applicable law, neither Party
shall give notice to third  parties or  otherwise  make any public  statement or
releases  concerning  this Agreement or the  transactions  contemplated  by this
Agreement  except for such written  information  as shall have been  approved in
writing as to form and content by the other Party,  which  approval shall not be
unreasonably  withheld;  provided,  however,  that  such  approval  shall not be
required in connection with the  communication by the Seller with its employees,
customers or suppliers concerning the Agreement.

         5.9 Other Tax  Payments.  The  Buyer  shall pay when due all  transfer,
sales, use, stamp,  recording,  and other similar taxes and fees,  including any
penalties  and interest,  arising out of or in connection  with the transfers of
the Acquired Assets to Buyer (the "Transfer Taxes").  The Buyer, at its expense,
shall file all necessary  documentation and returns with respect to any Transfer
Taxes.

         5.10  Financing.  On the Closing Date the Buyer shall have,  sufficient
funds  available to it to pay the Purchase  Price to the Seller and to otherwise
satisfy all of its respective obligations under this Agreement.

         5.11 Product Liability  Insurance.  The Buyer shall provide the Seller,
within thirty days after the Closing Date, with a certificate  naming the Seller
as an insured under Buyer's existing product liability  insurance policy, to the
extent of Product  Liability  claims  arising  out of or related to  occurrences
after the Closing Date in connection  with products  designed,  manufactured  or
sold by the Seller on or prior to the Closing  Date,  under  insurance  policies
maintained by the Buyer which provide  coverage for Product  Liability claims in
the aggregate annual coverage of $1,000,000,  providing coverage for claims made
during  the  period  beginning  on the  Closing  Date and  ending  on the  third
anniversary of the Closing Date. The Buyer shall obtain insurance policies which
provide  for such  coverage  in an amount  and with such  terms as are usual and
customary for companies of the Buyer's size in the automotive supplier industry.

         5.12     The Buyer's Obligation with Respect to the Seller's Employees.

                  (a) Schedule 5.12 lists all  employees of the Business,  their
current employment compensation (including bonus, if any), accrued vacation, and
other  amounts,  if any,  payable  to each  employee.  Immediately  prior to the
Closing,  Seller will  terminate all employees of the Business (the  "Terminated
Employees")  and Buyer will hire such employees of the Business as it determines


                                       14
<PAGE>

in its sole  discretion,  provided  that within ninety days of the Closing Date,
the  Buyer  shall  not cause an  employment  loss,  as  defined  in the  Workers
Adjustment  and  Retaining  Notification  Act, as amended (the "WARN  Act"),  in
sufficient  numbers  such  that  the  notice  requirement  of  the  WARN  Act is
applicable. The Parties agree to cooperate in jointly notifying the employees of
the Business of the  termination  of their  employment by the Seller and,  where
applicable,  the  offer of  employment  by the  Buyer.  All  liabilities  of the
Business relating to Terminated Employees,  including all compensation and other
benefits due to the  Terminated  Employees at the time of  termination,  will be
retained  by the  Seller,  except  as set  forth in (b)  below  and  except  for
liabilities to the employees of the Business hired by the Buyer set forth in the
Assumed Contracts, including, but not limited to, a certain Management Change in
Control Agreement, dated as of December 1, 1998, with Raymond Peters.

                  (b) In addition,  the Parties agree as follows with respect to
employee  benefit matters relating to the employees of the Business hired by the
Buyer:

                           (i)      Buyer's Benefit  Programs.    All of Buyer's
employee benefit plans,  programs and arrangements in which the employees of the
Business hired by the Buyer become eligible to participate  shall, to the extent
permitted by law,  credit such employees  with a period of service  beginning on
their original hire date with the Seller for purposes of  eligibility,  vesting,
and any other purpose required by law.

                           (ii)     Health  Insurance.  The Buyer's group health
plan (the  "Buyer's  Health Plan") shall not contain any exclusion or limitation
with respect to any pre-existing condition of any employee of the Business hired
by the Buyer or their dependents.  In addition,  with respect to any employee of
the  Business  hired by the  Buyer  (or the  dependent  of any  employee  of the
Business) with an ongoing  medical  condition first arising prior to Closing for
which treatment shall continue after the Closing,  the Buyer's Health Plan shall
bear the  expense  of such  treatment  to the extent  occurring  on or after the
Closing Date. Any amount paid by employees of the Business hired by the Buyer or
their dependents for the current plan year for medical expenses that are treated
as a deductible or co-insurance payment under the Seller's health insurance plan
shall reduce the amount of any deductible or co-insurance payment required to be
paid for a similar  period  under the  Buyer's  Health  Plan.  Buyer will not be
responsible  for any salaried or hourly  health and life  insurance  obligations
incurred prior to the Closing for any Terminated  Employees,  nor for payment of
claims to insureds, or payment of any premiums for coverage prior to the Closing
Date.

                           (iii) Vacation.  The vacation  program adopted by the
Buyer for the employees of the Business hired by the Buyer shall  recognize past
employment  with the Seller for purposes of  computing  vacation  benefits.  The
Buyer shall assume and be  responsible  for, and shall give full credit for, all
vacation  benefits of employees of the Business  hired by the Buyer  accrued but
not taken as of the Closing  Date.  The Seller shall have no  responsibility  or
liability  for any vacation  benefits of employees of the Business  hired by the
Buyer on or after the Closing Date, including vacation benefits accrued prior to
the Closing Date.



                                       15
<PAGE>

         (c) The Seller shall comply with all provisions of Sections 601 through
608 of ERISA,  relating to "COBRA" continuation  coverage,  to be provided under
the Seller's group health plans to employees of the Business.


                                   ARTICLE VI

                              CONDITIONS TO CLOSING

         6.1  Conditions to  Obligations  of the Buyer.  The  obligations of the
Buyer and Parent to consummate the  transactions  contemplated by this Agreement
are subject,  at the discretion of the Buyer and Parent,  to the satisfaction at
or prior to the Closing of each of the following conditions.

                  (a)   Representations   and   Warranties;    Covenants.    The
representations  and warranties of the Seller  contained in this Agreement shall
be true and correct in all material respects at and as of the Closing as if such
representations  and warranties  were made at the Closing,  and the Seller shall
have performed in all material respects all agreements and covenants required by
this Agreement to be performed by it prior to or at the Closing Date;  provided,
however,  that a breach of any representation or warranty shall not constitute a
failure of the condition contained in this section if such breach,  either alone
or in conjunction with all other breaches,  has not had and would not reasonably
be expected to have a Material  Adverse Effect.  On the Closing Date, the Seller
shall deliver to the Buyer a  certificate  signed by an officer of the Seller to
the foregoing effect.

                  (b) Consents.  The Seller shall have obtained all consents and
approvals  specified  on Schedule  5.2 as required to have been  obtained by the
Seller,  other than the consent of  DaimlerChrysler  Corporation  referred to in
Schedule 5.2.

                  (c) Assignment. The Buyer shall have received the Bill of Sale
executed by the Seller.

                  (d) Absence of Litigation. No action, suit or proceeding shall
have been instituted or threatened seeking to enjoin or restrain, or which would
have a  Material  Adverse  Effect  on,  the  transactions  contemplated  by this
Agreement,  including any order, injunction,  decree or judgment of any court or
governmental authority.

                  (e)  Execution  of  Cicotte  License   Agreement.   A  License
Agreement directed to Pedal Systems between the Buyer and Edmond B. Cicotte must
be executed prior to or contemporaneous with execution of this Agreement.

         6.2  Conditions to Obligations  of the Seller.  The  obligations of the
Seller  to  consummate  the  transactions  contemplated  by this  Agreement  are
subject, in the discretion of the Seller, to the satisfaction at or prior to the
Closing Date of each of the following conditions.



                                       16
<PAGE>

                  (a)   Representations   and   Warranties;    Covenants.    All
representations and warranties of the Buyer contained in this Agreement shall be
true and  correct in all  material  respects at and as of the Closing as if such
representations and warranties were made at and as of the Closing, and the Buyer
shall have  performed in all  material  respects all  agreements  and  covenants
required  by this  Agreement  to be  performed  by it prior to or at the Closing
Date; provided,  however,  that a breach of any representation or warranty shall
not  constitute  a failure of the  condition  contained  in this section if such
breach, either alone or in conjunction with all other breaches,  has not had and
would not reasonably be expected to have a material adverse effect on the Buyer.
On the Closing Date, the Buyer shall deliver to the Seller a certificate  signed
by an officer of the Buyer to the foregoing effect.

                  (b) Assumption  Agreement and Guaranty  Agreement.  The Seller
shall have  received  the  Assumption  Agreement  executed  by the Buyer and the
Guaranty Agreement executed by the Parent.

                  (c) Absence of Litigation. No action, suit or proceeding shall
have been instituted or threatened seeking to enjoin or retrain,  or which would
have a  Material  Adverse  Effect  on,  the  transactions  contemplated  by this
Agreement,  including any order, injunction,  decree or judgment of any court or
governmental authority.

                  (d) Payment of Purchase Price.  The Buyer shall have agreed to
pay the Purchase Price.

                  (e) Consents.  The Buyer shall have  obtained all consents and
approvals  specified  on Schedule  5.2 as required to have been  obtained by the
Buyer.

                  (f) Execution of Cicotte Termination  Agreement. A Termination
Agreement  in the form  attached  hereto  as  Schedule  6.2(f)  terminating  the
agreement  of November 1, 1993  between the Buyer and Edmond B.  Cicotte must be
executed prior to or contemporaneous with execution of this Agreement.


                                   ARTICLE VII

                                 INDEMNIFICATION

         7.1      Definitions. For purposes of this Article, the following terms
shall have the meanings set forth below.


                  "Agents" shall mean agents, contractors, representatives,  and
employees.

                  "Buyer Indemnified  Party" or the "Buyer Indemnified  Parties"
shall  mean the  Buyer and its  officers,  directors,  employees,  shareholders,
agents, and representatives.

                  "Loss"  shall  mean any  loss,  liability,  claim,  damage  or
expense (including reasonable legal fees and expenses).


                                       17
<PAGE>

                  "Seller Indemnified Party" or the "Seller Indemnified Parties"
shall mean the shareholders of the Seller as of the Closing Date.

                  "Third  Party  Claim" shall mean a claim or demand made by any
third person against an indemnified party for which  indemnification is required
to be made under Sections 7.2 or 7.3.

         7.2      Indemnification from the Seller

                  (a) Subject to the  limitations and  qualifications  set forth
below, the Seller shall indemnify the Buyer Indemnified Parties against and hold
them harmless  from any Loss suffered or incurred by any such Buyer  Indemnified
Party to the extent arising from:

                           (i)      the  non-fulfillment  by  the  Seller of any
agreement  or covenant of the Seller set forth in this  Agreement or the Bill of
Sale;

                           (ii)     any  inaccuracy  of  any  representation  or
warranty of the Seller set forth in this  Agreement  as of the  Closing  Date as
though  made as of such time,  except to the  extent  such  representations  and
warranties expressly refer to an earlier date;

provided,  however,  that, if the Closing occurs (1) there shall be no liability
under  this  Section  7.2 for any Loss  pursuant  to this  clause (a) unless the
aggregate  of all such  Losses,  but for this  proviso,  exceeds on a cumulative
basis an amount equal to $50,000,  following which the Buyer Indemnified Parties
shall be entitled to  indemnification  with  respect to such Losses in excess of
such amount, and (2) except as provided for in following sentence, the aggregate
liability of the Seller  under this  Section 7.2 for any and all Losses  (except
for any Loss  suffered as a result of the  non-fulfillment  by the Seller of its
obligations  under  Section  9.11)  shall  not under  any  circumstances  exceed
$250,000 (the "Cap").

                  (b) Prior to the  assertion of any claims for  indemnification
under this Section 7.2, the Buyer Indemnified Party shall utilize all reasonable
efforts,  consistent  with normal  practices  and policies  and good  commercial
practice  (and which shall in any event  include,  without  limitation,  seeking
recoveries under insurance policies), to mitigate such Losses. Recovery pursuant
to this Section 7.2 shall in no event include any special, indirect,  incidental
or consequential damages whatsoever, including, but not limited to lost profits,
damage to reputation, lost business opportunities, mental or emotional distress,
interference  with  business  operations  or  diminution  of  the  value  of the
property. No current or former director, officer, employee or shareholder of the
Seller shall have any  liability  to the Buyer  Indemnified  Parties  under this
Agreement or otherwise in connection with the transactions  contemplated by this
Agreement.

                  (c) The Buyer (i)  acknowledges  and agrees  that,  should the
Closing occur and except for any claims arising under Section 9.11, its sole and
exclusive  remedy with respect to any and all claims relating to this Agreement,
the transactions  contemplated by this Agreement,  the Seller,  and the Seller's
subsidiaries,   assets,   liabilities   and   businesses   shall  be  under  the
indemnification provisions set forth in this Article, and that such remedy shall
be exercised  solely by means of the exercise of their rights and remedies under
this  Article;  provided,  however,  that the Buyer's right to sue for equitable



                                       18
<PAGE>

relief shall not be limited by this subsection;  and (ii) waives, from and after
the Closing,  to the fullest extent  permitted under applicable law, any and all
rights,  claims and causes of action it may have arising under or based upon any
Federal, state, local or foreign statute, law, ordinance,  rule or regulation or
otherwise  (except  under  the  indemnification  provisions  set  forth  in this
Article).

                  (d) The Parties  acknowledges  and agree that if the Buyer has
knowledge  of an  inaccuracy  of any  representation  or  warranty of the Seller
contained in this  Agreement  and proceed  with the Closing,  the Buyer shall be
deemed to have waived and released any claim for any Loss related thereto and it
and its successors,  assigns and affiliates  shall not be entitled to assert any
such claim thereunder, notwithstanding anything to the contrary contained in, or
in any certificate delivered under, this Agreement.

         7.3      Indemnification from the Buyer.

                  (a) Subject to the  limitations and  qualifications  set forth
below, the Buyer shall indemnify the Seller Indemnified Parties against and hold
them harmless from any Loss suffered or incurred by any such Seller  Indemnified
Party to the extent arising from:

                           (i)      the  non-fulfillment  by  the  Buyer of  any
agreement  or covenant  of any of them under this  Agreement  or the  Assumption
Agreement; and

                           (ii)     any   inaccuracy  of any  representation  or
warranty of the Buyer  contained in this Agreement as of the time of the Closing
as though made as of such time,  except to the extent such  representations  and
warranties expressly refer to an earlier date.

                  (b) Prior to the  assertion of any claims for  indemnification
under  this  Section  7.3,  the  Seller  Indemnified  Party  shall  utilize  all
reasonable  efforts,  consistent  with normal  practices  and  policies and good
commercial  practice (and which shall in any event include,  without limitation,
seeking recoveries under insurance policies),  to mitigate such Losses. Recovery
pursuant to this Section 7.3 shall in no event  include any  special,  indirect,
incidental or consequential  damages whatsoever,  including,  but not limited to
lost  profits,  damage to  reputation,  lost business  opportunities,  mental or
emotional  distress,  interference with business operations or diminution of the
value of the  property.  No current or former  director,  officer,  employee  or
shareholder  of the Buyer  shall have any  liability  to the Seller  Indemnified
Parties in connection with the transactions contemplated by this Agreement.

                  (c) By accepting the Purchase  Price,  the Seller  Indemnified
Parties (i) acknowledge that, should the Closing occur, their sole and exclusive
remedy  with  respect  to any and all claims  relating  to this  Agreement,  the
transactions   contemplated  by  this  Agreement,  the  Buyer  and  the  Buyer's
subsidiaries,   assets,   liabilities   and   businesses   shall  be  under  the
indemnification  provisions set forth in this Article;  provided,  however, that
the  Seller's  right to sue for  equitable  relief  shall not be limited by this
subsection;  and (ii) waive,  from and after the Closing,  to the fullest extent




                                       19
<PAGE>

permitted under applicable law, any and all rights,  claims and causes of action
they may have arising under or based upon any Federal,  state,  local or foreign
statute,  law,  ordinance,  rule or  regulation  or otherwise  (except under the
indemnification provisions set forth in this Article).

         7.4      Calculation of Losses.

                  (a) The  amount  of any  Loss  for  which  indemnification  is
provided  under  this  Article  shall  be net of any  amounts  recovered  by the
indemnified  party under insurance  policies with respect to such Loss and shall
be (i) increased to take account of any net tax cost incurred by the indemnified
party arising from the receipt of indemnity  payments  hereunder (grossed up for
such increase), and (ii) reduced to take account of any net tax benefit realized
by the  indemnified  party  arising from the  incurrence  or payment of any such
Loss.

                  (b) The  indemnified  party shall use its best efforts to seek
recoveries under insurance  policies and, if a Seller  Indemnified  Party is the
indemnified  party,  shall  reimburse the Buyer for any Loss  indemnified  by it
which  is  subsequently  recovered  by the  indemnified  party  under  any  such
insurance.

                  (c) In  computing  the  amount  of any  such  tax  cost or tax
benefit,  the indemnified  party shall be deemed to recognize all other items of
income, gain, loss, deduction or credit before recognizing any item arising from
the receipt of any indemnity  payment  hereunder or the incurrence or payment of
any  indemnified  Loss.  The amount of such tax cost or tax  benefit  payable or
realizable in future tax periods shall be discounted to present value (utilizing
for this purpose a discount rate of 8%) for purposes of  determining  the amount
of increase or deduction.

         7.5      Termination of Indemnification.

                  (a) The  obligation  of the Seller to indemnify,  defend,  and
hold harmless a Buyer  Indemnified Party under Section 7.2(a) shall terminate at
5:00 p.m.  (Detroit time) on the first  anniversary of the Closing Date,  except
for an obligation  arising under Section 9.11 which shall terminate at 5:00 p.m.
(Detroit time) on the fifth anniversary of the Closing Date; provided,  however,
that  such  obligations  to  indemnify,  defend,  and hold  harmless  shall  not
terminate  with respect to any item as to which the person to be  indemnified or
the related party thereto shall have,  before the  expiration of the  applicable
period, previously made a claim by delivering a notice of such claim (stating in
reasonable detail the basis and amount of such claim) to the Seller.

                  (b) The obligation of the Buyer to indemnify, defend, and hold
harmless a Seller  Indemnified  Party under Section 7.3 shall  terminate at 5:00
p.m.  (Detroit  time) on the first  anniversary  of the Closing Date;  provided,
however, that such obligations to indemnify, defend, and hold harmless shall not
terminate  with respect to any item as to which the person to be  indemnified or
the related party thereto shall have,  before the  expiration of the  applicable
period, previously made a claim by delivering a notice of such claim (stating in
reasonable   detail  the  basis  and  amount  of  such   claim)  to  the  Buyer.
Notwithstanding the foregoing,  the Buyer's obligation to indemnify,  defend and
hold harmless a Seller  Indemnified  Party under Section 7.3 with respect to the
Assumed Liabilities shall not terminate.




                                       20
<PAGE>

         7.6      Procedures Relating to Indemnification for Third Party Claims.

                  (a) In order for a party to be entitled to any indemnification
provided for under this  Agreement in respect of,  arising out of or involving a
Third  Party  Claim,  such  indemnified  party must notify (i) the Seller if the
Third Party Claim is one for which the Seller must give indemnification, or (ii)
the  Buyer if the  Third  Party  Claim is one for  which  the  Buyer  must  give
indemnification,  in writing, and in reasonable detail, of the Third Party Claim
within ten days after receipt by such indemnified party of written notice of the
Third Party Claim;  provided,  however,  that failure to give such  notification
shall not affect the indemnification provided under this Agreement except to the
extent  that the  ability  to  defend  such  claim or  demand  shall  have  been
prejudiced as a result of such failure (except that party making indemnification
shall not be liable for any  expenses  incurred  during the period  prior to the
giving of such notice by the  indemnified  party if notice is not timely given).
Thereafter,  the indemnified  party shall deliver to the Seller or the Buyer, as
applicable,  within  ten days after the  indemnified  party's  receipt  thereof,
copies of all notices and documents  (including  court  papers)  received by the
indemnified party relating to the Third Party Claim.


                  (b) If a Third Party Claim is made against a Buyer Indemnified
Party,  the Seller shall be entitled to participate in the defense  thereof and,
if it so  chooses,  to assume the defense or  settlement  thereof  with  counsel
selected  by the  Seller.  If a Third  Party  Claim  is made  against  a  Seller
Indemnified  Party,  the Buyer shall be entitled to  participate  in the defense
thereof  and,  if it so  chooses,  to assume the defense  thereof  with  counsel
selected  by the Buyer.  Should the Seller or the Buyer,  as the case may be, so
elect to assume  the  defense  of the Third  Party  Claim,  except as  otherwise
provided below,  the Seller shall not be liable to the Buyer  Indemnified  Party
for  legal  expenses  subsequently  incurred  by a Buyer  Indemnified  Party  in
connection  with the  defense  thereof  and the  Buyer  shall not be liable to a
Seller Indemnified Party for legal expenses  subsequently incurred by the Seller
Indemnified Party in connection with the defense or settlement  thereof.  If the
Seller or the Buyer, as the case may be, assumes such defense or settlement, the
indemnified party shall have the right to participate in the defense thereof and
to  employ  counsel  (not  reasonably  objected  to by the  party  assuming  the
defense), which shall be at its own expense,  separate from the counsel employed
by the party assuming the defense,  it being  understood that the party assuming
the defense  shall  control such  defense.  In the event the Seller or the Buyer
fails to assume the  defense of a Third  Party  Claim  within  thirty days after
receipt of the notice  referred to in Section  7.6(a) for which the  indemnified
parties are entitled to be indemnified as provided above, the indemnified  party
may defend the Third Party Claim consistent with its obligations  hereunder,  at
the  expense  and for the  account of (i) the Seller if the Third Party Claim is
one for which the  Seller  must  give  indemnification  or (ii) the Buyer if the
Third  Party  Claim is one for which the Buyer  must give  indemnification,  and
shall keep the party required to make  indemnification  fully informed regarding
the progress and status thereof, and, under the circumstances  described in this
sentence,  shall not  settle,  compromise  or  discharge  such Third Party Claim
without the consent of such party.

                  (c) If the Seller or the Buyer,  as the case may be, elects to
assume the defense of any Third Party Claim:



                                       21
<PAGE>

                           (i)      all of  the applicable  indemnified  parties
shall cooperate with the party assuming the defense in the defense thereof. Such
cooperation shall include the retention and the provision, to the party assuming
the defense,  of records and information  which are reasonably  relevant to such
Third Party Claim and making employees  available on a mutually convenient basis
to provide  additional  information  and  explanation  of any material  provided
hereunder;

                           (ii) the party  assuming  the defense  shall keep the
applicable indemnified parties fully informed
regarding the progress and status thereof;

                           (iii)  the  indemnified  parties  shall not admit any
liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the prior written consent of the party
assuming the defense (which consent shall not be unreasonably withheld);

                           (iv) the party assuming the defense shall not settle,
compromise or discharge such Third Party Claim
without the prior written consent of the indemnified parties if such settlement,
compromise  or discharge  requires any of the  indemnified  parties to cease any
activity or to take any action (other than  entering  into an agreement  setting
forth the terms of such settlement, compromise or discharge); and

                           (v) the indemnified parties from whom the defense was
assumed shall reimburse the party assuming the
defense for all legal fees and expenses reasonably incurred in defending against
such claim if it is  subsequently  determined  that the Third  Party  Claim is a
claim for which indemnification is not required under Sections 7.2 or 7.3.

                  (d)      All claims under Sections 7.2 or 7.3 other than Third
Party Claims shall be governed by Section 7.7.

         7.7      Other Claims.

                  (a) In the event any  indemnified  party  should  have a claim
under  Sections  7.2 or 7.3 that does not  involve  a Third  Party  Claim  being
asserted  against or sought to be collected  from such  indemnified  party,  the
indemnified  party shall deliver  written  notice of such claim with  reasonable
promptness and stating the nature and basis of the claim in reasonable detail to
(i)  the  Seller  if  the  claim  is  one  for  which  the   Seller   must  give
indemnification  or (ii) the Buyer if the claim is one for which the Buyer  must
give indemnification.

                  (b) The  failure  by any  indemnified  party so to notify  the
Seller or the Buyer,  as the case may be, shall not relieve any liability  under
Sections 7.2 or 7.3,  except to the extent that the ability to defend such claim
or demand shall have been prejudiced as a result of such failure.

                  (c) If the Seller or the Buyer,  as the case may be,  disputes
the liability with respect to such claim,  the Seller or the Buyer,  as the case
may be, and the  indemnified  party shall  proceed in good faith to  negotiate a
resolution  of such  dispute  and, if not resolved  through  negotiations,  such
dispute  shall be resolved by litigation  in an  appropriate  court of competent
jurisdiction.



                                       22
<PAGE>

         7.8 Adjustment to the Purchase Price. All indemnification payments made
under  this  Article  shall be treated by all  parties as an  adjustment  to the
Purchase Price.

         7.9 Express  Limitation on Liability of  Shareholders.  Notwithstanding
anything to the contrary in this Agreement,  the shareholders of the Seller have
no obligations or liabilities of any kind under this Agreement.

                                  ARTICLE VIII

                                   TERMINATION

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

                  (a)      by mutual consent of the Parties;

                  (b) by Buyer or  Seller  if the  Closing  Date  shall not have
occurred by July 29, 1999,  provided that the right to terminate  this Agreement
under this Section  8.1(b)  shall not be  available  to any party whose  willful
failure to fulfill any obligation  under this Agreement has been the cause of or
resulted  in the  failure of the  Closing to occur on or before the  Termination
Date;

                  (c) by Buyer or Seller if there has been a material  breach of
any  representation,  warranty,  covenant or  agreement on the part of the other
Party set forth in this  Agreement  which is not  curable  or, if  curable,  not
cured,  such that the conditions set forth in Section  6.1(a),  in the case of a
material breach by Seller,  and Section 6.2(a), in the case of a material breach
by Buyer, cannot be satisfied prior to the Termination Date; or

                  (d) by Buyer or Seller if a court of competent jurisdiction or
governmental,  regulatory  or  administrative  agency or  commission  shall have
issued an order,  decree  or  ruling  or taken  any other  action,  in each case
permanently  restraining,  enjoining or otherwise  prohibiting the  transactions
contemplated  by this Agreement and such order,  decree,  ruling or other action
shall have become final and nonappealable  (provided that the right to terminate
this Agreement under this Section 8.1(c) shall not be available to any party who
willfully has not complied with its  obligations  under this  Agreement and such
non-compliance  materially  contributed to the issuance of such order, decree or
ruling on the taking of such action).

         8.2  Effect  of  Termination.  In the  event  of  termination  of  this
Agreement  by any Party,  as provided  above,  this  Agreement  shall  terminate
immediately  and  there  shall be no  liability  on the part of any Party or its



                                       23
<PAGE>

officers or directors,  except for liabilities arising from a material breach by
a Party of any of its  covenants  or  agreements  set  forth in this  Agreement;
provided,  however, that the obligations of the Parties set forth in Section 9.9
shall survive such termination.

                                   ARTICLE IX

                                  MISCELLANEOUS

         9.1 Exhibits and Schedules.  All Exhibits and Schedules  referred to in
this  Agreement  are intended to be and hereby are  specifically  made a part of
this Agreement.

         9.2  Amendment.  This Agreement and the Schedules to this Agreement may
not be  amended  except by an  instrument  in  writing  signed on behalf of each
Party.

         9.3  Extension;  Waiver.  At any time prior to the  Closing  Date,  the
Parties may (a) extend the time for the performance of any of the obligations or
other acts of the other Party, (b) waive any inaccuracies in the representations
and warranties of the other Party contained in this Agreement or in any document
delivered  pursuant to this  Agreement,  and (c) waive  compliance  by the other
Party with any of the agreements or conditions contained in this Agreement.  Any
agreement on the part of a Party to any such  extension or waiver shall be valid
if set forth in an instrument in writing signed on behalf of such Party.

         9.4  Entire Agreement; No Third Party Beneficiaries; Permitted Assigns.

                  (a) This  Agreement,  together  with the  Schedules  and other
agreements  referred  to in this  Agreement  constitutes  the  entire  Agreement
between  the Parties  pertaining  to the subject  matter of this  Agreement  and
supersedes   all   prior   and   contemporaneous   agreements,   understandings,
negotiations and discussions,  whether oral or written, of the Parties regarding
such subject matter.

                  (b) This  Agreement,  together  with the  Schedules  and other
agreements  referred to in this Agreement is for the sole benefit of the Parties
and their permitted assigns and nothing in this Agreement, expressed or implied,
shall  give or be  construed  to give to any  person or  entity,  other than the
Parties and such assigns,  any legal or equitable  rights under this  Agreement.
Neither party may assign any of its rights or  obligations  under this Agreement
without the express written consent of the other party, except Seller may assign
its rights to receipt of the purchase price to Active AP, L.L.C.

         9.5  Governing Law; Venue.

                  (a)  This   Agreement   shall  be  governed   by,   construed,
interpreted,  and the rights of the Parties  determined in  accordance  with the
laws of the State of Michigan  (regardless  of the choice or  conflicts  of laws
principles of that jurisdiction).



                                       24
<PAGE>

                  (b)  Each  of  the   parties   irrevocably   submits   to  the
jurisdiction  of (a) the Macomb  County,  Michigan  Circuit  Court,  and (b) the
United  States  District  Court for the Eastern  District of  Michigan,  for the
purposes of any suit,  action or other proceeding  arising out of this Agreement
or any transaction  contemplated  hereby. Each of the parties agrees to commence
any action,  suit or  proceeding  relating  hereto  either in the United  States
District Court for the Eastern District of Michigan or, if such suit,  action or
other proceeding may not be brought in such court for jurisdictional reasons, in
the Macomb County,  Michigan  Circuit Court.  Each of the parties further agrees
that service of any process, summons, notice or document by U.S. registered mail
to such party's respective address set forth above shall be effective service of
process for any action,  suit or  proceeding  in  Michigan  with  respect to any
matters to which it has submitted to  jurisdiction  in this Section 9.5. Each of
the parties irrevocably and  unconditionally  waives any objection to the laying
of venue of any action,  suit or proceeding arising out of this Agreement or the
transactions  contemplated  hereby in (i) the Macomb  County,  Michigan  Circuit
Court,  and (ii) the United States  District  Court for the Eastern  District of
Michigan,  and hereby further irrevocably and unconditionally  waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.

         9.6  Certain Definitions.  For purposes of this Agreement:

         "Lien" shall mean any pledge, lien (including,  but not limited to, any
tax lien),  security  interest,  mortgage,  option or  restriction  on  transfer
(including, but not limited to, any buy-sell agreement or right of first refusal
or offer).

       "Material  Adverse Effect" shall mean a loss,  expense or cost which is
materially adverse to the Acquired Assets or the business,  financial  condition
or results of operations of the Business taken as a whole.

         "Person"  or  "person"  shall mean an  individual  or any  corporation,
partnership,  joint venture,  association,  limited  liability  company,  trust,
unincorporated   organization,   or  other  legal  entity  or  a  government  or
governmental entity.

         "To the  knowledge," or "known," and words of similar import shall mean
the actual  knowledge of a person without  independent  investigation  and, with
respect to the Seller, shall mean such knowledge of Fred Schoen, Glenn Miller or
Raymond Peters.

         9.7 Notices.  All notices and other communications under this Agreement
shall be in writing and shall be deemed given if delivered  personally or mailed
by registered or certified mail, postage prepaid, return receipt requested (such
mailed  notice to be  effective  on the date such  receipt is  acknowledged)  as
follows:



                                       25
<PAGE>

         If to the Buyer, addressed to:

                  ProActive Acquisition Corporation
                  14100 S.W. 72nd Avenue
                  Portland, OR  97224
                  Attention:  Gerard H. Herlihy, Chief Financial Officer

         with a copy to:

                  John W. Kellogg, Esq.
                  Friedlob Sanderson Raskin, Paulson & Tourtillott, LLC
                  1400 Glenarm Place, Third Floor
                  Denver, Colorado  80202
                  (303) 571-1400

         If to the Parent, addressed to:

                  Williams Controls, Inc.
                  14100 S.W. 72nd Avenue
                  Portland, OR  97224
                  Attention:  Gerard H. Herlihy, Chief Financial Officer

         With a copy to:

                  John W. Kellogg, Esq.
                  Friedlob Sanderson Raskin, Paulson & Tourtillott, LLC
                  1400 Glenarm Place, Third Floor
                  Denver, Colorado  80202

         If to the Seller, addressed to:

                  Active Tool & Manufacturing Co., Inc.
                  Engineering Centre
                  20600 E. Fourteen Mile Road
                  Roseville, Michigan  48066
                  Attn:  President

         With a copy to:

                  Dykema Gossett PLLC
                  400 Renaissance Center
                  Detroit, Michigan 48243-1668
                  Attn:    Thomas S. Vaughn, Esq.

or to such other place and with such other copies as either Party may  designate
as to itself by written notice to the others.


                                       26
<PAGE>

         9.8  Counterparts;  Headings.  This Agreement may be executed in one or
more counterparts,  each of which shall be deemed an original,  but all of which
together  shall  constitute  one and the same  instrument.  The  headings of the
several  Articles and Sections in this Agreement are inserted for convenience of
reference  only and are not  intended  to be part of or to affect the meaning or
interpretation of this Agreement.

         9.9 Expenses.  Regardless of whether the  transactions  contemplated by
this Agreement are consummated,  each Party shall pay its or their own costs and
expenses, including investment banking, legal, accounting, consulting, and other
professional  fees,  incurred in connection with the  negotiation,  preparation,
investigation,  and  performance  by  such  Party  of  this  Agreement  and  the
transactions contemplated under this Agreement.

         9.10 Successors and Assigns. This Agreement,  and all rights and powers
granted by this  Agreement,  shall bind and inure to the  benefit of the Parties
and their respective successors and assigns.

         9.11  Confidentiality.  For a period of five  years  from and after the
Closing Date,  the Seller shall use the same degree of care,  but no less than a
reasonable  degree  of care,  to  prevent  the  disclosure  of the  Intellectual
Property (collectively  "Confidential  Information") to any party, including any
affiliate of





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<PAGE>


Seller, unless such affiliate agrees in writing to be bound by the provisions of
this  Section 9.11 and such  agreement  is provided to Buyer,  and shall not use
said Confidential  Information for any purpose without the prior written consent
of the Buyer,  which  consent  the Buyer may  withhold  in its sole  discretion,
except  as  otherwise  required  by  this  Agreement.   The  term  "Confidential
Information" does not include any information: (a) which is in the public domain
or hereafter  comes into the public  domain  through no fault of Seller;  (b) is
lawfully  received by the Seller from a third party having the right to disclose
such information; (c) is independently developed by the Seller without breach of
this  Section  9.11;  or (d)  after  notifying  the Buyer  pursuant  to the next
sentence,  the  disclosure  of which is  required by order or  requirement  of a
court,  administrative  agency or other governmental body. If Seller becomes (or
if it is  reasonably  likely that Seller  shall  become)  legally  compelled  to
disclose any  Confidential  Information,  immediate notice of such fact shall be
given to the Buyer so that any appropriate action may be taken by the Buyer.

         The Parties have executed this Asset Purchase  Agreement as of the date
first above written.

                                                     PROACTIVE ACQUISITION CORP.

                                                     By:________________________

                                                     Name:______________________

                                                     Title:_____________________


                                                     WILLIAMS  CONTROLS,  INC.,
                                                     SOLELY   WITH   RESPECT  TO
                                                     SECTIONS  1.1,  1.5, 2.2(b)
                                                     AND 2.2(c)

                                                     By:________________________

                                                     Name:______________________

                                                     Title:_____________________


                                                     ACTIVE TOOL & MANUFACTURING
                                                     CO., INC.

                                                     By:________________________

                                                     Name:______________________



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