Document:

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                                                                    Exhibit 10.2

[LOGO]

                                                               EXECUTION VERSION

                                Dated 18 May 2000

                           Sale and Purchase Agreement

1.    Paxar Far East Limited, 8/F., Paxar Building, 210 Choi Hung Road, San Po
      Kong, Kowloon, Hong Kong, represented by Chu Che Lop, Paul according to
      the board resolution dated 12 May 2000 attached as Exhibit A.

2.    Mr. Ulrich Wilhelm Helmut Bornemann, born on 2 June 1962, residing
      at 1st Floor, Gordon Terrace, No.4A Carmel Road, Stanley, Hong
      Kong.

herewith enter into the following

             Sale and Purchase Agreement (the "AGREEMENT"):
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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                                      PAGE

<S>                                                                          <C>
PRELIMINARY REMARKS..................................................          3

1.    Sale and Purchase..............................................          3

2.    Purchase Price and payment.....................................          5

3.    Transfer Accounts of the Hong Kong Company.....................          8

4.    Adjustment of the Purchase Price...............................          8

5.    Representations, Warranties and Guarantees of the seller.......          8

6.    Legal Consequences in Case of Violation of Representations,
      Warranties and Guarantees......................................         29

7.    No compete Restraint...........................................         30

8.    Statute of Limitations.........................................         31

9.    Inspection by the Purchaser....................................         32

10.   Taxes..........................................................         32

11.   Conditions precedent...........................................         33

12.   (Intentionally omitted)........................................         34

13.   Rights and Obligations of the Parties..........................         34

14.   Post Completion Undertakings...................................         37

15.   Seller'S Profit Participation..................................         38

16.   Interim period.................................................         41

17.   Arbitration....................................................         42

18.   Miscellaneous..................................................         42
</TABLE>
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                              Table of Attachments

<TABLE>
<CAPTION>
    NO.                   CONTENTS OF ATTACHMENT
<S>                 <C>
 5.2.7              Most recent annual return, memorandum and articles of
                    association of the Hong Kong Company
 5.2.8              Most recent business licence, approval certificate and
                    articles of association of the Panyu Company
 5.2.26             List of other equity, interest, shares, participations or
                    sub-participations owned or held by the Companies
 5.2.35             List of over-indebtedness or insolvency
 5.3.5(a)           Assets, properties and rights not owned by the Companies which were
                    used by the Companies on the basis of binding agreements with the
                    Seller
 5.3.5(b)           Assets, properties and rights not owned by the Companies which were
                    used by the Companies on the basis of binding agreements with third
                    parties
 5.4(a)             Real Estate
 5.4(g)             Real estate property leased or rented by the Companies
 5.4(l)(ii)         Terminated leased agreements during the last 5 (five) years
 5.6.1(e)           Filed tax returns and countries of filing
 5.7(a)(i)          Patents, trademarks/service marks, business or trade name
 5.7(a)(ii)         Intellectual Property Rights of the Companies
 5.7(h)             Intellectual Property Rights licensed to, but not owned by
                    the Companies
 5.8                Insurance policies (setting forth whether the third party liability
                    insurance contract is of claim made or occurrence type) in each
                    case with the statement of the insured amount and the annual
                    premium
 5.9.1              Material licences, certificates, permits, permit
                    applications, franchises, private product approvals
 5.10.5             Names, titles, locations, annual compensation and all
                    bonuses, benefits and similar payments for all board
                    members, et al.
 5.11(a)            Rental, leasing or similar contracts
 5.11(c)            Obligations owed to a benevolent fund, pension liabilities,
                    pension- and related benefit liabilities et al.
 5.11(d)(i)         Standard sales contract
 5.11(l)            Intellectual Property Rights and Know-how with licence
                    agreements
 5.11(o)(i)         Distribution agreements (distributor- or commercial agent
                    agreements) (appointing the Companies as distributor or commercial
                    agent)
 5.11(o)(ii)        Distribution agreements (distributor- or commercial agent
                    agreements) (appointing a third party as distributor or
                    commercial agent)
 5.11(x)            Loan agreements and other banking and overdraft facilities
 5.13.2(i)          Managing director of the Hong Kong Company
 5.13.2(ii)         Legal representative of the Panyu Company
 5.13.4(i)          Open accounts receivable of the Companies which came into existence
                    up to 31
</TABLE>
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<TABLE>
<S>                 <C>

                    March 2000
 5.13.4(ii)         Open liabilities of the Companies which came into existence
                    up to 31 March 2000

 5.13.5             Contracts, agreements or arrangements, providing for an aggregate
                    annual payment obligation of more than HK$1,500,000 or with a
                    termination period of more than 6 (six) months
 5.13.6             Bank accounts of the Companies
 5.14.2(a)          List of other equity, interest, shares, participations or
                    sub-participations owned or held by the Seller
 6.4                Persons whose knowledge is deemed to be knowledge of the
                    Seller
 13.2               Intellectual property rights being owned by the Seller or
                    another party
 13.4               Legal relationships between the Seller and the Companies
 13.8               Sureties
</TABLE>
<PAGE>   5
                               PRELIMINARY REMARKS

1.    Paxar Far East Limited, is a company duly incorporated in the Hong Kong
      Special Administrative Region of the People's Republic of China ("HONG
      KONG"), whose registered office is at 8/F., Paxar Building, 210 Choi Hung
      Road, San Po Kong, Kowloon, Hong Kong (the "PURCHASER").

2.    Mr. Ulrich Wilhelm Helmut Bornemann is a businessman whose business
      address is at 1st Floor, Gordon Terrace, No.4A Carmel Road, Stanley, Hong
      Kong (the "SELLER").

3.    Bonny Nice Industries Limited is a private company duly incorporated in
      the Hong Kong Special Administrative Region of the People's Republic of
      China whose registered office is at 6/F, Tin On Industrial Building,
      777-779 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon, Hong Kong (the "HONG
      KONG COMPANY"). The Hong Kong Company has an issued and paid-up capital of
      HK$1,000 which is divided into 1,000 ordinary shares of HK$1 each (the
      "HONG KONG SHARES").

4.    The Seller is the legal and beneficial owner of 999 Hong Kong Shares and
      the beneficial owner of the remaining one Hong Kong Share.

5.    The Hong Kong Company owns one hundred percent of the equity interest in
      Bonny Nice (Panyu) Label Co., Ltd ("      (     )                  "), a
      wholly foreign owned enterprise duly organised and validly existing under
      the laws of the People's Republic of China whose legal address is at B20,
      Austin Industrial Park, Dong Chong Town, Panyu Municipality, Guangdong
      Province, the People's Republic of China (the "PANYU COMPANY"; the Hong
      Kong Company and the Panyu Company, together, the "COMPANIES" or each a
      "COMPANY").

6.    (Intentionally omitted)

7.    The Companies manufacture and market apparel identification products.

8.    (Intentionally omitted)

9.    The Seller has agreed to sell and the Purchaser has agreed to purchase the
      Hong Kong Shares. The Seller and the Purchaser have agreed to enter into
      the above transactions according to the terms and conditions of the
      Agreement and on the basis of the representations and warranties made, and
      undertakings, guarantees and indemnities given by, the Seller.

1.    SALE AND PURCHASE

1.1   The Seller as beneficial owner agrees to sell and the Purchaser agrees to
      buy the Hong Kong Shares, free from all mortgages, charges, pledges,
      liens, options, restrictions, right of first refusal, right of
      pre-emption, third-party rights or interests, other encumbrance or
      security interest of any kind, or another type of preferential
      arrangements (including, without limitation, title transfer or retention
      arrangements) having similar effect and together with all rights of any
      nature whatsoever attaching to the Hong Kong Shares as
<PAGE>   6
      of the Effective Date (as defined in section 1.3 below), including all
      rights to any dividends or other distribution declared, paid or made in
      respect of the Hong Kong Shares as of the Effective Date.

1.2   (Intentionally omitted)

1.3   The sale and purchase of the Hong Kong Shares shall become effective on
      the later of 18 May 2000 and the date (not being later than 30 June
      2000) on which the last of the conditions set out in Article 11
      (including all obligations of the Seller at Completion as set forth
      therein) to be satisfied or waived is satisfied or waived (the
      "TRANSFER DATE").  Notwithstanding the foregoing, contractually
      (schuldrechtlich) such sale and purchase is made with retroactive
      effect as of 31 March 2000 at 24.00 hours (the "EFFECTIVE DATE").

1.4   (Intentionally omitted)

1.5   The Seller guarantees that the net asset value of the Companies, which
      shall be determined on the basis of the total assets minus total
      liabilities as shown in the audited consolidated financial statements of
      the Companies as of 31 March 2000 (the "NET ASSET VALUE"), shall be at
      least HK$44,000,000 (Hong Kong Dollar; forty four million) as of the
      Effective Date, the date of the Agreement and the Transfer Date. The Net
      Asset Value to be determined on the basis of the consolidated financial
      statements of the Companies as of 31 March 2000, as audited by Andrew Ma
      and Company, shall be reviewed and confirmed by Arthur Andersen (the
      "CONFIRMED NET ASSET VALUE") and the Seller and the Purchaser shall be
      notified of the Confirmed Net Asset Value by Arthur Andersen in writing.
      If either of the Seller or the Purchaser raises objections to the
      Confirmed Net Asset Value, the parties shall use their best efforts to
      resolve such objections. In case the objections raised by either party
      should lead to an amendment of the Confirmed Net Asset Value, the Net
      Asset Value amended by the Seller and the Purchaser by mutual written
      agreement signed by the parties shall be deemed to be approved and shall
      be final and binding on the parties (the "BINDING NET ASSET VALUE").

1.6   If the parties fail to reach an agreement on the disputed issues within a
      period of 60 (sixty) days after the date on which Arthur Andersen issued
      the notice of Confirmed Net Asset Value (the "DATE OF NOTICE"), the
      disputed issues shall be referred to an independent firm of auditors with
      significant international experience appointed as expert
      (Schiedsgutachter) in the sense of Section 317 German Civil Code
      (Burgerliches Gesetzbuch, "BGB") (the "EXPERT") and not as an arbitrator
      jointly by the Seller and the Purchaser, who will resolve the disputed
      issues. The decision of the Expert shall be final and binding on the
      parties. The Net Asset Value as amended by the decision of the Expert
      shall be final and binding on the parties (the "BINDING NET ASSET VALUE").
      If the parties fail to agree on the firm of auditors to appoint as the
      Expert within a period of 70 (seventy) days after the Date of Notice, the
      Expert (which shall be an independent firm of auditors with significant
      international experience) shall be appointed by the President of the
      Institut der Wirtschaftsprufer e. V., Dusseldorf upon the request of
      either party of the Agreement.
<PAGE>   7
1.7      Each party bears the cost of the firm of auditors it retains to review
         the Net Asset Value. Each party shall bear one half of the costs of the
         Expert appointed pursuant to section 1.6.

1.8      The Seller is prohibited from making withdrawals from the Companies or
         to permit the making of such withdrawals from the date of the
         Agreement.

1.9      The Seller sells and assigns to the Purchaser all tangible or
         intangible assets to which the Seller may hold legal or equitable
         title, which serve the object of the Companies or which are designated
         to serve the object of the Companies, as well as all eventual rights of
         the Seller in respect of the Companies in so far as the Agreement does
         not explicitly provide otherwise. The Purchaser accept such sale and
         assignment.

1.10     The Seller hereby waives all option rights, sale rights
         (Verkaufsrechte), right of first refusal (Vorkaufsrechte) and rights of
         pre-emption, to which he might be entitled in connection with the
         transactions contemplated in the Agreement.

1.11     The Seller shall do and execute and deliver all such further acts,
         deeds, documents, instruments of conveyance, assignment and transfer
         and things as may be necessary to give effect to the terms of the
         Agreement and to place control of the Companies in the hands of the
         Purchaser. The Seller shall also use its reasonable endeavours to
         assist the Purchaser in obtaining any and all materials permits,
         licences, consents, approvals, certificates, qualifications,
         specifications, registrations or other authorisations necessary in the
         jurisdiction incorporation of each of the Companies for the effective
         operation of the Companies and the use of any of the assets of the
         Companies.

1.12     The sale and purchase and assignment according to section 1.1 and
         section 1.9 shall become valid and binding on the date on which the
         following conditions precedent are satisfied:

1.12.1   Credit of the First Instalment (as defined in section 2.2.1) to the
         account set forth in section 2.4.1, and

1.12.2   Credit of the Escrow Amount (as defined in section 2.2.2) to the
         account set forth in section 2.4.2.

2.       PURCHASE PRICE AND PAYMENT

2.1      The total consideration for the sale and transfer of the Hong Kong
         Shares according to Article 1, for the sale of all tangible and
         intangible assets to which the Seller may hold full or partial title,
         which serve the object of the Companies or which are designated to
         serve the object of the Companies, for the sale of all eventual rights
         of the Seller against the Companies according to section 1.9 as well as
         for all other obligations taken over by the Seller in the Agreement
         amounts to HK$140,160,600 (Hong Kong Dollar: one hundred forty million
         one hundred sixty thousand and six hundred) (the "PURCHASE PRICE").

2.2      The Purchase Price according to section 2.1 shall be paid to the Seller
         in two instalments on the following due dates:
<PAGE>   8
2.2.1    The first instalment shall be in the amount of HK$119,136,510 (Hong
         Kong Dollar: one hundred nineteen million one hundred thirty six
         thousand five hundred and ten) (the "FIRST INSTALMENT") and shall be
         paid by the Purchaser to the Seller at the date of the Agreement
         subject to all conditions precedent pursuant to Article 11 (including
         all obligations of the Seller at Completion as set forth therein)
         having been satisfied.

         The First Instalment is paid by the Purchaser to the Seller by wire
         transfer.

2.2.2    The second instalment shall be in the amount of HK$21,024,090 (Hong
         Kong Dollar: twenty one million twenty four thousand and ninety) (the
         "ESCROW AMOUNT") and shall be paid by the Purchaser to HSBC
         International Trustee Limited, 6th Floor, Tower 1, HSBC Centre, No.1
         Sham Mong Road, Kowloon, Hong Kong (the "ESCROW AGENT") at the date of
         the Agreement subject to all conditions precedent pursuant to Article
         11 (including all obligations of the Seller at Completion as set forth
         therein) having been satisfied to the interest bearing account
         regarding which the Escrow Agent is only authorised to dispose of after
         receipt by the Escrow Agent of irrevocable written instructions signed
         by both (i) the Managing Director of the Purchaser, the Chief Financial
         Officer, the Chief Executive Officer, the Treasurer or an Assistant
         Treasurer of Paxar Corporation, each of them with single authority of
         representation on behalf of the Purchaser (each of the aforementioned
         officers of the Purchaser or of Paxar Corporation, the "PAXAR
         REPRESENTATIVE") and the Seller, Mrs. Anja Bornemann and Mr. Gerhard
         Bornemann, each of them with single authority of representation on
         behalf of the Seller (each of the aforementioned persons the Seller,
         Anja Bornemann and Gerhard Bornemann, the "SELLER REPRESENTATIVE") (the
         "ESCROW ACCOUNT"). Interest accruing on the Escrow Amount shall be
         added to the Escrow Amount and as a consequence shall increase the
         Escrow Amount.

         (a)      (Intentionally omitted)

         (b)      The Escrow Amount shall serve the Purchaser as security for
                  its claims against the Seller of all kind arising out of or in
                  connection with the Agreement (the "CLAIMS") raised by the
                  Purchaser against the Seller within a period of 18 (eighteen)
                  months after 31 May 2000 (the "CLAIMS PERIOD").

                  The Paxar Representative and the Seller Representative are
                  obliged to take all actions which are necessary and
                  appropriate including giving joint instructions to the Escrow
                  Agent to transfer an amount equivalent to the Claims raised
                  during the Claims Period not exceeding the Escrow Amount from
                  the Escrow Account to the Purchaser after the Claims have been
                  determined by mutual agreement between the parties of the
                  Agreement or by arbitration according to Article 17.

                  Subject to section 2.2.2(d), the Paxar Representative and the
                  Seller Representative are obliged to take all actions which
                  are necessary and appropriate including giving joint
                  instructions to the Escrow Agent to transfer an amount, if
                  any, equivalent to the Escrow Amount reduced by the amount
                  equivalent to the Claims, if any, raised during the Claims
                  Period and further
<PAGE>   9
            reduced by an amount equivalent to 5% (five percent) of the Purchase
            Price from the Escrow Account to the Seller after the Claims Period
            has lapsed.

      (c)   5% (five percent) of the Purchase Price, if any, which remains on
            the Escrow Account after the lapse of the Claims Period (the "TAX
            ESCROW ACCOUNT") shall serve as the Purchaser's security for its
            claims against the Seller in connection with Taxes according to
            section 6.1 in connection with 5.6 and Article 10 (the "TAX CLAIMS")
            raised by the Purchaser against the Seller within a period of 36
            (thirty-six) months after the Completion Date (as defined in Article
            11) in respect of all Taxes payable by the Companies for the period
            up to the Effective Date (the "TAX CLAIMS PERIOD").

            The Paxar Representative and the Seller Representative are obliged
            to take all actions which are necessary and appropriate including
            giving joint instructions to the Escrow Agent to transfer an amount
            equivalent to the Tax Claims raised during the Tax Claims Period
            from the Escrow Account to the Purchaser after the Tax Claims have
            been determined by mutual agreement between the parties of the
            Agreement or by arbitration according to Article 17.

            Subject to section 2.2.2(d), the Paxar Representative and the Seller
            Representative are obliged to take all actions which are necessary
            and appropriate including giving joint instructions to the Escrow
            Agent to transfer an amount equivalent to the Tax Escrow Amount
            reduced by the amount equivalent to the Tax Claims, if any, raised
            during the Tax Claims Period from the Escrow Account to the Seller
            after the Tax Claims Period has lapsed.

      (d)   Notwithstanding other provisions to the contrary in this section
            2.2.2, no part of the Escrow Amount shall be transferred to the
            Seller unless and until the Seller has fully complied with his
            obligations under Article 14 of the Agreement.

2.3   In case of default in payment, the contracting parties agree that a
      default interest (Verzugszinsen) shall be payable at the rate of 5.5%
      (five point five percent) annually above the respective base percentage
      (Basiszinssatz) according to Section 1 German Statute Regarding Transitory
      Regulations for the Discount Rate (Diskontsatzuberleitungsgesetz, "DUG")
      for the period between the due date and the receipt of payment.

2.4   The Purchaser shall make payment of the Purchase Price to the accounts set
      forth below:

2.4.1 the First Instalment shall be paid to the following account:

      Hongkong & Shanghai Banking Corporation

      Branch:          Premier Centre, New Mandarin Plaza, Shop 115, Science
                       Museum Road, Tsim Sha Tsui East, Kowloon

      Account Number:  108 078 775 001
<PAGE>   10
      Account Name:    Bornemann U W H

2.4.2 the Escrow Amount shall be paid to the Escrow-Account

      Hongkong & Shanghai Banking Corporation

      Account Number:  500-613252-001

      Account Name:    HSBC International Trustee Limited - Subscription Account

      Reference Code:  Bonny Nice Escrow Agreement

3.    TRANSFER ACCOUNTS OF THE HONG KONG COMPANY

      (Intentionally omitted)

4.    ADJUSTMENT OF THE PURCHASE PRICE

4.1   Adjustment of the Purchaser Price due to lower Net Asset Value:

4.1.1 In the course of the determination of the Purchase Price the parties
      proceeded on the assumption that the Binding Net Asset Value of the
      Companies amounts to at least HK$44,000,000 (Hong Kong Dollar: forty four
      million).

4.1.2 Should the Binding Net Asset Value of the Companies be lower than the
      amount of HK$44,000,000 (Hong Kong Dollar: forty four million) the
      Purchase Price shall be reduced by an amount equivalent to the difference.

4.1.3 The amount by which the Purchase Price is reduced in accordance with
      section 4.1.2 is due and payable by the Seller to the Purchaser, 10 (ten)
      bank working days after the Confirmed Net Asset Value became the Binding
      Net Asset Value and shall carry interest starting from such due date on to
      the date at which the amount by which the Purchase Price is reduced is
      credited on the account of the Purchaser at the rate set forth in section
      2.3.

5.    REPRESENTATIONS, WARRANTIES AND GUARANTEES OF THE SELLER

      The Seller hereby represents, warrants and undertakes that the statements
      and declarations set out in this Article 5 (the "WARRANTIES") are complete
      and correct in all respects as of the date of the Agreement and the
      Transfer Date, except as provided otherwise in the Agreement. The Seller
      acknowledges that the Purchaser is entering into the Agreement in reliance
      on each of the Warranties with the intention of inducing the Purchaser to
      enter into the Agreement. No knowledge of the Purchaser relating to the
      Companies (actual, constructive or imputed) prevents or limits a claim
      made by the Purchaser for breach of any of the Warranties and the Seller
      may not invoke any such knowledge of the Purchaser as a defence to a claim
      for breach of any of the Warranties. Each of the Warranties is to be
      constructed independently and is not limited by another provision of the
      Agreement or any of the other Warranties.
<PAGE>   11
5.1   Preliminary Remarks

      The representations made in the Preliminary Remarks to the Agreement are
      complete and correct in every respect.

5.2   Corporate Matters

5.2.1 The Hong Kong Company is a limited liability company duly incorporated
      under the laws of Hong Kong and validly existing, is licensed or qualified
      to transact business in all locations in which it transacts business and
      has the corporate power and authority to own, lease or operate its assets
      and properties and to carry on its business as now being conducted.

5.2.2 The Panyu Company is a wholly foreign owned enterprise duly organised and
      validly existing under the laws of the People's Republic of China, is
      licensed or qualified to transact business in all locations in which it
      transacts business and has the corporate power and authority to own, lease
      or operate its assets and properties and to carry on its business as now
      being conducted.

5.2.3 (Intentionally omitted)

5.2.4 (Intentionally omitted)

5.2.5 (Intentionally omitted)

5.2.6 (Intentionally omitted)

5.2.7 Attachment 5.2.7 contains the most recent annual return of the Hong Kong
      Company which has been filed with the Hong Kong Companies Registry and a
      true, accurate and complete version of the memorandum and articles of
      association of the Hong Kong Company presently valid and in full force and
      effect. Other than such articles of association or memorandum of
      association there are no agreements, resolutions or arrangements
      whatsoever which relate to the relationship between the Hong Kong Company
      and shareholders of the Hong Kong Company or the relationship among the
      shareholders of the Hong Kong Company. There are no obligations to enter
      into such agreements, resolutions or arrangements which the Purchaser
      would be subject to as a consequence of the acquisition of the Hong Kong
      Shares.

5.2.8 Attachment 5.2.8 contains the most recent business licence and approval
      certificate of the Panyu Company and a true, accurate and complete version
      of the articles of association of the Panyu Company. The business licence
      and the approval certificate are presently valid and in full force and
      effect and have not been revoked. No changes have been made thereto. Other
      than such articles of association, there are no agreements, resolutions or
      arrangements whatsoever which relate to the relationship between the Panyu
      Company and its investor. There are no obligations to enter into such
      agreements, resolutions or arrangements which the Purchaser or the
      Companies would be subject to as a consequence of the acquisition of the
      Hong Kong Shares.

5.2.9 (Intentionally omitted)
<PAGE>   12
5.2.10   (Intentionally omitted)

5.2.11   (Intentionally omitted)

5.2.12   (Intentionally omitted)

5.2.13   The Companies are not bound by or otherwise a party to an agreement to
         make up for losses of whatsoever kind of a person or company.

5.2.14   The Hong Kong Shares comprise the whole of the allotted and issued
         share capital of the Hong Kong Company, have been properly allotted and
         issued and are fully paid up. Other than the Agreement, there is no
         agreement, arrangement or obligation requiring the creation, allotment,
         issue, transfer, redemption or repayment of, or the grant to a person
         of the right (conditional or not) to require the allotment, issue,
         transfer, redemption or repayment of, a share in the capital of the
         Hong Kong Company (including, without limitation, an option or right of
         pre-emption or conversion).

5.2.15   The Hong Kong Company has made capital contribution of not less than
         HK$29,339,881 (Hong Kong Dollar: twenty nine million three hundred
         thirty nine thousand eight hundred and eighty one) to the registered
         capital of the Panyu Company and such capital contribution has been
         verified by capital verification reports issued by certified public
         accountants registered in the People's Republic of China as having been
         fully and duly made in accordance with PRC laws and regulations. There
         is no agreement, arrangement or obligation requiring the transfer or
         assignment of, or the grant to a person of the right (conditional or
         not) to require the transfer or assignment of the whole or any part of
         the equity interest in the registered capital of the Panyu Company
         (including, without limitation, an option or right of pre-emption).

5.2.16   (Intentionally omitted)

5.2.17   (Intentionally omitted)

5.2.18   (Intentionally omitted)

5.2.19   (Intentionally omitted)

5.2.20   No other persons or companies, except those mentioned in the
         Preliminary Remarks of the Agreement, hold any direct or indirect
         interest in the Companies (including, without limitation, any right
         (conditional or not) to require the allotment, issue, transfer,
         assignment, redemption or repayment of, a share in the capital of the
         Hong Kong Company or any equity interest in the registered capital of
         the Panyu Company) and no rights to grant such interests exist.

5.2.21   (Intentionally omitted)

5.2.22   (Intentionally omitted)

5.2.23   The Seller is the sole beneficial owner of the Hong Kong Shares. There
         is no, nor is there any agreement or arrangement to create any,
         mortgage, charge, pledge, lien,
<PAGE>   13
         option, restriction, right of first refusal, right of pre-emption,
         third-party right or interest, other encumbrance or security interest
         of any kind on, over or affecting any of the Hong Kong Shares and no
         claim has been made by any person to be entitled to any of the
         foregoing.

5.2.24   The Hong Kong Company is the sole legal and beneficial owner of all
         equity interest in the registered capital of the Panyu Company. There
         is no, nor is there any agreement on arrangement to create any
         mortgage, charge, pledge, lien, option, restriction, right of first
         refusal, right of pre-emption, third-party right or interest, other
         encumbrance on security interest of any kind on, over or affecting any
         part of the equity interest in the Panyu Company, and no claim has been
         made by any person to be entitled to any of the foregoing.

5.2.25   (Intentionally omitted)

5.2.26   None of the Companies owns or holds any other equity, interest, shares,
         participations or sub-participations of any kind in any other person or
         entity (other than the entities listed in Attachment 5.2.26).

5.2.27   The Seller has the unrestricted right to freely dispose of the Hong
         Kong Shares. There are no restrictions regarding the right to dispose
         of, or rights of third parties regarding the Hong Kong Shares.
         Sub-participations (Unterbeteiligungen) do not exist.

5.2.28   (Intentionally omitted)

5.2.29   (Intentionally omitted)

5.2.30   (Intentionally omitted)

5.2.31   (Intentionally omitted)

5.2.32   (Intentionally omitted)

5.2.33   None of the Companies has any right or obligation to acquire or to
         subscribe to any equity, shares or other interest in any other person
         or entity and no person or entity has the right to call for the
         allotment, issuance, conversion, sale or transfer of any share or
         interest of, or other securities as the case may be, giving rise to a
         right over the capital of or equity interest in any of the Companies.

5.2.34   The Seller has full power and authority, and has taken all necessary
         and proper action, to execute and deliver the Agreement and any other
         agreements and instruments executed in connection with the Agreement
         and to consummate the transactions contemplated hereby and thereby.
         Such agreements and instruments when executed and delivered will
         constitute valid, binding and enforceable obligations of the Seller.

5.2.35   None of the Companies is over-indebted or insolvent (uberschuldet oder
         zahlungsunfahig), except as listed in Attachment 5.2.35.
<PAGE>   14
5.2.36   None of the Companies is a party to any joint venture agreement,
         cooperation agreement, working party agreement
         (Arbeitsgemeinschaftsvertrag) or similar contractual arrangement with
         third parties (excluding membership in professional associations).

5.2.37   None of the Companies has branch offices or other business operations
         apart from the administrative headquarters.

5.2.38   (Intentionally omitted)

5.2.39   Neither the execution or delivery of the Agreement and any other
         agreements or instruments executed or to be executed in connection with
         the Agreement to which the Seller will become a party, nor the
         consummation of the transactions contemplated hereby or thereby:

         (a)      requires any filing or registration with, or permit,
                  authorisation, consent or approval of, any court,
                  governmental, administrative or regulatory authority or any
                  third party which will not or has not been done,

         (b)      violates any legal provisions or instruments or other
                  agreements the Seller is subject to,

         (c)      violates the memorandum and/or articles of association of the
                  Companies or similar legal provisions or instruments the
                  Companies are subject to,

         (d)      conflicts with, violates, results in breach of, or constitutes
                  a default under, any contract, agreement, arrangement or
                  instrument to which any of the Companies is a party or by
                  which any of the Companies is bound or relieves any other
                  party to such contract, agreement, arrangement or instrument
                  of its obligations thereunder or entitles any such party to
                  terminate, amend, supplement, suspend or renegotiate such
                  contract, agreement, arrangement or instrument,

         (e)      creates or increases the amount of any liability or obligation
                  of any of the Companies under such contract, agreement,
                  arrangement or instrument (or give any other party the right
                  to accelerate the obligation thereunder or claim any fee or
                  penalty with respect thereto) or any liability or obligation
                  for which the Purchaser or any of the Companies will assume
                  responsibility following the date of the Agreement, or

         (f)      will result in the lapse of rights of any of the Companies.

5.2.40   (Intentionally omitted)

5.3      Financial Matters

5.3.1    The Seller will procure delivery to the Purchaser the audited financial
         statement (balance sheet and profit and loss account) of the Hong Kong
         Company for the fiscal year ending 31 March 2000 as well as the audited
         consolidated financial statement of the Companies for the fiscal year
         ending 31 March 2000 on or before 30 June 2000 (the
<PAGE>   15
         financial statement of the Hong Kong Company and the consolidated
         financial statement of the Companies together, the "FINANCIAL
         STATEMENTS"). The Financial Statements will be prepared with the due
         diligence of an orderly and prudent businessman in accordance with the
         requirements of the relevant laws of Hong Kong and on a consistent
         basis in accordance with generally accepted accounting principles and
         practices of Hong Kong. The Financial Statements will be audited and
         certified without qualification by the firm of auditors of the Hong
         Kong Company. The Financial Statements will contain all known assets
         and all recognizable liabilities. All recognizable risks, depreciation
         in value and/or losses will be reflected by sufficient depreciation,
         value adjustments or provisions. The Financial Statements will be
         complete and correct and will truly and fairly reflect the economic,
         financial and profit situation of the Hong Kong Company or, as the case
         may be, the consolidated economic financial and profit situation of the
         Companies as of the date and for the period of the Financial
         Statements.

5.3.2    The Seller will procure delivery to the Purchaser the audited financial
         statement (balance sheet and profit and loss account) of the Panyu
         Company for the fiscal year ending 31 December 1999 on or before 30
         June 2000 (the "FINANCIAL STATEMENT OF THE PANYU COMPANY"). The
         Financial Statement of the Panyu Company will be prepared with the due
         diligence of an orderly and prudent businessman in accordance with the
         requirements of the relevant laws and regulations of the PRC and on a
         consistent basis in accordance with generally accepted accounting
         principles and practices of the PRC. Such Financial Statement of the
         Panyu Company will be audited and certified without qualification by
         the auditors of the Panyu Company. The Financial Statement of the Panyu
         Company will contain all known assets and all recognizable liabilities.
         All recognizable risks, depreciation in value and/or losses will be
         taken care of by sufficient depreciation, value adjustments or
         provisions with the exception of potential provisions in connection
         with the past business practices of the Panyu Company. The Financial
         Statement of the Panyu Company will be complete and correct and will
         correctly reflect the economic, financial and profit situation of the
         Panyu Company as of the date and for the period of the Financial
         Statement of the Panyu Company with the exception of potential
         provisions in connection with the past business practices of the Panyu
         Company. The exception made in the two preceding sentences regarding
         the Panyu Company is also applicable to all other representations,
         warranties and guarantees of the Seller regarding the Panyu Company
         referred to in the Agreement.

5.3.3    (Intentionally omitted)

5.3.4    (Intentionally omitted)

5.3.5    All the tangible assets having a book value in excess of HK$300,000
         (Hong Kong Dollar: three hundred thousand) reflected in the Financial
         Statements are fit to be used and in good operating condition and
         repair (with the exception of normal wear and tear). All the tangible
         and intangible assets, properties and rights reflected in the Financial
         Statements are in unrestricted ownership of the Companies, which the
         Companies can freely dispose of, and which are, except as set forth
         under section 5.3.6, free and clear of any mortgages, charges, pledges,
         liens, encumbrances or other rights or
<PAGE>   16
         security interests of third parties and comprise all the business
         assets which are necessary for carrying on the business of the
         Companies as now carried on and such assets, properties and rights,
         were sufficient to produce the income for the period between 31 March
         2000 and the Transfer Date as shown on the relevant income statements
         for that period contained in the relevant financial statements other
         than assets, properties and rights not owned by the Companies which
         were used by the Companies pursuant to binding agreements with (i) the
         Seller as set forth in Attachment 5.3.5(a) or (ii) third parties as
         listed in Attachment 5.3.5(b). The Companies do not have any
         liabilities that are not directly related to, and that are not arising
         directly out of their business. Each single asset has a value of at
         least the amount as shown in the Financial Statements.

5.3.6    The stock (Vorrate) stated in the Financial Statements is only
         encumbered with title retention rights (Eigentumsvorbehaltsrechte) or
         other securities for liabilities which came into existence during the
         ordinary course of the business and which are shown in the Financial
         Statements. The stock of the Companies is readily saleable or properly
         reserved against. The stock of the Companies as stated in the Financial
         Statements has been valued in accordance with the generally accepted
         accounting principles and practices of Hong Kong.

5.3.7    The Financial Statements including the notes (Anhang) thereto, makes
         full and adequate disclosure of, and provision for, all obligations and
         liabilities of the Companies to which they relate as of the date
         thereof. The Companies do not have any liabilities, debts, claims or
         obligations (including "off-balance sheet" liabilities, debts, claims
         or obligations) and nothing of the foregoing comes into existence out
         of events, actions or omissions occurring during the time period up to
         the Transfer Date in excess of HK$750,000 (Hong Kong Dollar: seven
         hundred and fifty thousand) in each single case, whether accrued,
         absolute, contingent or otherwise, and whether due or to become due,
         other than (i) as fully provided for in the Financial Statements, or
         (ii) trade payables and accrued expenses incurred in the ordinary
         course of business since the respective dates of the Financial
         Statements.

5.3.8    (Intentionally omitted)

5.3.9    (Intentionally omitted)

5.4      Real Estate Property

         (a)      The Companies are the legal and beneficial owners of the real
                  estate property described in Attachment 5.4(a) as to location,
                  size and ownership (the "REAL ESTATE") and have good and
                  marketable title to the Real Estate. The Real Estate described
                  in Attachment 5.4(a) is identical to such real estate property
                  which is marked with red colour on the maps contained in
                  Attachment 5.4(a). Such Real Estate property is only
                  encumbered as shown in Attachment 5.4(a). The Companies are
                  entitled to and have exclusive vacant possession of the Real
                  Estate. The Companies have no obligations to pay local
                  improvement assessments in respect of the Real Estate. There
                  are no mortgages, other security interests or encumbrances on
                  the Real Estate, other than those set forth
<PAGE>   17
                  above, which may result in any financial obligation of the
                  Companies or would have a detrimental effect on the present
                  and future use of the Real Estate.

         (b)      (Intentionally omitted)

         (c)      (Intentionally omitted)

         (d)      (Intentionally omitted)

         (e)      (Intentionally omitted)

         (f)      (Intentionally omitted)

         (g)      All real estate property leased or rented by the Companies is
                  described in Attachment 5.4(g) as to lessor, lessee, location,
                  size and annual lease payment (the "LEASED Property"). All
                  consents (including mortgagee consents) required in connection
                  with the lease or tenancy agreements have been obtained and
                  have not been withdrawn. The use of the Leased Property by the
                  Companies is not in breach of the permitted use specified in
                  the lease or tenancy agreements. The lessee under such lease
                  or tenancy agreements has not committed a material violation
                  of the lease or tenancy agreement which would give the owner
                  or lessor of the real estate property the right to prematurely
                  terminate the lease or tenancy agreement concerned. The
                  Companies are not in default of payments or other obligations
                  owed under the lease or tenancy agreements. The lessor has not
                  given notice of termination regarding such lease or tenancy
                  agreements.

         (h)      (Intentionally omitted)

         (i)      (Intentionally omitted)

         (j)      The Companies do not use or possess any real estate property
                  which is neither the Real Estate nor the Leased Property.

                  The Companies do not own and have not leased any real estate
                  property which is not set forth in Attachment 5.4(a) (Real
                  Estate) and Attachment 5.4(g) (Leased Property).

                  The Companies do not have any obligation to acquire or lease
                  any real estate property.

         (k)      The Companies have not leased to any party any real estate
                  property wherever located.

         (l)      During the last 5 (five) years the Companies

                  (i)      have not sold any real estate property wherever
                           located and

                  (ii)     have terminated lease agreements regarding real
                           estate property listed in Attachment 5.4(l)(ii). The
                           Companies do not have any outstanding
<PAGE>   18
                           obligations under such lease agreements, including
                           without limitation, any obligation to make payments
                           or satisfy any claims arising from or in connection
                           with such lease agreements.

         (m)      To the best knowledge of the Seller after due inquiry, the
                  buildings of the Real Estate and the buildings used by the
                  Companies have been erected in compliance with the relevant
                  laws applicable to the buildings at their respective location
                  and are used and maintained in compliance with such laws. The
                  Real Estate is not subject to the laws regarding protection of
                  monuments (Denkmalschutz). All public permits and licences
                  required for the construction and operation of the buildings
                  and constructions installed on the Real Estate or on the
                  buildings used by the Companies have been obtained. No
                  withdrawal or revocation of such public permits and licences
                  has been threatened and there are no circumstances which would
                  allow such withdrawal or revocation of any such public permit
                  or licence. All statements in the application for such public
                  permits and licences are, and to the best knowledge, all
                  statements in such public permit and licences are true,
                  accurate and complete and all permits and licences that are
                  necessary or useful for the operation of the buildings and
                  constructions are transferable.

         (n)      There are no disputes or outstanding or expected notices
                  (whether given by a lessor, a licensor, a government authority
                  or any other person) affecting the Real Estate. The Companies
                  have duly performed, observed and complied with and there is
                  no subsisting breach of any covenants, restrictions,
                  conditions, agreements, statutory requirements, by-laws,
                  orders, building regulations or other obligations affecting
                  the Real Estate or the use thereof and all outgoings, rents
                  and service charges have been disclosed and paid to date.

5.5      Period following the end of the recent fiscal year

         Since 31 March 2000 until the date of the Agreement the business and
         the operations of the Companies have been conducted according to the
         principles of a prudent businessman; no changes in the business
         activities or the financial circumstances or the kind and manner of
         conducting the business of the Companies have occurred, which are
         outside the ordinary course of the business activities of the Companies
         and which are not consistent with past practices. Without limiting the
         foregoing, since 31 March 2000 until the date of the Agreement:

         (a)      The Companies have not suffered any material adverse effect
                  on, or material adverse change in the condition (financial or
                  otherwise), business, operations, assets, liabilities, results
                  of operation, cash flows, or prospects.

         (b)      The Companies have not incurred any obligation (contingent or
                  otherwise) or entered into any contract, agreement or
                  arrangement which, ab initio, either

                  (i)      requires a payment by any party in excess of, or a
                           series of payments which in the aggregate exceed,
                           HK$1,500,000 (Hong Kong Dollar: one million and five
                           hundred thousand) or provides for the delivery of
<PAGE>   19
                           goods or performance of services, or any combination
                           thereof, having a value in excess of HK$1,500,000
                           (Hong Kong Dollar: one million and five hundred
                           thousand), or

                  (ii)     has a term in excess of, or requires the performance
                           of any obligations by the Companies over a period in
                           excess of 6 (six) months.

         (c)      The Companies have not taken any action, or entered into or
                  authorised any contract, agreement or arrangement or
                  transaction, other than in the ordinary course of business and
                  consistent with past practice. None of the Companies incurred
                  any obligations in excess of HK$600,000 (Hong Kong Dollar: six
                  hundred thousand) in the aggregate which are not shown in the
                  books of the Companies or which were not incurred in the
                  ordinary course of the business of the Companies.

         (d)      The Companies have not sold, transferred, conveyed, assigned
                  or otherwise disposed of any of their assets or properties in
                  each single case in excess of HK$600,000 (Hong Kong Dollar:
                  six hundred thousand), except sales of inventory in the
                  ordinary course of business and consistent with past practice.

         (e)      The Companies have not acquired or disposed of any shares or
                  interest in other companies or partnerships.

         (f)      The Companies have not entered into, authorised, or permitted
                  any transaction with the Seller.

         (g)      The Companies have not authorised for issuance, issued, sold,
                  delivered or agreed or committed to issue, sell or deliver
                  (whether through the issuance or granting of options,
                  warrants, convertible or exchangeable securities, commitments,
                  subscriptions, rights to purchase or otherwise) any of their
                  capital or any other securities, or amended any of the terms
                  of any such capital or securities. The Companies have not
                  changed their corporate documents or changed their registered
                  capital.

         (h)      The Companies have not split, combined, or reclassified any
                  interests in their capital, declared, set aside or paid any
                  dividend or other distribution (whether in cash, securities or
                  property or any combination thereof) in respect of their
                  capital, or redeemed or otherwise acquired any capital or
                  securities of the Companies.

         (i)      The Companies have not made any borrowings or entered into any
                  agreements to borrow, incurred any debt or applied for the
                  granting or increase of a credit line (other than trade
                  payables in the ordinary course of business and consistent
                  with past practice), or assumed, guaranteed, endorsed (except
                  for the negotiation or collection of negotiable instruments in
                  transactions in the ordinary course of business and consistent
                  with past practice) or otherwise become liable (whether
                  directly, contingently or otherwise) for the obligations of
                  any other person or entity, or made any payment or repayment
                  in respect of
<PAGE>   20
                  any indebtedness (other than trade payables and accrued
                  expenses in the ordinary course of business and consistent
                  with past practice).

         (j)      The Companies have not made any loans or extensions of credit
                  to, advances or capital contributions to, or investments in,
                  any other person or entity in excess of HK$300,000 (Hong Kong
                  Dollar: three hundred thousand) in each single case or
                  HK$750,000 (Hong Kong Dollar: seven hundred and fifty
                  thousand) in the aggregate.

         (k)      The Companies have not entered into, adopted, amended or
                  terminated any bonus, profit sharing, compensation,
                  termination, stock option, stock appreciation right,
                  restricted stock, performance unit, pension, retirement,
                  deferred compensation, employment, severance or other employee
                  benefit agreements, trusts, plans, funds or other arrangements
                  for the benefit or welfare of any director, officer,
                  consultant or employee, or increased in any manner the
                  compensation or fringe benefits of any director, officer,
                  consultant or employee or paid any benefit not required by any
                  existing plan and arrangement or entered into any contract,
                  agreement, commitment or arrangement to do any of the
                  foregoing in excess of an annual obligation of HK$450,000
                  (Hong Kong Dollar: four hundred and fifty thousand) in each
                  single case.

         (l)      The Companies have not except for capital expenditures
                  contemplated by section 5.5 (m) acquired, leased or encumbered
                  any assets or properties outside the ordinary course of
                  business or any assets with a market value of more than
                  HK$300,000 (Hong Kong Dollar: three hundred thousand) in each
                  single case or HK$750,000 (Hong Kong Dollar: seven hundred and
                  fifty thousand) in the aggregate.

         (m)      The Companies have not authorised or made any capital
                  expenditures which individually is in excess of HK$600,000
                  (Hong Kong Dollar: six hundred thousand).

         (n)      The Companies have not made any tax election or settled or
                  compromised any liability for Taxes (as defined in section
                  5.6).

         (o)      The Companies have not paid any amount, performed any
                  obligation or agreed to pay any amount or perform any
                  obligation, in settlement or compromise of any suits or claims
                  of liability against the Companies or any of their respective
                  board members, managing directors, officers, employees or
                  agents in excess of HK$150,000 (Hong Kong Dollar: one hundred
                  and fifty thousand) in each single case and HK$300,000 (Hong
                  Kong Dollar: three hundred thousand) in the aggregate.

         (p)      The Companies have not been subject to a substantial change or
                  termination of any Material Contract (as defined in section
                  5.13.5 below).
<PAGE>   21
5.6      Taxes and Other Levies

5.6.1    The Companies have:

         (a)      paid when due (and, if not yet due, has fully and adequately
                  provided for on the Financial Statements) all Taxes (as
                  defined below), levies, social contributions, duties or other
                  assessments or charges of any nature whatsoever imposed by any
                  taxing authority and any amounts representing the recapture of
                  investment and other incentives. The Companies have not
                  incurred any liabilities for Taxes other than in the ordinary
                  course of business for any taxable year for which the
                  applicable statute of limitations has not expired; there are
                  no liens (other than liens for current Taxes not yet due and
                  payable) upon the assets or properties of the Companies. The
                  Companies have not granted or been requested to grant any
                  waiver or extension of any statute of limitations applicable
                  to any claim for Taxes,

         (b)      filed all Tax Returns (as defined below) for all periods
                  through and including the date of the Agreement as required by
                  applicable statutes, law, regulations or common practice and
                  paid (and, if not yet due, has fully and adequately provided
                  for in the Financial Statements) all Taxes shown as due on the
                  Tax Returns and on all tax assessments. Each tax return is
                  true, accurate and complete and the Companies have not and
                  will not have any additional liability for Taxes with respect
                  to any Tax Return, other than as reflected as liabilities on
                  the Financial Statements. No amended Tax Returns have been or
                  are proposed to be filed by the Companies nor has any
                  liability for Taxes been settled or compromised. The Companies
                  have furnished to the Purchaser correct and complete copies of
                  all Tax Returns for all tax years for which the applicable
                  statutes of limitations have not expired. The Companies have
                  copies of all Tax Returns and supporting work schedules for
                  all tax periods or portions thereof ending before or including
                  the Transfer Date and has not destroyed or otherwise disposed
                  of any such records,

         (c)      paid the current adequate advance payments for all relevant
                  Taxes,

         (d)      duly withheld or collected all Taxes the Companies are
                  required to withhold or collect,

         (e)      filed tax returns in the countries listed in Attachment
                  5.6.1(e) and has no current or former presence in any taxing
                  jurisdiction in which it does not file Tax Returns that may
                  cause the Companies to be subject to any Tax in such taxing
                  jurisdiction,

         (f)      not made any hidden profit distributions,

         (g)      not and do not expect to be involved in a dispute in relation
                  to Tax. No Tax Authority has investigated or indicated that it
                  intends to investigate the Companies' tax affairs,
<PAGE>   22
         (h)      not entered into nor have agreed to operate any special
                  arrangement (that is, an arrangement which is not based on a
                  strict application of all relevant Tax legislation) with a Tax
                  Authority in relation to the Tax affairs of the Companies. All
                  notices and other communications from a Tax Authority
                  requiring or permitting the Companies to deal with their Tax
                  affairs in a particular manner or on a particular basis are in
                  the Companies' possession and copies thereof have been made
                  available to the Purchaser,

         (i)      not been and will not be parties to or otherwise involved in
                  any transaction, agreement or arrangement otherwise than by
                  way of a bargain at arm's length, or any transaction,
                  agreement or arrangement (whether or not by way of a bargain
                  at arm's length) under which they have been or are required to
                  make any payment for any goods, services or facilities
                  provided to them which is in excess of the market value of
                  such goods, services or facilities or under which they have
                  been, or are or may be required to provide goods, services or
                  facilities for a consideration which is less than the market
                  value of such goods, services or facilities and/or in
                  consequence of which they are or will be liable to Tax in
                  respect of an amount deemed for Tax purposes to be their own
                  income or gains but actually is not their income or gains,

         (j)      not been liable and will not become liable for Tax which is
                  primarily or directly chargeable against or attributable to a
                  person other than the Companies or which is charged by
                  reference to the income or gains of or any supplies made by
                  another person,

         (k)      have caused all documents by virtue of which the Companies
                  have any right or an interest in their enforcement to be duly
                  stamped.

5.6.2    "TAX" or "TAXES" means all income, corporation, gross receipts,
         profits, sales, use, value added, transfer, employment, social
         contribution, labour insurance contribution, franchise, license,
         payroll, unemployment, exercise, capital duties, customs duties,
         environmental, property, estimated, withholding or other taxes, fees,
         stamp taxes and duties, assessments or charges of any kind whatsoever
         (whether payable directly or by withholding), together with any
         interest and any penalties, additions to tax or additional amounts
         imposed by any taxing authority with respect thereto.

         "TAX RETURN(S)" means any return (including any consolidated, combined
         or pro forma return), report, declaration, claim for refund,
         information return or statement, relating to any Tax, including any
         schedule or attachment thereto or any amendment thereof.

5.6.3    No Tax Return of the Companies is currently under examination by any
         taxing authority nor have the Companies been contacted by any taxing
         authority in order to commence such an examination. There are no
         pending appeals or other administrative or judicial proceedings with
         respect to any Tax imposed with respect to the activities of the
         Companies.

5.7      Intellectual Property Rights
<PAGE>   23
         (a)      Attachment 5.7(a)(i) sets out a true, accurate and complete
                  list of all patents including utility patents and design
                  patents (Patente, Gebrauchsmuster und Geschmacksmuster),
                  trademarks/service marks (Marken) (including logos), business
                  or trade name including respective applications which are
                  owned by, licensed to, necessary for or used in the business
                  of the Companies (including intellectual property rights
                  licensed to the Companies from the Seller) for products
                  designed, developed, manufactured, used, marketed, sold,
                  distributed, serviced or maintained as well as for related
                  services as of the date of the Agreement or at any time during
                  the 2 (two) year period prior to the date of the Agreement or
                  in development as of the date of the Agreement or at any time
                  during the 2 (two) year period prior to the date of the
                  Agreement (hereinafter the "INTELLECTUAL PROPERTY RIGHTS").
                  Attachment 5.7(a)(ii) sets out a true, accurate and complete
                  list of all such Intellectual Property Rights which are owned
                  by the Companies (the "INTELLECTUAL PROPERTY RIGHTS OF THE
                  COMPANIES").

         (b)      Besides the Intellectual Property Rights there are no
                  intellectual property rights including respective applications
                  which are owned by the Seller which relate to the business of
                  the Companies.

         (c)      Except for design patents the Companies have fully carried out
                  their business activities and have used all trademarks/service
                  marks (Marken) included in the Intellectual Property Rights of
                  the Companies to the extent required by law for the Companies
                  to register and enforce such trademarks/service marks.

         (d)      Third parties neither have challenged nor have threatened to
                  challenge the Intellectual Property Rights by means of filing
                  objections, taking action for cancellation or otherwise.

         (e)      To the best knowledge of the Seller third parties neither have
                  infringed the Intellectual Property Rights nor have made
                  unauthorized use of the Know-How.

         (f)      No intellectual property rights of third parties are
                  conflicting with or prevent the unlimited use of the
                  Intellectual Property Rights and Know-How; the products
                  produced and sold and the services provided by the Companies
                  and any process, method and design employment in connection
                  with such products or services and the marketing, use or
                  provision by the Companies of any such product or service do
                  not infringe or conflict with any intellectual property rights
                  of any other person or entity; none of the Intellectual
                  Property Rights is subject to any pending or threatened
                  litigation or claim of infringement and no written notice has
                  been received by the Seller and the Companies contesting the
                  right of the Companies to use any Intellectual Property
                  Rights. The Companies can make unlimited use of their
                  Know-How.

         (g)      All Intellectual Property Rights of the Companies are properly
                  registered and maintained and valid, or a proper application
                  for registration has been filed with regard to such
                  Intellectual Property Rights of the Companies. The Companies
                  have not granted any licence or agreed to pay or receive any
                  royalty in respect
<PAGE>   24
                  to the Intellectual Property Rights of the Companies. The
                  Intellectual Property Rights of the Companies are free and
                  clear of any liens, encumbrances and other rights of third
                  parties.

         (h)      All Intellectual Property Rights licensed to, but not owned by
                  the Companies are shown in Attachment 5.7(h) and all such
                  licenses are valid and enforceable and the Companies are not
                  in breach or default with respect to any such license or
                  royalty agreements nor have they received any written notice
                  of termination thereunder.

         (i)      The Companies have not granted or received Know-How licences.

         (j)      The Companies own or hold valid and enforceable licenses for
                  the use of all software rights and applications used in their
                  business.

         (k)      All software and computers used in the business of the
                  Companies is Year 2000 compliant.

5.8      Insurance

         Attachment 5.8 contains a true, accurate and complete list of all
         insurance policies applicable to the Companies (and its respective
         business and assets) including the third party liability insurance
         contracts (setting forth whether the third party liability insurance
         contract is of claim made or occurrence type) in each case with the
         statement of the insured amount and the annual premium. Such insurance
         policies cover all Real Property and personal property owned, leased or
         used by the Companies. Such insurance policies provide type and amounts
         of insurance customarily obtained by businesses similar to the business
         of the Companies.

5.9      Approvals

5.9.1    Attachment 5.9.1 sets out a true, accurate and complete list of all
         material licences, certificates, permits, permit applications,
         franchises, private product approvals ("Approvals") held by or applied
         for by the Companies. The Approvals listed in Attachment 5.9.1 are the
         only material approvals required according to public and private law to
         conduct the respective business operations of the Companies, as
         presently conducted and the revocation, withdrawal or refusal of any of
         the Approvals is not pending. The business of the Companies is carried
         out in compliance with such Approvals. Except as listed in Attachment
         5.9.1 all material approvals required for the production, marketing and
         sale of all products and the import and export of all materials of the
         Companies have been obtained and are valid and in full force and
         effect. All products sold by the Companies comply with the applicable
         statutory or other legal provisions and the Approvals.

         Neither the Seller nor the Companies are aware of nor have received
         notice that any national, state or local governmental or regulatory
         authority or agency (the "AUTHORITIES") in their respective
         jurisdiction has commenced, or is considering commencing, any action to
         seize, withdraw any of the Approvals of, or recall any device
         developed, produced, manufactured, tested, distributed, packaged or
         sold or
<PAGE>   25
         serviced by the Companies, and have no grounds to believe that these or
         other enforcement actions are imminent.

5.9.2    Except as previously disclosed to Paxar Corporation or its accountant
         to the best knowledge of the Seller after due inquiry, the Companies
         have not and no officer, employee, or agent of the Companies has made
         an untrue statement of material fact or fraudulent statement to the
         Authorities, failed to disclose a material fact required to be
         disclosed to the Authorities, or committed an act, made a statement, or
         failed to make a statement that could reasonably be expected to provide
         a basis for the Authorities to invoke any investigative or other
         proceedings.

5.9.3    Except as previously disclosed to Paxar Corporation or its accountant
         to the best knowledge of the Seller after due inquiry, the Companies do
         not violate in their businesses any right or rights of third parties.
         The Companies and their businesses and all of their properties, assets
         and equipment are in compliance with, and no violation exists under,
         any and all laws, statutes, rules, regulations, ordinances and decrees
         applicable to the Companies and to such businesses, properties assets
         and equipment (including applicable laws, regulations and orders of any
         Authorities). The Companies are currently not the subject of any
         compliance or enforcement actions by any Authorities nor are they
         subject to any consent orders or decrees. No notice from any
         Authorities has been received by the Companies claiming any violation
         of any law, statute, rule, regulation, ordinance or decree or requiring
         any work, construction or expenditure, or asserting any tax, assessment
         or penalty.

5.10     Pension/Labour

5.10.1   the Companies have not entered into any labour union agreements, works
         council agreements (Betriebsvereinbarungen) or collective bargaining
         agreements (Tarifvertrage). No further labour union, works council or
         collective bargaining agreements are currently being negotiated in
         respect of the Companies.

5.10.2   (Intentionally omitted)

5.10.3   the relationships of the Companies with their employees are good and
         there is, and during the past 3 (three) years prior to the date of the
         Agreement there has been, no material dispute with labour unions,
         labour strike, dispute, slow-down, work stoppage or other labour
         difficulty actually pending or threatened against or involving the
         Companies.

5.10.4   the Companies have conducted and currently are conducting their
         business in full compliance with all laws, rules, regulations and
         ordinances, labour union, works council agreements and collective
         bargaining agreements relating to employment and employment practices,
         terms and conditions of employment, contributions to social and labour
         insurance, leave, wages (including minimum wages), normal and overtime
         hours, overtime pay, and nondiscrimination employment.

5.10.5   Attachment 5.10.5 sets out a true, accurate and complete list of the
         names, titles, locations, annual compensation and all bonuses,
         allowances, benefits and similar
<PAGE>   26
         payments made with respect to each such individual for the current and
         preceding fiscal years for all board members, managing directors,
         directors, officers and employees of the Companies who have an annual
         base salary of more than HK$450,000 (Hong Kong Dollar: four hundred and
         fifty thousand) or who can only be terminated by the Companies with a
         notice period of 3 (three) or more months.

5.10.6   (Intentionally omitted)

5.10.7   (Intentionally omitted)

5.10.8   the Companies have no obligations arising from the termination or
         cancellation of any employment agreement exceeding HK$150,000 (Hong
         Kong Dollar: one hundred and fifty thousand) in each single case.

5.10.9   The Companies have no obligation, whether contractually established or
         by plant exercise (betriebliche Ubung), to pay or grant to any of its
         current or former employees any salary, fringe benefit exceeding
         HK$450,000 (Hong Kong Dollar: four hundred and fifty thousand) annually
         in each single case.

5.10.10  (Intentionally omitted)

5.11     Negative Representations

         The Companies are not party or subject to:

         (a)      rental, leasing or similar contracts with continuing
                  obligations which in each single case provide for an annual
                  payment in excess of HK$750,000 (Hong Kong Dollar: seven
                  hundred and fifty thousand) except as listed in Attachment
                  5.11(a),

         (b)      consultancy and/or commission agreements (whether oral or
                  written) which provide for an annual payment in excess of
                  HK$600,000 (Hong Kong Dollar: six hundred thousand),

         (c)      obligations owed to a benevolent fund, pension liabilities,
                  pension- and related benefit liabilities or other agreements
                  for payments in case of sickness, disability, maternity, old
                  age, unemployment, long service and severance payments except
                  as listed in Attachment 5.11(c),

         (d)      sales agreements with a value of more than HK$750,000 (Hong
                  Kong Dollar: seven hundred and fifty thousand) annually of the
                  Companies which have different terms compared to the standard
                  sales contract of the Companies which is contained in
                  Attachment 5.11(d)(i), whereby sales agreements with varying
                  delivery terms, discounted payment terms of less than 61
                  (sixty-one) days and annual volume bonuses of less than 3%
                  (three percent) of invoiced prices are not considered as
                  having different wording compared to the standard sales
                  contract of the Companies,
<PAGE>   27
         (e)      agreements regarding compensation, dependant on profit or
                  turnover of the Companies, profit sharing or similar
                  arrangements,

         (f)      competition restraints or contracts or other documents that
                  limit the freedom of the Companies to compete or similar
                  restrictions to the detriment of the Companies,

         (g)      sureties, guarantees, comfort letters, performance bonds,
                  letters of credit or similar undertakings regarding the
                  indebtedness of any person or entity incurred or issued by the
                  Companies with a face value of more than HK$750,000 (Hong Kong
                  Dollar: seven hundred and fifty thousand),

         (h)      contingent or actual repayment obligations in connection with
                  grants or subsidies received by the Companies,

         (i)      contractual obligations of whatsoever kind which are not shown
                  in the Financial Statements with a face value of more than
                  HK$750,000 (Hong Kong Dollar: seven hundred and fifty
                  thousand), except as set forth in section 5.11(a) through to
                  5.11(h) or in sales agreements,

         (j)      pending, expected or threatened actions, claims, disputes,
                  inquiries or proceedings before courts, administrative
                  authorities or arbitration bodies, investigations or inquiries
                  by administrative authorities, including, without limitation,
                  those relating to environmental pollution (including any
                  criminal investigations) where the Companies are a party to or
                  involved or named in or where properties or assets of the
                  Companies are involved in, with an aggregate value in dispute
                  (Streitwert) in excess of HK$1,500,000 (Hong Kong Dollar: one
                  million and five hundred thousand]). There are no facts known
                  which could give reason to institute the aforementioned
                  proceedings,

         (k)      forward contracts regarding goods, foreign currencies and
                  interest (Waren-, Devisen- und Zinstermingeschafte),

         (l)      licence agreements with the Companies as licensor or licensee
                  regarding Intellectual Property Rights or other unprotected
                  Know-How except as listed in Attachment 5.11(l),

         (m)      contractual or statutory obligations to make lump sum payments
                  (Abfindungen) of whatsoever kind,

         (n)      commitments to pay out loans or loans with a principal amount
                  of more than HK$30,000 (Hong Kong Dollar: thirty thousand)
                  which have been paid out by the Companies,

         (o)      distribution agreements (distributor or commercial agent
                  agreements) (Eigenhandler oder Handelsvertretervertrage) of
                  whatsoever kind (including similar commission arrangement)
                  except as listed in Attachment 5.11(o)(i) (appointing the
                  Companies as distributor or commercial agent) and Attachment
                  5.11(o)(ii) (appointing a third party as distributor or
                  commercial agent). All
<PAGE>   28
                  such agreements are in conformity with the respective
                  applicable law including EU-law, if EU-law is applicable on
                  such agreements, except as stated in the aforementioned
                  attachments,

         (p)      powers of attorney of whatsoever kind including bank,
                  cashier's or powers of attorney regarding bills of exchange,

         (q)      acts in breach of antitrust or unfair competition laws and
                  regulations,

         (r)      orders by the Companies, except in the ordinary course of
                  business, especially no orders for investments in an amount
                  exceeding HK$600,000 (Hong Kong Dollar: six hundred thousand)
                  in each single case,

         (s)      obligations outside the ordinary course of business,

         (t)      any judgement or order rendered by court or administrative
                  proceedings or any settlement entered into in such context
                  which would substantially impair or restrict the Companies in
                  conducting their businesses, in acquiring or selling of goods
                  or assets or in competing in the market,

         (u)      agreements with an annual volume of more than HK$750,000 (Hong
                  Kong Dollar: seven hundred and fifty thousand) which either do
                  not automatically come to an end 6 (six) months after the
                  entering into of the Agreement or which cannot be terminated
                  by the Companies so that they come to an end the latest within
                  6 (six) months after the entering into of the Agreement,

         (v)      agreements which in each single case lead to payments which
                  are received or which have to be made by the Companies of more
                  than HK$750,000 (Hong Kong Dollar: seven hundred and fifty
                  thousand) annually or which are otherwise of special
                  significance for the Companies other than sales in the
                  ordinary course. The Seller does not know of any impairment of
                  the performance of obligations arising out of such agreements,
                  especially the Companies are not in default of any of their
                  obligations arising out of such agreements,

         (w)      agreements which are to the best knowledge of the Seller not
                  valid,

         (x)      loan agreements and other banking and overdraft facilities
                  other than those set forth in Attachment 5.11(x).

5.12     Environmental

         No harmful substances (Schadstoffe) have been let (einlassen), have
         seeped (einsickern), have been stored (einlagern) or otherwise have
         been put (einbringen) into the ground (Erdreich), water (Grundwasser
         und Oberflachenwasser) and air (Luft) of any of the property, owned,
         leased or used by the Companies and no such substances have been on
         such property in violation of any applicable laws. All harmful
         substances have been dealt with (umgehen), stored (lagern) and disposed
         of (entsorgen) in
<PAGE>   29
         compliance with all Environmental Laws and Environmental Permits
         applicable from time to time when any such action has been taken.

         The Companies are in compliance with all Environmental Laws and
         Environmental Permits. All waste products generated by the Companies
         are disposed of in compliance with applicable Environmental Laws in
         effect now or at the time of such disposal, and, where applicable,
         pursuant to and in accordance with all Environmental Permits.

         There is no liability, whether asserted or unasserted, fixed or
         contingent, relating to the real estate property, owned, leased or used
         by the Companies which results from any environmental matters,
         including, the use, discharge, disposal, storage, accumulation,
         transport, leakage, spillage or other actions by the Companies with
         respect to any harmful or toxic substances, hazardous waste or other
         pollutants, contaminants or nuisances.

         No claim has been made with respect to the operation of facilities of
         the Companies resulting from any harmful substance, hazardous waste or
         from any asbestos or similar materials used in the construction thereof
         and there is no valid basis for any such claim.

         For purposes of this Article:

         (a)      the term "ENVIRONMENTAL LAW(S)" means any law, statute,
                  regulation, ordinance, rule, order, decree, judgement, consent
                  decree, settlement agreement or governmental requirement
                  enacted, promulgated, entered into, agreed or imposed by any
                  government of any country in which the properties owned,
                  leased or used by the Companies are located, or any state or
                  political subdivision thereof and any entity, body or
                  authority exercising executive, legislative, judicial,
                  regulatory or administrative functions of or pertaining to
                  government in such country, which relates to or otherwise
                  imposes liability or standard of conduct concerning
                  discharges, emissions, releases or threatened releases of
                  noises, odours or any pollutants, contaminants or hazardous or
                  toxic wastes, substances or materials, whether as matter of
                  energy, into ambient air, water, or land, or otherwise
                  relating to manufacture, processing, generation, distribution,
                  use, treatment, storage, disposal, cleanup, transport or
                  handling of pollutants, contaminants, or hazardous or toxic
                  wastes, substances or materials; and

         (b)      the term "ENVIRONMENTAL PERMIT(S)" means any permit, license,
                  approval, consent or other authorization required by pursuant
                  to any applicable Environmental Law.

5.13     Miscellaneous

5.13.1   Neither the Purchaser nor any affiliate of the Purchaser nor the
         Companies have or shall have any liability or otherwise suffer or incur
         any loss, cost or damage as a result of or in connection with any
         brokerage or finder's fee or other commission of any person retained by
         the Seller or the Companies in connection with any of the transactions
         contemplated by the Agreement.
<PAGE>   30
5.13.2   The managing director of the Hong Kong Company is listed in Attachment
         5.13.2(i) and the legal representative of the Panyu Company is listed
         in Attachment 5.13.2(ii). There are no other managing director, legal
         representative or other persons who have authority under a power of
         attorney or other document to represent the Companies.

5.13.3   Except as previously disclosed to the Purchaser and its accountant to
         the best knowledge of the Seller after due inquiry, neither the
         Companies nor the Subsidiary and Affiliates nor any of its respective
         board members, managing directors, directors, officers, employees,
         agents or representatives, nor any other person or entity acting on
         behalf of any of them, has made, paid or received bribes, kickbacks or
         other similar payments to or from any person, whether lawful or
         unlawful.

5.13.4   Attachment 5.13.4 (i) contains a true, accurate and complete list of
         all open accounts receivable of the Companies which came into existence
         up to 31 March 2000 including its respective due dates and Attachment
         5.13.4 (ii) contains a true, accurate and complete list of all open
         liabilities of the Companies which came into existence up to 31 March
         2000 including its respective due dates with the exception of such
         accounts receivable and liabilities of the Companies which are
         contained in the Financial Statements.

5.13.5   Attachment 5.13.5 contains a true, accurate and complete list of all
         contracts, agreements or arrangements, other than contracts set forth
         under section 13.4, by which the Companies are bound, or in respect of
         which any of their assets or properties are subject, providing for an
         aggregate annual payment obligation of more than HK$1,500,000 (Hong
         Kong Dollar: one million and five hundred thousand) or with a
         termination period of more than 6 (six) months (all contracts,
         agreements or arrangements listed in Attachment 5.13.5, the "MATERIAL
         CONTRACTS"). All Material Contracts (true, accurate and complete copies
         of which have been delivered to the Purchaser) are in full force and
         have not been terminated by any party thereto. The Companies are not in
         default in the fulfillment of any of the obligations under or resulting
         from such Material Contracts. No other party to such Material Contract
         is in default of its obligations thereunder. The execution, delivery
         and performance of the Agreement will not result in the breach,
         cancellation and/or termination of any of the terms or conditions of or
         constitute a default under any of the Material Contracts or affected or
         give rise to a right of any other party to terminate or cancel any of
         the Material Contracts.

5.13.6   The list of all bank accounts of the Companies set forth in Attachment
         5.13.6 is complete and correct including the list of all persons which
         are authorised to sign or to dispose of such accounts.

5.13.7   The Seller has not issued any guarantee (Garantien, Burgschaften,
         Kreditauftrage) for the benefit of the Companies nor has a Company
         issued any such guarantee for any of the other Companies.

5.13.8   The Companies do not have any credit-lines.
<PAGE>   31
5.13.9   The information provided by the Seller and the Companies in the course
         of the due diligence process to the Purchaser and on the Purchaser's
         behalf to its advisors, is true, accurate and complete in all respects.
         No information has been withheld which is of importance for the
         evaluation of the Companies and their business.

5.14     Further Representations and Warranties

5.14.1   Without limiting the generality of the foregoing, the Seller makes
         further representations and warranties as set out at Schedule 2 hereto.

5.14.2   The Seller further represents and warrants that:

         (a)      he does not own or hold any other equity, interest, shares,
                  participations or sub-participations of any kind in any other
                  person or entity (other than the Companies and the Shenzhen
                  Company and the entities listed in Attachment 5.14.2(a));

         (b)      prior to the Completion Date, he does not have any contract of
                  employment with any of the Companies;

         (c)      he will obtain written consent in respect of the change of
                  ownership of the Hong Kong Company from Tinnon (Hong Kong)
                  Limited, the landlord of the premises leased by the Hong Kong
                  Company, on or before 31 May 2000.

         (d)      the Companies are not subject to any warranty claims and/or
                  product liability claims based on products or services sold,
                  delivered or manufactured by the Companies prior to the
                  Completion Date and for which no sufficient provision in the
                  Financial Statements have been made.

6.       LEGAL CONSEQUENCES IN CASE OF VIOLATION OF REPRESENTATIONS, WARRANTIES
         AND GUARANTEES

6.1      In case a representation or warranty or guarantee given by the Seller
         in Article 5 and Schedule 2 should be incorrect, the Purchaser shall
         give the Seller notice by registered letter and shall request the
         Seller to bring about the contractual condition which would have
         existed if such representation or warranty or guarantee would have been
         fulfilled within a period, selected at the discretion of the Purchaser,
         but being at least 60 (sixty) calendar days. In the event that

         (i)      the Seller is not able to bring about such contractual
                  condition, or

         (ii)     the Seller refuses to bring about such contractual condition,
                  or

         (iii)    the Seller fails to bring about such contractual condition
                  within the period of time identified in the Purchaser's
                  notice, and

         (iv)     the Purchaser or the Companies suffer any financial damage or
                  loss as a consequence of such breach of representation or
                  warranty or guarantee (whether or not the Seller has brought
                  about the contractual condition),
<PAGE>   32
         then at the discretion of the Purchaser, either (A) the Purchaser shall
         reduce the Purchase Price (Minderung) in the respective amount of the
         loss or damage arising from such breach of a representation or warranty
         or guarantee or (B) the Seller shall put at the discretion of the
         Purchaser or the Companies in the position the Purchaser or the
         Companies would have been in if the representation or warranty or
         guarantee were correct.

6.2      The Purchaser is only entitled to assert claims based on breach of
         representations, warranties or guarantees if the aggregate amount of
         such claims exceeds the amount of HK$3,000,000 (Hong Kong Dollar: three
         million) provided that to the extent that the Binding Net Asset Value
         exceeds HK$46,500,000, the Seller shall be entitled to offset such
         excess amount against the claims of the Purchaser.

6.3      The aggregate amount of all claims of the Purchaser against the Seller
         arising out of Article 6 and Schedule 2 shall not exceed 30% (thirty
         percent) of the Purchase Price as reduced (if any) in accordance with
         Article 4.

6.4      To the extent that representations or warranties or guarantees are
         based upon knowledge (Kenntnis) or constructive knowledge
         (Kennenmussen) of the Seller, knowledge or constructive knowledge of
         the Seller or of the persons listed in Attachment 6.4 is or is deemed
         to be knowledge or constructive knowledge of the Seller.

6.5      Rights of the Purchaser pursuant to Article 6 in connection with
         Article 5 are excluded to the extent that losses or damages resulting
         from a breach of representations, warranties and guarantees have lead
         to a reduction of the Purchase Price according to section 4.1.

7.       NO COMPETE RESTRAINT

7.1      The Seller shall not without prior written consent of the Purchaser,

7.1.1    for a period of 3 (three) years, beginning with the date of the
         Agreement, commence or pursue any activity in the business area of
         designing, developing, manufacturing, using, marketing, distributing
         and selling woven labels, printed labels, merchandise tags and other
         apparel identification products in which the Companies are active in at
         the date of the Agreement in the territory of Hong Kong and People's
         Republic of China no matter for his own account or in connection with
         or to the benefit of any third party; the Seller shall neither support
         such activities directly or indirectly, nor shall he receive any
         economic benefit from such activities, nor shall they participate in an
         enterprise in any way whatsoever which is active in such areas, nor
         shall they disturb, or attempt to disturb, any business relationship
         between any third party and the Companies or make any statement to any
         third party, including the press or media, likely to result in adverse
         or negative publicity for the Companies,

7.1.2    for a period of 3 (three) years, beginning with the date of the
         Agreement, solicit, divert or attempt to solicit or divert any third
         party who is, was, or was solicited to become, a customer or supplier
         of the Companies at any time prior to the date of the Agreement,
<PAGE>   33
7.1.3    for a period of 3 (three) years, beginning with the date of the
         Agreement, cause any employee, distributor or advisor or independent
         consultant (with the exception of attorneys, chartered accountants and
         tax advisers) who is presently active for the Companies or has been
         active for the Companies since January, 1990 or will be active for the
         Companies in the future, or any client, customer or supplier of the
         Companies, to become active for the Seller or for a company in which
         the Seller participates or for a competing company in any way
         whatsoever, be it for the Seller or to the benefit of any person, firm
         or company,

7.1.4    at any time after the date of the Agreement provide or disclose to
         third parties, neither directly nor indirectly, business secrets of the
         Companies, and shall neither cause third parties to provide or to
         disclose such business secrets, nor to promote or cover such provision
         or disclosure, nor to use such business secrets for his personal
         purposes.

7.2      For the purposes of section 7.1.1 there shall be disregarded the
         financial interest of any person or company in a class of securities
         which are listed on any recognised stock exchange if that interest is
         less that 5 (five) per cent of that class.

7.3      For each individual breach of the provisions contained in section 7.1
         the Seller shall pay to the Purchaser an adequate contractual penalty
         in an amount to be assessed by the Purchaser according to Section 315
         German Civil Code (Burgerliches Gesetzbuch, BGB). If a dispute arises
         as to the adequacy of the amount of such contractual penalty, such
         amount shall be assessed by the competent court upon request of the
         Seller according to Section 315 para. 3 BGB. This provision, however,
         does not affect the other remedies of the Purchaser to recover an
         exceeding damage as well as the enforcement of other claims. Each day
         during which a violation of section 7.1 continues is considered to be
         an independent event triggering the contractual penalty.

7.4      The parties of the Agreement assume that the provisions contained in
         section 7.1 and section 7.3 are reasonable. If at any time any of the
         provisions of section 7.1 and/or section 7.3 shall be determined to be
         invalid or unenforceable by reason of being vague or unreasonable as to
         duration, territory, scope of activity or otherwise, then this Article
         shall be considered divisible (with the other provisions to remain in
         full force and effect) and the invalid or unenforceable provisions
         shall become and be deemed to be immediately amended to include only
         such duration, territory, scope of activity and other restrictions, as
         shall be determined to be reasonable and enforceable by the court or
         other body having jurisdiction over the matter, and parties expressly
         agreeing that the Agreement, as so amended, shall be valid and binding
         as though any invalid or unenforceable provision had not been included
         herein.

8.       STATUTE OF LIMITATIONS

8.1      Any claims of the Purchaser pursuant to section 6.1 in connection with
         Article 5 shall be time-barred after 2 (two) years following the date
         of the Agreement, provided that

         (i)      any claims of the Purchaser pursuant to section 6.1 in
                  connection with section 5.1 and section 5.2 shall be
                  time-barred after 10 (ten) years following the date of the
                  Agreement and
<PAGE>   34
         (ii)     any claims of the Purchaser pursuant to section 6.1 in
                  connection with section 5.6 shall be time-barred after 5
                  (five) years following the date at which the tax assessments
                  made in respect of the relevant periods of all the Taxes
                  payable by the Companies for the period up to the Transfer
                  Date have become final and binding (bestandskraftig).

8.2      The claims of the Seller are time-barred after 5 (five) years following
         the date of the Agreement.

9.       INSPECTION BY THE PURCHASER

9.1      Any knowledge obtained by the Purchaser or its advisers in the course
         of the due diligence exercise or otherwise leave statements,
         representations, warranties, guarantees and indemnities of the Seller
         made in the Agreement untouched and leave also untouched the right of
         the Purchaser to make claims based on such statements, representations,
         warranties, guarantees and indemnities of the Seller made in the
         Agreement.

10.      TAXES

10.1     To the extent that the Companies are subject to payments of any Taxes
         (as defined in section 5.6) relating to periods or events prior to the
         Effective Date, the Seller hereby indemnifies and holds harmless the
         Purchaser and the Companies from and against any and all such Taxes and
         any other losses, cost and expenses (including attorney's fees and
         disbursements) arising out of or in connection with the obligation to
         pay the Taxes, but only to the extent that such payment to be made by
         the Companies exceed the specific provisions relating thereto in the
         Financial Statements.

10.2     After the Transfer Date the Purchaser will request the Companies, as
         far as legally permissible, to give to the Seller reasonable access to
         the books and records of the Companies, as necessary and appropriate,
         to allow the Seller to safeguard its concerns and interests in tax
         assessments relating to the period or events prior to the Effective
         Date and the Purchaser is obliged at the cost of the Seller to appeal
         against any tax assessments and to challenge a notice of assessment
         upon the Seller's request concerning tax purposes involving all periods
         prior to the Effective Date, but only to the extent that the affairs of
         the Companies and the Purchaser are not thereby prejudiced.

10.3     Furthermore, the Purchaser shall ensure, to the extent legally
         permissible, that the Seller is given reasonable opportunity to consult
         with the Companies regarding any tax assessments of the Companies
         relating to periods or events prior to the Effective Date, but only to
         the extent the affairs of the Companies and the Purchaser are not
         thereby prejudiced. The Seller is obliged to cooperate with the
         Companies concerning any tax assessments of the Companies involving all
         periods prior to the Effective Date.

10.4     An increase in the valuation of an asset and a decrease in the
         valuation of a liability as consequence of a tax assessment of the
         Companies do not lead to claims of the Seller against the Purchaser or
         the Companies and do not reduce claims of the Purchaser and the
         Companies against the Seller.
<PAGE>   35
11.      CONDITIONS PRECEDENT

11.1     Upon signing of the Agreement, Articles 16 and 17 shall become valid
         and binding for the parties. The remainder of the Agreement, including
         the sale and transfer of the Hong Kong Shares shall become valid and
         binding upon the satisfaction of each of the following conditions
         precedent (aufschiebende Bedingung):

         (a)      (Intentionally omitted)

         (b)      (Intentionally omitted)

         (c)      (Intentionally omitted)

         (d)      (Intentionally omitted)

         (e)      (Intentionally omitted)

         (f)      (Intentionally omitted)

         (g)      execution of the Employment Contract by the Seller and the
                  Hong Kong Company

         (h)      (Intentionally omitted)

         (i)      (Intentionally omitted)

11.2     Upon satisfaction of each of the conditions precedent set forth in 11.1
         above, the Seller shall immediately notify the Purchaser in writing
         thereof and submit to the Purchaser copies of the underlying documents,
         if any.

11.3     If the conditions set forth in section 11.1 above have not been
         satisfied by the Seller or waived by the Purchaser by 30 June 2000, the
         Purchaser may until the day preceding the day of the satisfaction of
         all such conditions rescind (zurucktreten) the Agreement by written
         statement to the Seller in which case all commitments of the Seller and
         the Purchaser hereunder shall terminate without any continuing
         liability except that each party shall deliver to the other party all
         documents, working papers and other materials furnished to it by the
         respective other party in connection with the transaction contemplated
         by the Agreement hereunder irrespective of whether such materials have
         been furnished before or after the signing of the Agreement. Each party
         will keep strictly confidential all information which has been so
         revealed by the other party.

11.4     Completion shall take place at the offices of Clifford Chance on the
         same date on which the last of the conditions precedent set out in
         section 11.1 above has been satisfied or waived (the "COMPLETION
         DATE").

11.5     At Completion, the Seller shall deliver or procure to be delivered to
         the Purchaser those items set out in Schedule 1.
<PAGE>   36
11.6     The Seller shall procure that the directors of the Hong Kong Company
         shall convene and at Completion hold a meeting of the board of the Hong
         Kong Company at which the directors shall:

         (a)      vote in favour of the registration of the Purchaser and its
                  nominee(s) as members or the Hong Kong Company in respect of
                  the Hong Kong Shares (subject to the production of duly
                  stamped transfers);

         (b)      revoke all existing mandates for the operation of bank
                  accounts and issue new mandates giving authority to persons
                  nominated by the Purchaser and authorise the secretary to
                  notify the specimen signatures of the new officers of the Hong
                  Kong Company for the operation of its bank accounts;

         (c)      appoint such persons as the Purchaser may nominate as
                  directors of the Hong Kong Company with immediate effect;

         (d)      accept the resignation of Ms. Irene Chan as director of the
                  Hong Kong Company so as to take effect from the end of the
                  meeting; and

         (e)      (Intentionally omitted)

         (f)      change the accounting reference date of the Hong Kong
                  Companies to such date as is nominated by the Purchaser.

11.7     The Seller shall procure that the directors of the Panyu Company shall
         convene and at Completion hold a meeting of the board of the Panyu
         Company at which the directors shall:

         (a)      appoint such persons as the Purchaser may nominate as
                  directors, the general manager, the deputy general manager,
                  other managers or officers and auditors of the Panyu Company
                  with immediate effect;

         (b)      accept the resignation of Ms. Irene Chan and Mr. So Wah as
                  directors of the Panyu Company so as to take effect from the
                  end of the meeting.

11.8     (Intentionally omitted)

12.      (INTENTIONALLY OMITTED)

13.      RIGHTS AND OBLIGATIONS OF THE PARTIES

13.1     The Seller grants to the Purchaser, its respective affiliates
         (Beteiligungsgesellschaften) and the Companies and their respective
         affiliates as well as to their respective successors a worldwide
         perpetual royaltyfree and exclusive right to use for itself or for an
         affiliate (Beteiligungsgesellschaft), a branch office or a department
         with right to sublicense, the name "Bonny Nice" (including the right to
         use such name as a "geschaftliche Bezeichnung" and to register new
         trademarks (Marken) including the name "Bonny Nice") and/or each
         distinctive part thereof in the business of designing, developing,
         manufacturing, using, marketing, distributing and selling woven labels,
<PAGE>   37
         printed labels, merchandise tags and other apparel identification
         products and related services. The Seller declares that he does not
         know of any other enterprise which uses the name to identify an
         enterprise.

         The Seller will support the Purchaser, its respective affiliates and
         the Companies as well as their respective successors in each and any
         permissible way and will give all necessary declarations and will issue
         all documents to put the Purchaser its respective affiliates and the
         Companies as well as their respective successors in the position to use
         such name and/or distinctive parts thereof with and without additions.

13.2     The Seller shall cause that all intellectual property rights which are
         identified in Attachment 13.2 as being owned by the Seller or another
         party are transferred from the Seller or the respective other party
         holding such intellectual property rights to the Companies, at Seller's
         expense, as soon as possible after the date hereof and that all
         applications or filings necessary for such transfer shall have been
         effected prior to the date of the Agreement. Moreover, the Seller
         hereby grants the Companies a worldwide, exclusive royalty-free licence
         to use, with right to sublicense, such intellectual property rights
         during the period between the Transfer Date and the effectiveness of
         their transfer to the Companies. With regard to such intellectual
         property rights, the Seller hereby gives as of the date of
         effectiveness of the transfer of the intellectual property rights the
         representations and warranties set forth in section 5.7 above mutatis
         mutandis, it being understood that the limitation period pursuant to
         section 8.1 will be 2 (two) years following the effectiveness of the
         transfers. The Seller shall not, contest or support third parties in
         contesting the Company's rights to use the intellectual property rights
         or the know-how referred to in section 13.2.

         In so far as the Seller owns at the date of the Agreement, intellectual
         property rights including respective applications which are adverse to
         the business activity of the Companies and which for any reason have
         not been transferred to the Companies pursuant to this section, the
         Seller herewith grants to the Companies a worldwide, perpetual royalty
         free and exclusive licence regarding such intellectual property rights.

13.3     The Seller agrees that all know-how previously provided by the Seller
         to the Companies, may continue to be used by the Companies after the
         Transfer Date without restriction, including without any further
         requirement for licensing or payments with respect thereto. The Seller
         has delivered or will deliver to the Companies all know-how related
         documents including but not limited to drawings, plans, computer
         programs etc. relating to the object of the Companies.

13.4     Except as provided explicitly otherwise in Attachment 13.4, the Seller
         neither has any legal relationships with the Companies, nor has the
         Seller any rights and claims against the Companies or to any tangible
         or intangible asset of the Companies (including rights arising out of
         licences), which are necessary for the conduct of the business of the
         Companies in its present area and scope of activity, or which are used
         by the Companies, nor has the Seller any other rights and claims
         against the Companies.

         To the extent that any such legal relationships which are not
         explicitly mentioned in Attachment 13.4 should exist nevertheless, all
         such legal relationships between the
<PAGE>   38
         Seller and the Companies end on the Transfer Date without coming into
         existence of any liability or obligation whatsoever for the Purchaser
         or the Companies. To the extent that such rights and claims, which are
         not explicitly mentioned in Attachment 13.4, should exist nevertheless,
         the Seller is at the discretion of the Purchaser either obliged to
         waive such rights and claims or obliged to transfer such rights and
         claims to the Companies without further consideration, or such rights
         and claims end on the Transfer Date without coming into existence of
         any liability or obligation whatsoever for the Purchaser or the
         Companies. The Seller herewith guarantees that the same applies to all
         legal relationships between the members of their families, the persons
         or companies related to the Seller and former partner or
         interest-holders of the Companies and persons related to such former
         partner or interest-holders of the Companies on the one hand and the
         Companies on the other.

13.5     (Internally omitted)

13.6     (Internally omitted)

13.7     (Internally omitted)

13.8     Mr. Gerhard Bornemann has granted sureties to Commerzbank as security
         for loans granted by Commerzbank to the Hong Kong Company attached as
         Attachment 13.8 (the "SURETIES"). The Seller undertakes to procure Mr.
         Gerhard Bornemann to maintain and not to withdraw the Sureties prior to
         such Sureties are replaced by a surety from Paxar Corporation with the
         consent of Commerzbank. The Purchaser and Paxar Corporation hereby
         jointly and severally indemnify Mr. Gerhard Bornemann from and against
         all liability arising out of the Sureties from the Completion Date.
         This indemnity is irrevocable. The Purchaser and Paxar Corporation
         shall use their best efforts to externally release Mr. Gerhard
         Bornemann from all liability arising out of the Sureties from the
         Completion Date. Any setting off (Aufrechnung) and right of retention
         (Zuruckbehaltung) with regard to the indemnity contained in this
         section is excluded unless claims have been acknowledged (anerkannt) in
         writing or have been confirmed by final decision of a competent court
         or court of arbitration.

13.9     (Intentionally Omitted)

13.10    The Seller guarantees payment by Europrint S.A., Bat. 2 BP 49 Torcy,
         77201 Marne La Vallee Cedex 1, France of all obligations Europrint owes
         to the Companies including interest thereon existing at the date of the
         Agreement the latest by 31 December 2000 to the respective Company. The
         Purchaser is obliged to assign the respective claims of the Companies
         to the Seller to the extent the Seller makes payment to the Companies
         due to the guarantee contained in this section.

13.11    Notwithstanding the exception made in the 5th and 6th sentences of
         Section 5.3.2, the Seller is obliged to indemnify the Purchaser and the
         Panyu Company against claims raised by third parties against the Panyu
         Company if such claims relate to the past business practices of the
         Panyu Company to the extent no provision has been made or to the extent
         such claims have not been recorded as liabilities.
<PAGE>   39
14.      POST COMPLETION UNDERTAKINGS

14.1     The Seller undertakes that he will, at his sole cost and expense:

         (a)      cause F.A.S.T. (Shenzhen) Industries Limited ("          (   )
                          ")         , a wholly foreign owned enterprise duly
                  organised and validly existing under the laws of the People's
                  Republic of China whose legal address is at 5-6/F, Block 2,
                  Xin Xiu Industrial Zone, Yan He Bei Road, Luo Hu District,
                  Shenzhen Municipality, People's Republic of China (the
                  "SHENZHEN COMPANY") to be liquidated or otherwise terminated
                  in accordance with the PRC law (as evidenced by the
                  cancellation of the business licence of the Shenzhen Company
                  by the Shenzhen Administration of Industry and Commerce) and
                  settle all amounts due from the Shenzhen Company to the Hong
                  Kong Company on or before 31 December 2000 or such later date
                  as is necessary due to compliance with applicable procedures
                  and requirements of the relevant approval authority in
                  Shenzhen. Within eight weeks from the Completion Date, the
                  Seller shall (i) procure a board meeting of the Shenzhen
                  Company to be held and pass a board resolution for the
                  liquidation or termination of the Shenzhen Company, (ii)
                  submit a formal application to the relevant approval authority
                  in Shenzhen for the liquidation or termination of the Shenzhen
                  Company; (iii) give notice to terminate the lease contract
                  relating to the premises occupied by the Shenzhen Company;

         (b)      dispose of all of the Seller's direct or indirect interests or
                  shareholdings in the companies listed in Schedule 3 of the
                  Agreement on or before 31 August 2000;

         (c)      use his best endeavours to cause Bornemann & Bick Labelling
                  and Accessories Pte Ltd (the "Singapore Company") to change
                  its company name by removing the reference to the name
                  "Bornemann & Bick" on or before 30 September 2000. By not
                  later than 30 September 2000, for the purpose of this section
                  14.1(c), the Seller shall recommend to the shareholders of the
                  Singapore Company and advise them that he will vote in favour
                  of and requests that they vote in favour of a resolution to
                  change the company name as aforesaid and take all other action
                  necessary under Singapore law to effect such change of name;

         (d)      settle all amounts due to the Hong Kong Company from Winward
                  International Limited and Intertag Labels Limited to the
                  satisfaction of the Purchaser on or before 31 August 2000;

         (e)      from the Completion Date, not participate in the management or
                  decision making process of the Shenzhen Company and the
                  Companies listed in Schedule 3 of the Agreement other than to
                  comply with the Seller's obligations set forth in Sections
                  14.1(a) to 14.1(d) above;

         (f)      indemnify the Purchaser and the Companies against all claims,
                  costs, expenses, losses and liabilities arising out of or in
                  connection with the liquidation or termination of the Shenzhen
                  Company and/or the disposal of the Seller's interests in the
                  companies listed in Schedule 3 of the Agreement; and
<PAGE>   40
         (g)      for a period of three years from the Completion Date, not
                  participate in the management or day-to-day decision making
                  process of Speedmax International Limited.

15.      SELLER'S PROFIT PARTICIPATION

15.1     During the calendar years 2000, 2001 and 2002 the Seller shall receive
         a participation in the profits of the Companies in the amount of the
         product of the Differential Amount (as defined below) and the factor 3
         (three) (the "PROFIT PARTICIPATION"). The parties agree that the fiscal
         year of the Companies will be changed to the calendar year after the
         date of the Agreement.

         The "Differential Amount" is the positive difference between the
         Average Consolidated Profit of the Companies (as defined below) and the
         consolidated profit of the Companies as of 31 March 2000 in the amount
         of HK$23,000,000 (Hong Kong Dollar:
         twenty three million).

         The average consolidated annual profit of the Companies before taxes on
         operating and non-operating income for the calendar years 2000, 2001
         and 2002 is 1/3 of the sum of the consolidated profits of the Companies
         before taxes on operating and non-operating income for the calendar
         years 2000, 2001 and 2002 (the "AVERAGE CONSOLIDATED PROFIT OF THE
         COMPANIES"). For the purpose of this Article 15, the consolidated
         profits of the Companies before taxes on operating and non-operating
         income for the calendar year 2000 shall be determined on the basis of
         the consolidated profits of the Companies before taxes on operating and
         non-operating income for the period from 1 April 2000 to 31 December
         2000 divided by the factor 0.9.

15.2     The parties agree that for the calendar years 2000, 2001 and 2002 the
         consolidated profit of the Companies before taxes on operating and
         non-operating income

15.2.1   is ascertained as follows:

         (a)      On the basis of the statutory financial statements of the
                  Companies which shall be prepared on the basis of the same
                  principles and practices used to prepare the Financial
                  Statements referred to in section 5.3,

         (b)      for the respective Company according to the generally accepted
                  accounting principles applicable at the seat of the respective
                  Company,

         (c)      within the scope of the consolidation of the Companies, is
                  only computed on the basis that the Hong Kong Company directly
                  holds 100% equity interest in the Panyu Company,

         (d)      shall be expressed in Hong Kong $ converted from other
                  currencies using the generally accepted accounting principles
                  applicable at the jurisdiction of incorporation of the
                  respective Company.

15.2.2   is ascertained regarding intercompany transactions between the
         Companies on the one side and Paxar Corporation and companies in which
         Paxar Corporation directly or
<PAGE>   41
         indirectly owns interests on the other side (the "INTERCOMPANY
         TRANSACTIONS") as follows:

         (a)      Intercompany Transactions regarding manufactured products
                  between the Hong Kong Company and the Panyu Company on the one
                  side and companies in which Paxar Corporation directly or
                  indirectly owns at least 75% will be at intercompany transfer
                  prices (the "IC-PRICES"), which are set at a mark up of 28%
                  above direct cost only consisting out of direct materials,
                  direct labor, direct factory overhead and shipping costs.
                  IC-Prices so determined will apply unless market conditions
                  require a lower price, which will then be determined in a fair
                  and reasonable negotiation between the buyer and the seller of
                  the manufactured products.

         (b)      If either the seller or the purchaser of manufactured products
                  are less than 75% owned by either Paxar Corporation and
                  companies in which Paxar Corporation directly or indirectly
                  owns interests or the Seller, the IC Price will be set by the
                  seller of the manufactured products so as to be no higher than
                  the lowest price charged to any of its third-party customers.

         (c)      Purchases or sales of raw materials or other products to which
                  the selling company does not add significant value will be
                  sold at cost plus a handling charge not to exceed 5% of cost.

         (d)      For the elimination of doubt, the Seller and Paxar Corporation
                  agree that each will endeavour to sell the products
                  manufactured by the other and will do so with the
                  understanding that no sales commissions shall be paid.

15.2.3   is ascertained according to cash required or excess cash as follows:

         (a)      Profit before taxes on operating and non-operating income will
                  be calculated so as to include an appropriate interest cost
                  based upon the cash required by any of the Companies provided
                  by Paxar Corporation beyond amounts generated from the
                  operations of the businesses. The source and the terms and
                  conditions of funding of such cash requirements will be
                  determined by Paxar Corporation.

         (b)      Profit before taxes on operating and non-operating income will
                  reflect an appropriate interest income credit to the extent
                  that the Companies generate more cash than is needed to
                  support current requirements. The disposition of such excess
                  (e.g., debt repayment or short-term investments) will be
                  determined by Paxar Corporation.

15.2.4   is ascertained, since it is likely that there will be some integration
         of the Seller's businesses with Paxar Corporation's businesses
         according to the following rules:

         (a)      Where businesses are combined for administrative purposes
                  (e.g., accounting reasons or customer service) in order to
                  reduce overall costs, the administrative costs of the combined
                  businesses will be allocated between the Seller's and Paxar
                  Corporation's businesses using sales to determine the
                  apportionment factors. Paxar Corporation agrees that such
                  combinations will not occur unless
<PAGE>   42
                  the Seller agrees that there is an advantage to making the
                  combination (lower costs or improved capabilities) or unless
                  Paxar Corporation agrees to override the apportionment of
                  costs set forth in the preceding sentence by charging the
                  Seller's businesses no more than an amount equal to the cost
                  incurred prior to the combination.

         (b)      If existing manufacturing operations are combined into one
                  plant or adjacent plants that are managed by the same plant
                  management, the indirect costs (i.e. overhead costs) of he
                  combined operation will be allocated to the previously
                  separate businesses using sales to determine the apportionment
                  factors. In this instance, only the results of the Seller's
                  previously existing business will be included. The foregoing
                  would apply, for example, if the Seller's and Paxar
                  Corporation's existing manufacturing operations in Panyu were
                  to be combined.

15.2.5   is ascertained for the elimination of doubt, in such a way as that
         profit before taxes on operating and non-operating income will include
         the results of any expansion of activities of the Companies beyond
         those taking place on the date of the Agreement. For example, existing
         woven label operations of the Seller and Paxar Corporation in Panyu may
         be combined. As another example, narrow woven edge tape production may
         be introduced to the Panyu Company.

15.3     The Profit Participation shall be due for payment by the Purchaser to
         the Seller on 15 April 2003.

15.4     The Profit Participation of the Seller amounts to a maximum of HK$
         58,500,000.00 (Hong Kong Dollar: fifty eight million five hundred
         thousand), provided, however, that such maximum amount of HK$
         58,500,000.00 shall be increased if any by the difference between the
         maximum amount of the profit participation as defined in section 15.4
         of the Commercial Limited Partnership- Interest Purchase- and
         Assignment Agreement between Paxar GmbH & Co. KG as the purchaser, Mr.
         Gerhard Bornemann and Dr. Ulrich Bornemann as sellers and Paxar
         Corporation as the Guarantor dated with the date of the Agreement (the
         "German Agreement") being DM20,000,000.00 (German Mark: twenty million)
         and the actual amount paid to Mr. Gerhard Bornemann under section 15.1
         of the German Agreement. For the purpose of this section DM shall be
         converted into HK$ using the rates printed in the New York edition of
         the Wall Street Journal for the last business day in New York City of
         the year 2002. Independent from the provisions contained in Article 15,
         the Profit Participation of the Seller amounts to a minimum of
         HK$9,750,000.00 (Hong Kong Dollar: nine million seven hundred fifty
         thousand).

15.5     The amount of the Profit Participation shall be determined by Arthur
         Andersen and shall be notified by Arthur Andersen in writing to the
         Seller and the Purchaser simultaneously the latest on 1 April 2003 (the
         "RECEIPT DATE").

15.6     In case the Purchaser and the Seller do not agree with the
         determination made by Arthur Andersen according to section 15.5, the
         Purchaser or the Seller as the case may be shall notify the respective
         other party on such disagreement at the latest 10 (ten) days after the
         Receipt Date. If a notification according to this section is not made,
         the amount of
<PAGE>   43
         the Profit Participation as determined by Arthur Andersen shall be
         binding on the parties.

15.7     If the parties fail to reach an agreement on the Profit Participation
         after a notification has been made according to section 15.6 within a
         period of 45 (forty five) days after the Receipt Date, the dispute
         shall be referred to an independent firm of auditors with significant
         international experience appointed as an expert (Schiedsgutachter) in
         the sense of Section 317 BGB (the "PROFIT PARTICIPATION EXPERT") and
         not as an arbitrator jointly by the Seller and the Purchaser, who will
         resolve the dispute. The decision of the Profit Participation Expert
         shall be final and binding on the parties. The Profit Participation as
         decided by the Profit Participation Expert shall be final and binding
         on the parties. If the parties fail to agree on the firm of auditors to
         appoint as the Profit Participation Expert within a period of 60
         (sixty) days after the Receipt Date, the Profit Participation Expert
         (which shall be an independent firm of auditors with significant
         international experience) shall be appointed by the President of the
         Institut der Wirtschaftsprufer e. V., Dusseldorf upon the request of
         either party of the Agreement.

15.8     The cost of the determination made by Arthur Andersen shall be borne by
         the Purchaser. Each party shall bear one half of the costs of the
         Profit Participation Expert appointed pursuant to section 15.7.

15.9     In case the Seller voluntarily resigns as managing director of the Hong
         Kong Company prior to 31 December, 2002 the Seller is only entitled to
         a payment according to Article 15 equivalent to the Profit
         Participation multiplied by a fraction the numerator of which is
         equivalent to the number of months the Seller was the managing director
         of the Hong Kong Company after January 1, 2000 and the denominator of
         which is 36 (thirty six), provided, however, that the Seller is
         entitled to a payment of not less than HK$9,750,000 (Hong Kong Dollar:
         nine million seven hundred and fifty thousand).

16.      INTERIM PERIOD

16.1     The Seller undertakes to procure that during the period between the
         date of the Agreement and the Transfer Date the Companies have been and
         will be managed in the ordinary course of business in compliance with
         the provisions of any applicable laws or regulations and in compliance
         with the obligations assumed by them, and that the Companies have not
         and will not enter into agreements or arrangements which, by their
         nature, scope or duration are outside the ordinary course of business
         or which may conflict with the representations and warranties set out
         in Article 5.

16.2     In particular, but without limitation thereto, the Companies have not
         and will not within the limits mentioned above

16.2.1   give guarantees or surety in respect of obligations of the Seller, or,
         in respect of obligations of third parties, other than in the ordinary
         course of business;

16.2.2   neither acquire nor dispose of (including by way of leasing agreements)
         any businesses, interests or fixed assets, nor undertake to make such
         acquisition or disposal;
<PAGE>   44
16.2.3   make any legally relevant declaration in respect of any other item
         addressed in sections 5.5 (a) through to 5.5 (p).

16.3     The Seller will cause that

16.3.1   the Purchaser's and Paxar Corporation's employees have reasonable
         access to the Companies' premises and documents at all times during
         normal business hours;

16.3.2   the Purchaser is regularly and continuously informed about the
         Companies' business, financial and economic situation.

17.      ARBITRATION

17.1     Any dispute arising out of or in connection with the Agreement and its
         Attachments, including any questions regarding its existence, validity
         or termination, shall be referred to and finally resolved by
         arbitration under the Rules of the London Court of International
         Arbitration (the "RULES"), which Rules are deemed to be incorporated by
         reference into this clause.

17.2     The jurisdiction of the ordinary courts shall be excluded.

17.3     The tribunal shall consist of three arbitrators, two of them shall be
         nominated by the respective parties and the third arbitrator shall be
         appointed in accordance with the Rules.

17.4     The rules governing the arbitration proceeding before the arbitrators
         shall be the Rules and, where the Rules are silent the parties hereof
         agree that the procedural law of the Federal Republic of Germany shall
         be applicable.

17.5     The language of the arbitration shall be the English language.

17.6     The place of the arbitration shall be Wuppertal, Federal Republic of
         Germany.

17.7     (Intentionally omitted)

17.8     The parties hereof agree that the winning party of an arbitration
         proceeding has a claim for reimbursement against the losing party for
         all reasonable costs which the winning party had to spend for and
         during the course of the arbitration proceeding.

17.9     The decision of the arbitrators which has to contain a reasoning (the
         "DECISION") shall be binding upon the parties hereof and enforceable by
         any court having jurisdiction for the enforcement of the Decision.

18.      MISCELLANEOUS

18.1     (Intentionally omitted)

18.2     Any transfer taxes in connection with the sale and purchase of the Hong
         Kong Shares according to Article 1 are borne by the Purchaser provided
         that the stamp duty payable on the transfer of the Hong Kong Shares
         shall be borne equally by the Seller and the
<PAGE>   45
         Purchaser. Each party, however, bears the cost of its advisors and
         chartered accountants itself unless it is provided expressly otherwise
         in the Agreement.

18.3     Changes, amendments and supplements to the Agreement shall be in
         writing, signed by each of the parties hereto to be valid and require
         the explicit reference to the Agreement but need to be notarised if
         this is required by mandatory law. This is also applicable for a change
         or addition of this section.

18.4     Any demand, notice, declaration or other communication to be given in
         connection with the Agreement shall be given in English and in writing
         addressed to the recipient as follows:

18.4.1   to the Seller:             Ulrich Bornemann
                                    1st Floor, Gordon Terrace
                                    No.4A Carmel Road, Stanley
                                    Hong Kong

         with a copy to:            Leinen & Derichs
                                    Clever Str. 16
                                    D-50668 Koeln
                                    Germany

18.4.2   to the Purchaser:          Paxar Far East Limited
                                    8/F, Paxar Building
                                    210 Choi Hung Road
                                    San Po Kong, Kowloon
                                    Hong Kong

         with a copy to:            Clifford Chance
                                    29/F, Jardine House
                                    One Connaught Place
                                    Central
                                    Hong Kong

         or to such other individual or address as a party hereto may designate
         for itself by notice given as herein provided.

18.5     If any provision of the Agreement or any provision to be incorporated
         into the Agreement is or becomes invalid or impracticable or should a
         necessary provision not be contained in the Agreement, the validity of
         the Agreement and the remaining provisions of the Agreement shall
         remain unaffected. Instead of the invalid or impracticable provision or
         to bridge the gap, a valid provision is applicable which to the fullest
         extent possible corresponds to what the parties would have wanted or
         according to the sense and object of the Agreement would have agreed if
         they had known the invalidity or impracticability or had realised the
         gap.

18.6     Except to the extent that they have been performed and except where the
         Agreement provides otherwise, the obligations contained in the
         Agreement shall remain in force after completion.
<PAGE>   46
18.7     Declarations which are contained in an Attachment to the Agreement are
         part of the Agreement and are deemed also for purposes of all other
         Attachments to the Agreement as part of the Agreement.

18.8     The Agreement is exclusively governed by and construed in accordance
         with the law of the Federal Republic of Germany applicable to parties
         residing within the Federal Republic of Germany.

18.9     (Intentionally omitted)

18.10    The Agreement is written in the English language (except that certain
         of the Attachments may be in the German and/or the Chinese language).
         The Agreement may be translated into any language other than the
         English language, provided, however, that, for all purposes, the
         English language text of the Agreement shall prevail, provided,
         further, that, such terms to which a German translation has been added
         in parenthesis shall be interpreted throughout the Agreement in the
         meaning assigned to them by the German translation.

18.11    The Agreement including the Attachments hereto contain all of the
         terms, conditions, representations and warranties agreed upon between
         the parties relating to the subject matter of the Agreement and
         supersedes all prior negotiations, agreements and undertaking of the
         parties, oral, written, with respect to the subject matter hereof. Oral
         side agreements to the Agreement do not exist.

18.12    Except as required by law and except as required to perform the
         Agreement, no public announcements or press releases concerning the
         entering into of the Agreement shall be made by any party hereto
         without the prior written consent of the other party. If required by
         law and except as required to perform the Agreement, public
         announcements or press releases shall only be made upon consultation
         with the other party.

18.13    No party shall assign the Agreement, any part hereof or any rights
         arising hereunder to any third party (including affiliates of such
         party) without having obtained the prior written consent of the other
         party provided, however, that the Purchaser may at any time and from
         time to time, even without the prior written consent of the Seller
         assign in whole or in part its respective rights and obligations under
         the Agreement to one or more wholly owned subsidiaries of the
         Purchaser, such assignee(s) shall collectively be deemed to be the
         "PURCHASER" for all purposes of the Agreement and the assignee in such
         assignment shall have no further obligations with respect to the
         portions of its rights and obligations that have been assigned.

18.14    Except as expressly provided herein, no delay or omission to exercise
         any right, power or remedy accruing to any party to the Agreement,
         shall impair any such right, power or remedy of such party nor shall it
         be construed to be a waiver of any such breach or default, or an
         acquiescence therein, or of or in any similar breach or default
         thereafter occurring; nor shall any waiver of any single breach or
         default be deemed a waiver of any other breach or default theretofore
         or thereafter occurring. Any waiver, permit, consent or approval of any
         kind or character of any breach or default under the
<PAGE>   47
         Agreement, or any waiver of any provisions or conditions of the
         Agreement, must be in writing and shall be effective only to the extent
         specifically set forth in such writing.

18.15    Each party shall from time to time execute and deliver all such
         additional documents and take all such additional actions as the other
         party may reasonably require in order to effectively consummate the
         Agreement as provided herein.
<PAGE>   48
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in Hong Kong on the date first above written.

SIGNED by /s/ Chu Che Oop, Paul               )
For and on behalf of                          )
PAXAR FAR EAST LIMITED                        )
In the presence of:- /s/ Stuart Valentine     )

SIGNED by /s/ Ulrich Wilhelm Helmut Bornemann )
Ulrich Wilhelm Helmut Bornemann               )
In the presence of:- /s/ Ben Leung            )
<PAGE>   49
                                   SCHEDULE 1

                         SELLER'S COMPLETION OBLIGATIONS

At Completion, the Seller shall deliver or procure to be delivered to the
Purchaser:

A.       IN RESPECT OF THE HONG KONG COMPANY

1.       Duly executed instruments of transfer and bought and sold notes in
         respect of the Hong Kong Shares in favour of the Purchaser and its
         nominee(s) together with the relevant share certificates;

2.       Copies of statements of each bank account of the Hong Kong Company made
         up to a date not earlier than four business days before the Completion
         Date;

3.       Business Registration Certificate (copy);

4.       Original Memorandum and Articles of Association;

5.       Original Certificate of Incorporation;

6.       Two Common Seals of the Company;

7.       Copy annual returns of the Hong Kong Company which have been duly filed
         with the Company Registry;

8.       Originals of all shareholder resolutions passed to date (whether in the
         form of a written resolution or at a meeting of the shareholders);

9.       Original register of shareholders, register of directors and the
         register of directors' interests in shares notified to the Hong Kong
         Company;

10.      Originals of all other registers or statutory books and records which
         the Hong Kong Company is required to keep under Hong Kong law including
         all minutes books of directors' meetings;

11.      Any waivers, consents or other documents necessary to vest in the
         Purchaser the full beneficial ownership of the Hong Kong Shares and to
         enable Purchaser and its nominee(s) to be registered as legal owners
         thereof;

12.      Letter of resignation in the agreed form from Ms. Irene Chan
         acknowledging under seal that the writer has no claim against the Hong
         Kong Company for compensation for loss of office or otherwise;

13.      Deed of acknowledgement executed by Ms. Tracy Hui acknowledging under
         seal that she holds one Hong Kong Share as nominee for the Seller and
         she has no claim against the Hong Kong Company or the Purchaser.

14.      (Intentionally omitted)
<PAGE>   50
B.       IN RESPECT OF THE PANYU COMPANY:

1.       Letters of resignation in the agreed form from the present directors,
         Ms. Irene Chan and Mr. So Wah, of the Panyu Company in each case
         acknowledging that the writer has no claim against the Panyu Company or
         the Hong Kong Company for compensation for loss of office or otherwise;

2.       Business Licence (copy);

3.       Original Approval Letter (Pan Wai Jing Yin [1995] No.119) issued by
         Panyu Commission of Foreign Trade and Economic Cooperation ("PANYU
         COFTEC") on 18 April 1995;

4.       Original Approval Letters (Pan Wai Jing Yin [1996] No.385) and (Pan Wai
         Jing Yin [1997] No.3) in relation to expansion of business scope issued
         by Panyu COFTEC dated 27 November 1996 and 7 January 1997 respectively;

5.       Original Approval letter (Pan Wai Jing Yin [1998] No.052) in relation
         to increase of registered capital issued by Panyu Foreign Trade and
         Economic Bureau dated 6 March 1998;

6.       Original Approval Letter (Pan Wai Jing Ye [1998] No.078) in relation to
         adjustment of export ratio issued by Panyu Foreign Trade and Economic
         Bureau dated 28 March 1998;

7.       Copies of all resolutions of the board of directors of the Panyu
         Company;

8.       All original valuation reports issued by the Guangdong Import & Export
         Commodity Inspection Bureau of the PRC in respect of the import of
         equipment by the Panyu Company;

9.       All original capital verification reports confirming capital
         contributions totalling HK$29,339,881 to the Panyu Company;

10.      Original Articles of Association and all amendments thereto (if any);

11.      Original Feasibility Study Report;

12.      All original audited financial statements of the Panyu Company;

13.      Certified true copies of real estate sale and purchase contracts,
         original receipts evidencing full payment of the purchase price,
         certified true copies of land and building ownership certificates
         (excluding Property D5) and all planning, construction and completion
         permits and certificates (in respect of Property D5 only) of the
         following properties located in Panyu, PRC:

         a.       Property B20
         b.       Property C23
         c.       Property B72
         d.       Property B73
<PAGE>   51
         e.       Property C50
         f.       Property D5;

14.      All original loan contracts in connection with the purchase of the
         above properties; and

15.      Evidence satisfactory to the Purchaser that the Panyu Company has
         passed the 1999 annual examination by the relevant PRC authorities
         (including tax, finance, labour, customs and foreign exchange
         authorities and administration of industry and commerce).

16.      Original application letter for an extension of the period for making
         the outstanding capital contribution of the Panyu Company which bears
         the chop of Panyu Foreign Economic and Trade Bureau dated 10 April
         2000.

17.      Original certificate of approval issued to the Panyu Company by the
         Guangzhou Municipal People's Government.
<PAGE>   52
                                   SCHEDULE 2

The Seller further represents, warrants and undertakes to the Purchaser that:

1.       No order has been made or application for bankruptcy presented to the
         People's Court or resolution passed for the winding up of any of the
         Panyu Company; no distress, execution or other process has been levied
         on any of its assets; the Panyu Company has not stopped payment or is
         unable to pay its debts nor is it insolvent under PRC law and the Panyu
         Company has not applied for conciliation in order to settle its debts;
         no liquidation committee has been appointed by the Panyu Company, the
         People's Court or any other person for the purpose of liquidating the
         business or assets of the Panyu Company or any part thereof; no meeting
         of the creditors of the Panyu Company has been held or is in prospect;
         no ruling declaring the bankruptcy of the Panyu Company has been made
         and no public announcement in respect of the same has been pronounced
         by the People's Court, and there is no unfulfilled or unsatisfied
         judgment or order of the People's Court outstanding against it; and
         there has been no delay by the Panyu Company in the payment of any
         obligation due for payment.

2.       The Panyu Company has obtained all necessary approvals, licences,
         quotas, consents, permissions, authorisations and exceptions from any
         person, body or authority required for the establishment of the Panyu
         Company and the commencement and proper carrying on of the business of
         the Panyu Company (including, without limitation, all licences and
         quotas required to be obtained with respect to imports or exports or
         processing operations in the PRC) and all such approvals, licences,
         quotas, consents, permissions, authorisations and exceptions are valid
         and subsisting and in full force and effect.

         The Panyu Company is not in breach of any such approvals, licences,
         consents, permissions, authorisations and exceptions and there are no
         factors that might in any way prejudice the continuation or renewal of
         any of them, in whole or in part.

         The Panyu Company has conducted its business and its corporate affairs
         in accordance with all applicable PRC laws and regulations and has not
         done or omitted to do anything in contravention or breach of any law or
         regulation of the PRC or elsewhere applicable to it or the business of
         the Panyu Company.

         Notwithstanding the generality of the foregoing, the Seller further
         warrants that the Panyu Company has at all times carried on its
         business in all respects in accordance with, and all acts and things
         done or performed by the Panyu Company were within the scope of
         operations of, its business licence and articles of association; the
         Panyu Company has in all respects complied with the Regulations of the
         PRC on the Administration of Company Registration and the Measures on
         Annual Inspection of Legal Person Business Licences, and there is no
         event which would give rise to the revocation of the business licence
         by the State Administration for Industry and Commerce or other
         competent authority or which in any way may prejudice the renewal by
         such authority of the business licence;
<PAGE>   53
         there is no event which would render the Panyu Company liable to any
         fine, penalty or other sanction.

3.       The Panyu Company has in relation to each of its employees (and, so far
         as relevant, to each of its former employees) complied with all
         applicable laws and regulations of the PRC and requirements of all
         relevant labour authorities (including, without limitation, those
         relating to normal working hours, overtime hours, minimum wage and
         overtime pay) and all other obligations imposed on them by, and all
         orders and awards made under all regulations, codes of conduct and
         practice, collective agreements, customs and practices relevant to the
         relations between the Panyu Company and its employees or any trade
         union or the conditions of service of its employees.

4.       The Panyu Company has provided labour insurance to its employees
         (including, without limitation, work injury, unemployment, medical,
         maternity insurances and pension) in accordance with relevant PRC laws
         and regulations (including local regulations), has paid all amounts due
         to the PRC government by way of subsidies in housing, basic living
         necessities, culture, education, and the hygiene and health of such
         employees, and where the extent of such funds and subsidies have been
         checked by the labour authority and adjustment has been ordered, the
         appropriate adjustment has been effected accordingly.

5.       The Panyu Company is, and always has been, able to maintain a balance
         of foreign exchange income and expenditure without infringing any PRC
         laws.

         The Panyu Company has obtained and holds a valid and subsisting Foreign
         Exchange Registration Certificate in accordance with the previous and
         subsequent notices issued by the State Administration of Foreign
         Exchange ("SAFE") relating to the administration of foreign exchange;
         there is no event which would give rise to the revocation of the
         Foreign Exchange Registration Certificate by SAFE or other competent
         authority or which in any way may prejudice the renewal by such
         administration or authority of the Foreign Exchange Registration
         Certificate.

         The Seller is not aware of any reason why the Foreign Exchange
         Registration Certificate for the Panyu Company will not be renewed upon
         the expiry of its current term.

         There is no event which would render the Panyu Company liable to any
         fine, penalty or other sanction (including revocation of its business
         licence) as a result of any breach of the applicable PRC foreign
         exchange laws and regulations.

6.       In respect of all land and buildings located in the People's Republic
         of China which are owned by the Hong Kong Company and the Panyu
         Company, all land grant premiums in respect of all such land and all
         amounts payable by the Hong Kong Company and the Panyu Company to
         acquire such land and buildings have been paid in full; the Hong Kong
         Company and the Panyu Company have good and marketable title to, and
         have been issued building and land ownership certificates in respect
         of, all such land and buildings; except otherwise disclosed in
         Attachment 5.4(a), such land and buildings are not subject to any
         pledges, charges, liens, mortgages, security interests, pre-emption
<PAGE>   54
         rights and other encumbrances or third party rights or claims of any
         kind and there are no rights, interest, covenants, conditions,
         restrictions, exceptions, reservations, licenses, easements,
         agreements, claims or any other matters or things affecting such land
         and buildings; the Hong Kong Company and the Panyu Company have
         exclusive ownership and possession of such buildings and have obtained
         all material approvals and permits in respect of the construction,
         occupation and use of such buildings, and the Hong Kong Company and the
         Panyu Company have in all material respects performed, observed and
         complied with and there is no subsisting breach of any covenants,
         restrictions, conditions, agreements, statutory requirements, by-laws,
         orders, building regulations or other obligations affecting such
         buildings; all infrastructure facilities connecting to such land and
         buildings (including electricity, gas, steam, tap water, industrial
         water and telecommunications) that are necessary to the operation of
         the business carried on therein or thereon are available in adequate
         quantity and quality, the site coverage (percentage of the land covered
         by the buildings), plot ratio (ratio of total floor base of buildings
         constructed on the land to the total area of the land), green area
         (part of the land set aside for gardens, lawns or shrubbery) and other
         aspects of the constructions on the land comply in all material
         respects with the requirements of the original land grant contracts
         relating to such land and buildings, conditions of use attached to such
         land grant contracts and planning and other requirements of the PRC
         national and local governments.<PAGE>   1

                                                                    EXHIBIT 10.2

                            MASTER TRANSFER AGREEMENT

     THIS MASTER TRANSFER AGREEMENT is entered into as of the 30th day of March,
2000, by and among VISTEON CORPORATION, a corporation organized under the laws
of Delaware, U.S.A., with offices at 5500 Auto Club Drive, Dearborn, Michigan
48126 ("Visteon"), and FORD MOTOR COMPANY, a corporation organized under the
laws of Delaware, U.S.A., with offices at The American Road, Dearborn, Michigan
48121 ("Ford").

                                 R E C I T A L S

     WHEREAS, Ford has determined it would be appropriate and beneficial to
separate the activities now being conducted under the name "Visteon Automotive
Systems, an enterprise of Ford Motor Company", including those activities
conducted by any entity in which Ford, directly or indirectly, owns or controls
50% or more of its stock or other equity interests (a "Subsidiary") and by any
entity in which Ford, directly or indirectly, owns or controls less than 50% but
more than 20% of its stock or other equity interests (an "Affiliate") which is
aligned with such enterprise, which presently includes the Chassis Systems,
Climate Control Systems, Interior and Exterior Systems, Energy Transformation
Systems, Glass Division, and the Visteon Technology Office (collectively, with
historic operations, including the former Automotive Products Operations,
Automotive Components Division, Electronics, Plastics and Trim, Climate Control,
Chassis, Electrical and Fuel Handling, and Glass Divisions, the "Business");

     WHEREAS, Ford has concluded that the separation of the Business from its
automaking business would (i) alleviate competitive barriers to expanding the
Business beyond sales to Ford, Ford Subsidiaries and Ford Affiliates, (ii) allow
Ford to overcome competitive barriers to making purchases from third-party
automotive suppliers, and (iii) enhance the Business' ability to attract
employees and permit the Business to offer employee incentives more directly
tied to the performance of the Business;

     WHEREAS, Ford has caused Visteon to be formed for the purpose of carrying
on and conducting the Business;

     WHEREAS, Ford desires to transfer to Visteon certain entities and assets of
Ford (or its Subsidiaries) now devoted to the Business and to have Visteon
assume certain liabilities associated with the Business, as are more
particularly described below (the "Transfer");

     WHEREAS, Visteon wishes to acquire such entities and assets from Ford and
is therefore willing to assume said liabilities;

     WHEREAS, after the Transfer, the parties intend to either (i) effect an
initial public offering of shares of common stock of Visteon ("IPO"), have
Visteon distribute the proceeds of such offering to Ford, and use the proceeds
of such offering to pay Ford's creditors or

<PAGE>   2

shareholders, or (ii) not effect an IPO, but in either case, Ford intends to
effect a distribution of all of the shares of Visteon stock then owned by Ford
to Ford's shareholders (the "Distribution");

     WHEREAS, the parties intend that the transactions contemplated by this
Agreement (including the intended Distribution) shall be treated as tax-free
transactions under Sections 351, 368(a) and 355 of the Internal Revenue Code of
1986, as amended (the "Code"); and

     WHEREAS, in connection with the transactions contemplated by the parties,
and in order to support the purposes contemplated thereby, Ford and certain of
its Subsidiaries and Affiliates are entering into several ancillary agreements
with Visteon and its Subsidiaries and Affiliates, including, without limitation,
a Master Separation Agreement between Ford and Visteon, a Tax Sharing Agreement
between Ford and Visteon, an Hourly Employee Assignment Agreement between Ford
and Visteon, an Employee Transition Agreement between Ford and Visteon,
Information Technology Services Agreement between Ford and Visteon, a Purchase
and Supply Agreement between Ford and Visteon, an Aftermarket Relationship
Agreement between Visteon and the Automotive Consumer Services Group of Ford, a
Patent Cross-License Agreement, between Visteon Global Technologies, Inc.
("VGTI") and Ford Global Technologies, Inc. ("FGTI"), a Technology Cross-License
Agreement between VGTI and FGTI and various real estate leases. (The foregoing
agreements described above are collectively referred to as the "Ancillary
Agreements.")

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties agree as follows:

1.   TRANSFERS TO VISTEON.

     Ford shall assign, transfer, and convey to Visteon all of Ford's right,
title and interest in and to the following properties and assets relating to the
Business as a capital contribution (collectively, the items listed in Section 1
(a) through (l) are referred to as the "Visteon Assets"):

          (a) Capital Stock. All of the capital stock owned by Ford in the
entities listed in Exhibit 1(a) attached hereto, to be effective as of the dates
specified on such Exhibit 1(a).

          (b) Membership Interests. Ford's entire membership interest in the
entities listed in Exhibit 1(b) attached hereto, to be effective as of the date
specified on such Exhibit 1(b).

          (c) Joint Ventures. Effective as of 12:01 a.m., Eastern Standard Time,
on April 1, 2000, (the "US Transfer Date"), Ford's equity interest (including
Ford's membership interest or capital stock and Ford's interest in all related
joint venture agreements) in the entities listed in Exhibit 1(c) attached
hereto.

          (d) Owned Real Property. Effective as of 12:01 a.m., Eastern Standard
Time, on the US Transfer Date, all of Ford's right, title and interest in and to
the real property located and identified in Schedule A, attached hereto, and all
buildings, improvements and appurtenances thereto.

                                       2

<PAGE>   3

          (e) Leased Real Property. Effective as of 12:01 a.m., Eastern Standard
Time, on the US Transfer Date, the leasehold interests in real property held by
Ford under leases identified in Schedule B, attached hereto.

          (f) Owned Tangible Personal Property. Effective as of 12:01 a.m.,
Eastern Standard Time, on the US Transfer Date, except as otherwise provided
herein, all tangible personal property, including all equipment, machinery,
vehicles, leasehold improvements, furniture, fixtures, signs, inventories, tools
(other than customer owned tools) and other personal property owned by Ford and
(i) reflected on the combined balance sheet for the Business as of March 31,
2000, as prepared by Ford (the "Balance Sheet"), including assets written off or
expensed but still used exclusively by the Business, or (ii) which are located
on the properties referred to in Schedules A and B and used exclusively in the
Business, provided, however, with respect to inventories, including raw
materials, stores, spare parts, containers, work in process, finished goods and
other supplies and materials, those (A) located on the properties referred to in
Schedules A and B or in transit to or from such locations or in the possession
of the suppliers of the Business as of the US Transfer Date and (B) either
reflected on the Balance Sheet or used exclusively in the Business, are
included, or (iii) used exclusively in the Business, wherever located, to the
extent that Visteon identifies and requests, in writing prior to October 1,
2000, such assets from Ford and Ford determines such assets are not useful to
Ford for its operations. In the event Visteon requests assets pursuant to clause
(iii) immediately above, and Ford determines not to transfer any such assets,
Visteon will be provided with the use of such assets under the terms of the
Master Separation Agreement for the provision of transitional services. The
Balance Sheet will be prepared using the same accounting principles under which
the balance sheet of the Business, at December 31, 1999, was prepared.

          (g) Leased Personal Property. Effective as of 12:01 a.m., Eastern
Standard Time, on the US Transfer Date, except as otherwise provided herein, all
leasehold interests in equipment, vehicles, machinery, furniture, fixtures,
signs and other tangible personal property held by Ford and used exclusively in
the Business as of the US Transfer Date.

          (h) Contract Rights and Other Intangible Property. Effective as of
12:01 a.m., Eastern Standard Time, on the US Transfer Date, except as otherwise
provided herein, (i) cash, accounts receivable, accruals, interests as
beneficiary under letters of credit, prepaid expenses, deposits and other
retentions held by third parties owned by Ford and reflected on the Balance
Sheet, and (ii) Ford's rights under all contracts, agreements, licenses,
equipment leases, sales orders, purchase orders, understandings, arrangements,
plans and documents relating to the Business and existing on the US Transfer
Date, together with the right to purchase goods and services under existing
blanket purchase orders of Ford relating to the Business.

          (i) Claims. Effective as of 12:01 a.m., Eastern Standard Time, on the
US Transfer Date, claims, causes of action, rights of recovery, rights of set
off and rights of subrogation to the extent they are related to the Visteon
Assets, the Visteon Liabilities or the Business. Visteon acknowledges that Ford
has entered into settlements with its insurance carriers with respect to
existing and future environmental conditions and claims and Visteon has been
allocated $15

                                       3

<PAGE>   4

million of the proceeds of such settlements. Neither Ford nor Visteon have any
remaining rights under those policies to make claims and Visteon agrees that it
will not attempt to make any claims under such policies.

          (j) Permits. Effective as of 12:01 a.m., Eastern Standard Time, on the
US Transfer Date, except as otherwise provided herein, and the rights of Ford
under all licenses, franchises, permits, authorizations and approvals used
exclusively in the Business.

          (k) Intellectual Property. Effective as of 12:01 a.m., Eastern
Standard Time, on the US Transfer Date, the name "Visteon" and associated logo,
and all the trademarks (including the applications and registrations for
trademarks) listed on the attached Schedule D, together with all goodwill and
going concern value of the Business.

          (l) Records. Financial, accounting and operating data and records
relating exclusively to the Business and located in the locations listed on
Schedules A or B, or at the Dearborn Glass Plant, or located in record storage
locations maintained by Ford and sent to storage by personnel associated with
the Business, including, without limitation, books, records, electronic data,
financial and corporate systems manuals, notes, sales and sales product data,
advertising materials, credit information, cost and pricing information,
customer and supplier lists, facility blueprints and plant layouts.
Additionally, Ford shall transfer to Visteon all minute books, stock ledgers,
and other corporate documents of Visteon Subsidiaries and Visteon Affiliates, to
the extent in the possession of Ford. In addition, Visteon may copy any other
records relating to the Business in the possession of Ford, at Visteon's
expense.

2.   OTHER TRANSFERS AND ACTIONS.

     (a)  Ford has or will assign, transfer, and convey the properties and
assets listed on Exhibit 2(a), attached hereto, to the applicable Visteon
Subsidiaries by the dates specified on such exhibit;

     (b)  In addition, Ford has caused or will cause the actions listed on
Exhibit 2(b), attached hereto, to be taken by its Subsidiaries by the dates
specified on such exhibit;

     (c)  As a result of the transfers described in this Agreement, the parties
acknowledge and agree that Visteon will also have an indirect interest in the
entities listed on Exhibit 2(c) attached hereto.

     (d)  Each entitiy that is to be transferred under Section 1 above or is
described in Exhibits 2(a), 2(b) or 2(c) will be operated for the benefit of
Visteon on and after the US Transfer Date.

                                       4

<PAGE>   5

3.   EXCLUDED ASSETS.

     Notwithstanding anything, express or implied, to the contrary contained
herein, the following properties, assets and rights used in, or related to, the
Business are excluded from the Transfer:

     (a)  Certain real property and related improvements thereon known as the
Dearborn Glass Plant (provided Visteon will be given the right to continue to
occupy such plant until July 31, 2000 as it winds up operations in accordance
with the applicable lease agreement) and the Canton Forge Plant and the vacant
land associated therewith;

     (b)  All of the assets primarily associated with Ford's telecommunications
network, such as the Ford Communications Network, that are located at any of the
Visteon facilities;

     (c)  Tooling which is owned by Ford or other third party customers and is
not carried on the Balance Sheet, wherever located;

     (d)  Vehicles provided by Ford or Ford Motor Credit Company for use by the
Business and not carried on the Balance Sheet, including management lease,
executive, commercial, sales, pool, prototype and quality focus test fleet
vehicles;

     (e)  All blanket purchase orders issued by Ford with respect to goods and
services purchased both for the Business and for other operations at Ford (with
the understanding that Ford will continue to provide the benefit of existing
blanket purchase orders to the Business, at the cost of Visteon with respect to
such goods and services); and

     (f)  All contracts and agreements of Ford relating to employees of the
Business, including, without limitation, collective bargaining agreements,
employee benefit plans, and other commitments to such employees, subject to the
terms of the Hourly Employee Assignment Agreement and the Employee Transition
Agreement.

4.   ASSUMED LIABILITIES.

     (a)  General Assumption. Except as otherwise specifically retained by Ford
in writing, including those retained in this Section 4, Section 5 below and in
any Ancillary Agreement, Visteon will, as of the US Transfer Date, assume, and
agrees to perform, the debts, liabilities, guarantees, indemnities,
contingencies, and obligations of Ford, whether asserted or unasserted, fixed or
contingent, accrued or unaccrued, known or unknown, and howsoever arising,
relating to the Business, that are (i) reflected in the Balance Sheet and which
remain outstanding on the US Transfer Date, (ii) arise in connection with the
Business between the date of the Balance Sheet and the US Transfer Date and
would be reflected on the financial statements of Visteon as of the US Transfer
Date if such statements were prepared as of the US Transfer Date in accordance
with the same accounting principles on which the Balance Sheet was prepared,
(iii) are expressly provided by this Agreement, any Ancillary Agreement or other
written agreement signed by Visteon in connection with the Separation (as
hereafter defined) to be transferred to and assumed

                                       5

<PAGE>   6

by Visteon, or (iv) are related to or arise out of or in connection with the
Visteon Assets or the Business, whether before or after the date of the Balance
Sheet (collectively referred to as the "Visteon Liabilities").

     (b)  Limitations on General Assumption. Notwithstanding the foregoing,the
Visteon Liabilities are subject to and shall not be deemed to include any item
specifically excluded or retained by Ford pursuant to this Section 4(b).

          (i)   Product Liability. All liabilities for any causes of action,
     however presented, alleging that parts, components or systems that have
     been (i) manufactured by the Business or (ii) manufactured by a third
     party, whether sold or otherwise supplied separately, or incorporated into
     components or systems of the Business ("Visteon Products"), in each case,
     which have been sold or otherwise supplied by the Business, have caused
     personal injuries, injuries to property or other damages regardless of the
     theory of liability on which the claim is based ("Visteon Product Claims")
     to the extent that such parts, components or systems were provided to Ford
     or Ford Subsidiaries for model year 1996 and before, will be retained by
     Ford. Visteon's liability for all other Visteon Product Claims for parts,
     components or systems supplied to Ford or Ford Subsidiaries for vehicles in
     model year 1997 and thereafter will be governed in accordance with the
     terms of Ford's global purchase order terms and conditions promulgated by
     Ford with respect to its supply contracts with third parties as in effect
     at the time such parts, components or systems were delivered, as
     customarily applied to Tier 1 suppliers in the automotive parts industry by
     Ford.

          (ii)  Warranty and Recall. All Visteon Products, in each case, which
     have been sold or otherwise supplied by the Business for use in model year
     1997 vehicles (or later model years) manufactured or sold by Ford or Ford
     Subsidiaries are deemed to be subject to the warranty provisions of the
     global purchase order terms and conditions promulgated by Ford with respect
     to its supply contracts with third parties as in effect at the time such
     parts, components or systems were delivered. Visteon agrees it will be
     liable to Ford and the Ford Subsidiaries for all warranty claims for such
     parts, components or systems to the same extent as another Tier 1 supplier
     would be liable if it had supplied such parts, components or systems, and
     Ford agrees it will apply the same customary practices to Visteon as Ford
     applies to other Tier 1 suppliers in the automotive parts industry.

          (iii) Environmental Claims. The Visteon Liabilities include any
     existing or future Environmental Claims to the extent they relate to or
     arise from the ownership of or operations on (at any time) the sites listed
     on Schedules A and B (other than the Monroe Plant, which is treated
     separately below). In addition, the Visteon Liabilities include the
     Environmental Claims listed on the attached Schedule E, to the extent of
     the allocation of such claim to Visteon reflected on such Schedule.
     Notwithstanding anything to the contrary herein, Ford shall retain, and
     Visteon will have no liability for, any Environmental Claims which relate
     to or arise from (A) the ownership of or operations on (at any time) the
     sites listed on the attached Schedule C or (B) Ford's allocation of
     liability as reflected on Schedule E. Each party shall have the control
     over any investigation, remediation

                                       6

<PAGE>   7

     activities, litigation or claim process relating to the sites for which it
     has full responsibility hereunder. For sites with shared liability, control
     will be given to the party with the majority of the liability. For purposes
     of this Agreement, the following definitions apply:

     "Environmental Claims" shall mean any cleanup, response or removal
     activities or any claim, action, cause of action, investigation or notice
     (written or oral) by any person or entity alleging potential liability
     (including, without limitation, potential liability for investigation
     costs, cleanup costs, governmental response costs, natural resource
     damages, property damages, personal injuries, or penalties) arising out of
     or resulting from: (i) the presence or release, or threatened release, of
     any Hazardous Substance; (ii) circumstances forming the basis of any
     violation or alleged violation of any Environmental Law; or (iii) on-site
     or off-site disposal or dumping activities.

     "Environmental Law" shall mean any and all applicable laws (including all
     common law, consents, licenses, permits, certificates, variances,
     exemptions, franchises and other approvals issued, granted, given, required
     or otherwise made available by any governmental authority) issued,
     promulgated or entered into by any governmental authority relating to the
     environment or the protection or preservation of human health or safety.

     "Hazardous Substance" shall mean any pollutant, hazardous, acutely
     hazardous, or toxic substance, waste or contaminant, or any other material,
     including, without limitation, petroleum hydrocarbons and asbestos,
     regulated under any Environmental Law.

          (iv)   Monroe Environmental Claims. All liability for Environmental
     Claims relating to the ownership or operations of the Monroe, Michigan
     plant will be subject to the agreement of the parties set forth on the
     attached Schedule F.

          (v)    Current Claims. The Visteon Liabilities specifically include,
     without limitation, the existing litigation identified on Schedule G,
     attached hereto.

          (vi)   Intellectual Property. Except as provided on the attached
     Exhibit I, for any causes of action, however presented, alleging that
     Visteon Products infringe or otherwise violate the intellectual property
     interests of others ("IP Claims"), (A) for Visteon Products sold or
     supplied to Ford or Ford Subsidiaries on or prior to July 31, 1999,
     liability shall be retained by Ford, (B) Visteon will be liable for such IP
     Claims related to Visteon Products sold or supplied to Ford or Ford
     Subsidiaries after July 31, 1999, to the same extent as other Tier 1
     suppliers would be liable if they had supplied such parts, components or
     systems to Ford, and (C) for Visteon Products sold to third parties at any
     time, any liability will be included in the Visteon Liabilities. Ford and
     Visteon agree to cooperate to establish defenses against liabilities
     arising from sales to Ford and identify any licenses to Ford or Visteon
     which would be useful in such defenses.

          (vii)  Topics Not Covered. The parties have reached agreement with
     respect to certain Visteon Liabilities in the area of employee matters
     which are covered in the Hourly

                                       7
<PAGE>   8

     Employee Assignment Agreement and the Employee Transition Agreement. They
     have also entered into certain other agreements with respect to taxes which
     are covered in the Tax Sharing Agreement.

     (c)  The parties acknowledge and agree that they have undertaken a good
faith effort to identify all material outstanding liabilities of the Business
pertaining to the substantive areas identified in Section 4(b) above. To the
extent that, subsequent to the US Transfer Date, and prior to December 31, 2001,
the parties discover additional material liabilities or potential material
liabilities of the Business relating to pre-Transfer events, actions or
occurrences, in the areas governed by subsections (iii), (v), (vi) or (vii) of
Section 4(b), or the business operations of the Business, the parties undertake
that they will consider a mutually agreeable allocation of responsibility for
such items. However, nothing herein obligates Ford to accept any such liability
and Ford will only be liable to the extent it signs a written agreement
accepting all or a portion of the liabilities. The parties agree that they will
consider such allocation through meetings of persons with appropriate decision
making authority, and in no event will the parties be required to pursue the
matter beyond the Vice President level of authority. For purposes of this
section, a claim (or series of related claims) must have a potential exposure
exceeding $50,000,000 (including defense costs) to be considered material.

     5.   RETAINED LIABILITIES/CONFLICTS.

     (a)  Retained Liabilities. Notwithstanding anything to the contrary
contained in Section 4 hereof, Visteon shall not assume any obligation or
liability of Ford with respect to the following (collectively referred to as the
"Retained Liabilities"): (i) cases or claims arising out of the production or
sale of thick film ignition modules which were sold prior to the US Transfer
Date, including, without limitation, those listed on Schedule H hereto, (ii)
Michael Jones, et al. v Ford Motor Company, filed on June 9, 1993 in U.S.
District Court, District of Minnesota, alleging race discrimination, (iii) J. A.
Jones Co. v Ford, filed in July, 1999 in U.S. District Court, Eastern Division,
Michigan regarding construction litigation arising out of environmental
remediation of environmental site at Monroe, Michigan, and (iv) liabilities of
the Business explicitly retained by Ford with respect to such matters as are
identified in Section 4(b) above, in any Ancillary Agreement or in any other
writing between the parties.

     (b)  Conflicts. The parties acknowledge and agree that, except to the
extent this Agreement specifically provides that other agreements control (such
as employment and tax matters), the allocation of liabilities between the
parties and their respective Subsidiaries and Affiliates in connection with the
transfer of the various parts of the Business as contemplated in Sections 1 and
2 above, will be governed and controlled by the principles of allocation set
forth in Section 4 hereof, with appropriate changes for fact specific
differences, as agreed to by the parties, such as the applicable locations of
the Business, and any specific litigation or other claims identified in the
agreement which are peculiar to that Subsidiary or Affiliate or the laws of the
applicable jurisdiction. In that regard, that parties acknowledge that Exhibit E
contains a description of existing global environmental liabilities that apply
to certain Visteon Subsidiaries as well as to Visteon itself and this list will
control over general assumption language in any other

                                       8

<PAGE>   9

agreements. In accordance with the foregoing, this Agreement supersedes any
prior or subsequent agreements executed in connection with the Transfer to the
contrary and Ford and Visteon agree that they will each cause their respective
Subsidiaries to abide by these allocation principles, regardless of the actual
wording of the operative transfer documents.

6.   COVENANTS.

     (a)  Ford agrees that to the extent that Ford has not transferred to
Visteon all of the assets needed to conduct the Business as conducted
immediately prior to the US Transfer Date, Ford will provided transitional
services to Visteon which are necessary for the conduct of the Business on such
date, with the exception of services which Ford would not be legally permitted
to provide to Visteon (or its Affiliates) from time to time. The terms under
which such transitional services will be provided are to be set forth in the
Master Separation Agreement between Ford and Visteon. Visteon further agrees
that to the extent Ford or a Ford Subsidiary or Ford Affiliate has guaranteed
any obligations of a Visteon Subsidiary or Visteon Affiliate ("Ford Guaranty"),
(i) Visteon will execute a guaranty of such obligations as requested by Ford,
(ii) Visteon will take reasonable steps to release Ford (or the applicable Ford
Subsidiary or Ford Affiliate) from any Ford Guaranty, and (iii) Visteon
indemnifies Ford and any applicable Ford Subsidiary or Ford Affiliate for any
claims made on a Ford Guaranty.

     (b)  Visteon agrees to take such steps to replace any indemnities, bonds or
other assurances given by Ford (or Ford Subsidiaries that are not Visteon
Subsidiaries) to any governmental authorities for the Business, including those
issued in connection with environmental permits and licenses, and customs and
import/export laws, as soon as practicable, but in any event, on or before
December 31, 2000, and will be liable to Ford for any claims made against such
indemnities, bonds or assurances by such authorities relating to the Business.
Ford acknowledges that until such indemnities, bonds or other assurances are
replaced, it will continue to honor them subject to Visteon's foregoing
agreement.

     (c)  Ford agrees that it will, and will cause its Subsidiaries to, not
pursue any product liability and warranty and recall claims against Visteon, the
Visteon Subsidiaries and Visteon Affiliates transferred to Visteon as part of
the Transfer to the extent Ford would have no claim against Visteon under the
allocation of liabilities set forth in Sections 4(b)(i) and (ii) if Visteon had
supplied the parts, components or systems.

     (d)  It is anticipated by the parties that Ford and Visteon, either
directly or indirectly through their respective Subsidiaries or Affiliates, may
provide services to the other which involve the discharge of waste (i) generated
by Visteon, Visteon Subsidiaries or Visteon Affiliates from Ford controlled
facilities under environmental permits issued to Ford or (ii) generated by Ford,
Ford Subsidiaries or Ford Affiliates from Visteon controlled facilities under
environmental permits issued to Visteon, Visteon Subsidiaries or Visteon
Affiliates. Visteon agrees that it will reimburse Ford for any Losses (defined
in Section 7 below) resulting from any violations of such environmental permits
issued to Ford, a Ford Subsidiary or a Ford Affiliate caused by changes in the
discharge of waste associated with the operations of Visteon, any Visteon
Subsidiary or any Visteon Affiliate, as applicable, to the extent the violation
is caused by such discharge. Ford

                                       9

<PAGE>   10

agrees that it will reimburse Visteon for any Losses resulting from any
violations of such environmental permits issued to Visteon, a Visteon Subsidiary
or a Visteon Affiliate caused by changes in the discharge of waste associated
with the operations of Ford, any Ford Subsidiary or any Ford Affiliate, as
applicable, to the extent the violation is caused by such discharge. To the
extent a violation is caused by actions of both parties, the liability will be
split proportionally to the amount of changes made by the parties. The parties
intend to investigate and identify sites that this will apply to and enter into
an agreement to cover these situations in more detail.

     (e)  A certain press located at the Monroe, Michigan plant ("Monroe
Facility") and identified as TLSE 3000 Transfer Press, Vendor/Mfg.: Verson, Tag
No. F733872 (the "Monroe Press") is leased by Ford pursuant to a Lease dated as
of August 15, 1991, between Ford, as Lessee, and Wilmington Trust Company and
William J. Wade, as Owner Trustees for AT&T Capital Holdings International Inc.
[Equipment Trust No. 1991 F] (the "ATT Lease"). The ATT Lease covers various
equipment used by Ford at other locations as well as the Monroe Press. Ford will
retain its leasehold interest in the Monroe Press and the Monroe Press will be
located at its present location at the Monroe Facility. If Ford becomes the
legal owner of the Monroe Press in the future, Ford will be deemed to
automatically transfer title to the Monroe Press to Visteon, all at no charge to
Visteon. Visteon, as transferee of legal title to the Monroe Facility,
acknowledges and agrees with respect to the Monroe Press: (i) the Monroe Press
is subject to the ATT Lease subject to the Lessor Parties' interests,
inspection, and other rights, including rights to exercise remedies under the
ATT Lease and the Indenture (including the remedy to repossess the Monroe
Press), (ii) Visteon will not move the Monroe Press from the Monroe Facility
without Ford's written consent, (iii) Visteon has not and will not subject the
Monroe Press to any liens, (iv) Visteon will not interfere with the Lessor
Parties' rights to the Monroe Press, and (v) Visteon will maintain and repair
the Monroe Press, and will otherwise abide by the terms of the ATT Lease that
apply to the Monroe Press and its use thereof. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed to them in the
ATT Lease.

     (f)  Ford is pursuing a license from Bosch for the ETC Microprocessor
Monitor (i.e., Quizzer), and Ford agrees to make a license inquiry on behalf of
Visteon as well.

7.   INDEMNIFICATION.

     (a)  Visteon agrees to indemnify and save and hold harmless Ford, all Ford
Subsidiaries and all Ford Affiliates, and the officers, directors, employees,
agents, consultants, attorneys, accountants and other representatives thereof
(collectively, the "Ford Indemnitees") from and against any damages,
liabilities, obligations, losses, investigation and remediation of Environmental
Claims, penalties, claims, actions, disputes or settlements (collectively,
"Losses"), arising out of or resulting from or in connection with (i) any
Visteon Liabilities or other obligations or liabilities assumed by Visteon or
any entity controlled by Visteon (collectively, the "Visteon Group") pursuant to
this Agreement or any other agreement executed by Visteon or any member of the
Visteon Group in connection with the legal separation of the Visteon Group as
contemplated in this Agreement and the offering and/or distribution of the
shares of Visteon (collectively, the "Separation"), (ii) any failure of any of
the Visteon Group to perform any

                                       10

<PAGE>   11

agreement or covenant contained herein or therein, (iii) the costs of operating,
maintaining and carrying any Restricted Interests during the Restricted Period
(defined below), and (iv) any tax consequences suffered by the Ford Group as a
result of the failure of the transfer of any Restricted Interests (defined
below) to be treated, for U.S. federal income tax purposes, as transfers to
Visteon as of the date on which Visteon International Holdings, Inc. is
transferred to Visteon. Visteon agrees to reimburse, or cause a member of the
Visteon Group to reimburse, each of the Ford Indemnitees for any reasonable
attorneys' fees or any other expenses reasonably incurred by any of them in
connection with investigating and/or defending any Loss.

     (b)  Ford agrees to indemnify and save and hold harmless Visteon, all
Visteon Subsidiaries and all Visteon Affiliates, and the officers, directors,
employees, agents, consultants, attorneys, accountants and other representatives
thereof (collectively, the "Visteon Indemnitees") from and against any Losses,
arising out of or resulting from or in connection with (i) any Retained
Liabilities or other obligations or liabilities of Ford or any entity controlled
by Ford (collectively, the "Ford Group") not assumed by Visteon or any member of
the Visteon Group pursuant to the Agreement or any other agreement executed by
Visteon or any member of the Visteon Group in connection with the Separation,
(ii) any Environmental Claims arising from ownership or operation of the plant
in Lansdale, Pennsylvania which has been shut down by Ford Electronics and
Refrigeration LLC, or (iii) any failure of any of the Ford Group to perform any
agreement or covenant contained herein or therein. Ford agrees to reimburse, or
cause a member of the Ford Group to reimburse, each of the Visteon Indemnitees
for any reasonable attorneys' fees or any other expenses reasonably incurred by
any of them in connection with investigating and/or defending any Loss.

     (c)  The Ford Indemnitees or the Visteon Indemnitees (in either case, an
"Indemnitee"), as applicable, shall promptly give the party giving the
indemnification (the "Indemnifying Party") written notification of any third
party claim or any other indemnification claim, together with a copy of any
legal pleadings or other written demands from such third party, if applicable;
provided, however, that the failure to give such notice will not relieve an
Indemnifying Party of its obligations hereunder, except to the extent that the
Indemnifying Party is actually and materially prejudiced by such failure to give
notice. In particular, in case of any investigation or audit, the Indemnitees
shall inform the Indemnifying Party at the beginning of such investigation or
audit, to the extent practical, so that the Indemnifying Party may participate
therein.

     (d)  Except where a Ford Indemnitee has reserved or been given the right to
manage or defend a Loss or claim in a written instrument signed by Visteon (or
other member of the Visteon Group involved in such Loss or claim), Visteon shall
be entitled, at its own expense, to conduct the defense of any third party claim
with counsel of its own choice. However, the respective Ford Indemnitees shall
always be entitled to participate in such defense with counsel of their own
choice and at their own expense and Visteon will cooperate with the Ford
Indemnitees and will consult with the Ford Indemnitees (and give reasonable
consideration to all proposals and suggestions made by the Ford Indemnitees in
connection with all material matters arising in the conduct of such defense).
The Ford Indemnitees shall comply with Visteon's instructions in the defense
unless the Ford Indemnitees believe the instruction to be unreasonable. The Ford

                                       11

<PAGE>   12

Indemnitees will use reasonable efforts to mitigate the amount of any Losses
that may give rise to indemnification hereunder. In the event the Ford
Indemnitees have the right to manage or defend the Loss, the involved member of
the Visteon Group shall always be entitled to participate in such defense with
counsel of its own choice and at its own expense and the Ford Indemnitees will
cooperate with the Visteon Group and will consult with the Visteon Group (and
give reasonable consideration to all proposals and suggestions made by the
Visteon Group) in connection with all material matters arising in the management
of such Loss or conduct of such defense.

     (e)  The Visteon Group may not settle any other third party claims covered
by this Section without the prior written consent of the Ford Indemnitees
involved therein and the Ford Group may not settle any other third party claims
covered by this Section without the prior written consent of the Visteon
Indemnitees involved therein; except, in either case, if such settlement is
solely for money damages and the applicable Indemnitees are reasonably satisfied
that the responsible party will directly pay such amount in full.

     (f)  For tax purposes, the parties agree to treat any payment pursuant to
this Section as a capital contribution by Ford to Visteon or a distribution by
Visteon to Ford made in the last taxable period beginning before the
Distribution and, accordingly, as not includible in the taxable income of the
recipient or deductible by the payor.

     (g)  A party's liability with respect to any Loss for which an Indemnitee
actually recovered amounts from third parties (including, without limitation,
proceeds under any policy of insurance available for the purpose) shall be
reduced to the extent of the amounts actually recovered. A party's Loss shall
not include any consequential damages or lost profits that may be suffered by
such party. The parties will also take into account the time cost of money
(using the then-current LIBOR, or any replacement index, as the applicable rate)
in determining amount of the Loss suffered by the any Indemnitee.

     (h)  The amount of any Loss for which indemnification is provided under
this Agreement shall be first reduced by the tax benefit (determined in the
reasonable judgment of the Indemnitee) to any Indemnitee of the applicable loss
item, and such net loss amount shall then be increased to take account of the
net tax cost, including interest and penalties (the "Tax Cost"), if any,
incurred by an Indemnitee arising from the receipt or accrual of an indemnity
payment hereunder (grossed up for such increase). The computation of such Tax
Cost shall reflect the hypothetical tax consequences of the receipt or accrual
of any indemnity payment, defined using the maximum statutory rate (or rates, in
the case of an item that affects more than one tax) applicable to the Indemnitee
for the relevant taxable periods, and reflecting, for example, the effect of the
deductions available for interest paid or accrued and for taxes such as state
and local income taxes. Any indemnity payment hereunder shall initially be made
without regard to this paragraph (h) and shall be increased or reduced to
reflect any such Tax Cost (including gross-up) only after the Indemnitee has
actually realized or received such cost. The amount of any Tax Cost payment
hereunder shall be adjusted to reflect any final determination (which shall
include the execution of Form 870-AD or successor form) with respect to the
Indemnitee's liability for taxes, and payments between Ford and Visteon to
reflect such adjustment shall be made if necessary.

                                       12

<PAGE>   13

     (i)  Ford has the right to offset any amounts owed by Visteon, any Visteon
Subsidiary or any Visteon Affiliate to any member of the Ford Group against any
amounts owed by Ford to Visteon pursuant to this Section 7. Visteon has the
right to offset any amounts owed by Ford, any Ford Subsidiary or any Ford
Affiliate to any member of the Visteon Group against any amounts owed by Visteon
to Ford pursuant to this Section 7.

     (j)  For purposes of this Agreement, the term "controls" or "controlled"
means the possession, directly or indirectly, of the power to direct or cause
management to direct the policies of an entity, whether through the ownership of
equity, by contract or otherwise. "Visteon Subsidiary" means any entity that is
or would be a subsidiary of Visteon after the completion of the transactions
described in Section 1 or described on Exhibits 2(a), 2(b) or 2(c). "Visteon
Affiliate" means any entity that is or would be an Affiliate of Visteon after
the completion of the transactions described in Section 1 or described on
Exhibits 2(a), 2(b) or 2(c). "Ford Subsidiary" means any Subsidiary of Ford,
other than Visteon or a Visteon Subsidiary. "Ford Affiliate" means any Affiliate
of Ford other than a Visteon Affiliate.

8.   FURTHER ASSURANCES/EFFECT OF ASSIGNMENTS.

     (a)  Each party shall execute and deliver to the other such undertakings,
assumption agreements, assignments, deeds, leases, bills of sale, stock
certificates, endorsements, notices, consents and other instruments as shall be
necessary or appropriate to transfer, convey or assign the those properties,
assets and interests of the Business as are described in Sections 1 and 2 hereof
to be transferred to Visteon or any Visteon Subsidiary and for Visteon to carry
out and perform its obligations under this Agreement. Further, the parties agree
that they shall undertake such further actions, consistent with the terms of
this Agreement and the Ancillary Agreements, as may be reasonably necessary to
assure that Visteon has access to the assets and services needed to conduct the
Business in substantially the same manner as conducted on the US Transfer Date,
subject to the time limitations in the Master Separation Agreement or other
Ancillary Agreement for transitional services. If any assets are transferred to
Visteon as part of the Separation which are not part of the Visteon Assets
described herein, then Visteon will reconvey such assets to Ford, at the request
and expense of Ford.

     (b)  To the extent that any interest in the shares, equity, interests,
contracts, lease permits, or other assets, properties, rights, or interests
comprising a part of the Transfer is not capable of being assigned, transferred,
or conveyed without the consent, waiver, or authorization of a third party to
such transfer or conveyance, or if an attempted assignment, transfer, or
conveyance would constitute a breach of any of the contracts, lease permits, or
other assets, properties, rights, or interests, or a violation of any law,
statute, decree, rule, regulation, or other governmental edict or is not
immediately practicable, then this Agreement shall not constitute an assignment,
transfer, or conveyance of such interest, or an attempted assignment, transfer,
or conveyance of such interest (collectively, the "Restricted Interests"). The
entire beneficial interest in any asset or entity subject to a restriction as
described above, and any other interest in such asset or entity, which are
transferable notwithstanding such restriction, shall be deemed transferred. To
the extent that the consents, waivers, and authorizations referred to above are
not

                                       13

<PAGE>   14

obtained by Ford or Visteon, or until the impracticalities of transfer referred
to therein are resolved to Visteon's reasonable satisfaction, Ford shall use
commercially reasonable efforts, at the expense of Visteon to (i) provide to
Visteon the benefits and burdens of any Restricted Interests (including, without
limitation, the benefit of all voting rights related to any Restricted Entity,
as defined below), and (ii) enforce, at the request of Visteon for the account
of Visteon, any rights of Ford arising from any Restricted Interests (including
the right to elect to terminate such Restricted Interest in accordance with the
terms thereof upon the advice of Visteon). In addition, from the time during the
period commencing on the latest date such Restricted Interest was to have been
transferred under the terms of this Agreement and terminating at the close of
business on the date such Restricted Interests are legally transferred (the
"Restricted Period"), Ford will give Visteon exclusive rights to manage the
Restricted Interests (including the right to run operations without consultation
with Ford) until such time as the Restricted Interests are legally transferred.
In the event that prior to the transfer of a Restricted Interest, the legal
holder of such Restricted Interest is the subject of any bankruptcy action,
assignment for the benefit of creditors or other insolvency proceeding, then
such Restricted Interest will be deemed to be legally transferred immediately
prior to the onset of such proceeding, regardless of any restrictions.

     (c)  In the event that a Restricted Interest applies to the transfer of
Ford's or a Ford Subsidiary's interest in a legal entity ("Restricted Entity"),
then during the Restricted Period, if the Restricted Entity makes any
distributions to Ford or a Ford Subsidiary (collectively, the "Ford Entity")
with respect to profits, or in liquidation or otherwise, whether in cash or in
kind, the Ford Entity shall (i) within 60 days following receipt of the
distribution, remit the amount of any such cash distributions by wire transfer
in the currency in which such distribution was received to an account designated
by Visteon, and (ii) with respect to any in-kind distributions, take all steps
reasonably necessary to cause the transfer, by no later than 60 days following
the date of such distribution to the Ford Entity, of all of Ford's right and
title to and interest in each such distribution to Visteon. Visteon shall bear
the costs and expenses incurred in connection with the transfer of such
distributions. In the event that, at any time during the Restricted Period, (I)
the Ford Entity is obligated to make a capital contribution (whether in cash or
in kind) with respect to, or other payment arising out of its ownership of, the
Restricted Entity, or (II) any indemnification obligation of Visteon becomes
payable because of its management of the Restricted Entity, Visteon shall remit
the amount of any such capital contribution or indemnification obligation by
wire transfer to an account designated by Ford within 60 days following receipt
by Visteon of notice of such obligation from Ford. In the event that any
obligation of the Ford Entity arises hereunder with respect to an in-kind
capital contribution by the Ford Entity, the amount to be remitted by Visteon
hereunder with respect to such capital contribution shall equal the fair market
value of such in-kind contribution, and, notwithstanding the foregoing, shall,
in the event the parties are unable to agree on the fair market value of the
contribution, be remitted within 30 days following the issuance of an appraisal
by the independent appraiser mutually agreeable by Ford and Visteon.

                                       14

<PAGE>   15
9.   EMPLOYEES.

     It is contemplated that certain employees of Ford assigned to the Business
shall become employees of Visteon. The transition of such employees to Visteon
is provided for in the Employee Transition Agreement. In addition, Ford will
provide certain other employees to Visteon under the terms of the Hourly
Employee Assignment Agreement.

10.  MISCELLANEOUS.

     (a)  This Agreement, including all Exhibits and Schedules attached hereto,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior written and oral and all contemporaneous
oral agreements and understandings with respect to the subject matter hereof.
The covenants, representations, and indemnities of the parties herein shall
survive the closing and the transfer of the Visteon Assets, and continue in full
force and effect.

     (b)  This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Michigan.

     (c)  This Agreement is for the sole benefit of the Parties hereto and no
third party may claim any right, or enforce any obligation of the Parties,
hereunder.

     (d)  All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered in person, by fax with
confirmation of receipt, by express or overnight mail delivered by a nationally
recognized air courier (delivery charges prepaid), or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties as
follows:

If to Ford:
        Ford Motor Company
        The American Road
        Dearborn, MI 48121
                 Attention:  Secretary
                 Fax:  (313) 337-9591

 If to Visteon:
        Visteon Corporation
        5500 Auto Club Drive
        Dearborn, MI
                 Attention:  General Counsel
                 Fax: (313) 390-2718

or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by fax or by overnight courier shall
be deemed effective on the next business day. Any notice or

                                       15

<PAGE>   16

communication sent by registered or certified mail shall be deemed effective on
the fifth business day after such notice or communication was mailed.

     (e)  This Agreement shall be binding upon and inure to the benefit of each
party hereto and the respective successors and assignees of the parties. In no
event will a party be released from their indemnity obligations without the
written consent of the other party.

     (f)  If a dispute arises between the Parties relating to this Agreement,
the following procedure shall be implemented except that either Party may seek
injunctive relief from a court where appropriate in order to maintain the status
quo while this procedure is being followed:

          (i)   The Parties shall hold a meeting promptly, attended by persons
                with decision-making authority regarding the dispute, to attempt
                in good faith to negotiate a resolution of the dispute;
                provided, however, that no such meeting shall be deemed to
                vitiate or reduce the obligations and liabilities of the Parties
                or be deemed a waiver by a party hereto of any remedies to which
                such Party would otherwise be entitled.

          (ii)  If within thirty (30) days after such meeting, the Parties have
                not succeeded in negotiating a resolution of the dispute, they
                agree to submit the dispute to mediation in accordance with the
                then-current Model Procedure for Mediation of Business Disputes
                of the CPR Institute for Dispute Resolution ("CPR") and to bear
                equally the costs of the mediation. The Parties will jointly
                appoint a mutually acceptable mediator, seeking assistance in
                such regard from the CPR if they have been unable to agree upon
                such appointment within twenty (20) days from the conclusion of
                the negotiation period.

          (iii) The Parties agree to participate in good faith in the mediation
                and negotiations related thereto for a period of thirty (30)
                days. If the Parties are not successful in resolving the dispute
                through the mediation, then the Parties agree to submit the
                matter to binding arbitration in accordance with the CPR Rules
                for Non-Administered Arbitration, by a sole arbitrator.

          (iv)  Mediation or arbitration shall take place in the City of
                Dearborn, Michigan. Equitable remedies shall be available in any
                arbitration. Punitive or exemplary damages shall not be awarded.
                This clause is subject to the Federal Arbitration Act, 9
                U.S.C.A. Section 1 et seq., or comparable legislation in
                non-U.S. jurisdictions, and judgment upon the award rendered by
                the arbitrator, if any, may be entered by any court having
                jurisdiction thereof.

     (g)  If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse

                                       16

<PAGE>   17

to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the fullest extent
possible.

     (h)  No failure or delay on the part of any party hereto in the exercise of
any right hereunder shall impair such right or be construed to be a waiver of
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

     (i)  The descriptive headings herein are for reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.

     (j)  No change or amendment will be made to this Agreement except by an
instrument in writing signed on behalf of each of the parties to such agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Master Transfer
Agreement to be executed by their fully authorized representatives as of the day
and year first above written.

VISTEON CORPORATION

By:  /s/ Dan R. Coulson
   ------------------------------------
Name:  Dan R. Coulson
Title: Executive Vice President and
       Chief Financial Officer

FORD MOTOR COMPANY

By: /s/ Malcolm Macdonald
   ------------------------------------
Name:  Malcolm Macdonald
Title: Vice President and Treasurer

                                       17

<PAGE>   18

                                       DEFINED TERMS

                           Affiliate                 Recitals
                           Ancillary Agreements      Recitals
                           ATT Lease                 Sec. 6(e)
                           Balance Sheet             Sec. 1(c)
                           Business                  Recitals
                           Code                      Recitals
                           Controls                  Sec. 7(j)
                           CPR                       Sec. 10(f)(i)
                           Distribution              Recitals
                           Environmental Claims Sec.4(b)(iii)
                           Environmental Law         Sec. 4(b)(iii)
                           FGTI                      Recitals
                           Ford                      Introduction
                           Ford Affiliate            Sec. 7(j)
                           Ford Entity               Sec. 8(c)
                           Ford Group                Sec. 7(b)
                           Ford Guaranty             Sec. 6(a)
                           Ford Indemnitees          Sec. 7(a)
                           Ford Subsidiary           Sec. 7(j)
                           Fuchang                   Ex. 2(a), Sec. (xii)
                           Fu Hua                    Ex. 2(b), Sec. (vii)
                           Hazardous Substance       Sec. 4(b)(iii)
                           Indemnitee                Sec. 7(c)
                           Indemnifying Party        Sec. 7(c)
                           IPO                       Recitals
                           Losses                    Sec. 7(a)
                           Monroe Facility           Sec. 6(e)
                           Monroe Press              Sec. 6(e)
                           Retained Liabilities      Sec. 5(a)
                           Restricted Entity         Sec. 8(c)
                           Restricted Interests      Sec. 8(b)
                           Restricted Period         Sec. 8(b)
                           Separation                Sec. 7(a)
                           Subsidiary                Recitals
                           Subsidiary Transfer Date  Ex. 1(a), Sec. (i)
                           Tax Cost                  Sec. 7(h)
                           Transfer                  Recitals
                           UARCO                     Ex. 2(a), Sec. (C)(ix)
                           US Transfer Date          Sec. 1(c)
                           VDH                       Ex. 2(a), Sec. (b)(v)
                           VGTI                      Recitals

<PAGE>   19

                           VIHI                      Ex. 1(a), Sec. (i)
                           Visteon                   Introduction
                           Visteon Affiliate         Sec. 7(j)
                           Visteon Assets            Sec. 1
                           Visteon Group             Sec. 7(a)
                           Visteon Indemnitees       Sec. 7(b)
                           Visteon Liabilities       Sec. 4(a)
                           Visteon Products          Sec. 4(b)(i)
                           Visteon Product Claims    Sec. 4(b)(i)
                           Visteon Subsidiary        Sec. 7(j)
                           VPCSI                     Ex. 2(a), Sec. (A)(vi)
                           Yan Feng                  Ex. 2(a), Sec. (C)(viii)

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