Exhibit 10.1



     STOCK PURCHASE AGREEMENT

     by and between

     BREED TECHNOLOGIES, INC.


     and


     SIEMENS AKTIENGESELLSCHAFT


     dated as of October 14, 1997




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     TABLE OF CONTENTS

                                                                            Page

Section 1.         Definitions and Principles of Construction................  1
         1.01      Defined Terms.............................................  1
         1.02      Principles of Construction................................  5
Section 2.         Sale and Purchase of Stock................................  5
         2.01      Sale and Purchase of Stock................................  5
         2.02      Purchase Price; Number of Shares to be Purchased..........  5
         2.03      Closing...................................................  5

Section 3.         Representations and Warranties of the Company.............  6
         3.01      Organization and Good Standing............................  6
         3.02      Authorization.............................................  6
         3.03      Enforceability............................................  7
         3.04      Approvals.................................................  7
         3.05      Capitalization............................................  7
         3.06      Subsidiaries..............................................  7
         3.07      Compliance with Laws and Orders...........................  8
         3.08      SEC Reports and Financial Statements......................  8
         3.09      Absence of Certain Changes or Events......................  9
         3.10      Absence of Undisclosed Liabilities........................  9
         3.11      Legal Proceedings.........................................  9
         3.12      Patents and Trademarks..................................... 9
         3.13      Taxes..................................................... 10
         3.14      Employee Benefit Plans.................................... 10
         3.15      Environmental............................................. 11
         3.16      Affiliate Transactions.................................... 11
         3.17      AlliedSignal Transaction...................................11
         3.18      Disclosure.................................................12
         3.19      Brokers....................................................12

Section 4.                 Representations and Warranties of Purchaser....... 12
         4.01      Investment Intent......................................... 12
         4.02      No Registration of Securities............................. 12
         4.03      Investor Status........................................... 12
         4.04      Authority to Execute and Perform Agreement................ 13
         4.05      Brokers................................................... 13
         4.06      Approvals................................................. 13

Section 5.         Covenants of the Company and Purchaser.................... 13
         5.01      Company................................................... 13
         5.02      Purchaser................................................. 15

Section 6.         Conditions Precedent to Obligations of Purchaser.......... 15

Section 7.         Conditions Precedent to Obligations of the Company........ 18

Section 8.         Notices................................................... 19

Section 9.         Survival of Representations and Warranties................ 20



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Section 10.                Indemnification................................... 20
         10.01     Indemnity by the Company.................................. 20
         10.02     Purchaser's Indemnity..................................... 21
         10.03     Procedure................................................. 21
         10.04     Basket and Cap Provisions................................. 23

Section 11.                Termination....................................... 23
         11.01     Termination............................................... 23
         11.02     No Liability.............................................. 24
         11.03     Notice.................................................... 24

Section 12.                Miscellaneous..................................... 24
         12.1      Amendment or Waiver....................................... 24
         12.2      Consent to Jurisdiction................................... 24
         12.3      Release of Siemens Aktiengesellschaft..................... 24
         12.4      Waiver of Jury Trial; Trial Costs......................... 25
         12.5      Assignment................................................ 25
         12.6      Entire Agreement.......................................... 25
         12.7      Expenses.................................................. 25
         12.8      Public Announcements...................................... 25


Schedule 3.02                 Authorization
Schedule 3.04                 Approvals for Company
Schedule 3.05(b)              Options
Schedule 3.06                 Subsidiaries
Schedule 3.08(a)              SEC Filings
Schedule 3.08(b)              Treatment of Subsidiaries on Financial Statements
Schedule 3.09                 Absence of Changes
Schedule 3.10                 Undisclosed Liabilities
Schedule 3.11                 Legal Proceedings
Schedule 3.12                 Intellectual Property
Schedule 3.14                 Employee Benefit Plans
Schedule 3.15                 Environmental Matters
Schedule 3.16                 Transactions with Affiliates
Schedule 3.17                 AlliedSignal Agreement
Schedule 4.06                 Approvals for Purchaser
Schedule 6(l)                 Financing Terms

Exhibit A                     Form of Certificate of Designations
Exhibit B                     Form of Make-Whole Agreement
Exhibit C                     Opinion of Special Counsel to the Company
Exhibit D                     Form of Registration Rights Agreement
Exhibit E                     Form of Stockholders Agreement
Exhibit F                     Opinions of Counsel to Purchaser




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     This STOCK  PURCHASE  AGREEMENT,  dated as of October 14,  1997,  is by and
between Breed Technologies,  Inc., a Delaware  corporation (the "Company"),  and
Siemens  Aktiengesellschaft,  a company  organized under the laws of the Federal
Republic of Germany ("Purchaser").

     WHEREAS,  the  Company  has  entered  into  an  agreement  to  acquire  the
automotive  safety restraints  business of AlliedSignal Inc. (the  "AlliedSignal
Acquisition");

     WHEREAS,  Purchaser  desires  to invest in the  Company  as a result and in
furtherance of the AlliedSignal Acquisition; and

     WHEREAS,  the Company and Purchaser  (through their respective  Affiliates)
intend to form a joint  venture  for the  worldwide  research,  development  and
marketing  of motor  vehicle  occupant  safety  restraint  systems  (the  "Joint
Venture");

     In  consideration  of the mutual  covenants and agreements set forth herein
and for  good and  valuable  consideration,  the  receipt  of  which  is  hereby
acknowledged, the parties agree as follows:

Section 1.                 Definitions and Principles of Construction.

     1.01  Defined  Terms.  As used in this  Agreement,  and unless the  context
requires a different meaning, the following terms have the meanings indicated:

     "Additional Shares" has the meaning set forth in Section 2.02(c).

     "Adjustment  Period"  means  the  period  beginning  on the  date  of  this
Agreement and ending six months after the date of the Closing.

     "Affiliate"  means any Person that directly or  indirectly,  through one or
more  intermediaries,  controls or is controlled  by or is under common  control
with the Person specified. For purposes of this definition,  control of a Person
means the power,  direct or  indirect,  to direct or cause the  direction of the
management and policies of such Person, whether by Contract or otherwise. In any
event, and without limitation of the previous  sentence,  any Person owning more
than fifty (50%) of the voting  securities of a second Person shall be deemed to
control that second Person.

     "Agreement" means this Agreement, as the same may be amended,  supplemented
or modified in accordance with the terms hereof.

     "AlliedSignal  Acquisition"  has the meaning  set forth in the  forepart of
this Agreement.

     "AlliedSignal Agreement" has the meaning set forth in Section 3.17.

     "Benefit Plan" has the meaning set forth in Section 3.14.

     "Best Price" means the Initial  Price Per Share less an amount equal to the
Initial Price multiplied by the Biggest Discount.

     "Biggest Discount" means the largest Stock Sale Discount.

     "Breed Stockholders" means Allen K. Breed, Johnnie Cordell Breed, A. Breed,
L.P. and J. Breed, L.P.




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     "Business  Day" means any day other  than a  Saturday  or a Sunday or a day
when commercial  banks are permitted or required by law to be closed in New York
City.

     "Certificate  of  Designations"  means a  Certificate  of  Designations  in
substantially the form attached hereto as Exhibit A.

     "Charter  Amendment"  means an amendment to the  Company's  Certificate  of
Incorporation  for the purpose of  increasing  the  maximum  number of shares of
Common Stock that the Corporation is authorized to issue to 75,000,000.

     "Claim Notice" has the meaning set forth in Section 10.03.

     "Closing" has the meaning set forth in Section 2.03(a).

     "Closing Date" shall mean the date on which the Closing occurs.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Common  Stock" means the Common  Stock of the Company,  $.01 par value per
share.

     "Company" means Breed Technologies, Inc.

     "Company Financial Statements" has the meaning set forth in Section 3.08.

     "Company Permits" has the meaning set forth in Section 3.07.

     "Company SEC Reports" has the meaning set forth in Section 3.08.

     "Damages" has the meaning set forth in Section 10.01.

     "ERISA" has the meaning set forth in Section 3.14.

     "Exchange Act" means the Securities  Exchange Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

     "Governmental  or  Regulatory   Authorities"  means  any  court,  tribunal,
arbitrator,  authority, agency, commission, official or other instrumentality of
the United States,  the Federal Republic of Germany,  any foreign  jurisdiction,
the European Community or any political subdivision of any of the foregoing.

     "HSR  Act"  means   Section  7A  of  the  Clayton  Act  (Title  II  of  the
Hart-Scott-Rodino  Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.

     "Indemnified Party" and "Indemnifying Party" have the meanings set forth in
Section 10.03.

     "Initial Price Per Share" means the Purchase Price divided by the number of
Initial Shares.

     "Initial Shares" has the meaning set forth in Section 2.02(b).

     "Joint  Venture" means the joint venture  contemplated by the Memorandum of
Understanding  to be  formed  between  the  parties  hereto  (or  through  their
respective   Affiliates)  in  connection  with  motor  vehicle  occupant  safety
restraint systems.



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     "Knowledge"  means, as to any specified  facts or  information,  that those
facts or information are within the actual knowledge of any executive officer or
senior vice president of any division,  and in addition,  as to Section  3.17(b)
only, the actual knowledge of the Company's Director of Corporate Compliance.

     "Law"  means  any  law,  statute,  rule,  regulation,  ordinance  or  other
pronouncement  having  the  effect  of law in the  United  States,  the  Federal
Republic of Germany, the European Community or any political  subdivision of the
foregoing.

     "Lien" means any lien, pledge, hypothecation,  mortgage, security interest,
claim, lease,  charge,  option, right of first refusal,  easement  encroachment,
transfer restriction, or other encumbrance of any kind.

     "Make-Whole  Agreement"  means  an  agreement  in  substantially  the  form
attached hereto as Exhibit B.

     "Material  Adverse  Effect"  means  a  material  adverse  effect  upon  the
business,  assets,  condition  (financial  or  otherwise)  or  operations of the
Company and its Subsidiaries, taken as a whole.

     "Memorandum  of  Understanding"   means  the  memorandum  of  understanding
(including the related Term Sheet) between the Company and Purchaser,  dated the
same date as this Agreement, with respect to a joint venture between the parties
or their affiliates.

     "NYSE" means the New York Stock Exchange, Inc.

     "Notice Period" has the meaning set forth in Section 10.03(a).

     "Order" means any writ,  judgment,  decree,  injunction or similar order of
any Governmental or Regulatory Authority.

     "Person" means an individual, partnership, corporation, association, trust,
joint venture,  unincorporated  organization,  and any government,  governmental
department or agency or political subdivision thereof.

     "Purchase Price" has the meaning set forth in Section 2.02.

     "Purchaser" means Siemens Aktiengesellschaft.

     "Registration  Rights Agreement" means an agreement in the form attached as
Exhibit D.

     "Related  Agreements"  means the  Make-Whole  Agreement,  the  Registration
Rights Agreement and the Stockholders Agreement.

     "Securities  Act" means the  Securities  Act of 1933,  as amended,  and the
rules and regulations promulgated thereunder.

     "SEC" means the Securities and Exchange Commission.

     "Series A Preference Share" means a share, authorized by the Certificate of
Designations,  which represents one  one-thousandth  (1/1,000) of a share of the
Company's 1997 Series A Convertible Non-Voting Preferred Shares, $.001 par value
per share,  is convertible by the holder thereof at any time after issuance into
Common   Stock,   and  has  the  other  rights,   qualifications,   limitations,
restrictions and preferences set forth in the Certificate of Designations.

     "Shares" has the meaning set forth in Section 2.01.




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     "Stockholders  Agreement"  means the  agreement in  substantially  the form
attached as Exhibit E.

     "Stock Sale  Discount"  means,  with respect to any sale of Common Stock by
the Company,  the amount,  if any, by which the purchase price per share paid by
the  purchaser  in such sale is less than the last  reported  sale  price of the
Common Stock on the NYSE on the last Trading Day  preceding the date the Company
first  became  contractually  committed  to  make  such  sale,  expressed  as  a
percentage of such last reported sale price.

     "Subsidiaries" has the meaning set forth in Section 3.06.

     "Taxes" means any federal,  state, county, local or foreign taxes, charges,
fees,  levies,  or other  assessments,  including all net income,  gross income,
sales and use, ad valorem, transfer, gains, profits, excise, franchise, real and
personal  property,  gross  receipt,  capital  stock,  production,  business and
occupation,  disability,  employment, payroll, license, estimated, stamp, custom
duties,  severance or withholding  taxes or charges imposed by any  governmental
entity, including any interest and penalties (civil or criminal) on or additions
to  any  such  taxes  and  any  expenses   incurred  in   connection   with  the
determination, settlement or litigation of any Tax liability.

     "Tax Return"  means a report,  return or other  information  required to be
supplied  to a  governmental  entity  with  respect  to Taxes  including,  where
permitted  or  required,  combined  or  consolidated  returns  for any  group of
entities that include the Company or any Subsidiary.

     "Trading Day" means a day on which the NYSE opens for trading.

     1.02 Principles of Construction.  (a) All references to sections, schedules
and  exhibits are to sections,  schedules  and exhibits in or to this  Agreement
unless otherwise  specified.  The words "hereof,"  "herein," and "hereunder" and
words  of  similar  import  when  used in this  Agreement  shall  refer  to this
Agreement as a whole and not to any particular provisions of this Agreement.

     (b) All  accounting  terms used in this  Agreement  shall be  construed  in
accordance with generally accepted accounting principles in the United States.

     Section 2. Sale and Purchase of Stock.

     2.01 Sale and  Purchase of Stock.  The Company  agrees to issue and sell to
Purchaser,  and,  subject to the terms and conditions  hereof and in reliance on
the  representations,  warranties and covenants set forth or referred to herein,
Purchaser agrees to purchase from the Company, the number of Series A Preference
Shares  determined in accordance with Section 2.02 (the  "Shares").  The rights,
qualifications, limitations, restrictions and preferences of the Shares shall be
as set forth in the Certificate of Designations.

     2.02 Purchase  Price;  Number of Shares to be Purchased.  (a) The aggregate
purchase price for the Shares (the "Purchase Price") shall be $115,000,000.

     (b) The number of Shares  (the  "Initial  Shares") to be issued and sold by
the  Company at the  Closing in  consideration  of the  Purchase  Price shall be
4,883,227.  If there is a Best Price,  then the number of Shares issued and sold
shall equal the Purchase Price divided by the Best Price.

     (c) Not later than five days after the end of the  Adjustment  Period,  the
Company shall issue and deliver to Purchaser a number of Shares (the "Additional
Shares")  equal to the  excess of (i)the  number of Shares  that is equal to the
Purchase Price divided by the Best Price over (ii) the number of Initial Shares.





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     2.03 Closing.

     (a) Subject to the other  provisions of this Agreement,  the closing of the
purchase and sale of the Initial Shares (the  "Closing")  will take place at the
same time and place as the closing of the AlliedSignal Acquisition.

     (b) On  the  Closing  Date,  Purchaser  will  pay  the  Purchase  Price  in
immediately  available  funds, by wire transfer to an account  designated by the
Company not less than two  Business  Days prior to the  Closing  Date or, if the
Company fails to so designate an account  within the required  time, by delivery
of a certified or official bank check payable to the order of the Company.

     (c)  Simultaneously  with  Purchaser's  payment of the Purchase Price,  the
Company will deliver to Purchaser a certificate representing the Initial Shares.

     Section 3  Representations  and  Warranties  of the  Company.  The  Company
represents  and  warrants  to and  for  the  benefit  of  Purchaser  as  follows
(Notwithstanding  anything  in the  Agreement  to the  contrary,  except for the
representations  and warranties  contained in Section 3.17,  neither the Company
nor any  Subsidiary  is making any  representation  or warranty  concerning  the
AlliedSignal Agreement, the AlliedSignal Acquisition or the business,  assets or
operations  being  acquired by the Company or any  Subsidiary as a result of the
AlliedSignal Acquisition.):

     3.01  Organization  and  Good  Standing.  Each  of  the  Company  and  each
Subsidiary  (a)  is  duly  organized  and  existing  in  good  standing  in  its
jurisdiction  of formation,  (b) is duly qualified and authorized to do business
in all other jurisdictions in which the nature of its business or property makes
such  qualification  necessary,  except where such failure to qualify  would not
have a Material Adverse Effect,  and (c) has the power to own its properties and
to carry on its business as now conducted and as proposed to be conducted.

     3.02  Authorization.  Except as set forth on Schedule  3.02, the execution,
delivery  and  performance  by the  Company of this  Agreement  and the  Related
Agreements,  the issuance and sale by the Company of the Shares and the issuance
of the Common Stock upon conversion of the Shares,  (a) are within the Company's
corporate  power and authority,  (b) have been duly  authorized by all necessary
corporate  proceedings,  (c) do not and will not conflict  with or result in any
breach or violation of any  provision of the  Certificate  of  Incorporation  or
Bylaws of the Company,  (d) do not and will not  conflict  with or result in any
breach or violation of any provision of any law,  regulation,  order,  judgment,
writ,  injunction,   license  or  permit,  applicable  to  the  Company  or  any
Subsidiary, and (e) do not and will not conflict with or result in any breach or
violation of any of the terms or conditions of, or constitute (or with notice or
lapse of time or both  constitute) a default under, or give rise to the creation
of any lien upon any of the property or assets of the Company or any Subsidiary,
under any contract, agreement, lease or other instrument to which the Company or
any  Subsidiary is a party  (including  without  limitation  all  agreements and
instruments to be executed and delivered in connection with the financing of the
AlliedSignal  Acquisition)  or by  which  any  of  their  respective  assets  or
properties is bound, the consequences of which, with respect to this clause (e),
could reasonably be expected to result in a Material Adverse Effect.

     3.03 Enforceability.  Each of this Agreement and the Related Agreements has
been duly  executed and delivered by the Company and  constitutes  the valid and
legally binding obligation of the Company  enforceable  against it in accordance
with its terms,  except to the extent that its  enforceability may be limited by
applicable  bankruptcy,  insolvency,  reorganization or other laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies.

     3.04  Approvals.  Except  as set forth on  Schedule  3.04,  the  execution,
delivery  and  performance  by the  Company of this  Agreement  and the  Related
Agreements,  the  purchase and sale of the Shares and the issuance of the number
of shares of Common Stock  specified in the  Certificate  of  Designations  upon
conversion  of the Shares,  do not and will not require the  approval or consent
of,  or any  filing  with,  any  governmental  authority  or agency or any other
Person.



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     3.05  Capitalization.  (a) The  authorized  capital  stock  of the  Company
consists  solely of  (i)50,000,000  shares of Common  Stock,  $.01 par value per
share,  and (ii) 5,000,000  shares of preferred stock of the Company,  $.001 par
value per share.  All of the outstanding  shares of capital stock of the Company
are duly authorized, validly issued, fully paid and nonassessable. Upon issuance
and sale to Purchaser in accordance  with this Agreement the Shares will be, and
the Common Stock  issuable upon  conversion of the Shares will upon issuance be,
duly authorized, validly issued, fully paid and nonassessable and free and clear
of all Liens.

     (b) Except  for the  Make-Whole  Agreement  and as  otherwise  set forth on
Schedule  3.05(b),  neither the Company nor any Subsidiary has  outstanding  any
rights  (either  pre-emptive  or other) or options to subscribe  for or purchase
from  the  Company  or such  Subsidiary  or any  warrants  or  other  agreements
providing for or requiring the issuance or purchase or other  acquisition  by or
on behalf of the  Company  or such  Subsidiary  of, any  capital  stock or other
equity  interests or any securities  convertible  into or  exchangeable  for the
Company's or such Subsidiary's  capital stock or other equity interests.  Except
as set forth on Schedule 3.05(b), there are no voting trusts or other agreements
or  understandings  with  respect  to the voting of the  capital  stock or other
equity  interests of the Company or such Subsidiary nor any  restrictions on the
transferability  or sale of such  shares  or other  equity  interests  except as
provided under the Securities  Act,  state "blue sky" or securities  laws,  this
Agreement and the Related Agreements.  Neither the Company nor any Subsidiary is
subject to any  obligation  (contingent or otherwise) to repurchase or otherwise
acquire,  redeem or retire any shares of capital stock or other equity interests
of the  Company  or  such  Subsidiary  or any  securities  convertible  into  or
exchangeable for any such capital stock or other equity interests.

     3.06.  Subsidiaries.  Schedule  3.06 sets forth the name,  jurisdiction  of
organization,  and amount of the Company's and each other record  owner's equity
interest in each  corporation  or other entity in which the Company  directly or
indirectly  owns or has the power to vote shares of any  capital  stock or other
ownership  interests  having  ordinary  voting  power to elect a majority of the
directors of such corporation, or other persons performing similar functions for
such  entity,  as the case may be, and each  partnership  and limited  liability
company in which such  corporation or entity is a general  partner or manager or
member,  as the case may be (the  "Subsidiaries").  Except for  ownership by the
Company of the  Subsidiaries  as set forth on Schedule  3.06 or as otherwise set
forth on  Schedule  3.06  neither the  Company  nor any  Subsidiary  directly or
indirectly owns any capital stock of, or other equity interest in, any person or
participates in any joint venture or similar arrangement with any person. Except
as set forth on Schedule 3.06, all of the outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable,   and  are  owned,  beneficially  and  of  record,  directly  or
indirectly, by the Company free and clear of all Liens.

     3.07 Compliance with Laws and Orders. The Company and its Subsidiaries hold
all  permits,  licenses,  variances,  exemptions,  orders and  approvals  of all
Governmental  and  Regulatory  Authorities  necessary for the lawful  conduct of
their respective businesses (the "Company Permits"), except for failures to hold
such permits,  licenses,  variances,  exemptions,  orders and  approvals  which,
individually  or in the  aggregate,  are not having and could not be  reasonably
expected to have a Material Adverse Effect. The Company and its Subsidiaries are
in  compliance  with the terms of the  Company  Permits,  except  failures so to
comply which,  individually or in the aggregate, are not having and could not be
reasonably  expected to have a Material  Adverse Effect.  Except as disclosed in
the Company SEC Reports (as defined in Section  3.08) filed prior to the date of
this  Agreement,  the Company and its  Subsidiaries  are not in  violation of or
default  under any Law or Order of any  Governmental  or  Regulatory  Authority,
except for violations  which,  individually or in the aggregate,  are not having
and could not be reasonably expected to have a Material Adverse Effect.

     3.08 SEC  Reports  and  Financial  Statements.  The  Company  delivered  to
Purchaser  prior to the execution of this  Agreement a true and complete copy of
each form, report, schedule, registration statement and other document (together
with all amendments thereof and supplements thereto) filed by the Company or any
of its Subsidiaries with the SEC since December 31, 1996 (as such documents have
since the time of their  filing been amended or  supplemented,  the "Company SEC
Reports"), which, except as disclosed on Schedule 3.08(a), are all the documents
(other than  preliminary  material) that the Company and its  Subsidiaries  were
required to file with the SEC since such date.  Except as  disclosed in Schedule
3.08(a), and in the cases where the Company SEC Reports have been amended, as of
their respective dates,



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     the Company SEC Reports (i)  complied as to form in all  material  respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and (ii) did not contain any untrue  statement of a material fact or omit to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading.  Except as  disclosed in Schedule  3.08(b),  the audited
consolidated  financial statements and unaudited interim consolidated  financial
statements (including, in each case, the notes, if any, thereto) included in the
Company SEC Reports (the "Company Financial  Statements") complied as to form in
all material  respects with the published  rules and regulations of the SEC with
respect thereto,  were prepared in accordance with generally accepted accounting
principles  applied on a consistent basis during the periods involved (except as
may be  indicated  therein or in the notes  thereto and except  with  respect to
unaudited statements as permitted by Form 10-Q of the SEC) and fairly present in
all material respects  (subject,  in the case of the unaudited interim financial
statements,  to  normal,  recurring  year-end  audit  adjustments  which are not
expected to be,  individually  or in the  aggregate,  materially  adverse to the
Company  and its  Subsidiaries  taken as a  whole)  the  consolidated  financial
position of the Company and its  consolidated  subsidiaries as at the respective
dates thereof and the  consolidated  results of their  operations and cash flows
for the respective periods then ended.  Except as set forth in Schedule 3.08(b),
each  Subsidiary of the Company is treated as a  consolidated  subsidiary of the
Company in the Company Financial Statements for all periods covered thereby.

     3.09  Absence of Certain  Changes or  Events.  Except as  disclosed  in the
Company SEC Reports filed prior to the date of this Agreement or as disclosed on
Schedule 3.09,  (a) since June 30, 1997 there has not been any change,  event or
development having, or that could be reasonably  expected to have,  individually
or in the aggregate, a Material Adverse Effect and (b) between such date and the
date hereof the Company and its  Subsidiaries  have conducted  their  respective
businesses only in the ordinary course consistent with past practice.

     3.10 Absence of Undisclosed  Liabilities.  Except for matters  reflected or
reserved  against  in the  balance  sheet for the  period  ended  June 30,  1997
included in the Company  Financial  Statements or as disclosed in Schedule 3.10,
neither  the  Company  nor  any of its  Subsidiaries  had at such  date,  or has
incurred since that date, any  liabilities  or  obligations  (whether  absolute,
accrued, contingent, fixed or otherwise, or whether due or to become due) of any
nature that would be  required  by  generally  accepted  accounting  principles,
applied  on a  basis  consistent  with  prior  practice,  to be  reflected  on a
consolidated  balance  sheet of the  Company and its  consolidated  subsidiaries
(including the notes thereto),  except liabilities or obligations (i) which were
incurred in the ordinary course of business consistent with past practice;  (ii)
which have not, and could not reasonably be expected to have, individually or in
the aggregate, a Materially Adverse Effect.

     3.11 Legal  Proceedings.  Except as  disclosed  in the  Company SEC Reports
filed prior to the date of this  Agreement or in Schedule 3.11, (i) there are no
actions, suits,  arbitrations or proceedings pending or, to the Knowledge of the
Company,  threatened against,  relating to or affecting, nor to the Knowledge of
the Company are there any Governmental or Regulatory Authority investigations or
audits pending or threatened against,  relating to or affecting,  the Company or
any of its Subsidiaries or any of their respective  assets and properties which,
if determined adversely to the Company or any of its Subsidiaries,  individually
or in the  aggregate,  could be reasonably  expected to have a Material  Adverse
Effect,  or a material adverse effect on the Company's ability to consummate the
transactions  contemplated by this Agreement or the Related  Agreements and (ii)
neither the Company nor any of its  Subsidiaries  is subject to any Order of any
Governmental or Regulatory Authority which, individually or in the aggregate, is
having or could be reasonably  expected to have a Material  Adverse  Effect or a
material adverse effect on the Company's  ability to consummate the transactions
contemplated by this Agreement or the Related Agreements.

     3.12 Patents and  Trademarks.  Each of the Company and each Subsidiary owns
or possesses sufficient legal rights to all patents, trademarks,  service marks,
trade names,  copyrights,  trade  secrets,  licenses,  information,  proprietary
rights,  know-how and processes necessary for its business as now conducted.  To
the  Knowledge  of the  Company,  no  material  activity  of the  Company or any
Subsidiary  materially conflicts with or infringes on the intellectual  property
rights of any other Person.  Except as disclosed on Schedule 3.12,  there are no
outstanding options, licenses, or agreements of any kind

                                                                 

<PAGE>



     relating to the foregoing, nor is the Company or any Subsidiary bound by or
a party to any options,  licenses or  agreements of any kind with respect of the
patents,  trademarks,  service  marks,  trade names  copyrights,  trade secrets,
licenses,  information,  proprietary rights and processes of any other person or
entity.

     3.13 Taxes.  Each of the  Company  and, to the  Company's  Knowledge,  each
Subsidiary has filed all Tax Returns  required to be filed. All Tax Returns were
in all  material  respects  true,  complete and correct and have been filed on a
timely basis. Each of the Company and each Subsidiary have paid, in the time and
manner  prescribed  by law, all Taxes that are due and  payable.  Except for the
liens of property taxes being disputed in good faith,  there are no Tax liens on
any  property  of the  Company or any  Subsidiary.  Each of the Company and each
Subsidiary  has complied in all material  respects  with the  provisions of Code
Sections 1441-1464,  3401-3406,  6041 and 6049 (and similar provisions under any
other laws) and have, in the time and manner  prescribed  by law,  withheld from
employee wages and have paid to the proper governmental  authorities all amounts
required. Each of the Company and each Subsidiary has established on their books
and records  reserves  adequate to pay all Taxes not yet due and payable.  There
are no agreements,  waivers or other arrangements  providing for an extension of
time with respect to the filing of any returns or the  assessment  of any Tax or
deficiency  against  the  Company or any of the  Subsidiaries  nor are there any
known actions, suits, proceedings,  investigations or claims pending against the
Company  or any of the  Subsidiaries  in  respect  of  any  Tax,  assessment  or
governmental  charge, or any other matters under discussion  between the Company
or any of the Subsidiaries and any federal, state or local authority relating to
any Tax  assessments,  or  governmental  charges or any known claims against the
Company or any of the Subsidiaries  for additional  Taxes,  assessments,  or any
governmental charges asserted by any such authority.

     3.14 Employee Benefit Plans. The plans listed in Schedule 3.14 are the only
employee  benefit  plans (as defined in Section 3(3) of the Employee  Retirement
Income  Security  Act of 1974,  as  amended  ("ERISA")),  and  plans,  programs,
policies,  practices  arrangements  or contracts  (whether  group or individual)
providing for payments,  benefits or  reimbursements to employees of the Company
or any Subsidiary,  former employees, their beneficiaries and dependents,  under
which such employees,  former employees, their beneficiaries and dependents, are
covered  through  an  employment  relationship  with the  Company  or any entity
required to be aggregated in a controlled group or affiliated service group with
the Company for  purposes of ERISA or the Code  (including  without  limitation,
under Section  414(b),  (c), (m) or (o) of the Code or Section 4001 of ERISA, at
any relevant time ("Benefit  Plans").  With respect to each Benefit Plan, to the
extent  applicable:  (i) such Benefit Plan has been  maintained  and operated in
material compliance with its terms and with the applicable  provisions of ERISA,
the Code and all other applicable  governmental laws and regulations;  each such
Benefit Plan intended to qualify under Section 401(a) of the Code is the subject
of a favorable  unrevoked  determination  letter issued by the Internal  Revenue
Service as to its tax-qualified status under the Code, (ii) there is no material
suit,  action,  dispute,  claim,  arbitration or legal,  administrative or other
proceeding or governmental  investigation  pending, or threatened,  alleging any
breach  of the  terms  of any  such  Benefit  Plan  or of any  fiduciary  duties
thereunder or violation of any applicable  statue,  law, rule or regulation with
respect to any Benefit Plan, and (iii) neither Purchaser nor any plan maintained
by Purchaser or any of its Affiliates shall be subject to any tax, fine, penalty
or other liability of any kind whatsoever,  that would not have been incurred by
Purchaser or any of its Affiliates but for the transactions contemplated hereby.

     3.15 Environmental. Except as set forth on Schedule 3.15:

     (a) To the Company's Knowledge,  there has not been, as of the date hereof,
any "release" (as defined in 42 U.S.C.  ss.  9601(22)) of any "hazardous  waste"
(as  defined  in 42  U.S.C.  ss.  9601(14))  or oil on or about  any of the real
property currently or previously owned, leased or operated by the Company).

     (b) To the Company's Knowledge, the Company has not by contract,  agreement
or otherwise arranged for disposal or treatment,  or arranged with a transporter
for  the  transport  for  disposal  or  treatment,  of  hazardous  waste  at any
"facility"  (as defined in 42 U.S.C.  ss.  9601(9)) owned or operated by another
person or entity.


                                                                 

<PAGE>



     (c) To the Company's Knowledge,  the Company has not accepted any hazardous
waste for transport to disposal or treatment facilities or sites selected by the
Company.

     (d) To the Company's Knowledge,  as of the date hereof, the Company and its
use of its real property is in compliance  with all applicable  laws,  rules and
regulations of any federal,  state or local  governmental  authority relating to
environmental  protection,  underground  storage tanks,  toxic waste,  hazardous
waste, oil or hazardous  substance  handling,  treatment,  storage,  disposal or
transportation or arranging  therefor,  products or materials  previously or now
located on, delivered to,  transmitted from, or in transit to or from, such real
property.

     (e)  To  the  Company's  Knowledge,  all of  the  Company's  past  disposal
practices  relating to hazardous  waste have been  accomplished in accordance in
all material respects with applicable laws, rules, regulations and ordinances.

     (f) To the  Company's  Knowledge,  the Company has not been notified of any
potential  liability  of the Company  with  respect to the clean-up of any waste
disposal site and has no information to the effect that any site at which it has
disposed of  hazardous  waste or oil has been or is under  investigation  by any
federal, state or local governmental body, authority or agency.

     3.16 Affiliate  Transactions.  As of the date of this Agreement,  except as
disclosed on Schedule  3.16 and except for  bona-fide  intercompany  obligations
among the Company and its Subsidiaries,  (i) there are no outstanding amounts of
indebtedness  in  excess  of  $250,000,  and  (ii)  there  are no  contracts  or
agreements,  between the Company  and the  Subsidiaries,  or the Company and any
officer, director or Affiliate of the Company.

     3.17 AlliedSignal  Transaction.  ( a) A true,  complete and correct copy of
the Purchase  Agreement,  dated as of August 27, 1997, among  AlliedSignal Inc.,
the other sellers named therein and the Company (the "AlliedSignal  Agreement"),
including all exhibits,  schedules and appendices thereto, has been furnished to
Purchaser.  The  AlliedSignal  Agreement is in full force and effect and (except
for an amendment  dated  October 3, 1997,  a true,  complete and correct copy of
which has been furnished to Purchaser) has not been modified or amended.

     (b) To the Knowledge of the Company,  except as disclosed on Schedule 3.17,
none  of  the  representations  or  warranties  contained  in  the  AlliedSignal
Agreement is false or inaccurate in any material respect.

     3.18  Disclosure.  No  representation,  warranty or  statement  made by the
Company or any Subsidiary in this Agreement or the Related Agreements, or in any
agreement, certificate,  statement or document required to be delivered pursuant
hereto,  contains any untrue  statement  of a material  fact or omits to state a
material  fact  necessary  in  order to make the  statements  contained  in this
Agreement or the Related  Agreements  or in such other  agreement,  certificate,
statement or document not misleading in light of the circumstances in which they
were made.

     3.19 Brokers.  All  negotiations  relative to this Agreement or the Related
Agreements and the transactions contemplated hereby have been carried out by the
Company directly with Purchaser without the intervention of any Person on behalf
of the  Company in such  manner as to give rise to any valid claim by any Person
against any Purchaser or its Affiliates for a finder's fee, brokerage commission
or similar payment.

     Section  4.   Representations   and  Warranties  of  Purchaser.   Purchaser
represents and warrants to and for the benefit of the Company as follows:

     4.01 Investment  Intent.  Purchaser is acquiring the Shares for investment,
and not with a view to selling or otherwise distributing the Shares.

     4.02 No Registration of Securities. Purchaser is aware that the Shares have
not been registered  under the Securities Act or under state  securities or blue
sky laws in reliance upon certain exemptions from such registration, and may not
be

                                                                 

<PAGE>



     transferred  except  pursuant  to  an  effective   registration  under  the
Securities  Act and under state  securities or blue sky laws or in a transaction
exempt from such registration.

     4.03  Investor  Status.  (a) Purchaser is able to bear the economic risk of
the  investment of Purchaser in the Shares and has such knowledge and experience
in financial and business matters,  so as to be capable of evaluating the merits
and risks of the prospective investment in the Shares.

     (b)  Purchaser  is aware that no  Federal or state  agency has (i) made any
finding or  determination  as to the fairness of any aspect of the investment in
the  Shares or (ii)  passed on or  endorsed  the merits of the  offering  of the
Shares.

     (c) Purchaser is an "accredited  investor," as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act.

     4.04  Authority to Execute and Perform  Agreement.  Purchaser has the legal
right and power and all  authority  required to enter into,  execute and deliver
this Agreement.  Each of this Agreement and the Related Agreements has been duly
executed and delivered and is the valid and binding obligation of such Purchaser
enforceable  in  accordance  with  its  terms,  except  to the  extent  that its
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization  or other laws  affecting the  enforcement  of creditors'  rights
generally and by principles of equity  regarding the  availability  of remedies.
The execution,  delivery and  performance by Purchaser of this Agreement and the
Related Agreements,  and the purchase by Purchaser of the Shares hereunder,  (a)
are  within  Purchaser's  corporate  power  and  authority,  (b) have  been duly
authorized  by all necessary  corporate  proceedings  of  Purchaser,  (c) do not
conflict  with or result in any  breach or  violation  of any  provision  of the
Certificate of Incorporation (or similar organizational documents) or Bylaws (or
similar  governing  documents)  of such  Purchaser,  (d) do not conflict with or
result in any  breach or  violation  of any  provision  of any law,  regulation,
order,  judgment,  writ,  injunction,  license  or  permit,  applicable  to such
Purchaser,  or (e) conflict  with or result in any breach or violation of any of
the terms or conditions  of, or  constitute  (or with notice or lapse of time or
both  constitute) a default under, or give rise to the creation of any lien upon
any of the property or assets of Purchaser, under any contract, agreement, lease
or other  instrument  to  which  Purchaser  is a party  or by  which  any of its
respective  assets or  properties  is bound,  the  consequences  of which,  with
respect to this  clause  (e),  could  reasonably  be expected to have a material
adverse  effect on the  validity  or  enforceability  of this  Agreement  or the
Related  Agreements  or on the ability of Purchaser  to perform its  obligations
under any of such agreements.

     4.05  Brokers.  All  negotiations   relative  to  this  Agreement  and  the
transactions  contemplated  hereby,  including,  but not  limited  to, the Joint
Venture,  have been carried out by Purchaser  directly with the Company  without
the  intervention of any Person on behalf of Purchaser in such manner as to give
rise to any valid claim by any Person  against the Company or any Subsidiary for
a finder's fee, brokerage commission or similar payment.

     4.06  Approvals.  Except  as set forth on  Schedule  4.06,  the  execution,
delivery  and  performance  by  Purchaser  of this  Agreement  and  the  Related
Agreements, and the purchase and sale of the Shares, do not require the approval
or consent of, or any filing with, any  governmental  authority or agency or any
other Person.

     Section 5. Covenants of the Company and Purchaser.

     5.01  Company.  The  Company  covenants  and agrees  that,  except with the
written consent of Purchaser (which consent shall not unreasonably be withheld),
it shall:

     (i) Conduct of Business.  From the date hereof to the Closing Date,  except
as disclosed to Purchaser,  operate its business and the business of each of its
subsidiaries  in a  manner  consistent  with  the  manner  in  which it is being
operated at the date of this Agreement.


                                                                 

<PAGE>



     (ii) Best Efforts.  Use its best efforts to cause all of the conditions set
forth in Section 6 to be fulfilled as promptly as practicable  after the date of
this Agreement.

     (iii) Antitrust,  Competition Law  Requirements.  Take promptly (and in any
event  within five days after the  Closing)  all actions  necessary  to make the
filings  required  of the Company or its  Affiliates  with any  Governmental  or
Regulatory  Authorities  in connection  with  Purchaser's  acquisition of Common
Stock upon conversion of the Shares, including without limitation those required
under the HSR Act and European  Community and German competition Laws, comply at
the  earliest  practicable  date with any  request  for  additional  information
received by the Company or its Affiliates  from any  Governmental  or Regulatory
Authority in respect of such filing and cooperate  with  Purchaser in connection
with any similar or  comparable  filing  required to be made by Purchaser and in
connection  with  resolving any  investigation  or other inquiry  concerning the
transactions  contemplated  by this Agreement  commenced by any  Governmental or
Regulatory Authority.

     (iv)  Investigation  by  Purchaser.  The Company  will,  and will cause the
Subsidiaries to, (A) provide Purchaser and its officers,  directors,  employees,
agents,  counsel,  accountants,   financial  advisors,   consultants  and  other
representatives with full access, upon reasonable prior notice and during normal
business  hours,  to all  officers,  employees,  agents and  accountants  of the
Company and the  Subsidiaries and their assets,  properties,  books and records,
and (B) furnish  Purchaser and such other Persons with all such  information and
data concerning the business and operations of the Company and the Subsidiaries,
and (to  the  extent  possible  without  causing  unreasonable  disruption)  the
business and assets to be acquired in the AlliedSignal  Acquisition as Purchaser
or any of such other  Persons  reasonably  may request in  connection  with such
investigation.

     (v)  Notice of Events.  Promptly  give  Purchaser  notice of (A) any event,
condition or  circumstance  occurring  from the date hereof  through the Closing
Date that would  constitute a material  violation or breach of this Agreement or
(B) any event,  occurrence,  transaction  or other  item  which  would have been
required  to  have  been  disclosed  on  any  Schedule  or  statement  delivered
hereunder, had such event,  occurrence,  transaction or item existed on the date
hereof other than items arising in the ordinary  course of business  which would
not render any representation or warranty of such parties materially misleading.

     (vi) Equality of Rights.  Grant to Purchaser (in addition to rights already
held by Purchaser)  rights  substantially  equivalent  to those  obtained by any
other equity holder who acquires  from the Company or any  Affiliate  thereof an
equal or smaller percentage of voting interest in the Company than Purchaser.

     (vii) Joint  Venture.  Use its best efforts (i) to cause the  execution and
delivery of the definitive documentation with respect to the Joint Venture to be
executed  and  delivered  by December  15,  1997,  (ii) to obtain the  requisite
governmental  clearances,  approvals or terminations of waiting periods required
or applicable  (including  under antitrust or competition  laws) with respect to
the formation of the Joint Venture and the  conversion of the Shares into Common
Stock  (provided,  however,  that the foregoing shall not require the Company to
consent to the imposition of any conditions  deemed by it to be unduly  onerous)
and  (iii) to cause  the  formation  of the  Joint  Venture  based on the  terms
contained in the Memorandum of Understanding prior to June 30, 1998.

     5.02  Purchaser.  Purchaser  covenants  and agrees  that,  except  with the
written  consent  of the  Company  (which  consent  shall  not  unreasonably  be
withheld), it shall:

     (a) Best Efforts.  Use its best efforts to cause all of the  conditions set
forth in Section 7 to be fulfilled as promptly as practicable  after the date of
this Agreement. Without limiting the generality of the foregoing, Purchaser will
(i) take promptly (and in any event within five Business Days after the Closing)
all  actions  necessary  to  make  the  filings  required  of  Purchaser  or its
Affiliates with any Governmental or Regulatory  Authorities,  including  without
limitation  those required  under the HSR Act and European  Community and German
competition Laws, (ii) comply at the earliest  practicable date with any request
for additional information received by Purchaser or its Affiliates from any

                                                                 

<PAGE>



     Governmental  or  Regulatory  Authority in respect of such filing and (iii)
cooperate with the Company in connection  with any similar or comparable  filing
required  to be  made  by the  Company  and in  connection  with  resolving  any
investigation   or  other   regulatory   inquiry   concerning  the  transactions
contemplated  by this  Agreement  commenced by any  Governmental  or  Regulatory
Authority.

     (b) Joint  Venture.  Use its best  efforts (i) to cause the  execution  and
delivery of the definitive documentation with respect to the Joint Venture to be
executed  and  delivered  by December  15,  1997,  (ii) to obtain the  requisite
governmental  clearances,  approvals or terminations of waiting periods required
or applicable  (including  under antitrust or competition  laws) with respect to
the formation of the Joint Venture and the  conversion of the Shares into Common
Stock and (iii) to cause the  formation of the Joint  Venture based on the terms
contained in the Memorandum of Understanding prior to June 30, 1998.

     Section 6.  Conditions  Precedent to Obligations of Purchaser.  Purchaser's
obligation to purchase the Shares at the Closing  pursuant to this  Agreement is
subject to compliance by the Company with its agreements herein contained and to
the  satisfaction,  on or prior to the Closing Date with respect to  Purchaser's
obligation to consummate the Closing, of the following conditions:

     (a) Charter  Documents;  Good Standing  Certificate.  Purchaser  shall have
received  from the  Company (i) a  certificate  from a duly  authorized  officer
thereof  dated as of the Closing  Date  certifying  as to (A) the absence of any
amendment to the Certificate of Incorporation since the date of the Secretary of
State's  certificate  referred to in clause (ii) below, and (B) the completeness
and  accuracy of the  By-Laws of the  Company as in effect on the Closing  Date,
(ii) a long-form certificate,  dated not more than ten days prior to the Closing
Date,  of the  Secretary  of  State  of  Delaware  listing  the  Certificate  of
Incorporation  and each  amendment  thereto on file in his office and certifying
that  (A) the  attached  copy  of the  Certificate  of  Incorporation  and  each
amendment  thereto is a true and correct copy thereof,  (B) such  amendments are
the only  amendments  on file in his  office,  (C) that the Company has paid all
franchise taxes to the date of such certificate and (D) that the Company is duly
incorporated  and in good standing under the laws of the State of Delaware.  (b)
Proof of  Corporate  Action.  Purchaser  shall have  received  from the  Company
copies,  certified by a duly authorized  officer thereof to be true and complete
as of the Closing Date, of the resolutions of the Board of Directors and (to the
extent  required  under  applicable  Law or the  requirements  of the  NYSE) the
stockholders of the Company  authorizing the Charter Amendment,  the Certificate
of Designations  and the execution,  delivery and performance of this Agreement,
the Stockholders Agreement and the Make-Whole Agreement. (It is understood that,
following  the  Closing,   the  Company  may  seek  further   approvals  of  its
stockholders,  but the  results  of any such  proceeding  will not in any  event
affect the validity of the  corporate  approvals  referred to in this  paragraph
(b), all of which will have been obtained prior to the Closing.)

     (c) Incumbency Certificate.  Purchaser shall have received from the Company
an incumbency  certificate,  dated the Closing Date, signed by a duly authorized
officer  thereof,  and giving the name and bearing a specimen  signature of each
individual  who shall be  authorized  to sign,  in the name and on behalf of the
Company,  this  Agreement and to give notices and to take other action on behalf
of the Company under this Agreement.

     (d) Legal  Opinion.  Purchaser  shall  have  received  from Hale & Dorr LLP
special counsel to the Company, at the Closing their opinion,  dated the Closing
Date, substantially in the form of Exhibit C hereto.

     (e)   Representations   and   Warranties;   Officers'   Certificates.   The
representations and warranties of the Company contained herein shall be true and
correct in all  material  respects on and as of the  Closing  Date with the same
force and effect as though such  representations and warranties were made on and
as of such date (except for  representations and warranties which by their terms
are made expressly as of an earlier date,  which shall be true and correct as of
such  earlier  date) and the Company  shall have  performed  and complied in all
material respects with all conditions,  covenants and agreements  required to be
performed or complied with by it prior to the Closing Date; and Purchaser  shall
have  received on the Closing  Date a  certificate  to this effect  signed by an
authorized officer of the

                                                                 

<PAGE>



Company.

     (f) Legality; Authorization; Consents. The purchase of the Shares shall not
be prohibited by any Law or Order. All necessary consents, approvals,  licenses,
permits,  orders  and  authorizations  of, or  registrations,  declarations  and
filings with, any  Governmental or Regulatory  Authority or of or with any other
Person,  with respect to any of the transactions  contemplated by this Agreement
shall have been fully obtained or made and shall be in full force and effect and
any waiting  period  imposed under any applicable Law shall have expired or been
terminated.

     (g)  Litigation,  Etc.  No suit,  action,  investigation,  inquiry or other
proceeding  (including,  without limitation,  the enactment or promulgation of a
statute or rule) by or before any arbitrator or any  governmental  injunction or
order by a state or federal  court shall have been entered (i) as of the Closing
Date in connection  with this  Agreement,  the Related  Agreements or any of the
transactions  contemplated  hereby or (ii) which  would have a Material  Adverse
Effect or a material  adverse  effect on the  consummation  of the  transactions
contemplated  by this Agreement or the Related  Agreements,  including,  without
limitation, the acquisition of the Shares, contemplated hereby.

     (h) Make-Whole Agreement. The Company shall have executed and delivered the
Make-Whole Agreement to Purchaser.

     (i)  Registration  Rights  Agreement.  The Company  shall have executed and
delivered  the  Registration  Rights  Agreement to Purchaser.  (j)  Stockholders
Agreement;  Board Representative.  The Company,  Allen K. Breed, Johnnie Cordell
Breed and each other Breed  Stockholder  shall have  executed and  delivered the
Stockholders Agreement.

     (k) Completion of AlliedSignal Acquisition. All of the conditions precedent
to the AlliedSignal  Acquisition shall have been satisfied and the Company shall
have  delivered to Purchaser  fully  executed  copies of all documents  relating
thereto (including any related financing documents).

     (l) Satisfaction with Capital Structure.  Purchaser shall have confirmed to
its  satisfaction  that the terms of the  Company's  financing  arrangements  in
connection  with the  AlliedSignal  Acquisition  are  consistent  with the terms
described in the commitment  letters or term sheets  attached hereto as Schedule
6(l) and will  include the consent of any pledgee of Common  Stock to a right of
first  refusal  in  favor  of  Purchaser  on terms  reasonably  satisfactory  to
Purchaser.

     (m) Certificate of  Designations.  The Company shall have duly executed and
filed  the  Certificate  of  Designations  in  accordance  with  the  applicable
requirements  of  Delaware  law  and  shall  have  furnished  Purchaser  with  a
certificate of the Delaware Secretary of State to that effect.

     (n) NYSE Requirements.  The NYSE shall (i) have approved for listing on the
NYSE,  subject to notice of issuance,  the shares of Common Stock  issuable upon
conversion of the Shares and (ii) issued to the Company a letter confirming that
(A) the  obligations  to be  undertaken  by the Company  under the  Stockholders
Agreement (including without limitation the right of first refusal to be granted
thereunder by the Company in favor of Purchaser)  will satisfy the  requirements
of the NYSE, provided the right of first refusal is first approved by a majority
vote of the holders of the Company's  Common Stock,  and (B) no further approval
of the  Company's  stockholders  will be  required  under  the  NYSE's  rules or
policies in connection with the Company's  performance of its obligations  under
the Stockholders Agreement.

     (o) General.  All instruments and legal,  governmental,  administrative and
corporate  proceedings in connection with the transactions  contemplated by this
Agreement  shall be reasonably  satisfactory in form and substance to Purchaser,
and Purchaser  shall have received copies of all documents,  including,  without
limitation,  records of  corporate  or other  proceedings,  opinions of counsel,
consents,  licenses,  approvals,  permits and orders  which  Purchaser  may have
reasonably requested in connection therewith.

                                                                 

<PAGE>



     Section  7.  Conditions  Precedent  to  Obligations  of  the  Company.  The
Company's  obligation to issue and sell the Shares pursuant to this Agreement is
subject to compliance by Purchaser with the agreements herein contained,  and to
the satisfaction, on or prior to the Closing Date with respect to its obligation
to consummate the Closing of the following conditions:

     (a) Representations  and Warranties.  The representations and warranties of
Purchaser contained herein shall be true and correct in all material respects on
and as of the  Closing  Date  with the same  force and  effect  as  though  such
representations  and  warranties  were made on and as of such date  (except  for
representations  and warranties which by their terms are made expressly as of an
earlier  date,  which  shall be true and  correct as of such  earlier  date) and
Purchaser shall have performed and complied with all  conditions,  covenants and
agreements required to be performed or complied in all material respects with by
it prior to the Closing Date; and the Company shall have received on the Closing
Date a certificate  to this effect signed by an authorized  officer of Purchaser
with respect to the  certificate to be issued on the Closing Date. (b) Legality;
Authorization;  Consents.  The  issuance  and sale of the  Shares  shall  not be
prohibited  by any Law or Order,  and  shall  not  subject  the  Company  to any
penalty,  special  tax or  other  onerous  condition.  All  necessary  consents,
approvals,  licenses,  permits,  orders and authorizations of, or registrations,
declarations and filings with, any Governmental or Regulatory Authority or of or
with any other Person,  with respect to any of the transactions  contemplated by
this Agreement shall have been fully obtained or made and shall be in full force
and effect and any waiting period under any applicable Law shall have expired or
been terminated.

     (c) Stockholders Agreement. Purchaser shall have executed and delivered the
Stockholders Agreement.

     (d) Legal  Opinion.  The  Company  shall have  received  from  counsel  for
Purchaser  their  legal  opinions,  dated the  Closing  Date,  as to the matters
described in Exhibit F.

     (e) Completion of AlliedSignal Acquisition. All of the conditions precedent
to the AlliedSignal Acquisition shall have been satisfied.

     (f) Incumbency Certificate.  The Company shall have received from Purchaser
an incumbency  certificate,  dated the Closing Date, signed by a duly authorized
officer  thereof,  and giving the name and bearing a specimen  signature of each
individual  who  shall be  authorized  to sign,  in the  name and on  behalf  of
Purchaser, this Agreement and to give notices and to take other action on behalf
of Purchaser under this Agreement.

     (g)  Litigation,  Etc.  No suit,  action,  investigation,  inquiry or other
proceeding  (including,  without limitation,  the enactment or promulgation of a
statute or rule) by or before any arbitrator or any  governmental  injunction or
order by a state or federal  court shall have been entered (i) as of the Closing
Date in connection  with this  Agreement,  the Related  Agreements or any of the
transactions  contemplated  hereby or (ii) which  would have a Material  Adverse
Effect or a material  adverse  effect on the  consummation  of the  transactions
contemplated  by this Agreement or the Related  Agreements,  including,  without
limitation, the sale of the Shares, contemplated hereby.

     (h) General.  All instruments and legal,  governmental,  administrative and
corporate  proceedings in connection with the transactions  contemplated by this
Agreement shall be reasonably  satisfactory in form and substance to the Company
and the Company shall have received copies of all documents,  including, without
limitation,  records of  corporate  or other  proceedings,  opinions of counsel,
consents,  licenses,  approvals,  permits and orders  which the Company may have
reasonably requested in connection therewith.

     Section 8. Notices.  Any notice or other  communication  in connection with
this Agreement  shall be deemed to be delivered if in writing (or in the form of
a telecopy)  addressed as provided below and if either (a) actually delivered or
telecopied to said address or (b) in the case of a letter,  three  Business Days
shall have elapsed after the same shall have been deposited in the United States
mail, postage prepaid and registered or certified:

                                                                 

<PAGE>



         If to the Company:

         Breed Technologies, Inc.
         5300 Old Tampa Highway
         Lakeland, Florida 33811
         Attention:  Charles J. Speranzella, Jr.
             and
         General Counsel
         Telecopier: (941) 668-6016

         If to Purchaser:

         Siemens Aktiengesellschaft
         Legal Department ZFR3
         Werner-von-Siemens-Strasse 50
         D-91052 Erlangen
         Germany
         Attention:  Counsel for Automotive Systems Group
         Telecopier:  011-49-9131-729001

         With a copy to:

         Siemens Corporation
         Legal Department
         1301 Avenue of the Americas
         New York, New York
         Attention:  General Counsel
         Telecopier:  (212) 258-4945

     Section 9. Survival of  Representations  and  Warranties.  All  agreements,
representations  and  warranties  made  herein  or in any  certificate  or other
document  required to be delivered to Purchaser  pursuant hereto shall be deemed
to have been relied on by Purchaser,  notwithstanding  any investigation made by
Purchaser  or on  Purchaser's  behalf,  and shall  survive  (i) with  respect to
representations and warranties contained herein, until the first to occur of (x)
the date which is 18 months  after the Closing  Date or (y) the date of delivery
of the Make-Whole Notice as defined in the Put Agreement,  and (ii) with respect
to each other  covenant and  agreement  contained  herein until the last date on
which such covenant or agreement specifies it is to be performed, or, if no such
date is specified, indefinitely.

     Section 10. Indemnification.

     10.01  Indemnity by the Company.  Subject to the provisions of this Section
10,  the  Company  from and after the  Closing  Date  shall  indemnify  and hold
Purchaser  and  its  respective  officers,  directors,  stockholders,  managers,
agents, employees, representatives, affiliates, successors and assigns, harmless
from and against  any and all  damage,  loss  (including  loss of value),  cost,
obligation,  claims, demands, assessments,  settlements,  judgments or liability
(whether  based on  contract,  tort,  product  liability,  strict  liability  or
otherwise), including Taxes, and all expenses (including interest, penalties and
attorneys' and accountants' fees and  disbursements)  (collectively  referred to
herein as "Damages") incurred in litigation or otherwise,  and any investigation
relating  thereto,  by any of the above-named  persons,  directly or indirectly,
arising from or in connection with: the inaccuracy,  untruth or  incompleteness,
as of the date made or deemed  made,  of any  representation  or warranty by the
Company in this  Agreement  or in any other  agreement,  certificate  (including
without limitation the certificates delivered by the Company pursuant to Section
6), schedule,  exhibit or writing required to be delivered to Purchaser pursuant
to this Agreement; provided, however, that if any such

                                                                 

<PAGE>



     representation or warranty is qualified in any respect by materiality or in
any similar respect,  for purposes of this Section such qualification will be in
all  respects  ignored;  and any breach of or failure to perform any covenant or
agreement made by the Company in this Agreement.

     10.02 Purchaser's Indemnity.  Subject to the provisions of this Section 10,
Purchaser,  from and  after  the  Closing  Date,  shall  indemnify  and hold the
Company,  and  its  respective  officers,   directors,   stockholders,   agents,
employees,  representatives,  affiliates,  successors and assigns, harmless from
and  against  any  Damages   incurred  in  litigation  or  otherwise,   and  any
investigation related thereto, by the Company,  directly or indirectly,  arising
from or in connection with: the inaccuracy, untruth or incompleteness, as of the
date made or deemed made, of any representation or warranty by Purchaser in this
Agreement or in any other agreement,  certificate  (including without limitation
the  certificates  delivered  by  Purchaser  pursuant to Section  7),  schedule,
exhibit  or  writing  delivered  to the  Company  pursuant  to  this  Agreement;
provided,  however,  that if any such representation or warranty is qualified in
any respect by  materiality  or in any  similar  respect,  for  purposes of this
Section such qualification will be in all respects ignored; and any breach of or
failure  to  perform  any  covenant  or  agreement  made  by  Purchaser  in this
Agreement.

     10.03 Procedure.  No claim for  indemnification  shall be valid unless made
prior  to  the   expiration   (pursuant   to  Section   9)  of  the   applicable
representation,  warranty  or  covenant  on which it is based.  All  claims  for
indemnification   by  a  party  under  this  Section  10  (the  party   claiming
indemnification  and the party  against  whom such  claims  are  asserted  being
hereinafter  called  the  "Indemnified  Party"  and  the  "Indemnifying  Party,"
respectively) shall be asserted and resolved as follows:

     (a) In the event that any claim or demand for which an  Indemnifying  Party
would be liable to an Indemnified  Party hereunder is asserted against or sought
to be collected from such Indemnified  Party by a third party,  such Indemnified
Party shall with  reasonable  promptness give notice (the "Claim Notice") to the
Indemnifying  Party of such  claim  or  demand,  specifying  the  nature  of and
specific  basis for such claim or demand and the amount or the estimated  amount
thereof to the extent then feasible  (which  estimate shall not be conclusive of
the final amount of such claim and demand);  provided,  however, that no failure
to give, or delay in giving,  any such Claim Notice shall excuse or diminish the
Indemnifying Party's obligations to the Indemnified Party under this Section 10,
unless  such  failure  or  delay  is  prejudicial  to  Indemnifying  Party.  The
Indemnifying  Party shall have ten days from the date the Claim  Notice is given
in accordance  with Section 8 of this Agreement (the "Notice  Period") to notify
the  Indemnified  Party (i)  whether or not it  disputes  the  liability  of the
Indemnifying Party to the Indemnified Party hereunder with respect to such claim
or demand,  and (ii)  whether or not it desires,  at the cost and expense of the
Indemnifying  Party,  to defend  the  Indemnified  Party  against  such claim or
demand; provided,  however, that any Indemnified Party is hereby authorized, but
is not  obligated,  prior to and during the Notice  Period,  to file any motion,
answer or other  pleading that it shall deem necessary or appropriate to protect
its interests or those of the  Indemnifying  Party.  If the  Indemnifying  Party
notifies  the  Indemnified  Party  within the Notice  Period  that it desires to
defend the  Indemnified  Party  against such claim or demand,  the  Indemnifying
Party shall,  subject to the last sentence of this paragraph,  have the right to
control the defense  against the claim by all appropriate  proceedings,  and any
settlement  negotiations.  If the  Indemnifying  Party  assumes the defense of a
proceeding,  (i) no  compromise  or settlement of such claims may be effected by
the Indemnifying Party without the Indemnified Party's consent (such consent not
to be  unreasonably  withheld  or delayed)  unless the sole  relief  provided is
monetary damages that are paid in full by the  Indemnifying  Party; and (ii) the
Indemnified  Party will have no  liability  with  respect to any  compromise  or
settlement of such claims effected without its consent. If the Indemnified Party
desires to participate  in, but not control,  any such defense,  it may do so at
its sole cost and  expense.  If the  Indemnifying  Party fails to respond to the
Indemnified Party within the Notice Period or otherwise elects not to defend the
Indemnified  Party,  or after electing to defend fails to commence or diligently
pursue such defense,  then the Indemnified  Party shall have the right,  but not
the  obligation,  to undertake or continue  such  defense and to  compromise  or
settle (exercising  reasonable business judgment) the claim or other matter, all
on  behalf,  for  the  account  and  at the  risk  of  the  Indemnifying  Party.
Notwithstanding  the  foregoing,  if the basis of the  proceeding  relates  to a
condition of operations  which existed or were conducted both prior to and after
the Closing  Date,  or if the  Indemnified  Party would  otherwise  be adversely
affected as a result of an adverse decision of such proceeding,  then each party
shall have the same right to participate in

                                                                 

<PAGE>



     the  proceeding at its own expense and at its own risk without either party
having the right of control.

     (b) If requested by the Indemnifying  Party, the Indemnified  Party agrees,
at the Indemnifying  Party's expense and upon  presentation of adequate security
for the payment of such expenses,  to cooperate with the Indemnifying  Party and
its  counsel in  contesting  any claim or demand  which the  Indemnifying  Party
elects to contest,  or, if appropriate and related to the claim in question,  in
making any  counterclaim  against any person asserting the third- party claim or
demand,  or any  cross-complaint  against  any  person.  No  claim  as to  which
indemnification  is sought  under  this  Agreement  may be settled  without  the
consent of the Indemnifying Party.

     (c) If any Indemnified  Party should have a claim against the  Indemnifying
Party hereunder which does not involve a claim or demand being asserted  against
or sought to be collected from it by a third party, the Indemnified  Party shall
send a Claim Notice with respect to such claim to the Indemnifying Party. If the
Indemnifying  Party  disputes  such  claim,  such  dispute  shall be resolved by
litigation  in an  appropriate  court of  competent  jurisdiction  described  in
Section 12.2. If the  Indemnifying  Party does not dispute such claim,  then the
Indemnifying  Party shall pay to the Indemnified  Party the amount of such claim
within thirty days after receipt of such Claim Notice.

     (d) In  connection  with the  matters for which  indemnification  is sought
hereunder  (i) the  Company  agrees to give  Purchaser  and its  representatives
reasonable  access  during  regular  business  hours and upon five  days'  prior
written  notice to the  Company,  to the books,  records  and  employees  of the
Company to the extent such  reasonably  relate to the matters to which the Claim
Notice  relates  and  (ii)  Purchaser   agrees  to  give  the  Company  and  its
representatives  reasonable access,  during regular business hours and upon five
days' prior written notice to Purchaser,  to the books, records and employees of
Purchaser to the extent they reasonably relate to the matters to which the Claim
Notice relates.

     10.04 Basket and Cap  Provisions.  Notwithstanding  any other  provision of
this Agreement:

     (a)  (i) no  amount  shall  be  payable  by the  Company  to  Purchaser  as
indemnification  pursuant  to this  Section  10 unless  and until the  aggregate
amount of all Damages suffered by Purchaser exceeds  $1,500,000,  in which event
the  Company  shall be liable  only for the amount of such  Damages in excess of
$1,500,000; and

     (ii) the aggregate liability of the Company for indemnification  under this
Section 10 shall not exceed $30,000,000.

     (b)  (i) no  amount  shall  be  payable  by  Purchaser  to the  Company  as
indemnification  pursuant  to this  Section  10 unless  and until the  aggregate
amount of all damages suffered by the Company exceeds $1,500,000, in which event
Purchaser  shall be  liable  only for the  amount of such  Damages  in excess of
$1,500,000; and

     (ii) the aggregate  liability of Purchaser for  indemnification  under this
Section 10 shall not exceed $30,000,000.

     (c) Except  for claims  based on fraud,  the  rights of  Purchaser  and the
Company  under this  Section 10 shall be the  exclusive  remedy with  respect to
claims resulting from or relating to any  misrepresentation,  breach of warranty
or a failure to perform any covenant or  agreement of the other party  contained
in this Agreement or in any  certificate or other document (other than a Related
Agreement) delivered to the other party pursuant hereto.

     Section 11. Termination.

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

     (a) By mutual agreement of the Company and Purchaser;


                                                                

<PAGE>



     (b) By either  Purchaser  or the Company if the Closing has not taken place
on or before  November 7, 1997 and the failure to consummate  the Closing is not
caused by a breach of this Agreement by a terminating party;

     (c) By the  Company  or  Purchaser,  as the case may be,  (i) if any of the
conditions  precedent to the  performance of the obligations of the party giving
notice of  termination  shall not have been fulfilled and cannot be fulfilled on
or prior to the Closing and shall not have been waived in writing by such party,
or (ii) if a material  default  shall be made by the other  party in the due and
timely  performance of any of the covenants and agreements herein contained that
cannot be cured on or prior to the  Closing  and  shall not have been  waived in
writing by the non-defaulting parties;  provided,  however, that a party may not
terminate this Agreement  pursuant to this paragraph (e) on the basis of an act,
omission,  occurrence,  event or state of  affairs  that has been  disclosed  in
writing to such party  unless  such party  exercises  such right of  termination
within 30 days of such disclosure; and

     (d) At the option of the Company or Purchaser,  if any action or proceeding
shall  have been  instituted  and remain  pending  before  any  Governmental  or
Regulatory   Authorities  to  restrain  or  prohibit  the  consummation  of  the
transactions contemplated by this Agreement, or if the Federal Trade Commission,
the  Department of Justice or any other  Governmental  or Regulatory  Authority,
including without  limitation the European  Community or the Federal Republic of
Germany,  or any political  subdivision or agency thereof,  shall have taken any
action to restrain or  otherwise  enjoin the  consummation  of the  transactions
contemplated hereby,  provided that neither the Company nor Purchaser shall have
the option to terminate this Agreement as provided  herein after any such action
or notice by any federal,  state or local  government or governmental  agency or
other  person  shall be  withdrawn  or after  any  action by the  Federal  Trade
Commission,  the Department of Justice or any other governmental action shall be
settled.

     11.02  No  Liability.  In the  event  of a  termination  of this  Agreement
pursuant  to  paragraph  11.01(a)  or  paragraph  11.01(d),  there  shall  be no
liability on the parties hereto or any of their respective directors,  officers,
shareholders,  members,  managers, or affiliates as a result of such termination
of this Agreement.  A termination under paragraph 11.01(b) or 11.01(c) shall not
prejudice any claim for damages which any party may have  hereunder or in law or
in equity as a consequence of any breach by any other party of this Agreement.

     11.03  Notice.  Any party hereto may exercise its right of  termination  of
this  Agreement  only by delivering  written  notice to that effect to the other
parties hereto,  provided that such notice is received by the latter party prior
to the Closing.

     Section 12. Miscellaneous.

     12.1  Amendment or Waiver.  Neither this Agreement nor any terms hereof may
be  changed,  waived,  discharged  or  terminated  unless such  change,  waiver,
discharge or termination is in writing signed by the Company and Purchaser.

     12.2 Consent to  Jurisdiction.  Subject to the  provisions of Section 12.3,
each of the  Company  and  Purchaser  hereby  agrees to submit to the  exclusive
jurisdiction of the U.S. Federal courts in the Southern District of the State of
New York,  and consents  that service of process with respect to all such courts
may be made by registered  mail to such Person at the address of such Person set
forth in Section 8 with respect to any disputes arising out of this Agreement.

     12.3 Release of Siemens Aktiengesellschaft. If Purchaser assigns its rights
and  obligations  under this  Agreement  pursuant  to Section  12.5,  so long as
Siemens  Corporation  is subject to the  jurisdiction  of the Federal,  state or
local courts of the United States with respect to claims or disputes relating to
this Agreement,  the Related Agreements or the transactions  contemplated hereby
or thereby,  the Company for itself and its Affiliates  hereby  irrevocably  and
unconditionally  waive and  release all rights and claims that it or any of them
may  thereafter  have that  Purchaser  is or has been at any time subject to the
jurisdiction of the Federal,  state or local courts of the United States arising
out of claims or disputes relating to this Agreement,  the Related Agreements or
the transactions contemplated hereby or thereby.


                                                                 

<PAGE>



     12.4 Waiver of Jury Trial; Trial Costs. Each of the Company, for itself and
its Affiliates,  and Purchaser hereby  irrevocably  waives all right to trial by
jury in any action,  proceeding or counterclaim (whether based on contract, tort
or  otherwise)  arising  out of or  relating  to the  actions of the Company and
Purchaser  or its  Affiliates  pursuant to this  Agreement  in the  negotiation,
administration,  performance or enforcement  thereof. The party in whose favor a
final judgment is rendered shall be entitled to reasonable  costs and reasonable
attorneys' fees.

     12.5  Assignment.  This Agreement is not assignable  except by operation of
law or as each of the  parties  hereto  may agree in writing  and any  attempted
assignment   in   violation   of  this   provision   shall  be  null  and  void.
Notwithstanding the foregoing, Purchaser may assign this Agreement to any of its
wholly-owned  subsidiaries  or  Affiliates  who have the  economic  resources to
fulfill  Purchaser's  obligations  under this  Agreement  agree in writing to be
bound by the terms hereof.

     12.6  Entire  Agreement.   This  Agreement   (including  the  Exhibits  and
Schedules)  sets forth the  entire  understanding  of the  parties  hereto  with
respect to the transactions  contemplated hereby and supersede any prior written
or oral  understandings  with respect thereto including  without  limitation any
letters of intent. The invalidity or unenforceability of any terms or provisions
hereof  shall not affect the  validity  or  enforceability  of any other term or
provision  hereof.  The  headings  in  this  Agreement  are for  convenience  of
reference only and shall not alter or otherwise affect the meaning hereof.  This
Agreement may be executed in any number of  counterparts  which  together  shall
constitute  one  instrument and shall be governed by and construed in accordance
with laws of the State of Delaware  without  giving regard to the  principles of
conflicts of law, and shall bind and inure to the benefit of the parties  hereto
and their respective successors and permitted assigns.

     12.7 Expenses.  Except as otherwise  expressly  provided in this Agreement,
the Company agrees to pay,  without right of reimbursement  from Purchaser,  the
costs  incurred by the Company,  and Purchaser  agrees to pay,  without right of
reimbursement from the Company, the costs incurred by Purchaser, incident to the
preparation  and  execution of this  Agreement  and the Related  Agreements  and
performance  of  their  respective  obligations  hereunder,  whether  or not the
transactions  contemplated by this Agreement and the Related Agreements shall be
consummated,  including, without limitation, the fees and disbursements or legal
counsel,  accountants  and  consultants  employed by the  respective  parties in
connection with the transactions  contemplated by this Agreement and the Related
Agreements.

     12.8 Public Announcements. At all times at or before the Closing, except as
required by law or on the advice of counsel,  the Company and Purchaser will not
issue or make any release to the press or other public  disclosure  with respect
to this Agreement or the transactions contemplated hereby without the consent of
the other party,  will not make any statement to any customer or supplier of the
Company with respect to this Agreement or the transactions  contemplated hereby.
The Company and Purchaser  will also obtain the other party's prior  approval of
any press release to be issued immediately  following the Closing announcing the
consummation of the transactions contemplated by this Agreement.


     IN WITNESS  WHEREOF,  the parties hereto have caused their duly  authorized
officers  to execute  and  deliver  this  Agreement  as of the date first  above
written.


                                            BREED TECHNOLOGIES, INC.


                                            By:
                                                Name:
                                                Title:


                                                                 19

<PAGE>



                                            SIEMENS AKTIENGESELLSCHAFT


                                            By:
                                                Name:
                                                Title:


                                            By:
                                                Name:
                                                Title: