DATED             July 29            1997
                 -----------------------------------------


        (1)  LUCAS LIMITED

        (2)  LUCAS AUTOMATION & CONTROL ENGINEERING INC.

        (3)  LUCAS AUTOMATION AND CONTROL ENGINEERING GmbH

        (4)  LUCAS INDUSTRIES plc

        (5)  LUCAS AUTOMATION & CONTROL ENGINEERING LIMITED

        (6)  ASSEMBLY TECHNOLOGY & TEST LIMITED

        (7)  ASSEMBLY TECHNOLOGY & TEST, INC.

        (8)  ASSEMBLY TECHNOLOGIE & AUTOMATION GmbH

        (9)  DT INDUSTRIES, INC.






                     U M B R E L L A  A G R E E M E N T

                    relating to the Sale and Purchase of
                  Assets of Lucas Assembly & Test Systems
      in the United Kingdom, Germany and the United States of America






Eversheds
10 Newhall Street
Birmingham
B3 3LX
Tel: 0121 233 2001
Fax: 0121 236 1583
BIRCORP 53013


<PAGE>

                                  CONTENTS



1.        Definitions
2.        Sale and Purchase of the Activities
3.        Consideration
4.        Completion
5.        Warranties
6.        Purchaser Assurances and Warranties
7.        Interest
8.        Waiver
9.        Notices
10.       Costs
11.       Entire Agreement
12.       Survival of Certain Provisions
13.       Governing Law
14.       Announcements
15.       Counterparts
16.       Termination
17.       Assignment
18-22.    Guarantee
23.       No Third Party Beneficiary
24.       EC Notification
 

<PAGE>


SCHEDULE 1            Details of the Vendors and the Purchasers
SCHEDULE 2            Accounting Principles
SCHEDULE 3   PART 1   Pro-forma draft Completion Statements and Aggregation
                      Statement
             PART 2   Allocation of purchase price
SCHEDULE 4            Warranties of Vendors
SCHEDULE 5            Warranties of Purchaser and Guarantor
SCHEDULE 6            Intellectual Property Agreements
SCHEDULE 7            Third Party Consents



<PAGE>

THIS AGREEMENT is made on July 29, 1997

BETWEEN

(1)  THE VENDORS Those companies whose names and registered  offices are set out
     in Part 1 of Schedule 1

(2)  LUCAS  INDUSTRIES  plc  whose  registered  office  is  at  Stratford  Road,
     Solihull, West Midlands

(3)  LUCAS AUTOMATION & CONTROL  ENGINEERING  LIMITED whose registered office is
     at Stratford Road, Solihull, West Midlands

(4)  THE  PURCHASERS  Those  companies  whose names and addresses are set out in
     Part 2 of Schedule 1

(5)  THE GUARANTOR DT Industries, Inc. of Corporate  Centre,  Suite 2-300,  1949
     East Sunshine, Springfield, MO 65804

RECITALS

(A)  The Vendors carry on respectively  the English Activity the German Activity
     and the U S Activity (as each such expression is defined below)

(B)  The Vendors have respectively agreed to sell each of the Activities and the
     Assets  comprised in each such Activity to the  Purchasers on the terms and
     conditions  hereinafter  appearing  and on the  terms of  respectively  the
     English  Sale  Agreement,  the  German  Sale  Agreement  and  the  US  Sale
     Agreement.

(C)  Lucas  Industries  plc has entered into the English Sale  Agreement for the
     purposes   of  selling  the  English   Property   and  certain   registered
     Intellectual  Property and Lucas Automation & Control  Engineering  Limited
     has entered  into the English  Sale  Agreement  for the purposes of selling
     certain registered Intellectual Property

(D)  In  consideration  of the Vendors  entering into this Agreement in order to
     sell the  Activities  and Assets to the Purchasers the Guarantor has agreed
     to guarantee


                                       1
<PAGE>

     performance by the Purchasers of their obligations hereunder and under each
     of the Transaction Documents in the manner hereinafter appearing.

NOW THIS AGREEMENT WITNESSES as follows:-

1.   DEFINITIONS

     In this  Agreement  (which  expression  shall  include the  Recitals of and
     Schedules to this  Agreement)  except where  inconsistent  with the subject
     matter or context:-

     1.1  The following words and expressions shall bear the following  meanings
          respectively:-

          "the Accounting Date"         31st January 1997

          "the Accounting Principles"   The  accounting  principles set out
                                        in Schedule 2

          "the Activities"              The  English  Activity,  the German
                                        Activity and the US Activity  taken
                                        together

          "the Amounts Recoverable on   The    Amounts    Recoverable    on
           Contracts"                   Contracts  (as  defined  in each of
                                        the Sale Agreements) before:-

                                        (i)  making  the  Project   Hedging
                                             Provision; and

                                        (ii) deducting      the     Project
                                             Prepayments

           "the Assets"                 The Assets the  subject of the Sale
                                        Agreements (and as defined therein)
                                        taken together



                                       2
<PAGE>

           "Business Day"               Any day  (other  than  Saturday  or
                                        Sunday)  on which  banks  which are
                                        members of CHAPS  Clearing  Company
                                        Limited  are open for a full  range
                                        of banking transactions

           "Business Unit"              Any part of a member  of the  Lucas
                                        Group or the  activities  of such a
                                        member in either case in respect of
                                        which separate  management accounts
                                        have  customarily  been prepared by
                                        the  Lucas  Group  or the  relevant
                                        member

           "CERCLA"                     The   Comprehensive   Environmental
                                        Response,      Compensation     and
                                        Liability Act of  1980,  42  U.S.C.
                                        9601, et seq

           "Completion"                 Completion of the sale and purchase
                                        hereby  agreed and agreed  pursuant
                                        to   the   Sale    Agreements    in
                                        accordance  with  clause 4 and "the
                                        Completion Date" shall be construed
                                        as the  opening of  business on the
                                        date  on  which   completion  takes
                                        place.    References    herein   to
                                        Completion  shall be  construed  as
                                        references  to Closing  (as defined
                                        in the US Sale  Agreement) and "the
                                        Closing


                                       3
<PAGE>

                                        Date"  shall  be  construed  in the
                                        same manner as the Completion Date

            "the Consideration"         The  aggregate  of the Fixed  Price
                                        Element and the Net Current  Assets
                                        Value

            "the Contracts"             The  Contracts  (as defined in each
                                        of the Sale Agreements) relating to
                                        the   Activities    sold   to   the
                                        Purchasers  pursuant  to  the  Sale
                                        Agreements

            "the Creditors"             The  Creditors  (as defined in each
                                        of the English Sale  Agreement  and
                                        German  Sale   Agreement)  and  the
                                        Payables (as defined in the US Sale
                                        Agreement)    relating    to    the
                                        Activities  and  which  are  to  be
                                        assumed by the Purchasers  pursuant
                                        to the Sale Agreements

            "the Debtors"               The  Debtors (as defined in each of
                                        the English Sale  Agreement and the
                                        German  Sale   Agreement)  and  the
                                        Receivables  (as  defined in the US
                                        Sale  Agreement)  relating  to  the
                                        Activities  sold to the  Purchasers
                                        pursuant to the Sale Agreements

             "the Disclosure Letter"    The  letter of even  date  herewith
                                        written  by  Lucas  Limited  to the


                                       4
<PAGE>

                                        Guarantor and the Purchasers in the
                                        Agreed  Terms  (which shall for the
                                        avoidance  of  doubt   include  the
                                        documents disclosed by that letter)

              "Effective Completion"    Completion    of   all   the   Sale
                                        Agreements in accordance the clause
                                        4.5

              "the English Activity"    The  Activity  (as  defined  in the
                                        English Sale Agreement)

              "English Sale Agreement"  An agreement of even date  herewith
                                        made between the English Vendor (1)
                                        the  English  Purchaser  (2)  Lucas
                                        Industries   plc  (3)   and   Lucas
                                        Automation  &  Control  Engineering
                                        Limited  (4)  relating  to the sale
                                        and   purchase   of   the   English
                                        Activity in the Agreed Terms

               "the English Assets"     The  Assets  the   subject  of  the
                                        English  Sale   Agreement  (and  as
                                        defined therein)

               "the English             The     Registered     Intellectual
                Intellectual Property"  Property,      the     Unregistered
                                        Intellectual   Property   and   the
                                        KnowHow  the subject of the English
                                        Sale  Agreement  (and as each  such
                                        expression is defined therein)
               

                                  5
<PAGE>

               "ERISA"                  The  Employee   Retirement   Income
                                        Security Act of 1974, as amended

               "the English Plant       The Plant  Machinery  and Equipment
                Machinery and           the  subject  of the  English  Sale
                Equipment"              Agreement (and as defined therein)
   
               "the English Property"   The  Property  the  subject  of the
                                        English  Sale   Agreement  (and  as
                                        defined therein)

               "the English Purchaser"  Assembly Technology & Test Limited,
                                        registered number 3403962

               "the English             The   Transferring   Employees  the
                Transferring            subject  of the  English  Agreement
                Employees"              (and as defined therein)

               "the English Vendor"     Lucas  Limited,  registered  number
                                        872948

               "the  English            The warranties and  representations
                Warranties"             of the English Vendor relating only
                                        to the English  Activity  contained
                                        in Part B of Schedule 4


               "the Exchange Rates"     US $1.61 to (pound)1.00

                                        dm 2.46 to (pound)1.00

               "the Fixed Price         (Pound)12,050,000  being  allocated
                Element"                between  the  Property,  the  Plant
                                        Machinery   and   Equipment,    the
                                        Goodwill, the Intellectual


                                  6
<PAGE>

                                        Property,  the  Contracts  and  the
                                        other    Assets   which   are   not
                                        reflected in the Net Current Assets
                                        Value  as  set  out  in  Part  2 of
                                        Schedule 3

               "the General             The warranties and  representations
                Warranties"             of the English Vendor  contained in
                                        clause 5 and Part A of Schedule 4

               "the German Activity"    The  Activity  (as  defined  in the
                                        German Sale Agreement)

               "the German Assets"      The  Assets  the   subject  of  the
                                        German Sale  Agreement  (as defined
                                        therein)
         
               "the German              The    Unregistered    Intellectual
                Intellectual Property"  Property   and  the   Know-How  the
                                        subject   of   the   German    Sale
                                        Agreement   (and   as   each   such
                                        expression is defined there- in)

               "the German Plant        The Plant  Machinery  Machinery and
                Machinery and           Equipment the subject of the German
                Equipment"              Sale   Agreement  (and  as  defined
                                        therein)

               "the German Property"    The  Property  the  subject  of the
                                        German  Sale   Agreement   (and  as
                                        defined therein)


                                  7
<PAGE>

               "the German Purchaser"   Assembly  Technologie  & Automation
                                        GmbH of  Karl-Mand  Str. 2, D-56070
                                        Koblenz-Rheinhafen

               "the German Sale         An agreement of even date  herewith
                Agreement"              made between the German  Vendor (1)
                                        the German  Purchaser (2) and Lucas
                                        Industries  plc (3) relating to the
                                        sale  and  purchase  of the  German
                                        Activity in the Agreed Terms
    
               "the German              The   Transferring   Employees  the
                Transferring            subject   of   the   German    Sale
                Employees"              Agreement (and as defined therein)

               "the German Vendor"      Lucas    Automation   and   Control
                                        Engineering   GmbH,    registration
                                        number HRB 5258 with the Commercial
                                        Register  at the  County  Court  at
                                        Koblenz

               "the German Warranties"  The warranties and  representations
                                        of  the  English   Vendor  and  the
                                        German Vendor  relating only to the
                                        German Activity contained in Part D
                                        of Schedule 4
      
               "the  Goodwill"          The  goodwill  of  the  Vendors  in
                                        connection   with   each   of   the
                                        Activities    as    sold   to   the
                                        Purchasers  pursuant to each of the
                                        Sale


                                  8
<PAGE>

                                        Agreements

               "the Guarantee"          A guarantee  in the form set out in
                                        clause 18

               "the Guarantor"          DT  Industries,  Inc.,  a  Delaware
                                        Corporation,  of Corporate  Centre,
                                        Suite  2-300,  1949 East  Sunshine,
                                        Springfield, MO 65804

               "Holding Company"        Holding   company   as  defined  in
                                        Section  736 of the  Companies  Act
                                        1985

               "the Indemnities"        All indemnities given by any of the
                                        Vendors  under  this  Agreement  or
                                        under any of the Sale Agreements

               "the Independent         The firm of  chartered  accountants
                Accountant"             to whom any matter is submitted for
                                        final resolution in accordance with
                                        clause 3.7

               "Intellectual Property"  The English Intellectual  Property,
                                        the US  Intellectual  Property  and
                                        the German Intellectual Property
  
               "the Intellectual        The licences  briefly  described in
                Property Agreements"    Schedule 6 in the Agreed Terms

               "the Interim Payment"    The  amount  (if any) by which  the
                                        Proposed Consideration is less than
                                        the Provisional Consideration

                                     9
<PAGE>


               "the Leased Assets"      The Leased  Assets  the  subject of
                                        the Sale Agreements (and as defined
                                        therein) taken together

               "Lucas Aftermarket       Lucas  Limited  trading  as  "Lucas
                Operations"             Aftermarket Operations"

               "the LAO Agreement"      The  agreement  in the Agreed Terms
                                        between      Lucas      Aftermarket
                                        Operations    and    the    English
                                        Purchaser     relating    to    the
                                        relationship   which   will   exist
                                        between    those    parties   after
                                        Completion

               "the Lucas Group"        LucasVarity  and any company  which
                                        is a  Subsidiary  or  a  Subsidiary
                                        Undertaking of LucasVarity  for the
                                        time being and from time to time

               "LucasVarity"            LucasVarity plc,  registered number
                                        3207774

               "Net Current Assets      The  aggregate of the values of the
                Value"                  Debtors, the Prepayments, the Stock
                                        and  the  Amounts   Recoverable  on
                                        Contracts less the aggregate of the
                                        values   of  the   Creditors,   the
                                        Project Prepayments and the Project
                                        Hedging  Provision  (to the  extent
                                        they are not  already  deducted  in
                                        the    Amounts    Recoverable    on



                                    10
<PAGE>

                                        Contracts) at the Completion  Date,
                                        calculated in  accordance  with the
                                        Accounting Principles and agreed or
                                        ascertained   in  accordance   with
                                        clause  3 (save  in the case of the
                                        Project  Hedging   Provision  which
                                        shall be (pound)1,158,000)
  
               "the Plant, Machinery    The  English  Plant  Machinery  and
                and Equipment"          Equipment,  the  US  Machinery  and
                                        Equipment   and  the  German  Plant
                                        Machinery and Equipment

               "the Prepayments"        The Prepayments (as defined in each
                                        of the Sale Agreements) relating to
                                        the Activities

               "the Project Hedging     The sum of (pound)1,158,000
                Provision"              
  
               "the Project             The Project Prepayments (as defined
                Prepayments"            in  each  of the  Sale  Agreements)

               "the Property"           The English  Property,  the US Real
                                        Property  and the  German  Property
                                        taken together
 
               "the Proposed            The  amount   shown  as  being  the
                Consideration"          Consideration    in    the    draft
                                        Aggregation Statement served by the
                                        English  Vendor  pursuant to clause
                                        3.4


                                    11
<PAGE>

  
               "the  Provisional        The sum of (pound)30,000,000  being
                Consideration"          the aggregate of:-

                                        (1)  the Fixed Price Element; and

                                        (2)  (Pound)17,950,000  being   the
                                             estimated  Net Current  Assets
                                             Value

               "the Records"            The  Records  to be  passed  to the
                                        Purchasers  pursuant  to  the  Sale
                                        Agreements (and as defined therein)

               "Registered              The     Registered     Intellectual
                Intellectual Property"  Property (as defined in the English
                                        Sale  Agreement) and the Registered
                                        Intellectual  Property  (as defined
                                        in the US Sale Agreement)

               "the Sale Agreements"    The  English  Sale  Agreement,  the
                                        German  Sale  Agreement  and the US
                                        Sale Agreement taken together

               "the Stock"              The  Stock (as  defined  in each of
                                        the English Sale  Agreement and the
                                        German  Sale   Agreement)  and  the
                                        Inventory  (as  defined  in  the US
                                        Sale  Agreement)  relating  to  the
                                        Activities  sold to the  Purchasers
                                        pursuant to the Sale Agreements

               "Subsidiary"             A subsidiary  company as defined in
                                        Section 736 Companies Act 1985


                                    12
<PAGE>


               "Subsidiary              A subsidiary undertaking as defined
                Undertaking"            in Section 258 Companies Act 1985
                                       
               "the Transaction         This     Agreement,     the    Sale
                Documents"              Agreements,  the LAO Agreement, the
                                        Intellectual  Property  Agreements,
                                        all the  documents  referred  to in
                                        those  agreements as being executed
                                        or delivered  pursuant  thereto and
                                        any side letters or  agreements  of
                                        even date  herewith  between any of
                                        the parties to this Agreement

               "the Transferring        The English Transferring Employees,
                Employees"              the US  Transferring  Employees and
                                        the German Transferring Employees

               "the US Activity"        The  Business (as defined in the US
                                        Sale Agreement)
                            
               "the US Sale Agreement"  An agreement of even date  herewith
                                        made  between the US Vendor (1) the
                                        US   Purchaser    (2)   and   Lucas
                                        Industries  plc (3) relating to the
                                        sale   and   purchase   of  the  US
                                        Activity in the Agreed Terms

               "the US Assets"          The  Assets  the  subject of the US
                                        Sale   Agreement  (and  as  defined
                                        therein)


                                    13
<PAGE>

               "the US Intellectual     The     Registered     Intellectual
                Property"               Property,      the     Unregistered
                                        Intellectual   Property   and   the
                                        KnowHow  the subject of the US Sale
                                        Agreement  (and as each  expression
                                        is defined therein)

               "the US Leased           The  Leased   Real   Property   the
                Property"               subject  of the US  Sale  Agreement
                                        (and as defined therein)

                "the US Machinery and   The  Machinery  and  Equipment  the
                Equipment"              subject  of the US  Sale  Agreement
                                        (and as defined therein)

               "the US Purchaser"       Assembly  Technology & Test, Inc of
                                        Corporate Centre, Suite 2-300, 1949
                                        East Sunshine, Springfield, MO65804

               "the US Real Property"   The Real  Property  the  subject of
                                        the  US  Sale   Agreement  (and  as
                                        defined therein)

              "the US Purchaser's       Dickstein  Shapiro Morin & Oshinsky
               Solicitors"              LLP,    2101   L    Street,    N.W.
                                        Washington, DC 20037
 
               "the US Transferring     The   Transferring   Employees  the
                Employees"              subject  of the US  Sale  Agreement
                                        (and as defined therein)

               "the US Vendor"          Lucas    Automation    &    Control
                                        Engineering Inc. of 1000 Lucas Way,
                                        Hampton, Virginia


                                    14
<PAGE>

               "the US Warranties"      The warranties and  representations
                                        of the  English  Vendor  and the US
                                        Vendor  relating  only  to  the  US
                                        Activity  contained  in  Part  C of
                                        Schedule 4

               "the Vendors' UK         Eversheds  of  10  Newhall  Street,
                Solicitors"             Birmingham B3 3LX

               "the Warranties"         The General Warranties, the English
                                        Warranties,  the German  Warranties
                                        and   the   US   Warranties   taken
                                        together

     1.2       References  in  this  Agreement  to  statutes  or  any  statutory
               provision shall include any statutory modification,  re-enactment
               or extension thereof and any orders, regulations,  instruments or
               other  subordinate  legislation  made  thereunder in each case in
               force at the date of this Agreement.

     1.3       In this Agreement:-

               1.3.1     the  masculine  gender  shall  include the feminine and
                         neuter and the singular number shall include the plural
                         and vice versa;

               1.3.2     references to persons shall include  bodies  corporate,
                         unincorporated associations and partnerships;

               1.3.3     the expression  "the Vendors" shall be construed as any
                         one of the Vendors or all of them as the context  shall
                         permit;

               1.3.4     the expression "the  Purchasers"  shall be construed as
                         any one of the Purchasers or all of them as the context
                         shall permit; and

               1.3.5     the headings  contained  in this  document are inserted
                         for   convenience   only  and  shall  not   affect  its
                         construction.


                                       15
<PAGE>


     1.4       Whenever a document is referred to as being "in the Agreed Terms"
               it shall be in the form agreed and  initialled by or on behalf of
               the Vendors and the Purchasers.

     1.5       Except where the contrary is stated,  any  reference  herein to a
               clause  or  Schedule  or party is to a clause of or  Schedule  or
               party to this  Agreement  and any  reference  within a clause  or
               Schedule to a sub-clause,  paragraph or other  sub-division  is a
               reference to such sub-clause,  paragraph or other sub-division so
               numbered or lettered in that clause or  Schedule.  The  Schedules
               form part of this  Agreement  and shall  have the same  force and
               effect as if expressly set out in the body of this Agreement.

     1.6       The US  Warranties  shall be given  jointly and  severally by the
               English Vendor and the US Vendor and the German  Warranties shall
               be given  jointly and  severally  by the  English  Vendor and the
               German Vendor.

     1.7       Except where the context shall provide to the contrary  words and
               expressions  defined in the Sale  Agreements  shall have the same
               meaning in this Agreement.

2.   SALE AND PURCHASE OF THE ACTIVITIES AND EXCHANGE OF DOCUMENTS

     2.1       The  provisions  of  this  Agreement  and of  each  of  the  Sale
               Agreements shall apply relating to the sale of the Activities.

     2.2       On the date of this Agreement the Vendors,  Lucas Industries plc,
               Lucas Automation & Control  Engineering  Limited,  the Purchasers
               and the Guarantor  shall procure that each of the Sale Agreements
               is entered into and exchanged by the parties thereto.

3.   THE CONSIDERATION

     3.1       The purchase price for the Assets shall be the  Consideration and
               the  assumption  and  discharge by the  Purchasers of the Assumed
               Liabilities  (as defined in the Sale  Agreements)  in  accordance
               with the provisions of the


                                       16
<PAGE>

               Sale Agreements.  Each of the parties to this Agreement agrees to
               report this  transaction  for tax purposes in accordance with the
               provisions  of  Schedule 3 Part 2. The  purchase  price  shall be
               allocated for tax purposes in  accordance  with Schedule 3 Part 2
               and in a manner  consistent  with the respective laws of England,
               Germany and the United States.  If this requires an adjustment to
               the  allocation  made  in  Schedule  3 Part 2 the  parties  shall
               consult in good faith with a view to agreeing a re-allocation  of
               the purchase price, but this shall not in any circumstances alter
               the total  amount of the Fixed Price  Element and the Net Current
               Assets Value.

     3.2       On Completion the Purchasers shall pay to the Vendors in cash the
               Provisional Consideration.

     3.3       The following provisions shall apply regarding the calculation of
               the Net Current Assets Value, namely:-

               3.3.1     each  of  the  Vendors   shall  in  relation  to  their
                         respective  Activity and in conjunction  with the local
                         management of that Activity:-

                         3.3.1.1   have carried out a physical stock-take of the
                                   Stock on or during the week preceding 30 June
                                   1997; and

                         3.3.1.2   immediately  following Completion carry out a
                                   review of the  Stock,  Debtors,  Prepayments,
                                   Creditors,  Amounts  Recoverable on Contracts
                                   and Project Prepayments

                         for the purposes of ascertaining  the data to which the
                         Accounting  Principles  shall  be  applied  in order to
                         determine the Net Current Assets Value;

               3.3.2     the Purchaser will after  Completion  allow each of the
                         Vendors  full access to the  Property and the US Leased
                         Property, all


                                       17
<PAGE>

                         relevant employees and all relevant records information
                         and other  documentation to enable the Vendors to carry
                         out such  review  and to prepare  the draft  Completion
                         Statements and draft Aggregation  Statement defined and
                         referred to in clause 3.4.  In  particular  but without
                         limitation to the  foregoing  the Purchaser  will grant
                         and  procure  that there is granted to the  Vendors and
                         each of them  access  to and  the  services  of each of
                         Wayne  Schultz and Terry  Markwell  for all purposes of
                         this  clause  3,  including  without  limitation,   the
                         ascertainment  of the Net Current Assets Value pursuant
                         to clause 3.4;
                       
               3.3.3     the Net Current  Assets  Value shall be  determined  by
                         applying  the  Accounting  Principles  on the  basis of
                         practices and methods consistent with those used in the
                         preparation of the  management  accounts of the Vendors
                         relating to the  Activities  for the  financial  period
                         ended  on  the   Accounting   Date   and  the   project
                         contingencies    allowed   for   within   the   Amounts
                         Recoverable  on Contracts  shall be  calculated  on the
                         basis of practices  and methods  consistent  with those
                         used in the preparation of such management  accounts of
                         the Vendors  and shall be based on the project  reviews
                         conducted  by the Vendors in respect of the  Activities
                         during July 1997;

               3.3.4     without  prejudice to the Accounting  Principles  which
                         shall  apply to  determine  the amount of any  relevant
                         provision,  the draft Completion Statements,  the draft
                         Aggregation   Statement   and  the   Final   Completion
                         Statement  (as each  such  expression  is  defined  and
                         referred  to in clauses  3.4 and 3.8) shall not contain
                         any provision in respect of any liability of any of the
                         Activities  unless that  liability  is to be assumed by
                         the Purchasers  under this Agreement or any of the Sale
                         Agreements  and  shall not  attribute  any value to any
                         assets


                                       18
<PAGE>

                         which  are  excluded  from the  sale to the  Purchasers
                         under  the  terms  of  this   Agreement   or  the  Sale
                         Agreements; and

               3.3.5     for  the  avoidance  of any  doubt  there  shall  be no
                         project hedging provisions made in any draft Completion
                         Statement,  Aggregation  Statement or Final  Completion
                         Statement  in excess of the Project  Hedging  Provision
                         notwithstanding   any  previously   applied  accounting
                         policy or principle.

     3.4       Within 45 days following  Completion the Net Current Assets Value
               (determined in respect of each Activity)  shall be ascertained by
               the Vendors in  conjunction  with the local  management  for each
               Activity and the English  Vendor shall serve a written  statement
               ("the draft  Completion  Statement") on the Guarantor within such
               period showing in respect of each Activity the sums  attributable
               to the Creditors,  the Debtors,  the Prepayments,  the Stock, the
               Amounts Recoverable on Contracts and the Project Prepayments. The
               English  Vendor  shall also serve  within  such  period a further
               statement  ("the  draft  Aggregation  Statement")  containing  an
               aggregation  of each draft  Completion  Statement and the Project
               Hedging Provision (and accordingly the Net Current Assets Value),
               showing also the  Consideration  (excluding VAT or other like tax
               as contemplated by any of the Sale Agreements) and the sum due to
               or  from  the  Purchasers  having  regard  to the  amount  of the
               Provisional  Consideration paid by or on behalf of the Purchasers
               on Completion.  A proforma of the draft Completion  Statement for
               each of the Activities and of the draft Aggregation  Statement is
               set out for the purposes of illustration  only in Schedule 3 Part
               1. All sums in the draft Aggregation Statement shall be expressed
               in  (pound)sterling  and  any sums  expressed  in US  dollars  or
               Deutschmarks  in  the  draft   Completion   Statements  shall  be
               converted  into (pound)sterling  for this purpose at the Exchange
               Rates.

     3.5       Unless the Guarantor  shall notify both the Finance  Director and
               the Legal Director, Lucas Aftermarket Operations on behalf of the
               Vendors  within 30 days  after its  receipt of  whichever  is the
               latest to be served of the draft


                                       19
<PAGE>

               Completion Statements and the draft Aggregation Statement that it
               does not accept and agree with their respective contents then the
               Guarantor and the Purchasers shall be deemed to have accepted and
               agreed  with  the  contents  of  each  of  the  draft  Completion
               Statements and the draft  Aggregation  Statement for the purposes
               of this Agreement.

     3.6       If within the  aforesaid  period of 30 days the  Guarantor  shall
               notify both the Finance  Director and the Legal  Director,  Lucas
               Aftermarket  Operations  in  writing  that it does not accept and
               agree with the contents of the draft  Completion  Statements  and
               the  draft  Aggregation   Statement  for  the  purposes  of  this
               Agreement  then  the  Guarantor  and  the  English  Vendor  shall
               endeavour  to  reach  agreement  upon  adjustments  to the  draft
               Completion Statements and the draft Aggregation Statement to meet
               the  Guarantor's  objections.  For the avoidance of any doubt any
               matters  not  objected to in any notice  served  pursuant to this
               clause  3.6  shall be  deemed  agreed  by the  Guarantor  and the
               Purchasers.

     3.7       If the  English  Vendor  and the  Guarantor  are  unable to reach
               agreement as aforesaid within 21 days of the Guarantor giving the
               written  notification  contemplated  by clause 3.6 or within such
               later time as the English Vendor and the Guarantor may agree then
               all  matters  not so resolved  shall be  submitted  to Deloitte &
               Touche of Hill House,  1 Little New Street,  London EC4A 3TR (or,
               if  they   shall   decline   to  accept   the   appointment,   an
               internationally  recognised  firm of chartered  accountants to be
               agreed  upon by the  Guarantor  and  the  English  Vendor  or (in
               default  of  agreement  within  7  days)  to be  selected  at the
               instance of either of them by the President for the time being of
               the Institute of Chartered  Accountants in England and Wales) for
               final  resolution in accordance  solely and exclusively with this
               Agreement,  the Sale  Agreements and the  Accounting  Principles.
               Such  submission  shall be in the form of written  statements  of
               position by the Guarantor and the English  Vendor,  as well as an
               opportunity  to  respond  to  such  written  statements  and  any
               requests  for  statements  or  information  from the  Independent
               Accountant. The Guarantor, the Purchasers and the


                                       20
<PAGE>

               Vendors shall allow the Independent Accountant full access to all
               relevant  accounting  and other  records of the  Activities,  the
               Property, the US Leased Property and all relevant employees as it
               shall  require  for  the  purpose  of  giving  its  determination
               hereunder.  If the  Independent  Accountant  determines  that the
               resolution of a given disputed item requires an interpretation of
               law, then the  Independent  Accountant may request an independent
               law firm of national standing in England chosen by it to render a
               legal opinion as to such matter. The Independent Accountant shall
               act as an expert and not an  arbitrator  and shall be directed by
               the Guarantor and the English Vendor to make its determination as
               soon as possible  after the matter in dispute is submitted to it,
               and  such  determination  shall  be final  and  binding  upon the
               parties  hereto.  In giving  its  determination  the  Independent
               Accountant shall also adjust the draft Completion  Statements and
               draft  Aggregation  Statement if required to reflect the decision
               of the  Independent  Accountant.  The  cost of  such  Independent
               Accountant's  review  (including  reasonable  attorney's fees, if
               any) shall be borne by the party or parties as  determined by the
               Independent  Accountant.  The Guarantor and Purchasers  agree and
               acknowledge  that  notwithstanding  any  provisions of the German
               Civil Code to the contrary  (including in particular  but without
               any  limitation  section 315 thereof)  any  decision  made by the
               Independent  Accountant  under this clause 3.7 shall be final and
               binding and neither the Guarantor nor any of the Purchasers  will
               make any  application to the court as contemplated by section 315
               of the German Civil Code in respect thereof.

     3.8       For the  purposes of this  Agreement  the  expression  "the Final
               Completion Statement" shall mean:-

               3.8.1     the draft Aggregation Statement which the Guarantor and
                         the  Purchasers  are deemed to have accepted and agreed
                         pursuant  to clause  3.5 or with  which  the  Guarantor
                         indicates its acceptance and agreement on behalf of the
                         Purchasers  within  the 30 day  period  referred  to in
                         clause 3.5 whereupon (in


                                       21
<PAGE>

                         either event) the contents of the same shall become and
                         be final and binding on the Vendors and the  Purchasers
                         for the purposes of this Agreement; or

               3.8.2     the draft Aggregation  Statement bearing any adjustment
                         made  pursuant to clause 3.6, if clause 3.6 applies and
                         agreement is reached between the English Vendor and the
                         Guarantor  as  contemplated   therein,   whereupon  the
                         contents  of the same  shall  become  and be final  and
                         binding  on the  Vendors  and  the  Purchasers  for the
                         purposes of this Agreement; or

               3.8.3     the  draft  Aggregation   Statement,   as  adjusted  in
                         accordance  with the  determination  of the Independent
                         Accountant   pursuant  to  clause  3.7,  whereupon  the
                         contents  thereof shall become and be final and binding
                         upon the Vendors and the Purchasers for the purposes of
                         this Agreement.

     3.9       For the purposes of determining  the Net Current Assets Value and
               all  other  matters  contemplated  as  being  determined  in this
               Agreement  by  reference to the Final  Completion  Statement  the
               Final  Completion  Statement and the contents thereof shall (save
               in the case of  manifest  error)  be  final  and  binding  on the
               parties to this Agreement.

     3.10      The Guarantor, the Purchasers or the Vendors shall bear their own
               costs in  acting  in the  manner  contemplated  by this  clause 3
               (including,   without  limitation,  any  professional  costs  and
               expenses)  save as  contemplated  by  clause  3.7 if that  clause
               applies. It is agreed and declared that in any event no provision
               for  such  costs  shall  be  contained  in the  Final  Completion
               Statement.

     3.11      If the  Proposed  Consideration  is  less  than  the  Provisional
               Consideration,  the Vendors shall pay the Interim  Payment to the
               Purchasers  in cash  on the  same  day as  service  of the  draft
               Aggregation  Statement by the English  Vendor  pursuant to clause
               3.4 together with interest under clause 3.13.


                                       22
<PAGE>

     3.12      If the  aggregate of (a) the Fixed Price  Element and (b) the Net
               Current  Assets  Value in each  case  agreed  or  ascertained  in
               accordance with clause 3:-

               3.12.1    is   less   than   the   amount   of  the   Provisional
                         Consideration paid by or on behalf of the Purchasers on
                         Completion  (after  deducting the Interim  Payment) the
                         Vendors shall pay to the  Purchasers  the deficiency in
                         cash within 5 days of such  agreement or  ascertainment
                         together with interest under clause 3.13;

               3.12.2    is   more   than   the   amount   of  the   Provisional
                         Consideration paid by or on behalf of the Purchasers on
                         Completion  (after  deducting the Interim  Payment) the
                         Purchasers  shall pay to the Vendors the excess in cash
                         within  5  days  of  such  agreement  or  ascertainment
                         together with interest under clause 3.13.
   
     3.13      The Vendors shall pay to the Purchasers or the  Purchasers  shall
               pay to the Vendors  (as the case may be)  interest on any sum due
               under  clauses  3.11 and 3.12 at the rate per  annum  which is 1%
               above  Barclays  Bank plc's base  lending rate from time to time,
               such interest to accrue from day to day from the Completion  Date
               until the due date for payment in  accordance  with the foregoing
               provisions of this clause 3.

     3.14      The following provisions shall apply regarding the payments to be
               made:-

               3.14.1    all sums due from the  Purchasers  to the Vendors under
                         this Agreement  shall be paid in (pound)sterling to the
                         Vendors by way of telegraphic transfer to the following
                         account:-

                         Name:            Lucas Limited (Aftermarket Operations)
                         Bank:            Barclays Bank plc
                         Branch:          Newcastle Branch, PO BOX 17,
                                          Stoke on Trent ST3 1RN
                         Sort Code:       20-59-23
                         Account No:      10990876



                                       23
<PAGE>

                         or to such other  account as the Vendors may  hereafter
                         nominate in writing to the Purchasers; and

               3.14.2    all sums due from the Vendors to the  Purchasers  under
                         this Agreement  shall be paid in (pound)sterling to the
                         Purchasers  by  way  of  telegraphic  transfer  to  the
                         following account:-

                         Name:                 DT Industries, Inc.
                         Bank:                 Nations Bank
                         Branch:               800 Market Street, St. Louis, MO
                         Sort Code:            08-100-0032
                         Account No:           100101234095

                         or  to  such  other  account  as  the   Purchasers  may
                         hereafter nominate in writing to the Vendors.

     3.15      For the purposes of this clause 3 the Vendors hereby  irrevocably
               authorise  and appoint  Lucas  Limited to act on their behalf and
               the  Purchasers may for the purposes of this clause 3 assume that
               any act of or on  behalf of Lucas  Limited  is an act of and duly
               authorised by the Vendors.  All sums payable by or to the Vendors
               pursuant  to  clauses  3.2,  3.11 and 3.12 shall be paid by or to
               Lucas Limited on behalf of the Vendors and the  Purchasers  shall
               not be further  concerned as to the  application of any monies so
               paid.

     3.16      For  the  purposes  of  this  clause  3  the  Purchasers   hereby
               irrevocably  authorise  and appoint the Guarantor to act on their
               behalf and the  Vendors  may for the  purposes  of this  clause 3
               assume  that any act of or on behalf of the  Guarantor  is an act
               duly authorised by the Purchasers.  All sums payable by or to the
               Purchasers  pursuant to clauses 3.2,  3.11 and 3.12 shall be paid
               by or to the  Guarantor  on  behalf  of the  Purchasers  and  the
               Vendors shall not be further  concerned as to the  application of
               any monies so paid.

4.   COMPLETION

     4.1       Subject as hereinafter provided Completion shall not occur of any
               of the Sale Agreements  unless  completion  shall occur of all of
               them.


                                       24
<PAGE>

     4.2       Completion  of each of the  English  Sale  Agreement  and US Sale
               Agreement  shall  take  place in  accordance  with the  following
               provisions of this clause 4. The German Sale  Agreement  shall be
               deemed to be completed (for the purposes of this  Agreement) when
               the  conditions  precedent to which it is subject are  satisfied.
               Completion shall only become effective of all the Sale Agreements
               in  accordance  with  clause 4.5.  All  documents  exchanged  and
               delivered  pursuant to each of the English Sale  Agreement and US
               Sale Agreement and monies paid pursuant to this  Agreement  shall
               in each  case  be  held to the  order  of the  party  or  parties
               delivering the same and in escrow so that their terms do not come
               into force and effect until Effective Completion and all payments
               made  thereunder  and hereunder  will be held to the order of the
               party making the payment until Effective Completion.

     4.3       On exchange of this Agreement and the Sale Agreements the Vendors
               shall deliver to the Guarantor:-

               4.3.1     in respect of the English Activity:-

                         4.3.1.1   full  management  and  control of the English
                                   Activity;

                         4.3.1.2   all  transfers  assignments  and novations in
                                   respect  of the  Assets  the  subject  of the
                                   English Sale  Agreement in the form,  if any,
                                   set out in the  Schedules  thereto  or in the
                                   Agreed  Terms  (as the case may be) save that
                                   the  provisions  of clause 6.1 of the English
                                   Sale Agreement shall apply to Debtors;

                         4.3.1.3   all  property  agreed to be sold  pursuant to
                                   the English Sale  Agreement  which is capable
                                   of transfer by delivery  whereupon  the title
                                   thereto  shall pass to the  Purchaser by such
                                   delivery (subject to clause 13 of the English
                                   



                                       25
<PAGE>


                                   Sale  Agreement  and save for any Stock title
                                   to  which  is   reserved  in  favour  of  the
                                   supplier);

                         4.3.1.4   the Records  (as defined in the English  Sale
                                   Agreement);

                         4.3.1.5   the  deeds  and  documents  relating  to  the
                                   English Property and transfers or conveyances
                                   in the Agreed  Terms  relating to the English
                                   Property; and

                         4.3.1.6   a certified  copy of the Power of Attorney(s)
                                   authorising  execution of this  Agreement and
                                   the Sale Agreements on behalf of the Vendors,
                                   Lucas  Industries plc and Lucas  Automation &
                                   Control Engineering Limited;

               4.3.2     in respect of the US Activity:-

                         4.3.2.1   a copy  of the  executed  Corporate  Warranty
                                   Deed  conveying all the US Vendor's  interest
                                   in the US Real  Property to the US  Purchaser
                                   (the   original  of  which  shall  have  been
                                   delivered to the Title Insurer, as defined in
                                   the US Sale Agreement);

                         4.3.2.2   copies  of  the  documents   required  to  be
                                   delivered   to  the   Title   Insurer   under
                                   Schedule 3 of the US Sale Agreement;

                         4.3.2.3   the  Title   Policy  or  a  marked-up   Title
                                   Commitment   (as   defined  in  the  US  Sale
                                   Agreement);

                         4.3.2.4   executed assignments, in appropriate form for
                                   filing with applicable governmental agencies,
                                   

                                       26
<PAGE>


                                   of the Registered  Intellectual  Property (as
                                   defined in the US Sale Agreement);

                         4.3.2.5   executed Assignment and Assumption Agreements
                                   in respect of those  agreements  specified in
                                   Part 1 of Schedule 7,  together  with letters
                                   of  consent  from the other  parties  to such
                                   agreements  consenting to their assignment to
                                   the US Purchaser  and an executed  Assumption
                                   Agreement  relating to part of the  agreement
                                   with The Allen Group Inc  referred to in Part
                                   2 of Schedule 7;

                         4.3.2.6   executed  certificate of title respecting the
                                   motor vehicle included within the US  Assets;

                         4.3.2.7   executed   Bill   of  Sale   and   Assignment
                                   Agreement conveying good and marketable title
                                   to all Assets not  otherwise  transferred  or
                                   conveyed by the documents  delivered pursuant
                                   to clauses 4.3.2.1 to 4.3.2.6 inclusive;

                         4.3.2.8   executed  Assumption  Agreement in the Agreed
                                   Terms regarding the assumption of the Assumed
                                   Liabilities   (as  defined  in  the  US  Sale
                                   Agreement) by the US Purchaser;

                         4.3.2.9   a  certified  copy  of (i)  the  Articles  of
                                   Incorporation  of the US  Vendor as in effect
                                   on the date hereof (ii) the By laws of the US
                                   Vendor as in effect  on the date  hereof  and
                                   (iii) the resolutions adopted by the Board of
                                   Directors  and by the  shareholder  of the US
                                   

                                       27
<PAGE>


                                   Vendor  authorising  its execution,  delivery
                                   and  performance of this Agreement and the US
                                   Sale    Agreement   and    authorising    the
                                   consummation   by  the  US   Vendor   of  the
                                   transactions contemplated thereby;

                         4.3.2.10  the opinion of  Rudnick &  Wolfe,  counsel to
                                   the  US  Vendor,   dated  the  date   hereof,
                                   addressed to the Purchaser and  substantially
                                   to the effect that:

                                   (i)   the US  Vendor  is a  corporation  duly
                                         organised, validly existing and in good
                                         standing under the laws of the State of
                                         Virginia  and  is  duly   qualified  to
                                         transact    business   as   a   foreign
                                         corporation  in and is in good standing
                                         under   the   laws  of  the   State  of
                                         Michigan;

                                   (ii)  the  US   Vendor   has  all   requisite
                                         corporate  power and  authority to own,
                                         lease and  operate its  properties  and
                                         the US Activity as presently  conducted
                                         and  to  enter  into  and  perform  its
                                         obligations hereunder;

                                   (iii) the execution, delivery and performance
                                         of  this  Agreement  and  the  US  Sale
                                         Agreement  by the  US  Vendor  and  the
                                         consummation  by the US  Vendor  of the
                                         transactions  contemplated  hereby have
                                         been duly  authorised  by all requisite
                                         corporate  action on the part of the US
                                         Vendor; and

                                       28
<PAGE>

                                   (iv)  this   Agreement   and   the  US   Sale
                                         Agreement  have been duly  executed and
                                         delivered   by   the  US   Vendor   and
                                         constitute the legal, valid and binding
                                         obligation    of   the    US    Vendor,
                                         enforceable  against  the US  Vendor in
                                         accordance  with its  terms,  except to
                                         the extent that  enforceability  may be
                                         limited   by   applicable   bankruptcy,
                                         insolvency  or similar  laws  affecting
                                         the  enforcement  of creditors'  rights
                                         generally   and   subject   to  general
                                         principles  of equity (it being  agreed
                                         that such  counsel  may  assume for the
                                         purposes  of  such   opinion  that  the
                                         internal  laws of England and  Michigan
                                         are the  same as the  internal  laws of
                                         Illinois);

               4.3.3     the Disclosure Letter;

               4.3.4     the executed LAO Agreement;

               4.3.5     the executed Intellectual Property Agreements; and

               4.3.6     an  executed  deed of  assignment  in the Agreed  Terms
                         between  (1) CSC  Computer  Sciences  Limited (2) Lucas
                         Industries plc and (3) the  Purchasers  relating to the
                         TeamSET  Agreement dated 6th June 1995 made between (1)
                         Lucas  Industries  plc and (2)  CSC  Computer  Sciences
                         Limited

     4.4       On  exchange  of this  Agreement  and  the  Sale  Agreements  the
               Purchasers  or the  Guarantor on behalf of the  Purchasers  shall
               (against  compliance by the Vendors with the provisions of clause
               4.3):-


                                       29
<PAGE>

               4.4.1     pay to Lucas  Limited  on  behalf  of the  Vendors  the
                         Provisional Consideration;

               4.4.2     deliver  to  the  Vendors   executed   counterparts  as
                         required by the Vendors of the documents referred to in
                         clauses  4.3.1,  4.3.2,  4.3.4 and  4.3.6 and  executed
                         originals of the Intellectual Property Agreements;

               4.4.3     deliver to the Vendors a  certified  copy of its resale
                         tax certificate;
               
               4.4.4     deliver to the Vendors a  certificate  of good standing
                         in the Agreed Terms in respect of the Guarantor;

               4.4.5     deliver to the Vendors an executed Assumption Agreement
                         in the Agreed Terms  regarding  the  assumption  of the
                         Assumed   Liabilities   (as  defined  in  the  US  Sale
                         Agreement);

               4.4.6     deliver to the Title Insurer the documents  required to
                         be delivered to it by the US Purchaser under Schedule 3
                         of the US Sale Agreement;

               4.4.7     deliver to the Vendors a  certificate  of good standing
                         of the US Purchaser issued by the appropriate authority
                         of the  state  of its  incorporation  and the  State of
                         Michigan;

               4.4.8     deliver  to the  Vendors  a  certified  copy of (i) the
                         Articles of  Incorporation  of the US  Purchaser  as in
                         effect on the date  hereof , (ii) the By laws of the US
                         Purchaser  as in  effect on the date  hereof  (iii) the
                         Memorandum of  Association of the UK Purchaser and (iv)
                         the resolutions  duly adopted by the Board of Directors
                         of the Guarantor and each of the Purchasers authorising
                         its  execution,   delivery  and   performance  of  this
                         Agreement  and the  Sale  Agreements  to  which it is a
                         party and


                                       30
<PAGE>

                         authorising  the  consummation by the Guarantor and the
                         Purchasers of the transactions contemplated thereby;

               4.4.9     deliver to the Vendor the opinion of Dickstein  Shapiro
                         Morin & Oshinsky LLP counsel to the US Purchaser, dated
                         the  date  hereof  and   addressed   to  the   Vendors,
                         substantially to the effect that:-

                         (i)   each of the  Guarantor  and the US Purchaser is a
                               corporation duly organised,  validly existing and
                               in  good   standing   under   the   laws  of  its
                               jurisdiction   of   incorporation   and   the  US
                               Purchaser is duly qualified to transact  business
                               as a  foreign  corporation  in  and  is  in  good
                               standing under the laws of the State of Michigan;

                         (ii)  each of the  Guarantor  and the US Purchaser  has
                               all  requisite  corporate  power and authority to
                               own,   lease  and  operate  its   properties  and
                               business as presently conducted and to enter into
                               and perform its obligations hereunder;

                         (iii) the execution,  delivery and  performance of this
                               Agreement by the  Guarantor  and the US Purchaser
                               and the  consummation by the Guarantor and the US
                               Purchaser of the transactions contemplated hereby
                               have  been  duly   authorised  by  all  requisite
                               corporate action on the part of the Guarantor and
                               the US Purchaser; and

                         (iv)  this   Agreement   has  been  duly  executed  and
                               delivered by the  Guarantor  and the US Purchaser
                               and the US Sale  Agreement has been duly executed
                               and  delivered by the US Purchaser  and each such
                               agreement   constitutes  the  legal,   valid  and
                               binding  obligation  of the US Purchaser  and the
                               Guarantor, enforceable against them in


                                       31
<PAGE>

                               accordance with their terms, except to the extent
                               that  enforceability may be limited by applicable
                               bankruptcy,  insolvency or similar laws affecting
                               the  enforcement of creditors'  rights  generally
                               and subject to general  principles  of equity (it
                               being agreed that such counsel may assume for the
                               purposes of such opinion  that the internal  laws
                               of  England  and  Michigan  are  the  same as the
                               internal laws of the District of Columbia).

     4.5       Effective Completion will take place immediately upon:-

               4.5.1     all  matters   and  things   required  to  be  done  on
                         Completion   pursuant  to  each  of  the  English  Sale
                         Agreement and the US Sale Agreement being done; and

               4.5.2     the  provisions  of clauses 4.3 and 4.4 being  complied
                         with (subject to the escrow arrangements referred to in
                         clause 4.2); and

               4.5.3     the condition contained in clause 16 of the German Sale
                         Agreement being satisfied

               whereupon  this  Agreement  and  the  Sale   Agreements  and  all
               documents  delivered and payments made pursuant  thereto shall be
               released  to the  recipient  and  this  Agreement  and  the  Sale
               Agreements and such other documents will come into full force and
               effect in accordance with their terms.

     4.6       If any of the Sale Agreements is not completed in accordance with
               its  terms and in  accordance  with  this  Agreement  none of the
               parties to such  documents  shall be obliged to  complete  any of
               them and the provisions of clause 16 shall apply.


                                       32
<PAGE>

5.   WARRANTIES AND INDEMNITIES 

     5.1       The  English  Vendor  hereby   warrants  and  represents  to  the
               Purchasers in the terms of the General Warranties and the English
               Warranties,  the English  Vendor and the US Vendor hereby jointly
               and severally warrant and represent to the Purchasers with regard
               to the US  Activity  in the  terms of the US  Warranties  and the
               English Vendor and the German Vendor hereby jointly and severally
               warrant and represent to the Purchasers with regard to the German
               Activity in the terms of the German Warranties.

     5.2       The  Vendors  agree that the  Guarantor  and the  Purchasers  are
               entering into this Agreement and the relevant Sale  Agreements in
               reliance  on the  Warranties  but the  provisions  of this clause
               shall  not  imply  that  any  Vendor   gives  any   warranty   or
               representation apart from the Warranties.

     5.3       The Vendors shall be released  from the effect of the  Warranties
               to the  extent of the  disclosures  contained  in the  Disclosure
               Letter  and to the  extent  that any  Purchaser  was aware of any
               other matters,  events or circumstances  (whether revealed by any
               investigation  or enquiry made by or on behalf of the  Purchasers
               into the Activities or otherwise) which would constitute a breach
               of any of the  Warranties  but for the  provisions of this clause
               5.3.  For  the  purposes  of  this  clause  5.3  the  Purchasers'
               awareness shall be limited to matters, events or circumstances of
               which any of John Logan,  Dick  Glennan,  Eugene  Haffely,  Bruce
               Erdel,  Steve Gore,  Marilyn  Pummell or Jim Cooper was  actually
               aware.

     5.4       Any claim the Purchasers may have in respect of the Warranties or
               the  Indemnities  shall  sound in  damages  only,  subject to the
               provisions  of  this  clause  5,  and  accordingly   neither  the
               Guarantor nor the Purchasers shall have the right to rescind this
               Agreement or any of the Sale  Agreements  or treat any of them as
               having  been  repudiated  by the Vendors if there shall have been
               any breach of such Warranties (except in the case of fraud on the
               part of the Vendors).


                                       33
<PAGE>

     5.5       The Guarantor  and the  Purchasers  hereby agree and  acknowledge
               that  notwithstanding  anything to the contrary contained in this
               Agreement the Warranties and the Indemnities  (where  applicable)
               are subject to the following:-

               5.5.1     no claim in respect of the Warranties  shall be capable
                         of being made unless it shall be notified in writing to
                         the English Vendor

                         5.5.1.1   within  eighteen months from the date hereof;
                                   or

                         5.5.1.2   in the case only of the Warranties  contained
                                   in  paragraphs  1.1 of Part A of  Schedule  4
                                   (Title  to  Assets)  and  18  of  Part  A  of
                                   Schedule 4 (Broker's fees) within three years
                                   from the date hereof; or

                         5.5.1.3   in the case only of the Warranties  contained
                                   in paragraphs 4 to 6 of Part B of Schedule 4,
                                   paragraph  4 of  Part  C of  Schedule  4  and
                                   paragraph  3 of  Part  D of  Schedule  4 (Tax
                                   Matters)  within  three  years  from the date
                                   hereof;

               5.5.2     any such claim in respect of the  Warranties  which may
                         be made shall (if it has not been previously  satisfied
                         settled or  withdrawn) be deemed to be withdrawn at the
                         expiration  of 9 months  from the date upon  which such
                         notice is received by the  English  Vendor  pursuant to
                         clause  5.5.1  unless  prior to such  expiration  legal
                         proceedings  in respect  thereof shall have been issued
                         and served on the Vendors;


                                       34
<PAGE>

               5.5.3     the  aggregate  liability  of the Vendors in respect of
                         all breaches of the  Warranties  shall not exceed a sum
                         equal to fifty per cent of the Consideration;

               5.5.4     the  Vendors  shall  not be liable  in  respect  of any
                         single claim brought by the  Purchasers for a breach of
                         the  Warranties  arising  out of a single  event if the
                         liability  in respect  of such  claim  would not exceed
                         (pound)25,000   (twenty  five  thousand  pounds).   The
                         Vendors  or the  relevant  Vendor  shall be  liable  in
                         respect of any claim for a breach of the  Warranties in
                         respect  of which the  liability  of the  Vendors  or a
                         Vendor  exceeds  (pound)25,000  (twenty  five  thousand
                         pounds)  only if the  liability  of the  Vendors or any
                         Vendor  for  that  claim  and  all  other  such  claims
                         exceeding  (pound)25,000  (twenty five thousand pounds)
                         would in aggregate exceed (pound)300,000 (three hundred
                         thousand  pounds) and in that event the  Vendors  shall
                         only be liable for the excess;

               5.5.5     if any matter  arises or gives rise to any claim  under
                         the Warranties or the Indemnities the Purchasers  shall
                         as  soon  as  reasonably  practicable  give  notice  in
                         writing to the English  Vendor  giving full  details of
                         the  matter in  respect  of which the claim is made and
                         the bona fide  estimated  liability in respect  thereof
                         and where the  claim  arises by reason of a claim  made
                         against any  Purchaser by a third party that  Purchaser
                         shall not seek to settle or compromise the same without
                         the written consent of the English Vendor (such consent
                         not to be  unreasonably  withheld or delayed) and shall
                         take such action as the English  Vendor may  reasonably
                         require to avoid,  resist,  contest or  compromise  any
                         such claim on the basis that the English  Vendor  shall
                         indemnify that Purchaser on a current basis against all
                         reasonable legal costs and related out of


                                       35
<PAGE>

                         pocket expenses  incurred by or awarded against it as a
                         direct result thereof;

               5.5.6     no claim in respect of any breach or breaches of any of
                         the Warranties or under the  Indemnities  shall be made
                         to the extent that (a)  provision  or reserve  therefor
                         has  been  made  and is  reflected  in the Net  Current
                         Assets  Value  or (b) the  subject  matter  thereof  is
                         otherwise  taken  account  of,  or  reflected,  in  the
                         calculation of the Net Current Assets Value;

               5.5.7     the Vendors  shall have no  liability in respect of any
                         claim under the Warranties or the Indemnities:-

                         5.5.7.1   if and to the  extent  that it would not have
                                   arisen but for anything  voluntarily  done or
                                   omitted  to  be  done  outside  the  ordinary
                                   course of business after Completion by any of
                                   the  Purchasers or its  employees,  agents or
                                   successors in title and which that  Purchaser
                                   was not  required  to do in order  to  comply
                                   with any applicable laws or with the terms of
                                   any  of   the   Contracts   assumed   by  the
                                   Purchaser; or

                         5.5.7.2   to the extent that it relates to any loss for
                                   which any of the Purchasers is indemnified by
                                   insurance  (but  only  to the  extent  of the
                                   amount of the proceeds actually received from
                                   the applicable  insurance coverage) or to the
                                   extent  that it relates to any loss for which
                                   it would have been so  indemnified  if at the
                                   relevant  time  there  had been in  existence
                                   valid and adequate  insurance cover of a type
                                   and   level   of  cover   disclosed   in  the
                                   Disclosure


                                       36
<PAGE>

                                   Letter  as being  held by the  Vendor  of the
                                   Activity concerned at the date hereof.

     5.6       Where any  Purchaser is at any time entitled to recover from some
               other  person any sum in respect of any matter  giving  rise to a
               claim under the Warranties or the Indemnities or under any of the
               other  provisions of this Agreement that Purchaser  undertakes to
               take all reasonable steps to enforce,  prior to taking any action
               (other than  notifying the English  Vendor of the claim)  against
               the  Vendors  or any of them,  any rights of  recovery  that such
               Purchaser  may have  against  any third  party in  respect of the
               subject  matter of the claim,  subject to being  indemnified on a
               current basis by the Vendors  against all reasonable  legal costs
               incurred by it in doing so and provided  that it shall not in any
               circumstances be required to institute legal proceedings  against
               any third  party  (other  than any  insurer) if this would have a
               material  adverse effect on the Activities  taken as a whole.  In
               the event that such Purchaser  shall recover any amount from such
               third party, the amount of the claim against the Vendors shall be
               reduced by the amount recovered.

     5.7       If the Vendors or any of them pay at any time to any Purchaser an
               amount  pursuant to a claim in respect of the Warranties or under
               the  Indemnities  or under  any of the other  provisions  of this
               Agreement and the Purchasers or any of them  subsequently  become
               entitled to recover  from some other person any sum in respect of
               any  matter  giving  rise to such  claim  the  Purchasers  or the
               relevant one of them shall take all  reasonable  steps to enforce
               such recovery, subject to being indemnified on a current basis by
               the Vendors against all reasonable  legal costs incurred by it in
               doing so and provided that it shall not in any  circumstances  be
               required to institute legal  proceedings  against any third party
               (other than any  insurer)  if this would have a material  adverse
               effect on the Activities  taken as a whole.  The Purchasers shall
               forthwith  upon making any such recovery  repay to the Vendors so
               much  of the  amount  paid by the  Vendors  or any of them to the
               Purchasers as does not exceed the sum  recovered  from such other
               person.


                                       37
<PAGE>

     5.8       Without  prejudice to the foregoing  provisions of this clause 5,
               before any Purchaser makes any payment or offers any other remedy
               in  respect  of  any  matters  for  which  it is  entitled  to an
               indemnity from the Vendors or any of them under the provisions of
               this Agreement or any of the Transaction Documents, it shall give
               a reasonable opportunity and reasonable assistance to the Vendors
               to verify and,  if  appropriate,  remedy the  defect,  default or
               omission  or  other  matter  giving  rise  to the  claim  for the
               indemnity in question.

     5.9       Nothing  in  this   Agreement   shall  operate  to  diminish  the
               Purchaser's  common law duty to  mitigate  its loss in respect of
               the matters dealt with in this Agreement.

     5.10      The  failure to provide  notice of any  matter  giving  rise to a
               claim  under  the  Warranties  or  the  Indemnities  as  soon  as
               reasonably  practicable  in  accordance  with clause  5.5.5 or to
               afford the Vendors a reasonable  opportunity  and  assistance  to
               verify  or  remedy  any  matter   giving   rise  to  a  claim  as
               contemplated by clause 5.8 shall not preclude the Purchasers from
               making  any such  claim,  but any claim  shall be  reduced by the
               damages or losses resulting from the Purchasers' delay or failure
               to provide such required  notice or opportunity and assistance to
               remedy the relevant matter.

     5.11      For the purposes only of  determining  the  applicability  of the
               monetary  thresholds  contained in clauses  5.5.3 and 5.5.4,  any
               claim under the Warranties  which is denominated in US dollars or
               Deutschmarks  shall  be  converted  into  (pound)sterling  at the
               Exchange Rates.

6.   PURCHASER ASSURANCES

     6.1       Each of the Guarantor and the Purchasers  warrants and represents
               to the  Vendors  and  each of them  that  the  Guarantor  and the
               Purchasers have the necessary corporate power and authority,  and
               all  authorisations  approvals  consents and licences required by
               the  Guarantor  and  Purchasers  have  been  unconditionally  and
               irrevocably  obtained  and  are  in  full  force  and  effect, to


                                       38
<PAGE>


               permit the Guarantor and Purchasers to enter into and perform the
               Transaction  Documents and the arrangements  therein contemplated
               and the  Transaction  Documents  have been duly  approved  by the
               directors of the Guarantor and the  Purchasers at a duly convened
               meeting  of  those  directors  and  constitute   legally  binding
               obligations  of the Guarantor and the Purchasers (as the case may
               be).

     6.2       The Guarantor and the  Purchasers  acknowledge  to and agree with
               each of the  Vendors  (both  for  themselves  and in each case as
               trustees  for each  other  member of the Lucas  Group and for the
               benefit  of each  of  their  respective  officers  employees  and
               advisers  and  as  trustee  for  such  officers,   employees  and
               advisers) that:-

               6.2.1     the  invitation  to them by or on behalf of the Vendors
                         to  consider  the  purchase of the  Activities  and the
                         provision of  information  relating to the  Activities,
                         their respective  financial  positions or prospects was
                         made by or on behalf of the Vendors and accepted by the
                         Guarantor  and the  Purchasers  and this  Agreement was
                         entered  into on the basis that none of the Vendors nor
                         any member of the Lucas  Group nor any of the  Vendors'
                         or any member of the Lucas Group's  officers  employees
                         and advisers have made or makes any  representation  or
                         warranty  (other than as set out in the  Warranties) as
                         to the accuracy or completeness of such  information or
                         accepts any duty of care in  relation to the  Guarantor
                         and the  Purchasers in respect of the provision of such
                         information and, save as contemplated by the Warranties
                         or Indemnities or in the case of  representations  made
                         fraudulently by the Vendors, none of such persons shall
                         be  under  any  liability  to  the  Guarantor  and  the
                         Purchasers in the event that, for whatever reason, such
                         information  is or  becomes  inaccurate  incomplete  or
                         misleading in any particular; and


                                       39
<PAGE>


               6.2.2     the Guarantor and the Purchasers  have had  independent
                         legal and financial  advice relating to the purchase of
                         the Assets and to the terms of this  Agreement and each
                         Sale   Agreement  and  the  documents  to  be  executed
                         pursuant to them including the terms of this clause.

     6.3       Subject to clause 6.4 and to such rights as the English Purchaser
               has under the LAO  Agreement,  the  Purchasers  undertake  to the
               Vendors to procure that none of the  Activities  will at any time
               after  Completion hold itself out as a Subsidiary of or otherwise
               connected  with the  Lucas  Group or use in  connection  with any
               business the name or mark "Lucas" and/or "LucasVarity" and/or the
               Lucas Group diagonal flash or any  colourable  imitation  thereof
               and (without  limiting the  foregoing) to procure that all of the
               same are deleted  from all printed  material  including  (without
               limitation)  stationery,  compliment  slips,  invoices,  business
               cards,  CE  Certificates,  Calibration  Certificates,  Electrical
               Safety Test Certificates,  catalogues,  brochures, sales material
               and (if relevant)  from  electronic  media such as internet sites
               and  telephone  listings  and (if  relevant)  from signage at the
               Property and the US Leased  Property and from motor  vehicles and
               other tangible  assets used by the Activities and acquired by the
               Purchasers  as soon as  reasonably  practicable  and in any event
               within  30 days  from  Completion  or, in the case only of Serial
               Plates for M/C's and Name  Plates for M/C's,  within 45 days from
               Completion.

     6.4       During the 30 or 45 day periods referred to in clause 6.3 (as the
               case may be) and  pending  deletion  of the name or mark  "Lucas"
               and/or "LucasVarity" and/or the Lucas Group diagonal flash or any
               colourable  imitation  thereof  as  specified  in clause  6.3 the
               Purchasers may use the same in connection  with the Activities as
               envisaged by clause 6.3  provided  that the  Purchasers  agree to
               indemnify  and hold  harmless  the  Vendors  against  all claims,
               proceedings,  losses,  damages,  liabilities,  costs and expenses
               suffered or incurred by any of the Vendors directly or indirectly
               as a result  of or in  connection  with the use by any  Purchaser
               following Completion of the


                                       40
<PAGE>

               names and/or mark "Lucas" or "LucasVarity" and/or the Lucas Group
               diagonal flash. This clause is also subject to such rights as the
               Purchaser has under the LAO Agreement.

     6.5       The  Purchasers  acknowledge  to each Vendor the ownership by the
               Lucas  Group of the names  and/or mark  "Lucas" or  "LucasVarity"
               and/or the Lucas Group diagonal flash in relation to the goods or
               services  in  respect  of  which  such  names,  marks or logo are
               registered  and/or are used by any member of the Lucas  Group and
               hereby   acknowledge   that   notwithstanding   any  arrangements
               operating  between the Vendors and the  Purchasers  in respect of
               the period following Completion all and any goodwill in the names
               of Lucas and/or LucasVarity  belongs to and remains vested in the
               Lucas Group in relation to such goods and services.

     6.6       The Guarantor and the Purchasers hereby covenant with the Vendors
               and each of them that  except to the extent (if any)  required by
               law the  Guarantor and the  Purchasers  will not and will procure
               that no Subsidiary  of the Guarantor  will at any time within the
               period of five years from Completion  disclose or make public any
               secret or confidential or professional or financial or commercial
               information  concerning  the Lucas Group and not  relating to the
               Activities  which it has learned by reason of the  Activities  or
               any of them  being  owned  by the  Vendors  and will not and will
               procure  that no  Subsidiary  of the  Guarantor  will  use to the
               detriment of any member of the Lucas Group any information  which
               the Activities have obtained in confidence in the course of or as
               a result of such ownership provided always that the provisions of
               this clause 6.6 shall cease to apply to any information  which is
               already or which falls into the public domain  otherwise  than by
               reason of a breach of this provision.

     6.7       The Purchasers and the Guarantor  hereby warrant and represent to
               the Vendors in the terms of Schedule 5.

     6.8       The  Purchasers'  liability  in  respect  of any claim  under any
               indemnities  given by any Purchaser under this or any of the Sale
               Agreements (excluding


                                       41
<PAGE>

               any liability under or in respect of the provisions of clauses 10
               of the  English  Sale  Agreement  and the US Sale  Agreement  and
               clause 11 of the German Sale  Agreement  (Product  Liability  and
               Product Warranty)) shall be reduced to the extent that it relates
               to any loss for which the  Vendors  or  relevant  members  of the
               Lucas Group are  indemnified by insurance (but only to the extent
               of the proceeds actually  received from the applicable  insurance
               coverage).

     6.9       All  undertakings,  covenants,  indemnities and  acknowledgements
               given to or made with any member of the Lucas  Group under any of
               the  Transaction  Documents are given to or made with the Vendors
               and each of them for themselves  and (as a separate  undertaking,
               covenant, indemnity or acknowledgement) to or with each Vendor as
               trustee for each other member of the Lucas Group.

7.   INTEREST

     Save where  otherwise  contemplated  by any other  provision of this or any
     Sale Agreement,  if any sum shall at any time be due and  outstanding  from
     any  Purchaser  to the  Vendors  or any of them or from any  Vendor  to the
     Purchasers  or any of them (as the case may be)  pursuant  to the  terms of
     this or any Sale Agreement  interest  shall be payable  thereon at the rate
     per annum of 2% above  Barclays  Bank plc's base  lending rate from time to
     time,  such  interest to accrue from day to day and to be payable  from the
     due date until payment whether before or after judgment.

8.   WAIVER

     No  waiver  by any  party  to  this  or any  Sale  Agreement  of any of the
     requirements  of this or any Sale Agreement or any of its rights  hereunder
     or thereunder shall have effect unless given in writing and signed by or on
     behalf  of the  party  giving  the  waiver  and no  delay  by any  party in
     exercising any of its rights  hereunder shall impair the same. No single or
     partial exercise of any right or remedy shall preclude any further exercise
     thereof or the exercise of any other right.


                                       42
<PAGE>

9.   NOTICES

     9.1       The  addresses  for service of the parties to this  Agreement and
               each Sale Agreement shall be:-

               9.1.1     in the case of the Vendors and each of them:-

                         The  Legal  Director  - Lucas  Aftermarket  Operations,
                         Stratford Road, Solihull, B90 4LA England; and

               9.1.2     in  the  case  of  each  of  the   Guarantor   and  the
                         Purchasers:-

                         Chief Executive Officer, DT Industries, Inc., Corporate
                         Centre,  Suite 2-300, 1949 East Sunshine,  Springfield,
                         MO 65804

     9.2       Any notice  will be deemed well served on the party to whom it is
               addressed  if it be  served  personally  or by  courier  delivery
               addressed  to such  party at its  address  for  service  and such
               service  shall be deemed to be  effective  upon such  personal or
               courier delivery taking place.

     9.3       Any notices or  statements  to be served  pursuant to clause 3 of
               this Agreement may be sent by facsimile process:-

               9.3.1     in the case of notices  to the  Vendors or any of them,
                         to the  Legal  Director-Lucas  Aftermarket  Operations,
                         Fax: 0121 627 4417; and

               9.3.2     in the  case  of  notices  to  the  Guarantor  and  the
                         Purchasers  or any of  them,  to  the  Chief  Executive
                         Officer, DT Industries, Inc., Fax: 417 890 0525

     9.4       Any notice or  statement so sent by  facsimile  process  shall be
               deemed to have been served at the expiration of 2 hours after the
               time of despatch, if despatched before 3.00 pm (local time at the
               place of  destination) on any Business Day, and in any other case
               at 10.00 am  (local  time at the  place  of  destination)  on the
               Business Day following the date of despatch, provided


                                       43
<PAGE>

               that it is  followed  by a hard copy of the  notice or  statement
               served on the recipient in accordance with clause 9.2.

     9.5       A copy of any notice  served on the  Guarantor or the  Purchasers
               pursuant  to clause 9.3 shall  also be sent to Price  Waterhouse,
               One Nations Bank Plaza, St. Louis, MO 63101 (for the attention of
               Steven  Ditman)  and a copy of any  other  notice  served  on the
               Guarantor  or the  Purchasers  under  this or any Sale  Agreement
               shall  also be sent to the US  Purchaser's  Solicitors  (for  the
               attention of Ira Polon).

10.  COSTS

     Save as  otherwise  provided  in this and the Sale  Agreements  each  party
     hereto  shall  bear its own  costs and  expenses  in  connection  with this
     Agreement and each Sale Agreement and the negotiations leading thereto.

11.  ENTIRE AGREEMENT

     The Transaction  Documents  contain the whole agreement between the parties
     to  this  Agreement  relating  to  the  transactions  contemplated  by  the
     Transaction  Documents and supersede  all previous  agreements  between the
     parties  relating  to  these  transactions.  Each  of the  parties  to this
     Agreement  acknowledges  that in  agreeing  to enter  into the  Transaction
     Documents  it has not  relied  on any  pre-contractual  representations  or
     warranties  or  other  assurances  save  as  set  out  in  the  Transaction
     Documents.  Nothing in this clause 11 shall relieve any member of the Lucas
     Group from any liability for representations made fraudulently.

12.  SURVIVAL OF CERTAIN PROVISIONS

     This  Agreement  and each Sale  Agreement  shall remain in force and effect
     after  Completion in respect of any matters  covenants or conditions  which
     shall  not have been done  observed  or  performed  prior  thereto  and all
     representations  warranties  obligations  of and  indemnities  given by the
     parties shall (except for any obligations fully performed) continue in full
     force and effect notwithstanding Completion.


                                       44
<PAGE>

13.  GOVERNING LAW

     This  Agreement  shall be governed  by English  law and the parties  hereby
     submit to the non-exclusive jurisdiction of the English courts.

14.  ANNOUNCEMENTS

     No announcement concerning the transactions  contemplated by this Agreement
     or any Sale Agreement or any matter  ancillary to them and no disclosure of
     the terms or contents of this or any Sale Agreement shall (save as required
     by law or the  regulations  of the London  Stock  Exchange  or the New York
     Stock Exchange) be made by any party except with the prior written approval
     of  the  English  Vendor  and  the  Guarantor  (such  approval  not  to  be
     unreasonably  withheld or delayed).  Each of the Vendors and the Purchasers
     agree to procure that each of their respective advisers and representatives
     complies with the provisions of this clause as if such persons were parties
     to this Agreement.

15.  COUNTERPARTS

     This Agreement and any other documents to be delivered pursuant to clause 4
     may be executed in any number of  counterparts  and by the several  parties
     hereto  on  separate  counterparts  each  of  which  when so  executed  and
     delivered  shall be an original  but all the  counterparts  shall  together
     constitute one document.

16.  TERMINATION

     In the  event  that all of the Sale  Agreements  are not  entered  into and
     exchanged in  accordance  with clause 2 or that the English Sale  Agreement
     and the US Sale Agreement are not completed in accordance with clause 4:-

     16.1      the parties  thereto  shall not be obliged to complete any of the
               Sale Agreements and each of the documents referred to above shall
               lapse and become null and void and all rights and  obligations in
               respect  thereof shall cease to have effect  immediately  save as
               may be expressly provided therein;


                                       45
<PAGE>

     16.2      the parties to all such documents  shall  immediately  return any
               signed  copies of the same  held by them and all other  documents
               delivered to them thereunder to the party delivering the same and
               shall  immediately repay all payments received by them thereunder
               to the party making the same.

17.  ASSIGNMENT

     The benefit of this  Agreement may not be assigned by any of the Vendors or
     by Lucas Industries plc or Lucas Automation & Control  Engineering  Limited
     without the prior  written  consent of the Guarantor or by the Guarantor or
     the Purchasers without the prior written consent of the English Vendor save
     that any party may assign the benefit of this  Agreement to any  Subsidiary
     or Holding Company of it or to any other  Subsidiary of its Holding Company
     if such  assignment does not increase the liability of any party under this
     Agreement.  If at any time  thereafter  such assignee  shall cease to be so
     connected  with such  assignor it shall prior to so ceasing  re-assign  the
     benefit of this Agreement to such assignor.

18.  GUARANTEE

     In  consideration of the Vendors entering into this and each Sale Agreement
     at  the  request  of  the   Guarantor,   the  Guarantor   irrevocably   and
     unconditionally:-

     18.1      guarantees  to the Vendors and each of them the due and  punctual
               payment observance and performance by the Purchasers of all their
               liabilities and obligations whether present or future, express or
               implied, actual or contingent under or arising out of each of the
               Transaction  Documents  (including any liability or obligation to
               pay damages);

     18.2      undertakes with the Vendors and each of them that whenever any of
               the  Purchasers  fail  to  pay or  perform  when  due  any of the
               liabilities or obligations  referred to in clause 18.1 it will on
               demand by any  Vendor  from time to time pay,  perform or procure
               the performance of any and all of the same; and


                                       46
<PAGE>

     18.3      in addition to the obligations contained in clauses 18.1 and 18.2
               and separate  from them agrees to indemnify  the Vendors and each
               of them in full on  demand  against  any  loss or  damage  or any
               liability  (which  liability  will  include  all  losses or costs
               claims expenses or damages including legal and other professional
               fees and expenses) which the Vendors or any of them may suffer or
               incur directly or indirectly  arising out of or as a result of or
               in connection  with any failure for any reason of the  Purchasers
               to pay, observe or perform any of the obligations  referred to in
               clause 18.1 when due.

19.  None of the Vendors  will be obliged  before  exercising  any of the rights
     powers or remedies  conferred  upon it and them in respect of the Guarantor
     under the Guarantee or by law:-

     19.1      to make demand of the Purchasers or any of them; or

     19.2      to enforce or seek to enforce any claim  right or remedy  against
               any Purchaser or any other person; or

     19.3      to make or file any claim in  connection  with the  insolvency of
               any Purchaser or any other person; or

     19.4      to take any action or obtain  judgement in any court  against any
               Purchaser or any other person; or

     19.5      to  enforce  or seek to enforce  any other  security,  indemnity,
               guarantee or lien taken in respect of any of the  obligations  of
               the Guarantor under the Guarantee.

20.  Neither the liability of the  Guarantor  under the Guarantee nor the rights
     powers and remedies  conferred on the Vendors under the Guarantee or by law
     will in any way be released prejudiced diminished or affected by any of the
     following:-

     20.1      the granting of time or indulgence to or any  compromise  with or
               agreement not to sue the  Purchasers,  the Guarantor or any other
               person  or the  Vendors  abstaining  from  proving  or  enforcing
               payment of any dividend or composition;


                                       47
<PAGE>

     20.2      the Vendors not giving the Guarantor notice of any default by any
               Purchaser or of any action taken by the Vendors;

     20.3      any  variation  made in any of the  terms  of  this  or any  Sale
               Agreement  whether the same is made with or without the assent or
               knowledge of the Guarantor;

     20.4      the Vendors  obtaining  or failing to obtain or perfect any other
               guarantee or security (whether contemporaneously with this or any
               Sale Agreement or not) or the modification,  variation,  renewal,
               release,  termination or discharge by the Vendors of any security
               or  guarantee  now or  hereafter  held from any  Purchaser or any
               other  person  (including  any  signatory  to  this  or any  Sale
               Agreement) in respect of the liabilities and obligations referred
               to in clause 18.1;

     20.5      any  defect  in  or  the  unenforceability  of  any  security  or
               guarantee  given by or on  behalf of any  Purchaser  or any other
               person  in  respect  of any of the  liabilities  and  obligations
               referred to in clause 18.1;

     20.6      any  invalidity,  illegality,  unenforceability,  irregularity or
               frustration  in  any  respect  of  any  of  the   liabilities  or
               obligations referred to in clause 18.1; and

     20.7      any act  omission or  circumstances  which but for this clause 20
               might  operate to  prejudice,  affect or  otherwise  diminish the
               liability of the  Guarantor  under clause 18 or any of the rights
               powers or  remedies  conferred  upon the  Vendors  or any of them
               under clause 18 or by law.

21.  The  Guarantee is a continuing  guarantee and will remain in full force and
     effect until all the liabilities  and obligations  referred to in clause 18
     have been irrevocably paid and satisfied in full.

22.  Without  prejudice  to  the  Vendors'  rights  against  the  Purchasers  as
     principal  debtor  the  Guarantor  agrees  as a  separate  and  independent
     stipulation that any liabilities or obligations  referred to in clause 18.1
     which may not be  recoverable  on the  footing of a  guarantee  (whether by
     reason  of  any  legal  limitation,  disability  or  incapacity  on  or  of



                                       48
<PAGE>


     any  Purchaser  or any other fact or  circumstance)  or which are or become
     illegal,   voidable,   unenforceable,   discharged  by  any  insolvency  or
     irrecoverable  (and whether or not known to the Vendors or the Guarantor or
     any other person) will  nevertheless  be recoverable  from and  enforceable
     against the  Guarantor as sole or principal  debtor in respect  thereof and
     will be paid or performed by the Guarantor on demand.
                                    
23.  NO THIRD PARTY BENEFICIARY

     Except as otherwise provided in this Agreement,  this Agreement is intended
     and agreed to be solely for the  benefit  of the  parties  hereto and their
     permitted  assigns and no third party shall  accrue any  benefit,  claim or
     right of any  kind  whatsoever  pursuant  to,  under,  by or  through  this
     Agreement.

24.  EC NOTIFICATION

     As soon as is practicable after the execution of the Transaction  Documents
     the parties  shall procure that the  Transaction  Documents are notified to
     the Commission of the European  Community in accordance  with Regulation 17
     of 1962 of the  Council  of the  European  Communities.  Lucas  shall  have
     primary  responsibility  for completing and submitting the necessary  forms
     and the Purchasers and the Guarantor shall provide the required information
     relating to their group and markets to enable  Lucas to do so.  Lucas shall
     prior to notification to the Commission  submit the forms to the Purchasers
     and Guarantor for approval and allow a reasonable time for comments.  Lucas
     will not unreasonably  refuse to incorporate such comments provided that if
     any  disagreement  arises  between  the  parties  over  the  form  of  such
     notification each party shall be entitled to make its own submission to the
     Commission. Each party shall bear its own costs and expenses in relation to
     any such  notification and any enquiries made by the Commission in relation
     thereto.


                                       49
<PAGE>


                                   SCHEDULE 1
                                     PART 1
                             DETAILS OF THE VENDORS

(1)  Lucas Limited whose registered office is at Stratford Road, Solihull,
     West Midlands, England

(2)  Lucas Automation & Control Engineering, Inc.,  a Virginia corporation
     whose executive offices are located at 1000 Lucas Way, Hampton,
     Virginia, USA

(3)  Lucas Automation and Control Engineering GmbH of Karl-Mand Strasse
     2a, 56070 Koblenz, Germany, registered with the Commercial Register
     of the County Court of Koblenz under registration number HRB 5258



                                   PART 2
                         DETAILS OF THE PURCHASERS


(1)  Assembly Technology & Test Limited whose registered office is at
     Beaufort House, 15 St Botolph Street, London EC3A 7NJ

(2)  Assembly Technology & Test, Inc., of Corporate Centre, Suite 2-300,
     1949 East Sunshine, Springfield, MO 65804

(3)  Assembly Technologie & Automation GmbH of Karl-Mand Str. 2, D-56070
     Koblenz-Rheinhafen


                                       50
<PAGE>

                              SCHEDULE 2 (OMITTED)
                             ACCOUNTING PRINCIPLES
                     


                                 Pages 51 - 58

<PAGE>


                              SCHEDULE 3 (OMITTED)
                                    
                                     Part 1
         PROFORMA DRAFT COMPLETION STATEMENTS AND AGGREGATION STATEMENT


                                     Part 2
                          ALLOCATION OF PURCHASE PRICE


   

                                  Pages 59 - 62


<PAGE>

                                   SCHEDULE 4
                    REPRESENTATIONS AND WARRANTIES OF VENDORS
                         DEFINITIONS AND INTERPRETATION


1.   Words and  expressions  used in this  Schedule  shall  unless  the  context
     otherwise  requires have the same meanings (if any) as are given to them in
     this Agreement.

2.   Where any of the Warranties are qualified by words such as "the Vendors are
     not  aware"  or  "the  Vendors  believe"  or "to the  best of the  Vendors"
     knowledge" or any similar  qualification,  the Vendors' awareness or belief
     or knowledge shall (unless specified otherwise in Schedule 4) be determined
     by  reference  only to the  awareness or belief or knowledge of the persons
     whose names are listed in the left hand column below and whose  position is
     stated  opposite his name in the right hand column  below,  of whom enquiry
     has been made by the Vendors and the Vendors shall not be liable for breach
     of  representation  and/or warranty  should the fact or circumstance  which
     would  otherwise  be a breach  of the  Warranties  be  known  to any  other
     employee or officer of any member of the Lucas Group.

     Name of Person        Position Held
     --------------        -------------   

     Chris Long-Leather    Programme Director - Business Development
     Geoff Wyatt           Finance Director - Lucas Aftermarket Operations
     David Watkins         Managing Director of the Activities
     Wayne Schultz         Vice President (Finance) - the Activities
     Graham Plumley        Human Resources Director - Lucas Aftermarket
                              Operations
     Tim Bridgman          Divestment Project Manager
     Richard Peachey       Legal Director - Lucas Aftermarket Operations
     Eddie Earle           Group Property Manager
     Mike McKiernan        Group Director - Health, Safety and Environment

3.   In relation to any of the  Warranties  which are  qualified by reference to
     materiality, the materiality of any matter which may constitute a breach of
     any such Warranty shall be


                                       63
<PAGE>


     determined by reference to and in the context of the Activities  taken as a
     whole and not any one of them.

4.   With regard to the different Parts of this Schedule:-

     4.1       the  Warranties  contained in Part A of this Schedule are made by
               the English Vendor in relation to each of the Activities;

     4.2       the  Warranties  contained in Part B of this Schedule are made by
               the English  Vendor in relation to the English  Activity only and
               nothing  contained  in Part B shall  affect  the  application  or
               interpretation  of the  Warranties  contained in the remainder of
               this  Schedule.  References  in such Part B to the  Vendor or the
               Purchaser  shall be  deemed  to be to the  English  Vendor or the
               English  Purchaser  (as the  case may be) and  references  to the
               Activity shall be deemed to be to the English Activity;

     4.3       the  Warranties  contained in Part C of this Schedule are made by
               the  English  Vendor  and the US  Vendor  in  relation  to the US
               Activity  only and nothing  contained  in Part C shall affect the
               application or interpretation of the Warranties  contained in the
               remainder  of this  Schedule.  References  in such  Part C to the
               Vendor or the Purchaser shall be deemed to be to the US Vendor or
               the US  Purchaser  (as the  case  may be) and  references  to the
               Activity shall be deemed to be to the US Activity; and

     4.4       the  Warranties  contained in Part D of this Schedule are made by
               the  English  Vendor and the  German  Vendor in  relation  to the
               German Activity only and nothing contained in Part D shall affect
               the application or interpretation of the Warranties  contained in
               the remainder of this Schedule.  References in such Part D to the
               Vendor shall be deemed to be to the German Vendor and  references
               to the Activity shall be deemed to be to the German Activity.


                                       64
<PAGE>

                                 PART A. GENERAL



1.   The Assets

     1.1       The Vendors  have good and  marketable  title to the Assets other
               than:-

               1.1.1     the English Property and the German Property (which are
                         dealt with in the English Sale Agreement and the German
                         Sale Agreement) and the US Leased Property;

               1.1.2     the  Intellectual  Property  (which  is  dealt  with in
                         paragraph 10 of Part A of this Schedule); and

               1.1.3     the Leased Assets,

               free  and  clear of any  outstanding  mortgage,  charge,  pledge,
               security interest  (including blanket security  interest),  lien,
               conditional sale, credit sale,  hire-purchase or lease agreements
               or any encumbrances of any nature whatsoever (excluding retention
               of title claims by unpaid  suppliers)  or any option or agreement
               for purchase in favour of any person.

     1.2       The  Assets  (together  with any  right  to use the  intellectual
               property  rights granted  pursuant to this Agreement and the Sale
               Agreements)  comprise  all the assets of material  importance  to
               enable the Vendors to carry on the Activities as now carried on.

     1.3       The  Disclosure  Letter  contains a list of all  material  assets
               leased by the Vendors and used in the Activities.

2.   The Activities
     
     Since the Accounting Date:-

     2.1       the  Activities  have been  carried on in the  ordinary and usual
               course in similar  manner as in the financial year of the Vendors
               ending on the Accounting  Date and all of the Assets  acquired by
               the Vendors in respect of


                                       65
<PAGE>

               the Activities  since the  Accounting  Date have been acquired in
               the ordinary course of business;

     2.2       there has been no disposal of  significant  assets  other than in
               the ordinary course of trading;

     2.3       the  Activities  taken  together  have not suffered any change in
               their financial  condition or business which in the aggregate had
               or has a material  adverse  effect on the  Activities as a whole;
               and

     2.4       the Vendors have not in relation to the Activities:-

               2.4.1     sold,   assigned,   encumbered,    licensed,   pledged,
                         abandoned or otherwise  transferred  (a) any Registered
                         Intellectual  Property  or (b)  save  in  the  ordinary
                         course  of  the  Activities,   any  other  intellectual
                         property or other intangible assets;

               2.4.2     made  any  change  in  any  method  of   accounting  or
                         accounting principle or practice;

               2.4.3     granted  any  general   increase  in  the  remuneration
                         payable  or to  become  payable  to their  officers  or
                         employees  (including any such increase pursuant to any
                         bonus,   pension,   profit-sharing  or  other  plan  or
                         commitment) or any special increase in the remuneration
                         payable  or  to  become   payable  to  any  officer  or
                         employee,  except for  normal  merit and cost of living
                         increases  in the  ordinary  course of business  and in
                         accordance with past practice;

               2.4.4     made capital  expenditures  or commitments in excess of
                         the amounts  contained in the budget for the Activities
                         for the period  ending 31 January 1998, a copy of which
                         is annexed to the Disclosure Letter ;

               2.4.5     made  or  guaranteed  any  loans  to  any  customer  or
                         distributor of the Activities;


                                       66
<PAGE>

               2.4.6     entered  into  any  factoring  or  invoice  discounting
                         arrangements with respect to their debts;

               2.4.7     permitted   any   material   insurance   policy  to  be
                         terminated or cancelled; or

               2.4.8     agreed to do any of the foregoing things.

3.   General Legal Compliance

     3.1       None of the Vendors has  received  notice  (with which it has not
               complied)  alleging  that  it is in  default,  and  so far as the
               Vendors  are aware they are not in any  default,  under any laws,
               regulations  or orders  affecting the  operations of the Activity
               concerned or any of the Assets  (excluding any laws,  regulations
               or orders  referred to in Parts B, C or D of this Schedule or any
               other  laws,  regulations  or  orders  relating  to  taxation  or
               relating to the Property or to the environment (as defined in the
               Environmental   Protection   Act  1990)  or   pollution   of  the
               environment  or to the  health  and  safety  of the  Transferring
               Employees)  which  will  have a  material  adverse  effect on the
               Activities taken as a whole. So far as the Vendors are aware such
               of the  Records as are  required by statute or  regulation  to be
               kept  are  up to  date  or are  not  misleading  in any  material
               respect.

     3.2       None of the Vendors has  received  any notice,  with which it has
               not  complied,  alleging  that it does  not  hold  all  necessary
               licences and consents for the proper  carrying on of the Activity
               concerned.  The Disclosure Letter contains a list of all material
               licences or  governmental  approvals  held by the Vendors for the
               purpose of carrying on the Activities.

4.   Stock and Backlog 

     The Stock taken as a whole is sufficient for the normal requirements of the
     Activities  and taken as a whole is at its normal  level  having  regard to
     current orders and to orders  reasonably  anticipated from customers of the
     Vendors in relation to the



                                       67
<PAGE>

     Activities.  At 31 May 1997,  the  project  backlog  from firm  orders from
     customers of the Activities was approximately (pound)40,000,000.

5.   Plant Machinery and Equipment

     All of the  material  Plant  Machinery  and  Equipment  is in all  material
     respects in operating condition subject to ordinary wear and tear.

6.   Contracts

     For the purposes of this paragraph 6 a "Material Contract" means a contract
     relating to or affecting the Activities  which has been entered into by any
     of the  Vendors,  has not yet been  completed by the supply of all goods or
     services due  thereunder  and which  during the life of the  contract  will
     require, or is anticipated to require,  any party to it to pay in aggregate
     a sum of at least (pounds)500,000, US $750,000 or dm 1,000,000 to the other
     party or parties.

     6.1       All Material Contracts and all Contracts with the Major Customers
               (as defined in paragraph  7.2 below) and the Major  Suppliers (as
               defined in paragraph 7.2 below) which have not yet been completed
               by the supply of all goods or services due  thereunder are listed
               in the Disclosure Letter.

     6.2       None of the Vendors is a party to any of the following  Contracts
               which  is not a  Material  Contract  or a  Contract  with a Major
               Customer or Major Supplier:-

               6.2.1     any partnership,  joint venture,  consortium or similar
                         contract relating to any of the Activities;

               6.2.2     any contract  requiring  any Vendor to pay any royalty,
                         commission   or  like   payment  in   relation  to  the
                         Activities;

               6.2.3     any contract for the supply of goods and/or services by
                         or to any Vendor in relation to the Activities on terms
                         under which  retrospective or future  discounts,  price
                         reductions or other


                                       68
<PAGE>


                         financial  incentives  are  given  by or to any  Vendor
                         dependent  on the  level  of  purchases  or  any  other
                         criteria;

               6.2.4     any agency or distributorship agreement;

               6.2.5     any   contract   outside  the  normal   course  of  the
                         Activities  which  restricts the Vendors from supplying
                         or  taking  goods  or  services  to  any  customer  (or
                         prospective  customer)  of the  Activities  or from any
                         supplier (or prospective supplier) to the Activities;

               6.2.6     any   agreement  for  the  sharing  or  passing  on  of
                         confidential  information  which is outside  the normal
                         course of the Activities (excluding any confidentiality
                         agreements  entered into by  prospective  purchasers of
                         the Activities from the Vendors);

               6.2.7     any contract for the purchase of land; or

               6.2.8     any contract for the  acquisition  of the share capital
                         of another  company or the business or  undertaking  of
                         another company.

     6.3       None of the  Contracts  has been  entered  into  other than on an
               arm's length basis.

     6.4       None of the Vendors is aware of the  invalidity of or grounds for
               rescission  avoidance or repudiation  of any agreement  which the
               Purchasers  are  required to take over  hereunder or under any of
               the Sale Agreements.

     6.5       None of the Vendors has received any written  indication that the
               Contracts are not enforceable in accordance with their terms.

     6.6       So far as the Vendors are aware:-

               6.6.1     neither  the  Vendors nor any other party to any of the
                         Material   Contracts  has  failed  to  perform  in  any
                         material respect its



                                       69
<PAGE>

                         obligations  required to be performed  under any of the
                         Material Contracts;

               6.6.2     neither  the  Vendors nor any other party to any of the
                         Material  Contracts is in receipt of any written  claim
                         of  a  material  default  under  any  of  the  Material
                         Contracts; and

               6.6.3     they  are not in  breach  of any of  their  obligations
                         under  any  of  the  other   Contracts   which   would,
                         individually  or in  the  aggregate,  have  a  material
                         adverse effect on the Activities taken as a whole

               save  to the  extent  that  the  sale  of the  Activities  to the
               Purchasers or the  execution and  completion of this and the Sale
               Agreements  may  constitute a breach by the Vendors of any of the
               Contracts.

     6.7       The Vendors are not party to, or bound by the  provisions of, any
               Contract (including purchase orders,  blanket purchase orders and
               agreements and delivery orders) with the United States Government
               or any department, agency or instrumentality thereof or any state
               or local  governmental  agency or  authority  with respect to the
               Activities.

     6.8       The  Disclosure  Letter sets out details of all bids made for the
               sale or supply of goods or services by the  Activities  before 27
               June 1997 which remain open at Completion  and all such bids made
               after that date which remain open at Completion have been made in
               the normal course of the Business.

     6.9       The Schedules to the Sale Agreements include brief details of all
               Memoranda  of  Understanding  to which the  Vendors  are party in
               relation  to  the  Activities  at 27  June  1997  and  all  other
               Memoranda of  Understanding to be assumed by the Purchasers under
               the Sale Agreements were entered into in the normal course of the
               Activities.


                                       70
<PAGE>

7.   Trading Matters

     7.1       There is attached to the Disclosure  Letter an up-to-date copy of
               each  of  the  Vendor's   various  current   standard  terms  and
               conditions of trading as used by the Activities.

     7.2       The Disclosure Letter lists:-

               7.2.1     the top ten  suppliers  (a "Major  Supplier")  by value
                         (net  invoice  value) to the  Vendors in respect of the
                         Activities in the twelve months  immediately  preceding
                         the Accounting Date; and

               7.2.2     the top ten  customers  (a "Major  Customer")  by value
                         (net  invoice  value) of the  Vendors in respect of the
                         Activities in the twelve months  immediately  preceding
                         the Accounting Date.

     7.3       None of the Major  Customers  or Major  Suppliers  have since the
               Accounting  Date  refused to  continue  to do  business  with the
               Vendors and the Vendors have not received any written notice from
               any of  them  indicating  it  would  be  subsequently  materially
               reducing its level of business with the Activities.

     7.4       So far as the  Vendors  are aware,  neither  the  Diesel  Systems
               division  nor the  Light  Vehicle  Braking  Systems  division  of
               LucasVarity has any present  intention to discontinue its trading
               relationship with the Activities after Completion.

     7.5       All trade names under  which the Vendors  currently  carry on the
               Activities are listed in the Disclosure Letter.

8.   Product Defaults

     8.1       The  Disclosure  Letter  contains a list of any product  warranty
               claim exceeding (pound)50,000 for which the Vendors have accepted
               liability in the two years  preceding  Completion and any product
               liability claim exceeding  (pound)50,000 for which the Vendors or
               their insurers have accepted liability in the two years preceding
               Completion.

                                       71
<PAGE>


     8.2       None of the Vendors has been required to file,  nor has filed,  a
               notification  or other  report  with the United  States  Consumer
               Product  Safety  Commission  concerning  any actual or  potential
               hazards with any product manufactured or sold by it.

9.   Litigation and disputes 

     9.1       None of the Vendors is involved, whether as plaintiff,  defendant
               or  any  other  party,  in  any  civil,  criminal,   tribunal  or
               arbitration  proceedings  in  respect  of the  Activities  or the
               Assets and so far as the  Vendors  are aware no such  proceedings
               are pending or have been threatened in writing.

     9.2       None of the  Vendors has been  involved  in any civil,  criminal,
               tribunal or arbitration proceedings relating to the Activities in
               the two  years  immediately  preceding  Completion  in which  the
               amount claimed by or against the Vendors exceeded (pound)50,000.

     9.3       There are no judgments or orders against any Vendor affecting its
               rights  to  sell  any of the  Assets  or  carry  on the  Activity
               concerned.

     9.4       There is no outstanding  dispute between any Vendor and any Major
               Customer or Major  Supplier or with any  federal,  state or local
               governmental  agency  or  authority  which is  having a  material
               adverse effect,  or so far as the Vendors are aware is reasonably
               expected to have a material  adverse  effect,  on the  Activities
               taken as a whole.

10.  Intellectual Property

     10.1      The  Lucas  Group is the  beneficial  owner  of the  Intellectual
               Property

     10.2      The Vendors have not received any written  notice  alleging  that
               any of the Intellectual Property is not valid and enforceable.

     10.3      None of the Vendors has received any written  notice,  with which
               it has  not  complied,  alleging  that  any of the  goods  and/or
               services  supplied in the course of the  Activities or any of the
               processes employed in the Activities or

                                       72
<PAGE>

               any other aspect of the carrying on of the  Activities  infringes
               any  intellectual  property  rights  of any  nature  of any third
               party.

     10.4      The Vendors have not received any written  notice that any person
               is currently infringing any of the Intellectual Property.

     10.5      The Lucas Group has not entered into any subsisting  licence with
               any person under which:-

               10.5.1    the  Lucas  Group  licenses  any  of  the  Intellectual
                         Property to that person; or

               10.5.2    that person licenses any  intellectual  property rights
                         to the Lucas Group for the purpose of the Activities.

     10.6      So far as the  Vendors  are  aware  none of the  past or  present
               employees  of the  Vendors  engaged  in the  Activities  has  any
               material  rights  in  relation  to  the  Registered  Intellectual
               Property.

     10.7      So far as the Vendors are aware  completion of this Agreement and
               the  sale  of  the  Activities   contemplated   hereby  will  not
               materially alter or impair the Registered Intellectual Property.

11.  Employees

     11.1      The  particulars   contained  in  the  Schedule  annexed  to  the
               Disclosure Letter relating to the Transferring Employees are true
               and accurate in all material respects.

     11.2      The Vendors are not under any contractual obligation:-

               11.2.1    to make any increase in the rates of remuneration of or
                         other  similar  payment  to  any  of  the  Transferring
                         Employees;

               11.2.2    to make any  change  in the  terms  and  conditions  of
                         employment of the Transferring Employees.


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<PAGE>

     11.3      The Employee  Pack  referred to in and annexed to the  Disclosure
               Letter  discloses all material  agreements or  arrangements  with
               trades  unions,  staff  associations  or  other  associations  of
               employees relating to the Transferring Employees.

     11.4      The written terms of employment of those  Transferring  Employees
               whose basic salary exceeds (pound)30,000 per annum or to whom any
               Vendor is  required  to give more than  three  months'  notice to
               terminate  the  employment  without  cause  are  annexed  to  the
               Disclosure   Letter.  In  relation  to  all  other   Transferring
               Employees a pro forma pack incorporating standard form statements
               of  particulars  of employment  and other  written  statements of
               employment  benefits  is annexed to the  Disclosure  Letter,  the
               salary or wages of such other Transferring  Employees being shown
               in the Schedule referred to in paragraph 11.1 above.

     11.5      No  employee  employed in a  managerial  or senior  technical  or
               senior  sales  position  has since 1st July 1996  terminated  his
               employment or had such employment terminated and no such employee
               has given or has been given notice to terminate his employment.

     11.6      Within the last year the Vendors have not  experienced any labour
               disputes  or  any  work  stoppage  or  slow-down  due  to  labour
               disagreements  which  have had a material  adverse  effect on the
               Activities.

     11.7      There are no loans outstanding from the Vendor or the Lucas Group
               to  any  of  the  Transferring  Employees  or  from  any  of  the
               Transferring Employees to the Vendor or the Lucas Group.

     11.8      The Vendors  have not  operated a severance  policy in respect of
               the US Activity providing for payments to be made to employees of
               the US  Activity  where  their  employment  is  transferred  to a
               purchaser of a US business or part thereof.


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<PAGE>

12.  Financial Statements

     12.1      The  summary  profit and loss  accounts,  cash flows and  balance
               sheets of the Vendors in relation to the  Activities for the year
               ended 31 July 1996 and the 6 months ended on the Accounting Date,
               as  described  in  certificates   issued  by  Ernst  &  Young  to
               LucasVarity   on  13th   February   1997  and  9th   April   1997
               respectively:-

               12.1.1    fairly  present in all material  respects the financial
                         position and assets and  liabilities  of the Vendors in
                         relation  to the  Activities  as at 31st  July 1996 and
                         31st  January 1997 (as the case may be) and the summary
                         profit  and  loss   accounts  and  cash  flows  of  the
                         Activities for the respective periods then ended; and

               12.1.2    have  been   prepared  in  all  material   respects  in
                         accordance  with  United  Kingdom  generally   accepted
                         accounting policies.

     12.2      The audited  financial  statements of Lucas Limited,  which is an
               indirect Subsidiary of Lucas Industries plc, for the period ended
               31st July  1996 (a copy of which is  attached  to the  Disclosure
               Letter)  give a true and fair  view of the  state of  affairs  of
               Lucas  Limited  as at 31st July  1996 and the net asset  value of
               Lucas  Limited as at 31 January 1997 was not less than  (pound)54
               million.

13.  Grants

     No  governmental  or other  material  grants have been made in the last six
     years to any Vendor in relation to the Activities which are repayable.

14.  Insurance

     14.1      Brief particulars of all the Vendors"  insurances relating to the
               Activities are set out in the Disclosure Letter.

     14.2      There is no insurance claim  (excluding  employee  welfare claims
               and  employer's  liability  claims) made by any Vendor pending or
               outstanding relating to the Assets or the Transferring Employees.


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<PAGE>

15.  Insolvency

     15.1      No  petition  has been  presented,  no order has been made and no
               resolution has been passed for the winding-up of the Vendors,  no
               administrative   receiver,   receiver  and/or  manager  has  been
               appointed of the whole or any part of the property of the Vendors
               relating to the Activities, no administration order has been made
               appointing an  administrator or trustee in respect of the Vendors
               and no petition has been presented for an administration order or
               filed under the U.S.  Bankruptcy Code or any other insolvency law
               in respect of the Vendors.

     15.2      None of the Assets which is material to the  Activities  has been
               acquired by the English  Vendor,  Lucas  Industries  plc or Lucas
               Automation & Control Engineering Limited in the 2 years preceding
               Completion from another member of the Lucas Group or from another
               Business Unit at an undervalue.

16.  Vendors capacity and organisation

     16.1      The  Vendors  have  taken  all  necessary  action,  corporate  or
               otherwise,  to enter into this Agreement and the Sale  Agreements
               and to complete the sale of the Activities  contemplated thereby.
               This  Agreement has been duly and validly  executed and delivered
               by the Vendors and  constitutes a valid and binding  agreement of
               the Vendors, enforceable in accordance with its terms, subject to
               bankruptcy,  insolvency,  reorganisation or similar laws relating
               to  creditors'  rights  generally.  The Sale  Agreements  will be
               validly  executed and delivered by the relevant Vendors and, when
               delivered,  will  constitute  binding  agreements of the relevant
               Vendors, enforceable as aforesaid.

     16.2      Each Vendor is a corporation duly organised, validly existing and
               in good standing under the laws of the jurisdiction in which each
               Vendor was incorporated and has the requisite corporate authority
               and  power  to  carry  on  the  relevant  Activity  as  currently
               conducted by that Vendor.


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<PAGE>


     16.3      Neither the execution and delivery of this Agreement and the Sale
               Agreements nor the sale of the Activities thereunder will:-

               16.3.1    violate or conflict with any provisions of the Articles
                         of Association, Articles of Incorporation or Bylaws, or
                         such  equivalent   thereof,  of  the  Vendors,  or  any
                         statute, code, ordinance,  rule, regulation,  judgment,
                         order,  writ,  decree or  injunction  applicable to the
                         Vendors  (other than any requiring  consent or approval
                         to the sale of the  Activities  to the  Purchaser to be
                         obtained from any governmental body or authority); or

               16.3.2    violate, or conflict with, or result in a breach in any
                         provision   of,  or  constitute  a  default  under  any
                         contract to which the Vendors are party  (excluding the
                         Contracts)  or  result  in the  creation  of any  lien,
                         security interest, charge or other encumbrance upon any
                         of the properties or assets of the Vendors

               which would in any such case materially affect the ability of the
               Vendors to perform their obligations under this Agreement and the
               Sale Agreements.

17.  Consents

     To the best of the Vendors' knowledge no consent, approval or authorisation
     of, or declaration or filing with, any  governmental  authority is required
     on the part of the Vendors in connection  with the  execution,  delivery or
     performance of this Agreement, except for :-

     17.1      filings  with the  Federal  Trade  Commission  and the  Antitrust
               Division   of  the   Department   of  Justice   pursuant  to  the
               Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;


                                       77
<PAGE>

     17.2      Post-Merger   Notification   with  the  Federal   Cartel   Office
               (Bundeskartellamt)   in  Berlin   pursuant  to  the  Act  against
               Restraint   on   Competition   (Antitrust   Act;   Gesetz   gegen
               Wettbewerbsbeschrankungen of 1957 as amended); and

     17.3      local recordings of deeds.

18.  Broker's or Finder's Fee

     Except for the fees  payable  to Coopers & Lybrand  for acting on behalf of
     the Lucas Group in the sale of the Activities, no agent, broker, investment
     banker or firm  acting on behalf of the Vendors or under the  authority  of
     the Vendors is or will be entitled to any  broker's or finder's  fee or any
     other  commission or similar fee from any of the Vendors in connection with
     any of the transactions contemplated hereby.

19.  Related Party Transactions

     Neither the Lucas Group, nor any director or officer of the Lucas Group, is
     currently  a party to any  transaction  with the  Vendors  (other  than for
     services  as  employees,   officers  and  directors),   including   without
     limitation any contract,  agreement or other arrangement  providing for the
     furnishing  of services to or by,  providing for rental of real or personal
     property  to or from,  or  otherwise  requiring  payments  to or from,  the
     Vendors in connection  with the operation of the  Activities,  save for any
     transaction, contract, agreement or other arrangement which is not material
     to the Activities  taken as a whole and for the Group Sharing  Arrangements
     (as defined in the Sale Agreements).


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<PAGE>

                          PART B. THE ENGLISH ACTIVITY


1.   Pensions

     1.1       The Vendor is under no legal liability or voluntary commitment to
               pay or make provision for payment of any pension, superannuation,
               death benefit or other similar  benefit in respect of any English
               Transferring   Employee   or   to   contribute   to  a   pension,
               superannuation  or life  assurance  scheme  other  than the Lucas
               Pension Scheme in respect of any English Transferring Employee.

     1.2       No proposal has been announced or made to amend the Lucas Pension
               Scheme  in  any  way  that  could   affect  any  of  the  English
               Transferring  Employees  or to enter into any legal  liability or
               voluntary  commitment  of the type  described  in  paragraph  1.1
               above.

     1.3       Full and  accurate  details of the Lucas  Pension  Scheme (to the
               extent  that it relates to the  English  Transferring  Employees)
               have been given to the Purchaser, including the following:-

               1.3.1     copies of all current formal documentation governing or
                         relating to that scheme;

               1.3.2     a  copy  of  the  current  members  booklet  and of all
                         announcements  the  terms of which  are not  fully  and
                         accurately  incorporated  into the  documents  provided
                         under paragraph 1.3.1 above;

               1.3.3     copies of the most recent trustees report and accounts;

               1.3.4     all  data  necessary  for   ascertaining   the  current
                         liabilities  of the Lucas Pension  Scheme in respect of
                         the Members including (without limitation) their names,
                         ages,  sexes,   pensionable  salaries  and  pensionable
                         service (actional or notional), details of any transfer
                         credits and special or augmented benefits and


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<PAGE>

                         details of any  agreed or  proposed  transfer  payments
                         into or out of the Lucas Pension  Scheme that relate to
                         any of the Members;

               1.3.5     details  of any other  benefits  of which the Vendor or
                         the Lucas Pension  Scheme has been made aware and which
                         are or  may  be  relevant  to  the  calculation  of any
                         statutory  limitation  of benefits in respect of any of
                         the Transferring Employees;

               1.3.6     details of all  contributions  and  premiums  currently
                         payable or being paid by and in respect of the Members;

               1.3.7     copies of current contracting-out certificates; and

               1.3.8     copies of written confirmation from the Pension Schemes
                         Office  for the  Inland  Revenue  of the Lucas  Pension
                         Scheme's status as an exempt-approved scheme within the
                         meaning  of section  592 of the Income and  Corporation
                         Taxes Act 1988.

     1.4       No discretion or power has been exercised under or in relation to
               the Lucas Pension Scheme to:-

               1.4.1     augment the  benefits  for or in respect of any Member;
                         and

               1.4.2     provide any  benefits  in relation to any Member  which
                         are   different   from  those   provided   for  in  the
                         documentation disclosed under paragraph 1.3 above.

     1.5       There are no actions,  suits,  claims  investigations  or Pension
               Ombudsman  complaints  (apart from  routine  claims for  benefits
               arising  otherwise  than under Article 119 of the Treaty of Rome)
               outstanding,  pending or  threatened  against  the Lucas  Pension
               Scheme or against the Vendor or any connected person or any other
               participating employer in the Lucas Pension Scheme in relation to
               any  English  Transferring  Employee  and in  respect of any act,
               event,  omission or other matter  arising out of or in connection
               with the Lucas Pension  Scheme and so far as the Vendor is aware,
               there are no


                                       80
<PAGE>

               circumstances which may give rise to any such action, suit, claim
               investigation or Pensions Ombudsman complaint.

     1.6       There are no  contributions  or premiums due to the Lucas Pension
               Scheme in relation  to any of the  Members  which have fallen due
               but are unpaid.

     1.7       The Lucas Pension Scheme is an exempt  approved scheme within the
               meaning of section  592 of the Income and  Corporation  Taxes Act
               1988 and is a  contracted-out  scheme (as defined in section 7(3)
               of the  Pension  Schemes Act 1993) and the Vendor is not aware of
               any reason why such exempt  approval may or could be withdrawn or
               which may or will result in the Lucas Pension  Scheme  ceasing to
               be a  contracted-out  scheme or in the  surrender or variation of
               any contracting-out certificate which relates to the Members.

     1.8       There are no English Transferring  Employees who would, had their
               contractual  hours of employment been different at any time, been
               eligible for the membership of the Lucas Pension Scheme.

     1.9       In this  paragraph 1 "Member" has the same meaning as in Schedule
               7 to the English Sale Agreement.

2.   Property and environment

     To the best of the Vendor's  knowledge  and belief the replies given on the
     Vendor's behalf by the Vendors' UK Solicitors to the pre-contract enquiries
     in  respect of the  English  Property  and the  pre-contract  enquiries  in
     respect of  environmental  issues affecting the English Property (copies of
     which are annexed to the  Disclosure  Letter)  are correct in all  material
     respects.

3.   Fair Trading

     3.1       No agreement,  transaction,  practice or arrangement entered into
               or carried on, or  proposed to be entered  into or carried on, by
               the Vendor in respect of the Activity:-


                                       81
<PAGE>

               3.1.1     is being or has been  registered by the Vendor,  nor as
                         far as the  Vendor  is aware  by any  third  party,  in
                         accordance with the provisions of the Restrictive Trade
                         Practices Acts 1976 and 1977;

               3.1.2     is being or has been notified by the Vendor, nor as far
                         as the  Vendor is aware by any third  party,  to the EC
                         Commission  ("the  Commission") by reason of Article 85
                         of  the  Treaty   establishing  the  European  Economic
                         Community; or

               3.1.3     so far as the  Vendor  is  aware,  is or has  been  the
                         subject  of an  enquiry,  investigation,  reference  or
                         report under the Fair Trading Act 1973, the Competition
                         Act 1980,  Article 85 or 86 of the Treaty  establishing
                         the European Economic Community or by the Commission or
                         any other regulatory or judicial authority,  whether in
                         the United Kingdom or elsewhere.

     3.2       The  Vendor  has  not in  relation  to  the  Activity  given  any
               assurances or undertaking to the Restrictive Practices Court, the
               Director  General of Fair  Trading,  the  Secretary  of State for
               Trade and Industry,  the Commission or Court of First Instance or
               Court of Justice of the European Communities,  or any other court
               or similar person or body.

4.   General Taxation Matters

     4.1       The Vendor is not in relation to the Activity  liable as agent or
               lessee for any taxation liability of another person.

     4.2       No  taxation   authority   has  agreed  to  operate  any  special
               arrangement  (being an arrangement which is not based on a strict
               and  detailed  application  of  the  relevant  legislation  or on
               generally published statements of practice or generally published
               extra-statutory concessions) in relation to the Activity.

     4.3       There is set out in the Disclosure  Letter with express reference
               to  this  Warranty  the  aggregate   residue  of  expenditure  or
               written-down value


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<PAGE>

               attributable  to such of the  Assets on which an  entitlement  to
               industrial  building  allowances  has  arisen  under the  Capital
               Allowances Act 1968 or the Capital Allowances Act 1990.

     4.4       None of the  English  Assets  are long life  assets as defined in
               section 38A of the Capital Allowances Act 1990.

     4.5       None of the English  Assets is subject to an  outstanding  Inland
               Revenue  charge as  defined in section  237  Inheritance  Tax Act
               1984.

     4.6       No circumstances exist, or but for section 204(6) Inheritance Tax
               Act  1984  would  exist,  such  that a  power  of sale  could  be
               exercised  in relation to any of the English  Assets  pursuant to
               section 212  Inheritance  Tax Act 1984  (contingent  liability of
               transferee for unpaid capital transfer tax or inheritance tax).

     4.7       The Vendor is not liable to taxation  in respect of the  Activity
               in any country other than the United Kingdom.

5.   Value Added Tax

     5.1       The Vendor is a registered and taxable person for the purposes of
               the Value Added Tax Act 1994.

     5.2       The Vendor has not made any  supplies in respect of the  Activity
               in the last 3 years that are exempt supplies.

     5.3       The Vendor is not approved for the purposes of the Customs Duties
               (Deferred   Payment)   Regulations  1976  (deferral  of  duty  on
               imports).

     5.4       There is set out in the Disclosure  Letter with express reference
               to this  Warranty  full details of each of the English  Assets to
               which  Regulations  112-116  of Part XV of the  Value  Added  Tax
               Regulations  1995  (adjustments to the deductions of input tax on
               capital items) apply or will apply, including in particular:-


                                       83
<PAGE>

               5.4.1     a  description  (including  in the  case  of  land or a
                         building  or  part of a  building,  the  nature  of the
                         tenure and the time it has to run),  the date the first
                         interval  commenced  and the input  tax on the  capital
                         items; and

               5.4.2     the  proportion  of input tax for which credit has been
                         claimed (whether provisionally or finally in a tax year
                         and stating which).

     5.5       The Vendor has not  exercised  the  election  to waive  exemption
               under  paragraph  2 of  Schedule  10 Value  Added Tax Act 1994 in
               respect of the English Property.

6.   Taxation and Employees

     6.1       The Vendor has received no notifications or notices under section
               166 ICTA 1988  (benefits in kind:  notices of nil  liability)  in
               relation to the Activity.

     6.2       The Vendor does not operate any scheme  registered  under Chapter
               III of Part V ICTA 1988 (profit related pay).

     6.3       No  officer  or  employee  of the  Vendor  who is  engaged in the
               Activity  participates  in any scheme  approved  under Schedule 9
               ICTA 1988 (approved  share option and profit sharing  schemes) or
               is  a  beneficiary  or  potential  beneficiary  of  a  qualifying
               employee share  ownership  trust as defined in Schedule 5 Finance
               Act 1989 (employee share ownership trusts).

     6.4       The Vendor has properly operated the PAYE system deducting income
               tax and national  insurance  contributions  as required  from all
               payments  to or  treated  as  made  to the  English  Transferring
               Employees and has punctually  accounted to the Inland Revenue and
               the Department of Social Security for all taxation deducted.  The
               Vendor  has  maintained  and  retained  such  books  and  records
               relating to PAYE and to national insurance contributions as it is
               required to maintain and retain.


                                       84
<PAGE>

                             PART C. THE US ACTIVITY

1.   Employee Benefit Plans

     1.1       The  Disclosure  Letter  contains a true and complete list of all
               material written and oral, formal and informal,  annuity,  bonus,
               cafeteria, stock option, stock purchase, profit sharing, savings,
               pension,  retirement,  incentive,  group  insurance,  disability,
               employee   welfare,   prepaid   legal,   non-qualified   deferred
               compensation including, without limitation, excess benefit plans,
               top-hat plans,  deferred bonuses,  rabbi trusts,  secular trusts,
               non-qualified   annuity   contracts,    insurance   arrangements,
               non-qualified  stock  options,  phantom  stock  plans,  or golden
               parachute payments or other similar fringe benefit plans, and all
               other employee  benefit finds or programs  (within the meaning of
               Section 3(3) of ERISA),  covering employees,  former employees or
               directors  of  the  Vendor  with  respect  to the  Activity  (the
               "Plans").  Except as set out in the Disclosure Letter, the Vendor
               is not a party to any material employee agreement, understanding,
               plan, policy, procedure or arrangement,  whether written or oral,
               which provides  compensation  or fringe benefits to its employees
               engaged or formerly  engaged in the  operation of the Activity or
               which  applied to former  employees of Vendor who were engaged in
               the Activity, and the Vendor is in compliance with its respective
               obligations under all such Plans.  Except for changes required by
               applicable law, there are no negotiations,  demands,  commitments
               or proposals that are pending or that have been made that concern
               matters  now  covered,  or that  would be  covered by the type of
               agreements  described on the Disclosure  Letter or this paragraph
               1.1. The Vendor has no direct or indirect,  actual or contingent,
               material  liability for any Plan, other than to make payments for
               contributions,  premiums  or  benefits  when  due,  all of  which
               payments have been timely made. None of the US Assets are subject
               to any lien or security  interest under Section


                                       85
<PAGE>

               302(f),  306(a),  307(a) or 4068 of ERISA or Section  401(a)(29),
               412(n) or 6321 of the Code.

     1.2       With  respect  to  each  employee  benefit  plan  listed  in  the
               Disclosure  Letter,  true  and  complete  copies  of (i) all Plan
               documents  (including all amendments and  modifications  thereof)
               and related agreements  including without  limitation,  the trust
               agreement  and  amendments   thereto,   insurance  contracts  and
               investment management agreements;  (ii) the last three filed Form
               5500 series and  Schedules A, B, C, P and/or SSA, as  applicable,
               and Forms PBGC-1, if any; (iii) summary plan  descriptions;  (iv)
               summary of material  modifications,  if any;  (v) the most recent
               auditor's  report,  if  any,  and  copies  of  any  and  all  tax
               qualification   correspondence   including  without   limitation,
               private  letter  rulings,   applications  for  determination  and
               determination  letters issued with respect to the Plans; and (vi)
               the most recent  annual and periodic  accounting  of related Plan
               assets, have also been delivered to the Purchaser.

     1.3       With respect to the Plans listed in the  Disclosure  Letter which
               are subject to ERISA:

               1.3.1     none of the  Plans  is a  "multiemployer  plan" as that
                         term is defined in Section  3(37) of ERISA and  Section
                         411(f) of the Code, nor a plan  maintained by more than
                         one employer  (hereinafter  referred to as an "multiple
                         employer  plan"),  nor a single  employer  plan under a
                         multiple controlled group within the meaning of Section
                         4063 of ERISA, and neither of the Vendor nor any entity
                         required to be aggregated with the Vendor under Section
                         414(b),  (c),  (m) or (o) of the Code has  incurred any
                         withdrawal  liability  with respect to any single plan,
                         multiemployer   or  multiple   employer   plan,   which
                         liability   could   constitute   a  liability   of  the
                         Purchaser; and


                                       86
<PAGE>


               1.3.2     no  benefit  claims  (except  those  submitted  in  the
                         ordinary  course of  administration  of such  Plan) are
                         currently pending against any Plan.

2.   Real Property

     2.1       Schedule  3 to the US  Sale  Agreement  contains  a  correct  and
               complete list of all real property that is owned by the Vendor in
               connection  with the conduct of the Activity.  Such real property
               is  hereinafter  referred  to the  "US  Real  Property"  and  the
               improvements and fixtures thereon are hereinafter  referred to as
               the  "Improvements".  The  Disclosure  Letter sets forth the most
               recent title  commitments  and ALTA survey with respect to the US
               Real Property.

     2.2       The Disclosure Letter contains a correct and complete list of the
               real  property  that the Vendor  leases (as lessee) in connection
               with the  Activity.  Such  leased real  property  is  hereinafter
               referred to as the "US Leased Property", and the improvements and
               fixtures therein owned by the landlord of each US Leased Property
               are hereinafter referred to as the "Leased Improvements".

     2.3       Except as set out in the  Disclosure  Letter,  the  Vendor is the
               sole  legal  and  equitable  owner of the US Real  Property,  the
               Improvements  and all interests  therein and  possesses  good and
               marketable  title to the US Real  Property  and the  Improvements
               good of record  and in fact,  free and  clear of all  conditions,
               exceptions,  reservations,  liens,  restrictions,  rights of way,
               easements,  encumbrances and other matters affecting title except
               such matters  which could in no way  adversely  affect the use of
               the Real Property.  Except as set out in the  Disclosure  Letter,
               the Vendor is the sole legal and equitable owner of the leasehold
               interest in the Leased Property and the Leased  Improvements.  To
               the  best  of  the  Vendor's   knowledge   (without   enquiry  or
               investigation)  and except as set forth in the Disclosure Letter,
               the Vendor possesses valid leasehold interest and leasehold title
               to the US Leased Property and the Leased Improvements. The Vendor
               has received


                                       87
<PAGE>

               no notice of default  under the leases of the US Leased  Property
               or notice of a defect in title to its leasehold tenancy or notice
               of any conditions, exceptions, reservations, liens, restrictions,
               rights  of  way,   easements,   encumbrances  and  other  matters
               affecting  title to such  leasehold that could impair the ability
               of the Vendor to realise the  benefits of the rights  provided to
               it under its lease as such rights are  currently  utilised in the
               conduct  of the  business  of the  Vendor  consistent  with  past
               practice.

     2.4       There are no adverse or other  parties  in  possession  of the US
               Real  Property,  the  Improvements  or any  portion  or  portions
               thereof,  and on the Completion Date the US Real Property and the
               Improvements  will  be free  and  clear  of any  and all  leases,
               licensees,  occupants  or  tenants  except  as  set  out  in  the
               Disclosure Letter. To the best of the Vendor's  knowledge,  there
               are no adverse parties in possession of the US Leased Property or
               the Leased Improvements, and on the Completion Date the leasehold
               interest in the US Leased  Property  and the Leased  Improvements
               will be free and clear of any and all leases, licences, occupants
               or tenants except as set forth in the Disclosure  Letter.  To the
               knowledge of the Vendor (without enquiry or investigation), there
               are no  pending or  threatened  condemnation,  eminent  domain or
               similar proceedings, or litigation or other proceedings affecting
               the US Real Property, the Improvements or any portion or portions
               thereof.  To the  knowledge  of the  Vendor  (without  enquiry or
               investigation),  there are no pending  requests,  applications or
               proceedings  to  alter  or  restrict  any  zoning  or  other  use
               restrictions   applicable   to  the  US  Real   Property  or  the
               Improvements  that  would  interfere  with  the  conduct  of  the
               Activity   or  the  use  of  the  US   Assets   consistent   with
               past-practice,  which  interference would have a material adverse
               effect  on the  Activity.  Except  as set  out in the  Disclosure
               Letter,  to the  knowledge  of the  Vendor  (without  enquiry  or
               investigation),  all  water,  sewer,  gas,  electric,  telephone,
               drainage and other  utility  equipment,  facilities  and services
               required  by  law  or   necessary   for  the   operation  of  the
               Improvements  are  installed  and  connected  pursuant  to  valid
               permits and no notice has been  received by the Vendor  regarding
               the termination or material impairment of


                                       88
<PAGE>

               any such service.  All necessary  easements exist and are in full
               force and effect.  The US Real Property has access, in accordance
               with  past  practice,  to and from a public  right of way or road
               dedicated  for public use and no notice has been  received by the
               Vendor   relating  to  the  termination  or  impairment  of  such
               access(including applicable parking requirements).

3.   Environmental Matters

     As used in this Part C of this Schedule  "Hazardous  Material"  shall mean:
     (i) any  "hazardous  substance" as now defined  pursuant to the CERCLA,  42
     U.S.C.  S.  9601(14),   or  any  substance  listed  or  identified  by  any
     characteristic  in any regulation  adopted pursuant to any statute referred
     to or  incorporated  into  such  definition,  all as in  effect on the date
     hereof;  (ii) any petroleum,  including crude oil and any fraction thereof;
     (iii) natural gas, natural gas liquids, liquefied natural gas, or synthetic
     gas useable for fuel; (iv) any "hazardous  chemical" as defined pursuant to
     29  C.F.R.  Part  1910;  and (v)  any  asbestos,  polychlorinated  biphenyl
     ("PCB"), or isomer of dioxin.

     3.1       There is no Hazardous Material in, under or migrating from the US
               Real Property  which would be reasonably  likely to result in any
               material  liabilities  under  Environmental  Laws (as  defined in
               paragraph 3.2 below).

     3.2       The Vendor has no  material  liability,  matured or not  matured,
               absolute or contingent,  assessed or unassessed, imposed or based
               upon any  provision  under any foreign,  federal,  state or local
               law, rule, or regulation or common law, or under any code, order,
               decree,  judgment  or  injunction  applicable  to the  Vendor  in
               connection with the Activity, nor in connection with the Activity
               has the Vendor  received any notice,  or request for  information
               issued, promulgated, approved or entered thereunder, or under the
               common law, or any tort,  nuisance or absolute  liability theory,
               relating to public health or safety,  worker health or safety, or
               pollution,  damage to or protection of the environment  including
               without  limitation,  laws  relating  to  emissions,  discharges,
               releases or  threatened  releases of Hazardous  Material into the
               environment  (including without limitation,  ambient air, surface
               water,  groundwater,  land  surface or  subsurface)  or otherwise
               relating to the


                                       89
<PAGE>

               manufacture,  processing,  distribution, use, treatment, storage,
               generation,  disposal,  transport  or handling  of any  Hazardous
               Material (hereinafter  collectively referred to as "Environmental
               Laws"),  which  notice or request  for  information  would have a
               material adverse effect on the Vendor or the Activity.

     3.3       The  Vendor  possesses  and  is in  compliance  in  all  material
               respects with all permits, licenses, certificates, franchises and
               other authorisations relating to the Environmental Laws necessary
               to conduct the  Activity or otherwise  required by  environmental
               regulations in connection with the Activity.

     3.4       The Vendor has not, in  connection  with the Activity  during the
               past five (5) years, been subject to any material civil, criminal
               or  administrative  action,  suit,  claim,  hearing,   notice  of
               violation,  investigation,  inquiry or proceeding  for failure to
               comply  with,  or received  notice of any  material  violation or
               potential material liability under the Environmental Laws, nor is
               the Vendor aware of any information,  whether or not confirmed or
               reported, which could give rise to any such potential liability.

     3.5       No real  property,  site or facility  (as  defined in CERCLA,  42
               U.S.C.  S.9601(9))  owned or operated by the Vendor in connection
               with the  Activity is (i) listed or  proposed  for listing on the
               National  Priority  List (or  (ii)  listed  on the  Comprehensive
               Environmental  Response,   Compensation,   Liability  Information
               System List ("CERCLIS")  promulgated  pursuant to CERCLA,  or any
               comparable  list  maintained  by  any  foreign,  state  or  local
               government authority.

     3.6       There are no  underground  storage tanks owned or operated by the
               Vendor  in  connection   with  the  Activity  which  are  not  in
               substantial compliance with Environmental Laws, and any prior use
               and operation of  underground  storage tanks owned or operated by
               the Vendor in connection with the Activity has been in compliance
               with all Environmental Laws.


                                       90
<PAGE>

     3.7       The  Vendor has  provided  to the  Purchaser  an  opportunity  to
               inspect its facilities, review and copy documents, and the Vendor
               has delivered to the Purchaser true,  complete and correct copies
               of results of any  reports,  together  with  supporting  studies,
               analyses  and  tests in the  possession  of or  initiated  by the
               Vendor pertaining to the existence of Hazardous  Material and any
               other environmental concerns relating to any of their facilities,
               on  sites  or real  property  owned,  leased,  operated,  used or
               controlled  by the Vendor in  connection  with the  Activity,  or
               concerning  compliance with or liability under the  Environmental
               Laws.

     3.8       There are no PCBs in or at any premises owned,  leased,  operated
               or controlled by the Vendor in connection with the Activity which
               are in  violation  of any  Environmental  Laws,  and the Vendor's
               prior use, handling,  storage,  transport or disposal of PCBs has
               been in compliance with all Environmental Laws.

     3.9       There is no friable asbestos or asbestos containing  materials on
               or in the  properties  and  assets  owned,  leased,  operated  or
               controlled by the Vendor in connection with the Activity which is
               in violation of any Environmental Laws and the facilities on such
               properties are in substantial  compliance with the  Environmental
               Laws including but not limited to, Occupational Safety and Health
               Act regulations with respect to ambient air exposure to asbestos.

     3.10      The Vendor has not, by contract,  agreed to assume the  liability
               of  any  other   person  or  entity   pursuant   to  any  of  the
               Environmental Laws.

4.   Tax Matters

     4.1       There have been timely  filed by the Vendor with the  appropriate
               Taxing  Authority  all Tax  Returns  required  to be  filed on or
               before the Completion Date, and all such Tax Returns were correct
               and complete in all respects.

     4.2       The Vendor has paid in full all Taxes, if any, shown to be due on
               any Tax Return  required to be filed on or before the  Completion
               Date or  otherwise  has  reserved for or paid all other Taxes due
               for all periods up to and


                                       91
<PAGE>

               including the date hereof,  and at the Completion Date shall have
               paid or reserved  for all Taxes  allocable to periods or portions
               thereof  ending on or before the  Completion  Date. All Taxes for
               the periods  covered by the Tax  Returns  filed or to be filed by
               the Vendor,  or if not covered by a Tax return but required to be
               paid, have been or will be paid when due.

     4.3       The  representations  and warranties set forth in subsections 4.1
               and 4.2 of this  paragraph 4 are not applicable to the extent the
               US Assets and  Activity  cannot be made  subject to tax liens and
               the  Purchaser  cannot be made  liable for Taxes  relating to the
               matters   constituting   breaches  of  such  representations  and
               warranties.

     4.4       There are no liens for Taxes upon the  Activity  or any of the US
               Assets except liens for current Taxes not yet due and payable.

     4.5       None of the US Assets is property which is required to be treated
               as being  owned by any  other  person  pursuant  to the so called
               "safe harbor lease" provisions of former Section 168(f)(8) of the
               Code.

     4.6       None  of  the  US  Assets  are  currently  financed  directly  or
               indirectly by any tax exempt bonds.

     4.7       None of the US Assets is "tax  exempt  use  property" within the
               meaning of Section 168(h) of the Code.

     4.8       Neither the Vendor nor any of the  stockholders of the Vendor are
               foreign persons within the meaning of Section 1445 of the Code.

     4.9       There is no material  action,  suit,  proceeding,  investigation,
               audit or claim now pending,  proposed or  threatened  against the
               Vendor  with  respect to the  Activity or any of the US Assets in
               respect  of any Tax,  and no  matter  under  discussion  with any
               Taxing  Authority  relating to any material Tax or  assessment or
               any claim for  additional  Tax,  asserted  by any such  Authority
               against the Vendor with  respect to the Activity or any of the US
               Assets.

 

                                       92
<PAGE>


    4.10      All Taxes that are  required  to be withheld  or  collected  with
               respect to the Activity  have been duly  withheld  and  collected
               and, to the extent required, have been properly paid or deposited
               as required by applicable laws.

     4.11      The Vendor  has no  liability  for the Taxes of any other  person
               under Treas.  Reg. S.  1.1502-6  (or similar  provision of state,
               local,  or  foreign  law),  as  a  transferee  or  successor,  by
               contract, or otherwise, including indemnification obligations.

     4.12      The  Vendor  is not a party  to any  tax  allocation  or  sharing
               agreement,  other than the deemed tax sharing arrangement arising
               from the fact that the  Vendor  files a  consolidated  tax return
               with its parent.

     4.13      As used in this Part C of this  Schedule,  "Tax" means any of the
               Taxes and "Taxes" means (i) all income taxes  (including  any tax
               on or based  upon net  income,  or gross  income,  or  income  as
               specially defined, or earnings,  or profits, or selected items of
               income,  earnings or profits) and all gross receipts,  estimated,
               sales,   use,   ad   valorem,   transfer,   franchise,   license,
               withholding,   payroll,  employment,  excise,  severance,  stamp,
               occupation,   premium,   property  or  windfall   profit   taxes,
               environment,  alternative or add-on minimum taxes,  custom duties
               or  other  taxes,  fees,  assessments  or  charges  of  any  kind
               whatsoever,   together  with  any  interest  and  any  penalties,
               additions  to tax or  additional  amounts  imposed  by any Taxing
               Authority  whether disputed or not and (ii) any liability for the
               payment of any  amount of the Tax  described  in the  immediately
               preceding clause (I) as a result of being a "transferee"  (within
               the meaning of Section  6901 of the Code or any other  applicable
               law) of another person or successor,  by contract,  or otherwise,
               or a member of an affiliated,  consolidated,  unitary or combined
               group.

     4.14      As used in this Part C of this Schedule,  "Tax Return" is defined
               as any  return,  report,  information  return  or other  document
               (including  any  related  or  supporting  information)  filed  or
               required to be filed with any  federal,  state,  local or foreign
               governmental   entity  or  other   authority   (individually   or
               

                                       93
<PAGE>


               collectively  a  "Taxing   Authority")  in  connection  with  the
               determination,  assessment  or  collection of any Tax (whether or
               not such Tax is imposed on the Vendor) or the  administration  of
               any laws, regulations or administrative  requirements relating to
               any Tax.

5.   Absence of Questionable Payments

     To  the  knowledge  of  the  Vendor,  neither  the  Vendor  nor  any of its
     respective  directors,  officers,  agents,  employees or any other  persons
     acting  on their  behalf  has,  in  connection  with the  operation  of the
     Activity:-

     5.1       used any  corporate  or other funds for  unlawful  contributions,
               payments,   gifts  or   entertainment,   or  made  any   unlawful
               expenditures   relating  to  political   activity  to  government
               officials or others or  established or maintained any unlawful or
               unrecorded  funds in  violation  of  Section  104 of the  Foreign
               Corrupt  Practices  Act  of  1977,  as  amended,   or  any  other
               applicable foreign, federal or state law; or

     5.2       accepted  or  received  any  unlawful  contributions,   payments,
               expenditures or gifts.


                                       94
<PAGE>


                           PART D. THE GERMAN ACTIVITY

1.   Pensions

     The Vendor is under no legal  liability or voluntary  commitment  to pay or
     make provision for payment of any pension, superannuation, death benefit or
     other similar benefit in respect of any German Transferring  Employee or to
     contribute to a pension, superannuation or life assurance scheme other than
     the pension promises in their  individual  agreements of employment as well
     as the statutory social security  contributions  for pensions in respect of
     any German Transferring Employee.

2.   Fair Trading

     2.1       No agreement,  transaction,  practice or arrangement entered into
               or carried on, or  proposed to be entered  into or carried on, by
               the Vendor in respect of the Activity:-

               2.1.1     is being or has been notified by the Vendor, nor as far
                         as the  Vendor is aware by any third  party,  to the EC
                         Commission  ("the  Commission") by reason of Article 85
                         of  the  Treaty   establishing  the  European  Economic
                         Community;

               2.1.2     so far as the  Vendor  is  aware,  is or has  been  the
                         subject  of an  enquiry,  investigation,  reference  or
                         report  under  the  Trading  Act,  ("Gesetz  gegen  den
                         unlauteren  Wettbewerb")  the  Competition Act ("Gesetz
                         gegen Wettbewerbsbeschran-kungen") or by the Commission
                         or any other regulatory authority.

     2.2       The  Vendor  has  not in  relation  to  the  Activity  given  any
               assurances  or  undertaking  to the  Commission or Court or First
               Instance or Court of Justice of the European Communities,  or any
               other court or similar person or body.


                                       95
<PAGE>

3.   Taxation

     3.1       The  Vendor has filed or caused to be filed all  federal,  state,
               local and foreign tax returns  which are  required to be filed by
               it  especially as far as trade tax,  corporate  tax, wage tax and
               VAT is  concerned  and it has paid or caused to be paid all taxes
               as shown on the said returns for any  assessments  received by it
               to the extent that such tax would have become due.

     3.2       The  Vendor  has filed or caused  to be filed  all  returns  with
               regard to social security contributions and has withheld and paid
               all respective amounts as shown on the said returns.



                                       96
<PAGE>

                                   SCHEDULE 5

                     PURCHASER'S AND GUARANTOR'S WARRANTIES


1.   Organisation

     Each of the  Purchasers  and the Guarantor is a corporation  duly organised
     and validly existing and has all requisite corporate power and authority to
     own, lease and operate its  properties and business as presently  conducted
     and to  enter  into and  perform  its  obligations  under  the  Transaction
     Documents. The US Purchaser is in good standing under the laws of the State
     of Michigan.

2.   Corporate Authority

      The execution,  delivery and performance of the Transaction  Documents
      by the  Guarantor  and  the  Purchasers  and the  consummation  by the
      Guarantor  and  the  Purchasers  of  the   transactions   contemplated
      thereby have been duly  authorised by all requisite  corporate  action
      on the  part of the  Purchasers  and the  Guarantor.  The  Transaction
      Documents  have been or will be duly  executed  and  delivered  by the
      Guarantor  and the  Purchasers  where  they are  party to the same and
      constitute  the legal,  valid and binding  obligation of the Guarantor
      and the Purchasers  party thereto,  enforceable  against the Guarantor
      and the  Purchasers  in  accordance  with their  terms,  except to the
      extent that  enforceability  may be limited by applicable  bankruptcy,
      insolvency  or similar laws  affecting the  enforcement  of creditors'
      rights generally and subject to general principles of equity.

3.   Qualification

     Each of the  Guarantor  and the  Purchasers is entitled to do business as a
     foreign  corporation  in and is in good  standing  under  the  laws of each
     jurisdiction  in which the conduct of its business or the  ownership of its
     assets requires such qualification,  except where the failure so to qualify
     would  not have a  material  adverse  effect  on its  business,  assets  or
     financial condition.


                                       97
<PAGE>

4.   No Conflict

     Neither the execution or the delivery of any of the  Transaction  Documents
     by  the  Guarantor  and/or  the  Purchasers  nor  the  consummation  of the
     transactions  contemplated thereby will conflict with or result in a breach
     of any of the provisions  of, or constitute a default  under,  the charter,
     by-laws or Memorandum or Articles of  Association  of the Guarantor  and/or
     Purchasers,  as amended to date,  or any  agreement,  mortgage,  indenture,
     lease  or  other  instrument  to  which  any of the  Guarantor  and/or  the
     Purchasers is a party or by which any of the Guarantor or the Purchasers or
     its  property  is  bound,  or  result in the  violation  of any law,  rule,
     regulation,  order, judgment or decree to which any of the Guarantor or the
     Purchasers or its property is subject.

5.   Consents

     To the  best of the  knowledge  of the  Guarantor  and the  Purchasers,  no
     consent,  approval or authorisation  of, or declaration or filing with, any
     governmental  authority  is  required on the part of the  Guarantor  or the
     Purchasers in connection with the execution, delivery or performance of the
     Transaction  Documents by them,  except for filings with the Federal  Trade
     Commission  and the  Department  of  Justice  under  the  Hart-Scott-Rodino
     Antitrust  Improvements Act of 1976. No approval,  consent or authorisation
     of any  lender,  lessor  or other  person  is  required  in  order  for the
     Guarantor or the Purchasers to consummate the transactions  contemplated by
     the Transaction Documents.



                                       98
<PAGE>


                              SCHEDULE 6 (OMITTED)
                        INTELLECTUAL PROPERTY AGREEMENTS





                                       99
<PAGE>

                              SCHEDULE 7 (OMITTED)
                              THIRD PARTY CONSENTS



                                      100
<PAGE>

SIGNED by /s/ James Zigel
          --------------------
for and on behalf of LUCAS LIMITED
in the presence of:- Mary K. Krigbaum



SIGNED by /s/ James Zigel
          --------------------
for and on behalf of LUCAS AUTOMATION &
CONTROL ENGINEERING INC.
in the presence of:- Mary K. Krigbaum



SIGNED by /s/ James Zigel
          --------------------
for and on behalf of LUCAS AUTOMATION
AND CONTROL ENGINEERING GmbH
in the presence of:- Mary K. Krigbaum



SIGNED by /s/ James Zigel
          --------------------
for and on behalf of LUCAS INDUSTRIES plc
in the presence of:- Mary K. Krigbaum



SIGNED by /s/ James Zigel
          --------------------
for and on behalf of LUCAS AUTOMATION
& CONTROL ENGINEERING LIMITED
in the presence of:- Mary K. Krigbaum



SIGNED by   /s/ Bruce P. Erdel
          --------------------                            
for and on behalf of ASSEMBLY
TECHNOLOGY & TEST LIMITED
in the presence of:-  Rita Deckard



SIGNED by   /s/ Bruce P. Erdel
          --------------------                          
for and on behalf of ASSEMBLY
TECHNOLOGY & TEST, INC.
in the presence of:-  Rita Deckard


                                      101
<PAGE>

SIGNED by   /s/ Bruce P. Erdel
          --------------------                           
for and on behalf of ASSEMBLY
TECHNOLOGIE & AUTOMATION GmbH
in the presence of:-  Rita Deckard



SIGNED by   /s/ Bruce P. Erdel
          --------------------
for and on behalf of DT INDUSTRIES, INC.
in the presence of:-  Rita Deckard


                                      102
<PAGE>

     The  following   page  contains  a  list  of  Schedules   which  have  been
intentionally omitted by the Registrant pursuant to Item 601(b)(2) of Regulation
S-K.

     A copy of any  omitted  Schedule  will be provided  to the  Securities  and
Exchange Commission upon request.

<PAGE>

SCHEDULE 2            Accounting Principles
SCHEDULE 3   PART 1   Pro-forma draft Completion Statements and Aggregation
                      Statement
             PART 2   Allocation of purchase price
SCHEDULE 6            Intellectual Property Agreements
SCHEDULE 7            Third Party Consents