This MASTER AGREEMENT entered into as of the 1st day of July, 1996 among

     IAO - Industrie  Riunite  S.p.A.,  an Italian  corporation  with offices at
Strada Torino, 23 - BEINASCO (ITALY) represented by Mr. Giovanni Rigamonti

     GALLINO COMPONENTI  PLASTICI S.p.A., an Italian corporation with offices at
Strada Torino 23, BEINASCO (ITALY) represented by Mr. Giovanni Rigamonti

     CARIFIN S.p.A., an Italian corporation with offices at Via Quintiliano 40 -
Milano, represented by Mr. Giovanni Rigamonti

     MACCHI ARTURO S.r.l. - an Italian limited liability company with offices at
Via Concordia, 49 - RENATE (ITALY) represented by Mr. Aldo Besozzi

     GRUPPO PLASTICO  INDUSTRIALE  S.r.l.,  an Italian limited liability company
with offices at Via Mario Leoni, 10 - TORINO (ITALY) represented by Mr. Vittorio
Maltempi

     EMILIO CAZZANIGA,  an Italian individual,  represented by Mr. Ermanno Piana
his attorney-in-fact (hereafter jointly referred to as the "VENDORS")

                                    and

     BREED TECHNOLOGIES,  INC., a Delaware corporation, with offices at 5300 Old
Tampa Highway,  Lakeland,  FL 33811 - USA represented by Charles J. Speranzella,
Jr. (hereinafter referred to as "BREED")


<PAGE>



WITNESSETH:

WHEREAS,  VENDORS  own,  directly  or  indirectly,  100% of the shares or quotas
constituting  the entire  capital of: FAS S.p.A.,  an Italian  corporation  with
registered  office at  FERENTINO  (Frosinone)  Via Asse  Attrezzato,  216 (FAS),
AUTOAVIO S.r.l.,  an Italian limited liability company with registered office at
GUARDAMIGLIO (Milano), Via (027) maggio, 8 (AUTOAVIO), A.P.CO.-Advanced Plastic
Company S.r.l.,  an Italian limited  liability company with registered office at
ANAGNI  (Frosinone),  Via della  Riserva I tronco  (A.P.CO.),  AG  INTERNATIONAL
S.r.l.,  an Italian limited  liability company with registered office at TORINO,
Via Susa,  35 (AG),  IRON SUD S.r.l.,  an Italian  corporation  with  registered
office at LIMATOLA  (Benevento),  Localita Aia Annunziata (IRON SUD), and 51% of
the quotas of ARAS S.r.l.,  an Italian limited liability company with registered
office at GIAVENO (Torino), Via Beale, 40 (ARAS),  (hereinafter jointly referred
to as the  "Companies");  the GALLINO  trademark,  the real  property  hereafter
listed as well as the business and assets  constituting the business carried out
by GPC; and

WHEREAS,  the parties have agreed to enter into a series of agreements  whereby,
through purchase of GALLINO trademark, business of GCP on a going concern basis,
the  purchase  of  shares/quotas  of the  Companies  and  the  purchase  of real
property,  BREED directly or indirectly  through its designee/s (as from time to
time identified in the relevant agreements herewith enclosed) will carry out the
business  previously carried out by GCP and control each of the Companies in the
same percentage and/or proportion previously held by the VENDORS;

NOW, THEREFORE, the parties agree as follows:

1.       As of the 1st day of July 1996, the parties have entered into this 
         MASTER AGREEMENT.

2.       PRIOR TO CLOSING ACTIONS
2.1      Prior to the Closing,  as hereafter defined,  the VENDORS have taken or
         cause to be taken the following  actions:  2.1.1 The resignation of the
         Sole  Director  of GALLINO  PLASTURGIA;  2.1.2 The  election  of a Sole
         Director  designated  by BREED;  2.1.3 The sale to BREED (and/or to its
         designee) of 100% of the quotas representing the outstanding capital of
         GALLINO PLASTURGIA S.r.l. (GP) for the purchase
                  price set forth on Exhibit "1" hereto;
         2.1.4    the grant of the  Power(s)  of  Attorney  and other  corporate
                  actions necessary to sign all required  documents,  agreements
                  and deeds to be  executed  at the Closing on behalf of GP, the
                  VENDORS, the Companies or any of them.



<PAGE>



3.       CLOSING

3.1      Except for the San Benigno and Renate-Via  Concordia 55- property,  the
         conclusion of the transactions provided for or contemplated herein will
         take place on July 1, 1996 at the offices of Notary Giovanni M. Marocco
         in Turin,  Italy or at such  other  time and place as the  parties  may
         agree in writing (the "Closing"). The closing on San Benigno and Renate
         properties shall occur by July 31, 1996.

4.       CLOSING ACTIONS

4.1      At the  Closing,  the  VENDORS  shall - or shall  cause  the  Companies
         concerned,  through its or their authorized representatives - and BREED
         and/or its designees shall:

         4.1.1    execute and deliver the Representations and Warranties 
                  Agreement in the text annexed hereto as Exhibit "1";
         4.1.2    execute  and  deliver  the  Agreement  for the sale of GALLINO
                  trademark to GP in the text annexed  hereto as Exhibit "3" and
                  pay the purchase price as set forth in the Exhibit "1" hereto;
         4.1.3    execute  and  deliver  the  Notarial  deed of  transfer of the
                  Business of GCP on a going concern basis,  in the text annexed
                  hereto as Exhibit "4" and pay the purchase  price as set forth
                  in the Exhibit "1" hereto;
         4.1.4    execute and deliver the notarial deeds of transfer of real 
                  property hereafter listed and pay the purchase price for each
                  as set forth in the Exhibit "2" hereto.  The real property is 
                  summarily described in Exhibit "5" hereto.  The exact 
                  description to be contained in the Notarial Deeds of Transfer
                  shall be prepared by Notary Antonio M. Marocco of Turin;
         4.1.5    execute  the   agreement  of  sale  of  the  shares  of  stock
                  constituting  100% of the  capital  of IRON SUD and FAS in the
                  text annexed  hereto as Exhibit "6" and pay the purchase price
                  for each as set forth in the Exhibit  "1" hereto;  endorse the
                  share certificates to BREED's designee and record the transfer
                  on the shareholders' registers of IRON SUD and FAS;
         4.1.6    execute  and  deliver  the  notarial  deeds of transfer of the
                  quotas representing 51% of the capital of ARAS and 100% of the
                  capital of AG,  AUTO AVIO and  A.P.CO.  in the text of Exhibit
                  "7" hereto  together  with such  further  documents  as may be
                  required by law before the Notary  Antonio M.  Marocco and pay
                  the  purchase  price for each as set forth in the  Exhibit "1"
                  hereto.

4.2      The real  properties to be transferred  pursuant to Section 4.1.4 shall
         be transferred free and clear of all mortgages,  liens and encumbrances
         except for those listed in Exhibit "8".

4.3      With the  exception  of FAS,  the shares  and quotas to be  transferred
         pursuant to  Sections  4.1.5 and 4.1.6  shall be  transferred  free and
         clear  of  all  mortgages,   pledges,  liens,  encumbrances,   security
         interests, charges, claims, restrictions and options.

4.4     The signatures of the Deeds and/or Agreements of Transfer of the shares,
        quotas,


<PAGE>



         trademarks  and real property  provided for herein,  the payment of the
         purchase  price(s) and the  performance of obligations  further thereto
         shall not prejudice or effect the validity and enforceability of any of
         the  provisions  of  this  Agreement  and  of the  Representations  and
         Warranties Agreement executed contemporaneously  herewith, all of which
         will  survive  the  Closing  and  which  will  prevail  over any of the
         provisions of said Deeds or Agreements of Transfer.

4.5      The deposit of sixteen  billion Lire  (Lit.16,000,000,000)  made by the
         Purchaser on May 16, 1996 shall be applied in  accordance  with Exhibit
         4.5.

5.       OTHER ACTS

5.1      Each  party  hereto  shall  do and  perform  or  cause  to be done  and
         performed  all such  further  acts and  things  and shall  execute  and
         deliver all such other agreements, consents, certificates,  instruments
         and documents as the other party hereto reasonably may request in order
         to carry out the intent and  accomplish  the purposes of this Agreement
         and the consummation of the transactions contemplated hereby.

5.2      In particular,  at or immediately after the Closing,  the VENDORS shall
         cause the  Directors  and Auditors (if any) of each of the Companies to
         resign in order to allow the election of new corporate  bodies composed
         by BREED's designees.

5.3      BREED represents to VENDORS that, prior to the execution hereof, it has
         filed the  communication  required by law with the  Italian  Anti-Trust
         Authority (Autorita Garante della Concorrenza e del Mercato).

         BREED represents to VENDOR that the above mentioned  communication  has
         been drafted on the basis of the information  made available by each of
         the  parties  involved  in the  transaction.  BREED  has  used its best
         efforts  to  prepare  the  communication  in a due and  complete  form.
         Nonetheless, the parties acknowledge that the denial of approval by the
         Italian  Anti  Trust  Authority  to the  transaction  described  in the
         Exhibit  1  through  8  hereto,  may  require  the  rescission  of  the
         transaction.  Consequently if the Italian Anti Trust Authority does not
         approve the transaction as agreed,  the parties undertake in good faith
         to consider and adopt the action  required to make it acceptable to the
         Anti Trust Authority.  If however the amendments to the transaction are
         not agreed upon  and/or are not  acceptable  to the Italian  Anti Trust
         Authority,  all the transfers and other  obligations  will be rescinded
         with retroactive effect as of the Closing.

5.4      BREED  hereby  undertakes  that  within  the  period of six (6)  months
         following  the Closing it shall  obtain the  release of the  guarantees
         granted  by IAO  and/or by  Rigamonti  personally  to  secure  the loan
         executed  between  GCP and  Cassa  di  Risparmio  di  Parma e  Piacenza
         transferred  on a going concern basis to GP together with the assets of
         GCP as described in Exhibit 4 to this Master Agreement.

6.       NON COMPETITION


<PAGE>



6.1      After the Closing, the VENDORS shall not compete directly or indirectly
         with the business  carried out by BREED,  directly  through each of the
         Companies  and/or through  GALLINO  PLASTURGIA,  for the period of five
         years.

7.       CONFIDENTIALITY

7.1      Neither  party to this  Agreement  will make any public  disclosure  or
         publicity  release in respect of the subject  matter  contained  herein
         without the written  consent of the other parties until the  fulfilment
         of the Closing Actions provided for in Article 4 above.

8.       GOVERNING LAW

8.1      The  laws of  Italy  shall  govern  the  interpretation,  validity  and
         performance of this  Agreement.  This Agreement has been executed in an
         English  language text.  Should a translation  hereof or of any Exhibit
         hereto  be  prepared  and/or  executed-also  in  order to  comply  with
         mandatory  provisions of the Italian laws-in the Italian language,  the
         English text shall  prevail.  In case of  controversy on the meaning of
         the Agreement,  the Parties shall make reference to the English text in
         order to interpret the same.

9.       ARBITRATION

9.1      Any  dispute  arising  between  the  parties  in  connection  with  the
         validity, termination,  interpretation or performance of this Agreement
         shall be submitted to the decision of a Panel of three (3) Arbitrators,
         which  shall  decide  in  accordance  with the law ("in via  rituale  e
         secondo  diritto").  To the  ends  of  arbitration,  the  VENDORS  will
         constitute  a sole party.  The party  wishing to submit to  Arbitration
         shall appoint its  Arbitrator and give notice to the other party of its
         appointment.  Within  fifteen (15) days of receipt of this notice,  the
         other party shall appoint its  Arbitrator  and shall give notice to the
         first  party  of its  appointment.  Within  fifteen  (15)  days  of the
         appointment of the second Arbitrator,  the two Arbitrators so appointed
         shall agree upon the appointment of a third Arbitrator. If no agreement
         is reached,  the third Arbitrator shall be appointed,  upon application
         of the most diligent  party, by the President of the Court of Appeal of
         Milan. Similarly, if the party to whom the notice of the appointment of
         an Arbitrator has been given does not, in turn, appoint its Arbitrator,
         said  Arbitrator  shall  also be  appointed  together  with  the  third
         Arbitrator by the President of the Court of Appeal of Milan, which will
         also  provide  for  the  substitution  of any  Arbitrator  who  dies or
         resigns.  Arbitration  shall be conducted  in the Italian  language and
         take place in Milan.

10.      NOTICES

10.1     All notices,  in connection with this Agreement,  shall be dated and in
         writing,  delivered by personal delivery, by registered mail, telegram,
         telecopier  or courier  service to the  address set forth below or such
         other  address as such party may  specify  for the purpose by notice to
         the other.



<PAGE>



         Each  notice  shall  be  effective  when  delivered  at  the  following
         addresses: If to VENDORS:
         IAO INDUSTRIE RIUNITE S.p.A.
         Strada Torino, 23
         BEINASCO

         If to BREED:
         BREED TECHNOLOGIES, INC.
         5300 Old Tampa Highway
         Lakeland, FL 33811 USA

         with a further copy to:
         Bruno R. Pavia, Esq.
         PAVIA e ANSALDO
         Via dell'Annunciata, 7
         20121 Milan, Italy
         Fax: 02 653306

11.      EXPENSES

         11.1     Each  party  hereto  shall pay its  legal  and other  expenses
                  incurred in connection with this Agreement.  Notarial fees and
                  expenses shall be for the account of BREED.

IN WITNESS  WHEREOF,  the parties have executed this Agreement as of the day and
date first above written.

BREED TECHNOLOGIES, INC.
By:

IAO INDUSTRIE REUNITE S.p.A.
By:

GALLINO COMPONENTI PLASTICI S.p.A.
By:

CARIFIN S.p.A.
By:

MACCHI ARTURO S.r.l.
By:

GRUPPO PLASTICO INDUSTRIALE S.r.l.
BY: /s/Emilio Cazzaniga
EMILIO CAZZANIGA


<PAGE>



LIST OF EXHIBITS

1 (A)  Purchase  price and (B)  application  of  deposit 2  Representations  and
Warranties  Agreement  3 Sale of  GALLINO  trademark  4 Deed  of  sale of  GCP's
business on a going concern  basis 5 Deed of transfer of real  properties 6 Deed
of transfer of shares of IRON SUD-FAS 7 Deed of transfer of quotas of ARAS, A.G.
INTERNATIONAL, AUTO AVIO, A.P.CO. 8 List of mortgages, liens, encumbrances

Exhibit 1

A. PURCHASE PRICE (Net of VAT)

TRANSFER OF GALLINO PLASTURGIA                              Lit      100,000,000
SALE OF GALLINO TRADEMARK                                   Lit    1,000,000,000
GCP BUSINESS ON A GOING CONCERN BASIS                       Lit   38,740,122,642
TRANSFER OF NICHELINO REAL ESTATE                           Lit    9,739,880,000
TRANSFER OF COPIANO REAL ESTATE                             Lit    6,075,600,000
TRANSFER OF RIVALTA REAL ESTATE                             Lit   10,448,800,000
TRANSFER OF RENATE, via Concordia 55                        Lit    3,544,380,000
TRANSFER OF RENATE, via Concordia 49                        Lit    2,710,300,000
TRANSFER OF SAN BENIGNO, via Concordia 49                   Lit   13,571,400,000
TRANSFER OF APCO QUOTAS, via Concordia 49                   Lit   16,500,000,000
TRANSFER OF FAS SHARES, via Concordia 49                    Lit   11,500,000,000
TRANSFER OF IRON SUD, via Concordia 49                      Lit    3,400,000,000
TRANSFER OF AG QUOTAS, via Concordia 49                     Lit   15,500,000,000
TRANSFER OF ARAS, via Concordia 49                          Lit      100,000,000
TRANSFER OF AUTOAVIO, via Concordia 49                      Lit      100,000,000
                                                            --------------------

                                                            Lit

B. APPLICATION OF Lit 16,000,000,000 DEPOSIT

SALE OF GALLINO TRADEMARK                                   Lit    1,190,000,000
TRANSFER OF IRON SUD SHARES                                 Lit    3,400,000,000
TRANSFER OF SAN BENIGNO REAL ESTATE                         Lit    5,229,497,600
TRANSFER OF NICHELINO                                       Lit    1,850,577,200
TRANSFER OF COPIANO                                         Lit    1,154,364,000
TRANSFER OF RIVALTA                                         Lit    1,985,272,000
TRANSFER OF RENATE, via Concordia 49                        Lit      514,957,000
TRANSFER OF RENATE, via Concordia 55                        Lit      675,332,200
                                                           --------------------

                                                            Lit   16,000,000,000


<PAGE>



<TABLE>
<CAPTION>
ACQUISITION OF GALLINO GROUP OF COMPANIES

DETERMINATION OF PURCHASE PRICE-REAL ESTATE
(Amounts in Lire)


                       Purchase Price      Less Mortgage           :equals Net Proceeds
<S>                    <C>                 <C>                     <C>           
Rivalta                    10,448,800,000                     0        10,448,800,000
Renate (Macchi)             3,554,380,000       (2,213,000,000)         1,341,380,000
Renate (GCP)                2,710,300,000                     0         2,710,300,000
Nichelino                   9,739,880,000       (4,726,000,000)         5,013,880,000
Copiano                     6,075,600,000       (4,571,000,000)         1,504,600,000
San Benigno                13,571,400,000                     0        13,571,400,000
Total-Real Estate          46,100,360,000       (11,510,000,000        34,590,360,000
</TABLE>

<TABLE>
<CAPTION>
DETERMINATION OF PURCHASE PRICE-SIX SISTER COMPANIES
(In billions of Lire)

                  A             B            C             D                                                           E
                    12/31/95     Appraised     12/31/95     Market in     Appraised     12/31/95      Market in        Total
                   Equity of       Value         Book       excess of       Value         Book value  Excess of        Value
                    Company         Real      value real      NBV-RE         M&E          M&E          NBV-M&E       (Rounded)
                                   Estate       estate         (B-C)                                    (B-C)           (A+D)
<S>               <C>           <C>          <C>           <C>            <C>           <C>            <C>           <C>
APCO                      10.7          10.2           4.8          5.3          17.2         16.8             0.4           16.5
FAS                       10.3           6.3           7.0        (0.6)          10.6          8.8             1.9           11.5
FAS Rome                   0.0           0.0           0.0          0.0           0.0          0.0             0.0            0.0
Total FAS                 10.3           6.3           7.0        (0.6)          10.6          8.8             1.9           11.5

IRON SUD                   3.9           2.4           1.3          1.1           4.1          5.7           (1.6)            3.4
AG INTER.                  7.8           N/A           N/A          0.0           8.7          1.0             7.7           15.5
ARAS                       0.1           N/A           N/A          0.0           N/A          N/A             0.0            0.1
AUTO AVIO                  0.1           N/A           N/A          0.0           N/A          N/A             0.0            0.1
TOTALS                    32.9          18.9          13.1          5.8          40.6         32.2             8.4           47.1
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
GOING-CONCERN BUSINESS OF GALLINO COMPONENTI PLASTICI, S.p.A. ("GCP")
                                                           Value

Description of GCP Assets Acquired             In Lire             In US$   Comments
<S>                                         <C>                  <C>        <C>                                       
Inventory                                   33,684,324,746       21,872,938 Capped at Lit 35 Billion-Final value determined by audit
Gallino M&E (Rivalta, Nichelino HQ)         27,837,400,000       18,076,234 Advanced values-AA
GPI M&E (S Ben, Copiano, Grugliasco)        40,484,800,000       26,288,831 Final value determined by appraisal
Additional Fixed asset Purchases             3,407,257,000        2,212,505 Capped at Lit. 8 Billion-Final value determined by audit
Other                                        1,929,091,257        1,252,657 INAIL, Employee advance, prepaid INAIL, supplier advance
Provision                                 (10,843,060,000)      (7,040,948)
Macchi Machinery and Equipment               4,720,500,000        3,065,260 Appraised-AA
Goodwill                                     5,000,000,000        3,246,753
Intellectual Property                        1,000,000,000          649,351
                                     --------------------- ----------------
Total Assets                               107,220,313,003      $69,623,580


Value as of 5/31/96

Less Specific Liabilities Assumed:             In Lire             In US$
Accrued INAIL                                 (503,248,587)        (326,785) Advances to employees
TFR and other personnel liabilities        (33,059,593,688)      21,467,269) Final value determined by audit
Cassa di Risparmio                         (33,465,863,014)     (21,731,080) Final value determined by audit
Sabatini loan                               (1,451,485,072)        (942,523) Final value determined by audit
                              ----------------------------- ------------------------
Total Liabilities Assumed                  (68,480,190,361)     (44,467,656)
                              ----------------------------- ------------------------
Net Purchase Price                           38,740,122,642     $25,155,924
                              ............................. ........................

Exchange Rate (Lit./US$)            1,540
</TABLE>
<PAGE>
EXHIBIT 2

REPRESENTATIONS AND WARRANTIES AGREEMENT

This  REPRESENTATIONS AND WARRANTIES AGREEMENT (the "Agreement") entered into as
of July 1st, 1996 among:

Breed Technologies,  Inc., a Delaware corporation, with principal office at 5300
Old  Tampa  Highway,   Lakeland,  FL  33807-3050,   represented  by  Charles  J.
Speranzella Jr. (hereinafter "Breed")

Gallino  Plasturgia Srl, an Italian  corporation with principal office at Strada
Torino 23,  Beinasco,  represented  by Charles J.  Speranzella  Jr.  (herinafter
"Gallino")

(Jointly the "Purchaser")
                                                     -on one part-
                                      and

IAO-Industrie  Riunite SpA, an Italian  corporation  with  registered  office at
Strada Torino 23, 10092 Beinasco (To),  represented  by Mr.  Giovanni  Rigamonti
("IAO");

Gallino Componenti  Plastici SpA, an Italian  corporation with registered office
at Strada Torino 23, 10092 Beinasco (To),  represented by Mr. Giovanni Rigamonti
("GCP")

Carifin SpA, an Italian  corporation  with registed office at vai Quintiliano 40
Milano represented by Mr. Giovanni Rigamonti ("Carifin")

Gruppo  Plastico  Industriale  Srl, an Italian  limited  liability  company with
registered  office at via Mario Leoni,  10 Torino,  represented by Mr.  Vittorio
Maltempi ("GPI")

Emilio Cazzaniga, represented by Mr. Ermanno Piana ("EC")

Macchi Arturo Srl, an Italian limited  liability  company with registered office
at via Concordia 49 Renate (Milano), represented by Mr. Aldo Besozzi ("Macchi")

Giovanni Rigamonti ("GR", as a guarantor (collectively, the "Sellers")

                               -on the other part-

WHEREAS, IAO owns the 99% of the capital of GCP, while the remaining 1% is owned
by Carifin; and

WHEREAS, IAO, directly or indirectly, controls the Sellers; and

WHEREAS, pursuant to a certain Master Agreement, entered into as of July 1, 1996
(the "Master


<PAGE>



Agreement"),  the  Purchaser  will  purchase on a going  concern  basis from GCP
certain  assets and assume certain  liabilities  of the business  carried out by
GCP; and

WHEREAS,  pursuant to the Master Agreement,  Purchaser's  designated  subsidiary
will purchase the shares of stock  constituting  100% of the capital of FAS SpA,
an Italian stock corporation with registered office at via Asse Attrezzato 216 -
Ferentino  (Frosinone)  ("FAS") and Iron Sud SpA, an Italian  stock  corporation
with registered office at Localita Aia Annunziata - Limatola  (Benevento) ("Iron
Sud") (the "Companies"); and

WHEREAS,  pursuant to the Master Agreement,  Purchaser's  designated  subsidiary
will purchase the quotas representing 51% of the capital of ARAS Srl, an Italian
limited  liability  company  with  registered  office  at via Beale 40 - Giaveno
(Torino)   ("ARAS")  and  quotas   representing   100%  of  the  capital  of  AG
International  Srl, an Italian limited  liability company with registered office
at via Susa 35 - Torino  ("AG"),  AutoAvio  Srl,  an Italian  limited  liability
company with registered office at via 1 maggio 8 - Guardamiglio  (Milano) ("Auto
Avio") and A.P. CO. - Advanced Plastic Company Srl, an Italian limited liability
company  with  registered  office  at  via  della  Riserva  I  tronco  -  Anagni
(Frosinone) ("A.P. CO.") (the "Limited Liability Companies") ; and

WHEREAS,  pursuant to the Master Agreement,  Purchaser's designated subsidiaries
will  purchase  real  property  owned by  Sellers  located at  Rivalta,  Renate,
Nichelino Copiano and San Benigno; and

WHEREAS, in the absence of audited financial statements or due diligence reports
and to induce  Purchaser to enter into the Master  Agreement  and to perform the
obligations provided for thereunder, including the payment of the purchase price
as set  forth in  Exhibit  "1" to the  Master  Agreement,  each of the  Sellers,
jointly and severally  represent and warrant to the Purchaser and agree with the
Purchaser as follows:

1.1      Organization and Good Standing
         Each of the  Sellers,  except  for EC and Gr,  is a  corporation,  duly
         organized,  validity  existing,  and in good standing under the laws of
         Italy.

     1.2  Except as set forth in Exhibit 1.2 hereto, each of the Sellers has all
          requisite  corporate power and authority to enter into and deliver the
          Master Agreement and this Agreement and to consummate the transactions
          completed  thereunder . The  execution,  delivery and  performance  by
          Sellers of the Master  Agreement and this  Agreement , the transfer of
          Real  Property,  the Sale of the  Business  of GCP on a Going  Concern
          Basis,  the transfer of the Shares of the  Companies and of the Quotas
          of the  Limited  Liability  Companies  will not  result in a breach or
          violation of, or a default under,  the certificate of incorporation or
          bylaws of Sellers or any  agreement or instrument to which Sellers are
          a party  or by which  Sellers  or their  properties  are  bound or any
          statute, rule, regulation or judgement, injunction, order or decree of
          any court,  governmental or administrative  agency to which Sellers or
          their  assets or property  are  subject,  or require the  obtaining by
          Sellers of any  consent,  approval,  authorization,  permit or license
          from, or filling with, any governmental or administrative authority or
          other person. The Master Agreement,


<PAGE>



         the  agreements,  deeds  and  transfers  executed  thereunder  and this
         Agreement  constitute  the  legal,  valid  and  binding  obligation  of
         Sellers, enforceable in accordance with their terms.

1.3      Litigation
         Except as set forth in Exhibit 1.3 hereto,  no action or  proceeding is
         pending or threatened by any court,  tribunal or governmental body, and
         no claim or demand has been made against Sellers seeking to restrain or
         prohibit or to obtain substantial damages or other relief in connection
         with the consummation of the transactions contemplated hereby.

1.4      Existence of Good Standing
         Each  of  the  Companies  and  the  Limited  Liability  Companies  is a
         corporation,  duly organized,  validity existing,  and in good standing
         under the laws of Italy.

1.5      Authority ; No Conflict
         Except as set forth in Exhibit 1.5 hereto,  each of the  Companies  and
         the Limited  Liability  Companies and GCP has all  requisite  corporate
         power and authority to: (a) own,  lease or operate its  properties  and
         assets and to carry on its businesses as presently conducted; (b) enter
         into and  deliver  the Master  Agreement  and this  Agreement;  and (c)
         consummate the transactions contemplated therein and therein including,
         without  limitation,  to sell and transfer  the Shares and Quotas,  the
         Real  Property to Purchaser  and its  designee,  as well as transfer to
         Purchaser the business of GCP on a going concern basis.  The execution,
         delivery and  performance of such transfers will not result in a breach
         or violation of, or a default under,  the certificate of  incorporation
         or by-laws of either of the Companies,  the Limited Liability Companies
         or GCP or any  agreement or  instrument  to which any of them are their
         properties are bound,  result in the acceleration of , or cause them to
         become  obligated  to repay or prepay any  obligations  or claims which
         otherwise are not now due and owing , or violate or breach any statute,
         rule, regulation or judgement, injunction, order or decree of any court
         or governmental or administrative  agency to which any of them or their
         assets or properties is subject , nor require the obtaining by any such
         party of any consent, approval, authorization,  permit or license from,
         or filing with, any governmental or  administrative  authority or other
         person  except  for  the  Anti  Trust  communication  performed  by the
         Purchaser.

1.6      Corporate Action
         Each of the  Sellers  has,  in  accordance  with  Italian Law taken all
         corporate  action  necessary to propose and resolve the transfer of the
         Shares,  Quotas and Real Property contemplated hereby and by the Master
         Agreement,  as  well  as the  transfer  of  business  of GCP on a going
         concern  basis;  each of the  Sellers  has duly  waived its  respective
         preemptive rights (if any) to purchase.

1.7      Capitalization
         Except as set forth in  Exhibit  1.7  hereto,  there are  nooutstanding
         resolutions of Shareholders' or Quotaholders' Meetings of the Companies
         or the Limited Liability Companies  authorizing the increase of capital
         or issuance of any class of Shares or


<PAGE>



          Quotas. All of the  Shares and  Quotas  are duly  authorized,  validly
          issued  and fully  paid,  and are free and  clear of any  pledge,
          burden or enforcement proceeding.

1.8      Option and Other Share Rights
         (a)      There are no existing options,  warrants,  calls, commitments,
                  agreements  or  rights  requiring,   nor  any  convertible  or
                  exchangeable Shares,  Quotas, bonds or debentures  outstanding
                  which, upon exercise or conversion, would require the issuance
                  or sale of any additional  Shares of the  Companies'  stock or
                  Quotas of the Limited  Liability  Companies or any  securities
                  convertible into capital or the purchase, return or redemption
                  of capital or other securities;
         (b)      there  are  no  existing  subscription  or  preemptive  rights
                  affecting or relating to the capital stock of the Companies or
                  Quotas of the Limited  Liability  Companies  or, to the extent
                  such preemptive rights exist in connection herewith,  the same
                  have been waived, relinquished or not exercised.

1.9      Compliance with Organizational Documents, Laws and Contracts
         Except as set forth in Exhibit 1.9  hereto,  none of the  Sellers,  the
         Companies  or the Limited  Liability  Companies  is in violation of its
         certificate  or  articles  of  incorporation   or  by-laws,   or  other
         organizational  documents, or of any law, ordinance,  administrative or
         governmental rule or regulation  applicable to either of them or of any
         decree of any court or governmental  agency or body having jurisdiction
         over them, or in default in any material  respect in the performance of
         any  obligation,   agreement  or  condition   contained  in  any  bond,
         debenture, note, or any other evidence of indebtedness, including short
         term and medium term loan agreements,  contracts for the sale of goods,
         or in any  material  agreements,  including,  without  limitation,  any
         contracts  for the sale of goods  pursuant  to Law No. 1329 of November
         28,  1965,  as amended  (the  "Sabatini  Law")' or customer or supplier
         contracts,  indentures,  leases or other instruments to which either of
         them is a party or by which  either of them or any of their  respective
         properties  may  be  bound.  All  loan  payments,   debt  and  contract
         obligations  are current and are being paid in a timely manner,  before
         default, in the ordinary course of business.

1.10     Title to Assets
         Except as set forth in Exhibit 1.10 hereto, the Companies,  the Limited
         Liability  Companies  and GCP  have  good and  marketable  title to the
         property  and  assets  owned  by them,  as  shown  on their  respective
         Financial  Statements  as at December 31,  1995,  free and clear of all
         pledges , liens,  burdens or  enforcement  proceedings,  and except for
         property  and  assets  which may have been  disposed  of by them in the
         ordinary  course  of  business  since  the  date  of  their  respective
         Financial Statements.

1.11     Financial Statements
         The Financial  Statements  of the  Companies and the Limited  Liability
         Companies as at December 31, 1995  enclosed  hereto as Exhibits 1.11 a,
         b,  c, d, e and f have  been  prepared  in  accordance  with  generally
         accepted Italian accounting  principles  consistently applied. They are
         true,  complete  and  correct  in  all  material  respects  and  fairly
         represent the properties,  assets, liabilities,  financial position and
         results of operations for the period


<PAGE>



         stated. There are no facts,  circumstances or conditions that will give
         rise to a liability  or  obligation  of any kind and nature  whatsoever
         which is not reflected or disclosed in the Financial Statements.

          1.12 Events  Subsequent  to December 31, 1995 Since  December 31, 1995
               and  through  the date  hereof,  there has not been any  material
               adverse change in the business, financial condition,  operations,
               results of operations or future  prospects of the Companies,  the
               Limited  Liability  Companies  and/or GCP.  Without  limiting the
               generality of the foregoing,  except in connection with effecting
               the  transactions  contemplated by the Master  Agreement and this
               Agreement,  since that date, the Companies, the Limited Liability
               Companies and/or GCP have not: (a) relocated,  removed from their
               facilities,  disposed of, sold , leased,  transferred or assigned
               any of their assets,  tangible or  intangible,  other than in the
               ordinary  course of  business;  (b) entered  into any  agreement,
               contract  or lease (or series of related  agreements,  contracts,
               leases and licenses) outside the ordinary course of business; (c)
               accelerated,  terminated, modified or canceled in any respect any
               material  agreement,  contract,  lease or  license  (or series of
               related  agreements,  contracts,  leases and licenses)  involving
               more than Lit  100,000,000  to which they are a party or by which
               they are bound,  except in the ordinary  course of business;  (d)
               voluntarily  attached or voluntarily  permitted any pledge, lien,
               burden or  enforcement  proceeding  to be  attached to any of its
               properties  or  assets,  tangi- ble or  intangible;  (e) made any
               capital  expenditure (or series of related capital  expenditures)
               since May 16, 1996 either involving more than Lit. 150,000,000 or
               outside the ordinary course of business; (f) delayed or postponed
               the payment of any accounts payable or other liabilities  outside
               the ordinary  course of business;  (g)  experienced  any material
               damage,   destruction   or  loss   (whether  or  not  covered  by
               insurance),  on any of its properties or assets, including any of
               its manufacturing facilities, in excess of Lit. 150,000,000;  (h)
               entered into any new agreements  with its  employees,  written or
               oral,  or  modified  the terms of any such  existing  contract or
               agreement in any material respect, outside the ordinary course of
               business;  (i) granted any increase in the base  compensation  or
               benefits of any of its employees  outside the ordinary  course of
               business;  (k) (i)  depleted its  inventory  of raw  materials or
               supplies  below  normal  operating   levels  (ii)   intentionally
               increased the volume, outside the ordinary course of business, of
               such raw  materials or supplies,  or (iii) built up its inventory
               of  finished  goods  from  normal  operating  levels;  (l) to the
               present  knowledge  of the  Sellers  there has not been any other
               material occurrence,  event, incident,  action, failure to act or
               transaction outside of the ordinary course of business which had,
               or is reasonably likely to have, a material adverse effect on the
               Companies,  the  Limited  Liability  Companies  and /or GCP;  (m)
               resolved to pay or have paid dividends or any other  distribution
               to their


<PAGE>



          shareholders or quotaholders;  (n) booked any accounts  receivable for
          which the revenue has not been realised or properties have not been 
          sold or shipped.

1.13     Undisclosed Contingent Liabilities
         None of the Companies , the Limited Liability Companies nor GCP has any
         liability  which would be  required to be set forth in a balance  sheet
         prepared in  accordance  with  generally  accepted  Italian  accounting
         principles  consistently  applied,  including  a  liability  for taxes,
         except for (a)  liabilities set forth on the face of the balance sheets
         as of December  31, 1995 and (b)  liabilities  which have arisen  after
         December 31, 1995 in the ordinary course of business, and none of which
         result  from,  arise out of,  relate  to, is in the  nature of , or was
         caused  by  any  breach  of  contract,   breach  of   warranty,   tort,
         infringement  or violation of law.  None of the Companies , the Limited
         Liability Companies nor GCP have any contingent  liabilities or claims,
         including, without limitation, any arising out of or resulting from the
         sale or purchase of any business or interest in any business previously
         owned and sold, or not owned but acquired, by any of them. None of them
         has incurred any  liability or  obligation,  direct or  contingent,  or
         entered into any  transaction,  not in the ordinary course of business,
         that is  material  to them and  there  has not been any  change  in the
         capital stock or material  increase in the short-term or long-term debt
         of the  Companies  or the Limited  Liability  Companies or any material
         adverse change, or a development involving,  or which may be reasonably
         expected to involve,  a prospective  material  adverse  change in their
         condition,  financial or otherwise,  business,  net worth or results of
         operations.  None of them are parties to any  contracts,  agreements or
         arrangements  in which they  reasonably  expect or anticipate they will
         suffer pecuniary loss, damages, or a diminution in value, or from which
         it can reasonably be expected that any of the foregoing shall result.

1.14     Broker's Fees
         Neither the  Purchaser or the Sellers has any liability to pay any fees
         or  commissions  to any  broker,  finder or agent  with  respect to the
         transactions contemplated by the Master Agreement and this Agreement.

          1.15  Intellectual  Property 



          (a) The Companies, the Limited Liability Companies and the business of
     GCP  own or have  the  right  to  use,  pursuant  to  license,  sublicense,
     agreement or permission,  all  intellectual  property  (which  includes all
     patents,  trademarks,  copyrights,  trade  secrets  and  other  proprietary
     rights)  reasonably  necessary  for the  operation  of  their  business  as
     presently  conducted.  All  intellectual  property  owned  or  used by them
     immediately  prior to the date hereof will be available for use immediately
     hereafter on identical  terms and  conditions and there is not now asserted
     any charge,  complaint or claim alleging that any of them interferes  with,
     infringes  upon  or has  misappropriated  any  third  party  rights  in any
     intellectual property.


          (b) The List attached as Exhibit 1.15 hereto  identifies  each patent,
     design patent or trademark which has been used or registered in the name of
     the Companies,  the Limited Liability  Companies and/or GCP, and identifies
     each  license,  agreement  or other  permission  which  either  of them has
     granted  to any  third  party  with  respect  to  any  of its  intellectual
     property.

<PAGE>
          (c)  No  third  party  has   interfered   with,   infringed   upon  or
     misappropriated  any  intellectual  property  rights of the Companies,  the
     Limited Liability Companies and/or GCP in any material respect and , to the
     Seller's knowledge,  the Companies,  the Limited Liability Companies and/or
     GCP  have  not  interfered  with,  infringed  upon or  misappropriated  any
     intellectual property rights of any third parties.

1.16     Condition of Tangible Assets
         As of  the  date  hereof,  substantially  all  of  the  assets  of  the
         Companies,  the Limited Liability  Companies and/or GCP, including both
         tangible and  intangible,  are in good operating  condition and repair,
         subject  to  normal  wear and tear and are  usable in the  regular  and
         ordinary course of business as presently conducted.

1.17     Tax Matters

          (a) The Companies  and/or the Limited  Liability  Companies have filed
     all of the tax returns  required to be filed by them.  All such tax returns
     were correct and complete in all respects.  All taxes owed by them as shown
     on said tax returns have been paid or accrued on their books.  None of them
     currently is the  beneficiary of any extension of time within which to file
     income tax  returns.  No claim has been  asserted by any  authority  in any
     jurisdiction where any of them has not filed tax returns that it is subject
     to  taxation  by  that  jurisdiction.   There  are  no  pledges,  liens  or
     encumbrances on any of the assets of the Companies or the Limited Liability
     Companies  imposed in connection with any failure,  or alleged failure,  to
     pay any tax.

          (b) The Companies and the Limited  Liability  Companies  have withheld
     and paid all taxes  required to have been  withheld and paid in  connection
     with  amounts paid to any  employee,  independent  contractor,  consultant,
     creditor, stockholder or other third party.

          (c) No  authority  is expected to asses any  additional  taxes for any
     period for which income tax returns have been filed previously. There is no
     dispute or claim  concerning  any tax liability for either of the Companies
     and the Limited  Liability  Companies,  either (i) claimed or raised by any
     authority in writing, or (ii) based upon personal contact with any agent of
     such  authority.  The Sellers have  delivered to Breed correct and complete
     copies of all income tax returns,  examination  reports and  statements  of
     deficiencies assessed against or agreed to by the Companies and the Limited
     Liability Companies since 1994. (d) The Companies and the Limited Liability
     Companies  have not waived any statute of limitation in respect of taxes or
     agreed to an extension of time with  respect to income tax  assessments  or
     deficiencies.

          (e) The unpaid income taxes of the Companies and the Limited Liability
     Companies for the year ending December 31, 1995, did not exceed the reserve
     for tax liability.

          (f) Subject to acceptance  of tax returns as filed,  all tax losses as
     shown on each of the Companies' and the Limited  Liability  Companies' most
     recent tax returns can be carried  forward to their  current or  subsequent
     fiscal years and can be utilized to offset future gains, in accordance with
     applicable laws.

<PAGE>
1.18     Material Contracts
         Except as set forth in Exhibit 1.18 hereto, none of the Companies,  the
         Limited  Liability  Companies  and/or GCP is bound by (a) any  material
         leases, (b) any material agreement,  contract or commitment relating to
         the  employment  of  any  person,  (c)  any  agreement  ,  contract  or
         commitment  limiting  the  freedom  of them to  engage  in any  line of
         business  or to  compete  with any  other  person,  (d) any  agreement,
         contract or  commitment  not  entered  into in the  ordinary  course of
         business  which  involves  payment of Lit.  150,000,000  or more in any
         calendar year and is not cancelable without penalty within 30 days, (e)
         any  intercompany  agreements  with related  parties,  including any of
         their  affiliates,  subsidiaries or  shareholders,  or (f) any contract
         with a customer  where the price charged for its product sold is fixed,
         either absolutely or by a specific formula,  for a period of six months
         or longer.  Neither of the Companies,  the Limited Liability  Companies
         nor GCP has violated any term or condition of any material  contract or
         agreement  in any  material  respect .  Contracts  made in the ordinary
         course of business  involving an  obligation or commitment of less than
         Lit.  150,000,000  in any  calendar  year  shall  be  deemed  not to be
         material for purposes of this section. The Sellers, the Companies,  the
         Limited  Liability  Companies and/or GCP have obtained all the consents
         coming from third parties as to the transfer to the Purchaser of Shares
         and  quotas,  real  property,  business  relationships  and  agreements
         transferred pursuant to the Master Agreement.

1.19     Inventory
         All inventory of each of the Companies, the Limited Liability Companies
         and/or  GCP is  accounted  for or  stated in the  Companies'  Financial
         Statements, and as to GCP, on the list attached to the Deed of Transfer
         of Business on a going concern  basis in accordance  with the generally
         accepted U.S.  accounting  principles.  All of the inventory of each of
         them consists of readily  merchantable  and saleable goods and products
         which are in conformity with existing  industry  standards for quality;
         is not in obsolete,  slow moving unsaleable or unusable  condition;  is
         valued at reasonable  amounts based on the ordinary  course of business
         during  the past six  months;  and is not  subject to any write down or
         write off.

1.20     Notes and Accounts Receivable
         All notes and  accounts  receivable  of the  Companies  and the Limited
         Liability  Companies  are  accounted  for or stated  on the  Companies'
         Financial  Statements,  in accordance with generally  accepted  Italian
         accounting principles  consistently applied. The accounts receivable of
         each of the Companies and the Limited Liability Companies are valid and
         genuine;  have arisen  solely out of bona fide sales and  deliveries of
         goods,  performance of services and other business  transactions in the
         ordinary  course of business  consistent  with past  practice;  are not
         subject to valid defenses or  counterclaims;  and are collectible after
         billing  at the  full  recorded  amount  thereof  less,  in the case of
         accounts receivable appearing on the Financial Statement,  the recorded
         allowance for collection losses


<PAGE>



         thereon.   The  allowance  for  collection   losses  on  the  Financial
         Statements has been  determined in accordance  with generally  accepted
         Italian accounting principles.

1.21     Illegal Payments or Arrangements
         None of the Companies,  the Limited Liability  Companies or GCP nor any
         employee or agent has made any  payments  or  received or retained  any
         funds in  violation  of any law,  rule or  regulation,  and none of the
         Companies,  the Limited Liability Companies or GCP has entered into any
         illegal or unauthorized  contractual arrangements or agreements or is a
         party to any criminal litigation.

1.22     Permits and Licenses
         Each of the Companies, the Limited Liability Companies and GCP has such
         permits,  licenses,  franchises and authorizations from governmental of
         regulatory  authorities  ("Permits")  as are  necessary  to  own  their
         respective  properties  and to conduct  their  business in the ordinary
         course, except where the failure to have any such permit would not have
         a material  adverse effect on the condition  (financial or otherwise) ,
         business,  properties,  net  worth  or  results  of  operations  of the
         Companies,  of the Limited Liability  Companies an/or GCP; each of them
         has  fulfilled  and  performed  all of its  material  obligations  with
         respect to such  Permits and no event has  occurred  which  allows , or
         after notice or lapse of time would allow,  revocation  or  termination
         thereof  or  results in any  material  impairment  of the rights of the
         holder of any such Permits and no such Permits contain any restrictions
         that are  materially  burdensome to any of the  Companies,  the Limited
         Liability Companies and/or GCP.

1.23     Financial Condition of the Companies
         The Companies,  the Limited Liability  Companies and/or GCP are solvent
         and, prior hereto,  have not commenced  bankruptcy or other  insolvency
         proceedings, either voluntarily or involuntarily,  under any applicable
         Italian law or procedures. With the exception of AUTO AVIO, the Sellers
         do not expect the Companies and/or the Limited  Liability  Companies to
         need additional  capital to meet their  operational  needs or financial
         requirements  now or for the  foreseeable  future.  The  Sellers do not
         intend or  anticipate  causing the  Companies,  the  Limited  Liability
         Compaies and/or GCP to commence or file bankruptcy or other  insolvency
         proceedings and no creditor has threatened to commence such proceedings
         against any of them.

1.24     Environmental Health and Safety Laws
         Except as set forth in Exhibit 1.24 hereto, the Companies,
         the Limited Liability Companies and/or GCP:
        
          (a) are in  substantial  compliance  with any and all  applicable  EC,
     Italian   governmental,   regional,   provincial  and  municipal  laws  and
     regulations  relating to the protection of human health and safety,  to the
     environment  or  hazardous or toxic  substances  or wastes,  pollutants  or
     contaminants  ("Environmental  Laws") and there is no soil or ground  water
     contamination at any of their sites;

          (b) have received all permits, licenses or other approvals required of
     them under applicable  Environmental  Laws including,  without  limitation,
     certificates of fire and accident prevention;
<PAGE>

         (c)      are in  compliance  with the terms and  conditions of any such
                  permit,  license or approval,  except where such noncompliance
                  with the terms and  conditions  of such  permits,  licenses or
                  approvals,  will not,  singularly or in the aggregate,  have a
                  material  adverse  effect  on  the  condition   (financial  or
                  otherwise),  business,  properties, net worth or operations of
                  either of the  Companies or the Limited  Liability  Companies;
                  and

               (d)  are  not   required   to  make   any   further   significant
               interventions to abate or correct any environmental conditions or
               to  bring  their   facilities  or  properties  into   substantial
               compliance with any applicable  laws and regulations  relating to
               Environmental  Laws,  and are not the  subject of any open claims
               being  asserted  by USSL,  the  regional  health  authority.  The
               associated  costs and  liabilities to the Companies,  the Limited
               Liability Companies and/or GCP(including, without limitation, any
               capital or operating  expenditure for interventions  required for
               clean-up,  closure of properties or compliance with Environmental
               Laws  or any  permit,  license  or  any  related  constraints  on
               operating activities and potential  liabilities to third parties)
               do not,  singularly or in the aggregate,  have a material adverse
               effect  on the  condition  (financial  or  otherwise),  business,
               properties,  net worth or results of their  operations taken as a
               whole.

1.25     Litigation

               Except as set forth in Exhibit 1.25, the  Companies,  the Limited
               Liability Companies and/or GCP:

              (a) are not  subject to any  outstanding  injunction,  judgement,
               order, decree or ruling;

               (b) are not a party to , or threatened to be made a party to, any
               action,  suit ,  proceeding,  hearing,  investigation  of,  in or
               before  any court or  judicial  or  administrative  agency or any
               regional,   local  or  municipal   jurisdiction   or  before  any
               arbitrator;  or are a party,  or  threatened to be made party to,
               any action, suit,  proceeding,  hearing,  investigation,  charge,
               complaint,  claim or demand against either of them arising out of
               any  injuries  to  individuals  or  property  as a result  of the
               ownership,  possession  or use of a product  manufactured,  sold,
               leased,  distributed  or delivered by any of them.  The potential
               risk or liability that could result to the Companies, the Limited
               Liability  Companies and/or GCP from each of the claims disclosed
               in Exhibit 1.25 has been accurately  estimated by the Companies ,
               the losses therefrom,  if adversely determined,  would not exceed
               such estimates.  The losses  therefrom,  if adversely  determined
               would have a material adverse affect on their business, financial
               condition, operation or results of operations.

1.26     Product Warranty
         Each product  manufactured  ,sold leased or delivered by the Companies,
         the  Limited  Liability  Companies  and/or  GCP is in  conformity  with
         applicable   contractual   commitments  and  all  express  and  implied
         warranties,  and none of them has any liability for recall, replacement
         or repair thereof or other damages in connections therewith,
<PAGE>

         subject only to the reserve for product warranty claims.

1.27     Product Liability
         None of the Companies,  the Limited Liability Companies nor GCP has any
         liability  arising out of any injury to any individual or property as a
         result  of the  ownership,  possession  or  use of any of the  products
         manufactured,  sold,  leased or  delivered  by any of them prior to the
         date hereof.

1.28     Employee Claims
         Except as set forth in Exhibit  1.28  hereto,  there are no  collective
         bargaining   agreements  or  labor  agreements  to  which  any  of  the
         Companies,  the  Limited  Liability  Companies  and/or  GCP is a party,
         covering  any of  their  employees.  None  of  them  has  any  strikes,
         discrimination claims,  retaliatory discharge claims, sexual harassment
         claims,  claims  of  unfair  labor  practices,   collective  bargaining
         disputes,  unpaid wage claims or other labor/employee  disputes pending
         against them in any court administrative agency.

1.29     Insurance
         Each of the Companies,  the Limited Liability  Companies and/or GCP has
         in place and is maintaining in effect policies of insurance  protecting
         their  interests and their  properties as is customary for like similar
         businesses. Without limiting the generality of the foregoing, they have
         in effect,  and shall  continue to have in effect  through the Closing,
         the policies set forth in Exhibit 1.29.

         Upon request,  each of the Companies,  the Limited Liability  Companies
         and/or GCP shall  furnish  Purchaser,  at the  Closing,  copies of such
         policies or  certificates  of insurance  evidencing  the  existence and
         continuation of such insurance coverage to and through the Closing.

               1.30 Real Estate,  Leases 

               (a)  Except as  disclosed  in the  December  31,  1995  Financial
               Statements,   with  respect  to  each  parcel  of  real  property
               transferred  pursuant  to the Master  Agreement:  (i) the Sellers
               have good and marketable  title to such real  property,  free and
               clear  of any  mortgage,  pledge,  lien,  burden  or  enforcement
               proceeding, easement, covenant or other restriction, and recorded
               easements,  covenants and other  restrictions which do not impair
               the  current  use,  occupancy,  marketability  of  title,  of the
               property  subject thereto;  (ii) there are no leases,  subleases,
               licenses,  concessions or other agreements  granting to any party
               or  parties  the right to use or occupy  any  portion of the real
               property;  (iii)  there are no  outstanding  options or rights of
               first  refusal to  purchase  the real  property,  or any  portion
               thereof or interest therein; and (iv) there are no parties (other
               than the Companies,  the Limited Liability  Companies and/or GCP)
               in  possession  of the  real  property.  


                    (b) The Companies,  the Limited  Liability  Companies and/or
                    GCP are  parties  to  various  leases  and  subleases.  With
                    respect to each such lease and  sublease:  (i) such lease or
                    sublease is valid, legal,  binding,  enforceable and in full
                    force  and  effect;   and  (ii)  all  facilities  leased  or
                    subleased thereby are supplied with such
<PAGE>

                    utilities and other services as are necessary for the proper
                    operation and use of said facilities.

1.31     Employment
         The Sellers have  delivered to Purchaser a full list of names of all of
         the  Companies',   the  Limited   Liability   Companies'  and/or  GCP's
         employees,  with their employment level, personal code , date of birth,
         date of commencement of employment,  and current compensation.  - There
         is no agreement or arrangement  with respect to cessation of employment
         or
                  retirement;
         -        there are no amounts  owing to any present or former  employee
                  other than  renumeration  accrued due or for  reimbursement of
                  business  expenses  other then those  recorded in the books of
                  account;
         -        the Companies, the Limited Liability Companies and/or GCP have
                  at all  times  complied  in all  material  respects  with  all
                  regulations relating to workers' representatives,  trade union
                  representatives, health and security committee and the Italian
                  local health authorities;
         -        there  are no  disputes  or  judicial  proceedings  or  claims
                  pending or  threatened  against  the  Companies,  the  Limited
                  Liability Companies and/or GCP concerning employment,  service
                  or consultancy  agreements,  the breach or termination thereof
                  and/or the right to be on the  payroll of the  Companies,  the
                  Limited Liability Companies and/or GCP;
         -        all social security  contributions due pursuant to the law and
                  the terms of  employment  have  been paid and fully  cover the
                  pension  contributions  to which the  employees  are entitled,
                  based on their services. The Companies,  the Limited Liability
                  Companies  and/or  GCP have duly made all other  contributions
                  required by law to be paid on behalf of their employees;
         -        the Companies, the Limited Liability Companies and/or GCP have
                  received no notice of assessment or proposed assessment of any
                  additional pension or social security contributions;
         -        the  termination  reserve  ('TFR") accrued for employees fully
                  cover their obligations under Italian law to the date hereof.

1.32     Cassa integrazione guadagni
         The Sellers  have filed a request for the grant to GCP of the  benefits
         of temporary suspension (Cassa integrazione guadagni) for ___ employees
         as set forth in Exhibit  1.32 hereto.  The benefit  applied for will be
         granted and there shall be no  prejudice  to Purchaser by reason of the
         application  or of its  denial.  Consequently,  all costs and  negative
         consequences resulting from the filing of the application as well as to
         its denial for the period  ending  June 30,  1996 shall be  exclusively
         borne by the Sellers.

2.       Disclosure
         The representations  and warranties  contained in this Agreement do not
         contain any untrue  statement  of a material  fact or omit to state any
         material fact necessary in order to make the statements and information
         contained in the Master Agreement and in this Agreement


<PAGE>



         not misleading.

3.       Purchase Price

3.1      The purchase price of the Companies and the Limited Liability Companies
         was arrived at by adding or  reducing to the Equity as of December  31,
         1995 of each the excess or deficiency  (if any) of the Appraised  Value
         of the  tangible  fixed assets owned by it as regards the book value of
         the tangible  fixed assets.  The Equity as listed in Exhibit 3.1 hereto
         are  true  and  correct  and  calculated  in  accordance  with  Italian
         Generally Accepted Accounting Principles. Since December 31, 1995 there
         has been no reduction in excess of five percent ( 5%) of the  Aggregate
         Equity.

3.2      The  parties  agree  that  upon  determination  of  the  final  equity,
         excluding  intangibles  and  fixed  assets,  as of  June  30,  1996  as
         determined  by audit in  accordance  with  Italian  generally  accepted
         accounting  principles  (Italian  GAAP),  the net purchase price may be
         negatively  adjusted if the fiscal  equity is reduced in excess of five
         per cent (5%) as set forth in 3.1

3.3      The Business transferred on a going concern basis, pursuant to the Deed
         of Sale of Business on a going  concern  basis,  include all the assets
         necessary  for the  continuing  operation  of the  Business in the same
         manner as previously conducted.

4.       INDEMNIFICATION
4.1      General Indemnity
         Except for EC and CARIFIN who shall warrant and indemnify the Purchaser
         within the limit of their pro-rata participation  respectively into FAS
         and  AUTO  AVIO,  each of the  Sellers,  jointly  and  severally,  (the
         "Indemnifying  Party")  shall  indemnify,  defend and hold harmless the
         Purchaser  (the  "Indemnified  Party")  and  all  of  their  respective
         affiliates,   officers,   directors,   employees  and   shareholders  (
         collectively  "Indemnified  Persons")  from,  and  will pay to them the
         amount of any claim, liability,  obligation,  loss, damage, assessment,
         judgement, cost and expense (including, without limitation,  reasonable
         attorney  fees and  accountant  fees and costs and expenses  reasonably
         incurred in investigating,  preparing, defending against or prosecuting
         any  litigation,  arbitration or claim,  action,  suit,  proceedings or
         demand) of any kind or character  (and without giving effect to any tax
         benefit  to the  Indemnified  Party)  arising  out of or in any  manner
         incident,  relating  or  attributable  to  (a)  any  inaccuracy  in any
         representation  or breach of any  warranty  of the  Indemnifying  Party
         contained  in this  Agreement,  or (b) any failure by the  Indemnifying
         Party to perform or observe, or to have performed or observed, in full,
         any  covenant,  agreement  or  condition to be performed or observed by
         such party under the Master Agreement and this Agreement.

4.2      Sellers  will have no  liability  for  indemnification  until the total
         amount of claims exceed one hundred million Lire (Lit. 100,000,000) for
         each  sales  or  transfer  provided  for in  article  4 of  the  Master
         Agreement.



<PAGE>



4.3      Guarantee
         The total  amount of  indemnification  pursuant  to article 4 shall not
         exceed  the sum of  twenty-five  billion  Lire  (Lit.  25,000,000,000).
         However,  Sellers  and  Purchaser  agree that a special  reserve of ten
         billion  eight  hundred and  forty-three  million  sixty  thousand Lire
         (Lit.10,843,060,000) has been established.  They further agree that any
         claims made in accordance with 4.1 and 4.2 above shall be deducted from
         the reserve until the reserve is totally  depleted.  Also,  the parties
         agree  that,  in the  event  that  the  Purchaser  obtains  an  Italian
         government   subsidy  under  an  application  filed  28  November  1990
         deliberazione  n' 7143,  such  subsidy  amount  will be  applied to any
         claims made in excess of the special  reserve.  All claims in excess of
         the amounts of the special  reserve and subsidy (if received ) shall be
         promptly paid by the Sellers within thirty (30) days of written demand.
         The  Seller  shall  have  the  right  to  participate  in the  defense,
         settlement and remediation of all claims at the Sellers' expense.

4.5      Survival of Indemnification
         The  indemnity  obligation  contained in Article 4, hereof shall remain
         operative  and  in  full  force  and  effect   regardless  of  (a)  the
         termination or expiration of this Agreement, (b) any investigation made
         by or on behalf of or knowledge held by, any  indemnified  person,  and
         (c) the consummation of the transactions  contemplated hereby provided,
         however,  that claims for  indemnification  shall be made by notice not
         later than  December 31, 2001 for matters of a tax nature and not later
         than five years from the date hereof for all other claims.

4.6      Cooperation
         The Sellers and the Indemnified Party will, upon reasonable request and
         at  the  expense  of  the  Indemnifying   Party,   cooperate  with  the
         Indemnified  Party in the  defense  of any matter  asserted  by a third
         party which may give rise to a claim for indemnification.

5.       REPRESENTATION AND WARRANTIES OF PURCHASER
         Each of the Purchaser, jointly and severally, represent and warrant and
         agree with the Sellers as follows:

5.1      Organization and Good Standing
         Each of the Purchaser is a corporation duly organized, validly existing
         and in good standing under the law of their State of  occupation.  Each
         of the  Purchaser has all  requisite  corporate  power and authority to
         enter into and deliver the Master  Agreement and this  Agreement and to
         consummate  the  transactions  contemplated  hereunder.  The execution,
         delivery and performance by the Purchaser of the Master Agreement, this
         Agreement,  the purchase of Real Property, the purchase of the Business
         of GCP on a Going  Concern  Basis,  the  transfer  of the shares of the
         Companies and of the quotas of the Limited Liability Companies will not
         result  in  a  breach  or  a  violation  of  or a  default  under,  the
         certificate  of  incorporation  or  By-Laws  of  the  Purchaser  or any
         agreement or instrument by which they or their  properties are bound or
         any  statement,  rule,  regulation or judgement,  injunction,  order or
         decree of any court,  governmental  or  administrative  agency to which
         Purchaser  or their  assets or  property  are  subject or  require  the
         obtaining


<PAGE>



         of any consent,  approval or  authorization,  permit or license from or
         filing with,  any  governmental  administrative  authority or any other
         person.  The Master  Agreement,  the  agreements,  deeds and  transfers
         executed thereunder and this Agreement  constitute the legal, valid and
         binding  obligations of the Purchaser,  enforceable in accordance  with
         their terms.

5.2      Relationships with the Employees
         In  connection  with the purchase on a going  concern basis from GCP as
         per the deed of sale annexed as Exhibit 4 to the Master  Agreement,  in
         the  event  that  all or  some  of the  employees  -  whose  Employment
         contracts  are  transferred  together  with the GCP Business  under the
         terms of the mentioned  sale of business on a going  concern  basis- do
         not give, as provided by the Italian law, their consent to the transfer
         so releasing GCP from the  obligation to pay them the TFR accrued up to
         June 30, 1996, Purchaser hereby acknowledges that it has to be the sole
         responsible for the payment of such TFR and consequently  undertakes to
         keep  harmless  GCP from  possible  claims of any of the  Employees  in
         respect of the payment of TFR accrued up to June 30, 1996.

6.       ASSIGNMENT AND REVOCATION
6.1      None of the parties hereto shall:
         (a)      transfer or assign this Agreement or their interest  herein to
                  pay any other party,  except that a transfer to an  affiliated
                  party or related party is permitted hereby ; or
         (b)      cancel, terminate or revoke this Agreement or any Agreement 
                  made in connection herewith.

7.       MISCELLANEOUS
7.1      Survival of Covenants
         The  representations,  warranties  and covenants of the parties  hereto
         shall survive the consummation of the transactions  contemplated hereby
         without limitation.

7.2      Amendment and Waiver
         This  Agreement may be amended only by a writing  signed by the Sellers
         and  Purchaser.  Any  provision of this  Agreement  may be waived if in
         writing signed by the party or parties affected.

7.3      Binding Effect
         This Agreement and all the provisions  hereof shall be binding upon and
         inure to the benefit of the parties hereto, their respective successors
         and any permitted assigns of their rights hereunder.

7.4      Counterparts
         This Agreement may be executed in several  counterparts,  each of which
         shall be deemed to be an  original,  but all of which shall  constitute
         one and the same instrument.

               7.5 Language - Applicable  Law The Laws of Italy shall govern the
          interpretation, validity and performance of this


<PAGE>



         Agreement.  This  Agreement has been executed in an English text. If an
         Italian version is prepared,  the English  Language text shall prevail.
         In case of  controversy  on the meaning of the  Agreement,  the parties
         shall make  reference  to the English  text in order to  interpret  the
         same.

7.6      Further Assurances
         Each  party  hereto  shall  do and  perform  or  cause  to be done  and
         performed  all such  further  acts and  things  and shall  execute  and
         deliver  all  such  other  agreements,   cerficates,   instruments  and
         documents as any other party hereto  reasonably may request in order to
         carry  out  the  intent  and  accomplish  the  purposes  of the  Master
         Agreement and this Agreement and the  consummation of the  transactions
         contemplated hereby.

7.7      Arbitration
         Any  dispute  arising  between  the  parties  in  connection  with  the
         validity, termination,  interpretation or performance of this Agreement
         shall be submitted to the decision of a Panel of three (3) Arbitrators,
         which  shall  decide  in  accordance  with the law ("in via  rituale  e
         secondo  diritto").  To the  ends  of  arbitration,  the  Sellers  will
         constitute a sole party,  as will the  Purchaser.  The party wishing to
         submit to  Arbitration  shall appoint its Arbitrator and give notice to
         the other party of its appointment. Within fifteen (15) days of receipt
         of this notice,  the other party shall appoint its Arbitrator and shall
         give notice to the first party of its appointment.  Within fifteen (15)
         days of the appointment of the second  Arbitrator,  the two Arbitrators
         so appointed shall agree upon the appointment of a third Arbitrator. If
         no agreement is reached, the third Arbitrator shall be appointed,  upon
         application of the most diligent  party,  by the President of the Milan
         Court of  Appeal.  Similarly,  if the  party to whom the  notice of the
         appointment of an Arbitrator has been given does not, in turn,  appoint
         its Arbitrator, said Arbitrator shall also be appointed,  together with
         the third  Arbitrator,  by the  President of the Milan Court of Appeal,
         which will also provide for the substitution of any Arbitrator who dies
         or resigns.  Arbitration shall be conducted in the Italian language and
         take place in Milan.

7.8      Notices
         All notices,  in connection with this Agreement,  shall be dated and in
         writing,  delivered by personal delivery, by registered mail, telegram,
         telecopier  or courier  service to the  address set forth below or such
         other  address as such party may  specify  for the purpose by notice to
         the  other.  Each  notice  shall be  effective  when  delivered  at the
         following addresses:

         If to Purchaser:
         Breed Technologies, Inc.
         5300 Old Tampa Highway
         Lakeland, FL 33807-3050
         Attn..: Charles J. Speranzella Jr.
         Fax: 001 941 6686039

         with a copy to:
         Gallino Plasturgia S.r.l.


<PAGE>



         c/o
         Attn. :
         Fax:

         If to Sellers:
         IAO Industrie Riunite S.p.A.
         Strada Torino, 23
         10092 Beinasco To
         Attn.:
         Fax:

         With a copy to:
         Bruno R. Pavia, Esq.
         PAVIA e ANSALDO
         Via dell'Annunciata, 7
         20121 Milan, Italy
         Fax: 02 653306

7.9      Legal and Other Expenses
         Each party  hereto shall pay its legal and other  expenses  incurred in
         connection with this Agreement.

7.10     Captions
         The Article and Section captions used herein are for reference  purpose
         only, and shall not in any way affect the meaning of  interpretation of
         this Agreement.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
of the year first above written.

Breed Technologies, Inc.                       IAO Industrie Riunite S.p.A.
By                                             By

Gallino Plasturgia S.r.l.                     Gallino Componenti Plastici S.p.A.
By                                            By

                                              Carifin S.p.A.
                                              By
                                              Gruppo Plastico Industriale S.r.l.
                                              By
                                              Emilio Cazzaniga

                                              Macchi Arturo S.r.l.
                                              By


                                              Giovanni Rigamonti

<PAGE>

                                    EXHIBIT 3
                                    AGREEMENT
by and between
IAO -  Industrie  Riunite  S.p.A.  having  registered  office in Beinasco ( To),
Strada Torino 23,  social  capital Lit.  47,500,000,000  registered at the Turin
Court n. 4770/86 Fiscal Code 05163550014  represented by its President  Giovanni
Rigamonti  (hereinafter  referred  to as IAO);  and GALLINO  PLASTURGIA  S.r.l.,
having registered office in Beinasco.  Strada Torino 23, registered at the Turin
Court n.  516615/1996  Fiscal Code  07102360018  represented by Bruno Pavia, its
attorney  in fact  pursuant  to a special  power of  attorney by means of Notaio
Marocco deed dated June 28, 1996 (hereinafter referred to as GP)
                                            WHEREAS
- IAO is the owner of the trademark name GALLINO described in Exhibit 3 and duly
registered  (hereinafter referred to as the TRADEMARK);  - GP is considering the
purchase  of the  business,  on a going  concern  basis,  carried out by GALLINO
COMPLEMENTI PLASTICI S.p.A., an Italian company controlled by IAO; - as a matter
of fact GP already  exploits  without any  consideration  the TRADEMARK with the
consent  of IAO and  now  desires  to  purchase  the  ownership  of the  GALLINO
trademark  name, and IAO willing to sell such name; NOW THEREFORE,  IT IS HEREBY
AGREED AS FOLLOWS

1.       PREAMBLE AND EXHIBITS

1.1      The preamble and exhibits are an essential part of this agreement.

2.       OBJECT

2.1      IAO sells and  transfers to G.P. who accepts the full  ownership of the
         TRADEMARK  described  in  detail  - also  in  respect  of the  existing
         intellectual  property   registrations  -  in  the  Exhibit  3  without
         restrictions  and complete of all the rights and obligations  pertinent
         to the same.

3.       CONSIDERATION

3.1      As consideration for the transfer of the TRADEMARK GP will pay to IAO 
         the amount of one billion Lira (Lit. 1,000,000,000).
3.2      The payment of the above specified consideration is made simultaneously
         with the execution of this agreement.  IAO  acknowledges the receipt of
         the consideration and deliver to GP the relevant invoice.

4.       REPRESENTATIONS OF IAO

4.1      In  addition  to the  contents of the  Representations  and  Warranties
         Agreement  attached  as  Exhibit  2 to the  Master  Agreement  executed
         between,  among  others,  the  parties  the same  date  hereof,  IAO in
         connection with purchase contemplated herein, represents and


<PAGE>



         states to have all right to use,  sell and  license the  TRADEMARK.  In
         particular  the past use of the  TRADEMARK  by IAO and/or by GCP S.p.A.
         (or by any other entity being party of IAO's Group) has been  conducted
         in due form  and  with  the  consent  of all  interested  parties.  IAO
         represents and state as well that there is not now asserted any charge,
         complaint  or  claim  alleging  that  any of  the  entities  using  the
         TRADEMARK has  infringed  upon or has  misappropriated  any third party
         rights.  IAO  represents  and state that no third party has  interfered
         with, infringed upon or misappropriated any right on the TRADEMARK.

5.       OBLIGATIONS OF IAO

5.1      As of the  execution  of the present  Agreement,  IAO will  immediately
         cease to use  directly  and/or  indirectly  under  whatever  firm - the
         TRADEMARK.
5.2      The parties  expressly agree that G.P.  maintains since the date hereof
         the   possibility   to  fully  exploit  as  the  owner  the  TRADEMARK,
         irrespective  to the time necessary to fulfil the steps referred to the
         amendments  in  the  registration  at the  Italian  or  foreign  public
         offices.

6.       CONDITION

6.1      Since the transfer of the  TRADEMARK is to be  considered as an element
         of the global transfer of GCP's business as a going concern as provided
         in the deed of sale attached as Exhibit 4 to the Master Agreement,  the
         effectiveness of this agreement will be subject to the condition of the
         actual  transfer  of GCP's  business  to GP. If such a transfer  is not
         fulfilled by July 2, 1996, the present  agreement will be null and void
         as of the date hereof.

7.       COSTS AND TAXES

7.1      All procedures  and expenses  necessary to obtain the  registration  of
         this  Agreement  at  the  relevant   Italian  or  foreign  offices  are
         exclusively borne by GP.
7.2      Since the transfer is subject to VAT, this Agreement has to be 
         registered "in misura fissa" in accordance with Article 40  D.P.R. 
         26/4/1986 n.131.
7.3      The parties ask to the Notary to keep this Agreement into his files.

8.       ARBITRATION

         Any  dispute  arising  between  the  parties  in  connection  with  the
         validity, termination,  interpretation or performance of this Agreement
         shall be submitted to the decision of a Panel of three (3) Arbitrators,
         which  shall  decide  in  accordance  with the law ("in via  rituale  e
         secondo  diritto").  The party wishing to submit to  Arbitration  shall
         appoint  its  Arbitrator  and give  notice  to the  other  party of its
         appointment.  Within  fifteen  (15) days of receipt of the notice,  the
         other party shall appoint its  Arbitrator  and shall give notice to the
         first  party  of its  appointment.  Within  fifteen  (15)  days  of the
         appointment of the second Arbitrator,  the two Arbitrators so appointed
         shall agree upon the appointment of a third Arbitrator, who will be the
         President of the Arbitration Panel. If no agreement is


<PAGE>



         reached,  the third Arbitrator shall be appointed,  upon application of
         the most diligent party, by the President of the Milan Court of Appeal.
         Similarly,  if the party to whom the  notice of the  appointment  of an
         Arbitrator  has been given does not, in turn,  appoint its  Arbitrator,
         said  Arbitrator  shall  also be  appointed,  together  with the  third
         Arbitrator,  by the President of the Milan Court of Appeal,  which will
         also  provide  for  the  substitution  of any  Arbitrator  who  dies or
         resigns.  Arbitration  shall be conducted  in the Italian  language and
         take place in Milan.


                    IAO                                    GP

                                  - Exhibit A -


                      GALLINO TRADEMARK NAME REGISTRATIONS

                    -  Italian  Trademark  "GALLINO",  Granted  to IAO,  classes
                    11-12-17-20, dep. 10.18.72.Expiration date 9.07.2002.

                    - International Trademark  "GALLINO",granted to IAO, classes
                    12-17,  valid in :  Austria,  Benelux,Switzerland,  Croatia,
                    Czech Republic,  Egypt, Spain,  Liechtenstein,  France, RTF,
                    Morocco,  Monaco,  Portugal,  Romania,  Slovenia, S. Marino,
                    Slovakia,  Hungary,  Yugoslavia;  dep. 10.18.72,  expiration
                    date 10.18.2012.


                                    EXHIBIT 4
                DEED OF SALE OF BUSINESS ON A GOING CONCERN BASIS

                                     Between

                    - Gallino Componenti Plastici SpA, with registered office at
                    Strada Torino 23, 10092 Beinasco, Torino, represented by Mr.
                    Giovanni Rigamonti, (hereinafter the "Seller")

                                       and

                    - Gallino  Plasturgia Srl, with registered  office at Strada
                    Torino  23,  10092  Beinasco,  Torino,  represented  by  Mr.
                    Charles J. Speranzella,  its sole director  (hereinafter the
                    "Purchaser")

                                      * * *

         DEFINITIONS
         In this  Agreement and its Exhibits,  the words and  expressions  which
         follow will have the following meanings:



<PAGE>



                    A.  "Business":  the  business  of the Seller  conducted  in
                    Rivalta,   Nichelino,   Renate,  Copiano,  San  Benigno  and
                    Castello,  Italy  consisting in the design , manufacture and
                    sale  of  steering  wheels,   instrument  panels,  consoles,
                    interior  trims,   bumpers  and  exterior  trims  and  other
                    automotive parts and accessories;

         B.       "Liabilities"
                  (i)      liabilities  to  Employees  starting  from  the  date
                           hereof for  severance pay ("TFR"),  unpaid  salaries,
                           accruals  and  holidays  not taken,  other  personnel
                           liabilities     as     to      "Tredicesima"      and
                           "Quattordicesima",  matured debt towards INAIL all of
                           which are listed in the Financial Statement as of May
                           31, 1996 attached as Exhibit "A" hereto;
                  (ii)     the  principal  and  interest  accrued to date due to
                           Cassa di  Risparmio  di Parma e Piacenta SpA pursuant
                           to Loan Agreement entered into on September 12, 1994,
                           as listed in Exhibit "A" hereto;
                  (iii)    the sum  representing the balance due on the purchase
                           of machinery, title to which subject to a reservation
                           of title,  pursuant to the "Sabatini" Law, as well as
                           the deferred credit of the contributions as listed in
                           Exhibit "A" hereto;
                  (iv)     the value for  "fondo rischi e rinnovamento impianti"
                           as agreed and shown in Exhibit A hereto.

         C.       Assets

                    (i)  "Intellectual  Property":  the  know-how  used  in  the
                    Business, as well as the design patents,  patents, the value
                    of which is shown under the item  "Brevetti"  in the Exhibit
                    "A" hereto;

                    (ii)  "Fixed  Assets":  the  items of fixed  assets  such as
                    machinery, equipment, tools, molds and tooling, vehicles and
                    other  chattels used in the Business as at April 1, 1996 the
                    value of which is shown in Exhibit "A" hereto;

                    (iii) "Inventory":  the inventory of raw materials,  work in
                    process and finished  products,  the value of which is shown
                    in Exhibit "A" hereto;

                    (iv) "Goodwill"  referred to the Business the value of which
                    is shown in Exhibit "A" hereto;

                    (v) the other items of the assets  listed  together with the
                    value relevant to in Exhibit "A" hereto.

         D.         "Agreements":   the  on-going   contracts,   leases  and
                    relationships entered into by Seller which relate to the 
                    Business;

         F.       "Employee Agreements": employment agreements with the 
                  Employees;

         G.       "Employees": the employees of the Seller at the date hereof as
                  recorded in the registers as provided by the applicable law;

                                     WHEREAS
-   Seller desires  to sell and Purchaser desires to acquire the Business.  Now,
 therefore, it is
<PAGE>



         agreed as follows:

1.       SALE OF PART OF BUSINESS
1.1      The Seller  hereby sells the Business to the Purchaser on the terms and
         conditions  herein set forth.  The  Purchaser  shall not succeed in any
         obligation,  debt, account payable or receivable, asset or liability of
         Seller which is not  specifically  transferred to the Purchaser to this
         Agreement and listed in Exhibits "A" hereto.

2.       PRICE AND PAYMENT

2.1      The  price  for the  purchase  and  the  sale  has  been  agreed  to in
         accordance with the Financial  Statement as of May 31, 1996 attached as
         Exhibit "A". The price shall be adjusted in accordance with the results
         of the audit of the adjustment categories set forth in 2.3 below.

2.2      All purchase price adjustments shall be completed no later than October
         31,1996 and payments for the  adjustments  shall be made not later than
         November  15,1996  or  fifteen  days  after  mutual  agreements  on the
         adjustments if sooner than October 31, 1996.

2.3      Adjustments shall apply to the following:



                    A.  INVENTORY  to be  determined  in  accordance  with  U.S.
                    Generally Accepted Accounting Principles;



                    B.  FIXED  ASSETS  additions  for the month of June 1996 the
                    value to be determined at cost;



                    C. PERSONNEL  LIABILITIES (TFR,  vacation,  holiday) through
                    June 30, 1996 as determined in accordance with Italian law;

                    D. ACCRUALS AND  PREPAYMENT OF INTERESTS on the assumed
                    LOAN and SABATINI  LOANS through June 30, 1996: the value to
                    be  accrued  in  accordance  with  U.S.  Generally  Accepted
                    Accounting Principles.

                    E.   OTHER  ASSETS  totaling  one billion  nine  hundred and
                         twenty-nine million ninety one thousand two hundred and
                         fifty-seven  Lire   (Lit.1,929,091,257)   for  employee
                         advances,  supplier  advances  and prepaid  expenses as
                         listed in Exhibit "A": will be determined in accordance
                         with U.S. Generally Accepted Accounting Principles.


3        REPRESENTATIONS AND WARRANTIES
         The Seller represents and warrants to the Purchaser as follows:

3.1      Assets and Liabilities
         The fixed  Assets are in good  condition,  unencumbered  (apart for the
         Sabatini  liens) and  operate  satisfactorily  for the purpose to which
         they are used in the Business and there are no liabilities,  except for
         the Liabilities.

3.2      Inventory


<PAGE>



         The inventory of Products is in good and sellable or useable condition,
         valued on a FIFO basis,  taking into account  slow moving,  obsolete or
         unusable  or  unsaleable  products,  raw  materials,  parts  or work in
         progress. Tooling to be sold to customers shall be valued in accordance
         with the stage of completion method.

3.3      Agreements
         The  Agreements  are in full  force  and  effect  and  have  been  duly
         performed by the Seller up to the date hereof.

3.4      Employees
         There are no  employees  of the  Business  except for the  Employees as
         identified  in the  definition  Employees  hereinabove.  The  levels of
         employment  and salaries of the Employees  are in  accordance  with the
         duties actually  performed and are in accordance with the provisions of
         the applicable national collective labor agreement. The Seller has duly
         performed  all its  obligations  to the  Employees  for salary,  social
         contributions,  withholdings  and other  obligations  relating to their
         employment up to the date hereof and there are no other  liabilities to
         Employees except the liabilities listed in Exhibit "A".

3.5      Tax and Social Security Compliance
         The Seller has duly  performed all its  obligations of a tax and Social
         Security nature.  The Seller has not received notice of assessments for
         taxes due nor are there pending  before any judicial or  administrative
         authority actions or proceedings relating to its tax or social security
         obligations.

3.6      Intellectual Property
         The Seller has full title to the patents  and the  know-how as referred
         in the definition "Intellectual Property" hereinabove and their use and
         transfer does not violate the rights of any third party.

4.       Purchaser  undertakes to use its best efforts to obtain within 120 days
         hereof the consent of the Unions and of each of the Employees as to the
         substitution  of the Purchaser  for the Seller as the sole  responsible
         for the payment of TFR to the Employees. In the event such a consent is
         not obtained for all or part of the Employees, the Purchaser undertakes
         to keep harmless the Seller.

5.       NON COMPETITION
5.1      The Seller  undertakes,  pursuant  to Art.  1381 C.C.,  not to compete,
         directly  or through  companies  which are under its  control or common
         control  with its  shareholders,  for a period of 5 years from the date
         hereof with the Business.

6.       GENERAL PROVISIONS
6.1      Purchaser  shall have  access,  through its duly  authorized  qualified
         representatives  to all of the Seller's  books of account,  payroll and
         sales records,  stock and other  information  relating to customers and
         suppliers,  correspondence,  files,  whether on paper or in other form,
         which relate to the Business.


<PAGE>



6.2      No modification of this agreement shall be valid unless it shall be in
         writing.

6.3      All notices  provided for or permitted by this agreement shall be given
         -in  addition  to  registered  offices  of the GCP and GP-  also to the
         addresses  hereafter  set  forth  or to  the  addresses  which  may  be
         hereafter given by notice in writing.  Notices shall be sent to Charles
         J.  Speranzella Jr., Breed  Technologies  Inc., 5300 Old Tampa Highway,
         Lakeland,  Florida 33807-3050, fax 941 - 6686039 and to Bruno R. Pavia,
         Esq., Pavia e Ansaldo, Via dell'Annunciata 7, 20121 Milan, Italy.

6.4      All  costs  and  expenses   further   hereto   (including   stamp  tax,
         registration  tax  [principal  and  supplemental]  and  notarial  fees)
         relating  to the  execution  of this  agreement  shall  be borne by the
         Purchaser.

          6.5 The civil and tax  effects of this sale shall be from 00:01  hours
          on July 1, 1996.

          7.  ARBITRATION  7.1  Any  dispute  arising  between  the  parties  in
          connection   with  the  validity,   termination,   interpretation   or
          performance of this agreement  shall be submitted to the decision of a
          Panel of three (3) Arbitrators,  which shall decide in accordance with
          the law ("in via  rituale e secondo  diritto").  The party  wishing to
          submit to arbitration  shall appoint its arbitrator and give notice to
          the  other  party of its  appointment.  Within  fifteen  (15)  days of
          receipt of this notice,  the other party shall appoint its  arbitrator
          and shall give notice to the first party of its appointment.

         Within fifteen (15) days of the  appointment of the second  arbitrator,
         the two  arbitrators so appointed shall agree upon the appointment of a
         third  arbitrator.  If no  agreement is reached,  the third  arbitrator
         shall be appointed, upon application of the most diligent party, by the
         president of the Milan Court of Appeal. Similarly, if the party to whom
         the notice of the appointment of an arbitrator has been given does not,
         in  turn,  appoint  its  arbitrator;  said  arbitrator  shall  also  be
         appointed  together  with the third  arbitrator by the President of the
         Milan Court of Appeal,  which will also provide for the substitution of
         any arbitrator who dies, or resigns.  Arbitration shall be conducted in
         the Italian language and take place in Milan.

Turin,   June 28, 1996


Gallino Componenti Plastici S.p.A.               Gallino Plasturgia S.r.l.
By                                                   By



<PAGE>



                                    EXHIBIT 6

          Deed of  Transfer  - BREED  EUROPEAN  HOLDINGS  Ltd.,  a U.K.  Company
          represented by its Director  Charles J.  Speranzella Jr.  (hereinafter
          referred to as BREED) on the one part and GALLINO COMPONENTI  PLASTICI
          S.p.A.,  an Italian  company  represented  by Mr.  Giovanni  Rigamonti
          (hereinafter  referred  to as GCP) on the  other  WHEREAS  -GCP is the
          owner of 95,55% of the issued and outstanding capital of FAS S.p.A., a
          joint stock  company  incorporated  and existing  under laws of Italy,
          with registered office at Ferentino  (Frosinone)  having an issued and
          outstanding  paid in  capital  of  three  billion  three  hundred  and
          sixty-seven  million  Lire(Lit.  3,367,000,000),  represented by three
          million three hundred  thousand  shares each of them of a par value of
          one thousand Lire (Lit.  1,000)(the Shares),  (hereinafter referred to
          as FAS)

Now , therefore the parties hereby agree

1.       GCP sells to BREED the Shares of FAS and namely:

 SHAREHOLDER           SHARES           %OF CAPITAL                NOMINAL VALUE
 BREED               3,217,000             95,55%                  3,217,000,000

The SHARES are transferred today in Turin at the offices of Casa Risparmio Parma
e Piacenza, through execution of the endorsement on the Shares certificates.

2.The  SHARES  are  transferred  at  a  price  of  ten  billion,   nine  hundred
eighty-seven million one hundred thousand Lire (Lit. 10,987,100,000).  The price
will be paid to the SELLER by BREED the date  hereof of this Deed of Transfer at
the pro-rata of their participation.

Turin,      July 1996




BREED EUROPEAN HOLDINGS LTD.





GALLINO COMPONENTI PLASTICI S.p.A.




<PAGE>



                                    EXHIBIT 6

          Deed of  Transfer  - BREED  EUROPEAN  HOLDINGS  Ltd.,  a U.K.  Company
          represented by its Director  Charles J.  Speranzella Jr.  (hereinafter
          referred  to as  BREED)  -BREED  TECHNOLOGIES  Inc.,  a  U.S.  company
          represented by it's Executive  Vice-President  Charles J.  Speranzella
          Jr.  (hereinafter  referred  to as  BTI) on the one  part  and  EMILIO
          CAZZANIGA,  an Italian citizen represented by his attorney-in-fact Mr.
          Ermanno  Piana  (hereinafter  referred  to as EC) on  the  other  part
          WHEREAS  -EC is the  owner  of  4,45% of the  issued  and  outstanding
          capital of FAS S.p.A., a joint stock company incorporated and existing
          under laws of Italy,  with  registered  office at Ferentino  having an
          issued and outstanding  paid in capital of three billion three hundred
          and sixty-seven million Lire(Lit. 3,367,000,000), represented by three
          million three hundred  thousand  shares each of them of a par value of
          one thousand Lire (Lit.  1,000)(the Shares),  (hereinafter referred to
          as FAS)

Now , therefore the parties hereby agree

1.       EC sells to the PURCHASER the Shares of FAS and namely:

SHAREHOLDER           SHARES           %OF CAPITAL                 NOMINAL VALUE
BREED                 82660            2,45%                          82,660,000
BTI                   67340            2%                             67,340,000

The SHARES are  transferred  today at the offices of Notary A. Morocco,  through
execution of the endorsement on the Shares certificates.

2.The SHARES are  transferred  at a price of five hundred twelve  million,  nine
hundred  thousand  Lire (Lit.  512,900,000).  The price is paid to the SELLER by
BREED and BTI the date hereof at the pro-rata of their participation.

Turin, 1 July, 1996


BREED EUROPEAN HOLDINGS LTD.


BREED TECHNOLOGIES INC


EMILIO CAZZANIGA



<PAGE>



                                    EXHIBIT 6

          Deed of  Transfer  - BREED  EUROPEAN  HOLDINGS  Ltd.,  a U.K.  Company
          represented by its Director  Charles J.  Speranzella Jr.  (hereinafter
          referred  to as  BREED)  -BREED  TECHNOLOGIES  Inc.,  a  U.S.  company
          represented by it's Executive  Vice-President  Charles J.  Speranzella
          Jr.  (hereinafter  referred  to as BTI)  and  jointly  referred  to as
          PURCHASER on the one part and IAO Industrie Riunite S.p.A., an Italian
          company represented by Mr. Giovanni Rigamonti (hereinafter referred to
          as IAO) on the other  WHEREAS - the seller is the owner of 100% of the
          issued and  outstanding  capital  of IRON SUD  S.p.A.,  a joint  stock
          company  incorporated  and  existing  under  the laws of  Italy,  with
          registered office at Limatola having an issued and outstanding paid in
          capital of two hundred  billion and three  hundred  million  Lire(Lit.
          2,300,000,000),  represented by two hundred and thirty thousand shares
          each of them of a par value of ten  thousand  Lire  (Lit.  10,000)(the
          Shares), (hereinafter referred to as IRON)

Now , therefore the parties hereby agree

1.       IAO sells to the PURCHASER the Shares of IRON and namely:

 SHAREHOLDER         SHARES              %OF CAPITAL               NOMINAL VALUE
 BREED               225,400                98%                    2,254,000,000
 BTI                   4,600                2%                        46,000,000

The SHARES are  transferred  today at the offices of Notary A. Morocco,  through
execution of the endorsement on the Shares certificates.

2.The SHARES are  transferred  at a price of three billion four hundred  million
Lire (Lit. 3,400,000,000).  The price will be paid to the SELLER by BREED and by
BTI the date hereof at the pro-rata of their participation.

Turin, 1 July, 1996

BREED EUROPEAN HOLDINGS Ltd.

BREED TECHNOLOGIES Inc.


IAO Industrie Riunite S.p.A.




<PAGE>



                                    EXHIBIT 7

Deed of Transfer - BREED EUROPEAN  HOLDINGS Ltd., a U.K. Company  represented by
its  Director  Charles J.  Speranzella  Jr.  (hereinafter  referred to as BREED)
-BREED   TECHNOLOGIES  Inc.,  a  U.S.  company  represented  by  it's  Executive
Vice-President  Charles J. Speranzella Jr. (hereinafter  referred to as BTI) and
jointly referred to as PURCHASER on the one part and GRUPPO PLASTICO  INDUTRIALE
S.r.l.,  an Italian company  represented by Mr. Vittorio  Maltempi  (hereinafter
referred  to as GPI) on the  other  WHEREAS  - GPI is the  owner  of 100% of the
issued and outstanding  capital of AG INTERNATIONAL  S.r.l., a limited liability
company  incorporated  and  existing  under the laws of Italy,  with  registered
office at  Torino,  having an issued and  outstanding  paid in capital of eleven
billion  Lire(Lit.  11,000,000,000),  represented  by one quota the par value of
which is Lit......(the Quota), (hereinafter referred to as AG INTERNATIONAL)

Now , therefore the parties hereby agree

1.       GPI sells to the PURCHASER the quota of AG INTERNATIONAL  and namely:

QUOTA HOLDER          QUOTA            %OF CAPITAL                NOMINAL VALUE
BREED                   1                  98%                   10,780,000,000
BTI                     2                   2%                      220,000,000

The QUOTA is  transferred  today at the  offices of Notary A.  Morocco,  through
execution of the Deed of Transfer, which will be authenticated by the Notary and
filed in  accordance  with and for the purpose of Art.2479 of the Civil Code (as
modified by Art.1 of Law No.310 of August 12,1993). The entry in the Register of
quotaholders  will take place  within the terms set out in para.3 of Art.2479 of
the Civil Code (as modified by Art.1 of Law No. 310 of August 12,1993).

2.The  QUOTA will be  transferred  at a price of fifteen  billion  five  hundred
million  Lire  (Lit.  15,500,000,000).  The price  will be paid to the SELLER by
BREED and BTI the date hereof at the pro-rata of their participation.

3.Every cost and expense  relating to the present  Deed of  Transfer,  including
stamp  duties and fees  relating to  registration,  are for the sole  account of
PURCHASER.

Turin, 1 July, 1996 BREED EUROPEAN HOLDINGS Ltd.

BREED TECHNOLOGIES Inc
GRUPO PLASTICO INDUSTRIALE S.r.l.


<PAGE>



                                    EXHIBIT 7

                                Deed of Transfer
- BREED EUROPEAN HOLDINGS Ltd., a U.K. Company represented by its Director 
Charles J.Speranzella Jr. (hereinafter referred to as BREED)
                                                                 on the one part
                                       and
GALLINO COMPONENTI PLASTICI S.p.A., an Italian company represented by Giovanni
Rigamonti (hereinafter referred to as GCP)                   on the other
                                     WHEREAS
- GCP is the owner of 51% of the issued and outstanding capital of ARAS S.r.l.,a
limited  liability  company  incorporated  and existing under the laws of Italy,
with  registered  office at  Giaveno  having an issued and  outstanding  paid in
capital of ninety million  Lire(Lit.  90,000,000),  represented by one quota the
par value of which is Lit......(the Quota) (hereinafter referred to as ARAS)

Now , therefore the parties hereby agree

1.       GCP sells to the PURCHASER the quota of ARAS  and namely:

QUOTA HOLDER               QUOTA            %OF CAPITAL            NOMINAL VALUE
BREED                        1                   51%                 45,900,000

The QUOTA is  transferred  today at the  offices of Notary A.  Morocco,  through
execution of the Deed of Transfer, which will be authenticated by the Notary and
filed in  accordance  with and for the purpose of Art.2479 of the Civil Code (as
modified by Art.1 of Law No. 310 of August  12,1993).  The entry in the Register
of quota holders will take place within the terms set out in para. 3 of Art.2479
of the Civil Code (as modified by Art.1 of Law No. 310 of August 12, 1993).

2.The QUOTA will be  transferred  at a price of one hundred  million  Lire (Lit.
100,000,000). The price will be paid to the SELLER by BREED the date hereof.

3.Every cost and expense  relating to the present  Deed of  Transfer,  including
stamp  duties and fees  relating to  registration,  are for the sole  account of
BREED.

Turin, 1 July, 1996

BREED EUROPEAN HOLDINGS Ltd.


GALLINO COMPONENTI PLASTICI  S.p.A.





<PAGE>



                                    EXHIBIT 7

                                Deed of Transfer
-BREED TECHNOLOGIES Inc., a U.S. company represented by its Executive 
Vice-President Charles J. Speranzella Jr. (hereinafter referred to as BTI)
                                                                 on the one part
                                                  and
CARIFIN S.p.A., an Italian company represented by Giovanni Rigamonti 
(hereinafter referred to as CARIFIN)                               on the other
                                            WHEREAS
- CARIFIN is the owner of 1% of the issued and outstanding  capital of AUTO AVIO
S.r.l., a limited liability company  incorporated and existing under the laws of
Italy, with registered  office at Guardamiglio  having an issued and outstanding
paid in capital of ninety  million  Lire(Lit.  90,000,000),  represented  by one
quota the par value of which is Lit......(the Quota) (hereinafter referred to as
AUTO AVIO)

Now , therefore the parties hereby agree

1.       CARIFIN sells to the PURCHASER the quota of AUTO AVIO  and namely:

QUOTA HOLDER               QUOTA            %OF CAPITAL            NOMINAL VALUE
BTI                         1                   1%                      900,000

The QUOTA is  transferred  today at the  offices of Notary A.  Morocco,  through
execution of the Deed of Transfer, which will be authenticated by the Notary and
filed in  accordance  with and for the purpose of Art.2479 of the Civil Code (as
modified by Art.1 of Law No. 310 of August  12,1993).  The entry in the Register
of quotaholders  will take place within the terms set out in para. 3 of Art.2479
of the Civil Code (as modified by Art.1 of Law No. 310 of August 12, 1993).

2.The QUOTA will be  transferred at a price of one  million Lire 
(Lit. 1,000,000). The price will be  paid to the SELLER by BTI the date hereof.

3.Every cost and expense  relating to the present  Deed of  Transfer,  including
stamp  duties and fees  relating to  registration,  are for the sole  account of
BREED.

Turin, 1 July, 1996

BREED TECHNOLOGIES Inc.


CARIFIN  S.p.A.





<PAGE>



                                    EXHIBIT 7

                                Deed of Transfer
- BREED EUROPEAN HOLDINGS Ltd., a U.K. Company represented by its Director 
Charles J.Speranzella Jr. (hereinafter referred to as BREED)
-BREED TECHNOLOGIES Inc., a U.S. company represented by it's Executive 
Vice-PresidentCharles J. Speranzella Jr. (hereinafter referred to as BTI)
                                                                 on the one part
                                                  and
GALLINO COMPONENTI PLASTICI S.p.A., an Italian company represented by Giovanni
Rigamonti. (hereinafter referred to as GCP)                   on the other
                                            WHEREAS
- GCP is the owner of 99% of the  issued  and  outstanding  capital of AUTO AVIO
S.r.l., a limited liability company  incorporated and existing under the laws of
Italy, with registered  office at Guardamiglio  having an issued and outstanding
paid in capital of ninety  million  Lire(Lit.  90,000,000),  represented  by one
quota the par value of which is Lit......(the Quota) (hereinafter referred to as
AUTO AVIO)

Now , therefore the parties hereby agree

1.       GCP sells to the PURCHASER the quota of AUTO AVIO  and namely:

QUOTA HOLDER               QUOTA            %OF CAPITAL            NOMINAL VALUE
BREED                        1                 98%                    88,200,000
BTI                          1                  1%                       900,000

The QUOTA is  transferred  today at the  offices of Notary A.  Morocco,  through
execution of the Deed of Transfer, which will be authenticated by the Notary and
filed in  accordance  with and for the purpose of Art.2479 of the Civil Code (as
modified by Art.1 of Law No. 310 of August  12,1993).  The entry in the Register
of quotaholders  will take place within the terms set out in para. 3 of Art.2479
of the Civil Code (as modified by Art.1 of Law No. 310 of August 12, 1993).

2.The QUOTA will be  transferred at a price of ninety-nine  million Lire 
(Lit. 99,000,000).  The price will be  paid to the SELLER by BREED and BTI the 
date hereof  at the pro-rata of their participation.

3.Every cost and expense  relating to the present  Deed of  Transfer,  including
stamp  duties and fees  relating to  registration,  are for the sole  account of
PURCHASER.

Turin, 1 July, 1996 BREED EUROPEAN HOLDINGS Ltd.

BREED TECHNOLOGIES Inc.

GALLINO COMPONENTI PLASTICI S.p.A.


<PAGE>



                                    EXHIBIT 7

                                Deed of Transfer
- BREED EUROPEAN HOLDINGS Ltd., a U.K. Company represented by its Director 
Charles J.Speranzella Jr. (hereinafter referred to as BREED)
-BREED TECHNOLOGIES INC., a U.S. company represented by it's Executive
 Vice-President Charles J. Speranzella Jr. (hereinafter referred to as BTI) 
and jointly referred to as the PURCHASER                         on the one part
                                       and
GALLINO COMPONENTI PLASTICI S.p.A., an Italian company represented by Giovanni
Rigamonti. (hereinafter referred to as GCP)                   on the other
                                     WHEREAS
- GCP is the owner of 100% of the issued and outstanding capital of APCO S.r.l.,
a limited liability  company  incorporated and existing under the laws of Italy,
with  registered  office at ........  having an issued and  outstanding  paid in
capital  of  eight  billion  one  hundred  million   Lire(Lit.   8,100,000,000),
represented  by one  quota  the par  value  of  which  is  Lit......(the  Quota)
(hereinafter referred to as APCO)

Now , therefore the parties hereby agree

1.       GCP sells to the PURCHASER the quota of APCO  and namely:

QUOTA HOLDER               QUOTA            %OF CAPITAL            NOMINAL VALUE
BREED                        1                 98%                7,938,000,000
BTI                          2                  2%                  162,000,000

The QUOTA is  transferred  today at the  offices of Notary A.  Morocco,  through
execution of the Deed of Transfer, which will be authenticated by the Notary and
filed in  accordance  with and for the purpose of Art.2479 of the Civil Code (as
modified by Art.1 of Law No. 310 of August  12,1993).  The entry in the Register
of quota holders will take place within the terms set out in para. 3 of Art.2479
of the Civil Code (as modified by Art.1 of Law No. 310 of August 12, 1993).

2.The  QUOTA will be  transferred  at a price of sixteen  billion  five  hundred
million  Lire  (Lit.  16,500,000,000).  The price  will be paid to the SELLER by
BREED and by BTI the date hereof at the pro-rata of their participation.

3.Every cost and expense  relating to the present  Deed of  Transfer,  including
stamp  duties and fees  relating to  registration,  are for the sole  account of
PURCHASER.

Turin, 1 July, 1996

BREED EUROPEAN HOLDINGS Ltd.
BREED TECHNOLOGIES Inc.
GALLINO COMPONENTI PLASTICI S.p.A.


<PAGE>



CONSULTING SERVICES AGREEMENT
by and between
- IAO INDUSTRIE RIUNITE S.p.A., an Italian  corporation having registered office
at Strada Torino 23, Beinasco represented by Mr. Giovanni Rigamonti (hereinafter
referred to as IAO)
                                                               - on the one part
     - GALLINO  PLASTURGIA  S.r.l.,  an Italian limited liability company having
registered  office at Strada Torino 23,  Beinasco  represented by Mr. Charles J.
Speranzella Jr. (hereinafter referred to as GP); also on behalf of :
     - FAS S.p.A., an Italian  corporation  having registered office at via Asse
Attrezzato 216 Ferentino (Frosinone), (hereinafter referred to as FAS);
     - AG  INTERNATIONAL  S.r.l.,  an Italian limited  liability  company having
registered office at via Susa 35 Torino (hereinafter referred to as AG);
     - A.P.CO S.r.l.,  an Italian  corporation  having  registered office at via
della Riserva I tronco Anagni (Frosinone), (hereinafter referred to as A.P.CO);
                                                             - on the other part
                                     WHEREAS
-        IAO and BREED TECHNOLOGIES INC., directly or through different entities
         parties  of  their  respective  group,  have  entered  into  agreements
         providing for the transfer from IAO Group to BREED  TECHNOLOGIES  Group
         of the Business carried out in the field of automotive parts supply; in
         connection with the above referred  agreements  arises the need for the
         Purchasers to obtain certain consulting services from the Sellers;

Now therefore, the parties agree as follows:

1.OBJECT

     1.1 IAO hereby  undertakes  to supply,  directly or through a company being
party of IAO Group designated by IAO, to GALLINO PLASTURGIA, FAS, AG, A.P.CO the
following consulting services:
         -management services
         -technical advice
         -assistance in negotiations with major customers
         -advice on matters of taxation

1.2.     The above mentioned  consulting  services will be rendered upon request
         of GP,FAS,  AG,  A.P.CO.,  or any of them. In any event it is expressly
         agreed that neither IAO nor its designees  shall have  authority to act
         on behalf of GP,  FAS,  AG,  A.P.CO.,  - or of any of them - IAO agrees
         that it will not hold  itself out to any third party as having any such
         authority except where such authority has been granted in writing.

2.TERM

     2.1 This agreement  shall be effective  starting from July 1, 1996 and will
last for one year.



<PAGE>



3.FEES AND COSTS

3.1      In  consideration  of  the  services  to be  rendered  by IAO or by its
         designees, GP - directly or through FAS, AG, A.P.CO, shall pay to IAO a
         fee in the fixed amount of three  billion  eight  hundred  million Lire
         (Lit.3,800,000,000).  Such amount will be payable in one installment at
         the date of  expiration of the present  agreement  upon issuance of the
         relevant  invoice/s  by  IAO.  IAO  will  specify  in the  invoice  the
         allocation  of the payment in respect of the  services  rendered to GP,
         FAS, AG, A.P.CO..

4.CONFIDENTIALITY

4.1      IAO  and/or  its  designees  shall not at any time  whether  during the
         continuance of this agreement or at any time thereafter  divulge to any
         third party whatsoever,  except as insofar as may be necessary to do so
         in performance of its duties  hereunder,  the matters of a confidential
         nature which it receives by reason of the services rendered hereunder.

5.ARBITRATION

5.1      Any  dispute  arising  between  the  parties  in  connection  with  the
         validity, termination,  interpretation or performance of this agreement
         shall be submitted to the decision of a Panel of three (3) Arbitrators,
         which  shall  decide  in  accordance  with the law ("in via  rituale  e
         secondo diritto"). To the ends of Arbitration, IAO and/or its designees
         will  constitute  a sole party as will GP, FAS, AG,  A.P.CO.  The party
         wishing to submit to arbitration  shall appoint its arbitrator and give
         notice to the other party of its  appointment.Within  fifteen (15) days
         of receipt of this notice, the other party shall appoint its arbitrator
         and shall give  notice to the first  party of its  appointment.  Within
         fifteen (15) days of the appointment of the second arbitrator,  the two
         arbitrators  so appointed  shall agree upon the  appointment of a third
         arbitrator.  If no agreement is reached , the third arbitrator shall be
         appointed  ,  upon  application  of the  most  diligent  party,  by the
         president of the Milan Court of Appeal. Similarly, if the party to whom
         the notice of the appointment of an arbitrator has been given does not,
         in  turn,  appoint  its  arbitrator,  said  arbitrator  shall  also  be
         appointed  together  with the third  arbitrator by the President of the
         Milan Court of Appeal,  which will also provide for the substitution of
         any arbitrator who dies or resigns.  Arbitration  shall be conducted in
         the Italian language and take place in Milan.


IAO INDUSTRIE RIUNITE S.p.A.

GALLINO PLASTURGIA S.r.l.
By

FAS S.p.A.
By


<PAGE>



AG INTERNATIONAL S.r.l.
By

A.P.CO. S.r.l.
By


                                                                    , 1996


                  BREED TECHNOLOGIES INC.



                  We  refer  to the  transaction  under  which  through  several
                  agreements  our company,  directly or through  entities  being
                  party of its Group, has transferred to your Group the business
                  carried out by GALLINO COMPONENTI PLASTICI S.p.A.

                  By means of this letter we irrevocably confirm our undertaking
                  to allow GALLINO PLASTURGIA S.r.l., transferee of the business
                  previously carried out by GALLINO COMPONENTI PLASTICI, the use
                  free of charge of the land and building  located  respectively
                  in  San  Benigno,  Via  Chivasso,   120  and  in  Renate,  Via
                  Concordia,   55  as  previously  used  by  GALLINO  COMPONENTI
                  PLASTICI.

                  Such free use, for which no consideration has to be paid, will
                  last until the due  execution of the notarial deed of transfer
                  for the real  estates  located in San Benigno and in Renate to
                  be transferred and paid promptly upon IAO request.



                  IAO INDUSTRIE RIUNITE S.p.A.

<PAGE>



                                                                    July 1, 1996


                  IAO INDUSTRIE RIUNITE S.p.A.
                  Strada Torino, 23'
                  Beinasco


     The undersigned Charles J. Speranzella as Executive Vice-President of Breed
Technologies  Inc. as well as Director of Breed European Holdings Limited taking
into consideration as well the Certificate of Authority issued on June 21, 1996,
undertakes to transfer or cause to be transferred  within one year from the date
of this letter the real  property  located in Rome owned by FAS to IAO  INDUTRIE
RIUNITE S.p.A. against payment of three billion eight hundred million Lire (Lit.
3,800,000,000).  Such  consideration  shall be in complete  satisfaction  of the
payment  obligations  under  the  Consulting  Services  Agreement  of even  date
herewith.  Charles J. Speranzella Jr. on behalf of BREED  TECHNOLOGIES  Inc. and
BREED EUROPEAN HOLDINGS Ltd. does hereby waive any right to dispute the value of
the services to be provided  under said  Consulting  Services  Agreement of even
date. IAO undertakes to purchase the above mentioned real property and pay three
billion eight hundred million Lire (Lit.  3,800,000,000) as and for the purchase
price.


                                                          Charles J. Speranzella



                                     Agreed


                                                    IAO Industrie Riunite S.p.A.


<PAGE>


                                                             Turin, July 1, 1996


                  The undersigned  Giovanni Rigamonti and Charles J. Speranzella
                  Jr. in  connection  with the  Master  Agreement  and  relevant
                  exhibits  thereto  entered into on July 1, 1996 between  BREED
                  TECHNOLOGIES Inc. (directly of through entities of it's group)
                  and IAO (directly or through  entities of it's group),  hereby
                  acknowledge  that the  exhibits  to the  "Representations  and
                  Warranties  Agreement"  (exhibit 2 to the "Master  Agreement")
                  are not yet  complete.  The parties  undertake to complete the
                  exhibits to the  "Representations  and  Warranties  Agreement"
                  before  the end of the  month  of  July  1996.  The  mentioned
                  exhibit  shall  be  prepared  by  IAO  GROUP,  subject  to the
                  agreement  of  BREED  GROUP.  In  particular  the  undersigned
                  acknowledge that the exhibit to be prepared shall not disclose
                  new  information  which has a material  adverse  effect on the
                  value of the assets, business and companies concerned.


Giovanni Rigamonti                                   Charles J. Speranzella Jr.